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March 16:  The first quarter Tax Institute meeting featuring Roger Koss new IDOR Audit Bureau Manager. RSVP to

March 18:   Please join us for the third annual Chamber Day. Chamber Day is the annual meeting of the Illinois Chamber federation of both Illinois chamber members as well as dozens of community based chambers and their members. Register Here

April 20:  Save the date for the next webinar - the audit process - and how to challenge an audit.  Details to follow
February 28, 2020
State and Local Tax  
This Week 

Illinois General Assembly

The House and Senate returned to Springfield on February 25 and were in session through Thursday.

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

The Senate Revenue committee met on Wednesday. One bill was considered and approved unanimously by the committee, SB 2481. SB 2481 eliminates the $10,000 trade-in cap on automobiles enacted last year and effective January 1.  

SB 2481 reinstates the trade in language in the Use Tax and the Retailers' Occupation Tax that was in effect prior to the legislation that added the trade in cap.  In order to balance out the revenue loss anticipated from the repeal of the trade in cap, the Private Vehicle Use Tax is amended to increase the amount of tax due on private party sales of motor vehicles. 

SB 2481 is now on third reading in the Senate. The Illinois Chamber supports SB 2481.

The Senate Revenue committee is scheduled to meet on March 4.  A number of items have been posted for committee consideration, but it is unclear today as to what will actually be called.

The Senate Revenue committee is scheduled to hold a subject matter hearing on  SB 1432.  This legislation provides for that a taxpayer who may claim a qualifying student as a dependent is allowed a credit of up to $2000 for qualified tuition and fee expenses paid by the taxpayer.  The legislation sets forth a definition of "qualifying student."

The House Revenue committee met on Thursday.  No substantive action was taken on legislation at the hearing.  The committee hearing consisted of a subject matter hearing on HB 4138 the "Phase Out Corporate Giveaways Compact."  No vote was held on HB 4138.

The testimony in favor of the proposal was over an hour of mind-numbing academic theorizing from a representative of the Americans for Prosperity and an academic who was present as a representative of the Mercatus Institute.  Their premise is that all tax incentives are bad and the proposed compact would start states down the road to somehow magically eliminate tax incentives. 

I testified in opposition to HB 4138.  I pointed out that among its other flaws, the legislation would authorize a private right of action by any "taxpayer resident" who wishes to challenge the granting of a company-specific tax incentive. I noted that track record of the Illinois False Claims Act demonstrates the problems endemic in granting a private right of action that authorizes third parties to go to court to seek a determination involving taxes of someone else. At the best, the language of the legislation would result in the Attorney General wasting resources by going into court to respond to specious claims.  At the worst, the Attorney General on behalf of the party bringing the case in court would end up adverse to the Department of Commerce and Economic Opportunity  and/or the Department of Revenue and courts would engage in second guessing incentive awards. 

The compact would outlaw state-level incentives.  By outlawing only state-level incentives and not local incentives, the legislation would give an advantage to more affluent portions of the state that could better afford to offer incentives as an inducement to locate in their particular area.

Finally, even though the compact would be an agreement between member states, the restrictions would have broader application to attempts by Illinois competing with multiple states to put together incentive packages.Take for example a situation where a company proposes to relocate its headquarters, manufacturing facility or build a data center.  Five states, including Illinois, would like the company to relocate to their state.  Illinois and one of the other states are members of this compact.  In that situation, because of the restrictions of the compact, Illinois would be precluded from offering any incentives to the company for relocation to Illinois, but all of the other states, with the exemption of the other compact state, would free to offer incentives.  Thus, the non-compact states would have an advantage.

The House Revenue committee is scheduled to meet on March 5. The committee is scheduled to conduct a subject matter hearing on FY 21 revenue estimates and take testimony from the Governor's Office of Management and Budget.

New legislation
House bills
HB 5667 - Reick -  Amends the Illinois Income Tax Act. Provides that, in the case of qualifying expenditures related to (i) clean energy technology, (ii) waste reduction, (iii) recycling, (iv) emissions reduction, (v) environmental sustainability, or (vi) biodegradable or compostable products, the research and development credit shall be 13% (currently, 6.5%) of the qualifying expenditures. 

HB 5669 - Welch - Amends the Illinois Income Tax Act. Provides that the State earned income tax credit shall be: (i) 19% of the federal tax credit for each taxable year beginning on or after January 1, 2022 and beginning before January 1, 2023; and (ii) 20% of the federal credit for each taxable year beginning on or after January 1, 2023. Requires the Department of Revenue and certain institutions of higher education to provide certain notices concerning the federal and State earned income tax credits. 

Senate bills
No new Senate bills this week


The February 28 edition of the  Illinois Register did not contain any new or adopted rulemakings by the Department of Commerce and Economic Opportunity or the Illinois Department of Revenue.

Court cases

No new court cases this week.

Tax Tribunal 

No new decisions were issued this week.

Only one new case was filed with the Tribunal this week.  It is a personal responsibility penalty case that does not raise any unique issues.

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