(35 ILCS 10/5-5)
Sec. 5-5. Definitions. As used in this Act:
"Agreement" means the Agreement between a Taxpayer and the Department under
the provisions of Section 5-50 of this Act.
"Applicant" means a Taxpayer that is operating a business located or that
the Taxpayer plans to locate within the State of Illinois and that is engaged
in interstate or intrastate commerce for the purpose of manufacturing,
processing, assembling, warehousing, or distributing products, conducting
research and development, providing tourism services, or providing services
in interstate commerce, office industries, or agricultural processing, but
excluding retail, retail food, health, or professional services.
"Applicant" does not include a Taxpayer who closes or
substantially reduces an operation at one location in the State and relocates
substantially the same operation to another location in the State. This does
not prohibit a Taxpayer from expanding its operations at another location in
the State, provided that existing operations of a similar nature located within
the State are not closed or substantially reduced. This also does not prohibit
a Taxpayer from moving its operations from one location in the State to another
location in the State for the purpose of expanding the operation provided that
the Department determines that expansion cannot reasonably be accommodated
within the municipality in which the business is located, or in the case of a
business located in an incorporated area of the county, within the county in
which the business is located, after conferring with the chief elected
official of the municipality or county and taking into consideration any
evidence offered by the municipality or county regarding the ability to
accommodate expansion within the municipality or county.
"Credit" means the amount agreed to between the Department and Applicant
under this Act, but not to exceed the lesser of: (1) the sum of (i) 50% of the Incremental Income Tax attributable to
New Employees at the Applicant's project and (ii) 10% of the training costs of New Employees; or (2) 100% of the Incremental Income Tax attributable to
New Employees at the Applicant's project. However, if the project is located in an underserved area, then the amount of the Credit may not exceed the lesser of: (1) the sum of (i) 75% of the Incremental Income Tax attributable to
New Employees at the Applicant's project and (ii) 10% of the training costs of New Employees; or (2) 100% of the Incremental Income Tax attributable to
New Employees at the Applicant's project. If the project is not located in an underserved area and the Applicant agrees to hire the required number of New Employees, then the maximum amount of the Credit for that Applicant may be increased by an amount not to exceed 25% of the Incremental Income Tax attributable to retained employees at the Applicant's project. If the project is located in an underserved area and the Applicant agrees to hire the required number of New Employees, then the maximum amount of the credit for that Applicant may be increased by an amount not to exceed 50% of the Incremental Income Tax attributable to retained employees at the Applicant's project.
"Department" means the Department of Commerce and Economic Opportunity.
"Director" means the Director of Commerce and Economic Opportunity.
"Full-time Employee" means an individual who is employed for consideration
for at least 35 hours each week or who renders any other standard of service
generally accepted by industry custom or practice as full-time employment. An individual for whom a W-2 is issued by a Professional Employer Organization (PEO) is a full-time employee if employed in the service of the Applicant for consideration for at least 35 hours each week or who renders any other standard of service generally accepted by industry custom or practice as full-time employment to Applicant.
"Incremental Income Tax" means the total amount withheld during the taxable
year from the compensation of New Employees and, if applicable, retained employees under Article 7 of the Illinois
Income Tax Act arising from employment at a project that is the subject of an
Agreement.
"New Construction EDGE Agreement" means the Agreement between a Taxpayer and the Department under the provisions of Section 5-51 of this Act. "New Construction EDGE Credit" means an amount agreed to between the Department and the Applicant under this Act as part of a New Construction EDGE Agreement that does not exceed 50% of the Incremental Income Tax attributable to New Construction EDGE Employees at the Applicant's project; however, if the New Construction EDGE Project is located in an underserved area, then the amount of the New Construction EDGE Credit may not exceed 75% of the Incremental Income Tax attributable to New Construction EDGE Employees at the Applicant's New Construction EDGE Project. "New Construction EDGE Employee" means a laborer or worker who is employed by an Illinois contractor or subcontractor in the actual construction work on the site of a New Construction EDGE Project, pursuant to a New Construction EDGE Agreement. "New Construction EDGE Incremental Income Tax" means the total amount withheld during the taxable year from the compensation of New Construction EDGE Employees. "New Construction EDGE Project" means the building of a Taxpayer's structure or building, or making improvements of any kind to real property. "New Construction EDGE Project" does not include the routine operation, routine repair, or routine maintenance of existing structures, buildings, or real property. "New Employee" means:
(a) A Full-time Employee first employed by a Taxpayer |
| in the project that is the subject of an Agreement and who is hired after the Taxpayer enters into the tax credit Agreement.
