103RD GENERAL ASSEMBLY
State of Illinois
2023 and 2024
HB2087

 

Introduced 2/7/2023, by Rep. Anthony DeLuca

 

SYNOPSIS AS INTRODUCED:
 
30 ILCS 115/2  from Ch. 85, par. 612
35 ILCS 5/901

    Amends the Illinois Income Tax Act. Provides that the following amounts shall be deposited into the Local Government Distributive Fund as the revenue is realized from the specified taxes: (i) 8% of the net revenue realized from the tax imposed under the Act upon individuals, trusts, and estates; (ii) 8% of the net revenue realized from the tax imposed by the Act upon electing pass-through entities; and (iii) 9.11% of the net revenue realized from the tax imposed by the Act upon corporations. Amends the State Revenue Sharing Act to provide that amounts paid into the Local Government Distributive Fund are appropriated on a continuing basis. Effective July 1, 2023.


LRB103 25068 HLH 51403 b

 

 

A BILL FOR

 

HB2087LRB103 25068 HLH 51403 b

1    AN ACT concerning revenue.
 
2    Be it enacted by the People of the State of Illinois,
3represented in the General Assembly:
 
4    Section 5. The State Revenue Sharing Act is amended by
5changing Section 2 as follows:
 
6    (30 ILCS 115/2)  (from Ch. 85, par. 612)
7    Sec. 2. Allocation and Disbursement.
8    (a) As soon as may be after the first day of each month,
9the Department of Revenue shall allocate among the several
10municipalities and counties of this State the amount available
11in the Local Government Distributive Fund and in the Income
12Tax Surcharge Local Government Distributive Fund, determined
13as provided in Sections 1 and 1a above. Except as provided in
14Sections 13 and 13.1 of this Act, the Department shall then
15certify such allocations to the State Comptroller, who shall
16pay over to the several municipalities and counties the
17respective amounts allocated to them. The amount of such Funds
18allocable to each such municipality and county shall be in
19proportion to the number of individual residents of such
20municipality or county to the total population of the State,
21determined in each case on the basis of the latest census of
22the State, municipality or county conducted by the Federal
23government and certified by the Secretary of State and for

 

 

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1annexations to municipalities, the latest Federal, State or
2municipal census of the annexed area which has been certified
3by the Department of Revenue. Allocations to the City of
4Chicago under this Section are subject to Section 6 of the
5Hotel Operators' Occupation Tax Act. For the purpose of this
6Section, the number of individual residents of a county shall
7be reduced by the number of individuals residing therein in
8municipalities, but the number of individual residents of the
9State, county and municipality shall reflect the latest census
10of any of them. The amounts transferred into the Local
11Government Distributive Fund pursuant to Section 9 of the Use
12Tax Act, Section 9 of the Service Use Tax Act, Section 9 of the
13Service Occupation Tax Act, and Section 3 of the Retailers'
14Occupation Tax Act, each as now or hereafter amended, pursuant
15to the amendments of such Sections by Public Act 85-1135,
16shall be distributed as provided in said Sections.
17    (b) It is the intent of the General Assembly that
18allocations made under this Section shall be made in a fair and
19equitable manner. Accordingly, the clerk of any municipality
20to which territory has been annexed, or from which territory
21has been disconnected, shall notify the Department of Revenue
22in writing of that annexation or disconnection and shall (1)
23state the number of residents within the territory that was
24annexed or disconnected, based on the last census conducted by
25the federal, State, or municipal government and certified by
26the Illinois Secretary of State, and (2) furnish therewith a

 

 

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1certified copy of the plat of annexation or, in the case of
2disconnection, the ordinance, final judgment, or resolution of
3disconnection together with an accurate depiction of the
4territory disconnected. The county in which the annexed or
5disconnected territory is located shall verify that the number
6of residents stated on the written notice that is to be sent to
7the Department of Revenue is true and accurate. The verified
8statement of the county shall accompany the written notice.
9However, if the county does not respond to the municipality's
10request for verification within 30 days, this verification
11requirement shall be waived. The written notice shall be
12provided to the Department of Revenue (1) within 30 days after
13the effective date of this amendatory Act of the 96th General
14Assembly for disconnections occurring after January 1, 2007
15and before the effective date of this amendatory Act of the
1696th General Assembly or (2) within 30 days after the
17annexation or disconnection for annexations or disconnections
18occurring on or after the effective date of this amendatory
19Act of the 96th General Assembly. For purposes of this
20Section, a disconnection or annexation through court order is
21deemed to be effective 30 days after the entry of a final
22judgment order, unless stayed pending appeal. Thereafter, the
23monthly allocation made to the municipality and to any other
24municipality or county affected by the annexation or
25disconnection shall be adjusted in accordance with this
26Section to reflect the change in residency of the residents of

