101ST GENERAL ASSEMBLY
State of Illinois
2019 and 2020
HB5641

 

Introduced , by Rep. Sonya M. Harper

 

SYNOPSIS AS INTRODUCED:
 
35 ILCS 5/201

    Amends the Illinois Income Tax Act. Creates a credit for financial institutions in an amount equal to the aggregate amount of all fees, penalties, and any other income derived during the taxable year from each commercial loan transaction that is (i) originated by the financial institution, (ii) made to a person residing or located in this State, and (iii) made primarily for an agricultural project in this State. Effective immediately.


LRB101 19114 HLH 70321 b

FISCAL NOTE ACT MAY APPLY

 

 

A BILL FOR

 

HB5641LRB101 19114 HLH 70321 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 Section 201 as follows:
 
6    (35 ILCS 5/201)
7    (Text of Section before amendment by P.A. 101-8)
8    Sec. 201. Tax imposed.
9    (a) In general. A tax measured by net income is hereby
10imposed on every individual, corporation, trust and estate for
11each taxable year ending after July 31, 1969 on the privilege
12of earning or receiving income in or as a resident of this
13State. Such tax shall be in addition to all other occupation or
14privilege taxes imposed by this State or by any municipal
15corporation or political subdivision thereof.
16    (b) Rates. The tax imposed by subsection (a) of this
17Section shall be determined as follows, except as adjusted by
18subsection (d-1):
19        (1) In the case of an individual, trust or estate, for
20    taxable years ending prior to July 1, 1989, an amount equal
21    to 2 1/2% of the taxpayer's net income for the taxable
22    year.
23        (2) In the case of an individual, trust or estate, for

 

 

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

 

 

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1    (ii) 3.75% of the taxpayer's net income for the period
2    after December 31, 2014, as calculated under Section 202.5.
3        (5.2) In the case of an individual, trust, or estate,
4    for taxable years beginning on or after January 1, 2015,
5    and ending prior to July 1, 2017, an amount equal to 3.75%
6    of the taxpayer's net income for the taxable year.
7        (5.3) In the case of an individual, trust, or estate,
8    for taxable years beginning prior to July 1, 2017, and
9    ending after June 30, 2017, an amount equal to the sum of
10    (i) 3.75% of the taxpayer's net income for the period prior
11    to July 1, 2017, as calculated under Section 202.5, and
12    (ii) 4.95% of the taxpayer's net income for the period
13    after June 30, 2017, as calculated under Section 202.5.
14        (5.4) In the case of an individual, trust, or estate,
15    for taxable years beginning on or after July 1, 2017, an
16    amount equal to 4.95% of the taxpayer's net income for the
17    taxable year.
18        (6) In the case of a corporation, for taxable years
19    ending prior to July 1, 1989, an amount equal to 4% of the
20    taxpayer's net income for the taxable year.
21        (7) In the case of a corporation, for taxable years
22    beginning prior to July 1, 1989 and ending after June 30,
23    1989, an amount equal to the sum of (i) 4% of the
24    taxpayer's net income for the period prior to July 1, 1989,
25    as calculated under Section 202.3, and (ii) 4.8% of the
26    taxpayer's net income for the period after June 30, 1989,

 

 

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1    as calculated under Section 202.3.
2        (8) In the case of a corporation, for taxable years
3    beginning after June 30, 1989, and ending prior to January
4    1, 2011, an amount equal to 4.8% of the taxpayer's net
5    income for the taxable year.
6        (9) In the case of a corporation, for taxable years
7    beginning prior to January 1, 2011, and ending after
8    December 31, 2010, an amount equal to the sum of (i) 4.8%
9    of the taxpayer's net income for the period prior to
10    January 1, 2011, as calculated under Section 202.5, and
11    (ii) 7% of the taxpayer's net income for the period after
12    December 31, 2010, as calculated under Section 202.5.
13        (10) In the case of a corporation, for taxable years
14    beginning on or after January 1, 2011, and ending prior to
15    January 1, 2015, an amount equal to 7% of the taxpayer's
16    net income for the taxable year.
17        (11) In the case of a corporation, for taxable years
18    beginning prior to January 1, 2015, and ending after
19    December 31, 2014, an amount equal to the sum of (i) 7% of
20    the taxpayer's net income for the period prior to January
21    1, 2015, as calculated under Section 202.5, and (ii) 5.25%
22    of the taxpayer's net income for the period after December
23    31, 2014, as calculated under Section 202.5.
24        (12) In the case of a corporation, for taxable years
25    beginning on or after January 1, 2015, and ending prior to
26    July 1, 2017, an amount equal to 5.25% of the taxpayer's

 

 

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1    net income for the taxable year.
2        (13) In the case of a corporation, for taxable years
3    beginning prior to July 1, 2017, and ending after June 30,
4    2017, an amount equal to the sum of (i) 5.25% of the
5    taxpayer's net income for the period prior to July 1, 2017,
6    as calculated under Section 202.5, and (ii) 7% of the
7    taxpayer's net income for the period after June 30, 2017,
8    as calculated under Section 202.5.
9        (14) In the case of a corporation, for taxable years
10    beginning on or after July 1, 2017, an amount equal to 7%
11    of the taxpayer's net income for the taxable year.
12    The rates under this subsection (b) are subject to the
13provisions of Section 201.5.
14    (b-5) Surcharge; sale or exchange of assets, properties,
15and intangibles of organization gaming licensees. For each of
16taxable years 2019 through 2027, a surcharge is imposed on all
17taxpayers on income arising from the sale or exchange of
18capital assets, depreciable business property, real property
19used in the trade or business, and Section 197 intangibles (i)
20of an organization licensee under the Illinois Horse Racing Act
21of 1975 and (ii) of an organization gaming licensee under the
22Illinois Gambling Act. The amount of the surcharge is equal to
23the amount of federal income tax liability for the taxable year
24attributable to those sales and exchanges. The surcharge
25imposed shall not apply if:
26        (1) the organization gaming license, organization

 

 

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1    license, or racetrack property is transferred as a result
2    of any of the following:
3            (A) bankruptcy, a receivership, or a debt
4        adjustment initiated by or against the initial
5        licensee or the substantial owners of the initial
6        licensee;
7            (B) cancellation, revocation, or termination of
8        any such license by the Illinois Gaming Board or the
9        Illinois Racing Board;
10            (C) a determination by the Illinois Gaming Board
11        that transfer of the license is in the best interests
12        of Illinois gaming;
13            (D) the death of an owner of the equity interest in
14        a licensee;
15            (E) the acquisition of a controlling interest in
16        the stock or substantially all of the assets of a
17        publicly traded company;
18            (F) a transfer by a parent company to a wholly
19        owned subsidiary; or
20            (G) the transfer or sale to or by one person to
21        another person where both persons were initial owners
22        of the license when the license was issued; or
23        (2) the controlling interest in the organization
24    gaming license, organization license, or racetrack
25    property is transferred in a transaction to lineal
26    descendants in which no gain or loss is recognized or as a

 

 

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1    result of a transaction in accordance with Section 351 of
2    the Internal Revenue Code in which no gain or loss is
3    recognized; or
4        (3) live horse racing was not conducted in 2010 at a
5    racetrack located within 3 miles of the Mississippi River
6    under a license issued pursuant to the Illinois Horse
7    Racing Act of 1975.
8    The transfer of an organization gaming license,
9organization license, or racetrack property by a person other
10than the initial licensee to receive the organization gaming
11license is not subject to a surcharge. The Department shall
12adopt rules necessary to implement and administer this
13subsection.
14    (c) Personal Property Tax Replacement Income Tax.
15Beginning on July 1, 1979 and thereafter, in addition to such
16income tax, there is also hereby imposed the Personal Property
17Tax Replacement Income Tax measured by net income on every
18corporation (including Subchapter S corporations), partnership
19and trust, for each taxable year ending after June 30, 1979.
20Such taxes are imposed on the privilege of earning or receiving
21income in or as a resident of this State. The Personal Property
22Tax Replacement Income Tax shall be in addition to the income
23tax imposed by subsections (a) and (b) of this Section and in
24addition to all other occupation or privilege taxes imposed by
25this State or by any municipal corporation or political
26subdivision thereof.

 

 

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1    (d) Additional Personal Property Tax Replacement Income
2Tax Rates. The personal property tax replacement income tax
3imposed by this subsection and subsection (c) of this Section
4in the case of a corporation, other than a Subchapter S
5corporation and except as adjusted by subsection (d-1), shall
6be an additional amount equal to 2.85% of such taxpayer's net
7income for the taxable year, except that beginning on January
81, 1981, and thereafter, the rate of 2.85% specified in this
9subsection shall be reduced to 2.5%, and in the case of a
10partnership, trust or a Subchapter S corporation shall be an
11additional amount equal to 1.5% of such taxpayer's net income
12for the taxable year.
13    (d-1) Rate reduction for certain foreign insurers. In the
14case of a foreign insurer, as defined by Section 35A-5 of the
15Illinois Insurance Code, whose state or country of domicile
16imposes on insurers domiciled in Illinois a retaliatory tax
17(excluding any insurer whose premiums from reinsurance assumed
18are 50% or more of its total insurance premiums as determined
19under paragraph (2) of subsection (b) of Section 304, except
20that for purposes of this determination premiums from
21reinsurance do not include premiums from inter-affiliate
22reinsurance arrangements), beginning with taxable years ending
23on or after December 31, 1999, the sum of the rates of tax
24imposed by subsections (b) and (d) shall be reduced (but not
25increased) to the rate at which the total amount of tax imposed
26under this Act, net of all credits allowed under this Act,

 

 

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

 

 

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1    no event increase the rates imposed under subsections (b)
2    and (d).
3        (2) Any reduction in the rates of tax imposed by this
4    subsection shall be applied first against the rates imposed
5    by subsection (b) and only after the tax imposed by
6    subsection (a) net of all credits allowed under this
7    Section other than the credit allowed under subsection (i)
8    has been reduced to zero, against the rates imposed by
9    subsection (d).
10    This subsection (d-1) is exempt from the provisions of
11Section 250.
12    (e) Investment credit. A taxpayer shall be allowed a credit
13against the Personal Property Tax Replacement Income Tax for
14investment in qualified property.
15        (1) A taxpayer shall be allowed a credit equal to .5%
16    of the basis of qualified property placed in service during
17    the taxable year, provided such property is placed in
18    service on or after July 1, 1984. There shall be allowed an
19    additional credit equal to .5% of the basis of qualified
20    property placed in service during the taxable year,
21    provided such property is placed in service on or after
22    July 1, 1986, and the taxpayer's base employment within
23    Illinois has increased by 1% or more over the preceding
24    year as determined by the taxpayer's employment records
25    filed with the Illinois Department of Employment Security.
26    Taxpayers who are new to Illinois shall be deemed to have

 

 

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1    met the 1% growth in base employment for the first year in
2    which they file employment records with the Illinois
3    Department of Employment Security. The provisions added to
4    this Section by Public Act 85-1200 (and restored by Public
5    Act 87-895) shall be construed as declaratory of existing
6    law and not as a new enactment. If, in any year, the
7    increase in base employment within Illinois over the
8    preceding year is less than 1%, the additional credit shall
9    be limited to that percentage times a fraction, the
10    numerator of which is .5% and the denominator of which is
11    1%, but shall not exceed .5%. The investment credit shall
12    not be allowed to the extent that it would reduce a
13    taxpayer's liability in any tax year below zero, nor may
14    any credit for qualified property be allowed for any year
15    other than the year in which the property was placed in
16    service in Illinois. For tax years ending on or after
17    December 31, 1987, and on or before December 31, 1988, the
18    credit shall be allowed for the tax year in which the
19    property is placed in service, or, if the amount of the
20    credit exceeds the tax liability for that year, whether it
21    exceeds the original liability or the liability as later
22    amended, such excess may be carried forward and applied to
23    the tax liability of the 5 taxable years following the
24    excess credit years if the taxpayer (i) makes investments
25    which cause the creation of a minimum of 2,000 full-time
26    equivalent jobs in Illinois, (ii) is located in an

