Bill Text: IL HB4563 | 2013-2014 | 98th General Assembly | Introduced

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Bill Title: Amends the Economic Development for a Growing Economy Tax Credit Act. Provides that any taxpayer that has been awarded an EDGE credit for a taxable year beginning on or after January 1, 2014 may elect to claim up to 20% of the amount of the credit against its obligation to pay over withholding taxes. Amends the Illinois Income Tax Act to make conforming changes. Effective immediately.

Spectrum: Partisan Bill (Republican 1-0)

Status: (Failed) 2014-12-03 - Session Sine Die [HB4563 Detail]

Download: Illinois-2013-HB4563-Introduced.html

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98TH GENERAL ASSEMBLY State of Illinois 2013 and 2014 HB4563 Introduced , by Rep. David Harris SYNOPSIS AS INTRODUCED:
35 ILCS 5/704A
35 ILCS 10/5-15
Amends the Economic Development for a Growing Economy Tax Credit Act. Provides that any taxpayer that has been awarded an EDGE credit for a taxable year beginning on or after January 1, 2014 may elect to claim up to 20% of the amount of the credit against its obligation to pay over withholding taxes. Amends the Illinois Income Tax Act to make conforming changes. Effective immediately.
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FISCAL NOTE ACT MAY APPLY
A BILL FOR
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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
changing Section 704A as follows:
(35 ILCS 5/704A)
Sec. 704A. Employer's return and payment of tax withheld.
(a) In general, every employer who deducts and withholds or
is required to deduct and withhold tax under this Act on or
after January 1, 2008 shall make those payments and returns as
provided in this Section.
(b) Returns. Every employer shall, in the form and manner
required by the Department, make returns with respect to taxes
withheld or required to be withheld under this Article 7 for
each quarter beginning on or after January 1, 2008, on or
before the last day of the first month following the close of
that quarter.
(c) Payments. With respect to amounts withheld or required
to be withheld on or after January 1, 2008:
(1) Semi-weekly payments. For each calendar year, each
employer who withheld or was required to withhold more than
$12,000 during the one-year period ending on June 30 of the
immediately preceding calendar year, payment must be made:

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(A) on or before each Friday of the calendar year,
for taxes withheld or required to be withheld on the
immediately preceding Saturday, Sunday, Monday, or
Tuesday;
(B) on or before each Wednesday of the calendar
year, for taxes withheld or required to be withheld on
the immediately preceding Wednesday, Thursday, or
Friday.
Beginning with calendar year 2011, payments made under
this paragraph (1) of subsection (c) must be made by
electronic funds transfer.
(2) Semi-weekly payments. Any employer who withholds
or is required to withhold more than $12,000 in any quarter
of a calendar year is required to make payments on the
dates set forth under item (1) of this subsection (c) for
each remaining quarter of that calendar year and for the
subsequent calendar year.
(3) Monthly payments. Each employer, other than an
employer described in items (1) or (2) of this subsection,
shall pay to the Department, on or before the 15th day of
each month the taxes withheld or required to be withheld
during the immediately preceding month.
(4) Payments with returns. Each employer shall pay to
the Department, on or before the due date for each return
required to be filed under this Section, any tax withheld
or required to be withheld during the period for which the

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return is due and not previously paid to the Department.
(d) Regulatory authority. The Department may, by rule:
(1) Permit employers, in lieu of the requirements of
subsections (b) and (c), to file annual returns due on or
before January 31 of the year for taxes withheld or
required to be withheld during the previous calendar year
and, if the aggregate amounts required to be withheld by
the employer under this Article 7 (other than amounts
required to be withheld under Section 709.5) do not exceed
$1,000 for the previous calendar year, to pay the taxes
required to be shown on each such return no later than the
due date for such return.
(2) Provide that any payment required to be made under
subsection (c)(1) or (c)(2) is deemed to be timely to the
extent paid by electronic funds transfer on or before the
due date for deposit of federal income taxes withheld from,
or federal employment taxes due with respect to, the wages
from which the Illinois taxes were withheld.
(3) Designate one or more depositories to which payment
of taxes required to be withheld under this Article 7 must
be paid by some or all employers.
(4) Increase the threshold dollar amounts at which
employers are required to make semi-weekly payments under
subsection (c)(1) or (c)(2).
(e) Annual return and payment. Every employer who deducts
and withholds or is required to deduct and withhold tax from a

