Full Text of SB0004 97th General Assembly
SB0004ham003 97TH GENERAL ASSEMBLY | Rep. Barbara Flynn Currie Filed: 3/15/2011
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| 1 | | AMENDMENT TO SENATE BILL 4
| 2 | | AMENDMENT NO. ______. Amend Senate Bill 4 by replacing | 3 | | everything after the enacting clause with the following:
| 4 | | "Section 5. The Corporate Accountability for Tax | 5 | | Expenditures Act is amended by changing Section 25 as follows:
| 6 | | (20 ILCS 715/25)
| 7 | | Sec. 25. Recapture.
| 8 | | (a) All development assistance agreements
shall contain, | 9 | | at a
minimum, the following recapture provisions:
| 10 | | (1) The recipient must (i) make the level of capital | 11 | | investment in the
economic
development project specified | 12 | | in the development assistance agreement; (ii)
create or
| 13 | | retain, or both, the requisite number of jobs, paying not | 14 | | less than specified
wages for the
created and retained | 15 | | jobs, within and for the duration of the time period
| 16 | | specified in the
legislation authorizing, or the |
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| 1 | | administrative rules implementing, the
development
| 2 | | assistance programs and the development assistance | 3 | | agreement.
| 4 | | (2) If the recipient fails to create or retain the | 5 | | requisite number of
jobs within and
for the time period | 6 | | specified, in the legislation authorizing, or the
| 7 | | administrative rules
implementing, the development | 8 | | assistance programs and the development
assistance
| 9 | | agreement, the recipient shall be deemed to no longer | 10 | | qualify for the State
economic
assistance and the | 11 | | applicable recapture provisions shall take effect.
| 12 | | (3) If the recipient receives State economic | 13 | | assistance in the form of a
High
Impact Business | 14 | | designation pursuant to Section 5.5 of the Illinois | 15 | | Enterprise
Zone Act
and the business receives the benefit | 16 | | of the exemption authorized under Section
5l of the
| 17 | | Retailers' Occupation Tax Act (for the sale of building | 18 | | materials incorporated
into a High
Impact Business | 19 | | location) and the recipient fails to create or retain the
| 20 | | requisite number
of jobs, as determined by the legislation | 21 | | authorizing the development
assistance
programs
or the | 22 | | administrative rules implementing such legislation, or | 23 | | both, within the
requisite
period of time, the recipient | 24 | | shall be required to pay to the State the full
amount of | 25 | | the
State tax exemption that it received as a result of the | 26 | | High Impact Business
designation.
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| 1 | | (4) If the recipient receives a grant or loan pursuant | 2 | | to the Large
Business
Development Program, the Business | 3 | | Development Public Infrastructure Program, or
the
| 4 | | Industrial Training Program and the recipient fails to | 5 | | create or retain the
requisite number
of jobs for the | 6 | | requisite time period, as provided in the legislation
| 7 | | authorizing the
development assistance programs or the | 8 | | administrative rules implementing such
legislation, or | 9 | | both, or in the development assistance agreement, the | 10 | | recipient
shall be
required to repay to the State a pro | 11 | | rata amount of the grant; that amount
shall
reflect
the | 12 | | percentage of the deficiency between the requisite number | 13 | | of jobs to be
created or
retained by the recipient and the | 14 | | actual number of such jobs in existence as of
the date the
| 15 | | Department determines the recipient is in breach of the job | 16 | | creation or
retention
covenants contained in the | 17 | | development assistance agreement. If the recipient
of
| 18 | | development assistance under the Large Business | 19 | | Development Program, the
Business
Development Public | 20 | | Infrastructure Program, or the Industrial Training Program
| 21 | | ceases
operations at the specific project site, during the | 22 | | 5-year period commencing on
the date of
assistance, the | 23 | | recipient shall be required to repay the entire amount of | 24 | | the
grant or to
accelerate repayment of the loan back to | 25 | | the State.
| 26 | | (5) If the recipient receives a tax credit under the |
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| 1 | | Economic
Development for a
Growing Economy tax credit | 2 | | program, the development assistance agreement must
provide | 3 | | that (i) if the number of new or retained employees falls | 4 | | below the
requisite
number set forth in the development | 5 | | assistance agreement, the allowance of the
credit
shall be | 6 | | automatically suspended until the number of new and | 7 | | retained employees
equals
or exceeds the requisite number | 8 | | in the development assistance agreement; (ii)
if
the
| 9 | | recipient discontinues operations at the specific project | 10 | | site during the 5-year period after the beginning of the | 11 | | first tax year for which the Department issues a tax credit | 12 | | certificate the first
5 years of the
10-year term of the | 13 | | development assistance agreement , the recipient shall
| 14 | | forfeit all
credits taken by the recipient during such | 15 | | 5-year period; and (iii) in the
event
of a
revocation or | 16 | | suspension of the credit, the Department shall contact the
| 17 | | Director
of Revenue to initiate proceedings against the | 18 | | recipient to recover
wrongfully
exempted Illinois State | 19 | | income taxes and the recipient shall promptly repay to
the
| 20 | | Department of Revenue any wrongfully exempted Illinois | 21 | | State income taxes.
The forfeited amount of credits shall | 22 | | be deemed assessed on the date the
Department
contacts the | 23 | | Department of Revenue and the recipient shall promptly | 24 | | repay to
the
Department of Revenue any wrongfully exempted | 25 | | Illinois State income taxes.
| 26 | | (b) The Director may elect to waive enforcement of any |
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| 1 | | contractual provision
arising out of
the development | 2 | | assistance agreement required by this Act based on a finding
| 3 | | that the waiver is
necessary to avert an imminent and | 4 | | demonstrable hardship to the
recipient that may
result in such | 5 | | recipient's insolvency or discharge of workers.
If a waiver is
| 6 | | granted, the recipient must agree to a contractual | 7 | | modification, including
recapture provisions,
to the
| 8 | | development assistance
agreement.
The existence of
any waiver
| 9 | | granted pursuant to this subsection (c), the date of the | 10 | | granting of such
waiver, and a brief
summary of the reasons | 11 | | supporting the granting of such waiver shall be
disclosed
| 12 | | consistent with
the provisions of Section 25 of this Act.
| 13 | | (c) Beginning June 1, 2004, the Department shall annually | 14 | | compile a report
on the
outcomes and effectiveness of recapture | 15 | | provisions by program, including but
not limited
to: (i) the | 16 | | total number of companies that receive development assistance | 17 | | as
defined in
this Act; (ii) the total number of recipients in | 18 | | violation of development
agreements with
the Department; (iii) | 19 | | the total number of completed recapture efforts; (iv) the
total
| 20 | | number of recapture efforts initiated; and (v) the number of | 21 | | waivers granted.
This report
shall be disclosed consistent with | 22 | | the provisions of Section 20 of this Act.
| 23 | | (d) For the purposes of this Act, recapture provisions do | 24 | | not include the
Illinois
Department of Transportation Economic | 25 | | Development Program, any grants under the
Industrial Training | 26 | | Program that are not given as an incentive to a
recipient |
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| 1 | | business organization,
or any successor programs as described | 2 | | in the term "development assistance" in
Section 5
of this Act.
| 3 | | (Source: P.A. 93-552, eff. 8-20-03.)
