Rep. Michael J. Zalewski

Filed: 11/4/2013

 

 


 

 


 
09800SB1448ham002LRB098 06730 HLH 49550 a

1
AMENDMENT TO SENATE BILL 1448

2    AMENDMENT NO. ______. Amend Senate Bill 1448 by replacing
3everything after the enacting clause with the following:
 
4    "Section 5. The Economic Development for a Growing Economy
5Tax Credit Act is amended by changing Section 5-15 as follows:
 
6    (35 ILCS 10/5-15)
7    Sec. 5-15. Tax Credit Awards. Subject to the conditions set
8forth in this Act, a Taxpayer is entitled to a Credit against
9or, as described in subsection (g) of this Section, a payment
10towards taxes imposed pursuant to subsections (a) and (b) of
11Section 201 of the Illinois Income Tax Act that may be imposed
12on the Taxpayer for a taxable year beginning on or after
13January 1, 1999, if the Taxpayer is awarded a Credit by the
14Department under this Act for that taxable year.
15    (a) The Department shall make Credit awards under this Act
16to foster job creation and retention in Illinois.

 

 

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1    (b) A person that proposes a project to create new jobs in
2Illinois must enter into an Agreement with the Department for
3the Credit under this Act.
4    (c) The Credit shall be claimed for the taxable years
5specified in the Agreement.
6    (d) The Credit shall not exceed the Incremental Income Tax
7attributable to the project that is the subject of the
8Agreement.
9    (e) Nothing herein shall prohibit a Tax Credit Award to an
10Applicant that uses a PEO if all other award criteria are
11satisfied.
12    (f) In lieu of the Credit allowed under this Act against
13the taxes imposed pursuant to subsections (a) and (b) of
14Section 201 of the Illinois Income Tax Act for any taxable year
15ending on or after December 31, 2009, the Taxpayer may elect to
16claim the Credit against its obligation to pay over withholding
17under Section 704A of the Illinois Income Tax Act.
18        (1) The election under this subsection (f) may be made
19    only by a Taxpayer that (i) is primarily engaged in one of
20    the following business activities: water purification and
21    treatment, motor vehicle metal stamping, automobile
22    manufacturing, automobile and light duty motor vehicle
23    manufacturing, motor vehicle manufacturing, light truck
24    and utility vehicle manufacturing, heavy duty truck
25    manufacturing, motor vehicle body manufacturing, cable
26    television infrastructure design or manufacturing, or

 

 

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1    wireless telecommunication or computing terminal device
2    design or manufacturing for use on public networks and (ii)
3    meets the following criteria:
4            (A) the Taxpayer (i) had an Illinois net loss or an
5        Illinois net loss deduction under Section 207 of the
6        Illinois Income Tax Act for the taxable year in which
7        the Credit is awarded, (ii) employed a minimum of 1,000
8        full-time employees in this State during the taxable
9        year in which the Credit is awarded, (iii) has an
10        Agreement under this Act on December 14, 2009 (the
11        effective date of Public Act 96-834), and (iv) is in
12        compliance with all provisions of that Agreement;
13            (B) the Taxpayer (i) had an Illinois net loss or an
14        Illinois net loss deduction under Section 207 of the
15        Illinois Income Tax Act for the taxable year in which
16        the Credit is awarded, (ii) employed a minimum of 1,000
17        full-time employees in this State during the taxable
18        year in which the Credit is awarded, and (iii) has
19        applied for an Agreement within 365 days after December
20        14, 2009 (the effective date of Public Act 96-834);
21            (C) the Taxpayer (i) had an Illinois net operating
22        loss carryforward under Section 207 of the Illinois
23        Income Tax Act in a taxable year ending during calendar
24        year 2008, (ii) has applied for an Agreement within 150
25        days after the effective date of this amendatory Act of
26        the 96th General Assembly, (iii) creates at least 400

 

 

