SB1149eng 97TH GENERAL ASSEMBLY



 


 
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1    AN ACT concerning employment.
 
2    Be it enacted by the People of the State of Illinois,
3represented in the General Assembly:
 
4    Section 1. Short title. This Act may be cited as the
5Illinois Quality Jobs Act.
 
6    Section 5. Definitions. As used in this Act:
7    (1) "Approval" means a document submitted by the Department
8to the qualified company that states the benefits that may be
9provided by this program.
10    (2) "Average wage" means the new payroll divided by the
11number of new jobs.
12    (3) "Commencement of operations" means the starting date
13for the qualified company's first new employee, which must be
14no later than 12 months from the date of the approval.
15    (4) "County average wage" means the average wage in each
16county as determined by the Department for the most recently
17completed full calendar year. However, if the computed county
18average wage is above the statewide average wage, the statewide
19average wage shall be deemed the county average wage for such
20county for the purpose of determining eligibility. The
21Department shall publish the county average wage for each
22county at least annually. Notwithstanding the provisions of
23this Act to the contrary, for any qualified company that in

 

 

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1conjunction with its project is relocating employees from an
2Illinois county with a higher county average wage, the company
3shall obtain the endorsement of the governing body of the
4community from which jobs are being relocated or the county
5average wage for its project shall be the county average wage
6for the county from which the employees are being relocated.
7    (5) "Department" means the Department of Commerce and
8Economic Opportunity.
9    (6) "Director" means the Director of Commerce and Economic
10Opportunity.
11    (7) "Employee" means a person employed by a qualified
12company.
13    (8) "Full-time employee" means an employee of the qualified
14company who is scheduled to work an average of at least 35
15hours per week for a 12-month period, and one for which the
16qualified company offers health insurance and pays at least 50%
17of such insurance premiums.
18    (9) "High-impact project" means a qualified company that,
19within 2 years from commencement of operations, creates 100 or
20more new jobs.
21    (10) "Local incentives" means the present value of the
22dollar amount of direct benefit received by a qualified company
23for a project facility from one or more units of local
24government, but does not include loans or other funds provided
25to the qualified company that must be repaid by the qualified
26company to the unit of local government.

 

 

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1    (11) "NAICS" means the 1997 edition of the North American
2Industry Classification System as prepared by the Executive
3Office of the President, Office of Management and Budget. Any
4NAICS sector, subsector, industry group or industry identified
5in this Section shall include its corresponding classification
6in subsequent federal industry classification systems.
7    (12) "New direct local revenue" means the present value of
8the dollar amount of direct net new tax revenues of the local
9political subdivisions likely to be produced by the project
10over a 10-year period, as calculated by the Department,
11excluding net new utility revenues, provided the local
12incentives include a discount or other direct incentives from
13utilities owned or operated by the political subdivision.
14    (13) "New investment" means the purchase or leasing of new
15tangible assets to be placed in operation at the project
16facility, which will be directly related to the new jobs.
17    (14) "New job" means the number of full-time employees
18located at the project facility that exceeds the project
19facility base employment less any decrease in the number of
20full-time employees at related facilities below the related
21facility base employment. No job that was created prior to the
22date of the notice of intent shall be deemed a new job. An
23employee that spends less than 50% of the employee's work time
24at the facility is still considered to be located at a facility
25if the employee receives his or her directions and control from
26that facility, the employee is on the facility's payroll, 100%

 

 

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1of the employee's income from such employment is Illinois
2income, and the employee is paid at or above the State average
3wage.
4    (15) "New payroll" means the amount of taxable wages of
5full-time employees, excluding owners, located at the project
6facility that exceeds the project facility base payroll. If
7full-time employment at related facilities is below the related
8facility base employment, any decrease in payroll for full-time
9employees at the related facilities below that related facility
10base payroll shall also be subtracted to determine new payroll.
11    (16) "Notice of intent" means a form developed by the
12Department, completed by the qualified company, and submitted
13to the Department which states the qualified company's intent
14to hire new jobs and request benefits under this program.
15    (17) "Percent of local incentives" means the amount of
16local incentives divided by the amount of new direct local
17revenue.
18    (18) "Program" means the Illinois quality jobs program
19provided for in this Act.
20    (19) "Project facility" means the building used by a
21qualified company at which the new jobs and new investment will
22be located. A project facility may include separate buildings
23that are located within 15 miles of each other or within the
24same county such that their purpose and operations are
25interrelated.
26    (20) "Project facility base employment" means the greater

 

 

