Illinois Tax Amnesty October 1, 2019 – November 15, 2019, Tax and Credit Changes
Illinois’ tax amnesty program will run from October 1, 2019, through November 15, 2019, and covers taxable periods after June 30, 2011, and prior to July 1, 2018. Interest and penalties can be abated for taxpayers who move into compliance.
Tax Amnesty Programs – S.B. 689
The budget bill enacts two Illinois tax amnesty programs. Illinois established an amnesty program for all taxes administered by the Illinois Department of Revenue. The amnesty program will apply to tax periods ending after June 30, 2011, and before July 1, 2018. Interest and penalties will be waived.
Taxpayers with delinquent franchise taxes or license fees due to the Illinois Secretary of State can benefit from the franchise tax amnesty program, which will commence October 1, 2019, and will run through November 15, 2019. The program applies to franchise taxes or license fees due for periods ending after March 15, 2008, and on or before June 30, 2019. Interest and penalties will be waived.
Phase-out of the franchise tax — SB 689
For domestic and foreign corporations qualified to do business in Illinois, the franchise tax phases out by capping the maximum amount of franchise tax due. The phaseout is as follows:
- On or after January 1, 2020 & prior to January 1, 2021 — the first $30 of liability is exempt
- On or after January 1, 2021 & prior to January 1, 2022 — the first $1,000 of liability is exempt
- On or after January 1, 2022 & prior to January 1, 2023 — the first $10,000 of liability is exempt
- On or after January 1, 2023 & prior to January 1, 2024 — the first $100,000 of liability is exempt
- On or after January 2, 2024 — no franchise tax is due
Income Tax Rate Changes – S.B. 687
Assuming that Illinois voters approve the constitutional amendment in November 2020, the corporate rate will increase again to 7.99 percent, effective for tax years beginning on or after January 1, 2021,
R&D credit extension – SB 1591
The research and development (R&D) credit has been extended for five years with expiration for years ending prior to January 1, 2027 (from January 1, 2022).
Marketplace Facilitator Nexus – S.B. 689
Beginning on January 1, 2020, a marketplace facilitator exceeding Illinois’ economic nexus thresholds will be considered a “retailer,” which will require the marketplace facilitator to collect sales tax on taxable transactions made through its marketplace, on behalf of retailers. Retailers currently collecting sales tax should confirm if a marketplace facilitator begins collecting tax on the retailer’s transactions. Economic nexus will be established for the marketplace facilitator if the marketplace facilitator and marketplace seller’s cumulative sales of tangible personal property into Illinois during the preceding 12-month period exceeded gross receipts of $100,000, or 200 separate transactions.
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