TAX INSTITUTE
Newsletter

KEITH STAATS

Executive Director
Tax Institute

 
 
(217) 522-5512 ext. 231

November 16, 2018
State and Local Tax this week

Illinois General Assembly
The General Assembly returned to Springfield for the fall veto session on November 13. 

The House and Senate were in session November 13 through 15.  The House and the Senate are scheduled to return to Springfield for the second week of the veto session on November 27 through 29.

The General  Assembly considered a number of the Governor's vetos and amendaory vetos.

SB 1737 - This bill contains a number of amendments to the Insurance Code and includes amendments to the Domestic Captive Insurance article of the Insurance Code. The amendments to the captive insurance provisions correct some of the issues generated by anti-business legislation enacted during the Quinn administration.

The Governor amendatorily vetoed certain non-captive insurance provisions of the legislation. On Wednesday, the Senate overrode the Governor's amendatory veto unanimously.

SB 2641 - The bill deals with peer-to-peer car sharing.  The Governor amendatorily vetoed the bill.  The Governor's amendatory veto was overridden by the Senate on Wednesday.   

Among other changes, the Governor's amendatory veto corrected a tax-related problem with the legislation that passed the General Assembly during the spring session.  As passed by the General Assembly, the bill would authorize a complete exemption from sales taxes for individuals who purchase automobiles for use in peer-to-peer ride sharing. There has been discussion of a trailer bill that would correct this problem with the tax provision.

SB 2297 - The bill as passed by the General Assembly provides that a rescue squad district's board of trustees may certify a question to the voters of the district requesting to levy a special tax at a rate not to exceed 0.40% of the value of all taxable property within the district as equalized or assessed by the Department of Revenue for the purpose of providing an ambulance service or supporting an existing ambulance service.

The Governor amendatorily vetoed the bill to add a provision to the Rescue Squad Districts Act that permits a rescue squad district's board of trustees to certify a question to the voters of the district requesting to reduce or discontinue the district's ambulance service tax. Recommends adding a provision to the Levy and Extension Process Article of the Property Tax Code that permits a taxing district's governing body to certify a proposition to the voters of the taxing district requesting to decrease the taxing district's aggregate extension.

The Senate overrode the Governor's amendatory veto on Wednesday.  The bill is now in the House for consideration of an override.

SB 2921 - At the suggestion of the Illinois Chamber of Commerce, the Governor amendatorily vetoed a bill that contained a last minute attempt by the Treasurer to purchase a building using unclaimed property funds currently earmarked for the state pension funds.  

The Governor's amendatory veto gutted the bill and replaced it with language amending the Revised Uniform Unclaimed Property Act to include changes to RUUPA proposed by the Illinois Chamber of Commerce.

The sponsor of SB 2921 has not filed a motion to either override or accept the Governor's amendatory veto.  If no action is taken on the bill the bill will be dead.

The House Revenue committee met on Wednesday.. The following bills were considered and voted to the floor by the committee:

HB 1192 - The committee approved a "gut and replace" amendment that, as amended, extends the life of certain TIFs. 

HB 1193 - The committee approved a "gut and replace" amendment that, as amended, extends the life of certain TIFs.  The bill passed the House on Thursday.

The Senate Revenue committee met on Wednesday. The following bills were considered by the committee:.

SB 3445 - The committee voted in favor of a motion to concur with amendments to the bill made by the House.  

This bill was an initiative of the Illinois Department of Revenue. The bill consists largely of technical amendments.  Among the changes in the bill are amendments to the various excise taxes to provide that if there is an overpayment of tax reported on a return, the overpayment can be used as a credit against taxes due in the following month, rather than the current requirement that the taxpayer must file a claim for refund for the overpayment. For many years, the Retailers' Occupation and Use tax acts have authorized rolling an overpayment forward to a subsequent month without the necessity of filing an amended return.

HB 4560 - As amended by the Senate, the bill modifies the Special County Retailers' Occupation Tax for Public Safety, Public Facilities or Transportation to extend the scope of the tax to include use by counties for mental health or substance abuse purposes. In order to impose this tax, it must be approved by the county board and approved by a voter referendum. The bill was passed by the Senate unanimously on Thursday.

Other legislative action:

HB 156 - There was a House motion to concur with a Senate amendment to the bill.  After the bill passed the House last spring, the Senate gutted the original bill and amended it to amend the Enterprise Zone Act provisions dealing with zone qualifications to authorize the former Zion nuclear power plant to qualify as an enterprise zone.

HB 278 - The bill is on third reading in the Senate.  The legislation modifies the formula by which a portion of income tax receipts are distributed to local governments.  The bill originally passed the House in 2017 and has remained dormant in the Senate Assignments committee until it was revived and placed on second reading in the Senate on November 13.

Rulemaking  
The November 16 edition of the Illinois Register  contains one adopted rulemaking by the Illinois Department of Revenue.  The Department adopted rules for the Invest in Kids program.  The Department provided the following description of the rules:

 The rules provide a general overview of the program, identify the requirements for an applicant to become approved as a scholarship granting organization (SGO), explain how taxpayers can apply to the Department for contribution authorization certificates (CACs) that permit taxpayers to make contributions to SGOs and receive tax credits under the Act, identify the requirements for SGOs to issue certificates of receipt (CORs) to taxpayers making contributions, and explain the process under which SGOs grant scholarships to students under the Act.  The rules also outline the responsibilities of qualified schools receiving funds under the Act, custodian and student responsibilities, and SGO reporting and recertification requirements.  Illustration A contains a list of the regions into which the State has been divided by the Department to comply with the Act's requirement that credits be awarded in a manner that is geographically proportionate to enrollment in recognized non-public schools. 

There are no rulemakings by the Department of Commerce and Economic Opportunity in the November 16 edition of the Illinois Register.

Tax Tribunal 
Mike Pieczonka, who served briefly as the General Counsel of the Illinois Department of Revenue during the early days of the Rauner administration, has been appointed to the Tribunal as a third judge.  Link

No new decisions were issued this week by the Tribunal.   Three of the new cases filed with the Tribunal may be of interest. 

MIchael and Jennifer Rothman v. Department of Revenue is yet another case in which the Department is asserting that taxpayers remain Illinois residents.  In this case, the taxpayers paid the tax assessed by the Department and filed claims for refund, which were denied.  A review of the facts outlined in the taxpayers' petition challenging the refund claim denial doesn't provide any basis for the Department's conclusion that the Rothmans remained residents.  The facts seem to be clearly favorable to the claim of nonresidence by the Rothmans.  The taxpayers are represented by Mike Wynne of Tax Institute member law firm Jones Day.

Peabody Arclar Mining v. Department of Revenue and its companion case involves the impact of a bankruptcy on a sales tax audit.  According to the petitions, the taxpayer made numerous requests for an expedited sales tax audit because of the bankruptcy.  For unknown reasons, the Department did not accede to these requests and Issued proposed assessments based on the use of error rates from a prior audit cycle, despite claims by the taxpayer that the prior error rates were not reflective of activities during the audit periods at issue.  An additional complication involves the fact that the audit period contains periods both inside and outside of the period covered by the bankruptcy filing.


Key Legislation

 

 

Business Regulation

 

Employment Law

 

Employment Law

 





Upcoming Events

December 13:  Half day seminar sponsored by BDO and the Illinois Chamber of Commerce, "The Year in Review of State and Local Taxes."   Information and Registration


December 17:  Fourth quarter meeting of the Tax Institute. 






 

Connect with the Chamber

© Illinois Chamber of Commerce
 

Not a member and want to learn more about the Illinois Chamber click here to contact Jeanette Anderson