Illinois Laws Favor Large Corporations Over Small Local Businesses

In 2014, Illinois’ economic development initiatives will come under increased scrutiny, and possibly legislative review as well. Last week Speaker of the House Michael Madigan caused a fury in Springfield when he refused to conduct the votes on certain proposed bills that provided tax breaks for two corporations who have threatened to leave Illinois if the bills were not passed. Madigan even went on record stating that the previous tax breaks enjoyed by corporations conducting business  in Illinois were essentially “tax giveaways for corporate CEOS.” The small business attorneys here at The Giearch Law Firm are carefully watching Springfield in order to determine what effects the disputes over economic tax breaks will have on the local small business community.

Large Corporations IllinoisMadigan’s refusal to hold votes for two specific corporate tax break bills indicates a shift in the treatment of big corporations in Illinois. Currently, large corporations such as Motorola, Sears, and Ford Motor Co. receive tax credits from Illinois, which allow these companies to pay little to no state income taxes while operating in Illinois. These tax credits have been granted under the Illinois Economic Development for A Growing Economy Credits (“EDGE”) Program. The purpose of the EDGE program is to incentivize large corporations to conduct business in Illinois by reducing the amount of state taxes owed by a corporation. Since its inception in 2001, EDGE credits have been given to 277 companies. The Department of Commerce and Economic Opportunity estimates that companies receiving EDGE credits have created over 40,000 new jobs in Illinois, and brought more than $8.5 billion dollars into the state of Illinois.

The issue that state representatives such as Madigan are trying to fight does not specifically concern the EDGE tax credits awarded to corporations doing business in Illinois. The issue is the other tax and economic incentives that these large corporations have been receiving, in addition to having to pay little to no state taxes for business conducted in Illinois. In fact Sears, Motorola, and Ford have all received special legislation that allows them to retain a significant portion of the personal state income taxes that their employees pay. In order to get these bills passed, corporations have spent significant amounts of money, using lobbyists to push through legislation in their favor. Even worse is the fact that corporations often use the threat of taking their business to other states in order to guarantee that the legislation for which they lobby is passed. Essentially, local small businesses in Illinois cannot afford to receive the same special treatment the large corporations are able to obtain by using lobbyists and threats to push economic legislation through in Springfield.

House Representative Madigan’s refusal to hear votes on legislation intended to benefit large corporations is a triumph for small business owners. By refusing to grant special treatment for large companies with full coffers, the small businesses in Illinois will have a more leveled playing field and the same opportunities that their corporate counterparts are currently enjoying. Call the small business attorneys at The Gierach Law Firm here in Naperville, IL to discuss the EDGE program, economic incentives, and other tax break programs that could benefit your small business.