IVCA Provides Updates for State Legislative Issues – 11/12/2025
IVCA Illinois Legislative Report
David Stricklin, IVCA Legislative Liaison, Stricklin & Associates
STATE TREASURER TO RUN UNOPPOSED
The office of Illinois State Treasurer is the constitutional office with the most specific connection to the IVCA as the Treasurer is responsible for the Illinois Growth and Innovation Fund (which some old-timers may still call the Technology Development Account). After petition filing season concluded last week, Illinois State Treasurer Michael Frerichs is the only statewide official with no primary or general election opponent with filed petitions. There are still avenues for the Illinois Republican Party to get a candidate on the ballot but the lack of a filed candidate who is out campaigning and seems to want to do the job is noticeable.
BAILEY TO STAY IN THE RACE
2022 gubernatorial candidate Darren Bailey and his family have decided to continue their 2026 campaign for governor in the wake of losing his son, daughter in law and two grandchildren in a helicopter crash in late October.
Bailey to stay in governor’s race following family tragedy. Capitol News Illinois…
– Less than three weeks after a helicopter crash claimed the lives of his son, daughter-in-law and two grandchildren, Darren Bailey said late Monday that he will move forward with his campaign for governor.
– Bailey said he received encouragement from President Donald Trump to “keep fighting” and stay in the race. “That’s exactly what we’re going to do,” Bailey said in a nearly three-minute video recorded with his wife.
VETO SESSION INCLUDES TRANSIT PACKAGE
Illinois legislators sent to the governor’s desk a funding and reform package for mass transit in the Chicagoland area and for the rest of Illinois. It included several funding mechanisms which did not resort to ideas such as a “millionaires” tax or a delivery surcharge. The idea of a tax on carried interest or other suggestions from the Chicago Teachers Union and its allies were not included in the final package.
The Taxpayers Federation of Illinois summarizes expertly the revenue implications from the transit bill and other action taken during the Veto Session in October.
Here is a summary of the relevant changes in SB2111:
Sales Tax Rate Increase: The bill allows the RTA to increase the sales tax rate in Cook, DuPage, Kane, Lake, McHenry, and Will Counties by 0.25 percentage points. This increase would apply to general merchandise and low-rate items, such as groceries and medicine. The bill takes effect on June 1, 2026, and provides the RTA Board 60 days to increase the sales tax rate. It is unclear when the new sales tax rate would take effect. TFI will provide additional guidance as it becomes available. It is estimated that a 0.25% increase in the RTA sales tax rate would generate $478 million a year. This provision is on page 332 of the bill.
Sales Tax on Motor Fuel: Under current law, revenues from Illinois’ sales tax on motor fuel are deposited into the state’s Road Fund. This bill redirects those revenues, estimated to be worth $860 million, to public transit operations. Of these revenues, 85% would go to the RTA/NITA and 15% would go to downstate public transit systems.
Road Fund Interest: Up to $200 million of the interest earned on the cash balance in the state’s Road Fund would go to public transit systems for capital projects. Of these revenues, 90% would go to the RTA/NITA and 10% would go to downstate public transit systems.
Toll Increase: There will be toll increases of 45-cents for passenger vehicles and 30% on commercial vehicles operating on the Illinois Tollway beginning in 2027. Beginning in 2029, these tolls would increase each year by CPI, but not more than 4%. These funds would be used by the Tollway for yet-to-be announced capital projects. The toll increases are estimated to generate $1 billion a year.
Skinny Omnibus Tax Bill
A revenue omnibus bill (SB1911) passed both chambers with tax changes. The bill has an immediate effective date; however, these tax changes apply for the 2026 tax year:
GILTI/NCTI: In June, Illinois law changed its tax law so that corporations may only deduct 50% of their foreign income known as Global Intangible Low-Taxed Income (GILTI) that they receive, or are deemed to receive, from their foreign subsidiaries. Before the change, corporations were allowed to deduct 100% of this income. The federal One Big Beautiful Bill Act (OBBBA) replaces GILTI in 2026 with a broader term called “net CFC tested income” (NCTI). SB1911 updates Illinois law to match this federal change by only allowing corporations a 50% deduction for NCTI. It does not provide factor representation for this income.
Bonus Depreciation: OBBBA created section 168(n), which allows companies to immediately deduct the full cost of qualified real property used in manufacturing, instead of depreciating it over time. SB1911 decouples Illinois from this federal change starting with the 2026 tax year, meaning Illinois taxpayers will have to depreciate the asset over its entire useful life.
Pass-Through Entity Tax: SB1911 makes the optional pass-through entity tax permanent. The bill does not change how the tax is calculated.
Excess Business Losses: SB1911 also makes a deduction for excess losses for trusts and estates permanent as OBBB made the excess loss limitation permanent.
STAR Bonds: SB1911 also creates the Statewide Innovation Development and Economy Act to allow additional STAR Bond districts to be created in Illinois. Like TIF districts, STAR bond districts use tax growth to finance development, but they rely on increases in sales tax revenue rather than property tax revenues.
Film Tax Credit: SB2111 also extends the Film Tax Credit through 2039 and makes other changes to the program.
Public Transit Reform
The Illinois General Assembly passed SB2111, which replaces the RTA with the Northern Illinois Transit Authority (NITA) and provides significant funds for public transit. There are two revenue sources the public would directly experience: a higher sales tax in northeastern Illinois and increased tolls.
An amendment was introduced earlier in the week which would have imposed a statewide amusement tax of 7%, expanded the individual income tax to unrealized gains for individuals with more than $1 billion in assets, and allowed speed cameras in the RTA region. None of these proposals made it into the final bill.