Illinois General Assembly - Full Text of SB0004
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Full Text of SB0004  97th General Assembly

SB0004enr 97TH GENERAL ASSEMBLY

  
  
  

 


 
SB0004 EnrolledLRB097 05762 HLH 45827 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 Corporate Accountability for Tax
5Expenditures Act is amended by changing Section 25 as follows:
 
6    (20 ILCS 715/25)
7    Sec. 25. Recapture.
8    (a) All development assistance agreements shall contain,
9at a minimum, the following recapture provisions:
10        (1) The recipient must (i) make the level of capital
11    investment in the economic development project specified
12    in the development assistance agreement; (ii) create or
13    retain, or both, the requisite number of jobs, paying not
14    less than specified wages for the created and retained
15    jobs, within and for the duration of the time period
16    specified in the legislation authorizing, or the
17    administrative rules implementing, the development
18    assistance programs and the development assistance
19    agreement.
20        (2) If the recipient fails to create or retain the
21    requisite number of jobs within and for the time period
22    specified, in the legislation authorizing, or the
23    administrative rules implementing, the development

 

 

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1    assistance programs and the development assistance
2    agreement, the recipient shall be deemed to no longer
3    qualify for the State economic assistance and the
4    applicable recapture provisions shall take effect.
5        (3) If the recipient receives State economic
6    assistance in the form of a High Impact Business
7    designation pursuant to Section 5.5 of the Illinois
8    Enterprise Zone Act and the business receives the benefit
9    of the exemption authorized under Section 5l of the
10    Retailers' Occupation Tax Act (for the sale of building
11    materials incorporated into a High Impact Business
12    location) and the recipient fails to create or retain the
13    requisite number of jobs, as determined by the legislation
14    authorizing the development assistance programs or the
15    administrative rules implementing such legislation, or
16    both, within the requisite period of time, the recipient
17    shall be required to pay to the State the full amount of
18    the State tax exemption that it received as a result of the
19    High Impact Business designation.
20        (4) If the recipient receives a grant or loan pursuant
21    to the Large Business Development Program, the Business
22    Development Public Infrastructure Program, or the
23    Industrial Training Program and the recipient fails to
24    create or retain the requisite number of jobs for the
25    requisite time period, as provided in the legislation
26    authorizing the development assistance programs or the

 

 

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1    administrative rules implementing such legislation, or
2    both, or in the development assistance agreement, the
3    recipient shall be required to repay to the State a pro
4    rata amount of the grant; that amount shall reflect the
5    percentage of the deficiency between the requisite number
6    of jobs to be created or retained by the recipient and the
7    actual number of such jobs in existence as of the date the
8    Department determines the recipient is in breach of the job
9    creation or retention covenants contained in the
10    development assistance agreement. If the recipient of
11    development assistance under the Large Business
12    Development Program, the Business Development Public
13    Infrastructure Program, or the Industrial Training Program
14    ceases operations at the specific project site, during the
15    5-year period commencing on the date of assistance, the
16    recipient shall be required to repay the entire amount of
17    the grant or to accelerate repayment of the loan back to
18    the State.
19        (5) If the recipient receives a tax credit under the
20    Economic Development for a Growing Economy tax credit
21    program, the development assistance agreement must provide
22    that (i) if the number of new or retained employees falls
23    below the requisite number set forth in the development
24    assistance agreement, the allowance of the credit shall be
25    automatically suspended until the number of new and
26    retained employees equals or exceeds the requisite number

 

 

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1    in the development assistance agreement; (ii) if the
2    recipient discontinues operations at the specific project
3    site during the 5-year period after the beginning of the
4    first tax year for which the Department issues a tax credit
5    certificate the first 5 years of the 10-year term of the
6    development assistance agreement, the recipient shall
7    forfeit all credits taken by the recipient during such
8    5-year period; and (iii) in the event of a revocation or
9    suspension of the credit, the Department shall contact the
10    Director of Revenue to initiate proceedings against the
11    recipient to recover wrongfully exempted Illinois State
12    income taxes and the recipient shall promptly repay to the
13    Department of Revenue any wrongfully exempted Illinois
14    State income taxes. The forfeited amount of credits shall
15    be deemed assessed on the date the Department contacts the
16    Department of Revenue and the recipient shall promptly
17    repay to the Department of Revenue any wrongfully exempted
18    Illinois State income taxes.
19    (b) The Director may elect to waive enforcement of any
20contractual provision arising out of the development
21assistance agreement required by this Act based on a finding
22that the waiver is necessary to avert an imminent and
23demonstrable hardship to the recipient that may result in such
24recipient's insolvency or discharge of workers. If a waiver is
25granted, the recipient must agree to a contractual
26modification, including recapture provisions, to the

 

 

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1development assistance agreement. The existence of any waiver
2granted pursuant to this subsection (c), the date of the
3granting of such waiver, and a brief summary of the reasons
4supporting the granting of such waiver shall be disclosed
5consistent with the provisions of Section 25 of this Act.
6    (c) Beginning June 1, 2004, the Department shall annually
7compile a report on the outcomes and effectiveness of recapture
8provisions by program, including but not limited to: (i) the
9total number of companies that receive development assistance
10as defined in this Act; (ii) the total number of recipients in
11violation of development agreements with the Department; (iii)
12the total number of completed recapture efforts; (iv) the total
13number of recapture efforts initiated; and (v) the number of
14waivers granted. This report shall be disclosed consistent with
15the provisions of Section 20 of this Act.
16    (d) For the purposes of this Act, recapture provisions do
17not include the Illinois Department of Transportation Economic
18Development Program, any grants under the Industrial Training
19Program that are not given as an incentive to a recipient
20business organization, or any successor programs as described
21in the term "development assistance" in Section 5 of this Act.
22(Source: P.A. 93-552, eff. 8-20-03.)
 
23    Section 10. The Illinois Income Tax Act is amended by
24changing Section 201 as follows:
 

 

 

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1    (35 ILCS 5/201)  (from Ch. 120, par. 2-201)
2    Sec. 201. Tax Imposed.
3    (a) In general. A tax measured by net income is hereby
4imposed on every individual, corporation, trust and estate for
5each taxable year ending after July 31, 1969 on the privilege
6of earning or receiving income in or as a resident of this
7State. Such tax shall be in addition to all other occupation or
8privilege taxes imposed by this State or by any municipal
9corporation or political subdivision thereof.
10    (b) Rates. The tax imposed by subsection (a) of this
11Section shall be determined as follows, except as adjusted by
12subsection (d-1):
13        (1) In the case of an individual, trust or estate, for
14    taxable years ending prior to July 1, 1989, an amount equal
15    to 2 1/2% of the taxpayer's net income for the taxable
16    year.
17        (2) In the case of an individual, trust or estate, for
18    taxable years beginning prior to July 1, 1989 and ending
19    after June 30, 1989, an amount equal to the sum of (i) 2
20    1/2% of the taxpayer's net income for the period prior to
21    July 1, 1989, as calculated under Section 202.3, and (ii)
22    3% of the taxpayer's net income for the period after June
23    30, 1989, as calculated under Section 202.3.
24        (3) In the case of an individual, trust or estate, for
25    taxable years beginning after June 30, 1989, and ending
26    prior to January 1, 2011, an amount equal to 3% of the

 

 

