Illinois General Assembly

The House and Senate were in session this week Tuesday through Thursday.

On Thursday, the Governor proposed his vision fora graduated income tax rate structure. The details of his proposal are being covered extensively in the press so I won't reproduce all the details here.  I would note that his proposal would raise the "regular" portion of the corporate income tax to 7.95% from the current 7% rate.  

The Governor's proposal would also provide that individuals subject to the highest rate, 7.95%, would be required to pay tax at the 7.95% rate on all income, not just the income in excess of $1,000,000. To my knowledge, this would an unusual result in comparison to other state graduated income tax structures. Please let me know if you are aware of any other states that have a similar provision for their highest tax bracket.  

As you know, the Governor's graduated income tax proposal could only go into effect if there is an amendment to the Illinois constitution to authorize the imposition of a graduated income tax structure. The earliest such an amendment could be placed on the ballot for approval by the voters is November 2020.  As a result, the likely earliest date a law adopting a graduated income tax structure could be effective would be January 1, 2021. 

The Chamber opposes amending the constitution to authorize a graduated income tax structure.

 

The House and Senate are in session next week Tuesday through Thursday. 

The Senate Revenue committee has scheduled a hearing on March 13.  Here is a link to the bills that have been posted for committee.  At this time, we don't know which of the bills may be considered by the committee.

The House Revenue committee will meet next week on Thursday morning.  Chairman Zalewski advised that there will be a subject matter hearing on on the Cook County Assessor's proposal to require certain information from owners of income-producing property.  HB 2217 is the House version of the legislation.  SB 1379 is the Senate version of the legislation.  Here is a link to the bills that have been posted for Revenue committee next week. Please note that the overwhelming majority of the bills posted have been assigned to subcommittees.  I anticipate that only a limited number of bills will actually be considered by the committee next week.

The Senate Revenue committee met on Wednesday.  Here is a  link to the bills considered by the committee this week. 

The committee considered SB 1379 the Cook County Assessor's proposal discussed briefly above.  We oppose both the Senate and House versions of the legislation as currently constituted.  Carol Portman of Taxpayers' Federation and I provided a detailed analysis of the flaws in the legislation and suggestions for changes prepared by a mutual member.  Along with Illinois Manufacturers' Association and the Illinois Retail Merchants Association we also provided recommendations for changes to the legislation to Senator Hutchinson, the Senate sponsor.  After testimony by the Assessor, Carol Portman on behalf of our group of opponents and testimony in opposition by a representative of the Building Owners and Managers Association (BOMA), the bill passed out of committee upon a promise by Senator Hutchinson to hold the bill on second reading while discussions continue between the opponents and the Assessor on fixing the flaws in the current version of the legislation.

The House Revenue committee held a hearing on Thursday. No legislation was considered by the committee this week. The committee held a another subject matter hearing on FY 20 revenue estimates and took testimony from representatives of the Illinois General Assembly's Commission on Government Forecasting and Accountability (COGFA).  COGFA presented its FY 20  Economic Forecast and Revenue Estimate and FY 2019 Revenue Update.

Updates on Chamber Tax Institute legislation:

SB 1349 - (Weaver) - Amends the Uniform Penalty and Interest Act - The bill passed the Senate unanimously on Thursday.

SB 1613 - (Sims) Enterprise Zones - assigned to the Senate Commerce and Economic Development committee, Consideration postponed this week.  It has been posted for consideration next week.

SB 1655 - (Weaver) Creates the Small Business Asset Purchase Account - assigned to Senate Revenue committee, The bill was moved to the subcommittee on Tax Exemptions and Credits this week.

SB 1686 - (Tracy) - Expands the temporary storage exemption - assigned to Senate Revenue committee, The bill was moved to the subcommittee on Tax Exemptions and Credits this week.

SB 1676  - (Tracy) - Reinstate the expanded temporary storage exemption, - assigned to Senate Revenue committee, The bill was moved to the subcommittee on Tax Exemptions and Credits this week.

HB 2139 - (Wheeler) - Amend the False Claims Act to correct abuses allowed under current law - assigned to House Executive committee, The bill remains assigned to House Executive committee.

