Illinois SB 2716: INC TX-PASS THROUGH ENTITY

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104TH GENERAL ASSEMBLY 
State of Illinois 
2025 and 2026
SB2716

Introduced 10/15/2025, by Sen. Li Arellano, Jr. 

SYNOPSIS AS INTRODUCED:

35 ILCS 5/201

 Amends the Illinois Income Tax Act. Provides that the pass-through entity tax applies on a permanent basis. Effective immediately.

LRB104 14844 HLH 27988 b

A BILL FOR

SB2716LRB104 14844 HLH 27988 b

1 AN ACT concerning revenue.

2 Be it enacted by the People of the State of Illinois, 

3represented in the General Assembly:

4 Section 5. The Illinois Income Tax Act is amended by 

5changing Section 201 as follows:

6 (35 ILCS 5/201)

7 Sec. 201. Tax imposed. 

8 (a) In general. A tax measured by net income is hereby 

9imposed on every individual, corporation, trust and estate for 

10each taxable year ending after July 31, 1969 on the privilege 

11of earning or receiving income in or as a resident of this 

12State. Such tax shall be in addition to all other occupation or 

13privilege taxes imposed by this State or by any municipal 

14corporation or political subdivision thereof.

15 (b) Rates. The tax imposed by subsection (a) of this 

16Section shall be determined as follows, except as adjusted by 

17subsection (d-1):

18 (1) In the case of an individual, trust or estate, for 

19 taxable years ending prior to July 1, 1989, an amount 

20 equal to 2 1/2% of the taxpayer's net income for the 

21 taxable year.

22 (2) In the case of an individual, trust or estate, for 

23 taxable years beginning prior to July 1, 1989 and ending 

SB2716- 2 -LRB104 14844 HLH 27988 b

1 after June 30, 1989, an amount equal to the sum of (i) 2 

2 1/2% of the taxpayer's net income for the period prior to 

3 July 1, 1989, as calculated under Section 202.3, and (ii) 

4 3% of the taxpayer's