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City of Chicago, Transfer Tax Purchases & Penalties - Effective January 1, 2016 - 01/04/2016

CITY OF CHICAGO TRANSFER TAX PURCHASES & PENALTIES

Effective January 1, 2016 all City of Chicago transfer stamp purchases must be processed within MyDec, the online stamp purchasing website, established by the State of Illinois (https://mytax.illinois.gov/_/)

Paper forms will no longer be accepted by the City of Chicago.  State of Illinois & County transfer tax forms are not affected by this change.

As of January 1, MyDec will automatically assess applicable interest and late penalty charges on the declaration at the time Chicago transfer stamps are purchased when payment for the stamps is made more than 7 days after the date of the transfer in question.  Apparently, MyDec is now programmed to compare the date entered in Section 4, question 1 “The earlier of the Date of Transfer or Date of Recording” field to the date stamps are actually purchased and, if the difference is greater than 7 days, charge interest and late penalties accordingly.  Inquiries regarding this process or requests for penalty abatement for reasonable cause may be directed to taxpolicy@cityofchicago.org

The other requirements for purchasing a Chicago transfer stamp do not appear to have been changed. All transfers as defined under the City Ordinance will still require a Full Payment Certificate (“FPC”) to be issued by the Chicago Water Department.  Applications for an FPC will take a minimum of 10 business days for processing, and an FPC is good for 60 days from the authorization date listed on the processed FPC.

One of the following will be required to ensure a complete FPC application:
1. A copy of the Deed for the intended transaction (must be submitted if requesting an FPC
    for a tax exempt transaction)
2. Title Commitment Schedule A
3. Signed Sales Contract

FPC Applications can be accessed by clicking the following link:

http://www.cityofchicago.org/city/en/depts/fin/provdrs/water_division/svcs/_apply_for_watersewerfullpaymentcertificate.html

Please keep this information in mind when you are preparing to close your next transaction for property in Chicago.  If there will be any delay in the purchase of the transfer stamp the penalty and interest may be charged and should be considered at the time the stamp is ready for purchase.  If the delay is a result of an issue with receipt of an FPC please consult with a Chicago Title Underwriter.

As always, please contact our office or your Account Executive with any questions or concerns.  We will be happy to share with you any knowledge we have about the aforementioned penalty and interest scenario as well as discuss potential solutions to avoid the possible imposition of such penalties and interest.

You can find a full version of the Code referred to herein by following the attached link:

http://www.amlegal.com/nxt/gateway.dll/Illinois/chicago_il/municipalcodeofchicago?f=templates$fn=default.htm$3.0$vid=amlegal:chicago_il

Sincerely,
Chicago Title Insurance Company


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