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person engaged in domestic service employment, as that term is
defined in Section 3510 of the Internal Revenue Code, may
comply with the requirements of this Section with respect to
such employees by filing an annual return and paying the taxes
required to be deducted and withheld on or before the 15th day
of the fourth month following the close of the employer's
taxable year. The Department may allow the employer's return to
be submitted with the employer's individual income tax return
or to be submitted with a return due from the employer under
Section 1400.2 of the Unemployment Insurance Act.
(f) Magnetic media and electronic filing. Any W-2 Form
that, under the Internal Revenue Code and regulations
promulgated thereunder, is required to be submitted to the
Internal Revenue Service on magnetic media or electronically
must also be submitted to the Department on magnetic media or
electronically for Illinois purposes, if required by the
Department.
(g) For amounts deducted or withheld after December 31,
2009, a taxpayer who makes an election under subsection (f) of
Section 5-15 of the Economic Development for a Growing Economy
Tax Credit Act for a taxable year shall be allowed a credit
against payments due under this Section for amounts withheld
during the first calendar year beginning after the end of that
taxable year equal to the amount of the credit for the
incremental income tax attributable to full-time employees of
the taxpayer awarded to the taxpayer by the Department of

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Commerce and Economic Opportunity under the Economic
Development for a Growing Economy Tax Credit Act for the
taxable year and credits not previously claimed and allowed to
be carried forward under Section 211(4) of this Act as provided
in subsection (f) of Section 5-15 of the Economic Development
for a Growing Economy Tax Credit Act, except that, in the case
of an election made under item (1.8) of subsection (f) of
Section 5-15 of the Economic Development for a Growing Economy
Tax Credit Act, the amount of the credit that may be taken
against payments due under this Section shall be limited to 20%
of the amount of the credit awarded under the Economic
Development for a Growing Economy Tax Credit Act. The credit or
credits may not reduce the taxpayer's obligation for any
payment due under this Section to less than zero. If the amount
of the credit or credits exceeds the total payments due under
this Section with respect to amounts withheld during the
calendar year, the excess may be carried forward and applied
against the taxpayer's liability under this Section in the
succeeding calendar years as allowed to be carried forward
under paragraph (4) of Section 211 of this Act. The credit or
credits shall be applied to the earliest year for which there
is a tax liability. If there are credits from more than one
taxable year that are available to offset a liability, the
earlier credit shall be applied first. Each employer who
deducts and withholds or is required to deduct and withhold tax
under this Act and who retains income tax withholdings under

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subsection (f) of Section 5-15 of the Economic Development for
a Growing Economy Tax Credit Act must make a return with
respect to such taxes and retained amounts in the form and
manner that the Department, by rule, requires and pay to the
Department or to a depositary designated by the Department
those withheld taxes not retained by the taxpayer. For purposes
of this subsection (g), the term taxpayer shall include
taxpayer and members of the taxpayer's unitary business group
as defined under paragraph (27) of subsection (a) of Section
1501 of this Act. This Section is exempt from the provisions of
Section 250 of this Act.
(h) An employer may claim a credit against payments due
under this Section for amounts withheld during the first
calendar year ending after the date on which a tax credit
certificate was issued under Section 35 of the Small Business
Job Creation Tax Credit Act. The credit shall be equal to the
amount shown on the certificate, but may not reduce the
taxpayer's obligation for any payment due under this Section to
less than zero. If the amount of the credit exceeds the total
payments due under this Section with respect to amounts
withheld during the calendar year, the excess may be carried
forward and applied against the taxpayer's liability under this
Section in the 5 succeeding calendar years. The credit shall be
applied to the earliest year for which there is a tax
liability. If there are credits from more than one calendar
year that are available to offset a liability, the earlier

