102ND GENERAL ASSEMBLY
State of Illinois
2021 and 2022
HB5521

 

Introduced 1/31/2022, by Rep. Bradley Stephens

 

SYNOPSIS AS INTRODUCED:
 
35 ILCS 10/5-15

    Amends the Economic Development for a Growing Economy Tax Credit Act. With respect to credits that are taken against the Taxpayer's withholding tax payments, provides that certain amounts shall be returned to the Department of Commerce and Economic Opportunity and reallocated to the local workforce investment area in which the project was located if, during the term of the Agreement or at any time within 20 years after the expiration of the Agreement, the Taxpayer sells its operations or the principal part of the portion of its operations that is located in the State. Provides that the provisions do not apply if the sale is at a loss to the Taxpayer.


LRB102 22293 HLH 31426 b

 

 

A BILL FOR

 

HB5521LRB102 22293 HLH 31426 b

1    AN ACT concerning revenue.
 
2    Be it enacted by the People of the State of Illinois,
3represented in the General Assembly:
 
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
8set forth in this Act, a Taxpayer is entitled to a Credit
9against or, as described in subsection (g) of this Section, a
10payment towards taxes imposed pursuant to subsections (a) and
11(b) of Section 201 of the Illinois Income Tax Act that may be
12imposed on the Taxpayer for a taxable year beginning on or
13after January 1, 1999, if the Taxpayer is awarded a Credit by
14the Department 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.
17    (b) A person that proposes a project to create new jobs in
18Illinois must enter into an Agreement with the Department for
19the Credit under this Act.
20    (c) The Credit shall be claimed for the taxable years
21specified in the Agreement.
22    (d) The Credit shall not exceed the Incremental Income Tax
23attributable to the project that is the subject of the

 

 

HB5521- 2 -LRB102 22293 HLH 31426 b

1Agreement.
2    (e) Nothing herein shall prohibit a Tax Credit Award to an
3Applicant that uses a PEO if all other award criteria are
4satisfied.
5    (f) In lieu of the Credit allowed under this Act against
6the taxes imposed pursuant to subsections (a) and (b) of
7Section 201 of the Illinois Income Tax Act for any taxable year
8ending on or after December 31, 2009, for Taxpayers that
9entered into Agreements prior to January 1, 2015 and otherwise
10meet the criteria set forth in this subsection (f), the
11Taxpayer may elect to claim the Credit against its obligation
12to pay over withholding under Section 704A of the Illinois
13Income Tax Act.
14        (1) The election under this subsection (f) may be made
15    only by a Taxpayer that (i) is primarily engaged in one of
16    the following business activities: water purification and
17    treatment, motor vehicle metal stamping, automobile
18    manufacturing, automobile and light duty motor vehicle
19    manufacturing, motor vehicle manufacturing, light truck
20    and utility vehicle manufacturing, heavy duty truck
21    manufacturing, motor vehicle body manufacturing, cable
22    television infrastructure design or manufacturing, or
23    wireless telecommunication or computing terminal device
24    design or manufacturing for use on public networks and
25    (ii) meets the following criteria:
26            (A) the Taxpayer (i) had an Illinois net loss or an

 

 

HB5521- 3 -LRB102 22293 HLH 31426 b

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

 

 

HB5521- 4 -LRB102 22293 HLH 31426 b

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

 

 

HB5521- 5 -LRB102 22293 HLH 31426 b

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

 

 

HB5521- 6 -LRB102 22293 HLH 31426 b

1    that was executed or applied for on or after July 1, 2011
2    and on or before March 31, 2012, if the Taxpayer is
3    primarily engaged in the manufacture of original and
4    aftermarket filtration parts and products for automobiles,
5    motor vehicles, light duty motor vehicles, light trucks
6    and utility vehicles, and heavy duty trucks, (ii) employs
7    a minimum of 1,000 full-time employees in Illinois at the
8    time of application, (iii) creates at least 250 full-time
9    jobs in Illinois, (iv) relocates its corporate
10    headquarters to Illinois from another state, and (v) makes
11    a capital investment of at least $4,000,000 at the project
12    location.
13        (2) An election under this subsection shall allow the
14    credit to be taken against payments otherwise due under
15    Section 704A of the Illinois Income Tax Act during the
16    first calendar year beginning after the end of the taxable
17    year in which the credit is awarded under this Act.
18        (3) The election shall be made in the form and manner
19    required by the Illinois Department of Revenue and, once
20    made, shall be irrevocable.
21        (4) If a Taxpayer who meets the requirements of
22    subparagraph (A) of paragraph (1) of this subsection (f)
23    elects to claim the Credit against its withholdings as
24    provided in this subsection (f), then, on and after the
25    date of the election, the terms of the Agreement between
26    the Taxpayer and the Department may not be further amended

 

 

HB5521- 7 -LRB102 22293 HLH 31426 b

1    during the term of the Agreement.
2        (5) If a Taxpayer makes an election under this
3    subsection (f) for a calendar year beginning on or after
4    the effective date of this amendatory Act of the 102nd
5    General Assembly, and, during the term of the Agreement or
6    at any time within 20 years after the expiration of the
7    Agreement, the Taxpayer sells its operations or the
8    principal part of the portion of its operations that is
9    located in the State, then the entire credit amount
10    awarded to the Taxpayer prior to the date the Taxpayer
11    sells its operations shall be returned to the Department
12    and shall be reallocated to the local workforce investment
13    area in which the project was located. This paragraph (5)
14    shall not apply if: (i) the Taxpayer as a whole is sold at
15    a loss to its owners; or (ii) the principal part of that
16    portion of its operations that is located in the State is
17    sold at a loss to the Taxpayer. For purposes of this
18    subparagraph, "loss" shall be as defined in 26 U.S.C. 65.
19    (g) A pass-through entity that has been awarded a credit
20under this Act, its shareholders, or its partners may treat
21some or all of the credit awarded pursuant to this Act as a tax
22payment for purposes of the Illinois Income Tax Act. The term
23"tax payment" means a payment as described in Article 6 or
24Article 8 of the Illinois Income Tax Act or a composite payment
25made by a pass-through entity on behalf of any of its
26shareholders or partners to satisfy such shareholders' or

 

 

HB5521- 8 -LRB102 22293 HLH 31426 b

1partners' taxes imposed pursuant to subsections (a) and (b) of
2Section 201 of the Illinois Income Tax Act. In no event shall
3the amount of the award credited pursuant to this Act exceed
4the Illinois income tax liability of the pass-through entity
5or its shareholders or partners for the taxable year.
6(Source: P.A. 100-511, eff. 9-18-17.)