97TH GENERAL ASSEMBLY
State of Illinois
2011 and 2012
HB5095

 

Introduced 2/7/2012, by Rep. Sidney H. Mathias

 

SYNOPSIS AS INTRODUCED:
 
New Act
35 ILCS 5/201  from Ch. 120, par. 2-201
35 ILCS 120/1d  from Ch. 120, par. 440d
35 ILCS 120/1e  from Ch. 120, par. 440e
35 ILCS 120/1f  from Ch. 120, par. 440f
35 ILCS 120/5l  from Ch. 120, par. 444l
220 ILCS 5/9-222  from Ch. 111 2/3, par. 9-222
220 ILCS 5/9-222.1A

    Creates the Green Energy Business Act. Authorizes the Department of Commerce and Economic Opportunity to receive and approve the applications of qualified businesses seeking designation as Green Energy Businesses. Amends the Illinois Income Tax Act, the Retailers' Occupation Tax Act, and the Public Utilities Act to provide that Green Energy Businesses are eligible for certain credits and exemptions under those Acts. Effective immediately.


LRB097 18468 HLH 63698 b

FISCAL NOTE ACT MAY APPLY

 

 

A BILL FOR

 

HB5095LRB097 18468 HLH 63698 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 1. Short title. This Act may be cited as the Green
5Energy Business Act.
 
6    Section 5. Definitions. As used in this Act, the following
7words shall have the meanings ascribed to them below, unless
8the context otherwise requires:
9    "Biodiesel" means a renewable diesel fuel derived from
10biomass that is intended for use in diesel engines.
11    "Department" means the Department of Commerce and Economic
12Opportunity.
13    "Ethanol" means a product produced from agricultural
14commodities or by-products used as a fuel or to be blended with
15other fuels for use in motor vehicles.
16    "Green Energy Business" means a business that:
17        (i) produces or manufactures components used in the
18    production of electricity from renewable energy resources;
19        (ii) has the capacity to produce and produces at least
20    5 megawatts of electricity from renewable energy resources
21    each year;
22        (iii) has the capacity to produce and produces no less
23    than 30,000,000 gallons of biodiesel or ethanol each year.

 

 

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1    "Renewable energy resources" means wind energy; solar
2thermal energy; photovoltaic cells and panels; biodiesel;
3crops; untreated and unadulterated organic waste biomass;
4trees and tree trimmings; hydropower that does not involve new
5construction or significant expansion of hydropower dams; and
6other alternative sources of environmentally preferable
7energy. For purposes of this Act, landfill gas produced in the
8State is a renewable energy resource, but tires; garbage;
9general household, institutional, and commercial waste;
10industrial lunchroom or office waste; landscape waste (other
11than trees and tree trimmings); railroad crossties; utility
12poles; and construction or demolition debris (other than
13untreated and unadulterated waste wood) are not. Renewable
14energy resources also include any renewable energy credit or
15credits associated with or generated by a source of energy that
16otherwise qualifies as a renewable energy resource under this
17Act.
 
18    Section 10. Green Energy Business.
19    (a) To assist in the encouragement, development, growth,
20and expansion of the private sector through green energy
21projects, the Department may receive and approve applications
22for the designation of "Green Energy Business" in Illinois.
23Applications may be submitted at any time. No later than 90
24days after an application is submitted, the Department shall
25notify the applicant of the Department's determination as to

 

 

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1the applicant's qualification to be designated as a Green
2Energy Business under this Section. To qualify as a Green
3Energy Business, a business must meet all of the following
4conditions:
5        (1) It must not be located, at the time of designation,
6    in an enterprise zone designated under the Illinois
7    Enterprise Zone Act.
8        (2) It must commit to (i) produce or manufacture
9    components used in the production of electricity from
10    renewable energy resources; (ii) produce at least 5
11    megawatts of electricity from renewable energy resources
12    each year; or (iii) produce not less than 30,000,000
13    gallons of biodiesel or ethanol each year.
14        (3) It must commit to have the business placed in
15    service at a qualified property in Illinois.
16        (4) It must certify in writing that (i) the investments
17    would not be placed in service at a qualified property
18    without the tax credits and exemptions referenced in
19    subsection (b) of this Section and (ii) the job creation or
20    job retention would not occur without the tax credits and
21    exemptions referenced in subsection (b) of this Section.
22    The terms "placed in service" and "qualified property" have
23    the same meanings as described in subsection (h) of Section
24    201 of the Illinois Income Tax Act.
25        (5) It must meet any additional criteria established by
26    the Department.

 

 

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1    (b) Each business designated as a Green Energy Business by
2the Department shall qualify for the credits and exemptions in
3Sections 9-222 and 9-222.1A of the Public Utilities Act;
4subsection (h) of Section 201 of the Illinois Income Tax Act;
5and Section 1d of the Retailers' Occupation Tax Act. Each
6business designated as a Green Energy Business under this
7Section shall also qualify for the exemption described in
8Section 5l of the Retailers' Occupation Tax Act. The credit
9provided in subsection (h) of Section 201 of the Illinois
10Income Tax Act shall be applicable to investments in qualified
11property used to meet the requirements in subdivision (a)(2) of
12this Section.
13    (c) The Department must revoke a Green Energy Business
14designation if, within the Department's discretion, the
15participating business fails to comply with the terms and
16conditions of the designation.
 
17    Section 15. Project labor agreements
18    (a) Each business designated as a Green Energy Business by
19the Department must enter into a project labor agreement. The
20project labor agreement must include provisions establishing
21(i) the minimum hourly wage for each class of labor
22organization employee; (ii) the benefits and other
23compensation for each class of labor organization employee; and
24(iii) that no strike or disputes will be engaged in by the
25labor organization employees; and (iv) that no lockout or

 

 

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1disputes will be engaged in by the owner of a Green Energy
2Business. The owner of a Green Energy Business and the labor
3organizations shall have the authority to include other terms
4and conditions as they deem necessary.
5    (b) Each project labor agreement shall be filed with the
6Director in accordance with the procedures established by the
7Department. At a minimum, the project labor agreement must
8provide the names, addresses, and occupations of the owner of
9the Green Energy Business and the individuals representing the
10labor organization employees participating in the project
11labor agreement. The agreement must also specify the terms and
12conditions required in subsection (a) of this Section.
 
13    Section 20. The Illinois Income Tax Act is amended by
14changing Section 201 as follows:
 
15    (35 ILCS 5/201)  (from Ch. 120, par. 2-201)
16    (Text of Section before amendment by P.A. 97-636)
17    Sec. 201. Tax Imposed.
18    (a) In general. A tax measured by net income is hereby
19imposed on every individual, corporation, trust and estate for
20each taxable year ending after July 31, 1969 on the privilege
21of earning or receiving income in or as a resident of this
22State. Such tax shall be in addition to all other occupation or
23privilege taxes imposed by this State or by any municipal
24corporation or political subdivision thereof.

 

 

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1    (b) Rates. The tax imposed by subsection (a) of this
2Section shall be determined as follows, except as adjusted by
3subsection (d-1):
4        (1) In the case of an individual, trust or estate, for
5    taxable years ending prior to July 1, 1989, an amount equal
6    to 2 1/2% of the taxpayer's net income for the taxable
7    year.
8        (2) In the case of an individual, trust or estate, for
9    taxable years beginning prior to July 1, 1989 and ending
10    after June 30, 1989, an amount equal to the sum of (i) 2
11    1/2% of the taxpayer's net income for the period prior to
12    July 1, 1989, as calculated under Section 202.3, and (ii)
13    3% of the taxpayer's net income for the period after June
14    30, 1989, as calculated under Section 202.3.
15        (3) In the case of an individual, trust or estate, for
16    taxable years beginning after June 30, 1989, and ending
17    prior to January 1, 2011, an amount equal to 3% of the
18    taxpayer's net income for the taxable year.
19        (4) In the case of an individual, trust, or estate, for
20    taxable years beginning prior to January 1, 2011, and
21    ending after December 31, 2010, an amount equal to the sum
22    of (i) 3% of the taxpayer's net income for the period prior
23    to January 1, 2011, as calculated under Section 202.5, and
24    (ii) 5% of the taxpayer's net income for the period after
25    December 31, 2010, as calculated under Section 202.5.
26        (5) In the case of an individual, trust, or estate, for

 

 

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1    taxable years beginning on or after January 1, 2011, and
2    ending prior to January 1, 2015, an amount equal to 5% of
3    the taxpayer's net income for the taxable year.
4        (5.1) In the case of an individual, trust, or estate,
5    for taxable years beginning prior to January 1, 2015, and
6    ending after December 31, 2014, an amount equal to the sum
7    of (i) 5% of the taxpayer's net income for the period prior
8    to January 1, 2015, as calculated under Section 202.5, and
9    (ii) 3.75% of the taxpayer's net income for the period
10    after December 31, 2014, as calculated under Section 202.5.
11        (5.2) In the case of an individual, trust, or estate,
12    for taxable years beginning on or after January 1, 2015,
13    and ending prior to January 1, 2025, an amount equal to
14    3.75% of the taxpayer's net income for the taxable year.
15        (5.3) In the case of an individual, trust, or estate,
16    for taxable years beginning prior to January 1, 2025, and
17    ending after December 31, 2024, an amount equal to the sum
18    of (i) 3.75% of the taxpayer's net income for the period
19    prior to January 1, 2025, as calculated under Section
20    202.5, and (ii) 3.25% of the taxpayer's net income for the
21    period after December 31, 2024, as calculated under Section
22    202.5.
23        (5.4) In the case of an individual, trust, or estate,
24    for taxable years beginning on or after January 1, 2025, an
25    amount equal to 3.25% of the taxpayer's net income for the
26    taxable year.

 

 

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1        (6) In the case of a corporation, for taxable years
2    ending prior to July 1, 1989, an amount equal to 4% of the
3    taxpayer's net income for the taxable year.
4        (7) In the case of a corporation, for taxable years
5    beginning prior to July 1, 1989 and ending after June 30,
6    1989, an amount equal to the sum of (i) 4% of the
7    taxpayer's net income for the period prior to July 1, 1989,
8    as calculated under Section 202.3, and (ii) 4.8% of the
9    taxpayer's net income for the period after June 30, 1989,
10    as calculated under Section 202.3.
11        (8) In the case of a corporation, for taxable years
12    beginning after June 30, 1989, and ending prior to January
13    1, 2011, an amount equal to 4.8% of the taxpayer's net
14    income for the taxable year.
15        (9) In the case of a corporation, for taxable years
16    beginning prior to January 1, 2011, and ending after
17    December 31, 2010, an amount equal to the sum of (i) 4.8%
18    of the taxpayer's net income for the period prior to
19    January 1, 2011, as calculated under Section 202.5, and
20    (ii) 7% of the taxpayer's net income for the period after
21    December 31, 2010, as calculated under Section 202.5.
22        (10) In the case of a corporation, for taxable years
23    beginning on or after January 1, 2011, and ending prior to
24    January 1, 2015, an amount equal to 7% of the taxpayer's
25    net income for the taxable year.
26        (11) In the case of a corporation, for taxable years

 

 

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1    beginning prior to January 1, 2015, and ending after
2    December 31, 2014, an amount equal to the sum of (i) 7% of
3    the taxpayer's net income for the period prior to January
4    1, 2015, as calculated under Section 202.5, and (ii) 5.25%
5    of the taxpayer's net income for the period after December
6    31, 2014, as calculated under Section 202.5.
7        (12) In the case of a corporation, for taxable years
8    beginning on or after January 1, 2015, and ending prior to
9    January 1, 2025, an amount equal to 5.25% of the taxpayer's
10    net income for the taxable year.
11        (13) In the case of a corporation, for taxable years
12    beginning prior to January 1, 2025, and ending after
13    December 31, 2024, an amount equal to the sum of (i) 5.25%
14    of the taxpayer's net income for the period prior to
15    January 1, 2025, as calculated under Section 202.5, and
16    (ii) 4.8% of the taxpayer's net income for the period after
17    December 31, 2024, as calculated under Section 202.5.
18        (14) In the case of a corporation, for taxable years
19    beginning on or after January 1, 2025, an amount equal to
20    4.8% of the taxpayer's net income for the taxable year.
21    The rates under this subsection (b) are subject to the
22provisions of Section 201.5.
23    (c) Personal Property Tax Replacement Income Tax.
24Beginning on July 1, 1979 and thereafter, in addition to such
25income tax, there is also hereby imposed the Personal Property
26Tax Replacement Income Tax measured by net income on every

 

 

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1corporation (including Subchapter S corporations), partnership
2and trust, for each taxable year ending after June 30, 1979.
3Such taxes are imposed on the privilege of earning or receiving
4income in or as a resident of this State. The Personal Property
5Tax Replacement Income Tax shall be in addition to the income
6tax imposed by subsections (a) and (b) of this Section and in
7addition to all other occupation or privilege taxes imposed by
8this State or by any municipal corporation or political
9subdivision thereof.
10    (d) Additional Personal Property Tax Replacement Income
11Tax Rates. The personal property tax replacement income tax
12imposed by this subsection and subsection (c) of this Section
13in the case of a corporation, other than a Subchapter S
14corporation and except as adjusted by subsection (d-1), shall
15be an additional amount equal to 2.85% of such taxpayer's net
16income for the taxable year, except that beginning on January
171, 1981, and thereafter, the rate of 2.85% specified in this
18subsection shall be reduced to 2.5%, and in the case of a
19partnership, trust or a Subchapter S corporation shall be an
20additional amount equal to 1.5% of such taxpayer's net income
21for the taxable year.
22    (d-1) Rate reduction for certain foreign insurers. In the
23case of a foreign insurer, as defined by Section 35A-5 of the
24Illinois Insurance Code, whose state or country of domicile
25imposes on insurers domiciled in Illinois a retaliatory tax
26(excluding any insurer whose premiums from reinsurance assumed

 

 

