The House and Senate returned to Springfield on Tuesday and were scheduled to remain in session through Friday. The Senate cancelled the Friday session and left town on Thursday.

The House and Senate are both scheduled to be in session next week Tuesday through Friday. Next Friday is the Senate deadline for third reading of substantive Senate bills.

Today is the House deadline for moving substantive House bills out of committee.

The House Transportation: Vehicles & Safety committee met on Wednesday. On the agenda was, HB 5395 which amends the Motor Vehicle Franchise Act. Provides that, if a manufacturer exercises a right of first refusal in order to terminate a dealership that paid at least 10% of the local retailers' occupation tax imposed by the municipality or county where the terminated dealership is located during the calendar year immediately prior to the termination, then, for a period of 20 consecutive years after the dealership is terminated, the manufacturer must pay to the municipality or county in which the terminated dealership was located an amount equal to the certified local retailers' occupation tax amount. Provides that the certified local retailers' occupation tax amount is the highest amount paid by the dealership in any of the 5 years immediately prior to the year in which the dealership was terminated. Effective immediately.

We opposed HB 5395. IL Chamber CEO Todd Maisch testified in opposition to this bill. The bill passed out of committee on a partisan roll call with a commitment from the sponsor to continue discussions with the opponents. However, it does not appear that we could agree to any versions of this concept, however modified.

The Senate Revenue committee met on February 16 at 5:00. The following bills passed the committee unanimously:

SB 2173 - Amends the Illinois Income Tax Act. Provides that an apprentice who is hired by the taxpayer through the United States Department of Defense SkillBridge internship program is considered a qualifying apprentice for the purpose of the apprenticeship education expense credit. Provides that, in the case of an employee participating in the SkillBridge program, the credit shall be equal to $3,500 per qualifying apprentice. Effective immediately.

SB 3097 - Hunter - Amends the Property Tax Code. Provides that, after filing a petition to obtain a tax deed, the owner of a certificate of purchase must file with the clerk of the circuit court (currently, the county clerk) the names and addresses of persons who are entitled to service of notice. As amended provides that the bill is effective immediately.

SB 3832 - Hunter - Amends the Use Tax Act, the Service Use Tax Act, the Service Occupation Tax Act, and the Retailers' Occupation Tax Act. Provides that tangible personal property sold by or on behalf of the State Treasurer pursuant to the Revised Uniform Unclaimed Property Act is exempt. As amended provides that the bill is effective immediately.

The Senate Revenue committee is not yet scheduled to meet next week.

The House Revenue committee met on on Tuesday and Thursday, No substantive action was taken on any legislation on Tuesday. The Chairman moved some additional House bills to subcommittee. The committee held subject matter hearings on the following bills (no votes were taken on the bills):

HB 4920 - Ammons - Amends the Illinois Income Tax Act. Provides that the earned income tax credit shall be: (i) 20% of the federal tax credit for each taxable year beginning on or after January 1, 2023 and prior to January 1, 2024; (ii) 22% of the federal tax credit for each taxable year beginning on or after January 1, 2024 and prior to January 1, 2025; and (iii) 25% of the federal tax credit for each taxable year beginning on or after January 1 2025. Provides that the earned income tax credit is available to persons who have attained the age of 18 but have not yet attained the age of 25 and to persons who are 65 years of age or older, without regard to any age requirements that would otherwise apply to individuals without a qualifying child under federal Internal Revenue Code. Extends the earned income tax credit to individuals filing a return using an individual taxpayer identification number. Creates a child dependent tax credit that shall be not less than $600 when combined with the taxpayer's earned income tax credit. Effective immediately.

HB 4161 - Hurley - Amends the Illinois Income Tax Act. Creates an income tax checkoff for donations to the 100 Club of Illinois Fund. Amends the State Finance Act to create the Fund. Provides that moneys deposited into the Fund shall be used to make grants to the 100 Club of Illinois for services in Illinois. Effective immediately.

