Iowa passes tax reforms, Illinois Senate to reconvene Monday
Iowa
Governor Kim Reynolds signed House File 2317, the agreed-upon tax reform compromise between the House, Senate and Governor on Tuesday. The bill:
- Creates a flat 3.9% personal income tax
- Eliminates taxes on retirement income
- Removes capital gains taxes from ESOP holdings
- Provides tax relief for retired farmers
- Reforms the corporate income tax by gradually lowering the rate to 5.5%
- Reduces the Research Activities Tax Credit refundability to 50% over 5 years
This week, Gov. Reynolds was chosen to deliver the GOP response to President Biden’s State of the Union Address on March 1.
With the tax reform bill signed, the legislature is likely to adjourn earlier than planned this year as members of both chambers prepare to begin campaigning for re-election following redistricting. The filing period for candidates for statewide and legislative races opens Feb. 28 and closes March 18.
Next week, there will be more floor debate and some committee and possible subcommittee work as legislators prepare for the second funnel deadline. Bills must pass through their originating chamber and committee in the opposite chamber to remain eligible past the second funnel.
Illinois
Feb. 25 was the deadline for the third reading for Senate bills. The Senate adjourned Feb. 25 and will return on March 8.
The House will return on March 1 for four days of scheduled action. March 4 is the deadline for all third readings in the House.
A third reading allows for discussion and a vote on the bill, including all amendments, by the full chamber.
The House Revenue Committee held a subject matter hearing on the preliminarily FY 2023 Revenue Forecasts. An Illinois Department of Revenue and the Commission on Government Forecasting and Accountability report showed more than $4 billion in increased revenue than expected when the FY22 budget was enacted in May 2021.
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