Illinois General Assembly - Full Text of SB0157
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Full Text of SB0157  102nd General Assembly

SB0157ham003 102ND GENERAL ASSEMBLY

Rep. Michael J. Zalewski

Filed: 4/8/2022

 

 


 

 


 
10200SB0157ham003LRB102 10128 HLH 39055 a

1
AMENDMENT TO SENATE BILL 157

2    AMENDMENT NO. ______. Amend Senate Bill 157, AS AMENDED,
3with reference to page and line numbers of House Amendment No.
42, on page 842, immediately below line 16, by inserting the
5following:
 
6
"ARTICLE 110. MICRO ACT

 
7    Section 110-1. Short title. This Article may be cited as
8the Manufacturing Illinois Chips for Real Opportunity (MICRO)
9Act. References in this Article to "this Act" mean this
10Article.
 
11    Section 110-5. Purpose. It is the intent of the General
12Assembly that Illinois should lead the nation in production of
13semiconductors and microchips as they become even more
14prevalent in everyday life. The General Assembly finds that,
15through investments in semiconductors and microchips, Illinois

 

 

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1will be on the forefront of reshoring semiconductor and
2microchip production that fuels modern technologies that are
3essential to the operation of computers, phones, vehicles and
4any electric product that have become essential to modern
5life. This Act will create good paying jobs, and generate
6long-term economic investment in the Illinois business
7economy, in addition to ensuring a vital product is made in the
8United States. Illinois must aggressively adopt new business
9development investment tools so that Illinois can compete with
10domestic and foreign competitors for semiconductor and chip
11manufacturing.
 
12    Section 110-10. Definitions. As used in this Act:
13    "Agreement" means the agreement between a taxpayer and the
14Department under the provisions of this Act.
15    "Applicant" means a taxpayer that: (i) operates a business
16in Illinois as a semiconductor manufacturer, a microchip
17manufacturer, or a manufacturer of semiconductor or microchip
18component parts; or (ii) is planning to locate a business
19within the State of Illinois as a semiconductor manufacturer,
20a microchip manufacturer, or a manufacturer of semiconductor
21or microchip component parts. "Applicant" does not include a
22taxpayer who closes or substantially reduces by more than 50%
23operations at one location in the State and relocates
24substantially the same operation to another location in the
25State. This does not prohibit a Taxpayer from expanding its

 

 

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1operations at another location in the State. This also does
2not prohibit a Taxpayer from moving its operations from one
3location in the State to another location in the State for the
4purpose of expanding the operation, provided that the
5Department determines that expansion cannot reasonably be
6accommodated within the municipality or county in which the
7business is located, or, in the case of a business located in
8an incorporated area of the county, within the county in which
9the business is located, after conferring with the chief
10elected official of the municipality or county and taking into
11consideration any evidence offered by the municipality or
12county regarding the ability to accommodate expansion within
13the municipality or county.
14    "Capital improvements" means the purchase, renovation,
15rehabilitation, or construction of permanent tangible land,
16buildings, structures, equipment, and furnishings in an
17approved project sited in Illinois and expenditures for goods
18or services that are normally capitalized, including
19organizational costs and research and development costs
20incurred in Illinois. For land, buildings, structures, and
21equipment that are leased, the lease must equal or exceed the
22term of the agreement, and the cost of the property shall be
23determined from the present value, using the corporate
24interest rate prevailing at the time of the application, of
25the lease payments.
26    "Credit" or "MICRO credit" means a credit agreed to

 

 

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1between the Department and applicant under this Act.
2    "Department" means the Department of Commerce and Economic
3Opportunity.
4    "Director" means the Director of Commerce and Economic
5Opportunity.
6    "Energy Transition Area" means a county with less than
7100,000 people or a municipality that contains one or more of
8the following:
9        (1) a fossil fuel plant that was retired from service
10    or has significant reduced service within 6 years before
11    the time of the application or will be retired or have
12    service significantly reduced within 6 years following the
13    time of the application; or
14        (2) a coal mine that was closed or had operations
15    significantly reduced within 6 years before the time of
16    the application or is anticipated to be closed or have
17    operations significantly reduced within 6 years following
18    the time of the application.
19    "Full-time employee" means an individual who is employed
20for consideration for at least 35 hours each week or who
21renders any other standard of service generally accepted by
22industry custom or practice as full-time employment. An
23individual for whom a W-2 is issued by a Professional Employer
24Organization (PEO) is a full-time employee if employed in the
25service of the applicant for consideration for at least 35
26hours each week.

 

 

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1    "Incremental income tax" means the total amount withheld
2during the taxable year from the compensation of new employees
3and, if applicable, retained employees under Article 7 of the
4Illinois Income Tax Act arising from employment at a project
5that is the subject of an agreement.
6    "Institution of higher education" or "institution" means
7any accredited public or private university, college,
8community college, business, technical, or vocational school,
9or other accredited educational institution offering degrees
10and instruction beyond the secondary school level.
11    "MICRO construction jobs credit" means a credit agreed to
12between the Department and the applicant under this Act that
13is based on the incremental income tax attributable to
14construction wages paid in connection with construction of the
15project facilities.
16    "MICRO credit" means a credit agreed to between the
17Department and the applicant under this Act that is based on
18the incremental income tax attributable to new employees and,
19if applicable, retained employees, and on training costs for
20such employees at the applicant's project.
21    "Microchip" means a wafer of semiconducting material that
22is less than 15 millimeters long and less than 5 millimeters
23wide and is used to make an integrated circuit.
24    "Microchip manufacturer" means a new or existing
25manufacturer that is focused on reequipping, expanding, or
26establishing a manufacturing facility in Illinois that

 

 

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1produces microchips or key components that directly support
2the functions of microchips.
3    "Minority person" means a minority person as defined in
4the Business Enterprise for Minorities, Women, and Persons
5with Disabilities Act.
6    "New employee" means a newly-hired full-time employee
7employed to work at the project site and whose work is directly
8related to the project.
9    "Noncompliance date" means, in the case of a taxpayer that
10is not complying with the requirements of the agreement or the
11provisions of this Act, the day following the last date upon
12which the taxpayer was in compliance with the requirements of
13the agreement and the provisions of this Act, as determined by
14the Director.
15    "Pass-through entity" means an entity that is exempt from
16the tax under subsection (b) or (c) of Section 205 of the
17Illinois Income Tax Act.
18    "Placed in service" means the state or condition of
19readiness, availability for a specifically assigned function,
20and the facility is constructed and ready to conduct its
21facility operations to manufacture goods.
22    "Professional employer organization" (PEO) means an
23employee leasing company, as defined in Section 206.1 of the
24Illinois Unemployment Insurance Act.
25    "Program" means the Manufacturing Illinois Chips for Real
26Opportunity (MICRO) program established in this Act.

 

 

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1    "Project" means a for-profit economic development activity
2for the manufacture of semiconductors and microchips.
3    "Related member" means a person that, with respect to the
4taxpayer during any portion of the taxable year, is any one of
5the following:
6        (1) An individual stockholder, if the stockholder and
7    the members of the stockholder's family (as defined in
8    Section 318 of the Internal Revenue Code) own directly,
9    indirectly, beneficially, or constructively, in the
10    aggregate, at least 50% of the value of the taxpayer's
11    outstanding stock.
12        (2) A partnership, estate, trust and any partner or
13    beneficiary, if the partnership, estate, or trust, and its
14    partners or beneficiaries own directly, indirectly,
15    beneficially, or constructively, in the aggregate, at
16    least 50% of the profits, capital, stock, or value of the
17    taxpayer.
18        (3) A corporation, and any party related to the
19    corporation in a manner that would require an attribution
20    of stock from the corporation under the attribution rules
21    of Section 318 of the Internal Revenue Code, if the
22    Taxpayer owns directly, indirectly, beneficially, or
23    constructively at least 50% of the value of the
24    corporation's outstanding stock.
25        (4) A corporation and any party related to that
26    corporation in a manner that would require an attribution

 

 

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1    of stock from the corporation to the party or from the
2    party to the corporation under the attribution rules of
3    Section 318 of the Internal Revenue Code, if the
4    corporation and all such related parties own in the
5    aggregate at least 50% of the profits, capital, stock, or
6    value of the taxpayer.
7        (5) A person to or from whom there is an attribution of
8    stock ownership in accordance with Section 1563(e) of the
9    Internal Revenue Code, except, for purposes of determining
10    whether a person is a related member under this paragraph,
11    20% shall be substituted for 5% wherever 5% appears in
12    Section 1563(e) of the Internal Revenue Code.
13    "Retained employee" means a full-time employee employed by
14the taxpayer prior to the term of the Agreement who continues
15to be employed during the term of the agreement whose job
16duties are directly and substantially related to the project.
17For purposes of this definition, "directly and substantially
18related to the project" means at least two-thirds of the
19employee's job duties must be directly related to the project
20and the employee must devote at least two-thirds of his or her
21time to the project. The term "retained employee" does not
22include any individual who has a direct or an indirect
23ownership interest of at least 5% in the profits, equity,
24capital, or value of the taxpayer or a child, grandchild,
25parent, or spouse, other than a spouse who is legally
26separated from the individual, of any individual who has a

 

 

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1direct or indirect ownership of at least 5% in the profits,
2equity, capital, or value of the taxpayer.
3    "Semiconductor" means any class of crystalline solids
4intermediate in electrical conductivity between a conductor
5and an insulator.
6    "Semiconductor manufacturer" means a new or existing
7manufacturer that is focused on reequipping, expanding, or
8establishing a manufacturing facility in Illinois that
9produces semiconductors or key components that directly
10support the functions of semiconductors.
11    "Statewide baseline" means the total number of full-time
12employees of the applicant and any related member employed by
13such entities at the time of application for incentives under
14this Act.
15    "Taxpayer" means an individual, corporation, partnership,
16or other entity that has a legal obligation to pay Illinois
17income taxes and file an Illinois income tax return.
18    "Training costs" means costs incurred to upgrade the
19technological skills of full-time employees in Illinois and
20includes: curriculum development; training materials
21(including scrap product costs); trainee domestic travel
22expenses; instructor costs (including wages, fringe benefits,
23tuition and domestic travel expenses); rent, purchase or lease
24of training equipment; and other usual and customary training
25costs. "Training costs" do not include costs associated with
26travel outside the United States (unless the Taxpayer receives

 

 

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1prior written approval for the travel by the Director based on
2a showing of substantial need or other proof the training is
3not reasonably available within the United States), wages and
4fringe benefits of employees during periods of training, or
5administrative cost related to Full-Time Employees of the
6Taxpayer.
7    "Underserved area" means any geographic areas as defined
8in Section 5-5 of the Economic Development for a Growing
9Economy Tax Credit Act.
 
