102ND GENERAL ASSEMBLY
State of Illinois
2021 and 2022
SB2528

 

Introduced 2/26/2021, by Sen. Craig Wilcox

 

SYNOPSIS AS INTRODUCED:
 
35 ILCS 5/231

    Amends the Illinois Income Tax Act. Provides that an apprentice who is hired by the taxpayer through the United States Department of Defense SkillBridge internship program is considered a qualifying apprentice for the purpose of the apprenticeship education expense credit. Provides that, in the case of an employee participating in the SkillBridge program, the credit shall be equal to $3,500 per qualifying apprentice. Effective immediately.


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FISCAL NOTE ACT MAY APPLY

 

 

A BILL FOR

 

SB2528LRB102 17460 HLH 22955 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 Illinois Income Tax Act is amended by
5changing and renumbering Section 229, as added by Public Act
6101-207, as follows:
 
7    (35 ILCS 5/231)
8    Sec. 231 229. Apprenticeship education expense credit.
9    (a) As used in this Section:
10    "Department" means the Department of Commerce and Economic
11Opportunity.
12    "Employer" means an Illinois taxpayer who is the employer
13of the qualifying apprentice.
14    "Qualifying apprentice" means an individual who: (i) is a
15resident of the State of Illinois; (ii) is at least 16 years
16old at the close of the school year for which a credit is
17sought; (iii) during the school year for which a credit is
18sought, was a full-time apprentice enrolled in an
19apprenticeship program which is registered with the United
20States Department of Labor, Office of Apprenticeship; and (iv)
21is employed in Illinois by the taxpayer who is the employer.
22"Qualifying apprentice" also means an apprentice who is
23employed in Illinois by the taxpayer through the United States

 

 

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1Department of Defense SkillBridge internship program.
2    "Qualified education expense" means the amount incurred on
3behalf of a qualifying apprentice not to exceed $3,500 for
4tuition, book fees, and lab fees at the school or community
5college in which the apprentice is enrolled during the regular
6school year.
7    "School" means any public or nonpublic secondary school in
8Illinois that is: (i) an institution of higher education that
9provides a program that leads to an industry-recognized
10postsecondary credential or degree; (ii) an entity that
11carries out programs registered under the federal National
12Apprenticeship Act; or (iii) another public or private
13provider of a program of training services, which may include
14a joint labor-management organization.
15    (b) For taxable years beginning on or after January 1,
162020, and beginning on or before January 1, 2025, the employer
17of one or more qualifying apprentices shall be allowed a
18credit against the tax imposed by subsections (a) and (b) of
19Section 201 of the Illinois Income Tax Act for qualified
20education expenses incurred on behalf of a qualifying
21apprentice. The credit shall be equal to 100% of the qualified
22education expenses, but in no event may the total credit
23amount awarded to a single taxpayer in a single taxable year
24exceed $3,500 per qualifying apprentice. In the case of an
25employee participating in the SkillBridge program, the credit
26shall be equal to $3,500 per qualifying apprentice. A taxpayer

 

 

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1shall be entitled to an additional $1,500 credit against the
2tax imposed by subsections (a) and (b) of Section 201 of the
3Illinois Income Tax Act if (i) the qualifying apprentice
4resides in an underserved area as defined in Section 5-5 of the
5Economic Development for a Growing Economy Tax Credit Act
6during the school year for which a credit is sought by an
7employer or (ii) the employer's principal place of business is
8located in an underserved area, as defined in Section 5-5 of
9the Economic Development for a Growing Economy Tax Credit Act.
10In no event shall a credit under this Section reduce the
11taxpayer's liability under this Act to less than zero. For
12partners, shareholders of Subchapter S corporations, and
13owners of limited liability companies, if the liability
14company is treated as a partnership for purposes of federal
15and State income taxation, there shall be allowed a credit
16under this Section to be determined in accordance with the
17determination of income and distributive share of income under
18Sections 702 and 704 and Subchapter S of the Internal Revenue
19Code.
20    (c) The Department shall implement a program to certify
21applicants for an apprenticeship credit under this Section.
22Upon satisfactory review, the Department shall issue a tax
23credit certificate to an employer incurring costs on behalf of
24a qualifying apprentice stating the amount of the tax credit
25to which the employer is entitled. If the employer is seeking a
26tax credit for multiple qualifying apprentices, the Department

 

 

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1may issue a single tax credit certificate that encompasses the
2aggregate total of tax credits for qualifying apprentices for
3a single employer.
4    (d) The Department, in addition to those powers granted
5under the Civil Administrative Code of Illinois, is granted
6and shall have all the powers necessary or convenient to carry
7out and effectuate the purposes and provisions of this
8Section, including, but not limited to, power and authority
9to:
10        (1) Adopt rules deemed necessary and appropriate for
11    the administration of this Section; establish forms for
12    applications, notifications, contracts, or any other
13    agreements; and accept applications at any time during the
14    year and require that all applications be submitted via
15    the Internet. The Department shall require that
16    applications be submitted in electronic form.
17        (2) Provide guidance and assistance to applicants
18    pursuant to the provisions of this Section and cooperate
19    with applicants to promote, foster, and support job
20    creation within the State.
21        (3) Enter into agreements and memoranda of
22    understanding for participation of and engage in
23    cooperation with agencies of the federal government, units
24    of local government, universities, research foundations or
25    institutions, regional economic development corporations,
26    or other organizations for the purposes of this Section.

