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Sen. Karen McConnaughay
Filed: 4/17/2015
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1 | | AMENDMENT TO SENATE BILL 1660
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2 | | AMENDMENT NO. ______. Amend Senate Bill 1660 by replacing |
3 | | everything after the enacting clause with the following:
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4 | | "Section 5. The Illinois Income Tax Act is amended by |
5 | | changing Section 211 as follows:
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6 | | (35 ILCS 5/211)
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7 | | Sec. 211. Economic Development for a Growing Economy Tax |
8 | | Credit. For tax years beginning on or after January 1, 1999, a |
9 | | Taxpayer
who has entered into an Agreement under the Economic |
10 | | Development for a Growing
Economy Tax Credit Act is entitled to |
11 | | a credit against the taxes imposed
under subsections (a) and |
12 | | (b) of Section 201 of this Act and the taxes imposed under |
13 | | Sections 409, 444, and 444.1 of the Illinois Insurance Code in |
14 | | an amount to be
determined in the Agreement. If the Taxpayer is |
15 | | a partnership or Subchapter
S corporation, the credit shall be |
16 | | allowed to the partners or shareholders in
accordance with the |
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1 | | determination of income and distributive share of income
under |
2 | | Sections 702 and 704 and subchapter S of the Internal Revenue |
3 | | Code.
The Department, in cooperation with the Department
of |
4 | | Commerce and Economic Opportunity, shall prescribe rules to |
5 | | enforce and
administer the provisions of this Section. This |
6 | | Section is
exempt from the provisions of Section 250 of this |
7 | | Act.
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8 | | The credit shall be subject to the conditions set forth in
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9 | | the Agreement and the following limitations:
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10 | | (1) The tax credit shall not exceed the Incremental |
11 | | Income Tax
(as defined in Section 5-5 of the Economic |
12 | | Development for a Growing Economy
Tax Credit Act) with |
13 | | respect to the project.
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14 | | (2) The amount of the credit allowed during the tax |
15 | | year plus the sum of
all amounts allowed in prior years |
16 | | shall not exceed 100% of the aggregate
amount expended by |
17 | | the Taxpayer during all prior tax years on approved costs
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18 | | defined by Agreement.
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19 | | (3) The amount of the credit shall be determined on an |
20 | | annual
basis. Except as applied in a carryover year |
21 | | pursuant to Section 211(4) of
this Act, the credit may not |
22 | | be applied against any State
income tax liability in more |
23 | | than 10 taxable
years; provided, however, that (i) an |
24 | | eligible business certified by the
Department of Commerce |
25 | | and Economic Opportunity under the Corporate Headquarters
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26 | | Relocation Act may not
apply the credit against any of its |
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1 | | State income tax liability in more than 15
taxable years
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2 | | and (ii) credits allowed to that eligible business are |
3 | | subject to the
conditions
and requirements set forth in |
4 | | Sections 5-35 and 5-45 of the Economic
Development for a |
5 | | Growing Economy Tax Credit Act.
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6 | | (4) The credit taken against the taxes imposed
under |
7 | | subsections (a) and (b) of Section 201 of this Act may not |
8 | | exceed the amount of taxes imposed pursuant to
subsections |
9 | | (a) and (b) of Section 201 of this Act. Any credit
that is |
10 | | unused in the year the credit is computed may be carried |
11 | | forward and
applied to the tax liability of the 5 taxable |
12 | | years following the excess credit
year or may be taken as a |
13 | | credit against the taxes imposed under Section 409, 444, or |
14 | | 444.1 of the Illinois Insurance Code, as provided in the |
15 | | Agreement . Credits that are carried forward The credit |
16 | | shall be applied to the earliest year for which there is a
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17 | | tax liability. If there are credits from more than one tax |
18 | | year that are
available to offset a liability, the earlier |
19 | | credit shall be applied first.
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20 | | (5) No credit shall be allowed with respect to any |
21 | | Agreement for any
taxable year ending after the |
22 | | Noncompliance Date. Upon receiving notification
by the |
23 | | Department of Commerce and Economic Opportunity of the |
24 | | noncompliance of a
Taxpayer with an Agreement, the |
25 | | Department shall notify the Taxpayer that no
credit is |
26 | | allowed with respect to that Agreement for any taxable year |
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1 | | ending
after the Noncompliance Date, as stated in such |
2 | | notification. If any credit
has been allowed with respect |
3 | | to an Agreement for a taxable year ending after
the |
4 | | Noncompliance Date for that Agreement, any refund paid to |
5 | | the
Taxpayer for that taxable year shall, to the extent of |
6 | | that credit allowed, be
an erroneous refund within the |
7 | | meaning of Section 912 of this Act.
