101ST GENERAL ASSEMBLY
State of Illinois
2019 and 2020
HB0316

 

Introduced , by Rep. David McSweeney

 

SYNOPSIS AS INTRODUCED:
 
35 ILCS 5/201  from Ch. 120, par. 2-201
35 ILCS 5/901  from Ch. 120, par. 9-901

    Amends the Illinois Income Tax Act. For taxable years beginning on or after January 1, 2019, reduces the rate of tax to 3% for individuals, trusts, and estates and 4.8% for corporations. Makes corresponding changes concerning the distribution of tax proceeds. Effective immediately.


LRB101 04006 HLH 49014 b

FISCAL NOTE ACT MAY APPLY

 

 

A BILL FOR

 

HB0316LRB101 04006 HLH 49014 b

1    AN ACT concerning revenue.
 
2    Be it enacted by the People of the State of Illinois,
3represented in the General Assembly:
 
4    Section 5. The Illinois Income Tax Act is amended by
5changing Sections 201 and 901 as follows:
 
6    (35 ILCS 5/201)  (from Ch. 120, par. 2-201)
7    Sec. 201. Tax imposed.
8    (a) In general. A tax measured by net income is hereby
9imposed on every individual, corporation, trust and estate for
10each taxable year ending after July 31, 1969 on the privilege
11of earning or receiving income in or as a resident of this
12State. Such tax shall be in addition to all other occupation or
13privilege taxes imposed by this State or by any municipal
14corporation or political subdivision thereof.
15    (b) Rates. The tax imposed by subsection (a) of this
16Section shall be determined as follows, except as adjusted by
17subsection (d-1):
18        (1) In the case of an individual, trust or estate, for
19    taxable years ending prior to July 1, 1989, an amount equal
20    to 2 1/2% of the taxpayer's net income for the taxable
21    year.
22        (2) In the case of an individual, trust or estate, for
23    taxable years beginning prior to July 1, 1989 and ending

 

 

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1    after June 30, 1989, an amount equal to the sum of (i) 2
2    1/2% of the taxpayer's net income for the period prior to
3    July 1, 1989, as calculated under Section 202.3, and (ii)
4    3% of the taxpayer's net income for the period after June
5    30, 1989, as calculated under Section 202.3.
6        (3) In the case of an individual, trust or estate, for
7    taxable years beginning after June 30, 1989, and ending
8    prior to January 1, 2011, an amount equal to 3% of the
9    taxpayer's net income for the taxable year.
10        (4) In the case of an individual, trust, or estate, for
11    taxable years beginning prior to January 1, 2011, and
12    ending after December 31, 2010, an amount equal to the sum
13    of (i) 3% of the taxpayer's net income for the period prior
14    to January 1, 2011, as calculated under Section 202.5, and
15    (ii) 5% of the taxpayer's net income for the period after
16    December 31, 2010, as calculated under Section 202.5.
17        (5) In the case of an individual, trust, or estate, for
18    taxable years beginning on or after January 1, 2011, and
19    ending prior to January 1, 2015, an amount equal to 5% of
20    the taxpayer's net income for the taxable year.
21        (5.1) In the case of an individual, trust, or estate,
22    for taxable years beginning prior to January 1, 2015, and
23    ending after December 31, 2014, an amount equal to the sum
24    of (i) 5% of the taxpayer's net income for the period prior
25    to January 1, 2015, as calculated under Section 202.5, and
26    (ii) 3.75% of the taxpayer's net income for the period

 

 

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1    after December 31, 2014, as calculated under Section 202.5.
2        (5.2) In the case of an individual, trust, or estate,
3    for taxable years beginning on or after January 1, 2015,
4    and ending prior to July 1, 2017, an amount equal to 3.75%
5    of the taxpayer's net income for the taxable year.
6        (5.3) In the case of an individual, trust, or estate,
7    for taxable years beginning prior to July 1, 2017, and
8    ending after June 30, 2017, an amount equal to the sum of
9    (i) 3.75% of the taxpayer's net income for the period prior
10    to July 1, 2017, as calculated under Section 202.5, and
11    (ii) 4.95% of the taxpayer's net income for the period
12    after June 30, 2017, as calculated under Section 202.5.
13        (5.4) In the case of an individual, trust, or estate,
14    for taxable years beginning on or after July 1, 2017 and
15    ending prior to January 1, 2019, an amount equal to 4.95%
16    of the taxpayer's net income for the taxable year.
17        (5.5) In the case of an individual, trust, or estate,
18    for taxable years beginning prior to January 1, 2019 and
19    ending after December 31, 2018, an amount equal to the sum
20    of (i) 4.95% of the taxpayer's net income for the period
21    prior to January 1, 2019, as calculated under Section
22    202.5, and (ii) 3% of the taxpayer's net income for the
23    period after December 31, 2018, as calculated under Section
24    202.5.
25        (5.6) In the case of an individual, trust, or estate,
26    for taxable years beginning on or after January 1, 2019, an

 

 

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1    amount equal to 3% of the taxpayer's net income for the
2    taxable year.
3        (6) In the case of a corporation, for taxable years
4    ending prior to July 1, 1989, an amount equal to 4% of the
5    taxpayer's net income for the taxable year.
6        (7) In the case of a corporation, for taxable years
7    beginning prior to July 1, 1989 and ending after June 30,
8    1989, an amount equal to the sum of (i) 4% of the
9    taxpayer's net income for the period prior to July 1, 1989,
10    as calculated under Section 202.3, and (ii) 4.8% of the
11    taxpayer's net income for the period after June 30, 1989,
12    as calculated under Section 202.3.
13        (8) In the case of a corporation, for taxable years
14    beginning after June 30, 1989, and ending prior to January
15    1, 2011, an amount equal to 4.8% of the taxpayer's net
16    income for the taxable year.
17        (9) In the case of a corporation, for taxable years
18    beginning prior to January 1, 2011, and ending after
19    December 31, 2010, an amount equal to the sum of (i) 4.8%
20    of the taxpayer's net income for the period prior to
21    January 1, 2011, as calculated under Section 202.5, and
22    (ii) 7% of the taxpayer's net income for the period after
23    December 31, 2010, as calculated under Section 202.5.
24        (10) In the case of a corporation, for taxable years
25    beginning on or after January 1, 2011, and ending prior to
26    January 1, 2015, an amount equal to 7% of the taxpayer's

 

 

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1    net income for the taxable year.
2        (11) In the case of a corporation, for taxable years
3    beginning prior to January 1, 2015, and ending after
4    December 31, 2014, an amount equal to the sum of (i) 7% of
5    the taxpayer's net income for the period prior to January
6    1, 2015, as calculated under Section 202.5, and (ii) 5.25%
7    of the taxpayer's net income for the period after December
8    31, 2014, as calculated under Section 202.5.
9        (12) In the case of a corporation, for taxable years
10    beginning on or after January 1, 2015, and ending prior to
11    July 1, 2017, an amount equal to 5.25% of the taxpayer's
12    net income for the taxable year.
13        (13) In the case of a corporation, for taxable years
14    beginning prior to July 1, 2017, and ending after June 30,
15    2017, an amount equal to the sum of (i) 5.25% of the
16    taxpayer's net income for the period prior to July 1, 2017,
17    as calculated under Section 202.5, and (ii) 7% of the
18    taxpayer's net income for the period after June 30, 2017,
19    as calculated under Section 202.5.
20        (14) In the case of a corporation, for taxable years
21    beginning on or after July 1, 2017 and ending prior to
22    January 1, 2019, an amount equal to 7% of the taxpayer's
23    net income for the taxable year.
24        (15) In the case of a corporation, for taxable years
25    beginning prior to January 1, 2019 and ending after
26    December 31, 2018, an amount equal to the sum of (i) 7% of

 

 

