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February 21, 2020
State and Local Tax
This Week
Illinois General Assembly
The House and Senate returned to Springfield on February 18 and were in session through Thursday.
The Governor's Budget address was on February 19. The Governor's proposed budget includes additional tax receipts that would result from a favorable vote on the constitutional amendment authorizing a graduated income tax.
The Governor's budget proposal includes "budgetary reserves" in the amount of $1.4 billion in event that the graduated income tax constitutional amendment is not ratified by the voters. $300 billion of that amount is for corporate income tax refunds. In other words, if the constitutional amendment is not ratified, the budget will be "balanced" by shorting the corporate income tax refund fund by $300 million during the fiscal year beginning on July 1, 2020.
Here is a link to the Governor's budget documents.
The House and Senate are scheduled to be in session next week Tuesday through Thursday.
The Senate Revenue committee was scheduled to meet on February 19. The hearing was cancelled.
The Senate Revenue committee is scheduled to meet next Wednesday. As of today, 32 bills have been posted for committee consideration including some Illinois Chamber Tax Institute initiatives.. It is unclear at this point which bills will be called, held, or moved to subcommittee.
The House Revenue committee met briefly on February 20. The committee did not take any substantive action.
The House Revenue committee is scheduled to meet next Thursday. The Chairman announced that next week's meeting of the House Revenue committee will consist of a subject matter hearing on HB 4138 the "Phase Out Corporate Giveaways Compact." This ill-advised legislation would authorize the State of Illinois to enter into a multistate compact with any state and the District of Columbia, in which each member state agrees not to offer or provide any company-specific tax incentive or company-specific grant to any entity for a corporate headquarters, manufacturing facility, office space, or other real estate development located in any other member state as an inducement for the corporate headquarters, manufacturing facility, office space, or other real estate development to relocate to the offering member state. We plan to testify in opposition to this proposal.
Tax Institute Legislation
Here is a link to a summary of the Illinois Chamber of Commerce Tax Institute legislation.
New legislation
House bills
HB 5200 - Reitz -
Amends the Illinois Income Tax Act. Creates an income tax credit for beginning farmers who participate in a financial management program approved by the Department of Agriculture. Creates an income tax credit for owners of agricultural assets who sell or rent those agricultural assets to a beginning farmer. Effective immediately.
HB 5207 - Wheeler - This bill is an Illinois Chamber of Commerce Tax Institute initiative. Amends the Use Tax Act, the Service Use Tax Act, the Service Occupation Tax Act, and the Retailers' Occupation Tax Act. Provides that the exemption for the use or sale of tangible personal property purchased from an Illinois retailer by a taxpayer engaged in centralized purchasing activities in Illinois who will temporarily store the property in Illinois (i) for the purpose of subsequently transporting it outside this State for use or consumption solely outside this State or (ii) for the purpose of being processed, fabricated, or manufactured into, attached to, or incorporated into other tangible personal property to be transported outside this State and used or consumed solely outside this State sunsets on June 30, 2022 (currently, June 30, 2016). Effective immediately.
HB 5208 - Wheeler - This bill is an Illinois Chamber of Commerce Tax Institute initiative. The legislation amends the Illinois Income Tax Act. Creates an income tax credit in an amount equal to 1% of the expenses claimed by the taxpayer as a federal income tax deduction pursuant to Section 179 of the Internal Revenue Code for the tax year. Provides that the taxpayer may sell, assign, or transfer the credit. Provides that the maximum aggregate amount of credits awarded for those purposes may not exceed $45,000,000 in any calendar year. Amends the Uniform Penalty and Interest Act to provide that, if the amount of the credit is reduced because the claims for credit exceed the maximum aggregate amount of the credit, then no underpayment penalty or interest shall accrue on the additional tax so long as the additional tax is paid within 60 days after the notice of reduction. Effective immediately.
HB 5212 - Wheeler - The bill is an Illinois Chamber of Commerce Tax Institute initiative. This legislation amends the Illinois False Claims Act. Provides that no court has jurisdiction over a civil action relating to or involving a false claim regarding certain tax acts administered by the Department of Revenue unless the action is brought by the Attorney General. Provides that the Department has the sole authority to bring an administrative action and that the Attorney General has the sole authority to bring a judicial action under the Act for a false claim, statement, or record pertaining to certain taxes administered by the Department. Contains provisions concerning reporting, investigative, and enforcement procedures for allegations of false claims pertaining to certain taxes. Contains provisions governing the payment of rewards to persons who provide information that leads to recovery of funds under the new provisions. Provides that the appeal of a determination regarding an award may be appealed exclusively to the Court of Claims and must be filed within 30 days of the determination of the award. Makes other changes, including a corresponding change in the Court of Claims Act.
HB 5220 - Butler - Amends the Parking Excise Tax Act. Provides that the Act is repealed on July 1, 2020. Effective immediately.
HB 5250 - Hurley - Amends the Property Tax Code. Provides that a veteran who has a service connected disability of 100% need not reapply for the homestead exemption for veterans with disabilities. Effective immediately.
HB 5254 - Reitz - Amends the Illinois Income Tax Act. Creates an income tax credit in an amount equal to 50% of the contributions made by the taxpayer during the taxable year to one or more qualifying pregnancy resource centers. Provides that the term "qualifying pregnancy resource center" means a nonprofit organization that is exempt from taxation under Section 501(c) of the Internal Revenue Code and is established for the purpose of providing free assistance to pregnant women in carrying their pregnancies to term.
SB 5263 - Edly-Allen - Amends the Parking Excise Tax Act. Provides that the tax imposed by the Act does not apply to a parking area or garage owned or operated by a city, village, county, township, or incorporated town. Effective immediately.
HB 5275 - Welch - Amends the Property Tax Code. Provides for a reduction in the assessed value of newly-constructed or rehabilitated rental property if the owner of the residential real property commits that, for a period of 10 years, at least 15% of the multifamily building's units will have rents that are at or below maximum rents and are occupied by households with household incomes at or below maximum income limits. Provides that the chief county assessment officer of a county with 3,000,000 or more inhabitants shall establish such a program. Sets forth application requirements and the amount of the reduction. Effective immediately.
