103RD GENERAL ASSEMBLY
State of Illinois
2023 and 2024
HB5759

 

Introduced 3/5/2024, by Rep. Sharon Chung

 

SYNOPSIS AS INTRODUCED:
 
New Act
5 ILCS 140/7.5
35 ILCS 5/203
35 ILCS 5/222
35 ILCS 5/241 new
35 ILCS 5/242 new
35 ILCS 17/10-1
35 ILCS 17/10-5
35 ILCS 17/10-10
35 ILCS 17/10-15
35 ILCS 17/10-20
35 ILCS 17/10-25
35 ILCS 17/10-30
35 ILCS 17/10-40
35 ILCS 17/10-50

    Creates the Music and Musicians Tax Credit and Jobs Act. Provides that the Department of Commerce and Economic Opportunity may award credits to qualified music companies. Creates the Music Education Scholarship Act. Provides that the Board of Higher Education may award scholarships to applicants who are enrolled in or accepted for admission to an associate, baccalaureate, or graduate degree program in music education and who agree to meet certain teaching obligations. Amends the Illinois Income Tax Act. Creates certain income tax credits for theater infrastructure projects. Amends the Live Theater Production Tax Credit Act. Renames the Act as the Live Music and Theater Production Tax Credit Act. Provides that the Act also applies to musical performances.


LRB103 36173 HLH 66265 b

 

 

A BILL FOR

 

HB5759LRB103 36173 HLH 66265 b

1    AN ACT concerning revenue.
 
2    Be it enacted by the People of the State of Illinois,
3represented in the General Assembly:
 
4
ARTICLE 5. MUSIC AND MUSICIANS TAX CREDIT AND JOBS ACT

 
5    Section 5-1. Short title. This Act may be cited as the
6Music and Musicians Tax Credit and Jobs Act. References in
7this Article to "this Act" mean this Article.
 
8    Section 5-5. Purpose. The State's economy depends heavily
9on music, professional musicians, music teachers, and
10educators. Illinois is a cultural crown jewel of the United
11States. Illinois and Chicago boast a robust history and
12community of creative artists, writers, musicians, architects,
13orchestras, live music and entertainment venues, civic operas,
14recording studios, and universities. The COVID-19 pandemic and
15the economic fallout that ensued brought on especially
16difficult circumstances for the live entertainment industry at
17large. Throughout the State, this has meant the closure of and
18overall decrease in culturally engaging aspects of Illinois
19cities from Cairo to Chicago.
20    According to the Americans for the Arts Action Fund, arts
21and culture represent 3.1% of the State's gross domestic
22product and 190,078 jobs. In fact, in 2020, Illinois arts and

 

 

HB5759- 2 -LRB103 36173 HLH 66265 b

1culture was larger than the State's agriculture industry. In
22015, nonprofit arts organizations in the State generated
3$4,000,000,000 in economic activity that supported 111,068
4jobs and generated $478,500,000 in State and local government
5revenue. In Chicago specifically, nonprofit arts groups
6generated $3,200,000,000 in total economic activity and
7$336,500,000 in State and local government revenue. Audiences
8exceeded 36,000,000 people.
9    Yet, during the COVID-19 pandemic, the arts suffered. As a
10result, Illinois arts and culture value added decreased by 9%
11between 2019 and 2020 and employment decreased by 12%.
12Ultimately, $3,200,000,000 and 26,644 jobs were lost. Even as
13live performances have resumed, audience sizes remain below
14pre-pandemic levels. Regional theaters, local orchestras,
15opera houses, and performing arts organizations are reporting
16persistent drops in attendance.
17    It is the policy of this State to promote and encourage the
18training and hiring of Illinois residents who represent the
19diversity of the Illinois population through the creation and
20implementation of training, education, and recruitment
21programs organized in cooperation with Illinois colleges and
22universities, labor organizations, and the commercial
23for-profit music industry.
 
24    Section 5-10. Definitions.
25    "Department" means the Department of Commerce and Economic

 

 

HB5759- 3 -LRB103 36173 HLH 66265 b

1Opportunity.
2    "Expenditure in the State" means (i) an expenditure to
3acquire, from a source within the State, property that is
4subject to the tax under the Use Tax Act, the Service Use Tax
5Act, the Service Occupation Tax Act, or the Retailers'
6Occupation Tax Act or (ii) an expenditure for compensation for
7services performed within the State that is subject to State
8income tax under the Illinois Income Tax Act.
9    "Illinois labor expenditure" means gross salary or wages
10including, but not limited to, taxes, benefits, and any other
11consideration incurred or paid to artist employees of the
12applicant for services rendered to and on behalf of the
13qualified music company, provided that the expenditure is:
14        (1) incurred or paid by the applicant on or after the
15    effective date of this Act for services related to any
16    portion of a qualified music company from rehearsals,
17    performances, and any other qualified music company
18    related activities;
19        (2) limited to the first $100,000 of wages incurred or
20    paid to each employee of a qualified music production in
21    each tax year;
22        (3) included in the federal income tax basis of the
23    property;
24        (4) paid in the tax year for which the applicant is
25    claiming the tax credit award or no later than 60 days
26    after the end of the tax year;

 

 

HB5759- 4 -LRB103 36173 HLH 66265 b

1        (5) paid to persons residing in Illinois at the time
2    payments were made; and
3        (6) reasonable under the circumstances.
4    "Qualified music company" means an entity that (i) is
5authorized to do business in Illinois, (ii) is engaged
6directly or indirectly in the production, distribution, or
7promotion of music, (iii) is certified by the Department as
8meeting the eligibility requirements of this Act, and (iv) has
9executed a contract with the Department providing the terms
10and conditions for its participation.
11    "QMC payroll" means wages reported by the qualified music
12company in box 1 of each W-2 form prepared for an employee of
13the qualified music company who is an Illinois resident.
14    "Resident copyright" means the copyright of a musical
15composition written by an Illinois resident or owned by an
16Illinois-domiciled music company, as evidenced by documents of
17ownership, including, but not limited to, registration with
18the United States Copyright Office.
19    "Sound recording" means a recording of music, poetry, or a
20spoken-word performance made, in whole or in part, in
21Illinois. "Sound recording" does not include the audio
22portions of dialogue or words spoken and recorded as part of
23television news coverage or athletic events.
24    "Sound recording production company" means a company
25engaged in the business of producing sound recordings. "Sound
26recording production company" does not include any person or

 

 

HB5759- 5 -LRB103 36173 HLH 66265 b

1company, or any company owned, affiliated, or controlled, in
2whole or in part, by any company or person, that is in default
3on a loan made by the State or a loan guaranteed by the State,
4nor which has ever declared bankruptcy under which an
5obligation of the company or person to pay or repay public
6funds or moneys was discharged as a part of the bankruptcy.
7    "State-certified production" means a sound recording
8production, or a series of productions, including but not
9limited to master and demonstration recordings, occurring over
10the course of a 12-month period, and the base
11production-related investment that is approved by the
12Department within 180 days after receipt by the Department of
13a complete application for initial certification of a
14production. If the production is not approved within 180 days,
15the Department shall provide a written report to the Senate
16Executive Committee and the House Executive Committee that
17states the reason why the production has not been approved.
18    "Tax credit award" means the issuance to a taxpayer by the
19Department of a tax credit award in conformance with Sections
2010-40 and 10-45 of this Act.
 
21    Section 5-15. Powers of the Department. The Department, in
22addition to those powers granted under the Civil
23Administrative Code of Illinois, is granted and has all the
24powers necessary or convenient to carry out and effectuate the
25purposes and provisions of this Act, including, but not

 

 

HB5759- 6 -LRB103 36173 HLH 66265 b

1limited to, the power and authority to:
2        (1) adopt rules that are necessary and appropriate for
3    the administration of this Act;
4        (2) establish forms for applications, notifications,
5    contracts, or any other agreements with respect to tax
6    credits under this Act and to accept applications for tax
7    credits under this Act at any time during the year;
8        (3) assist applicants for tax credits under this Act
9    to promote, foster, and support sound recording and live
10    theater development and production and its related job
11    creation or retention within the State;
12        (3) gather information and conduct inquiries, as
13    provided in this Act, required for the Department to
14    comply with the provisions of this Act and, without
15    limitation, to obtain information with respect to
16    applicants for the purpose of making any designations or
17    certifications necessary or desirable to assist the
18    Department with any recommendation or guidance in the
19    furtherance of the purposes of this Act and relating to
20    applicants' participation in training, education, and
21    recruitment programs that are organized in cooperation
22    with Illinois colleges and universities or labor
23    organizations designed to promote and encourage the
24    training and hiring of Illinois residents who represent
25    the diversity of the Illinois population;
26        (4) provide for sufficient personnel to permit

 

 

HB5759- 7 -LRB103 36173 HLH 66265 b

1    administrative, staffing, operating, and related support
2    required to adequately discharge the Department's duties
3    and responsibilities under this Act from funds as may be
4    appropriated by the General Assembly for the
5    administration of this Act; and
6        (5) require that the applicant at all times keep
7    proper books and records of accounts relating to the tax
8    credit award, in accordance with generally accepted
9    accounting principles consistently applied, and make those
10    books and records available for reasonable Department
11    inspection and audit, upon reasonable written request by
12    the Department, during the applicant's normal business
13    hours. Any documents or data made available to the
14    Department or received by the Department from the
15    applicant by any agent, employee, officer, or service
16    provider shall be deemed confidential and shall not
17    constitute public records to the extent that the documents
18    or data consist of commercial or financial information
19    regarding the operation by the applicant of any theater or
20    any accredited theater production or any recipient of any
21    tax credit award under this Act.
 
22    Section 5-20. Application for certification of qualified
23music company. Any applicant that operates a qualified music
24company located in the State or is proposing to operate a
25qualified music company in the State may apply to the

 

 

HB5759- 8 -LRB103 36173 HLH 66265 b

1Department to have the qualified music company certified by
2the Department as a qualified music company.
 
3    Section 5-25. Review of applications for qualified music
4company certificates.
5     (a) The Department shall issue a qualified music company
6certificate to an applicant if it finds that a preponderance
7of the following conditions exists:
8        (1) the applicant is engaged directly or indirectly in
9    the production, distribution, and promotion of music;
10        (2) the applicant intends to make the expenditure in
11    the State required for certification of the qualified
12    music company;
13        (3) the applicant's qualified music company is
14    economically sound and will benefit the people of the
15    State of Illinois by increasing opportunities for
16    employment and will strengthen the economy of Illinois;
17        (4) the following requirements related to the
18    implementation of a diversity plan have been met:
19            (A) the applicant has filed with the Department a
20        diversity plan outlining specific goals for hiring
21        Illinois labor expenditure eligible minority persons
22        and women, as defined in the Business Enterprise for
23        Minorities, Women, and Persons with Disabilities Act,
24        and for using vendors receiving certification under
25        the Business Enterprise for Minorities, Women, and

 

 

HB5759- 9 -LRB103 36173 HLH 66265 b

1        Persons with Disabilities Act;
2            (B) the Department has approved the plan as
3        meeting the requirements established by the Department
4        and verified that the applicant has met or made good
5        faith efforts in achieving those goals; and
6            (C) the Department has adopted any rules that are
7        necessary to ensure compliance with the provisions set
8        forth in this paragraph (4) and any rules that are
9        necessary to show that the applicant's plan reflects
10        the diversity of the population of this State;
11        (5) the applicant's qualified music company
12    application indicates whether the applicant intends to
13    participate in training, education, and recruitment
14    programs that are organized in cooperation with Illinois
15    colleges and universities, labor organizations, and the
16    holders of qualified music company certificates and are
17    designed to promote and encourage the training and hiring
18    of Illinois residents who represent the diversity of
19    Illinois; and
20        (6) the tax credit award will result in an overall
21    positive impact to the State, as determined by the
22    Department using the best available data.
23    (b) If any of the provisions in this Section conflict with
24any existing collective bargaining agreements, the terms and
25conditions of those collective bargaining agreements shall
26control.

