Sec. 1.5. (a) For a taxable period beginning after December 31, 2020, whenever a taxpayer makes a partial payment on the taxpayer's tax liability, the department shall apply the partial payment in the following order:
(1) To the tax liability of the taxpayer.
(2) To any penalty owed by the taxpayer.
(3) To any interest owed by the taxpayer.
(b) For a taxable period beginning before January 1, 2021, whenever a taxpayer makes a partial payment on the taxpayer's tax liability, the department shall apply the partial payment in the following order:
(1) To any penalty owed by the taxpayer.
(2) To any interest owed by the taxpayer.
(3) To the tax liability of the taxpayer.
In the case of a taxpayer with multiple liabilities, the department may adopt rules under IC 4-22-2 to establish the manner in which payments are applied to the taxpayer's outstanding liabilities.