Illinois General Assembly - Full Text of SB1660
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Full Text of SB1660  99th General Assembly

SB1660sam001 99TH GENERAL ASSEMBLY

Sen. Karen McConnaughay

Filed: 4/17/2015

 

 


 

 


 
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1
AMENDMENT TO SENATE BILL 1660

2    AMENDMENT NO. ______. Amend Senate Bill 1660 by replacing
3everything after the enacting clause with the following:
 
4    "Section 5. The Illinois Income Tax Act is amended by
5changing Section 211 as follows:
 
6    (35 ILCS 5/211)
7    Sec. 211. Economic Development for a Growing Economy Tax
8Credit. For tax years beginning on or after January 1, 1999, a
9Taxpayer who has entered into an Agreement under the Economic
10Development for a Growing Economy Tax Credit Act is entitled to
11a credit against the taxes imposed under subsections (a) and
12(b) of Section 201 of this Act and the taxes imposed under
13Sections 409, 444, and 444.1 of the Illinois Insurance Code in
14an amount to be determined in the Agreement. If the Taxpayer is
15a partnership or Subchapter S corporation, the credit shall be
16allowed to the partners or shareholders in accordance with the

 

 

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1determination of income and distributive share of income under
2Sections 702 and 704 and subchapter S of the Internal Revenue
3Code. The Department, in cooperation with the Department of
4Commerce and Economic Opportunity, shall prescribe rules to
5enforce and administer the provisions of this Section. This
6Section is exempt from the provisions of Section 250 of this
7Act.
8    The credit shall be subject to the conditions set forth in
9the Agreement and the following limitations:
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.
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
18    defined by Agreement.
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
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
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.
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
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.
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.
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.
12(Source: P.A. 94-793, eff. 5-19-06.)
 
13    Section 10. The Economic Development for a Growing Economy
14Tax Credit Act is amended by changing Sections 5-5, 5-15, and
155-45 as follows:
 
16    (35 ILCS 10/5-5)
17    Sec. 5-5. Definitions. As used in this Act:
18    "Agreement" means the Agreement between a Taxpayer and the
19Department under the provisions of Section 5-50 of this Act.
20    "Applicant" means a Taxpayer that is operating a business
21located or that the Taxpayer plans to locate within the State
22of Illinois and that is engaged in interstate or intrastate
23commerce for the purpose of manufacturing, processing,
24assembling, warehousing, or distributing products, conducting

 

 

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1research and development, providing tourism services, or
2providing services in interstate commerce, office industries,
3or agricultural processing, but excluding retail, retail food,
4health, or professional services. "Applicant" does not include
5a Taxpayer who closes or substantially reduces an operation at
6one location in the State and relocates substantially the same
7operation to another location in the State. This does not
8prohibit a Taxpayer from expanding its operations at another
9location in the State, provided that existing operations of a
10similar nature located within the State are not closed or
11substantially reduced. This also does not prohibit a Taxpayer
12from moving its operations from one location in the State to
13another location in the State for the purpose of expanding the
14operation provided that the Department determines that
15expansion cannot reasonably be accommodated within the
16municipality in which the business is located, or in the case
17of a business located in an incorporated area of the county,
18within the county in which the business is located, after
19conferring with the chief elected official of the municipality
20or county and taking into consideration any evidence offered by
21the municipality or county regarding the ability to accommodate
22expansion within the municipality or county.
23    "Committee" means the Illinois Business Investment
24Committee created under Section 5-25 of this Act within the
25Illinois Economic Development Board.
26    "Credit" means the amount agreed to between the Department

 

 

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1and Applicant under this Act, but not to exceed the Incremental
2Income Tax attributable to the Applicant's project.
3    "Department" means the Department of Commerce and Economic
4Opportunity.
5    "Director" means the Director of Commerce and Economic
6Opportunity.
7    "Full-time Employee" means an individual who is employed
8for consideration for at least 35 hours each week or who
9renders any other standard of service generally accepted by
10industry custom or practice as full-time employment. An
11individual for whom a W-2 is issued by a Professional Employer
12Organization (PEO) is a full-time employee if employed in the
13service of the Applicant for consideration for at least 35
14hours each week or who renders any other standard of service
15generally accepted by industry custom or practice as full-time
16employment to Applicant.
17    "Incremental Income Tax" means the total amount withheld
18during the taxable year from the compensation of New Employees
19under Article 7 of the Illinois Income Tax Act arising from
20employment at a project that is the subject of an Agreement.
21    "New Employee" means:
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.
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;
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
9        Agreement; or
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.
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:
19            (1) treated under the Agreement as a New Employee;
20        and
21            (2) promoted by the Taxpayer to another job.
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:
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;
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
5            (3) the employee was hired after the date the
6        letter described in paragraph (1) was issued.
7    "Noncompliance Date" means, in the case of a Taxpayer that
8is not complying with the requirements of the Agreement or the
9provisions of this Act, the day following the last date upon
10which the Taxpayer was in compliance with the requirements of
11the Agreement and the provisions of this Act, as determined by
12the Director, pursuant to Section 5-65.
13    "Pass Through Entity" means an entity that is exempt from
14the tax under subsection (b) or (c) of Section 205 of the
15Illinois Income Tax Act.
16    "Professional Employer Organization" (PEO) means an
17employee leasing company, as defined in Section 206.1(A)(2) of
18the Illinois Unemployment Insurance Act.
19    "Related Member" means a person that, with respect to the
20Taxpayer during any portion of the taxable year, is any one of
21the following:
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.
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
6    least 50% of the profits, capital, stock, or value of the
7    Taxpayer.
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.
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.
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
3    Section 1563(e) of the Internal Revenue Code.
4    "Taxpayer" means an individual, corporation, partnership,
5or other entity that has any Illinois Income Tax liability or
6any liability under Section 409, 444, or 444.1 of the Illinois
7Insurance Code.
8(Source: P.A. 94-793, eff. 5-19-06; 95-375, eff. 8-23-07.)
 