HB 4547 - Burke - Amends the School Code. Provides that if a school district approves a property tax relief abatement for a given levy year, then the school district shall file in the office of the county clerk of each county in which a portion of the district is situated a certified copy of the resolution providing for the property tax relief abatement. Provides that the property tax relief abatement is included in the district's aggregate extension base for purposes of the Property Tax Extension Limitation Law. Effective immediately.

HB 4607 - Evans - Amends the Retailers' Occupation Tax Act. Provides that, if a person who is licensed as a retailer of alcoholic liquor under the Liquor Control Act of 1934 has had the renewal of his or her certificate of registration denied or has had his or her certificate of registration revoked, the Department shall file a notice with the Liquor Control Commission that includes a certification attesting that the person's certificate of registration renewal has been denied after notice and an opportunity to be heard. Amends the Liquor Control Act of 1934. Provides that the Liquor Control Commission shall deactivate the license of any licensee authorized to sell alcoholic liquor at retail if that person's certificate of registration renewal has been denied by the Department of Revenue or revoked. Effective January 1, 2023.

HB 5287 - Croke - Amends the Department of Revenue Law of the Civil Administrative Code of Illinois. Provides that, the Department of Revenue may adopt rules for payment by cryptocurrency of any amount due under any Act administered by the Department only when the Department is not required to pay a discount fee or charge to convert the cryptocurrency to United States dollars. Defines "cryptocurrency". Effective immediately.

The House Revenue committee met on Thursday and passed the following bills out of committee to the floor:

HB 448 - Walker - As introduced - Amends the Property Tax Extension Limitation Law in the Property Tax Code. Provides that, for levy years 2021 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. Effective immediately.

HB 726 - Greenwood - Amends the Financially Distressed City Law of the Illinois Municipal Code. Provides that if a financially distressed city or the city's Financial Advisory Authority is awarded a State grant, any moneys the financially distressed city or Authority would be required to match under the grant are waived unless the moneys under the grant come from federal moneys that require the match. Provides that the entity awarding a State grant shall not consider a municipality's status as a financially distressed city in awarding a State grant. Effective immediately. The sponsor advised that this bill is being moved forward to allow the City of East St. Louis to be designated as a financially distressed city, if such a designation becomes necessary in the future.

HB 4126 - Tarver - Amends the Invest in Kids Act. Makes a formatting change to create a first priority group for eligible students who received a scholarship from a scholarship granting organization during the previous school year. Provides that qualified schools may establish a maximum scholarship amount, which may not exceed the necessary costs and fees for attendance at the qualified school. Provides that the qualified school shall notify the scholarship granting organization of its necessary costs and fees as well as any maximum scholarship amount set by the school. Effective immediately.

HB 4132 - Hoffman - Amends the Parking Excise Tax Act. Creates an exemption for parking areas and garages that are operated for the use of attendees, vendors, or employees of the Illinois State Fair or the DuQuoin State Fair and are not otherwise subject to taxation under the Act in the ordinary course of business. The Chairman advised that this bill will be amended to add additional amendments to the parking tax. It is unclear at this point what will be in the amendment.

HB 4161 - Hurley - Amends the Illinois Income Tax Act. Creates an income tax checkoff for donations to the 100 Club of Illinois Fund. Amends the State Finance Act to create the Fund. Provides that moneys deposited into the Fund shall be used to make grants to the 100 Club of Illinois for services in Illinois. Effective immediately.

HB 4228 - Hoffman - Amends the Property Tax Code, the Community Care for Persons with Developmental Disabilities Act, the Counties Code, and the Community Mental Health Act. Contains provisions validating certain tax levies for community mental health boards. Effective immediately.

HB 4278 - Kifowit - As introduced - Amends the Revised Uniform Unclaimed Property Act. Provides that an heir or agent who files an unclaimed property claim in which the decedent's property does not exceed $250 (rather than $100) may submit an affidavit attesting to the heir's or agent's capacity to claim in lieu of submitting a certified copy to verify a claim. Provides that, in response to the filing of an unclaimed property claim for a decedent's property not exceeding $250, the administrator shall not require that the affidavit be accompanied by a copy of the decedent's death certificate. Effective immediately.