10    Section 110-15. Powers of the Department. The Department,
11in addition to those powers granted under the Civil
12Administrative Code of Illinois, is granted and shall have all
13the powers necessary or convenient to administer the program
14under this Act and to carry out and effectuate the purposes and
15provisions of this Act, including, but not limited to, the
16power and authority to:
17        (1) adopt rules deemed necessary and appropriate for
18    the administration of the program, the designation of
19    projects, and the awarding of credits;
20        (2) establish forms for applications, notifications,
21    contracts, or any other agreements and accept applications
22    at any time during the year;
23        (3) assist taxpayers pursuant to the provisions of
24    this Act and cooperate with taxpayers that are parties to
25    agreements under this Act to promote, foster, and support

 

 

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1    economic development, capital investment, and job creation
2    or retention within the State;
3        (4) enter into agreements and memoranda of
4    understanding for participation of, and engage in
5    cooperation with, agencies of the federal government,
6    units of local government, universities, research
7    foundations or institutions, regional economic development
8    corporations, or other organizations to implement the
9    requirements and purposes of this Act;
10        (5) gather information and conduct inquiries, in the
11    manner and by the methods it deems desirable, including
12    without limitation, gathering information with respect to
13    applicants for the purpose of making any designations or
14    certifications necessary or desirable or to gather
15    information to assist the Department with any
16    recommendation or guidance in the furtherance of the
17    purposes of this Act;
18        (6) establish, negotiate and effectuate agreements and
19    any term, agreement, or other document with any person,
20    necessary or appropriate to accomplish the purposes of
21    this Act; and to consent, subject to the provisions of any
22    agreement with another party, to the modification or
23    restructuring of any agreement to which the Department is
24    a party;
25        (7) fix, determine, charge, and collect any premiums,
26    fees, charges, costs, and expenses from applicants,

 

 

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1    including, without limitation, any application fees,
2    commitment fees, program fees, financing charges, or
3    publication fees as deemed appropriate to pay expenses
4    necessary or incident to the administration, staffing, or
5    operation in connection with the Department's activities
6    under this Act, or for preparation, implementation, and
7    enforcement of the terms of the agreement, or for
8    consultation, advisory and legal fees, and other costs;
9    however, all fees and expenses incident thereto shall be
10    the responsibility of the applicant;
11        (8) provide for sufficient personnel to permit
12    administration, staffing, operation, and related support
13    required to adequately discharge its duties and
14    responsibilities described in this Act from funds made
15    available through charges to applicants or from funds as
16    may be appropriated by the General Assembly for the
17    administration of this Act;
18        (9) require applicants, upon written request, to issue
19    any necessary authorization to the appropriate federal,
20    State, or local authority for the release of information
21    concerning a project being considered under the provisions
22    of this Act, with the information requested to include,
23    but not be limited to, financial reports, returns, or
24    records relating to the taxpayer or its project;
25        (10) require that a taxpayer shall at all times keep
26    proper books of record and account in accordance with

 

 

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1    generally accepted accounting principles consistently
2    applied, with the books, records, or papers related to the
3    agreement in the custody or control of the taxpayer open
4    for reasonable Department inspection and audits, and
5    including, without limitation, the making of copies of the
6    books, records, or papers, and the inspection or appraisal
7    of any of the taxpayer or project assets;
8        (11) take whatever actions are necessary or
9    appropriate to protect the State's interest in the event
10    of bankruptcy, default, foreclosure, or noncompliance with
11    the terms and conditions of financial assistance or
12    participation required under this Act, including the power
13    to sell, dispose, lease, or rent, upon terms and
14    conditions determined by the Director to be appropriate,
15    real or personal property that the Department may receive
16    as a result of these actions.
 
17    Section 110-20. Manufacturing Illinois Chips for Real
18Opportunity (MICRO) Program; project applications.
19    (a) The Manufacturing Illinois Chips for Real Opportunity
20(MICRO) Program is hereby established and shall be
21administered by the Department. The Program will provide
22financial incentives to eligible semiconductor manufacturers
23and microchip manufacturers.
24    (b) Any taxpayer planning a project to be located in
25Illinois may request consideration for designation of its

 

 

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1project as a MICRO project, by formal written letter of
2request or by formal application to the Department, in which
3the applicant states its intent to make at least a specified
4level of investment and intends to hire a specified number of
5full-time employees at a designated location in Illinois. As
6circumstances require, the Department shall require a formal
7application from an applicant and a formal letter of request
8for assistance.
9    (c) In order to qualify for credits under the program, an
10Applicant must:
11        (1) for a semiconductor manufacturer or microchip
12    manufacturer:
13            (A) make an investment of at least $1,500,000,000
14        in capital improvements at the project site;
15            (B) to be placed in service within the State
16        within a 60-month period after approval of the
17        application; and
18            (C) create at least 500 new full-time employee
19        jobs; or
20        (2) for a semiconductor or microchip component parts
21    manufacturer:
22            (A) make an investment of at least $300,000,000 in
23        capital improvements at the project site;
24            (B) manufacture one or more parts that are
25        primarily used for the manufacture of semiconductors
26        or microchips;

 

 

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1            (C) to be placed in service within the State
2        within a 60-month period after approval of the
3        application; and
4            (D) create at least 150 new full-time employee
5        jobs; or
6        (3) for a semiconductor manufacturer or microchip
7    manufacturer or a semiconductor or microchip component
8    parts manufacturer that does not quality under paragraph
9    (2) above:
10            (A) make an investment of at least $20,000,000 in
11        capital improvements at the project site;
12            (B) to be placed in service within the State
13        within a 48-month period after approval of the
14        application; and
15            (C) create at least 50 new full-time employee
16        jobs; or
17        (4) for a semiconductor manufacturer or microchip
18    manufacturer or a semiconductor or microchip component
19    parts manufacturer with existing operations in Illinois
20    that intends to convert or expand, in whole or in part, the
21    existing facility from traditional manufacturing to
22    semiconductor manufacturing or microchip manufacturing or
23    semiconductor or microchip component parts manufacturing:
24            (A) make an investment of at least $100,000,000 in
25        capital improvements at the project site;
26            (B) to be placed in service within the State

 

 

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1        within a 60-month period after approval of the
2        application; and
3            (C) create the lesser of 75 new full-time employee
4        jobs or new full-time employee jobs equivalent to 10%
5        of the Statewide baseline applicable to the taxpayer
6        and any related member at the time of application.
7    (d) For any applicant creating the full-time employee jobs
8noted in subsection (c), those jobs must have a total
9compensation equal to or greater than 120% of the average wage
10paid to full-time employees in the county where the project is
11located, as determined by the U.S. Bureau of Labor Statistics.
12    (e) Each applicant must outline its hiring plan and
13commitment to recruit and hire full-time employee positions at
14the project site. The hiring plan may include a partnership
15with an institution of higher education to provide
16internships, including, but not limited to, internships
17supported by the Clean Jobs Workforce Network Program, or
18full-time permanent employment for students at the project
19site. Additionally, the applicant may create or utilize
20participants from apprenticeship programs that are approved by
21and registered with the United States Department of Labor's
22Bureau of Apprenticeship and Training. The Applicant may apply
23for apprenticeship education expense credits in accordance
24with the provisions set forth in 14 Ill. Admin. Code 522. Each
25applicant is required to report annually, on or before April
2615, on the diversity of its workforce in accordance with

 

 

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1Section 110-50 of this Act. For existing facilities of
2applicants under paragraph (3) of subsection (b) above, if the
3taxpayer expects a reduction in force due to its transition to
4manufacturing semiconductors, microchips, or semiconductor or
5microchip component parts, the plan submitted under this
6Section must outline the taxpayer's plan to assist with
7retraining its workforce aligned with the taxpayer's adoption
8of new technologies and anticipated efforts to retrain
9employees through employment opportunities within the
10taxpayer's workforce.
11    (f) A taxpayer may not enter into more than one agreement
12under this Act with respect to a single address or location for
13the same period of time. Also, a taxpayer may not enter into an
14agreement under this Act with respect to a single address or
15location for the same period of time for which the taxpayer
16currently holds an active agreement under the Economic
17Development for a Growing Economy Tax Credit Act. This
18provision does not preclude the applicant from entering into
19an additional agreement after the expiration or voluntary
20termination of an earlier agreement under this Act or under
21the Economic Development for a Growing Economy Tax Credit Act
22to the extent that the taxpayer's application otherwise
23satisfies the terms and conditions of this Act and is approved
24by the Department. An applicant with an existing agreement
25under the Economic Development for a Growing Economy Tax
26Credit Act may submit an application for an agreement under

 

 

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1this Act after it terminates any existing agreement under the
2Economic Development for a Growing Economy Tax Credit Act with
3respect to the same address or location.
 
4    Section 110-25. Review of application. The Department
5shall determine which projects will benefit the State. In
6making its recommendation that an applicant's application for
7credit should or should not be accepted, which shall occur
8within a reasonable time frame as determined by the nature of
9the application, the Department shall determine that all the
10following conditions exist:
11        (1) the applicant intends to make the required
12    investment in the State and intends to hire the required
13    number of full-time employees;
14        (2) the applicant's project is economically sound,
15    will benefit the people of the State by increasing
16    opportunities for employment, and will strengthen the
17    economy of the State;
18        (3) awarding the credit will result in an overall
19    positive fiscal impact to the State, as certified by the
20    Department using the best available data; and
21        (4) the credit is not prohibited under this Act.
 
22    Section 110-30. Tax credit awards.
23    (a) Subject to the conditions set forth in this Act, a
24taxpayer is entitled to a credit against the tax imposed

 

 

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1pursuant to subsections (a) and (b) of Section 201 of the
2Illinois Income Tax Act for a taxable year beginning on or
3after January 1, 2025 if the taxpayer is awarded a credit by
4the Department in accordance with an agreement under this Act.
5The Department has authority to award credits under this Act
6on and after January 1, 2023.
7    (b) A taxpayer may receive a tax credit against the tax
8imposed under subsections (a) and (b) of Section 201 of the
9Illinois Income Tax Act, not to exceed the sum of (i) 75% of
10the incremental income tax attributable to new employees at
11the applicant's project and (ii) 10% of the training costs of
12the new employees. If the project is located in an underserved
13area or an energy transition area, then the amount of the
14credit may not exceed the sum of (i) 100% of the incremental
15income tax attributable to new employees at the applicant's
16project; and (ii) 10% of the training costs of the new
17employees. The percentage of training costs includable in the
18calculation may be increased by an additional 15% for training
19costs associated with new employees that are recent (2 years
20or less) graduates, certificate holders, or credential
21recipients from an institution of higher education in
22Illinois, or, if the training is provided by an institution of
23higher education in Illinois, the Clean Jobs Workforce Network
24Program, or an apprenticeship and training program located in
25Illinois and approved by and registered with the United States
26Department of Labor's Bureau of Apprenticeship and Training.

 

 

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1An applicant is also eligible for a training credit that shall
2not exceed 10% of the training costs of retained employees for
3the purpose of upskilling to meet the operational needs of the
4applicant or the project. The percentage of training costs
5includable in the calculation shall not exceed a total of 25%.
6If an applicant agrees to hire the required number of new
7employees, then the maximum amount of the credit for that
8applicant may be increased by an amount not to exceed 25% of
9the incremental income tax attributable to retained employees
10at the applicant's project; provided that, in order to receive
11the increase for retained employees, the applicant must, if
12applicable, meet or exceed the statewide baseline. If the
13Project is in an underserved area or an energy transition
14area, the maximum amount of the credit attributable to
15retained employees for the applicant may be increased to an
16amount not to exceed 50% of the incremental income tax
17attributable to retained employees at the applicant's project;
18provided that, in order to receive the increase for retained
19employees, the applicant must meet or exceed the statewide
20baseline. Credits awarded may include credit earned for
21incremental income tax withheld and training costs incurred by
22the taxpayer beginning on or after January 1, 2023. Credits so
23earned and certified by the Department may be applied against
24the tax imposed by subsections (a) and (b) of Section 201 of
25the Illinois Income Tax Act for taxable years beginning on or
26after January 1, 2025.

 

 

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1    (c) MICRO Construction Jobs Credit. For construction wages
2associated with a project that qualified for a credit under
3subsection (b), the taxpayer may receive a tax credit against
4the tax imposed under subsections (a) and (b) of Section 201 of
5the Illinois Income Tax Act in an amount equal to 50% of the
6incremental income tax attributable to construction wages paid
7in connection with construction of the project facilities, as
8a jobs credit for workers hired to construct the project.
9    The MICRO Construction Jobs Credit may not exceed 75% of
10the amount of the incremental income tax attributable to
11construction wages paid in connection with construction of the
12project facilities if the project is in an underserved area or
13an energy transition area.
14    (d) The Department shall certify to the Department of
15Revenue: (1) the identity of Taxpayers that are eligible for
16the MICRO Credit and MICRO Construction Jobs Credit; (2) the
17amount of the MICRO Credits and MICRO Construction Jobs
18Credits awarded in each calendar year; and (3) the amount of
19the MICRO Credit and MICRO Construction Jobs Credit claimed in
20each calendar year. MICRO Credits awarded may include credit
21earned for Incremental Income Tax withheld and Training Costs
22incurred by the Taxpayer beginning on or after January 1,
232023. Credits so earned and certified by the Department may be
24applied against the tax imposed by Section 201(a) and (b) of
25the Illinois Income Tax Act for taxable years beginning on or
26after January 1, 2025.

