98TH GENERAL ASSEMBLY
State of Illinois
2013 and 2014
SB2974

 

Introduced 2/4/2014, by Sen. Thomas Cullerton

 

SYNOPSIS AS INTRODUCED:
 
35 ILCS 10/5-15

    Amends the Economic Development for a Growing Economy Tax Credit Act. Provides that certain taxpayers that are primarily engaged in business as hardware wholesalers may elect to claim the credit against their withholding tax liability.


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FISCAL NOTE ACT MAY APPLY

 

 

A BILL FOR

 

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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 set
8forth in this Act, a Taxpayer is entitled to a Credit against
9or, as described in subsection (g) of this Section, a payment
10towards taxes imposed pursuant to subsections (a) and (b) of
11Section 201 of the Illinois Income Tax Act that may be imposed
12on the Taxpayer for a taxable year beginning on or after
13January 1, 1999, if the Taxpayer is awarded a Credit by the
14Department 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

 

 

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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, the Taxpayer may elect to
9claim the Credit against its obligation to pay over withholding
10under Section 704A of the Illinois Income Tax Act.
11        (1) The election under this subsection (f) may be made
12    only by a Taxpayer that (i) is primarily engaged in one of
13    the following business activities: water purification and
14    treatment, motor vehicle metal stamping, automobile
15    manufacturing, automobile and light duty motor vehicle
16    manufacturing, motor vehicle manufacturing, light truck
17    and utility vehicle manufacturing, heavy duty truck
18    manufacturing, motor vehicle body manufacturing, cable
19    television infrastructure design or manufacturing, or
20    wireless telecommunication or computing terminal device
21    design or manufacturing for use on public networks and (ii)
22    meets the following criteria:
23            (A) the Taxpayer (i) had an Illinois net loss or an
24        Illinois net loss deduction under Section 207 of the
25        Illinois Income Tax Act for the taxable year in which
26        the Credit is awarded, (ii) employed a minimum of 1,000

 

 

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1        full-time employees in this State during the taxable
2        year in which the Credit is awarded, (iii) has an
3        Agreement under this Act on December 14, 2009 (the
4        effective date of Public Act 96-834), and (iv) is in
5        compliance with all provisions of that Agreement;
6            (B) the Taxpayer (i) had an Illinois net loss or an
7        Illinois net loss deduction under Section 207 of the
8        Illinois Income Tax Act for the taxable year in which
9        the Credit is awarded, (ii) employed a minimum of 1,000
10        full-time employees in this State during the taxable
11        year in which the Credit is awarded, and (iii) has
12        applied for an Agreement within 365 days after December
13        14, 2009 (the effective date of Public Act 96-834);
14            (C) the Taxpayer (i) had an Illinois net operating
15        loss carryforward under Section 207 of the Illinois
16        Income Tax Act in a taxable year ending during calendar
17        year 2008, (ii) has applied for an Agreement within 150
18        days after the effective date of this amendatory Act of
19        the 96th General Assembly, (iii) creates at least 400
20        new jobs in Illinois, (iv) retains at least 2,000 jobs
21        in Illinois that would have been at risk of relocation
22        out of Illinois over a 10-year period, and (v) makes a
23        capital investment of at least $75,000,000;
24            (D) the Taxpayer (i) had an Illinois net operating
25        loss carryforward under Section 207 of the Illinois
26        Income Tax Act in a taxable year ending during calendar

 

 

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1        year 2009, (ii) has applied for an Agreement within 150
2        days after the effective date of this amendatory Act of
3        the 96th General Assembly, (iii) creates at least 150
4        new jobs, (iv) retains at least 1,000 jobs in Illinois
5        that would have been at risk of relocation out of
6        Illinois over a 10-year period, and (v) makes a capital
7        investment of at least $57,000,000; or
8            (E) the Taxpayer (i) employed at least 2,500
9        full-time employees in the State during the year in
10        which the Credit is awarded, (ii) commits to make at
11        least $500,000,000 in combined capital improvements
12        and project costs under the Agreement, (iii) applies
13        for an Agreement between January 1, 2011 and June 30,
14        2011, (iv) executes an Agreement for the Credit during
15        calendar year 2011, and (v) was incorporated no more
16        than 5 years before the filing of an application for an
17        Agreement.
18        (1.5) The election under this subsection (f) may also
19    be made by a Taxpayer for any Credit awarded pursuant to an
20    agreement that was executed between January 1, 2011 and
21    June 30, 2011, if the Taxpayer (i) is primarily engaged in
22    the manufacture of inner tubes or tires, or both, from
23    natural and synthetic rubber, (ii) employs a minimum of
24    2,400 full-time employees in Illinois at the time of
25    application, (iii) creates at least 350 full-time jobs and
26    retains at least 250 full-time jobs in Illinois that would

