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91_SB1440ham002
LRB9110653MWgcam02
1 AMENDMENT TO SENATE BILL 1440
2 AMENDMENT NO. . Amend Senate Bill 1440, AS AMENDED,
3 by replacing everything after the enacting clause with the
4 following:
5 "Section 1. Short title. This Act may be cited as
6 the 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
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1 largely based on voluntary compliance and self-assessment and
2 the development of understandable tax laws. Providing clear
3 tax laws at the local level and providing all necessary due
4 process rights in the collection and enforcement of local tax
5 laws will only serve to improve voluntary compliance and
6 self-assessment of local government taxes.
7 Section 10. Application and home rule preemption. The
8 limitations provided by this Act shall take precedence over
9 any provision of any tax ordinance imposed by a unit of local
10 government, as defined in this Act, in Illinois.
11 This Act is a denial and limitation of home rule powers
12 and functions under subsection (g) of Section 6 of Article
13 VII of the Illinois Constitution.
14 Section 15. Definitions. In this Act:
15 "Locally imposed and administered tax" means a tax
16 imposed by a unit of local government that is collected or
17 administered by a unit of local government and not an agency
18 or Department of the State. A "locally imposed and
19 administered tax" does not include a tax imposed upon real
20 property under the Property Tax Code or fees collected by a
21 unit of local government other than infrastructure
22 maintenance fees.
23 "Local tax administrator" includes directors of local
24 government departments of revenue or taxation, or other local
25 government officers charged with the administration or
26 collection of a locally imposed and administered tax,
27 including their staffs, employees, or agents to the extent
28 they are authorized by a local tax administrator to act in
29 the local tax administrator's stead.
30 "Unit of local government" includes a municipality, a
31 county, or a home rule unit of this State, but does not
32 include (i) home rule municipalities with a population
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1 greater than 1,000,000 and (ii) home rule counties with a
2 population greater than 3,000,000 that have locally
3 administered departments or bureaus of revenue.
4 Section 20. Responsibilities of units of local
5 government. Each unit of local government shall have the
6 powers and obligations enumerated in the following Sections
7 to protect the rights of the taxpayers.
8 Section 25. Application of payments. Taxpayers have the
9 right to know how tax payments and remittances covered by
10 this Act will be applied to the tax liability owed to units
11 of local government. Each unit of local government must
12 provide, by ordinance, for the order of application of tax
13 payments to tax liability, penalty, and interest, provided
14 that in no case may a payment be applied to penalties due
15 before it is applied to tax or interest. In the event that a
16 unit of local government does not provide for application of
17 payments, any payment or remittance received for a tax period
18 will be applied first to tax for the period, then to interest
19 due for the period, and then to penalties due for the period.
20 Section 30. Statute of limitations. Units of local
21 government have an obligation to review tax returns in a
22 timely manner and issue any determination of tax due as
23 promptly as possible so that taxpayers may make timely
24 corrections of future returns and minimize any interest
25 charges applied to tax underpayments. Each unit of local
26 government must provide appropriate statutes of limitation
27 for the determination and assessment of taxes covered by this
28 Act, provided, however, that a statute of limitations may not
29 exceed the following:
30 (1) No notice of determination of tax due or
31 assessment may be issued more than 4 years after the end
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1 of the calendar year for which the return for the period
2 was filed or the end of the calendar year in which the
3 return for the period was due, whichever occurs later.
4 (2) If any tax return was not filed or if during
5 any 4-year period for which a notice of tax determination
6 or assessment may be issued by the unit of local
7 government the tax paid or remitted was less than 75% of
8 the tax due for that period, the statute of limitations
9 shall be no more than 6 years after the end of the
10 calendar year in which the return for the period was due
11 or the end of the calendar year in which the return for
12 the period was filed, whichever occurs later. In the
13 event that a unit of local government fails to
14 provide a statute of limitations, the maximum
15 statutory period provided in this Section applies.
16 This Section does not place any limitation on a unit of
17 local government if a fraudulent tax return is filed.
18 Section 35. Audit procedures. Taxpayers have the right
19 to be treated by officers, employees, and agents of the local
20 tax administrator with courtesy, fairness, uniformity,
21 consistency, and common sense. Taxpayers must be notified in
22 writing of a proposed audit of the taxpayer's books and
23 records. The notice of audit must specify the tax and time
24 period to be audited and must detail the minimum
25 documentation or books and records to be made available to
26 the auditor. Audits must be held only during reasonable
27 times of the day and, unless impracticable, at times agreed
28 to by the taxpayer. An auditor who determines that there has
29 been an overpayment of tax during the course of the audit is
30 obligated to identify the overpayment to the taxpayer so that
31 the taxpayer can take the necessary steps to recover the
32 overpayment. If the overpayment is the result of the
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1 application of some or all of the taxpayer's tax payment to
2 an incorrect local government entity, the auditor must notify
3 the correct local government entity of the taxpayer's
4 application error.
5 Section 40. Appeals process. Units of local government
6 have an obligation to provide, by ordinance, a procedure for
7 appealing a determination of tax due or an assessment.
8 Local governments must provide to taxpayers a written
9 statement of rights whenever the local government issues a
10 protestable notice of tax due, a bill, a claim denial, or
11 a notice of claim reduction regarding any tax. The
12 statement must explain the reason for the assessment, the
13 amount of the tax liability proposed, the procedure for
14 appealing the assessment, and the obligations of the unit of
15 local government during the audit, appeal, refund, and
16 collection process. In no event may a taxpayer be provided a
17 time period less than 45 days after the date the notice
18 was served in which to protest a notice of tax
19 determination or notice of tax liability. Any notice of tax
20 assessment due must be sent by United States registered or
21 certified mail. The unit of local government must also
22 adopt procedures for opening up any closed protest period
23 or extending the protest period upon the showing of
24 reasonable cause by the taxpayer and full payment of the
25 contested tax liability along with interest accrued as of the
26 due date of the tax.
