P r o p e r t y T a x . c o m   b y    F I T Z G E R A L D   L A W   G R O U P

P R A C T I C E   L I M I T E D   T O   T H E   T A X A T I O N   O F   C O M M E R C I A L ,  I N D U S T R I A L  &  I N V E S T M E N T – G R A D E   R E A L   E S T A T E            

E s t.  1 9 8 7 

Cook County Circuit Court Closure Extended

Cook County Circuit Court is extending its suspension of most criminal and civil cases through May and expanding the use of videoconferencing amid the growing COVID-19 outbreak.

Originally postponed until April 15, most court cases are now suspended until May 18, the office of Chief Judge Timothy Evans said in a statement Monday.

State of Indiana extends due date for property tax bills

The governor of Indiana has…”mandated that all counties waive penalties for delinquent non-escrow property taxes paid within sixty (60) days after May 11, 2020 – the May 11, 2020 – the May installment due date.” “…the spring installment may be paid up to and including July 10, 2020 without penalty.” However, know that “This waiver does not apply to tax payments which have been escrowed by financial institutions on behalf of property tax payers.”

Senate Passes Coronavirus Relief Act

Last updated March 25 at 11:34pm

Key Updates

  • Unemployment insurance provisions now include an additional $600 per week payment to each recipient for up to four months, and extend UI benefits to self-employed workers, independent contractors, and those with limited work history. The federal government will provide temporary full funding of the first week of regular unemployment for states with no waiting period and extend UI benefits for an additional 13 weeks through December 31, 2020 after state UI benefits end.
  • The proposed recovery rebates will use 2019 tax returns (2018 if the taxpayer has not filed in 2019) to determine the advanced rebate amount and reconcile the rebate based on 2020 income. This means that taxpayers who receive a smaller rebate than they are eligible for based on 2020 income will receive the difference after filing a 2020 tax return, but overpayments of rebates due to a higher income in 2020 will not be clawed back.
  • Employers are eligible for a 50 percent refundable payroll tax credit on wages paid up to $10,000 during the crisis. The credit would be available to employers whose businesses were disrupted due to virus shutdowns and those that had a decrease in gross receipts of 50 percent or more when compared to the same quarter last year. The credit can be claimed for employees who are retained but not currently working due to the crisis for firms with more than 100 employees, and for all employee wages for firms with 100 or fewer employees.
  • Certain employer payments of student loans on behalf of employees are excluded from taxable income. Employers may contribute up to $5,250 annually toward student loans, and the payments would be excluded from an employee’s income.

On Wednesday evening, the Senate passed an updated version of the Coronavirus Aid, Relief and Economic Security (CARES) Act. The bill builds upon earlier versions of the CARES Act and is intended to be a third round of federal government support in the wake of the coronavirus public health crisis and associated economic fallout, succeeding the $8.3 billion in public health support passed two weeks ago and the Families First Coronavirus Response Act. It is the product of negotiations between Democrats and Republicans for a bipartisan response to the crisis.

The CARES Act builds on the two former pieces of legislation by providing more robust support to both individuals and businesses, including changes to tax policy. The bill includes:

  • Expanded unemployment insurance (UI) for workers, including a $600 per week increase in benefits for up to four months and federal funding of UI benefits provided to those not usually eligible for UI, such as the self-employed, independent contractors, and those with limited work history. The federal government is incentivizing states to repeal any “waiting week” provisions that prevent unemployed workers from getting benefits as soon as they are laid off by fully funding the first week of UI for states that suspend such waiting periods. Additionally, the federal government will fund an additional 13 weeks of unemployment benefits through December 31, 2020 after workers have run out of state unemployment benefits.
  • $350 billion allocated for the Paycheck Protection Program, which is meant to help small businesses (fewer than 500 employees) impacted by the pandemic and economic downturn to make payroll and cover other expenses from February 15 to June 30. Notably, small businesses may take out loans up to $10 million—limited to a formula tied to payroll costs—and can cover employees making up to $100,000 per year. Loans may be forgiven if a firm uses the loan for payroll, interest payments on mortgages, rent, and utilities and would be reduced proportionally by any reduction in employees retained compared to the prior year and a 25 percent or greater reduction in employee compensation.
  • Recovery Rebate for individual taxpayers. The bill would provide a $1,200 refundable tax credit for individuals ($2,400 for joint taxpayers). Additionally, taxpayers with children will receive a flat $500 for each child. The rebates would not be counted as taxable income for recipients, as the rebate is a credit against tax liability and is refundable for taxpayers with no tax liability to offset. The rebate phases out at $75,000 for singles, $112,500 for heads of household, and $150,000 for joint taxpayers at 5 percent per dollar of qualified income, or $50 per $1,000 earned. It phases out entirely at $99,000 for single taxpayers with no children and $198,000 for joint taxpayers with no children (see Chart 1). 2019 or 2018 tax returns will be used to calculate the rebate advanced to taxpayers, but taxpayers eligible for a larger rebate based on 2020 income will receive it in the 2020 tax season. Taxpayers with higher incomes in 2020 will see the overpayment associated with their rebate forgiven. For example, a single taxpayer with $100,000 in 2019 income would not receive an advance rebate but would receive the $1,200 credit on their 2020 return if their income for the year fell below the phaseout. On the other hand, a single taxpayer with $35,000 in income receives a $1,200 advance rebate but would not have to pay the rebate back on the 2020 return if they make $100,000 this year. This is structurally similar to the 2008 rebate design. We estimate the rebate will decrease federal revenue by about $301 billion in 2020, according to the Tax Foundation General Equilibrium Model. This credit is one-time, but policymakers may consider additional rebates if the downturn is prolonged.

