103RD GENERAL ASSEMBLY
State of Illinois
2023 and 2024
HB3914

 

Introduced 2/17/2023, by Rep. Justin Slaughter

 

SYNOPSIS AS INTRODUCED:
 
35 ILCS 5/203  from Ch. 120, par. 2-203
70 ILCS 200/245-12
70 ILCS 750/25
70 ILCS 1605/30
70 ILCS 3610/5.01  from Ch. 111 2/3, par. 355.01
70 ILCS 3720/4  from Ch. 111 2/3, par. 254
410 ILCS 705/20-50
410 ILCS 705/60-10
410 ILCS 705/65-10

    Amends the Illinois Income Tax Act. Creates a deduction in an amount equal to the deductions and credits that were disallowed under Section 280E of the Internal Revenue Code for the taxable year. Amends the Civic Center Code, the Flood Prevention District Act, the Metro-East Park and Recreation District Act, the Local Mass Transit District Act, and the Water Commission Act of 1985 to provide that those special districts may not levy a tax upon the cultivation and processing of adult use cannabis. Effective immediately.


LRB103 27153 HLH 53522 b

 

 

A BILL FOR

 

HB3914LRB103 27153 HLH 53522 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 203 as follows:
 
6    (35 ILCS 5/203)  (from Ch. 120, par. 2-203)
7    Sec. 203. Base income defined.
8    (a) Individuals.
9        (1) In general. In the case of an individual, base
10    income means an amount equal to the taxpayer's adjusted
11    gross income for the taxable year as modified by paragraph
12    (2).
13        (2) Modifications. The adjusted gross income referred
14    to in paragraph (1) shall be modified by adding thereto
15    the sum of the following amounts:
16            (A) An amount equal to all amounts paid or accrued
17        to the taxpayer as interest or dividends during the
18        taxable year to the extent excluded from gross income
19        in the computation of adjusted gross income, except
20        stock dividends of qualified public utilities
21        described in Section 305(e) of the Internal Revenue
22        Code;
23            (B) An amount equal to the amount of tax imposed by

 

 

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1        this Act to the extent deducted from gross income in
2        the computation of adjusted gross income for the
3        taxable year;
4            (C) An amount equal to the amount received during
5        the taxable year as a recovery or refund of real
6        property taxes paid with respect to the taxpayer's
7        principal residence under the Revenue Act of 1939 and
8        for which a deduction was previously taken under
9        subparagraph (L) of this paragraph (2) prior to July
10        1, 1991, the retrospective application date of Article
11        4 of Public Act 87-17. In the case of multi-unit or
12        multi-use structures and farm dwellings, the taxes on
13        the taxpayer's principal residence shall be that
14        portion of the total taxes for the entire property
15        which is attributable to such principal residence;
16            (D) An amount equal to the amount of the capital
17        gain deduction allowable under the Internal Revenue
18        Code, to the extent deducted from gross income in the
19        computation of adjusted gross income;
20            (D-5) An amount, to the extent not included in
21        adjusted gross income, equal to the amount of money
22        withdrawn by the taxpayer in the taxable year from a
23        medical care savings account and the interest earned
24        on the account in the taxable year of a withdrawal
25        pursuant to subsection (b) of Section 20 of the
26        Medical Care Savings Account Act or subsection (b) of

 

 

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1        Section 20 of the Medical Care Savings Account Act of
2        2000;
3            (D-10) For taxable years ending after December 31,
4        1997, an amount equal to any eligible remediation
5        costs that the individual deducted in computing
6        adjusted gross income and for which the individual
7        claims a credit under subsection (l) of Section 201;
8            (D-15) For taxable years 2001 and thereafter, an
9        amount equal to the bonus depreciation deduction taken
10        on the taxpayer's federal income tax return for the
11        taxable year under subsection (k) of Section 168 of
12        the Internal Revenue Code;
13            (D-16) If the taxpayer sells, transfers, abandons,
14        or otherwise disposes of property for which the
15        taxpayer was required in any taxable year to make an
16        addition modification under subparagraph (D-15), then
17        an amount equal to the aggregate amount of the
18        deductions taken in all taxable years under
19        subparagraph (Z) with respect to that property.
20            If the taxpayer continues to own property through
21        the last day of the last tax year for which a
22        subtraction is allowed with respect to that property
23        under subparagraph (Z) and for which the taxpayer was
24        allowed in any taxable year to make a subtraction
25        modification under subparagraph (Z), then an amount
26        equal to that subtraction modification.

 

 

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1            The taxpayer is required to make the addition
2        modification under this subparagraph only once with
3        respect to any one piece of property;
4            (D-17) An amount equal to the amount otherwise
5        allowed as a deduction in computing base income for
6        interest paid, accrued, or incurred, directly or
7        indirectly, (i) for taxable years ending on or after
8        December 31, 2004, to a foreign person who would be a
9        member of the same unitary business group but for the
10        fact that foreign person's business activity outside
11        the United States is 80% or more of the foreign
12        person's total business activity and (ii) for taxable
13        years ending on or after December 31, 2008, to a person
14        who would be a member of the same unitary business
15        group but for the fact that the person is prohibited
16        under Section 1501(a)(27) from being included in the
17        unitary business group because he or she is ordinarily
18        required to apportion business income under different
19        subsections of Section 304. The addition modification
20        required by this subparagraph shall be reduced to the
21        extent that dividends were included in base income of
22        the unitary group for the same taxable year and
23        received by the taxpayer or by a member of the
24        taxpayer's unitary business group (including amounts
25        included in gross income under Sections 951 through
26        964 of the Internal Revenue Code and amounts included

 

 

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1        in gross income under Section 78 of the Internal
2        Revenue Code) with respect to the stock of the same
3        person to whom the interest was paid, accrued, or
4        incurred.
5            This paragraph shall not apply to the following:
6                (i) an item of interest paid, accrued, or
7            incurred, directly or indirectly, to a person who
8            is subject in a foreign country or state, other
9            than a state which requires mandatory unitary
10            reporting, to a tax on or measured by net income
11            with respect to such interest; or
12                (ii) an item of interest paid, accrued, or
13            incurred, directly or indirectly, to a person if
14            the taxpayer can establish, based on a
15            preponderance of the evidence, both of the
16            following:
17                    (a) the person, during the same taxable
18                year, paid, accrued, or incurred, the interest
19                to a person that is not a related member, and
20                    (b) the transaction giving rise to the
21                interest expense between the taxpayer and the
22                person did not have as a principal purpose the
23                avoidance of Illinois income tax, and is paid
24                pursuant to a contract or agreement that
25                reflects an arm's-length interest rate and
26                terms; or

 

 

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1                (iii) the taxpayer can establish, based on
2            clear and convincing evidence, that the interest
3            paid, accrued, or incurred relates to a contract
4            or agreement entered into at arm's-length rates
5            and terms and the principal purpose for the
6            payment is not federal or Illinois tax avoidance;
7            or
8                (iv) an item of interest paid, accrued, or
9            incurred, directly or indirectly, to a person if
10            the taxpayer establishes by clear and convincing
11            evidence that the adjustments are unreasonable; or
12            if the taxpayer and the Director agree in writing
13            to the application or use of an alternative method
14            of apportionment under Section 304(f).
15                Nothing in this subsection shall preclude the
16            Director from making any other adjustment
17            otherwise allowed under Section 404 of this Act
18            for any tax year beginning after the effective
19            date of this amendment provided such adjustment is
20            made pursuant to regulation adopted by the
21            Department and such regulations provide methods
22            and standards by which the Department will utilize
23            its authority under Section 404 of this Act;
24            (D-18) An amount equal to the amount of intangible
25        expenses and costs otherwise allowed as a deduction in
26        computing base income, and that were paid, accrued, or

 

 

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1        incurred, directly or indirectly, (i) for taxable
2        years ending on or after December 31, 2004, to a
3        foreign person who would be a member of the same
4        unitary business group but for the fact that the
5        foreign person's business activity outside the United
6        States is 80% or more of that person's total business
7        activity and (ii) for taxable years ending on or after
8        December 31, 2008, to a person who would be a member of
9        the same unitary business group but for the fact that
10        the person is prohibited under Section 1501(a)(27)
11        from being included in the unitary business group
12        because he or she is ordinarily required to apportion
13        business income under different subsections of Section
14        304. The addition modification required by this
15        subparagraph shall be reduced to the extent that
16        dividends were included in base income of the unitary
17        group for the same taxable year and received by the
18        taxpayer or by a member of the taxpayer's unitary
19        business group (including amounts included in gross
20        income under Sections 951 through 964 of the Internal
21        Revenue Code and amounts included in gross income
22        under Section 78 of the Internal Revenue Code) with
23        respect to the stock of the same person to whom the
24        intangible expenses and costs were directly or
25        indirectly paid, incurred, or accrued. The preceding
26        sentence does not apply to the extent that the same

 

 

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1        dividends caused a reduction to the addition
2        modification required under Section 203(a)(2)(D-17) of
3        this Act. As used in this subparagraph, the term
4        "intangible expenses and costs" includes (1) expenses,
5        losses, and costs for, or related to, the direct or
6        indirect acquisition, use, maintenance or management,
7        ownership, sale, exchange, or any other disposition of
8        intangible property; (2) losses incurred, directly or
9        indirectly, from factoring transactions or discounting
10        transactions; (3) royalty, patent, technical, and
11        copyright fees; (4) licensing fees; and (5) other
12        similar expenses and costs. For purposes of this
13        subparagraph, "intangible property" includes patents,
14        patent applications, trade names, trademarks, service
15        marks, copyrights, mask works, trade secrets, and
16        similar types of intangible assets.
17            This paragraph shall not apply to the following:
18                (i) any item of intangible expenses or costs
19            paid, accrued, or incurred, directly or
20            indirectly, from a transaction with a person who
21            is subject in a foreign country or state, other
22            than a state which requires mandatory unitary
23            reporting, to a tax on or measured by net income
24            with respect to such item; or
25                (ii) any item of intangible expense or cost
26            paid, accrued, or incurred, directly or

 

 

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1            indirectly, if the taxpayer can establish, based
2            on a preponderance of the evidence, both of the
3            following:
4                    (a) the person during the same taxable
5                year paid, accrued, or incurred, the
6                intangible expense or cost to a person that is
7                not a related member, and
8                    (b) the transaction giving rise to the
9                intangible expense or cost between the
10                taxpayer and the person did not have as a
11                principal purpose the avoidance of Illinois
12                income tax, and is paid pursuant to a contract
13                or agreement that reflects arm's-length terms;
14                or
15                (iii) any item of intangible expense or cost
16            paid, accrued, or incurred, directly or
17            indirectly, from a transaction with a person if
18            the taxpayer establishes by clear and convincing
19            evidence, that the adjustments are unreasonable;
20            or if the taxpayer and the Director agree in
21            writing to the application or use of an
22            alternative method of apportionment under Section
23            304(f);
24                Nothing in this subsection shall preclude the
25            Director from making any other adjustment
26            otherwise allowed under Section 404 of this Act

 

 

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1            for any tax year beginning after the effective
2            date of this amendment provided such adjustment is
3            made pursuant to regulation adopted by the
4            Department and such regulations provide methods
5            and standards by which the Department will utilize
6            its authority under Section 404 of this Act;
7            (D-19) For taxable years ending on or after
8        December 31, 2008, an amount equal to the amount of
9        insurance premium expenses and costs otherwise allowed
10        as a deduction in computing base income, and that were
11        paid, accrued, or incurred, directly or indirectly, to
12        a person who would be a member of the same unitary
13        business group but for the fact that the person is
14        prohibited under Section 1501(a)(27) from being
15        included in the unitary business group because he or
16        she is ordinarily required to apportion business
17        income under different subsections of Section 304. The
18        addition modification required by this subparagraph
19        shall be reduced to the extent that dividends were
20        included in base income of the unitary group for the
21        same taxable year and received by the taxpayer or by a
22        member of the taxpayer's unitary business group
23        (including amounts included in gross income under
24        Sections 951 through 964 of the Internal Revenue Code
25        and amounts included in gross income under Section 78
26        of the Internal Revenue Code) with respect to the

 

 

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1        stock of the same person to whom the premiums and costs
2        were directly or indirectly paid, incurred, or
3        accrued. The preceding sentence does not apply to the
4        extent that the same dividends caused a reduction to
5        the addition modification required under Section
6        203(a)(2)(D-17) or Section 203(a)(2)(D-18) of this
7        Act;
8            (D-20) For taxable years beginning on or after
9        January 1, 2002 and ending on or before December 31,
10        2006, in the case of a distribution from a qualified
11        tuition program under Section 529 of the Internal
12        Revenue Code, other than (i) a distribution from a
13        College Savings Pool created under Section 16.5 of the
14        State Treasurer Act or (ii) a distribution from the
15        Illinois Prepaid Tuition Trust Fund, an amount equal
16        to the amount excluded from gross income under Section
17        529(c)(3)(B). For taxable years beginning on or after
18        January 1, 2007, in the case of a distribution from a
19        qualified tuition program under Section 529 of the
20        Internal Revenue Code, other than (i) a distribution
21        from a College Savings Pool created under Section 16.5
22        of the State Treasurer Act, (ii) a distribution from
23        the Illinois Prepaid Tuition Trust Fund, or (iii) a
24        distribution from a qualified tuition program under
25        Section 529 of the Internal Revenue Code that (I)
26        adopts and determines that its offering materials

 

 

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1        comply with the College Savings Plans Network's
2        disclosure principles and (II) has made reasonable
3        efforts to inform in-state residents of the existence
4        of in-state qualified tuition programs by informing
5        Illinois residents directly and, where applicable, to
6        inform financial intermediaries distributing the
7        program to inform in-state residents of the existence
8        of in-state qualified tuition programs at least
9        annually, an amount equal to the amount excluded from
10        gross income under Section 529(c)(3)(B).
11            For the purposes of this subparagraph (D-20), a
12        qualified tuition program has made reasonable efforts
13        if it makes disclosures (which may use the term
14        "in-state program" or "in-state plan" and need not
15        specifically refer to Illinois or its qualified
16        programs by name) (i) directly to prospective
17        participants in its offering materials or makes a
18        public disclosure, such as a website posting; and (ii)
19        where applicable, to intermediaries selling the
20        out-of-state program in the same manner that the
21        out-of-state program distributes its offering
22        materials;
23            (D-20.5) For taxable years beginning on or after
24        January 1, 2018, in the case of a distribution from a
25        qualified ABLE program under Section 529A of the
26        Internal Revenue Code, other than a distribution from

 

 

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1        a qualified ABLE program created under Section 16.6 of
2        the State Treasurer Act, an amount equal to the amount
3        excluded from gross income under Section 529A(c)(1)(B)
4        of the Internal Revenue Code;
5            (D-21) For taxable years beginning on or after
6        January 1, 2007, in the case of transfer of moneys from
7        a qualified tuition program under Section 529 of the
8        Internal Revenue Code that is administered by the
9        State to an out-of-state program, an amount equal to
10        the amount of moneys previously deducted from base
11        income under subsection (a)(2)(Y) of this Section;
12            (D-21.5) For taxable years beginning on or after
13        January 1, 2018, in the case of the transfer of moneys
14        from a qualified tuition program under Section 529 or
15        a qualified ABLE program under Section 529A of the
16        Internal Revenue Code that is administered by this
17        State to an ABLE account established under an
18        out-of-state ABLE account program, an amount equal to
19        the contribution component of the transferred amount
20        that was previously deducted from base income under
21        subsection (a)(2)(Y) or subsection (a)(2)(HH) of this
22        Section;
23            (D-22) For taxable years beginning on or after
24        January 1, 2009, and prior to January 1, 2018, in the
25        case of a nonqualified withdrawal or refund of moneys
26        from a qualified tuition program under Section 529 of

 

 

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1        the Internal Revenue Code administered by the State
2        that is not used for qualified expenses at an eligible
3        education institution, an amount equal to the
4        contribution component of the nonqualified withdrawal
5        or refund that was previously deducted from base
6        income under subsection (a)(2)(y) of this Section,
7        provided that the withdrawal or refund did not result
8        from the beneficiary's death or disability. For
9        taxable years beginning on or after January 1, 2018:
10        (1) in the case of a nonqualified withdrawal or
11        refund, as defined under Section 16.5 of the State
12        Treasurer Act, of moneys from a qualified tuition
13        program under Section 529 of the Internal Revenue Code
14        administered by the State, an amount equal to the
15        contribution component of the nonqualified withdrawal
16        or refund that was previously deducted from base
17        income under subsection (a)(2)(Y) of this Section, and
18        (2) in the case of a nonqualified withdrawal or refund
19        from a qualified ABLE program under Section 529A of
20        the Internal Revenue Code administered by the State
21        that is not used for qualified disability expenses, an
22        amount equal to the contribution component of the
23        nonqualified withdrawal or refund that was previously
24        deducted from base income under subsection (a)(2)(HH)
25        of this Section;
26            (D-23) An amount equal to the credit allowable to

 

 

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1        the taxpayer under Section 218(a) of this Act,
2        determined without regard to Section 218(c) of this
3        Act;
4            (D-24) For taxable years ending on or after
5        December 31, 2017, an amount equal to the deduction
6        allowed under Section 199 of the Internal Revenue Code
7        for the taxable year;
8            (D-25) In the case of a resident, an amount equal
9        to the amount of tax for which a credit is allowed
10        pursuant to Section 201(p)(7) of this Act;
11    and by deducting from the total so obtained the sum of the
12    following amounts:
13            (E) For taxable years ending before December 31,
14        2001, any amount included in such total in respect of
15        any compensation (including but not limited to any
16        compensation paid or accrued to a serviceman while a
17        prisoner of war or missing in action) paid to a
18        resident by reason of being on active duty in the Armed
19        Forces of the United States and in respect of any
20        compensation paid or accrued to a resident who as a
21        governmental employee was a prisoner of war or missing
22        in action, and in respect of any compensation paid to a
23        resident in 1971 or thereafter for annual training
24        performed pursuant to Sections 502 and 503, Title 32,
25        United States Code as a member of the Illinois
26        National Guard or, beginning with taxable years ending

 

 

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1        on or after December 31, 2007, the National Guard of
2        any other state. For taxable years ending on or after
3        December 31, 2001, any amount included in such total
4        in respect of any compensation (including but not
5        limited to any compensation paid or accrued to a
6        serviceman while a prisoner of war or missing in
7        action) paid to a resident by reason of being a member
8        of any component of the Armed Forces of the United
9        States and in respect of any compensation paid or
10        accrued to a resident who as a governmental employee
11        was a prisoner of war or missing in action, and in
12        respect of any compensation paid to a resident in 2001
13        or thereafter by reason of being a member of the
14        Illinois National Guard or, beginning with taxable
15        years ending on or after December 31, 2007, the
16        National Guard of any other state. The provisions of
17        this subparagraph (E) are exempt from the provisions
18        of Section 250;
19            (F) An amount equal to all amounts included in
20        such total pursuant to the provisions of Sections
21        402(a), 402(c), 403(a), 403(b), 406(a), 407(a), and
22        408 of the Internal Revenue Code, or included in such
23        total as distributions under the provisions of any
24        retirement or disability plan for employees of any
25        governmental agency or unit, or retirement payments to
26        retired partners, which payments are excluded in

 

 

HB3914- 17 -LRB103 27153 HLH 53522 b

1        computing net earnings from self employment by Section
2        1402 of the Internal Revenue Code and regulations
3        adopted pursuant thereto;
4            (G) The valuation limitation amount;
5            (H) An amount equal to the amount of any tax
6        imposed by this Act which was refunded to the taxpayer
7        and included in such total for the taxable year;
8            (I) An amount equal to all amounts included in
9        such total pursuant to the provisions of Section 111
10        of the Internal Revenue Code as a recovery of items
11        previously deducted from adjusted gross income in the
12        computation of taxable income;
13            (J) An amount equal to those dividends included in
14        such total which were paid by a corporation which
15        conducts business operations in a River Edge
16        Redevelopment Zone or zones created under the River
17        Edge Redevelopment Zone Act, and conducts
18        substantially all of its operations in a River Edge
19        Redevelopment Zone or zones. This subparagraph (J) is
20        exempt from the provisions of Section 250;
21            (K) An amount equal to those dividends included in
22        such total that were paid by a corporation that
23        conducts business operations in a federally designated
24        Foreign Trade Zone or Sub-Zone and that is designated
25        a High Impact Business located in Illinois; provided
26        that dividends eligible for the deduction provided in

 

 

HB3914- 18 -LRB103 27153 HLH 53522 b

1        subparagraph (J) of paragraph (2) of this subsection
2        shall not be eligible for the deduction provided under
3        this subparagraph (K);
4            (L) For taxable years ending after December 31,
5        1983, an amount equal to all social security benefits
6        and railroad retirement benefits included in such
7        total pursuant to Sections 72(r) and 86 of the
8        Internal Revenue Code;
9            (M) With the exception of any amounts subtracted
10        under subparagraph (N), an amount equal to the sum of
11        all amounts disallowed as deductions by (i) Sections
12        171(a)(2) and 265(a)(2) of the Internal Revenue Code,
13        and all amounts of expenses allocable to interest and
14        disallowed as deductions by Section 265(a)(1) of the
15        Internal Revenue Code; and (ii) for taxable years
16        ending on or after August 13, 1999, Sections
17        171(a)(2), 265, 280C, and 832(b)(5)(B)(i) of the
18        Internal Revenue Code, plus, for taxable years ending
19        on or after December 31, 2011, Section 45G(e)(3) of
20        the Internal Revenue Code and, for taxable years
21        ending on or after December 31, 2008, any amount
22        included in gross income under Section 87 of the
23        Internal Revenue Code; the provisions of this
24        subparagraph are exempt from the provisions of Section
25        250;
26            (N) An amount equal to all amounts included in

 

 

HB3914- 19 -LRB103 27153 HLH 53522 b

1        such total which are exempt from taxation by this
2        State either by reason of its statutes or Constitution
3        or by reason of the Constitution, treaties or statutes
4        of the United States; provided that, in the case of any
5        statute of this State that exempts income derived from
6        bonds or other obligations from the tax imposed under
7        this Act, the amount exempted shall be the interest
8        net of bond premium amortization;
9            (O) An amount equal to any contribution made to a
10        job training project established pursuant to the Tax
11        Increment Allocation Redevelopment Act;
12            (P) An amount equal to the amount of the deduction
13        used to compute the federal income tax credit for
14        restoration of substantial amounts held under claim of
15        right for the taxable year pursuant to Section 1341 of
16        the Internal Revenue Code or of any itemized deduction
17        taken from adjusted gross income in the computation of
18        taxable income for restoration of substantial amounts
19        held under claim of right for the taxable year;
20            (Q) An amount equal to any amounts included in
21        such total, received by the taxpayer as an
22        acceleration in the payment of life, endowment or
23        annuity benefits in advance of the time they would
24        otherwise be payable as an indemnity for a terminal
25        illness;
26            (R) An amount equal to the amount of any federal or

 

 

HB3914- 20 -LRB103 27153 HLH 53522 b

1        State bonus paid to veterans of the Persian Gulf War;
2            (S) An amount, to the extent included in adjusted
3        gross income, equal to the amount of a contribution
4        made in the taxable year on behalf of the taxpayer to a
5        medical care savings account established under the
6        Medical Care Savings Account Act or the Medical Care
7        Savings Account Act of 2000 to the extent the
8        contribution is accepted by the account administrator
9        as provided in that Act;
10            (T) An amount, to the extent included in adjusted
11        gross income, equal to the amount of interest earned
12        in the taxable year on a medical care savings account
13        established under the Medical Care Savings Account Act
14        or the Medical Care Savings Account Act of 2000 on
15        behalf of the taxpayer, other than interest added
16        pursuant to item (D-5) of this paragraph (2);
17            (U) For one taxable year beginning on or after
18        January 1, 1994, an amount equal to the total amount of
19        tax imposed and paid under subsections (a) and (b) of
20        Section 201 of this Act on grant amounts received by
21        the taxpayer under the Nursing Home Grant Assistance
22        Act during the taxpayer's taxable years 1992 and 1993;
23            (V) Beginning with tax years ending on or after
24        December 31, 1995 and ending with tax years ending on
25        or before December 31, 2004, an amount equal to the
26        amount paid by a taxpayer who is a self-employed

 

 

HB3914- 21 -LRB103 27153 HLH 53522 b

1        taxpayer, a partner of a partnership, or a shareholder
2        in a Subchapter S corporation for health insurance or
3        long-term care insurance for that taxpayer or that
4        taxpayer's spouse or dependents, to the extent that
5        the amount paid for that health insurance or long-term
6        care insurance may be deducted under Section 213 of
7        the Internal Revenue Code, has not been deducted on
8        the federal income tax return of the taxpayer, and
9        does not exceed the taxable income attributable to
10        that taxpayer's income, self-employment income, or
11        Subchapter S corporation income; except that no
12        deduction shall be allowed under this item (V) if the
13        taxpayer is eligible to participate in any health
14        insurance or long-term care insurance plan of an
15        employer of the taxpayer or the taxpayer's spouse. The
16        amount of the health insurance and long-term care
17        insurance subtracted under this item (V) shall be
18        determined by multiplying total health insurance and
19        long-term care insurance premiums paid by the taxpayer
20        times a number that represents the fractional
21        percentage of eligible medical expenses under Section
22        213 of the Internal Revenue Code of 1986 not actually
23        deducted on the taxpayer's federal income tax return;
24            (W) For taxable years beginning on or after
25        January 1, 1998, all amounts included in the
26        taxpayer's federal gross income in the taxable year

 

 

HB3914- 22 -LRB103 27153 HLH 53522 b

1        from amounts converted from a regular IRA to a Roth
2        IRA. This paragraph is exempt from the provisions of
3        Section 250;
4            (X) For taxable year 1999 and thereafter, an
5        amount equal to the amount of any (i) distributions,
6        to the extent includible in gross income for federal
7        income tax purposes, made to the taxpayer because of
8        his or her status as a victim of persecution for racial
9        or religious reasons by Nazi Germany or any other Axis
10        regime or as an heir of the victim and (ii) items of
11        income, to the extent includible in gross income for
12        federal income tax purposes, attributable to, derived
13        from or in any way related to assets stolen from,
14        hidden from, or otherwise lost to a victim of
15        persecution for racial or religious reasons by Nazi
16        Germany or any other Axis regime immediately prior to,
17        during, and immediately after World War II, including,
18        but not limited to, interest on the proceeds
19        receivable as insurance under policies issued to a
20        victim of persecution for racial or religious reasons
21        by Nazi Germany or any other Axis regime by European
22        insurance companies immediately prior to and during
23        World War II; provided, however, this subtraction from
24        federal adjusted gross income does not apply to assets
25        acquired with such assets or with the proceeds from
26        the sale of such assets; provided, further, this

 

 

HB3914- 23 -LRB103 27153 HLH 53522 b

1        paragraph shall only apply to a taxpayer who was the
2        first recipient of such assets after their recovery
3        and who is a victim of persecution for racial or
4        religious reasons by Nazi Germany or any other Axis
5        regime or as an heir of the victim. The amount of and
6        the eligibility for any public assistance, benefit, or
7        similar entitlement is not affected by the inclusion
8        of items (i) and (ii) of this paragraph in gross income
9        for federal income tax purposes. This paragraph is
10        exempt from the provisions of Section 250;
11            (Y) For taxable years beginning on or after
12        January 1, 2002 and ending on or before December 31,
13        2004, moneys contributed in the taxable year to a
14        College Savings Pool account under Section 16.5 of the
15        State Treasurer Act, except that amounts excluded from
16        gross income under Section 529(c)(3)(C)(i) of the
17        Internal Revenue Code shall not be considered moneys
18        contributed under this subparagraph (Y). For taxable
19        years beginning on or after January 1, 2005, a maximum
20        of $10,000 contributed in the taxable year to (i) a
21        College Savings Pool account under Section 16.5 of the
22        State Treasurer Act or (ii) the Illinois Prepaid
23        Tuition Trust Fund, except that amounts excluded from
24        gross income under Section 529(c)(3)(C)(i) of the
25        Internal Revenue Code shall not be considered moneys
26        contributed under this subparagraph (Y). For purposes

 

 

HB3914- 24 -LRB103 27153 HLH 53522 b

1        of this subparagraph, contributions made by an
2        employer on behalf of an employee, or matching
3        contributions made by an employee, shall be treated as
4        made by the employee. This subparagraph (Y) is exempt
5        from the provisions of Section 250;
6            (Z) For taxable years 2001 and thereafter, for the
7        taxable year in which the bonus depreciation deduction
8        is taken on the taxpayer's federal income tax return
9        under subsection (k) of Section 168 of the Internal
10        Revenue Code and for each applicable taxable year
11        thereafter, an amount equal to "x", where:
12                (1) "y" equals the amount of the depreciation
13            deduction taken for the taxable year on the
14            taxpayer's federal income tax return on property
15            for which the bonus depreciation deduction was
16            taken in any year under subsection (k) of Section
17            168 of the Internal Revenue Code, but not
18            including the bonus depreciation deduction;
19                (2) for taxable years ending on or before
20            December 31, 2005, "x" equals "y" multiplied by 30
21            and then divided by 70 (or "y" multiplied by
22            0.429); and
23                (3) for taxable years ending after December
24            31, 2005:
25                    (i) for property on which a bonus
26                depreciation deduction of 30% of the adjusted

 

 

HB3914- 25 -LRB103 27153 HLH 53522 b

1                basis was taken, "x" equals "y" multiplied by
2                30 and then divided by 70 (or "y" multiplied
3                by 0.429);
4                    (ii) for property on which a bonus
5                depreciation deduction of 50% of the adjusted
6                basis was taken, "x" equals "y" multiplied by
7                1.0;
8                    (iii) for property on which a bonus
9                depreciation deduction of 100% of the adjusted
10                basis was taken in a taxable year ending on or
11                after December 31, 2021, "x" equals the
12                depreciation deduction that would be allowed
13                on that property if the taxpayer had made the
14                election under Section 168(k)(7) of the
15                Internal Revenue Code to not claim bonus
16                depreciation on that property; and
17                    (iv) for property on which a bonus
18                depreciation deduction of a percentage other
19                than 30%, 50% or 100% of the adjusted basis
20                was taken in a taxable year ending on or after
21                December 31, 2021, "x" equals "y" multiplied
22                by 100 times the percentage bonus depreciation
23                on the property (that is, 100(bonus%)) and
24                then divided by 100 times 1 minus the
25                percentage bonus depreciation on the property
26                (that is, 100(1–bonus%)).