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8 | | (6) For purposes of this Section, the terms |
9 | | "Agreement", "Incremental
Income Tax", and "Noncompliance |
10 | | Date" have the same meaning as when used
in the Economic |
11 | | Development for a Growing Economy Tax Credit Act.
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12 | | (Source: P.A. 94-793, eff. 5-19-06.)
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13 | | Section 10. The Economic Development for a Growing Economy |
14 | | Tax Credit Act is amended by changing Sections 5-5, 5-15, and |
15 | | 5-45 as follows:
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16 | | (35 ILCS 10/5-5)
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17 | | Sec. 5-5. Definitions. As used in this Act:
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18 | | "Agreement" means the Agreement between a Taxpayer and the |
19 | | Department under
the provisions of Section 5-50 of this Act.
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20 | | "Applicant" means a Taxpayer that is operating a business |
21 | | located or that
the Taxpayer plans to locate within the State |
22 | | of Illinois and that is engaged
in interstate or intrastate |
23 | | commerce for the purpose of manufacturing,
processing, |
24 | | assembling, warehousing, or distributing products, conducting
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1 | | research and development, providing tourism services, or |
2 | | providing services
in interstate commerce, office industries, |
3 | | or agricultural processing, but
excluding retail, retail food, |
4 | | health, or professional services.
"Applicant" does not include |
5 | | a Taxpayer who closes or
substantially reduces an operation at |
6 | | one location in the State and relocates
substantially the same |
7 | | operation to another location in the State. This does
not |
8 | | prohibit a Taxpayer from expanding its operations at another |
9 | | location in
the State, provided that existing operations of a |
10 | | similar nature located within
the State are not closed or |
11 | | substantially reduced. This also does not prohibit
a Taxpayer |
12 | | from moving its operations from one location in the State to |
13 | | another
location in the State for the purpose of expanding the |
14 | | operation provided that
the Department determines that |
15 | | expansion cannot reasonably be accommodated
within the |
16 | | municipality in which the business is located, or in the case |
17 | | of a
business located in an incorporated area of the county, |
18 | | within the county in
which the business is located, after |
19 | | conferring with the chief elected
official of the municipality |
20 | | or county and taking into consideration any
evidence offered by |
21 | | the municipality or county regarding the ability to
accommodate |
22 | | expansion within the municipality or county.
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23 | | "Committee" means the Illinois Business Investment |
24 | | Committee created under
Section 5-25 of this Act within the |
25 | | Illinois Economic Development Board.
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26 | | "Credit" means the amount agreed to between the Department |
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1 | | and Applicant
under this Act, but not to exceed the Incremental |
2 | | Income Tax attributable to
the Applicant's project.
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3 | | "Department" means the Department of Commerce and Economic |
4 | | Opportunity.
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5 | | "Director" means the Director of Commerce and Economic |
6 | | Opportunity.
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7 | | "Full-time Employee" means an individual who is employed |
8 | | for consideration
for at least 35 hours each week or who |
9 | | renders any other standard of service
generally accepted by |
10 | | industry custom or practice as full-time employment. An |
11 | | individual for whom a W-2 is issued by a Professional Employer |
12 | | Organization (PEO) is a full-time employee if employed in the |
13 | | service of the Applicant for consideration for at least 35 |
14 | | hours each week or who renders any other standard of service |
15 | | generally accepted by industry custom or practice as full-time |
16 | | employment to Applicant.
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17 | | "Incremental Income Tax" means the total amount withheld |
18 | | during the taxable
year from the compensation of New Employees |
19 | | under Article 7 of the Illinois
Income Tax Act arising from |
20 | | employment at a project that is the subject of an
Agreement.
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21 | | "New Employee" means:
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22 | | (a) A Full-time Employee first employed by a Taxpayer |
23 | | in the project
that is the subject of an Agreement and who |
24 | | is hired after the Taxpayer
enters into the tax credit |
25 | | Agreement.
