Full Text of SB2141 101st General Assembly
SB2141 101ST GENERAL ASSEMBLY |
| | 101ST GENERAL ASSEMBLY
State of Illinois
2019 and 2020 SB2141 Introduced 2/15/2019, by Sen. Ram Villivalam SYNOPSIS AS INTRODUCED: |
| 35 ILCS 25/10 | | 35 ILCS 25/25 | | 35 ILCS 25/35 | |
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Amends the Small Business Job Creation Tax Credit Act. Provides that the Act applies for a second set of incentive periods beginning on July 1, 2019. Provides that certain provisions concerning employees who had participated as worker-trainees in the Put Illinois to Work Program during 2010 do not apply to the second set of incentive periods. Effective immediately.
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| | | FISCAL NOTE ACT MAY APPLY | |
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| 1 | | AN ACT concerning revenue.
| 2 | | Be it enacted by the People of the State of Illinois,
| 3 | | represented in the General Assembly:
| 4 | | Section 5. The Small Business Job Creation Tax Credit Act | 5 | | is amended by changing Sections 10, 25, and 35 as follows: | 6 | | (35 ILCS 25/10)
| 7 | | Sec. 10. Definitions. In this Act: | 8 | | "Applicant" means a person that is operating a business | 9 | | located within the State of Illinois that is engaged in | 10 | | interstate or intrastate commerce and has fewer than 50 | 11 | | full-time employees, without regard to the location of | 12 | | employment of such employees at the beginning of the incentive | 13 | | period. either: | 14 | | (1) has no more than 50 full-time employees, without | 15 | | regard to the location of employment of such employees at | 16 | | the beginning of the incentive period; or | 17 | | (2) hired within the incentive period an employee who | 18 | | had participated as worker-trainee in the Put Illinois to | 19 | | Work Program during 2010. | 20 | | In the case of any person that is a member of a unitary | 21 | | business group within the meaning of subdivision (a)(27) of | 22 | | Section 1501 of the Illinois Income Tax Act, "applicant" refers | 23 | | to the unitary business group. |
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| 1 | | "Certificate" means the tax credit certificate issued by | 2 | | the Department under Section 35 of this Act. | 3 | | "Certificate of eligibility" means the certificate issued | 4 | | by the Department under Section 20 of this Act. | 5 | | "Credit" means the amount awarded by the Department to an | 6 | | applicant by issuance of a certificate under Section 35 of this | 7 | | Act for each new full-time equivalent employee hired or job | 8 | | created. | 9 | | "Department" means the Department of Commerce and Economic | 10 | | Opportunity. | 11 | | "Director" means the Director of the Department. | 12 | | "Full-time employee" means an individual who is employed | 13 | | for a basic wage for at least 35 hours each week or who renders | 14 | | any other standard of service generally accepted by industry | 15 | | custom or practice as full-time employment. An individual for | 16 | | whom a W-2 is issued by a Professional Employer Organization is | 17 | | a full-time employee if he or she is employed in the service of | 18 | | the applicant for a basic wage for at least 35 hours each week | 19 | | or renders any other standard of service generally accepted by | 20 | | industry custom or practice as full-time employment. For the | 21 | | purposes of this Act, such an individual shall be considered a | 22 | | full-time employee of the applicant. | 23 | | "Professional Employer Organization" (PEO) shall have the | 24 | | same meaning as defined in Section 5-5 of the Economic | 25 | | Development for a Growing Economy Tax Credit Act. As used in | 26 | | this Section, "Professional Employer Organization" does not |
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| 1 | | include a day and temporary labor service agency regulated | 2 | | under the Day and Temporary Labor Services Act. | 3 | | "Incentive period" means the period beginning on July 1 and | 4 | | ending on June 30 of the following year. The first set of | 5 | | incentive periods period shall begin on July 1, 2010 and the | 6 | | last incentive period shall end on June 30, 2016. The second | 7 | | set of incentive periods shall begin on July 1, 2019. | 8 | | "Basic wage" means compensation for employment that is no | 9 | | less than $10 per hour or the equivalent salary for a new | 10 | | employee. | 11 | | "New employee" means a full-time employee who first became | 12 | | employed by an applicant with fewer than 50 full-time employees | 13 | | within the incentive period, whose hire results in a net | 14 | | increase in the applicant's number of full-time Illinois | 15 | | employees, and who is receiving a basic wage as compensation. : | 16 | | (1) who first became employed by an applicant with less | 17 | | than 50 full-time employees within the incentive period | 18 | | whose hire results in a net increase in the applicant's | 19 | | full-time Illinois employees and who is receiving a basic | 20 | | wage as compensation; or | 21 | | (2) who participated as a worker-trainee in the Put | 22 | | Illinois to Work Program during 2010 and who is | 23 | | subsequently hired during the incentive period by an | 24 | | applicant and who is receiving a basic wage as | 25 | | compensation. | 26 | | The term "new employee" does not include: |
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| 1 | | (1) a person who was previously employed in Illinois by | 2 | | the applicant or a related member prior to the onset of the | 3 | | incentive period; or | 4 | | (2) any individual who has a direct or indirect | 5 | | ownership interest of at least 5% in the profits, capital, | 6 | | or value of the applicant or a related member. | 7 | | "Noncompliance date" means, in the case of an applicant | 8 | | that is not complying with the requirements of the provisions | 9 | | of this Act, the day following the last date upon which the | 10 | | taxpayer was in compliance with the requirements of the | 11 | | provisions of this Act, as determined by the Director, pursuant | 12 | | to Section 45 of this Act. | 13 | | "Put Illinois to Work Program" means a worker training and | 14 | | employment program that was established by the State of | 15 | | Illinois with funding from the United States Department of | 16 | | Health and Human Services of Emergency Temporary Assistance for | 17 | | Needy Families funds authorized by the American Recovery and | 18 | | Reinvestment Act of 2009 (ARRA TANF Funds). These ARRA TANF | 19 | | funds were in turn used by the State of Illinois to fund the | 20 | | Put Illinois to Work Program. | 21 | | "Related member" means a person that, with respect to the | 22 | | applicant during any portion of the incentive period, is any | 23 | | one of the following, | 24 | | (1) An individual, if the individual and the members of | 25 | | the individual's family (as defined in Section 318 of the | 26 | | Internal Revenue Code) own directly, indirectly, |
