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IllinoisSB3019104th General Assembly (2025–2026)SenateWALLET

FINANCE-AGRICULTURAL BORROWER

Sponsored By: Celina Villanueva (Democratic)

Signed by Governor

Summary

Amends the Illinois Finance Authority Act. Provides that the maximum amount of notes or bonds that may be issued by the Illinois Finance Authority for any one agricultural real estate borrower may be increased by a higher amount than currently allowed if a higher amount is permitted by statute or regulation. In provisions concerning agricultural assistance loans, removes provisions providing that no proceeds from any bonds issued by the Illinois Finance Authority shall be loaned for the purchase of new depreciable agricultural property to any natural person who has a net worth in excess of $500,000. Effective immediately.

assignmentsfinancial institutionsrevenue & finance

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Bill Overview

Analyzed Economic Effects

128 provisions identified: 45 benefits, 47 costs, 36 mixed.

Millions directed to McCormick Place

Illinois directs tax collections to the McCormick Place Expansion Project Fund, subject to earlier required payments and yearly limits. Deposits are $375 million each year from fiscal years 2027 through 2035 and $450 million in fiscal year 2036. Later deposits can continue while bonds remain outstanding, but not after fiscal year 2060.

Fantasy contest users get safeguards

Illinois residents can block themselves from opening fantasy contest accounts. Eligible nonresidents can also use self-exclusion. Operators must display information about gambling help and check identities, prevent underage play, and use safeguards against fake accounts, fraud, money laundering, and collusion.

Seniors can defer more property taxes

Eligible seniors can defer up to $7,500 in real estate taxes per tax year, up from $5,000. The higher limit applies starting with the 2022 tax year. The taxes are deferred, not forgiven.

Investors get a longer angel credit

Investors can claim a credit for direct investments in certified new businesses for tax years ending through December 31, 2032. The credit is 25% of the investment, or 35% for qualifying minority-, women-, or disability-owned businesses, or businesses in counties with 250,000 or fewer people. At least $10,000 must be invested, and no more than $2 million per business counts.

Less tax on qualifying take-home food

Beginning January 1, 2026, qualifying food bought for consumption away from where it is sold is exempt from the applicable sales tax. The exemption does not cover liquor taxable under state liquor law, adult-use cannabis food, soft drinks, candy, or food prepared for immediate consumption. Certain health, care, and child-care providers also receive a use-tax exemption for prepared food transferred as part of a service.

Lower taxes on select purchases

Several Illinois purchase taxes are lower or removed. Starting January 1, 2026, qualifying food bought to eat away from the store is exempt, but candy, soft drinks, cannabis food, alcohol, and food prepared for immediate eating remain taxable. From August 7 through August 16, 2026, qualifying clothing under $125 per item and school supplies are taxed at 1.25% instead of 6.25%. Menstrual products are exempt through December 31, 2026; qualifying breast pumps, active-duty military purchases, and purchases in state unclaimed-property sales also receive stated tax exemptions.

More affordable housing donation credits

Beginning in State fiscal year 2027, Illinois sets a $41.8 million annual reservation limit for affordable housing donation tax credits. The limit grows by 10% each fiscal year. A taxpayer benefits only when the donation and project qualify and credits are available.

Tax break for licensed cannabis businesses

For tax years beginning on or after January 1, 2023, an Illinois cannabis business with a qualifying state license can subtract certain expenses disallowed under federal tax rules. The expenses cannot be amounts already added back under Illinois tax law. This can lower the business’s Illinois taxable income.

Monthly funding for crime laboratories

Beginning July 1, 2015, Illinois deposits $500,000 each month from remaining receipts under listed tax laws into the State Crime Laboratory Fund. The money supports crime laboratory operations, not direct household payments.

More state money for transit projects

Illinois directs shares of motor-fuel and gasohol tax revenue to transportation funds. Starting July 1, 2026, 80% goes to public transportation funds, divided 85% and 15%. The state also deposits tax collections into a civic and transit project fund starting July 1, 2023. Its schedule provides $200 million for fiscal year 2024 and rises to $445.1 million for fiscal year 2043, subject to required prior payments and project conditions. County and transit districts also receive 4% of net revenue from the 6.25% general rate and 20% from the 1.25% motor-fuel and gasohol rate, with a stated aviation-fuel exception.

Businesses keep a research tax credit

Businesses can claim a 6.5% credit for qualifying increases in research activity conducted in Illinois. The credit applies to tax years ending before January 1, 2037. The law extends the previous deadline of January 1, 2032.

Employers get a longer apprentice tax credit

Employers can claim $3,500 for each qualifying apprentice. They can claim another $1,500 if the apprentice lives in an underserved area during the school year or the employer’s main business location is there. Apprentices must be Illinois residents, at least 16, and full-time students in a registered apprenticeship program. The credit applies to tax years beginning on or before January 1, 2032.

State tax money funds transit and projects

Illinois directs tax money to transit, infrastructure, and the McCormick Place expansion project. From July 1, 2026, until July 1, 2027, it transfers $12.5 million monthly to the General Revenue Fund before specified transit payments. Starting July 1, 2027, 80% of net motor fuel and gasohol tax revenue goes to transit funds: 85% to the Public Transportation Fund and 15% to the Downstate Public Transportation Fund. The law also schedules $450 million for McCormick Place in fiscal year 2036 and later years while its bonds remain unpaid, but not after fiscal year 2060; those deposits depend on the authority chairman’s request and the payment schedule.

