Rep. Michael J. Zalewski

Filed: 6/25/2017

 

 


 

 


 
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1
AMENDMENT TO HOUSE BILL 162

2    AMENDMENT NO. ______. Amend House Bill 162 by replacing
3everything after the enacting clause with the following:
 
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

 

 

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1that quarter.
2    (c) Payments. With respect to amounts withheld or required
3to be withheld on or after January 1, 2008:
4        (1) Semi-weekly payments. For each calendar year, each
5    employer who withheld or was required to withhold more than
6    $12,000 during the one-year period ending on June 30 of the
7    immediately preceding calendar year, payment must be made:
8            (A) on or before each Friday of the calendar year,
9        for taxes withheld or required to be withheld on the
10        immediately preceding Saturday, Sunday, Monday, or
11        Tuesday;
12            (B) on or before each Wednesday of the calendar
13        year, for taxes withheld or required to be withheld on
14        the immediately preceding Wednesday, Thursday, or
15        Friday.
16        Beginning with calendar year 2011, payments made under
17    this paragraph (1) of subsection (c) must be made by
18    electronic funds transfer.
19        (2) Semi-weekly payments. Any employer who withholds
20    or is required to withhold more than $12,000 in any quarter
21    of a calendar year is required to make payments on the
22    dates set forth under item (1) of this subsection (c) for
23    each remaining quarter of that calendar year and for the
24    subsequent calendar year.
25        (3) Monthly payments. Each employer, other than an
26    employer described in items (1) or (2) of this subsection,

 

 

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1    shall pay to the Department, on or before the 15th day of
2    each month the taxes withheld or required to be withheld
3    during the immediately preceding month.
4        (4) Payments with returns. Each employer shall pay to
5    the Department, on or before the due date for each return
6    required to be filed under this Section, any tax withheld
7    or required to be withheld during the period for which the
8    return is due and not previously paid to the Department.
9    (d) Regulatory authority. The Department may, by rule:
10        (1) Permit employers, in lieu of the requirements of
11    subsections (b) and (c), to file annual returns due on or
12    before January 31 of the year for taxes withheld or
13    required to be withheld during the previous calendar year
14    and, if the aggregate amounts required to be withheld by
15    the employer under this Article 7 (other than amounts
16    required to be withheld under Section 709.5) do not exceed
17    $1,000 for the previous calendar year, to pay the taxes
18    required to be shown on each such return no later than the
19    due date for such return.
20        (2) Provide that any payment required to be made under
21    subsection (c)(1) or (c)(2) is deemed to be timely to the
22    extent paid by electronic funds transfer on or before the
23    due date for deposit of federal income taxes withheld from,
24    or federal employment taxes due with respect to, the wages
25    from which the Illinois taxes were withheld.
26        (3) Designate one or more depositories to which payment

 

 

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1    of taxes required to be withheld under this Article 7 must
2    be paid by some or all employers.
3        (4) Increase the threshold dollar amounts at which
4    employers are required to make semi-weekly payments under
5    subsection (c)(1) or (c)(2).
6    (e) Annual return and payment. Every employer who deducts
7and withholds or is required to deduct and withhold tax from a
8person engaged in domestic service employment, as that term is
9defined in Section 3510 of the Internal Revenue Code, may
10comply with the requirements of this Section with respect to
11such employees by filing an annual return and paying the taxes
12required to be deducted and withheld on or before the 15th day
13of the fourth month following the close of the employer's
14taxable year. The Department may allow the employer's return to
15be submitted with the employer's individual income tax return
16or to be submitted with a return due from the employer under
17Section 1400.2 of the Unemployment Insurance Act.
18    (f) Magnetic media and electronic filing. Any W-2 Form
19that, under the Internal Revenue Code and regulations
20promulgated thereunder, is required to be submitted to the
21Internal Revenue Service on magnetic media or electronically
22must also be submitted to the Department on magnetic media or
23electronically for Illinois purposes, if required by the
24Department.
25    (g) For amounts deducted or withheld after December 31,
262009, a taxpayer who makes an election under subsection (f) of

 

 

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

 

 

