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
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
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.
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LRB104 09232 HLH 19289 b
A BILL FOR
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HB3658 LRB104 09232 HLH 19289 b
1 AN ACT concerning revenue.
2 Be it enacted by the People of the State of Illinois,
3 represented in the General Assembly:
4 Section 5. The Illinois Income Tax Act is amended by
5 adding Section 246 as follows:
6 (35 ILCS 5/246 new)
7 Sec. 246. Revitalizing Illinois Downtowns Tax Credit.
8 (a) As used in this Section:
9 "Qualified conversion expenditure" means any expenditure
10 that is incurred by the taxpayer in converting a building from
11 office use to residential, retail, or other commercial use and
12 that is properly chargeable to a capital account. "Qualified
13 expenditure" does not include the cost of acquisition of the
14 building or property to be converted, the cost to enlarge the
15 building, any expenditure that is allocable to a portion of
16 the property that is tax-exempt use property, or any
17 expenditure incurred by a lessee of a building on or after the
18 date on which the conversion is complete.
19 "Qualified converted building" means a building that meets
20 all of the following criteria:
21 (1) the building has been substantially converted from
22 office use to residential, retail, or other commercial use
23 by the qualified taxpayer;
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
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.
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LRB104 09232 HLH 19289 b
A BILL FOR
35 ILCS 5/246 new
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1 (2) prior to the conversion described in item (1), the
2 building was not used for residential purposes and was
3 leased to office tenants or was available for lease to
4 office tenants;
5 (3) the building was initially placed in service at
6 least 25 years before the beginning of the conversion
7 described in item (1);
8 (4) the building is eligible for depreciation on the
9 taxpayer's federal income taxes;
10 (5) the building is carbon neutral or has attained
11 certification under one or more of the following green
12 building standards: BREEAM for New Construction or BREEAM
13 In-Use; ENERGY STAR; Envision; ISO 50001-energy
14 management; LEED for Building Design and Construction or
15 LEED for Operations and Maintenance; Green Globes for New
16 Construction or Green Globes for Existing Buildings; UL
17 3223; or an equivalent standard approved by the
18 Department; and
19 (6) in the case of a building that is converted to
20 residential use property under item (1):
21 (A) upon the completion of the conversion, 20% or
22 more of the residential housing units will be both
23 rent-restricted and occupied by individuals whose
24 income is 80% or less of the median income for the
25 municipality as established by the United States
26 Department of Health and Human Services; and
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1 (B) the property is subject to a binding State or
2 local agreement with respect to the provision of
3 financing of affordable housing, and that agreement is
4 documented in writing.
5 "Qualified office building" means (i) commercial property
6 that is leased or available for lease to office tenants or is
7 used primarily for office use and (ii) the structural
8 components of that property.
9 "Qualified taxpayer" means an Illinois resident that is
10 the owner of a qualified office building located in the State.
11 "Substantially converted" means that the qualified
12 expenditures incurred by the qualified taxpayer with respect
13 to the subject building during the 24-month period selected by
14 the taxpayer at the time and in the manner prescribed by the
15 Department by rule and ending during the taxable year for
16 which the credit is claimed exceed the greater of: (i) the
17 adjusted basis of the building and its structural components
18 or (ii) $15,000. The adjusted basis of the building and its
19 structural components shall be determined as of the first day
20 of that 24-month period or the beginning of the first day of
21 the holding period of the building, whichever is later. For
22 purposes of determining the adjusted basis, the determination
23 of the beginning of the holding period shall be made without
24 regard to any reconstruction by the qualified taxpayer.
25 (b) For taxable years beginning on or after January 1,
26 2026, a taxpayer may apply to the Department, in the form and
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1 manner required by the Department, for a credit against the
2 taxes imposed under subsections (a) and (b) of Section 201 of
3 this Act. The amount of the credit shall be equal to 20% of the
4 qualified conversion expenditures incurred by the qualified
5 taxpayer during the taxable year with respect to a qualified
6 converted building. If the qualified conversion expenditures
7 include construction work, then that construction work must be
8 subject to a project labor agreement. In no event shall the
9 amount of the credit exceed $15,000 per taxpayer in a single
10 tax year; however, if the qualified conversion plan spans
11 multiple years, the aggregate credit for the entire project
12 may be claimed in the last taxable year so long as the total
13 credit amount for the entire project does not exceed $15,000
14 per year for each year of the project. The total aggregate
15 amount of credits awarded by the Department under this Section
16 shall not exceed $50,000,000 in any State fiscal year. Credits
17 shall be awarded on a first-come, first-served basis.
18 (c) The credit for partners and shareholders of subchapter
19 S corporations shall be determined as provided in Section 251.
20 (d) In no event shall a credit under this Section reduce
21 the taxpayer's liability to less than zero. If the amount of
22 the credit exceeds the tax liability for the year, the excess
23 may be carried forward and applied to the tax liability of the
24 5 taxable years following the excess credit year. The tax
25 credit shall be applied to the earliest year for which there is
26 a tax liability. If there are credits for more than one year
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1 that are available to offset a liability, the earlier credit
2 shall be applied first.
3 (e) The Department may, in consultation with the
4 Department of Commerce and Economic Opportunity, adopt rules
5 to administer the provisions of this Section.
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