Illinois 2025-2026 Regular Session

Illinois House Bill HB1147 Compare Versions

Only one version of the bill is available at this time.

Old	New	Differences
1	1	104TH GENERAL ASSEMBLY State of Illinois 2025 and 2026 HB1147 Introduced , by Rep. Dagmara Avelar SYNOPSIS AS INTRODUCED: New Act35 ILCS 5/246 new215 ILCS 5/409 from Ch. 73, par. 1021215 ILCS 5/444 from Ch. 73, par. 1056 Creates the Build Illinois Homes Tax Credit Act. Provides that owners of qualified low-income housing developments are eligible for credits against the taxes imposed by the Illinois Income Tax Act or taxes, penalties, fees, charges, and payments imposed by the Illinois Insurance Code. Amends the Illinois Income Tax Act and the Illinois Insurance Code to make conforming changes. Effective immediately. LRB104 03040 HLH 15937 b A BILL FOR 104TH GENERAL ASSEMBLY State of Illinois 2025 and 2026 HB1147 Introduced , by Rep. Dagmara Avelar SYNOPSIS AS INTRODUCED: New Act35 ILCS 5/246 new215 ILCS 5/409 from Ch. 73, par. 1021215 ILCS 5/444 from Ch. 73, par. 1056 New Act 35 ILCS 5/246 new 215 ILCS 5/409 from Ch. 73, par. 1021 215 ILCS 5/444 from Ch. 73, par. 1056 Creates the Build Illinois Homes Tax Credit Act. Provides that owners of qualified low-income housing developments are eligible for credits against the taxes imposed by the Illinois Income Tax Act or taxes, penalties, fees, charges, and payments imposed by the Illinois Insurance Code. Amends the Illinois Income Tax Act and the Illinois Insurance Code to make conforming changes. Effective immediately. LRB104 03040 HLH 15937 b LRB104 03040 HLH 15937 b A BILL FOR
2	2	104TH GENERAL ASSEMBLY State of Illinois 2025 and 2026 HB1147 Introduced , by Rep. Dagmara Avelar SYNOPSIS AS INTRODUCED:
3	3	New Act35 ILCS 5/246 new215 ILCS 5/409 from Ch. 73, par. 1021215 ILCS 5/444 from Ch. 73, par. 1056 New Act 35 ILCS 5/246 new 215 ILCS 5/409 from Ch. 73, par. 1021 215 ILCS 5/444 from Ch. 73, par. 1056
4	4	New Act
5	5	35 ILCS 5/246 new
6	6	215 ILCS 5/409 from Ch. 73, par. 1021
7	7	215 ILCS 5/444 from Ch. 73, par. 1056
8	8	Creates the Build Illinois Homes Tax Credit Act. Provides that owners of qualified low-income housing developments are eligible for credits against the taxes imposed by the Illinois Income Tax Act or taxes, penalties, fees, charges, and payments imposed by the Illinois Insurance Code. Amends the Illinois Income Tax Act and the Illinois Insurance Code to make conforming changes. Effective immediately.
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11	11	A BILL FOR
12	12	HB1147LRB104 03040 HLH 15937 b HB1147 LRB104 03040 HLH 15937 b
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14	14	1 AN ACT concerning revenue.
15	15	2 Be it enacted by the People of the State of Illinois,
16	16	3 represented in the General Assembly:
17	17	4 Section 1. Short title. This Act may be cited as the Build
18	18	5 Illinois Homes Tax Credit Act.
19	19	6 Section 5. Definitions. As used in this Act, unless the
20	20	7 context clearly requires otherwise:
21	21	8 "Allocation schedule certification" means a certification
22	22	9 issued by the owner of a qualified development, or by the
23	23	10 owner's designee, under subsection (d) of Section 15 of this
24	24	11 Act. The certification shall include the following:
25	25	12 (1) the building identification number for each
26	26	13 building included in the qualified development;
27	27	14 (2) the calendar year in which the last building of
28	28	15 the qualified development was placed in service;
29	29	16 (3) the amount of the credit allowed for each year of
30	30	17 the credit period;
31	31	18 (4) the amount of credit allocated to each qualified
32	32	19 taxpayer for the qualified development for the applicable
33	33	20 tax year; and
34	34	21 (5) confirmation of whether each qualified taxpayer
35	35	22 elects to apply the credit to income tax or insurance
36	36	23 premium tax.
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40	40	104TH GENERAL ASSEMBLY State of Illinois 2025 and 2026 HB1147 Introduced , by Rep. Dagmara Avelar SYNOPSIS AS INTRODUCED:
41	41	New Act35 ILCS 5/246 new215 ILCS 5/409 from Ch. 73, par. 1021215 ILCS 5/444 from Ch. 73, par. 1056 New Act 35 ILCS 5/246 new 215 ILCS 5/409 from Ch. 73, par. 1021 215 ILCS 5/444 from Ch. 73, par. 1056
42	42	New Act
43	43	35 ILCS 5/246 new
44	44	215 ILCS 5/409 from Ch. 73, par. 1021
45	45	215 ILCS 5/444 from Ch. 73, par. 1056
46	46	Creates the Build Illinois Homes Tax Credit Act. Provides that owners of qualified low-income housing developments are eligible for credits against the taxes imposed by the Illinois Income Tax Act or taxes, penalties, fees, charges, and payments imposed by the Illinois Insurance Code. Amends the Illinois Income Tax Act and the Illinois Insurance Code to make conforming changes. Effective immediately.