9    (35 ILCS 10/5-15)
10    Sec. 5-15. Tax Credit Awards. Subject to the conditions set
11forth in this Act, a Taxpayer is entitled to a Credit against
12or, as described in subsection (g) of this Section, a payment
13towards (i) taxes imposed pursuant to subsections (a) and (b)
14of Section 201 of the Illinois Income Tax Act that may be
15imposed on the Taxpayer for a taxable year beginning on or
16after January 1, 1999, (ii) taxes imposed on or after the
17effective date of this amendatory Act of the 99th General
18Assembly pursuant to Section 409, 444, or 444.1 of the Illinois
19Insurance Code, or (iii) both (i) and (ii), if the Taxpayer is
20awarded a Credit by the Department under this Act for that
21taxable year.
22    (a) The Department shall make Credit awards under this Act
23to foster job creation and retention in Illinois.
24    (b) A person that proposes a project to create new jobs in
25Illinois must enter into an Agreement with the Department for

 

 

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1the Credit under this Act.
2    (c) The Credit shall be claimed for the taxable years
3specified in the Agreement.
4    (d) The Credit shall not exceed the Incremental Income Tax
5attributable to the project that is the subject of the
6Agreement.
7    (e) Nothing herein shall prohibit a Tax Credit Award to an
8Applicant that uses a PEO if all other award criteria are
9satisfied.
10    (f) In lieu of the Credit allowed under this Act against
11the taxes imposed pursuant to subsections (a) and (b) of
12Section 201 of the Illinois Income Tax Act for any taxable year
13ending on or after December 31, 2009, the Taxpayer may elect to
14claim the Credit against its obligation to pay over withholding
15under 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
2under this Act, its shareholders, or its partners may treat
3some or all of the credit awarded pursuant to this Act as a tax
4payment for purposes of the Illinois Income Tax Act. The term
5"tax payment" means a payment as described in Article 6 or
6Article 8 of the Illinois Income Tax Act or a composite payment
7made by a pass-through entity on behalf of any of its
8shareholders or partners to satisfy such shareholders' or
9partners' taxes imposed pursuant to subsections (a) and (b) of
10Section 201 of the Illinois Income Tax Act. In no event shall
11the amount of the award credited pursuant to this Act exceed
12the Illinois income tax liability of the pass-through entity or
13its shareholders or partners for the taxable year.
14(Source: P.A. 96-834, eff. 12-14-09; 96-836, eff. 12-16-09;
1596-905, eff. 6-4-10; 96-1000, eff. 7-2-10; 96-1534, eff.
163-4-11; 97-2, eff. 5-6-11; 97-636, eff. 6-1-12.)
 
17    (35 ILCS 10/5-45)
18    Sec. 5-45. Amount and duration of the credit.
19    (a) The Department shall determine the amount and duration
20of the credit awarded under this Act. The duration of the
21credit may not exceed 10 taxable years. The credit may be
22stated as a percentage of the Incremental Income Tax
23attributable to the applicant's project and may include a fixed
24dollar limitation.
25    (b) Notwithstanding subsection (a), and except as the

 

 

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1credit may be applied in a carryover year pursuant to Section
2211(4) of the Illinois Income Tax Act, the credit may be
3applied against the State income tax liability, or the tax
4liability under Section 409, 444, or 444.1 of the Illinois
5Insurance Code, in more than 10 taxable years but not in more
6than 15 taxable years for an eligible business that (i)
7qualifies under this Act and the Corporate Headquarters
8Relocation Act and has in fact undertaken a qualifying project
9within the time frame specified by the Department of Commerce
10and Economic Opportunity under that Act, and (ii) applies
11against its State income tax liability and insurance tax
12liability, during the entire 15-year period, no more than 60%
13of the maximum credit per year that would otherwise be
14available under this Act.
15(Source: P.A. 94-793, eff. 5-19-06.)
 
16    Section 15. The Illinois Insurance Code is amended by
17adding Section 405.1 as follows:
 
18    (215 ILCS 5/405.1 new)
19    Sec. 405.1. Economic Development for a Growing Economy Tax
20Credit. Credits may be granted against the taxes imposed under
21Section 409, 444, or 444.1 of this Act on or after the
22effective date of this amendatory Act of the 99th General
23Assembly as provided in Section 211 of the Illinois Income Tax
24Act or the Economic Development for a Growing Economy Tax

 

 

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1Credit Act.".