Full Text of SB0499 95th General Assembly
SB0499enr 95TH GENERAL ASSEMBLY
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| AN ACT concerning revenue.
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| Be it enacted by the People of the State of Illinois,
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| represented in the General Assembly:
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| Section 5. The Economic Development for a Growing Economy | 5 |
| Tax Credit Act is amended by changing Sections 5-5 and 5-15 as | 6 |
| follows:
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| (35 ILCS 10/5-5)
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| Sec. 5-5. Definitions. As used in this Act:
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| "Agreement" means the Agreement between a Taxpayer and the | 10 |
| Department under
the provisions of Section 5-50 of this Act.
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| "Applicant" means a Taxpayer that is operating a business | 12 |
| located or that
the Taxpayer plans to locate within the State | 13 |
| of Illinois and that is engaged
in interstate or intrastate | 14 |
| commerce for the purpose of manufacturing,
processing, | 15 |
| assembling, warehousing, or distributing products, conducting
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| research and development, providing tourism services, or | 17 |
| providing services
in interstate commerce, office industries, | 18 |
| or agricultural processing, but
excluding retail, retail food, | 19 |
| health, or professional services.
"Applicant" does not include | 20 |
| a Taxpayer who closes or
substantially reduces an operation at | 21 |
| one location in the State and relocates
substantially the same | 22 |
| operation to another location in the State. This does
not | 23 |
| prohibit a Taxpayer from expanding its operations at another |
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| location in
the State, provided that existing operations of a | 2 |
| similar nature located within
the State are not closed or | 3 |
| substantially reduced. This also does not prohibit
a Taxpayer | 4 |
| from moving its operations from one location in the State to | 5 |
| another
location in the State for the purpose of expanding the | 6 |
| operation provided that
the Department determines that | 7 |
| expansion cannot reasonably be accommodated
within the | 8 |
| municipality in which the business is located, or in the case | 9 |
| of a
business located in an incorporated area of the county, | 10 |
| within the county in
which the business is located, after | 11 |
| conferring with the chief elected
official of the municipality | 12 |
| or county and taking into consideration any
evidence offered by | 13 |
| the municipality or county regarding the ability to
accommodate | 14 |
| expansion within the municipality or county.
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| "Committee" means the Illinois Business Investment | 16 |
| Committee created under
Section 5-25 of this Act within the | 17 |
| Illinois Economic Development Board.
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| "Credit" means the amount agreed to between the Department | 19 |
| and Applicant
under this Act, but not to exceed the Incremental | 20 |
| Income Tax attributable to
the Applicant's project.
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| "Department" means the Department of Commerce and Economic | 22 |
| Opportunity.
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| "Director" means the Director of Commerce and Economic | 24 |
| Opportunity.
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| "Full-time Employee" means an individual who is employed | 26 |
| for consideration
for at least 35 hours each week or who |
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| renders any other standard of service
generally accepted by | 2 |
| industry custom or practice as full-time employment. An | 3 |
| individual for whom a W-2 is issued by a Professional Employer | 4 |
| Organization (PEO) is a full-time employee if employed in the | 5 |
| service of the Applicant for consideration for at least 35 | 6 |
| hours each week or who renders any other standard of service | 7 |
| generally accepted by industry custom or practice as full-time | 8 |
| employment to Applicant.
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| "Incremental Income Tax" means the total amount withheld | 10 |
| during the taxable
year from the compensation of New Employees | 11 |
| under Article 7 of the Illinois
Income Tax Act arising from | 12 |
| employment at a project that is the subject of an
Agreement.
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| "New Employee" means:
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| (a) A Full-time Employee first employed by a Taxpayer | 15 |
| in the project
that is the subject of an Agreement and who | 16 |
| is hired after the Taxpayer
enters into the tax credit | 17 |
| Agreement.
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| (b) The term "New Employee" does not include:
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| (1) an employee of the Taxpayer who performs a job | 20 |
| that was previously
performed by another employee, if | 21 |
| that job existed for at least 6
months before hiring | 22 |
| the employee;
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| (2) an employee of the Taxpayer who was previously | 24 |
| employed in
Illinois by a Related Member of the | 25 |
| Taxpayer and whose employment was
shifted to the | 26 |
| Taxpayer after the Taxpayer entered into the tax credit
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| Agreement; or
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| (3) a child, grandchild, parent, or spouse, other | 3 |
| than a spouse who
is legally separated from the | 4 |
| individual, of any individual who has a direct
or an | 5 |
| indirect ownership interest of at least 5% in the | 6 |
| profits, capital, or
value of the Taxpayer.
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| (c) Notwithstanding paragraph (1) of subsection (b), | 8 |
| an employee may be
considered a New Employee under the | 9 |
| Agreement if the employee performs a job
that was | 10 |
| previously performed by an employee who was:
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| (1) treated under the Agreement as a New Employee; | 12 |
| and
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| (2) promoted by the Taxpayer to another job.