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49	49	A BILL FOR
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55	55	New Act
56	56	35 ILCS 5/246 new
57	57	215 ILCS 5/409 from Ch. 73, par. 1021
58	58	215 ILCS 5/444 from Ch. 73, par. 1056
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77	77	1 "Authority" means:
78	78	2 (1) the Illinois Housing Development Authority; or
79	79	3 (2) the City of Chicago Department of Housing.
80	80	4 "Building identification number" means the number assigned
81	81	5 to a building within the qualified development by an Authority
82	82	6 when allocating the federal tax credit.
83	83	7 "Credit" means the credit allowed under this Act.
84	84	8 "Credit period" means a period of 6 taxable years
85	85	9 beginning with the taxable year in which a qualified
86	86	10 development is placed in service. No credit period may include
87	87	11 a taxable year beginning prior to January 1, 2026. If a
88	88	12 qualified development consists of more than one building, then
89	89	13 the qualified development is deemed to be placed in service in
90	90	14 the taxable year in which the last building of the qualified
91	91	15 development is placed in service.
92	92	16 "Department" means the Department of Revenue.
93	93	17 "Federal tax credit" means the federal low-income housing
94	94	18 tax credit provided by Section 42 of the federal Internal
95	95	19 Revenue Code, including federal low-income housing tax credits
96	96	20 issued under 26 U.S.C. 42(h)(3) and 26 U.S.C. 42(h)(4).
97	97	21 "Qualified basis" means the qualified basis of the
98	98	22 qualified development as determined under Section 42 of the
99	99	23 federal Internal Revenue Code of 1986.
100	100	24 "Qualified development" means a qualified low-income
101	101	25 housing project, as that term is defined in Section 42 of the
102	102	26 federal Internal Revenue Code of 1986, that is located in the
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113	113	1 State and is determined to be eligible for the federal tax
114	114	2 credit set forth in Section 42 of the Internal Revenue Code.
115	115	3 "Qualified taxpayer" means an individual, person, firm,
116	116	4 corporation, or other entity that owns a direct or indirect
117	117	5 interest in a qualified development and that is subject to the
118	118	6 taxes imposed by subsections (a) and (b) of Section 201 of the
119	119	7 Illinois Income Tax Act or any privilege tax or retaliatory
120	120	8 tax, penalty, fee, charge, or payment imposed by the Illinois
121	121	9 Insurance Code.
122	122	10 "Reservation letter" means a reservation letter issued by
123	123	11 the Illinois Housing Development Authority or a reservation
124	124	12 agreement issued by the City of Chicago Department of Housing.
125	125	13 "State credit eligibility statement" means a statement
126	126	14 issued by an Authority under Section 10 or documents submitted
127	127	15 in satisfaction of a statement as allowed under Section 10.
128	128	16 "State tax return" means the income tax return filed with
129	129	17 the Department or the privilege and retaliatory tax return
130	130	18 filed with the Department of Insurance, as applicable.
131	131	19 Section 10. State credit eligibility statements. Following
132	132	20 construction or rehabilitation of the qualified development,
133	133	21 the applicable Authority shall issue a State credit
134	134	22 eligibility statement with respect to each building located in
135	135	23 the qualified development certifying that the building
136	136	24 qualifies for the credit under this Act and specifying:
137	137	25 (1) the calendar year in which the last building of
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148	148	1 the qualified development was placed in service;
149	149	2 (2) the amount of the credit allowed for each year of
150	150	3 the credit period;
151	151	4 (3) the maximum qualified basis of the qualified
152	152	5 development taken into account in determining such annual
153	153	6 credit amount;
154	154	7 (4) a building identification number; and
155	155	8 (5) that the qualified development is eligible for and
156	156	9 has applied to receive a federal tax credit.
157	157	10 The State credit eligibility statement shall be issued by
158	158	11 an Authority simultaneously with IRS Form 8609. For taxable
159	159	12 years beginning on or after January 1, 2026 and beginning
160	160	13 before January 1, 2027, an Authority may issue, and the
161	161	14 Department and Department of Insurance may accept, an IRS Form
162	162	15 8609, including any additional statements attached to the IRS
163	163	16 Form 8609, and the reservation letter issued by the Authority
164	164	17 for the qualified development as the State credit eligibility
165	165	18 statement in satisfaction of both federal requirements and the
166	166	19 requirements set forth in this Section.
167	167	20 The State credit eligibility statement shall include a
168	168	21 section to be completed by the owner of the qualified
169	169	22 development annually for each year of the credit period
170	170	23 certifying that the qualified development conforms with all
171	171	24 compliance requirements, including all federal compliance
172	172	25 requirements for the federal tax credit. The State credit
173	173	26 eligibility statement shall be filed with the project owner's
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184	184	1 State tax return annually for each year of the credit period.
