The Senate returned to Springfield Tuesday through Thursday. The House was not scheduled to be in Springfield this week. Both chambers continued to hold committee hearings virtually.

Yesterday was the Senate deadline for moving substantive Senate bills out of committee. We have heard that unlike previous years, there will only be a limited number of bills granted extensions of the committee deadline. As of this morning, I don't know which tax-related bills have received extensions.

The House and Senate are scheduled to return to Springfield next week on Tuesday and remain in session through Friday. Next Friday is the House deadline for moving substantive House bills out of committee.

The House Transportation: Vehicles & Safety committee is scheduled to meet next Wednesday. On the agenda is a tax-related bill, 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 oppose HB 5395. IL Chamber CEO Todd Maisch and I plan to testify in opposition to this bill.

The Senate Revenue committee met on February 9 at 4:00. The following bills passed the committee unanimously:

SB 2154 - Tracy - Amends the Property Tax Code. Provides that buildings, structures, and improvements that are not permanently attached to the land are not considered property for the purposes of the Code.

SB 2990 - Gillespie - TIF extension - Village of Palatine

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.

SB 3090 - Villivalam - Amends the Motor Fuel Tax Law. In provisions allowing tax-free sales of dyed diesel fuel for non-highway purposes, provides that the sale must be made by the licensed distributor to the end user of the fuel who is not a licensed distributor (currently, someone who is not a licensed distributor). Effective immediately. This bill is an Illinois Department of Revenue initiative. This bill is an Illinois Department of Revenue initiative.

SB 3106 - Murphy - Amends the Tax Increment Allocation Redevelopment Act of the Illinois Municipal Code. Provides that parcels are considered to be contiguous if they touch or join one another in a reasonably substantial sense. Provides that parcels are also considered to be contiguous if they meet the criteria for annexation under specified provisions of the Illinois Municipal Code. Provides the changes and declarative of existing law and are retroactive with regard to pending actions, except to any rights of a party subject to a final judgment entered pursuant to the September 23, 2021 opinion of the Illinois Supreme Court in Board of Education of Richland School District 88A v. City of Crest Hill, 2021 IL 126444. Effective immediately.

SB 3215 - Bennett - 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. As amended - In provisions of the introduced bill validating certain boards and levies, provides that those provisions apply on and after January 1, 1994 and on or before the effective date of the amendatory Act.

SB 3634 - Villanueva - 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, 2022, breast pumps, breast pump collection and storage supplies, and breast pump kits are exempt from the taxes imposed under those Acts. Effective immediately.

SB 3658 - Martwick - Amends the County Motor Fuel Tax Law in the Counties Code. Defines "sold at retail within the county" and "retailers within the county". Effective January 1, 2023.

SB 3661 - Martwick - As amended - Amends the Motor Fuel Tax Law. Repeals provisions concerning reports by railroad companies, and street, suburban, or interurban railroad companies. Makes a conforming change.

SB 3685 - Stadelman - 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 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.

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.

SB 3894 - Munoz - Amends the Department of Revenue Law of the Civil Administrative Code of Illinois. Requires the Department of Revenue to conduct a property tax assessment process study. Amends the Property Tax Code. Limits the increase in the assessment of any commercial or residential property to 15% over the assessed value in the previous tax year and 40% in any 3-year period. Provides that the limitation shall apply in counties with 3,000,000 or more inhabitants and may apply in other counties by ordinance or resolution of the county board. Provides that, in counties with 3,000,000 or more inhabitants, whenever the chief county assessment officer of the county substantively changes the procedure by which he or she assesses properties, the chief county assessment officer shall hold a 60-day public comment period to receive input from members of the public before the change takes effect. There was a fair amount of discussion of this bill, with a number of committee members advising that they were voting to move the bill out of committee, but the bill will need to be amended before they would commit to voting for the bill when it is called for a vote by the full Senate.

SB 3895 - Gillespie - 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.

SB 3917 - Glowiak-Hilton - 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.

SB 3944 - Sims - Amends the Illinois Income Tax Act and the Film Production Services Tax Credit Act of 2008. Provides that, if a film production credit is transferred by the taxpayer, then the transferor taxpayer shall pay to the Department of Commerce and Economic Opportunity a specified percentage of the amount transferred, which shall be deposited into the Illinois Production Workforce Development Fund. Provides that, for productions commencing on or after July 1, 2022, the term "Illinois labor expenditures" includes wages paid to non-residents, subject to certain limitations. Amends the State Finance Act to create the Illinois Production Workforce Development Fund. Effective immediately.

