February 25: Senate deadline for third reading of substantive Senate bills.
February 25, 2022
State and Local Tax
This Week
Illinois General Assembly
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 House deadline for third reading of substantive House bills.
Today is the Senate deadline for third reading of substantive Senate bills.
The Senate Revenue committee met on Wednesday. The following bills were voted out of committee:
SB 1143 - Holmes - As introduced - A shell bill. As amended - Replaces everything after the enacting clause. Amends the Illinois Income Tax Act. Increases the maximum amount of the credit for instructional materials and supplies from $250 for taxable years beginning prior to January 1, 2023 to $300 for taxable years beginning on or after January 1, 2023. Effective immediately.
SB 2173 - Anderson - As introduced - 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.
As amended - Removes provisions of the introduced bill providing that, in the case of an employee participating in the SkillBridge program, the credit shall be equal to $3,500 per qualifying apprentice.
SB 3488 - Connor - As introduced - Amends the River Edge Redevelopment Zone Act. Provides that the Department of Commerce and Economic Opportunity may certify one additional pilot River Edge Redevelopment Zone in the City of Joliet. Effective immediately.
As amended - Replaces everything after the enacting clause. Reinserts the provisions of the introduced bill with the following changes: Provides that the Department of Commerce and Economic Opportunity may also certify two additional pilot River Edge Redevelopment Zones in the City of Kankakee and the City of Lockport. Makes conforming changes. 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.
As amended - Replaces everything after the enacting clause. Reinserts the provisions of the introduced bill with the following changes: Requires the Department of Human Services to maintain an electronic listing of the tax credit certificates it issues under the recovery tax credit program so that the Department of Revenue may confirm the eligibility of qualified employers for the tax credit. Provides that the tax credit authorized under the Act may not be carried forward. Contains provisions concerning tax credits for partners, shareholders of S corporations, and owners of limited liability companies. Makes other changes. Amends the Illinois Income Tax Act. Provides that a taxpayer who has been awarded a credit under the Recovery and Mental Health Tax Credit Act is entitled to a credit against the tax imposed under specified provisions of the Illinois Income Tax Act.
The House Revenue committee met on Thursday, No substantive action was taken on any legislation The committee heard presentations from the General Assembly's Commission on Government Forecasting and Accountability and the Illinois Department of Revenue on revenue estimates for Fiscal Year 2023. Here are links to the presentations: COGFA Document and IDOR Document .
The House Revenue committee held subject matter hearings on the following bills (no votes were taken on the bills):
HB 1842 - DeLuca - 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 4129 - Zalewski - Amends the Parking Excise Tax Act. Provides that the term "purchase price" does not include fees or charges paid to or retained by a booking intermediary and not remitted to the operator.
HB 5094 - Hirschauer - Amends the Property Tax Code. Provides that, for State fiscal years beginning on or after July 1, 2022, the Department of Revenue shall remit the assessor's additional performance-based compensation to the appropriate township, and the township shall pay the additional compensation to the assessor from those funds. Provides that, with respect to that additional compensation, the township shall be considered the assessor's employer for payroll purposes. Effective immediately.
No new tax-related legislation was introduced in the House or Senate since my last newsletter.
House and Senate amendments filed since the last newsletter:
SB 62 - Martwick - As proposed - Amends the Revised Uniform Unclaimed Property Act. 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.
As amended - Replaces everything after the enacting clause. Amends the Revised Uniform Unclaimed Property Act. Provides that for an amount held on a payroll card, an indication of owner interest includes wages from an employer under the Illinois Wage Payment and Collection Act in the form of a recurring Automated Clearing House credit previously authorized by the apparent owner. Provides that an Automated Clearing House credit is not an indication of owner interest if the holder assesses fees for account inactivity on the payroll card account.
SB 1143 - Holmes - As proposed - shell bill. As amended - Replaces everything after the enacting clause. Amends the Illinois Income Tax Act. Increases the maximum amount of the credit for instructional materials and supplies from $250 for taxable years beginning prior to January 1, 2023 to $300 for taxable years beginning on or after January 1, 2023. Effective immediately.
SB 2298 - Gillespie - As proposed - Amends the Tax Increment Allocation Redevelopment Act of the Illinois Municipal Code. Adds two factors to the determination of a "blighted area" for improved, industrial, commercial, and residential buildings or improvements: (i) if the redevelopment project area has had an annual average unemployment rate of at least 120% of the State's annual average unemployment rate; and (ii) if the redevelopment project area has a poverty rate of at least 20%, 50% or more of children in the redevelopment project area participate in the federal free lunch program, or 20% or more households in the redevelopment project area receive food stamps. Removes or modifies various factors from the definitions of "blighted area" and "conservation area" for improved and vacant areas. Provides that a new redevelopment project shall have a completion date no later than December 31st of the 10th year after the ordinance was adopted (rather than the 23rd year) and may be extended to 15 years (rather than 35 years). Provides that the joint review board and municipality shall approve surplus funds and extensions of redevelopment project area completion dates. Provides that surplus funds shall be distributed annually within 90 days (rather than 180 days) after the close of a municipality's fiscal year. Provides that a new or modified redevelopment project area that overlaps with any existing redevelopment project area shall not be approved. Effective July 1, 2021.