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1are 50% or more of its total insurance premiums as determined
2under paragraph (2) of subsection (b) of Section 304, except
3that for purposes of this determination premiums from
4reinsurance do not include premiums from inter-affiliate
5reinsurance arrangements), beginning with taxable years ending
6on or after December 31, 1999, the sum of the rates of tax
7imposed by subsections (b) and (d) shall be reduced (but not
8increased) to the rate at which the total amount of tax imposed
9under this Act, net of all credits allowed under this Act,
10shall equal (i) the total amount of tax that would be imposed
11on the foreign insurer's net income allocable to Illinois for
12the taxable year by such foreign insurer's state or country of
13domicile if that net income were subject to all income taxes
14and taxes measured by net income imposed by such foreign
15insurer's state or country of domicile, net of all credits
16allowed or (ii) a rate of zero if no such tax is imposed on such
17income by the foreign insurer's state of domicile. For the
18purposes of this subsection (d-1), an inter-affiliate includes
19a mutual insurer under common management.
20        (1) For the purposes of subsection (d-1), in no event
21    shall the sum of the rates of tax imposed by subsections
22    (b) and (d) be reduced below the rate at which the sum of:
23            (A) the total amount of tax imposed on such foreign
24        insurer under this Act for a taxable year, net of all
25        credits allowed under this Act, plus
26            (B) the privilege tax imposed by Section 409 of the

 

 

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1        Illinois Insurance Code, the fire insurance company
2        tax imposed by Section 12 of the Fire Investigation
3        Act, and the fire department taxes imposed under
4        Section 11-10-1 of the Illinois Municipal Code,
5    equals 1.25% for taxable years ending prior to December 31,
6    2003, or 1.75% for taxable years ending on or after
7    December 31, 2003, of the net taxable premiums written for
8    the taxable year, as described by subsection (1) of Section
9    409 of the Illinois Insurance Code. This paragraph will in
10    no event increase the rates imposed under subsections (b)
11    and (d).
12        (2) Any reduction in the rates of tax imposed by this
13    subsection shall be applied first against the rates imposed
14    by subsection (b) and only after the tax imposed by
15    subsection (a) net of all credits allowed under this
16    Section other than the credit allowed under subsection (i)
17    has been reduced to zero, against the rates imposed by
18    subsection (d).
19    This subsection (d-1) is exempt from the provisions of
20Section 250.
21    (e) Investment credit. A taxpayer shall be allowed a credit
22against the Personal Property Tax Replacement Income Tax for
23investment in qualified property.
24        (1) A taxpayer shall be allowed a credit equal to .5%
25    of the basis of qualified property placed in service during
26    the taxable year, provided such property is placed in

 

 

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1    service on or after July 1, 1984. There shall be allowed an
2    additional credit equal to .5% of the basis of qualified
3    property placed in service during the taxable year,
4    provided such property is placed in service on or after
5    July 1, 1986, and the taxpayer's base employment within
6    Illinois has increased by 1% or more over the preceding
7    year as determined by the taxpayer's employment records
8    filed with the Illinois Department of Employment Security.
9    Taxpayers who are new to Illinois shall be deemed to have
10    met the 1% growth in base employment for the first year in
11    which they file employment records with the Illinois
12    Department of Employment Security. The provisions added to
13    this Section by Public Act 85-1200 (and restored by Public
14    Act 87-895) shall be construed as declaratory of existing
15    law and not as a new enactment. If, in any year, the
16    increase in base employment within Illinois over the
17    preceding year is less than 1%, the additional credit shall
18    be limited to that percentage times a fraction, the
19    numerator of which is .5% and the denominator of which is
20    1%, but shall not exceed .5%. The investment credit shall
21    not be allowed to the extent that it would reduce a
22    taxpayer's liability in any tax year below zero, nor may
23    any credit for qualified property be allowed for any year
24    other than the year in which the property was placed in
25    service in Illinois. For tax years ending on or after
26    December 31, 1987, and on or before December 31, 1988, the

 

 

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1    credit shall be allowed for the tax year in which the
2    property is placed in service, or, if the amount of the
3    credit exceeds the tax liability for that year, whether it
4    exceeds the original liability or the liability as later
5    amended, such excess may be carried forward and applied to
6    the tax liability of the 5 taxable years following the
7    excess credit years if the taxpayer (i) makes investments
8    which cause the creation of a minimum of 2,000 full-time
9    equivalent jobs in Illinois, (ii) is located in an
10    enterprise zone established pursuant to the Illinois
11    Enterprise Zone Act and (iii) is certified by the
12    Department of Commerce and Community Affairs (now
13    Department of Commerce and Economic Opportunity) as
14    complying with the requirements specified in clause (i) and
15    (ii) by July 1, 1986. The Department of Commerce and
16    Community Affairs (now Department of Commerce and Economic
17    Opportunity) shall notify the Department of Revenue of all
18    such certifications immediately. For tax years ending
19    after December 31, 1988, the credit shall be allowed for
20    the tax year in which the property is placed in service,
21    or, if the amount of the credit exceeds the tax liability
22    for that year, whether it exceeds the original liability or
23    the liability as later amended, such excess may be carried
24    forward and applied to the tax liability of the 5 taxable
25    years following the excess credit years. The credit shall
26    be applied to the earliest year for which there is a

 

 

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1    liability. If there is credit from more than one tax year
2    that is available to offset a liability, earlier credit
3    shall be applied first.
4        (2) The term "qualified property" means property
5    which:
6            (A) is tangible, whether new or used, including
7        buildings and structural components of buildings and
8        signs that are real property, but not including land or
9        improvements to real property that are not a structural
10        component of a building such as landscaping, sewer
11        lines, local access roads, fencing, parking lots, and
12        other appurtenances;
13            (B) is depreciable pursuant to Section 167 of the
14        Internal Revenue Code, except that "3-year property"
15        as defined in Section 168(c)(2)(A) of that Code is not
16        eligible for the credit provided by this subsection
17        (e);
18            (C) is acquired by purchase as defined in Section
19        179(d) of the Internal Revenue Code;
20            (D) is used in Illinois by a taxpayer who is
21        primarily engaged in manufacturing, or in mining coal
22        or fluorite, or in retailing, or was placed in service
23        on or after July 1, 2006 in a River Edge Redevelopment
24        Zone established pursuant to the River Edge
25        Redevelopment Zone Act; and
26            (E) has not previously been used in Illinois in

 

 

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1        such a manner and by such a person as would qualify for
2        the credit provided by this subsection (e) or
3        subsection (f).
4        (3) For purposes of this subsection (e),
5    "manufacturing" means the material staging and production
6    of tangible personal property by procedures commonly
7    regarded as manufacturing, processing, fabrication, or
8    assembling which changes some existing material into new
9    shapes, new qualities, or new combinations. For purposes of
10    this subsection (e) the term "mining" shall have the same
11    meaning as the term "mining" in Section 613(c) of the
12    Internal Revenue Code. For purposes of this subsection (e),
13    the term "retailing" means the sale of tangible personal
14    property for use or consumption and not for resale, or
15    services rendered in conjunction with the sale of tangible
16    personal property for use or consumption and not for
17    resale. For purposes of this subsection (e), "tangible
18    personal property" has the same meaning as when that term
19    is used in the Retailers' Occupation Tax Act, and, for
20    taxable years ending after December 31, 2008, does not
21    include the generation, transmission, or distribution of
22    electricity.
23        (4) The basis of qualified property shall be the basis
24    used to compute the depreciation deduction for federal
25    income tax purposes.
26        (5) If the basis of the property for federal income tax

 

 

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1    depreciation purposes is increased after it has been placed
2    in service in Illinois by the taxpayer, the amount of such
3    increase shall be deemed property placed in service on the
4    date of such increase in basis.
5        (6) The term "placed in service" shall have the same
6    meaning as under Section 46 of the Internal Revenue Code.
7        (7) If during any taxable year, any property ceases to
8    be qualified property in the hands of the taxpayer within
9    48 months after being placed in service, or the situs of
10    any qualified property is moved outside Illinois within 48
11    months after being placed in service, the Personal Property
12    Tax Replacement Income Tax for such taxable year shall be
13    increased. Such increase shall be determined by (i)
14    recomputing the investment credit which would have been
15    allowed for the year in which credit for such property was
16    originally allowed by eliminating such property from such
17    computation and, (ii) subtracting such recomputed credit
18    from the amount of credit previously allowed. For the
19    purposes of this paragraph (7), a reduction of the basis of
20    qualified property resulting from a redetermination of the
21    purchase price shall be deemed a disposition of qualified
22    property to the extent of such reduction.
23        (8) Unless the investment credit is extended by law,
24    the basis of qualified property shall not include costs
25    incurred after December 31, 2013, except for costs incurred
26    pursuant to a binding contract entered into on or before

 

 

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1    December 31, 2013.
2        (9) Each taxable year ending before December 31, 2000,
3    a partnership may elect to pass through to its partners the
4    credits to which the partnership is entitled under this
5    subsection (e) for the taxable year. A partner may use the
6    credit allocated to him or her under this paragraph only
7    against the tax imposed in subsections (c) and (d) of this
8    Section. If the partnership makes that election, those
9    credits shall be allocated among the partners in the
10    partnership in accordance with the rules set forth in
11    Section 704(b) of the Internal Revenue Code, and the rules
12    promulgated under that Section, and the allocated amount of
13    the credits shall be allowed to the partners for that
14    taxable year. The partnership shall make this election on
15    its Personal Property Tax Replacement Income Tax return for
16    that taxable year. The election to pass through the credits
17    shall be irrevocable.
18        For taxable years ending on or after December 31, 2000,
19    a partner that qualifies its partnership for a subtraction
20    under subparagraph (I) of paragraph (2) of subsection (d)
21    of Section 203 or a shareholder that qualifies a Subchapter
22    S corporation for a subtraction under subparagraph (S) of
23    paragraph (2) of subsection (b) of Section 203 shall be
24    allowed a credit under this subsection (e) equal to its
25    share of the credit earned under this subsection (e) during
26    the taxable year by the partnership or Subchapter S

 

 

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1    corporation, determined in accordance with the
2    determination of income and distributive share of income
3    under Sections 702 and 704 and Subchapter S of the Internal
4    Revenue Code. This paragraph is exempt from the provisions
5    of Section 250.
6    (f) Investment credit; Enterprise Zone; River Edge
7Redevelopment Zone.
8        (1) A taxpayer shall be allowed a credit against the
9    tax imposed by subsections (a) and (b) of this Section for
10    investment in qualified property which is placed in service
11    in an Enterprise Zone created pursuant to the Illinois
12    Enterprise Zone Act or, for property placed in service on
13    or after July 1, 2006, a River Edge Redevelopment Zone
14    established pursuant to the River Edge Redevelopment Zone
15    Act. For partners, shareholders of Subchapter S
16    corporations, and owners of limited liability companies,
17    if the liability company is treated as a partnership for
18    purposes of federal and State income taxation, there shall
19    be allowed a credit under this subsection (f) to be
20    determined in accordance with the determination of income
21    and distributive share of income under Sections 702 and 704
22    and Subchapter S of the Internal Revenue Code. The credit
23    shall be .5% of the basis for such property. The credit
24    shall be available only in the taxable year in which the
25    property is placed in service in the Enterprise Zone or
26    River Edge Redevelopment Zone and shall not be allowed to

 

 

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1    the extent that it would reduce a taxpayer's liability for
2    the tax imposed by subsections (a) and (b) of this Section
3    to below zero. For tax years ending on or after December
4    31, 1985, the credit shall be allowed for the tax year in
5    which the property is placed in service, or, if the amount
6    of the credit exceeds the tax liability for that year,
7    whether it exceeds the original liability or the liability
8    as later amended, such excess may be carried forward and
9    applied to the tax liability of the 5 taxable years
10    following the excess credit year. The credit shall be
11    applied to the earliest year for which there is a
12    liability. If there is credit from more than one tax year
13    that is available to offset a liability, the credit
14    accruing first in time shall be applied first.
15        (2) The term qualified property means property which:
16            (A) is tangible, whether new or used, including
17        buildings and structural components of buildings;
18            (B) is depreciable pursuant to Section 167 of the
19        Internal Revenue Code, except that "3-year property"
20        as defined in Section 168(c)(2)(A) of that Code is not
21        eligible for the credit provided by this subsection
22        (f);
23            (C) is acquired by purchase as defined in Section
24        179(d) of the Internal Revenue Code;
25            (D) is used in the Enterprise Zone or River Edge
26        Redevelopment Zone by the taxpayer; and

 

 

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1            (E) has not been previously used in Illinois in
2        such a manner and by such a person as would qualify for
3        the credit provided by this subsection (f) or
4        subsection (e).
5        (3) The basis of qualified property shall be the basis
6    used to compute the depreciation deduction for federal
7    income tax purposes.
8        (4) If the basis of the property for federal income tax
9    depreciation purposes is increased after it has been placed
10    in service in the Enterprise Zone or River Edge
11    Redevelopment Zone by the taxpayer, the amount of such
12    increase shall be deemed property placed in service on the
13    date of such increase in basis.
14        (5) The term "placed in service" shall have the same
15    meaning as under Section 46 of the Internal Revenue Code.
16        (6) If during any taxable year, any property ceases to
17    be qualified property in the hands of the taxpayer within
18    48 months after being placed in service, or the situs of
19    any qualified property is moved outside the Enterprise Zone
20    or River Edge Redevelopment Zone within 48 months after
21    being placed in service, the tax imposed under subsections
22    (a) and (b) of this Section for such taxable year shall be
23    increased. Such increase shall be determined by (i)
24    recomputing the investment credit which would have been
25    allowed for the year in which credit for such property was
26    originally allowed by eliminating such property from such

 

 

