General Assembly Approves Legislation Allowing All Counties Except Cook County to Waive Interest Penalties for Late Property Tax Payments

Last week, the General Assembly adopted legislation that attempts to clarify the power of county boards to waive all or a portion of the interest penalty of 1.5% per month that is normally applied to late property tax payments. The bill must still be signed by the Governor before becoming law. The new provision authorizing the waiver of interest penalties is interesting both for what it does and what it does not do.

Senate Bill 685 adds a new paragraph to Section 21-27 of the Property Tax Code. Previously, this provision dealt only with the waiver of interest penalties for disabled senior citizens and those properties declared brownfields under the Environmental Protection Act. Senate Bill 685 does not amend Section 21-40 of the Property Tax Code, the statute cited regularly by county boards that have already adopted ordinances waiving interest penalties. Section 21-40 specifically deals with the waiver of interest penalties in relation to a natural disaster.

The new paragraph added to Section 21-27 by Senate Bill 685 allows county boards to waive interest penalties only for property tax installments other than the final installment. In other words, if a county has two property tax installments, this legislation does not authorize waiving interest penalties for second installment property tax bills. 

Additionally, the time period for the waiver of interest penalties does not match neatly with the waivers already adopted by several county boards. The waiver can be for either a period of 120 days from the effective date of Senate Bill 685 (which will not occur until the Governor signs the legislation) or until the first day of the first month during which there is no longer a statewide COVD-19 public health emergency.  It remains to be seen if or how any county boards may address this apparent inconsistency with previously adopted ordinances. Our previous alert on the subject has more information on the ordinances already adopted by counties other than Cook.

Finally, the provision does not apply to counties of 3,000,000 or more inhabitants.  As a result, Cook County is excluded from the authorization. For more information on the Cook County ordinance, please refer to our previous alert.

We will continue to monitor the changes prompted by COVID-19 as they affect the property tax assessment, appeal, and collection process and bring you more information as it becomes available.