Illinois has a fair and equitable system of taxes for Corporations and Businesses. The Constitution states any taxes levied on businesses must be kept within a certain ratio of taxes levied on individuals. The ratio is 8 to 5. Therefore, the burden of taxation cannot be shifted from individuals to businesses without a change in the constitution.

The major funding of Illinois’ state government is based on the income tax on businesses and individuals and the 5% state sales tax. Local governments and schools rely on real property taxes and local sales taxes for up to 2.5% for their support.

Corporations are required to pay an annual franchise tax whether the corporation is domestic or foreign. This tax is calculated at 1/10 of 1% (.001) of the paid-in-capital and surplus (minimum of $25.00).

The income tax for corporation is 7.3%, which includes the 2.5% personal property replacement tax. It is based upon the Internal Revenue form 1140 net income.

In Lawrence County, Illinois, the real estate taxes are based on 33.3% of the true cash value of the property. The levy for 2000 taxes payable in 2001 is $8.22710 per $100 valuation. An owner of a $100,000 house will pay $2,454.39 in property taxes. All property is assessed the same, whether it is residential or business. There are exemptions for senior citizens, homeowners, and improvements.

There are no taxes on personal property (machinery, inventory, etc.) in Illinois.

Sales taxes collected in Lawrence County are 6.25% of the sales price. Of that, 5% goes to the State of Illinois, 1% goes to the municipalities and .25% goes to the County. Only retail stores selling goods are required to collect the sales tax. E-commerce sales in the state by companies located in the state are required to collect Illinois sales taxes. Out-of-state sales are exempted unless there is a tax agreement between Illinois and the state where the sale originated.

Workers Compensation paid by businesses is based upon the experience factor of a company. For a new company, the rate is $1.50 per $1,000 of a workers salary. For an established company, the rate can vary according to the occupation code number from $2.00 to $10.00 per $1,000.

Unemployment Insurance is based upon the first $9,000 of a workers salary. The new employers rate is $3.10 per $100. The average is about $2.50 per $100.

On January 1, 2000, more than 120 vehicle licensing fee increases took effect including a $30 increase in the purchase price of a standard passenger vehicle sticker from $48 to $78, and an increase in the vehicle title transfer fee from $13 to $65. These fee increases were part of the package to fund the $12 billion Illinois First Program in which over $8 billion will be used to repair highways and replace bridges that have been neglected in previous years.

For more specific information on taxes in Illinois, contact the Department of Commerce and Community Affairs, John Hamilton, at 217-785-2345. Or, contact the Lawrence County Industrial Development Council at 618-943-5219.