Illinois Small Business Owners Could Save Thousands in Taxes

Illinois small business owners may soon receive tax relief, called a “step in the right direction” for the state’s business environment.

In May, the General Assembly passed a law sponsored by Senator Win Stoller, R-Germantown Hills, that would allow small business owners to opt for a federal tax cut in 2017, potentially saving them money.

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Thanks to the measure, Senate Bill 2531, small businesses could work around a cap of $ 10,000 that is placed on their state and local tax deductions. Small business owners are currently required to report their share of business income on their personal income taxes, making them subject to the cap, which large corporations do not have to do.

If this legislation, which was passed unanimously in the House and Senate, is signed by Governor JB Pritzker, then small business owners would not be subject to the cap – what they call a victory for owners. of Illinois small businesses.

“I think this is a step in the right direction,” said Michael Rieker, owner of Peoria Tire. “(This is) progress that we haven’t seen in recent years and progress that doesn’t cost anything. It’s kind of a good thing … it’s not taking money out of the cash registers of the State at the expense of something else. “

Since the legislation only deals with a federal tax cut, Rieker is right, this deal will not cost the state of Illinois any money. Stoller says he’s seen other states like New York and New Jersey pass similar legislation at no cost to their own states, and thought Illinois could benefit in the same way.

“It’s kind of my wheelhouse and my space, so I recognize this could be a huge opportunity for small businesses in Illinois,” said Stoller, who runs a small business himself. “The main thing is that it wouldn’t cost Illinois anything because the tax savings are all on the federal side.”

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Business owners say the potential savings from this legislation, which Stoller says could range between $ 5,000 and $ 50,000 for a given business, will help them continue to grow their businesses and compete with larger companies.

“All we’re going to do is take that money and be able to put it back into our business,” said Paola Hinton, owner of Five Senses Spa, Salon and Barbershop in Peoria. “That’s what every entrepreneur does, that’s why they are entrepreneurs, to build and grow.”

Rieker agreed.

“First and foremost, it allows us to reinvest in the business,” said Rieker. “And investment defined as new equipment, safer equipment, that means being able to provide cost of living adjustments for our employees. This allows us to continue to provide retirement and health care benefits. ”

While this proposal is viewed as a victory for the state by small business owners, they still don’t think Illinois is doing enough to be a friendly environment for small businesses.

“When you have people helping small businesses survive and rebuild, sure (that’s a good sign),” Hinton said. “Sure it’s great, but I think Illinois has a lot, a lot more work to do. Illinois has a major problem and we’re going to need a lot more laws to fix it.

Hinton said rising costs and taxes, in addition to changing government regulations, were stretching already busy business owners too much.

“You talk to a business owner who’s busy and maybe also has a house and kids, and now you say ‘okay now you have to go campaign for yourself’ and try to get these lawmakers to understand. what’s the impact, ”Hinton mentioned. “You run at a million kilometers an hour; you may not have the time or the business acumen to deal with these kinds of things.