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August 2, 2019
State and Local Tax
This Week
Illinois General Assembly
The House and Senate have adjourned until the fall veto session. The first day of the veto session is scheduled for October 28.
Today, my continuing review of tax-related legislation passed by the General Assembly during the spring session focuses on
SB 1591.
This bill is scheduled to be signed by the Governor today.
As originally introduced and as it passed the Senate, SB 1591 was the Chamber's Data Center initiative. In the House, the bill was amended and the Data Center exemption language was replaced. The Chamber's Data Center initiative ended up in SB 690.
As amended and passed by the General Assembly, SB 1591 amends the Illinois Income Tax Act and provides that the research and development credit applies for taxable years ending prior to January 1, 2027 (currently, January 1, 2022).
The bill also creates an income tax credit for qualified education expenses incurred by an employer on behalf of a qualifying apprentice, subject to certain limitations. Eligibility for the credit will be administered by the Department of Commerce and Economic Opportunity. DCEO will certify applicants for the credit and issue tax credit certificates to employers.
For taxable years beginning on or after January 1, 2020, and beginning on or before January 1, 2025, the employer of one or more qualifying apprentices shall be allowed a credit against the tax imposed by subsections (a) and (b) of Section 201 of the Illinois Income Tax Act for qualified education expenses incurred on behalf of a qualifying apprentice. The credit shall be equal to 100% of the qualified education expenses, but in no event may the total credit amount awarded to a single taxpayer in a single taxable year exceed $3,500 per qualifying apprentice.
A taxpayer will receive an additional $1,500 income tax credit if (i) the qualifying apprentice resides in an "underserved area" as that term is defined in the EDGE Credit Act during the school year for which a credit is sought by an employer or (ii) the employer's principal place of business is located in an underserved area.
Rulemaking
The August 2 edition of the Illinois Register
did not contain any new rulemakings by the Illinois Department of Revenue or the Department of Commerce and Economic Opportunity or any state agency. There were no adopted rulemakings by the IDOR or DCEO.
It is interesting that virtually all rulemaking by state agencies under the Governor seems to have ground to a halt in recent weeks. However, given the volume of tax-related legislation passed during the spring legislation session there will likely be a flood of rulemaking by the Department of Revenue and the Department of Commerce and Economic Opportunity.
Court cases
Petitioner, Beor Fund 1, LLC, moved pursuant to two separate sections of the Illinois Property Tax Code (Code) (35 ILCS 200/22-50, 22-35 (West 2018)) for the court to declare its, petitioner's, tax-sale purchase of the subject property to be a sale in error such that petitioner is entitled to a refund. Respondent, the Lake County Collector, argued against the requested relief. The trial court declined to grant a sale in error and refund. Petitioner appealed, arguing again that it is entitled to relief.
The appellate court affirmed the decision of the trial court noting the unusual posture of the case. The court explained that the petitioner sought a sale in error under Section 22-50 and refund based on its own alleged noncompliance with the Property Tax Code, ". . . without ever having petitioned for, or been denied, what is presumably its ultimate goal of obtaining and recording a tax deed and title to the property." The court explained that this posture precludes relief under section 22-50.
The court also indicated that "petitioner seeks a section 22-35 sale in error based on the municipality's alleged lien on the property, but petitioner fails to point to proof of a recorded lien, notice to the municipality, or evidence that the municipality sought to enforce the priority of its alleged lien such that petitioner would be entitled to void the sale and receive a refund. " These shortcomings in the record and in the brief preclude us from considering a reversal of the trial court's denial of section 22-35 relief and compel us to find the issue forfeited."
Tax Tribunal
No new decisions were posted this week. None of the new cases filed with the Tribunal raises unique issues.
Publications
The Illinois General Assembly Commission on Government Forecasting and Accountability issue the FY 2020 State Budget Summary. This 200+ report goes into the details of the state budget. By law, the summary report includes information pertaining to the major categories of appropriations, issues the General Assembly faced in allocating appropriations, comparisons of appropriations from previous State fiscal years and other information related to the current State of Illinois Budget.
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