SB 1714 - (Weaver) -  Amend the False Claims Act to correct abuses allowed under current law - assigned to Senate Judiciary committee. The bill remains assigned to Judiciary committee.

SB 1328 - (Holmes) - Creates a bonus investment credit for small businesses - assigned to Senate Revenue committee.  The bill was assigned to the subcommittee on Tax Exemptions and Credits.

SB 1350  - (Weaver) - Amends the R & D credit to modify the base period calculation and make the credit permanent - assigned to Senate Revenue committee. The bill was assigned to the subcommittee on Tax Exemptions and Credits.

HB 2573 - (Zalewski) - Amends the Revised Uniform Unclaimed Property Act to modify certain anti-business provisions - assigned to House Revenue committee.  The bill was assigned to subcommittee.

SB 1591 - (Sims) - Creates sales and use tax and electricity excise tax exemptions for data centers - assigned to Senate Revenue committee. The bill was postponed from consideration and remains before the committee.

SB 1656 - (Weaver) - Amends the Illinois Income Tax Act to reinstate and extend the sunset date of the personal property tax replacement income tax - assigned to Senate Revenue committee.  The bill was postponed from consideration and remains before the committee.

Amendments to tax legislation this week

SB 1379 - Replaces everything after the enacting clause. Reinserts the provisions of the introduced bill with the following changes: (1) provides that the term "income producing property" includes only non-owner-occupied real property; (2) defines "property"; (3) provides that failure to submit income and expense data shall result in a penalty of 0.5% (in the introduced bill, 2%) of the prior year's assessed value; (4) provides that the taxpayer shall not be required to pay more than $100,000 in penalties per property; (5) removes provisions from the introduced bill providing that, if the taxpayer fails to submit income and expense data, the taxpayer shall not be permitted to appeal the assessment of that income producing property for the applicable taxable year; and (6) provides that the chief county assessment officer is not prohibited from disclosing compiled and anonymized income and expense data. Effective immediately.

SB 1515 - Original bill:   mends the Illinois Income Tax Act. Creates a deduction for amounts included in the taxpayer's adjusted gross income for certain fringe benefits. Effective immediately. Amendment:  Replaces everything after the enacting clause. Reinserts the provisions of the introduced bill with a technical correction concerning the applicable Section of the Illinois Income Tax Act. Effective immediately.

SB 1595 - Further amends the Film Production Services Tax Credit Act of 2008. Provides that the term "Illinois production spending" includes the compensation, not to exceed $1,000,000 per employee, for up to 4 contractual or salaried employees who perform services with respect to an accredited production. Provides that those employees are not required to be residents of the State.

HB 2217 - Replaces everything after the enacting clause. Reinserts the provisions of the introduced bill with the following changes: (1) provides that the term "income producing property" includes only non-owner-occupied real property; (2) defines "property"; (3) provides that failure to submit income and expense data shall result in a penalty of 0.5% (in the introduced bill, 2%) of the prior year's assessed value; (4) provides that the taxpayer shall not be required to pay more than $100,000 in penalties per property; (5) removes provisions from the introduced bill providing that, if the taxpayer fails to submit income and expense data, the taxpayer shall not be permitted to appeal the assessment of that income producing property for the applicable taxable year; and (6) provides that the chief county assessment officer is not prohibited from disclosing compiled and anonymized income and expense data. Effective immediately.

HB 2217 - In provisions concerning confidentiality of income and expense data, provides that the provisions do not prohibit the chief county assessment officer from disclosing compiled and anonymized income and expense data.

HB 2578 - Makes changes to the introduced bill to provide that provisions of the Property Tax Code concerning increases in a property's overall valuation that are directly attributable to the investment, improvement, replacement, or expansion of railroad operating property through State or federal government programs necessary for high speed passenger rail transportation sunset on December 31, 2029 (currently, those provisions sunset on December 31, 2019; in the introduced bill, the sunset date is removed).

HB 3608 - Original bill:  Amends the Illinois Income Tax Act. Increases the amount of tax due that requires the payment of estimated taxes to $1,000 (currently $500). Effective immediately. Amendment: Provides that the introduced bill applies for taxable years ending after December 31, 2019 (in the introduced bill, December 31, 2018).

Rulemaking