Proposed legislation seeks tax information from Illinois companies

There are many reasons that a company will decide to call a specific state home. One of those reasons is the available tax breaks. Depending on the tax break, a company can save millions of dollars each year. In an effort to improve Illinois' current tax policies, recently two state lawmakers suggested that companies that are publically traded provide information regarding the state taxes each pays annually.

Under the legislation certain companies would have to provide the following tax information online, annually:

  • Net income
  • Tax liability before any tax credits
  • What the company actually pays

The reasoning behind the recently introduced legislation is that by obtaining that information the state will have a better idea of how tax breaks are impacting the corporations. The issue has been front and center for both sides. Businesses such as Caterpillar have threatened to move headquarters to another state due to not enough in the way of tax breaks. On the other end there is a multibillion-dollar deficit in the state's budget that could be somewhat alleviated with the reduction of these breaks.

Even if the legislation passes, it could be difficult to get complete information regarding the total amount in business taxes paid by a corporation each year. This is due in large part to businesses that are spread across several states, each with different tax arrangements. Such a requirement could also potentially discourage businesses from coming to the state, greatly impacting the economy.

The legislation was passed by the Senate earlier this month. We will continue to monitor the situation and post updates as they become available.

Source: The Associated Press, "Ill. tax measure would paint only partial picture," David Mercer, Dec. 10, 2012

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