093_SB1883enr

 
SB1883 Enrolled                      LRB093 08674 SJM 08904 b

 1        AN ACT concerning taxes.

 2        Be  it  enacted  by  the People of the State of Illinois,
 3    represented in the General Assembly:

 4        Section 5.  The Property Tax Code is amended by  changing
 5    Sections  31-5, 31-10, 31-20, and 31-25 and by adding Section
 6    3-46 as follows:

 7        (35 ILCS 200/31-5)
 8        Sec.  31-5.   Definitions.   "Recordation"  includes  the
 9    issuance of certificates of  title  by  Registrars  of  Title
10    under  the  Registered  Titles  (Torrens) Act pursuant to the
11    filing of deeds or trust documents for that purpose, as  well
12    as the recording of deeds or trust documents by recorders.
13        "Department" means the Department of Revenue.
14        "Person" means any natural individual, firm, partnership,
15    association,  joint stock company, joint adventure, public or
16    private  corporation,  limited  liability   company,   or   a
17    receiver, executor, trustee, guardian or other representative
18    appointed by order of any court.
19        "Value" means the amount of the full actual consideration
20    for  the  real  property, including the amount of any lien on
21    the real property assumed by the buyer.
22        "Trust document" means a document required to be recorded
23    under the Land Trust Recordation and Transfer Tax Act.
24        "Beneficial interest" includes, but is not limited to:
25             (1)  the beneficial interest  in  an  Illinois  land
26        trust;
27             (2)  the   lessee   interest   in   a  ground  lease
28        (including any interest of  the  lessee  in  the  related
29        improvements)  that  provides  for  a  term of 30 or more
30        years when all options to renew or extend  are  included,
31        whether or not any portion of the term has expired; or
 
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 1             (3)  the  indirect  interest  in  real  property  as
 2        reflected  by  a  controlling  interest  in a real estate
 3        entity.
 4        "Controlling interest" means more than 50%  of  the  fair
 5    market   value  of  all  ownership  interests  or  beneficial
 6    interests in a real estate entity.
 7        "Real estate entity" means any person including, but  not
 8    limited  to,  any partnership, corporation, limited liability
 9    company, trust, other entity, or  multi-tiered  entity,  that
10    exists  or  acts  substantially  for  the  purpose of holding
11    directly or indirectly title to  or  beneficial  interest  in
12    real  property.  There  is  a  rebuttable presumption that an
13    entity is a real  estate  entity  if  it  owns,  directly  or
14    indirectly,  real property having a fair market value greater
15    than 75% of the  total  fair  market  value  of  all  of  the
16    entity's   assets,   determined  without  deduction  for  any
17    mortgage, lien, or encumbrance.
18    (Source: P.A. 92-651, eff. 7-11-02.)

19        (35 ILCS 200/31-10)
20        Sec. 31-10.  Imposition of tax. A tax is imposed  on  the
21    privilege  of  transferring  title  to real estate located in
22    Illinois, as represented  by  the  deed  that  is  filed  for
23    recordation,   and   on   the  privilege  of  transferring  a
24    beneficial interest in real property located in Illinois that
25    is the subject of a land trust as represented  by  the  trust
26    document  that is filed for recordation, and on the privilege
27    of transferring a  controlling  interest  in  a  real  estate
28    entity  owning  property  located in Illinois, at the rate of
29    50¢ for each $500 of value or fraction of $500 stated in  the
30    declaration required by Section 31-25.  If, however, the deed
31    or  trust  document  states  that the real estate, beneficial
32    interest, or controlling interest is transferred subject to a
33    mortgage, the amount of the mortgage remaining outstanding at
 
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 1    the time of transfer shall not be included in  the  basis  of
 2    computing  the tax. The tax is due if the transfer is made by
 3    one or more related transactions  or  involves  one  or  more
 4    persons  or  entities  and  whether  or  not  a  document  is
 5    recorded.
 6    (Source:  P.A.  86-624;  86-925;  86-1028;  86-1475;  87-543;
 7    88-455.)

