NEWSFLASH! Illinois Corporations are Getting a Tax Break: The Illinois Franchise Tax Repeal
By: Savannah R. Rountree and John W. Campbell, Jr., Esquire
Good news for Illinois corporations! Effective as of January 1, 2020, Illinois is starting to phase out its franchise tax. Illinois corporations have previously paid this tax based upon their paid-in capital or one of the permissible alternative “allocation factors.” This is a victory for small business owners and entrepreneurs that find the additional fee as a prohibitive cost to do business in Illinois. As such, Illinois hopes to inspire business growth and retention.
The repeal process will take place over the next five years, as increasing amounts of franchise tax liability will become exempt. For 2020 filings, the first $30 of franchise tax liability is exempt. For 2021 filings, the exemption increases to the first $1,000. For 2022 filings, the exemption increases to the first $10,000. For 2023 filings, it rises to the first $100,000. Finally, for 2024 filings and beyond, Illinois franchise tax will be fully exempt and repealed.
If you have any questions about this tax repeal or any other corporate filings, please do not hesitate to contact either John W. Campbell, Jr., Esquire at jcampbell@satclaw.com or Audrey E. Gamble, Esquire at agamble@satclaw.com.
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