What is the "replacement tax," and why is it called that?

The replacement taxes are revenues received from corporations (including S corporations), partnerships and trusts, collected by the state of Illinois and paid to local governments. Prior to 1979, business entities were required to pay personal property taxes. Legislation then abolished the personal property taxes. To replace the money lost by units of local government and school districts, the replacement tax was enacted. For more information regarding the replacement tax, see Illinois Income Tax Act, Sections 201(c) and (d), and  Replacement Taxes.

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