 

 

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1the territory that was annexed or disconnected. The adjustment
2shall be made no later than 30 days after the Department of
3Revenue's receipt of the written notice of annexation or
4disconnection described in this Section.
5    (c) All amounts paid into the Local Government
6Distributive Fund in accordance with this Section and
7allocated pursuant to this Act are appropriated on a
8continuing basis.
9(Source: P.A. 96-1040, eff. 7-14-10.)
 
10    Section 10. The Illinois Income Tax Act is amended by
11changing Section 901 as follows:
 
12    (35 ILCS 5/901)
13    Sec. 901. Collection authority.
14    (a) In general. The Department shall collect the taxes
15imposed by this Act. The Department shall collect certified
16past due child support amounts under Section 2505-650 of the
17Department of Revenue Law of the Civil Administrative Code of
18Illinois. Except as provided in subsections (b), (c), (e),
19(f), (g), and (h) of this Section, money collected pursuant to
20subsections (a) and (b) of Section 201 of this Act shall be
21paid into the General Revenue Fund in the State treasury;
22money collected pursuant to subsections (c) and (d) of Section
23201 of this Act shall be paid into the Personal Property Tax
24Replacement Fund, a special fund in the State Treasury; and

 

 

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1money collected under Section 2505-650 of the Department of
2Revenue Law of the Civil Administrative Code of Illinois shall
3be paid into the Child Support Enforcement Trust Fund, a
4special fund outside the State Treasury, or to the State
5Disbursement Unit established under Section 10-26 of the
6Illinois Public Aid Code, as directed by the Department of
7Healthcare and Family Services.
8    (b) Local Government Distributive Fund.
9    Beginning August 1, 2017 and continuing through July 31,
102022, the Treasurer shall transfer each month from the General
11Revenue Fund to the Local Government Distributive Fund an
12amount equal to the sum of: (i) 6.06% (10% of the ratio of the
133% individual income tax rate prior to 2011 to the 4.95%
14individual income tax rate after July 1, 2017) of the net
15revenue realized from the tax imposed by subsections (a) and
16(b) of Section 201 of this Act upon individuals, trusts, and
17estates during the preceding month; (ii) 6.85% (10% of the
18ratio of the 4.8% corporate income tax rate prior to 2011 to
19the 7% corporate income tax rate after July 1, 2017) of the net
20revenue realized from the tax imposed by subsections (a) and
21(b) of Section 201 of this Act upon corporations during the
22preceding month; and (iii) beginning February 1, 2022, 6.06%
23of the net revenue realized from the tax imposed by subsection
24(p) of Section 201 of this Act upon electing pass-through
25entities.
26    Beginning August 1, 2022 and until June 30, 2023, the

 

 

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1Treasurer shall transfer each month from the General Revenue
2Fund to the Local Government Distributive Fund an amount equal
3to the sum of: (i) 6.16% of the net revenue realized from the
4tax imposed by subsections (a) and (b) of Section 201 of this
5Act upon individuals, trusts, and estates during the preceding
6month; (ii) 6.85% of the net revenue realized from the tax
7imposed by subsections (a) and (b) of Section 201 of this Act
8upon corporations during the preceding month; and (iii) 6.16%
9of the net revenue realized from the tax imposed by subsection
10(p) of Section 201 of this Act upon electing pass-through
11entities.
12    Beginning July 1, 2023, the following amounts shall be
13deposited into the Local Government Distributive Fund as the
14revenue is realized from the specified taxes: (i) 8% of the net
15revenue realized from the tax imposed by subsections (a) and
16(b) of Section 201 of this Act upon individuals, trusts, and
17estates; (ii) 8% of the net revenue realized from the tax
18imposed by subsection (p) of Section 201 of this Act upon
19electing pass-through entities; and (iii) 9.11% of the net
20revenue realized from the tax imposed by subsections (a) and
21(b) of Section 201 of this Act upon corporations.
22    Net revenue realized for a month shall be defined as the
23revenue from the tax imposed by subsections (a) and (b) of
24Section 201 of this Act which is deposited in the General
25Revenue Fund, the Education Assistance Fund, the Income Tax
26Surcharge Local Government Distributive Fund, the Fund for the