 8        (35 ILCS 200/31-20)
 9        Sec. 31-20.  Affixing of stamps. Payment of the tax shall
10    be evidenced by revenue stamps in the amount required to show
11    full  payment  of the tax imposed by Section 31-10. Except as
12    provided in Section 31-45, a deed,  document  transferring  a
13    controlling  interest  in  real  property,  or trust document
14    shall not be accepted for filing by any recorder or registrar
15    of titles unless revenue stamps in the required  amount  have
16    been  purchased  from  the recorder or registrar of titles of
17    the  county  where  the   deed,   document   transferring   a
18    controlling  interest  in real property, or trust document is
19    being filed for recordation.  The  revenue  stamps  shall  be
20    affixed  to  the  deed,  document  transferring a controlling
21    interest in real property, or trust document by the  recorder
22    or  the  registrar of titles either before or after recording
23    as requested by the grantee. A person  using  or  affixing  a
24    revenue  stamp  shall cancel it and so deface it as to render
25    it unfit for reuse by marking it with his or her initials and
26    the day, month and  year  when  the  affixing   occurs.   The
27    marking shall be made by writing or stamping in indelible ink
28    or  by  perforating  with  a  machine  or punch. However, the
29    revenue stamp shall not be so defaced  as  to  prevent  ready
30    determination of its denomination and genuineness.
31    (Source:  P.A.  86-624;  86-925;  86-1028;  86-1475;  87-543;
32    88-455.)
 
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 1        (35 ILCS 200/31-25)
 2        Sec.  31-25.  Transfer declaration. At the time a deed, a
 3    document  transferring  a  controlling   interest   in   real
 4    property,  or trust document is presented for recordation, or
 5    within 3  business  days  after  the  transfer  is  effected,
 6    whichever  is  earlier,  there shall also be presented to the
 7    recorder or registrar of titles a  declaration, signed by  at
 8    least  one  of the sellers and also signed by at least one of
 9    the buyers in the transaction or by the attorneys  or  agents
10    for  the  sellers  or  buyers.   The  declaration shall state
11    information including, but not limited to: (a) the  value  of
12    the  real  property  or  beneficial interest in real property
13    located in Illinois the full consideration for  the  property
14    so  transferred;  (b)  the  parcel  identifying number of the
15    property; (c) the legal description of the property; (d)  the
16    date  of the deed, the date the transfer was effected, or the
17    date of the trust document; (e) the type of  deed,  transfer,
18    or  trust  document; (f) the address of the property; (g) the
19    type of improvement, if any, on the property; (h) information
20    as to whether the transfer is between related individuals  or
21    corporate  affiliates or is a compulsory transaction; (i) the
22    lot size or acreage; (j) the value of personal property  sold
23    with the real estate; (k) the year the contract was initiated
24    if  an  installment  sale;  and  (l)  the  name, address, and
25    telephone number of the  person  preparing  the  declaration.
26    Except  as  provided  in  Section  31-45,  a deed, a document
27    transferring a controlling  interest  in  real  property,  or
28    trust  document  shall not be accepted for recordation unless
29    it  is  accompanied  by  a  declaration  containing  all  the
30    information  requested  in   the   declaration.    When   the
31    declaration  is   signed by an attorney or agent on behalf of
32    sellers or buyers who have the power  of  direction  to  deal
33    with  the  title  to  the  real  estate  under  a  land trust
34    agreement, the trustee being the mere  repository  of  record
 