 

 

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1    (e) Applicants seeking certification for a tax credits
2related to the construction of the project facilities in the
3State shall require the contractor to enter into a project
4labor agreement that conforms with the Project Labor
5Agreements Act.
6    (f) Any applicant issued a certificate for a tax credit or
7tax exemption under this Act must annually report to the
8Department the total project tax benefits received. Reports
9are due no later than May 31 of each year and shall cover the
10previous calendar year. The first report is for the 2023
11calendar year and is due no later than May 31, 2023.
12    (g) Nothing in this Act shall prohibit an award of credit
13to an applicant that uses a PEO if all other award criteria are
14satisfied.
15    (h) With respect to any portion of a Credit that is based
16on the incremental income tax attributable to new employees or
17retained employees, in lieu of the Credit allowed under this
18Act against the taxes imposed pursuant to subsections (a) and
19(b) of Section 201 of the Illinois Income Tax Act, a taxpayer
20that otherwise meets the criteria set forth in this Section,
21the taxpayer may elect to claim the credit, on or after January
221, 2025, against its obligation to pay over withholding under
23Section 704A of the Illinois Income Tax Act. The election
24shall be made in the manner prescribed by the Department of
25Revenue and once made shall be irrevocable.
 

 

 

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1    Section 110-35. Relocation of jobs in Illinois. A taxpayer
2is not entitled to claim a credit provided by this Act with
3respect to any jobs that the Taxpayer relocates from one site
4in Illinois to another site in Illinois. Any full-time
5employee relocated to Illinois in connection with a qualifying
6project is deemed to be a new employee for purposes of this
7Act. Determinations under this Section shall be made by the
8Department.
 
9    Section 110-40. Amount and duration of the credits;
10limitation to amount of costs of specified items. The
11Department shall determine the amount and duration of the
12credit awarded under this Act, subject to the limitations set
13forth in this Act. For a project that qualified under
14paragraph (1), (2), or (4) of subsection (c) of Section
15110-20, the duration of the credit may not exceed 15 taxable
16years. For project that qualified under paragraph (3) of
17subsection (c) of Section 110-20, the duration of the credit
18may not exceed 10 taxable years. The credit may be stated as a
19percentage of the incremental income tax and training costs
20attributable to the applicant's project and may include a
21fixed dollar limitation.
22    Nothing in this Section shall prevent the Department, in
23consultation with the Department of Revenue, from adopting
24rules to extend the sunset of any earned, existing, and unused
25tax credit or credits a taxpayer may be in possession of.
 

 

 

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1    Section 110-45. Contents of agreements with applicants.
2    (a) The Department shall enter into an agreement with an
3applicant that is awarded a credit under this Act. The
4agreement shall include all of the following:
5        (1) A detailed description of the project that is the
6    subject of the agreement, including the location and
7    amount of the investment and jobs created or retained.
8        (2) The duration of the credit, the first taxable year
9    for which the credit may be awarded, and the first taxable
10    year in which the credit may be used by the taxpayer.
11        (3) The credit amount that will be allowed for each
12    taxable year.
13        (4) For a project qualified under paragraphs (1), (2),
14    or (4) of subsection (c) of Section 110-20, a requirement
15    that the taxpayer shall maintain operations at the project
16    location a minimum number of years not to exceed 15. For
17    project qualified under paragraph (3) of subsection (c) of
18    Section 110-20, a requirement that the taxpayer shall
19    maintain operations at the project location a minimum
20    number of years not to exceed 10.
21        (5) A specific method for determining the number of
22    new employees and, if applicable, retained employees,
23    employed during a taxable year.
24        (6) A requirement that the taxpayer shall annually
25    report to the Department the number of new employees, the

 

 

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1    incremental income tax withheld in connection with the new
2    employees, and any other information the Department deems
3    necessary and appropriate to perform its duties under this
4    Act.
5        (7) A requirement that the Director is authorized to
6    verify with the appropriate State agencies the amounts
7    reported under paragraph (6), and after doing so shall
8    issue a certificate to the taxpayer stating that the
9    amounts have been verified.
10        (8) A requirement that the taxpayer shall provide
11    written notification to the Director not more than 30 days
12    after the taxpayer makes or receives a proposal that would
13    transfer the taxpayer's State tax liability obligations to
14    a successor taxpayer.
15        (9) A detailed description of the number of new
16    employees to be hired, and the occupation and payroll of
17    full-time jobs to be created or retained because of the
18    project.
19        (10) The minimum investment the taxpayer will make in
20    capital improvements, the time period for placing the
21    property in service, and the designated location in
22    Illinois for the investment.
23        (11) A requirement that the taxpayer shall provide
24    written notification to the Director and the Director's
25    designee not more than 30 days after the taxpayer
26    determines that the minimum job creation or retention,

 

 

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1    employment payroll, or investment no longer is or will be
2    achieved or maintained as set forth in the terms and
3    conditions of the agreement. Additionally, the
4    notification should outline to the Department the number
5    of layoffs, date of the layoffs, and detail taxpayer's
6    efforts to provide career and training counseling for the
7    impacted workers with industry-related certifications and
8    trainings.
9        (12) A provision that, if the total number of new
10    employees falls below a specified level, the allowance of
11    credit shall be suspended until the number of new
12    employees equals or exceeds the agreement amount.
13        (13) If applicable, a provision that specifies the
14    statewide baseline at the time of application for retained
15    employees. Additionally, the agreement must have a
16    provision addressing if the total number retained
17    employees falls below the statewide baseline, the
18    allowance of the credit shall be suspended until the
19    number of retained employees equals or exceeds the
20    agreement amount.
21        (14) A detailed description of the items for which the
22    costs incurred by the Taxpayer will be included in the
23    limitation on the Credit.
24        (15) A provision stating that if the taxpayer fails to
25    meet either the investment or job creation and retention
26    requirements specified in the agreement during the entire

 

 

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1    5-year period beginning on the first day of the first
2    taxable year in which the agreement is executed and ending
3    on the last day of the fifth taxable year after the
4    agreement is executed, then the agreement is automatically
5    terminated on the last day of the fifth taxable year after
6    the agreement is executed, and the taxpayer is not
7    entitled to the award of any credits for any of that 5-year
8    period.
9        (16) A provision stating that if the taxpayer ceases
10    principal operations with the intent to permanently shut
11    down the project in the State during the term of the
12    Agreement, then the entire credit amount awarded to the
13    taxpayer prior to the date the taxpayer ceases principal
14    operations shall be returned to the Department and shall
15    be reallocated to the local workforce investment area in
16    which the project was located.
17        (17) A provision stating that the Taxpayer must
18    provide the reports outlined in Sections 110-50 and 110-55
19    on or before April 15 each year.
20        (18) A provision requiring the taxpayer to report
21    annually its contractual obligations or otherwise with a
22    recycling facility for its operations.
23        (19) Any other performance conditions or contract
24    provisions the Department determines are necessary or
25    appropriate.
26        (20) Each taxpayer under paragraph (1) of subsection

 

 

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1    (c) of Section 110-20 above shall maintain labor
2    neutrality toward any union organizing campaign for any
3    employees of the taxpayer assigned to work on the premises
4    of the project. This paragraph shall not apply to a
5    manufacturer who is subject to collective bargaining
6    agreement entered into prior to the taxpayer filing an
7    application pursuant to this Act.
8    (b) The Department shall post on its website the terms of
9each agreement entered into under this Act. Such information
10shall be posted within 10 days after entering into the
11agreement and must include the following:
12        (1) the name of the taxpayer;
13        (2) the location of the project;
14        (3) the estimated value of the credit;
15        (4) the number of new employee jobs and, if
16    applicable, number of retained employee jobs at the
17    project; and
18        (5) whether or not the project is in an underserved
19    area or energy transition area.
 
20    Section 110-50. Diversity report on the taxpayer's
21workforce, board of directors, and vendors.
22    (a) Each taxpayer with a workforce of 100 or more
23employees and with an agreement for a credit under this Act
24shall, starting on April 15, 2026, and every year thereafter
25prior to April 15, for which the Taxpayer has an Agreement

 

 

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1under this Act, submit to the Department an annual report
2detailing the diversity of the taxpayer's own workforce,
3including full-time and part-time employees, contractors, and
4board of directors' membership. Any taxpayer seeking to claim
5a credit under this Act that fails to timely submit the
6required report shall not receive a credit for that taxable
7year unless and until such report is finalized and submitted
8to the Department. The report should also address the
9Taxpayer's best efforts to meet or exceed the recruitment and
10hiring plan outlined in the application referenced in Section
11110-20. Those reports shall be submitted in the form and
12manner required by the Department.
13    (b) Vendor diversity and annual report. Each taxpayer with
14a workforce of 100 or more full-time employees shall, starting
15on April 15, 2025 and every year thereafter for which the
16taxpayer has an Agreement under this Act, report on the
17diversity of the vendors that it utilizes, for publication on
18the Department's website, and include the following
19information:
20        (1) a point of contact for potential vendors to
21    register with the taxpayer's project;
22        (2) certifications that the taxpayer accepts or
23    recognizes for minority and women-owned businesses as
24    entities;
25        (3) the taxpayer's goals to contract with diverse
26    vendors, if any, for the next fiscal year for the entire

 

 

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1    budget of the taxpayer's project;
2        (4) for the last fiscal year, the actual contractual
3    spending for the entire budget of the project and the
4    actual spending for minority-owned businesses and
5    women-owned businesses, expressed as a percentage of the
6    total budget for actual spending for the project;
7        (5) a narrative explaining the results of the report
8    and the taxpayer's plan to address the voluntary goals for
9    the next fiscal year; and
10        (6) a copy of the taxpayer's submission of vendor
11    diversity information to the federal government, including
12    but not limited to vendor diversity goals and actual
13    contractual spending for minority-and women-owned
14    businesses, if the Taxpayer is a federal contractor and is
15    required by the federal government to submit such
16    information.
 
17    Section 110-55. Sexual harassment policy report. Each
18taxpayer claiming a credit under this Act shall, prior to
19April 15 of each taxable year for which the taxpayer claims a
20credit under this Act, submit to the Department a report
21detailing that taxpayer's sexual harassment policy, which
22contains, at a minimum, the following information: (i) the
23illegality of sexual harassment; (ii) the definition of sexual
24harassment under State law; (iii) a description of sexual
25harassment, utilizing examples; (iv) the vendor's internal

 

 

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1complaint process, including penalties; (v) the legal recourse
2and investigative and complaint processes available through
3the Department; (vi) directions on how to contact the
4Department; and (vii) protection against retaliation as
5provided by Section 6-101 of the Illinois Human Rights Act. A
6copy of the policy shall be provided to the Department upon
7request. The reports required under this Section shall be
8submitted in a form and manner determined by the Department.
 
9    Section 110-60. Certificate of verification; submission to
10the Department of Revenue.
11    (a) A taxpayer claiming a credit under this Act shall
12submit to the Department of Revenue a copy of the Director's
13certificate of verification under this Act for the taxable
14year. However, failure to submit a copy of the certificate
15with the taxpayer's tax return shall not invalidate a claim
16for a credit.
17    (b) For a taxpayer to be eligible for a certificate of
18verification, the taxpayer shall provide proof as required by
19the Department, prior to the end of each calendar year,
20including, but not limited to, attestation by the taxpayer
21that:
22        (1) The project has achieved the level of new employee
23    jobs specified in the agreement.
24        (2) The project has achieved the level of annual
25    payroll in Illinois specified in its agreement.

 

 

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1        (3) The project has achieved the level of capital
2    improvements in Illinois specified in its agreement.
 
3    Section 110-65. Certified payroll.
4    (a) Each contractor and subcontractor that is engaged in
5construction work on project facilities for a taxpayer who
6seeks to apply for a MICRO Construction Jobs Credit shall:
7        (1) make and keep, for a period of 5 years from the
8    date of the last payment made on a contract or subcontract
9    for construction of facilities for a project pursuant to
10    an agreement, records of all laborers and other workers
11    employed by the contractor or subcontractor on the
12    project; the records shall include:
13            (A) the worker's name;
14            (B) the worker's address;
15            (C) the worker's telephone number, if available;
16            (D) the worker's social security number;
17            (E) the worker's classification or
18        classifications;
19            (F) the worker's gross and net wages paid in each
20        pay period;
21            (G) the worker's number of hours worked in each
22        day;
23            (H) the worker's starting and ending times of work
24        each day;
25            (I) the worker's hourly wage rate; and

 

 

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1            (J) the worker's hourly overtime wage rate; and
2        (2) no later than the 15th day of each calendar month,
3    provide a certified payroll for the immediately preceding
4    month to the taxpayer in charge of the project; within 5
5    business days after receiving the certified payroll, the
6    Taxpayer shall file the certified payroll with the
7    Department of Labor and the Department; a certified
8    payroll must be filed for only those calendar months
9    during which construction on the project facilities has
10    occurred; the certified payroll shall consist of a
11    complete copy of the records identified in paragraph (1),
12    but may exclude the starting and ending times of work each
13    day; the certified payroll shall be accompanied by a
14    statement signed by the contractor or subcontractor or an
15    officer, employee, or agent of the contractor or
16    subcontractor which avers that:
17            (A) he or she has examined the certified payroll
18        records required to be submitted by the Act and such
19        records are true and accurate; and
20            (B) the contractor or subcontractor is aware that
21        filing a certified payroll that he or she knows to be
22        false is a Class A misdemeanor.
23    A general contractor is not prohibited from relying on a
24certified payroll of a lower-tier subcontractor, provided the
25general contractor does not knowingly rely upon a
26subcontractor's false certification.

