Full Text of SB3194 100th General Assembly
SB3194 100TH GENERAL ASSEMBLY |
| | 100TH GENERAL ASSEMBLY
State of Illinois
2017 and 2018 SB3194 Introduced 2/15/2018, by Sen. Paul Schimpf SYNOPSIS AS INTRODUCED: | | |
Amends the Illinois Income Tax Act. Creates the Hire Illinois Tax Credit. Provides that a business is eligible for a $500 tax credit against its withholding tax liability for each recent graduate of a public university in the State who is hired by the taxpayer within the incentive period and retained by the taxpayer for 12 consecutive months. Provides that the $500 tax credit may be taken in both the year the qualified employee is hired and for each year of the next 4 years the qualified employee is retained by the taxpayer for 12 consecutive months. Provides 2 ways the taxpayer may take the $500 tax credit. Provides that the Department of Commerce and Economic Opportunity shall limit the monetary amount of these tax credits to $25,000,000. Provides for procedures for a business to apply for a certificate of eligibility for the credit and for procedures to apply for a tax credit certificate. Grants the Department of Commerce and Economic Opportunity the powers necessary or convenient to administer the tax credit. Effective immediately. |
| |
| | | FISCAL NOTE ACT MAY APPLY | |
| | A BILL FOR |
|
| | | SB3194 | | LRB100 18917 HLH 34163 b |
|
| 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 Illinois Income Tax Act is amended by adding | 5 | | Section 227 as follows: | 6 | | (35 ILCS 5/227 new) | 7 | | Sec. 227. Hire Illinois Tax Credit. | 8 | | (a) As used in this Section: | 9 | | "Applicant" means a corporation, partnership, limited | 10 | | liability company, or natural person that hires a qualified | 11 | | employee. | 12 | | "Basic wage" means compensation for employment that is no | 13 | | less than $10 per hour or the equivalent salary for a new | 14 | | employee. | 15 | | "Certificate of eligibility" means the certificate issued | 16 | | by the Department under subsection (c). | 17 | | "Credit" means the amount awarded by the Department to an | 18 | | applicant by issuance of a tax credit certificate. | 19 | | "Date of hire" means the first day on which the employee | 20 | | begins providing services for basic wage compensation. | 21 | | "Department" means the Department of Commerce and Economic | 22 | | Opportunity. | 23 | | "Director" means the Director of Commerce and Economic |
| | | SB3194 | - 2 - | LRB100 18917 HLH 34163 b |
|
| 1 | | Opportunity. | 2 | | "Full-time employee" means an individual who is employed | 3 | | for a basic wage for at least 35 hours each week or who renders | 4 | | any other standard of service generally accepted by industry | 5 | | custom or practice as full-time employment. | 6 | | "Incentive period" means the period beginning January 1, | 7 | | 2017 and ending December 31, 2018. | 8 | | "Noncompliance date" means, in the case of an applicant | 9 | | that is not complying with the requirements of the provisions | 10 | | of this Section, the day following the last date upon which the | 11 | | taxpayer was in compliance with the requirements of the | 12 | | provisions of this Section, as determined by the Director. | 13 | | "Qualified employee" means a full-time employee who (i) is | 14 | | hired by the applicant during the incentive period and (ii) | 15 | | graduated from a public university in the State within a year | 16 | | prior to being hired by the applicant. "Qualified employee" | 17 | | does not include: | 18 | | (1) a person who was previously employed by the | 19 | | applicant or a related member prior to the onset of the | 20 | | incentive period; or | 21 | | (2) any individual who has a direct or indirect | 22 | | ownership interest of at least 5% in the profits, capital, | 23 | | or value of the applicant or a related member. | 24 | | "Related member" means a person that, with respect to the | 25 | | applicant during any portion of the incentive period, is any | 26 | | one of the following: |
| | | SB3194 | - 3 - | LRB100 18917 HLH 34163 b |
|
| 1 | | (1) An individual, if the individual and the members
of | 2 | | the individual's family (as defined in Section 318 of the | 3 | | Internal Revenue Code) own directly, indirectly, | 4 | | beneficially, or constructively, in the aggregate, at | 5 | | least 50% of the value of the outstanding profits, capital, | 6 | | stock, or other ownership interest in the applicant. | 7 | | (2) A partnership, estate, or trust and any partner
or | 8 | | beneficiary, if the partnership, estate, or trust and its | 9 | | partners or beneficiaries own directly, indirectly, | 10 | | beneficially, or constructively, in the aggregate, at | 11 | | least 50% of the profits, capital, stock, or other | 12 | | ownership interest in the applicant. | 13 | | (3) A corporation, and any party related to the
| 14 | | corporation in a manner that would require an attribution | 15 | | of stock from the corporation under the attribution rules | 16 | | of Section 318 of the Internal Revenue Code, if the | 17 | | applicant and any other related member own, in the | 18 | | aggregate, directly, indirectly, beneficially, or | 19 | | constructively, at least 50% of the value of the | 20 | | corporation's outstanding stock. | 21 | | (4) A corporation and any party related to that
