103RD GENERAL ASSEMBLY
State of Illinois
2023 and 2024
HB3076

 

Introduced 2/17/2023, by Rep. Justin Slaughter

 

SYNOPSIS AS INTRODUCED:
 
35 ILCS 5/234 new
215 ILCS 5/121-2.08  from Ch. 73, par. 733-2.08

    Amends the Illinois Income Tax Act. Creates an income tax credit and a credit against insurance premium taxes for business entities for the cost of providing certain commuter benefits to employees. Provides that the credit shall be equal to 50% of the cost of providing the eligible commuter benefits, but not to exceed $100 per individual employee per month. Effective immediately.


LRB103 30266 HLH 56694 b

 

 

A BILL FOR

 

HB3076LRB103 30266 HLH 56694 b

1    AN ACT concerning revenue.
 
2    Be it enacted by the People of the State of Illinois,
3represented in the General Assembly:
 
4    Section 5. The Illinois Income Tax Act is amended by
5adding Section 234 as follows:
 
6    (35 ILCS 5/234 new)
7    Sec. 234. Commuter benefits credit.
8    (a) As used in this Section:
9    "Business entity" means (i) A person conducting or
10operating a trade or business in the State; or (ii) an
11organization operating in the State that is exempt from
12taxation under § 501(c)(3) or (4) of the Internal Revenue
13Code.
14    "Instrument" means a pass, token, fare-card, voucher, or
15similar item.
16    "Ride-sharing" means for-profit driving services, taxis,
17rental car agencies or noncommercial transportation services.
18    (b) A business entity interested in claiming the tax
19credits for the cost of providing commuter benefits to its
20employees must complete the Illinois Commuter Tax Credit
21Registration Form for each tax year and submit it to the
22Department. The registration form should be filed with the
23Department as soon as possible after the decision is made to

 

 

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1seek qualification for the credit, but no later than the last
2day of the taxable year in which the credit will be claimed.
3    (c) For taxable years beginning after December 31, 2023, a
4business entity may claim a credit against the tax imposed by
5subsections (a) and (b) of Section 201 of this Act or the tax
6imposed by subsection (c) of Section 121-2.08 of the Illinois
7Insurance Code for the cost of providing either or both of the
8following commuter benefits to its employees:
9        (1) a vanpool that meets the following criteria and is
10    provided for the purpose of travel between an employee's
11    residence and place of employment if the transportation is
12    to or from a location in Illinois: (A) the vehicle must
13    have seating capacity for at least 6 adult individuals;
14    (B) at least 80% of the annual mileage incurred must be
15    between the employees' residences and their places of
16    employment; and (C) the number of employees transported
17    must be at least one-half of that vehicle's adult seating
18    capacity; or
19        (2) an instrument that entitles an employee, at no
20    added cost or at a reduced fare, to transportation to or
21    from a location in Illinois on a publicly-owned or
22    privately-owned mass transit system, taxi service, or
23    ride-sharing service.
24    The credit shall be equal to 50% of the cost of providing
25the eligible commuter benefits. The credit allowed may not
26exceed $100 per individual employee per month. The total

 

 

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1credit allowed may not exceed the total tax otherwise payable
2by the business entity for that taxable year determined after
3the application of any other credit, and the unused amount of
4the credit may not be carried over to any other taxable year.
5    (d) Partners, shareholders of subchapter S corporations,
6and owners of limited liability companies (if the limited
7liability company is treated as a partnership for purposes of
8federal and State income taxation) are entitled to a credit
9under this Section to be determined in accordance with the
10determination of income and distributive share of income under
11Sections 702 and 703 and subchapter S of the Internal Revenue
12Code.
13    (e) This Section is exempt from the provisions of Section
14250.
 
15    Section 10. The Illinois Insurance Code is amended by
16changing Section 121-2.08 as follows:
 
17    (215 ILCS 5/121-2.08)  (from Ch. 73, par. 733-2.08)
18    Sec. 121-2.08. Transactions in this State involving
19contracts of insurance independently procured directly from an
20unauthorized insurer by industrial insureds.
21    (a) As used in this Section:
22    "Exempt commercial purchaser" means exempt commercial
23purchaser as the term is defined in subsection (1) of Section
24445 of this Code.

