Illinois General Assembly 

The House and Senate returned to Springfield on Monday April 23 and was in session through Friday April 27.

The Senate is in session next week from Tuesday May 1 through Thursday May 3.  The House is not in session next week. 

HB 2717 - failed in the House.  The Chamber, other business groups and the Illinois Department of Revenue strongly opposed this bill which would have authorized municipalities to share confidential taxpayer information obtained from the Illinois Department of Revenue with third party contingent fee auditors.  The bill amends the Retailers' Occupation Tax Act and provides that, subject to certain restrictions, if the Department of Revenue may disclose confidential financial information to a municipality or county, then the Department of Revenue may also disclose that financial information to an independent third party who is authorized in writing by that municipality or county to receive the information.

HB 4724 - passed the House.  This bill amends the Illinois Hydraulic Fracturing Tax Act to remove provisions concerning first purchaser exemption certificates.

HB 5778 - passed the House.  The bill amends the Illinois Income Tax Act. Provides that the credit for wages paid to qualified veterans also extends to wages paid to a qualified veteran's spouse.

SB 2667 - passed the Senate. The bill amends the Illinois Enterprise Zone Act and in a Section concerning eligibility for an Enterprise Zone based on the local labor market area, provides that the Department of Commerce and Economic Opportunity may consider information released in the most recent American Community Survey (currently, the federal decennial census only). Provides that the Department of Commerce and Economic Opportunity may award partial points if the applicant demonstrates specific job creation and investment below specified thresholds. Contains provisions concerning provisional certification and provisional decertification. Provides that, for Enterprise Zones that are scheduled to expire on or after January 1, 2022, an application process shall begin 5 years prior to the year in which the Zone expires. Provides that the Department of Commerce and Economic Opportunity may consider written comments or any other information regarding a pending Enterprise Zone application submitted after the deadline and received prior to the decision on all pending applications. Makes changes concerning the total number of Enterprise Zones that may be certified. 

SB 2881 passed the Senate.  The legislation a mends the Retailers' Occupation Tax Act and provides that female and male condoms, incontinence products, diapers, and baby wipes shall be taxed by the State at a rate of 1% (currently, 6.25%). The bill provides that the net revenue from the 1% tax collected from the sale of those products shall be deposited into the State and Local Sales Tax Reform Fund. Amends the Use Tax, Service Occupation Tax, and Service Occupation Use Tax Acts to make conforming changes.

SB 3093 passed the Senate.  The bill amends the Property Tax Code to make changes concerning the maximum reduction under the general homestead exemption for life care facilities.

SB 3152 - passed the Senate.  This legislation is an initiative of the Illinois Department of Revenue and was proposed as a reaction to federal tax reform. The bill a mends the Illinois Income Tax Act and creates an addition modification for amounts allowed as a deduction for foreign-derived intangible income under Section 250(a)(1)(A) of the Internal Revenue Code. The bill also creates a deduction for the amount of excess business loss of the taxpayer disallowed as a deduction by Section 461(a)(1)(B) of the Internal Revenue Code. 

SB 3197 - passed the Senate.  This legislation amends the Property Tax Code to create a homestead exemption for police officers and firefighters with a disability and  (1) provides that the homestead exemption applies only to qualified police officers and firefighters; (2) defines "qualified police officer" and "qualified firefighter" as a police officer or firefighter who (i) has suffered an injury resulting in a specified disability and (ii) currently receives, or prior to retiring received, a disability benefit under specified provisions of the Illinois Pension Code; and (3) provides that the exemption is also granted for property that is used as a qualified residence by the surviving spouse of a police officer or firefighter killed in the line of duty, so long as the surviving spouse does not remarry.