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1    taxpayer's net income for the taxable year.
2        (4) In the case of an individual, trust, or estate, for
3    taxable years beginning prior to January 1, 2011, and
4    ending after December 31, 2010, an amount equal to the sum
5    of (i) 3% of the taxpayer's net income for the period prior
6    to January 1, 2011, as calculated under Section 202.5, and
7    (ii) 5% of the taxpayer's net income for the period after
8    December 31, 2010, as calculated under Section 202.5.
9        (5) In the case of an individual, trust, or estate, for
10    taxable years beginning on or after January 1, 2011, and
11    ending prior to January 1, 2015, an amount equal to 5% of
12    the taxpayer's net income for the taxable year.
13        (5.1) In the case of an individual, trust, or estate,
14    for taxable years beginning prior to January 1, 2015, and
15    ending after December 31, 2014, an amount equal to the sum
16    of (i) 5% of the taxpayer's net income for the period prior
17    to January 1, 2015, as calculated under Section 202.5, and
18    (ii) 3.75% of the taxpayer's net income for the period
19    after December 31, 2014, as calculated under Section 202.5.
20        (5.2) In the case of an individual, trust, or estate,
21    for taxable years beginning on or after January 1, 2015,
22    and ending prior to January 1, 2025, an amount equal to
23    3.75% of the taxpayer's net income for the taxable year.
24        (5.3) In the case of an individual, trust, or estate,
25    for taxable years beginning prior to January 1, 2025, and
26    ending after December 31, 2024, an amount equal to the sum

 

 

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1    of (i) 3.75% of the taxpayer's net income for the period
2    prior to January 1, 2025, as calculated under Section
3    202.5, and (ii) 3.25% of the taxpayer's net income for the
4    period after December 31, 2024, as calculated under Section
5    202.5.
6        (5.4) In the case of an individual, trust, or estate,
7    for taxable years beginning on or after January 1, 2025, an
8    amount equal to 3.25% of the taxpayer's net income for the
9    taxable year.
10        (6) In the case of a corporation, for taxable years
11    ending prior to July 1, 1989, an amount equal to 4% of the
12    taxpayer's net income for the taxable year.
13        (7) In the case of a corporation, for taxable years
14    beginning prior to July 1, 1989 and ending after June 30,
15    1989, an amount equal to the sum of (i) 4% of the
16    taxpayer's net income for the period prior to July 1, 1989,
17    as calculated under Section 202.3, and (ii) 4.8% of the
18    taxpayer's net income for the period after June 30, 1989,
19    as calculated under Section 202.3.
20        (8) In the case of a corporation, for taxable years
21    beginning after June 30, 1989, and ending prior to January
22    1, 2011, an amount equal to 4.8% of the taxpayer's net
23    income for the taxable year.
24        (9) In the case of a corporation, for taxable years
25    beginning prior to January 1, 2011, and ending after
26    December 31, 2010, an amount equal to the sum of (i) 4.8%

 

 

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1    of the taxpayer's net income for the period prior to
2    January 1, 2011, as calculated under Section 202.5, and
3    (ii) 7% of the taxpayer's net income for the period after
4    December 31, 2010, as calculated under Section 202.5.
5        (10) In the case of a corporation, for taxable years
6    beginning on or after January 1, 2011, and ending prior to
7    January 1, 2015, an amount equal to 7% of the taxpayer's
8    net income for the taxable year.
9        (11) In the case of a corporation, for taxable years
10    beginning prior to January 1, 2015, and ending after
11    December 31, 2014, an amount equal to the sum of (i) 7% of
12    the taxpayer's net income for the period prior to January
13    1, 2015, as calculated under Section 202.5, and (ii) 5.25%
14    of the taxpayer's net income for the period after December
15    31, 2014, as calculated under Section 202.5.
16        (12) In the case of a corporation, for taxable years
17    beginning on or after January 1, 2015, and ending prior to
18    January 1, 2025, an amount equal to 5.25% of the taxpayer's
19    net income for the taxable year.
20        (13) In the case of a corporation, for taxable years
21    beginning prior to January 1, 2025, and ending after
22    December 31, 2024, an amount equal to the sum of (i) 5.25%
23    of the taxpayer's net income for the period prior to
24    January 1, 2025, as calculated under Section 202.5, and
25    (ii) 4.8% of the taxpayer's net income for the period after
26    December 31, 2024, as calculated under Section 202.5.

 

 

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1        (14) In the case of a corporation, for taxable years
2    beginning on or after January 1, 2025, an amount equal to
3    4.8% of the taxpayer's net income for the taxable year.
4    The rates under this subsection (b) are subject to the
5provisions of Section 201.5.
6    (c) Personal Property Tax Replacement Income Tax.
7Beginning on July 1, 1979 and thereafter, in addition to such
8income tax, there is also hereby imposed the Personal Property
9Tax Replacement Income Tax measured by net income on every
10corporation (including Subchapter S corporations), partnership
11and trust, for each taxable year ending after June 30, 1979.
12Such taxes are imposed on the privilege of earning or receiving
13income in or as a resident of this State. The Personal Property
14Tax Replacement Income Tax shall be in addition to the income
15tax imposed by subsections (a) and (b) of this Section and in
16addition to all other occupation or privilege taxes imposed by
17this State or by any municipal corporation or political
18subdivision thereof.
19    (d) Additional Personal Property Tax Replacement Income
20Tax Rates. The personal property tax replacement income tax
21imposed by this subsection and subsection (c) of this Section
22in the case of a corporation, other than a Subchapter S
23corporation and except as adjusted by subsection (d-1), shall
24be an additional amount equal to 2.85% of such taxpayer's net
25income for the taxable year, except that beginning on January
261, 1981, and thereafter, the rate of 2.85% specified in this

 

 

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1subsection shall be reduced to 2.5%, and in the case of a
2partnership, trust or a Subchapter S corporation shall be an
3additional amount equal to 1.5% of such taxpayer's net income
4for the taxable year.
5    (d-1) Rate reduction for certain foreign insurers. In the
6case of a foreign insurer, as defined by Section 35A-5 of the
7Illinois Insurance Code, whose state or country of domicile
8imposes on insurers domiciled in Illinois a retaliatory tax
9(excluding any insurer whose premiums from reinsurance assumed
10are 50% or more of its total insurance premiums as determined
11under paragraph (2) of subsection (b) of Section 304, except
12that for purposes of this determination premiums from
13reinsurance do not include premiums from inter-affiliate
14reinsurance arrangements), beginning with taxable years ending
15on or after December 31, 1999, the sum of the rates of tax
16imposed by subsections (b) and (d) shall be reduced (but not
17increased) to the rate at which the total amount of tax imposed
18under this Act, net of all credits allowed under this Act,
19shall equal (i) the total amount of tax that would be imposed
20on the foreign insurer's net income allocable to Illinois for
21the taxable year by such foreign insurer's state or country of
22domicile if that net income were subject to all income taxes
23and taxes measured by net income imposed by such foreign
24insurer's state or country of domicile, net of all credits
25allowed or (ii) a rate of zero if no such tax is imposed on such
26income by the foreign insurer's state of domicile. For the

 

 

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1purposes of this subsection (d-1), an inter-affiliate includes
2a mutual insurer under common management.
3        (1) For the purposes of subsection (d-1), in no event
4    shall the sum of the rates of tax imposed by subsections
5    (b) and (d) be reduced below the rate at which the sum of:
6            (A) the total amount of tax imposed on such foreign
7        insurer under this Act for a taxable year, net of all
8        credits allowed under this Act, plus
9            (B) the privilege tax imposed by Section 409 of the
10        Illinois Insurance Code, the fire insurance company
11        tax imposed by Section 12 of the Fire Investigation
12        Act, and the fire department taxes imposed under
13        Section 11-10-1 of the Illinois Municipal Code,
14    equals 1.25% for taxable years ending prior to December 31,
15    2003, or 1.75% for taxable years ending on or after
16    December 31, 2003, of the net taxable premiums written for
17    the taxable year, as described by subsection (1) of Section
18    409 of the Illinois Insurance Code. This paragraph will in
19    no event increase the rates imposed under subsections (b)
20    and (d).
21        (2) Any reduction in the rates of tax imposed by this
22    subsection shall be applied first against the rates imposed
23    by subsection (b) and only after the tax imposed by
24    subsection (a) net of all credits allowed under this
25    Section other than the credit allowed under subsection (i)
26    has been reduced to zero, against the rates imposed by

