FRANCHISE TAX-REPEAL

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104TH GENERAL ASSEMBLY
State of Illinois
2025 and 2026
SB3441

Introduced 2/4/2026, by Sen. Dave Syverson

SYNOPSIS AS INTRODUCED:

805 ILCS 5/15.35

from Ch. 32, par. 15.35
805 ILCS 5/15.65

from Ch. 32, par. 15.65
805 ILCS 5/15.90

from Ch. 32, par. 15.90
805 ILCS 5/15.97

from Ch. 32, par. 15.97

Amends the Business Corporation Act of 1983. Provides that, in the
case of a domestic or foreign corporation, no payment is required for a
franchise tax that would have been due and payable on and after January 1,
2029. Provides that all amounts remaining in the Corporate Franchise Tax
Refund Fund shall be transferred to the General Revenue Fund no later than
December 31, 2030. Makes changes in provisions concerning the statute of
limitations. Repeals provisions concerning franchise taxes payable by
domestic and foreign corporations on January 1, 2030. Effective
immediately.
LRB104 16689 SPS 30093 b

A BILL FOR

SB3441
LRB104 16689 SPS 30093 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 Sections 15.35, 15.65, 15.90, and 15.97 as
6
follows:

7

(805 ILCS 5/15.35)

(from Ch. 32, par. 15.35)
8

(Text of Section from P.A. 102-16, 103-8, and 103-592)
9

Sec. 15.35.
Franchise taxes payable by domestic
10
corporations.
For the privilege of exercising its franchises
11
in this State, each domestic corporation shall pay to the
12
Secretary of State the following franchise taxes, computed on
13
the basis, at the rates and for the periods prescribed in this
14
Act:
15

(a) An initial franchise tax at the time of filing its
16

first report of issuance of shares.
17

(b) An additional franchise tax at the time of filing
18

(1) a report of the issuance of additional shares, or (2) a
19

report of an increase in paid-in capital without the
20

issuance of shares, or (3) an amendment to the articles of
21

incorporation or a report of cumulative changes in paid-in
22

capital, whenever any amendment or such report discloses
23

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

SB3441
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LRB104 16689 SPS 30093 b
1

last reported in any document, other than an annual
2

report, interim annual report or final transition annual
3

report required by this Act to be filed in the office of
4

the Secretary of State.
5

(c) An additional franchise tax at the time of filing
6

a report of paid-in capital following a statutory merger
7

or consolidation, which discloses that the paid-in capital
8

of the surviving or new corporation immediately after the
9

merger or consolidation is greater than the sum of the
10

paid-in capital of all of the merged or consolidated
11

corporations as last reported by them in any documents,
12

other than annual reports, required by this Act to be
13

filed in the office of the Secretary of State; and in
14

addition, the surviving or new corporation shall be liable
15

for a further additional franchise tax on the paid-in
16

capital of each of the merged or consolidated corporations
17

as last reported by them in any document, other than an
18

annual report, required by this Act to be filed with the
19

Secretary of State from their taxable year end to the next
20

succeeding anniversary month or, in the case of a
21

corporation which has established an extended filing
22

month, the extended filing month of the surviving or new
23

corporation; however if the taxable year ends within the
24

2-month period immediately preceding the anniversary month
25

or, in the case of a corporation which has established an
26

extended filing month, the extended filing month of the

SB3441
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LRB104 16689 SPS 30093 b
1

surviving or new corporation the tax will be computed to
2

the anniversary month or, in the case of a corporation
3

which has established an extended filing month, the
4

extended filing month of the surviving or new corporation
5

in the next succeeding calendar year.
6

(d) An annual franchise tax payable each year with the
7

annual report which the corporation is required by this
8

Act to file.
9

On or after January 1, 2020 and prior to January 1, 2021,
10
the first $30 in liability is exempt from the tax imposed under
11
this Section. On or after January 1, 2021, and prior to January
12
1, 2024, the first $1,000 in liability is exempt from the tax
13
imposed under this Section. On or after January 1, 2024, and
14
before January 1, 2025, the first $5,000 in liability is
15
exempt from the tax imposed under this Section. On and after
16
January 1, 2025
and before January 1, 2028
, the first $10,000
17
in liability is exempt from the tax imposed under this
18
Section.
On or after January 1, 2028 and before January 1,
19
2029, the first $100,000 in liability is exempt from the tax
20
imposed under this Section. The provisions of this Section
21
shall not require the payment of any franchise tax that would
22
otherwise have been due and payable on or after January 1,
23
2029.
24