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1    the taxpayer's net income for the period prior to January
2    1, 2019, as calculated under Section 202.5, and (ii) 4.8%
3    of the taxpayer's net income for the period after December
4    31, 2018, as calculated under Section 202.5.
5        (16) In the case of a corporation, for taxable years
6    beginning on or after January 1, 2019, an amount equal to
7    4.8% of the taxpayer's net income for the taxable year.
8    The rates under this subsection (b) are subject to the
9provisions of Section 201.5.
10    (c) Personal Property Tax Replacement Income Tax.
11Beginning on July 1, 1979 and thereafter, in addition to such
12income tax, there is also hereby imposed the Personal Property
13Tax Replacement Income Tax measured by net income on every
14corporation (including Subchapter S corporations), partnership
15and trust, for each taxable year ending after June 30, 1979.
16Such taxes are imposed on the privilege of earning or receiving
17income in or as a resident of this State. The Personal Property
18Tax Replacement Income Tax shall be in addition to the income
19tax imposed by subsections (a) and (b) of this Section and in
20addition to all other occupation or privilege taxes imposed by
21this State or by any municipal corporation or political
22subdivision thereof.
23    (d) Additional Personal Property Tax Replacement Income
24Tax Rates. The personal property tax replacement income tax
25imposed by this subsection and subsection (c) of this Section
26in the case of a corporation, other than a Subchapter S

 

 

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1corporation and except as adjusted by subsection (d-1), shall
2be an additional amount equal to 2.85% of such taxpayer's net
3income for the taxable year, except that beginning on January
41, 1981, and thereafter, the rate of 2.85% specified in this
5subsection shall be reduced to 2.5%, and in the case of a
6partnership, trust or a Subchapter S corporation shall be an
7additional amount equal to 1.5% of such taxpayer's net income
8for the taxable year.
9    (d-1) Rate reduction for certain foreign insurers. In the
10case of a foreign insurer, as defined by Section 35A-5 of the
11Illinois Insurance Code, whose state or country of domicile
12imposes on insurers domiciled in Illinois a retaliatory tax
13(excluding any insurer whose premiums from reinsurance assumed
14are 50% or more of its total insurance premiums as determined
15under paragraph (2) of subsection (b) of Section 304, except
16that for purposes of this determination premiums from
17reinsurance do not include premiums from inter-affiliate
18reinsurance arrangements), beginning with taxable years ending
19on or after December 31, 1999, the sum of the rates of tax
20imposed by subsections (b) and (d) shall be reduced (but not
21increased) to the rate at which the total amount of tax imposed
22under this Act, net of all credits allowed under this Act,
23shall equal (i) the total amount of tax that would be imposed
24on the foreign insurer's net income allocable to Illinois for
25the taxable year by such foreign insurer's state or country of
26domicile if that net income were subject to all income taxes

 

 

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1and taxes measured by net income imposed by such foreign
2insurer's state or country of domicile, net of all credits
3allowed or (ii) a rate of zero if no such tax is imposed on such
4income by the foreign insurer's state of domicile. For the
5purposes of this subsection (d-1), an inter-affiliate includes
6a mutual insurer under common management.
7        (1) For the purposes of subsection (d-1), in no event
8    shall the sum of the rates of tax imposed by subsections
9    (b) and (d) be reduced below the rate at which the sum of:
10            (A) the total amount of tax imposed on such foreign
11        insurer under this Act for a taxable year, net of all
12        credits allowed under this Act, plus
13            (B) the privilege tax imposed by Section 409 of the
14        Illinois Insurance Code, the fire insurance company
15        tax imposed by Section 12 of the Fire Investigation
16        Act, and the fire department taxes imposed under
17        Section 11-10-1 of the Illinois Municipal Code,
18    equals 1.25% for taxable years ending prior to December 31,
19    2003, or 1.75% for taxable years ending on or after
20    December 31, 2003, of the net taxable premiums written for
21    the taxable year, as described by subsection (1) of Section
22    409 of the Illinois Insurance Code. This paragraph will in
23    no event increase the rates imposed under subsections (b)
24    and (d).
25        (2) Any reduction in the rates of tax imposed by this
26    subsection shall be applied first against the rates imposed

 

 

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1    by subsection (b) and only after the tax imposed by
2    subsection (a) net of all credits allowed under this
3    Section other than the credit allowed under subsection (i)
4    has been reduced to zero, against the rates imposed by
5    subsection (d).
6    This subsection (d-1) is exempt from the provisions of
7Section 250.
8    (e) Investment credit. A taxpayer shall be allowed a credit
9against the Personal Property Tax Replacement Income Tax for
10investment in qualified property.
11        (1) A taxpayer shall be allowed a credit equal to .5%
12    of the basis of qualified property placed in service during
13    the taxable year, provided such property is placed in
14    service on or after July 1, 1984. There shall be allowed an
15    additional credit equal to .5% of the basis of qualified
16    property placed in service during the taxable year,
17    provided such property is placed in service on or after
18    July 1, 1986, and the taxpayer's base employment within
19    Illinois has increased by 1% or more over the preceding
20    year as determined by the taxpayer's employment records
21    filed with the Illinois Department of Employment Security.
22    Taxpayers who are new to Illinois shall be deemed to have
23    met the 1% growth in base employment for the first year in
24    which they file employment records with the Illinois
25    Department of Employment Security. The provisions added to
26    this Section by Public Act 85-1200 (and restored by Public

 

 

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1    Act 87-895) shall be construed as declaratory of existing
2    law and not as a new enactment. If, in any year, the
3    increase in base employment within Illinois over the
4    preceding year is less than 1%, the additional credit shall
5    be limited to that percentage times a fraction, the
6    numerator of which is .5% and the denominator of which is
7    1%, but shall not exceed .5%. The investment credit shall
8    not be allowed to the extent that it would reduce a
9    taxpayer's liability in any tax year below zero, nor may
10    any credit for qualified property be allowed for any year
11    other than the year in which the property was placed in
12    service in Illinois. For tax years ending on or after
13    December 31, 1987, and on or before December 31, 1988, the
14    credit shall be allowed for the tax year in which the
15    property is placed in service, or, if the amount of the
16    credit exceeds the tax liability for that year, whether it
17    exceeds the original liability or the liability as later
18    amended, such excess may be carried forward and applied to
19    the tax liability of the 5 taxable years following the
20    excess credit years if the taxpayer (i) makes investments
21    which cause the creation of a minimum of 2,000 full-time
22    equivalent jobs in Illinois, (ii) is located in an
23    enterprise zone established pursuant to the Illinois
24    Enterprise Zone Act and (iii) is certified by the
25    Department of Commerce and Community Affairs (now
26    Department of Commerce and Economic Opportunity) as

 

 

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1    complying with the requirements specified in clause (i) and
2    (ii) by July 1, 1986. The Department of Commerce and
3    Community Affairs (now Department of Commerce and Economic
4    Opportunity) shall notify the Department of Revenue of all
5    such certifications immediately. For tax years ending
6    after December 31, 1988, the credit shall be allowed for
7    the tax year in which the property is placed in service,
8    or, if the amount of the credit exceeds the tax liability
9    for that year, whether it exceeds the original liability or
10    the liability as later amended, such excess may be carried
11    forward and applied to the tax liability of the 5 taxable
12    years following the excess credit years. The credit shall
13    be applied to the earliest year for which there is a
14    liability. If there is credit from more than one tax year
15    that is available to offset a liability, earlier credit
16    shall be applied first.
17        (2) The term "qualified property" means property
18    which:
19            (A) is tangible, whether new or used, including
20        buildings and structural components of buildings and
21        signs that are real property, but not including land or
22        improvements to real property that are not a structural
23        component of a building such as landscaping, sewer
24        lines, local access roads, fencing, parking lots, and
25        other appurtenances;
26            (B) is depreciable pursuant to Section 167 of the

 

 

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1        Internal Revenue Code, except that "3-year property"
2        as defined in Section 168(c)(2)(A) of that Code is not
3        eligible for the credit provided by this subsection
4        (e);
5            (C) is acquired by purchase as defined in Section
6        179(d) of the Internal Revenue Code;
7            (D) is used in Illinois by a taxpayer who is
8        primarily engaged in manufacturing, or in mining coal
9        or fluorite, or in retailing, or was placed in service
10        on or after July 1, 2006 in a River Edge Redevelopment
11        Zone established pursuant to the River Edge
12        Redevelopment Zone Act; and
13            (E) has not previously been used in Illinois in
14        such a manner and by such a person as would qualify for
15        the credit provided by this subsection (e) or
16        subsection (f).
17        (3) For purposes of this subsection (e),
18    "manufacturing" means the material staging and production
19    of tangible personal property by procedures commonly
20    regarded as manufacturing, processing, fabrication, or
21    assembling which changes some existing material into new
22    shapes, new qualities, or new combinations. For purposes of
23    this subsection (e) the term "mining" shall have the same
24    meaning as the term "mining" in Section 613(c) of the
25    Internal Revenue Code. For purposes of this subsection (e),
26    the term "retailing" means the sale of tangible personal