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| 1 | | beneficially, or constructively, in the aggregate, at | 2 | | least 50% of the value of the outstanding profits, capital, | 3 | | stock, or other ownership interest in the applicant. | 4 | | (2) A partnership, estate, or trust and any partner or | 5 | | beneficiary, if the partnership, estate, or trust and its | 6 | | partners or beneficiaries own directly, indirectly, | 7 | | beneficially, or constructively, in the aggregate, at | 8 | | least 50% of the profits, capital, stock, or other | 9 | | ownership interest in the applicant. | 10 | | (3) A corporation, and any party related to the | 11 | | corporation in a manner that would require an attribution | 12 | | of stock from the corporation under the attribution rules | 13 | | of Section 318 of the Internal Revenue Code, if the | 14 | | applicant and any other related member own, in the | 15 | | aggregate, directly, indirectly, beneficially, or | 16 | | constructively, at least 50% of the value of the | 17 | | corporation's outstanding stock. | 18 | | (4) A corporation and any party related to that | 19 | | corporation in a manner that would require an attribution | 20 | | of stock from the corporation to the party or from the | 21 | | party to the corporation under the attribution rules of | 22 | | Section 318 of the Internal Revenue Code, if the | 23 | | corporation and all such related parties own, in the | 24 | | aggregate, at least 50% of the profits, capital, stock, or | 25 | | other ownership interest in the applicant. | 26 | | (5) A person to or from whom there is attribution of |
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| 1 | | stock ownership in accordance with Section 1563(e) of the | 2 | | Internal Revenue Code, except that for purposes of | 3 | | determining whether a person is a related member under this | 4 | | paragraph, "20%" shall be substituted for "5%" whenever | 5 | | "5%" appears in Section 1563(e) of the Internal Revenue | 6 | | Code.
| 7 | | (Source: P.A. 100-863, eff. 8-14-18.) | 8 | | (35 ILCS 25/25)
| 9 | | Sec. 25. Tax credit. | 10 | | (a) Subject to the conditions set forth in this Act, an | 11 | | applicant is entitled to a credit against payment of taxes | 12 | | withheld under Section 704A of the Illinois Income Tax Act in | 13 | | the first calendar year ending on or after the date that is 12 | 14 | | months after the date of hire of a new employee. The credit | 15 | | shall be allowed as a credit to an applicant for each full-time | 16 | | employee hired during the incentive period that results in a | 17 | | net increase in full-time Illinois employees, if the net | 18 | | increase in the employer's full-time Illinois employees is | 19 | | maintained for at least 12 months. : | 20 | | (1) for new employees who participated as | 21 | | worker-trainees in the Put Illinois to Work Program during | 22 | | 2010: | 23 | | (A) in the first calendar year ending on or after | 24 | | the date that is 6 months after December 31, 2010, or | 25 | | the date of hire, whichever is later. Under this |
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| 1 | | subparagraph, the applicant is entitled to one-half of | 2 | | the credit allowable for each new employee who is | 3 | | employed for at least 6 months after the date of hire; | 4 | | and | 5 | | (B) in the first calendar year ending on or after | 6 | | the date that is 12 months after December 31, 2010, or | 7 | | the date of hire, whichever is later. Under this | 8 | | subparagraph, the applicant is entitled to one-half of | 9 | | the credit allowable for each new employee who is | 10 | | employed for at least 12 months after the date of hire; | 11 | | (2) for all other new employees, in the first calendar | 12 | | year ending on or after the date that is 12 months after | 13 | | the date of hire of a new employee. The credit shall be | 14 | | allowed as a credit to an applicant for each full-time | 15 | | employee hired during the incentive period that results in | 16 | | a net increase in full-time Illinois employees, where the | 17 | | net increase in the employer's full-time Illinois | 18 | | employees is maintained for at least 12 months. | 19 | | (b) The Department shall make credit awards under this Act | 20 | | to further job creation. | 21 | | (c) The credit shall be claimed for the first calendar year | 22 | | ending on or after the date on which the certificate is issued | 23 | | by the Department. | 24 | | (d) The credit shall not exceed $2,500 per new employee | 25 | | hired. | 26 | | (e) The net increase in full-time Illinois employees, |
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| 1 | | measured on an annual full-time equivalent basis, shall be the | 2 | | total number of full-time Illinois employees of the applicant | 3 | | on the final day of the incentive period, minus the number of | 4 | | full-time Illinois employees employed by the employer on the | 5 | | first day of that same incentive period. For purposes of the | 6 | | calculation, an employer that begins doing business in this | 7 | | State during the incentive period, as determined by the | 8 | | Director, shall be treated as having zero Illinois employees on | 9 | | the first day of the incentive period. | 10 | | (f) The net increase in the number of full-time Illinois | 11 | | employees of the applicant under subsection (e) must be | 12 | | sustained continuously for at least 12 months, starting with | 13 | | the date of hire of a new employee during the incentive period. | 14 | | Eligibility for the credit does not depend on the continuous | 15 | | employment of any particular individual. For purposes of this | 16 | | subsection (f), if a new employee ceases to be employed before | 17 | | the completion of the 12-month period for any reason, the net | 18 | | increase in the number of full-time Illinois employees shall be | 19 | | treated as continuous if a different new employee is hired as a | 20 | | replacement within a reasonable time for the same position.
