10 July 2017 Illinois budget bill increases personal and corporate income tax rates effective July 1, 2017 — revised withholding tables issued Illinois Budget bill SB 9 increases the personal income tax rate from 3.75% to 4.95% effective July 1, 2017. The bill also increases the corporate income tax rate to 7%, up from 5.25%. These tax increases comes as the result of the House of Representatives overriding Governor Rauner's veto of the budget bill, thus ending a two-year budget stalemate. Budget bill SB 9 increases the personal income tax rate from 3.75% to 4.95% effective July 1, 2017. The bill also increases the corporate income tax rate to 7%, up from 5.25%. The Illinois Department of Revenue has issued revised Publication IL-700-T, Illinois Withholding Tax Tables, to be used effective with wages paid on and after July 1, 2017. According to the governor's Facebook page on July 6, 2017, "Today was another step in Illinois' never-ending tragic trail of tax hikes. Speaker Madigan's 32% permanent income tax increase will force another tax hike in the near future. His tax-and-spend plan is not balanced, does not cut enough spending or pay down enough debt, and does not help grow jobs or restore confidence in government. It proves how desperately we need real property tax relief and term limits. Now more than ever, the people of Illinois must fight for change that will help us create a brighter future." The governor had pledged that he would veto any budget bill that increased income tax rates without providing for a permanent property tax freeze (which SB 9 does not contain). Illinois has gone multiple years without a full operating budget. Its failure to pass a budget and pay its bills for two fiscal years has resulted in numerous downgrades of its credit rating, the most recent coming June 1, 2017, when the state's rating was downgraded to one notch above "junk." Had the legislature not enacted a FY 2018 budget bill, the state's rating may have gone to junk status. Document ID: 2017-1093 |