Proposed Relief Rebate in the CARES Act, Senate Coronavirus bill, Senate covid-19 bill, Senate economic relief bill

We estimate that the rebates would increase taxpayer after-tax income by about 2.59 percent, ranging from 16.33 percent at the lowest quintile and dropping to 1.89 percent for the 80th to 90th percentiles. The rebate is structured progressively but is not available to those who have not filed taxes. These non-filers tend to have lower incomes. Additionally, Social Security Administration benefit information may be used for low-income taxpayers solely relying on Social Security benefits.

We estimate that nearly all filers below the 80th percentile will receive a rebate, but only 0.1 percent of filers above the 99th percentile will receive a rebate due to the rebate phaseouts. The average rebate will be about $1,523, ranging from $1,436 for the 0 to 20th percentiles to $45 for the 95th to 99th percentiles.

Table 1. Conventional Distributional Effect of the Proposed Recovery Rebates (Revised) in the CARES Act
Income level Percent Change in After-Tax Income Average Rebate (Refundable and Non-Refundable Credit) Share of Filers with a Rebate
0% to 20% 16.33% $1,436 100%
20% to 40% 6.73% $1,579 100%
40% to 60% 4.33% $1,642 100%
60% to 80% 3.00% $1,865 99.9%
80% to 90% 1.89% $1,727 98.9%
90% to 95% 0.67% $844 62.2%
95% to 99% 0.02% $45 8.7%
99% to 100% 0.00% $0 0.1%
Total 2.59% $1,523 93.6%
Source: Tax Foundation General Equilibrium Model, November 2019.
  • Creates a $300 partial above-the-line charitable contribution for filers taking the standard deduction and expands the limit on charitable contributions for itemizers.
  • Waives the 10 percent early withdrawal penalty on retirement account distributions for taxpayers facing virus-related challenges. Withdrawn amounts are taxable over three years, but taxpayers can recontribute the withdrawn funds into their retirement accounts for three years without affecting retirement account caps. Eligible retirement accounts include individual retirement accounts (IRAs), 401Ks and other qualified trusts, certain deferred compensation plans, and qualified annuities. The bill also waives required minimum distribution rules for certain retirement plans in calendar year 2020.
  • Certain employer payments of student loans on behalf of employees are excluded from taxable income. Employers may contribute up to $5,250 annually toward student loans, and the payments would be excluded from an employee’s income.
  • A variety of business tax provisions:
    • Employers are eligible for a 50 percent refundable payroll tax credit on wages paid up to $10,000 during the crisis. It would be available to employers whose businesses were disrupted due to virus-related shutdowns and firms experiencing a decrease in gross receipts of 50 percent or more when compared to the same quarter last year. The credit is available for employees retained but not currently working due to the crisis for firms with more than 100 employees, and for all employee wages for firms with 100 or fewer employees.
    • Employer-side Social Security payroll tax payments may be delayed until January 1, 2021, with 50 percent owed on December 31, 2021 and the other half owed on December 31, 2022. The Social Security Trust Fund will be backfilled by general revenue in the interim period.
    • Firms may take net operating losses (NOLs) earned in 2018, 2019, or 2020 and carry back those losses five years. The NOL limit of 80 percent of taxable income is also suspended, so firms may use NOLs they have to fully offset their taxable income. The bill also modifies loss limitations for non-corporate taxpayers, including rules governing excess farm losses, and makes a technical correction to the treatment of NOLs for the 2017 and 2018 tax years.
    • Firms with tax credit carryforwards and previous alternative minimum tax (AMT) liability can claim larger refundable tax credits than they otherwise could.
    • The net interest deduction limitation, which currently limits businesses’ ability to deduct interest paid on their tax returns to 30 percent of earnings before interest, tax, depreciation, and amortization (EBITDA), has been expanded to 50 percent of EBITDA for 2019 and 2020. This will help businesses increase liquidity if they have debt or must take on more debt during the crisis.
    • Technical corrections to the depreciation treatment of qualified improvement property (QIP).
    • The excise tax applied on alcohol used to produce hand sanitizer is temporarily suspended for tax year 2020.
    • Aviation excise taxes are suspended until January 1, 2021. We estimate this will reduce federal revenue by about $8 billion in 2020.
  • $454 billion in emergency lending to businesses, states, and cities through the U.S. Treasury’s Exchange Stabilization Fund. Additionally, this includes $25 billion in lending for airlines, $4 billion in lending for air cargo firms, and $17 billion in lending for firms deemed critical to U.S. national security. Firms taking loans must not engage in stock buybacks for the duration of the loan plus one year and must retain at least 90 percent of its employment level as of March 24, 2020. Loans also come with terms limiting employee compensation and severance pay for firms taking loans. Emergency lending will be overseen by a Congressional Oversight Commission and a Special Inspector General.
  • Health provisions to address the coronavirus crisis, including provisions addressing supply shortages, coverage of diagnostic testing for the virus, support for health-care providers, improving telehealth service access and flexibility, encouragement for the creation of drugs to treat the virus, strengthening related Medicare and Medicaid provisions, and providing support for educational institutions.
  • $150 billion in a Coronavirus Relief Fund for state and city government expenditures incurred due to dealing with the coronavirus public health emergency. The fund would be allocated by population proportions, with a minimum of $1.25 billion for each state.

