Full Text of SB1881 101st General Assembly
SB1881enr 101ST GENERAL ASSEMBLY |
| | SB1881 Enrolled | | LRB101 10946 AWJ 56120 b |
|
| 1 | | AN ACT concerning local government.
| 2 | | Be it enacted by the People of the State of Illinois,
| 3 | | represented in the General Assembly:
| 4 | | Article 1. Short Title. | 5 | | Section 1-1. Short title. This Act may be cited as the | 6 | | Local Government Revenue Recapture Act. | 7 | | Article 5. Local Government Revenue Recapture. | 8 | | Section 5-5. Definitions. As used in this Article: | 9 | | "Department" means the Department of Revenue. | 10 | | "Family member" means the following, whether by whole | 11 | | blood, half-blood, or adoption: | 12 | | (1) a parent or step-parent; | 13 | | (2) a child or step-child; | 14 | | (3) a grandparent or step-grandparent; | 15 | | (4) an aunt, uncle, great-aunt, or great-uncle; | 16 | | (5) a sibling; | 17 | | (6) a spouse or domestic partner; and | 18 | | (7) the spouse or domestic partner of any person | 19 | | referenced in items (1) through (5). | 20 | | "Financial information" means the information provided to | 21 | | the municipality or county by the Department under Section 11 |
| | | SB1881 Enrolled | - 2 - | LRB101 10946 AWJ 56120 b |
|
| 1 | | of the Retailers' Occupation Tax Act that is reported to the | 2 | | Department by a business located in a given municipality or | 3 | | county. | 4 | | "Person" means an individual, sole proprietorship, | 5 | | corporation, registered limited liability partnership, limited | 6 | | liability company, partnership, professional service | 7 | | corporation, or any other form of organization. | 8 | | "Misallocation" means tax paid by the taxpayer and | 9 | | allocated to one unit of local government that should have been | 10 | | allocated to a different unit of local government. | 11 | | "Misallocation" does not include amounts overpaid by the | 12 | | taxpayer and therefore not owed to any unit of local | 13 | | government, nor amounts underpaid by the taxpayer and therefore | 14 | | not previously allocated to any unit of local government. | 15 | | "Monitoring disbursements" means keeping track of payments | 16 | | from the Department by a municipality, county, or third party | 17 | | for the limited purpose of tracking previous misallocations. | 18 | | "Third party" means a person, partnership, corporation, or | 19 | | other entity or individual registered to do business in | 20 | | Illinois who contracts with a municipality or county to review | 21 | | financial information related to the disbursement of local | 22 | | taxes by the Department to the municipality or county. | 23 | | Section 5-10. Contracts with third parties. A municipality | 24 | | or county that receives a disbursement of tax proceeds from the | 25 | | Department may contract with a third party for the purpose of |
| | | SB1881 Enrolled | - 3 - | LRB101 10946 AWJ 56120 b |
|
| 1 | | ensuring that the municipality or county receives the correct | 2 | | disbursement from the Department and monitoring disbursements. | 3 | | The third party may not contact the Department on behalf of the | 4 | | municipality or county, but instead must work directly with the | 5 | | municipality or county to acquire financial information. To be | 6 | | eligible to receive financial information from the | 7 | | municipality or county, the third party must: | 8 | | (1) enter into a confidentiality agreement with the | 9 | | municipality or county in the form and manner required by | 10 | | the Department prior to receiving the financial | 11 | | information; | 12 | | (2) have an existing contract with the municipality or | 13 | | county at the time the third party enters into the | 14 | | confidentiality agreement with the municipality or county; | 15 | | a copy of that existing contract must be on file with the | 16 | | Department; | 17 | | (3) abide by the same conditions as the municipality or | 18 | | county with respect to the furnishing of financial | 19 | | information under Section 11 of the Retailers' Occupation | 20 | | Tax Act; and | 21 | | (4) be registered with the Department as required by | 22 | | Section 5-35 of this Act. | 23 | | Section 5-15. Financial information. The third party may | 24 | | use the financial information it receives from the contracting | 25 | | municipality or county only for the purpose of providing |
| | | SB1881 Enrolled | - 4 - | LRB101 10946 AWJ 56120 b |
|
| 1 | | services to the municipality or county as specified in this Act | 2 | | and may not use the information for any other purpose. | 3 | | Electronic data submitted to third parties or by the | 4 | | contracting municipality or county must be accessible only to | 5 | | third parties who have entered into a confidentiality agreement | 6 | | with the municipality or county or who have an existing | 7 | | contract with the municipality or county. | 8 | | Section 5-20. Retention, collection, disclosure, and | 9 | | destruction of financial information. | 10 | | (a) A third party in possession of a taxpayer's financial | 11 | | information must permanently destroy that financial | 12 | | information pursuant to this Act. The financial information | 13 | | shall be destroyed upon the soonest of the following to occur: | 14 | | (1) if the taxpayer is not referred to the Department, | 15 | | within 30 days after receipt of the taxpayer's financial | 16 | | information from either the municipality or county, unless | 17 | | the third party is monitoring disbursements from the | 18 | | Department on an ongoing basis for a municipality or | 19 | | county; or | 20 | | (2) within 30 days after the Department receives a | 21 | | taxpayer audit referral from a third party referring the | 22 | | taxpayer to the Department for additional review. | 23 | | (b) No third party in possession of financial information | 24 | | may sell, lease, trade, market, or otherwise utilize or profit | 25 | | from a taxpayer's financial information, except for a fee as |
| | | SB1881 Enrolled | - 5 - | LRB101 10946 AWJ 56120 b |
|
| 1 | | negotiated by the municipality or county. The fee may be in the | 2 | | form of a contingency fee for a percentage of the amount of | 3 | | additional distributions the municipality or county receives | 4 | | for no more than 3 years following the first disbursement to | 5 | | the municipality or county as a result of the services of the | 6 | | third party under this Act. | 7 | | (c) No third party may permanently or temporarily collect, | 8 | | capture, purchase, use, receive through trade, or otherwise | 9 | | retain a taxpayer's financial information beyond the scope of | 10 | | subsection (a) of this Section. | 11 | | (d) No third party in possession of confidential | 12 | | information may disclose, redisclose, share, or otherwise | 13 | | disseminate a taxpayer's financial information. | 14 | | (e) A third party must dispose of the materials containing | 15 | | financial information in a manner that renders the financial | 16 | | information unreadable, unusable, and undecipherable. Proper | 17 | | disposal methods include, but are not limited to, the | 18 | | following: | 19 | | (1) in the case of paper documents, burning, | 20 | | pulverizing, or shredding so that the information cannot | 21 | | practicably be read or reconstructed; and | 22 | | (2) in the case of electronic media and other non-paper | 23 | | media containing information, destroying or erasing so | 24 | | that information cannot practicably be read, | 25 | | reconstructed, or otherwise utilized by the third party or | 26 | | others. |
| | | SB1881 Enrolled | - 6 - | LRB101 10946 AWJ 56120 b |
|
