SB1271 104TH GENERAL ASSEMBLY

LRB104 03817 HLH 13841 b

104TH GENERAL ASSEMBLY
State of Illinois
2025 and 2026
SB1271

Introduced 1/28/2025, by Sen. Seth Lewis

SYNOPSIS AS INTRODUCED:

35 ILCS 5/246 new
35 ILCS 5/247 new
35 ILCS 5/248 new

Amends Illinois Income Tax Act. Creates a legacy tax credit for businesses that are headquartered in the State. Creates an employee tax credit and a collective bargaining employee tax credit. Effective immediately.

A BILL FOR

AN ACT concerning State government.

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 246, 247, and 248 as follows:

(35 ILCS 5/246 new)

Sec. 246. Legacy credit.

(a) For taxable years beginning on or after January 1, 2025, any sole proprietorship, limited liability company, or corporation that is headquartered in the State is entitled to a credit against the taxes imposed by subsections (a) and (b) of Section 201 in an amount equal to $100 multiplied by the number of years during which the taxpayer has been headquartered in Illinois as of the last day of the taxable year.

(b) If the taxpayer is a Subchapter S corporation, the credit shall be allowed to shareholders in accordance with the determination of income and distributive share of income under subchapter S of the Internal Revenue Code.

(c) 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.

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

(35 ILCS 5/247 new)

Sec. 247. Employee tax credit.

(a) For taxable years beginning on or after January 1, 2025, any sole proprietorship, limited liability company, or corporation that has a business location in the State is entitled to a credit against the taxes imposed by subsections (a) and (b) of Section 201 in an amount equal to $100 for each employee who is a resident of the State and is on the employer's payroll with 6 or more months of consecutive employment with the employer at the end of the taxable year.

(b) If the taxpayer is a Subchapter S corporation, the credit shall be allowed to shareholders in accordance with the determination of income and distributive share of income under subchapter S of the Internal Revenue Code.

(c) 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.

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

(35 ILCS 5/248 new)

Sec. 248. Collective bargaining employee tax credit.

(a) For taxable years beginning on or after January 1, 2025, any sole proprietorship, limited liability company, or corporation that has a business location in the State is entitled to a credit against the taxes imposed by subsections (a) and (b) of Section 201 in an amount equal to $25 for each employee who is a resident of the State, qualifies under the definitions of the National Labor Standards Board, and has 6 or more months of consecutive employment with the employer at the end of the taxable year.

(b) If the taxpayer is a Subchapter S corporation, the credit shall be allowed to shareholders in accordance with the determination of income and distributive share of income under subchapter S of the Internal Revenue Code.

(c) 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.

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

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