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
 
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 
 
 
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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, 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.
 
 
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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 
 
 
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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.
 
 
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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.)