INC TX-PFAS-FREE FIRE EQUIP
The bill is set to take effect immediately and will be applicable to taxable years starting from January 1, 2025, and continuing until January 1, 2035. This initiative is a clear move towards addressing environmental health concerns associated with PFAS, which have been proven to have hazardous effects on both health and the environment. By incentivizing the development of PFAS-free fire prevention technologies, Illinois aims to reduce the ecological footprint of fire prevention practices while enhancing public safety.
House Bill 5424 amends the Illinois Income Tax Act by introducing a tax credit for fire equipment distributors who are engaged in the research and development of alternative fire prevention equipment that does not contain perfluoroalkyl or polyfluoroalkyl substances (PFAS). The credit is designed to support distributors who are actively working towards environmentally safer fire prevention solutions. Under the provisions of the bill, qualifying taxpayers may receive a credit equaling 75% of their expenditures for developing such equipment during the fiscal year.
While HB5424 provides a significant incentive for innovation in fire prevention equipment, it may also raise concerns regarding the limitations on the total amount of credits awarded, capped at $5,000,000 per year. Critics may argue that this cap could restrict the ability of smaller businesses to fully benefit from the program, potentially limiting its overall effectiveness. Additionally, stakeholders in the fire equipment industry might express concern about the resources required to conduct qualifying research and development, questioning whether the potential tax relief justifies these investments.