Bill Text: IL HB3237 | 2021-2022 | 102nd General Assembly | Introduced
Bill Title: Amends the Illinois Income Tax Act. Provides that the credit for expenditures incurred in the restoration and preservation of a qualified historic structure located in a River Edge Redevelopment Zone applies for taxable years ending prior to January 1, 2027 (currently January 1, 2022). Effective immediately.
Spectrum: Slight Partisan Bill (Democrat 8-3)
Status: (Introduced - Dead) 2021-03-27 - Rule 19(a) / Re-referred to Rules Committee [HB3237 Detail]
Download: Illinois-2021-HB3237-Introduced.html
| |||||||||||||||||||||||||
| |||||||||||||||||||||||||
| |||||||||||||||||||||||||
| |||||||||||||||||||||||||
| |||||||||||||||||||||||||
1 | AN ACT concerning revenue.
| ||||||||||||||||||||||||
2 | Be it enacted by the People of the State of Illinois,
| ||||||||||||||||||||||||
3 | represented in the General Assembly:
| ||||||||||||||||||||||||
4 | Section 5. The Illinois Income Tax Act is amended by | ||||||||||||||||||||||||
5 | changing Section 221 as follows:
| ||||||||||||||||||||||||
6 | (35 ILCS 5/221) | ||||||||||||||||||||||||
7 | Sec. 221. Rehabilitation costs; qualified historic | ||||||||||||||||||||||||
8 | properties; River Edge Redevelopment Zone. | ||||||||||||||||||||||||
9 | (a) For taxable years that begin on or after January 1, | ||||||||||||||||||||||||
10 | 2012 and begin prior to January 1, 2018, there shall be allowed | ||||||||||||||||||||||||
11 | a tax credit against the tax imposed by subsections (a) and (b) | ||||||||||||||||||||||||
12 | of Section 201 of this Act in an amount equal to 25% of | ||||||||||||||||||||||||
13 | qualified expenditures incurred by a qualified taxpayer during | ||||||||||||||||||||||||
14 | the taxable year in the restoration and preservation of a | ||||||||||||||||||||||||
15 | qualified historic structure located in a River Edge | ||||||||||||||||||||||||
16 | Redevelopment Zone pursuant to a qualified rehabilitation | ||||||||||||||||||||||||
17 | plan, provided that the total amount of such expenditures (i) | ||||||||||||||||||||||||
18 | must equal $5,000 or more and (ii) must exceed 50% of the | ||||||||||||||||||||||||
19 | purchase price of the property. | ||||||||||||||||||||||||
20 | (a-1) For taxable years that begin on or after January 1, | ||||||||||||||||||||||||
21 | 2018 and end prior to January 1, 2027 January 1, 2022 , there | ||||||||||||||||||||||||
22 | shall be allowed a tax credit against the tax imposed by | ||||||||||||||||||||||||
23 | subsections (a) and (b) of Section 201 of this Act in an |
| |||||||
| |||||||
1 | aggregate amount equal to 25% of qualified expenditures | ||||||
2 | incurred by a qualified taxpayer in the restoration and | ||||||
3 | preservation of a qualified historic structure located in a | ||||||
4 | River Edge Redevelopment Zone pursuant to a qualified | ||||||
5 | rehabilitation plan, provided that the total amount of such | ||||||
6 | expenditures must (i) equal $5,000 or more and (ii) exceed the | ||||||
7 | adjusted basis of the qualified historic structure on the | ||||||
8 | first day the qualified rehabilitation plan begins. For any | ||||||
9 | rehabilitation project, regardless of duration or number of | ||||||
10 | phases, the project's compliance with the foregoing provisions | ||||||
11 | (i) and (ii) shall be determined based on the aggregate amount | ||||||
12 | of qualified expenditures for the entire project and may | ||||||
13 | include expenditures incurred under subsection (a), this | ||||||
14 | subsection, or both subsection (a) and this subsection. If the | ||||||
15 | qualified rehabilitation plan spans multiple years, the | ||||||
16 | aggregate credit for the entire project shall be allowed in | ||||||
17 | the last taxable year, except for phased rehabilitation | ||||||
18 | projects, which may receive credits upon completion of each | ||||||
19 | phase. Before obtaining the first phased credit: (A) the total | ||||||
20 | amount of such expenditures must meet the requirements of | ||||||
21 | provisions (i) and (ii) of this subsection; (B) the | ||||||
22 | rehabilitated portion of the qualified historic structure must | ||||||
23 | be placed in service; and (C) the requirements of subsection | ||||||
24 | (b) must be met. | ||||||
25 | (a-2) For taxable years beginning on or after January 1, | ||||||
26 | 2021 and ending prior to January 1, 2022, there shall be |
| |||||||
| |||||||
1 | allowed a tax credit against the tax imposed by subsections | ||||||
2 | (a) and (b) of Section 201 as provided in Section 10-10.3 of | ||||||
3 | the River Edge Redevelopment Zone Act. The credit allowed | ||||||
4 | under this subsection (a-2) shall apply only to taxpayers that | ||||||