As amended - Replaces everything after the enacting clause. Amends the Revised Uniform Unclaimed Property Act. Allows the administrator to deliver property or pay the amount owing to a person without the person filing a claim if the value of the property that is owed the person is $5,000 (rather than $2,000) or less. Allows the administrator to waive a specific requirement and pay or deliver property directly to a person if the property has a value of less than $2,000 (rather than $500). Allows an heir or agent who files an unclaimed property claim in which the decedent's property does not exceed $250 (rather than $100) to submit an affidavit attesting to the heir's or agent's capacity to claim in lieu of submitting a certified copy of the will to verify a claim. Provides that an affidavit is not required to include a copy of the decedent's death certificate if other evidence of the death of the owner is available. Makes conforming changes. Effective immediately. This bill is an initiative of the State Treasurer.

HB 4326 - Stuart - As introduced - Amends the Counties Code. Provides that 1% of the school facility occupation taxes collected shall be distributed to the regional superintendent of schools (currently, these moneys are deposited into the Tax Compliance and Administration Fund) to cover the costs in administering and enforcing the provisions of the school facility occupation taxes Section of the Code. Effective July 1, 2022.

As amended - Provides that 50% (rather than 1%) of the 2% deducted from the amounts collected under the provisions shall be deposited into the Tax Compliance and Administration Fund and 50% (rather than 1%) shall be distributed to the regional superintendent of schools to cover the costs in administering and enforcing the provisions of this Section.

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. This bill is an initiative of the Illinois Department of Revenue.

HB 4547 - Burke - Amends the School Code. Provides that if a school district approves a property tax relief abatement for a given levy year, then the school district shall file in the office of the county clerk of each county in which a portion of the district is situated a certified copy of the resolution providing for the property tax relief abatement. Provides that the property tax relief abatement is included in the district's aggregate extension base for purposes of the Property Tax Extension Limitation Law. Effective immediately.

HB 4607 - Evans - Amends the Retailers' Occupation Tax Act. Provides that, if a person who is licensed as a retailer of alcoholic liquor under the Liquor Control Act of 1934 has had the renewal of his or her certificate of registration denied or has had his or her certificate of registration revoked, the Department shall file a notice with the Liquor Control Commission that includes a certification attesting that the person's certificate of registration renewal has been denied after notice and an opportunity to be heard. Amends the Liquor Control Act of 1934. Provides that the Liquor Control Commission shall deactivate the license of any licensee authorized to sell alcoholic liquor at retail if that person's certificate of registration renewal has been denied by the Department of Revenue or revoked. Effective January 1, 2023. This bill is an initiative of the Illinois Department of Revenue. The bill was passed out of committee despite concerns expressed by Republican spokesperson on the committee Representative Reick who questioned whether liquor licensees were being afforded proper due process before what would be an automatic suspension of their liquor registration.

HB 4785 - Burke - As introduced - Amends the Cook County Forest Preserve District Act. Provides that all general taxes levied by the board of any forest preserve district shall be levied by general categories annually (currently, by March 28 annually) for all fiscal years in the same manner as taxes are levied for city and village purposes. Effective immediately.

HB 4820 - Meier - Amends the Tax Increment Allocation Redevelopment Act of the Illinois Municipal Code. Extends the estimated date of completion of a redevelopment project and the retirement of obligations issued to finance redevelopment project costs for an ordinance adopted on August 3, 2001 by the Village of Aviston. Effective immediately.

HB 5287 - Croke - Amends the Department of Revenue Law of the Civil Administrative Code of Illinois. Provides that, the Department of Revenue may adopt rules for payment by cryptocurrency of any amount due under any Act administered by the Department only when the Department is not required to pay a discount fee or charge to convert the cryptocurrency to United States dollars. Defines "cryptocurrency". Effective immediately. This bill was not an Illinois Department of Revenue initiative. The Department was silent in committee when the bill was discussed.