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1        new jobs in Illinois, (iv) retains at least 2,000 jobs
2        in Illinois that would have been at risk of relocation
3        out of Illinois over a 10-year period, and (v) makes a
4        capital investment of at least $75,000,000;
5            (D) the Taxpayer (i) had an Illinois net operating
6        loss carryforward under Section 207 of the Illinois
7        Income Tax Act in a taxable year ending during calendar
8        year 2009, (ii) has applied for an Agreement within 150
9        days after the effective date of this amendatory Act of
10        the 96th General Assembly, (iii) creates at least 150
11        new jobs, (iv) retains at least 1,000 jobs in Illinois
12        that would have been at risk of relocation out of
13        Illinois over a 10-year period, and (v) makes a capital
14        investment of at least $57,000,000; or
15            (E) the Taxpayer (i) employed at least 2,500
16        full-time employees in the State during the year in
17        which the Credit is awarded, (ii) commits to make at
18        least $500,000,000 in combined capital improvements
19        and project costs under the Agreement, (iii) applies
20        for an Agreement between January 1, 2011 and June 30,
21        2011, (iv) executes an Agreement for the Credit during
22        calendar year 2011, and (v) was incorporated no more
23        than 5 years before the filing of an application for an
24        Agreement.
25        (1.5) The election under this subsection (f) may also
26    be made by a Taxpayer for any Credit awarded pursuant to an

 

 

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1    agreement that was executed between January 1, 2011 and
2    June 30, 2011, if the Taxpayer (i) is primarily engaged in
3    the manufacture of inner tubes or tires, or both, from
4    natural and synthetic rubber, (ii) employs a minimum of
5    2,400 full-time employees in Illinois at the time of
6    application, (iii) creates at least 350 full-time jobs and
7    retains at least 250 full-time jobs in Illinois that would
8    have been at risk of being created or retained outside of
9    Illinois, and (iv) makes a capital investment of at least
10    $200,000,000 at the project location.
11        (1.6) The election under this subsection (f) may also
12    be made by a Taxpayer for any Credit awarded pursuant to an
13    agreement that was executed within 150 days after the
14    effective date of this amendatory Act of the 97th General
15    Assembly, if the Taxpayer (i) is primarily engaged in the
16    operation of a discount department store, (ii) maintains
17    its corporate headquarters in Illinois, (iii) employs a
18    minimum of 4,250 full-time employees at its corporate
19    headquarters in Illinois at the time of application, (iv)
20    retains at least 4,250 full-time jobs in Illinois that
21    would have been at risk of being relocated outside of
22    Illinois, (v) had a minimum of $40,000,000,000 in total
23    revenue in 2010, and (vi) makes a capital investment of at
24    least $300,000,000 at the project location.
25        (1.7) Notwithstanding any other provision of law, the
26    election under this subsection (f) may also be made by a

 

 

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1    Taxpayer for any Credit awarded pursuant to an agreement
2    that was executed or applied for on or after July 1, 2011
3    and on or before March 31, 2012, if the Taxpayer is
4    primarily engaged in the manufacture of original and
5    aftermarket filtration parts and products for automobiles,
6    motor vehicles, light duty motor vehicles, light trucks and
7    utility vehicles, and heavy duty trucks, (ii) employs a
8    minimum of 1,000 full-time employees in Illinois at the
9    time of application, (iii) creates at least 250 full-time
10    jobs in Illinois, (iv) relocates its corporate
11    headquarters to Illinois from another state, and (v) makes
12    a capital investment of at least $4,000,000 at the project
13    location.
14        (1.8) Notwithstanding any other provision of law, an
15    election under this subsection (f) may also be made by a
16    Taxpayer that:
17            (A) is primarily engaged in business as a
18        distributor of industrial and specialty chemicals;
19            (B) relocates its corporate headquarters to
20        Illinois from another State; and
21            (C) entered into an Agreement for a Credit prior to
22        the effective date of this amendatory Act of the 98th
23        General Assembly, which required the Taxpayer to (i)
24        make a capital investment of at least $9,300,000, (ii)
25        retain at least 100 full-time jobs at project locations
26        in Illinois, and (iii) create at least 69 full-time

 

 

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1        jobs at project locations in Illinois.
2        (2) An election under this subsection shall allow the
3    credit to be taken against payments otherwise due under
4    Section 704A of the Illinois Income Tax Act during the
5    first calendar year beginning after the end of the taxable
6    year in which the credit is awarded under this Act, except
7    that an election under paragraph (1.8) shall allow the
8    credit to be taken against payments otherwise due under
9    Section 704A of the Illinois Income Tax Act during the
10    12-month period beginning with the first month after the
11    Taxpayer relocates its corporate headquarters to Illinois.
12        (3) The election shall be made in the form and manner
13    required by the Illinois Department of Revenue and, once
14    made, shall be irrevocable.
15        (4) If a Taxpayer who meets the requirements of
16    subparagraph (A) of paragraph (1) of this subsection (f)
17    elects to claim the Credit against its withholdings as
18    provided in this subsection (f), then, on and after the
19    date of the election, the terms of the Agreement between
20    the Taxpayer and the Department may not be further amended
21    during the term of the Agreement.
22    (g) A pass-through entity that has been awarded a credit
23under this Act, its shareholders, or its partners may treat
24some or all of the credit awarded pursuant to this Act as a tax
25payment for purposes of the Illinois Income Tax Act. The term
26"tax payment" means a payment as described in Article 6 or