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credit shall be applied first. This Section is exempt from the
provisions of Section 250 of this Act.
(Source: P.A. 96-834, eff. 12-14-09; 96-888, eff. 4-13-10;
96-905, eff. 6-4-10; 96-1027, eff. 7-12-10; 97-333, eff.
8-12-11; 97-507, eff. 8-23-11.)
Section 10. The Economic Development for a Growing Economy
Tax Credit Act is amended by changing Section 5-15 as follows:
(35 ILCS 10/5-15)
Sec. 5-15. Tax Credit Awards. Subject to the conditions set
forth in this Act, a Taxpayer is entitled to a Credit against
or, as described in subsection (g) of this Section, a payment
towards taxes imposed pursuant to subsections (a) and (b) of
Section 201 of the Illinois Income Tax Act that may be imposed
on the Taxpayer for a taxable year beginning on or after
January 1, 1999, if the Taxpayer is awarded a Credit by the
Department under this Act for that taxable year.
(a) The Department shall make Credit awards under this Act
to foster job creation and retention in Illinois.
(b) A person that proposes a project to create new jobs in
Illinois must enter into an Agreement with the Department for
the Credit under this Act.
(c) The Credit shall be claimed for the taxable years
specified in the Agreement.
(d) The Credit shall not exceed the Incremental Income Tax

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attributable to the project that is the subject of the
Agreement.
(e) Nothing herein shall prohibit a Tax Credit Award to an
Applicant that uses a PEO if all other award criteria are
satisfied.
(f) In lieu of the Credit allowed under this Act against
the taxes imposed pursuant to subsections (a) and (b) of
Section 201 of the Illinois Income Tax Act for any taxable year
ending on or after December 31, 2009, the Taxpayer may elect to
claim the Credit against its obligation to pay over withholding
under Section 704A of the Illinois Income Tax Act.
(1) The election under this subsection (f) may be made
only by a Taxpayer that (i) is primarily engaged in one of
the following business activities: water purification and
treatment, motor vehicle metal stamping, automobile
manufacturing, automobile and light duty motor vehicle
manufacturing, motor vehicle manufacturing, light truck
and utility vehicle manufacturing, heavy duty truck
manufacturing, motor vehicle body manufacturing, cable
television infrastructure design or manufacturing, or
wireless telecommunication or computing terminal device
design or manufacturing for use on public networks and (ii)
meets the following criteria:
(A) the Taxpayer (i) had an Illinois net loss or an
Illinois net loss deduction under Section 207 of the
Illinois Income Tax Act for the taxable year in which

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the Credit is awarded, (ii) employed a minimum of 1,000
full-time employees in this State during the taxable
year in which the Credit is awarded, (iii) has an
Agreement under this Act on December 14, 2009 (the
effective date of Public Act 96-834), and (iv) is in
compliance with all provisions of that Agreement;
(B) the Taxpayer (i) had an Illinois net loss or an
Illinois net loss deduction under Section 207 of the
Illinois Income Tax Act for the taxable year in which
the Credit is awarded, (ii) employed a minimum of 1,000
full-time employees in this State during the taxable
year in which the Credit is awarded, and (iii) has
applied for an Agreement within 365 days after December
14, 2009 (the effective date of Public Act 96-834);
(C) the Taxpayer (i) had an Illinois net operating
loss carryforward under Section 207 of the Illinois
Income Tax Act in a taxable year ending during calendar
year 2008, (ii) has applied for an Agreement within 150
days after the effective date of this amendatory Act of
the 96th General Assembly, (iii) creates at least 400
new jobs in Illinois, (iv) retains at least 2,000 jobs
in Illinois that would have been at risk of relocation
out of Illinois over a 10-year period, and (v) makes a
capital investment of at least $75,000,000;
(D) the Taxpayer (i) had an Illinois net operating
loss carryforward under Section 207 of the Illinois

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Income Tax Act in a taxable year ending during calendar
year 2009, (ii) has applied for an Agreement within 150
days after the effective date of this amendatory Act of
the 96th General Assembly, (iii) creates at least 150
new jobs, (iv) retains at least 1,000 jobs in Illinois
that would have been at risk of relocation out of
Illinois over a 10-year period, and (v) makes a capital
investment of at least $57,000,000; or
(E) the Taxpayer (i) employed at least 2,500
full-time employees in the State during the year in
which the Credit is awarded, (ii) commits to make at
least $500,000,000 in combined capital improvements
and project costs under the Agreement, (iii) applies
for an Agreement between January 1, 2011 and June 30,
2011, (iv) executes an Agreement for the Credit during
calendar year 2011, and (v) was incorporated no more
than 5 years before the filing of an application for an
Agreement.
(1.5) The election under this subsection (f) may also
be made by a Taxpayer for any Credit awarded pursuant to an
agreement that was executed between January 1, 2011 and
June 30, 2011, if the Taxpayer (i) is primarily engaged in
the manufacture of inner tubes or tires, or both, from
natural and synthetic rubber, (ii) employs a minimum of
2,400 full-time employees in Illinois at the time of
application, (iii) creates at least 350 full-time jobs and