HB 5279 - Mazzochi - Amends the Property Tax Extension Limitation Law in the Property Tax Code. Provides that, for levy years 2020 and later, for school districts other than school districts with a total student population that has decreased by more than 1% from the immediately preceding levy year, the "aggregate extension base" is the greater of (A) the district's last preceding aggregate extension limit or (B) the district's last preceding aggregate extension, subject to certain adjustments. Provides that the term "aggregate extension limit" means the district's last preceding aggregate extension if the taxing district had utilized the maximum limiting rate permitted without referendum for each of the 3 immediately preceding levy years. Effective immediately.
HB 5294 - Mazzochi - Amends the Property Tax Code. Provides that certain notices may be given by electronic means. Provides that the county assessor shall compile and post on its website a list with certain information concerning certificates of error.
HB 5284 - Miller - Amends the Property Tax Code. Creates an abatement for property located in a blighted area if the owner of the property enters into an agreement with the corporate authorities of the municipality in which the property is located for the renovation, demolition, or improvement of the property. Provides that the abatement shall apply for a period of 10 years and may be extended for an additional 10 years if the chief county assessment officer finds that the property owner has made a good faith effort to renovate, demolish, or improve the property.
HB 5293 - Mazzochi - Amends the Property Tax Code. Creates the senior citizens homestead school levy exemption for property that is improved with a permanent structure that is occupied as a primary residence by an applicant who (i) is 65 years of age or older during the taxable year, (ii) has a household income that does not exceed the maximum income limitation, (iii) is liable for paying real property taxes on the property, (iv) is an owner of record of the property or has a legal or equitable interest in the property as evidenced by a written instrument, if no individual residing at the real property is or will be enrolled in a public school. Effective immediately.
HB 5311 - Pappas - mends the Hotel Operators' Occupation Tax Act. Provides that "permanent resident" means any person who occupied or has the right to occupy a room in a hotel for at least 90 (currently, 30) days. Provides that a "permanent resident" does not include: (1) a corporate entity that occupies a room unless the same person or persons occupying the room have exclusive use of the room for at least 90 consecutive days; or (2) an individual that is temporarily or permanently occupying a room because of a natural disaster or emergency that made his or her home uninhabitable. Effective immediately.
HB 5329 - Rita - Amends the Property Tax Code. Provides that the owner of a certificate of purchase must file with the county clerk the names and addresses of the owners of the property and those persons entitled to service of notice at their last known address. Provides that the clerk shall mail notice within 30 days from the date of the filing of addresses with the clerk.
HB 5350 - Edly-Allen - Amends the Illinois Income Tax Act. Creates an income tax credit for taxpayers who plant a native plant species at their primary place of residence. Provides that the credit shall be equal to the cost of the plants and associated planting materials. Provides that the credit may not exceed $100 per taxpayer in any taxable year. Effective immediately.
HB 5359 - Moylan - Amends the Illinois Income Tax Act. Provides that a taxpayer shall be allowed an income tax credit in an amount equal to 1.3% of the qualified research expenses made by the taxpayer in Illinois. Provides that the taxpayer is not required to have obtained a research and development credit with respect to his or her federal income taxes to qualify for the Illinois research and development credit.
HB 5360 - Moylan - Amends the Illinois Income Tax Act. Creates an income tax credit for taxpayers who employ individuals working within the engineering sector who graduated from an accredited institution of higher learning with a Bachelor's degree or higher. Provides that the credit shall be equal to 10% of the compensation paid for the first through fifth years of employment in the engineering sector if the qualified employee graduated from an institution located in Illinois or 5% of the compensation paid for the first through fifth years of employment in the engineering sector if the qualified employee graduated from an institution not located in Illinois. Effective immediately.
HB 5373 - Bailey - Amends the Illinois Income Tax Act. 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. Effective immediately.
HB 5378 - Severin - Creates the Rural Job Creation Tax Credit Act. Provides that a taxpayer may claim a nonrefundable income tax credit for rural job creation equal to a percentage of the taxpayer's purchase of an equity interest in a rural investment company or purchase of a debt instrument issued by the rural investment company. Effective immediately.
HB 5380 - Bryant - Amends the Illinois Income Tax Act. Creates an income tax credit to taxpayers that own and operate a small farm and make a qualifying food commodity donation to a food bank or emergency feeding organization. Provides that the credit shall be equal to the lesser of $5,000 or 15% of the value of the food commodity donated. Effective immediately.
HB 5385 - Hammond - Amends the Illinois Income Tax Act. Provides that the credit for student-assistance contributions sunsets on December 31, 2030 (currently, December 30, 2020). Effective immediately.
HB 5394 - Slaughter - Creates the Securing All Futures for Equitable Reinvestment in Communities Act. Provides legislative intent. Creates the Securing All Futures for Equitable Reinvestment Tax Credit Pilot Program Act. Provides that an applicant that hires certain formerly incarcerated individuals during the incentive period may apply for a tax credit against the applicant's withholding tax liability. Provides that the savings from the changes made to the Unified Code of Corrections shall be deposited into the Securing All Futures for Equitable Reinvestment (SAFER) Communities Fund for the purpose of funding the program. Amends the Unified Code of Corrections to reduce the sentencing ranges for all classes of felonies, and to remove minimum sentences for Class 4 felonies and Class A and Class B misdemeanors. Provides that the provisions of the Act apply to offenses committed before the effective date of this Act, and to offenses committed on or after the effective date of this amendatory Act. Provides for resentencing of currently incarcerated persons based on these changes. Effective immediately.
HB 5409 - Grant - Amends the Illinois Income Tax Act and the Invest in Kids Act. Provides that the Invest in Kids credit applies permanently (currently, the credit applies for taxable years ending before January 1, 2023). Effective immediately.
HB 5419 - Weber - Amends the Illinois Income Tax Act. Provides that a taxpayer is entitled to an income tax credit for each person who is (i) 55 years of age or older during the taxable year and (ii) employed by the taxpayer at a location in this State for not less than 185 days during the taxable year. Provides that the credit may be carried forward. Provides that the credit is exempt from the Act's automatic sunset provision. Effective immediately.
