{"formats":[{"name":"JSON","format":"json","url":"\/downloads\/2025\/code-json\/2.2-4355.json"},{"name":"Plain Text","format":"text","url":"\/downloads\/2025\/code-text\/2.2-4355.txt"},{"name":"XML","format":"xml","url":"\/downloads\/2025\/code-xml\/2.2-4355.xml"},{"name":"HTML","format":"html","url":"\/downloads\/2025\/code-html\/2.2-4355.html"}],"law_id":72792,"edition_id":1,"section_id":72792,"structure_id":14719,"section_number":"2.2-4355","catch_line":"Interest penalty; exceptions","history":"1984, c. 736, \u00a7 11-62.5; 1985, c. 101; 1992, c. 75; 2001, c. 844.","full_text":"A\n\nInterest shall accrue, at the rate determined pursuant to subsection B, on all amounts owed by a state agency to a vendor that remain unpaid after seven days following the payment date. However, nothing in this section shall affect any contract providing for a different rate of interest, or for the payment of interest in a different manner.B\n\nThe rate of interest charged a state agency pursuant to subsection A shall be the base rate on corporate loans (prime rate) at large United States money center commercial banks as reported daily in the publication entitled The Wall Street Journal. Whenever a split prime rate is published, the lower of the two rates shall be used. However, in no event shall the rate of interest charged exceed the rate of interest established pursuant to § 58.1-1812.C\n\nNotwithstanding subsection A, no interest penalty shall be charged when payment is delayed because of disagreement between a state agency and a vendor regarding the quantity, quality or time of delivery of goods or services or the accuracy of any invoice received for the goods or services. The exception from the interest penalty provided by this subsection shall apply only to that portion of a delayed payment that is actually the subject of the disagreement and shall apply only for the duration of the disagreement.D\n\nThis section shall not apply to § 2.2-4333 pertaining to retainage on construction contracts, during the period of time prior to the date the final payment is due. Nothing contained herein shall prevent a contractor from receiving interest on such funds under an approved escrow agreement.E\n\nNotwithstanding subsection A, no interest penalty shall be paid to any debtor on any payment, or portion thereof, withheld pursuant to the Comptroller’s Debt Setoff Program, as authorized by the Virginia Debt Collection Act (§ 2.2-4800 et seq.), commencing with the date the payment is withheld. If, as a result of an error, a payment or portion thereof is withheld, and it is determined that at the time of setoff no debt was owed to the Commonwealth, then interest shall accrue at the rate determined pursuant to subsection B on amounts withheld that remain unpaid after seven days following the payment date.","order_by":null,"text":{"0":{"id":262222,"text":"Interest shall accrue, at the rate determined pursuant to subsection B, on all amounts owed by a state agency to a vendor that remain unpaid after seven days following the payment date. However, nothing in this section shall affect any contract providing for a different rate of interest, or for the payment of interest in a different manner.","type":"section","prefixes":["A"],"prefix":"A","entire_prefix":"A","prefix_anchor":"A","level":1,"next_prefix":"B"},"1":{"id":262223,"text":"The rate of interest charged a state agency pursuant to subsection A shall be the base rate on corporate loans (prime rate) at large United States money center commercial banks as reported daily in the publication entitled The Wall Street Journal. Whenever a split prime rate is published, the lower of the two rates shall be used. However, in no event shall the rate of interest charged exceed the rate of interest established pursuant to § 58.1-1812.","type":"section","prefixes":["B"],"prefix":"B","entire_prefix":"B","prefix_anchor":"B","level":1,"prior_prefix":"A","next_prefix":"C"},"2":{"id":262224,"text":"Notwithstanding subsection A, no interest penalty shall be charged when payment is delayed because of disagreement between a state agency and a vendor regarding the quantity, quality or time of delivery of goods or services or the accuracy of any invoice received for the goods or services. The exception from the interest penalty provided by this subsection shall apply only to that portion of a delayed payment that is