 

 

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1    have been at risk of being created or retained outside of
2    Illinois, and (iv) makes a capital investment of at least
3    $200,000,000 at the project location.
4        (1.6) The election under this subsection (f) may also
5    be made by a Taxpayer for any Credit awarded pursuant to an
6    agreement that was executed within 150 days after the
7    effective date of this amendatory Act of the 97th General
8    Assembly, if the Taxpayer (i) is primarily engaged in the
9    operation of a discount department store, (ii) maintains
10    its corporate headquarters in Illinois, (iii) employs a
11    minimum of 4,250 full-time employees at its corporate
12    headquarters in Illinois at the time of application, (iv)
13    retains at least 4,250 full-time jobs in Illinois that
14    would have been at risk of being relocated outside of
15    Illinois, (v) had a minimum of $40,000,000,000 in total
16    revenue in 2010, and (vi) makes a capital investment of at
17    least $300,000,000 at the project location.
18        (1.7) Notwithstanding any other provision of law, the
19    election under this subsection (f) may also be made by a
20    Taxpayer for any Credit awarded pursuant to an agreement
21    that was executed or applied for on or after July 1, 2011
22    and on or before March 31, 2012, if the Taxpayer is
23    primarily engaged in the manufacture of original and
24    aftermarket filtration parts and products for automobiles,
25    motor vehicles, light duty motor vehicles, light trucks and
26    utility vehicles, and heavy duty trucks, (ii) employs a

 

 

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1    minimum of 1,000 full-time employees in Illinois at the
2    time of application, (iii) creates at least 250 full-time
3    jobs in Illinois, (iv) relocates its corporate
4    headquarters to Illinois from another state, and (v) makes
5    a capital investment of at least $4,000,000 at the project
6    location.
7        (1.8) Notwithstanding any other provision of law, the
8    election under this subsection (f) may also be made by a
9    Taxpayer for any Credit awarded pursuant to an agreement
10    that was executed or applied for on or after January 1,
11    2012 and on or before June 30, 2012, if the Taxpayer (i) is
12    primarily engaged in hardware wholesale, (ii) retains its
13    corporate headquarters in Illinois, (iii) retains at least
14    740 full-time jobs in Illinois, and (iv) makes a capital
15    investment of at least $28,000,000 at the project location.
16        (2) An election under this subsection shall allow the
17    credit to be taken against payments otherwise due under
18    Section 704A of the Illinois Income Tax Act during the
19    first calendar year beginning after the end of the taxable
20    year in which the credit is awarded under this Act.
21        (3) The election shall be made in the form and manner
22    required by the Illinois Department of Revenue and, once
23    made, shall be irrevocable.
24        (4) If a Taxpayer who meets the requirements of
25    subparagraph (A) of paragraph (1) of this subsection (f)
26    elects to claim the Credit against its withholdings as

 

 

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1    provided in this subsection (f), then, on and after the
2    date of the election, the terms of the Agreement between
3    the Taxpayer and the Department may not be further amended
4    during the term of the Agreement.
5    (g) A pass-through entity that has been awarded a credit
6under this Act, its shareholders, or its partners may treat
7some or all of the credit awarded pursuant to this Act as a tax
8payment for purposes of the Illinois Income Tax Act. The term
9"tax payment" means a payment as described in Article 6 or
10Article 8 of the Illinois Income Tax Act or a composite payment
11made by a pass-through entity on behalf of any of its
12shareholders or partners to satisfy such shareholders' or
13partners' taxes imposed pursuant to subsections (a) and (b) of
14Section 201 of the Illinois Income Tax Act. In no event shall
15the amount of the award credited pursuant to this Act exceed
16the Illinois income tax liability of the pass-through entity or
17its shareholders or partners for the taxable year.
18(Source: P.A. 96-834, eff. 12-14-09; 96-836, eff. 12-16-09;
1996-905, eff. 6-4-10; 96-1000, eff. 7-2-10; 96-1534, eff.
203-4-11; 97-2, eff. 5-6-11; 97-636, eff. 6-1-12.)