March 22, 2019
State and Local Tax
Illinois General Assembly
The House and Senate were in session this week Tuesday through Thursday. The Senate was scheduled to be in session today, Friday, but cancelled the Friday session.
Today is the Senate deadline for moving substantive legislation out of committee. As a result, a number of bills remaining in committee will be referred back to the Assignments committee and in theory will be dead. Sponsors of a number of bills that did not make it out of committee by the deadline will request extensions of the deadline. By next week's newsletter, I will know what bills were extended and remain alive in the Senate.
The House is in session next week Tuesday through Friday. The Senate is in session next week Tuesday through Thursday. Next Friday is the House deadline for moving substantive legislation out of committee.
The Senate Revenue committee has scheduled a hearing on Wednesday afternoon. Here is a link to the bills that have been so far posted for next week. As noted below, the Chamber's Data Center exemption bill has been posted for committee consideration.
The House Revenue committee will meet next week likely on Thursday morning, but as of this morning the official notice has not yet been issued. The committee is scheduled to hold a subject matter hearing on sports gambling legislation proposals that are contained in four amendments filed to HB 3308. The committee will likely also take votes on other legislation, but as of this morning we don't know which legislation will be considered by the committee.
The Senate Revenue committee met on Wednesday. Here is a
to the bills considered by the committee this week. Nothing controversial was considered by the Senate Revenue committee this week.
the so-called "waters edge" bill was not considered by the committee this week.
The House Revenue committee held a hearing on Thursday. Here is a
to the bills considered by the committee this week.
At the Thursday hearing, the House Revenue committee held a subject matter hearing on everything ranging from local sourcing of sales taxes to satellite television taxes.
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. Senator Sims is requesting an extension of the committee consideration deadline.
- (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. Senator Sims is requesting an extension of the committee consideration deadline.The has been posted for the Senate Revenue committee next week on March 21.
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
Replaces everything after the enacting clause. Amends the Property Tax Code. Provides that, in a county with more than 800,000 inhabitants but fewer than 1,000,000 inhabitants, if a lessee is liable for the payment of property taxes extended against property that is owned by a taxing district, the county treasurer shall promptly notify the taxing district that owns the property if the property taxes are delinquent 60 days after the second installment due date. Provides that the State's Attorney of the county in which the property is located may bring an action against the lessee in the circuit court to recover the full amount of delinquent taxes, interest, penalties, and costs.
SB 1043 - (DeWitte) Replaces everything after the enacting clause. Amends 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. Effective immediately.
HB 2484 - (Severin) - Replaces everything after the enacting clause. Amends the Property Tax Code. Provides that the effective date of a pollution control facility certificate shall be the date of recommendation by the Illinois Environmental Protection Agency to the Illinois Pollution Control Board for the certificate or the date of the construction of the facility, whichever is later. Provides that qualifying water treatment facility shall be certified by the Department of Revenue (currently, the Department of Natural Resources). Provides that tentative and final equalization factors shall be published on the Department of Revenue's official website.
HB 3590 - (Yingling) - In a Section concerning withholding of tax from payments from pari-mutuel wagering and riverboat gambling winnings, provides that withholding is required only if withholding is required with respect to those payments under the provisions of the Internal Revenue Code.
HB 3619 - (Costello) - Further amends the Use Tax Act, the Service Use Tax Act, the Service Occupation Tax Act, and the Retailers' Occupation Tax Act. Provides that, on and after July 1, 2019, the taxes imposed on sales of gasohol shall be imposed on 90% (currently, 100%) of the proceeds of sales. Provides that the bill takes effect on July 1, 2019.
The March 22 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. In fact, today's Illinois Register did not contain any new rulemakings by any state agency. It appears that the Pritzker administration may have place a moratorium on new rulemaking as they become more familiar with activities of the various state agencies. This isn't unprecedented with a new administration.
The Illinois Supreme Court released its opinion in
The City of Chicago v. The City of Kankakee
, The City of Chicago and other municipalities brought an action against Kankakee and certain other municipalities seeking to recover tax purportedly owed to them under the Use Tax Act. The circuit court of Cook County dismissed plaintiffs' claims and denied leave to file a fourth amended complaint. The appellate court reversed the circuit court. The Supreme court reversed the appellate court and affirmed the judgment of the circuit court.
No new decisions were posted this week.
Two new cases filed this week may be of interest:
Brian K. and Shelley G. Turner v. Department of Revenue
is a protest of an income tax claim denial. The petitioners, residents of Washington state, sought a refund of a "make-whole" bonus payment. The payment was intended to replace certain previously awarded by unvested Company A stock-based compensation which the petitioner would forfeit his rights to by accepting a position at Company B.
Petitioner was paid the "make-whole bonus" in his first paycheck with Company B. Upon commencing employment with Company B, petitioner commuted to Company B's offices in Illinois by flying from Washington to Illinois on Monday morning and returning to Washington at the end of the workweek.
Petitioner had Illinois income taxes withheld on his compensation. Petitioner did not attempt to claim a refund for the taxes paid on his compensation. The refund claim was for the taxes paid on the "make-whole bonus."
Petitioner's position is that the "make-whole bonus" is not compensation paid in Illinois and, therefore, not subject to Illinois income taxation because the income was not related to any activity engaged in by petitioner in Illinois.
The Turners are represented by David Kupiec of Tax Institute member law firm Kupiec & Martin.