 

 

HB5759- 10 -LRB103 36173 HLH 66265 b

1    (c) The Department shall act expeditiously regarding
2approval of applications for qualified music companies so as
3to accommodate the operations and needs of those companies.
 
4    Section 5-30. Training programs for skills in critical
5demand. To accomplish the purposes of this Act, the Department
6may use the training programs provided under Section 605-800
7of the Department of Commerce and Economic Opportunity Law of
8the Civil Administrative Code of Illinois.
 
9    Section 5-35. Issuance of tax credit award certificate.
10    (a) In order to qualify for a tax credit award under this
11Act, an applicant must file an application for each qualified
12music company at each of the applicant's qualified facilities,
13on forms prescribed by the Department, providing information
14necessary to calculate the tax credit award and any additional
15information as reasonably required by the Department.
16    (b) Upon satisfactory review of the application, the
17Department shall issue a tax credit award certificate stating
18the amount of the tax credit award to which the applicant is
19entitled for that tax year and shall contemporaneously notify
20the applicant and the Department of Revenue.
 
21    Section 5-40. Amount and payment of the tax credit award.
22    (a) For taxable years beginning on or after January 1,
232025, the Department may award tax credit awards to qualified

 

 

HB5759- 11 -LRB103 36173 HLH 66265 b

1music companies. The award may not exceed 10% of the Illinois
2labor expenditures for the State-certified production if the
3QMC payroll of the qualified music company for the taxable
4year does not exceed $150,000 or 15% of the Illinois labor
5expenditures for the State-certified production if the QMC
6payroll of the qualified music company for the taxable year
7exceeds $150,000, plus all of the following::
8        (1) an additional 15% of the Illinois labor
9    expenditures for the State-certified production generated
10    by the employment of Illinois residents in geographic
11    areas of high poverty or high unemployment in each tax
12    year, as determined by the Department; and
13        (2) an additional 7% of the Illinois labor
14    expenditures for the State-certified production generated
15    by the employment of individuals who are employed at a
16    wage of no less than the general prevailing hourly rate as
17    paid for work of a similar character in the locality in
18    which the work is performed; and
19        (3) an additional 7% of the Illinois labor
20    expenditures for the State-certified production incurred
21    by a qualified music company and spent on post-production
22    sound recording for television or film work completed in
23    Illinois.
24    (b) To the extent that the base investment by a qualified
25music company is expended on a sound recording production of a
26resident copyright, the investor shall be allowed an

 

 

HB5759- 12 -LRB103 36173 HLH 66265 b

1additional 10% increase in the base investment rate.
2    (c) The aggregate amount of credits certified for all
3investors pursuant to this Section during any calendar year
4shall not exceed $25,000,000. No more than $500,000 in tax
5credits may be granted per calendar year for any single
6qualified music company.
7    (d) Company-based QMC payroll credit. A business shall be
8eligible for participation in the program if the business
9meets all of the following criteria:
10        (1) The business is engaged directly or indirectly in
11    the production, distribution, and promotion of music.
12        (2) The business is approved by the Director of
13    Commerce and Economic Opportunity.
14    (e) Upon approval of a tax credit award under this Act, the
15Department shall issue a tax credit certificate to the
16applicant.
 
17    Section 5-45. Qualified music program evaluation and
18reports.
19    (a) The Department's qualified music program tax credit
20award evaluation must include:
21        (1) an assessment of the effectiveness of the program
22    in creating and retaining new jobs in Illinois;
23        (2) an assessment of the revenue impact of the
24    program;
25        (3) in the discretion of the Department, a review of

 

 

HB5759- 13 -LRB103 36173 HLH 66265 b

1    the practices and experiences of other states or nations
2    with similar programs; and
3        (4) an assessment of the overall success of the
4    program.
5The Department may make a recommendation to extend, modify, or
6    not extend the program based on the evaluation.
7    (b) At the end of each fiscal quarter, the Department
8shall submit to the General Assembly a report that includes,
9without limitation:
10        (1) an assessment of the economic impact of the
11    program, including the number of jobs created and
12    retained, and whether the job positions are entry level,
13    management, vendor, or production related;
14        (2) the amount of qualified music company spending
15    brought to Illinois, including the amount of spending and
16    type of Illinois vendors hired in connection with a
17    qualified music company; and
18        (3) a determination of whether those receiving
19    qualifying Illinois labor expenditure salaries or wages
20    reflect the geographic, racial and ethnic, gender, and
21    income level diversity of the State of Illinois.
22    (c) At the end of each fiscal year, the Department shall
23submit to the General Assembly a report that includes, without
24limitation:
25        (1) the identification of each vendor that provided
26    goods or services that were included in an qualified music

 

 

HB5759- 14 -LRB103 36173 HLH 66265 b

1    company's Illinois spending;
2        (2) a statement of the amount paid to each identified
3    vendor by the qualified music program and whether the
4    vendor is a minority-owned or women-owned business as
5    defined in Section 2 of the Business Enterprise for
6    Minorities, Women, and Persons with Disabilities Act; and
7        (3) a description of the steps taken by the Department
8    to encourage qualified music company to use vendors who
9    are minority-owned or women-owned businesses.
 
10    Section 5-50. Program terms and conditions. Any
11documentary materials or data made available or received from
12an applicant by any agent or employee of the Department are
13confidential and are not public records to the extent that the
14materials or data consist of commercial or financial
15information regarding the operation of or the production of
16the applicant or recipient of any tax credit award under this
17Act.
 
18
ARTICLE 10. MUSIC EDUCATION SCHOLARSHIP ACT

 
19    Section 10-1. Short title. This Act may be cited as the
20Music Education Scholarship Act. References in this Article to
21"this Act" mean this Article.
 
22    Section 10-5. Definitions. As used in this Act:

 

 

HB5759- 15 -LRB103 36173 HLH 66265 b

1    "Academic year" means the period of time from September 1
2of one year through August 31 of the next year or as otherwise
3defined by the academic institution.
4    "Approved institution" means a public community college,
5private junior college, or public or private college or
6university with a pre-licensure music education program
7located in this State.
8    "Board" means the Board of Higher Education created by the
9Board of Higher Education Act.
10    "Enrollment" means the establishment and maintenance of an
11individual's status as a student in an approved institution,
12regardless of the terms used at the institution to describe
13such status.
14    "Fees" means those mandatory charges, in addition to
15tuition, that all enrolled students must pay, including
16required course or lab fees.
17    "Full-time student" means a student enrolled for at least
1812 hours per term or as otherwise determined by the academic
19institution.
20    "Graduate degree in music program" means a program offered
21by an approved institution and leading to a master's degree in
22music education or any other graduate degree in music
23education.
24    "Music education employment obligation" means employment
25in this State as a certified teacher with a music education
26specialization, for at least one year for each year of

 

 

HB5759- 16 -LRB103 36173 HLH 66265 b

1scholarship assistance received through the program under this
2Act.
3    "Part-time student" means a person who is enrolled for at
4least one-third of the number of hours required per term by a
5school for its full-time students.
6    "Student in good standing" means a student maintaining a
7cumulative grade point average equivalent to at least the
8academic grade of a "C".
9    "Tuition" means the established charges of an institution
10of higher learning for instruction at that institution.
 
11    Section 10-10. Music education scholarships.
12    (a) Beginning with the fall term of the 2024-2025 academic
13year, the Board, in accordance with rules adopted by it for the
14purposes of this Act, shall provide scholarships to
15individuals selected from among those applicants who qualify
16for scholarships under this Act. An applicant qualifies for a
17scholarship under this Act if:
18        (1) the applicant has been a resident of this State
19    for at least one year prior to application and is a citizen
20    or a lawful permanent resident of the United States;
21        (2) the applicant is enrolled in or accepted for
22    admission to an associate, baccalaureate, or graduate
23    degree program in music education at an approved
24    institution; and
25        (3) the applicant agrees to meet the music education

 

 

HB5759- 17 -LRB103 36173 HLH 66265 b

1    employment obligation.
2    (b) If, in any year, the number of qualified applicants
3exceeds the number of scholarships to be awarded, the Board
4shall consider the following factors in granting priority in
5awarding scholarships:
6        (1) the applicant's financial need, as shown on a
7    standardized financial needs assessment form used by the
8    approved institution for students who will pursue their
9    education on a full-time basis;
10        (2) whether the applicant is already employed as a
11    music educator and is pursuing a graduate degree in music
12    education to pursue employment in an approved institution
13    that educates music educators in undergraduate and
14    graduate programs;
15        (3) the applicant's merit, as shown through the
16    applicant's grade point average, class rank, and other
17    academic and extracurricular activities; and
18        (4) any other criteria set by the Board by rule.
19    Unless otherwise indicated, scholarships shall be awarded
20to recipients at approved institutions for a period of up to 2
21years if the recipient is enrolled in an associate degree in
22music educator, up to 4 years if the recipient is enrolled in a
23baccalaureate degree in music education program, and up to 5
24years if the recipient is enrolled in a graduate degree in
25music education program. At least 40% of the scholarships
26awarded shall be for recipients who are pursuing baccalaureate

 

 

HB5759- 18 -LRB103 36173 HLH 66265 b

1degrees; 30% of the scholarships awarded shall be for
2recipients who are pursuing associate degrees; and 30% of the
3scholarships awarded shall be for recipients who are pursuing
4a graduate degree.
5    During the 2024-2025 academic year, subject to
6appropriation, the Board may award a total of $500,000 in
7scholarships under this Section.
 
8    Section 10-15. Amount of scholarships. In determining the
9amount of the scholarships awarded under this Act, the Board
10shall consider tuition and fee charges at approved
11institutions as well as projected living expenses for
12students. Seventy-five percent of the weighted tuition and
13fees charged by community colleges in Illinois shall be added
14to the uniform living allowance reported in the weighted
15Monetary Award Program (MAP) budget to determine the full-time
16scholarship amount for students pursuing an associate degree
17at an Illinois community college. Scholarship amounts for
18students pursuing associate, baccalaureate, or graduate
19degrees at a college or university shall include 75% of the
20weighted tuition and fees charged by public universities in
21Illinois, plus the uniform living allowance reported in the
22weighted MAP budget. The Board may provide that scholarships
23shall be awarded on a quarterly or semi-annual basis and shall
24be contingent upon the student diligently pursuing music
25education studies and being a student in good standing.

