Bill Text: IL HB4565 | 2023-2024 | 103rd General Assembly | Introduced

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Bill Title: Amends the Illinois Income Tax Act. Creates an income tax credit not to exceed 25% of the eligible costs incurred by the taxpayer during the taxable year in connection with the production of a biobased product. Provides that the Department of Commerce and Economic Opportunity shall award the credits. Provides that the total aggregate amount of credits awarded under those provisions shall not exceed $20,000,000 in any State fiscal year. Effective immediately.

Spectrum: Partisan Bill (Republican 1-0)

Status: (Introduced) 2024-04-05 - House Committee Amendment No. 1 Rule 19(c) / Re-referred to Rules Committee [HB4565 Detail]

Download: Illinois-2023-HB4565-Introduced.html

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103RD GENERAL ASSEMBLY State of Illinois 2023 and 2024 HB4565 Introduced , by Rep. Ryan Spain SYNOPSIS AS INTRODUCED:
35 ILCS 5/241 new
Amends the Illinois Income Tax Act. Creates an income tax credit not to exceed 25% of the eligible costs incurred by the taxpayer during the taxable year in connection with the production of a biobased product. Provides that the Department of Commerce and Economic Opportunity shall award the credits. Provides that the total aggregate amount of credits awarded under those provisions shall not exceed $20,000,000 in any State fiscal year. Effective immediately.
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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. The Illinois Income Tax Act is amended by
adding Section 241 as follows:
(35 ILCS 5/241 new)
Sec. 241. Biobased products credit.
(a) For taxable years beginning on or after January 1,
2025, each taxpayer who incurs eligible costs during the
taxable year in connection with the production of a biobased
product may apply to the Department of Commerce and Economic
Opportunity for a credit against the taxes imposed by
subsections (a) and (b) of Section 201. The credit may not
exceed 25% of those eligible costs. Upon satisfactory review,
the Department of Commerce and Economic Opportunity shall
issue a tax credit certificate to the applicant stating the
amount of the tax credit to which the applicant is entitled.
The total aggregate amount of credits awarded under this
Section shall not exceed $20,000,000 in any State fiscal year.
To be eligible for the credit under this Section, the
biobased product must be produced in Illinois; however, the
raw materials are not required to be sourced from Illinois.
(b) A credit under this Section that is awarded to a

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partner of a partnership or a shareholder of a subchapter S
corporation shall be awarded as provided in Section 251.
(c) If the amount of the credit exceeds the tax liability
for the year, the 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 tax liability. If there are credits from
more than one tax year that are available to offset a
liability, the earlier credit shall be applied first. In no
event shall a credit under this Section reduce the taxpayer's
liability to less than zero.
(d) As used in this Section:
"Biobased product" means a commercial or industrial
product (other than food or fuel) that is derived from raw
materials such as plants and other renewable agricultural,
marine, or forestry materials and that meets either of the
following criteria:
(1) the product is primarily (at least 50%) composed
of biological products, including renewable domestic
agricultural materials, renewable chemicals, or forestry
materials; or
(2) the product is an intermediate ingredient or
feedstock and 100% of the carbon in the product is from
renewable, biological sources verified using ASTM D6866 or
equivalent radioisotope testing.
"Eligible costs" means:

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(1) costs associated with studies, surveys, the
development of plans and specifications, implementation,
and program administration, including, but not limited to,
professional services costs, architectural costs,
engineering costs, legal costs, financial services costs,
and planning and administrative costs;
(2) marketing costs;
(3) property assembly costs, including, but not
limited to, costs associated with the acquisition of land
and other real or personal property or rights or interests
in property, demolition of buildings, and site
preparation;
(4) costs of rehabilitation, reconstruction, repair,
or remodeling of existing buildings;
(5) costs of construction of new buildings;
(6) costs of construction of public works or
improvements related to business development, including,
but not limited to, streets, sidewalks, water service, and
sanitary and storm sewer service;
(7) costs of eliminating or removing contaminants and
other impediments; including, but not limited to, site
improvements, the installation of parking lots and other
concrete or asphalt barriers, and the clearing or grading
of land;
(8) costs associated with job training and retraining;
(9) up to 30% of the financing costs; and

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(10) costs of capital equipment purchases.
(e) The Department of Commerce and Economic Opportunity
shall adopt rules to implement this Section.
(f) This Section is exempt from the provisions of Section
250.