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26 | | (b) The term "New Employee" does not include:
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1 | | (1) an employee of the Taxpayer who performs a job |
2 | | that was previously
performed by another employee, if |
3 | | that job existed for at least 6
months before hiring |
4 | | the employee;
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5 | | (2) an employee of the Taxpayer who was previously |
6 | | employed in
Illinois by a Related Member of the |
7 | | Taxpayer and whose employment was
shifted to the |
8 | | Taxpayer after the Taxpayer entered into the tax credit
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9 | | Agreement; or
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10 | | (3) a child, grandchild, parent, or spouse, other |
11 | | than a spouse who
is legally separated from the |
12 | | individual, of any individual who has a direct
or an |
13 | | indirect ownership interest of at least 5% in the |
14 | | profits, capital, or
value of the Taxpayer.
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15 | | (c) Notwithstanding paragraph (1) of subsection (b), |
16 | | an employee may be
considered a New Employee under the |
17 | | Agreement if the employee performs a job
that was |
18 | | previously performed by an employee who was:
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19 | | (1) treated under the Agreement as a New Employee; |
20 | | and
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21 | | (2) promoted by the Taxpayer to another job.
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22 | | (d) Notwithstanding subsection (a), the Department may |
23 | | award Credit to an
Applicant with respect to an employee |
24 | | hired prior to the date of the Agreement
if:
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25 | | (1) the Applicant is in receipt of a letter from |
26 | | the Department stating
an
intent to enter into a credit |
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1 | | Agreement;
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2 | | (2) the letter described in paragraph (1) is issued |
3 | | by the
Department not later than 15 days after the |
4 | | effective date of this Act; and
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5 | | (3) the employee was hired after the date the |
6 | | letter described in
paragraph (1) was issued.
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7 | | "Noncompliance Date" means, in the case of a Taxpayer that |
8 | | is not complying
with the requirements of the Agreement or the |
9 | | provisions of this Act, the day
following the last date upon |
10 | | which the Taxpayer was in compliance with the
requirements of |
11 | | the Agreement and the provisions of this Act, as determined
by |
12 | | the Director, pursuant to Section 5-65.
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13 | | "Pass Through Entity" means an entity that is exempt from |
14 | | the tax under
subsection (b) or (c) of Section 205 of the |
15 | | Illinois Income Tax Act.
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16 | | "Professional Employer Organization" (PEO) means an |
17 | | employee leasing company, as defined in Section 206.1(A)(2) of |
18 | | the Illinois Unemployment Insurance Act.
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19 | | "Related Member" means a person that, with respect to the |
20 | | Taxpayer during
any portion of the taxable year, is any one of |
21 | | the following:
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22 | | (1) An individual stockholder, if the stockholder and |
23 | | the members of the
stockholder's family (as defined in |
24 | | Section 318 of the Internal Revenue Code)
own directly, |
25 | | indirectly, beneficially, or constructively, in the |
26 | | aggregate,
at least 50% of the value of the Taxpayer's |
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1 | | outstanding stock.
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2 | | (2) A partnership, estate, or trust and any partner or |
3 | | beneficiary,
if the partnership, estate, or trust, and its |
4 | | partners or beneficiaries own
directly, indirectly, |
5 | | beneficially, or constructively, in the aggregate, at
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6 | | least 50% of the profits, capital, stock, or value of the
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7 | | Taxpayer.
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8 | | (3) A corporation, and any party related to the |
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 Taxpayer |
13 | | owns
directly, indirectly, beneficially, or constructively |
14 | | at least
50% of the value of the corporation's outstanding |
15 | | stock.
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16 | | (4) A corporation and any party related to that |
17 | | corporation in a manner
that would require an attribution |
18 | | of stock from the corporation to the party or
from the |
19 | | party to the corporation under the attribution rules of |
20 | | Section 318 of
the Internal Revenue Code, if the |
21 | | corporation and all such related parties own
in the |
22 | | aggregate at least 50% of the profits, capital, stock, or |
23 | | value of the
Taxpayer.
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24 | | (5) A person to or from whom there is attribution of |
25 | | stock ownership
in accordance with Section 1563(e) of the |
26 | | Internal Revenue Code, except,
for purposes of determining |
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1 | | whether a person is a Related Member under
this paragraph, |
2 | | 20% shall be substituted for 5% wherever 5% appears in
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3 | | Section 1563(e) of the Internal Revenue Code.