 

 

HB3914- 26 -LRB103 27153 HLH 53522 b

1            The aggregate amount deducted under this
2        subparagraph in all taxable years for any one piece of
3        property may not exceed the amount of the bonus
4        depreciation deduction taken on that property on the
5        taxpayer's federal income tax return under subsection
6        (k) of Section 168 of the Internal Revenue Code. This
7        subparagraph (Z) is exempt from the provisions of
8        Section 250;
9            (AA) If the taxpayer sells, transfers, abandons,
10        or otherwise disposes of property for which the
11        taxpayer was required in any taxable year to make an
12        addition modification under subparagraph (D-15), then
13        an amount equal to that addition modification.
14            If the taxpayer continues to own property through
15        the last day of the last tax year for which a
16        subtraction is allowed with respect to that property
17        under subparagraph (Z) and for which the taxpayer was
18        required in any taxable year to make an addition
19        modification under subparagraph (D-15), then an amount
20        equal to that addition modification.
21            The taxpayer is allowed to take the deduction
22        under this subparagraph only once with respect to any
23        one piece of property.
24            This subparagraph (AA) is exempt from the
25        provisions of Section 250;
26            (BB) Any amount included in adjusted gross income,

 

 

HB3914- 27 -LRB103 27153 HLH 53522 b

1        other than salary, received by a driver in a
2        ridesharing arrangement using a motor vehicle;
3            (CC) The amount of (i) any interest income (net of
4        the deductions allocable thereto) taken into account
5        for the taxable year with respect to a transaction
6        with a taxpayer that is required to make an addition
7        modification with respect to such transaction under
8        Section 203(a)(2)(D-17), 203(b)(2)(E-12),
9        203(c)(2)(G-12), or 203(d)(2)(D-7), but not to exceed
10        the amount of that addition modification, and (ii) any
11        income from intangible property (net of the deductions
12        allocable thereto) taken into account for the taxable
13        year with respect to a transaction with a taxpayer
14        that is required to make an addition modification with
15        respect to such transaction under Section
16        203(a)(2)(D-18), 203(b)(2)(E-13), 203(c)(2)(G-13), or
17        203(d)(2)(D-8), but not to exceed the amount of that
18        addition modification. This subparagraph (CC) is
19        exempt from the provisions of Section 250;
20            (DD) An amount equal to the interest income taken
21        into account for the taxable year (net of the
22        deductions allocable thereto) with respect to
23        transactions with (i) a foreign person who would be a
24        member of the taxpayer's unitary business group but
25        for the fact that the foreign person's business
26        activity outside the United States is 80% or more of

 

 

HB3914- 28 -LRB103 27153 HLH 53522 b

1        that person's total business activity and (ii) for
2        taxable years ending on or after December 31, 2008, to
3        a person who would be a member of the same unitary
4        business group but for the fact that the person is
5        prohibited under Section 1501(a)(27) from being
6        included in the unitary business group because he or
7        she is ordinarily required to apportion business
8        income under different subsections of Section 304, but
9        not to exceed the addition modification required to be
10        made for the same taxable year under Section
11        203(a)(2)(D-17) for interest paid, accrued, or
12        incurred, directly or indirectly, to the same person.
13        This subparagraph (DD) is exempt from the provisions
14        of Section 250;
15            (EE) An amount equal to the income from intangible
16        property taken into account for the taxable year (net
17        of the deductions allocable thereto) with respect to
18        transactions with (i) a foreign person who would be a
19        member of the taxpayer's unitary business group but
20        for the fact that the foreign person's business
21        activity outside the United States is 80% or more of
22        that person's total business activity and (ii) for
23        taxable years ending on or after December 31, 2008, to
24        a person who would be a member of the same unitary
25        business group but for the fact that the person is
26        prohibited under Section 1501(a)(27) from being

 

 

HB3914- 29 -LRB103 27153 HLH 53522 b

1        included in the unitary business group because he or
2        she is ordinarily required to apportion business
3        income under different subsections of Section 304, but
4        not to exceed the addition modification required to be
5        made for the same taxable year under Section
6        203(a)(2)(D-18) for intangible expenses and costs
7        paid, accrued, or incurred, directly or indirectly, to
8        the same foreign person. This subparagraph (EE) is
9        exempt from the provisions of Section 250;
10            (FF) An amount equal to any amount awarded to the
11        taxpayer during the taxable year by the Court of
12        Claims under subsection (c) of Section 8 of the Court
13        of Claims Act for time unjustly served in a State
14        prison. This subparagraph (FF) is exempt from the
15        provisions of Section 250;
16            (GG) For taxable years ending on or after December
17        31, 2011, in the case of a taxpayer who was required to
18        add back any insurance premiums under Section
19        203(a)(2)(D-19), such taxpayer may elect to subtract
20        that part of a reimbursement received from the
21        insurance company equal to the amount of the expense
22        or loss (including expenses incurred by the insurance
23        company) that would have been taken into account as a
24        deduction for federal income tax purposes if the
25        expense or loss had been uninsured. If a taxpayer
26        makes the election provided for by this subparagraph

 

 

HB3914- 30 -LRB103 27153 HLH 53522 b

1        (GG), the insurer to which the premiums were paid must
2        add back to income the amount subtracted by the
3        taxpayer pursuant to this subparagraph (GG). This
4        subparagraph (GG) is exempt from the provisions of
5        Section 250;
6            (HH) For taxable years beginning on or after
7        January 1, 2018 and prior to January 1, 2028, a maximum
8        of $10,000 contributed in the taxable year to a
9        qualified ABLE account under Section 16.6 of the State
10        Treasurer Act, except that amounts excluded from gross
11        income under Section 529(c)(3)(C)(i) or Section
12        529A(c)(1)(C) of the Internal Revenue Code shall not
13        be considered moneys contributed under this
14        subparagraph (HH). For purposes of this subparagraph
15        (HH), contributions made by an employer on behalf of
16        an employee, or matching contributions made by an
17        employee, shall be treated as made by the employee;
18        and
19            (II) For taxable years that begin on or after
20        January 1, 2021 and begin before January 1, 2026, the
21        amount that is included in the taxpayer's federal
22        adjusted gross income pursuant to Section 61 of the
23        Internal Revenue Code as discharge of indebtedness
24        attributable to student loan forgiveness and that is
25        not excluded from the taxpayer's federal adjusted
26        gross income pursuant to paragraph (5) of subsection

 

 

HB3914- 31 -LRB103 27153 HLH 53522 b

1        (f) of Section 108 of the Internal Revenue Code; and .
2            (JJ) For taxable years beginning on or after
3        January 1, 2024, for any cannabis establishment
4        operating in this State and licensed under the
5        Cannabis Regulation and Tax Act or any cannabis
6        cultivation center or medical cannabis dispensing
7        organization operating in this State and licensed
8        under the Compassionate Use of Cannabis Program Act,
9        an amount equal to the deductions and credits that
10        were disallowed under Section 280E of the Internal
11        Revenue Code for the taxable year and that would not be
12        added back under this subsection. The provisions of
13        this subparagraph (JJ) are exempt from the provisions
14        of Section 250.
 
15    (b) Corporations.
16        (1) In general. In the case of a corporation, base
17    income means an amount equal to the taxpayer's taxable
18    income for the taxable year as modified by paragraph (2).
19        (2) Modifications. The taxable income referred to in
20    paragraph (1) shall be modified by adding thereto the sum
21    of the following amounts:
22            (A) An amount equal to all amounts paid or accrued
23        to the taxpayer as interest and all distributions
24        received from regulated investment companies during
25        the taxable year to the extent excluded from gross

 

 

HB3914- 32 -LRB103 27153 HLH 53522 b

1        income in the computation of taxable income;
2            (B) An amount equal to the amount of tax imposed by
3        this Act to the extent deducted from gross income in
4        the computation of taxable income for the taxable
5        year;
6            (C) In the case of a regulated investment company,
7        an amount equal to the excess of (i) the net long-term
8        capital gain for the taxable year, over (ii) the
9        amount of the capital gain dividends designated as
10        such in accordance with Section 852(b)(3)(C) of the
11        Internal Revenue Code and any amount designated under
12        Section 852(b)(3)(D) of the Internal Revenue Code,
13        attributable to the taxable year (this amendatory Act
14        of 1995 (Public Act 89-89) is declarative of existing
15        law and is not a new enactment);
16            (D) The amount of any net operating loss deduction
17        taken in arriving at taxable income, other than a net
18        operating loss carried forward from a taxable year
19        ending prior to December 31, 1986;
20            (E) For taxable years in which a net operating
21        loss carryback or carryforward from a taxable year
22        ending prior to December 31, 1986 is an element of
23        taxable income under paragraph (1) of subsection (e)
24        or subparagraph (E) of paragraph (2) of subsection
25        (e), the amount by which addition modifications other
26        than those provided by this subparagraph (E) exceeded

 

 

HB3914- 33 -LRB103 27153 HLH 53522 b

1        subtraction modifications in such earlier taxable
2        year, with the following limitations applied in the
3        order that they are listed:
4                (i) the addition modification relating to the
5            net operating loss carried back or forward to the
6            taxable year from any taxable year ending prior to
7            December 31, 1986 shall be reduced by the amount
8            of addition modification under this subparagraph
9            (E) which related to that net operating loss and
10            which was taken into account in calculating the
11            base income of an earlier taxable year, and
12                (ii) the addition modification relating to the
13            net operating loss carried back or forward to the
14            taxable year from any taxable year ending prior to
15            December 31, 1986 shall not exceed the amount of
16            such carryback or carryforward;
17            For taxable years in which there is a net
18        operating loss carryback or carryforward from more
19        than one other taxable year ending prior to December
20        31, 1986, the addition modification provided in this
21        subparagraph (E) shall be the sum of the amounts
22        computed independently under the preceding provisions
23        of this subparagraph (E) for each such taxable year;
24            (E-5) For taxable years ending after December 31,
25        1997, an amount equal to any eligible remediation
26        costs that the corporation deducted in computing

 

 

HB3914- 34 -LRB103 27153 HLH 53522 b

1        adjusted gross income and for which the corporation
2        claims a credit under subsection (l) of Section 201;
3            (E-10) For taxable years 2001 and thereafter, an
4        amount equal to the bonus depreciation deduction taken
5        on the taxpayer's federal income tax return for the
6        taxable year under subsection (k) of Section 168 of
7        the Internal Revenue Code;
8            (E-11) If the taxpayer sells, transfers, abandons,
9        or otherwise disposes of property for which the
10        taxpayer was required in any taxable year to make an
11        addition modification under subparagraph (E-10), then
12        an amount equal to the aggregate amount of the
13        deductions taken in all taxable years under
14        subparagraph (T) with respect to that property.
15            If the taxpayer continues to own property through
16        the last day of the last tax year for which a
17        subtraction is allowed with respect to that property
18        under subparagraph (T) and for which the taxpayer was
19        allowed in any taxable year to make a subtraction
20        modification under subparagraph (T), then an amount
21        equal to that subtraction modification.
22            The taxpayer is required to make the addition
23        modification under this subparagraph only once with
24        respect to any one piece of property;
25            (E-12) An amount equal to the amount otherwise
26        allowed as a deduction in computing base income for

 

 

HB3914- 35 -LRB103 27153 HLH 53522 b

1        interest paid, accrued, or incurred, directly or
2        indirectly, (i) for taxable years ending on or after
3        December 31, 2004, to a foreign person who would be a
4        member of the same unitary business group but for the
5        fact the foreign person's business activity outside
6        the United States is 80% or more of the foreign
7        person's total business activity and (ii) for taxable
8        years ending on or after December 31, 2008, to a person
9        who would be a member of the same unitary business
10        group but for the fact that the person is prohibited
11        under Section 1501(a)(27) from being included in the
12        unitary business group because he or she is ordinarily
13        required to apportion business income under different
14        subsections of Section 304. The addition modification
15        required by this subparagraph shall be reduced to the
16        extent that dividends were included in base income of
17        the unitary group for the same taxable year and
18        received by the taxpayer or by a member of the
19        taxpayer's unitary business group (including amounts
20        included in gross income pursuant to Sections 951
21        through 964 of the Internal Revenue Code and amounts
22        included in gross income under Section 78 of the
23        Internal Revenue Code) with respect to the stock of
24        the same person to whom the interest was paid,
25        accrued, or incurred.
26            This paragraph shall not apply to the following:

 

 

HB3914- 36 -LRB103 27153 HLH 53522 b

1                (i) an item of interest paid, accrued, or
2            incurred, directly or indirectly, to a person who
3            is subject in a foreign country or state, other
4            than a state which requires mandatory unitary
5            reporting, to a tax on or measured by net income
6            with respect to such interest; or
7                (ii) an item of interest paid, accrued, or
8            incurred, directly or indirectly, to a person if
9            the taxpayer can establish, based on a
10            preponderance of the evidence, both of the
11            following:
12                    (a) the person, during the same taxable
13                year, paid, accrued, or incurred, the interest
14                to a person that is not a related member, and
15                    (b) the transaction giving rise to the
16                interest expense between the taxpayer and the
17                person did not have as a principal purpose the
18                avoidance of Illinois income tax, and is paid
19                pursuant to a contract or agreement that
20                reflects an arm's-length interest rate and
21                terms; or
22                (iii) the taxpayer can establish, based on
23            clear and convincing evidence, that the interest
24            paid, accrued, or incurred relates to a contract
25            or agreement entered into at arm's-length rates
26            and terms and the principal purpose for the

 

 

HB3914- 37 -LRB103 27153 HLH 53522 b

1            payment is not federal or Illinois tax avoidance;
2            or
3                (iv) an item of interest paid, accrued, or
4            incurred, directly or indirectly, to a person if
5            the taxpayer establishes by clear and convincing
6            evidence that the adjustments are unreasonable; or
7            if the taxpayer and the Director agree in writing
8            to the application or use of an alternative method
9            of apportionment under Section 304(f).
10                Nothing in this subsection shall preclude the
11            Director from making any other adjustment
12            otherwise allowed under Section 404 of this Act
13            for any tax year beginning after the effective
14            date of this amendment provided such adjustment is
15            made pursuant to regulation adopted by the
16            Department and such regulations provide methods
17            and standards by which the Department will utilize
18            its authority under Section 404 of this Act;
19            (E-13) An amount equal to the amount of intangible
20        expenses and costs otherwise allowed as a deduction in
21        computing base income, and that were paid, accrued, or
22        incurred, directly or indirectly, (i) for taxable
23        years ending on or after December 31, 2004, to a
24        foreign person who would be a member of the same
25        unitary business group but for the fact that the
26        foreign person's business activity outside the United

 

 

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1        States is 80% or more of that person's total business
2        activity and (ii) for taxable years ending on or after
3        December 31, 2008, to a person who would be a member of
4        the same unitary business group but for the fact that
5        the person is prohibited under Section 1501(a)(27)
6        from being included in the unitary business group
7        because he or she is ordinarily required to apportion
8        business income under different subsections of Section
9        304. The addition modification required by this
10        subparagraph shall be reduced to the extent that
11        dividends were included in base income of the unitary
12        group for the same taxable year and received by the
13        taxpayer or by a member of the taxpayer's unitary
14        business group (including amounts included in gross
15        income pursuant to Sections 951 through 964 of the
16        Internal Revenue Code and amounts included in gross
17        income under Section 78 of the Internal Revenue Code)
18        with respect to the stock of the same person to whom
19        the intangible expenses and costs were directly or
20        indirectly paid, incurred, or accrued. The preceding
21        sentence shall not apply to the extent that the same
22        dividends caused a reduction to the addition
23        modification required under Section 203(b)(2)(E-12) of
24        this Act. As used in this subparagraph, the term
25        "intangible expenses and costs" includes (1) expenses,
26        losses, and costs for, or related to, the direct or

 

 

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1        indirect acquisition, use, maintenance or management,
2        ownership, sale, exchange, or any other disposition of
3        intangible property; (2) losses incurred, directly or
4        indirectly, from factoring transactions or discounting
5        transactions; (3) royalty, patent, technical, and
6        copyright fees; (4) licensing fees; and (5) other
7        similar expenses and costs. For purposes of this
8        subparagraph, "intangible property" includes patents,
9        patent applications, trade names, trademarks, service
10        marks, copyrights, mask works, trade secrets, and
11        similar types of intangible assets.
12            This paragraph shall not apply to the following:
13                (i) any item of intangible expenses or costs
14            paid, accrued, or incurred, directly or
15            indirectly, from a transaction with a person who
16            is subject in a foreign country or state, other
17            than a state which requires mandatory unitary
18            reporting, to a tax on or measured by net income
19            with respect to such item; or
20                (ii) any item of intangible expense or cost
21            paid, accrued, or incurred, directly or
22            indirectly, if the taxpayer can establish, based
23            on a preponderance of the evidence, both of the
24            following:
25                    (a) the person during the same taxable
26                year paid, accrued, or incurred, the

 

 

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1                intangible expense or cost to a person that is
2                not a related member, and
3                    (b) the transaction giving rise to the
4                intangible expense or cost between the
5                taxpayer and the person did not have as a
6                principal purpose the avoidance of Illinois
7                income tax, and is paid pursuant to a contract
8                or agreement that reflects arm's-length terms;
9                or
10                (iii) any item of intangible expense or cost
11            paid, accrued, or incurred, directly or
12            indirectly, from a transaction with a person if
13            the taxpayer establishes by clear and convincing
14            evidence, that the adjustments are unreasonable;
15            or if the taxpayer and the Director agree in
16            writing to the application or use of an
17            alternative method of apportionment under Section
18            304(f);
19                Nothing in this subsection shall preclude the
20            Director from making any other adjustment
21            otherwise allowed under Section 404 of this Act
22            for any tax year beginning after the effective
23            date of this amendment provided such adjustment is
24            made pursuant to regulation adopted by the
25            Department and such regulations provide methods
26            and standards by which the Department will utilize

 

 

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1            its authority under Section 404 of this Act;
2            (E-14) For taxable years ending on or after
3        December 31, 2008, an amount equal to the amount of
4        insurance premium expenses and costs otherwise allowed
5        as a deduction in computing base income, and that were
6        paid, accrued, or incurred, directly or indirectly, to
7        a person who would be a member of the same unitary
8        business group but for the fact that the person is
9        prohibited under Section 1501(a)(27) from being
10        included in the unitary business group because he or
11        she is ordinarily required to apportion business
12        income under different subsections of Section 304. The
13        addition modification required by this subparagraph
14        shall be reduced to the extent that dividends were
15        included in base income of the unitary group for the
16        same taxable year and received by the taxpayer or by a
17        member of the taxpayer's unitary business group
18        (including amounts included in gross income under
19        Sections 951 through 964 of the Internal Revenue Code
20        and amounts included in gross income under Section 78
21        of the Internal Revenue Code) with respect to the
22        stock of the same person to whom the premiums and costs
23        were directly or indirectly paid, incurred, or
24        accrued. The preceding sentence does not apply to the
25        extent that the same dividends caused a reduction to
26        the addition modification required under Section

 

 

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1        203(b)(2)(E-12) or Section 203(b)(2)(E-13) of this
2        Act;
3            (E-15) For taxable years beginning after December
4        31, 2008, any deduction for dividends paid by a
5        captive real estate investment trust that is allowed
6        to a real estate investment trust under Section
7        857(b)(2)(B) of the Internal Revenue Code for
8        dividends paid;
9            (E-16) An amount equal to the credit allowable to
10        the taxpayer under Section 218(a) of this Act,
11        determined without regard to Section 218(c) of this
12        Act;
13            (E-17) For taxable years ending on or after
14        December 31, 2017, an amount equal to the deduction
15        allowed under Section 199 of the Internal Revenue Code
16        for the taxable year;
17            (E-18) for taxable years beginning after December
18        31, 2018, an amount equal to the deduction allowed
19        under Section 250(a)(1)(A) of the Internal Revenue
20        Code for the taxable year;
21            (E-19) for taxable years ending on or after June
22        30, 2021, an amount equal to the deduction allowed
23        under Section 250(a)(1)(B)(i) of the Internal Revenue
24        Code for the taxable year;
25            (E-20) for taxable years ending on or after June
26        30, 2021, an amount equal to the deduction allowed

 

 

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1        under Sections 243(e) and 245A(a) of the Internal
2        Revenue Code for the taxable year.
3    and by deducting from the total so obtained the sum of the
4    following amounts:
5            (F) An amount equal to the amount of any tax
6        imposed by this Act which was refunded to the taxpayer
7        and included in such total for the taxable year;
8            (G) An amount equal to any amount included in such
9        total under Section 78 of the Internal Revenue Code;
10            (H) In the case of a regulated investment company,
11        an amount equal to the amount of exempt interest
12        dividends as defined in subsection (b)(5) of Section
13        852 of the Internal Revenue Code, paid to shareholders
14        for the taxable year;
15            (I) With the exception of any amounts subtracted
16        under subparagraph (J), an amount equal to the sum of
17        all amounts disallowed as deductions by (i) Sections
18        171(a)(2) and 265(a)(2) and amounts disallowed as
19        interest expense by Section 291(a)(3) of the Internal
20        Revenue Code, and all amounts of expenses allocable to
21        interest and disallowed as deductions by Section
22        265(a)(1) of the Internal Revenue Code; and (ii) for
23        taxable years ending on or after August 13, 1999,
24        Sections 171(a)(2), 265, 280C, 291(a)(3), and
25        832(b)(5)(B)(i) of the Internal Revenue Code, plus,
26        for tax years ending on or after December 31, 2011,

 

 

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1        amounts disallowed as deductions by Section 45G(e)(3)
2        of the Internal Revenue Code and, for taxable years
3        ending on or after December 31, 2008, any amount
4        included in gross income under Section 87 of the
5        Internal Revenue Code and the policyholders' share of
6        tax-exempt interest of a life insurance company under
7        Section 807(a)(2)(B) of the Internal Revenue Code (in
8        the case of a life insurance company with gross income
9        from a decrease in reserves for the tax year) or
10        Section 807(b)(1)(B) of the Internal Revenue Code (in
11        the case of a life insurance company allowed a
12        deduction for an increase in reserves for the tax
13        year); the provisions of this subparagraph are exempt
14        from the provisions of Section 250;
15            (J) An amount equal to all amounts included in
16        such total which are exempt from taxation by this
17        State either by reason of its statutes or Constitution
18        or by reason of the Constitution, treaties or statutes
19        of the United States; provided that, in the case of any
20        statute of this State that exempts income derived from
21        bonds or other obligations from the tax imposed under
22        this Act, the amount exempted shall be the interest
23        net of bond premium amortization;
24            (K) An amount equal to those dividends included in
25        such total which were paid by a corporation which
26        conducts business operations in a River Edge

