Full Text of SB1448 98th General Assembly
SB1448ham002 98TH GENERAL ASSEMBLY | Rep. Michael J. Zalewski Filed: 11/4/2013
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| 1 | | AMENDMENT TO SENATE BILL 1448
| 2 | | AMENDMENT NO. ______. Amend Senate Bill 1448 by replacing | 3 | | everything after the enacting clause with the following:
| 4 | | "Section 5. The Economic Development for a Growing Economy | 5 | | Tax 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 | 8 | | forth in this
Act, a Taxpayer is
entitled to a Credit against | 9 | | or, as described in subsection (g) of this Section, a payment | 10 | | towards taxes imposed pursuant to subsections (a) and (b)
of | 11 | | Section 201 of the Illinois
Income Tax Act that may be imposed | 12 | | on the Taxpayer for a taxable year beginning
on or
after | 13 | | January 1, 1999,
if the Taxpayer is awarded a Credit by the | 14 | | Department under this Act for that
taxable year. | 15 | | (a) The Department shall make Credit awards under this Act | 16 | | to foster job
creation and retention in Illinois. |
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| 1 | | (b) A person that proposes a project to create new jobs in | 2 | | Illinois must
enter into an Agreement with the
Department for | 3 | | the Credit under this Act. | 4 | | (c) The Credit shall be claimed for the taxable years | 5 | | specified in the
Agreement. | 6 | | (d) The Credit shall not exceed the Incremental Income Tax | 7 | | attributable to
the project that is the subject of the | 8 | | Agreement. | 9 | | (e) Nothing herein shall prohibit a Tax Credit Award to an | 10 | | Applicant that uses a PEO if all other award criteria are | 11 | | satisfied.
| 12 | | (f) In lieu of the Credit allowed under this Act against | 13 | | the taxes imposed pursuant to subsections (a) and (b) of | 14 | | Section 201 of the Illinois Income Tax Act for any taxable year | 15 | | ending on or after December 31, 2009, the Taxpayer may elect to | 16 | | claim the Credit against its obligation to pay over withholding | 17 | | under 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 | 23 | | under this Act, its shareholders, or its partners may treat | 24 | | some or all of the credit awarded pursuant to this Act as a tax | 25 | | payment 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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| 1 | | Article 8 of the Illinois Income Tax Act or a composite payment | 2 | | made by a pass-through entity on behalf of any of its | 3 | | shareholders or partners to satisfy such shareholders' or | 4 | | partners' taxes imposed pursuant to subsections (a) and (b) of | 5 | | Section 201 of the Illinois Income Tax Act. In no event shall | 6 | | the amount of the award credited pursuant to this Act exceed | 7 | | the Illinois income tax liability of the pass-through entity or | 8 | | its shareholders or partners for the taxable year. | 9 | | (Source: P.A. 96-834, eff. 12-14-09; 96-836, eff. 12-16-09; | 10 | | 96-905, eff. 6-4-10; 96-1000, eff. 7-2-10; 96-1534, eff. | 11 | | 3-4-11; 97-2, eff. 5-6-11; 97-636, eff. 6-1-12 .)
| 12 | | Section 10. The Service Use Tax Act is amended by changing | 13 | | Section 3-70 as follows:
| 14 | | (35 ILCS 110/3-70)
| 15 | | Sec. 3-70. Manufacturer's Purchase Credit. For purchases | 16 | | of machinery and
equipment made on and after January 1, 1995 | 17 | | and through June 30, 2003, and on and after September 1, 2004 | 18 | | through August 30, 2014,
a
purchaser of manufacturing
machinery | 19 | | and equipment that qualifies for the exemption provided by | 20 | | Section
2 of this Act earns a credit in an amount equal to a | 21 | | fixed
percentage of
the tax which would have been incurred | 22 | | under this Act on those purchases.
For purchases of graphic | 23 | | arts machinery and equipment made on or after July
1, 1996 | 24 | | through June 30, 2003, and on and after September 1, 2004 |
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| 1 | | through August 30, 2014, a purchase of graphic arts machinery | 2 | | and
equipment that qualifies for
the exemption provided by | 3 | | paragraph (5) of Section 3-5 of this Act earns a
credit in an | 4 | | amount equal to a fixed percentage of the tax that would have | 5 | | been
incurred under this Act on those purchases.
