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.

The Department issued a series of informational bulletins over the past two weeks:

FY 2021-05 - explains changes to the taxation of auctioneers that resulted from the Leveling the Playing Field for Illinois Retail Act. As a result, of the changes in law, auctioneers will generally be considered marketplace facilitators beginning January 1, 2021 and will be subject to the requirements imposed on marketplace facilitators.

FY 2021-06 - outlines the changes to the taxation of certain winery shipper's license holders required by the Leveling the Playing Field for Illinois Retail Act and the impact of those changes to the taxation of wine sales to Illinois purchasers.

FY 2021-08 - describes the municipal and county cannabis retailers' occupation tax rate changes effective January 1, 2021.

FY 2021-09 - is a summary of sales tax rate changes to aviation fuel mandated by P.A. 101-604. This legislation conformed Illinois law to federal mandates on the taxation of aviation fuel.

FY 2021 - 10 - explains the the decrease in the prepaid wireless E911 surcharge rate for locations inside the City of Chicago on sales of prepaid wireless telecommunications service from 9% to 7%.

FY 2021-11 - is a summary of sales tax rate changes effective January 1, 2021

FY 2021-12 - announces that subscriptions to the Illinois State Tax Lien Registry are now available.

As I noted in the last newsletter, the Governor's office has advised that the current year budget is $3.9 billion out of balance. The Governor has announced that the State will borrow an additional $2 billion from the Federal Reserve's Municipal Liquidity Facility. This borrowing is authorized by legislation passed this spring - P.A. 101-630, the "Coronavirus Urgent Remediation Emergency Borrowing Act" or the "CURE Borrowing Act."

According to a Statement by the Comptroller, the borrowed funds will be used to pay medical bills subject to federal matching funds and to avoid late payment interest penalties. The Compbroller stated that the use of federal matching funds will "turn the $2 billion in borrowing into $3 billion" of state payments.

The borrowed funds must be paid back over a three-year period.

Cook County adopted their annual budget. No tax increases were included in the new budget. The Civic Federation recently released an excellent analysis of the budget

The City of Chicago adopted its budget for the year beginning January 1. The budget include a property tax increase, a $.03 increase in the motor vehicle fuel tax and an increase in the personal property lease transaction tax on cloud-based products from 7.25% to 9% (the rate on all other transactions subject to the personal property lease transaction tax. The Civic Federation released an excellent analysis of the proposed City of Chicago Budget.

The November 30 edition of the Illinois Register contains no adopted rulemakings by the Department of Revenue or any proposed or adopted rulemakings by the Illinois Department of Commerce and Economic Opportunity.

The Department of Revenue proposed one new rulemaking amending the income tax rules to add new rules for income tax credit authorized by last year's data center legislation. The Department describes the rulemaking as follows:

"The proposed rule implements the new Section 229 of the Illinois Income Tax Act [35 ILCS 5/229] as created and amended by PA 101-31 and 101-604. For tax years beginning on or after January 1, 2019, taxpayers may claim a credit if they have been awarded a credit certification by the Illinois Department of Commerce and Economic Opportunity under 20 ILCS 605/605-1025(b). The amount of the credit is equal to 20% of the wages paid during the taxable year to a full-time or part-time employee of a construction contractor employed by a certified data center if those wages are paid for the construction of a new data center in a geographic area that meets certain socio-economic criteria."

I don't have any questions or comments about the rulemaking based on my review of the proposed rules. Please let me know if you have any questions or comments about the rulemaking.

The December 4 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.

Edward Sims Jr. Trust v. Henry County Board of Review. The trust filed a property tax appeal with the Illinois Property Tax Appeal Board ("PTAB") seeking a reduction in the 2012 assessed value of farm property owned by the Trust, in particular the Trust challenged the valuation of one of the farm buildings. PTAB denied the trust's request for a reduction. The Trust appealed. The circuit court affirmed the PTAB ruling and the appellate court upheld PTAB's decision.

No new decisions were issued by the Tribunal this week.

One new case may be of Interest. CSX Transportation, Inc. v. Illinois Department of Revenue is a protest of income tax assessment. According to the petition, the Department made an estimated adjustment to the petitioner's taxable income even through the petitioner complied with the Department's audit and provided responses to all information requests made by the Department. The petitioner challenges the Department's adjustment of petitioner's addition modifications regarding addback of intangible expenses paid to an affiliated company. According to the petition the Department adjusted the numerator of the sales factor and recharacterized certain intercompany revenues as intrastate, rather than interstate, which resulted in allocating 100% of the income to Illinois. The protest also challenges the Department's inclusion of receipts from intercompany transactions. The petition also challenges the sufficiency of the Department's notice of deficiency because the Department did not supply a basis for the deficiency in regard to its adjustment of the petitioner's sales factor.

CSX is represented by Breen Schiller of Tax Institute member law firm Eversheds Sutherland LLP.

The Illinois General Assembly's Commission on Government Forecasting and Accountability issued its Monthly Briefing for the Month Ended November 2020.

The next meeting of the Tax Institute will be held via webcast on Tuesday December 8 from 10:00 until noon. We will discuss the results of the fall veto session, the impact of the election on Illinois and federal taxes, City of Chicago and Cook County taxes, and discuss the Tax Institute's legislative initiatives for the 2021 spring Illinois legislative session.

As usual, the meeting will qualify for CLE and CPE.

Here is a link to the Tax Institute legislative

package for 2020. Please let me know your

thoughts on re-introducing these proposals, as well as your suggestions for additional legislative proposals to be considered at our December 8 meeting.

Email me at kstaats@ilchamber.org to register.