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4 | | "Taxpayer" means an individual, corporation, partnership, |
5 | | or other entity
that has any Illinois Income Tax liability or |
6 | | any liability under Section 409, 444, or 444.1 of the Illinois |
7 | | Insurance Code .
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8 | | (Source: P.A. 94-793, eff. 5-19-06; 95-375, eff. 8-23-07.)
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9 | | (35 ILCS 10/5-15) |
10 | | Sec. 5-15. Tax Credit Awards. Subject to the conditions set |
11 | | forth in this
Act, a Taxpayer is
entitled to a Credit against |
12 | | or, as described in subsection (g) of this Section, a payment |
13 | | towards (i) taxes imposed pursuant to subsections (a) and (b)
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14 | | of Section 201 of the Illinois
Income Tax Act that may be |
15 | | imposed on the Taxpayer for a taxable year beginning
on or
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16 | | after January 1, 1999 , (ii) taxes imposed on or after the |
17 | | effective date of this amendatory Act of the 99th General |
18 | | Assembly pursuant to Section 409, 444, or 444.1 of the Illinois |
19 | | Insurance Code, or (iii) both (i) and (ii) ,
if the Taxpayer is |
20 | | awarded a Credit by the Department under this Act for that
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21 | | taxable year. |
22 | | (a) The Department shall make Credit awards under this Act |
23 | | to foster job
creation and retention in Illinois. |
24 | | (b) A person that proposes a project to create new jobs in |
25 | | Illinois must
enter into an Agreement with the
Department for |
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1 | | the Credit under this Act. |
2 | | (c) The Credit shall be claimed for the taxable years |
3 | | specified in the
Agreement. |
4 | | (d) The Credit shall not exceed the Incremental Income Tax |
5 | | attributable to
the project that is the subject of the |
6 | | Agreement. |
7 | | (e) Nothing herein shall prohibit a Tax Credit Award to an |
8 | | Applicant that uses a PEO if all other award criteria are |
9 | | satisfied.
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10 | | (f) In lieu of the Credit allowed under this Act against |
11 | | the taxes imposed pursuant to subsections (a) and (b) of |
12 | | Section 201 of the Illinois Income Tax Act for any taxable year |
13 | | ending on or after December 31, 2009, the Taxpayer may elect to |
14 | | claim the Credit against its obligation to pay over withholding |
15 | | under Section 704A of the Illinois Income Tax Act. |
16 | | (1) The election under this subsection (f) may be made |
17 | | only by a Taxpayer that (i) is primarily engaged in one of |
18 | | the following business activities: water purification and |
19 | | treatment, motor vehicle metal stamping, automobile |
20 | | manufacturing, automobile and light duty motor vehicle |
21 | | manufacturing, motor vehicle manufacturing, light truck |
22 | | and utility vehicle manufacturing, heavy duty truck |
23 | | manufacturing, motor vehicle body manufacturing, cable |
24 | | television infrastructure design or manufacturing, or |
25 | | wireless telecommunication or computing terminal device |
26 | | design or manufacturing for use on public networks and (ii) |
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1 | | meets the following criteria: |
2 | | (A) the Taxpayer (i) had an Illinois net loss or an |
3 | | Illinois net loss deduction under Section 207 of the |
4 | | Illinois Income Tax Act for the taxable year in which |
5 | | the Credit is awarded, (ii) employed a minimum of 1,000 |
6 | | full-time employees in this State during the taxable |
7 | | year in which the Credit is awarded, (iii) has an |
8 | | Agreement under this Act on December 14, 2009 (the |
9 | | effective date of Public Act 96-834), and (iv) is in |
10 | | compliance with all provisions of that Agreement; |
11 | | (B) the Taxpayer (i) had an Illinois net loss or an |
12 | | Illinois net loss deduction under Section 207 of the |
13 | | Illinois Income Tax Act for the taxable year in which |
14 | | the Credit is awarded, (ii) employed a minimum of 1,000 |
15 | | full-time employees in this State during the taxable |
16 | | year in which the Credit is awarded, and (iii) has |
17 | | applied for an Agreement within 365 days after December |
18 | | 14, 2009 (the effective date of Public Act 96-834); |
