HB3263ham001 100TH GENERAL ASSEMBLY

Rep. Michael J. Zalewski

Filed: 3/15/2017

10000HB3263ham001 LRB100 10460 HLH 23238 a

AMENDMENT TO HOUSE BILL 3263

AMENDMENT NO. ______. Amend House Bill 3263 by replacing everything after the enacting clause with the following:

"Section 3. The Cannabis and Controlled Substances Tax Act is amended by changing Section 16 as follows:

(35 ILCS 520/16) (from Ch. 120, par. 2166)

Sec. 16. All assessments are Jeopardy Assessments - lien.

(a) Assessment. An assessment for a dealer not possessing valid stamps or other official indicia showing that the tax has been paid shall be considered a jeopardy assessment or collection, as provided by Section 1102 of the Illinois Income Tax Act. The Department shall determine and assess a tax and applicable penalties and interest according to the best judgment and information available to the Department, which amount so fixed by the Department shall be prima facie correct and shall be prima facie evidence of the correctness of the amount of tax due, as shown in such determination. When, according to the best judgment and information available to the Department with regard to all real and personal property and rights to property of the dealer, there is no reasonable expectation of collection of the amount of tax and penalty to be assessed, the Department may issue an assessment under this Section for the amount of tax without penalty.

(b) Filing of Lien. Upon issuance of a jeopardy assessment as provided by subsection (a) of this Section, the Department may file a notice of jeopardy assessment lien in the office of the recorder of the county in which any property of the taxpayer may be located and shall notify the taxpayer of such filing.

(c) Protest. If the taxpayer believes that he does not owe some or all of the amount for which the jeopardy assessment lien against him has been filed, he may protest within 20 days after being notified by the Department of the filing of such jeopardy assessment lien and request a hearing, whereupon the Department shall hold a hearing in conformity with the provisions of Section 908 of the Illinois Income Tax Act and, pursuant thereto, shall notify the taxpayer of its decision as to whether or not such jeopardy assessment lien will be released.

After the expiration of the period within which the person assessed may file an action for judicial review without such action being filed, a certified copy of the final assessment or revised final assessment of the Department may be filed with the Circuit Court of the county in which the dealer resides, or of Cook County in the case of a dealer who does not reside in this State, or in the county where the violation of this Act took place. The certified copy of the final assessment or revised final assessment shall be accompanied by a certification which recites facts that are sufficient to show that the Department complied with the jurisdictional requirements of the Act in arriving at its final assessment or its revised final assessment and that the dealer had this opportunity for an administrative hearing and for judicial review, whether he availed himself or herself of either or both of these opportunities or not. If the court is satisfied that the Department complied with the jurisdictional requirements of the Act in arriving at its final assessment or its revised final assessment and that the taxpayer had his opportunity for an administrative hearing and for judicial review, whether he availed himself of either or both of these opportunities or not, the court shall render judgment in favor of the Department and against the taxpayer for the amount shown to be due by the final assessment or the revised final assessment, plus any interest which may be due, and such judgment shall be entered in the judgment docket of the court. Such judgment shall bear the same rate of interest and shall have the same effect as other judgments. The judgment may be enforced, and all laws applicable to sales for the enforcement of a judgment shall be applicable to sales made under such judgments. The Department shall file the certified copy of its assessment, as herein provided, with the Circuit Court within 2 years after such assessment becomes final except when the taxpayer consents in writing to an extension of such filing period, and except that the time limitation period on the Department's right to file the certified copy of its assessment with the Circuit Court shall not run during any period of time in which the order of any court has the effect of enjoining or restraining the Department from filing such certified copy of its assessment with the Circuit Court.

If, when the cause of action for a proceeding in court accrues against a person, he or she is out of the State, the action may be commenced within the times herein limited, after his or her coming into or returning to the State; and if, after the cause of action accrues, he or she departs from and remains out of the State, the time of his or her absence from the State, the time of his or her absence is no part of the time limited for the commencement of the action; but the foregoing provisions concerning absence from the State shall not apply to any case in which, at the time the cause of action accrues, the party against whom the cause of action accrues is not a resident of this State. The time within which a court action is to be commenced by the Department hereunder shall not run from the date the taxpayer files a petition in bankruptcy under the Federal Bankruptcy Act until 30 days after notice of termination or expiration of the automatic stay imposed by the Federal Bankruptcy Act.

No claim shall be filed against the estate of any deceased person or any person under legal disability for any tax or penalty or part of either, or interest, except in the manner prescribed and within the time limited by the Probate Act of 1975, as amended.