The credit | 6 | | earned for the purchase of manufacturing machinery and | 7 | | equipment
and graphic arts machinery and equipment shall be | 8 | | referred to
as the Manufacturer's Purchase Credit.
A graphic | 9 | | arts producer is a person engaged in graphic arts production as
| 10 | | defined in Section 3-30 of the Service Occupation Tax Act. | 11 | | Beginning July 1,
1996, all references in this Section to | 12 | | manufacturers or manufacturing shall
also refer to graphic arts | 13 | | producers or graphic arts production.
| 14 | | The amount of credit shall be a percentage of the tax that | 15 | | would have been
incurred on the purchase of the manufacturing | 16 | | machinery and equipment or
graphic arts machinery and equipment
| 17 | | if the
exemptions provided by Section 2 or paragraph (5) of
| 18 | | Section 3-5 of
this Act had not
been applicable.
| 19 | | All purchases prior to October 1, 2003 and on and after | 20 | | September 1, 2004 through August 30, 2014 of manufacturing | 21 | | machinery and
equipment and graphic arts
machinery and | 22 | | equipment that qualify for the exemptions provided by paragraph
| 23 | | (5) of Section 2
or paragraph (5) of Section 3-5 of this Act | 24 | | qualify for the credit without
regard to whether the serviceman | 25 | | elected, or could have elected, under
paragraph (7) of Section | 26 | | 2 of this Act to exclude the transaction from this
Act. If the |
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| 1 | | serviceman's billing to the service customer separately states | 2 | | a
selling price for the exempt manufacturing machinery or | 3 | | equipment or the exempt
graphic arts machinery and equipment, | 4 | | the credit shall be calculated, as
otherwise provided herein, | 5 | | based on that selling price. If the serviceman's
billing does | 6 | | not separately state a selling price for the exempt | 7 | | manufacturing
machinery and equipment or the exempt graphic | 8 | | arts machinery and equipment, the
credit shall be calculated, | 9 | | as otherwise provided herein, based on 50% of the
entire | 10 | | billing. If the serviceman contracts to design, develop, and | 11 | | produce
special order manufacturing machinery and equipment or | 12 | | special order graphic
arts machinery and equipment, and the | 13 | | billing does not separately state a
selling price for such | 14 | | special order machinery and
equipment, the credit shall be | 15 | | calculated, as otherwise provided herein, based
on 50% of the | 16 | | entire billing. The provisions of this paragraph are effective
| 17 | | for 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, | 26 | | 2003. This subsection (a) applies to Manufacturer's Purchase |
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| 1 | | Credit earned prior to July 1, 2003. A purchaser of production | 2 | | related tangible personal property desiring to use
the | 3 | | Manufacturer's Purchase Credit shall certify to the seller | 4 | | prior to
October 1, 2003 that the
purchaser is satisfying all | 5 | | or part of
the
liability under the Use Tax Act or the Service | 6 | | Use Tax Act that is due on the
purchase of the production | 7 | | related tangible personal property by use of a
Manufacturer's | 8 | | Purchase Credit. The Manufacturer's Purchase Credit
| 9 | | certification
must be dated and shall include the name and | 10 | | address of the purchaser, the
purchaser's registration number, | 11 | | if registered, the
credit being
applied, and a statement that | 12 | | the State Use Tax or Service Use Tax liability
is being | 13 | | satisfied with the manufacturer's or graphic arts producer's
| 14 | | accumulated purchase credit.
Certification may be incorporated | 15 | | into the manufacturer's or graphic arts
producer's
purchase | 16 | | order.