SB1883 Enrolled            -5-       LRB093 08674 SJM 08904 b
 1    legal  title  with  a  duty of conveying the real estate only
 2    when and  if  directed  in  writing  by  the  beneficiary  or
 3    beneficiaries having the power of direction, the attorneys or
 4    agents  executing the declaration on behalf of the sellers or
 5    buyers  need  identify  only  the  land  trust  that  is  the
 6    repository of record legal title and not the  beneficiary  or
 7    beneficiaries  having  the  power of direction under the land
 8    trust agreement. The declaration form shall be prescribed  by
 9    the Department and shall contain sales information questions.
10    For  sales  occurring during a period in which the provisions
11    of Section 17-10 require the Department to adjust sale prices
12    for seller paid points and prevailing  cost  of  cash,    the
13    declaration   form  shall  contain  questions  regarding  the
14    financing  of  the  sale.   The  subject  of  the   financing
15    questions  shall  include  any direct seller participation in
16    the financing of the sale or information on financing that is
17    unconventional so as to affect the fair cash  value  received
18    by  the  seller.   The  intent  of  the  sales  and financing
19    questions is to aid in the reduction in the number of  buyers
20    required  to  provide financing information necessary for the
21    adjustment outlined in Section 17-10.   For  sales  occurring
22    during  a  period  in  which  the provisions of Section 17-10
23    require the Department to adjust sale prices for seller  paid
24    points  and  prevailing  cost  of  cash, the declaration form
25    shall include, at a minimum, the following data:  (a)  seller
26    paid  points,  (b)  the  sales  price,  (c) type of financing
27    (conventional, VA, FHA, seller-financed, or other), (d)  down
28    payment,   (e)   term,   (f)  interest  rate,  (g)  type  and
29    description  of   interest   rate   (fixed,   adjustable   or
30    renegotiable), and (h) an appropriate place for the inclusion
31    of  special  facts  or  circumstances, if any. The Department
32    shall provide an adequate supply of forms  to  each  recorder
33    and registrar of titles in the State.
34    (Source: P.A. 91-555, eff. 1-1-00.)
 
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 1        (35 ILCS 200/31-46 new)
 2        Sec.   31-46.  Exemption  from  tax  equal  to  corporate
 3    franchise taxes paid. If a transfer of a controlling interest
 4    in a real estate entity is taxed under this Article  and  the
 5    real  estate  entity liable for the tax under this Article is
 6    also liable for corporate franchise taxes under the  Business
 7    Corporation Act of 1983 as a result of the transfer, then the
 8    real  estate  entity  is  exempt  from paying the tax imposed
 9    under this Article to the extent of the  corporate  franchise
10    tax  paid  by  the  real  estate  entity  as  a result of the
11    transfer. The exemption shall  not  reduce  the  real  estate
12    entity's tax liability under this Article to less than zero.

13        Section 10.  The Stock, Commodity, or Options Transaction
14    Tax Exemption Act is amended by adding Section 3 as follows:

15        (35 ILCS 820/3 new)
16        Sec.  3.  Construction  of Act. Nothing in this Act shall
17    be construed as prohibiting  or  otherwise  invalidating  any
18    real  estate  transfer  tax or fee authorized or permitted by
19    Section 31-10 of the Property Tax Code, Section  5-1031.1  of
20    the   Counties  Code,  or  Section  8-3-19  of  the  Illinois
21    Municipal Code. This Section is intended as  a  clarification
22    and not as a change to existing law.

23        Section  15.   The  Counties  Code is amended by changing
24    Section 5-1031.1 as follows:

25        (55 ILCS 5/5-1031.1)
26        Sec. 5-1031.1. Home rule real estate transfer taxes.
27        (a)  After the effective date of this amendatory  Act  of
28    the 93rd General Assembly 1996 and subject to this Section, a
29    home rule county may impose or increase a tax or other fee on
30    the  privilege  of  transferring  title  to  real  estate, as
 