19 | | (C) the Taxpayer (i) had an Illinois net operating |
20 | | loss carryforward under Section 207 of the Illinois |
21 | | Income Tax Act in a taxable year ending during calendar |
22 | | year 2008, (ii) has applied for an Agreement within 150 |
23 | | days after the effective date of this amendatory Act of |
24 | | the 96th General Assembly, (iii) creates at least 400 |
25 | | new jobs in Illinois, (iv) retains at least 2,000 jobs |
26 | | in Illinois that would have been at risk of relocation |
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1 | | out of Illinois over a 10-year period, and (v) makes a |
2 | | capital investment of at least $75,000,000; |
3 | | (D) the Taxpayer (i) had an Illinois net operating |
4 | | loss carryforward under Section 207 of the Illinois |
5 | | Income Tax Act in a taxable year ending during calendar |
6 | | year 2009, (ii) has applied for an Agreement within 150 |
7 | | days after the effective date of this amendatory Act of |
8 | | the 96th General Assembly, (iii) creates at least 150 |
9 | | new jobs, (iv) retains at least 1,000 jobs in Illinois |
10 | | that would have been at risk of relocation out of |
11 | | Illinois over a 10-year period, and (v) makes a capital |
12 | | investment of at least $57,000,000; or |
13 | | (E) the Taxpayer (i) employed at least 2,500 |
14 | | full-time employees in the State during the year in |
15 | | which the Credit is awarded, (ii) commits to make at |
16 | | least $500,000,000 in combined capital improvements |
17 | | and project costs under the Agreement, (iii) applies |
18 | | for an Agreement between January 1, 2011 and June 30, |
19 | | 2011, (iv) executes an Agreement for the Credit during |
20 | | calendar year 2011, and (v) was incorporated no more |
21 | | than 5 years before the filing of an application for an |
22 | | Agreement. |
23 | | (1.5) The election under this subsection (f) may also |
24 | | be made by a Taxpayer for any Credit awarded pursuant to an |
25 | | agreement that was executed between January 1, 2011 and |
26 | | June 30, 2011, if the Taxpayer (i) is primarily engaged in |
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1 | | the manufacture of inner tubes or tires, or both, from |
2 | | natural and synthetic rubber, (ii) employs a minimum of |
3 | | 2,400 full-time employees in Illinois at the time of |
4 | | application, (iii) creates at least 350 full-time jobs and |
5 | | retains at least 250 full-time jobs in Illinois that would |
6 | | have been at risk of being created or retained outside of |
7 | | Illinois, and (iv) makes a capital investment of at least |
8 | | $200,000,000 at the project location. |
9 | | (1.6) The election under this subsection (f) may also |
10 | | be made by a Taxpayer for any Credit awarded pursuant to an |
11 | | agreement that was executed within 150 days after the |
12 | | effective date of this amendatory Act of the 97th General |
13 | | Assembly, if the Taxpayer (i) is primarily engaged in the |
14 | | operation of a discount department store, (ii) maintains |
15 | | its corporate headquarters in Illinois, (iii) employs a |
16 | | minimum of 4,250 full-time employees at its corporate |
17 | | headquarters in Illinois at the time of application, (iv) |
18 | | retains at least 4,250 full-time jobs in Illinois that |
19 | | would have been at risk of being relocated outside of |
20 | | Illinois, (v) had a minimum of $40,000,000,000 in total |
21 | | revenue in 2010, and (vi) makes a capital investment of at |
22 | | least $300,000,000 at the project location. |
23 | | (1.7) Notwithstanding any other provision of law, the |
24 | | election under this subsection (f) may also be made by a |
25 | | Taxpayer for any Credit awarded pursuant to an agreement |
26 | | that was executed or applied for on or after July 1, 2011 |
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1 | | and on or before March 31, 2012, if the Taxpayer is |
2 | | primarily engaged in the manufacture of original and |
3 | | aftermarket filtration parts and products for automobiles, |
4 | | motor vehicles, light duty motor vehicles, light trucks and |
5 | | utility vehicles, and heavy duty trucks, (ii) employs a |
6 | | minimum of 1,000 full-time employees in Illinois at the |
7 | | time of application, (iii) creates at least 250 full-time |
8 | | jobs in Illinois, (iv) relocates its corporate |
9 | | headquarters to Illinois from another state, and (v) makes |