 

 

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1    "Home state" means home state as the term is defined in
2subsection (1) of Section 445 of this Code.
3    "Industrial insured" means an insured:
4        (i) that procures the insurance of any risk or risks
5    of the kinds specified in Classes 2 and 3 of Section 4 of
6    this Code by use of the services of a full-time employee
7    who is a qualified risk manager or the services of a
8    regularly and continuously retained consultant who is a
9    qualified risk manager;
10        (ii) that procures the insurance directly from an
11    unauthorized insurer without the services of an
12    intermediary insurance producer; and
13        (iii) that is an exempt commercial purchaser whose
14    home state is Illinois.
15    "Insurance producer" means insurance producer as the term
16is defined in Section 500-10 of this Code.
17    "Qualified risk manager" means qualified risk manager as
18the term is defined in subsection (1) of Section 445 of this
19Code.
20    "Safety-Net Hospital" means an Illinois hospital that
21qualifies as a Safety-Net Hospital under Section 5-5e.1 of the
22Illinois Public Aid Code.
23    "Unauthorized insurer" means unauthorized insurer as the
24term is defined in subsection (1) of Section 445 of this Code.
25    (b) For contracts of insurance effective January 1, 2015
26or later, within 90 days after the effective date of each

 

 

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1contract of insurance issued under this Section, the insured
2shall file a report with the Director by submitting the report
3to the Surplus Line Association of Illinois in writing or in a
4computer readable format and provide information as designated
5by the Surplus Line Association of Illinois. The information
6in the report shall be substantially similar to that required
7for surplus line submissions as described in subsection (5) of
8Section 445 of this Code. Where applicable, the report shall
9satisfy, with respect to the subject insurance, the reporting
10requirement of Section 12 of the Fire Investigation Act.
11    (c) For contracts of insurance effective January 1, 2015
12through December 31, 2017, within 30 days after filing the
13report, the insured shall pay to the Director for the use and
14benefit of the State a sum equal to the gross premium of the
15contract of insurance multiplied by the surplus line tax rate,
16as described in paragraph (3) of subsection (a) of Section 445
17of this Code, and shall pay the fire marshal tax that would
18otherwise be due annually in March for insurance subject to
19tax under Section 12 of the Fire Investigation Act. For
20contracts of insurance effective January 1, 2018 or later,
21within 30 days after filing the report, the insured shall pay
22to the Director for the use and benefit of the State a sum
23equal to 0.5% of the gross premium of the contract of
24insurance, and shall pay the fire marshal tax that would
25otherwise be due annually in March for insurance subject to
26tax under Section 12 of the Fire Investigation Act. For

 

 

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1contracts of insurance effective January 1, 2015 or later,
2within 30 days after filing the report, the insured shall pay
3to the Surplus Line Association of Illinois a countersigning
4fee that shall be assessed at the same rate charged to members
5pursuant to subsection (4) of Section 445.1 of this Code. An
6insured is entitled to a credit against the tax imposed under
7this Section as provided in Section 232 of the Illinois Income
8Tax Act.
9    (d) For contracts of insurance effective January 1, 2015
10or later, the insured shall withhold the amount of the taxes
11and countersignature fee from the amount of premium charged by
12and otherwise payable to the insurer for the insurance. If the
13insured fails to withhold the tax and countersignature fee
14from the premium, then the insured shall be liable for the
15amounts thereof and shall pay the amounts as prescribed in
16subsection (c) of this Section.
17    (e) Contracts of insurance with an industrial insured that
18qualifies as a Safety-Net Hospital are not subject to
19subsections (b) through (d) of this Section.
20(Source: P.A. 100-535, eff. 9-22-17; 100-1118, eff. 11-27-18.)
 
21    Section 99. Effective date. This Act takes effect upon
22becoming law.