April 8: General Assembly spring session scheduled adjournment.
April 20 - Webinar - Introduction to Illinois sales taxes and an Illinois update. 2 hours of Illinois CPE and CLE submitted for approval. Free to Tax Institute members. Register at this link
April 8, 2022
State and Local Tax
This Week
Illinois General Assembly
The House and Senate returned to Springfield on Monday and are scheduled to be in session in Springfield through today's scheduled adjournment..
As of this morning, the Governor, Senate President and Speaker of the House have announced an agreement on the budget for the next fiscal year and have outlined the tax provisions, but we have not yet seen the legislative language. I'll send out a special edition of the newsletter later this evening, or early Saturday morning, when the legislation is finalized. Here is a description of the tax-related provisions as announced in the press yesterday afternoon:
Suspend the 1% tax on groceries, (The RTA and Metro-east transportation taxes would remain in place.)
Freeze the motor fuel tax for six months, (The scheduled 2.2 cents per gallon would not go into effect on July 1.)
Provide an additional one-time property tax credit against the income tax, This additional credit would be equal to the amount of the property tax credit claimed on 2021 Illinois income tax returns up to a maximum of $300.
Expand the earned income credit to 20% of the federal earned income credit and expand eligibility, to workers who have ITINs and not social security numbers, workers between the ages of 18 and 24, and workers over age 65,
Provide one-time income tax refunds of $100 per dependent child - up to 3 children, and $50 per individual, and
A sales tax holiday in August for the purchase of school supplies.
The House Revenue committee first met this week on Wednesday. The committee gaveled in and out without considering any legislation.
The House Revenue committee next met on Thursday. The committee passed one bill to the floor:
SB 1975 - As introduced - Amends the Property Tax Code. Provides that the chief county assessment officer in a county of more than 3,000,000 residents, and in any other county where the county board has authorized such action by ordinance or resolution, may automatically renew the homestead exemption for persons with disabilities without application for any person who applied for the exemption and presented a Disability Identification Card stating that the claimant is under a Class 2 disability.
As amended by committee amendment 3 - Replaces everything after the enacting clause. Amends the Property Tax Extension Limitation Law in the Property Tax Code. Provides that, for levy years 2022 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. Provides that the maximum reduction under the General Homestead Exemption is $10,000 in counties with 3,000,000 or more inhabitants and counties that are contiguous to a county of 3,000,000 or more inhabitants and $6,000 in all other counties (currently, $10,000 in counties with 3,000,000 or more inhabitants and $6,000 in all other counties). Provides that the maximum reduction under the senior citizens homestead exemption is $8,000 in counties with 3,000,000 or more inhabitants and counties that are contiguous to a county of 3,000,000 or more inhabitants and $5,000 in all other counties (currently, $8,000 in counties with 3,000,000 or more inhabitants and $5,000 in all other counties). In provisions concerning the homestead exemption for veterans with disabilities, makes changes concerning the surviving spouse. Provides that the interest rate under the Senior Citizens Real Estate Tax Deferral Act is reduced from 6% to 4%. Amends the School Code. Contains provisions concerning interfund transfers and disclosure of cash reserve balances. Amends the Department of Revenue Law of the Civil Administrative Code of Illinois to require the Department of Revenue to conduct a study concerning the homestead exemption for veterans with disabilities. Effective immediately.
The Senate Revenue committee met on Tuesday.
The following bills were voted out of committee to the floor:
HB 448 - As proposed - 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.
As amended in the House - Replaces everything after the enacting clause. Reinserts the provisions of the introduced bill with formatting changes. Makes the following substantive changes. Provides that the provisions apply only to: (1) certain school districts; (2) park districts; (3) library districts; and (4) community college districts. Provides that the taxing district must certify to the county clerk that the taxing district did not extend the maximum amount permitted under the Property Tax Extension Limitation Law for a particular levy year. Provides that the aggregate extension for a taxing district that utilizes the recapture provisions of the introduced bill may not exceed the taxing district's last preceding aggregate extension by more than 5% unless the increase is approved by the voters. Effective immediately.
As amended in the Senate - Provides that the taxing district's certification to the county clerk that it did not extend the maximum amount permitted under the Property Tax Extension Limitation Law must be submitted not more than 60 days after the taxing district files its levy ordinance or resolution with the county clerk (rather than not more than 30 days after the taxing district's budget and levy ordinance is adopted for the levy year).