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(b) The term "New Employee" does not include:
(1) an employee of the Taxpayer who performs a
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| job that was previously performed by another employee, if that job existed for at least 6 months before hiring the employee;
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(2) an employee of the Taxpayer who was
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| previously employed in Illinois by a Related Member of the Taxpayer and whose employment was shifted to the Taxpayer after the Taxpayer entered into the tax credit Agreement; or
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(3) a child, grandchild, parent, or spouse, other
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| than a spouse who is legally separated from the individual, of any individual who has a direct or an indirect ownership interest of at least 5% in the profits, capital, or value of the Taxpayer.
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(c) Notwithstanding paragraph (1) of subsection (b),
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| an employee may be considered a New Employee under the Agreement if the employee performs a job that was previously performed by an employee who was:
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(1) treated under the Agreement as a New
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(2) promoted by the Taxpayer to another job.
(d) Notwithstanding subsection (a), the Department
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| may award Credit to an Applicant with respect to an employee hired prior to the date of the Agreement if:
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(1) the Applicant is in receipt of a letter from
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| the Department stating an intent to enter into a credit Agreement;
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(2) the letter described in paragraph (1) is
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| issued by the Department not later than 15 days after the effective date of this Act; and
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(3) the employee was hired after the date the
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| letter described in paragraph (1) was issued.
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"Noncompliance Date" means, in the case of a Taxpayer that is not complying
with the requirements of the Agreement or the provisions of this Act, the day
following the last date upon which the Taxpayer was in compliance with the
requirements of the Agreement and the provisions of this Act, as determined
by the Director, pursuant to Section 5-65.
"Pass Through Entity" means an entity that is exempt from the tax under
subsection (b) or (c) of Section 205 of the Illinois Income Tax Act.
"Professional Employer Organization" (PEO) means an employee leasing company, as defined in Section 206.1(A)(2) of the Illinois Unemployment Insurance Act.
"Related Member" means a person that, with respect to the Taxpayer during
any portion of the taxable year, is any one of the following:
(1) An individual stockholder, if the stockholder and
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| the members of the stockholder's family (as defined in Section 318 of the Internal Revenue Code) own directly, indirectly, beneficially, or constructively, in the aggregate, at least 50% of the value of the Taxpayer's outstanding stock.
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(2) A partnership, estate, or trust and any partner
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| or beneficiary, if the partnership, estate, or trust, and its partners or beneficiaries own directly, indirectly, beneficially, or constructively, in the aggregate, at least 50% of the profits, capital, stock, or value of the Taxpayer.
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(3) A corporation, and any party related to the
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| corporation in a manner that would require an attribution of stock from the corporation to the party or from the party to the corporation under the attribution rules of Section 318 of the Internal Revenue Code, if the Taxpayer owns directly, indirectly, beneficially, or constructively at least 50% of the value of the corporation's outstanding stock.
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(4) A corporation and any party related to that
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| corporation in a manner that would require an attribution of stock from the corporation to the party or from the party to the corporation under the attribution rules of Section 318 of the Internal Revenue Code, if the corporation and all such related parties own in the aggregate at least 50% of the profits, capital, stock, or value of the Taxpayer.
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(5) A person to or from whom there is attribution of
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| stock ownership in accordance with Section 1563(e) of the Internal Revenue Code, except, for purposes of determining whether a person is a Related Member under this paragraph, 20% shall be substituted for 5% wherever 5% appears in Section 1563(e) of the Internal Revenue Code.
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"Startup taxpayer" means, for Agreements that are executed before the effective date of the changes made to this Section by this amendatory Act of the 103rd General Assembly, a corporation, partnership, or other entity incorporated or organized no more than 5 years before the filing of an application for an Agreement that has never had any Illinois income tax liability, excluding any Illinois income tax liability of a Related Member which shall not be attributed to the startup taxpayer. "Startup taxpayer" means, for Agreements that are executed on or after the effective date of this amendatory Act of the 103rd General Assembly, a corporation, partnership, or other entity that is incorporated or organized no more than 10 years before the filing of an application for an Agreement and that has never had any Illinois income tax liability. For the purpose of determining whether the taxpayer has had any Illinois income tax liability, the Illinois income tax liability of a Related Member shall not be attributed to the startup taxpayer.
"Taxpayer" means an individual, corporation, partnership, or other entity
that has any Illinois Income Tax liability.
Until July 1, 2022, "underserved area" means a geographic area that meets one or more of the following conditions:
(1) the area has a poverty rate of at least 20%
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| according to the latest federal decennial census;
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(2) 75% or more of the children in the area
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| participate in the federal free lunch program according to reported statistics from the State Board of Education;
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(3) at least 20% of the households in the area
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| receive assistance under the Supplemental Nutrition Assistance Program (SNAP); or
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(4) the area has an average unemployment rate, as
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| determined by the Illinois Department of Employment Security, that is more than 120% of the national unemployment average, as determined by the U.S. Department of Labor, for a period of at least 2 consecutive calendar years preceding the date of the application.
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On and after July 1, 2022, "underserved area" means a geographic area that meets one or more of the following conditions:
(1) the area has a poverty rate of at least 20%
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| according to the latest American Community Survey;
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(2) 35% or more of the families with children in the
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| area are living below 130% of the poverty line, according to the latest American Community Survey;
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(3) at least 20% of the households in the area
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| receive assistance under the Supplemental Nutrition Assistance Program (SNAP); or
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(4) the area has an average unemployment rate, as
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| determined by the Illinois Department of Employment Security, that is more than 120% of the national unemployment average, as determined by the U.S. Department of Labor, for a period of at least 2 consecutive calendar years preceding the date of the application.
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(Source: P.A. 102-330, eff. 1-1-22; 102-700, eff. 4-19-22; 102-1125, eff. 2-3-23; 103-9, eff. 6-7-23.)
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(35 ILCS 10/5-10)
Sec. 5-10. Powers of the Department. The Department, in
addition to those powers
granted under the Civil Administrative Code of Illinois, is granted and shall
have all the powers necessary
or convenient to carry out and effectuate the purposes and provisions of this
Act, including, but not limited
to, power and authority to:
(a) Promulgate procedures, rules, or regulations deemed necessary and
appropriate for the
administration of the programs; establish forms for applications,
notifications, contracts, or any other
agreements; and accept applications at any time during the year.
(b) Provide and assist Taxpayers pursuant to the
provisions of this Act, and
cooperate with Taxpayers that are parties to Agreements
to promote, foster, and
support economic development, capital investment, and job creation or retention
within the State.
(c) Enter into agreements and memoranda of understanding for participation
of and engage in
cooperation with agencies of the federal government, local units of government,
universities, research
foundations or institutions, regional economic development corporations, or
other organizations for the
purposes of this Act.
(d) Gather information and conduct inquiries, in the manner and by the
methods as it deems desirable,
including without limitation, gathering information with respect to
Applicants for the
purpose of making any designations or certifications necessary or desirable or
to gather information to
assist the Department with any recommendation or guidance in the furtherance of
the purposes of this Act.
(e) Establish, negotiate and effectuate any term, agreement or other
document with any person,
necessary or appropriate to accomplish the purposes of this Act; and to
consent, subject to the provisions
of any Agreement with another party, to the modification or restructuring of
any Agreement to which the
Department is a party.
