Full Text of HB4106 103rd General Assembly
HB4106 103RD GENERAL ASSEMBLY |
| | 103RD GENERAL ASSEMBLY
State of Illinois
2023 and 2024 HB4106 Introduced , by Rep. Kevin Schmidt SYNOPSIS AS INTRODUCED: |
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Amends the Illinois Income Tax Act. Provides that a qualified taxpayer that has begun construction on a qualified restoration or preservation project prior to December 31, 2026, will be eligible to receive the tax credit until the taxable year that the project is completed or suspended.
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| | A BILL FOR |
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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 Illinois Income Tax Act is amended by | 5 | | changing Section 221 as follows: | 6 | | (35 ILCS 5/221) | 7 | | Sec. 221. Rehabilitation costs; qualified historic | 8 | | properties; River Edge Redevelopment Zone. | 9 | | (a) For taxable years that begin on or after January 1, | 10 | | 2012 and begin prior to January 1, 2018, there shall be allowed | 11 | | a tax credit against the tax imposed by subsections (a) and (b) | 12 | | of Section 201 of this Act in an amount equal to 25% of | 13 | | qualified expenditures incurred by a qualified taxpayer during | 14 | | the taxable year in the restoration and preservation of a | 15 | | qualified historic structure located in a River Edge | 16 | | Redevelopment Zone pursuant to a qualified rehabilitation | 17 | | plan, provided that the total amount of such expenditures (i) | 18 | | must equal $5,000 or more and (ii) must exceed 50% of the | 19 | | purchase price of the property. | 20 | | (a-1) For taxable years that begin on or after January 1, | 21 | | 2018 and end prior to January 1, 2027, there shall be allowed a | 22 | | tax credit against the tax imposed by subsections (a) and (b) | 23 | | of Section 201 of this Act in an aggregate amount equal to 25% |
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| 1 | | of qualified expenditures incurred by a qualified taxpayer in | 2 | | the restoration and preservation of a qualified historic | 3 | | structure located in a River Edge Redevelopment Zone pursuant | 4 | | to a qualified rehabilitation plan, provided that the total | 5 | | amount of such expenditures must (i) equal $5,000 or more and | 6 | | (ii) exceed the adjusted basis of the qualified historic | 7 | | structure on the first day the qualified rehabilitation plan | 8 | | begins. For any rehabilitation project, regardless of duration | 9 | | or number of phases, the project's compliance with the | 10 | | foregoing provisions (i) and (ii) shall be determined based on | 11 | | the aggregate amount of qualified expenditures for the entire | 12 | | project and may include expenditures incurred under subsection | 13 | | (a), this subsection, or both subsection (a) and this | 14 | | subsection. If the qualified rehabilitation plan spans | 15 | | multiple years, the aggregate credit for the entire project | 16 | | shall be allowed in the last taxable year, except for phased | 17 | | rehabilitation projects, which may receive credits upon | 18 | | completion of each phase. Before obtaining the first phased | 19 | | credit: (A) the total amount of such expenditures must meet | 20 | | the requirements of provisions (i) and (ii) of this | 21 | | subsection; (B) the rehabilitated portion of the qualified | 22 | | historic structure must be placed in service; and (C) the | 23 | | requirements of subsection (b) must be met. | 24 | | (a-2) For taxable years beginning on or after January 1, | 25 | | 2021 and ending prior to January 1, 2027, there shall be | 26 | | allowed a tax credit against the tax imposed by subsections |
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| 1 | | (a) and (b) of Section 201 as provided in Section 10-10.3 of | 2 | | the River Edge Redevelopment Zone Act. The credit allowed | 3 | | under this subsection (a-2) shall apply only to taxpayers that | 4 | | make a capital investment of at least $1,000,000 in a | 5 | | qualified rehabilitation plan. | 6 | | The credit or credits may not reduce the taxpayer's | 7 | | liability to less than zero. If the amount of the credit or | 8 | | credits exceeds the taxpayer's liability, the excess may be | 9 | | carried forward and applied against the taxpayer's liability | 10 | | in succeeding calendar years in the manner provided under | 11 | | paragraph (4) of Section 211 of this Act. The credit or credits | 12 | | shall be applied to the earliest year for which there is a tax | 13 | | liability. If there are credits from more than one taxable | 14 | | year that are available to offset a liability, the earlier | 15 | | credit shall be applied first. | 16 | | For partners, shareholders of Subchapter S corporations, | 17 | | and owners of limited liability companies, if the liability | 18 | | company is treated as a partnership for the purposes of | 19 | | federal and State income taxation, there shall be allowed a | 20 | | credit under this Section to be determined in accordance with | 21 | | the determination of income and distributive share of income | 22 | | under Sections 702 and 704 and Subchapter S of the Internal | 23 | | Revenue Code. | 24 | | The total aggregate amount of credits awarded under the | 25 | | Blue Collar Jobs Act (Article 20 of this amendatory Act of the | 26 | | 101st General Assembly) shall not exceed $20,000,000 in any |
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| 1 | | State fiscal year. | 2 | | (b) To obtain a tax credit pursuant to this Section, the | 3 | | taxpayer must apply with the Department of Natural Resources. | 4 | | The Department of Natural Resources shall determine the amount | 5 | | of eligible rehabilitation costs and expenses in addition to | 6 | | the amount of the River Edge construction jobs credit within | 7 | | 45 days of receipt of a complete application. The taxpayer | 8 | | must submit a certification of costs prepared by an | 9 | | independent certified public accountant that certifies (i) the | 10 | | project expenses, (ii) whether those expenses are qualified | 11 | | expenditures, and (iii) that the qualified expenditures exceed | 12 | | the adjusted basis of the qualified historic structure on the | 13 | | first day the qualified rehabilitation plan commenced. The | 14 | | Department of Natural Resources is authorized, but not | 15 | | required, to accept this certification of costs to determine | 16 | | the amount of qualified expenditures and the amount of the | 17 | | credit. The Department of Natural Resources shall provide | 18 | | guidance as to the minimum standards to be followed in the | 19 | | preparation of such certification. The Department of Natural | 20 | | Resources and the National Park Service shall determine | 21 | | whether the rehabilitation is consistent with the United | 22 | | States Secretary of the Interior's Standards for | 23 | | Rehabilitation. | 24 | | (b-1) Upon completion of the project and approval of the | 25 | | complete application, the Department of Natural Resources | 26 | | shall issue a single certificate in the amount of the eligible |
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| 1 | | credits equal to 25% of qualified expenditures incurred during | 2 | | the eligible taxable years, as defined in subsections (a) and | 3 | | (a-1), excepting any credits awarded under subsection (a) | 4 | | prior to January 1, 2019 (the effective date of Public Act | 5 | | 100-629) and any phased credits issued prior to the eligible | 6 | | taxable year under subsection (a-1). At the time the | 7 | | certificate is issued, an issuance fee up to the maximum | 8 | | amount of 2% of the amount of the credits issued by the | 9 | | certificate may be collected from the applicant to administer | 10 | | the provisions of this Section. If collected, this issuance | 11 | | fee shall be deposited into the Historic Property | 12 | | Administrative Fund, a special fund created in the State | 13 | | treasury. Subject to appropriation, moneys in the Historic | 14 | | Property Administrative Fund shall be provided to the | 15 | | Department of Natural Resources as reimbursement for the costs | 16 | | associated with administering this Section. | 17 | | (c) The taxpayer must attach the certificate to the tax | 18 | | return on which the credits are to be claimed. The tax credit | 19 | | under this Section may not reduce the taxpayer's liability to | 20 | | less than
zero. If the amount of the credit exceeds the tax | 21 | | liability for the year, the excess credit may be carried | 22 | | forward and applied to the tax liability of the 5 taxable years | 23 | | following the excess credit year. | 24 | | (c-1) Subject to appropriation, moneys in the Historic | 25 | | Property Administrative Fund shall be used, on a biennial | 26 | | basis beginning at the end of the second fiscal year after |