 

 

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1    (b) Any contractor or subcontractor subject to this
2Section, and any officer, employee, or agent of such
3contractor or subcontractor whose duty as an officer,
4employee, or agent it is to file a certified payroll under this
5Section, who willfully fails to file such a certified payroll,
6on or before the date such certified payroll is required to be
7filed and any person who willfully files a false certified
8payroll as to any material fact is in violation of this Act and
9guilty of a Class A misdemeanor and may be enforced by the
10Illinois Department of Labor or the Department. The Attorney
11General shall represented the Illinois Department of Labor or
12the Department in the proceeding.
13    (c) The taxpayer in charge of the project shall keep the
14records submitted in accordance with this Section for a period
15of 5 years from the date of the last payment for work on a
16contract or subcontract for the project.
17    (d) The records submitted in accordance with this Section
18shall be considered public records, except an employee's
19address, telephone number, and social security number, which
20shall be redacted. The records shall be made publicly
21available in accordance with the Freedom of Information Act.
22The contractor or subcontractor shall submit reports to the
23Department of Labor electronically that meet the requirements
24of this subsection and shall share the information with the
25Department to comply with the awarding of the MICRO
26Construction Jobs Credit. A contractor, subcontractor, or

 

 

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1public body may retain records required under this Section in
2paper or electronic format.
3    (e) Upon 7 business days' notice, the contractor and each
4subcontractor shall make available for inspection and copying
5at a location within this State during reasonable hours, the
6records identified in paragraph (1) of this subsection to the
7Taxpayer in charge of the Project, its officers and agents,
8the Director of the Department of Labor and his/her deputies
9and agents, and to federal, State, or local law enforcement
10agencies and prosecutors.
 
11    Section 110-70. Noncompliance; notice; assessment. If the
12Director determines that a taxpayer who has received a credit
13under this Act is not complying with the requirements of the
14agreement or all of the provisions of this Act, the Director
15shall provide notice to the taxpayer of the alleged
16noncompliance and allow the taxpayer a hearing under the
17provisions of the Illinois Administrative Procedure Act. If,
18after such notice and any hearing, the Director determines
19that a noncompliance exists, the Director shall issue to the
20Department of Revenue notice to that effect, stating the
21noncompliance date. If, during the term of an agreement, the
22taxpayer ceases operations at a project location that is the
23subject of that agreement with the intent to terminate
24operations in the State, the Department and the Department of
25Revenue shall recapture from the taxpayer the entire credit

 

 

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1amount awarded under that agreement prior to the date the
2taxpayer ceases operations. The Department shall, subject to
3appropriation, reallocate the recaptured amounts within 6
4months to the local workforce investment area in which the
5project was located for purposes of workforce development,
6expanded opportunities for unemployed persons, and expanded
7opportunities for women and minority persons in the workforce.
8The taxpayer will be ineligible for future funding under other
9State tax credit or exemption programs for a 36-month period.
10Noncompliance of the agreement with result in a default of
11other agreements for State tax credits and exemption programs
12for the project.
 
13    Section 110-75. Annual report.
14    (a) On or before July 1 each year, the Department shall
15submit a report on the tax credit program under this Act to the
16Governor and the General Assembly. The report shall include
17information on the number of agreements that were entered into
18under this Act during the preceding calendar year, a
19description of the project that is the subject of each
20agreement, an update on the status of projects under
21agreements entered into before the preceding calendar year,
22and the sum of the credits awarded under this Act. A copy of
23the report shall be delivered to the Governor and to each
24member of the General Assembly.
25    (b) The report must include, for each agreement:

 

 

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1        (1) the original estimates of the value of the credit
2    and the number of new employee jobs to be created and, if
3    applicable, the number of retained employee jobs;
4        (2) any relevant modifications to existing agreements;
5        (3) a statement of the progress made by each taxpayer
6    in meeting the terms of the original agreement;
7        (4) a statement of wages paid to new employees and, if
8    applicable, retained employees in the State; and
9        (5) a copy of the original agreement or link to the
10    agreement on the Department's website.
 
11    Section 110-80. Evaluation of tax credit program. The
12Department shall evaluate the tax credit program every three
13years and issue a report. The evaluation shall include an
14assessment of the effectiveness of the program in creating new
15jobs in Illinois and of the revenue impact of the program and
16may include a review of the practices and experiences of other
17states with similar programs. The Director shall submit a
18report on the evaluation to the Governor and the General
19Assembly three years after the Effective Date of the Act and
20every three years thereafter.
 
21    Section 110-85. Sunset of new agreements. The Department
22shall not enter into any new Agreements under the provisions
23of this Act after December 31, 2028.
 

 

 

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1    Section 110-95. Utility tax exemptions for MICRO projects.
2The Department may certify a taxpayer with a credit for a
3project that meets the qualifications under paragraphs (1),
4(2), and (4) of subsection (c) of Section 110-20, subject to an
5agreement under this Act, for an exemption from the tax
6imposed at the project site by Section 2-4 of the Electricity
7Excise Tax Law. To receive such certification, the taxpayer
8must be registered to self-assess that tax. The taxpayer is
9also exempt from any additional charges added to the
10taxpayer's utility bills at the project site as a pass-on of
11State utility taxes under Section 9-222 of the Public
12Utilities Act. The taxpayer must meet any other the criteria
13for certification set by the Department.
14    The Department shall determine the period during which the
15exemption from the Electricity Excise Tax Law and the charges
16imposed under Section 9-222 of the Public Utilities Act are in
17effect, which shall not exceed 10 years from the date of the
18taxpayer's initial receipt of certification from the
19Department under this Section.
20    The Department is authorized to adopt rules to carry out
21the provisions of this Section, including procedures to apply
22for the exemptions; to define the amounts and types of
23eligible investments that an applicant must make in order to
24receive electricity excise tax exemptions or exemptions from
25the additional charges imposed under Section 9-222 and the
26Public Utilities Act; to approve such electricity excise tax

 

 

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1exemptions for applicants whose investments are not yet placed
2in service; and to require that an applicant granted an
3electricity excise tax exemption or an exemption from
4additional charges under Section 9-222 of the Public Utilities
5Act repay the exempted amount if the Applicant fails to comply
6with the terms and conditions of the agreement.
7    Upon certification by the Department under this Section,
8the Department shall notify the Department of Revenue of the
9certification. The Department of Revenue shall notify the
10public utilities of the exempt status of any taxpayer
11certified for exemption under this Act from the electricity
12excise tax or pass-on charges. The exemption status shall take
13effect within 3 months after certification of the taxpayer and
14notice to the Department of Revenue by the Department.
 
15    Section 110-100. Investment tax credits for MICRO
16projects. Subject to the conditions set forth in this Act, a
17Taxpayer is entitled to an investment tax credit toward taxes
18imposed pursuant to subsections (a) and (b) of Section 201 of
19the Illinois Income Tax Act for a taxable year in which the
20Taxpayer, in accordance with an Agreement under this Act for
21that taxable year, invests in qualified property which is
22placed in service at the site of a project. The Department has
23authority to certify the amount of such investment tax credits
24to the Department of Revenue. The credit shall be 0.5% of the
25basis for such property and shall be determined in accordance

 

 

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1with Section 239 of the Illinois Income Tax Act. The credit
2shall be available only in the taxable year in which the
3property is placed in service and shall not be allowed to the
4extent that it would reduce a taxpayer's liability for the tax
5imposed by subsections (a) and (b) of Section 201 of the
6Illinois Income Tax Act to below zero. Unused credit may be
7carried forward in accordance with Section 239 of the Illinois
8Income Tax Act for use in future taxable years. Any taxpayer
9qualifying for the Investment Tax Credit shall not be eligible
10for either the investment tax credits in Section 201(e), (f),
11or (h) of the Illinois Income Tax Act.
 
12    Section 110-105. Building materials exemptions for project
13sites.
14    (a) The Department may certify a Taxpayer with a project
15that meets the qualifications under paragraphs (1), (2), or
16(4) of subsection (c) of Section 110-20, subject to an
17agreement under this Act, for an exemption from any State or
18local use tax or retailers' occupation tax on building
19materials for the construction of its project facilities. The
20taxpayer must meet any criteria for certification set by the
21Department under this Act.
22    The Department shall determine the period during which the
23exemption from State and local use tax and retailers'
24occupation tax are in effect, but in no event shall exceed 5
25years in accordance with Section 5m of the Retailers'

 

 

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1Occupation Tax Act.
2    The Department is authorized to promulgate rules and
3regulations to carry out the provisions of this Section,
4including procedures to apply for the exemption; to define the
5amounts and types of eligible investments that an applicant
6must make in order to receive tax exemption; to approve such
7tax exemption for an applicant whose investments are not yet
8placed in service; and to require that an applicant granted
9exemption repay the exempted amount if the applicant fails to
10comply with the terms and conditions of the agreement with the
11Department.
12    Upon certification by the Department under this Section,
13the Department shall notify the Department of Revenue of the
14certification. The exemption status shall take effect within 3
15months after certification of the taxpayer and notice to the
16Department of Revenue by the Department.
 
17    Section 110-905. The Illinois Income Tax Act is amended by
18changing Section 704A and by adding Sections 238 and 239 as
19follows:
 
20    (35 ILCS 5/238 new)
21    Sec. 238. MICRO credits.
22(a) For tax years beginning on or after January 1, 2025, a
23taxpayer who has entered into an agreement under the
24Manufacturing Illinois Chips for Real Opportunity (MICRO) Act

 

 

10200SB0157ham003- 42 -LRB102 10128 HLH 39055 a

1is entitled to a credit against the taxes imposed under
2subsections (a) and (b) of Section 201 of this Act in an amount
3to be determined in the Agreement. The taxpayer may elect to
4claim the credit, on or after January 1, 2026, against its
5obligation to pay over withholding under Section 704A of this
6Act as provided in this Section. If the taxpayer is a
7partnership or Subchapter S corporation, the credit shall be
8allowed to the partners or shareholders in accordance with the
9determination of income and distributive share of income under
10Sections 702 and 704 and subchapter S of the Internal Revenue
11Code. The Department, in cooperation with the Department of
12Commerce and Economic Opportunity, shall adopt rules to
13enforce and administer the provisions of this Section. This
14Section is exempt from the provisions of Section 250 of this
15Act.
16    (b) The credit is subject to the conditions set forth in
17the agreement and the following limitations:
18        (1) The tax credit may be in the form of either or both
19    the MICRO Illinois Credit or the MICRO Construction Jobs
20    Credit and shall not exceed the percentage of incremental
21    income tax and percentage of training costs permitted in
22    that Act and in the agreement with respect to the project.
23        (2) The amount of the credit allowed during a tax year
24    plus the sum of all amounts allowed in prior tax years
25    shall not exceed the maximum amount of credit established
26    in the agreement.

