Farm Bureau Monitoring the "Closure of Business Loopholes"
After the election in November, Governor Pritzker made several statements that he wants to “close business tax loopholes,” but until his mid-February budget address, there were no details.
In his budget address, the Governor laid out what his initial focus was on. Those items include removing:
- Cap Corporate NOL (Net Operating Loss) Deduction at $100,000 per year- $314 million
- Align treatment of foreign-source dividends to treatment of domestic source dividends- $107 million
- Roll back federal accelerated deprecation- $214 million
- Accelerate the expiration of the exemptions for biodiesel- $107 million
- Reverse repeal of the Corporate Franchise Tax- $30 million
- Cap Retailer’s Discount at $1,000/month- $73 million
- Reset tax credit for private school scholarships at 40%- $14 million
- Eliminate new add-on income tax credit for construction job payroll expenditures- $16 million
- Remove production related tangible personal property for the manufacturing machinery and equipment sales tax exemption- $56 million
To date, there have been no specific details or proposed legislation encapsulating these proposals. Details are not expected until the final weeks of May.
The sales tax incentive on biodiesel was the only incentive included in the Governor’s proposed budget that is directly tied to agriculture. According to the Department of Revenue, in 2018, if the sales tax incentive was not in place, the State would have collected $138 million in sales tax from the purchase of biodiesel. Farm Bureau is working with the[AC1] on House Bill 229 and Senate Bill 2394, which makes changes and phases out the biodiesel sales tax incentive over the next several years and replaces it with a fuel standard.
Farm Bureau will continue to engage with legislators on these and other issues. Members are encouraged to contact Bona Heinsohn at 708-354-3276 or via email at [email protected] with any questions or concerns regarding this issue or any others.