The Senate Revenue committee is scheduled to meet next week Wednesday at 5:00

The House Revenue committee met on Thursday, No substantive action was taken on any legislation. 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 186 - West - As introduced - Amends the Illinois Income Tax Act. Creates a credit against withholding tax payments for employers with 250 or fewer full-time equivalent employees in an amount equal to a percentage of the compensation paid to qualified employees who received a raise from the employer.

As amended - Replaces everything after the enacting clause. Reinserts the provisions of the introduced bill with changes. Provides that the withholding credit created in the introduced bill may be taken against payments due for reporting periods that begin on or after January 1, 2023 and end on or before December 31, 2032 (in the introduced bill, reporting periods that begin on or after January 1, 2022 and end on or before December 31, 2030) and may be taken during the tax year in which the credit was earned (in the introduced bill, not more than 2 years after the effective date of the raise). Makes changes to the definition of "full-time equivalent employee". The Chamber supports this legislation.

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.

HB 4184 - Zalewski - 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.

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.

The House Revenue committee is scheduled to meet next Tuesday and Thursday.

The Senate Energy and Public Utilities committee met on Thursday. SB 3974 was posted for consideration by the committee. We strongly oppose this bill as do other members of the business community. In light of the opposition, the bill was not called this week. As of this morning, I don't know whether the sponsor requested and was granted an extension of yesterday's deadline for moving substantive Senate bills out of committee.

SB 3974 amends the Local Government Taxpayers' Bill of Rights Act. Provides that the statute of limitations set by a unit of local government for the determination and assessment of taxes covered by the Act may not exceed 7 years (currently, 4 years) after the end of the calendar year for which the return for the period was filed or the end of the calendar year in which the return for the period was due, whichever occurs later. Makes conforming changes concerning the tolling of this 7-year period. Amends the Illinois Municipal Code. In a Section concerning municipal audits of public utilities, provides that municipalities may request information from public utilities no more than annually (currently, no more than once every 2 years). Provides that customer specific billing, usage, or load shape data may be provided to a unit of local government if the unit of local government is requesting the information for the purposes of an audit under specified provisions of the Illinois Municipal Code. Provides that, if the public utility fails to respond in a timely manner to the request for information with complete information, the public utility shall be liable to the municipality for a penalty of $1,000 for each day it fails to produce the requested information. Provides that, if a public utility is liable for any error in past tax payments in excess of $5,000 that were unknown prior to an audit from the municipality, then the public utility shall reimburse the municipality for the cost of the audit. Amends the Public Utilities Act. Provides that the Illinois Commerce Commission shall not consider: (i) any court costs, attorney's fees, or other fees incurred under certain provisions of the Illinois Municipal Code; or (ii) any penalties or interest imposed by a municipality under certain provisions of the Illinois Municipal Code to be expenses for the purpose of determining any rate or charge. Makes other changes.

The following new tax-related legislation was introduced in the House since my last newsletter. The bills were introduced after the bill introduction deadlines in the House and Senate. Therefore, the bills will likely not move forward in their current form.

HB 5686 - Friess - Amends the Property Tax Code. Provides that no county employee or county official shall publicly disclose on an Internet website information concerning whether particular property has been granted a homestead exemption based on an individual's status as a person with a disability if the county receives a written request from the person with a disability or from that person's authorized agent or representative to refrain from disclosing that information. Provides that the information shall be removed from the Internet website within 5 business days after the request. Provides for an action in the circuit court seeking injunctive or declaratory relief to enforce the provisions of the amendatory Act.

SB 4159 - Wilcox - Amends the State Mandates Act. Provides that any State mandate regarding any subject matter enacted on or after the effective date of the amendatory Act that necessitates additional expenditures from local government revenues shall be void and unenforceable unless the General Assembly makes necessary appropriations and reimbursements to implement that mandate. Provides that the failure of the General Assembly to make necessary appropriations and reimbursements shall relieve the local government of the obligation to implement any State mandate. Makes conforming changes. 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. Provides that the extension limitation shall be: (a) the lesser of 5% or the average percentage increase in the Consumer Price Index for the immediately preceding 10 years; or (b) the rate of increase approved by the voters. Amends the Illinois Income Tax Act. Increases distributions into the Local Government Distributive Fund on and after August 1, 2022. Effective immediately.