There shall be no refunds or proration of franchise tax
25
for any taxes due and payable on or after January 1, 2029 on
26
the basis that a portion of the corporation's taxable year

SB3441
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LRB104 16689 SPS 30093 b
1
extends beyond January 1, 2029.
2

This Section is repealed on January 1, 2030.
3
(Source: P.A. 102-16, eff. 6-17-21; 103-8, eff. 6-7-23;
4
103-592, eff. 6-7-24.)

5

(Text of Section from P.A. 102-282, 102-558, 103-8, and
6
103-592)
7

Sec. 15.35.
Franchise taxes payable by domestic
8
corporations.
For the privilege of exercising its franchises
9
in this State, each domestic corporation shall pay to the
10
Secretary of State the following franchise taxes, computed on
11
the basis, at the rates and for the periods prescribed in this
12
Act:
13

(a) An initial franchise tax at the time of filing its
14

first report of issuance of shares.
15

(b) An additional franchise tax at the time of filing
16

(1) a report of the issuance of additional shares, or (2) a
17

report of an increase in paid-in capital without the
18

issuance of shares, or (3) an amendment to the articles of
19

incorporation or a report of cumulative changes in paid-in
20

capital, whenever any amendment or such report discloses
21

an increase in its paid-in capital over the amount thereof
22

last reported in any document, other than an annual
23

report, interim annual report or final transition annual
24

report required by this Act to be filed in the office of
25

the Secretary of State.

SB3441
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LRB104 16689 SPS 30093 b
1

(c) An additional franchise tax at the time of filing
2

a report of paid-in capital following a statutory merger
3

or consolidation, which discloses that the paid-in capital
4

of the surviving or new corporation immediately after the
5

merger or consolidation is greater than the sum of the
6

paid-in capital of all of the merged or consolidated
7

corporations as last reported by them in any documents,
8

other than annual reports, required by this Act to be
9

filed in the office of the Secretary of State; and in
10

addition, the surviving or new corporation shall be liable
11

for a further additional franchise tax on the paid-in
12

capital of each of the merged or consolidated corporations
13

as last reported by them in any document, other than an
14

annual report, required by this Act to be filed with the
15

Secretary of State from their taxable year end to the next
16

succeeding anniversary month or, in the case of a
17

corporation which has established an extended filing
18

month, the extended filing month of the surviving or new
19

corporation; however if the taxable year ends within the
20

2-month period immediately preceding the anniversary month
21

or, in the case of a corporation which has established an
22

extended filing month, the extended filing month of the
23

surviving or new corporation the tax will be computed to
24

the anniversary month or, in the case of a corporation
25

which has established an extended filing month, the
26

extended filing month of the surviving or new corporation

SB3441
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LRB104 16689 SPS 30093 b
1

in the next succeeding calendar year.
2

(d) An annual franchise tax payable each year with the
3

annual report which the corporation is required by this
4

Act to file.
5

On or after January 1, 2020 and prior to January 1, 2021,
6
the first $30 in liability is exempt from the tax imposed under
7
this Section. On or after January 1, 2021 and prior to January
8
1, 2024, the first $1,000 in liability is exempt from the tax
9
imposed under this Section. On or after January 1, 2024, and
10
before January 1, 2025, the first $5,000 in liability is
11
exempt from the tax imposed under this Section. On and after
12
January 1, 2025
and before January 1, 2028
, the first $10,000
13
in liability is exempt from the tax imposed under this
14
Section.
On or after January 1, 2028 and before January 1,
15
2029, the first $100,000 in liability is exempt from the tax
16
imposed under this Section. The provisions of this Section
17
shall not require the payment of any franchise tax that would
18
otherwise have been due and payable on or after January 1,
19
2029.
20

