Illinois Administrative Code › Title 86 - REVENUE › Part 100 - INCOME TAX › Subpart B - CREDITS › Section 100.2101 - Replacement Tax Investment Credit (IITA 201(e))

Current through Register Vol. 48, No. 28, July 12, 2024
a) A taxpayer shall be allowed a credit
				against the Personal Property Replacement Income Tax for investment in
				qualified property ("the investment credit"). The qualified property must be
				used in Illinois by a taxpayer who is primarily engaged in manufacturing,
				retailing, coal mining or fluorite mining.
b) A taxpayer shall be allowed a credit equal
				to .5% of the basis of qualified property placed in service during the taxable
				year, provided such property is placed in service on or after July 1, 1984
				(IITA Section 201(e)(1)). However, the basis of qualified property shall not
				include costs incurred after December 31, 2013, except for costs incurred
				pursuant to a binding contract entered into on or before December 31, 2013
				(IITA Section 201(e)(8)).
c) There
				shall be allowed an additional credit equal to .5% of the basis of qualified
				property placed in service during the taxable year, provided such property is
				placed in service on or after July 1, 1986, and the taxpayer's base employment
				in Illinois has increased by at least 1% over the preceding year. If, in any
				year, the increase in base employment within Illinois over the preceding year
				is less than 1%, the additional credit shall be limited to that percentage
				times a fraction, the numerator of which is .5% and denominator of which is 1%,
				but shall not exceed .5% (IITA Section 201(e)(1)).
1) Base employment. For purposes of
				calculating the additional investment credit, base employment in Illinois is
				defined as the average monthly total of individuals employed in Illinois by a
				taxpayer during the taxable year. To calculate base employment for a particular
				taxable year, the taxpayer need only total the number of individuals he
				employed in Illinois during each month of the taxable year as reported to the
				Illinois Department of Employment Security on Line 1 of Form UC-3/40 or Form
				UI-3/40M and divide this total by the number of months in the taxable
				year.
2) Example of the Additional
				Investment Credit Computation. During the calendar year 1994, Corporation A
				reported 500 employees each month on Line 1 of Form UC-3/40. Therefore,
				Corporation A's base employment in Illinois for 1994 was 500 ((500 x 12)
				divided by 12 = 500). In 1995, Corporation A reported 500 employees for each of
				the first six months, and 505 employees for each of the remaining six months of
				the taxable year. Therefore, Corporation A's base employment for 1995 was 502.5
				((500 x 6) + (505 x 6) divided by 12 = 502.5). Corporation A's percentage of
				increase in 1995 base employment over 1994 base employment is .5%. This figure
				is computed by subtracting the 1994 base employment from the 1995 base
				employment and dividing the remainder by the 1994 base employment ((502.5 -
				500) divided by 500 = .005 or .5%). Corporation A will be allowed an additional
				investment credit for 1995 of .25% (one-half of the percentage of increase)
				times the adjusted basis of qualified property placed in service in Illinois
				during the taxable year and on or after July 1, 1986.