Executive Director
Tax Institute

(217) 522-5512 ext. 231

All Key Chamber Legislation

Upcoming Events

November 18:
Tax Institute Quarterly meeting 2:00 - 4:00 at the Chamber offices at 300 S. Wacker.  Featured speakers are Justin Heather and Brad Tietz of the DCEO to discuss the new data center exemption and economic development issues and Cate Battin of McDermott Will & Emery to give a Chicago and Cook County update.  RSVP to
November 15, 2019
State and Local Tax  
This Week 

Illinois General Assembly
The second, and final, week of the veto session was held from Tuesday November 12 through Thursday November 15.

The House and Senate will return to Springfield for the beginning of the spring legislative session on January 28.

Senate President John Cullerton announced his retirement from the Senate in January.  The jockying for the position of Senate President will likely be intense.

At the end of the House session yesterday, in an unusual move, which was interesting political theater, Representative Wehrli (R-Naperville) challenged the adjournment motion adjourning the House until January 28.  He stated that there was much work left for the General Assembly, especially in the area of ethics reform, and requested, per the House rules, a record vote on the adjournment motion, rather than the usual voice vote.  

After consultation with the House Parliamentarian, the request for a recorded vote was granted, but the Parliamentarian also ruled a majority of the members voting on the adjournment motion was only required, not a majority of the members of the House.  The motion to adjourn passed on a vote of 53 in favor with a lesser number of no votes. The no votes consisted of the Republican members of the House.  

By ruling that a vote of the majority of those voting, rather than requiring a vote of the majority of the House members, allowed the Democrats to avoid having their members in potentially contested districts vote in favor of adjournment for 2 1/2 months.  A record vote in favor of adjournment would have given opponents of representatives in contested districts a campaign issue. 

Legislation that passed both Houses:

SB 119 - Creates the Second FY2020 Budget Implementation Act and provides that the purpose of the Act is to make additional changes to State programs that are necessary to implement the enacted State budget for FY2020.

As I predicted last week,  SB 119  surfaced to deal with the problems associated with the sales and use tax legislation enacted during the spring session as portions of  SB 689 (P.A. 101-0009)  and  SB 690 (P.A. 101-0031) . SB 119 doesn't fix the problems with the sales tax legislation enacted in the spring. While it does not fix the sales tax legislation it did address some other issues from the spring session that needed to be addressed.

SB 119 contains the initiative of the Department of Commerce and Economic Opportunity  to amend the data center legislation.  This is the same language I reported on in each of the last two newsletters that was contained in an amendment to SB 1608. As you will recall the amendment to SB 1608 was filed two weeks ago and then subsequently "unfiled."  The Chamber was supportive of these technical "fixes" to the data center legislation.  This legislation was included in SB 119 rather than in stand-alone legislation in order to make it more difficult to challenge the sales tax portions of SB 119.

SB 119 also contains changes by the Illinois Department of Revenue to address technical concerns related to administration of the sales tax changes in SB 690 and to delay the effective date of the portion of the changes in SB 690.  The Department's changes did not address the constitutional infirmities associated with the changes contained in SB 690. Among other things, the Department's changes added back some Use Tax nexus language - all of the nexus provisions were eliminated from the Use Tax in SB 690.  The Department added back Use Tax nexus language so that if (when in my estimation) the "Level the Playing Field" changes championed by the Illinois Retail Merchants Association and the Illinois Municipal League are declared unconstitutional, the Department will at least be able to collect Use Tax on sales covered by the "Level the Playing Field" provisions.

Additional language proposed by The Retail Merchants Association and the Illinois Municipal League to modify the so-called "Level the Playing Field" portion of SB 690 also surfaced as a portion of SB 119. Contrary to the assertions of the sponsor of the legislation, these changes do not "level the playing field" between bricks and mortar sellers, nor do the changes address, or correct, the substantial constitutional flaws in the legislation.  Indeed, it is arguable that it is perhaps more flawed.  

The good news about the  "level the playing field" portion of the SB 119 is that it does not become effective until January 1, 2021.

I'll share my detailed analysis of this legislation next week.

HB 3902 - This bill was introduced on November 14 and passed both Houses during the veto session with only one no vote in the House and unanimously in the Senate.  The bill was passed over the opposition of the Illinois Department of Revenue and a threat by the Governor to veto the legislation.

HB 3902 amends the Use Tax Act, the Service Use Tax Act, the Service Occupation Tax Act, and the Retailers' Occupation Tax Act and provides that the exemption for materials, parts, equipment, components, and furnishings incorporated into or upon an aircraft applies through December 31, 2024 (in the introduced bill, the exemption applies permanently). The bill provides that no claim for credit or refund is allowed for taxes paid as a result of the disallowance of the exemption on or after January 1, 2015 and prior to the effective date of the amendatory Act. The bill is effective immediately.

HB 961 - Amends the Property Tax Code and provides that, in a county with 3,000,000 or more inhabitants, for taxable years 2019 through 2023 (currently, 2020 through 2024), a taxpayer who has been granted a senior citizens homestead exemption need not reapply. Effective immediately.

SB 1042 - Amends the Tax Increment Allocation Redevelopment Act of the Illinois Municipal Code. Creates a tax increment allocation financing extension for an ordinance adopted on January 1, 1996 by the City of Savanna. Effective immediately.

Legislation of interest that didn't move during veto session:

The Cook County Assessor's legislation,  SB 1379, which would require owners and many tenants of "income producing property" to submit financial data to the Asssessor remains in the Rules committee in House.  The Illinois Chamber of Commerce is strongly opposed to this legislation. The Assessor will continue his efforts to pass this legislation in the spring.

The Senate Revenue  committee met on Wednesday.  The Senate Revenue committee held a subject matter hearing on SB 119 in anticipation of the bill being passed by the House. 

The Senate Revenue committee also considered the following bills and passed them to the floor:

HB 961 - See above

HB 3902 - See above

HB 3426 - Amends the Tax Increment Allocation Redevelopment Act of the Illinois Municipal Code. Creates a tax increment allocation financing extension for an ordinance adopted on December 7, 1998 by the City of Quincy for the Central Business District West Tax Increment Redevelopment Project Area,

SB 1042 -See above

The House Revenue committee met on Tuesday and Wednesday.
On Tuesday, the committee held a subject matter hearing on  SB 1043. The bill a mends the Property Tax Extension Limitation Law in the Property Tax Code. Provides that a taxing district's aggregate extension base shall be adjusted whenever an assessment increase or decrease due to the issuance of a certificate of error, a decision of the board of review, or a decision of the Property Tax Appeal Board results in the overextension or underextension of taxes for the last preceding levy year.

On Wednesday, the House Revenue committee considered and passed SB 119.  See above for a description of this bill.

New legislation

No new tax-related legislation this week.

Property Tax Reform Task Force

The Task Force has missed the deadline for the issuance of their preliminary report.

I am attending an early breakfast meeting this morning so I have to send out the newsletter before publication of the November 15 edition of the Illinois Register.  I'll report on any new rulemakings next week.

Court cases
No new cases this week.

Tax Tribunal 
No new decisions were posted this week.  

None of the new cases filed with the Tribunal raise any novel issues.

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