Illinois General Assembly
The House and Senate are in session Monday through today, Friday. Today is scheduled to be the last day of the spring legislative session.
The details of the final budget package have not yet emerged as of this morning. The details of any final agreement on a capital bill have also not been released. There will be a number of tax-related components of the budget implementation bill and a capital bill.
I'll send out a special newsletter with the details either late tonight or tomorrow.
Gaming expansion is still pending. We are watching
. As of this morning, no actual language has been filed.
SJRCA 0001 - has now passed both Houses of the General Assembly and will be on the ballot in November 2020. Article XIV of the Illinois Constitution provides in pertinent part "[a] proposed amendment shall become effective as the amendment provides if approved by either three-fifths of those voting on the question or a majority of those voting in the election." We continue to oppose the constitutional amendment.
SB 687 - the legislation that imposes graduated income tax rates effective January 2021, if the the constitutional amendment authorizing graduated rates is approved by the voters passed the Senate and passed the House with an amendment that deals with distributions of a percentage of the proceeds of the income tax to local governments. As of this morning SB 687 is back in the Senate for concurrence with the House amendment.
SB 39 - This bill was the subject of a "gut and replace" amendment in House. As amended it amends the State Finance Act. Creates the Illinois Property Tax Relief Fund. Provides that moneys in the Illinois Property Tax Relief Fund shall be used to pay rebates to residential property taxpayers in the State. Provides that the Fund may accept moneys from any lawful source. Provides that the State Comptroller shall calculate a property tax rebate amount for the applicable property tax year by dividing the total amount appropriated from the Illinois Property Tax Relief Fund by the total number of homestead exemptions granted for homestead property in the State. Provides that the property tax bills of non-delinquent taxpayers who received a general homestead exemption under the Property Tax Code shall be reduced by the property tax rebate amount.
As of this morning, SB 39 is back in the Senate for concurrence with the House amendment. The bill as amended was discussed in a subject matter hearing in the Senate Revenue committee last night.
This bill is designed to provide political cover for legislators who voted in favor of SB 687. The legislators will be able to say that they did not just vote for an income tax increase, they also voted for property tax relief. However, no funding has been identified for the property tax relief that is the ostensible purpose of the legislation. Any funding mechanism for this bill is to be one of the topics of discussion resulting from SB 1932.
SB 1932 - This bill was also the subject of a "gut and replace" amendment in the House. As amended it amends the Property Tax Code to create the Property Tax Relief Task Force.
The bill provides that the Task Force shall identify the causes of increasingly burdensome property taxes across Illinois, review best practices in public policy strategies that create short-term and long-term property tax relief for homeowners, and make recommendations to assist in the development of short-term and long-term administrative, electoral, and legislative changes needed to create short-term and long-term property tax relief for homeowners. Provides for the membership of the Task Force. Provides that the Task Force shall submit its initial report to the Governor and the General Assembly within 90 days of the effective date of this amendatory Act, and provides that the Task Force shall submit its final report to the Governor and the General Assembly by December 31, 2019. Repeals these provisions December 31, 2020.
As of this morning, SB 1932 is on third reading in the House and will have to go back to the Senate for concurrence. The bill, as amended, was discussed in a subject matter hearing before the Senate Revenue committee last night. As a result, the bill could go directly to the Senate floor once it passes the House without another committee hearing being held.
- (Davis) - The Assessor's legislation to seek information from property owners with "income producing properties" remained in the House Rules committee and did not move forward. Along with other members of the business community we negotiated with the Assessor's office to try to improve what was deeply flawed legislation.
We were successful in convincing the House not to move forward with the legislation because it remains flawed, even as amended in the course of our extensive negotiations with the Assessor. After being informed that SB 1379 would not move forward during the spring session, in a fit of pique, the Assessor released a press release.
Despite the Assessor's rather petulant response to SB 1379 not being voted on in the House, the Illinois Chamber remains ready to work with the sponsor of SB 1379 and the Assessor's office to address this issue and the broader and more fundamental issues involving the property tax system in Cook County.
- The recreational cannabis legalization bill passed the Senate. The cannabis legalization language was the subject of a "gut and replace" amendment in the Senate. The original version of the bill dealt with pawnbrokers and stolen property.
The bill, as amended by the Senate, was heard in the Judiciary - Criminal committee on Thursday night. The committee voted, on a partisan vote, to recommend that the full House concur with the Senate amendment. The bill is now positioned to be voted on by the full House today.
House Revenue committee
The House Revenue committee has met 4 times so far this week - Monday, Tuesday, Wednesday, and Thursday. Here is a link to the details of the committee hearings.
- This bill was subject to a "gut and replace" amendment that turned the bill into a shell bill which was heard in House Revenue committee this week. As of this morning remains on second reading in the House as a shell bill.
As SB 689 passed the Senate the the bill am
ends the Illinois Estate and Generation-Skipping Transfer Tax Act. Provides that no tax shall be imposed under the Act for persons dying on or after January 1, 2021 or for transfers made on or after January 1, 2021. Effective January 1, 2021, but only if an amendment to the Illinois Constitution permitting the taxation of income at a graduated rate is adopted prior to that date by the voters if Illinois.