185	185	2 Section 15. Credit for low-income housing developments.
186	186	3 (a) An Authority shall administer the credit in accordance
187	187	4 with the federal tax credit and shall award the credit
188	188	5 simultaneously with the award of the federal tax credit.
189	189	6 (a-5) For taxable years beginning on or after January 1,
190	190	7 2026 and beginning before January 1, 2031, an Authority may
191	191	8 award a credit to the owner of a qualified development
192	192	9 simultaneous with the federal tax credit in an amount
193	193	10 determined by an Authority, subject to the following
194	194	11 guidelines:
195	195	12 (1) an Authority must find that the credit is
196	196	13 necessary for the financial feasibility of the qualified
197	197	14 development;
198	198	15 (2) the aggregate amount of credits awarded to
199	199	16 qualified developments for each calendar year shall not
200	200	17 exceed $20,000,000, plus the amount of unallocated
201	201	18 credits, if any, from the preceding calendar year, plus
202	202	19 the amount of any credit recaptured or otherwise returned
203	203	20 to an Authority since the preceding calendar year;
204	204	21 (3) of the $20,000,000 annual allocation:
205	205	22 (A) 75.5% of the available credits for each
206	206	23 calendar year shall be awarded by the Illinois Housing
207	207	24 Development Authority, plus any credits the Illinois
208	208	25 Housing Development Authority did not award from prior
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219	219	1 calendar years, plus the amount of any credits
220	220	2 recaptured or otherwise returned to the Illinois
221	221	3 Housing Development Authority from prior calendar
222	222	4 years; and
223	223	5 (B) 24.5% of the available credits in each
224	224	6 calendar year shall be awarded by the City of Chicago
225	225	7 Department of Housing, plus any credits the City of
226	226	8 Chicago Department of Housing did not award from prior
227	227	9 calendar years, plus the amount of any credits
228	228	10 recaptured or otherwise returned to the City of
229	229	11 Chicago Department of Housing since the prior calendar
230	230	12 year; and
231	231	13 (4) unless otherwise provided in this Act, or unless
232	232	14 the context clearly requires otherwise, an Authority must
233	233	15 determine eligibility for credits and award credits in
234	234	16 accordance with the standards and requirements set forth
235	235	17 in Section 42 of the federal Internal Revenue Code of 1986
236	236	18 and, to the extent possible, use the same forms that are
237	237	19 used in administering the credit under Section 42 of the
238	238	20 federal Internal Revenue Code of 1986.
239	239	21 (b) For tax years during the credit period, any qualified
240	240	22 taxpayer is allowed a credit, as provided in this Act, against
241	241	23 either of the following: (i) the taxes imposed by subsections
242	242	24 (a) and (b) of Section 201 of the Illinois Income Tax Act; or
243	243	25 (ii) any privilege tax or retaliatory tax, penalty, fee,
244	244	26 charge, or payment imposed under the Illinois Insurance Code
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255	255	1 as provided in subsection (e-5).
256	256	2 (b-5) The amount of credit awarded pursuant to a
257	257	3 reservation letter shall be claimable in each year of the
258	258	4 credit period.
259	259	5 (c) A qualified taxpayer may claim a credit under this Act
260	260	6 so long as the taxpayer's direct or indirect interest in the
261	261	7 qualified development is acquired prior to the filing of its
262	262	8 tax return claiming the credit. On or before March 31
263	263	9 following each year of the credit period, the owner must
264	264	10 submit to the Department, the Department of Insurance, and the
265	265	11 applicable Authority an allocation schedule certification, in
266	266	12 an electronic format prescribed by the Department, the
267	267	13 Department of Insurance, and the Authority, respectively,
268	268	14 detailing the amount of the credit allocated to the qualified
269	269	15 taxpayer for the applicable year and stating whether the
270	270	16 qualified taxpayer has elected to claim the credit against the
271	271	17 taxpayer's State income tax or insurance privilege tax or
272	272	18 retaliatory tax liability. The taxpayer may assign to a
273	273	19 designee the duty of preparing and submitting the allocation
274	274	20 schedule certification. In that case, the designee must
275	275	21 provide the allocation schedule certification to the
276	276	22 Department, the Department of Insurance, and the applicable
277	277	23 Authority on or before the deadline for submission. The
278	278	24 qualified taxpayer must notify the Department, the Department
279	279	25 of Insurance, and the applicable Authority if it assigns that
280	280	26 duty to its designee.
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291	291	1 The allocation schedule certification submitted under this
292	292	2 Section may be amended if the State credit eligibility
293	293	3 statement for a project is received after the deadline for
294	294	4 filing the allocation schedule certification or if all credits
295	295	5 have not been awarded by the deadline for filing the
296	296	6 allocation schedule certification. Any amendment to an
297	297	7 allocation schedule certification shall be filed before the
298	298	8 taxpayer attempts to claim tax credits associated with the
299	299	9 applicable State credit eligibility statement. Each qualified
300	300	10 taxpayer is allowed to claim its awarded amount of credit
301	301	11 subject to any restrictions set forth in this Section. If the
302	302	12 credit is to be taken against the income tax and the qualified
303	303	13 taxpayer is a pass-through entity, then the provisions of
304	304	14 Section 251 of the Illinois Income Tax Act apply.