5 | make a capital investment of at least $1,000,000 in a | ||||||
6 | qualified rehabilitation plan. | ||||||
7 | The credit or credits may not reduce the taxpayer's | ||||||
8 | liability to less than zero. If the amount of the credit or | ||||||
9 | credits exceeds the taxpayer's liability, the excess may be | ||||||
10 | carried forward and applied against the taxpayer's liability | ||||||
11 | in succeeding calendar years in the manner provided under | ||||||
12 | paragraph (4) of Section 211 of this Act. The credit or credits | ||||||
13 | shall be applied to the earliest year for which there is a tax | ||||||
14 | liability. If there are credits from more than one taxable | ||||||
15 | year that are available to offset a liability, the earlier | ||||||
16 | credit shall be applied first. | ||||||
17 | For partners, shareholders of Subchapter S corporations, | ||||||
18 | and owners of limited liability companies, if the liability | ||||||
19 | company is treated as a partnership for the purposes of | ||||||
20 | federal and State income taxation, there shall be allowed a | ||||||
21 | credit under this Section to be determined in accordance with | ||||||
22 | the determination of income and distributive share of income | ||||||
23 | under Sections 702 and 704 and Subchapter S of the Internal | ||||||
24 | Revenue Code. | ||||||
25 | The total aggregate amount of credits awarded under the | ||||||
26 | Blue Collar Jobs Act (Article 20 of this amendatory Act of the |
| |||||||
| |||||||
1 | 101st General Assembly) shall not exceed $20,000,000 in any | ||||||
2 | State fiscal year. | ||||||
3 | (b) To obtain a tax credit pursuant to this Section, the | ||||||
4 | taxpayer must apply with the Department of Natural Resources. | ||||||
5 | The Department of Natural Resources shall determine the amount | ||||||
6 | of eligible rehabilitation costs and expenses in addition to | ||||||
7 | the amount of the River Edge construction jobs credit within | ||||||
8 | 45 days of receipt of a complete application. The taxpayer | ||||||
9 | must submit a certification of costs prepared by an | ||||||
10 | independent certified public accountant that certifies (i) the | ||||||
11 | project expenses, (ii) whether those expenses are qualified | ||||||
12 | expenditures, and (iii) that the qualified expenditures exceed | ||||||
13 | the adjusted basis of the qualified historic structure on the | ||||||
14 | first day the qualified rehabilitation plan commenced. The | ||||||
15 | Department of Natural Resources is authorized, but not | ||||||
16 | required, to accept this certification of costs to determine | ||||||
17 | the amount of qualified expenditures and the amount of the | ||||||
18 | credit. The Department of Natural Resources shall provide | ||||||
19 | guidance as to the minimum standards to be followed in the | ||||||
20 | preparation of such certification. The Department of Natural | ||||||
21 | Resources and the National Park Service shall determine | ||||||
22 | whether the rehabilitation is consistent with the United | ||||||
23 | States Secretary of the Interior's Standards for | ||||||
24 | Rehabilitation. | ||||||
25 | (b-1) Upon completion of the project and approval of the | ||||||
26 | complete application, the Department of Natural Resources |
| |||||||
| |||||||
1 | shall issue a single certificate in the amount of the eligible | ||||||
2 | credits equal to 25% of qualified expenditures incurred during | ||||||
3 | the eligible taxable years, as defined in subsections (a) and | ||||||
4 | (a-1), excepting any credits awarded under subsection (a) | ||||||
5 | prior to January 1, 2019 (the effective date of Public Act | ||||||
6 | 100-629) and any phased credits issued prior to the eligible | ||||||
7 | taxable year under subsection (a-1). At the time the | ||||||
8 | certificate is issued, an issuance fee up to the maximum | ||||||
9 | amount of 2% of the amount of the credits issued by the | ||||||
10 | certificate may be collected from the applicant to administer | ||||||
11 | the provisions of this Section. If collected, this issuance | ||||||
12 | fee shall be deposited into the Historic Property | ||||||
13 | Administrative Fund, a special fund created in the State | ||||||
14 | treasury. Subject to appropriation, moneys in the Historic | ||||||
15 | Property Administrative Fund shall be provided to the | ||||||
16 | Department of Natural Resources as reimbursement for the costs | ||||||
17 | associated with administering this Section. | ||||||
18 | (c) The taxpayer must attach the certificate to the tax | ||||||
19 | return on which the credits are to be claimed. The tax credit | ||||||
20 | under this Section may not reduce the taxpayer's liability to | ||||||
21 | less than
