Bill Text: IL HB3754 | 2023-2024 | 103rd General Assembly | Introduced

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Bill Title: Amends the Illinois Income Tax Act. Provides that, beginning July 1, 2023, the Department of Revenue shall deposit 10% of the net revenue realized from the income taxes imposed under the Act directly into the Local Government Distributive Fund as that revenue is realized. Effective immediately.

Spectrum: Partisan Bill (Democrat 1-0)

Status: (Introduced) 2023-02-17 - Referred to Rules Committee [HB3754 Detail]

Download: Illinois-2023-HB3754-Introduced.html

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103RD GENERAL ASSEMBLY State of Illinois 2023 and 2024 HB3754 Introduced , by Rep. Matt Hanson SYNOPSIS AS INTRODUCED:
35 ILCS 5/901
Amends the Illinois Income Tax Act. Provides that, beginning July 1, 2023, the Department of Revenue shall deposit 10% of the net revenue realized from the income taxes imposed under the Act directly into the Local Government Distributive Fund as that revenue is realized. Effective immediately.
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A BILL FOR
HB3754 LRB103 26429 HLH 52792 b
AN ACT concerning revenue.
Be it enacted by the People of the State of Illinois,
represented in the General Assembly:
Section 5. The Illinois Income Tax Act is amended by
changing Section 901 as follows:
(35 ILCS 5/901)
Sec. 901. Collection authority.
(a) In general. The Department shall collect the taxes
imposed by this Act. The Department shall collect certified
past due child support amounts under Section 2505-650 of the
Department of Revenue Law of the Civil Administrative Code of
Illinois. Except as provided in subsections (b), (c), (e),
(f), (g), and (h) of this Section, money collected pursuant to
subsections (a) and (b) of Section 201 of this Act shall be
paid into the General Revenue Fund in the State treasury;
money collected pursuant to subsections (c) and (d) of Section
201 of this Act shall be paid into the Personal Property Tax
Replacement Fund, a special fund in the State Treasury; and
money collected under Section 2505-650 of the Department of
Revenue Law of the Civil Administrative Code of Illinois shall
be paid into the Child Support Enforcement Trust Fund, a
special fund outside the State Treasury, or to the State
Disbursement Unit established under Section 10-26 of the

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Illinois Public Aid Code, as directed by the Department of
Healthcare and Family Services.
(b) Local Government Distributive Fund.
Beginning August 1, 2017 and continuing through July 31,
2022, the Treasurer shall transfer each month from the General
Revenue Fund to the Local Government Distributive Fund an
amount equal to the sum of: (i) 6.06% (10% of the ratio of the
3% individual income tax rate prior to 2011 to the 4.95%
individual income tax rate after July 1, 2017) of the net
revenue realized from the tax imposed by subsections (a) and
(b) of Section 201 of this Act upon individuals, trusts, and
estates during the preceding month; (ii) 6.85% (10% of the
ratio of the 4.8% corporate income tax rate prior to 2011 to
the 7% corporate income tax rate after July 1, 2017) of the net
revenue realized from the tax imposed by subsections (a) and
(b) of Section 201 of this Act upon corporations during the
preceding month; and (iii) beginning February 1, 2022, 6.06%
of the net revenue realized from the tax imposed by subsection
(p) of Section 201 of this Act upon electing pass-through
entities.
Beginning August 1, 2022 and continuing through June 30,
2023, the Treasurer shall transfer each month from the General
Revenue Fund to the Local Government Distributive Fund an
amount equal to the sum of: (i) 6.16% of the net revenue
realized from the tax imposed by subsections (a) and (b) of
Section 201 of this Act upon individuals, trusts, and estates