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1of the number of full-time employees located at the project
2facility on the date of the notice of intent or for the
312-month period prior to the date of the notice of intent, the
4average number of full-time employees located at the project
5facility. If the project facility has not been in operation for
6a full 12-month period, "project facility base employment"
7means the average number of full-time employees for the number
8of months the project facility has been in operation prior to
9the date of the notice of intent.
10    (21) "Project facility base payroll" means the total amount
11of taxable wages paid by the qualified company to full-time
12employees of the qualified company located at the project
13facility in the 12 months prior to the notice of intent, not
14including the payroll of the owners of the qualified company
15unless the qualified company is participating in an employee
16stock ownership plan. For purposes of calculating the benefits
17under this program, the amount of base payroll shall increase
18each year based on an appropriate measure, as determined by the
19Department.
20    (22) "Project period" means the time period that the
21benefits are provided to a qualified company.
22    (23) "Qualified company" means a firm, partnership, joint
23venture, association, private or public corporation whether
24organized for profit or not, or headquarters of such entity
25registered to do business in Illinois that is the owner or
26operator of a project facility that offers health insurance to

 

 

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1all full-time employees of all facilities located in this State
2and pays at least 50% of such insurance premiums. "Qualified
3company", however, does not include:
4        (A) gambling establishments (NAICS industry group
5    7132);
6        (B) retail trade establishments (NAICS sectors 44 and
7    45);
8        (C) food and drinking places (NAICS subsector 722);
9        (D) public utilities (NAICS 221 including water and
10    sewer services);
11        (E) any company that is delinquent in the payment of
12    any nonprotested taxes or any other amounts due the State
13    or federal government or any other political subdivision of
14    this State;
15        (F) any company that has filed for or has publicly
16    announced its intention to file for bankruptcy protection;
17    however, a company that has filed for or has publicly
18    announced its intention to file for bankruptcy between
19    January 1, 2009, and December 31, 2009, may be a qualified
20    company provided that the company:
21            (i) Certifies to the Department that it plans to
22        reorganize and not to liquidate; and
23            (ii) After its bankruptcy petition has been filed,
24        it produces proof, in a form and at times satisfactory
25        to the Department, that it is not delinquent in filing
26        any tax returns or making any payment due to the State

 

 

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1        of Illinois, including but not limited to all tax
2        payments due after the filing of the bankruptcy
3        petition and under the terms of the plan of
4        reorganization;
5        any taxpayer who is awarded benefits under this
6    subsection and who files for bankruptcy under Chapter 7 of
7    the United States Bankruptcy Code shall immediately notify
8    the Department and shall forfeit the benefits and shall
9    repay the State an amount equal to any State tax credits
10    already redeemed and any withholding taxes already
11    retained;
12        (G) educational services (NAICS sector 61);
13        (H) religious organizations (NAICS industry group
14    8131);
15        (I) public administration (NAICS sector 92);
16        (J) ethanol distillation or production; or
17        (K) biodiesel production.
18    Notwithstanding any provision of this Section to the
19contrary, the headquarters or administrative offices of an
20otherwise excluded business may qualify for benefits if the
21offices serve a multistate territory. In the event a national,
22state, or regional headquarters operation is not the
23predominant activity of a project facility, the new jobs and
24investment of such headquarters operation is considered
25eligible for benefits under this Section if the other
26requirements are satisfied.

 

 

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1    (24) "Qualified renewable energy sources" shall not be
2construed to include ethanol distillation or production or
3biodiesel production; however, it shall include:
4        (A) open-looped biomass;
5        (B) close-looped biomass;
6        (C) solar;
7        (D) wind;
8        (E) geothermal; and
9        (F) hydropower.
10    (25) "Related company" means:
11        (A) a corporation, partnership, trust, or association
12    controlled by the qualified company;
13        (B) an individual, corporation, partnership, trust, or
14    association in control of the qualified company; or
15        (C) corporations, partnerships, trusts, or
16    associations controlled by an individual, corporation,
17    partnership, trust or association in control of the
18    qualified company. As used in this item (C), "control of a
19    corporation" shall mean ownership, directly or indirectly,
20    of stock possessing at least 50% of the total combined
21    voting power of all classes of stock entitled to vote,
22    "control of a partnership or association" shall mean
23    ownership of at least 50% of the capital or profits
24    interest in such partnership or association, "control of a
25    trust" shall mean ownership, directly or indirectly, of at
26    least 50% of the beneficial interest in the principal or

 

 

