These measures contain tax relief for both working families and small businesses

SPRINGFIELD, IL– State Senator William Delgado (D–Chicago) voted with his colleagues today on two measures that will provide tax relief to middle class families while also providing incentives to keep businesses in Illinois. 

"I support this package because it will ensure that every Illinois resident who works and files a tax return will see tax relief," stated Senator Delgado, a member of the Senate Appropriations I Committee.  "In this legislation, the Earned Income Tax Credit will go to seven and a half percent in 2012, it had not been increased since it was created in 2000.  In addition, Illinois’ standard personal exemption, which has not been increased since 2001, will be raised in 2012 and from now on be tied to the Consumer Price Index to ensure it keeps up with inflation." 

Senate Bill 397 will provide tax relief for businesses through the reinstatement of the net operating loss, which would allow companies that lose money in one or more years to carry that loss forward for the payment of future income taxes.   This is especially helpful to many start-up companies that typically lose money in their first five years of operation. 

Also, included in this legislation is a change in how federally regulated exchanges are taxed by the state.  Currently, federally regulated exchanges, such as the Chicago Mercantile Exchange (CME), pay state tax on every electronic transaction that occurs, whether the transaction occurred in Illinois or another state.  Under the modernized approach, businesses like CME and Chicago Board Options Exchange will pay corporate tax on 27.54 percent of their income, the amount of activity originating in Illinois.  The correction will be phased in over two years.

Senate Bill 400 encompasses tax relief for working families through raising earned income tax credit and increasing the personal exemption to keep up with inflation.

"The situation that has occurred with the Chicago Mercantile Exchange has demonstrated the need for comprehensive reforms," Senator Delgado stated.  "The current tax system is out of date and does not take into consideration the types of businesses transactions that occur in this day and age.  These measures are restructuring  the tax burden of corporations while also helping the people of Illinois." 

"The Senate previously passed House Bill 1883, however the measure failed to pass the Illinois House of Representatives," stated Senator Delgado.  "We continued to work on the issue and this new package has passed both the House and the Senate and now goes to the Governor for his consideration."