The CARES Act is a positive step forward to provide economic relief to individuals and businesses facing hardship or economic ruin due to this crisis. However, several aspects of the proposal can be improved.

The recovery rebate design has improved, as both the minimum income requirement and phase-in have been eliminated. Policymakers have opted for the design used in the 2001 rebate for distributing the recovery rebates, forgiving any overpayment to taxpayers when they file their 2020 tax returns. This simplifies the design and minimizes the need to claw back rebates later.

As my colleague Jared Walczak has pointed out, state and municipal governments that have allocated funding toward addressing coronavirus concerns in their most recent budgets may not be able to use Coronavirus Relief Fund revenue for those expenditures. Policymakers should consider allowing states and municipalities more flexibility to use relief funds for coronavirus-related expenditures they planned in their budgets to date.

The business provisions improve a firm’s ability to remain liquid and survive through the crisis, but more could be done given the scale of the challenge. In addition to providing NOL carrybacks for five years and suspending the net income limitation, policymakers could permit firms to accelerate the NOL deductions they currently hold, ensuring firms that did not make large profits in previous years also benefit. Additionally, the net interest limitation could be suspended entirely for this tax year.

Some of the tax provisions in the bill, such as the partial above-the-line deduction for charitable contributions, are not tailored to addressing the public health crisis or economic downturn and should be reconsidered. This will keep the bill narrowly focused on addressing the problem at hand and separate long-term legislative decisions from emergency measures needed to provide short-term economic relief.

We are optimistic that policymakers can build on this bill to ensure individuals and businesses can weather the storm and rebound effectively when the crisis abates.

Illinois PTAB Changes

The Property Tax Appeal Board (PTAB) has received inquiries regarding the continuing operations of the PTAB during the COVID-19 pandemic. The PTAB is also aware that many offices are working remotely and are unable to perform normal operations. In light of the COVID-19 pandemic, the PTAB will be operating as follows until further notice.

Other than hearing postponements, the PTAB will not be generating or sending out mail or electronic correspondence during this time, thereby not creating any new filing deadlines. If you have cases that have current deadlines, you may send extension requests electronically to the PTA.Clerk@Illinois.gov email address. Please do not send evidence to this email address; we do not have the staff to process everything electronically.

To help alleviate any approaching deadlines, the PTAB will be granting a 60-day extension to any deadlines that occur from March 23, 2020 through April 30, 2020, system wide. The extensions will run from the original due date for 60 additional days. The PTAB will not be sending letters for these extensions, however, the parties will be able to see the extensions granted on the Appeal Status Inquiry (ASI) system once the original deadline expires.