HB 5422 - Swanson - Amends the Illinois Income Tax Act. Makes changes to a credit awarded for wages paid to qualified veterans. Provides that the credit shall be: (1) $5,000 (instead of 20% of the gross wages, but not to exceed $5,000) for certain veterans who were unemployed at the time of hire; and (2) $1,200 (instead of 10% of the gross wages, but not to exceed $1,200) for other qualified veterans. Changes the definition of "qualified veteran" to include all Illinois residents who are members of the National Guard, reserve, or regular component of the Armed Forces of the United States. Allows the credit to be prorated. Provides that the credit is exempt from the Act's automatic sunset provision. Effective immediately.
HB 5425 - Wehrli - Amends the Property Tax Extension Limitation Law in the Property Tax Code. Provides that the limiting rate shall be calculated using the highest aggregate extension from any year in which the taxing district was subject to the Property Tax Extension Limitation Law (currently, the last 3 preceding levy years). Provides that an aggregate extension established for a levy year in which the taxing district was authorized to temporarily increase its limiting rate or its extension limitation may not be used.
HB 5426 - Wehrli - Amends the Property Tax Code to provide that a taxing district may order the county clerk to abate any portion of its taxes when its initial levy request has subsequently been found to be in excess of the funds required for that year. Provides that any such abatement shall be included in the district's aggregate extension base for purposes of the Property Tax Extension Limitation Law. Effective immediately.
HB 5427 - Wehrli - Amends the Property Tax Extension Limitation Law in the Property Tax Code. Provides that the extension limitation is 3.5% (currently, 5%) or the percentage increase in the Consumer Price Index. Provides that the Property Tax Extension Limitation Law applies to all taxing districts, including home rule units.
HB 5428 - Morrison - Amends the Truth in Taxation Law in the Property Tax Code. Provides that the adoption of an aggregate levy that exceeds 102% of the amount of the final aggregate levy for the preceding year shall require a truth in taxation hearing and a record vote of two-thirds of the members of the corporate authorities of the taxing district.
HB 5429 - Mazzochi - Amends the Commission on Government Forecasting and Accountability Act. Provides that the Commission on Government Forecasting and Accountability shall study the property tax laws of Florida, Tennessee, and Texas and report to the Governor and the General Assembly no later than December 31, 2020.
HB 5430 - Wehrli - Amends the Illinois Income Tax Act. Creates a credit for individual taxpayers whose income does not exceed the maximum income limitation and who are (i) 65 years of age or older during the taxable year or (ii) 100% disabled during the taxable year. Provides that the amount of the credit shall be based upon the amount by which the total residential property taxes paid by the taxpayer during the taxable year exceeds a stated percent of income. Effective immediately.
HB 5431 - Batinick - Amends the Property Tax Extension Limitation Law in the Property Tax Code. Provides that a taxing district shall reduce its aggregate extension base for the purpose of lowering its limiting rate for future years upon referendum approval initiated by the submission of a petition by the voters of the district. Effective immediately.
HB 5432 - Welter - Amends the Property Tax Code. Creates a first-time homebuyer homestead exemption. Provides that residential property valued at $75,000 or more that is owned and occupied by a first-time homebuyer is entitled to a reduction in the equalized assessed value of the property in the amount of $7,500. Amends the State Mandates Act to require implementation without reimbursement. Effective immediately.
HB 5433 - McCombie - Creates the Industrial New Jobs Training Act. Provides that community college may enter into an agreement with an employer in which the employer provides certain education and job-training services. Provides that the program shall be funded by: (1) a new jobs credit from withholding to be received or derived from new employment resulting from the project; (2) tuition, student fees, or special charges fixed by the Board to defray program costs in whole or in part; or(3) a guarantee of payments to be received under paragraph (1) or (2). Provides that the community college may issue certificates for funding of the program. Amends the Illinois Income Tax Act to make conforming changes.
HB 5435 - Wehrli - Creates the Taxing Body Refinancing by Popular Vote Act. Provides that no taxing district may renew or refinance its indebtedness in a way that requires the extension of property taxes for the payment of debt service in a taxable year that is later than the taxable year in which the indebtedness would otherwise mature unless the question of such renewal or refinancing is submitted to the electors of the district at a regular election and approved by a majority of the electors voting on the question.
HB 5437 - Wehrli - Amends the Property Tax Code. Provides that, if a person who qualifies for a senior citizens assessment freeze homestead exemption relocates from one residence in this State to another residence in this State, and the person continues to qualify for the exemption, then the exemption amount for the new residence may not be less than the exemption amount for the previous residence for the last full assessment year in which the qualifying individual occupied the previous residence.
HB 5438 - Wehrli - Amends the Property Tax Code. Provides that, for taxable years 2020 and thereafter, the maximum reduction under the senior citizens homestead exemption is $9,000 in all counties (currently, $8,000 in counties with 3,000,000 or more inhabitants and $5,000 in all other counties). Provides that the maximum income limitation for the senior citizens assessment freeze homestead exemption is $75,000 (currently, $65,000).
HB 5439 - Weber - Amends the Department of Revenue Law of the Civil Administrative Code of Illinois. Creates the Senior Citizens Assessment Freeze Task Force. Sets forth the membership of the Task Force. Provides that the Task Force shall study the benefits and consequences associated with expanding the Senior Citizens Assessment Freeze Homestead Exemption to all households that are unlikely to have children in public schools due to advanced age.
HB 5441 - Ford - Amends the Property Tax Code. Provides that the owner of a certificate of purchase must file with the county clerk the names and addresses of the owners of the property and those persons entitled to service of notice at their last known addresses. Provides that the clerk shall mail notice within 30 days from the date of the filing of addresses with the clerk.
HB 5455 - Sosnowski - Amends the Property Tax Code. Provides that, in the case of an erroneous homestead exemption, the chief county assessment officer in a county with fewer than 3,000,000 inhabitants may consider the erroneously exempt portion of the property as omitted property for that taxable year and any of the 3 taxable years immediately prior to the taxable year in which the notice of that discovery is served.
HB 5487 - Stephens - Amends the Property Tax Code. Provides that the surviving spouse of a fallen police officer, soldier, or rescue worker who meets certain income limitations is eligible for an assessment freeze.