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1    income of such trust, and ownership shall be determined as
2    provided in Section 318 of the Internal Revenue Code of
3    1986, as amended.
4    (26) "Related facility" means a facility operated by the
5qualified company or a related company located in this State
6that is directly related to the operations of the project
7facility.
8    (27) "Related facility base employment" means the greater
9of the number of full-time employees located at all related
10facilities on the date of the notice of intent or for the
1112-month period prior to the date of the notice of intent, the
12average number of full-time employees located at all related
13facilities of the qualified company or a related company
14located in this State.
15    (28) "Related facility base payroll" means the total amount
16of taxable wages paid by the qualified company to full-time
17employees of the qualified company located at a related
18facility in the 12 months prior to the filing of the notice of
19intent, not including the payroll of the owners of the
20qualified company unless the qualified company is
21participating in an employee stock ownership plan. For purposes
22of calculating the benefits under this program, the amount of
23related facility base payroll shall increase each year based on
24an appropriate measure, as determined by the Department.
25    (29) "Rural area" means a county in Illinois with a
26population less than 75,000 or that does not contain an

 

 

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1individual city with a population greater than 50,000 according
2to the most recent federal decennial census.
3    (30) "Small and expanding business project" means a
4qualified company that within 2 years of the date of the
5approval creates a minimum of 20 new jobs if the project
6facility is located in a rural area or a minimum of 40 new jobs
7if the project facility is not located in a rural area and
8creates fewer than 100 new jobs regardless of the location of
9the project facility.
10    (31) "Tax credits" means tax credits issued by the
11Department to offset the State income taxes imposed by the
12Illinois Income Tax Act, or which may be refunded as provided
13for in this program.
14    (32) "Technology business project" means a qualified
15company that within 2 years of the date of the approval creates
16a minimum of 10 new jobs involved in the operations of a
17company that:
18        (A) is a technology company, as determined by a rule
19    adopted by the Department under the provisions of Section
20    15 or classified by NAICS codes;
21        (B) owns or leases a facility which produces
22    electricity derived from qualified renewable energy
23    sources, or produces fuel for the generation of electricity
24    from qualified renewable energy sources, but does not
25    include any company that has received the alcohol mixture
26    credit, alcohol credit, or small ethanol producer credit

 

 

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1    pursuant to Section 40 of the Internal Revenue Code of 1986
2    in the previous tax year;
3        (C) researches, develops, or manufactures power system
4    technology for: aerospace; space; defense; hybrid
5    vehicles; or implantable or wearable medical devices; or
6        (D) is a clinical molecular diagnostic laboratory
7    focused on detecting and monitoring infections in
8    immunocompromised patient populations.
9    (33) "Withholding tax" means the State tax imposed by
10Article 7 of the Illinois Income Tax Act. For purposes of this
11program, the withholding tax shall be computed using a schedule
12as determined by the Department based on average wages.
 
13    Section 10. Notice of intent; benefits.
14    (a) The Department shall respond within 30 days to a
15company that provides a notice of intent with either an
16approval or a rejection of the notice of intent. The Department
17shall give preference to qualified companies and projects
18targeted at an area of the State which has recently been
19classified as a disaster area by the federal government.
20Failure to respond on behalf of the Department shall result in
21the notice of intent being deemed an approval for the purposes
22of this Section. A qualified company that is provided an
23approval for a project shall be allowed a benefit as provided
24in this program in the amount and duration provided in this
25Section. A qualified company may receive additional periods for

 

 

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1subsequent new jobs at the same facility after the full initial
2period if the minimum thresholds are met as set forth in this
3Act. There is no limit on the number of periods a qualified
4company may participate in the program, as long as the minimum
5thresholds are achieved and the qualified company provides the
6Department with the required reporting and is in proper
7compliance for this program or other State programs. A
8qualified company may elect to file a notice of intent to start
9a new project period concurrently with an existing project
10period if the minimum thresholds are achieved and the qualified
11company provides the Department with the required reporting and
12is in proper compliance for this program and other State
13programs; however, the qualified company may not receive any
14further benefit under the original approval for jobs created
15after the date of the new notice of intent, and any jobs
16created before the new notice of intent may not be included as
17new jobs for the purpose of benefit calculation in relation to
18the new approval. When a qualified company has filed and
19received approval of a notice of intent and subsequently files
20another notice of intent, the Department shall apply the
21definition of project facility under subdivision (19) of
22Section 5 to the new notice of intent as well as all previously
23approved notices of intent and shall determine the application
24of the definitions of new job, new payroll, project facility
25base employment, and project facility base payroll
26accordingly.

