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HB 2605

Public finance; Oklahoma Public Finance Act of 2025; effective date.

2025 Regular Session Introduced by Kyle Hilbert

In Illinois, the standard tax exemption would be a flat $150,000 for tax years ending after 12/31/2025, reducing taxable income for many filers.

Second Reading referred to Rules
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Bill Summary · HB 2605

Summary — HB 2605 (Increase Tax Standard Exemption)

Status: Referred to Rules Committee
Introduced: February 2025
Primary Sponsor: Rep. Adam M. Niemerg
Statute amended: 35 ILCS 5/204 (Illinois Income Tax Act — Section 204, Standard exemption)
Effective date: Upon becoming law (text indicates immediate effect / applies to taxable years ending after December 31, 2025)

Note: the provided packet includes an unrelated Arizona statutory amendment (Section 41‑713) about posting a telecommunications fund report. This summary covers the Illinois measure titled “INCREASE TAX — STANDARD EXEMPTION.”

Purpose / Intent

To substantially increase the State of Illinois’s “standard exemption” (the basic exemption used in computing net income under the Illinois Income Tax Act) from its prior indexed amounts to a single flat basic amount of $150,000 for taxable years ending after December 31, 2025. The change is intended to reduce taxable income for many filers by raising the basic exemption used in the state tax calculation.

Key provisions

  • Amends Section 204 of the Illinois Income Tax Act (35 ILCS 5/204).
  • Replaces the schedule of historical and cost‑of‑living adjusted basic exemption amounts with a new basic amount of $150,000 “for taxable years ending after December 31, 2025.” (The bill retains other existing structure for computing the exemption and related subsections for additional exemptions, age/blindness exemptions, and allocation rules.)
  • The bill text indicates an immediate effective date: “This Act takes effect upon becoming law.”
  • Existing additional exemptions (for dependents, elderly or blind taxpayers, and other statutory adjustments) remain present in the statutory text; the primary change is to the basic amount used in subsection (b).

Who would be affected

  • Individual taxpayers subject to Illinois income tax: raising the standard exemption to $150,000 would reduce Illinois taxable income for most filers, particularly benefitting taxpayers whose base income is below or near the new exemption level.
  • Corporations: the statute historically sets the basic amount for corporations at zero; the change as drafted targets individual basic amounts, but the bill should be reviewed for how it treats corporations explicitly.
  • State finances: a substantial reduction in taxable income statewide would lower individual income tax revenues absent offsets elsewhere in law or by policy.

Fiscal and policy implications

  • The provision would likely produce a large reduction in state individual income tax revenues (potentially substantial, depending on implementation and interaction with filing thresholds and other provisions). The bill text does not include a fiscal note; a revenue estimate would be required to quantify impacts.
  • Distributional effects: because the exemption is large relative to typical individual incomes, benefits may be concentrated among middle- and higher‑income filers depending on filing status and other exemptions. The bill retains additional exemptions (dependents, age/blindness) which continue to apply.
  • Administrative: the Department of Revenue would need to update forms, guidance, and withholding tables to reflect the new exemption amount.

Procedural history / timeline (from provided records)

  • Filed/Introduced in early February 2025 (records show Feb 4–6, 2025 filings/readings).
  • Referred to Rules Committee (status shown in cover information); other calendar entries in the packet show first readings and committee referrals in February–March 2025.
  • Companion/related bills: SB 1190 and HB 29 are listed as companion measures.

Additional notes

  • The document provided conflates two distinct “HB 2605” texts from different states. This summary addresses the Illinois Income Tax Act amendment (increase to the standard exemption). For final legal interpretation or fiscal estimates, consult the bill text on the General Assembly website, the sponsor’s office, and the Legislative Fiscal Office for an official fiscal note.

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

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