Illinois § 77-25

§ 77-25.

Tax credit awards. (a) Subject to the conditions set forth in this Act, a taxpayer is entitled to a credit against the tax imposed under subsections (a) and (b) of Section 201 of the Illinois Income Tax Act for taxable years beginning on or after January 1, 2026. The Department may award credits under this Act on and after January 1, 2027. (b) The credit under this Act shall not exceed 7% of the applicant's total capital improvement investments for the year for which the applicant seeks credit. Credits awarded under this Act shall not reduce a taxpayer's liability for the tax imposed by subsections (a) and (b) of Section 201 of the Illinois Income Tax Act to less than zero. Unused credit may be carried forward for a maximum of 10 years for use in future taxable years. Any taxpayer qualifying for credits under this Act shall not be eligible for the credits under subsections (e), (f), or (h) of Section 201 of the Illinois Income Tax Act for the same expenditures for the same taxable period. (c) The Department shall certify to the Department of Revenue: (1) the identity of taxpayers that are eligible to receive tax credits under this Act and (2) the amount of the credits awarded in each calendar year. Credits so earned and certified by the Department may be applied against the tax imposed by Section subsections (a) and (b) of Section 201 of the Illinois Income Tax Act for taxable years beginning on or after January 1, 2026. (d) Any applicant issued a certificate for a tax credit under this Act must report to the Department the total project tax benefits received. Reports are due no later than April 15 of the year in which the applicant is seeking the credit and shall cover the entire project period. Failure to report data may result in ineligibility to receive incentives. The Department, in consultation with the Department of Revenue, is authorized to adopt rules governing ineligibility to receive exemptions, including the length of ineligibility. Factors to be considered in determining whether a business is ineligible include, but are not limited to, prior compliance with the reporting requirements, cooperation in discontinuing and correcting violations, the extent of the violation, and whether the violation was willful or inadvertent. (e) The Department shall determine the amount and duration of the credit awarded under this Act, subject to the limitations set forth in this Act. The credit amount shall be determined based on the total amount of the capital improvement investment made by the taxpayer. A capital improvement investment of $10,000,000 or more but less than $50,000,000 shall result in a maximum credit of 3% of the capital improvement amount; a capital improvement investment of $50,000,000 or more but less than $100,000,000 shall result in a maximum credit of 5% of the capital improvement amount; a capital improvement investment of $100,000,000 or more shall result in a maximum credit of 7% of the capital improvement amount. Projects may be granted a tax credit award that reflects investments made within a maximum 5-year period. Each program agreement will detail a specific placed-in-service date by which the company must complete the project investment. Credit for a project shall be issued after the project is placed in service. (f) Nothing in this Section shall prevent the Department, in consultation with the Department of Revenue, from adopting rules to extend the sunset of any earned, existing, and unused tax credit or credits awarded under this Act that a taxpayer may be in possession of. (Source: P.A. 104-6, eff. 6-16-25.)