Under Illinois law, which statement best describes how responsibility for paying transfer taxes is determined at closing?
Correct Answer
A) Statutory incidence, local custom, and contractual allocation may each point to a different party, so the answer depends on which tax is at issue and what the parties have agreed.
Illinois imposes transfer taxes at the state, county, and municipal levels, and each layer has its own statutory incidence. Additionally, home-rule municipalities may set their own rules. In practice, local custom often differs from statutory default, and the parties may contractually allocate payment responsibility differently still. No single rule governs every tax at every level, so the correct answer must account for all three variables: statute, custom, and contract.
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Related Topics & Key Terms
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Related Concepts
Usury is the practice of charging an interest rate that exceeds the maximum rate permitted by state law. Usury laws protect borrowers from excessive interest charges on loans.
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An adjustable-rate mortgage (ARM) has an interest rate that changes periodically based on market conditions, typically after an initial fixed-rate period. The rate adjustment is tied to a financial index plus a margin.
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