Bill Text: IL SB1406 | 2023-2024 | 103rd General Assembly | Introduced

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Bill Title: Amends the Business Corporation Act of 1983. Provides that, in the case of a domestic or foreign corporation, no payment is required for a franchise tax that would have been due and payable on or after January 1, 2024. Repeals the provisions on January 1, 2025. Directs the Legislative Reference Bureau to prepare a bill effecting necessary changes to conform the statutes to the changes made by the amendatory Act. Effective immediately.

Spectrum: Partisan Bill (Republican 7-0)

Status: (Introduced) 2024-01-26 - Added as Co-Sponsor Sen. Neil Anderson [SB1406 Detail]

Download: Illinois-2023-SB1406-Introduced.html

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103RD GENERAL ASSEMBLY State of Illinois 2023 and 2024 SB1406 Introduced 2/6/2023, by Sen. Win Stoller 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
805 ILCS 5/15.98 new
Amends the Business Corporation Act of 1983. Provides that, in the case of a domestic or foreign corporation, no payment is required for a franchise tax that would have been due and payable on or after January 1, 2024. Repeals those Sections on January 1, 2025. Directs the Legislative Reference Bureau to prepare a bill effecting necessary changes to conform the statutes to the changes made by the amendatory Act. Effective immediately.
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A BILL FOR
SB1406 LRB103 04503 HLH 49509 b
AN ACT concerning revenue.
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 Sections 15.35 and 15.65 and by adding Section
15.98 as follows:
(805 ILCS 5/15.35) (from Ch. 32, par. 15.35)
(Text of Section from P.A. 102-16)
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

SB1406 - 2 - LRB103 04503 HLH 49509 b
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
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

SB1406 - 3 - LRB103 04503 HLH 49509 b
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.
On or after January 1, 2020 and before 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 before
January 1, 2022, the first $1,000 in liability is exempt from
the tax imposed under this Section. On or after January 1, 2022
and before January 1, 2023, the first $10,000 in liability is
exempt from the tax imposed under this Section. On or after
January 1, 2023 and before January 1, 2024, 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, 2024. There shall be no
refunds or proration of franchise tax for any taxes due and
payable on or after January 1, 2024 on the basis that a portion
of the corporation's taxable year extends beyond January 1,
2024. Public Act 101-9 shall not affect any right accrued or
established, or any liability or penalty incurred prior to
January 1, 2024.

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This Section is repealed on January 1, 2025.
(Source: P.A. 101-9, eff. 6-5-19; 102-16, eff. 6-17-21.)
(Text of Section from P.A. 102-282)
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

SB1406 - 5 - LRB103 04503 HLH 49509 b
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
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

SB1406 - 6 - LRB103 04503 HLH 49509 b
Act to file.
On or after January 1, 2020 and before 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 before
prior to January 1, 2022, the first $1,000 in liability is
exempt from the tax imposed under this Section. On or after
January 1, 2022 and before prior to January 1, 2023, the first
$10,000 in liability is exempt from the tax imposed under this
Section. On or after January 1, 2023 and before prior to
January 1, 2024, 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, 2024. There shall be no refunds or proration of
franchise tax for any taxes due and payable on or after January
1, 2024 on the basis that a portion of the corporation's
taxable year extends beyond January 1, 2024. Public Act 101-9
shall not affect any right accrued or established, or any
liability or penalty incurred prior to January 1, 2024.
This Section is repealed on January 1, 2025 December 31,
2024.
(Source: P.A. 101-9, eff. 6-5-19; 102-282, eff. 1-1-22.)
(Text of Section from P.A. 102-558)
Sec. 15.35. Franchise taxes payable by domestic
corporations. For the privilege of exercising its franchises

SB1406 - 7 - LRB103 04503 HLH 49509 b
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
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

SB1406 - 8 - LRB103 04503 HLH 49509 b
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.
On or after January 1, 2020 and before 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 before
prior to January 1, 2022, the first $1,000 in liability is
exempt from the tax imposed under this Section. On or after

SB1406 - 9 - LRB103 04503 HLH 49509 b
January 1, 2022 and before prior to January 1, 2023, the first
$10,000 in liability is exempt from the tax imposed under this
Section. On or after January 1, 2023 and before prior to
January 1, 2024, 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, 2024. There shall be no refunds or proration of
franchise tax for any taxes due and payable on or after January
1, 2024 on the basis that a portion of the corporation's
taxable year extends beyond January 1, 2024. Public Act 101-9
shall not affect any right accrued or established, or any
liability or penalty incurred prior to January 1, 2024.
This Section is repealed on January 1, 2025 December 31,
2025.
(Source: P.A. 101-9, eff. 6-5-19; 102-558, eff. 8-20-21.)
(805 ILCS 5/15.65) (from Ch. 32, par. 15.65)
Sec. 15.65. Franchise taxes payable by foreign
corporations. For the privilege of exercising its authority to
transact such business in this State as set out in its
application therefor or any amendment thereto, each foreign
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

SB1406 - 10 - LRB103 04503 HLH 49509 b
application for authority to transact business in this
State.
(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) a report of cumulative changes
in paid-in capital or a report of an exchange or
reclassification of shares, whenever any 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) Whenever the corporation shall be a party to a
statutory merger and shall be the surviving corporation,
an additional franchise tax at the time of filing its
report following merger, if such report discloses that the
amount represented in this State of its paid-in capital
immediately after the merger is greater than the aggregate
of the amounts represented in this State of the paid-in
capital of such of the merged corporations as were
authorized to transact business in this State at the time
of the merger, 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 corporation shall be liable for a

SB1406 - 11 - LRB103 04503 HLH 49509 b
further additional franchise tax on the paid-in capital of
each of the merged 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 corporation; however if the taxable
year ends within the 2-month period immediately preceding
the anniversary month or the extended filing month of the
surviving corporation, the tax will be computed to the
anniversary or, extended filing month of the surviving
corporation in the next succeeding calendar year.
(d) An annual franchise tax payable each year with any
annual report which the corporation is required by this
Act to file.
On or after January 1, 2020 and before 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 before
January 1, 2024, the first $1,000 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, 2024. There shall be no refunds or proration of
franchise tax for any taxes due and payable on or after January
1, 2024 on the basis that a portion of the corporation's

SB1406 - 12 - LRB103 04503 HLH 49509 b
taxable year extends beyond January 1, 2024. This amendatory
Act of the 103rd General Assembly shall not affect any right
accrued or established, or any liability or penalty incurred
prior to January 1, 2024.
This Section is repealed on January 1, 2025.
(Source: P.A. 101-9, eff. 6-5-19; 102-16, eff. 6-17-21;
102-558, eff. 8-20-21; 102-813, eff. 5-13-22.)
(805 ILCS 5/15.98 new)
Sec. 15.98. Preparation of bill. The Legislative Reference
Bureau shall prepare for introduction in the 2024 spring
session of the General Assembly a bill effecting such changes
in the statutes as may be necessary to conform the statutes to
the changes in law made by this amendatory Act of the 103rd
General Assembly.
Section 99. Effective date. This Act takes effect upon
becoming law.