The collection of tax or penalty or interest by any means provided for herein shall not be a bar to any prosecution under this Act.

In addition to any penalty provided for in this Act, any amount of tax which is not paid when due shall bear interest at the rate determined in accordance with the Uniform Penalty and Interest Act, per month or fraction thereof from the date when such tax becomes past due until such tax is paid or a judgment therefor is obtained by the Department. If the time for making or completing an audit of a taxpayer's books and records is extended with the taxpayer's consent, at the request of and for the convenience of the Department, beyond the date on which the statute of limitations upon the issuance of a notice of tax liability by the Department otherwise run, no interest shall accrue during the period of such extension. Interest shall be collected in the same manner and as part of the tax.

If the Department determines that an amount of tax or penalty or interest was incorrectly assessed, whether as the result of a mistake of fact or an error of law, the Department shall waive the amount of tax or penalty or interest that accrued due to the incorrect assessment.

On and after January 1, 2018, the assessment and collection of the tax under this Act is subject to the jurisdiction of the Illinois Tax Tribunal to the extent provided in the Illinois Independent Tax Tribunal Act of 2012.

(Source: P.A. 97-1129, eff. 8-28-12.)

Section 5. The Illinois Independent Tax Tribunal Act of 2012 is amended by changing Sections 1-45, 1-50, 1-55, and 1-63 and by adding Section 1-51 as follows:

(35 ILCS 1010/1-45)

Sec. 1-45. Jurisdiction of the Tax Tribunal.

(a) Except as provided by the Constitution of the United States, the Constitution of the State of Illinois, or any statutes of this State, including, but not limited to, the State Officers and Employees Money Disposition Act, the Tax Tribunal shall have original jurisdiction over all determinations of the Department reflected on a Notice of Deficiency, Notice of Tax Liability, Notice of Claim Denial, or Notice of Penalty Liability issued under the Illinois Income Tax Act, the Use Tax Act, the Service Use Tax Act, the Service Occupation Tax Act, the Retailers' Occupation Tax Act, the Cigarette Tax Act, the Cigarette Use Tax Act, the Tobacco Products Tax Act of 1995, the Hotel Operators' Occupation Tax Act, the Motor Fuel Tax Law, the Automobile Renting Occupation and Use Tax Act, the Coin-Operated Amusement Device and Redemption Machine Tax Act, the Gas Revenue Tax Act, the Water Company Invested Capital Tax Act, the Telecommunications Excise Tax Act, the Telecommunications Infrastructure Maintenance Fee Act, the Public Utilities Revenue Act, the Electricity Excise Tax Law, the Aircraft Use Tax Law, the Watercraft Use Tax Law, the Gas Use Tax Law, or the Uniform Penalty and Interest Act. In addition, with respect to notices issued on or after January 1, 2018, the Tax Tribunal shall also have original jurisdiction over all determinations of the Department reflected on a Notice of Deficiency, Notice of Tax Liability, Notice of Claim Denial, or Notice of Penalty Liability issued under the County Motor Fuel Tax Law, the Live Adult Entertainment Facility Surcharge Act, the Vehicle Use Tax, the Metropolitan Pier and Exposition Authority Food and Beverage Tax, the Tire User Fee, the Chicago Soft Drink Tax, the Drycleaning Solvent Tax, the Energy Assistance Act of 1989, the Qualified Solid Waste Fee, the Illinois Hydraulic Fracturing Tax Act, or the Cannabis and Controlled Substances Tax Act. Jurisdiction of the Tax Tribunal is limited to Notices of Tax Liability, Notices of Deficiency, Notices of Claim Denial, and Notices of Penalty Liability where, for notices issued prior to January 1, 2018, the amount at issue in a notice, or the aggregate amount at issue in multiple notices issued for the same tax year or audit period, exceeds $15,000, exclusive of penalties and interest. In notices issued prior to January 1, 2018 solely asserting either an interest or penalty assessment, or both, the Tax Tribunal shall have jurisdiction over cases where the combined total of all penalties or interest assessed exceeds $15,000. Beginning with notices and decisions issued on and after January 1, 2018, the Tax Tribunal shall have jurisdiction over all Notices of Tax Liability, Notices of Deficiency, Notices of Claim Denial, and Notices of Penalty Liability, all notices solely asserting either an interest or penalty assessment, and any decisions relating to the issuance or denial of an exemption ruling for any entity claiming a non-homestead exemption from any tax imposed under the Property Tax Code or any exemption from a State tax administered by the Department.

