Creation of Illinois Tax Lien Registry

Effective January 1, 2018, the State Tax Lien Registration Act (“Act”) will create a state tax lien registry to be maintained by the Illinois Department of Revenue (“Department”) for filing notices of tax liens that are in favor of or enforced by the Department.

The Act is limited in scope to tax liens on real and personal property (tangible and intangible) for unpaid final tax liabilities administered by the Department. If a debtor fails to pay any final tax liability, then within three years from the date of the final tax liability, the Department may file a notice of tax lien in the aforementioned registry, which notice shall include: (i) the name and last-known address of the debtor; (ii) the name and address of the Department; (iii) the tax lien number assigned to the lien by the Department; and (iv) the basis for the tax lien (including the amount owed by the debtor as of the date of filing in the tax lien registry).

The new law provides that a tax lien is perfected by inclusion in the registry and thereafter attaches to all existing and after-acquired property of the debtor located within Illinois. The tax lien shall remain a lien upon the debtor’s property for 20 years from the date of filing, unless the Department releases the lien earlier by filing a notice of release in the registry. Please note the new law does not invalidate any liens filed by the Department with a county recorder of deeds prior to January 1, 2018.

Please contact Michael D. Rothstein in Chicago (mrothstein@dykema.com; 312-627-2280), Matthew S. Raczkowski in Chicago (mraczkowski@dykema.com; 312-627-2594), or your Dykema relationship attorney if you have any questions.