Tax Lien Question #1

[Patrick Sullivan]

In layman terms, what is the explanation of and difference between "interest rate" on a tax lien investment as opposed to "penalty" on a tax lien investment

[Ned Carey]

My guess is in most cases a penalty is a specific amount. Like 5% of the amount due regardless of when paid. An interest rate would be an annualized (or simple interest) amount that would increase as it took longer to pay. 

More importantly though is how does you state or county law define it. Laws, and regulations regarding tax sales vary tremendously from state to state and in some cases county to county.