97TH GENERAL ASSEMBLY
State of Illinois
2011 and 2012
SB3401

 

Introduced 2/7/2012, by Sen. Carole Pankau

 

SYNOPSIS AS INTRODUCED:
 
35 ILCS 10/5-15

    Amends the Economic Development for a Growing Economy Tax Credit Act. Provides that, on and after the effective date of the amendatory Act, any Taxpayer that is awarded a credit under the Act may elect to claim the Credit against its withholding tax obligations (now, only certain taxpayers that are engaged in motor vehicle metal stamping, automobile manufacturing, automobile and light duty motor vehicle manufacturing, motor vehicle manufacturing, light truck and utility vehicle manufacturing, heavy duty truck manufacturing, or motor vehicle body manufacturing may claim the credit against withholdings). Effective immediately.


LRB097 19857 HLH 65138 b

FISCAL NOTE ACT MAY APPLY

 

 

A BILL FOR

 

SB3401LRB097 19857 HLH 65138 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 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    (Text of Section before amendment by P.A. 97-636)
8    Sec. 5-15. Tax Credit Awards. Subject to the conditions set
9forth in this Act, a Taxpayer is entitled to a Credit against
10or, as described in subsection (g) of this Section, a payment
11towards taxes imposed pursuant to subsections (a) and (b) of
12Section 201 of the Illinois Income Tax Act that may be imposed
13on the Taxpayer for a taxable year beginning on or after
14January 1, 1999, if the Taxpayer is awarded a Credit by the
15Department under this Act for that taxable year.
16    (a) The Department shall make Credit awards under this Act
17to foster job creation and retention in Illinois.
18    (b) A person that proposes a project to create new jobs in
19Illinois must enter into an Agreement with the Department for
20the Credit under this Act.
21    (c) The Credit shall be claimed for the taxable years
22specified in the Agreement.
23    (d) The Credit shall not exceed the Incremental Income Tax

 

 

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1attributable to the project that is the subject of the
2Agreement.
3    (e) Nothing herein shall prohibit a Tax Credit Award to an
4Applicant that uses a PEO if all other award criteria are
5satisfied.
6    (f) In lieu of the Credit allowed under this Act against
7the taxes imposed pursuant to subsections (a) and (b) of
8Section 201 of the Illinois Income Tax Act for any taxable year
9ending on or after December 31, 2009, the Taxpayer may elect to
10claim the Credit against its obligation to pay over withholding
11under Section 704A of the Illinois Income Tax Act.
12        (1) Prior to the effective date of this amendatory Act
13    of the 97th General Assembly, the The election under this
14    subsection (f) may be made only by a Taxpayer that (i) is
15    primarily engaged in one of the following business
16    activities: water purification and treatment, motor
17    vehicle metal stamping, automobile manufacturing,
18    automobile and light duty motor vehicle manufacturing,
19    motor vehicle manufacturing, light truck and utility
20    vehicle manufacturing, heavy duty truck manufacturing,
21    motor vehicle body manufacturing, cable television
22    infrastructure design or manufacturing, or wireless
23    telecommunication or computing terminal device design or
24    manufacturing for use on public networks and (ii) meets the
25    following criteria:
26            (A) the Taxpayer (i) had an Illinois net loss or an

 

 

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

 

 

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

 

 

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1    2,400 full-time employees in Illinois at the time of
2    application, (iii) creates at least 350 full-time jobs and
3    retains at least 250 full-time jobs in Illinois that would
4    have been at risk of being created or retained outside of
5    Illinois, and (iv) makes a capital investment of at least
6    $200,000,000 at the project location.
7        (1.8) On and after the effective date of this
8    amendatory Act of the 97th General Assembly, any Taxpayer
9    that is awarded a Credit under this Act may elect to claim
10    the Credit against its obligation to pay over withholding
11    under Section 704A of the Illinois Income Tax Act.
12        (2) An election under this subsection shall allow the
13    credit to be taken against payments otherwise due under
14    Section 704A of the Illinois Income Tax Act during the
15    first calendar year beginning after the end of the taxable
16    year in which the credit is awarded under this Act.
17        (3) The election shall be made in the form and manner
18    required by the Illinois Department of Revenue and, once
19    made, shall be irrevocable.
20        (4) If a Taxpayer who meets the requirements of
21    subparagraph (A) of paragraph (1) of this subsection (f)
22    elects to claim the Credit against its withholdings as
23    provided in this subsection (f), then, on and after the
24    date of the election, the terms of the Agreement between
25    the Taxpayer and the Department may not be further amended
26    during the term of the Agreement.