 

 

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1    property for use or consumption and not for resale, or
2    services rendered in conjunction with the sale of tangible
3    personal property for use or consumption and not for
4    resale. For purposes of this subsection (e), "tangible
5    personal property" has the same meaning as when that term
6    is used in the Retailers' Occupation Tax Act, and, for
7    taxable years ending after December 31, 2008, does not
8    include the generation, transmission, or distribution of
9    electricity.
10        (4) The basis of qualified property shall be the basis
11    used to compute the depreciation deduction for federal
12    income tax purposes.
13        (5) If the basis of the property for federal income tax
14    depreciation purposes is increased after it has been placed
15    in service in Illinois by the taxpayer, the amount of such
16    increase shall be deemed property placed in service on the
17    date of such increase in basis.
18        (6) The term "placed in service" shall have the same
19    meaning as under Section 46 of the Internal Revenue Code.
20        (7) If during any taxable year, any property ceases to
21    be qualified property in the hands of the taxpayer within
22    48 months after being placed in service, or the situs of
23    any qualified property is moved outside Illinois within 48
24    months after being placed in service, the Personal Property
25    Tax Replacement Income Tax for such taxable year shall be
26    increased. Such increase shall be determined by (i)

 

 

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1    recomputing the investment credit which would have been
2    allowed for the year in which credit for such property was
3    originally allowed by eliminating such property from such
4    computation and, (ii) subtracting such recomputed credit
5    from the amount of credit previously allowed. For the
6    purposes of this paragraph (7), a reduction of the basis of
7    qualified property resulting from a redetermination of the
8    purchase price shall be deemed a disposition of qualified
9    property to the extent of such reduction.
10        (8) Unless the investment credit is extended by law,
11    the basis of qualified property shall not include costs
12    incurred after December 31, 2018, except for costs incurred
13    pursuant to a binding contract entered into on or before
14    December 31, 2018.
15        (9) Each taxable year ending before December 31, 2000,
16    a partnership may elect to pass through to its partners the
17    credits to which the partnership is entitled under this
18    subsection (e) for the taxable year. A partner may use the
19    credit allocated to him or her under this paragraph only
20    against the tax imposed in subsections (c) and (d) of this
21    Section. If the partnership makes that election, those
22    credits shall be allocated among the partners in the
23    partnership in accordance with the rules set forth in
24    Section 704(b) of the Internal Revenue Code, and the rules
25    promulgated under that Section, and the allocated amount of
26    the credits shall be allowed to the partners for that

 

 

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1    taxable year. The partnership shall make this election on
2    its Personal Property Tax Replacement Income Tax return for
3    that taxable year. The election to pass through the credits
4    shall be irrevocable.
5        For taxable years ending on or after December 31, 2000,
6    a partner that qualifies its partnership for a subtraction
7    under subparagraph (I) of paragraph (2) of subsection (d)
8    of Section 203 or a shareholder that qualifies a Subchapter
9    S corporation for a subtraction under subparagraph (S) of
10    paragraph (2) of subsection (b) of Section 203 shall be
11    allowed a credit under this subsection (e) equal to its
12    share of the credit earned under this subsection (e) during
13    the taxable year by the partnership or Subchapter S
14    corporation, determined in accordance with the
15    determination of income and distributive share of income
16    under Sections 702 and 704 and Subchapter S of the Internal
17    Revenue Code. This paragraph is exempt from the provisions
18    of Section 250.
19    (f) Investment credit; Enterprise Zone; River Edge
20Redevelopment Zone.
21        (1) A taxpayer shall be allowed a credit against the
22    tax imposed by subsections (a) and (b) of this Section for
23    investment in qualified property which is placed in service
24    in an Enterprise Zone created pursuant to the Illinois
25    Enterprise Zone Act or, for property placed in service on
26    or after July 1, 2006, a River Edge Redevelopment Zone

 

 

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1    established pursuant to the River Edge Redevelopment Zone
2    Act. For partners, shareholders of Subchapter S
3    corporations, and owners of limited liability companies,
4    if the liability company is treated as a partnership for
5    purposes of federal and State income taxation, there shall
6    be allowed a credit under this subsection (f) to be
7    determined in accordance with the determination of income
8    and distributive share of income under Sections 702 and 704
9    and Subchapter S of the Internal Revenue Code. The credit
10    shall be .5% of the basis for such property. The credit
11    shall be available only in the taxable year in which the
12    property is placed in service in the Enterprise Zone or
13    River Edge Redevelopment Zone and shall not be allowed to
14    the extent that it would reduce a taxpayer's liability for
15    the tax imposed by subsections (a) and (b) of this Section
16    to below zero. For tax years ending on or after December
17    31, 1985, the credit shall be allowed for the tax year in
18    which the property is placed in service, or, if the amount
19    of the credit exceeds the tax liability for that year,
20    whether it exceeds the original liability or the liability
21    as later amended, such excess may be carried forward and
22    applied to the tax liability of the 5 taxable years
23    following the excess credit year. The credit shall be
24    applied to the earliest year for which there is a
25    liability. If there is credit from more than one tax year
26    that is available to offset a liability, the credit

 

 

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1    accruing first in time shall be applied first.
2        (2) The term qualified property means property which:
3            (A) is tangible, whether new or used, including
4        buildings and structural components of buildings;
5            (B) is depreciable pursuant to Section 167 of the
6        Internal Revenue Code, except that "3-year property"
7        as defined in Section 168(c)(2)(A) of that Code is not
8        eligible for the credit provided by this subsection
9        (f);
10            (C) is acquired by purchase as defined in Section
11        179(d) of the Internal Revenue Code;
12            (D) is used in the Enterprise Zone or River Edge
13        Redevelopment Zone by the taxpayer; and
14            (E) has not been previously used in Illinois in
15        such a manner and by such a person as would qualify for
16        the credit provided by this subsection (f) or
17        subsection (e).
18        (3) The basis of qualified property shall be the basis
19    used to compute the depreciation deduction for federal
20    income tax purposes.
21        (4) If the basis of the property for federal income tax
22    depreciation purposes is increased after it has been placed
23    in service in the Enterprise Zone or River Edge
24    Redevelopment Zone by the taxpayer, the amount of such
25    increase shall be deemed property placed in service on the
26    date of such increase in basis.

 

 

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1        (5) The term "placed in service" shall have the same
2    meaning as under Section 46 of the Internal Revenue Code.
3        (6) If during any taxable year, any property ceases to
4    be qualified property in the hands of the taxpayer within
5    48 months after being placed in service, or the situs of
6    any qualified property is moved outside the Enterprise Zone
7    or River Edge Redevelopment Zone within 48 months after
8    being placed in service, the tax imposed under subsections
9    (a) and (b) of this Section for such taxable year shall be
10    increased. Such increase shall be determined by (i)
11    recomputing the investment credit which would have been
12    allowed for the year in which credit for such property was
13    originally allowed by eliminating such property from such
14    computation, and (ii) subtracting such recomputed credit
15    from the amount of credit previously allowed. For the
16    purposes of this paragraph (6), a reduction of the basis of
17    qualified property resulting from a redetermination of the
18    purchase price shall be deemed a disposition of qualified
19    property to the extent of such reduction.
20        (7) There shall be allowed an additional credit equal
21    to 0.5% of the basis of qualified property placed in
22    service during the taxable year in a River Edge
23    Redevelopment Zone, provided such property is placed in
24    service on or after July 1, 2006, and the taxpayer's base
25    employment within Illinois has increased by 1% or more over
26    the preceding year as determined by the taxpayer's

 

 

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1    employment records filed with the Illinois Department of
2    Employment Security. Taxpayers who are new to Illinois
3    shall be deemed to have met the 1% growth in base
4    employment for the first year in which they file employment
5    records with the Illinois Department of Employment
6    Security. If, in any year, the increase in base employment
7    within Illinois over the preceding year is less than 1%,
8    the additional credit shall be limited to that percentage
9    times a fraction, the numerator of which is 0.5% and the
10    denominator of which is 1%, but shall not exceed 0.5%.
11    (g) (Blank).
12    (h) Investment credit; High Impact Business.
13        (1) Subject to subsections (b) and (b-5) of Section 5.5
14    of the Illinois Enterprise Zone Act, a taxpayer shall be
15    allowed a credit against the tax imposed by subsections (a)
16    and (b) of this Section for investment in qualified
17    property which is placed in service by a Department of
18    Commerce and Economic Opportunity designated High Impact
19    Business. The credit shall be .5% of the basis for such
20    property. The credit shall not be available (i) until the
21    minimum investments in qualified property set forth in
22    subdivision (a)(3)(A) of Section 5.5 of the Illinois
23    Enterprise Zone Act have been satisfied or (ii) until the
24    time authorized in subsection (b-5) of the Illinois
25    Enterprise Zone Act for entities designated as High Impact
26    Businesses under subdivisions (a)(3)(B), (a)(3)(C), and

