Illinois lawmakers are trying to pass Senate Bill 217 which would cancel the federal tax COVID-19 relief for small businesses by creating a $1 billion tax hike.
According to an Illinois Policy article, this "shell bill" follows Gov. J.B. Pritzker's failed February attempt at a new tax hike, and is set to be amended, passed in the House and Senate and signed by the governor all in one day.
"Another example of a ‘disguised’ tax hike by our Governor. It has been reported that 440,000 small businesses would be impacted by this change. These businesses are set to receive an estimated $500 million to $1 billion in tax refunds from the state. They also create 69% of all new jobs in Illinois.," state Rep. Dan Caulkins (R-Decatur) said in a Facebook post, quoting the Illinois Policy article.
If the bill is passed, it would take away nearly all the federal relief money coming to small business to help during the economic downturn resulting from the pandemic.
As part of the Coronvirus Aid, Relief and Economic Security Act adopted by the federal government, the Illinois tax would automatically adopt this relief allowing for small buiness to essentially get an advance on their future tax return to help them survive until the economy can fully recover from COVID-19.
"Pritzker in January was encouraging state lawmakers to eliminate this provision for S corporations, limited liability corporations and partnerships, the most common tax filing statuses for small businesses. His plan quickly drew opposition from 11 business groups as kicking them with a tax hike as they struggled through a pandemic," the Illinois Policy article explained. "Pritzker failed, but on March 17 was again pushing the change that would effectively strip these small businesses of tax refunds they would be owed by the state of Illinois."
Illinois' small businesses are already suffering, with more than 35% of them currently closed due to the pandemic and regulations set by the governor.
Despite the number of unemployed slightly improving, it is not enough for the Illinois economy. Illinois has one of the highest unemployment rates in the Midwest, with nearly 500,000 Illinoisans out of work to date.
While Priztker claims he is trying to close loopholes, this "shell bill" would only stop the survival of small business and make the economy for Illinois worse, Illinois Policy said.
Alerts Sign-up