A new bill introduced in the Illinois State Senate seeks to provide much-needed property tax relief to qualified small businesses across the state. Senate Bill 146, sponsored by Senator William Cunningham (D – 18), Javier L. Cervantes (D-1), and Adriane Johnson (D-30), proposes a tax credit for eligible small businesses, potentially easing their financial burdens and fostering economic growth.
The bill, introduced on January 17, 2025, amends the Illinois Income Tax Act to create a “Small Business Property Tax Relief Credit.” Here’s a breakdown of the key provisions:
- Credit Amount: Qualified small businesses could receive a credit equal to the lesser of 10% of their paid property taxes on eligible real property or $1,500.
- Eligibility: To qualify, a business must:
- Be a sole proprietorship, partnership, corporation, joint venture, association, or cooperative.
- Conduct business in Illinois.
- Employ fewer than 50 employees in Illinois during the taxable year.
- Be current with all state and federal tax obligations by the end of the taxable year.
- Eligible Real Property: The credit applies to non-residential property in Illinois where the business operates, and the business has an ownership interest (legal, equitable, or as a lessee) and is liable for property taxes.
- Credit Application: The credit can reduce a taxpayer’s liability to zero, and any excess credit can be carried forward for up to five taxable years. The credit will first apply to the earliest year with tax liability.
- Pass-Through Entities: If the taxpayer is a partnership or Subchapter S corporation, the credit is allowed to pass through to the partners and shareholders.
- Effective Dates: The credit applies to taxable years ending on or after December 31, 2025, and before January 1, 2030.