| 22 | | corporation in a manner that would require an attribution | 23 | | of stock from the corporation to the party or from the | 24 | | party to the corporation under the attribution rules of | 25 | | Section 318 of the Internal Revenue Code, if the | 26 | | corporation and all such related parties own, in the |
| | | SB3194 | - 4 - | LRB100 18917 HLH 34163 b |
|
| 1 | | aggregate, at least 50% of the profits, capital, stock, or | 2 | | other ownership interest in the applicant. | 3 | | (5) A person to or from whom there is attribution of
| 4 | | stock ownership in accordance with Section 1563(e) of the | 5 | | Internal Revenue Code, except that for purposes of | 6 | | determining whether a person is a related member under this | 7 | | paragraph, "20%" shall be substituted for "5%" whenever | 8 | | "5%" appears in Section 1563(e) of the Internal Revenue | 9 | | Code. | 10 | | "Tax credit certificate" means the tax credit certificate | 11 | | issued by the Department under subsection (d). | 12 | | (b) The Department, in addition to those powers granted | 13 | | under the Civil Administrative Code of Illinois, is granted and | 14 | | shall have all the powers necessary or convenient to carry out | 15 | | and effectuate the purposes and provisions of this Section, | 16 | | including, but not limited to, the power and authority to do | 17 | | all of the following: | 18 | | (1) Adopt rules
deemed necessary and appropriate for | 19 | | the administration of this Section; establish forms for | 20 | | applications, notifications, contracts, or any other | 21 | | agreements; and accept applications at any time during the | 22 | | year and require that all applications be submitted via the | 23 | | Internet. The Department shall require that applications | 24 | | be submitted in electronic form. | 25 | | (2) Provide guidance and assistance to applicants
| 26 | | pursuant to the provisions of this Section, and cooperate |
| | | SB3194 | - 5 - | LRB100 18917 HLH 34163 b |
|
| 1 | | with applicants to promote, foster, and support job | 2 | | creation within the State. | 3 | | (3) Enter into agreements and memoranda of
| 4 | | understanding for participation of and engage in | 5 | | cooperation with agencies of the federal government, units | 6 | | of local government, universities, research foundations or | 7 | | institutions, regional economic development corporations, | 8 | | or other organizations for the purposes of this Section. | 9 | | (4) Gather information and conduct inquiries, in the
| 10 | | manner and by the methods it deems desirable, including, | 11 | | without limitation, gathering information with respect to | 12 | | applicants for the purpose of making any designations or | 13 | | certifications necessary or desirable or to gather | 14 | | information in furtherance of the purposes of this Section. | 15 | | (5) Establish, negotiate, and effectuate any term,
| 16 | | agreement, or other document with any person necessary or | 17 | | appropriate to accomplish the purposes of this Section and | 18 | | consent, subject to the provisions of any agreement with | 19 | | another party, to the modification or restructuring of any | 20 | | agreement to which the Department is a party. | 21 | | (6) Provide for sufficient personnel to permit
| 22 | | administration, staffing, operation, and related support | 23 | | required to adequately discharge its duties and | 24 | | responsibilities described in this Section from funds made | 25 | | available through charges to applicants or from funds as | 26 | | may be appropriated by the General Assembly for the |
| | | SB3194 | - 6 - | LRB100 18917 HLH 34163 b |
|
| 1 | | administration of this Section. | 2 | | (7) Require applicants, upon written request, to
issue | 3 | | any necessary authorization to the appropriate federal, | 4 | | State, or local authority or any other person for the | 5 | | release to the Department of information requested by the | 6 | | Department, with the information requested to include, but | 7 | | not be limited to, financial reports, returns, or records | 8 | | relating to the applicant or to the amount of credit | 9 | | allowable under this Section. | 10 | | (8) Require that an applicant shall at all times keep
| 11 | | proper books of record and account in accordance with | 12 | | generally accepted accounting principles consistently | 13 | | applied, with the books, records, or papers related to the | 14 | | agreement in the custody or control of the applicant open | 15 | | for reasonable Department inspection and audits, and | 16 | | including, without limitation, the making of copies of the | 17 | | books, records, or papers. | 18 | | (9) Take whatever actions are necessary or
appropriate | 19 | | to protect the State's interest in the event of bankruptcy, | 20 | | default, foreclosure, or noncompliance with the terms and | 21 | | conditions of financial assistance or participation | 22 | | required under this Section, including the power to sell, | 23 | | dispose of, lease, or rent, upon terms and conditions | 24 | | determined by the Director to be appropriate, real or | 25 | | personal property that the Department may recover as a | 26 | | result of these actions. |
| | | SB3194 | - 7 - | LRB100 18917 HLH 34163 b |
|