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| 1 | | January 1, 2019 (the effective date of Public Act 100-629), to | 2 | | hire a qualified third party to prepare a biennial report to | 3 | | assess the overall economic impact to the State from the | 4 | | qualified rehabilitation projects under this Section completed | 5 | | in that year and in previous years. The overall economic | 6 | | impact shall include at least: (1) the direct and indirect or | 7 | | induced economic impacts of completed projects; (2) temporary, | 8 | | permanent, and construction jobs created; (3) sales, income, | 9 | | and property tax generation before, during construction, and | 10 | | after completion; and (4) indirect neighborhood impact after | 11 | | completion. The report shall be submitted to the Governor and | 12 | | the General Assembly. The report to the General Assembly shall | 13 | | be filed with the Clerk of the House of Representatives and the | 14 | | Secretary of the Senate in electronic form only, in the manner | 15 | | that the Clerk and the Secretary shall direct. | 16 | | (c-2) The Department of Natural Resources may adopt rules | 17 | | to implement this Section in addition to the rules expressly | 18 | | authorized in this Section. | 19 | | (c-3) A qualified taxpayer that has begun construction on | 20 | | a qualified restoration or preservation project under this | 21 | | Section prior to December 31, 2026, will be eligible to | 22 | | receive the tax credit until the taxable year that the project | 23 | | is completed or suspended. | 24 | | (d) As used in this Section, the following terms have the | 25 | | following meanings. | 26 | | "Phased rehabilitation" means a project that is completed |
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| 1 | | in phases, as defined under Section 47 of the federal Internal | 2 | | Revenue Code and pursuant to National Park Service regulations | 3 | | at 36 C.F.R. 67. | 4 | | "Placed in service" means the date when the property is | 5 | | placed in a condition or state of readiness and availability | 6 | | for a specifically assigned function as defined under Section | 7 | | 47 of the federal Internal Revenue Code and federal Treasury | 8 | | Regulation Sections 1.46 and 1.48. | 9 | | "Qualified expenditure" means all the costs and expenses | 10 | | defined as qualified rehabilitation expenditures under Section | 11 | | 47 of the federal Internal Revenue Code that were incurred in | 12 | | connection with a qualified historic structure. | 13 | | "Qualified historic structure" means a certified historic | 14 | | structure as defined under Section 47(c)(3) of the federal | 15 | | Internal Revenue Code. | 16 | | "Qualified rehabilitation plan" means a project that is | 17 | | approved by the Department of Natural Resources and the | 18 | | National Park Service as being consistent with the United | 19 | | States Secretary of the Interior's Standards for | 20 | | Rehabilitation. | 21 | | "Qualified taxpayer" means the owner of the qualified | 22 | | historic structure or any other person who qualifies for the | 23 | | federal rehabilitation credit allowed by Section 47 of the | 24 | | federal Internal Revenue Code with respect to that qualified | 25 | | historic structure. Partners, shareholders of subchapter S | 26 | | corporations, and owners of limited liability companies (if |
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| 1 | | the limited liability company is treated as a partnership for | 2 | | purposes of federal and State income taxation) are entitled to | 3 | | a credit under this Section to be determined in accordance | 4 | | with the determination of income and distributive share of | 5 | | income under Sections 702 and 703 and subchapter S of the | 6 | | Internal Revenue Code, provided that credits granted to a | 7 | | partnership, a limited liability company taxed as a | 8 | | partnership, or other multiple owners of property shall be | 9 | | passed through to the partners, members, or owners | 10 | | respectively on a pro rata basis or pursuant to an executed | 11 | | agreement among the partners, members, or owners documenting | 12 | | any alternate distribution method.
| 13 | | (Source: P.A. 101-9, eff. 6-5-19; 101-81, eff. 7-12-19; | 14 | | 102-16, eff. 6-17-21.)
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