(50 ILCS 45/1)
Sec. 1.
Short title.
This Act may be cited as the
Local Government Taxpayers’ Bill of Rights Act.
(Source: P.A. 91-920, eff. 1-1-01.)
(50 ILCS 45/5)
Sec. 5.
Legislative declaration.
It is the intent of
the General Assembly that this legislation grant
various rights and protections to taxpayers and tax collectors with
respect to the administration and enforcement of local government
tax laws. The provisions of this Act are
designed to reduce the burden on both taxpayers and tax collectors by
specifically providing that fair and consistent tax processes and
procedures be adopted and disseminated to taxpayers at the local
level while at the same time preserving local government’s full
authority to collect taxes lawfully due under their taxing ordinances.
This legislation also provides
taxpayers a minimum level of consistency with regard to the
assessment and collection of local taxes as they do business
in multiple locations within this State.
The General Assembly further finds that tax systems are
largely based on voluntary compliance and self-assessment and
the development of understandable tax laws. Providing clear
tax laws at the local level and providing all necessary due
process rights in the collection and enforcement of local tax
laws will only serve to improve voluntary compliance and
self-assessment of local government taxes.
(Source: P.A. 91-920, eff. 1-1-01.)
(50 ILCS 45/10)
Sec. 10. Application and home rule preemption. The
limitations provided by this Act shall take precedence over
any provision of any tax ordinance imposed by a unit of local
government, as defined in this Act, in Illinois, including without limitation any tax authorized under Section 8-11-2 of the Illinois Municipal Code.
Consistent with the limitations provided by this Act, a municipality, other than a municipality having a population greater than 1,000,000, may not impose any penalty with respect to a tax authorized by Section 8-11-2 of the Illinois Municipal Code or with respect to an audit authorized by Section 8-11-2.5 of the Illinois Municipal Code, except as specified in Sections 50, 55, and 60 of this Act.
This Act is a denial and limitation of home rule powers
and functions under subsection (g) of Section 6 of Article
VII of the Illinois Constitution.
(Source: P.A. 96-1422, eff. 8-3-10.)
(50 ILCS 45/15)
Sec. 15.
Definitions.
In this Act:
“Locally imposed and administered tax” means a tax
imposed by a unit of local government that is collected or
administered by a unit of local government and not an agency
or Department of the State. A “locally imposed and
administered tax” does not include a tax imposed upon real
property under the Property Tax Code or fees collected by a
unit of local government other than infrastructure
maintenance fees.
“Local tax administrator” includes directors of local
government departments of revenue or taxation, or other local
government officers charged with the administration or
collection of a locally imposed and administered tax,
including their staffs, employees, or agents to the extent
they are authorized by a local tax administrator to act in
the local tax administrator’s stead.
“Unit of local government” includes a municipality, a
county, or a home rule unit of this State, but does not
include (i) home rule municipalities with a population
greater than 1,000,000 and (ii) home rule counties with a
population greater than 3,000,000 that have locally
administered departments or bureaus of revenue.
(Source: P.A. 91-920, eff. 1-1-01.)
(50 ILCS 45/20)
Sec. 20.
Responsibilities of units of local
government. Each unit of local government shall have the
powers and obligations enumerated in the following Sections
to protect the rights of the taxpayers.
(Source: P.A. 91-920, eff. 1-1-01.)
(50 ILCS 45/25)
Sec. 25.
Application of payments.
Taxpayers have the
right to know how tax payments and remittances covered by
this Act will be applied to the tax liability owed to units
of local government. Each unit of local government must
provide, by ordinance, for the order of application of tax
payments to tax liability, penalty, and interest, provided
that in no case may a payment be applied to penalties due
before it is applied to tax or interest. In the event that a
unit of local government does not provide for application of
payments, any payment or remittance received for a tax period
will be applied first to tax for the period, then to interest
due for the period, and then to penalties due for the period.
(Source: P.A. 91-920, eff. 1-1-01.)
(50 ILCS 45/30)
Sec. 30.
Statute of limitations.
Units of local
government have an obligation to review tax returns in a
timely manner and issue any determination of tax due as
promptly as possible so that taxpayers may make timely
corrections of future returns and minimize any interest
charges applied to tax underpayments. Each unit of local
government must provide appropriate statutes of limitation
for the determination and assessment of taxes covered by this
Act, provided, however, that a statute of limitations may not
exceed the following:
- (1) No notice of determination of tax due or assessment may be issued more than 4 years after the end of the calendar year for which the return for the period was filed or the end of the calendar year in which the return for the period was due, whichever occurs later.