 

 

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1        (3) The amount of the credit shall be determined on an
2    annual basis. Except as applied in a carryover year
3    pursuant to paragraph (4), the credit may not be applied
4    against any State income tax liability in more than 15
5    taxable years.
6        (4) The credit may not exceed the amount of taxes
7    imposed pursuant to subsections (a) and (b) of Section 201
8    of this Act. Any credit that is unused in the year the
9    credit is computed may be carried forward and applied to
10    the tax liability of the 5 taxable years following the
11    excess credit year. The credit shall be applied to the
12    earliest year for which there is a tax liability. If there
13    are credits from more than one tax year that are available
14    to offset a liability, the earlier credit shall be applied
15    first.
16        (5) No credit shall be allowed with respect to any
17    agreement for any taxable year ending after the
18    noncompliance date. Upon receiving notification by the
19    Department of Commerce and Economic Opportunity of the
20    noncompliance of a taxpayer with an agreement, the
21    Department shall notify the taxpayer that no credit is
22    allowed with respect to that agreement for any taxable
23    year ending after the noncompliance date, as stated in
24    such notification. If any credit has been allowed with
25    respect to an agreement for a taxable year ending after
26    the noncompliance date for that agreement, any refund paid

 

 

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1    to the taxpayer for that taxable year shall, to the extent
2    of that credit allowed, be an erroneous refund within the
3    meaning of Section 912 of this Act.
4        If, during any taxable year, a taxpayer ceases
5    operations at a project location that is the subject of
6    that agreement with the intent to terminate operations in
7    the State, the tax imposed under subsections (a) and (b)
8    of Section 201 of this Act for such taxable year shall be
9    increased by the amount of any credit allowed under the
10    Agreement for that Project location prior to the date the
11    Taxpayer ceases operations.
12        (6) Instead of claiming the credit against the taxes
13    imposed under subsections (a) and (b) of Section 201 of
14    this Act, with respect to the portion of a MICRO Illinois
15    credit that is calculated based on the Incremental Income
16    Tax attributable to new employees and retained employees,
17    the taxpayer may elect, in accordance with the
18    Manufacturing Illinois Chips for Real Opportunity (MICRO)
19    Act, to claim the credit, on or after January 1, 2026,
20    against its obligation to pay over withholding under
21    Section 704A of the Illinois Income Tax Act. Any credit
22    for which a Taxpayer makes such an election shall not be
23    claimed against the taxes imposed under subsections (a)
24    and (b) of Section 201 of this Act.
 
25    (35 ILCS 5/239 new)

 

 

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1    Sec. 239. MICRO Investment Tax credits.
2    (a) For tax years beginning on or after January 1, 2025, a
3taxpayer shall be allowed a credit against the tax imposed by
4subsections (a) and (b) of Section 201 for investment in
5qualified property which is placed in service at the site of a
6project that is subject to an agreement between the taxpayer
7and the Department of Commerce and Economic Opportunity
8pursuant to the Manufacturing Illinois Chips for Real
9Opportunity (MICRO) Act. If the taxpayer is a partnership or a
10Subchapter S corporation, the credit shall be allowed to the
11partners or shareholders in accordance with the determination
12of income and distributive share of income under Sections 702
13and 704 and subchapter S of the Internal Revenue Code. The
14credit shall be 0.5% of the basis for such property. The credit
15shall be available only in the taxable year in which the
16property is placed in service and shall not be allowed to the
17extent that it would reduce a taxpayer's liability for the tax
18imposed by subsections (a) and (b) of Section 201 to below
19zero. The credit shall be allowed for the tax year in which the
20property is placed in service, or, if the amount of the credit
21exceeds the tax liability for that year, whether it exceeds
22the original liability or the liability as later amended, such
23excess may be carried forward and applied to the tax liability
24of the 5 taxable years following the excess credit year. The
25credit shall be applied to the earliest year for which there is
26a liability. If there is credit from more than one tax year

 

 

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1that is available to offset a liability, the credit accruing
2first in time shall be applied first.
3    (b) The term qualified property means property which:
4        (1) is tangible, whether new or used, including
5    buildings and structural components of buildings;
6        (2) is depreciable pursuant to Section 167 of the
7    Internal Revenue Code, except that "3-year property" as
8    defined in Section 168(c)(2)(A) of that Code is not
9    eligible for the credit provided by this Section;
10        (3) is acquired by purchase as defined in Section
11    179(d) of the Internal Revenue Code;
12        (4) is used at the site of the MICRO Illinois project
13    by the taxpayer; and
14        (5) has not been previously used in Illinois in such a
15    manner and by such a person as would qualify for the credit
16    provided by this Section.
17    (c) The basis of qualified property shall be the basis
18used to compute the depreciation deduction for federal income
19tax purposes.
20    (d) If the basis of the property for federal income tax
21depreciation purposes is increased after it has been placed in
22service at the site of the project by the taxpayer, the amount
23of such increase shall be deemed property placed in service on
24the date of such increase in basis.
25    (e) The term "placed in service" shall have the same
26meaning as under Section 46 of the Internal Revenue Code.

 

 

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1    (f) If during any taxable year, any property ceases to be
2qualified property in the hands of the taxpayer within 48
3months after being placed in service, or the situs of any
4qualified property is moved from the project site within 48
5months after being placed in service, the tax imposed under
6subsections (a) and (b) of Section 201 for such taxable year
7shall be increased. Such increase shall be determined by (i)
8recomputing the investment credit which would have been
9allowed for the year in which credit for such property was
10originally allowed by eliminating such property from such
11computation, and (ii) subtracting such recomputed credit from
12the amount of credit previously allowed. For the purposes of
13this subsection (f), a reduction of the basis of qualified
14property resulting from a redetermination of the purchase
15price shall be deemed a disposition of qualified property to
16the extent of such reduction.
 
17    (35 ILCS 5/704A)
18    Sec. 704A. Employer's return and payment of tax withheld.
19    (a) In general, every employer who deducts and withholds
20or is required to deduct and withhold tax under this Act on or
21after January 1, 2008 shall make those payments and returns as
22provided in this Section.
23    (b) Returns. Every employer shall, in the form and manner
24required by the Department, make returns with respect to taxes
25withheld or required to be withheld under this Article 7 for

 

 

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1each quarter beginning on or after January 1, 2008, on or
2before the last day of the first month following the close of
3that quarter.
4    (c) Payments. With respect to amounts withheld or required
5to be withheld on or after January 1, 2008:
6        (1) Semi-weekly payments. For each calendar year, each
7    employer who withheld or was required to withhold more
8    than $12,000 during the one-year period ending on June 30
9    of the immediately preceding calendar year, payment must
10    be made:
11            (A) on or before each Friday of the calendar year,
12        for taxes withheld or required to be withheld on the
13        immediately preceding Saturday, Sunday, Monday, or
14        Tuesday;
15            (B) on or before each Wednesday of the calendar
16        year, for taxes withheld or required to be withheld on
17        the immediately preceding Wednesday, Thursday, or
18        Friday.
19        Beginning with calendar year 2011, payments made under
20    this paragraph (1) of subsection (c) must be made by
21    electronic funds transfer.
22        (2) Semi-weekly payments. Any employer who withholds
23    or is required to withhold more than $12,000 in any
24    quarter of a calendar year is required to make payments on
25    the dates set forth under item (1) of this subsection (c)
26    for each remaining quarter of that calendar year and for

 

 

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1    the subsequent calendar year.
2        (3) Monthly payments. Each employer, other than an
3    employer described in items (1) or (2) of this subsection,
4    shall pay to the Department, on or before the 15th day of
5    each month the taxes withheld or required to be withheld
6    during the immediately preceding month.
7        (4) Payments with returns. Each employer shall pay to
8    the Department, on or before the due date for each return
9    required to be filed under this Section, any tax withheld
10    or required to be withheld during the period for which the
11    return is due and not previously paid to the Department.
12    (d) Regulatory authority. The Department may, by rule:
13        (1) Permit employers, in lieu of the requirements of
14    subsections (b) and (c), to file annual returns due on or
15    before January 31 of the year for taxes withheld or
16    required to be withheld during the previous calendar year
17    and, if the aggregate amounts required to be withheld by
18    the employer under this Article 7 (other than amounts
19    required to be withheld under Section 709.5) do not exceed
20    $1,000 for the previous calendar year, to pay the taxes
21    required to be shown on each such return no later than the
22    due date for such return.
23        (2) Provide that any payment required to be made under
24    subsection (c)(1) or (c)(2) is deemed to be timely to the
25    extent paid by electronic funds transfer on or before the
26    due date for deposit of federal income taxes withheld

 

 

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1    from, or federal employment taxes due with respect to, the
2    wages from which the Illinois taxes were withheld.
3        (3) Designate one or more depositories to which
4    payment of taxes required to be withheld under this
5    Article 7 must be paid by some or all employers.
6        (4) Increase the threshold dollar amounts at which
7    employers are required to make semi-weekly payments under
8    subsection (c)(1) or (c)(2).
9    (e) Annual return and payment. Every employer who deducts
10and withholds or is required to deduct and withhold tax from a
11person engaged in domestic service employment, as that term is
12defined in Section 3510 of the Internal Revenue Code, may
13comply with the requirements of this Section with respect to
14such employees by filing an annual return and paying the taxes
15required to be deducted and withheld on or before the 15th day
16of the fourth month following the close of the employer's
17taxable year. The Department may allow the employer's return
18to be submitted with the employer's individual income tax
19return or to be submitted with a return due from the employer
20under Section 1400.2 of the Unemployment Insurance Act.
21    (f) Magnetic media and electronic filing. With respect to
22taxes withheld in calendar years prior to 2017, any W-2 Form
23that, under the Internal Revenue Code and regulations
24promulgated thereunder, is required to be submitted to the
25Internal Revenue Service on magnetic media or electronically
26must also be submitted to the Department on magnetic media or

 

 

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1electronically for Illinois purposes, if required by the
2Department.
3    With respect to taxes withheld in 2017 and subsequent
4calendar years, the Department may, by rule, require that any
5return (including any amended return) under this Section and
6any W-2 Form that is required to be submitted to the Department
7must be submitted on magnetic media or electronically.
8    The due date for submitting W-2 Forms shall be as
9prescribed by the Department by rule.
10    (g) For amounts deducted or withheld after December 31,
112009, a taxpayer who makes an election under subsection (f) of
12Section 5-15 of the Economic Development for a Growing Economy
13Tax Credit Act for a taxable year shall be allowed a credit
14against payments due under this Section for amounts withheld
15during the first calendar year beginning after the end of that
16taxable year equal to the amount of the credit for the
17incremental income tax attributable to full-time employees of
18the taxpayer awarded to the taxpayer by the Department of
19Commerce and Economic Opportunity under the Economic
20Development for a Growing Economy Tax Credit Act for the
21taxable year and credits not previously claimed and allowed to
22be carried forward under Section 211(4) of this Act as
23provided in subsection (f) of Section 5-15 of the Economic
24Development for a Growing Economy Tax Credit Act. The credit
25or credits may not reduce the taxpayer's obligation for any
26payment due under this Section to less than zero. If the amount

 

 

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1of the credit or credits exceeds the total payments due under
2this Section with respect to amounts withheld during the
3calendar year, the excess may be carried forward and applied
4against the taxpayer's liability under this Section in the
5succeeding calendar years as allowed to be carried forward
6under paragraph (4) of Section 211 of this Act. The credit or
7credits shall be applied to the earliest year for which there
8is a tax liability. If there are credits from more than one
9taxable year that are available to offset a liability, the
10earlier credit shall be applied first. Each employer who
11deducts and withholds or is required to deduct and withhold
12tax under this Act and who retains income tax withholdings
13under subsection (f) of Section 5-15 of the Economic
14Development for a Growing Economy Tax Credit Act must make a
15return with respect to such taxes and retained amounts in the
16form and manner that the Department, by rule, requires and pay
17to the Department or to a depositary designated by the
18Department those withheld taxes not retained by the taxpayer.
19For purposes of this subsection (g), the term taxpayer shall
20include taxpayer and members of the taxpayer's unitary
21business group as defined under paragraph (27) of subsection
22(a) of Section 1501 of this Act. This Section is exempt from
23the provisions of Section 250 of this Act. No credit awarded
24under the Economic Development for a Growing Economy Tax
25Credit Act for agreements entered into on or after January 1,
262015 may be credited against payments due under this Section.