 

 

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1    (a)(3)(D) of Section 5.5 of the Illinois Enterprise Zone
2    Act, and shall not be allowed to the extent that it would
3    reduce a taxpayer's liability for the tax imposed by
4    subsections (a) and (b) of this Section to below zero. The
5    credit applicable to such investments shall be taken in the
6    taxable year in which such investments have been completed.
7    The credit for additional investments beyond the minimum
8    investment by a designated high impact business authorized
9    under subdivision (a)(3)(A) of Section 5.5 of the Illinois
10    Enterprise Zone Act shall be available only in the taxable
11    year in which the property is placed in service and shall
12    not be allowed to the extent that it would reduce a
13    taxpayer's liability for the tax imposed by subsections (a)
14    and (b) of this Section to below zero. For tax years ending
15    on or after December 31, 1987, the credit shall be allowed
16    for the tax year in which the property is placed in
17    service, or, if the amount of the credit exceeds the tax
18    liability for that year, whether it exceeds the original
19    liability or the liability as later amended, such excess
20    may be carried forward and applied to the tax liability of
21    the 5 taxable years following the excess credit year. The
22    credit shall be applied to the earliest year for which
23    there is a liability. If there is credit from more than one
24    tax year that is available to offset a liability, the
25    credit accruing first in time shall be applied first.
26        Changes made in this subdivision (h)(1) by Public Act

 

 

HB0316- 21 -LRB101 04006 HLH 49014 b

1    88-670 restore changes made by Public Act 85-1182 and
2    reflect existing law.
3        (2) The term qualified property means property which:
4            (A) is tangible, whether new or used, including
5        buildings and structural components of buildings;
6            (B) is depreciable pursuant to Section 167 of the
7        Internal Revenue Code, except that "3-year property"
8        as defined in Section 168(c)(2)(A) of that Code is not
9        eligible for the credit provided by this subsection
10        (h);
11            (C) is acquired by purchase as defined in Section
12        179(d) of the Internal Revenue Code; and
13            (D) is not eligible for the Enterprise Zone
14        Investment Credit provided by subsection (f) of this
15        Section.
16        (3) The basis of qualified property shall be the basis
17    used to compute the depreciation deduction for federal
18    income tax purposes.
19        (4) If the basis of the property for federal income tax
20    depreciation purposes is increased after it has been placed
21    in service in a federally designated Foreign Trade Zone or
22    Sub-Zone located in Illinois by the taxpayer, the amount of
23    such increase shall be deemed property placed in service on
24    the date of such increase in basis.
25        (5) The term "placed in service" shall have the same
26    meaning as under Section 46 of the Internal Revenue Code.

 

 

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1        (6) If during any taxable year ending on or before
2    December 31, 1996, any property ceases to be qualified
3    property in the hands of the taxpayer within 48 months
4    after being placed in service, or the situs of any
5    qualified property is moved outside Illinois within 48
6    months after being placed in service, the tax imposed under
7    subsections (a) and (b) of this Section for such taxable
8    year shall be increased. Such increase shall be determined
9    by (i) recomputing the investment credit which would have
10    been allowed for the year in which credit for such property
11    was originally allowed by eliminating such property from
12    such computation, and (ii) subtracting such recomputed
13    credit from the amount of credit previously allowed. For
14    the purposes of this paragraph (6), a reduction of the
15    basis of qualified property resulting from a
16    redetermination of the purchase price shall be deemed a
17    disposition of qualified property to the extent of such
18    reduction.
19        (7) Beginning with tax years ending after December 31,
20    1996, if a taxpayer qualifies for the credit under this
21    subsection (h) and thereby is granted a tax abatement and
22    the taxpayer relocates its entire facility in violation of
23    the explicit terms and length of the contract under Section
24    18-183 of the Property Tax Code, the tax imposed under
25    subsections (a) and (b) of this Section shall be increased
26    for the taxable year in which the taxpayer relocated its

 

 

HB0316- 23 -LRB101 04006 HLH 49014 b

1    facility by an amount equal to the amount of credit
2    received by the taxpayer under this subsection (h).
3    (i) Credit for Personal Property Tax Replacement Income
4Tax. For tax years ending prior to December 31, 2003, a credit
5shall be allowed against the tax imposed by subsections (a) and
6(b) of this Section for the tax imposed by subsections (c) and
7(d) of this Section. This credit shall be computed by
8multiplying the tax imposed by subsections (c) and (d) of this
9Section by a fraction, the numerator of which is base income
10allocable to Illinois and the denominator of which is Illinois
11base income, and further multiplying the product by the tax
12rate imposed by subsections (a) and (b) of this Section.
13    Any credit earned on or after December 31, 1986 under this
14subsection which is unused in the year the credit is computed
15because it exceeds the tax liability imposed by subsections (a)
16and (b) for that year (whether it exceeds the original
17liability or the liability as later amended) may be carried
18forward and applied to the tax liability imposed by subsections
19(a) and (b) of the 5 taxable years following the excess credit
20year, provided that no credit may be carried forward to any
21year ending on or after December 31, 2003. This credit shall be
22applied first to the earliest year for which there is a
23liability. If there is a credit under this subsection from more
24than one tax year that is available to offset a liability the
25earliest credit arising under this subsection shall be applied
26first.

 

 

HB0316- 24 -LRB101 04006 HLH 49014 b

1    If, during any taxable year ending on or after December 31,
21986, the tax imposed by subsections (c) and (d) of this
3Section for which a taxpayer has claimed a credit under this
4subsection (i) is reduced, the amount of credit for such tax
5shall also be reduced. Such reduction shall be determined by
6recomputing the credit to take into account the reduced tax
7imposed by subsections (c) and (d). If any portion of the
8reduced amount of credit has been carried to a different
9taxable year, an amended return shall be filed for such taxable
10year to reduce the amount of credit claimed.
11    (j) Training expense credit. Beginning with tax years
12ending on or after December 31, 1986 and prior to December 31,
132003, a taxpayer shall be allowed a credit against the tax
14imposed by subsections (a) and (b) under this Section for all
15amounts paid or accrued, on behalf of all persons employed by
16the taxpayer in Illinois or Illinois residents employed outside
17of Illinois by a taxpayer, for educational or vocational
18training in semi-technical or technical fields or semi-skilled
19or skilled fields, which were deducted from gross income in the
20computation of taxable income. The credit against the tax
21imposed by subsections (a) and (b) shall be 1.6% of such
22training expenses. For partners, shareholders of subchapter S
23corporations, and owners of limited liability companies, if the
24liability company is treated as a partnership for purposes of
25federal and State income taxation, there shall be allowed a
26credit under this subsection (j) to be determined in accordance

 

 

HB0316- 25 -LRB101 04006 HLH 49014 b

1with the determination of income and distributive share of
2income under Sections 702 and 704 and subchapter S of the
3Internal Revenue Code.
4    Any credit allowed under this subsection which is unused in
5the year the credit is earned may be carried forward to each of
6the 5 taxable years following the year for which the credit is
7first computed until it is used. This credit shall be applied
8first to the earliest year for which there is a liability. If
9there is a credit under this subsection from more than one tax
10year that is available to offset a liability the earliest
11credit arising under this subsection shall be applied first. No
12carryforward credit may be claimed in any tax year ending on or
13after December 31, 2003.
14    (k) Research and development credit. For tax years ending
15after July 1, 1990 and prior to December 31, 2003, and
16beginning again for tax years ending on or after December 31,
172004, and ending prior to January 1, 2022, a taxpayer shall be
18allowed a credit against the tax imposed by subsections (a) and
19(b) of this Section for increasing research activities in this
20State. The credit allowed against the tax imposed by
21subsections (a) and (b) shall be equal to 6 1/2% of the
22qualifying expenditures for increasing research activities in
23this State. For partners, shareholders of subchapter S
24corporations, and owners of limited liability companies, if the
25liability company is treated as a partnership for purposes of
26federal and State income taxation, there shall be allowed a

