SB 3302 — INCOME TAX-ANGEL INVEST CREDIT

*LRB10020816HLH36307b* SB3302 100THEngrossed GENERALLRB100 ASSEMBLY20816 StateHLH of36307 Illinoisb andAN 2018ACT SB3302concerning Introducedrevenue. 2/16/2018, by Sen.

Chuck Weaver SYNOPSIS AS INTRODUCED:

ILCS 5/220 Amends the Illinois Income Tax Act.

Changes the definition of "applicant" and "related member".

Provides that the annual allowable amounts shall be allocated by the Department of Commerce and Economic Opportunity if any portion of the unused allocated amount at the end of the first 3 calendar quarters of a calendar year (rather than 2 calendar quarters) are rolled into the total allocated amount for the next calendar quarter.

Provides that the annual allowable amounts shall be allocated by the Department if tax credits for investments in minority-owned businesses, women-owned businesses, businesses owned by a person with a disability, or a business in a county with a population of 250,000 or less are limited to the first 3 calendar quarters of a calendar year and after which investors may claim the tax credits of any qualified new business venture.

LRB100 20816 HLH 36307 b FISCAL NOTE ACT MAY APPLY A BILL FOR SB3302 LRB100 20816 HLH 36307 b AN ACT concerning revenue.

"Investment" means money (or its equivalent) given to a qualified new business venture, at a risk of loss, in consideration for an equity interest of the qualified new SB3302 Engrossed - 2 - LRB100 20816 HLH 36307 b business venture.

(3) A corporation, and any party related to the corporation in a manner that would require an attribution of stock from the corporation under the attribution rules of Section 318 of the Internal Revenue Code, if the SB3302 Engrossed - 3 - LRB100 20816 HLH 36307 b applicant and any other related member own, in the aggregate, directly, indirectly, beneficially, or constructively, at least 50% of the value of the corporation's outstanding stock of the qualified new business venture that is the recipient of the applicant's investment.

(b) For taxable years beginning after December 31, 2010, and ending on or before December 31, 2021, subject to the SB3302 Engrossed - 4 - LRB100 20816 HLH 36307 b limitations provided in this Section, a claimant may claim, as a credit against the tax imposed under subsections (a) and (b) of Section 201 of this Act, an amount equal to 25% of the claimant's investment made directly in a qualified new business venture.

The maximum amount of an applicant's total investment made in any single qualified SB3302 Engrossed - 5 - LRB100 20816 HLH 36307 b new business venture that may be used as the basis for a credit under this Section is $2,000,000.

If the Department determines that a qualified new business SB3302 Engrossed - 6 - LRB100 20816 HLH 36307 b venture failed to maintain a minimum employment threshold in the State through the date which is 3 years from the issue date of the last tax credit certificate issued by the Department with respect to the subject business pursuant to this Section, the claimant or claimants shall pay to the Department of Revenue, in the manner prescribed by the Department of Revenue, the aggregate amount of the disqualified credits that claimant or claimants received related to investments in that business.

Any failure of a business to promptly provide the foregoing information to the Department may, at the discretion of the Department, result in a revocation of a previously approved application for that business, or disqualification of the SB3302 Engrossed - 7 - LRB100 20816 HLH 36307 b business from future registration under this Section, or both.

or (B) it is undertaking pre-commercialization activity related to proprietary technology that includes conducting research, developing a new product or business process, or developing a service that is SB3302 Engrossed - 8 - LRB100 20816 HLH 36307 b principally reliant on applying proprietary technology;

and (7) it has received not more than $4,000,000 in investments that qualified for tax credits under this SB3302 Engrossed - 9 - LRB100 20816 HLH 36307 b Section.

and (iii) the SB3302 Engrossed - 10 - LRB100 20816 HLH 36307 b reservation of tax credits for investments in minority-owned businesses, women-owned businesses, businesses owned by a person with a disability, and in businesses in counties with a population of not more than 250,000 is limited to the first 3 calendar quarters of a given calendar year, after which they may be claimed by investors in any qualified new business venture.

SB3302 Engrossed - 11 - LRB100 20816 HLH 36307 b (2) The report must also include:

Each business registered by the Department as a qualified new business venture that receives an investment giving rise to the issuance of a tax credit certificate SB3302 Engrossed - 12 - LRB100 20816 HLH 36307 b pursuant to this Section shall, for each of the 3 years following the issue date of the last tax credit certificate issued by the Department with respect to such business pursuant to this Section, report to the Department the following: