The House and Senate cancelled the session days scheduled for this week.

The House and Senate also cancelled the session days scheduled for next week. The Senate is scheduled to return to Springfield on February 1. The House hasn't posted a return date on the General Assembly website. Both chambers continue to hold remote committee hearings, although over the past two weeks many of the scheduled committee hearings have ended up being cancelled.

The House Revenue committee scheduled a hearing for Thursday, but cancelled the hearing on Wednesday. The Senate Revenue committee did not meet this week. As of this morning, the House Revenue committee hasn't scheduled a hearing for next week. So far, the Senate hasn't scheduled any committee hearings for next week, although I suspect we may see some Senate hearings scheduled later today.

The House Cities and Villages subcommittee has scheduled a subject matter hearing on January 26 on the topic of "Amazon Fulfillment Center Sales Tax Revenue." My suspicion is that the hearing has been triggered at the request of a municipality that is home to a fulfillment center. As you know, under the "Leveling the Playing Field" legislation, shifted sourcing of local sales taxes to destination-based sourcing in many instances effective January 1, 2021. I suspect that municipalities that are home to Amazon fulfillment centers are not receiving the amount of locally-imposed sales taxes that they thought they would receive because of the destination-based sourcing

The deadline for submitting bill drafting requests for Senate introduction was last Friday. Today is the deadline for bill drafting requests for House introduction.

New tax-related legislation was introduced since my last newsletter:

HB 4583 - Buckner - Amends the Municipal Motor Fuel Tax Law in the Illinois Municipal Code. Provides that, for purposes of the Law, a municipality is "in a county with a population of over 3,000,000 inhabitants" if any portion of the territory of the municipality is located in such a county. Provides that, notwithstanding any provision of the Law to the contrary, a municipality whose territory lies partially in a county with a population of over 3,000,000 inhabitants and partially outside such a county may, in the alternative, impose the tax authorized under the Law in only that portion of the municipality that lies in a county with a population of over 3,000,000 inhabitants. Effective immediately.

HB 4596 - Ramirez - Creates the Build Illinois Homes Tax Credit Act. Provides that owners of qualified low-income housing developments are eligible for credits against the taxes imposed by the Illinois Income Tax Act or taxes, penalties, fees, charges, and payments imposed by the Illinois Insurance Code. Amends the Illinois Income Tax Act and the Illinois Insurance Code to make conforming changes. Effective immediately.

HB 4607 - Evans - Amends the Retailers' Occupation Tax Act. Provides that, if a person who is licensed as a retailer of alcoholic liquor under the Liquor Control Act of 1934 has had the renewal of his or her certificate of registration denied or has had his or her certificate of registration revoked, the Department shall file a notice with the Liquor Control Commission that includes a certification attesting that the person's certificate of registration renewal has been denied after notice and an opportunity to be heard. Amends the Liquor Control Act of 1934. Provides that the Liquor Control Commission shall deactivate the license of any licensee authorized to sell alcoholic liquor at retail if that person's certificate of registration renewal has been denied by the Department of Revenue or revoked. Effective January 1, 2023. This bill is a Department of Revenue initiative.

HB 4615 - Carroll - Creates the Carryout Bag Fee Act. Provides that a carryout bag fee of $0.10 is imposed on each carryout bag used by a customer at retail establishments with specified amounts allocated to specified entities and State funds. Repeals the new Act on January 1, 2026. Contains other provisions. Amends the State Finance Act making conforming changes. Amends the Counties Code and Illinois Municipal Code. Provides that a county or municipality may not ban, place a fee or tax on, or regulate in any other manner the use, disposition, content, taxation, or sale of carryout bags. Amends the Illinois Procurement Code. Prohibits the procurement and use of single-use plastic disposable foodware at State parks, natural areas, colleges and universities, and the Illinois State Fair. Amends the Environmental Protection Act. Provides that on and after January 1, 2023, no restaurant or retail establishment may distribute a plastic carryout bag. Amends the Illinois Food, Drug and Cosmetic Act. Provides that a full service restaurant or quick service restaurant shall not provide single-use plastic disposable foodware items to a consumer ordering or purchasing dine-in food unless requested by the consumer. Contains other requirements and provides civil penalties for any violations.

HB 4634 - Butler - 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.

HB 4659 - Stuart - Amends the Illinois Income Tax Act. Creates an income tax deduction for any amounts paid by the taxpayer's employer on behalf of the taxpayer as part of an educational assistance program. Creates an income tax deduction for any amounts paid by the taxpayer on behalf of an employee of the taxpayer as part of an educational assistance program. Provides that the deductions are limited to the first $5,250 of such assistance so furnished to any individual. Effective immediately.

HB 4673 - Didech - Amends the State Finance Act. Provides that beginning in property tax year 2021 (currently, State fiscal year 2021), each county clerk shall annually certify to the Department of Revenue the total number of general homestead exemptions granted for homestead property within 30 days after the date when the collector's books are completed. Provides that by March 1 of each year, the Department of Revenue shall calculate and submit to the State Comptroller a property tax rebate amount for the applicable property tax year for the purpose of making rebates by the total number of homestead exemptions granted for homestead property in the State for the most recent tax year's available data as submitted by the county clerk. Provides further requirements concerning homestead property tax rebate eligibility and disbursement of funds. Provides exemptions concerning payments from the Property Tax Relief Fund. Modifies defined terms.

HB 4693 - Wheeler - Amends the Illinois Administrative Procedure Act. Defines the term "invalidated" for purposes of provisions concerning expenses and attorney's fees. Effective immediately. This isn't a tax bill, but it will be of interest to anyone who challenges the validity of an administrative rule of the Illinois Department of Revenue or any other state agency. Representative Keith Wheeler is one of the two co-Chairmen of the Joint Committee on Administrative Rules.

SB 3204 - Bryant - Amends the Property Tax Code. Repeals provisions concerning levy adjustments for certificates of error, court orders, and final administrative decisions of the Property Tax Appeal Board. Provides that a taxing district may adopt a levy to recapture revenue lost due to refunds issued pursuant to a decision of the Property Tax Appeal Board, an assessment or exemption decision of the Department of Revenue, a court order, or an administrative decision of a local assessment official. Provides that those recapture levies are not included in the taxing district's aggregate extension base under the Property Tax Extension Limitation Law. Amends the School Code to make conforming changes. Effective immediately.

SB 3420 - Murphy - Amends the Property Tax Code. In provisions concerning delinquencies by lessees of property owned by a taxing district, provides that such a delinquency occurs 60 days after the final (currently, second) installment due date. Provides that those provisions apply in all counties (currently, in counties with more than 800,000 but fewer than 1,000,000 inhabitants). Effective immediately.

SB 3421 - Murphy - Amends the Property Tax Code. Provides that railroad property shall be assessed based on the location of the property (rather than as a unit).

SB 3452 - Stadelman - 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.

SB 3453 - DeWitte - 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. This bill is an Illinois Chamber Tax Institute initiative.

SB 3454 - Fowler - Amends the Film Production Services Tax Credit Act of 2008. Provides that, for an accredited production beginning on or after July 1, 2022, the credit includes 5% of the Illinois labor expenditures generated by the employment of residents of the State who reside outside of the metropolitan area. Provides that, for an accredited production beginning on or after July 1, 2022, the credit amount shall be increased by 5% if 50% or more of the total hours of principal filming or taping of the production are completed in the State but outside of the metropolitan area. Provides that the term "metropolitan area" means the City of Chicago and any part of the State located within 30 miles of the City of Chicago. Effective immediately.

SB 3455 - Stewart - Amends the Illinois Income Tax Act. Makes changes concerning the federal depreciation deduction to restore provisions that were in effect prior to Public Act 102-16. Effective immediately. This is an Illinois Chamber Tax Institute initiative. We will suggest an amendment to Senator Stewart that will completely recouple with federal depreciation treatment.