Manufacturer's Purchase Credit certification provided | 17 | | by the manufacturer
or graphic
arts producer
prior to October | 18 | | 1, 2003 may be used to satisfy the retailer's or
serviceman's | 19 | | liability under the
Retailers' Occupation Tax Act or
Service
| 20 | | Occupation Tax Act for the credit claimed, not to exceed
6.25% | 21 | | of the receipts subject to tax from a qualifying purchase, but | 22 | | only if
the retailer or serviceman reports the Manufacturer's | 23 | | Purchase Credit claimed
as required by the Department. A | 24 | | Manufacturer's Purchase Credit reported on
any original or | 25 | | amended return
filed under
this Act after October 20, 2003 | 26 | | shall be disallowed. The Manufacturer's
Purchase Credit earned |
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| 1 | | by
purchase of exempt manufacturing machinery and equipment
or | 2 | | graphic arts machinery and equipment is a
non-transferable | 3 | | credit. A manufacturer or graphic arts producer
that enters | 4 | | into a
contract involving the installation of tangible personal | 5 | | property into
real estate within a manufacturing or graphic | 6 | | arts production facility, prior
to October 1, 2003, may | 7 | | authorize a construction contractor
to utilize credit | 8 | | accumulated by the manufacturer or graphic arts producer
to
| 9 | | purchase the tangible personal property. A manufacturer or | 10 | | graphic arts
producer
intending to use accumulated credit to | 11 | | purchase such tangible personal
property shall execute a | 12 | | written contract authorizing the contractor to utilize
a | 13 | | specified dollar amount of credit. The contractor shall | 14 | | furnish, prior to
October 1, 2003, the supplier
with the | 15 | | manufacturer's or graphic arts producer's name, registration | 16 | | or
resale number, and a statement
that a specific amount of the | 17 | | Use Tax or Service Use Tax liability, not to
exceed 6.25% of | 18 | | the selling price, is being satisfied with the credit. The
| 19 | | manufacturer or graphic arts producer shall remain liable to | 20 | | timely report
all information required by
the annual Report of | 21 | | Manufacturer's Purchase Credit Used for credit utilized by
a
| 22 | | construction contractor.
| 23 | | No Manufacturer's Purchase Credit earned prior to July 1, | 24 | | 2003 may be used after October 1, 2003. The Manufacturer's | 25 | | Purchase Credit may be used to satisfy liability under the
Use | 26 | | Tax Act or the Service Use Tax Act due on the purchase of |
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| 1 | | production
related tangible personal property (including | 2 | | purchases by a manufacturer, by
a graphic arts producer,
or a | 3 | | lessor who rents or leases the use of
the property to a | 4 | | manufacturer or graphic arts producer) that does not
otherwise | 5 | | qualify for the manufacturing machinery and equipment
| 6 | | exemption or the graphic arts machinery and equipment | 7 | | exemption.
"Production related tangible personal
property" | 8 | | means (i) all tangible personal property used or consumed by | 9 | | the
purchaser in a manufacturing facility in which a | 10 | | manufacturing process
described in Section 2-45 of the | 11 | | Retailers' Occupation Tax Act
takes place, including tangible | 12 | | personal property purchased for incorporation
into
real estate | 13 | | within a manufacturing facility and including, but not limited
| 14 | | to,
tangible personal property used or consumed in activities | 15 | | such as
pre-production
material handling, receiving, quality | 16 | | control, inventory control, storage,
staging, and packaging | 17 | | for shipping and transportation purposes; (ii)
all tangible | 18 | | personal property used or consumed by the purchaser in a | 19 | | graphic
arts facility in which graphic arts production as | 20 | | described in Section 2-30 of
the Retailers' Occupation Tax Act | 21 | | takes place, including tangible personal
property purchased | 22 | | for incorporation into real estate within a graphic arts
| 23 | | facility and including, but not limited to, all tangible | 24 | | personal property used
or consumed in activities such as | 25 | | graphic arts preliminary or pre-press
production, | 26 | | pre-production material handling, receiving, quality control,
