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92_SB1111
LRB9207704SMdvA
1 AN ACT in relation to taxation.
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 adding Section 213 as follows:
6 (35 ILCS 5/213 new)
7 Sec. 213. Venture capital investment tax credit.
8 (a) Beginning with taxable years ending on or after
9 December 31, 2001 and ending with taxable years ending on or
10 before December 30, 2006, each taxpayer is entitled to a
11 credit against the tax imposed by subsections (a) and (b) of
12 Section 201 for an investment in a qualified venture capital
13 fund in Illinois. The credit is allowed for investments in
14 venture capital funds that qualify as follows:
15 (1) The venture capital fund must have its primary
16 office in Illinois.
17 (2) At least 50% of the total number of investments
18 in the the venture capital fund's portfolio must be in
19 companies that are based in Illinois. The Illinois
20 company invested in by the venture capital fund must
21 remain in Illinois for at least one year after the
22 venture capital fund makes the investment that is
23 eligible for the credit under this Section. If the
24 company invested in does not remain in Illinois for at
25 least one year after investment by the venture capital
26 fund, the taxpayer must forfeit the credit.
27 (3) The amount of the credit allowed is based on
28 the following investment factors:
29 (A) The company invested in is in a low-income
30 area in Illinois, based on factors such as poverty,
31 unemployment, and whether it is in an empowerment
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1 zone.
2 (B) The company invested in is in an Illinois
3 county with a population of less than 500,000.
4 (C) The company invested in is an Illinois
5 company that is minority or women owned.
6 (D) The investment is a seed-level investment
7 in an Illinois company.
8 (4) The amount of the credit is determined by
9 whether the investment meets one or more of the factors
10 in subdivision (a)(3). If the investment meets only one
11 of the factors in subdivision (a)(3), the credit is equal
12 to 10% of the amount invested by the taxpayer in the
13 taxable year. If the investment meets more than one of
14 the factors in subdivision (a)(3), the credit is equal to
15 20% of the amount invested by the taxpayer in the taxable
16 year. The taxpayer is not eligible to receive the tax
17 credit under this Section until the qualified venture
18 capital fund makes an investment in a qualified Illinois
19 business, not when the taxpayer makes the initial
20 commitment to invest in the venture capital fund.
21 (b) The tax credit may not reduce the taxpayer's
22 liability to less than zero. If the amount of the credit
23 exceeds the tax liability for the year, the excess may be
24 carried forward and applied to the tax liability of the 5
25 taxable years following the excess credit year. The credit
26 shall be applied to the earliest year for which there is a
27 tax liability. If there are credits from more than one tax
28 year that are available to offset a liability, the earlier
29 credit shall be applied first.
30 (c) The Department must adopt rules concerning (i) the
31 certification and decertification of taxpayers for
32 eligibility for the credit under this Section and (ii)
33 forfeiture of credits.
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1 Section 99. Effective date. This Act takes effect upon
2 becoming law.