- (2) If any tax return was not filed or if during any 4-year period for which a notice of tax determination or assessment may be issued by the unit of local government the tax paid or remitted was less than 75% of the tax due for that period, the statute of limitations shall be no more than 6 years after the end of the calendar year in which the return for the period was due or the end of the calendar year in which the return for the period was filed, whichever occurs later. In the event that a unit of local government fails to provide a statute of limitations, the maximum statutory period provided in this Section applies.
This Section does not place any limitation on a unit of
local government if a fraudulent tax return is filed.
(Source: P.A. 91-920, eff. 1-1-01.)
(50 ILCS 45/35)
Sec. 35. Audit procedures. Taxpayers have the right
to be treated by officers, employees, and agents of the local
tax administrator with courtesy, fairness, uniformity,
consistency, and common sense. This Section applies to any audit of a tax imposed by a unit of local government other than a municipality having a population greater than 1,000,000, except to the extent otherwise provided in Section 8-11-2.5 of the Illinois Municipal Code. Taxpayers must be notified in
writing by the local jurisdiction of a proposed audit of the taxpayer’s books and
records clearly identifying who will be conducting the audit. For audits being conducted by third-party providers, the local jurisdiction must provide written authorization for the third-party provider to review the books and records of the taxpayer. No contact may be made by the third-party provider until the local-jurisdiction authorization is received by the taxpayer. The notice of audit must specify the tax and time
period to be audited and must detail the minimum
documentation or books and records to be made available to
the auditor. Audits must be held only during reasonable
times of the day and, unless impracticable, at times agreed
to by the taxpayer. The auditor must sign a confidentiality agreement upon request by the taxpayer. Upon the completion of the audit, the local jurisdiction must issue an audit closure report to the taxpayer with the results of the audit. An auditor who determines that there has
been an overpayment of tax during the course of the audit is
obligated to identify the overpayment to the taxpayer so that
the taxpayer can take the necessary steps to recover the
overpayment. If the overpayment is the result of the application
of some or all of the taxpayer’s tax payment to an incorrect
local government entity, then upon request by a unit of local government, the audit information must be given to any unit of local government that may be affected by an overpayment.
(Source: P.A. 96-1422, eff. 8-3-10.)
(50 ILCS 45/40)
Sec. 40.
Appeals process.
Units of local government
have an obligation to provide, by ordinance, a procedure for
appealing a determination of tax due or an assessment.
Local governments must provide to taxpayers a written statement of
rights whenever the local government issues a
protestable notice of tax due,
a bill, a claim denial, or a notice of claim reduction
regarding any tax. The statement must explain the reason for
the assessment, the amount of the tax liability proposed, the
procedure for appealing the assessment, and the obligations
of the unit of local government during the audit, appeal,
refund, and collection process. In no event may a taxpayer
be provided a time period less than 45 days after the date
the notice was served in which to protest a notice of tax
determination or notice of tax liability. Any notice of tax
assessment due must be sent by United States registered or certified mail.
The unit of local
government must also adopt procedures for opening up any
closed protest period or extending the protest period upon
the showing of reasonable cause by the taxpayer and full payment of the
contested tax liability along with interest accrued as of the due date of the
tax.
(Source: P.A. 91-920, eff. 1-1-01.)
(50 ILCS 45/45)
Sec. 45.
Interest.
Units of local government must
provide, by ordinance, for the amount of interest, if any, to
be assessed on a late payment, underpayment, or nonpayment of
tax.
(Source: P.A. 91-920, eff. 1-1-01.)
(50 ILCS 45/50)
Sec. 50.
Late filing penalties.
Late filing
penalties may not exceed 5% of the amount of tax required to
be shown as due on a return. A late
filing penalty may not apply if a failure to file penalty is
imposed by the unit of local government. A local tax
administrator may determine that the late filing was due to
reasonable cause and abate the penalty.
(Source: P.A. 91-920, eff. 1-1-01.)
(50 ILCS 45/55)
Sec. 55.
Late payment penalty.
Late payment
penalties may not exceed 5% of the tax due and not timely
paid or remitted to the unit of local government. This
penalty shall not apply if a failure to file penalty is
imposed by the unit of local government. A local tax
administrator may determine that the late payment was due to
reasonable cause and abate the penalty.
(Source: P.A. 91-920, eff. 1-1-01.)
(50 ILCS 45/60)
Sec. 60.
Failure to file penalty.
