Illinois 2025-2026 Regular Session

Illinois House Bill HB3658 Compare Versions

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

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1	1	104TH GENERAL ASSEMBLY State of Illinois 2025 and 2026 HB3658 Introduced , by Rep. Kimberly Du Buclet SYNOPSIS AS INTRODUCED: 35 ILCS 5/246 new Amends the Illinois Income Tax Act. Creates a credit in an amount equal to 20% of the qualified conversion expenditures incurred by a taxpayer for a qualified converted building. Effective immediately. LRB104 09232 HLH 19289 b A BILL FOR 104TH GENERAL ASSEMBLY State of Illinois 2025 and 2026 HB3658 Introduced , by Rep. Kimberly Du Buclet SYNOPSIS AS INTRODUCED: 35 ILCS 5/246 new 35 ILCS 5/246 new Amends the Illinois Income Tax Act. Creates a credit in an amount equal to 20% of the qualified conversion expenditures incurred by a taxpayer for a qualified converted building. Effective immediately. LRB104 09232 HLH 19289 b LRB104 09232 HLH 19289 b A BILL FOR
2	2	104TH GENERAL ASSEMBLY State of Illinois 2025 and 2026 HB3658 Introduced , by Rep. Kimberly Du Buclet SYNOPSIS AS INTRODUCED:
3	3	35 ILCS 5/246 new 35 ILCS 5/246 new
4	4	35 ILCS 5/246 new
5	5	Amends the Illinois Income Tax Act. Creates a credit in an amount equal to 20% of the qualified conversion expenditures incurred by a taxpayer for a qualified converted building. Effective immediately.
6	6	LRB104 09232 HLH 19289 b LRB104 09232 HLH 19289 b
7	7	LRB104 09232 HLH 19289 b
8	8	A BILL FOR
9	9	HB3658LRB104 09232 HLH 19289 b HB3658 LRB104 09232 HLH 19289 b
10	10	HB3658 LRB104 09232 HLH 19289 b
11	11	1 AN ACT concerning revenue.
12	12	2 Be it enacted by the People of the State of Illinois,
13	13	3 represented in the General Assembly:
14	14	4 Section 5. The Illinois Income Tax Act is amended by
15	15	5 adding Section 246 as follows:
16	16	6 (35 ILCS 5/246 new)
17	17	7 Sec. 246. Revitalizing Illinois Downtowns Tax Credit.
18	18	8 (a) As used in this Section:
19	19	9 "Qualified conversion expenditure" means any expenditure
20	20	10 that is incurred by the taxpayer in converting a building from
21	21	11 office use to residential, retail, or other commercial use and
22	22	12 that is properly chargeable to a capital account. "Qualified
23	23	13 expenditure" does not include the cost of acquisition of the
24	24	14 building or property to be converted, the cost to enlarge the
25	25	15 building, any expenditure that is allocable to a portion of
26	26	16 the property that is tax-exempt use property, or any
27	27	17 expenditure incurred by a lessee of a building on or after the
28	28	18 date on which the conversion is complete.
29	29	19 "Qualified converted building" means a building that meets
30	30	20 all of the following criteria:
31	31	21 (1) the building has been substantially converted from
32	32	22 office use to residential, retail, or other commercial use
33	33	23 by the qualified taxpayer;
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37	37	104TH GENERAL ASSEMBLY State of Illinois 2025 and 2026 HB3658 Introduced , by Rep. Kimberly Du Buclet SYNOPSIS AS INTRODUCED:
38	38	35 ILCS 5/246 new 35 ILCS 5/246 new
39	39	35 ILCS 5/246 new
40	40	Amends the Illinois Income Tax Act. Creates a credit in an amount equal to 20% of the qualified conversion expenditures incurred by a taxpayer for a qualified converted building. Effective immediately.
41	41	LRB104 09232 HLH 19289 b LRB104 09232 HLH 19289 b
42	42	LRB104 09232 HLH 19289 b
43	43	A BILL FOR
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68	68	1 (2) prior to the conversion described in item (1), the
69	69	2 building was not used for residential purposes and was
70	70	3 leased to office tenants or was available for lease to
71	71	4 office tenants;
72	72	5 (3) the building was initially placed in service at
73	73	6 least 25 years before the beginning of the conversion
74	74	7 described in item (1);
75	75	8 (4) the building is eligible for depreciation on the
76	76	9 taxpayer's federal income taxes;
77	77	10 (5) the building is carbon neutral or has attained
78	78	11 certification under one or more of the following green
79	79	12 building standards: BREEAM for New Construction or BREEAM
80	80	13 In-Use; ENERGY STAR; Envision; ISO 50001-energy
81	81	14 management; LEED for Building Design and Construction or
82	82	15 LEED for Operations and Maintenance; Green Globes for New
83	83	16 Construction or Green Globes for Existing Buildings; UL
84	84	17 3223; or an equivalent standard approved by the
85	85	18 Department; and