 

 

HB0316- 26 -LRB101 04006 HLH 49014 b

1credit under this subsection to be determined in accordance
2with the determination of income and distributive share of
3income under Sections 702 and 704 and subchapter S of the
4Internal Revenue Code.
5    For purposes of this subsection, "qualifying expenditures"
6means the qualifying expenditures as defined for the federal
7credit for increasing research activities which would be
8allowable under Section 41 of the Internal Revenue Code and
9which are conducted in this State, "qualifying expenditures for
10increasing research activities in this State" means the excess
11of qualifying expenditures for the taxable year in which
12incurred over qualifying expenditures for the base period,
13"qualifying expenditures for the base period" means the average
14of the qualifying expenditures for each year in the base
15period, and "base period" means the 3 taxable years immediately
16preceding the taxable year for which the determination is being
17made.
18    Any credit in excess of the tax liability for the taxable
19year may be carried forward. A taxpayer may elect to have the
20unused credit shown on its final completed return carried over
21as a credit against the tax liability for the following 5
22taxable years or until it has been fully used, whichever occurs
23first; provided that no credit earned in a tax year ending
24prior to December 31, 2003 may be carried forward to any year
25ending on or after December 31, 2003.
26    If an unused credit is carried forward to a given year from

 

 

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12 or more earlier years, that credit arising in the earliest
2year will be applied first against the tax liability for the
3given year. If a tax liability for the given year still
4remains, the credit from the next earliest year will then be
5applied, and so on, until all credits have been used or no tax
6liability for the given year remains. Any remaining unused
7credit or credits then will be carried forward to the next
8following year in which a tax liability is incurred, except
9that no credit can be carried forward to a year which is more
10than 5 years after the year in which the expense for which the
11credit is given was incurred.
12    No inference shall be drawn from this amendatory Act of the
1391st General Assembly in construing this Section for taxable
14years beginning before January 1, 1999.
15    It is the intent of the General Assembly that the research
16and development credit under this subsection (k) shall apply
17continuously for all tax years ending on or after December 31,
182004 and ending prior to January 1, 2022, including, but not
19limited to, the period beginning on January 1, 2016 and ending
20on the effective date of this amendatory Act of the 100th
21General Assembly. All actions taken in reliance on the
22continuation of the credit under this subsection (k) by any
23taxpayer are hereby validated.
24    (l) Environmental Remediation Tax Credit.
25        (i) For tax years ending after December 31, 1997 and on
26    or before December 31, 2001, a taxpayer shall be allowed a

 

 

HB0316- 28 -LRB101 04006 HLH 49014 b

1    credit against the tax imposed by subsections (a) and (b)
2    of this Section for certain amounts paid for unreimbursed
3    eligible remediation costs, as specified in this
4    subsection. For purposes of this Section, "unreimbursed
5    eligible remediation costs" means costs approved by the
6    Illinois Environmental Protection Agency ("Agency") under
7    Section 58.14 of the Environmental Protection Act that were
8    paid in performing environmental remediation at a site for
9    which a No Further Remediation Letter was issued by the
10    Agency and recorded under Section 58.10 of the
11    Environmental Protection Act. The credit must be claimed
12    for the taxable year in which Agency approval of the
13    eligible remediation costs is granted. The credit is not
14    available to any taxpayer if the taxpayer or any related
15    party caused or contributed to, in any material respect, a
16    release of regulated substances on, in, or under the site
17    that was identified and addressed by the remedial action
18    pursuant to the Site Remediation Program of the
19    Environmental Protection Act. After the Pollution Control
20    Board rules are adopted pursuant to the Illinois
21    Administrative Procedure Act for the administration and
22    enforcement of Section 58.9 of the Environmental
23    Protection Act, determinations as to credit availability
24    for purposes of this Section shall be made consistent with
25    those rules. For purposes of this Section, "taxpayer"
26    includes a person whose tax attributes the taxpayer has

 

 

HB0316- 29 -LRB101 04006 HLH 49014 b

1    succeeded to under Section 381 of the Internal Revenue Code
2    and "related party" includes the persons disallowed a
3    deduction for losses by paragraphs (b), (c), and (f)(1) of
4    Section 267 of the Internal Revenue Code by virtue of being
5    a related taxpayer, as well as any of its partners. The
6    credit allowed against the tax imposed by subsections (a)
7    and (b) shall be equal to 25% of the unreimbursed eligible
8    remediation costs in excess of $100,000 per site, except
9    that the $100,000 threshold shall not apply to any site
10    contained in an enterprise zone as determined by the
11    Department of Commerce and Community Affairs (now
12    Department of Commerce and Economic Opportunity). The
13    total credit allowed shall not exceed $40,000 per year with
14    a maximum total of $150,000 per site. For partners and
15    shareholders of subchapter S corporations, there shall be
16    allowed a credit under this subsection to be determined in
17    accordance with the determination of income and
18    distributive share of income under Sections 702 and 704 and
19    subchapter S of the Internal Revenue Code.
20        (ii) A credit allowed under this subsection that is
21    unused in the year the credit is earned may be carried
22    forward to each of the 5 taxable years following the year
23    for which the credit is first earned until it is used. The
24    term "unused credit" does not include any amounts of
25    unreimbursed eligible remediation costs in excess of the
26    maximum credit per site authorized under paragraph (i).

 

 

HB0316- 30 -LRB101 04006 HLH 49014 b

1    This credit shall be applied first to the earliest year for
2    which there is a liability. If there is a credit under this
3    subsection from more than one tax year that is available to
4    offset a liability, the earliest credit arising under this
5    subsection shall be applied first. A credit allowed under
6    this subsection may be sold to a buyer as part of a sale of
7    all or part of the remediation site for which the credit
8    was granted. The purchaser of a remediation site and the
9    tax credit shall succeed to the unused credit and remaining
10    carry-forward period of the seller. To perfect the
11    transfer, the assignor shall record the transfer in the
12    chain of title for the site and provide written notice to
13    the Director of the Illinois Department of Revenue of the
14    assignor's intent to sell the remediation site and the
15    amount of the tax credit to be transferred as a portion of
16    the sale. In no event may a credit be transferred to any
17    taxpayer if the taxpayer or a related party would not be
18    eligible under the provisions of subsection (i).
19        (iii) For purposes of this Section, the term "site"
20    shall have the same meaning as under Section 58.2 of the
21    Environmental Protection Act.
22    (m) Education expense credit. Beginning with tax years
23ending after December 31, 1999, a taxpayer who is the custodian
24of one or more qualifying pupils shall be allowed a credit
25against the tax imposed by subsections (a) and (b) of this
26Section for qualified education expenses incurred on behalf of

 

 

HB0316- 31 -LRB101 04006 HLH 49014 b

1the qualifying pupils. The credit shall be equal to 25% of
2qualified education expenses, but in no event may the total
3credit under this subsection claimed by a family that is the
4custodian of qualifying pupils exceed (i) $500 for tax years
5ending prior to December 31, 2017, and (ii) $750 for tax years
6ending on or after December 31, 2017. In no event shall a
7credit under this subsection reduce the taxpayer's liability
8under this Act to less than zero. Notwithstanding any other
9provision of law, for taxable years beginning on or after
10January 1, 2017, no taxpayer may claim a credit under this
11subsection (m) if the taxpayer's adjusted gross income for the
12taxable year exceeds (i) $500,000, in the case of spouses
13filing a joint federal tax return or (ii) $250,000, in the case
14of all other taxpayers. This subsection is exempt from the
15provisions of Section 250 of this Act.
16    For purposes of this subsection:
17    "Qualifying pupils" means individuals who (i) are
18residents of the State of Illinois, (ii) are under the age of
1921 at the close of the school year for which a credit is
20sought, and (iii) during the school year for which a credit is
21sought were full-time pupils enrolled in a kindergarten through
22twelfth grade education program at any school, as defined in
23this subsection.
24    "Qualified education expense" means the amount incurred on
25behalf of a qualifying pupil in excess of $250 for tuition,
26book fees, and lab fees at the school in which the pupil is

 

 

