Illinois General Assembly - Full Text of SB3719
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Full Text of SB3719  102nd General Assembly

SB3719 102ND GENERAL ASSEMBLY

  
  

 


 
102ND GENERAL ASSEMBLY
State of Illinois
2021 and 2022
SB3719

 

Introduced 1/21/2022, by Sen. Donald P. DeWitte

 

SYNOPSIS AS INTRODUCED:
 
35 ILCS 5/232 new
35 ILCS 5/704A

    Amends the Illinois Income Tax Act. Creates an income tax credit for a taxpayer that hires a new employee for a position as a driver for which a commercial driver's license is required and an individual taxpayer who is employed as a driver in a position in which a commercial driver's license is required. Effective immediately.


LRB102 24145 HLH 33371 b

 

 

A BILL FOR

 

SB3719LRB102 24145 HLH 33371 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
5adding Section 232 and by changing Section 704A as follows:
 
6    (35 ILCS 5/232 new)
7    Sec. 232. Commercial driver's license employment tax
8credit.
9    (a) For tax years beginning on and after January 1, 2022
10and ending on or before December 31, 2024, a taxpayer that
11hires a new employee for a position as a driver for which a
12commercial driver's license is required under Article V of the
13Illinois Vehicle Code, and an individual taxpayer who is
14employed as a driver in a position in which a commercial
15driver's license is required, is entitled to a credit against
16the taxes imposed under subsections (a) and (b) of Section 201
17of this Section. The amount of the credit for the employer and
18employee shall each be equal to 2.475% of the wages paid during
19the taxable year to the full-time or part-time employee. In
20lieu of the credit allowed under this Section against the
21taxes imposed pursuant to subsections (a) and (b) of Section
22201 of the Illinois Income Tax Act reported on the taxpayer's
23annual return or the returns of partners or Subchapter S

 

 

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1corporation shareholders of the taxpayer, the employing
2taxpayer may elect to claim the credit against its obligation
3to pay over withholding under Section 704A of the Illinois
4Income Tax Act. If requested by the employee taxpayer, the
5employing taxpayer shall reduce the amount of withholding
6required on wages under Section 704A of the Illinois Income
7Tax Act on each paycheck by taking into account the employee
8tax credit.
9    (b) In order to qualify for the credit, the duties of the
10employee must be primarily, greater than 50%, driving a
11vehicle for which a commercial driver's license is required.
12    (c) If the taxpayer is a partnership, a Subchapter S
13corporation, or a limited liability company that has elected
14partnership tax treatment, the employing taxpayer's credit
15shall be allowed to the partners, shareholders, or members in
16accordance with the determination of income and distributive
17share of income under Sections 702 and 704 and subchapter S of
18the Internal Revenue Code, as applicable. The Department, in
19cooperation with the Department of Commerce and Economic
20Opportunity, shall adopt rules to enforce and administer this
21Section.
22    (d) As used in this Section, "new employee" means an
23employee who is hired on or after the effective date of this
24amendatory Act of the 102nd General Assembly for a new or
25vacant position with the employer.
26    (e) This Section is exempt from the provisions of Section

 

 

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1250 of this Act.
 
2    (35 ILCS 5/704A)
3    Sec. 704A. Employer's return and payment of tax withheld.
4    (a) In general, every employer who deducts and withholds
5or is required to deduct and withhold tax under this Act on or
6after January 1, 2008 shall make those payments and returns as
7provided in this Section.
8    (b) Returns. Every employer shall, in the form and manner
9required by the Department, make returns with respect to taxes
10withheld or required to be withheld under this Article 7 for
11each quarter beginning on or after January 1, 2008, on or
12before the last day of the first month following the close of
13that quarter.
14    (c) Payments. With respect to amounts withheld or required
15to be withheld on or after January 1, 2008:
16        (1) Semi-weekly payments. For each calendar year, each
17    employer who withheld or was required to withhold more
18    than $12,000 during the one-year period ending on June 30
19    of the immediately preceding calendar year, payment must
20    be made:
21            (A) on or before each Friday of the calendar year,
22        for taxes withheld or required to be withheld on the
23        immediately preceding Saturday, Sunday, Monday, or
24        Tuesday;
25            (B) on or before each Wednesday of the calendar

 

 

