|
| | 99TH GENERAL ASSEMBLY
State of Illinois
2015 and 2016
HB4545 Introduced , by Rep. David Reis SYNOPSIS AS INTRODUCED:
|
| |
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.
| |
| | |
| | | FISCAL NOTE ACT MAY APPLY | |
| | A BILL FOR |
|
|
| | HB4545 | | LRB099 16908 HLH 41255 b |
|
|
| 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. Short title. This Act may be cited as the |
| 5 | | Manufacturing Job Destination Tax Credit Act.
|
| 6 | | Section 10. Purpose. The General Assembly finds that the |
| 7 | | manufacturing sector is a crucial underpinning of the economy |
| 8 | | of the State of Illinois. Therefore, it is in the best interest |
| 9 | | of the State of Illinois to make Illinois the preferred |
| 10 | | destination for manufacturing and to strengthen the existing |
| 11 | | industrial base in Illinois, thereby promoting job growth, an |
| 12 | | expedited economic recovery, and long-term revenue growth for |
| 13 | | the State.
|
| 14 | | Section 15. Definitions. As used in this Act: |
| 15 | | "Accredited manufacturer" means a manufacturer that has |
| 16 | | been certified by the Department. |
| 17 | | "Credit" means an amount equal to 25% of qualifying |
| 18 | | Illinois labor expenditures approved by the Department. The |
| 19 | | accredited manufacturer is deemed to have paid, on its balance |
| 20 | | due day for the year, an amount equal to 25% of its qualified |
| 21 | | Illinois labor expenditure for the tax year. |
| 22 | | "Department" means the Department of Revenue. |
|
| | HB4545 | - 2 - | LRB099 16908 HLH 41255 b |
|
|
|
| 1 | | "Director" means the Director of Revenue. |
| 2 | | "Illinois labor expenditure" means salary or wages paid to |
| 3 | | employees of an accredited manufacturer for services in |
| 4 | | Illinois after the effective date of this Act. |
| 5 | | To qualify as an Illinois labor expenditure, the |
| 6 | | expenditure must be: |
| 7 | | (1) Reasonable under the circumstances. |
| 8 | | (2) Included in the federal income tax basis of the |
| 9 | | property. |
| 10 | | (3) Incurred by the accredited manufacturer for |
| 11 | | services on or after January 1, 2008. |
| 12 | | (4) Incurred for the production stages of the |
| 13 | | manufacturing process. |
| 14 | | (5) Limited to the first $25,000 of wages paid or |
| 15 | | incurred to each employee of the manufacturing company. |
| 16 | | (6) Exclusive of the salary or wages paid to or |
| 17 | | incurred for the 2 highest paid employees of the |
| 18 | | manufacturing company. |
| 19 | | (7) Directly attributable to the accredited |
| 20 | | manufacturer. |
| 21 | | (8) Paid in the tax year for which the applicant is |
| 22 | | claiming the credit or no later than 60 days after the end |
| 23 | | of the tax year. |
| 24 | | (9) Paid for services rendered in Illinois.
|
| 25 | | Section 20. Tax credit awards. Subject to the conditions |
|
| | HB4545 | - 3 - | LRB099 16908 HLH 41255 b |
|
|
|
| 1 | | set forth in this Act, an accredited manufacturer is entitled |
| 2 | | to a credit of 25% of all qualifying Illinois labor |
| 3 | | expenditures approved by the Department.
|
| 4 | | Section 25. Accredited manufacturing company |
| 5 | | certification. Any taxpayer may request certification as an |
| 6 | | accredited manufacturing company by formal application to the |
| 7 | | Department. In determining whether to issue an accredited |
| 8 | | manufacturing company certificate, the Department must |
| 9 | | determine that the following conditions exist: |
| 10 | | (1) The taxpayer is engaged primarily in the business |
| 11 | | of manufacturing goods. |
| 12 | | (2) The taxpayer intends to employ workers in the State |
| 13 | | of Illinois. |
| 14 | | (3) The taxpayer provides health insurance to its |
| 15 | | employees. |
| 16 | | (4) The taxpayer provides to its employees either a |
| 17 | | pension plan or a 401k plan. |
| 18 | | (5) The taxpayer offers to its employees elder care |
| 19 | | benefits and a dependent care flexible spending account. |
| 20 | | (6) The taxpayer intends to expend a portion of its |
| 21 | | research and development budgets in the State of Illinois.
