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Public Act 097-0002 | ||||
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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. The Corporate Accountability for Tax | ||||
Expenditures Act is amended by changing Section 25 as follows:
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(20 ILCS 715/25)
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Sec. 25. Recapture.
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(a) All development assistance agreements
shall contain, | ||||
at a
minimum, the following recapture provisions:
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(1) The recipient must (i) make the level of capital | ||||
investment in the
economic
development project specified | ||||
in the development assistance agreement; (ii)
create or
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retain, or both, the requisite number of jobs, paying not | ||||
less than specified
wages for the
created and retained | ||||
jobs, within and for the duration of the time period
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specified in the
legislation authorizing, or the | ||||
administrative rules implementing, the
development
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assistance programs and the development assistance | ||||
agreement.
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(2) If the recipient fails to create or retain the | ||||
requisite number of
jobs within and
for the time period | ||||
specified, in the legislation authorizing, or the
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administrative rules
implementing, the development |
assistance programs and the development
assistance
| ||
agreement, the recipient shall be deemed to no longer | ||
qualify for the State
economic
assistance and the | ||
applicable recapture provisions shall take effect.
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(3) If the recipient receives State economic | ||
assistance in the form of a
High
Impact Business | ||
designation pursuant to Section 5.5 of the Illinois | ||
Enterprise
Zone Act
and the business receives the benefit | ||
of the exemption authorized under Section
5l of the
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Retailers' Occupation Tax Act (for the sale of building | ||
materials incorporated
into a High
Impact Business | ||
location) and the recipient fails to create or retain the
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requisite number
of jobs, as determined by the legislation | ||
authorizing the development
assistance
programs
or the | ||
administrative rules implementing such legislation, or | ||
both, within the
requisite
period of time, the recipient | ||
shall be required to pay to the State the full
amount of | ||
the
State tax exemption that it received as a result of the | ||
High Impact Business
designation.
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(4) If the recipient receives a grant or loan pursuant | ||
to the Large
Business
Development Program, the Business | ||
Development Public Infrastructure Program, or
the
| ||
Industrial Training Program and the recipient fails to | ||
create or retain the
requisite number
of jobs for the | ||
requisite time period, as provided in the legislation
| ||
authorizing the
development assistance programs or the |
administrative rules implementing such
legislation, or | ||
both, or in the development assistance agreement, the | ||
recipient
shall be
required to repay to the State a pro | ||
rata amount of the grant; that amount
shall
reflect
the | ||
percentage of the deficiency between the requisite number | ||
of jobs to be
created or
retained by the recipient and the | ||
actual number of such jobs in existence as of
the date the
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Department determines the recipient is in breach of the job | ||
creation or
retention
covenants contained in the | ||
development assistance agreement. If the recipient
of
| ||
development assistance under the Large Business | ||
Development Program, the
Business
Development Public | ||
Infrastructure Program, or the Industrial Training Program
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ceases
operations at the specific project site, during the | ||
5-year period commencing on
the date of
assistance, the | ||
recipient shall be required to repay the entire amount of | ||
the
grant or to
accelerate repayment of the loan back to | ||
the State.
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(5) If the recipient receives a tax credit under the | ||
Economic
Development for a
Growing Economy tax credit | ||
program, the development assistance agreement must
provide | ||
that (i) if the number of new or retained employees falls | ||
below the
requisite
number set forth in the development | ||
assistance agreement, the allowance of the
credit
shall be | ||
automatically suspended until the number of new and | ||
retained employees
equals
or exceeds the requisite number |
in the development assistance agreement; (ii)
if
the
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recipient discontinues operations at the specific project | ||
site during the 5-year period after the beginning of the | ||
first tax year for which the Department issues a tax credit | ||
certificate the first
5 years of the
10-year term of the | ||
development assistance agreement , the recipient shall
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forfeit all
credits taken by the recipient during such | ||
5-year period; and (iii) in the
event
of a
revocation or | ||
suspension of the credit, the Department shall contact the
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Director
of Revenue to initiate proceedings against the | ||
recipient to recover
wrongfully
exempted Illinois State | ||
income taxes and the recipient shall promptly repay to
the
| ||
Department of Revenue any wrongfully exempted Illinois | ||
State income taxes.
The forfeited amount of credits shall | ||
be deemed assessed on the date the
Department
contacts the | ||
Department of Revenue and the recipient shall promptly | ||
repay to
the
Department of Revenue any wrongfully exempted | ||
Illinois State income taxes.
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(b) The Director may elect to waive enforcement of any | ||
contractual provision
arising out of
the development | ||
assistance agreement required by this Act based on a finding
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that the waiver is
necessary to avert an imminent and | ||
demonstrable hardship to the
recipient that may
result in such | ||
recipient's insolvency or discharge of workers.
If a waiver is
| ||
granted, the recipient must agree to a contractual | ||
modification, including
recapture provisions,
to the
|
development assistance
agreement.
The existence of
any waiver
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granted pursuant to this subsection (c), the date of the | ||
granting of such
waiver, and a brief
summary of the reasons | ||
supporting the granting of such waiver shall be
disclosed
| ||
consistent with
the provisions of Section 25 of this Act.
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(c) Beginning June 1, 2004, the Department shall annually | ||
compile a report
on the
outcomes and effectiveness of recapture | ||
provisions by program, including but
not limited
to: (i) the | ||
total number of companies that receive development assistance | ||
as
defined in
this Act; (ii) the total number of recipients in | ||
violation of development
agreements with
the Department; (iii) | ||
the total number of completed recapture efforts; (iv) the
total
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number of recapture efforts initiated; and (v) the number of | ||
waivers granted.
This report
shall be disclosed consistent with | ||
the provisions of Section 20 of this Act.
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(d) For the purposes of this Act, recapture provisions do | ||
not include the
Illinois
Department of Transportation Economic | ||
Development Program, any grants under the
Industrial Training | ||
Program that are not given as an incentive to a
recipient | ||
business organization,
or any successor programs as described | ||
in the term "development assistance" in
Section 5
of this Act.
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(Source: P.A. 93-552, eff. 8-20-03.)