 

 

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

 

 

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1        component of a building such as landscaping, sewer
2        lines, local access roads, fencing, parking lots, and
3        other appurtenances;
4            (B) is depreciable pursuant to Section 167 of the
5        Internal Revenue Code, except that "3-year property"
6        as defined in Section 168(c)(2)(A) of that Code is not
7        eligible for the credit provided by this subsection
8        (e);
9            (C) is acquired by purchase as defined in Section
10        179(d) of the Internal Revenue Code;
11            (D) is used in Illinois by a taxpayer who is
12        primarily engaged in manufacturing, or in mining coal
13        or fluorite, or in retailing, or was placed in service
14        on or after July 1, 2006 in a River Edge Redevelopment
15        Zone established pursuant to the River Edge
16        Redevelopment Zone Act; and
17            (E) has not previously been used in Illinois in
18        such a manner and by such a person as would qualify for
19        the credit provided by this subsection (e) or
20        subsection (f).
21        (3) For purposes of this subsection (e),
22    "manufacturing" means the material staging and production
23    of tangible personal property by procedures commonly
24    regarded as manufacturing, processing, fabrication, or
25    assembling which changes some existing material into new
26    shapes, new qualities, or new combinations. For purposes of

 

 

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1    this subsection (e) the term "mining" shall have the same
2    meaning as the term "mining" in Section 613(c) of the
3    Internal Revenue Code. For purposes of this subsection (e),
4    the term "retailing" means the sale of tangible personal
5    property for use or consumption and not for resale, or
6    services rendered in conjunction with the sale of tangible
7    personal property for use or consumption and not for
8    resale. For purposes of this subsection (e), "tangible
9    personal property" has the same meaning as when that term
10    is used in the Retailers' Occupation Tax Act, and, for
11    taxable years ending after December 31, 2008, does not
12    include the generation, transmission, or distribution of
13    electricity.
14        (4) The basis of qualified property shall be the basis
15    used to compute the depreciation deduction for federal
16    income tax purposes.
17        (5) If the basis of the property for federal income tax
18    depreciation purposes is increased after it has been placed
19    in service in Illinois by the taxpayer, the amount of such
20    increase shall be deemed property placed in service on the
21    date of such increase in basis.
22        (6) The term "placed in service" shall have the same
23    meaning as under Section 46 of the Internal Revenue Code.
24        (7) If during any taxable year, any property ceases to
25    be qualified property in the hands of the taxpayer within
26    48 months after being placed in service, or the situs of

 

 

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1    any qualified property is moved outside Illinois within 48
2    months after being placed in service, the Personal Property
3    Tax Replacement Income Tax for such taxable year shall be
4    increased. Such increase shall be determined by (i)
5    recomputing the investment credit which would have been
6    allowed for the year in which credit for such property was
7    originally allowed by eliminating such property from such
8    computation and, (ii) subtracting such recomputed credit
9    from the amount of credit previously allowed. For the
10    purposes of this paragraph (7), a reduction of the basis of
11    qualified property resulting from a redetermination of the
12    purchase price shall be deemed a disposition of qualified
13    property to the extent of such reduction.
14        (8) Unless the investment credit is extended by law,
15    the basis of qualified property shall not include costs
16    incurred after December 31, 2018, except for costs incurred
17    pursuant to a binding contract entered into on or before
18    December 31, 2018.
19        (9) Each taxable year ending before December 31, 2000,
20    a partnership may elect to pass through to its partners the
21    credits to which the partnership is entitled under this
22    subsection (e) for the taxable year. A partner may use the
23    credit allocated to him or her under this paragraph only
24    against the tax imposed in subsections (c) and (d) of this
25    Section. If the partnership makes that election, those
26    credits shall be allocated among the partners in the

 

 

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

 

 

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1    investment in qualified property which is placed in service
2    in an Enterprise Zone created pursuant to the Illinois
3    Enterprise Zone Act or, for property placed in service on
4    or after July 1, 2006, a River Edge Redevelopment Zone
5    established pursuant to the River Edge Redevelopment Zone
6    Act. For partners, shareholders of Subchapter S
7    corporations, and owners of limited liability companies,
8    if the liability company is treated as a partnership for
9    purposes of federal and State income taxation, there shall
10    be allowed a credit under this subsection (f) to be
11    determined in accordance with the determination of income
12    and distributive share of income under Sections 702 and 704
13    and Subchapter S of the Internal Revenue Code. The credit
14    shall be .5% of the basis for such property. The credit
15    shall be available only in the taxable year in which the
16    property is placed in service in the Enterprise Zone or
17    River Edge Redevelopment Zone and shall not be allowed to
18    the extent that it would reduce a taxpayer's liability for
19    the tax imposed by subsections (a) and (b) of this Section
20    to below zero. For tax years ending on or after December
21    31, 1985, the credit shall be allowed for the tax year in
22    which the property is placed in service, or, if the amount
23    of the credit exceeds the tax liability for that year,
24    whether it exceeds the original liability or the liability
25    as later amended, such excess may be carried forward and
26    applied to the tax liability of the 5 taxable years

 

 

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

 

 

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

 

 

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1    Redevelopment Zone, provided such property is placed in
2    service on or after July 1, 2006, and the taxpayer's base
3    employment within Illinois has increased by 1% or more over
4    the preceding year as determined by the taxpayer's
5    employment records filed with the Illinois Department of
6    Employment Security. Taxpayers who are new to Illinois
7    shall be deemed to have met the 1% growth in base
8    employment for the first year in which they file employment
9    records with the Illinois Department of Employment
10    Security. If, in any year, the increase in base employment
11    within Illinois over the preceding year is less than 1%,
12    the additional credit shall be limited to that percentage
13    times a fraction, the numerator of which is 0.5% and the
14    denominator of which is 1%, but shall not exceed 0.5%.
15        (8) For taxable years beginning on or after January 1,
16    2021, there shall be allowed an Enterprise Zone
17    construction jobs credit against the taxes imposed under
18    subsections (a) and (b) of this Section as provided in
19    Section 13 of the Illinois Enterprise Zone Act.
20        The credit or credits may not reduce the taxpayer's
21    liability to less than zero. If the amount of the credit or
22    credits exceeds the taxpayer's liability, the excess may be
23    carried forward and applied against the taxpayer's
24    liability in succeeding calendar years in the same manner
25    provided under paragraph (4) of Section 211 of this Act.
26    The credit or credits shall be applied to the earliest year

 

 

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1    for which there is a tax liability. If there are credits
2    from more than one taxable year that are available to
3    offset a liability, the earlier credit shall be applied
4    first.
5        For partners, shareholders of Subchapter S
6    corporations, and owners of limited liability companies,
7    if the liability company is treated as a partnership for
8    the purposes of federal and State income taxation, there
9    shall be allowed a credit under this Section to be
10    determined in accordance with the determination of income
11    and distributive share of income under Sections 702 and 704
12    and Subchapter S of the Internal Revenue Code.
13        The total aggregate amount of credits awarded under the
14    Blue Collar Jobs Act (Article 20 of Public Act 101-9 this
15    amendatory Act of the 101st General Assembly) shall not
16    exceed $20,000,000 in any State fiscal year.
17        This paragraph (8) is exempt from the provisions of
18    Section 250.
19    (g) (Blank).
20    (h) Investment credit; High Impact Business.
21        (1) Subject to subsections (b) and (b-5) of Section 5.5
22    of the Illinois Enterprise Zone Act, a taxpayer shall be
23    allowed a credit against the tax imposed by subsections (a)
24    and (b) of this Section for investment in qualified
25    property which is placed in service by a Department of
26    Commerce and Economic Opportunity designated High Impact

 

 

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1    Business. The credit shall be .5% of the basis for such
2    property. The credit shall not be available (i) until the
3    minimum investments in qualified property set forth in
4    subdivision (a)(3)(A) of Section 5.5 of the Illinois
5    Enterprise Zone Act have been satisfied or (ii) until the
6    time authorized in subsection (b-5) of the Illinois
7    Enterprise Zone Act for entities designated as High Impact
8    Businesses under subdivisions (a)(3)(B), (a)(3)(C), and
9    (a)(3)(D) of Section 5.5 of the Illinois Enterprise Zone
10    Act, and shall not be allowed to the extent that it would
11    reduce a taxpayer's liability for the tax imposed by
12    subsections (a) and (b) of this Section to below zero. The
13    credit applicable to such investments shall be taken in the
14    taxable year in which such investments have been completed.
15    The credit for additional investments beyond the minimum
16    investment by a designated high impact business authorized
17    under subdivision (a)(3)(A) of Section 5.5 of the Illinois
18    Enterprise Zone Act shall be available only in the taxable
19    year in which the property is placed in service and shall
20    not be allowed to the extent that it would reduce a
21    taxpayer's liability for the tax imposed by subsections (a)
22    and (b) of this Section to below zero. For tax years ending
23    on or after December 31, 1987, the credit shall be allowed
24    for the tax year in which the property is placed in
25    service, or, if the amount of the credit exceeds the tax
26    liability for that year, whether it exceeds the original

 

 

HB5641- 23 -LRB101 19114 HLH 70321 b

1    liability or the liability as later amended, such excess
2    may be carried forward and applied to the tax liability of
3    the 5 taxable years following the excess credit year. The
4    credit shall be applied to the earliest year for which
5    there is a liability. If there is credit from more than one
6    tax year that is available to offset a liability, the
7    credit accruing first in time shall be applied first.
8        Changes made in this subdivision (h)(1) by Public Act
9    88-670 restore changes made by Public Act 85-1182 and
10    reflect existing law.
11        (2) The term qualified property means property which:
12            (A) is tangible, whether new or used, including
13        buildings and structural components of buildings;
14            (B) is depreciable pursuant to Section 167 of the
15        Internal Revenue Code, except that "3-year property"
16        as defined in Section 168(c)(2)(A) of that Code is not
17        eligible for the credit provided by this subsection
18        (h);
19            (C) is acquired by purchase as defined in Section
20        179(d) of the Internal Revenue Code; and
21            (D) is not eligible for the Enterprise Zone
22        Investment Credit provided by subsection (f) of this
23        Section.
24        (3) The basis of qualified property shall be the basis
25    used to compute the depreciation deduction for federal
26    income tax purposes.

 

 

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1        (4) If the basis of the property for federal income tax
2    depreciation purposes is increased after it has been placed
3    in service in a federally designated Foreign Trade Zone or
4    Sub-Zone located in Illinois by the taxpayer, the amount of
5    such increase shall be deemed property placed in service on
6    the date of such increase in basis.
7        (5) The term "placed in service" shall have the same
8    meaning as under Section 46 of the Internal Revenue Code.
9        (6) If during any taxable year ending on or before
10    December 31, 1996, any property ceases to be qualified
11    property in the hands of the taxpayer within 48 months
12    after being placed in service, or the situs of any
13    qualified property is moved outside Illinois within 48
14    months after being placed in service, the tax imposed under
15    subsections (a) and (b) of this Section for such taxable
16    year shall be increased. Such increase shall be determined
17    by (i) recomputing the investment credit which would have
18    been allowed for the year in which credit for such property
19    was originally allowed by eliminating such property from
20    such computation, and (ii) subtracting such recomputed
21    credit from the amount of credit previously allowed. For
22    the purposes of this paragraph (6), a reduction of the
23    basis of qualified property resulting from a
24    redetermination of the purchase price shall be deemed a
25    disposition of qualified property to the extent of such
26    reduction.

