On June 5, 2024, Governor J. B. Pritzker signed the fiscal 2025 budget bill into law with significant tax cuts, tax increases, and an extension of important business provisions. Republican critics are calling it “the largest spending plan in Illinois history.”
Effective July 1, the budget includes a tax cut with the elimination of the state grocery tax but still allows localities to implement their own tax without state approval. The state’s first ever child tax credit, worth up to $300 for households with children under 12, is also implemented in the new budget.
Tax increases would fall on businesses to offset this spending, in the form of an extended cap on net operating loss deductions, but with a higher cap of $500,000, formerly $100,000. Sports betting taxes will increase from 15% to a sliding scale between 20 and 40%. In addition, sales tax rebates to retailers will be reduced by capping the tax discount claimed by retailers at $1,000 monthly.
Although not a tax provision per se, the budget bill includes a prohibition on financial institutions and credit card companies charging fees on the sales tax and gratuity portion of electronic transactions beginning July 1, 2025. This provision will be difficult for businesses to implement as they will need to break out charges into different categories.
For more information on these tax changes, please contact the Ryan tax professional listed below.
TECHNICAL INFORMATION CONTACT:
Michael Willer
Principal
Ryan
630.515.0477
michael.willer@ryan.com
The material presented in this communication is intended to provide general information only and should solely be seen as broad guidance and not directed to the particular facts or circumstances of any individual who may read this publication. No liability is accepted for acts or omissions taken in reliance upon the content of this piece. Before taking (or not taking) any action, readers should seek professional advice specific to their situation from Ryan, LLC or other tax professionals. For additional information about this topic, please contact us at info@ryan.com.
- Sujet
- Michael D. Willer