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Section 10. The Illinois Income Tax Act is amended by | ||
changing Section 201 as follows: |
(35 ILCS 5/201) (from Ch. 120, par. 2-201) | ||
Sec. 201. Tax Imposed. | ||
(a) In general. A tax measured by net income is hereby | ||
imposed on every
individual, corporation, trust and estate for | ||
each taxable year ending
after July 31, 1969 on the privilege | ||
of earning or receiving income in or
as a resident of this | ||
State. Such tax shall be in addition to all other
occupation or | ||
privilege taxes imposed by this State or by any municipal
| ||
corporation or political subdivision thereof. | ||
(b) Rates. The tax imposed by subsection (a) of this | ||
Section shall be
determined as follows, except as adjusted by | ||
subsection (d-1): | ||
(1) In the case of an individual, trust or estate, for | ||
taxable years
ending prior to July 1, 1989, an amount equal | ||
to 2 1/2% of the taxpayer's
net income for the taxable | ||
year. | ||
(2) In the case of an individual, trust or estate, for | ||
taxable years
beginning prior to July 1, 1989 and ending | ||
after June 30, 1989, an amount
equal to the sum of (i) 2 | ||
1/2% of the taxpayer's net income for the period
prior to | ||
July 1, 1989, as calculated under Section 202.3, and (ii) | ||
3% of the
taxpayer's net income for the period after June | ||
30, 1989, as calculated
under Section 202.3. | ||
(3) In the case of an individual, trust or estate, for | ||
taxable years
beginning after June 30, 1989, and ending | ||
prior to January 1, 2011, an amount equal to 3% of the |
taxpayer's net
income for the taxable year. | ||
(4) In the case of an individual, trust, or estate, for | ||
taxable years beginning prior to January 1, 2011, and | ||
ending after December 31, 2010, an amount equal to the sum | ||
of (i) 3% of the taxpayer's net income for the period prior | ||
to January 1, 2011, as calculated under Section 202.5, and | ||
(ii) 5% of the taxpayer's net income for the period after | ||
December 31, 2010, as calculated under Section 202.5. | ||
(5) In the case of an individual, trust, or estate, for | ||
taxable years beginning on or after January 1, 2011, and | ||
ending prior to January 1, 2015, an amount equal to 5% of | ||
the taxpayer's net income for the taxable year. | ||
(5.1) In the case of an individual, trust, or estate, | ||
for taxable years beginning prior to January 1, 2015, and | ||
ending after December 31, 2014, an amount equal to the sum | ||
of (i) 5% of the taxpayer's net income for the period prior | ||
to January 1, 2015, as calculated under Section 202.5, and | ||
(ii) 3.75% of the taxpayer's net income for the period | ||
after December 31, 2014, as calculated under Section 202.5. | ||
(5.2) In the case of an individual, trust, or estate, | ||
for taxable years beginning on or after January 1, 2015, | ||
and ending prior to January 1, 2025, an amount equal to | ||
3.75% of the taxpayer's net income for the taxable year. | ||
(5.3) In the case of an individual, trust, or estate, | ||
for taxable years beginning prior to January 1, 2025, and | ||
ending after December 31, 2024, an amount equal to the sum |
of (i) 3.75% of the taxpayer's net income for the period | ||
prior to January 1, 2025, as calculated under Section | ||
202.5, and (ii) 3.25% of the taxpayer's net income for the | ||
period after December 31, 2024, as calculated under Section | ||
202.5. | ||
(5.4) In the case of an individual, trust, or estate, | ||
for taxable years beginning on or after January 1, 2025, an | ||
amount equal to 3.25% of the taxpayer's net income for the | ||
taxable year. | ||
(6) In the case of a corporation, for taxable years
| ||
ending prior to July 1, 1989, an amount equal to 4% of the
| ||
taxpayer's net income for the taxable year. | ||
(7) In the case of a corporation, for taxable years | ||
beginning prior to
July 1, 1989 and ending after June 30, | ||
1989, an amount equal to the sum of
(i) 4% of the | ||
taxpayer's net income for the period prior to July 1, 1989,
| ||
as calculated under Section 202.3, and (ii) 4.8% of the | ||
taxpayer's net
income for the period after June 30, 1989, | ||
as calculated under Section
202.3. | ||
(8) In the case of a corporation, for taxable years | ||
beginning after
June 30, 1989, and ending prior to January | ||
1, 2011, an amount equal to 4.8% of the taxpayer's net | ||
income for the
taxable year. | ||
(9) In the case of a corporation, for taxable years | ||
beginning prior to January 1, 2011, and ending after | ||
December 31, 2010, an amount equal to the sum of (i) 4.8% |
of the taxpayer's net income for the period prior to | ||
January 1, 2011, as calculated under Section 202.5, and | ||
(ii) 7% of the taxpayer's net income for the period after | ||
December 31, 2010, as calculated under Section 202.5. | ||
(10) In the case of a corporation, for taxable years | ||
beginning on or after January 1, 2011, and ending prior to | ||
January 1, 2015, an amount equal to 7% of the taxpayer's | ||
net income for the taxable year. | ||
(11) In the case of a corporation, for taxable years | ||
beginning prior to January 1, 2015, and ending after | ||
December 31, 2014, an amount equal to the sum of (i) 7% of | ||
the taxpayer's net income for the period prior to January | ||
1, 2015, as calculated under Section 202.5, and (ii) 5.25% | ||
of the taxpayer's net income for the period after December | ||
31, 2014, as calculated under Section 202.5. | ||
(12) In the case of a corporation, for taxable years | ||
beginning on or after January 1, 2015, and ending prior to | ||
January 1, 2025, an amount equal to 5.25% of the taxpayer's | ||
net income for the taxable year. | ||
(13) In the case of a corporation, for taxable years | ||
beginning prior to January 1, 2025, and ending after | ||
December 31, 2024, an amount equal to the sum of (i) 5.25% | ||
of the taxpayer's net income for the period prior to | ||
January 1, 2025, as calculated under Section 202.5, and | ||
(ii) 4.8% of the taxpayer's net income for the period after | ||
December 31, 2024, as calculated under Section 202.5. |
(14) In the case of a corporation, for taxable years | ||
beginning on or after January 1, 2025, an amount equal to | ||
4.8% of the taxpayer's net income for the taxable year. | ||
The rates under this subsection (b) are subject to the | ||
provisions of Section 201.5. | ||
(c) Personal Property Tax Replacement Income Tax.
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Beginning on July 1, 1979 and thereafter, in addition to such | ||
income
tax, there is also hereby imposed the Personal Property | ||
Tax Replacement
Income Tax measured by net income on every | ||
corporation (including Subchapter
S corporations), partnership | ||
and trust, for each taxable year ending after
June 30, 1979. | ||
Such taxes are imposed on the privilege of earning or
receiving | ||
income in or as a resident of this State. The Personal Property
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Tax Replacement Income Tax shall be in addition to the income | ||
tax imposed
by subsections (a) and (b) of this Section and in | ||
addition to all other
occupation or privilege taxes imposed by | ||
this State or by any municipal
corporation or political | ||
subdivision thereof. | ||
(d) Additional Personal Property Tax Replacement Income | ||
Tax Rates.
The personal property tax replacement income tax | ||
imposed by this subsection
and subsection (c) of this Section | ||
in the case of a corporation, other
than a Subchapter S | ||
corporation and except as adjusted by subsection (d-1),
shall | ||
be an additional amount equal to
2.85% of such taxpayer's net | ||
income for the taxable year, except that
beginning on January | ||
1, 1981, and thereafter, the rate of 2.85% specified
in this |
subsection shall be reduced to 2.5%, and in the case of a
| ||
partnership, trust or a Subchapter S corporation shall be an | ||
additional
amount equal to 1.5% of such taxpayer's net income | ||
for the taxable year. | ||
(d-1) Rate reduction for certain foreign insurers. In the | ||
case of a
foreign insurer, as defined by Section 35A-5 of the | ||
Illinois Insurance Code,
whose state or country of domicile | ||
imposes on insurers domiciled in Illinois
a retaliatory tax | ||
(excluding any insurer
whose premiums from reinsurance assumed | ||
are 50% or more of its total insurance
premiums as determined | ||
under paragraph (2) of subsection (b) of Section 304,
except | ||
that for purposes of this determination premiums from | ||
reinsurance do
not include premiums from inter-affiliate | ||
reinsurance arrangements),
beginning with taxable years ending | ||
on or after December 31, 1999,
the sum of
the rates of tax | ||
imposed by subsections (b) and (d) shall be reduced (but not
| ||
increased) to the rate at which the total amount of tax imposed | ||
under this Act,
net of all credits allowed under this Act, | ||
shall equal (i) the total amount of
tax that would be imposed | ||
on the foreign insurer's net income allocable to
Illinois for | ||
the taxable year by such foreign insurer's state or country of
| ||
domicile if that net income were subject to all income taxes | ||
and taxes
measured by net income imposed by such foreign | ||
insurer's state or country of
domicile, net of all credits | ||
allowed or (ii) a rate of zero if no such tax is
imposed on such | ||
income by the foreign insurer's state of domicile.
For the |
purposes of this subsection (d-1), an inter-affiliate includes | ||
a
mutual insurer under common management. | ||
(1) For the purposes of subsection (d-1), in no event | ||
shall the sum of the
rates of tax imposed by subsections | ||
(b) and (d) be reduced below the rate at
which the sum of: | ||
(A) the total amount of tax imposed on such foreign | ||
insurer under
this Act for a taxable year, net of all | ||
credits allowed under this Act, plus | ||
(B) the privilege tax imposed by Section 409 of the | ||
Illinois Insurance
Code, the fire insurance company | ||
tax imposed by Section 12 of the Fire
Investigation | ||
Act, and the fire department taxes imposed under | ||
Section 11-10-1
of the Illinois Municipal Code, | ||
equals 1.25% for taxable years ending prior to December 31, | ||
2003, or
1.75% for taxable years ending on or after | ||
December 31, 2003, of the net
taxable premiums written for | ||
the taxable year,
as described by subsection (1) of Section | ||
409 of the Illinois Insurance Code.
