HB4155 102ND GENERAL ASSEMBLY

LRB102 19610 HLH 28961 b

102ND GENERAL ASSEMBLY
State of Illinois
2021 and 2022
HB4155

Introduced 10/19/2021, by Rep. Dave Vella

SYNOPSIS AS INTRODUCED:

35 ILCS 5/232 new
35 ILCS 5/233 new
35 ILCS 5/234 new
35 ILCS 5/235 new

Amends the Illinois Income Tax Act. Creates the following credits for taxpayers who manufacture electric vehicles, batteries for electric vehicles, or both: (1) a credit for capital expenditures for electric vehicle facilities or electric vehicle battery facilities; (2) a credit for educational or vocational training; and (3) a credit for qualified utility payments. Creates a credit for certain automobile manufacturers in an amount equal to 75% of withholding payments for new employees. Effective immediately.

FISCAL NOTE ACT MAY APPLY

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 adding Sections 232, 233, 234, and 235 as follows:

(35 ILCS 5/232 new)

Sec. 232. Capital expenditures for electric vehicle facilities or electric vehicle battery facilities.

(a) For tax years ending on or after December 31, 2022, each taxpayer that makes a capital investment during the taxable year for the construction of a new qualified facility or the renovation of an existing qualified facility is entitled to a credit against the taxes imposed by subsections (a) and (b) of Section 201 in an amount equal to those capital investments.

(b) For partners, shareholders of subchapter S corporations, and owners of limited liability companies, if the liability company is treated as a partnership for purposes of federal and State income taxation, there shall be allowed a credit under this Section to be determined 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.

(c) The tax credit may not reduce the taxpayer's liability to less than zero. If the amount of the tax credit exceeds the taxpayer's tax liability for the year, then the excess may be carried forward and applied to the tax liability of the 5 taxable years following the excess credit year or the excess may be refunded to the taxpayer, at the taxpayer's election. Excess credit amounts that are carried forward must be applied to the earliest year for which there is a tax liability. If the excess credit amounts are carried forward and there are credits from more than one tax year that are available to offset a liability, then the earlier credit must be applied first.

(d) As used in this Section, "qualified facility" means a facility that is or will be used primarily for manufacturing electric vehicles, manufacturing batteries for use in electric vehicles, or both.

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

(35 ILCS 5/233 new)

Sec. 233. Credit for employee withholdings.

(a) For tax years ending on or after December 31, 2022, each qualified taxpayer shall be allowed a credit against the tax imposed by subsections (a) and (b) of Section 201 in an amount equal to 75% of the incremental income tax paid during the taxable year for each new employee of the qualified taxpayer. The credit shall be allowed for a period of 10 consecutive taxable years after the taxpayer meets the capital investment requirements needed to be considered a qualified taxpayer under this Section; however, no credit may be claimed for any taxable year in which the taxpayer does not conduct business operations at a location in this State.

(b) For partners, shareholders of subchapter S corporations, and owners of limited liability companies, if the liability company is treated as a partnership for purposes of federal and State income taxation, there shall be allowed a credit under this Section to be determined 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.

(c) The tax credit may not reduce the taxpayer's liability to less than zero. If the amount of the tax credit exceeds the taxpayer's 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. Excess credit amounts that are carried forward must be applied to the earliest year for which there is a tax liability. If there are credits from more than one tax year that are available to offset a liability, then the earlier credit must be applied first.

(d) As used in this Section:

"Full-time employee" means an individual who is employed for consideration for at least 35 hours each week or who renders any other standard of service generally accepted by industry custom or practice as full-time employment.

"Incremental income tax" means the total amount withheld during the taxable year from the compensation of new employees under Article 7 of this Act.

"New employee" means a full-time employee that is first hired during the taxable year.

"Qualified taxpayer" means an automobile manufacturer that makes a capital investment of at least $100,000,000 and hires or retains at least 1,000 new employees for the purpose of building electric vehicles at a location in the State.

(35 ILCS 5/234 new)

Sec. 234. Electric vehicle technical training credit.

(a) For tax years ending on or after December 31, 2022, in addition to any other income tax credit provided by law, each qualified taxpayer shall be allowed a credit against the tax imposed by subsections (a) and (b) of Section 201 in an amount equal to 25% of the amount paid or accrued during the taxable year on behalf of all persons employed by the qualified taxpayer in Illinois or Illinois residents employed outside of Illinois by the qualified taxpayer, for educational or vocational training in semi-technical or technical fields or semi-skilled or skilled fields, which were deducted from gross income in the computation of taxable income.

(b) For partners, shareholders of subchapter S corporations, and owners of limited liability companies, if the liability company is treated as a partnership for purposes of federal and State income taxation, there shall be allowed a credit under this Section to be determined 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.

(c) The tax credit may not reduce the taxpayer's liability to less than zero. If the amount of the tax credit exceeds the taxpayer's 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. Excess credit amounts that are carried forward must be applied to the earliest year for which there is a tax liability. If there are credits from more than one tax year that are available to offset a liability, then the earlier credit must be applied first.

(d) As used in this Section, "qualified taxpayer" means a person or entity that is primarily engaged in the business of manufacturing electric cars, batteries for electric cars, or both.

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

(35 ILCS 5/235 new)

Sec. 235. Credit for qualified utility payments.

(a) For tax years ending on or after December 31, 2022, each qualified taxpayer shall be allowed a credit against the tax imposed by subsections (a) and (b) of Section 201 in an amount equal to 25% of the amount paid during the taxable year for electricity and natural gas used in the process of manufacturing electric vehicles, batteries for electric vehicles, or both.

(b) For partners, shareholders of subchapter S corporations, and owners of limited liability companies, if the liability company is treated as a partnership for purposes of federal and State income taxation, there shall be allowed a credit under this Section to be determined 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.

(c) The tax credit may not reduce the taxpayer's liability to less than zero. If the amount of the tax credit exceeds the taxpayer's tax liability for the year, then the excess may be carried forward and applied to the tax liability of the 5 taxable years following the excess credit year or the excess may be refunded to the taxpayer, at the taxpayer's election. Excess credit amounts that are carried forward must be applied to the earliest year for which there is a tax liability. If the excess credit amounts are carried forward and there are credits from more than one tax year that are available to offset a liability, then the earlier credit must be applied first.

(d) As used in this Section, "qualified taxpayer" means a person or entity that is primarily engaged in manufacturing electric cars, batteries for electric cars, or both.

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

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