HB0162 EnrolledLRB100 02290 HLH 12295 b

1    AN ACT concerning revenue.
 
2    Be it enacted by the People of the State of Illinois,
3represented in the General Assembly:
 
4    Section 5. The Illinois Income Tax Act is amended by
5changing Section 704A as follows:
 
6    (35 ILCS 5/704A)
7    Sec. 704A. Employer's return and payment of tax withheld.
8    (a) In general, every employer who deducts and withholds or
9is required to deduct and withhold tax under this Act on or
10after January 1, 2008 shall make those payments and returns as
11provided in this Section.
12    (b) Returns. Every employer shall, in the form and manner
13required by the Department, make returns with respect to taxes
14withheld or required to be withheld under this Article 7 for
15each quarter beginning on or after January 1, 2008, on or
16before the last day of the first month following the close of
17that quarter.
18    (c) Payments. With respect to amounts withheld or required
19to be withheld on or after January 1, 2008:
20        (1) Semi-weekly payments. For each calendar year, each
21    employer who withheld or was required to withhold more than
22    $12,000 during the one-year period ending on June 30 of the
23    immediately preceding calendar year, payment must be made:

 

 

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1            (A) on or before each Friday of the calendar year,
2        for taxes withheld or required to be withheld on the
3        immediately preceding Saturday, Sunday, Monday, or
4        Tuesday;
5            (B) on or before each Wednesday of the calendar
6        year, for taxes withheld or required to be withheld on
7        the immediately preceding Wednesday, Thursday, or
8        Friday.
9        Beginning with calendar year 2011, payments made under
10    this paragraph (1) of subsection (c) must be made by
11    electronic funds transfer.
12        (2) Semi-weekly payments. Any employer who withholds
13    or is required to withhold more than $12,000 in any quarter
14    of a calendar year is required to make payments on the
15    dates set forth under item (1) of this subsection (c) for
16    each remaining quarter of that calendar year and for the
17    subsequent calendar year.
18        (3) Monthly payments. Each employer, other than an
19    employer described in items (1) or (2) of this subsection,
20    shall pay to the Department, on or before the 15th day of
21    each month the taxes withheld or required to be withheld
22    during the immediately preceding month.
23        (4) Payments with returns. Each employer shall pay to
24    the Department, on or before the due date for each return
25    required to be filed under this Section, any tax withheld
26    or required to be withheld during the period for which the

 

 

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1    return is due and not previously paid to the Department.
2    (d) Regulatory authority. The Department may, by rule:
3        (1) Permit employers, in lieu of the requirements of
4    subsections (b) and (c), to file annual returns due on or
5    before January 31 of the year for taxes withheld or
6    required to be withheld during the previous calendar year
7    and, if the aggregate amounts required to be withheld by
8    the employer under this Article 7 (other than amounts
9    required to be withheld under Section 709.5) do not exceed
10    $1,000 for the previous calendar year, to pay the taxes
11    required to be shown on each such return no later than the
12    due date for such return.
13        (2) Provide that any payment required to be made under
14    subsection (c)(1) or (c)(2) is deemed to be timely to the
15    extent paid by electronic funds transfer on or before the
16    due date for deposit of federal income taxes withheld from,
17    or federal employment taxes due with respect to, the wages
18    from which the Illinois taxes were withheld.
19        (3) Designate one or more depositories to which payment
20    of taxes required to be withheld under this Article 7 must
21    be paid by some or all employers.
22        (4) Increase the threshold dollar amounts at which
23    employers are required to make semi-weekly payments under
24    subsection (c)(1) or (c)(2).
25    (e) Annual return and payment. Every employer who deducts
26and withholds or is required to deduct and withhold tax from a

 

 

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1person engaged in domestic service employment, as that term is
2defined in Section 3510 of the Internal Revenue Code, may
3comply with the requirements of this Section with respect to
4such employees by filing an annual return and paying the taxes
5required to be deducted and withheld on or before the 15th day
6of the fourth month following the close of the employer's
7taxable year. The Department may allow the employer's return to
8be submitted with the employer's individual income tax return
9or to be submitted with a return due from the employer under
10Section 1400.2 of the Unemployment Insurance Act.
11    (f) Magnetic media and electronic filing. Any W-2 Form
12that, under the Internal Revenue Code and regulations
13promulgated thereunder, is required to be submitted to the
14Internal Revenue Service on magnetic media or electronically
15must also be submitted to the Department on magnetic media or
16electronically for Illinois purposes, if required by the
17Department.
18    (g) For amounts deducted or withheld after December 31,
192009, a taxpayer who makes an election under subsection (f) of
20Section 5-15 of the Economic Development for a Growing Economy
21Tax Credit Act for a taxable year shall be allowed a credit
22against payments due under this Section for amounts withheld
23during the first calendar year beginning after the end of that
24taxable year equal to the amount of the credit for the
25incremental income tax attributable to full-time employees of
26the taxpayer awarded to the taxpayer by the Department of

