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Illinois Introduces Nonresident Taxation Legislation

BY: APA Staff | 05/16/19

Illinois is unique among states that have an income tax because its personal income tax does not apply to nonresidents who work for a business based in another state. That would change under H.B. 3633. The bill, which is supported by the Illinois Department of Revenue (DOR) and Illinois business associations, would require income tax withholding from workers who travel into the state on business for more than 30 working days during the tax year.

One business argument in favor of the measure is that it puts Illinois businesses on equal footing with out-of-state businesses. Currently, Illinois workers who travel out of state are taxed by their home state and the nonresident state, while workers from another state in Illinois on business only pay income tax to their home states.

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