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| (d) Notwithstanding subsection (a), the Department may | 15 |
| award Credit to an
Applicant with respect to an employee | 16 |
| hired prior to the date of the Agreement
if:
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| (1) the Applicant is in receipt of a letter from | 18 |
| the Department stating
an
intent to enter into a credit | 19 |
| Agreement;
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| (2) the letter described in paragraph (1) is issued | 21 |
| by the
Department not later than 15 days after the | 22 |
| effective date of this Act; and
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| (3) the employee was hired after the date the | 24 |
| letter described in
paragraph (1) was issued.
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| "Noncompliance Date" means, in the case of a Taxpayer that | 26 |
| is not complying
with the requirements of the Agreement or the |
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| provisions of this Act, the day
following the last date upon | 2 |
| which the Taxpayer was in compliance with the
requirements of | 3 |
| the Agreement and the provisions of this Act, as determined
by | 4 |
| the Director, pursuant to Section 5-65.
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| "Pass Through Entity" means an entity that is exempt from | 6 |
| the tax under
subsection (b) or (c) of Section 205 of the | 7 |
| Illinois Income Tax Act.
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| "Professional Employer Organization" (PEO) means an | 9 |
| employee leasing company, as defined in Section 206.1(A)(2) of | 10 |
| the Illinois Unemployment Insurance Act.
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| "Related Member" means a person that, with respect to the | 12 |
| Taxpayer during
any portion of the taxable year, is any one of | 13 |
| the following:
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| (1) An individual stockholder, if the stockholder and | 15 |
| the members of the
stockholder's family (as defined in | 16 |
| Section 318 of the Internal Revenue Code)
own directly, | 17 |
| indirectly, beneficially, or constructively, in the | 18 |
| aggregate,
at least 50% of the value of the Taxpayer's | 19 |
| outstanding stock.
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| (2) A partnership, estate, or trust and any partner or | 21 |
| beneficiary,
if the partnership, estate, or trust, and its | 22 |
| partners or beneficiaries own
directly, indirectly, | 23 |
| beneficially, or constructively, in the aggregate, at
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| least 50% of the profits, capital, stock, or value of the
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| Taxpayer.
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| (3) A corporation, and any party related to the |
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| corporation in a manner
that would require an attribution | 2 |
| of stock from the corporation to the
party or from the | 3 |
| party to the corporation under the attribution rules
of | 4 |
| Section 318 of the Internal Revenue Code, if the Taxpayer | 5 |
| owns
directly, indirectly, beneficially, or constructively | 6 |
| at least
50% of the value of the corporation's outstanding | 7 |
| stock.
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| (4) A corporation and any party related to that | 9 |
| corporation in a manner
that would require an attribution | 10 |
| of stock from the corporation to the party or
from the | 11 |
| party to the corporation under the attribution rules of | 12 |
| Section 318 of
the Internal Revenue Code, if the | 13 |
| corporation and all such related parties own
in the | 14 |
| aggregate at least 50% of the profits, capital, stock, or | 15 |
| value of the
Taxpayer.
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| (5) A person to or from whom there is attribution of | 17 |
| stock ownership
in accordance with Section 1563(e) of the | 18 |
| Internal Revenue Code, except,
for purposes of determining | 19 |
| whether a person is a Related Member under
this paragraph, | 20 |
| 20% shall be substituted for 5% wherever 5% appears in
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| Section 1563(e) of the Internal Revenue Code.
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| "Taxpayer" means an individual, corporation, partnership, | 23 |
| or other entity
that has any Illinois Income Tax liability.
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| (Source: P.A. 94-793, eff. 5-19-06.)
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| (35 ILCS 10/5-15)
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| Sec. 5-15. Tax Credit Awards. Subject to the conditions set | 2 |
| forth in this
Act, a Taxpayer is
entitled to a Credit against | 3 |
| taxes imposed pursuant to subsections (a) and (b)
of Section | 4 |
| 201 of the Illinois
Income Tax Act that may be imposed on the | 5 |
| Taxpayer for a taxable year beginning
on or
after January 1, | 6 |
| 1999,
if the Taxpayer is awarded a Credit by the Department | 7 |
| under this Act for that
taxable year.
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| (a) The Department shall make Credit awards under this Act | 9 |
| to foster job
creation and retention in Illinois.
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| (b) A person that proposes a project to create new jobs in | 11 |
| Illinois must
enter into an Agreement with the
Department for | 12 |
| the Credit under this Act.
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| (c) The Credit shall be claimed for the taxable years | 14 |
| specified in the
Agreement.
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| (d) The Credit shall not exceed the Incremental Income Tax | 16 |
| attributable to
the project that is the subject of the | 17 |
| Agreement.
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| (e) Nothing herein shall prohibit a Tax Credit Award to an | 19 |
| Applicant that uses a PEO if all other award criteria are | 20 |
| satisfied.
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| (Source: P.A. 91-476, eff. 8-11-99.)
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| Section 99. Effective date. This Act takes effect upon | 23 |
| becoming law.
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