HB 5532 - Collins - As introduced - Amends the Property Tax Code. Provides that with the exception of a county or taxing district acquiring tax certificates to property, all purchasers or assignees of a property at a tax sale shall pay the clerk postage plus the sum of $10 dollars (currently, the purchaser or assignee). Provides that not less than 1 month (currently, 3 months) nor more than 6 months prior to the expiration of the period of redemption, the purchaser or his or her assignee shall prepare and deliver to the clerk of the Circuit Court of the county in which the property is located, the notice provided for, together with the statutory costs for mailing the notice by certified mail, return receipt requested. Provides that notwithstanding any provision to the contrary, all properties owned and held for future development by specified entities are exempt from property taxes. Provides requirements to claim the exemption. Specifies the County of Cook d/b/a Cook County Land Bank as an entity exempt from property taxes. Provides that when property is owned and held by a specified entity, then excludes them from needing to file an application with the county board of review or board of appeals. Provides that the decision of the board of review is final with regards to exemptions to the specified entities. Effective immediately.

As amended - Replaces everything after the enacting clause. Reinserts the provisions of the introduced bill with changes. Adds the South Suburban Land Bank and Development Authority and the Northern Illinois Land Bank Authority to the list of entities whose property is exempt if it is held for future development. Makes a conforming change concerning final decisions of the board of review. Makes various formatting changes. Effective immediately.

SB 1711 - Hirschauer - As introduced - 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.

No new tax-related legislation was introduced in the House or Senate since my last newsletter.

SB 3477 - Replaces everything after the enacting clause. Creates the Vacancy Fraud Act. Provides that, on or after January 1, 2023, any owner of real property located in a county with 3,000,000 or more inhabitants may file a written vacancy fraud complaint alleging that: (i) certain real property in that county has received a decrease in assessed value, a decrease in market value, or an abatement of taxes because the property is vacant; and (ii) the owner of that vacant property is not actively attempting to sell or lease the property or actively attempting to alter or modify the property to prepare it for sale or lease. Sets forth factors for determining vacancy fraud. Provides that the owner of the vacant property may be subject to the following penalties: (1) the payment of 3 times the amount of back taxes owed for any vacancy reduction the subject property received for the period in which the subject property received the reduction but was found to have engaged vacancy fraud; and (2) the payment of interest on any back taxes. Effective immediately.

SB 3882 - Fine - As introduced - 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.

HB 448 - see above

HB 1842 - DeLuca - As introduced - Amends the Property Tax Code. Provides that certain property located in Bloom, Bremen, Calumet, Rich, Thornton, or Worth Township may be certified as southland reactivation property. Provides that, beginning with the first 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 shall be valued at 50% of the last known equalized assessed value. Sets forth the maximum aggregate tax liability for property that has been certified as southland reactivation property. Effective immediately.

HB 4009 - DeLucca - As introduced - Amends the Property Tax Code. Provides that any taxing district shall abate its taxes on property that (i) contains a grocery store or supermarket that is owned by a minority person, a woman, or a person with a disability and offers fresh produce for sale at retail but does not sell alcohol and (ii) is located in an area that qualified as a food desert in the taxable year immediately preceding the taxable year in which the grocery store or supermarket first conducted business at that location. Defines terms "food desert", "minority person", "woman", and "person with a disability". Amends the Counties Code and the Illinois Municipal Code. Provides that counties and municipalities shall waive all fees associated with building permits issued for property that has been granted an abatement under those provisions. Amends the Business Corporation Act of 1983 and the Limited Liability Company Act to waive fees for filing an annual report.