 

 

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1        Redevelopment Zone or zones created under the River
2        Edge Redevelopment Zone Act and conducts substantially
3        all of its operations in a River Edge Redevelopment
4        Zone or zones. This subparagraph (K) is exempt from
5        the provisions of Section 250;
6            (L) An amount equal to those dividends included in
7        such total that were paid by a corporation that
8        conducts business operations in a federally designated
9        Foreign Trade Zone or Sub-Zone and that is designated
10        a High Impact Business located in Illinois; provided
11        that dividends eligible for the deduction provided in
12        subparagraph (K) of paragraph 2 of this subsection
13        shall not be eligible for the deduction provided under
14        this subparagraph (L);
15            (M) For any taxpayer that is a financial
16        organization within the meaning of Section 304(c) of
17        this Act, an amount included in such total as interest
18        income from a loan or loans made by such taxpayer to a
19        borrower, to the extent that such a loan is secured by
20        property which is eligible for the River Edge
21        Redevelopment Zone Investment Credit. To determine the
22        portion of a loan or loans that is secured by property
23        eligible for a Section 201(f) investment credit to the
24        borrower, the entire principal amount of the loan or
25        loans between the taxpayer and the borrower should be
26        divided into the basis of the Section 201(f)

 

 

HB3914- 46 -LRB103 27153 HLH 53522 b

1        investment credit property which secures the loan or
2        loans, using for this purpose the original basis of
3        such property on the date that it was placed in service
4        in the River Edge Redevelopment Zone. The subtraction
5        modification available to the taxpayer in any year
6        under this subsection shall be that portion of the
7        total interest paid by the borrower with respect to
8        such loan attributable to the eligible property as
9        calculated under the previous sentence. This
10        subparagraph (M) is exempt from the provisions of
11        Section 250;
12            (M-1) For any taxpayer that is a financial
13        organization within the meaning of Section 304(c) of
14        this Act, an amount included in such total as interest
15        income from a loan or loans made by such taxpayer to a
16        borrower, to the extent that such a loan is secured by
17        property which is eligible for the High Impact
18        Business Investment Credit. To determine the portion
19        of a loan or loans that is secured by property eligible
20        for a Section 201(h) investment credit to the
21        borrower, the entire principal amount of the loan or
22        loans between the taxpayer and the borrower should be
23        divided into the basis of the Section 201(h)
24        investment credit property which secures the loan or
25        loans, using for this purpose the original basis of
26        such property on the date that it was placed in service

 

 

HB3914- 47 -LRB103 27153 HLH 53522 b

1        in a federally designated Foreign Trade Zone or
2        Sub-Zone located in Illinois. No taxpayer that is
3        eligible for the deduction provided in subparagraph
4        (M) of paragraph (2) of this subsection shall be
5        eligible for the deduction provided under this
6        subparagraph (M-1). The subtraction modification
7        available to taxpayers in any year under this
8        subsection shall be that portion of the total interest
9        paid by the borrower with respect to such loan
10        attributable to the eligible property as calculated
11        under the previous sentence;
12            (N) Two times any contribution made during the
13        taxable year to a designated zone organization to the
14        extent that the contribution (i) qualifies as a
15        charitable contribution under subsection (c) of
16        Section 170 of the Internal Revenue Code and (ii)
17        must, by its terms, be used for a project approved by
18        the Department of Commerce and Economic Opportunity
19        under Section 11 of the Illinois Enterprise Zone Act
20        or under Section 10-10 of the River Edge Redevelopment
21        Zone Act. This subparagraph (N) is exempt from the
22        provisions of Section 250;
23            (O) An amount equal to: (i) 85% for taxable years
24        ending on or before December 31, 1992, or, a
25        percentage equal to the percentage allowable under
26        Section 243(a)(1) of the Internal Revenue Code of 1986

 

 

HB3914- 48 -LRB103 27153 HLH 53522 b

1        for taxable years ending after December 31, 1992, of
2        the amount by which dividends included in taxable
3        income and received from a corporation that is not
4        created or organized under the laws of the United
5        States or any state or political subdivision thereof,
6        including, for taxable years ending on or after
7        December 31, 1988, dividends received or deemed
8        received or paid or deemed paid under Sections 951
9        through 965 of the Internal Revenue Code, exceed the
10        amount of the modification provided under subparagraph
11        (G) of paragraph (2) of this subsection (b) which is
12        related to such dividends, and including, for taxable
13        years ending on or after December 31, 2008, dividends
14        received from a captive real estate investment trust;
15        plus (ii) 100% of the amount by which dividends,
16        included in taxable income and received, including,
17        for taxable years ending on or after December 31,
18        1988, dividends received or deemed received or paid or
19        deemed paid under Sections 951 through 964 of the
20        Internal Revenue Code and including, for taxable years
21        ending on or after December 31, 2008, dividends
22        received from a captive real estate investment trust,
23        from any such corporation specified in clause (i) that
24        would but for the provisions of Section 1504(b)(3) of
25        the Internal Revenue Code be treated as a member of the
26        affiliated group which includes the dividend

 

 

HB3914- 49 -LRB103 27153 HLH 53522 b

1        recipient, exceed the amount of the modification
2        provided under subparagraph (G) of paragraph (2) of
3        this subsection (b) which is related to such
4        dividends. For taxable years ending on or after June
5        30, 2021, (i) for purposes of this subparagraph, the
6        term "dividend" does not include any amount treated as
7        a dividend under Section 1248 of the Internal Revenue
8        Code, and (ii) this subparagraph shall not apply to
9        dividends for which a deduction is allowed under
10        Section 245(a) of the Internal Revenue Code. This
11        subparagraph (O) is exempt from the provisions of
12        Section 250 of this Act;
13            (P) An amount equal to any contribution made to a
14        job training project established pursuant to the Tax
15        Increment Allocation Redevelopment Act;
16            (Q) An amount equal to the amount of the deduction
17        used to compute the federal income tax credit for
18        restoration of substantial amounts held under claim of
19        right for the taxable year pursuant to Section 1341 of
20        the Internal Revenue Code;
21            (R) On and after July 20, 1999, in the case of an
22        attorney-in-fact with respect to whom an interinsurer
23        or a reciprocal insurer has made the election under
24        Section 835 of the Internal Revenue Code, 26 U.S.C.
25        835, an amount equal to the excess, if any, of the
26        amounts paid or incurred by that interinsurer or

 

 

HB3914- 50 -LRB103 27153 HLH 53522 b

1        reciprocal insurer in the taxable year to the
2        attorney-in-fact over the deduction allowed to that
3        interinsurer or reciprocal insurer with respect to the
4        attorney-in-fact under Section 835(b) of the Internal
5        Revenue Code for the taxable year; the provisions of
6        this subparagraph are exempt from the provisions of
7        Section 250;
8            (S) For taxable years ending on or after December
9        31, 1997, in the case of a Subchapter S corporation, an
10        amount equal to all amounts of income allocable to a
11        shareholder subject to the Personal Property Tax
12        Replacement Income Tax imposed by subsections (c) and
13        (d) of Section 201 of this Act, including amounts
14        allocable to organizations exempt from federal income
15        tax by reason of Section 501(a) of the Internal
16        Revenue Code. This subparagraph (S) is exempt from the
17        provisions of Section 250;
18            (T) For taxable years 2001 and thereafter, for the
19        taxable year in which the bonus depreciation deduction
20        is taken on the taxpayer's federal income tax return
21        under subsection (k) of Section 168 of the Internal
22        Revenue Code and for each applicable taxable year
23        thereafter, an amount equal to "x", where:
24                (1) "y" equals the amount of the depreciation
25            deduction taken for the taxable year on the
26            taxpayer's federal income tax return on property

 

 

HB3914- 51 -LRB103 27153 HLH 53522 b

1            for which the bonus depreciation deduction was
2            taken in any year under subsection (k) of Section
3            168 of the Internal Revenue Code, but not
4            including the bonus depreciation deduction;
5                (2) for taxable years ending on or before
6            December 31, 2005, "x" equals "y" multiplied by 30
7            and then divided by 70 (or "y" multiplied by
8            0.429); and
9                (3) for taxable years ending after December
10            31, 2005:
11                    (i) for property on which a bonus
12                depreciation deduction of 30% of the adjusted
13                basis was taken, "x" equals "y" multiplied by
14                30 and then divided by 70 (or "y" multiplied
15                by 0.429);
16                    (ii) for property on which a bonus
17                depreciation deduction of 50% of the adjusted
18                basis was taken, "x" equals "y" multiplied by
19                1.0;
20                    (iii) for property on which a bonus
21                depreciation deduction of 100% of the adjusted
22                basis was taken in a taxable year ending on or
23                after December 31, 2021, "x" equals the
24                depreciation deduction that would be allowed
25                on that property if the taxpayer had made the
26                election under Section 168(k)(7) of the

 

 

HB3914- 52 -LRB103 27153 HLH 53522 b

1                Internal Revenue Code to not claim bonus
2                depreciation on that property; and
3                    (iv) for property on which a bonus
4                depreciation deduction of a percentage other
5                than 30%, 50% or 100% of the adjusted basis
6                was taken in a taxable year ending on or after
7                December 31, 2021, "x" equals "y" multiplied
8                by 100 times the percentage bonus depreciation
9                on the property (that is, 100(bonus%)) and
10                then divided by 100 times 1 minus the
11                percentage bonus depreciation on the property
12                (that is, 100(1–bonus%)).
13            The aggregate amount deducted under this
14        subparagraph in all taxable years for any one piece of
15        property may not exceed the amount of the bonus
16        depreciation deduction taken on that property on the
17        taxpayer's federal income tax return under subsection
18        (k) of Section 168 of the Internal Revenue Code. This
19        subparagraph (T) is exempt from the provisions of
20        Section 250;
21            (U) If the taxpayer sells, transfers, abandons, or
22        otherwise disposes of property for which the taxpayer
23        was required in any taxable year to make an addition
24        modification under subparagraph (E-10), then an amount
25        equal to that addition modification.
26            If the taxpayer continues to own property through

 

 

HB3914- 53 -LRB103 27153 HLH 53522 b

1        the last day of the last tax year for which a
2        subtraction is allowed with respect to that property
3        under subparagraph (T) and for which the taxpayer was
4        required in any taxable year to make an addition
5        modification under subparagraph (E-10), then an amount
6        equal to that addition modification.
7            The taxpayer is allowed to take the deduction
8        under this subparagraph only once with respect to any
9        one piece of property.
10            This subparagraph (U) is exempt from the
11        provisions of Section 250;
12            (V) The amount of: (i) any interest income (net of
13        the deductions allocable thereto) taken into account
14        for the taxable year with respect to a transaction
15        with a taxpayer that is required to make an addition
16        modification with respect to such transaction under
17        Section 203(a)(2)(D-17), 203(b)(2)(E-12),
18        203(c)(2)(G-12), or 203(d)(2)(D-7), but not to exceed
19        the amount of such addition modification, (ii) any
20        income from intangible property (net of the deductions
21        allocable thereto) taken into account for the taxable
22        year with respect to a transaction with a taxpayer
23        that is required to make an addition modification with
24        respect to such transaction under Section
25        203(a)(2)(D-18), 203(b)(2)(E-13), 203(c)(2)(G-13), or
26        203(d)(2)(D-8), but not to exceed the amount of such

 

 

HB3914- 54 -LRB103 27153 HLH 53522 b

1        addition modification, and (iii) any insurance premium
2        income (net of deductions allocable thereto) taken
3        into account for the taxable year with respect to a
4        transaction with a taxpayer that is required to make
5        an addition modification with respect to such
6        transaction under Section 203(a)(2)(D-19), Section
7        203(b)(2)(E-14), Section 203(c)(2)(G-14), or Section
8        203(d)(2)(D-9), but not to exceed the amount of that
9        addition modification. This subparagraph (V) is exempt
10        from the provisions of Section 250;
11            (W) An amount equal to the interest income taken
12        into account for the taxable year (net of the
13        deductions allocable thereto) with respect to
14        transactions with (i) a foreign person who would be a
15        member of the taxpayer's unitary business group but
16        for the fact that the foreign person's business
17        activity outside the United States is 80% or more of
18        that person's total business activity and (ii) for
19        taxable years ending on or after December 31, 2008, to
20        a person who would be a member of the same unitary
21        business group but for the fact that the person is
22        prohibited under Section 1501(a)(27) from being
23        included in the unitary business group because he or
24        she is ordinarily required to apportion business
25        income under different subsections of Section 304, but
26        not to exceed the addition modification required to be

 

 

HB3914- 55 -LRB103 27153 HLH 53522 b

1        made for the same taxable year under Section
2        203(b)(2)(E-12) for interest paid, accrued, or
3        incurred, directly or indirectly, to the same person.
4        This subparagraph (W) is exempt from the provisions of
5        Section 250;
6            (X) An amount equal to the income from intangible
7        property taken into account for the taxable year (net
8        of the deductions allocable thereto) with respect to
9        transactions with (i) a foreign person who would be a
10        member of the taxpayer's unitary business group but
11        for the fact that the foreign person's business
12        activity outside the United States is 80% or more of
13        that person's total business activity and (ii) for
14        taxable years ending on or after December 31, 2008, to
15        a person who would be a member of the same unitary
16        business group but for the fact that the person is
17        prohibited under Section 1501(a)(27) from being
18        included in the unitary business group because he or
19        she is ordinarily required to apportion business
20        income under different subsections of Section 304, but
21        not to exceed the addition modification required to be
22        made for the same taxable year under Section
23        203(b)(2)(E-13) for intangible expenses and costs
24        paid, accrued, or incurred, directly or indirectly, to
25        the same foreign person. This subparagraph (X) is
26        exempt from the provisions of Section 250;

 

 

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1            (Y) For taxable years ending on or after December
2        31, 2011, in the case of a taxpayer who was required to
3        add back any insurance premiums under Section
4        203(b)(2)(E-14), such taxpayer may elect to subtract
5        that part of a reimbursement received from the
6        insurance company equal to the amount of the expense
7        or loss (including expenses incurred by the insurance
8        company) that would have been taken into account as a
9        deduction for federal income tax purposes if the
10        expense or loss had been uninsured. If a taxpayer
11        makes the election provided for by this subparagraph
12        (Y), the insurer to which the premiums were paid must
13        add back to income the amount subtracted by the
14        taxpayer pursuant to this subparagraph (Y). This
15        subparagraph (Y) is exempt from the provisions of
16        Section 250; and
17            (Z) The difference between the nondeductible
18        controlled foreign corporation dividends under Section
19        965(e)(3) of the Internal Revenue Code over the
20        taxable income of the taxpayer, computed without
21        regard to Section 965(e)(2)(A) of the Internal Revenue
22        Code, and without regard to any net operating loss
23        deduction. This subparagraph (Z) is exempt from the
24        provisions of Section 250; and .
25            (AA) For taxable years beginning on or after
26        January 1, 2024, for any cannabis establishment

 

 

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1        operating in this State and licensed under the
2        Cannabis Regulation and Tax Act or any cannabis
3        cultivation center or medical cannabis dispensing
4        organization operating in this State and licensed
5        under the Compassionate Use of Cannabis Program Act,
6        an amount equal to the deductions and credits that
7        were disallowed under Section 280E of the Internal
8        Revenue Code for the taxable year and that would not be
9        added back under this subsection. The provisions of
10        this subparagraph (AA) are exempt from the provisions
11        of Section 250.
12        (3) Special rule. For purposes of paragraph (2)(A),
13    "gross income" in the case of a life insurance company,
14    for tax years ending on and after December 31, 1994, and
15    prior to December 31, 2011, shall mean the gross
16    investment income for the taxable year and, for tax years
17    ending on or after December 31, 2011, shall mean all
18    amounts included in life insurance gross income under
19    Section 803(a)(3) of the Internal Revenue Code.
 
20    (c) Trusts and estates.
21        (1) In general. In the case of a trust or estate, base
22    income means an amount equal to the taxpayer's taxable
23    income for the taxable year as modified by paragraph (2).
24        (2) Modifications. Subject to the provisions of
25    paragraph (3), the taxable income referred to in paragraph

 

 

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1    (1) shall be modified by adding thereto the sum of the
2    following amounts:
3            (A) An amount equal to all amounts paid or accrued
4        to the taxpayer as interest or dividends during the
5        taxable year to the extent excluded from gross income
6        in the computation of taxable income;
7            (B) In the case of (i) an estate, $600; (ii) a
8        trust which, under its governing instrument, is
9        required to distribute all of its income currently,
10        $300; and (iii) any other trust, $100, but in each such
11        case, only to the extent such amount was deducted in
12        the computation of taxable income;
13            (C) An amount equal to the amount of tax imposed by
14        this Act to the extent deducted from gross income in
15        the computation of taxable income for the taxable
16        year;
17            (D) The amount of any net operating loss deduction
18        taken in arriving at taxable income, other than a net
19        operating loss carried forward from a taxable year
20        ending prior to December 31, 1986;
21            (E) For taxable years in which a net operating
22        loss carryback or carryforward from a taxable year
23        ending prior to December 31, 1986 is an element of
24        taxable income under paragraph (1) of subsection (e)
25        or subparagraph (E) of paragraph (2) of subsection
26        (e), the amount by which addition modifications other

 

 

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1        than those provided by this subparagraph (E) exceeded
2        subtraction modifications in such taxable year, with
3        the following limitations applied in the order that
4        they are listed:
5                (i) the addition modification relating to the
6            net operating loss carried back or forward to the
7            taxable year from any taxable year ending prior to
8            December 31, 1986 shall be reduced by the amount
9            of addition modification under this subparagraph
10            (E) which related to that net operating loss and
11            which was taken into account in calculating the
12            base income of an earlier taxable year, and
13                (ii) the addition modification relating to the
14            net operating loss carried back or forward to the
15            taxable year from any taxable year ending prior to
16            December 31, 1986 shall not exceed the amount of
17            such carryback or carryforward;
18            For taxable years in which there is a net
19        operating loss carryback or carryforward from more
20        than one other taxable year ending prior to December
21        31, 1986, the addition modification provided in this
22        subparagraph (E) shall be the sum of the amounts
23        computed independently under the preceding provisions
24        of this subparagraph (E) for each such taxable year;
25            (F) For taxable years ending on or after January
26        1, 1989, an amount equal to the tax deducted pursuant

 

 

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1        to Section 164 of the Internal Revenue Code if the
2        trust or estate is claiming the same tax for purposes
3        of the Illinois foreign tax credit under Section 601
4        of this Act;
5            (G) An amount equal to the amount of the capital
6        gain deduction allowable under the Internal Revenue
7        Code, to the extent deducted from gross income in the
8        computation of taxable income;
9            (G-5) For taxable years ending after December 31,
10        1997, an amount equal to any eligible remediation
11        costs that the trust or estate deducted in computing
12        adjusted gross income and for which the trust or
13        estate claims a credit under subsection (l) of Section
14        201;
15            (G-10) For taxable years 2001 and thereafter, an
16        amount equal to the bonus depreciation deduction taken
17        on the taxpayer's federal income tax return for the
18        taxable year under subsection (k) of Section 168 of
19        the Internal Revenue Code; and
20            (G-11) If the taxpayer sells, transfers, abandons,
21        or otherwise disposes of property for which the
22        taxpayer was required in any taxable year to make an
23        addition modification under subparagraph (G-10), then
24        an amount equal to the aggregate amount of the
25        deductions taken in all taxable years under
26        subparagraph (R) with respect to that property.

 

 

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1            If the taxpayer continues to own property through
2        the last day of the last tax year for which a
3        subtraction is allowed with respect to that property
4        under subparagraph (R) and for which the taxpayer was
5        allowed in any taxable year to make a subtraction
6        modification under subparagraph (R), then an amount
7        equal to that subtraction modification.
8            The taxpayer is required to make the addition
9        modification under this subparagraph only once with
10        respect to any one piece of property;
11            (G-12) An amount equal to the amount otherwise
12        allowed as a deduction in computing base income for
13        interest paid, accrued, or incurred, directly or
14        indirectly, (i) for taxable years ending on or after
15        December 31, 2004, to a foreign person who would be a
16        member of the same unitary business group but for the
17        fact that the foreign person's business activity
18        outside the United States is 80% or more of the foreign
19        person's total business activity and (ii) for taxable
20        years ending on or after December 31, 2008, to a person
21        who would be a member of the same unitary business
22        group but for the fact that the person is prohibited
23        under Section 1501(a)(27) from being included in the
24        unitary business group because he or she is ordinarily
25        required to apportion business income under different
26        subsections of Section 304. The addition modification

 

 

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1        required by this subparagraph shall be reduced to the
2        extent that dividends were included in base income of
3        the unitary group for the same taxable year and
4        received by the taxpayer or by a member of the
5        taxpayer's unitary business group (including amounts
6        included in gross income pursuant to Sections 951
7        through 964 of the Internal Revenue Code and amounts
8        included in gross income under Section 78 of the
9        Internal Revenue Code) with respect to the stock of
10        the same person to whom the interest was paid,
11        accrued, or incurred.
12            This paragraph shall not apply to the following:
13                (i) an item of interest paid, accrued, or
14            incurred, directly or indirectly, to a person who
15            is subject in a foreign country or state, other
16            than a state which requires mandatory unitary
17            reporting, to a tax on or measured by net income
18            with respect to such interest; or
19                (ii) an item of interest paid, accrued, or
20            incurred, directly or indirectly, to a person if
21            the taxpayer can establish, based on a
22            preponderance of the evidence, both of the
23            following:
24                    (a) the person, during the same taxable
25                year, paid, accrued, or incurred, the interest
26                to a person that is not a related member, and

 

 

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1                    (b) the transaction giving rise to the
2                interest expense between the taxpayer and the
3                person did not have as a principal purpose the
4                avoidance of Illinois income tax, and is paid
5                pursuant to a contract or agreement that
6                reflects an arm's-length interest rate and
7                terms; or
8                (iii) the taxpayer can establish, based on
9            clear and convincing evidence, that the interest
10            paid, accrued, or incurred relates to a contract
11            or agreement entered into at arm's-length rates
12            and terms and the principal purpose for the
13            payment is not federal or Illinois tax avoidance;
14            or
15                (iv) an item of interest paid, accrued, or
16            incurred, directly or indirectly, to a person if
17            the taxpayer establishes by clear and convincing
18            evidence that the adjustments are unreasonable; or
19            if the taxpayer and the Director agree in writing
20            to the application or use of an alternative method
21            of apportionment under Section 304(f).
22                Nothing in this subsection shall preclude the
23            Director from making any other adjustment
24            otherwise allowed under Section 404 of this Act
25            for any tax year beginning after the effective
26            date of this amendment provided such adjustment is

 

 

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1            made pursuant to regulation adopted by the
2            Department and such regulations provide methods
3            and standards by which the Department will utilize
4            its authority under Section 404 of this Act;
5            (G-13) An amount equal to the amount of intangible
6        expenses and costs otherwise allowed as a deduction in
7        computing base income, and that were paid, accrued, or
8        incurred, directly or indirectly, (i) for taxable
9        years ending on or after December 31, 2004, to a
10        foreign person who would be a member of the same
11        unitary business group but for the fact that the
12        foreign person's business activity outside the United
13        States is 80% or more of that person's total business
14        activity and (ii) for taxable years ending on or after
15        December 31, 2008, to a person who would be a member of
16        the same unitary business group but for the fact that
17        the person is prohibited under Section 1501(a)(27)
18        from being included in the unitary business group
19        because he or she is ordinarily required to apportion
20        business income under different subsections of Section
21        304. The addition modification required by this
22        subparagraph shall be reduced to the extent that
23        dividends were included in base income of the unitary
24        group for the same taxable year and received by the
25        taxpayer or by a member of the taxpayer's unitary
26        business group (including amounts included in gross

 

 

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1        income pursuant to Sections 951 through 964 of the
2        Internal Revenue Code and amounts included in gross
3        income under Section 78 of the Internal Revenue Code)
4        with respect to the stock of the same person to whom
5        the intangible expenses and costs were directly or
6        indirectly paid, incurred, or accrued. The preceding
7        sentence shall not apply to the extent that the same
8        dividends caused a reduction to the addition
9        modification required under Section 203(c)(2)(G-12) of
10        this Act. As used in this subparagraph, the term
11        "intangible expenses and costs" includes: (1)
12        expenses, losses, and costs for or related to the
13        direct or indirect acquisition, use, maintenance or
14        management, ownership, sale, exchange, or any other
15        disposition of intangible property; (2) losses
16        incurred, directly or indirectly, from factoring
17        transactions or discounting transactions; (3) royalty,
18        patent, technical, and copyright fees; (4) licensing
19        fees; and (5) other similar expenses and costs. For
20        purposes of this subparagraph, "intangible property"
21        includes patents, patent applications, trade names,
22        trademarks, service marks, copyrights, mask works,
23        trade secrets, and similar types of intangible assets.
24            This paragraph shall not apply to the following:
25                (i) any item of intangible expenses or costs
26            paid, accrued, or incurred, directly or

 

 

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1            indirectly, from a transaction with a person who
2            is subject in a foreign country or state, other
3            than a state which requires mandatory unitary
4            reporting, to a tax on or measured by net income
5            with respect to such item; or
6                (ii) any item of intangible expense or cost
7            paid, accrued, or incurred, directly or
8            indirectly, if the taxpayer can establish, based
9            on a preponderance of the evidence, both of the
10            following:
11                    (a) the person during the same taxable
12                year paid, accrued, or incurred, the
13                intangible expense or cost to a person that is
14                not a related member, and
15                    (b) the transaction giving rise to the
16                intangible expense or cost between the
17                taxpayer and the person did not have as a
18                principal purpose the avoidance of Illinois
19                income tax, and is paid pursuant to a contract
20                or agreement that reflects arm's-length terms;
21                or
22                (iii) any item of intangible expense or cost
23            paid, accrued, or incurred, directly or
24            indirectly, from a transaction with a person if
25            the taxpayer establishes by clear and convincing
26            evidence, that the adjustments are unreasonable;

 

 

HB3914- 67 -LRB103 27153 HLH 53522 b

1            or if the taxpayer and the Director agree in
2            writing to the application or use of an
3            alternative method of apportionment under Section
4            304(f);
5                Nothing in this subsection shall preclude the
6            Director from making any other adjustment
7            otherwise allowed under Section 404 of this Act
8            for any tax year beginning after the effective
9            date of this amendment provided such adjustment is
10            made pursuant to regulation adopted by the
11            Department and such regulations provide methods
12            and standards by which the Department will utilize
13            its authority under Section 404 of this Act;
14            (G-14) For taxable years ending on or after
15        December 31, 2008, an amount equal to the amount of
16        insurance premium expenses and costs otherwise allowed
17        as a deduction in computing base income, and that were
18        paid, accrued, or incurred, directly or indirectly, to
19        a person who would be a member of the same unitary
20        business group but for the fact that the person is
21        prohibited under Section 1501(a)(27) from being
22        included in the unitary business group because he or
23        she is ordinarily required to apportion business
24        income under different subsections of Section 304. The
25        addition modification required by this subparagraph
26        shall be reduced to the extent that dividends were