 

 

HB5641- 25 -LRB101 19114 HLH 70321 b

1        (7) Beginning with tax years ending after December 31,
2    1996, if a taxpayer qualifies for the credit under this
3    subsection (h) and thereby is granted a tax abatement and
4    the taxpayer relocates its entire facility in violation of
5    the explicit terms and length of the contract under Section
6    18-183 of the Property Tax Code, the tax imposed under
7    subsections (a) and (b) of this Section shall be increased
8    for the taxable year in which the taxpayer relocated its
9    facility by an amount equal to the amount of credit
10    received by the taxpayer under this subsection (h).
11    (h-5) High Impact Business construction constructions jobs
12credit. For taxable years beginning on or after January 1,
132021, there shall also be allowed a High Impact Business
14construction jobs credit against the tax imposed under
15subsections (a) and (b) of this Section as provided in
16subsections (i) and (j) of Section 5.5 of the Illinois
17Enterprise Zone Act.
18    The credit or credits may not reduce the taxpayer's
19liability to less than zero. If the amount of the credit or
20credits exceeds the taxpayer's liability, the excess may be
21carried forward and applied against the taxpayer's liability in
22succeeding calendar years in the manner provided under
23paragraph (4) of Section 211 of this Act. The credit or credits
24shall be applied to the earliest year for which there is a tax
25liability. If there are credits from more than one taxable year
26that are available to offset a liability, the earlier credit

 

 

HB5641- 26 -LRB101 19114 HLH 70321 b

1shall be applied first.
2    For partners, shareholders of Subchapter S corporations,
3and owners of limited liability companies, if the liability
4company is treated as a partnership for the purposes of federal
5and State income taxation, there shall be allowed a credit
6under this Section to be determined in accordance with the
7determination of income and distributive share of income under
8Sections 702 and 704 and Subchapter S of the Internal Revenue
9Code.
10    The total aggregate amount of credits awarded under the
11Blue Collar Jobs Act (Article 20 of Public Act 101-9 this
12amendatory Act of the 101st General Assembly) shall not exceed
13$20,000,000 in any State fiscal year.
14    This subsection (h-5) is exempt from the provisions of
15Section 250.
16    (i) Credit for Personal Property Tax Replacement Income
17Tax. For tax years ending prior to December 31, 2003, a credit
18shall be allowed against the tax imposed by subsections (a) and
19(b) of this Section for the tax imposed by subsections (c) and
20(d) of this Section. This credit shall be computed by
21multiplying the tax imposed by subsections (c) and (d) of this
22Section by a fraction, the numerator of which is base income
23allocable to Illinois and the denominator of which is Illinois
24base income, and further multiplying the product by the tax
25rate imposed by subsections (a) and (b) of this Section.
26    Any credit earned on or after December 31, 1986 under this

 

 

HB5641- 27 -LRB101 19114 HLH 70321 b

1subsection which is unused in the year the credit is computed
2because it exceeds the tax liability imposed by subsections (a)
3and (b) for that year (whether it exceeds the original
4liability or the liability as later amended) may be carried
5forward and applied to the tax liability imposed by subsections
6(a) and (b) of the 5 taxable years following the excess credit
7year, provided that no credit may be carried forward to any
8year ending on or after December 31, 2003. This credit shall be
9applied first to the earliest year for which there is a
10liability. If there is a credit under this subsection from more
11than one tax year that is available to offset a liability the
12earliest credit arising under this subsection shall be applied
13first.
14    If, during any taxable year ending on or after December 31,
151986, the tax imposed by subsections (c) and (d) of this
16Section for which a taxpayer has claimed a credit under this
17subsection (i) is reduced, the amount of credit for such tax
18shall also be reduced. Such reduction shall be determined by
19recomputing the credit to take into account the reduced tax
20imposed by subsections (c) and (d). If any portion of the
21reduced amount of credit has been carried to a different
22taxable year, an amended return shall be filed for such taxable
23year to reduce the amount of credit claimed.
24    (j) Training expense credit. Beginning with tax years
25ending on or after December 31, 1986 and prior to December 31,
262003, a taxpayer shall be allowed a credit against the tax

 

 

HB5641- 28 -LRB101 19114 HLH 70321 b

1imposed by subsections (a) and (b) under this Section for all
2amounts paid or accrued, on behalf of all persons employed by
3the taxpayer in Illinois or Illinois residents employed outside
4of Illinois by a taxpayer, for educational or vocational
5training in semi-technical or technical fields or semi-skilled
6or skilled fields, which were deducted from gross income in the
7computation of taxable income. The credit against the tax
8imposed by subsections (a) and (b) shall be 1.6% of such
9training expenses. For partners, shareholders of subchapter S
10corporations, and owners of limited liability companies, if the
11liability company is treated as a partnership for purposes of
12federal and State income taxation, there shall be allowed a
13credit under this subsection (j) to be determined in accordance
14with the determination of income and distributive share of
15income under Sections 702 and 704 and subchapter S of the
16Internal Revenue Code.
17    Any credit allowed under this subsection which is unused in
18the year the credit is earned may be carried forward to each of
19the 5 taxable years following the year for which the credit is
20first computed until it is used. This credit shall be applied
21first to the earliest year for which there is a liability. If
22there is a credit under this subsection from more than one tax
23year that is available to offset a liability, the earliest
24credit arising under this subsection shall be applied first. No
25carryforward credit may be claimed in any tax year ending on or
26after December 31, 2003.

 

 

HB5641- 29 -LRB101 19114 HLH 70321 b

1    (k) Research and development credit. For tax years ending
2after July 1, 1990 and prior to December 31, 2003, and
3beginning again for tax years ending on or after December 31,
42004, and ending prior to January 1, 2027, a taxpayer shall be
5allowed a credit against the tax imposed by subsections (a) and
6(b) of this Section for increasing research activities in this
7State. The credit allowed against the tax imposed by
8subsections (a) and (b) shall be equal to 6 1/2% of the
9qualifying expenditures for increasing research activities in
10this State. For partners, shareholders of subchapter S
11corporations, and owners of limited liability companies, if the
12liability company is treated as a partnership for purposes of
13federal and State income taxation, there shall be allowed a
14credit under this subsection to be determined in accordance
15with the determination of income and distributive share of
16income under Sections 702 and 704 and subchapter S of the
17Internal Revenue Code.
18    For purposes of this subsection, "qualifying expenditures"
19means the qualifying expenditures as defined for the federal
20credit for increasing research activities which would be
21allowable under Section 41 of the Internal Revenue Code and
22which are conducted in this State, "qualifying expenditures for
23increasing research activities in this State" means the excess
24of qualifying expenditures for the taxable year in which
25incurred over qualifying expenditures for the base period,
26"qualifying expenditures for the base period" means the average

 

 

HB5641- 30 -LRB101 19114 HLH 70321 b

1of the qualifying expenditures for each year in the base
2period, and "base period" means the 3 taxable years immediately
3preceding the taxable year for which the determination is being
4made.
5    Any credit in excess of the tax liability for the taxable
6year may be carried forward. A taxpayer may elect to have the
7unused credit shown on its final completed return carried over
8as a credit against the tax liability for the following 5
9taxable years or until it has been fully used, whichever occurs
10first; provided that no credit earned in a tax year ending
11prior to December 31, 2003 may be carried forward to any year
12ending on or after December 31, 2003.
13    If an unused credit is carried forward to a given year from
142 or more earlier years, that credit arising in the earliest
15year will be applied first against the tax liability for the
16given year. If a tax liability for the given year still
17remains, the credit from the next earliest year will then be
18applied, and so on, until all credits have been used or no tax
19liability for the given year remains. Any remaining unused
20credit or credits then will be carried forward to the next
21following year in which a tax liability is incurred, except
22that no credit can be carried forward to a year which is more
23than 5 years after the year in which the expense for which the
24credit is given was incurred.
25    No inference shall be drawn from Public Act 91-644 this
26amendatory Act of the 91st General Assembly in construing this

 

 

HB5641- 31 -LRB101 19114 HLH 70321 b

1Section for taxable years beginning before January 1, 1999.
2    It is the intent of the General Assembly that the research
3and development credit under this subsection (k) shall apply
4continuously for all tax years ending on or after December 31,
52004 and ending prior to January 1, 2027, including, but not
6limited to, the period beginning on January 1, 2016 and ending
7on July 6, 2017 (the effective date of Public Act 100-22) this
8amendatory Act of the 100th General Assembly. All actions taken
9in reliance on the continuation of the credit under this
10subsection (k) by any taxpayer are hereby validated.
11    (l) Environmental Remediation Tax Credit.
12        (i) For tax years ending after December 31, 1997 and on
13    or before December 31, 2001, a taxpayer shall be allowed a
14    credit against the tax imposed by subsections (a) and (b)
15    of this Section for certain amounts paid for unreimbursed
16    eligible remediation costs, as specified in this
17    subsection. For purposes of this Section, "unreimbursed
18    eligible remediation costs" means costs approved by the
19    Illinois Environmental Protection Agency ("Agency") under
20    Section 58.14 of the Environmental Protection Act that were
21    paid in performing environmental remediation at a site for
22    which a No Further Remediation Letter was issued by the
23    Agency and recorded under Section 58.10 of the
24    Environmental Protection Act. The credit must be claimed
25    for the taxable year in which Agency approval of the
26    eligible remediation costs is granted. The credit is not

 

 

HB5641- 32 -LRB101 19114 HLH 70321 b

1    available to any taxpayer if the taxpayer or any related
2    party caused or contributed to, in any material respect, a
3    release of regulated substances on, in, or under the site
4    that was identified and addressed by the remedial action
5    pursuant to the Site Remediation Program of the
6    Environmental Protection Act. After the Pollution Control
7    Board rules are adopted pursuant to the Illinois
8    Administrative Procedure Act for the administration and
9    enforcement of Section 58.9 of the Environmental
10    Protection Act, determinations as to credit availability
11    for purposes of this Section shall be made consistent with
12    those rules. For purposes of this Section, "taxpayer"
13    includes a person whose tax attributes the taxpayer has
14    succeeded to under Section 381 of the Internal Revenue Code
15    and "related party" includes the persons disallowed a
16    deduction for losses by paragraphs (b), (c), and (f)(1) of
17    Section 267 of the Internal Revenue Code by virtue of being
18    a related taxpayer, as well as any of its partners. The
19    credit allowed against the tax imposed by subsections (a)
20    and (b) shall be equal to 25% of the unreimbursed eligible
21    remediation costs in excess of $100,000 per site, except
22    that the $100,000 threshold shall not apply to any site
23    contained in an enterprise zone as determined by the
24    Department of Commerce and Community Affairs (now
25    Department of Commerce and Economic Opportunity). The
26    total credit allowed shall not exceed $40,000 per year with

 

 