 

 

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1    subsection (d).
2    This subsection (d-1) is exempt from the provisions of
3Section 250.
4    (e) Investment credit. A taxpayer shall be allowed a credit
5against the Personal Property Tax Replacement Income Tax for
6investment in qualified property.
7        (1) A taxpayer shall be allowed a credit equal to .5%
8    of the basis of qualified property placed in service during
9    the taxable year, provided such property is placed in
10    service on or after July 1, 1984. There shall be allowed an
11    additional credit equal to .5% of the basis of qualified
12    property placed in service during the taxable year,
13    provided such property is placed in service on or after
14    July 1, 1986, and the taxpayer's base employment within
15    Illinois has increased by 1% or more over the preceding
16    year as determined by the taxpayer's employment records
17    filed with the Illinois Department of Employment Security.
18    Taxpayers who are new to Illinois shall be deemed to have
19    met the 1% growth in base employment for the first year in
20    which they file employment records with the Illinois
21    Department of Employment Security. The provisions added to
22    this Section by Public Act 85-1200 (and restored by Public
23    Act 87-895) shall be construed as declaratory of existing
24    law and not as a new enactment. If, in any year, the
25    increase in base employment within Illinois over the
26    preceding year is less than 1%, the additional credit shall

 

 

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1    be limited to that percentage times a fraction, the
2    numerator of which is .5% and the denominator of which is
3    1%, but shall not exceed .5%. The investment credit shall
4    not be allowed to the extent that it would reduce a
5    taxpayer's liability in any tax year below zero, nor may
6    any credit for qualified property be allowed for any year
7    other than the year in which the property was placed in
8    service in Illinois. For tax years ending on or after
9    December 31, 1987, and on or before December 31, 1988, the
10    credit shall be allowed for the tax year in which the
11    property is placed in service, or, if the amount of the
12    credit exceeds the tax liability for that year, whether it
13    exceeds the original liability or the liability as later
14    amended, such excess may be carried forward and applied to
15    the tax liability of the 5 taxable years following the
16    excess credit years if the taxpayer (i) makes investments
17    which cause the creation of a minimum of 2,000 full-time
18    equivalent jobs in Illinois, (ii) is located in an
19    enterprise zone established pursuant to the Illinois
20    Enterprise Zone Act and (iii) is certified by the
21    Department of Commerce and Community Affairs (now
22    Department of Commerce and Economic Opportunity) as
23    complying with the requirements specified in clause (i) and
24    (ii) by July 1, 1986. The Department of Commerce and
25    Community Affairs (now Department of Commerce and Economic
26    Opportunity) shall notify the Department of Revenue of all

 

 

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1    such certifications immediately. For tax years ending
2    after December 31, 1988, the credit shall be allowed for
3    the tax year in which the property is placed in service,
4    or, if the amount of the credit exceeds the tax liability
5    for that year, whether it exceeds the original liability or
6    the liability as later amended, such excess may be carried
7    forward and applied to the tax liability of the 5 taxable
8    years following the excess credit years. The credit shall
9    be applied to the earliest year for which there is a
10    liability. If there is credit from more than one tax year
11    that is available to offset a liability, earlier credit
12    shall be applied first.
13        (2) The term "qualified property" means property
14    which:
15            (A) is tangible, whether new or used, including
16        buildings and structural components of buildings and
17        signs that are real property, but not including land or
18        improvements to real property that are not a structural
19        component of a building such as landscaping, sewer
20        lines, local access roads, fencing, parking lots, and
21        other appurtenances;
22            (B) is depreciable pursuant to Section 167 of the
23        Internal Revenue Code, except that "3-year property"
24        as defined in Section 168(c)(2)(A) of that Code is not
25        eligible for the credit provided by this subsection
26        (e);

 

 

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1            (C) is acquired by purchase as defined in Section
2        179(d) of the Internal Revenue Code;
3            (D) is used in Illinois by a taxpayer who is
4        primarily engaged in manufacturing, or in mining coal
5        or fluorite, or in retailing, or was placed in service
6        on or after July 1, 2006 in a River Edge Redevelopment
7        Zone established pursuant to the River Edge
8        Redevelopment Zone Act; and
9            (E) has not previously been used in Illinois in
10        such a manner and by such a person as would qualify for
11        the credit provided by this subsection (e) or
12        subsection (f).
13        (3) For purposes of this subsection (e),
14    "manufacturing" means the material staging and production
15    of tangible personal property by procedures commonly
16    regarded as manufacturing, processing, fabrication, or
17    assembling which changes some existing material into new
18    shapes, new qualities, or new combinations. For purposes of
19    this subsection (e) the term "mining" shall have the same
20    meaning as the term "mining" in Section 613(c) of the
21    Internal Revenue Code. For purposes of this subsection (e),
22    the term "retailing" means the sale of tangible personal
23    property for use or consumption and not for resale, or
24    services rendered in conjunction with the sale of tangible
25    personal property for use or consumption and not for
26    resale. For purposes of this subsection (e), "tangible

 

 

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1    personal property" has the same meaning as when that term
2    is used in the Retailers' Occupation Tax Act, and, for
3    taxable years ending after December 31, 2008, does not
4    include the generation, transmission, or distribution of
5    electricity.
6        (4) The basis of qualified property shall be the basis
7    used to compute the depreciation deduction for federal
8    income tax purposes.
9        (5) If the basis of the property for federal income tax
10    depreciation purposes is increased after it has been placed
11    in service in Illinois by the taxpayer, the amount of such
12    increase shall be deemed property placed in service on the
13    date of such increase in basis.
14        (6) The term "placed in service" shall have the same
15    meaning as under Section 46 of the Internal Revenue Code.
16        (7) If during any taxable year, any property ceases to
17    be qualified property in the hands of the taxpayer within
18    48 months after being placed in service, or the situs of
19    any qualified property is moved outside Illinois within 48
20    months after being placed in service, the Personal Property
21    Tax Replacement Income Tax for such taxable year shall be
22    increased. Such increase shall be determined by (i)
23    recomputing the investment credit which would have been
24    allowed for the year in which credit for such property was
25    originally allowed by eliminating such property from such
26    computation and, (ii) subtracting such recomputed credit

 

 

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1    from the amount of credit previously allowed. For the
2    purposes of this paragraph (7), a reduction of the basis of
3    qualified property resulting from a redetermination of the
4    purchase price shall be deemed a disposition of qualified
5    property to the extent of such reduction.
6        (8) Unless the investment credit is extended by law,
7    the basis of qualified property shall not include costs
8    incurred after December 31, 2013, except for costs incurred
9    pursuant to a binding contract entered into on or before
10    December 31, 2013.
11        (9) Each taxable year ending before December 31, 2000,
12    a partnership may elect to pass through to its partners the
13    credits to which the partnership is entitled under this
14    subsection (e) for the taxable year. A partner may use the
15    credit allocated to him or her under this paragraph only
16    against the tax imposed in subsections (c) and (d) of this
17    Section. If the partnership makes that election, those
18    credits shall be allocated among the partners in the
19    partnership in accordance with the rules set forth in
20    Section 704(b) of the Internal Revenue Code, and the rules
21    promulgated under that Section, and the allocated amount of
22    the credits shall be allowed to the partners for that
23    taxable year. The partnership shall make this election on
24    its Personal Property Tax Replacement Income Tax return for
25    that taxable year. The election to pass through the credits
26    shall be irrevocable.

