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1 | AN ACT concerning revenue.
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2 | Be it enacted by the People of the State of Illinois,
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3 | represented in the General Assembly:
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4 | Section 5. The Illinois Income Tax Act is amended by | ||||||||||||||||||||||||
5 | changing Section 221 as follows: | ||||||||||||||||||||||||
6 | (35 ILCS 5/221) | ||||||||||||||||||||||||
7 | Sec. 221. Rehabilitation costs; qualified historic | ||||||||||||||||||||||||
8 | properties; River Edge Redevelopment Zone. | ||||||||||||||||||||||||
9 | (a) For taxable years that begin on or after January 1, | ||||||||||||||||||||||||
10 | 2012 and begin prior to January 1, 2018, there shall be allowed | ||||||||||||||||||||||||
11 | a tax credit against the tax imposed by subsections (a) and (b) | ||||||||||||||||||||||||
12 | of Section 201 of this Act in an amount equal to 25% of | ||||||||||||||||||||||||
13 | qualified expenditures incurred by a qualified taxpayer during | ||||||||||||||||||||||||
14 | the taxable year in the restoration and preservation of a | ||||||||||||||||||||||||
15 | qualified historic structure located in a River Edge | ||||||||||||||||||||||||
16 | Redevelopment Zone pursuant to a qualified rehabilitation | ||||||||||||||||||||||||
17 | plan, provided that the total amount of such expenditures (i) | ||||||||||||||||||||||||
18 | must equal $5,000 or more and (ii) must exceed 50% of the | ||||||||||||||||||||||||
19 | purchase price of the property. | ||||||||||||||||||||||||
20 | (a-1) For taxable years that begin on or after January 1, | ||||||||||||||||||||||||
21 | 2031 January 1, 2018 and end prior to January 1, 2022, there | ||||||||||||||||||||||||
22 | shall be allowed a tax credit against the tax imposed by | ||||||||||||||||||||||||
23 | subsections (a) and (b) of Section 201 of this Act in an |
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1 | aggregate amount equal to 25% of qualified expenditures | ||||||
2 | incurred by a qualified taxpayer in the restoration and | ||||||
3 | preservation of a qualified historic structure located in a | ||||||
4 | River Edge Redevelopment Zone pursuant to a qualified | ||||||
5 | rehabilitation plan, provided that the total amount of such | ||||||
6 | expenditures must : (i) equal $5,000 or more ; and (ii) exceed | ||||||
7 | the adjusted basis of the qualified historic structure on the | ||||||
8 | first day the qualified rehabilitation plan begins ; and (iii) | ||||||
9 | be a part of a qualified rehabilitation plan or phase of a | ||||||
10 | qualified rehabilitation plan that received final approval to | ||||||
11 | begin the expenditures no later than December 31, 2026 . For | ||||||
12 | any rehabilitation project, regardless of duration or number | ||||||
13 | of phases, the project's compliance with the foregoing | ||||||
14 | provisions (i) and (ii) shall be determined based on the | ||||||
15 | aggregate amount of qualified expenditures for the entire | ||||||
16 | project and may include expenditures incurred under subsection | ||||||
17 | (a), this subsection, or both subsection (a) and this | ||||||
18 | subsection. If the qualified rehabilitation plan spans | ||||||
19 | multiple years, the aggregate credit for the entire project | ||||||
20 | shall be allowed in the last taxable year, except for phased | ||||||
21 | rehabilitation projects, which may receive credits upon | ||||||
22 | completion of each phase. Before obtaining the first phased | ||||||
23 | credit: (A) the total amount of such expenditures must meet | ||||||
24 | the requirements of provisions (i) and (ii) of this | ||||||
25 | subsection; (B) the rehabilitated portion of the qualified | ||||||
26 | historic structure must be placed in service; and (C) the |
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1 | requirements of subsection (b) must be met. | ||||||
2 | (a-2) For taxable years beginning on or after January 1, | ||||||
3 | 2021 and ending prior to January 1, 2022, there shall be | ||||||
4 | allowed a tax credit against the tax imposed by subsections | ||||||
5 | (a) and (b) of Section 201 as provided in Section 10-10.3 of | ||||||
6 | the River Edge Redevelopment Zone Act. The credit allowed | ||||||
7 | under this subsection (a-2) shall apply only to taxpayers that | ||||||
8 | make a capital investment of at least $1,000,000 in a | ||||||
9 | qualified rehabilitation plan. | ||||||
10 | The credit or credits may not reduce the taxpayer's | ||||||
11 | liability to less than zero. If the amount of the credit or | ||||||
12 | credits exceeds the taxpayer's liability, the excess may be | ||||||
