August 21, 2020
State and Local Tax
Illinois General Assembly
The General Assembly is adjourned until the fall veto session.
The August 21 edition of the Illinois Register did not contain any proposed or adopted rulemakings by the Illinois Department of Commerce and Economic Opportunity.
The Illinois Department of Revenue adopted permanent rules on the tax amnesty that was in effect from October 1, 2019 through November 15, 2019. You will recall that IDOR proposed emergency rules that were in effect during the amnesty period.
You might ask why the Department is adopting permanent rules for the amnesty program that concluded in November 2019. Permanent rules are necessary because there are inevitably follow up issues related to tax amnesties after the expiration of the actual amnesty period.
As discussed in my newsletter of a couple of weeks ago, the Illinois appellate court issued its opinion in Best Buy Stores v. Department of Revenue
. The case was originally issued as a non-precedential decision under Supreme Court Rule 23. On August 14, the case was issued as a precedential decision. This development is disappointing. As I discussed a couple of weeks ago, I believe this is a bad decision for reasons I won't go into again. I have been advised that Best Buy has not yet determined whether it will seek leave to appeal the decision to the Illinois Supreme Court.
On August 14 the appellate court also issued a Rule 23 decision in Pacific Sales Kitchen & Bath Centers v. Department of Revenue
. Pacific is a wholly-owned subsidiary of Best Buy. The court ruled that "[t]he circuit court did not err in finding that plaintiff's sales of certain appliances are subject to the retail occupancy tax (SIC), despite plaintiff's subsequent installation of those appliances. The Department of Revenue's imposition of the retail occupancy tax (SIC) on these sales does not violate the uniformity clause of the state constitution." The parties stipulated that the decision in the Best Buy case would determine the outcome in this case.
There was one property tax decision issued by the appellate court this week.
After a hearing, PTAB issued a decision to the parties finding that a reduction in the assessment of the property was warranted. The school district filed a petition for a direct review of the PTAB decision to the appellate court. The school district's petition was granted.
The standard of review of the PTAB decision was a point of dispute at the appellate court. The school district contended that the contentions of error should be reviewed de novo because they involve questions of law and statutory interpretation. PTAB argued for a manifest weight of the evidence standard of review.
In a footnote, the appellate court noted that none of the parties argued that the appeal involved a mixed question of law and fact requiring a clear error standard of review. The court stated "[w]e agree because the historical facts are not admitted or clearly established as to make the issue whether those facts satisfy an undisputed rule of law."
The court declined to adopt the manifest weight of the evidence standard in reviewing the PTAB decision.
The court reversed the PTAB decision, concluding the decision was based upon an improper method for applying the income capitalization approach required by Section 1-390 of the Property Tax Code to reduce the 2013 property tax assessment. The court explained that because the issue was outcome determinative, the court did not reach the alternate issue of whether PTAB's decision was arbitrary and capricious.
No new decisions were issued by the Tribunal this week.
None of the new cases raise any issues of interest. The new cases consist of protests of personal responsibility penalties imposed on persons associated with businesses that did not pay trust taxes (sales taxes or income tax withholding on employee wages) owed the Illinois Department of Revenue.
The Council on State Taxation (COST) issued an updated version of its COVID19: State and Local Guidance
document on August 19. This document tracks state and local government filing relief due to COVID-19.
Illinois Chamber of Commerce Annual Meeting
Please see the attached flier
for our annual meeting on September 24. We are doing a virtual meeting this year. I would like to give special recognition to Tax Institute accounting firm member FGMK who is a Bronze level sponsor.
We have a great speaker lineup - Tim Crane, President of Wintrust Financial Corporation, Tom Ricketts, Chair of the (soon to be 2020 World Champions) Chicago Cubs, and Charles Evans, the President and CEO of the Federal Reserve Bank of Chicago.