| 4 | | Section 10. The Illinois Income Tax Act is amended by | 5 | | changing Section 201 as follows: | 6 | | (35 ILCS 5/201) (from Ch. 120, par. 2-201) | 7 | | Sec. 201. Tax Imposed. | 8 | | (a) In general. A tax measured by net income is hereby | 9 | | imposed on every
individual, corporation, trust and estate for | 10 | | each taxable year ending
after July 31, 1969 on the privilege | 11 | | of earning or receiving income in or
as a resident of this | 12 | | State. Such tax shall be in addition to all other
occupation or | 13 | | privilege taxes imposed by this State or by any municipal
| 14 | | corporation or political subdivision thereof. | 15 | | (b) Rates. The tax imposed by subsection (a) of this | 16 | | Section shall be
determined as follows, except as adjusted by | 17 | | subsection (d-1): | 18 | | (1) In the case of an individual, trust or estate, for | 19 | | taxable years
ending prior to July 1, 1989, an amount equal | 20 | | to 2 1/2% of the taxpayer's
net income for the taxable | 21 | | year. | 22 | | (2) In the case of an individual, trust or estate, for | 23 | | taxable years
beginning prior to July 1, 1989 and ending | 24 | | after June 30, 1989, an amount
equal to the sum of (i) 2 |
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| 1 | | 1/2% of the taxpayer's net income for the period
prior to | 2 | | July 1, 1989, as calculated under Section 202.3, and (ii) | 3 | | 3% of the
taxpayer's net income for the period after June | 4 | | 30, 1989, as calculated
under Section 202.3. | 5 | | (3) In the case of an individual, trust or estate, for | 6 | | taxable years
beginning after June 30, 1989, and ending | 7 | | prior to January 1, 2011, an amount equal to 3% of the | 8 | | taxpayer's net
income for the taxable year. | 9 | | (4) In the case of an individual, trust, or estate, for | 10 | | taxable years beginning prior to January 1, 2011, and | 11 | | ending after December 31, 2010, an amount equal to the sum | 12 | | of (i) 3% of the taxpayer's net income for the period prior | 13 | | to January 1, 2011, as calculated under Section 202.5, and | 14 | | (ii) 5% of the taxpayer's net income for the period after | 15 | | December 31, 2010, as calculated under Section 202.5. | 16 | | (5) In the case of an individual, trust, or estate, for | 17 | | taxable years beginning on or after January 1, 2011, and | 18 | | ending prior to January 1, 2015, an amount equal to 5% of | 19 | | the taxpayer's net income for the taxable year. | 20 | | (5.1) In the case of an individual, trust, or estate, | 21 | | for taxable years beginning prior to January 1, 2015, and | 22 | | ending after December 31, 2014, an amount equal to the sum | 23 | | of (i) 5% of the taxpayer's net income for the period prior | 24 | | to January 1, 2015, as calculated under Section 202.5, and | 25 | | (ii) 3.75% of the taxpayer's net income for the period | 26 | | after December 31, 2014, as calculated under Section 202.5. |
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| 1 | | (5.2) In the case of an individual, trust, or estate, | 2 | | for taxable years beginning on or after January 1, 2015, | 3 | | and ending prior to January 1, 2025, an amount equal to | 4 | | 3.75% of the taxpayer's net income for the taxable year. | 5 | | (5.3) In the case of an individual, trust, or estate, | 6 | | for taxable years beginning prior to January 1, 2025, and | 7 | | ending after December 31, 2024, an amount equal to the sum | 8 | | of (i) 3.75% of the taxpayer's net income for the period | 9 | | prior to January 1, 2025, as calculated under Section | 10 | | 202.5, and (ii) 3.25% of the taxpayer's net income for the | 11 | | period after December 31, 2024, as calculated under Section | 12 | | 202.5. | 13 | | (5.4) In the case of an individual, trust, or estate, | 14 | | for taxable years beginning on or after January 1, 2025, an | 15 | | amount equal to 3.25% of the taxpayer's net income for the | 16 | | taxable year. | 17 | | (6) In the case of a corporation, for taxable years
| 18 | | ending prior to July 1, 1989, an amount equal to 4% of the
| 19 | | taxpayer's net income for the taxable year. | 20 | | (7) In the case of a corporation, for taxable years | 21 | | beginning prior to
July 1, 1989 and ending after June 30, | 22 | | 1989, an amount equal to the sum of
(i) 4% of the | 23 | | taxpayer's net income for the period prior to July 1, 1989,
| 24 | | as calculated under Section 202.3, and (ii) 4.8% of the | 25 | | taxpayer's net
income for the period after June 30, 1989, | 26 | | as calculated under Section
202.3. |
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| 1 | | (8) In the case of a corporation, for taxable years | 2 | | beginning after
June 30, 1989, and ending prior to January | 3 | | 1, 2011, an amount equal to 4.8% of the taxpayer's net | 4 | | income for the
taxable year. | 5 | | (9) In the case of a corporation, for taxable years | 6 | | beginning prior to January 1, 2011, and ending after | 7 | | December 31, 2010, an amount equal to the sum of (i) 4.8% | 8 | | of the taxpayer's net income for the period prior to | 9 | | January 1, 2011, as calculated under Section 202.5, and | 10 | | (ii) 7% of the taxpayer's net income for the period after | 11 | | December 31, 2010, as calculated under Section 202.5. | 12 | | (10) In the case of a corporation, for taxable years | 13 | | beginning on or after January 1, 2011, and ending prior to | 14 | | January 1, 2015, an amount equal to 7% of the taxpayer's | 15 | | net income for the taxable year. | 16 | | (11) In the case of a corporation, for taxable years | 17 | | beginning prior to January 1, 2015, and ending after | 18 | | December 31, 2014, an amount equal to the sum of (i) 7% of | 19 | | the taxpayer's net income for the period prior to January | 20 | | 1, 2015, as calculated under Section 202.5, and (ii) 5.25% | 21 | | of the taxpayer's net income for the period after December | 22 | | 31, 2014, as calculated under Section 202.5. | 23 | | (12) In the case of a corporation, for taxable years | 24 | | beginning on or after January 1, 2015, and ending prior to | 25 | | January 1, 2025, an amount equal to 5.25% of the taxpayer's | 26 | | net income for the taxable year. |
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| 1 | | (13) In the case of a corporation, for taxable years | 2 | | beginning prior to January 1, 2025, and ending after | 3 | | December 31, 2024, an amount equal to the sum of (i) 5.25% | 4 | | of the taxpayer's net income for the period prior to | 5 | | January 1, 2025, as calculated under Section 202.5, and | 6 | | (ii) 4.8% of the taxpayer's net income for the period after | 7 | | December 31, 2024, as calculated under Section 202.5. | 8 | | (14) In the case of a corporation, for taxable years | 9 | | beginning on or after January 1, 2025, an amount equal to | 10 | | 4.8% of the taxpayer's net income for the taxable year. | 11 | | The rates under this subsection (b) are subject to the | 12 | | provisions of Section 201.5. | 13 | | (c) Personal Property Tax Replacement Income Tax.
| 14 | | Beginning on July 1, 1979 and thereafter, in addition to such | 15 | | income
tax, there is also hereby imposed the Personal Property | 16 | | Tax Replacement
Income Tax measured by net income on every | 17 | | corporation (including Subchapter
S corporations), partnership | 18 | | and trust, for each taxable year ending after
June 30, 1979. | 19 | | Such taxes are imposed on the privilege of earning or
receiving | 20 | | income in or as a resident of this State. The Personal Property
| 21 | | Tax Replacement Income Tax shall be in addition to the income | 22 | | tax imposed
by subsections (a) and (b) of this Section and in | 23 | | addition to all other
occupation or privilege taxes imposed by | 24 | | this State or by any municipal
corporation or political | 25 | | subdivision thereof. | 26 | | (d) Additional Personal Property Tax Replacement Income |
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| 1 | | Tax Rates.
The personal property tax replacement income tax | 2 | | imposed by this subsection
and subsection (c) of this Section | 3 | | in the case of a corporation, other
than a Subchapter S | 4 | | corporation and except as adjusted by subsection (d-1),
shall | 5 | | be an additional amount equal to
2.85% of such taxpayer's net | 6 | | income for the taxable year, except that
beginning on January | 7 | | 1, 1981, and thereafter, the rate of 2.85% specified
in this | 8 | | subsection shall be reduced to 2.5%, and in the case of a
| 9 | | partnership, trust or a Subchapter S corporation shall be an | 10 | | additional
amount equal to 1.5% of such taxpayer's net income | 11 | | for the taxable year. | 12 | | (d-1) Rate reduction for certain foreign insurers. In the | 13 | | case of a
foreign insurer, as defined by Section 35A-5 of the | 14 | | Illinois Insurance Code,
whose state or country of domicile | 15 | | imposes on insurers domiciled in Illinois
a retaliatory tax | 16 | | (excluding any insurer
whose premiums from reinsurance assumed | 17 | | are 50% or more of its total insurance
premiums as determined | 18 | | under paragraph (2) of subsection (b) of Section 304,
except | 19 | | that for purposes of this determination premiums from | 20 | | reinsurance do
not include premiums from inter-affiliate | 21 | | reinsurance arrangements),
beginning with taxable years ending | 22 | | on or after December 31, 1999,
the sum of
the rates of tax | 23 | | imposed by subsections (b) and (d) shall be reduced (but not
| 24 | | increased) to the rate at which the total amount of tax imposed | 25 | | under this Act,
net of all credits allowed under this Act, | 26 | | shall equal (i) the total amount of
tax that would be imposed |
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| 1 | | on the foreign insurer's net income allocable to
Illinois for | 2 | | the taxable year by such foreign insurer's state or country of
| 3 | | domicile if that net income were subject to all income taxes | 4 | | and taxes
measured by net income imposed by such foreign | 5 | | insurer's state or country of
domicile, net of all credits | 6 | | allowed or (ii) a rate of zero if no such tax is
imposed on such | 7 | | income by the foreign insurer's state of domicile.
