HB2846 amends the Illinois Business Corporation Act of 1983 to end the state’s corporate franchise tax for domestic and foreign corporations. The bill provides that no franchise tax payment would be required for amounts due and payable on or after January 1, 2026, and it repeals the franchise tax provisions effective January 1, 2027. It also updates related statute-of-limitations language to align with the tax’s phaseout and clarifies that there will be no refunds or proration for tax periods that straddle the 2026 cutoff.
The bill further directs that money remaining in the Corporate Franchise Tax Refund Fund be transferred to the General Revenue Fund no later than December 31, 2026. In practical terms, this would eliminate future franchise tax liability for corporations in Illinois, while also closing out the dedicated refund fund and moving any remaining balance into the state’s general operating fund. The measure is effective immediately, though the tax repeal itself is tied to the 2026 and 2027 dates specified in the bill.
Impact
HB2846 would substantially change Illinois corporate tax law by removing the franchise tax obligations imposed on domestic and foreign corporations under Sections 15.35 and 15.65 of the Business Corporation Act. It also amends Section 15.90 to reflect that, beginning January 1, 2026, corporations are no longer subject to franchise tax collection, penalty, or interest provisions beyond the remaining limitations framework, and it revises Section 15.97 to wind down the Corporate Franchise Tax Refund Fund and transfer its remaining balance to the General Revenue Fund. The bill would directly affect corporations doing business in Illinois and the Secretary of State’s administration of franchise tax filings and refunds.
Sentiment
Based on the bill text and the absence of recorded committee testimony or votes in the provided materials, the overall sentiment appears to be pro-repeal and business-friendly. The caption and substance indicate an intent to eliminate a long-standing corporate tax rather than modify it incrementally. Because no debate transcript or vote history is included, there is no documented opposition or support to characterize beyond the bill’s clear policy direction.
Contention
The main point of contention likely concerns state revenue loss versus business tax relief. Supporters would view the repeal as reducing costs for domestic and foreign corporations and simplifying compliance, while critics would likely focus on the loss of a dedicated revenue source and the transfer of remaining refund-fund balances into the General Revenue Fund. Another possible issue is the treatment of taxes due before the cutoff date, since the bill explicitly denies refunds or proration for taxable years that extend past January 1, 2026, which could affect corporations with fiscal years spanning the transition.