 

 

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1Advancement of Education, and the Commitment to Human Services
2Fund during the month minus the amount paid out of the General
3Revenue Fund in State warrants during that same month as
4refunds to taxpayers for overpayment of liability under the
5tax imposed by subsections (a) and (b) of Section 201 of this
6Act.
7    Notwithstanding any provision of law to the contrary,
8beginning on July 6, 2017 (the effective date of Public Act
9100-23), those amounts required under this subsection (b) to
10be transferred by the Treasurer into the Local Government
11Distributive Fund from the General Revenue Fund shall be
12directly deposited into the Local Government Distributive Fund
13as the revenue is realized from the tax imposed by subsections
14(a) and (b) of Section 201 of this Act.
15    (c) Deposits Into Income Tax Refund Fund.
16        (1) Beginning on January 1, 1989 and thereafter, the
17    Department shall deposit a percentage of the amounts
18    collected pursuant to subsections (a) and (b)(1), (2), and
19    (3) of Section 201 of this Act into a fund in the State
20    treasury known as the Income Tax Refund Fund. Beginning
21    with State fiscal year 1990 and for each fiscal year
22    thereafter, the percentage deposited into the Income Tax
23    Refund Fund during a fiscal year shall be the Annual
24    Percentage. For fiscal year 2011, the Annual Percentage
25    shall be 8.75%. For fiscal year 2012, the Annual
26    Percentage shall be 8.75%. For fiscal year 2013, the

 

 

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1    Annual Percentage shall be 9.75%. For fiscal year 2014,
2    the Annual Percentage shall be 9.5%. For fiscal year 2015,
3    the Annual Percentage shall be 10%. For fiscal year 2018,
4    the Annual Percentage shall be 9.8%. For fiscal year 2019,
5    the Annual Percentage shall be 9.7%. For fiscal year 2020,
6    the Annual Percentage shall be 9.5%. For fiscal year 2021,
7    the Annual Percentage shall be 9%. For fiscal year 2022,
8    the Annual Percentage shall be 9.25%. For fiscal year
9    2023, the Annual Percentage shall be 9.25%. For all other
10    fiscal years, the Annual Percentage shall be calculated as
11    a fraction, the numerator of which shall be the amount of
12    refunds approved for payment by the Department during the
13    preceding fiscal year as a result of overpayment of tax
14    liability under subsections (a) and (b)(1), (2), and (3)
15    of Section 201 of this Act plus the amount of such refunds
16    remaining approved but unpaid at the end of the preceding
17    fiscal year, minus the amounts transferred into the Income
18    Tax Refund Fund from the Tobacco Settlement Recovery Fund,
19    and the denominator of which shall be the amounts which
20    will be collected pursuant to subsections (a) and (b)(1),
21    (2), and (3) of Section 201 of this Act during the
22    preceding fiscal year; except that in State fiscal year
23    2002, the Annual Percentage shall in no event exceed 7.6%.
24    The Director of Revenue shall certify the Annual
25    Percentage to the Comptroller on the last business day of
26    the fiscal year immediately preceding the fiscal year for

 

 

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1    which it is to be effective.
2        (2) Beginning on January 1, 1989 and thereafter, the
3    Department shall deposit a percentage of the amounts
4    collected pursuant to subsections (a) and (b)(6), (7), and
5    (8), (c) and (d) of Section 201 of this Act into a fund in
6    the State treasury known as the Income Tax Refund Fund.
7    Beginning with State fiscal year 1990 and for each fiscal
8    year thereafter, the percentage deposited into the Income
9    Tax Refund Fund during a fiscal year shall be the Annual
10    Percentage. For fiscal year 2011, the Annual Percentage
11    shall be 17.5%. For fiscal year 2012, the Annual
12    Percentage shall be 17.5%. For fiscal year 2013, the
13    Annual Percentage shall be 14%. For fiscal year 2014, the
14    Annual Percentage shall be 13.4%. For fiscal year 2015,
15    the Annual Percentage shall be 14%. For fiscal year 2018,
16    the Annual Percentage shall be 17.5%. For fiscal year
17    2019, the Annual Percentage shall be 15.5%. For fiscal
18    year 2020, the Annual Percentage shall be 14.25%. For
19    fiscal year 2021, the Annual Percentage shall be 14%. For
20    fiscal year 2022, the Annual Percentage shall be 15%. For
21    fiscal year 2023, the Annual Percentage shall be 14.5%.
22    For all other fiscal years, the Annual Percentage shall be
23    calculated as a fraction, the numerator of which shall be
24    the amount of refunds approved for payment by the
25    Department during the preceding fiscal year as a result of
26    overpayment of tax liability under subsections (a) and

