Full Text of HB5808 96th General Assembly
HB5808 96TH GENERAL ASSEMBLY
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96TH GENERAL ASSEMBLY
State of Illinois
2009 and 2010 HB5808
Introduced 2/10/2010, by Rep. Kay Hatcher - Darlene J. Senger - Sidney H. Mathias - Sandra M. Pihos - William B. Black, et al. SYNOPSIS AS INTRODUCED: |
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New Act |
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35 ILCS 5/219 new |
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Creates the Manufacturing Job Destination Tax Credit Act and amends the Illinois Income Tax Act. Provides for a credit of 25% of the Illinois labor expenditures made by a manufacturing company in order to foster job creation and retention in Illinois. Authorizes the Department of Revenue to award a tax credit to taxpayer-employers who apply for the credit and meet certain Illinois labor expenditure requirements. Sets minimum requirements and procedures for certifying a taxpayer as an "accredited manufacturer" and for awarding the credit. Effective immediately.
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FISCAL NOTE ACT MAY APPLY | |
HOUSING AFFORDABILITY IMPACT NOTE ACT MAY APPLY |
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A BILL FOR
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HB5808 |
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LRB096 18411 HLH 33789 b |
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| AN ACT concerning revenue.
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| Be it enacted by the People of the State of Illinois,
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| represented in the General Assembly:
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| Section 5. Short title. This Act may be cited as the | 5 |
| Manufacturing Job Destination Tax Credit Act. | 6 |
| Section 10. Purpose. The General Assembly finds that the | 7 |
| manufacturing sector is a crucial underpinning of the economy | 8 |
| of the State of Illinois. Therefore, it is in the best interest | 9 |
| of the State of Illinois to make Illinois the preferred | 10 |
| destination for manufacturing and to strengthen the existing | 11 |
| industrial base in Illinois, thereby promoting job growth, an | 12 |
| expedited economic recovery, and long-term revenue growth for | 13 |
| the State. | 14 |
| Section 15. Definitions. As used in this Act: | 15 |
| "Accredited manufacturer" means a manufacturer that has | 16 |
| been certified by the Department. | 17 |
| "Credit" means an amount equal to 25% of qualifying | 18 |
| Illinois labor expenditures approved by the Department. The | 19 |
| accredited manufacturer is deemed to have paid, on its balance | 20 |
| due day for the year, an amount equal to 25% of its qualified | 21 |
| Illinois labor expenditure for the tax year. | 22 |
| "Department" means the Department of Revenue. |
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| "Director" means the Director of Revenue. | 2 |
| "Illinois labor expenditure" means salary or wages paid to | 3 |
| employees of an accredited manufacturer for services rendered | 4 |
| in Illinois. | 5 |
| To qualify as an Illinois labor expenditure, the | 6 |
| expenditure must be: | 7 |
| (1) reasonable under the circumstances; | 8 |
| (2) included in the federal income tax basis of the | 9 |
| property; | 10 |
| (3) incurred by the accredited manufacturer for | 11 |
| services on or after January 1, 2010; | 12 |
| (4) incurred for the production stages of the | 13 |
| manufacturing process; | 14 |
| (5) limited to the first $25,000 of wages paid to or | 15 |
| incurred for each employee of the manufacturing company; | 16 |
| (6) exclusive of the salary or wages paid to or | 17 |
| incurred for the 2 highest paid employees of the | 18 |
| manufacturing company; | 19 |
| (7) directly attributable to the accredited | 20 |
| manufacturer; | 21 |
| (8) paid in the tax year for which the applicant is | 22 |
| claiming the credit or no later than 60 days after the end | 23 |
| of the tax year; and | 24 |
| (9) paid for services rendered in Illinois. | 25 |
| Section 20. Tax credit awards. Subject to the conditions |
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| set forth in this Act, an accredited manufacturer is entitled | 2 |
| to a credit of 25% of all qualifying Illinois labor | 3 |
| expenditures approved by the Department. | 4 |
| Section 25. Accredited manufacturing company | 5 |
| certification. Any taxpayer may request certification as an | 6 |
| accredited manufacturing company by formal application to the | 7 |
| Department. In determining whether to issue an accredited | 8 |
| manufacturing company certificate, the Department must | 9 |
| determine that all of the following conditions exist: | 10 |
| (1) The taxpayer is engaged primarily in the business | 11 |
| of manufacturing goods. | 12 |
| (2) The taxpayer intends to employ workers in the State | 13 |
| of Illinois. | 14 |
| (3) The taxpayer provides health insurance to its | 15 |
| employees. | 16 |
| (4) The taxpayer provides to its employees either a | 17 |
| pension plan or a 401k plan. | 18 |
