HB3735 95TH GENERAL ASSEMBLY

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95TH GENERAL ASSEMBLY
State of Illinois
2007 and 2008
HB3735

Introduced 2/28/2007, by Rep. Fred Crespo

SYNOPSIS AS INTRODUCED:

35 ILCS 5/218 new

Amends the Illinois Income Tax Act. Creates an income tax credit through taxable years ending before December 31, 2013 to taxpayers who, during the taxable year, pay qualified wages to one or more net new employees. Sets the amount of the credit at the amount of Illinois income taxes withheld by the taxpayer with respect to a net new employee. Provides that the credit may not be carried forward or back and may not reduce the taxpayer's liability to less than zero. Defines "net new employees" as the number of Illinois-based employees on the taxpayer's withholding rolls on the last day of the current taxable year less the number of Illinois-based employees on the taxpayer's withholding rolls on December 31, 2006. Defines "qualified wages" as wages or salary of at least $22,000 but not more than $40,000 per year. Effective immediately.

FISCAL NOTE ACT MAY APPLY

A BILL FOR

AN ACT concerning revenue.

Be it enacted by the People of the State of Illinois, represented in the General Assembly:

Section 5. The Illinois Income Tax Act is amended by adding Section 218 as follows:

(35 ILCS 5/218 new)

Sec. 218. Credit for middle-class job creation.

(a) For taxable years ending on or after December 31, 2007 and ending on or before December 30, 2012, each taxpayer who, during the taxable year, pays qualified wages to one or more net new employees is entitled to a credit against the tax imposed by subsections (a) and (b) of Section 201 of this Act in an amount equal to the amount withheld by the taxpayer under Article 7 of this Act with respect to that net new employee during the taxable year.

(b) For partners, shareholders of Subchapter S corporations, and owners of limited liability companies, if the liability company is treated as a partnership for purposes of federal and State income taxation, there is allowed a credit under this Section to be determined in accordance with the determination of income and distributive share of income under Sections 702 and 704 and Subchapter S of the Internal Revenue Code.

(c) The credit under this Section may not be carried forward or back and may not reduce the taxpayer's liability to less than zero.

(d) For the purposes of this Section:

"Net new employees" means the number of Illinois-based employees on the taxpayer's withholding rolls on the last day of the current taxable year less the number of Illinois-based employees who earn a qualified salary on the taxpayer's withholding rolls on December 31, 2006.

"Qualified wages" means wages or salary of at least $22,000 but not more than $40,000 per year.

Section 99. Effective date. This Act takes effect upon becoming law.