 

 

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1    (g) A pass-through entity that has been awarded a credit
2under this Act, its shareholders, or its partners may treat
3some or all of the credit awarded pursuant to this Act as a tax
4payment for purposes of the Illinois Income Tax Act. The term
5"tax payment" means a payment as described in Article 6 or
6Article 8 of the Illinois Income Tax Act or a composite payment
7made by a pass-through entity on behalf of any of its
8shareholders or partners to satisfy such shareholders' or
9partners' taxes imposed pursuant to subsections (a) and (b) of
10Section 201 of the Illinois Income Tax Act. In no event shall
11the amount of the award credited pursuant to this Act exceed
12the Illinois income tax liability of the pass-through entity or
13its shareholders or partners for the taxable year.
14(Source: P.A. 96-834, eff. 12-14-09; 96-836, eff. 12-16-09;
1596-905, eff. 6-4-10; 96-1000, eff. 7-2-10; 96-1534, eff.
163-4-11; 97-2, eff. 5-6-11.)
 
17    (Text of Section after amendment by P.A. 97-636)
18    Sec. 5-15. Tax Credit Awards. Subject to the conditions set
19forth in this Act, a Taxpayer is entitled to a Credit against
20or, as described in subsection (g) of this Section, a payment
21towards taxes imposed pursuant to subsections (a) and (b) of
22Section 201 of the Illinois Income Tax Act that may be imposed
23on the Taxpayer for a taxable year beginning on or after
24January 1, 1999, if the Taxpayer is awarded a Credit by the
25Department under this Act for that taxable year.

 

 

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1    (a) The Department shall make Credit awards under this Act
2to foster job creation and retention in Illinois.
3    (b) A person that proposes a project to create new jobs in
4Illinois must enter into an Agreement with the Department for
5the Credit under this Act.
6    (c) The Credit shall be claimed for the taxable years
7specified in the Agreement.
8    (d) The Credit shall not exceed the Incremental Income Tax
9attributable to the project that is the subject of the
10Agreement.
11    (e) Nothing herein shall prohibit a Tax Credit Award to an
12Applicant that uses a PEO if all other award criteria are
13satisfied.
14    (f) In lieu of the Credit allowed under this Act against
15the taxes imposed pursuant to subsections (a) and (b) of
16Section 201 of the Illinois Income Tax Act for any taxable year
17ending on or after December 31, 2009, the Taxpayer may elect to
18claim the Credit against its obligation to pay over withholding
19under Section 704A of the Illinois Income Tax Act.
20        (1) Prior to the effective date of this amendatory Act
21    of the 97th General Assembly, the The election under this
22    subsection (f) may be made only by a Taxpayer that (i) is
23    primarily engaged in one of the following business
24    activities: water purification and treatment, motor
25    vehicle metal stamping, automobile manufacturing,
26    automobile and light duty motor vehicle manufacturing,

 

 

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

 

 

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1        Income Tax Act in a taxable year ending during calendar
2        year 2008, (ii) has applied for an Agreement within 150
3        days after the effective date of this amendatory Act of
4        the 96th General Assembly, (iii) creates at least 400
5        new jobs in Illinois, (iv) retains at least 2,000 jobs
6        in Illinois that would have been at risk of relocation
7        out of Illinois over a 10-year period, and (v) makes a
8        capital investment of at least $75,000,000;
9            (D) the Taxpayer (i) had an Illinois net operating
10        loss carryforward under Section 207 of the Illinois
11        Income Tax Act in a taxable year ending during calendar
12        year 2009, (ii) has applied for an Agreement within 150
13        days after the effective date of this amendatory Act of
14        the 96th General Assembly, (iii) creates at least 150
15        new jobs, (iv) retains at least 1,000 jobs in Illinois
16        that would have been at risk of relocation out of
17        Illinois over a 10-year period, and (v) makes a capital
18        investment of at least $57,000,000; or
19            (E) the Taxpayer (i) employed at least 2,500
20        full-time employees in the State during the year in
21        which the Credit is awarded, (ii) commits to make at
22        least $500,000,000 in combined capital improvements
23        and project costs under the Agreement, (iii) applies
24        for an Agreement between January 1, 2011 and June 30,
25        2011, (iv) executes an Agreement for the Credit during
26        calendar year 2011, and (v) was incorporated no more

 

 

