IVCA Provides Updates for State Legislative Issues 09/16/2026 - IVCA WORKS TO REVERSE QSBS DECOUPLING IN REVENUE BILL

ILLINOIS VENTURE CAPITAL ASSOCIATION ILLINOIS LEGISLATIVE REPORT

David Stricklin / Stricklin & Associates

Wednesday, September 16, 2026

IVCA WORKS TO REVERSE QSBS DECOUPLING IN REVENUE BILL

At the end of every legislative session in Illinois a series of omnibus bills are produced to implement the budget and provide the revenue to close the gaps for spending policy makers want to have in the upcoming fiscal year. In the 2026 legislative session the “revenue omnibus” SB 3019 / PA 104 – 0468 included direction for Illinois to “decouple” from the federal tax code on treatment of Qualified Small Business Stock (QSBS).

PLANTE MORAN ANALYSIS OF ILLINOIS QSBS TREATMENT

The provision was sought by advocates who argue that Illinois should do more to tax wealth and provide more revenue to the state:

ILLINOIS REVENUE ALLIANCE "PROGRESSIVE" TAX AGENDA

It is difficult to reverse a decision such as the one made here. Getting to a final revenue package is balancing act which included over 20 different provisions including changes to sports wagering, taxes on advertising and digital assets. It included the decoupling from the federal code on QSBS 1202, while also extending the Angel Tax Credit through 2032.

ILLINOIS TAXPAYERS’ FEDERATION OMNIBUS ANALYSIS

While working to reverse the decisions made on QSBS, the IVCA is also alerting policy makers that the cumulative effect of misguided policy will harm the Illinois economy and make Illinois less attractive for investment. There is clearly momentum in some camps to tax wealth and change policies which have helped entrepreneurs create companies which provide employment and tax revenue where they are located. The IVCA will continue to encourage policy makers not to lose focus on the value of a thriving VC ecosystem which contributes significantly to the quality of life in Illinois.