Illinois DOR wants money back from overpaying local governments

Sheet of US one hundred dollar bills, elevated view

By Bob Balgemann

Reporter

BOONE COUNTY- The Illinois Department of Revenue (DOR) has overpaid local governments by $168 million in corporate replacement taxes.

Now, DOR wants its money back.

Belvidere School District 100 was the biggest loser in Boone County, having been overpaid by $330,354.69 in 2013, according to a list on the DOR website.

Boone County government was overpaid by $60,926.16 with other governmental units having to repay lesser amounts.

For example, the Belvidere Park District received $11,835.80 more than it should have, while the overpayment to Manchester Township was $67.21.

A few things have happened since the problem became known.

State Rep. Bob Pritchard, R-Sycamore, said the state is working on a plan to recover the money over several years, perhaps by withholding amounts from future payments. They reportedly are not considering any interest charges for use of the money.

Greg Brown, District 100’s chief operations officer, said one plan being considered is for one-half of the monies being paid in January 2017, with the other half in January 2018.

“However, rather than have local governments issue checks to the state, future replacement tax payments will be reduced by the amount owed.”

In addition, a bill is pending in Springfield that would forgive local governments and not require any reimbursement.

He said that if necessary, budget amendments will be made by District 100 once a decision has been made at the state level.

Administrator’s birthday

At the April 20 meeting, the Boone County Board discussed that Boone County government would lose a little over $60,000 in revenue.

County Administrator Ken Terrinoni said the repayment would come out of the county’s general fund.

Municipalities receive varying amounts of replacement taxes each year.

For example, the City of Belvidere expects to be paid $468,083 during the 2016-2017 fiscal year, which began May 1. That’s an increase from the $427,808 awarded the previous year.

Belvidere received $68,000 of overpayments in recent years.

Here are the other local governmental entities and amounts of money the DOR overpaid:

Schools

North Boone Community Unit School District 200 was overpaid $14,476.70.

Villages

Capron owes $348.49.

Townships

Belvidere owes $9,483.36.

Flora owes $1,467.43.

Bonus owes$460.16; Boone, $383.76.

Spring owes $322.16.

Poplar Grove owes $308.43.

Leroy owes $207.08.

Caledonia owes $91.67.

Manchester owes $67.21.

Township road and bridge funds

Belvidere’s owes $9,908.22.

Flora owes $6,483.47.

Bonus owes $1,443.70.

Spring owes $726.64.

Poplar Grove owes $523.31.

Leroy owes $501.03.

Boone owes $432.36.

Caledonia owes $379.30.

Manchester owes $180.01.

Fire protection districts

Boone II owes $3,525.61.

Boone I owes $170.34.

Boone IV owes $60.41.

Manchester Rural V owes $10.28.

North Boone III owes $335.89.

Boone County Conservation District

Boone County owes $10,507.51.

How it works

Replacement tax is money collected by the state and distributed to local governments to replace dollars they lost in the 1970s, when their power to impose personal property tax on corporations, partnerships and other business entities was taken away.

Rep. Pritchard, who represents a small area of Boone County, said the overpayments were discovered during a recent tax system modernization initiative by the state.

Illinois corporations pay both corporate income tax and corporate personal property replacement taxes (CPPRT).

Apparently, some of the income tax money was deposited into the CPPRT account and paid to some 6,500 units of local government.

CPPRT payments to local governments totaled more than $1.3 billion in 2014 and $1.4 billion in 2015.