SB 3456 -- Stewart - Amends the Illinois Income Tax Act. Removes a provision for taxable years ending on or after December 31, 2021 and prior to December 31, 2024 limiting the net loss carryover deduction to $100,000. Effective immediately. This is an Illinois Chamber Tax Institute initiative.

SB 3457 - Stewart - Amends the Illinois Income Tax Act. Creates an income tax credit in an amount equal to 1% of the expenses claimed by the taxpayer as a federal income tax deduction pursuant to Section 179 of the Internal Revenue Code for the tax year. Provides that the taxpayer may sell, assign, or transfer the credit. Provides that the maximum aggregate amount of credits awarded for those purposes may not exceed $45,000,000 in any calendar year. Amends the Uniform Penalty and Interest Act to provide that, if the amount of the credit is reduced because the claims for credit exceed the maximum aggregate amount of the credit, then no underpayment penalty or interest shall accrue on the additional tax so long as the additional tax is paid within 60 days after the notice of reduction. Effective immediately. This is an Illinois Chamber Tax Institute initiative.

SB 3458 - Turner - Amends the Municipal Cannabis Retailers' Occupation Tax Law in the Illinois Municipal Code. Provides that an elected official of a municipality that receives revenues pursuant to the Law may request from the Department of Revenue the total amount of deposits received by the municipality each calendar year, notwithstanding any other provision of law. Effective immediately.

SB 3464 - Martwick - Amends the Cook County Forest Preserve District Act. Provides that all general taxes levied by the board of any forest preserve district shall be levied by general categories annually (currently, by March 28 annually) for all fiscal years in the same manner as taxes are levied for city and village purposes. Effective immediately.

SB 3477 - Murphy - Creates the Vacancy Fraud Act. Allows a taxing body or representative of a taxing body to file a vacancy fraud complaint with the county board of review if property is receiving vacancy relief and the property owner is not actively attempting to lease, sell, or alter the property. Sets forth factors in determining whether or not vacancy fraud has occurred. Sets forth penalties. Effective immediately.

SB 3483 - Bennett - 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.

SB 3486 - Morrison - Amends the Illinois Income Tax Act. Provides for a credit against withholding taxes in an amount equal to the wages or salary paid by a private employer to an Illinois employee while the employee is on organ donation leave if the employer grants all of its employees the option of taking a paid leave of absence of at least 30 days for the purpose of serving as an organ donor or bone marrow donor. Provides that the credit may not exceed $1,000 for each employee who takes organ donation leave. Provides that such a leave of absence must be taken without loss of pay, vacation time, compensatory time, personal days, or sick time for at least the first 30 days of the leave of absence. Provides that the credit applies for reporting periods beginning on or after January 1, 2022. Effective immediately.

SB 3489 - Hastings - Amends the Illinois Income Tax Act. Creates an income tax credit for taxpayers who are employed as law enforcement officers in an amount equal to 100% of the unreimbursed expenses paid by the taxpayer during the taxable year for: (1) professional certifications required for the performance of the taxpayer's duties as a law enforcement officer; (2) equipment used by the taxpayer in the performance of his or her duties as a law enforcement officer; and (3) mental health training. Effective immediately.

SB 3596 - Joyce - Creates the Illinois Renewable Fuel Standards Act. Provides that diesel fuel must contain at least a stated percentage of biodiesel fuel oil by volume on and after a specified date. Amends the Use Tax Act, the Service Use Tax Act, the Service Occupation Tax Act, and the Retailers' Occupation Tax Act. Makes changes concerning incentives for biodiesel to provide that the incentive for 100% biodiesel and biodiesel blends with more than 10% but no more than 99% biodiesel applies through June 30, 2024 (currently, December 31, 2023). Provides that, with respect to 100% biodiesel and biodiesel blends with more than 19% but no more than 99% biodiesel, the tax does not apply to proceeds of sales made on or after July 1, 2024. Effective immediately, except that provisions creating the Illinois Renewable Fuel Standards Act take effect on July 1, 2022.