Illinois taxed some forgiven student loans

For tax years beginning from January 1, 2021, through December 31, 2025, Illinois added some forgiven student loans to state taxable income. The rule covered forgiveness included in federal adjusted gross income, except amounts excluded under the stated federal insolvency rule.

More nicotine products face tobacco tax

Beginning July 1, 2025, Illinois taxes tobacco products and many products with natural or synthetic nicotine, including pouches, lozenges, and gum. FDA-approved products sold only for medical use or to help people quit nicotine are excluded. Through December 31, 2026, the tax is 45% of wholesale price. Beginning January 1, 2027, it is 45% of the seller’s actual cost; an actual cost list can be used when records are unavailable for reasons beyond the seller’s control.

Liquor sellers face license suspensions

If the Department of Revenue denies or revokes a retailer’s tax registration, the Liquor Control Commission must make the retailer’s liquor license inactive. The retailer cannot buy or sell liquor or do other licensed work until the violation is fixed, registration is restored, and the Department tells the Commission the matter is resolved. The Department provides notice and a chance to be heard before the specified certification.

Tobacco distributors face tighter license rules

Tobacco distributor license applicants must apply electronically, verify their applications under penalty of perjury, and promise to follow the tobacco manufacturers’ escrow law. The Department can deny a license for listed tax, reporting, or conduct problems. Licensees do not gain a vested or compensable property right in their licenses.

Large social platforms pay monthly fees

Starting January 1, 2027, covered social media platforms with more than 100,000 Illinois users pay a monthly fee based on their user count. The fee starts at $0.10 per user above 100,000 and rises at higher user counts. Not-for-profit organizations are excluded, and annual adjustments begin January 1, 2028.

Business tax addbacks for depreciation

Corporations, trusts, estates, and partnerships must add certain federal bonus depreciation deductions back to Illinois taxable income. For tax years beginning in 2026, the rule covers deductions under two specified federal provisions. The addback can increase Illinois tax for affected businesses and entities.

Blue Collar job credits face an annual cap

Illinois can award no more than $20 million in Blue Collar Jobs Act credits in any state fiscal year. The annual limit can reduce credits available to eligible recipients.

Businesses face tighter related-party tax rules

For tax years ending on or after December 31, 2025, Illinois removes some exceptions to addbacks for related-party interest and intangible expenses. The removed exceptions include certain foreign-tax and arm’s-length cases. Some pass-through transactions and unreasonable adjustments can still qualify for exceptions. For some taxpayers subject to federal interest limits, the interest reduction is allocated first to people outside a specified foreign-person category.

Corporations face limits on net loss deductions

Starting with tax years ending on or after December 31, 2027, most corporations face limits on Illinois net loss deductions. The deduction cannot exceed the greater of $500,000 or a set share of income. That share rises from 15% for 2027 years to 30% in 2028, 50% in 2029, 65% in 2030, and 80% from 2031 onward. A year with a limit does not count toward the years available to carry a loss forward.

New rules for fantasy contest players

Fantasy contest players must be at least 21 and generally must be in Illinois, with location checks by operators. Players can use a self-exclusion program to block themselves from opening an account. Operators generally need a state license, must meet background and qualification rules, and must report specified suspected misconduct. Contests run under the law do not count as gambling, and fantasy contests are treated separately from sports wagering.

New property tax rules for farms

Illinois changes farmland valuation and classification rules, and local officials can equalize assessments for farm homes and some farmland. These changes can raise or lower property-tax bills. Qualifying vegetative filter strips keep special assessment treatment through December 31, 2031, if they meet location, federal guide, and vegetation rules.

Cigarette retailers face tougher license rules

The Department can suspend, cancel, or revoke a retailer’s cigarette license when the retailer is ineligible, after notice and a hearing. An LLC cannot get a license if a member or managing member is ineligible; a partnership cannot get one if a partner is ineligible. Before denying a license for a covered felony, the Department must review rehabilitation evidence and hold a hearing if requested. A denial notice no longer has to explain how to appeal or when to apply again.

New fees and rules for cigarette distributors

Eligible applicants must receive a secondary distributor license after applying, but each initial or renewal license costs $250 per business location. Applicants must apply electronically and state that they will follow the tobacco manufacturers’ escrow law. Tax debt without an approved payment agreement, escrow problems, and other listed violations can block a license; some felony decisions must consider rehabilitation. The Department can suspend or revoke licenses for specified escrow-law violations, and cigarette distributor permits cannot be transferred or treated as compensable property rights.

New rules for cigarette machine operators

Starting July 1, 2027, cigarette machine operator license applicants no longer need a $2,500 bond. The Department must return an existing bond within 90 days after that date if the taxpayer is not behind or short on tax payments. The Department must consider rehabilitation evidence when reviewing a felony conviction, but specified unpaid taxes and escrow-report problems can still block a license. The Department may also require operators to add information to their returns.

Stricter license rules for tobacco sellers

Illinois can suspend or revoke tobacco sellers’ licenses for specified tax or state-law violations, and can seek to stop unlicensed remote sales. Remote sellers face age-check suspensions: with qualifying training, a fourth violation in 24 months brings a three-day suspension; without it, suspensions begin at the second violation. The law also adds felony penalties for specified tax and business violations. A revoked license cannot be reissued for six months after the final decision, or while the person remains ineligible.

Sports betting licenses cost less upfront

An online sports wagering license application costs $250,000 and is not refundable. The initial four-year license costs $15 million, down from $20 million. A four-year renewal costs $1 million.

