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New tax rules will impact businesses in the current tax year.
Taxpayers’ Federation of Illinois President Maurice Scholten
said corporations will receive a lower deduction for Global
Intangible Low-Taxed Income, or GILTI.
“GILTI is a tax on foreign-earned income that comes in on the
federal return that the state would now tax,” Scholten said.
Another change will have Illinois move from the Joyce rule to
the Finnigan rule, which allows all businesses in a group to be
taxed if one has a nexus, or certain ties, with Illinois.
Scholten said this could result in companies facing double
taxation.
“Not every state has the same apportionment law, the same rules
and everything else. Sixty percent of their income is
attributable here, ideally 40% would be attributable over there,
but sometimes it’s 60 over here and 60 over there, 120%. And now
you’re being taxed on more than 100% of your income, which is
never ideal,” Scholten explained.
Speaking on the Illinois House floor in the final hours of the
spring legislative session, state Rep. Dan Ugaste, R-Geneva,
warned that the people will pay for taxes on businesses.
“Every business passes along the taxes we hit them with to the
people who buy their goods and use their services. It’s the way
the world works,” Ugaste said.
House Bill 2755 contained several revenue measures added in the
final hours of session. The bill’s original language designated
July 25 of each year as Emmett Till Day. The day was to be
observed throughout the state in honor and remembrance of Till,
a 14-year-old boy who was murdered in Mississippi in 1955.
Democratic lawmakers gutted HB 2755’s original language, which
honored Till, and replaced it with the revenue provisions just
before the spring legislative adjournment deadline.
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