20 ILCS 663/40

(20 ILCS 663/40)

Sec. 40. Recapture. The Department of Revenue shall recapture, from the taxpayer that claimed the credit on a return, the tax credit allowed under this Act if:

(1) any amount of the federal tax credit available with respect to a qualified equity investment that is eligible for a tax credit under this Act is recaptured under Section 45D of the Internal Revenue Code of 1986, as amended. In that case, the Department of Revenue's recapture shall be proportionate to the federal recapture with respect to that qualified equity investment;

(2) the issuer redeems or makes principal repayment with respect to a qualified equity investment prior to the 7th anniversary of the issuance of the qualified equity investment. In that case, the Department of Revenue's recapture shall be proportionate to the amount of the redemption or repayment with respect to the qualified equity investment;

(3) the issuer fails to invest at least 85% of the cash purchase price of the qualified equity investment with respect to qualified equity investments made before January 1, 2017 and 100% of the cash purchase price of the qualified equity investment with respect to qualified equity investments made on or after January 1, 2017 in qualified low-income community investments in the State of Illinois within 12 months of the issuance of the qualified equity investment and maintain such level of investment in qualified low-income community investments in Illinois until the last credit allowance date for such qualified equity investment; or

(4) with respect to qualified equity investments made on or after January 1, 2017, the issuer violates Section 43 of this Act.

For purposes of this Section, an investment shall be considered held by an issuer even if the investment has been sold or repaid; provided that the issuer reinvests an amount equal to the capital returned to or recovered by the issuer from the original investment, exclusive of any profits realized, in another qualified low-income community investment in this State within 12 months after the receipt of that capital. An issuer is not required to reinvest capital returned from qualified low-income community investments after the 6th anniversary of the issuance of the qualified equity investment, the proceeds of which were used to make the qualified low-income community investment, and the qualified low-income community investment shall be considered held by the issuer through the 7th anniversary of the qualified equity investment's issuance.

The Department of Revenue shall provide notice to the qualified community development entity of any proposed recapture of tax credits pursuant to this Section. The entity shall have 90 days to cure any deficiency indicated in the Department of Revenue's original recapture notice and avoid such recapture. If the entity fails or is unable to cure such deficiency with the 90-day period, the Department of Revenue shall provide the entity and the taxpayer from whom the credit is to be recaptured with a final order of recapture. Any tax credit for which a final recapture order has been issued shall be recaptured by the Department of Revenue from the taxpayer who claimed the tax credit on a tax return.

(Source: P.A. 100-408, eff. 8-25-17.)