97TH GENERAL ASSEMBLY
State of Illinois
2011 and 2012
SB0013

 

Introduced 1/27/2011, by Sen. Linda Holmes

 

SYNOPSIS AS INTRODUCED:
 
35 ILCS 10/5-15

    Amends the Economic Development for a Growing Economy Tax Credit Act. Removes a requirement that only certain manufacturing companies may elect to claim the credit against their withholding tax obligations. Effective immediately.


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FISCAL NOTE ACT MAY APPLY

 

 

A BILL FOR

 

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1    AN ACT concerning revenue.
 
2    Be it enacted by the People of the State of Illinois,
3represented in the General Assembly:
 
4    Section 5. The Economic Development for a Growing Economy
5Tax Credit Act is amended by changing Section 5-15 as follows:
 
6    (35 ILCS 10/5-15)
7    Sec. 5-15. Tax Credit Awards. Subject to the conditions set
8forth in this Act, a Taxpayer is entitled to a Credit against
9or, as described in subsection (g) of this Section, a payment
10towards taxes imposed pursuant to subsections (a) and (b) of
11Section 201 of the Illinois Income Tax Act that may be imposed
12on the Taxpayer for a taxable year beginning on or after
13January 1, 1999, if the Taxpayer is awarded a Credit by the
14Department under this Act for that taxable year.
15    (a) The Department shall make Credit awards under this Act
16to foster job creation and retention in Illinois.
17    (b) A person that proposes a project to create new jobs in
18Illinois must enter into an Agreement with the Department for
19the Credit under this Act.
20    (c) The Credit shall be claimed for the taxable years
21specified in the Agreement.
22    (d) The Credit shall not exceed the Incremental Income Tax
23attributable to the project that is the subject of the

 

 

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1Agreement.
2    (e) Nothing herein shall prohibit a Tax Credit Award to an
3Applicant that uses a PEO if all other award criteria are
4satisfied.
5    (f) In lieu of the Credit allowed under this Act against
6the taxes imposed pursuant to subsections (a) and (b) of
7Section 201 of the Illinois Income Tax Act for any taxable year
8ending on or after December 31, 2009, the Taxpayer may elect to
9claim the Credit against its obligation to pay over withholding
10under Section 704A of the Illinois Income Tax Act.
11        (1) The election under this subsection (f) may be made
12    only by a Taxpayer that (i) is primarily engaged in one of
13    the following business activities: motor vehicle metal
14    stamping, automobile manufacturing, automobile and light
15    duty motor vehicle manufacturing, motor vehicle
16    manufacturing, light truck and utility vehicle
17    manufacturing, heavy duty truck manufacturing, or motor
18    vehicle body manufacturing and (ii) meets the following
19    criteria:
20            (A) the Taxpayer (i) had an Illinois net loss or an
21        Illinois net loss deduction under Section 207 of the
22        Illinois Income Tax Act for the taxable year in which
23        the Credit is awarded, (ii) employed a minimum of 1,000
24        full-time employees in this State during the taxable
25        year in which the Credit is awarded, (iii) has an
26        Agreement under this Act on December 14, 2009 (the

 

 

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1        effective date of Public Act 96-834), and (iii) (iv) is
2        in compliance with all provisions of that Agreement;
3            (B) the Taxpayer (i) had an Illinois net loss or an
4        Illinois net loss deduction under Section 207 of the
5        Illinois Income Tax Act for the taxable year in which
6        the Credit is awarded and (ii) , (ii) employed a
7        minimum of 1,000 full-time employees in this State
8        during the taxable year in which the Credit is awarded,
9        and (iii) has applied for an Agreement by July 1, 2011,
10        or within 30 days after the effective date of this
11        amendatory Act of the 97th General Assembly, whichever
12        is later within 365 days after December 14, 2009 (the
13        effective date of Public Act 96-834); or
14            (C) the Taxpayer (i) had an Illinois net operating
15        loss carryforward under Section 207 of the Illinois
16        Income Tax Act in a taxable year ending during calendar
17        year 2008, (ii) has applied for an Agreement within 150
18        days after the effective date of this amendatory Act of
19        the 96th General Assembly, (iii) creates at least 400
20        new jobs in Illinois, (iv) retains at least 2,000 jobs
21        in Illinois that would have been at risk of relocation
22        out of Illinois over a 10-year period, and (v) makes a
23        capital investment of at least $75,000,000.
24        (2) An election under this subsection shall allow the
25    credit to be taken against payments otherwise due under
26    Section 704A of the Illinois Income Tax Act during the

 

 

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1    first calendar year beginning after the end of the taxable
2    year in which the credit is awarded under this Act.
3        (3) The election shall be made in the form and manner
4    required by the Illinois Department of Revenue and, once
5    made, shall be irrevocable.
6        (4) If a Taxpayer who meets the requirements of
7    subparagraph (A) of paragraph (1) of this subsection (f)
8    elects to claim the Credit against its withholdings as
9    provided in this subsection (f), then, on and after the
10    date of the election, the terms of the Agreement between
11    the Taxpayer and the Department may not be further amended
12    during the term of the Agreement.
13    (g) A pass-through entity that has been awarded a credit
14under this Act, its shareholders, or its partners may treat
15some or all of the credit awarded pursuant to this Act as a tax
16payment for purposes of the Illinois Income Tax Act. The term
17"tax payment" means a payment as described in Article 6 or
18Article 8 of the Illinois Income Tax Act or a composite payment
19made by a pass-through entity on behalf of any of its
20shareholders or partners to satisfy such shareholders' or
21partners' taxes imposed pursuant to subsections (a) and (b) of
22Section 201 of the Illinois Income Tax Act. In no event shall
23the amount of the award credited pursuant to this Act exceed
24the Illinois income tax liability of the pass-through entity or
25its shareholders or partners for the taxable year.
26(Source: P.A. 95-375, eff. 8-23-07; 96-834, eff. 12-14-09;

 

 

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196-836, eff. 12-16-09; 96-905, eff. 6-4-10; 96-1000, eff.
27-2-10.)
 
3    Section 99. Effective date. This Act takes effect upon
4becoming law.