305	305	15 (d) No credit may be awarded under this Act unless the
306	306	16 qualified development is the subject of a recorded restrictive
307	307	17 covenant requiring the development to be maintained and
308	308	18 operated as a qualified development; this requirement for a
309	309	19 recorded restrictive covenant may be satisfied by the
310	310	20 agreement for an extended low-income housing commitment
311	311	21 required for the federal tax credits as defined in Section
312	312	22 42(h)(6)(B) of the federal Internal Revenue Code of 1986.
313	313	23 (e) If, during a taxable year, there is a determination
314	314	24 that no recorded restrictive covenant meeting the requirements
315	315	25 of subsection (d) was in effect as of the beginning of that
316	316	26 year, the determination shall not apply to any period before
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327	327	1 that year and subsection (e) shall be applied without regard
328	328	2 to that determination if the failure is corrected within one
329	329	3 year after the date of the determination.
330	330	4 (e-5) For tax years ending during the credit period, any
331	331	5 qualified taxpayer is allowed a credit as provided in this Act
332	332	6 against the taxes imposed by subsections (a) and (b) of
333	333	7 Section 201 of the Illinois Income Tax Act, unless the
334	334	8 qualified taxpayer elects to claim the credit against any
335	335	9 privilege tax or retaliatory tax, penalty, fee, charge, or
336	336	10 payment imposed under the Illinois Insurance Code. Those
337	337	11 elections shall be submitted by the owner of the qualified
338	338	12 development in the annual allocation schedule certification as
339	339	13 provided in subsection (c) of this Section.
340	340	14 (f) The tax credit under this Act may not reduce the
341	341	15 taxpayer's liability to less than zero. If the amount of the
342	342	16 tax credit exceeds the tax liability for the year, the excess
343	343	17 may be carried forward and applied to the tax liability of the
344	344	18 5 taxable years following the excess credit year. The credit
345	345	19 must be applied to the earliest year for which there is a tax
346	346	20 liability. If there are credits from more than one tax year
347	347	21 that are available to offset a liability, then the earlier
348	348	22 credit must be applied first. Credits that are initially
349	349	23 claimed against taxes imposed by the Illinois Income Tax Act
350	350	24 may be carried forward only against the taxpayer's future
351	351	25 Illinois Income Tax liability. Credits that are initially
352	352	26 claimed against taxes, penalties, fees, charges, and payments
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363	363	1 imposed by the Illinois Insurance Code may be carried forward
364	364	2 only against taxes, penalties, fees, charges, and payments
365	365	3 imposed by the Illinois Insurance Code. Credits that are not
366	366	4 claimed or carried forward may not be refunded to the
367	367	5 taxpayer. The qualified taxpayer is solely responsible for
368	368	6 correctly filing tax returns, and an Authority is not
369	369	7 responsible for monitoring the calculation of taxes under this
370	370	8 Section.
371	371	9 (g) By March 31, 2026 and by March 31 of each year
372	372	10 thereafter, each Authority shall provide to the Department and
373	373	11 the Department of Insurance an electronic file containing all
374	374	12 data related to all State credit eligibility statements issued
375	375	13 during the preceding year in the manner and form as provided by
376	376	14 each respective Department.
377	377	15 (h) Each Authority is entitled to a reservation fee of 1%
378	378	16 of the credit awarded under this Section for each year of the
379	379	17 award to support the cost of compliance monitoring. An
380	380	18 Authority may exercise the option to impose a compliance fee
381	381	19 or a penalty in the exercise of its compliance monitoring
382	382	20 function under this Act.
383	383	21 Section 20. Recapture. If, under Section 42 of the
384	384	22 Internal Revenue Code, a portion of any federal tax credit
385	385	23 claimed with respect to a qualified development for which a
386	386	24 credit has been awarded under this Act is required by a final
387	387	25 determination by the Internal Revenue Service or a court of
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398	398	1 law with competent jurisdiction to be recaptured during the
399	399	2 first 6 years after a project is placed in service, then,
400	400	3 within 60 days after becoming aware of the federal tax credit
401	401	4 recapture, unless the taxpayer successfully disputes the
402	402	5 recapture, the project owner shall provide the Department, the
403	403	6 Department of Insurance, and the applicable Authority with
404	404	7 notice of the federal tax credit recapture. Notice shall be
405	405	8 provided in the manner and form as provided by the Department,
406	406	9 the Department of Insurance, and the Authority, respectively.
