Illinois Department of Revenue Releases FY 2019 Corporate Personal Property Replacement Tax Estimates

Posted August 8, 2018 in Legislative briefs

The IGFOA does not advocate on or for specific outcomes of legislation or other proposals. Accordingly, the IGFOA takes no position on information disseminated, neither encouraging or discouraging action, and leaving the decision on how to proceed with individual members.

On August 1, the Illinois Department of Revenue (IDOR) released the statutorily required estimated entitlements in State Fiscal Year (SFY) 2019 for each entity eligible for Corporate Personal Property Replacement Tax (CPPRT) revenues.

IDOR estimates that replacement tax allocations for approximately 6,500 local taxing districts will total around $1.1 billion. That is down from SFY 2018 when CPPRT allocations totaled more than $1.2 billion. **[Available via this link](http://www.revenue.state.il.us/LocalGovernment/ReplacementTaxEstimate/RASEST19.xls)** is the breakdown of the estimated revenues for each local government entity eligible for CPPRT revenues.

IDOR listed the following reasons that allocations are estimated to be lower than SFY 2018:

• Due to changes in federal tax law, SFY 2018 replacement tax revenues were higher, but these revenues would only be realized in SFY 2018 and not in any subsequent year.
• The annual reconciliation of tax payments and returns will result in a SFY 2019 transfer of approximately $38 million from replacement tax to income tax. These adjustments will be spread out in five equal installments effecting disbursements in October 2018, January 2019, April 2019, May 2019 and July 2019.
• The statutory refund fund transfer from the Personal Property Tax Replacement Fund to the Refund Fund is $28.7 million because in SFY 2018 replacement tax refunds paid were more than replacement tax refund revenues.
• The business income tax refund fund percentage has decreased from 17.5% in SFY 2018 to 15.5% in SFY 2019.
• The SFY 2019 budget enacted into law (Public Act 100-0586) authorized $302.4 million in diversions out of the CPPRT fund for state expenses in FY 2019. That is an increase over SFY 2018 when $297 million was diverted out of the CPPRT fund for state expenses.

IML opposes any CPPRT diversions and has proposed finding a long-term solution to eliminate the annual fight to retain this funding.

As always, IML staff will continue to monitor any prospective legislative developments and aggressively advocate on behalf of our membership. Should you have any questions, please contact our Legislative Department at (217) 525-1220 or [IMLLegislation@iml.org](mailto:IML