(The Center Square) – Multinational corporations that do business in Illinois would be taxed more to fund public education under a revenue proposal in the state legislature.
State Sen. Robert Martwick, D-Chicago, told the Illinois Senate Revenue Committee it is time for businesses to pay high taxes just like his neighbors do to fund public education.
“Can’t you just do the same thing? Can’t you invest in my children’s education?” Martwick said.
Martwick said Illinois is not properly funding education because it is crushed under massive pension debt.
Senate Bill 3486 is a 207-page piece of legislation that would amend and expand the Illinois Income Tax Act.
Martwick said the bill would restore the practice of worldwide combined reporting.
Alan Pasetsky, a tax practitioner and advisor for the Global Business Alliance, said worldwide combined reporting was eliminated years ago.
“Why was it eliminated? Not because of lobbyists, it was not because of profit shifting. It was eliminated because foreign countries complained that their companies in those countries were being double taxed. They’d be subject to tax twice, once in their country, once in a state,” Pasetsky said.
Greg Will is research director of Health Care Illinois and Indiana, which is a member of the Illinois Revenue Alliance.
Will told the Senate panel that Illinois only requires companies to report on their activities in the United States.
“Large multinational corporations exploit that by shifting their profits to offshore tax havens, Cayman Islands, Luxembourg, to avoid paying on those profits. These profits made here in Illinois are shifted abroad, not properly taxed,” Will said.
Will said changing corporate income tax to worldwide combined reporting could bring in up to $1.2 billion in additional revenue.
Pasetsky said Illinois has the most restrictive laws in the country to target tax shifting.
“Back in 2004, Illinois created something called a related party add-back rule, so all those examples that were given about profit shifting to tax havens are not allowable right now under Illinois law, so you would get no revenue from shutting down this loophole that doesn’t even exist,” Pasetsky said.
Pasetsky said SB 3486 would not guarantee any revenue.
As of Friday, 623 witness slips were filed in favor of SB 3486 and 13 slips were filed in opposition.
According to Reform for Illinois’ Sunshine Database, Martwick’s candidate committee, Friends of Robert Martwick, received a $278,000 donation from the Illinois Political Action Committee for Education last September. In December, Martwick’s committee received $183,525 from the Illinois Federation of Teachers committee on public education and $63,500 from the Cook County College Teachers Union.
The Chicago Teachers Union gave Friends of Robert Martwick a six-figure donation in August 2024.
