SPRINGFIELD - Legislation that would have allowed the state to disclose private business financial information to third party auditors was defeated in the State House on Wednesday.

House Bill 2717, sponsored by State Rep. Chris Welch (D-Westchester), would have helped firms such as Chicago-based Azavar Government Solutions, a firm that say it "works with municipalities to ensure that they receive every penny due to them from taxes, franchise fees, and utility providers, enabling fairer, more accurate tax and fee collection, and maximizing future as well as past revenues."

The bill would have allowed the Illinois Department of Revenue to share business records to vendors such as Azavar who work on behalf of municipalities going after retail tax dollars, by amending the Retailers Occupation Tax Act (ROTA).

Azavar claims it has 34 municipal clients in Illinois, including Collinsville and O'Fallon, which have contingent fee arrangements with the company.

Collinsville also is considering an additional service provided by the company for collecting hotel and restaurant taxes. The proposal is an amendment to an existing contingency fee agreement, that would cost $2,310 per month for three years. The cost would be discounted to $76,230 over the term if the city agrees to "a video testimonial regarding the high quality and benefits of Azavar Services and Azavar Software."

Before Wednesday's House vote that went down 61-42-3, Welch's bill had been met with resistance by business groups.

Earlier this week the Illinois Retailers Merchants Association (IRMA) said it had obtained emails showing that municipal officials in Elgin, Lockport, Homer Glen and Rockford "illegally" shared local businesses tax information with Azavar.

According to a report by Illinois News Network, IRMA president Robb Karr said that city officials in Lockport were instructed by Azavar employees to turn over documents to the firm via a compact disc.

“Please do not copy us on the email, as we are still working with IDOR to be able to contact them directly on behalf of our clients,” Azavar vice president Scott Shamberg wrote in an email to Lockport Finance Director Erik Brown, according to the report.

The Illinois chapter of the National Federation of Independent Business also opposed the bill.

“This bill would expose (businesses') private tax information to a third party that is incentivized to find new tax liabilities,” said Mark Grant, president of the National Federation of Independent Business’ Illinois chapter.

How did local lawmakers vote?

Charlie Meier (R-Okawville): No

Monica Bristow (D-Alton): No

Jerry Costello (D-Red Bud): No

Katie Stuart (D-Collinsville): Yes

Jay Hoffman (D-Belleville): Yes

LaToya Greenwood (D-East St. Louis): Yes

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