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SR 505

NO TAX DECOUPLING-FEDS

104th Regular Session Introduced by John Curran

Non-binding Senate resolution urging the Governor to keep Illinois tax code conforming with HR 1, avoiding decoupling to cut compliance costs and support business growth.

Referred to Assignments
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Bill Summary · SR 505

Summary — SR 505 (NO TAX DECOUPLING‑FEDS)

Status: Referred to Assignments (introduced May 6, 2025)
Type: Senate resolution (non‑binding)
Primary sponsors: Senators RaShaun Kemp, Elena Parent, Nan Orrock, Jason Esteves, John F. Curran

Purpose / Intent

SR 505 is a Senate resolution asking the Governor of Illinois not to “decouple” the State’s tax law from recent federal tax changes enacted in H.R. 1 (a federal tax reform package). The resolution expresses the General Assembly’s preference that Illinois maintain conformity with the Internal Revenue Code as amended by H.R. 1, arguing that conformity will simplify administration, reduce compliance costs, and preserve Illinois’ competitiveness for business investment and job creation.

Key provisions

  • Formally urges the Governor:
    • Not to decouple Illinois’ tax code from the federal tax changes in H.R. 1.
    • To pursue the Governor’s stated, pro‑growth approach to balancing the State budget that keeps State tax law aligned with the Internal Revenue Code.
  • Requests that copies of the resolution be delivered to:
    • The Governor of Illinois
    • The Director of the Illinois Department of Revenue
    • The President of the Illinois Senate
    • The Speaker of the Illinois House of Representatives
  • Includes supporting arguments that conformity:
    • Preserves simplicity and clarity for taxpayers
    • Avoids higher compliance burdens and potential state tax increases on businesses
    • Encourages investment, hiring, and economic growth

Rationale cited in the text

The resolution lists several claimed benefits of conformity, including:
- Making permanent or expanding pro‑business federal provisions (e.g., enhanced small business expensing for equipment and software, immediate expensing of R&D costs, and a new manufacturing deduction) that could benefit Illinois businesses and job creation.
- Avoiding added administrative complexity and separate accounting requirements for taxpayers.
- Preventing state tax increases that could drive businesses and jobs to other states.

The resolution also cites comparative tax burden data from sources such as the Taxpayers’ Federation of Illinois and the Tax Foundation to argue Illinois already has relatively high tax levels and should avoid further disadvantage.

Legal effect and impact

  • SR 505 is a non‑binding legislative resolution expressing the sentiment of the Senate; it does not change state law or impose legal requirements.
  • If the Governor heeds the resolution, Illinois would likely continue to conform to federal tax changes, meaning state taxable income and certain state tax treatment would follow the federal changes in H.R. 1 — reducing the need for separate state adjustments and potentially allowing Illinois taxpayers (especially businesses) to benefit from those federal provisions automatically.
  • If the Governor decides to decouple despite this resolution, state tax law would diverge from federal law, possibly increasing compliance costs for Illinois taxpayers and changing state revenue outcomes.

Procedural / timeline notes

  • Introduced: May 6, 2025
  • Read & adopted: May 8, 2025 (vote recorded; reported enrolled)
  • Additional entries in the legislative history show earlier and later docket activity (Senate hopper March 28, read and adopted March 31, filed with Secretary Oct 30, referred to Assignments Oct 30). The resolution text also includes a separate congratulatory measure (naming a student athlete) that appears in the enrolled document; the substantive policy portion summarized above is the tax conformity resolution.

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

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