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1who retains income tax withholdings under subsection (f) of
2Section 5-15 of the Economic Development for a Growing Economy
3Tax Credit Act must make a return with respect to such taxes
4and retained amounts in the form and manner that the
5Department, by rule, requires and pay to the Department or to a
6depositary designated by the Department those withheld taxes
7not retained by the taxpayer. For purposes of this subsection
8(g), the term taxpayer shall include taxpayer and members of
9the taxpayer's unitary business group as defined under
10paragraph (27) of subsection (a) of Section 1501 of this Act.
11This Section is exempt from the provisions of Section 250 of
12this Act. No credit awarded under the Economic Development for
13a Growing Economy Tax Credit Act for agreements entered into on
14or after January 1, 2015 may be credited against payments due
15under this Section.
16    (h) An employer may claim a credit against payments due
17under this Section for amounts withheld during the first
18calendar year ending after the date on which a tax credit
19certificate was issued under Section 35 of the Small Business
20Job Creation Tax Credit Act. The credit shall be equal to the
21amount shown on the certificate, but may not reduce the
22taxpayer's obligation for any payment due under this Section to
23less than zero. If the amount of the credit exceeds the total
24payments due under this Section with respect to amounts
25withheld during the calendar year, the excess may be carried
26forward and applied against the taxpayer's liability under this

 

 

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1Section in the 5 succeeding calendar years. The credit shall be
2applied to the earliest year for which there is a tax
3liability. If there are credits from more than one calendar
4year that are available to offset a liability, the earlier
5credit shall be applied first. This Section is exempt from the
6provisions of Section 250 of this Act.
7(Source: P.A. 96-834, eff. 12-14-09; 96-888, eff. 4-13-10;
896-905, eff. 6-4-10; 96-1027, eff. 7-12-10; 97-333, eff.
98-12-11; 97-507, eff. 8-23-11.)
 
10    Section 10. The Economic Development for a Growing Economy
11Tax Credit Act is amended by changing Sections 5-5, 5-15, 5-20,
125-25, 5-50, 5-65, 5-70 and 5-77 and by adding Section 5-57 as
13follows:
 
14    (35 ILCS 10/5-5)
15    Sec. 5-5. Definitions. As used in this Act:
16    "Agreement" means the Agreement between a Taxpayer and the
17Department under the provisions of Section 5-50 of this Act.
18    "Applicant" means a Taxpayer that is operating a business
19located or that the Taxpayer plans to locate within the State
20of Illinois and that is engaged in interstate or intrastate
21commerce for the purpose of manufacturing, processing,
22assembling, warehousing, or distributing products, conducting
23research and development, providing tourism services, or
24providing services in interstate commerce, office industries,

 

 

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

 

 

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1attributable to New Employees at the Applicant's project and
2(ii) 10% of the training costs of New Employees; or (2) 100% of
3the Incremental Income Tax attributable to New Employees at the
4Applicant's project. However, if the project is located in an
5underserved area, then the amount of the Credit may not exceed
6the lesser of: (1) the sum of (i) 75% of the Incremental Income
7Tax attributable to New Employees at the Applicant's project
8and (ii) 10% of the training costs of New Employees; or (2)
9100% of the Incremental Income Tax attributable to New
10Employees at the Applicant's project. If an Applicant agrees to
11hire the required number of New Employees, then the maximum
12amount of the Credit for that Applicant may be increased by an
13amount not to exceed 25% of the Incremental Income Tax
14attributable to retained employees at the Applicant's project;
15provided that, in order to receive the increase for retained
16employees, the Applicant must provide the additional evidence
17required under paragraph (3) of subsection (b) of Section 5-25.
18    "Department" means the Department of Commerce and Economic
19Opportunity.
20    "Director" means the Director of Commerce and Economic
21Opportunity.
22    "Full-time Employee" means an individual who is employed
23for consideration for at least 35 hours each week or who
24renders any other standard of service generally accepted by
25industry custom or practice as full-time employment. An
26individual for whom a W-2 is issued by a Professional Employer

 

 

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1Organization (PEO) is a full-time employee if employed in the
2service of the Applicant for consideration for at least 35
3hours each week or who renders any other standard of service
4generally accepted by industry custom or practice as full-time
5employment to Applicant.
6    "Incremental Income Tax" means the total amount withheld
7during the taxable year from the compensation of New Employees
8and, if applicable, retained employees under Article 7 of the
9Illinois Income Tax Act arising from employment at a project
10that is the subject of an Agreement.
11    "New Employee" means:
12        (a) A Full-time Employee first employed by a Taxpayer
13    in the project that is the subject of an Agreement and who
14    is hired after the Taxpayer enters into the tax credit
15    Agreement.
16        (b) The term "New Employee" does not include:
17            (1) an employee of the Taxpayer who performs a job
18        that was previously performed by another employee, if
19        that job existed for at least 6 months before hiring
20        the employee;
21            (2) an employee of the Taxpayer who was previously
22        employed in Illinois by a Related Member of the
23        Taxpayer and whose employment was shifted to the
24        Taxpayer after the Taxpayer entered into the tax credit
25        Agreement; or
26            (3) a child, grandchild, parent, or spouse, other