Tighter rules for cigarette permits

Starting June 16, 2025, cigarette permit applications must be filed electronically, and some permits cover only cigarettes in original packages inside a sealed, clear wrapper. Manufacturers must meet tax, escrow, and other listed requirements; felony convictions receive a review that considers rehabilitation. Some violations require notice and a hearing. The law removes the application fee for covered initial and renewal permits, but it does not state the amount of the former fee.

Businesses get credits for zone investments

Qualifying investments can earn a credit worth 0.5% of property basis in an Enterprise Zone or River Edge zone. A qualifying River Edge investment can earn another 0.5% if the business’s Illinois employment grows by at least 1%. Designated High Impact Businesses can also claim 0.5% for qualifying property that does not qualify for the zone credit. Credits cannot exceed the tax bill, unused credit can carry forward five years, and some moves can require repayment.

Illinois changes bonus depreciation tax rules

For tax years ending on or after December 31, 2021, Illinois calculates a subtraction for 100% bonus-depreciated property using depreciation allowed without the bonus election. Other bonus-depreciation rates use a percentage-based formula, and the subtraction cannot exceed the federal deduction for that property. For tax years 2026 and later, taxpayers must add certain federal bonus depreciation deductions back to Illinois income. The subtraction can lower income, while the addback can raise it.

Targeted ads face new Illinois tax

Beginning January 1, 2027, Illinois taxes qualifying targeted advertising receipts at 10% when a provider’s receipts exceed $1 million over the prior 12 months. Controlled-group companies count together, and several services are excluded. Providers can reduce a timely electronic payment by 1.75% of the tax, up to $1,000 per return period. Providers that overpay can seek a credit memorandum, which the revenue department must issue within 30 days.

Platforms cannot price by location

Social media platforms cannot change prices based on where a user logs in or uses an account to recover the statutory platform fee. An affected person can bring a civil case, and the platform cannot require arbitration for that claim.

No fees for covered mental health petitions

People filing covered petitions under the Mental Health and Developmental Disabilities Code pay no fees authorized by the applicable law. This includes petitions for discharge or commitment and petitions seeking orders for certain treatments.

Tax break for delivered meals

Beginning July 1, 2024, qualifying home-delivered meals for Medicare or Medicaid recipients are exempt from Illinois use tax. An intermediary must pay for the meals under a government contract. The law does not provide recipients with a cash payment.

No filing fee for guardianship accounts

Guardians filing accounts for guardianships of minors or disabled adults pay no filing fee. Fees for other covered probate accounts cannot exceed $25.

Student loan help lowers state taxes

Starting with tax years beginning January 1, 2026, a qualified worker can subtract certain student loan repayment help from Illinois taxable income. The help must come from a qualified community foundation under the Workforce Development through Charitable Loan Repayment Act and be included in federal adjusted gross income.

Affordable housing donors keep a tax credit

Taxpayers can claim the affordable housing donation credit for qualifying tax years ending through December 31, 2036. The previous end date was December 31, 2026. Donations must meet the program’s rules and limits.

Hotel guests can reclaim excess tax

Until July 1, 2026, hotel guests and re-renters can seek a refund for tax collected when no tax was due or when the amount exceeded the operator’s tax liability. If the operator does not refund the amount, the operator must pay it to the state.

Lower fuel taxes for Illinois drivers

Illinois skips the inflation-based motor fuel tax increase scheduled for July 1, 2026, through January 1, 2027; annual increases resume, including July 1, 2027. From January 1, 2024, through December 31, 2028, tax applies to 90% of gasohol proceeds and 80% of mid-range ethanol blend proceeds. At the special 1.25% rate, tax applies to all proceeds; after 2028, it applies to all proceeds for both blends.

Medical debt relief lowers state taxes

Starting with tax years beginning January 1, 2025, eligible Illinois residents can subtract certain medical debt relief from state taxable income. The relief must come from a nonprofit coordinator under the Medical Debt Relief Act and be included in federal adjusted gross income.

Sales tax returned with refunds

When a retailer refunds the price of a returned item, the retailer must also refund the sales tax collected on it. The retailer can subtract that tax from other use tax due only if it already sent the tax to the Department of Revenue.

Some local taxes must be canceled

A municipality must immediately adopt an ordinance canceling taxes imposed under the specified redevelopment-law provisions. Residents and businesses in places where those taxes were in effect may pay less. The law does not state the tax amounts or identify the affected municipalities.

Some vehicle purchases avoid motor tax

Beginning June 16, 2025, the motor vehicle tax does not apply when the vehicle’s use is exempt under Section 3-5 of the Use Tax Act. The law does not state the amount saved.

Temporary cap on cigar taxes

From January 1, 2027, through December 31, 2029, Illinois tax on a covered cigar cannot exceed 75 cents. The cap does not apply to little cigars. Buyers save only if sellers pass along the tax reduction.

Businesses can claim excess tax payments

When a payment exceeds the tax shown on an original monthly return under the listed Illinois tax laws, a taxpayer can apply the extra amount to later tax bills. If the taxpayer asks, the Department of Revenue must issue a credit record within 30 days after payment. The credit record can be assigned to a similar taxpayer under those laws.

More weight options for hauling trucks

Some three-axle hauling trucks no longer need to meet vehicle age or first-registration-date rules. For certain axle spacing, the law lists both a 36,000-pound combined allowance and a 34,000-pound limit, so how they fit together is unclear. Qualifying sewer-cleaning trucks can carry up to 22,000 pounds on one axle, 40,000 pounds on a tandem axle, and 54,000 pounds total, except on interstate highways. Certain five-axle combinations can carry up to 20,000 pounds on one axle, 34,000 pounds on a tandem axle, and 72,000 pounds total.