This paragraph will in | ||
no event increase the rates imposed under subsections
(b) | ||
and (d). | ||
(2) Any reduction in the rates of tax imposed by this | ||
subsection shall be
applied first against the rates imposed | ||
by subsection (b) and only after the
tax imposed by | ||
subsection (a) net of all credits allowed under this | ||
Section
other than the credit allowed under subsection (i) | ||
has been reduced to zero,
against the rates imposed by |
subsection (d). | ||
This subsection (d-1) is exempt from the provisions of | ||
Section 250. | ||
(e) Investment credit. A taxpayer shall be allowed a credit
| ||
against the Personal Property Tax Replacement Income Tax for
| ||
investment in qualified property. | ||
(1) A taxpayer shall be allowed a credit equal to .5% | ||
of
the basis of qualified property placed in service during | ||
the taxable year,
provided such property is placed in | ||
service on or after
July 1, 1984. There shall be allowed an | ||
additional credit equal
to .5% of the basis of qualified | ||
property placed in service during the
taxable year, | ||
provided such property is placed in service on or
after | ||
July 1, 1986, and the taxpayer's base employment
within | ||
Illinois has increased by 1% or more over the preceding | ||
year as
determined by the taxpayer's employment records | ||
filed with the
Illinois Department of Employment Security. | ||
Taxpayers who are new to
Illinois shall be deemed to have | ||
met the 1% growth in base employment for
the first year in | ||
which they file employment records with the Illinois
| ||
Department of Employment Security. The provisions added to | ||
this Section by
Public Act 85-1200 (and restored by Public | ||
Act 87-895) shall be
construed as declaratory of existing | ||
law and not as a new enactment. If,
in any year, the | ||
increase in base employment within Illinois over the
| ||
preceding year is less than 1%, the additional credit shall |
be limited to that
percentage times a fraction, the | ||
numerator of which is .5% and the denominator
of which is | ||
1%, but shall not exceed .5%. The investment credit shall | ||
not be
allowed to the extent that it would reduce a | ||
taxpayer's liability in any tax
year below zero, nor may | ||
any credit for qualified property be allowed for any
year | ||
other than the year in which the property was placed in | ||
service in
Illinois. For tax years ending on or after | ||
December 31, 1987, and on or
before December 31, 1988, the | ||
credit shall be allowed for the tax year in
which the | ||
property is placed in service, or, if the amount of the | ||
credit
exceeds the tax liability for that year, whether it | ||
exceeds the original
liability or the liability as later | ||
amended, such excess may be carried
forward and applied to | ||
the tax liability of the 5 taxable years following
the | ||
excess credit years if the taxpayer (i) makes investments | ||
which cause
the creation of a minimum of 2,000 full-time | ||
equivalent jobs in Illinois,
(ii) is located in an | ||
enterprise zone established pursuant to the Illinois
| ||
Enterprise Zone Act and (iii) is certified by the | ||
Department of Commerce
and Community Affairs (now | ||
Department of Commerce and Economic Opportunity) as | ||
complying with the requirements specified in
clause (i) and | ||
(ii) by July 1, 1986. The Department of Commerce and
| ||
Community Affairs (now Department of Commerce and Economic | ||
Opportunity) shall notify the Department of Revenue of all |
such
certifications immediately. For tax years ending | ||
after December 31, 1988,
the credit shall be allowed for | ||
the tax year in which the property is
placed in service, | ||
or, if the amount of the credit exceeds the tax
liability | ||
for that year, whether it exceeds the original liability or | ||
the
liability as later amended, such excess may be carried | ||
forward and applied
to the tax liability of the 5 taxable | ||
years following the excess credit
years. The credit shall | ||
be applied to the earliest year for which there is
a | ||
liability. If there is credit from more than one tax year | ||
that is
available to offset a liability, earlier credit | ||
shall be applied first. | ||
(2) The term "qualified property" means property | ||
which: | ||
(A) is tangible, whether new or used, including | ||
buildings and structural
components of buildings and | ||
signs that are real property, but not including
land or | ||
improvements to real property that are not a structural | ||
component of a
building such as landscaping, sewer | ||
lines, local access roads, fencing, parking
lots, and | ||
other appurtenances; | ||
(B) is depreciable pursuant to Section 167 of the | ||
Internal Revenue Code,
except that "3-year property" | ||
as defined in Section 168(c)(2)(A) of that
Code is not | ||
eligible for the credit provided by this subsection | ||
(e); |
(C) is acquired by purchase as defined in Section | ||
179(d) of
the Internal Revenue Code; | ||
(D) is used in Illinois by a taxpayer who is | ||
primarily engaged in
manufacturing, or in mining coal | ||
or fluorite, or in retailing, or was placed in service | ||
on or after July 1, 2006 in a River Edge Redevelopment | ||
Zone established pursuant to the River Edge | ||
Redevelopment Zone Act; and | ||
(E) has not previously been used in Illinois in | ||
such a manner and by
such a person as would qualify for | ||
the credit provided by this subsection
(e) or | ||
subsection (f). | ||
(3) For purposes of this subsection (e), | ||
"manufacturing" means
the material staging and production | ||
of tangible personal property by
procedures commonly | ||
regarded as manufacturing, processing, fabrication, or
| ||
assembling which changes some existing material into new | ||
shapes, new
qualities, or new combinations. For purposes of | ||
this subsection
(e) the term "mining" shall have the same | ||
meaning as the term "mining" in
Section 613(c) of the | ||
Internal Revenue Code. For purposes of this subsection
(e), | ||
the term "retailing" means the sale of tangible personal | ||
property for use or consumption and not for resale, or
| ||
services rendered in conjunction with the sale of tangible | ||
personal property for use or consumption and not for | ||
resale. For purposes of this subsection (e), "tangible |
personal property" has the same meaning as when that term | ||
is used in the Retailers' Occupation Tax Act, and, for | ||
taxable years ending after December 31, 2008, does not | ||
include the generation, transmission, or distribution of | ||
electricity. | ||
(4) The basis of qualified property shall be the basis
| ||
used to compute the depreciation deduction for federal | ||
income tax purposes. | ||
(5) If the basis of the property for federal income tax | ||
depreciation
purposes is increased after it has been placed | ||
in service in Illinois by
the taxpayer, the amount of such | ||
increase shall be deemed property placed
in service on the | ||
date of such increase in basis. | ||
(6) The term "placed in service" shall have the same
| ||
meaning as under Section 46 of the Internal Revenue Code. | ||
(7) If during any taxable year, any property ceases to
| ||
be qualified property in the hands of the taxpayer within | ||
48 months after
being placed in service, or the situs of | ||
any qualified property is
moved outside Illinois within 48 | ||
months after being placed in service, the
Personal Property | ||
Tax Replacement Income Tax for such taxable year shall be
| ||
increased. Such increase shall be determined by (i) | ||
recomputing the
investment credit which would have been | ||
allowed for the year in which
credit for such property was | ||
originally allowed by eliminating such
property from such | ||
computation and, (ii) subtracting such recomputed credit
|
from the amount of credit previously allowed. For the | ||
purposes of this
paragraph (7), a reduction of the basis of | ||
qualified property resulting
from a redetermination of the | ||
purchase price shall be deemed a disposition
of qualified | ||
property to the extent of such reduction. | ||
(8) Unless the investment credit is extended by law, | ||
the
basis of qualified property shall not include costs | ||
incurred after
December 31, 2013, except for costs incurred | ||
pursuant to a binding
contract entered into on or before | ||
December 31, 2013. | ||
(9) Each taxable year ending before December 31, 2000, | ||
a partnership may
elect to pass through to its
partners the | ||
credits to which the partnership is entitled under this | ||
subsection
(e) for the taxable year. A partner may use the | ||
credit allocated to him or her
under this paragraph only | ||
against the tax imposed in subsections (c) and (d) of
this | ||
Section. If the partnership makes that election, those | ||
credits shall be
allocated among the partners in the | ||
partnership in accordance with the rules
set forth in | ||
Section 704(b) of the Internal Revenue Code, and the rules
| ||
promulgated under that Section, and the allocated amount of | ||
the credits shall
be allowed to the partners for that | ||
taxable year. The partnership shall make
this election on | ||
its Personal Property Tax Replacement Income Tax return for
| ||
that taxable year. The election to pass through the credits | ||
shall be
irrevocable. |
For taxable years ending on or after December 31, 2000, | ||
a
partner that qualifies its
partnership for a subtraction | ||
under subparagraph (I) of paragraph (2) of
subsection (d) | ||
of Section 203 or a shareholder that qualifies a Subchapter | ||
S
corporation for a subtraction under subparagraph (S) of | ||
paragraph (2) of
subsection (b) of Section 203 shall be | ||
allowed a credit under this subsection
(e) equal to its | ||
share of the credit earned under this subsection (e) during
| ||
the taxable year by the partnership or Subchapter S | ||
corporation, determined in
accordance with the | ||
determination of income and distributive share of
income | ||
under Sections 702 and 704 and Subchapter S of the Internal | ||
Revenue
Code. This paragraph is exempt from the provisions | ||
of Section 250. | ||
(f) Investment credit; Enterprise Zone; River Edge | ||
Redevelopment Zone. | ||
(1) A taxpayer shall be allowed a credit against the | ||
tax imposed
by subsections (a) and (b) of this Section for | ||
investment in qualified
property which is placed in service | ||
in an Enterprise Zone created
pursuant to the Illinois | ||
Enterprise Zone Act or, for property placed in service on | ||
or after July 1, 2006, a River Edge Redevelopment Zone | ||
established pursuant to the River Edge Redevelopment Zone | ||
Act. For partners, shareholders
of Subchapter S | ||
corporations, and owners of limited liability companies,
| ||
if the liability company is treated as a partnership for |
purposes of
federal and State income taxation, there shall | ||
be allowed a credit under
this subsection (f) to be | ||
determined in accordance with the determination
of income | ||
and distributive share of income under Sections 702 and 704 | ||
and
Subchapter S of the Internal Revenue Code. The credit | ||
shall be .5% of the
basis for such property. The credit | ||
shall be available only in the taxable
year in which the | ||
property is placed in service in the Enterprise Zone or | ||
River Edge Redevelopment Zone and
shall not be allowed to | ||
the extent that it would reduce a taxpayer's
liability for | ||
the tax imposed by subsections (a) and (b) of this Section | ||
to
below zero. For tax years ending on or after December | ||
31, 1985, the credit
shall be allowed for the tax year in | ||
which the property is placed in
service, or, if the amount | ||
of the credit exceeds the tax liability for that
year, | ||
whether it exceeds the original liability or the liability | ||
as later
amended, such excess may be carried forward and | ||
applied to the tax
liability of the 5 taxable years | ||
following the excess credit year.
