DOMESTIC FRANCHISE TAX-REPEAL

Illinois General Assembly - Full Text of HB5526

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104TH GENERAL ASSEMBLY
State of Illinois
2025 and 2026
HB5526

Introduced 2/13/2026, by Rep. Brandun Schweizer

SYNOPSIS AS INTRODUCED:

805 ILCS 5/15.35

from Ch. 32, par. 15.35

Amends the Business Corporation Act of 1983. Provides that, on or
after January 1, 2027 and prior to January 1, 2028, the first $100,000 in
liability is exempt from the franchise tax payable by domestic
corporations. Provides that, in the case of a domestic corporation, no
payment is required for a franchise tax that would have been due and
payable on or after January 1, 2028. Repeals the provision concerning
franchise taxes payable by domestic corporations on January 1, 2028.
Effective immediately.
LRB104 18039 SPS 31478 b

A BILL FOR

HB5526
LRB104 18039 SPS 31478 b
1

AN ACT concerning business.

2

Be it enacted by the People of the State of Illinois,
3
represented in the General Assembly:

4

Section 5.
The Business Corporation Act of 1983 is amended
5
by changing Section 15.35 as follows:

6

(805 ILCS 5/15.35)

(from Ch. 32, par. 15.35)
7

(Text of Section from P.A. 102-16, 103-8, and 103-592)
8

Sec. 15.35.
Franchise taxes payable by domestic
9
corporations.
For the privilege of exercising its franchises
10
in this State, each domestic corporation shall pay to the
11
Secretary of State the following franchise taxes, computed on
12
the basis, at the rates and for the periods prescribed in this
13
Act:
14

(a) An initial franchise tax at the time of filing its
15

first report of issuance of shares.
16

(b) An additional franchise tax at the time of filing
17

(1) a report of the issuance of additional shares, or (2) a
18

report of an increase in paid-in capital without the
19

issuance of shares, or (3) an amendment to the articles of
20

incorporation or a report of cumulative changes in paid-in
21

capital, whenever any amendment or such report discloses
22

an increase in its paid-in capital over the amount thereof
23

last reported in any document, other than an annual

HB5526
- 2 -
LRB104 18039 SPS 31478 b
1

report, interim annual report or final transition annual
2

report required by this Act to be filed in the office of
3

the Secretary of State.
4

(c) An additional franchise tax at the time of filing
5

a report of paid-in capital following a statutory merger
6

or consolidation, which discloses that the paid-in capital
7

of the surviving or new corporation immediately after the
8

merger or consolidation is greater than the sum of the
9

paid-in capital of all of the merged or consolidated
10

corporations as last reported by them in any documents,
11

other than annual reports, required by this Act to be
12

filed in the office of the Secretary of State; and in
13

addition, the surviving or new corporation shall be liable
14

for a further additional franchise tax on the paid-in
15

capital of each of the merged or consolidated corporations
16

as last reported by them in any document, other than an
17

annual report, required by this Act to be filed with the
18

Secretary of State from their taxable year end to the next
19

succeeding anniversary month or, in the case of a
20

corporation which has established an extended filing
21

month, the extended filing month of the surviving or new
22

corporation; however if the taxable year ends within the
23

2-month period immediately preceding the anniversary month
24

or, in the case of a corporation which has established an
25

extended filing month, the extended filing month of the
26

surviving or new corporation the tax will be computed to

HB5526
- 3 -
LRB104 18039 SPS 31478 b
1

the anniversary month or, in the case of a corporation
2

which has established an extended filing month, the
3

extended filing month of the surviving or new corporation
4

in the next succeeding calendar year.
5

(d) An annual franchise tax payable each year with the
6

annual report which the corporation is required by this
7

Act to file.
8

On or after January 1, 2020 and prior to January 1, 2021,
9
the first $30 in liability is exempt from the tax imposed under
10
this Section. On or after January 1, 2021, and prior to January
11
1, 2024, the first $1,000 in liability is exempt from the tax
12
imposed under this Section. On or after January 1, 2024, and
13
before January 1, 2025, the first $5,000 in liability is
14
exempt from the tax imposed under this Section. On and after
15
January 1, 2025
and before January 1, 2027
, the first $10,000
16
in liability is exempt from the tax imposed under this
17
Section.
On or after January 1, 2027 and before January 1,
18
2028, the first $100,000 in liability is exempt from the tax
19
imposed under this Section. The provisions of this Section
20
shall not require the payment of any franchise tax that would
21
otherwise have been due and payable on or after January 1,
22
2028. There shall be no refunds or proration of franchise tax
23
for any taxes due and payable on or after January 1, 2028 on
24
the basis that a portion of the corporation's taxable year
25
extends beyond January 1, 2028.
26

This Section is repealed on January 1, 2029.

