IVCA Provides Updates for State Legislative Issues – 03/01/2023
Illinois Venture Capital Association Illinois Legislative Report
David Stricklin / Stricklin & Associates
Wednesday, March 1, 2023
VALLAS/JOHNSON RUNOFF
While not a state office there is no doubt the Mayor of Chicago is a significant figure in state politics. Chicago voters yesterday decisively moved on from Mayor Lori Lightfoot and set up a runoff between former city schools chief Paul Vallas and Chicago Teachers Union rep and Cook County Commissioner Brandon Johnson.
Johnson has the support of many of the legislature’s more “progressive” or “liberal” members. Vallas will look to consolidate voters who supported Mayor Lightfoot, Congressman Chuy Garcia, or other candidates on the ballot yesterday.
DEADLINES APPROACH / IVCA BILL STATUS
The Illinois General Assembly uses a series of deadlines to weed out bills that don’t have the support or otherwise are not able to proceed in the process. Next week is one of the first set of hurdles, when bills which were introduced in the House or Senate must be approved by the substantive committee to which they were sent. This will sideline numerous bills which were introduced mostly as “message” bills or to get a particular idea some attention.
The IVCA seeks to advance bills in the House and Senate to modernize the definition of an investment partnership. This issue has been discussed for several years now with the Illinois Department of Revenue and the Illinois General Assembly. IDOR contends the investments being made by PE funds cause them to be considered a “trade or business” and do not fall under the investment partnership definition enacted in 2004. Our bills, HB 2237 and SB 1880 update the definition and for tax purposes treats PE funds the same as other partnership entities.
The bills have been referred to the Revenue and Finance Committee in the House and the Revenue Committee in the Senate, and we will seek to have them approved by those committees when they meet next week.
GRADUATED TAX
State Senator Rob Martwick has introduced legislation SB 2105 for another look at the concept of a graduated income tax, which voters rejected in 2020. The bill has not been sent to a substantive committee and may qualify as one of those bills mentioned previously, which is introduced mostly to cause some discussion analysis.
The legislative leaders and the governor’s office have pointed to not only what the voters said but also to the various revenue and fiscal reports which show the state’s financial condition steadily improving, including having earned a credit upgrade from the ratings agencies.
There are policy makers who still believe the tax code is fundamentally unfair or burdensome on lower income taxpayers, so bills such as this get introduced and the conversation continues.