The credit shall be | ||
applied to the earliest year for which there is a
| ||
liability. If there is credit from more than one tax year | ||
that is available
to offset a liability, the credit | ||
accruing first in time shall be applied
first. | ||
(2) The term qualified property means property which: | ||
(A) is tangible, whether new or used, including | ||
buildings and
structural components of buildings; |
(B) is depreciable pursuant to Section 167 of the | ||
Internal Revenue
Code, except that "3-year property" | ||
as defined in Section 168(c)(2)(A) of
that Code is not | ||
eligible for the credit provided by this subsection | ||
(f); | ||
(C) is acquired by purchase as defined in Section | ||
179(d) of
the Internal Revenue Code; | ||
(D) is used in the Enterprise Zone or River Edge | ||
Redevelopment Zone by the taxpayer; and | ||
(E) has not been previously used in Illinois in | ||
such a manner and by
such a person as would qualify for | ||
the credit provided by this subsection
(f) or | ||
subsection (e). | ||
(3) The basis of qualified property shall be the basis | ||
used to compute
the depreciation deduction for federal | ||
income tax purposes. | ||
(4) If the basis of the property for federal income tax | ||
depreciation
purposes is increased after it has been placed | ||
in service in the Enterprise
Zone or River Edge | ||
Redevelopment Zone by the taxpayer, the amount of such | ||
increase shall be deemed property
placed in service on the | ||
date of such increase in basis. | ||
(5) The term "placed in service" shall have the same | ||
meaning as under
Section 46 of the Internal Revenue Code. | ||
(6) If during any taxable year, any property ceases to | ||
be qualified
property in the hands of the taxpayer within |
48 months after being placed
in service, or the situs of | ||
any qualified property is moved outside the
Enterprise Zone | ||
or River Edge Redevelopment Zone within 48 months after | ||
being placed in service, the tax
imposed under subsections | ||
(a) and (b) of this Section for such taxable year
shall be | ||
increased. Such increase shall be determined by (i) | ||
recomputing
the investment credit which would have been | ||
allowed for the year in which
credit for such property was | ||
originally allowed by eliminating such
property from such | ||
computation, and (ii) subtracting such recomputed credit
| ||
from the amount of credit previously allowed. For the | ||
purposes of this
paragraph (6), a reduction of the basis of | ||
qualified property resulting
from a redetermination of the | ||
purchase price shall be deemed a disposition
of qualified | ||
property to the extent of such reduction. | ||
(7) There shall be allowed an additional credit equal | ||
to 0.5% of the basis of qualified property placed in | ||
service during the taxable year in a River Edge | ||
Redevelopment Zone, provided such property is placed in | ||
service on or after July 1, 2006, and the taxpayer's base | ||
employment within Illinois has increased by 1% or more over | ||
the preceding year as determined by the taxpayer's | ||
employment records filed with the Illinois Department of | ||
Employment Security. Taxpayers who are new to Illinois | ||
shall be deemed to have met the 1% growth in base | ||
employment for the first year in which they file employment |
records with the Illinois Department of Employment | ||
Security. If, in any year, the increase in base employment | ||
within Illinois over the preceding year is less than 1%, | ||
the additional credit shall be limited to that percentage | ||
times a fraction, the numerator of which is 0.5% and the | ||
denominator of which is 1%, but shall not exceed 0.5%.
| ||
(g) Jobs Tax Credit; Enterprise Zone, River Edge | ||
Redevelopment Zone, and Foreign Trade Zone or Sub-Zone. | ||
(1) A taxpayer conducting a trade or business in an | ||
enterprise zone
or a High Impact Business designated by the | ||
Department of Commerce and
Economic Opportunity or for | ||
taxable years ending on or after December 31, 2006, in a | ||
River Edge Redevelopment Zone conducting a trade or | ||
business in a federally designated
Foreign Trade Zone or | ||
Sub-Zone shall be allowed a credit against the tax
imposed | ||
by subsections (a) and (b) of this Section in the amount of | ||
$500
per eligible employee hired to work in the zone during | ||
the taxable year. | ||
(2) To qualify for the credit: | ||
(A) the taxpayer must hire 5 or more eligible | ||
employees to work in an
enterprise zone, River Edge | ||
Redevelopment Zone, or federally designated Foreign | ||
Trade Zone or Sub-Zone
during the taxable year; | ||
(B) the taxpayer's total employment within the | ||
enterprise zone, River Edge Redevelopment Zone, or
| ||
federally designated Foreign Trade Zone or Sub-Zone |
must
increase by 5 or more full-time employees beyond | ||
the total employed in that
zone at the end of the | ||
previous tax year for which a jobs tax
credit under | ||
this Section was taken, or beyond the total employed by | ||
the
taxpayer as of December 31, 1985, whichever is | ||
later; and | ||
(C) the eligible employees must be employed 180 | ||
consecutive days in
order to be deemed hired for | ||
purposes of this subsection. | ||
(3) An "eligible employee" means an employee who is: | ||
(A) Certified by the Department of Commerce and | ||
Economic Opportunity
as "eligible for services" | ||
pursuant to regulations promulgated in
accordance with | ||
Title II of the Job Training Partnership Act, Training
| ||
Services for the Disadvantaged or Title III of the Job | ||
Training Partnership
Act, Employment and Training | ||
Assistance for Dislocated Workers Program. | ||
(B) Hired after the enterprise zone, River Edge | ||
Redevelopment Zone, or federally designated Foreign
| ||
Trade Zone or Sub-Zone was designated or the trade or
| ||
business was located in that zone, whichever is later. | ||
(C) Employed in the enterprise zone, River Edge | ||
Redevelopment Zone, or Foreign Trade Zone or
Sub-Zone. | ||
An employee is employed in an
enterprise zone or | ||
federally designated Foreign Trade Zone or Sub-Zone
if | ||
his services are rendered there or it is the base of
|
operations for the services performed. | ||
(D) A full-time employee working 30 or more hours | ||
per week. | ||
(4) For tax years ending on or after December 31, 1985 | ||
and prior to
December 31, 1988, the credit shall be allowed | ||
for the tax year in which
the eligible employees are hired. | ||
For tax years ending on or after
December 31, 1988, the | ||
credit shall be allowed for the tax year immediately
| ||
following the tax year in which the eligible employees are | ||
hired. If the
amount of the credit exceeds the tax | ||
liability for that year, whether it
exceeds the original | ||
liability or the liability as later amended, such
excess | ||
may be carried forward and applied to the tax liability of | ||
the 5
taxable years following the excess credit year. The | ||
credit shall be
applied to the earliest year for which | ||
there is a liability. If there is
credit from more than one | ||
tax year that is available to offset a liability,
earlier | ||
credit shall be applied first. | ||
(5) The Department of Revenue shall promulgate such | ||
rules and regulations
as may be deemed necessary to carry | ||
out the purposes of this subsection (g). | ||
(6) The credit shall be available for eligible | ||
employees hired on or
after January 1, 1986. | ||
(h) Investment credit; High Impact Business. | ||
(1) Subject to subsections (b) and (b-5) of Section
5.5 | ||
of the Illinois Enterprise Zone Act, a taxpayer shall be |
allowed a credit
against the tax imposed by subsections (a) | ||
and (b) of this Section for
investment in qualified
| ||
property which is placed in service by a Department of | ||
Commerce and Economic Opportunity
designated High Impact | ||
Business. The credit shall be .5% of the basis
for such | ||
property. The credit shall not be available (i) until the | ||
minimum
investments in qualified property set forth in | ||
subdivision (a)(3)(A) of
Section 5.5 of the Illinois
| ||
Enterprise Zone Act have been satisfied
or (ii) until the | ||
time authorized in subsection (b-5) of the Illinois
| ||
Enterprise Zone Act for entities designated as High Impact | ||
Businesses under
subdivisions (a)(3)(B), (a)(3)(C), and | ||
(a)(3)(D) of Section 5.5 of the Illinois
Enterprise Zone | ||
Act, and shall not be allowed to the extent that it would
| ||
reduce a taxpayer's liability for the tax imposed by | ||
subsections (a) and (b) of
this Section to below zero. The | ||
credit applicable to such investments shall be
taken in the | ||
taxable year in which such investments have been completed. | ||
The
credit for additional investments beyond the minimum | ||
investment by a designated
high impact business authorized | ||
under subdivision (a)(3)(A) of Section 5.5 of
the Illinois | ||
Enterprise Zone Act shall be available only in the taxable | ||
year in
which the property is placed in service and shall | ||
not be allowed to the extent
that it would reduce a | ||
taxpayer's liability for the tax imposed by subsections
(a) | ||
and (b) of this Section to below zero.