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1        than 5 years before the filing of an application for an
2        Agreement.
3        (1.5) The election under this subsection (f) may also
4    be made by a Taxpayer for any Credit awarded pursuant to an
5    agreement that was executed between January 1, 2011 and
6    June 30, 2011, if the Taxpayer (i) is primarily engaged in
7    the manufacture of inner tubes or tires, or both, from
8    natural and synthetic rubber, (ii) employs a minimum of
9    2,400 full-time employees in Illinois at the time of
10    application, (iii) creates at least 350 full-time jobs and
11    retains at least 250 full-time jobs in Illinois that would
12    have been at risk of being created or retained outside of
13    Illinois, and (iv) makes a capital investment of at least
14    $200,000,000 at the project location.
15        (1.6) The election under this subsection (f) may also
16    be made by a Taxpayer for any Credit awarded pursuant to an
17    agreement that was executed within 150 days after the
18    effective date of this amendatory Act of the 97th General
19    Assembly, if the Taxpayer (i) is primarily engaged in the
20    operation of a discount department store, (ii) maintains
21    its corporate headquarters in Illinois, (iii) employs a
22    minimum of 4,250 full-time employees at its corporate
23    headquarters in Illinois at the time of application, (iv)
24    retains at least 4,250 full-time jobs in Illinois that
25    would have been at risk of being relocated outside of
26    Illinois, (v) had a minimum of $40,000,000,000 in total

 

 

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1    revenue in 2010, and (vi) makes a capital investment of at
2    least $300,000,000 at the project location.
3        (1.7) Notwithstanding any other provision of law, the
4    election under this subsection (f) may also be made by a
5    Taxpayer for any Credit awarded pursuant to an agreement
6    that was executed or applied for on or after July 1, 2011
7    and on or before March 31, 2012, if the Taxpayer is
8    primarily engaged in the manufacture of original and
9    aftermarket filtration parts and products for automobiles,
10    motor vehicles, light duty motor vehicles, light trucks and
11    utility vehicles, and heavy duty trucks, (ii) employs a
12    minimum of 1,000 full-time employees in Illinois at the
13    time of application, (iii) creates at least 250 full-time
14    jobs in Illinois, (iv) relocates its corporate
15    headquarters to Illinois from another state, and (v) makes
16    a capital investment of at least $4,000,000 at the project
17    location.
18        (1.8) On and after the effective date of this
19    amendatory Act of the 97th General Assembly, any Taxpayer
20    that is awarded a Credit under this Act may elect to claim
21    the Credit against its obligation to pay over withholding
22    under Section 704A of the Illinois Income Tax Act.
23        (2) An election under this subsection shall allow the
24    credit to be taken against payments otherwise due under
25    Section 704A of the Illinois Income Tax Act during the
26    first calendar year beginning after the end of the taxable

 

 

SB3401- 12 -LRB097 19857 HLH 65138 b

1    year in which the credit is awarded under this Act.
2        (3) The election shall be made in the form and manner
3    required by the Illinois Department of Revenue and, once
4    made, shall be irrevocable.
5        (4) If a Taxpayer who meets the requirements of
6    subparagraph (A) of paragraph (1) of this subsection (f)
7    elects to claim the Credit against its withholdings as
8    provided in this subsection (f), then, on and after the
9    date of the election, the terms of the Agreement between
10    the Taxpayer and the Department may not be further amended
11    during the term of the Agreement.
12    (g) A pass-through entity that has been awarded a credit
13under this Act, its shareholders, or its partners may treat
14some or all of the credit awarded pursuant to this Act as a tax
15payment for purposes of the Illinois Income Tax Act. The term
16"tax payment" means a payment as described in Article 6 or
17Article 8 of the Illinois Income Tax Act or a composite payment
18made by a pass-through entity on behalf of any of its
19shareholders or partners to satisfy such shareholders' or
20partners' taxes imposed pursuant to subsections (a) and (b) of
21Section 201 of the Illinois Income Tax Act. In no event shall
22the amount of the award credited pursuant to this Act exceed
23the Illinois income tax liability of the pass-through entity or
24its shareholders or partners for the taxable year.
25(Source: P.A. 96-834, eff. 12-14-09; 96-836, eff. 12-16-09;
2696-905, eff. 6-4-10; 96-1000, eff. 7-2-10; 96-1534, eff.

 

 

SB3401- 13 -LRB097 19857 HLH 65138 b

13-4-11; 97-2, eff. 5-6-11; 97-636, eff. 6-1-12.)
 
2    Section 95. No acceleration or delay. Where this Act makes
3changes in a statute that is represented in this Act by text
4that is not yet or no longer in effect (for example, a Section
5represented by multiple versions), the use of that text does
6not accelerate or delay the taking effect of (i) the changes
7made by this Act or (ii) provisions derived from any other
8Public Act.
 
9    Section 99. Effective date. This Act takes effect upon
10becoming law.