| 1 | | Section 5-25. Notice of intent to contract; award of | 2 | | contracts. A municipality or county that chooses to contract | 3 | | with a third party pursuant to this Act shall follow all rules | 4 | | set forth in the Illinois Municipal Code or the Counties Code, | 5 | | as applicable, concerning those contracts. | 6 | | Section 5-30. Posting results. Annually, the third party | 7 | | shall provide the municipality or county with a final summary | 8 | | of the review for publication. It is the responsibility of the | 9 | | third party to ensure that this summary includes no personal or | 10 | | identifying information of taxpayers and that all such taxpayer | 11 | | information is kept confidential. If the summary includes any | 12 | | discussion of tax revenue, it shall include only aggregate | 13 | | amounts by tax type, and shall in no way include information | 14 | | about an individual return or an individual taxpayer, even with | 15 | | identifying information redacted. In addition, due to the | 16 | | preliminary nature of such a summary based only on unaudited | 17 | | financial information, no claim of specific tax savings or | 18 | | revenue generation may be made in the summary. | 19 | | Section 5-35. Third party registration. | 20 | | (a) Beginning on January 1, 2021, no person shall engage in | 21 | | business as a third party pursuant to this Act in this State | 22 | | without first having registered with the Department. | 23 | | Application for registration or renewal of registration shall |
| | | SB1881 Enrolled | - 7 - | LRB101 10946 AWJ 56120 b |
|
| 1 | | be made to the Department, by electronic means, in a form and | 2 | | at the time prescribed by the Department. Each applicant for | 3 | | registration or renewal of registration under this Section | 4 | | shall furnish to the Department, in an electronic format | 5 | | established by the Department, the following information: | 6 | | (1) the name and address of the applicant; | 7 | | (2) the address of the location at which the applicant | 8 | | proposes to engage in business as a third party in this | 9 | | State; | 10 | | (3) valid and updated contact information; | 11 | | (4) attestation of good standing to do business in | 12 | | Illinois; | 13 | | (5) a copy of each contract it has entered into with a | 14 | | municipality or county; if an applicant has a contract with | 15 | | a municipality or county prior to the effective date of | 16 | | this Act, a copy of all existing contracts must be | 17 | | provided; | 18 | | (6) an annual certification of process letter that: | 19 | | (A) is signed by an attorney or certified public | 20 | | accountant licensed and authorized to practice in the | 21 | | State of Illinois; | 22 | | (B) contains findings that, after due diligence, | 23 | | the author is of the opinion that: | 24 | | (i) the third party's confidentiality | 25 | | standards for storing encrypted data at rest, | 26 | | using a cryptographic algorithm, conform to the |
| | | SB1881 Enrolled | - 8 - | LRB101 10946 AWJ 56120 b |
|
| 1 | | Federal Information Processing Standard (FIPS) | 2 | | Publication 140-2; | 3 | | (ii) the third party uses multi-factor
| 4 | | authentication;
| 5 | | (iii) the third party uses HTTPS with at least | 6 | | TLS 1.2 or its successor to protect the data files | 7 | | while in transit between a browser and server; | 8 | | (iv) the third party adheres to best practices | 9 | | as recommended by the Open Web Application | 10 | | Security Project (OWASP); | 11 | | (v) the third party has a firewall which | 12 | | protects against unauthorized use of the data; and | 13 | | (vi) the third party shall maintain a physical | 14 | | location in this State at all times; if, at any | 15 | | time, the third party fails to have a physical | 16 | | location in this State, the third party's | 17 | | registration shall be revoked; and | 18 | | (7) such other additional information as the | 19 | | Department may require by rule. | 20 | | The annual registration fee payable to the Department for | 21 | | each third party shall be $15,000. The fee shall be deposited | 22 | | into the Tax Compliance and Administration Fund and shall be | 23 | | used for the cost of administering the certified audit pilot | 24 | | project under Article 10. | 25 | | Each applicant shall pay the fee to the Department at the | 26 | | time of submitting its application or renewal to the |
| | | SB1881 Enrolled | - 9 - | LRB101 10946 AWJ 56120 b |
|
| 1 | | Department. The Department may require an applicant under this | 2 | | Section to electronically file and pay the fee. | 3 | | (b) The following are ineligible to register as a third | 4 | | party under this Act: | 5 | | (1) a person who has been convicted of a felony related | 6 | | to financial crimes under any federal or State law, if the | 7 | | Department, after investigation and a hearing if requested | 8 | | by the applicant, determines that the person has not been | 9 | | sufficiently rehabilitated to warrant the public trust, | 10 | | including an individual or any employee, officer, manager, | 11 | | member, partner, or director of an entity that has been | 12 | | convicted as provided in this paragraph (1); | 13 | | (2) a person, if any employee, contractual employee, | 14 | | officer, manager, or director thereof, or any person or | 15 | | persons owning in the aggregate more than 5% thereof, is | 16 | | employed by or appointed or elected to the corporate | 17 | | authorities of any municipality or county in this State; | 18 | | (3) a person, if any employee, contractual employee, | 19 | | officer, manager, or director thereof, or any person or | 20 | | persons owning in the aggregate more than 5% thereof, is | 21 | | not or would not be eligible to receive a certificate of | 22 | | registration under this Act or a license under the Illinois | 23 | | Public Accounting Act for any reason; | 24 | | (4) a person who is a family member of any person who | 25 | | is employed by or appointed or elected to the corporate | 26 | | authorities of any municipality or county in the State; |
| | | SB1881 Enrolled | - 10 - | LRB101 10946 AWJ 56120 b |
|
| 1 | | (5) a person who is a qualified practitioner, as | 2 | | defined by Section 10-15 of this Act; | 3 | | (6) a third party owned, in whole or in part, by any | 4 | | entity that competes directly or indirectly with any | 5 | | taxpayer whose financial information they are seeking or | 6 | | receiving; and | 7 | | (7) a third party owning in whole or in part, directly | 8 | | or indirectly, any entity that competes, directly or | 9 | | indirectly, with any taxpayer whose financial information | 10 | | they are seeking or receiving. | 11 | | (c) The Department shall begin accepting applications no | 12 | | later than January 1, 2021. Upon receipt of an application and | 13 | | registration fee in proper form from a person who is eligible | 14 | | to register as a third party under this Act, the Department | 15 | | shall issue, within 60 days after receipt of an application, a | 16 | | certificate of registration to such applicant in such form as | 17 | | prescribed by the Department. That certificate of registration | 18 | | shall permit the applicant to whom it is issued to engage in | 19 | | business as a third party under this Act. All certificates of | 20 | | registration issued by the Department under this Section shall | 21 | | be valid for a period not to exceed one year after issuance | 22 | | unless sooner revoked or suspended as provided in this Act. No | 23 | | certificate of registration issued under this Section is | 24 | | transferable or assignable. A person who obtains a certificate | 25 | | of registration as a third party who ceases to do business as | 26 | | specified in the certificate of registration, or who never |
| | | SB1881 Enrolled | - 11 - | LRB101 10946 AWJ 56120 b |
|
