Bill Text: IL HB5001 | 2023-2024 | 103rd General Assembly | Introduced

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Bill Title: 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. Provides that, 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.

Spectrum: Partisan Bill (Republican 2-0)

Status: (Introduced) 2024-02-22 - Added Co-Sponsor Rep. Tony M. McCombie [HB5001 Detail]

Download: Illinois-2023-HB5001-Introduced.html

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103RD GENERAL ASSEMBLY State of Illinois 2023 and 2024 HB5001 Introduced , 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
HB5001 LRB103 37631 SPS 67758 b
AN ACT concerning business.
Be it enacted by the People of the State of Illinois,
represented in the General Assembly:
Section 5. The Business Corporation Act of 1983 is amended
by changing Section 15.35 as follows:
(805 ILCS 5/15.35) (from Ch. 32, par. 15.35)
(Text of Section from P.A. 102-16 and 103-8)
Sec. 15.35. Franchise taxes payable by domestic
corporations. For the privilege of exercising its franchises
in this State, each domestic corporation shall pay to the
Secretary of State the following franchise taxes, computed on
the basis, at the rates and for the periods prescribed in this
Act:
(a) An initial franchise tax at the time of filing its
first report of issuance of shares.
(b) An additional franchise tax at the time of filing
(1) a report of the issuance of additional shares, or (2) a
report of an increase in paid-in capital without the
issuance of shares, or (3) an amendment to the articles of
incorporation or a report of cumulative changes in paid-in
capital, whenever any amendment or such report discloses
an increase in its paid-in capital over the amount thereof
last reported in any document, other than an annual

HB5001 - 2 - LRB103 37631 SPS 67758 b
report, interim annual report or final transition annual
report required by this Act to be filed in the office of
the Secretary of State.
(c) An additional franchise tax at the time of filing
a report of paid-in capital following a statutory merger
or consolidation, which discloses that the paid-in capital
of the surviving or new corporation immediately after the
merger or consolidation is greater than the sum of the
paid-in capital of all of the merged or consolidated
corporations as last reported by them in any documents,
other than annual reports, required by this Act to be
filed in the office of the Secretary of State; and in
addition, the surviving or new corporation shall be liable
for a further additional franchise tax on the paid-in
capital of each of the merged or consolidated corporations
as last reported by them in any document, other than an
annual report, required by this Act to be filed with the
Secretary of State from their taxable year end to the next
succeeding anniversary month or, in the case of a
corporation which has established an extended filing
month, the extended filing month of the surviving or new
corporation; however if the taxable year ends within the
2-month period immediately preceding the anniversary month
or, in the case of a corporation which has established an
extended filing month, the extended filing month of the
surviving or new corporation the tax will be computed to

HB5001 - 3 - LRB103 37631 SPS 67758 b
the anniversary month or, in the case of a corporation
which has established an extended filing month, the
extended filing month of the surviving or new corporation
in the next succeeding calendar year.
(d) An annual franchise tax payable each year with the
annual report which the corporation is required by this
Act to file.
On or after January 1, 2020 and prior to January 1, 2021,
the first $30 in liability is exempt from the tax imposed under
this Section. On or after January 1, 2021, and prior to January
1, 2024, the first $1,000 in liability is exempt from the tax
imposed under this Section. On or after January 1, 2024 and
prior to January 1, 2025, the first $5,000 in liability is
exempt from the tax imposed under this Section. On or after
January 1, 2025 and prior to January 1, 2026, the first $10,000
in liability is exempt from the tax imposed under this
Section. On or after January 1, 2026 and prior to January 1,
2027, the first $100,000 in liability is exempt from the tax
imposed under this Section. The provisions of this Section
shall not require the payment of any franchise tax that would
otherwise have been due and payable on or after January 1,
2027. There shall be no refunds or proration of franchise tax
for any taxes due and payable on or after January 1, 2027 on
the basis that a portion of the corporation's taxable year
extends beyond January 1, 2027.
This Section is repealed on January 1, 2028.

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

HB5001 - 5 - LRB103 37631 SPS 67758 b
merger or consolidation is greater than the sum of the
paid-in capital of all of the merged or consolidated
corporations as last reported by them in any documents,
other than annual reports, required by this Act to be
filed in the office of the Secretary of State; and in
addition, the surviving or new corporation shall be liable
for a further additional franchise tax on the paid-in
capital of each of the merged or consolidated corporations
as last reported by them in any document, other than an
annual report, required by this Act to be filed with the
Secretary of State from their taxable year end to the next
succeeding anniversary month or, in the case of a
corporation which has established an extended filing
month, the extended filing month of the surviving or new
corporation; however if the taxable year ends within the
2-month period immediately preceding the anniversary month
or, in the case of a corporation which has established an
extended filing month, the extended filing month of the
surviving or new corporation the tax will be computed to
the anniversary month or, in the case of a corporation
which has established an extended filing month, the
extended filing month of the surviving or new corporation
in the next succeeding calendar year.
(d) An annual franchise tax payable each year with the
annual report which the corporation is required by this
Act to file.

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On or after January 1, 2020 and prior to January 1, 2021,
the first $30 in liability is exempt from the tax imposed under
this Section. On or after January 1, 2021 and prior to January
1, 2024, the first $1,000 in liability is exempt from the tax
imposed under this Section. On or after January 1, 2024 and
prior to January 1, 2025, the first $5,000 in liability is
exempt from the tax imposed under this Section. On or after
January 1, 2025 and prior to January 1, 2026, the first $10,000
in liability is exempt from the tax imposed under this
Section. On or after January 1, 2026 and prior to January 1,
2027, the first $100,000 in liability is exempt from the tax
imposed under this Section. The provisions of this Section
shall not require the payment of any franchise tax that would
otherwise have been due and payable on or after January 1,
2027. There shall be no refunds or proration of franchise tax
for any taxes due and payable on or after January 1, 2027 on
the basis that a portion of the corporation's taxable year
extends beyond January 1, 2027.
This Section is repealed on January 1, 2028.
(Source: P.A. 102-282, eff. 1-1-22; 102-558, eff. 8-20-21;
103-8, eff. 6-7-23.)