Illinois Administrative Code › Title 86 - REVENUE › Part 525 - TAX INCREMENT ALLOCATION FINANCING › Section 525.101 - Tax Increment Allocation Financing

Current through Register Vol. 48, No. 28, July 12, 2024
a)
			 Municipalities must supply all data and comply with all requirements provided
			 for by statute, prior to receipt of payments from the State. The failure to
			 comply with the minimum standards during a calendar year will result in the
			 nonpayment of the State portion of incremental taxes. For example, a
			 municipality which adopts tax increment allocation financing for a special
			 redevelopment project in a timely manner and which provides the necessary
			 certificates of the Chief Executive Officer and legal opinion of counsel will,
			 nevertheless, fail to qualify if it has neglected to impose all local taxes at
			 the maximum allowable rate prior to the time they would have received payment
			 of the State portion of incremental taxes from the Department. Thus, a
			 municipality which had imposed its Retailers' Occupation Tax at 3/4 of 1%
			 rather than 1%, would not qualify, nor would a municipality which had never
			 enacted a Municipal Use Tax.
b)
			 Errors or omissions in data provided to the Department of Revenue will result
			 in corrections and adjustments of payments in the current year and in future
			 years. The Department of Revenue (Department) will adjust for errors in data
			 provided by municipalities, retailers and utility companies. These adjustments
			 could result in either greater or lesser payments, depending upon the result of
			 the adjustment.
c) Municipal
			 ordinances for sales tax increment financing for calendar year 1986 payment
			 must be passed prior to January 1, 1987. Ordinances and 1985 Illinois Business
			 Tax Numbers must be submitted by January 31, 1987, in order to ensure payment
			 for the first tax increment financing sales tax disbursement. If the ordinances
			 or Illinois Business Tax Numbers are submitted after January 31, 1987, there
			 will be no payment to that municipality for calendar year 1986 and no
			 adjustments for calendar year 1986 in a future year. Only tax increment
			 financing districts created before 1986 are eligible to receive the first
			 payment of incremental growth of State sales tax revenue between 1984 and 1985,
			 which will be the 1986 payment. For calendar year 1987 payment, ordinances and
			 1986 Illinois Business Taxpayer Numbers must be submitted to the Department by
			 April 1, 1987, in order to ensure payments by the end of the 1987 year. If the
			 ordinance or Illinois Business Taxpayer Numbers are not submitted to the
			 Department of Revenue within 30 days after the effective date of the ordinance
			 or by April 1, 1987, whichever is earlier, there will be no payment to that
			 municipality for the calendar year 1987 and no adjustments for calendar year
			 1987 in a future year. The same schedule for submission of data applies to
			 utility tax increment financing; however, municipalities must pass utility
			 ordinances prior to January 1, 1988. In future years, the information and
			 payment cycle will be as in 1987 so that all Illinois Business Tax Numbers for
			 the preceding calendar year and any new ordinances will be submitted to the
			 Department of Revenue by April 1 of each year in order for the municipality to
			 participate in the sales tax disbursement for that calendar year. This
			 provision of the regulations is being adopted to ensure that financial data is
			 available to the Department for presentation to the General Assembly in order
			 to accurately estimate the amount of funds which will be necessary for the
			 General Assembly to appropriate for expenditures to municipalities under this
			 program.
d) The Department of
			 Revenue will make payments of incremental revenue attributable to a given
			 retail location only once, even if that retailer or retail location is included
			 in more than one tax increment financing district, i.e., if for any reason, the
			 same geographic location is included within two special redevelopment areas for
			 which tax increment allocation financing has been adopted, the Department's
			 payment of incremental revenue for that retailer will be made only one time--it
			 will not be made to each of the tax increment financing districts nor will it
			 be split between them. Any such allocation will have to be made by the
			 municipal authorities devising such a scheme.
e) Municipalities are required to certify
			 that local funds have been committed for deposit into the special fund prior to
			 payment by the Department of Revenue. The Department of Revenue will certify
			 the amount of the local increment to municipalities; the municipal treasurer
			 must certify to the Department of Revenue within 10 days of the receipt of the
			 Department of Revenue figures that the local amounts have been deposited into
			 the fund. No Department of Revenue payment of incremental increases in State
			 revenue will be made absent such certification. A municipality's failure to
			 deposit funds in the amount required in the special account will also be a
			 basis for correction of amounts paid in future years. The correction will equal
			 the amount paid by the State in the prior year.
f) No municipality may receive more than 25%
			 of the maximum appropriation, whether or not allocation between municipalities
			 applying for funds is required.
g)
			 Multi-outlet retailers within a municipality must provide data to the
			 Department of Revenue regarding the amount of Retailers' Occupation Tax
			 collected by their retail locations within a tax increment financing district
			 within 45 days of the request for such information by the Department. If the
			 information is not provided within that time frame, incremental growth for the
			 retailer will not be computed and included in the municipality's allocation.
