SB 3786

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Full Text of SB3786
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	SB3786 - 104th General Assembly
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104TH GENERAL ASSEMBLY
State of Illinois
2025 and 2026
SB3786
Introduced 2/5/2026, by Sen. Seth Lewis
SYNOPSIS AS INTRODUCED:
35 ILCS 5/246 new
35 ILCS 5/247 new
35 ILCS 5/248 new
Amends Illinois Income Tax Act. Creates a legacy tax credit for businesses that are headquartered in the State. Creates an employee tax credit and a collective bargaining employee tax credit. Effective immediately.
LRB104 19218 HLH 32663 b
A BILL FOR
		SB3786		LRB104 19218 HLH 32663 b
1    AN ACT concerning State government.
2    Be it enacted by the People of the State of Illinois,
3represented in the General Assembly:
4    Section 5. The Illinois Income Tax Act is amended by
5adding Sections 246, 247, and 248 as follows:
6    (35 ILCS 5/246 new)
7    Sec. 246. Legacy credit.
8    (a) For taxable years beginning on or after January 1, 
92026, any sole proprietorship, limited liability company, or 
10corporation that is headquartered in the State is entitled to 
11a credit against the taxes imposed by subsections (a) and (b) 
12of Section 201 in an amount equal to $100 multiplied by the 
13number of years during which the taxpayer has been 
14headquartered in Illinois as of the last day of the taxable 
15year.
16    (b) If the taxpayer is a Subchapter S corporation, the 
17credit shall be allowed to shareholders in accordance with the 
18determination of income and distributive shares of income 
19under Subchapter S of Chapter 1 of the Internal Revenue Code.
20    (c) In no event shall a credit under this Section reduce 
21the taxpayer's liability to less than zero. If the amount of 
22the credit exceeds the tax liability for the year, the excess 
23may be carried forward and applied to the tax liability of the 
		SB3786	- 2 -	LRB104 19218 HLH 32663 b
15 taxable years following the excess credit year. The tax 
2credit shall be applied to the earliest year for which there is 
3a tax liability. If there are credits for more than one year 
4that are available to offset a liability, the earlier credit 
5shall be applied first.
6    (d) This Section is exempt from the provisions of Section 
7250.
8    (35 ILCS 5/247 new)
9    Sec. 247. Employee tax credit.
10    (a) For taxable years beginning on or after January 1, 
112026, any sole proprietorship, limited liability company, or 
12corporation that has a business location in the State is 
13entitled to a credit against the taxes imposed by subsections 
14(a) and (b) of Section 201 in an amount equal to $100 for each 
15employee who is a resident of the State and is on the 
16employer's payroll with 6 or more months of consecutive 
17employment with the employer at the end of the taxable year.
18    (b) If the taxpayer is a Subchapter S corporation, the 
19credit shall be allowed to shareholders in accordance with the 
20determination of income and distributive shares of income 
21under Subchapter S of Chapter 1 of the Internal Revenue Code.
22    (c) In no event shall a credit under this Section reduce 
23the taxpayer's liability to less than zero. If the amount of 
24the credit exceeds the tax liability for the year, the excess 
25may be carried forward and applied to the tax liability of the 
		SB3786	- 3 -	LRB104 19218 HLH 32663 b
15 taxable years following the excess credit year. The tax 
2credit shall be applied to the earliest year for which there is 
3a tax liability. If there are credits for more than one year 
4that are available to offset a liability, the earlier credit 
5shall be applied first.
6    (d) This Section is exempt from the provisions of Section 
7250.
8    (35 ILCS 5/248 new)
9    Sec. 248. Collective bargaining employee tax credit.
10    (a) For taxable years beginning on or after January 1, 
112026, any sole proprietorship, limited liability company, or 
12corporation that has a business location in the State is 
13entitled to a credit against the taxes imposed by subsections 
14(a) and (b) of Section 201 in an amount equal to $25 for each 
15employee who is a resident of the State, who qualifies under 
16the definitions of the National Labor Relations Board, and who 
17has 6 or more months of consecutive employment with the 
18employer at the end of the taxable year.
19    (b) If the taxpayer is a Subchapter S corporation, the 
20credit shall be allowed to shareholders in accordance with the 
21determination of income and distributive shares of income 
22under Subchapter S of Chapter 1 of the Internal Revenue Code.
23    (c) In no event shall a credit under this Section reduce 
24the taxpayer's liability to less than zero. If the amount of 
25the credit exceeds the tax liability for the year, the excess 
		SB3786	- 4 -	LRB104 19218 HLH 32663 b
1may be carried forward and applied to the tax liability of the 
25 taxable years following the excess credit year. The tax 
3credit shall be applied to the earliest year for which there is 
4a tax liability. If there are credits for more than one year 
5that are available to offset a liability, the earlier credit 
6shall be applied first.
7    (d) This Section is exempt from the provisions of Section 
8250.
9    Section 99. Effective date. This Act takes effect upon
10becoming law.