| (5) The taxpayer offers to its employees elder care | 19 |
| benefits and a dependent care flexible spending account. | 20 |
| (6) The taxpayer intends to expend a portion of its | 21 |
| research and development budgets in the State of Illinois. | 22 |
| Section 30. Issuance of manufacturing job destination tax | 23 |
| credit certification. | 24 |
| (a) In order to qualify for a tax credit under this Act, an |
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| accredited manufacturer must file, on forms prescribed by the | 2 |
| Department, all information necessary to calculate the tax | 3 |
| credit. | 4 |
| (b) Upon satisfactory review of the application, the | 5 |
| Department shall issue a manufacturing job destination tax | 6 |
| credit certificate stating the amount of the tax credit. | 7 |
| Section 35. Amount and duration of the credit. The amount | 8 |
| of the credit awarded under this Act is based on the amount of | 9 |
| qualifying Illinois labor expenditures approved by the | 10 |
| Department in any tax year beginning on or after January 1, | 11 |
| 2010 for the applicant. | 12 |
| Section 40. Evaluation of tax credit program. The | 13 |
| Department shall evaluate the tax credit program. The | 14 |
| evaluation must include an assessment of the effectiveness of | 15 |
| the program in creating and retaining jobs in Illinois and of | 16 |
| the revenue impact of the program and may include a review of | 17 |
| the practices and experiences of other states or nations with | 18 |
| similar programs. Upon completion of this evaluation, the | 19 |
| Department shall determine the overall success of the program | 20 |
| and may make a recommendation to extend, modify, or not extend | 21 |
| the program based on this evaluation. | 22 |
| Section 45. Program terms and conditions. Any documentary | 23 |
| materials or data made available to or received by any agent or |
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| employee of the Department are confidential and are not public | 2 |
| records to the extent that the materials or data consist of | 3 |
| commercial or financial information regarding the | 4 |
| manufacturing operation of the applicant for or recipient of | 5 |
| any tax credit under this Act. | 6 |
| Section 50. Appeals. If the Department denies a taxpayer | 7 |
| certification under Section 25 of this Act, the denial must be | 8 |
| in writing and must state the reasons for the denial. The | 9 |
| taxpayer shall have 60 days after the first denial to correct | 10 |
| any deficiency that was the reason for the initial denial of | 11 |
| certification. | 12 |
| If the Department again denies the certification, the | 13 |
| taxpayer may appeal the second denial within 60 days after that | 14 |
| denial and request a hearing. At the hearing, if the taxpayer | 15 |
| shows, by preponderance of evidence, that he or she has | 16 |
| complied with the requirements of this Section, then the | 17 |
| taxpayer shall be certified as an accredited manufacturer. | 18 |
| If the taxpayer disagrees with the Department about the | 19 |
| amount of the tax credit available for any tax year, the | 20 |
| taxpayer may appeal the certification and request a hearing. If | 21 |
| the taxpayer shows, by a preponderance of evidence, that he or | 22 |
| she is entitled to a larger amount, the Department shall | 23 |
| approve the larger amount. However, in no instance may the | 24 |
| Department determine a lesser amount. | 25 |
| The provisions of the Administrative Review Law, and the |
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| rules adopted pursuant thereto, apply to and govern all | 2 |
| proceedings for the judicial review of this Act. | 3 |
| Section 90. The Illinois Income Tax Act is amended by | 4 |
| adding Section 219 as follows:
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| (35 ILCS 5/219 new) | 6 |
| Sec. 219. Manufacturing job destination tax credit. For tax | 7 |
| years beginning on or after January 1, 2010, a taxpayer who has | 8 |
| been awarded a tax credit under the Manufacturing Job | 9 |
| Destination Tax Credit Act is entitled to a credit against the | 10 |
| taxes imposed under subsections (a) and (b) of Section 201 of | 11 |
| this Act in an amount determined by the Department under the | 12 |
| Manufacturing Job Destination Tax Credit Act. If the taxpayer | 13 |
| is a partnership or Subchapter S corporation, the credit is | 14 |
| allowed to the partners or shareholders in accordance with the | 15 |
| determination of income and distributive share of income under | 16 |
| Sections 702 and 704 and Subchapter S of the Internal Revenue | 17 |
| Code. The Department must prescribe rules to enforce and | 18 |
| administer the provisions of this Section. This Section is | 19 |
| exempt from the provisions of Section 250 of this Act. | 20 |
| The credit may not be carried forward or back. In no event | 21 |
| shall a credit under this Section reduce the taxpayer's | 22 |
| liability to less than zero.
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| Section 99. Effective date. This Act takes effect upon | 24 |
| becoming law.
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