New Law Creates Angel Investment Tax Credit, Doubles New Markets Tax Credit, Launches Economic Development Pilot Program for Southern Illinois
MARION ï¿½ June 24, 2010. Governor Pat Quinn today signed a bill into law that will encourage investment into Illinoisï¿½ businesses and support Southern Illinoisï¿½ economy.
Senate Bill 2093 will create the Angel Investment Tax Credit to support direct investment by Illinois entrepreneurs and start-up companies and will double the stateï¿½s existing New Markets Tax Credit for new investment into small businesses in underserved communities. In addition, it creates a pilot program ï¿½ Sales Tax and Revenue (STAR) bonds ï¿½ to help develop a major retail and entertainment complex near Marion in Southern Illinois.
ï¿½Illinois has created more jobs this year than any other state in the Midwest. We must continue to work day and night to ensure residents across the state have access to a good paying job and direct investment into Illinoisï¿½ businesses and entrepreneurs is one of the best ways to do that,ï¿½ said Governor Quinn. ï¿½This new law will bring investment, spur economic development and create jobs across Illinois.ï¿½
Governor Quinn first announced the Angel Investment Tax Credit in a speech he gave in December as part of his Illinois Economic Recovery Plan. The new tax credit encourages investment into innovative Illinois businesses that are working to get off the ground. Under the new law, investors may claim 25 percent of an investment into a qualified Illinois business venture - up to $2 million in investment for a $500,000 credit. The program is capped at $10 million in tax credits, which will drive $40 million in investment.
ï¿½Governor Quinn and the General Assembly should be congratulated for enacting the Angel Tax Credit,ï¿½ said David Miller, CEO of the Illinois Biotechnology Industry Organization (known as iBIOï¿½). ï¿½Passage of this measure sends a strong signal that Illinois ï¿½ always among the best in research ï¿½ will take its rightful place as among the best in generating and attracting high-paying technology jobs.ï¿½
The new law doubles the cap on Illinoisï¿½ existing New Markets Tax Credit program - from $10 million to $20 million. The program provides tax credits for new investment into small businesses in low-income communities. The increased cap could generate $125 million in private investment into Illinois businesses. Illinois began its New Markets Tax Credit last year and exhausted the $10 million cap within six months.
Senate Bill 2093 also creates the STAR bonds pilot program to allow a portion of the sales tax revenues generated by a major retail and entertainment complex near Marion to repay its development and construction costs.
The proposed 400 acre shopping and entertainment complex will be near Interstate 57 north of Illinois 13. The STAR bonds would help finance the cost of building the $378 million project. The legislation calls for the creation of at least 500 jobs during the first five years of the pilot program.
Governor Quinn is focused on economic development and job creation in Southern Illinois, which has seen unemployment range from 12 to 15 percent during 2010, among the highest rates in the state. State sales taxes may only be used to finance up to 50 percent of the development costs.
Senate Bill 2093 was sponsored by Senator Gary Forby (D-Benton) and Representative John Bradley (D-Marion). The law takes effect immediately except for certain provisions that take effect on July 1 or January 1, 2011.
"Most importantly, this bill will put people back to work in Southern Illinois," said Sen. Forby. "It has the potential to get more foot traffic through the doors of other surrounding shops and the tax incentive will attract businesses that would have otherwise developed in another state."
ï¿½Thank you, Governor Quinn for giving us an opportunity we have never had in Southern Illinois,ï¿½ said Rep. Bradley. ï¿½This has the potential to be the largest economic development project in the history of our region. This fulfills Governor Quinnï¿½s priority of creating jobs throughout Illinois.ï¿½