 

 

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1Commerce and Economic Opportunity under the Economic
2Development for a Growing Economy Tax Credit Act for the
3taxable year and credits not previously claimed and allowed to
4be carried forward under Section 211(4) of this Act as provided
5in subsection (f) of Section 5-15 of the Economic Development
6for a Growing Economy Tax Credit Act. The credit or credits may
7not reduce the taxpayer's obligation for any payment due under
8this Section to less than zero. If the amount of the credit or
9credits exceeds the total payments due under this Section with
10respect to amounts withheld during the calendar year, the
11excess may be carried forward and applied against the
12taxpayer's liability under this Section in the succeeding
13calendar years as allowed to be carried forward under paragraph
14(4) of Section 211 of this Act. The credit or credits shall be
15applied to the earliest year for which there is a tax
16liability. If there are credits from more than one taxable year
17that are available to offset a liability, the earlier credit
18shall be applied first. Each employer who deducts and withholds
19or is required to deduct and withhold tax under this Act and
20who retains income tax withholdings under subsection (f) of
21Section 5-15 of the Economic Development for a Growing Economy
22Tax Credit Act must make a return with respect to such taxes
23and retained amounts in the form and manner that the
24Department, by rule, requires and pay to the Department or to a
25depositary designated by the Department those withheld taxes
26not retained by the taxpayer. For purposes of this subsection

 

 

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1(g), the term taxpayer shall include taxpayer and members of
2the taxpayer's unitary business group as defined under
3paragraph (27) of subsection (a) of Section 1501 of this Act.
4This Section is exempt from the provisions of Section 250 of
5this Act. No credit awarded under the Economic Development for
6a Growing Economy Tax Credit Act for agreements entered into on
7or after January 1, 2015 may be credited against payments due
8under this Section.
9    (h) An employer may claim a credit against payments due
10under this Section for amounts withheld during the first
11calendar year ending after the date on which a tax credit
12certificate was issued under Section 35 of the Small Business
13Job Creation Tax Credit Act. The credit shall be equal to the
14amount shown on the certificate, but may not reduce the
15taxpayer's obligation for any payment due under this Section to
16less than zero. If the amount of the credit exceeds the total
17payments due under this Section with respect to amounts
18withheld during the calendar year, the excess may be carried
19forward and applied against the taxpayer's liability under this
20Section in the 5 succeeding calendar years. The credit shall be
21applied to the earliest year for which there is a tax
22liability. If there are credits from more than one calendar
23year that are available to offset a liability, the earlier
24credit shall be applied first. This Section is exempt from the
25provisions of Section 250 of this Act.
26(Source: P.A. 96-834, eff. 12-14-09; 96-888, eff. 4-13-10;

 

 

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196-905, eff. 6-4-10; 96-1027, eff. 7-12-10; 97-333, eff.
28-12-11; 97-507, eff. 8-23-11.)
 
3    Section 10. The Economic Development for a Growing Economy
4Tax Credit Act is amended by changing Sections 5-5, 5-15, 5-20,
55-25, 5-50, 5-65, 5-70 and 5-77 and by adding Section 5-57 as
6follows:
 
7    (35 ILCS 10/5-5)
8    Sec. 5-5. Definitions. As used in this Act:
9    "Agreement" means the Agreement between a Taxpayer and the
10Department under the provisions of Section 5-50 of this Act.
11    "Applicant" means a Taxpayer that is operating a business
12located or that the Taxpayer plans to locate within the State
13of Illinois and that is engaged in interstate or intrastate
14commerce for the purpose of manufacturing, processing,
15assembling, warehousing, or distributing products, conducting
16research and development, providing tourism services, or
17providing services in interstate commerce, office industries,
18or agricultural processing, but excluding retail, retail food,
19health, or professional services. "Applicant" does not include
20a Taxpayer who closes or substantially reduces an operation at
21one location in the State and relocates substantially the same
22operation to another location in the State. This does not
23prohibit a Taxpayer from expanding its operations at another
24location in the State, provided that existing operations of a

 

 

