Budget & Taxes

Amends the Property Tax Extension Limitation Law in the Property Tax Code. Provides that the debt service extension base shall be suspended for park districts for the 2026 levy year.

Senate Bill 2673 appropriates money from the General Revenue Fund. These funds are designated for specified units of local government to cover their expenses for Fiscal Year 2026. The bill is scheduled to become effective on July 1, 2025.

SB 2716 amends the Illinois Income Tax Act to establish the pass-through entity (PTE) tax on a permanent basis. This means that businesses structured as pass-through entities in Illinois, such as partnerships and S-corporations, will continue to be subject to this state-level tax without an expiration date. The bill ensures that this tax remains an ongoing part of the state's tax code.

Amends the Department of Revenue Law of the Civil Administrative Code of Illinois. Provides that the Department of Revenue shall establish and administer a property tax relief pilot program. Provides that eligible homeowners shall receive a one-time direct relief payment in an amount equal to a percentage, determined by the Department by rule, of the eligible homeowner's property tax liability for the 2025 tax year. Requires the Department of Revenue to submit a report in connection with the Program to the Governor and the General Assembly. Creates the Property Tax Relief Program Fund of 2026. Provides that moneys in the Fund shall be used by the Department for the purpose of making property tax relief payments. Amends the State Finance Act to make conforming changes.

Creates the Caring for Caregivers Act. Provides that a taxpayer who is a family caregiver and who incurs eligible expenditures during the taxable year for the care and support of an eligible family member may apply to the Department of Revenue for an income tax credit. Provides that the credit shall be equal to 50% of the eligible expenditures incurred during the taxable year by the family caregiver for the care and support of an eligible family member, subject to certain specified limitations. Amends the Illinois Income Tax Act to make conforming changes. Effective January 1, 2026.

Creates the Ground-Based Sparkler Purchaser Excise Tax Act. Imposes a tax, beginning July 1, 2026, upon purchasers for the privilege of using ground-based sparklers and not for the purpose of resale at the rate of 3% of the purchase price of ground-based sparklers. Prohibits certain retail combinations or bundles. Requires every retailer required to collect the tax to apply to the Department of Revenue for a certificate of registration. Provides that any retailer required to collect the tax shall be liable to the Department for the tax, whether the tax has been collected, and any such tax shall constitute a debt to the State. Provides for the making of returns. Provides that from the revenue collected, the Department shall pay 25% into the Fireman's Annuity and Benefit Fund, 25% into the Firefighters' Pension Investment Fund, and 50% into the General Revenue Fund. Provides for recordkeeping requirements. Establishes penalties for violations of the Act. Provides that the Department shall have full power to administer and enforce the Act. Allows for the arrest of any person who violates the Act, the search of any place of business to inspect all ground-based sparklers, and the seizure of any ground based-sparklers without a warrant. Sets forth hearing requirements after seizure. Allows the Department to adopt rules. Amends the Fireworks Regulation Act of Illinois. Allows a municipality to prohibit the sale and use of ground-based sparklers on public property. Prohibits ground-based sparklers from being sold to a person under the age of 18 years. Amends the Pyrotechnic Use Act. Prohibits ground-based sparklers from being sold to a person under the age of 18 years. Effective January 1, 2026.

Creates the Master Development Plan Recognition Act. Provides that certain contributions made by the State or units of local government are considered made pursuant to a master development plan within the meaning of Section 118 of the Internal Revenue Code of 1986. Amends the Illinois Income Tax Act. Creates a deduction for capital contributions that are made pursuant to a master development plan and that are included in the taxpayer's federal taxable income for the taxable year under Section 118 of the Internal Revenue Code. Effective immediately.

Amends the Use Tax Act, the Service Use Tax Act, the Service Occupation Tax Act, and the Retailers' Occupation Tax Act. Provides that, beginning on January 1, 2027, hearing aids are exempt from the taxes under those Acts. Effective immediately.

Amends the Property Tax Code. Provides that the assessed value of residential property in any general assessment year shall not exceed the assessed value of the property in the last general assessment year multiplied by one plus the percentage change in the Consumer Price Index during the 12-month calendar year immediately preceding the general assessment year for which the reassessment is conducted. Provides that the limitation does not apply if the increase in assessment is attributable to an addition, improvement, or modification to the property. Preempts the power of home rule units to tax. Effective immediately.

Amends the Illinois Income Tax Act. Creates an income tax credit for each taxpayer that manufactures renewable diesel in Illinois for use by a rail carrier. Provides that the amount of the credit is $1 per gallon of renewable diesel that is manufactured by the taxpayer in the State for use by a rail carrier. Effective immediately.