Full Text of HB5827 103rd General Assembly
HB5827 103RD GENERAL ASSEMBLY | | | 103RD GENERAL ASSEMBLY
State of Illinois
2023 and 2024 HB5827 Introduced 4/30/2024, by Rep. Yolonda Morris SYNOPSIS AS INTRODUCED: | | | Amends the Illinois Income Tax Act. Provides that, if a taxpayer is awarded a credit by the Department of Commerce and Economic Opportunity in connection with a qualifying Illinois data center located in a qualified area or a data center developed by a minority-owned business, a women-owned business, or a business owned a person with a disability, then the taxpayer is entitled to an additional income tax credit in an amount equal to 5% of the taxpayer's investment in qualified tangible personal property used in the construction or operation of that data center. Effective immediately. |
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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 229 as follows: | 6 | | (35 ILCS 5/229) | 7 | | Sec. 229. Data center construction employment tax credit. | 8 | | (a) A taxpayer who has been awarded a credit by the | 9 | | Department of Commerce and Economic Opportunity under Section | 10 | | 605-1025 of the Department of Commerce and Economic | 11 | | Opportunity Law of the Civil Administrative Code of Illinois | 12 | | is entitled to a credit against the taxes imposed under | 13 | | subsections (a) and (b) of Section 201 of this Act. The amount | 14 | | of the credit shall be 20% of the wages paid during the taxable | 15 | | year to a full-time or part-time employee of a construction | 16 | | contractor employed by a certified data center if those wages | 17 | | are paid for the construction of a new data center in a | 18 | | geographic area that meets any one of the following criteria: | 19 | | (1) the area has a poverty rate of at least 20%, | 20 | | according to the U.S. Census Bureau American Community | 21 | | Survey 5-Year Estimates; | 22 | | (2) 75% or more of the children in the area | 23 | | participate in the federal free lunch program, according |
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| 1 | | to reported statistics from the State Board of Education; | 2 | | (3) 20% or more of the households in the area receive | 3 | | assistance under the Supplemental Nutrition Assistance | 4 | | Program (SNAP), according to data from the U.S. Census | 5 | | Bureau American Community Survey 5-year Estimates; or | 6 | | (4) the area has an average unemployment rate, as | 7 | | determined by the Department of Employment Security, that | 8 | | is more than 120% of the national unemployment average, as | 9 | | determined by the U.S. Department of Labor, for a period | 10 | | of at least 2 consecutive calendar years preceding the | 11 | | date of the application. | 12 | | (a-5) For taxable years beginning on or after January 1, | 13 | | 2025, if the taxpayer is awarded a credit under Section | 14 | | 605-1025 of the Department of Commerce and Economic | 15 | | Opportunity Law of the Civil Administrative Code of Illinois | 16 | | in connection with a qualifying Illinois data center located | 17 | | in a qualified area or a data center developed by a qualified | 18 | | business enterprise, then the taxpayer is entitled to an | 19 | | additional credit against the tax imposed by subsections (a) | 20 | | and (b) of Section 201 in an amount equal to 5% of the | 21 | | taxpayer's investment in qualified tangible personal property | 22 | | used in the construction or operation of that data center. The | 23 | | credit shall be available for a period of 5 taxable years after | 24 | | the property is placed in service. The taxpayer may transfer | 25 | | the credit in accordance with rules adopted by the Department | 26 | | of Commerce and Economic Opportunity. |
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| 1 | | (a-10) For taxable years ending before December 31, 2023, | 2 | | if the taxpayer is a partnership, a Subchapter S corporation, | 3 | | or a limited liability company that has elected partnership | 4 | | tax treatment, the credit shall be allowed to the partners, | 5 | | shareholders, or members in accordance with the determination | 6 | | of income and distributive share of income under Sections 702 | 7 | | and 704 and subchapter S of the Internal Revenue Code, as | 8 | | applicable. For taxable years ending on or after December 31, | 9 | | 2023, if the taxpayer is a partnership or a Subchapter S | 10 | | corporation, then the provisions of Section 251 apply. The | 11 | | Department, in cooperation with the Department of Commerce and | 12 | | Economic Opportunity, shall adopt rules to enforce and | 13 | | administer this Section. This Section is exempt from the | 14 | | provisions of Section 250 of this Act. | 15 | | (b) In no event shall a credit under this Section reduce | 16 | | the taxpayer's liability to less than zero. If the amount of | 17 | | the credit exceeds the tax liability for the year, the excess | 18 | | may be carried forward and applied to the tax liability of the | 19 | | 5 taxable years following the excess credit year. The tax | 20 | | credit shall be applied to the earliest year for which there is | 21 | | a tax liability. If there are credits for more than one year | 22 | | that are available to offset a liability, the earlier credit | 23 | | shall be applied first. | 24 | | (c) No credit shall be allowed with respect to any | 25 | | certification for any taxable year ending after the revocation | 26 | | of the certification by the Department of Commerce and |
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| 1 | | Economic Opportunity. Upon receiving notification by the | 2 | | Department of Commerce and Economic Opportunity of the | 3 | | revocation of certification, the Department shall notify the | 4 | | taxpayer that no credit is allowed for any taxable year ending | 5 | | after the revocation date, as stated in such notification. If | 6 | | any credit has been allowed with respect to a certification | 7 | | for a taxable year ending after the revocation date, any | 8 | | refund paid to the taxpayer for that taxable year shall, to the | 9 | | extent of that credit allowed, be an erroneous refund within | 10 | | the meaning of Section 912 of this Act. | 11 | | (d) As used in this Section: | 12 | | "Qualified area" means an opportunity zone, an area | 13 | | designated as an R3 community pursuant to the Cannabis | 14 | | Regulation and Tax Act, or a community designated as a | 15 | | Disproportionately Impacted Area that is eligible for | 16 | | participation in the Illinois Adult-Use Cannabis Social Equity | 17 | | Program administered by the Department of Commerce and | 18 | | Economic Opportunity. | 19 | | "Qualified business enterprise" means a minority-owned | 20 | | business, a women-owned business, or a business owned a person | 21 | | with a disability, as those terms are defined in the Business | 22 | | Enterprise for Minorities, Women, and Persons with | 23 | | Disabilities Act. | 24 | | "Qualified tangible personal property" has the meaning | 25 | | given to that term in Section 605-1025 of the Department of | 26 | | Commerce and Economic Opportunity Law of the Civil |
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| 1 | | Administrative Code of Illinois. | 2 | | (e) This Section is exempt from the provisions of Section | 3 | | 250. | 4 | | (Source: P.A. 102-558, eff. 8-20-21; 103-396, eff. 1-1-24 .) | 5 | | Section 99. Effective date. This Act takes effect upon | 6 | | becoming law. |
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