SPRINGFIELD, Ill. (IRN) — The Pritzker administration is proposing a massive tax incentive package related to the electric vehicle sector.
The incentives amount to around $300 million and would include EV makers that manufacture hovercrafts and microchips.
Illinois Manufacturers’ Association President Mark Denzler said if a company doesn’t meet their end of the bargain, they have to return the incentives.
“All of these agreements have claw back provisions, so they don’t just write a check up front. They have to meet certain capital goals, certain hiring goals, and if those are not met, companies are required to repay that money,” said Denzler during a House committee Tuseday.
The legislation in House Bill 817 also creates a five-year extension of the Research and Development Tax Credit.
“Research and development are central to the success of our state’s manufacturing sector, with manufacturers constantly creating new products and improving existing ones,” said Denzler.
The Department of Commerce and Economic Opportunity estimates the incentives could generate over $20 billion in new state revenue and create thousands of jobs over the next 30 years.
State Rep. C.D. Davidsmeyer, R-Jacksonville, said the governor is ignoring businesses that have already set up shop in Illinois.
“I don’t think we’re doing enough to foster the small businesses because the small businesses are the ones paying for this,” said Davidsmeyer. “Most of these have such a high threshold that the average person can’t have any access to the almost $300 million dollars in tax credits that we are seeing here,” said Davidsmeyer.
State Rep. Ryan Spain, R-Peoria, said he is all for economic growth, but the state shouldn’t be picking and choosing who gets tax breaks.
“If we are going to be raising taxes on businesses and then offering $300 million dollars of incentives to certain businesses, that is bad news,” said Spain. “That is a bad faith way to run our government in the state of Illinois.”
Pritzker’s budget proposal angered the business community with two proposals, including extending a cap on the deduction corporations can take for net operating losses and retooling a policy that lets retailers keep a portion of the sales tax they collect when shoppers buy items. It’s meant to serve as a reimbursement for retailers collecting the tax on the state’s behalf. Pritzker proposes limiting to $1,000 the amount of sales tax that retailers can keep.
The tax incentive measure passed out of the House Executive Committee and is headed to the House floor for a vote.
By KEVIN BESSLER for the Illinois Radio Network