 

 

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1        than a spouse who is legally separated from the
2        individual, of any individual who has a direct or an
3        indirect ownership interest of at least 5% in the
4        profits, capital, or value of the Taxpayer.
5        (c) Notwithstanding paragraph (1) of subsection (b),
6    an employee may be considered a New Employee under the
7    Agreement if the employee performs a job that was
8    previously performed by an employee who was:
9            (1) treated under the Agreement as a New Employee;
10        and
11            (2) promoted by the Taxpayer to another job.
12        (d) Notwithstanding subsection (a), the Department may
13    award Credit to an Applicant with respect to an employee
14    hired prior to the date of the Agreement if:
15            (1) the Applicant is in receipt of a letter from
16        the Department stating an intent to enter into a credit
17        Agreement;
18            (2) the letter described in paragraph (1) is issued
19        by the Department not later than 15 days after the
20        effective date of this Act; and
21            (3) the employee was hired after the date the
22        letter described in paragraph (1) was issued.
23    "Noncompliance Date" means, in the case of a Taxpayer that
24is not complying with the requirements of the Agreement or the
25provisions of this Act, the day following the last date upon
26which the Taxpayer was in compliance with the requirements of

 

 

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1the Agreement and the provisions of this Act, as determined by
2the Director, pursuant to Section 5-65.
3    "Pass Through Entity" means an entity that is exempt from
4the tax under subsection (b) or (c) of Section 205 of the
5Illinois Income Tax Act.
6    "Professional Employer Organization" (PEO) means an
7employee leasing company, as defined in Section 206.1(A)(2) of
8the Illinois Unemployment Insurance Act.
9    "Related Member" means a person that, with respect to the
10Taxpayer during any portion of the taxable year, is any one of
11the following:
12        (1) An individual stockholder, if the stockholder and
13    the members of the stockholder's family (as defined in
14    Section 318 of the Internal Revenue Code) own directly,
15    indirectly, beneficially, or constructively, in the
16    aggregate, at least 50% of the value of the Taxpayer's
17    outstanding stock.
18        (2) A partnership, estate, or trust and any partner or
19    beneficiary, if the partnership, estate, or trust, and its
20    partners or beneficiaries own directly, indirectly,
21    beneficially, or constructively, in the aggregate, at
22    least 50% of the profits, capital, stock, or value of the
23    Taxpayer.
24        (3) A corporation, and any party related to the
25    corporation in a manner that would require an attribution
26    of stock from the corporation to the party or from the

 

 

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1    party to the corporation under the attribution rules of
2    Section 318 of the Internal Revenue Code, if the Taxpayer
3    owns directly, indirectly, beneficially, or constructively
4    at least 50% of the value of the corporation's outstanding
5    stock.
6        (4) A corporation and any party related to that
7    corporation in a manner that would require an attribution
8    of stock from the corporation to the party or from the
9    party to the corporation under the attribution rules of
10    Section 318 of the Internal Revenue Code, if the
11    corporation and all such related parties own in the
12    aggregate at least 50% of the profits, capital, stock, or
13    value of the Taxpayer.
14        (5) A person to or from whom there is attribution of
15    stock ownership in accordance with Section 1563(e) of the
16    Internal Revenue Code, except, for purposes of determining
17    whether a person is a Related Member under this paragraph,
18    20% shall be substituted for 5% wherever 5% appears in
19    Section 1563(e) of the Internal Revenue Code.
20    "Taxpayer" means an individual, corporation, partnership,
21or other entity that has any Illinois Income Tax liability.
22    "Underserved area" means a geographic area that meets one
23or more of the following conditions:
24        (1) the area has a poverty rate of at least 20%
25    according to the latest federal decennial census;
26        (2) 75% or more of the children in the area participate

 

 

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1    in the federal free lunch program according to reported
2    statistics from the State Board of Education;
3        (3) at least 20% of the households in the area receive
4    assistance under the Supplemental Nutrition Assistance
5    Program (SNAP); or
6        (4) the area has an average unemployment rate, as
7    determined by the Illinois Department of Employment
8    Security, that is more than 120% of the national
9    unemployment average, as determined by the U.S. Department
10    of Labor, for a period of at least 2 consecutive calendar
11    years preceding the date of the application.
12(Source: P.A. 94-793, eff. 5-19-06; 95-375, eff. 8-23-07.)
 
