By Caitlin Rydinsky
After lawmakers were unable to agree on changes to the state’s business tax policies, some Illinois companies could lose a sales tax break set to expire this summer.
The Manufacturer’s Purchase Credit is a tax incentive that businesses can receive when they purchase equipment from companies within the state and use that equipment in Illinois. This benefit is set to expire in August. A rollback would impact about 500 businesses. According to expenditure reports from the Illinois comptroller’s office, the state spent almost $35,000 on the credit in fiscal year 2013.
Mark Denzler, president and chief operating officer of the Illinois Manufacturers' Association, said that the expiration could result in employee layoffs and increased prices for some goods.
Lawmakers on a special House committee have been evaluating business tax breaks in the state. But, so far, they have been unable to come to an agreement on what should be done. The spring session ended without the legislature sending a business tax plan to Gov. Pat Quinn’s desk.
Speaker Michael Madigan introduced legislation in the last days of session that would have extended the manufacturer’s purchase credit for six months. The plan also would have changed the high profile Economic and Development for a Growing Economy credit. The House passed the bill on the last day of spring session, but it was not brought up for a vote in the Senate. Democratic senators who sponsor the legislation said that they wanted to have more time to consider it.
“We are going to continue to work on things. The reaction is that this is something that needs to be reworked,” Madigan’s spokesman Steve Brown said.
Lawmakers are expected to revisit the issue during the fall veto session. If they cannot reach consensus, the state’s Research and Development Tax Credit could be the next casualty. It is set to expire next year.
Arlington Heights Republican Rep. David Harris, who is on the committee, said that he thinks legislators will vote on the manufacturing credit during the veto session. But he said that other issues, such as the EDGE credit, the Franchise Tax and the Research and Development Tax Credit, would likely fall on the next General Assembly to address.
Members of the next General Assembly are scheduled to be sworn into office in January.
Denzler is optimistic that legislators will restore the manufacturing credit in the veto session. But he said that their inability to reach agreement on many of the policies considered by the committee creates an unstable situation for businesses. “It just kind of continues the path of uncertainty and unpredictability.”