HB 5532 - Bristow - Amends the Illinois Income Tax Act. Creates an income tax credit for taxpayers who are caregivers of a veteran with a disability. Provides that the credit shall be in an amount equal to 5% of the costs incurred in caring for the veteran, not to exceed $1,000 in credits in any taxable year.
HB 5561 - Skillicorn - Amends various Acts to eliminate the changes made by Public Acts 101-30, 101-31, and 101-32. Makes other changes.
Among other things, the legislation would repeal funding for a portion of the capital plan passed last spring. It would also repeal the new Data Center Tax Incentive legislation that was included in P.A. 101-31 and gaming expansion (new casinos and sports wagering).
HB 5577 - Davis -
Amends the School Code. Provides that in the immediate 2 consecutive tax years (rather than in the tax year) following receipt of a Property Tax Pool Relief Grant, the aggregate extension base (rather than the aggregate levy) of any school district receiving a grant, for purposes of the Property Tax Extension Limitation Law, shall include the tax relief the school district provided in the previous taxable year. Effective July 1, 2020.
HB 5583 - Edly-Allen -
Amends the Illinois Income Tax Act. Creates an income tax credit for taxpayers who purchase an electric vehicle during the taxable year. Provides that the amount of the credit is equal to the purchase price of the vehicle. Provides that excess credit amounts may not be carried forward or back and shall not be refunded to the taxpayer.
HB 5584 - Hernandez - Creates the Wire Transfer Tax Act. Provides that a tax of 1% of the amount transferred is imposed on each wire transfer originating from within the State. Provides that the moneys received from the tax shall be deposited into the Illinois DREAM Fund. Amends the Higher Education Student Assistance Act to make conforming changes.
HB 5618 - Hernandez - Amends the Use Tax Act, the Service Use Tax Act, the Service Occupation Tax Act, and the Retailers' Occupation Tax Act. Provides that, beginning on July 1, 2020, breast pumps, breast pump collection and storage supplies, and breast pump kits are exempt from the taxes imposed under those Acts.
HB 5622 - Pappas - Amends the Illinois Local Library Act. Provides that the corporate authorities of a municipality may, in its sole discretion, approve, modify, or deny new taxes proposed by the board of library trustees or the amount of taxes determined by the board of library trustees.
HB 5625 - Murphy - Amends the Illinois Income Tax Act. Provides that an employer that incurs expenses to train a qualifying individual to obtain a commercial driver's license or to operate a commercial motor vehicle may apply to the Department of Revenue for an income tax credit in an amount equal to 50% of those training expenses. Set forth aggregate credit limits and limits the amount of credits available to any particular employer under those provisions.
HB 5641 - Harper - Amends the Illinois Income Tax Act. Creates a credit for financial institutions in an amount equal to the aggregate amount of all fees, penalties, and any other income derived during the taxable year from each commercial loan transaction that is (i) originated by the financial institution, (ii) made to a person residing or located in this State, and (iii) made primarily for an agricultural project in this State. Effective immediately.
HB 5651 - Cassidy - Amends the Use Tax Act, Service Use Tax Act, Service Occupation Tax Act, and Retailers' Occupation Tax Act. Imposes a 2% surcharge on firearm ammunition. Amends the State Finance Act. Creates the Safe Schools and Healthy Learning Environments Grant Fund. Requires the 2% surcharge to be deposited into the Fund. Provides that moneys in the Fund shall be used by the State Board of Education to make grants as part of the Safe Schools and Healthy Learning Environments Grant Program.
HB 5667 - Reick -
Amends the Illinois Income Tax Act. Provides that, in the case of qualifying expenditures related to (i) clean energy technology, (ii) waste reduction, (iii) recycling, (iv) emissions reduction, (v) environmental sustainability, or (vi) biodegradable or compostable products, the research and development credit shall be 13% (currently, 6.5%) of the qualifying expenditures.
HB 5669 - Welch - Amends the Illinois Income Tax Act. Provides that the State earned income tax credit shall be: (i) 19% of the federal tax credit for each taxable year beginning on or after January 1, 2022 and beginning before January 1, 2023; and (ii) 20% of the federal credit for each taxable year beginning on or after January 1, 2023. Requires the Department of Revenue and certain institutions of higher education to provide certain notices concerning the federal and State earned income tax credits.
HB 5660 - Walker - Amends the Property Tax Extension Limitation Law in the Property Tax Code. Provides that a taxing district shall increase or reduce its aggregate extension base for the purpose of raising or lowering its limiting rate for future years upon referendum approval initiated by the submission of a petition by the voters of the district.
HB 5661 - Walker - Amends the Property Tax Extension Limitation Law in the Property Tax Code. Provides that, for levy years 2020 and later, the taxing district's aggregate extension base is the greater of (A) the district's last preceding aggregate extension limit or (B) the district's last preceding aggregate extension, subject to certain adjustments. Provides that the term "aggregate extension limit" means the district's last preceding aggregate extension if the taxing district had utilized the maximum limiting rate permitted without referendum for each of the 5 immediately preceding levy years.
Senate bills
SB 3334 - Martwick -
I suspect this bill is an Illinois Department of Revenue initiative.
Amends the Illinois Income Tax Act. Provides that certain sports wagering winnings are allocable to this State.
SB 3350 - Sims -
Amends the Property Tax Code. Provides that certain property located in Bloom, Bremen, Calumet, Rich, Thornton, or Worth Township may be certified by the South Suburban Land Bank and Development Authority, the Cook County Land Bank Development Authority, or both collectively, as a southland reactivation site. Sets forth valuation procedures for southland reactivation property. Provides that, for the first 3 tax years after the property is certified as southland reactivation property, the aggregate tax liability for the property shall be no greater than $100,000 per year. Provides that, beginning with the fourth tax year after the property is certified as southland reactivation property and continuing through the twelfth tax year after the property is certified as southland reactivation property, the property's tax liability shall be increased over the tax liability for the preceding year by 5% or the percentage change in the Consumer Price Index, whichever is less. Effective immediately.
SB 3352 - Sims - T
his bill is an initiative of the Illinois Chamber of Commerce Tax Institute.
