Illinois Policies Make it Difficult for Small Business Owners to Thrive

Illinois is undoubtedly home to some of the nation’s most well-known corporations. Home to Boeing, Exelon, Johnson & Johnson, and Sara Lee, Illinois has many companies operating within its borders. These large corporations are subject to some of the country’s highest corporate tax rates. Lucky for them, large corporations can pay their way out of most barriers to do business in Illinois. Sadly, local small business owners do not have the same luxury as their large corporate counterparts.

Significant Barriers to Play in Illinois

 The statistics regarding the cost of doing business in Illinois are staggering. In a recent article, the tax rates of Florida and Illinois were both compared side by side in order to illustrate why Office Depot ultimately decided to take their corporate office to Florida instead of Illinois. For example, Illinois has a minimum wage of $8.25 per hour, while Florida has a $7.70 per hour minimum wage. Florida has a corporate tax rate of merely 5.5 percent, while Illinois’ is almost double that amount at 9.5 percent. As a result, Illinois has the fourth highest corporate tax rate and minimum wage rate. These high rates indicate that doing business in Illinois will definitely cost you. For many large corporations it is worth it to foot the large bill. This is because Illinois has a highly developed commercial industry, ample space, and a very large and diverse work force. Illinois also provides special tax credits for certain larger companies.

 Illinois’ complicated and expensive corporate tax structure creates a barrier for small enterprises looking to operate in Illinois. Large corporations can both afford and pay higher Illinois tax rates. They can also hire expensive attorneys to lobby Springfield on their behalf in order to procure corporate tax breaks. As a result, how can it be surprising that Illinois has the 11th lowest rate of entrepreneurship in the United States? The competitive advantage that large corporations gain in Illinois does not really benefit Illinois as a whole. The U.S. Small Business Administration found that small business plays a big role in fostering growth, competition and creating jobs. In the past 15 years, small businesses have been responsible for the creation over almost two thirds of the country’s new jobs. The fact that around 25 percent of small businesses fail in the first year, coupled with expenses that come with operating a business in Illinois, make it no surprise that local small business owners have it tough in Illinois.

 Small business owners in Illinois face significant barriers to operating. However, these barriers were not insurmountable for many small businesses that currently thrive and operate in Illinois. Contact the business law attorneys here at the Gierach Law Firm, in Naperville, Illinois in order to discuss all of the services we can provide for your small business.