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Full Text of SB1642  99th General Assembly

SB1642 99TH GENERAL ASSEMBLY

  
  

 


 
99TH GENERAL ASSEMBLY
State of Illinois
2015 and 2016
SB1642

 

Introduced 2/20/2015, by Sen. Steve Stadelman - Dave Syverson - David Koehler - Linda Holmes - Michael Noland

 

SYNOPSIS AS INTRODUCED:
 
35 ILCS 5/221
215 ILCS 5/409.1 new

    Amends the Illinois Income Tax Act and the Illinois Insurance Code. Provides that all or a portion of the income tax credit awarded for the restoration and preservation of a qualified historic structure located in a River Edge Redevelopment Zone may instead be taken as a credit against privilege and retaliatory taxes paid under the Illinois Insurance Code. Provides that the Historic Preservation Agency may issue a certification to the taxpayer stating that, if the project is completed as proposed, the project will qualify for the credits. Contains provisions concerning transfers of credits. Provides that the credit may be carried forward. Provides that the credit sunsets on January 1, 2022 (currently, January 1, 2017). Effective immediately.


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FISCAL NOTE ACT MAY APPLY

 

 

A BILL FOR

 

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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 221 as follows:
 
6    (35 ILCS 5/221)
7    Sec. 221. Rehabilitation costs; qualified historic
8properties; River Edge Redevelopment Zone.
9    (a) For taxable years beginning on or after January 1, 2012
10and ending prior to January 1, 2022 January 1, 2017, there
11shall be allowed a tax credit against the tax imposed by (i)
12subsections (a) and (b) of Section 201 of this Act and (ii)
13taxes imposed under Sections 409, 413, 444, and 444.1 of the
14Illinois Insurance Code in an aggregate amount equal to 25% of
15qualified expenditures incurred by a qualified taxpayer during
16the taxable year in the restoration and preservation of a
17qualified historic structure located in a River Edge
18Redevelopment Zone pursuant to a qualified rehabilitation
19plan, provided that the total amount of such expenditures (i)
20must equal $5,000 or more and (ii) must exceed 50% of the
21purchase price of the property.
22    (b) To obtain a tax credit pursuant to this Section, the
23taxpayer must apply with the Department of Commerce and

 

 

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1Economic Opportunity. The Department of Commerce and Economic
2Opportunity, in consultation with the Historic Preservation
3Agency, shall determine the amount of eligible rehabilitation
4costs and expenses. The Historic Preservation Agency shall
5determine whether the rehabilitation is consistent with the
6standards of the Secretary of the United States Department of
7the Interior for rehabilitation. The Historic Preservation
8Agency may, after its approval of any plan of rehabilitation
9and prior to the completion of any project, issue a
10certification to the taxpayer stating that, if the project is
11completed as proposed, the rehabilitation work will qualify for
12the credits. Upon completion and review of the project, the
13Department of Commerce and Economic Opportunity shall issue a
14certificate in the amount of the eligible credits. At the time
15the certificate is issued, an issuance fee up to the maximum
16amount of 2% of the amount of the credits issued by the
17certificate may be collected from the applicant to administer
18the provisions of this Section. If collected, this issuance fee
19shall be deposited into the Historic Property Administrative
20Fund, a special fund created in the State treasury. Subject to
21appropriation, moneys in the Historic Property Administrative
22Fund shall be evenly divided between the Department of Commerce
23and Economic Opportunity and the Historic Preservation Agency
24to reimburse the Department of Commerce and Economic
25Opportunity and the Historic Preservation Agency for the costs
26associated with administering this Section. The taxpayer must

 

 

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1attach the certificate to the tax return on which the credits
2are to be claimed. The Department of Commerce and Economic
3Opportunity may adopt rules to implement this Section.
4    (c) The tax credit under this Section may not reduce the
5taxpayer's liability to less than zero. The credit may not be
6carried back. If the amount of the credit exceeds the tax
7liability for the year, the excess may be carried forward and
8applied to the tax liability of the 5 taxable years following
9the excess credit year. The credit shall be applied to the
10earliest year for which there is a tax liability. If there are
11credits from more than one tax year that are available to
12offset a liability, the earlier credit shall be applied first.
13    (c-5) Taxpayers who are eligible to claim the credit,
14including without limitation, any partners, shareholders of
15subchapter S corporations, and members who are eligible to
16claim the credit as provided in the definition of "qualified
17taxpayer" below, may transfer all or any portion of the credit
18to any individual or entity, within one year after the credit
19is awarded, in accordance with rules adopted by the Department
20of Commerce and Economic Opportunity. Any transferee of all or
21any portion of a credit shall have the right to claim the
22credit, carry the credit forward as described in subsection (c)
23above, and allocate such credit to its partners, shareholders
24of subchapter S corporations, and members (and also through
25tiers of such entities) as described in the definition of
26"qualified taxpayer" below, as if the transferee had been

 

 

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1originally issued such credit. The tax credit may not be
2transferred more than once. Allocations of credits to partners,
3shareholders of S corporations, members, or other owners
4(including through tiers of such entities) as described in the
5definition of "qualified taxpayer" below shall not be
6considered transfers under this subsection (c-5), and the
7one-time transfer limitation set forth in the immediately
8preceding sentence shall not apply to any such allocations.
9    (d) As used in this Section, the following terms have the
10following meanings.
11    "Qualified expenditure" means all the costs and expenses
12defined as qualified rehabilitation expenditures under Section
1347 of the federal Internal Revenue Code that were incurred in
14connection with a qualified historic structure.
15    "Qualified historic structure" means a certified historic
16structure as defined under Section 47 (c)(3) of the federal
17Internal Revenue Code.
18    "Qualified rehabilitation plan" means a project that is
19approved by the Historic Preservation Agency as being
20consistent with the standards in effect on the effective date
21of this amendatory Act of the 97th General Assembly for
22rehabilitation as adopted by the federal Secretary of the
23Interior.
24    "Qualified taxpayer" means the owner of the qualified
25historic structure or any other person who qualifies for the
26federal rehabilitation credit allowed by Section 47 of the

 

 

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1federal Internal Revenue Code with respect to that qualified
2historic structure. Partners, shareholders of subchapter S
3corporations, and owners of limited liability companies (if the
4limited liability company is treated as a partnership for
5purposes of federal and State income taxation) are entitled to
6a credit under this Section to be determined in accordance with
7the determination of income and distributive share of income
8under Sections 702 and 703 and subchapter S of the Internal
9Revenue Code, provided that credits granted to a partnership, a
10limited liability company taxed as a partnership, or other
11multiple owners of property shall be passed through to the
12partners, members, or owners respectively (and shall be passed
13through more than once in the case of tiers of such entities)
14on a pro rata basis or pursuant to an executed agreement among
15the partners, members, or owners documenting any alternate
16distribution method (which need not be on a pro-rata basis).
17(Source: P.A. 97-203, eff. 7-28-11.)
 
18    Section 10. The Illinois Insurance Code is amended by
19adding Section 409.1 as follows:
 
20    (215 ILCS 5/409.1 new)
21    Sec. 409.1. River Edge Redevelopment Zone Rehabilitation
22credit. For taxes payable after January 1, 2015, credits may be
23granted against the taxes imposed under Section 409, 413, 444,
24and 444.1 of this Act as provided in Section 221 of the

 

 

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1Illinois Income Tax Act.
 
2    Section 99. Effective date. This Act takes effect upon
3becoming law.