407	407	10 If an Authority issues a federal Form 8823 to the owner of a
408	408	11 qualified development that has been awarded a credit under
409	409	12 this Act, and an Authority has not been notified within 6
410	410	13 months of filing the Form 8823 that the noncompliance has been
411	411	14 remedied, an Authority shall submit the Form 8823 to the
412	412	15 Department or Department of Insurance, as applicable. The
413	413	16 amount of credit subject to recapture shall be proportionately
414	414	17 equal to the amount of the qualified development's federal tax
415	415	18 credits that are subject to recapture. If the project owner
416	416	19 (or one of the project owner's direct or indirect members)
417	417	20 fails to notify the Department or the Department of Insurance,
418	418	21 as applicable, of any final determination of recapture of the
419	419	22 federal tax credit, then the entire amount of the State tax
420	420	23 credit awarded for the qualified development may be subject to
421	421	24 recapture. The qualified taxpayer subject to recapture shall
422	422	25 increase the qualified taxpayer's tax by the amount of any
423	423	26 credit subject to recapture in the tax year the qualified
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434	434	1 taxpayer is notified of the recapture. If multiple taxpayers
435	435	2 claimed credit with respect to the building for which credit
436	436	3 is to be recaptured, each of those taxpayers shall be liable
437	437	4 for a portion of the recapture equal to the percentages of
438	438	5 credit with respect to the building originally claimed by the
439	439	6 taxpayer.
440	440	7 Section 25. Filing requirements. An owner of a qualified
441	441	8 development that has been awarded a credit and each qualified
442	442	9 taxpayer claiming any portion of the credit must file with
443	443	10 their State tax returns a copy of the State credit eligibility
444	444	11 statement issued by an Authority for that qualified
445	445	12 development. In addition, the owner of a qualified development
446	446	13 or its designee shall file a copy of the allocation schedule
447	447	14 certification and reservation letter prior to any tax return
448	448	15 being filed claiming a State credit for such qualified
449	449	16 development. A qualified taxpayer receiving any allocated
450	450	17 portion of a credit through a pass-through entity shall attach
451	451	18 to its State tax return a copy of the Schedule K-1-P for that
452	452	19 taxable year.
453	453	20 Section 30. Compliance monitoring. An Authority, in
454	454	21 consultation with the Department and Department of Insurance,
455	455	22 shall monitor and oversee compliance with the provisions of
456	456	23 this Act and shall report specific occurrences of
457	457	24 noncompliance to the Department and the Department of
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468	468	1 Insurance in the manner and form as provided by the Department
469	469	2 and the Department of Insurance. An Authority shall make every
470	470	3 effort to monitor and report noncompliance using the same
471	471	4 procedures used for compliance monitoring of the federal tax
472	472	5 credits.
473	473	6 Section 35. Report to the General Assembly.
474	474	7 (a) Each Authority must, by March 31, 2027 and by March 31
475	475	8 of each year thereafter, provide a written report to the
476	476	9 General Assembly and must publish that report on its website.
477	477	10 (b) The report shall:
478	478	11 (1) set forth the number of qualified developments
479	479	12 that have been awarded tax credits under this Act during
480	480	13 the calendar year and the total number of units supported
481	481	14 by each qualified development;
482	482	15 (2) describe each qualified development that has been
483	483	16 awarded tax credits under this Act, including, without
484	484	17 limitation, the geographic location of the qualified
485	485	18 development, the household type, the income levels
486	486	19 intended to be served by the qualified development, and
487	487	20 the rents or set-asides authorized for each qualified
488	488	21 development;
489	489	22 (3) provide housing market information that
490	490	23 demonstrates how the qualified developments supported by
491	491	24 the tax credits are addressing the need for affordable
492	492	25 housing within the communities they are intended to serve
493	493
494	494
495	495
496	496
497	497
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503	503	1 as well as information about any remaining disparities in
504	504	2 the affordability of housing within those communities; and
505	505	3 (4) provide information about the percentage of
506	506	4 qualified developments that were awarded credits and that
507	507	5 received incentive scoring points as a result of the
508	508	6 general contractor, property manager, architect, or
509	509	7 sponsor being certified under the Business Enterprise
510	510	8 Program for Minorities, Females, and Persons with a
511	511	9 Disability.
512	512	10 Section 900. The Illinois Income Tax Act is amended by
513	513	11 adding Section 246 as follows:
514	514	12 (35 ILCS 5/246 new)
515	515	13 Sec. 246. Build Illinois Homes Tax Credit Act.
516	516	14 (a) For taxable years beginning on or after January 1,
517	517	15 2026 and until the expiration of the program under the Build
518	518	16 Illinois Homes Tax Credit Act, any eligible taxpayer with
519	519	17 respect to a credit awarded in accordance with the Build
520	520	18 Illinois Homes Tax Credit Act that is named on an allocation
521	521	19 schedule certification for a particular tax year is entitled
522	522	20 to a credit against the taxes imposed by subsections (a) and
523	523	21 (b) of Section 201 as provided in the Build Illinois Homes Tax
524	524	22 Credit Act.
525	525	23 (b) The taxpayer shall attach a copy of the allocation
526	526	24 schedule certification and the State credit eligibility
527	527
528	528
529	529
530	530
531	531
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533	533
534	534
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536	536	HB1147 - 15 - LRB104 03040 HLH 15937 b
537	537	1 certificate issued under the Build Illinois Homes Tax Credit
538	538	2 Act to the tax return on which the credits are to be claimed.
