New Illinois Tax Law Takes Larger Slice of Foreign-Source Income

Illinois will tax a larger portion of international corporate income under legislation signed by Gov. J.B. Pritzker (D) that aligns the state tax code with portions of the new foreign income rules, angering some business groups that argue the state is exceeding its taxing authorities on income earned abroad.

In addition to provisions addressing foreign-source income, the legislation, SB 1911, removes Illinois from the federal bonus depreciation regime and makes the pass-through entity tax, or PTET, permanent. State senate sponsors estimated the changes would hold off a $250 million gap in the 2026 budget. The measure passed both ...