In today’s climate of economic uncertainty and regulatory flux, robust state-level advocacy is critical. ELFA continues to champion the interests of its members by engaging with lawmakers across the country, ensuring that policy developments reflect the realities of the equipment finance industry.
Recent advocacy efforts have focused on high-impact developments in New York, New Jersey, and Illinois—three states with regulatory and tax policies that can significantly affect the business environment for ELFA members. These efforts are part of ELFA’s ongoing commitment to proactively shape policy and protect a healthy operating environment for the industry.
State Spotlights: New York and New Jersey
New York and New Jersey consistently introduce legislation with wide-ranging implications for commercial finance, making them priority states for targeted outreach. In May, ELFA’s State Government Relations team held in-person meetings with more than a dozen lawmakers and staff in Albany and Trenton to communicate the industry’s value and promote legislative clarity.
New York: Carving Out the Right Approach
In New York, Assembly Bill A4889, sponsored by Assemblyman Khaleel M. Anderson (formerly attributed to Kwani O’Pharrow), seeks to introduce new licensing requirements for commercial finance providers. The bill, as written, risked unintentionally sweeping in well-established equipment finance companies alongside less-regulated actors.
During discussions with policymakers, ELFA’s proposed changes to ensure that equipment finance providers are clearly excluded from the bill’s requirements. Lawmakers responded positively, recognizing the importance of distinguishing between different business models
This development underscores the power of education in the legislative process. When policymakers understand the structure and standards of the equipment finance sector, they are more inclined to support thoughtful, tailored policy over blanket regulations.
New Jersey: A Shift in Momentum
In Trenton, attention centered on NJ S1397, legislation aimed at increasing transparency through commercial financing disclosure requirements. While the goal of transparency is shared, the bill raised concerns by omitting exemptions for equipment finance transactions.
Previously stalled conversations with the bill’s sponsor gave way to new progress following a meeting with Senator Paul Sarlo, Chair of the Senate Budget and Appropriations Committee. Senator Sarlo expressed alignment with the industry's concerns and indicated support for including exemptions.
This pivot highlights the impact of ongoing, relationship-based advocacy. Legislative outcomes often hinge not just on policy arguments, but on trust built through sustained engagement.
Illinois: A New Tax Framework for Lease Transactions
Beginning January 1, 2025, Illinois began a major tax policy change affecting lease transactions. Under the new system, leased property will no longer be taxed at the point of purchase if the transaction qualifies for resale treatment. Instead, sales tax will be applied to lease payments throughout the lease term.
Key features of the new framework include:
- Shift from upfront to ongoing taxation: Tax will now be collected from lessees over time, potentially easing cash flow for lessors.
- Destination-based sourcing: Tax rates will be based on the location where the lessee takes possession, not where the lessor is based.
- Increased compliance obligations: Lessors will assume new responsibilities related to tax collection, remittance, and documentation.
While aligning Illinois with the majority of other states, this change introduces administrative challenges. ELFA is actively evaluating strategies to support members during the transition. Members are encouraged to consult Illinois Department of Revenue Publication 113-L for detailed guidance.
Looking Ahead: Policy Shaped by Partnership
Effective advocacy goes beyond a single meeting or issue. It’s about long-term engagement—being at the table early, providing informed input, and demonstrating the industry’s commitment to compliance, transparency, and economic value.
The ELFA Public Policy team remains focused on:
- Monitoring legislation before it gains traction
- Developing clear, reasoned policy alternatives
- Engaging members in advocacy efforts
- Expanding relationships in state legislatures across the country
With continued member support, ELFA is helping to create a resilient, forward-looking regulatory environment that fosters growth and innovation in equipment finance.