Amends the Use Tax Act and the Retailers' Occupation Tax Act. Provides that, for any leased property (currently, for motor vehicles only), "selling price" means the consideration received by the lessor pursuant to the lease contract and includes certain amounts received by the lessor that are not calculated at the time the lease is executed. Provides for an exemption to the extent of any personal property lease transaction tax paid to a home rule municipality.
SB 3356 - Sims & Murphy - Amends the Property Tax Code. Provides that a tax year may not be offered at a scavenger sale prior to the date of annual tax sale for that tax year. Provides that, for omitted assessments, a tax year may not be offered at a scavenger sale prior to the annual tax sale for that omitted assessment's warrant year. Provides that, for the 2019 tax year and each tax year thereafter, all applications for judgment and order of sale for taxes and special assessments on delinquent properties shall be made within 365 days of the second installment due date.
SB 3358 - Sims - Amends the Department of Commerce and Economic Opportunity Law of the Civil Administrative Code of Illinois. Establishes the Illinois Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR) Matching Funds Program to be administered by the Department of Commerce and Economic Opportunity. Provides that the Department of Commerce and Economic Opportunity may make grants to eligible businesses to match federal funds received by the business as an SBIR or STTR Phase I award and to encourage businesses to apply for Phase II awards up to a maximum of $50,000. Effective July 1, 2020.
SB 3359 - Sims - My guess is that this may be an initiative of the Department of Commerce and Economic Opportunity. Amends the Illinois Income Tax Act. Provides that, upon the transfer of a film production services credit, the taxpayer shall pay to the Department of Commerce and Economic Opportunity 1.5% of the credit amount, which shall be deposited into the Film Workforce Training and Diversity Fund. Amends the State Finance Act to create the Film Workforce Training and Diversity Fund. Provides that moneys in the Fund shall be used to provide grants to certain organizations and institutions to administer workforce development and training programs that support efforts to recruit, hire, promote, retain, develop, and train a diverse and inclusive workforce in the film industry.
SB 3380 - McClure - Amends the Department of Revenue Law of the Civil Administrative Code of Illinois. Creates the Use and Occupation Tax Task Force. Provides that the Task Force shall prepare a report with suggestions for modernizing and streamlining the State's use and occupation taxes. Effective immediately.
SB 3381 -Rose - Creates the Job Creation Zone Pilot Program Act. Sets forth the boundaries of the Job Creation Zone. Provides that applicants that pledge to hire at least 5 new employees at a designated location within the job creation zone are eligible for credits against their obligation to pay over withholding taxes under the Illinois Income Tax Act. Sets forth the amount of the credit, which is based on the incremental income tax attributable to new employees hired by the taxpayer during the calendar year. Amends the Illinois Income Tax Act to make conforming changes. Effective immediately.
SB 3386 - Castro - This appears to be a tax directed at Airbnb-type rentals. Creates the Short-Term Rental Operators' Occupation Tax Act. Imposes a tax upon persons engaged in the business of short-term rental at the rate of 5% of 94% of the gross rental receipts from such renting, leasing or letting. Imposes an additional tax at the rate of 1% of 94% of the gross rental receipts from such renting, leasing or letting. Provides that operators of short-term rentals shall obtain a business license from the Department of Revenue. Effective October 1, 2020.
SB 3392 - Joyce - Amends the Illinois Income Tax Act. Increases the amount deposited into the Local Government Distributive Fund. Effective immediately.
SB 3415 - Castro -
Amends the Property Tax Code. Provides that property on which a solar energy system is installed is entitled to a 25% reduction in all property taxes levied against the property for the year in which the system is installed. Effective immediately.
SB 3420 - Bush -
Creates the Illinois Energy Transition Zone Act. Provides for the certification by the Department of Commerce and Economic Opportunity of municipal ordinances designating an area as an Energy Transition Zone. Provides that green energy enterprises located in Energy Transition Zones shall be eligible to apply for certain tax incentives. Provides that a green energy enterprise is a company that is engaged in the production of solar energy, wind energy, water energy, geothermal energy, bioenergy, or hydrogen fuel and cells. Contains provisions concerning qualifications and applications. Creates the Energy Transition Tax Credit Act. Provides that the Department of Commerce and Economic Opportunity shall make income tax credit awards under the Act to foster job creation and the development of green energy in Energy Transition Zones. Amends the Illinois Income Tax Act, the Retailers' Occupation Tax Act, and the Public Utilities Act to make conforming changes concerning tax incentives. Effective immediately.
SB 3423 - Bush -
Creates the Carryout Bag Fee Act. Provides that a carryout bag fee of $0.10 is imposed on each carryout bag used by a customer at retail establishments, except in municipalities with a population greater than 1,000,000, with $0.03 being returned to the retail establishment, $0.04 into the Carryout Bag Fee Fund, $0.01 to the Prairie Research Institute of the University of Illinois, $0.01 into the Solid Waste Management Fund, and $0.01 into the Partners for Conservation Fund. Provides that the carryout bag fee does not apply to the retail sale or use of carryout bags that are used to carry items purchased under specified governmental food assistance programs. Repeals the new Act on January 1, 2026. Amends the State Finance Act making conforming changes. Amends the Counties Code and Illinois Municipal Code. Provides that a county or municipality may not ban, place a fee or tax on, or regulate in any other manner the use, disposition, content, taxation, or sale of carryout bags. Limits the applicability of the provisions as they relate to a county or municipality that charged a fee or tax on carryout bags on May 1, 2020 and specified recycling programs. Limits home rule powers.
SB 3429 - Steans - Amends the Illinois Income Tax Act. Provides that the State earned income tax credit shall be: (i) 19% of the federal tax credit for each taxable year beginning on or after January 1, 2022 and beginning before January 1, 2023; and (ii) 20% of the federal credit for each taxable year beginning on or after January 1, 2023. Requires the Department of Revenue and certain institutions of higher education to provide certain notices concerning the federal and State earned income tax credits. Effective immediately.