 

 

HB3914- 68 -LRB103 27153 HLH 53522 b

1        included in base income of the unitary group for the
2        same taxable year and received by the taxpayer or by a
3        member of the taxpayer's unitary business group
4        (including amounts included in gross income under
5        Sections 951 through 964 of the Internal Revenue Code
6        and amounts included in gross income under Section 78
7        of the Internal Revenue Code) with respect to the
8        stock of the same person to whom the premiums and costs
9        were directly or indirectly paid, incurred, or
10        accrued. The preceding sentence does not apply to the
11        extent that the same dividends caused a reduction to
12        the addition modification required under Section
13        203(c)(2)(G-12) or Section 203(c)(2)(G-13) of this
14        Act;
15            (G-15) An amount equal to the credit allowable to
16        the taxpayer under Section 218(a) of this Act,
17        determined without regard to Section 218(c) of this
18        Act;
19            (G-16) For taxable years ending on or after
20        December 31, 2017, an amount equal to the deduction
21        allowed under Section 199 of the Internal Revenue Code
22        for the taxable year;
23    and by deducting from the total so obtained the sum of the
24    following amounts:
25            (H) An amount equal to all amounts included in
26        such total pursuant to the provisions of Sections

 

 

HB3914- 69 -LRB103 27153 HLH 53522 b

1        402(a), 402(c), 403(a), 403(b), 406(a), 407(a) and 408
2        of the Internal Revenue Code or included in such total
3        as distributions under the provisions of any
4        retirement or disability plan for employees of any
5        governmental agency or unit, or retirement payments to
6        retired partners, which payments are excluded in
7        computing net earnings from self employment by Section
8        1402 of the Internal Revenue Code and regulations
9        adopted pursuant thereto;
10            (I) The valuation limitation amount;
11            (J) An amount equal to the amount of any tax
12        imposed by this Act which was refunded to the taxpayer
13        and included in such total for the taxable year;
14            (K) An amount equal to all amounts included in
15        taxable income as modified by subparagraphs (A), (B),
16        (C), (D), (E), (F) and (G) which are exempt from
17        taxation by this State either by reason of its
18        statutes or Constitution or by reason of the
19        Constitution, treaties or statutes of the United
20        States; provided that, in the case of any statute of
21        this State that exempts income derived from bonds or
22        other obligations from the tax imposed under this Act,
23        the amount exempted shall be the interest net of bond
24        premium amortization;
25            (L) With the exception of any amounts subtracted
26        under subparagraph (K), an amount equal to the sum of

 

 

HB3914- 70 -LRB103 27153 HLH 53522 b

1        all amounts disallowed as deductions by (i) Sections
2        171(a)(2) and 265(a)(2) of the Internal Revenue Code,
3        and all amounts of expenses allocable to interest and
4        disallowed as deductions by Section 265(a)(1) of the
5        Internal Revenue Code; and (ii) for taxable years
6        ending on or after August 13, 1999, Sections
7        171(a)(2), 265, 280C, and 832(b)(5)(B)(i) of the
8        Internal Revenue Code, plus, (iii) for taxable years
9        ending on or after December 31, 2011, Section
10        45G(e)(3) of the Internal Revenue Code and, for
11        taxable years ending on or after December 31, 2008,
12        any amount included in gross income under Section 87
13        of the Internal Revenue Code; the provisions of this
14        subparagraph are exempt from the provisions of Section
15        250;
16            (M) An amount equal to those dividends included in
17        such total which were paid by a corporation which
18        conducts business operations in a River Edge
19        Redevelopment Zone or zones created under the River
20        Edge Redevelopment Zone Act and conducts substantially
21        all of its operations in a River Edge Redevelopment
22        Zone or zones. This subparagraph (M) is exempt from
23        the provisions of Section 250;
24            (N) An amount equal to any contribution made to a
25        job training project established pursuant to the Tax
26        Increment Allocation Redevelopment Act;

 

 

HB3914- 71 -LRB103 27153 HLH 53522 b

1            (O) An amount equal to those dividends included in
2        such total that were paid by a corporation that
3        conducts business operations in a federally designated
4        Foreign Trade Zone or Sub-Zone and that is designated
5        a High Impact Business located in Illinois; provided
6        that dividends eligible for the deduction provided in
7        subparagraph (M) of paragraph (2) of this subsection
8        shall not be eligible for the deduction provided under
9        this subparagraph (O);
10            (P) An amount equal to the amount of the deduction
11        used to compute the federal income tax credit for
12        restoration of substantial amounts held under claim of
13        right for the taxable year pursuant to Section 1341 of
14        the Internal Revenue Code;
15            (Q) For taxable year 1999 and thereafter, an
16        amount equal to the amount of any (i) distributions,
17        to the extent includible in gross income for federal
18        income tax purposes, made to the taxpayer because of
19        his or her status as a victim of persecution for racial
20        or religious reasons by Nazi Germany or any other Axis
21        regime or as an heir of the victim and (ii) items of
22        income, to the extent includible in gross income for
23        federal income tax purposes, attributable to, derived
24        from or in any way related to assets stolen from,
25        hidden from, or otherwise lost to a victim of
26        persecution for racial or religious reasons by Nazi

 

 

HB3914- 72 -LRB103 27153 HLH 53522 b

1        Germany or any other Axis regime immediately prior to,
2        during, and immediately after World War II, including,
3        but not limited to, interest on the proceeds
4        receivable as insurance under policies issued to a
5        victim of persecution for racial or religious reasons
6        by Nazi Germany or any other Axis regime by European
7        insurance companies immediately prior to and during
8        World War II; provided, however, this subtraction from
9        federal adjusted gross income does not apply to assets
10        acquired with such assets or with the proceeds from
11        the sale of such assets; provided, further, this
12        paragraph shall only apply to a taxpayer who was the
13        first recipient of such assets after their recovery
14        and who is a victim of persecution for racial or
15        religious reasons by Nazi Germany or any other Axis
16        regime or as an heir of the victim. The amount of and
17        the eligibility for any public assistance, benefit, or
18        similar entitlement is not affected by the inclusion
19        of items (i) and (ii) of this paragraph in gross income
20        for federal income tax purposes. This paragraph is
21        exempt from the provisions of Section 250;
22            (R) For taxable years 2001 and thereafter, for the
23        taxable year in which the bonus depreciation deduction
24        is taken on the taxpayer's federal income tax return
25        under subsection (k) of Section 168 of the Internal
26        Revenue Code and for each applicable taxable year

 

 

HB3914- 73 -LRB103 27153 HLH 53522 b

1        thereafter, an amount equal to "x", where:
2                (1) "y" equals the amount of the depreciation
3            deduction taken for the taxable year on the
4            taxpayer's federal income tax return on property
5            for which the bonus depreciation deduction was
6            taken in any year under subsection (k) of Section
7            168 of the Internal Revenue Code, but not
8            including the bonus depreciation deduction;
9                (2) for taxable years ending on or before
10            December 31, 2005, "x" equals "y" multiplied by 30
11            and then divided by 70 (or "y" multiplied by
12            0.429); and
13                (3) for taxable years ending after December
14            31, 2005:
15                    (i) for property on which a bonus
16                depreciation deduction of 30% of the adjusted
17                basis was taken, "x" equals "y" multiplied by
18                30 and then divided by 70 (or "y" multiplied
19                by 0.429);
20                    (ii) for property on which a bonus
21                depreciation deduction of 50% of the adjusted
22                basis was taken, "x" equals "y" multiplied by
23                1.0;
24                    (iii) for property on which a bonus
25                depreciation deduction of 100% of the adjusted
26                basis was taken in a taxable year ending on or

 

 

HB3914- 74 -LRB103 27153 HLH 53522 b

1                after December 31, 2021, "x" equals the
2                depreciation deduction that would be allowed
3                on that property if the taxpayer had made the
4                election under Section 168(k)(7) of the
5                Internal Revenue Code to not claim bonus
6                depreciation on that property; and
7                    (iv) for property on which a bonus
8                depreciation deduction of a percentage other
9                than 30%, 50% or 100% of the adjusted basis
10                was taken in a taxable year ending on or after
11                December 31, 2021, "x" equals "y" multiplied
12                by 100 times the percentage bonus depreciation
13                on the property (that is, 100(bonus%)) and
14                then divided by 100 times 1 minus the
15                percentage bonus depreciation on the property
16                (that is, 100(1–bonus%)).
17            The aggregate amount deducted under this
18        subparagraph in all taxable years for any one piece of
19        property may not exceed the amount of the bonus
20        depreciation deduction taken on that property on the
21        taxpayer's federal income tax return under subsection
22        (k) of Section 168 of the Internal Revenue Code. This
23        subparagraph (R) is exempt from the provisions of
24        Section 250;
25            (S) If the taxpayer sells, transfers, abandons, or
26        otherwise disposes of property for which the taxpayer

 

 

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1        was required in any taxable year to make an addition
2        modification under subparagraph (G-10), then an amount
3        equal to that addition modification.
4            If the taxpayer continues to own property through
5        the last day of the last tax year for which a
6        subtraction is allowed with respect to that property
7        under subparagraph (R) and for which the taxpayer was
8        required in any taxable year to make an addition
9        modification under subparagraph (G-10), then an amount
10        equal to that addition modification.
11            The taxpayer is allowed to take the deduction
12        under this subparagraph only once with respect to any
13        one piece of property.
14            This subparagraph (S) is exempt from the
15        provisions of Section 250;
16            (T) The amount of (i) any interest income (net of
17        the deductions allocable thereto) taken into account
18        for the taxable year with respect to a transaction
19        with a taxpayer that is required to make an addition
20        modification with respect to such transaction under
21        Section 203(a)(2)(D-17), 203(b)(2)(E-12),
22        203(c)(2)(G-12), or 203(d)(2)(D-7), but not to exceed
23        the amount of such addition modification and (ii) any
24        income from intangible property (net of the deductions
25        allocable thereto) taken into account for the taxable
26        year with respect to a transaction with a taxpayer

 

 

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1        that is required to make an addition modification with
2        respect to such transaction under Section
3        203(a)(2)(D-18), 203(b)(2)(E-13), 203(c)(2)(G-13), or
4        203(d)(2)(D-8), but not to exceed the amount of such
5        addition modification. This subparagraph (T) is exempt
6        from the provisions of Section 250;
7            (U) An amount equal to the interest income taken
8        into account for the taxable year (net of the
9        deductions allocable thereto) with respect to
10        transactions with (i) a foreign person who would be a
11        member of the taxpayer's unitary business group but
12        for the fact the foreign person's business activity
13        outside the United States is 80% or more of that
14        person's total business activity and (ii) for taxable
15        years ending on or after December 31, 2008, to a person
16        who would be a member of the same unitary business
17        group but for the fact that the person is prohibited
18        under Section 1501(a)(27) from being included in the
19        unitary business group because he or she is ordinarily
20        required to apportion business income under different
21        subsections of Section 304, but not to exceed the
22        addition modification required to be made for the same
23        taxable year under Section 203(c)(2)(G-12) for
24        interest paid, accrued, or incurred, directly or
25        indirectly, to the same person. This subparagraph (U)
26        is exempt from the provisions of Section 250;

 

 

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1            (V) An amount equal to the income from intangible
2        property taken into account for the taxable year (net
3        of the deductions allocable thereto) with respect to
4        transactions with (i) a foreign person who would be a
5        member of the taxpayer's unitary business group but
6        for the fact that the foreign person's business
7        activity outside the United States is 80% or more of
8        that person's total business activity and (ii) for
9        taxable years ending on or after December 31, 2008, to
10        a person who would be a member of the same unitary
11        business group but for the fact that the person is
12        prohibited under Section 1501(a)(27) from being
13        included in the unitary business group because he or
14        she is ordinarily required to apportion business
15        income under different subsections of Section 304, but
16        not to exceed the addition modification required to be
17        made for the same taxable year under Section
18        203(c)(2)(G-13) for intangible expenses and costs
19        paid, accrued, or incurred, directly or indirectly, to
20        the same foreign person. This subparagraph (V) is
21        exempt from the provisions of Section 250;
22            (W) in the case of an estate, an amount equal to
23        all amounts included in such total pursuant to the
24        provisions of Section 111 of the Internal Revenue Code
25        as a recovery of items previously deducted by the
26        decedent from adjusted gross income in the computation

 

 

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1        of taxable income. This subparagraph (W) is exempt
2        from Section 250;
3            (X) an amount equal to the refund included in such
4        total of any tax deducted for federal income tax
5        purposes, to the extent that deduction was added back
6        under subparagraph (F). This subparagraph (X) is
7        exempt from the provisions of Section 250;
8            (Y) For taxable years ending on or after December
9        31, 2011, in the case of a taxpayer who was required to
10        add back any insurance premiums under Section
11        203(c)(2)(G-14), such taxpayer may elect to subtract
12        that part of a reimbursement received from the
13        insurance company equal to the amount of the expense
14        or loss (including expenses incurred by the insurance
15        company) that would have been taken into account as a
16        deduction for federal income tax purposes if the
17        expense or loss had been uninsured. If a taxpayer
18        makes the election provided for by this subparagraph
19        (Y), the insurer to which the premiums were paid must
20        add back to income the amount subtracted by the
21        taxpayer pursuant to this subparagraph (Y). This
22        subparagraph (Y) is exempt from the provisions of
23        Section 250; and
24            (Z) For taxable years beginning after December 31,
25        2018 and before January 1, 2026, the amount of excess
26        business loss of the taxpayer disallowed as a

 

 

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1        deduction by Section 461(l)(1)(B) of the Internal
2        Revenue Code; and .
3            (AA) For taxable years beginning on or after
4        January 1, 2024, for any cannabis establishment
5        operating in this State and licensed under the
6        Cannabis Regulation and Tax Act or any cannabis
7        cultivation center or medical cannabis dispensing
8        organization operating in this State and licensed
9        under the Compassionate Use of Cannabis Program Act,
10        an amount equal to the deductions and credits that
11        were disallowed under Section 280E of the Internal
12        Revenue Code for the taxable year and that would not be
13        added back under this subsection. The provisions of
14        this subparagraph (AA) are exempt from the provisions
15        of Section 250.
16        (3) Limitation. The amount of any modification
17    otherwise required under this subsection shall, under
18    regulations prescribed by the Department, be adjusted by
19    any amounts included therein which were properly paid,
20    credited, or required to be distributed, or permanently
21    set aside for charitable purposes pursuant to Internal
22    Revenue Code Section 642(c) during the taxable year.
 
23    (d) Partnerships.
24        (1) In general. In the case of a partnership, base
25    income means an amount equal to the taxpayer's taxable

 

 

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1    income for the taxable year as modified by paragraph (2).
2        (2) Modifications. The taxable income referred to in
3    paragraph (1) shall be modified by adding thereto the sum
4    of the following amounts:
5            (A) An amount equal to all amounts paid or accrued
6        to the taxpayer as interest or dividends during the
7        taxable year to the extent excluded from gross income
8        in the computation of taxable income;
9            (B) An amount equal to the amount of tax imposed by
10        this Act to the extent deducted from gross income for
11        the taxable year;
12            (C) The amount of deductions allowed to the
13        partnership pursuant to Section 707 (c) of the
14        Internal Revenue Code in calculating its taxable
15        income;
16            (D) An amount equal to the amount of the capital
17        gain deduction allowable under the Internal Revenue
18        Code, to the extent deducted from gross income in the
19        computation of taxable income;
20            (D-5) For taxable years 2001 and thereafter, an
21        amount equal to the bonus depreciation deduction taken
22        on the taxpayer's federal income tax return for the
23        taxable year under subsection (k) of Section 168 of
24        the Internal Revenue Code;
25            (D-6) If the taxpayer sells, transfers, abandons,
26        or otherwise disposes of property for which the

 

 

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1        taxpayer was required in any taxable year to make an
2        addition modification under subparagraph (D-5), then
3        an amount equal to the aggregate amount of the
4        deductions taken in all taxable years under
5        subparagraph (O) with respect to that property.
6            If the taxpayer continues to own property through
7        the last day of the last tax year for which a
8        subtraction is allowed with respect to that property
9        under subparagraph (O) and for which the taxpayer was
10        allowed in any taxable year to make a subtraction
11        modification under subparagraph (O), then an amount
12        equal to that subtraction modification.
13            The taxpayer is required to make the addition
14        modification under this subparagraph only once with
15        respect to any one piece of property;
16            (D-7) An amount equal to the amount otherwise
17        allowed as a deduction in computing base income for
18        interest paid, accrued, or incurred, directly or
19        indirectly, (i) for taxable years ending on or after
20        December 31, 2004, to a foreign person who would be a
21        member of the same unitary business group but for the
22        fact the foreign person's business activity outside
23        the United States is 80% or more of the foreign
24        person's total business activity and (ii) for taxable
25        years ending on or after December 31, 2008, to a person
26        who would be a member of the same unitary business

 

 

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1        group but for the fact that the person is prohibited
2        under Section 1501(a)(27) from being included in the
3        unitary business group because he or she is ordinarily
4        required to apportion business income under different
5        subsections of Section 304. The addition modification
6        required by this subparagraph shall be reduced to the
7        extent that dividends were included in base income of
8        the unitary group for the same taxable year and
9        received by the taxpayer or by a member of the
10        taxpayer's unitary business group (including amounts
11        included in gross income pursuant to Sections 951
12        through 964 of the Internal Revenue Code and amounts
13        included in gross income under Section 78 of the
14        Internal Revenue Code) with respect to the stock of
15        the same person to whom the interest was paid,
16        accrued, or incurred.
17            This paragraph shall not apply to the following:
18                (i) an item of interest paid, accrued, or
19            incurred, directly or indirectly, to a person who
20            is subject in a foreign country or state, other
21            than a state which requires mandatory unitary
22            reporting, to a tax on or measured by net income
23            with respect to such interest; or
24                (ii) an item of interest paid, accrued, or
25            incurred, directly or indirectly, to a person if
26            the taxpayer can establish, based on a

 

 

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1            preponderance of the evidence, both of the
2            following:
3                    (a) the person, during the same taxable
4                year, paid, accrued, or incurred, the interest
5                to a person that is not a related member, and
6                    (b) the transaction giving rise to the
7                interest expense between the taxpayer and the
8                person did not have as a principal purpose the
9                avoidance of Illinois income tax, and is paid
10                pursuant to a contract or agreement that
11                reflects an arm's-length interest rate and
12                terms; or
13                (iii) the taxpayer can establish, based on
14            clear and convincing evidence, that the interest
15            paid, accrued, or incurred relates to a contract
16            or agreement entered into at arm's-length rates
17            and terms and the principal purpose for the
18            payment is not federal or Illinois tax avoidance;
19            or
20                (iv) an item of interest paid, accrued, or
21            incurred, directly or indirectly, to a person if
22            the taxpayer establishes by clear and convincing
23            evidence that the adjustments are unreasonable; or
24            if the taxpayer and the Director agree in writing
25            to the application or use of an alternative method
26            of apportionment under Section 304(f).

 

 

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1                Nothing in this subsection shall preclude the
2            Director from making any other adjustment
3            otherwise allowed under Section 404 of this Act
4            for any tax year beginning after the effective
5            date of this amendment provided such adjustment is
6            made pursuant to regulation adopted by the
7            Department and such regulations provide methods
8            and standards by which the Department will utilize
9            its authority under Section 404 of this Act; and
10            (D-8) An amount equal to the amount of intangible
11        expenses and costs otherwise allowed as a deduction in
12        computing base income, and that were paid, accrued, or
13        incurred, directly or indirectly, (i) for taxable
14        years ending on or after December 31, 2004, to a
15        foreign person who would be a member of the same
16        unitary business group but for the fact that the
17        foreign person's business activity outside the United
18        States is 80% or more of that person's total business
19        activity and (ii) for taxable years ending on or after
20        December 31, 2008, to a person who would be a member of
21        the same unitary business group but for the fact that
22        the person is prohibited under Section 1501(a)(27)
23        from being included in the unitary business group
24        because he or she is ordinarily required to apportion
25        business income under different subsections of Section
26        304. The addition modification required by this

 

 

HB3914- 85 -LRB103 27153 HLH 53522 b

1        subparagraph shall be reduced to the extent that
2        dividends were included in base income of the unitary
3        group for the same taxable year and received by the
4        taxpayer or by a member of the taxpayer's unitary
5        business group (including amounts included in gross
6        income pursuant to Sections 951 through 964 of the
7        Internal Revenue Code and amounts included in gross
8        income under Section 78 of the Internal Revenue Code)
9        with respect to the stock of the same person to whom
10        the intangible expenses and costs were directly or
11        indirectly paid, incurred or accrued. The preceding
12        sentence shall not apply to the extent that the same
13        dividends caused a reduction to the addition
14        modification required under Section 203(d)(2)(D-7) of
15        this Act. As used in this subparagraph, the term
16        "intangible expenses and costs" includes (1) expenses,
17        losses, and costs for, or related to, the direct or
18        indirect acquisition, use, maintenance or management,
19        ownership, sale, exchange, or any other disposition of
20        intangible property; (2) losses incurred, directly or
21        indirectly, from factoring transactions or discounting
22        transactions; (3) royalty, patent, technical, and
23        copyright fees; (4) licensing fees; and (5) other
24        similar expenses and costs. For purposes of this
25        subparagraph, "intangible property" includes patents,
26        patent applications, trade names, trademarks, service

 

 

HB3914- 86 -LRB103 27153 HLH 53522 b

1        marks, copyrights, mask works, trade secrets, and
2        similar types of intangible assets;
3            This paragraph shall not apply to the following:
4                (i) any item of intangible expenses or costs
5            paid, accrued, or incurred, directly or
6            indirectly, from a transaction with a person who
7            is subject in a foreign country or state, other
8            than a state which requires mandatory unitary
9            reporting, to a tax on or measured by net income
10            with respect to such item; or
11                (ii) any item of intangible expense or cost
12            paid, accrued, or incurred, directly or
13            indirectly, if the taxpayer can establish, based
14            on a preponderance of the evidence, both of the
15            following:
16                    (a) the person during the same taxable
17                year paid, accrued, or incurred, the
18                intangible expense or cost to a person that is
19                not a related member, and
20                    (b) the transaction giving rise to the
21                intangible expense or cost between the
22                taxpayer and the person did not have as a
23                principal purpose the avoidance of Illinois
24                income tax, and is paid pursuant to a contract
25                or agreement that reflects arm's-length terms;
26                or

 

 

HB3914- 87 -LRB103 27153 HLH 53522 b

1                (iii) any item of intangible expense or cost
2            paid, accrued, or incurred, directly or
3            indirectly, from a transaction with a person if
4            the taxpayer establishes by clear and convincing
5            evidence, that the adjustments are unreasonable;
6            or if the taxpayer and the Director agree in
7            writing to the application or use of an
8            alternative method of apportionment under Section
9            304(f);
10                Nothing in this subsection shall preclude the
11            Director from making any other adjustment
12            otherwise allowed under Section 404 of this Act
13            for any tax year beginning after the effective
14            date of this amendment provided such adjustment is
15            made pursuant to regulation adopted by the
16            Department and such regulations provide methods
17            and standards by which the Department will utilize
18            its authority under Section 404 of this Act;
19            (D-9) For taxable years ending on or after
20        December 31, 2008, an amount equal to the amount of
21        insurance premium expenses and costs otherwise allowed
22        as a deduction in computing base income, and that were
23        paid, accrued, or incurred, directly or indirectly, to
24        a person who would be a member of the same unitary
25        business group but for the fact that the person is
26        prohibited under Section 1501(a)(27) from being

 

 

HB3914- 88 -LRB103 27153 HLH 53522 b

1        included in the unitary business group because he or
2        she is ordinarily required to apportion business
3        income under different subsections of Section 304. The
4        addition modification required by this subparagraph
5        shall be reduced to the extent that dividends were
6        included in base income of the unitary group for the
7        same taxable year and received by the taxpayer or by a
8        member of the taxpayer's unitary business group
9        (including amounts included in gross income under
10        Sections 951 through 964 of the Internal Revenue Code
11        and amounts included in gross income under Section 78
12        of the Internal Revenue Code) with respect to the
13        stock of the same person to whom the premiums and costs
14        were directly or indirectly paid, incurred, or
15        accrued. The preceding sentence does not apply to the
16        extent that the same dividends caused a reduction to
17        the addition modification required under Section
18        203(d)(2)(D-7) or Section 203(d)(2)(D-8) of this Act;
19            (D-10) An amount equal to the credit allowable to
20        the taxpayer under Section 218(a) of this Act,
21        determined without regard to Section 218(c) of this
22        Act;
23            (D-11) For taxable years ending on or after
24        December 31, 2017, an amount equal to the deduction
25        allowed under Section 199 of the Internal Revenue Code
26        for the taxable year;

 

 

HB3914- 89 -LRB103 27153 HLH 53522 b

1    and by deducting from the total so obtained the following
2    amounts:
3            (E) The valuation limitation amount;
4            (F) An amount equal to the amount of any tax
5        imposed by this Act which was refunded to the taxpayer
6        and included in such total for the taxable year;
7            (G) An amount equal to all amounts included in
8        taxable income as modified by subparagraphs (A), (B),
9        (C) and (D) which are exempt from taxation by this
10        State either by reason of its statutes or Constitution
11        or by reason of the Constitution, treaties or statutes
12        of the United States; provided that, in the case of any
13        statute of this State that exempts income derived from
14        bonds or other obligations from the tax imposed under
15        this Act, the amount exempted shall be the interest
16        net of bond premium amortization;
17            (H) Any income of the partnership which
18        constitutes personal service income as defined in
19        Section 1348(b)(1) of the Internal Revenue Code (as in
20        effect December 31, 1981) or a reasonable allowance
21        for compensation paid or accrued for services rendered
22        by partners to the partnership, whichever is greater;
23        this subparagraph (H) is exempt from the provisions of
24        Section 250;
25            (I) An amount equal to all amounts of income
26        distributable to an entity subject to the Personal

 

 