If no return is
filed before the issuance of a notice of tax deficiency or of
tax liability to the taxpayer, any failure to file penalty
may not exceed 25% of the total tax due for the applicable
reporting period for which the return was required to have
been filed. A local tax administrator may determine that the
failure to file a return was due to reasonable cause and
abate the penalty.
(Source: P.A. 91-920, eff. 1-1-01.)
(50 ILCS 45/65)
Sec. 65.
Credits and refunds.
Units of local government shall provide a
procedure for claiming a credit or refund of taxes, interest, or penalties paid
in error. No units of local government are required to refund or credit any
taxes voluntarily paid without written protest at the time of payment in the
event that a local government tax is declared invalidly enacted or
unconstitutional by a court of competent jurisdiction. A taxpayer shall not be
deemed to have paid a tax voluntarily if the taxpayer lacked knowledge of the
facts upon which to protest the taxes at the time of payment or if the taxpayer
paid the taxes under duress. Unless the corporate authorities of a unit of
local government expressly adopt a shorter statute of limitations for a
particular tax, a statute of limitations on a claim for credit or refund may
not be less than 4 years after the end of the calendar year in which payment or
remittance in error was made. No unit of local government shall be required to
grant a credit or refund of taxes, interest, or penalties to a person who has
not paid or remitted the amounts directly to the unit of local government.
Units of local government must provide, by ordinance, a rate of interest for
overpayment of tax.
(Source: P.A. 91-920, eff. 1-1-01.)
(50 ILCS 45/70)
Sec. 70.
Installment contracts.
If a local
government tax ordinance or a local tax administrator allows
installment payment agreements for delinquent tax amounts,
the local tax administrator may not cancel any installment
contract unless the taxpayer fails to pay any amount due on
time and fails to cure the delinquency in the allowable time
supplied by the local tax administrator, or fails to
demonstrate good faith in restructuring any installment plan
agreement or contract with the local tax administrator.
(Source: P.A. 91-920, eff. 1-1-01.)
(50 ILCS 45/75)
Sec. 75.
Voluntary disclosure.
For any tax for which
a taxpayer has not received a written notice of an audit, investigation, or
assessment from the local tax administrator, a taxpayer is
entitled to file an application with the local tax
administrator for a voluntary disclosure of the tax due. A
taxpayer filing a voluntary disclosure application must agree
to pay the amount of tax due, along with interest of one
percent per month, for all periods prior to the filing of the
application but not more than 4 years before the date of
filing the application. Except for the amount of tax and
interest due under this Section, a taxpayer filing a valid
voluntary disclosure application may not be liable for any
additional tax, interest, or penalty for any period before
the date the application was filed, provided, however, that
if the taxpayer incorrectly determined and underpaid the
amount of tax due as provided in this Section, the taxpayer
is liable for the underpaid tax along with applicable
interest on the underpaid tax, unless the underpayment was
the result of fraud on the part of the taxpayer, in which
case the application shall be deemed invalid and void. The
payment of tax and interest required under this Section must
be made within 90 days after the filing of the voluntary
disclosure application or the date agreed to by the local tax
administrator, whichever is longer, except that any
additional amounts owed as a result of an underpayment of tax
and interest previously paid under this Section must be paid
within 90 days after a final determination and the exhaustion
of all appeals of the additional amount owed or the date
agreed to by the local tax administrator, whichever is
longer.
(Source: P.A. 91-920, eff. 1-1-01.)
(50 ILCS 45/80)
Sec. 80.
Criminal penalties.
Criminal
penalties may not be imposed on taxpayers for non-compliance
with the provisions of a locally administered tax unless the
non-compliance is a result of willful or fraudulent disregard of
the local tax laws.
(Source: P.A. 91-920, eff. 1-1-01.)
(50 ILCS 45/85)
Sec. 85.
Review of liens.
The local tax
administrator must establish an internal review process
concerning liens against taxpayers. If the lien is determined
to be improper, the local tax administrator must remove the lien at local
government’s own expense, correct the taxpayer’s credit record, and correct any
public disclosure of the improperly imposed lien.
(Source: P.A. 91-920, eff. 1-1-01.)
(50 ILCS 45/90)
Sec. 90.
Publication of tax ordinances.
Each unit of
local government that imposes one or more locally administered taxes by
ordinance must publish and make copies of those taxing ordinances
readily available to the public upon request.
Posting of the tax ordinances on the Internet satisfies the publication
requirement of this Section.
(Source: P.A. 91-920, eff. 1-1-01.)
(50 ILCS 45/99)
Sec. 99.
Effective date.
This Act takes effect on January 1, 2001.
(Source: P.A. 91-920, eff. 1-1-01.)