| 1 | | commenced business, or whose certificate of registration is | 2 | | suspended or revoked, shall immediately surrender the | 3 | | certificate of registration to the Department. | 4 | | (d) Any person aggrieved by any decision of the Department | 5 | | under this Section may, within 60 days after notice of the | 6 | | decision, protest and request a hearing. Upon receiving a | 7 | | request for a hearing, the Department shall give written notice | 8 | | to the person requesting the hearing of the time and place | 9 | | fixed for the hearing and shall hold a hearing and then issue | 10 | | its final administrative decision in the matter to that person | 11 | | within 60 days after the date of the hearing. In the absence of | 12 | | a protest and request for a hearing within 60 days, the | 13 | | Department's decision shall become final without any further | 14 | | determination being made or notice given. | 15 | | (e) All final decisions by the Department under this | 16 | | Section are subject to judicial review under the provisions of | 17 | | the Administrative Review Law. | 18 | | Section 5-37. Insurance policy requirement. A third party | 19 | | is required to file and maintain in force an insurance policy | 20 | | issued by an insurance company authorized to transact fidelity | 21 | | and surety business in the State of Illinois. The insurance | 22 | | policy shall be for coverage of potential legal claims, | 23 | | including, by not limited to, penalties set forth under Section | 24 | | 5-60, embezzlement, dishonesty, fraud, omissions or errors, or | 25 | | other financial wrongdoing in the course of providing services. |
| | | SB1881 Enrolled | - 12 - | LRB101 10946 AWJ 56120 b |
|
| 1 | | The policy shall be in the form prescribed by the Department in | 2 | | the sum of $500,000. The policy shall be continuous in form and | 3 | | run concurrently with the original and each renewal | 4 | | certification period unless terminated by the insurance | 5 | | company. An insurance company may terminate a policy and avoid | 6 | | further liability by filing a 60-day notice of termination with | 7 | | the Department and at the same time sending the same notice to | 8 | | the licensee. A license shall be canceled on the termination | 9 | | date of the policy unless a new policy is filed with the | 10 | | Department and becomes effective at the termination date of the | 11 | | prior policy. If a policy has been canceled under this Section, | 12 | | the third party must file a new application and will be | 13 | | considered a new applicant if it obtains a new policy. | 14 | | Section 5-40. Revocation or suspension of certification. | 15 | | (a) A contracting municipality or county shall refuse to | 16 | | provide any information, including financial information, to | 17 | | any third party who violates this Act or rules adopted pursuant | 18 | | to this Act or the Retailers' Occupation Tax Act or rules | 19 | | adopted pursuant to the Retailers' Occupation Tax Act. | 20 | | (b) The Department may, after notice and a hearing, revoke | 21 | | or suspend the certificate of registration of any third party | 22 | | for a violation of any provision of this Act, for noncompliance | 23 | | with any provision contained in this Act, or because the | 24 | | Department determines that the third party is ineligible for a | 25 | | certificate of registration for any one or more of the reasons |
| | | SB1881 Enrolled | - 13 - | LRB101 10946 AWJ 56120 b |
|
| 1 | | provided for in Section 5-35 of this Act. The decision whether | 2 | | to suspend or revoke and, if a suspension is in order, the | 3 | | duration of the suspension shall be made by taking into account | 4 | | factors that include but are not limited to, the registrant's | 5 | | previous history of compliance with the Act as of its creation, | 6 | | the number,
seriousness, and duration of the violations, and | 7 | | the registrant's
cooperation in discontinuing and correcting | 8 | | violations.
| 9 | | Section 5-50. Audit referrals; restrictions. | 10 | | (a) Upon entering into a contract with a municipality or | 11 | | county, a third party shall be prohibited from communicating | 12 | | directly or indirectly in any manner with a taxpayer known or | 13 | | believed to be operating within that municipality or county | 14 | | about any matters directly or indirectly related to, or covered | 15 | | by, the contract. | 16 | | (b) If, based on a review of the financial information | 17 | | provided by the Department to a municipality or a county, or | 18 | | provided by a municipality or county to a registered third | 19 | | party, a municipality, county, or third party discovers that | 20 | | local retailers' or service occupation tax may have been | 21 | | underpaid, then it may refer the matter to the Department for a | 22 | | limited-scope audit in accordance with Article 10 of this Act. | 23 | | (c) With respect to taxes administered by the Department, | 24 | | units of local government and third parties are not authorized | 25 | | to (i) access, review, or compel the production of taxpayers' |
| | | SB1881 Enrolled | - 14 - | LRB101 10946 AWJ 56120 b |
|
| 1 | | actual tax returns or (ii) access, review, or compel the | 2 | | production of taxpayers' books and records. | 3 | | (d) With respect to taxes administered by the Department, | 4 | | units of local government and third parties are prohibited from | 5 | | (i) engaging in an audit of any taxpayer, (ii) assessing tax | 6 | | against any taxpayer, (iii) engaging in collection actions | 7 | | against any taxpayer for the tax, or (iv) engaging in any other | 8 | | action related to such taxes that is assigned by law to the | 9 | | Department. | 10 | | (e) A local government shall not share any financial | 11 | | information
received with another local government or another | 12 | | third party. Further, a local government may not share the | 13 | | findings
of a third party with another local government or | 14 | | another third party. | 15 | | Section 5-60. Penalties. | 16 | | (a) Any third party who violates any provision of this Act | 17 | | shall be subject to the penalties set forth in Section 11 of | 18 | | the Retailers' Occupation Tax Act. | 19 | | (b) Any third party who violates Section 5-20 is subject to | 20 | | a civil penalty of not more than $10,000 for each taxpayer with | 21 | | respect to whom financial information is improperly disclosed, | 22 | | profited from, or disposed of in violation of that Section. The | 23 | | Attorney General may impose a civil penalty not to exceed | 24 | | $50,000 for each instance of improper disposal of materials | 25 | | containing financial information. The Attorney General may |
| | | SB1881 Enrolled | - 15 - | LRB101 10946 AWJ 56120 b |
|
| 1 | | impose a civil penalty after notice to the person accused of | 2 | | violating Section 5-20 and an opportunity for that person to be | 3 | | heard in the matter. The Attorney General may file a civil | 4 | | action in the circuit court to recover any penalty imposed for | 5 | | a violation of Section 5-20. In addition to the authority to | 6 | | impose a civil penalty under this Section, the Attorney General | 7 | | may bring an action in the circuit court to remedy a violation | 8 | | of this Section, seeking any appropriate relief. | 9 | | (c) Neither the State nor any municipality or county shall | 10 | | be held liable for the mishandling of information by a third | 11 | | party, including information from the Department or any other | 12 | | financial information of taxpayers. | 13 | | (d) Any taxpayer aggrieved by a violation of this Act shall | 14 | | have a right of action in a State circuit court or as a | 15 | | supplemental claim in federal district court against a third | 16 | | party. A taxpayer may recover for each violation: | 17 | | (1) against a third party that, by gross negligence, | 18 | | violates a provision of this Act, liquidated damages of | 19 | | $5,000 or actual damages, whichever is greater; | 20 | | (2) against a third party that intentionally or | 21 | | recklessly violates a provision of this Act, liquidated | 22 | | damages of $10,000 or actual damages, whichever is greater; | 23 | | (3) reasonable attorney's fees and costs, including | 24 | | expert witness fees and other litigation expenses; and | 25 | | (4) other relief, including an injunction, as the State | 26 | | or federal court may deem appropriate. |
| | | SB1881 Enrolled | - 16 - | LRB101 10946 AWJ 56120 b |