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1similar nature located within the State are not closed or
2substantially reduced. This also does not prohibit a Taxpayer
3from moving its operations from one location in the State to
4another location in the State for the purpose of expanding the
5operation provided that the Department determines that
6expansion cannot reasonably be accommodated within the
7municipality in which the business is located, or in the case
8of a business located in an incorporated area of the county,
9within the county in which the business is located, after
10conferring with the chief elected official of the municipality
11or county and taking into consideration any evidence offered by
12the municipality or county regarding the ability to accommodate
13expansion within the municipality or county.
14    "Committee" means the Illinois Business Investment
15Committee created under Section 5-25 of this Act within the
16Illinois Economic Development Board.
17    "Credit" means the amount agreed to between the Department
18and Applicant under this Act, but not to exceed the lesser of:
19(1) the sum of (i) 50% of the Incremental Income Tax
20attributable to New Employees at the Applicant's project and
21(ii) 10% of the training costs of New Employees; or (2) 100% of
22the Incremental Income Tax attributable to New Employees at the
23Applicant's project. However, if the project is located in an
24underserved area, then the amount of the Credit may not exceed
25the lesser of: (1) the sum of (i) 75% of the Incremental Income
26Tax attributable to New Employees at the Applicant's project

 

 

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1and (ii) 10% of the training costs of New Employees; or (2)
2100% of the Incremental Income Tax attributable to New
3Employees at the Applicant's project. If an Applicant agrees to
4hire the required number of New Employees, then the maximum
5amount of the Credit for that Applicant may be increased by an
6amount not to exceed 25% of the Incremental Income Tax
7attributable to retained employees at the Applicant's project;
8provided that, in order to receive the increase for retained
9employees, the Applicant must provide the additional evidence
10required under paragraph (3) of subsection (b) of Section 5-25.
11    "Department" means the Department of Commerce and Economic
12Opportunity.
13    "Director" means the Director of Commerce and Economic
14Opportunity.
15    "Full-time Employee" means an individual who is employed
16for consideration for at least 35 hours each week or who
17renders any other standard of service generally accepted by
18industry custom or practice as full-time employment. An
19individual for whom a W-2 is issued by a Professional Employer
20Organization (PEO) is a full-time employee if employed in the
21service of the Applicant for consideration for at least 35
22hours each week or who renders any other standard of service
23generally accepted by industry custom or practice as full-time
24employment to Applicant.
25    "Incremental Income Tax" means the total amount withheld
26during the taxable year from the compensation of New Employees

 

 

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1and, if applicable, retained employees under Article 7 of the
2Illinois Income Tax Act arising from employment at a project
3that is the subject of an Agreement.
4    "New Employee" means:
5        (a) A Full-time Employee first employed by a Taxpayer
6    in the project that is the subject of an Agreement and who
7    is hired after the Taxpayer enters into the tax credit
8    Agreement.
9        (b) The term "New Employee" does not include:
10            (1) an employee of the Taxpayer who performs a job
11        that was previously performed by another employee, if
12        that job existed for at least 6 months before hiring
13        the employee;
14            (2) an employee of the Taxpayer who was previously
15        employed in Illinois by a Related Member of the
16        Taxpayer and whose employment was shifted to the
17        Taxpayer after the Taxpayer entered into the tax credit
18        Agreement; or
19            (3) a child, grandchild, parent, or spouse, other
20        than a spouse who is legally separated from the
21        individual, of any individual who has a direct or an
22        indirect ownership interest of at least 5% in the
23        profits, capital, or value of the Taxpayer.
24        (c) Notwithstanding paragraph (1) of subsection (b),
25    an employee may be considered a New Employee under the
26    Agreement if the employee performs a job that was

 

 

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1    previously performed by an employee who was:
2            (1) treated under the Agreement as a New Employee;
3        and
4            (2) promoted by the Taxpayer to another job.
5        (d) Notwithstanding subsection (a), the Department may
6    award Credit to an Applicant with respect to an employee
7    hired prior to the date of the Agreement if:
8            (1) the Applicant is in receipt of a letter from
9        the Department stating an intent to enter into a credit
10        Agreement;
11            (2) the letter described in paragraph (1) is issued
12        by the Department not later than 15 days after the
13        effective date of this Act; and
14            (3) the employee was hired after the date the
15        letter described in paragraph (1) was issued.
16    "Noncompliance Date" means, in the case of a Taxpayer that
17is not complying with the requirements of the Agreement or the
18provisions of this Act, the day following the last date upon
19which the Taxpayer was in compliance with the requirements of
20the Agreement and the provisions of this Act, as determined by
21the Director, pursuant to Section 5-65.
22    "Pass Through Entity" means an entity that is exempt from
23the tax under subsection (b) or (c) of Section 205 of the
24Illinois Income Tax Act.
25    "Professional Employer Organization" (PEO) means an
26employee leasing company, as defined in Section 206.1(A)(2) of

 

 

