SB2390 amends the Illinois Income Tax Act to create a new Illinois Innovation Credit for tax years ending on or after December 31, 2025. The credit equals 1.3% of qualified research expenses made in Illinois and may be carried forward for up to five years if unused. The bill also states that a taxpayer does not need to have claimed or received a federal research and development credit to qualify for the Illinois credit.
The bill defines qualified research narrowly as activities intended to promote new computer modeling technology, new 3-D modeling or imaging technology, new public infrastructure materials, or new public infrastructure design. Qualified research expenses include wages for qualified services and amounts paid for supplies used in the research. The credit is nonrefundable and cannot reduce Illinois income tax liability below zero, and it is exempt from the Act’s general credit limitation provisions in Section 250.
Impact
SB2390 would add a new state income tax credit within Section 201 of the Illinois Income Tax Act, affecting individual and corporate income tax filers that incur qualifying research expenses in Illinois. It would create a targeted incentive for research and development activity tied to technology and public infrastructure, while also decoupling eligibility from the federal R&D credit rules. The bill would primarily affect taxpayers engaged in research, development, engineering, design, and related supply and wage expenditures in Illinois.
Sentiment
Based on the bill text and the absence of committee testimony or recorded votes, the available record suggests a generally pro-innovation, pro-business policy approach with no documented opposition in the provided materials. The measure appears intended to encourage in-state research activity by making the Illinois credit easier to claim than the federal counterpart. Because there are no transcripts or vote tallies, no broader legislative sentiment can be confirmed beyond the bill’s apparent supportive framing.
Contention
The main policy issue likely to draw scrutiny is the fiscal cost of the new credit, since it reduces income tax revenue and is not capped in the bill text. Another possible point of contention is the narrow definition of qualifying research, which limits the credit to specified technology and public infrastructure activities and may exclude other forms of R&D. The bill’s provision allowing the credit without a federal R&D credit requirement may be viewed as broadening access, while critics could see it as increasing complexity or creating a state incentive that is not tightly aligned with federal standards.