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Inside Insight Magazine
Marty Green's Capitol Update
Spring Session’s Slow Start Leaves Much to Do
The Illinois General Assembly’s spring legislative session is off to a slow start. This week, Gov. J.B. Pritzker delivered a combined State of the State and Budget Address, which laid the framework for legislators to pass a state operating budget for fiscal year 2025. Compared to previous years, state leaders will encounter fewer discretionary dollars for programs and initiatives due to unanticipated expenses related to assisting migrants arriving and residing in Chicago.
 
I anticipate the tempo of things to significantly increase after the March 19 primary election, as 118 seats of the Illinois House and 23 seats in the Illinois Senate are up for election. Additionally, with the volume of legislation that’s been introduced, coupled with passage of a state operating budget, a lot of work will need to be done in a compressed period due to the self-imposed May 24 adjournment deadline.
 
As always, we’re closely monitoring bill introductions and legislative activity.
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LATEST LEGISLATION
Audit Relief Sought for Small Municipalities
SB 2875 allows a municipality with a population of 1,000 or less to file an annual report in lieu of an audit report if an audit report has been conducted and filed with the Illinois Office of the Comptroller within the three preceding fiscal years and no material findings indicate significant errors or risks. This is an initiative of the Illinois Municipal League to address issues with small municipalities’ challenges of finding CPAs and CPA firms to timely complete audits. Status: Pending in Senate.
 
ICPAS Supported Bill Updates Audits of Township Accounts and Funds
HB 5011 provides that township accounts and funds audited under the provisions of the Governmental Account Audit Act not include road district accounts or funds. The bill also provides that the types of audit reports a governmental unit must provide shall be based on whether the unit has revenue of less or more than $850,000. Additionally, under the bill, township revenue shall be calculated exclusive of road district funds. This Township Officials of Illinois initiative, supported by the Illinois CPA Society (ICPAS), seeks to correct an interpretation by the Office of the Comptroller. Status: Pending in House.
 
Proposed Legislation Addresses Payroll Services
An initiative of the Illinois Department of Financial and Professional Regulation (IDFPR), HB 3479 updates the Transmitters of Money Act and sets forth provisions that would apply to payroll services. Depending on the level of services provided, providers may need to have a separate payroll service provider license. The threshold is the flow of money and whether the payroll service provider receives payroll funds from the employer, and in turn, disburses those funds as payroll to the client’s employees. Status: Pending in Senate.
 
Updates to Revised Uniform Unclaimed Property Act Impacts CPAs
Supported by ICPAS, SB 3343/HB 5143 amend the Revised Uniform Unclaimed Property Act (RUUPA). The legislation provides that void agreements don’t apply to an owner’s agreement with a CPA firm that provides recovery services to a business client. This is an initiative of State Treasurer Mike Frerichs, who’s worked with ICPAS to address a legacy private investigator requirement for finders of unclaimed property. For more information, see ICPAS' RUUPA webpage and legislative fact sheetsStatus: SB 3343 pending in Senate; HB 5143 pending in House.
Bill Creates Licensure Reform Task Force
HB 5007 creates a licensure reform task force to conduct formal hearings about IDFPR’s licensing procedures and develop policies to reduce the division’s licensing processing. Status: Pending in House.
 
Proposed Bill Seeks Universal Recognition of Licenses
HB 5608 requires state licensing authorities to issue an occupational license or government certification to a person who holds an occupational license or government certification in another state if they meet specified conditions. The proposed bill includes the requirement of “notwithstanding any other state law to the contrary” and preserves the requirements of the Illinois Public Accounting Act. Status: Pending in House.
 
New Proposed Legislation Impacts RTO Policies
HB 4598 provides that an employee who resigns due to a return-to-office (RTO) policy shall be paid any severance that an employee is entitled to if they’re terminated. It also provides that an employee who voluntarily leaves employment due to a RTO policy would be eligible for unemployment compensation. This bill is opposed by ICPAS. Status: Pending in House.
 
Amendments Proposed to Lobbyist Registration Act
Supported by ICPAS, HB 4631 exempts from registration persons that: 1) communicate with officials solely for the purposes of discussing and negotiating economic incentive agreements and awards, and 2) don’t make expenditures that are reportable under the act. Notably, this legislation remedies the Appellate Court holding in Kane v. Option Care Enterprises Inc., 2021 IL App (1st) 20066. Status: Pending in House.
 