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1the Illinois Unemployment Insurance Act.
2    "Related Member" means a person that, with respect to the
3Taxpayer during any portion of the taxable year, is any one of
4the following:
5        (1) An individual stockholder, if the stockholder and
6    the members of the stockholder's family (as defined in
7    Section 318 of the Internal Revenue Code) own directly,
8    indirectly, beneficially, or constructively, in the
9    aggregate, at least 50% of the value of the Taxpayer's
10    outstanding stock.
11        (2) A partnership, estate, or trust and any partner or
12    beneficiary, if the partnership, estate, or trust, and its
13    partners or beneficiaries own directly, indirectly,
14    beneficially, or constructively, in the aggregate, at
15    least 50% of the profits, capital, stock, or value of the
16    Taxpayer.
17        (3) A corporation, and any party related to the
18    corporation in a manner that would require an attribution
19    of stock from the corporation to the party or from the
20    party to the corporation under the attribution rules of
21    Section 318 of the Internal Revenue Code, if the Taxpayer
22    owns directly, indirectly, beneficially, or constructively
23    at least 50% of the value of the corporation's outstanding
24    stock.
25        (4) A corporation and any party related to that
26    corporation in a manner that would require an attribution

 

 

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1    of stock from the corporation to the party or from the
2    party to the corporation under the attribution rules of
3    Section 318 of the Internal Revenue Code, if the
4    corporation and all such related parties own in the
5    aggregate at least 50% of the profits, capital, stock, or
6    value of the Taxpayer.
7        (5) A person to or from whom there is attribution of
8    stock ownership in accordance with Section 1563(e) of the
9    Internal Revenue Code, except, for purposes of determining
10    whether a person is a Related Member under this paragraph,
11    20% shall be substituted for 5% wherever 5% appears in
12    Section 1563(e) of the Internal Revenue Code.
13    "Taxpayer" means an individual, corporation, partnership,
14or other entity that has any Illinois Income Tax liability.
15    "Underserved area" means a geographic area that meets one
16or more of the following conditions:
17        (1) the area has a poverty rate of at least 20%
18    according to the latest federal decennial census;
19        (2) 75% or more of the children in the area participate
20    in the federal free lunch program according to reported
21    statistics from the State Board of Education;
22        (3) at least 20% of the households in the area receive
23    assistance under the Supplemental Nutrition Assistance
24    Program (SNAP); or
25        (4) the area has an average unemployment rate, as
26    determined by the Illinois Department of Employment

 

 

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1    Security, that is more than 120% of the national
2    unemployment average, as determined by the U.S. Department
3    of Labor, for a period of at least 2 consecutive calendar
4    years preceding the date of the application.
5(Source: P.A. 94-793, eff. 5-19-06; 95-375, eff. 8-23-07.)
 
6    (35 ILCS 10/5-15)
7    Sec. 5-15. Tax Credit Awards. Subject to the conditions set
8forth in this Act, a Taxpayer is entitled to a Credit against
9or, as described in subsection (g) of this Section, a payment
10towards taxes imposed pursuant to subsections (a) and (b) of
11Section 201 of the Illinois Income Tax Act that may be imposed
12on the Taxpayer for a taxable year beginning on or after
13January 1, 1999, if the Taxpayer is awarded a Credit by the
14Department under this Act for that taxable year.
15    (a) The Department shall make Credit awards under this Act
16to foster job creation and retention in Illinois.
17    (b) A person that proposes a project to create new jobs in
18Illinois must enter into an Agreement with the Department for
19the Credit under this Act.
20    (c) The Credit shall be claimed for the taxable years
21specified in the Agreement.
22    (d) The Credit shall not exceed the Incremental Income Tax
23attributable to the project that is the subject of the
24Agreement.
25    (e) Nothing herein shall prohibit a Tax Credit Award to an

 

 

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1Applicant that uses a PEO if all other award criteria are
2satisfied.
3    (f) In lieu of the Credit allowed under this Act against
4the taxes imposed pursuant to subsections (a) and (b) of
5Section 201 of the Illinois Income Tax Act for any taxable year
6ending on or after December 31, 2009, for Taxpayers that
7entered into Agreements prior to January 1, 2015 and otherwise
8meet the criteria set forth in this subsection (f), the
9Taxpayer may elect to claim the Credit against its obligation
10to pay over withholding under Section 704A of the Illinois
11Income Tax Act.
12        (1) The election under this subsection (f) may be made
13    only by a Taxpayer that (i) is primarily engaged in one of
14    the following business activities: water purification and
15    treatment, motor vehicle metal stamping, automobile
16    manufacturing, automobile and light duty motor vehicle
17    manufacturing, motor vehicle manufacturing, light truck
18    and utility vehicle manufacturing, heavy duty truck
19    manufacturing, motor vehicle body manufacturing, cable
20    television infrastructure design or manufacturing, or
21    wireless telecommunication or computing terminal device
22    design or manufacturing for use on public networks and (ii)
23    meets the following criteria:
24            (A) the Taxpayer (i) had an Illinois net loss or an
25        Illinois net loss deduction under Section 207 of the
26        Illinois Income Tax Act for the taxable year in which

 

 

