May marks the final month of legislative action with adjournment scheduled for the 31st. Bills originating from either chamber had to pass by April 23 or receive a deadline extension.
In total, 759 bills passed both chambers. 407 House bills were sent to the Senate, while 352 Senate bills were sent to the House. Democrat-sponsored bills outnumbered Republican bills nearly 5 to 1 in each chamber – not surprising given the super-majority status the Democrats enjoy in the legislature.
The final weeks will likely see negotiations over the FY22 state budget, further ethics legislation, and a battle over the legislative redistricting map. Illinois is losing one congressional seat, which will put us at 17. Democrats control both chambers and the Governor’s office so they get to draw the new 118 state representative and 59 senate districts. Calls for an independent commission to take over this task have gone unheeded. Look for this to end up in the courts.
Status of state legislation NFIB opposes:
- HB62 HEALTH CARE FOR ALL – not called, deadline passed.
- HB74 PAID FAMILY LEAVE ACT – not called, deadline passed.
- HB85 WAGE INSURANCE ACT – not called, deadline passed.
- HB116 RENT CONTROL PREEMPTION ACT – not called, deadline passed.
- HB117 SECURE CHOICE SAVINGS PROGRAM – passed House, in Senate.
- HB353 MIN WAGE-ESSENTIAL WORKERS – not called, deadline passed.
- HB616 FAMILY AND MEDICAL LEAVE ACT – not called, deadline passed.
- HB3285 FAIR WORKWEEK ACT – not called, deadline passed.
- HB3437 HAZARDOUS MATERIALS WORKFORCE – passed House, in Senate.
- HB3530 EMPLOYEE SECURITY ACT – not called, deadline passed.
- HB3898 HEALTHY WORKPLACE (paid sick leave) – not called, deadline passed.
Status of state legislation NFIB supports:
- SB2140 COVID LIABILITY IMMUNITY – alive in the Senate on an extended deadline.
- SB2531 INCOME TAX – (SALT tax workaround) – passed Senate, in House.
- SB490 INCOME TAX – SMALL BUS ACCOUNT – not called, deadline passed.
- SB2268 MIN WAGE – DELAY IMPLEMENTATION – not called, deadline passed.
- HB3554-3560 – Workers’ Comp Reform – not called, deadline passed.
Governor pushes for “corporate loophole closures”
In search of more revenue from the business community, Governor Pritzker is proposing the elimination of a variety of tax credits, exemptions, and reimbursements – some of which he signed into law in 2019. There is speculation this is a form of payback due to the robust opposition by business groups to his graduated income tax proposal.
Rolling Back the Federal 100% Accelerated Depreciation Deduction
The administration proposes to amend the Illinois Income Tax Act to reverse a provision of the 2017 federal Tax Cuts and Jobs Act that allows a 100% depreciation deduction in the year of purchase for qualifying capital asset acquisitions such as machinery, computers, or equipment.
Limit Corporate Net Operating Loss Deductions to $100,000 Per Year for Three Years
Under current state law, corporations can carry forward losses that occur when tax deductions are greater than taxable income each year. These losses can be used to count toward profits accruing in future years. The proposal would cap the amount of net operating losses that a corporation could claim in one year to $100,000 for the next three years.
Eliminating Add-On Tax Credits for Construction Job Payroll Expenditures
Eliminating the add-on tax credits for construction job payroll expenditures. This was part of the “Blue Collar Jobs Act” sponsored by NFIB member and State Rep. Keith Wheeler.
Capping the Retailer’s Reimbursement
The Governor proposes capping the retailer’s discount. Illinois retailers currently retain 1.75% of the sales tax due to the State to help defray the cost of collection. The Governor proposes to cap the discount for each retailer at $1,000 per month. The State contends that this change would only impact large retailers, representing about 1% of all retailers.
Eliminating the Manufacturing & Machinery Exemption for Tangible Personal Property
This change proposes eliminating production-related tangible personal property from the corporate manufacturing machinery and equipment exemption, which had been added as part of the FY2020 budget.
Accelerating Termination of Biodiesel Sales Tax Exemptions
The termination of remaining state sales tax exemptions on biodiesel purchases would be accelerated to July 1, 2021, rather than in future years.
Halting the Repeal of the Corporate Franchise Tax
His budget includes a proposal to reverse the repeal of this tax, returning it to its structure prior to the passage of Public Act 101-0009 at a rate of 0.15% of paid-in capital when beginning business in the state, an additional 0.15 percent of any increase in paid-in capital during the year and an annual tax of 0.10 percent of paid-in capital.
Rolling Back the Federal 100% Foreign-Source Dividend Deduction
The 2017 federal Tax Cuts and Jobs Act created a new 100% dividend deduction for the foreign-source portion of foreign dividends as well as a 50% deduction for global intangible low-taxed income (GILTI).