IL HB1282

Gradually increases the percentage of state income tax revenue transferred from the General Revenue Fund to the Local Government Distributive Fund (LGDF) over a six-year period, starting at 7% in August 2025 and reaching 10% by August 2031

Current transfer rates of approximately 6.47% for individual income tax and 6.85% for corporate income tax will increase to a uniform 10% for all income tax categories (individual, corporate, and pass-through entities)

The phase-in schedule sets transfers at: 7% (Aug 2025-July 2026), 7.5% (Aug 2026-July 2027), 8% (Aug 2027-July 2028), 8.5% (Aug 2028-July 2029), 9% (Aug 2029-July 2030), 9.5% (Aug 2030-July 2031), and 10% thereafter

The increased transfers would provide additional funding to municipalities and counties throughout Illinois, as the LGDF distributes state income tax revenue to local governments based on population

Takes effect immediately upon becoming law