SPRINGFIELD – Small businesses throughout Illinois are already devastated by the COVID pandemic and Governor Pritzker's unilateral executive orders that have shut down thousands of family businesses over the past 10 months. But a bill the General Assembly is voting on this week could be the final blow, say several business groups.
"Gov. JB Pritzker has announced plans to pull a lifeline away from struggling family-owned businesses across the entire economic spectrum, hitting them with more than $500 million in new taxes," the groups said Monday. "This follows the news that many of these same businesses did not receive any financial assistance through the state’s Business Interruption Grants (BIG)."
In March 2020, an overwhelming bipartisan majority of Congress, including every single member of the Illinois congressional delegation, passed the CARES Act to aid small businesses during the global pandemic, including a tax change to help companies experiencing losses. This aid was targeted at pass-thru entities (e.g. partnerships, LLCs, and not C corporations). Pass-thru entities are typically independent business owners, not large corporations. The CARES Act increased the Net Operating Loss provision so that companies could offset up to 100 percent of their income through the end of 2020 when the Act expired.
The economic stimulus expired on December 31, 2020, and now employers are being hit with a tax hike and will see a massive change in cash flow after a year of difficult tax and accounting decisions, including the possibility of taxation of the Paycheck Protection Program funds which kept many businesses afloat.
When passed in March, Governor Pritzker noted “this was a record-breaking emergency relief package and much needed for our state.”
The state’s business community is united in opposition to the governor’s plan.
“We urge the Governor and legislature to reject this massive tax increase at a time when thousands of small businesses across the entire state are struggling to stay afloat during a pandemic and government-imposed shutdowns. This will have a dramatic impact on every aspect of business, including some of our most decimated industries. We understand the desire to find revenue, but this is the opposite of an ‘all-in’ approach,” the group's statement said.
Those groups that have thus far signed on to oppose the Governor's plan:
- Chicagoland Chamber of Commerce
- Grain and Feed Association of Illinois
- Hospitality Business Association of Chicago
- Illinois Chamber of Commerce
- Illinois Hotel & Lodging Association
- Illinois Licensed Beverage Association
- Illinois Manufacturers’ Association
- Illinois Retail Merchants Association
- NFIB
- Technology & Manufacturing Association
- Valley Industrial Association