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1        the Credit is awarded, (ii) employed a minimum of 1,000
2        full-time employees in this State during the taxable
3        year in which the Credit is awarded, (iii) has an
4        Agreement under this Act on December 14, 2009 (the
5        effective date of Public Act 96-834), and (iv) is in
6        compliance with all provisions of that Agreement;
7            (B) the Taxpayer (i) had an Illinois net loss or an
8        Illinois net loss deduction under Section 207 of the
9        Illinois Income Tax Act for the taxable year in which
10        the Credit is awarded, (ii) employed a minimum of 1,000
11        full-time employees in this State during the taxable
12        year in which the Credit is awarded, and (iii) has
13        applied for an Agreement within 365 days after December
14        14, 2009 (the effective date of Public Act 96-834);
15            (C) the Taxpayer (i) had an Illinois net operating
16        loss carryforward under Section 207 of the Illinois
17        Income Tax Act in a taxable year ending during calendar
18        year 2008, (ii) has applied for an Agreement within 150
19        days after the effective date of this amendatory Act of
20        the 96th General Assembly, (iii) creates at least 400
21        new jobs in Illinois, (iv) retains at least 2,000 jobs
22        in Illinois that would have been at risk of relocation
23        out of Illinois over a 10-year period, and (v) makes a
24        capital investment of at least $75,000,000;
25            (D) the Taxpayer (i) had an Illinois net operating
26        loss carryforward under Section 207 of the Illinois

 

 

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1        Income Tax Act in a taxable year ending during calendar
2        year 2009, (ii) has applied for an Agreement within 150
3        days after the effective date of this amendatory Act of
4        the 96th General Assembly, (iii) creates at least 150
5        new jobs, (iv) retains at least 1,000 jobs in Illinois
6        that would have been at risk of relocation out of
7        Illinois over a 10-year period, and (v) makes a capital
8        investment of at least $57,000,000; or
9            (E) the Taxpayer (i) employed at least 2,500
10        full-time employees in the State during the year in
11        which the Credit is awarded, (ii) commits to make at
12        least $500,000,000 in combined capital improvements
13        and project costs under the Agreement, (iii) applies
14        for an Agreement between January 1, 2011 and June 30,
15        2011, (iv) executes an Agreement for the Credit during
16        calendar year 2011, and (v) was incorporated no more
17        than 5 years before the filing of an application for an
18        Agreement.
19        (1.5) The election under this subsection (f) may also
20    be made by a Taxpayer for any Credit awarded pursuant to an
21    agreement that was executed between January 1, 2011 and
22    June 30, 2011, if the Taxpayer (i) is primarily engaged in
23    the manufacture of inner tubes or tires, or both, from
24    natural and synthetic rubber, (ii) employs a minimum of
25    2,400 full-time employees in Illinois at the time of
26    application, (iii) creates at least 350 full-time jobs and

 

 

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1    retains at least 250 full-time jobs in Illinois that would
2    have been at risk of being created or retained outside of
3    Illinois, and (iv) makes a capital investment of at least
4    $200,000,000 at the project location.
5        (1.6) The election under this subsection (f) may also
6    be made by a Taxpayer for any Credit awarded pursuant to an
7    agreement that was executed within 150 days after the
8    effective date of this amendatory Act of the 97th General
9    Assembly, if the Taxpayer (i) is primarily engaged in the
10    operation of a discount department store, (ii) maintains
11    its corporate headquarters in Illinois, (iii) employs a
12    minimum of 4,250 full-time employees at its corporate
13    headquarters in Illinois at the time of application, (iv)
14    retains at least 4,250 full-time jobs in Illinois that
15    would have been at risk of being relocated outside of
16    Illinois, (v) had a minimum of $40,000,000,000 in total
17    revenue in 2010, and (vi) makes a capital investment of at
18    least $300,000,000 at the project location.
19        (1.7) Notwithstanding any other provision of law, the
20    election under this subsection (f) may also be made by a
21    Taxpayer for any Credit awarded pursuant to an agreement
22    that was executed or applied for on or after July 1, 2011
23    and on or before March 31, 2012, if the Taxpayer is
24    primarily engaged in the manufacture of original and
25    aftermarket filtration parts and products for automobiles,
26    motor vehicles, light duty motor vehicles, light trucks and

 

 

