Two years after Ace Hardware received a 10-year tax incentive package to keep its headquarters in Oak Brook, the company is back asking for a special tax break.

The 4,700-store cooperative is seeking legal authority to collect the $12.7 million it was granted in the earlier incentive package but in the form of taxes its employees would pay the state. Ace said its structure as a cooperative doesn't allow it to take advantage of the earlier deal.

"We are hopeful that the state will allow us the same benefit that other companies have received," said Sasha Bigda, an Ace spokeswoman.

So far, nine companies were allowed to keep their employees' taxes, including Sears Holdings, Motorola Mobility and Chrysler Group. The practice stalled last year when the House adjourned before voting on a special incentive package for Archer Daniels Midland, which paid little or no state taxes but wanted a special break to move its headquarters to Chicago from Decatur. The company decided to move to Chicago despite not getting the break.

Bigda said Ace, which had considered relocating to the Indianapolis area, renewed its headquarters lease in Oak Brook in 2012, made a commitment to spend more than $28 million to renovate its facilities and pledged to retain 740 jobs.

In exchange, the state in 2012 offered $12.69 million in tax credits over 10 years, according to the Department of Commerce and Economic Opportunity, which negotiates such deals.

Special tax breaks like the one Ace is seeking require legislative approval and usually testimony from company executives on why they need it. Companies that have sought legal authority to keep taxes that employees would pay the state usually pay little or no corporate taxes to Illinois.

Ace's request was contained in a bill filed this week by Sen. Tom Cullerton, D-Villa Park. He did not return calls for comment.

Cullerton was the chief sponsor of a bill that last year would have granted a special incentive package to Office Depot valued at $53 million over 15 years. The bill was approved by the Senate but stalled when the House ended its session in November before a vote. The company, which had recently merged with OfficeMax opted to move its headquarters to Boca Raton, Fla.

Along with its subsidiaries, Ace operates 14 distribution centers in the U.S. In November, Ace said its net income in the nine months ended Sept. 28 increased by almost 37 percent to about $82 million on revenue of $3.1 billion.

Companies can continue to apply and receive corporate income tax incentives through the Department of Commerce. The Economic Development for a Growing Economy tax credit program allows a company to claim a credit against its corporate income tax if it creates and/or retains jobs and makes an investment in Illinois.

The timing of Ace's request comes when some legislators are questioning whether the state needs to tune up its tax incentive program.

Rep. Jack Franks, D-Marengo, said Wednesday that a de facto moratorium in the House on special tax incentives could stretch until May, when hearings on the state tax policy and business incentives are expected to end.

Rikeesha Phelon, a spokeswoman for Cullerton, said the Senate has not reviewed any requests for special breaks but doesn't have a moratorium in place like the House.

acancino@tribune.com

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