actually the subject of the disagreement and shall apply only for the duration of the disagreement.","type":"section","prefixes":["C"],"prefix":"C","entire_prefix":"C","prefix_anchor":"C","level":1,"prior_prefix":"B","next_prefix":"D"},"3":{"id":262225,"text":"This section shall not apply to § 2.2-4333 pertaining to retainage on construction contracts, during the period of time prior to the date the final payment is due. Nothing contained herein shall prevent a contractor from receiving interest on such funds under an approved escrow agreement.","type":"section","prefixes":["D"],"prefix":"D","entire_prefix":"D","prefix_anchor":"D","level":1,"prior_prefix":"C","next_prefix":"E"},"4":{"id":262226,"text":"Notwithstanding subsection A, no interest penalty shall be paid to any debtor on any payment, or portion thereof, withheld pursuant to the Comptroller’s Debt Setoff Program, as authorized by the Virginia Debt Collection Act (§ 2.2-4800 et seq.), commencing with the date the payment is withheld. If, as a result of an error, a payment or portion thereof is withheld, and it is determined that at the time of setoff no debt was owed to the Commonwealth, then interest shall accrue at the rate determined pursuant to subsection B on amounts withheld that remain unpaid after seven days following the payment date.","type":"section","prefixes":["E"],"prefix":"E","entire_prefix":"E","prefix_anchor":"E","level":1,"prior_prefix":"D"}},"ancestry":[{"id":14719,"edition_id":1,"name":"Prompt Payment","identifier":"4","label":"article","depth":5,"order_by":1,"parent_id":12752,"metadata":{},"date_created":"2026-06-26 03:49:31","date_modified":"2026-06-26 03:49:31","permalink":{"id":177277,"object_type":"structure","relational_id":14719,"identifier":"4","token":"2.2\/II\/B\/43\/4","url":"\/2.2\/II\/B\/43\/4\/","edition_id":1,"permalink":0,"preferred":1}},{"id":12752,"edition_id":1,"name":"Virginia Public Procurement Act","identifier":"43","label":"chapter","depth":4,"order_by":1,"parent_id":12751,"metadata":{},"date_created":"2026-06-26 03:43:51","date_modified":"2026-06-26 03:43:51","permalink":{"id":176989,"object_type":"structure","relational_id":12752,"identifier":"43","token":"2.2\/II\/B\/43","url":"\/2.2\/II\/B\/43\/","edition_id":1,"permalink":0,"preferred":1}},{"id":12751,"edition_id":1,"name":"Transaction of Public Business","identifier":"B","label":"part","depth":3,"order_by":1,"parent_id":12750,"metadata":{},"date_created":"2026-06-26 03:43:51","date_modified":"2026-06-26 03:43:51","permalink":{"id":176445,"object_type":"structure","relational_id":12751,"identifier":"B","token":"2.2\/II\/B","url":"\/2.2\/II\/B\/","edition_id":1,"permalink":0,"preferred":1}},{"id":12750,"edition_id":1,"name":"Administration of State Government","identifier":"II","label":"subtitle","depth":2,"order_by":1,"parent_id":12749,"metadata":{},"date_created":"2026-06-26 03:43:51","date_modified":"2026-06-26 03:43:51","permalink":{"id":176253,"object_type":"structure","relational_id":12750,"identifier":"II","token":"2.2\/II","url":"\/2.2\/II\/","edition_id":1,"permalink":0,"preferred":1}},{"id":12749,"edition_id":1,"name":"Administration of Government","identifier":"2.2","label":"title","depth":1,"order_by":1,"parent_id":null,"metadata":{},"date_created":"2026-06-26 03:43:51","date_modified":"2026-06-26 03:43:51","permalink":{"id":171453,"object_type":"structure","relational_id":12749,"identifier":"2.2","token":"2.2","url":"\/2.2\/","edition_id":1,"permalink":0,"preferred":1}}],"structure_contents":[{"id":68973,"structure_id":14719,"section_number":"2.2-4347","catch_line":"Definitions","url":"\/2.2-4347\/","token":"2.2\/II\/B\/43\/4\/2.2-4347","metadata":false},{"id":84033,"structure_id":14719,"section_number":"2.2-4348","catch_line":"Exemptions","url":"\/2.2-4348\/","token":"2.2\/II\/B\/43\/4\/2.2-4348","metadata":false},{"id":71738,"structure_id":14719,"section_number":"2.2-4349","catch_line":"Retainage to remain valid","url":"\/2.2-4349\/","token":"2.2\/II\/B\/43\/4\/2.2-4349","metadata":false},{"id":56401,"structure_id":14719,"section_number":"2.2-4350","catch_line":"Prompt payment of bills by state agencies","url":"\/2.2-4350\/","token":"2.2\/II\/B\/43\/4\/2.2-4350","metadata":false},{"id":64826,"structure_id":14719,"section_number":"2.2-4350.1","catch_line":"Prohibition on payment without an appropriation; prohibition on