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| [ Introduced ] | [ Engrossed ] | [ Senate Amendment 002 ] |
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1 AMENDMENT TO SENATE BILL 880
2 AMENDMENT NO. . Amend Senate Bill 880 is amended by
3 replacing the title with the following:
4 "AN ACT to create the Local Government Taxpayers' Bill of
5 Rights Act."; and
6 by replacing everything after the enacting clause with the
7 following:
8 "Section 1. Short title. This Act may be cited as the
9 Local Government Taxpayers' Bill of Rights Act.
10 Section 5. Legislative declaration. The General
11 Assembly finds and declares that, in order to ensure fairness
12 in the administration and enforcement of locally imposed and
13 administered taxes, all taxpayers should, at a minimum, be
14 afforded certain basic rights. It is the intent of the
15 General Assembly to place guarantees in Illinois law to
16 ensure that the rights, privacy, and property of Illinois
17 taxpayers are adequately protected during the assessment and
18 collection of all taxes imposed and administered by the 1,282
19 municipalities, 102 counties, and 142 home rule units of this
20 State. A local government taxpayers' bill of rights is
21 necessary as current law does not provide for specific and
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1 guaranteed rights of taxpayers in the administration,
2 enforcement, and collection of local taxes to assure
3 taxpayers a minimum standard of due process in their dealings
4 with local governments. This legislation also provides
5 taxpayers a minimum level of consistency with regard to the
6 assessment and collection of local taxes as they do business
7 in multiple locations within this State.
8 The General Assembly further finds that tax systems are
9 largely based on voluntary compliance and self-assessment and
10 the development of understandable tax laws. Providing clear
11 tax laws at the local level and providing all necessary due
12 process rights in the collection and enforcement of local tax
13 laws will only serve to improve voluntary compliance and
14 self-assessment of local government taxes.
15 Section 10. Application and home rule preemption. The
16 limitations provided by this Act shall take precedence over
17 any provision of any tax ordinance imposed by an Illinois
18 municipality, county, or home rule unit.
19 This Act is a denial and limitation of home rule powers
20 and functions under subsection (g) of Section 6 of Article
21 VII of the Illinois Constitution.
22 Section 15. Definitions. In this Act:
23 "Locally imposed and administered tax" means a tax
24 imposed by a unit of local government that is collected or
25 administered by a unit of local government and not an agency
26 or Department of the State. A "locally imposed and
27 administered tax" does not include a tax imposed upon real
28 property under the Property Tax Code.
29 "Local tax administrator" included directors of local
30 government departments of revenue or taxation, or other local
31 government officers charged with the administration or
32 collection of a locally imposed and administered tax,
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1 including their staffs, employees, or agents to the extent
2 they are authorized by a local tax administrator to act in
3 the local tax administrator's stead.
4 "Person" means and includes an individual, trust, estate,
5 partnership, association, firm, company, corporation, limited
6 liability company, or fiduciary.
7 "Unit of local government" includes a municipality, a
8 county, or special district, including a home rule unit of
9 this State, but does not include municipalities with a
10 population greater than 500,000.
11 Section 20. Publication of rules and regulations. Units
12 of local government are authorized to adopt reasonable rules
13 and regulations pertaining to the administration of this Act.
14 Any rule or regulation adopted under the authority of this
15 Act must be published in the same manner as the ordinance
16 imposing the tax that is the subject of the rules or
17 regulations.
18 Section 25. Responsibilities of units of local
19 government. Each unit of local government shall have the
20 powers and obligations enumerated in the following Sections
21 to protect the rights of the taxpayers.
22 Section 30. Application of payments. Taxpayers have the
23 right to know how tax payments and remittances will be
24 applied to the tax liability owed to units of local
25 government. Each unit of local government must provide, by
26 ordinance or regulation, for the order of application of tax
27 payments to tax liability, penalty, and interest, provided
28 that in no case may a payment be applied to penalties due
29 before it is applied to tax or interest. In the event that a
30 unit of local government does not provide for application of
31 payments, any payment or remittance received for a tax period
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1 will be applied first to tax for the period, then to interest
2 due for the period, and then to penalties due for the period.
3 Section 35. Statute of limitations. Units of local
4 government have an obligation to review tax returns in a
5 timely manner and issue any determination of tax due as
6 promptly as possible so that taxpayers may make timely
7 corrections of future returns and minimize any interest
8 charges applied to tax underpayments. Each unit of local
9 government must provide appropriate statutes of limitation
10 for the determination and assessment of tax, provided,
11 however, that a statute of limitations may not exceed the
12 following:
13 (1) No notice of determination of tax due or
14 assessment may be issued more than 4 years after the end
15 of the calendar year for which the return for the period
16 was filed or the end of the calendar year in which the
17 return for the period was due, whichever occurs later.
