March 15, 2019
State and Local Tax
Illinois General Assembly
The House and Senate were in session this week Tuesday through Thursday.
The House is in session next week Tuesday through Thursday. The Senate is in session next week Tuesday through Friday.
The Senate Revenue committee has scheduled a hearing on Wednesday morning. Here is a link to the bills that have been so far posted for next week.
The only controversial item scheduled so far for the Senate Revenue committee is SB 1115 sponsored by Senator Steans. As discussed previously, we are strongly opposed to this legislation which would make worldwide combination the default filing position under the Illinois Income Tax Act.
The Chamber continues to lead the opposition to SB 1115, and to the identical House bill, HB 2085. Along with the folks at COST, I drafted the linked opposition document. Please let me know if your organization would like to be listed as an opponent. Also, if you share our opposition, please feel free to share this document with members of the Illinois General Assembly and let them know of your opposition.
The House Revenue committee will meet next week on Thursday morning. The committee is scheduled to hold a subject matter hearing on "local sales taxes and motor fuel tax." At this point, I don't have the details of the exact nature of the subject matter hearing. I'll let you know when I obtain additional details.
The Senate Revenue committee met on Wednesday. Here is a
to the bills considered by the committee this week.
The House Revenue committee held a hearing on Thursday. Three bills were considered by the committee this week:
The House Revenue committee held a subject matter hearing on the Cook County Assessor's proposal to request data related to "income producing property." We oppose both the Senate and House versions of the legislation as currently constituted.
Prior to the hearing, Carol Portman of the Taxpayers' Federation and I provided a written detailed analysis of the flaws in the legislation and suggestions for changes prepared by a mutual member to Chairman Zalewski and other members of the committee. Along with Illinois Manufacturers' Association and the Illinois Retail Merchants Association, we also provided recommendations for changes to the legislation to the House sponsor.
After testimony by the Assessor, there was testimony regarding the problems with the Assessor's legislation including testimony on behalf of Illinois Chamber member, Growmark, by Carl Tebbe the general manager of a farmer cooperative named Gateway FS Inc.
Absent significant and substantial changes to the legislation, we will continue to oppose both HB 2217 and the identical Senate bill.
The Illinois Chamber Tax Institute continues in its efforts to reform the Illinois False Claims Act. SB 1564, sponsored by Senator McConchie is before the Senate Judiciary committee. Earlier this week, Senator McConchie scheduled a meeting with the Chairman of the Judiciary committee, Senator Mulroe to discuss this important legislation. Along with Rob Carr of the Illinois Retail Merchants Association, I discussed the need for legislation to reform the False Claims Act to eliminate the the ability of private attorneys to bring tax cases under the False Claims Act in circuit court. It was a productive meeting.
A representative of the Illinois Attorney General's Office was also present at the meeting. The Attorney General's office has not yet taken a position on this legislation. Here is a link to a list of members of the Senate Judiciary committee. To the extent you share our concerns about the need for reform of the False Claims Act, it would be helpful for you to reach out to the members of the committee.
Other legislative issues:
This week, the Chamber met with the sponsor of
(Mussman). This proposal would require any private business that contracts with the state for information-technology services over $500,000 to install tracking software on every computer that works on a state project. Contractors with the state would pay a per employee fee to the software tracking company for spyware to record every user's keystroke, mouse click, browsing history, program usage and time spent on a computer. Usernames, passwords, confidential and proprietary personal and company information would be captured by the third party. The Chamber is opposed to this legislation as government contracting process already has thorough accountability and oversight. In addition, this proposal would create a cybersecurity nightmare. Any business to contracts with the state should take a close look at this legislation.
Updates on Chamber Tax Institute legislation
SB 1349 - (Weaver) - Amends the Uniform Penalty and Interest Act - The bill bill is in the House and is sponsored by Representative Walker.
- (Sims) Enterprise Zones - assigned to the Senate Commerce and Economic Development committee, Consideration postponed this week. It has been posted for consideration next week.
- (Wheeler) - Amends the False Claims Act to correct abuses allowed under current law - assigned to House Executive committee, The bill remains assigned to House Executive committee.
- (Weaver) -
Amends the False Claims Act to correct abuses allowed under current law - assigned to Senate Judiciary committee. The bill remains assigned to Judiciary committee.
- (Sims) - Creates sales and use tax and electricity excise tax exemptions for data centers - assigned to Senate Revenue committee. The bill was postponed from consideration and remains before the committee.
SB 1656 - (Weaver) - Amends the Illinois Income Tax Act to reinstate and extend the sunset date of the personal property tax replacement income tax - assigned to Senate Revenue committee. The bill was postponed from consideration and remains before the committee.
Notable Amendments to tax legislation this week
- Tom Cullerton -
Extends the repeal of provisions regarding a municipal hotel operators' and hotel use tax in DuPage County from January 1, 2021 to January 1, 2023.
SB 1595 - Sims - Further amends the Film Production Services Tax Credit Act of 2008. Provides that the term "Illinois production spending" includes the compensation, not to exceed $1,000,000 per employee, for up to 4 contractual or salaried employees who perform services with respect to an accredited production. Provides that those employees are not required to be residents of the State. Provides that, for productions commencing on or after July 1, 2019, Illinois labor expenditures are limited to: (i) the first $200,000 of wages paid or incurred to each out-of-State employee of the production, whether paid or incurred by the production company or by a loan out corporation, subject to withholding payments, and (ii) 100% of the wages paid or incurred to each employee of the production who is a resident of the State, whether paid or incurred by the production company or by a loan out corporation. Provides that talk shows, other than talk shows that are produced for local or regional markets, and reality competition productions may be considered accredited productions.
HB 872 - Greenwood et al. - The original bill: Amends the Property Tax Code. With respect to the Senior Citizens Assessment Freeze Homestead Exemption, provides that, beginning in assessment year 2019, the taxpayer's household income shall be reduced by any amounts paid as Medicare premiums. The amendment: Provides that the provisions of the introduced bill are effective beginning in taxable year 2020 (in the introduced bill, 2019).
HB 2579 - Zalewski - Deletes everything in the original bill. Amends IITA Section 205 to provide that unrelated business taxable income in the case of a charitable organization does not include amounts included in federal adjusted gross income as a result of the application of Section 512(a)(7) of the Internal Revenue Code.
HB 2735 -
Replaces everything after the enacting clause. Reinserts the provisions of the introduced bill with changes. Further amends the Small Business Job Creation Tax Credit Act. Provides that the second set of incentive periods begins on July 1, 2019 (instead of July 1, 2018). Provides that, if the new employee is a returning citizen, then the credit may not exceed $3,500 (currently, $2,500). Provides that the term "returning citizen" means an individual who (i) is a resident of Illinois, (ii) was formerly incarcerated in a federal, State, or local correctional institution, and (iii) is a new employee. Provides that the aggregate amount of credits that may be awarded under the Act is (i) $50,000,000 for new employees other than returning citizens and (ii) $5,000,000 for returning citizens. Adds provisions concerning recapture of the credit if the employee is terminated by the taxpayer within one year after the credit is awarded. Effective immediately.
The March 15 edition of the Illinois
did not contain any new or adopted rulemakings by the Illinois Department of Revenue or the Illinois Department of Commerce and Economic Opportunity.
No new court cases this week.
No new decisions were posted this week.
None of the new cases filed this week raise unique issues. .