093_SB1883eng

 
SB1883 Engrossed                     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 50%  or  more  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,  as
22    represented by the deed that is filed for recordation, and on
23    the privilege of transferring a beneficial interest  in  real
24    property  that  is the subject of a land trust as represented
25    by the trust document that is filed for recordation,  and  on
26    the  privilege  of  transferring  a controlling interest in a
27    real estate entity, at the rate of 50¢ for each $500 of value
28    or fraction of $500 stated in  the  declaration  required  by
29    Section  31-25.    If,  however,  the  deed or trust document
30    states  that  the  real  estate,  beneficial   interest,   or
31    controlling  interest  is  transferred subject to a mortgage,
32    the amount of the mortgage remaining outstanding at the  time
33    of  transfer  shall not be included in the basis of computing
 
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 1    the tax. The tax is due if the transfer is  made  by  one  or
 2    more  related transactions or involves one or more persons or
 3    entities and whether or not a document is recorded.
 4    (Source:  P.A.  86-624;  86-925;  86-1028;  86-1475;  87-543;
 5    88-455.)

 6        (35 ILCS 200/31-20)
 7        Sec. 31-20.  Affixing of stamps. Payment of the tax shall
 8    be evidenced by revenue stamps in the amount required to show
 9    full payment of the tax imposed by Section 31-10.  Except  as
10    provided  in  Section  31-45, a deed, document transferring a
11    controlling interest in  real  property,  or  trust  document
12    shall not be accepted for filing by any recorder or registrar
13    of  titles  unless revenue stamps in the required amount have
14    been purchased from the recorder or registrar  of  titles  of
15    the   county   where   the   deed,  document  transferring  a
16    controlling interest in real property, or trust  document  is
17    being  filed  for  recordation.   The revenue stamps shall be
18    affixed to the  deed,  document  transferring  a  controlling
19    interest  in real property, or trust document by the recorder
20    or the registrar of titles either before or  after  recording
21    as  requested  by  the  grantee. A person using or affixing a
22    revenue stamp shall cancel it and so deface it as  to  render
23    it unfit for reuse by marking it with his or her initials and
24    the  day,  month  and  year  when  the affixing  occurs.  The
25    marking shall be made by writing or stamping in indelible ink
26    or by perforating with  a  machine  or  punch.  However,  the
27    revenue  stamp  shall  not  be so defaced as to prevent ready
28    determination of its denomination and genuineness.
29    (Source:  P.A.  86-624;  86-925;  86-1028;  86-1475;  87-543;
30    88-455.)

31        (35 ILCS 200/31-25)
32        Sec. 31-25.  Transfer declaration. At the time a deed,  a
 
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 1    document   transferring   a   controlling  interest  in  real
 2    property, or trust document is presented for recordation,  or
 3    within  3  business  days  after  the  transfer  is effected,
 4    whichever is earlier, there shall also be  presented  to  the
 5    recorder  or registrar of titles a  declaration, signed by at
 6    least one of the sellers and also signed by at least  one  of
 7    the  buyers  in the transaction or by the attorneys or agents
 8    for the sellers  or  buyers.   The  declaration  shall  state
 9    information  including,  but  not  limited  to:  (a) the full
10    consideration for the property or interest in  real  property
11    so  transferred;  (b)  the  parcel  identifying number of the
12    property; (c) the legal description of the property; (d)  the
13    date  of the deed, the date the transfer was effected, or the
14    date of the trust document; (e) the type of  deed,  transfer,
15    or  trust  document; (f) the address of the property; (g) the
16    type of improvement, if any, on the property; (h) information
17    as to whether the transfer is between related individuals  or
18    corporate  affiliates or is a compulsory transaction; (i) the
19    lot size or acreage; (j) the value of personal property  sold
20    with the real estate; (k) the year the contract was initiated
21    if  an  installment  sale;  and  (l)  the  name, address, and
22    telephone number of the  person  preparing  the  declaration.
23    Except  as  provided  in  Section  31-45,  a deed, a document
24    transferring a controlling  interest  in  real  property,  or
25    trust  document  shall not be accepted for recordation unless
26    it  is  accompanied  by  a  declaration  containing  all  the
27    information  requested  in   the   declaration.    When   the
28    declaration  is   signed by an attorney or agent on behalf of
29    sellers or buyers who have the power  of  direction  to  deal
30    with  the  title  to  the  real  estate  under  a  land trust
31    agreement, the trustee being the mere  repository  of  record
32    legal  title  with  a  duty of conveying the real estate only
33    when and  if  directed  in  writing  by  the  beneficiary  or
34    beneficiaries having the power of direction, the attorneys or
 