			 Retailer information can be supplied at a later date to be used to compute
			 future year's allocation.
h) A
			 municipality must opt for reimbursement either under the Retailers' Occupation
			 Tax provisions or the Utility Tax provisions. It may not enact ordinances under
			 both sections of the law. If a municipality has enacted an ordinance under one
			 section, it will be disqualified for consideration under the other. A
			 municipality may not have an ordinance enacted under the Retailers' Occupation
			 Tax provisions for one tax increment allocation financing special redevelopment
			 district and seek to have financing special redevelopment district and seek to
			 have financing under the Utility Tax provisions for an industrial park within
			 the same municipality even if each would be located in a separate special
			 redevelopment district for which tax increment allocation financing were
			 adopted. However, if a municipality having once adopted an ordinance seeking
			 Retailers' Occupation Tax funding repeals that ordinance, it would be free to
			 thereafter adopt tax increment allocation financing for an industrial park
			 under the Utility Tax provisions.
i) Municipalities seeking payment under the
			 Retailers' Occupation Tax section must pass an ordinance establishing tax
			 increment allocation financing before January 1, 1987. Special redevelopment
			 districts created on or after that date will not be eligible for State tax
			 allocation under the Retailers' Occupation Tax section. Municipalities seeking
			 payment under the Utility Tax section must pass an ordinance establishing the
			 tax increment financing before January 1, 1988. Tax increment financing
			 districts created on or after that date will not be eligible for State tax
			 allocation under the Utility Tax section. Municipal changes to the boundaries
			 of existing tax increment financing districts in any manner which would affect
			 or have an impact on the tax base or growth factors for the sales or utility
			 tax increment will not be taken into account for the purposes of determining
			 payments to municipalities of special tax allocation funds. Boundary changes
			 enacted pursuant to other statutory authority will not be taken into account
			 for the purposes of determining payments to municipalities of special tax
			 allocation funds under the provisions of ch. 24, par. 11-74.4-8a.
j) If the Illinois Business Taxpayer Number
			 or other relevant information provided by the municipality contains
			 discrepancies with the Department's records, we will request correction or
			 confirmation of the data from the municipality. The municipality must respond
			 within 45 days after such request to ensure timely processing of the
			 municipality's request for payments pursuant to the tax increment allocation
			 financing project.
k) Termination.
			 Tax increment allocation financing shall terminate when the redevelopment
			 project costs and all municipal obligations financing redevelopment project
			 costs have been paid. Municipalities who issue obligations to finance the
			 special project redevelopment district expenditures must limit those
			 obligation's maturity date to a period no later than 23 years from the date of
			 the ordinance approving the redevelopment project area. Such obligations may
			 not exceed a maturity date of twenty (20) years from the date of issuance of
			 said obligations.
l) Incremental
			 increases in local property tax and sales or utility revenue must be deposited
			 into the special allocation fund and used for the development of the area.
			 Abatement of real property taxes under the provisions of ch. 120, pars. 643 and
			 643e or any abatement provisions hereafter enacted may be permitted within a
			 tax increment allocation financing district only to the extent that such
			 abatement in no way causes or permits a municipality to in any way reduce the
			 amount of the property tax allocable from such taxing district into the special
			 allocation fund. Taxes must be collected and deposited into the special fund on
			 a tax base equal to the tax base of the actual increment without regard to
			 abatements. No funds intended for the special allocation fund may be abated.
			 However, a municipality may abate taxes relating to the base equalized assessed
			 valuation as long as incremental amounts are not affected. Enterprise zone
			 exemptions relating to Retailers' Occupation Tax will not disqualify an
			 enterprise zone from State tax incremental financing payments. However,
			 municipalities which adopt utility tax related ordinances for industrial parks
			 must impose those taxes at the full rate and may not provide enterprise zone
			 exemptions for utility taxes within the tax increment allocation financing
			 area.
m) Municipalities must notify
			 the Department if a retail business moves into their tax increment financing
			 district and closes a retail business in another location in Illinois in the
			 standard metropolitan statistical area of the municipality. Sales tax receipts
			 from the business will be included in the base year receipts of the
			 municipality for purposes of State tax payments. In the case of a municipality
			 which is not included in a standard metropolitan statistical area, the
			 Department will determine, upon request, the relevant area. That area shall be
			 the county in which the municipality is located unless the Department
			 determines that the retail trading market of the municipality extends beyond
			 the county, in which case such area will also be included. In the event that a
			 new business relocates from a location inside the standard metropolitan
			 statistical area to a location within a municipal tax increment financing
			 district, the receipts from that retailer will be included in the base year
			 receipts unless the municipality can demonstrate that there was no direct close
			 and proximal relationship between the closing of one business and the opening
			 of the other location. This might be the case, for example, where a chain
			 retailer opened and closed several locations within a particular standard
			 metropolitan statistical area during the course of a year. If a municipality
			 does not inform the Department of such relocation, the sales tax payment will
			 be included in the base year receipts for the purpose of State tax payments and
			 adjustments will be made to future year payments to account for past year
			 payments as well as future year payments.