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during the preceding month; (ii) 6.85% of the net revenue
realized from the tax imposed by subsections (a) and (b) of
Section 201 of this Act upon corporations during the preceding
month; and (iii) 6.16% of the net revenue realized from the tax
imposed by subsection (p) of Section 201 of this Act upon
electing pass-through entities.
Beginning July 1, 2023, the Department shall deposit 10%
of the net revenue realized from the taxes imposed by
subsections (a), (b), and (p) of Section 201 directly into the
Local Government Distributive Fund as that revenue is
realized.
Net revenue realized for a month shall be defined as the
revenue from the tax imposed by subsections (a) and (b) of
Section 201 of this Act which is deposited in the General
Revenue Fund, the Education Assistance Fund, the Income Tax
Surcharge Local Government Distributive Fund, the Fund for the
Advancement of Education, and the Commitment to Human Services
Fund during the month minus the amount paid out of the General
Revenue Fund in State warrants during that same month as
refunds to taxpayers for overpayment of liability under the
tax imposed by subsections (a) and (b) of Section 201 of this
Act.
Notwithstanding any provision of law to the contrary,
beginning on July 6, 2017 (the effective date of Public Act
100-23), those amounts required under this subsection (b) to
be transferred by the Treasurer into the Local Government

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Distributive Fund from the General Revenue Fund shall be
directly deposited into the Local Government Distributive Fund
as the revenue is realized from the tax imposed by subsections
(a) and (b) of Section 201 of this Act.
(c) Deposits Into Income Tax Refund Fund.
(1) Beginning on January 1, 1989 and thereafter, the
Department shall deposit a percentage of the amounts
collected pursuant to subsections (a) and (b)(1), (2), and
(3) of Section 201 of this Act into a fund in the State
treasury known as the Income Tax Refund Fund. Beginning
with State fiscal year 1990 and for each fiscal year
thereafter, the percentage deposited into the Income Tax
Refund Fund during a fiscal year shall be the Annual
Percentage. For fiscal year 2011, the Annual Percentage
shall be 8.75%. For fiscal year 2012, the Annual
Percentage shall be 8.75%. For fiscal year 2013, the
Annual Percentage shall be 9.75%. For fiscal year 2014,
the Annual Percentage shall be 9.5%. For fiscal year 2015,
the Annual Percentage shall be 10%. For fiscal year 2018,
the Annual Percentage shall be 9.8%. For fiscal year 2019,
the Annual Percentage shall be 9.7%. For fiscal year 2020,
the Annual Percentage shall be 9.5%. For fiscal year 2021,
the Annual Percentage shall be 9%. For fiscal year 2022,
the Annual Percentage shall be 9.25%. For fiscal year
2023, the Annual Percentage shall be 9.25%. For all other
fiscal years, the Annual Percentage shall be calculated as

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a fraction, the numerator of which shall be the amount of
refunds approved for payment by the Department during the
preceding fiscal year as a result of overpayment of tax
liability under subsections (a) and (b)(1), (2), and (3)
of Section 201 of this Act plus the amount of such refunds
remaining approved but unpaid at the end of the preceding
fiscal year, minus the amounts transferred into the Income
Tax Refund Fund from the Tobacco Settlement Recovery Fund,
and the denominator of which shall be the amounts which
will be collected pursuant to subsections (a) and (b)(1),
(2), and (3) of Section 201 of this Act during the
preceding fiscal year; except that in State fiscal year
2002, the Annual Percentage shall in no event exceed 7.6%.
The Director of Revenue shall certify the Annual
Percentage to the Comptroller on the last business day of
the fiscal year immediately preceding the fiscal year for
which it is to be effective.
(2) Beginning on January 1, 1989 and thereafter, the
Department shall deposit a percentage of the amounts
collected pursuant to subsections (a) and (b)(6), (7), and
(8), (c) and (d) of Section 201 of this Act into a fund in
the State treasury known as the Income Tax Refund Fund.
Beginning with State fiscal year 1990 and for each fiscal
year thereafter, the percentage deposited into the Income
Tax Refund Fund during a fiscal year shall be the Annual
Percentage. For fiscal year 2011, the Annual Percentage