 

 

HB5759- 19 -LRB103 36173 HLH 66265 b

1Scholarship awards may be provided to part-time students; for
2part-time students, the amount of the scholarship shall be
3determined by applying the proportion represented by the
4part-time enrollment to full-time enrollment ratio to the
5average per-term scholarship amount for a student in the same
6degree category.
 
7    Section 10-20. Approved institutions. An approved
8institution must maintain compliance with all applicable State
9and federal laws. An approved institution is not eligible for
10other programs administered by the Board and is not required
11to meet the definition of "institution of higher learning",
12"qualified institution", or "institution", as defined in
13Section 10 of the Higher Education Student Assistance Act. The
14Board may establish, by rule, additional requirements for
15approved institutions.
 
16    Section 10-25. Duties of the Board. The Board shall:
17        (1) prepare and supervise the issuance of public
18    information about this Act;
19        (2) prescribe the form and regulate the submission of
20    applications for scholarships under this Act;
21        (3) determine the eligibility of applicants for
22    scholarships under this Act;
23        (4) award the appropriate scholarships under this Act;
24        (5) prescribe the contracts or other acknowledgments

 

 

HB5759- 20 -LRB103 36173 HLH 66265 b

1    of scholarship that an applicant is required to execute;
2    and
3        (6) determine whether all or any part of a recipient's
4    scholarship must be monetarily repaid, or has been excused
5    from repayment, and the extent of any repayment or excused
6    repayment.
7    The Board may require a recipient to reimburse the State
8for expenses, including, but not limited to, attorney's fees,
9incurred by the Board or any other agent of the State for a
10successful legal action against the recipient for a breach of
11any provision of the scholarship contract. The Board may adopt
12rules to carry out the duties set forth in this Act.
 
13
ARTICLE 15. AMENDATORY PROVISIONS

 
14    Section 15-3. The Freedom of Information Act is amended by
15changing Section 7.5 as follows:
 
16    (5 ILCS 140/7.5)
17    (Text of Section before amendment by P.A. 103-472)
18    Sec. 7.5. Statutory exemptions. To the extent provided for
19by the statutes referenced below, the following shall be
20exempt from inspection and copying:
21        (a) All information determined to be confidential
22    under Section 4002 of the Technology Advancement and
23    Development Act.

 

 

HB5759- 21 -LRB103 36173 HLH 66265 b

1        (b) Library circulation and order records identifying
2    library users with specific materials under the Library
3    Records Confidentiality Act.
4        (c) Applications, related documents, and medical
5    records received by the Experimental Organ Transplantation
6    Procedures Board and any and all documents or other
7    records prepared by the Experimental Organ Transplantation
8    Procedures Board or its staff relating to applications it
9    has received.
10        (d) Information and records held by the Department of
11    Public Health and its authorized representatives relating
12    to known or suspected cases of sexually transmissible
13    disease or any information the disclosure of which is
14    restricted under the Illinois Sexually Transmissible
15    Disease Control Act.
16        (e) Information the disclosure of which is exempted
17    under Section 30 of the Radon Industry Licensing Act.
18        (f) Firm performance evaluations under Section 55 of
19    the Architectural, Engineering, and Land Surveying
20    Qualifications Based Selection Act.
21        (g) Information the disclosure of which is restricted
22    and exempted under Section 50 of the Illinois Prepaid
23    Tuition Act.
24        (h) Information the disclosure of which is exempted
25    under the State Officials and Employees Ethics Act, and
26    records of any lawfully created State or local inspector

 

 

HB5759- 22 -LRB103 36173 HLH 66265 b

1    general's office that would be exempt if created or
2    obtained by an Executive Inspector General's office under
3    that Act.
4        (i) Information contained in a local emergency energy
5    plan submitted to a municipality in accordance with a
6    local emergency energy plan ordinance that is adopted
7    under Section 11-21.5-5 of the Illinois Municipal Code.
8        (j) Information and data concerning the distribution
9    of surcharge moneys collected and remitted by carriers
10    under the Emergency Telephone System Act.
11        (k) Law enforcement officer identification information
12    or driver identification information compiled by a law
13    enforcement agency or the Department of Transportation
14    under Section 11-212 of the Illinois Vehicle Code.
15        (l) Records and information provided to a residential
16    health care facility resident sexual assault and death
17    review team or the Executive Council under the Abuse
18    Prevention Review Team Act.
19        (m) Information provided to the predatory lending
20    database created pursuant to Article 3 of the Residential
21    Real Property Disclosure Act, except to the extent
22    authorized under that Article.
23        (n) Defense budgets and petitions for certification of
24    compensation and expenses for court appointed trial
25    counsel as provided under Sections 10 and 15 of the
26    Capital Crimes Litigation Act (repealed). This subsection

 

 

HB5759- 23 -LRB103 36173 HLH 66265 b

1    (n) shall apply until the conclusion of the trial of the
2    case, even if the prosecution chooses not to pursue the
3    death penalty prior to trial or sentencing.
4        (o) Information that is prohibited from being
5    disclosed under Section 4 of the Illinois Health and
6    Hazardous Substances Registry Act.
7        (p) Security portions of system safety program plans,
8    investigation reports, surveys, schedules, lists, data, or
9    information compiled, collected, or prepared by or for the
10    Department of Transportation under Sections 2705-300 and
11    2705-616 of the Department of Transportation Law of the
12    Civil Administrative Code of Illinois, the Regional
13    Transportation Authority under Section 2.11 of the
14    Regional Transportation Authority Act, or the St. Clair
15    County Transit District under the Bi-State Transit Safety
16    Act (repealed).
17        (q) Information prohibited from being disclosed by the
18    Personnel Record Review Act.
19        (r) Information prohibited from being disclosed by the
20    Illinois School Student Records Act.
21        (s) Information the disclosure of which is restricted
22    under Section 5-108 of the Public Utilities Act.
23        (t) (Blank).
24        (u) Records and information provided to an independent
25    team of experts under the Developmental Disability and
26    Mental Health Safety Act (also known as Brian's Law).

 

 

HB5759- 24 -LRB103 36173 HLH 66265 b

1        (v) Names and information of people who have applied
2    for or received Firearm Owner's Identification Cards under
3    the Firearm Owners Identification Card Act or applied for
4    or received a concealed carry license under the Firearm
5    Concealed Carry Act, unless otherwise authorized by the
6    Firearm Concealed Carry Act; and databases under the
7    Firearm Concealed Carry Act, records of the Concealed
8    Carry Licensing Review Board under the Firearm Concealed
9    Carry Act, and law enforcement agency objections under the
10    Firearm Concealed Carry Act.
11        (v-5) Records of the Firearm Owner's Identification
12    Card Review Board that are exempted from disclosure under
13    Section 10 of the Firearm Owners Identification Card Act.
14        (w) Personally identifiable information which is
15    exempted from disclosure under subsection (g) of Section
16    19.1 of the Toll Highway Act.
17        (x) Information which is exempted from disclosure
18    under Section 5-1014.3 of the Counties Code or Section
19    8-11-21 of the Illinois Municipal Code.
20        (y) Confidential information under the Adult
21    Protective Services Act and its predecessor enabling
22    statute, the Elder Abuse and Neglect Act, including
23    information about the identity and administrative finding
24    against any caregiver of a verified and substantiated
25    decision of abuse, neglect, or financial exploitation of
26    an eligible adult maintained in the Registry established

 

 

HB5759- 25 -LRB103 36173 HLH 66265 b

1    under Section 7.5 of the Adult Protective Services Act.
2        (z) Records and information provided to a fatality
3    review team or the Illinois Fatality Review Team Advisory
4    Council under Section 15 of the Adult Protective Services
5    Act.
6        (aa) Information which is exempted from disclosure
7    under Section 2.37 of the Wildlife Code.
8        (bb) Information which is or was prohibited from
9    disclosure by the Juvenile Court Act of 1987.
10        (cc) Recordings made under the Law Enforcement
11    Officer-Worn Body Camera Act, except to the extent
12    authorized under that Act.
13        (dd) Information that is prohibited from being
14    disclosed under Section 45 of the Condominium and Common
15    Interest Community Ombudsperson Act.
16        (ee) Information that is exempted from disclosure
17    under Section 30.1 of the Pharmacy Practice Act.
18        (ff) Information that is exempted from disclosure
19    under the Revised Uniform Unclaimed Property Act.
20        (gg) Information that is prohibited from being
21    disclosed under Section 7-603.5 of the Illinois Vehicle
22    Code.
23        (hh) Records that are exempt from disclosure under
24    Section 1A-16.7 of the Election Code.
25        (ii) Information which is exempted from disclosure
26    under Section 2505-800 of the Department of Revenue Law of

 

 

HB5759- 26 -LRB103 36173 HLH 66265 b

1    the Civil Administrative Code of Illinois.
2        (jj) Information and reports that are required to be
3    submitted to the Department of Labor by registering day
4    and temporary labor service agencies but are exempt from
5    disclosure under subsection (a-1) of Section 45 of the Day
6    and Temporary Labor Services Act.
7        (kk) Information prohibited from disclosure under the
8    Seizure and Forfeiture Reporting Act.
9        (ll) Information the disclosure of which is restricted
10    and exempted under Section 5-30.8 of the Illinois Public
11    Aid Code.
12        (mm) Records that are exempt from disclosure under
13    Section 4.2 of the Crime Victims Compensation Act.
14        (nn) Information that is exempt from disclosure under
15    Section 70 of the Higher Education Student Assistance Act.
16        (oo) Communications, notes, records, and reports
17    arising out of a peer support counseling session
18    prohibited from disclosure under the First Responders
19    Suicide Prevention Act.
20        (pp) Names and all identifying information relating to
21    an employee of an emergency services provider or law
22    enforcement agency under the First Responders Suicide
23    Prevention Act.
24        (qq) Information and records held by the Department of
25    Public Health and its authorized representatives collected
26    under the Reproductive Health Act.

