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email Doug October 22, 2008 |
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The Illinois Chamber of
Commerce Tax Institute 10th Anniversary Tax
law drives to the bottom line: business entities are threatened every year by
tax law initiatives or regulatory interpretations that are adverse to
business. The Illinois Chamber Tax Institute is the first line of defense
because their professional, knowledgeable and dedicated members understand
the risks and implications of doing nothing. The
Tax Institute has single-handedly saved Illinois employers billions of
dollars by defeating or mitigating business tax increases proposed by our
state lawmakers and bureaucrats. The members’ thoughtful, informed,
detailed approach to reasonable, rational and professional analysis and
critique of proposed laws and regulations on behalf of Illinois employers
means better tax law has been written. The
Tax Institute is an invaluable resource for Illinois Chamber of Commerce
members, including many trade associations and other business organizations
that may not have their own tax experts. The Illinois Chamber is the best
coalition builder in Springfield and the Tax Institute has often been at the
heart of coalescing opposition to the endless proposals by anti-business
politicians who expect new and increased levies on business taxpayers to fill
their perennial budget gaps. Practically
every business and industry has received the benefit of the work of the
Chamber’s Tax Institute. As you review their accomplishments below, I know
you’ll join me in thanking them and congratulating them on their tenth
anniversary. Doug ------
In
1998:
And,
the Illinois Chamber of Commerce Tax Institute began meeting in January 1998
with eighteen members recruited that first year. Ten years later, the Tax
Institute has grown to more than forty members. On the occasion of our tenth
anniversary, we want to recognize the many accomplishments on behalf of
Illinois employers that have been achieved by the diligent, dedicated members
of the Tax Institute. In
1997, the Illinois Chamber decided to take its Tax Committee, a body that
reacted to tax legislation and rulemaking news and reported to the
membership, and create a more proactive organization that would get involved
in legislation, rulemaking and research on emerging tax issues. Connie Beard,
then a member of the Tax Committee representing Grant Thornton, was recruited
to join the Illinois Chamber staff as Executive Director of the Tax
Institute. Connie’s ongoing expertise and leadership have helped establish
the Tax Institute as the go-to group on tax policy in Illinois. In
1998, we hit the ground running by working to pass legislation implementing
the corporate income tax single
sales factor apportionment method, making Illinois one of the
first states to offer this business friendly tax provision which continues to
benefit Illinois headquartered companies. That
same year, we negotiated with the Department of Revenue to reach agreement on
a pilot program for direct
pay permit sales tax legislation. This Tax Institute
initiative was highly successful and legislation to make the direct pay
program permanent passed unanimously and with the support of the Illinois
Department of Revenue two years later. The direct pay program allows
large taxpayers to pay all sales taxes directly to the Department of Revenue
rather than to numerous vendors. This simplified bookkeeping, allows
for closer scrutiny of accounts payable to determine the proper sales tax
treatment and results in faster refunds of overpaid taxes. After
conducting a summer research study of municipal and county taxes, the Tax
Institute drafted and passed the
Municipal Taxpayers Bill of Rights. The Municipal
Taxpayers Bill of Rights created new protections for Illinois businesses that
are subject to taxes imposed by over 1200 municipalities and 102 county
governments. These protections provide basic taxpayer rights already found at
the state and national levels such as a reasonable statute of limitations, a
guaranteed appeal process and a right to a refund or credit of overpaid
taxes. We
successfully prevented back tax assessments against some of our members by
passing legislation retroactively restoring
the High Impact Business Tax Credit after that credit was
inadvertently omitted when the old Public Utility tax was converted to the
new Electricity Excise Tax during the electric deregulation process in
1998. As
a result of written objections filed by the Tax Institute, the Department of
Revenue withdrew
a rulemaking that attempted to substantially eliminate the current sales tax
credit for chemicals and catalysts used in the manufacturing
process. We also successfully opposed legislation sponsored by the
Department of Revenue to attempt to accomplish the same objective
legislatively. At
the request of the Illinois Department of Revenue, the Tax Institute took the
lead in working with Illinois business members to review and further develop
proposed Financial Organization regulations to implement recent changes in
the law affecting how
financial organizations apportion their income under the
Illinois Income Tax Act. The
Tax Institute successfully developed a proposal for regulatory reform of the
Department of Revenue
Informal Conference process which allowed taxpayers (for the
first time) the right to meet with the Department of Revenue and attempt to
resolve tax disputes before a formal tax assessment is issued and before the
need for a formal court hearing. The
Tax Institute successfully passed new temporary storage legislation. The
TI's proposal corrected a sales tax law that actually encouraged taxpayers to
purchase from out-of-state vendors or to use out-of-state storage facilities
in order to avoid over-assessment of sales tax on goods purchased for use in
other states. The legislation exempts from sales tax goods purchased
from Illinois vendors that are temporarily stored at an Illinois warehouse or
distribution facility before shipment to another state for use.
