December 13, 2011
What Two Weeks Can Mean In Springfield - Tax
Package
SB 397 (Sen. Hutchison/Rep.
Bradley)
SB 400 (Sen. Hutchison/Majority Leader
Currie)
The Senate returned to the State House and took action to
approve the tax package. The Senate approved SB 397 (Sen.
Hutchison/Rep. Bradley), which includes increasing the Estate Tax
exemptions and extending the sales tax incentives for ethanol and
biodiesel. The Senate approved SB 397 with 44 yes, 9 no, and
0 present votes. IFB supported SB 397.
SB 397 increases the Estate Tax exemption for individuals from
$2 million to $3.5 million in 2012 and to $4 million in 2013 and
thereafter. The bill also extends the state sales tax
incentives for ethanol and biodeisel for an additional five years
to 2018. There are many other components of the bill are
listed at the end of this edition.
The second bill in the "package", SB 400 (Sen.
Hutchison/Majority Leader Currie), increases the Earned
Income Tax Credit and increases the personal income tax deduction
and was also approved. SB 400 was approved by the Senate with
48 yes, 4 no, and 0 present votes. IFB has a neutral position
on SB 400.
Yesterday the House of Representatives approved SB 397 with 81
yes, 28 no, and 7 present votes and SB 400 with 67 yes, 49 no, and
0 present votes. The bills will now be sent to the Governor
and it is expected that he will approve the bills quickly.
As you will recall, a similar package was considered two weeks
ago. HB 1883 was a combined bill that passed the Senate with
36 yes, 18 no, and 1 present vote. However, the bill did not
fare well in the House, where it was soundly defeated by a vote of
8 yes, 99 no, and 6 present votes. Today's package contained
in SB 397 and SB 400 was similar to the previous package, but they
differed in the level of Estate Tax exemptions and a few other
minor technical changes.
We would like to thank each and everyone of you for
contacting your State Legislator. Your contacts were
insturmental in getting the Estate Tax exemption increased and the
sales tax incetives for ethanol and biodiesel extended. We would
also like to thank the numerous proponents of SB 397 who worked
with in securing the passage of this package.
IFB supports SB 397 and a neutral position on SB 400.
The bills will be sent to the Governor for his action.
Cemetery Act Changes Pass
SB 1830 (Majority Leader Currie, Sen.
Emil Jones, III)
After passing the House during the last extra Veto Session day,
the Senate voted to concur in the amendment to SB 1830 making
needed changes to the Cemetery Oversight Act. These changes
were the result of continued discussions among the Illinois Dept.
of Financial and Professional Regulation (IDFPR) and the cemetery
industry. The bill reduces the regulatory burden and provides
relief for many small cemeteries throughout
Illinois.
Among the numerous changes made by the bill, it provides a
complete exemption from the Act for cemeteries that are family or
religious burying grounds; have not had an internment,
inurnment, or entombment in 10 years; or are less than three
acres. The bill also provides a limited exemption for a
cemetery that has engaged in 25 or fewer interments,
inurnments, or entombments of human remains for each of the
preceding 2 calendar years; operates as a public cemetery; or
operates as a religious cemetery. Among the numerous
additional changes to the Cemetery Oversight Act included in the
bill is volunteer cemetery managers and customer service employees
no longer need to be licensed.
SB 1830 passed the Senate unanimously with 52 yes votes and 0 no
votes. The bill will be sent to the Governor for his
consideration. IFB supports SB 1830.
Tax Package Details
SB 397:
- Illinois Estate Tax individual exemption level is increased
from $2 million to $3.5 million in 2012 and to $4 million in 2018
and thereafter.
- The ethanol and biodiesel state sales tax incentive sunsets are
extended to December 31, 2013.
- Independent Tax Tribunal is Created. This will call for
the creation of an independent body to take over of the Illinois
Department of Revenues administrative duties regarding notices of
tax liability, deficiencies on all taxes administered, and
revocations of licenses issued by the Illinois Department of
Revenue. There are no details on whom or how this new
tribunal will operate. Those are to be worked out in
subsequent legislation and administrative rule making.
- Reinstates Net Operating Loss Deduction for tax years ending
December 31, 2012 through December 31, 2014, but places a cap on
the amount used as a carryforward at $100,000 per year.
- Amends how the Chicago Mercantile Exchange and other exchanges
source their revenue. Revenue is currently sourced at nearly 100%
within Illinois. The proposal would require CME to source only a
percentage to Illinois phased in over 2 years. CME will be taxed at
63.77% for FY 12 (The FY12 tax change will be late-end weighted so
as to un-burden the FY12 budget) and 27.54% for FY 13 and
thereafter.
- Sears Economic Development Area Tax Increment (EDA) is extended
and retains the $15 million withholding taxes from its employees
for the next 10 years.
- Live Theater Production Tax Credit Act is Created for
pre-Broadway and long-runs shows for Illinois labor and production
not to exceed $2 million in the aggregate.
- Champion Lab Edge Tax Credit is created.
- Other tax incentives extended for five years:
-
- Investment Tax Credit under the Corporate Personal Property
Replacement Tax.
- Illinois Angel Investment Credit program which was designed to
offer a tax credit to those who make investments in Illinois'
innovative, qualified new business ventures.
- Affordable Housing Donation Credit
- Ex-Felon Tax Credit
- Veterans Hiring Tax Credit
- River Edge Redevelopment Zone components and tax credits
- Miners credit for retailers, manufactures, and coal against the
Corporate Personal Property Tax Replacement Tax
- TECH-PREP credit
- The bill includes a description of the expected impact to the
State budget. The proposal is expected to not exceed $250
million in tax incentives for 2013 which will be offset with the
scheduled federal sunset of the bonus deprecation schedule to
expire December 31st of this year.
SB 400:
- Increases the personal exemption level from 5% to 7.5% for the
2013 tax year and to 10% in the 2014 tax year and thereafter.
- Increases the individual base income tax exemption from $2,000
to $2,050 for the 2013 tax year and then starting in the 2014 tax
year the $2,050 will be adjusted for the cost-of-living
annually.