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1    computation, and (ii) subtracting such recomputed credit
2    from the amount of credit previously allowed. For the
3    purposes of this paragraph (6), a reduction of the basis of
4    qualified property resulting from a redetermination of the
5    purchase price shall be deemed a disposition of qualified
6    property to the extent of such reduction.
7        (7) There shall be allowed an additional credit equal
8    to 0.5% of the basis of qualified property placed in
9    service during the taxable year in a River Edge
10    Redevelopment Zone, provided such property is placed in
11    service on or after July 1, 2006, and the taxpayer's base
12    employment within Illinois has increased by 1% or more over
13    the preceding year as determined by the taxpayer's
14    employment records filed with the Illinois Department of
15    Employment Security. Taxpayers who are new to Illinois
16    shall be deemed to have met the 1% growth in base
17    employment for the first year in which they file employment
18    records with the Illinois Department of Employment
19    Security. If, in any year, the increase in base employment
20    within Illinois over the preceding year is less than 1%,
21    the additional credit shall be limited to that percentage
22    times a fraction, the numerator of which is 0.5% and the
23    denominator of which is 1%, but shall not exceed 0.5%.
24    (g) Jobs Tax Credit; Enterprise Zone, River Edge
25Redevelopment Zone, and Foreign Trade Zone or Sub-Zone.
26        (1) A taxpayer conducting a trade or business in an

 

 

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1    enterprise zone or a High Impact Business designated by the
2    Department of Commerce and Economic Opportunity or for
3    taxable years ending on or after December 31, 2006, in a
4    River Edge Redevelopment Zone conducting a trade or
5    business in a federally designated Foreign Trade Zone or
6    Sub-Zone shall be allowed a credit against the tax imposed
7    by subsections (a) and (b) of this Section in the amount of
8    $500 per eligible employee hired to work in the zone during
9    the taxable year.
10        (2) To qualify for the credit:
11            (A) the taxpayer must hire 5 or more eligible
12        employees to work in an enterprise zone, River Edge
13        Redevelopment Zone, or federally designated Foreign
14        Trade Zone or Sub-Zone during the taxable year;
15            (B) the taxpayer's total employment within the
16        enterprise zone, River Edge Redevelopment Zone, or
17        federally designated Foreign Trade Zone or Sub-Zone
18        must increase by 5 or more full-time employees beyond
19        the total employed in that zone at the end of the
20        previous tax year for which a jobs tax credit under
21        this Section was taken, or beyond the total employed by
22        the taxpayer as of December 31, 1985, whichever is
23        later; and
24            (C) the eligible employees must be employed 180
25        consecutive days in order to be deemed hired for
26        purposes of this subsection.

 

 

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1        (3) An "eligible employee" means an employee who is:
2            (A) Certified by the Department of Commerce and
3        Economic Opportunity as "eligible for services"
4        pursuant to regulations promulgated in accordance with
5        Title II of the Job Training Partnership Act, Training
6        Services for the Disadvantaged or Title III of the Job
7        Training Partnership Act, Employment and Training
8        Assistance for Dislocated Workers Program.
9            (B) Hired after the enterprise zone, River Edge
10        Redevelopment Zone, or federally designated Foreign
11        Trade Zone or Sub-Zone was designated or the trade or
12        business was located in that zone, whichever is later.
13            (C) Employed in the enterprise zone, River Edge
14        Redevelopment Zone, or Foreign Trade Zone or Sub-Zone.
15        An employee is employed in an enterprise zone or
16        federally designated Foreign Trade Zone or Sub-Zone if
17        his services are rendered there or it is the base of
18        operations for the services performed.
19            (D) A full-time employee working 30 or more hours
20        per week.
21        (4) For tax years ending on or after December 31, 1985
22    and prior to December 31, 1988, the credit shall be allowed
23    for the tax year in which the eligible employees are hired.
24    For tax years ending on or after December 31, 1988, the
25    credit shall be allowed for the tax year immediately
26    following the tax year in which the eligible employees are

 

 

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1    hired. If the amount of the credit exceeds the tax
2    liability for that year, whether it exceeds the original
3    liability or the liability as later amended, such excess
4    may be carried forward and applied to the tax liability of
5    the 5 taxable years following the excess credit year. The
6    credit shall be applied to the earliest year for which
7    there is a liability. If there is credit from more than one
8    tax year that is available to offset a liability, earlier
9    credit shall be applied first.
10        (5) The Department of Revenue shall promulgate such
11    rules and regulations as may be deemed necessary to carry
12    out the purposes of this subsection (g).
13        (6) The credit shall be available for eligible
14    employees hired on or after January 1, 1986.
15    (h) Investment credit; High Impact Business; Green Energy
16Business.
17        (1) Subject to subsection (a) of Section 10 of the
18    Green Energy Business Act, or subsections (b) and (b-5) of
19    Section 5.5 of the Illinois Enterprise Zone Act, a taxpayer
20    shall be allowed a credit against the tax imposed by
21    subsections (a) and (b) of this Section for investment in
22    qualified property which is placed in service by a
23    Department of Commerce and Economic Opportunity designated
24    Green Energy Business or High Impact Business. The credit
25    shall be .5% of the basis for such property. The credit
26    shall not be available (i) until the minimum investments in

 

 

HB5095- 26 -LRB097 18468 HLH 63698 b

1    qualified property set forth in subdivision (a)(3)(A) of
2    Section 5.5 of the Illinois Enterprise Zone Act have been
3    satisfied or (ii) until the Department of Commerce and
4    Economic Opportunity designates the business as a Green
5    Energy Business under the Green Energy Business Act, or
6    until the time authorized in subsection (b-5) of the
7    Illinois Enterprise Zone Act for entities designated as
8    High Impact Businesses under subdivisions (a)(3)(B),
9    (a)(3)(C), and (a)(3)(D) of Section 5.5 of the Illinois
10    Enterprise Zone Act, and shall not be allowed to the extent
11    that it would reduce a taxpayer's liability for the tax
12    imposed by subsections (a) and (b) of this Section to below
13    zero. The credit applicable to such investments shall be
14    taken in the taxable year in which such investments have
15    been completed. The credit for additional investments
16    beyond the minimum investment by a designated high impact
17    business authorized under subdivision (a)(3)(A) of Section
18    5.5 of the Illinois Enterprise Zone Act shall be available
19    only in the taxable year in which the property is placed in
20    service and shall not be allowed to the extent that it
21    would reduce a taxpayer's liability for the tax imposed by
22    subsections (a) and (b) of this Section to below zero. For
23    tax years ending on or after December 31, 1987, the credit
24    shall be allowed for the tax year in which the property is
25    placed in service, or, if the amount of the credit exceeds
26    the tax liability for that year, whether it exceeds the

 

 

HB5095- 27 -LRB097 18468 HLH 63698 b

1    original liability or the liability as later amended, such
2    excess may be carried forward and applied to the tax
3    liability of the 5 taxable years following the excess
4    credit year. The credit shall be applied to the earliest
5    year for which there is a liability. If there is credit
6    from more than one tax year that is available to offset a
7    liability, the credit accruing first in time shall be
8    applied first.
9        Changes made in this subdivision (h)(1) by Public Act
10    88-670 restore changes made by Public Act 85-1182 and
11    reflect existing law.
12        (2) The term qualified property means property which:
13            (A) is tangible, whether new or used, including
14        buildings and structural components of buildings;
15            (B) is depreciable pursuant to Section 167 of the
16        Internal Revenue Code, except that "3-year property"
17        as defined in Section 168(c)(2)(A) of that Code is not
18        eligible for the credit provided by this subsection
19        (h);
20            (C) is acquired by purchase as defined in Section
21        179(d) of the Internal Revenue Code; and
22            (D) is not eligible for the Enterprise Zone
23        Investment Credit provided by subsection (f) of this
24        Section.
25        (3) The basis of qualified property shall be the basis
26    used to compute the depreciation deduction for federal

 

 

HB5095- 28 -LRB097 18468 HLH 63698 b

1    income tax purposes.
2        (4) If the basis of the property for federal income tax
3    depreciation purposes is increased after it has been placed
4    in service in a federally designated Foreign Trade Zone or
5    Sub-Zone located in Illinois by the taxpayer, the amount of
6    such increase shall be deemed property placed in service on
7    the date of such increase in basis.
8        (5) The term "placed in service" shall have the same
9    meaning as under Section 46 of the Internal Revenue Code.
10        (6) If during any taxable year ending on or before
11    December 31, 1996, any property ceases to be qualified
12    property in the hands of the taxpayer within 48 months
13    after being placed in service, or the situs of any
14    qualified property is moved outside Illinois within 48
15    months after being placed in service, the tax imposed under
16    subsections (a) and (b) of this Section for such taxable
17    year shall be increased. Such increase shall be determined
18    by (i) recomputing the investment credit which would have
19    been allowed for the year in which credit for such property
20    was originally allowed by eliminating such property from
21    such computation, and (ii) subtracting such recomputed
22    credit from the amount of credit previously allowed. For
23    the purposes of this paragraph (6), a reduction of the
24    basis of qualified property resulting from a
25    redetermination of the purchase price shall be deemed a
26    disposition of qualified property to the extent of such

 

 

HB5095- 29 -LRB097 18468 HLH 63698 b

1    reduction.
2        (7) Beginning with tax years ending after December 31,
3    1996, if a taxpayer qualifies for the credit under this
4    subsection (h) and thereby is granted a tax abatement and
5    the taxpayer relocates its entire facility in violation of
6    the explicit terms and length of the contract under Section
7    18-183 of the Property Tax Code, the tax imposed under
8    subsections (a) and (b) of this Section shall be increased
9    for the taxable year in which the taxpayer relocated its
10    facility by an amount equal to the amount of credit
11    received by the taxpayer under this subsection (h).
12    (i) Credit for Personal Property Tax Replacement Income
13Tax. For tax years ending prior to December 31, 2003, a credit
14shall be allowed against the tax imposed by subsections (a) and
15(b) of this Section for the tax imposed by subsections (c) and
16(d) of this Section. This credit shall be computed by
17multiplying the tax imposed by subsections (c) and (d) of this
18Section by a fraction, the numerator of which is base income
19allocable to Illinois and the denominator of which is Illinois
20base income, and further multiplying the product by the tax
21rate imposed by subsections (a) and (b) of this Section.
22    Any credit earned on or after December 31, 1986 under this
23subsection which is unused in the year the credit is computed
24because it exceeds the tax liability imposed by subsections (a)
25and (b) for that year (whether it exceeds the original
26liability or the liability as later amended) may be carried

 

 

HB5095- 30 -LRB097 18468 HLH 63698 b

1forward and applied to the tax liability imposed by subsections
2(a) and (b) of the 5 taxable years following the excess credit
3year, provided that no credit may be carried forward to any
4year ending on or after December 31, 2003. This credit shall be
5applied first to the earliest year for which there is a
6liability. If there is a credit under this subsection from more
7than one tax year that is available to offset a liability the
8earliest credit arising under this subsection shall be applied
9first.
10    If, during any taxable year ending on or after December 31,
111986, the tax imposed by subsections (c) and (d) of this
12Section for which a taxpayer has claimed a credit under this
13subsection (i) is reduced, the amount of credit for such tax
14shall also be reduced. Such reduction shall be determined by
15recomputing the credit to take into account the reduced tax
16imposed by subsections (c) and (d). If any portion of the
17reduced amount of credit has been carried to a different
18taxable year, an amended return shall be filed for such taxable
19year to reduce the amount of credit claimed.
20    (j) Training expense credit. Beginning with tax years
21ending on or after December 31, 1986 and prior to December 31,
222003, a taxpayer shall be allowed a credit against the tax
23imposed by subsections (a) and (b) under this Section for all
24amounts paid or accrued, on behalf of all persons employed by
25the taxpayer in Illinois or Illinois residents employed outside
26of Illinois by a taxpayer, for educational or vocational

 

 

HB5095- 31 -LRB097 18468 HLH 63698 b

1training in semi-technical or technical fields or semi-skilled
2or skilled fields, which were deducted from gross income in the
3computation of taxable income. The credit against the tax
4imposed by subsections (a) and (b) shall be 1.6% of such
5training expenses. For partners, shareholders of subchapter S
6corporations, and owners of limited liability companies, if the
7liability company is treated as a partnership for purposes of
8federal and State income taxation, there shall be allowed a
9credit under this subsection (j) to be determined in accordance
10with the determination of income and distributive share of
11income under Sections 702 and 704 and subchapter S of the
12Internal Revenue Code.
13    Any credit allowed under this subsection which is unused in
14the year the credit is earned may be carried forward to each of
15the 5 taxable years following the year for which the credit is
16first computed until it is used. This credit shall be applied
17first to the earliest year for which there is a liability. If
18there is a credit under this subsection from more than one tax
19year that is available to offset a liability the earliest
20credit arising under this subsection shall be applied first. No
21carryforward credit may be claimed in any tax year ending on or
22after December 31, 2003.
23    (k) Research and development credit.
24    For tax years ending after July 1, 1990 and prior to
25December 31, 2003, and beginning again for tax years ending on
26or after December 31, 2004, and ending prior to January 1,

 

 

HB5095- 32 -LRB097 18468 HLH 63698 b

12011, a taxpayer shall be allowed a credit against the tax
2imposed by subsections (a) and (b) of this Section for
3increasing research activities in this State. The credit
4allowed against the tax imposed by subsections (a) and (b)
5shall be equal to 6 1/2% of the qualifying expenditures for
6increasing research activities in this State. For partners,
7shareholders of subchapter S corporations, and owners of
8limited liability companies, if the liability company is
9treated as a partnership for purposes of federal and State
10income taxation, there shall be allowed a credit under this
11subsection to be determined in accordance with the
12determination of income and distributive share of income under
13Sections 702 and 704 and subchapter S of the Internal Revenue
14Code.
15    For purposes of this subsection, "qualifying expenditures"
16means the qualifying expenditures as defined for the federal
17credit for increasing research activities which would be
18allowable under Section 41 of the Internal Revenue Code and
19which are conducted in this State, "qualifying expenditures for
20increasing research activities in this State" means the excess
21of qualifying expenditures for the taxable year in which
22incurred over qualifying expenditures for the base period,
23"qualifying expenditures for the base period" means the average
24of the qualifying expenditures for each year in the base
25period, and "base period" means the 3 taxable years immediately
26preceding the taxable year for which the determination is being

 

 

HB5095- 33 -LRB097 18468 HLH 63698 b

1made.
2    Any credit in excess of the tax liability for the taxable
3year may be carried forward. A taxpayer may elect to have the
4unused credit shown on its final completed return carried over
5as a credit against the tax liability for the following 5
6taxable years or until it has been fully used, whichever occurs
7first; provided that no credit earned in a tax year ending
8prior to December 31, 2003 may be carried forward to any year
9ending on or after December 31, 2003, and no credit may be
10carried forward to any taxable year ending on or after January
111, 2011.
12    If an unused credit is carried forward to a given year from
132 or more earlier years, that credit arising in the earliest
14year will be applied first against the tax liability for the
15given year. If a tax liability for the given year still
16remains, the credit from the next earliest year will then be
17applied, and so on, until all credits have been used or no tax
18liability for the given year remains. Any remaining unused
19credit or credits then will be carried forward to the next
20following year in which a tax liability is incurred, except
21that no credit can be carried forward to a year which is more
22than 5 years after the year in which the expense for which the
23credit is given was incurred.
24    No inference shall be drawn from this amendatory Act of the
2591st General Assembly in construing this Section for taxable
26years beginning before January 1, 1999.

