1999 Practitioners' Questions and Answers

Real Estate Transfer Tax

Note:The answers by the Department of Revenue to the questions below are not to be relied upon by taxpayers in lieu of a Private Letter Ruling and are not the kind of written information upon which a taxpayer may rely to request an abatement under the Taxpayer Bill of Rights. Where a conflict appears to exist between these answers and a form, instruction, regulation or bulletin issued by the Department, taxpayers are advised to follow the form, instruction, regulation or bulletin, contact the Department's Business Hotline at (217) 524-4772, or seek a Private Letter Ruling.

The July 1999 Regulatory Agenda on the Department's web site states that it is considering changes to the Real Estate Transfer Tax regulations in order to "clarify departmental policy, and answer common audit problems." Can the department give a preview of some of the issues it will be considering, especially since there are so few letter rulings regarding this tax?

Response:

The Department is considering changes to the Real Estate Transfer Tax regulations to clarify departmental policy and to answer common audit problems.

Due to recodification of the Revenue Act of 1939, the Real Estate Transfer Tax is now Article 31 of the Property Tax Code of 1994. Article 31 was amended by Public Act 91-555, which takes effect on January 1, 2000. Rulemaking is being considered to repeal the existing regulation and propose an updated replacement as part of the property tax regulations in Section 110 of Title 86.

Updates must be made because the existing regulations reference obsolete forms. Examples of calculations showing taxable consideration might be developed because audits reflect confusion on the part of preparers, especially with respect to assumed mortgages. Explanation of the various exemption provisions is being considered because practitioners and taxpayers often contact departmental staff for input in claiming exempt status.

In addition to revising the transfer declaration, the Department has developed a new form PTAX 203A to gather statistical information on transactions over $1,000,000. There may be a rule relating to this form.

In addition, there may be rules relating to electronic forms.