35 ILCS 65

in effect

35 ILCS 65/55-5

(35 ILCS 65/55-5) Sec. 55-5. (Amendatory provisions; text omitted). (Source: P.A. 104-6, eff. 1-1-26; text omitted.)

35 ILCS 65/55-10 The Motor Fuel Tax Law is amended by repealing Sections 1.14, 3a, 5a, and 6a

(35 ILCS 65/55-10) Sec. 55-10. The Motor Fuel Tax Law is amended by repealing Sections 1.14, 3a, 5a, and 6a. (Source: P.A. 104-6, eff. 1-1-26.)

(35 ILCS 65/77-1) Sec. 77-1. Short title. This Article may be cited as the Advancing Innovative Manufacturing for Illinois Tax Credit Act. References in this Article to "this Act" mean this Article. (Source: P.A. 104-6, eff. 6-16-25.)

35 ILCS 65/77-5 Purpose

(35 ILCS 65/77-5) Sec. 77-5. Purpose. The General Assembly intends that Illinois should lead the nation in manufacturing domestically and internationally demanded goods. Through the support of manufacturers existing within Illinois and those seeking to relocate to Illinois, this Act is intended to spur innovation in growth industries and fast-growing sectors, including: automotive manufacturing; aerospace manufacturing; energy and life sciences; machine manufacturing; fabricated metal manufacturing; chemical manufacturing; robotics; and the production of advanced materials. This Act is intended to create good-paying jobs, generate long-term economic investment in the Illinois business economy, and ensure that vital products are made in the United States. Illinois must aggressively adopt new business development investment tools so that Illinois can compete with domestic and foreign competitors. (Source: P.A. 104-6, eff. 6-16-25.)

