Illinois lawmakers have approved Senate Bill 1911 to address a projected $267 million budget deficit for fiscal year 2026, caused in part by new federal corporate tax cuts from the recently passed One Big Beautiful Bill Act. The bill, now headed to Governor JB Pritzker, aims to “decouple” parts of Illinois’ tax code from federal changes, preserving about $250 million in state revenue.
Key provisions include blocking a federal deduction for manufacturers’ new assets—saving Illinois $144 million—and ensuring the state can collect $90 million in taxes on overseas business profits. The legislation also makes permanent a tax filing option for pass-through entities that helps Illinois businesses save on federal taxes.
Supporters say the move is critical to balancing the budget, while some business leaders and Republicans argue it could hurt the state’s economic competitiveness. Despite deficit concerns, the latest state data shows general fund revenue is up nearly 3% over last year, though corporate income taxes are down. Governor Pritzker is expected to sign the bill.
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