For tax years ending |
on or after December 31, 1987, the credit shall be
allowed | ||
for the tax year in which the property is placed in | ||
service, or, if
the amount of the credit exceeds the tax | ||
liability for that year, whether
it exceeds the original | ||
liability or the liability as later amended, such
excess | ||
may be carried forward and applied to the tax liability of | ||
the 5
taxable years following the excess credit year. The | ||
credit shall be
applied to the earliest year for which | ||
there is a liability. If there is
credit from more than one | ||
tax year that is available to offset a liability,
the | ||
credit accruing first in time shall be applied first. | ||
Changes made in this subdivision (h)(1) by Public Act | ||
88-670
restore changes made by Public Act 85-1182 and | ||
reflect existing law. | ||
(2) The term qualified property means property which: | ||
(A) is tangible, whether new or used, including | ||
buildings and
structural components of buildings; | ||
(B) is depreciable pursuant to Section 167 of the | ||
Internal Revenue
Code, except that "3-year property" | ||
as defined in Section 168(c)(2)(A) of
that Code is not | ||
eligible for the credit provided by this subsection | ||
(h); | ||
(C) is acquired by purchase as defined in Section | ||
179(d) of the
Internal Revenue Code; and | ||
(D) is not eligible for the Enterprise Zone | ||
Investment Credit provided
by subsection (f) of this |
Section. | ||
(3) The basis of qualified property shall be the basis | ||
used to compute
the depreciation deduction for federal | ||
income tax purposes. | ||
(4) If the basis of the property for federal income tax | ||
depreciation
purposes is increased after it has been placed | ||
in service in a federally
designated Foreign Trade Zone or | ||
Sub-Zone located in Illinois by the taxpayer,
the amount of | ||
such increase shall be deemed property placed in service on
| ||
the date of such increase in basis. | ||
(5) The term "placed in service" shall have the same | ||
meaning as under
Section 46 of the Internal Revenue Code. | ||
(6) If during any taxable year ending on or before | ||
December 31, 1996,
any property ceases to be qualified
| ||
property in the hands of the taxpayer within 48 months | ||
after being placed
in service, or the situs of any | ||
qualified property is moved outside
Illinois within 48 | ||
months after being placed in service, the tax imposed
under | ||
subsections (a) and (b) of this Section for such taxable | ||
year shall
be increased. Such increase shall be determined | ||
by (i) recomputing the
investment credit which would have | ||
been allowed for the year in which
credit for such property | ||
was originally allowed by eliminating such
property from | ||
such computation, and (ii) subtracting such recomputed | ||
credit
from the amount of credit previously allowed. For | ||
the purposes of this
paragraph (6), a reduction of the |
basis of qualified property resulting
from a | ||
redetermination of the purchase price shall be deemed a | ||
disposition
of qualified property to the extent of such | ||
reduction. | ||
(7) Beginning with tax years ending after December 31, | ||
1996, if a
taxpayer qualifies for the credit under this | ||
subsection (h) and thereby is
granted a tax abatement and | ||
the taxpayer relocates its entire facility in
violation of | ||
the explicit terms and length of the contract under Section
| ||
18-183 of the Property Tax Code, the tax imposed under | ||
subsections
(a) and (b) of this Section shall be increased | ||
for the taxable year
in which the taxpayer relocated its | ||
facility by an amount equal to the
amount of credit | ||
received by the taxpayer under this subsection (h). | ||
(i) Credit for Personal Property Tax Replacement Income | ||
Tax.
For tax years ending prior to December 31, 2003, a credit | ||
shall be allowed
against the tax imposed by
subsections (a) and | ||
(b) of this Section for the tax imposed by subsections (c)
and | ||
(d) of this Section. This credit shall be computed by | ||
multiplying the tax
imposed by subsections (c) and (d) of this | ||
Section by a fraction, the numerator
of which is base income | ||
allocable to Illinois and the denominator of which is
Illinois | ||
base income, and further multiplying the product by the tax | ||
rate
imposed by subsections (a) and (b) of this Section. | ||
Any credit earned on or after December 31, 1986 under
this | ||
subsection which is unused in the year
the credit is computed |
because it exceeds the tax liability imposed by
subsections (a) | ||
and (b) for that year (whether it exceeds the original
| ||
liability or the liability as later amended) may be carried | ||
forward and
applied to the tax liability imposed by subsections | ||
(a) and (b) of the 5
taxable years following the excess credit | ||
year, provided that no credit may
be carried forward to any | ||
year ending on or
after December 31, 2003. This credit shall be
| ||
applied first to the earliest year for which there is a | ||
liability. If
there is a credit under this subsection from more | ||
than one tax year that is
available to offset a liability the | ||
earliest credit arising under this
subsection shall be applied | ||
first. | ||
If, during any taxable year ending on or after December 31, | ||
1986, the
tax imposed by subsections (c) and (d) of this | ||
Section for which a taxpayer
has claimed a credit under this | ||
subsection (i) is reduced, the amount of
credit for such tax | ||
shall also be reduced. Such reduction shall be
determined by | ||
recomputing the credit to take into account the reduced tax
| ||
imposed by subsections (c) and (d). If any portion of the
| ||
reduced amount of credit has been carried to a different | ||
taxable year, an
amended return shall be filed for such taxable | ||
year to reduce the amount of
credit claimed. | ||
(j) Training expense credit. Beginning with tax years | ||
ending on or
after December 31, 1986 and prior to December 31, | ||
2003, a taxpayer shall be
allowed a credit against the
tax | ||
imposed by subsections (a) and (b) under this Section
for all |
amounts paid or accrued, on behalf of all persons
employed by | ||
the taxpayer in Illinois or Illinois residents employed
outside | ||
of Illinois by a taxpayer, for educational or vocational | ||
training in
semi-technical or technical fields or semi-skilled | ||
or skilled fields, which
were deducted from gross income in the | ||
computation of taxable income. The
credit against the tax | ||
imposed by subsections (a) and (b) shall be 1.6% of
such | ||
training expenses. For partners, shareholders of subchapter S
| ||
corporations, and owners of limited liability companies, if the | ||
liability
company is treated as a partnership for purposes of | ||
federal and State income
taxation, there shall be allowed a | ||
credit under this subsection (j) to be
determined in accordance | ||
with the determination of income and distributive
share of | ||
income under Sections 702 and 704 and subchapter S of the | ||
Internal
Revenue Code. | ||
Any credit allowed under this subsection which is unused in | ||
the year
the credit is earned may be carried forward to each of | ||
the 5 taxable
years following the year for which the credit is | ||
first computed until it is
used. This credit shall be applied | ||
first to the earliest year for which
there is a liability. If | ||
there is a credit under this subsection from more
than one tax | ||
year that is available to offset a liability the earliest
| ||
credit arising under this subsection shall be applied first. No | ||
carryforward
credit may be claimed in any tax year ending on or | ||
after
December 31, 2003. | ||
(k) Research and development credit. |
For tax years ending after July 1, 1990 and prior to
| ||
December 31, 2003, and beginning again for tax years ending on | ||
or after December 31, 2004, and ending prior to January 1, | ||
2011, a taxpayer shall be
allowed a credit against the tax | ||