|
| 22 | | Section 30. Issuance of manufacturing job destination tax |
| 23 | | credit certification. |
| 24 | | (a) In order to qualify for a tax credit under this Act, an |
|
| | HB4545 | - 4 - | LRB099 16908 HLH 41255 b |
|
|
|
| 1 | | accredited manufacturer must file, on forms prescribed by the |
| 2 | | Department, all information necessary to calculate the tax |
| 3 | | credit. |
| 4 | | (b) Upon satisfactory review of the application, the |
| 5 | | Department shall issue a manufacturing job destination tax |
| 6 | | credit certificate stating the amount of the tax credit.
|
| 7 | | Section 35. Amount and duration of the credit. The amount |
| 8 | | of the credit awarded under this Act is based on the amount of |
| 9 | | qualifying Illinois labor expenditures approved by the |
| 10 | | Department in any tax year beginning January 1, 2017 or |
| 11 | | thereafter for the applicant.
|
| 12 | | Section 40. Evaluation of tax credit program. The |
| 13 | | Department shall evaluate the tax credit program. The |
| 14 | | evaluation must include an assessment of the effectiveness of |
| 15 | | the program in creating and retaining jobs in Illinois and of |
| 16 | | the revenue impact of the program and may include a review of |
| 17 | | the practices and experiences of other states or nations with |
| 18 | | similar programs. Upon completion of this evaluation, the |
| 19 | | Department shall determine the overall success of the program |
| 20 | | and may make a recommendation to extend, modify, or not extend |
| 21 | | the program based on this evaluation.
|
| 22 | | Section 45. Program terms and conditions. Any documentary |
| 23 | | materials or data made available to or received by any agent or |
|
| | HB4545 | - 5 - | LRB099 16908 HLH 41255 b |
|
|
|
| 1 | | employee of the Department are confidential and are not public |
| 2 | | records to the extent that the materials or data consist of |
| 3 | | commercial or financial information regarding the |
| 4 | | manufacturing operation of the applicant for or recipient of |
| 5 | | any tax credit under this Act.
|
| 6 | | Section 50. Appeals. If the Department denies a taxpayer |
| 7 | | certification under Section 25 of this Act, the denial must be |
| 8 | | in writing stating the reasons for the denial. The taxpayer |
| 9 | | shall have 60 days to correct any deficiency that was the |
| 10 | | reason for the initial denial of certification. |
| 11 | | If the Department again denies the certification, the |
| 12 | | taxpayer may appeal the denial within 60 days after the denial |
| 13 | | and request a hearing. At the hearing, if the taxpayer shows, |
| 14 | | by preponderance of evidence, that he or she has complied with |
| 15 | | the requirements of this Section, then the taxpayer shall be |
| 16 | | certified as an accredited manufacturer. |
| 17 | | If the taxpayer disagrees with the Department about the |
| 18 | | amount of the tax credit available for any tax year, the |
| 19 | | taxpayer may appeal the certification and request a hearing. If |
| 20 | | the taxpayer shows, by a preponderance of evidence, that he or |
| 21 | | she is entitled to a larger amount, the Department shall |
| 22 | | approve the larger amount. However, in no instance may the |
| 23 | | Department determine a lesser amount. |
| 24 | | The provisions of the Administrative Review Law, and the |
| 25 | | rules adopted pursuant thereto, apply to and govern all |
|
| | HB4545 | - 6 - | LRB099 16908 HLH 41255 b |
|
|
|
| 1 | | proceedings for the judicial review of this Act.
|
| 2 | | Section 90. The Illinois Income Tax Act is amended by |
| 3 | | adding Section 224 as follows:
|
| 4 | | (35 ILCS 5/224 new) |
| 5 | | Sec. 224. Manufacturing job destination tax credit. For tax |
| 6 | | years beginning on or after January 1, 2017, a taxpayer who has |
| 7 | | been awarded a tax credit under the Manufacturing Job |
| 8 | | Destination Tax Credit Act is entitled to a credit against the |
| 9 | | taxes imposed under subsections (a) and (b) of Section 201 of |
| 10 | | this Act in an amount determined by the Department under the |
| 11 | | Manufacturing Job Destination Tax Credit Act. If the taxpayer |
| 12 | | is a partnership or Subchapter S corporation, the credit is |
| 13 | | allowed to the partners or shareholders in accordance with the |
| 14 | | determination of income and distributive share of income under |
| 15 | | Sections 702 and 704 and Subchapter S of the Internal Revenue |
| 16 | | Code. The Department must prescribe rules to enforce and |
| 17 | | administer the provisions of this Section. This Section is |
| 18 | | exempt from the provisions of Section 250 of this Act. |
| 19 | | The credit may not be carried forward or back. In no event |
| 20 | | shall a credit under this Section reduce the taxpayer's |
| 21 | | liability to less than zero.
|
| 22 | | Section 99. Effective date. This Act takes effect January |
| 23 | | 1, 2017.
|