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August 24, 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.
New tax-related legislation was filed this week:
HB 5949 Amends the Illinois Income Tax Act and creates an income tax deduction in an amount equal to the out-of-pocket costs incurred by a taxpayer during the taxable year for expenses associated with long-term care for the taxpayer or the taxpayer's family member.
I would note that most new legislation filed at this time of the year is filed for "political" purposes. It would be necessary for any new legislation to pass the the General Assembly during the veto session before the 100th General Assembly ends in January 2019.
The following tax-related legislation was signed by the Governor this week:
HB 4724 - (P.A. 100-1006)
Amends the Illinois Hydraulic Fracturing Tax Act. Provides that first purchasers shall not be required to obtain exemption certificates from the producer until the first high volume horizontal hydraulic fracturing permit has been approved by the Department of Natural Resources after the effective date of the amendatory Act.
SB 2539 - (P.A. 100-0975) Amends the Property Tax Code. In a Section requiring a receipt for payment of certain fees and costs incurred by a certificate holder, provides that the county clerk shall write or stamp the date of receiving upon the receipt. In a Section concerning notice of an extended period of redemption, provides that the county clerk shall write or stamp the date of receipt upon the notice, and provides that the county clerk is not required to extend the period of redemption unless the purchaser or his or her assignee obtains that acknowledgement of delivery.
SB 3141 - (P.A. 100-0940) This was a Department of Revenue initiative. As originally introduced the bill amends the Use Tax Act, the Service Use Tax Act, the Service Occupation Tax Act, the Retailers' Occupation Tax Act, the Cigarette Tax Act, and the Cigarette Use Tax Act. Provides that a taxpayer is prohibited from introducing into evidence in a proceeding before the Department of Revenue, Tax Tribunal, or court any books or records that the taxpayer failed to produce to the Department for examination, unless the books and records are received by the Department no less than 5 business days prior to seeking introduction of the books and records in the proceeding. Sets forth penalties for failure to keep or produce certain books and records. Requires distributors and secondary distributors who purchase cigarettes for shipment into Illinois from a point outside this State to make the invoices available for inspection upon demand by a duly authorized employee of the Department. Provides that the Department may assess taxes, penalties, and interest on original packages of cigarettes that do not contain property tax stamps. Provides that, if a person fails to produce records for inspection by the Department upon request, a prima facie presumption shall arise that the person has failed to keep the records so required. Provides that the sale of individual or loose cigarettes is prohibited. Amends the Tobacco Products Tax Act of 1995 to make changes concerning penalties for failure to keep and produce books and records.
The bill was amended, and as it passed the Senate, it r
einserted the provisions of the introduced bill with the following changes: (1) removes provisions providing that the taxpayer may not introduce books and records into evidence unless the books and records are received by the Department of Revenue no less than 5 business days prior to seeking introduction of the books or records; and (2) in provisions concerning penalties for failure to produce books or records, removes specific language concerning officers or directors of corporations, partners or members of partnerships, and managers or members of limited liability companies; and (3) makes other technical corrections.
The bill was further amended in the House to provide that penalties imposed for failure to keep books and records shall not apply if the taxpayer shows that he or she acted with ordinary business care and prudence and added provisions concerning rulemaking.
The Senate concurred with the House amendments.
The following tax-related legislation was amendatorily vetoed by the Governor:
SB 3041 Amends the County Care for Persons with Developmental Disabilities Act. Changes the short title of the Act to the Community Care for Persons with Developmental Disabilities Act. Makes the Act applicable to counties, municipalities, and townships (rather than just counties). Adds definitions, including "developmental disability". Allows the board of directors to add to the definition of "developmental disability" in its jurisdiction by a majority vote. Provides that the changes do not affect any established county community developmental disability boards. Provides that the Act will be reassigned to 50 ILCS 835. Amends the Property Tax Code and the Counties Code making conforming changes.
The Governor's amendatory veto 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 that the taxing district's aggregate extension be decreased by not more than 10% of its aggregate extension for the previous levy year. Recommends adding a provision to the County Care for Persons with Developmental Disabilities Act that requires a governmental unit's county clerk to certify a proposition to the voters of the governmental unit requesting the reduction or discontinuance of an annual tax levied for the purpose of providing facilities or services for persons with intellectual or developmental disabilities. (Adds reference to 35 ILCS 200/18-205)
Rulemaking
The Illinois Department of Revenue issued a draft rulemaking providing guidance in light of the U.S. Supreme Court decision in
Wayfair. The draft rules were provided to members of the Director's Advisory Group. The Department is interested in receiving comments on the draft rulemaking. If you are not a member of the Director's Advisory Group and would like to review the draft rules and submit comments, reach out to me and I will forward a copy of the draft rules and I will be happy to submit comments to the Department on your behalf if you prefer not to comment to the Department directly.
The August 24 edition of the
Illinois Register did not contain any new rulemakings by t
he Department of Commerce and Economic Opportunity.
The Department of Revenue proposed one new rulemaking amending the Gas Revenue Tax rules. The Department describes the rulemaking as removing obsolete language and making technical changes.
The Property Tax Appeal Board proposed a new rulemaking with the following proposed changes:
Section 1910.12 - Meetings of the Board - Amended to provide that members present at either office of the Property Tax Appeal Board for a simultaneous meeting held through an interactive video conference shall count towards determining a quorum of members physically present at a scheduled meeting of the Board. Allows any person to address the Property Tax Appeal Board during a meeting with advance written notice of at least ten (10) days prior to the meeting.
Section 1910.30 - Petitions - Amended to provide that beginning with the 2016 assessment year, requires only one (1) copy of the petition, notice of board of review decision and written and documentary evidence to be filed.
Section 1910.40 - Board of Review Response to Petition - Amended to provide that beginning with the 2016 assessment year, requires only one (1) copy of the Board of Review "Notes on Appeal" and written documentary evidence to be filed. Requires rebuttal evidence, if any, to be filed with first response.
Section 1910.50 - Determination of Appealed Assessment - Amended to provide that a taxpayer may file an appeal or appeals directly to the Property Tax Appeal Board for the subsequent year or the remaining years within the same general assessment cycle if the decision of the Property Tax Appeal Board is issued after the filing of a complaint with the board of review or after adjournment of the session of the board of review at which
assessments for the subsequent year or years of the same general assessment cycle are being considered.
Section 1910.60 - Interested Parties - Intervention - Amended to provide that beginning with the 2016 assessment year, requires only one (1) copy of the Request to Intervene, resolution and its written and documentary evidence for the tax year in question. Requires rebuttal evidence, if any, to be filed with first response.
Section 1910.66 - Rebuttal Evidence - Amended to provide that beginning with the 2016 assessment year only one (1) copy of written and documentary rebuttal evidence must be submitted. Clarifies that any party shall have 30 days after first receipt of the argument and written documentary evidence filed by an opposing party to file written or documentary rebuttal evidence.
Section 1910.69 - Sanctions - Amended to provide that a party found in default by the Property Tax Appeal Board shall forfeit any right to have, request or participate in a hearing and shall not receive notice of the proceedings, rulings or decisions from the Board. Notice shall be deemed given when served upon the State's Attorney of the county from which the appeal has been taken.
Publications
The Internal Revenue Service issued
proposed regulations that will end state attempts to work around the federal $10,000 SALT deduction cap by allowing taxpayers to make payments to charitable foundations, obtain a credit against state taxes in an amount equal to the charitable deductions and take a charitable deduction on their federal income tax return. Such legislation was proposed in Illinois, but not passed.
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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