DIGGING DEEPER: State's filing fees among highest in the nation - WREX.com – Rockford’s News Leader

DIGGING DEEPER: State's filing fees among highest in the nation for small business owners

Jobs and the economy are two things voters said are the most important things to them after the November election.

What is Illinois doing to create much-needed jobs?  Some say not enough when it comes to the price startup companies have to pay to become open for business in the state.

Alex von Lugossy turned her passion for repurposing furniture into a career.  She started her business this fall with her mother and fiancee.

"People take you a little more seriously when you say you're Redesigned Relics, LLC," said von Lugossy.

Structuring her business as a limited liability company, or LLC, protects her personal assets from company debts.

"It was definitely expensive to get one," said von Lugossy.  "Especially being first time business owners and not knowing all the costs going into it, the fees start accumulating fast."

LLC filing fees in Illinois are among the highest in the nation and by far the highest in the Midwest.

It costs $500 to incorporate a business in the state as an LLC.  It costs $130 in Wisconsin, $105 in Missouri, $90 in Indiana and just $50 in Iowa.

"That fee should be zero," said Michael Lucci, Director of Jobs and Growth at the Illinois Policy Institute.

The institute is a nonpartisan research and education organization leading the charge against lowering the state's LLC filing fees.

 "Illinois should be doing everything it can to be luring business to the state," said Lucci.  "You could argue that there should be some nominal fee of $10 or $20 so people don't start 20 businesses just for the fun of it."

The risks of going into business for yourself is not lost on a group the Rockford Chamber of Commerce recently hosted at KhlemArboretumm.  They were small and minority business owners or entrepreneurs.  The Chamber of Commerce held the resource fair to help people like Excell Lewis realize his dream.

"The reality is in Rockford, 80-percent of our businesses are small businesses," said Lewis.  "So just to wrap your head around that, if 80-percent of them are small businesses, we need to reduce any barriers to promote the creation of businesses."

Rockford Chamber of Commerce President Einar Forsman said, "We've supported other initiatives in the state to at least cut the LLC fee in half from $500 to $250 dollars and hopefully lower."

For larger companies, LLC fees are not as much of a stumbling block.

"It's far more about workforce and the right location to locate," said Nathan Bryant, President of Development at The Spring Creek Development Group.  His job is to fill a 500,0sq ft business park his company is building is filled.  It's going in along I-90 and Riverside Boulevard in Loves Park.  It is being designed as a live, work and play business community close to a YMCA, the Rockford Aviators Stadium and Sportscore.

"We've got to compete in a region or globally for talent and having the opportunity to create a great environment to do that definitely helps in that conversation," said Bryant.

The site has two tenants confirmed already.  Komax Systems Rockford, Inc., is one of them.  The president of the company said other states tried to lure him away with incentive packages and lower corporate tax rates.

"Right now i think there is sort of a border war going on between Wisconsin and Illinois," said Gene Haffely, Komax Rockford President.  "Illinois is going to have to take a look at the tax structure for corporations.  What kind of training grants are available?  That's really gonna be key to employers."

Komax will stay in Northern Illinois, just in its new location and add at least 25 jobs to the workforce by the end of next year.

von Lugossy plans to stay open for business in Illinois, too.  For her, leaving Northern Illinois, her home state, was never in the cards no matter how high the fee.

"I didn't look at the fees because I knew this is where I wanted to be, but if had more of a could go anywhere attitude, I think that maybe would play into it," said von Lugossy.  "If you have a passion and a drive, you'll figure it out and make it work."

Despite the higher fees, officials from the Secretary of States Office said the number of LLCs formed in the state increased 7-percent a year on average over the last five years.

The state legislature has the power to change the filing fee.  A bill introduced in the State Senate last January would lower the state's LLC fee to $39.  It's still in the legislative process.

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