Credit for excess fuel tax payments

A motor-fuel retailer receives a credit memorandum for any part of its eligible Section 2d credit that exceeds its tax liability for the filing month. The law does not set a fixed credit amount.

Counties gain some utility equipment authority

Counties can set rules for some public utility distribution equipment because the Messages Tax Act no longer blocks that authority. Restrictions remain for utilities subject to two other tax laws and for equipment on railroad rights-of-way.

More tax money for clean air

Since July 1, 2011, Illinois has sent 80% of net tax revenue from qualifying sorbents to its Clean Air Act Permit Fund. The sorbents must be used in Illinois to meet state or federal clean-air rules. Combined deposits from the listed tax acts cannot exceed $2 million per fiscal year. Illinois also transfers money to its Underground Storage Tank Fund based on the fund’s certified prior-year deficit, up to $18 million per fiscal year.

Longer private management for Lottery

The state can hire a private manager for the Illinois Lottery for up to 13 years, including renewals. The previous maximum was 10 years. This change affects state contracts, not household lottery eligibility or taxes.

Sports pools can cross state lines

Illinois sports wagering licensees can offer pools with bettors outside Illinois when every jurisdiction involved allows the pool and its rules are followed. The law calculates Illinois adjusted gross receipts by subtracting Illinois’s share of pool winnings from Illinois wagers. The share uses Illinois wagers as a portion of all pool wagers, rounded to the nearest 0.01%.

Arts businesses keep and carry tax credits

Illinois extends qualifying live theater tax credits to tax years beginning before January 1, 2039. Starting June 30, 2025, unused funds from one theater credit allocation can shift to commercial Broadway touring shows. Beginning July 1, 2026, music credit recipients claim the credit in the year their award certificate is issued. Unused music credit can carry forward for five tax years.

Construction tax credits for major projects

Qualifying taxpayers can claim income tax credits for construction jobs tied to Enterprise Zone projects or High Impact Businesses. The credits cannot reduce a tax bill below zero, and unused credit can carry forward to later years. The law does not state the credit amounts here.

Historic River Edge projects keep a tax credit

A qualifying historic rehabilitation in a River Edge Redevelopment Zone earns a credit worth 25% of eligible costs. The work must follow a qualified plan, cost at least $5,000, and exceed the building’s adjusted basis when the plan begins. The credit applies to qualifying tax years ending before January 1, 2034.

Local governments cannot tax targeted ads

Illinois reserves taxes on targeted advertising services to the state. Home-rule municipalities cannot tax sales of these services, and home-rule counties cannot impose specified taxes on their sale or use. The law does not say whether this limit on local taxes changes household prices.

Lower fees for tobacco permits

Manufacturers and other covered applicants pay no application fee for the specified initial or renewal permits. People aggrieved by covered Department of Revenue decisions have 30 days after notice to protest and request a hearing, up from 20 days. The appeal change covers specified manufacturer-representative and cigarette licensing decisions.

Lower state taxes on some foreign income

For tax years ending on or after December 31, 2025, Illinois taxpayers can subtract 50% of certain foreign income from Illinois taxable income. The subtraction covers qualifying global intangible low-taxed income or net controlled foreign corporation tested income under federal rules.

More sales tax money for local governments

Illinois makes monthly deposits to the Local Government Tax Fund. The deposits include all net revenue from the 1% rate, 16% of net revenue from the 6.25% general rate, and 80% of net revenue from the 1.25% motor-fuel and gasohol rate. Special rules apply to some aviation-fuel sales and sales-tax-holiday items.

One-time $20 million road fund transfer

On June 1, 2027, Illinois transfers $20 million in motor fuel and gasohol tax revenue to the Road Fund. Required payments to other funds come first. The transfer supports road funding rather than making a direct household payment.

Some personal property leases get tax breaks

Beginning January 1, 2025, some leases of tangible personal property qualify for state sales or use tax exemptions. The property must be covered by a listed state exemption. The law does not name the property types or state the amount saved.

Some remote retailers get a simpler tax rate

Some sales by remote retailers can qualify for the program’s 1.75% simplified tax rate. Taxable liquor remains excluded, but the exclusion for other alcoholic beverages is removed. The law does not state an effective date or a retailer’s savings.

Some sales taxes fund capital projects

Illinois deposits an estimated 80% of net sales-tax revenue from candy, grooming and hygiene products, and soft drinks into the Capital Projects Fund. The rule applies to products taxed at the 6.25% rate after moving from the 1% rate. It does not change household tax rates.

Use tax breaks for projects and businesses

Illinois exempts qualifying purchases from use tax in several settings. Examples include property leased to government bodies, equipment for permitted nonprofit water systems, aircraft repair materials, convention hall projects, rental merchandise, and purchases exempt under federal law. Certified data centers and their project partners also qualify for specified equipment and software; licensed software can qualify when its written license meets the law’s rules. These exemptions have specific eligibility limits, and the law does not state the savings.

Court users pay more for covered filings

People paying specified civil filing or court appearance fees pay an added $5 for each covered fee. The money goes to the Guardianship and Advocacy Fund.

Higher fees to file civil cases

Illinois raises maximum fees for filing civil cases and court appearances. Filing maximums include $371 or $321 under Schedule 1, and $362 under Schedule 2 in the largest counties. Appearance maximums include $235 or $196, depending on the county and schedule. Some local governments and school districts in the largest counties have lower maximums; the court schedule sets the actual fee.

Owners pay to destroy forfeited goods

When property covered by these laws is forfeited and destroyed, its owner or the person who possessed it must pay the destruction cost. This applies to cigarettes, cigarette machines, tobacco products, vending devices, and other covered forfeited property. The law does not state the amount.

