Franchise, Stock, and Utility
Franchise Taxes on Business Income in Illinois
Illinois Franchise tax is being phased out, and will be eliminated by Year 2024
Illinois imposes an annual franchise tax on both Illinois corporations and non-Illinois corporations for the privilege of doing business in the State. You calculate the corporation franchise tax by multiplying your corporation’s paid-in capital by the franchise tax rate of 0.1%. However, even if your corporation has no paid-in capital, you are still going to have to pay a minimum $25 franchise tax fee, annually. The maximum annual franchise tax is $1 million.
The franchise tax is paid with the required corporation annual report, along with a filing fee of $75.
Capital Stock Tax Rate
Capital Stock Tax Rate in Illinois is 0.100 with a maximum payment of $2,000,000. Both CST and CIT payments are required.
Illinois imposes a tax on those in the business of selling, distributing, supplying or furnishing electricity or natural gas for use or consumption. The telecommunications tax is 7 percent. The electricity tax is 5 percent of 0.32 cents per kilowatt hour, whichever is lower. The natural gas tax is 5 percent or 2.4 cents per therm, whichever is lower. Some local governments also collect utility taxes.
- Illinois does NOT tax water and sewer utilities
- Electricity and natural gas tax exemptions are available in Illinois Enterprise Zones (certain job creation criteria apply)