103RD GENERAL ASSEMBLY
State of Illinois
2023 and 2024
HB2893

 

Introduced 2/16/2023, by Rep. Jenn Ladisch Douglass

 

SYNOPSIS AS INTRODUCED:
 
805 ILCS 5/15.35  from Ch. 32, par. 15.35
805 ILCS 5/15.65  from Ch. 32, par. 15.65

    Amends the Business Corporation Act of 1983. Provides that a business with an average employee head count of 49 or fewer employees is exempt from the taxes imposed under the Act.


LRB103 27511 HLH 53886 b

 

 

A BILL FOR

 

HB2893LRB103 27511 HLH 53886 b

1    AN ACT concerning revenue.
 
2    Be it enacted by the People of the State of Illinois,
3represented in the General Assembly:
 
4    Section 5. The Business Corporation Act of 1983 is amended
5by changing Sections 15.35 and 15.65 as follows:
 
6    (805 ILCS 5/15.35)  (from Ch. 32, par. 15.35)
7    (Text of Section from P.A. 102-16)
8    Sec. 15.35. Franchise taxes payable by domestic
9corporations. For the privilege of exercising its franchises
10in this State, each domestic corporation shall pay to the
11Secretary of State the following franchise taxes, computed on
12the basis, at the rates and for the periods prescribed in this
13Act:
14        (a) An initial franchise tax at the time of filing its
15    first report of issuance of shares.
16        (b) An additional franchise tax at the time of filing
17    (1) a report of the issuance of additional shares, or (2) a
18    report of an increase in paid-in capital without the
19    issuance of shares, or (3) an amendment to the articles of
20    incorporation or a report of cumulative changes in paid-in
21    capital, whenever any amendment or such report discloses
22    an increase in its paid-in capital over the amount thereof
23    last reported in any document, other than an annual

 

 

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1    report, interim annual report or final transition annual
2    report required by this Act to be filed in the office of
3    the Secretary of State.
4        (c) An additional franchise tax at the time of filing
5    a report of paid-in capital following a statutory merger
6    or consolidation, which discloses that the paid-in capital
7    of the surviving or new corporation immediately after the
8    merger or consolidation is greater than the sum of the
9    paid-in capital of all of the merged or consolidated
10    corporations as last reported by them in any documents,
11    other than annual reports, required by this Act to be
12    filed in the office of the Secretary of State; and in
13    addition, the surviving or new corporation shall be liable
14    for a further additional franchise tax on the paid-in
15    capital of each of the merged or consolidated corporations
16    as last reported by them in any document, other than an
17    annual report, required by this Act to be filed with the
18    Secretary of State from their taxable year end to the next
19    succeeding anniversary month or, in the case of a
20    corporation which has established an extended filing
21    month, the extended filing month of the surviving or new
22    corporation; however if the taxable year ends within the
23    2-month period immediately preceding the anniversary month
24    or, in the case of a corporation which has established an
25    extended filing month, the extended filing month of the
26    surviving or new corporation the tax will be computed to

 

 

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1    the anniversary month or, in the case of a corporation
2    which has established an extended filing month, the
3    extended filing month of the surviving or new corporation
4    in the next succeeding calendar year.
5        (d) An annual franchise tax payable each year with the
6    annual report which the corporation is required by this
7    Act to file.
8    On or after January 1, 2020 and prior to January 1, 2021,
9the first $30 in liability is exempt from the tax imposed under
10this Section. On or after January 1, 2021, the first $1,000 in
11liability is exempt from the tax imposed under this Section.
12    (e) Notwithstanding any other provision of law, beginning
13on June 1, 2023, a business with an average employee head count
14of 49 or fewer employees is exempt from the taxes imposed under
15this Section.
16(Source: P.A. 101-9, eff. 6-5-19; 102-16, eff. 6-17-21.)
 
17    (Text of Section from P.A. 102-282)
18    Sec. 15.35. Franchise taxes payable by domestic
19corporations. For the privilege of exercising its franchises
20in this State, each domestic corporation shall pay to the
21Secretary of State the following franchise taxes, computed on
22the basis, at the rates and for the periods prescribed in this
23Act:
24        (a) An initial franchise tax at the time of filing its
25    first report of issuance of shares.