As amended - In the Property Tax Extension Limitation Law in the Property Tax Code, removed language providing that, for levy year 2022 and thereafter, the denominator of the limiting rate shall not include the recovered tax increment value but shall include 50% of the value of new property. In the Tax Increment Allocation Redevelopment Act in the Illinois Municipal Code: removes a change to the number of factors needed for a vacant parcel to be considered a "blighted area"; in a factor allowing an area that is not a "blighted area" to become a "blighted area" because of lack of community planning, provides that the factor applies when development of the proposed redevelopment project area occurred prior to the adoption by the municipality of a comprehensive or other community plan (rather than occurred prior to the adoption by the municipality of a comprehensive or other community plan or that the plan was not followed at the time of the area's development); adds provisions relating to a member of the joint review board unreasonably withholding support from the creation and of a redevelopment project area and modification to a redevelopment project area during the redevelopment project area adoption process; and provides that each township highway commissioner on a joint review board is a nonvoting member of the board.
SB 3488 - Connor - As introduced - Amends the River Edge Redevelopment Zone Act. Provides that the Department of Commerce and Economic Opportunity may certify one additional pilot River Edge Redevelopment Zone in the City of Joliet. Effective immediately.
As amended - Replaces everything after the enacting clause. Reinserts the provisions of the introduced bill with the following changes: Provides that the Department of Commerce and Economic Opportunity may also certify two additional pilot River Edge Redevelopment Zones in the City of Kankakee and the City of Lockport. Makes conforming changes. Effective immediately.
SB 3917 - Glowiak Hilton - As introduced - Creates the Manufacturing Illinois Chips for Real Opportunity (MICRO) Act. Creates the Manufacturing Illinois Chips for Real Opportunity (MICRO) Program to be administered by the Department of Commerce and Economic Opportunity. Creates various tax incentives for manufacturers of semiconductors, microchips, or semiconductor or microchip component parts, subject to an agreement with the Department of Commerce and Economic Opportunity. Amends the Illinois Income Tax Act, the Retailers' Occupation Tax Act, the Property Tax Code, the Telecommunications Excise Tax Act, the Electricity Excise Tax Law, and the Public Utilities Act. Effective immediately.
As amended - Makes changes to the introduced bill as follows: (1) provides that credits awarded under the Manufacturing Illinois Chips for Real Opportunity (MICRO) Act apply for tax years beginning on or after January 1, 2025 (in the introduced bill, January 1, 2026 in certain places); (2) in the Illinois Income Tax Act, makes changes concerning applicability of the Manufacturing Illinois Chips for Real Opportunity (MICRO) Act to pass-through entities; and (3) makes conforming changes in the Use Tax Act, the Service Use Tax Act, and the Service Occupation Tax Act concerning the building materials exemption for microchip and semiconductor manufacturing created in the Retailers' Occupation Tax Act.
HB 4639 - As introduced - Amends the Illinois Vehicle Code. Repeals a Section concerning the licensing of manufactured home dealers. Creates a new Article concerning the regulation of manufactured home dealers within the Chapter of the Code concerning the licensing of dealers, transporters, wreckers, and rebuilders. Defines terms and provides that no person shall engage in the business of selling or dealing in manufactured homes of any make unless licensed to do so by the Secretary of State. Adds provisions governing: applications; fees; fees; bonding; insurance; business requirements; term of license; cancellation or revocation of licenses; and other matters. Effective July 1, 2023.
As amended - Amends the Illinois Income Tax Act and the Retailer's Occupation Tax Act. Provides that the Director of Revenue may make information available to the Secretary of State for the purpose of administering provisions of the Illinois Vehicle Code concerning the regulation of manufactured home dealers.
HB 4871 - Welter - As introduced - A shell bill. As amended - Replaces everything after the enacting clause. Amends the Property Tax Code. Provides that, for taxable years 2023 and thereafter, the maximum income limitation for the senior citizens assessment freeze homestead exemption is $70,000 (currently, $65,000). Effective immediately.
Tax-related bills that passed the Senate:
SB 3027 - Belt - As introduced - 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.