(b) Except as otherwise permitted by this Act and by the Constitution of the State of Illinois or otherwise by State law, including, but not limited to, the State Officers and Employees Money Disposition Act, no person shall contest any matter within the jurisdiction of the Tax Tribunal in any action, suit, or proceeding in the circuit court or any other court of the State. If a person attempts to do so, then such action, suit, or proceeding shall be dismissed without prejudice. The improper commencement of any action, suit, or proceeding does not extend the time period for commencing a proceeding in the Tax Tribunal.

(c) The Tax Tribunal may require the taxpayer to post a bond equal to 25% of the liability at issue (1) upon motion of the Department and a showing that (A) the taxpayer's action is frivolous or legally insufficient or (B) the taxpayer is acting primarily for the purpose of delaying the collection of tax or prejudicing the ability ultimately to collect the tax, or (2) if, at any time during the proceedings, it is determined by the Tax Tribunal that the taxpayer is not pursuing the resolution of the case with due diligence. If the Tax Tribunal finds in a particular case that the taxpayer cannot procure and furnish a satisfactory surety or sureties for the kind of bond required herein, the Tax Tribunal may relieve the taxpayer of the obligation of filing such bond, if, upon the timely application for a lien in lieu thereof and accompanying proof therein submitted, the Tax Tribunal is satisfied that any such lien imposed would operate to secure the assessment in the manner and to the degree as would a bond. The Tax Tribunal shall adopt rules for the procedures to be used in securing a bond or lien under this Section.

(d) If, with or after the filing of a timely petition, the taxpayer pays all or part of the tax or other amount in issue before the Tax Tribunal has rendered a decision, the Tax Tribunal shall treat the taxpayer's petition as a protest of a denial of claim for refund of the amount so paid upon a written motion filed by the taxpayer.

(e) The Tax Tribunal shall not have jurisdiction to review:

(1) any assessment made under the Property Tax Code;

(2) any decisions issued prior to January 1, 2018 relating to the issuance or denial of an exemption ruling for any entity claiming exemption from any tax imposed under the Property Tax Code or any State tax administered by the Department;

(3) a notice of proposed tax liability, notice of proposed deficiency, or any other notice of proposed assessment or notice of intent to take some action;

(4) any action or determination of the Department regarding tax liabilities that have become finalized by law, including but not limited to the issuance of liens, levies, and revocations, suspensions, or denials of licenses or certificates of registration or any other collection activities;

(5) any proceedings of the Department's informal administrative appeals function; and

(6) any challenge to an administrative subpoena issued by the Department.

(f) The Tax Tribunal shall decide questions regarding the constitutionality of statutes and rules adopted by the Department as applied to the taxpayer, but shall not have the power to declare a statute or rule unconstitutional or otherwise invalid on its face. A taxpayer challenging the constitutionality of a statute or rule on its face may present such challenge to the Tax Tribunal for the sole purpose of making a record for review by the Illinois Appellate Court. Failure to raise a constitutional issue regarding the application of a statute or regulations to the taxpayer shall not preclude the taxpayer or the Department from raising those issues at the appellate court level.

(Source: P.A. 97-1129, eff. 8-28-12; 98-463, eff. 8-16-13.)

(35 ILCS 1010/1-50)

Sec. 1-50. Pleadings.

(a) A taxpayer may commence a proceeding in the Tax Tribunal by filing a petition protesting the Department's determination imposing a liability for tax, penalty, or interest, or denying a claim for refund or credit application. The petition shall be filed within the time permitted by statute for filing a protest.

(b) The Department shall file its answer in the Tax Tribunal no later than 30 days after its receipt of the Tax Tribunal's notification that the taxpayer has filed a petition in the proper form or within such additional time as the Tax Tribunal may specify. The Department shall serve a copy of its answer on the taxpayer's representative or, if the taxpayer is not represented, on the taxpayer, and shall file proof of such service with the answer. Material facts alleged in the petition, if not expressly admitted or denied in the answer, shall be deemed admitted.

(c) Either party may amend a pleading once without leave at any time before the period for responding to it expires. After such time, a pleading may be amended only with the written consent of the adverse party or with the permission of the Tax Tribunal. The Tax Tribunal shall freely grant consent to amend upon such terms as may be just. Except as otherwise ordered by the Tax Tribunal, there shall be an answer to an amended pleading if an answer is required to the pleading being amended. Filing of the answer, or, if the answer has already been filed, the amended answer shall be made no later than 30 days after the filing of the amended petition. The taxpayer may not amend a petition after expiration of the time for filing a petition, if such amendment would have the effect of conferring jurisdiction on the Tax Tribunal over a matter that would otherwise not come within its jurisdiction. An amendment of a pleading shall relate back to the time of filing of the original pleading only as prescribed by Section 2-616 of the Code of Civil Procedure.

