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104TH GENERAL ASSEMBLY
State of Illinois
2025 and 2026
SB3934

Introduced 2/6/2026, by Sen. Julie A. Morrison

SYNOPSIS AS INTRODUCED:

35 ILCS 10/5-15

Amends the Economic Development for a Growing Economy Tax Credit Act.
Provides that an election to claim the credit against the taxpayer's
withholding tax liability also applies to certain taxpayers that are
primarily engaged in the business of pharmacy, health, and wellness and
that have a corporate headquarters and distribution centers located in
Illinois.
LRB104 18620 HLH 32063 b

A BILL FOR

SB3934
LRB104 18620 HLH 32063 b
1

AN ACT concerning revenue.

2

Be it enacted by the People of the State of Illinois,
3
represented in the General Assembly:

4

Section 5.
The Economic Development for a Growing Economy
5
Tax Credit Act is amended by changing Section 5-15 as follows:

6

(35 ILCS 10/5-15)
7

Sec. 5-15.
Tax Credit Awards.
Subject to the conditions
8
set forth in this Act, a Taxpayer is entitled to a Credit
9
against or, as described in subsection (g) of this Section, a
10
payment towards taxes imposed pursuant to subsections (a) and
11
(b) of Section 201 of the Illinois Income Tax Act that may be
12
imposed on the Taxpayer for a taxable year beginning on or
13
after January 1, 1999, if the Taxpayer is awarded a Credit by
14
the Department under this Act for that taxable year.
15

(a) The Department shall make Credit awards under this Act
16
to foster job creation and retention in Illinois.
17

(b) A person that proposes a project to create new jobs in
18
Illinois must enter into an Agreement with the Department for
19
the Credit under this Act.
20

(c) The Credit shall be claimed for the taxable years
21
specified in the Agreement.
22

(d) The Credit shall not exceed the Incremental Income Tax
23
attributable to the project that is the subject of the

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LRB104 18620 HLH 32063 b
1
Agreement.
2

(e) Nothing herein shall prohibit a Tax Credit Award to an
3
Applicant that uses a PEO if all other award criteria are
4
satisfied.
5

(f) In lieu of the Credit allowed under this Act against
6
the taxes imposed pursuant to subsections (a) and (b) of
7
Section 201 of the Illinois Income Tax Act for any taxable year
8
ending on or after December 31, 2009, for Taxpayers that
9
entered into Agreements prior to January 1, 2015 and otherwise
10
meet the criteria set forth in this subsection (f), the
11
Taxpayer may elect to claim the Credit against its obligation
12
to pay over withholding under Section 704A of the Illinois
13
Income Tax Act.
14

