Synopsis As Introduced Amends the Retailers' Occupation Tax Act. Provides that, subject to certain restrictions, if the Department of Revenue may disclose confidential financial information to a municipality or county, then the Department of Revenue may also disclose that financial information to an independent third party who is authorized in writing by that municipality or county to receive the information. Effective immediately.
House Committee Amendment No. 2 In a provision of the introduced bill providing that the third party may use the financial information only for the purpose of providing services to the municipality and may not use the information for any other purpose, specifies that the third party may not use the information to verify the accuracy of amounts indicated on returns submitted to the Department of Revenue by a taxpayer. Provides, however, that the third party may verify the accuracy of amounts remitted to the municipality, except as otherwise prohibited by law..
Fiscal Note, House Committee Amendment No. 2 (Dept. of Revenue)
HB 2717 (H-AM 2) allows third-party consultants access to confidential allocation reports provided to municipalities and counties in order to verify the accuracy of amounts remitted and at the same time specifies that third-party consultants may not use those reports to verify the accuracy of amounts indicated on returns submitted to the Department of Revenue. However, the verification of amounts remitted necessitates a review of the associated returns. This would leave the Department in the position of having to re-review the accuracy of returns in order to verify the accuracy of amounts remitted. Consequently, in addition to the review in which the State currently engages when processing returns and allocating revenues to municipalities and counties, this bill would allow third-party consultants to request, without limitation, that the State re-review returns to verify amounts allocated. The volume of requests is expected to be significant. Municipalities are incentivized by the lure of identifying revenues without having to invest any time or resources and third-party contractors are incentivized by the potential for contingent fees for simply requesting the State re-review returns to verify allocation amounts, hence verify the accuracy of amounts indicated on returns. The State is the only entity incurring significant costs to implement HB 2717 as amended HCA 2. To illustrate the potential scope, it's necessary to note there are currently 235,234 active retailers in Illinois. Of these, 30,439 have multiple sites ranging from 2 to 1,399 locations within Illinois. The number of returns filed by these taxpayers per year is 1,512,875. Assuming it takes a minimum of 30 minutes to re-review each return, without promise of found revenue, the State would need 450 additional Revenue Tax Specialists at a cost of $36,121,680.00 per year. While it is difficult to precisely predict the volume of requests that would occur if HB 2717 as amended by HCA 2 were to become law, as noted there is no disincentive to request the State re-review returns to verify amounts allocated.