SB 3452 - Weaver - Amends the Property Tax Code. Provides that the abatement for property located in an area of urban decay also applies to newly remodeled single-family or duplex residential dwelling units (currently, only newly constructed single-family or duplex dwelling units). Provides that provisions requiring the abatement to be reduced in 20% increments annually during the last 4 years of the abatement period apply only to abatements granted prior to the effective date.
SB 3453 - Weaver - Amends the Property Tax Code. Creates the Site Value Tax Law within the Property Tax Code. Provides that each taxing district may, by ordinance, levy a site value tax upon the assessed value of land within the taxing district. Provides that "assessed value" means 33 1/3% of the fair cash value of the land, without regard to buildings, structures, improvements, or other permanent fixtures on the land, except for the value of oil, gas, coal, and other minerals in the land and the right to remove such oil, gas, coal, and other minerals from the land. Contains provisions concerning enforcement and collection. Effective immediately.
SB 3455 - Martwick - Amends the Revised Uniform Unclaimed Property Act and provides that an apparent owner's interest in property includes a deposit into or withdrawal from an account at a financial organization, including (rather than except for) a recurring Automated Clearing House debit or credit previously authorized by the apparent owner, except for (rather than or) an automatic reinvestment of dividends or interest.
SB 3463 - Koehler - Amends the Property Tax Code. Provides that the valuation procedures for commercial solar energy systems apply regardless of whether the owner of the device or devices is also the owner or occupant of the property.
SB 3466 - Barickman - Amends the Parking Excise Tax Act. Provides that parking in a parking area owned by an exempt religious organization is exempt from the tax under the Act. Effective immediately.
SB 3469 - Barickman - The bill eliminates the ability of certain local governmental taxing bodies to impose locally-imposed retailers' occpation taxes on retail sales of recreational cannabis. The bill amends the Civic Center Code, the Flood Prevention District Act, the Metro-East Park and Recreation District Act, the Local Mass Transit District Act, the Regional Transportation Authority Act, and the Cannabis Regulation and Tax Act. Provides that no special district may impose a tax on the cultivation, sale, or use of cannabis. Effective immediately.
SB 3473 - Aquino - Creates the Endow Illinois Tax Credit Act and amends the Illinois Income Tax Act. Requires the Department of Revenue to authorize an income tax credit to taxpayers who provide an endowment gift to a permanent endowment fund. Sets forth procedures and criteria for authorizing the credits. Provides that the aggregate amount of all credits that the Department of Revenue may authorize may not exceed $10,000,000 in 2021, $25,000,000 in 2022, or $50,000,000 in 2023 and each calendar year thereafter. Provides conditions for eligibility. Requires the Department of Revenue to make an annual report concerning the credits. Provides that the credit may be carried forward for 5 years. Exempts the credit from the Act's sunset provisions. Further amends the Illinois Income Tax Act to provide that provisions concerning the unrelated business taxable income of an exempt organization apply for taxable years beginning on or after January 1, 2020 (currently, January 1, 2019). Effective immediately.
SB 3498 - Villivalam - Amends the Small Business Job Creation Tax Credit Act. Creates a second set of incentive periods beginning on July 1, 2020 and ending on June 30, 2026. Provides that the credit shall not exceed $5,000 per employee hired. Provides that the maximum amount of credits allowed is $75,000,000. Effective immediately.
SB 3507 - Villanueva - Amends the Property Tax Code. Provides that a benefit for accessibility improvements made to residential property applies regardless of whether a person with a disability has an ownership interest in the property, is liable for the payment of property taxes on the property, or currently lives in the property. Contains provisions concerning verification of eligibility.
SB 3512 - Martinez - Amends the Illinois Municipal Code. Provides that, in addition to any other tax that may be imposed, a municipality may also impose, by ordinance, a tax upon all persons engaged in the municipality in the business of acting as a resale facilitator. Provides that the tax may be imposed, in one percent increments, at a rate not to exceed 5% of the selling price of all tickets or other licenses resold by or through the resale facilitator for amusements taking place within the municipality. Provides that the tax does not apply to: (i) the original sale of a ticket or license by the owner, operator, or manager of an amusement, either directly or through a third party; or (ii) resales by or to ticket brokers registered with the Secretary of State under the Ticket Sale and Resale Act. Defines terms. Amends the State Finance Act to create the Municipal Ticket and License Reselling Tax Fund.
SB 3529 - Feigenholtz - Amends the Property Tax Code. Provides for a reduction in the assessed value of newly-constructed or rehabilitated rental property if the owner of the residential real property commits that, for a period of 10 years, at least 15% of the multifamily building's units will have rents that are at or below maximum rents and are occupied by households with household incomes at or below maximum income limits. Provides that the chief county assessment officer of a county with 3,000,000 or more inhabitants shall establish such a program. Sets forth application requirements and the amount of the reduction. Effective immediately.
SB 3535 - Rose - Amends the Illinois Income Tax Act. Creates an income tax credit in an amount equal to 10% of the manufacturing capital expenditures incurred by the taxpayer during the taxable year, or 15% of the manufacturing capital expenditures if the taxpayer is located in a rural or economically challenged area. Provides that the total amount of credits awarded under those provisions may not exceed $10,000,000 for any particular taxpayer in any taxable year, except that, if the capital investment is made in a rural or economically challenged area, then the maximum amount of the credit shall be $20,000,000. Effective immediately.
SB 3553 - Curran - Amends the Property Tax Code. In a Section concerning the homestead exemption for veterans with disabilities, provides that, if the veteran has a service connected disability of 1% or more but less than 30%, as certified by the United States Department of Veterans Affairs, then the annual exemption is $1,000.
SB 3590 - Bush - Amends the Illinois Income Tax Act. Provides that, in the case of qualifying expenditures related to (i) clean energy technology, (ii) waste reduction, (iii) recycling, (iv) emissions reduction, (v) environmental sustainability, or (vi) biodegradable or compostable products, the research and development credit shall be 13% (currently, 6.5%) of the qualifying expenditures. Effective immediately.
SB 3620 - Koehler - Amends the Illinois Income Tax Act. Makes changes to the withholding credit associated with the minimum wage increase under Public Act 101-1. Makes changes to the maximum credit amount. Provides that employers located in (i) the City of Chicago, (ii) a unit of local government that has opted in to Cook County's minimum wage ordinance, or (iii) unincorporated areas of Cook County are not eligible for the credit until their minimum wage rate decreases as a result of the amendatory Act. Effective immediately.