For the | 8 | | purposes of this subsection (d-1), an inter-affiliate includes | 9 | | a
mutual insurer under common management. | 10 | | (1) For the purposes of subsection (d-1), in no event | 11 | | shall the sum of the
rates of tax imposed by subsections | 12 | | (b) and (d) be reduced below the rate at
which the sum of: | 13 | | (A) the total amount of tax imposed on such foreign | 14 | | insurer under
this Act for a taxable year, net of all | 15 | | credits allowed under this Act, plus | 16 | | (B) the privilege tax imposed by Section 409 of the | 17 | | Illinois Insurance
Code, the fire insurance company | 18 | | tax imposed by Section 12 of the Fire
Investigation | 19 | | Act, and the fire department taxes imposed under | 20 | | Section 11-10-1
of the Illinois Municipal Code, | 21 | | equals 1.25% for taxable years ending prior to December 31, | 22 | | 2003, or
1.75% for taxable years ending on or after | 23 | | December 31, 2003, of the net
taxable premiums written for | 24 | | the taxable year,
as described by subsection (1) of Section | 25 | | 409 of the Illinois Insurance Code.
This paragraph will in | 26 | | no event increase the rates imposed under subsections
(b) |
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| 1 | | and (d). | 2 | | (2) Any reduction in the rates of tax imposed by this | 3 | | subsection shall be
applied first against the rates imposed | 4 | | by subsection (b) and only after the
tax imposed by | 5 | | subsection (a) net of all credits allowed under this | 6 | | Section
other than the credit allowed under subsection (i) | 7 | | has been reduced to zero,
against the rates imposed by | 8 | | subsection (d). | 9 | | This subsection (d-1) is exempt from the provisions of | 10 | | Section 250. | 11 | | (e) Investment credit. A taxpayer shall be allowed a credit
| 12 | | against the Personal Property Tax Replacement Income Tax for
| 13 | | investment in qualified property. | 14 | | (1) A taxpayer shall be allowed a credit equal to .5% | 15 | | of
the basis of qualified property placed in service during | 16 | | the taxable year,
provided such property is placed in | 17 | | service on or after
July 1, 1984. There shall be allowed an | 18 | | additional credit equal
to .5% of the basis of qualified | 19 | | property placed in service during the
taxable year, | 20 | | provided such property is placed in service on or
after | 21 | | July 1, 1986, and the taxpayer's base employment
within | 22 | | Illinois has increased by 1% or more over the preceding | 23 | | year as
determined by the taxpayer's employment records | 24 | | filed with the
Illinois Department of Employment Security. | 25 | | Taxpayers who are new to
Illinois shall be deemed to have | 26 | | met the 1% growth in base employment for
the first year in |
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| 1 | | which they file employment records with the Illinois
| 2 | | Department of Employment Security. The provisions added to | 3 | | this Section by
Public Act 85-1200 (and restored by Public | 4 | | Act 87-895) shall be
construed as declaratory of existing | 5 | | law and not as a new enactment. If,
in any year, the | 6 | | increase in base employment within Illinois over the
| 7 | | preceding year is less than 1%, the additional credit shall | 8 | | be limited to that
percentage times a fraction, the | 9 | | numerator of which is .5% and the denominator
of which is | 10 | | 1%, but shall not exceed .5%. The investment credit shall | 11 | | not be
allowed to the extent that it would reduce a | 12 | | taxpayer's liability in any tax
year below zero, nor may | 13 | | any credit for qualified property be allowed for any
year | 14 | | other than the year in which the property was placed in | 15 | | service in
Illinois. For tax years ending on or after | 16 | | December 31, 1987, and on or
before December 31, 1988, the | 17 | | credit shall be allowed for the tax year in
which the | 18 | | property is placed in service, or, if the amount of the | 19 | | credit
exceeds the tax liability for that year, whether it | 20 | | exceeds the original
liability or the liability as later | 21 | | amended, such excess may be carried
forward and applied to | 22 | | the tax liability of the 5 taxable years following
the | 23 | | excess credit years if the taxpayer (i) makes investments | 24 | | which cause
the creation of a minimum of 2,000 full-time | 25 | | equivalent jobs in Illinois,
(ii) is located in an | 26 | | enterprise zone established pursuant to the Illinois
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| 1 | | Enterprise Zone Act and (iii) is certified by the | 2 | | Department of Commerce
and Community Affairs (now | 3 | | Department of Commerce and Economic Opportunity) as | 4 | | complying with the requirements specified in
clause (i) and | 5 | | (ii) by July 1, 1986. The Department of Commerce and
| 6 | | Community Affairs (now Department of Commerce and Economic | 7 | | Opportunity) shall notify the Department of Revenue of all | 8 | | such
certifications immediately. For tax years ending | 9 | | after December 31, 1988,
the credit shall be allowed for | 10 | | the tax year in which the property is
placed in service, | 11 | | or, if the amount of the credit exceeds the tax
liability | 12 | | for that year, whether it exceeds the original liability or | 13 | | the
liability as later amended, such excess may be carried | 14 | | forward and applied
to the tax liability of the 5 taxable | 15 | | years following the excess credit
years. The credit shall | 16 | | be applied to the earliest year for which there is
a | 17 | | liability. If there is credit from more than one tax year | 18 | | that is
available to offset a liability, earlier credit | 19 | | shall be applied first. | 20 | | (2) The term "qualified property" means property | 21 | | which: | 22 | | (A) is tangible, whether new or used, including | 23 | | buildings and structural
components of buildings and | 24 | | signs that are real property, but not including
land or | 25 | | improvements to real property that are not a structural | 26 | | component of a
building such as landscaping, sewer |
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| 1 | | lines, local access roads, fencing, parking
lots, and | 2 | | other appurtenances; | 3 | | (B) is depreciable pursuant to Section 167 of the | 4 | | Internal Revenue Code,
except that "3-year property" | 5 | | as defined in Section 168(c)(2)(A) of that
Code is not | 6 | | eligible for the credit provided by this subsection | 7 | | (e); | 8 | | (C) is acquired by purchase as defined in Section | 9 | | 179(d) of
the Internal Revenue Code; | 10 | | (D) is used in Illinois by a taxpayer who is | 11 | | primarily engaged in
manufacturing, or in mining coal | 12 | | or fluorite, or in retailing, or was placed in service | 13 | | on or after July 1, 2006 in a River Edge Redevelopment | 14 | | Zone established pursuant to the River Edge | 15 | | Redevelopment Zone Act; and | 16 | | (E) has not previously been used in Illinois in | 17 | | such a manner and by
such a person as would qualify for | 18 | | the credit provided by this subsection
(e) or | 19 | | subsection (f). | 20 | | (3) For purposes of this subsection (e), | 21 | | "manufacturing" means
the material staging and production | 22 | | of tangible personal property by
procedures commonly | 23 | | regarded as manufacturing, processing, fabrication, or
| 24 | | assembling which changes some existing material into new | 25 | | shapes, new
qualities, or new combinations. For purposes of | 26 | | this subsection
(e) the term "mining" shall have the same |
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| 1 | | meaning as the term "mining" in
Section 613(c) of the | 2 | | Internal Revenue Code. For purposes of this subsection
(e), | 3 | | the term "retailing" means the sale of tangible personal | 4 | | property for use or consumption and not for resale, or
| 5 | | services rendered in conjunction with the sale of tangible | 6 | | personal property for use or consumption and not for | 7 | | resale. For purposes of this subsection (e), "tangible | 8 | | personal property" has the same meaning as when that term | 9 | | is used in the Retailers' Occupation Tax Act, and, for | 10 | | taxable years ending after December 31, 2008, does not | 11 | | include the generation, transmission, or distribution of | 12 | | electricity. | 13 | | (4) The basis of qualified property shall be the basis
| 14 | | used to compute the depreciation deduction for federal | 15 | | income tax purposes. | 16 | | (5) If the basis of the property for federal income tax | 17 | | depreciation
purposes is increased after it has been placed | 18 | | in service in Illinois by
the taxpayer, the amount of such | 19 | | increase shall be deemed property placed
in service on the | 20 | | date of such increase in basis. | 21 | | (6) The term "placed in service" shall have the same