 

 

HB5095- 34 -LRB097 18468 HLH 63698 b

1    (l) Environmental Remediation Tax Credit.
2        (i) For tax years ending after December 31, 1997 and on
3    or before December 31, 2001, a taxpayer shall be allowed a
4    credit against the tax imposed by subsections (a) and (b)
5    of this Section for certain amounts paid for unreimbursed
6    eligible remediation costs, as specified in this
7    subsection. For purposes of this Section, "unreimbursed
8    eligible remediation costs" means costs approved by the
9    Illinois Environmental Protection Agency ("Agency") under
10    Section 58.14 of the Environmental Protection Act that were
11    paid in performing environmental remediation at a site for
12    which a No Further Remediation Letter was issued by the
13    Agency and recorded under Section 58.10 of the
14    Environmental Protection Act. The credit must be claimed
15    for the taxable year in which Agency approval of the
16    eligible remediation costs is granted. The credit is not
17    available to any taxpayer if the taxpayer or any related
18    party caused or contributed to, in any material respect, a
19    release of regulated substances on, in, or under the site
20    that was identified and addressed by the remedial action
21    pursuant to the Site Remediation Program of the
22    Environmental Protection Act. After the Pollution Control
23    Board rules are adopted pursuant to the Illinois
24    Administrative Procedure Act for the administration and
25    enforcement of Section 58.9 of the Environmental
26    Protection Act, determinations as to credit availability

 

 

HB5095- 35 -LRB097 18468 HLH 63698 b

1    for purposes of this Section shall be made consistent with
2    those rules. For purposes of this Section, "taxpayer"
3    includes a person whose tax attributes the taxpayer has
4    succeeded to under Section 381 of the Internal Revenue Code
5    and "related party" includes the persons disallowed a
6    deduction for losses by paragraphs (b), (c), and (f)(1) of
7    Section 267 of the Internal Revenue Code by virtue of being
8    a related taxpayer, as well as any of its partners. The
9    credit allowed against the tax imposed by subsections (a)
10    and (b) shall be equal to 25% of the unreimbursed eligible
11    remediation costs in excess of $100,000 per site, except
12    that the $100,000 threshold shall not apply to any site
13    contained in an enterprise zone as determined by the
14    Department of Commerce and Community Affairs (now
15    Department of Commerce and Economic Opportunity). The
16    total credit allowed shall not exceed $40,000 per year with
17    a maximum total of $150,000 per site. For partners and
18    shareholders of subchapter S corporations, there shall be
19    allowed a credit under this subsection to be determined in
20    accordance with the determination of income and
21    distributive share of income under Sections 702 and 704 and
22    subchapter S of the Internal Revenue Code.
23        (ii) A credit allowed under this subsection that is
24    unused in the year the credit is earned may be carried
25    forward to each of the 5 taxable years following the year
26    for which the credit is first earned until it is used. The

 

 

HB5095- 36 -LRB097 18468 HLH 63698 b

1    term "unused credit" does not include any amounts of
2    unreimbursed eligible remediation costs in excess of the
3    maximum credit per site authorized under paragraph (i).
4    This credit shall be applied first to the earliest year for
5    which there is a liability. If there is a credit under this
6    subsection from more than one tax year that is available to
7    offset a liability, the earliest credit arising under this
8    subsection shall be applied first. A credit allowed under
9    this subsection may be sold to a buyer as part of a sale of
10    all or part of the remediation site for which the credit
11    was granted. The purchaser of a remediation site and the
12    tax credit shall succeed to the unused credit and remaining
13    carry-forward period of the seller. To perfect the
14    transfer, the assignor shall record the transfer in the
15    chain of title for the site and provide written notice to
16    the Director of the Illinois Department of Revenue of the
17    assignor's intent to sell the remediation site and the
18    amount of the tax credit to be transferred as a portion of
19    the sale. In no event may a credit be transferred to any
20    taxpayer if the taxpayer or a related party would not be
21    eligible under the provisions of subsection (i).
22        (iii) For purposes of this Section, the term "site"
23    shall have the same meaning as under Section 58.2 of the
24    Environmental Protection Act.
25    (m) Education expense credit. Beginning with tax years
26ending after December 31, 1999, a taxpayer who is the custodian

 

 

HB5095- 37 -LRB097 18468 HLH 63698 b

1of one or more qualifying pupils shall be allowed a credit
2against the tax imposed by subsections (a) and (b) of this
3Section for qualified education expenses incurred on behalf of
4the qualifying pupils. The credit shall be equal to 25% of
5qualified education expenses, but in no event may the total
6credit under this subsection claimed by a family that is the
7custodian of qualifying pupils exceed $500. In no event shall a
8credit under this subsection reduce the taxpayer's liability
9under this Act to less than zero. This subsection is exempt
10from the provisions of Section 250 of this Act.
11    For purposes of this subsection:
12    "Qualifying pupils" means individuals who (i) are
13residents of the State of Illinois, (ii) are under the age of
1421 at the close of the school year for which a credit is
15sought, and (iii) during the school year for which a credit is
16sought were full-time pupils enrolled in a kindergarten through
17twelfth grade education program at any school, as defined in
18this subsection.
19    "Qualified education expense" means the amount incurred on
20behalf of a qualifying pupil in excess of $250 for tuition,
21book fees, and lab fees at the school in which the pupil is
22enrolled during the regular school year.
23    "School" means any public or nonpublic elementary or
24secondary school in Illinois that is in compliance with Title
25VI of the Civil Rights Act of 1964 and attendance at which
26satisfies the requirements of Section 26-1 of the School Code,

 

 

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1except that nothing shall be construed to require a child to
2attend any particular public or nonpublic school to qualify for
3the credit under this Section.
4    "Custodian" means, with respect to qualifying pupils, an
5Illinois resident who is a parent, the parents, a legal
6guardian, or the legal guardians of the qualifying pupils.
7    (n) River Edge Redevelopment Zone site remediation tax
8credit.
9        (i) For tax years ending on or after December 31, 2006,
10    a taxpayer shall be allowed a credit against the tax
11    imposed by subsections (a) and (b) of this Section for
12    certain amounts paid for unreimbursed eligible remediation
13    costs, as specified in this subsection. For purposes of
14    this Section, "unreimbursed eligible remediation costs"
15    means costs approved by the Illinois Environmental
16    Protection Agency ("Agency") under Section 58.14a of the
17    Environmental Protection Act that were paid in performing
18    environmental remediation at a site within a River Edge
19    Redevelopment Zone for which a No Further Remediation
20    Letter was issued by the Agency and recorded under Section
21    58.10 of the Environmental Protection Act. The credit must
22    be claimed for the taxable year in which Agency approval of
23    the eligible remediation costs is granted. The credit is
24    not available to any taxpayer if the taxpayer or any
25    related party caused or contributed to, in any material
26    respect, a release of regulated substances on, in, or under

 

 

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1    the site that was identified and addressed by the remedial
2    action pursuant to the Site Remediation Program of the
3    Environmental Protection Act. Determinations as to credit
4    availability for purposes of this Section shall be made
5    consistent with rules adopted by the Pollution Control
6    Board pursuant to the Illinois Administrative Procedure
7    Act for the administration and enforcement of Section 58.9
8    of the Environmental Protection Act. For purposes of this
9    Section, "taxpayer" includes a person whose tax attributes
10    the taxpayer has succeeded to under Section 381 of the
11    Internal Revenue Code and "related party" includes the
12    persons disallowed a deduction for losses by paragraphs
13    (b), (c), and (f)(1) of Section 267 of the Internal Revenue
14    Code by virtue of being a related taxpayer, as well as any
15    of its partners. The credit allowed against the tax imposed
16    by subsections (a) and (b) shall be equal to 25% of the
17    unreimbursed eligible remediation costs in excess of
18    $100,000 per site.
19        (ii) A credit allowed under this subsection that is
20    unused in the year the credit is earned may be carried
21    forward to each of the 5 taxable years following the year
22    for which the credit is first earned until it is used. This
23    credit shall be applied first to the earliest year for
24    which there is a liability. If there is a credit under this
25    subsection from more than one tax year that is available to
26    offset a liability, the earliest credit arising under this

 

 

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1    subsection shall be applied first. A credit allowed under
2    this subsection may be sold to a buyer as part of a sale of
3    all or part of the remediation site for which the credit
4    was granted. The purchaser of a remediation site and the
5    tax credit shall succeed to the unused credit and remaining
6    carry-forward period of the seller. To perfect the
7    transfer, the assignor shall record the transfer in the
8    chain of title for the site and provide written notice to
9    the Director of the Illinois Department of Revenue of the
10    assignor's intent to sell the remediation site and the
11    amount of the tax credit to be transferred as a portion of
12    the sale. In no event may a credit be transferred to any
13    taxpayer if the taxpayer or a related party would not be
14    eligible under the provisions of subsection (i).
15        (iii) For purposes of this Section, the term "site"
16    shall have the same meaning as under Section 58.2 of the
17    Environmental Protection Act.
18(Source: P.A. 96-115, eff. 7-31-09; 96-116, eff. 7-31-09;
1996-937, eff. 6-23-10; 96-1000, eff. 7-2-10; 96-1496, eff.
201-13-11; 97-2, eff. 5-6-11.)
 
21    (Text of Section after amendment by P.A. 97-636)
22    Sec. 201. Tax Imposed.
23    (a) In general. A tax measured by net income is hereby
24imposed on every individual, corporation, trust and estate for
25each taxable year ending after July 31, 1969 on the privilege

 

 

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1of earning or receiving income in or as a resident of this
2State. Such tax shall be in addition to all other occupation or
3privilege taxes imposed by this State or by any municipal
4corporation or political subdivision thereof.
5    (b) Rates. The tax imposed by subsection (a) of this
6Section shall be determined as follows, except as adjusted by
7subsection (d-1):
8        (1) In the case of an individual, trust or estate, for
9    taxable years ending prior to July 1, 1989, an amount equal
10    to 2 1/2% of the taxpayer's net income for the taxable
11    year.
12        (2) In the case of an individual, trust or estate, for
13    taxable years beginning prior to July 1, 1989 and ending
14    after June 30, 1989, an amount equal to the sum of (i) 2
15    1/2% of the taxpayer's net income for the period prior to
16    July 1, 1989, as calculated under Section 202.3, and (ii)
17    3% of the taxpayer's net income for the period after June
18    30, 1989, as calculated under Section 202.3.
19        (3) In the case of an individual, trust or estate, for
20    taxable years beginning after June 30, 1989, and ending
21    prior to January 1, 2011, an amount equal to 3% of the
22    taxpayer's net income for the taxable year.
23        (4) In the case of an individual, trust, or estate, for
24    taxable years beginning prior to January 1, 2011, and
25    ending after December 31, 2010, an amount equal to the sum
26    of (i) 3% of the taxpayer's net income for the period prior

 

 

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1    to January 1, 2011, as calculated under Section 202.5, and
2    (ii) 5% of the taxpayer's net income for the period after
3    December 31, 2010, as calculated under Section 202.5.
4        (5) In the case of an individual, trust, or estate, for
5    taxable years beginning on or after January 1, 2011, and
6    ending prior to January 1, 2015, an amount equal to 5% of
7    the taxpayer's net income for the taxable year.
8        (5.1) In the case of an individual, trust, or estate,
9    for taxable years beginning prior to January 1, 2015, and
10    ending after December 31, 2014, an amount equal to the sum
11    of (i) 5% of the taxpayer's net income for the period prior
12    to January 1, 2015, as calculated under Section 202.5, and
13    (ii) 3.75% of the taxpayer's net income for the period
14    after December 31, 2014, as calculated under Section 202.5.
15        (5.2) In the case of an individual, trust, or estate,
16    for taxable years beginning on or after January 1, 2015,
17    and ending prior to January 1, 2025, an amount equal to
18    3.75% of the taxpayer's net income for the taxable year.
19        (5.3) In the case of an individual, trust, or estate,
20    for taxable years beginning prior to January 1, 2025, and
21    ending after December 31, 2024, an amount equal to the sum
22    of (i) 3.75% of the taxpayer's net income for the period
23    prior to January 1, 2025, as calculated under Section
24    202.5, and (ii) 3.25% of the taxpayer's net income for the
25    period after December 31, 2024, as calculated under Section
26    202.5.

