35 ILCS 5/237 — REV Illinois Investment Tax credits

Sec. 237. REV Illinois Investment Tax credits.

# (a)

For tax years beginning on or after November 16, 2021 (the effective date of Public Act 102-669), a taxpayer shall be allowed a credit against the tax imposed by subsections (a) and (b) of Section 201 for investment in qualified property which is placed in service at the site of a REV Illinois Project subject to an agreement between the taxpayer and the Department of Commerce and Economic Opportunity pursuant to the Reimagining Energy and Vehicles in Illinois Act. For taxable years ending before December 31, 2023, for partners, shareholders of Subchapter S corporations, and owners of limited liability companies, if the liability company is treated as a partnership for purposes of federal and State income taxation, there shall be allowed a credit under this Section to be determined in accordance with the determination of income and distributive share of income under Sections 702 and 704 and Subchapter S of the Internal Revenue Code. For taxable years ending on or after December 31, 2023, partners and shareholders of subchapter S corporations are entitled to a credit under this Section as provided in Section 251. The credit shall be 0.5% of the basis for such property. The credit shall be available only in the taxable year in which the property is placed in service and shall not be allowed to the extent that it would reduce a taxpayer's liability for the tax imposed by subsections (a) and (b) of Section 201 to below zero. The credit shall be allowed for the tax year in which the property is placed in service, or, if the amount of the credit exceeds the tax liability for that year, whether it exceeds the original liability or the liability as later amended, such excess may be carried forward and applied to the tax liability of the 5 taxable years following the excess credit year. The credit shall be applied to the earliest year for which there is a liability. If there is credit from more than one tax year that is available to offset a liability, the credit accruing first in time shall be applied first.

# (b)

The term qualified property means property which: (1) is tangible, whether new or used, including buildings and structural components of buildings; (2) is depreciable pursuant to Section 167 of the Internal Revenue Code, except that "3-year property" as defined in Section 168(c)(2)(A) of that Code is not eligible for the credit provided by this Section; (3) is acquired by purchase as defined in Section 179(d) of the Internal Revenue Code; (4) is used at the site of the REV Illinois Project by the taxpayer; and (5) has not been previously used in Illinois in such a manner and by such a person as would qualify for the credit provided by this Section.

# (c)

The basis of qualified property shall be the basis used to compute the depreciation deduction for federal income tax purposes.

# (d)

If the basis of the property for federal income tax depreciation purposes is increased after it has been placed in service at the site of the REV Illinois Project by the taxpayer, the amount of such increase shall be deemed property placed in service on the date of such increase in basis.

# (e)

The term "placed in service" shall have the same meaning as under Section 46 of the Internal Revenue Code.

# (f)

If during any taxable year, any property ceases to be qualified property in the hands of the taxpayer within 48 months after being placed in service, or the situs of any qualified property is moved from the REV Illinois Project site within 48 months after being placed in service, the tax imposed under subsections (a) and (b) of Section 201 for such taxable year shall be increased. Such increase shall be determined by (i) recomputing the investment credit which would have been allowed for the year in which credit for such property was originally allowed by eliminating such property from such computation, and (ii) subtracting such recomputed credit from the amount of credit previously allowed. For the purposes of this subsection (f), a reduction of the basis of qualified property resulting from a redetermination of the purchase price shall be deemed a disposition of qualified property to the extent of such reduction. (Source: P.A. 102-669, eff. 11-16-21; 102-1125, eff. 2-3-23; 103-396, eff. 1-1-24; 103-605, eff. 7-1-24.)