103RD GENERAL ASSEMBLY
State of Illinois
2023 and 2024
HB5001

 

Introduced 2/8/2024, by Rep. Steven Reick

 

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

    Amends the Business Corporation Act of 1983. Provides that, on or after January 1, 2025 and prior to January 1, 2026, the first $10,000 in liability is exempt from the franchise tax payable by domestic corporations. On or after January 1, 2026 and prior to January 1, 2027, the first $100,000 in liability is exempt from the franchise tax payable by domestic corporations. Provides that, in the case of a domestic corporation, no payment is required for a franchise tax that would have been due and payable on or after January 1, 2027. Repeals the provision concerning franchise taxes payable by domestic corporations on January 1, 2028. Effective immediately.


LRB103 37631 SPS 67758 b

 

 

A BILL FOR

 

HB5001LRB103 37631 SPS 67758 b

1    AN ACT concerning business.
 
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 Section 15.35 as follows:
 
6    (805 ILCS 5/15.35)  (from Ch. 32, par. 15.35)
7    (Text of Section from P.A. 102-16 and 103-8)
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

 

 

HB5001- 2 -LRB103 37631 SPS 67758 b

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

 

 

HB5001- 3 -LRB103 37631 SPS 67758 b

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, and prior to January
111, 2024, the first $1,000 in liability is exempt from the tax
12imposed under this Section. On or after January 1, 2024 and
13prior to January 1, 2025, the first $5,000 in liability is
14exempt from the tax imposed under this Section. On or after
15January 1, 2025 and prior to January 1, 2026, the first $10,000
16in liability is exempt from the tax imposed under this
17Section. On or after January 1, 2026 and prior to January 1,
182027, the first $100,000 in liability is exempt from the tax
19imposed under this Section. The provisions of this Section
20shall not require the payment of any franchise tax that would
21otherwise have been due and payable on or after January 1,
222027. There shall be no refunds or proration of franchise tax
23for any taxes due and payable on or after January 1, 2027 on
24the basis that a portion of the corporation's taxable year
25extends beyond January 1, 2027.
26    This Section is repealed on January 1, 2028.

 

 

HB5001- 4 -LRB103 37631 SPS 67758 b

1(Source: P.A. 102-16, eff. 6-17-21; 103-8, eff. 6-7-23.)
 
2    (Text of Section from P.A. 102-282, 102-558, and 103-8)
3    Sec. 15.35. Franchise taxes payable by domestic
4corporations. For the privilege of exercising its franchises
5in this State, each domestic corporation shall pay to the
6Secretary of State the following franchise taxes, computed on
7the basis, at the rates and for the periods prescribed in this
8Act:
9        (a) An initial franchise tax at the time of filing its
10    first report of issuance of shares.
11        (b) An additional franchise tax at the time of filing
12    (1) a report of the issuance of additional shares, or (2) a
13    report of an increase in paid-in capital without the
14    issuance of shares, or (3) an amendment to the articles of
15    incorporation or a report of cumulative changes in paid-in
16    capital, whenever any amendment or such report discloses
17    an increase in its paid-in capital over the amount thereof
18    last reported in any document, other than an annual
19    report, interim annual report or final transition annual
20    report required by this Act to be filed in the office of
21    the Secretary of State.
22        (c) An additional franchise tax at the time of filing
23    a report of paid-in capital following a statutory merger
24    or consolidation, which discloses that the paid-in capital
25    of the surviving or new corporation immediately after the

 

 

HB5001- 5 -LRB103 37631 SPS 67758 b

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

 

 

HB5001- 6 -LRB103 37631 SPS 67758 b

1    On or after January 1, 2020 and prior to January 1, 2021,
2the first $30 in liability is exempt from the tax imposed under
3this Section. On or after January 1, 2021 and prior to January
41, 2024, the first $1,000 in liability is exempt from the tax
5imposed under this Section. On or after January 1, 2024 and
6prior to January 1, 2025, the first $5,000 in liability is
7exempt from the tax imposed under this Section. On or after
8January 1, 2025 and prior to January 1, 2026, the first $10,000
9in liability is exempt from the tax imposed under this
10Section. On or after January 1, 2026 and prior to January 1,
112027, the first $100,000 in liability is exempt from the tax
12imposed under this Section. The provisions of this Section
13shall not require the payment of any franchise tax that would
14otherwise have been due and payable on or after January 1,
152027. There shall be no refunds or proration of franchise tax
16for any taxes due and payable on or after January 1, 2027 on
17the basis that a portion of the corporation's taxable year
18extends beyond January 1, 2027.
19    This Section is repealed on January 1, 2028.
20(Source: P.A. 102-282, eff. 1-1-22; 102-558, eff. 8-20-21;
21103-8, eff. 6-7-23.)
 
22    Section 99. Effective date. This Act takes effect upon
23becoming law.