(d) For all notices issued prior to January 1, 2018, this Section applies to all cases in which the amount at issue in a notice, or the aggregate amount at issue in multiple notices issued for the same tax year or audit period, exceeds $15,000 exclusive of penalties and interest, and in all cases involving notices solely asserting an interest or penalty assessment, or both, where the combined total of all penalties and interest assessed exceeds $15,000.

(e) For all notices issued on or after January 1, 2018, this Section applies to all cases in which the amount at issue in a notice, or the aggregate amount at issue in multiple notices issued for the same tax year or audit period, exceeds $50,000, exclusive of penalties and interest, and in all cases involving notices solely asserting an interest or penalty assessment, or both, where the combined total of all penalties and interest assessed exceeds $50,000.

(Source: P.A. 97-1129, eff. 8-28-12.)

(35 ILCS 1010/1-51 new)

Sec. 1-51. Pleadings in small dollar cases.

(a) For all notices issued on or after January 1, 2018, this Section applies to all cases in which the amount at issue in a notice, or the aggregate amount at issue in multiple notices issued for the same tax year or audit period, does not exceed $50,000 exclusive of penalties and interest, in all cases involving notices solely asserting an interest or penalty assessment or both the combined total of all penalties and interest assessed does not exceed $50,000, and any decisions relating to the issuance or denial of an exemption ruling for any entity claiming a non-homestead exemption from any tax imposed under the Property Tax Code or any exemption from a State tax administered by the Department.

(b) In all matters governed by this Section, protests, in order to be deemed sufficient as a matter of law, may be filed on forms promulgated by the Tax Tribunal and must include the following at a minimum:

(1) the taxpayer's identification number, i.e., FEIN, or individual or business account number;

(2) the date of issuance of the notice which is being contested;

(3) the tax year or years and, if applicable, the filing period and audit period involved;

(4) to the extent possible, the factual and legal grounds upon which the objections to the notices are based;

(5) A certification that the facts stated are true, correct, and complete to the best of the affiant's knowledge and belief.

(35 ILCS 1010/1-55)

Sec. 1-55. Fees.

(a) The Tax Tribunal shall impose a fee of

(1) $500 for the filing of petitions under Section 1-50; or .

(2) a fee of $100 for the filing of petitions under Section 1-51 in which the amount at issue exceeds $5000 and any petition related to the issuance or denial of an exemption ruling.

(b) The Tax Tribunal may fix a fee, not in excess of the fees charged and collected by the clerk of the circuit courts, for comparing, or for preparing and comparing, a transcript of the record, or for copying any record, entry, or other paper and the comparison and certification thereof.

(c) Fees collected under this Section shall be deposited into the Illinois Independent Tax Tribunal Fund, a special fund created in the State treasury. Moneys deposited into the Fund shall be appropriated to the Tax Tribunal to reimburse the Tax Tribunal for costs associated with administering and enforcing the provisions of this Act.

(d) The Tax Tribunal shall not assign any costs or attorney's fees incurred by one party against another party. Claims for expenses and attorney's fees under Section 10-55 of the Illinois Administrative Procedure Act shall first be made to the Department of Revenue. If the claimant is dissatisfied because of the Department's failure to make any award or because of the insufficiency of the award, the claimant may petition the Court of Claims for the amount deemed owed.

(Source: P.A. 97-1129, eff. 8-28-12; 98-463, eff. 8-16-13.)

(35 ILCS 1010/1-63)

Sec. 1-63. Automatic Remand and Mediation.

(a) Every case governed by this Act shall be remanded automatically to the Department of Revenue for a period ending 90 days following the filing of the petition (the "remand period"). During the remand period, the parties shall meet and confer in good faith, making particular efforts to resolve the case by settlement, if possible. All parties may by agreement extend the remand period for an additional period approved by the administrative law judge assigned to the case, waive the remand period, or have a case returned to the Tax Tribunal at any time.

(b) At any point in the proceedings before the Tax Tribunal after the expiration of the remand period, but prior to the hearing under Section 1-65 of this Act, the parties may jointly petition the Tax Tribunal for mediation. The purpose of the mediation shall be to attempt to settle any contested issues or the case in its entirety. An administrative law judge other than the one initially assigned to hear the case shall serve as the mediator.

(Source: P.A. 97-1129, eff. 8-28-12.)

Section 99. Effective date. This Act takes effect upon becoming law.".