Government Affairs Roundup
“Your Timely Roundup of Local, State, and Federal Updates”
The “lame duck” session has ended on the state level and nationally, there is now a Speaker of the House. More below on those items along with some additional information for your review.
We have an opportunity to meet our new Congressional District representative as we welcome Congresswoman Lauren Underwood in for a member luncheon on January 19th. Information has been shared and will come out again, but in the meantime here is the link to the event registration page: https://jolietchamber.chambermaster.com/events/details/2023-member-lunch-january-19-meet-lauren-underwood-6554
*Government Affairs Roundup brought to you by CITGO & Silver Cross Hospital*
Governor Sworn in For Second Term & Lays Out Vision
Hours after Governor JB Pritzker vowed in his inauguration speech to make Illinois the ninth state to ban assault weapons, the Illinois Senate helped make his wish a reality. It approved an assault-ban measure that is expected to gain final House approval today, giving the governor a win just as he starts his second term.
Along with cleaning up guns, Pritzker laid out a vision for his second term that includes making abortion a constitutional right in Illinois, making preschool available to every family and making public colleges free for children in working-class families.
Governor Signs BIMP Act & Other Lame Duck Legislation
With a few hours to spare, Governor Pritzker announced that he signed Senate Bill 1720 which amends the 2023 Budget Implementation Act and provides salary increases for members of the Illinois legislative and executive branches. For the measure to go into effect, the governor had to sign the bill by noon Monday since pay raises for state officeholders during a term of office are barred by the state constitution. Before 10 a.m., Pritzker announced that he had signed SB 1720.
The raises for legislators begin with the start of the 103rd Illinois General Assembly on Wednesday and on Jan. 9 for statewide officeholders. State senators passed the measure Sunday evening and planned to meet again this afternoon. The measure passed in the Illinois House of Representatives on Friday in a 63-35 vote.
SB 1720 narrowly passed with multiple Democrats voting “no” in the 30-21 tally. There are several provisions the bill also includes in addition to the pay raises:
- $850 million to state’s rainy-day fund
- $400 million transfer from the state’s General Fund to the Large Business Attraction Fund
- $72 million to the Disaster Response and Recovery Fund
Comptroller Susana Mendoza noted in a statement that the bill ensures 7.5% of the state’s annual general funds go toward the rainy-day fund, an increase from 5%. With the governor’s signature, senators and representatives will see their pay increase by approximately 18% – up to $85,000 per year. Salaries for the lieutenant governor, comptroller, and treasurer will grow to $160,900; and the secretary of state and attorney general will receive $183,300 annually.
The latest action included a ban on the sale and manufacture of high-powered weapons, which passed the House and was signed by the governor Tuesday night, along with an expansion of abortion and gender-affirming health care rights in Illinois.
But that wasn’t all. The governor also signed an accompanying appropriations bill allowing hundreds of millions of dollars more in state spending – House Bill 969 – which had passed both houses.
In all, the appropriations bill authorizes another $512 million in general revenue fund spending. The added spending was largely made possible by better-than-expected tax revenues which have continued to surpass state agencies’ budget estimates throughout the fiscal year.
The new spending authority includes $400 million for a “closing fund” which Gov. JB Pritzker has touted as a necessary tool for attracting new businesses to the state. Legislation enabling that program and making changes to other recently-passed tax incentive programs, House Bill 2951, also passed Tuesday.
Another measure, House Bill 4412, passed both chambers, creating statewide siting standards for wind and solar farms. It met staunch opposition from rural lawmakers who were reluctant to cede local control at the county level for approving wind and solar projects. It would also authorize a $200 million rebate fund for some downstate energy consumers, although that money would have to be appropriated at a later date.
And yet another, Senate Bill 208, provides that workers in Illinois are entitled to a minimum of 40 hours of paid leave during a 12-month period. That works out to one hour of paid leave for every 40 hours worked.
McCarthy wins speaker election, finally
Kevin McCarthy officially secured the speaker’s gavel early Saturday, elected on the 15th ballot with 216 votes, after four days of unsuccessful House votes and some last-minute drama.
McCarthy won over most of his House Republican critics with a series of commitments to rein in spending — opening up the appropriations process in the House and using the debt ceiling as leverage — and to hold votes on conservative priorities, like a balanced budget, congressional term limits and a border security plan Texas Republicans crafted.
But with a slim 222-seat majority, McCarthy may have just as much trouble finding the votes for all the things he committed to do as he did in trying to be elected speaker. His critics and allies both acknowledge that no individual priority is guaranteed to pass, but they feel they put the tools in place to make sure all members, not leadership, will get to make those decisions.
McCarthy also agreed to ensure the ultra-conservative House Freedom Caucus, which most of his flipped opponents are members of, has proportional representation on committees compared to other ideological groups in the Republican Conference.
