Client Alerts Illinois Tax Alert

Publication
12.22.11

Illinois Governor Pat Quinn signed legislation December 16th which significantly cuts the tax burdens of three large employers and extends a menu of modest relief options for several other business taxpayers.

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Illinois Governor Pat Quinn signed legislation December 16th which significantly cuts the tax burdens of three large employers and extends a menu of modest relief options for several other business taxpayers.

Background
Quinn signed Senate Bill 397, which targets CME Group, Sears Holdings Corp. and UCI International Inc. for tax relief. CME, which owns and operates the Chicago Mercantile Exchange and the Chicago Board of Trade, and Sears had both threatened to relocate to neighboring states if Illinois lawmakers failed to provide a package of tax incentives. UCI International Inc., an Indiana maker of automobile replacement parts, will receive tax benefits in return for a commitment to invest $4 million in Illinois and create 250 new jobs.

Tax Relief Menu
The relief offered to other business taxpayers includes the following:

  • Retroactive extension of the Research and Development Tax Credit from January 1, 2011 through the end of 2015
  • Extension of the Replacement Tax Investment Credit from 2013 to 2018
  • Reinstatement of the C Corporation Net Operating Loss Deduction with a $100,000 cap for tax years ending on or after December 31, 2012
    • The Net Operating Loss Deduction was previously suspended for tax years ending after December 31, 2010 and prior to December 31, 2014
  • Retroactive extension of the Small Business Job Creation Tax Credit from June 30, 2011 to June 30, 2016
  • Creation of the Live Theater Production Tax Credit to be administered by the Department of Commerce and Economic Opportunity
  • 5-year extension of various credits, exemptions and deductions originally scheduled to expire in 2011, 2012 and 2013

Illinois Estate Tax
The Illinois estate tax exclusion amount increases from $2 million for deaths occurring in 2011 to $3.5 million for deaths in 2012 and $4 million for deaths in 2013 and thereafter.

Please contact us to discuss how this legislation impacts you.

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