86	86	19 (6) in the case of a building that is converted to
87	87	20 residential use property under item (1):
88	88	21 (A) upon the completion of the conversion, 20% or
89	89	22 more of the residential housing units will be both
90	90	23 rent-restricted and occupied by individuals whose
91	91	24 income is 80% or less of the median income for the
92	92	25 municipality as established by the United States
93	93	26 Department of Health and Human Services; and
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104	104	1 (B) the property is subject to a binding State or
105	105	2 local agreement with respect to the provision of
106	106	3 financing of affordable housing, and that agreement is
107	107	4 documented in writing.
108	108	5 "Qualified office building" means (i) commercial property
109	109	6 that is leased or available for lease to office tenants or is
110	110	7 used primarily for office use and (ii) the structural
111	111	8 components of that property.
112	112	9 "Qualified taxpayer" means an Illinois resident that is
113	113	10 the owner of a qualified office building located in the State.
114	114	11 "Substantially converted" means that the qualified
115	115	12 expenditures incurred by the qualified taxpayer with respect
116	116	13 to the subject building during the 24-month period selected by
117	117	14 the taxpayer at the time and in the manner prescribed by the
118	118	15 Department by rule and ending during the taxable year for
119	119	16 which the credit is claimed exceed the greater of: (i) the
120	120	17 adjusted basis of the building and its structural components
121	121	18 or (ii) $15,000. The adjusted basis of the building and its
122	122	19 structural components shall be determined as of the first day
123	123	20 of that 24-month period or the beginning of the first day of
124	124	21 the holding period of the building, whichever is later. For
125	125	22 purposes of determining the adjusted basis, the determination
126	126	23 of the beginning of the holding period shall be made without
127	127	24 regard to any reconstruction by the qualified taxpayer.
128	128	25 (b) For taxable years beginning on or after January 1,
129	129	26 2026, a taxpayer may apply to the Department, in the form and
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140	140	1 manner required by the Department, for a credit against the
141	141	2 taxes imposed under subsections (a) and (b) of Section 201 of
142	142	3 this Act. The amount of the credit shall be equal to 20% of the
143	143	4 qualified conversion expenditures incurred by the qualified
144	144	5 taxpayer during the taxable year with respect to a qualified
145	145	6 converted building. If the qualified conversion expenditures
146	146	7 include construction work, then that construction work must be
147	147	8 subject to a project labor agreement. In no event shall the
148	148	9 amount of the credit exceed $15,000 per taxpayer in a single
149	149	10 tax year; however, if the qualified conversion plan spans
150	150	11 multiple years, the aggregate credit for the entire project
151	151	12 may be claimed in the last taxable year so long as the total
152	152	13 credit amount for the entire project does not exceed $15,000
153	153	14 per year for each year of the project. The total aggregate
154	154	15 amount of credits awarded by the Department under this Section
155	155	16 shall not exceed $50,000,000 in any State fiscal year. Credits
156	156	17 shall be awarded on a first-come, first-served basis.
157	157	18 (c) The credit for partners and shareholders of subchapter
158	158	19 S corporations shall be determined as provided in Section 251.
159	159	20 (d) In no event shall a credit under this Section reduce
160	160	21 the taxpayer's liability to less than zero. If the amount of
161	161	22 the credit exceeds the tax liability for the year, the excess
162	162	23 may be carried forward and applied to the tax liability of the
163	163	24 5 taxable years following the excess credit year. The tax
164	164	25 credit shall be applied to the earliest year for which there is
165	165	26 a tax liability. If there are credits for more than one year
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176	176	1 that are available to offset a liability, the earlier credit
177	177	2 shall be applied first.
178	178	3 (e) The Department may, in consultation with the
179	179	4 Department of Commerce and Economic Opportunity, adopt rules
180	180	5 to administer the provisions of this Section.
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