 

 

HB5759- 27 -LRB103 36173 HLH 66265 b

1        (rr) Information that is exempt from disclosure under
2    the Cannabis Regulation and Tax Act.
3        (ss) Data reported by an employer to the Department of
4    Human Rights pursuant to Section 2-108 of the Illinois
5    Human Rights Act.
6        (tt) Recordings made under the Children's Advocacy
7    Center Act, except to the extent authorized under that
8    Act.
9        (uu) Information that is exempt from disclosure under
10    Section 50 of the Sexual Assault Evidence Submission Act.
11        (vv) Information that is exempt from disclosure under
12    subsections (f) and (j) of Section 5-36 of the Illinois
13    Public Aid Code.
14        (ww) Information that is exempt from disclosure under
15    Section 16.8 of the State Treasurer Act.
16        (xx) Information that is exempt from disclosure or
17    information that shall not be made public under the
18    Illinois Insurance Code.
19        (yy) Information prohibited from being disclosed under
20    the Illinois Educational Labor Relations Act.
21        (zz) Information prohibited from being disclosed under
22    the Illinois Public Labor Relations Act.
23        (aaa) Information prohibited from being disclosed
24    under Section 1-167 of the Illinois Pension Code.
25        (bbb) Information that is prohibited from disclosure
26    by the Illinois Police Training Act and the Illinois State

 

 

HB5759- 28 -LRB103 36173 HLH 66265 b

1    Police Act.
2        (ccc) Records exempt from disclosure under Section
3    2605-304 of the Illinois State Police Law of the Civil
4    Administrative Code of Illinois.
5        (ddd) Information prohibited from being disclosed
6    under Section 35 of the Address Confidentiality for
7    Victims of Domestic Violence, Sexual Assault, Human
8    Trafficking, or Stalking Act.
9        (eee) Information prohibited from being disclosed
10    under subsection (b) of Section 75 of the Domestic
11    Violence Fatality Review Act.
12        (fff) Images from cameras under the Expressway Camera
13    Act. This subsection (fff) is inoperative on and after
14    July 1, 2025.
15        (ggg) Information prohibited from disclosure under
16    paragraph (3) of subsection (a) of Section 14 of the Nurse
17    Agency Licensing Act.
18        (hhh) Information submitted to the Illinois State
19    Police in an affidavit or application for an assault
20    weapon endorsement, assault weapon attachment endorsement,
21    .50 caliber rifle endorsement, or .50 caliber cartridge
22    endorsement under the Firearm Owners Identification Card
23    Act.
24        (iii) Data exempt from disclosure under Section 50 of
25    the School Safety Drill Act.
26        (jjj) (hhh) Information exempt from disclosure under

 

 

HB5759- 29 -LRB103 36173 HLH 66265 b

1    Section 30 of the Insurance Data Security Law.
2        (kkk) (iii) Confidential business information
3    prohibited from disclosure under Section 45 of the Paint
4    Stewardship Act.
5        (lll) (Reserved).
6        (mmm) (iii) Information prohibited from being
7    disclosed under subsection (e) of Section 1-129 of the
8    Illinois Power Agency Act.
9        (nnn) Materials received by the Department of Commerce
10    and Economic Opportunity that are confidential under
11    Section 5-50 of the Music and Musicians Tax Credit and
12    Jobs Act.
13(Source: P.A. 102-36, eff. 6-25-21; 102-237, eff. 1-1-22;
14102-292, eff. 1-1-22; 102-520, eff. 8-20-21; 102-559, eff.
158-20-21; 102-813, eff. 5-13-22; 102-946, eff. 7-1-22;
16102-1042, eff. 6-3-22; 102-1116, eff. 1-10-23; 103-8, eff.
176-7-23; 103-34, eff. 6-9-23; 103-142, eff. 1-1-24; 103-372,
18eff. 1-1-24; 103-508, eff. 8-4-23; 103-580, eff. 12-8-23;
19revised 1-2-24.)
 
20    (Text of Section after amendment by P.A. 103-472)
21    Sec. 7.5. Statutory exemptions. To the extent provided for
22by the statutes referenced below, the following shall be
23exempt from inspection and copying:
24        (a) All information determined to be confidential
25    under Section 4002 of the Technology Advancement and

 

 

HB5759- 30 -LRB103 36173 HLH 66265 b

1    Development Act.
2        (b) Library circulation and order records identifying
3    library users with specific materials under the Library
4    Records Confidentiality Act.
5        (c) Applications, related documents, and medical
6    records received by the Experimental Organ Transplantation
7    Procedures Board and any and all documents or other
8    records prepared by the Experimental Organ Transplantation
9    Procedures Board or its staff relating to applications it
10    has received.
11        (d) Information and records held by the Department of
12    Public Health and its authorized representatives relating
13    to known or suspected cases of sexually transmissible
14    disease or any information the disclosure of which is
15    restricted under the Illinois Sexually Transmissible
16    Disease Control Act.
17        (e) Information the disclosure of which is exempted
18    under Section 30 of the Radon Industry Licensing Act.
19        (f) Firm performance evaluations under Section 55 of
20    the Architectural, Engineering, and Land Surveying
21    Qualifications Based Selection Act.
22        (g) Information the disclosure of which is restricted
23    and exempted under Section 50 of the Illinois Prepaid
24    Tuition Act.
25        (h) Information the disclosure of which is exempted
26    under the State Officials and Employees Ethics Act, and

 

 

HB5759- 31 -LRB103 36173 HLH 66265 b

1    records of any lawfully created State or local inspector
2    general's office that would be exempt if created or
3    obtained by an Executive Inspector General's office under
4    that Act.
5        (i) Information contained in a local emergency energy
6    plan submitted to a municipality in accordance with a
7    local emergency energy plan ordinance that is adopted
8    under Section 11-21.5-5 of the Illinois Municipal Code.
9        (j) Information and data concerning the distribution
10    of surcharge moneys collected and remitted by carriers
11    under the Emergency Telephone System Act.
12        (k) Law enforcement officer identification information
13    or driver identification information compiled by a law
14    enforcement agency or the Department of Transportation
15    under Section 11-212 of the Illinois Vehicle Code.
16        (l) Records and information provided to a residential
17    health care facility resident sexual assault and death
18    review team or the Executive Council under the Abuse
19    Prevention Review Team Act.
20        (m) Information provided to the predatory lending
21    database created pursuant to Article 3 of the Residential
22    Real Property Disclosure Act, except to the extent
23    authorized under that Article.
24        (n) Defense budgets and petitions for certification of
25    compensation and expenses for court appointed trial
26    counsel as provided under Sections 10 and 15 of the

 

 

HB5759- 32 -LRB103 36173 HLH 66265 b

1    Capital Crimes Litigation Act (repealed). This subsection
2    (n) shall apply until the conclusion of the trial of the
3    case, even if the prosecution chooses not to pursue the
4    death penalty prior to trial or sentencing.
5        (o) Information that is prohibited from being
6    disclosed under Section 4 of the Illinois Health and
7    Hazardous Substances Registry Act.
8        (p) Security portions of system safety program plans,
9    investigation reports, surveys, schedules, lists, data, or
10    information compiled, collected, or prepared by or for the
11    Department of Transportation under Sections 2705-300 and
12    2705-616 of the Department of Transportation Law of the
13    Civil Administrative Code of Illinois, the Regional
14    Transportation Authority under Section 2.11 of the
15    Regional Transportation Authority Act, or the St. Clair
16    County Transit District under the Bi-State Transit Safety
17    Act (repealed).
18        (q) Information prohibited from being disclosed by the
19    Personnel Record Review Act.
20        (r) Information prohibited from being disclosed by the
21    Illinois School Student Records Act.
22        (s) Information the disclosure of which is restricted
23    under Section 5-108 of the Public Utilities Act.
24        (t) (Blank).
25        (u) Records and information provided to an independent
26    team of experts under the Developmental Disability and

 

 

HB5759- 33 -LRB103 36173 HLH 66265 b

1    Mental Health Safety Act (also known as Brian's Law).
2        (v) Names and information of people who have applied
3    for or received Firearm Owner's Identification Cards under
4    the Firearm Owners Identification Card Act or applied for
5    or received a concealed carry license under the Firearm
6    Concealed Carry Act, unless otherwise authorized by the
7    Firearm Concealed Carry Act; and databases under the
8    Firearm Concealed Carry Act, records of the Concealed
9    Carry Licensing Review Board under the Firearm Concealed
10    Carry Act, and law enforcement agency objections under the
11    Firearm Concealed Carry Act.
12        (v-5) Records of the Firearm Owner's Identification
13    Card Review Board that are exempted from disclosure under
14    Section 10 of the Firearm Owners Identification Card Act.
15        (w) Personally identifiable information which is
16    exempted from disclosure under subsection (g) of Section
17    19.1 of the Toll Highway Act.
18        (x) Information which is exempted from disclosure
19    under Section 5-1014.3 of the Counties Code or Section
20    8-11-21 of the Illinois Municipal Code.
21        (y) Confidential information under the Adult
22    Protective Services Act and its predecessor enabling
23    statute, the Elder Abuse and Neglect Act, including
24    information about the identity and administrative finding
25    against any caregiver of a verified and substantiated
26    decision of abuse, neglect, or financial exploitation of

 

 

HB5759- 34 -LRB103 36173 HLH 66265 b

1    an eligible adult maintained in the Registry established
2    under Section 7.5 of the Adult Protective Services Act.
3        (z) Records and information provided to a fatality
4    review team or the Illinois Fatality Review Team Advisory
5    Council under Section 15 of the Adult Protective Services
6    Act.
7        (aa) Information which is exempted from disclosure
8    under Section 2.37 of the Wildlife Code.
9        (bb) Information which is or was prohibited from
10    disclosure by the Juvenile Court Act of 1987.
11        (cc) Recordings made under the Law Enforcement
12    Officer-Worn Body Camera Act, except to the extent
13    authorized under that Act.
14        (dd) Information that is prohibited from being
15    disclosed under Section 45 of the Condominium and Common
16    Interest Community Ombudsperson Act.
17        (ee) Information that is exempted from disclosure
18    under Section 30.1 of the Pharmacy Practice Act.
19        (ff) Information that is exempted from disclosure
20    under the Revised Uniform Unclaimed Property Act.
21        (gg) Information that is prohibited from being
22    disclosed under Section 7-603.5 of the Illinois Vehicle
23    Code.
24        (hh) Records that are exempt from disclosure under
25    Section 1A-16.7 of the Election Code.
26        (ii) Information which is exempted from disclosure

 

 

HB5759- 35 -LRB103 36173 HLH 66265 b

1    under Section 2505-800 of the Department of Revenue Law of
2    the Civil Administrative Code of Illinois.
3        (jj) Information and reports that are required to be
4    submitted to the Department of Labor by registering day
5    and temporary labor service agencies but are exempt from
6    disclosure under subsection (a-1) of Section 45 of the Day
7    and Temporary Labor Services Act.
8        (kk) Information prohibited from disclosure under the
9    Seizure and Forfeiture Reporting Act.
10        (ll) Information the disclosure of which is restricted
11    and exempted under Section 5-30.8 of the Illinois Public
12    Aid Code.
13        (mm) Records that are exempt from disclosure under
14    Section 4.2 of the Crime Victims Compensation Act.
15        (nn) Information that is exempt from disclosure under
16    Section 70 of the Higher Education Student Assistance Act.
17        (oo) Communications, notes, records, and reports
18    arising out of a peer support counseling session
19    prohibited from disclosure under the First Responders
20    Suicide Prevention Act.
21        (pp) Names and all identifying information relating to
22    an employee of an emergency services provider or law
23    enforcement agency under the First Responders Suicide
24    Prevention Act.
25        (qq) Information and records held by the Department of
26    Public Health and its authorized representatives collected

 

 

