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A Publication of WTVP

The Illinois General Assembly was kept extremely busy this past legislative session as they raced to adjourn by May 31. In the last few weeks of session, legislators saw thousands of amendments, and in the end there were 600 bills passed and forwarded to Gov. Blagojevich for his review.

When all was said and done, the only remaining question was whether the revenues generated by all of the taxes and fees will keep the newly adopted $54 billion budget for fiscal year 2004 in the black. If the revenues don’t support the state budget, legislators may return to Springfield in an attempt to fix the shortfall.

Agriculture will see several changes as the result of lawmakers working to generate revenue to offset a $5 billion deficit. Ninety-five fees were raised, including several agriculture-related fees, to generate about $309 million.

There was some good news, however. The sales tax exemptions for feed, seed, chemicals, and equipment will continue. This was a large target at the beginning of the session. Farmers made many contacts with legislators, making it very clear how important sales tax exemptions are to the health of Illinois agriculture and rural economies.

Another positive note from this session was the passage of the biofuels sales tax incentive. Biofuels include ethanol (corn) and biodiesel (soybeans). The governor signed the trio of bills on a farm in Macon County June 11. Combined, the three bills extend the current ethanol tax incentives for another 10 years, create a bio-diesel tax incentive, and provide incentives for building renewable plants in Illinois.

Basically, there are two levels for the sales tax incentive. The sales tax on 10 percent blended ethanol and diesel fuel blended with 10 percent or less of biodiesel will be 80 percent of the state sales tax rate. Biofuels with 10 percent or higher biomass material will have no state sales tax collected. Both of these provisions sunset January 1, 2014.

As I’ve stated many times before, there are many solid reasons for us to be gearing our efforts to using more biofuels. They’re clean-burning, renewable, and lessen our dependence on foreign oil.

The General Assembly approved decoupling of the estate tax from the federal tax code, which was opposed by the Illinois Farm Bureau. Decoupling allows the state to collect funds for estate taxes, regardless of action taken on federal taxes. As a result of recent federal action, the federal estate tax is being reduced.

Illinois legislation proposes a graduated tax scale over the next several years. An estate would be taxed if the value totals $1 million or more in 2002-2003; $1.5 million or more in 2004-2005; and $2 million or more in 2006-2009. The state action would end December 31, 2009, meaning the state would follow the federal estate tax system after that date.

Farming is a lifelong learning experience, and often, farm children want to follow in their parents’ footsteps and carry on the farming business. They’ve probably spent the first 18 years of their lives learning the finer points of growing crops and livestock, and sometimes it becomes nearly impossible for the children to pay the estate taxes without selling a large portion of the farm. IBI

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