HB 4326 - passed both chambers - see below for details.
HB 4452 - passed both chambers - see below for details.
SB 3626 - The bill was back in front of the committee on motions to concur with House amendments 1 and 2. The committee voted unanimously to recommend that the Senate concur in the House amendments. As introduced - Amends the Solid Waste Site Operator Certification Law. Creates a Solid Waste Site Operator Certification. Removes provisions concerning Class "A" and Class "B" Solid Waste Site Operator Certification. Provides that the Environmental Protection Agency is authorized to approve the use of examinations conducted by third parties. Provides that the Agency shall maintain on its website information regarding the examinations. Provides that at the time of certificate renewal, the applicant shall certify the completion of 30 hours of continuing education covering the operation of landfills during the preceding 3 years. Provides that the fee for the issuance or renewal of a Solid Waste Site Operator Certificate shall be $1,000. Provides that if the fee for renewal is not paid within the grace period, the fee for renewal shall be increased by $100 (rather than $50). Makes other changes.
As amended in the Senate - Replaces everything after the enacting clause with the provisions of the introduced bill and makes the following changes. Provides that a landfill site that accepts non-hazardous solid waste shall have a Solid Waste Site Operator Certification (rather than a Class A or a Class B Solid Waste Site Operator Certification). Provides that a landfill site which accepts special waste shall have a Solid Waste Site Operator certified by the Environmental Protection Agency. Provides that solid waste site operators shall be certified based on level of competency determined by examination and in accordance with educational and experience level as follows: (1) graduation from high school or equivalent and not less than 2 years (rather than 6 months) of acceptable study, training, and responsible experience in sanitary landfill operation or management, or not less than 7 (rather than 3) years of acceptable study training and responsible experience in operation or management of earth moving equipment; or (2) grammar school completion or equivalent and not less than 15 (rather than 5) years of acceptable study, training, and responsible experience in sanitary landfill operation or management. Provides that at the time of certificate renewal the applicant shall certify the completion of 15 (rather than 30) hours of continuing education covering the operation of landfills during the preceding 3 years. Provides that continuing education used to satisfy continuing education requirements must be approved by the Agency and must cover the design, operation, and maintenance of sanitary landfills, and for certificates that include a special waste endorsement, continuing education must cover the operation of landfills relative to the acceptance and disposal of special wastes. Provides that the fee for a Solid Waste Site Operator Certificate shall be $400 (rather than $1,000) and provides that the fee for an issuance or renewal for special waste endorsements shall be $100.
As amended in the House - Amendment 1 - Replaces everything after the enacting clause with the provisions of the engrossed bill, and makes the following changes: Amends the Illinois Oil and Gas Act. Defines "temporary abandonment status". Provides that before engaging in the business of removing liquid oil field waste from an on-site collection point, the person shall apply for a permit with a fee of $150 (instead of $100). Provides that each application to transport oil field waste shall be accompanied by a biennial permit fee of $150 (instead of $100) for each vehicle sought to be licensed. Provides the requirements for application for temporary abandonment status. Provides the requirements for a permittee to conduct a fluid level test upon the fluid in the well bore. Provides the fees that the Department of Natural Resources shall assess for each well in temporary abandonment status. Provides that each application for a permit to drill, deepen, convert, or amend shall be accompanied by a fee of $400 (rather than a fee not to exceed $300). Provides that the fee for an application for a permit to oil lease road shall be $150. Provides that the fees per well to be paid by the new owner for each transfer of well ownership shall be $75 for the first 100 wells and $50 for each subsequent well in excess of 100. Provides that the Department shall assess and collect annual well fees from each permittee in the amount of $100 (instead of $75) per well for the first 100 wells and a $75 fee (instead of $50) for each well in excess of 100 for which a permit is required under the Act.
House amendment 2 - Replaces everything after the enacting clause with the provisions of the engrossed bill, and makes the following changes: Amends the Illinois Oil and Gas Act. Defines "temporary abandonment status". Provides that before engaging in the business of removing liquid oil field waste from an on-site collection point, the person shall apply for a permit with a fee of $150 (instead of $100). Provides that each application to transport oil field waste shall be accompanied by a biennial permit fee of $150 (instead of $100) for each vehicle sought to be licensed. Provides that the Department of Natural Resources shall assess and collect annual fees of $100 per well for each well in temporary abandonment status. Provides that each application for a permit to drill, deepen, convert, or amend shall be accompanied by a fee of $400 (rather than a fee not to exceed $300). Provides that the fee for an application for a permit to oil lease road shall be $150. Provides that the fees per well to be paid by the new owner for each transfer of well ownership shall be $75 for the first 100 wells and $50 for each subsequent well in excess of 100. Provides that the Department shall assess and collect annual well fees from each permittee in the amount of $100 (instead of $75) per well for the first 100 wells and a $75 fee (instead of $50) for each well in excess of 100 for which a permit is required under the Act.
