SB0227 amends the Illinois Income Tax Act to expand the state’s data center construction employment tax credit. Under current law, a taxpayer awarded a credit by the Department of Commerce and Economic Opportunity for a qualifying Illinois data center in a qualified area can receive a credit tied to wages paid to construction workers. This bill adds a new incentive: if the taxpayer is awarded the underlying DCEO credit for a qualifying data center located in a qualified area, or for a data center developed by a minority-owned business, women-owned business, or business owned by a person with a disability, the taxpayer may claim an additional income tax credit equal to 5% of the investment in qualified tangible personal property used to construct or operate the data center.
The bill also specifies that, for taxable years beginning on or after January 1, 2026, this 5% additional credit applies to data centers in qualified areas or those developed by a qualified business enterprise, and it may be carried forward for up to five taxable years after the property is placed in service. The measure retains existing rules on transferability, pass-through treatment for partnerships and S corporations, revocation of certification, and the definition of qualified area and qualified business enterprise. It is effective immediately upon enactment.
Impact
SB0227 would broaden Illinois’ data center tax incentive structure by creating an additional income tax credit for investment in qualified tangible personal property used in eligible data center projects. It would affect Section 229 of the Illinois Income Tax Act and interact with the Department of Commerce and Economic Opportunity’s certification process under Section 605-1025 of the Civil Administrative Code. The bill would primarily benefit taxpayers investing in qualifying data centers, especially projects in economically distressed areas and projects led by minority-owned, women-owned, or disability-owned businesses.
Sentiment
Based on the bill text and the absence of recorded committee testimony or votes, the available record suggests a generally supportive policy approach toward economic development, targeted investment, and incentives for underserved communities. The bill’s structure indicates an effort to encourage data center construction and operation in designated areas while also promoting participation by diverse business owners. No formal opposition, amendments, or recorded vote history is provided in the materials.
Contention
The main policy questions raised by the bill are likely to concern the use of tax credits to subsidize data center development, the fiscal cost to the state, and whether the incentive is appropriately targeted. Potential points of contention include the expansion of benefits to projects tied to minority-owned, women-owned, and disability-owned businesses, as well as the broader question of whether data center incentives produce sufficient public return. Because no committee transcript or vote record is included, no specific legislator or stakeholder opposition is identifiable from the provided materials.