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 1    agents  executing the declaration on behalf of the sellers or
 2    buyers  need  identify  only  the  land  trust  that  is  the
 3    repository of record legal title and not the  beneficiary  or
 4    beneficiaries  having  the  power of direction under the land
 5    trust agreement. The declaration form shall be prescribed  by
 6    the Department and shall contain sales information questions.
 7    For  sales  occurring during a period in which the provisions
 8    of Section 17-10 require the Department to adjust sale prices
 9    for seller paid points and prevailing  cost  of  cash,    the
10    declaration   form  shall  contain  questions  regarding  the
11    financing  of  the  sale.   The  subject  of  the   financing
12    questions  shall  include  any direct seller participation in
13    the financing of the sale or information on financing that is
14    unconventional so as to affect the fair cash  value  received
15    by  the  seller.   The  intent  of  the  sales  and financing
16    questions is to aid in the reduction in the number of  buyers
17    required  to  provide financing information necessary for the
18    adjustment outlined in Section 17-10.   For  sales  occurring
19    during  a  period  in  which  the provisions of Section 17-10
20    require the Department to adjust sale prices for seller  paid
21    points  and  prevailing  cost  of  cash, the declaration form
22    shall include, at a minimum, the following data:  (a)  seller
23    paid  points,  (b)  the  sales  price,  (c) type of financing
24    (conventional, VA, FHA, seller-financed, or other), (d)  down
25    payment,   (e)   term,   (f)  interest  rate,  (g)  type  and
26    description  of   interest   rate   (fixed,   adjustable   or
27    renegotiable), and (h) an appropriate place for the inclusion
28    of  special  facts  or  circumstances, if any. The Department
29    shall provide an adequate supply of forms  to  each  recorder
30    and registrar of titles in the State.
31    (Source: P.A. 91-555, eff. 1-1-00.)

32        (35 ILCS 200/31-46 new)
33        Sec.   31-46.  Exemption  from  tax  equal  to  corporate
 
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 1    franchise taxes paid. If a transfer of a controlling interest
 2    in a real estate entity is taxed under this Article  and  the
 3    real  estate  entity liable for the tax under this Article is
 4    also liable for corporate franchise taxes under the  Business
 5    Corporation Act of 1983 as a result of the transfer, then the
 6    real  estate  entity  is  exempt  from paying the tax imposed
 7    under this Article to the extent of the  corporate  franchise
 8    tax  paid  by  the  real  estate  entity  as  a result of the
 9    transfer. The exemption shall  not  reduce  the  real  estate
10    entity's tax liability under this Article to less than zero.

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

13        (35 ILCS 820/3 new)
14        Sec.  3.  Construction  of Act. Nothing in this Act shall
15    be construed as prohibiting  or  otherwise  invalidating  any
16    real  estate  transfer  tax or fee authorized or permitted by
17    Section 31-10 of the Property Tax Code, Section  5-1031.1  of
18    the   Counties  Code,  or  Section  8-3-19  of  the  Illinois
19    Municipal Code. This Section is intended as  a  clarification
20    and not as a change to existing law.

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

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

26        Section  20.   The  Illinois Municipal Code is amended by
27    changing Section 8-3-19 as follows:

28        (65 ILCS 5/8-3-19)
29        Sec. 8-3-19.  Home rule real estate transfer taxes.
30        (a)  After the effective date of this amendatory  Act  of
31    the 93rd General Assembly 1996 and subject to this Section, a
32    home  rule municipality may impose or increase a tax or other
 