As amended - Replaces everything after the enacting clause. Reinserts the provisions of the introduced bill with changes. In provisions setting forth the qualifications for a grocery store property tax abatement, includes a requirement that, as a result of the presence of the grocery store, the area no longer qualifies as a food desert. Makes changes concerning the definition of "grocery store". Removes a requirement that all grocery store property that is granted the abatement must be owned by a minority person, a woman, or a person with a disability. Provides that, notwithstanding the food desert requirements in the introduced bill, a grocery store also qualifies for an abatement if (i) there is one, but not more than one, other grocery store located in the census tract that causes the census tract not to qualify as a food desert at the time of the first application for an abatement under this Section with respect to the applicant's property and (ii) either the applicant's grocery store or the other grocery store located in the census tract is owned by a minority person, a woman, or a person with a disability.

HB 4329 - Bennett - As introduced - 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 4374 - Didech - As introduced - 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.

As amended - Replaces everything after the enacting clause. Creates the Vacancy Fraud Act. Provides that, on or after January 1, 2023, any owner of real property located in a county with 3,000,000 or more inhabitants may file a written vacancy fraud complaint alleging that: (i) certain real property in that county has received a decrease in assessed value, a decrease in market value, or an abatement of taxes because the property is vacant; and (ii) the owner of that vacant property is not actively attempting to sell or lease the property or actively attempting to alter or modify the property to prepare it for sale or lease. Sets forth factors for determining vacancy fraud. Provides that the owner of the vacant property may be subject to the following penalties: (1) the payment of 3 times the amount of back taxes owed for any vacancy reduction the subject property received for the period in which the subject property received the reduction but was found to have engaged vacancy fraud; and (2) the payment of interest on any back taxes. Effective immediately. We continue to oppose this bill. The amendment fails to correct the fundamental problems with the legislation.

HB 5142 - Harris - As introduced - Amends the Illinois Income Tax Act. Provides that all individual income tax return forms shall contain an appropriate space in which the taxpayer may indicate that the Department of Revenue may share the taxpayer's income information with other State agencies in order to determine the taxpayer's eligibility for health insurance benefits. Provides that the Department shall provide the Department of Healthcare and Family Services and the Department of Insurance with the individual income tax information collected as soon as practicable. Amends the Illinois Insurance Code. Provides that the Department of Insurance shall use taxpayer income information provided by the Department of Revenue to determine if an individual is eligible for a premium tax credit under the Patient Protection and Affordable Care Act. Provides that if the individual is determined to be eligible for a premium tax credit, the Department shall notify the individual of his or her eligibility as soon as practicable. Provides that the Department shall inform the individual of the next open enrollment period in the federal health insurance marketplace, and shall inform the individual of the special enrollment period triggered by a qualifying life event. Provides that if a State health benefits exchange is established in the State, an individual determined to be eligible for a premium tax credit shall be eligible to enroll in a qualified health plan through the State health benefits exchange during a special enrollment period that shall expire 60 days after the individual is notified by the Department of his or her eligibility for a premium tax credit. Makes other changes. Amends the Illinois Public Aid Code. Provides that the Department of Healthcare and Family Services shall use taxpayer income information provided by the Department of Revenue to determine if an individual is eligible for health benefits provided by any program administered by the Department. Provides that if the individual is determined to be eligible for health benefits, the Department shall notify the individual of his or her eligibility as soon as practicable.

As amended - Provides that for tax years beginning on or after January 1, 2022, all individual income tax return forms shall contain an appropriate space in which the taxpayer may indicate that the Department of Revenue may share the taxpayer's income information with other State agencies in order to determine the taxpayer's eligibility for health insurance benefits. Further amends the Illinois Insurance Code. Provides that the Director of Revenue may make available to the Department of Healthcare and Family Services and the Department of Insurance individual income tax information.

Tax-related bills that passed the Senate:

SB 2951 - Amends the Illinois Income Tax Act. Extends the income tax credit for certain hospitals through taxable years ending on or before December 31, 2027 (currently, December 31, 2022). Amends the Use Tax Act, the Service Use Tax Act, the Service Occupation Tax Act, and the Retailers' Occupation Tax Act. Provides that the credit for personal property sold to or used by certain hospitals is exempt from the Acts' automatic sunset provisions. Effective immediately.