HB5641- 33 -LRB101 19114 HLH 70321 b

1    a maximum total of $150,000 per site. For partners and
2    shareholders of subchapter S corporations, there shall be
3    allowed a credit under this subsection to be determined in
4    accordance with the determination of income and
5    distributive share of income under Sections 702 and 704 and
6    subchapter S of the Internal Revenue Code.
7        (ii) A credit allowed under this subsection that is
8    unused in the year the credit is earned may be carried
9    forward to each of the 5 taxable years following the year
10    for which the credit is first earned until it is used. The
11    term "unused credit" does not include any amounts of
12    unreimbursed eligible remediation costs in excess of the
13    maximum credit per site authorized under paragraph (i).
14    This credit shall be applied first to the earliest year for
15    which there is a liability. If there is a credit under this
16    subsection from more than one tax year that is available to
17    offset a liability, the earliest credit arising under this
18    subsection shall be applied first. A credit allowed under
19    this subsection may be sold to a buyer as part of a sale of
20    all or part of the remediation site for which the credit
21    was granted. The purchaser of a remediation site and the
22    tax credit shall succeed to the unused credit and remaining
23    carry-forward period of the seller. To perfect the
24    transfer, the assignor shall record the transfer in the
25    chain of title for the site and provide written notice to
26    the Director of the Illinois Department of Revenue of the

 

 

HB5641- 34 -LRB101 19114 HLH 70321 b

1    assignor's intent to sell the remediation site and the
2    amount of the tax credit to be transferred as a portion of
3    the sale. In no event may a credit be transferred to any
4    taxpayer if the taxpayer or a related party would not be
5    eligible under the provisions of subsection (i).
6        (iii) For purposes of this Section, the term "site"
7    shall have the same meaning as under Section 58.2 of the
8    Environmental Protection Act.
9    (m) Education expense credit. Beginning with tax years
10ending after December 31, 1999, a taxpayer who is the custodian
11of one or more qualifying pupils shall be allowed a credit
12against the tax imposed by subsections (a) and (b) of this
13Section for qualified education expenses incurred on behalf of
14the qualifying pupils. The credit shall be equal to 25% of
15qualified education expenses, but in no event may the total
16credit under this subsection claimed by a family that is the
17custodian of qualifying pupils exceed (i) $500 for tax years
18ending prior to December 31, 2017, and (ii) $750 for tax years
19ending on or after December 31, 2017. In no event shall a
20credit under this subsection reduce the taxpayer's liability
21under this Act to less than zero. Notwithstanding any other
22provision of law, for taxable years beginning on or after
23January 1, 2017, no taxpayer may claim a credit under this
24subsection (m) if the taxpayer's adjusted gross income for the
25taxable year exceeds (i) $500,000, in the case of spouses
26filing a joint federal tax return or (ii) $250,000, in the case

 

 

HB5641- 35 -LRB101 19114 HLH 70321 b

1of all other taxpayers. This subsection is exempt from the
2provisions of Section 250 of this Act.
3    For purposes of this subsection:
4    "Qualifying pupils" means individuals who (i) are
5residents of the State of Illinois, (ii) are under the age of
621 at the close of the school year for which a credit is
7sought, and (iii) during the school year for which a credit is
8sought were full-time pupils enrolled in a kindergarten through
9twelfth grade education program at any school, as defined in
10this subsection.
11    "Qualified education expense" means the amount incurred on
12behalf of a qualifying pupil in excess of $250 for tuition,
13book fees, and lab fees at the school in which the pupil is
14enrolled during the regular school year.
15    "School" means any public or nonpublic elementary or
16secondary school in Illinois that is in compliance with Title
17VI of the Civil Rights Act of 1964 and attendance at which
18satisfies the requirements of Section 26-1 of the School Code,
19except that nothing shall be construed to require a child to
20attend any particular public or nonpublic school to qualify for
21the credit under this Section.
22    "Custodian" means, with respect to qualifying pupils, an
23Illinois resident who is a parent, the parents, a legal
24guardian, or the legal guardians of the qualifying pupils.
25    (n) River Edge Redevelopment Zone site remediation tax
26credit.

 

 

HB5641- 36 -LRB101 19114 HLH 70321 b

1        (i) For tax years ending on or after December 31, 2006,
2    a taxpayer shall be allowed a credit against the tax
3    imposed by subsections (a) and (b) of this Section for
4    certain amounts paid for unreimbursed eligible remediation
5    costs, as specified in this subsection. For purposes of
6    this Section, "unreimbursed eligible remediation costs"
7    means costs approved by the Illinois Environmental
8    Protection Agency ("Agency") under Section 58.14a of the
9    Environmental Protection Act that were paid in performing
10    environmental remediation at a site within a River Edge
11    Redevelopment Zone for which a No Further Remediation
12    Letter was issued by the Agency and recorded under Section
13    58.10 of the Environmental Protection Act. The credit must
14    be claimed for the taxable year in which Agency approval of
15    the eligible remediation costs is granted. The credit is
16    not available to any taxpayer if the taxpayer or any
17    related party caused or contributed to, in any material
18    respect, a release of regulated substances on, in, or under
19    the site that was identified and addressed by the remedial
20    action pursuant to the Site Remediation Program of the
21    Environmental Protection Act. Determinations as to credit
22    availability for purposes of this Section shall be made
23    consistent with rules adopted by the Pollution Control
24    Board pursuant to the Illinois Administrative Procedure
25    Act for the administration and enforcement of Section 58.9
26    of the Environmental Protection Act. For purposes of this

 

 

HB5641- 37 -LRB101 19114 HLH 70321 b

1    Section, "taxpayer" includes a person whose tax attributes
2    the taxpayer has succeeded to under Section 381 of the
3    Internal Revenue Code and "related party" includes the
4    persons disallowed a deduction for losses by paragraphs
5    (b), (c), and (f)(1) of Section 267 of the Internal Revenue
6    Code by virtue of being a related taxpayer, as well as any
7    of its partners. The credit allowed against the tax imposed
8    by subsections (a) and (b) shall be equal to 25% of the
9    unreimbursed eligible remediation costs in excess of
10    $100,000 per site.
11        (ii) A credit allowed under this subsection that is
12    unused in the year the credit is earned may be carried
13    forward to each of the 5 taxable years following the year
14    for which the credit is first earned until it is used. This
15    credit shall be applied first to the earliest year for
16    which there is a liability. If there is a credit under this
17    subsection from more than one tax year that is available to
18    offset a liability, the earliest credit arising under this
19    subsection shall be applied first. A credit allowed under
20    this subsection may be sold to a buyer as part of a sale of
21    all or part of the remediation site for which the credit
22    was granted. The purchaser of a remediation site and the
23    tax credit shall succeed to the unused credit and remaining
24    carry-forward period of the seller. To perfect the
25    transfer, the assignor shall record the transfer in the
26    chain of title for the site and provide written notice to

 

 

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1    the Director of the Illinois Department of Revenue of the
2    assignor's intent to sell the remediation site and the
3    amount of the tax credit to be transferred as a portion of
4    the sale. In no event may a credit be transferred to any
5    taxpayer if the taxpayer or a related party would not be
6    eligible under the provisions of subsection (i).
7        (iii) For purposes of this Section, the term "site"
8    shall have the same meaning as under Section 58.2 of the
9    Environmental Protection Act.
10    (o) For each of taxable years during the Compassionate Use
11of Medical Cannabis Program, a surcharge is imposed on all
12taxpayers on income arising from the sale or exchange of
13capital assets, depreciable business property, real property
14used in the trade or business, and Section 197 intangibles of
15an organization registrant under the Compassionate Use of
16Medical Cannabis Program Act. The amount of the surcharge is
17equal to the amount of federal income tax liability for the
18taxable year attributable to those sales and exchanges. The
19surcharge imposed does not apply if:
20        (1) the medical cannabis cultivation center
21    registration, medical cannabis dispensary registration, or
22    the property of a registration is transferred as a result
23    of any of the following:
24            (A) bankruptcy, a receivership, or a debt
25        adjustment initiated by or against the initial
26        registration or the substantial owners of the initial

 

 

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1        registration;
2            (B) cancellation, revocation, or termination of
3        any registration by the Illinois Department of Public
4        Health;
5            (C) a determination by the Illinois Department of
6        Public Health that transfer of the registration is in
7        the best interests of Illinois qualifying patients as
8        defined by the Compassionate Use of Medical Cannabis
9        Program Act;
10            (D) the death of an owner of the equity interest in
11        a registrant;
12            (E) the acquisition of a controlling interest in
13        the stock or substantially all of the assets of a
14        publicly traded company;
15            (F) a transfer by a parent company to a wholly
16        owned subsidiary; or
17            (G) the transfer or sale to or by one person to
18        another person where both persons were initial owners
19        of the registration when the registration was issued;
20        or
21        (2) the cannabis cultivation center registration,
22    medical cannabis dispensary registration, or the
23    controlling interest in a registrant's property is
24    transferred in a transaction to lineal descendants in which
25    no gain or loss is recognized or as a result of a
26    transaction in accordance with Section 351 of the Internal

 

 

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1    Revenue Code in which no gain or loss is recognized.
2    (p) For tax years ending after July 1, 2020, a financial
3institution shall be allowed a credit against the tax imposed
4by subsections (a) and (b) of this Section in an amount equal
5to the aggregate amount of all fees, penalties, and any other
6income derived during the taxable year from each commercial
7loan transaction that is (i) originated by the financial
8institution, (ii) made to a person residing or located in this
9State, and (iii) made primarily for an agricultural project in
10this State.
11    For partners, shareholders of subchapter S corporations,
12and owners of limited liability companies, if the liability
13company is treated as a partnership for purposes of federal and
14State income taxation, there shall be allowed a credit under
15this subsection to be determined in accordance with the
16determination of income and distributive share of income under
17Sections 702 and 704 and subchapter S of the Internal Revenue
18Code.
19    As used in this subsection, "financial institution" means a
20partnership, association, limited liability company, or
21corporation doing business under and as permitted by any law of
22this State or of the United States relating to banks, savings
23and loan associations, or savings banks.
24    This subsection is exempt from the provisions of Section
25250.
26(Source: P.A. 100-22, eff. 7-6-17; 101-9, eff. 6-5-19; 101-31,

 

 

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1eff. 6-28-19; 101-207, eff. 8-2-19; 101-363, eff. 8-9-19;
2revised 9-17-19.)
 
3    (Text of Section after amendment by P.A. 101-8)
4    Sec. 201. Tax imposed.
5    (a) In general. A tax measured by net income is hereby
6imposed on every individual, corporation, trust and estate for
7each taxable year ending after July 31, 1969 on the privilege
8of earning or receiving income in or as a resident of this
9State. Such tax shall be in addition to all other occupation or
10privilege taxes imposed by this State or by any municipal
11corporation or political subdivision thereof.
12    (b) Rates. The tax imposed by subsection (a) of this
13Section shall be determined as follows, except as adjusted by
14subsection (d-1):
15        (1) In the case of an individual, trust or estate, for
16    taxable years ending prior to July 1, 1989, an amount equal
17    to 2 1/2% of the taxpayer's net income for the taxable
18    year.
19        (2) In the case of an individual, trust or estate, for
20    taxable years beginning prior to July 1, 1989 and ending
21    after June 30, 1989, an amount equal to the sum of (i) 2
22    1/2% of the taxpayer's net income for the period prior to
23    July 1, 1989, as calculated under Section 202.3, and (ii)
24    3% of the taxpayer's net income for the period after June
25    30, 1989, as calculated under Section 202.3.