35 ILCS 65/77-10 Definitions

(35 ILCS 65/77-10) Sec. 77-10. Definitions. In this Act: "Advanced manufacturing" means the practice of using innovative technologies and methods to improve a company's ability to be competitive in the manufacturing sector by optimizing all aspects of the value chain, from concept to end-of-life considerations. "Advanced manufacturing" includes, but is not limited to, advanced manufacturing practices adopted by the following industries: clean energy ecosystem businesses; life science businesses; food manufacturing; automotive and aerospace manufacturing; machinery manufacturing; fabricated metal manufacturing; chemical manufacturing; robotics; and advanced materials manufacturing, including nanomaterial manufacturing. "Advancing Innovative Manufacturing for Illinois Tax Credit" or "Credit" means a credit agreed to between the Department and the applicant under this Act that is based on capital improvements made to a new or existing facility for the purpose of modernizing, upgrading, automating, or streamlining a manufacturing or production process. "Agreement" means the agreement between a taxpayer and the Department under the provisions of this Act. "Applicant" means a taxpayer that: (1) operates a business in Illinois as a manufacturer of critically needed goods; (2) operates a business in Illinois that primarily engages in research and development that will result in the manufacturing of critically needed goods; or (3) is planning to locate a business within the State of Illinois as a manufacturer of critically needed goods or a business in Illinois that primarily engages in research and development that will result in the manufacturing of critically needed goods. For the purposes of this definition, a business primarily engages in research and development if at least 50% of its business activities involve research and development in the manufacturing of critically needed goods. "Applicant" does not include a taxpayer that closes or substantially reduces, by more than 50%, operations at one location in the State and relocates substantially the same operation to another location in the State. This exclusion does not prohibit a taxpayer from expanding its operations at another location in the State. This exclusion also does not prohibit a taxpayer from moving its operations from one location in the State to another location in the State for the purpose of expanding the operation of the business if the Department determines that expansion cannot reasonably be accommodated within the municipality or county in which the business is located, or, in the case of a business located in an incorporated area of the county, within the county in which the business is located. "Capital improvement" means (i) the purchase, renovation, rehabilitation, or construction of permanent tangible land, buildings, structures, equipment, and furnishings at an approved project site in Illinois and (ii) expenditures for goods or services that are normally capitalized, including organizational costs and research and development costs incurred in Illinois. For land, buildings, structures, and equipment that are leased, the term of the lease must equal or exceed the term of the agreement, and the cost of the property shall be determined from the present value, using the corporate interest rate prevailing at the time of the application, of the lease payments. "Department" means the Department of Commerce and Economic Opportunity. "Director" means the Director of Commerce and Economic Opportunity. "Full-time employee" means an individual who is employed for consideration for at least 35 hours each week or who renders any other standard of service generally accepted by industry custom or practice as full-time employment. An individual for whom a W-2 is issued by a Professional Employer Organization (PEO) is a full-time employee if employed in the service of the applicant for consideration for at least 35 hours each week. "Incremental income tax" means the total amount withheld during the taxable year from the compensation of new employees and, if applicable, retained employees under Article 7 of the Illinois Income Tax Act arising from employment at a project that is the subject of an agreement. "New employee" means a newly-hired full-time employee employed to work at the project site and whose work is directly related to the project. "Noncompliance date" means, in the case of a taxpayer that is not complying with the requirements of the agreement or the provisions of this Act, the day following the last date upon which the taxpayer was in compliance with the requirements of the agreement and the provisions of this Act, as determined by the Director. "Pass-through entity" means an entity that is exempt from the tax under subsection (b) or (c) of Section 205 of the Illinois Income Tax Act. "Placed in service" means that the facility is in a state or condition of readiness, is available for a specifically assigned function, and is constructed and ready to conduct manufacturing operations. "Professional employer organization" (PEO) means an employee leasing company, as defined in Section 206.1 of the Illinois Unemployment Insurance Act. "Program" means the Advancing Innovative Manufacturing for Illinois Tax Credit program established in this Act. "Project" means a for-profit economic development activity involving advanced manufacturing. "Related member" means a person that, with respect to the taxpayer during any portion of the taxable year, is any one of the following: (1) An individual stockholder, if the stockholder and the members of the stockholder's family (as defined in Section 318 of the Internal Revenue Code) own directly, indirectly, beneficially, or constructively, in the aggregate, at least 50% of the value of the taxpayer's outstanding stock. (2) A partnership, estate, trust and any partner or beneficiary, if the partnership, estate, or trust, and its partners or beneficiaries own directly, indirectly, beneficially, or constructively, in the aggregate, at least 50% of the profits, capital, stock, or value of the taxpayer. (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 taxpayer owns directly, indirectly, beneficially, or constructively at least 50% of the value of the corporation's outstanding stock. (4) A corporation and any party related to that corporation in a manner that would require an attribution of stock from the corporation to the party or from the party to the corporation under the attribution rules of Section 318 of the Internal Revenue Code, if the corporation and all such related parties own in the aggregate at least 50% of the profits, capital, stock, or value of the taxpayer. (5) A person to or from whom there is an attribution of stock ownership in accordance with Section 1563(e) of the Internal Revenue Code, except, for purposes of determining whether a person is a related member under this paragraph, 20% shall be substituted for 5% wherever 5% appears in Section 1563(e) of the Internal Revenue Code. "Research and development" means work directed toward the innovation, introduction, and improvement of products and processes in the space of advanced manufacturing. "Retained employee" means a full-time employee who is employed by the taxpayer before the first day of the term of the agreement, who continues to be employed by the taxpayer during the term of the agreement, and whose job duties are directly and substantially related to the project. For purposes of this definition, "directly and substantially related to the project" means that at least two-thirds of the employee's job duties must be directly related to the project and the employee must devote at least two-thirds of his or her time to the project. The term "retained employee" does not include any individual who has a direct or an indirect ownership interest of at least 5% in the profits, equity, capital, or value of the taxpayer or a child, grandchild, parent, or spouse, other than a spouse who is legally separated from the individual, of any individual who has a direct or indirect ownership of at least 5% in the profits, equity, capital, or value of the taxpayer. "Statewide baseline" means the total number of full-time employees of the applicant and any related member employed by such entities in Illinois at the time of application for incentives under this Act. "Taxpayer" means an individual, corporation, partnership, or other entity that has a legal obligation to pay Illinois income taxes and file an Illinois income tax return. "Underserved area" means any geographic area as defined in Section 5-5 of the Economic Development for a Growing Economy Tax Credit Act. (Source: P.A. 104-6, eff. 6-16-25.)