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shall be 17.5%. For fiscal year 2012, the Annual
Percentage shall be 17.5%. For fiscal year 2013, the
Annual Percentage shall be 14%. For fiscal year 2014, the
Annual Percentage shall be 13.4%. For fiscal year 2015,
the Annual Percentage shall be 14%. For fiscal year 2018,
the Annual Percentage shall be 17.5%. For fiscal year
2019, the Annual Percentage shall be 15.5%. For fiscal
year 2020, the Annual Percentage shall be 14.25%. For
fiscal year 2021, the Annual Percentage shall be 14%. For
fiscal year 2022, the Annual Percentage shall be 15%. For
fiscal year 2023, the Annual Percentage shall be 14.5%.
For all other fiscal years, the Annual Percentage shall be
calculated as a fraction, the numerator of which shall be
the amount of refunds approved for payment by the
Department during the preceding fiscal year as a result of
overpayment of tax liability under subsections (a) and
(b)(6), (7), and (8), (c) and (d) of Section 201 of this
Act plus the amount of such refunds remaining approved but
unpaid at the end of the preceding fiscal year, and the
denominator of which shall be the amounts which will be
collected pursuant to subsections (a) and (b)(6), (7), and
(8), (c) and (d) of Section 201 of this Act during the
preceding fiscal year; except that in State fiscal year
2002, the Annual Percentage shall in no event exceed 23%.
The Director of Revenue shall certify the Annual
Percentage to the Comptroller on the last business day of

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the fiscal year immediately preceding the fiscal year for
which it is to be effective.
(3) The Comptroller shall order transferred and the
Treasurer shall transfer from the Tobacco Settlement
Recovery Fund to the Income Tax Refund Fund (i)
$35,000,000 in January, 2001, (ii) $35,000,000 in January,
2002, and (iii) $35,000,000 in January, 2003.
(d) Expenditures from Income Tax Refund Fund.
(1) Beginning January 1, 1989, money in the Income Tax
Refund Fund shall be expended exclusively for the purpose
of paying refunds resulting from overpayment of tax
liability under Section 201 of this Act and for making
transfers pursuant to this subsection (d), except that in
State fiscal years 2022 and 2023, moneys in the Income Tax
Refund Fund shall also be used to pay one-time rebate
payments as provided under Sections 208.5 and 212.1.
(2) The Director shall order payment of refunds
resulting from overpayment of tax liability under Section
201 of this Act from the Income Tax Refund Fund only to the
extent that amounts collected pursuant to Section 201 of
this Act and transfers pursuant to this subsection (d) and
item (3) of subsection (c) have been deposited and
retained in the Fund.
(3) As soon as possible after the end of each fiscal
year, the Director shall order transferred and the State
Treasurer and State Comptroller shall transfer from the

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Income Tax Refund Fund to the Personal Property Tax
Replacement Fund an amount, certified by the Director to
the Comptroller, equal to the excess of the amount
collected pursuant to subsections (c) and (d) of Section
201 of this Act deposited into the Income Tax Refund Fund
during the fiscal year over the amount of refunds
resulting from overpayment of tax liability under
subsections (c) and (d) of Section 201 of this Act paid
from the Income Tax Refund Fund during the fiscal year.
(4) As soon as possible after the end of each fiscal
year, the Director shall order transferred and the State
Treasurer and State Comptroller shall transfer from the
Personal Property Tax Replacement Fund to the Income Tax
Refund Fund an amount, certified by the Director to the
Comptroller, equal to the excess of the amount of refunds
resulting from overpayment of tax liability under
subsections (c) and (d) of Section 201 of this Act paid
from the Income Tax Refund Fund during the fiscal year
over the amount collected pursuant to subsections (c) and
(d) of Section 201 of this Act deposited into the Income
Tax Refund Fund during the fiscal year.
(4.5) As soon as possible after the end of fiscal year
1999 and of each fiscal year thereafter, the Director
shall order transferred and the State Treasurer and State
Comptroller shall transfer from the Income Tax Refund Fund
to the General Revenue Fund any surplus remaining in the