HB3914- 90 -LRB103 27153 HLH 53522 b

1        Property Tax Replacement Income Tax imposed by
2        subsections (c) and (d) of Section 201 of this Act
3        including amounts distributable to organizations
4        exempt from federal income tax by reason of Section
5        501(a) of the Internal Revenue Code; this subparagraph
6        (I) is exempt from the provisions of Section 250;
7            (J) With the exception of any amounts subtracted
8        under subparagraph (G), an amount equal to the sum of
9        all amounts disallowed as deductions by (i) Sections
10        171(a)(2) and 265(a)(2) of the Internal Revenue Code,
11        and all amounts of expenses allocable to interest and
12        disallowed as deductions by Section 265(a)(1) of the
13        Internal Revenue Code; and (ii) for taxable years
14        ending on or after August 13, 1999, Sections
15        171(a)(2), 265, 280C, and 832(b)(5)(B)(i) of the
16        Internal Revenue Code, plus, (iii) for taxable years
17        ending on or after December 31, 2011, Section
18        45G(e)(3) of the Internal Revenue Code and, for
19        taxable years ending on or after December 31, 2008,
20        any amount included in gross income under Section 87
21        of the Internal Revenue Code; the provisions of this
22        subparagraph are exempt from the provisions of Section
23        250;
24            (K) An amount equal to those dividends included in
25        such total which were paid by a corporation which
26        conducts business operations in a River Edge

 

 

HB3914- 91 -LRB103 27153 HLH 53522 b

1        Redevelopment Zone or zones created under the River
2        Edge Redevelopment Zone Act and conducts substantially
3        all of its operations from a River Edge Redevelopment
4        Zone or zones. This subparagraph (K) is exempt from
5        the provisions of Section 250;
6            (L) An amount equal to any contribution made to a
7        job training project established pursuant to the Real
8        Property Tax Increment Allocation Redevelopment Act;
9            (M) An amount equal to those dividends included in
10        such total that were paid by a corporation that
11        conducts business operations in a federally designated
12        Foreign Trade Zone or Sub-Zone and that is designated
13        a High Impact Business located in Illinois; provided
14        that dividends eligible for the deduction provided in
15        subparagraph (K) of paragraph (2) of this subsection
16        shall not be eligible for the deduction provided under
17        this subparagraph (M);
18            (N) An amount equal to the amount of the deduction
19        used to compute the federal income tax credit for
20        restoration of substantial amounts held under claim of
21        right for the taxable year pursuant to Section 1341 of
22        the Internal Revenue Code;
23            (O) For taxable years 2001 and thereafter, for the
24        taxable year in which the bonus depreciation deduction
25        is taken on the taxpayer's federal income tax return
26        under subsection (k) of Section 168 of the Internal

 

 

HB3914- 92 -LRB103 27153 HLH 53522 b

1        Revenue Code and for each applicable taxable year
2        thereafter, an amount equal to "x", where:
3                (1) "y" equals the amount of the depreciation
4            deduction taken for the taxable year on the
5            taxpayer's federal income tax return on property
6            for which the bonus depreciation deduction was
7            taken in any year under subsection (k) of Section
8            168 of the Internal Revenue Code, but not
9            including the bonus depreciation deduction;
10                (2) for taxable years ending on or before
11            December 31, 2005, "x" equals "y" multiplied by 30
12            and then divided by 70 (or "y" multiplied by
13            0.429); and
14                (3) for taxable years ending after December
15            31, 2005:
16                    (i) for property on which a bonus
17                depreciation deduction of 30% of the adjusted
18                basis was taken, "x" equals "y" multiplied by
19                30 and then divided by 70 (or "y" multiplied
20                by 0.429);
21                    (ii) for property on which a bonus
22                depreciation deduction of 50% of the adjusted
23                basis was taken, "x" equals "y" multiplied by
24                1.0;
25                    (iii) for property on which a bonus
26                depreciation deduction of 100% of the adjusted

 

 

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1                basis was taken in a taxable year ending on or
2                after December 31, 2021, "x" equals the
3                depreciation deduction that would be allowed
4                on that property if the taxpayer had made the
5                election under Section 168(k)(7) of the
6                Internal Revenue Code to not claim bonus
7                depreciation on that property; and
8                    (iv) for property on which a bonus
9                depreciation deduction of a percentage other
10                than 30%, 50% or 100% of the adjusted basis
11                was taken in a taxable year ending on or after
12                December 31, 2021, "x" equals "y" multiplied
13                by 100 times the percentage bonus depreciation
14                on the property (that is, 100(bonus%)) and
15                then divided by 100 times 1 minus the
16                percentage bonus depreciation on the property
17                (that is, 100(1–bonus%)).
18            The aggregate amount deducted under this
19        subparagraph in all taxable years for any one piece of
20        property may not exceed the amount of the bonus
21        depreciation deduction taken on that property on the
22        taxpayer's federal income tax return under subsection
23        (k) of Section 168 of the Internal Revenue Code. This
24        subparagraph (O) is exempt from the provisions of
25        Section 250;
26            (P) If the taxpayer sells, transfers, abandons, or

 

 

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1        otherwise disposes of property for which the taxpayer
2        was required in any taxable year to make an addition
3        modification under subparagraph (D-5), then an amount
4        equal to that addition modification.
5            If the taxpayer continues to own property through
6        the last day of the last tax year for which a
7        subtraction is allowed with respect to that property
8        under subparagraph (O) and for which the taxpayer was
9        required in any taxable year to make an addition
10        modification under subparagraph (D-5), then an amount
11        equal to that addition modification.
12            The taxpayer is allowed to take the deduction
13        under this subparagraph only once with respect to any
14        one piece of property.
15            This subparagraph (P) is exempt from the
16        provisions of Section 250;
17            (Q) The amount of (i) any interest income (net of
18        the deductions allocable thereto) taken into account
19        for the taxable year with respect to a transaction
20        with a taxpayer that is required to make an addition
21        modification with respect to such transaction under
22        Section 203(a)(2)(D-17), 203(b)(2)(E-12),
23        203(c)(2)(G-12), or 203(d)(2)(D-7), but not to exceed
24        the amount of such addition modification and (ii) any
25        income from intangible property (net of the deductions
26        allocable thereto) taken into account for the taxable

 

 

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1        year with respect to a transaction with a taxpayer
2        that is required to make an addition modification with
3        respect to such transaction under Section
4        203(a)(2)(D-18), 203(b)(2)(E-13), 203(c)(2)(G-13), or
5        203(d)(2)(D-8), but not to exceed the amount of such
6        addition modification. This subparagraph (Q) is exempt
7        from Section 250;
8            (R) An amount equal to the interest income taken
9        into account for the taxable year (net of the
10        deductions allocable thereto) with respect to
11        transactions with (i) a foreign person who would be a
12        member of the taxpayer's unitary business group but
13        for the fact that the foreign person's business
14        activity outside the United States is 80% or more of
15        that person's total business activity and (ii) for
16        taxable years ending on or after December 31, 2008, to
17        a person who would be a member of the same unitary
18        business group but for the fact that the person is
19        prohibited under Section 1501(a)(27) from being
20        included in the unitary business group because he or
21        she is ordinarily required to apportion business
22        income under different subsections of Section 304, but
23        not to exceed the addition modification required to be
24        made for the same taxable year under Section
25        203(d)(2)(D-7) for interest paid, accrued, or
26        incurred, directly or indirectly, to the same person.

 

 

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1        This subparagraph (R) is exempt from Section 250;
2            (S) An amount equal to the income from intangible
3        property taken into account for the taxable year (net
4        of the deductions allocable thereto) with respect to
5        transactions with (i) a foreign person who would be a
6        member of the taxpayer's unitary business group but
7        for the fact that the foreign person's business
8        activity outside the United States is 80% or more of
9        that person's total business activity and (ii) for
10        taxable years ending on or after December 31, 2008, to
11        a person who would be a member of the same unitary
12        business group but for the fact that the person is
13        prohibited under Section 1501(a)(27) from being
14        included in the unitary business group because he or
15        she is ordinarily required to apportion business
16        income under different subsections of Section 304, but
17        not to exceed the addition modification required to be
18        made for the same taxable year under Section
19        203(d)(2)(D-8) for intangible expenses and costs paid,
20        accrued, or incurred, directly or indirectly, to the
21        same person. This subparagraph (S) is exempt from
22        Section 250; and
23            (T) For taxable years ending on or after December
24        31, 2011, in the case of a taxpayer who was required to
25        add back any insurance premiums under Section
26        203(d)(2)(D-9), such taxpayer may elect to subtract

 

 

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1        that part of a reimbursement received from the
2        insurance company equal to the amount of the expense
3        or loss (including expenses incurred by the insurance
4        company) that would have been taken into account as a
5        deduction for federal income tax purposes if the
6        expense or loss had been uninsured. If a taxpayer
7        makes the election provided for by this subparagraph
8        (T), the insurer to which the premiums were paid must
9        add back to income the amount subtracted by the
10        taxpayer pursuant to this subparagraph (T). This
11        subparagraph (T) is exempt from the provisions of
12        Section 250; and .
13            (U) For taxable years beginning on or after
14        January 1, 2024, for any cannabis establishment
15        operating in this State and licensed under the
16        Cannabis Regulation and Tax Act or any cannabis
17        cultivation center or medical cannabis dispensing
18        organization operating in this State and licensed
19        under the Compassionate Use of Cannabis Program Act,
20        an amount equal to the deductions and credits that
21        were disallowed under Section 280E of the Internal
22        Revenue Code for the taxable year and that would not be
23        added back under this subsection. The provisions of
24        this subparagraph (U) are exempt from the provisions
25        of Section 250.
 

 

 

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1    (e) Gross income; adjusted gross income; taxable income.
2        (1) In general. Subject to the provisions of paragraph
3    (2) and subsection (b)(3), for purposes of this Section
4    and Section 803(e), a taxpayer's gross income, adjusted
5    gross income, or taxable income for the taxable year shall
6    mean the amount of gross income, adjusted gross income or
7    taxable income properly reportable for federal income tax
8    purposes for the taxable year under the provisions of the
9    Internal Revenue Code. Taxable income may be less than
10    zero. However, for taxable years ending on or after
11    December 31, 1986, net operating loss carryforwards from
12    taxable years ending prior to December 31, 1986, may not
13    exceed the sum of federal taxable income for the taxable
14    year before net operating loss deduction, plus the excess
15    of addition modifications over subtraction modifications
16    for the taxable year. For taxable years ending prior to
17    December 31, 1986, taxable income may never be an amount
18    in excess of the net operating loss for the taxable year as
19    defined in subsections (c) and (d) of Section 172 of the
20    Internal Revenue Code, provided that when taxable income
21    of a corporation (other than a Subchapter S corporation),
22    trust, or estate is less than zero and addition
23    modifications, other than those provided by subparagraph
24    (E) of paragraph (2) of subsection (b) for corporations or
25    subparagraph (E) of paragraph (2) of subsection (c) for
26    trusts and estates, exceed subtraction modifications, an

 

 

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1    addition modification must be made under those
2    subparagraphs for any other taxable year to which the
3    taxable income less than zero (net operating loss) is
4    applied under Section 172 of the Internal Revenue Code or
5    under subparagraph (E) of paragraph (2) of this subsection
6    (e) applied in conjunction with Section 172 of the
7    Internal Revenue Code.
8        (2) Special rule. For purposes of paragraph (1) of
9    this subsection, the taxable income properly reportable
10    for federal income tax purposes shall mean:
11            (A) Certain life insurance companies. In the case
12        of a life insurance company subject to the tax imposed
13        by Section 801 of the Internal Revenue Code, life
14        insurance company taxable income, plus the amount of
15        distribution from pre-1984 policyholder surplus
16        accounts as calculated under Section 815a of the
17        Internal Revenue Code;
18            (B) Certain other insurance companies. In the case
19        of mutual insurance companies subject to the tax
20        imposed by Section 831 of the Internal Revenue Code,
21        insurance company taxable income;
22            (C) Regulated investment companies. In the case of
23        a regulated investment company subject to the tax
24        imposed by Section 852 of the Internal Revenue Code,
25        investment company taxable income;
26            (D) Real estate investment trusts. In the case of

 

 

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1        a real estate investment trust subject to the tax
2        imposed by Section 857 of the Internal Revenue Code,
3        real estate investment trust taxable income;
4            (E) Consolidated corporations. In the case of a
5        corporation which is a member of an affiliated group
6        of corporations filing a consolidated income tax
7        return for the taxable year for federal income tax
8        purposes, taxable income determined as if such
9        corporation had filed a separate return for federal
10        income tax purposes for the taxable year and each
11        preceding taxable year for which it was a member of an
12        affiliated group. For purposes of this subparagraph,
13        the taxpayer's separate taxable income shall be
14        determined as if the election provided by Section
15        243(b)(2) of the Internal Revenue Code had been in
16        effect for all such years;
17            (F) Cooperatives. In the case of a cooperative
18        corporation or association, the taxable income of such
19        organization determined in accordance with the
20        provisions of Section 1381 through 1388 of the
21        Internal Revenue Code, but without regard to the
22        prohibition against offsetting losses from patronage
23        activities against income from nonpatronage
24        activities; except that a cooperative corporation or
25        association may make an election to follow its federal
26        income tax treatment of patronage losses and

 

 

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1        nonpatronage losses. In the event such election is
2        made, such losses shall be computed and carried over
3        in a manner consistent with subsection (a) of Section
4        207 of this Act and apportioned by the apportionment
5        factor reported by the cooperative on its Illinois
6        income tax return filed for the taxable year in which
7        the losses are incurred. The election shall be
8        effective for all taxable years with original returns
9        due on or after the date of the election. In addition,
10        the cooperative may file an amended return or returns,
11        as allowed under this Act, to provide that the
12        election shall be effective for losses incurred or
13        carried forward for taxable years occurring prior to
14        the date of the election. Once made, the election may
15        only be revoked upon approval of the Director. The
16        Department shall adopt rules setting forth
17        requirements for documenting the elections and any
18        resulting Illinois net loss and the standards to be
19        used by the Director in evaluating requests to revoke
20        elections. Public Act 96-932 is declaratory of
21        existing law;
22            (G) Subchapter S corporations. In the case of: (i)
23        a Subchapter S corporation for which there is in
24        effect an election for the taxable year under Section
25        1362 of the Internal Revenue Code, the taxable income
26        of such corporation determined in accordance with

 

 

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1        Section 1363(b) of the Internal Revenue Code, except
2        that taxable income shall take into account those
3        items which are required by Section 1363(b)(1) of the
4        Internal Revenue Code to be separately stated; and
5        (ii) a Subchapter S corporation for which there is in
6        effect a federal election to opt out of the provisions
7        of the Subchapter S Revision Act of 1982 and have
8        applied instead the prior federal Subchapter S rules
9        as in effect on July 1, 1982, the taxable income of
10        such corporation determined in accordance with the
11        federal Subchapter S rules as in effect on July 1,
12        1982; and
13            (H) Partnerships. In the case of a partnership,
14        taxable income determined in accordance with Section
15        703 of the Internal Revenue Code, except that taxable
16        income shall take into account those items which are
17        required by Section 703(a)(1) to be separately stated
18        but which would be taken into account by an individual
19        in calculating his taxable income.
20        (3) Recapture of business expenses on disposition of
21    asset or business. Notwithstanding any other law to the
22    contrary, if in prior years income from an asset or
23    business has been classified as business income and in a
24    later year is demonstrated to be non-business income, then
25    all expenses, without limitation, deducted in such later
26    year and in the 2 immediately preceding taxable years

 

 

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1    related to that asset or business that generated the
2    non-business income shall be added back and recaptured as
3    business income in the year of the disposition of the
4    asset or business. Such amount shall be apportioned to
5    Illinois using the greater of the apportionment fraction
6    computed for the business under Section 304 of this Act
7    for the taxable year or the average of the apportionment
8    fractions computed for the business under Section 304 of
9    this Act for the taxable year and for the 2 immediately
10    preceding taxable years.
 
11    (f) Valuation limitation amount.
12        (1) In general. The valuation limitation amount
13    referred to in subsections (a)(2)(G), (c)(2)(I) and
14    (d)(2)(E) is an amount equal to:
15            (A) The sum of the pre-August 1, 1969 appreciation
16        amounts (to the extent consisting of gain reportable
17        under the provisions of Section 1245 or 1250 of the
18        Internal Revenue Code) for all property in respect of
19        which such gain was reported for the taxable year;
20        plus
21            (B) The lesser of (i) the sum of the pre-August 1,
22        1969 appreciation amounts (to the extent consisting of
23        capital gain) for all property in respect of which
24        such gain was reported for federal income tax purposes
25        for the taxable year, or (ii) the net capital gain for

 

 

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1        the taxable year, reduced in either case by any amount
2        of such gain included in the amount determined under
3        subsection (a)(2)(F) or (c)(2)(H).
4        (2) Pre-August 1, 1969 appreciation amount.
5            (A) If the fair market value of property referred
6        to in paragraph (1) was readily ascertainable on
7        August 1, 1969, the pre-August 1, 1969 appreciation
8        amount for such property is the lesser of (i) the
9        excess of such fair market value over the taxpayer's
10        basis (for determining gain) for such property on that
11        date (determined under the Internal Revenue Code as in
12        effect on that date), or (ii) the total gain realized
13        and reportable for federal income tax purposes in
14        respect of the sale, exchange or other disposition of
15        such property.
16            (B) If the fair market value of property referred
17        to in paragraph (1) was not readily ascertainable on
18        August 1, 1969, the pre-August 1, 1969 appreciation
19        amount for such property is that amount which bears
20        the same ratio to the total gain reported in respect of
21        the property for federal income tax purposes for the
22        taxable year, as the number of full calendar months in
23        that part of the taxpayer's holding period for the
24        property ending July 31, 1969 bears to the number of
25        full calendar months in the taxpayer's entire holding
26        period for the property.

 

 

HB3914- 105 -LRB103 27153 HLH 53522 b

1            (C) The Department shall prescribe such
2        regulations as may be necessary to carry out the
3        purposes of this paragraph.
 
4    (g) Double deductions. Unless specifically provided
5otherwise, nothing in this Section shall permit the same item
6to be deducted more than once.
 
7    (h) Legislative intention. Except as expressly provided by
8this Section there shall be no modifications or limitations on
9the amounts of income, gain, loss or deduction taken into
10account in determining gross income, adjusted gross income or
11taxable income for federal income tax purposes for the taxable
12year, or in the amount of such items entering into the
13computation of base income and net income under this Act for
14such taxable year, whether in respect of property values as of
15August 1, 1969 or otherwise.
16(Source: P.A. 101-9, eff. 6-5-19; 101-81, eff. 7-12-19;
17102-16, eff. 6-17-21; 102-558, eff. 8-20-21; 102-658, eff.
188-27-21; 102-813, eff. 5-13-22; 102-1112, eff. 12-21-22.)
 
19    Section 10. The Civic Center Code is amended by changing
20Section 245-12 as follows:
 
21    (70 ILCS 200/245-12)
22    Sec. 245-12. Use and occupation taxes.

 

 

HB3914- 106 -LRB103 27153 HLH 53522 b

1    (a) The Authority may adopt a resolution that authorizes a
2referendum on the question of whether the Authority shall be
3authorized to impose a retailers' occupation tax, a service
4occupation tax, and a use tax in one-quarter percent
5increments at a rate not to exceed 1%. The Authority shall
6certify the question to the proper election authorities who
7shall submit the question to the voters of the metropolitan
8area at the next regularly scheduled election in accordance
9with the general election law. The question shall be in
10substantially the following form:
11    "Shall the Salem Civic Center Authority be authorized to
12    impose a retailers' occupation tax, a service occupation
13    tax, and a use tax at the rate of (rate) for the sole
14    purpose of obtaining funds for the support, construction,
15    maintenance, or financing of a facility of the Authority?"
16    Votes shall be recorded as "yes" or "no".
17    If a majority of all votes cast on the proposition are in
18favor of the proposition, the Authority is authorized to
19impose the tax.
20    (b) The Authority shall impose the retailers' occupation
21tax upon all persons engaged in the business of selling
22tangible personal property at retail in the metropolitan area,
23at the rate approved by referendum, on the gross receipts from
24the sales made in the course of such business within the
25metropolitan area. Beginning December 1, 2019 and through
26December 31, 2020, this tax is not imposed on sales of aviation

 

 

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1fuel unless the tax revenue is expended for airport-related
2purposes. If the Authority does not have an airport-related
3purpose to which it dedicates aviation fuel tax revenue, then
4aviation fuel is excluded from the tax. The Authority must
5comply with the certification requirements for airport-related
6purposes under Section 2-22 of the Retailers' Occupation Tax
7Act. For purposes of this Section, "airport-related purposes"
8has the meaning ascribed in Section 6z-20.2 of the State
9Finance Act. Beginning January 1, 2021, this tax is not
10imposed on sales of aviation fuel for so long as the revenue
11use requirements of 49 U.S.C. 47107(b) and 49 U.S.C. 47133 are
12binding on the Authority.
13    The tax imposed under this Section and all civil penalties
14that may be assessed as an incident thereof shall be collected
15and enforced by the Department of Revenue. The Department has
16full power to administer and enforce this Section; to collect
17all taxes and penalties so collected in the manner provided in
18this Section; and to determine all rights to credit memoranda
19arising on account of the erroneous payment of tax or penalty
20hereunder. In the administration of, and compliance with, this
21Section, the Department and persons who are subject to this
22Section shall (i) have the same rights, remedies, privileges,
23immunities, powers and duties, (ii) be subject to the same
24conditions, restrictions, limitations, penalties, exclusions,
25exemptions, and definitions of terms, and (iii) employ the
26same modes of procedure as are prescribed in Sections 1, 1a,

 

 

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11a-1, 1c, 1d, 1e, 1f, 1i, 1j, 1k, 1m, 1n, 2, 2-5, 2-5.5, 2-10
2(in respect to all provisions therein other than the State
3rate of tax), 2-12, 2-15 through 2-70, 2a, 2b, 2c, 3 (except as
4to the disposition of taxes and penalties collected and
5provisions related to quarter monthly payments, and except
6that the retailer's discount is not allowed for taxes paid on
7aviation fuel that are subject to the revenue use requirements
8of 49 U.S.C. 47107(b) and 49 U.S.C. 47133), 4, 5, 5a, 5b, 5c,
95d, 5e, 5f, 5g, 5i, 5j, 5k, 5l, 6, 6a, 6b, 6c, 7, 8, 9, 10, 11,
1011a, 12, and 13 of the Retailers' Occupation Tax Act and
11Section 3-7 of the Uniform Penalty and Interest Act, as fully
12as if those provisions were set forth in this subsection.
13    Persons subject to any tax imposed under this subsection
14may reimburse themselves for their seller's tax liability by
15separately stating the tax as an additional charge, which
16charge may be stated in combination, in a single amount, with
17State taxes that sellers are required to collect, in
18accordance with such bracket schedules as the Department may
19prescribe.
20    Whenever the Department determines that a refund should be
21made under this subsection to a claimant instead of issuing a
22credit memorandum, the Department shall notify the State
23Comptroller, who shall cause the warrant to be drawn for the
24amount specified, and to the person named, in the notification
25from the Department. The refund shall be paid by the State
26Treasurer out of the tax fund referenced under paragraph (g)

 

 

HB3914- 109 -LRB103 27153 HLH 53522 b

1of this Section or the Local Government Aviation Trust Fund,
2as appropriate.
3    If a tax is imposed under this subsection (b), a tax shall
4also be imposed at the same rate under subsections (c) and (d)
5of this Section.
6    For the purpose of determining whether a tax authorized
7under this Section is applicable, a retail sale, by a producer
8of coal or other mineral mined in Illinois, is a sale at retail
9at the place where the coal or other mineral mined in Illinois
10is extracted from the earth. This paragraph does not apply to
11coal or other mineral when it is delivered or shipped by the
12seller to the purchaser at a point outside Illinois so that the
13sale is exempt under the Federal Constitution as a sale in
14interstate or foreign commerce.
15    Nothing in this Section shall be construed to authorize
16the Authority to impose a tax upon the privilege of engaging in
17any business which under the Constitution of the United States
18may not be made the subject of taxation by this State.
19    (c) If a tax has been imposed under subsection (b), a
20service occupation tax shall also be imposed at the same rate
21upon all persons engaged, in the metropolitan area, in the
22business of making sales of service, who, as an incident to
23making those sales of service, transfer tangible personal
24property within the metropolitan area as an incident to a sale
25of service. The tax imposed under this subsection and all
26civil penalties that may be assessed as an incident thereof

 

 

HB3914- 110 -LRB103 27153 HLH 53522 b

1shall be collected and enforced by the Department of Revenue.
2    Beginning December 1, 2019 and through December 31, 2020,
3this tax is not imposed on sales of aviation fuel unless the
4tax revenue is expended for airport-related purposes. If the
5Authority does not have an airport-related purpose to which it
6dedicates aviation fuel tax revenue, then aviation fuel is
7excluded from the tax. The Authority must comply with the
8certification requirements for airport-related purposes under
9Section 2-22 of the Retailers' Occupation Tax Act. Beginning
10January 1, 2021, this tax is not imposed on sales of aviation
11fuel for so long as the revenue use requirements of 49 U.S.C.
1247107(b) and 49 U.S.C. 47133 are binding on the Authority.
13    The Department has full power to administer and enforce
14this paragraph; to collect all taxes and penalties due
15hereunder; to dispose of taxes and penalties so collected in
16the manner hereinafter provided; and to determine all rights
17to credit memoranda arising on account of the erroneous
18payment of tax or penalty hereunder. In the administration of,
19and compliance with this paragraph, the Department and persons
20who are subject to this paragraph shall (i) have the same
21rights, remedies, privileges, immunities, powers, and duties,
22(ii) be subject to the same conditions, restrictions,
23limitations, penalties, exclusions, exemptions, and
24definitions of terms, and (iii) employ the same modes of
25procedure as are prescribed in Sections 2 (except that the
26reference to State in the definition of supplier maintaining a

 

 

HB3914- 111 -LRB103 27153 HLH 53522 b

1place of business in this State shall mean the metropolitan
2area), 2a, 2b, 3 through 3-55 (in respect to all provisions
3therein other than the State rate of tax), 4 (except that the
4reference to the State shall be to the Authority), 5, 7, 8
5(except that the jurisdiction to which the tax shall be a debt
6to the extent indicated in that Section 8 shall be the
7Authority), 9 (except as to the disposition of taxes and
8penalties collected, and except that the returned merchandise
9credit for this tax may not be taken against any State tax, and
10except that the retailer's discount is not allowed for taxes
11paid on aviation fuel that are subject to the revenue use
12requirements of 49 U.S.C. 47107(b) and 49 U.S.C. 47133), 11,
1312 (except the reference therein to Section 2b of the
14Retailers' Occupation Tax Act), 13 (except that any reference
15to the State shall mean the Authority), 15, 16, 17, 18, 19 and
1620 of the Service Occupation Tax Act and Section 3-7 of the
17Uniform Penalty and Interest Act, as fully as if those
18provisions were set forth herein.
19    Persons subject to any tax imposed under the authority
20granted in this subsection may reimburse themselves for their
21serviceman's tax liability by separately stating the tax as an
22additional charge, which charge may be stated in combination,
23in a single amount, with State tax that servicemen are
24authorized to collect under the Service Use Tax Act, in
25accordance with such bracket schedules as the Department may
26prescribe.

