Interest Payments Policy
If Texas State does not mail or electronically transmit a payment to a vendor or the vendor's financial institution by the applicable due date, Texas State is liable to the vendor for interest in compliance with the following provisions:
- Beginning on the day after the payment is due, interest accrues on the unpaid balance at the rate of 4.25% annually, effective 09/01/2009. The interest ceases to accrue on the date Texas State mails or electronically transmits the payment to the vendor or the vendor's financial institution.
- Interest will automatically be included to the vendor for all late payments. This applies to state and local funds, but local accounts will only pay interest if it is over $5.00.
- All invoices must document the date these were first received by Texas State. The goods/services received date must be documented on the appropriate receiving document.
- The State of Texas schedules payments to vendors on state funds because they want to maximize the time that funds are held by the State Treasury. Payments will not be released until just before the payment becomes due. Payments are not currently scheduled on local funds.
- Texas State must accurately document the date that it first receives an invoice. This is true regardless of any mailing instructions given to the vendor through a purchasing agreement or any other means.
- When refusing interest, specific documentation must be kept and filed to support the refusal to pay interest.
- Under the Prompt Payment Law, Texas State may not pay late fees, penalties, finance charges or any other compensation.
- Vendors may not waive their right to automated prompt payment interest. Vendors who do not wish to receive automated prompt payment interest may return the interest.
- Payments due on weekends or holidays must be distributed by mail or electronically before the weekend or the holiday.