| 22 | | meaning as under Section 46 of the Internal Revenue Code. | 23 | | (7) If during any taxable year, any property ceases to
| 24 | | be qualified property in the hands of the taxpayer within | 25 | | 48 months after
being placed in service, or the situs of | 26 | | any qualified property is
moved outside Illinois within 48 |
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| 1 | | months after being placed in service, the
Personal Property | 2 | | Tax Replacement Income Tax for such taxable year shall be
| 3 | | increased. Such increase shall be determined by (i) | 4 | | recomputing the
investment credit which would have been | 5 | | allowed for the year in which
credit for such property was | 6 | | originally allowed by eliminating such
property from such | 7 | | computation and, (ii) subtracting such recomputed credit
| 8 | | from the amount of credit previously allowed. For the | 9 | | purposes of this
paragraph (7), a reduction of the basis of | 10 | | qualified property resulting
from a redetermination of the | 11 | | purchase price shall be deemed a disposition
of qualified | 12 | | property to the extent of such reduction. | 13 | | (8) Unless the investment credit is extended by law, | 14 | | the
basis of qualified property shall not include costs | 15 | | incurred after
December 31, 2013, except for costs incurred | 16 | | pursuant to a binding
contract entered into on or before | 17 | | December 31, 2013. | 18 | | (9) Each taxable year ending before December 31, 2000, | 19 | | a partnership may
elect to pass through to its
partners the | 20 | | credits to which the partnership is entitled under this | 21 | | subsection
(e) for the taxable year. A partner may use the | 22 | | credit allocated to him or her
under this paragraph only | 23 | | against the tax imposed in subsections (c) and (d) of
this | 24 | | Section. If the partnership makes that election, those | 25 | | credits shall be
allocated among the partners in the | 26 | | partnership in accordance with the rules
set forth in |
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| 1 | | Section 704(b) of the Internal Revenue Code, and the rules
| 2 | | promulgated under that Section, and the allocated amount of | 3 | | the credits shall
be allowed to the partners for that | 4 | | taxable year. The partnership shall make
this election on | 5 | | its Personal Property Tax Replacement Income Tax return for
| 6 | | that taxable year. The election to pass through the credits | 7 | | shall be
irrevocable. | 8 | | For taxable years ending on or after December 31, 2000, | 9 | | a
partner that qualifies its
partnership for a subtraction | 10 | | under subparagraph (I) of paragraph (2) of
subsection (d) | 11 | | of Section 203 or a shareholder that qualifies a Subchapter | 12 | | S
corporation for a subtraction under subparagraph (S) of | 13 | | paragraph (2) of
subsection (b) of Section 203 shall be | 14 | | allowed a credit under this subsection
(e) equal to its | 15 | | share of the credit earned under this subsection (e) during
| 16 | | the taxable year by the partnership or Subchapter S | 17 | | corporation, determined in
accordance with the | 18 | | determination of income and distributive share of
income | 19 | | under Sections 702 and 704 and Subchapter S of the Internal | 20 | | Revenue
Code. This paragraph is exempt from the provisions | 21 | | of Section 250. | 22 | | (f) Investment credit; Enterprise Zone; River Edge | 23 | | Redevelopment Zone. | 24 | | (1) A taxpayer shall be allowed a credit against the | 25 | | tax imposed
by subsections (a) and (b) of this Section for | 26 | | investment in qualified
property which is placed in service |
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| 1 | | in an Enterprise Zone created
pursuant to the Illinois | 2 | | Enterprise Zone Act or, for property placed in service on | 3 | | or after July 1, 2006, a River Edge Redevelopment Zone | 4 | | established pursuant to the River Edge Redevelopment Zone | 5 | | Act. For partners, shareholders
of Subchapter S | 6 | | corporations, and owners of limited liability companies,
| 7 | | if the liability company is treated as a partnership for | 8 | | purposes of
federal and State income taxation, there shall | 9 | | be allowed a credit under
this subsection (f) to be | 10 | | determined in accordance with the determination
of income | 11 | | and distributive share of income under Sections 702 and 704 | 12 | | and
Subchapter S of the Internal Revenue Code. The credit | 13 | | shall be .5% of the
basis for such property. The credit | 14 | | shall be available only in the taxable
year in which the | 15 | | property is placed in service in the Enterprise Zone or | 16 | | River Edge Redevelopment Zone and
shall not be allowed to | 17 | | the extent that it would reduce a taxpayer's
liability for | 18 | | the tax imposed by subsections (a) and (b) of this Section | 19 | | to
below zero. For tax years ending on or after December | 20 | | 31, 1985, the credit
shall be allowed for the tax year in | 21 | | which the property is placed in
service, or, if the amount | 22 | | of the credit exceeds the tax liability for that
year, | 23 | | whether it exceeds the original liability or the liability | 24 | | as later
amended, such excess may be carried forward and | 25 | | applied to the tax
liability of the 5 taxable years | 26 | | following the excess credit year.
The credit shall be |
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| 1 | | applied to the earliest year for which there is a
| 2 | | liability. If there is credit from more than one tax year | 3 | | that is available
to offset a liability, the credit | 4 | | accruing first in time shall be applied
first. | 5 | | (2) The term qualified property means property which: | 6 | | (A) is tangible, whether new or used, including | 7 | | buildings and
structural components of buildings; | 8 | | (B) is depreciable pursuant to Section 167 of the | 9 | | Internal Revenue
Code, except that "3-year property" | 10 | | as defined in Section 168(c)(2)(A) of
that Code is not | 11 | | eligible for the credit provided by this subsection | 12 | | (f); | 13 | | (C) is acquired by purchase as defined in Section | 14 | | 179(d) of
the Internal Revenue Code; | 15 | | (D) is used in the Enterprise Zone or River Edge | 16 | | Redevelopment Zone by the taxpayer; and | 17 | | (E) has not been previously used in Illinois in | 18 | | such a manner and by
such a person as would qualify for | 19 | | the credit provided by this subsection
(f) or | 20 | | subsection (e). | 21 | | (3) The basis of qualified property shall be the basis | 22 | | used to compute
the depreciation deduction for federal | 23 | | income tax purposes. | 24 | | (4) If the basis of the property for federal income tax | 25 | | depreciation
purposes is increased after it has been placed | 26 | | in service in the Enterprise
Zone or River Edge |
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| 1 | | Redevelopment Zone by the taxpayer, the amount of such | 2 | | increase shall be deemed property
placed in service on the | 3 | | date of such increase in basis. | 4 | | (5) The term "placed in service" shall have the same | 5 | | meaning as under
Section 46 of the Internal Revenue Code. | 6 | | (6) If during any taxable year, any property ceases to | 7 | | be qualified
property in the hands of the taxpayer within | 8 | | 48 months after being placed
in service, or the situs of | 9 | | any qualified property is moved outside the
Enterprise Zone | 10 | | or River Edge Redevelopment Zone within 48 months after | 11 | | being placed in service, the tax
imposed under subsections | 12 | | (a) and (b) of this Section 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 (6), 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 | | (7) There shall be allowed an additional credit equal | 24 | | to 0.5% of the basis of qualified property placed in | 25 | | service during the taxable year in a River Edge | 26 | | Redevelopment Zone, provided such property is placed in |
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| 1 | | service on or after July 1, 2006, and the taxpayer's base | 2 | | employment within Illinois has increased by 1% or more over | 3 | | the preceding year as determined by the taxpayer's | 4 | | employment records filed with the Illinois Department of | 5 | | Employment Security. Taxpayers who are new to Illinois | 6 | | shall be deemed to have met the 1% growth in base | 7 | | employment for the first year in which they file employment | 8 | | records with the Illinois Department of Employment | 9 | | Security. If, in any year, the increase in base employment | 10 | | within Illinois over the preceding year is less than 1%, | 11 | | the additional credit shall be limited to that percentage | 12 | | times a fraction, the numerator of which is 0.5% and the | 13 | | denominator of which is 1%, but shall not exceed 0.5%.
