HB2865 would phase out Illinois’s estate tax and generation-skipping transfer tax over a five-year period. Beginning with deaths or transfers occurring on or after January 1, 2026, the bill reduces the tax amount by 20% each year, continuing through 2029, and then eliminates the tax entirely for persons dying or transfers occurring on or after January 1, 2030. The bill also adds a repeal provision that would repeal the Illinois Estate and Generation-Skipping Transfer Tax Act on January 1, 2031.
The measure amends the Illinois Estate and Generation-Skipping Transfer Tax Act by changing the formulas in Sections 3 and 4 to apply the scheduled reductions. It preserves the existing tax structure for earlier periods but creates a sunset path that ends both the estate tax and the generation-skipping transfer tax. The bill is effective immediately, meaning the phase-out framework would take effect upon enactment even though the tax reductions are tied to future dates.
Impact
HB2865 would significantly reduce state revenue from estate and generation-skipping transfer taxes and would ultimately remove those taxes from Illinois law. It would amend 35 ILCS 405/3 and 35 ILCS 405/4 to lower the tax liability by 20% increments for 2026 through 2029, then set the tax rate to zero for deaths or transfers on or after January 1, 2030. It also adds a new Section 19 to repeal the Act entirely on January 1, 2031, which would eliminate the statutory framework governing these taxes.
Sentiment
Based on the bill title and the absence of recorded committee testimony or votes in the provided materials, the bill appears to be a pro-tax-cut measure aimed at reducing or eliminating estate taxation. The available context does not show formal support or opposition statements, but the proposal itself suggests a favorable view toward taxpayers and estates subject to the tax, especially larger estates and generation-skipping transfers. No recorded vote history is provided to indicate legislative momentum or resistance.
Contention
The main point of contention is likely fiscal: supporters would view the phase-out as tax relief and a way to reduce burdens on estates, while opponents would likely focus on the loss of state revenue and the impact on funding for public services. Another likely issue is distributional fairness, since estate and generation-skipping transfer taxes primarily affect larger estates and wealth transfers, raising questions about whether the tax should be preserved, reduced, or eliminated. No specific committee objections or negotiated amendments are included in the provided record.
Modifies collective Statewide transfer agreement and reverse transfer agreement; establishes New Jersey Transfer Ombudsperson within Office of Secretary of Higher Education.
Modifies collective statewide transfer agreement and reverse transfer agreement; establishes New Jersey Transfer Ombudsperson within Office of Secretary of Higher Education.