 

 

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1    (b) Notwithstanding any provision of law to the contrary,
2any qualified company that is awarded benefits under this
3program may not simultaneously receive tax credits or
4exemptions under the Economic Development for a Growing Economy
5Tax Credit Act, the Business Location Efficiency Incentive Act,
6and the Small Business Job Creation Tax Credit Act. Any
7taxpayer who is awarded benefits under this program who
8knowingly hires individuals who are not allowed to work legally
9in the United States shall immediately forfeit those benefits
10and shall repay the State an amount equal to any State tax
11credits already redeemed and any withholding taxes already
12retained.
13    (c) The types of projects and the amount of benefits to be
14provided are:
15        (1) Small and expanding business projects. In exchange
16    for the consideration provided by the new tax revenues and
17    other economic stimuli that will be generated by the new
18    jobs created by the program, a qualified company engaged in
19    a small and expanding business project may retain from the
20    amounts required to be withheld and remitted under Article
21    7 of the Illinois Income Tax Act an amount equal to the
22    witholding tax, as calculated under item (33) of Section 5,
23    attributable to the new jobs created by the program. Those
24    amounts may be retained for a period of 3 years from the
25    date the required number of new jobs were created if the
26    average wage of the new payroll equals or exceeds the

 

 

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1    county average wage or for a period of 5 years from the
2    date the required number of new jobs were created if the
3    average wage of the new payroll equals or exceeds 120% of
4    the county average wage.
5        (2) Technology business projects. In exchange for the
6    consideration provided by the new tax revenues and other
7    economic stimuli that will be generated by the new jobs
8    created by the program, a qualified company engaged in a
9    technology business project may retain an amount equal to a
10    maximum of 5% of new payroll for a period of 5 years from
11    the date the required number of jobs were created from the
12    withholding tax of the new jobs that would otherwise be
13    required to be withheld and remitted by the qualified
14    company under the provisions of Article 7 of the Illinois
15    Income Tax Act if the average wage of the new payroll
16    equals or exceeds the county average wage. An additional
17    one-half percent of new payroll may be added to the 5%
18    maximum if the average wage of the new payroll in any year
19    exceeds 120% of the county average wage in the county in
20    which the project facility is located, plus an additional
21    one-half percent of new payroll may be added if the average
22    wage of the new payroll in any year exceeds 140% of the
23    average wage in the county in which the project facility is
24    located. No credit issued under this Section shall reduce a
25    taxpayer's liability below zero.
26        (3) High impact projects. In exchange for the

 

 

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1    consideration provided by the new tax revenues and other
2    economic stimuli that will be generated by the new jobs
3    created by the program, a qualified company engaged in a
4    high impact project may retain, from the withholding tax of
5    the new jobs that would otherwise be required to be
6    withheld and remitted by the qualified company under the
7    provisions of Article 7 of the Illinois Income Tax Act, an
8    amount equal to 3% of new payroll for a period of 5 years
9    from the date the required number of jobs were created if
10    the average wage of the new payroll equals or exceeds the
11    county average wage of the county in which the project
12    facility is located. For high-impact projects in a facility
13    located within 2 adjacent counties, the new payroll shall
14    equal or exceed the higher county average wage of the
15    adjacent counties. The percentage of payroll allowed under
16    this subdivision shall be 3.5% of new payroll if the
17    average wage of the new payroll in any year exceeds 120% of
18    the county average wage in the county in which the project
19    facility is located. The percentage of payroll allowed
20    under this subdivision shall be 4% of new payroll if the
21    average wage of the new payroll in any year exceeds 140% of
22    the county average wage in the county in which the project
23    facility is located. An additional 1% of new payroll may be
24    added to these percentages if local incentives equal
25    between 10% and 24% of the new direct local revenue; an
26    additional 2% of new payroll is added to these percentages

 

 

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1    if the local incentives equal between 25% and 49% of the
2    new direct local revenue; and an additional 3% of payroll
3    is added to these percentages if the local incentives equal
4    50% or more of the new direct local revenue. The Department
5    shall issue a refundable tax credit for any difference
6    between the amount of benefit allowed under this item and
7    the amount of withholding tax retained by the company, in
8    the event the withholding tax is not sufficient to provide
9    the entire amount of benefit due to the qualified company
10    under this subdivision.
11        (4) Job retention projects. A qualified company may
12    receive a tax credit for the retention of jobs in this
13    State, provided that the qualified company and the project
14    meets all of the following conditions:
15            (A) for each of the 24 months preceding the year in
16        which application for the program is made the qualified
17        company must have maintained at least 1,000 full-time
18        employees at the employer's site in the State at which
19        the jobs are based, and the average wage of such
20        employees must meet or exceed the county average wage;
21            (B) the qualified company retained at the project
22        facility the level of full-time employees that existed
23        in the taxable year immediately preceding the year in
24        which application for the program is made;
25            (C) the qualified company is considered to have a
26        significant statewide effect on the economy, and has

