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SB 2188

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2025 Regular Session

The bill would create a state tax credit for small- to mid-sized Illinois financial institutions to offset fees from qualifying sub-$5M commercial loans, encouraging local lending.

Died In Committee
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Bill Summary · SB 2188

SB 2188 — Summary (Introduced 2025; Died in Committee)

Status: Died in committee (not enacted)
Sponsor: Sen. Paul Faraci
Primary change: Amendment to Illinois Income Tax Act (35 ILCS 5/201) to create a tax credit for certain financial institutions.
Companion: HB 4660

Purpose

The bill would create a targeted Illinois income tax credit to encourage in‑state commercial lending by small and mid‑sized financial institutions. The intent, as stated in the bill synopsis, is to reduce the tax burden on certain loan‑related income earned by qualifying institutions when they originate smaller commercial loans for Illinois business or agricultural projects.

Key provisions

  • Adds a new tax credit to the Illinois Income Tax Act (35 ILCS 5/201).
  • Eligible institutions: financial institutions with less than $50,000,000,000 (fifty billion) in assets.
  • Eligible loans: commercial loan transactions that simultaneously meet all of the following:
    • Principal amount is less than $5,000,000;
    • Originated by the financial institution claiming the credit;
    • Made to a person residing or located in Illinois;
    • Made primarily for a business or agricultural project in Illinois.
  • Credit amount: equal to the aggregate amount of all fees, penalties, and any other income derived during the taxable year from each such commercial loan transaction.
  • Effective date: the bill states “effective immediately” if enacted.

Who would be affected

  • Directly: qualifying financial institutions (banks, credit unions, etc.) with assets under $50 billion that originate qualifying commercial/business or agricultural loans under $5 million inside Illinois.
  • Indirectly: small business and agricultural borrowers potentially benefit from greater access to in‑state lending; state revenues would be affected because the credit reduces taxable income/tax liability for claiming institutions.

Fiscal and policy considerations

  • Fiscal impact: would reduce state income tax receipts by the total credits claimed; the bill text does not include an estimate of the revenue loss.
  • Policy effects: could incentivize increased originations of small commercial and agricultural loans by smaller institutions; excludes very large financial institutions (≥ $50B assets).
  • Administrative: the credit would be claimed on state income tax filings under the amended Section 201; implementation would require guidance from the Department of Revenue.

Procedural history (selected)

  • Filed/Introduced: early February 2025 (sponsor filed 2/7/2025; user information cites March 10, 2025).
  • Passed Senate as amended: 4/3/2025.
  • Referred to House committees; committee hearings and substitute considered in April–May 2025.
  • Committee report(s) filed; reported favorably as substituted at one point but ultimately the bill did not advance to final enactment and is listed as “Died In Committee.”

Note: The bill packet includes the full text of Section 201 (income tax rate schedule) as context; the substantive new provision described in the synopsis is the creation of the loan‑fee credit summarized above.

Compiled from official sources — confirm details with the bill’s official record.

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