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| 1 | | inventory control, storage, staging, sorting, labeling, | 2 | | mailing, tying,
wrapping, and packaging; and (iii) all tangible | 3 | | personal property used or
consumed by the purchaser
for | 4 | | research and
development. "Production related tangible | 5 | | personal property" does not include
(i) tangible personal | 6 | | property used, within or without a manufacturing or
graphic | 7 | | arts
facility, in sales, purchasing,
accounting, fiscal | 8 | | management, marketing,
personnel recruitment or selection, or | 9 | | landscaping or (ii) tangible personal
property required to be | 10 | | titled or registered with a department, agency, or unit
of | 11 | | federal, state, or local
government. The Manufacturer's | 12 | | Purchase Credit may be used, prior to October
1, 2003, to | 13 | | satisfy the tax
arising either from the purchase of
machinery | 14 | | and equipment on or after January 1, 1995
for which the | 15 | | manufacturing machinery and equipment exemption
provided by | 16 | | Section 2 of this Act was
erroneously claimed, or the purchase | 17 | | of machinery and equipment on or after
July 1, 1996 for which | 18 | | the exemption provided by paragraph (5) of Section 3-5
of this | 19 | | Act was erroneously claimed, but not in
satisfaction of | 20 | | penalty, if any, and interest for failure to pay the tax
when | 21 | | due. A
purchaser of production related tangible personal | 22 | | property who is required to
pay Illinois Use Tax or Service Use | 23 | | Tax on the purchase directly to the
Department may, prior to | 24 | | October 1, 2003, utilize the Manufacturer's
Purchase Credit in | 25 | | satisfaction of
the tax arising from that purchase, but not in
| 26 | | satisfaction of penalty and
interest.
A purchaser who uses the |
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| 1 | | Manufacturer's Purchase Credit to purchase
property
which is | 2 | | later determined not to be production related tangible personal
| 3 | | property may be liable for tax, penalty, and interest on the | 4 | | purchase of that
property as of the date of purchase but shall | 5 | | be entitled to use the disallowed
Manufacturer's Purchase
| 6 | | Credit, so long as it has not expired and is used prior to | 7 | | October 1, 2003,
on qualifying purchases of production
related | 8 | | tangible personal property not previously subject to credit | 9 | | usage.
The Manufacturer's Purchase Credit earned by a | 10 | | manufacturer or graphic arts
producer
expires the last day of | 11 | | the second calendar year following the
calendar year in
which | 12 | | the credit arose. No Manufacturer's Purchase Credit may be used | 13 | | after
September 30, 2003
regardless of
when that credit was | 14 | | earned.
| 15 | | A purchaser earning Manufacturer's Purchase Credit shall | 16 | | sign and file an
annual Report of Manufacturer's Purchase | 17 | | Credit Earned for each calendar year
no later
than the last day | 18 | | of the sixth month following the calendar year in which a
| 19 | | Manufacturer's Purchase Credit is earned. A Report of | 20 | | Manufacturer's Purchase
Credit
Earned shall be filed on forms | 21 | | as prescribed or approved by the Department and
shall state, | 22 | | for each month of the calendar year: (i) the total purchase | 23 | | price
of all purchases of exempt manufacturing or graphic arts | 24 | | machinery on which
the credit was
earned; (ii) the total State | 25 | | Use Tax or Service Use Tax which would have been
due on those | 26 | | items; (iii) the percentage used to calculate the amount of |
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| 1 | | credit
earned; (iv) the amount of credit earned; and (v) such | 2 | | other information as the
Department may reasonably require. A | 3 | | purchaser earning Manufacturer's Purchase
Credit shall | 4 | | maintain records which identify, as to each purchase of
| 5 | | manufacturing or graphic arts machinery and equipment on which | 6 | | the
purchaser earned
Manufacturer's Purchase Credit, the | 7 | | vendor (including, if applicable, either
the vendor's | 8 | | registration number or Federal Employer Identification | 9 | | Number),
the purchase price, and the amount of Manufacturer's | 10 | | Purchase Credit earned on
each purchase.