 

 

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1    Whenever the Department determines that a refund should be
2made under this subsection to a claimant instead of issuing a
3credit memorandum, the Department shall notify the State
4Comptroller, who shall cause the warrant to be drawn for the
5amount specified, and to the person named, in the notification
6from the Department. The refund shall be paid by the State
7Treasurer out of the tax fund referenced under paragraph (g)
8of this Section or the Local Government Aviation Trust Fund,
9as appropriate.
10    Nothing in this paragraph shall be construed to authorize
11the Authority to impose a tax upon the privilege of engaging in
12any business which under the Constitution of the United States
13may not be made the subject of taxation by the State.
14    (d) If a tax has been imposed under subsection (b), a use
15tax shall also be imposed at the same rate upon the privilege
16of using, in the metropolitan area, any item of tangible
17personal property that is purchased outside the metropolitan
18area at retail from a retailer, and that is titled or
19registered at a location within the metropolitan area with an
20agency of this State's government. "Selling price" is defined
21as in the Use Tax Act. The tax shall be collected from persons
22whose Illinois address for titling or registration purposes is
23given as being in the metropolitan area. The tax shall be
24collected by the Department of Revenue for the Authority. The
25tax must be paid to the State, or an exemption determination
26must be obtained from the Department of Revenue, before the

 

 

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1title or certificate of registration for the property may be
2issued. The tax or proof of exemption may be transmitted to the
3Department by way of the State agency with which, or the State
4officer with whom, the tangible personal property must be
5titled or registered if the Department and the State agency or
6State officer determine that this procedure will expedite the
7processing of applications for title or registration.
8    The Department has full power to administer and enforce
9this paragraph; to collect all taxes, penalties and interest
10due hereunder; to dispose of taxes, penalties and interest so
11collected in the manner hereinafter provided; and to determine
12all rights to credit memoranda or refunds arising on account
13of the erroneous payment of tax, penalty or interest
14hereunder. In the administration of, and compliance with, this
15subsection, the Department and persons who are subject to this
16paragraph shall (i) have the same rights, remedies,
17privileges, immunities, powers, and duties, (ii) be subject to
18the same conditions, restrictions, limitations, penalties,
19exclusions, exemptions, and definitions of terms, and (iii)
20employ the same modes of procedure as are prescribed in
21Sections 2 (except the definition of "retailer maintaining a
22place of business in this State"), 3, 3-5, 3-10, 3-45, 3-55,
233-65, 3-70, 3-85, 3a, 4, 6, 7, 8 (except that the jurisdiction
24to which the tax shall be a debt to the extent indicated in
25that Section 8 shall be the Authority), 9 (except provisions
26relating to quarter monthly payments), 10, 11, 12, 12a, 12b,

 

 

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113, 14, 15, 19, 20, 21, and 22 of the Use Tax Act and Section
23-7 of the Uniform Penalty and Interest Act, that are not
3inconsistent with this paragraph, as fully as if those
4provisions were set forth herein.
5    Whenever the Department determines that a refund should be
6made under this subsection to a claimant instead of issuing a
7credit memorandum, the Department shall notify the State
8Comptroller, who shall cause the order to be drawn for the
9amount specified, and to the person named, in the notification
10from the Department. The refund shall be paid by the State
11Treasurer out of the tax fund referenced under paragraph (g)
12of this Section.
13    (e) A certificate of registration issued by the State
14Department of Revenue to a retailer under the Retailers'
15Occupation Tax Act or under the Service Occupation Tax Act
16shall permit the registrant to engage in a business that is
17taxed under the tax imposed under paragraphs (b), (c), or (d)
18of this Section and no additional registration shall be
19required. A certificate issued under the Use Tax Act or the
20Service Use Tax Act shall be applicable with regard to any tax
21imposed under paragraph (c) of this Section.
22    (f) The results of any election authorizing a proposition
23to impose a tax under this Section or effecting a change in the
24rate of tax shall be certified by the proper election
25authorities and filed with the Illinois Department on or
26before the first day of April. In addition, an ordinance

 

 

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1imposing, discontinuing, or effecting a change in the rate of
2tax under this Section shall be adopted and a certified copy
3thereof filed with the Department on or before the first day of
4April. After proper receipt of such certifications, the
5Department shall proceed to administer and enforce this
6Section as of the first day of July next following such
7adoption and filing.
8    (g) Except as otherwise provided, the Department of
9Revenue shall, upon collecting any taxes and penalties as
10provided in this Section, pay the taxes and penalties over to
11the State Treasurer as trustee for the Authority. The taxes
12and penalties shall be held in a trust fund outside the State
13Treasury. Taxes and penalties collected on aviation fuel sold
14on or after December 1, 2019 and through December 31, 2020,
15shall be immediately paid over by the Department to the State
16Treasurer, ex officio, as trustee, for deposit into the Local
17Government Aviation Trust Fund. The Department shall only pay
18moneys into the Local Government Aviation Trust Fund under
19this Section for so long as the revenue use requirements of 49
20U.S.C. 47107(b) and 49 U.S.C. 47133 are binding on the
21District. On or before the 25th day of each calendar month, the
22Department of Revenue shall prepare and certify to the
23Comptroller of the State of Illinois the amount to be paid to
24the Authority, which shall be the balance in the fund, less any
25amount determined by the Department to be necessary for the
26payment of refunds and not including taxes and penalties

 

 

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1collected on aviation fuel sold on or after December 1, 2019.
2Within 10 days after receipt by the Comptroller of the
3certification of the amount to be paid to the Authority, the
4Comptroller shall cause an order to be drawn for payment for
5the amount in accordance with the directions contained in the
6certification. Amounts received from the tax imposed under
7this Section shall be used only for the support, construction,
8maintenance, or financing of a facility of the Authority.
9    (h) When certifying the amount of a monthly disbursement
10to the Authority under this Section, the Department shall
11increase or decrease the amounts by an amount necessary to
12offset any miscalculation of previous disbursements. The
13offset amount shall be the amount erroneously disbursed within
14the previous 6 months from the time a miscalculation is
15discovered.
16    (h-1) Notwithstanding any other provision of law, no tax
17may be imposed under this Section on the sale or use of
18cannabis, as defined in Section 1-10 of the Cannabis
19Regulation and Tax Act.
20    (i) This Section may be cited as the Salem Civic Center Use
21and Occupation Tax Law.
22(Source: P.A. 101-10, eff. 6-5-19; 101-604, eff. 12-13-19.)
 
23    Section 15. The Flood Prevention District Act is amended
24by changing Section 25 as follows:
 

 

 

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1    (70 ILCS 750/25)
2    Sec. 25. Flood prevention retailers' and service
3occupation taxes.
4    (a) If the Board of Commissioners of a flood prevention
5district determines that an emergency situation exists
6regarding levee repair or flood prevention, and upon an
7ordinance confirming the determination adopted by the
8affirmative vote of a majority of the members of the county
9board of the county in which the district is situated, the
10county may impose a flood prevention retailers' occupation tax
11upon all persons engaged in the business of selling tangible
12personal property at retail within the territory of the
13district to provide revenue to pay the costs of providing
14emergency levee repair and flood prevention and to secure the
15payment of bonds, notes, and other evidences of indebtedness
16issued under this Act for a period not to exceed 25 years or as
17required to repay the bonds, notes, and other evidences of
18indebtedness issued under this Act. The tax rate shall be
190.25% of the gross receipts from all taxable sales made in the
20course of that business. Beginning December 1, 2019 and
21through December 31, 2020, this tax is not imposed on sales of
22aviation fuel unless the tax revenue is expended for
23airport-related purposes. If the District does not have an
24airport-related purpose to which it dedicates aviation fuel
25tax revenue, then aviation fuel is excluded from the tax. The
26County must comply with the certification requirements for

 

 

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1airport-related purposes under Section 2-22 of the Retailers'
2Occupation Tax Act. The tax imposed under this Section and all
3civil penalties that may be assessed as an incident thereof
4shall be collected and enforced by the State Department of
5Revenue. The Department shall have full power to administer
6and enforce this Section; to collect all taxes and penalties
7so collected in the manner hereinafter provided; and to
8determine all rights to credit memoranda arising on account of
9the erroneous payment of tax or penalty hereunder.
10    For purposes of this Act, "airport-related purposes" has
11the meaning ascribed in Section 6z-20.2 of the State Finance
12Act. Beginning January 1, 2021, this tax is not imposed on
13sales of aviation fuel for so long as the revenue use
14requirements of 49 U.S.C. 47107(b) and 49 U.S.C. 47133 are
15binding on the District.
16    In the administration of and compliance with this
17subsection, the Department and persons who are subject to this
18subsection (i) have the same rights, remedies, privileges,
19immunities, powers, and duties, (ii) are subject to the same
20conditions, restrictions, limitations, penalties, and
21definitions of terms, and (iii) shall employ the same modes of
22procedure as are set forth in Sections 1 through 1o, 2 through
232-70 (in respect to all provisions contained in those Sections
24other than the State rate of tax), 2a through 2h, 3 (except as
25to the disposition of taxes and penalties collected, and
26except that the retailer's discount is not allowed for taxes

 

 

HB3914- 119 -LRB103 27153 HLH 53522 b

1paid on aviation fuel that are subject to the revenue use
2requirements of 49 U.S.C. 47107(b) and 49 U.S.C. 47133), 4, 5,
35a, 5b, 5c, 5d, 5e, 5f, 5g, 5h, 5i, 5l, 6, 6a, 6b, 6c, 6d, 7,
48, 9, 10, 11, 11a, 12, and 13 of the Retailers' Occupation Tax
5Act and all provisions of the Uniform Penalty and Interest Act
6as if those provisions were set forth in this subsection.
7    Persons subject to any tax imposed under this Section may
8reimburse themselves for their seller's tax liability
9hereunder by separately stating the tax as an additional
10charge, which charge may be stated in combination in a single
11amount with State taxes that sellers are required to collect
12under the Use Tax Act, under any bracket schedules the
13Department may prescribe.
14    If a tax is imposed under this subsection (a), a tax shall
15also be imposed under subsection (b) of this Section.
16    (b) If a tax has been imposed under subsection (a), a flood
17prevention service occupation tax shall also be imposed upon
18all persons engaged within the territory of the district in
19the business of making sales of service, who, as an incident to
20making the sales of service, transfer tangible personal
21property, either in the form of tangible personal property or
22in the form of real estate as an incident to a sale of service
23to provide revenue to pay the costs of providing emergency
24levee repair and flood prevention and to secure the payment of
25bonds, notes, and other evidences of indebtedness issued under
26this Act for a period not to exceed 25 years or as required to

 

 

HB3914- 120 -LRB103 27153 HLH 53522 b

1repay the bonds, notes, and other evidences of indebtedness.
2The tax rate shall be 0.25% of the selling price of all
3tangible personal property transferred. Beginning December 1,
42019 and through December 31, 2020, this tax is not imposed on
5sales of aviation fuel unless the tax revenue is expended for
6airport-related purposes. If the District does not have an
7airport-related purpose to which it dedicates aviation fuel
8tax revenue, then aviation fuel is excluded from the tax. The
9County must comply with the certification requirements for
10airport-related purposes under Section 2-22 of the Retailers'
11Occupation Tax Act. For purposes of this Act, "airport-related
12purposes" has the meaning ascribed in Section 6z-20.2 of the
13State Finance Act. Beginning January 1, 2021, this tax is not
14imposed on sales of aviation fuel for so long as the revenue
15use requirements of 49 U.S.C. 47107(b) and 49 U.S.C. 47133 are
16binding on the District.
17    The tax imposed under this subsection and all civil
18penalties that may be assessed as an incident thereof shall be
19collected and enforced by the State Department of Revenue. The
20Department shall have full power to administer and enforce
21this subsection; to collect all taxes and penalties due
22hereunder; to dispose of taxes and penalties collected in the
23manner hereinafter provided; and to determine all rights to
24credit memoranda arising on account of the erroneous payment
25of tax or penalty hereunder.
26    In the administration of and compliance with this

 

 

HB3914- 121 -LRB103 27153 HLH 53522 b

1subsection, the Department and persons who are subject to this
2subsection shall (i) have the same rights, remedies,
3privileges, immunities, powers, and duties, (ii) be subject to
4the same conditions, restrictions, limitations, penalties, and
5definitions of terms, and (iii) employ the same modes of
6procedure as are set forth in Sections 2 (except that the
7reference to State in the definition of supplier maintaining a
8place of business in this State means the district), 2a
9through 2d, 3 through 3-50 (in respect to all provisions
10contained in those Sections other than the State rate of tax),
114 (except that the reference to the State shall be to the
12district), 5, 7, 8 (except that the jurisdiction to which the
13tax is a debt to the extent indicated in that Section 8 is the
14district), 9 (except as to the disposition of taxes and
15penalties collected, and except that the retailer's discount
16is not allowed for taxes paid on aviation fuel that are subject
17to the revenue use requirements of 49 U.S.C. 47107(b) and 49
18U.S.C. 47133), 10, 11, 12 (except the reference therein to
19Section 2b of the Retailers' Occupation Tax Act), 13 (except
20that any reference to the State means the district), Section
2115, 16, 17, 18, 19, and 20 of the Service Occupation Tax Act
22and all provisions of the Uniform Penalty and Interest Act, as
23fully as if those provisions were set forth herein.
24    Persons subject to any tax imposed under the authority
25granted in this subsection may reimburse themselves for their
26serviceman's tax liability hereunder by separately stating the

 

 

HB3914- 122 -LRB103 27153 HLH 53522 b

1tax as an additional charge, that charge may be stated in
2combination in a single amount with State tax that servicemen
3are authorized to collect under the Service Use Tax Act, under
4any bracket schedules the Department may prescribe.
5    (c) The taxes imposed in subsections (a) and (b) may not be
6imposed on personal property titled or registered with an
7agency of the State or on personal property taxed at the 1%
8rate under the Retailers' Occupation Tax Act and the Service
9Occupation Tax Act (or at the 0% rate imposed under this
10amendatory Act of the 102nd General Assembly).
11    (d) Nothing in this Section shall be construed to
12authorize the district to impose a tax upon the privilege of
13engaging in any business that under the Constitution of the
14United States may not be made the subject of taxation by the
15State.
16    (e) The certificate of registration that is issued by the
17Department to a retailer under the Retailers' Occupation Tax
18Act or a serviceman under the Service Occupation Tax Act
19permits the retailer or serviceman to engage in a business
20that is taxable without registering separately with the
21Department under an ordinance or resolution under this
22Section.
23    (f) Except as otherwise provided, the Department shall
24immediately pay over to the State Treasurer, ex officio, as
25trustee, all taxes and penalties collected under this Section
26to be deposited into the Flood Prevention Occupation Tax Fund,

 

 

HB3914- 123 -LRB103 27153 HLH 53522 b

1which shall be an unappropriated trust fund held outside the
2State treasury. Taxes and penalties collected on aviation fuel
3sold on or after December 1, 2019 and through December 31,
42020, shall be immediately paid over by the Department to the
5State Treasurer, ex officio, as trustee, for deposit into the
6Local Government Aviation Trust Fund. The Department shall
7only pay moneys into the Local Government Aviation Trust Fund
8under this Act for so long as the revenue use requirements of
949 U.S.C. 47107(b) and 49 U.S.C. 47133 are binding on the
10District.
11    On or before the 25th day of each calendar month, the
12Department shall prepare and certify to the Comptroller the
13disbursement of stated sums of money to the counties from
14which retailers or servicemen have paid taxes or penalties to
15the Department during the second preceding calendar month. The
16amount to be paid to each county is equal to the amount (not
17including credit memoranda and not including taxes and
18penalties collected on aviation fuel sold on or after December
191, 2019 and through December 31, 2020) collected from the
20county under this Section during the second preceding calendar
21month by the Department, (i) less 2% of that amount (except the
22amount collected on aviation fuel sold on or after December 1,
232019 and through December 31, 2020), which shall be deposited
24into the Tax Compliance and Administration Fund and shall be
25used by the Department in administering and enforcing the
26provisions of this Section on behalf of the county, (ii) plus

 

 

HB3914- 124 -LRB103 27153 HLH 53522 b

1an amount that the Department determines is necessary to
2offset any amounts that were erroneously paid to a different
3taxing body; (iii) less an amount equal to the amount of
4refunds made during the second preceding calendar month by the
5Department on behalf of the county; and (iv) less any amount
6that the Department determines is necessary to offset any
7amounts that were payable to a different taxing body but were
8erroneously paid to the county. When certifying the amount of
9a monthly disbursement to a county under this Section, the
10Department shall increase or decrease the amounts by an amount
11necessary to offset any miscalculation of previous
12disbursements within the previous 6 months from the time a
13miscalculation is discovered.
14    Within 10 days after receipt by the Comptroller from the
15Department of the disbursement certification to the counties
16provided for in this Section, the Comptroller shall cause the
17orders to be drawn for the respective amounts in accordance
18with directions contained in the certification.
19    If the Department determines that a refund should be made
20under this Section to a claimant instead of issuing a credit
21memorandum, then the Department shall notify the Comptroller,
22who shall cause the order to be drawn for the amount specified
23and to the person named in the notification from the
24Department. The refund shall be paid by the Treasurer out of
25the Flood Prevention Occupation Tax Fund or the Local
26Government Aviation Trust Fund, as appropriate.

 

 

HB3914- 125 -LRB103 27153 HLH 53522 b

1    (g) If a county imposes a tax under this Section, then the
2county board shall, by ordinance, discontinue the tax upon the
3payment of all indebtedness of the flood prevention district.
4The tax shall not be discontinued until all indebtedness of
5the District has been paid.
6    (h) Any ordinance imposing the tax under this Section, or
7any ordinance that discontinues the tax, must be certified by
8the county clerk and filed with the Illinois Department of
9Revenue either (i) on or before the first day of April,
10whereupon the Department shall proceed to administer and
11enforce the tax or change in the rate as of the first day of
12July next following the filing; or (ii) on or before the first
13day of October, whereupon the Department shall proceed to
14administer and enforce the tax or change in the rate as of the
15first day of January next following the filing.
16    (j) County Flood Prevention Occupation Tax Fund. All
17proceeds received by a county from a tax distribution under
18this Section must be maintained in a special fund known as the
19[name of county] flood prevention occupation tax fund. The
20county shall, at the direction of the flood prevention
21district, use moneys in the fund to pay the costs of providing
22emergency levee repair and flood prevention and to pay bonds,
23notes, and other evidences of indebtedness issued under this
24Act.
25    (j-5) Notwithstanding any other provision of law, no tax
26may be imposed under this Section on the sale or use of

 

 

HB3914- 126 -LRB103 27153 HLH 53522 b

1cannabis, as defined in Section 1-10 of the Cannabis
2Regulation and Tax Act.
3    (k) This Section may be cited as the Flood Prevention
4Occupation Tax Law.
5(Source: P.A. 101-10, eff. 6-5-19; 101-604, eff. 12-13-19;
6102-700, eff. 4-19-22.)
 
7    Section 20. The Metro-East Park and Recreation District
8Act is amended by changing Section 30 as follows:
 
9    (70 ILCS 1605/30)
10    Sec. 30. Taxes.
11    (a) The board shall impose a tax upon all persons engaged
12in the business of selling tangible personal property, other
13than personal property titled or registered with an agency of
14this State's government, at retail in the District on the
15gross receipts from the sales made in the course of business.
16This tax shall be imposed only at the rate of one-tenth of one
17per cent.
18    This additional tax may not be imposed on tangible
19personal property taxed at the 1% rate under the Retailers'
20Occupation Tax Act (or at the 0% rate imposed under this
21amendatory Act of the 102nd General Assembly). Beginning
22December 1, 2019 and through December 31, 2020, this tax is not
23imposed on sales of aviation fuel unless the tax revenue is
24expended for airport-related purposes. If the District does

 

 

HB3914- 127 -LRB103 27153 HLH 53522 b

1not have an airport-related purpose to which it dedicates
2aviation fuel tax revenue, then aviation fuel shall be
3excluded from tax. The board must comply with the
4certification requirements for airport-related purposes under
5Section 2-22 of the Retailers' Occupation Tax Act. For
6purposes of this Act, "airport-related purposes" has the
7meaning ascribed in Section 6z-20.2 of the State Finance Act.
8Beginning January 1, 2021, this tax is not imposed on sales of
9aviation fuel for so long as the revenue use requirements of 49
10U.S.C. 47107(b) and 49 U.S.C. 47133 are binding on the
11District. The tax imposed by the Board under this Section and
12all civil penalties that may be assessed as an incident of the
13tax shall be collected and enforced by the Department of
14Revenue. The certificate of registration that is issued by the
15Department to a retailer under the Retailers' Occupation Tax
16Act shall permit the retailer to engage in a business that is
17taxable without registering separately with the Department
18under an ordinance or resolution under this Section. The
19Department has full power to administer and enforce this
20Section, to collect all taxes and penalties due under this
21Section, to dispose of taxes and penalties so collected in the
22manner provided in this Section, and to determine all rights
23to credit memoranda arising on account of the erroneous
24payment of a tax or penalty under this Section. In the
25administration of and compliance with this Section, the
26Department and persons who are subject to this Section shall

 

 

HB3914- 128 -LRB103 27153 HLH 53522 b

1(i) have the same rights, remedies, privileges, immunities,
2powers, and duties, (ii) be subject to the same conditions,
3restrictions, limitations, penalties, and definitions of
4terms, and (iii) employ the same modes of procedure as are
5prescribed in Sections 1, 1a, 1a-1, 1d, 1e, 1f, 1i, 1j, 1k, 1m,
61n, 2, 2-5, 2-5.5, 2-10 (in respect to all provisions
7contained in those Sections other than the State rate of tax),
82-12, 2-15 through 2-70, 2a, 2b, 2c, 3 (except provisions
9relating to transaction returns and quarter monthly payments,
10and except that the retailer's discount is not allowed for
11taxes paid on aviation fuel that are subject to the revenue use
12requirements of 49 U.S.C. 47107(b) and 49 U.S.C. 47133), 4, 5,
135a, 5b, 5c, 5d, 5e, 5f, 5g, 5h, 5i, 5j, 5k, 5l, 6, 6a, 6b, 6c,
146d, 7, 8, 9, 10, 11, 11a, 12, and 13 of the Retailers'
15Occupation Tax Act and the Uniform Penalty and Interest Act as
16if those provisions were set forth in this Section.
17    Persons subject to any tax imposed under the authority
18granted in this Section may reimburse themselves for their
19sellers' tax liability by separately stating the tax as an
20additional charge, which charge may be stated in combination,
21in a single amount, with State tax which sellers are required
22to collect under the Use Tax Act, pursuant to such bracketed
23schedules as the Department may prescribe.
24    Whenever the Department determines that a refund should be
25made under this Section to a claimant instead of issuing a
26credit memorandum, the Department shall notify the State

 

 

HB3914- 129 -LRB103 27153 HLH 53522 b

1Comptroller, who shall cause the order to be drawn for the
2amount specified and to the person named in the notification
3from the Department. The refund shall be paid by the State
4Treasurer out of the State Metro-East Park and Recreation
5District Fund or the Local Government Aviation Trust Fund, as
6appropriate.
7    (b) If a tax has been imposed under subsection (a), a
8service occupation tax shall also be imposed at the same rate
9upon all persons engaged, in the District, in the business of
10making sales of service, who, as an incident to making those
11sales of service, transfer tangible personal property within
12the District as an incident to a sale of service. This tax may
13not be imposed on tangible personal property taxed at the 1%
14rate under the Service Occupation Tax Act (or at the 0% rate
15imposed under this amendatory Act of the 102nd General
16Assembly). Beginning December 1, 2019 and through December 31,
172020, this tax may not be imposed on sales of aviation fuel
18unless the tax revenue is expended for airport-related
19purposes. If the District does not have an airport-related
20purpose to which it dedicates aviation fuel tax revenue, then
21aviation fuel shall be excluded from tax. The board must
22comply with the certification requirements for airport-related
23purposes under Section 2-22 of the Retailers' Occupation Tax
24Act. For purposes of this Act, "airport-related purposes" has
25the meaning ascribed in Section 6z-20.2 of the State Finance
26Act. Beginning January 1, 2021, this tax is not imposed on

 

 

HB3914- 130 -LRB103 27153 HLH 53522 b

1sales of aviation fuel for so long as the revenue use
2requirements of 49 U.S.C. 47107(b) and 49 U.S.C. 47133 are
3binding on the District. The tax imposed under this subsection
4and all civil penalties that may be assessed as an incident
5thereof shall be collected and enforced by the Department of
6Revenue. The Department has full power to administer and
7enforce this subsection; to collect all taxes and penalties
8due hereunder; to dispose of taxes and penalties so collected
9in the manner hereinafter provided; and to determine all
10rights to credit memoranda arising on account of the erroneous
11payment of tax or penalty hereunder. In the administration of,
12and compliance with this subsection, the Department and
13persons who are subject to this paragraph shall (i) have the
14same rights, remedies, privileges, immunities, powers, and
15duties, (ii) be subject to the same conditions, restrictions,
16limitations, penalties, exclusions, exemptions, and
17definitions of terms, and (iii) employ the same modes of
18procedure as are prescribed in Sections 2 (except that the
19reference to State in the definition of supplier maintaining a
20place of business in this State shall mean the District), 2a,
212b, 2c, 3 through 3-50 (in respect to all provisions therein
22other than the State rate of tax), 4 (except that the reference
23to the State shall be to the District), 5, 7, 8 (except that
24the jurisdiction to which the tax shall be a debt to the extent
25indicated in that Section 8 shall be the District), 9 (except
26as to the disposition of taxes and penalties collected, and

 

 

HB3914- 131 -LRB103 27153 HLH 53522 b

1except that the retailer's discount is not allowed for taxes
2paid on aviation fuel that are subject to the revenue use
3requirements of 49 U.S.C. 47107(b) and 49 U.S.C. 47133), 10,
411, 12 (except the reference therein to Section 2b of the
5Retailers' Occupation Tax Act), 13 (except that any reference
6to the State shall mean the District), Sections 15, 16, 17, 18,
719 and 20 of the Service Occupation Tax Act and the Uniform
8Penalty and Interest Act, as fully as if those provisions were
9set forth herein.
10    Persons subject to any tax imposed under the authority
11granted in this subsection may reimburse themselves for their
12serviceman's tax liability by separately stating the tax as an
13additional charge, which charge may be stated in combination,
14in a single amount, with State tax that servicemen are
15authorized to collect under the Service Use Tax Act, in
16accordance with such bracket schedules as the Department may
17prescribe.
18    Whenever the Department determines that a refund should be
19made under this subsection to a claimant instead of issuing a
20credit memorandum, the Department shall notify the State
21Comptroller, who shall cause the warrant to be drawn for the
22amount specified, and to the person named, in the notification
23from the Department. The refund shall be paid by the State
24Treasurer out of the State Metro-East Park and Recreation
25District Fund or the Local Government Aviation Trust Fund, as
26appropriate.