 

 

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1    (b)(6), (7), and (8), (c) and (d) of Section 201 of this
2    Act plus the amount of such refunds remaining approved but
3    unpaid at the end of the preceding fiscal year, and the
4    denominator of which shall be the amounts which will be
5    collected pursuant to subsections (a) and (b)(6), (7), and
6    (8), (c) and (d) of Section 201 of this Act during the
7    preceding fiscal year; except that in State fiscal year
8    2002, the Annual Percentage shall in no event exceed 23%.
9    The Director of Revenue shall certify the Annual
10    Percentage to the Comptroller on the last business day of
11    the fiscal year immediately preceding the fiscal year for
12    which it is to be effective.
13        (3) The Comptroller shall order transferred and the
14    Treasurer shall transfer from the Tobacco Settlement
15    Recovery Fund to the Income Tax Refund Fund (i)
16    $35,000,000 in January, 2001, (ii) $35,000,000 in January,
17    2002, and (iii) $35,000,000 in January, 2003.
18    (d) Expenditures from Income Tax Refund Fund.
19        (1) Beginning January 1, 1989, money in the Income Tax
20    Refund Fund shall be expended exclusively for the purpose
21    of paying refunds resulting from overpayment of tax
22    liability under Section 201 of this Act and for making
23    transfers pursuant to this subsection (d), except that in
24    State fiscal years 2022 and 2023, moneys in the Income Tax
25    Refund Fund shall also be used to pay one-time rebate
26    payments as provided under Sections 208.5 and 212.1.

 

 

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1        (2) The Director shall order payment of refunds
2    resulting from overpayment of tax liability under Section
3    201 of this Act from the Income Tax Refund Fund only to the
4    extent that amounts collected pursuant to Section 201 of
5    this Act and transfers pursuant to this subsection (d) and
6    item (3) of subsection (c) have been deposited and
7    retained in the Fund.
8        (3) As soon as possible after the end of each fiscal
9    year, the Director shall order transferred and the State
10    Treasurer and State Comptroller shall transfer from the
11    Income Tax Refund Fund to the Personal Property Tax
12    Replacement Fund an amount, certified by the Director to
13    the Comptroller, equal to the excess of the amount
14    collected pursuant to subsections (c) and (d) of Section
15    201 of this Act deposited into the Income Tax Refund Fund
16    during the fiscal year over the amount of refunds
17    resulting from overpayment of tax liability under
18    subsections (c) and (d) of Section 201 of this Act paid
19    from the Income Tax Refund Fund during the fiscal year.
20        (4) As soon as possible after the end of each fiscal
21    year, the Director shall order transferred and the State
22    Treasurer and State Comptroller shall transfer from the
23    Personal Property Tax Replacement Fund to the Income Tax
24    Refund Fund an amount, certified by the Director to the
25    Comptroller, equal to the excess of the amount of refunds
26    resulting from overpayment of tax liability under

 

 

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1    subsections (c) and (d) of Section 201 of this Act paid
2    from the Income Tax Refund Fund during the fiscal year
3    over the amount collected pursuant to subsections (c) and
4    (d) of Section 201 of this Act deposited into the Income
5    Tax Refund Fund during the fiscal year.
6        (4.5) As soon as possible after the end of fiscal year
7    1999 and of each fiscal year thereafter, the Director
8    shall order transferred and the State Treasurer and State
9    Comptroller shall transfer from the Income Tax Refund Fund
10    to the General Revenue Fund any surplus remaining in the
11    Income Tax Refund Fund as of the end of such fiscal year;
12    excluding for fiscal years 2000, 2001, and 2002 amounts
13    attributable to transfers under item (3) of subsection (c)
14    less refunds resulting from the earned income tax credit,
15    and excluding for fiscal year 2022 amounts attributable to
16    transfers from the General Revenue Fund authorized by
17    Public Act 102-700 this amendatory Act of the 102nd
18    General Assembly.
19        (5) This Act shall constitute an irrevocable and
20    continuing appropriation from the Income Tax Refund Fund
21    for the purposes of (i) paying refunds upon the order of
22    the Director in accordance with the provisions of this
23    Section and (ii) paying one-time rebate payments under
24    Sections 208.5 and 212.1.
25    (e) Deposits into the Education Assistance Fund and the
26Income Tax Surcharge Local Government Distributive Fund. On