|
| 1 | | Article 10. Local Government Revenue Recapture Certified Audit | 2 | | Pilot Program. | 3 | | Section 10-5. Findings. The General Assembly finds that: | 4 | | (1) Voluntary compliance is the cornerstone of an | 5 | | effective tax system. | 6 | | (2) Despite attempts by the General Assembly, State | 7 | | taxes are not simple. | 8 | | (3) Even the most diligent taxpayers, through mistake | 9 | | or inadvertence, may not pay all taxes due. | 10 | | (4) The Department lacks the resources to audit the | 11 | | compliance of all taxpayers. | 12 | | (5) Illinois certified public accountants provide | 13 | | valuable advice and assistance to Illinois taxpayers on | 14 | | State tax issues. | 15 | | (6) A pilot program establishing a partnership between | 16 | | taxpayers, Illinois certified public accountants, and the | 17 | | Department will provide guidance to taxpayers and enhance | 18 | | voluntary compliance. | 19 | | (7) A pilot project to establish a certified audit | 20 | | program to address underpayment of local occupation and use | 21 | | taxes would address concerns raised by units of local | 22 | | government. | 23 | | Section 10-10. Purpose. The purpose of this Article is to |
| | | SB1881 Enrolled | - 17 - | LRB101 10946 AWJ 56120 b |
|
| 1 | | create a certified audit program under a 5-year pilot project | 2 | | that begins on January 1, 2021 and that is limited in scope to | 3 | | specifically address concerns related to the proper reporting | 4 | | and payment of local occupation and use taxes that are | 5 | | collected and distributed to municipalities and counties by the | 6 | | Department. | 7 | | Section 10-15. Definitions. As used in this Article: | 8 | | "Audit" means an agreed-upon procedures engagement in | 9 | | accordance with Statements on Standards for the Attestation | 10 | | Engagements (AICPA Professional Standards, AT-C Section 315 | 11 | | (Compliance Attest)). | 12 | | "Certification program" means an instructional curriculum, | 13 | | examination, and process for certification, recertification, | 14 | | and revocation of certification of certified public | 15 | | accountants that is administered by the Department with the | 16 | | assistance of the Illinois CPA Society and that is officially | 17 | | approved by the Department to ensure that a certified public | 18 | | accountant possesses the necessary skills and abilities to | 19 | | successfully perform an attestation engagement for a | 20 | | limited-scope tax compliance review in a certified audit | 21 | | project under this Act. | 22 | | "Department" means the Department of Revenue. | 23 | | "Family member" means the following, whether by whole | 24 | | blood, half-blood, or adoption: | 25 | | (1) a parent or step-parent; |
| | | SB1881 Enrolled | - 18 - | LRB101 10946 AWJ 56120 b |
|
| 1 | | (2) a child or step-child; | 2 | | (3) a grandparent or step-grandparent; | 3 | | (4) an aunt, uncle, great-aunt, or great-uncle; | 4 | | (5) a sibling; | 5 | | (6) a spouse or domestic partner; and | 6 | | (7) the spouse or domestic partner of any person | 7 | | referenced in items (1) through (5). | 8 | | "Misallocation" means tax paid by the taxpayer and | 9 | | allocated to one unit of local government that should have been | 10 | | allocated to a different unit of local government. | 11 | | "Misallocation" does not include amounts overpaid by the | 12 | | taxpayer and therefore not owed to any unit of local | 13 | | government, nor amounts underpaid by the taxpayer and therefore | 14 | | not previously allocated to any unit of local government. | 15 | | "Participating taxpayer" means any person subject to the | 16 | | revenue laws administered by the Department who is the subject | 17 | | of a tax compliance referral by a municipality, county, or | 18 | | third party, who enters into an engagement with a qualified | 19 | | practitioner for a limited-scope tax compliance review under | 20 | | this Act, and who is approved by the Department under the local | 21 | | government revenue recapture certified audit pilot project. | 22 | | "Qualified practitioner" means a certified public | 23 | | accountant who is licensed or registered to perform accountancy | 24 | | activities in Illinois under Section 8.05 of the Illinois | 25 | | Public Accounting Act and who has met all requirements for the | 26 | | local government revenue recapture certified audit training |
| | | SB1881 Enrolled | - 19 - | LRB101 10946 AWJ 56120 b |
|
| 1 | | course, achieved the required score on the certification test | 2 | | as approved by the Department, and been certified by the | 3 | | Department. "Qualified practitioner" does not include a third | 4 | | party, as defined by Section 5-5 of this Act, or any employee, | 5 | | contractual employee, officer, manager, or director thereof, | 6 | | any person or persons owning in the aggregate more than 5% of | 7 | | such third party, or a person who is a family member of any | 8 | | person who is employed by or is an appointed or elected member | 9 | | of any corporate authorities, as defined in the Illinois | 10 | | Municipal Code. | 11 | | Section 10-20. Local government revenue recapture | 12 | | certified audit project. | 13 | | (a) The Department shall initiate a certified audit pilot | 14 | | project to further enhance tax compliance reviews performed by | 15 | | qualified practitioners and to encourage taxpayers to hire | 16 | | qualified practitioners at their own expense to review and | 17 | | report on certain aspects of their sales tax and use tax | 18 | | compliance in cases where the Department has notified the | 19 | | taxpayer that it has received a tax compliance referral from a | 20 | | municipality, county, or third party under this Act. The nature | 21 | | of the certified audit work performed by qualified | 22 | | practitioners shall be agreed-upon procedures of a Compliance | 23 | | Attestation in which the Department is the specified user of | 24 | | the resulting report. Qualified practitioners are prohibited | 25 | | from using information obtained from audit manuals, training |
| | | SB1881 Enrolled | - 20 - | LRB101 10946 AWJ 56120 b |
|
| 1 | | materials, or any other materials provided by the Department | 2 | | under this Act for any purpose other than to perform the tax | 3 | | compliance reviews under the certified audit pilot program | 4 | | under this Act. | 5 | | The tax compliance reviews shall be limited in scope and | 6 | | may include only: (i) whether the taxpayer is reporting | 7 | | receipts in the proper jurisdiction; (ii) whether asset | 8 | | purchases by the taxpayer were taxed properly; (iii) an | 9 | | evaluation of sales reported as exempt from tax; (iv) whether | 10 | | the proper tax rate was charged; (v) whether the tax was | 11 | | properly reported as retailers' occupation tax or use tax; and | 12 | | (vi) any other factor that impacts the Department's allocation | 13 | | of sales and use tax revenues to the jurisdiction in which the | 14 | | taxpayer reports sales or use tax. | 15 | | (b) As an incentive for taxpayers to incur the costs of a | 16 | | certified audit, the Department shall abate penalties due on | 17 | | any tax liabilities revealed by a certified audit, except that | 18 | | this authority to abate penalties shall not apply to any | 19 | | liability for taxes that were collected by the participating | 20 | | taxpayer but not remitted to the Department, nor shall the | 21 | | Department have the authority to abate fraud penalties. | 22 | | (c) The certified audit pilot project shall apply only to | 23 | | taxpayers who have been notified that an audit referral has | 24 | | been received by the Department under this Act and only to | 25 | | occupation and use taxes administered and collected by the | 26 | | Department. |
| | | SB1881 Enrolled | - 21 - | LRB101 10946 AWJ 56120 b |
|
