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                                                 illinois tax increase
                                                     Tuesday, October 26, 2010 10:04 AM                                             Posted by Stylish Wanderer

         illinois tax increase                    
                                                                                 Governors of some nearby states said they would try to take advantage of the
                                                                                 passage of substantial corporate-tax increases in Illinois and ...




                                                                                 illinois tax increase
                                                                                     Tuesday, October 26, 2010 10:04 AM                          Posted by Stylish
                                                                                                                                                 Wanderer
                                                                              Governors of some nearby states said they would try to take advantage of the passage
                                                 of substantial corporate-tax increases in Illinois and some local manufacturers said they were disappointed in the
                                                 outcome.


                                                 On Wednesday, the Illinois Senate approved an increase in the state's corporate-tax rate to 7% from 4.8%, part of
                                                 a broader tax package that was passed by the state House on Tuesday.


                                                 Democrat state Sen. John Cullerton watches the debate.If Gov. Pat Quinn signs the measure into law, as he is
                                                 expected to do in coming days, it would bring the total percentage tax that Illinois corporations would pay on
                                                 income, including a separate personal property replacement tax, to 9.5%, one of the highest in the nation,
                                                 according the Tax Foundation, a conservative-leaning Washington research outfit.


                                                 The tax package, aimed at digging Illinois out of a $13 billion deficit, also raises the individual income-tax rate to
                                                 5% from 3%. The measure failed to win over a single member of the legislature's Republican minority, who said it
                                                 would hurt economic growth and working families.


                                                 Iowa has the highest state corporate-tax rate, at 12%, but state law allows its companies to deduct their federal
                                                 income taxes from their state liability. That provision substantially brings down Iowa's state rate, said Scott Hodge,
                                                 president of the foundation.


                                                 The increases would make the corporate income-tax burden in Illinois the third-highest in the country when
                                                 combined with an assumed 35% federal corporate income tax, following Pennsylvania and Minnesota, according
                                                 to the foundation's figures. Illinois currently ranks 21.


                                                 Illinois Bonds Flat as Tax Increase Allays Worry Earlier: Illinois House Passes Big Income-Tax Increase "While
                                                 Illinois is raising its business taxes, states such as Minnesota and Iowa and others are looking to cut their
                                                 corporate taxes," Mr. Hodge said.


                                                 Ron Bullock, an owner of Bison Gear & Engineering Corp., of St. Charles, Ill., which makes motors used in
                                                 commercial machinery, said he was "extremely livid" that Illinois decided to raise taxes without cutting any broad
                                                 spending, as he had to do when his sales dropped 20% in 2009. The tax increases would raise his costs and
                                                 hurt his ability to reinvest in his business, he said.


                                                 "Our customers are not going to want to hear that we're going to have to increase our prices because the state of
                                                 Illinois is taxing us at a higher rate," he said. "We're just going to have to eat it, unfortunately."


                                                 In addition to raising the corporate-tax rate, the Illinois legislature also changed some other tax provisions that
                                                 affect companies, said Mark Denzler, chief operating officer of the Illinois Manufacturers' Association. Tax
                                                 provisions in most states allow companies to carry over losses from recent years to help decrease taxes on
                                                 income they owe during a set number of years into the future. That can help companies smooth out their tax
                                                 burdens amid big profit swings during business cycles.


                                                 Under the newly passed measures, Illinois companies will be unable to put losses from previous years toward
                                                 income during the next four years, potentially increasing their future tax liabilities, he said.