Government Affairs Roundup
“Your Timely Roundup of Local, State, and Federal Updates”
Chamber members:
The back-and-forth saga continues for small businesses regarding Beneficial Ownership Information reporting. See below that the most recent ruling now gives those that have not yet filed a new deadline to do so. Read on for additional information as a follow-up to the Governor’s budget address last week.
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Beneficial Ownership Information Update: Federal Court Reinstates Filing Requirement
A federal judge reversed course for over 32 million small businesses nationwide, ruling to reinstate the requirement to report their BOI with FinCEN. We’ve voiced our opinion against the unnecessary and intrusive reporting requirements forcing small businesses to share private information to a new database available to government agencies and foreign governments without a subpoena or warrant.
The CTA took effect on January 1, 2024, requiring over 32 million U.S. small businesses to file BOI reports with FinCEN. There have been advocacy efforts against this regulation since its inception that were able to stall the reporting deadline through a lawsuit. The latest ruling reinstated the reporting requirements. As a result of this decision and the March 21 deadline, small businesses may wish to file their BOI reports.
Here is a resource page from NFIB: https://www.nfib.com/protect-small-business-privacy/
Illinois Chamber Responds to Governor Pritzker’s State of the State/Budget Address
Governor JB Pritzker presented an optimistic outlook for the Illinois economy during his budget address; however, several fiscal concerns remain unaddressed. The Illinois Chamber of Commerce supports commitments to long-term structural fiscal stability, a strong education system, and forward-thinking investments that promote business growth and new investments in the Land of Lincoln – all with no new taxes.
We encourage Governor Pritzker and the General Assembly to continue to address the economic and regulatory obstacles that impede job growth in Illinois. Significant budget pressures, including the impending transit cliff, were not addressed in today’s speech and raised concerns for Illinois businesses and taxpayers. For Illinois to take its rightful place as a national economic leader, new policies need to be enacted that support rather than burden job creators.
While we appreciate the Governor’s efforts to attract new business to Illinois through initiatives like the shovel-ready program, the Chamber will continue to advocate for both lowering the mandated cost of doing business while furthering investment in existing small and medium-sized businesses to help them grow and create jobs for families in Illinois.
The Illinois Chamber stands ready to work with legislators on both sides of the aisle in the General Assembly and the Governor’s Office to enact pro-Illinois and pro-growth solutions that will not only help attract new businesses but help our small, medium, and large employers continue to thrive.
Illinois to Sell $725 Million in Bonds for Capital Projects
Illinois is preparing to issue $725 million in sales tax-backed bonds to support its long-term capital projects, according to a recent filing. The bonds, known as Build Illinois Bonds, serve as a key funding source for infrastructure investments, including roads, bridges, and technology upgrades. The state, which holds the lowest credit rating among its peers, announced the potential sale through a voluntary notice on Friday.
This bond issuance aligns with ongoing budget negotiations between Governor JB Pritzker and state lawmakers. Last week, Pritzker proposed a nearly $55 billion spending plan for fiscal year 2026, which includes a $500 million allocation to redevelop unused properties into business and residential sites.
Proceeds from the bond sale will be directed towards capital expenditure and related issuance costs. According to the filing, the preliminary official statement for the sale is expected to be distributed this week, with a competitive bidding process scheduled for the week of March 10.
However, Illinois retains the flexibility to adjust or withdraw the offering based on market conditions and other factors.
Illinois Weighs Repeal of Burdensome Business Franchise Tax
Illinois lawmakers are considering a proposal to eliminate the state’s franchise tax, a levy that has long been criticized as complex, burdensome, and minimally beneficial to state revenues. If passed, House Bill 2846 would repeal the tax, relieving businesses of a cumbersome calculation process that most ultimately owe nothing on.
The franchise tax, which applies to businesses of all sizes, not just franchises—generated roughly $200 million in the last fiscal year. However, in a state planning to spend $55.2 billion in the upcoming fiscal year, its financial impact is minimal. Despite this, hundreds of thousands of businesses are required to compute their tax liability through an intricate and often expensive process based on their “paid-in capital,” even when they owe nothing.
State Rep. Jeff Keicher, R-Sycamore, who sponsored the repeal bill, argues that removing the tax would simplify compliance and reduce costs for business owners. “Illinois already puts more hurdles than most other states in front of job creators that want to explore the American Dream,” Keicher said.