 

 

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1July 1, 1991, and thereafter, of the amounts collected
2pursuant to subsections (a) and (b) of Section 201 of this Act,
3minus deposits into the Income Tax Refund Fund, the Department
4shall deposit 7.3% into the Education Assistance Fund in the
5State Treasury. Beginning July 1, 1991, and continuing through
6January 31, 1993, of the amounts collected pursuant to
7subsections (a) and (b) of Section 201 of the Illinois Income
8Tax Act, minus deposits into the Income Tax Refund Fund, the
9Department shall deposit 3.0% into the Income Tax Surcharge
10Local Government Distributive Fund in the State Treasury.
11Beginning February 1, 1993 and continuing through June 30,
121993, of the amounts collected pursuant to subsections (a) and
13(b) of Section 201 of the Illinois Income Tax Act, minus
14deposits into the Income Tax Refund Fund, the Department shall
15deposit 4.4% into the Income Tax Surcharge Local Government
16Distributive Fund in the State Treasury. Beginning July 1,
171993, and continuing through June 30, 1994, of the amounts
18collected under subsections (a) and (b) of Section 201 of this
19Act, minus deposits into the Income Tax Refund Fund, the
20Department shall deposit 1.475% into the Income Tax Surcharge
21Local Government Distributive Fund in the State Treasury.
22    (f) Deposits into the Fund for the Advancement of
23Education. Beginning February 1, 2015, the Department shall
24deposit the following portions of the revenue realized from
25the tax imposed upon individuals, trusts, and estates by
26subsections (a) and (b) of Section 201 of this Act, minus

 

 

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1deposits into the Income Tax Refund Fund, into the Fund for the
2Advancement of Education:
3        (1) beginning February 1, 2015, and prior to February
4    1, 2025, 1/30; and
5        (2) beginning February 1, 2025, 1/26.
6    If the rate of tax imposed by subsection (a) and (b) of
7Section 201 is reduced pursuant to Section 201.5 of this Act,
8the Department shall not make the deposits required by this
9subsection (f) on or after the effective date of the
10reduction.
11    (g) Deposits into the Commitment to Human Services Fund.
12Beginning February 1, 2015, the Department shall deposit the
13following portions of the revenue realized from the tax
14imposed upon individuals, trusts, and estates by subsections
15(a) and (b) of Section 201 of this Act, minus deposits into the
16Income Tax Refund Fund, into the Commitment to Human Services
17Fund:
18        (1) beginning February 1, 2015, and prior to February
19    1, 2025, 1/30; and
20        (2) beginning February 1, 2025, 1/26.
21    If the rate of tax imposed by subsection (a) and (b) of
22Section 201 is reduced pursuant to Section 201.5 of this Act,
23the Department shall not make the deposits required by this
24subsection (g) on or after the effective date of the
25reduction.
26    (h) Deposits into the Tax Compliance and Administration

 

 

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1Fund. Beginning on the first day of the first calendar month to
2occur on or after August 26, 2014 (the effective date of Public
3Act 98-1098), each month the Department shall pay into the Tax
4Compliance and Administration Fund, to be used, subject to
5appropriation, to fund additional auditors and compliance
6personnel at the Department, an amount equal to 1/12 of 5% of
7the cash receipts collected during the preceding fiscal year
8by the Audit Bureau of the Department from the tax imposed by
9subsections (a), (b), (c), and (d) of Section 201 of this Act,
10net of deposits into the Income Tax Refund Fund made from those
11cash receipts.
12(Source: P.A. 101-8, see Section 99 for effective date;
13101-10, eff. 6-5-19; 101-81, eff. 7-12-19; 101-636, eff.
146-10-20; 102-16, eff. 6-17-21; 102-558, eff. 8-20-21; 102-658,
15eff. 8-27-21; 102-699, eff. 4-19-22; 102-700, eff. 4-19-22;
16102-813, eff. 5-13-22; revised 8-2-22.)
 
17    Section 99. Effective date. This Act takes effect July 1,
182023.