HB5759- 36 -LRB103 36173 HLH 66265 b

1    under the Reproductive Health Act.
2        (rr) Information that is exempt from disclosure under
3    the Cannabis Regulation and Tax Act.
4        (ss) Data reported by an employer to the Department of
5    Human Rights pursuant to Section 2-108 of the Illinois
6    Human Rights Act.
7        (tt) Recordings made under the Children's Advocacy
8    Center Act, except to the extent authorized under that
9    Act.
10        (uu) Information that is exempt from disclosure under
11    Section 50 of the Sexual Assault Evidence Submission Act.
12        (vv) Information that is exempt from disclosure under
13    subsections (f) and (j) of Section 5-36 of the Illinois
14    Public Aid Code.
15        (ww) Information that is exempt from disclosure under
16    Section 16.8 of the State Treasurer Act.
17        (xx) Information that is exempt from disclosure or
18    information that shall not be made public under the
19    Illinois Insurance Code.
20        (yy) Information prohibited from being disclosed under
21    the Illinois Educational Labor Relations Act.
22        (zz) Information prohibited from being disclosed under
23    the Illinois Public Labor Relations Act.
24        (aaa) Information prohibited from being disclosed
25    under Section 1-167 of the Illinois Pension Code.
26        (bbb) Information that is prohibited from disclosure

 

 

HB5759- 37 -LRB103 36173 HLH 66265 b

1    by the Illinois Police Training Act and the Illinois State
2    Police Act.
3        (ccc) Records exempt from disclosure under Section
4    2605-304 of the Illinois State Police Law of the Civil
5    Administrative Code of Illinois.
6        (ddd) Information prohibited from being disclosed
7    under Section 35 of the Address Confidentiality for
8    Victims of Domestic Violence, Sexual Assault, Human
9    Trafficking, or Stalking Act.
10        (eee) Information prohibited from being disclosed
11    under subsection (b) of Section 75 of the Domestic
12    Violence Fatality Review Act.
13        (fff) Images from cameras under the Expressway Camera
14    Act. This subsection (fff) is inoperative on and after
15    July 1, 2025.
16        (ggg) Information prohibited from disclosure under
17    paragraph (3) of subsection (a) of Section 14 of the Nurse
18    Agency Licensing Act.
19        (hhh) Information submitted to the Illinois State
20    Police in an affidavit or application for an assault
21    weapon endorsement, assault weapon attachment endorsement,
22    .50 caliber rifle endorsement, or .50 caliber cartridge
23    endorsement under the Firearm Owners Identification Card
24    Act.
25        (iii) Data exempt from disclosure under Section 50 of
26    the School Safety Drill Act.

 

 

HB5759- 38 -LRB103 36173 HLH 66265 b

1        (jjj) (hhh) Information exempt from disclosure under
2    Section 30 of the Insurance Data Security Law.
3        (kkk) (iii) Confidential business information
4    prohibited from disclosure under Section 45 of the Paint
5    Stewardship Act.
6        (lll) (iii) Data exempt from disclosure under Section
7    2-3.196 of the School Code.
8        (mmm) (iii) Information prohibited from being
9    disclosed under subsection (e) of Section 1-129 of the
10    Illinois Power Agency Act.
11        (nnn) Materials received by the Department of Commerce
12    and Economic Opportunity that are confidential under
13    Section 5-50 of the Music and Musicians Tax Credit and
14    Jobs Act.
15(Source: P.A. 102-36, eff. 6-25-21; 102-237, eff. 1-1-22;
16102-292, eff. 1-1-22; 102-520, eff. 8-20-21; 102-559, eff.
178-20-21; 102-813, eff. 5-13-22; 102-946, eff. 7-1-22;
18102-1042, eff. 6-3-22; 102-1116, eff. 1-10-23; 103-8, eff.
196-7-23; 103-34, eff. 6-9-23; 103-142, eff. 1-1-24; 103-372,
20eff. 1-1-24; 103-472, eff. 8-1-24; 103-508, eff. 8-4-23;
21103-580, eff. 12-8-23; revised 1-2-24.)
 
22    Section 15-5. The Illinois Income Tax Act is amended by
23changing Sections 203 and 222 and by adding Sections 241 and
24242 as follows:
 

 

 

HB5759- 39 -LRB103 36173 HLH 66265 b

1    (35 ILCS 5/203)
2    Sec. 203. Base income defined.
3    (a) Individuals.
4        (1) In general. In the case of an individual, base
5    income means an amount equal to the taxpayer's adjusted
6    gross income for the taxable year as modified by paragraph
7    (2).
8        (2) Modifications. The adjusted gross income referred
9    to in paragraph (1) shall be modified by adding thereto
10    the sum of the following amounts:
11            (A) An amount equal to all amounts paid or accrued
12        to the taxpayer as interest or dividends during the
13        taxable year to the extent excluded from gross income
14        in the computation of adjusted gross income, except
15        stock dividends of qualified public utilities
16        described in Section 305(e) of the Internal Revenue
17        Code;
18            (B) An amount equal to the amount of tax imposed by
19        this Act to the extent deducted from gross income in
20        the computation of adjusted gross income for the
21        taxable year;
22            (C) An amount equal to the amount received during
23        the taxable year as a recovery or refund of real
24        property taxes paid with respect to the taxpayer's
25        principal residence under the Revenue Act of 1939 and
26        for which a deduction was previously taken under

 

 

HB5759- 40 -LRB103 36173 HLH 66265 b

1        subparagraph (L) of this paragraph (2) prior to July
2        1, 1991, the retrospective application date of Article
3        4 of Public Act 87-17. In the case of multi-unit or
4        multi-use structures and farm dwellings, the taxes on
5        the taxpayer's principal residence shall be that
6        portion of the total taxes for the entire property
7        which is attributable to such principal residence;
8            (D) An amount equal to the amount of the capital
9        gain deduction allowable under the Internal Revenue
10        Code, to the extent deducted from gross income in the
11        computation of adjusted gross income;
12            (D-5) An amount, to the extent not included in
13        adjusted gross income, equal to the amount of money
14        withdrawn by the taxpayer in the taxable year from a
15        medical care savings account and the interest earned
16        on the account in the taxable year of a withdrawal
17        pursuant to subsection (b) of Section 20 of the
18        Medical Care Savings Account Act or subsection (b) of
19        Section 20 of the Medical Care Savings Account Act of
20        2000;
21            (D-10) For taxable years ending after December 31,
22        1997, an amount equal to any eligible remediation
23        costs that the individual deducted in computing
24        adjusted gross income and for which the individual
25        claims a credit under subsection (l) of Section 201;
26            (D-15) For taxable years 2001 and thereafter, an

 

 

HB5759- 41 -LRB103 36173 HLH 66265 b

1        amount equal to the bonus depreciation deduction taken
2        on the taxpayer's federal income tax return for the
3        taxable year under subsection (k) of Section 168 of
4        the Internal Revenue Code;
5            (D-16) If the taxpayer sells, transfers, abandons,
6        or otherwise disposes of property for which the
7        taxpayer was required in any taxable year to make an
8        addition modification under subparagraph (D-15), then
9        an amount equal to the aggregate amount of the
10        deductions taken in all taxable years under
11        subparagraph (Z) with respect to that property.
12            If the taxpayer continues to own property through
13        the last day of the last tax year for which a
14        subtraction is allowed with respect to that property
15        under subparagraph (Z) and for which the taxpayer was
16        allowed in any taxable year to make a subtraction
17        modification under subparagraph (Z), then an amount
18        equal to that subtraction modification.
19            The taxpayer is required to make the addition
20        modification under this subparagraph only once with
21        respect to any one piece of property;
22            (D-17) An amount equal to the amount otherwise
23        allowed as a deduction in computing base income for
24        interest paid, accrued, or incurred, directly or
25        indirectly, (i) for taxable years ending on or after
26        December 31, 2004, to a foreign person who would be a

 

 

HB5759- 42 -LRB103 36173 HLH 66265 b

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

 

 

HB5759- 43 -LRB103 36173 HLH 66265 b

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

 

 

HB5759- 44 -LRB103 36173 HLH 66265 b

1            incurred, directly or indirectly, to a person if
2            the taxpayer establishes by clear and convincing
3            evidence that the adjustments are unreasonable; or
4            if the taxpayer and the Director agree in writing
5            to the application or use of an alternative method
6            of apportionment under Section 304(f).
7                Nothing in this subsection shall preclude the
8            Director from making any other adjustment
9            otherwise allowed under Section 404 of this Act
10            for any tax year beginning after the effective
11            date of this amendment provided such adjustment is
12            made pursuant to regulation adopted by the
13            Department and such regulations provide methods
14            and standards by which the Department will utilize
15            its authority under Section 404 of this Act;
16            (D-18) An amount equal to the amount of intangible
17        expenses and costs otherwise allowed as a deduction in
18        computing base income, and that were paid, accrued, or
19        incurred, directly or indirectly, (i) for taxable
20        years ending on or after December 31, 2004, to a
21        foreign person who would be a member of the same
22        unitary business group but for the fact that the
23        foreign person's business activity outside the United
24        States is 80% or more of that person's total business
25        activity and (ii) for taxable years ending on or after
26        December 31, 2008, to a person who would be a member of

 

 

HB5759- 45 -LRB103 36173 HLH 66265 b

1        the same unitary business group but for the fact that
2        the person is prohibited under Section 1501(a)(27)
3        from being included in the unitary business group
4        because he or she is ordinarily required to apportion
5        business income under different subsections of Section
6        304. The addition modification required by this
7        subparagraph shall be reduced to the extent that
8        dividends were included in base income of the unitary
9        group for the same taxable year and received by the
10        taxpayer or by a member of the taxpayer's unitary
11        business group (including amounts included in gross
12        income under Sections 951 through 964 of the Internal
13        Revenue Code and amounts included in gross income
14        under Section 78 of the Internal Revenue Code) with
15        respect to the stock of the same person to whom the
16        intangible expenses and costs were directly or
17        indirectly paid, incurred, or accrued. The preceding
18        sentence does not apply to the extent that the same
19        dividends caused a reduction to the addition
20        modification required under Section 203(a)(2)(D-17) of
21        this Act. As used in this subparagraph, the term
22        "intangible expenses and costs" includes (1) expenses,
23        losses, and costs for, or related to, the direct or
24        indirect acquisition, use, maintenance or management,
25        ownership, sale, exchange, or any other disposition of
26        intangible property; (2) losses incurred, directly or

 

 

HB5759- 46 -LRB103 36173 HLH 66265 b

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

 

 

HB5759- 47 -LRB103 36173 HLH 66265 b

1                intangible expense or cost between the
2                taxpayer and the person did not have as a
3                principal purpose the avoidance of Illinois
4                income tax, and is paid pursuant to a contract
5                or agreement that reflects arm's-length terms;
6                or
7                (iii) any item of intangible expense or cost
8            paid, accrued, or incurred, directly or
9            indirectly, from a transaction with a person if
10            the taxpayer establishes by clear and convincing
11            evidence, that the adjustments are unreasonable;
12            or if the taxpayer and the Director agree in
13            writing to the application or use of an
14            alternative method of apportionment under Section
15            304(f);
16                Nothing in this subsection shall preclude the
17            Director from making any other adjustment
18            otherwise allowed under Section 404 of this Act
19            for any tax year beginning after the effective
20            date of this amendment provided such adjustment is
21            made pursuant to regulation adopted by the
22            Department and such regulations provide methods
23            and standards by which the Department will utilize
24            its authority under Section 404 of this Act;
25            (D-19) For taxable years ending on or after
26        December 31, 2008, an amount equal to the amount of

