Final Weeks of the 2024 Spring Legislative Session
As we approach the final two weeks of the 2024 spring legislative session, both chambers have indicated that the Spring Session may extend past the original May 24 adjournment date as the General Assembly and the Governor attempt to hammer out a budget deal.
The Governor’s Office of Management and Budget (GOMB) recently increased FY24 revenue projections by $250 million despite shortfalls in tax collections, offset by better-than-expected federal revenues and other sources. Looking ahead, GOMB forecasts a potential revenue increase of $295 million for FY25 if the General Assembly approves $1 billion in new taxes proposed by the Governor. Without this, a $700 million deficit looms in the state budget.
Measures like capping the retailer’s discount for collecting sales tax are central to the Governor's budget proposal, which we strongly oppose due to its detrimental impact on businesses. These fiscal strategies, aimed at filling budget gaps, could hinder economic stability and growth.
In anticipation of a potential shortfall, the Governor has directed State agencies to prepare for up to $800 million in cuts, focusing on grant programs and discretionary spending. This approach underscores a critical need for cautious fiscal management without overburdening businesses.
As we continue to track these developments, we remain critical of measures that impose undue tax burdens on businesses to compensate for governmental spending. We are committed to informing our members about these crucial budgetary discussions and their implications for our industry. Stay connected for ongoing updates as we navigate these decisive final weeks of the legislative session.
Retail Discount/Vendor Collection Allowance Update Amid Budget Negotiations
As we continue to monitor legislative developments that impact our industry, we want to inform you about HB 4071, which will undergo a subject matter hearing in the House Revenue Committee on May 14th. This bill proposes creating the Working Families Fund, financed partly by capping the vendor discount—the rebate retailers receive for collecting sales tax—to $1,000 per calendar year. According to the Governor's Office, this significant change from current practices aims to generate an estimated $100 million in new revenue for the State.
Although no vote will occur at this hearing, the discussions will play a vital role in shaping legislative and public perspectives on the bill’s impact, particularly as the legislature races to finalize the State budget in the coming two weeks.
The Illinois Automobile Dealers Association (IADA) strongly opposes the proposed cap on vendor discounts, as it would negatively impact the financial stability of dealers and have broader harmful effects on the state's economy. By reducing the rebate dealers receive for collecting sales tax, this cap would increase operational costs and potentially lead to higher prices for consumers.
Despite opposition to the bill, the need to address budget shortfalls may lead legislators to consider this and other revenue-raising measures. We believe this approach is wrong for business and will continue to advocate against it for our members.
Update on the "Junk Fee" Legislation, HB 4629
We want to inform you about the ongoing developments regarding HB 4629, also known as the "Junk Fee" bill. Scheduled for discussion last week in the Senate Judiciary Committee, the bill faced significant opposition and unresolved issues, leading to another vote postponement. Proponents of the bill are actively working on drafting an amendment that addresses the concerns but has yet to succeed.
The Illinois Automobile Dealers Association (IADA) continues to oppose the bill in its current form, particularly due to its implications for documentary service fees (DOC fees). DOC fees are essential to our operations, covering administrative costs related to compliance with state and federal regulations on vehicle sales. Any legislation that impacts these fees could harm our industry's efficiency and cost structure.
We are closely monitoring the situation and will actively oppose any amendments that adversely affect DOC fees. Our commitment remains vital in ensuring that legislative changes do not undermine the financial health of our dealerships and the broader automotive industry. We will provide further updates as more developments occur, ensuring you are well-informed on this critical issue.