 

 

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1    (g-1) For amounts deducted or withheld after December 31,
22024, a taxpayer who makes an election under the Reimagining
3Electric Vehicles in Illinois Act shall be allowed a credit
4against payments due under this Section for amounts withheld
5during the first quarterly reporting period beginning after
6the certificate is issued equal to the portion of the REV
7Illinois Credit attributable to the incremental income tax
8attributable to new employees and retained employees as
9certified by the Department of Commerce and Economic
10Opportunity pursuant to an agreement with the taxpayer under
11the Reimagining Electric Vehicles in Illinois Act for the
12taxable year. The credit or credits may not reduce the
13taxpayer's obligation for any payment due under this Section
14to less than zero. If the amount of the credit or credits
15exceeds the total payments due under this Section with respect
16to amounts withheld during the quarterly reporting period, the
17excess may be carried forward and applied against the
18taxpayer's liability under this Section in the succeeding
19quarterly reporting period as allowed to be carried forward
20under paragraph (4) of Section 211 of this Act. The credit or
21credits shall be applied to the earliest quarterly reporting
22period for which there is a tax liability. If there are credits
23from more than one quarterly reporting period that are
24available to offset a liability, the earlier credit shall be
25applied first. Each employer who deducts and withholds or is
26required to deduct and withhold tax under this Act and who

 

 

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1retains income tax withholdings this subsection must make a
2return with respect to such taxes and retained amounts in the
3form and manner that the Department, by rule, requires and pay
4to the Department or to a depositary designated by the
5Department those withheld taxes not retained by the taxpayer.
6For purposes of this subsection (g-1), the term taxpayer shall
7include taxpayer and members of the taxpayer's unitary
8business group as defined under paragraph (27) of subsection
9(a) of Section 1501 of this Act. This Section is exempt from
10the provisions of Section 250 of this Act.
11    (g-2) For amounts deducted or withheld after December 31,
122024, a taxpayer who makes an election under the Manufacturing
13Illinois Chips for Real Opportunity (MICRO) Act shall be
14allowed a credit against payments due under this Section for
15amounts withheld during the first quarterly reporting period
16beginning after the certificate is issued equal to the portion
17of the MICRO Illinois Credit attributable to the incremental
18income tax attributable to new employees and retained
19employees as certified by the Department of Commerce and
20Economic Opportunity pursuant to an agreement with the
21taxpayer under the Manufacturing Illinois Chips for Real
22Opportunity (MICRO) Act for the taxable year. The credit or
23credits may not reduce the taxpayer's obligation for any
24payment due under this Section to less than zero. If the amount
25of the credit or credits exceeds the total payments due under
26this Section with respect to amounts withheld during the

 

 

10200SB0157ham003- 55 -LRB102 10128 HLH 39055 a

1quarterly reporting period, the excess may be carried forward
2and applied against the taxpayer's liability under this
3Section in the succeeding quarterly reporting period as
4allowed to be carried forward under paragraph (4) of Section
5211 of this Act. The credit or credits shall be applied to the
6earliest quarterly reporting period for which there is a tax
7liability. If there are credits from more than one quarterly
8reporting period that are available to offset a liability, the
9earlier credit shall be applied first. Each employer who
10deducts and withholds or is required to deduct and withhold
11tax under this Act and who retains income tax withholdings
12this subsection must make a return with respect to such taxes
13and retained amounts in the form and manner that the
14Department, by rule, requires and pay to the Department or to a
15depositary designated by the Department those withheld taxes
16not retained by the taxpayer. For purposes of this subsection,
17the term taxpayer shall include taxpayer and members of the
18taxpayer's unitary business group as defined under paragraph
19(27) of subsection (a) of Section 1501 of this Act. This
20Section is exempt from the provisions of Section 250 of this
21Act.
22    (h) An employer may claim a credit against payments due
23under this Section for amounts withheld during the first
24calendar year ending after the date on which a tax credit
25certificate was issued under Section 35 of the Small Business
26Job Creation Tax Credit Act. The credit shall be equal to the

 

 

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1amount shown on the certificate, but may not reduce the
2taxpayer's obligation for any payment due under this Section
3to less than zero. If the amount of the credit exceeds the
4total payments due under this Section with respect to amounts
5withheld during the calendar year, the excess may be carried
6forward and applied against the taxpayer's liability under
7this Section in the 5 succeeding calendar years. The credit
8shall be applied to the earliest year for which there is a tax
9liability. If there are credits from more than one calendar
10year that are available to offset a liability, the earlier
11credit shall be applied first. This Section is exempt from the
12provisions of Section 250 of this Act.
13    (i) Each employer with 50 or fewer full-time equivalent
14employees during the reporting period may claim a credit
15against the payments due under this Section for each qualified
16employee in an amount equal to the maximum credit allowable.
17The credit may be taken against payments due for reporting
18periods that begin on or after January 1, 2020, and end on or
19before December 31, 2027. An employer may not claim a credit
20for an employee who has worked fewer than 90 consecutive days
21immediately preceding the reporting period; however, such
22credits may accrue during that 90-day period and be claimed
23against payments under this Section for future reporting
24periods after the employee has worked for the employer at
25least 90 consecutive days. In no event may the credit exceed
26the employer's liability for the reporting period. Each

 

 

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1employer who deducts and withholds or is required to deduct
2and withhold tax under this Act and who retains income tax
3withholdings under this subsection must make a return with
4respect to such taxes and retained amounts in the form and
5manner that the Department, by rule, requires and pay to the
6Department or to a depositary designated by the Department
7those withheld taxes not retained by the employer.
8    For each reporting period, the employer may not claim a
9credit or credits for more employees than the number of
10employees making less than the minimum or reduced wage for the
11current calendar year during the last reporting period of the
12preceding calendar year. Notwithstanding any other provision
13of this subsection, an employer shall not be eligible for
14credits for a reporting period unless the average wage paid by
15the employer per employee for all employees making less than
16$55,000 during the reporting period is greater than the
17average wage paid by the employer per employee for all
18employees making less than $55,000 during the same reporting
19period of the prior calendar year.
20    For purposes of this subsection (i):
21    "Compensation paid in Illinois" has the meaning ascribed
22to that term under Section 304(a)(2)(B) of this Act.
23    "Employer" and "employee" have the meaning ascribed to
24those terms in the Minimum Wage Law, except that "employee"
25also includes employees who work for an employer with fewer
26than 4 employees. Employers that operate more than one

 

 

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1establishment pursuant to a franchise agreement or that
2constitute members of a unitary business group shall aggregate
3their employees for purposes of determining eligibility for
4the credit.
5    "Full-time equivalent employees" means the ratio of the
6number of paid hours during the reporting period and the
7number of working hours in that period.
8    "Maximum credit" means the percentage listed below of the
9difference between the amount of compensation paid in Illinois
10to employees who are paid not more than the required minimum
11wage reduced by the amount of compensation paid in Illinois to
12employees who were paid less than the current required minimum
13wage during the reporting period prior to each increase in the
14required minimum wage on January 1. If an employer pays an
15employee more than the required minimum wage and that employee
16previously earned less than the required minimum wage, the
17employer may include the portion that does not exceed the
18required minimum wage as compensation paid in Illinois to
19employees who are paid not more than the required minimum
20wage.
21        (1) 25% for reporting periods beginning on or after
22    January 1, 2020 and ending on or before December 31, 2020;
23        (2) 21% for reporting periods beginning on or after
24    January 1, 2021 and ending on or before December 31, 2021;
25        (3) 17% for reporting periods beginning on or after
26    January 1, 2022 and ending on or before December 31, 2022;

 

 

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1        (4) 13% for reporting periods beginning on or after
2    January 1, 2023 and ending on or before December 31, 2023;
3        (5) 9% for reporting periods beginning on or after
4    January 1, 2024 and ending on or before December 31, 2024;
5        (6) 5% for reporting periods beginning on or after
6    January 1, 2025 and ending on or before December 31, 2025.
7    The amount computed under this subsection may continue to
8be claimed for reporting periods beginning on or after January
91, 2026 and:
10        (A) ending on or before December 31, 2026 for
11    employers with more than 5 employees; or
12        (B) ending on or before December 31, 2027 for
13    employers with no more than 5 employees.
14    "Qualified employee" means an employee who is paid not
15more than the required minimum wage and has an average wage
16paid per hour by the employer during the reporting period
17equal to or greater than his or her average wage paid per hour
18by the employer during each reporting period for the
19immediately preceding 12 months. A new qualified employee is
20deemed to have earned the required minimum wage in the
21preceding reporting period.
22    "Reporting period" means the quarter for which a return is
23required to be filed under subsection (b) of this Section.
24(Source: P.A. 101-1, eff. 2-19-19; 102-669, eff. 11-16-21.)
 
25    Section 110-907. The Use Tax Act is amended by changing

 

 

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1Section 12 as follows:
 
2    (35 ILCS 105/12)  (from Ch. 120, par. 439.12)
3    Sec. 12. Applicability of Retailers' Occupation Tax Act
4and Uniform Penalty and Interest Act. All of the provisions of
5Sections 1d, 1e, 1f, 1i, 1j, 1j.1, 1k, 1m, 1n, 1o, 2-6, 2-12,
62-54, 2a, 2b, 2c, 3, 4 (except that the time limitation
7provisions shall run from the date when the tax is due rather
8than from the date when gross receipts are received), 5
9(except that the time limitation provisions on the issuance of
10notices of tax liability shall run from the date when the tax
11is due rather than from the date when gross receipts are
12received and except that in the case of a failure to file a
13return required by this Act, no notice of tax liability shall
14be issued on and after each July 1 and January 1 covering tax
15due with that return during any month or period more than 6
16years before that July 1 or January 1, respectively), 5a, 5b,
175c, 5d, 5e, 5f, 5g, 5h, 5j, 5k, 5l, 5n, 7, 8, 9, 10, 11 and 12
18of the Retailers' Occupation Tax Act and Section 3-7 of the
19Uniform Penalty and Interest Act, which are not inconsistent
20with this Act, shall apply, as far as practicable, to the
21subject matter of this Act to the same extent as if such
22provisions were included herein.
23(Source: P.A. 98-1098, eff. 8-26-14.)
 
24    Section 110-908. The Service Use Tax Act is amended by

 

 

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1changing Section 12 as follows:
 
2    (35 ILCS 110/12)  (from Ch. 120, par. 439.42)
3    Sec. 12. Applicability of Retailers' Occupation Tax Act
4and Uniform Penalty and Interest Act. All of the provisions of
5Sections 1d, 1e, 1f, 1i, 1j, 1j.1, 1k, 1m, 1n, 1o, 2-6, 2-12,
62-54, 2a, 2b, 2c, 3 (except as to the disposition by the
7Department of the money collected under this Act), 4 (except
8that the time limitation provisions shall run from the date
9when gross receipts are received), 5 (except that the time
10limitation provisions on the issuance of notices of tax
11liability shall run from the date when the tax is due rather
12than from the date when gross receipts are received and except
13that in the case of a failure to file a return required by this
14Act, no notice of tax liability shall be issued on and after
15July 1 and January 1 covering tax due with that return during
16any month or period more than 6 years before that July 1 or
17January 1, respectively), 5a, 5b, 5c, 5d, 5e, 5f, 5g, 5j, 5k,
185l, 5n, 6d, 7, 8, 9, 10, 11 and 12 of the Retailers' Occupation
19Tax Act which are not inconsistent with this Act, and Section
203-7 of the Uniform Penalty and Interest Act, shall apply, as
21far as practicable, to the subject matter of this Act to the
22same extent as if such provisions were included herein.
23(Source: P.A. 98-1098, eff. 8-26-14; 99-217, eff. 7-31-15.)
 
24    Section 110-909. The Service Occupation Tax Act is amended

 

 

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1by changing Section 12 as follows:
 
2    (35 ILCS 115/12)  (from Ch. 120, par. 439.112)
3    Sec. 12. All of the provisions of Sections 1d, 1e, 1f, 1i,
41j, 1j.1, 1k, 1m, 1n, 1o, 2-6, 2-12, 2-54, 2a, 2b, 2c, 3
5(except as to the disposition by the Department of the tax
6collected under this Act), 4 (except that the time limitation
7provisions shall run from the date when the tax is due rather
8than from the date when gross receipts are received), 5
9(except that the time limitation provisions on the issuance of
10notices of tax liability shall run from the date when the tax
11is due rather than from the date when gross receipts are
12received), 5a, 5b, 5c, 5d, 5e, 5f, 5g, 5j, 5k, 5l, 5n, 6d, 7,
138, 9, 10, 11 and 12 of the "Retailers' Occupation Tax Act"
14which are not inconsistent with this Act, and Section 3-7 of
15the Uniform Penalty and Interest Act shall apply, as far as
16practicable, to the subject matter of this Act to the same
17extent as if such provisions were included herein.
18(Source: P.A. 98-1098, eff. 8-26-14; 99-217, eff. 7-31-15.)
 
