SB0490 Summary: Small Business Asset Purchase Account

• Creates a new income tax deduction allowing taxpayers to exclude up to $50,000 per tax year contributed to a "small business asset purchase account" and all interest earned on such accounts, effective for tax years beginning January 1, 2022.

• Defines a "small business asset purchase account" as an account established by a taxpayer whose proceeds are used to purchase property used primarily in Illinois that qualifies for a federal income tax deduction under Section 179 of the Internal Revenue Code.

• Requires taxpayers to add back to income any amounts withdrawn from the account that are not used for qualifying Section 179 property purchases or used for property not primarily located in Illinois.

• Establishes a 10% penalty under the Uniform Penalty and Interest Act for improper use of withdrawn funds (i.e., amounts not used for qualifying Section 179 purchases or used for out-of-state property).

• Takes effect immediately upon becoming law.