 

 

HB5759- 48 -LRB103 36173 HLH 66265 b

1        insurance premium expenses and costs otherwise allowed
2        as a deduction in computing base income, and that were
3        paid, accrued, or incurred, directly or indirectly, to
4        a person who would be a member of the same unitary
5        business group but for the fact that the person is
6        prohibited under Section 1501(a)(27) from being
7        included in the unitary business group because he or
8        she is ordinarily required to apportion business
9        income under different subsections of Section 304. The
10        addition modification required by this subparagraph
11        shall be reduced to the extent that dividends were
12        included in base income of the unitary group for the
13        same taxable year and received by the taxpayer or by a
14        member of the taxpayer's unitary business group
15        (including amounts included in gross income under
16        Sections 951 through 964 of the Internal Revenue Code
17        and amounts included in gross income under Section 78
18        of the Internal Revenue Code) with respect to the
19        stock of the same person to whom the premiums and costs
20        were directly or indirectly paid, incurred, or
21        accrued. The preceding sentence does not apply to the
22        extent that the same dividends caused a reduction to
23        the addition modification required under Section
24        203(a)(2)(D-17) or Section 203(a)(2)(D-18) of this
25        Act;
26            (D-20) For taxable years beginning on or after

 

 

HB5759- 49 -LRB103 36173 HLH 66265 b

1        January 1, 2002 and ending on or before December 31,
2        2006, in the case of a distribution from a qualified
3        tuition program under Section 529 of the Internal
4        Revenue Code, other than (i) a distribution from a
5        College Savings Pool created under Section 16.5 of the
6        State Treasurer Act or (ii) a distribution from the
7        Illinois Prepaid Tuition Trust Fund, an amount equal
8        to the amount excluded from gross income under Section
9        529(c)(3)(B). For taxable years beginning on or after
10        January 1, 2007, in the case of a distribution from a
11        qualified tuition program under Section 529 of the
12        Internal Revenue Code, other than (i) a distribution
13        from a College Savings Pool created under Section 16.5
14        of the State Treasurer Act, (ii) a distribution from
15        the Illinois Prepaid Tuition Trust Fund, or (iii) a
16        distribution from a qualified tuition program under
17        Section 529 of the Internal Revenue Code that (I)
18        adopts and determines that its offering materials
19        comply with the College Savings Plans Network's
20        disclosure principles and (II) has made reasonable
21        efforts to inform in-state residents of the existence
22        of in-state qualified tuition programs by informing
23        Illinois residents directly and, where applicable, to
24        inform financial intermediaries distributing the
25        program to inform in-state residents of the existence
26        of in-state qualified tuition programs at least

 

 

HB5759- 50 -LRB103 36173 HLH 66265 b

1        annually, an amount equal to the amount excluded from
2        gross income under Section 529(c)(3)(B).
3            For the purposes of this subparagraph (D-20), a
4        qualified tuition program has made reasonable efforts
5        if it makes disclosures (which may use the term
6        "in-state program" or "in-state plan" and need not
7        specifically refer to Illinois or its qualified
8        programs by name) (i) directly to prospective
9        participants in its offering materials or makes a
10        public disclosure, such as a website posting; and (ii)
11        where applicable, to intermediaries selling the
12        out-of-state program in the same manner that the
13        out-of-state program distributes its offering
14        materials;
15            (D-20.5) For taxable years beginning on or after
16        January 1, 2018, in the case of a distribution from a
17        qualified ABLE program under Section 529A of the
18        Internal Revenue Code, other than a distribution from
19        a qualified ABLE program created under Section 16.6 of
20        the State Treasurer Act, an amount equal to the amount
21        excluded from gross income under Section 529A(c)(1)(B)
22        of the Internal Revenue Code;
23            (D-21) For taxable years beginning on or after
24        January 1, 2007, in the case of transfer of moneys from
25        a qualified tuition program under Section 529 of the
26        Internal Revenue Code that is administered by the

 

 

HB5759- 51 -LRB103 36173 HLH 66265 b

1        State to an out-of-state program, an amount equal to
2        the amount of moneys previously deducted from base
3        income under subsection (a)(2)(Y) of this Section;
4            (D-21.5) For taxable years beginning on or after
5        January 1, 2018, in the case of the transfer of moneys
6        from a qualified tuition program under Section 529 or
7        a qualified ABLE program under Section 529A of the
8        Internal Revenue Code that is administered by this
9        State to an ABLE account established under an
10        out-of-state ABLE account program, an amount equal to
11        the contribution component of the transferred amount
12        that was previously deducted from base income under
13        subsection (a)(2)(Y) or subsection (a)(2)(HH) of this
14        Section;
15            (D-22) For taxable years beginning on or after
16        January 1, 2009, and prior to January 1, 2018, in the
17        case of a nonqualified withdrawal or refund of moneys
18        from a qualified tuition program under Section 529 of
19        the Internal Revenue Code administered by the State
20        that is not used for qualified expenses at an eligible
21        education institution, an amount equal to the
22        contribution component of the nonqualified withdrawal
23        or refund that was previously deducted from base
24        income under subsection (a)(2)(y) of this Section,
25        provided that the withdrawal or refund did not result
26        from the beneficiary's death or disability. For

 

 

HB5759- 52 -LRB103 36173 HLH 66265 b

1        taxable years beginning on or after January 1, 2018:
2        (1) in the case of a nonqualified withdrawal or
3        refund, as defined under Section 16.5 of the State
4        Treasurer Act, of moneys from a qualified tuition
5        program under Section 529 of the Internal Revenue Code
6        administered by the State, an amount equal to the
7        contribution component of the nonqualified withdrawal
8        or refund that was previously deducted from base
9        income under subsection (a)(2)(Y) of this Section, and
10        (2) in the case of a nonqualified withdrawal or refund
11        from a qualified ABLE program under Section 529A of
12        the Internal Revenue Code administered by the State
13        that is not used for qualified disability expenses, an
14        amount equal to the contribution component of the
15        nonqualified withdrawal or refund that was previously
16        deducted from base income under subsection (a)(2)(HH)
17        of this Section;
18            (D-23) An amount equal to the credit allowable to
19        the taxpayer under Section 218(a) of this Act,
20        determined without regard to Section 218(c) of this
21        Act;
22            (D-24) For taxable years ending on or after
23        December 31, 2017, an amount equal to the deduction
24        allowed under Section 199 of the Internal Revenue Code
25        for the taxable year;
26            (D-25) In the case of a resident, an amount equal

 

 

HB5759- 53 -LRB103 36173 HLH 66265 b

1        to the amount of tax for which a credit is allowed
2        pursuant to Section 201(p)(7) of this Act;
3    and by deducting from the total so obtained the sum of the
4    following amounts:
5            (E) For taxable years ending before December 31,
6        2001, any amount included in such total in respect of
7        any compensation (including but not limited to any
8        compensation paid or accrued to a serviceman while a
9        prisoner of war or missing in action) paid to a
10        resident by reason of being on active duty in the Armed
11        Forces of the United States and in respect of any
12        compensation paid or accrued to a resident who as a
13        governmental employee was a prisoner of war or missing
14        in action, and in respect of any compensation paid to a
15        resident in 1971 or thereafter for annual training
16        performed pursuant to Sections 502 and 503, Title 32,
17        United States Code as a member of the Illinois
18        National Guard or, beginning with taxable years ending
19        on or after December 31, 2007, the National Guard of
20        any other state. For taxable years ending on or after
21        December 31, 2001, any amount included in such total
22        in respect of any compensation (including but not
23        limited to any compensation paid or accrued to a
24        serviceman while a prisoner of war or missing in
25        action) paid to a resident by reason of being a member
26        of any component of the Armed Forces of the United

 

 

HB5759- 54 -LRB103 36173 HLH 66265 b

1        States and in respect of any compensation paid or
2        accrued to a resident who as a governmental employee
3        was a prisoner of war or missing in action, and in
4        respect of any compensation paid to a resident in 2001
5        or thereafter by reason of being a member of the
6        Illinois National Guard or, beginning with taxable
7        years ending on or after December 31, 2007, the
8        National Guard of any other state. The provisions of
9        this subparagraph (E) are exempt from the provisions
10        of Section 250;
11            (F) An amount equal to all amounts included in
12        such total pursuant to the provisions of Sections
13        402(a), 402(c), 403(a), 403(b), 406(a), 407(a), and
14        408 of the Internal Revenue Code, or included in such
15        total as distributions under the provisions of any
16        retirement or disability plan for employees of any
17        governmental agency or unit, or retirement payments to
18        retired partners, which payments are excluded in
19        computing net earnings from self employment by Section
20        1402 of the Internal Revenue Code and regulations
21        adopted pursuant thereto;
22            (G) The valuation limitation amount;
23            (H) An amount equal to the amount of any tax
24        imposed by this Act which was refunded to the taxpayer
25        and included in such total for the taxable year;
26            (I) An amount equal to all amounts included in

 

 

HB5759- 55 -LRB103 36173 HLH 66265 b

1        such total pursuant to the provisions of Section 111
2        of the Internal Revenue Code as a recovery of items
3        previously deducted from adjusted gross income in the
4        computation of taxable income;
5            (J) An amount equal to those dividends included in
6        such total which were paid by a corporation which
7        conducts business operations in a River Edge
8        Redevelopment Zone or zones created under the River
9        Edge Redevelopment Zone Act, and conducts
10        substantially all of its operations in a River Edge
11        Redevelopment Zone or zones. This subparagraph (J) is
12        exempt from the provisions of Section 250;
13            (K) An amount equal to those dividends included in
14        such total that were paid by a corporation that
15        conducts business operations in a federally designated
16        Foreign Trade Zone or Sub-Zone and that is designated
17        a High Impact Business located in Illinois; provided
18        that dividends eligible for the deduction provided in
19        subparagraph (J) of paragraph (2) of this subsection
20        shall not be eligible for the deduction provided under
21        this subparagraph (K);
22            (L) For taxable years ending after December 31,
23        1983, an amount equal to all social security benefits
24        and railroad retirement benefits included in such
25        total pursuant to Sections 72(r) and 86 of the
26        Internal Revenue Code;

 

 