SB 690 - The bill was the subject of a "gut and replace" amendment that turned the bill into a shell bill which was heard in the House Revenue committee this week. As of this morning, the bill remains on second reading in the House as a shell bill.
As SB 690 passed the Senate, it amends the Property Tax Extension Limitation Law in the Property Tax Code. Provides that, beginning in levy year 2022, for taxing districts that are school districts (other than qualified school districts), "extension limitation" means 0% or the rate of increase approved by the voters (currently, (a) the lesser of 5% or the percentage increase in the Consumer Price Index during the 12-month calendar year preceding the levy year or (b) the rate of increase approved by voters). Provides that the term "qualified school district" means a school district that certifies to the county clerk that the district: (i) submitted a claim or claims to the Illinois State Board of Education for reimbursement of certain State mandated categoricals for the school fiscal year immediately preceding the levy year and received reimbursement for those State mandated categoricals that was less than 97% of the district's claims; or (ii) did not receive the minimum funding required for that school district under the evidence-based funding formula. Amends the School Code. Requires the State Board of Education to certify to each school district whether or not the school district is eligible for designation as a qualified school district. Effective January 1, 2021, but does not take effect at all unless Senate Joint Resolution Constitutional Amendment No. 1 of the 101st General Assembly is approved by the voters of the State prior to that date.
Senate Revenue committee
The Senate Revenue committee met twice yesterday and once on Wednesday. Here is a link to committee actions this week.
Tax-related legislation passed both Houses
SB 527 -
Amends the Property Tax Code. Provides that the amount paid to the Will County Treasurer from the Tax Recovery Fund to compensate taxing districts for the loss of revenue on real property in Will County that is owned by the State of Illinois for the purpose of developing an airport shall be based on the amount of taxes that would have been extended for the current tax year for the exempt parcel if the parcel had been owned by a person whose property is not exempt (currently, the amount of leasehold taxes extended for the 2002 property tax year). Amends the State Finance Act to provide that compensation from the Tax Recovery Fund shall continue through December 31, 2030 (currently, December 31, 2020).
Amends the Illinois Income Tax Act. Makes changes concerning the calculation of base income for an organization that is exempt from the federal income tax by reason of the Internal Revenue Code.
SB 1456 - As the bill passed the Senate it amends the Property Tax Code. Provides that certain leasehold property that is used for an airport, for parking, or for waste disposal or processing and is used for a non-exempt purpose is subject to taxation as a leasehold for the period of time during which it is used for that non-exempt purpose. Provides that the use of a portion of that property for a non-exempt purpose shall have no effect on (i) the exemption of the remaining portion of the property that continues to be used for an exempt purpose or (ii) the future exemption of that same portion of the property if it ceases to be used for a non-exempt purpose and returned to use for an exempt purpose
SB 1456 was amended in the House to provide that the provisions of the engrossed bill apply only to property located in a municipality with a population of more than 500,000 inhabitants that is not subject to taxation due to its use for the purpose of parking. Makes conforming changes to the statutory base.
Amends the Illinois Income Tax Act. Provides that, for purposes of being liable for income tax, compensation is paid in this State if some of the individual's service is performed within this State, the individual's service performed within this State is nonincidental to the individual's service performed without this State, and the individual's service is performed within this State for more than 30 working days during the tax year. Defines terms. Contains provisions concerning the calculation of compensation paid in this State if the employer maintains a time and attendance system.
The Chamber's Data Center initiative. The bill was amended and the Data Center exemption language was replaced.
As amended and passed by the General Assembly the bill amends the Illinois Income Tax Act. Provides that the research and development credit applies for taxable years ending prior to January 1, 2027 (currently, January 1, 2022). Creates an income tax credit for qualified education expenses incurred by an employer on behalf of a qualifying apprentice, subject to certain limitations.
SB 1595 - Amends the Film Production Services Tax Credit Act of 2008. Provides that a taxpayer may not take a credit awarded under that Act for tax years beginning on or after January 1, 2027.
HB 250 - As the bill passed the House, the bill amends the Property Tax Code and the Mobile Home Local Services Tax Enforcement Act. Provides that a county with fewer than 3,000,000 inhabitants may, by joint agreement, combine its tax sale with the tax sale of one or more other contiguous counties. Provides that a joint tax sale shall be held at a location in one of the participating counties.
HB 250 was amended in the Senate to amend the Property Tax Code to provide that, if property contains a hazardous substance, hazardous waste, or an underground storage tank, the court may order the holder of the certificate of purchase to assign the certificate to the county collector upon request of the county collector. Provides that the county collector may further assign the certificate to the county, acting as trustee for taxing districts, or to a taxing district having an interest in the taxes sold. In a Section that allows a tax purchase be set aside as a sale in error if a county, city, village, or incorporated town has an interest in the property under the police and welfare power by advancements made from public funds, provides that such a sale in error may not be granted if the lien has been released, satisfied, discharged, or waived.