 

 

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1        (3) In the case of an individual, trust or estate, for
2    taxable years beginning after June 30, 1989, and ending
3    prior to January 1, 2011, an amount equal to 3% of the
4    taxpayer's net income for the taxable year.
5        (4) In the case of an individual, trust, or estate, for
6    taxable years beginning prior to January 1, 2011, and
7    ending after December 31, 2010, an amount equal to the sum
8    of (i) 3% of the taxpayer's net income for the period prior
9    to January 1, 2011, as calculated under Section 202.5, and
10    (ii) 5% of the taxpayer's net income for the period after
11    December 31, 2010, as calculated under Section 202.5.
12        (5) In the case of an individual, trust, or estate, for
13    taxable years beginning on or after January 1, 2011, and
14    ending prior to January 1, 2015, an amount equal to 5% of
15    the taxpayer's net income for the taxable year.
16        (5.1) In the case of an individual, trust, or estate,
17    for taxable years beginning prior to January 1, 2015, and
18    ending after December 31, 2014, an amount equal to the sum
19    of (i) 5% of the taxpayer's net income for the period prior
20    to January 1, 2015, as calculated under Section 202.5, and
21    (ii) 3.75% of the taxpayer's net income for the period
22    after December 31, 2014, as calculated under Section 202.5.
23        (5.2) In the case of an individual, trust, or estate,
24    for taxable years beginning on or after January 1, 2015,
25    and ending prior to July 1, 2017, an amount equal to 3.75%
26    of the taxpayer's net income for the taxable year.

 

 

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1        (5.3) In the case of an individual, trust, or estate,
2    for taxable years beginning prior to July 1, 2017, and
3    ending after June 30, 2017, an amount equal to the sum of
4    (i) 3.75% of the taxpayer's net income for the period prior
5    to July 1, 2017, as calculated under Section 202.5, and
6    (ii) 4.95% of the taxpayer's net income for the period
7    after June 30, 2017, as calculated under Section 202.5.
8        (5.4) In the case of an individual, trust, or estate,
9    for taxable years beginning on or after July 1, 2017 and
10    beginning prior to January 1, 2021, an amount equal to
11    4.95% of the taxpayer's net income for the taxable year.
12        (5.5) In the case of an individual, trust, or estate,
13    for taxable years beginning on or after January 1, 2021, an
14    amount calculated under the rate structure set forth in
15    Section 201.1.
16        (6) In the case of a corporation, for taxable years
17    ending prior to July 1, 1989, an amount equal to 4% of the
18    taxpayer's net income for the taxable year.
19        (7) In the case of a corporation, for taxable years
20    beginning prior to July 1, 1989 and ending after June 30,
21    1989, an amount equal to the sum of (i) 4% of the
22    taxpayer's net income for the period prior to July 1, 1989,
23    as calculated under Section 202.3, and (ii) 4.8% of the
24    taxpayer's net income for the period after June 30, 1989,
25    as calculated under Section 202.3.
26        (8) In the case of a corporation, for taxable years

 

 

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1    beginning after June 30, 1989, and ending prior to January
2    1, 2011, an amount equal to 4.8% of the taxpayer's net
3    income for the taxable year.
4        (9) In the case of a corporation, for taxable years
5    beginning prior to January 1, 2011, and ending after
6    December 31, 2010, an amount equal to the sum of (i) 4.8%
7    of the taxpayer's net income for the period prior to
8    January 1, 2011, as calculated under Section 202.5, and
9    (ii) 7% of the taxpayer's net income for the period after
10    December 31, 2010, as calculated under Section 202.5.
11        (10) In the case of a corporation, for taxable years
12    beginning on or after January 1, 2011, and ending prior to
13    January 1, 2015, an amount equal to 7% of the taxpayer's
14    net income for the taxable year.
15        (11) In the case of a corporation, for taxable years
16    beginning prior to January 1, 2015, and ending after
17    December 31, 2014, an amount equal to the sum of (i) 7% of
18    the taxpayer's net income for the period prior to January
19    1, 2015, as calculated under Section 202.5, and (ii) 5.25%
20    of the taxpayer's net income for the period after December
21    31, 2014, as calculated under Section 202.5.
22        (12) In the case of a corporation, for taxable years
23    beginning on or after January 1, 2015, and ending prior to
24    July 1, 2017, an amount equal to 5.25% of the taxpayer's
25    net income for the taxable year.
26        (13) In the case of a corporation, for taxable years

 

 

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1    beginning prior to July 1, 2017, and ending after June 30,
2    2017, an amount equal to the sum of (i) 5.25% of the
3    taxpayer's net income for the period prior to July 1, 2017,
4    as calculated under Section 202.5, and (ii) 7% of the
5    taxpayer's net income for the period after June 30, 2017,
6    as calculated under Section 202.5.
7        (14) In the case of a corporation, for taxable years
8    beginning on or after July 1, 2017 and beginning prior to
9    January 1, 2021, an amount equal to 7% of the taxpayer's
10    net income for the taxable year.
11        (15) In the case of a corporation, for taxable years
12    beginning on or after January 1, 2021, an amount equal to
13    7.99% of the taxpayer's net income for the taxable year.
14    The rates under this subsection (b) are subject to the
15provisions of Section 201.5.
16    (b-5) Surcharge; sale or exchange of assets, properties,
17and intangibles of organization gaming licensees. For each of
18taxable years 2019 through 2027, a surcharge is imposed on all
19taxpayers on income arising from the sale or exchange of
20capital assets, depreciable business property, real property
21used in the trade or business, and Section 197 intangibles (i)
22of an organization licensee under the Illinois Horse Racing Act
23of 1975 and (ii) of an organization gaming licensee under the
24Illinois Gambling Act. The amount of the surcharge is equal to
25the amount of federal income tax liability for the taxable year
26attributable to those sales and exchanges. The surcharge

 

 

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1imposed shall not apply if:
2        (1) the organization gaming license, organization
3    license, or racetrack property is transferred as a result
4    of any of the following:
5            (A) bankruptcy, a receivership, or a debt
6        adjustment initiated by or against the initial
7        licensee or the substantial owners of the initial
8        licensee;
9            (B) cancellation, revocation, or termination of
10        any such license by the Illinois Gaming Board or the
11        Illinois Racing Board;
12            (C) a determination by the Illinois Gaming Board
13        that transfer of the license is in the best interests
14        of Illinois gaming;
15            (D) the death of an owner of the equity interest in
16        a licensee;
17            (E) the acquisition of a controlling interest in
18        the stock or substantially all of the assets of a
19        publicly traded company;
20            (F) a transfer by a parent company to a wholly
21        owned subsidiary; or
22            (G) the transfer or sale to or by one person to
23        another person where both persons were initial owners
24        of the license when the license was issued; or
25        (2) the controlling interest in the organization
26    gaming license, organization license, or racetrack

 

 

HB5641- 47 -LRB101 19114 HLH 70321 b

1    property is transferred in a transaction to lineal
2    descendants in which no gain or loss is recognized or as a
3    result of a transaction in accordance with Section 351 of
4    the Internal Revenue Code in which no gain or loss is
5    recognized; or
6        (3) live horse racing was not conducted in 2010 at a
7    racetrack located within 3 miles of the Mississippi River
8    under a license issued pursuant to the Illinois Horse
9    Racing Act of 1975.
10    The transfer of an organization gaming license,
11organization license, or racetrack property by a person other
12than the initial licensee to receive the organization gaming
13license is not subject to a surcharge. The Department shall
14adopt rules necessary to implement and administer this
15subsection.
16    (c) Personal Property Tax Replacement Income Tax.
17Beginning on July 1, 1979 and thereafter, in addition to such
18income tax, there is also hereby imposed the Personal Property
19Tax Replacement Income Tax measured by net income on every
20corporation (including Subchapter S corporations), partnership
21and trust, for each taxable year ending after June 30, 1979.
22Such taxes are imposed on the privilege of earning or receiving
23income in or as a resident of this State. The Personal Property
24Tax Replacement Income Tax shall be in addition to the income
25tax imposed by subsections (a) and (b) of this Section and in
26addition to all other occupation or privilege taxes imposed by

 

 

HB5641- 48 -LRB101 19114 HLH 70321 b

1this State or by any municipal corporation or political
2subdivision thereof.
3    (d) Additional Personal Property Tax Replacement Income
4Tax Rates. The personal property tax replacement income tax
5imposed by this subsection and subsection (c) of this Section
6in the case of a corporation, other than a Subchapter S
7corporation and except as adjusted by subsection (d-1), shall
8be an additional amount equal to 2.85% of such taxpayer's net
9income for the taxable year, except that beginning on January
101, 1981, and thereafter, the rate of 2.85% specified in this
11subsection shall be reduced to 2.5%, and in the case of a
12partnership, trust or a Subchapter S corporation shall be an
13additional amount equal to 1.5% of such taxpayer's net income
14for the taxable year.
15    (d-1) Rate reduction for certain foreign insurers. In the
16case of a foreign insurer, as defined by Section 35A-5 of the
17Illinois Insurance Code, whose state or country of domicile
18imposes on insurers domiciled in Illinois a retaliatory tax
19(excluding any insurer whose premiums from reinsurance assumed
20are 50% or more of its total insurance premiums as determined
21under paragraph (2) of subsection (b) of Section 304, except
22that for purposes of this determination premiums from
23reinsurance do not include premiums from inter-affiliate
24reinsurance arrangements), beginning with taxable years ending
25on or after December 31, 1999, the sum of the rates of tax
26imposed by subsections (b) and (d) shall be reduced (but not

 

 

HB5641- 49 -LRB101 19114 HLH 70321 b

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

 

 

HB5641- 50 -LRB101 19114 HLH 70321 b

1    the taxable year, as described by subsection (1) of Section
2    409 of the Illinois Insurance Code. This paragraph will in
3    no event increase the rates imposed under subsections (b)
4    and (d).
5        (2) Any reduction in the rates of tax imposed by this
6    subsection shall be applied first against the rates imposed
7    by subsection (b) and only after the tax imposed by
8    subsection (a) net of all credits allowed under this
9    Section other than the credit allowed under subsection (i)
10    has been reduced to zero, against the rates imposed by
11    subsection (d).
12    This subsection (d-1) is exempt from the provisions of
13Section 250.
14    (e) Investment credit. A taxpayer shall be allowed a credit
15against the Personal Property Tax Replacement Income Tax for
16investment in qualified property.
17        (1) A taxpayer shall be allowed a credit equal to .5%
18    of the basis of qualified property placed in service during
19    the taxable year, provided such property is placed in
20    service on or after July 1, 1984. There shall be allowed an
21    additional credit equal to .5% of the basis of qualified
22    property placed in service during the taxable year,
23    provided such property is placed in service on or after
24    July 1, 1986, and the taxpayer's base employment within
25    Illinois has increased by 1% or more over the preceding
26    year as determined by the taxpayer's employment records

 

 