HB0316- 32 -LRB101 04006 HLH 49014 b

1enrolled during the regular school year.
2    "School" means any public or nonpublic elementary or
3secondary school in Illinois that is in compliance with Title
4VI of the Civil Rights Act of 1964 and attendance at which
5satisfies the requirements of Section 26-1 of the School Code,
6except that nothing shall be construed to require a child to
7attend any particular public or nonpublic school to qualify for
8the credit under this Section.
9    "Custodian" means, with respect to qualifying pupils, an
10Illinois resident who is a parent, the parents, a legal
11guardian, or the legal guardians of the qualifying pupils.
12    (n) River Edge Redevelopment Zone site remediation tax
13credit.
14        (i) For tax years ending on or after December 31, 2006,
15    a taxpayer shall be allowed a credit against the tax
16    imposed by subsections (a) and (b) of this Section for
17    certain amounts paid for unreimbursed eligible remediation
18    costs, as specified in this subsection. For purposes of
19    this Section, "unreimbursed eligible remediation costs"
20    means costs approved by the Illinois Environmental
21    Protection Agency ("Agency") under Section 58.14a of the
22    Environmental Protection Act that were paid in performing
23    environmental remediation at a site within a River Edge
24    Redevelopment Zone for which a No Further Remediation
25    Letter was issued by the Agency and recorded under Section
26    58.10 of the Environmental Protection Act. The credit must

 

 

HB0316- 33 -LRB101 04006 HLH 49014 b

1    be claimed for the taxable year in which Agency approval of
2    the eligible remediation costs is granted. The credit is
3    not available to any taxpayer if the taxpayer or any
4    related party caused or contributed to, in any material
5    respect, a release of regulated substances on, in, or under
6    the site that was identified and addressed by the remedial
7    action pursuant to the Site Remediation Program of the
8    Environmental Protection Act. Determinations as to credit
9    availability for purposes of this Section shall be made
10    consistent with rules adopted by the Pollution Control
11    Board pursuant to the Illinois Administrative Procedure
12    Act for the administration and enforcement of Section 58.9
13    of the Environmental Protection Act. For purposes of this
14    Section, "taxpayer" includes a person whose tax attributes
15    the taxpayer has succeeded to under Section 381 of the
16    Internal Revenue Code and "related party" includes the
17    persons disallowed a deduction for losses by paragraphs
18    (b), (c), and (f)(1) of Section 267 of the Internal Revenue
19    Code by virtue of being a related taxpayer, as well as any
20    of its partners. The credit allowed against the tax imposed
21    by subsections (a) and (b) shall be equal to 25% of the
22    unreimbursed eligible remediation costs in excess of
23    $100,000 per site.
24        (ii) A credit allowed under this subsection that is
25    unused in the year the credit is earned may be carried
26    forward to each of the 5 taxable years following the year

 

 

HB0316- 34 -LRB101 04006 HLH 49014 b

1    for which the credit is first earned until it is used. This
2    credit shall be applied first to the earliest year for
3    which there is a liability. If there is a credit under this
4    subsection from more than one tax year that is available to
5    offset a liability, the earliest credit arising under this
6    subsection shall be applied first. A credit allowed under
7    this subsection may be sold to a buyer as part of a sale of
8    all or part of the remediation site for which the credit
9    was granted. The purchaser of a remediation site and the
10    tax credit shall succeed to the unused credit and remaining
11    carry-forward period of the seller. To perfect the
12    transfer, the assignor shall record the transfer in the
13    chain of title for the site and provide written notice to
14    the Director of the Illinois Department of Revenue of the
15    assignor's intent to sell the remediation site and the
16    amount of the tax credit to be transferred as a portion of
17    the sale. In no event may a credit be transferred to any
18    taxpayer if the taxpayer or a related party would not be
19    eligible under the provisions of subsection (i).
20        (iii) For purposes of this Section, the term "site"
21    shall have the same meaning as under Section 58.2 of the
22    Environmental Protection Act.
23    (o) For each of taxable years during the Compassionate Use
24of Medical Cannabis Pilot Program, a surcharge is imposed on
25all taxpayers on income arising from the sale or exchange of
26capital assets, depreciable business property, real property

 

 

HB0316- 35 -LRB101 04006 HLH 49014 b

1used in the trade or business, and Section 197 intangibles of
2an organization registrant under the Compassionate Use of
3Medical Cannabis Pilot Program Act. The amount of the surcharge
4is equal to the amount of federal income tax liability for the
5taxable year attributable to those sales and exchanges. The
6surcharge imposed does not apply if:
7        (1) the medical cannabis cultivation center
8    registration, medical cannabis dispensary registration, or
9    the property of a registration is transferred as a result
10    of any of the following:
11            (A) bankruptcy, a receivership, or a debt
12        adjustment initiated by or against the initial
13        registration or the substantial owners of the initial
14        registration;
15            (B) cancellation, revocation, or termination of
16        any registration by the Illinois Department of Public
17        Health;
18            (C) a determination by the Illinois Department of
19        Public Health that transfer of the registration is in
20        the best interests of Illinois qualifying patients as
21        defined by the Compassionate Use of Medical Cannabis
22        Pilot Program Act;
23            (D) the death of an owner of the equity interest in
24        a registrant;
25            (E) the acquisition of a controlling interest in
26        the stock or substantially all of the assets of a

 

 

HB0316- 36 -LRB101 04006 HLH 49014 b

1        publicly traded company;
2            (F) a transfer by a parent company to a wholly
3        owned subsidiary; or
4            (G) the transfer or sale to or by one person to
5        another person where both persons were initial owners
6        of the registration when the registration was issued;
7        or
8        (2) the cannabis cultivation center registration,
9    medical cannabis dispensary registration, or the
10    controlling interest in a registrant's property is
11    transferred in a transaction to lineal descendants in which
12    no gain or loss is recognized or as a result of a
13    transaction in accordance with Section 351 of the Internal
14    Revenue Code in which no gain or loss is recognized.
15(Source: P.A. 100-22, eff. 7-6-17.)
 
16    (35 ILCS 5/901)  (from Ch. 120, par. 9-901)
17    Sec. 901. Collection authority.
18    (a) In general. The Department shall collect the taxes
19imposed by this Act. The Department shall collect certified
20past due child support amounts under Section 2505-650 of the
21Department of Revenue Law of the Civil Administrative Code of
22Illinois. Except as provided in subsections (b), (c), (e), (f),
23(g), and (h) of this Section, money collected pursuant to
24subsections (a) and (b) of Section 201 of this Act shall be
25paid into the General Revenue Fund in the State treasury; money

 

 

HB0316- 37 -LRB101 04006 HLH 49014 b

1collected pursuant to subsections (c) and (d) of Section 201 of
2this Act shall be paid into the Personal Property Tax
3Replacement Fund, a special fund in the State Treasury; and
4money collected under Section 2505-650 of the Department of
5Revenue Law of the Civil Administrative Code of Illinois shall
6be paid into the Child Support Enforcement Trust Fund, a
7special fund outside the State Treasury, or to the State
8Disbursement Unit established under Section 10-26 of the
9Illinois Public Aid Code, as directed by the Department of
10Healthcare and Family Services.
11    (b) Local Government Distributive Fund. Beginning August
121, 1969, and continuing through June 30, 1994, the Treasurer
13shall transfer each month from the General Revenue Fund to a
14special fund in the State treasury, to be known as the "Local
15Government Distributive Fund", an amount equal to 1/12 of the
16net revenue realized from the tax imposed by subsections (a)
17and (b) of Section 201 of this Act during the preceding month.
18Beginning July 1, 1994, and continuing through June 30, 1995,
19the Treasurer shall transfer each month from the General
20Revenue Fund to the Local Government Distributive Fund an
21amount equal to 1/11 of the net revenue realized from the tax
22imposed by subsections (a) and (b) of Section 201 of this Act
23during the preceding month. Beginning July 1, 1995 and
24continuing through January 31, 2011, and beginning again on
25February 1, 2019, the Treasurer shall transfer each month from
26the General Revenue Fund to the Local Government Distributive

 

 

