WSIU: Democrats May Repeal Tax Loophole (2009-10-14)

Maybe one of the problems before state lawmakers has worked itself out.

State Senator Don Harmon of Oak Park says an attempt to close a tax loophole may have gone too far, and he says fellow Democrats are willing to repeal that attempt if the business community will sit down and help work out a solution.

He says the intent is not to increase the tax burden on small businesses, but to make sure that small businesses are not hiding their profits so they can skip out on the taxes that are owed.

The Illinois Chamber of Commerce was calling for the repeal of a seemingly minor budget change that would have forced all partnerships across Illinois to pay the personal property replacement tax-which is calculated on income-on full income, rather than a portion of it. But Harmon says the intention was to close a loophole in which too many businesses were labeling profit as "compensation to partners," so they didn't have to pay taxes on that money.

He expects lawmakers to repeal the provision during the Veto Session.