Community Bankers Association of Illinois

House Takes up Banker Tax Provisions

On Friday, November 2, the Illinois House of Representatives passed legislation which would repeal the onerous tax provisions contained in Senate Bill 1544 which was enacted earlier this year. The pending legislation, Senate Bill 783, is a massive "Budget Implementation" bill, known as a "BIMP". The BIMP bill is considered the substantive "engine" that drives the State budget. The bill contains provisions which would restore the exemption from State taxation for interest earned on tax exempt bonds or securities. CBAI has fought for months to repeal the harmful provisions contained in Senate Bill 1544, the so-called "corporate tax loophole" bill passed earlier in the year. Senate Bill 1544 required banks to reduce their State tax exemption on interest income by netting out all expenses relating to the carrying of such investments, effectively eliminating the tax exempt status of those instruments. Although the ultimate fate of Senate Bill 783 is uncertain, its passage by the House today represents long-awaited and hard-fought movement on the issue. The Senate is expected to take up the matter later in the day, but it is unknown at this time whether a vote will take place this week. We will keep you posted.

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