Some fantasy contest losses cannot be recovered

Illinois’s gambling-loss recovery law does not allow recovery of losses from single-player fantasy contests against an operator before this Act took effect. It also excludes losses from fantasy contests conducted under the Sports Wagering Act’s fantasy contest rules.

Deferred property taxes become first lien

Deferred property taxes, taxes paid by the Department of Revenue, related interest, and costs become a first lien on the property. The lien stays ahead of other liens until the amounts are paid.

Endowment gifts face a tax addback

A taxpayer who claims an Illinois Gives tax credit for an endowment gift must add any federal deduction for that same gift to Illinois taxable income. This limits the tax benefit from claiming both.

Illinois taxes some excluded stock gains

For tax years ending on or after December 31, 2026, Illinois taxpayers must add gains excluded from federal income under the specified stock-gain rule to Illinois taxable income. The change can raise state income tax for affected investors.

Local grocery taxes cover more sales

Beginning January 1, 2026, a county that adopts the grocery occupation tax charges 1% on covered sales outside municipalities. A matching 1% service tax applies when groceries are transferred as part of a service sale in that area. In places with applicable municipal or transit taxes, some alcoholic drinks beyond liquor taxable under state liquor law may no longer fall under the broad alcohol exclusion. The local rates and whether a retailer passes the tax on vary by tax and location.

Local taxes extend to property leases

Beginning January 1, 2025, certain local taxes can apply to tangible-property leases that are in effect, start, or renew on or after that date. The rules cover specified local taxes, including flood-prevention and park-district taxes. The tax applies only in a jurisdiction with the relevant tax, and the law does not state the rate or who ultimately pays it.

Metro East sales tax may rise

The Metro East transit district can raise its sales and use tax from 0.25% to 0.75% only if voters approve. If approved, the increase starts on January 1 or July 1 after the required filing. Buyers pay more tax on covered purchases in the district.

Metro-East service tax covers property transfers

The Metro-East service occupation tax applies at the same rate as the related district tax to the selling price of tangible property transferred as part of a service sale in the District. Customers may bear some of the tax through service prices. The rate is not stated here.

New tax on digital asset services

Beginning January 1, 2027, Illinois charges a 0.2% tax on the value of a digital asset involved in covered business activity received in Illinois. Covered activity includes exchanging, transferring, or storing an asset for a customer. Federal government services and business protected by federal interstate-commerce law are excluded. Illinois brokers must collect the tax; if a broker does not charge it, the customer must pay by the 20th day of the following month.

Penalties for untaxed tobacco purchases

Buying tobacco from an unlicensed seller creates a presumption that the tax was not paid. The Department of Revenue can assess the tax, penalties, and interest. The penalty is $1,000 for a first violation and $3,000 for each later violation.

Tax liens stay during late hearings

If Illinois grants a late tax hearing after an income tax lien has attached, the lien stays in place. It is reduced only if the final tax assessment is reduced after the hearing or review.

Tax on leases of personal property

Beginning January 1, 2025, a taxable lease of personal property is subject to Illinois’s 6.25% use tax rate unless another rule applies. For example, a taxable $100 lease payment has $6.25 in tax.

Transit board can raise local sales taxes

The Northern Illinois Transit Authority Board can raise certain local sales and service taxes by ordinance; the increases are not automatic. In Cook County, maximum rates include 1.5% for specified food and property transfers and 1.25% for other covered sales or transfers. In DuPage, Kane, Lake, McHenry, and Will counties, some retail, service, and use taxes can rise to 1%. A separate Cook County use tax can reach 1.25% for covered property bought outside the metropolitan region and titled or registered with an Illinois agency. Special airport-purpose limits apply to aviation fuel.

Fantasy contest operators pay license fees

Fantasy contest operators pay license fees based on their patron count in the prior 365 days. Operators with 7,500 or fewer patrons pay $500 for an application and initial license, then $300 for renewal. Larger operators pay $7,500 initially and $5,000 for renewal. Licenses last two years, and renewal fees are due within 30 days of renewal.

Large tax collectors make more frequent payments

Tax collectors meeting either threshold must make prepaid-tax payments on the 7th, 15th, 22nd, and last day of each month. One rule applies when average collections exceed $25,000 a month over the prior two complete quarters; another applies when they exceed $20,000 over the prior four complete quarters. Installments use stated shares of current-month or prior-year same-month tax liability. The rules change payment timing, not the stated tax liability.

New reporting rules for tobacco sellers

Beginning January 1, 2027, tobacco distributors must report and keep records of product costs on monthly tax returns. Returns are due by the 15th and cover the previous month; cost reporting excludes little cigars. The state can also require other reasonable information. Existing sales-tax and penalty rules also apply to remote tobacco sellers when they do not conflict with the tobacco tax law.

New tobacco rules for remote sellers

Beginning January 1, 2027, remote tobacco sellers meeting the $100,000 Illinois sales threshold must get a state license for each business location and renew it yearly. They must check buyers’ ages through an independent service and keep specified records. Beginning February 1, 2027, covered sellers must file monthly returns by the 15th and report and remit tax. Invoices must show the seller’s license number; violations can bring license revocation and civil penalties of up to $1,000 for a first violation and $3,000 for each later violation.

Retail lessors must file sales tax returns

Beginning January 1, 2025, people who lease tangible personal property at retail in Illinois must file the required sales-tax return. Retail lessors generally file by the 20th day of the next month. They remit tax only on the selling price received during that return period.