35 ILCS 65/77-15 Powers of the Department

(35 ILCS 65/77-15) Sec. 77-15. Powers of the Department. The Department, in addition to those powers granted under the Civil Administrative Code of Illinois, is granted and shall have all the powers necessary or convenient to administer the program under this Act and to carry out and effectuate the purposes and provisions of this Act, including, but not limited to, the power and authority to: (1) adopt rules deemed necessary and appropriate for the administration of the program, the designation of projects, and the awarding of credits; (2) establish forms for applications, notifications, contracts, or any other agreements; (3) accept applications at any time during the year; (4) assist taxpayers pursuant to the provisions of this Act and cooperate with taxpayers that are parties to agreements under this Act to promote, foster, and support economic development, capital investment, and job creation or retention within the State; (5) enter into agreements and memoranda of understanding for the participation of, and engage in cooperation with, agencies of the federal government, units of local government, universities, research foundations or institutions, regional economic development corporations, or other organizations to implement the requirements and purposes of this Act; (6) gather information and conduct inquiries, in the manner and by the methods it deems desirable, including, without limitation, gathering information with respect to applicants for the purpose of making any designations or certifications necessary or desirable or to gather information to assist the Department with any recommendation or guidance in the furtherance of the purposes of this Act; (7) establish, negotiate, and effectuate agreements and any term, agreement, or other document with any person, necessary or appropriate to accomplish the purposes of this Act and to consent, subject to the provisions of any agreement with another party, to the modification or restructuring of any agreement to which the Department is a party; (8) fix, determine, charge, and collect any premiums, fees, charges, costs, and expenses from applicants, including, without limitation, any application fees, commitment fees, program fees, financing charges, or publication fees as deemed appropriate to pay expenses necessary or incident to the administration, staffing, or operation of the Department's activities under this Act, or for preparation, implementation, and enforcement of the terms of the agreement, or for consultation, advisory and legal fees, and other costs; all of those fees and expenses shall be the responsibility of the applicant; (9) provide for sufficient personnel to permit administration, staffing, operation, and related support required to adequately discharge its duties and responsibilities described in this Act from funds made available through charges to applicants or from funds as may be appropriated by the General Assembly for the administration of this Act; (10) require applicants, upon written request, to issue any necessary authorization to the appropriate federal, State, or local authority for the release of information concerning a project being considered under this Act, including, but not be limited to, financial reports, returns, or records relating to the taxpayer or its project; (11) require that a taxpayer shall, at all times, keep proper books of record and account in accordance with generally accepted accounting principles; any books, records, or papers related to the agreement shall be kept in the custody or control of the taxpayer and shall be open for reasonable Department inspection and audit, including, without limitation, the making of copies of the books, records, or papers and the inspection or appraisal of any of the taxpayer's or project's assets; and (12) take whatever actions are necessary or appropriate to protect the State's interest in the event of bankruptcy, default, foreclosure, or noncompliance with the terms and conditions of financial assistance or participation required under this Act, including the power to sell, dispose, lease, or rent, upon terms and conditions determined by the Director to be appropriate, real or personal property that the Department may receive as a result of these actions. (Source: P.A. 104-6, eff. 6-16-25.)

