103RD GENERAL ASSEMBLY
State of Illinois
2023 and 2024
SB3939

 

Introduced 5/1/2024, by Sen. Lakesia Collins

 

SYNOPSIS AS INTRODUCED:
 
35 ILCS 5/229

    Amends the Illinois Income Tax Act. Provides that, if a taxpayer is awarded a credit by the Department of Commerce and Economic Opportunity in connection with a qualifying Illinois data center located in a qualified area or a data center developed by a minority-owned business, a women-owned business, or a business owned a person with a disability, then the taxpayer is entitled to an additional income tax credit in an amount equal to 5% of the taxpayer's investment in qualified tangible personal property used in the construction or operation of that data center. Effective immediately.


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A BILL FOR

 

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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
5changing Section 229 as follows:
 
6    (35 ILCS 5/229)
7    Sec. 229. Data center construction employment tax credit.
8    (a) A taxpayer who has been awarded a credit by the
9Department of Commerce and Economic Opportunity under Section
10605-1025 of the Department of Commerce and Economic
11Opportunity Law of the Civil Administrative Code of Illinois
12is entitled to a credit against the taxes imposed under
13subsections (a) and (b) of Section 201 of this Act. The amount
14of the credit shall be 20% of the wages paid during the taxable
15year to a full-time or part-time employee of a construction
16contractor employed by a certified data center if those wages
17are paid for the construction of a new data center in a
18geographic area that meets any one of the following criteria:
19        (1) the area has a poverty rate of at least 20%,
20    according to the U.S. Census Bureau American Community
21    Survey 5-Year Estimates;
22        (2) 75% or more of the children in the area
23    participate in the federal free lunch program, according

 

 

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1    to reported statistics from the State Board of Education;
2        (3) 20% or more of the households in the area receive
3    assistance under the Supplemental Nutrition Assistance
4    Program (SNAP), according to data from the U.S. Census
5    Bureau American Community Survey 5-year Estimates; or
6        (4) the area has an average unemployment rate, as
7    determined by the Department of Employment Security, that
8    is more than 120% of the national unemployment average, as
9    determined by the U.S. Department of Labor, for a period
10    of at least 2 consecutive calendar years preceding the
11    date of the application.
12    (a-5) For taxable years beginning on or after January 1,
132025, if the taxpayer is awarded a credit under Section
14605-1025 of the Department of Commerce and Economic
15Opportunity Law of the Civil Administrative Code of Illinois
16in connection with a qualifying Illinois data center located
17in a qualified area or a data center developed by a qualified
18business enterprise, then the taxpayer is entitled to an
19additional credit against the tax imposed by subsections (a)
20and (b) of Section 201 in an amount equal to 5% of the
21taxpayer's investment in qualified tangible personal property
22used in the construction or operation of that data center. The
23credit shall be available for a period of 5 taxable years after
24the property is placed in service. The taxpayer may transfer
25the credit in accordance with rules adopted by the Department
26of Commerce and Economic Opportunity.

 

 

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1    (a-10) For taxable years ending before December 31, 2023,
2if the taxpayer is a partnership, a Subchapter S corporation,
3or a limited liability company that has elected partnership
4tax treatment, the credit shall be allowed to the partners,
5shareholders, or members in accordance with the determination
6of income and distributive share of income under Sections 702
7and 704 and subchapter S of the Internal Revenue Code, as
8applicable. For taxable years ending on or after December 31,
92023, if the taxpayer is a partnership or a Subchapter S
10corporation, then the provisions of Section 251 apply. The
11Department, in cooperation with the Department of Commerce and
12Economic Opportunity, shall adopt rules to enforce and
13administer this Section. This Section is exempt from the
14provisions of Section 250 of this Act.
15    (b) In no event shall a credit under this Section reduce
16the taxpayer's liability to less than zero. If the amount of
17the credit exceeds the tax liability for the year, the excess
18may be carried forward and applied to the tax liability of the
195 taxable years following the excess credit year. The tax
20credit shall be applied to the earliest year for which there is
21a tax liability. If there are credits for more than one year
22that are available to offset a liability, the earlier credit
23shall be applied first.
24    (c) No credit shall be allowed with respect to any
25certification for any taxable year ending after the revocation
26of the certification by the Department of Commerce and

 

 

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1Economic Opportunity. Upon receiving notification by the
2Department of Commerce and Economic Opportunity of the
3revocation of certification, the Department shall notify the
4taxpayer that no credit is allowed for any taxable year ending
5after the revocation date, as stated in such notification. If
6any credit has been allowed with respect to a certification
7for a taxable year ending after the revocation date, any
8refund paid to the taxpayer for that taxable year shall, to the
9extent of that credit allowed, be an erroneous refund within
10the meaning of Section 912 of this Act.
11    (d) As used in this Section:
12    "Qualified area" means an opportunity zone, an area
13designated as an R3 community pursuant to the Cannabis
14Regulation and Tax Act, or a community designated as a
15Disproportionately Impacted Area that is eligible for
16participation in the Illinois Adult-Use Cannabis Social Equity
17Program administered by the Department of Commerce and
18Economic Opportunity.
19    "Qualified business enterprise" means a minority-owned
20business, a women-owned business, or a business owned a person
21with a disability, as those terms are defined in the Business
22Enterprise for Minorities, Women, and Persons with
23Disabilities Act.
24    "Qualified tangible personal property" has the meaning
25given to that term in Section 605-1025 of the Department of
26Commerce and Economic Opportunity Law of the Civil

 

 

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1Administrative Code of Illinois.
2    (e) This Section is exempt from the provisions of Section
3250.
4(Source: P.A. 102-558, eff. 8-20-21; 103-396, eff. 1-1-24.)
 
5    Section 99. Effective date. This Act takes effect upon
6becoming law.