13    (35 ILCS 10/5-15)
14    Sec. 5-15. Tax Credit Awards. Subject to the conditions set
15forth in this Act, a Taxpayer is entitled to a Credit against
16or, as described in subsection (g) of this Section, a payment
17towards taxes imposed pursuant to subsections (a) and (b) of
18Section 201 of the Illinois Income Tax Act that may be imposed
19on the Taxpayer for a taxable year beginning on or after
20January 1, 1999, if the Taxpayer is awarded a Credit by the
21Department under this Act for that taxable year.
22    (a) The Department shall make Credit awards under this Act
23to foster job creation and retention in Illinois.
24    (b) A person that proposes a project to create new jobs in
25Illinois must enter into an Agreement with the Department for

 

 

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1the Credit under this Act.
2    (c) The Credit shall be claimed for the taxable years
3specified in the Agreement.
4    (d) The Credit shall not exceed the Incremental Income Tax
5attributable to the project that is the subject of the
6Agreement.
7    (e) Nothing herein shall prohibit a Tax Credit Award to an
8Applicant that uses a PEO if all other award criteria are
9satisfied.
10    (f) In lieu of the Credit allowed under this Act against
11the taxes imposed pursuant to subsections (a) and (b) of
12Section 201 of the Illinois Income Tax Act for any taxable year
13ending on or after December 31, 2009, for Taxpayers that
14entered into Agreements prior to January 1, 2015 and otherwise
15meet the criteria set forth in this subsection (f), the
16Taxpayer may elect to claim the Credit against its obligation
17to pay over withholding under Section 704A of the Illinois
18Income Tax Act.
19        (1) The election under this subsection (f) may be made
20    only by a Taxpayer that (i) is primarily engaged in one of
21    the following business activities: water purification and
22    treatment, motor vehicle metal stamping, automobile
23    manufacturing, automobile and light duty motor vehicle
24    manufacturing, motor vehicle manufacturing, light truck
25    and utility vehicle manufacturing, heavy duty truck
26    manufacturing, motor vehicle body manufacturing, cable

 

 

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1    television infrastructure design or manufacturing, or
2    wireless telecommunication or computing terminal device
3    design or manufacturing for use on public networks and (ii)
4    meets the following criteria:
5            (A) the Taxpayer (i) had an Illinois net loss or an
6        Illinois net loss deduction under Section 207 of the
7        Illinois Income Tax Act for the taxable year in which
8        the Credit is awarded, (ii) employed a minimum of 1,000
9        full-time employees in this State during the taxable
10        year in which the Credit is awarded, (iii) has an
11        Agreement under this Act on December 14, 2009 (the
12        effective date of Public Act 96-834), and (iv) is in
13        compliance with all provisions of that Agreement;
14            (B) the Taxpayer (i) had an Illinois net loss or an
15        Illinois net loss deduction under Section 207 of the
16        Illinois Income Tax Act for the taxable year in which
17        the Credit is awarded, (ii) employed a minimum of 1,000
18        full-time employees in this State during the taxable
19        year in which the Credit is awarded, and (iii) has
20        applied for an Agreement within 365 days after December
21        14, 2009 (the effective date of Public Act 96-834);
22            (C) the Taxpayer (i) had an Illinois net operating
23        loss carryforward under Section 207 of the Illinois
24        Income Tax Act in a taxable year ending during calendar
25        year 2008, (ii) has applied for an Agreement within 150
26        days after the effective date of this amendatory Act of

 

 