18 (2) If any tax a return was not filed or if during
19 any 4-year period for which a notice of tax determination
20 or assessment may be issued by the unit of local
21 government the tax paid or remitted was less than 75% of
22 the tax due for that period, the statute of limitations
23 shall be no more than 6 years after the end of the
24 calendar year in which the return for the period was due
25 or the end of the calendar year in which the return for
26 the period was filed, whichever occurs later.
27 In the event that a unit of local government fails to
28 provide a statute of limitations, the maximum statutory
29 period provided in this Section applies.
30 This Section does not place any limitation on a unit of
31 local government if a fraudulent tax return is filed.
32 Section 40. Audit procedures. Taxpayers have the right
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1 to be treated by officers, employees, and agents of the local
2 tax administrator with courtesy, fairness, uniformity,
3 consistency, and common sense. Taxpayers must be notified in
4 writing of a proposed audit of the taxpayer's books and
5 records. The notice of audit must specify the tax and time
6 period to be audited and must detail the minimum
7 documentation or books and records to be made available to
8 the auditor. Audits must be held only during reasonable
9 times of the day and, unless impracticable, at times agreed
10 to by the taxpayer. An auditor who determines that there has
11 been an overpayment of tax during the course of the audit is
12 obligated to identify the overpayment to the taxpayer so that
13 the taxpayer can take the necessary steps to recover the
14 overpayment.
15 Section 45. Appeals process. Units of local government
16 have an obligation to provide, by ordinance or regulation, a
17 procedure for appealing a determination of tax due or an
18 assessment. Taxpayers are entitled to receive a written
19 statement of rights whenever they receive a protestable
20 notice, a bill, a claim denial, or reduction regarding any
21 tax. The statement must explain the reason for the
22 assessment, the amount of the tax liability proposed, the
23 procedure for appealing the assessment, and the obligations
24 of the unit of local government during the audit, appeal,
25 refund, and collection process. In no event may a taxpayer
26 be provided a time period less than 60 days after the date
27 the notice was served in which to protest a notice of tax
28 determination or notice of tax liability. The unit of local
29 government must also adopt rules or procedures for opening up
30 any closed protest period or extending the protest period
31 upon the showing of reasonable cause by the taxpayer.
32 Section 50. Interest. Units of local government must
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1 provide by ordinance for the amount of interest to be
2 assessed on a late payment, underpayment, or nonpayment of
3 tax. In no event may an ordinance impose an interest charge
4 for late payment, underpayment, or nonpayment exceeding 1%,
5 or a fraction thereof, of the tax imposed by the ordinance
6 per month on any late tax payments, tax remittance, or unpaid
7 or unremitted tax liability. Units of local government must
8 pay interest to taxpayers who have made overpayments of tax
9 at the same rate as interest charged on underpayments.
10 Section 55. Late filing penalties. Late filing
11 penalties may not exceed 2% of the tax due and not timely
12 paid or remitted to the unit of local government. A late
13 filing penalty may not apply if a failure to file penalty is
14 imposed by the unit of local government. A local tax
15 administrator may determine that the late filing was due to
16 reasonable cause and abate the penalty.
17 Section 60. Late payment penalty. Late payment
18 penalties may not exceed 2% of the tax due and not timely
19 paid or remitted to the unit of local government. This
20 penalty shall not apply if a failure to file penalty is
21 imposed by the unit of local government. A local tax
22 administrator may determine that the late filing was due to
23 reasonable cause and abate the penalty.
24 Section 65. Failure to file penalty. If no return is
25 filed before the issuance of a notice of tax deficiency or of
26 tax liability to the taxpayer, any failure to file penalty
27 may not exceed 20% of the total tax due for the applicable
28 reporting period for which the return was required to have
29 been filed. A local tax administrator may determine that the
30 failure to file a return was due to reasonable cause and
31 abate the penalty.
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1 Section 70. Credits and refunds. Taxpayers have a right
2 to obtain a credit or refund of overpaid tax, penalty, or
3 interest. If a tax ordinance does not provide for a credit
4 or refund, and it appears that an amount of tax, interest, or
5 penalty has been paid or remitted to the unit of local
6 government, the taxpayer may file a claim for credit or
7 refund, provided, however, that no person may be eligible for
8 a credit or refund unless the person had paid or remitted the
9 tax, interest, or penalty directly to the unit of local
10 government. Units of local government shall provide a form
11 or procedure for requesting a refund or credit. While a unit
12 of local government may provide for a longer statute of
13 limitations for filing a claim for refund or credit, in no
14 event may a statute of limitations on a claim made in writing
15 be less than 4 years after the end of the calendar year in
16 which payment or remittance in error was made. Any credit or
17 refund issued must bear interest, at a rate equal to the rate
18 of interest charged for an underpayment of tax, from the date
19 the local government received the erroneous payment or
20 remittance until the date the credit or refund is issued.