| 1 | | (d) The certified audit pilot project shall begin with | 2 | | audit referrals received on and after January 1, 2021. Upon | 3 | | obtaining proper certification, qualified practitioners may | 4 | | initiate certified audits beginning January 1, 2021. | 5 | | Section 10-25. Practitioner responsibilities. Any | 6 | | practitioner responsible for planning, directing, or | 7 | | conducting a certified audit or reporting on a participating | 8 | | taxpayer's tax compliance shall be a qualified practitioner. | 9 | | For purposes of this Section, a qualified practitioner is | 10 | | responsible for: | 11 | | (1) planning a certified audit when performing work | 12 | | that involves determining the objectives, scope, and | 13 | | methodology of the certified audit, when establishing | 14 | | criteria to evaluate matters subject to the review as part | 15 | | of the certified audit, when gathering information used in | 16 | | planning the certified audit, or when coordinating the | 17 | | certified audit with the Department; | 18 | | (2) directing a certified audit when the work involves | 19 | | supervising the efforts or reviewing the work of others to | 20 | | determine whether it is properly accomplished and | 21 | | complete; | 22 | | (3) conducting a certified audit when performing tests | 23 | | and procedures or field audit work necessary to accomplish | 24 | | the audit objectives in accordance with applicable | 25 | | professional standards; |
| | | SB1881 Enrolled | - 22 - | LRB101 10946 AWJ 56120 b |
|
| 1 | | (4) reporting on a participating taxpayer's tax | 2 | | compliance in a certified audit when determining report | 3 | | contents and substance or reviewing reports for technical | 4 | | content and substance prior to issuance; and | 5 | | (5) answering questions by Department review staff, | 6 | | answering questions raised by the Informal Conference | 7 | | Board, and testifying in any administrative or court | 8 | | proceeding regarding the audit or report. | 9 | | Section 10-30. Local government revenue recapture audit | 10 | | referral. | 11 | | (a) A third party shall not refer a taxpayer to the | 12 | | Department for audit consideration unless the third party is | 13 | | registered with the Department pursuant to Section 5-35. | 14 | | (b) If, based on a review of the financial information | 15 | | provided by the Department to a municipality or county, or | 16 | | provided by a municipality or county to a registered third | 17 | | party, the municipality or county discovers that a taxpayer may | 18 | | have underpaid local retailers' or service occupation taxes, | 19 | | then it may refer the matter to the Department for audit | 20 | | consideration. The tax compliance referral may be made only by | 21 | | the municipality, county, or third party and shall be made in | 22 | | the form and manner required by the Department, including any | 23 | | requirement that the referral be submitted electronically. The | 24 | | tax compliance referral shall, at a minimum, include proof of | 25 | | registration as a third party, a copy of a contract between the |
| | | SB1881 Enrolled | - 23 - | LRB101 10946 AWJ 56120 b |
|
| 1 | | third party and the county or municipality, the taxpayer's | 2 | | name, Department account identification number, mailing | 3 | | address, and business location, and the specific reason for the | 4 | | tax compliance referral, including as much detail as possible. | 5 | | (c) The Department shall complete its evaluation of all | 6 | | audit referrals under this Act within 60 days after receipt of | 7 | | the referral and shall handle all audit referrals as follows: | 8 | | (1) the Department shall evaluate the referral to | 9 | | determine whether it is sufficient to warrant further | 10 | | action based on the information provided in the referral, | 11 | | any other information the Department possesses, and audit | 12 | | selection procedures of the Department; | 13 | | (2) if the Department determines that the referral is | 14 | | not actionable, then the Department shall notify the local | 15 | | government that it has evaluated the referral and has | 16 | | determined that no action
is deemed necessary and provide | 17 | | the local government with an explanation for that decision; | 18 | | (3) if the Department determines that the referral is | 19 | | actionable, then it shall determine whether the taxpayer is | 20 | | currently under audit or scheduled for audit; | 21 | | (A) if the taxpayer is not currently under audit or | 22 | | scheduled for audit, the Department shall determine | 23 | | whether it will schedule the taxpayer for audit; and | 24 | | (B) if the taxpayer is not under audit by the | 25 | | Department or scheduled for audit by the Department and | 26 | | the Department decides to schedule the taxpayer for |
| | | SB1881 Enrolled | - 24 - | LRB101 10946 AWJ 56120 b |
|
| 1 | | audit, then the Department shall notify the taxpayer | 2 | | that the Department has received an actionable audit | 3 | | referral on the taxpayer and issue a notice to the | 4 | | taxpayer as provided under subsection (d) of this | 5 | | Section. | 6 | | (d) The notice to the taxpayer required by subparagraph (B) | 7 | | of paragraph (3) of subsection (c) shall include, but not be | 8 | | limited to, the following: | 9 | | (1) that the taxpayer must either: (A) engage a | 10 | | qualified practitioner, at
the taxpayer's expense, to | 11 | | complete a certified audit, limited in scope to the | 12 | | taxpayer's Retailers' Occupation Tax, Use Tax, Service | 13 | | Occupation Tax, or Service Use Tax liability, and the | 14 | | taxpayer's liability for any local retailers' or service | 15 | | occupation tax administered by the Department; or (B) be | 16 | | subject to audit by the Department; | 17 | | (2) that, as an incentive, for taxpayers who agree to | 18 | | the limited-scope certified audit, the Department shall | 19 | | abate penalties as provided in Section 10-20; and | 20 | | (3) A statement that reads: "[INSERT THE NAME OF THE | 21 | | ELECTED CHIEF EXECUTIVE OF THE CORPORATE AUTHORITY] has | 22 | | contracted with [INSERT THIRD PARTY] to review your | 23 | | Retailers' Occupation Tax, Use Tax, Service Occupation | 24 | | Tax, Service Use Tax, and any local retailers' or service | 25 | | occupation taxes reported to the Illinois Department of | 26 | | Revenue ("Department"). [INSERT THE NAME OF THE ELECTED |
| | | SB1881 Enrolled | - 25 - | LRB101 10946 AWJ 56120 b |
|
| 1 | | CHIEF EXECUTIVE OF THE CORPORATE AUTHORITY] and [INSERT THE | 2 | | THIRD PARTY] have selected and referred your business to | 3 | | the Department for a certified audit of your Retailers' | 4 | | Occupation Tax, Use Tax, Service Occupation Tax, Service | 5 | | Use Tax, and any local retailers' or service occupation | 6 | | taxes reported to the Department pursuant to the Local | 7 | | Government Revenue Recapture Act. The purpose of the audit | 8 | | is to verify that your business
reported and submitted the | 9 | | proper Retailers' Occupation Tax, Use Tax, Service | 10 | | Occupation Tax, Service Use Tax, and any local retailers' | 11 | | or service occupation taxes administered by the | 12 | | Department. The Department is required to disclose your | 13 | | confidential financial information to [INSERT THE NAME OF | 14 | | THE ELECTED CHIEF EXECUTIVE OF THE CORPORATE AUTHORITY] and | 15 | | [INSERT THE THIRD PARTY]. Additional information can be | 16 | | accessed from the Department's website and publications | 17 | | for a basic overview of your rights as a Taxpayer. If you | 18 | | have questions regarding your business's referral to the | 19 | | Department for audit, please contact [CORPORATE | 20 | | AUTHORITY'S] mayor, village president, or any other person | 21 | | serving as [CORPORATE AUTHORITY'S] chief executive officer | 22 | | or chief financial officer. [INSERT THIRD PARTY] is | 23 | | prohibited from discussing this matter with you directly or | 24 | | indirectly in any manner regardless of who initiates the | 25 | | contact. If [INSERT THIRD PARTY] contacts you, please | 26 | | contact the Department.".