| 14 | | (g) Jobs Tax Credit; Enterprise Zone, River Edge | 15 | | Redevelopment Zone, and Foreign Trade Zone or Sub-Zone. | 16 | | (1) A taxpayer conducting a trade or business in an | 17 | | enterprise zone
or a High Impact Business designated by the | 18 | | Department of Commerce and
Economic Opportunity or for | 19 | | taxable years ending on or after December 31, 2006, in a | 20 | | River Edge Redevelopment Zone conducting a trade or | 21 | | business in a federally designated
Foreign Trade Zone or | 22 | | Sub-Zone shall be allowed a credit against the tax
imposed | 23 | | by subsections (a) and (b) of this Section in the amount of | 24 | | $500
per eligible employee hired to work in the zone during | 25 | | the taxable year. | 26 | | (2) To qualify for the credit: |
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| 1 | | (A) the taxpayer must hire 5 or more eligible | 2 | | employees to work in an
enterprise zone, River Edge | 3 | | Redevelopment Zone, or federally designated Foreign | 4 | | Trade Zone or Sub-Zone
during the taxable year; | 5 | | (B) the taxpayer's total employment within the | 6 | | enterprise zone, River Edge Redevelopment Zone, or
| 7 | | federally designated Foreign Trade Zone or Sub-Zone | 8 | | must
increase by 5 or more full-time employees beyond | 9 | | the total employed in that
zone at the end of the | 10 | | previous tax year for which a jobs tax
credit under | 11 | | this Section was taken, or beyond the total employed by | 12 | | the
taxpayer as of December 31, 1985, whichever is | 13 | | later; and | 14 | | (C) the eligible employees must be employed 180 | 15 | | consecutive days in
order to be deemed hired for | 16 | | purposes of this subsection. | 17 | | (3) An "eligible employee" means an employee who is: | 18 | | (A) Certified by the Department of Commerce and | 19 | | Economic Opportunity
as "eligible for services" | 20 | | pursuant to regulations promulgated in
accordance with | 21 | | Title II of the Job Training Partnership Act, Training
| 22 | | Services for the Disadvantaged or Title III of the Job | 23 | | Training Partnership
Act, Employment and Training | 24 | | Assistance for Dislocated Workers Program. | 25 | | (B) Hired after the enterprise zone, River Edge | 26 | | Redevelopment Zone, or federally designated Foreign
|
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| 1 | | Trade Zone or Sub-Zone was designated or the trade or
| 2 | | business was located in that zone, whichever is later. | 3 | | (C) Employed in the enterprise zone, River Edge | 4 | | Redevelopment Zone, or Foreign Trade Zone or
Sub-Zone. | 5 | | An employee is employed in an
enterprise zone or | 6 | | federally designated Foreign Trade Zone or Sub-Zone
if | 7 | | his services are rendered there or it is the base of
| 8 | | operations for the services performed. | 9 | | (D) A full-time employee working 30 or more hours | 10 | | per week. | 11 | | (4) For tax years ending on or after December 31, 1985 | 12 | | and prior to
December 31, 1988, the credit shall be allowed | 13 | | for the tax year in which
the eligible employees are hired. | 14 | | For tax years ending on or after
December 31, 1988, the | 15 | | credit shall be allowed for the tax year immediately
| 16 | | following the tax year in which the eligible employees are | 17 | | hired. If the
amount of the credit exceeds the tax | 18 | | liability for that year, whether it
exceeds the original | 19 | | liability or the liability as later amended, such
excess | 20 | | may be carried forward and applied to the tax liability of | 21 | | the 5
taxable years following the excess credit year. The | 22 | | credit shall be
applied to the earliest year for which | 23 | | there is a liability. If there is
credit from more than one | 24 | | tax year that is available to offset a liability,
earlier | 25 | | credit shall be applied first. | 26 | | (5) The Department of Revenue shall promulgate such |
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| 1 | | rules and regulations
as may be deemed necessary to carry | 2 | | out the purposes of this subsection (g). | 3 | | (6) The credit shall be available for eligible | 4 | | employees hired on or
after January 1, 1986. | 5 | | (h) Investment credit; High Impact Business. | 6 | | (1) Subject to subsections (b) and (b-5) of Section
5.5 | 7 | | of the Illinois Enterprise Zone Act, a taxpayer shall be | 8 | | allowed a credit
against the tax imposed by subsections (a) | 9 | | and (b) of this Section for
investment in qualified
| 10 | | property which is placed in service by a Department of | 11 | | Commerce and Economic Opportunity
designated High Impact | 12 | | Business. The credit shall be .5% of the basis
for such | 13 | | property. The credit shall not be available (i) until the | 14 | | minimum
investments in qualified property set forth in | 15 | | subdivision (a)(3)(A) of
Section 5.5 of the Illinois
| 16 | | Enterprise Zone Act have been satisfied
or (ii) until the | 17 | | time authorized in subsection (b-5) of the Illinois
| 18 | | Enterprise Zone Act for entities designated as High Impact | 19 | | Businesses under
subdivisions (a)(3)(B), (a)(3)(C), and | 20 | | (a)(3)(D) of Section 5.5 of the Illinois
Enterprise Zone | 21 | | Act, and shall not be allowed to the extent that it would
| 22 | | reduce a taxpayer's liability for the tax imposed by | 23 | | subsections (a) and (b) of
this Section to below zero. The | 24 | | credit applicable to such investments shall be
taken in the | 25 | | taxable year in which such investments have been completed. | 26 | | The
credit for additional investments beyond the minimum |
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| 1 | | investment by a designated
high impact business authorized | 2 | | under subdivision (a)(3)(A) of Section 5.5 of
the Illinois | 3 | | Enterprise Zone Act shall be available only in the taxable | 4 | | year in
which the property is placed in service and shall | 5 | | not be allowed to the extent
that it would reduce a | 6 | | taxpayer's liability for the tax imposed by subsections
(a) | 7 | | and (b) of this Section to below zero.
For tax years ending | 8 | | on or after December 31, 1987, the credit shall be
allowed | 9 | | for the tax year in which the property is placed in | 10 | | service, or, if
the amount of the credit exceeds the tax | 11 | | liability for that year, whether
it exceeds the original | 12 | | liability or the liability as later amended, such
excess | 13 | | may be carried forward and applied to the tax liability of | 14 | | the 5
taxable years following the excess credit year. The | 15 | | credit shall be
applied to the earliest year for which | 16 | | there is a liability. If there is
credit from more than one | 17 | | tax year that is available to offset a liability,
the | 18 | | credit accruing first in time shall be applied first. | 19 | | Changes made in this subdivision (h)(1) by Public Act | 20 | | 88-670
restore changes made by Public Act 85-1182 and | 21 | | reflect existing law. | 22 | | (2) The term qualified property means property which: | 23 | | (A) is tangible, whether new or used, including | 24 | | buildings and
structural components of buildings; | 25 | | (B) is depreciable pursuant to Section 167 of the | 26 | | Internal Revenue
Code, except that "3-year property" |
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| 1 | | as defined in Section 168(c)(2)(A) of
that Code is not | 2 | | eligible for the credit provided by this subsection | 3 | | (h); | 4 | | (C) is acquired by purchase as defined in Section | 5 | | 179(d) of the
Internal Revenue Code; and | 6 | | (D) is not eligible for the Enterprise Zone | 7 | | Investment Credit provided
by subsection (f) of this | 8 | | Section. | 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 a federally
designated Foreign Trade Zone or | 15 | | Sub-Zone located in Illinois by the taxpayer,
the amount of | 16 | | such increase shall be deemed property placed in service on
| 17 | | the 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 ending on or before | 21 | | December 31, 1996,
any property ceases to be qualified
| 22 | | property in the hands of the taxpayer within 48 months | 23 | | after being placed
in service, or the situs of any | 24 | | qualified property is moved outside
Illinois within 48 | 25 | | months after being placed in service, the tax imposed
under | 26 | | subsections (a) and (b) of this Section for such taxable |
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| 1 | | year shall
be increased. Such increase shall be determined | 2 | | by (i) recomputing the
investment credit which would have | 3 | | been allowed for the year in which
credit for such property | 4 | | was originally allowed by eliminating such
property from | 5 | | such computation, and (ii) subtracting such recomputed | 6 | | credit
from the amount of credit previously allowed. For | 7 | | the purposes of this
paragraph (6), a reduction of the | 8 | | basis of qualified property resulting
from a | 9 | | redetermination of the purchase price shall be deemed a | 10 | | disposition
of qualified property to the extent of such | 11 | | reduction. | 12 | | (7) Beginning with tax years ending after December 31, | 13 | | 1996, if a
taxpayer qualifies for the credit under this | 14 | | subsection (h) and thereby is
granted a tax abatement and | 15 | | the taxpayer relocates its entire facility in
violation of | 16 | | the explicit terms and length of the contract under Section
| 17 | | 18-183 of the Property Tax Code, the tax imposed under | 18 | | subsections
(a) and (b) of this Section shall be increased | 19 | | for the taxable year
in which the taxpayer relocated its | 20 | | facility by an amount equal to the
amount of credit | 21 | | received by the taxpayer under this subsection (h). | 22 | | (i) Credit for Personal Property Tax Replacement Income | 23 | | Tax.