35 ILCS 65/77-20 Advancing Innovative Manufacturing for Illinois Tax Credit project applications

(35 ILCS 65/77-20) Sec. 77-20. Advancing Innovative Manufacturing for Illinois Tax Credit project applications. (a) The Advancing Innovative Manufacturing for Illinois Tax Credit program is hereby established and shall be administered by the Department. The Program will provide investment tax credit incentives to eligible manufacturers of critically demanded goods. (b) A taxpayer planning a project to be located in Illinois may request consideration for designation of its project as an Advancing Innovative Manufacturing for Illinois Tax Credit program project by formal written letter of request to the Department. The letter must, at a minimum, identify the company name and project location, detail the scope of the project, and specify the amount of intended capital investment in the project, the number of new full-time employees at a designated location in Illinois, the number of retained employees at a project location and across Illinois, and any change in the statewide baseline. As circumstances require, the Department shall require a formal application from an applicant. (c) The Department of Commerce and Economic Opportunity shall review the merits of each letter provided to evaluate the taxpayer's demonstrated commitment to expanding manufacturing within Illinois, the overall positive fiscal impact of the project on the State, the economic soundness of the project, and the benefit of the project to the people of the State through increased, retained, or improved employment opportunities. In the Department's evaluation of the project, special consideration may be applied to projects located within underserved areas; projects targeting industries that are vital to the Illinois economy; projects with significant job creation or job retention, or both; and projects with considerable capital improvement investments. At a minimum, the Department shall review project applications that include a capital improvement investment of at least $10,000,000. (d) A taxpayer may not enter into more than one agreement under this Act with respect to a single address or location for the same period of time. A taxpayer may not enter into an agreement under this Act with respect to a single address or location if the taxpayer also holds an active agreement under the Economic Development for a Growing Economy Tax Credit Act, Reimagining Electric Vehicles in Illinois Tax Credit Act, Manufacturing Illinois Chips for Real Opportunity Act, or Data Center Investment Tax Exemptions and Credits for the same period of time. This provision does not preclude the applicant from entering into an additional agreement after the expiration or voluntary termination of an earlier agreement under this Act or under the Economic Development for a Growing Economy Tax Credit Act, Reimagining Electric Vehicles in Illinois Tax Credit Act, Manufacturing Illinois Chips for Real Opportunity Act, or Data Center Investment Tax Exemptions and Credits to the extent that the taxpayer's application otherwise satisfies the terms and conditions of this Act and is approved by the Department. An applicant with an existing agreement under the Economic Development for a Growing Economy Tax Credit Act, Reimagining Electric Vehicles in Illinois Tax Credit Act, Manufacturing Illinois Chips for Real Opportunity Act, or Data Center Investment Tax Exemptions and Credits may submit an application for an agreement under this Act after it terminates any existing agreement under the Economic Development for a Growing Economy Tax Credit Act, Reimagining Electric Vehicles in Illinois Tax Credit Act, Manufacturing Illinois Chips for Real Opportunity Act, or Data Center Investment Tax Exemptions and Credits with respect to the same address or location. (Source: P.A. 104-6, eff. 6-16-25.)

35 ILCS 65/77-25

(35 ILCS 65/77-25) Sec. 77-25. Tax credit awards. (a) Subject to the conditions set forth in this Act, a taxpayer is entitled to a credit against the tax imposed under subsections (a) and (b) of Section 201 of the Illinois Income Tax Act for taxable years beginning on or after January 1, 2026. The Department may award credits under this Act on and after January 1, 2027. (b) The credit under this Act shall not exceed 7% of the applicant's total capital improvement investments for the year for which the applicant seeks credit. Credits awarded under this Act shall not reduce a taxpayer's liability for the tax imposed by subsections (a) and (b) of Section 201 of the Illinois Income Tax Act to less than zero. Unused credit may be carried forward for a maximum of 10 years for use in future taxable years. Any taxpayer qualifying for credits under this Act shall not be eligible for the credits under subsections (e), (f), or (h) of Section 201 of the Illinois Income Tax Act for the same expenditures for the same taxable period. (c) The Department shall certify to the Department of Revenue: (1) the identity of taxpayers that are eligible to receive tax credits under this Act and (2) the amount of the credits awarded in each calendar year. Credits so earned and certified by the Department may be applied against the tax imposed by Section subsections (a) and (b) of Section 201 of the Illinois Income Tax Act for taxable years beginning on or after January 1, 2026. (d) Any applicant issued a certificate for a tax credit under this Act must report to the Department the total project tax benefits received. Reports are due no later than April 15 of the year in which the applicant is seeking the credit and shall cover the entire project period. Failure to report data may result in ineligibility to receive incentives. The Department, in consultation with the Department of Revenue, is authorized to adopt rules governing ineligibility to receive exemptions, including the length of ineligibility. Factors to be considered in determining whether a business is ineligible include, but are not limited to, prior compliance with the reporting requirements, cooperation in discontinuing and correcting violations, the extent of the violation, and whether the violation was willful or inadvertent. (e) The Department shall determine the amount and duration of the credit awarded under this Act, subject to the limitations set forth in this Act. The credit amount shall be determined based on the total amount of the capital improvement investment made by the taxpayer. A capital improvement investment of $10,000,000 or more but less than $50,000,000 shall result in a maximum credit of 3% of the capital improvement amount; a capital improvement investment of $50,000,000 or more but less than $100,000,000 shall result in a maximum credit of 5% of the capital improvement amount; a capital improvement investment of $100,000,000 or more shall result in a maximum credit of 7% of the capital improvement amount. Projects may be granted a tax credit award that reflects investments made within a maximum 5-year period. Each program agreement will detail a specific placed-in-service date by which the company must complete the project investment. Credit for a project shall be issued after the project is placed in service. (f) Nothing in this Section shall prevent the Department, in consultation with the Department of Revenue, from adopting rules to extend the sunset of any earned, existing, and unused tax credit or credits awarded under this Act that a taxpayer may be in possession of. (Source: P.A. 104-6, eff. 6-16-25.)

