Under current Illinois law, how does Chicago's municipal real estate transfer tax relate to the Illinois state real estate transfer tax on the same deed?
Correct Answer
C) Chicago's municipal transfer tax is a separate, additional layer that can stack with the Illinois state transfer tax and any other applicable local transfer taxes.
Chicago's municipal real estate transfer tax is imposed under the city's home-rule authority and operates independently of the Illinois Real Estate Transfer Tax Act (35 ILCS 200/31-1 et seq.). The state tax and the city tax have separate legal bases, separate rates, and separate remittance requirements. Both can apply to the same transaction simultaneously, meaning a Chicago closing may trigger the Illinois state transfer tax, the Cook County transfer tax, and the Chicago municipal transfer tax as distinct, stacking obligations.
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