 

 

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1    Nothing in this subsection shall be construed to authorize
2the board to impose a tax upon the privilege of engaging in any
3business which under the Constitution of the United States may
4not be made the subject of taxation by the State.
5    (c) Except as otherwise provided in this paragraph, the
6Department shall immediately pay over to the State Treasurer,
7ex officio, as trustee, all taxes and penalties collected
8under this Section to be deposited into the State Metro-East
9Park and Recreation District Fund, which shall be an
10unappropriated trust fund held outside of the State treasury.
11Taxes and penalties collected on aviation fuel sold on or
12after December 1, 2019 and through December 31, 2020, shall be
13immediately paid over by the Department to the State
14Treasurer, ex officio, as trustee, for deposit into the Local
15Government Aviation Trust Fund. The Department shall only pay
16moneys into the Local Government Aviation Trust Fund under
17this Act for so long as the revenue use requirements of 49
18U.S.C. 47107(b) and 49 U.S.C. 47133 are binding on the
19District.
20    As soon as possible after the first day of each month,
21beginning January 1, 2011, upon certification of the
22Department of Revenue, the Comptroller shall order
23transferred, and the Treasurer shall transfer, to the STAR
24Bonds Revenue Fund the local sales tax increment, as defined
25in the Innovation Development and Economy Act, collected under
26this Section during the second preceding calendar month for

 

 

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1sales within a STAR bond district. The Department shall make
2this certification only if the Metro East Park and Recreation
3District imposes a tax on real property as provided in the
4definition of "local sales taxes" under the Innovation
5Development and Economy Act.
6    After the monthly transfer to the STAR Bonds Revenue Fund,
7on or before the 25th day of each calendar month, the
8Department shall prepare and certify to the Comptroller the
9disbursement of stated sums of money pursuant to Section 35 of
10this Act to the District from which retailers have paid taxes
11or penalties to the Department during the second preceding
12calendar month. The amount to be paid to the District shall be
13the amount (not including credit memoranda and not including
14taxes and penalties collected on aviation fuel sold on or
15after December 1, 2019 and through December 31, 2020)
16collected under this Section during the second preceding
17calendar month by the Department plus an amount the Department
18determines is necessary to offset any amounts that were
19erroneously paid to a different taxing body, and not including
20(i) an amount equal to the amount of refunds made during the
21second preceding calendar month by the Department on behalf of
22the District, (ii) any amount that the Department determines
23is necessary to offset any amounts that were payable to a
24different taxing body but were erroneously paid to the
25District, (iii) any amounts that are transferred to the STAR
26Bonds Revenue Fund, and (iv) 1.5% of the remainder, which the

 

 

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1Department shall transfer into the Tax Compliance and
2Administration Fund. The Department, at the time of each
3monthly disbursement to the District, shall prepare and
4certify to the State Comptroller the amount to be transferred
5into the Tax Compliance and Administration Fund under this
6subsection. Within 10 days after receipt by the Comptroller of
7the disbursement certification to the District and the Tax
8Compliance and Administration Fund provided for in this
9Section to be given to the Comptroller by the Department, the
10Comptroller shall cause the orders to be drawn for the
11respective amounts in accordance with directions contained in
12the certification.
13    (d) For the purpose of determining whether a tax
14authorized under this Section is applicable, a retail sale by
15a producer of coal or another mineral mined in Illinois is a
16sale at retail at the place where the coal or other mineral
17mined in Illinois is extracted from the earth. This paragraph
18does not apply to coal or another mineral when it is delivered
19or shipped by the seller to the purchaser at a point outside
20Illinois so that the sale is exempt under the United States
21Constitution as a sale in interstate or foreign commerce.
22    (e) Nothing in this Section shall be construed to
23authorize the board to impose a tax upon the privilege of
24engaging in any business that under the Constitution of the
25United States may not be made the subject of taxation by this
26State.

 

 

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1    (f) An ordinance imposing a tax under this Section or an
2ordinance extending the imposition of a tax to an additional
3county or counties shall be certified by the board and filed
4with the Department of Revenue either (i) on or before the
5first day of April, whereupon the Department shall proceed to
6administer and enforce the tax as of the first day of July next
7following the filing; or (ii) on or before the first day of
8October, whereupon the Department shall proceed to administer
9and enforce the tax as of the first day of January next
10following the filing.
11    (g) When certifying the amount of a monthly disbursement
12to the District under this Section, the Department shall
13increase or decrease the amounts by an amount necessary to
14offset any misallocation of previous disbursements. The offset
15amount shall be the amount erroneously disbursed within the
16previous 6 months from the time a misallocation is discovered.
17    (h) Notwithstanding any other provision of law, no tax may
18be imposed under this Section on the sale or use of cannabis,
19as defined in Section 1-10 of the Cannabis Regulation and Tax
20Act.
21(Source: P.A. 101-10, eff. 6-5-19; 101-81, eff. 7-12-19;
22101-604, eff. 12-13-19; 102-700, eff. 4-19-22.)
 
23    Section 25. The Local Mass Transit District Act is amended
24by changing Section 5.01 as follows:
 

 

 

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1    (70 ILCS 3610/5.01)   (from Ch. 111 2/3, par. 355.01)
2    Sec. 5.01. Metro East Mass Transit District; use and
3occupation taxes.
4    (a) The Board of Trustees of any Metro East Mass Transit
5District may, by ordinance adopted with the concurrence of
6two-thirds of the then trustees, impose throughout the
7District any or all of the taxes and fees provided in this
8Section. Except as otherwise provided, all taxes and fees
9imposed under this Section shall be used only for public mass
10transportation systems, and the amount used to provide mass
11transit service to unserved areas of the District shall be in
12the same proportion to the total proceeds as the number of
13persons residing in the unserved areas is to the total
14population of the District. Except as otherwise provided in
15this Act, taxes imposed under this Section and civil penalties
16imposed incident thereto shall be collected and enforced by
17the State Department of Revenue. The Department shall have the
18power to administer and enforce the taxes and to determine all
19rights for refunds for erroneous payments of the taxes.
20    (b) The Board may impose a Metro East Mass Transit
21District Retailers' Occupation Tax upon all persons engaged in
22the business of selling tangible personal property at retail
23in the district at a rate of 1/4 of 1%, or as authorized under
24subsection (d-5) of this Section, of the gross receipts from
25the sales made in the course of such business within the
26district, except that the rate of tax imposed under this

 

 

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1Section on sales of aviation fuel on or after December 1, 2019
2shall be 0.25% in Madison County unless the Metro-East Mass
3Transit District in Madison County has an "airport-related
4purpose" and any additional amount authorized under subsection
5(d-5) is expended for airport-related purposes. If there is no
6airport-related purpose to which aviation fuel tax revenue is
7dedicated, then aviation fuel is excluded from any additional
8amount authorized under subsection (d-5). The rate in St.
9Clair County shall be 0.25% unless the Metro-East Mass Transit
10District in St. Clair County has an "airport-related purpose"
11and the additional 0.50% of the 0.75% tax on aviation fuel
12imposed in that County is expended for airport-related
13purposes. If there is no airport-related purpose to which
14aviation fuel tax revenue is dedicated, then aviation fuel is
15excluded from the additional 0.50% of the 0.75% tax.
16    The Board must comply with the certification requirements
17for airport-related purposes under Section 2-22 of the
18Retailers' Occupation Tax Act. For purposes of this Section,
19"airport-related purposes" has the meaning ascribed in Section
206z-20.2 of the State Finance Act. This exclusion for aviation
21fuel only applies for so long as the revenue use requirements
22of 49 U.S.C. 47107(b) and 49 U.S.C. 47133 are binding on the
23District.
24    The tax imposed under this Section and all civil penalties
25that may be assessed as an incident thereof shall be collected
26and enforced by the State Department of Revenue. The

 

 

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1Department shall have full power to administer and enforce
2this Section; to collect all taxes and penalties so collected
3in the manner hereinafter provided; and to determine all
4rights to credit memoranda arising on account of the erroneous
5payment of tax or penalty hereunder. In the administration of,
6and compliance with, this Section, the Department and persons
7who are subject to this Section shall have the same rights,
8remedies, privileges, immunities, powers and duties, and be
9subject to the same conditions, restrictions, limitations,
10penalties, exclusions, exemptions and definitions of terms and
11employ the same modes of procedure, as are prescribed in
12Sections 1, 1a, 1a-1, 1c, 1d, 1e, 1f, 1i, 1j, 2 through 2-65
13(in respect to all provisions therein other than the State
14rate of tax), 2c, 3 (except as to the disposition of taxes and
15penalties collected, and except that the retailer's discount
16is not allowed for taxes paid on aviation fuel that are subject
17to the revenue use requirements of 49 U.S.C. 47107(b) and 49
18U.S.C. 47133), 4, 5, 5a, 5c, 5d, 5e, 5f, 5g, 5h, 5i, 5j, 5k,
195l, 6, 6a, 6b, 6c, 6d, 7, 8, 9, 10, 11, 12, 13, and 14 of the
20Retailers' Occupation Tax Act and Section 3-7 of the Uniform
21Penalty and Interest Act, as fully as if those provisions were
22set forth herein.
23    Persons subject to any tax imposed under the Section may
24reimburse themselves for their seller's tax liability
25hereunder by separately stating the tax as an additional
26charge, which charge may be stated in combination, in a single

 

 

HB3914- 139 -LRB103 27153 HLH 53522 b

1amount, with State taxes that sellers are required to collect
2under the Use Tax Act, in accordance with such bracket
3schedules as the Department may prescribe.
4    Whenever the Department determines that a refund should be
5made under this Section to a claimant instead of issuing a
6credit memorandum, the Department shall notify the State
7Comptroller, who shall cause the warrant to be drawn for the
8amount specified, and to the person named, in the notification
9from the Department. The refund shall be paid by the State
10Treasurer out of the Metro East Mass Transit District tax fund
11established under paragraph (h) of this Section or the Local
12Government Aviation Trust Fund, as appropriate.
13    If a tax is imposed under this subsection (b), a tax shall
14also be imposed under subsections (c) and (d) of this Section.
15    For the purpose of determining whether a tax authorized
16under this Section is applicable, a retail sale, by a producer
17of coal or other mineral mined in Illinois, is a sale at retail
18at the place where the coal or other mineral mined in Illinois
19is extracted from the earth. This paragraph does not apply to
20coal or other mineral when it is delivered or shipped by the
21seller to the purchaser at a point outside Illinois so that the
22sale is exempt under the Federal Constitution as a sale in
23interstate or foreign commerce.
24    No tax shall be imposed or collected under this subsection
25on the sale of a motor vehicle in this State to a resident of
26another state if that motor vehicle will not be titled in this

 

 

HB3914- 140 -LRB103 27153 HLH 53522 b

1State.
2    Nothing in this Section shall be construed to authorize
3the Metro East Mass Transit District to impose a tax upon the
4privilege of engaging in any business which under the
5Constitution of the United States may not be made the subject
6of taxation by this State.
7    (c) If a tax has been imposed under subsection (b), a Metro
8East Mass Transit District Service Occupation Tax shall also
9be imposed upon all persons engaged, in the district, in the
10business of making sales of service, who, as an incident to
11making those sales of service, transfer tangible personal
12property within the District, either in the form of tangible
13personal property or in the form of real estate as an incident
14to a sale of service. The tax rate shall be 1/4%, or as
15authorized under subsection (d-5) of this Section, of the
16selling price of tangible personal property so transferred
17within the district, except that the rate of tax imposed in
18these Counties under this Section on sales of aviation fuel on
19or after December 1, 2019 shall be 0.25% in Madison County
20unless the Metro-East Mass Transit District in Madison County
21has an "airport-related purpose" and any additional amount
22authorized under subsection (d-5) is expended for
23airport-related purposes. If there is no airport-related
24purpose to which aviation fuel tax revenue is dedicated, then
25aviation fuel is excluded from any additional amount
26authorized under subsection (d-5). The rate in St. Clair

 

 

HB3914- 141 -LRB103 27153 HLH 53522 b

1County shall be 0.25% unless the Metro-East Mass Transit
2District in St. Clair County has an "airport-related purpose"
3and the additional 0.50% of the 0.75% tax on aviation fuel is
4expended for airport-related purposes. If there is no
5airport-related purpose to which aviation fuel tax revenue is
6dedicated, then aviation fuel is excluded from the additional
70.50% of the 0.75% tax.
8    The Board must comply with the certification requirements
9for airport-related purposes under Section 2-22 of the
10Retailers' Occupation Tax Act. For purposes of this Section,
11"airport-related purposes" has the meaning ascribed in Section
126z-20.2 of the State Finance Act. This exclusion for aviation
13fuel only applies for so long as the revenue use requirements
14of 49 U.S.C. 47107(b) and 49 U.S.C. 47133 are binding on the
15District.
16    The tax imposed under this paragraph and all civil
17penalties that may be assessed as an incident thereof shall be
18collected and enforced by the State Department of Revenue. The
19Department shall have full power to administer and enforce
20this paragraph; to collect all taxes and penalties due
21hereunder; to dispose of taxes and penalties so collected in
22the manner hereinafter provided; and to determine all rights
23to credit memoranda arising on account of the erroneous
24payment of tax or penalty hereunder. In the administration of,
25and compliance with this paragraph, the Department and persons
26who are subject to this paragraph shall have the same rights,

 

 

HB3914- 142 -LRB103 27153 HLH 53522 b

1remedies, privileges, immunities, powers and duties, and be
2subject to the same conditions, restrictions, limitations,
3penalties, exclusions, exemptions and definitions of terms and
4employ the same modes of procedure as are prescribed in
5Sections 1a-1, 2 (except that the reference to State in the
6definition of supplier maintaining a place of business in this
7State shall mean the Authority), 2a, 3 through 3-50 (in
8respect to all provisions therein other than the State rate of
9tax), 4 (except that the reference to the State shall be to the
10Authority), 5, 7, 8 (except that the jurisdiction to which the
11tax shall be a debt to the extent indicated in that Section 8
12shall be the District), 9 (except as to the disposition of
13taxes and penalties collected, and except that the returned
14merchandise credit for this tax may not be taken against any
15State tax, and except that the retailer's discount is not
16allowed for taxes paid on aviation fuel that are subject to the
17revenue use requirements of 49 U.S.C. 47107(b) and 49 U.S.C.
1847133), 10, 11, 12 (except the reference therein to Section 2b
19of the Retailers' Occupation Tax Act), 13 (except that any
20reference to the State shall mean the District), the first
21paragraph of Section 15, 16, 17, 18, 19 and 20 of the Service
22Occupation Tax Act and Section 3-7 of the Uniform Penalty and
23Interest Act, as fully as if those provisions were set forth
24herein.
25    Persons subject to any tax imposed under the authority
26granted in this paragraph may reimburse themselves for their

 

 

HB3914- 143 -LRB103 27153 HLH 53522 b

1serviceman's tax liability hereunder by separately stating the
2tax as an additional charge, which charge may be stated in
3combination, in a single amount, with State tax that
4servicemen are authorized to collect under the Service Use Tax
5Act, in accordance with such bracket schedules as the
6Department may prescribe.
7    Whenever the Department determines that a refund should be
8made under this paragraph to a claimant instead of issuing a
9credit memorandum, the Department shall notify the State
10Comptroller, who shall cause the warrant to be drawn for the
11amount specified, and to the person named, in the notification
12from the Department. The refund shall be paid by the State
13Treasurer out of the Metro East Mass Transit District tax fund
14established under paragraph (h) of this Section or the Local
15Government Aviation Trust Fund, as appropriate.
16    Nothing in this paragraph shall be construed to authorize
17the District to impose a tax upon the privilege of engaging in
18any business which under the Constitution of the United States
19may not be made the subject of taxation by the State.
20    (d) If a tax has been imposed under subsection (b), a Metro
21East Mass Transit District Use Tax shall also be imposed upon
22the privilege of using, in the district, any item of tangible
23personal property that is purchased outside the district at
24retail from a retailer, and that is titled or registered with
25an agency of this State's government, at a rate of 1/4%, or as
26authorized under subsection (d-5) of this Section, of the

 

 

HB3914- 144 -LRB103 27153 HLH 53522 b

1selling price of the tangible personal property within the
2District, as "selling price" is defined in the Use Tax Act. The
3tax shall be collected from persons whose Illinois address for
4titling or registration purposes is given as being in the
5District. The tax shall be collected by the Department of
6Revenue for the Metro East Mass Transit District. The tax must
7be paid to the State, or an exemption determination must be
8obtained from the Department of Revenue, before the title or
9certificate of registration for the property may be issued.
10The tax or proof of exemption may be transmitted to the
11Department by way of the State agency with which, or the State
12officer with whom, the tangible personal property must be
13titled or registered if the Department and the State agency or
14State officer determine that this procedure will expedite the
15processing of applications for title or registration.
16    The Department shall have full power to administer and
17enforce this paragraph; to collect all taxes, penalties and
18interest due hereunder; to dispose of taxes, penalties and
19interest so collected in the manner hereinafter provided; and
20to determine all rights to credit memoranda or refunds arising
21on account of the erroneous payment of tax, penalty or
22interest hereunder. In the administration of, and compliance
23with, this paragraph, the Department and persons who are
24subject to this paragraph shall have the same rights,
25remedies, privileges, immunities, powers and duties, and be
26subject to the same conditions, restrictions, limitations,

 

 

HB3914- 145 -LRB103 27153 HLH 53522 b

1penalties, exclusions, exemptions and definitions of terms and
2employ the same modes of procedure, as are prescribed in
3Sections 2 (except the definition of "retailer maintaining a
4place of business in this State"), 3 through 3-80 (except
5provisions pertaining to the State rate of tax, and except
6provisions concerning collection or refunding of the tax by
7retailers), 4, 11, 12, 12a, 14, 15, 19 (except the portions
8pertaining to claims by retailers and except the last
9paragraph concerning refunds), 20, 21 and 22 of the Use Tax Act
10and Section 3-7 of the Uniform Penalty and Interest Act, that
11are not inconsistent with this paragraph, as fully as if those
12provisions were set forth herein.
13    Whenever the Department determines that a refund should be
14made under this paragraph to a claimant instead of issuing a
15credit memorandum, the Department shall notify the State
16Comptroller, who shall cause the order to be drawn for the
17amount specified, and to the person named, in the notification
18from the Department. The refund shall be paid by the State
19Treasurer out of the Metro East Mass Transit District tax fund
20established under paragraph (h) of this Section.
21    (d-5) (A) The county board of any county participating in
22the Metro East Mass Transit District may authorize, by
23ordinance, a referendum on the question of whether the tax
24rates for the Metro East Mass Transit District Retailers'
25Occupation Tax, the Metro East Mass Transit District Service
26Occupation Tax, and the Metro East Mass Transit District Use

 

 

HB3914- 146 -LRB103 27153 HLH 53522 b

1Tax for the District should be increased from 0.25% to 0.75%.
2Upon adopting the ordinance, the county board shall certify
3the proposition to the proper election officials who shall
4submit the proposition to the voters of the District at the
5next election, in accordance with the general election law.
6    The proposition shall be in substantially the following
7form:
8        Shall the tax rates for the Metro East Mass Transit
9    District Retailers' Occupation Tax, the Metro East Mass
10    Transit District Service Occupation Tax, and the Metro
11    East Mass Transit District Use Tax be increased from 0.25%
12    to 0.75%?
13    (B) Two thousand five hundred electors of any Metro East
14Mass Transit District may petition the Chief Judge of the
15Circuit Court, or any judge of that Circuit designated by the
16Chief Judge, in which that District is located to cause to be
17submitted to a vote of the electors the question whether the
18tax rates for the Metro East Mass Transit District Retailers'
19Occupation Tax, the Metro East Mass Transit District Service
20Occupation Tax, and the Metro East Mass Transit District Use
21Tax for the District should be increased from 0.25% to 0.75%.
22    Upon submission of such petition the court shall set a
23date not less than 10 nor more than 30 days thereafter for a
24hearing on the sufficiency thereof. Notice of the filing of
25such petition and of such date shall be given in writing to the
26District and the County Clerk at least 7 days before the date

 

 

HB3914- 147 -LRB103 27153 HLH 53522 b

1of such hearing.
2    If such petition is found sufficient, the court shall
3enter an order to submit that proposition at the next
4election, in accordance with general election law.
5    The form of the petition shall be in substantially the
6following form: To the Circuit Court of the County of (name of
7county):
8        We, the undersigned electors of the (name of transit
9    district), respectfully petition your honor to submit to a
10    vote of the electors of (name of transit district) the
11    following proposition:
12        Shall the tax rates for the Metro East Mass Transit
13    District Retailers' Occupation Tax, the Metro East Mass
14    Transit District Service Occupation Tax, and the Metro
15    East Mass Transit District Use Tax be increased from 0.25%
16    to 0.75%?
17        Name                Address, with Street and Number.
18..............................................................
19..............................................................
20    (C) The votes shall be recorded as "YES" or "NO". If a
21majority of all votes cast on the proposition are for the
22increase in the tax rates, the Metro East Mass Transit
23District shall begin imposing the increased rates in the
24District, and the Department of Revenue shall begin collecting
25the increased amounts, as provided under this Section. An
26ordinance imposing or discontinuing a tax hereunder or

 

 

HB3914- 148 -LRB103 27153 HLH 53522 b

1effecting a change in the rate thereof shall be adopted and a
2certified copy thereof filed with the Department on or before
3the first day of October, whereupon the Department shall
4proceed to administer and enforce this Section as of the first
5day of January next following the adoption and filing, or on or
6before the first day of April, whereupon the Department shall
7proceed to administer and enforce this Section as of the first
8day of July next following the adoption and filing.
9    (D) If the voters have approved a referendum under this
10subsection, before November 1, 1994, to increase the tax rate
11under this subsection, the Metro East Mass Transit District
12Board of Trustees may adopt by a majority vote an ordinance at
13any time before January 1, 1995 that excludes from the rate
14increase tangible personal property that is titled or
15registered with an agency of this State's government. The
16ordinance excluding titled or registered tangible personal
17property from the rate increase must be filed with the
18Department at least 15 days before its effective date. At any
19time after adopting an ordinance excluding from the rate
20increase tangible personal property that is titled or
21registered with an agency of this State's government, the
22Metro East Mass Transit District Board of Trustees may adopt
23an ordinance applying the rate increase to that tangible
24personal property. The ordinance shall be adopted, and a
25certified copy of that ordinance shall be filed with the
26Department, on or before October 1, whereupon the Department

 

 

HB3914- 149 -LRB103 27153 HLH 53522 b

1shall proceed to administer and enforce the rate increase
2against tangible personal property titled or registered with
3an agency of this State's government as of the following
4January 1. After December 31, 1995, any reimposed rate
5increase in effect under this subsection shall no longer apply
6to tangible personal property titled or registered with an
7agency of this State's government. Beginning January 1, 1996,
8the Board of Trustees of any Metro East Mass Transit District
9may never reimpose a previously excluded tax rate increase on
10tangible personal property titled or registered with an agency
11of this State's government. After July 1, 2004, if the voters
12have approved a referendum under this subsection to increase
13the tax rate under this subsection, the Metro East Mass
14Transit District Board of Trustees may adopt by a majority
15vote an ordinance that excludes from the rate increase
16tangible personal property that is titled or registered with
17an agency of this State's government. The ordinance excluding
18titled or registered tangible personal property from the rate
19increase shall be adopted, and a certified copy of that
20ordinance shall be filed with the Department on or before
21October 1, whereupon the Department shall administer and
22enforce this exclusion from the rate increase as of the
23following January 1, or on or before April 1, whereupon the
24Department shall administer and enforce this exclusion from
25the rate increase as of the following July 1. The Board of
26Trustees of any Metro East Mass Transit District may never

 

 

HB3914- 150 -LRB103 27153 HLH 53522 b

1reimpose a previously excluded tax rate increase on tangible
2personal property titled or registered with an agency of this
3State's government.
4    (d-6) If the Board of Trustees of any Metro East Mass
5Transit District has imposed a rate increase under subsection
6(d-5) and filed an ordinance with the Department of Revenue
7excluding titled property from the higher rate, then that
8Board may, by ordinance adopted with the concurrence of
9two-thirds of the then trustees, impose throughout the
10District a fee. The fee on the excluded property shall not
11exceed $20 per retail transaction or an amount equal to the
12amount of tax excluded, whichever is less, on tangible
13personal property that is titled or registered with an agency
14of this State's government. Beginning July 1, 2004, the fee
15shall apply only to titled property that is subject to either
16the Metro East Mass Transit District Retailers' Occupation Tax
17or the Metro East Mass Transit District Service Occupation
18Tax. No fee shall be imposed or collected under this
19subsection on the sale of a motor vehicle in this State to a
20resident of another state if that motor vehicle will not be
21titled in this State.
22    (d-7) Until June 30, 2004, if a fee has been imposed under
23subsection (d-6), a fee shall also be imposed upon the
24privilege of using, in the district, any item of tangible
25personal property that is titled or registered with any agency
26of this State's government, in an amount equal to the amount of

 

 

