PRESS ALERT
July 14, 2011 – Tune in tonight to watch Executive Director Ralph Martire being
interviewed by CBS Channel 2’s Kristyn Hartman for the 10:00 p.m. newscast on the
issue of “decoupling” Illinois corporate income tax law from the recently passed federal
bonus depreciation rules.
Prior federal law permitted businesses to depreciate, that is write–off against their
federal income taxes, the cost of capital purchases over a number of years, based on
the useful life of the asset.
These new federal bonus depreciation rules, passed in December of 2010, allow
business to expense the full cost of capital investments in machinery and equipment
immediately, this year, rather than amortizing them over several years, as under prior
law.
Illinois has to decouple from this change in federal law because, like most states, Illinois
piggy-backs its corporate income tax on the federal government’s. So unless Illinois
decouples from the new, federal bonus depreciation rules, those rules will automatically
become law in Illinois, causing the state to lose at least $600 million (according to the
Commission on Government Forecasting and Accountability) in revenue in Fiscal Year
2012.
“It’s $600 million in revenue we would have collected had it not been for the change in
federal law,” said Martire. “Simply put, decoupling the Illinois corporate income tax from
the federal bonus depreciation rules would alleviate the need to make $600 million in
cuts to education and human services in fiscal year 2012.”
Please watch the broadcast and share your thoughts with us. Email
kmiller@ctbaonline.org