SB1883 Enrolled            -7-       LRB093 08674 SJM 08904 b
 1    represented by the deed that is filed for recordation, and on
 2    the privilege of transferring a beneficial interest in a land
 3    trust holding legal  title  to  real  property,  and  on  the
 4    privilege  of  transferring  a controlling interest in a real
 5    estate  entity,   as   the   terms   "beneficial   interest",
 6    "controlling  interest", and "real estate entity" are defined
 7    in Article 31 of the Property Tax Code as represented by  the
 8    trust  document that is filed for recordation.  Such a tax or
 9    other fee on the privilege  of  transferring  title  to  real
10    estate,  as  represented  by  the  deed  that  is  filed  for
11    recordation,   and   on   the  privilege  of  transferring  a
12    beneficial interest in a land trust holding  legal  title  to
13    real  property,  as represented by the trust document that is
14    filed for recordation, shall hereafter be referred  to  as  a
15    real estate transfer tax.
16        (b)  Before  adopting a resolution to submit the question
17    of imposing or increasing  a  real  estate  transfer  tax  to
18    referendum,  the  corporate  authorities  shall  give  public
19    notice  of  and hold a public hearing on the intent to submit
20    the question to referendum.  This hearing may be  part  of  a
21    regularly  scheduled  meeting  of  the corporate authorities.
22    The notice shall be published not more than 30 nor less  than
23    10  days  prior  to  the  hearing  in  a newspaper of general
24    circulation within the county.  The notice shall be published
25    in the following form:
26             Notice of Proposed (Increased) Real Estate  Transfer
27        Tax for (commonly known name of county).
28             A  public  hearing  on  a  resolution  to  submit to
29        referendum the question of a  proposed  (increased)  real
30        estate  transfer tax for (legal name of the county) in an
31        amount of (rate) to be paid by the buyer (seller) of  the
32        real  estate transferred will be held on (date) at (time)
33        at (location).  The current rate of real estate  transfer
34        tax imposed by (name of county) is (rate).
 
SB1883 Enrolled            -8-       LRB093 08674 SJM 08904 b
 1             Any  person desiring to appear at the public hearing
 2        and present testimony to the taxing district may do so.
 3        (c)  A notice that includes any information not specified
 4    and required by this  Section  is  an  invalid  notice.   All
 5    hearings shall be open to the public.  At the public hearing,
 6    the  corporate  authorities  of  the county shall explain the
 7    reasons for the proposed or increased  real  estate  transfer
 8    tax  and  shall  permit  persons  desiring  to  be  heard  an
 9    opportunity  to  present  testimony  within  reasonable  time
10    limits  determined  by  the corporate authorities.  A copy of
11    the proposed ordinance shall be made available to the general
12    public for inspection before the public hearing.
13        (d)  No home rule county shall impose a new  real  estate
14    transfer  tax after the effective date of this amendatory Act
15    of 1996 without prior approval by referendum.  No  home  rule
16    county shall impose an increase of the rate of a current real
17    estate  transfer tax without prior approval by referendum.  A
18    home rule county may impose a new real estate transfer tax or
19    may increase an existing real estate transfer tax with  prior
20    referendum  approval.   The  referendum shall be conducted as
21    provided  in  subsection  (e).  An  existing   ordinance   or
22    resolution imposing a real estate transfer tax may be amended
23    without  approval  by  referendum  if  the amendment does not
24    increase the rate of the tax or add transactions on which the
25    tax is imposed.
26        (e)  The home rule county shall, by  resolution,  provide
27    for  submission  of  the proposition to the voters.  The home
28    rule county shall certify the resolution and the  proposition
29    to  the  proper  election  officials  in  accordance with the
30    general election law.  If the proposition is to impose a  new
31    real  estate  transfer  tax, it shall be in substantially the
32    following form:  "Shall (name of county) impose a real estate
33    transfer tax at a rate of (rate) to  be  paid  by  the  buyer
34    (seller)  of the real estate transferred, with the revenue of
 
