Illinois Bank Tax Case Stayed Federally as State Case Proceeds

First Busey Corp. may proceed with its federal lawsuit alleging the Illinois Secretary of State violated its federal constitutional rights by delaying franchise tax collection, but the case is on hold while a parallel state lawsuit goes forward.

US District Court for the Northern District of Illinois Judge Iain D. Johnston declined the secretary’s “kitchen-sink” motion to dismiss, finding that the bank holding company has standing, its dispute is ripe, and the federal Tax Injunction Act doesn’t bar federal jurisdiction at this stage.

But the May 21 opinion stayed the federal case while First Busey’s state court action—filed the same ...