Please note that the 30-day period to file an appeal to the PTAB from a BOR decision or PTAB decision has not been extended. You must, at minimum, send in the completed first page of the appeal form with the BOR or PTAB decision and have it postmarked within 30 days of the written decision of the BOR or the PTAB. In Cook County you may also file the appeal within 30 days after the date that the BOR transmits to the county assessor pursuant to Section 16-125 its final action on the township in which the property is located. You may ask for an extension at that time.

The PTAB is also requiring any Request to Intervene that is currently pending be filed within the 60-day time frame of the notice from the BOR to the taxing district of the appeal. Please note that pursuant to Section 1910.60(e)(1) of the PTAB’s rules (86 Ill.Admin.Code 1910.60(e)(1)) if the Request to Intervene is filed without the resolution of the taxing body authorizing intervention, provide a written explanation of the reason and a request for an extension to file the resolution, which will be liberally construed by the PTAB until further notice. You may also ask for an extension of time to file evidence at that time.

Currently the PTAB is scheduled to have a meeting on April 14, 2020, at which time it may issue decisions. Furthermore, the PTAB intends to cancel hearings scheduled through April 17, 2020.

The PTAB continues to work remotely but can answer any questions you may have by calling us at 217/782-6076 or by sending an email to the Clerk of the PTAB at the PTA.Clerk@Illinois.gov email address.

Thank you for your patience and cooperation.

Clerk of the Board
Illinois Property Tax Appeal Board
402 Stratton Building
Springfield, IL 62706
(217) 782-6076 (Office)
(217) 785-4425 (Fax)
www.ptab.illinois.gov

Cook County Assessment Operations

The Cook County Assessor has suspended 2020 assessment operations until further notice. The Cook County Board of Review has suspended hearings but continues to process the 2019 assessment.

Project Proceeds Without Tax Incentive

$60M Amazon facility in Pullman takes giant step forward — without property tax break

At the behest of local Ald. Anthony Beale (9th), the Transportation Committee sub-divided the massive site once owned by Ryerson Steel. The political feud between Beale and Mayor Lori Lightfoot did not stand in the way.

Ald. Anthony Beale (9th) (left) congratulates David Doig, president of Chicago Neighborhood Initiatives.
Ald. Anthony Beale (9th) (left) congratulates David Doig, president of Chicago Neighborhood Initiatives, after the City Council’s Transportation Committee sub-divided the site at 103rd and Woodlawn that will now be developed for a $60 million Amazon facilty.
Fran Spielman/Sun-Times

It looks like a long-vacant Pullman industrial site will be turned into a $60 million Amazon distribution center in time for the Christmas holidays — and without a lucrative “Class 6B” property tax break.

The City Council’s Transportation Committee on Monday took the first concrete step to deliver the 200-job, 150,000 square-foot prize on a site at 103rd and Woodlawn once owned by Ryerson Steel.

At the behest of local Ald. Anthony Beale (9th), aldermen approved the so-called “plat and sub-divison,” creating the legal parcel that will now be developed by Chicago Neighborhood Initiatives and the Ryan Companies, Amazon’s designated developer.

The land is owned by Chicago Neighborhood Initiatives, a non-profit created by U.S. Bank and run by David Doig, who served as planning and development commissioner and Chicago Park District superintendent under former Mayor Richard M. Daley.

In late January, Beale said the project would require Mayor Lori Lightfoot’s administration to expedite building permits and put a so-called “Class 6B” property tax break on a fast-track toward City Council approval.

On Monday, developers changed gears. They decided to forge ahead without the lucrative property tax break because they need to get the center done by mid-October — in time to start delivering packages for the Christmas holidays.

“We need to deliver this facility to our tenant by the fall of 2020 and the schedule does not allow for us to pursue a Class 6B incentive,” said Curt Pascoe, director of real estate development for the Ryan Companies, developer and builder of the project.

Was the developer and builder concerned about being a casualty of the running political feud between Beale and Mayor Lori Lightfoot?

“No. It’s a matter of us being able to move forward and begin construction on the project and this is the quickest way forward,” Pascoe said.

Beale is a 20-year veteran alderman who was stripped of his committee chairmanship for opposing Lightfoot’s choice of Ald. Scott Waguespack (32nd) as Finance Committee chairman. He has since become one of the mayor’s most outspoken council critics.

On Monday, the alderman said he never had a conversation with the mayor about the project. And he’s not at all surprised that she didn’t stop it.

“We’re all looking to create jobs. It doesn’t make sense for anybody to get in the way of progress,” Beale said.

“It’s great access off the expressway. We’ve been able to get the Whole Foods Distribution Center, Method, Gotham Green — all those others. … This is just another great fit for this region for people to be able to get their packages in a day or so.”

Beale once touted the parcel as a site for a Chicago casino. But he opted Monday to grab the bird in hand.

