By Paul Williams

Law360 (March 27, 2020, 4:51 PM EDT) -- A group of Illinois House Republicans has implored the governor to suspend sales and property tax collections while the state enforces a stay-at-home order to combat the spread of the novel coronavirus.

A sales tax holiday and property tax abatement were suggestions included in a letter the seven legislators sent to Democratic Gov. J.B. Pritzker on Thursday seeking additional help during a financial downturn caused by the outbreak of COVID-19, the respiratory disease caused by the virus. The letter, obtained by Law360 on Friday, also called for freezing the minimum wage for 18 months and not raising unemployment insurance taxes for 12 months.

"As we come through this crisis — which we know we will — it is imperative that we ease the burdens on job creators and take every possible step to make it easier for our small businesses to put Illinois citizens back to work," the letter said.

In the letter, the lawmakers applauded Pritzker's call for the state to extend its income tax deadlines but added that Illinois needs "to do more to give small businesses immediate breathing room."

A representative of Pritzker did not immediately respond to questions from Law360 on Friday.

A legislator who signed the letter, Rep. Darren Bailey, R-Louisville, told Law360 on Friday that small businesses "are getting hammered" by the state's closing of nonessential businesses and limiting of restaurants to takeout and delivery services.

Bailey said he didn't object to the public safety measures that are in place to curtail the spread of the virus, but believed tax relief would be an effective way to give entrepreneurs a leg up during the pandemic.

"People are getting restless and scared, and there's no timeline for how long this is going to last," Bailey said. "If you have a business that you can't use because the state ordered you to close, it makes sense to us that the government should give up a little bit of the property tax."

Bailey added that the sales tax holiday and property tax abatement would provide some financial relief to residents and homeowners who were recently unemployed because of the COVID-19 restrictions.

But it's unclear how much weight the suggestions would carry because the state General Assembly is dominated by Democrats. Pritzker's office had not yet responded to the letter, Bailey said.

Todd Maisch, president and CEO of the Illinois Chamber of Commerce, told Law360 that the business group is lukewarm on the proposals. Maisch said the chamber would support some measure of property tax relief because Illinois' property taxes are among the highest in the nation, but he said a sales tax holiday might be more harmful to the state's coffers in the long term.

A drop in the sales tax collections could leave lawmakers scrambling to raise other taxes to account for the lost revenue, he said.

"Looking at sales tax in isolation is not the way to go," Masich said. "I think we all know that the state's finances will be in much worse shape at the end of this crisis than at the beginning. As appealing as a sales tax holiday sounds, you'd be creating an upward pressure to make up that revenue through another tax."

The chamber would support the proposed minimum wage freeze in light of the pandemic, he said. Current law will incrementally raise Illinois' minimum wage from $9.25 and hour to $15 an hour by 2025.

Regardless, because the letter's proposals would mostly require legislation, Masich said the state might be better served to provide immediate administrative relief in areas other than taxes because lawmakers are temporarily adjourned due to the threat of the virus.

The letter contained "great impulses," Masich said.

"But we'd be more interested in a holistic approach to changing taxes," he said.

--Editing by Vincent Sherry. 

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