 

 

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1        (5.4) In the case of an individual, trust, or estate,
2    for taxable years beginning on or after January 1, 2025, an
3    amount equal to 3.25% of the taxpayer's net income for the
4    taxable year.
5        (6) In the case of a corporation, for taxable years
6    ending prior to July 1, 1989, an amount equal to 4% of the
7    taxpayer's net income for the taxable year.
8        (7) In the case of a corporation, for taxable years
9    beginning prior to July 1, 1989 and ending after June 30,
10    1989, an amount equal to the sum of (i) 4% of the
11    taxpayer's net income for the period prior to July 1, 1989,
12    as calculated under Section 202.3, and (ii) 4.8% of the
13    taxpayer's net income for the period after June 30, 1989,
14    as calculated under Section 202.3.
15        (8) In the case of a corporation, for taxable years
16    beginning after June 30, 1989, and ending prior to January
17    1, 2011, an amount equal to 4.8% of the taxpayer's net
18    income for the taxable year.
19        (9) In the case of a corporation, for taxable years
20    beginning prior to January 1, 2011, and ending after
21    December 31, 2010, an amount equal to the sum of (i) 4.8%
22    of the taxpayer's net income for the period prior to
23    January 1, 2011, as calculated under Section 202.5, and
24    (ii) 7% of the taxpayer's net income for the period after
25    December 31, 2010, as calculated under Section 202.5.
26        (10) In the case of a corporation, for taxable years

 

 

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1    beginning on or after January 1, 2011, and ending prior to
2    January 1, 2015, an amount equal to 7% of the taxpayer's
3    net income for the taxable year.
4        (11) In the case of a corporation, for taxable years
5    beginning prior to January 1, 2015, and ending after
6    December 31, 2014, an amount equal to the sum of (i) 7% of
7    the taxpayer's net income for the period prior to January
8    1, 2015, as calculated under Section 202.5, and (ii) 5.25%
9    of the taxpayer's net income for the period after December
10    31, 2014, as calculated under Section 202.5.
11        (12) In the case of a corporation, for taxable years
12    beginning on or after January 1, 2015, and ending prior to
13    January 1, 2025, an amount equal to 5.25% of the taxpayer's
14    net income for the taxable year.
15        (13) In the case of a corporation, for taxable years
16    beginning prior to January 1, 2025, and ending after
17    December 31, 2024, an amount equal to the sum of (i) 5.25%
18    of the taxpayer's net income for the period prior to
19    January 1, 2025, as calculated under Section 202.5, and
20    (ii) 4.8% of the taxpayer's net income for the period after
21    December 31, 2024, as calculated under Section 202.5.
22        (14) In the case of a corporation, for taxable years
23    beginning on or after January 1, 2025, an amount equal to
24    4.8% of the taxpayer's net income for the taxable year.
25    The rates under this subsection (b) are subject to the
26provisions of Section 201.5.

 

 

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1    (c) Personal Property Tax Replacement Income Tax.
2Beginning on July 1, 1979 and thereafter, in addition to such
3income tax, there is also hereby imposed the Personal Property
4Tax Replacement Income Tax measured by net income on every
5corporation (including Subchapter S corporations), partnership
6and trust, for each taxable year ending after June 30, 1979.
7Such taxes are imposed on the privilege of earning or receiving
8income in or as a resident of this State. The Personal Property
9Tax Replacement Income Tax shall be in addition to the income
10tax imposed by subsections (a) and (b) of this Section and in
11addition to all other occupation or privilege taxes imposed by
12this State or by any municipal corporation or political
13subdivision thereof.
14    (d) Additional Personal Property Tax Replacement Income
15Tax Rates. The personal property tax replacement income tax
16imposed by this subsection and subsection (c) of this Section
17in the case of a corporation, other than a Subchapter S
18corporation and except as adjusted by subsection (d-1), shall
19be an additional amount equal to 2.85% of such taxpayer's net
20income for the taxable year, except that beginning on January
211, 1981, and thereafter, the rate of 2.85% specified in this
22subsection shall be reduced to 2.5%, and in the case of a
23partnership, trust or a Subchapter S corporation shall be an
24additional amount equal to 1.5% of such taxpayer's net income
25for the taxable year.
26    (d-1) Rate reduction for certain foreign insurers. In the

 

 

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1case of a foreign insurer, as defined by Section 35A-5 of the
2Illinois Insurance Code, whose state or country of domicile
3imposes on insurers domiciled in Illinois a retaliatory tax
4(excluding any insurer whose premiums from reinsurance assumed
5are 50% or more of its total insurance premiums as determined
6under paragraph (2) of subsection (b) of Section 304, except
7that for purposes of this determination premiums from
8reinsurance do not include premiums from inter-affiliate
9reinsurance arrangements), beginning with taxable years ending
10on or after December 31, 1999, the sum of the rates of tax
11imposed by subsections (b) and (d) shall be reduced (but not
12increased) to the rate at which the total amount of tax imposed
13under this Act, net of all credits allowed under this Act,
14shall equal (i) the total amount of tax that would be imposed
15on the foreign insurer's net income allocable to Illinois for
16the taxable year by such foreign insurer's state or country of
17domicile if that net income were subject to all income taxes
18and taxes measured by net income imposed by such foreign
19insurer's state or country of domicile, net of all credits
20allowed or (ii) a rate of zero if no such tax is imposed on such
21income by the foreign insurer's state of domicile. For the
22purposes of this subsection (d-1), an inter-affiliate includes
23a mutual insurer under common management.
24        (1) For the purposes of subsection (d-1), in no event
25    shall the sum of the rates of tax imposed by subsections
26    (b) and (d) be reduced below the rate at which the sum of:

 

 

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1            (A) the total amount of tax imposed on such foreign
2        insurer under this Act for a taxable year, net of all
3        credits allowed under this Act, plus
4            (B) the privilege tax imposed by Section 409 of the
5        Illinois Insurance Code, the fire insurance company
6        tax imposed by Section 12 of the Fire Investigation
7        Act, and the fire department taxes imposed under
8        Section 11-10-1 of the Illinois Municipal Code,
9    equals 1.25% for taxable years ending prior to December 31,
10    2003, or 1.75% for taxable years ending on or after
11    December 31, 2003, of the net taxable premiums written for
12    the taxable year, as described by subsection (1) of Section
13    409 of the Illinois Insurance Code. This paragraph will in
14    no event increase the rates imposed under subsections (b)
15    and (d).
16        (2) Any reduction in the rates of tax imposed by this
17    subsection shall be applied first against the rates imposed
18    by subsection (b) and only after the tax imposed by
19    subsection (a) net of all credits allowed under this
20    Section other than the credit allowed under subsection (i)
21    has been reduced to zero, against the rates imposed by
22    subsection (d).
23    This subsection (d-1) is exempt from the provisions of
24Section 250.
25    (e) Investment credit. A taxpayer shall be allowed a credit
26against the Personal Property Tax Replacement Income Tax for

 

 

HB5095- 48 -LRB097 18468 HLH 63698 b

1investment in qualified property.
2        (1) A taxpayer shall be allowed a credit equal to .5%
3    of the basis of qualified property placed in service during
4    the taxable year, provided such property is placed in
5    service on or after July 1, 1984. There shall be allowed an
6    additional credit equal to .5% of the basis of qualified
7    property placed in service during the taxable year,
8    provided such property is placed in service on or after
9    July 1, 1986, and the taxpayer's base employment within
10    Illinois has increased by 1% or more over the preceding
11    year as determined by the taxpayer's employment records
12    filed with the Illinois Department of Employment Security.
13    Taxpayers who are new to Illinois shall be deemed to have
14    met the 1% growth in base employment for the first year in
15    which they file employment records with the Illinois
16    Department of Employment Security. The provisions added to
17    this Section by Public Act 85-1200 (and restored by Public
18    Act 87-895) shall be construed as declaratory of existing
19    law and not as a new enactment. If, in any year, the
20    increase in base employment within Illinois over the
21    preceding year is less than 1%, the additional credit shall
22    be limited to that percentage times a fraction, the
23    numerator of which is .5% and the denominator of which is
24    1%, but shall not exceed .5%. The investment credit shall
25    not be allowed to the extent that it would reduce a
26    taxpayer's liability in any tax year below zero, nor may

 

 

HB5095- 49 -LRB097 18468 HLH 63698 b

1    any credit for qualified property be allowed for any year
2    other than the year in which the property was placed in
3    service in Illinois. For tax years ending on or after
4    December 31, 1987, and on or before December 31, 1988, the
5    credit shall be allowed for the tax year in which the
6    property is placed in service, or, if the amount of the
7    credit exceeds the tax liability for that year, whether it
8    exceeds the original liability or the liability as later
9    amended, such excess may be carried forward and applied to
10    the tax liability of the 5 taxable years following the
11    excess credit years if the taxpayer (i) makes investments
12    which cause the creation of a minimum of 2,000 full-time
13    equivalent jobs in Illinois, (ii) is located in an
14    enterprise zone established pursuant to the Illinois
15    Enterprise Zone Act and (iii) is certified by the
16    Department of Commerce and Community Affairs (now
17    Department of Commerce and Economic Opportunity) as
18    complying with the requirements specified in clause (i) and
19    (ii) by July 1, 1986. The Department of Commerce and
20    Community Affairs (now Department of Commerce and Economic
21    Opportunity) shall notify the Department of Revenue of all
22    such certifications immediately. For tax years ending
23    after December 31, 1988, the credit shall be allowed for
24    the tax year in which the property is placed in service,
25    or, if the amount of the credit exceeds the tax liability
26    for that year, whether it exceeds the original liability or

 

 

HB5095- 50 -LRB097 18468 HLH 63698 b

1    the liability as later amended, such excess may be carried
2    forward and applied to the tax liability of the 5 taxable
3    years following the excess credit years. The credit shall
4    be applied to the earliest year for which there is a
5    liability. If there is credit from more than one tax year
6    that is available to offset a liability, earlier credit
7    shall be applied first.
8        (2) The term "qualified property" means property
9    which:
10            (A) is tangible, whether new or used, including
11        buildings and structural components of buildings and
12        signs that are real property, but not including land or
13        improvements to real property that are not a structural
14        component of a building such as landscaping, sewer
15        lines, local access roads, fencing, parking lots, and
16        other appurtenances;
17            (B) is depreciable pursuant to Section 167 of the
18        Internal Revenue Code, except that "3-year property"
19        as defined in Section 168(c)(2)(A) of that Code is not
20        eligible for the credit provided by this subsection
21        (e);
22            (C) is acquired by purchase as defined in Section
23        179(d) of the Internal Revenue Code;
24            (D) is used in Illinois by a taxpayer who is
25        primarily engaged in manufacturing, or in mining coal
26        or fluorite, or in retailing, or was placed in service

 

 

HB5095- 51 -LRB097 18468 HLH 63698 b

1        on or after July 1, 2006 in a River Edge Redevelopment
2        Zone established pursuant to the River Edge
3        Redevelopment Zone Act; and
4            (E) has not previously been used in Illinois in
5        such a manner and by such a person as would qualify for
6        the credit provided by this subsection (e) or
7        subsection (f).
8        (3) For purposes of this subsection (e),
9    "manufacturing" means the material staging and production
10    of tangible personal property by procedures commonly
11    regarded as manufacturing, processing, fabrication, or
12    assembling which changes some existing material into new
13    shapes, new qualities, or new combinations. For purposes of
14    this subsection (e) the term "mining" shall have the same
15    meaning as the term "mining" in Section 613(c) of the
16    Internal Revenue Code. For purposes of this subsection (e),
17    the term "retailing" means the sale of tangible personal
18    property for use or consumption and not for resale, or
19    services rendered in conjunction with the sale of tangible
20    personal property for use or consumption and not for
21    resale. For purposes of this subsection (e), "tangible
22    personal property" has the same meaning as when that term
23    is used in the Retailers' Occupation Tax Act, and, for
24    taxable years ending after December 31, 2008, does not
25    include the generation, transmission, or distribution of
26    electricity.

 

 

HB5095- 52 -LRB097 18468 HLH 63698 b

1        (4) The basis of qualified property shall be the basis
2    used to compute the depreciation deduction for federal
3    income tax purposes.
4        (5) If the basis of the property for federal income tax
5    depreciation purposes is increased after it has been placed
6    in service in Illinois by the taxpayer, the amount of such
7    increase shall be deemed property placed in service on the
8    date of such increase in basis.
9        (6) The term "placed in service" shall have the same
10    meaning as under Section 46 of the Internal Revenue Code.
11        (7) If during any taxable year, any property ceases to
12    be qualified property in the hands of the taxpayer within
13    48 months after being placed in service, or the situs of
14    any qualified property is moved outside Illinois within 48
15    months after being placed in service, the Personal Property
16    Tax Replacement Income Tax for such taxable year shall be
17    increased. Such increase shall be determined by (i)
18    recomputing the investment credit which would have been
19    allowed for the year in which credit for such property was
20    originally allowed by eliminating such property from such
21    computation and, (ii) subtracting such recomputed credit
22    from the amount of credit previously allowed. For the
23    purposes of this paragraph (7), a reduction of the basis of
24    qualified property resulting from a redetermination of the
25    purchase price shall be deemed a disposition of qualified
26    property to the extent of such reduction.

