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.

Continue Reading Final 2017 Tax in the City Meeting Focuses on Tax Reform

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 income between pre-July 1 segments and periods after the end of June when rates increase. Alternatively, IITA 5/202.5(b) provides that a taxpayer may elect to determine net income on a specific accounting basis for the two portions of their taxable year, from the beginning of the taxable year through the last day of the apportionment period, and from the first day of the next apportionment period through the end of the taxable year.

Continue Reading Tax Changes Implemented As Part of Revenue Package Supporting Illinois Budget

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: Continue Reading Tax Highlights of Proposed Illinois “Grand Bargain”