|
| | | SB1881 Enrolled | - 26 - | LRB101 10946 AWJ 56120 b |
|
| 1 | | (e) Within 90 days after notice by the Department, the | 2 | | taxpayer must respond by stating in writing whether it will or | 3 | | will not arrange for the performance of a certified audit under | 4 | | this Act. If the taxpayer states that it will arrange for the | 5 | | performance of a certified audit, then it must do so within 60 | 6 | | days after responding to the Department or within 90 days after | 7 | | notice by the Department, whichever comes first. If the | 8 | | taxpayer states that it will not arrange for the performance of | 9 | | a certified audit or if the taxpayer does not arrange for the | 10 | | performance of a certified audit within 180 days after notice | 11 | | by the Department, then the Department may schedule the | 12 | | taxpayer for audit by the Department. | 13 | | (f) The certified audit must not be a contingent-fee | 14 | | engagement and must be completed in accordance with this | 15 | | Article 10. | 16 | | Section 10-35. Notification by qualified practitioner. | 17 | | (a) A qualified practitioner hired by a taxpayer who elects | 18 | | to perform a certified audit under Section 10-30 shall notify | 19 | | the Department of an engagement to perform a certified audit | 20 | | and shall provide the Department with the information the | 21 | | Department deems necessary to identify the taxpayer, to confirm | 22 | | that the taxpayer is not already under audit by the Department, | 23 | | and to establish the basic nature of the taxpayer's business | 24 | | and the taxpayer's potential exposure to Illinois occupation | 25 | | and use tax laws. The information provided in the notification |
| | | SB1881 Enrolled | - 27 - | LRB101 10946 AWJ 56120 b |
|
| 1 | | shall be submitted in the form and manner required by the | 2 | | Department and shall include the taxpayer's name, federal | 3 | | employer identification number or social security number, | 4 | | Department account identification number, mailing address, and | 5 | | business location, and the specific occupation and use taxes | 6 | | and period proposed to be covered by the engagement for the | 7 | | certified audit. In addition, the notice shall include the | 8 | | name, address, identification number, contact person, and | 9 | | telephone number of the engaged firm. An engagement for a | 10 | | qualified practitioner to perform a certified audit under this | 11 | | Act shall not be authorized by the Department unless the | 12 | | taxpayer received notice from the Department under | 13 | | subparagraph (b) of paragraph (3) of subsection (c) of Section | 14 | | 10-30. | 15 | | (b) If the taxpayer has received notice of an audit | 16 | | referral from the Department and has not been issued a written | 17 | | notice of intent to conduct an audit, the taxpayer shall be a | 18 | | participating taxpayer and the Department shall so advise the | 19 | | qualified practitioner in writing within 10 days after receipt | 20 | | of the engagement notice. However, the Department may exclude a | 21 | | taxpayer from a certified audit or may limit the taxes or | 22 | | periods subject to the certified audit on the basis that: (i) | 23 | | the Department has previously conducted an audit; (ii) the | 24 | | Department is in the process of conducting an investigation or | 25 | | other examination of the taxpayer's records; (iii) the taxpayer | 26 | | has already been referred to the Department pursuant to Section |
| | | SB1881 Enrolled | - 28 - | LRB101 10946 AWJ 56120 b |
|
| 1 | | 10-30 and the Department determined an audit referral is not | 2 | | actionable; (iv) the Department or a qualified practitioner has | 3 | | previously conducted an audit under Section 10-30 of this Act; | 4 | | or (v) for just cause. | 5 | | (c) Within 30 days after receipt of the notice of | 6 | | qualification from the Department under subsection (b), the | 7 | | qualified practitioner shall contact the Department and | 8 | | submit, for review and agreement by the Department, a proposed | 9 | | audit plan and procedures. The Department may extend the time | 10 | | for submission of the plan and procedures for reasonable cause. | 11 | | The qualified practitioner shall initiate action to advise the | 12 | | Department that amendment or modification of the plan and | 13 | | procedures is necessary if the qualified practitioner's | 14 | | inspection reveals that the taxpayer's circumstances or | 15 | | exposure to the revenue laws is substantially different from | 16 | | those described in the engagement notice. | 17 | | Section 10-40. Audit performance and review. | 18 | | (a) Upon the Department's designation of the agreed-upon | 19 | | procedures to be followed by a practitioner in a certified | 20 | | audit, the qualified practitioner shall perform the engagement | 21 | | and shall timely submit a completed report to the Department in | 22 | | the form and manner required by the Department and professional | 23 | | standards. The report shall affirm completion of the | 24 | | agreed-upon procedures and shall provide any required | 25 | | disclosures. |
| | | SB1881 Enrolled | - 29 - | LRB101 10946 AWJ 56120 b |
|
| 1 | | (b) The Department shall review the report of the certified | 2 | | audit and shall accept it when it is determined to be complete | 3 | | by the qualified practitioner. Once the report is accepted by | 4 | | the Department, the Department shall issue a notice of proposed | 5 | | assessment reflecting the determination of any additional | 6 | | liability reflected in the report and shall provide the | 7 | | taxpayer with all the normal payment, protest, and appeal | 8 | | rights with respect to the liability, including the right to a | 9 | | review by the Informal Conference Board. In cases in which the | 10 | | report indicates an overpayment has been made, the taxpayer | 11 | | shall submit a properly executed claim for credit or refund to | 12 | | the Department. Otherwise, the certified audit report is a | 13 | | final and conclusive determination with respect to the tax and | 14 | | period covered. No additional assessment may be made by the | 15 | | Department for the specific taxes and period referenced in the | 16 | | report, except upon a showing of fraud or material | 17 | | misrepresentation. This determination shall not prevent the | 18 | | Department from collecting liabilities not covered by the | 19 | | report or from conducting an audit or investigation and making | 20 | | an assessment for additional tax, penalty, or interest for any | 21 | | tax or period not covered by the report. | 22 | | (c) A notice of proposed assessment issued by the | 23 | | Department under this Act is subject to the statute of | 24 | | limitations for assessments under the Retailers' Occupation | 25 | | Tax Act, the Use Tax Act, the Service Occupation Tax Act, the | 26 | | Service Use Tax Act, and any local retailers' or service |
| | | SB1881 Enrolled | - 30 - | LRB101 10946 AWJ 56120 b |
|
| 1 | | occupation tax, as appropriate, and local taxes collected on | 2 | | assessments issued shall be allocated to units of local | 3 | | government for the full period of the statute of limitations in | 4 | | accordance with those Acts and any applicable local retailers' | 5 | | or service occupation tax Act. The Department shall provide | 6 | | notice in writing to the municipality or county and the third | 7 | | party, if applicable, of any audit findings, determinations, or | 8 | | collections once finalized. | 9 | | Claims for credit or refund filed by taxpayers under this | 10 | | Act are subject to the statute of limitations under the | 11 | | Retailers' Occupation Tax Act, the Use Tax Act, the Service | 12 | | Occupation Tax Act, the Service Use Tax Act, and any local | 13 | | retailers' or service occupation tax Act, as appropriate, and | 14 | | any credit or refund of local taxes allowed to the taxpayer | 15 | | shall be de-allocated from units of local government for the | 16 | | full period of the statute of limitations in accordance with | 17 | | those Acts and any applicable local retailers' or service | 18 | | occupation tax Act. | 19 | | With respect to misallocations discovered under this Act, | 20 | | the Department shall increase or decrease the amount allocated | 21 | | to a unit of local government by an amount necessary to offset | 22 | | any misallocation of previous disbursements. The offset amount | 23 | | shall be the amount erroneously disbursed within the previous 6 | 24 | | months from the time a misallocation is discovered. | 25 | | (d) Under no circumstances may a person, including a | 26 | | municipality or county or third party, other than the person |
