Illinois millionaire tax advances
What happened
- An Illinois millionaire's-tax measure moved closer to the November ballot, reviving state-level tax uncertainty. - The proposal would impose an additional tax on millionaires, altering planning considerations for wealthy residents. - The development signals advisers should expect more domicile and state-tax conversations for affluent clients if the measure advances. (thecentersquare.com)
Why it matters
An Illinois proposal to tax income above $1 million moved out of a House committee this week, putting it closer to the November 3 ballot. (mystateline.com) The measure, House Joint Resolution Constitutional Amendment 21, would add a 3% surtax on the portion of an individual’s net income over $1 million. Illinois’ current individual income tax rate is 4.95%, so income above that threshold would be taxed at 7.95%. (ilga.gov) The House Revenue and Finance Committee advanced the proposal on April 21 by a 13-7 party-line vote. To reach voters on November 3, 2026, a constitutional amendment needs approval from three-fifths of each chamber by May 3. (mystateline.com) (ballotpedia.org) Illinois is here because voters approved a nonbinding advisory question on November 5, 2024, asking whether the constitution should be amended for an extra 3% tax on income above $1 million. The statewide vote was 3,288,462 yes votes, or 60.79%, to 2,121,507 no votes, or 39.21%. (ballotpedia.org) That 2024 vote did not change the law. Illinois can put only a limited number of constitutional questions on the ballot, and an advisory question was a way to test support before lawmakers tried to write a binding amendment. (ballotpedia.org) The amendment would carve out a new exception to Illinois’ flat-tax rule in Article IX of the state constitution. The text says the new revenue would be used for property tax relief, and the General Assembly would later write the enforcement details into law. (ilga.gov) Rep. La Shawn Ford, a Chicago Democrat, said in committee that the tax would help pay for property tax relief and public priorities. Republicans on the panel argued the proposal could hit owners of pass-through businesses whose company income is reported on personal tax returns. (wandtv.com) (illinoispolicy.org) Illinois voters rejected a broader graduated income tax amendment in 2020, so this narrower income-over-$1-million proposal is returning to a question that already split the state once. The next test is whether Democratic leaders can move it through both chambers before the May 3 deadline. (illinoispolicy.org) (mystateline.com)
Key numbers
- (thecentersquare.com) An Illinois proposal to tax income above $1 million moved out of a House committee this week, putting it closer to the November 3 ballot.
- (mystateline.com) The measure, House Joint Resolution Constitutional Amendment 21, would add a 3% surtax on the portion of an individual’s net income over $1 million.
- Illinois’ current individual income tax rate is 4.95%, so income above that threshold would be taxed at 7.95%.
- (ilga.gov) The House Revenue and Finance Committee advanced the proposal on April 21 by a 13-7 party-line vote.
What happens next
- To reach voters on November 3, 2026, a constitutional amendment needs approval from three-fifths of each chamber by May 3.
- Republicans on the panel argued the proposal could hit owners of pass-through businesses whose company income is reported on personal tax returns.
- The next test is whether Democratic leaders can move it through both chambers before the May 3 deadline.
Quick answers
What happened in Illinois millionaire tax advances?
An Illinois millionaire's-tax measure moved closer to the November ballot, reviving state-level tax uncertainty. The proposal would impose an additional tax on millionaires, altering planning considerations for wealthy residents. The development signals advisers should expect more domicile and state-tax conversations for affluent clients if the measure advances. (thecentersquare.com)
Why does Illinois millionaire tax advances matter?
An Illinois proposal to tax income above $1 million moved out of a House committee this week, putting it closer to the November 3 ballot. (mystateline.com) The measure, House Joint Resolution Constitutional Amendment 21, would add a 3% surtax on the portion of an individual’s net income over $1 million. Illinois’ current individual income tax rate is 4.95%, so income above that threshold would be taxed at 7.95%. (ilga.gov) The House Revenue and Finance Committee advanced the proposal on April 21 by a 13-7 party-line vote. To reach voters on November 3, 2026, a constitutional amendment needs approval from three-fifths of each chamber by May 3. (mystateline.com) (ballotpedia.org) Illinois is here because voters approved a nonbinding advisory question on November 5, 2024, asking whether the constitution should be amended for an extra 3% tax on income above $1 million. The statewide vote was 3,288,462 yes votes, or 60.79%, to 2,121,507 no votes, or 39.21%. (ballotpedia.org) That 2024 vote did not change the law. Illinois can put only a limited number of constitutional questions on the ballot, and an advisory question was a way to test support before lawmakers tried to write a binding amendment. (ballotpedia.org) The amendment would carve out a new exception to Illinois’ flat-tax rule in Article IX of the state constitution. The text says the new revenue would be used for property tax relief, and the General Assembly would later write the enforcement details into law. (ilga.gov) Rep. La Shawn Ford, a Chicago Democrat, said in committee that the tax would help pay for property tax relief and public priorities. Republicans on the panel argued the proposal could hit owners of pass-through businesses whose company income is reported on personal tax returns. (wandtv.com) (illinoispolicy.org) Illinois voters rejected a broader graduated income tax amendment in 2020, so this narrower income-over-$1-million proposal is returning to a question that already split the state once. The next test is whether Democratic leaders can move it through both chambers before the May 3 deadline. (illinoispolicy.org) (mystateline.com)