 

 

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1Article 8 of the Illinois Income Tax Act or a composite payment
2made by a pass-through entity on behalf of any of its
3shareholders or partners to satisfy such shareholders' or
4partners' taxes imposed pursuant to subsections (a) and (b) of
5Section 201 of the Illinois Income Tax Act. In no event shall
6the amount of the award credited pursuant to this Act exceed
7the Illinois income tax liability of the pass-through entity or
8its shareholders or partners for the taxable year.
9(Source: P.A. 96-834, eff. 12-14-09; 96-836, eff. 12-16-09;
1096-905, eff. 6-4-10; 96-1000, eff. 7-2-10; 96-1534, eff.
113-4-11; 97-2, eff. 5-6-11; 97-636, eff. 6-1-12.)
 
12    Section 10. The Service Use Tax Act is amended by changing
13Section 3-70 as follows:
 
14    (35 ILCS 110/3-70)
15    Sec. 3-70. Manufacturer's Purchase Credit. For purchases
16of machinery and equipment made on and after January 1, 1995
17and through June 30, 2003, and on and after September 1, 2004
18through August 30, 2014, a purchaser of manufacturing machinery
19and equipment that qualifies for the exemption provided by
20Section 2 of this Act earns a credit in an amount equal to a
21fixed percentage of the tax which would have been incurred
22under this Act on those purchases. For purchases of graphic
23arts machinery and equipment made on or after July 1, 1996
24through June 30, 2003, and on and after September 1, 2004

 

 

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1through August 30, 2014, a purchase of graphic arts machinery
2and equipment that qualifies for the exemption provided by
3paragraph (5) of Section 3-5 of this Act earns a credit in an
4amount equal to a fixed percentage of the tax that would have
5been incurred under this Act on those purchases. The credit
6earned for the purchase of manufacturing machinery and
7equipment and graphic arts machinery and equipment shall be
8referred to as the Manufacturer's Purchase Credit. A graphic
9arts producer is a person engaged in graphic arts production as
10defined in Section 3-30 of the Service Occupation Tax Act.
11Beginning July 1, 1996, all references in this Section to
12manufacturers or manufacturing shall also refer to graphic arts
13producers or graphic arts production.
14    The amount of credit shall be a percentage of the tax that
15would have been incurred on the purchase of the manufacturing
16machinery and equipment or graphic arts machinery and equipment
17if the exemptions provided by Section 2 or paragraph (5) of
18Section 3-5 of this Act had not been applicable.
19    All purchases prior to October 1, 2003 and on and after
20September 1, 2004 through August 30, 2014 of manufacturing
21machinery and equipment and graphic arts machinery and
22equipment that qualify for the exemptions provided by paragraph
23(5) of Section 2 or paragraph (5) of Section 3-5 of this Act
24qualify for the credit without regard to whether the serviceman
25elected, or could have elected, under paragraph (7) of Section
262 of this Act to exclude the transaction from this Act. If the

 

 

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1serviceman's billing to the service customer separately states
2a selling price for the exempt manufacturing machinery or
3equipment or the exempt graphic arts machinery and equipment,
4the credit shall be calculated, as otherwise provided herein,
5based on that selling price. If the serviceman's billing does
6not separately state a selling price for the exempt
7manufacturing machinery and equipment or the exempt graphic
8arts machinery and equipment, the credit shall be calculated,
9as otherwise provided herein, based on 50% of the entire
10billing. If the serviceman contracts to design, develop, and
11produce special order manufacturing machinery and equipment or
12special order graphic arts machinery and equipment, and the
13billing does not separately state a selling price for such
14special order machinery and equipment, the credit shall be
15calculated, as otherwise provided herein, based on 50% of the
16entire billing. The provisions of this paragraph are effective
17for purchases made on or after January 1, 1995.
18    The percentage shall be as follows:
19        (1) 15% for purchases made on or before June 30, 1995.
20        (2) 25% for purchases made after June 30, 1995, and on
21    or before June 30, 1996.
22        (3) 40% for purchases made after June 30, 1996, and on
23    or before June 30, 1997.
24        (4) 50% for purchases made on or after July 1, 1997.
25    (a) Manufacturer's Purchase Credit earned prior to July 1,
262003. This subsection (a) applies to Manufacturer's Purchase