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retains at least 250 full-time jobs in Illinois that would
have been at risk of being created or retained outside of
Illinois, and (iv) makes a capital investment of at least
$200,000,000 at the project location.
(1.6) The election under this subsection (f) may also
be made by a Taxpayer for any Credit awarded pursuant to an
agreement that was executed within 150 days after the
effective date of this amendatory Act of the 97th General
Assembly, if the Taxpayer (i) is primarily engaged in the
operation of a discount department store, (ii) maintains
its corporate headquarters in Illinois, (iii) employs a
minimum of 4,250 full-time employees at its corporate
headquarters in Illinois at the time of application, (iv)
retains at least 4,250 full-time jobs in Illinois that
would have been at risk of being relocated outside of
Illinois, (v) had a minimum of $40,000,000,000 in total
revenue in 2010, and (vi) makes a capital investment of at
least $300,000,000 at the project location.
(1.7) Notwithstanding any other provision of law, the
election under this subsection (f) may also be made by a
Taxpayer for any Credit awarded pursuant to an agreement
that was executed or applied for on or after July 1, 2011
and on or before March 31, 2012, if the Taxpayer is
primarily engaged in the manufacture of original and
aftermarket filtration parts and products for automobiles,
motor vehicles, light duty motor vehicles, light trucks and

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utility vehicles, and heavy duty trucks, (ii) employs a
minimum of 1,000 full-time employees in Illinois at the
time of application, (iii) creates at least 250 full-time
jobs in Illinois, (iv) relocates its corporate
headquarters to Illinois from another state, and (v) makes
a capital investment of at least $4,000,000 at the project
location.
(1.8) Notwithstanding any other provision of law, any
taxpayer that (i) is awarded a credit under this Act for a
taxable year beginning on or after January 1, 2014 and (ii)
is not a taxpayer that is otherwise entitled to make an
election under items (1) through (1.7) of this subsection
(f) may elect to claim up to 20% of the amount of the
credit awarded for the taxable year, including unused
credits that are carried forward from previous taxable
years, against its obligation to pay over withholding under
Section 704A of the Illinois Income Tax Act. If such an
election is made, the amount of the credit that may be used
against the taxes imposed under subsections (a) and (b) of
Section 201 of the Illinois Income Tax Act shall be reduced
accordingly.
(2) An election under this subsection shall allow the
credit to be taken against payments otherwise due under
Section 704A of the Illinois Income Tax Act during the
first calendar year beginning after the end of the taxable
year in which the credit is awarded under this Act.

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(3) The election shall be made in the form and manner
required by the Illinois Department of Revenue and, once
made, shall be irrevocable.
(4) If a Taxpayer who meets the requirements of
subparagraph (A) of paragraph (1) of this subsection (f)
elects to claim the Credit against its withholdings as
provided in this subsection (f), then, on and after the
date of the election, the terms of the Agreement between
the Taxpayer and the Department may not be further amended
during the term of the Agreement.
(g) A pass-through entity that has been awarded a credit
under this Act, its shareholders, or its partners may treat
some or all of the credit awarded pursuant to this Act as a tax
payment for purposes of the Illinois Income Tax Act. The term
"tax payment" means a payment as described in Article 6 or
Article 8 of the Illinois Income Tax Act or a composite payment
made by a pass-through entity on behalf of any of its
shareholders or partners to satisfy such shareholders' or
partners' taxes imposed pursuant to subsections (a) and (b) of
Section 201 of the Illinois Income Tax Act. In no event shall
the amount of the award credited pursuant to this Act exceed
the Illinois income tax liability of the pass-through entity or
its shareholders or partners for the taxable year.
(Source: P.A. 96-834, eff. 12-14-09; 96-836, eff. 12-16-09;
96-905, eff. 6-4-10; 96-1000, eff. 7-2-10; 96-1534, eff.
3-4-11; 97-2, eff. 5-6-11; 97-636, eff. 6-1-12.)

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