SB 3611 - Cappel - Amends the Illinois Income Tax Act. Creates an income tax deduction for any amounts paid by the taxpayer's employer on behalf of the taxpayer as part of an educational assistance program. Creates an income tax deduction for any amounts paid by the taxpayer on behalf of an employee of the taxpayer as part of an educational assistance program. Provides that the deductions are limited to the first $5,250 of such assistance so furnished to any individual. Effective immediately.

SB 3618 - Munoz - Amends the Invest in Kids Act. Provides that students who are eligible to attend a qualifying pre-kindergarten school are also considered eligible students under the Act. Provides that the credit shall be equal to 100% (currently, 75%) of the total amount of qualified contributions made by the taxpayer during a taxable year. Removes a limitation that contributions may not be directed to a particular subset of schools, a particular school, a particular group of students, or a particular student. Provides that applications for scholarships for eligible students who received a scholarship from a scholarship granting organization during the previous school year shall be considered for re-application for the current school year and shall be considered received on the first day that the scholarship granting organization begins granting scholarships. Provides that the Act applies on a permanent basis. Effective immediately.

SB 3619 - DeWitte - Amends the Tobacco Products Tax Act of 1995. Provides that the Department of Revenue shall discharge any surety and shall release and return any bond provided to it by a taxpayer in connection with a distributor's license 90 days after: (1) that taxpayer becomes a prior continuous compliance taxpayer; or (2) that taxpayer has ceased to collect receipts on which he is required to remit tax to the Department, has filed a final tax return, and has paid to the Department an amount sufficient to discharge his remaining tax liability as determined by the Department. Defines "prior continuous compliance taxpayer". Effective January 1, 2023. This is an Illinois Department of Revenue initiative. We support this bill.

SB 3627 - Connor - Amends the Property Tax Code. Creates valuation procedures for eligible energy storage systems. Provides that an "eligible energy storage system" means commercially available technology that is capable of absorbing energy and storing a capacity of up to 2 megawatts for use at a later time, including, but not limited to, electrochemical, thermal, and electromechanical technologies. Effective immediately.

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 3638 - McConchie - Amends the Illinois Income Tax Act. Creates an income tax credit for an individual taxpayer who is a medical professional in a community-based practice who serves without compensation as a preceptor for at least one student from a qualifying institution in Illinois and provides clinical instruction for students from a non-Illinois based program for compensation in the same tax year. Provides that the credit shall be $200 per qualifying student per week, but not to exceed $9,600 per taxpayer in any tax year.

The Department announced that the 2022 Illinois tax filing season begins on January 24.

The January 21 edition of the Illinois Register did not contain any adopted rulemakings by the Illinois Department of Revenue or new or adopted rulemakings by the Department of Commerce and Economic Opportunity.

The DCEO rules for data centers were scheduled for consideration by the Illinois General Assembly's Joint Committee on Administrative Rules this week. I have been advised that committee consideration of the rules was delayed until next month's JCAR meeting. In my experience, rulemakings scheduled for consideration by JCAR are delayed ordinarily when JCAR staff discovers a problem with the rulemaking and the agency is given an alternative of either JCAR objecting, and perhaps blocking, the rule or suggesting that the agency work with the staff to attempt to work through the staff issues in lieu of a JCAR objection and/or filing prohibition. I'll let you know what I find out about the rulemaking.

The Department of Revenue proposed amendments to the Invest In Kids tax credit rules. The Department described the amendments as follows:

"This rulemaking implements the changes made by P.A. 102-0016. P.A. 102-0016 adds technical academies that operate or will operate jointly administered CTE programs to the types of schools that may receive scholarships from scholarship granting organizations on behalf of qualified students attending technical academies. The rule also strikes the reference to Illinois Appellate courts in Section 1000.Appendix A."

No new tax-related cases this week.

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

One new case may be of interest. TCRG SN4057 v. Department of Revnue is a protest of an assessment of tax on the purchase of a corporate jet. This case illustrates the lengths the Department's audit division will go to in attempts to tax corporate aircraft.