December 14: Property Tax Appeals for Commercial Property Owners. Presented by Nora Devine who represents property tax owners before township and assessors and local boards of review and Mark Armstrong, the Kane County Supervisor of Assessments. Registration is free to Tax Institute members and is available at this link.
December 11, 2020
State and Local Tax
This Week
Illinois General Assembly
The General Assembly cancelled the fall veto session.
It does not appear that the General Assembly will return to Springfield before January possibly for a lame duck session prior to the swearing in of the new General Assembly on January 13, 2021.
Possible Tax Institute legislation
The Internal Revenue Service recently issued Notice 2020-75.which announces rules to be included in forthcoming proposed regulations. The IRS announcement of the Notice provides "Specifically, the proposed regulations will clarify that State and local income taxes imposed on and paid by a partnership or S corporation on its income are allowed as a deduction by the partnership or S corporation in computing its non-separately stated taxable income or loss for the taxable year of payment, and therefore are not subject to the State and local tax deduction limitation for partners and shareholders who itemize deductions."
Earlier this week, I was approached by a member of the Illinois Senate about the possibility of Illinois legislation to take advantage of this Notice. I would like to convene a call next week to discuss this issue with any members of the Tax Institute who are interested. In particular, I could use the advice and assistance of those of you work with, and file Illinois returns for, pass-through entities. I would like to discuss whether such legislation would provide a net benefit to partners of partnerships and S corporation shareholders, especially in light of the fact that Illinois already taxes pass-through entities at the entity level pursuant to the personal property tax replacement income tax. Let me know if you are interested in participating via an email or a phone call to my mobile number and I'll send out a meeting notice to interested folks at the beginning of next week.
Rulemaking
The December 11 edition of the Illinois Register did not contain any proposed or adopted rulemakings by the Illinois Department of Revenue or the Illinois Department of Commerce and Economic Opportunity.
The Joint Committee on Administrative Rules has scheduled its next meeting for December 15. The Department of Revenue rulemaking implementing the "Leveling the Playing Field" legislation effective January 1, 2021 is on the JCAR agenda.
Court cases
The Illinois Supreme Court declined to hear an appeal in Best Buy Stores L.P. v. Department of Revenue. You will recall that the case involved whether sales of certain appliances by Best Buy were retail sales or whether the appliances were installed in construction contracts. In my estimation, the Department of Revenue should provide guidance to taxpayers and I will suggest to the Department that rulemaking is appropriate.
John P. Sanfillippo v. Rickert is an appeal of a property tax objection proceeding to obtain a refund of certain taxes they paid to defendant, David Rickert, as the Kane County Treasurer and ex officio Kane County Collector (Collector). The taxes at issue had been levied by intervenor, Community Unit School District No. 300 (District), pursuant to section 17-2.2a of the School Code (105 ILCS 5/17-2.2a (West 2016)), for special education purposes. The Objectors complained that the District was not authorized to levy the amount imposed for special education without first seeking referendum approval pursuant to section 17-2.2a of the School Code (id.) and section 18-190(a) of the Property Tax Extension Limitation Law (PTELL) (35 ILCS 200/18-190(a) (West 2016)). On cross-motions for summary judgment, the trial court granted the District’s and the Collector’s motion and denied the Objectors’ motion. The appellate court upheld ruling of the trial court.
Tax Tribunal
No new decisions were issued by the Tribunal this week.
One new case may be of interest. Saks & Co LLC v. Department of Revenue is a protest of a sales and use tax assessment issued by the Department. Apparently, there was a problem with providing documentation of non-taxable receipts to the Department of Revenue caused by the impact of the pandemic. As a result, the Department subjected all sales claimed as exempt to sales and use tax. The taxpayer attempted to protest the NTLs itself without outside counsel. The Tribunal rejected the protest, but as is its normal practice in such cases has given the taxpayer 30 days to refile a petition.