 

 

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1Credit earned prior to July 1, 2003. A purchaser of production
2related tangible personal property desiring to use the
3Manufacturer's Purchase Credit shall certify to the seller
4prior to October 1, 2003 that the purchaser is satisfying all
5or part of the liability under the Use Tax Act or the Service
6Use Tax Act that is due on the purchase of the production
7related tangible personal property by use of a Manufacturer's
8Purchase Credit. The Manufacturer's Purchase Credit
9certification must be dated and shall include the name and
10address of the purchaser, the purchaser's registration number,
11if registered, the credit being applied, and a statement that
12the State Use Tax or Service Use Tax liability is being
13satisfied with the manufacturer's or graphic arts producer's
14accumulated purchase credit. Certification may be incorporated
15into the manufacturer's or graphic arts producer's purchase
16order. Manufacturer's Purchase Credit certification provided
17by the manufacturer or graphic arts producer prior to October
181, 2003 may be used to satisfy the retailer's or serviceman's
19liability under the Retailers' Occupation Tax Act or Service
20Occupation Tax Act for the credit claimed, not to exceed 6.25%
21of the receipts subject to tax from a qualifying purchase, but
22only if the retailer or serviceman reports the Manufacturer's
23Purchase Credit claimed as required by the Department. A
24Manufacturer's Purchase Credit reported on any original or
25amended return filed under this Act after October 20, 2003
26shall be disallowed. The Manufacturer's Purchase Credit earned

 

 

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1by purchase of exempt manufacturing machinery and equipment or
2graphic arts machinery and equipment is a non-transferable
3credit. A manufacturer or graphic arts producer that enters
4into a contract involving the installation of tangible personal
5property into real estate within a manufacturing or graphic
6arts production facility, prior to October 1, 2003, may
7authorize a construction contractor to utilize credit
8accumulated by the manufacturer or graphic arts producer to
9purchase the tangible personal property. A manufacturer or
10graphic arts producer intending to use accumulated credit to
11purchase such tangible personal property shall execute a
12written contract authorizing the contractor to utilize a
13specified dollar amount of credit. The contractor shall
14furnish, prior to October 1, 2003, the supplier with the
15manufacturer's or graphic arts producer's name, registration
16or resale number, and a statement that a specific amount of the
17Use Tax or Service Use Tax liability, not to exceed 6.25% of
18the selling price, is being satisfied with the credit. The
19manufacturer or graphic arts producer shall remain liable to
20timely report all information required by the annual Report of
21Manufacturer's Purchase Credit Used for credit utilized by a
22construction contractor.
23    No Manufacturer's Purchase Credit earned prior to July 1,
242003 may be used after October 1, 2003. The Manufacturer's
25Purchase Credit may be used to satisfy liability under the Use
26Tax Act or the Service Use Tax Act due on the purchase of

 

 

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1production related tangible personal property (including
2purchases by a manufacturer, by a graphic arts producer, or a
3lessor who rents or leases the use of the property to a
4manufacturer or graphic arts producer) that does not otherwise
5qualify for the manufacturing machinery and equipment
6exemption or the graphic arts machinery and equipment
7exemption. "Production related tangible personal property"
8means (i) all tangible personal property used or consumed by
9the purchaser in a manufacturing facility in which a
10manufacturing process described in Section 2-45 of the
11Retailers' Occupation Tax Act takes place, including tangible
12personal property purchased for incorporation into real estate
13within a manufacturing facility and including, but not limited
14to, tangible personal property used or consumed in activities
15such as pre-production material handling, receiving, quality
16control, inventory control, storage, staging, and packaging
17for shipping and transportation purposes; (ii) all tangible
18personal property used or consumed by the purchaser in a
19graphic arts facility in which graphic arts production as
20described in Section 2-30 of the Retailers' Occupation Tax Act
21takes place, including tangible personal property purchased
22for incorporation into real estate within a graphic arts
23facility and including, but not limited to, all tangible
24personal property used or consumed in activities such as
25graphic arts preliminary or pre-press production,
26pre-production material handling, receiving, quality control,

