Ill. bill seeks R&D tax credit for ethanol, biodiesel

By Matt Soberg | October 25, 2011

As part of Illinois General Assembly Bill HB 3811 unveiled last week, lawmakers seek to re-enact the Illinois Research and Development tax credit and include ethanol and biodiesel as qualified R&D activities. The bill, a package intended to attract and maintain jobs, is cosponsored by State Reps. Dwight Kay (R-Edwardsville) and Paul Evans (R-O’Fallon).

With 13 ethanol plants in Illinois, according to Ethanol Producer Magazine, qualifying ethanol research and development for the credit would certainly be a benefit for the industry. After being extended from 2009, the credit, which provides a 6.5 percent credit of project costs, expired in Dec. 2010.

“The jobs package will help create a stable and reliable business environment so employers can maintain current jobs in our state and create new employment opportunities,” Kay said. Evans added, “the importance of the jobs package is it will help foster a climate so businesses can make a profit and reinvest in the economy by creating more jobs.” 

In addition to the tax credit measure, the bill proposes to reinstate a net operating loss deduction for tax purposes, extend the life of enterprise zones that provide business tax incentives, reduce administrative costs for businesses organizing as a limited liability corporation and increasing the estate tax exemption to $5 million.

Academic research and development in Illinois has experienced strong growth since 2004, according to the Battelle Memorial Institute, increasing by 27.5 percent. The state 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 nonprofit research institutions. 

Supported by the National Federation of Independent Business and the Illinois Chamber of Commerce, the R&D tax credit jobs bill will be taken up during an upcoming session.