539	539	3 (c) If, during any taxable year, a taxpayer is notified of
540	540	4 a final determination that a credit previously claimed on a
541	541	5 State income tax return in accordance with 26 U.S.C. 42 has
542	542	6 been recaptured, the tax imposed under subsections (a) and (b)
543	543	7 of Section 201 for that taxpayer for that taxable year shall be
544	544	8 increased. The amount of the increase shall be determined by
545	545	9 (i) recomputing the Build Illinois Homes Tax Credit that would
546	546	10 have been allowed for the year in which the credit was
547	547	11 originally allowed by eliminating the recaptured amount from
548	548	12 such computation and (ii) subtracting that recomputed credit
549	549	13 from the amount of credit previously allowed. No Build
550	550	14 Illinois Homes Tax Credit shall be allowed with respect to any
551	551	15 credit subject to a final determination of recapture for any
552	552	16 taxable year ending after the issuance of a recapture notice.
553	553	17 Section 905. The Illinois Insurance Code is amended by
554	554	18 changing Sections 409 and 444 as follows:
555	555	19 (215 ILCS 5/409) (from Ch. 73, par. 1021)
556	556	20 Sec. 409. Annual privilege tax payable by companies.
557	557	21 (1) As of January 1, 1999 for all health maintenance
558	558	22 organization premiums written; as of July 1, 1998 for all
559	559	23 premiums written as accident and health business, voluntary
560	560	24 health service plan business, dental service plan business, or
561	561
562	562
563	563
564	564
565	565
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567	567
568	568
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571	571	1 limited health service organization business; and as of
572	572	2 January 1, 1998 for all other types of insurance premiums
573	573	3 written, every company doing any form of insurance business in
574	574	4 this State, including, but not limited to, every risk
575	575	5 retention group, and excluding all fraternal benefit
576	576	6 societies, all farm mutual companies, all religious charitable
577	577	7 risk pooling trusts, and excluding all statutory residual
578	578	8 market and special purpose entities in which companies are
579	579	9 statutorily required to participate, whether incorporated or
580	580	10 otherwise, shall pay, for the privilege of doing business in
581	581	11 this State, to the Director for the State treasury a State tax
582	582	12 equal to 0.5% of the net taxable premium written, together
583	583	13 with any amounts due under Section 444 of this Code, except
584	584	14 that the tax to be paid on any premium derived from any
585	585	15 accident and health insurance or on any insurance business
586	586	16 written by any company operating as a health maintenance
587	587	17 organization, voluntary health service plan, dental service
588	588	18 plan, or limited health service organization shall be equal to
589	589	19 0.4% of such net taxable premium written, together with any
590	590	20 amounts due under Section 444. Upon the failure of any company
591	591	21 to pay any such tax due, the Director may, by order, revoke or
592	592	22 suspend the company's certificate of authority after giving 20
593	593	23 days written notice to the company, or commence proceedings
594	594	24 for the suspension of business in this State under the
595	595	25 procedures set forth by Section 401.1 of this Code. The gross
596	596	26 taxable premium written shall be the gross amount of premiums
597	597
598	598
599	599
600	600
601	601
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603	603
604	604
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606	606	HB1147 - 17 - LRB104 03040 HLH 15937 b
607	607	1 received on direct business during the calendar year on
608	608	2 contracts covering risks in this State, except premiums on
609	609	3 annuities, premiums on which State premium taxes are
610	610	4 prohibited by federal law, premiums paid by the State for
611	611	5 health care coverage for Medicaid eligible insureds as
612	612	6 described in Section 5-2 of the Illinois Public Aid Code,
613	613	7 premiums paid for health care services included as an element
614	614	8 of tuition charges at any university or college owned and
615	615	9 operated by the State of Illinois, premiums on group insurance
616	616	10 contracts under the State Employees Group Insurance Act of
617	617	11 1971, and except premiums for deferred compensation plans for
618	618	12 employees of the State, units of local government, or school
619	619	13 districts. The net taxable premium shall be the gross taxable
620	620	14 premium written reduced only by the following:
621	621	15 (a) the amount of premiums returned thereon which
622	622	16 shall be limited to premiums returned during the same
623	623	17 preceding calendar year and shall not include the return
624	624	18 of cash surrender values or death benefits on life
625	625	19 policies including annuities;
626	626	20 (b) dividends on such direct business that have been
627	627	21 paid in cash, applied in reduction of premiums or left to
628	628	22 accumulate to the credit of policyholders or annuitants.
629	629	23 In the case of life insurance, no deduction shall be made
630	630	24 for the payment of deferred dividends paid in cash to
631	631	25 policyholders on maturing policies; dividends left to
632	632	26 accumulate to the credit of policyholders or annuitants
633	633
634	634
635	635
636	636
637	637
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639	639
640	640
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642	642	HB1147 - 18 - LRB104 03040 HLH 15937 b
643	643	1 shall be included as gross taxable premium written when
644	644	2 such dividend accumulations are applied to purchase
645	645	3 paid-up insurance or to shorten the endowment or premium
646	646	4 paying period.
