[ Search ] [ Legislation ]
[ Home ] [ Back ] [ Bottom ]
| [ Introduced ] | [ Engrossed ] | [ House Amendment 001 ] |
| [ House Amendment 002 ] | [ Senate Amendment 001 ] |
91_SB1440enr SB1440 Enrolled LRB9110653MWgc 1 AN ACT to create the Local Government Taxpayers' Bill of 2 Rights Act. 3 Be it enacted by the People of the State of Illinois, 4 represented in the General Assembly: 5 Section 1. Short title. This Act may be cited as the 6 Local Government Taxpayers' Bill of Rights Act. 7 Section 5. Legislative declaration. It is the intent of 8 the General Assembly that this legislation grant various 9 rights and protections to taxpayers and tax collectors with 10 respect to the administration and enforcement of local 11 government tax laws. The provisions of this Act are designed 12 to reduce the burden on both taxpayers and tax collectors by 13 specifically providing that fair and consistent tax processes 14 and procedures be adopted and disseminated to taxpayers at 15 the local level while at the same time preserving local 16 government's full authority to collect taxes lawfully due 17 under their taxing ordinances. 18 This legislation also provides taxpayers a minimum 19 level of consistency with regard to the assessment and 20 collection of local taxes as they do business in multiple 21 locations within this State. 22 The General Assembly further finds that tax systems are 23 largely based on voluntary compliance and self-assessment and 24 the development of understandable tax laws. Providing clear 25 tax laws at the local level and providing all necessary due 26 process rights in the collection and enforcement of local tax 27 laws will only serve to improve voluntary compliance and 28 self-assessment of local government taxes. 29 Section 10. Application and home rule preemption. The 30 limitations provided by this Act shall take precedence over SB1440 Enrolled -2- LRB9110653MWgc 1 any provision of any tax ordinance imposed by a unit of local 2 government, as defined in this Act, in Illinois. 3 This Act is a denial and limitation of home rule powers 4 and functions under subsection (g) of Section 6 of Article 5 VII of the Illinois Constitution. 6 Section 15. Definitions. In this Act: 7 "Locally imposed and administered tax" means a tax 8 imposed by a unit of local government that is collected or 9 administered by a unit of local government and not an agency 10 or Department of the State. A "locally imposed and 11 administered tax" does not include a tax imposed upon real 12 property under the Property Tax Code or fees collected by a 13 unit of local government other than infrastructure 14 maintenance fees. 15 "Local tax administrator" includes directors of local 16 government departments of revenue or taxation, or other local 17 government officers charged with the administration or 18 collection of a locally imposed and administered tax, 19 including their staffs, employees, or agents to the extent 20 they are authorized by a local tax administrator to act in 21 the local tax administrator's stead. 22 "Unit of local government" includes a municipality, a 23 county, or a home rule unit of this State, but does not 24 include (i) home rule municipalities with a population 25 greater than 1,000,000 and (ii) home rule counties with a 26 population greater than 3,000,000 that have locally 27 administered departments or bureaus of revenue. 28 Section 20. Responsibilities of units of local 29 government. Each unit of local government shall have the 30 powers and obligations enumerated in the following Sections 31 to protect the rights of the taxpayers. SB1440 Enrolled -3- LRB9110653MWgc 1 Section 25. Application of payments. Taxpayers have the 2 right to know how tax payments and remittances covered by 3 this Act will be applied to the tax liability owed to units 4 of local government. Each unit of local government must 5 provide, by ordinance, for the order of application of tax 6 payments to tax liability, penalty, and interest, provided 7 that in no case may a payment be applied to penalties due 8 before it is applied to tax or interest. In the event that a 9 unit of local government does not provide for application of 10 payments, any payment or remittance received for a tax period 11 will be applied first to tax for the period, then to interest 12 due for the period, and then to penalties due for the period. 13 Section 30. Statute of limitations. Units of local 14 government have an obligation to review tax returns in a 15 timely manner and issue any determination of tax due as 16 promptly as possible so that taxpayers may make timely 17 corrections of future returns and minimize any interest 18 charges applied to tax underpayments. Each unit of local 19 government must provide appropriate statutes of limitation 20 for the determination and assessment of taxes covered by this 21 Act, provided, however, that a statute of limitations may not 22 exceed the following: 23 (1) No notice of determination of tax due or 24 assessment may be issued more than 4 years after the end 25 of the calendar year for which the return for the period 26 was filed or the end of the calendar year in which the 27 return for the period was due, whichever occurs later. 