 

 

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1        (4) Gather information and conduct inquiries, in the
2    manner and by the methods it deems desirable, including,
3    without limitation, gathering information with respect to
4    applicants for the purpose of making any designations or
5    certifications necessary or desirable or to gather
6    information in furtherance of the purposes of this Act.
7        (5) Establish, negotiate, and effectuate any term,
8    agreement, or other document with any person necessary or
9    appropriate to accomplish the purposes of this Section,
10    and consent, subject to the provisions of any agreement
11    with another party, to the modification or restructuring
12    of any agreement to which the Department is a party.
13        (6) Provide for sufficient personnel to permit
14    administration, staffing, operation, and related support
15    required to adequately discharge its duties and
16    responsibilities described in this Section from funds made
17    available through charges to applicants or from funds as
18    may be appropriated by the General Assembly for the
19    administration of this Section.
20        (7) Require applicants, upon written request, to issue
21    any necessary authorization to the appropriate federal,
22    State, or local authority or any other person for the
23    release to the Department of information requested by the
24    Department, including, but not be limited to, financial
25    reports, returns, or records relating to the applicant or
26    to the amount of credit allowable under this Section.

 

 

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1        (8) Require that an applicant shall, at all times,
2    keep proper books of record and account in accordance with
3    generally accepted accounting principles consistently
4    applied, with the books, records, or papers related to the
5    agreement in the custody or control of the applicant open
6    for reasonable Department inspection and audits,
7    including, without limitation, the making of copies of the
8    books, records, or papers.
9        (9) Take whatever actions are necessary or appropriate
10    to protect the State's interest in the event of
11    bankruptcy, default, foreclosure, or noncompliance with
12    the terms and conditions of financial assistance or
13    participation required under this Section or any agreement
14    entered into under this Section, including the power to
15    sell, dispose of, lease, or rent, upon terms and
16    conditions determined by the Department to be appropriate,
17    real or personal property that the Department may recover
18    as a result of these actions.
19    (e) The Department, in consultation with the Department of
20Revenue, shall adopt rules to administer this Section. The
21aggregate amount of the tax credits that may be claimed under
22this Section for qualified education expenses incurred by an
23employer on behalf of a qualifying apprentice shall be limited
24to $5,000,000 per calendar year. If applications for a greater
25amount are received, credits shall be allowed on a first-come
26first-served basis, based on the date on which each properly

 

 

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1completed application for a certificate of eligibility is
2received by the Department. If more than one certificate is
3received on the same day, the credits will be awarded based on
4the time of submission for that particular day.
5    (f) An employer may not sell or otherwise transfer a
6credit awarded under this Section to another person or
7taxpayer.
8    (g) The employer shall provide the Department such
9information as the Department may require, including but not
10limited to: (i) the name, age, and taxpayer identification
11number of each qualifying apprentice employed by the taxpayer
12during the taxable year; (ii) the amount of qualified
13education expenses incurred with respect to each qualifying
14apprentice; and (iii) the name of the school at which the
15qualifying apprentice is enrolled and the qualified education
16expenses are incurred.
17    (h) On or before July 1 of each year, the Department shall
18report to the Governor and the General Assembly on the tax
19credit certificates awarded under this Section for the prior
20calendar year. The report must include:
21        (1) the name of each employer awarded or allocated a
22    credit;
23        (2) the number of qualifying apprentices for whom the
24    employer has incurred qualified education expenses;
25        (3) the North American Industry Classification System
26    (NAICS) code applicable to each employer awarded or

 

 

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1    allocated a credit;
2        (4) the amount of the credit awarded or allocated to
3    each employer;
4        (5) the total number of employers awarded or allocated
5    a credit;
6        (6) the total number of qualifying apprentices for
7    whom employers receiving credits under this Section
8    incurred qualified education expenses; and
9        (7) the average cost to the employer of all
10    apprenticeships receiving credits under this Section.
11(Source: P.A. 101-207, eff. 8-2-19; revised 9-5-19.)
 
12    Section 99. Effective date. This Act takes effect upon
13becoming law.