19    Section 110-910. The Retailers' Occupation Tax Act is
20amended by adding Section 5n as follows:
 
21    (35 ILCS 120/5n new)
22    Sec. 5n. Building materials exemption; microchip and
23semiconductor manufacturing. Each retailer who makes a sale of

 

 

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1building materials that will be incorporated into real estate
2in a qualified facility for which a certificate of exemption
3has been issued by the Department of Commerce and Economic
4Opportunity under Section 110-105 of the Manufacturing
5Illinois Chips for Real Opportunity (MICRO) Act, may deduct
6receipts from such sales when calculating any State or local
7use and occupation taxes. No retailer who is eligible for the
8deduction or credit under Section 5k of this Act related to
9enterprise zones or Section 5l of this Act related to High
10Impact Businesses for a given sale shall be eligible for the
11deduction or credit authorized under this Section for that
12same sale.
13    In addition to any other requirements to document the
14exemption allowed under this Section, the retailer must obtain
15the purchaser's exemption certificate number issued by the
16Department. A construction contractor or other entity shall
17not make tax-free purchases unless it has an active exemption
18certificate issued by the Department at the time of purchase.
19    Upon request from a person that has been certified by the
20Department of Commerce and Economic Opportunity under the
21Manufacturing Illinois Chips for Real Opportunity (MICRO) Act,
22the Department shall issue a MICRO Illinois Building Materials
23Exemption Certificate for each construction contractor or
24other entity identified by the person so certified. The
25Department shall make the MICRO Illinois Building Materials
26Exemption Certificates available to each construction

 

 

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1contractor or other entity as well as the person certified
2under the Manufacturing Illinois Chips for Real Opportunity
3(MICRO) Act. The request for MICRO Illinois Building Materials
4Exemption Certificates must include the following information:
5        (1) the name and address of the construction
6    contractor or other entity;
7        (2) the name and location or address of the building
8    project site;
9        (3) the estimated amount of the exemption for each
10    construction contractor or other entity for which a
11    request for an exemption certificate is made, based on a
12    stated estimated average tax rate and the percentage of
13    the contract that consists of materials;
14        (4) the period of time over which supplies for the
15    project are expected to be purchased; and
16        (5) other reasonable information as the Department may
17    require, including but not limited to FEIN numbers, to
18    determine if the contractor or other entity, or any
19    partner, or a corporate officer, and in the case of a
20    limited liability company, any manager or member, of the
21    construction contractor or other entity, is or has been
22    the owner, a partner, a corporate officer, and in the case
23    of a limited liability company, a manager or member, of a
24    person that is in default for moneys due to the Department
25    under this Act or any other tax or fee Act administered by
26    the Department.

 

 

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1    The Department shall issue the exemption certificate
2within 3 business days after receipt of request. This
3requirement does not apply in circumstances where the
4Department, for reasonable cause, is unable to issue the
5exemption certificate within 3 business days. The Department
6may refuse to issue an exemption certificate under this
7Section if the owner, any partner, or a corporate officer, and
8in the case of a limited liability company, any manager or
9member, of the construction contractor or other entity is or
10has been the owner, a partner, a corporate officer, and in the
11case of a limited liability company, a manager or member, of a
12person that is in default for moneys due to the Department
13under this Act or any other tax or fee Act administered by the
14Department.
15    The MICRO Illinois Building Materials Exemption
16Certificate shall contain language stating that, if the
17construction contractor or other entity who is issued the
18exemption certificate makes a tax-exempt purchase, as
19described in this Section, that is not eligible for exemption
20under this Section or allows another person to make a
21tax-exempt purchase, as described in this Section, that is not
22eligible for exemption under this Section, then, in addition
23to any tax or other penalty imposed, the construction
24contractor or other entity is subject to a penalty equal to the
25tax that would have been paid by the retailer under this Act as
26well as any applicable local retailers' occupation tax on the

 

 

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1purchase that is not eligible for the exemption.
2    The Department, in its discretion, may require that the
3request for a MICRO Illinois Exemption Certificate be
4submitted electronically. The Department may, in its
5discretion, issue the exemption certificates electronically.
6The MICRO Illinois Building Materials Exemption Certificate
7number shall be designed in such a way that the Department can
8identify from the unique number on the exemption certificate
9issued to a given construction contractor or other entity, the
10name of the entity to whom the exemption certificate is
11issued. The MICRO Illinois Building Materials Exemption
12Certificate shall contain an expiration date, which shall be
13no more than 5 years after the date of issuance. At the request
14of the entity to whom the exemption certificate is issued, the
15Department may renew an exemption certificate issued under
16this Section. After the Department issues exemption
17certificates under this Section, the certified entity may
18notify the Department of additional construction contractors
19or other entities eligible for an exemption certificate under
20this Section. Upon such a notification and subject to the
21other provisions of this Section, the Department shall issue
22an exemption certificate to each additional qualified
23construction contractor or other entity so identified. A
24certified entity may notify the Department to rescind an
25exemption certificate previously issued by the Department that
26has not yet expired. Upon such a notification and subject to

 

 

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1the other provisions of this Section, the Department shall
2rescind the exemption certificate.
3    If the Department of Revenue determines that a
4construction contractor or other entity that was issued an
5exemption certificate under this Section made a tax-exempt
6purchase, as described in this Section, that was not eligible
7for exemption under this Section or allowed another person to
8make a tax-exempt purchase, as described in this Section, that
9was not eligible for exemption under this Section, then, in
10addition to any tax or other penalty imposed, the construction
11contractor or other entity is subject to a penalty equal to the
12tax that would have been paid by the retailer under this Act as
13well as any applicable local retailers' occupation tax on the
14purchase that was not eligible for the exemption.
15    This Section is exempt from the provisions of Section
162-70.
 
17    Section 110-915. The Property Tax Code is amended by
18adding Section 18-184.20 as follows:
 
19    (35 ILCS 200/18-184.20 new)
20    Sec. 18-184.20. MICRO Illinois project facilities. Any
21taxing district, upon a majority vote of its governing body,
22may, after determination of the assessed value as set forth in
23this Code, order the clerk of the appropriate municipality or
24county to abate any portion of real property taxes otherwise

 

 

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1levied or extended by the taxing district on a MICRO Illinois
2Project facility owned by a semiconductor manufacturer or
3microchip manufacturer or a semiconductor or microchip
4component parts manufacturer that is subject to an agreement
5with the Department of Commerce and Economic Opportunity under
6the Manufacturing Illinois Chips for Real Opportunity (MICRO)
7Act, during the period of time such agreement is in effect as
8specified by the Department of Commerce and Economic
9Opportunity.
 
10    Section 110-920. The Telecommunications Excise Tax Act is
11amended by changing Section 2 as follows:
 
12    (35 ILCS 630/2)  (from Ch. 120, par. 2002)
13    Sec. 2. As used in this Article, unless the context
14clearly requires otherwise:
15    (a) "Gross charge" means the amount paid for the act or
16privilege of originating or receiving telecommunications in
17this State and for all services and equipment provided in
18connection therewith by a retailer, valued in money whether
19paid in money or otherwise, including cash, credits, services
20and property of every kind or nature, and shall be determined
21without any deduction on account of the cost of such
22telecommunications, the cost of materials used, labor or
23service costs or any other expense whatsoever. In case credit
24is extended, the amount thereof shall be included only as and

 

 

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1when paid. "Gross charges" for private line service shall
2include charges imposed at each channel termination point
3within this State, charges for the channel mileage between
4each channel termination point within this State, and charges
5for that portion of the interstate inter-office channel
6provided within Illinois. Charges for that portion of the
7interstate inter-office channel provided in Illinois shall be
8determined by the retailer as follows: (i) for interstate
9inter-office channels having 2 channel termination points,
10only one of which is in Illinois, 50% of the total charge
11imposed; or (ii) for interstate inter-office channels having
12more than 2 channel termination points, one or more of which
13are in Illinois, an amount equal to the total charge
14multiplied by a fraction, the numerator of which is the number
15of channel termination points within Illinois and the
16denominator of which is the total number of channel
17termination points. Prior to January 1, 2004, any method
18consistent with this paragraph or other method that reasonably
19apportions the total charges for interstate inter-office
20channels among the states in which channel terminations points
21are located shall be accepted as a reasonable method to
22determine the charges for that portion of the interstate
23inter-office channel provided within Illinois for that period.
24However, "gross charges" shall not include any of the
25following:
26        (1) Any amounts added to a purchaser's bill because of

 

 

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1    a charge made pursuant to (i) the tax imposed by this
2    Article; (ii) charges added to customers' bills pursuant
3    to the provisions of Sections 9-221 or 9-222 of the Public
4    Utilities Act, as amended, or any similar charges added to
5    customers' bills by retailers who are not subject to rate
6    regulation by the Illinois Commerce Commission for the
7    purpose of recovering any of the tax liabilities or other
8    amounts specified in such provisions of such Act; (iii)
9    the tax imposed by Section 4251 of the Internal Revenue
10    Code; (iv) 911 surcharges; or (v) the tax imposed by the
11    Simplified Municipal Telecommunications Tax Act.
12        (2) Charges for a sent collect telecommunication
13    received outside of the State.
14        (3) Charges for leased time on equipment or charges
15    for the storage of data or information for subsequent
16    retrieval or the processing of data or information
17    intended to change its form or content. Such equipment
18    includes, but is not limited to, the use of calculators,
19    computers, data processing equipment, tabulating equipment
20    or accounting equipment and also includes the usage of
21    computers under a time-sharing agreement.
22        (4) Charges for customer equipment, including such
23    equipment that is leased or rented by the customer from
24    any source, wherein such charges are disaggregated and
25    separately identified from other charges.
26        (5) Charges to business enterprises certified under

 

 

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1    Section 9-222.1 of the Public Utilities Act, as amended,
2    or to electric vehicle manufacturers, electric vehicle
3    component parts manufacturers, or electric vehicle power
4    supply manufacturers at REV Illinois Project sites for
5    which a certificate of exemption has been issued by the
6    Department of Commerce and Economic Opportunity under
7    Section 95 of the Reimagining Electric Vehicles in
8    Illinois Act, to the extent of such exemption and during
9    the period of time specified by the Department of Commerce
10    and Economic Opportunity.
11        (5.1) Charges to business enterprises certified under
12    the Manufacturing Illinois Chips for Real Opportunity
13    (MICRO) Act.
14        (6) Charges for telecommunications and all services
15    and equipment provided in connection therewith between a
16    parent corporation and its wholly owned subsidiaries or
17    between wholly owned subsidiaries when the tax imposed
18    under this Article has already been paid to a retailer and
19    only to the extent that the charges between the parent
20    corporation and wholly owned subsidiaries or between
21    wholly owned subsidiaries represent expense allocation
22    between the corporations and not the generation of profit
23    for the corporation rendering such service.
24        (7) Bad debts. Bad debt means any portion of a debt
25    that is related to a sale at retail for which gross charges
26    are not otherwise deductible or excludable that has become

 

 

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1    worthless or uncollectable, as determined under applicable
2    federal income tax standards. If the portion of the debt
3    deemed to be bad is subsequently paid, the retailer shall
4    report and pay the tax on that portion during the
5    reporting period in which the payment is made.
6        (8) Charges paid by inserting coins in coin-operated
7    telecommunication devices.
8        (9) Amounts paid by telecommunications retailers under
9    the Telecommunications Municipal Infrastructure
10    Maintenance Fee Act.
11        (10) Charges for nontaxable services or
12    telecommunications if (i) those charges are aggregated
13    with other charges for telecommunications that are
14    taxable, (ii) those charges are not separately stated on
15    the customer bill or invoice, and (iii) the retailer can
16    reasonably identify the nontaxable charges on the
17    retailer's books and records kept in the regular course of
18    business. If the nontaxable charges cannot reasonably be
19    identified, the gross charge from the sale of both taxable
20    and nontaxable services or telecommunications billed on a
21    combined basis shall be attributed to the taxable services
22    or telecommunications. The burden of proving nontaxable
23    charges shall be on the retailer of the
24    telecommunications.
25    (b) "Amount paid" means the amount charged to the
26taxpayer's service address in this State regardless of where