| 11 | | A purchaser using Manufacturer's Purchase Credit shall | 12 | | sign and file an
annual Report of Manufacturer's Purchase | 13 | | Credit Used for each calendar year no
later than the last day | 14 | | of the sixth month following the calendar year in which
a | 15 | | Manufacturer's Purchase Credit is used. A Report of | 16 | | Manufacturer's Purchase
Credit Used shall be filed on forms as | 17 | | prescribed or approved by the Department
and
shall state, for | 18 | | each month of the calendar year: (i) the total purchase price
| 19 | | of production related tangible personal property purchased | 20 | | from Illinois
suppliers; (ii) the total purchase price
of | 21 | | production related tangible personal property purchased from | 22 | | out-of-state
suppliers; (iii) the total amount of credit used | 23 | | during such month; and (iv)
such
other information as the | 24 | | Department may reasonably require. A purchaser using
| 25 | | Manufacturer's Purchase Credit shall maintain records that | 26 | | identify, as to
each purchase of production related tangible |
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| 1 | | personal property on which the
purchaser used Manufacturer's | 2 | | Purchase Credit, the vendor (including, if
applicable, either | 3 | | the vendor's registration number or Federal Employer
| 4 | | Identification Number), the purchase price, and the amount of | 5 | | Manufacturer's
Purchase Credit used on each purchase.
| 6 | | No annual report shall be filed before May 1, 1996 or after | 7 | | June 30,
2004.
A purchaser that fails to file an annual Report | 8 | | of Manufacturer's Purchase
Credit
Earned or an annual Report of | 9 | | Manufacturer's Purchase Credit Used by the last
day
of the | 10 | | sixth month following the end of the calendar year shall | 11 | | forfeit all
Manufacturer's Purchase Credit for that calendar | 12 | | year unless it establishes
that its failure to file was due to | 13 | | reasonable cause.
Manufacturer's Purchase Credit
reports may | 14 | | be amended to report and claim credit on qualifying purchases | 15 | | not
previously reported at any time before the credit would | 16 | | have expired, unless
both the Department and the purchaser have | 17 | | agreed to an extension of
the statute of limitations for the | 18 | | issuance of a notice of tax liability as
provided in Section 4 | 19 | | of the Retailers' Occupation Tax Act. If the time for
| 20 | | assessment or refund has been extended, then amended reports | 21 | | for a calendar
year may be filed at any time prior to the date | 22 | | to which the statute of
limitations for the calendar year or | 23 | | portion thereof has been extended.
No Manufacturer's Purchase | 24 | | Credit report filed with the Department
for periods
prior to | 25 | | January 1, 1995 shall be approved.
Manufacturer's Purchase | 26 | | Credit claimed on an amended report may be used,
prior to |
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| 1 | | October 1, 2003, to
satisfy tax liability under the Use Tax Act | 2 | | or the Service Use Tax Act (i) on
qualifying purchases of | 3 | | production related tangible personal property made
after the | 4 | | date the amended report is filed or (ii) assessed by the | 5 | | Department
on qualifying purchases of production related | 6 | | tangible personal property made
in the case of manufacturers on | 7 | | or after January 1, 1995, or in the case
of graphic arts | 8 | | producers on or after July 1, 1996.
| 9 | | If the purchaser is not the manufacturer or a graphic arts | 10 | | producer, but
rents or
leases the use of the property to a | 11 | | manufacturer or a graphic arts
producer,
the purchaser may | 12 | | earn, report, and use
Manufacturer's
Purchase Credit in the | 13 | | same manner as a manufacturer or graphic arts
producer.
| 14 | | A purchaser shall not be entitled to any Manufacturer's | 15 | | Purchase
Credit for a purchase that is required to be reported | 16 | | and is not timely
reported as
provided in this Section. A | 17 | | purchaser remains liable for (i) any
tax that was satisfied by | 18 | | use of a Manufacturer's Purchase Credit, as of the
date of | 19 | | purchase, if that use is not timely reported as required in | 20 | | this
Section and (ii) for any applicable penalties and interest | 21 | | for failing to pay
the tax when due. No Manufacturer's Purchase | 22 | | Credit may be used after
September 30, 2003 to
satisfy any
tax | 23 | | liability imposed under this Act, including any audit | 24 | | liability.
