Interest Payments Policy

If Texas State does not mail or electronically transmit payment to a vendor or their financial institution by the applicable due date, Texas State is liable for interest in compliance with the following provisions:

1. Beginning the day after payment is due, interest accrues on the unpaid balance at the rate determined by the State Comptroller's Office for the fiscal year the payment was first past due. The interest accrual stops on the date Texas State mails or electronically transmits payment to the vendor or their financial institution.
2. Interest will automatically be included with all late payments. This applies to state and local funds, but local accounts will only pay interest if over $5.00.
3. 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.
4. The State of Texas schedules payments to vendors on state funds to maximize the time funds are held in State Treasury. Payments will not be released until just before payment is due, and they are not currently scheduled on local funds.

Reminders

• Texas State must accurately document the date an invoice is first received, 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 Act, 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 such weekend or holiday.