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 1    the proposed transfer tax to be used for (purpose)?".  If the
 2    proposition is to increase an existing real  estate  transfer
 3    tax,  it  shall  be  in  the following form:  "Shall (name of
 4    county)  impose  a  real  estate  transfer  tax  increase  of
 5    (percent increase) to establish a new  real  estate  transfer
 6    tax  rate  of  (rate) to be paid by the buyer (seller) of the
 7    real estate transferred?  The current rate of the real estate
 8    transfer  tax  is  (rate),  and  the  revenue  is  used   for
 9    (purpose).   The  revenue from the increase is to be used for
10    (purpose).".
11        If a majority of the electors voting on  the  proposition
12    vote  in  favor  of it, the county may impose or increase the
13    real estate transfer tax.
14        (f)  Nothing in this amendatory Act of 1996  shall  limit
15    the  purposes for which real estate transfer tax revenues may
16    be collected or expended.
17        (g)  A home  rule  county  may  not  impose  real  estate
18    transfer taxes other than as authorized by this Section. This
19    Section  is  a  denial and limitation of home rule powers and
20    functions under subsection (g) of Section 6 of Article VII of
21    the Illinois Constitution.
22        (h) Notwithstanding subsection (g) of this  Section,  any
23    real  estate  transfer  taxes adopted by a county at any time
24    prior to January 17, 1997 (the effective date of  Public  Act
25    89-701)  and  any  amendments  to  any  existing  real estate
26    transfer tax ordinance adopted after that date, in accordance
27    with the law in effect at the time of  the  adoption  of  the
28    amendments,  are  not preempted by this amendatory Act of the
29    93rd General Assembly.
30    (Source: P.A. 89-701, eff. 1-17-97; 90-14, eff. 7-1-97.)

31        Section 20.  The Illinois Municipal Code  is  amended  by
32    changing Section 8-3-19 as follows:
 
SB1883 Enrolled            -10-      LRB093 08674 SJM 08904 b
 1        (65 ILCS 5/8-3-19)
 2        Sec. 8-3-19.  Home rule real estate transfer taxes.
 3        (a)  After  the  effective date of this amendatory Act of
 4    the 93rd General Assembly 1996 and subject to this Section, a
 5    home rule municipality may impose or increase a tax or  other
 6    fee on the privilege of transferring title to real estate, as
 7    represented by the deed that is filed for recordation, and on
 8    the privilege of transferring a beneficial interest in a land
 9    trust  holding  legal  title  to  real  property,  and on the
10    privilege of transferring a controlling interest  in  a  real
11    estate   entity,   as   the   terms   "beneficial  interest",
12    "controlling interest", and "real estate entity" are  defined
13    in  Article 31 of the Property Tax Code as represented by the
14    trust document that is filed for recordation.  Such a tax  or
15    other  fee  on  the  privilege  of transferring title to real
16    estate,  as  represented  by  the  deed  that  is  filed  for
17    recordation,  and  on  the  privilege   of   transferring   a
18    beneficial  interest  in  a land trust holding legal title to
19    real property, as represented by the trust document  that  is
20    filed  for  recordation,  shall hereafter be referred to as a
21    real estate transfer tax.
22        (b)  Before adopting a resolution to submit the  question
23    of  imposing  or  increasing  a  real  estate transfer tax to
24    referendum,  the  corporate  authorities  shall  give  public
25    notice of and hold a public hearing on the intent  to  submit
26    the  question  to  referendum.  This hearing may be part of a
27    regularly scheduled meeting  of  the  corporate  authorities.
28    The  notice shall be published not more than 30 nor less than
29    10 days prior to  the  hearing  in  a  newspaper  of  general
30    circulation  within  the  municipality.   The notice shall be
31    published in the following form:
32             Notice of Proposed (Increased) Real Estate  Transfer
33        Tax for (commonly known name of municipality).
34             A  public  hearing  on  a  resolution  to  submit to
 
