Executive Director
Tax Institute

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All Key Chamber Legislation

Upcoming Events

September 26:  
Please join us for the Illinois Chamber of Commerce Annual Luncheon at the Palmer House Hilton in Chicago.   Register here

October 1:
Sales Tax Webinar:  "Illinois 2019 Sales Tax Legislation:  The Good, the Bad and the Ugly."  Join Keith Staats as he presents this one hour webinar that qualifies for Illinois CLE and CPE.  As a benefit of membership, each member of the Tax Institute receives two free registrations. Registration information is at this  Link.  Contact Kirsten Constant at for your free registration. 

October 28:
Illinois General Assembly returns to Springfield for the first day of the fall veto session.

November 12:
Illinois General Assembly returns to Springfield for the second week of the fall veto session.
September 13, 2019
State and Local Tax  
This Week 

Illinois General Assembly
The House and Senate have adjourned until the fall veto session.  The first week of the veto session is scheduled to begin on October 28.  The second, and final, week of the veto session is scheduled to begin on November 12.

Franchise Tax Amnesty Program
The Secretary of State has posted  Form C353 the petition form for the Franchise Tax Amnesty.  The Secretary of State's office is finalizing an Illinois Franchise Tax Franchise Information Sheet.

I spoke with Derek White of the Secretary of State's office and obtained some additional details about how they plan to implement the amnesty.

Derek advised that everyone is eligible for the amnesty program. He indicated that they will construe the statute as providing eligibility for the amnesty to both domestic and foreign for-profit corporations.

In response to my question about how they plan to address situations where a taxpayer is required to file amendments for periods ending on or before 3/15/08, he advised that all penalties and interest will be eliminated for periods ending on or before 3/15/18.  He gave the following example:

A Corporation had an increase in paid in capital that occurred 20 years ago.  He explained that the Corporation can file under the amnesty, calculate the amount of tax due, pay only the additional tax and the annual tax due for the most recent 7 years, and will not be subject to any interest or penalties for any of the periods.

He contrasted this situation with the situation of a corporation who has to file to reinstate.  In this latter situation, the corporation will have to file all of the unpaid reports and pay the tax for each reporting period.  In this situation, no interest or penalties will be due, but all taxes for the periods for which no report was filed will have to be paid.

Derek also emphasized, as does the form linked above that the filing period for the amnesty petition is October 1, 2019, until the close of business November 15, 2019.  If the amnesty petition is not correctly dated and completed properly - for example it is dated prior to October 1, 2019 or after November 15, 2019 it will be rejected.

Property Tax Reform Task Force
As I noted last week, the Property Tax Relief Task Force established a number of subcommittees.  Some of the subcommittees have scheduled hearings.  Here is a  link to the Task Force webpage, which contains some limited information about previous and upcoming hearings.

This afternoon, the subcommittee on Assessments and Exemptions is scheduled to meet at 2:30.  I am advised that the subcommittee is chaired by Representative Will Davis.  I plan to attend this hearing.  

The subcommittee is scheduled to hear a presentation from the Cook County Assessor's office.  I suspect one of the topics of the Assessor's presentation will be  SB 1379, the Assessor's legislation that would require extensive information reporting by owners, and some tenants, of income-producing property.  As you will recall, the Illinois Chamber and many other business organizations strongly oppose this legislation.  The legislation passed the Senate in the spring session, but did not move forward in the House.  The Assessor has signaled that he will attempt to get the House through the House during the fall veto session.

The September 13 edition of the Illinois Register did not contain any proposed rulemakings by the Illinois Department of Revenue or any proposed or adopted rulemakings by the Illinois Department of Commerce and Economic Opportunity.

The Illinois Register contained one adopted rulemaking by the Illinois Department of Revenue.  The Department adopted an amendment to the Income Tax rules.  The Department's description of the rulemaking is as follows: 

"Section 100.3600(b) was amended to clarify the computation of the combined apportionment factor for unitary business groups with members using different apportionment methods.  Section 100.9700(d) was amended to provide guidance on the effective date of the repeal of the prohibition against combination when the members of a unitary business group use different taxable years.  All other differences between the proposal and the final version are cosmetic and grammatical and changes to the manner of citing the Internal Revenue Code." 

Court cases
No new decisions.   

Tax Tribunal 
Two decisions were posted this week.  

Martin Equipment of Illinois v. Illinois Department of Revenue is a sales tax case.  According to the decision "[d]uring the tax period in issue, Martin purchased construction equipment from Deere that Martin either sold at retail or included in its inventory of leasable equipment.  The invoice price that Deere charged Martin was known as the Moline Dealer Price.  Aff. of Delene Bain at ¶ 7.  But the Moline Dealer Price was not the final price that Martin paid Deere.  Rather, once the equipment was either sold or placed in Martin's inventory of leasable equipment, the Moline Dealer Price was reduced by credits provided by Deere."

At issue was whether the credits should reduce the selling price subject to tax. Judge Barov ruled in favor of the taxpayer, granting the taxpayer's motion for summary judgment. 

Zimmer US, Inc. v. Department of Revenue is a challenge to a notice of claim denial issued by the Department.  According to the petition, "According to the notice, the Department denied the claim because it determined that Zimmer was liable for use tax on specialized instruments provided by Zimmer to Illinois nonprofit healthcare institutions, including hospitals, that are required during the installation process of certain prosthetic devices sold by Zimmer to those institutions.  Consequently, the Department rejected Zimmer's refund claim for the tax periods and amount above for use tax previously paid by Zimmer on those specialized instruments. "

Judge Conway ruled in favor of the Department and granted the Department's motion for summary judgment.

One of the new cases filed at the Tribunal may be of interest.

CSX Transportation , Inc. v. Department of Revenue is a challenge to income tax notices of deficiency.  "Upon audit, the Department forced a cross-group elimination of intercompany transactions that occurred between members of CSX' s two separate Illinois unitary business groups; adjusted the numerator of BOCT's Illinois sales factor; and reduced Petitioner's Veterans Jobs Credit."  

The protest challenges the Departement's changes to the apportionment factors.  The protest also challenges the sufficiency of the notices of deficiency pointing out that the Department did not supply a basis for it's adjustment of the taxpayer's sales factor.  In fact that the notice of deficiency states that the Department "adjusted the factor to include receipts, other than receipts from the sales of tangible personal property, for which the majority of the income-producing activities were
performed in Illinois," and cites to 35 ILCS §5/304(a)(3)(c) and 86 Ill. Admin. Code
§100.3370(c)(3) for the authority for this adjustment." As pointed out in the petition "35 ILCS §5/304(a)(3)(c) is inapplicable as it addresses the sourcing of sales
that occur in taxable years ending before December 31, 2008."  The tax years at issue in this case are 2014 and 2015.

CSX is represented by Breen Schiller and David Machemer of Tax Institute member law firm Horwood Marcus & Berk

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