IOUs","url":"\/2.2-4350.1\/","token":"2.2\/II\/B\/43\/4\/2.2-4350.1","metadata":false},{"id":75782,"structure_id":14719,"section_number":"2.2-4351","catch_line":"Defect or impropriety in the invoice or goods and\/or services received","url":"\/2.2-4351\/","token":"2.2\/II\/B\/43\/4\/2.2-4351","metadata":false},{"id":73904,"structure_id":14719,"section_number":"2.2-4352","catch_line":"Prompt payment of bills by localities","url":"\/2.2-4352\/","token":"2.2\/II\/B\/43\/4\/2.2-4352","metadata":false},{"id":82180,"structure_id":14719,"section_number":"2.2-4353","catch_line":"Date of postmark deemed to be date payment is made","url":"\/2.2-4353\/","token":"2.2\/II\/B\/43\/4\/2.2-4353","metadata":false},{"id":67731,"structure_id":14719,"section_number":"2.2-4354","catch_line":"Payment clauses to be included in contracts","url":"\/2.2-4354\/","token":"2.2\/II\/B\/43\/4\/2.2-4354","metadata":false},{"id":72792,"structure_id":14719,"section_number":"2.2-4355","catch_line":"Interest penalty; exceptions","url":"\/2.2-4355\/","token":"2.2\/II\/B\/43\/4\/2.2-4355","metadata":false},{"id":86376,"structure_id":14719,"section_number":"2.2-4356","catch_line":"Comptroller to file annual report","url":"\/2.2-4356\/","token":"2.2\/II\/B\/43\/4\/2.2-4356","metadata":false}],"previous_section":{"id":67731,"structure_id":14719,"section_number":"2.2-4354","catch_line":"Payment clauses to be included in contracts","url":"\/2.2-4354\/","token":"2.2\/II\/B\/43\/4\/2.2-4354","metadata":false},"next_section":{"id":86376,"structure_id":14719,"section_number":"2.2-4356","catch_line":"Comptroller to file annual report","url":"\/2.2-4356\/","token":"2.2\/II\/B\/43\/4\/2.2-4356","metadata":false},"metadata":false,"official_url":"https:\/\/law.lis.virginia.gov\/vacode\/2.2-4355\/","history_text":"

This law was first created in 1984. The record of its establishment is cataloged in chapter 736 of that year\u2019s edition of \u201cActs of Assembly,\u201d the annual state publication listing all changes made to the Code of Virginia in that year. Unfortunately, the 1984 \u201cActs\u201d aren\u2019t available online. It has been modified 3 times. Those modifications are cataloged by \u201cThe Acts of Assembly,\u201d a state publication, by year and chapter. Those modifications that can be read on the General Assembly\u2019s website will be linked accordingly. Those modifications are as follows: in 1985, chapter 101; in 1992, chapter 75; in 2001, chapter 844<\/a>.<\/p>","references":[{"id":87261,"section_number":"11-4.6","catch_line":"Required contract provisions in construction contracts","order_by":null,"url":"\/11-4.6\/"},{"id":67540,"section_number":"2.2-2342","catch_line":"Payments to Commonwealth or political subdivisions thereof; payments to the City of Hampton","order_by":null,"url":"\/2.2-2342\/"}],"refers_to":[{"id":53971,"section_number":"2.2-4333","catch_line":"Retainage on construction contracts","order_by":null,"url":"\/2.2-4333\/"},{"id":85840,"section_number":"2.2-4800","catch_line":"Policy of the Commonwealth; collection of accounts receivable","order_by":null,"url":"\/2.2-4800\/"}],"permalink":{"id":177315,"object_type":"law","relational_id":72792,"identifier":"2.2-4355","token":"2.2\/II\/B\/43\/4\/2.2-4355","url":"\/2.2-4355\/","edition_id":1,"permalink":0,"preferred":1},"url":"\/2.2-4355\/","token":"2.2\/II\/B\/43\/4\/2.2-4355","dublin_core":{"Title":"Interest penalty; exceptions","Type":"Text","Format":"text\/html","Identifier":"\u00a7 2.2-4355","Relation":"Code of Virginia"},"html":"\n\t\t\t\t\t\t

A.<\/span> Interest shall accrue, at the rate determined pursuant to subsection B, on all amounts owed by a state agency<\/span> to a vendor that remain unpaid after seven days following the payment date<\/span>. However, nothing in this section shall affect any contract<\/span> providing for a different rate of interest, or for the payment of interest in a different manner. <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

B.<\/span> The rate of interest charged a state agency<\/span> pursuant to subsection A shall be the base rate on corporate loans (prime rate) at large United States money center commercial banks as reported daily in the publication entitled The Wall Street Journal. Whenever a split prime rate is published, the lower of the two rates shall be used. However, in no event shall the rate of interest charged exceed the rate of interest established pursuant to § 58.1-1812<\/a>. <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