SB1883 Enrolled            -11-      LRB093 08674 SJM 08904 b
 1        referendum the question of a  proposed  (increased)  real
 2        estate  transfer tax for (legal name of the municipality)
 3        in an amount of (rate) to be paid by the  buyer  (seller)
 4        of  the real estate transferred will be held on (date) at
 5        (time) at (location). The current  rate  of  real  estate
 6        transfer tax imposed by (name of municipality) is (rate).
 7             Any  person desiring to appear at the public hearing
 8        and present testimony to the taxing district may do so.
 9        (c)  A notice that includes any information not specified
10    and required by  this  Section  is  an  invalid  notice.  All
11    hearings  shall be open to the public. At the public hearing,
12    the corporate authorities of the municipality  shall  explain
13    the  reasons  for  the  proposed  or  increased  real  estate
14    transfer tax and shall permit persons desiring to be heard an
15    opportunity  to  present  testimony  within  reasonable  time
16    limits determined by the corporate authorities. A copy of the
17    proposed  ordinance  shall  be  made available to the general
18    public for inspection before the public hearing.
19        (d)  No home rule municipality shall impose  a  new  real
20    estate   transfer  tax  after  the  effective  date  of  this
21    amendatory Act of 1996 without prior approval by  referendum.
22    No  home  rule  municipality  shall impose an increase of the
23    rate of a current real  estate  transfer  tax  without  prior
24    approval  by referendum.  A home rule municipality may impose
25    a new real estate transfer tax or may  increase  an  existing
26    real estate transfer tax with prior referendum approval.  The
27    referendum  shall be conducted as provided in subsection (e).
28    An existing ordinance or resolution imposing  a  real  estate
29    transfer tax may be amended without approval by referendum if
30    the  amendment  does  not increase the rate of the tax or add
31    transactions on which the tax is imposed.
32        (e)  The home rule  municipality  shall,  by  resolution,
33    provide for submission of the proposition to the voters.  The
34    home  rule  municipality shall certify the resolution and the
 
SB1883 Enrolled            -12-      LRB093 08674 SJM 08904 b
 1    proposition to the proper election  officials  in  accordance
 2    with  the  general  election  law.   If the proposition is to
 3    impose a new  real  estate  transfer  tax,  it  shall  be  in
 4    substantially   the   following   form:    "Shall   (name  of
 5    municipality) impose a real estate transfer tax at a rate  of
 6    (rate)  to  be  paid by the buyer (seller) of the real estate
 7    transferred, with the revenue of the proposed transfer tax to
 8    be used for (purpose)?".  If the proposition is  to  increase
 9    an  existing  real  estate  transfer  tax, it shall be in the
10    following form:  "Shall (name of municipality) impose a  real
11    estate   transfer  tax  increase  of  (percent  increase)  to
12    establish a new transfer tax rate of (rate) to be paid by the
13    buyer (seller) of the real estate transferred?   The  current
14    rate  of  the  real  estate  transfer  tax is (rate), and the
15    revenue is used for (purpose).  The revenue from the increase
16    is to be used for (purpose).".
17        If a majority of the electors voting on  the  proposition
18    vote  in favor of it, the municipality may impose or increase
19    the municipal real estate transfer tax or fee.
20        (f)  Nothing in this amendatory Act of 1996  shall  limit
21    the  purposes for which real estate transfer tax revenues may
22    be collected or expended.
23        (g)  A home rule municipality may not impose real  estate
24    transfer taxes other than as authorized by this Section. This
25    Section  is  a  denial and limitation of home rule powers and
26    functions under subsection (g) of Section 6 of Article VII of
27    the Illinois Constitution.
28        (h) Notwithstanding subsection (g) of this  Section,  any
29    real  estate  transfer taxes adopted by a municipality at any
30    time prior to January 17, 1997 (the effective date of  Public
31    Act  89-701)  and  any amendments to any existing real estate
32    transfer tax ordinance adopted after that date, in accordance
33    with the law in effect at the time of  the  adoption  of  the
34    amendments,  are  not preempted by this amendatory Act of the
 
SB1883 Enrolled            -13-      LRB093 08674 SJM 08904 b
 1    93rd  General Assembly.
 2    (Source: P.A. 89-701, eff. 1-17-97.)