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1    utility vehicles, and heavy duty trucks, (ii) employs a
2    minimum of 1,000 full-time employees in Illinois at the
3    time of application, (iii) creates at least 250 full-time
4    jobs in Illinois, (iv) relocates its corporate
5    headquarters to Illinois from another state, and (v) makes
6    a capital investment of at least $4,000,000 at the project
7    location.
8        (2) An election under this subsection shall allow the
9    credit to be taken against payments otherwise due under
10    Section 704A of the Illinois Income Tax Act during the
11    first calendar year beginning after the end of the taxable
12    year in which the credit is awarded under this Act.
13        (3) The election shall be made in the form and manner
14    required by the Illinois Department of Revenue and, once
15    made, shall be irrevocable.
16        (4) If a Taxpayer who meets the requirements of
17    subparagraph (A) of paragraph (1) of this subsection (f)
18    elects to claim the Credit against its withholdings as
19    provided in this subsection (f), then, on and after the
20    date of the election, the terms of the Agreement between
21    the Taxpayer and the Department may not be further amended
22    during the term of the Agreement.
23    (g) A pass-through entity that has been awarded a credit
24under this Act, its shareholders, or its partners may treat
25some or all of the credit awarded pursuant to this Act as a tax
26payment for purposes of the Illinois Income Tax Act. The term

 

 

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1"tax payment" means a payment as described in Article 6 or
2Article 8 of the Illinois Income Tax Act or a composite payment
3made by a pass-through entity on behalf of any of its
4shareholders or partners to satisfy such shareholders' or
5partners' taxes imposed pursuant to subsections (a) and (b) of
6Section 201 of the Illinois Income Tax Act. In no event shall
7the amount of the award credited pursuant to this Act exceed
8the Illinois income tax liability of the pass-through entity or
9its shareholders or partners for the taxable year.
10(Source: P.A. 96-834, eff. 12-14-09; 96-836, eff. 12-16-09;
1196-905, eff. 6-4-10; 96-1000, eff. 7-2-10; 96-1534, eff.
123-4-11; 97-2, eff. 5-6-11; 97-636, eff. 6-1-12.)
 
13    (35 ILCS 10/5-20)
14    Sec. 5-20. Application for a project to create and retain
15new jobs.
16    (a) Any Taxpayer proposing a project located or planned to
17be located in Illinois may request consideration for
18designation of its project, by formal written letter of request
19or by formal application to the Department, in which the
20Applicant states its intent to make at least a specified level
21of investment and intends to hire or retain a specified number
22of full-time employees at a designated location in Illinois. As
23circumstances require, the Department may require a formal
24application from an Applicant and a formal letter of request
25for assistance.

 

 

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1    (b) In order to qualify for Credits under this Act, an
2Applicant's project must:
3        (1) if the Applicant has more than 100 employees,
4    involve an investment of at least $2,500,000 $5,000,000 in
5    capital improvements to be placed in service and to employ
6    at least 25 New Employees within the State as a direct
7    result of the project; if the Applicant has 100 or fewer
8    employees, then there is no capital investment
9    requirement; and
10        (1.5) if the Applicant has more than 100 employees,
11    employ a number of new employees in the State equal to the
12    lesser of (A) 10% of the number of full-time employees
13    employed by the applicant world-wide on the date the
14    application is filed with the Department or (B) 50 New
15    Employees; and, if the Applicant has 100 or fewer
16    employees, employ a number of new employees in the State
17    equal to the lesser of (A) 5% of the number of full-time
18    employees employed by the applicant world-wide on the date
19    the application is filed with the Department or (B) 50 New
20    Employees;
21        (2) (blank); involve an investment of at least an
22    amount (to be expressly specified by the Department and the
23    Committee) in capital improvements to be placed in service
24    and will employ at least an amount (to be expressly
25    specified by the Department and the Committee) of New
26    Employees within the State, provided that the Department

 

 

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1    and the Committee have determined that the project will
2    provide a substantial economic benefit to the State; or
3        (3) (blank). if the applicant has 100 or fewer
4    employees, involve an investment of at least $1,000,000 in
5    capital improvements to be placed in service and to employ
6    at least 5 New Employees within the State as a direct
7    result of the project.
8    (c) After receipt of an application, the Department may
9enter into an Agreement with the Applicant if the application
10is accepted in accordance with Section 5-25.
11(Source: P.A. 93-882, eff. 1-1-05.)
 
12    (35 ILCS 10/5-25)
13    Sec. 5-25. Review of Application.
14    (a) In addition to those duties granted under the Illinois
15Economic Development Board Act, the Illinois Economic
16Development Board shall form a Business Investment Committee
17for the purpose of making recommendations for applications. At
18the request of the Board, the Director of Commerce and Economic
19Opportunity or his or her designee, the Director of the
20Governor's Office of Management and Budget or his or her
21designee, the Director of Revenue or his or her designee, the
22Director of Employment Security or his or her designee, and an
23elected official of the affected locality, such as the chair of
24the county board or the mayor, may serve as members of the
25Committee to assist with its analysis and deliberations.