 

 

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1        For taxable years ending on or after December 31, 2000,
2    a partner that qualifies its partnership for a subtraction
3    under subparagraph (I) of paragraph (2) of subsection (d)
4    of Section 203 or a shareholder that qualifies a Subchapter
5    S corporation for a subtraction under subparagraph (S) of
6    paragraph (2) of subsection (b) of Section 203 shall be
7    allowed a credit under this subsection (e) equal to its
8    share of the credit earned under this subsection (e) during
9    the taxable year by the partnership or Subchapter S
10    corporation, determined in accordance with the
11    determination of income and distributive share of income
12    under Sections 702 and 704 and Subchapter S of the Internal
13    Revenue Code. This paragraph is exempt from the provisions
14    of Section 250.
15    (f) Investment credit; Enterprise Zone; River Edge
16Redevelopment Zone.
17        (1) A taxpayer shall be allowed a credit against the
18    tax imposed by subsections (a) and (b) of this Section for
19    investment in qualified property which is placed in service
20    in an Enterprise Zone created pursuant to the Illinois
21    Enterprise Zone Act or, for property placed in service on
22    or after July 1, 2006, a River Edge Redevelopment Zone
23    established pursuant to the River Edge Redevelopment Zone
24    Act. For partners, shareholders of Subchapter S
25    corporations, and owners of limited liability companies,
26    if the liability company is treated as a partnership for

 

 

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1    purposes of federal and State income taxation, there shall
2    be allowed a credit under this subsection (f) to be
3    determined in accordance with the determination of income
4    and distributive share of income under Sections 702 and 704
5    and Subchapter S of the Internal Revenue Code. The credit
6    shall be .5% of the basis for such property. The credit
7    shall be available only in the taxable year in which the
8    property is placed in service in the Enterprise Zone or
9    River Edge Redevelopment Zone and shall not be allowed to
10    the extent that it would reduce a taxpayer's liability for
11    the tax imposed by subsections (a) and (b) of this Section
12    to below zero. For tax years ending on or after December
13    31, 1985, the credit shall be allowed for the tax year in
14    which the property is placed in service, or, if the amount
15    of the credit exceeds the tax liability for that year,
16    whether it exceeds the original liability or the liability
17    as later amended, such excess may be carried forward and
18    applied to the tax liability of the 5 taxable years
19    following the excess credit year. The credit shall be
20    applied to the earliest year for which there is a
21    liability. If there is credit from more than one tax year
22    that is available to offset a liability, the credit
23    accruing first in time shall be applied first.
24        (2) The term qualified property means property which:
25            (A) is tangible, whether new or used, including
26        buildings and structural components of buildings;

 

 

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1            (B) is depreciable pursuant to Section 167 of the
2        Internal Revenue Code, except that "3-year property"
3        as defined in Section 168(c)(2)(A) of that Code is not
4        eligible for the credit provided by this subsection
5        (f);
6            (C) is acquired by purchase as defined in Section
7        179(d) of the Internal Revenue Code;
8            (D) is used in the Enterprise Zone or River Edge
9        Redevelopment Zone by the taxpayer; and
10            (E) has not been previously used in Illinois in
11        such a manner and by such a person as would qualify for
12        the credit provided by this subsection (f) or
13        subsection (e).
14        (3) The basis of qualified property shall be the basis
15    used to compute the depreciation deduction for federal
16    income tax purposes.
17        (4) If the basis of the property for federal income tax
18    depreciation purposes is increased after it has been placed
19    in service in the Enterprise Zone or River Edge
20    Redevelopment Zone by the taxpayer, the amount of such
21    increase shall be deemed property placed in service on the
22    date of such increase in basis.
23        (5) The term "placed in service" shall have the same
24    meaning as under Section 46 of the Internal Revenue Code.
25        (6) If during any taxable year, any property ceases to
26    be qualified property in the hands of the taxpayer within

 

 

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1    48 months after being placed in service, or the situs of
2    any qualified property is moved outside the Enterprise Zone
3    or River Edge Redevelopment Zone within 48 months after
4    being placed in service, the tax imposed under subsections
5    (a) and (b) of this Section for such taxable year shall be
6    increased. Such increase shall be determined by (i)
7    recomputing the investment credit which would have been
8    allowed for the year in which credit for such property was
9    originally allowed by eliminating such property from such
10    computation, and (ii) subtracting such recomputed credit
11    from the amount of credit previously allowed. For the
12    purposes of this paragraph (6), a reduction of the basis of
13    qualified property resulting from a redetermination of the
14    purchase price shall be deemed a disposition of qualified
15    property to the extent of such reduction.
16        (7) There shall be allowed an additional credit equal
17    to 0.5% of the basis of qualified property placed in
18    service during the taxable year in a River Edge
19    Redevelopment Zone, provided such property is placed in
20    service on or after July 1, 2006, and the taxpayer's base
21    employment within Illinois has increased by 1% or more over
22    the preceding year as determined by the taxpayer's
23    employment records filed with the Illinois Department of
24    Employment Security. Taxpayers who are new to Illinois
25    shall be deemed to have met the 1% growth in base
26    employment for the first year in which they file employment

 

 

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1    records with the Illinois Department of Employment
2    Security. If, in any year, the increase in base employment
3    within Illinois over the preceding year is less than 1%,
4    the additional credit shall be limited to that percentage
5    times a fraction, the numerator of which is 0.5% and the
6    denominator of which is 1%, but shall not exceed 0.5%.
7    (g) Jobs Tax Credit; Enterprise Zone, River Edge
8Redevelopment Zone, and Foreign Trade Zone or Sub-Zone.
9        (1) A taxpayer conducting a trade or business in an
10    enterprise zone or a High Impact Business designated by the
11    Department of Commerce and Economic Opportunity or for
12    taxable years ending on or after December 31, 2006, in a
13    River Edge Redevelopment Zone conducting a trade or
14    business in a federally designated Foreign Trade Zone or
15    Sub-Zone shall be allowed a credit against the tax imposed
16    by subsections (a) and (b) of this Section in the amount of
17    $500 per eligible employee hired to work in the zone during
18    the taxable year.
19        (2) To qualify for the credit:
20            (A) the taxpayer must hire 5 or more eligible
21        employees to work in an enterprise zone, River Edge
22        Redevelopment Zone, or federally designated Foreign
23        Trade Zone or Sub-Zone during the taxable year;
24            (B) the taxpayer's total employment within the
25        enterprise zone, River Edge Redevelopment Zone, or
26        federally designated Foreign Trade Zone or Sub-Zone

 

 

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1        must increase by 5 or more full-time employees beyond
2        the total employed in that zone at the end of the
3        previous tax year for which a jobs tax credit under
4        this Section was taken, or beyond the total employed by
5        the taxpayer as of December 31, 1985, whichever is
6        later; and
7            (C) the eligible employees must be employed 180
8        consecutive days in order to be deemed hired for
9        purposes of this subsection.
10        (3) An "eligible employee" means an employee who is:
11            (A) Certified by the Department of Commerce and
12        Economic Opportunity as "eligible for services"
13        pursuant to regulations promulgated in accordance with
14        Title II of the Job Training Partnership Act, Training
15        Services for the Disadvantaged or Title III of the Job
16        Training Partnership Act, Employment and Training
17        Assistance for Dislocated Workers Program.
18            (B) Hired after the enterprise zone, River Edge
19        Redevelopment Zone, or federally designated Foreign
20        Trade Zone or Sub-Zone was designated or the trade or
21        business was located in that zone, whichever is later.
22            (C) Employed in the enterprise zone, River Edge
23        Redevelopment Zone, or Foreign Trade Zone or Sub-Zone.
24        An employee is employed in an enterprise zone or
25        federally designated Foreign Trade Zone or Sub-Zone if
26        his services are rendered there or it is the base of

