New Law Extends Illinois Research and Development Tax Credit
CHICAGO – June 23, 2010. Governor Pat Quinn today signed Senate Bill 3655, which extends the Research and Development Tax Credit. The tax credit will help foster economic growth and innovation by providing Illinois companies with an incentive to increase their research activities in the state.
“Illinois’ continued economic recovery will depend largely on our ability to help businesses grow and create more jobs,” said Governor Quinn. “With this new law, we are encouraging more companies to invest in Illinois – and the Illinois worker – by creating an environment where innovation can grow and thrive.”
SB 3655 was sponsored by Sen. Dan Kotowski (D-Park Ridge) and Rep. Barbara Flynn Currie (D-Chicago). It extends the sunset of the Research and Development Tax Credit from December 31, 2009 to December 31, 2010. The Illinois R&D Credit provides a 6.5 percent credit on qualified research and development costs.
“Investments in the state’s research and development activities are critical to our ability to successfully meet the demands of a 21st century economy,” said Illinois Department of Commerce and Economic Opportunity Director Warren Ribley. “This tool will help ensure important, life-saving work is being continued by our life-sciences community and other critical industry segments, and will create much-needed jobs.”
Thirty-eight states, including Illinois, currently provide some type of state R&D tax credit. The U.S. Bureau of Labor Statistics estimates that every dollar of tax benefit has spurred an additional dollar in private research and development.
According to the Battelle Memorial Institute, academic R&D in Illinois has experienced strong growth since 2004, increasing by 27.5 percent, placing Illinois above the national growth rate. Illinois also has one of the highest concentrations of research institutions in the country, including more than 440 corporate R&D facilities and more than 200 academic, government, and not-for-profit research institutions.
“We certainly appreciate Governor Quinn's signature today on the extension of the Illinois' Research and Development credit,” said Tom Johnson, President of the Taxpayers' Federation of Illinois. “Many of Illinois' employers have made significant investments in R&D here in our state and it has created some of the state's highest paying jobs. We look forward to working with the governor in making the credit a permanent part of our state's tax structure.”
Earlier today, Governor Quinn signed legislation to create the Angel Investment Tax Credit. 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.
Illinois has created more jobs this year than any other state in the Midwe