With a vote looming on an Illinois bill (HB 689) that would impose a graduated income tax with a top rate of 11.25 percent on pass-through businesses (previous coverage here and here), the Illinois Department of Revenue...
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- Illinois House Caves on Incentives for Sears and Chicago ...
Illinois House Caves on Incentives for Sears and Chicago Mercantile Exchange
The pattern is pretty consistent. A state raises their taxes, big companies with mobile capital realize they could save a ton of money by locating elsewhere; they lobby legislatures and make big public statements that they must leave unless they are offered targeted incentives to stay. The company is often a historic state landmark. With a sympathetic public that is concerned about jobs, the incentives are all but guaranteed.
In Illinois, which steeply raised its individual and corporate taxes in January, you could not get two more sympathetic companies: Sears and the Chicago Mercantile Exchange are threatening to leave the state unless they get targeted tax incentives. It looks like they will get their way.
The Illinois House yesterday passed SB 397, which would give tax credits intended to keep Sears Holdings Corp. and CME in-state. According to TaxAnalysts (subscription required), the bill, which was approved 81-28, would also create an independent tax tribunal to hear disputes between taxpayers and the state's Department of Revenue. The tax carve-outs amount to $263 million in FY 2013 and $325 million in FY 2014.
More on Illinois here.
Follow Scott Drenkard on Twitter @ScottDrenkard.
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