C.<\/span> Notwithstanding subsection A, no interest penalty<\/span> shall be charged when payment is delayed because of disagreement between a state agency<\/span> and a vendor regarding the quantity, quality or time of delivery of goods<\/span> or services<\/span> or the accuracy of any invoice received for the goods<\/span> or services<\/span>. The exception from the interest penalty<\/span> provided by this subsection shall apply only to that portion of a delayed payment that is actually the subject of the disagreement and shall apply only for the duration of the disagreement. <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

D.<\/span> This section shall not apply to § 2.2-4333<\/a> pertaining to retainage on construction contracts<\/span>, during the period of time prior to the date the final payment is due. Nothing contained herein shall prevent a contractor<\/span> from receiving interest on such funds under an approved escrow agreement. <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

E.<\/span> Notwithstanding subsection A, no interest penalty<\/span> shall be paid to any debtor<\/span> on any payment, or portion thereof, withheld pursuant to the Comptroller’s Debt Setoff Program, as authorized by the Virginia Debt Collection Act (§ 2.2-4800<\/a> et seq.), commencing with the date the payment is withheld. If, as a result of an error, a payment or portion thereof is withheld, and it is determined that at the time of setoff no debt was owed to the Commonwealth, then interest shall accrue at the rate determined pursuant to subsection B on amounts withheld that remain unpaid after seven days following the payment date<\/span>. <\/i><\/a><\/p><\/section>","plain_text":" CODE OF VIRGINIA\n\nINTEREST PENALTY; EXCEPTIONS (\u00a7 2.2-4355)\n\nA. Interest shall accrue, at the rate determined pursuant to subsection B, on\nall amounts owed by a state agency to a vendor that remain unpaid after seven\ndays following the payment date. However, nothing in this section shall affect\nany contract providing for a different rate of interest, or for the payment of\ninterest in a different manner.\n\nB. The rate of interest charged a state agency pursuant to subsection A shall be\nthe base rate on corporate loans (prime rate) at large United States money\ncenter commercial banks as reported daily in the publication entitled The Wall\nStreet Journal. Whenever a split prime rate is published, the lower of the two\nrates shall be used. However, in no event shall the rate of interest charged\nexceed the rate of interest established pursuant to § 58.1-1812.\n\nC. Notwithstanding subsection A, no interest penalty shall be charged when\npayment is delayed because of disagreement between a state agency and a vendor\nregarding the quantity, quality or time of delivery of goods or services or the\naccuracy of any invoice received for the goods or services. The exception from\nthe interest penalty provided by this subsection shall apply only to that\nportion of a delayed payment that is actually the subject of the disagreement\nand shall apply only for the duration of the disagreement.\n\nD. This section shall not apply to § 2.2-4333 pertaining to retainage on\nconstruction contracts, during the period of time prior to the date the final\npayment is due. Nothing contained herein shall prevent a contractor from\nreceiving interest on such funds under an approved escrow agreement.\n\nE. Notwithstanding subsection A, no interest penalty shall be paid to any debtor\non any payment, or portion thereof, withheld pursuant to the Comptroller’s\nDebt Setoff Program, as authorized by the Virginia Debt Collection Act (§\n2.2-4800 et seq.), commencing with the date the payment is withheld. If, as a\nresult of an error, a payment or portion thereof is withheld, and it is\ndetermined that at the time of setoff no debt was owed to the Commonwealth, then\ninterest shall accrue at the rate determined pursuant to subsection B on amounts\nwithheld that remain unpaid after seven days following the payment date.\n\nHISTORY: 1984, c. 736, \u00a7 11-62.5; 1985, c. 101; 1992, c. 75; 2001, c. 844.","edition":{"id":1,"name":"2025","slug":"2025","date_created":"2026-06-21 22:39:22","date_modified":"2026-06-21 22:39:22","current":1,"order_by":1,"last_import":null}}