 

 

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1such amount is billed or paid.
2    (c) "Telecommunications", in addition to the meaning
3ordinarily and popularly ascribed to it, includes, without
4limitation, messages or information transmitted through use of
5local, toll and wide area telephone service; private line
6services; channel services; telegraph services;
7teletypewriter; computer exchange services; cellular mobile
8telecommunications service; specialized mobile radio;
9stationary two way radio; paging service; or any other form of
10mobile and portable one-way or two-way communications; or any
11other transmission of messages or information by electronic or
12similar means, between or among points by wire, cable,
13fiber-optics, laser, microwave, radio, satellite or similar
14facilities. As used in this Act, "private line" means a
15dedicated non-traffic sensitive service for a single customer,
16that entitles the customer to exclusive or priority use of a
17communications channel or group of channels, from one or more
18specified locations to one or more other specified locations.
19The definition of "telecommunications" shall not include value
20added services in which computer processing applications are
21used to act on the form, content, code and protocol of the
22information for purposes other than transmission.
23"Telecommunications" shall not include purchases of
24telecommunications by a telecommunications service provider
25for use as a component part of the service provided by him to
26the ultimate retail consumer who originates or terminates the

 

 

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1taxable end-to-end communications. Carrier access charges,
2right of access charges, charges for use of inter-company
3facilities, and all telecommunications resold in the
4subsequent provision of, used as a component of, or integrated
5into end-to-end telecommunications service shall be
6non-taxable as sales for resale.
7    (d) "Interstate telecommunications" means all
8telecommunications that either originate or terminate outside
9this State.
10    (e) "Intrastate telecommunications" means all
11telecommunications that originate and terminate within this
12State.
13    (f) "Department" means the Department of Revenue of the
14State of Illinois.
15    (g) "Director" means the Director of Revenue for the
16Department of Revenue of the State of Illinois.
17    (h) "Taxpayer" means a person who individually or through
18his agents, employees or permittees engages in the act or
19privilege of originating or receiving telecommunications in
20this State and who incurs a tax liability under this Article.
21    (i) "Person" means any natural individual, firm, trust,
22estate, partnership, association, joint stock company, joint
23venture, corporation, limited liability company, or a
24receiver, trustee, guardian or other representative appointed
25by order of any court, the Federal and State governments,
26including State universities created by statute or any city,

 

 

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1town, county or other political subdivision of this State.
2    (j) "Purchase at retail" means the acquisition,
3consumption or use of telecommunication through a sale at
4retail.
5    (k) "Sale at retail" means the transmitting, supplying or
6furnishing of telecommunications and all services and
7equipment provided in connection therewith for a consideration
8to persons other than the Federal and State governments, and
9State universities created by statute and other than between a
10parent corporation and its wholly owned subsidiaries or
11between wholly owned subsidiaries for their use or consumption
12and not for resale.
13    (l) "Retailer" means and includes every person engaged in
14the business of making sales at retail as defined in this
15Article. The Department may, in its discretion, upon
16application, authorize the collection of the tax hereby
17imposed by any retailer not maintaining a place of business
18within this State, who, to the satisfaction of the Department,
19furnishes adequate security to insure collection and payment
20of the tax. Such retailer shall be issued, without charge, a
21permit to collect such tax. When so authorized, it shall be the
22duty of such retailer to collect the tax upon all of the gross
23charges for telecommunications in this State in the same
24manner and subject to the same requirements as a retailer
25maintaining a place of business within this State. The permit
26may be revoked by the Department at its discretion.

 

 

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1    (m) "Retailer maintaining a place of business in this
2State", or any like term, means and includes any retailer
3having or maintaining within this State, directly or by a
4subsidiary, an office, distribution facilities, transmission
5facilities, sales office, warehouse or other place of
6business, or any agent or other representative operating
7within this State under the authority of the retailer or its
8subsidiary, irrespective of whether such place of business or
9agent or other representative is located here permanently or
10temporarily, or whether such retailer or subsidiary is
11licensed to do business in this State.
12    (n) "Service address" means the location of
13telecommunications equipment from which the telecommunications
14services are originated or at which telecommunications
15services are received by a taxpayer. In the event this may not
16be a defined location, as in the case of mobile phones, paging
17systems, maritime systems, service address means the
18customer's place of primary use as defined in the Mobile
19Telecommunications Sourcing Conformity Act. For air-to-ground
20systems and the like, service address shall mean the location
21of a taxpayer's primary use of the telecommunications
22equipment as defined by telephone number, authorization code,
23or location in Illinois where bills are sent.
24    (o) "Prepaid telephone calling arrangements" mean the
25right to exclusively purchase telephone or telecommunications
26services that must be paid for in advance and enable the

 

 

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1origination of one or more intrastate, interstate, or
2international telephone calls or other telecommunications
3using an access number, an authorization code, or both,
4whether manually or electronically dialed, for which payment
5to a retailer must be made in advance, provided that, unless
6recharged, no further service is provided once that prepaid
7amount of service has been consumed. Prepaid telephone calling
8arrangements include the recharge of a prepaid calling
9arrangement. For purposes of this subsection, "recharge" means
10the purchase of additional prepaid telephone or
11telecommunications services whether or not the purchaser
12acquires a different access number or authorization code.
13"Prepaid telephone calling arrangement" does not include an
14arrangement whereby a customer purchases a payment card and
15pursuant to which the service provider reflects the amount of
16such purchase as a credit on an invoice issued to that customer
17under an existing subscription plan.
18(Source: P.A. 102-669, eff. 11-16-21.)
 
19    Section 110-925. The Electricity Excise Tax Law is amended
20by changing Section 2-4 as follows:
 
21    (35 ILCS 640/2-4)
22    Sec. 2-4. Tax imposed.
23    (a) Except as provided in subsection (b), a tax is imposed
24on the privilege of using in this State electricity purchased

 

 

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1for use or consumption and not for resale, other than by
2municipal corporations owning and operating a local
3transportation system for public service, at the following
4rates per kilowatt-hour delivered to the purchaser:
5        (i) For the first 2000 kilowatt-hours used or consumed
6    in a month: 0.330 cents per kilowatt-hour;
7        (ii) For the next 48,000 kilowatt-hours used or
8    consumed in a month: 0.319 cents per kilowatt-hour;
9        (iii) For the next 50,000 kilowatt-hours used or
10    consumed in a month: 0.303 cents per kilowatt-hour;
11        (iv) For the next 400,000 kilowatt-hours used or
12    consumed in a month: 0.297 cents per kilowatt-hour;
13        (v) For the next 500,000 kilowatt-hours used or
14    consumed in a month: 0.286 cents per kilowatt-hour;
15        (vi) For the next 2,000,000 kilowatt-hours used or
16    consumed in a month: 0.270 cents per kilowatt-hour;
17        (vii) For the next 2,000,000 kilowatt-hours used or
18    consumed in a month: 0.254 cents per kilowatt-hour;
19        (viii) For the next 5,000,000 kilowatt-hours used or
20    consumed in a month: 0.233 cents per kilowatt-hour;
21        (ix) For the next 10,000,000 kilowatt-hours used or
22    consumed in a month: 0.207 cents per kilowatt-hour;
23        (x) For all electricity in excess of 20,000,000
24    kilowatt-hours used or consumed in a month: 0.202 cents
25    per kilowatt-hour.
26    Provided, that in lieu of the foregoing rates, the tax is

 

 

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1imposed on a self-assessing purchaser at the rate of 5.1% of
2the self-assessing purchaser's purchase price for all
3electricity distributed, supplied, furnished, sold,
4transmitted and delivered to the self-assessing purchaser in a
5month.
6    (b) A tax is imposed on the privilege of using in this
7State electricity purchased from a municipal system or
8electric cooperative, as defined in Article XVII of the Public
9Utilities Act, which has not made an election as permitted by
10either Section 17-200 or Section 17-300 of such Act, at the
11lesser of 0.32 cents per kilowatt hour of all electricity
12distributed, supplied, furnished, sold, transmitted, and
13delivered by such municipal system or electric cooperative to
14the purchaser or 5% of each such purchaser's purchase price
15for all electricity distributed, supplied, furnished, sold,
16transmitted, and delivered by such municipal system or
17electric cooperative to the purchaser, whichever is the lower
18rate as applied to each purchaser in each billing period.
19    (c) The tax imposed by this Section 2-4 is not imposed with
20respect to any use of electricity by business enterprises
21certified under Section 9-222.1 or 9-222.1A of the Public
22Utilities Act, as amended, to the extent of such exemption and
23during the time specified by the Department of Commerce and
24Economic Opportunity; or with respect to any transaction in
25interstate commerce, or otherwise, to the extent to which such
26transaction may not, under the Constitution and statutes of

 

 

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1the United States, be made the subject of taxation by this
2State.
3    (d) The tax imposed by this Section 2-4 is not imposed with
4respect to any use of electricity at a REV Illinois Project
5site that has received a certification for tax exemption from
6the Department of Commerce and Economic Opportunity pursuant
7to Section 95 of the Reimagining Electric Vehicles in Illinois
8Act, to the extent of such exemption, which shall be no more
9than 10 years.
10    (e) The tax imposed by this Section 2-4 is not imposed with
11respect to any use of electricity at a project site that has
12received a certification for tax exemption from the Department
13of Commerce and Economic Opportunity pursuant to the
14Manufacturing Illinois Chips for Real Opportunity (MICRO) Act,
15to the extent of such exemption, which shall be no more than 10
16years.
17(Source: P.A. 102-669, eff. 11-16-21.)
 
18    Section 110-930. The Public Utilities Act is amended by
19changing Section 9-222 as follows:
 
20    (220 ILCS 5/9-222)  (from Ch. 111 2/3, par. 9-222)
21    Sec. 9-222. Whenever a tax is imposed upon a public
22utility engaged in the business of distributing, supplying,
23furnishing, or selling gas for use or consumption pursuant to
24Section 2 of the Gas Revenue Tax Act, or whenever a tax is

 

 

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1required to be collected by a delivering supplier pursuant to
2Section 2-7 of the Electricity Excise Tax Act, or whenever a
3tax is imposed upon a public utility pursuant to Section 2-202
4of this Act, such utility may charge its customers, other than
5customers who are high impact businesses under Section 5.5 of
6the Illinois Enterprise Zone Act, electric vehicle
7manufacturers, electric vehicle component parts manufacturers,
8or electric vehicle power supply equipment manufacturers at
9REV Illinois Project sites as certified under Section 95 of
10the Reimagining Electric Vehicles in Illinois Act,
11manufacturers under the Manufacturing Illinois Chips for Real
12Opportunity (MICRO) Act, or certified business enterprises
13under Section 9-222.1 of this Act, to the extent of such
14exemption and during the period in which such exemption is in
15effect, in addition to any rate authorized by this Act, an
16additional charge equal to the total amount of such taxes. The
17exemption of this Section relating to high impact businesses
18shall be subject to the provisions of subsections (a), (b),
19and (b-5) of Section 5.5 of the Illinois Enterprise Zone Act.
20This requirement shall not apply to taxes on invested capital
21imposed pursuant to the Messages Tax Act, the Gas Revenue Tax
22Act and the Public Utilities Revenue Act. Such utility shall
23file with the Commission a supplemental schedule which shall
24specify such additional charge and which shall become
25effective upon filing without further notice. Such additional
26charge shall be shown separately on the utility bill to each

 

 

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1customer. The Commission shall have the power to investigate
2whether or not such supplemental schedule correctly specifies
3such additional charge, but shall have no power to suspend
4such supplemental schedule. If the Commission finds, after a
5hearing, that such supplemental schedule does not correctly
6specify such additional charge, it shall by order require a
7refund to the appropriate customers of the excess, if any,
8with interest, in such manner as it shall deem just and
9reasonable, and in and by such order shall require the utility
10to file an amended supplemental schedule corresponding to the
11finding and order of the Commission. Except with respect to
12taxes imposed on invested capital, such tax liabilities shall
13be recovered from customers solely by means of the additional
14charges authorized by this Section.
15(Source: P.A. 102-669, eff. 11-16-21.)".