“A casino could be, possibly, three or four years down the road. We’re bringing jobs to the community right now,” the alderman said.

Pascoe noted the vacant land, across the street from the 135,000-square-foot U.S. Bank Pullman Community Center has “never been developed.”

“It’s going to bring economic investment to the Far South Side and turn land that has never generated taxes, never generated jobs onto the tax rolls to bring jobs and taxes to the city,” he said.

In late January, Beale went public about the project, only to have Lightfoot tell reporters there was nothing “to talk about yet.” She accused Beale of “getting a little ahead of himself.”

Hours later, however, the mayor’s office acknowledged that, although it hadn’t “connected with Amazon on this deal directly,” city planners had, in fact, “spoken with the developer to discuss underlying zoning” for the proposed site.

“The City welcomes opportunities to drive inclusive economic growth for our South and West Side communities, and Pullman is one of our priority areas,” a statement from the mayor’s office said at the time.

Assessor Kaegi to reduce market values to reflect Corona effect

Assessor trying to ensure Cook County property values adjusted to reflect ‘coronavirus effect’

All property owners will get a notification from the Cook County assessor’s office. Assessor Fritz Kaegi said his staff will “have to bend over backwards to keep on schedule” but he’s optimistic they’ll be able to get things done on time.

Aerial photo from suburban Berwyn looking towards cloud covered Chicago Friday March 27, 2020.
Aerial photo from suburban Berwyn looking towards cloud covered Chicago Friday March 27, 2020.
Brian Ernst/Sun-Times file

Knowing many residents are facing economic uncertainty from the coronavirus pandemic, Cook County Assessor Fritz Kaegi said Friday that all homes, businesses and other real estate parcels could see their property values adjusted due to COVID-19’s effect on the market.

The first-term assessor said analysts in his office are looking for data from natural disasters and other economic crises to understand what could happen to property values in Cook County, but even with those comparisons the challenge coronavirus presents is unmatched.

“This is different because, for all of us to be safe and to get ahead of [coronavirus], we’ve had to shut down so many different sectors of the economy and economic activity,” Kaegi said.

“We’re trying to be mindful of all of that and try to reflect as best we can with the data that we have how the crisis is affecting different people’s lives,” Kaegi said. “We know that we won’t be perfect in that — the future is a little bit unknown, and how this crisis unfolds is uncertain, but we’re going to be doing the best we can. We figure it’s better to do that, rather than proceed as if nothing had happened.”

Fritz Kaegi
Fritz Kaegi, then Cook County Assessor Democratic primary candidate, in 2018
Rich Hein/Sun-Times file

All property owners will get a notification from the assessor’s office. Owners of west and south suburban properties already scheduled to be reassessed this year will receive a reassessment notice, while property owners in the northern suburbs and Chicago will receive a notice letting them know that the coronavirus may have affected their property values and what their new, adjusted value could be.

Property owners in Chicago and the northern suburbs can submit appeals of their latest assessments, which will be processed by analysts. Eventually, all property owners will receive a mailing with their property’s adjusted value.

Their current assessed values could be adjusted to either the appealed value or the “coronavirus effect” value, a spokesman said.

The appeals period will be shortened from the typical 40 days to 35 days in order to make sure the assessor’s office will be able to hand off their assessments to the county’s Board of Review on time.

Empty sidewalk in front of suburban bungalows on the in Berwyn Friday March 27, 2020.
Empty sidewalk in front of suburban bungalows on the in Berwyn Friday March 27, 2020.
Brian Ernst/Sun-Times file

The normal period for a re-review is being eliminated, but the office is encouraging people to submit requests online to meet with the assessor’s staff members to have their questions and concerns answered.

Kaegi said his staff will “have to bend over backwards to keep on schedule” but he’s optimistic they’ll be able to get things done on time. The team has been working hard the last few weeks to adjust to the circumstances and try to make sure they’re doing the best for homeowners and businesses.

When asked if he’d support potentially pushing back the due date for property tax bills, Kaegi said the focus should be on the federal government supporting state and local governments instead of potentially taking funding from the county’s hospitals, which are the “front line of defense.”

“The financial ability of our front line of defense depends on the property tax system but … the federal government can also backstop it,” Kaegi said. “So how do we pay for that frontline defense? That’s why focusing on the federal government and the support that it’s providing is paramount in all of this. It has unique fiscal ability, unique liquidity, to provide support to the front line of defense against [coronavirus], and they should be doing that. But if they’re not, if our federal government is failing on that, how do we support the front line of defense? The property tax system has to be there.”

Go to Top