13 | carried forward and applied against the taxpayer's liability | ||||||
14 | in succeeding calendar years in the manner provided under | ||||||
15 | paragraph (4) of Section 211 of this Act. The credit or credits | ||||||
16 | shall be applied to the earliest year for which there is a tax | ||||||
17 | liability. If there are credits from more than one taxable | ||||||
18 | year that are available to offset a liability, the earlier | ||||||
19 | credit shall be applied first. | ||||||
20 | For partners, shareholders of Subchapter S corporations, | ||||||
21 | and owners of limited liability companies, if the liability | ||||||
22 | company is treated as a partnership for the purposes of | ||||||
23 | federal and State income taxation, there shall be allowed a | ||||||
24 | credit under this Section to be determined in accordance with | ||||||
25 | the determination of income and distributive share of income | ||||||
26 | under Sections 702 and 704 and Subchapter S of the Internal |
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1 | Revenue Code. | ||||||
2 | The total aggregate amount of credits awarded under the | ||||||
3 | Blue Collar Jobs Act (Article 20 of this amendatory Act of the | ||||||
4 | 101st General Assembly) shall not exceed $20,000,000 in any | ||||||
5 | State fiscal year. | ||||||
6 | (b) To obtain a tax credit pursuant to this Section, the | ||||||
7 | taxpayer must apply with the Department of Natural Resources. | ||||||
8 | The Department of Natural Resources shall determine the amount | ||||||
9 | of eligible rehabilitation costs and expenses in addition to | ||||||
10 | the amount of the River Edge construction jobs credit within | ||||||
11 | 45 days of receipt of a complete application. The taxpayer | ||||||
12 | must submit a certification of costs prepared by an | ||||||
13 | independent certified public accountant that certifies (i) the | ||||||
14 | project expenses, (ii) whether those expenses are qualified | ||||||
15 | expenditures, and (iii) that the qualified expenditures exceed | ||||||
16 | the adjusted basis of the qualified historic structure on the | ||||||
17 | first day the qualified rehabilitation plan commenced. The | ||||||
18 | Department of Natural Resources is authorized, but not | ||||||
19 | required, to accept this certification of costs to determine | ||||||
20 | the amount of qualified expenditures and the amount of the | ||||||
21 | credit. The Department of Natural Resources shall provide | ||||||
22 | guidance as to the minimum standards to be followed in the | ||||||
23 | preparation of such certification. The Department of Natural | ||||||
24 | Resources and the National Park Service shall determine | ||||||
25 | whether the rehabilitation is consistent with the United | ||||||
26 | States Secretary of the Interior's Standards for |
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1 | Rehabilitation. | ||||||
2 | (b-1) Upon completion of the project and approval of the | ||||||
3 | complete application, the Department of Natural Resources | ||||||
4 | shall issue a single certificate in the amount of the eligible | ||||||
5 | credits equal to 25% of qualified expenditures incurred during | ||||||
6 | the eligible taxable years, as defined in subsections (a) and | ||||||
7 | (a-1), excepting any credits awarded under subsection (a) | ||||||
8 | prior to January 1, 2019 (the effective date of Public Act | ||||||
9 | 100-629) and any phased credits issued prior to the eligible | ||||||
10 | taxable year under subsection (a-1). At the time the | ||||||
11 | certificate is issued, an issuance fee up to the maximum | ||||||
12 | amount of 2% of the amount of the credits issued by the | ||||||
13 | certificate may be collected from the applicant to administer | ||||||
14 | the provisions of this Section. If collected, this issuance | ||||||
15 | fee shall be deposited into the Historic Property | ||||||
16 | Administrative Fund, a special fund created in the State | ||||||
17 | treasury. Subject to appropriation, moneys in the Historic | ||||||
18 | Property Administrative Fund shall be provided to the | ||||||
19 | Department of Natural Resources as reimbursement for the costs | ||||||
20 | associated with administering this Section. | ||||||
21 | (c) The taxpayer must attach the certificate to the tax | ||||||
22 | return on which the credits are to be claimed. The tax credit | ||||||
23 | under this Section may not reduce the taxpayer's liability to | ||||||
24 | less than
zero. If the amount of the credit exceeds the tax | ||||||
25 | liability for the year, the excess credit may be carried | ||||||
26 | forward and applied to the tax liability of the 5 taxable years |
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1 | following the excess credit year. | ||||||