 

 

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1        operations for the services performed.
2            (D) A full-time employee working 30 or more hours
3        per week.
4        (4) For tax years ending on or after December 31, 1985
5    and prior to December 31, 1988, the credit shall be allowed
6    for the tax year in which the eligible employees are hired.
7    For tax years ending on or after December 31, 1988, the
8    credit shall be allowed for the tax year immediately
9    following the tax year in which the eligible employees are
10    hired. If the amount of the credit exceeds the tax
11    liability for that year, whether it exceeds the original
12    liability or the liability as later amended, such excess
13    may be carried forward and applied to the tax liability of
14    the 5 taxable years following the excess credit year. The
15    credit shall be applied to the earliest year for which
16    there is a liability. If there is credit from more than one
17    tax year that is available to offset a liability, earlier
18    credit shall be applied first.
19        (5) The Department of Revenue shall promulgate such
20    rules and regulations as may be deemed necessary to carry
21    out the purposes of this subsection (g).
22        (6) The credit shall be available for eligible
23    employees hired on or after January 1, 1986.
24    (h) Investment credit; High Impact Business.
25        (1) Subject to subsections (b) and (b-5) of Section 5.5
26    of the Illinois Enterprise Zone Act, a taxpayer shall be

 

 

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1    allowed a credit against the tax imposed by subsections (a)
2    and (b) of this Section for investment in qualified
3    property which is placed in service by a Department of
4    Commerce and Economic Opportunity designated High Impact
5    Business. The credit shall be .5% of the basis for such
6    property. The credit shall not be available (i) until the
7    minimum investments in qualified property set forth in
8    subdivision (a)(3)(A) of Section 5.5 of the Illinois
9    Enterprise Zone Act have been satisfied or (ii) until the
10    time authorized in subsection (b-5) of the Illinois
11    Enterprise Zone Act for entities designated as High Impact
12    Businesses under subdivisions (a)(3)(B), (a)(3)(C), and
13    (a)(3)(D) of Section 5.5 of the Illinois Enterprise Zone
14    Act, and shall not be allowed to the extent that it would
15    reduce a taxpayer's liability for the tax imposed by
16    subsections (a) and (b) of this Section to below zero. The
17    credit applicable to such investments shall be taken in the
18    taxable year in which such investments have been completed.
19    The credit for additional investments beyond the minimum
20    investment by a designated high impact business authorized
21    under subdivision (a)(3)(A) of Section 5.5 of the Illinois
22    Enterprise Zone Act shall be available only in the taxable
23    year in which the property is placed in service and shall
24    not be allowed to the extent that it would reduce a
25    taxpayer's liability for the tax imposed by subsections (a)
26    and (b) of this Section to below zero. For tax years ending

 

 

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1    on or after December 31, 1987, the credit shall be allowed
2    for the tax year in which the property is placed in
3    service, or, if the amount of the credit exceeds the tax
4    liability for that year, whether it exceeds the original
5    liability or the liability as later amended, such excess
6    may be carried forward and applied to the tax liability of
7    the 5 taxable years following the excess credit year. The
8    credit shall be applied to the earliest year for which
9    there is a liability. If there is credit from more than one
10    tax year that is available to offset a liability, the
11    credit accruing first in time shall be applied first.
12        Changes made in this subdivision (h)(1) by Public Act
13    88-670 restore changes made by Public Act 85-1182 and
14    reflect existing law.
15        (2) The term qualified property means property which:
16            (A) is tangible, whether new or used, including
17        buildings and structural components of buildings;
18            (B) is depreciable pursuant to Section 167 of the
19        Internal Revenue Code, except that "3-year property"
20        as defined in Section 168(c)(2)(A) of that Code is not
21        eligible for the credit provided by this subsection
22        (h);
23            (C) is acquired by purchase as defined in Section
24        179(d) of the Internal Revenue Code; and
25            (D) is not eligible for the Enterprise Zone
26        Investment Credit provided by subsection (f) of this

 

 

SB0004 Enrolled- 28 -LRB097 05762 HLH 45827 b

1        Section.
2        (3) The basis of qualified property shall be the basis
3    used to compute the depreciation deduction for federal
4    income tax purposes.
5        (4) If the basis of the property for federal income tax
6    depreciation purposes is increased after it has been placed
7    in service in a federally designated Foreign Trade Zone or
8    Sub-Zone located in Illinois by the taxpayer, the amount of
9    such increase shall be deemed property placed in service on
10    the date of such increase in basis.
11        (5) The term "placed in service" shall have the same
12    meaning as under Section 46 of the Internal Revenue Code.
13        (6) If during any taxable year ending on or before
14    December 31, 1996, any property ceases to be qualified
15    property in the hands of the taxpayer within 48 months
16    after being placed in service, or the situs of any
17    qualified property is moved outside Illinois within 48
18    months after being placed in service, the tax imposed under
19    subsections (a) and (b) of this Section for such taxable
20    year shall be increased. Such increase shall be determined
21    by (i) recomputing the investment credit which would have
22    been allowed for the year in which credit for such property
23    was originally allowed by eliminating such property from
24    such computation, and (ii) subtracting such recomputed
25    credit from the amount of credit previously allowed. For
26    the purposes of this paragraph (6), a reduction of the

 

 

SB0004 Enrolled- 29 -LRB097 05762 HLH 45827 b

1    basis of qualified property resulting from a
2    redetermination of the purchase price shall be deemed a
3    disposition of qualified property to the extent of such
4    reduction.
5        (7) Beginning with tax years ending after December 31,
6    1996, if a taxpayer qualifies for the credit under this
7    subsection (h) and thereby is granted a tax abatement and
8    the taxpayer relocates its entire facility in violation of
9    the explicit terms and length of the contract under Section
10    18-183 of the Property Tax Code, the tax imposed under
11    subsections (a) and (b) of this Section shall be increased
12    for the taxable year in which the taxpayer relocated its
13    facility by an amount equal to the amount of credit
14    received by the taxpayer under this subsection (h).
15    (i) Credit for Personal Property Tax Replacement Income
16Tax. For tax years ending prior to December 31, 2003, a credit
17shall be allowed against the tax imposed by subsections (a) and
18(b) of this Section for the tax imposed by subsections (c) and
19(d) of this Section. This credit shall be computed by
20multiplying the tax imposed by subsections (c) and (d) of this
21Section by a fraction, the numerator of which is base income
22allocable to Illinois and the denominator of which is Illinois
23base income, and further multiplying the product by the tax
24rate imposed by subsections (a) and (b) of this Section.
25    Any credit earned on or after December 31, 1986 under this
26subsection which is unused in the year the credit is computed

 

 

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1because it exceeds the tax liability imposed by subsections (a)
2and (b) for that year (whether it exceeds the original
3liability or the liability as later amended) may be carried
4forward and applied to the tax liability imposed by subsections
5(a) and (b) of the 5 taxable years following the excess credit
6year, provided that no credit may be carried forward to any
7year ending on or after December 31, 2003. This credit shall be
8applied first to the earliest year for which there is a
9liability. If there is a credit under this subsection from more
10than one tax year that is available to offset a liability the
11earliest credit arising under this subsection shall be applied
12first.
13    If, during any taxable year ending on or after December 31,
141986, the tax imposed by subsections (c) and (d) of this
15Section for which a taxpayer has claimed a credit under this
16subsection (i) is reduced, the amount of credit for such tax
17shall also be reduced. Such reduction shall be determined by
18recomputing the credit to take into account the reduced tax
19imposed by subsections (c) and (d). If any portion of the
20reduced amount of credit has been carried to a different
21taxable year, an amended return shall be filed for such taxable
22year to reduce the amount of credit claimed.
23    (j) Training expense credit. Beginning with tax years
24ending on or after December 31, 1986 and prior to December 31,
252003, a taxpayer shall be allowed a credit against the tax
26imposed by subsections (a) and (b) under this Section for all