| | | SB1881 Enrolled | - 31 - | LRB101 10946 AWJ 56120 b |
|
| 1 | | audited and his or her attorney, have any right to participate | 2 | | in an appeal or other proceeding regarding the audit, | 3 | | participate in settlement negotiations, challenge the validity | 4 | | of any settlement between the Department and any person, or | 5 | | review any materials, other than financial information as | 6 | | otherwise provided in this Act, that are subject to the | 7 | | confidentiality provisions of the underlying tax Act. In | 8 | | addition, the Department's determination of whether to audit a | 9 | | taxpayer or the result of the audit creates no justiciable | 10 | | cause of action, and any adjudication related to this program | 11 | | is limited to the taxpayer's rights in an administrative | 12 | | hearing held by the Department, an administrative hearing held | 13 | | by the Illinois Independent Tax Tribunal, or related to | 14 | | payments made under protest as provided in Section 2a.1 of the | 15 | | State Officers and Employees Money Disposition Act, as | 16 | | appropriate. | 17 | | Section 10-45. Rules. To implement the certified audit | 18 | | project, the Department shall have authority to adopt rules, | 19 | | including, but not limited to: | 20 | | (1) rules concerning the availability of the | 21 | | certification program required for participation in the | 22 | | project; | 23 | | (2) rules concerning the requirements and basis for | 24 | | establishing just cause for approval or rejection of | 25 | | participation by taxpayers; |
| | | SB1881 Enrolled | - 32 - | LRB101 10946 AWJ 56120 b |
|
| 1 | | (3) rules setting forth procedures for assessment, | 2 | | collection, and payment of liabilities or refund of | 3 | | overpayments and provisions for taxpayers to obtain | 4 | | informal and formal review of certified audit results; | 5 | | (4) rules concerning the nature, frequency, and basis | 6 | | for the Department's review of certified audits conducted | 7 | | by qualified practitioners, including the requirements for | 8 | | documentation, work-paper retention and access, and | 9 | | reporting; and | 10 | | (5) rules setting forth requirements for conducting | 11 | | certified audits and for review of agreed-upon procedures. | 12 | | Article 900. Amendatory Provisions. | 13 | | Section 900-5. The Retailers' Occupation Tax Act is amended | 14 | | by changing Section 11 as follows:
| 15 | | (35 ILCS 120/11) (from Ch. 120, par. 450)
| 16 | | Sec. 11. All information received by the Department from | 17 | | returns filed
under this Act, or from any investigation | 18 | | conducted under this Act, shall
be confidential, except for | 19 | | official purposes, and any person , including a third party as | 20 | | defined in the Local Government Revenue Recapture Act, who | 21 | | divulges
any such information in any manner, except in | 22 | | accordance with a proper
judicial order or as otherwise | 23 | | provided by law, including the Local Government Revenue |
| | | SB1881 Enrolled | - 33 - | LRB101 10946 AWJ 56120 b |
|
| 1 | | Recapture Act, shall be guilty of a Class
B misdemeanor with a | 2 | | fine not to exceed $7,500.
| 3 | | Nothing in this Act prevents the Director of Revenue from | 4 | | publishing or
making available to the public the names and | 5 | | addresses of persons filing
returns under this Act, or | 6 | | reasonable statistics concerning the operation
of the tax by | 7 | | grouping the contents of returns so the information in any
| 8 | | individual return is not disclosed.
| 9 | | Nothing in this Act prevents the Director of Revenue from | 10 | | divulging to
the United States Government or the government of | 11 | | any other state, or any
officer or agency thereof, for | 12 | | exclusively official purposes, information
received by the | 13 | | Department in administering this Act, provided that such
other | 14 | | governmental agency agrees to divulge requested tax | 15 | | information to
the Department.
| 16 | | The Department's furnishing of information derived from a | 17 | | taxpayer's
return or from an investigation conducted under this | 18 | | Act to the surety on a
taxpayer's bond that has been furnished | 19 | | to the Department under this Act,
either to provide notice to | 20 | | such surety of its potential liability under
the bond or, in | 21 | | order to support the Department's demand for payment from
such | 22 | | surety under the bond, is an official purpose within the | 23 | | meaning of
this Section.
| 24 | | The furnishing upon request of information obtained by the | 25 | | Department
from returns filed under this Act or investigations | 26 | | conducted under this
Act to the Illinois Liquor Control |
| | | SB1881 Enrolled | - 34 - | LRB101 10946 AWJ 56120 b |
|
| 1 | | Commission for official use is deemed to
be an official purpose | 2 | | within the meaning of this Section.
| 3 | | Notice to a surety of potential liability shall not be | 4 | | given unless the
taxpayer has first been notified, not less | 5 | | than 10 days prior thereto, of
the Department's intent to so | 6 | | notify the surety.
| 7 | | The furnishing upon request of the Auditor General, or his | 8 | | authorized agents,
for official use, of returns filed and | 9 | | information related thereto under
this Act is deemed to be an | 10 | | official purpose within the meaning of this
Section.
| 11 | | Where an appeal or a protest has been filed on behalf of a | 12 | | taxpayer, the
furnishing upon request of the attorney for the | 13 | | taxpayer of returns filed
by the taxpayer and information | 14 | | related thereto under this Act is deemed
to be an official | 15 | | purpose within the meaning of this Section.
| 16 | | The furnishing of financial information to a municipality | 17 | | or county, upon request of the chief executive officer thereof, | 18 | | is an official purpose within the meaning of this Section,
| 19 | | provided the municipality or county agrees in
writing to the | 20 | | requirements of this Section. Information provided to | 21 | | municipalities and counties under this paragraph shall be | 22 | | limited to: (1) the business name; (2) the business address; | 23 | | (3) the standard classification number assigned to the | 24 | | business; (4) net revenue distributed to the requesting | 25 | | municipality or county that is directly related to the | 26 | | requesting municipality's or county's local share of the |
| | | SB1881 Enrolled | - 35 - | LRB101 10946 AWJ 56120 b |
|
| 1 | | proceeds under the Use Tax Act, the Service Use Tax Act, the | 2 | | Service Occupation Tax Act, and the Retailers' Occupation Tax | 3 | | Act distributed from the Local Government Tax Fund, and, if | 4 | | applicable, any locally imposed retailers' occupation tax or | 5 | | service occupation tax; and (5) a listing of all businesses | 6 | | within the requesting municipality or county by account | 7 | | identification number and address. On and after July 1, 2015, | 8 | | the furnishing of financial information to municipalities and | 9 | | counties under this paragraph may be by electronic means. If | 10 | | the Department may furnish financial information to a | 11 | | municipality or county under this paragraph, then the chief | 12 | | executive officer of the municipality or county may, in turn, | 13 | | provide that financial information to a third party pursuant to | 14 | | the Local Government Revenue Recapture Act. However, the third | 15 | | party shall agree in writing to the requirements of this | 16 | | Section and meet the requirements of the Local Government | 17 | | Revenue Recapture Act.
