Bill Text: IL HB5490 | 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, 2025. Provides that all amounts remaining in the Corporate Franchise Tax Refund Fund shall be transferred to the General Revenue Fund no later than December 31, 2025. Repeals provisions concerning franchise taxes payable by domestic and foreign corporations on January 1, 2026. Effective immediately.

Spectrum: Partisan Bill (Democrat 1-0)

Status: (Introduced) 2024-02-09 - Referred to Rules Committee [HB5490 Detail]

Download: Illinois-2023-HB5490-Introduced.html

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103RD GENERAL ASSEMBLY State of Illinois 2023 and 2024 HB5490 Introduced , by Rep. Kimberly Du Buclet 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 5/15.97 from Ch. 32, par. 15.97
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, 2025. Provides that all amounts remaining in the Corporate Franchise Tax Refund Fund shall be transferred to the General Revenue Fund no later than December 31, 2025. Repeals provisions concerning franchise taxes payable by domestic and foreign corporations on January 1, 2026. Effective immediately.
LRB103 37755 SPS 67883 b
A BILL FOR
HB5490 LRB103 37755 SPS 67883 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 Sections 15.35, 15.65, and 15.97 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

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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

HB5490 - 3 - LRB103 37755 SPS 67883 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. 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, 2025. There shall be no refunds or proration of
franchise tax for any taxes due and payable on or after January
1, 2025 on the basis that a portion of the corporation's
taxable year extends beyond January 1, 2025.
This Section is repealed on January 1, 2026.
(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

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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

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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 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

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prior to January 1, 2025, the first $5,000 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, 2025. There shall be no refunds or proration of
franchise tax for any taxes due and payable on or after January
1, 2025 on the basis that a portion of the corporation's
taxable year extends beyond January 1, 2025.
This Section is repealed on January 1, 2026.
(Source: P.A. 102-282, eff. 1-1-22; 102-558, eff. 8-20-21;
103-8, eff. 6-7-23.)
(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
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

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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
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

HB5490 - 8 - LRB103 37755 SPS 67883 b
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 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, 2025, 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,
2025. There shall be no refunds or proration of franchise tax
for any taxes due and payable on or after January 1, 2025 on
the basis that a portion of the corporation's taxable year
extends beyond January 1, 2025.
This Section is repealed on January 1, 2026.
(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.)

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(805 ILCS 5/15.97) (from Ch. 32, par. 15.97)
Sec. 15.97. Corporate Franchise Tax Refund Fund.
(a) Beginning July 1, 1993, a percentage of the amounts
collected under Sections 15.35, 15.45, 15.65, and 15.75 of
this Act shall be deposited into the Corporate Franchise Tax
Refund Fund, a special Fund hereby created in the State
treasury. From July 1, 1993, until December 31, 1994, there
shall be deposited into the Fund 3% of the amounts received
under those Sections. Beginning January 1, 1995, and for each
fiscal year beginning thereafter, 2% of the amounts collected
under those Sections during the preceding fiscal year shall be
deposited into the Fund.
(b) Beginning July 1, 1993, moneys in the Fund shall be
expended exclusively for the purpose of paying refunds payable
because of overpayment of franchise taxes, penalties, or
interest under Sections 13.70, 15.35, 15.45, 15.65, 15.75, and
16.05 of this Act and making transfers authorized under this
Section. Refunds in accordance with the provisions of
subsections (f) and (g) of Section 1.15 and Section 1.17 of
this Act may be made from the Fund only to the extent that
amounts collected under Sections 15.35, 15.45, 15.65, and
15.75 of this Act have been deposited in the Fund and remain
available. On or before August 31 of each year, the balance in
the Fund in excess of $100,000 shall be transferred to the
General Revenue Fund. Notwithstanding the provisions of this
subsection, for the period commencing on or after July 1,

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2022, amounts in the fund shall not be transferred to the
General Revenue Fund and shall be used to pay refunds in
accordance with the provisions of this Act. Within a
reasonable time after December 31, 2024, but no later than
December 31, 2025, the Secretary of State shall direct and the
Comptroller shall order transferred to the General Revenue
Fund all amounts remaining in the fund.
(c) This Act shall constitute an irrevocable and
continuing appropriation from the Corporate Franchise Tax
Refund Fund for the purpose of paying refunds upon the order of
the Secretary of State in accordance with the provisions of
this Section.
(d) This Section is repealed on January 1, 2026.
(Source: P.A. 102-282, eff. 1-1-22; 103-8, eff. 6-7-23.)