July 19, 2019
State and Local Tax
Illinois General Assembly
The House and Senate have adjourned until the fall veto session. The first day of the veto session is scheduled for October 28.
The Senate Executive committee subcommittee on special issues held a subject matter hearing in Chicago yesterday. A subject matter hearing on SB 2259.
The bill amends the Property Tax Code and provides for property tax incentives for newly-constructed or rehabilitated rental property if the owner of the residential real property commits that, for a period of 10 years, at least 20% of the multifamily building's units will have rents that are at or below maximum rents and are occupied by households with household incomes at or below maximum income limits.
The second quarterly meeting of the Tax Institute was held on Monday. Illinois Department of Revenue Director David Harris was the featured speaker.
Director Harris discussed the extensive amount of tax legislation enacted during the spring session. The Director advised that the Department of Revenue was not consulted on the final language of a number of proposals and as a result there a number of technical problems with the enacted legislation that will need to be addressed during the veto session.
The Director highlighted problems with the legislation authorizing municipal motor fuel taxes which, rather than imposing the tax at the retail level would impose the tax at the wholesale level. He noted that this would make it easy to engage in tax planning to work around the new taxes as well as make it very difficult for wholesalers to determine the proper rate of taxes to impose.
The Director also highlighted problems with the sales tax legislation enacted in SB 689 and 690. (As you know, I've discussed the problems with this legislation in prior newsletters.)
The July 19 edition of the Illinois Register
did not contain any new rulemakings by the Illinois Department of Revenue or the Department of Commerce and Economic Opportunity or any state agency. There were no adopted rulemakings by the IDOR or DCEO.
No tax-related cases this week
No new decisions were posted this week. None of the new cases filed with the Tribunal raise unique or noteworthy issues.
The Illinois Department of Revenue issued a
regarding instructions for Line 3 of form IL-1120. The Department explains that it became aware that the Line 3 instructions for the IL-1120 were incorrect for corporations who have the same tax-exempt interest from a Regulated Investment Corporation on both U.S. Form 1120, Schedule M-1, Line 7 and Illinois Schedule K-1-P, Partner's or Shareholder's Share of Income, Deductions, Credits, and Recapture, Line 32.
The Department advises that the corrected instruction for these taxpayers is to report the RIC tax-exempt interest from the Illinois K-1-P, Line 32, on the Illinois Form IL-1120, Line 7 (Not on both Line 3 and Line 7). These taxpayers should not report the "passed-through" RIC tax-exempt interest on Line 3.