[January 31, 2014]SPRINGFIELD — Illinois
corporations would see a 50 percent reduction in the state corporate
income tax under legislation introduced Thursday by Illinois House
Speaker Michael J. Madigan.
"For many years, we have listened to employers about the best manner
to improve the business climate. We have tackled worker compensation
reform, reduced the estate tax and created an independent tax
tribunal. Cutting the corporate income tax rate is another step I am
asking the Legislature to consider," Madigan explained.
Under
House Bill 4479, the corporate state income tax would be reduced
from 7 percent to 3.5 percent on business profits. The move would
see Illinois drop from fifth to 35th on the national income tax
ranking of the states, according to the Federation of Tax
Administrators. The personal property replacement tax paid by
business remains unchanged at 2.5 percent and results in a total
rate of 6 percent.
"I am introducing this legislation so the Revenue & Finance/State
Government Administration Committees' joint hearings on tax policies
can consider the impact this will have on business location and
expansion plans," Madigan noted.
The measure, which has an effective date of Jan. 1, 2014, would
provide an estimated $500 million to $700 million in business
savings for fiscal 2014. The fiscal 2015 savings could exceed $1.5
billion.
"I am hopeful this legislation will encourage CEOs to grow their
workforces with good-paying jobs," Madigan said.
In December, the speaker called on the Illinois House committees
to continue hearings on tax policy questions in the wake of a new
wave of businesses calling for tax breaks as a condition for
relocating to or remaining in Illinois.
At the time, Madigan argued: "We should take a more long-term
approach to helping all job-creating businesses in Illinois
thrive and succeed. This must include a thorough review of how
we currently provide incentives to big corporations."
During the 2013 North Carolina corporate rate cut debate, Gov.
Pat McCrory argued that the tax was "economically destructive" and a
lower rate was "critical to putting residents back to work." North
Carolina cuts rates from 6.9 percent to 6.0 percent this year and 5
percent in 2015.
"State tax policy can have a critical impact on multinational
corporations, especially when congressional gridlock has stalled any
meaningful action in Washington," Madigan said.
The speaker's cuts will make Illinois rates less than or equal to
the surrounding states. According to the Federation of Tax
Administrators, the surrounding state rates are 6 percent in
Kentucky, 7.5 percent in Indiana, 12 percent in Iowa, 6.25 percent
in Missouri and 7.9 percent in Wisconsin.
[Text from news release received from
the Illinois House of Representatives]
