Bill Text: IL SB1660 | 2015-2016 | 99th General Assembly | Introduced

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Bill Title: Amends the Economic Development for a Growing Economy Tax Credit Act and the Illinois Income Tax. Authorizes taxpayers to sell, assign, or transfer credits awarded under the Economic Development for a Growing Economy Tax Credit Act. Effective immediately.

Spectrum: Partisan Bill (Republican 1-0)

Status: (Introduced - Dead) 2015-10-10 - Senate Committee Amendment No. 1 Pursuant to Senate Rule 3-9(b) / Referred to Assignments [SB1660 Detail]

Download: Illinois-2015-SB1660-Introduced.html

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99TH GENERAL ASSEMBLY State of Illinois 2015 and 2016 SB1660 Introduced 2/20/2015, by Sen. Karen McConnaughay SYNOPSIS AS INTRODUCED:
35 ILCS 5/211
35 ILCS 10/5-15
Amends the Economic Development for a Growing Economy Tax Credit Act and the Illinois Income Tax. Authorizes taxpayers to sell, assign, or transfer credits awarded under the Economic Development for a Growing Economy Tax Credit Act. Effective immediately.
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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. The Illinois Income Tax Act is amended by
changing Section 211 as follows:
(35 ILCS 5/211)
Sec. 211. Economic Development for a Growing Economy Tax
Credit. For tax years beginning on or after January 1, 1999, a
Taxpayer who has entered into an Agreement under the Economic
Development for a Growing Economy 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 to be determined in
the Agreement. If the Taxpayer is a partnership or Subchapter S
corporation, the credit shall be 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, in
cooperation with the Department of Commerce and Economic
Opportunity, shall 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 shall be subject to the conditions set forth in
the Agreement and the following limitations:

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(1) The tax credit shall not exceed the Incremental
Income Tax (as defined in Section 5-5 of the Economic
Development for a Growing Economy Tax Credit Act) with
respect to the project.
(2) The amount of the credit allowed during the tax
year plus the sum of all amounts allowed in prior years
shall not exceed 100% of the aggregate amount expended by
the Taxpayer during all prior tax years on approved costs
defined by Agreement.
(3) The amount of the credit shall be determined on an
annual basis. Except as applied in a carryover year
pursuant to Section 211(4) of this Act, the credit may not
be applied against any State income tax liability in more
than 10 taxable years; provided, however, that (i) an
eligible business certified by the Department of Commerce
and Economic Opportunity under the Corporate Headquarters
Relocation Act may not apply the credit against any of its
State income tax liability in more than 15 taxable years
and (ii) credits allowed to that eligible business are
subject to the conditions and requirements set forth in
Sections 5-35 and 5-45 of the Economic Development for a
Growing Economy Tax Credit Act.
(4) The credit may not exceed the amount of taxes
imposed pursuant to subsections (a) and (b) of Section 201
of this Act. Any credit that is unused in the year the
credit is computed may be carried forward and applied to

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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.
(5) No credit shall be allowed with respect to any
Agreement for any taxable year ending after the
Noncompliance Date. Upon receiving notification by the
Department of Commerce and Economic Opportunity of the
noncompliance of a Taxpayer with an Agreement, the
Department shall notify the Taxpayer that no credit is
allowed with respect to that Agreement for any taxable year
ending after the Noncompliance Date, as stated in such
notification. If any credit has been allowed with respect
to an Agreement for a taxable year ending after the
Noncompliance Date for that Agreement, any refund paid to
the Taxpayer for that taxable year shall, to the extent of
that credit allowed, be an erroneous refund within the
meaning of Section 912 of this Act.
(5.5) A sale, assignment, or transfer of the tax credit
award may be made by the taxpayer in accordance with rules
adopted by the Department of Commerce and Economic
Opportunity.
(6) For purposes of this Section, the terms
"Agreement", "Incremental Income Tax", and "Noncompliance

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Date" have the same meaning as when used in the Economic
Development for a Growing Economy Tax Credit Act.
(Source: P.A. 94-793, eff. 5-19-06.)
Section 10. The Economic Development for a Growing Economy
Tax Credit Act is amended by changing Section 5-15 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.

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(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, 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

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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;
(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

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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

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Illinois, and (iv) makes a capital investment of at least
$200,000,000 at the project location.
(1.6) The election under this subsection (f) may also
be made by a Taxpayer for any Credit awarded pursuant to an
agreement that was executed within 150 days after the
effective date of this amendatory Act of the 97th General
Assembly, if the Taxpayer (i) is primarily engaged in the
operation of a discount department store, (ii) maintains
its corporate headquarters in Illinois, (iii) employs a
minimum of 4,250 full-time employees at its corporate
headquarters in Illinois at the time of application, (iv)
retains at least 4,250 full-time jobs in Illinois that
would have been at risk of being relocated outside of
Illinois, (v) had a minimum of $40,000,000,000 in total
revenue in 2010, and (vi) makes a capital investment of at
least $300,000,000 at the project location.
(1.7) Notwithstanding any other provision of law, the
election under this subsection (f) may also be made by a
Taxpayer for any Credit awarded pursuant to an agreement
that was executed or applied for on or after July 1, 2011
and on or before March 31, 2012, if the Taxpayer is
primarily engaged in the manufacture of original and
aftermarket filtration parts and products for automobiles,
motor vehicles, light duty motor vehicles, light trucks and
utility vehicles, and heavy duty trucks, (ii) employs a
minimum of 1,000 full-time employees in Illinois at the

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time of application, (iii) creates at least 250 full-time
jobs in Illinois, (iv) relocates its corporate
headquarters to Illinois from another state, and (v) makes
a capital investment of at least $4,000,000 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

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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.
(h) Effective July 1, 2015, any tax credits awarded under
this Act and not previously claimed by a taxpayer against its
income tax liability under Section 201 of the Illinois Income
Tax Act may be sold, assigned, or transferred, in whole or in
part, to another Illinois taxpayer subject to all of the
following conditions:
(1) A taxpayer awarded an income tax credit under this
Act may make only a single sale, assignment, or transfer of
the tax credit earned in a taxable year; however, the
credit may be sold, assigned, or transferred to one or more
transferees.
(2) The tax credit earned by the transferor may be
transferred before the due date, including extensions, of
the Illinois income tax return of the transferor. The
amount of the credit transferred to the transferee or
transferees may not exceed the amount of the credit earned
by the transferor in the transferor's taxable year.
(3) Written notification of the transfer or sale of
credits awarded under this Act shall be submitted to the

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Department of Commerce and Economic Opportunity and the
Department of Revenue within 30 days after the sale,
assignment, or transfer. The Department of Revenue shall
provide by rule the information required to be provided in
such written notification.
(4) The transfer or sale of tax credits under this
subsection does not extend the time during which those tax
credits can be used. The carry-forward period for a tax
credit that is transferred or sold shall begin on the date
on which the tax credit was originally earned.
(5) A transferee shall have only those rights to claim
and use the tax credit that were available to the taxpayer
that earned the credit, except that credits sold or
transferred may not be used against a transferee's
withholding tax liability.
(6) If the taxpayer earning the credit fails to comply
with the terms and requirements of the Agreement, and,
pursuant to the provisions of Section 5-65 of this Act,
notice is provided to the Department of Revenue of the
taxpayer's non-compliance, the Department shall hold the
transferor liable for any tax, penalty, or interest due as
a result of non-compliance with the Agreement.
(Source: P.A. 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; 97-2, eff. 5-6-11; 97-636, eff. 6-1-12.)
Section 99. Effective date. This Act takes effect upon

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becoming law.