HB5759- 56 -LRB103 36173 HLH 66265 b

1            (M) With the exception of any amounts subtracted
2        under subparagraph (N), an amount equal to the sum of
3        all amounts disallowed as deductions by (i) Sections
4        171(a)(2) and 265(a)(2) of the Internal Revenue Code,
5        and all amounts of expenses allocable to interest and
6        disallowed as deductions by Section 265(a)(1) of the
7        Internal Revenue Code; and (ii) for taxable years
8        ending on or after August 13, 1999, Sections
9        171(a)(2), 265, 280C, and 832(b)(5)(B)(i) of the
10        Internal Revenue Code, plus, for taxable years ending
11        on or after December 31, 2011, Section 45G(e)(3) of
12        the Internal Revenue Code and, for taxable years
13        ending on or after December 31, 2008, any amount
14        included in gross income under Section 87 of the
15        Internal Revenue Code; the provisions of this
16        subparagraph are exempt from the provisions of Section
17        250;
18            (N) An amount equal to all amounts included in
19        such total which are exempt from taxation by this
20        State either by reason of its statutes or Constitution
21        or by reason of the Constitution, treaties or statutes
22        of the United States; provided that, in the case of any
23        statute of this State that exempts income derived from
24        bonds or other obligations from the tax imposed under
25        this Act, the amount exempted shall be the interest
26        net of bond premium amortization;

 

 

HB5759- 57 -LRB103 36173 HLH 66265 b

1            (O) An amount equal to any contribution made to a
2        job training project established pursuant to the Tax
3        Increment Allocation Redevelopment Act;
4            (P) An amount equal to the amount of the deduction
5        used to compute the federal income tax credit for
6        restoration of substantial amounts held under claim of
7        right for the taxable year pursuant to Section 1341 of
8        the Internal Revenue Code or of any itemized deduction
9        taken from adjusted gross income in the computation of
10        taxable income for restoration of substantial amounts
11        held under claim of right for the taxable year;
12            (Q) An amount equal to any amounts included in
13        such total, received by the taxpayer as an
14        acceleration in the payment of life, endowment or
15        annuity benefits in advance of the time they would
16        otherwise be payable as an indemnity for a terminal
17        illness;
18            (R) An amount equal to the amount of any federal or
19        State bonus paid to veterans of the Persian Gulf War;
20            (S) An amount, to the extent included in adjusted
21        gross income, equal to the amount of a contribution
22        made in the taxable year on behalf of the taxpayer to a
23        medical care savings account established under the
24        Medical Care Savings Account Act or the Medical Care
25        Savings Account Act of 2000 to the extent the
26        contribution is accepted by the account administrator

 

 

HB5759- 58 -LRB103 36173 HLH 66265 b

1        as provided in that Act;
2            (T) An amount, to the extent included in adjusted
3        gross income, equal to the amount of interest earned
4        in the taxable year on a medical care savings account
5        established under the Medical Care Savings Account Act
6        or the Medical Care Savings Account Act of 2000 on
7        behalf of the taxpayer, other than interest added
8        pursuant to item (D-5) of this paragraph (2);
9            (U) For one taxable year beginning on or after
10        January 1, 1994, an amount equal to the total amount of
11        tax imposed and paid under subsections (a) and (b) of
12        Section 201 of this Act on grant amounts received by
13        the taxpayer under the Nursing Home Grant Assistance
14        Act during the taxpayer's taxable years 1992 and 1993;
15            (V) Beginning with tax years ending on or after
16        December 31, 1995 and ending with tax years ending on
17        or before December 31, 2004, an amount equal to the
18        amount paid by a taxpayer who is a self-employed
19        taxpayer, a partner of a partnership, or a shareholder
20        in a Subchapter S corporation for health insurance or
21        long-term care insurance for that taxpayer or that
22        taxpayer's spouse or dependents, to the extent that
23        the amount paid for that health insurance or long-term
24        care insurance may be deducted under Section 213 of
25        the Internal Revenue Code, has not been deducted on
26        the federal income tax return of the taxpayer, and

 

 

HB5759- 59 -LRB103 36173 HLH 66265 b

1        does not exceed the taxable income attributable to
2        that taxpayer's income, self-employment income, or
3        Subchapter S corporation income; except that no
4        deduction shall be allowed under this item (V) if the
5        taxpayer is eligible to participate in any health
6        insurance or long-term care insurance plan of an
7        employer of the taxpayer or the taxpayer's spouse. The
8        amount of the health insurance and long-term care
9        insurance subtracted under this item (V) shall be
10        determined by multiplying total health insurance and
11        long-term care insurance premiums paid by the taxpayer
12        times a number that represents the fractional
13        percentage of eligible medical expenses under Section
14        213 of the Internal Revenue Code of 1986 not actually
15        deducted on the taxpayer's federal income tax return;
16            (W) For taxable years beginning on or after
17        January 1, 1998, all amounts included in the
18        taxpayer's federal gross income in the taxable year
19        from amounts converted from a regular IRA to a Roth
20        IRA. This paragraph is exempt from the provisions of
21        Section 250;
22            (X) For taxable year 1999 and thereafter, an
23        amount equal to the amount of any (i) distributions,
24        to the extent includible in gross income for federal
25        income tax purposes, made to the taxpayer because of
26        his or her status as a victim of persecution for racial

 

 

HB5759- 60 -LRB103 36173 HLH 66265 b

1        or religious reasons by Nazi Germany or any other Axis
2        regime or as an heir of the victim and (ii) items of
3        income, to the extent includible in gross income for
4        federal income tax purposes, attributable to, derived
5        from or in any way related to assets stolen from,
6        hidden from, or otherwise lost to a victim of
7        persecution for racial or religious reasons by Nazi
8        Germany or any other Axis regime immediately prior to,
9        during, and immediately after World War II, including,
10        but not limited to, interest on the proceeds
11        receivable as insurance under policies issued to a
12        victim of persecution for racial or religious reasons
13        by Nazi Germany or any other Axis regime by European
14        insurance companies immediately prior to and during
15        World War II; provided, however, this subtraction from
16        federal adjusted gross income does not apply to assets
17        acquired with such assets or with the proceeds from
18        the sale of such assets; provided, further, this
19        paragraph shall only apply to a taxpayer who was the
20        first recipient of such assets after their recovery
21        and who is a victim of persecution for racial or
22        religious reasons by Nazi Germany or any other Axis
23        regime or as an heir of the victim. The amount of and
24        the eligibility for any public assistance, benefit, or
25        similar entitlement is not affected by the inclusion
26        of items (i) and (ii) of this paragraph in gross income

 

 

HB5759- 61 -LRB103 36173 HLH 66265 b

1        for federal income tax purposes. This paragraph is
2        exempt from the provisions of Section 250;
3            (Y) For taxable years beginning on or after
4        January 1, 2002 and ending on or before December 31,
5        2004, moneys contributed in the taxable year to a
6        College Savings Pool account under Section 16.5 of the
7        State Treasurer Act, except that amounts excluded from
8        gross income under Section 529(c)(3)(C)(i) of the
9        Internal Revenue Code shall not be considered moneys
10        contributed under this subparagraph (Y). For taxable
11        years beginning on or after January 1, 2005, a maximum
12        of $10,000 contributed in the taxable year to (i) a
13        College Savings Pool account under Section 16.5 of the
14        State Treasurer Act or (ii) the Illinois Prepaid
15        Tuition Trust Fund, 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 purposes
19        of this subparagraph, contributions made by an
20        employer on behalf of an employee, or matching
21        contributions made by an employee, shall be treated as
22        made by the employee. This subparagraph (Y) is exempt
23        from the provisions of Section 250;
24            (Z) For taxable years 2001 and thereafter, for the
25        taxable year in which the bonus depreciation deduction
26        is taken on the taxpayer's federal income tax return

 

 

HB5759- 62 -LRB103 36173 HLH 66265 b

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

 

 

HB5759- 63 -LRB103 36173 HLH 66265 b

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

 

 

HB5759- 64 -LRB103 36173 HLH 66265 b

1            (AA) If the taxpayer sells, transfers, abandons,
2        or otherwise disposes of property for which the
3        taxpayer was required in any taxable year to make an
4        addition modification under subparagraph (D-15), then
5        an amount equal to that addition modification.
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 (Z) and for which the taxpayer was
10        required in any taxable year to make an addition
11        modification under subparagraph (D-15), then an amount
12        equal to that addition modification.
13            The taxpayer is allowed to take the deduction
14        under this subparagraph only once with respect to any
15        one piece of property.
16            This subparagraph (AA) is exempt from the
17        provisions of Section 250;
18            (BB) Any amount included in adjusted gross income,
19        other than salary, received by a driver in a
20        ridesharing arrangement using a motor vehicle;
21            (CC) The amount of (i) any interest income (net of
22        the deductions allocable thereto) taken into account
23        for the taxable year with respect to a transaction
24        with a taxpayer that is required to make an addition
25        modification with respect to such transaction under
26        Section 203(a)(2)(D-17), 203(b)(2)(E-12),

 

 

HB5759- 65 -LRB103 36173 HLH 66265 b

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

 

 

HB5759- 66 -LRB103 36173 HLH 66265 b

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

 

 

HB5759- 67 -LRB103 36173 HLH 66265 b

1        exempt from the provisions of Section 250;
2            (FF) An amount equal to any amount awarded to the
3        taxpayer during the taxable year by the Court of
4        Claims under subsection (c) of Section 8 of the Court
5        of Claims Act for time unjustly served in a State
6        prison. This subparagraph (FF) is exempt from the
7        provisions of Section 250;
8            (GG) 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(a)(2)(D-19), 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        (GG), 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 (GG). This
22        subparagraph (GG) is exempt from the provisions of
23        Section 250;
24            (HH) For taxable years beginning on or after
25        January 1, 2018 and prior to January 1, 2028, a maximum
26        of $10,000 contributed in the taxable year to a

 

 

HB5759- 68 -LRB103 36173 HLH 66265 b

1        qualified ABLE account under Section 16.6 of the State
2        Treasurer Act, except that amounts excluded from gross
3        income under Section 529(c)(3)(C)(i) or Section
4        529A(c)(1)(C) of the Internal Revenue Code shall not
5        be considered moneys contributed under this
6        subparagraph (HH). For purposes of this subparagraph
7        (HH), contributions made by an employer on behalf of
8        an employee, or matching contributions made by an
9        employee, shall be treated as made by the employee;
10            (II) For taxable years that begin on or after
11        January 1, 2021 and begin before January 1, 2026, the
12        amount that is included in the taxpayer's federal
13        adjusted gross income pursuant to Section 61 of the
14        Internal Revenue Code as discharge of indebtedness
15        attributable to student loan forgiveness and that is
16        not excluded from the taxpayer's federal adjusted
17        gross income pursuant to paragraph (5) of subsection
18        (f) of Section 108 of the Internal Revenue Code; and
19            (JJ) For taxable years beginning on or after
20        January 1, 2023, for any cannabis establishment
21        operating in this State and licensed under the
22        Cannabis Regulation and Tax Act or any cannabis
23        cultivation center or medical cannabis dispensing
24        organization operating in this State and licensed
25        under the Compassionate Use of Medical Cannabis
26        Program Act, an amount equal to the deductions that

 

 

HB5759- 69 -LRB103 36173 HLH 66265 b

1        were disallowed under Section 280E of the Internal
2        Revenue Code for the taxable year and that would not be
3        added back under this subsection. The provisions of
4        this subparagraph (JJ) are exempt from the provisions
5        of Section 250; .
6            (KK) (JJ) To the extent includible in gross income
7        for federal income tax purposes, any amount awarded or
8        paid to the taxpayer as a result of a judgment or
9        settlement for fertility fraud as provided in Section
10        15 of the Illinois Fertility Fraud Act, donor
11        fertility fraud as provided in Section 20 of the
12        Illinois Fertility Fraud Act, or similar action in
13        another state; and .
14            (LL) For taxable years beginning on or after
15        January 1, 2024, an amount equal to the qualified
16        expenses paid or incurred by a qualified artist
17        educator in connection with teaching or conducting
18        music lessons; this subparagraph (LL) is exempt from
19        the provisions of Section 250. As used in this
20        subparagraph (LL):
21                "Qualified expenses" means deductions allowed
22            by Section 162 of the federal Internal Revenue
23            Code; and
24                "Qualified artist educator" means a musician
25            who offers private or public music lessons for
26            amateur or professional artists in any setting or

 

 

HB5759- 70 -LRB103 36173 HLH 66265 b

1            any capacity, regardless of the size of the class.
 
