(The Center Square) – Illinois consumers will start paying higher taxes on a variety of items next week, and they may also foot the bill for corporate tax changes.
On July 1, the state will raise taxes on short-term rentals, sports wagering, telecommunications, tobacco and vaping products. Illinois will lower tax rebates for electric vehicle purchases.
New tax rules will impact businesses in the current tax year.
Taxpayers’ Federation of Illinois President Maurice Scholten said corporations will receive a lower deduction for Global Intangible Low-Taxed Income, or GILTI.
“GILTI is a tax on foreign-earned income that comes in on the federal return that the state would now tax,” Scholten said.
Another change will have Illinois move from the Joyce rule to the Finnigan rule, which allows all businesses in a group to be taxed if one has a nexus, or certain ties, with Illinois.
Scholten said this could result in companies facing double taxation.
“Not every state has the same apportionment law, the same rules and everything else. Sixty percent of their income is attributable here, ideally 40% would be attributable over there, but sometimes it’s 60 over here and 60 over there, 120%. And now you’re being taxed on more than 100% of your income, which is never ideal,” Scholten explained.
Speaking on the Illinois House floor in the final hours of the spring legislative session, state Rep. Dan Ugaste, R-Geneva, warned that the people will pay for taxes on businesses.
“Every business passes along the taxes we hit them with to the people who buy their goods and use their services. It’s the way the world works,” Ugaste said.
House Bill 2755 contained several revenue measures added in the final hours of session. The bill’s original language designated July 25 of each year as Emmett Till Day. The day was to be observed throughout the state in honor and remembrance of Till, a 14-year-old boy who was murdered in Mississippi in 1955.
Democratic lawmakers gutted HB 2755’s original language, which honored Till, and replaced it with the revenue provisions just before the spring legislative adjournment deadline.