imposed by subsections (a) and (b) of this
Section for | ||
increasing research activities in this State. The credit
| ||
allowed against the tax imposed by subsections (a) and (b) | ||
shall be equal
to 6 1/2% of the qualifying expenditures for | ||
increasing research activities
in this State. For partners, | ||
shareholders of subchapter S corporations, and
owners of | ||
limited liability companies, if the liability company is | ||
treated as a
partnership for purposes of federal and State | ||
income taxation, there shall be
allowed a credit under this | ||
subsection to be determined in accordance with the
| ||
determination of income and distributive share of income under | ||
Sections 702 and
704 and subchapter S of the Internal Revenue | ||
Code. | ||
For purposes of this subsection, "qualifying expenditures" | ||
means the
qualifying expenditures as defined for the federal | ||
credit for increasing
research activities which would be | ||
allowable under Section 41 of the
Internal Revenue Code and | ||
which are conducted in this State, "qualifying
expenditures for | ||
increasing research activities in this State" means the
excess | ||
of qualifying expenditures for the taxable year in which | ||
incurred
over qualifying expenditures for the base period, | ||
"qualifying expenditures
for the base period" means the average |
of the qualifying expenditures for
each year in the base | ||
period, and "base period" means the 3 taxable years
immediately | ||
preceding the taxable year for which the determination is
being | ||
made. | ||
Any credit in excess of the tax liability for the taxable | ||
year
may be carried forward. A taxpayer may elect to have the
| ||
unused credit shown on its final completed return carried over | ||
as a credit
against the tax liability for the following 5 | ||
taxable years or until it has
been fully used, whichever occurs | ||
first; provided that no credit earned in a tax year ending | ||
prior to December 31, 2003 may be carried forward to any year | ||
ending on or after December 31, 2003, and no credit may be | ||
carried forward to any taxable year ending on or after January | ||
1, 2011. | ||
If an unused credit is carried forward to a given year from | ||
2 or more
earlier years, that credit arising in the earliest | ||
year will be applied
first against the tax liability for the | ||
given year. If a tax liability for
the given year still | ||
remains, the credit from the next earliest year will
then be | ||
applied, and so on, until all credits have been used or no tax
| ||
liability for the given year remains. Any remaining unused | ||
credit or
credits then will be carried forward to the next | ||
following year in which a
tax liability is incurred, except | ||
that no credit can be carried forward to
a year which is more | ||
than 5 years after the year in which the expense for
which the | ||
credit is given was incurred. |
No inference shall be drawn from this amendatory Act of the | ||
91st General
Assembly in construing this Section for taxable | ||
years beginning before January
1, 1999. | ||
(l) Environmental Remediation Tax Credit. | ||
(i) For tax years ending after December 31, 1997 and on | ||
or before
December 31, 2001, a taxpayer shall be allowed a | ||
credit against the tax
imposed by subsections (a) and (b) | ||
of this Section for certain amounts paid
for unreimbursed | ||
eligible remediation costs, as specified in this | ||
subsection.
For purposes of this Section, "unreimbursed | ||
eligible remediation costs" means
costs approved by the | ||
Illinois Environmental Protection Agency ("Agency") under
| ||
Section 58.14 of the Environmental Protection Act that were | ||
paid in performing
environmental remediation at a site for | ||
which a No Further Remediation Letter
was issued by the | ||
Agency and recorded under Section 58.10 of the | ||
Environmental
Protection Act. The credit must be claimed | ||
for the taxable year in which
Agency approval of the | ||
eligible remediation costs is granted. The credit is
not | ||
available to any taxpayer if the taxpayer or any related | ||
party caused or
contributed to, in any material respect, a | ||
release of regulated substances on,
in, or under the site | ||
that was identified and addressed by the remedial
action | ||
pursuant to the Site Remediation Program of the | ||
Environmental Protection
Act. After the Pollution Control | ||
Board rules are adopted pursuant to the
Illinois |
Administrative Procedure Act for the administration and | ||
enforcement of
Section 58.9 of the Environmental | ||
Protection Act, determinations as to credit
availability | ||
for purposes of this Section shall be made consistent with | ||
those
rules. For purposes of this Section, "taxpayer" | ||
includes a person whose tax
attributes the taxpayer has | ||
succeeded to under Section 381 of the Internal
Revenue Code | ||
and "related party" includes the persons disallowed a | ||
deduction
for losses by paragraphs (b), (c), and (f)(1) of | ||
Section 267 of the Internal
Revenue Code by virtue of being | ||
a related taxpayer, as well as any of its
partners. The | ||
credit allowed against the tax imposed by subsections (a) | ||
and
(b) shall be equal to 25% of the unreimbursed eligible | ||
remediation costs in
excess of $100,000 per site, except | ||
that the $100,000 threshold shall not apply
to any site | ||
contained in an enterprise zone as determined by the | ||
Department of
Commerce and Community Affairs (now | ||
Department of Commerce and Economic Opportunity). The | ||
total credit allowed shall not exceed
$40,000 per year with | ||
a maximum total of $150,000 per site. For partners and
| ||
shareholders of subchapter S corporations, there shall be | ||
allowed a credit
under this subsection to be determined in | ||
accordance with the determination of
income and | ||
distributive share of income under Sections 702 and 704 and
| ||
subchapter S of the Internal Revenue Code. | ||
(ii) A credit allowed under this subsection that is |
unused in the year
the credit is earned may be carried | ||
forward to each of the 5 taxable years
following the year | ||
for which the credit is first earned until it is used.
The | ||
term "unused credit" does not include any amounts of | ||
unreimbursed eligible
remediation costs in excess of the | ||
maximum credit per site authorized under
paragraph (i). | ||
This credit shall be applied first to the earliest year
for | ||
which there is a liability. If there is a credit under this | ||
subsection
from more than one tax year that is available to | ||
offset a liability, the
earliest credit arising under this | ||
subsection shall be applied first. A
credit allowed under | ||
this subsection may be sold to a buyer as part of a sale
of | ||
all or part of the remediation site for which the credit | ||
was granted. The
purchaser of a remediation site and the | ||
tax credit shall succeed to the unused
credit and remaining | ||
carry-forward period of the seller. To perfect the
| ||
transfer, the assignor shall record the transfer in the | ||
chain of title for the
site and provide written notice to | ||
the Director of the Illinois Department of
Revenue of the | ||
assignor's intent to sell the remediation site and the | ||
amount of
the tax credit to be transferred as a portion of | ||
the sale. In no event may a
credit be transferred to any | ||
taxpayer if the taxpayer or a related party would
not be | ||
eligible under the provisions of subsection (i). | ||
(iii) For purposes of this Section, the term "site" | ||
shall have the same
meaning as under Section 58.2 of the |
Environmental Protection Act. | ||
(m) Education expense credit. Beginning with tax years | ||
ending after
December 31, 1999, a taxpayer who
is the custodian | ||
of one or more qualifying pupils shall be allowed a credit
| ||
against the tax imposed by subsections (a) and (b) of this | ||
Section for
qualified education expenses incurred on behalf of | ||
the qualifying pupils.