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1Fund an amount equal to the net of (i) 1/10 of the net revenue
2realized from the tax imposed by subsections (a) and (b) of
3Section 201 of the Illinois Income Tax Act during the preceding
4month (ii) minus, beginning July 1, 2003 and ending June 30,
52004, $6,666,666, and beginning July 1, 2004, zero. Beginning
6February 1, 2011, and continuing through January 31, 2015, the
7Treasurer shall transfer each month from the General Revenue
8Fund to the Local Government Distributive Fund an amount equal
9to the sum of (i) 6% (10% of the ratio of the 3% individual
10income tax rate prior to 2011 to the 5% individual income tax
11rate after 2010) of the net revenue realized from the tax
12imposed by subsections (a) and (b) of Section 201 of this Act
13upon individuals, trusts, and estates during the preceding
14month and (ii) 6.86% (10% of the ratio of the 4.8% corporate
15income tax rate prior to 2011 to the 7% corporate income tax
16rate after 2010) of the net revenue realized from the tax
17imposed by subsections (a) and (b) of Section 201 of this Act
18upon corporations during the preceding month. Beginning
19February 1, 2015 and continuing through July 31, 2017, the
20Treasurer shall transfer each month from the General Revenue
21Fund to the Local Government Distributive Fund an amount equal
22to the sum of (i) 8% (10% of the ratio of the 3% individual
23income tax rate prior to 2011 to the 3.75% individual income
24tax rate after 2014) of the net revenue realized from the tax
25imposed by subsections (a) and (b) of Section 201 of this Act
26upon individuals, trusts, and estates during the preceding

 

 

HB0316- 39 -LRB101 04006 HLH 49014 b

1month and (ii) 9.14% (10% of the ratio of the 4.8% corporate
2income tax rate prior to 2011 to the 5.25% corporate income tax
3rate after 2014) of the net revenue realized from the tax
4imposed by subsections (a) and (b) of Section 201 of this Act
5upon corporations during the preceding month. Beginning August
61, 2017 and continuing through January 31, 2019, the Treasurer
7shall transfer each month from the General Revenue Fund to the
8Local Government Distributive Fund an amount equal to the sum
9of (i) 6.06% (10% of the ratio of the 3% individual income tax
10rate prior to 2011 to the 4.95% individual income tax rate
11after July 1, 2017) of the net revenue realized from the tax
12imposed by subsections (a) and (b) of Section 201 of this Act
13upon individuals, trusts, and estates during the preceding
14month and (ii) 6.85% (10% of the ratio of the 4.8% corporate
15income tax rate prior to 2011 to the 7% corporate income tax
16rate after July 1, 2017) of the net revenue realized from the
17tax imposed by subsections (a) and (b) of Section 201 of this
18Act upon corporations during the preceding month. Net revenue
19realized for a month shall be defined as the revenue from the
20tax imposed by subsections (a) and (b) of Section 201 of this
21Act which is deposited in the General Revenue Fund, the
22Education Assistance Fund, the Income Tax Surcharge Local
23Government Distributive Fund, the Fund for the Advancement of
24Education, and the Commitment to Human Services Fund during the
25month minus the amount paid out of the General Revenue Fund in
26State warrants during that same month as refunds to taxpayers

 

 

HB0316- 40 -LRB101 04006 HLH 49014 b

1for overpayment of liability under the tax imposed by
2subsections (a) and (b) of Section 201 of this Act.
3    Notwithstanding any provision of law to the contrary,
4beginning on July 6, 2017 (the effective date of Public Act
5100-23), those amounts required under this subsection (b) to be
6transferred by the Treasurer into the Local Government
7Distributive Fund from the General Revenue Fund shall be
8directly deposited into the Local Government Distributive Fund
9as the revenue is realized from the tax imposed by subsections
10(a) and (b) of Section 201 of this Act.
11    For State fiscal year 2018 only, notwithstanding any
12provision of law to the contrary, the total amount of revenue
13and deposits under this Section attributable to revenues
14realized during State fiscal year 2018 shall be reduced by 10%.
15    For State fiscal year 2019 only, notwithstanding any
16provision of law to the contrary, the total amount of revenue
17and deposits under this Section attributable to revenues
18realized during State fiscal year 2019 shall be reduced by 5%.
19    (c) Deposits Into Income Tax Refund Fund.
20        (1) Beginning on January 1, 1989 and thereafter, the
21    Department shall deposit a percentage of the amounts
22    collected pursuant to subsections (a) and (b)(1), (2), and
23    (3) of Section 201 of this Act into a fund in the State
24    treasury known as the Income Tax Refund Fund. The
25    Department shall deposit 6% of such amounts during the
26    period beginning January 1, 1989 and ending on June 30,

 

 

HB0316- 41 -LRB101 04006 HLH 49014 b

1    1989. Beginning with State fiscal year 1990 and for each
2    fiscal year thereafter, the percentage deposited into the
3    Income Tax Refund Fund during a fiscal year shall be the
4    Annual Percentage. For fiscal years 1999 through 2001, the
5    Annual Percentage shall be 7.1%. For fiscal year 2003, the
6    Annual Percentage shall be 8%. For fiscal year 2004, the
7    Annual Percentage shall be 11.7%. Upon the effective date
8    of Public Act 93-839 (July 30, 2004), the Annual Percentage
9    shall be 10% for fiscal year 2005. For fiscal year 2006,
10    the Annual Percentage shall be 9.75%. For fiscal year 2007,
11    the Annual Percentage shall be 9.75%. For fiscal year 2008,
12    the Annual Percentage shall be 7.75%. For fiscal year 2009,
13    the Annual Percentage shall be 9.75%. For fiscal year 2010,
14    the Annual Percentage shall be 9.75%. For fiscal year 2011,
15    the Annual Percentage shall be 8.75%. For fiscal year 2012,
16    the Annual Percentage shall be 8.75%. For fiscal year 2013,
17    the Annual Percentage shall be 9.75%. For fiscal year 2014,
18    the Annual Percentage shall be 9.5%. For fiscal year 2015,
19    the Annual Percentage shall be 10%. For fiscal year 2018,
20    the Annual Percentage shall be 9.8%. For fiscal year 2019,
21    the Annual Percentage shall be 9.7%. For all other fiscal
22    years, the Annual Percentage shall be calculated as a
23    fraction, the numerator of which shall be the amount of
24    refunds approved for payment by the Department during the
25    preceding fiscal year as a result of overpayment of tax
26    liability under subsections (a) and (b)(1), (2), and (3) of

 

 

HB0316- 42 -LRB101 04006 HLH 49014 b

1    Section 201 of this Act plus the amount of such refunds
2    remaining approved but unpaid at the end of the preceding
3    fiscal year, minus the amounts transferred into the Income
4    Tax Refund Fund from the Tobacco Settlement Recovery Fund,
5    and the denominator of which shall be the amounts which
6    will be collected pursuant to subsections (a) and (b)(1),
7    (2), and (3) of Section 201 of this Act during the
8    preceding fiscal year; except that in State fiscal year
9    2002, the Annual Percentage shall in no event exceed 7.6%.
10    The Director of Revenue shall certify the Annual Percentage
11    to the Comptroller on the last business day of the fiscal
12    year immediately preceding the fiscal year for which it is
13    to be effective.
14        (2) Beginning on January 1, 1989 and thereafter, the
15    Department shall deposit a percentage of the amounts
16    collected pursuant to subsections (a) and (b)(6), (7), and
17    (8), (c) and (d) of Section 201 of this Act into a fund in
18    the State treasury known as the Income Tax Refund Fund. The
19    Department shall deposit 18% of such amounts during the
20    period beginning January 1, 1989 and ending on June 30,
21    1989. Beginning with State fiscal year 1990 and for each
22    fiscal year thereafter, the percentage deposited into the
23    Income Tax Refund Fund during a fiscal year shall be the
24    Annual Percentage. For fiscal years 1999, 2000, and 2001,
25    the Annual Percentage shall be 19%. For fiscal year 2003,
26    the Annual Percentage shall be 27%. For fiscal year 2004,

 

 

HB0316- 43 -LRB101 04006 HLH 49014 b

1    the Annual Percentage shall be 32%. Upon the effective date
2    of Public Act 93-839 (July 30, 2004), the Annual Percentage
3    shall be 24% for fiscal year 2005. For fiscal year 2006,
4    the Annual Percentage shall be 20%. For fiscal year 2007,
5    the Annual Percentage shall be 17.5%. For fiscal year 2008,
6    the Annual Percentage shall be 15.5%. For fiscal year 2009,
7    the Annual Percentage shall be 17.5%. For fiscal year 2010,
8    the Annual Percentage shall be 17.5%. For fiscal year 2011,
9    the Annual Percentage shall be 17.5%. For fiscal year 2012,
10    the Annual Percentage shall be 17.5%. For fiscal year 2013,
11    the Annual Percentage shall be 14%. For fiscal year 2014,
12    the Annual Percentage shall be 13.4%. For fiscal year 2015,
13    the Annual Percentage shall be 14%. For fiscal year 2018,
14    the Annual Percentage shall be 17.5%. For fiscal year 2019,
15    the Annual Percentage shall be 15.5%. For all other fiscal
16    years, the Annual Percentage shall be calculated as a
17    fraction, the numerator of which shall be the amount of
18    refunds approved for payment by the Department during the
19    preceding fiscal year as a result of overpayment of tax
20    liability under subsections (a) and (b)(6), (7), and (8),
21    (c) and (d) of Section 201 of this Act plus the amount of
22    such refunds remaining approved but unpaid at the end of
23    the preceding fiscal year, and the denominator of which
24    shall be the amounts which will be collected pursuant to
25    subsections (a) and (b)(6), (7), and (8), (c) and (d) of
26    Section 201 of this Act during the preceding fiscal year;