 

 

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1    (b) At the Department's request, the Committee shall
2convene, make inquiries, and conduct studies in the manner and
3by the methods as it deems desirable, review information with
4respect to Applicants, and make recommendations for projects to
5benefit the State. In making its recommendation that an
6Applicant's application for Credit should or should not be
7accepted, which shall occur within a reasonable time frame as
8determined by the nature of the application, the Committee
9shall determine that all the following conditions exist:
10        (1) The Applicant's project intends, as required by
11    subsection (b) of Section 5-20 to make the required
12    investment in the State and intends to hire the required
13    number of New Employees in Illinois as a result of that
14    project.
15        (2) The Applicant's project is economically sound and
16    will benefit the people of the State of Illinois by
17    increasing opportunities for employment and strengthen the
18    economy of Illinois.
19        (3) That, if not for the Credit, the project would not
20    occur in Illinois, which may be demonstrated by evidence
21    that receipt of the Credit is essential to the Applicant's
22    decision to create new jobs in the State, such as the
23    magnitude of the cost differential between Illinois and a
24    competing State; in addition, if the Applicant is seeking
25    an increase in the maximum amount of the Credit for
26    retained employees, the Applicant must provide any means

 

 

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1    including, but not limited to, evidence the Applicant has
2    multi-state location options and could reasonably and
3    efficiently locate outside of the State, or demonstrate
4    demonstration that at least one other state is being
5    considered for the project, or evidence the receipt of the
6    Credit is a major factor in the Applicant's decision and
7    that without the Credit, the Applicant likely would not
8    create new jobs in Illinois, or demonstration that
9    receiving the Credit is essential to the Applicant's
10    decision to create or retain new jobs in the State.
11        (4) A cost differential is identified, using best
12    available data, in the projected costs for the Applicant's
13    project compared to the costs in the competing state,
14    including the impact of the competing state's incentive
15    programs. The competing state's incentive programs shall
16    include state, local, private, and federal funds
17    available.
18        (5) The political subdivisions affected by the project
19    have committed local incentives with respect to the
20    project, considering local ability to assist.
21        (6) Awarding the Credit will result in an overall
22    positive fiscal impact to the State, as certified by the
23    Committee using the best available data.
24        (7) The Credit is not prohibited by Section 5-35 of
25    this Act.
26(Source: P.A. 94-793, eff. 5-19-06.)
 

 

 

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1    (35 ILCS 10/5-50)
2    Sec. 5-50. Contents of Agreements with Applicants. The
3Department shall enter into an Agreement with an Applicant that
4is awarded a Credit under this Act. The Agreement must include
5all of the following:
6        (1) A detailed description of the project that is the
7    subject of the Agreement, including the location and amount
8    of the investment and jobs created or retained.
9        (2) The duration of the Credit and the first taxable
10    year for which the Credit may be claimed.
11        (3) The Credit amount that will be allowed for each
12    taxable year.
13        (4) A requirement that the Taxpayer shall maintain
14    operations at the project location that shall be stated as
15    a minimum number of years not to exceed 10.
16        (5) A specific method for determining the number of New
17    Employees employed during a taxable year.
18        (6) A requirement that the Taxpayer shall annually
19    report to the Department the number of New Employees, the
20    Incremental Income Tax withheld in connection with the New
21    Employees, and any other information the Director needs to
22    perform the Director's duties under this Act.
23        (7) A requirement that the Director is authorized to
24    verify with the appropriate State agencies the amounts
25    reported under paragraph (6), and after doing so shall

 

 

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1    issue a certificate to the Taxpayer stating that the
2    amounts have been verified.
3        (8) A requirement that the Taxpayer shall provide
4    written notification to the Director not more than 30 days
5    after the Taxpayer makes or receives a proposal that would
6    transfer the Taxpayer's State tax liability obligations to
7    a successor Taxpayer.
8        (9) A detailed description of the number of New
9    Employees to be hired, and the occupation and payroll of
10    the full-time jobs to be created or retained as a result of
11    the project.
12        (10) The minimum investment the business enterprise
13    will make in capital improvements, the time period for
14    placing the property in service, and the designated
15    location in Illinois for the investment.
16        (11) A requirement that the Taxpayer shall provide
17    written notification to the Director and the Committee not
18    more than 30 days after the Taxpayer determines that the
19    minimum job creation or retention, employment payroll, or
20    investment no longer is being or will be achieved or
21    maintained as set forth in the terms and conditions of the
22    Agreement.
23        (12) A provision that, if the total number of New
24    Employees falls below a specified level, the allowance of
25    Credit shall be suspended until the number of New Employees
26    equals or exceeds the Agreement amount.