There shall be no refunds or proration of franchise tax
21
for any taxes due and payable on or after January 1, 2029 on
22
the basis that a portion of the corporation's taxable year
23
extends beyond January 1, 2029.
24

This Section is repealed on January 1, 2030.
25
(Source: P.A. 102-282, eff. 1-1-22; 102-558, eff. 8-20-21;
26
103-8, eff. 6-7-23; 103-592, eff. 6-7-24.)

SB3441
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LRB104 16689 SPS 30093 b
1

(805 ILCS 5/15.65)

(from Ch. 32, par. 15.65)
2

Sec. 15.65.
Franchise taxes payable by foreign
3
corporations.
For the privilege of exercising its authority to
4
transact such business in this State as set out in its
5
application therefor or any amendment thereto, each foreign
6
corporation shall pay to the Secretary of State the following
7
franchise taxes, computed on the basis, at the rates and for
8
the periods prescribed in this Act:
9

(a) An initial franchise tax at the time of filing its
10

application for authority to transact business in this
11

State.
12

(b) An additional franchise tax at the time of filing
13

(1) a report of the issuance of additional shares, or (2) a
14

report of an increase in paid-in capital without the
15

issuance of shares, or (3) a report of cumulative changes
16

in paid-in capital or a report of an exchange or
17

reclassification of shares, whenever any such report
18

discloses an increase in its paid-in capital over the
19

amount thereof last reported in any document, other than
20

an annual report, interim annual report or final
21

transition annual report, required by this Act to be filed
22

in the office of the Secretary of State.
23

(c) Whenever the corporation shall be a party to a
24

statutory merger and shall be the surviving corporation,
25

an additional franchise tax at the time of filing its

SB3441
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LRB104 16689 SPS 30093 b
1

report following merger, if such report discloses that the
2

amount represented in this State of its paid-in capital
3

immediately after the merger is greater than the aggregate
4

of the amounts represented in this State of the paid-in
5

capital of such of the merged corporations as were
6

authorized to transact business in this State at the time
7

of the merger, as last reported by them in any documents,
8

other than annual reports, required by this Act to be
9

filed in the office of the Secretary of State; and in
10

addition, the surviving corporation shall be liable for a
11

further additional franchise tax on the paid-in capital of
12

each of the merged corporations as last reported by them
13

in any document, other than an annual report, required by
14

this Act to be filed with the Secretary of State, from
15

their taxable year end to the next succeeding anniversary
16

month or, in the case of a corporation which has
17

established an extended filing month, the extended filing
18

month of the surviving corporation; however if the taxable
19

year ends within the 2-month period immediately preceding
20

the anniversary month or the extended filing month of the
21

surviving corporation, the tax will be computed to the
22

anniversary or, extended filing month of the surviving
23

corporation in the next succeeding calendar year.
24

(d) An annual franchise tax payable each year with any
25

annual report which the corporation is required by this
26

Act to file.

SB3441
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LRB104 16689 SPS 30093 b
1

On or after January 1, 2020 and prior to January 1, 2021,
2
the first $30 in liability is exempt from the tax imposed under
3
this Section. On or after January 1, 2021 and before January 1,
4
2024, the first $1,000 in liability is exempt from the tax
5
imposed under this Section. On and after January 1, 2024 and
6
before January 1, 2025, the first $5,000 in liability is
7
exempt from the tax imposed under this Section. On and after
8
January 1, 2025
and before January 1, 2028
, the first $10,000
9
in liability is exempt from the tax imposed under this
10
Section.
On or after January 1, 2028 and before January 1,
11
2029, the first $100,000 in liability is exempt from the tax
12
imposed under this Section. The provisions of this Section
13
shall not require the payment of any franchise tax that would
14
otherwise have been due and payable on or after January 1,
15
2029.
16

There shall be no refunds or proration of franchise tax
17
for any taxes due and payable on or after January 1, 2029 on
18
the basis that a portion of the corporation's taxable year
19
extends beyond January 1, 2029.
20

This Section is repealed on January 1, 2030.
21
(Source: P.A. 102-16, eff. 6-17-21; 102-558, eff. 8-20-21;
22
102-813, eff. 5-13-22; 103-592, eff. 6-7-24.)

