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SPRINGFIELD
- Business groups representing employers of all sizes across the state held a press conference today to provide evidence that legislation, allowing third parties hired by local governments to view Illinois businesses and taxpayers' confidential sales tax information, would codify current illegal behavior of both local governments and a contingency fee-based company called Azavar. Evidence indicates private sales tax information has been already shared illegally with Azavar, and the company explored ways to evade the protections in current law. HB 2717, proposed by Representative Chris Welch (D-Westchester) is poised for consideration in the Illinois House.
Currently, the tax information local governments receive from IDOR is protected by strict confidentiality requirements imposed by IDOR. Allowing access to this information outside a strict chain-of-custody endangers taxpayer information. In 2016, the business community conducted a FOIA of several municipalities' communications with Azavar and revealed certain local leaders were already sharing confidential sales tax information with the auditing firm. This action violates current state law. This fact was later confirmed at a hearing in May 2017, when the bill's sponsor and local officials admitted local governments "up and down the state" are engaging in this activity.
The business coalition along with the Illinois Department of Revenue have suggested several changes to the bill, including removal of the contingency fee proposal secured by Azavar (which in some cases is upwards of 45%). These proposals have been rejected.
"We cannot allow sensitive financial information to be jeopardized to legitimize one company's business plans or legalize illegal behavior of government officials. Local governments have no reason to utilize third party companies especially since the IDOR provides assistance to local governments, free of charge, to help them ensure they are receiving the correct tax revenues. There are real doubts that local governments need anything more than the geo-location list IDOR provides free of charge," said Rob Karr, president & CEO, IRMA.
"Allowing third party access to private tax information violates a fundamental tenet of our tax system. This proposal is a blatant attempt to pass special legislation to benefit a contingency fee-based firm. It's one more costly and cumbersome bill demonizing job creators," said Mark Denzler, Vice President & Chief Operating Officer, Illinois Manufacturers' Association.
"This legislation sets a very dangerous precedent by allowing confidential taxpayers sales tax information to be shared with a third-party entity. In fact, the notion that a contingency fee-based firm is pushing this legislation should give lawmakers pause about the real intention of this measure," said Maurice Scholten, Legislative Director, Taxpayers' Federation of Illinois.
"Small businesses already risk their personal finances and reputation trying to live the entrepreneurial dream. This bill would expose their private tax information to a third party that is incentivized to 'find' new tax liabilities. And now this new information should give the bill sponsors pause as they consider whether to continue pushing legislation with a dubious history." stated Mark Grant, State Director, National Federation of Independent Business.
"Not only does this bill put at risk sensitive financial information of our state's taxpayers, all for the benefit of a single contingency-based firm on a fishing expedition, it seeks to legitimize the illegal behavior of some local governments. We urge state lawmakers to stand up for taxpayers by speaking out and voting against this proposal," said Jack Lavin, president & CEO, Chicagoland Chamber of Commerce.
This proposal failed to pass the Senate twice in 2016 and was met with opposition by many business groups, including the Illinois Retail Merchants Association, the Taxpayers' Federation of Illinois, the Illinois CPA Society, the Illinois Manufacturers' Association, the Illinois Chamber of Commerce, the National Federation of Independent Business, the Chicagoland Chamber of Commerce, the Illinois Petroleum Marketers Association and the Illinois Association of Convenience Stores.
About the Illinois Retail Merchants Association (IRMA)
One of the largest state retail organizations in the United States, IRMA serves as the voice of retailing and the business community in state government. Founded in 1957,
IRMA represents more than 20,000 stores of all sizes and merchandise lines. From the nation's largest retailers to independent businesses in every corner of the State, merchants count on IRMA to fight for the best possible environment in which to do business in Illinois.
About the Illinois Manufacturers' Association (IMA)
The Illinois Manufacturers' Association is the only statewide association dedicated exclusively to advocating, promoting and strengthening the manufacturing sector in Illinois. The IMA is the oldest and largest state manufacturing trade association in the United States, representing nearly 4,000 companies and facilities.
About the Taxpayers' Federation of Illinois
(TFI)
The Taxpayers' Federation of Illinois is the state's most respected non-partisan state and local tax and fiscal policy advocacy organization. TFI conducts policy research, educates public officials and others on current issues, advocates for a responsible tax structure that encourages economic growth, and supports efficient delivery of government services. Created to serve Illinois' citizens in 1940, TFI has been integrally involved in all major Illinois tax and fiscal policy discussions for over 75 years.
About the National Federation of Independent Business (NFIB)
NFIB is America's leading small business association, promoting and protecting the right of our members to own, operate, and grow their businesses. NFIB advocates for small businesses on issues ranging from the economy, healthcare, taxes and government regulations.
About the Chicagoland Chamber of Commerce
The Chicagoland Chamber of Commerce represents over 1,000-member companies, their 400,000 employees, and over $24 billion in revenue. We combine the power of our membership with our legacy of leadership and business advocacy to drive a dynamic economy. We focus on delivering value for our members, making Chicagoland a world-class place to live and work. Visit ChicagolandChamber.org.
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