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 1    fee on the privilege of transferring title to real estate, as
 2    represented by the deed that is filed for recordation, and on
 3    the privilege of transferring a beneficial interest in a land
 4    trust holding legal  title  to  real  property,  and  on  the
 5    privilege  of  transferring  a controlling interest in a real
 6    estate  entity,   as   the   terms   "beneficial   interest",
 7    "controlling  interest", and "real estate entity" are defined
 8    in Article 31 of the Property Tax Code as represented by  the
 9    trust  document that is filed for recordation.  Such a tax or
10    other fee on the privilege  of  transferring  title  to  real
11    estate,  as  represented  by  the  deed  that  is  filed  for
12    recordation,   and   on   the  privilege  of  transferring  a
13    beneficial interest in a land trust holding  legal  title  to
14    real  property,  as represented by the trust document that is
15    filed for recordation, shall hereafter be referred  to  as  a
16    real estate transfer tax.
17        (b)  Before  adopting a resolution to submit the question
18    of imposing or increasing  a  real  estate  transfer  tax  to
19    referendum,  the  corporate  authorities  shall  give  public
20    notice  of  and hold a public hearing on the intent to submit
21    the question to referendum.  This hearing may be  part  of  a
22    regularly  scheduled  meeting  of  the corporate authorities.
23    The notice shall be published not more than 30 nor less  than
24    10  days  prior  to  the  hearing  in  a newspaper of general
25    circulation within the municipality.   The  notice  shall  be
26    published in the following form:
27             Notice  of Proposed (Increased) Real Estate Transfer
28        Tax for (commonly known name of municipality).
29             A public  hearing  on  a  resolution  to  submit  to
30        referendum  the  question  of a proposed (increased) real
31        estate transfer tax for (legal name of the  municipality)
32        in  an  amount of (rate) to be paid by the buyer (seller)
33        of the real estate transferred will be held on (date)  at
34        (time)  at  (location).  The  current rate of real estate
 
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 1        transfer tax imposed by (name of municipality) is (rate).
 2             Any person desiring to appear at the public  hearing
 3        and present testimony to the taxing district may do so.
 4        (c)  A notice that includes any information not specified
 5    and  required  by  this  Section  is  an  invalid notice. All
 6    hearings shall be open to the public. At the public  hearing,
 7    the  corporate  authorities of the municipality shall explain
 8    the  reasons  for  the  proposed  or  increased  real  estate
 9    transfer tax and shall permit persons desiring to be heard an
10    opportunity  to  present  testimony  within  reasonable  time
11    limits determined by the corporate authorities. A copy of the
12    proposed ordinance shall be made  available  to  the  general
13    public for inspection before the public hearing.
14        (d)  No  home  rule  municipality shall impose a new real
15    estate  transfer  tax  after  the  effective  date  of   this
16    amendatory  Act of 1996 without prior approval by referendum.
17    No home rule municipality shall impose  an  increase  of  the
18    rate  of  a  current  real  estate transfer tax without prior
19    approval by referendum.  A home rule municipality may  impose
20    a  new  real  estate transfer tax or may increase an existing
21    real estate transfer tax with prior referendum approval.  The
22    referendum shall be conducted as provided in subsection  (e).
23    An  existing  ordinance  or resolution imposing a real estate
24    transfer tax may be amended without approval by referendum if
25    the amendment does not increase the rate of the tax.
26        (e)  The home rule  municipality  shall,  by  resolution,
27    provide for submission of the proposition to the voters.  The
28    home  rule  municipality shall certify the resolution and the
29    proposition to the proper election  officials  in  accordance
30    with  the  general  election  law.   If the proposition is to
31    impose a new  real  estate  transfer  tax,  it  shall  be  in
32    substantially   the   following   form:    "Shall   (name  of
33    municipality) impose a real estate transfer tax at a rate  of
34    (rate)  to  be  paid by the buyer (seller) of the real estate
 
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 1    transferred, with the revenue of the proposed transfer tax to
 2    be used for (purpose)?".  If the proposition is  to  increase
 3    an  existing  real  estate  transfer  tax, it shall be in the
 4    following form:  "Shall (name of municipality) impose a  real
 5    estate   transfer  tax  increase  of  (percent  increase)  to
 6    establish a new transfer tax rate of (rate) to be paid by the
 7    buyer (seller) of the real estate transferred?   The  current
 8    rate  of  the  real  estate  transfer  tax is (rate), and the
 9    revenue is used for (purpose).  The revenue from the increase
10    is to be used for (purpose).".
11        If a majority of the electors voting on  the  proposition
12    vote  in favor of it, the municipality may impose or increase
13    the municipal real estate transfer tax or fee.
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 municipality 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   that  were  imposed  by  a
24    municipality at any time prior to the effective date of  this
25    amendatory  Act  of  the  93rd  General  Assembly  are hereby
26    specifically authorized, permitted, and validated under  this
27    subsection (h).
28    (Source: P.A. 89-701, eff. 1-17-97.)

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