The credit shall be equal to 25% of | ||
qualified education expenses, but in no
event may the total | ||
credit under this subsection claimed by a
family that is the
| ||
custodian of qualifying pupils exceed $500. In no event shall a | ||
credit under
this subsection reduce the taxpayer's liability | ||
under this Act to less than
zero. This subsection is exempt | ||
from the provisions of Section 250 of this
Act. | ||
For purposes of this subsection: | ||
"Qualifying pupils" means individuals who (i) are | ||
residents of the State of
Illinois, (ii) are under the age of | ||
21 at the close of the school year for
which a credit is | ||
sought, and (iii) during the school year for which a credit
is | ||
sought were full-time pupils enrolled in a kindergarten through | ||
twelfth
grade education program at any school, as defined in | ||
this subsection. | ||
"Qualified education expense" means the amount incurred
on | ||
behalf of a qualifying pupil in excess of $250 for tuition, | ||
book fees, and
lab fees at the school in which the pupil is | ||
enrolled during the regular school
year. | ||
"School" means any public or nonpublic elementary or |
secondary school in
Illinois that is in compliance with Title | ||
VI of the Civil Rights Act of 1964
and attendance at which | ||
satisfies the requirements of Section 26-1 of the
School Code, | ||
except that nothing shall be construed to require a child to
| ||
attend any particular public or nonpublic school to qualify for | ||
the credit
under this Section. | ||
"Custodian" means, with respect to qualifying pupils, an | ||
Illinois resident
who is a parent, the parents, a legal | ||
guardian, or the legal guardians of the
qualifying pupils. | ||
(n) River Edge Redevelopment Zone site remediation tax | ||
credit.
| ||
(i) For tax years ending on or after December 31, 2006, | ||
a taxpayer shall be allowed a credit against the tax | ||
imposed by subsections (a) and (b) of this Section for | ||
certain amounts paid for unreimbursed eligible remediation | ||
costs, as specified in this subsection. For purposes of | ||
this Section, "unreimbursed eligible remediation costs" | ||
means costs approved by the Illinois Environmental | ||
Protection Agency ("Agency") under Section 58.14a of the | ||
Environmental Protection Act that were paid in performing | ||
environmental remediation at a site within a River Edge | ||
Redevelopment Zone for which a No Further Remediation | ||
Letter was issued by the Agency and recorded under Section | ||
58.10 of the Environmental Protection Act. The credit must | ||
be claimed for the taxable year in which Agency approval of | ||
the eligible remediation costs is granted. The credit is |
not available to any taxpayer if the taxpayer or any | ||
related party caused or contributed to, in any material | ||
respect, a release of regulated substances on, in, or under | ||
the site that was identified and addressed by the remedial | ||
action pursuant to the Site Remediation Program of the | ||
Environmental Protection Act. Determinations as to credit | ||
availability for purposes of this Section shall be made | ||
consistent with rules adopted by the Pollution Control | ||
Board pursuant to the Illinois Administrative Procedure | ||
Act for the administration and enforcement of Section 58.9 | ||
of the Environmental Protection Act. For purposes of this | ||
Section, "taxpayer" includes a person whose tax attributes | ||
the taxpayer has succeeded to under Section 381 of the | ||
Internal Revenue Code and "related party" includes the | ||
persons disallowed a deduction for losses by paragraphs | ||
(b), (c), and (f)(1) of Section 267 of the Internal Revenue | ||
Code by virtue of being a related taxpayer, as well as any | ||
of its partners. The credit allowed against the tax imposed | ||
by subsections (a) and (b) shall be equal to 25% of the | ||
unreimbursed eligible remediation costs in excess of | ||
$100,000 per site. | ||
(ii) A credit allowed under this subsection that is | ||
unused in the year the credit is earned may be carried | ||
forward to each of the 5 taxable years following the year | ||
for which the credit is first earned until it is used. This | ||
credit shall be applied first to the earliest year for |
which there is a liability. If there is a credit under this | ||
subsection from more than one tax year that is available to | ||
offset a liability, the earliest credit arising under this | ||
subsection shall be applied first. A credit allowed under | ||
this subsection may be sold to a buyer as part of a sale of | ||
all or part of the remediation site for which the credit | ||
was granted. The purchaser of a remediation site and the | ||
tax credit shall succeed to the unused credit and remaining | ||
carry-forward period of the seller. To perfect the | ||
transfer, the assignor shall record the transfer in the | ||
chain of title for the site and provide written notice to | ||
the Director of the Illinois Department of Revenue of the | ||
assignor's intent to sell the remediation site and the | ||
amount of the tax credit to be transferred as a portion of | ||
the sale. In no event may a credit be transferred to any | ||
taxpayer if the taxpayer or a related party would not be | ||
eligible under the provisions of subsection (i). | ||
(iii) For purposes of this Section, the term "site" | ||
shall have the same meaning as under Section 58.2 of the | ||
Environmental Protection Act. | ||
(iv) This subsection is exempt from the provisions of | ||
Section 250.
| ||
(Source: P.A. 95-454, eff. 8-27-07; 96-115, eff. 7-31-09; | ||
96-116, eff. 7-31-09; 96-937, eff. 6-23-10; 96-1000, eff. | ||
7-2-10; 96-1496, eff. 1-13-11.) |
Section 15. The Economic Development for a Growing Economy | ||
Tax Credit Act is amended by changing Sections 5-15 and 5-50 | ||
and by adding Section 5-77 as follows: | ||
(35 ILCS 10/5-15) | ||
Sec. 5-15. Tax Credit Awards. Subject to the conditions set | ||
forth in this
Act, a Taxpayer is
entitled to a Credit against | ||
or, as described in subsection (g) of this Section, a payment | ||
towards taxes imposed pursuant to subsections (a) and (b)
of | ||
Section 201 of the Illinois
Income Tax Act that may be imposed | ||
on the Taxpayer for a taxable year beginning
on or
after | ||
January 1, 1999,
if the Taxpayer is awarded a Credit by the | ||
Department under this Act for that
taxable year. | ||
(a) The Department shall make Credit awards under this Act | ||
to foster job
creation and retention in Illinois. | ||
(b) A person that proposes a project to create new jobs in | ||
Illinois must
enter into an Agreement with the
Department for | ||
the Credit under this Act. | ||
(c) The Credit shall be claimed for the taxable years | ||
specified in the
Agreement. | ||
(d) The Credit shall not exceed the Incremental Income Tax | ||
attributable to
the project that is the subject of the | ||
Agreement. | ||
(e) Nothing herein shall prohibit a Tax Credit Award to an | ||
Applicant that uses a PEO if all other award criteria are | ||
satisfied.