For tax years ending prior to December 31, 2003, a credit | 24 | | shall be allowed
against the tax imposed by
subsections (a) and | 25 | | (b) of this Section for the tax imposed by subsections (c)
and | 26 | | (d) of this Section. This credit shall be computed by |
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| 1 | | multiplying the tax
imposed by subsections (c) and (d) of this | 2 | | Section by a fraction, the numerator
of which is base income | 3 | | allocable to Illinois and the denominator of which is
Illinois | 4 | | base income, and further multiplying the product by the tax | 5 | | rate
imposed by subsections (a) and (b) of this Section. | 6 | | Any credit earned on or after December 31, 1986 under
this | 7 | | subsection which is unused in the year
the credit is computed | 8 | | because it exceeds the tax liability imposed by
subsections (a) | 9 | | and (b) for that year (whether it exceeds the original
| 10 | | liability or the liability as later amended) may be carried | 11 | | forward and
applied to the tax liability imposed by subsections | 12 | | (a) and (b) of the 5
taxable years following the excess credit | 13 | | year, provided that no credit may
be carried forward to any | 14 | | year ending on or
after December 31, 2003. This credit shall be
| 15 | | applied first to the earliest year for which there is a | 16 | | liability. If
there is a credit under this subsection from more | 17 | | than one tax year that is
available to offset a liability the | 18 | | earliest credit arising under this
subsection shall be applied | 19 | | first. | 20 | | If, during any taxable year ending on or after December 31, | 21 | | 1986, the
tax imposed by subsections (c) and (d) of this | 22 | | Section for which a taxpayer
has claimed a credit under this | 23 | | subsection (i) is reduced, the amount of
credit for such tax | 24 | | shall also be reduced. Such reduction shall be
determined by | 25 | | recomputing the credit to take into account the reduced tax
| 26 | | imposed by subsections (c) and (d). If any portion of the
|
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| 1 | | reduced amount of credit has been carried to a different | 2 | | taxable year, an
amended return shall be filed for such taxable | 3 | | year to reduce the amount of
credit claimed. | 4 | | (j) Training expense credit. Beginning with tax years | 5 | | ending on or
after December 31, 1986 and prior to December 31, | 6 | | 2003, a taxpayer shall be
allowed a credit against the
tax | 7 | | imposed by subsections (a) and (b) under this Section
for all | 8 | | amounts paid or accrued, on behalf of all persons
employed by | 9 | | the taxpayer in Illinois or Illinois residents employed
outside | 10 | | of Illinois by a taxpayer, for educational or vocational | 11 | | training in
semi-technical or technical fields or semi-skilled | 12 | | or skilled fields, which
were deducted from gross income in the | 13 | | computation of taxable income. The
credit against the tax | 14 | | imposed by subsections (a) and (b) shall be 1.6% of
such | 15 | | training expenses. For partners, shareholders of subchapter S
| 16 | | corporations, and owners of limited liability companies, if the | 17 | | liability
company is treated as a partnership for purposes of | 18 | | federal and State income
taxation, there shall be allowed a | 19 | | credit under this subsection (j) to be
determined in accordance | 20 | | with the determination of income and distributive
share of | 21 | | income under Sections 702 and 704 and subchapter S of the | 22 | | Internal
Revenue Code. | 23 | | Any credit allowed under this subsection which is unused in | 24 | | the year
the credit is earned may be carried forward to each of | 25 | | the 5 taxable
years following the year for which the credit is | 26 | | first computed until it is
used. This credit shall be applied |
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| 1 | | first to the earliest year for which
there is a liability. If | 2 | | there is a credit under this subsection from more
than one tax | 3 | | year that is available to offset a liability the earliest
| 4 | | credit arising under this subsection shall be applied first. No | 5 | | carryforward
credit may be claimed in any tax year ending on or | 6 | | after
December 31, 2003. | 7 | | (k) Research and development credit. | 8 | | For tax years ending after July 1, 1990 and prior to
| 9 | | December 31, 2003, and beginning again for tax years ending on | 10 | | or after December 31, 2004, and ending prior to January 1, | 11 | | 2011, a taxpayer shall be
allowed a credit against the tax | 12 | | imposed by subsections (a) and (b) of this
Section for | 13 | | increasing research activities in this State. The credit
| 14 | | allowed against the tax imposed by subsections (a) and (b) | 15 | | shall be equal
to 6 1/2% of the qualifying expenditures for | 16 | | increasing research activities
in this State. For partners, | 17 | | shareholders of subchapter S corporations, and
owners of | 18 | | limited liability companies, if the liability company is | 19 | | treated as a
partnership for purposes of federal and State | 20 | | income taxation, there shall be
allowed a credit under this | 21 | | subsection to be determined in accordance with the
| 22 | | determination of income and distributive share of income under | 23 | | Sections 702 and
704 and subchapter S of the Internal Revenue | 24 | | Code. | 25 | | For purposes of this subsection, "qualifying expenditures" | 26 | | means the
qualifying expenditures as defined for the federal |
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| 1 | | credit for increasing
research activities which would be | 2 | | allowable under Section 41 of the
Internal Revenue Code and | 3 | | which are conducted in this State, "qualifying
expenditures for | 4 | | increasing research activities in this State" means the
excess | 5 | | of qualifying expenditures for the taxable year in which | 6 | | incurred
over qualifying expenditures for the base period, | 7 | | "qualifying expenditures
for the base period" means the average | 8 | | of the qualifying expenditures for
each year in the base | 9 | | period, and "base period" means the 3 taxable years
immediately | 10 | | preceding the taxable year for which the determination is
being | 11 | | made. | 12 | | Any credit in excess of the tax liability for the taxable | 13 | | year
may be carried forward. A taxpayer may elect to have the
| 14 | | unused credit shown on its final completed return carried over | 15 | | as a credit
against the tax liability for the following 5 | 16 | | taxable years or until it has
been fully used, whichever occurs | 17 | | first; provided that no credit earned in a tax year ending | 18 | | prior to December 31, 2003 may be carried forward to any year | 19 | | ending on or after December 31, 2003, and no credit may be | 20 | | carried forward to any taxable year ending on or after January | 21 | | 1, 2011. | 22 | | If an unused credit is carried forward to a given year from | 23 | | 2 or more
earlier years, that credit arising in the earliest | 24 | | year will be applied
first against the tax liability for the | 25 | | given year. If a tax liability for
the given year still | 26 | | remains, the credit from the next earliest year will
then be |
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| 1 | | applied, and so on, until all credits have been used or no tax
| 2 | | liability for the given year remains. Any remaining unused | 3 | | credit or
credits then will be carried forward to the next | 4 | | following year in which a
tax liability is incurred, except | 5 | | that no credit can be carried forward to
a year which is more | 6 | | than 5 years after the year in which the expense for
which the | 7 | | credit is given was incurred. | 8 | | No inference shall be drawn from this amendatory Act of the | 9 | | 91st General
Assembly in construing this Section for taxable | 10 | | years beginning before January
1, 1999. | 11 | | (l) Environmental Remediation Tax Credit. | 12 | | (i) For tax years ending after December 31, 1997 and on | 13 | | or before
December 31, 2001, a taxpayer shall be allowed a | 14 | | credit against the tax
imposed by subsections (a) and (b) | 15 | | of this Section for certain amounts paid
for unreimbursed | 16 | | eligible remediation costs, as specified in this | 17 | | subsection.
For purposes of this Section, "unreimbursed | 18 | | eligible remediation costs" means
costs approved by the | 19 | | Illinois Environmental Protection Agency ("Agency") under
| 20 | | Section 58.14 of the Environmental Protection Act that were | 21 | | paid in performing
environmental remediation at a site for | 22 | | which a No Further Remediation Letter
was issued by the | 23 | | Agency and recorded under Section 58.10 of the | 24 | | Environmental
Protection Act. The credit must be claimed | 25 | | for the taxable year in which
Agency approval of the | 26 | | eligible remediation costs is granted. The credit is
not |
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| 1 | | available to any taxpayer if the taxpayer or any related | 2 | | party caused or
contributed to, in any material respect, a | 3 | | release of regulated substances on,
in, or under the site | 4 | | that was identified and addressed by the remedial
action | 5 | | pursuant to the Site Remediation Program of the | 6 | | Environmental Protection
Act. After the Pollution Control | 7 | | Board rules are adopted pursuant to the
Illinois | 8 | | Administrative Procedure Act for the administration and | 9 | | enforcement of
Section 58.9 of the Environmental | 10 | | Protection Act, determinations as to credit
availability | 11 | | for purposes of this Section shall be made consistent with | 12 | | those
rules. For purposes of this Section, "taxpayer" | 13 | | includes a person whose tax
attributes the taxpayer has | 14 | | succeeded to under Section 381 of the Internal
Revenue Code | 15 | | and "related party" includes the persons disallowed a | 16 | | deduction
for losses by paragraphs (b), (c), and (f)(1) of | 17 | | Section 267 of the Internal
Revenue Code by virtue of being | 18 | | a related taxpayer, as well as any of its
partners. The | 19 | | credit allowed against the tax imposed by subsections (a) | 20 | | and
(b) shall be equal to 25% of the unreimbursed eligible | 21 | | remediation costs in
excess of $100,000 per site, except | 22 | | that the $100,000 threshold shall not apply
to any site | 23 | | contained in an enterprise zone as determined by the | 24 | | Department of
Commerce and Community Affairs (now | 25 | | Department of Commerce and Economic Opportunity). The | 26 | | total credit allowed shall not exceed
$40,000 per year with |
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| 1 | | a maximum total of $150,000 per site. For partners and
| 2 | | shareholders of subchapter S corporations, there shall be | 3 | | allowed a credit
under this subsection to be determined in | 4 | | accordance with the determination of
income and | 5 | | distributive share of income under Sections 702 and 704 and
| 6 | | subchapter S of the Internal Revenue Code. | 7 | | (ii) A credit allowed under this subsection that is | 8 | | unused in the year
the credit is earned may be carried | 9 | | forward to each of the 5 taxable years
following the year | 10 | | for which the credit is first earned until it is used.