The Senate Revenue committee met again on Thursday. The committee unanimously voted HB 4132 out of committee to the floor. As of this morning, the bill is on 3rd reading in the Senate. This bill amends the Parking excise tax to create an exemption for parking at the state fairs. The bill was amended as follows in the Senate:
"Replaces everything after the enacting clause. Reinserts the provisions of the engrossed bill with the following changes. Provides that the Parking Excise Tax does not apply to: (1) a parking area or garage operated by the State, a State university, or a unit of local government; (2) the purchase of a parking space by the State, a State university, or a unit of local government for use by employees of the State, State university, or unit of local government; (3) a parking space leased to a governmental entity for use by the public; or (4) a parking area or garage owned and operated by a person engaged in the business of renting real estate and used by the lessee to park motor vehicles, recreational vehicles, or self-propelled vehicles for the lessee's own use. Effective immediately."
The Senate Executive committee met on Thursday. Among the bills voted out of committee was SB 3097. The bill is in the Senate on a motion for concurrence with the House amendment.
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 in the House - Replaces everything after the enacting clause. Amends the Property Tax Code. In provisions concerning the scavenger sale, repeals provisions added by Public Act 102-528 that require the county clerk to mail notice of the expiration of the period of redemption within 30 days from the date of the filing of addresses with the clerk. Requires the purchaser of the certificate of purchase to prepare the notice of the expiration of the period of redemption and deliver it to the clerk of the Circuit Court not more than 6 months and not less than 111 days prior to the expiration of the period of redemption. Requires the clerk to mail the notices not less than 3 months prior to the expiration of the period of redemption. Effective immediately.
Tax-related bills that passed both chambers:
HB 4326 - 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 in the House - 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 4452 - As amended in the House - Replaces everything after the enacting clause. Amends the Community Mental Health Act. Changes the form of the proposition regarding an annual tax for providing mental health facilities and services. Effective immediately.
As amended in the Senate - Provides that the amendatory Act takes effect on July 1, 2022 (rather than immediately).
HB 5532 - 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 3685 - As amended in the House - Replaces everything after the enacting clause. Reinserts the provisions of the engrossed bill. Adds provisions amending 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). Adds provisions amending 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. Effective January 1, 2023, except that provisions amending the Motor Fuel Tax Law take effect upon becoming law.
SB 3832 - 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 the bill has an immediate effective date.
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.
As amended - Removes provisions from the introduced bill providing that the owner may provide proof of either a deed restriction or participation in a government program that includes certain legally enforceable affordability requirements. Provides that the bill is effective immediately.
Rulemaking
The April 8 edition of the Illinois Register did not contain any proposed or adopted rulemakings by the Department of Revenue.
Today's Illinois Register contains one adopted rulemaking by the Department of Commerce and Economic Opportunity. The Department described the rulemaking as follows:
"The proposed rules implement the federal Low Income Household Water Assistance Program and is authorized by the American Rescue Plan Act of 2021 (PL 117-2) and the Consolidated Appropriations Act of 2021 (PL 116- 260). The proposed rules provide the administrative framework required for the Department to provide timely assistance to those who are risk for loss of water and\or wastewater services during the COVID-19 pandemic which would pose a threat to the health and safety of the public."
Court cases
No new tax related decisions this week.
Tax Tribunal
No new decisions have been posted by the Tribunal this week. None of the new cases raise unique issues.
April 25- Tax Institute Quarterly meeting
2:00 - 4:00 pm.
We are planning a hybrid meeting with an in person option at our Chicago offices at 70 W. Madison, 2nd Floor conference center, Chicago, and a webcast for those who don't wish to attend in person. I'll present a legislative wrap up - the General Assembly is scheduled to adjourn on April.
Special Guest - Roger Koss - Head of the IDOR Audit Bureau who will give an update and answer questions
