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SB 3543

ESTATE TAX-INTEREST ON REFUNDS

104th Regular Session Introduced by Chris Balkema and 1 co-sponsor

The bill ensures interest on estate tax overpayment refunds at the Uniform Penalty and Interest rate and clarifies timing and funding for issuing those refunds.

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Bill Summary · SB 3543

Summary of SB3543 (104th Illinois General Assembly)

Purpose and intent

SB3543 amends the Illinois Estate and Generation-Skipping Transfer Tax Act to ensure that interest is paid on refunds resulting from the overpayment of estate tax. Specifically, it links the interest rate for such refunds to the rate established under the Uniform Penalty and Interest Act, and sets timing safeguards for when refunds must be issued.

Key provisions and changes

  • Interest on refunds for overpayments

    • If there is an overpayment of tax under the Estate Tax Act, any refund must accrue interest at the rate specified in the Uniform Penalty and Interest Act.
    • Interest accrues if the overpayment is not refunded within the later of:
    • 30 days after the date of the overpayment, or
    • 30 days after the last date prescribed for filing a return under the Act.

  • Allocation and timing of funds

    • The Act already directs funds collected (taxes, interest, penalties) to the State Treasurer and then out to the General Revenue Fund and a dedicated Estate Tax Refund Fund.
    • On and after July 1, 2012, 94% of such amounts go to the General Revenue Fund and 6% to the Estate Tax Refund Fund.
    • The Estate Tax Refund Fund is dedicated to paying refunds for overpayments under the Act. If funds exceed the amount needed for refunds, excess may be transferred to the General Revenue Fund.
    • The Treasurer must order refunds from the Estate Tax Refund Fund only to the extent that such amounts have been deposited and retained.

  • Public Act 97-732 and irrevocable appropriation

    • The legislation codifies (via reference to Public Act 97-732) that there is an irrevocable and continuing appropriation from the Estate Tax Refund Fund for paying refunds on order of the Treasurer.

  • Collection and penalties (unchanged framework context)

    • The bill retains the existing collection framework by county treasurers, reporting, and the potential penalties for failure to remit collected amounts to the State Treasurer on time (with provision for waivers on a case-by-case basis for extraordinary, uncontrollable circumstances).

Who is affected

  • Taxpayers with Illinois estate/Generation-Skipping Transfer tax liabilities who overpay and are due refunds.
  • The State Treasury, which administers the refund fund and oversees distribution and timing of refunds.
  • County Treasurers, who collect and remit taxes and related amounts to the State Treasurer.
  • The Attorney General, which receives copies of monthly reports as part of the collection process.

Procedural and timeline aspects

  • Refunds must be issued with interest if not paid within 30 days after the overpayment date or after the filing deadline, whichever is later.
  • The Estate Tax Refund Fund operates with a 94/6 split between General Revenue Fund and Estate Tax Refund Fund (effective since 2012) to manage refund payments.
  • The Treasurer’s procedures for ordering refunds, transfers of excess funds, and continuing appropriation are specified, ensuring ongoing funding for refunds.

Additional notes

  • The bill includes sponsor information: Sen. Chapin Rose (primary) with Sen. Chris Balkema as a co-sponsor.
  • The bill was introduced February 5, 2026, and references the Illinois Estate and Generation-Skipping Transfer Tax Act and related funding mechanisms.

If you’d like, I can provide a plain-language FAQ or a side-by-side comparison with the current law to highlight every substantive change.

Compiled from official sources — confirm details with the bill’s official record.

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