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KEITH STAATS
Executive Director
Tax Institute
(217) 522-5512 ext. 231
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August 31, 2018
State and Local Tax this week
Illinois General Assembly
The General Assembly returns to Springfield for the fall veto session on November 13. The House and Senate are scheduled to be in session November 13 through 15 and November 27 through 29.
No new tax-related legislation was filed this week:
The following tax-related legislation was signed by the Governor this week:
SB 585 - (P.A. 100-1070) Provides that each tax purchaser shall pay to the county collector an automation fee set by the county collector of not more than $10 for each item purchased (currently, each county collector may assess such a fee). Provides that the indemnity fee in counties with less than 3,000,000 inhabitants shall be not more than $20 (currently, the fee is $20). Makes changes concerning the fee imposed by the county board on each person purchasing property at a sale under the Code for payment of interest and costs. In a Section concerning tax sale procedures, provides that county collectors may, when applicable, eject tax bidders who disrupt the tax sale or use illegal bid practices.
SB 3085 - (P.A. 100-1095) Provides that county collectors shall no longer publish delinquent or forfeited property taxes for certain undeveloped but platted and subdivided property or for any other exempt property.
SB 3093 - (P.A. 100-1077) Makes changes concerning the maximum reduction under the general homestead exemption for life care facilities and provides that the changes are effective for the 2018 tax year and thereafter.
The following tax-related legislation was amendatorily vetoed by the Governor:
SB 1737 - The Governor's veto message states in pertinent part:
"Today I return Senate Bill 1737 with specific recommendations for change.
This omnibus bill overhauls the Illinois Insurance Code on a number of fronts, including reforming Illinois' handling of reinsurers to conform with best practices, updating our captive insurance law to be more attractive to companies that use this insurance option, and adds flexibility to the process of dividing domestic stock companies. However, it also would impose detrimental new limitations on certain types of health coverage upon Illinois consumers and would overregulate our competitive market for workers' compensation insurance.
Portions of this legislation are both necessary and wise, such as the provisions that bring Illinois in line with national and international accreditation standards for reinsurers. The changes in collateral requirements are based on a tested model and will bring Illinois in equivalence with international regulatory frameworks. Similarly, the updates to the captive insurance regulatory structure are in line with other states, and will help Illinois overcome its competitive disadvantage in attracting the companies that offer this product to Illinois businesses. It also further increases clarity for domestic stock companies undergoing corporate divisions. However, this legislation imposes concerning additional regulatory barriers to short-term limited-duration health plans (STLDs) and workers' compensation insurance."
SB 2641 -
The Governor's amendatory veto message reads in pertinent part as follows:
"Today, I return Senate Bill 2641 with specific recommendations for change.
Peer-to-peer car sharing is an innovative new service that simultaneously allows vehicle owners the freedom to realize additional income on an existing household asset, while also affording consumers a new service to meet their mobility needs. Illinoisans can expect to see this expansion result in lower prices and more choice.
There are meaningful and direct benefits to car sharing that Illinoisans will enjoy at every level; it will reduce congestion, lower the strain placed on scarce parking space inventory, and it will make it easier for people to afford vehicles while simultaneously lowering the cost of transportation for those who cannot afford full-time car ownership.
Oversight of this new industry is important to protect consumers; however, we should be careful not to unintentionally smother its growth before it has a chance to get off the ground.
Senate Bill 2641 was passed rapidly by the General Assembly in the final hours of the legislative session, potentially strangling a nascent new service industry while also adding a large tax increase on the millions of Illinoisans who desire to use this service as either car owners or car users; all without any meaningful time for public input or debate.
Many of the structures this sweeping legislation proposes are ill-suited to thoughtfully regulate this new industry. For example, it is unclear that the current car rental tax rate, which in some cases was meant to compensate for the benefits to the rental car industry derived from the positive spillover of conferences and tourism, has anything to do with Illinoisans providing a nominal service for their neighbor's trip to the grocery store or weekend vacation out of town. There could also be instances of redundant taxation where a user is taxed on a taxi, Uber or Lyft ride from the airport to a nearby household, just to be taxed again on the vehicle they reserved through a ride sharing platform. Further state and local regulatory burdens that make little or no sense placed on car sharing platforms include regulations regarding pamphlets and font sizes, print advertising, real estate design requirements, document inspection, and other restrictions that undermine the innovation in the platform.
In contrast, this recommended amendment was crafted in close coordination with the broader stakeholder community, with the guiding principle of ensuring maximum consumer choice and an equitable treatment under tax law."
SB 2921 - The Governor's amendatory veto message reads in pertinent part as follows:
"This legislation amends the State Treasurer Act to authorize the Treasurer to purchase and renovate a building and amends The State Finance Act to divert funds collected from Illinois businesses under the deeply flawed Revised Uniform Unclaimed Property Act ("RUUPA") enacted last year over my veto of SB 9. Under existing law, these moneys are dedicated for the funding of the unfunded liabilities of the State retirement systems and Senate Bill 2921 would divert a portion of the funds earmarked for the pension systems.
RUUPA is problematic in a number of ways. It is improperly retroactive, has a statute of limitations that is illusory, includes estimation provisions that will lead to unrealistic and inflated assessments, authorizes the Treasurer to utilize third-party contingent fee auditors to harm the business community, and in combination with the foregoing imposes a stealth tax increase on Illinois businesses by eliminating the longstanding business-to-business exemption.
The business community should not be subjected to a hidden tax and the Treasurer should not be spending funds improperly diverted from Illinois businesses to purchase and renovate a building. As we reconsider the scope of the Treasurer's Authority pursuant to RUUPA, we should be looking to minimize the negative impact of this Act, as opposed to allowing it to be used as a mechanism to fund the Treasurer's building projects."
The Treasurer is less than pleased with the amendatory veto and vowed an attempt to override the Governor. See SJ-R article,
Rulemaking
The September 1 edition of the
Illinois Register
did not contain any new rulemakings by t
he Illinois Department of Revenue or the Department of Commerce and Economic Opportunity.
Court cases
Apple Inc. v. The City of Chicago was filed in the Circuit Court of Cook County on August 27, by Cate Battin of Tax Institute member law firm McDermott Will & Emery. This case is a challenge to the expansion of the Chicago Amusement Tax to Apple's music streaming services.
Publications
Please send me links to your publications for inclusion in the newsletter. The Illinois Chamber also maintains the
Chamber Dispatch Blog on our website. This blog is is open to the general public. We are happy to receive short submissions from members for inclusion on the blog. We can also include short summaries with links to articles or publications. Contact me for additional details on how to participate.
Tax Tribunal
No new decisions were issued by the Tribunal this week. None of the new cases recently filed with the Tax Tribunal raise unique issues.
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