| 21 | | (g) The Department shall promulgate rules to enable an | 22 | | applicant for which a PEO has been contracted to issue W-2s and | 23 | | make payment of taxes withheld under Section 704A of the | 24 | | Illinois Income Tax Act for new employees to retain the benefit | 25 | | of tax credits to which the applicant is otherwise entitled | 26 | | under this Act. |
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| 1 | | (h) The credit under this Act is exempt from the provisions | 2 | | of Section 250 of the Illinois Income Tax Act. | 3 | | (Source: P.A. 96-888, eff. 4-13-10; 96-1498, eff. 1-18-11; | 4 | | 97-636, eff. 6-1-12; 97-1052, eff. 8-23-12.) | 5 | | (35 ILCS 25/35)
| 6 | | Sec. 35. Application for award of tax credit; tax credit | 7 | | certificate. | 8 | | (a) On or after the conclusion of the 12-month period (or | 9 | | 6-month period, for purposes of subparagraph (A) of item (1) of | 10 | | subsection (a) of Section 25) after a new employee has been | 11 | | hired, an applicant shall file with the Department an | 12 | | application for award of a credit. The application shall | 13 | | include the following: | 14 | | (1) The names, Social Security numbers, job | 15 | | descriptions, salary or wage rates, and dates of hire of | 16 | | the new employees with respect to whom the credit is being | 17 | | requested , and an indication of whether each new employee | 18 | | listed participated as a worker-trainee in the Put Illinois | 19 | | to Work Program . | 20 | | (2) A certification that each new employee listed has | 21 | | been retained on the job for one year (or 6 months, for | 22 | | purposes of subparagraph (A) of item (1) of subsection (a) | 23 | | of Section 25) from the date of hire. | 24 | | (3) The number of new employees hired by the applicant | 25 | | during the incentive period. |
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| 1 | | (4) The net increase in the number of full-time | 2 | | Illinois employees of the applicant (including the new | 3 | | employees listed in the request) between the beginning of | 4 | | the incentive period and the dates on which the new | 5 | | employees listed in the request were hired. This | 6 | | requirement does not apply for tax credits the applicant is | 7 | | seeking because the new employee had participated as a | 8 | | worker-trainee in the Put Illinois to Work Program. | 9 | | (5) An agreement that the Director is authorized to | 10 | | verify with the appropriate State agencies the information | 11 | | contained in the request before issuing a certificate to | 12 | | the applicant. | 13 | | (6) Any other information the Department determines to | 14 | | be appropriate. | 15 | | (b) Although an application may be filed at any time after | 16 | | the conclusion of the 12-month period (or 6-month period, for | 17 | | purposes of subparagraph (A) of item (1) of subsection (a) of | 18 | | Section 25) after a new employee was hired, an application | 19 | | filed more than 90 days after the earliest date on which it | 20 | | could have been filed shall not be awarded any credit if, prior | 21 | | to the date it is filed, the Department has received | 22 | | applications under this Section for credits totaling more than | 23 | | $50,000,000. | 24 | | (c) The Department shall issue a certificate to each | 25 | | applicant awarded a credit under this Act. The certificate | 26 | | shall include the following: |
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| 1 | | (1) The name and taxpayer identification number of the | 2 | | applicant. | 3 | | (2) The date on which the certificate is issued. | 4 | | (3) The credit amount that will be allowed. | 5 | | (4) Any other information the Department determines to | 6 | | be appropriate.
| 7 | | (Source: P.A. 96-888, eff. 4-13-10; 96-1498, eff. 1-18-11.)
| 8 | | Section 99. Effective date. This Act takes effect upon | 9 | | becoming law.
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