 

 

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1        been determined to represent a substantial risk of
2        relocation from the State by the Director;
3            (D) the qualified company in the project facility
4        shall cause to be invested a minimum of $70,000,000 in
5        new investment prior to the end of 2 years or shall
6        cause to be invested a minimum of $30,000,000 in new
7        investment prior to the end of 2 years and maintain an
8        annual payroll of at least $70,000,000 during each of
9        the years for which a credit is claimed; and
10            (E) the local taxing entities shall provide local
11        incentives of at least 50% of the new direct local
12        revenues created by the project over a 10-year period.
13        Pursuant to Section 15, the Department shall adopt
14        appropriate rules or regulations to be applied to a
15        company for violating an agreement. The amount of the
16        job retention credit granted may be equal to up to 50%
17        of the amount of withholding tax generated by the
18        full-time jobs at the project facility for a period of
19        5 years. The calendar year annual maximum amount of tax
20        credit that may be issued to any qualified company for
21        a job retention project or combination of job retention
22        projects shall be $750,000 per year; in no event shall
23        the total amount of all tax credits issued for the
24        entire job retention program under this item exceed
25        $3,000,000 annually; no tax credits shall be issued for
26        job retention projects approved by the Department

 

 

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1        after August 30, 2014.
2        (5) Small business job retention and flood survivor
3    relief. A qualified company may receive a tax credit under
4    this Act for the retention of jobs and flood survivor
5    relief in this State for each job retained over a 3-year
6    period, provided that:
7            (A) the qualified company did not receive any State
8        or federal benefits, incentives, or tax relief or
9        abatement in locating its facility in a flood plain;
10            (B) the qualified company and related companies
11        have fewer than 100 employees at the time an
12        application for the program is made;
13            (C) the average wage of the qualified company's and
14        related companies' employees must meet or exceed the
15        county average wage;
16            (D) all of the qualified company's and related
17        companies' facilities are located in this State;
18            (E) the facilities at the primary business site in
19        this State have been directly damaged by floodwater
20        rising above the level of a 500-year flood at least 2
21        years, but fewer than 8 years, prior to the time
22        application is made;
23            (F) the qualified company made significant efforts
24        to protect the facilities prior to any impending danger
25        from rising floodwaters;
26            (G) for each year it receives tax credits under

 

 

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1        this Act, the qualified company and related companies
2        retained, at the company's facilities in this State, at
3        least the level of full-time, year-round employees
4        that existed in the taxable year immediately preceding
5        the year in which application for the program is made;
6        and
7            (H) in the years it receives tax credits under this
8        Act, the company cumulatively invests at least
9        $2,000,000 in capital improvements in facilities and
10        equipment located at those facilities that are not
11        located within a 500-year flood plain as designated by
12        the Federal Emergency Management Agency, and amended
13        from time to time. The amount of the small business job
14        retention and flood survivor relief credit granted may
15        be equal to up to 100% of the amount of withholding tax
16        generated by the full-time jobs at the project facility
17        for a period of 3 years; the calendar year annual
18        maximum amount of tax credit that may be issued to any
19        qualified company for a small business job retention
20        and flood survivor relief project shall be $250,000 per
21        year; in no event shall the total amount of all tax
22        credits issued for the entire small business job
23        retention and flood survivor relief program under this
24        item exceed $500,000 annually; notwithstanding the
25        provisions of this item to the contrary, no tax credits
26        shall be issued for small business job retention and

 

 

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1        flood survivor relief projects approved by the
2        Department after August 30, 2014.
3        (6) Manufacturing and information technology technical
4    services business projects. In exchange for the
5    consideration provided by the new tax revenues and other
6    economic stimuli that will be generated by the new jobs
7    created by the program, a qualified manufacturing and
8    information technology technical services company engaged
9    in the provision of technical services to manufacturing and
10    information technology companies at multiple sites located
11    within this State may retain from the amounts required to
12    be withheld and remitted under Article 7 of the Illinois
13    Income Tax Act an amount equal to the withholding tax, as
14    calculated under item (33) of Section 5, attributable to
15    the new jobs created by the expansion of service. Those
16    amounts may be retained (i) for a period of 3 years from
17    the date the required number of new jobs were created if
18    the average wage of the new payroll equals or exceeds the
19    state average wage or (ii) for a period of 5 years from the
20    date the required number of new jobs were created if the
21    average wage of the new payroll equals or exceeds $40,000
22    per new employee.
23        As used in this subsection, "manufacturing and
24    information technology technical services company" means a
25    qualified company maintaining and servicing production
26    equipment, and providing calibration, automation, and