The franchise tax was originally set to be phased out under a 2019 law, with full elimination planned for 2024. However, the phase-out was abruptly halted in 2021 during the COVID-19 pandemic, leaving businesses still grappling with its complexities.
Business owners in Illinois already face significant tax burdens, including the nation’s second-highest corporate income tax rate and second-highest property tax rate. Many argue that the franchise tax only adds another unnecessary layer of costs and administrative hassle.
Critics of the tax contend that it contributes to an unwelcoming business climate, prompting companies to relocate. In 2021 alone, Illinois lost 208 single-establishment firms to other states, according to the U.S. Bureau of Labor Statistics. More recently, the New York Stock Exchange announced the closure of its Chicago office after 143 years, moving its operations to Dallas.
Keicher believes repealing the tax is a necessary step to make Illinois more business friendly. “This is an outdated tax on businesses that are already contributing to our economy, and we need to eliminate it to streamline Illinois,” he said.
Though the franchise tax represents a relatively small financial obligation compared to other costs, its repeal would remove an unnecessary burden—offering businesses one less obstacle in an already challenging economic environment.
Illinois Realtors Share Legislative Agenda to Tackle Housing Shortage
With housing costs soaring in recent years, Illinois Realtors has introduced a legislative package aimed at increasing housing supply and affordability. The five proposed bills, developed in collaboration with state lawmakers, seek to remove barriers to building, buying, and renting homes across the state.
“The biggest pain point for consumers right now is housing affordability and housing options,” said Tommy Choi, president of Illinois Realtors and co-owner of Keller Williams OneChicago brokerage. “It’s super important to focus on solutions that can help.”
The five-bill package includes measures to:
- Allow multi-unit housing on lots currently restricted to single-family homes.
- Remove bans on accessory dwelling units (ADUs).
- Limit impact fees that homebuilders pay to municipalities.
- Establish tax-deductible savings accounts to help first-time homebuyers.
- Prohibit “crime-free housing” ordinances, which critics argue lead to unfair evictions.
These reforms aim to expand housing options, stabilize renters, and alleviate affordability pressures, said Choi.
The legislative package is the most comprehensive effort from Illinois Realtors in at least seven years, reflecting a sense of urgency as the state faces a “housing supply shortage that has reached the crisis level,” according to Jeff Baker, CEO of the Springfield-based organization, which represents about 50,000 real estate professionals.
Baker played a role in the governor’s housing advisory commission, which informed Gov. JB Pritzker’s recent call for statewide housing solutions. In December, Pritzker emphasized the importance of increasing housing availability:
“If we are going to build on this state’s record of growth and prosperity, lower costs for Illinois’ working families, and be a state that everyone can call home, we must build more housing in every Illinois community from Cairo to Chicago,” he said.
The housing crisis is also a national issue, contributing to persistent inflation. Housing costs make up more than a third of the Consumer Price Index, meaning high housing prices continue to drive inflation upward.
Not all aspects of the package are guaranteed to pass. Proposals to change zoning laws and allow multi-unit housing in traditionally single-family neighborhoods may face pushback from homeowners. However, Baker believes the group’s solutions are designed to be palatable to legislators by balancing growth with community concerns.
Beyond the legislative package, additional solutions are being explored. The National Association of Realtors is urging Congress to increase the capital gains tax exemption, which could encourage long-time homeowners to sell and increase available housing inventory.
Ben Wolfenstein, state legislative lead for Abundant Housing Illinois, emphasized that increasing housing supply is key to lowering costs. “Increased supply affects housing costs, and it especially affects housing costs at the lower end of the market,” he said. Rising prices disproportionately impact lower-income residents, leading to housing instability and even homelessness.
For middle-class families, the housing shortage is also a major challenge. Choi noted that many young professionals looking to upgrade from a condo to a single-family home in Chicago are finding it financially impossible, leading some to move to more affordable Midwestern cities.
Keeping those residents in Illinois is crucial for economic growth, Choi argued. Expanding accessory dwelling unit policies, for instance, could help by allowing homeowners to add rental units that generate income and offset mortgage costs.
While challenges remain, Baker is optimistic about the momentum behind these proposals. “When we walk into a legislator’s office, nobody is arguing that there’s no housing crisis,” he said. “The awareness of this problem has never been as high as it is now, and the increased cost of housing touches everybody statewide.”
Stay well,
Mike Paone
Executive Vice President
Joliet Region Chamber of Commerce & Industry
[email protected]
815.727.5371 main
815.727.5373 direct