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SB 3515

PROP TX-CHARITABLE PURPOSES

104th Regular Session Introduced by Celina Villanueva

SB 3515 lets entrepreneurial support organizations qualify for charitable property tax exemptions if the value of services from a property meets or exceeds that property's tax liab

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Bill Summary · SB 3515

Summary of SB 3515 (104th General Assembly) – Illinois

Date introduced: February 5, 2026
Sponsor: Sen. Celina Villanueva (co-sponsor)
Committee: Revenue (assigned), with Rule 2-10 deadlines noted in action history

1) Purpose and Intent

SB 3515 amends the Illinois Property Tax Code to broaden the definition of “institution of public charity” for the purpose of property tax exemptions. Specifically, it adds a new pathway for a not-for-profit organization that operates primarily as an entrepreneurial support organization to qualify for a charitable property tax exemption for properties it uses to provide services typically offered by entrepreneurial support organizations (e.g., programming, education facilities, and networking resources). The bill also establishes a threshold-based test: an entrepreneurial support organization can obtain a charitable exemption for a property if the value of charitable services or activities conducted using that property in the relevant year equals or exceeds the property’s estimated tax liability for that year. The amendments are declarative of existing law and retroactive where applicable, including pending actions.

2) Key Provisions and Changes

  • New eligible entity category: The term “institution of public charity” includes a not-for-profit organization that is organized and operated primarily as an entrepreneurial support organization, provided it:

    • (i) has affirmative evidence of tax-exempt status under Section 501(c)(3) of the Internal Revenue Code (or successor), and
    • (ii) uses the property to provide services typically offered by entrepreneurial support organizations (e.g., programming, educational facilities, community and networking resources).

  • Threshold-based exemption testing: An entrepreneurial support organization qualifies for a property tax exemption for any of its properties if the value of charitable services/activities provided using the property during the year equals or exceeds the property’s estimated tax liability for that year.

  • Scope of exemption: The changes apply to properties used by entrepreneurial support organizations and allow retroactive application where substantively applicable.

  • Other existing exemption framework retained: The bill preserves other categories of charitable exemptions (e.g., institutions of public charity, beneficent organizations, old people’s homes, libraries, historical societies, certain health organizations) with their current criteria.

  • Bylaws and waivers (related to other exemptions): In provisions outside the entrepreneurial section, there are detailed referencing points for waivers/reductions (e.g., bylaw-based waivers for entrance fees) and review provisions, which the act notes may be reviewed by the Department periodically for current policy status.

  • Not-for-profit real estate structure: Clarifications around ownership structures (e.g., LLCs) continue to allow exemptions where the exempt institutions actually and exclusively use the property for charitable and beneficent purposes and do not lease or profit from the property.

  • Retroactivity: The act states that its amendments are declarative of existing law and shall be applied retroactively where substantively applicable, including pending actions.

3) Who/What Would Be Affected

  • Entrepreneurial support organizations (ESOs): Not-for-profit ESOs that provide mentoring, training, and services to entrepreneurs and use property to deliver these services could become eligible for charitable property tax exemptions under the new threshold test.
  • Properties used by ESOs: Any properties used by eligible ESOs to deliver qualifying services could qualify for exemption if the value of charitable services meets or exceeds the property’s estimated tax liability.
  • Other exempt entities: Existing categories under Section 15-65 (e.g., institutions of public charity, old people’s homes, libraries, health organizations) remain governed by existing rules, with the ESO pathway added to the mix.
  • ** Illinois Department of Revenue/Department staff:** Potential retroactive review and application of exemptions, especially where bylaws or policies on waivers are involved.

4) Procedural and Timeline Considerations

  • Introduction and assignment: Filed February 5, 2026; assigned to Revenue.
  • Committee deadlines (not final): Rule 2-10 deadlines established, with a deadline set for May 15, 2026 (committee stage) and earlier April 24, 2026 for committee decisions, per the action history.
  • Retroactivity: Provisions are intended to be retroactive where substantively applicable, including pending actions, according to the bill text.
  • Effective date: As a property tax code amendment, any effective date would align with enactment and retroactivity language, subject to legislative final passage and any administrative implementation timelines.

5) Practical Implications

  • ESOs investing in facilities and programming could see tax relief commensurate with the level of charitable services provided, potentially reducing operating costs and enabling expanded entrepreneur-support activities.
  • Tax-exemption determinations would require quantifying the value of charitable services or activities provided from the property, establishing a measurable link between services delivered and tax liability.
  • The retroactive provision may impact past exemption determinations where applicable.

If you’d like, I can compare SB 3515’s ESO provisions to existing exemption criteria in Illinois law or provide a concise summary for policymakers.

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

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