Retailers’ holiday tax payment calculations change

For retailers required to make quarter-monthly sales-tax payments, Illinois calculates payment status as if the 1.25% holiday rate reduction had not happened. For payments due July 1, 2027 through June 30, 2028, the state also uses that approach for the 25%-of-prior-year-liability installment calculation. These rules affect payment calculations, not the holiday tax rate customers pay.

Tobacco sellers face tighter license rules

Tobacco distributors, retailers, and other license applicants face new application and reporting rules. Some applications and reports must be filed electronically, and applicants must verify information under penalty of perjury. Licensees must report changes, including ownership changes, within 30 days; cigarette machine operator applicants pay $250 for an initial license and each renewal. The Department of Revenue can suspend or revoke licenses after notice and a hearing, and can ask a court to stop sellers who refuse to comply.

Higher fees for pollution board filings

A covered filing with the Illinois Pollution Control Board costs $250, up from $75. Beginning July 1, 2027, the fee also rises each year with inflation. The higher fees apply to specified petitions, including requests for variances and permit reviews.

State can seize illegal tobacco products

Authorized Illinois revenue employees can seize tobacco products or vending devices that violate the law or contain products with unpaid taxes. After a hearing, the state takes seized property if the department makes one of the required findings about licensing, unlawful possession, or unpaid tax. A person can also waive the hearing and agree to forfeiture.

Higher fees for required police escorts

When the state requires a State Police escort for a movement, the applicant pays $125 per hour for each State Police vehicle. The charge is at least $500 per vehicle. The separate transportation department fee does not change.

Some state funds lose tax revenue

The Personal Property Tax Replacement Fund no longer receives specified Messages Tax Act revenue. The Coal Technology Development Assistance Fund also stops counting that revenue when calculating transfers. The law does not state how much money is removed or how payments change.

New business agreements end after 2028

The responsible Department cannot enter into new agreements under the Act after December 31, 2028. Businesses seeking a new agreement must have it entered by that date. The law does not say existing agreements end then or identify the program’s financial terms.

County service taxes cover more transactions

When a county imposes the underlying tax, a matching service tax applies to tangible property transferred as part of a service sale. The change removes the limit that the property be transferred within the county. The law does not state the rate or any household cost.

Digital asset tax and broker rules

Beginning January 1, 2027, Illinois taxes covered digital asset business activity at 0.2% of the purchase price. An out-of-state broker reaches the stated registration threshold when sales to Illinois customers total at least $100,000 over the prior 12 months. Brokers collect and send in the tax, file and pay monthly by the 20th for the prior month, and keep records of sales and customer locations. Listed violations can be Class 3 felonies, and prosecution must begin within five years.

Extra tax on gaming asset sales

For tax years 2019 through 2027, certain sales of assets tied to horse-racing or gaming licenses face an extra tax. The surcharge equals the federal income tax on the covered income. The law excludes specified transfers, including certain family or bankruptcy transfers and some transfers with no recognized gain or loss.

Higher taxes on gaming operators

Sports exchange wagers carry a 1.75% tax, rising to 3.5% after a licensee conducts 5 million wagers in a fiscal year. Beginning July 1, 2026, fantasy contest operators pay 15% of adjusted gross receipts. From 2019 through 2027, covered horse-racing and gaming licensees also pay a surcharge on specified asset-sale income equal to the federal tax tied to that income.

Liquor businesses pay taxes by strength

Illinois taxes covered liquor manufacturers and importing distributors by alcohol strength. Cider with 0.5% to 7% alcohol is taxed at $0.231 per gallon. Liquor with up to 20% alcohol is taxed at $1.39 per gallon, and liquor above 20% is taxed at $8.55 per gallon. Beer is not included, and any effect on store prices depends on how businesses reflect the tax.

Local taxes apply to more property leases

Beginning January 1, 2025, some local taxes apply to leases of tangible personal property. This includes leases already in effect, newly made, or renewed on or after that date. The rule applies where a local government has or later imposes the tax. The law does not state the tax rates.

Marketplace service sales face a tax base rule

Beginning January 1, 2026, qualifying service sales through a marketplace are taxed at 6.25% of at least half the customer’s total bill. The taxable amount cannot be less than the stated cost of the transferred property. The law does not say whether businesses pass the tax on to customers.

Retailers get smaller tax collection discounts

For returns due on or after January 1, 2025, Illinois caps retailers’ tax collection discounts at $1,000 per month for nontransaction returns. A separate $1,000 monthly cap applies to transaction returns, including applicable local taxes reported on the same return. The cap can reduce a retailer’s discount but does not change the tax buyers owe.

Separate tax filings for trailer leases

Beginning January 1, 2025, lessors must file a separate electronic return for taxable leases of trailers that must be registered with an Illinois agency. Semitrailers are excluded. Lessors must report the period’s receipts on one return and file and pay by the 20th day after each monthly, quarterly, or yearly reporting period.

Targeted ad tax and filing rules

Beginning January 1, 2027, Illinois taxes targeted advertising services at 10% of gross receipts sourced to the state. Providers with more than $1 million in Illinois receipts over a rolling 12 months must register. Covered providers file and pay monthly by the 20th for the prior month, keep service and user-location records, and use those records to determine where users are located. Listed violations, including failure to file or keep records, can be Class 3 felonies, with prosecution allowed within five years.

Ethanol fuel tax break ends

Majority blended ethanol fuel sales remain exempt from Illinois use tax through December 31, 2028. After that date, tax applies to 100% of sale proceeds, which can raise costs for buyers.

