Legislation to impose the gross receipts tax (GRT) and payroll tax measures proposed by the governor will be opposed by the Illinois State Bar Association.

The ISBA Board of Governors voted unanimously on March 30 to take a position against a broad-based tax on total revenues, rather than profits, of service-based entities that include law practices.

“Our strong feeling is that this new tax would adversely affect our members and their clients,” said President Irene F. Bahr of Wheaton.

“Many of our members are solo and small-firm lawyers providing essential legal services to individuals and small businesses,” she pointed out. “Adding a new tax on these services could have unforeseen consequences on the business climate of our state.”

Bahr said that although the state needs to find additional funding sources for health care and education, “the GRT and the proposed payroll tax may not be the fairest method of spreading the costs to all segments of society.”

The GRT of 1.95 percent would apply to all Illinois businesses with annual gross revenues of more than $2 million, and would eventually replace the corporate income tax. The payroll tax would affect employers with 10 or more employees.

Business leaders predicted that such taxes would be passed along to consumers in some form, or force industries to move out of Illinois. Both would affect the state economy negatively.