The | 11 | | term "unused credit" does not include any amounts of | 12 | | unreimbursed eligible
remediation costs in excess of the | 13 | | maximum credit per site authorized under
paragraph (i). | 14 | | This credit shall be applied first to the earliest year
for | 15 | | which there is a liability. If there is a credit under this | 16 | | subsection
from more than one tax year that is available to | 17 | | offset a liability, the
earliest credit arising under this | 18 | | subsection shall be applied first. A
credit allowed under | 19 | | this subsection may be sold to a buyer as part of a sale
of | 20 | | all or part of the remediation site for which the credit | 21 | | was granted. The
purchaser of a remediation site and the | 22 | | tax credit shall succeed to the unused
credit and remaining | 23 | | carry-forward period of the seller. To perfect the
| 24 | | transfer, the assignor shall record the transfer in the | 25 | | chain of title for the
site and provide written notice to | 26 | | the Director of the Illinois Department of
Revenue of the |
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| 1 | | assignor's intent to sell the remediation site and the | 2 | | amount of
the tax credit to be transferred as a portion of | 3 | | the sale. In no event may a
credit be transferred to any | 4 | | taxpayer if the taxpayer or a related party would
not be | 5 | | eligible under the provisions of subsection (i). | 6 | | (iii) For purposes of this Section, the term "site" | 7 | | shall have the same
meaning as under Section 58.2 of the | 8 | | Environmental Protection Act. | 9 | | (m) Education expense credit. Beginning with tax years | 10 | | ending after
December 31, 1999, a taxpayer who
is the custodian | 11 | | of one or more qualifying pupils shall be allowed a credit
| 12 | | against the tax imposed by subsections (a) and (b) of this | 13 | | Section for
qualified education expenses incurred on behalf of | 14 | | the qualifying pupils.
The credit shall be equal to 25% of | 15 | | qualified education expenses, but in no
event may the total | 16 | | credit under this subsection claimed by a
family that is the
| 17 | | custodian of qualifying pupils exceed $500. In no event shall a | 18 | | credit under
this subsection reduce the taxpayer's liability | 19 | | under this Act to less than
zero. This subsection is exempt | 20 | | from the provisions of Section 250 of this
Act. | 21 | | For purposes of this subsection: | 22 | | "Qualifying pupils" means individuals who (i) are | 23 | | residents of the State of
Illinois, (ii) are under the age of | 24 | | 21 at the close of the school year for
which a credit is | 25 | | sought, and (iii) during the school year for which a credit
is | 26 | | sought were full-time pupils enrolled in a kindergarten through |
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| 1 | | twelfth
grade education program at any school, as defined in | 2 | | this subsection. | 3 | | "Qualified education expense" means the amount incurred
on | 4 | | behalf of a qualifying pupil in excess of $250 for tuition, | 5 | | book fees, and
lab fees at the school in which the pupil is | 6 | | enrolled during the regular school
year. | 7 | | "School" means any public or nonpublic elementary or | 8 | | secondary school in
Illinois that is in compliance with Title | 9 | | VI of the Civil Rights Act of 1964
and attendance at which | 10 | | satisfies the requirements of Section 26-1 of the
School Code, | 11 | | except that nothing shall be construed to require a child to
| 12 | | attend any particular public or nonpublic school to qualify for | 13 | | the credit
under this Section. | 14 | | "Custodian" means, with respect to qualifying pupils, an | 15 | | Illinois resident
who is a parent, the parents, a legal | 16 | | guardian, or the legal guardians of the
qualifying pupils. | 17 | | (n) River Edge Redevelopment Zone site remediation tax | 18 | | credit.
| 19 | | (i) For tax years ending on or after December 31, 2006, | 20 | | a taxpayer shall be allowed a credit against the tax | 21 | | imposed by subsections (a) and (b) of this Section for | 22 | | certain amounts paid for unreimbursed eligible remediation | 23 | | costs, as specified in this subsection. For purposes of | 24 | | this Section, "unreimbursed eligible remediation costs" | 25 | | means costs approved by the Illinois Environmental | 26 | | Protection Agency ("Agency") under Section 58.14a of the |
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| 1 | | Environmental Protection Act that were paid in performing | 2 | | environmental remediation at a site within a River Edge | 3 | | Redevelopment Zone for which a No Further Remediation | 4 | | Letter was issued by the Agency and recorded under Section | 5 | | 58.10 of the Environmental Protection Act. The credit must | 6 | | be claimed for the taxable year in which Agency approval of | 7 | | the eligible remediation costs is granted. The credit is | 8 | | not available to any taxpayer if the taxpayer or any | 9 | | related party caused or contributed to, in any material | 10 | | respect, a release of regulated substances on, in, or under | 11 | | the site that was identified and addressed by the remedial | 12 | | action pursuant to the Site Remediation Program of the | 13 | | Environmental Protection Act. Determinations as to credit | 14 | | availability for purposes of this Section shall be made | 15 | | consistent with rules adopted by the Pollution Control | 16 | | Board pursuant to the Illinois Administrative Procedure | 17 | | Act for the administration and enforcement of Section 58.9 | 18 | | of the Environmental Protection Act. For purposes of this | 19 | | Section, "taxpayer" includes a person whose tax attributes | 20 | | the taxpayer has succeeded to under Section 381 of the | 21 | | Internal Revenue Code and "related party" includes the | 22 | | persons disallowed a deduction for losses by paragraphs | 23 | | (b), (c), and (f)(1) of Section 267 of the Internal Revenue | 24 | | Code by virtue of being a related taxpayer, as well as any | 25 | | of its partners. The credit allowed against the tax imposed | 26 | | by subsections (a) and (b) shall be equal to 25% of the |
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| 1 | | unreimbursed eligible remediation costs in excess of | 2 | | $100,000 per site. | 3 | | (ii) A credit allowed under this subsection that is | 4 | | unused in the year the credit is earned may be carried | 5 | | forward to each of the 5 taxable years following the year | 6 | | for which the credit is first earned until it is used. This | 7 | | credit shall be applied first to the earliest year for | 8 | | which there is a liability. If there is a credit under this | 9 | | subsection from more than one tax year that is available to | 10 | | offset a liability, the earliest credit arising under this | 11 | | subsection shall be applied first. A credit allowed under | 12 | | this subsection may be sold to a buyer as part of a sale of | 13 | | all or part of the remediation site for which the credit | 14 | | was granted. The purchaser of a remediation site and the | 15 | | tax credit shall succeed to the unused credit and remaining | 16 | | carry-forward period of the seller. To perfect the | 17 | | transfer, the assignor shall record the transfer in the | 18 | | chain of title for the site and provide written notice to | 19 | | the Director of the Illinois Department of Revenue of the | 20 | | assignor's intent to sell the remediation site and the | 21 | | amount of the tax credit to be transferred as a portion of | 22 | | the sale. In no event may a credit be transferred to any | 23 | | taxpayer if the taxpayer or a related party would not be | 24 | | eligible under the provisions of subsection (i). | 25 | | (iii) For purposes of this Section, the term "site" | 26 | | shall have the same meaning as under Section 58.2 of the |
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| 1 | | Environmental Protection Act. | 2 | | (iv) This subsection is exempt from the provisions of | 3 | | Section 250.