 

 

HB5095- 53 -LRB097 18468 HLH 63698 b

1        (8) Unless the investment credit is extended by law,
2    the basis of qualified property shall not include costs
3    incurred after December 31, 2018, except for costs incurred
4    pursuant to a binding contract entered into on or before
5    December 31, 2018.
6        (9) Each taxable year ending before December 31, 2000,
7    a partnership may elect to pass through to its partners the
8    credits to which the partnership is entitled under this
9    subsection (e) for the taxable year. A partner may use the
10    credit allocated to him or her under this paragraph only
11    against the tax imposed in subsections (c) and (d) of this
12    Section. If the partnership makes that election, those
13    credits shall be allocated among the partners in the
14    partnership in accordance with the rules set forth in
15    Section 704(b) of the Internal Revenue Code, and the rules
16    promulgated under that Section, and the allocated amount of
17    the credits shall be allowed to the partners for that
18    taxable year. The partnership shall make this election on
19    its Personal Property Tax Replacement Income Tax return for
20    that taxable year. The election to pass through the credits
21    shall be irrevocable.
22        For taxable years ending on or after December 31, 2000,
23    a partner that qualifies its partnership for a subtraction
24    under subparagraph (I) of paragraph (2) of subsection (d)
25    of Section 203 or a shareholder that qualifies a Subchapter
26    S corporation for a subtraction under subparagraph (S) of

 

 

HB5095- 54 -LRB097 18468 HLH 63698 b

1    paragraph (2) of subsection (b) of Section 203 shall be
2    allowed a credit under this subsection (e) equal to its
3    share of the credit earned under this subsection (e) during
4    the taxable year by the partnership or Subchapter S
5    corporation, determined in accordance with the
6    determination of income and distributive share of income
7    under Sections 702 and 704 and Subchapter S of the Internal
8    Revenue Code. This paragraph is exempt from the provisions
9    of Section 250.
10    (f) Investment credit; Enterprise Zone; River Edge
11Redevelopment Zone.
12        (1) A taxpayer shall be allowed a credit against the
13    tax imposed by subsections (a) and (b) of this Section for
14    investment in qualified property which is placed in service
15    in an Enterprise Zone created pursuant to the Illinois
16    Enterprise Zone Act or, for property placed in service on
17    or after July 1, 2006, a River Edge Redevelopment Zone
18    established pursuant to the River Edge Redevelopment Zone
19    Act. For partners, shareholders of Subchapter S
20    corporations, and owners of limited liability companies,
21    if the liability company is treated as a partnership for
22    purposes of federal and State income taxation, there shall
23    be allowed a credit under this subsection (f) to be
24    determined in accordance with the determination of income
25    and distributive share of income under Sections 702 and 704
26    and Subchapter S of the Internal Revenue Code. The credit

 

 

HB5095- 55 -LRB097 18468 HLH 63698 b

1    shall be .5% of the basis for such property. The credit
2    shall be available only in the taxable year in which the
3    property is placed in service in the Enterprise Zone or
4    River Edge Redevelopment Zone and shall not be allowed to
5    the extent that it would reduce a taxpayer's liability for
6    the tax imposed by subsections (a) and (b) of this Section
7    to below zero. For tax years ending on or after December
8    31, 1985, the credit shall be allowed for the tax year in
9    which the property is placed in service, or, if the amount
10    of the credit exceeds the tax liability for that year,
11    whether it exceeds the original liability or the liability
12    as later amended, such excess may be carried forward and
13    applied to the tax liability of the 5 taxable years
14    following the excess credit year. The credit shall be
15    applied to the earliest year for which there is a
16    liability. If there is credit from more than one tax year
17    that is available to offset a liability, the credit
18    accruing first in time shall be applied first.
19        (2) The term qualified property means property which:
20            (A) is tangible, whether new or used, including
21        buildings and structural components of buildings;
22            (B) is depreciable pursuant to Section 167 of the
23        Internal Revenue Code, except that "3-year property"
24        as defined in Section 168(c)(2)(A) of that Code is not
25        eligible for the credit provided by this subsection
26        (f);

 

 

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1            (C) is acquired by purchase as defined in Section
2        179(d) of the Internal Revenue Code;
3            (D) is used in the Enterprise Zone or River Edge
4        Redevelopment Zone by the taxpayer; and
5            (E) has not been previously used in Illinois in
6        such a manner and by such a person as would qualify for
7        the credit provided by this subsection (f) or
8        subsection (e).
9        (3) The basis of qualified property shall be the basis
10    used to compute the depreciation deduction for federal
11    income tax purposes.
12        (4) If the basis of the property for federal income tax
13    depreciation purposes is increased after it has been placed
14    in service in the Enterprise Zone or River Edge
15    Redevelopment Zone by the taxpayer, the amount of such
16    increase shall be deemed property placed in service on the
17    date of such increase in basis.
18        (5) The term "placed in service" shall have the same
19    meaning as under Section 46 of the Internal Revenue Code.
20        (6) If during any taxable year, any property ceases to
21    be qualified property in the hands of the taxpayer within
22    48 months after being placed in service, or the situs of
23    any qualified property is moved outside the Enterprise Zone
24    or River Edge Redevelopment Zone within 48 months after
25    being placed in service, the tax imposed under subsections
26    (a) and (b) of this Section for such taxable year shall be

 

 

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1    increased. Such increase shall be determined by (i)
2    recomputing the investment credit which would have been
3    allowed for the year in which credit for such property was
4    originally allowed by eliminating such property from such
5    computation, and (ii) subtracting such recomputed credit
6    from the amount of credit previously allowed. For the
7    purposes of this paragraph (6), a reduction of the basis of
8    qualified property resulting from a redetermination of the
9    purchase price shall be deemed a disposition of qualified
10    property to the extent of such reduction.
11        (7) There shall be allowed an additional credit equal
12    to 0.5% of the basis of qualified property placed in
13    service during the taxable year in a River Edge
14    Redevelopment Zone, provided such property is placed in
15    service on or after July 1, 2006, and the taxpayer's base
16    employment within Illinois has increased by 1% or more over
17    the preceding year as determined by the taxpayer's
18    employment records filed with the Illinois Department of
19    Employment Security. Taxpayers who are new to Illinois
20    shall be deemed to have met the 1% growth in base
21    employment for the first year in which they file employment
22    records with the Illinois Department of Employment
23    Security. If, in any year, the increase in base employment
24    within Illinois over the preceding year is less than 1%,
25    the additional credit shall be limited to that percentage
26    times a fraction, the numerator of which is 0.5% and the

 

 

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1    denominator of which is 1%, but shall not exceed 0.5%.
2    (g) Jobs Tax Credit; Enterprise Zone, River Edge
3Redevelopment Zone, and Foreign Trade Zone or Sub-Zone.
4        (1) A taxpayer conducting a trade or business in an
5    enterprise zone or a High Impact Business designated by the
6    Department of Commerce and Economic Opportunity or for
7    taxable years ending on or after December 31, 2006, in a
8    River Edge Redevelopment Zone conducting a trade or
9    business in a federally designated Foreign Trade Zone or
10    Sub-Zone shall be allowed a credit against the tax imposed
11    by subsections (a) and (b) of this Section in the amount of
12    $500 per eligible employee hired to work in the zone during
13    the taxable year.
14        (2) To qualify for the credit:
15            (A) the taxpayer must hire 5 or more eligible
16        employees to work in an enterprise zone, River Edge
17        Redevelopment Zone, or federally designated Foreign
18        Trade Zone or Sub-Zone during the taxable year;
19            (B) the taxpayer's total employment within the
20        enterprise zone, River Edge Redevelopment Zone, or
21        federally designated Foreign Trade Zone or Sub-Zone
22        must increase by 5 or more full-time employees beyond
23        the total employed in that zone at the end of the
24        previous tax year for which a jobs tax credit under
25        this Section was taken, or beyond the total employed by
26        the taxpayer as of December 31, 1985, whichever is

 

 

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1        later; and
2            (C) the eligible employees must be employed 180
3        consecutive days in order to be deemed hired for
4        purposes of this subsection.
5        (3) An "eligible employee" means an employee who is:
6            (A) Certified by the Department of Commerce and
7        Economic Opportunity as "eligible for services"
8        pursuant to regulations promulgated in accordance with
9        Title II of the Job Training Partnership Act, Training
10        Services for the Disadvantaged or Title III of the Job
11        Training Partnership Act, Employment and Training
12        Assistance for Dislocated Workers Program.
13            (B) Hired after the enterprise zone, River Edge
14        Redevelopment Zone, or federally designated Foreign
15        Trade Zone or Sub-Zone was designated or the trade or
16        business was located in that zone, whichever is later.
17            (C) Employed in the enterprise zone, River Edge
18        Redevelopment Zone, or Foreign Trade Zone or Sub-Zone.
19        An employee is employed in an enterprise zone or
20        federally designated Foreign Trade Zone or Sub-Zone if
21        his services are rendered there or it is the base of
22        operations for the services performed.
23            (D) A full-time employee working 30 or more hours
24        per week.
25        (4) For tax years ending on or after December 31, 1985
26    and prior to December 31, 1988, the credit shall be allowed

 

 

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1    for the tax year in which the eligible employees are hired.
2    For tax years ending on or after December 31, 1988, the
3    credit shall be allowed for the tax year immediately
4    following the tax year in which the eligible employees are
5    hired. If the amount of the credit exceeds the tax
6    liability for that year, whether it exceeds the original
7    liability or the liability as later amended, such excess
8    may be carried forward and applied to the tax liability of
9    the 5 taxable years following the excess credit year. The
10    credit shall be applied to the earliest year for which
11    there is a liability. If there is credit from more than one
12    tax year that is available to offset a liability, earlier
13    credit shall be applied first.
14        (5) The Department of Revenue shall promulgate such
15    rules and regulations as may be deemed necessary to carry
16    out the purposes of this subsection (g).
17        (6) The credit shall be available for eligible
18    employees hired on or after January 1, 1986.
19    (h) Investment credit; High Impact Business; Green Energy
20Business.
21        (1) Subject to subsection (a) of Section 10 of the
22    Green Energy Business Act, or subsections (b) and (b-5) of
23    Section 5.5 of the Illinois Enterprise Zone Act, a taxpayer
24    shall be allowed a credit against the tax imposed by
25    subsections (a) and (b) of this Section for investment in
26    qualified property which is placed in service by a

 

 

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1    Department of Commerce and Economic Opportunity designated
2    Green Energy Business or High Impact Business. The credit
3    shall be .5% of the basis for such property. The credit
4    shall not be available (i) until the minimum investments in
5    qualified property set forth in subdivision (a)(3)(A) of
6    Section 5.5 of the Illinois Enterprise Zone Act have been
7    satisfied or (ii) until the Department of Commerce and
8    Economic Opportunity designates the business as a Green
9    Energy Business under the Green Energy Business Act, or
10    until the time authorized in subsection (b-5) of the
11    Illinois Enterprise Zone Act for entities designated as
12    High Impact Businesses under subdivisions (a)(3)(B),
13    (a)(3)(C), and (a)(3)(D) of Section 5.5 of the Illinois
14    Enterprise Zone Act, and shall not be allowed to the extent
15    that it would reduce a taxpayer's liability for the tax
16    imposed by subsections (a) and (b) of this Section to below
17    zero. The credit applicable to such investments shall be
18    taken in the taxable year in which such investments have
19    been completed. The credit for additional investments
20    beyond the minimum investment by a designated high impact
21    business authorized under subdivision (a)(3)(A) of Section
22    5.5 of the Illinois Enterprise Zone Act shall be available
23    only in the taxable year in which the property is placed in
24    service and shall not be allowed to the extent that it
25    would reduce a taxpayer's liability for the tax imposed by
26    subsections (a) and (b) of this Section to below zero. For

 

 

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1    tax years ending on or after December 31, 1987, the credit
2    shall be allowed for the tax year in which the property is
3    placed in service, or, if the amount of the credit exceeds
4    the tax liability for that year, whether it exceeds the
5    original liability or the liability as later amended, such
6    excess may be carried forward and applied to the tax
7    liability of the 5 taxable years following the excess
8    credit year. The credit shall be applied to the earliest
9    year for which there is a liability. If there is credit
10    from more than one tax year that is available to offset a
11    liability, the credit accruing first in time shall be
12    applied first.
13        Changes made in this subdivision (h)(1) by Public Act
14    88-670 restore changes made by Public Act 85-1182 and
15    reflect existing law.
16        (2) The term qualified property means property which:
17            (A) is tangible, whether new or used, including
18        buildings and structural components of buildings;
19            (B) is depreciable pursuant to Section 167 of the
20        Internal Revenue Code, except that "3-year property"
21        as defined in Section 168(c)(2)(A) of that Code is not
22        eligible for the credit provided by this subsection
23        (h);
24            (C) is acquired by purchase as defined in Section
25        179(d) of the Internal Revenue Code; and
26            (D) is not eligible for the Enterprise Zone

 

 

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1        Investment Credit provided by subsection (f) of this
2        Section.
3        (3) The basis of qualified property shall be the basis
4    used to compute the depreciation deduction for federal
5    income tax purposes.
6        (4) If the basis of the property for federal income tax
7    depreciation purposes is increased after it has been placed
8    in service in a federally designated Foreign Trade Zone or
9    Sub-Zone located in Illinois by the taxpayer, the amount of
10    such increase shall be deemed property placed in service on
11    the date of such increase in basis.
12        (5) The term "placed in service" shall have the same
13    meaning as under Section 46 of the Internal Revenue Code.
14        (6) If during any taxable year ending on or before
15    December 31, 1996, any property ceases to be qualified
16    property in the hands of the taxpayer within 48 months
17    after being placed in service, or the situs of any
18    qualified property is moved outside Illinois within 48
19    months after being placed in service, the tax imposed under
20    subsections (a) and (b) of this Section for such taxable
21    year shall be increased. Such increase shall be determined
22    by (i) recomputing the investment credit which would have
23    been allowed for the year in which credit for such property
24    was originally allowed by eliminating such property from
25    such computation, and (ii) subtracting such recomputed
26    credit from the amount of credit previously allowed. For

 

 