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1        the 96th General Assembly, (iii) creates at least 400
2        new jobs in Illinois, (iv) retains at least 2,000 jobs
3        in Illinois that would have been at risk of relocation
4        out of Illinois over a 10-year period, and (v) makes a
5        capital investment of at least $75,000,000;
6            (D) the Taxpayer (i) had an Illinois net operating
7        loss carryforward under Section 207 of the Illinois
8        Income Tax Act in a taxable year ending during calendar
9        year 2009, (ii) has applied for an Agreement within 150
10        days after the effective date of this amendatory Act of
11        the 96th General Assembly, (iii) creates at least 150
12        new jobs, (iv) retains at least 1,000 jobs in Illinois
13        that would have been at risk of relocation out of
14        Illinois over a 10-year period, and (v) makes a capital
15        investment of at least $57,000,000; or
16            (E) the Taxpayer (i) employed at least 2,500
17        full-time employees in the State during the year in
18        which the Credit is awarded, (ii) commits to make at
19        least $500,000,000 in combined capital improvements
20        and project costs under the Agreement, (iii) applies
21        for an Agreement between January 1, 2011 and June 30,
22        2011, (iv) executes an Agreement for the Credit during
23        calendar year 2011, and (v) was incorporated no more
24        than 5 years before the filing of an application for an
25        Agreement.
26        (1.5) The election under this subsection (f) may also

 

 

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1    be made by a Taxpayer for any Credit awarded pursuant to an
2    agreement that was executed between January 1, 2011 and
3    June 30, 2011, if the Taxpayer (i) is primarily engaged in
4    the manufacture of inner tubes or tires, or both, from
5    natural and synthetic rubber, (ii) employs a minimum of
6    2,400 full-time employees in Illinois at the time of
7    application, (iii) creates at least 350 full-time jobs and
8    retains at least 250 full-time jobs in Illinois that would
9    have been at risk of being created or retained outside of
10    Illinois, and (iv) makes a capital investment of at least
11    $200,000,000 at the project location.
12        (1.6) The election under this subsection (f) may also
13    be made by a Taxpayer for any Credit awarded pursuant to an
14    agreement that was executed within 150 days after the
15    effective date of this amendatory Act of the 97th General
16    Assembly, if the Taxpayer (i) is primarily engaged in the
17    operation of a discount department store, (ii) maintains
18    its corporate headquarters in Illinois, (iii) employs a
19    minimum of 4,250 full-time employees at its corporate
20    headquarters in Illinois at the time of application, (iv)
21    retains at least 4,250 full-time jobs in Illinois that
22    would have been at risk of being relocated outside of
23    Illinois, (v) had a minimum of $40,000,000,000 in total
24    revenue in 2010, and (vi) makes a capital investment of at
25    least $300,000,000 at the project location.
26        (1.7) Notwithstanding any other provision of law, the

 

 

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1    election under this subsection (f) may also be made by a
2    Taxpayer for any Credit awarded pursuant to an agreement
3    that was executed or applied for on or after July 1, 2011
4    and on or before March 31, 2012, if the Taxpayer is
5    primarily engaged in the manufacture of original and
6    aftermarket filtration parts and products for automobiles,
7    motor vehicles, light duty motor vehicles, light trucks and
8    utility vehicles, and heavy duty trucks, (ii) employs a
9    minimum of 1,000 full-time employees in Illinois at the
10    time of application, (iii) creates at least 250 full-time
11    jobs in Illinois, (iv) relocates its corporate
12    headquarters to Illinois from another state, and (v) makes
13    a capital investment of at least $4,000,000 at the project
14    location.
15        (2) An election under this subsection shall allow the
16    credit to be taken against payments otherwise due under
17    Section 704A of the Illinois Income Tax Act during the
18    first calendar year beginning after the end of the taxable
19    year in which the credit is awarded under this Act.
20        (3) The election shall be made in the form and manner
21    required by the Illinois Department of Revenue and, once
22    made, shall be irrevocable.
23        (4) If a Taxpayer who meets the requirements of
24    subparagraph (A) of paragraph (1) of this subsection (f)
25    elects to claim the Credit against its withholdings as
26    provided in this subsection (f), then, on and after the

 

 

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1    date of the election, the terms of the Agreement between
2    the Taxpayer and the Department may not be further amended
3    during the term of the Agreement.
4    (g) A pass-through entity that has been awarded a credit
5under this Act, its shareholders, or its partners may treat
6some or all of the credit awarded pursuant to this Act as a tax
7payment for purposes of the Illinois Income Tax Act. The term
8"tax payment" means a payment as described in Article 6 or
9Article 8 of the Illinois Income Tax Act or a composite payment
10made by a pass-through entity on behalf of any of its
11shareholders or partners to satisfy such shareholders' or
12partners' taxes imposed pursuant to subsections (a) and (b) of
13Section 201 of the Illinois Income Tax Act. In no event shall
14the amount of the award credited pursuant to this Act exceed
15the Illinois income tax liability of the pass-through entity or
16its shareholders or partners for the taxable year.
17(Source: P.A. 96-834, eff. 12-14-09; 96-836, eff. 12-16-09;
1896-905, eff. 6-4-10; 96-1000, eff. 7-2-10; 96-1534, eff.
193-4-11; 97-2, eff. 5-6-11; 97-636, eff. 6-1-12.)
 