SB 4160 - McConchie - 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. Provides that the extension limitation shall be: (a) the lesser of 5% or the average percentage increase in the Consumer Price Index for the 10 years immediately preceding the levy year for which the extension limitation is being calculated; or (b) the rate of increase approved by the voters. Effective immediately.

SB 4161 - Rezin - Amends the Illinois Income Tax Act. Provides that the additional standard exemption for taxpayers who have attained the age of 65 before the end of the taxable year and spouses of such taxpayers is $2,000 for taxable years beginning on or after January 1, 2022 (currently, $1,000). Effective immediately.

SB 4162 - Stoller - Amends the Use Tax Act, the Service Use Tax Act, the Service Occupation Tax Act, and the Retailers' Occupation Tax Act. Provides that, with respect to motor fuel and gasohol, from July 1, 2022 through July 1, 2023, the tax is imposed at the rate of 5.25%. Makes corresponding changes concerning the distribution of those proceeds. Effective immediately.

SB 4163 - Rose - Amends the Illinois Income Tax Act. Increases the credit for for residential real property taxes from 5% to 10% of real property taxes paid by the taxpayer for tax years ending on or after December 31, 2022. Effective immediately.

SB 4164 - DeWitte - Amends the Use Tax Act, the Service Use Tax Act, the Service Occupation Tax Act, and the Retailers' Occupation Tax Act. Provides that certain food, drugs, and medical appliances that were taxed at the rate of 1% shall be exempt from the taxes under those Acts. Provides that certain amounts shall be transferred from the General Revenue Fund to certain local tax funds. Effective immediately.

SB 3027 - See above Senate Revenue committee discussion

SB 3596 - Joyce - Replaces everything after the enacting clause. Amends the Use Tax Act, the Service Use Tax Act, the Service Occupation Tax Act, and the Retailers' Occupation Tax Act. Provides that 100% biodiesel and biodiesel blends with more than 10% but no more than 99% biodiesel are exempt from the taxes imposed under those Acts through June 30, 2023 (currently, December 31, 2023). Provides that 100% biodiesel and biodiesel blends with more than 19% but no more than 99% biodiesel will remain exempt on and after July 1, 2023. Effective immediately.

SB 3728 - Tracy - Makes changes to the introduced bill to provide that the tax per cigar (in the introduced bill, "cigar or other rolled tobacco product") shall not exceed $0.50 per cigar. Provides that those provisions do not apply to little cigars.

HB 4223 - Stuart - As introduced - Amends the Illinois Income Tax Act. Provides that the credit for wages paid to qualified veterans also extends to wages paid to a qualified veteran's spouse. Provides that active duty members of the United States Armed Forces are also considered "qualified veterans". Effective immediately.

HB 4278 - Kifowit - 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.

HB 4492 - McCombie - As introduced - 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.

HB 4677 - In the Property Tax Extension Limitation Law in the Property Tax Code, modifies the exclusions to the definition of "aggregate extension" by excluding special purpose extensions made for payments of principal and interest on bonds issued under specified provisions of the Metropolitan Water Reclamation District Act to make contributions to the pension fund established under Article 13 of the Illinois Pension Code (rather than made for the purpose of making contributions to the pension fund established under Article 13 of the Illinois Pension Code by use of bonds issued under specified provisions of the Metropolitan Water Reclamation District Act). Makes a conforming change. Modifies provisions in the Metropolitan Water Reclamation District Article of the Illinois Pension Code. Removes language providing that, beginning in fiscal year 2032 and each year thereafter, the District shall contribute the actuarially determined pension contribution requirements from its annual tax levy and related provisions. In provisions requiring revenues derived from the tax to be paid to the Metropolitan Water Reclamation District Retirement Fund for the benefit of the Fund, adds an exception for amounts of revenues to be retained by the District and used to pay principal and interest on bonds issued for the sole purpose of making contributions to the Fund. In the Metropolitan Water Reclamation District Act, provides that the corporate authorities are authorized to issue from time to time bonds of the district in the principal amount of an amount not to exceed $600,000,000 (rather than in the principal amount of $600,000,000) without submitting the question of issuing bonds to the voters of the District and that the bonds issued under the specified paragraph (rather than subsection) are intended to decrease the unfunded liability of the pension fund and shall not decrease the amount of the employer pension contributions.

HB 5094 - Hirschauer - As introduced - 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.

Today is a state holiday so no Illinois Register was published today. The next edition of the Illinois Register will be on Monday.

No new cases this week.

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

Two new cases were filed this week and it does not raise any unique issues. Only 9 cases have been filed with the Tribunal this year.