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1    the purposes of this paragraph (6), a reduction of the
2    basis of qualified property resulting from a
3    redetermination of the purchase price shall be deemed a
4    disposition of qualified property to the extent of such
5    reduction.
6        (7) Beginning with tax years ending after December 31,
7    1996, if a taxpayer qualifies for the credit under this
8    subsection (h) and thereby is granted a tax abatement and
9    the taxpayer relocates its entire facility in violation of
10    the explicit terms and length of the contract under Section
11    18-183 of the Property Tax Code, the tax imposed under
12    subsections (a) and (b) of this Section shall be increased
13    for the taxable year in which the taxpayer relocated its
14    facility by an amount equal to the amount of credit
15    received by the taxpayer under this subsection (h).
16    (i) Credit for Personal Property Tax Replacement Income
17Tax. For tax years ending prior to December 31, 2003, a credit
18shall be allowed against the tax imposed by subsections (a) and
19(b) of this Section for the tax imposed by subsections (c) and
20(d) of this Section. This credit shall be computed by
21multiplying the tax imposed by subsections (c) and (d) of this
22Section by a fraction, the numerator of which is base income
23allocable to Illinois and the denominator of which is Illinois
24base income, and further multiplying the product by the tax
25rate imposed by subsections (a) and (b) of this Section.
26    Any credit earned on or after December 31, 1986 under this

 

 

HB5095- 65 -LRB097 18468 HLH 63698 b

1subsection which is unused in the year the credit is computed
2because it exceeds the tax liability imposed by subsections (a)
3and (b) for that year (whether it exceeds the original
4liability or the liability as later amended) may be carried
5forward and applied to the tax liability imposed by subsections
6(a) and (b) of the 5 taxable years following the excess credit
7year, provided that no credit may be carried forward to any
8year ending on or after December 31, 2003. This credit shall be
9applied first to the earliest year for which there is a
10liability. If there is a credit under this subsection from more
11than one tax year that is available to offset a liability the
12earliest credit arising under this subsection shall be applied
13first.
14    If, during any taxable year ending on or after December 31,
151986, the tax imposed by subsections (c) and (d) of this
16Section for which a taxpayer has claimed a credit under this
17subsection (i) is reduced, the amount of credit for such tax
18shall also be reduced. Such reduction shall be determined by
19recomputing the credit to take into account the reduced tax
20imposed by subsections (c) and (d). If any portion of the
21reduced amount of credit has been carried to a different
22taxable year, an amended return shall be filed for such taxable
23year to reduce the amount of credit claimed.
24    (j) Training expense credit. Beginning with tax years
25ending on or after December 31, 1986 and prior to December 31,
262003, a taxpayer shall be allowed a credit against the tax

 

 

HB5095- 66 -LRB097 18468 HLH 63698 b

1imposed by subsections (a) and (b) under this Section for all
2amounts paid or accrued, on behalf of all persons employed by
3the taxpayer in Illinois or Illinois residents employed outside
4of Illinois by a taxpayer, for educational or vocational
5training in semi-technical or technical fields or semi-skilled
6or skilled fields, which were deducted from gross income in the
7computation of taxable income. The credit against the tax
8imposed by subsections (a) and (b) shall be 1.6% of such
9training expenses. For partners, shareholders of subchapter S
10corporations, and owners of limited liability companies, if the
11liability company is treated as a partnership for purposes of
12federal and State income taxation, there shall be allowed a
13credit under this subsection (j) to be determined in accordance
14with the determination of income and distributive share of
15income under Sections 702 and 704 and subchapter S of the
16Internal Revenue Code.
17    Any credit allowed under this subsection which is unused in
18the year the credit is earned may be carried forward to each of
19the 5 taxable years following the year for which the credit is
20first computed until it is used. This credit shall be applied
21first to the earliest year for which there is a liability. If
22there is a credit under this subsection from more than one tax
23year that is available to offset a liability the earliest
24credit arising under this subsection shall be applied first. No
25carryforward credit may be claimed in any tax year ending on or
26after December 31, 2003.

 

 

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1    (k) Research and development credit.
2    For tax years ending after July 1, 1990 and prior to
3December 31, 2003, and beginning again for tax years ending on
4or after December 31, 2004, and ending prior to January 1,
52016, a taxpayer shall be allowed a credit against the tax
6imposed by subsections (a) and (b) of this Section for
7increasing research activities in this State. The credit
8allowed against the tax imposed by subsections (a) and (b)
9shall be equal to 6 1/2% of the qualifying expenditures for
10increasing research activities in this State. For partners,
11shareholders of subchapter S corporations, and owners of
12limited liability companies, if the liability company is
13treated as a partnership for purposes of federal and State
14income taxation, there shall be allowed a credit under this
15subsection to be determined in accordance with the
16determination of income and distributive share of income under
17Sections 702 and 704 and subchapter S of the Internal Revenue
18Code.
19    For purposes of this subsection, "qualifying expenditures"
20means the qualifying expenditures as defined for the federal
21credit for increasing research activities which would be
22allowable under Section 41 of the Internal Revenue Code and
23which are conducted in this State, "qualifying expenditures for
24increasing research activities in this State" means the excess
25of qualifying expenditures for the taxable year in which
26incurred over qualifying expenditures for the base period,

 

 

HB5095- 68 -LRB097 18468 HLH 63698 b

1"qualifying expenditures for the base period" means the average
2of the qualifying expenditures for each year in the base
3period, and "base period" means the 3 taxable years immediately
4preceding the taxable year for which the determination is being
5made.
6    Any credit in excess of the tax liability for the taxable
7year may be carried forward. A taxpayer may elect to have the
8unused credit shown on its final completed return carried over
9as a credit against the tax liability for the following 5
10taxable years or until it has been fully used, whichever occurs
11first; provided that no credit earned in a tax year ending
12prior to December 31, 2003 may be carried forward to any year
13ending on or after December 31, 2003.
14    If an unused credit is carried forward to a given year from
152 or more earlier years, that credit arising in the earliest
16year will be applied first against the tax liability for the
17given year. If a tax liability for the given year still
18remains, the credit from the next earliest year will then be
19applied, and so on, until all credits have been used or no tax
20liability for the given year remains. Any remaining unused
21credit or credits then will be carried forward to the next
22following year in which a tax liability is incurred, except
23that no credit can be carried forward to a year which is more
24than 5 years after the year in which the expense for which the
25credit is given was incurred.
26    No inference shall be drawn from this amendatory Act of the

 

 

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191st General Assembly in construing this Section for taxable
2years beginning before January 1, 1999.
3    (l) Environmental Remediation Tax Credit.
4        (i) For tax years ending after December 31, 1997 and on
5    or before December 31, 2001, a taxpayer shall be allowed a
6    credit against the tax imposed by subsections (a) and (b)
7    of this Section for certain amounts paid for unreimbursed
8    eligible remediation costs, as specified in this
9    subsection. For purposes of this Section, "unreimbursed
10    eligible remediation costs" means costs approved by the
11    Illinois Environmental Protection Agency ("Agency") under
12    Section 58.14 of the Environmental Protection Act that were
13    paid in performing environmental remediation at a site for
14    which a No Further Remediation Letter was issued by the
15    Agency and recorded under Section 58.10 of the
16    Environmental Protection Act. The credit must be claimed
17    for the taxable year in which Agency approval of the
18    eligible remediation costs is granted. The credit is not
19    available to any taxpayer if the taxpayer or any related
20    party caused or contributed to, in any material respect, a
21    release of regulated substances on, in, or under the site
22    that was identified and addressed by the remedial action
23    pursuant to the Site Remediation Program of the
24    Environmental Protection Act. After the Pollution Control
25    Board rules are adopted pursuant to the Illinois
26    Administrative Procedure Act for the administration and

 

 

HB5095- 70 -LRB097 18468 HLH 63698 b

1    enforcement of Section 58.9 of the Environmental
2    Protection Act, determinations as to credit availability
3    for purposes of this Section shall be made consistent with
4    those rules. For purposes of this Section, "taxpayer"
5    includes a person whose tax attributes the taxpayer has
6    succeeded to under Section 381 of the Internal Revenue Code
7    and "related party" includes the persons disallowed a
8    deduction for losses by paragraphs (b), (c), and (f)(1) of
9    Section 267 of the Internal Revenue Code by virtue of being
10    a related taxpayer, as well as any of its partners. The
11    credit allowed against the tax imposed by subsections (a)
12    and (b) shall be equal to 25% of the unreimbursed eligible
13    remediation costs in excess of $100,000 per site, except
14    that the $100,000 threshold shall not apply to any site
15    contained in an enterprise zone as determined by the
16    Department of Commerce and Community Affairs (now
17    Department of Commerce and Economic Opportunity). The
18    total credit allowed shall not exceed $40,000 per year with
19    a maximum total of $150,000 per site. For partners and
20    shareholders of subchapter S corporations, there shall be
21    allowed a credit under this subsection to be determined in
22    accordance with the determination of income and
23    distributive share of income under Sections 702 and 704 and
24    subchapter S of the Internal Revenue Code.
25        (ii) A credit allowed under this subsection that is
26    unused in the year the credit is earned may be carried

 

 

HB5095- 71 -LRB097 18468 HLH 63698 b

1    forward to each of the 5 taxable years following the year
2    for which the credit is first earned until it is used. The
3    term "unused credit" does not include any amounts of
4    unreimbursed eligible remediation costs in excess of the
5    maximum credit per site authorized under paragraph (i).
6    This credit shall be applied first to the earliest year for
7    which there is a liability. If there is a credit under this
8    subsection from more than one tax year that is available to
9    offset a liability, the earliest credit arising under this
10    subsection shall be applied first. A credit allowed under
11    this subsection may be sold to a buyer as part of a sale of
12    all or part of the remediation site for which the credit
13    was granted. The purchaser of a remediation site and the
14    tax credit shall succeed to the unused credit and remaining
15    carry-forward period of the seller. To perfect the
16    transfer, the assignor shall record the transfer in the
17    chain of title for the site and provide written notice to
18    the Director of the Illinois Department of Revenue of the
19    assignor's intent to sell the remediation site and the
20    amount of the tax credit to be transferred as a portion of
21    the sale. In no event may a credit be transferred to any
22    taxpayer if the taxpayer or a related party would not be
23    eligible under the provisions of subsection (i).
24        (iii) For purposes of this Section, the term "site"
25    shall have the same meaning as under Section 58.2 of the
26    Environmental Protection Act.

 

 

HB5095- 72 -LRB097 18468 HLH 63698 b

1    (m) Education expense credit. Beginning with tax years
2ending after December 31, 1999, a taxpayer who is the custodian
3of one or more qualifying pupils shall be allowed a credit
4against the tax imposed by subsections (a) and (b) of this
5Section for qualified education expenses incurred on behalf of
6the qualifying pupils. The credit shall be equal to 25% of
7qualified education expenses, but in no event may the total
8credit under this subsection claimed by a family that is the
9custodian of qualifying pupils exceed $500. In no event shall a
10credit under this subsection reduce the taxpayer's liability
11under this Act to less than zero. This subsection is exempt
12from the provisions of Section 250 of this Act.
13    For purposes of this subsection:
14    "Qualifying pupils" means individuals who (i) are
15residents of the State of Illinois, (ii) are under the age of
1621 at the close of the school year for which a credit is
17sought, and (iii) during the school year for which a credit is
18sought were full-time pupils enrolled in a kindergarten through
19twelfth grade education program at any school, as defined in
20this subsection.
21    "Qualified education expense" means the amount incurred on
22behalf of a qualifying pupil in excess of $250 for tuition,
23book fees, and lab fees at the school in which the pupil is
24enrolled during the regular school year.
25    "School" means any public or nonpublic elementary or
26secondary school in Illinois that is in compliance with Title

 

 

HB5095- 73 -LRB097 18468 HLH 63698 b

1VI of the Civil Rights Act of 1964 and attendance at which
2satisfies the requirements of Section 26-1 of the School Code,
3except that nothing shall be construed to require a child to
4attend any particular public or nonpublic school to qualify for
5the credit under this Section.
6    "Custodian" means, with respect to qualifying pupils, an
7Illinois resident who is a parent, the parents, a legal
8guardian, or the legal guardians of the qualifying pupils.
9    (n) River Edge Redevelopment Zone site remediation tax
10credit.
11        (i) For tax years ending on or after December 31, 2006,
12    a taxpayer shall be allowed a credit against the tax
13    imposed by subsections (a) and (b) of this Section for
14    certain amounts paid for unreimbursed eligible remediation
15    costs, as specified in this subsection. For purposes of
16    this Section, "unreimbursed eligible remediation costs"
17    means costs approved by the Illinois Environmental
18    Protection Agency ("Agency") under Section 58.14a of the
19    Environmental Protection Act that were paid in performing
20    environmental remediation at a site within a River Edge
21    Redevelopment Zone for which a No Further Remediation
22    Letter was issued by the Agency and recorded under Section
23    58.10 of the Environmental Protection Act. The credit must
24    be claimed for the taxable year in which Agency approval of
25    the eligible remediation costs is granted. The credit is
26    not available to any taxpayer if the taxpayer or any

 

 

HB5095- 74 -LRB097 18468 HLH 63698 b

1    related party caused or contributed to, in any material
2    respect, a release of regulated substances on, in, or under
3    the site that was identified and addressed by the remedial
4    action pursuant to the Site Remediation Program of the
5    Environmental Protection Act. Determinations as to credit
6    availability for purposes of this Section shall be made
7    consistent with rules adopted by the Pollution Control
8    Board pursuant to the Illinois Administrative Procedure
9    Act for the administration and enforcement of Section 58.9
10    of the Environmental Protection Act. For purposes of this
11    Section, "taxpayer" includes a person whose tax attributes
12    the taxpayer has succeeded to under Section 381 of the
13    Internal Revenue Code and "related party" includes the
14    persons disallowed a deduction for losses by paragraphs
15    (b), (c), and (f)(1) of Section 267 of the Internal Revenue
16    Code by virtue of being a related taxpayer, as well as any
17    of its partners. The credit allowed against the tax imposed
18    by subsections (a) and (b) shall be equal to 25% of the
19    unreimbursed eligible remediation costs in excess of
20    $100,000 per site.
21        (ii) A credit allowed under this subsection that is
22    unused in the year the credit is earned may be carried
23    forward to each of the 5 taxable years following the year
24    for which the credit is first earned until it is used. This
25    credit shall be applied first to the earliest year for
26    which there is a liability. If there is a credit under this

 

 

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1    subsection from more than one tax year that is available to
2    offset a liability, the earliest credit arising under this
3    subsection shall be applied first. A credit allowed under
4    this subsection may be sold to a buyer as part of a sale of
5    all or part of the remediation site for which the credit
6    was granted. The purchaser of a remediation site and the
7    tax credit shall succeed to the unused credit and remaining
8    carry-forward period of the seller. To perfect the
9    transfer, the assignor shall record the transfer in the
10    chain of title for the site and provide written notice to
11    the Director of the Illinois Department of Revenue of the
12    assignor's intent to sell the remediation site and the
13    amount of the tax credit to be transferred as a portion of
14    the sale. In no event may a credit be transferred to any
15    taxpayer if the taxpayer or a related party would not be
16    eligible under the provisions of subsection (i).
17        (iii) For purposes of this Section, the term "site"
18    shall have the same meaning as under Section 58.2 of the
19    Environmental Protection Act.
20(Source: P.A. 96-115, eff. 7-31-09; 96-116, eff. 7-31-09;
2196-937, eff. 6-23-10; 96-1000, eff. 7-2-10; 96-1496, eff.
221-13-11; 97-2, eff. 5-6-11; 97-636, eff. 6-1-12.)
 