 

 

SB0004 Enrolled- 31 -LRB097 05762 HLH 45827 b

1amounts paid or accrued, on behalf of all persons employed by
2the taxpayer in Illinois or Illinois residents employed outside
3of Illinois by a taxpayer, for educational or vocational
4training in semi-technical or technical fields or semi-skilled
5or skilled fields, which were deducted from gross income in the
6computation of taxable income. The credit against the tax
7imposed by subsections (a) and (b) shall be 1.6% of such
8training expenses. For partners, shareholders of subchapter S
9corporations, and owners of limited liability companies, if the
10liability company is treated as a partnership for purposes of
11federal and State income taxation, there shall be allowed a
12credit under this subsection (j) to be determined in accordance
13with the determination of income and distributive share of
14income under Sections 702 and 704 and subchapter S of the
15Internal Revenue Code.
16    Any credit allowed under this subsection which is unused in
17the year the credit is earned may be carried forward to each of
18the 5 taxable years following the year for which the credit is
19first computed until it is used. This credit shall be applied
20first to the earliest year for which there is a liability. If
21there is a credit under this subsection from more than one tax
22year that is available to offset a liability the earliest
23credit arising under this subsection shall be applied first. No
24carryforward credit may be claimed in any tax year ending on or
25after December 31, 2003.
26    (k) Research and development credit.

 

 

SB0004 Enrolled- 32 -LRB097 05762 HLH 45827 b

1    For tax years ending after July 1, 1990 and prior to
2December 31, 2003, and beginning again for tax years ending on
3or after December 31, 2004, and ending prior to January 1,
42011, a taxpayer shall be allowed a credit against the tax
5imposed by subsections (a) and (b) of this Section for
6increasing research activities in this State. The credit
7allowed against the tax imposed by subsections (a) and (b)
8shall be equal to 6 1/2% of the qualifying expenditures for
9increasing research activities in this State. For partners,
10shareholders of subchapter S corporations, and owners of
11limited liability companies, if the liability company is
12treated as a partnership for purposes of federal and State
13income taxation, there shall be allowed a credit under this
14subsection to be determined in accordance with the
15determination of income and distributive share of income under
16Sections 702 and 704 and subchapter S of the Internal Revenue
17Code.
18    For purposes of this subsection, "qualifying expenditures"
19means the qualifying expenditures as defined for the federal
20credit for increasing research activities which would be
21allowable under Section 41 of the Internal Revenue Code and
22which are conducted in this State, "qualifying expenditures for
23increasing research activities in this State" means the excess
24of qualifying expenditures for the taxable year in which
25incurred over qualifying expenditures for the base period,
26"qualifying expenditures for the base period" means the average

 

 

SB0004 Enrolled- 33 -LRB097 05762 HLH 45827 b

1of the qualifying expenditures for each year in the base
2period, and "base period" means the 3 taxable years immediately
3preceding the taxable year for which the determination is being
4made.
5    Any credit in excess of the tax liability for the taxable
6year may be carried forward. A taxpayer may elect to have the
7unused credit shown on its final completed return carried over
8as a credit against the tax liability for the following 5
9taxable years or until it has been fully used, whichever occurs
10first; provided that no credit earned in a tax year ending
11prior to December 31, 2003 may be carried forward to any year
12ending on or after December 31, 2003, and no credit may be
13carried forward to any taxable year ending on or after January
141, 2011.
15    If an unused credit is carried forward to a given year from
162 or more earlier years, that credit arising in the earliest
17year will be applied first against the tax liability for the
18given year. If a tax liability for the given year still
19remains, the credit from the next earliest year will then be
20applied, and so on, until all credits have been used or no tax
21liability for the given year remains. Any remaining unused
22credit or credits then will be carried forward to the next
23following year in which a tax liability is incurred, except
24that no credit can be carried forward to a year which is more
25than 5 years after the year in which the expense for which the
26credit is given was incurred.

 

 

SB0004 Enrolled- 34 -LRB097 05762 HLH 45827 b

1    No inference shall be drawn from this amendatory Act of the
291st General Assembly in construing this Section for taxable
3years beginning before January 1, 1999.
4    (l) Environmental Remediation Tax Credit.
5        (i) For tax years ending after December 31, 1997 and on
6    or before December 31, 2001, a taxpayer shall be allowed a
7    credit against the tax imposed by subsections (a) and (b)
8    of this Section for certain amounts paid for unreimbursed
9    eligible remediation costs, as specified in this
10    subsection. For purposes of this Section, "unreimbursed
11    eligible remediation costs" means costs approved by the
12    Illinois Environmental Protection Agency ("Agency") under
13    Section 58.14 of the Environmental Protection Act that were
14    paid in performing environmental remediation at a site for
15    which a No Further Remediation Letter was issued by the
16    Agency and recorded under Section 58.10 of the
17    Environmental Protection Act. The credit must be claimed
18    for the taxable year in which Agency approval of the
19    eligible remediation costs is granted. The credit is not
20    available to any taxpayer if the taxpayer or any related
21    party caused or contributed to, in any material respect, a
22    release of regulated substances on, in, or under the site
23    that was identified and addressed by the remedial action
24    pursuant to the Site Remediation Program of the
25    Environmental Protection Act. After the Pollution Control
26    Board rules are adopted pursuant to the Illinois

 

 

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1    Administrative Procedure Act for the administration and
2    enforcement of Section 58.9 of the Environmental
3    Protection Act, determinations as to credit availability
4    for purposes of this Section shall be made consistent with
5    those rules. For purposes of this Section, "taxpayer"
6    includes a person whose tax attributes the taxpayer has
7    succeeded to under Section 381 of the Internal Revenue Code
8    and "related party" includes the persons disallowed a
9    deduction for losses by paragraphs (b), (c), and (f)(1) of
10    Section 267 of the Internal Revenue Code by virtue of being
11    a related taxpayer, as well as any of its partners. The
12    credit allowed against the tax imposed by subsections (a)
13    and (b) shall be equal to 25% of the unreimbursed eligible
14    remediation costs in excess of $100,000 per site, except
15    that the $100,000 threshold shall not apply to any site
16    contained in an enterprise zone as determined by the
17    Department of Commerce and Community Affairs (now
18    Department of Commerce and Economic Opportunity). The
19    total credit allowed shall not exceed $40,000 per year with
20    a maximum total of $150,000 per site. For partners and
21    shareholders of subchapter S corporations, there shall be
22    allowed a credit under this subsection to be determined in
23    accordance with the determination of income and
24    distributive share of income under Sections 702 and 704 and
25    subchapter S of the Internal Revenue Code.
26        (ii) A credit allowed under this subsection that is

 

 

SB0004 Enrolled- 36 -LRB097 05762 HLH 45827 b

1    unused in the year the credit is earned may be carried
2    forward to each of the 5 taxable years following the year
3    for which the credit is first earned until it is used. The
4    term "unused credit" does not include any amounts of
5    unreimbursed eligible remediation costs in excess of the
6    maximum credit per site authorized under paragraph (i).
7    This credit shall be applied first to the earliest year for
8    which there is a liability. If there is a credit under this
9    subsection from more than one tax year that is available to
10    offset a liability, the earliest credit arising under this
11    subsection shall be applied first. A credit allowed under
12    this subsection may be sold to a buyer as part of a sale of
13    all or part of the remediation site for which the credit
14    was granted. The purchaser of a remediation site and the
15    tax credit shall succeed to the unused credit and remaining
16    carry-forward period of the seller. To perfect the
17    transfer, the assignor shall record the transfer in the
18    chain of title for the site and provide written notice to
19    the Director of the Illinois Department of Revenue of the
20    assignor's intent to sell the remediation site and the
21    amount of the tax credit to be transferred as a portion of
22    the sale. In no event may a credit be transferred to any
23    taxpayer if the taxpayer or a related party would not be
24    eligible under the provisions of subsection (i).
25        (iii) For purposes of this Section, the term "site"
26    shall have the same meaning as under Section 58.2 of the