35 ILCS 65/77-30

(35 ILCS 65/77-30) Sec. 77-30. Contents of agreements with applicants. (a) The Department shall enter into an agreement with an applicant that is awarded a credit under this Act. The agreement shall include all of the following: (1) a detailed description of the project that is the subject of the agreement, including the location and amount of the investment and jobs created or retained; (2) the duration of the credit, the first taxable year for which the credit may be awarded, and the first taxable year in which the credit may be used by the taxpayer; (3) the maximum allowable credit as a percentage of the project's total capital investment; (4) a requirement that the taxpayer shall maintain operations at the project location for a minimum of 15 years; (5) a requirement that the taxpayer shall, at the time that the project is placed in service, report to the Department the number of new employees, the number of retained employees, and the total capital improvement investment of the project, and any other information the Department deems necessary and appropriate to perform its duties under this Act; (6) a requirement authorizing the Director to verify with the appropriate State agencies the amounts reported under paragraph (5), and, after doing so, to issue a certificate to the taxpayer stating that the amounts have been verified; (7) a requirement that the taxpayer shall provide written notification to the Director not more than 30 days after the taxpayer makes or receives a proposal that would transfer the taxpayer's State tax liability obligations to a successor taxpayer; (8) a detailed description of the number of new employees to be hired, and the occupation and payroll of full-time jobs to be created or retained because of the project; (9) the minimum investment the taxpayer will make in capital improvements, the time period for which the project may claim credit, and the designated location in Illinois for the investment; (10) a requirement that the taxpayer shall provide written notification to the Director and the Director's designee not more than 30 days after the taxpayer determines that the minimum job creation or retention, employment payroll, or investment no longer is or will be achieved or maintained as set forth in the terms and conditions of the agreement. Additionally, the notification should outline to the Department the number of layoffs, date of the layoffs, and detail taxpayer's efforts to provide career and training counseling for the impacted workers with industry-related certifications and trainings; (11) a provision that, if the total number of new employees falls below a specified level, the allowance of credit shall be suspended until the number of new employees equals or exceeds the agreement amount; (12) a detailed description of the items for which the costs incurred by the taxpayer will be included in the limitation on the credit; (13) a provision stating that if the taxpayer ceases principal operations with the intent to permanently shut down the project in the State during the term of the agreement, then the entire credit amount awarded to the taxpayer prior to the date the taxpayer ceases principal operations shall be returned to the Department and shall be reallocated to the local workforce investment area in which the project was located; and (14) any other performance conditions or contract provisions the Department determines are necessary or appropriate. (b) The Department shall post on its website the terms of each agreement entered into under this Act. The information shall be posted within 10 days after entering into the agreement and must include the following: (1) the name of the taxpayer; (2) the location of the project; (3) the estimated value of the credit; (4) the number of new employee jobs and, if applicable, number of retained employee jobs at the project; and (5) whether or not the project is in an underserved area or energy transition area. (Source: P.A. 104-6, eff. 6-16-25.)

35 ILCS 65/77-35 Certificate of verification; submission to the Department of Revenue

(35 ILCS 65/77-35) Sec. 77-35. Certificate of verification; submission to the Department of Revenue. (a) A taxpayer claiming a credit under this Act shall submit to the Department of Revenue a copy of the Director's certificate of verification under this Act for the taxable year. However, failure to submit a copy of the certificate with the taxpayer's tax return shall not invalidate a claim for a credit. (b) For a taxpayer to be eligible for a certificate of verification, the taxpayer shall provide proof as required by the Department, prior to the end of each calendar year, including, but not limited to, attestation by the taxpayer that the project has achieved the level of capital improvements in Illinois specified in its agreement. (Source: P.A. 104-6, eff. 6-16-25.)