SB 3212 -  passed the Senate.  The bill amends the Illinois Income Tax Act and provides that nothing in the Act prohibits the disclosure of information by officials of a county or municipality involving reports of damaged property or the owners of damaged property if that disclosure is made to a township or county assessment official in connection with the natural disaster credit. Amends the Freedom of Information Act. Repeals a Section providing that nothing in the Act prohibits the disclosure of information by officials of a county or municipality involving reports of damaged property or the owners of damaged property if that disclosure is made to a township or county assessment official in connection with the natural disaster income tax credit.

SB 3238 - passed the Senate. This bill a mends the Use Tax Act, the Service Use Tax Act, the Service Occupation Tax Act, and the Retailers' Occupation Tax Act and provides that the exemption for coal and aggregate exploration, mining, off-highway hauling, processing, maintenance, and reclamation equipment sunsets on June 30, 2023 (currently, the exemption is subject to the Acts' automatic sunset provisions). 

SB 3242 - passed the Senate.  The legislation amends the Property Tax Code and makes structural changes concerning homestead exemptions by creating separate divisions for homestead exemptions in counties with 3,000,000 or more inhabitants and counties with fewer than 3,000,000 inhabitants. 

SB 3302 - passed the Senate. The legislation amends the Angel Investment Credit in the Illinois Income Tax Act and changes the definition of "applicant" and "related member". Provides that the annual allowable amounts shall be allocated by the Department of Commerce and Economic Opportunity if any portion of the unused allocated amount at the end of the first 3 calendar quarters of a calendar year (rather than 2 calendar quarters) are rolled into the total allocated amount for the next calendar quarter. Provides that the annual allowable amounts shall be allocated by the Department if tax credits for investments in minority-owned businesses, women-owned businesses, businesses owned by a person with a disability, or a business in a county with a population of 250,000 or less are limited to the first 3 calendar quarters of a calendar year and after which investors may claim the tax credits of any qualified new business venture.

SB 3430 - passed the Senate. The bill amends the Property Tax Code. In provisions concerning tax objections based on budget or appropriation ordinances, provides that no objection to any property tax levied by any municipality or county (rather than by any municipality) shall be sustained by any court under certain conditions. Removes forest preserve districts having a population of 3,000,000 or more from the definition of "municipality" in those provisions.

SB 3445 - passed the Senate. This bill is an Illinois Department of Revenue omnibus bill.  This legislation Amends the Use Tax Act, the Service Use Tax Act, the Service Occupation Tax Act, and the Retailers' Occupation Tax Act. Provides that property purchased by a purchaser who is exempt from tax under federal law is exempt from the taxes under those Acts. Makes changes concerning rolling stock. Amends the State Finance Act, the Use Tax Act, the Service Use Tax Act, the Service Occupation Tax Act, the Retailers' Occupation Tax Act, and numerous other Acts imposing local use and occupation taxes to include a reference to tangible personal property that is subject to the 1% rate under the Retailers' Occupation Tax Act and the Service Occupation Tax Act (currently, those items are specifically named). Amends the Motor Fuel Tax Law. Provides that certain waivers may be granted in case of a disaster in another jurisdiction (currently, another state). Amends the Illinois Horse Racing Act of 1975. Makes changes concerning the collection of the pari-mutuel tax. Makes other changes.

SB 3527 - passed the Senate.  This legislation amends the Illinois Income Tax Act and in a Section concerning a credit for qualified expenditures incurred in the restoration and preservation of a qualified historic structure located in a River Edge Redevelopment Zone, provides that the total amount of such expenditures (i) must equal $5,000 or more and (ii) must exceed the adjusted basis of the qualified historic structure on the first day the qualified rehabilitation plan begins (currently the total amount of such expenditures (i) must equal $5,000 or more and (ii) must exceed 50% of the purchase price of the property). Provides that the Department of Natural Resources (currently, the Department of Commerce and Economic Opportunity, in consultation with the Historic Preservation Agency) shall determine the amount of eligible rehabilitation costs and expenses. Provides that the determination shall be made within 30 days of receipt of a complete application. Contains provisions concerning third-party audits and a recapture period.

