As the state enters
into the 4th month of a budget stalemate, one House Democrat has reintroduced
the concept of closing “corporate loopholes,” to find additional revenue.
State Rep. Jack
Franks has introduced HB 4300
which he claims would save the state $3.9 billion, giving relief to a budget
stalemate that is expected to leave the state overspending and significantly
short of money next year.
Despite not having
a budget in place, about 90% of the state’s bills are being paid due to court
orders. Those bills are being paid at
2015 levels, when we still had the income tax hike in place. The income tax hike expired on Jan. 1, 2015.
Rep. Franks bill is
not new in concept. The idea of closing
so-called “corporate loopholes,” is a perennial favorite since the days of
Gov. Rod Blagojevich.
What critics deride as “loopholes” are actually provisions passed by the Legislature in order to help businesses compete and create jobs, and while some of those
slated for either elimination or reduction do not impact small business, many
in fact do.
For instance,
Illinois retailers receive what is called the “Retailers Discount,” which is a
1.75% collection fee retailers receive to compensate them for collecting sales
tax for the state.
HB 4300 would reduce
that from 1.75% to .75% resulting in a $90 million hit. The bill also puts a hold on future
Enterprise Zones, eliminates the E-10 ethanol incentive, eliminates the Rolling
Stock Exemption for trucking companies, decouples from the federal Qualified
Production Deduction, and eliminates the sales tax exemption for print ink.
On the positive
side, HB 4300 allows for bonus depreciation for small business with less than
$10 million in gross sales and reduces LLC filing fees.