Tire fee money goes to state funds

Beginning July 1, 2026, retailers collect a $2.50 fee for each new or used tire sold and delivered in Illinois. The total customer fee matches the former combined fees. Retailers may keep 10 cents per tire if they file and pay on time; the state divides the fee among three funds.

More tax choices for partnerships

For tax years ending on or after December 31, 2026, an electing partnership can choose a Department-approved method for calculating its pass-through tax base. One method uses the full income share assigned to Illinois-resident partners. Another annual election taxes only income tied to Illinois and applies to all partners; that choice cannot be changed for the year.

New rules for tobacco company representatives

Cigarette manufacturers seeking approval to keep representatives in Illinois must apply electronically and promise to follow the tobacco manufacturers’ escrow law. Tax debt without an approved payment agreement and other listed problems can block approval or an individual’s eligibility. A felony conviction alone is not an automatic bar. Approval lasts no more than one year, may be renewed, and cannot be transferred.

Remote tobacco sellers get a tax option

Beginning January 1, 2027, the Department of Revenue can let some remote sellers that are not otherwise subject to the tobacco-products tax remit tax on covered sales. The seller must provide security the Department considers adequate and pay tax based on the products’ actual cost or listed actual cost. The tax-remittance license is free.

Retailers’ sales tax discounts face limits

For qualifying sales-tax-holiday sales taxed at 1.25%, retailers can count the tax that would have applied at 6.25% when calculating their collection discount. They must file returns as required to qualify, and existing discount limits still apply. For returns due on or after January 1, 2025, discounts are capped at $1,000 per month for each of two return groups. The caps include applicable local taxes reported on those returns.

Cities can issue some bonds without votes

Illinois municipalities can issue bonds under the Statewide Innovation Development and Economy Act without putting the bond question to voters. Voter-approval rules in the Act still apply in some cases. The law states no bond amount.

Court clerk law section repealed

Illinois repeals a section of the Clerks of Courts Act. The available text does not explain what the section required or allowed, so its effect on court fees or households is unclear.

Fantasy contests bar insiders

Specified athletes and sports workers cannot enter contests tied to events they participate in or know about through nonpublic or exclusive information. A fantasy contest company’s key people and employees cannot enter contests offered by that company. These limits restrict insiders and support fairer contests for other players.

Chicago casino extensions carry a fee

An applicant for the specified Chicago casino license must present its proposal publicly, and a local government must post a summary online before sending required certifications to the state gaming board. The board can extend a qualifying temporary casino’s operation by up to 18 months, then allow no more than two additional three-month extensions. The licensee must show good cause and pay a $10,000 fee.

DuPage hotel taxes support tourism

Until January 1, 2029, qualifying DuPage County municipalities must spend at least 75% of hotel-tax revenue on tourism, conventions, or attracting overnight visitors. They can use the rest for economic development or capital projects. The rule applies to municipalities tied to a qualifying county tourism bureau.

Fantasy operators get permits and audits

Fantasy contest operators already serving Illinois customers can keep operating temporarily while the state sets rules and reviews licenses. To receive a temporary permit, an operator must apply and pay the required application fee within 90 days after the rules take effect. Licensed operators must hire an independent accountant for an annual audit, test and certify their platforms before contests begin and each year, and keep records for the required period.

Longer temporary casino operations

The Illinois Gaming Board can extend a qualifying licensee’s temporary gaming operation by up to 48 months. The licensee must show good cause and pay a $10,000 fee. The extension offers more operating time but adds a fee.

New options for online sports betting

The Illinois Gaming Board can issue licenses for online and mobile sports betting. The law removes the former requirement that three licenses be awarded through an open, competitive process. This changes how operators can receive licenses; it does not change who may place a wager.

STAR districts redirect local sales taxes

Beginning July 1, 2026, qualifying local sales-tax revenue from STAR bond districts is transferred monthly to the STAR Bonds Revenue Fund. For some transfers, 3% goes to a state fund for tax administration. Metro East transfers require state certification, and the district must tax real property.

Aviation fuel taxes fund state programs

For aviation fuel sold on or after December 1, 2019, Illinois directs portions of sales-tax revenue and estimated refunds to state aviation funds. These deposits apply only while the named federal revenue-use rules bind Illinois. The provision changes where tax money goes, not the tax rate.

Hotel platforms take on some hotel taxes

Beginning July 1, 2026, a qualifying hotel marketplace facilitator pays the hotel tax on covered room rentals instead of the hotel operator. An out-of-state re-renter with no other Illinois presence is subject to the rule after Illinois room-rental receipts reach $100,000 in a 12-month period. Before July 1, 2026, hotel operators remain liable on rooms rented through re-renters. The law changes who remits the tax, not the stated tax amount.

Illinois changes renewable fuel tax rules

From January 1, 2024, through December 31, 2030, biodiesel, renewable diesel, and certain blends are taxed under a specified Illinois rule. Covered blends contain more than 10% and no more than 99% biodiesel material. Illinois also removes a referenced rule from the motor fuel and tobacco-products tax laws. The text does not state the resulting tax amount or household price effect.

Illinois ends its Messages Tax Act

Illinois repeals the Messages Tax Act, ending the tax imposed under that law. The law also removes that tax from the list used for replacement-tax revenue and changes a utility-charge exception tied to the tax. Other named tax exceptions remain. The text does not give a tax rate or explain how these changes affect household bills.

Liquor tax money split between funds

Beginning July 1, 2025, Illinois sends 43% of the revenue from the tax imposed under Section 8-1 to the Capital Projects Fund and 57% to the General Revenue Fund. The law changes where the tax money goes, not the tax rate.

