Section 35 ILCS 31/10 - Allowable credit(a) To the extent authorized by this Act, for taxable years beginning on or after January 1, 2019 and ending on or before December 31, 2028 , there shall be allowed a tax credit to the qualified taxpayer against the tax imposed by subsections (a) and (b) of Section 201 of the Illinois Income Tax Act in an aggregate amount equal to 25% of qualified expenditures, but not to exceed $3,000,000, incurred undertaking a qualified rehabilitation plan, provided that the total amount of such expenditures must (i) equal $5,000 or more and (ii) exceed the adjusted basis of the structure on the first day the qualified rehabilitation plan commenced. If the qualified rehabilitation plan spans multiple years, the aggregate credit for the entire project shall be allowed in the last taxable year.(b) To obtain a tax credit certificate pursuant to this Section, the qualified taxpayer must apply with the Division. The Division shall determine the amount of eligible rehabilitation expenditures within 45 days after receipt of a complete application. The taxpayer must provide to the Division a third-party cost certification conducted by a certified public accountant verifying (i) the qualified and non-qualified rehabilitation expenses and (ii) that the qualified expenditures exceed the adjusted basis of the structure on the first day the qualified rehabilitation plan commenced. The accountant shall provide appropriate review and testing of invoices. The Division is authorized, but not required, to accept this third-party cost certification to determine the amount of qualified expenditures. The Division and the National Park Service shall determine whether the rehabilitation is consistent with the Standards of the Secretary of the United States Department of the Interior.(c) If the amount of any tax credit awarded under this Act exceeds the qualified taxpayer's income tax liability for the year in which the qualified rehabilitation plan was placed in service, the excess amount may be carried forward for deduction from the taxpayer's income tax liability in the next succeeding year or years until the total amount of the credit has been used, except that a credit may not be carried forward for deduction after the tenth taxable year after the taxable year in which the qualified rehabilitation plan was placed in service. Upon completion of the project and approval of the complete application, the Division shall issue a single certificate in the amount of the eligible credits equal to 25% of the qualified expenditures incurred during the eligible taxable years, not to exceed the lesser of the allocated amount or $3,000,000 per single qualified rehabilitation plan. Prior to the issuance of the tax credit certificate, the qualified taxpayer must provide to the Division verification that the rehabilitated structure is a qualified historic structure. At the time the certificate is issued, an issuance fee up to the maximum amount of 2% of the amount of the credits issued by the certificate may be collected from the qualified taxpayer to administer the Act. If collected, this issuance fee shall be directed to the Division Historic Property Administrative Fund or other such fund as appropriate for use of the Division in the administration of the Historic Preservation Tax Credit Program. The taxpayer must attach the certificate or legal documentation of her or his proportional share of the certificate to the tax return on which the credits are to be claimed. The tax credit under this Section may not reduce the taxpayer's liability to less than zero. If the amount of the credit exceeds the tax liability for the year, the excess credit may be carried forward and applied to the tax liability of the 10 taxable years following the first excess credit year. The taxpayer is not eligible to receive credits under this Section and under Section 221 of the Illinois Income Tax Act for the same qualified expenditures or qualified rehabilitation plan.(d) If the taxpayer is (i) a corporation having an election in effect under Subchapter S of the federal Internal Revenue Code, (ii) a partnership, or (iii) a limited liability company, the credit provided under this Act may be claimed by the shareholders of the corporation, the partners of the partnership, or the members of the limited liability company in the same manner as those shareholders, partners, or members account for their proportionate shares of the income or losses of the corporation, partnership, or limited liability company, or as provided in the bylaws or other executed agreement of the corporation, partnership, or limited liability company. Credits granted to a partnership, a limited liability company taxed as a partnership, or other multiple owners of property shall be passed through to the partners, members, or owners respectively on a pro rata basis or pursuant to an executed agreement among the partners, members, or owners documenting any alternate distribution method.
(e) If a recapture event occurs during the recapture period with respect to a qualified historic structure, then for any taxable year in which the credits are allowed as specified in this Act, the tax under the applicable Section of this Act shall be increased by applying the recapture percentage set forth below to the tax decrease resulting from the application of credits allowed under this Act to the taxable year in question. For the purposes of this subsection, the recapture percentage shall be determined as follows:
(1) if the recapture event occurs within the first year after commencement of the recapture period, then the recapture percentage is 100%;(2) if the recapture event occurs within the second year after commencement of the recapture period, then the recapture percentage is 80%;(3) if the recapture event occurs within the third year after commencement of the recapture period, then the recapture percentage is 60%;(4) if the recapture event occurs within the fourth year after commencement of the recapture period, then the recapture percentage is 40%; and(5) if the recapture event occurs within the fifth year after commencement of the recapture period, then the recapture percentage is 20%. In the case of any recapture event, the carryforwards under this Act shall be adjusted by reason of such event.
(f) The Division may adopt rules to implement this Section in addition to the rules expressly authorized herein.Amended by P.A. 103-0009,§ 40-10, eff. 6/7/2023.Amended by P.A. 102-0741,§ 5, eff. 5/6/2022.Amended by P.A. 101-0081,§ 280, eff. 7/12/2019.Added by P.A. 100-0629,§ 10, eff. 1/1/2019.