23    Section 25. The Retailers' Occupation Tax Act is amended by
24changing Sections 1d, 1e, 1f, and 5l as follows:
 

 

 

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1    (35 ILCS 120/1d)  (from Ch. 120, par. 440d)
2    Sec. 1d. Subject to the provisions of Section 1f, all
3tangible personal property to be used or consumed within an
4enterprise zone established pursuant to the "Illinois
5Enterprise Zone Act", as amended, or subject to the provisions
6of Section 5.5 of the Illinois Enterprise Zone Act, or subject
7to the provisions of Section 10 of the Green Energy Business
8Act, all tangible personal property to be used or consumed by
9any High Impact Business or Green Energy Business , in the
10process of the manufacturing or assembly of tangible personal
11property for wholesale or retail sale or lease or in the
12process of graphic arts production if used or consumed at a
13facility which is a Department of Commerce and Economic
14Opportunity certified business and located in a county of more
15than 4,000 persons and less than 45,000 persons is exempt from
16the tax imposed by this Act. This exemption includes repair and
17replacement parts for machinery and equipment used primarily in
18the process of manufacturing or assembling tangible personal
19property or in the process of graphic arts production if used
20or consumed at a facility which is a Department of Commerce and
21Economic Opportunity certified business and located in a county
22of more than 4,000 persons and less than 45,000 persons for
23wholesale or retail sale, or lease, and equipment,
24manufacturing or graphic arts fuels, material and supplies for
25the maintenance, repair or operation of such manufacturing or
26assembling or graphic arts machinery or equipment.

 

 

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1(Source: P.A. 94-793, eff. 5-19-06.)
 
2    (35 ILCS 120/1e)  (from Ch. 120, par. 440e)
3    Sec. 1e. Subject to the provisions of Section 1f, or
4subject to the provisions of Section 5.5 of the Illinois
5Enterprise Zone Act, or subject to the provisions of Section 10
6of the Green Energy Business Act, all tangible personal
7property to be used or consumed in the operation of pollution
8control facilities, as defined in Section 1a of this Act,
9within an enterprise zone established pursuant to the "Illinois
10Enterprise Zone Act", as amended, shall be exempt from the tax
11imposed by this Act.
12(Source: P.A. 85-1182.)
 
13    (35 ILCS 120/1f)  (from Ch. 120, par. 440f)
14    Sec. 1f. Except for High Impact Businesses or Green Energy
15Businesses, the exemption stated in Sections 1d and 1e of this
16Act shall only apply to business enterprises which:
17        (1) either (i) make investments which cause the
18    creation of a minimum of 200 full-time equivalent jobs in
19    Illinois or (ii) make investments which cause the retention
20    of a minimum of 2000 full-time jobs in Illinois or (iii)
21    make investments of a minimum of $40,000,000 and retain at
22    least 90% of the jobs in place on the date on which the
23    exemption is granted and for the duration of the exemption;
24    and

 

 

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1        (2) are located in an Enterprise Zone established
2    pursuant to the Illinois Enterprise Zone Act; and
3        (3) are certified by the Department of Commerce and
4    Economic Opportunity as complying with the requirements
5    specified in clauses (1), (2) and (3).
6    Any business enterprise seeking to avail itself of the
7exemptions stated in Sections 1d or 1e, or both, shall make
8application to the Department of Commerce and Economic
9Opportunity in such form and providing such information as may
10be prescribed by the Department of Commerce and Economic
11Opportunity. However, no business enterprise shall be
12required, as a condition for certification under clause (4) of
13this Section, to attest that its decision to invest under
14clause (1) of this Section and to locate under clause (2) of
15this Section is predicated upon the availability of the
16exemptions authorized by Sections 1d or 1e.
17    The Department of Commerce and Economic Opportunity shall
18determine whether the business enterprise meets the criteria
19prescribed in this Section. If the Department of Commerce and
20Economic Opportunity determines that such business enterprise
21meets the criteria, it shall issue a certificate of eligibility
22for exemption to the business enterprise in such form as is
23prescribed by the Department of Revenue. The Department of
24Commerce and Economic Opportunity shall act upon such
25certification requests within 60 days after receipt of the
26application, and shall file with the Department of Revenue a

 

 

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1copy of each certificate of eligibility for exemption.
2    The Department of Commerce and Economic Opportunity shall
3have the power to promulgate rules and regulations to carry out
4the provisions of this Section including the power to define
5the amounts and types of eligible investments not specified in
6this Section which business enterprises must make in order to
7receive the exemptions stated in Sections 1d and 1e of this
8Act; and to require that any business enterprise that is
9granted a tax exemption repay the exempted tax if the business
10enterprise fails to comply with the terms and conditions of the
11certification.
12    Such certificate of eligibility for exemption shall be
13presented by the business enterprise to its supplier when
14making the initial purchase of tangible personal property for
15which an exemption is granted by Section 1d or Section 1e, or
16both, together with a certification by the business enterprise
17that such tangible personal property is exempt from taxation
18under Section 1d or Section 1e and by indicating the exempt
19status of each subsequent purchase on the face of the purchase
20order.
21    The Department of Commerce and Economic Opportunity shall
22determine the period during which such exemption from the taxes
23imposed under this Act is in effect which shall not exceed 20
24years.
25(Source: P.A. 94-793, eff. 5-19-06.)
 

 

 

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1    (35 ILCS 120/5l)  (from Ch. 120, par. 444l)
2    Sec. 5l. Beginning January 1, 1995, each retailer who makes
3a sale of building materials that will be incorporated into a
4High Impact Business location as designated by the Department
5of Commerce and Economic Opportunity under Section 5.5 of the
6Illinois Enterprise Zone Act or Section 10 of the Green Energy
7Business Act may deduct receipts from such sales when
8calculating only the 6.25% State rate of tax imposed by this
9Act. Beginning on the effective date of this amendatory Act of
101995, a retailer may also deduct receipts from such sales when
11calculating any applicable local taxes. However, until the
12effective date of this amendatory Act of 1995, a retailer may
13file claims for credit or refund to recover the amount of any
14applicable local tax paid on such sales. No retailer who is
15eligible for the deduction or credit under Section 5k of this
16Act for making a sale of building materials to be incorporated
17into real estate in an enterprise zone by rehabilitation,
18remodeling or new construction shall be eligible for the
19deduction or credit authorized under this Section.
20(Source: P.A. 94-793, eff. 5-19-06.)
 
21    Section 30. The Public Utilities Act is amended by changing
22Sections 9-222 and 9-222.1A as follows:
 
23    (220 ILCS 5/9-222)  (from Ch. 111 2/3, par. 9-222)
24    Sec. 9-222. Whenever a tax is imposed upon a public utility

 

 

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1engaged in the business of distributing, supplying,
2furnishing, or selling gas for use or consumption pursuant to
3Section 2 of the Gas Revenue Tax Act, or whenever a tax is
4required to be collected by a delivering supplier pursuant to
5Section 2-7 of the Electricity Excise Tax Act, or whenever a
6tax is imposed upon a public utility pursuant to Section 2-202
7of this Act, such utility may charge its customers, other than
8customers who are Green Energy Businesses under Section 10 of
9the Green Energy Business Act, High Impact Businesses high
10impact businesses under Section 5.5 of the Illinois Enterprise
11Zone Act, or certified business enterprises under Section
129-222.1 of this Act, to the extent of such exemption and during
13the period in which such exemption is in effect, in addition to
14any rate authorized by this Act, an additional charge equal to
15the total amount of such taxes. The exemption of this Section
16relating to High Impact Businesses high impact businesses shall
17be subject to the provisions of subsections (a), (b), and (b-5)
18of Section 5.5 of the Illinois Enterprise Zone Act. The
19exemption of this Section relating to Green Energy Businesses
20shall be subject to the provisions of subsection (a) of Section
2110 of the Green Energy Business Act. This requirement shall not
22apply to taxes on invested capital imposed pursuant to the
23Messages Tax Act, the Gas Revenue Tax Act and the Public
24Utilities Revenue Act. Such utility shall file with the
25Commission a supplemental schedule which shall specify such
26additional charge and which shall become effective upon filing

 

 

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1without further notice. Such additional charge shall be shown
2separately on the utility bill to each customer. The Commission
3shall have the power to investigate whether or not such
4supplemental schedule correctly specifies such additional
5charge, but shall have no power to suspend such supplemental
6schedule. If the Commission finds, after a hearing, that such
7supplemental schedule does not correctly specify such
8additional charge, it shall by order require a refund to the
9appropriate customers of the excess, if any, with interest, in
10such manner as it shall deem just and reasonable, and in and by
11such order shall require the utility to file an amended
12supplemental schedule corresponding to the finding and order of
13the Commission. Except with respect to taxes imposed on
14invested capital, such tax liabilities shall be recovered from
15customers solely by means of the additional charges authorized
16by this Section.
17(Source: P.A. 91-914, eff. 7-7-00; 92-12, eff. 7-1-01.)
 
18    (220 ILCS 5/9-222.1A)
19    Sec. 9-222.1A. High impact business or green energy
20business. Beginning on August 1, 1998 and thereafter, a
21business enterprise that is certified as a High Impact Business
22or a Green Energy Business by the Department of Commerce and
23Economic Opportunity (formerly Department of Commerce and
24Community Affairs) is exempt from the tax imposed by Section
252-4 of the Electricity Excise Tax Law, if the High Impact

 

 

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1Business or Green Energy Business is registered to self-assess
2that tax, and is exempt from any additional charges added to
3the business enterprise's utility bills as a pass-on of State
4utility taxes under Section 9-222 of this Act, to the extent
5the tax or charges are exempted by the percentage specified by
6the Department of Commerce and Economic Opportunity for State
7utility taxes, provided the business enterprise meets the
8following criteria:
9        (1) (A) it intends either (i) to make a minimum
10        eligible investment of $12,000,000 that will be placed
11        in service in qualified property in Illinois and is
12        intended to create at least 500 full-time equivalent
13        jobs at a designated location in Illinois; or (ii) to
14        make a minimum eligible investment of $30,000,000 that
15        will be placed in service in qualified property in
16        Illinois and is intended to retain at least 1,500
17        full-time equivalent jobs at a designated location in
18        Illinois; or
19            (B) it meets the criteria of subdivision
20        (a)(3)(B), (a)(3)(C), or (a)(3)(D) of Section 5.5 of
21        the Illinois Enterprise Zone Act, or of subsection (a)
22        of Section 10 of the Green Energy Business Act;
23        (2) it is designated as a High Impact Business or Green
24    Energy Business by the Department of Commerce and Economic
25    Opportunity; and
26        (3) it is certified by the Department of Commerce and

 

 

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1    Economic Opportunity as complying with the requirements
2    specified in clauses (1) and (2) of this Section.
3    The Department of Commerce and Economic Opportunity shall
4determine the period during which the exemption from the
5Electricity Excise Tax Law and the charges imposed under
6Section 9-222 are in effect, which shall not exceed 20 years
7from the date of initial certification, and shall specify the
8percentage of the exemption from those taxes or additional
9charges.
10    The Department of Commerce and Economic Opportunity is
11authorized to promulgate rules and regulations to carry out the
12provisions of this Section, including procedures for complying
13with the requirements specified in clauses (1) and (2) of this
14Section and procedures for applying for the exemptions
15authorized under this Section; to define the amounts and types
16of eligible investments that business enterprises must make in
17order to receive State utility tax exemptions or exemptions
18from the additional charges imposed under Section 9-222 and
19this Section; to approve such utility tax exemptions for
20business enterprises whose investments are not yet placed in
21service; and to require that business enterprises granted tax
22exemptions or exemptions from additional charges under Section
239-222 repay the exempted amount if the business enterprise
24fails to comply with the terms and conditions of the
25certification.
26    Upon certification of the business enterprises by the

 

 

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1Department of Commerce and Economic Opportunity, the
2Department of Commerce and Economic Opportunity shall notify
3the Department of Revenue of the certification. The Department
4of Revenue shall notify the public utilities of the exemption
5status of business enterprises from the tax or pass-on charges
6of State utility taxes. The exemption status shall take effect
7within 3 months after certification of the business enterprise.
8(Source: P.A. 94-793, eff. 5-19-06.)
 
9    Section 95. No acceleration or delay. Where this Act makes
10changes in a statute that is represented in this Act by text
11that is not yet or no longer in effect (for example, a Section
12represented by multiple versions), the use of that text does
13not accelerate or delay the taking effect of (i) the changes
14made by this Act or (ii) provisions derived from any other
15Public Act.
 
16    Section 99. Effective date. This Act takes effect upon
17becoming law.