Local taxes help fund STAR bonds

Illinois sends certain local sales and grocery tax money collected in STAR bond districts to the STAR Bonds Revenue Fund instead of distributing it to cities or counties. Transfers use collections from two months earlier. For some local sales taxes, transfers begin July 1, 2026, after state certification; the grocery-tax provision gives no start date.

More funding for state tax auditors

Illinois sets aside a monthly amount for its Tax Compliance and Administration Fund equal to one-twelfth of 5% of specified prior-year audit receipts. The money can support additional tax auditors and compliance staff only if it is appropriated. This does not directly change household tax rates or bills.

New destinations for sales tax revenue

Illinois sends net revenue from the part of the 15% rate above 5% to the State and Local Sales Tax Reform Fund. Revenue from the 5% portion follows the distribution rules for the 5% portion of the 6.25% general rate. These rules change where specified tax money goes, not the tax rate.

Some local transportation taxes cannot overlap

In the Regional Transportation Authority’s area, specified transportation and parking taxes cannot overlap with certain sales taxes. When one of those sales taxes takes effect, the earlier taxes end. They generally cannot return unless the later tax ends for a reason other than a Board ordinance. The net tax change depends on which local taxes apply.

State tax money split between funds

Beginning July 1, 2025, the state puts 75% of the remaining money it receives under the Act into the General Revenue Fund and 25% into the Common School Fund. Other required distributions come first. The law changes where the money goes, not household tax bills.

Sponsors & Cosponsors

Sponsor

  • Celina Villanueva

    Democratic • Senate

Cosponsors

  • Curtis J. Tarver, II

    Democratic • House

  • Elgie R. Sims, Jr.

    Democratic • Senate

  • Mark L. Walker

    Democratic • Senate

  • Mary Edly-Allen

    Democratic • Senate

  • Mattie Hunter

    Democratic • Senate

  • Mike Porfirio

    Democratic • Senate

  • Rachel Ventura

    Democratic • Senate

Roll Call Votes

All Roll Calls

Yes: 306 • No: 120

Senate vote • 6/1/2026

House Floor Amendment No. 1 Senate Concurs

Yes: 36 • No: 19

Senate vote • 6/1/2026

House Floor Amendment No. 2 Senate Concurs

Yes: 36 • No: 19

House vote • 5/31/2026

House Floor Amendment No. 1 Recommends Be Adopted Rules Committee;

Yes: 5 • No: 0

House vote • 5/31/2026

House Floor Amendment No. 2 Recommends Be Adopted Rules Committee;

Yes: 3 • No: 2

House vote • 5/31/2026

Motion Prevailed

Yes: 72 • No: 39

House vote • 5/31/2026

Third Reading - Short Debate - Passed

Yes: 73 • No: 41

House vote • 5/13/2026

Do Pass / Short Debate Revenue & Finance Committee;

Yes: 18 • No: 0

Senate vote • 4/14/2026

Third Reading - Passed;

Yes: 55 • No: 0

Senate vote • 3/25/2026

Do Pass Financial Institutions;

Yes: 8 • No: 0

Actions Timeline

  1. Added as Co-Sponsor Sen. Mary Edly-Allen

    6/30/2026Senate

  2. Public Act . . . . . . . . . 104-0468

    6/16/2026Senate

  3. Effective Date July 1, 2026; Some Provisions

    6/16/2026Senate

  4. Effective Date June 16, 2026; Some Provisions

    6/16/2026Senate

  5. Governor Approved

    6/16/2026Senate

  6. Sent to the Governor

    6/10/2026Senate

  7. Passed Both Houses

    6/1/2026Senate

  8. Senate Concurs

    6/1/2026Senate

  9. 3/5 Vote Required

    6/1/2026Senate

  10. House Floor Amendment No. 2 Senate Concurs 036-019-000

    6/1/2026Senate

  11. House Floor Amendment No. 1 Senate Concurs 036-019-000

    6/1/2026Senate

  12. House Floor Amendment No. 2 Motion to Concur Be Approved for Consideration Assignments

    5/31/2026Senate

  13. House Floor Amendment No. 1 Motion to Concur Be Approved for Consideration Assignments

    5/31/2026Senate

  14. House Floor Amendment No. 2 Motion to Concur Referred to Assignments

    5/31/2026Senate

  15. House Floor Amendment No. 2 Motion to Concur Filed with Secretary Sen. Celina Villanueva

    5/31/2026Senate

  16. House Floor Amendment No. 1 Motion to Concur Referred to Assignments

    5/31/2026Senate

  17. House Floor Amendment No. 1 Motion to Concur Filed with Secretary Sen. Celina Villanueva

    5/31/2026Senate

  18. Added as Chief Co-Sponsor Sen. Elgie R. Sims, Jr.

    5/31/2026Senate

  19. Placed on Calendar Order of Concurrence House Amendment(s) 1, 2 - May 31, 2026

    5/31/2026Senate

  20. Secretary's Desk - Concurrence House Amendment(s) 1, 2

    5/31/2026Senate

  21. Motion to Reconsider Vote - Withdrawn Rep. Will Guzzardi

    5/31/2026House

  22. Motion Filed to Reconsider Vote Rep. Will Guzzardi

    5/31/2026House

  23. Third Reading - Short Debate - Passed 073-041-000

    5/31/2026House

  24. Placed on Calendar Order of 3rd Reading - Short Debate

    5/31/2026House

  25. House Floor Amendment No. 2 Adopted

    5/31/2026House

Bill Text

  • Engrossed

    PDF

  • Enrolled

    PDF

  • House Amendment 1

    PDF

  • House Amendment 2

    PDF

  • Introduced

    PDF

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