HB5641- 51 -LRB101 19114 HLH 70321 b

1    filed with the Illinois Department of Employment Security.
2    Taxpayers who are new to Illinois shall be deemed to have
3    met the 1% growth in base employment for the first year in
4    which they file employment records with the Illinois
5    Department of Employment Security. The provisions added to
6    this Section by Public Act 85-1200 (and restored by Public
7    Act 87-895) shall be construed as declaratory of existing
8    law and not as a new enactment. If, in any year, the
9    increase in base employment within Illinois over the
10    preceding year is less than 1%, the additional credit shall
11    be limited to that percentage times a fraction, the
12    numerator of which is .5% and the denominator of which is
13    1%, but shall not exceed .5%. The investment credit shall
14    not be allowed to the extent that it would reduce a
15    taxpayer's liability in any tax year below zero, nor may
16    any credit for qualified property be allowed for any year
17    other than the year in which the property was placed in
18    service in Illinois. For tax years ending on or after
19    December 31, 1987, and on or before December 31, 1988, the
20    credit shall be allowed for the tax year in which the
21    property is placed in service, or, if the amount of the
22    credit exceeds the tax liability for that year, whether it
23    exceeds the original liability or the liability as later
24    amended, such excess may be carried forward and applied to
25    the tax liability of the 5 taxable years following the
26    excess credit years if the taxpayer (i) makes investments

 

 

HB5641- 52 -LRB101 19114 HLH 70321 b

1    which cause the creation of a minimum of 2,000 full-time
2    equivalent jobs in Illinois, (ii) is located in an
3    enterprise zone established pursuant to the Illinois
4    Enterprise Zone Act and (iii) is certified by the
5    Department of Commerce and Community Affairs (now
6    Department of Commerce and Economic Opportunity) as
7    complying with the requirements specified in clause (i) and
8    (ii) by July 1, 1986. The Department of Commerce and
9    Community Affairs (now Department of Commerce and Economic
10    Opportunity) shall notify the Department of Revenue of all
11    such certifications immediately. For tax years ending
12    after December 31, 1988, the credit shall be allowed for
13    the tax year in which the property is placed in service,
14    or, if the amount of the credit exceeds the tax liability
15    for that year, whether it exceeds the original liability or
16    the liability as later amended, such excess may be carried
17    forward and applied to the tax liability of the 5 taxable
18    years following the excess credit years. The credit shall
19    be applied to the earliest year for which there is a
20    liability. If there is credit from more than one tax year
21    that is available to offset a liability, earlier credit
22    shall be applied first.
23        (2) The term "qualified property" means property
24    which:
25            (A) is tangible, whether new or used, including
26        buildings and structural components of buildings and

 

 

HB5641- 53 -LRB101 19114 HLH 70321 b

1        signs that are real property, but not including land or
2        improvements to real property that are not a structural
3        component of a building such as landscaping, sewer
4        lines, local access roads, fencing, parking lots, and
5        other appurtenances;
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        (e);
11            (C) is acquired by purchase as defined in Section
12        179(d) of the Internal Revenue Code;
13            (D) is used in Illinois by a taxpayer who is
14        primarily engaged in manufacturing, or in mining coal
15        or fluorite, or in retailing, or was placed in service
16        on or after July 1, 2006 in a River Edge Redevelopment
17        Zone established pursuant to the River Edge
18        Redevelopment Zone Act; and
19            (E) has not previously been used in Illinois in
20        such a manner and by such a person as would qualify for
21        the credit provided by this subsection (e) or
22        subsection (f).
23        (3) For purposes of this subsection (e),
24    "manufacturing" means the material staging and production
25    of tangible personal property by procedures commonly
26    regarded as manufacturing, processing, fabrication, or

 

 

HB5641- 54 -LRB101 19114 HLH 70321 b

1    assembling which changes some existing material into new
2    shapes, new qualities, or new combinations. For purposes of
3    this subsection (e) the term "mining" shall have the same
4    meaning as the term "mining" in Section 613(c) of the
5    Internal Revenue Code. For purposes of this subsection (e),
6    the term "retailing" means the sale of tangible personal
7    property for use or consumption and not for resale, or
8    services rendered in conjunction with the sale of tangible
9    personal property for use or consumption and not for
10    resale. For purposes of this subsection (e), "tangible
11    personal property" has the same meaning as when that term
12    is used in the Retailers' Occupation Tax Act, and, for
13    taxable years ending after December 31, 2008, does not
14    include the generation, transmission, or distribution of
15    electricity.
16        (4) The basis of qualified property shall be the basis
17    used to compute the depreciation deduction for federal
18    income tax purposes.
19        (5) If the basis of the property for federal income tax
20    depreciation purposes is increased after it has been placed
21    in service in Illinois by the taxpayer, the amount of such
22    increase shall be deemed property placed in service on the
23    date of such increase in basis.
24        (6) The term "placed in service" shall have the same
25    meaning as under Section 46 of the Internal Revenue Code.
26        (7) If during any taxable year, any property ceases to

 

 

HB5641- 55 -LRB101 19114 HLH 70321 b

1    be qualified property in the hands of the taxpayer within
2    48 months after being placed in service, or the situs of
3    any qualified property is moved outside Illinois within 48
4    months after being placed in service, the Personal Property
5    Tax Replacement Income Tax for such taxable year shall be
6    increased. Such increase shall be determined by (i)
7    recomputing the investment credit which would have been
8    allowed for the year in which credit for such property was
9    originally allowed by eliminating such property from such
10    computation and, (ii) subtracting such recomputed credit
11    from the amount of credit previously allowed. For the
12    purposes of this paragraph (7), a reduction of the basis of
13    qualified property resulting from a redetermination of the
14    purchase price shall be deemed a disposition of qualified
15    property to the extent of such reduction.
16        (8) Unless the investment credit is extended by law,
17    the basis of qualified property shall not include costs
18    incurred after December 31, 2018, except for costs incurred
19    pursuant to a binding contract entered into on or before
20    December 31, 2018.
21        (9) Each taxable year ending before December 31, 2000,
22    a partnership may elect to pass through to its partners the
23    credits to which the partnership is entitled under this
24    subsection (e) for the taxable year. A partner may use the
25    credit allocated to him or her under this paragraph only
26    against the tax imposed in subsections (c) and (d) of this

 

 

HB5641- 56 -LRB101 19114 HLH 70321 b

1    Section. If the partnership makes that election, those
2    credits shall be allocated among the partners in the
3    partnership in accordance with the rules set forth in
4    Section 704(b) of the Internal Revenue Code, and the rules
5    promulgated under that Section, and the allocated amount of
6    the credits shall be allowed to the partners for that
7    taxable year. The partnership shall make this election on
8    its Personal Property Tax Replacement Income Tax return for
9    that taxable year. The election to pass through the credits
10    shall be irrevocable.
11        For taxable years ending on or after December 31, 2000,
12    a partner that qualifies its partnership for a subtraction
13    under subparagraph (I) of paragraph (2) of subsection (d)
14    of Section 203 or a shareholder that qualifies a Subchapter
15    S corporation for a subtraction under subparagraph (S) of
16    paragraph (2) of subsection (b) of Section 203 shall be
17    allowed a credit under this subsection (e) equal to its
18    share of the credit earned under this subsection (e) during
19    the taxable year by the partnership or Subchapter S
20    corporation, determined in accordance with the
21    determination of income and distributive share of income
22    under Sections 702 and 704 and Subchapter S of the Internal
23    Revenue Code. This paragraph is exempt from the provisions
24    of Section 250.
25    (f) Investment credit; Enterprise Zone; River Edge
26Redevelopment Zone.

 

 

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1        (1) A taxpayer shall be allowed a credit against the
2    tax imposed by subsections (a) and (b) of this Section for
3    investment in qualified property which is placed in service
4    in an Enterprise Zone created pursuant to the Illinois
5    Enterprise Zone Act or, for property placed in service on
6    or after July 1, 2006, a River Edge Redevelopment Zone
7    established pursuant to the River Edge Redevelopment Zone
8    Act. For partners, shareholders of Subchapter S
9    corporations, and owners of limited liability companies,
10    if the liability company is treated as a partnership for
11    purposes of federal and State income taxation, there shall
12    be allowed a credit under this subsection (f) to be
13    determined in accordance with the determination of income
14    and distributive share of income under Sections 702 and 704
15    and Subchapter S of the Internal Revenue Code. The credit
16    shall be .5% of the basis for such property. The credit
17    shall be available only in the taxable year in which the
18    property is placed in service in the Enterprise Zone or
19    River Edge Redevelopment Zone and shall not be allowed to
20    the extent that it would reduce a taxpayer's liability for
21    the tax imposed by subsections (a) and (b) of this Section
22    to below zero. For tax years ending on or after December
23    31, 1985, the credit shall be allowed for the tax year in
24    which the property is placed in service, or, if the amount
25    of the credit exceeds the tax liability for that year,
26    whether it exceeds the original liability or the liability

 

 

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

 

 

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

 

 

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1    to 0.5% of the basis of qualified property placed in
2    service during the taxable year in a River Edge
3    Redevelopment Zone, provided such property is placed in
4    service on or after July 1, 2006, and the taxpayer's base
5    employment within Illinois has increased by 1% or more over
6    the preceding year as determined by the taxpayer's
7    employment records filed with the Illinois Department of
8    Employment Security. Taxpayers who are new to Illinois
9    shall be deemed to have met the 1% growth in base
10    employment for the first year in which they file employment
11    records with the Illinois Department of Employment
12    Security. If, in any year, the increase in base employment
13    within Illinois over the preceding year is less than 1%,
14    the additional credit shall be limited to that percentage
15    times a fraction, the numerator of which is 0.5% and the
16    denominator of which is 1%, but shall not exceed 0.5%.
17        (8) For taxable years beginning on or after January 1,
18    2021, there shall be allowed an Enterprise Zone
19    construction jobs credit against the taxes imposed under
20    subsections (a) and (b) of this Section as provided in
21    Section 13 of the Illinois Enterprise Zone Act.
22        The credit or credits may not reduce the taxpayer's
23    liability to less than zero. If the amount of the credit or
24    credits exceeds the taxpayer's liability, the excess may be
25    carried forward and applied against the taxpayer's
26    liability in succeeding calendar years in the same manner

 

 

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1    provided under paragraph (4) of Section 211 of this Act.
2    The credit or credits shall be applied to the earliest year
3    for which there is a tax liability. If there are credits
4    from more than one taxable year that are available to
5    offset a liability, the earlier credit shall be applied
6    first.
7        For partners, shareholders of Subchapter S
8    corporations, and owners of limited liability companies,
9    if the liability company is treated as a partnership for
10    the purposes of federal and State income taxation, there
11    shall be allowed a credit under this Section to be
12    determined in accordance with the determination of income
13    and distributive share of income under Sections 702 and 704
14    and Subchapter S of the Internal Revenue Code.
15        The total aggregate amount of credits awarded under the
16    Blue Collar Jobs Act (Article 20 of Public Act 101-9 this
17    amendatory Act of the 101st General Assembly) shall not
18    exceed $20,000,000 in any State fiscal year.
19        This paragraph (8) is exempt from the provisions of
20    Section 250.
21    (g) (Blank).
22    (h) Investment credit; High Impact Business.
23        (1) Subject to subsections (b) and (b-5) of Section 5.5
24    of the Illinois Enterprise Zone Act, a taxpayer shall be
25    allowed a credit against the tax imposed by subsections (a)
26    and (b) of this Section for investment in qualified

 

 