10 | | a capital investment of at least $4,000,000 at the project |
11 | | location. |
12 | | (2) An election under this subsection shall allow the |
13 | | credit to be taken against payments otherwise due under |
14 | | Section 704A of the Illinois Income Tax Act during the |
15 | | first calendar year beginning after the end of the taxable |
16 | | year in which the credit is awarded under this Act. |
17 | | (3) The election shall be made in the form and manner |
18 | | required by the Illinois Department of Revenue and, once |
19 | | made, shall be irrevocable. |
20 | | (4) If a Taxpayer who meets the requirements of |
21 | | subparagraph (A) of paragraph (1) of this subsection (f) |
22 | | elects to claim the Credit against its withholdings as |
23 | | provided in this subsection (f), then, on and after the |
24 | | date of the election, the terms of the Agreement between |
25 | | the Taxpayer and the Department may not be further amended |
26 | | during the term of the Agreement. |
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1 | | (g) A pass-through entity that has been awarded a credit |
2 | | under this Act, its shareholders, or its partners may treat |
3 | | some or all of the credit awarded pursuant to this Act as a tax |
4 | | payment for purposes of the Illinois Income Tax Act. The term |
5 | | "tax payment" means a payment as described in Article 6 or |
6 | | Article 8 of the Illinois Income Tax Act or a composite payment |
7 | | made by a pass-through entity on behalf of any of its |
8 | | shareholders or partners to satisfy such shareholders' or |
9 | | partners' taxes imposed pursuant to subsections (a) and (b) of |
10 | | Section 201 of the Illinois Income Tax Act. In no event shall |
11 | | the amount of the award credited pursuant to this Act exceed |
12 | | the Illinois income tax liability of the pass-through entity or |
13 | | its shareholders or partners for the taxable year. |
14 | | (Source: P.A. 96-834, eff. 12-14-09; 96-836, eff. 12-16-09; |
15 | | 96-905, eff. 6-4-10; 96-1000, eff. 7-2-10; 96-1534, eff. |
16 | | 3-4-11; 97-2, eff. 5-6-11; 97-636, eff. 6-1-12 .)
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17 | | (35 ILCS 10/5-45)
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18 | | Sec. 5-45. Amount and duration of the credit.
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19 | | (a) The Department shall
determine the amount and
duration |
20 | | of the credit awarded under this Act. The duration of the
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21 | | credit may not exceed 10 taxable years.
The credit may be |
22 | | stated as
a percentage of the Incremental Income Tax |
23 | | attributable
to the applicant's project and may include a fixed |
24 | | dollar limitation.
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25 | | (b) Notwithstanding subsection (a),
and except as the |
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1 | | credit may be applied in a carryover year pursuant to Section
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2 | | 211(4) of the Illinois Income Tax Act, the credit may be |
3 | | applied against the
State income tax liability , or the tax |
4 | | liability under Section 409, 444, or 444.1 of the Illinois |
5 | | Insurance Code, in more than 10 taxable years but not in more |
6 | | than
15 taxable years for an eligible business
that (i) |
7 | | qualifies under this Act
and the Corporate Headquarters |
8 | | Relocation Act and has in fact undertaken a
qualifying project |
9 | | within the time frame specified by the Department of
Commerce |
10 | | and Economic Opportunity under that Act, and (ii) applies |
11 | | against its
State income tax liability and insurance tax |
12 | | liability , during the entire 15-year
period, no more than 60% |
13 | | of the maximum
credit per year that would otherwise be |
14 | | available under this Act.
|
15 | | (Source: P.A. 94-793, eff. 5-19-06.)
|
16 | | Section 15. The Illinois Insurance Code is amended by |
17 | | adding Section 405.1 as follows: |
18 | | (215 ILCS 5/405.1 new) |
19 | | Sec. 405.1. Economic Development for a Growing Economy Tax |
20 | | Credit. Credits may be granted against the taxes imposed under |
21 | | Section 409, 444, or 444.1 of this Act on or after the |
22 | | effective date of this amendatory Act of the 99th General |
23 | | Assembly as provided in Section 211 of the Illinois Income Tax |
24 | | Act or the Economic Development for a Growing Economy Tax |