Illinois HB670 'Comprehensive Fund Administration Services Tax Act'

Illinois HB670 “Comprehensive Fund Administration Services Tax Act”

April 29, 2015

Indicating that our industry is still viewed by some legislators as a revenue target, Rep. Christian L. Mitchell (D., 26th District) on April 20, 2015 introduced The Comprehensive Fund Administration Services Tax Act. This bill, if passed into law, would impose higher costs on the Illinois investment industry at the very time the legislature should be implementing policies that encourage investment and economic growth in our state.

The bill seeks to tax at 3% all so-called “Comprehensive Fund Administration” fees charged to private investment firms, including IVCA members, by firms meeting the criteria:

  • Have a place of business in Illinois
  • AND possess at least $10 billion in capital, funds or assets under management
  • AND provide “Comprehensive fund administration services” means and includes:
    • fund accounting
    • fund consulting
    • partnership accounting
    • third party transfer agency services
    • management company services
    • trustee and fiduciary services

It is imperative that IVCA and our members continue to educate legislators on the benefits of retaining a robust investment community in Illinois.  We know from the experience of the Technology Development Account (TDA) and our annual Portfolio Company of the Year awards that our industry helps Illinois companies to grow and to expand employment, generating significant tax revenue for the state.  To continue to effectively tell this story, we need IVCA members to ENGAGE in the process by sharing case studies and articulating what is working and not working for business in Illinois. 

As part of this effort, in the next month, IVCA will reach out to you, our members, to ask about your firm’s spending on professional service providers, investments in Illinois and the civic engagement of your personnel.  Our goal is to highlight the impact of the venture capital/private equity industry on the economy and civic and philanthropic life of Illinois.  All of the information will remain private.  We will report only aggregate information for all IVCA members.

For now, it appears HB670 will not move forward during this legislative session.  That does not mean it won’t reappear, and a proposal that today impacts only the largest firms can quickly expand to cover all our firms. We will monitor this closely and report back if the situation changes. 

Full text of HB670.