 

 

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1        (13) A detailed description of the items for which the
2    costs incurred by the Taxpayer will be included in the
3    limitation on the Credit provided in Section 5-30.
4        (13.5) A provision that, if the Taxpayer never meets
5    either the investment or job creation and retention
6    requirements specified in the Agreement during the entire
7    5-year period beginning on the first day of the first
8    taxable year in which the Agreement is executed and ending
9    on the last day of the fifth taxable year after the
10    Agreement is executed, then the Agreement is automatically
11    terminated on the last day of the fifth taxable year after
12    the Agreement is executed and the Taxpayer is not entitled
13    to the award of any credits for any of that 5-year period.
14        (13.7) A provision specifying that, if the Taxpayer
15    ceases principal operations with the intent to shut down
16    the project in the State permanently during the term of the
17    Agreement, then the entire credit amount awarded to the
18    Taxpayer prior to the date the Taxpayer ceases principal
19    operations shall be returned to the Department and shall be
20    reallocated to the local workforce investment area in which
21    the project was located.
22        (14) Any other performance conditions or contract
23    provisions as the Department determines are appropriate.
24    The Department shall post on its website the terms of each
25Agreement entered into under this Act on or after the effective
26date of this amendatory Act of the 97th General Assembly. Such

 

 

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1information shall be posted within 10 days after entering into
2the Agreement and must include the following:
3        (1) the name of the recipient business;
4        (2) the location of the project;
5        (3) the estimated value of the credit;
6        (4) the number of new jobs and, if applicable, retained
7    jobs pledged as a result of the project; and
8        (5) whether or not the project is located in an
9    underserved area.
10(Source: P.A. 97-2, eff. 5-6-11; 97-749, eff. 7-6-12.)
 
11    (35 ILCS 10/5-57 new)
12    Sec. 5-57. Supplier diversity goals; reports. Each
13taxpayer claiming a credit under this Act shall, no later than
14April 15 of each taxable year for which the taxpayer claims a
15credit under this Act, submit to the Department of Commerce and
16Economic Opportunity an annual report containing the
17information described in subsections (b), (c), (d), and (e) of
18Section 5-117 of the Public Utilities Act. Those reports shall
19be submitted in the form and manner required by the Department
20of Commerce and Economic Opportunity.
 
21    (35 ILCS 10/5-65)
22    Sec. 5-65. Noncompliance; notice; assessment. If the
23Director determines that a Taxpayer who has received a Credit
24under this Act is not complying with the requirements of the

 

 

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1Agreement or all of the provisions of this Act, the Director
2shall provide notice to the Taxpayer of the alleged
3noncompliance, and allow the Taxpayer a hearing under the
4provisions of the Illinois Administrative Procedure Act. If,
5after such notice and any hearing, the Director determines that
6a noncompliance exists, the Director shall issue to the
7Department of Revenue notice to that effect, stating the
8Noncompliance Date. If, during the term of an Agreement, the
9Taxpayer ceases operations at a project location that is the
10subject of that Agreement with the intent to terminate
11operations in the State, the Department and the Department of
12Revenue shall recapture from the Taxpayer the entire Credit
13amount awarded under that Agreement prior to the date the
14taxpayer ceases operations. The Department shall, subject to
15appropriation, reallocate the recaptured amounts to the local
16workforce investment area in which the project was located for
17the purposes of workforce development, expanded opportunities
18for unemployed persons, and expanded opportunities for women
19and minorities in the workforce.
20(Source: P.A. 91-476, eff. 8-11-99.)
 
21    (35 ILCS 10/5-70)
22    Sec. 5-70. Annual report. On or before July 1 each year,
23the Committee shall submit a report to the Department on the
24tax credit program under this Act to the Governor and the
25General Assembly. The report shall include information on the

 

 

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1number of Agreements that were entered into under this Act
2during the preceding calendar year, a description of the
3project that is the subject of each Agreement, an update on the
4status of projects under Agreements entered into before the
5preceding calendar year, and the sum of the Credits awarded
6under this Act. A copy of the report shall be delivered to the
7Governor and to each member of the General Assembly.
8    The report must include, for each Agreement:
9        (1) the original estimates of the value of the Credit
10    and the number of new jobs to be created and, if
11    applicable, the number of retained jobs;
12        (2) any relevant modifications to existing Agreements;
13        (3) a statement of the progress made by each Taxpayer
14    in meeting the terms of the original Agreement;
15        (4) a statement of wages paid to New Employees and, if
16    applicable, retained employees in the State;
17        (5) any information reported under Section 5-57 of this
18    Act; and
19        (6) a copy of the original Agreement.
20(Source: P.A. 91-476, eff. 8-11-99.)
 
21    (35 ILCS 10/5-77)
22    Sec. 5-77. Sunset of new Agreements. The Department shall
23not enter into any new Agreements under the provisions of
24Section 5-50 of this Act after June 30, 2022 April 30, 2017.
25(Source: P.A. 99-925, eff. 1-20-17.)
 

 

 

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1    Section 99. Effective date. This Act takes effect upon
2becoming law.