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Income Tax Refund Fund as of the end of such fiscal year;
excluding for fiscal years 2000, 2001, and 2002 amounts
attributable to transfers under item (3) of subsection (c)
less refunds resulting from the earned income tax credit,
and excluding for fiscal year 2022 amounts attributable to
transfers from the General Revenue Fund authorized by
Public Act 102-700 this amendatory Act of the 102nd
General Assembly.
(5) This Act shall constitute an irrevocable and
continuing appropriation from the Income Tax Refund Fund
for the purposes of (i) paying refunds upon the order of
the Director in accordance with the provisions of this
Section and (ii) paying one-time rebate payments under
Sections 208.5 and 212.1.
(e) Deposits into the Education Assistance Fund and the
Income Tax Surcharge Local Government Distributive Fund. On
July 1, 1991, and thereafter, of the amounts collected
pursuant to subsections (a) and (b) of Section 201 of this Act,
minus deposits into the Income Tax Refund Fund, the Department
shall deposit 7.3% into the Education Assistance Fund in the
State Treasury. Beginning July 1, 1991, and continuing through
January 31, 1993, of the amounts collected pursuant to
subsections (a) and (b) of Section 201 of the Illinois Income
Tax Act, minus deposits into the Income Tax Refund Fund, the
Department shall deposit 3.0% into the Income Tax Surcharge
Local Government Distributive Fund in the State Treasury.

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Beginning February 1, 1993 and continuing through June 30,
1993, of the amounts collected pursuant to subsections (a) and
(b) of Section 201 of the Illinois Income Tax Act, minus
deposits into the Income Tax Refund Fund, the Department shall
deposit 4.4% into the Income Tax Surcharge Local Government
Distributive Fund in the State Treasury. Beginning July 1,
1993, and continuing through June 30, 1994, of the amounts
collected under subsections (a) and (b) of Section 201 of this
Act, minus deposits into the Income Tax Refund Fund, the
Department shall deposit 1.475% into the Income Tax Surcharge
Local Government Distributive Fund in the State Treasury.
(f) Deposits into the Fund for the Advancement of
Education. Beginning February 1, 2015, the Department shall
deposit the following portions of the revenue realized from
the tax imposed upon individuals, trusts, and estates by
subsections (a) and (b) of Section 201 of this Act, minus
deposits into the Income Tax Refund Fund, into the Fund for the
Advancement of Education:
(1) beginning February 1, 2015, and prior to February
1, 2025, 1/30; and
(2) beginning February 1, 2025, 1/26.
If the rate of tax imposed by subsection (a) and (b) of
Section 201 is reduced pursuant to Section 201.5 of this Act,
the Department shall not make the deposits required by this
subsection (f) on or after the effective date of the
reduction.

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(g) Deposits into the Commitment to Human Services Fund.
Beginning February 1, 2015, the Department shall deposit the
following portions of the revenue realized from the tax
imposed upon individuals, trusts, and estates by subsections
(a) and (b) of Section 201 of this Act, minus deposits into the
Income Tax Refund Fund, into the Commitment to Human Services
Fund:
(1) beginning February 1, 2015, and prior to February
1, 2025, 1/30; and
(2) beginning February 1, 2025, 1/26.
If the rate of tax imposed by subsection (a) and (b) of
Section 201 is reduced pursuant to Section 201.5 of this Act,
the Department shall not make the deposits required by this
subsection (g) on or after the effective date of the
reduction.
(h) Deposits into the Tax Compliance and Administration
Fund. Beginning on the first day of the first calendar month to
occur on or after August 26, 2014 (the effective date of Public
Act 98-1098), each month the Department shall pay into the Tax
Compliance and Administration Fund, to be used, subject to
appropriation, to fund additional auditors and compliance
personnel at the Department, an amount equal to 1/12 of 5% of
the cash receipts collected during the preceding fiscal year
by the Audit Bureau of the Department from the tax imposed by
subsections (a), (b), (c), and (d) of Section 201 of this Act,
net of deposits into the Income Tax Refund Fund made from those

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cash receipts.
(Source: P.A. 101-8, see Section 99 for effective date;
101-10, eff. 6-5-19; 101-81, eff. 7-12-19; 101-636, eff.
6-10-20; 102-16, eff. 6-17-21; 102-558, eff. 8-20-21; 102-658,
eff. 8-27-21; 102-699, eff. 4-19-22; 102-700, eff. 4-19-22;
102-813, eff. 5-13-22; revised 8-2-22.)
Section 99. Effective date. This Act takes effect upon
becoming law.