HB4071 99TH GENERAL ASSEMBLY

LRB099 08094 HLH 28240 b

99TH GENERAL ASSEMBLY
State of Illinois
2015 and 2016
HB4071

Introduced , by Rep. Katherine Cloonen

SYNOPSIS AS INTRODUCED:

35 ILCS 5/224 new

Amends the Illinois Income Tax Act. Creates a credit for each small business taxpayer in an amount equal to 50%, but in no event to exceed $100,000, of the amount paid by the small business taxpayer during the taxable year to an insolvent debtor or a trustee as a result of a recapture under Section 547(b) of the federal Bankruptcy Code. Provides that the term "small business taxpayer" means a business employing no more than 200 employees. 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. Recapture credit.

(a) For taxable years beginning on or after January 1, 2016 and ending prior to December 31, 2021, each small business taxpayer is entitled to a credit against the tax imposed by subsections (a) and (b) of Section 201 in an amount equal to 50%, but in no event to exceed $100,000, of the amount paid by the small business taxpayer during the taxable year to an insolvent debtor or a trustee as a result of a recapture under Section 547(b) of the federal Bankruptcy Code. In no event shall a credit under this Section reduce the taxpayer's liability to less than zero. If the amount of the 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 tax credit shall be applied to the earliest year for which there is a tax liability. If there are credits for more than one year that are available to offset a liability, the earlier credit shall be applied first.

(b) 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 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.

(c) For the purposes of this Section, "small business taxpayer" means a business employing no more than 200 employees.

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