The House Revenue committee held a hearing on   April 24. The committee held a subject matter hearing on HB 1877 amends the Property Tax Code to add a new Section that authorizes a referendum to reduce the aggregate extension of a taxing district upon submission of a petition signed by not less than 10% of the voters of the taxing district that cast votes at the immediately preceding election for Governor.  

On April 24, the House Revenue committee voted on only one bill, HB 5176.  HB 5176 amends the Property Tax Code and the Code of Civil Procedure. Provides that a purchaser of a property shall publish a notice in a newspaper published in that municipality or, if the property is not in a municipality or no newspaper is published in the municipality, then the purchaser shall publish a notice in a newspaper in the county (regardless of the property being located in a municipality in a county with less than 3,000,000 inhabitants).

The House Revenue committee held a second hearing on April 26.  The April 26 hearing was a subject matter hearing on the Illinois Enterprise Zone program.  Illinois Chamber of Commerce testified on behalf of the Illinois Chamber.

The Senate Revenue committee held a hearing on April 25.  Here is a link to the bills that were considered by the committee this week.

The Senate Revenue committee is scheduled to meet next week on Wednesday.  Here is a link to the bills that have been posted for committee consideration.  Of note is HB 4237 the legislation that is designed to provide a "work around" to the federal $10,000 SALT deduction cap.

The House Revenue committee has scheduled a subject matter hearing in Chicago on May 2 to take testimony on HR 1025 sponsored by Speaker Madigan. HR 1025 supports the implementation of a "progressive" (graduated) income tax. The hearing is a subject matter hearing.  The House is not scheduled to be in session next week. Therefore, there will be no vote in the House on a constitutional amendment to implement a graduated income tax in time to place such a proposal on the November ballot.  The Chamber plans to testify in opposition to Speaker Madigan's resolution.  

Court cases

The Illinois appellate court issued a decision dealing with the Chicago Bottled Water Tax - Destin McIntosh v. Walgreens Boots Alliance, Inc.  Plaintiff Destin McIntosh filed a putative class-action complaint seeking damages from  defendant Walgreens Boots Alliance, Inc., for allegedly imposing and collecting the Chicago
Bottled Water Tax on retail sales of beverages that were exempt from the tax.  Defendant filed a motion to dismiss plaintiff's complaint , arguing that plaintiff's claim was barred by the voluntary payment doctrine. The circuit court granted defendant's motion and dismissed plaintiff's complaint with prejudice. Plaintiff appeals. The appellate court reversed the circuit court's judgment and remanded the case for further proceedings for further proceedings. 

The complaint alleged that the defendant was charging tax on sparkling water sales that were supposed to be exempt from the tax.  Plaintiff alleged that at the time he made the purchases he did not know that his purchases were exempt from the bottled water tax.  He further alleged that defendant (1) represented to purchasers of bottled beverages that the total purchase price included taxes required and allowable by law, (2) charged customers the bottled water tax on purchases of beverages that were exempt from the tax, (3) intended for its customers to rely on its
representation that the total purchase price included required and allowable taxes, and (4) made its representations in the course of trade or commerce. Plaintiff further alleged that he and other customers suffered injuries and actual damages that were proximately caused by defendant's conduct. 

The appellate court found that plaintiff's complaint sufficiently alleges a deceptive act and stated a claim under the Consumer Fraud Act and, therefore, the voluntary payment doctrine does not bar plaintiff's claim. Therefore, the appellate court reversed the circuit court's dismissal of the plaintiff's complaint and remanded the case back to the circuit court.

The appellate court for the First District issued a decision in James R. Skrzypek v. Illinois Department of Revenue.  This order was filed under Supreme Court Rule 23.  Therefore, it may not be cited as precedent by any party except in limited circumstances.  This case is a review of an administrative decision of the Department of Revenue finding an individual personally liable for a company's failure to remit employment taxes to the State of Illinois.  The appellate court affirmed the Department.  

Rulemaking