21 Section 75. Erroneous written information. Units of
22 local government are obligated to abate taxes, interest, and
23 penalties assessed based upon erroneous written information
24 or advice given by the local tax administrator or his or her
25 staff, employees, or authorized agents.
26 Section 80. Installment contracts. Local tax
27 administrators may not cancel any installment contracts
28 unless the taxpayer fails to pay any amount due on time and
29 fails to cure the delinquency in the allowable time supplied
30 by the local tax administrator, or fails to demonstrate good
31 faith in restructuring any installment plan agreement or
32 contract with the local tax administrator.
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1 Section 85. Escrow accounts. Local tax administrators
2 must place seized taxpayer bank accounts in escrow with the
3 bank for 20 days to permit the taxpayer to correct any errors
4 by the local tax administrator.
5 Section 90. Tax Appeal Officer and Board of Appeals.
6 Units of local government must appoint a Tax Appeal Officer
7 or a Board of Appeals. The Tax Appeal Officer or Board of
8 Appeals shall review requests for abatement of taxes,
9 interest, or penalties based on collectability, equity, or
10 hardship. The Tax Appeal Officer or Board of Appeals has the
11 power to abate, in whole or in part, any tax, interest or
12 penalty with the approval of the local tax administrator. A
13 taxpayer may apply to the Tax Appeal Officer or Board of
14 Appeals for an abatement before, during, or after any
15 administrative hearing or judicial process.
16 Appeal to the Tax Appeals Officer or Board of Appeals is
17 a process separate and distinct from any administrative
18 hearing or judicial process in which a taxpayer is protesting
19 or challenging any tax, interest, or penalty on factual or
20 legal grounds.
21 Section 95. Voluntary disclosure. For any tax for which
22 a taxpayer has not received a written notice of an audit or
23 assessment from the local tax administrator, a taxpayer is
24 entitled to file an application with the local tax
25 administrator for a voluntary disclosure of the tax due. A
26 taxpayer filing a voluntary disclosure application must agree
27 to pay the amount of tax due, along with interest of one-half
28 percent per month, for all periods prior to the filing of the
29 application but not more than 4 years before the date of
30 filing the application, provided, however, that the 4-year
31 limitation does not apply to taxes collected by the applicant
32 from another person and held in trust for the unit of local
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1 government. Except for the amount of tax and interest due
2 under this Section, a taxpayer filing a valid voluntary
3 disclosure application may not be liable for any additional
4 tax, interest, or penalty for any period before the date the
5 application was filed, provided, however, that if the
6 taxpayer incorrectly determined and underpaid the amount of
7 tax due as provided in this Section, the taxpayer is liable
8 for the underpaid tax along with applicable interest on the
9 underpaid tax, unless the underpayment was the result of
10 fraud on the part of the taxpayer, in which case the
11 application shall be deemed invalid and void. The payment of
12 tax and interest required under this Section must be made
13 within 90 days after the filing of the voluntary disclosure
14 application or the date agreed to by the local tax
15 administrator, whichever is longer, except that any
16 additional amounts owed as a result of an underpayment of tax
17 and interest previously paid under this Section must be paid
18 within 90 days after a final determination and the exhaustion
19 of all appeals of the additional amount owed or the date
20 agreed to by the local tax administrator, whichever is
21 longer.
22 Section 100. Reckless actions. A taxpayer has the right
23 to sue a unit of local government if the local tax
24 administrator intentionally or recklessly disregards any
25 laws, regulations, or rules in collecting taxes. The maximum
26 recovery for damages for the suit shall be $100,000. If the
27 taxpayer's suit is determined by the court to be frivolous,
28 the court may impose a penalty on the taxpayer not to exceed
29 $10,000 to be collected as a tax.
30 Section 105. Review of liens. The local tax
31 administrator must establish an internal review process
32 concerning liens against taxpayers. If the lien is determined
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1 to be improper, the local tax administrator must publicly
2 disclose that fact, remove the lien at its own expense, and
3 correct the taxpayer's credit record.
4 Section 110. Publication of tax ordinances and business
5 fees. Each unit of local government imposing taxes or fees
6 on persons doing business within their jurisdiction shall
7 forward a certified copy of each ordinance imposing such tax
8 or fee to the Department of Commerce and Community Affairs no
9 later than November 1, 1999. The Department of Commerce and
10 Community Affairs shall retain copies of local government tax
11 or fee ordinances and shall maintain a computerized database
12 of those ordinances that is readily accessible to interested
13 and affected taxpayers. Units of local government must
14 notify the Department of Commerce and Community Affairs, in
15 writing, of the adoption of any new taxes or fees or any
16 amendments to existing taxes or fees within 30 days after the
17 adoption or amendment.
18 Section 999. Effective date. This Act takes effect upon
19 becoming law.".