647	647	5 (2) The annual privilege tax payment due from a company
648	648	6 under subsection (4) of this Section may be reduced by: (a) the
649	649	7 excess amount, if any, by which the aggregate income taxes
650	650	8 paid by the company, on a cash basis, for the preceding
651	651	9 calendar year under Sections 601 and 803 of the Illinois
652	652	10 Income Tax Act exceed 1.5% of the company's net taxable
653	653	11 premium written for that prior calendar year, as determined
654	654	12 under subsection (1) of this Section; and (b) the amount of any
655	655	13 fire department taxes paid by the company during the preceding
656	656	14 calendar year under Section 11-10-1 of the Illinois Municipal
657	657	15 Code. Any deductible amount or offset allowed under items (a)
658	658	16 and (b) of this subsection for any calendar year will not be
659	659	17 allowed as a deduction or offset against the company's
660	660	18 privilege tax liability for any other taxing period or
661	661	19 calendar year.
662	662	20 (3) If a company survives or was formed by a merger,
663	663	21 consolidation, reorganization, or reincorporation, the
664	664	22 premiums received and amounts returned or paid by all
665	665	23 companies party to the merger, consolidation, reorganization,
666	666	24 or reincorporation shall, for purposes of determining the
667	667	25 amount of the tax imposed by this Section, be regarded as
668	668	26 received, returned, or paid by the surviving or new company.
669	669
670	670
671	671
672	672
673	673
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675	675
676	676
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678	678	HB1147 - 19 - LRB104 03040 HLH 15937 b
679	679	1 (4)(a) All companies subject to the provisions of this
680	680	2 Section shall make an annual return for the preceding calendar
681	681	3 year on or before March 15 setting forth such information on
682	682	4 such forms as the Director may reasonably require. Payments of
683	683	5 quarterly installments of the taxpayer's total estimated tax
684	684	6 for the current calendar year shall be due on or before April
685	685	7 15, June 15, September 15, and December 15 of such year, except
686	686	8 that all companies transacting insurance in this State whose
687	687	9 annual tax for the immediately preceding calendar year was
688	688	10 less than $5,000 shall make only an annual return. Failure of a
689	689	11 company to make the annual payment, or to make the quarterly
690	690	12 payments, if required, of at least 25% of either (i) the total
691	691	13 tax paid during the previous calendar year or (ii) 80% of the
692	692	14 actual tax for the current calendar year shall subject it to
693	693	15 the penalty provisions set forth in Section 412 of this Code.
694	694	16 (b) Notwithstanding the foregoing provisions, no annual
695	695	17 return shall be required or made on March 15, 1998, under this
696	696	18 subsection. For the calendar year 1998:
697	697	19 (i) each health maintenance organization shall have no
698	698	20 estimated tax installments;
699	699	21 (ii) all companies subject to the tax as of July 1,
700	700	22 1998 as set forth in subsection (1) shall have estimated
701	701	23 tax installments due on September 15 and December 15 of
702	702	24 1998 which installments shall each amount to no less than
703	703	25 one-half of 80% of the actual tax on its net taxable
704	704	26 premium written during the period July 1, 1998, through
705	705
706	706
707	707
708	708
709	709
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711	711
712	712
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715	715	1 December 31, 1998; and
716	716	2 (iii) all other companies shall have estimated tax
717	717	3 installments due on June 15, September 15, and December 15
718	718	4 of 1998 which installments shall each amount to no less
719	719	5 than one-third of 80% of the actual tax on its net taxable
720	720	6 premium written during the calendar year 1998.
721	721	7 In the year 1999 and thereafter all companies shall make
722	722	8 annual and quarterly installments of their estimated tax as
723	723	9 provided by paragraph (a) of this subsection.
724	724	10 (5) In addition to the authority specifically granted
725	725	11 under Article XXV of this Code, the Director shall have such
726	726	12 authority to adopt rules and establish forms as may be
727	727	13 reasonably necessary for purposes of determining the
728	728	14 allocation of Illinois corporate income taxes paid under
729	729	15 subsections (a) through (d) of Section 201 of the Illinois
730	730	16 Income Tax Act amongst members of a business group that files
731	731	17 an Illinois corporate income tax return on a unitary basis,
732	732	18 for purposes of regulating the amendment of tax returns, for
733	733	19 purposes of defining terms, and for purposes of enforcing the
734	734	20 provisions of Article XXV of this Code. The Director shall
735	735	21 also have authority to defer, waive, or abate the tax imposed
736	736	22 by this Section if in his opinion the company's solvency and
737	737	23 ability to meet its insured obligations would be immediately
738	738	24 threatened by payment of the tax due.
739	739	25 (6) This Section is subject to the provisions of Section
740	740	26 10 of the New Markets Development Program Act.
741	741
742	742
743	743
744	744
745	745
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747	747
748	748
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751	751	1 (7) This Section is subject to the provisions of the Build
752	752	2 Illinois Homes Tax Credit Act.
753	753	3 (Source: P.A. 97-813, eff. 7-13-12; 98-1169, eff. 1-9-15.)
754	754	4 (215 ILCS 5/444) (from Ch. 73, par. 1056)
755	755	5 Sec. 444. Retaliation.