zero. If the amount of the credit exceeds the tax | ||||||
22 | liability for the year, the excess credit may be carried | ||||||
23 | forward and applied to the tax liability of the 5 taxable years | ||||||
24 | following the excess credit year. | ||||||
25 | (c-1) Subject to appropriation, moneys in the Historic | ||||||
26 | Property Administrative Fund shall be used, on a biennial |
| |||||||
| |||||||
1 | basis beginning at the end of the second fiscal year after | ||||||
2 | January 1, 2019 (the effective date of Public Act 100-629), to | ||||||
3 | hire a qualified third party to prepare a biennial report to | ||||||
4 | assess the overall economic impact to the State from the | ||||||
5 | qualified rehabilitation projects under this Section completed | ||||||
6 | in that year and in previous years. The overall economic | ||||||
7 | impact shall include at least: (1) the direct and indirect or | ||||||
8 | induced economic impacts of completed projects; (2) temporary, | ||||||
9 | permanent, and construction jobs created; (3) sales, income, | ||||||
10 | and property tax generation before, during construction, and | ||||||
11 | after completion; and (4) indirect neighborhood impact after | ||||||
12 | completion. The report shall be submitted to the Governor and | ||||||
13 | the General Assembly. The report to the General Assembly shall | ||||||
14 | be filed with the Clerk of the House of Representatives and the | ||||||
15 | Secretary of the Senate in electronic form only, in the manner | ||||||
16 | that the Clerk and the Secretary shall direct. | ||||||
17 | (c-2) The Department of Natural Resources may adopt rules | ||||||
18 | to implement this Section in addition to the rules expressly | ||||||
19 | authorized in this Section. | ||||||
20 | (d) As used in this Section, the following terms have the | ||||||
21 | following meanings. | ||||||
22 | "Phased rehabilitation" means a project that is completed | ||||||
23 | in phases, as defined under Section 47 of the federal Internal | ||||||
24 | Revenue Code and pursuant to National Park Service regulations | ||||||
25 | at 36 C.F.R. 67. | ||||||
26 | "Placed in service" means the date when the property is |
| |||||||
| |||||||
1 | placed in a condition or state of readiness and availability | ||||||
2 | for a specifically assigned function as defined under Section | ||||||
3 | 47 of the federal Internal Revenue Code and federal Treasury | ||||||
4 | Regulation Sections 1.46 and 1.48. | ||||||
5 | "Qualified expenditure" means all the costs and expenses | ||||||
6 | defined as qualified rehabilitation expenditures under Section | ||||||
7 | 47 of the federal Internal Revenue Code that were incurred in | ||||||
8 | connection with a qualified historic structure. | ||||||
9 | "Qualified historic structure" means a certified historic | ||||||
10 | structure as defined under Section 47(c)(3) of the federal | ||||||
11 | Internal Revenue Code. | ||||||
12 | "Qualified rehabilitation plan" means a project that is | ||||||
13 | approved by the Department of Natural Resources and the | ||||||
14 | National Park Service as being consistent with the United | ||||||
15 | States Secretary of the Interior's Standards for | ||||||
16 | Rehabilitation. | ||||||
17 | "Qualified taxpayer" means the owner of the qualified | ||||||
18 | historic structure or any other person who qualifies for the | ||||||
19 | federal rehabilitation credit allowed by Section 47 of the | ||||||
20 | federal Internal Revenue Code with respect to that qualified | ||||||
21 | historic structure. Partners, shareholders of subchapter S | ||||||
22 | corporations, and owners of limited liability companies (if | ||||||
23 | the limited liability company is treated as a partnership for | ||||||
24 | purposes of federal and State income taxation) are entitled to | ||||||
25 | a credit under this Section to be determined in accordance | ||||||
26 | with the determination of income and distributive share of |
| |||||||
| |||||||
1 | income under Sections 702 and 703 and subchapter S of the | ||||||
2 | Internal Revenue Code, provided that credits granted to a | ||||||
3 | partnership, a limited liability company taxed as a | ||||||
4 | partnership, or other multiple owners of property shall be | ||||||
5 | passed through to the partners, members, or owners | ||||||
6 | respectively on a pro rata basis or pursuant to an executed | ||||||
7 | agreement among the partners, members, or owners documenting | ||||||
8 | any alternate distribution method.
| ||||||
9 | (Source: P.A. 100-236, eff. 8-18-17; 100-629, eff. 1-1-19; | ||||||
10 | 100-695, eff. 8-3-18; 101-9, eff. 6-5-19; 101-81, eff. | ||||||
11 | 7-12-19.)
| ||||||
12 | Section 99. Effective date. This Act takes effect upon | ||||||
13 | becoming law.
|