| 18 | | Information so provided shall be subject to all | 19 | | confidentiality provisions
of this Section. The written | 20 | | agreement shall provide for reciprocity,
limitations on | 21 | | access, disclosure, and procedures for requesting information. | 22 | | For the purposes of furnishing financial information to a | 23 | | municipality or county under this Section, "chief executive | 24 | | officer" means the mayor of a city, the village board president | 25 | | of a village, the mayor or president of an incorporated town, | 26 | | the county executive of a county that has adopted the county |
| | | SB1881 Enrolled | - 36 - | LRB101 10946 AWJ 56120 b |
|
| 1 | | executive form of government, the president of the board of | 2 | | commissioners of Cook County, or the chairperson of the county | 3 | | board or board of county commissioners of any other county.
| 4 | | The Department may make available to the Board of Trustees | 5 | | of any Metro
East Mass Transit District information contained | 6 | | on transaction reporting
returns required to be filed under | 7 | | Section 3 of this Act that report sales made
within the | 8 | | boundary of the taxing authority of that Metro East Mass | 9 | | Transit
District, as provided in Section 5.01 of the Local Mass | 10 | | Transit District Act.
The disclosure shall be made pursuant to | 11 | | a written agreement between the
Department and the Board of | 12 | | Trustees of a Metro East Mass Transit District,
which is an | 13 | | official purpose within the meaning of this Section. The | 14 | | written
agreement between the Department and the Board of | 15 | | Trustees of a Metro East
Mass Transit District shall provide | 16 | | for reciprocity, limitations on access,
disclosure, and | 17 | | procedures for requesting information. Information so provided
| 18 | | shall be subject to all confidentiality provisions of this | 19 | | Section.
| 20 | | The Director may make available to any State agency, | 21 | | including the
Illinois Supreme Court, which licenses persons to | 22 | | engage in any occupation,
information that a person licensed by | 23 | | such agency has failed to file
returns under this Act or pay | 24 | | the tax, penalty and interest shown therein,
or has failed to | 25 | | pay any final assessment of tax, penalty or interest due
under | 26 | | this Act.
The Director may make available to any State agency, |
| | | SB1881 Enrolled | - 37 - | LRB101 10946 AWJ 56120 b |
|
| 1 | | including the Illinois
Supreme
Court, information regarding | 2 | | whether a bidder, contractor, or an affiliate of a
bidder or
| 3 | | contractor has failed to collect and remit Illinois Use tax on | 4 | | sales into
Illinois, or any tax
under this Act or pay the tax, | 5 | | penalty, and interest shown therein, or has
failed to pay any
| 6 | | final assessment of tax, penalty, or interest due under this | 7 | | Act, for the
limited purpose of
enforcing bidder and contractor | 8 | | certifications. The Director may make available
to units
of | 9 | | local government and school districts that require bidder and | 10 | | contractor
certifications,
as set forth in Sections 50-11 and | 11 | | 50-12 of the Illinois Procurement Code,
information
regarding | 12 | | whether a bidder, contractor, or an affiliate of a bidder or
| 13 | | contractor has failed
to collect and remit Illinois Use tax on | 14 | | sales into Illinois, file returns under
this Act, or
pay the | 15 | | tax, penalty, and interest shown therein, or has failed to pay | 16 | | any final
assessment
of tax, penalty, or interest due under | 17 | | this Act, for the limited purpose of
enforcing bidder
and | 18 | | contractor certifications. For purposes of this Section, the | 19 | | term
"affiliate" means any
entity that (1) directly, | 20 | | indirectly, or constructively controls another
entity,
(2) is | 21 | | directly,
indirectly, or constructively controlled by another | 22 | | entity, or (3) is subject
to
the control of
a common entity. | 23 | | For purposes of this Section, an entity controls another
entity
| 24 | | if it owns,
directly or individually, more than 10% of the | 25 | | voting securities of that
entity.
As used in
this Section, the | 26 | | term "voting security" means a security that (1) confers upon
|
| | | SB1881 Enrolled | - 38 - | LRB101 10946 AWJ 56120 b |
|
| 1 | | the holder
the right to vote for the election of members of the | 2 | | board of directors or
similar governing
body of the business or | 3 | | (2) is convertible into, or entitles the holder to
receive upon | 4 | | its
exercise, a security that confers such a right to vote. A | 5 | | general partnership
interest is a
voting security.
| 6 | | The Director may make available to any State agency, | 7 | | including the
Illinois
Supreme Court, units of local | 8 | | government, and school districts, information
regarding
| 9 | | whether a bidder or contractor is an affiliate of a person who | 10 | | is not
collecting
and
remitting Illinois Use taxes for the | 11 | | limited purpose of enforcing bidder and
contractor
| 12 | | certifications.
| 13 | | The Director may also make available to the Secretary of | 14 | | State
information that a limited liability company, which has | 15 | | filed articles of
organization with the Secretary of State, or | 16 | | corporation which has been
issued a certificate of | 17 | | incorporation by the Secretary of State has failed to
file | 18 | | returns under this Act or pay the tax, penalty and interest | 19 | | shown therein,
or has failed to pay any final assessment of | 20 | | tax, penalty or interest due under
this Act. An assessment is | 21 | | final when all proceedings in court for review of
such | 22 | | assessment have terminated or the time for the taking thereof | 23 | | has expired
without such proceedings being instituted.
| 24 | | The Director shall make available for public inspection in | 25 | | the Department's
principal office and for publication, at cost, | 26 | | administrative decisions issued
on or after January 1, 1995. |
| | | SB1881 Enrolled | - 39 - | LRB101 10946 AWJ 56120 b |
|
| 1 | | These decisions are to be made available in a
manner so that | 2 | | the following taxpayer information is not disclosed:
| 3 | | (1) The names, addresses, and identification numbers | 4 | | of the taxpayer,
related entities, and employees.
| 5 | | (2) At the sole discretion of the Director, trade | 6 | | secrets
or other confidential information identified as | 7 | | such by the taxpayer, no later
than 30 days after receipt | 8 | | of an administrative decision, by such means as the
| 9 | | Department shall provide by rule.
| 10 | | The Director shall determine the appropriate extent of the | 11 | | deletions allowed
in paragraph (2). In the event the taxpayer | 12 | | does not submit deletions, the
Director shall make only the | 13 | | deletions specified in paragraph (1).
| 14 | | The Director shall make available for public inspection and | 15 | | publication an
administrative decision within 180 days after | 16 | | the issuance of the
administrative decision. The term | 17 | | "administrative decision" has the same
meaning as defined in | 18 | | Section 3-101 of Article III of the Code of Civil
Procedure. | 19 | | Costs collected under this Section shall be paid into the Tax
| 20 | | Compliance and Administration Fund.
| 21 | | Nothing contained in this Act shall prevent the Director | 22 | | from divulging
information to any person pursuant to a request | 23 | | or authorization made by the
taxpayer or by an authorized | 24 | | representative of the taxpayer.
| 25 | | (Source: P.A. 98-1058, eff. 1-1-15; 99-517, eff. 6-30-16.)
|
|