SB 3623 - Collins - I am including this bill because it affects the confidentiality of tax returns. Creates the Business Supply Chain Transparency for Slavery, Trafficking, and Child Labor Act. Provides that every retail seller and manufacturer doing business in the State and having annual worldwide gross receipts that exceed $100,000,000 shall disclose its efforts to eradicate slavery, human trafficking, and child labor from its direct supply chain for tangible goods offered for sale. Provides requirements and process for disclosures. Provides that the Department of Revenue shall make available to the Attorney General a list of retail sellers and manufacturers required to disclose efforts to eradicate slavery, human trafficking, and child labor pursuant to the Act. Provides that the list shall be based on tax returns filed for taxable years beginning on or after January 1, 2021 and shall be submitted annually to the Attorney General by November 30, 2021, and each November 30 thereafter. Provides that the list shall be derived from original tax returns received by the Department on or before December 31, 2020, and each December 31 thereafter. Effective January 1, 2021.
SB 3660 - Bush - Amends the Downstate Forest Preserve District Act. Provides that forest preserve districts with a population of less than 3,000,000 may levy taxes for general corporate purposes after referendum for a fiscal year not exceeding the rate of .08% (rather than .06%) of the value of the taxable property. Provides that that forest preserve districts having a population of 100,000 or more but less than 3,000,000 may levy taxes for specified purposes after referendum not exceeding the rate of .045% (rather than .025%) of the assessed value of all taxable property. Effective immediately.
SB 3681 - McGuire - Amends the Property Tax Code. Provides that an examination for qualification as a person with a disability may also be conducted by an optometrist if the person qualifies because of a visual disability. Effective immediately.
SB 3685 - Murphy - Amends the Property Tax Code. In provisions concerning delinquencies by lessees of property owned by a taxing district, provides that such a delinquency occurs 60 days after the final (currently, second) installment due date. Provides that those provisions apply in all counties (currently, in counties with more than 800,000 but fewer than 1,000,000 inhabitants). Effective immediately.
SB 3693 - McConchie - Amends the Commission on Government Forecasting and Accountability Act. Requires the Commission on Government Forecasting and Accountability to review certain tax incentive programs and submit a report to the Governor and the General Assembly no later than December 31, 2020. Provides that, if the Commission on Government Forecasting and Accountability recommends any substantive changes, then the Commission shall cause legislation to be drafted by the Legislative Reference Bureau within 60 days after the report is filed, or as soon thereafter as is practicable. Effective immediately.
SB 3694 - McClure - Amends the Property Tax Code. Provides that, beginning in taxable year 2021, the assessed value of any parcel of residential real property may not exceed the assessed value of that property for the immediately preceding assessment year by more than the percentage change in the Consumer Price Index unless improvements have been made to the property requiring a building permit or ownership of the property has been transferred due to a sale since the property's last general assessment. Effective immediately.
SB 3695 - Anderson - Amends the Illinois Income Tax Act. Creates a deduction in an amount equal to any overtime wages paid to the taxpayer during the taxable year. Effective immediately.
SB 3722 - Weaver - This is an Illinois Chamber of Commerce Tax Institute initiative. Amends the Uniform Penalty and Interest Act. Provides that the penalty for failure to pay the tax shown due or required to be shown due on a return shall be 15% (instead of 20%) of any amount that is paid after the date the Department of Revenue has initiated an audit or investigation of the taxpayer. Provides that the penalty shall be abated if the taxpayer paid to the Department at least 95% of the total tax liability (including any additional liability resulting from the audit or investigation) prior to the initiation of the audit or investigation. Effective January 1, 2021.
SB 3723 - Weaver - This is an Illinois Chamber of Commerce Tax Institute initiative. Amends the Illinois Income Tax Act. Increases the research and development credit by providing that the increase in research and development activities shall be based on an increase over 50% of the average of the qualifying expenditures for each year in the base period (instead of 100% of the average of the qualifying expenditures for each year in the base period). Provides that the research and development credit applies on a permanent basis. Effective immediately.
SB 3724 - Weaver - This is an Illinois Chamber of Commerce Tax Institute initiative. Amends the Illinois Income Tax Act. Creates an income tax deduction for an amount of up to $50,000 per tax year contributed to a small business asset purchase account and all interest earned on such accounts during the tax year. Provides that a "small business asset purchase account" means an account established by a taxpayer, the proceeds of which are used to purchase property used primarily in Illinois for which a federal income tax deduction is claimed under Section 179 of the Internal Revenue Code. Provides an addition modification for amounts withdrawn from a small business asset purchase account that are not used for qualified purchases. Amends the Uniform Penalty and Interest Act to establish a penalty for improper use of moneys in a small business asset purchase account. Effective immediately.
SB 3725 - Weaver - This is an Illinois Chamber of Commerce Tax Institute initiative. Amends the Illinois Income Tax Act. Provides that the personal property tax replacement income tax credit for investments in qualified property applies for costs incurred on or after the effective date and on or before December 31, 2024 (currently, December 31, 2018). Effective immediately.
SB 3745 - Castro - Amends the Historic Preservation Tax Credit Act. Provides that the aggregate amount of the credit may not exceed $3,000,000. Provides that credits may be awarded upon completion of the project and approval of a complete application (currently, review of the project). Provides that the taxpayer is not eligible to receive credits under that Act and as qualified River Edge Redevelopment Zone property for the same qualified expenditures or qualified rehabilitation plan. Makes various technical corrections concerning allocation of credits. Amends the Illinois Income Tax Act with respect to the Historic Preservation Tax Credit to include provisions concerning limited liability companies. Effective immediately.
SB 3772 - Cunningham - Amends the Illinois Income Tax Act. Makes changes to the definition of investment partnership to provide that a dealer in qualifying investment securities may be considered an investment partnership. Allows a partnership interest to be considered a qualified security if the interest qualifies as a security within the meaning of Section 2(a)(1) of the federal Securities Act of 1933. Effective immediately.