Taxpayers are no longer double taxed if they keep both purchasing and temporary
storage activities in Illinois. This language was negotiated with the
Department of Revenue, resulting in agreed language that passed both houses
of the General Assembly unanimously. In
response to inflammatory rhetoric about Illinois businesses not paying a fair
share of taxes, the Tax Institute worked with Ernst & Young in 2004 to
produce the Illinois
Business Tax Burden Study which shows that Illinois business
taxpayers do indeed pay their fair share of taxes to the State of Illinois
and that the business tax burden has been steadily increasing. This
study was updated and republished in 2006. Tax
Institute members put together a working group to study the national Streamlined Sales Tax Project
and identified problem areas in Illinois law. We have continued to
monitor the national project and to educate legislators on the tax policy
issues of importance to Illinois business taxpayers. The
expertise of the Tax Institute was critical in halting efforts to impose new
taxes on fuels. We defeated attempts to impose motor fuel
taxes on fuels used in off-road vehicles, and attempts at a state-imposed
tariff on refinery production that would flow into interstate commerce. Tax
Institute staff worked closely with the Department of Revenue to develop
taxpayer friendly amnesty
regulations in 2003. In
2004, we worked tirelessly to educate legislators on the importance of
business tax incentives in the face of the Governor's budget call to revoke
them. Tax Institute members help draft informational pieces on the
potential impact of each of the repeal proposals. While the Chamber was
unable to halt some proposals, we were successful in modifying many of the
Governor’s anti-business proposals to make them more reasonable and
palatable. The
Tax Institute filed formal objections to a proposed rulemaking that would
have changed the definition of "United States" to include Puerto
Rico and other US possessions for corporate income tax purposes. This
was an attempt to intentionally expand the Illinois corporate income tax to
include income from manufacturing companies outside the continental United
States. We successfully defeated this rulemaking and subsequent
legislative attempts to change the definition of “continental United States”. The
Tax Institute led
the charge to oppose HB 750, a so-called education
income/property tax swap bill. We were actively engaged in educating
legislators about the negative business and economic development aspects of
the proposed legislation. With
Government Affairs staff involvement, the Tax Institute organized opposition
to the Governor's proposal to tax computer software under the sales
tax. We educated other associations about how and why the proposal was
harmful to Illinois businesses. The Tax Institute has successfully defeated every attempt to
legislatively repeal the customized computer software exemption. The
Tax Institute worked with the Council on State Taxation at the national level
in support of
the Federal Economic Development Act of 2005 and the Federal Business
Activity Tax Nexus Legislation. In
2007, the Tax Institute anticipated and took the lead in opposing the
Governor's ill-designed Gross
Receipts Tax. Our leadership built a coalition of business
associations, educated them on the anti-business nature of a GRT, and worked
with local chambers to strengthen opposition, and the GRT was defeated. The
Chamber’s Tax Institute has reviewed
and commented on hundreds of Department of Revenue regulations. Almost
all of our comments and suggestions have been implemented by the
Department. TI Executive Director Connie Beard continues to participate
in the Director of Revenue's Advisory Group and to actively comment on draft
and proposed regulations that impact Illinois business taxpayers. The
Department of Revenue and the Department of Commerce and Opportunity have
both benefited from Tax Institute input to streamline and simplify the filing of business
tax returns. When
tax laws are passed or regulations changed, the Tax Institute serves Illinois
in another capacity: we review and revise the language and recommend
revisions to make the new rules implementable. After major revisions are
passed, the Tax Institute offers
significant clean-up language in trailer legislation that
allows the new tax laws to be managed and rationally applied. Tax
Institute staff and leaders have conducted
seminars and conferences on Illinois sales and income tax
issues, as well as Unclaimed Property laws. We sponsored comprehensive
income and sales tax schools for corporate members, taught by experts in
Illinois state and local taxation. The
Tax Institute reviews and responds to hundreds
of legislative proposals each year that would increase taxes
on business members. Our staff and leaders continue to testify before
revenue committees of the House and Senate to explain business tax policy
issues, and speak to local chambers and other business associations on
Illinois tax policy. The
Future Tax
law proposals often have a way of hanging around; even when an idea has
failed or been discounted, the specter remains and it is not unusual for
those ideas to come up again a few years later. One of the greatest values to
Illinois employers is the Chamber’s institutional memory and wherewithal to
deal with the latest and greatest tax threat, whether it is a gross receipts
tax, simplified sales tax, or tax swap. Whether a proposal is fresh or
recycled, they all have details that require much analysis and attention.
They are not as simple as they may sound to a politician who’s often looking
for a quick fix but has little idea of the true implications or consequences.
The Tax Institute will be there. If
your organization is large enough to have tax staff, you should seriously
consider joining this group.
Join forces with the Tax Institute to assure we have the resources to
effectively defend employers’ interests in Springfield and Washington. Member
input is critical to the Tax Institute’s continued success. |
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Message from
the President - Copyright © 2008 The Illinois Chamber of Commerce
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