Illinois General Assembly

The House and Senate were not in session this week. 

The House and Senate were scheduled to return to Springfield on March 18 through Friday March 20.  Next week's legislative session has been cancelled.  It is unclear at this point when the legislature will return to Springfield.

The House

The House Revenue committee met on Wednesday.  No substantive action was taken on legislation at the hearing.  The committee  conducted subject matter hearings on affordable housing tax credits, prompt payment, the earned income tax credit, and online ticket resale taxes.

Illinois Department of Revenue

I attended a meeting of the IDOR Director's Advisory Group on Tuesday. Here is a link to the agenda and the handouts from the meeting.

Also on Tuesday, along with representatives of other groups, I participated in a meeting with the IDOR Director, Acting General Counsel Fliflet, the Department's Chief of Staff Jim Nichelson, and Legislative Affairs Director Richard Sgro to discuss out opposition to  HB 4544 an initiative of the Illinois Department of Revenue that is intended to provide that the term "unitary business group" does not include members who were not created or organized in the United States or under the laws of the United States or any State.

The Department's rationale for this legislation is to eliminate what they view as an improper tax planning opportunity that utilizes the statutory definition of an 80/20 company.  Acting General Counsel Fliflet cited the  Pepsi cases before the Independent Tax Tribunal.  Here are  link,  link to the other two filings on the Independent Tax Tribunal website.

The Department proposed amending the version of HB 4544 originally introduced to clarify the intent of the legislation.  Those of us in attendance advised that we are opposed to the legislation as a conceptual matter, even if it were to be "clarified."  Among our the reasons we explained for our opposition we pointed out that this legislation would have an adverse effect on affected taxpayers who have structured their affairs under the current definition for reasons other than tax planning.  We also pointed out that modifying the definition as suggested by the Department would likely only shift tax planning to take into account the new definition.  I will keep you posted on this matter.

Rulemaking