Sims leads new law to protect Illinois from reckless federal budget

SPRINGFIELD - State Senator Elgie R. Sims, Jr. led the charge to insulate Illinois taxpayers from damaging federal policy shifts, ensuring the state's Fiscal Year 2026 budget remains intact despite the federal administration's cuts to vital programs.

"The federal administration is recklessly cutting programs that Illinois families rely on, but we won't let their irresponsibility destabilize our state budget," said Sims (D-Chicago). "This law protects Illinois taxpayers and preserves our ability to fund schools, health care and essential services."

The federal administration's budget cuts threaten to create a $267 million shortfall in Illinois' Fiscal Year 2026 budget. Senate Bill 1911 recovers nearly $250 million of that lost revenue by strategically decoupling from federal tax policy changes that benefit large corporations at the expense of working families and updating definitions to align with federal law.

In the spring, Illinois changed its corporate tax treatment of Global Intangible Low-Taxed Income (GILTI). However, in HR1, the federal government renamed this source from GILTI to Net Controlled Foreign Corporation Tested Income (NCTI), meaning Illinois could no longer count on the revenue from this source. Senate Bill 1911 changes the definition from GILTI to NCTI to fall in line with the federal government, therefore allowing Illinois to continue to claim that revenue. Without the definition change, Illinois would not have access to the revenue because the category no longer exists and would be eliminated from revenue receipts because of the renaming.

The other portion of Sims' law calls for decoupling from federal bonus depreciation. Federal bonus depreciation is a tax incentive that allows businesses to deduct a large percentage of the purchase price of eligible business assets in the year they're placed in service, rather than depreciating them gradually over several years.

"We're standing up for working families and our state's economic stability," said Sims. "When the federal administration makes reckless decisions that harm everyday people, Illinois steps up to shield our residents. We refuse to make students, seniors and struggling families pay the price for budget shortfalls."

Senate Bill 1911 was signed into law Friday.