Bill
HB 3124
The bill aligns Illinois base income with federal depreciation rules, allowing extra subtraction for property held through the federal depreciation period to encourage reshoring in
Status: In committee upon adjournment (last action 2025-06-28)
Introduced: February 18–20, 2025 by Rep. Blaine Wilhour
Official short name in bill text: “Reshore Our Supply Chains Tax Reform Act”
Important note on inconsistency
- The bill information header you provided includes a title referencing “predator management in drought‑stricken regions; declaring an emergency.” The actual bill text supplied amends the Illinois Income Tax Act (35 ILCS 5/203) and concerns income tax base adjustments and depreciation—it does not address predator management. This summary follows the text of the introduced bill (income tax changes).
Purpose and intent
- The bill seeks to change how “base income” is computed under the Illinois Income Tax Act for individuals by aligning certain state modifications with federal depreciation rules and related items. The stated bill name indicates a policy objective of encouraging reshoring of supply chains, likely by making state tax treatment of depreciation more favorable for property and investment used in business activity.
Key provisions and changes
- Renames the amendatory act as the Reshore Our Supply Chains Tax Reform Act.
- Amends Section 203 (Base income defined) of the Illinois Income Tax Act (35 ILCS 5/203) — modifies the list of additions/subtractions used to convert federal adjusted gross income into Illinois base income for individuals.
- Clarifies/creates a rule allowing a subtraction modification where:
- If a taxpayer continues to own property through the last day of the last tax year for which the taxpayer may claim a depreciation deduction for federal income tax purposes, the taxpayer may take a subtraction modification with respect to that property (subject to prior subtraction/addition rules).
- Clarifies recapture/addition treatment:
- If the taxpayer disposes of property for which they previously made an addition modification (related to bonus depreciation), an addition may be required in the year of disposition; conversely, if the taxpayer retained property through the last federal depreciation year and had earlier made subtraction modifications, a corresponding subtraction is allowed.
- Retains and references existing addback/subtraction rules elsewhere in paragraph (2) — e.g., items like bonus depreciation (subparagraph D-15), eligible remediation costs, certain interest addbacks for related-party cross-border transactions (D-17), and other enumerated modifications.
- The bill includes multiple cross-references to existing Internal Revenue Code provisions and prior Illinois statutory language; it appears intended to align state taxable income more closely with certain federal depreciation treatments while preserving recapture rules on disposition.
Who would be affected
- Individual taxpayers who claim federal depreciation deductions (including owners of business property reported on individual returns — e.g., sole proprietors, partners, S‑corporation shareholders, and individuals with rental or farm property).
- Taxpayers who previously claimed bonus depreciation or other federal depreciation that required Illinois addback/subtraction adjustments.
- State revenue: if the change allows more subtraction (or delays addback) for depreciation for Illinois purposes, it would tend to reduce Illinois taxable income for affected taxpayers and reduce state individual income tax receipts (magnitude not provided in text).
Procedural / timeline notes
- Introduced Feb 18–20, 2025. First reading and initial referrals tracked to several committees (Rules; Revenue & Finance; Insurance; Tax Policy subcommittee; Agriculture, Land Use, Natural Resources & Water; Ways & Means).
- As of 2025-06-28 the bill was “in committee upon adjournment” (no final passage or enactment).
- The bill text excerpt provided does not show an explicit emergency clause, despite the initial “declaring an emergency” label in your header.
Potential impacts and considerations
- Likely intended as an incentive for capital investment (consistent with a “reshoring” label) by making state tax treatment of federal depreciation more favorable/consistent.
- Could reduce Illinois individual income tax revenue; the fiscal impact would depend on how many taxpayers and what asset classes qualify.
- Introduces complexity in administration and compliance by requiring tracking of federal depreciation eligibility periods, dispositions, and recapture/addback timing for Illinois purposes.
- Would primarily affect pass-through/individual filers rather than C corporations (the amendment shown applies to the individual base income section).
If you want, I can:
- Draft a one‑page fiscal impact estimate outline (what data would be needed),
- Compare this bill’s approach to prior Illinois depreciation addback/subtraction rules, or
- Flag specific drafting issues and suggest clarifying language for recapture timing and affected taxpayer categories.
Compiled from official sources — confirm details with the bill’s official record.
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