Budget & Taxes

Appropriates $2 from the General Revenue Fund to the Illinois Student Assistance Commission for its FY26 ordinary and contingent expenses. Effective July 1, 2025.

Amends the State Mandates Act. Provides that any State mandate regarding any subject matter enacted on or after the effective date of the amendatory Act that necessitates additional expenditures from local government revenues shall be void and unenforceable unless the General Assembly makes necessary appropriations and reimbursements to implement that mandate. Provides that the failure of the General Assembly to make necessary appropriations and reimbursements shall relieve the local government of the obligation to implement any State mandate. Makes conforming changes. Amends the Property Tax Extension Limitation Law in the Property Tax Code. Provides that a taxing district shall reduce its aggregate extension base for the purpose of lowering its limiting rate for future years upon referendum approval initiated by the submission of a petition by the voters of the district. Provides that the extension limitation shall be: (a) the lesser of 5% or the average percentage increase in the Consumer Price Index for the immediately preceding 10 years; or (b) the rate of increase approved by the voters. Amends the Illinois Income Tax Act. Increases distributions into the Local Government Distributive Fund on and after August 1, 2025. Effective immediately.

Amends the Illinois Income Tax Act. Provides that, for taxable years ending on or after December 31, 2025, the credit for employee child care shall be in an amount equal to: (1) 50% of the start-up costs expended by the corporate taxpayer to provide a child care facility for the children of its employees; and (2) 20% of the annual amount paid by the corporate taxpayer to (i) provide an on-site child care facility for the children of its employees, (ii) provide child care offsite for the children of its employees, or (iii) a combination of (i) and (ii) (currently, 30% of the start-up costs and 5% of the annual amount paid by the taxpayer in providing the child care facility). Provides that the taxpayer may coordinate with an independent child care facility to provide care for the children of employees. Effective immediately.

HB 1961 appropriates $2 from the state's General Revenue Fund to the Department of Agriculture. These funds are designated to cover the department's ordinary and contingent expenses for Fiscal Year 2026. The provisions of this bill are set to take effect on July 1, 2025.

Amends the Illinois Income Tax Act. Creates an income tax credit for each employer taxpayer in an amount equal to $5,000 for each military spouse hired by the taxpayer during the taxable year. Effective immediately.

Amends the Video Gaming Act. Provides that the tax collected under the Act from terminal income generated in municipalities with a population greater than or equal to 2,000,000 shall be deposited into the Capital Projects Fund and into the Local Government with Greater than 2,000,000 Residents Video Gaming Distributive Fund (rather than deposited into the Capital Projects Fund and into the Local Government Video Gaming Distributive Fund). Makes conforming changes. Amends the State Finance Act to create the Local Government with Greater than 2,000,000 Residents Video Gaming Distributive Fund. Effective immediately.

Creates the Short-Term Rental Occupation Tax Act. Imposes taxes upon short-term rental transactions facilitated by a hosting platform. Provides that one tax is imposed at the rate of 5% of 94% of the gross rental receipts from the transaction. Provides that an additional tax is imposed at the rate of 1% of 94% of the gross rental receipts from the transaction. Provides that operators of short-term rentals shall obtain a business license from the Department of Revenue. Amends the Hotel Operators' Occupation Tax Act. Provides that re-renters of hotel rooms who meet certain criteria related to gross receipts or number of transactions are required to collect and remit the tax under the Act. Amends the Counties Code and the Illinois Municipal Code to make conforming changes. Effective January 1, 2026.

Amends the Property Tax Code. Provides that, for taxable year 2026, the maximum income limitation for the senior freeze shall be $75,000 for all qualified property (currently, $65,000). Provides that the maximum income limitation shall be adjusted each year according to the change in the Consumer Price Index for All Urban Consumers. Effective immediately.

Makes appropriations for the ordinary and contingent expenses of the State Universities Retirement System for the fiscal year beginning July 1, 2025, as follows: General Funds $2,124,412,632; Other State Funds $215,000,000; Total $2,339,412,632.

Amends the State Finance Act. Increases the percentage of moneys that are transferred from the Cannabis Regulation Fund to the Local Government Distributive Fund. Provides that moneys allocated to counties under those provisions shall be directed to a fund under the control of the Sheriff. Effective July 1, 2025.