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1    property which is placed in service by a Department of
2    Commerce and Economic Opportunity designated High Impact
3    Business. The credit shall be .5% of the basis for such
4    property. The credit shall not be available (i) until the
5    minimum investments in qualified property set forth in
6    subdivision (a)(3)(A) of Section 5.5 of the Illinois
7    Enterprise Zone Act have been satisfied or (ii) until the
8    time authorized in subsection (b-5) of the Illinois
9    Enterprise Zone Act for entities designated as High Impact
10    Businesses under subdivisions (a)(3)(B), (a)(3)(C), and
11    (a)(3)(D) of Section 5.5 of the Illinois Enterprise Zone
12    Act, and shall not be allowed to the extent that it would
13    reduce a taxpayer's liability for the tax imposed by
14    subsections (a) and (b) of this Section to below zero. The
15    credit applicable to such investments shall be taken in the
16    taxable year in which such investments have been completed.
17    The credit for additional investments beyond the minimum
18    investment by a designated high impact business authorized
19    under subdivision (a)(3)(A) of Section 5.5 of the Illinois
20    Enterprise Zone Act shall be available only in the taxable
21    year in which the property is placed in service and shall
22    not be allowed to the extent that it would reduce a
23    taxpayer's liability for the tax imposed by subsections (a)
24    and (b) of this Section to below zero. For tax years ending
25    on or after December 31, 1987, the credit shall be allowed
26    for the tax year in which the property is placed in

 

 

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1    service, or, if the amount of the credit exceeds the tax
2    liability for that year, whether it exceeds the original
3    liability or the liability as later amended, such excess
4    may be carried forward and applied to the tax liability of
5    the 5 taxable years following the excess credit year. The
6    credit shall be applied to the earliest year for which
7    there is a liability. If there is credit from more than one
8    tax year that is available to offset a liability, the
9    credit accruing first in time shall be applied first.
10        Changes made in this subdivision (h)(1) by Public Act
11    88-670 restore changes made by Public Act 85-1182 and
12    reflect existing law.
13        (2) The term qualified property means property which:
14            (A) is tangible, whether new or used, including
15        buildings and structural components of buildings;
16            (B) is depreciable pursuant to Section 167 of the
17        Internal Revenue Code, except that "3-year property"
18        as defined in Section 168(c)(2)(A) of that Code is not
19        eligible for the credit provided by this subsection
20        (h);
21            (C) is acquired by purchase as defined in Section
22        179(d) of the Internal Revenue Code; and
23            (D) is not eligible for the Enterprise Zone
24        Investment Credit provided by subsection (f) of this
25        Section.
26        (3) The basis of qualified property shall be the basis

 

 

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1    used to compute the depreciation deduction for federal
2    income tax purposes.
3        (4) If the basis of the property for federal income tax
4    depreciation purposes is increased after it has been placed
5    in service in a federally designated Foreign Trade Zone or
6    Sub-Zone located in Illinois by the taxpayer, the amount of
7    such increase shall be deemed property placed in service on
8    the date of such increase in basis.
9        (5) The term "placed in service" shall have the same
10    meaning as under Section 46 of the Internal Revenue Code.
11        (6) If during any taxable year ending on or before
12    December 31, 1996, any property ceases to be qualified
13    property in the hands of the taxpayer within 48 months
14    after being placed in service, or the situs of any
15    qualified property is moved outside Illinois within 48
16    months after being placed in service, the tax imposed under
17    subsections (a) and (b) of this Section for such taxable
18    year shall be increased. Such increase shall be determined
19    by (i) recomputing the investment credit which would have
20    been allowed for the year in which credit for such property
21    was originally allowed by eliminating such property from
22    such computation, and (ii) subtracting such recomputed
23    credit from the amount of credit previously allowed. For
24    the purposes of this paragraph (6), a reduction of the
25    basis of qualified property resulting from a
26    redetermination of the purchase price shall be deemed a

 

 

HB5641- 65 -LRB101 19114 HLH 70321 b

1    disposition of qualified property to the extent of such
2    reduction.
3        (7) Beginning with tax years ending after December 31,
4    1996, if a taxpayer qualifies for the credit under this
5    subsection (h) and thereby is granted a tax abatement and
6    the taxpayer relocates its entire facility in violation of
7    the explicit terms and length of the contract under Section
8    18-183 of the Property Tax Code, the tax imposed under
9    subsections (a) and (b) of this Section shall be increased
10    for the taxable year in which the taxpayer relocated its
11    facility by an amount equal to the amount of credit
12    received by the taxpayer under this subsection (h).
13    (h-5) High Impact Business construction constructions jobs
14credit. For taxable years beginning on or after January 1,
152021, there shall also be allowed a High Impact Business
16construction jobs credit against the tax imposed under
17subsections (a) and (b) of this Section as provided in
18subsections (i) and (j) of Section 5.5 of the Illinois
19Enterprise Zone Act.
20    The credit or credits may not reduce the taxpayer's
21liability to less than zero. If the amount of the credit or
22credits exceeds the taxpayer's liability, the excess may be
23carried forward and applied against the taxpayer's liability in
24succeeding calendar years in the manner provided under
25paragraph (4) of Section 211 of this Act. The credit or credits
26shall be applied to the earliest year for which there is a tax

 

 

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1liability. If there are credits from more than one taxable year
2that are available to offset a liability, the earlier credit
3shall be applied first.
4    For partners, shareholders of Subchapter S corporations,
5and owners of limited liability companies, if the liability
6company is treated as a partnership for the purposes of federal
7and State income taxation, there shall be allowed a credit
8under this Section to be determined in accordance with the
9determination of income and distributive share of income under
10Sections 702 and 704 and Subchapter S of the Internal Revenue
11Code.
12    The total aggregate amount of credits awarded under the
13Blue Collar Jobs Act (Article 20 of Public Act 101-9 this
14amendatory Act of the 101st General Assembly) shall not exceed
15$20,000,000 in any State fiscal year.
16    This subsection (h-5) is exempt from the provisions of
17Section 250.
18    (i) Credit for Personal Property Tax Replacement Income
19Tax. For tax years ending prior to December 31, 2003, a credit
20shall be allowed against the tax imposed by subsections (a) and
21(b) of this Section for the tax imposed by subsections (c) and
22(d) of this Section. This credit shall be computed by
23multiplying the tax imposed by subsections (c) and (d) of this
24Section by a fraction, the numerator of which is base income
25allocable to Illinois and the denominator of which is Illinois
26base income, and further multiplying the product by the tax

 

 

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1rate imposed by subsections (a) and (b) of this Section.
2    Any credit earned on or after December 31, 1986 under this
3subsection which is unused in the year the credit is computed
4because it exceeds the tax liability imposed by subsections (a)
5and (b) for that year (whether it exceeds the original
6liability or the liability as later amended) may be carried
7forward and applied to the tax liability imposed by subsections
8(a) and (b) of the 5 taxable years following the excess credit
9year, provided that no credit may be carried forward to any
10year ending on or after December 31, 2003. This credit shall be
11applied first to the earliest year for which there is a
12liability. If there is a credit under this subsection from more
13than one tax year that is available to offset a liability the
14earliest credit arising under this subsection shall be applied
15first.
16    If, during any taxable year ending on or after December 31,
171986, the tax imposed by subsections (c) and (d) of this
18Section for which a taxpayer has claimed a credit under this
19subsection (i) is reduced, the amount of credit for such tax
20shall also be reduced. Such reduction shall be determined by
21recomputing the credit to take into account the reduced tax
22imposed by subsections (c) and (d). If any portion of the
23reduced amount of credit has been carried to a different
24taxable year, an amended return shall be filed for such taxable
25year to reduce the amount of credit claimed.
26    (j) Training expense credit. Beginning with tax years

 

 

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1ending on or after December 31, 1986 and prior to December 31,
22003, a taxpayer shall be allowed a credit against the tax
3imposed by subsections (a) and (b) under this Section for all
4amounts paid or accrued, on behalf of all persons employed by
5the taxpayer in Illinois or Illinois residents employed outside
6of Illinois by a taxpayer, for educational or vocational
7training in semi-technical or technical fields or semi-skilled
8or skilled fields, which were deducted from gross income in the
9computation of taxable income. The credit against the tax
10imposed by subsections (a) and (b) shall be 1.6% of such
11training expenses. For partners, shareholders of subchapter S
12corporations, and owners of limited liability companies, if the
13liability company is treated as a partnership for purposes of
14federal and State income taxation, there shall be allowed a
15credit under this subsection (j) to be determined in accordance
16with the determination of income and distributive share of
17income under Sections 702 and 704 and subchapter S of the
18Internal Revenue Code.
19    Any credit allowed under this subsection which is unused in
20the year the credit is earned may be carried forward to each of
21the 5 taxable years following the year for which the credit is
22first computed until it is used. This credit shall be applied
23first to the earliest year for which there is a liability. If
24there is a credit under this subsection from more than one tax
25year that is available to offset a liability, the earliest
26credit arising under this subsection shall be applied first. No

 

 

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1carryforward credit may be claimed in any tax year ending on or
2after December 31, 2003.
3    (k) Research and development credit. For tax years ending
4after July 1, 1990 and prior to December 31, 2003, and
5beginning again for tax years ending on or after December 31,
62004, and ending prior to January 1, 2027, a taxpayer shall be
7allowed a credit against the tax imposed by subsections (a) and
8(b) of this Section for increasing research activities in this
9State. The credit allowed against the tax imposed by
10subsections (a) and (b) shall be equal to 6 1/2% of the
11qualifying expenditures for increasing research activities in
12this State. For partners, shareholders of subchapter S
13corporations, and owners of limited liability companies, if the
14liability company is treated as a partnership for purposes of
15federal and State income taxation, there shall be allowed a
16credit under this subsection to be determined in accordance
17with the determination of income and distributive share of
18income under Sections 702 and 704 and subchapter S of the
19Internal Revenue Code.
20    For purposes of this subsection, "qualifying expenditures"
21means the qualifying expenditures as defined for the federal
22credit for increasing research activities which would be
23allowable under Section 41 of the Internal Revenue Code and
24which are conducted in this State, "qualifying expenditures for
25increasing research activities in this State" means the excess
26of qualifying expenditures for the taxable year in which

 

 

HB5641- 70 -LRB101 19114 HLH 70321 b

1incurred over qualifying expenditures for the base period,
2"qualifying expenditures for the base period" means the average
3of the qualifying expenditures for each year in the base
4period, and "base period" means the 3 taxable years immediately
5preceding the taxable year for which the determination is being
6made.
7    Any credit in excess of the tax liability for the taxable
8year may be carried forward. A taxpayer may elect to have the
9unused credit shown on its final completed return carried over
10as a credit against the tax liability for the following 5
11taxable years or until it has been fully used, whichever occurs
12first; provided that no credit earned in a tax year ending
13prior to December 31, 2003 may be carried forward to any year
14ending on or after December 31, 2003.
15    If an unused credit is carried forward to a given year from
162 or more earlier years, that credit arising in the earliest
17year will be applied first against the tax liability for the
18given year. If a tax liability for the given year still
19remains, the credit from the next earliest year will then be
20applied, and so on, until all credits have been used or no tax
21liability for the given year remains. Any remaining unused
22credit or credits then will be carried forward to the next
23following year in which a tax liability is incurred, except
24that no credit can be carried forward to a year which is more
25than 5 years after the year in which the expense for which the
26credit is given was incurred.