SB 3784 - Hastings - Amends the Illinois Income Tax Act. Provides that, beginning on July 1, 2020, the amount transferred from the General Revenue Fund to the Local Government Distributive Fund shall be equal to 1/10 of the net revenue realized from the income tax imposed on individuals, trusts, estates, and corporations during the preceding month. Effective July 1, 2020.
SB 3785 - Hastings - Amends the Illinois Income Tax Act. Provides that, from February 1, 2021 through January 31, 2022, the amount transferred from the General Revenue Fund to the Local Government Distributive Fund shall be: (i) 8.5% of the net revenue realized from the tax imposed on individuals, trusts, and estates, and (ii) 9.355% of the net revenue realized from the tax imposed on corporations. Provides that, from February 1, 2022 through January 31, 2023, the amount transferred from the General Revenue Fund to the Local Government Distributive Fund shall be: (i) 9% of the net revenue realized from the tax imposed on individuals, trusts, and estates, and (ii) 9.57% of the net revenue realized from the tax imposed on corporations. Provides that, from February 1, 2023 through January 31, 2024, the amount transferred from the General Revenue Fund to the Local Government Distributive Fund shall be: (i) 9.5% of the net revenue realized from the tax imposed on individuals, trusts, and estates, and (ii) 9.785% of the net revenue realized from the tax imposed on corporations. Provides that, beginning on February 1, 2024, the Treasurer shall transfer each month from the General Revenue Fund to the Local Government Distributive Fund an amount equal to 10% of the net revenue realized from the tax imposed on individuals, trusts, estates, and corporations during the preceding month. Effective immediately.
SB 3786 - Hunter - Creates the Recovery and Mental Health Tax Credit Act. Provides that the Department of Human Services shall establish and administer a recovery tax credit program to provide tax incentives to qualified employers who employ eligible individuals in recovery from a substance use disorder or mental illness in part-time and full-time positions within Illinois. Creates the Advisory Council on Mental Illness and Substance Use Disorder Impacts on Employment Opportunities within Minority Communities. Sets forth the membership of the Council. Provides that the Council shall advise the Department of Human Services regarding employment of persons with mental illnesses and substance use disorders in minority communities. Amends the Illinois Income Tax Act to make conforming changes.
SB 3787 - Hunter - Creates the Build Illinois Homes Tax Credit Act. Provides that the Illinois Housing Development Authority and the City of Chicago Department of Housing may award credits for certain qualified low-income housing projects. Provides that the credits may be taken against any or all of the following: (i) the taxes imposed by the Illinois Income Tax Act; or (ii) any retaliatory or privilege tax imposed by the Illinois Insurance Code. Amends the Illinois Income Tax Act and the Illinois Insurance Code to make conforming changes. Effective immediately.
SB 3833 - Bush - Amends the Property Tax Code. Provides that, if a school district reaches its adequacy target under the evidence-based funding formula in the School Code, then property taxpayers must be granted an abatement in the amount of any surplus funds generated from property tax revenue in that taxable year.
SB 3836 - Castro - Amends the Tobacco Products Tax Act of 1995. Provides that the term "electronic cigarette" does not include any cartridge or container of a solution or substance that contains cannabis subject to tax under the Compassionate Use of Medical Cannabis Program Act or the Cannabis Cultivation Privilege Tax Law. Effective immediately.
SB 3849 - Gillespie - Amends the Illinois Enterprise Zone Act. Contains provisions concerning provisional certification and provisional decertification of Enterprise Zones. Further provides that if the Department of Commerce and Economic Opportunity determines that 60% or more of the businesses receiving tax incentives because of their location within a particular Enterprise Zone fail to submit specified required information to the Department in any calendar year, then the Enterprise Zone may be decertified by the Department.
SB 3874 - Villivalam - Amends the Illinois Income Tax Act. Creates an income tax credit for taxpayers who employ individuals working within the engineering sector who graduated from an accredited institution of higher learning with a Bachelor's degree or higher. Provides that the credit shall be equal to 10% of the compensation paid for the first through fifth years of employment in the engineering sector if the qualified employee graduated from an institution located in Illinois or 5% of the compensation paid for the first through fifth years of employment in the engineering sector if the qualified employee graduated from an institution not located in Illinois. Effective immediately.
SB 3875 - Villivalam - Amends the Illinois Income Tax Act. Provides that a taxpayer shall be allowed an income tax credit in an amount equal to 1.3% of the qualified research expenses made by the taxpayer in Illinois. Provides that the taxpayer is not required to have obtained a research and development credit with respect to his or her federal income taxes to qualify for the Illinois research and development credit.
SB 3897 - Castro - Amends the Invest in Kids Act and the Illinois Income Tax Act. Provides that a taxpayer may not take a credit pursuant to the Invest in Kids Act for tax years beginning on or after January 1, 2021 (currently January 1, 2023). Provides that the Invest in Kids Act is repealed on January 1, 2022. Amends the School Code. Provides that, for State fiscal years 2022 through 2025, an amount shall be transferred from the General Revenue Fund to the Common School Fund equal to the amount of credits granted under the Invest in Kids Act in State fiscal year 2019.
Rulemaking
The February 21 edition of the
Illinois Register did not contain any new or adopted rulemakings by the Department of Commerce and Economic Opportunity.
Today's edition of the Illinois Register contains on adopted rulemaking by the Illinois Department of Revenue. The Department adopted amendments to the Motor Fuel Tax rules that implement P.A. 100-9. The Act dealt with the taxation of compressed natural gas (CNG). The rules are also updated to reflect the increase increase in the taxation of gasoline and diesel fuel for purposes of calculating the gasoline gallon equivalent and the diesel fuel gallon equivalent.
Court cases
No new court cases this week.
Tax Tribunal
No new decisions were issued this week.
None of the new cases filed with the Tribunal raise unique issues of interest.
Publications
The Illinois General Assembly's bipartisan Commission on Government Forecasting & Accountability has issued the State of Illinois Economic Forecast prepared by Moody's Analytics.
The Illinois Department of Revenue issued an
Informational Bulletin
entitled "New Motor Fuel Tax Allowed to be Imposed by Municipalities Located in Cook County.
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