27 Section 45. Interest. Units of local government must
28 provide, by ordinance, for the amount of interest, if any,
29 to be assessed on a late payment, underpayment, or nonpayment
30 of tax.
31 Section 50. Late filing penalties. Late filing
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1 penalties may not exceed 5% of the amount of tax required to
2 be shown as due on a return. A late filing penalty may not
3 apply if a failure to file penalty is imposed by the unit
4 of local government. A local tax administrator may
5 determine that the late filing was due to reasonable cause
6 and abate the penalty.
7 Section 55. Late payment penalty. Late payment
8 penalties may not exceed 5% of the tax due and not timely
9 paid or remitted to the unit of local government. This
10 penalty shall not apply if a failure to file penalty is
11 imposed by the unit of local government. A local tax
12 administrator may determine that the late payment was due to
13 reasonable cause and abate the penalty.
14 Section 60. Failure to file penalty. If no return is
15 filed before the issuance of a notice of tax deficiency or of
16 tax liability to the taxpayer, any failure to file penalty
17 may not exceed 25% of the total tax due for the applicable
18 reporting period for which the return was required to have
19 been filed. A local tax administrator may determine that the
20 failure to file a return was due to reasonable cause and
21 abate the penalty.
22 Section 65. Credits and refunds. Units of local
23 government shall provide a procedure for claiming a credit or
24 refund of taxes, interest, or penalties paid in error. No
25 units of local government are required to refund or credit
26 any taxes voluntarily paid without written protest at the
27 time of payment in the event that a local government tax is
28 declared invalidly enacted or unconstitutional by a court of
29 competent jurisdiction. A taxpayer shall not be deemed to
30 have paid a tax voluntarily if the taxpayer lacked knowledge
31 of the facts upon which to protest the taxes at the time of
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1 payment or if the taxpayer paid the taxes under duress.
2 Unless the corporate authorities of a unit of local
3 government expressly adopt a shorter statute of limitations
4 for a particular tax, a statute of limitations on a claim for
5 credit or refund may not be less than 4 years after the end
6 of the calendar year in which payment or remittance in error
7 was made. No unit of local government shall be required to
8 grant a credit or refund of taxes, interest, or penalties to
9 a person who has not paid or remitted the amounts directly to
10 the unit of local government. Units of local government must
11 provide, by ordinance, a rate of interest for overpayment of
12 tax.
13 Section 70. Installment contracts. If a local
14 government tax ordinance or a local tax administrator allows
15 installment payment agreements for delinquent tax amounts,
16 the local tax administrator may not cancel any installment
17 contract unless the taxpayer fails to pay any amount due on
18 time and fails to cure the delinquency in the allowable time
19 supplied by the local tax administrator, or fails to
20 demonstrate good faith in restructuring any installment plan
21 agreement or contract with the local tax administrator.
22 Section 75. Voluntary disclosure. For any tax for which
23 a taxpayer has not received a written notice of an audit,
24 investigation, or assessment from the local tax
25 administrator, a taxpayer is entitled to file an
26 application with the local tax administrator for a
27 voluntary disclosure of the tax due. A taxpayer filing a
28 voluntary disclosure application must agree to pay the amount
29 of tax due, along with interest of one percent per month, for
30 all periods prior to the filing of the application but not
31 more than 4 years before the date of filing the
32 application. Except for the amount of tax and interest due
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1 under this Section, a taxpayer filing a valid voluntary
2 disclosure application may not be liable for any additional
3 tax, interest, or penalty for any period before the date
4 the application was filed, provided, however, that if the
5 taxpayer incorrectly determined and underpaid the amount
6 of tax due as provided in this Section, the taxpayer is
7 liable for the underpaid tax along with applicable
8 interest on the underpaid tax, unless the underpayment was
9 the result of fraud on the part of the taxpayer, in which
10 case the application shall be deemed invalid and void. The
11 payment of tax and interest required under this Section must
12 be made within 90 days after the filing of the voluntary
13 disclosure application or the date agreed to by the local tax
14 administrator, whichever is longer, except that any
15 additional amounts owed as a result of an underpayment of tax
16 and interest previously paid under this Section must be paid
17 within 90 days after a final determination and the exhaustion
18 of all appeals of the additional amount owed or the date
19 agreed to by the local tax administrator, whichever is
20 longer.
21 Section 80. Criminal penalties. Criminal penalties may
22 not be imposed on taxpayers for non-compliance with the
23 provisions of a locally administered tax unless the
24 non-compliance is a result of willful or fraudulent disregard
25 of the local tax laws.
26 Section 85. Review of liens. The local tax
27 administrator must establish an internal review process
28 concerning liens against taxpayers. If the lien is determined
29 to be improper, the local tax administrator must remove
30 the lien at local government's own expense, correct the
31 taxpayer's credit record, and correct any public disclosure
32 of the improperly imposed lien.
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1 Section 90. Publication of tax ordinances. Each unit of
2 local government that imposes one or more locally
3 administered taxes by ordinance must publish and make copies
4 of those taxing ordinances readily available to the public
5 upon request. Posting of the tax ordinances on the Internet
6 satisfies the publication requirement of this Section.
7 Section 99. Effective date. This Act takes effect on
8 January 1, 2001.".