 

 

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1inventory control, storage, staging, sorting, labeling,
2mailing, tying, wrapping, and packaging; and (iii) all tangible
3personal property used or consumed by the purchaser for
4research and development. "Production related tangible
5personal property" does not include (i) tangible personal
6property used, within or without a manufacturing or graphic
7arts facility, in sales, purchasing, accounting, fiscal
8management, marketing, personnel recruitment or selection, or
9landscaping or (ii) tangible personal property required to be
10titled or registered with a department, agency, or unit of
11federal, state, or local government. The Manufacturer's
12Purchase Credit may be used, prior to October 1, 2003, to
13satisfy the tax arising either from the purchase of machinery
14and equipment on or after January 1, 1995 for which the
15manufacturing machinery and equipment exemption provided by
16Section 2 of this Act was erroneously claimed, or the purchase
17of machinery and equipment on or after July 1, 1996 for which
18the exemption provided by paragraph (5) of Section 3-5 of this
19Act was erroneously claimed, but not in satisfaction of
20penalty, if any, and interest for failure to pay the tax when
21due. A purchaser of production related tangible personal
22property who is required to pay Illinois Use Tax or Service Use
23Tax on the purchase directly to the Department may, prior to
24October 1, 2003, utilize the Manufacturer's Purchase Credit in
25satisfaction of the tax arising from that purchase, but not in
26satisfaction of penalty and interest. A purchaser who uses the

 

 

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1Manufacturer's Purchase Credit to purchase property which is
2later determined not to be production related tangible personal
3property may be liable for tax, penalty, and interest on the
4purchase of that property as of the date of purchase but shall
5be entitled to use the disallowed Manufacturer's Purchase
6Credit, so long as it has not expired and is used prior to
7October 1, 2003, on qualifying purchases of production related
8tangible personal property not previously subject to credit
9usage. The Manufacturer's Purchase Credit earned by a
10manufacturer or graphic arts producer expires the last day of
11the second calendar year following the calendar year in which
12the credit arose. No Manufacturer's Purchase Credit may be used
13after September 30, 2003 regardless of when that credit was
14earned.
15    A purchaser earning Manufacturer's Purchase Credit shall
16sign and file an annual Report of Manufacturer's Purchase
17Credit Earned for each calendar year no later than the last day
18of the sixth month following the calendar year in which a
19Manufacturer's Purchase Credit is earned. A Report of
20Manufacturer's Purchase Credit Earned shall be filed on forms
21as prescribed or approved by the Department and shall state,
22for each month of the calendar year: (i) the total purchase
23price of all purchases of exempt manufacturing or graphic arts
24machinery on which the credit was earned; (ii) the total State
25Use Tax or Service Use Tax which would have been due on those
26items; (iii) the percentage used to calculate the amount of

 

 

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1credit earned; (iv) the amount of credit earned; and (v) such
2other information as the Department may reasonably require. A
3purchaser earning Manufacturer's Purchase Credit shall
4maintain records which identify, as to each purchase of
5manufacturing or graphic arts machinery and equipment on which
6the purchaser earned Manufacturer's Purchase Credit, the
7vendor (including, if applicable, either the vendor's
8registration number or Federal Employer Identification
9Number), the purchase price, and the amount of Manufacturer's
10Purchase Credit earned on each purchase.
11    A purchaser using Manufacturer's Purchase Credit shall
12sign and file an annual Report of Manufacturer's Purchase
13Credit Used for each calendar year no later than the last day
14of the sixth month following the calendar year in which a
15Manufacturer's Purchase Credit is used. A Report of
16Manufacturer's Purchase Credit Used shall be filed on forms as
17prescribed or approved by the Department and shall state, for
18each month of the calendar year: (i) the total purchase price
19of production related tangible personal property purchased
20from Illinois suppliers; (ii) the total purchase price of
21production related tangible personal property purchased from
22out-of-state suppliers; (iii) the total amount of credit used
23during such month; and (iv) such other information as the
24Department may reasonably require. A purchaser using
25Manufacturer's Purchase Credit shall maintain records that
26identify, as to each purchase of production related tangible

 

 