 

 

SB0004 Enrolled- 37 -LRB097 05762 HLH 45827 b

1    Environmental Protection Act.
2    (m) Education expense credit. Beginning with tax years
3ending after December 31, 1999, a taxpayer who is the custodian
4of one or more qualifying pupils shall be allowed a credit
5against the tax imposed by subsections (a) and (b) of this
6Section for qualified education expenses incurred on behalf of
7the qualifying pupils. The credit shall be equal to 25% of
8qualified education expenses, but in no event may the total
9credit under this subsection claimed by a family that is the
10custodian of qualifying pupils exceed $500. In no event shall a
11credit under this subsection reduce the taxpayer's liability
12under this Act to less than zero. This subsection is exempt
13from the provisions of Section 250 of this Act.
14    For purposes of this subsection:
15    "Qualifying pupils" means individuals who (i) are
16residents of the State of Illinois, (ii) are under the age of
1721 at the close of the school year for which a credit is
18sought, and (iii) during the school year for which a credit is
19sought were full-time pupils enrolled in a kindergarten through
20twelfth grade education program at any school, as defined in
21this subsection.
22    "Qualified education expense" means the amount incurred on
23behalf of a qualifying pupil in excess of $250 for tuition,
24book fees, and lab fees at the school in which the pupil is
25enrolled during the regular school year.
26    "School" means any public or nonpublic elementary or

 

 

SB0004 Enrolled- 38 -LRB097 05762 HLH 45827 b

1secondary school in Illinois that is in compliance with Title
2VI of the Civil Rights Act of 1964 and attendance at which
3satisfies the requirements of Section 26-1 of the School Code,
4except that nothing shall be construed to require a child to
5attend any particular public or nonpublic school to qualify for
6the credit under this Section.
7    "Custodian" means, with respect to qualifying pupils, an
8Illinois resident who is a parent, the parents, a legal
9guardian, or the legal guardians of the qualifying pupils.
10    (n) River Edge Redevelopment Zone site remediation tax
11credit.
12        (i) For tax years ending on or after December 31, 2006,
13    a taxpayer shall be allowed a credit against the tax
14    imposed by subsections (a) and (b) of this Section for
15    certain amounts paid for unreimbursed eligible remediation
16    costs, as specified in this subsection. For purposes of
17    this Section, "unreimbursed eligible remediation costs"
18    means costs approved by the Illinois Environmental
19    Protection Agency ("Agency") under Section 58.14a of the
20    Environmental Protection Act that were paid in performing
21    environmental remediation at a site within a River Edge
22    Redevelopment Zone for which a No Further Remediation
23    Letter was issued by the Agency and recorded under Section
24    58.10 of the Environmental Protection Act. The credit must
25    be claimed for the taxable year in which Agency approval of
26    the eligible remediation costs is granted. The credit is

 

 

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1    not available to any taxpayer if the taxpayer or any
2    related party caused or contributed to, in any material
3    respect, a release of regulated substances on, in, or under
4    the site that was identified and addressed by the remedial
5    action pursuant to the Site Remediation Program of the
6    Environmental Protection Act. Determinations as to credit
7    availability for purposes of this Section shall be made
8    consistent with rules adopted by the Pollution Control
9    Board pursuant to the Illinois Administrative Procedure
10    Act for the administration and enforcement of Section 58.9
11    of the Environmental Protection Act. For purposes of this
12    Section, "taxpayer" includes a person whose tax attributes
13    the taxpayer has succeeded to under Section 381 of the
14    Internal Revenue Code and "related party" includes the
15    persons disallowed a deduction for losses by paragraphs
16    (b), (c), and (f)(1) of Section 267 of the Internal Revenue
17    Code by virtue of being a related taxpayer, as well as any
18    of its partners. The credit allowed against the tax imposed
19    by subsections (a) and (b) shall be equal to 25% of the
20    unreimbursed eligible remediation costs in excess of
21    $100,000 per site.
22        (ii) A credit allowed under this subsection that is
23    unused in the year the credit is earned may be carried
24    forward to each of the 5 taxable years following the year
25    for which the credit is first earned until it is used. This
26    credit shall be applied first to the earliest year for

 

 

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1    which there is a liability. If there is a credit under this
2    subsection from more than one tax year that is available to
3    offset a liability, the earliest credit arising under this
4    subsection shall be applied first. A credit allowed under
5    this subsection may be sold to a buyer as part of a sale of
6    all or part of the remediation site for which the credit
7    was granted. The purchaser of a remediation site and the
8    tax credit shall succeed to the unused credit and remaining
9    carry-forward period of the seller. To perfect the
10    transfer, the assignor shall record the transfer in the
11    chain of title for the site and provide written notice to
12    the Director of the Illinois Department of Revenue of the
13    assignor's intent to sell the remediation site and the
14    amount of the tax credit to be transferred as a portion of
15    the sale. In no event may a credit be transferred to any
16    taxpayer if the taxpayer or a related party would not be
17    eligible under the provisions of subsection (i).
18        (iii) For purposes of this Section, the term "site"
19    shall have the same meaning as under Section 58.2 of the
20    Environmental Protection Act.
21        (iv) This subsection is exempt from the provisions of
22    Section 250.
23(Source: P.A. 95-454, eff. 8-27-07; 96-115, eff. 7-31-09;
2496-116, eff. 7-31-09; 96-937, eff. 6-23-10; 96-1000, eff.
257-2-10; 96-1496, eff. 1-13-11.)
 

 

 

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1    Section 15. The Economic Development for a Growing Economy
2Tax Credit Act is amended by changing Sections 5-15 and 5-50
3and by adding Section 5-77 as follows:
 
4    (35 ILCS 10/5-15)
5    Sec. 5-15. Tax Credit Awards. Subject to the conditions set
6forth in this Act, a Taxpayer is entitled to a Credit against
7or, as described in subsection (g) of this Section, a payment
8towards taxes imposed pursuant to subsections (a) and (b) of
9Section 201 of the Illinois Income Tax Act that may be imposed
10on the Taxpayer for a taxable year beginning on or after
11January 1, 1999, if the Taxpayer is awarded a Credit by the
12Department under this Act for that taxable year.
13    (a) The Department shall make Credit awards under this Act
14to foster job creation and retention in Illinois.
15    (b) A person that proposes a project to create new jobs in
16Illinois must enter into an Agreement with the Department for
17the Credit under this Act.
18    (c) The Credit shall be claimed for the taxable years
19specified in the Agreement.
20    (d) The Credit shall not exceed the Incremental Income Tax
21attributable to the project that is the subject of the
22Agreement.
23    (e) Nothing herein shall prohibit a Tax Credit Award to an
24Applicant that uses a PEO if all other award criteria are
25satisfied.