|
(f) In lieu of the Credit allowed under this Act against | ||
the taxes imposed pursuant to subsections (a) and (b) of | ||
Section 201 of the Illinois Income Tax Act for any taxable year | ||
ending on or after December 31, 2009, the Taxpayer may elect to | ||
claim the Credit against its obligation to pay over withholding | ||
under Section 704A of the Illinois Income Tax Act. | ||
(1) The election under this subsection (f) may be made | ||
only by a Taxpayer that (i) is primarily engaged in one of | ||
the following business activities: water purification and | ||
treatment, motor vehicle metal stamping, automobile | ||
manufacturing, automobile and light duty motor vehicle | ||
manufacturing, motor vehicle manufacturing, light truck | ||
and utility vehicle manufacturing, heavy duty truck | ||
manufacturing, or motor vehicle body manufacturing , cable | ||
television infrastructure design or manufacturing, or | ||
wireless telecommunication or computing terminal device | ||
design or manufacturing for use on public networks and (ii) | ||
meets the following criteria: | ||
(A) the Taxpayer (i) had an Illinois net loss or an | ||
Illinois net loss deduction under Section 207 of the | ||
Illinois Income Tax Act for the taxable year in which | ||
the Credit is awarded, (ii) employed a minimum of 1,000 | ||
full-time employees in this State during the taxable | ||
year in which the Credit is awarded, (iii) has an | ||
Agreement under this Act on December 14, 2009 (the | ||
effective date of Public Act 96-834), and (iv) is in |
compliance with all provisions of that Agreement; | ||
(B) the Taxpayer (i) had an Illinois net loss or an | ||
Illinois net loss deduction under Section 207 of the | ||
Illinois Income Tax Act for the taxable year in which | ||
the Credit is awarded, (ii) employed a minimum of 1,000 | ||
full-time employees in this State during the taxable | ||
year in which the Credit is awarded, and (iii) has | ||
applied for an Agreement within 365 days after December | ||
14, 2009 (the effective date of Public Act 96-834); | ||
(C) the Taxpayer (i) had an Illinois net operating | ||
loss carryforward under Section 207 of the Illinois | ||
Income Tax Act in a taxable year ending during calendar | ||
year 2008, (ii) has applied for an Agreement within 150 | ||
days after the effective date of this amendatory Act of | ||
the 96th General Assembly, (iii) creates at least 400 | ||
new jobs in Illinois, (iv) retains at least 2,000 jobs | ||
in Illinois that would have been at risk of relocation | ||
out of Illinois over a 10-year period, and (v) makes a | ||
capital investment of at least $75,000,000; or | ||
(D) the Taxpayer (i) had an Illinois net operating | ||
loss carryforward under Section 207 of the Illinois | ||
Income Tax Act in a taxable year ending during calendar | ||
year 2009, (ii) has applied for an Agreement within 150 | ||
days after the effective date of this amendatory Act of | ||
the 96th General Assembly, (iii) creates at least 150 | ||
new jobs, (iv) retains at least 1,000 jobs in Illinois |
that would have been at risk of relocation out of | ||
Illinois over a 10-year period, and (v) makes a capital | ||
investment of at least $57,000,000 ; or . | ||
(E) the Taxpayer (i) employed at least 2,500 | ||
full-time employees in the State during the year in | ||
which the Credit is awarded, (ii) commits to make at | ||
least $500,000,000 in combined capital improvements | ||
and project costs under the Agreement, (iii) applies | ||
for an Agreement between January 1, 2011 and June 30, | ||
2011, (iv) executes an Agreement for the Credit during | ||
calendar year 2011, and (v) was incorporated no more | ||
than 5 years before the filing of an application for an | ||
Agreement. | ||
(1.5) The election under this subsection (f) may also | ||
be made by a Taxpayer for any Credit awarded pursuant to an | ||
agreement that was executed between January 1, 2011 and | ||
June 30, 2011, if the Taxpayer (i) is primarily engaged in | ||
the manufacture of inner tubes or tires, or both, from | ||
natural and synthetic rubber, (ii) employs a minimum of | ||
2,400 full-time employees in Illinois at the time of | ||
application, (iii) creates at least 350 full-time jobs and | ||
retains at least 250 full-time jobs in Illinois that would | ||
have been at risk of being created or retained outside of | ||
Illinois, and (iv) makes a capital investment of at least | ||
$200,000,000 at the project location. | ||
(2) An election under this subsection shall allow the |
credit to be taken against payments otherwise due under | ||
Section 704A of the Illinois Income Tax Act during the | ||
first calendar year beginning after the end of the taxable | ||
year in which the credit is awarded under this Act. | ||
(3) The election shall be made in the form and manner | ||
required by the Illinois Department of Revenue and, once | ||
made, shall be irrevocable. | ||
(4) If a Taxpayer who meets the requirements of | ||
subparagraph (A) of paragraph (1) of this subsection (f) | ||
elects to claim the Credit against its withholdings as | ||
provided in this subsection (f), then, on and after the | ||
date of the election, the terms of the Agreement between | ||
the Taxpayer and the Department may not be further amended | ||
during the term of the Agreement. | ||
(g) A pass-through entity that has been awarded a credit | ||
under this Act, its shareholders, or its partners may treat | ||
some or all of the credit awarded pursuant to this Act as a tax | ||
payment for purposes of the Illinois Income Tax Act. The term | ||
"tax payment" means a payment as described in Article 6 or | ||
Article 8 of the Illinois Income Tax Act or a composite payment | ||
made by a pass-through entity on behalf of any of its | ||
shareholders or partners to satisfy such shareholders' or | ||
partners' taxes imposed pursuant to subsections (a) and (b) of | ||
Section 201 of the Illinois Income Tax Act. In no event shall | ||
the amount of the award credited pursuant to this Act exceed | ||
the Illinois income tax liability of the pass-through entity or |
its shareholders or partners for the taxable year. | ||
(Source: P.A. 95-375, eff. 8-23-07; 96-834, eff. 12-14-09; | ||
96-836, eff. 12-16-09; 96-905, eff. 6-4-10; 96-1000, eff. | ||
7-2-10; 96-1534, eff. 3-4-11.)
| ||
(35 ILCS 10/5-50)
| ||
Sec. 5-50. Contents of Agreements with Applicants. The | ||
Department shall
enter into an Agreement with an
Applicant that | ||
is awarded a Credit under this Act. The Agreement
must include | ||
all of the following:
| ||
(1) A detailed description of the project that is the | ||
subject of the
Agreement, including the location and amount | ||
of the investment and jobs created
or retained.
| ||
(2) The duration of the Credit and the first taxable | ||
year for which
the Credit may be claimed.
| ||
(3) The Credit amount that will be allowed for each | ||
taxable year.
| ||
(4) A requirement that the Taxpayer shall maintain | ||
operations at the
project location that shall be stated as | ||
a minimum number of years not to
exceed 10.
| ||
(5) A specific method for determining the number of New | ||
Employees
employed during a taxable year.
| ||
(6) A requirement that the Taxpayer shall annually | ||
report to the
Department the number of New Employees,
the | ||
Incremental Income Tax
withheld in connection with the New | ||
Employees, and any other
information the Director needs to |
perform the Director's duties under
this Act.
| ||
(7) A requirement that the Director is authorized to | ||
verify with the
appropriate State agencies the amounts | ||
reported under paragraph
(6), and after doing so shall | ||
issue a certificate to the Taxpayer
stating that the | ||
amounts have been verified.
| ||
(8) A requirement that the Taxpayer shall provide | ||
written
notification to the Director not more than 30
days | ||
after the Taxpayer makes or receives a proposal that would
| ||
transfer the Taxpayer's State tax liability obligations to | ||
a
successor Taxpayer.
| ||
(9) A detailed description of the number of New | ||
Employees to be
hired, and the occupation and
payroll of | ||
the full-time jobs to be created or retained as a result of | ||
the
project.
| ||
(10) The minimum investment the business enterprise | ||
will make in
capital improvements, the time period
for | ||
placing the property in service, and the designated | ||
location in Illinois
for the investment.
| ||
(11) A requirement that the Taxpayer shall provide | ||
written
notification to the Director and
the Committee not | ||
more than 30 days after the Taxpayer determines
that the | ||
minimum
job creation or retention, employment payroll, or | ||
investment no longer is being
or will be achieved or
| ||
maintained as set forth in the terms and conditions of the
| ||
Agreement.
|
(12) A provision that, if the total number of New | ||
Employees falls
below a specified level, the
allowance of | ||
Credit shall be suspended until the number of New
Employees | ||
equals or exceeds
the Agreement amount.
| ||
(13) A detailed description of the items for which the | ||
costs incurred by
the Taxpayer will be included
in the | ||
limitation on the Credit provided in Section 5-30.
| ||
(13.5) A provision that, if the Taxpayer never meets | ||
either the investment or job creation and retention | ||
requirements specified in the Agreement during the entire | ||
5-year period beginning on the first day of the first | ||
taxable year in which the Agreement is executed and ending | ||
on the last day of the fifth taxable year after the | ||
Agreement is executed, then the Agreement is automatically | ||
terminated on the last day of the fifth taxable year after | ||
the Agreement is executed and the Taxpayer is not entitled | ||
to the award of any credits for any of that 5-year period.
| ||
(14) Any other performance conditions or contract | ||
provisions as the
Department determines are
appropriate.
| ||
(Source: P.A. 91-476, eff. 8-11-99.)
| ||
(35 ILCS 10/5-77 new) | ||
Sec. 5-77. Sunset of new Agreements. The Department shall | ||
not enter into any new Agreements under the provisions of | ||
Section 5-50 of this Act after December 31, 2016. |
Section 20. The Film
Production Services Tax Credit Act of | ||
2008 is amended by adding Section 42 as follows: | ||
(35 ILCS 16/42 new) | ||
Sec. 42. Sunset of credits. The application of credits | ||
awarded pursuant to this Act shall be limited by a reasonable | ||
and appropriate sunset date. A taxpayer shall not be entitled | ||
to take a credit awarded pursuant to this Act for tax years | ||
beginning on or after 5 years after the effective date of this | ||
amendatory Act of the 97th General Assembly.
| ||
Section 99. Effective date. This Act takes effect upon | ||
becoming law. |