As amended - Replaces everything after the enacting clause. Reinserts the provisions of the introduced bill with changes. Provides that, to qualify for the credit, the volunteer emergency worker may not receive compensation for his or her services of more than $10,000 for the taxable year. Removes provisions concerning volunteer fire protection associations. Makes changes to the definition of "volunteer emergency worker". Effective immediately.
SB 3065 - Joyce - 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 coal and aggregate exploration, mining, off-highway hauling, processing, maintenance, and reclamation equipment sunsets on July 1, 2028 (currently July 1, 2023). Effective immediately.
SB 3069 - Murphy - Amends the Property Tax Code. Provides that condominium associations and homeowner associations may also file appeals with the Property Tax Appeal Board. Effective immediately.
SB 3097 - Hunter - As introduced - 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. Effective January 1, 2022.
As amended - Provides that the bill is 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.
As amended by Senate committee amendment 1 - Replaces everything after the enacting clause. Reinserts the provisions of the introduced bill with the following changes: Requires the Department of Human Services to maintain an electronic listing of the tax credit certificates it issues under the recovery tax credit program so that the Department of Revenue may confirm the eligibility of qualified employers for the tax credit. Provides that the tax credit authorized under the Act may not be carried forward. Contains provisions concerning tax credits for partners, shareholders of S corporations, and owners of limited liability companies. Makes other changes. Amends the Illinois Income Tax Act. Provides that a taxpayer who has been awarded a credit under the Recovery and Mental Health Tax Credit Act is entitled to a credit against the tax imposed under specified provisions of the Illinois Income Tax Act.
As amended by Senate floor amendment 2 - Replaces everything after the enacting clause. Reinserts the provisions of Senate Amendment No. 1 with the following changes: Requires the Department of Human Services to maintain an electronic listing of the certificates of tax credit issued by which the Department of Revenue may verify tax credit certificates issued to qualifying employers. Provides that the tax credit authorized under the Act may not be carried forward. Provides that a taxpayer who is a qualified employer who has received a certificate of tax credit from the Department shall be allowed a credit against the tax imposed equal to the amount shown on such certificate of tax credit. Provides that if the taxpayer is a partnership or Subchapter S corporation the credit shall be allowed to the partners or shareholders in accordance with the determination of income and distributive share of income as provided under specified provisions of the Internal Revenue Code. Makes other changes. Amends the Illinois Income Tax Act. Provides that for taxable years beginning on or after January 1, 2023, a taxpayer who has been awarded a credit under the Recovery and Mental Health Tax Credit Act is entitled to a credit against the tax imposed under specified provisions of the Illinois Income Tax Act.
Tax-related bills that passed the House:
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 4993 - Ammons - Amends the Department of Commerce and Economic Opportunity Law of the Civil Administrative Code of Illinois. Requires the Department of Commerce and Economic Opportunity to establish a grant program for local chambers of commerce. Provides that the Department shall allocate $5,000,000 as grants to eligible chambers of commerce in amounts equivalent to 2 months of lost revenue, or 1/6th of the annual lost revenue, between 2019 and 2020 from funds appropriated under the American Rescue Plan Act. Provides that eligible chambers of commerce must have less than 1,500 paid members. Provides for the adoption of rules.
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.
Illinois Department of Revenue
The Department has updated Publication 129 to provide additional guidance about the PTE tax.
Rulemaking
The February 25 edition of the Illinois Register contained no new proposed or adopted rulemakings by the Illinois Department of Revenue ("IDOR") and no new rulemakings by the Department of Commerce and Economic Opportunity.
Today's Illinois Register contains adopted rulemakings by the Department of Commerce and Economic Opportunity. DCEO described the adopted rulemakings as follows:
"This rulemaking provides for changes in the cash match requirements for grants to Convention and Tourism Bureaus for operating expenses. In addition, these proposed changes include updates related to current grant provisions."
"The final rules implement the amendments to the Job Training and Economic Development Grant Program ("JTED program") statute authorized by P.A. 102-0016, Section 10-10 (20 ILCS 605/605-415). The purpose of the amended JTED program is to foster partnerships between employers in need of skilled employees and organizations that provide job training services and support to individuals, including youth, who are unemployed, under-employed or under-represented with one or more barriers to employment. Employers will be actively involved in identifying the skills needed to fill their in-demand jobs and in providing appropriate curricula and training materials for the programs. Implementing the final rules will provide compliance with the amendments to the JTED Grant Program statute (20 ILCS 605/605- 415), the Grant Accountability and Transparency Act (30 ILCS 708) and the American Rescue Plan Act of 2021."
Court cases
No new cases this week.
Tax Tribunal
No new decisions have been posted by the Tribunal this week. No new cases have been filed since my last newsletter. Only 12 cases have been filed with the Tribunal this year.
Chamber Day 2022
Location: President Abraham Lincoln Springfield - a Double Tree by Hilton