| 25 | | (b) Manufacturer's Purchase Credit earned on and after | 26 | | September 1, 2004. This subsection (b) applies to |
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| 1 | | Manufacturer's Purchase Credit earned on or after September 1, | 2 | | 2004. Manufacturer's Purchase Credit earned on or after | 3 | | September 1, 2004 may only be used to satisfy the Use Tax or | 4 | | Service Use Tax liability incurred on production related | 5 | | tangible personal property purchased on or after September 1, | 6 | | 2004. A purchaser of production related tangible personal | 7 | | property desiring to use the Manufacturer's Purchase Credit | 8 | | shall certify to the seller that the purchaser is satisfying | 9 | | all or part of the liability under the Use Tax Act or the | 10 | | Service Use Tax Act that is due on the purchase of the | 11 | | production related tangible personal property by use of a | 12 | | Manufacturer's Purchase Credit. The Manufacturer's Purchase | 13 | | Credit certification must be dated and shall include the name | 14 | | and address of the purchaser, the purchaser's registration | 15 | | number, if registered, the credit being applied, and a | 16 | | statement that the State Use Tax or Service Use Tax liability | 17 | | is being satisfied with the manufacturer's or graphic arts | 18 | | producer's accumulated purchase credit. Certification may be | 19 | | incorporated into the manufacturer's or graphic arts | 20 | | producer's purchase order. Manufacturer's Purchase Credit | 21 | | certification provided by the manufacturer or graphic arts | 22 | | producer may be used to satisfy the retailer's or serviceman's | 23 | | liability under the Retailers' Occupation Tax Act or Service | 24 | | Occupation Tax Act for the credit claimed, not to exceed 6.25% | 25 | | of the receipts subject to tax from a qualifying purchase, but | 26 | | only if the retailer or serviceman reports the Manufacturer's |
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| 1 | | Purchase Credit claimed as required by the Department. The | 2 | | Manufacturer's Purchase Credit earned by purchase of exempt | 3 | | manufacturing machinery and equipment or graphic arts | 4 | | machinery and equipment is a non-transferable credit. A | 5 | | manufacturer or graphic arts producer that enters into a | 6 | | contract involving the installation of tangible personal | 7 | | property into real estate within a manufacturing or graphic | 8 | | arts production facility may, on or after September 1, 2004, | 9 | | authorize a construction contractor to utilize credit | 10 | | accumulated by the manufacturer or graphic arts producer to | 11 | | purchase the tangible personal property. A manufacturer or | 12 | | graphic arts producer intending to use accumulated credit to | 13 | | purchase such tangible personal property shall execute a | 14 | | written contract authorizing the contractor to utilize a | 15 | | specified dollar amount of credit. The contractor shall furnish | 16 | | the supplier with the manufacturer's or graphic arts producer's | 17 | | name, registration or resale number, and a statement that a | 18 | | specific amount of the Use Tax or Service Use Tax liability, | 19 | | not to exceed 6.25% of the selling price, is being satisfied | 20 | | with the credit. The manufacturer or graphic arts producer | 21 | | shall remain liable to timely report all information required | 22 | | by the annual Report of Manufacturer's Purchase Credit Used for | 23 | | credit utilized by a construction contractor. | 24 | | The Manufacturer's Purchase Credit may be used to satisfy | 25 | | liability under the Use Tax Act or the Service Use Tax Act due | 26 | | on the purchase, made on or after September 1, 2004, of |
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| 1 | | production related tangible personal property (including | 2 | | purchases by a manufacturer, by a graphic arts producer, or a | 3 | | lessor who rents or leases the use of the property to a | 4 | | manufacturer or graphic arts producer) that does not otherwise | 5 | | qualify for the manufacturing machinery and equipment | 6 | | exemption or the graphic arts machinery and equipment | 7 | | exemption. "Production related tangible personal property" | 8 | | means (i) all tangible personal property used or consumed by | 9 | | the purchaser in a manufacturing facility in which a | 10 | | manufacturing process described in Section 2-45 of the | 11 | | Retailers' Occupation Tax Act takes place, including tangible | 12 | | personal property purchased for incorporation into real estate | 13 | | within a manufacturing facility