756	756	6 (1) Whenever the existing or future laws of any other
757	757	7 state or country shall require of companies incorporated or
758	758	8 organized under the laws of this State as a condition
759	759	9 precedent to their doing business in such other state or
760	760	10 country, compliance with laws, rules, regulations, and
761	761	11 prohibitions more onerous or burdensome than the rules and
762	762	12 regulations imposed by this State on foreign or alien
763	763	13 companies, or shall require any deposit of securities or other
764	764	14 obligations in such state or country, for the protection of
765	765	15 policyholders or otherwise or require of such companies or
766	766	16 agents thereof or brokers the payment of penalties, fees,
767	767	17 charges, or taxes greater than the penalties, fees, charges,
768	768	18 or taxes required in the aggregate for like purposes by this
769	769	19 Code or any other law of this State, of foreign or alien
770	770	20 companies, agents thereof or brokers, then such laws, rules,
771	771	21 regulations, and prohibitions of said other state or country
772	772	22 shall apply to companies incorporated or organized under the
773	773	23 laws of such state or country doing business in this State, and
774	774	24 all such companies, agents thereof, or brokers doing business
775	775	25 in this State, shall be required to make deposits, pay
776	776
777	777
778	778
779	779
780	780
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782	782
783	783
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786	786	1 penalties, fees, charges, and taxes, in amounts equal to those
787	787	2 required in the aggregate for like purposes of Illinois
788	788	3 companies doing business in such state or country, agents
789	789	4 thereof or brokers. Whenever any other state or country shall
790	790	5 refuse to permit any insurance company incorporated or
791	791	6 organized under the laws of this State to transact business
792	792	7 according to its usual plan in such other state or country, the
793	793	8 director may, if satisfied that such company of this State is
794	794	9 solvent, properly managed, and can operate legally under the
795	795	10 laws of such other state or country, forthwith suspend or
796	796	11 cancel the license of every insurance company doing business
797	797	12 in this State which is incorporated or organized under the
798	798	13 laws of such other state or country to the extent that it
799	799	14 insures in this State against any of the risks or hazards which
800	800	15 are sought to be insured against by the company of this State
801	801	16 in such other state or country.
802	802	17 (2) The provisions of this Section shall not apply to
803	803	18 residual market or special purpose assessments or guaranty
804	804	19 fund or guaranty association assessments, both under the laws
805	805	20 of this State and under the laws of any other state or country,
806	806	21 and any tax offset or credit for any such assessment shall, for
807	807	22 purposes of this Section, be treated as a tax paid both under
808	808	23 the laws of this State and under the laws of any other state or
809	809	24 country.
810	810	25 (3) The terms "penalties", "fees", "charges", and "taxes"
811	811	26 in subsection (1) of this Section shall include: the
812	812
813	813
814	814
815	815
816	816
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818	818
819	819
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821	821	HB1147 - 23 - LRB104 03040 HLH 15937 b
822	822	1 penalties, fees, charges, and taxes collected on a cash basis
823	823	2 under State law and referenced within Article XXV exclusive of
824	824	3 any items referenced by subsection (2) of this Section, but
825	825	4 including any tax offset allowed under Section 531.13 of this
826	826	5 Code; the aggregate Illinois corporate income taxes paid under
827	827	6 Sections 601 and 803 of the Illinois Income Tax Act during the
828	828	7 calendar year for which the retaliatory tax calculation is
829	829	8 being made, less the recapture of any Illinois corporate
830	830	9 income tax cash refunds to the extent that the amount of tax
831	831	10 refunded was reported as part of the Illinois basis in the
832	832	11 calculation of the retaliatory tax for a prior tax year,
833	833	12 provided that such recaptured refund shall not exceed the
834	834	13 amount necessary for equivalence of the Illinois basis with
835	835	14 the state of incorporation basis in such tax year, and after
836	836	15 any tax offset allowed under Section 531.13 of this Code;
837	837	16 income or personal property taxes imposed by other states or
838	838	17 countries; penalties, fees, charges, and taxes of other states
839	839	18 or countries imposed for purposes like those of the penalties,
840	840	19 fees, charges, and taxes specified in Article XXV of this Code
841	841	20 exclusive of any item referenced in subsection (2) of this
842	842	21 Section; and any penalties, fees, charges, and taxes required
843	843	22 as a franchise, privilege, or licensing tax for conducting the
844	844	23 business of insurance whether calculated as a percentage of
845	845	24 income, gross receipts, premium, or otherwise.
846	846	25 (4) Nothing contained in this Section or Section 409 or
847	847	26 Section 444.1 is intended to authorize or expand any power of
848	848
849	849
850	850
851	851
852	852
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854	854
855	855
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857	857	HB1147 - 24 - LRB104 03040 HLH 15937 b
858	858	1 local governmental units or municipalities to impose taxes,
859	859	2 fees, or charges.
860	860	3 (5) This Section is subject to the provisions of Section
861	861	4 10 of the New Markets Development Program Act.
862	862	5 (6) This Section is subject to the provisions of the Build
863	863	6 Illinois Homes Tax Credit Act.
864	864	7 (Source: P.A. 98-1169, eff. 1-9-15.)
865	865
866	866
867	867
868	868
869	869
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