NEWS

Legislative Update - week of 4/29/19

Lawmakers jumped back in to Committee work after being in their district for two weeks with a main focus on passing the Fair Tax.


Senators and Representatives jumped back in to Committee work after being in their district for two weeks. The Senate’s focus was on passing the Fair Tax, though other cross-chamber bills started moving in both chambers.

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An overview of action this week:


On Wednesday, the Illinois State Senate approved a package of tax reform provisions as a first step towards implementing a Fair Tax. If approved by the voters in November 2020, SJRCA 1 (Harmon, D- Oak Park) will amend the state constitution to enable Illinois to have a graduated income tax. Several other proposals dependent upon its passage also passed, including:


SB 687 (Hutchinson, D-Chicago Heights) imposes provisions that alter taxation on corporations and individuals:


For individuals, the proposed rate structure requires:


  • Single filers would pay the maximum rate of 7.99 percent on all income once their taxable income tops $750,000. For joint filers, that rate takes effect once income tops $1 million.

  • For joint filers outside of the top brackets, the rates in the Senate plan are 4.75 percent on taxable income from $0 to $10,000; 4.9 percent from $10,001 to $100,000; 4.95 percent from $100,001 to $250,000; 7.75 percent from $250,001 to $500,000; and 7.85 percent from $500,001 to $1 million.

  • For single filers, tax rates are the same as joint filers up to $250,000; but the 7.75 percent rate applies from $250,001 only to $350,000, while the 7.85 percent rate applies from $350,001 to $750,000.

For taxable years after 2021, the tax on corporations shall be imposed at the rate of 7.99% of the taxpayer's net income for the taxable year. The bill also adjusts the Local Government Distributive Fund to provide that the transfer shall be equal to 10.75% of the amount that would have been generated if the tax had been imposed at the rate of 3% for individuals, trusts, and estates and at the rate of 4.8% for corporations. Implements a child tax credit. Provides that taxpayers who are required to file a federal joint return shall file a joint return with the State. Provides that the income tax credit for property taxes shall be equal to 6% (currently, 5%) of real property taxes paid by the taxpayer during the taxable year on the principal residence of the taxpayer.


SB 689 (Cullerton, D-Chicago) makes changes to the Illinois Estate and Generation-Skipping Transfer Tax Act and provides that no tax shall be imposed for persons dying on or after January 1, 2021 or for transfers made on or after January 1, 2021.


SB 690 (Manar, D- Bunker Hill) provides that beginning in levy year 2022, school districts in every county are subject to the Property Tax Extension Limitation Law (PTELL). PTELL sets an “extension limitation” at the lesser of 5 percent or the percentage increase in the Consumer Price Index (CPI). Under the proposal, school districts would have their “extension limitation” set at 0 percent if they are not “qualified school districts.” A “qualified school district” is one that received less than 97 percent reimbursement for certain mandated categorical grants or “did not receive the minimum funding required for that school district under the evidence-based funding formula” in the previous school fiscal year.

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Senate Committee Action:


HB 246 (Moeller, D-Elgin) requires schools to teach about the role and contributions of lesbian, gay, bisexual, and transgender individuals in society. This bill passed out of the Senate Education Committee on a vote of 13-2.