 

 

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1    related technical support to manufacturing companies,
2    including providing similar service on computer equipment,
3    networks, and software, that within 2 years of the date of
4    the approval creates a minimum of 100 new jobs in support
5    of manufacturing or information technology companies at
6    multiple locations anywhere in this State.
7    (d) The qualified company shall provide an annual report of
8the number of jobs and such other information as may be
9required by the Department to document the basis for the
10benefits of this program. The Department may withhold the
11approval of any benefits until it is satisfied that proper
12documentation has been provided, and shall reduce the benefits
13to reflect any reduction in full-time employees or new payroll.
14Upon approval by the Department, the qualified company may
15begin the retention of the withholding taxes when it reaches
16the minimum number of new jobs and the average wage exceeds the
17county average wage. Tax credits, if any, may be issued upon
18satisfaction by the Department that the qualified company has
19exceeded the county average wage and the minimum number of new
20jobs. In such annual report, if the average wage is below the
21county average wage, the qualified company has not maintained
22the employee insurance as required, or if the number of new
23jobs is below the minimum, the qualified company shall not
24receive tax credits or retain the withholding tax for the
25balance of the benefit period. In the case of a qualified
26company that initially filed a notice of intent and received an

 

 

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1approval from the Department for high-impact benefits and the
2minimum number of new jobs in an annual report is below the
3minimum for high-impact projects, the company shall not receive
4tax credits for the balance of the benefit period but may
5continue to retain the withholding taxes if it otherwise meets
6the requirements of a small and expanding business under this
7program.
8    (e) The maximum calendar year annual tax credits issued for
9the entire program shall not exceed $80,000,000. There shall be
10no limit on the amount of withholding taxes that may be
11retained by approved companies under this program.
12    (f) The Department shall allocate the annual tax credits
13based on the date of the approval, reserving such tax credits
14based on the Department's best estimate of new jobs and new
15payroll of the project, and the other factors in the
16determination of benefits of this program. However, the annual
17issuance of tax credits is subject to the annual verification
18of the actual new payroll. The allocation of tax credits for
19the period assigned to a project shall expire if, within 2
20years from the date of commencement of operations, or approval
21if applicable, the minimum thresholds have not been achieved.
22The qualified company may retain authorized amounts from the
23withholding tax under this Section once the minimum new jobs
24thresholds are met for the duration of the project period. No
25benefits shall be provided under this program until the
26qualified company meets the minimum new jobs thresholds. In the

 

 

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1event the qualified company does not meet the minimum new job
2threshold, the qualified company may submit a new notice of
3intent or the Department may provide a new approval for a new
4project of the qualified company at the project facility or
5other facilities.
6    (g) For a qualified company with flow-through tax treatment
7to its members, partners, or shareholders, the tax credit shall
8be allowed to members, partners, or shareholders in proportion
9to their share of ownership on the last day of the qualified
10company's tax period.
11    (h) Tax credits may be claimed against taxes otherwise
12imposed by the Illinois Income Tax Act, and may not be carried
13forward but shall be claimed within one year of the close of
14the taxable year for which they were issued, except as provided
15under item (4) of subsection (c) of this Section.
16    (i) Prior to the issuance of tax credits, the Department
17shall verify through the Department of Revenue, or any other
18State agency, that the tax credit applicant does not owe any
19delinquent income, sales, or use tax, or interest or penalties
20on such taxes, or any delinquent fees or assessments levied by
21any State agency. Such delinquency shall not affect the
22authorization of the application for such tax credits, except
23that at issuance credits shall be first applied to the
24delinquency and any amount issued shall be reduced by the
25applicant's tax delinquency. If the Department of Revenue or
26any other State agency concludes that a taxpayer is delinquent

 

 

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1after June 15 but before July 1 of any year and the application
2of tax credits to such delinquency causes a tax deficiency on
3behalf of the taxpayer to arise, then the taxpayer shall be
4granted 30 days to satisfy the deficiency, during which time
5interest, penalties, and additions to tax shall be tolled.
6After applying all available credits toward a tax delinquency,
7the administering agency shall notify the appropriate agency
8and that agency shall update the amount of outstanding
9delinquent tax owed by the applicant. If any credits remain
10after satisfying all insurance, income, sales, and use tax
11delinquencies, the remaining credits shall be issued to the
12applicant, subject to the restrictions of other provisions of
13law.
14    (j) No credit issued under this Section shall reduce a
15taxpayer's liability below zero.
16    (k) An employee of a qualified company shall receive full
17credit for the amount of tax withheld as provided in Article 7
18of the Illinois Income Tax Act.
19    (l) If any provision of this Act or application thereof to
20any person or circumstance is held invalid, the invalidity
21shall not affect other provisions or application of this Act
22which can be given effect without the invalid provision or
23application, and to this end, the provisions of this Act are
24hereby declared severable.
 