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1the fee imposed under subsection (d-6).
2    (d-7.1) Beginning July 1, 2004, any fee imposed by the
3Board of Trustees of any Metro East Mass Transit District
4under subsection (d-6) and all civil penalties that may be
5assessed as an incident of the fees shall be collected and
6enforced by the State Department of Revenue. Reference to
7"taxes" in this Section shall be construed to apply to the
8administration, payment, and remittance of all fees under this
9Section. For purposes of any fee imposed under subsection
10(d-6), 4% of the fee, penalty, and interest received by the
11Department in the first 12 months that the fee is collected and
12enforced by the Department and 2% of the fee, penalty, and
13interest following the first 12 months (except the amount
14collected on aviation fuel sold on or after December 1, 2019)
15shall be deposited into the Tax Compliance and Administration
16Fund and shall be used by the Department, subject to
17appropriation, to cover the costs of the Department. No
18retailers' discount shall apply to any fee imposed under
19subsection (d-6).
20    (d-8) No item of titled property shall be subject to both
21the higher rate approved by referendum, as authorized under
22subsection (d-5), and any fee imposed under subsection (d-6)
23or (d-7).
24    (d-9) (Blank).
25    (d-10) (Blank).
26    (e) A certificate of registration issued by the State

 

 

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1Department of Revenue to a retailer under the Retailers'
2Occupation Tax Act or under the Service Occupation Tax Act
3shall permit the registrant to engage in a business that is
4taxed under the tax imposed under paragraphs (b), (c) or (d) of
5this Section and no additional registration shall be required
6under the tax. A certificate issued under the Use Tax Act or
7the Service Use Tax Act shall be applicable with regard to any
8tax imposed under paragraph (c) of this Section.
9    (f) (Blank).
10    (g) Any ordinance imposing or discontinuing any tax under
11this Section shall be adopted and a certified copy thereof
12filed with the Department on or before June 1, whereupon the
13Department of Revenue shall proceed to administer and enforce
14this Section on behalf of the Metro East Mass Transit District
15as of September 1 next following such adoption and filing.
16Beginning January 1, 1992, an ordinance or resolution imposing
17or discontinuing the tax hereunder shall be adopted and a
18certified copy thereof filed with the Department on or before
19the first day of July, whereupon the Department shall proceed
20to administer and enforce this Section as of the first day of
21October next following such adoption and filing. Beginning
22January 1, 1993, except as provided in subsection (d-5) of
23this Section, an ordinance or resolution imposing or
24discontinuing the tax hereunder shall be adopted and a
25certified copy thereof filed with the Department on or before
26the first day of October, whereupon the Department shall

 

 

HB3914- 153 -LRB103 27153 HLH 53522 b

1proceed to administer and enforce this Section as of the first
2day of January next following such adoption and filing, or,
3beginning January 1, 2004, on or before the first day of April,
4whereupon the Department shall proceed to administer and
5enforce this Section as of the first day of July next following
6the adoption and filing.
7    (h) Except as provided in subsection (d-7.1), the State
8Department of Revenue shall, upon collecting any taxes as
9provided in this Section, pay the taxes over to the State
10Treasurer as trustee for the District. The taxes shall be held
11in a trust fund outside the State Treasury. If an
12airport-related purpose has been certified, taxes and
13penalties collected in St. Clair County on aviation fuel sold
14on or after December 1, 2019 from the 0.50% of the 0.75% rate
15shall be immediately paid over by the Department to the State
16Treasurer, ex officio, as trustee, for deposit into the Local
17Government Aviation Trust Fund. The Department shall only pay
18moneys into the Local Government Aviation Trust Fund under
19this Act for so long as the revenue use requirements of 49
20U.S.C. 47107(b) and 49 U.S.C. 47133 are binding on the
21District.
22    As soon as possible after the first day of each month,
23beginning January 1, 2011, upon certification of the
24Department of Revenue, the Comptroller shall order
25transferred, and the Treasurer shall transfer, to the STAR
26Bonds Revenue Fund the local sales tax increment, as defined

 

 

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1in the Innovation Development and Economy Act, collected under
2this Section during the second preceding calendar month for
3sales within a STAR bond district. The Department shall make
4this certification only if the local mass transit district
5imposes a tax on real property as provided in the definition of
6"local sales taxes" under the Innovation Development and
7Economy Act.
8    After the monthly transfer to the STAR Bonds Revenue Fund,
9on or before the 25th day of each calendar month, the State
10Department of Revenue shall prepare and certify to the
11Comptroller of the State of Illinois the amount to be paid to
12the District, which shall be the amount (not including credit
13memoranda and not including taxes and penalties collected on
14aviation fuel sold on or after December 1, 2019 that are
15deposited into the Local Government Aviation Trust Fund)
16collected under this Section during the second preceding
17calendar month by the Department plus an amount the Department
18determines is necessary to offset any amounts that were
19erroneously paid to a different taxing body, and not including
20any amount equal to the amount of refunds made during the
21second preceding calendar month by the Department on behalf of
22the District, and not including any amount that the Department
23determines is necessary to offset any amounts that were
24payable to a different taxing body but were erroneously paid
25to the District, and less any amounts that are transferred to
26the STAR Bonds Revenue Fund, less 1.5% of the remainder, which

 

 

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1the Department shall transfer into the Tax Compliance and
2Administration Fund. The Department, at the time of each
3monthly disbursement to the District, shall prepare and
4certify to the State Comptroller the amount to be transferred
5into the Tax Compliance and Administration Fund under this
6subsection. Within 10 days after receipt by the Comptroller of
7the certification of the amount to be paid to the District and
8the Tax Compliance and Administration Fund, the Comptroller
9shall cause an order to be drawn for payment for the amount in
10accordance with the direction in the certification.
11    (i) Notwithstanding any other provision of law, no tax may
12be imposed under this Section on the sale or use of cannabis,
13as defined in Section 1-10 of the Cannabis Regulation and Tax
14Act.
15(Source: P.A. 100-23, eff. 7-6-17; 100-587, eff. 6-4-18;
16101-10, eff. 6-5-19; 101-604, eff. 12-13-19.)
 
17    Section 30. The Water Commission Act of 1985 is amended by
18changing Section 4 as follows:
 
19    (70 ILCS 3720/4)  (from Ch. 111 2/3, par. 254)
20    Sec. 4. Taxes.
21    (a) The board of commissioners of any county water
22commission may, by ordinance, impose throughout the territory
23of the commission any or all of the taxes provided in this
24Section for its corporate purposes. However, no county water

 

 

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1commission may impose any such tax unless the commission
2certifies the proposition of imposing the tax to the proper
3election officials, who shall submit the proposition to the
4voters residing in the territory at an election in accordance
5with the general election law, and the proposition has been
6approved by a majority of those voting on the proposition.
7    The proposition shall be in the form provided in Section 5
8or shall be substantially in the following form:
9-------------------------------------------------------------
10    Shall the (insert corporate
11name of county water commission)           YES
12impose (state type of tax or         ------------------------
13taxes to be imposed) at the                NO
14rate of 1/4%?
15-------------------------------------------------------------
16    Taxes imposed under this Section and civil penalties
17imposed incident thereto shall be collected and enforced by
18the State Department of Revenue. The Department shall have the
19power to administer and enforce the taxes and to determine all
20rights for refunds for erroneous payments of the taxes.
21    (b) The board of commissioners may impose a County Water
22Commission Retailers' Occupation Tax upon all persons engaged
23in the business of selling tangible personal property at
24retail in the territory of the commission at a rate of 1/4% of
25the gross receipts from the sales made in the course of such
26business within the territory. Beginning January 1, 2021, this

 

 

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1tax is not imposed on sales of aviation fuel for so long as the
2revenue use requirements of 49 U.S.C. 47107(b) and 49 U.S.C.
347133 are binding on the District.
4    The tax imposed under this paragraph and all civil
5penalties that may be assessed as an incident thereof shall be
6collected and enforced by the State Department of Revenue. The
7Department shall have full power to administer and enforce
8this paragraph; to collect all taxes and penalties due
9hereunder; to dispose of taxes and penalties so collected in
10the manner hereinafter provided; and to determine all rights
11to credit memoranda arising on account of the erroneous
12payment of tax or penalty hereunder. In the administration of,
13and compliance with, this paragraph, the Department and
14persons who are subject to this paragraph shall have the same
15rights, remedies, privileges, immunities, powers and duties,
16and be subject to the same conditions, restrictions,
17limitations, penalties, exclusions, exemptions and definitions
18of terms, and employ the same modes of procedure, as are
19prescribed in Sections 1, 1a, 1a-1, 1c, 1d, 1e, 1f, 1i, 1j, 2
20through 2-65 (in respect to all provisions therein other than
21the State rate of tax except that tangible personal property
22taxed at the 1% rate under the Retailers' Occupation Tax Act
23shall not be subject to tax hereunder), 2c, 3 (except as to the
24disposition of taxes and penalties collected, and except that
25the retailer's discount is not allowed for taxes paid on
26aviation fuel sold on or after December 1, 2019 and through

 

 

HB3914- 158 -LRB103 27153 HLH 53522 b

1December 31, 2020), 4, 5, 5a, 5b, 5c, 5d, 5e, 5f, 5g, 5h, 5i,
25j, 5k, 5l, 6, 6a, 6b, 6c, 6d, 7, 8, 9, 10, 11, 12, and 13 of
3the Retailers' Occupation Tax Act and Section 3-7 of the
4Uniform Penalty and Interest Act, as fully as if those
5provisions were set forth herein.
6    Persons subject to any tax imposed under the authority
7granted in this paragraph may reimburse themselves for their
8seller's tax liability hereunder by separately stating the tax
9as an additional charge, which charge may be stated in
10combination, in a single amount, with State taxes that sellers
11are required to collect under the Use Tax Act and under
12subsection (e) of Section 4.03 of the Regional Transportation
13Authority Act, in accordance with such bracket schedules as
14the Department may prescribe.
15    Whenever the Department determines that a refund should be
16made under this paragraph to a claimant instead of issuing a
17credit memorandum, the Department shall notify the State
18Comptroller, who shall cause the warrant to be drawn for the
19amount specified, and to the person named, in the notification
20from the Department. The refund shall be paid by the State
21Treasurer out of a county water commission tax fund
22established under subsection (g) of this Section.
23    For the purpose of determining whether a tax authorized
24under this paragraph is applicable, a retail sale by a
25producer of coal or other mineral mined in Illinois is a sale
26at retail at the place where the coal or other mineral mined in

 

 

HB3914- 159 -LRB103 27153 HLH 53522 b

1Illinois is extracted from the earth. This paragraph does not
2apply to coal or other mineral when it is delivered or shipped
3by the seller to the purchaser at a point outside Illinois so
4that the sale is exempt under the Federal Constitution as a
5sale in interstate or foreign commerce.
6    If a tax is imposed under this subsection (b), a tax shall
7also be imposed under subsections (c) and (d) of this Section.
8    No tax shall be imposed or collected under this subsection
9on the sale of a motor vehicle in this State to a resident of
10another state if that motor vehicle will not be titled in this
11State.
12    Nothing in this paragraph shall be construed to authorize
13a county water commission to impose a tax upon the privilege of
14engaging in any business which under the Constitution of the
15United States may not be made the subject of taxation by this
16State.
17    (c) If a tax has been imposed under subsection (b), a
18County Water Commission Service Occupation Tax shall also be
19imposed upon all persons engaged, in the territory of the
20commission, in the business of making sales of service, who,
21as an incident to making the sales of service, transfer
22tangible personal property within the territory. The tax rate
23shall be 1/4% of the selling price of tangible personal
24property so transferred within the territory. Beginning
25January 1, 2021, this tax is not imposed on sales of aviation
26fuel for so long as the revenue use requirements of 49 U.S.C.

 

 

HB3914- 160 -LRB103 27153 HLH 53522 b

147107(b) and 49 U.S.C. 47133 are binding on the District.
2    The tax imposed under this paragraph and all civil
3penalties that may be assessed as an incident thereof shall be
4collected and enforced by the State Department of Revenue. The
5Department shall have full power to administer and enforce
6this paragraph; to collect all taxes and penalties due
7hereunder; to dispose of taxes and penalties so collected in
8the manner hereinafter provided; and to determine all rights
9to credit memoranda arising on account of the erroneous
10payment of tax or penalty hereunder. In the administration of,
11and compliance with, this paragraph, the Department and
12persons who are subject to this paragraph shall have the same
13rights, remedies, privileges, immunities, powers and duties,
14and be subject to the same conditions, restrictions,
15limitations, penalties, exclusions, exemptions and definitions
16of terms, and employ the same modes of procedure, as are
17prescribed in Sections 1a-1, 2 (except that the reference to
18State in the definition of supplier maintaining a place of
19business in this State shall mean the territory of the
20commission), 2a, 3 through 3-50 (in respect to all provisions
21therein other than the State rate of tax except that tangible
22personal property taxed at the 1% rate under the Service
23Occupation Tax Act shall not be subject to tax hereunder), 4
24(except that the reference to the State shall be to the
25territory of the commission), 5, 7, 8 (except that the
26jurisdiction to which the tax shall be a debt to the extent

 

 

HB3914- 161 -LRB103 27153 HLH 53522 b

1indicated in that Section 8 shall be the commission), 9
2(except as to the disposition of taxes and penalties collected
3and except that the returned merchandise credit for this tax
4may not be taken against any State tax, and except that the
5retailer's discount is not allowed for taxes paid on aviation
6fuel sold on or after December 1, 2019 and through December 31,
72020), 10, 11, 12 (except the reference therein to Section 2b
8of the Retailers' Occupation Tax Act), 13 (except that any
9reference to the State shall mean the territory of the
10commission), the first paragraph of Section 15, 15.5, 16, 17,
1118, 19, and 20 of the Service Occupation Tax Act as fully as if
12those provisions were set forth herein.
13    Persons subject to any tax imposed under the authority
14granted in this paragraph may reimburse themselves for their
15serviceman's tax liability hereunder by separately stating the
16tax as an additional charge, which charge may be stated in
17combination, in a single amount, with State tax that
18servicemen are authorized to collect under the Service Use Tax
19Act, and any tax for which servicemen may be liable under
20subsection (f) of Section 4.03 of the Regional Transportation
21Authority Act, in accordance with such bracket schedules as
22the Department may prescribe.
23    Whenever the Department determines that a refund should be
24made under this paragraph to a claimant instead of issuing a
25credit memorandum, the Department shall notify the State
26Comptroller, who shall cause the warrant to be drawn for the

 

 

HB3914- 162 -LRB103 27153 HLH 53522 b

1amount specified, and to the person named, in the notification
2from the Department. The refund shall be paid by the State
3Treasurer out of a county water commission tax fund
4established under subsection (g) of this Section.
5    Nothing in this paragraph shall be construed to authorize
6a county water commission to impose a tax upon the privilege of
7engaging in any business which under the Constitution of the
8United States may not be made the subject of taxation by the
9State.
10    (d) If a tax has been imposed under subsection (b), a tax
11shall also be imposed upon the privilege of using, in the
12territory of the commission, any item of tangible personal
13property that is purchased outside the territory at retail
14from a retailer, and that is titled or registered with an
15agency of this State's government, at a rate of 1/4% of the
16selling price of the tangible personal property within the
17territory, as "selling price" is defined in the Use Tax Act.
18The tax shall be collected from persons whose Illinois address
19for titling or registration purposes is given as being in the
20territory. The tax shall be collected by the Department of
21Revenue for a county water commission. The tax must be paid to
22the State, or an exemption determination must be obtained from
23the Department of Revenue, before the title or certificate of
24registration for the property may be issued. The tax or proof
25of exemption may be transmitted to the Department by way of the
26State agency with which, or the State officer with whom, the

 

 

HB3914- 163 -LRB103 27153 HLH 53522 b

1tangible personal property must be titled or registered if the
2Department and the State agency or State officer determine
3that this procedure will expedite the processing of
4applications for title or registration.
5    The Department shall have full power to administer and
6enforce this paragraph; to collect all taxes, penalties, and
7interest due hereunder; to dispose of taxes, penalties, and
8interest so collected in the manner hereinafter provided; and
9to determine all rights to credit memoranda or refunds arising
10on account of the erroneous payment of tax, penalty, or
11interest hereunder. In the administration of and compliance
12with this paragraph, the Department and persons who are
13subject to this paragraph shall have the same rights,
14remedies, privileges, immunities, powers, and duties, and be
15subject to the same conditions, restrictions, limitations,
16penalties, exclusions, exemptions, and definitions of terms
17and employ the same modes of procedure, as are prescribed in
18Sections 2 (except the definition of "retailer maintaining a
19place of business in this State"), 3 through 3-80 (except
20provisions pertaining to the State rate of tax, and except
21provisions concerning collection or refunding of the tax by
22retailers), 4, 11, 12, 12a, 14, 15, 19 (except the portions
23pertaining to claims by retailers and except the last
24paragraph concerning refunds), 20, 21, and 22 of the Use Tax
25Act and Section 3-7 of the Uniform Penalty and Interest Act
26that are not inconsistent with this paragraph, as fully as if

 

 

HB3914- 164 -LRB103 27153 HLH 53522 b

1those provisions were set forth herein.
2    Whenever the Department determines that a refund should be
3made under this paragraph to a claimant instead of issuing a
4credit memorandum, the Department shall notify the State
5Comptroller, who shall cause the order to be drawn for the
6amount specified, and to the person named, in the notification
7from the Department. The refund shall be paid by the State
8Treasurer out of a county water commission tax fund
9established under subsection (g) of this Section.
10    (e) A certificate of registration issued by the State
11Department of Revenue to a retailer under the Retailers'
12Occupation Tax Act or under the Service Occupation Tax Act
13shall permit the registrant to engage in a business that is
14taxed under the tax imposed under subsection (b), (c), or (d)
15of this Section and no additional registration shall be
16required under the tax. A certificate issued under the Use Tax
17Act or the Service Use Tax Act shall be applicable with regard
18to any tax imposed under subsection (c) of this Section.
19    (f) Any ordinance imposing or discontinuing any tax under
20this Section shall be adopted and a certified copy thereof
21filed with the Department on or before June 1, whereupon the
22Department of Revenue shall proceed to administer and enforce
23this Section on behalf of the county water commission as of
24September 1 next following the adoption and filing. Beginning
25January 1, 1992, an ordinance or resolution imposing or
26discontinuing the tax hereunder shall be adopted and a

 

 

HB3914- 165 -LRB103 27153 HLH 53522 b

1certified copy thereof filed with the Department on or before
2the first day of July, whereupon the Department shall proceed
3to administer and enforce this Section as of the first day of
4October next following such adoption and filing. Beginning
5January 1, 1993, an ordinance or resolution imposing or
6discontinuing the tax hereunder shall be adopted and a
7certified copy thereof filed with the Department on or before
8the first day of October, whereupon the Department shall
9proceed to administer and enforce this Section as of the first
10day of January next following such adoption and filing.
11    (g) The State Department of Revenue shall, upon collecting
12any taxes as provided in this Section, pay the taxes over to
13the State Treasurer as trustee for the commission. The taxes
14shall be held in a trust fund outside the State Treasury.
15    As soon as possible after the first day of each month,
16beginning January 1, 2011, upon certification of the
17Department of Revenue, the Comptroller shall order
18transferred, and the Treasurer shall transfer, to the STAR
19Bonds Revenue Fund the local sales tax increment, as defined
20in the Innovation Development and Economy Act, collected under
21this Section during the second preceding calendar month for
22sales within a STAR bond district.
23    After the monthly transfer to the STAR Bonds Revenue Fund,
24on or before the 25th day of each calendar month, the State
25Department of Revenue shall prepare and certify to the
26Comptroller of the State of Illinois the amount to be paid to

 

 

HB3914- 166 -LRB103 27153 HLH 53522 b

1the commission, which shall be the amount (not including
2credit memoranda) collected under this Section during the
3second preceding calendar month by the Department plus an
4amount the Department determines is necessary to offset any
5amounts that were erroneously paid to a different taxing body,
6and not including any amount equal to the amount of refunds
7made during the second preceding calendar month by the
8Department on behalf of the commission, and not including any
9amount that the Department determines is necessary to offset
10any amounts that were payable to a different taxing body but
11were erroneously paid to the commission, and less any amounts
12that are transferred to the STAR Bonds Revenue Fund, less 1.5%
13of the remainder, which shall be transferred into the Tax
14Compliance and Administration Fund. The Department, at the
15time of each monthly disbursement to the commission, shall
16prepare and certify to the State Comptroller the amount to be
17transferred into the Tax Compliance and Administration Fund
18under this subsection. Within 10 days after receipt by the
19Comptroller of the certification of the amount to be paid to
20the commission and the Tax Compliance and Administration Fund,
21the Comptroller shall cause an order to be drawn for the
22payment for the amount in accordance with the direction in the
23certification.
24    (h) Beginning June 1, 2016, any tax imposed pursuant to
25this Section may no longer be imposed or collected, unless a
26continuation of the tax is approved by the voters at a

 

 

HB3914- 167 -LRB103 27153 HLH 53522 b

1referendum as set forth in this Section.
2    (i) Notwithstanding any other provision of law, no tax may
3be imposed under this Section on the sale or use of cannabis,
4as defined in Section 1-10 of the Cannabis Regulation and Tax
5Act.
6(Source: P.A. 100-23, eff. 7-6-17; 100-587, eff. 6-4-18;
7100-863, eff. 8-14-18; 100-1171, eff. 1-4-19; 101-10, eff.
86-5-19; 101-81, eff. 7-12-19; 101-604, eff. 12-13-19.)
 
9    Section 35. The Cannabis Regulation and Tax Act is amended
10by changing Sections 20-50, 60-10, and 65-10 as follows:
 
11    (410 ILCS 705/20-50)
12    Sec. 20-50. Cultivator taxes; returns.
13    (a) A tax is imposed upon the privilege of cultivating and
14processing adult use cannabis at the rate of 7% of the gross
15receipts from the sale of cannabis by a cultivator to a
16dispensing organization. The sale of any adult use product
17that contains any amount of cannabis or any derivative thereof
18is subject to the tax under this Section on the full selling
19price of the product. The proceeds from this tax shall be
20deposited into the Cannabis Regulation Fund. This tax shall be
21paid by the cultivator who makes the first sale and is not the
22responsibility of a dispensing organization, qualifying
23patient, or purchaser.
24    (b) In the administration of and compliance with this

 

 

HB3914- 168 -LRB103 27153 HLH 53522 b

1Section, the Department of Revenue and persons who are subject
2to this Section: (i) have the same rights, remedies,
3privileges, immunities, powers, and duties, (ii) are subject
4to the same conditions, restrictions, limitations, penalties,
5and definitions of terms, and (iii) shall employ the same
6modes of procedure as are set forth in the Cannabis
7Cultivation Privilege Tax Law and the Uniform Penalty and
8Interest Act as if those provisions were set forth in this
9Section.
10    (c) The tax imposed under this Act shall be in addition to
11all other occupation or privilege taxes imposed by the State
12of Illinois or by any municipal corporation or political
13subdivision thereof.
14    (d) Notwithstanding any other provision of law, no tax may
15be imposed under this Section on the sale or use of cannabis,
16as defined in Section 1-10 of the Cannabis Regulation and Tax
17Act.
18(Source: P.A. 101-27, eff. 6-25-19.)
 
19    (410 ILCS 705/60-10)
20    Sec. 60-10. Tax imposed.
21    (a) Beginning September 1, 2019, a tax is imposed upon the
22privilege of cultivating cannabis at the rate of 7% of the
23gross receipts from the first sale of cannabis by a
24cultivator. The sale of any product that contains any amount
25of cannabis or any derivative thereof is subject to the tax

 

 

HB3914- 169 -LRB103 27153 HLH 53522 b

1under this Section on the full selling price of the product.
2The Department may determine the selling price of the cannabis
3when the seller and purchaser are affiliated persons, when the
4sale and purchase of cannabis is not an arm's length
5transaction, or when cannabis is transferred by a craft grower
6to the craft grower's dispensing organization or infuser or
7processing organization and a value is not established for the
8cannabis. The value determined by the Department shall be
9commensurate with the actual price received for products of
10like quality, character, and use in the area. If there are no
11sales of cannabis of like quality, character, and use in the
12same area, then the Department shall establish a reasonable
13value based on sales of products of like quality, character,
14and use in other areas of the State, taking into consideration
15any other relevant factors.
16    (b) The Cannabis Cultivation Privilege Tax imposed under
17this Article is solely the responsibility of the cultivator
18who makes the first sale and is not the responsibility of a
19subsequent purchaser, a dispensing organization, or an
20infuser. Persons subject to the tax imposed under this Article
21may, however, reimburse themselves for their tax liability
22hereunder by separately stating reimbursement for their tax
23liability as an additional charge.
24    (c) The tax imposed under this Article shall be in
25addition to all other occupation, privilege, or excise taxes
26imposed by the State of Illinois or by any unit of local

 

 

HB3914- 170 -LRB103 27153 HLH 53522 b

1government.
2    (d) Notwithstanding any other provision of law, no special
3district may levy a tax upon the cultivation and processing of
4adult use cannabis.
5(Source: P.A. 101-27, eff. 6-25-19.)
 
6    (410 ILCS 705/65-10)
7    Sec. 65-10. Tax imposed.
8    (a) Beginning January 1, 2020, a tax is imposed upon
9purchasers for the privilege of using cannabis at the
10following rates:
11        (1) Any cannabis, other than a cannabis-infused
12    product, with an adjusted delta-9-tetrahydrocannabinol
13    level at or below 35% shall be taxed at a rate of 10% of
14    the purchase price;
15        (2) Any cannabis, other than a cannabis-infused
16    product, with an adjusted delta-9-tetrahydrocannabinol
17    level above 35% shall be taxed at a rate of 25% of the
18    purchase price; and
19        (3) A cannabis-infused product shall be taxed at a
20    rate of 20% of the purchase price.
21    (b) The purchase of any product that contains any amount
22of cannabis or any derivative thereof is subject to the tax
23under subsection (a) of this Section on the full purchase
24price of the product.
25    (c) The tax imposed under this Section is not imposed on

 

 

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1cannabis that is subject to tax under the Compassionate Use of
2Medical Cannabis Program Act. The tax imposed by this Section
3is not imposed with respect to any transaction in interstate
4commerce, to the extent the transaction may not, under the
5Constitution and statutes of the United States, be made the
6subject of taxation by this State.
7    (d) The tax imposed under this Article shall be in
8addition to all other occupation, privilege, or excise taxes
9imposed by the State of Illinois or by any municipal
10corporation or political subdivision thereof.
11    (e) The tax imposed under this Article shall not be
12imposed on any purchase by a purchaser if the cannabis
13retailer is prohibited by federal or State Constitution,
14treaty, convention, statute, or court decision from collecting
15the tax from the purchaser.
16    (f) Notwithstanding any other provision of law, no special
17district may levy a tax upon purchasers for the use of
18cannabis.
19(Source: P.A. 101-27, eff. 6-25-19; 101-593, eff. 12-4-19.)
 
20    Section 99. Effective date. This Act takes effect upon
21becoming law.