 

 

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1    (f) In lieu of the Credit allowed under this Act against
2the taxes imposed pursuant to subsections (a) and (b) of
3Section 201 of the Illinois Income Tax Act for any taxable year
4ending on or after December 31, 2009, the Taxpayer may elect to
5claim the Credit against its obligation to pay over withholding
6under Section 704A of the Illinois Income Tax Act.
7        (1) The election under this subsection (f) may be made
8    only by a Taxpayer that (i) is primarily engaged in one of
9    the following business activities: water purification and
10    treatment, motor vehicle metal stamping, automobile
11    manufacturing, automobile and light duty motor vehicle
12    manufacturing, motor vehicle manufacturing, light truck
13    and utility vehicle manufacturing, heavy duty truck
14    manufacturing, or motor vehicle body manufacturing, cable
15    television infrastructure design or manufacturing, or
16    wireless telecommunication or computing terminal device
17    design or manufacturing for use on public networks and (ii)
18    meets the following criteria:
19            (A) the Taxpayer (i) had an Illinois net loss or an
20        Illinois net loss deduction under Section 207 of the
21        Illinois Income Tax Act for the taxable year in which
22        the Credit is awarded, (ii) employed a minimum of 1,000
23        full-time employees in this State during the taxable
24        year in which the Credit is awarded, (iii) has an
25        Agreement under this Act on December 14, 2009 (the
26        effective date of Public Act 96-834), and (iv) is in

 

 

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

 

 

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1        that would have been at risk of relocation out of
2        Illinois over a 10-year period, and (v) makes a capital
3        investment of at least $57,000,000; or .
4            (E) the Taxpayer (i) employed at least 2,500
5        full-time employees in the State during the year in
6        which the Credit is awarded, (ii) commits to make at
7        least $500,000,000 in combined capital improvements
8        and project costs under the Agreement, (iii) applies
9        for an Agreement between January 1, 2011 and June 30,
10        2011, (iv) executes an Agreement for the Credit during
11        calendar year 2011, and (v) was incorporated no more
12        than 5 years before the filing of an application for an
13        Agreement.
14        (1.5) The election under this subsection (f) may also
15    be made by a Taxpayer for any Credit awarded pursuant to an
16    agreement that was executed between January 1, 2011 and
17    June 30, 2011, if the Taxpayer (i) is primarily engaged in
18    the manufacture of inner tubes or tires, or both, from
19    natural and synthetic rubber, (ii) employs a minimum of
20    2,400 full-time employees in Illinois at the time of
21    application, (iii) creates at least 350 full-time jobs and
22    retains at least 250 full-time jobs in Illinois that would
23    have been at risk of being created or retained outside of
24    Illinois, and (iv) makes a capital investment of at least
25    $200,000,000 at the project location.
26        (2) An election under this subsection shall allow the

 

 

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1    credit to be taken against payments otherwise due under
2    Section 704A of the Illinois Income Tax Act during the
3    first calendar year beginning after the end of the taxable
4    year in which the credit is awarded under this Act.
5        (3) The election shall be made in the form and manner
6    required by the Illinois Department of Revenue and, once
7    made, shall be irrevocable.
8        (4) If a Taxpayer who meets the requirements of
9    subparagraph (A) of paragraph (1) of this subsection (f)
10    elects to claim the Credit against its withholdings as
11    provided in this subsection (f), then, on and after the
12    date of the election, the terms of the Agreement between
13    the Taxpayer and the Department may not be further amended
14    during the term of the Agreement.
15    (g) A pass-through entity that has been awarded a credit
16under this Act, its shareholders, or its partners may treat
17some or all of the credit awarded pursuant to this Act as a tax
18payment for purposes of the Illinois Income Tax Act. The term
19"tax payment" means a payment as described in Article 6 or
20Article 8 of the Illinois Income Tax Act or a composite payment
21made by a pass-through entity on behalf of any of its
22shareholders or partners to satisfy such shareholders' or
23partners' taxes imposed pursuant to subsections (a) and (b) of
24Section 201 of the Illinois Income Tax Act. In no event shall
25the amount of the award credited pursuant to this Act exceed
26the Illinois income tax liability of the pass-through entity or

 

 

SB0004 Enrolled- 46 -LRB097 05762 HLH 45827 b

1its shareholders or partners for the taxable year.
2(Source: P.A. 95-375, eff. 8-23-07; 96-834, eff. 12-14-09;
396-836, eff. 12-16-09; 96-905, eff. 6-4-10; 96-1000, eff.
47-2-10; 96-1534, eff. 3-4-11.)
 
5    (35 ILCS 10/5-50)
6    Sec. 5-50. Contents of Agreements with Applicants. The
7Department shall enter into an Agreement with an Applicant that
8is awarded a Credit under this Act. The Agreement must include
9all of the following:
10        (1) A detailed description of the project that is the
11    subject of the Agreement, including the location and amount
12    of the investment and jobs created or retained.
13        (2) The duration of the Credit and the first taxable
14    year for which the Credit may be claimed.
15        (3) The Credit amount that will be allowed for each
16    taxable year.
17        (4) A requirement that the Taxpayer shall maintain
18    operations at the project location that shall be stated as
19    a minimum number of years not to exceed 10.
20        (5) A specific method for determining the number of New
21    Employees employed during a taxable year.
22        (6) A requirement that the Taxpayer shall annually
23    report to the Department the number of New Employees, the
24    Incremental Income Tax withheld in connection with the New
25    Employees, and any other information the Director needs to

 

 

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1    perform the Director's duties under this Act.
2        (7) A requirement that the Director is authorized to
3    verify with the appropriate State agencies the amounts
4    reported under paragraph (6), and after doing so shall
5    issue a certificate to the Taxpayer stating that the
6    amounts have been verified.
7        (8) A requirement that the Taxpayer shall provide
8    written notification to the Director not more than 30 days
9    after the Taxpayer makes or receives a proposal that would
10    transfer the Taxpayer's State tax liability obligations to
11    a successor Taxpayer.
12        (9) A detailed description of the number of New
13    Employees to be hired, and the occupation and payroll of
14    the full-time jobs to be created or retained as a result of
15    the project.
16        (10) The minimum investment the business enterprise
17    will make in capital improvements, the time period for
18    placing the property in service, and the designated
19    location in Illinois for the investment.
20        (11) A requirement that the Taxpayer shall provide
21    written notification to the Director and the Committee not
22    more than 30 days after the Taxpayer determines that the
23    minimum job creation or retention, employment payroll, or
24    investment no longer is being or will be achieved or
25    maintained as set forth in the terms and conditions of the
26    Agreement.

 

 

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1        (12) A provision that, if the total number of New
2    Employees falls below a specified level, the allowance of
3    Credit shall be suspended until the number of New Employees
4    equals or exceeds the Agreement amount.
5        (13) A detailed description of the items for which the
6    costs incurred by the Taxpayer will be included in the
7    limitation on the Credit provided in Section 5-30.
8        (13.5) A provision that, if the Taxpayer never meets
9    either the investment or job creation and retention
10    requirements specified in the Agreement during the entire
11    5-year period beginning on the first day of the first
12    taxable year in which the Agreement is executed and ending
13    on the last day of the fifth taxable year after the
14    Agreement is executed, then the Agreement is automatically
15    terminated on the last day of the fifth taxable year after
16    the Agreement is executed and the Taxpayer is not entitled
17    to the award of any credits for any of that 5-year period.
18        (14) Any other performance conditions or contract
19    provisions as the Department determines are appropriate.
20(Source: P.A. 91-476, eff. 8-11-99.)
 
21    (35 ILCS 10/5-77 new)
22    Sec. 5-77. Sunset of new Agreements. The Department shall
23not enter into any new Agreements under the provisions of
24Section 5-50 of this Act after December 31, 2016.
 

 

 

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1    Section 20. The Film Production Services Tax Credit Act of
22008 is amended by adding Section 42 as follows:
 
3    (35 ILCS 16/42 new)
4    Sec. 42. Sunset of credits. The application of credits
5awarded pursuant to this Act shall be limited by a reasonable
6and appropriate sunset date. A taxpayer shall not be entitled
7to take a credit awarded pursuant to this Act for tax years
8beginning on or after 5 years after the effective date of this
9amendatory Act of the 97th General Assembly.
 
10    Section 99. Effective date. This Act takes effect upon
11becoming law.