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1personal property on which the purchaser used Manufacturer's
2Purchase Credit, the vendor (including, if applicable, either
3the vendor's registration number or Federal Employer
4Identification Number), the purchase price, and the amount of
5Manufacturer's Purchase Credit used on each purchase.
6    No annual report shall be filed before May 1, 1996 or after
7June 30, 2004. A purchaser that fails to file an annual Report
8of Manufacturer's Purchase Credit Earned or an annual Report of
9Manufacturer's Purchase Credit Used by the last day of the
10sixth month following the end of the calendar year shall
11forfeit all Manufacturer's Purchase Credit for that calendar
12year unless it establishes that its failure to file was due to
13reasonable cause. Manufacturer's Purchase Credit reports may
14be amended to report and claim credit on qualifying purchases
15not previously reported at any time before the credit would
16have expired, unless both the Department and the purchaser have
17agreed to an extension of the statute of limitations for the
18issuance of a notice of tax liability as provided in Section 4
19of the Retailers' Occupation Tax Act. If the time for
20assessment or refund has been extended, then amended reports
21for a calendar year may be filed at any time prior to the date
22to which the statute of limitations for the calendar year or
23portion thereof has been extended. No Manufacturer's Purchase
24Credit report filed with the Department for periods prior to
25January 1, 1995 shall be approved. Manufacturer's Purchase
26Credit claimed on an amended report may be used, prior to

 

 

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1October 1, 2003, to satisfy tax liability under the Use Tax Act
2or the Service Use Tax Act (i) on qualifying purchases of
3production related tangible personal property made after the
4date the amended report is filed or (ii) assessed by the
5Department on qualifying purchases of production related
6tangible personal property made in the case of manufacturers on
7or after January 1, 1995, or in the case of graphic arts
8producers on or after July 1, 1996.
9    If the purchaser is not the manufacturer or a graphic arts
10producer, but rents or leases the use of the property to a
11manufacturer or a graphic arts producer, the purchaser may
12earn, report, and use Manufacturer's Purchase Credit in the
13same manner as a manufacturer or graphic arts producer.
14    A purchaser shall not be entitled to any Manufacturer's
15Purchase Credit for a purchase that is required to be reported
16and is not timely reported as provided in this Section. A
17purchaser remains liable for (i) any tax that was satisfied by
18use of a Manufacturer's Purchase Credit, as of the date of
19purchase, if that use is not timely reported as required in
20this Section and (ii) for any applicable penalties and interest
21for failing to pay the tax when due. No Manufacturer's Purchase
22Credit may be used after September 30, 2003 to satisfy any tax
23liability imposed under this Act, including any audit
24liability.
25    (b) Manufacturer's Purchase Credit earned on and after
26September 1, 2004. This subsection (b) applies to

 

 

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1Manufacturer's Purchase Credit earned on or after September 1,
22004. Manufacturer's Purchase Credit earned on or after
3September 1, 2004 may only be used to satisfy the Use Tax or
4Service Use Tax liability incurred on production related
5tangible personal property purchased on or after September 1,
62004. A purchaser of production related tangible personal
7property desiring to use the Manufacturer's Purchase Credit
8shall certify to the seller that the purchaser is satisfying
9all or part of the liability under the Use Tax Act or the
10Service Use Tax Act that is due on the purchase of the
11production related tangible personal property by use of a
12Manufacturer's Purchase Credit. The Manufacturer's Purchase
13Credit certification must be dated and shall include the name
14and address of the purchaser, the purchaser's registration
15number, if registered, the credit being applied, and a
16statement that the State Use Tax or Service Use Tax liability
17is being satisfied with the manufacturer's or graphic arts
18producer's accumulated purchase credit. Certification may be
19incorporated into the manufacturer's or graphic arts
20producer's purchase order. Manufacturer's Purchase Credit
21certification provided by the manufacturer or graphic arts
22producer may be used to satisfy the retailer's or serviceman's
23liability under the Retailers' Occupation Tax Act or Service
24Occupation Tax Act for the credit claimed, not to exceed 6.25%
25of the receipts subject to tax from a qualifying purchase, but
26only if the retailer or serviceman reports the Manufacturer's

 

 

