A bill introduced in the Illinois legislature that would have imposed additional taxes on partnerships and corporations engaged in investment management services has been defeated.
The legislation, S.B. 1719, along with its companion in the Illinois House, H.B. 3393, would have imposed a 20 percent privilege tax rate on partnerships and corporations engaged in the business of investment management services.
The Financial Services Institute (FSI), which represents independent financial advisors and independent financial services firms, has been working to stop this legislation since it was introduced in February.
FSI officials explained that most professional businesses that organize as limited liability corporations, limited partnerships or limited liability partnerships, are subject to paying franchise taxes and excise taxes. Paying an additional privilege tax would have equated to being double taxed, FSI said.
“It’s critical we do everything possible to ensure clients have access to quality, affordable financial advice. And we will oppose anything that puts more of a burden on financial advisors that ultimately hurts their hard-working clients,” FSI President and CEO Dale Brown said. “We work every day to support the growth of our members. A tax of this nature certainly would not help our members grow or help their clients thrive. Thanks to the advocacy efforts of our members and our team, we have continued to ensure that this growth is possible in Illinois, and that our members’ clients in that state continue to have access to the advice they deserve.”
The bill, which passed the Illinois Senate chamber, was never called for a vote in the Illinois House. It has now been re-referred back to the Illinois House Rules Committee.