Which of the following statements about Illinois and Chicago real property transfer taxes is NOT correct under current Illinois law?
Correct Answer
A) The City of Chicago transfer tax replaces the Illinois state transfer tax for properties located within Chicago city limits.
Statement A is false and is therefore the correct answer to this NOT question. The City of Chicago transfer tax (Chicago Municipal Code § 3-33) is an additional, locally imposed tax layered on top of — not a substitute for — the Illinois state real property transfer tax (35 ILCS 200/31-1 et seq.). A Chicago property sale triggers both the state tax and the city tax simultaneously. The state tax is not waived, suspended, or replaced simply because a municipality has enacted its own transfer tax. Buyers and sellers in Chicago are therefore subject to three separate transfer tax obligations: the Illinois state tax, the Chicago city tax (split between buyer and seller), and potentially the Cook County tax.
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