2 | (c-1) Subject to appropriation, moneys in the Historic | ||||||
3 | Property Administrative Fund shall be used, on a biennial | ||||||
4 | basis beginning at the end of the second fiscal year after | ||||||
5 | January 1, 2019 (the effective date of Public Act 100-629), to | ||||||
6 | hire a qualified third party to prepare a biennial report to | ||||||
7 | assess the overall economic impact to the State from the | ||||||
8 | qualified rehabilitation projects under this Section completed | ||||||
9 | in that year and in previous years. The overall economic | ||||||
10 | impact shall include at least: (1) the direct and indirect or | ||||||
11 | induced economic impacts of completed projects; (2) temporary, | ||||||
12 | permanent, and construction jobs created; (3) sales, income, | ||||||
13 | and property tax generation before, during construction, and | ||||||
14 | after completion; and (4) indirect neighborhood impact after | ||||||
15 | completion. The report shall be submitted to the Governor and | ||||||
16 | the General Assembly. The report to the General Assembly shall | ||||||
17 | be filed with the Clerk of the House of Representatives and the | ||||||
18 | Secretary of the Senate in electronic form only, in the manner | ||||||
19 | that the Clerk and the Secretary shall direct. | ||||||
20 | (c-2) The Department of Natural Resources may adopt rules | ||||||
21 | to implement this Section in addition to the rules expressly | ||||||
22 | authorized in this Section. | ||||||
23 | (d) As used in this Section, the following terms have the | ||||||
24 | following meanings. | ||||||
25 | "Phased rehabilitation" means a project that is completed | ||||||
26 | in phases, as defined under Section 47 of the federal Internal |
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1 | Revenue Code and pursuant to National Park Service regulations | ||||||
2 | at 36 C.F.R. 67. | ||||||
3 | "Placed in service" means the date when the property is | ||||||
4 | placed in a condition or state of readiness and availability | ||||||
5 | for a specifically assigned function as defined under Section | ||||||
6 | 47 of the federal Internal Revenue Code and federal Treasury | ||||||
7 | Regulation Sections 1.46 and 1.48. | ||||||
8 | "Qualified expenditure" means all the costs and expenses | ||||||
9 | defined as qualified rehabilitation expenditures under Section | ||||||
10 | 47 of the federal Internal Revenue Code that were incurred in | ||||||
11 | connection with a qualified historic structure. | ||||||
12 | "Qualified historic structure" means a certified historic | ||||||
13 | structure as defined under Section 47(c)(3) of the federal | ||||||
14 | Internal Revenue Code. | ||||||
15 | "Qualified rehabilitation plan" means a project that is | ||||||
16 | approved by the Department of Natural Resources and the | ||||||
17 | National Park Service as being consistent with the United | ||||||
18 | States Secretary of the Interior's Standards for | ||||||
19 | Rehabilitation. | ||||||
20 | "Qualified taxpayer" means the owner of the qualified | ||||||
21 | historic structure or any other person who qualifies for the | ||||||
22 | federal rehabilitation credit allowed by Section 47 of the | ||||||
23 | federal Internal Revenue Code with respect to that qualified | ||||||
24 | historic structure. Partners, shareholders of subchapter S | ||||||
25 | corporations, and owners of limited liability companies (if | ||||||
26 | the limited liability company is treated as a partnership for |
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1 | purposes of federal and State income taxation) are entitled to | ||||||
2 | a credit under this Section to be determined in accordance | ||||||
3 | with the determination of income and distributive share of | ||||||
4 | income under Sections 702 and 703 and subchapter S of the | ||||||
5 | Internal Revenue Code, provided that credits granted to a | ||||||
6 | partnership, a limited liability company taxed as a | ||||||
7 | partnership, or other multiple owners of property shall be | ||||||
8 | passed through to the partners, members, or owners | ||||||
9 | respectively on a pro rata basis or pursuant to an executed | ||||||
10 | agreement among the partners, members, or owners documenting | ||||||
11 | any alternate distribution method.
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12 | (Source: P.A. 100-236, eff. 8-18-17; 100-629, eff. 1-1-19; | ||||||
13 | 100-695, eff. 8-3-18; 101-9, eff. 6-5-19; 101-81, eff. | ||||||
14 | 7-12-19.)
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15 | Section 99. Effective date. This Act takes effect upon | ||||||
16 | becoming law.
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