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January 7, 2022
State and Local Tax
This Week
Illinois General Assembly
The House and Senate were scheduled to return to Springfield for the spring legislative session on January 4, but because of the spike in Covid cases they cancelled the January 4 and January 7 session days and returned for one day on January 5.
The House and Senate also cancelled the session days scheduled for next week. The House and Senate did not indicate in their adjournment resolution when they plan to return to Springfield. With the cancellation of next week, the next regularly scheduled session day for each chamber is January 18. However, I would not be surprised if some or all of the session days scheduled for the week of January 17 are cancellled.
Both chambers will be holding committee hearings via Zoom. The House Revenue committee is scheduled to meet next Thursday January 13. Here is a link to the bills that have been posted for consideration. Please remember that the House Revenue committee routinely posts all bills that have been assigned to the committee. We generally won't know which of the bills, if any, will actually be called for committee consideration until no earlier than the day before the heaing.
New tax-related legislation was introduced since my last newsletter:
HB 4327 - Bennett - Amends the Illinois Income Tax Act. Creates an income tax credit for Illinois licensed wine manufacturers and craft brewers in an amount equal to 50% of the qualified costs incurred by a qualified taxpayer during the taxable year, not to exceed $1,500. Provides that the tax credit shall be awarded on the basis of costs related to the purchase of crops used in the manufacture of beer or wine that are grown and harvested in Illinois. Defines terms. Effective immediately.
HB 4328 - Bennett and Guzzardi -Amends the Illinois Income Tax Act. Provides that each individual who serves as a volunteer firefighter or a volunteer EMS provider during the taxable year is entitled to a credit in an amount equal to $500. Effective immediately.
HB 4329 - Bennett - Amends the Illinois Income Tax Act. Creates a credit in an amount equal to 10% of the stipend or salary paid by the taxpayer to up to (i) 5 qualified college interns or (ii) 5 qualified high school interns during the taxable year. Provides that no taxpayer may claim more than $5,000 in total credits under that Section for all taxable years combined. Provides that the credit is exempt from the Act's automatic sunset provision. Effective immediately.
HB 4330 - Bennett - Amends the Illinois Estate and Generation-Skipping Transfer Tax Act. Provides that, for persons dying on or after January 1, 2023, the exclusion amount shall be the applicable exclusion amount calculated under Section 2010 of the Internal Revenue Code, including any deceased spousal unused exclusion amount (currently, the exclusion amount for Illinois estate tax purposes is $4,000,000). Effective immediately.
HB 4344 - Elik - Amends the Use Tax Act, the Retailers' Occupation Tax Act, the Aircraft Use Tax Law, and the Watercraft Use Tax Law. Provides that the taxes under those Acts do not apply to transfers that occur between a natural individual and (i) a revocable trust where the transferor is the grantor of the trust or (ii) a business entity if the transferor has ownership or control of the business entity. Provides that the transferor must retain a beneficial interest in the property, and the property must be transferred without valuable consideration.
HB 4346 - Elik - Amends the Illinois Income Tax Act. Creates a tax credit for individual taxpayers who were members in good standing of a volunteer fire department for at least 6 months during the taxable year. Provides that the amount of the credit is $1,000. Provides that the credit may not be carried forward or back and may not reduce the taxpayer's liability to less than zero. Exempts the credit from the Act's sunset requirements. Effective immediately.
HB 4362 - Reick - Amends the Illinois Department of Revenue Sunshine Act. Provides that the Department of Revenue shall submit for publication (currently, publish) quarterly in the Illinois Register an index of any informal rulings, opinions or letters issued by the Department of Revenue during the quarter and required to be made available. Effective January 1, 2023.
HB 4374 - Didech - Creates the Vacancy Fraud Act. Allows a taxing body or representative of a taxing body to file a vacancy fraud complaint with the county board of review if property is receiving vacancy relief and the property owner is not actively attempting to lease, sell, or alter the property. Sets forth factors in determining whether or not vacancy fraud has occurred. Sets forth penalties. Effective immediately. I'm interested in the thoughts of the property tax folks on this proposal.
HB 4381 - Jacobs - Amends the Use Tax Act, the Service Use Tax Act, the Service Occupation Tax Act, and the Retailers' Occupation Tax Act. Reduces the rate of tax on diapers and baby wipes to 1% (currently, 6.25%). Makes various formatting changes.