(1) The election under this subsection (f) may be made
15

only by a Taxpayer that (i) is primarily engaged in one of
16

the following business activities: water purification and
17

treatment, motor vehicle metal stamping, automobile
18

manufacturing, automobile and light duty motor vehicle
19

manufacturing, motor vehicle manufacturing, light truck
20

and utility vehicle manufacturing, heavy duty truck
21

manufacturing, motor vehicle body manufacturing, cable
22

television infrastructure design or manufacturing, or
23

wireless telecommunication or computing terminal device
24

design or manufacturing for use on public networks and
25

(ii) meets the following criteria:
26

(A) the Taxpayer (i) had an Illinois net loss or an

SB3934
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1

Illinois net loss deduction under Section 207 of the
2

Illinois Income Tax Act for the taxable year in which
3

the Credit is awarded, (ii) employed a minimum of
4

1,000 full-time employees in this State during the
5

taxable year in which the Credit is awarded, (iii) has
6

an Agreement under this Act on December 14, 2009 (the
7

effective date of Public Act 96-834), and (iv) is in
8

compliance with all provisions of that Agreement;
9

(B) the Taxpayer (i) had an Illinois net loss or an
10

Illinois net loss deduction under Section 207 of the
11

Illinois Income Tax Act for the taxable year in which
12

the Credit is awarded, (ii) employed a minimum of
13

1,000 full-time employees in this State during the
14

taxable year in which the Credit is awarded, and (iii)
15

has applied for an Agreement within 365 days after
16

December 14, 2009 (the effective date of Public Act
17

96-834);
18

(C) the Taxpayer (i) had an Illinois net operating
19

loss carryforward under Section 207 of the Illinois
20

Income Tax Act in a taxable year ending during
21

calendar year 2008, (ii) has applied for an Agreement
22

within 150 days after the effective date of this
23

amendatory Act of the 96th General Assembly, (iii)
24

creates at least 400 new jobs in Illinois, (iv)
25

retains at least 2,000 jobs in Illinois that would
26

have been at risk of relocation out of Illinois over a

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1

10-year period, and (v) makes a capital investment of
2

at least $75,000,000;
3

(D) the Taxpayer (i) had an Illinois net operating
4

loss carryforward under Section 207 of the Illinois
5

Income Tax Act in a taxable year ending during
6

calendar year 2009, (ii) has applied for an Agreement
7

within 150 days after the effective date of this
8

amendatory Act of the 96th General Assembly, (iii)
9

creates at least 150 new jobs, (iv) retains at least
10

1,000 jobs in Illinois that would have been at risk of
11

relocation out of Illinois over a 10-year period, and
12

(v) makes a capital investment of at least
13

$57,000,000; or
14

(E) the Taxpayer (i) employed at least 2,500
15

full-time employees in the State during the year in
16

which the Credit is awarded, (ii) commits to make at
17

least $500,000,000 in combined capital improvements
18

and project costs under the Agreement, (iii) applies
19

for an Agreement between January 1, 2011 and June 30,
20

2011, (iv) executes an Agreement for the Credit during
21

calendar year 2011, and (v) was incorporated no more
22

than 5 years before the filing of an application for an
23

Agreement.
24

(1.5) The election under this subsection (f) may also
25

be made by a Taxpayer for any Credit awarded pursuant to an
26

agreement that was executed between January 1, 2011 and

SB3934
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LRB104 18620 HLH 32063 b
1

June 30, 2011, if the Taxpayer (i) is primarily engaged in
2

the manufacture of inner tubes or tires, or both, from
3

natural and synthetic rubber, (ii) employs a minimum of
4

2,400 full-time employees in Illinois at the time of
5

application, (iii) creates at least 350 full-time jobs and
6

retains at least 250 full-time jobs in Illinois that would
7

have been at risk of being created or retained outside of
8

Illinois, and (iv) makes a capital investment of at least
9

$200,000,000 at the project location.
10

(1.6) The election under this subsection (f) may also
11

be made by a Taxpayer for any Credit awarded pursuant to an
12

agreement that was executed within 150 days after the
13

effective date of this amendatory Act of the 97th General
14

Assembly, if the Taxpayer (i) is primarily engaged in the
15

operation of a discount department store, (ii) maintains
16

its corporate headquarters in Illinois, (iii) employs a
17

minimum of 4,250 full-time employees at its corporate
18

headquarters in Illinois at the time of application, (iv)
19

retains at least 4,250 full-time jobs in Illinois that
20

would have been at risk of being relocated outside of
21

Illinois, (v) had a minimum of $40,000,000,000 in total
22

revenue in 2010, and (vi) makes a capital investment of at
23

least $300,000,000 at the project location.
24

(1.7) Notwithstanding any other provision of law, the
25

election under this subsection (f) may also be made by a
26

Taxpayer for any Credit awarded pursuant to an agreement

SB3934
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LRB104 18620 HLH 32063 b
1

that was executed or applied for on or after July 1, 2011
2

and on or before March 31, 2012, if the Taxpayer is
3

primarily engaged in the manufacture of original and
4

aftermarket filtration parts and products for automobiles,
5

motor vehicles, light duty motor vehicles, light trucks
6

and utility vehicles, and heavy duty trucks, (ii) employs
7

a minimum of 1,000 full-time employees in Illinois at the
8

time of application, (iii) creates at least 250 full-time
9

jobs in Illinois, (iv) relocates its corporate
10

headquarters to Illinois from another state, and (v) makes
11

a capital investment of at least $4,000,000 at the project
12

location.
13

(1.8) Notwithstanding any other provision of law, the
14

election under this subsection (f) may also be made by a
15

startup taxpayer for any Credit awarded pursuant to an
16

Agreement that was executed on or after the effective date
17

of this amendatory Act of the 102nd General Assembly. Any
18

such election under this paragraph (1.8) shall be
19

effective unless and until such startup taxpayer has any
20

Illinois income tax liability. This election under this
21

paragraph (1.8) shall automatically terminate when the
22

startup taxpayer has any Illinois income tax liability at
23

the end of any taxable year during the term of the
24

Agreement. Thereafter, the startup taxpayer may receive a
25

Credit, taking into account any benefits previously
26

enjoyed or received by way of the election under this

SB3934
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LRB104 18620 HLH 32063 b
1

paragraph (1.8), so long as the startup taxpayer remains
2

in compliance with the terms and conditions of the
3

Agreement.
4

(1.9) Notwithstanding any other provision of law, the
5

election under this subsection (f) may be made by an
6

applicant qualified under paragraph (1.7) or (1.8) of
7

subsection (b) of Section 5-20 for any Credit awarded
8

pursuant to an Agreement that was executed on or after the
9

effective date of this amendatory Act of the 104th General
10

Assembly. Any such election under this paragraph (1.9)
11

shall be made by entering into an agreement with the
12

Department that allows for such an election and remain
13

effective for the duration of the agreement allowing for
14

the election.
15

(1.10) The election under this subsection (f) may also
16

be made by a taxpayer that (i) is primarily engaged in the
17

recycling and melting of steel products and in the
18

manufacturing of new steel wire and rod products, (ii)
19

retains at least 700 full-time jobs that would have been
20

at risk of facing termination or relocation outside of
21

Illinois, (iii) relocates its corporate headquarters to
22

Illinois from another state, (iv) makes a capital
23

investment of at least $40,000,000 within 4 years after
24

the effective date of an Agreement under this Act, and (v)
25

makes an application for an agreement within 90 days after
26

the effective date of this amendatory Act of the 104th

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LRB104 18620 HLH 32063 b
1

General Assembly. The duration of the credit under this
2

paragraph (1.10) may not exceed 15 taxable years.
3

(1.11) Notwithstanding any other provision of law, the
4

election under this subsection (f) may also be made by a
5

taxpayer that:

6

(A) is a privately held corporation that is
7

primarily engaged in the business of pharmacy, health,
8

and wellness and that has distribution centers located
9

in Illinois;

10

(B) maintains its corporate headquarters in the
11

State of Illinois;

12

(C) employs at least 2,500 employees in full-time
13

jobs or full-time equivalent jobs at its corporate
14

headquarters within the State of Illinois, some of
15

whom would be at risk of termination if not for the use
16

of the tax credit as provided in this paragraph during
17

the term of the agreement;

18

(D) commits to make at least $100,000,000 in
19

aggregate investment during the term of the agreement
20

in one or more of the following: capital investment;
21

infrastructure; development; research and development;
22

job training; or lease expenses;

23

(E) commits to maintaining at least 450 retail
24

locations in the State;

25

(F) had an Illinois net loss or was entitled to a
26

State of Illinois net loss deduction under Section 207

SB3934
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LRB104 18620 HLH 32063 b
1

of the Illinois Income Tax Act either (i) for the
2

taxable year in which the credit is first approved
3

under this subsection or (ii) within the 2 taxable
4

years immediately preceding the taxable year in which
5

the credit is first approved; and

6

(G) makes an application for an Agreement within
7

120 days after the effective date of this amendatory
8

Act of the 104th General Assembly.

9

The credits awarded under this paragraph (1.11) shall
10

be applied solely against the Illinois income tax
11

withholding obligations of individuals employed at its
12

corporate headquarters with the State of Illinois. The
13

term of the agreement shall not exceed 8 years or until the
14

amount of the credit awarded to the taxpayer under this
15

paragraph reaches $75,000,000, whichever occurs first.
16

Notwithstanding the credits afforded to retained employees
17

under this paragraph, an eligible taxpayer under this
18

paragraph shall be entitled to credits for new full-time
19

employees hired above the existing baseline of total
20

full-time employees at its corporate headquarters with the
21

State of Illinois at the time of the effective date of the
22

agreement. Notwithstanding any other provision of this
23

Act, a credit awarded under this paragraph shall be 100%
24

of the amount of withholding required under Section 704A
25

of the Illinois Income Tax Act.

26

As used in this paragraph (1.11):

SB3934
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LRB104 18620 HLH 32063 b
1

"Primarily engaged" means that more than 50% of the
2

taxpayer's gross revenue from sales or services in
3

Illinois, averaged over the preceding 3 fiscal years, is
4

derived from pharmacy, health, and wellness business
5

activities conducted in Illinois.
6

"Taxpayer" means the applicant and any related members
7

that are part of the applicant's unitary business group as
8

defined in Section 1501 of the Illinois Income Tax Act.

9

(2) An election under this subsection shall allow the
10

credit to be taken against payments otherwise due under
11

Section 704A of the Illinois Income Tax Act during the
12

first calendar quarter beginning after the end of the
13

taxable quarter in which the credit is awarded under this
14

Act.
15

(3) The election shall be made in the form and manner
16

required by the Illinois Department of Revenue and, once
17

made, shall be irrevocable.
18

(4) If a Taxpayer who meets the requirements of
19

subparagraph (A) of paragraph (1) of this subsection (f)
20

elects to claim the Credit against its withholdings as
21

provided in this subsection (f), then, on and after the
22

date of the election, the terms of the Agreement between
23

the Taxpayer and the Department may not be further amended
24

during the term of the Agreement.
25

(g) A pass-through entity that has been awarded a credit
26
under this Act, its shareholders, or its partners may treat

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LRB104 18620 HLH 32063 b
1
some or all of the credit awarded pursuant to this Act as a tax
2
payment for purposes of the Illinois Income Tax Act. The term
3
"tax payment" means a payment as described in Article 6 or
4
Article 8 of the Illinois Income Tax Act or a composite payment
5
made by a pass-through entity on behalf of any of its
6
shareholders or partners to satisfy such shareholders' or
7
partners' taxes imposed pursuant to subsections (a) and (b) of
8
Section 201 of the Illinois Income Tax Act. In no event shall
9
the amount of the award credited pursuant to this Act exceed
10
the Illinois income tax liability of the pass-through entity
11
or its shareholders or partners for the taxable year.
12
(Source: P.A. 103-9, eff. 6-7-23; 103-595, eff. 6-26-24;
13
104-6, eff. 6-16-25.)

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