A. NEGLIGENCE PENALTY. If any part of a deficiency in tax is determined to be due to negligence or intentional disregard of these rules or state law, then a penalty of ten percent (10%) of the deficiency shall be added. If a fraud penalty, a failure to file penalty, or a failure to pay penalty is assessed, no negligence penalty will be assessed.

B. FRAUD PENALTY. If any part of a deficiency in tax required to be shown on a return is determined to be due to fraud, there shall be added to the tax an amount equal to fifty percent (50%) of the deficiency, in addition to any interest provided by law. If a fraud penalty is assessed, no negligence penalty, failure to file penalty, or failure to pay penalty will be assessed.

C. FAILURE TO FILE PENALTY. If a taxpayer fails to file a return on or before the first day of the month following the month in which a return was required to be filed, there shall be added to the tax a penalty of five percent (5%) of the tax due for each month or fraction of a month that the tax remains unreported. The penalty shall not exceed thirty-five percent (35%) of the tax due. No penalty will be assessed if the failure to file is due to reasonable cause and not to willful neglect. If a penalty is assessed for failure to file a return, no penalty will be assessed for failure to pay tax.

D. FAILURE TO PAY PENALTY. If a taxpayer fails to pay the reported tax on or before the first day of the month following the month in which the payment was required, there shall be added to the tax a penalty of five percent (5%) of the tax due for each month or fraction of a month that the tax remains unpaid. The penalty shall not exceed thirty-five percent (35%) of the tax due. No penalty will be assessed if the failure to pay is due to reasonable cause and not to willful neglect. If a penalty is assessed for failure to pay tax, no penalty will be assessed for failure to file a return.

E. A penalty of $50.00 per return will be assessed when a taxpayer continues to disregard previous notification by the Director that the taxpayer has failed to include required information on a return, included false information on a return, failed to file a return, or failed to notify the Director that the taxpayer is no longer required to file a return. No penalty will be assessed if the taxpayer's failure is due to reasonable cause and not willful neglect.

F. If a taxpayer that is required to pay tax by electronic funds transfer fails to do so on or before the due date, there shall be added to the tax a penalty of five percent (5%) of the tax due.

G. If a taxpayer that is required to make prepayment of sales tax fails to do so on or before the due date of each prepayment, there shall be added to the tax a penalty of five percent (5%) of the amount of the prepayment due. A taxpayer who elects to pay eighty percent (80%) of its tax liability for the month on or before the twenty-fourth (24th) of the month, and fails to do so will not be assessed the five percent (5%) penalty if the taxpayer proves that more than twenty percent (20%) of its tax liability arose from sales that occurred after the twenty-fourth and before the last day of the month.