SB 3010 - Murphy - Amends the Illinois Income Tax Act. Provides that an amount equal to the sum of (i) 8% of the net revenue realized from the tax imposed upon individuals, trusts, estates, and electing pass-through entities and (ii) 9.11% of the net revenue realized from the tax imposed upon corporations shall be deposited into the Local Government Distributive Fund (currently, an amount equal to the sum of (i) 6.06% of the net revenue realized from the tax imposed upon individuals, trusts, and estates and (ii) 6.85% of the net revenue realized from the tax imposed upon corporations shall be deposited into the Local Government Distributive Fund). Amends the State Revenue Sharing Act to provide that amounts paid into the Local Government Distributive Fund are appropriated on a continuing basis. Effective July 1, 2022.
SB 3012 - Simmons - Amends the Property Tax Code. Provides that the county board may designate a geographic area within the county as a flood zone. Provides that homestead property that is located within a flood zone is entitled to a reduction of $5,000 from the property's equalized assessed value for the tax year in which the area is designated as a flood zone.
HB 3020 - Connor - Amends the Property Tax Code. Provides that each chief county assessment officer shall provide the information contained in the assessment list to the Department of Revenue. Provides that the Department of Revenue shall establish and maintain an interactive, publicly accessible map containing the assessed value of property located in the State, as well as current sales data for that property.
HB 3027 - Belt - Amends the Illinois Income Tax Act. Creates an income tax credit in an amount equal to $500 for individuals who serve as volunteer emergency workers for or on behalf of a volunteer fire protection association. Effective immediately.
SB 3038 - Peters - Amends the Illinois Procurement Code, the Counties Code, and the Illinois Municipal Code. Provides that no agreement or contract entered into by the State, any municipality, or any county, or any party negotiating on behalf of such governmental entity, for projects or economic development, including, but not limited to, tax incentives, payments in lieu of taxes, tax abatements, bonds, notes, loans, grants, or rebates, shall contain any provision, clause, or language that provides that the agreement or contract or any of its terms are confidential or that the parties to the agreement or contract are prohibited from disclosing, discussing, describing, or commenting upon the terms of the agreement or contract.
Illinois Department of Revenue
The Department issued a press release announcing a tax filing delay for taxpayers in Tornado-impacted counties.
The Department issued Publication 129 "Pass-through Entity Information on December 30. The publication includes a list of other states that the Department has determined have a "substantially similar entity level tax for purposes of determining the foreign tax credit for the pass through entity level tax.
The Department has issued 4 Information Bulletins since my last newsletter.
FY 2022-10 - Local Government Requirements for Sales Tax Jurisdiction Boundary Verification.
FY2022-11 - Change in the Motor Fuel Use Tax Rate, Effective January 1, 2022, through June 30, 2022.
FY 2022-12 - Changes to the Energy Assistance Charges and the Creation of the Energy Transition Assistance Charge.
FY 2022-13 - Illinois Creates a Water and Sewer Assistance Charge. Effective January 1, 2022, water and sewer providers may choose to voluntarily participate in a new program to provide low-income households with water and sewer assistance. The Water and Sewer Financial Assistance Act (Public Act 102-0262) allows participating providers to assess and collect a new Water and Sewer Assistance Charge from their customers. Revenue collected from the charge must be remitted to the Illinois Department of Revenue (IDOR) for deposit into the newly created Water and Sewer Low-Income Assistance Fund.
Rulemaking
The December 27 edition of the Illinois Register did not contain any new or adopted rulemakings by the Illinois Department of Revenue or the Department of Commerce and Economic Opportunity.
The January 3 edition of the Illinois Register did not contain any new or adopted rulemakings by the Illinois Department of Revenue or the Department of Commerce and Economic Opportunity.
The January 7 edition of the Illinois Register contains no new proposed or adopted rulemakings by the Illinois Department of Revenue and no adopted rulemakings by the Department of Commerce and Economic Opportunity.
Today's Illinois Register contains one new rulemaking by the Department of Commerce and Economic Opportunity establishing the Human Services Capital Investment Program. DCEO describes the program and the rules as follows:
"The Department of Commerce and Economic Opportunity's (the "Department") proposed rules implement the Human Services Capital Investment Grant Program, 20 ILCS 605/605-1030. The purpose of the Human Services Capital Investment Grant Program is to make capital improvement grants to physically improve or expand the facilities owned or leased by human services providers serving low-income and marginalized populations. 20 ILCS 605/605-1030(a). The Human Services Capital Investment Grant Program is established through a collaboration between the Department and the Illinois Department of Human Services ("DHS")."
