The Illinois House Monday approved two measures providing tax relief to big and small businesses, as well as to low-income working families. The original proposal was split into two pieces, S.B. 397 and S.B. 400. S.B. 397 addresses tax concerns for Sears and the CME Group, plus benefits for other businesses. S.B. 400 increases the earned income tax credit and standard state tax exemption.
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House Minority Leader Tom Cross (R-Oswego) says lawmakers must take a balanced approach to the state’s tax policy from now on, because budgeting isn’t going to get easier. “I can’t imagine what it’s going to be like next year. Four billion dollars, and you’re worried about how you’re going to handle today? You ain’t seen nothing yet,” Cross said. The package will cost around $340 million, but no provisions will take effect until the next fiscal year – which means any extra revenue this year will go toward paying past due bills. S.B. 397 changes the way online transactions are taxes for the Chicago-based CME Group, it gives Sears $15 million for the next 10 years in EDGE tax credits while allowing the company to extend its economic development area, and it gives Champion Labs in Olney $350,000 a year for 10 years in EDGE credits. The bill also allows businesses to write off up to $100,000 in net operating losses, extends the research and development tax credit for five years, extends all sunsets that were set to expire after this fiscal year and provides tax credits for the state’s film and theater industry. Increases in the earned income tax credit and the standard exemption are now a part of S.B. 400. Under this bill, the earned income tax credit for low-income working families would be increased from the current 5 percent to 7.5 percent next fiscal year, then to 10 percent in Fiscal Year 2014. The standard exemption for all Illinois income taxpayers would be increased to $2,050 next fiscal year and after that be indexed to inflation. The Senate arrives in Springfield today to consider the deals.