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1Purchase Credit claimed as required by the Department. The
2Manufacturer's Purchase Credit earned by purchase of exempt
3manufacturing machinery and equipment or graphic arts
4machinery and equipment is a non-transferable credit. A
5manufacturer or graphic arts producer that enters into a
6contract involving the installation of tangible personal
7property into real estate within a manufacturing or graphic
8arts production facility may, on or after September 1, 2004,
9authorize a construction contractor to utilize credit
10accumulated by the manufacturer or graphic arts producer to
11purchase the tangible personal property. A manufacturer or
12graphic arts producer intending to use accumulated credit to
13purchase such tangible personal property shall execute a
14written contract authorizing the contractor to utilize a
15specified dollar amount of credit. The contractor shall furnish
16the supplier with the manufacturer's or graphic arts producer's
17name, registration or resale number, and a statement that a
18specific amount of the Use Tax or Service Use Tax liability,
19not to exceed 6.25% of the selling price, is being satisfied
20with the credit. The manufacturer or graphic arts producer
21shall remain liable to timely report all information required
22by the annual Report of Manufacturer's Purchase Credit Used for
23credit utilized by a construction contractor.
24    The Manufacturer's Purchase Credit may be used to satisfy
25liability under the Use Tax Act or the Service Use Tax Act due
26on the purchase, made on or after September 1, 2004, of

 

 

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1production related tangible personal property (including
2purchases by a manufacturer, by a graphic arts producer, or a
3lessor who rents or leases the use of the property to a
4manufacturer or graphic arts producer) that does not otherwise
5qualify for the manufacturing machinery and equipment
6exemption or the graphic arts machinery and equipment
7exemption. "Production related tangible personal property"
8means (i) all tangible personal property used or consumed by
9the purchaser in a manufacturing facility in which a
10manufacturing process described in Section 2-45 of the
11Retailers' Occupation Tax Act takes place, including tangible
12personal property purchased for incorporation into real estate
13within a manufacturing facility and including, but not limited
14to, tangible personal property used or consumed in activities
15such as pre-production material handling, receiving, quality
16control, inventory control, storage, staging, and packaging
17for shipping and transportation purposes; (ii) all tangible
18personal property used or consumed by the purchaser in a
19graphic arts facility in which graphic arts production as
20described in Section 2-30 of the Retailers' Occupation Tax Act
21takes place, including tangible personal property purchased
22for incorporation into real estate within a graphic arts
23facility and including, but not limited to, all tangible
24personal property used or consumed in activities such as
25graphic arts preliminary or pre-press production,
26pre-production material handling, receiving, quality control,

 

 

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1inventory control, storage, staging, sorting, labeling,
2mailing, tying, wrapping, and packaging; and (iii) all tangible
3personal property used or consumed by the purchaser for
4research and development. "Production related tangible
5personal property" does not include (i) tangible personal
6property used, within or without a manufacturing or graphic
7arts facility, in sales, purchasing, accounting, fiscal
8management, marketing, personnel recruitment or selection, or
9landscaping or (ii) tangible personal property required to be
10titled or registered with a department, agency, or unit of
11federal, state, or local government. The Manufacturer's
12Purchase Credit may be used to satisfy the tax arising either
13from the purchase of machinery and equipment on or after
14September 1, 2004 for which the manufacturing machinery and
15equipment exemption provided by Section 2 of this Act was
16erroneously claimed, or the purchase of machinery and equipment
17on or after September 1, 2004 for which the exemption provided
18by paragraph (5) of Section 3-5 of this Act was erroneously
19claimed, but not in satisfaction of penalty, if any, and
20interest for failure to pay the tax when due. A purchaser of
21production related tangible personal property that is
22purchased on or after September 1, 2004 who is required to pay
23Illinois Use Tax or Service Use Tax on the purchase directly to
24the Department may utilize the Manufacturer's Purchase Credit
25in satisfaction of the tax arising from that purchase, but not
26in satisfaction of penalty and interest. A purchaser who uses

 

 

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1the Manufacturer's Purchase Credit to purchase property on and
2after September 1, 2004 which is later determined not to be
3production related tangible personal property may be liable for
4tax, penalty, and interest on the purchase of that property as
5of the date of purchase but shall be entitled to use the
6disallowed Manufacturer's Purchase Credit, so long as it has
7not expired, on qualifying purchases of production related
8tangible personal property not previously subject to credit
9usage. The Manufacturer's Purchase Credit earned by a
10manufacturer or graphic arts producer expires the last day of
11the second calendar year following the calendar year in which
12the credit arose.
13    A purchaser earning Manufacturer's Purchase Credit shall
14sign and file an annual Report of Manufacturer's Purchase
15Credit Earned for each calendar year no later than the last day
16of the sixth month following the calendar year in which a
17Manufacturer's Purchase Credit is earned. A Report of
18Manufacturer's Purchase Credit Earned shall be filed on forms
19as prescribed or approved by the Department and shall state,
20for each month of the calendar year: (i) the total purchase
21price of all purchases of exempt manufacturing or graphic arts
22machinery on which the credit was earned; (ii) the total State
23Use Tax or Service Use Tax which would have been due on those
24items; (iii) the percentage used to calculate the amount of
25credit earned; (iv) the amount of credit earned; and (v) such
26other information as the Department may reasonably require. A