and including, but not limited | 14 | | to, tangible personal property used or consumed in activities | 15 | | such as pre-production material handling, receiving, quality | 16 | | control, inventory control, storage, staging, and packaging | 17 | | for shipping and transportation purposes; (ii) all tangible | 18 | | personal property used or consumed by the purchaser in a | 19 | | graphic arts facility in which graphic arts production as | 20 | | described in Section 2-30 of the Retailers' Occupation Tax Act | 21 | | takes place, including tangible personal property purchased | 22 | | for incorporation into real estate within a graphic arts | 23 | | facility and including, but not limited to, all tangible | 24 | | personal property used or consumed in activities such as | 25 | | graphic arts preliminary or pre-press production, | 26 | | pre-production material handling, receiving, quality control, |
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| 1 | | inventory control, storage, staging, sorting, labeling, | 2 | | mailing, tying, wrapping, and packaging; and (iii) all tangible | 3 | | personal property used or consumed by the purchaser for | 4 | | research and development. "Production related tangible | 5 | | personal property" does not include (i) tangible personal | 6 | | property used, within or without a manufacturing or graphic | 7 | | arts facility, in sales, purchasing, accounting, fiscal | 8 | | management, marketing, personnel recruitment or selection, or | 9 | | landscaping or (ii) tangible personal property required to be | 10 | | titled or registered with a department, agency, or unit of | 11 | | federal, state, or local government. The Manufacturer's | 12 | | Purchase Credit may be used to satisfy the tax arising either | 13 | | from the purchase of machinery and equipment on or after | 14 | | September 1, 2004 for which the manufacturing machinery and | 15 | | equipment exemption provided by Section 2 of this Act was | 16 | | erroneously claimed, or the purchase of machinery and equipment | 17 | | on or after September 1, 2004 for which the exemption provided | 18 | | by paragraph (5) of Section 3-5 of this Act was erroneously | 19 | | claimed, but not in satisfaction of penalty, if any, and | 20 | | interest for failure to pay the tax when due. A purchaser of | 21 | | production related tangible personal property that is | 22 | | purchased on or after September 1, 2004 who is required to pay | 23 | | Illinois Use Tax or Service Use Tax on the purchase directly to | 24 | | the Department may utilize the Manufacturer's Purchase Credit | 25 | | in satisfaction of the tax arising from that purchase, but not | 26 | | in satisfaction of penalty and interest. A purchaser who uses |
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| 1 | | the Manufacturer's Purchase Credit to purchase property on and | 2 | | after September 1, 2004 which is later determined not to be | 3 | | production related tangible personal property may be liable for | 4 | | tax, penalty, and interest on the purchase of that property as | 5 | | of the date of purchase but shall be entitled to use the | 6 | | disallowed Manufacturer's Purchase Credit, so long as it has | 7 | | not expired, on qualifying purchases of production related | 8 | | tangible personal property not previously subject to credit | 9 | | usage. The Manufacturer's Purchase Credit earned by a | 10 | | manufacturer or graphic arts producer expires the last day of | 11 | | the second calendar year following the calendar year in which | 12 | | the credit arose. | 13 | | A purchaser earning Manufacturer's Purchase Credit shall | 14 | | sign and file an annual Report of Manufacturer's Purchase | 15 | | Credit Earned for each calendar year no later than the last day | 16 | | of the sixth month following the calendar year in which a | 17 | | Manufacturer's Purchase Credit is earned. A Report of | 18 | | Manufacturer's Purchase Credit Earned shall be filed on forms | 19 | | as prescribed or approved by the Department and shall state, | 20 | | for each month of the calendar year: (i) the total purchase | 21 | | price of all purchases of exempt manufacturing or graphic arts | 22 | | machinery on which the credit was earned; (ii) the total State | 23 | | Use Tax or Service Use Tax which would have been due on those | 24 | | items; (iii) the percentage used to calculate the amount of | 25 | | credit earned; (iv) the amount of credit earned; and (v) such | 26 | | other information as the Department may reasonably require. A |
