April 23, 2010—Issue 12

Governor’s Business Tax Law Changes Surface

As budget talks begin to heat up, this week brought the unveiling of a list of business tax law changes that could be offered as an alternative to previously proposed budget cuts and increased borrowing.  The list consists of many business tax law changes that have been discussed in the past as well as some new tax ideas like the so-called “i-Tunes” tax that would apply sales tax to music and video downloads.  Governor Quinn has been quoted in various media reports this week as saying he isn’t necessarily tied to passage of these proposals but noted that he “just wants these options on the table” as legislative leaders and the Governor attempt to craft an FY 11’ Budget.  Initial reaction to these proposed tax law changes has been extremely cool amongst members of the General Assembly and rumor has it that Senate President John Cullerton has even termed them a “non-starter” during budget negotiations.  TFI opposes the adoption of these proposed tax law changes as they would adversely impact Illinois’ job creation environment. We will continue to closely monitor budget discussions involving them as the Legislature heads towards their scheduled adjournment on May 7^th.  A list of these proposed tax law changes is attached to this email newsletter.

Real vs. Personal Property Taxation Bill Clarified

HB 6241, which deals with the taxation of mobile homes, was successfully amended this week in the Senate Revenue Committee at the request of TFI and various utility companies including Dynegy.  The bill had passed out of the House previously with an unnoticed change in the Property Tax Code that would have removed the word “permanent” from the phrase “permanent fixtures” in the definition of taxable real property.  Utilities and other industries who have faced frequent attempts to tax their machinery and equipment in the past, may have found themselves susceptible to similar taxation attempts had this bill not been amended.  Special thanks go out to Rick Barton with Dynegy for his timely analysis and assistance in amending HB 6241.  You can access HB 6241 at this link: click here

And Finally……A Spring Session Update

The respective House and Senate Committee Deadlines for bills in their opposite chamber of origin passed this week however most bills still moving through the committee process have received hearing deadline extensions and several committee hearings have already been scheduled for next week.  The General Assembly has tentatively set their Spring Adjournment date for Friday May 7^th, however no one seems to know whether this goal can be met as budget negotiations have been extremely slow to develop.  Several scenarios have been rumored including the General Assembly finishing most substantive legislative business by May 7^th,  going home for a couple of weeks while budget negotiators continue to craft a budget and returning to Springfield the last week of May for a final vote on an FY 11’ Budget Plan.  The Legislature could also simply proceed past the scheduled May 7^th adjournment as well until a budget solution is reached so you’ll just have to stay tuned to “TFI from the Capitol” for further updates!