25    Section 15. Rulemaking authority. The Department may adopt

 

 

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1such rules as may be necessary to carry out the provisions of
2this Act.
 
3    Section 20. Evaluation of the tax credit program. On an
4annual basis, the Department shall evaluate the tax program.
5Prior to March 1 of each year, the Department shall provide a
6report on the program to the General Assembly including the
7names of participating companies, location of such companies,
8the annual amount of benefits provided, the estimated net State
9fiscal impact (direct and indirect new State taxes derived from
10the project), the number of new jobs created or jobs retained,
11the average wages of each project, and the types of qualified
12companies using the program. The evaluation shall include an
13assessment of the effectiveness of the program in creating new
14jobs in Illinois and of the revenue impact of the program, and
15may include a review of the practices and experiences of other
16states with similar programs.
 
17    Section 80. The Illinois Income Tax Act is amended by
18changing Section 704A and by adding Section 221 as follows:
 
19    (35 ILCS 5/221 new)
20    Sec. 221. Illinois Quality Jobs Tax Credit. A taxpayer is
21entitled to a credit against the tax imposed by subsections (a)
22and (b) of Section 201 of this Act as provided in the Illinois
23Quality Jobs Act.
 

 

 

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1    (35 ILCS 5/704A)
2    Sec. 704A. Employer's return and payment of tax withheld.
3    (a) In general, every employer who deducts and withholds or
4is required to deduct and withhold tax under this Act on or
5after January 1, 2008 shall make those payments and returns as
6provided in this Section.
7    (b) Returns. Every employer shall, in the form and manner
8required by the Department, make returns with respect to taxes
9withheld or required to be withheld under this Article 7 for
10each quarter beginning on or after January 1, 2008, on or
11before the last day of the first month following the close of
12that quarter.
13    (c) Payments. With respect to amounts withheld or required
14to be withheld on or after January 1, 2008:
15        (1) Semi-weekly payments. For each calendar year, each
16    employer who withheld or was required to withhold more than
17    $12,000 during the one-year period ending on June 30 of the
18    immediately preceding calendar year, payment must be made:
19            (A) on or before each Friday of the calendar year,
20        for taxes withheld or required to be withheld on the
21        immediately preceding Saturday, Sunday, Monday, or
22        Tuesday;
23            (B) on or before each Wednesday of the calendar
24        year, for taxes withheld or required to be withheld on
25        the immediately preceding Wednesday, Thursday, or

 

 

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1        Friday.
2        Beginning with calendar year 2011, payments payment
3    made under this paragraph (1) of subsection (c) must be
4    made by electronic funds transfer.
5        (2) Semi-weekly payments. Any employer who withholds
6    or is required to withhold more than $12,000 in any quarter
7    of a calendar year is required to make payments on the
8    dates set forth under item (1) of this subsection (c) for
9    each remaining quarter of that calendar year and for the
10    subsequent calendar year.
11        (3) Monthly payments. Each employer, other than an
12    employer described in items (1) or (2) of this subsection,
13    shall pay to the Department, on or before the 15th day of
14    each month the taxes withheld or required to be withheld
15    during the immediately preceding month.
16        (4) Payments with returns. Each employer shall pay to
17    the Department, on or before the due date for each return
18    required to be filed under this Section, any tax withheld
19    or required to be withheld during the period for which the
20    return is due and not previously paid to the Department.
21    (d) Regulatory authority. The Department may, by rule:
22        (1) Permit employers, in lieu of the requirements of
23    subsections (b) and (c), to file annual returns due on or
24    before January 31 of the year for taxes withheld or
25    required to be withheld during the previous calendar year
26    and, if the aggregate amounts required to be withheld by

 

 