 

 

HB0316- 44 -LRB101 04006 HLH 49014 b

1    except that in State fiscal year 2002, the Annual
2    Percentage shall in no event exceed 23%. The Director of
3    Revenue shall certify the Annual Percentage to the
4    Comptroller on the last business day of the fiscal year
5    immediately preceding the fiscal year for which it is to be
6    effective.
7        (3) The Comptroller shall order transferred and the
8    Treasurer shall transfer from the Tobacco Settlement
9    Recovery Fund to the Income Tax Refund Fund (i) $35,000,000
10    in January, 2001, (ii) $35,000,000 in January, 2002, and
11    (iii) $35,000,000 in January, 2003.
12    (d) Expenditures from Income Tax Refund Fund.
13        (1) Beginning January 1, 1989, money in the Income Tax
14    Refund Fund shall be expended exclusively for the purpose
15    of paying refunds resulting from overpayment of tax
16    liability under Section 201 of this Act and for making
17    transfers pursuant to this subsection (d).
18        (2) The Director shall order payment of refunds
19    resulting from overpayment of tax liability under Section
20    201 of this Act from the Income Tax Refund Fund only to the
21    extent that amounts collected pursuant to Section 201 of
22    this Act and transfers pursuant to this subsection (d) and
23    item (3) of subsection (c) have been deposited and retained
24    in the Fund.
25        (3) As soon as possible after the end of each fiscal
26    year, the Director shall order transferred and the State

 

 

HB0316- 45 -LRB101 04006 HLH 49014 b

1    Treasurer and State Comptroller shall transfer from the
2    Income Tax Refund Fund to the Personal Property Tax
3    Replacement Fund an amount, certified by the Director to
4    the Comptroller, equal to the excess of the amount
5    collected pursuant to subsections (c) and (d) of Section
6    201 of this Act deposited into the Income Tax Refund Fund
7    during the fiscal year over the amount of refunds resulting
8    from overpayment of tax liability under subsections (c) and
9    (d) of Section 201 of this Act paid from the Income Tax
10    Refund Fund during the fiscal year.
11        (4) As soon as possible after the end of each fiscal
12    year, the Director shall order transferred and the State
13    Treasurer and State Comptroller shall transfer from the
14    Personal Property Tax Replacement Fund to the Income Tax
15    Refund Fund an amount, certified by the Director to the
16    Comptroller, equal to the excess of the amount of refunds
17    resulting from overpayment of tax liability under
18    subsections (c) and (d) of Section 201 of this Act paid
19    from the Income Tax Refund Fund during the fiscal year over
20    the amount collected pursuant to subsections (c) and (d) of
21    Section 201 of this Act deposited into the Income Tax
22    Refund Fund during the fiscal year.
23        (4.5) As soon as possible after the end of fiscal year
24    1999 and of each fiscal year thereafter, the Director shall
25    order transferred and the State Treasurer and State
26    Comptroller shall transfer from the Income Tax Refund Fund

 

 

HB0316- 46 -LRB101 04006 HLH 49014 b

1    to the General Revenue Fund any surplus remaining in the
2    Income Tax Refund Fund as of the end of such fiscal year;
3    excluding for fiscal years 2000, 2001, and 2002 amounts
4    attributable to transfers under item (3) of subsection (c)
5    less refunds resulting from the earned income tax credit.
6        (5) This Act shall constitute an irrevocable and
7    continuing appropriation from the Income Tax Refund Fund
8    for the purpose of paying refunds upon the order of the
9    Director in accordance with the provisions of this Section.
10    (e) Deposits into the Education Assistance Fund and the
11Income Tax Surcharge Local Government Distributive Fund. On
12July 1, 1991, and thereafter, of the amounts collected pursuant
13to subsections (a) and (b) of Section 201 of this Act, minus
14deposits into the Income Tax Refund Fund, the Department shall
15deposit 7.3% into the Education Assistance Fund in the State
16Treasury. Beginning July 1, 1991, and continuing through
17January 31, 1993, of the amounts collected pursuant to
18subsections (a) and (b) of Section 201 of the Illinois Income
19Tax Act, minus deposits into the Income Tax Refund Fund, the
20Department shall deposit 3.0% into the Income Tax Surcharge
21Local Government Distributive Fund in the State Treasury.
22Beginning February 1, 1993 and continuing through June 30,
231993, of the amounts collected pursuant to subsections (a) and
24(b) of Section 201 of the Illinois Income Tax Act, minus
25deposits into the Income Tax Refund Fund, the Department shall
26deposit 4.4% into the Income Tax Surcharge Local Government

 

 

HB0316- 47 -LRB101 04006 HLH 49014 b

1Distributive Fund in the State Treasury. Beginning July 1,
21993, and continuing through June 30, 1994, of the amounts
3collected under subsections (a) and (b) of Section 201 of this
4Act, minus deposits into the Income Tax Refund Fund, the
5Department shall deposit 1.475% into the Income Tax Surcharge
6Local Government Distributive Fund in the State Treasury.
7    (f) Deposits into the Fund for the Advancement of
8Education. Beginning February 1, 2015 and until February 1,
92019, the Department shall deposit 1/30 the following portions
10of the revenue realized from the tax imposed upon individuals,
11trusts, and estates by subsections (a) and (b) of Section 201
12of this Act during the preceding month, minus deposits into the
13Income Tax Refund Fund, into the Fund for the Advancement of
14Education. :
15        (1) beginning February 1, 2015, and prior to February
16    1, 2025, 1/30; and
17        (2) beginning February 1, 2025, 1/26.
18    If the rate of tax imposed by subsection (a) and (b) of
19Section 201 is reduced pursuant to Section 201.5 of this Act,
20the Department shall not make the deposits required by this
21subsection (f) on or after the effective date of the reduction.
22    (g) Deposits into the Commitment to Human Services Fund.
23Beginning February 1, 2015, the Department shall deposit the
24following portions of the revenue realized from the tax imposed
25upon individuals, trusts, and estates by subsections (a) and
26(b) of Section 201 of this Act during the preceding month,

 

 

HB0316- 48 -LRB101 04006 HLH 49014 b

1minus deposits into the Income Tax Refund Fund, into the
2Commitment to Human Services Fund:
3        (1) beginning February 1, 2015, and prior to February
4    1, 2025, 1/30; and
5        (2) beginning February 1, 2025, 1/26.
6    If the rate of tax imposed by subsection (a) and (b) of
7Section 201 is reduced pursuant to Section 201.5 of this Act,
8the Department shall not make the deposits required by this
9subsection (g) on or after the effective date of the reduction.
10    (h) Deposits into the Tax Compliance and Administration
11Fund. Beginning on the first day of the first calendar month to
12occur on or after August 26, 2014 (the effective date of Public
13Act 98-1098), each month the Department shall pay into the Tax
14Compliance and Administration Fund, to be used, subject to
15appropriation, to fund additional auditors and compliance
16personnel at the Department, an amount equal to 1/12 of 5% of
17the cash receipts collected during the preceding fiscal year by
18the Audit Bureau of the Department from the tax imposed by
19subsections (a), (b), (c), and (d) of Section 201 of this Act,
20net of deposits into the Income Tax Refund Fund made from those
21cash receipts.
22(Source: P.A. 99-78, eff. 7-20-15; 100-22, eff. 7-6-17; 100-23,
23eff. 7-6-17; 100-587, eff. 6-4-18; 100-621, eff. 7-20-18;
24100-863, eff. 8-14-18; revised 10-12-18.)
 
25    Section 99. Effective date. This Act takes effect upon
26becoming law.