Tax ‘decoupling’ effort that would cost businesses could stall out

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(The Center Square) – Some at the Illinois statehouse don’t want the state to decouple from the federal income tax code, a move that could cost small businesses hundreds of millions of dollars in state taxes.

Some have also questioned if there’s still time to decouple before tax season.

The Illinois House has canceled all but one day for the month of February. That’d leave only six scheduled days in March to advance something before the March 15 deadline for some businesses to file taxes.

State Rep. Avery Bourne said a last minute tax code change should be avoided.

“Should we get back to legislative session, yes, but I don’t think just to pass the governor’s tax increase on small businesses,” Bourne told WMAY.

Bourne said there’s not enough time to get such a measure through the legislature.

State Rep. Mike Zalewski, D-Riverside, said it’s still possible to decouple.

“I think there’s time, although the window has dramatically shrunk,” Zalewski said.

The measure failed to advance in the final hours of the previous General Assembly earlier this month. Any new effort in the new General Assembly would need to be read into the record on three separate days in each chamber before final votes.

Zalewski said with continued uncertainty from Washington for direct state aid, lawmakers are gonna have to do something.

“We’re gonna have to assume that we’re on our own when it comes to getting out of this [budget] crisis, so decoupling remains as critical as ever, so we really do have to come up with a plan,” Zalewski said.

The state’s current budget Democrats passed assumed billions not just direct federal aid that never materialized, but also revenue from last year’s failed progressive income tax proposal.

State Rep. Maurice West, D-Rockford, said the state needs to help, not hurt small businesses.

“That’s one reason why it was hard for me to wrap my head around the decoupling legislation, because that money is supposed to go to our small business owners in our state and it’s time for us to give them some relief,” West said.

Politics

via The Center Square

January 29, 2021 at 06:08AM

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