 

 

09800SB1448ham002- 24 -LRB098 06730 HLH 49550 a

1purchaser earning Manufacturer's Purchase Credit shall
2maintain records which identify, as to each purchase of
3manufacturing or graphic arts machinery and equipment on which
4the purchaser earned Manufacturer's Purchase Credit, the
5vendor (including, if applicable, either the vendor's
6registration number or Federal Employer Identification
7Number), the purchase price, and the amount of Manufacturer's
8Purchase Credit earned on each purchase.
9    A purchaser using Manufacturer's Purchase Credit shall
10sign and file an annual Report of Manufacturer's Purchase
11Credit Used for each calendar year no later than the last day
12of the sixth month following the calendar year in which a
13Manufacturer's Purchase Credit is used. A Report of
14Manufacturer's Purchase Credit Used shall be filed on forms as
15prescribed or approved by the Department and shall state, for
16each month of the calendar year: (i) the total purchase price
17of production related tangible personal property purchased
18from Illinois suppliers; (ii) the total purchase price of
19production related tangible personal property purchased from
20out-of-state suppliers; (iii) the total amount of credit used
21during such month; and (iv) such other information as the
22Department may reasonably require. A purchaser using
23Manufacturer's Purchase Credit shall maintain records that
24identify, as to each purchase of production related tangible
25personal property on which the purchaser used Manufacturer's
26Purchase Credit, the vendor (including, if applicable, either

 

 

09800SB1448ham002- 25 -LRB098 06730 HLH 49550 a

1the vendor's registration number or Federal Employer
2Identification Number), the purchase price, and the amount of
3Manufacturer's Purchase Credit used on each purchase.
4    A purchaser that fails to file an annual Report of
5Manufacturer's Purchase Credit Earned or an annual Report of
6Manufacturer's Purchase Credit Used by the last day of the
7sixth month following the end of the calendar year shall
8forfeit all Manufacturer's Purchase Credit for that calendar
9year unless it establishes that its failure to file was due to
10reasonable cause. Manufacturer's Purchase Credit reports may
11be amended to report and claim credit on qualifying purchases
12not previously reported at any time before the credit would
13have expired, unless both the Department and the purchaser have
14agreed to an extension of the statute of limitations for the
15issuance of a notice of tax liability as provided in Section 4
16of the Retailers' Occupation Tax Act. If the time for
17assessment or refund has been extended, then amended reports
18for a calendar year may be filed at any time prior to the date
19to which the statute of limitations for the calendar year or
20portion thereof has been extended. Manufacturer's Purchase
21Credit claimed on an amended report may be used to satisfy tax
22liability under the Use Tax Act or the Service Use Tax Act (i)
23on qualifying purchases of production related tangible
24personal property made after the date the amended report is
25filed or (ii) assessed by the Department on qualifying
26production related tangible personal property purchased on or

 

 

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1after September 1, 2004.
2    If the purchaser is not the manufacturer or a graphic arts
3producer, but rents or leases the use of the property to a
4manufacturer or a graphic arts producer, the purchaser may
5earn, report, and use Manufacturer's Purchase Credit in the
6same manner as a manufacturer or graphic arts producer. A
7purchaser shall not be entitled to any Manufacturer's Purchase
8Credit for a purchase that is required to be reported and is
9not timely reported as provided in this Section. A purchaser
10remains liable for (i) any tax that was satisfied by use of a
11Manufacturer's Purchase Credit, as of the date of purchase, if
12that use is not timely reported as required in this Section and
13(ii) for any applicable penalties and interest for failing to
14pay the tax when due.
15(Source: P.A. 96-116, eff. 7-31-09.)
 
16    Section 99. Effective date. This Act takes effect upon
17becoming law.".