Rep. Reis Proposes Accelerated Corporate Income Tax Roll Back

December 15, 2011

Olney, IL.…State Representative David Reis (R-Ste. Marie) along with members of the House Republican Caucus today offered a broad-based approach to keeping good employers and making Illinois more competitive for jobs through legislation to accelerate a roll-back of the temporary corporate income tax hike passed by Democrats in January.

“With the highest corporate tax rate in the Midwest and an unemployment rate of 10.1%, it is critical the legislature stands up and fights for families who rely on their employers and jobs to put food on their tables and care for their loved ones,” Rep. Reis said. “Legislation offered today tells families we are fighting for them by creating a stable business climate for employers to create and maintain jobs.”

House Bill 3918 takes a two-pronged approach to reducing Illinois’ business taxes:

1. Accelerates the expiration of the temporary corporate income tax increase. For income earned during calendar 2013 the rate declines from 7% to 6% and for income earned during calendar 2014 the rate would further decline to 4.8%.

2. Effective immediately the corporate income tax would be reduced by 0.25% anytime the Illinois unemployment rate increases by .3% in a four month span. For example, if the unemployment rate in January was 10% and in April it was 10.3% than this provision would take effect. At no point would the corporate income tax be less than 4.8% (the corp. tax rate before the recent tax increase).

Without HB 3918, the Democrats’ temporary corporate income tax increase would not expire until January 1, 2025.

Rep. Reis continued, “I believe the best option is to repeal the corporate and personal income tax hikes. Yet the majority party controlled by the Chicago Democrats fails to take responsibility for the negative ramifications of their hikes.”

House Republicans believe HB 3918 is needed to produce a better business climate in Illinois and what is lost in tax receipts to the state will be replaced with a gain in new employment and a broader tax base.

House Bill 3918 is supported by the Illinois Manufacturers’ Association, the Illinois Retail Merchant Association, the State Chamber of Commerce, the National Federation of Independent Business, and the Illinois Policy Institute.

"Illinois currently has one of the highest income tax rates in the United States. Lowering the state's income tax rate sends a positive message to job creators and will help entice companies to locate and expand in Illinois," said Mark Denzler, Vice President & Chief Operating Officer of the Illinois Manufacturers’ Association.

Denzler continued, “We applaud Rep. Reis for fighting to reduce the tax rate and help create predictability and stability for employers.”