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1        year, for taxes withheld or required to be withheld on
2        the immediately preceding Wednesday, Thursday, or
3        Friday.
4        Beginning with calendar year 2011, payments made under
5    this paragraph (1) of subsection (c) must be made by
6    electronic funds transfer.
7        (2) Semi-weekly payments. Any employer who withholds
8    or is required to withhold more than $12,000 in any
9    quarter of a calendar year is required to make payments on
10    the dates set forth under item (1) of this subsection (c)
11    for each remaining quarter of that calendar year and for
12    the subsequent calendar year.
13        (3) Monthly payments. Each employer, other than an
14    employer described in items (1) or (2) of this subsection,
15    shall pay to the Department, on or before the 15th day of
16    each month the taxes withheld or required to be withheld
17    during the immediately preceding month.
18        (4) Payments with returns. Each employer shall pay to
19    the Department, on or before the due date for each return
20    required to be filed under this Section, any tax withheld
21    or required to be withheld during the period for which the
22    return is due and not previously paid to the Department.
23    (d) Regulatory authority. The Department may, by rule:
24        (1) Permit employers, in lieu of the requirements of
25    subsections (b) and (c), to file annual returns due on or
26    before January 31 of the year for taxes withheld or

 

 

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1    required to be withheld during the previous calendar year
2    and, if the aggregate amounts required to be withheld by
3    the employer under this Article 7 (other than amounts
4    required to be withheld under Section 709.5) do not exceed
5    $1,000 for the previous calendar year, to pay the taxes
6    required to be shown on each such return no later than the
7    due date for such return.
8        (2) Provide that any payment required to be made under
9    subsection (c)(1) or (c)(2) is deemed to be timely to the
10    extent paid by electronic funds transfer on or before the
11    due date for deposit of federal income taxes withheld
12    from, or federal employment taxes due with respect to, the
13    wages from which the Illinois taxes were withheld.
14        (3) Designate one or more depositories to which
15    payment of taxes required to be withheld under this
16    Article 7 must be paid by some or all employers.
17        (4) Increase the threshold dollar amounts at which
18    employers are required to make semi-weekly payments under
19    subsection (c)(1) or (c)(2).
20    (e) Annual return and payment. Every employer who deducts
21and withholds or is required to deduct and withhold tax from a
22person engaged in domestic service employment, as that term is
23defined in Section 3510 of the Internal Revenue Code, may
24comply with the requirements of this Section with respect to
25such employees by filing an annual return and paying the taxes
26required to be deducted and withheld on or before the 15th day

 

 

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1of the fourth month following the close of the employer's
2taxable year. The Department may allow the employer's return
3to be submitted with the employer's individual income tax
4return or to be submitted with a return due from the employer
5under Section 1400.2 of the Unemployment Insurance Act.
6    (f) Magnetic media and electronic filing. With respect to
7taxes withheld in calendar years prior to 2017, any W-2 Form
8that, under the Internal Revenue Code and regulations
9promulgated thereunder, is required to be submitted to the
10Internal Revenue Service on magnetic media or electronically
11must also be submitted to the Department on magnetic media or
12electronically for Illinois purposes, if required by the
13Department.
14    With respect to taxes withheld in 2017 and subsequent
15calendar years, the Department may, by rule, require that any
16return (including any amended return) under this Section and
17any W-2 Form that is required to be submitted to the Department
18must be submitted on magnetic media or electronically.
19    The due date for submitting W-2 Forms shall be as
20prescribed by the Department by rule.
21    (g) For amounts deducted or withheld after December 31,
222009, a taxpayer who makes an election under subsection (f) of
23Section 5-15 of the Economic Development for a Growing Economy
24Tax Credit Act for a taxable year shall be allowed a credit
25against payments due under this Section for amounts withheld
26during the first calendar year beginning after the end of that

 

 