| 1 | | (c) Subject to the conditions set forth in this Section, an | 2 | | applicant is entitled to a credit of $500 against the payment | 3 | | of taxes withheld under Section 704A of this Act for each | 4 | | qualified employee who is employed for at least 12 consecutive | 5 | | months after the date of hire. This credit may be taken both in | 6 | | the year that the qualified employee was hired and again in the | 7 | | amount of $500 for each year of the next 4 years where the | 8 | | qualified employee is employed for 12 consecutive months. The | 9 | | credit may be taken in equal installments for each withholding | 10 | | tax return filed by the taxpayer during the 12-month period | 11 | | occurring on or after the date on which the tax credit | 12 | | certificate is issued by the Department, and for each year | 13 | | thereafter in which the credit is taken. | 14 | | (d) An applicant that hires a qualified employee during the | 15 | | incentive period may apply for a tax credit certificate with | 16 | | respect to a qualified employee on or after the date that is 12 | 17 | | months after the date of hire of the qualified employee; | 18 | | however, no tax credit certificate shall be granted if the | 19 | | application is filed more than 18 months after the qualified | 20 | | employee's date of hire. The application shall include the | 21 | | following: | 22 | | (1) the names, Social Security numbers, job
| 23 | | descriptions, salary or wage rates, and dates of hire of | 24 | | the qualified employees with respect to whom the credit is | 25 | | being requested, and an indication of whether each | 26 | | qualified employee listed graduated from a public |
| | | SB3194 | - 8 - | LRB100 18917 HLH 34163 b |
|
| 1 | | university in the State within a year prior to the date of | 2 | | hire; | 3 | | (2) a certification that each new employee listed has
| 4 | | been retained on the job for a period of 12 months after | 5 | | the date of hire; | 6 | | (3) the number of qualified employees hired by the
| 7 | | applicant during the incentive period; | 8 | | (4) an agreement that the Director is authorized to
| 9 | | verify with the appropriate State agencies the information | 10 | | contained in the request before issuing a certificate to | 11 | | the applicant; and | 12 | | (5) any other information the Department determines
to | 13 | | be appropriate. | 14 | | After receipt of an application under this subsection, the | 15 | | Department shall issue a receipt to the applicant, stating the | 16 | | date and time on which the application was received by the | 17 | | Department and an identifying number assigned to the applicant | 18 | | by the Department. The Department shall then approve or deny | 19 | | the application. | 20 | | The Department shall issue a tax credit certificate to each
| 21 | | applicant that qualifies for a credit under this Section, until | 22 | | such time as the monetary limit set forth in subsection (e) is | 23 | | met. The tax credit certificate shall include the following: | 24 | | (1) the name and taxpayer identification number of
the | 25 | | applicant; | 26 | | (2) the date on which the certificate is issued; |
| | | SB3194 | - 9 - | LRB100 18917 HLH 34163 b |
|
| 1 | | (3) the credit amount that will be allowed; and | 2 | | (4) any other information the Department determines
to | 3 | | be appropriate. | 4 | | (e) The Department shall limit the monetary amount of | 5 | | credits awarded under this Section to no more than $25,000,000. | 6 | | If applications for a greater amount are received, credits | 7 | | shall be allowed on a first-come, first-served basis, based on | 8 | | the date on which each properly completed application for a | 9 | | certificate of eligibility is received by the Department. If | 10 | | more than one certificate of eligibility is received on the | 11 | | same day, the credits will be awarded based on the time of | 12 | | submission for that particular day. | 13 | | (f) An applicant claiming a credit under this Section shall | 14 | | submit to the Department of Revenue a copy of each tax credit | 15 | | certificate with the first return for which the credit shown on | 16 | | the tax credit certificate is claimed. However, failure to | 17 | | submit a copy of the tax credit certificate with the | 18 | | applicant's return shall not invalidate a claim for a credit. | 19 | | (g) If the Director determines that an applicant who has | 20 | | received a credit under this Section is not complying with the | 21 | | requirements of the provisions of this Section, the Director | 22 | | shall provide notice to the applicant of the alleged | 23 | | noncompliance, and allow the taxpayer a hearing under the | 24 | | provisions of the Illinois Administrative Procedure Act. If, | 25 | | after such notice and any hearing, the Director determines that | 26 | | a noncompliance exists, the Director shall issue to the |
| | | SB3194 | - 10 - | LRB100 18917 HLH 34163 b |
|
| 1 | | Department of Revenue notice to that effect, stating the | 2 | | noncompliance date. | 3 | | (h) The Department may adopt rules necessary to implement | 4 | | this Section. The rules may provide for recipients of credits | 5 | | under this Section to be charged fees to cover administrative | 6 | | costs of the tax credit program.
| 7 | | Section 99. Effective date. This Act takes effect upon | 8 | | becoming law.
|
|