28 (2) If any tax return was not filed or if during 29 any 4-year period for which a notice of tax determination 30 or assessment may be issued by the unit of local 31 government the tax paid or remitted was less than 75% of 32 the tax due for that period, the statute of limitations 33 shall be no more than 6 years after the end of the SB1440 Enrolled -4- LRB9110653MWgc 1 calendar year in which the return for the period was due 2 or the end of the calendar year in which the return for 3 the period was filed, whichever occurs later. In the 4 event that a unit of local government fails to 5 provide a statute of limitations, the maximum 6 statutory period provided in this Section applies. 7 This Section does not place any limitation on a unit of 8 local government if a fraudulent tax return is filed. 9 Section 35. Audit procedures. Taxpayers have the right 10 to be treated by officers, employees, and agents of the local 11 tax administrator with courtesy, fairness, uniformity, 12 consistency, and common sense. Taxpayers must be notified in 13 writing of a proposed audit of the taxpayer's books and 14 records. The notice of audit must specify the tax and time 15 period to be audited and must detail the minimum 16 documentation or books and records to be made available to 17 the auditor. Audits must be held only during reasonable 18 times of the day and, unless impracticable, at times agreed 19 to by the taxpayer. An auditor who determines that there has 20 been an overpayment of tax during the course of the audit is 21 obligated to identify the overpayment to the taxpayer so that 22 the taxpayer can take the necessary steps to recover the 23 overpayment. If the overpayment is the result of the 24 application of some or all of the taxpayer's tax payment to 25 an incorrect local government entity, the auditor must notify 26 the correct local government entity of the taxpayer's 27 application error. 28 Section 40. Appeals process. Units of local government 29 have an obligation to provide, by ordinance, a procedure for 30 appealing a determination of tax due or an assessment. 31 Local governments must provide to taxpayers a written 32 statement of rights whenever the local government issues a SB1440 Enrolled -5- LRB9110653MWgc 1 protestable notice of tax due, a bill, a claim denial, or 2 a notice of claim reduction regarding any tax. The 3 statement must explain the reason for the assessment, the 4 amount of the tax liability proposed, the procedure for 5 appealing the assessment, and the obligations of the unit of 6 local government during the audit, appeal, refund, and 7 collection process. In no event may a taxpayer be provided a 8 time period less than 45 days after the date the notice 9 was served in which to protest a notice of tax 10 determination or notice of tax liability. Any notice of tax 11 assessment due must be sent by United States registered or 12 certified mail. The unit of local government must also 13 adopt procedures for opening up any closed protest period 14 or extending the protest period upon the showing of 15 reasonable cause by the taxpayer and full payment of the 16 contested tax liability along with interest accrued as of the 17 due date of the tax. 18 Section 45. Interest. Units of local government must 19 provide, by ordinance, for the amount of interest, if any, 20 to be assessed on a late payment, underpayment, or nonpayment 21 of tax. 22 Section 50. Late filing penalties. Late filing 23 penalties may not exceed 5% of the amount of tax required to 24 be shown as due on a return. A late filing penalty may not 25 apply if a failure to file penalty is imposed by the unit 26 of local government. A local tax administrator may 27 determine that the late filing was due to reasonable cause 28 and abate the penalty. 29 Section 55. Late payment penalty. Late payment 30 penalties may not exceed 5% of the tax due and not timely 31 paid or remitted to the unit of local government. This SB1440 Enrolled -6- LRB9110653MWgc 1 penalty shall not apply if a failure to file penalty is 2 imposed by the unit of local government. A local tax 3 administrator may determine that the late payment was due to 4 reasonable cause and abate the penalty. 5 Section 60. Failure to file penalty. If no return is 6 filed before the issuance of a notice of tax deficiency or of 7 tax liability to the taxpayer, any failure to file penalty 8 may not exceed 25% of the total tax due for the applicable 9 reporting period for which the return was required to have 10 been filed. A local tax administrator may determine that the 11 failure to file a return was due to reasonable cause and 12 abate the penalty. 