Reed Smith’s State Tax Group has a long history of successfully representing and advising clients with respect to their State of Illinois and local taxes. We have experience with all Illinois taxes, including all City of Chicago and Cook County taxes. Our broad state and local tax experience allows us to craft the right solution for our clients, whether through legislative, regulatory, or other administrative representation; in litigation for local and state administrative bodies; and in the state and federal courts. Our lawyers draft proposed legislation, comment on proposed regulations, and sometimes just know the right person to contact to address our clients’ concerns.
We defend audits and settle controversies with state and local departments of revenue and with the Illinois Attorney General’s Office. Our litigation inventory includes consumer class action defense, protest and refund litigation before the Illinois Independent Tax Tribunal, Informal Conference Board, Board of Appeals, administrative hearings, and in state and federal courts at all levels.
In addition to Illinois tax controversy, we regularly counsel businesses and individuals on how to reduce their state and local tax liabilities across all tax types, including Illinois franchise, income, sales, and use and excise excises, as well as local taxes, such as parking, lease transaction, and amusement taxes. Our Illinois tax lawyers also have extensive experience in transactional matters, from consulting on operations-related transactions, to mergers and acquisitions – in both planning and due diligence.
Some of the Illinois state and local tax issues in which we regularly defend and counsel clients include:
- Nexus
- Exemptions
- Residency
- Sourcing
- Incentives
- Apportionment
- Audit defense
- Transfer pricing
- Officer liability
- Unclaimed property
- Business/nonbusiness income
- Class action consumer fraud defense
- Software & digital/cloud products
- Chicago lease & amusement taxes
- Mergers & acquisitions
- Unitary business groups
- False Claims Act
- Net operating losses
- Throw-out & throwback
- Cost of performance
Below are some of the Illinois and local tax issues and opportunities we have recently worked on for our clients:
- Advised manufacturing company regarding destination sourcing, taxation of foreign royalties, and alternative apportionment. Reversed $2+ million deficiency into $4+ million refund.
- Represented food processing company regarding taxation of nonbusiness gains realized from sale of minority investment in partnership.
- Assisted multiple companies with amendments to their previously reported Illinois franchise tax apportionment percentages, paid-in capital amounts, and unreported mergers and acquisitions.
- Represented professional service company in defense of reporting the gains it received from the sale of its wholly owned subsidiary engaged in a separate professional service business, as nonbusiness income.
- Substantially reduced sales and use tax assessment for highly complex service and logistics company concerning proper taxation of services and sales of tangible personal property under the Illinois retailers’ and service occupation taxes.
- Represented federally chartered bank with respect to use of net operating losses and taxation of excess inclusion income.
- Represented finance companies with respect to refunds related to bad debt deductions.
- Advised private equity companies in regard to state taxes relating to numerous portfolio company acquisitions and divestitures.
- Advised high-net worth individuals regarding Illinois residency tax issues.
- Represented multiple fund advisors regarding proper sourcing of fund management services.
- Represented and advised multiple companies in defense of consumer fraud tax case.
- Represented aircraft owners in multiple Illinois rolling stock exemption audits.
- Represented company in defense of successor liability claim arising from acquisition of assets from an assignee for the assignment of the benefit of creditors.
- Defended audit of digital and software as a service company with respect to Chicago lease transaction tax.
- Defended client in regard to enterprise zone sales and use tax exemption.
- Assisted trade association with blocking the enactment and the enforcement of unconstitutional local taxes.
- Advised multiple companies regarding Illinois income, sales, use, and property tax exemptions for alternative energy projects in the state.
- Assisted multiple companies with respect to State of Illinois and City of Chicago voluntary disclosures.
As part of our full service for clients with Illinois state and local taxes issues, we have a unique, fully searchable database of unpublished authority, including administrative decisions, unpublished trial court decisions, and unpublished legal briefs. We also maintain regular and direct lines of communication with high-level state officials involved in all areas of Illinois and local taxation and government.