 

 

HB5641- 71 -LRB101 19114 HLH 70321 b

1    No inference shall be drawn from Public Act 91-644 this
2amendatory Act of the 91st General Assembly in construing this
3Section for taxable years beginning before January 1, 1999.
4    It is the intent of the General Assembly that the research
5and development credit under this subsection (k) shall apply
6continuously for all tax years ending on or after December 31,
72004 and ending prior to January 1, 2027, including, but not
8limited to, the period beginning on January 1, 2016 and ending
9on July 6, 2017 (the effective date of Public Act 100-22) this
10amendatory Act of the 100th General Assembly. All actions taken
11in reliance on the continuation of the credit under this
12subsection (k) by any taxpayer are hereby validated.
13    (l) Environmental Remediation Tax Credit.
14        (i) For tax years ending after December 31, 1997 and on
15    or before December 31, 2001, a taxpayer shall be allowed a
16    credit against the tax imposed by subsections (a) and (b)
17    of this Section for certain amounts paid for unreimbursed
18    eligible remediation costs, as specified in this
19    subsection. For purposes of this Section, "unreimbursed
20    eligible remediation costs" means costs approved by the
21    Illinois Environmental Protection Agency ("Agency") under
22    Section 58.14 of the Environmental Protection Act that were
23    paid in performing environmental remediation at a site for
24    which a No Further Remediation Letter was issued by the
25    Agency and recorded under Section 58.10 of the
26    Environmental Protection Act. The credit must be claimed

 

 

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

 

 

HB5641- 73 -LRB101 19114 HLH 70321 b

1    Department of Commerce and Economic Opportunity). The
2    total credit allowed shall not exceed $40,000 per year with
3    a maximum total of $150,000 per site. For partners and
4    shareholders of subchapter S corporations, there shall be
5    allowed a credit under this subsection to be determined in
6    accordance with the determination of income and
7    distributive share of income under Sections 702 and 704 and
8    subchapter S of the Internal Revenue Code.
9        (ii) A credit allowed under this subsection that is
10    unused in the year the credit is earned may be carried
11    forward to each of the 5 taxable years following the year
12    for which the credit is first earned until it is used. The
13    term "unused credit" does not include any amounts of
14    unreimbursed eligible remediation costs in excess of the
15    maximum credit per site authorized under paragraph (i).
16    This credit shall be applied first to the earliest year for
17    which there is a liability. If there is a credit under this
18    subsection from more than one tax year that is available to
19    offset a liability, the earliest credit arising under this
20    subsection shall be applied first. A credit allowed under
21    this subsection may be sold to a buyer as part of a sale of
22    all or part of the remediation site for which the credit
23    was granted. The purchaser of a remediation site and the
24    tax credit shall succeed to the unused credit and remaining
25    carry-forward period of the seller. To perfect the
26    transfer, the assignor shall record the transfer in the

 

 

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1    chain of title for the site and provide written notice to
2    the Director of the Illinois Department of Revenue of the
3    assignor's intent to sell the remediation site and the
4    amount of the tax credit to be transferred as a portion of
5    the sale. In no event may a credit be transferred to any
6    taxpayer if the taxpayer or a related party would not be
7    eligible under the provisions of subsection (i).
8        (iii) For purposes of this Section, the term "site"
9    shall have the same meaning as under Section 58.2 of the
10    Environmental Protection Act.
11    (m) Education expense credit. Beginning with tax years
12ending after December 31, 1999, a taxpayer who is the custodian
13of one or more qualifying pupils shall be allowed a credit
14against the tax imposed by subsections (a) and (b) of this
15Section for qualified education expenses incurred on behalf of
16the qualifying pupils. The credit shall be equal to 25% of
17qualified education expenses, but in no event may the total
18credit under this subsection claimed by a family that is the
19custodian of qualifying pupils exceed (i) $500 for tax years
20ending prior to December 31, 2017, and (ii) $750 for tax years
21ending on or after December 31, 2017. In no event shall a
22credit under this subsection reduce the taxpayer's liability
23under this Act to less than zero. Notwithstanding any other
24provision of law, for taxable years beginning on or after
25January 1, 2017, no taxpayer may claim a credit under this
26subsection (m) if the taxpayer's adjusted gross income for the

 

 

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1taxable year exceeds (i) $500,000, in the case of spouses
2filing a joint federal tax return or (ii) $250,000, in the case
3of all other taxpayers. This subsection is exempt from the
4provisions of Section 250 of this Act.
5    For purposes of this subsection:
6    "Qualifying pupils" means individuals who (i) are
7residents of the State of Illinois, (ii) are under the age of
821 at the close of the school year for which a credit is
9sought, and (iii) during the school year for which a credit is
10sought were full-time pupils enrolled in a kindergarten through
11twelfth grade education program at any school, as defined in
12this subsection.
13    "Qualified education expense" means the amount incurred on
14behalf of a qualifying pupil in excess of $250 for tuition,
15book fees, and lab fees at the school in which the pupil is
16enrolled during the regular school year.
17    "School" means any public or nonpublic elementary or
18secondary school in Illinois that is in compliance with Title
19VI of the Civil Rights Act of 1964 and attendance at which
20satisfies the requirements of Section 26-1 of the School Code,
21except that nothing shall be construed to require a child to
22attend any particular public or nonpublic school to qualify for
23the credit under this Section.
24    "Custodian" means, with respect to qualifying pupils, an
25Illinois resident who is a parent, the parents, a legal
26guardian, or the legal guardians of the qualifying pupils.

 

 

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1    (n) River Edge Redevelopment Zone site remediation tax
2credit.
3        (i) For tax years ending on or after December 31, 2006,
4    a taxpayer shall be allowed a credit against the tax
5    imposed by subsections (a) and (b) of this Section for
6    certain amounts paid for unreimbursed eligible remediation
7    costs, as specified in this subsection. For purposes of
8    this Section, "unreimbursed eligible remediation costs"
9    means costs approved by the Illinois Environmental
10    Protection Agency ("Agency") under Section 58.14a of the
11    Environmental Protection Act that were paid in performing
12    environmental remediation at a site within a River Edge
13    Redevelopment Zone for which a No Further Remediation
14    Letter was issued by the Agency and recorded under Section
15    58.10 of the Environmental Protection Act. The credit must
16    be claimed for the taxable year in which Agency approval of
17    the eligible remediation costs is granted. The credit is
18    not available to any taxpayer if the taxpayer or any
19    related party caused or contributed to, in any material
20    respect, a release of regulated substances on, in, or under
21    the site that was identified and addressed by the remedial
22    action pursuant to the Site Remediation Program of the
23    Environmental Protection Act. Determinations as to credit
24    availability for purposes of this Section shall be made
25    consistent with rules adopted by the Pollution Control
26    Board pursuant to the Illinois Administrative Procedure

 

 

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1    Act for the administration and enforcement of Section 58.9
2    of the Environmental Protection Act. For purposes of this
3    Section, "taxpayer" includes a person whose tax attributes
4    the taxpayer has succeeded to under Section 381 of the
5    Internal Revenue Code and "related party" includes the
6    persons disallowed a deduction for losses by paragraphs
7    (b), (c), and (f)(1) of Section 267 of the Internal Revenue
8    Code by virtue of being a related taxpayer, as well as any
9    of its partners. The credit allowed against the tax imposed
10    by subsections (a) and (b) shall be equal to 25% of the
11    unreimbursed eligible remediation costs in excess of
12    $100,000 per site.
13        (ii) A credit allowed under this subsection that is
14    unused in the year the credit is earned may be carried
15    forward to each of the 5 taxable years following the year
16    for which the credit is first earned until it is used. This
17    credit shall be applied first to the earliest year for
18    which there is a liability. If there is a credit under this
19    subsection from more than one tax year that is available to
20    offset a liability, the earliest credit arising under this
21    subsection shall be applied first. A credit allowed under
22    this subsection may be sold to a buyer as part of a sale of
23    all or part of the remediation site for which the credit
24    was granted. The purchaser of a remediation site and the
25    tax credit shall succeed to the unused credit and remaining
26    carry-forward period of the seller. To perfect the

 

 

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1    transfer, the assignor shall record the transfer in the
2    chain of title for the site and provide written notice to
3    the Director of the Illinois Department of Revenue of the
4    assignor's intent to sell the remediation site and the
5    amount of the tax credit to be transferred as a portion of
6    the sale. In no event may a credit be transferred to any
7    taxpayer if the taxpayer or a related party would not be
8    eligible under the provisions of subsection (i).
9        (iii) For purposes of this Section, the term "site"
10    shall have the same meaning as under Section 58.2 of the
11    Environmental Protection Act.
12    (o) For each of taxable years during the Compassionate Use
13of Medical Cannabis Program, a surcharge is imposed on all
14taxpayers on income arising from the sale or exchange of
15capital assets, depreciable business property, real property
16used in the trade or business, and Section 197 intangibles of
17an organization registrant under the Compassionate Use of
18Medical Cannabis Program Act. The amount of the surcharge is
19equal to the amount of federal income tax liability for the
20taxable year attributable to those sales and exchanges. The
21surcharge imposed does not apply if:
22        (1) the medical cannabis cultivation center
23    registration, medical cannabis dispensary registration, or
24    the property of a registration is transferred as a result
25    of any of the following:
26            (A) bankruptcy, a receivership, or a debt

 

 

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1        adjustment initiated by or against the initial
2        registration or the substantial owners of the initial
3        registration;
4            (B) cancellation, revocation, or termination of
5        any registration by the Illinois Department of Public
6        Health;
7            (C) a determination by the Illinois Department of
8        Public Health that transfer of the registration is in
9        the best interests of Illinois qualifying patients as
10        defined by the Compassionate Use of Medical Cannabis
11        Program Act;
12            (D) the death of an owner of the equity interest in
13        a registrant;
14            (E) the acquisition of a controlling interest in
15        the stock or substantially all of the assets of a
16        publicly traded company;
17            (F) a transfer by a parent company to a wholly
18        owned subsidiary; or
19            (G) the transfer or sale to or by one person to
20        another person where both persons were initial owners
21        of the registration when the registration was issued;
22        or
23        (2) the cannabis cultivation center registration,
24    medical cannabis dispensary registration, or the
25    controlling interest in a registrant's property is
26    transferred in a transaction to lineal descendants in which

 

 

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1    no gain or loss is recognized or as a result of a
2    transaction in accordance with Section 351 of the Internal
3    Revenue Code in which no gain or loss is recognized.
4    (p) For tax years ending after July 1, 2020, a financial
5institution shall be allowed a credit against the tax imposed
6by subsections (a) and (b) of this Section in an amount equal
7to the aggregate amount of all fees, penalties, and any other
8income derived during the taxable year from each commercial
9loan transaction that is (i) originated by the financial
10institution, (ii) made to a person residing or located in this
11State, and (iii) made primarily for an agricultural project in
12this State.
13    For partners, shareholders of subchapter S corporations,
14and owners of limited liability companies, if the liability
15company is treated as a partnership for purposes of federal and
16State income taxation, there shall be allowed a credit under
17this subsection to be determined in accordance with the
18determination of income and distributive share of income under
19Sections 702 and 704 and subchapter S of the Internal Revenue
20Code.
21    As used in this subsection, "financial institution" means a
22partnership, association, limited liability company, or
23corporation doing business under and as permitted by any law of
24this State or of the United States relating to banks, savings
25and loan associations, or savings banks.
26    This subsection is exempt from the provisions of Section

 

 

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1250.
2(Source: P.A. 100-22, eff. 7-6-17; 101-8, see Section 99 for
3effective date; 101-9, eff. 6-5-19; 101-31, eff. 6-28-19;
4101-207, eff. 8-2-19; 101-363, eff. 8-9-19; revised 9-17-19.)
 
5    Section 95. No acceleration or delay. Where this Act makes
6changes in a statute that is represented in this Act by text
7that is not yet or no longer in effect (for example, a Section
8represented by multiple versions), the use of that text does
9not accelerate or delay the taking effect of (i) the changes
10made by this Act or (ii) provisions derived from any other
11Public Act.
 
12    Section 99. Effective date. This Act takes effect upon
13becoming law.