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1taxable year equal to the amount of the credit for the
2incremental income tax attributable to full-time employees of
3the taxpayer awarded to the taxpayer by the Department of
4Commerce and Economic Opportunity under the Economic
5Development for a Growing Economy Tax Credit Act for the
6taxable year and credits not previously claimed and allowed to
7be carried forward under Section 211(4) of this Act as
8provided in subsection (f) of Section 5-15 of the Economic
9Development for a Growing Economy Tax Credit Act. The credit
10or credits may not reduce the taxpayer's obligation for any
11payment due under this Section to less than zero. If the amount
12of the credit or credits exceeds the total payments due under
13this Section with respect to amounts withheld during the
14calendar year, the excess may be carried forward and applied
15against the taxpayer's liability under this Section in the
16succeeding calendar years as allowed to be carried forward
17under paragraph (4) of Section 211 of this Act. The credit or
18credits shall be applied to the earliest year for which there
19is a tax liability. If there are credits from more than one
20taxable year that are available to offset a liability, the
21earlier credit shall be applied first. Each employer who
22deducts and withholds or is required to deduct and withhold
23tax under this Act and who retains income tax withholdings
24under subsection (f) of Section 5-15 of the Economic
25Development for a Growing Economy Tax Credit Act must make a
26return with respect to such taxes and retained amounts in the

 

 

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1form and manner that the Department, by rule, requires and pay
2to the Department or to a depositary designated by the
3Department those withheld taxes not retained by the taxpayer.
4For purposes of this subsection (g), the term taxpayer shall
5include taxpayer and members of the taxpayer's unitary
6business group as defined under paragraph (27) of subsection
7(a) of Section 1501 of this Act. This Section is exempt from
8the provisions of Section 250 of this Act. No credit awarded
9under the Economic Development for a Growing Economy Tax
10Credit Act for agreements entered into on or after January 1,
112015 may be credited against payments due under this Section.
12    (g-1) For amounts deducted or withheld after December 31,
132024, a taxpayer who makes an election under the Reimagining
14Electric Vehicles in Illinois Act shall be allowed a credit
15against payments due under this Section for amounts withheld
16during the first quarterly reporting period beginning after
17the certificate is issued equal to the portion of the REV
18Illinois Credit attributable to the incremental income tax
19attributable to new employees and retained employees as
20certified by the Department of Commerce and Economic
21Opportunity pursuant to an agreement with the taxpayer under
22the Reimagining Electric Vehicles in Illinois Act for the
23taxable year. The credit or credits may not reduce the
24taxpayer's obligation for any payment due under this Section
25to less than zero. If the amount of the credit or credits
26exceeds the total payments due under this Section with respect

 

 

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1to amounts withheld during the quarterly reporting period, the
2excess may be carried forward and applied against the
3taxpayer's liability under this Section in the succeeding
4quarterly reporting period as allowed to be carried forward
5under paragraph (4) of Section 211 of this Act. The credit or
6credits shall be applied to the earliest quarterly reporting
7period for which there is a tax liability. If there are credits
8from more than one quarterly reporting period that are
9available to offset a liability, the earlier credit shall be
10applied first. Each employer who deducts and withholds or is
11required to deduct and withhold tax under this Act and who
12retains income tax withholdings this subsection must make a
13return with respect to such taxes and retained amounts in the
14form and manner that the Department, by rule, requires and pay
15to the Department or to a depositary designated by the
16Department those withheld taxes not retained by the taxpayer.
17For purposes of this subsection (g-1), the term taxpayer shall
18include taxpayer and members of the taxpayer's unitary
19business group as defined under paragraph (27) of subsection
20(a) of Section 1501 of this Act. This Section is exempt from
21the provisions of Section 250 of this Act.
22    (h) An employer may claim a credit against payments due
23under this Section for amounts withheld during the first
24calendar year ending after the date on which a tax credit
25certificate was issued under Section 35 of the Small Business
26Job Creation Tax Credit Act. The credit shall be equal to the

 

 

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1amount shown on the certificate, but may not reduce the
2taxpayer's obligation for any payment due under this Section
3to less than zero. If the amount of the credit exceeds the
4total payments due under this Section with respect to amounts
5withheld during the calendar year, the excess may be carried
6forward and applied against the taxpayer's liability under
7this Section in the 5 succeeding calendar years. The credit
8shall be applied to the earliest year for which there is a tax
9liability. If there are credits from more than one calendar
10year that are available to offset a liability, the earlier
11credit shall be applied first. This Section is exempt from the
12provisions of Section 250 of this Act.
13    (i) Each employer with 50 or fewer full-time equivalent
14employees during the reporting period may claim a credit
15against the payments due under this Section for each qualified
16employee in an amount equal to the maximum credit allowable.
17The credit may be taken against payments due for reporting
18periods that begin on or after January 1, 2020, and end on or
19before December 31, 2027. An employer may not claim a credit
20for an employee who has worked fewer than 90 consecutive days
21immediately preceding the reporting period; however, such
22credits may accrue during that 90-day period and be claimed
23against payments under this Section for future reporting
24periods after the employee has worked for the employer at
25least 90 consecutive days. In no event may the credit exceed
26the employer's liability for the reporting period. Each