 

 

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1        (b) An additional franchise tax at the time of filing
2    (1) a report of the issuance of additional shares, or (2) a
3    report of an increase in paid-in capital without the
4    issuance of shares, or (3) an amendment to the articles of
5    incorporation or a report of cumulative changes in paid-in
6    capital, whenever any amendment or such report discloses
7    an increase in its paid-in capital over the amount thereof
8    last reported in any document, other than an annual
9    report, interim annual report or final transition annual
10    report required by this Act to be filed in the office of
11    the Secretary of State.
12        (c) An additional franchise tax at the time of filing
13    a report of paid-in capital following a statutory merger
14    or consolidation, which discloses that the paid-in capital
15    of the surviving or new corporation immediately after the
16    merger or consolidation is greater than the sum of the
17    paid-in capital of all of the merged or consolidated
18    corporations as last reported by them in any documents,
19    other than annual reports, required by this Act to be
20    filed in the office of the Secretary of State; and in
21    addition, the surviving or new corporation shall be liable
22    for a further additional franchise tax on the paid-in
23    capital of each of the merged or consolidated corporations
24    as last reported by them in any document, other than an
25    annual report, required by this Act to be filed with the
26    Secretary of State from their taxable year end to the next

 

 

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1    succeeding anniversary month or, in the case of a
2    corporation which has established an extended filing
3    month, the extended filing month of the surviving or new
4    corporation; however if the taxable year ends within the
5    2-month period immediately preceding the anniversary month
6    or, in the case of a corporation which has established an
7    extended filing month, the extended filing month of the
8    surviving or new corporation the tax will be computed to
9    the anniversary month or, in the case of a corporation
10    which has established an extended filing month, the
11    extended filing month of the surviving or new corporation
12    in the next succeeding calendar year.
13        (d) An annual franchise tax payable each year with the
14    annual report which the corporation is required by this
15    Act to file.
16    On or after January 1, 2020 and prior to January 1, 2021,
17the first $30 in liability is exempt from the tax imposed under
18this Section. On or after January 1, 2021 and prior to January
191, 2022, the first $1,000 in liability is exempt from the tax
20imposed under this Section. On or after January 1, 2022 and
21prior to January 1, 2023, the first $10,000 in liability is
22exempt from the tax imposed under this Section. On or after
23January 1, 2023 and prior to January 1, 2024, the first
24$100,000 in liability is exempt from the tax imposed under
25this Section. The provisions of this Section shall not require
26the payment of any franchise tax that would otherwise have

 

 

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1been due and payable on or after January 1, 2024. There shall
2be no refunds or proration of franchise tax for any taxes due
3and payable on or after January 1, 2024 on the basis that a
4portion of the corporation's taxable year extends beyond
5January 1, 2024. Public Act 101-9 shall not affect any right
6accrued or established, or any liability or penalty incurred
7prior to January 1, 2024.
8    (e) Notwithstanding any other provision of law, beginning
9on June 1, 2023, a business with an average employee head count
10of 49 or fewer employees is exempt from the taxes imposed under
11this Section.
12    This Section is repealed on December 31, 2024.
13(Source: P.A. 101-9, eff. 6-5-19; 102-282, eff. 1-1-22.)
 
14    (Text of Section from P.A. 102-558)
15    Sec. 15.35. Franchise taxes payable by domestic
16corporations. For the privilege of exercising its franchises
17in this State, each domestic corporation shall pay to the
18Secretary of State the following franchise taxes, computed on
19the basis, at the rates and for the periods prescribed in this
20Act:
21        (a) An initial franchise tax at the time of filing its
22    first report of issuance of shares.
23        (b) An additional franchise tax at the time of filing
24    (1) a report of the issuance of additional shares, or (2) a
25    report of an increase in paid-in capital without the

 

 

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1    issuance of shares, or (3) an amendment to the articles of
2    incorporation or a report of cumulative changes in paid-in
3    capital, whenever any amendment or such report discloses
4    an increase in its paid-in capital over the amount thereof
5    last reported in any document, other than an annual
6    report, interim annual report or final transition annual
7    report required by this Act to be filed in the office of
8    the Secretary of State.
9        (c) An additional franchise tax at the time of filing
10    a report of paid-in capital following a statutory merger
11    or consolidation, which discloses that the paid-in capital
12    of the surviving or new corporation immediately after the
13    merger or consolidation is greater than the sum of the
14    paid-in capital of all of the merged or consolidated
15    corporations as last reported by them in any documents,
16    other than annual reports, required by this Act to be
17    filed in the office of the Secretary of State; and in
18    addition, the surviving or new corporation shall be liable
19    for a further additional franchise tax on the paid-in
20    capital of each of the merged or consolidated corporations
21    as last reported by them in any document, other than an
22    annual report, required by this Act to be filed with the
23    Secretary of State from their taxable year end to the next
24    succeeding anniversary month or, in the case of a
25    corporation which has established an extended filing
26    month, the extended filing month of the surviving or new

 

 