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1    the employer under this Article 7 (other than amounts
2    required to be withheld under Section 709.5) do not exceed
3    $1,000 for the previous calendar year, to pay the taxes
4    required to be shown on each such return no later than the
5    due date for such return.
6        (2) Provide that any payment required to be made under
7    subsection (c)(1) or (c)(2) is deemed to be timely to the
8    extent paid by electronic funds transfer on or before the
9    due date for deposit of federal income taxes withheld from,
10    or federal employment taxes due with respect to, the wages
11    from which the Illinois taxes were withheld.
12        (3) Designate one or more depositories to which payment
13    of taxes required to be withheld under this Article 7 must
14    be paid by some or all employers.
15        (4) Increase the threshold dollar amounts at which
16    employers are required to make semi-weekly payments under
17    subsection (c)(1) or (c)(2).
18    (e) Annual return and payment. Every employer who deducts
19and withholds or is required to deduct and withhold tax from a
20person engaged in domestic service employment, as that term is
21defined in Section 3510 of the Internal Revenue Code, may
22comply with the requirements of this Section with respect to
23such employees by filing an annual return and paying the taxes
24required to be deducted and withheld on or before the 15th day
25of the fourth month following the close of the employer's
26taxable year. The Department may allow the employer's return to

 

 

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1be submitted with the employer's individual income tax return
2or to be submitted with a return due from the employer under
3Section 1400.2 of the Unemployment Insurance Act.
4    (f) Magnetic media and electronic filing. Any W-2 Form
5that, under the Internal Revenue Code and regulations
6promulgated thereunder, is required to be submitted to the
7Internal Revenue Service on magnetic media or electronically
8must also be submitted to the Department on magnetic media or
9electronically for Illinois purposes, if required by the
10Department.
11    (g) For amounts deducted or withheld after December 31,
122009, a taxpayer who makes an election under subsection (f) of
13Section 5-15 of the Economic Development for a Growing Economy
14Tax Credit Act for a taxable year shall be allowed a credit
15against payments due under this Section for amounts withheld
16during the first calendar year beginning after the end of that
17taxable year equal to the amount of the credit for the
18incremental income tax attributable to full-time employees of
19the taxpayer awarded to the taxpayer by the Department of
20Commerce and Economic Opportunity under the Economic
21Development for a Growing Economy Tax Credit Act for the
22taxable year and credits not previously claimed and allowed to
23be carried forward under Section 211(4) of this Act as provided
24in subsection (f) of Section 5-15 of the Economic Development
25for a Growing Economy Tax Credit Act. The credit or credits may
26not reduce the taxpayer's obligation for any payment due under

 

 

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1this Section to less than zero. If the amount of the credit or
2credits exceeds the total payments due under this Section with
3respect to amounts withheld during the calendar year, the
4excess may be carried forward and applied against the
5taxpayer's liability under this Section in the succeeding
6calendar years as allowed to be carried forward under paragraph
7(4) of Section 211 of this Act. The credit or credits shall be
8applied to the earliest year for which there is a tax
9liability. If there are credits from more than one taxable year
10that are available to offset a liability, the earlier credit
11shall be applied first. Each employer who deducts and withholds
12or is required to deduct and withhold tax under this Act and
13who retains income tax withholdings under subsection (f) of
14Section 5-15 of the Economic Development for a Growing Economy
15Tax Credit Act must make a return with respect to such taxes
16and retained amounts in the form and manner that the
17Department, by rule, requires and pay to the Department or to a
18depositary designated by the Department those withheld taxes
19not retained by the taxpayer. For purposes of this subsection
20(g), the term taxpayer shall include taxpayer and members of
21the taxpayer's unitary business group as defined under
22paragraph (27) of subsection (a) of Section 1501 of this Act.
23This Section is exempt from the provisions of Section 250 of
24this Act.
25    (h) An employer may claim a credit against payments due
26under this Section for amounts withheld during the first

 

 

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1calendar year ending after date on which a tax credit
2certificate was issued under Section 35 of the Small Business
3Job Creation Tax Credit Act. The credit shall be equal to the
4amount shown on the certificate, but may not reduce the
5taxpayer's obligation for any payment due under this Section to
6less than zero. If the amount of the credit exceeds the total
7payments due under this Section with respect to amounts
8withheld during the calendar year, the excess may be carried
9forward and applied against the taxpayer's liability under this
10Section in the 5 succeeding calendar years. The credit shall be
11applied to the earliest year for which there is a tax
12liability. If there are credits from more than one calendar
13year that are available to offset a liability, the earlier
14credit shall be applied first. This Section is exempt from the
15provisions of Section 250 of this Act.
16    (i) An employer may claim a credit against payments due
17under this Article for the amount of credit awarded under
18Section 10 of the Illinois Quality Jobs Act. This Section is
19exempt from the provisions of Section 250 of this Act.
20(Source: P.A. 95-8, eff. 6-29-07; 95-707, eff. 1-11-08; 96-834,
21eff. 12-14-09; 96-888, eff. 4-13-10; 96-905, eff. 6-4-10;
2296-1027, eff. 7-12-10; revised 9-16-10.)