13 Section 65. Credits and refunds. Units of local 14 government shall provide a procedure for claiming a credit or 15 refund of taxes, interest, or penalties paid in error. No 16 units of local government are required to refund or credit 17 any taxes voluntarily paid without written protest at the 18 time of payment in the event that a local government tax is 19 declared invalidly enacted or unconstitutional by a court of 20 competent jurisdiction. A taxpayer shall not be deemed to 21 have paid a tax voluntarily if the taxpayer lacked knowledge 22 of the facts upon which to protest the taxes at the time of 23 payment or if the taxpayer paid the taxes under duress. 24 Unless the corporate authorities of a unit of local 25 government expressly adopt a shorter statute of limitations 26 for a particular tax, a statute of limitations on a claim for 27 credit or refund may not be less than 4 years after the end 28 of the calendar year in which payment or remittance in error 29 was made. No unit of local government shall be required to 30 grant a credit or refund of taxes, interest, or penalties to 31 a person who has not paid or remitted the amounts directly to 32 the unit of local government. Units of local government must SB1440 Enrolled -7- LRB9110653MWgc 1 provide, by ordinance, a rate of interest for overpayment of 2 tax. 3 Section 70. Installment contracts. If a local 4 government tax ordinance or a local tax administrator allows 5 installment payment agreements for delinquent tax amounts, 6 the local tax administrator may not cancel any installment 7 contract unless the taxpayer fails to pay any amount due on 8 time and fails to cure the delinquency in the allowable time 9 supplied by the local tax administrator, or fails to 10 demonstrate good faith in restructuring any installment plan 11 agreement or contract with the local tax administrator. 12 Section 75. Voluntary disclosure. For any tax for which 13 a taxpayer has not received a written notice of an audit, 14 investigation, or assessment from the local tax 15 administrator, a taxpayer is entitled to file an 16 application with the local tax administrator for a 17 voluntary disclosure of the tax due. A taxpayer filing a 18 voluntary disclosure application must agree to pay the amount 19 of tax due, along with interest of one percent per month, for 20 all periods prior to the filing of the application but not 21 more than 4 years before the date of filing the 22 application. Except for the amount of tax and interest due 23 under this Section, a taxpayer filing a valid voluntary 24 disclosure application may not be liable for any additional 25 tax, interest, or penalty for any period before the date 26 the application was filed, provided, however, that if the 27 taxpayer incorrectly determined and underpaid the amount 28 of tax due as provided in this Section, the taxpayer is 29 liable for the underpaid tax along with applicable 30 interest on the underpaid tax, unless the underpayment was 31 the result of fraud on the part of the taxpayer, in which 32 case the application shall be deemed invalid and void. The SB1440 Enrolled -8- LRB9110653MWgc 1 payment of tax and interest required under this Section must 2 be made within 90 days after the filing of the voluntary 3 disclosure application or the date agreed to by the local tax 4 administrator, whichever is longer, except that any 5 additional amounts owed as a result of an underpayment of tax 6 and interest previously paid under this Section must be paid 7 within 90 days after a final determination and the exhaustion 8 of all appeals of the additional amount owed or the date 9 agreed to by the local tax administrator, whichever is 10 longer. 11 Section 80. Criminal penalties. Criminal penalties may 12 not be imposed on taxpayers for non-compliance with the 13 provisions of a locally administered tax unless the 14 non-compliance is a result of willful or fraudulent disregard 15 of the local tax laws. 16 Section 85. Review of liens. The local tax 17 administrator must establish an internal review process 18 concerning liens against taxpayers. If the lien is determined 19 to be improper, the local tax administrator must remove 20 the lien at local government's own expense, correct the 21 taxpayer's credit record, and correct any public disclosure 22 of the improperly imposed lien. 23 Section 90. Publication of tax ordinances. Each unit of 24 local government that imposes one or more locally 25 administered taxes by ordinance must publish and make copies 26 of those taxing ordinances readily available to the public 27 upon request. Posting of the tax ordinances on the Internet 28 satisfies the publication requirement of this Section. SB1440 Enrolled -9- LRB9110653MWgc 1 Section 99. Effective date. This Act takes effect on 2 January 1, 2001.