HB5526
- 4 -
LRB104 18039 SPS 31478 b
1
(Source: P.A. 102-16, eff. 6-17-21; 103-8, eff. 6-7-23;
2
103-592, eff. 6-7-24.)

3

(Text of Section from P.A. 102-282, 102-558, 103-8, and
4
103-592)
5

Sec. 15.35.
Franchise taxes payable by domestic
6
corporations.
For the privilege of exercising its franchises
7
in this State, each domestic corporation shall pay to the
8
Secretary of State the following franchise taxes, computed on
9
the basis, at the rates and for the periods prescribed in this
10
Act:
11

(a) An initial franchise tax at the time of filing its
12

first report of issuance of shares.
13

(b) An additional franchise tax at the time of filing
14

(1) a report of the issuance of additional shares, or (2) a
15

report of an increase in paid-in capital without the
16

issuance of shares, or (3) an amendment to the articles of
17

incorporation or a report of cumulative changes in paid-in
18

capital, whenever any amendment or such report discloses
19

an increase in its paid-in capital over the amount thereof
20

last reported in any document, other than an annual
21

report, interim annual report or final transition annual
22

report required by this Act to be filed in the office of
23

the Secretary of State.
24

(c) An additional franchise tax at the time of filing
25

a report of paid-in capital following a statutory merger

HB5526
- 5 -
LRB104 18039 SPS 31478 b
1

or consolidation, which discloses that the paid-in capital
2

of the surviving or new corporation immediately after the
3

merger or consolidation is greater than the sum of the
4

paid-in capital of all of the merged or consolidated
5

corporations as last reported by them in any documents,
6

other than annual reports, required by this Act to be
7

filed in the office of the Secretary of State; and in
8

addition, the surviving or new corporation shall be liable
9

for a further additional franchise tax on the paid-in
10

capital of each of the merged or consolidated corporations
11

as last reported by them in any document, other than an
12

annual report, required by this Act to be filed with the
13

Secretary of State from their taxable year end to the next
14

succeeding anniversary month or, in the case of a
15

corporation which has established an extended filing
16

month, the extended filing month of the surviving or new
17

corporation; however if the taxable year ends within the
18

2-month period immediately preceding the anniversary month
19

or, in the case of a corporation which has established an
20

extended filing month, the extended filing month of the
21

surviving or new corporation the tax will be computed to
22

the anniversary month or, in the case of a corporation
23

which has established an extended filing month, the
24

extended filing month of the surviving or new corporation
25

in the next succeeding calendar year.
26

(d) An annual franchise tax payable each year with the

HB5526
- 6 -
LRB104 18039 SPS 31478 b
1

annual report which the corporation is required by this
2

Act to file.
3

On or after January 1, 2020 and prior to January 1, 2021,
4
the first $30 in liability is exempt from the tax imposed under
5
this Section. On or after January 1, 2021 and prior to January
6
1, 2024, the first $1,000 in liability is exempt from the tax
7
imposed under this Section. On or after January 1, 2024, and
8
before January 1, 2025, the first $5,000 in liability is
9
exempt from the tax imposed under this Section. On and after
10
January 1, 2025
and before January 1, 2027
, the first $10,000
11
in liability is exempt from the tax imposed under this
12
Section.
On or after January 1, 2027 and before January 1,
13
2028, the first $100,000 in liability is exempt from the tax
14
imposed under this Section. The provisions of this Section
15
shall not require the payment of any franchise tax that would
16
otherwise have been due and payable on or after January 1,
17
2028. There shall be no refunds or proration of franchise tax
18
for any taxes due and payable on or after January 1, 2028 on
19
the basis that a portion of the corporation's taxable year
20
extends beyond January 1, 2028.
21

This Section is repealed on January 1, 2029.
22
(Source: P.A. 102-282, eff. 1-1-22; 102-558, eff. 8-20-21;
23
103-8, eff. 6-7-23; 103-592, eff. 6-7-24.)

24

Section 99.
Effective date.
This Act takes effect upon
25
becoming law.

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