| 4 | | (Source: P.A. 95-454, eff. 8-27-07; 96-115, eff. 7-31-09; | 5 | | 96-116, eff. 7-31-09; 96-937, eff. 6-23-10; 96-1000, eff. | 6 | | 7-2-10; 96-1496, eff. 1-13-11.) | 7 | | Section 15. The Economic Development for a Growing Economy | 8 | | Tax Credit Act is amended by changing Sections 5-15 and 5-50 | 9 | | and by adding Section 5-77 as follows: | 10 | | (35 ILCS 10/5-15) | 11 | | Sec. 5-15. Tax Credit Awards. Subject to the conditions set | 12 | | forth in this
Act, a Taxpayer is
entitled to a Credit against | 13 | | or, as described in subsection (g) of this Section, a payment | 14 | | towards taxes imposed pursuant to subsections (a) and (b)
of | 15 | | Section 201 of the Illinois
Income Tax Act that may be imposed | 16 | | on the Taxpayer for a taxable year beginning
on or
after | 17 | | January 1, 1999,
if the Taxpayer is awarded a Credit by the | 18 | | Department under this Act for that
taxable year. | 19 | | (a) The Department shall make Credit awards under this Act | 20 | | to foster job
creation and retention in Illinois. | 21 | | (b) A person that proposes a project to create new jobs in | 22 | | Illinois must
enter into an Agreement with the
Department for | 23 | | the Credit under this Act. | 24 | | (c) The Credit shall be claimed for the taxable years |
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| 1 | | specified in the
Agreement. | 2 | | (d) The Credit shall not exceed the Incremental Income Tax | 3 | | attributable to
the project that is the subject of the | 4 | | Agreement. | 5 | | (e) Nothing herein shall prohibit a Tax Credit Award to an | 6 | | Applicant that uses a PEO if all other award criteria are | 7 | | satisfied.
| 8 | | (f) In lieu of the Credit allowed under this Act against | 9 | | the taxes imposed pursuant to subsections (a) and (b) of | 10 | | Section 201 of the Illinois Income Tax Act for any taxable year | 11 | | ending on or after December 31, 2009, the Taxpayer may elect to | 12 | | claim the Credit against its obligation to pay over withholding | 13 | | under Section 704A of the Illinois Income Tax Act. | 14 | | (1) The election under this subsection (f) may be made | 15 | | only by a Taxpayer that (i) is primarily engaged in one of | 16 | | the following business activities: water purification and | 17 | | treatment, motor vehicle metal stamping, automobile | 18 | | manufacturing, automobile and light duty motor vehicle | 19 | | manufacturing, motor vehicle manufacturing, light truck | 20 | | and utility vehicle manufacturing, heavy duty truck | 21 | | manufacturing, or motor vehicle body manufacturing , cable | 22 | | television infrastructure design or manufacturing, or | 23 | | wireless telecommunication or computing terminal device | 24 | | design or manufacturing for use on public networks and (ii) | 25 | | meets the 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; or |
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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 | | (2) An election under this subsection shall allow the | 8 | | credit to be taken against payments otherwise due under | 9 | | Section 704A of the Illinois Income Tax Act during the | 10 | | first calendar year beginning after the end of the taxable | 11 | | year in which the credit is awarded under this Act. | 12 | | (3) The election shall be made in the form and manner | 13 | | required by the Illinois Department of Revenue and, once | 14 | | made, shall be irrevocable. | 15 | | (4) If a Taxpayer who meets the requirements of | 16 | | subparagraph (A) of paragraph (1) of this subsection (f) | 17 | | elects to claim the Credit against its withholdings as | 18 | | provided in this subsection (f), then, on and after the | 19 | | date of the election, the terms of the Agreement between | 20 | | the Taxpayer and the Department may not be further amended | 21 | | during the term of the Agreement. | 22 | | (g) A pass-through entity that has been awarded a credit | 23 | | under this Act, its shareholders, or its partners may treat | 24 | | some or all of the credit awarded pursuant to this Act as a tax | 25 | | payment for purposes of the Illinois Income Tax Act. The term | 26 | | "tax payment" means a payment as described in Article 6 or |
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| 1 | | Article 8 of the Illinois Income Tax Act or a composite payment | 2 | | made by a pass-through entity on behalf of any of its | 3 | | shareholders or partners to satisfy such shareholders' or | 4 | | partners' taxes imposed pursuant to subsections (a) and (b) of | 5 | | Section 201 of the Illinois Income Tax Act. In no event shall | 6 | | the amount of the award credited pursuant to this Act exceed | 7 | | the Illinois income tax liability of the pass-through entity or | 8 | | its shareholders or partners for the taxable year. | 9 | | (Source: P.A. 95-375, eff. 8-23-07; 96-834, eff. 12-14-09; | 10 | | 96-836, eff. 12-16-09; 96-905, eff. 6-4-10; 96-1000, eff. | 11 | | 7-2-10; 96-1534, eff. 3-4-11.)
| 12 | | (35 ILCS 10/5-50)
| 13 | | Sec. 5-50. Contents of Agreements with Applicants. The | 14 | | Department shall
enter into an Agreement with an
Applicant that | 15 | | is awarded a Credit under this Act. The Agreement
must include | 16 | | all of the following:
| 17 | | (1) A detailed description of the project that is the | 18 | | subject of the
Agreement, including the location and amount | 19 | | of the investment and jobs created
or retained.
| 20 | | (2) The duration of the Credit and the first taxable | 21 | | year for which
the Credit may be claimed.
| 22 | | (3) The Credit amount that will be allowed for each | 23 | | taxable year.
| 24 | | (4) A requirement that the Taxpayer shall maintain | 25 | | operations at the
project location that shall be stated as |
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| 1 | | a minimum number of years not to
exceed 10.
| 2 | | (5) A specific method for determining the number of New | 3 | | Employees
employed during a taxable year.
| 4 | | (6) A requirement that the Taxpayer shall annually | 5 | | report to the
Department the number of New Employees,
the | 6 | | Incremental Income Tax
withheld in connection with the New | 7 | | Employees, and any other
information the Director needs to | 8 | | perform the Director's duties under
this Act.
| 9 | | (7) A requirement that the Director is authorized to | 10 | | verify with the
appropriate State agencies the amounts | 11 | | reported under paragraph
(6), and after doing so shall | 12 | | issue a certificate to the Taxpayer
stating that the | 13 | | amounts have been verified.
| 14 | | (8) A requirement that the Taxpayer shall provide | 15 | | written
notification to the Director not more than 30
days | 16 | | after the Taxpayer makes or receives a proposal that would
| 17 | | transfer the Taxpayer's State tax liability obligations to | 18 | | a
successor Taxpayer.
| 19 | | (9) A detailed description of the number of New | 20 | | Employees to be
hired, and the occupation and
payroll of | 21 | | the full-time jobs to be created or retained as a result of | 22 | | the
project.
| 23 | | (10) The minimum investment the business enterprise | 24 | | will make in
capital improvements, the time period
for | 25 | | placing the property in service, and the designated | 26 | | location in Illinois
for the investment.
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| 1 | | (11) A requirement that the Taxpayer shall provide | 2 | | written
notification to the Director and
the Committee not | 3 | | more than 30 days after the Taxpayer determines
that the | 4 | | minimum
job creation or retention, employment payroll, or | 5 | | investment no longer is being
or will be achieved or
| 6 | | maintained as set forth in the terms and conditions of the
| 7 | | Agreement.
| 8 | | (12) A provision that, if the total number of New | 9 | | Employees falls
below a specified level, the
allowance of | 10 | | Credit shall be suspended until the number of New
Employees | 11 | | equals or exceeds
the Agreement amount.
| 12 | | (13) A detailed description of the items for which the | 13 | | costs incurred by
the Taxpayer will be included
in the | 14 | | limitation on the Credit provided in Section 5-30.
| 15 | | (13.5) A provision that, if the Taxpayer never meets | 16 | | either the investment or job creation and retention | 17 | | requirements specified in the Agreement during the entire | 18 | | 5-year period beginning on the first day of the first | 19 | | taxable year in which the Agreement is executed and ending | 20 | | on the last day of the fifth taxable year after the | 21 | | Agreement is executed, then the Agreement is automatically | 22 | | terminated on the last day of the fifth taxable year after | 23 | | the Agreement is executed and the Taxpayer is not entitled | 24 | | to the award of any credits for any of that 5-year period.
| 25 | | (14) Any other performance conditions or contract | 26 | | provisions as the
Department determines are
appropriate.
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| 1 | | (Source: P.A. 91-476, eff. 8-11-99.)
| 2 | | (35 ILCS 10/5-77 new) | 3 | | Sec. 5-77. Sunset of new Agreements. The Department shall | 4 | | not enter into any new Agreements under the provisions of | 5 | | Section 5-50 of this Act after December 31, 2016. | 6 | | Section 20. The Film
Production Services Tax Credit Act of | 7 | | 2008 is amended by adding Section 42 as follows: | 8 | | (35 ILCS 16/42 new) | 9 | | Sec. 42. Sunset of credits. The application of credits | 10 | | awarded pursuant to this Act shall be limited by a reasonable | 11 | | and appropriate sunset date. A taxpayer shall not be entitled | 12 | | to take a credit awarded pursuant to this Act for tax years | 13 | | beginning on or after 5 years after the effective date of this | 14 | | amendatory Act of the 97th General Assembly.
| 15 | | Section 99. Effective date. This Act takes effect upon | 16 | | becoming law.".
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