![]() Things get more complicated, however, for businesses operating in multiple states. If a business operates solely in Illinois, Illinois income tax is paid on 100% of its taxable income. Illinois requires a number of adjustments, decoupling from certain federal provisions and sometimes replacing them with our own alternative (in the case of depreciation, for example) and sometimes making adjustments to compensate for odd mismatches or to avoid unconstitutional results (in the case of the foreign dividends received deduction, for example). This is generally the business’s operating profits, after deductions for business expenses have been taken. Illinois has its own personal exemption and there are a few other adjustments, perhaps most notably the deduction for federally taxed social security and other retirement income.įor businesses, the starting point in calculating Illinois income tax liability is federal taxable income. Illinois is considered a “rolling conformity” state changes to the Internal Revenue Code’s tax base provisions are automatically incorporated into Illinois’ tax base.Ī quick note about individual taxpayers: For individuals, the starting point for Illinois taxes is federal adjusted gross income, which means that most of the federal deductions (like the standard deduction and itemized deductions like the one for home mortgage interest) are not taken into consideration. Illinois and most states rely on the federal government to do much of the heavy lifting for this step. Generally speaking, a business has nexus in Illinois (and therefore must file an Illinois income tax return) if it has employees or assets in the state. Income tax nexus standards vary from state to state, and there are also federal statutory and constitutional nexus limitations. We will address each of these steps in turn, although there is one preliminary question to answer: is the taxpayer subject to Illinois income tax at all? In the tax world, this is called “nexus.” It can get complicated, but the underlying fundamentals are the same for everyone, from a minimum wage-earner to a multimillion-dollar corporation: Most people have a basic understanding of the individual income tax, and there are many similarities, but it is important to understand this revenue source, particularly when evaluating the consequences (and advisability) of proposed changes.Īll taxpayers follow the same basic process when determining how much income tax they owe in Illinois. This article provides a high-level overview of how Illinois’ income tax applies to businesses. Questions pertaining to any of the items on this page may be directed to the Finance Director at (847) 362-2430.By Kellie Cookson Business Income Taxes in Illinois: How Are They Calculated? Illinois Department of Revenue Special Non-Home Rule Sales Tax Circular Information from the Illinois Department of Revenue regarding the collection of the special non-home rule sales tax is linked below. The Village of Libertyville has also enacted, by ordinance, a Special Non-Home Rule Sales Tax at a rate of 0.5%, effective January 1, 2023. Illinois Department of Revenue Non-Home Rule Sales Tax Circular Information from the Illinois Department of Revenue regarding the collection of the non-home rule sales tax is linked below. The Village Board approves these changes in conjunction with the budget.Ģ019-2020 Fee Schedule Non-Home Rule Sales Taxesīy voter referendum held in March 2020, the Village of Libertyville enacted a non-home rule sales tax of 1%, effective July, 1, 2020. The Village reviews the fees charged for various services on an annual basis. ![]() ![]() Prior Year Treasurer's Reports Fee Schedule ![]()
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