And perhaps most importantly, the California Republican agreed to restore a longstanding rule on the procedure for ousting a sitting speaker to allow one member to force a recall vote at any time. His detractors said this concession was needed to ensure accountability, as they didn’t inherently trust McCarthy to make the changes he promised without a backstop.
Sports bettors in Illinois post big numbers in 2022
Since its inception in March 2020, legalized sports betting has exploded in Illinois. Sports bettors have made the state one of the top gambling markets in the country. October marked the first time Illinois’ sports betting handle surpassed the $1 billion dollar mark in a single month, becoming just the fourth state in U.S. history to reach that threshold, joining New York, New Jersey and Nevada to reach that plateau.
Three major sports leagues were in play, the NFL, the NBA and the NHL, giving Illinois sports bettors plenty to choose from. Dave Briggs with PlayIllinois.com said he doesn’t see a slowdown anytime soon. “I wouldn’t expect so, and then you get into the NFL playoffs, then you get into the Super Bowl, then into March Madness, so I don’t know if it will stay at a billion dollars a month for every month, but certainly it’s going to be right up there,” Briggs said.
Since the launch of sports betting in March 2020, Illinois sports gamblers have bet in the neighborhood of $18 billion. The state’s 12 sports books have netted about $1.5 billion, and the total tax revenue for the state has surpassed $200 million. All tax funds go into a Sports Wagering Fund. On the 25th of each month, any money in that fund in excess of the anticipated monthly expenditures from the fund through the next month are transferred to the Capital Projects Fund.
In March of this year, a law was enacted that allowed Illinois residents to sign-up online for sports books, rather than having to do so in-person at one of the state’s land-based casinos. Since the beginning of legal sports betting, over $160 billion has been bet in the United States. Currently, 26 states allow sports betting.
IRS announces delay for implementation of $600 reporting threshold for third-party payment platforms’ Forms 1099K
The Internal Revenue Service today announced a delay in reporting thresholds for third-party settlement organizations set to take effect for the upcoming tax filing season.
As a result of this delay, third-party settlement organizations will not be required to report
tax year 2022 transactions on a Form 1099K to the IRS or the payee for the lower, $600
threshold amount enacted as part of the American Rescue Plan of 2021.
As part of this, the IRS released guidance today outlining that calendar year 2022 will be
a transition period for implementation of the lowered threshold reporting for third-party
settlement organizations (TPSOs) including Venmo, PayPal and CashApp that would
have generated Form 1099Ks for taxpayers.
“The IRS and Treasury heard a number of concerns regarding the timeline of implementation of
these changes under the American Rescue Plan,” said Acting IRS Commissioner Doug O’Donnell. “To help smooth the transition and ensure clarity for taxpayers, tax professionals and
industry, the IRS will delay implementation of the 1099-K changes. The additional time will help
reduce confusion during the upcoming 2023 tax filing season and provide more time for taxpayers to prepare and understand the new reporting requirements.”
The American Rescue Plan of 2021 changed the reporting threshold for TPSOs. The
new threshold for business transactions is $600 per year; changed from the previous threshold of more than 200 transactions per year, exceeding an aggregate amount of $20,000. The law is not intended to track personal transactions such as sharing the cost of a car ride or meal, birthday or holiday gifts, or paying a family member or another for a household bill.
Under the law, beginning Jan. 1, 2023, a TPSO is required to report third-party network transactions paid in 2022 with any participating payee that exceed a minimum threshold of $600 in aggregate payments, regardless of the number of transactions. TPSOs report these transactions by providing individual payee’s an IRS Form 1099K, Payment Card and Third-Party Network Transactions.
The transition period described delays the reporting of transactions in excess of
$600 to transactions that occur after calendar year 2022. The transition period is intended to
facilitate an orderly transition for TPSO tax compliance, as well as individual payee compliance
with income tax reporting. A participating payee, in the case of a third-party network transaction,
is any person who accepts payment from a third-party settlement organization for a business
The change under the law is hugely important because tax compliance is higher when amounts
are subject to information reporting, like the Form 1099K. However, the IRS noted it must be
managed carefully to help ensure that 1099Ks are only issued to taxpayers who should receive them. In addition, it’s important that taxpayers understand what to do as a result of this
reporting, and tax preparers and software providers have the information they need to assist
Additional details on the delay will be available in the near future along with additional
information to help taxpayers and the industry. For taxpayers who may have already received a
1099-K as a result of the statutory changes, the IRS is working rapidly to provide instructions
and clarity so that taxpayers understand what to do.
The IRS also noted that the existing 1099-K reporting threshold of $20,000 in payments from
over 200 transactions will remain in effect.
Executive Vice President
Joliet Region Chamber of Commerce & Industry