35 ILCS 65/77-40

(35 ILCS 65/77-40) Sec. 77-40. Noncompliance; notice; assessment. If the Director determines that a taxpayer who has received a credit under this Act is not complying with the requirements of the agreement or all of the provisions of this Act, the Director shall provide notice to the taxpayer of the alleged noncompliance and allow the taxpayer a hearing under the provisions of the Illinois Administrative Procedure Act. If, after such notice and any hearing, the Director determines that noncompliance exists, the Director shall issue to the Department of Revenue a notice to that effect, stating the noncompliance date. If, during the term of an agreement, the taxpayer ceases operations at a project location that is the subject of the agreement with the intent to terminate operations in the State, the Department and the Department of Revenue shall recapture from the taxpayer the entire credit amount awarded under that agreement prior to the date the taxpayer ceases operations. The Department shall, subject to appropriation, reallocate the recaptured amounts within 6 months to the local workforce investment area in which the project was located for purposes of workforce development, expanded opportunities for unemployed persons, and expanded opportunities for women and minority persons in the workforce. The taxpayer will be ineligible for future funding under other State tax credit or exemption programs for a 36-month period. Noncompliance with the agreement will result in a default of other agreements for State tax credits and exemption programs for the project. (Source: P.A. 104-6, eff. 6-16-25.)

35 ILCS 65/77-45

(35 ILCS 65/77-45) Sec. 77-45. Annual report. (a) On or before July 1 of each year, the Department shall submit a report on the tax credit program under this Act to the Governor and the General Assembly. The report shall include information on the number of agreements that were entered into under this Act during the preceding calendar year, a description of the project that is the subject of each agreement, an update on the status of projects under agreements entered into before the preceding calendar year, and the sum of the credits awarded under this Act. A copy of the report shall be delivered to the Governor and to each member of the General Assembly. (b) The report must include, for each agreement: (1) the original estimates of the value of the credit and the number of new employee jobs to be created and, if applicable, the number of retained employee jobs; (2) any relevant modifications to existing agreements; and (3) a copy of the original agreement or link to the agreement on the Department's website. (Source: P.A. 104-6, eff. 6-16-25.)

35 ILCS 65/77-50

(35 ILCS 65/77-50) Sec. 77-50. Sunset of new agreements. The Department shall not enter into any new agreements under the provisions of this Act after December 31, 2030. (Source: P.A. 104-6, eff. 6-16-25.)

35 ILCS 65/95-95

(35 ILCS 65/95-95) Sec. 95-95. No acceleration or delay. Where this Act makes changes in a statute that is represented in this Act by text that is not yet or no longer in effect (for example, a Section represented by multiple versions), the use of that text does not accelerate or delay the taking effect of (i) the changes made by this Act or (ii) provisions derived from any other Public Act. (Source: P.A. 104-6, eff. 6-16-25.)

35 ILCS 65/95-97 Severability

(35 ILCS 65/95-97) Sec. 95-97. Severability. The provisions of this Act are severable under Section 1.31 of the Statute on Statutes. (Source: P.A. 104-6, eff. 6-16-25.)

35 ILCS 65/99-99

(35 ILCS 65/99-99) Sec. 99-99. Effective date. This Act takes effect upon becoming law, except that Articles 10 and 65 takes effect on July 1, 2025, Articles 15 and 55 take effect on January 1, 2026, and the changes made in Article 40 to Section 1.1 of the Motor Fuel Tax Law, the Cigarette Machine Operators' Occupation Tax Act, the Cigarette Tax Act, the Cigarette Use Tax Act, and the Tobacco Products Tax Act of 1995 take effect January 1, 2026. (Source: P.A. 104-6, eff. 6-16-25.)

Source: Open US Law by Vaquill AI (CC BY 4.0)URL: https://www.ilga.gov/legislation/ilcs/ilcs.aspFetched: 10/17/2026