HB0318 101ST GENERAL ASSEMBLY

LRB101 03998 HLH 49006 b

101ST GENERAL ASSEMBLY
State of Illinois
2019 and 2020
HB0318

Introduced , by Rep. David McSweeney

SYNOPSIS AS INTRODUCED:

35 ILCS 5/229 new

Amends the Illinois Income Tax Act. Creates a credit in an amount equal to the investment made by the taxpayer during the taxable year in a Qualified Opportunity Fund. Provides that no such credit may be taken for any taxable year that begins prior to January 1, 2020. Provides that excess credits may be carried forward or back. Provides that the aggregate amount of the Qualified Opportunity Fund tax credit shall be limited to $100,000,000 per calendar year. Provides that the credit is exempt from the Act's automatic sunset provision. Effective immediately.

FISCAL NOTE ACT MAY APPLY

A BILL FOR

AN ACT concerning revenue.

Be it enacted by the People of the State of Illinois, represented in the General Assembly:

Section 5. The Illinois Income Tax Act is amended by adding Section 229 as follows:

(35 ILCS 5/229 new)

Sec. 229. Qualified Opportunity Fund credit.

(a) As used in this Section:

"Applicant" means a corporation, partnership, limited liability company, or a natural person that makes an investment in a Qualified Opportunity Fund established under Section 1400Z-2 of the Internal Revenue Code.

"Claimant" means an applicant that is awarded a credit under this Section by the Department.

"Department" means the Department of Commerce and Economic Opportunity.

(b) A claimant may claim a credit against the tax imposed under subsections (a) and (b) of Section 201 of this Act in an amount equal to the claimant's investment during the taxable year in a Qualified Opportunity Fund established under Section 1400Z-2 of the Internal Revenue Code.

(c) Credits may be awarded for investments made on or after the date on which the Qualified Opportunity Fund is created; however, no credit may be taken for any taxable year that begins prior to January 1, 2020. The credit under this Section may not exceed the taxpayer's Illinois income tax liability for the taxable year. If the amount of the credit exceeds the tax liability for the year, then the excess may be carried forward and applied to the tax liability of the 5 taxable years following the excess credit year or carried back and applied to the tax liability of the 3 taxable years immediately preceding the excess credit year. The credit shall be applied to the earliest year for which there is a tax liability. If there are credits from more than one tax year that are available to offset a liability, the earlier credit shall be applied first. In the case of a partnership or Subchapter S Corporation, the credit is allowed to the partners or shareholders in accordance with the determination of income and distributive share of income under Sections 702 and 704 and Subchapter S of the Internal Revenue Code.

(d) A transfer of the credit may be made by the taxpayer, in accordance with rules adopted by the Department, within one year after the credit is awarded.

(e) The aggregate amount of the tax credits that may be claimed under this Section shall be limited to $100,000,000 per calendar year. That amount shall be allocated to qualified applicants each year on a pro rata basis. The Department shall implement a program to certify applicants for credits under this Section. Upon satisfactory review, the Department shall issue a tax credit certificate stating the amount of the tax credit to which the applicant is entitled. The Department, in consultation with the Department of Revenue, shall adopt rules to administer this Section.

(f) This Section is exempt from the provisions of Section 250.

Section 99. Effective date. This Act takes effect upon becoming law.