23

(805 ILCS 5/15.90)

(from Ch. 32, par. 15.90)
24

Sec. 15.90.
Statute of limitations.
25

(a) Except as otherwise provided in this Section and

SB3441
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LRB104 16689 SPS 30093 b
1
notwithstanding anything to the contrary contained in any
2
other Section of this Act,
prior to January 1, 2030,
no
3
domestic corporation or foreign corporation shall be obligated
4
to pay any annual franchise tax, fee, or penalty or interest
5
thereon imposed under this Act, nor shall any administrative
6
or judicial sanction (including dissolution) be imposed or
7
enforced nor access to the courts of this State be denied based
8
upon nonpayment thereof more than 7 years after the date of
9
filing the annual report with respect to the period during
10
which the obligation for the tax, fee, penalty or interest
11
arose, unless (1) within that 7 year period the Secretary of
12
State sends a written notice to the corporation to the effect
13
that (A) administrative or judicial action to dissolve the
14
corporation or revoke its authority for nonpayment of a tax,
15
fee, penalty or interest has been commenced; or (B) the
16
corporation has submitted a report but has failed to pay a tax,
17
fee, penalty or interest required to be paid therewith; or (C)
18
a report with respect to an event or action giving rise to an
19
obligation to pay a tax, fee, penalty or interest is required
20
but has not been filed, or has been filed and is in error or
21
incomplete; or (2) the annual report by the corporation was
22
filed with fraudulent intent to evade taxes payable under this
23
Act. A corporation nonetheless shall be required to pay all
24
taxes that would have been payable during the most recent 7
25
year period due to a previously unreported increase in paid-in
26
capital that occurred prior to that 7 year period and interest

SB3441
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LRB104 16689 SPS 30093 b
1
and penalties thereon for that period, except that, from
2
February 1, 2008 through March 15, 2008, with respect to any
3
corporation that participates in the Franchise Tax and License
4
Fee Amnesty Act of 2007, the corporation shall be only
5
required to pay all taxes that would have been payable during
6
the most recent 4 year period due to a previously unreported
7
increase in paid-in capital that occurred prior to that 7 year
8
period.
Beginning January 1, 2030, no domestic corporation or
9
foreign corporation shall be obligated to pay any annual
10
franchise tax, fee, or penalty or interest thereon imposed
11
under this Act, nor shall any administrative or judicial
12
sanction (including dissolution) be imposed or enforced nor
13
access to the courts of this State be denied based upon
14
nonpayment thereof more than 7 years after the date of filing
15
the annual report with respect to the period during which the
16
obligation for the tax, fee, penalty or interest arose.
17

(b) If within 2 years following a change in control of a
18
corporation the corporation voluntarily pays in good faith all
19
known obligations of the corporation imposed by this Article
20
15 with respect to reports that were required to have been
21
filed since the beginning of the 7 year period ending on the
22
effective date of the change in control, no action shall be
23
taken to enforce or collect obligations of that corporation
24
imposed by this Article 15 with respect to reports that were
25
required to have been filed prior to that 7 year period
26
regardless of whether the limitation period set forth in

SB3441
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LRB104 16689 SPS 30093 b
1
subsection (a) is otherwise applicable. For purposes of this
2
subsection (b), a change in control means a transaction, or a
3
series of transactions consummated within a period of 180
4
consecutive days, as a result of which a person which owned
5
less than 10% of the shares having the power to elect directors
6
of the corporation acquires shares such that the person
7
becomes the holder of 80% or more of the shares having such
8
power. For purposes of this subsection (b) a person means any
9
natural person, corporation, partnership, trust or other
10
entity together with all other persons controlled by,
11
controlling or under common control with such person.
12

