SPRINGFIELD HIGHLIGHTS - DECEMBER 13, 2011
Tuesday, December 13, 2011 at 2:28PM General Assembly Passes Tax Package … A short while ago, the Senate followed yesterday’s bipartisan vote in the Illinois House of Representatives and passed a $340 million tax relief package supported by the Illinois Manufacturers’ Association. The final agreement included two provisions sought by the IMA including an extension of the Research & Development tax credit and partial reinstatement of the Net Operating Loss deduction. Governor Quinn has pledged to sign the measure into law.
The tax package was contained in two separate pieces of legislation. The first, SB 397 contained the business tax relief while the second bill, SB 400, included tax benefits for individuals.
SB 397, sponsored by Rep. John Bradley and Sen. Toi Hutchinson, the respective chairs of the House and Senate Revenue Committees, contained the following pieces: (1) 5-year extension of the Research & Development Credit with a five-year carry forward that is retroactive to January 2, 2011; (2) reinstatement of the Net Operating Loss provision effective on January 1, 2012 with a $100,000 cap; (3) increase in the Estate Tax deduction from $2 million to $4 million over two years; (4) apportionment rule change for the Chicago Mercantile Exchange; (5) EDGE tax credit for Sears and Champion Laboratories; (6) new independent tax tribunal to hear contested cases with the Department of Revenue; (7) 5-year extension of all sunsets and credits set to expire in 2011-13 which includes an employer credit for hiring veterans; and (8) a new pre-Broadway theatre tax credit limited to an annual $2 million cap. SB 397 passed the House on a vote of 81-28-7. followed by a Senate vote of 44-9-0.
SB 400, sponsored by Majority Leader Barbara Currie and Sen. Hutchinson, increased the Earned Income Tax Credit for low-income families from 5 percent to 10 percent over a two-year phase in period. Additionally, this bill increases the personal exemption from $2,000 to $2,050 with additional annual increases tied to the Consumer Price Index. SB 400 passed the House on a vote of 67-49-0 with a Senate vote of 48-4-0.
While not a perfect bill, the IMA applauds President John Cullerton, Speaker Michael J. Madigan, Senate Republican Leader Christine Radogno, House Republican Leader Tom Cross, House Revenue Chairman John Bradley, Senate Revenue Chairman Toi Hutchinson, Revenue Spokesman David Harris, and all members of the General Assembly who supported this tax package.
The IMA will continue working on further reform of the tax code including a reduction in income tax rates, permanent extension of the R & D credit, full reinstatement of the NOL provision, and extension of Enterprise Zones.