Bill Text: IL HB4545 | 2015-2016 | 99th General Assembly | Introduced

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Bill Title: Creates the Manufacturing Job Destination Tax Credit Act and amends the Illinois Income Tax Act. Provides for a credit of 25% of the Illinois labor expenditures made by a manufacturing company in order to foster job creation and retention in Illinois. Authorizes the Department of Revenue to award a tax credit to taxpayer-employers who apply for the credit and meet the certain Illinois labor expenditure requirements. Sets minimum requirements and procedures for certifying a taxpayer as an "accredited manufacturer" and for awarding the credit. Effective January 1, 2017.

Spectrum: Partisan Bill (Republican 1-0)

Status: (Introduced - Dead) 2016-01-27 - Referred to Rules Committee [HB4545 Detail]

Download: Illinois-2015-HB4545-Introduced.html

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99TH GENERAL ASSEMBLY State of Illinois 2015 and 2016 HB4545 Introduced , by Rep. David Reis SYNOPSIS AS INTRODUCED:
New Act
35 ILCS 5/224 new
Creates the Manufacturing Job Destination Tax Credit Act and amends the Illinois Income Tax Act. Provides for a credit of 25% of the Illinois labor expenditures made by a manufacturing company in order to foster job creation and retention in Illinois. Authorizes the Department of Revenue to award a tax credit to taxpayer-employers who apply for the credit and meet the certain Illinois labor expenditure requirements. Sets minimum requirements and procedures for certifying a taxpayer as an "accredited manufacturer" and for awarding the credit. Effective January 1, 2017.
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FISCAL NOTE ACT MAY APPLY
A BILL FOR
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AN ACT concerning revenue.
Be it enacted by the People of the State of Illinois,
represented in the General Assembly:
Section 5. Short title. This Act may be cited as the
Manufacturing Job Destination Tax Credit Act.
Section 10. Purpose. The General Assembly finds that the
manufacturing sector is a crucial underpinning of the economy
of the State of Illinois. Therefore, it is in the best interest
of the State of Illinois to make Illinois the preferred
destination for manufacturing and to strengthen the existing
industrial base in Illinois, thereby promoting job growth, an
expedited economic recovery, and long-term revenue growth for
the State.
Section 15. Definitions. As used in this Act:
"Accredited manufacturer" means a manufacturer that has
been certified by the Department.
"Credit" means an amount equal to 25% of qualifying
Illinois labor expenditures approved by the Department. The
accredited manufacturer is deemed to have paid, on its balance
due day for the year, an amount equal to 25% of its qualified
Illinois labor expenditure for the tax year.
"Department" means the Department of Revenue.

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"Director" means the Director of Revenue.
"Illinois labor expenditure" means salary or wages paid to
employees of an accredited manufacturer for services in
Illinois after the effective date of this Act.
To qualify as an Illinois labor expenditure, the
expenditure must be:
(1) Reasonable under the circumstances.
(2) Included in the federal income tax basis of the
property.
(3) Incurred by the accredited manufacturer for
services on or after January 1, 2008.
(4) Incurred for the production stages of the
manufacturing process.
(5) Limited to the first $25,000 of wages paid or
incurred to each employee of the manufacturing company.
(6) Exclusive of the salary or wages paid to or
incurred for the 2 highest paid employees of the
manufacturing company.
(7) Directly attributable to the accredited
manufacturer.
(8) Paid in the tax year for which the applicant is
claiming the credit or no later than 60 days after the end
of the tax year.
(9) Paid for services rendered in Illinois.
Section 20. Tax credit awards. Subject to the conditions

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set forth in this Act, an accredited manufacturer is entitled
to a credit of 25% of all qualifying Illinois labor
expenditures approved by the Department.
Section 25. Accredited manufacturing company
certification. Any taxpayer may request certification as an
accredited manufacturing company by formal application to the
Department. In determining whether to issue an accredited
manufacturing company certificate, the Department must
determine that the following conditions exist:
(1) The taxpayer is engaged primarily in the business
of manufacturing goods.
(2) The taxpayer intends to employ workers in the State
of Illinois.
(3) The taxpayer provides health insurance to its
employees.
(4) The taxpayer provides to its employees either a
pension plan or a 401k plan.
(5) The taxpayer offers to its employees elder care
benefits and a dependent care flexible spending account.
(6) The taxpayer intends to expend a portion of its
research and development budgets in the State of Illinois.
Section 30. Issuance of manufacturing job destination tax
credit certification.
(a) In order to qualify for a tax credit under this Act, an

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accredited manufacturer must file, on forms prescribed by the
Department, all information necessary to calculate the tax
credit.
(b) Upon satisfactory review of the application, the
Department shall issue a manufacturing job destination tax
credit certificate stating the amount of the tax credit.
Section 35. Amount and duration of the credit. The amount
of the credit awarded under this Act is based on the amount of
qualifying Illinois labor expenditures approved by the
Department in any tax year beginning January 1, 2017 or
thereafter for the applicant.
Section 40. Evaluation of tax credit program. The
Department shall evaluate the tax credit program. The
evaluation must include an assessment of the effectiveness of
the program in creating and retaining jobs in Illinois and of
the revenue impact of the program and may include a review of
the practices and experiences of other states or nations with
similar programs. Upon completion of this evaluation, the
Department shall determine the overall success of the program
and may make a recommendation to extend, modify, or not extend
the program based on this evaluation.
Section 45. Program terms and conditions. Any documentary
materials or data made available to or received by any agent or

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employee of the Department are confidential and are not public
records to the extent that the materials or data consist of
commercial or financial information regarding the
manufacturing operation of the applicant for or recipient of
any tax credit under this Act.
Section 50. Appeals. If the Department denies a taxpayer
certification under Section 25 of this Act, the denial must be
in writing stating the reasons for the denial. The taxpayer
shall have 60 days to correct any deficiency that was the
reason for the initial denial of certification.
If the Department again denies the certification, the
taxpayer may appeal the denial within 60 days after the denial
and request a hearing. At the hearing, if the taxpayer shows,
by preponderance of evidence, that he or she has complied with
the requirements of this Section, then the taxpayer shall be
certified as an accredited manufacturer.
If the taxpayer disagrees with the Department about the
amount of the tax credit available for any tax year, the
taxpayer may appeal the certification and request a hearing. If
the taxpayer shows, by a preponderance of evidence, that he or
she is entitled to a larger amount, the Department shall
approve the larger amount. However, in no instance may the
Department determine a lesser amount.
The provisions of the Administrative Review Law, and the
rules adopted pursuant thereto, apply to and govern all

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proceedings for the judicial review of this Act.
Section 90. The Illinois Income Tax Act is amended by
adding Section 224 as follows:
(35 ILCS 5/224 new)
Sec. 224. Manufacturing job destination tax credit. For tax
years beginning on or after January 1, 2017, a taxpayer who has
been awarded a tax credit under the Manufacturing Job
Destination Tax Credit Act is entitled to a credit against the
taxes imposed under subsections (a) and (b) of Section 201 of
this Act in an amount determined by the Department under the
Manufacturing Job Destination Tax Credit Act. If the taxpayer
is a partnership or Subchapter S corporation, the credit is
allowed to the partners or shareholders 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 Department must prescribe rules to enforce and
administer the provisions of this Section. This Section is
exempt from the provisions of Section 250 of this Act.
The credit may not be carried forward or back. In no event
shall a credit under this Section reduce the taxpayer's
liability to less than zero.
Section 99. Effective date. This Act takes effect January
1, 2017.