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Final 2017 Tax in the City Meeting Focuses on Tax Reform

McDermott hosted its last Tax in the City® women’s tax roundtable of the year in its Chicago office on December 14, 2017. The Chicago Year-In-Review event featured a CLE/CPE presentation, “Key Provisions of International Tax Reform,” by Britt Haxton, Kristen Hazel and Sandra McGill, followed by a roundtable discussion on interest expense limitations, changes to net operating loss provisions, pass through tax rates and effects of tax reform on benefits. Additionally, Catherine Battin, Mary Kay Martire and Jane May discussed the SALT perspective on the international tax reform provisions.  A summary of key Illinois income tax changes is below, and a thorough explanation of the new SALT implications in the tax reform bills can be found here. SUMMARY OF KEY ILLINOIS INCOME TAX CHANGES Mid-Year Rate Increase Effective July 1, 2017 From 5.25% to 7% for corporations From 3.75% to 4.95% for individuals, trusts and estates Statute contains guidance on how to allocate...

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Tax Changes Implemented As Part of Revenue Package Supporting Illinois Budget

Yesterday afternoon, after months of wrangling and a marathon 4th of July weekend session, the Illinois House of Representatives voted to override Governor Bruce Rauner’s veto of Senate Bill (SB) 9, the revenue bill supporting the State’s Fiscal Year (FY) 2017-2018 Budget. The vote ended Illinois’ two year budget impasse and may avoid a threatened downgrade of Illinois bonds to junk status. The key tax components of the bill as enacted Public Act 100-0022 (Act) are as follows: Income Tax Rate increase. Income tax rates are increased, effective July 1, 2017, to 4.95 percent for individuals, trusts and estates, and 7 percent for corporations. Income allocation. The Act contains a number of provisions intended to resolve questions regarding how income should be allocated between the two rates in effect for 2017. Illinois Income Tax Act (IITA) 5/202.5(a) provides a default rule, a proration based on the days in each period (181/184), for purposes of allocating...

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Tax Highlights of Proposed Illinois “Grand Bargain”

In an effort to resolve Illinois’ 20-month budget impasse, the Illinois Senate leadership (Senate Majority Leader John Cullerton and Senate Minority Leader Christine Rodogno) have jointly proposed a series of bills to increase revenue, reduce spending, and respond to the Illinois Governor’s concerns regarding pension reforms, workers compensation reform and property tax relief.  A series of twelve bills have been introduced, all of which are interlinked for passage.  The bills are termed the Illinois “Grand Bargain.”  Most of the tax-related changes are found in Senate Bill 9.  The current version of the Senate Bill 9 (Amendment 3) (“Bill”) was submitted on March 3 and includes the following proposed changes:  Income Tax.  The Bill proposes to increase income tax rates, effective January 1, 2017 to 4.99% for individuals, trusts and estates, and 7% for corporations.  Other income tax-related features of the Bill include the elimination of the non-combination...

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