HB2565 98TH GENERAL ASSEMBLY

LRB098 07346 HLH 37409 b

98TH GENERAL ASSEMBLY
State of Illinois
2013 and 2014
HB2565

Introduced , by Rep. Thaddeus Jones

SYNOPSIS AS INTRODUCED:

35 ILCS 5/224 new

Amends the Illinois Income Tax Act. Creates a credit in an amount equal $500 times the number of full-time Illinois employees of a certified new business firm and its corresponding sponsor firm in each of the 3 years after the firm is certified as a new business. 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 224 as follows:

(35 ILCS 5/224 new)

Sec. 224. Certified new business credit.

(a) For taxable years beginning on or after January 1, 2014, each sponsor firm and each certified new business firm is entitled to a credit against the tax imposed by subsections (a) and (b) of Section 201 in an amount equal $500 times the number of full-time Illinois employees of the certified new business firm in each of the 3 years after the firm is certified as a new business.

(b) "Certified new business firm" or "new business firm" means a business that is certified by the Department under this Section. To qualify as a certified new business, the business must:

(1) be a validly organized and existing corporation, limited liability company, limited partnership, general partnership, limited liability partnership, or sole proprietorship;

(2) have been doing business for at least 3 years at the time it applies for the credit;

(3) have a place of business outside of the State at the time of application;

(4) not have had a place of business within the State for at least 3 years at the time it applies for the credit; and

(5) not be a tenant or affiliate of the sponsor firm.

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

"Sponsor firm" means a business that:

(1) is a validly organized and existing corporation, limited liability company, limited partnership, general partnership, limited liability partnership, or sole proprietorship;

(2) has been doing business in Illinois for at least 3 years at the time it applies for the credit;

(3) has not entered into a rental agreement for a commercial rental unit with the new business firm; and

(4) is not a real estate agency, real estate developer, or landlord for the new business firm, or a bank or other lender who provides financing for the new business firm; and

(5) is not an affiliate of a new business firm.

(c) The certified new business firm and the sponsor firm shall complete a joint application with the Department prior to receiving credits under this Act. The Department may not approve more than $3,000,000 in credits in any State fiscal year.

(d) The tax credit may not reduce the taxpayer's liability to less than zero. If the amount of the tax credit exceeds the tax liability for the year, the excess may be carried forward and applied to the tax liability of the 5 taxable years following the excess credit year. The credit must 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, then the earlier credit must be applied first.

(e) For partners, shareholders of Subchapter S corporations, and owners of limited liability companies, if the liability company is treated as a partnership for purposes of federal and State income taxation, the credit under allowed this Section shall be determined 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.

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