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| 1 | | purchaser earning Manufacturer's Purchase Credit shall | 2 | | maintain records which identify, as to each purchase of | 3 | | manufacturing or graphic arts machinery and equipment on which | 4 | | the purchaser earned Manufacturer's Purchase Credit, the | 5 | | vendor (including, if applicable, either the vendor's | 6 | | registration number or Federal Employer Identification | 7 | | Number), the purchase price, and the amount of Manufacturer's | 8 | | Purchase Credit earned on each purchase. | 9 | | A purchaser using Manufacturer's Purchase Credit shall | 10 | | sign and file an annual Report of Manufacturer's Purchase | 11 | | Credit Used for each calendar year no later than the last day | 12 | | of the sixth month following the calendar year in which a | 13 | | Manufacturer's Purchase Credit is used. A Report of | 14 | | Manufacturer's Purchase Credit Used shall be filed on forms as | 15 | | prescribed or approved by the Department and shall state, for | 16 | | each month of the calendar year: (i) the total purchase price | 17 | | of production related tangible personal property purchased | 18 | | from Illinois suppliers; (ii) the total purchase price of | 19 | | production related tangible personal property purchased from | 20 | | out-of-state suppliers; (iii) the total amount of credit used | 21 | | during such month; and (iv) such other information as the | 22 | | Department may reasonably require. A purchaser using | 23 | | Manufacturer's Purchase Credit shall maintain records that | 24 | | identify, as to each purchase of production related tangible | 25 | | personal property on which the purchaser used Manufacturer's | 26 | | Purchase Credit, the vendor (including, if applicable, either |
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| 1 | | the vendor's registration number or Federal Employer | 2 | | Identification Number), the purchase price, and the amount of | 3 | | Manufacturer's Purchase Credit used on each purchase. | 4 | | A purchaser that fails to file an annual Report of | 5 | | Manufacturer's Purchase Credit Earned or an annual Report of | 6 | | Manufacturer's Purchase Credit Used by the last day of the | 7 | | sixth month following the end of the calendar year shall | 8 | | forfeit all Manufacturer's Purchase Credit for that calendar | 9 | | year unless it establishes that its failure to file was due to | 10 | | reasonable cause. Manufacturer's Purchase Credit reports may | 11 | | be amended to report and claim credit on qualifying purchases | 12 | | not previously reported at any time before the credit would | 13 | | have expired, unless both the Department and the purchaser have | 14 | | agreed to an extension of the statute of limitations for the | 15 | | issuance of a notice of tax liability as provided in Section 4 | 16 | | of the Retailers' Occupation Tax Act. If the time for | 17 | | assessment or refund has been extended, then amended reports | 18 | | for a calendar year may be filed at any time prior to the date | 19 | | to which the statute of limitations for the calendar year or | 20 | | portion thereof has been extended. Manufacturer's Purchase | 21 | | Credit claimed on an amended report may be used to satisfy tax | 22 | | liability under the Use Tax Act or the Service Use Tax Act (i) | 23 | | on qualifying purchases of production related tangible | 24 | | personal property made after the date the amended report is | 25 | | filed or (ii) assessed by the Department on qualifying | 26 | | production related tangible personal property purchased on or |
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| 1 | | after September 1, 2004. | 2 | | If the purchaser is not the manufacturer or a graphic arts | 3 | | producer, but rents or leases the use of the property to a | 4 | | manufacturer or a graphic arts producer, the purchaser may | 5 | | earn, report, and use Manufacturer's Purchase Credit in the | 6 | | same manner as a manufacturer or graphic arts producer.
A | 7 | | purchaser shall not be entitled to any Manufacturer's Purchase | 8 | | Credit for a purchase that is required to be reported and is | 9 | | not timely reported as provided in this Section. A purchaser | 10 | | remains liable for (i) any tax that was satisfied by use of a | 11 | | Manufacturer's Purchase Credit, as of the date of purchase, if | 12 | | that use is not timely reported as required in this Section and | 13 | | (ii) for any applicable penalties and interest for failing to | 14 | | pay the tax when due.
| 15 | | (Source: P.A. 96-116, eff. 7-31-09.)
| 16 | | Section 99. Effective date. This Act takes effect upon | 17 | | becoming law.".
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