Illinois General Assembly - Full Text of SB0227

LRB104 06844 HLH 16880 b

104TH GENERAL ASSEMBLY
State of Illinois
2025 and 2026
SB0227

Introduced 1/22/2025, by Sen. Lakesia Collins

SYNOPSIS AS INTRODUCED:

35 ILCS 5/229

Amends the Illinois Income Tax Act. Provides that, if a taxpayer is awarded a credit by the Department of Commerce and Economic Opportunity in connection with a qualifying Illinois data center located in a qualified area or a data center developed by a minority-owned business, a women-owned business, or a business owned a person with a disability, then the taxpayer is entitled to an additional income tax credit in an amount equal to 5% of the taxpayer's investment in qualified tangible personal property used in the construction or operation of that data center. Effective immediately.

A BILL FOR

AN ACT concerning revenue.

Be it enacted by the People of the State of Illinois, represented in the General Assembly:

Section 5. The Illinois Income Tax Act is amended by changing Section 229 as follows:

(35 ILCS 5/229)

Sec. 229. Data center construction employment tax credit.

(a) A taxpayer who has been awarded a credit by the Department of Commerce and Economic Opportunity under Section 605-1025 of the Department of Commerce and Economic Opportunity Law of the Civil Administrative Code of Illinois is entitled to a credit against the taxes imposed under subsections (a) and (b) of Section 201 of this Act. The amount of the credit shall be 20% of the wages paid during the taxable year to a full-time or part-time employee of a construction contractor employed by a certified data center if those wages are paid for the construction of a new data center in a geographic area that meets any one of the following criteria:

(1) the area has a poverty rate of at least 20%, according to the U.S. Census Bureau American Community Survey 5-Year Estimates;

(2) 75% or more of the children in the area participate in the federal free lunch program, according to reported statistics from the State Board of Education;

(3) 20% or more of the households in the area receive assistance under the Supplemental Nutrition Assistance Program (SNAP), according to data from the U.S. Census Bureau American Community Survey 5-year Estimates; or

(4) the area has an average unemployment rate, as determined by the Department of Employment Security, that is more than 120% of the national unemployment average, as determined by the U.S. Department of Labor, for a period of at least 2 consecutive calendar years preceding the date of the application.

(a-5) For taxable years beginning on or after January 1, 2026, if the taxpayer is awarded a credit under Section 605-1025 of the Department of Commerce and Economic Opportunity Law of the Civil Administrative Code of Illinois in connection with a qualifying Illinois data center located in a qualified area or a data center developed by a qualified business enterprise, then the taxpayer is entitled to an additional credit against the tax imposed by subsections (a) and (b) of Section 201 in an amount equal to 5% of the taxpayer's investment in qualified tangible personal property used in the construction or operation of that data center. The credit shall be available for a period of 5 taxable years after the property is placed in service. The taxpayer may transfer the credit in accordance with rules adopted by the Department of Commerce and Economic Opportunity.

(a-10) For taxable years ending before December 31, 2023, if the taxpayer is a partnership, a Subchapter S corporation, or a limited liability company that has elected partnership tax treatment, the credit shall be allowed to the partners, shareholders, or members in accordance with the determination of income and distributive share of income under Sections 702 and 704 and subchapter S of the Internal Revenue Code, as applicable. For taxable years ending on or after December 31, 2023, if the taxpayer is a partnership or a Subchapter S corporation, then the provisions of Section 251 apply. The Department, in cooperation with the Department of Commerce and Economic Opportunity, shall adopt rules to enforce and administer this Section. This Section is exempt from the provisions of Section 250 of this Act.

(b) In no event shall a credit under this Section reduce the taxpayer's liability to less than zero. If the amount of the credit exceeds the tax liability for the year, the excess may be carried forward and applied to the tax liability of the 5 taxable years following the excess credit year. The tax credit shall be applied to the earliest year for which there is a tax liability. If there are credits for more than one year that are available to offset a liability, the earlier credit shall be applied first.

(c) No credit shall be allowed with respect to any certification for any taxable year ending after the revocation of the certification by the Department of Commerce and Economic Opportunity. Upon receiving notification by the Department of Commerce and Economic Opportunity of the revocation of certification, the Department shall notify the taxpayer that no credit is allowed for any taxable year ending after the revocation date, as stated in such notification. If any credit has been allowed with respect to a certification for a taxable year ending after the revocation date, any refund paid to the taxpayer for that taxable year shall, to the extent of that credit allowed, be an erroneous refund within the meaning of Section 912 of this Act.

(d) As used in this Section:

"Qualified area" means an opportunity zone, an area designated as an R3 community pursuant to the Cannabis Regulation and Tax Act, or a community designated as a Disproportionately Impacted Area that is eligible for participation in the Illinois Adult-Use Cannabis Social Equity Program administered by the Department of Commerce and Economic Opportunity.

"Qualified business enterprise" means a minority-owned business, a women-owned business, or a business owned a person with a disability, as those terms are defined in the Business Enterprise for Minorities, Women, and Persons with Disabilities Act.

"Qualified tangible personal property" has the meaning given to that term in Section 605-1025 of the Department of Commerce and Economic Opportunity Law of the Civil Administrative Code of Illinois.

(e) This Section is exempt from the provisions of Section 250.

(Source: P.A. 102-558, eff. 8-20-21; 103-396, eff. 1-1-24.)

Section 99. Effective date. This Act takes effect upon becoming law.