May 6, 2018

Last week, the Illinois State Senate advanced a package of bills that would implement a graduated income tax system in Illinois. The three bills are tied to the legislative passage of Senate Joint Resolution Constitutional Amendment 1 (SJRCA 1) which is the first in three steps of amending the Illinois State Constitution to move to a graduated income tax.   
SJRCA 1- passed the Senate with a 3/5’s majority vote and now moves to the Illinois House where it will have to pass with the 3/5’s requisite vote threshold. If the House does indeed pass the measure, Illinois voters would have the opportunity to weigh in during the November 2020 General Election.
The three pieces of legislation the Senate tied towards final passage of SJRCA 1 are:
SB 687 amends the Illinois Income Tax Act to establish a graduated income tax rate structure, effective for tax years beginning January 1, 2021. The bill was amended today to remove the requirement contained in amendment 1 that would have required taxpayers filing joint returns federally to file joint returns for Illinois income tax purposes.
For taxpayers who file a joint return:
4.75% $0-10,000
4.85% $10,001-100,000
4.95% $100,001-250,000
7.75% $250,001-500,000
7.85% $500,001-1,000,000
7.99% $1,000,000+ (includes all income)
For taxpayers who do not file a joint return:
4.75% $0-10,000
4.85% $10,001-100,000
4.95% $100,001-250,000
7.75% $250,001-350,000
7.85% $350,001-750,000
7.99% $750,000+ (includes all income)
SB 689 amends the Illinois Estate and Generation-Skipping Transfer Tax Act to repeal the Illinois Estate Tax and the Generation Skipping Transfer Tax effective January 1, 2021. This bill, sponsored by Senate President Cullerton, passed the Senate on a largely partisan vote.
SB 690 as amended is a property tax freeze bill that would extend the Property Tax Extension Limitation law beginning with levy year 2022 to certain school districts and limit the increase in property taxes to amounts approved by voters by referendum.
You are receiving this special tax legislative update because you have expressed an interest in state tax issues. The Illinois CPA Society is neutral on the resolution and legislation cited above because of the diverse practice areas of our membership and the impact on respective practices and client base. ICPAS Government Relations continues to closely monitor tax proposals and will keep you informed of significant developments.
With 18 scheduled legislative session days remaining in the spring session, passage of legalization of marijuana and expansion of gaming including sports betting are contingent on passage of a state operating budget by the May 31st adjournment deadline. You can follow the progress of these tax bills at TAX LEGISLATION TRACKING along with other bills ICPAS Government Relations is tracking here.  You can also get a daily rundown of the legislative session here with ICPAS Government Relations Morning Report postings.  

Please feel free to contact the Illinois CPA Society Capitol Office at 1.800.572.9870 or by email at [email protected]  if you have questions or would like additional information on legislation pending before the Illinois General Assembly.