(f) Fix, determine, charge, and collect any premiums, fees, charges, costs,
and expenses from Applicants,
including, without limitation,
any
application fees,
commitment fees, program fees, financing charges, or publication fees as deemed
appropriate to pay
expenses necessary or incident to the administration, staffing, or operation in
connection with the
Department's activities under this Act, or for preparation,
implementation, and
enforcement of the terms of the Agreement, or for consultation, advisory and
legal fees, and other costs;
however, all fees and expenses incident thereto shall be the responsibility of
the Applicant.
(g) Provide for sufficient personnel to permit administration, staffing,
operation, and related support
required to adequately discharge its duties and responsibilities described in
this Act from funds made
available through charges to Applicants
or from funds as
may be appropriated by the General Assembly for the administration of this Act.
(h) Require Applicants, upon written request, to
issue any necessary
authorization to the appropriate federal, state, or local authority for the
release of information concerning a
project being considered under the
provisions of this Act, with the
information requested to include, but not be limited to, financial reports,
returns, or records relating to the
Taxpayers' or its project.
(i) Require that a Taxpayer shall at all times
keep proper books
of record and account in accordance with generally accepted accounting
principles consistently applied,
with the books, records, or papers related to the Agreement in the custody or
control of the Taxpayer open for
reasonable Department inspection and audits, and including, without limitation,
the making of copies of the
books, records, or papers, and the inspection or appraisal of any of the
Taxpayer or project assets.
(j) Take whatever actions are necessary or appropriate to protect the
State's interest in the
event of bankruptcy, default, foreclosure, or noncompliance with the terms and
conditions of financial
assistance or participation required under this Act, including the power to
sell, dispose, lease, or rent, upon
terms and conditions determined by the Director to be appropriate, real or
personal property that the
Department may receive as a result of these actions.
(Source: P.A. 102-330, eff. 1-1-22.)
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(35 ILCS 10/5-15) Sec. 5-15. Tax Credit Awards. Subject to the conditions set forth in this
Act, a Taxpayer is
entitled to a Credit against or, as described in subsection (g) of this Section, a payment towards taxes imposed pursuant to subsections (a) and (b)
of Section 201 of the Illinois
Income Tax Act that may be imposed on the Taxpayer for a taxable year beginning
on or
after January 1, 1999,
if the Taxpayer is awarded a Credit by the Department under this Act for that
taxable year. (a) The Department shall make Credit awards under this Act to foster job
creation and retention in Illinois. (b) A person that proposes a project to create new jobs in Illinois must
enter into an Agreement with the
Department for the Credit under this Act. (c) The Credit shall be claimed for the taxable years specified in the
Agreement. (d) The Credit shall not exceed the Incremental Income Tax attributable to
the project that is the subject of the Agreement. (e) Nothing herein shall prohibit a Tax Credit Award to an Applicant that uses a PEO if all other award criteria are satisfied.
(f) In lieu of the Credit allowed under this Act against the taxes imposed pursuant to subsections (a) and (b) of Section 201 of the Illinois Income Tax Act for any taxable year ending on or after December 31, 2009, for Taxpayers that entered into Agreements prior to January 1, 2015 and otherwise meet the criteria set forth in this subsection (f), the Taxpayer may elect to claim the Credit against its obligation to pay over withholding under Section 704A of the Illinois Income Tax Act. (1) The election under this subsection (f) may be |
| made only by a Taxpayer that (i) is primarily engaged in one of the following business activities: water purification and treatment, motor vehicle metal stamping, automobile manufacturing, automobile and light duty motor vehicle manufacturing, motor vehicle manufacturing, light truck and utility vehicle manufacturing, heavy duty truck manufacturing, motor vehicle body manufacturing, cable television infrastructure design or manufacturing, or wireless telecommunication or computing terminal device design or manufacturing for use on public networks and (ii) meets the following criteria:
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(A) the Taxpayer (i) had an Illinois net loss or
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| an Illinois net loss deduction under Section 207 of the Illinois Income Tax Act for the taxable year in which the Credit is awarded, (ii) employed a minimum of 1,000 full-time employees in this State during the taxable year in which the Credit is awarded, (iii) has an Agreement under this Act on December 14, 2009 (the effective date of Public Act 96-834), and (iv) is in compliance with all provisions of that Agreement;
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(B) the Taxpayer (i) had an Illinois net loss or
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| an Illinois net loss deduction under Section 207 of the Illinois Income Tax Act for the taxable year in which the Credit is awarded, (ii) employed a minimum of 1,000 full-time employees in this State during the taxable year in which the Credit is awarded, and (iii) has applied for an Agreement within 365 days after December 14, 2009 (the effective date of Public Act 96-834);
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(C) the Taxpayer (i) had an Illinois net
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| operating loss carryforward under Section 207 of the Illinois Income Tax Act in a taxable year ending during calendar year 2008, (ii) has applied for an Agreement within 150 days after the effective date of this amendatory Act of the 96th General Assembly, (iii) creates at least 400 new jobs in Illinois, (iv) retains at least 2,000 jobs in Illinois that would have been at risk of relocation out of Illinois over a 10-year period, and (v) makes a capital investment of at least $75,000,000;
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(D) the Taxpayer (i) had an Illinois net
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| operating loss carryforward under Section 207 of the Illinois Income Tax Act in a taxable year ending during calendar year 2009, (ii) has applied for an Agreement within 150 days after the effective date of this amendatory Act of the 96th General Assembly, (iii) creates at least 150 new jobs, (iv) retains at least 1,000 jobs in Illinois that would have been at risk of relocation out of Illinois over a 10-year period, and (v) makes a capital investment of at least $57,000,000; or
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(E) the Taxpayer (i) employed at least 2,500
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| full-time employees in the State during the year in which the Credit is awarded, (ii) commits to make at least $500,000,000 in combined capital improvements and project costs under the Agreement, (iii) applies for an Agreement between January 1, 2011 and June 30, 2011, (iv) executes an Agreement for the Credit during calendar year 2011, and (v) was incorporated no more than 5 years before the filing of an application for an Agreement.
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(1.5) The election under this subsection (f) may also
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| be made by a Taxpayer for any Credit awarded pursuant to an agreement that was executed between January 1, 2011 and June 30, 2011, if the Taxpayer (i) is primarily engaged in the manufacture of inner tubes or tires, or both, from natural and synthetic rubber, (ii) employs a minimum of 2,400 full-time employees in Illinois at the time of application, (iii) creates at least 350 full-time jobs and retains at least 250 full-time jobs in Illinois that would have been at risk of being created or retained outside of Illinois, and (iv) makes a capital investment of at least $200,000,000 at the project location.
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(1.6) The election under this subsection (f) may
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| also be made by a Taxpayer for any Credit awarded pursuant to an agreement that was executed within 150 days after the effective date of this amendatory Act of the 97th General Assembly, if the Taxpayer (i) is primarily engaged in the operation of a discount department store, (ii) maintains its corporate headquarters in Illinois, (iii) employs a minimum of 4,250 full-time employees at its corporate headquarters in Illinois at the time of application, (iv) retains at least 4,250 full-time jobs in Illinois that would have been at risk of being relocated outside of Illinois, (v) had a minimum of $40,000,000,000 in total revenue in 2010, and (vi) makes a capital investment of at least $300,000,000 at the project location.
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(1.7) Notwithstanding any other provision of law, the
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| election under this subsection (f) may also be made by a Taxpayer for any Credit awarded pursuant to an agreement that was executed or applied for on or after July 1, 2011 and on or before March 31, 2012, if the Taxpayer is primarily engaged in the manufacture of original and aftermarket filtration parts and products for automobiles, motor vehicles, light duty motor vehicles, light trucks and utility vehicles, and heavy duty trucks, (ii) employs a minimum of 1,000 full-time employees in Illinois at the time of application, (iii) creates at least 250 full-time jobs in Illinois, (iv) relocates its corporate headquarters to Illinois from another state, and (v) makes a capital investment of at least $4,000,000 at the project location.
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(1.8) Notwithstanding any other provision of law, the
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| election under this subsection (f) may also be made by a startup taxpayer for any Credit awarded pursuant to an Agreement that was executed on or after the effective date of this amendatory Act of the 102nd General Assembly. Any such election under this paragraph (1.8) shall be effective unless and until such startup taxpayer has any Illinois income tax liability. This election under this paragraph (1.8) shall automatically terminate when the startup taxpayer has any Illinois income tax liability at the end of any taxable year during the term of the Agreement. Thereafter, the startup taxpayer may receive a Credit, taking into account any benefits previously enjoyed or received by way of the election under this paragraph (1.8), so long as the startup taxpayer remains in compliance with the terms and conditions of the Agreement.
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(2) An election under this subsection shall allow the
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| credit to be taken against payments otherwise due under Section 704A of the Illinois Income Tax Act during the first calendar quarter beginning after the end of the taxable quarter in which the credit is awarded under this Act.
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(3) The election shall be made in the form and manner
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| required by the Illinois Department of Revenue and, once made, shall be irrevocable.
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(4) If a Taxpayer who meets the requirements of
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| subparagraph (A) of paragraph (1) of this subsection (f) elects to claim the Credit against its withholdings as provided in this subsection (f), then, on and after the date of the election, the terms of the Agreement between the Taxpayer and the Department may not be further amended during the term of the Agreement.
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(g) A pass-through entity that has been awarded a credit under this Act, its shareholders, or its partners may treat some or all of the credit awarded pursuant to this Act as a tax payment for purposes of the Illinois Income Tax Act. The term "tax payment" means a payment as described in Article 6 or Article 8 of the Illinois Income Tax Act or a composite payment made by a pass-through entity on behalf of any of its shareholders or partners to satisfy such shareholders' or partners' taxes imposed pursuant to subsections (a) and (b) of Section 201 of the Illinois Income Tax Act. In no event shall the amount of the award credited pursuant to this Act exceed the Illinois income tax liability of the pass-through entity or its shareholders or partners for the taxable year.
(Source: P.A. 102-700, eff. 4-19-22; 103-9, eff. 6-7-23.)
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(35 ILCS 10/5-25)
Sec. 5-25. Review of Application.
(a) (Blank).
(b) The Department shall determine which projects will benefit the State. In making its recommendation that
an Applicant's application for Credit should or should not be accepted, which
shall occur
within a reasonable time frame
as determined by the nature of the application, the Department shall determine
that
all the following conditions
exist:
(1) The Applicant's project intends, as required by |
| subsection (b) of Section 5-20 to make the required investment in the State and intends to hire the required number of New Employees in Illinois as a result of that project.
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(2) The Applicant's project is economically sound and
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| will benefit the people of the State of Illinois by increasing opportunities for employment and strengthen the economy of Illinois.
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(3) The Applicant has certified that, if not for the
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| Credit, the project would not occur in Illinois.
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(4) A cost differential is identified, using best
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| available data, in the projected costs for the Applicant's project compared to the costs in the competing state, including the impact of the competing state's incentive programs. The competing state's incentive programs shall include state, local, private, and federal funds available. This paragraph (4) applies only to agreements entered into before the effective date of this amendatory Act of the 102nd General Assembly.
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(5) The political subdivisions affected by the
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| project have committed local incentives with respect to the project, considering local ability to assist.
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(6) Awarding the Credit will result in an overall
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| positive fiscal impact to the State, as certified by the Department using the best available data.
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(7) The Credit is not prohibited by Section 5-35 of
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(Source: P.A. 102-330, eff. 1-1-22; 102-1125, eff. 2-3-23.)
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