20    (35 ILCS 10/5-20)
21    Sec. 5-20. Application for a project to create and retain
22new jobs.
23    (a) Any Taxpayer proposing a project located or planned to
24be located in Illinois may request consideration for
25designation of its project, by formal written letter of request

 

 

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1or by formal application to the Department, in which the
2Applicant states its intent to make at least a specified level
3of investment and intends to hire or retain a specified number
4of full-time employees at a designated location in Illinois. As
5circumstances require, the Department may require a formal
6application from an Applicant and a formal letter of request
7for assistance.
8    (b) In order to qualify for Credits under this Act, an
9Applicant's project must:
10        (1) if the Applicant has more than 100 employees,
11    involve an investment of at least $2,500,000 $5,000,000 in
12    capital improvements to be placed in service and to employ
13    at least 25 New Employees within the State as a direct
14    result of the project; if the Applicant has 100 or fewer
15    employees, then there is no capital investment
16    requirement; and
17        (1.5) if the Applicant has more than 100 employees,
18    employ a number of new employees in the State equal to the
19    lesser of (A) 10% of the number of full-time employees
20    employed by the applicant world-wide on the date the
21    application is filed with the Department or (B) 50 New
22    Employees; and, if the Applicant has 100 or fewer
23    employees, employ a number of new employees in the State
24    equal to the lesser of (A) 5% of the number of full-time
25    employees employed by the applicant world-wide on the date
26    the application is filed with the Department or (B) 50 New

 

 

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1    Employees;
2        (2) (blank); involve an investment of at least an
3    amount (to be expressly specified by the Department and the
4    Committee) in capital improvements to be placed in service
5    and will employ at least an amount (to be expressly
6    specified by the Department and the Committee) of New
7    Employees within the State, provided that the Department
8    and the Committee have determined that the project will
9    provide a substantial economic benefit to the State; or
10        (3) (blank). if the applicant has 100 or fewer
11    employees, involve an investment of at least $1,000,000 in
12    capital improvements to be placed in service and to employ
13    at least 5 New Employees within the State as a direct
14    result of the project.
15    (c) After receipt of an application, the Department may
16enter into an Agreement with the Applicant if the application
17is accepted in accordance with Section 5-25.
18(Source: P.A. 93-882, eff. 1-1-05.)
 
19    (35 ILCS 10/5-25)
20    Sec. 5-25. Review of Application.
21    (a) In addition to those duties granted under the Illinois
22Economic Development Board Act, the Illinois Economic
23Development Board shall form a Business Investment Committee
24for the purpose of making recommendations for applications. At
25the request of the Board, the Director of Commerce and Economic

 

 

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1Opportunity or his or her designee, the Director of the
2Governor's Office of Management and Budget or his or her
3designee, the Director of Revenue or his or her designee, the
4Director of Employment Security or his or her designee, and an
5elected official of the affected locality, such as the chair of
6the county board or the mayor, may serve as members of the
7Committee to assist with its analysis and deliberations.
8    (b) At the Department's request, the Committee shall
9convene, make inquiries, and conduct studies in the manner and
10by the methods as it deems desirable, review information with
11respect to Applicants, and make recommendations for projects to
12benefit the State. In making its recommendation that an
13Applicant's application for Credit should or should not be
14accepted, which shall occur within a reasonable time frame as
15determined by the nature of the application, the Committee
16shall determine that all the following conditions exist:
17        (1) The Applicant's project intends, as required by
18    subsection (b) of Section 5-20 to make the required
19    investment in the State and intends to hire the required
20    number of New Employees in Illinois as a result of that
21    project.
22        (2) The Applicant's project is economically sound and
23    will benefit the people of the State of Illinois by
24    increasing opportunities for employment and strengthen the
25    economy of Illinois.
26        (3) That, if not for the Credit, the project would not

 

 