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1    corporation; however if the taxable year ends within the
2    2-month period immediately preceding the anniversary month
3    or, in the case of a corporation which has established an
4    extended filing month, the extended filing month of the
5    surviving or new corporation the tax will be computed to
6    the anniversary month or, in the case of a corporation
7    which has established an extended filing month, the
8    extended filing month of the surviving or new corporation
9    in the next succeeding calendar year.
10        (d) An annual franchise tax payable each year with the
11    annual report which the corporation is required by this
12    Act to file.
13    On or after January 1, 2020 and prior to January 1, 2021,
14the first $30 in liability is exempt from the tax imposed under
15this Section. On or after January 1, 2021 and prior to January
161, 2022, the first $1,000 in liability is exempt from the tax
17imposed under this Section. On or after January 1, 2022 and
18prior to January 1, 2023, the first $10,000 in liability is
19exempt from the tax imposed under this Section. On or after
20January 1, 2023 and prior to January 1, 2024, the first
21$100,000 in liability is exempt from the tax imposed under
22this Section. The provisions of this Section shall not require
23the payment of any franchise tax that would otherwise have
24been due and payable on or after January 1, 2024. There shall
25be no refunds or proration of franchise tax for any taxes due
26and payable on or after January 1, 2024 on the basis that a

 

 

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1portion of the corporation's taxable year extends beyond
2January 1, 2024. Public Act 101-9 shall not affect any right
3accrued or established, or any liability or penalty incurred
4prior to January 1, 2024.
5    (e) Notwithstanding any other provision of law, beginning
6on June 1, 2023, a business with an average employee head count
7of 49 or fewer employees is exempt from the taxes imposed under
8this Section.
9    This Section is repealed on December 31, 2025.
10(Source: P.A. 101-9, eff. 6-5-19; 102-558, eff. 8-20-21.)
 
11    (805 ILCS 5/15.65)  (from Ch. 32, par. 15.65)
12    Sec. 15.65. Franchise taxes payable by foreign
13corporations. For the privilege of exercising its authority to
14transact such business in this State as set out in its
15application therefor or any amendment thereto, each foreign
16corporation shall pay to the Secretary of State the following
17franchise taxes, computed on the basis, at the rates and for
18the periods prescribed in this Act:
19        (a) An initial franchise tax at the time of filing its
20    application for authority to transact business in this
21    State.
22        (b) An additional franchise tax at the time of filing
23    (1) a report of the issuance of additional shares, or (2) a
24    report of an increase in paid-in capital without the
25    issuance of shares, or (3) a report of cumulative changes

 

 

HB2893- 10 -LRB103 27511 HLH 53886 b

1    in paid-in capital or a report of an exchange or
2    reclassification of shares, whenever any such report
3    discloses an increase in its paid-in capital over the
4    amount thereof last reported in any document, other than
5    an annual report, interim annual report or final
6    transition annual report, required by this Act to be filed
7    in the office of the Secretary of State.
8        (c) Whenever the corporation shall be a party to a
9    statutory merger and shall be the surviving corporation,
10    an additional franchise tax at the time of filing its
11    report following merger, if such report discloses that the
12    amount represented in this State of its paid-in capital
13    immediately after the merger is greater than the aggregate
14    of the amounts represented in this State of the paid-in
15    capital of such of the merged corporations as were
16    authorized to transact business in this State at the time
17    of the merger, as last reported by them in any documents,
18    other than annual reports, required by this Act to be
19    filed in the office of the Secretary of State; and in
20    addition, the surviving corporation shall be liable for a
21    further additional franchise tax on the paid-in capital of
22    each of the merged corporations as last reported by them
23    in any document, other than an annual report, required by
24    this Act to be filed with the Secretary of State, from
25    their taxable year end to the next succeeding anniversary
26    month or, in the case of a corporation which has

 

 

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1    established an extended filing month, the extended filing
2    month of the surviving corporation; however if the taxable
3    year ends within the 2-month period immediately preceding
4    the anniversary month or the extended filing month of the
5    surviving corporation, the tax will be computed to the
6    anniversary or, extended filing month of the surviving
7    corporation in the next succeeding calendar year.
8        (d) An annual franchise tax payable each year with any
9    annual report which the corporation is required by this
10    Act to file.
11    On or after January 1, 2020 and prior to January 1, 2021,
12the first $30 in liability is exempt from the tax imposed under
13this Section. On or after January 1, 2021, the first $1,000 in
14liability is exempt from the tax imposed under this Section.
15    (e) Notwithstanding any other provision of law, beginning
16on June 1, 2023, a business with an average employee head count
17of 49 or fewer employees is exempt from the taxes imposed under
18this Section.
19(Source: P.A. 101-9, eff. 6-5-19; 102-16, eff. 6-17-21;
20102-558, eff. 8-20-21; 102-813, eff. 5-13-22.)