 

 

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1employer who deducts and withholds or is required to deduct
2and withhold tax under this Act and who retains income tax
3withholdings under this subsection must make a return with
4respect to such taxes and retained amounts in the form and
5manner that the Department, by rule, requires and pay to the
6Department or to a depositary designated by the Department
7those withheld taxes not retained by the employer.
8    For each reporting period, the employer may not claim a
9credit or credits for more employees than the number of
10employees making less than the minimum or reduced wage for the
11current calendar year during the last reporting period of the
12preceding calendar year. Notwithstanding any other provision
13of this subsection, an employer shall not be eligible for
14credits for a reporting period unless the average wage paid by
15the employer per employee for all employees making less than
16$55,000 during the reporting period is greater than the
17average wage paid by the employer per employee for all
18employees making less than $55,000 during the same reporting
19period of the prior calendar year.
20    For purposes of this subsection (i):
21    "Compensation paid in Illinois" has the meaning ascribed
22to that term under Section 304(a)(2)(B) of this Act.
23    "Employer" and "employee" have the meaning ascribed to
24those terms in the Minimum Wage Law, except that "employee"
25also includes employees who work for an employer with fewer
26than 4 employees. Employers that operate more than one

 

 

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1establishment pursuant to a franchise agreement or that
2constitute members of a unitary business group shall aggregate
3their employees for purposes of determining eligibility for
4the credit.
5    "Full-time equivalent employees" means the ratio of the
6number of paid hours during the reporting period and the
7number of working hours in that period.
8    "Maximum credit" means the percentage listed below of the
9difference between the amount of compensation paid in Illinois
10to employees who are paid not more than the required minimum
11wage reduced by the amount of compensation paid in Illinois to
12employees who were paid less than the current required minimum
13wage during the reporting period prior to each increase in the
14required minimum wage on January 1. If an employer pays an
15employee more than the required minimum wage and that employee
16previously earned less than the required minimum wage, the
17employer may include the portion that does not exceed the
18required minimum wage as compensation paid in Illinois to
19employees who are paid not more than the required minimum
20wage.
21        (1) 25% for reporting periods beginning on or after
22    January 1, 2020 and ending on or before December 31, 2020;
23        (2) 21% for reporting periods beginning on or after
24    January 1, 2021 and ending on or before December 31, 2021;
25        (3) 17% for reporting periods beginning on or after
26    January 1, 2022 and ending on or before December 31, 2022;

 

 

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1        (4) 13% for reporting periods beginning on or after
2    January 1, 2023 and ending on or before December 31, 2023;
3        (5) 9% for reporting periods beginning on or after
4    January 1, 2024 and ending on or before December 31, 2024;
5        (6) 5% for reporting periods beginning on or after
6    January 1, 2025 and ending on or before December 31, 2025.
7    The amount computed under this subsection may continue to
8be claimed for reporting periods beginning on or after January
91, 2026 and:
10        (A) ending on or before December 31, 2026 for
11    employers with more than 5 employees; or
12        (B) ending on or before December 31, 2027 for
13    employers with no more than 5 employees.
14    "Qualified employee" means an employee who is paid not
15more than the required minimum wage and has an average wage
16paid per hour by the employer during the reporting period
17equal to or greater than his or her average wage paid per hour
18by the employer during each reporting period for the
19immediately preceding 12 months. A new qualified employee is
20deemed to have earned the required minimum wage in the
21preceding reporting period.
22    "Reporting period" means the quarter for which a return is
23required to be filed under subsection (b) of this Section.
24    (j) An employer may claim a credit against payments due
25under this Section as provided in Section 232.
26(Source: P.A. 101-1, eff. 2-19-19; 102-669, eff. 11-16-21.)
 

 

 

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1    Section 99. Effective date. This Act takes effect upon
2becoming law.