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1    occur in Illinois, which may be demonstrated by evidence
2    that receipt of the Credit is essential to the Applicant's
3    decision to create new jobs in the State, such as the
4    magnitude of the cost differential between Illinois and a
5    competing State; in addition, if the Applicant is seeking
6    an increase in the maximum amount of the Credit for
7    retained employees, the Applicant must provide any means
8    including, but not limited to, evidence the Applicant has
9    multi-state location options and could reasonably and
10    efficiently locate outside of the State, or demonstrate
11    demonstration that at least one other state is being
12    considered for the project, or evidence the receipt of the
13    Credit is a major factor in the Applicant's decision and
14    that without the Credit, the Applicant likely would not
15    create new jobs in Illinois, or demonstration that
16    receiving the Credit is essential to the Applicant's
17    decision to create or retain new jobs in the State.
18        (4) A cost differential is identified, using best
19    available data, in the projected costs for the Applicant's
20    project compared to the costs in the competing state,
21    including the impact of the competing state's incentive
22    programs. The competing state's incentive programs shall
23    include state, local, private, and federal funds
24    available.
25        (5) The political subdivisions affected by the project
26    have committed local incentives with respect to the

 

 

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1    project, considering local ability to assist.
2        (6) Awarding the Credit will result in an overall
3    positive fiscal impact to the State, as certified by the
4    Committee using the best available data.
5        (7) The Credit is not prohibited by Section 5-35 of
6    this Act.
7(Source: P.A. 94-793, eff. 5-19-06.)
 
8    (35 ILCS 10/5-50)
9    Sec. 5-50. Contents of Agreements with Applicants. The
10Department shall enter into an Agreement with an Applicant that
11is awarded a Credit under this Act. The Agreement must include
12all of the following:
13        (1) A detailed description of the project that is the
14    subject of the Agreement, including the location and amount
15    of the investment and jobs created or retained.
16        (2) The duration of the Credit and the first taxable
17    year for which the Credit may be claimed.
18        (3) The Credit amount that will be allowed for each
19    taxable year.
20        (4) A requirement that the Taxpayer shall maintain
21    operations at the project location that shall be stated as
22    a minimum number of years not to exceed 10.
23        (5) A specific method for determining the number of New
24    Employees employed during a taxable year.
25        (6) A requirement that the Taxpayer shall annually

 

 

10000HB0162ham001- 26 -LRB100 02290 AXK 27704 a

1    report to the Department the number of New Employees, the
2    Incremental Income Tax withheld in connection with the New
3    Employees, and any other information the Director needs to
4    perform the Director's duties under this Act.
5        (7) A requirement that the Director is authorized to
6    verify with the appropriate State agencies the amounts
7    reported under paragraph (6), and after doing so shall
8    issue a certificate to the Taxpayer stating that the
9    amounts have been verified.
10        (8) A requirement that the Taxpayer shall provide
11    written notification to the Director not more than 30 days
12    after the Taxpayer makes or receives a proposal that would
13    transfer the Taxpayer's State tax liability obligations to
14    a successor Taxpayer.
15        (9) A detailed description of the number of New
16    Employees to be hired, and the occupation and payroll of
17    the full-time jobs to be created or retained as a result of
18    the project.
19        (10) The minimum investment the business enterprise
20    will make in capital improvements, the time period for
21    placing the property in service, and the designated
22    location in Illinois for the investment.
23        (11) A requirement that the Taxpayer shall provide
24    written notification to the Director and the Committee not
25    more than 30 days after the Taxpayer determines that the
26    minimum job creation or retention, employment payroll, or

 

 

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1    investment no longer is being or will be achieved or
2    maintained as set forth in the terms and conditions of the
3    Agreement.
4        (12) A provision that, if the total number of New
5    Employees falls below a specified level, the allowance of
6    Credit shall be suspended until the number of New Employees
7    equals or exceeds the Agreement amount.
8        (13) A detailed description of the items for which the
9    costs incurred by the Taxpayer will be included in the
10    limitation on the Credit provided in Section 5-30.
11        (13.5) A provision that, if the Taxpayer never meets
12    either the investment or job creation and retention
13    requirements specified in the Agreement during the entire
14    5-year period beginning on the first day of the first
15    taxable year in which the Agreement is executed and ending
16    on the last day of the fifth taxable year after the
17    Agreement is executed, then the Agreement is automatically
18    terminated on the last day of the fifth taxable year after
19    the Agreement is executed and the Taxpayer is not entitled
20    to the award of any credits for any of that 5-year period.
21        (13.7) A provision specifying that, if the Taxpayer
22    ceases principal operations with the intent to shut down
23    the project in the State permanently during the term of the
24    Agreement, then the entire credit amount awarded to the
25    Taxpayer prior to the date the Taxpayer ceases principal
26    operations shall be returned to the Department and shall be