Bill Creates Small Business Savings Accounts
HB 4669/SB 3152 creates a small business asset purchase account, allowing businesses to put aside up to $50,000 per year for future business investments. Funds contributed to this small business savings account would be eligible for an income tax deduction in the year the contributions were made. Status: HB 4669 pending in House; and SB 3152 pending in Senate.
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POLICY & POLITICS
Governor’s Proposed State Operating Budget for Fiscal Year 2025
Gov. Pritzker proposed a $52.7 billion state operating budget for fiscal year 2025 to a joint session of the Illinois General Assembly. The proposal includes projected revenue of nearly $53 billion, up $777 million from the latest revision to the FY24 budget. The governor proposed closing a projected hole in the budget by increasing the sports wagering tax from 15% to 35%, increasing the corporate net operating loss deduction cap from $100,000 to $500,000, and reducing the 1.75% retailer’s tax discount.
 
Paid Leave for All Agency Rules Being Reviewed By Bipartisan Legislative Oversight Committee
The nonpartisan Joint Committee on Administrative Rules (JCAR) has advanced the Illinois Department of Labor’s (IDOL’s) proposed rules under the Paid Leave for All Workers Act to a second reading. ICPAS submitted a letter of concern to IDOL, encouraging delay of implementation to address unresolved issues. During the second reading, JCAR will work with IDOL to reconcile any issues or differences. More information on the second reading process is available here.
 
New CPA Exam Amendment Takes Effect
The Illinois Board of Examiners adopted amendments to the certificate of education and examination requirements. Effective Feb. 1, 2024, the adopted amendment increases the amount of time a candidate can pass all sections of the CPA exam from 18 months after the candidate takes a section of the exam to 30 months after scores for that section are released to candidates. ICPAS advocated for and supported this expanded credit timeline.
 
IDOR Adopts Uniform Penalty and Interest Act Amendments
For state tax returns filed on and after Jan. 1, 2024, any additional state income tax liability resulting from a change to a taxpayer’s federal income tax return must be reported to the Illinois Department of Revenue (IDOR) and be paid no later than the due date for filing the federal amended return.
 
New Resources Available on Business Ownership Information Reporting
The beneficial ownership information reporting requirements of the Corporate Transparency Act became effective Jan. 1, 2024. These reporting requirements are detailed in nature and apply to small businesses and accounting firms. CLA’s “5 Fast Facts on Beneficial Ownership Information Reporting” is a helpful resource, along with our curated resources to assist you and your clients in fulfilling this compliance reporting requirement.
 
Tax Treatment of Motor Fuel Made Via Mobile App
IDOR issued a general information letter addressing the tax treatment of sales of motor fuel made via a mobile app. The letter is in response to a company requesting guidance that operated a mobile app, which allowed truck drivers to purchase fuel at reduced prices from specified fueling stations. Because IDOR wasn’t provided copies of the contracts with the fuel stops, it couldn’t address whether the taxpayer had an obligation to register for and remit tax.
 
INSIDE INSIGHT MAGAZINE
Inside Insight Magazine
A CPA’s Basic Guide to SALT Requirements
State and local taxes affect every business in Illinois in one way or another. To ensure their clients remain tax compliant, it’s important for CPAs to know the fundamentals, red flags, and where to look for additional guidance.
 
INSIGHT SPECIAL FEATURE
‘Righting Retention’ Tackles High Turnover in the Profession
Time and again, retaining talent is ranked as a top challenge among leaders in the accounting and finance profession. In its 2023 Insight Special Feature, “Righting Retention,” the Illinois CPA Society shares new research findings to shed light on what’s driving the profession’s perpetually higher-than-average turnover rates.
 
Insight Special Feature
NEW IN KNOWLEDGEHUB
KnowledgeHub Resource
5 Best Practices for Surviving the Tax Season
Accounting professionals know that the tax season brings a heavier workload for all involved. Learn the ways to combat the negative side effects of the busy season, both physically and mentally, throughout the first quarter of the year and beyond.
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How Offshoring Beats Outsourcing for Accounting Firms
Find out how building an offshore team can fast-track your growth and help solve the accounting talent shortage.
 
 
 
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Beneficial Ownership Information Reporting: What CPAs Need to Know
All domestic and foreign reporting companies are now required to file a beneficial ownership information report with the Financial Crimes Enforcement Network established under the Corporate Transparency Act. Here’s what CPAs need to know.
 
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