(c) Except as otherwise provided in this Section and
13
notwithstanding anything to the contrary contained in any
14
other Section of this Act, no foreign corporation that has not
15
previously obtained authority under this Act shall, upon
16
voluntary application for authority filed with the Secretary
17
of State prior to January 1, 2001, be obligated to pay any tax,
18
fee, penalty, or interest imposed under this Act, nor shall
19
any administrative or judicial sanction be imposed or enforced
20
based upon nonpayment thereof with respect to a period during
21
which the obligation arose that is prior to January 1, 1993
22
unless (1) prior to receipt of the application for authority
23
the Secretary of State had sent written notice to the
24
corporation regarding its failure to obtain an application for
25
authority, (2) the corporation had submitted an application
26
for authority previously but had failed to pay any tax, fee,

SB3441
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LRB104 16689 SPS 30093 b
1
penalty or interest to be paid therewith, or (3) the
2
application for authority was submitted by the corporation
3
with fraudulent intent to evade taxes payable under this Act.
4
A corporation nonetheless shall be required to pay all taxes
5
and fees due under this Act that would have been payable since
6
January 1, 1993 as a result of commencing the transaction of
7
its business in this State and interest thereon for that
8
period.
9
(Source: P.A. 95-233, eff. 8-16-07; 95-707, eff. 1-11-08;
10
96-66, eff. 1-1-10.)

11

(805 ILCS 5/15.97)

(from Ch. 32, par. 15.97)
12

Sec. 15.97.
Corporate Franchise Tax Refund Fund.
13

(a) Beginning July 1, 1993, a percentage of the amounts
14
collected under Sections 15.35, 15.45, 15.65, and 15.75 of
15
this Act shall be deposited into the Corporate Franchise Tax
16
Refund Fund, a special Fund hereby created in the State
17
treasury. From July 1, 1993, until December 31, 1994, there
18
shall be deposited into the Fund 3% of the amounts received
19
under those Sections. Beginning January 1, 1995, and for each
20
fiscal year beginning thereafter, 2% of the amounts collected
21
under those Sections during the preceding fiscal year shall be
22
deposited into the Fund.
23

(b) Beginning July 1, 1993, moneys in the Fund shall be
24
expended exclusively for the purpose of paying refunds payable
25
because of overpayment of franchise taxes, penalties, or

SB3441
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LRB104 16689 SPS 30093 b
1
interest under Sections 13.70, 15.35, 15.45, 15.65, 15.75, and
2
16.05 of this Act and making transfers authorized under this
3
Section. Refunds in accordance with the provisions of
4
subsections (f) and (g) of Section 1.15 and Section 1.17 of
5
this Act may be made from the Fund only to the extent that
6
amounts collected under Sections 15.35, 15.45, 15.65, and
7
15.75 of this Act have been deposited in the Fund and remain
8
available. On or before August 31 of each year, the balance in
9
the Fund in excess of $100,000 shall be transferred to the
10
General Revenue Fund. Notwithstanding the provisions of this
11
subsection, for the period commencing on or after July 1,
12
2022, amounts in the fund shall not be transferred to the
13
General Revenue Fund and shall be used to pay refunds in
14
accordance with the provisions of this Act.
Within a
15
reasonable time after December 31, 2029, but no later than
16
December 31, 2030, the Secretary of State shall direct and the
17
Comptroller shall order transferred to the General Revenue
18
Fund all amounts remaining in the Fund.
19

(c) This Act shall constitute an irrevocable and
20
continuing appropriation from the Corporate Franchise Tax
21
Refund Fund for the purpose of paying refunds upon the order of
22
the Secretary of State in accordance with the provisions of
23
this Section.
24

(d) This Section is repealed on January 1, 2031.
25
(Source: P.A. 102-282, eff. 1-1-22; 103-8, eff. 6-7-23.)

26

Section 99.
Effective date.
This Act takes effect upon

SB3441
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LRB104 16689 SPS 30093 b
1
becoming law.

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