 

 

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1    reallocated to the local workforce investment area in which
2    the project was located.
3        (14) Any other performance conditions or contract
4    provisions as the Department determines are appropriate.
5    The Department shall post on its website the terms of each
6Agreement entered into under this Act on or after the effective
7date of this amendatory Act of the 97th General Assembly. Such
8information shall be posted within 10 days after entering into
9the Agreement and must include the following:
10        (1) the name of the recipient business;
11        (2) the location of the project;
12        (3) the estimated value of the credit;
13        (4) the number of new jobs and, if applicable, retained
14    jobs pledged as a result of the project; and
15        (5) whether or not the project is located in an
16    underserved area.
17(Source: P.A. 97-2, eff. 5-6-11; 97-749, eff. 7-6-12.)
 
18    (35 ILCS 10/5-57 new)
19    Sec. 5-57. Supplier diversity goals; reports. Each
20taxpayer claiming a credit under this Act shall, no later than
21April 15 of each taxable year for which the taxpayer claims a
22credit under this Act, submit to the Department of Commerce and
23Economic Opportunity an annual report containing the
24information described in subsections (b), (c), (d), and (e) of
25Section 5-117 of the Public Utilities Act. Those reports shall

 

 

10000HB0162ham001- 29 -LRB100 02290 AXK 27704 a

1be submitted in the form and manner required by the Department
2of Commerce and Economic Opportunity.
 
3    (35 ILCS 10/5-65)
4    Sec. 5-65. Noncompliance; notice; assessment. If the
5Director determines that a Taxpayer who has received a Credit
6under this Act is not complying with the requirements of the
7Agreement or all of the provisions of this Act, the Director
8shall provide notice to the Taxpayer of the alleged
9noncompliance, and allow the Taxpayer a hearing under the
10provisions of the Illinois Administrative Procedure Act. If,
11after such notice and any hearing, the Director determines that
12a noncompliance exists, the Director shall issue to the
13Department of Revenue notice to that effect, stating the
14Noncompliance Date. If, during the term of an Agreement, the
15Taxpayer ceases operations at a project location that is the
16subject of that Agreement with the intent to terminate
17operations in the State, the Department and the Department of
18Revenue shall recapture from the Taxpayer the entire Credit
19amount awarded under that Agreement prior to the date the
20taxpayer ceases operations. The Department shall, subject to
21appropriation, reallocate the recaptured amounts to the local
22workforce investment area in which the project was located for
23the purposes of workforce development, expanded opportunities
24for unemployed persons, and expanded opportunities for women
25and minorities in the workforce.

 

 

10000HB0162ham001- 30 -LRB100 02290 AXK 27704 a

1(Source: P.A. 91-476, eff. 8-11-99.)
 
2    (35 ILCS 10/5-70)
3    Sec. 5-70. Annual report. On or before July 1 each year,
4the Committee shall submit a report to the Department on the
5tax credit program under this Act to the Governor and the
6General Assembly. The report shall include information on the
7number of Agreements that were entered into under this Act
8during the preceding calendar year, a description of the
9project that is the subject of each Agreement, an update on the
10status of projects under Agreements entered into before the
11preceding calendar year, and the sum of the Credits awarded
12under this Act. A copy of the report shall be delivered to the
13Governor and to each member of the General Assembly.
14    The report must include, for each Agreement:
15        (1) the original estimates of the value of the Credit
16    and the number of new jobs to be created and, if
17    applicable, the number of retained jobs;
18        (2) any relevant modifications to existing Agreements;
19        (3) a statement of the progress made by each Taxpayer
20    in meeting the terms of the original Agreement;
21        (4) a statement of wages paid to New Employees and, if
22    applicable, retained employees in the State;
23        (5) any information reported under Section 5-57 of this
24    Act; and
25        (6) a copy of the original Agreement.

 

 

10000HB0162ham001- 31 -LRB100 02290 AXK 27704 a

1(Source: P.A. 91-476, eff. 8-11-99.)
 
2    (35 ILCS 10/5-77)
3    Sec. 5-77. Sunset of new Agreements. The Department shall
4not enter into any new Agreements under the provisions of
5Section 5-50 of this Act after June 30, 2022 April 30, 2017.
6(Source: P.A. 99-925, eff. 1-20-17.)
 
7    Section 99. Effective date. This Act takes effect upon
8becoming law.".