SB 3189 - Amends the Use Tax Act and the Retailers' Occupation Tax Act. Provides that, on and after January 1, 2023, returns for motor vehicles, watercraft, aircraft, and trailers that are required to be registered with an agency of the State are required to be filed electronically. This bill is a Department of Revenue initiative.

SB 3661 - Amends the Motor Fuel Tax Law. Repeals provisions concerning reports by railroad companies, and street, suburban, or interurban railroad companies. Makes a conforming change. This bill is a Department of Revenue initiative.

SB 3685 - Amends the Property Tax Code. Provides that courses and training for the Certified Illinois Assessing Officer certificate shall be held in a manner and format deemed appropriate by the Department of Revenue (currently, required to be held at various convenient locations throughout the State). Removes a requirement that the hearing concerning the tentative equalization factor shall be held in either Chicago or Springfield. Effective January 1, 2023.

SB 3895 - As introduced - Amends the Property Tax Code. Provides that to receive a reduction in assessed value, an owner, for the purpose of the initial application and only until the building is put in service, may provide proof of either a deed restriction or participation in a government program that includes legally enforceable affordability requirements comparable to the requirements of this Code and the chief county assessment officer shall furnish a letter of intent to the applicant indicating that a preliminary assessment of the new construction or qualifying rehabilitation indicates that it will meet all eligibility requirements. Modifies "assessed value for the residential real property in the base year" to mean the assessed value used to calculate the tax bill, as certified by the Board of Review, for the tax year immediately prior to the tax year in which the building permit is issued; for property assessed as other than residential property, the "assessed value for the residential real property in the base year" means the assessed value that would have been obtained had the property been classified as residential as derived from the Board of Review's certified market value (currently, the value in effect at the end of the taxable year prior to the latter of: (1) the date of initial application; or (2) the date on which 20% of the total number of units in the property are occupied by eligible tenants paying eligible rent). Modifies "maximum income limits" to include when a property may be deemed to have satisfied the maximum income limits with a weighted average if municipal, state, or federal laws, ordinances, rules or regulations requires the use of a weighted average of no more than 60% of area median income for that property. Modifies "maximum rent" to include that a property may be deemed to have satisfied the maximum rent with a weighted average if municipal, state, or federal laws, ordinances, rules or regulations requires the use of a weighted average of no more than 60% of area median income for that property.

Last Friday was a state holiday so no Illinois Register was published. The Illinois Register was published on Monday and Friday this week.

The February 14 edition of the Illinois Register contained one new rulemaking and one adopted rulemaking by the Illinois Department of Revenue ("IDOR"). The February 14 Illinois Register did not contain any new rulemakings by the Department of Commerce and Economic Opportunity ("DCEO") and one adopted rulemaking by DCEO.

The IDOR proposed rulemaking is described as follows:

"This rulemaking creates a new Part 515 to implement the provisions of Public Act 102-0262, which created the Water and Sewer Financial Assistance Act. This Act establishes a low-income water and sewer assistance program that allows water and sewer providers to voluntarily participate by assessing each of its customer accounts a charge to be paid into a fund to benefit eligible applicants. The rules provide key definitions, the nature of the charge, the rates, the process for filing a return with the Department, and the sections of the Retailers’ Occupation Tax Act that are incorporated by reference into the Water and Sewer Assistance Act."

The IDOR adopted rulemaking is described as follows:

"These rules are being amended in Section 131.105 to provide additional clarity for key definitions used throughout Part 131. Section 131.107 is being amended to clarify the different types of retailers subject to the provisions of the Leveling the Playing Field for IL Retail Act ("Act"). They specifically amend the current regulations to provide that the Metropolitan Pier and Exposition Authority Retailers' Occupation Tax ("MPEA") and the Chicago Home Rule Municipal Soft Drink Tax ("Soft Drink Tax") are required to be collected and remitted by food delivery services that are considered marketplace facilitators meeting a tax remittance threshold. The rules further provide information regarding the manner in which these taxes are imposed under these circumstances. This amendment reverses provisions of Compliance Alert 2021-01 issued by the Department with regard to collection of these taxes. In connection with this change, provisions are added to emphasize, as required elsewhere in the regulations, that food delivery services that are considered marketplace facilitators under the Act must provide food service establishments with a certification that the food delivery service assumes the rights and duties of a retailer under the Retailers' Occupation Tax Act and all applicable local taxes administered by the Department for sales made by the food service establishment on the marketplace, and that it will remit all such taxes for such sales. The rules specify additional requirements for this certification, and clarify that food service establishments that have received this certification are generally relieved of liability for tax on such sales (except as provided in Section 2 of the Retailers' Occupation Tax Act and Section 131.150 (b)-(c) of the rules, or as provided in Section 131.135 (f) of the rules). This section further clarifies those taxes which may be incurred by remote retailers, marketplace sellers and marketplace facilitators that are not subject to the Act, which include both taxes that are and are not administered by the Department. Section 131.110 is being amended to provide that remote retailers exclusively making tax exempt sales (i.e., 100% of their sales are nontaxable) are not subject to the provisions of the Act. In addition, Section 131.120 is being amended to specify that, for remote retailers, occasional sales are excluded from consideration when calculating tax remittance thresholds. However, Section 131.140, governing marketplace facilitators, is amended to provide that occasional sales must be included when calculating tax remittance thresholds. Throughout the regulations, provisions are being amended to specify that retailers incurring Retailers' Occupation Tax based on origin sourcing must consult the provisions of 86 Ill. Adm. Code 270.115 (c) and (d) to determine the location at which selling activities occur, and therefore, which local taxes will be incurred. Section 131.145 is being amended to clarify books and records requirements for marketplace facilitators, including the manner in which sales made by marketplace sellers that possess active exemption identification numbers ("E" numbers) must be documented. Numerous examples related to auctioneers are being removed, due to Public Act 102-0634 changing the applicability of the Act to these types of retailers. Illustration A is being amended to provide additional clarity."

The DCEO described their adopted rulemaking as follows:

"The proposed rules implement the Back to Business Grant Program authorized by P.A. 102-0016, Article 3 (20 ILCS 605/605- 1050), and P.A. 102-0017 Article 127, Section 35. The proposed rules provide the administrative framework required for the Department to administer this program which provides financial support to businesses that have incurred losses because of the COVID19 public health emergency."

The February 18 edition of the Illinois Register contains two proposed rulemakings by the Illinois Department of Revenue. Today's Illinois Register does not contain any adopted rulemakings by the Illinois Department of Revenue or any proposed or adopted rulemakings by the Department of Commerce and Economic Opportunity.

The Department of Revenue described the proposed amendments to its income tax rules as follows:

"This rulemaking amends sections 100.2171, 100.2190 and 100.2193 to reflect new sunset dates for the Angel Investment Credit, Affordable Housing Donations Credit and Student Assistance Contributions Credit enacted by Public Acts 99-915, 101-645, 102-016 and 102-0289."

The Department described the proposed amendments to the Retailers' Occupation Tax rules as follows:

"Amends Section 130.701– General Information For Obtaining A Certificate of Registration. Currently the Department of Revenue is allowed to post a Notice of Revocation of Certificate of Registration. This amended regulation allows the Department of Revenue to post a Notice of Expiration of Certificate of Registration. An example of the Notice is included and referred to as Illustration D."

Staats comment: As I understand the proposed amendment, that Department plans to go to the place of business of retailers who have expired certificates of registration and post a notice on the entrance and windows of the business announcing the expiration of the registration. I'm not sure what their statutory authority is for this action. The Department cites as authority, their general rulemaking authority under 35 ILCS 120/12.

No new cases this week.

No new decisions have been posted by the Tribunal this week.

One new case may be of interest. Rothman v. Department of Revenue is another residency case. It is illustrative of the obsession of the Department's audit and legal divisions to go any lengths to assert that a taxpayer retains Illinois residency for Illinois Income Tax purposes. The Rothmans are represented by Mike Wynne of Tax Institute member law firm Jones Day.