The Latest Regulatory & Legislative News for Illinois CPAs
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Capitol Dispatch
Marty Green's Legislative Update
JUNE: Successful Spring Legislative Session Sets Tone for Summer
The Illinois General Assembly adjourned its spring session on May 31, marking the first time since 2014 that the House and Senate passed a state operating budget as scheduled. The governor, legislative leaders, and caucus budgeteers worked together to pass the budget and prioritize legislation. Over 600 pieces of legislation were passed prior to adjournment and will be transmitted to the governor for action.

The Illinois CPA Society had a good legislative session with the successful passage of a legislative remedy authorizing small units of local government to submit audited financial statements using cash basis accounting to the comptroller's Local Government Division. Another successful ICPAS initiative was killing legislation that would have authorized the Illinois Department of Revenue to submit confidential taxpayer information to third-party vendors for contingent fee audits of sales tax payments by businesses. We will keep you informed of the governor’s actions on legislative items of interest.
General Bills Tax Bills Public Acts GA Updates
Illinois FY 2019 State Operating Budget Passed
HB 109 sets the FY 2019 state operating budget at $38.5 billion, an increase of $600 million from the current year’s. The budget provides increases of $350 million in K-12 education and $120 million to municipalities. HB 3342, the Budget Implementation Bill, contains statutory changes needed to implement the budget, extends the for-profit hospital income tax credit, expands the definition of retailer maintaining a place of business in this state, includes a new tax credit for adoption expenses, and extends the tax credit for natural disasters for the 2018 tax year. See additional background here. Status: HB 109 is Public Act 100-586; HB 3342 is Public Act 100-587.
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Campaign Committee Audits Bill Advances
SB 2223 provides that a political committee notified by the State Board of Elections to conduct an audit of its financial records must conduct that audit using financial records maintained by the committee for a period of two years from the close of the most recent reporting period. Status: Passed and pending governor's action.
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Credit Union Audits Bill Advances to Governor
HB 5497 provides that a credit union may furnish the financial records of a member to an appropriate law enforcement officer. Also makes technical and quantitative changes to Sec. 34 of the Act with regards to the supervisory committee of the credit union regarding audit requirements. Status: Passed and pending governor's action.
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ABLE Account Legislative Updates
HB 4754 provides that on the death of a designated beneficiary, proceeds from the ABLE account may be transferred to the estate of a designated beneficiary, or to an account for another eligible individual specified by the designated beneficiary or the estate of the designated beneficiary. Amends the Trusts and Trustees Act to provide that the court, or a person with a disability, may irrevocably assign resources of that person to either or both if certain criteria are met. SB 1246 adds funds invested in an ABLE Account as defined by Sec. 529 of the IRC to the list of personal property that is exempt from judgment, attachment, or distress. Status: Passed and pending governor’s action.
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Revised Uniform Unclaimed Property Act Amended
HB 3806 changes the time and circumstances under which financial organization deposits are considered abandoned and extends the reporting date of certain reported renewable deposits. Also enhances the state treasurer’s enforcement and oversight of the Act. Status: Passed both Houses; pending for concurrence of Senate amendments.
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House Passes Non-Binding Resolution for Graduated Income Tax
HR 1025 supports moving Illinois from a flat tax to a graduated tax. This resolution expresses the desire of the House along partisan lines and does not start the process of amending the Illinois Constitution, which would require both Chambers to pass a Joint Resolution Constitutional Amendment by a three-fifths vote for the measure to appear on the ballot for Illinois voters to consider. Status: Resolution adopted.
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Penalties in Play for Poor Book and Record Keeping
SB 3141 imposes a penalty on retailers that fail to keep books and records or produce them when requested by the Illinois Department of Revenue for examination. The legislation includes escalated penalties for offense(s) and affirmative defenses if taxpayers can demonstrate business care and prudence. Applies to the Cigarette Tax Act, the Cigarette Use Tax, and the Tobacco Products Tax Act. Status: Passed both Houses.
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Federal SALT Workaround Credit Fails to Advance
HB 4237 provides a $10,000 SALT credit against income and property tax liabilities of 90 percent of the donated amounts. Alternatively, SB 3238 (HA-1) added the provision for the Illinois Department of Revenue to seek guidance from the IRS verifying contributions would qualify as charitable contributions. Status: Neither HB 4237 or SB 3238 passed. The IRS has issued Notice 2018-54, "Payments made in Exchange for State and Local Tax Credits."
Bill Strengthens Legislative Sexual Harassment Investigations
HB 138 closes loopholes to the existing Legislative Inspector General Act with regards to the process of investigating allegations of sexual harassment against a member of the General Assembly, legislative staffer, or lobbyist. The bill makes the legislative inspector general a full-time position, lengthens the time which a victim of sexual harassment may file a complaint with the Illinois Department of Human Rights, and toughens harassment training for Illinois State Legislators and staff. Status: Public Act 100-588.
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CPA License Renewal Nears
Illinois CPA licenses and registrations expire Sept. 30, 2018. CPAs were sent an email renewal notice from the Illinois Department of Financial and Professional Regulation ( with online renewal instructions and your renewal PIN.
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Illinois Opportunity Zones Certified
The Federal Tax Cuts and Jobs Act of 2017 provided for the establishment of Opportunity Zones for private, tax-free investment in low income areas with economic need. The federal government certified Gov. Rauner's recommended opportunity zones that cover 85 counties throughout the state.
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Free DOL Employer Retirement Plan Compliance Seminar
The U.S. Department of Labor will host a free seminar for small businesses on fiduciary responsibilities and retirement plan compliance on July 8 at the Ralph H. Metcalfe Federal Building in Chicago. Advance registration is required.
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High Court Overturns Internet Sales Tax Standard
In South Dakota v. Wayfair Inc., the U.S. Supreme Court overturned the Quill physical presence standard and adopted an economic presence standard requiring out-of-state sellers to collect and remit sales tax if specified criteria are met. In anticipation of the court's ruling, the Illinois General Assembly amended the Illinois Use Tax and the Service Use Tax that mirrors the nexus standard in Public Act 100-587 (p. 457).
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Illinois Senator to Lead National Council of State Legislatures
Illinois State Sen. Toi Hutchinson, (D-40, Olympia Fields) will ascend to the presidency of the National Council of State Legislatures. NCSL is a bipartisan organization providing research, technical assistance, and opportunities for policymakers to exchange ideas on the most pressing state issues. Sen. Hutchinson serves as the Chairperson of the Senate Revenue Committee and has worked closely with the Illinois CPA Society on tax policy issues as outlined in the AICPA Advocate. The Illinois CPA Society extends our congratulations to Senator Hutchinson on this new leadership position and our appreciation for her stewardship.
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CPAs Must Get Up To Speed On Harassment
When workplace harassment goes overlooked, victims and organizations suffer the consequences.
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Illinois' Late Payments and Interest Penalties Report Issued
Comptroller Susana Mendoza recently released a special report on late payments and interest penalties the state has incurred as a result of the budget impasse. The report highlights that during the past two-and-a-half years, Illinois has built up late payment interest penalties totaling $100 million more than it paid in the previous 18 years combined.
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