South Central Reporter

Illinois small business owners hard-hit from COVID-19's economic impact are facing more bad news.

The state government is planning to end a tax exception created earlier during the health crisis but expired at the end of 2020 with federal funding. The result amounts to small businesses having to pay $500 million in taxes, collectively.

"We urge the governor [J.B. Pritzker] and [the] Legislature to reject this massive tax increase at a time when thousands of small businesses across the entire state are struggling to stay afloat during a pandemic and government-imposed shutdowns," the Illinois Manufacturers' Association and a collection of chambers and associations representing businesses' interest said in a joint statement.

In the spring of 2020, Congress approved funding for the federal CARES Act. It was in response to the financial impacts that COVID-19 created on the public and private sectors.

A lot of the financial aid was intended for independent business owners, providing them the opportunity to offset up to 100% of their income through the end of 2020. That financial relief expired on Dec. 31, and now businesses will be taking another big hit from these taxes.

Businesses that will be affected by these taxes include companies that have applied for the Paycheck Protection Program (PPP) and financial assistance through the state's Business Interruption Grants (BIG) but didn't receive financial aid for various reasons.

To the many struggling companies that failed to secure financial assistance to help them weather the economic ravages of the pandemic, these new taxes may be more than they can handle.

"This will have a dramatic impact on every aspect of business, including some of our most decimated industries," the organizations said. "We understand the desire to find revenue, but this is the opposite of an 'all-in' approach."