2    (b) Corporations.
3        (1) In general. In the case of a corporation, base
4    income means an amount equal to the taxpayer's taxable
5    income for the taxable year as modified by paragraph (2).
6        (2) Modifications. The taxable income referred to in
7    paragraph (1) shall be modified by adding thereto the sum
8    of the following amounts:
9            (A) An amount equal to all amounts paid or accrued
10        to the taxpayer as interest and all distributions
11        received from regulated investment companies during
12        the taxable year to the extent excluded from gross
13        income in the computation of taxable income;
14            (B) An amount equal to the amount of tax imposed by
15        this Act to the extent deducted from gross income in
16        the computation of taxable income for the taxable
17        year;
18            (C) In the case of a regulated investment company,
19        an amount equal to the excess of (i) the net long-term
20        capital gain for the taxable year, over (ii) the
21        amount of the capital gain dividends designated as
22        such in accordance with Section 852(b)(3)(C) of the
23        Internal Revenue Code and any amount designated under
24        Section 852(b)(3)(D) of the Internal Revenue Code,
25        attributable to the taxable year (this amendatory Act

 

 

HB5759- 71 -LRB103 36173 HLH 66265 b

1        of 1995 (Public Act 89-89) is declarative of existing
2        law and is not a new enactment);
3            (D) The amount of any net operating loss deduction
4        taken in arriving at taxable income, other than a net
5        operating loss carried forward from a taxable year
6        ending prior to December 31, 1986;
7            (E) For taxable years in which a net operating
8        loss carryback or carryforward from a taxable year
9        ending prior to December 31, 1986 is an element of
10        taxable income under paragraph (1) of subsection (e)
11        or subparagraph (E) of paragraph (2) of subsection
12        (e), the amount by which addition modifications other
13        than those provided by this subparagraph (E) exceeded
14        subtraction modifications in such earlier taxable
15        year, with the following limitations applied in the
16        order that they are listed:
17                (i) the addition modification relating to the
18            net operating loss carried back or forward to the
19            taxable year from any taxable year ending prior to
20            December 31, 1986 shall be reduced by the amount
21            of addition modification under this subparagraph
22            (E) which related to that net operating loss and
23            which was taken into account in calculating the
24            base income of an earlier taxable year, and
25                (ii) the addition modification relating to the
26            net operating loss carried back or forward to the

 

 

HB5759- 72 -LRB103 36173 HLH 66265 b

1            taxable year from any taxable year ending prior to
2            December 31, 1986 shall not exceed the amount of
3            such carryback or carryforward;
4            For taxable years in which there is a net
5        operating loss carryback or carryforward from more
6        than one other taxable year ending prior to December
7        31, 1986, the addition modification provided in this
8        subparagraph (E) shall be the sum of the amounts
9        computed independently under the preceding provisions
10        of this subparagraph (E) for each such taxable year;
11            (E-5) For taxable years ending after December 31,
12        1997, an amount equal to any eligible remediation
13        costs that the corporation deducted in computing
14        adjusted gross income and for which the corporation
15        claims a credit under subsection (l) of Section 201;
16            (E-10) For taxable years 2001 and thereafter, an
17        amount equal to the bonus depreciation deduction taken
18        on the taxpayer's federal income tax return for the
19        taxable year under subsection (k) of Section 168 of
20        the Internal Revenue Code;
21            (E-11) If the taxpayer sells, transfers, abandons,
22        or otherwise disposes of property for which the
23        taxpayer was required in any taxable year to make an
24        addition modification under subparagraph (E-10), then
25        an amount equal to the aggregate amount of the
26        deductions taken in all taxable years under

 

 

HB5759- 73 -LRB103 36173 HLH 66265 b

1        subparagraph (T) with respect to that property.
2            If the taxpayer continues to own property through
3        the last day of the last tax year for which a
4        subtraction is allowed with respect to that property
5        under subparagraph (T) and for which the taxpayer was
6        allowed in any taxable year to make a subtraction
7        modification under subparagraph (T), then an amount
8        equal to that subtraction modification.
9            The taxpayer is required to make the addition
10        modification under this subparagraph only once with
11        respect to any one piece of property;
12            (E-12) An amount equal to the amount otherwise
13        allowed as a deduction in computing base income for
14        interest paid, accrued, or incurred, directly or
15        indirectly, (i) for taxable years ending on or after
16        December 31, 2004, to a foreign person who would be a
17        member of the same unitary business group but for the
18        fact the foreign person's business activity outside
19        the United States is 80% or more of the foreign
20        person's total business activity and (ii) for taxable
21        years ending on or after December 31, 2008, to a person
22        who would be a member of the same unitary business
23        group but for the fact that the person is prohibited
24        under Section 1501(a)(27) from being included in the
25        unitary business group because he or she is ordinarily
26        required to apportion business income under different

 

 

HB5759- 74 -LRB103 36173 HLH 66265 b

1        subsections of Section 304. The addition modification
2        required by this subparagraph shall be reduced to the
3        extent that dividends were included in base income of
4        the unitary group for the same taxable year and
5        received by the taxpayer or by a member of the
6        taxpayer's unitary business group (including amounts
7        included in gross income pursuant to Sections 951
8        through 964 of the Internal Revenue Code and amounts
9        included in gross income under Section 78 of the
10        Internal Revenue Code) with respect to the stock of
11        the same person to whom the interest was paid,
12        accrued, or incurred.
13            This paragraph shall not apply to the following:
14                (i) an item of interest paid, accrued, or
15            incurred, directly or indirectly, to 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 interest; or
20                (ii) an item of interest paid, accrued, or
21            incurred, directly or indirectly, to a person if
22            the taxpayer can establish, based on a
23            preponderance of the evidence, both of the
24            following:
25                    (a) the person, during the same taxable
26                year, paid, accrued, or incurred, the interest

 

 

HB5759- 75 -LRB103 36173 HLH 66265 b

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

 

 

HB5759- 76 -LRB103 36173 HLH 66265 b

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

 

 

HB5759- 77 -LRB103 36173 HLH 66265 b

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

 

 

HB5759- 78 -LRB103 36173 HLH 66265 b

1            paid, accrued, or incurred, directly or
2            indirectly, from a transaction with 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 item; or
7                (ii) any item of intangible expense or cost
8            paid, accrued, or incurred, directly or
9            indirectly, if the taxpayer can establish, based
10            on a preponderance of the evidence, both of the
11            following:
12                    (a) the person during the same taxable
13                year paid, accrued, or incurred, the
14                intangible expense or cost to a person that is
15                not a related member, and
16                    (b) the transaction giving rise to the
17                intangible expense or cost between the
18                taxpayer and the person did not have as a
19                principal purpose the avoidance of Illinois
20                income tax, and is paid pursuant to a contract
21                or agreement that reflects arm's-length terms;
22                or
23                (iii) any item of intangible expense or cost
24            paid, accrued, or incurred, directly or
25            indirectly, from a transaction with a person if
26            the taxpayer establishes by clear and convincing

 

 

HB5759- 79 -LRB103 36173 HLH 66265 b

1            evidence, that the adjustments are unreasonable;
2            or if the taxpayer and the Director agree in
3            writing to the application or use of an
4            alternative method of apportionment under Section
5            304(f);
6                Nothing in this subsection shall preclude the
7            Director from making any other adjustment
8            otherwise allowed under Section 404 of this Act
9            for any tax year beginning after the effective
10            date of this amendment provided such adjustment is
11            made pursuant to regulation adopted by the
12            Department and such regulations provide methods
13            and standards by which the Department will utilize
14            its authority under Section 404 of this Act;
15            (E-14) For taxable years ending on or after
16        December 31, 2008, an amount equal to the amount of
17        insurance premium expenses and costs otherwise allowed
18        as a deduction in computing base income, and that were
19        paid, accrued, or incurred, directly or indirectly, 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. The
26        addition modification required by this subparagraph

 

 

HB5759- 80 -LRB103 36173 HLH 66265 b

1        shall be reduced to the extent that dividends were
2        included in base income of the unitary group for the
3        same taxable year and received by the taxpayer or by a
4        member of the taxpayer's unitary business group
5        (including amounts included in gross income under
6        Sections 951 through 964 of the Internal Revenue Code
7        and amounts included in gross income under Section 78
8        of the Internal Revenue Code) with respect to the
9        stock of the same person to whom the premiums and costs
10        were directly or indirectly paid, incurred, or
11        accrued. The preceding sentence does not apply to the
12        extent that the same dividends caused a reduction to
13        the addition modification required under Section
14        203(b)(2)(E-12) or Section 203(b)(2)(E-13) of this
15        Act;
16            (E-15) For taxable years beginning after December
17        31, 2008, any deduction for dividends paid by a
18        captive real estate investment trust that is allowed
19        to a real estate investment trust under Section
20        857(b)(2)(B) of the Internal Revenue Code for
21        dividends paid;
22            (E-16) An amount equal to the credit allowable to
23        the taxpayer under Section 218(a) of this Act,
24        determined without regard to Section 218(c) of this
25        Act;
26            (E-17) For taxable years ending on or after

 

 

HB5759- 81 -LRB103 36173 HLH 66265 b

1        December 31, 2017, an amount equal to the deduction
2        allowed under Section 199 of the Internal Revenue Code
3        for the taxable year;
4            (E-18) for taxable years beginning after December
5        31, 2018, an amount equal to the deduction allowed
6        under Section 250(a)(1)(A) of the Internal Revenue
7        Code for the taxable year;
8            (E-19) for taxable years ending on or after June
9        30, 2021, an amount equal to the deduction allowed
10        under Section 250(a)(1)(B)(i) of the Internal Revenue
11        Code for the taxable year;
12            (E-20) for taxable years ending on or after June
13        30, 2021, an amount equal to the deduction allowed
14        under Sections 243(e) and 245A(a) of the Internal
15        Revenue Code for the taxable year.
16    and by deducting from the total so obtained the sum of the
17    following amounts:
18            (F) An amount equal to the amount of any tax
19        imposed by this Act which was refunded to the taxpayer
20        and included in such total for the taxable year;
21            (G) An amount equal to any amount included in such
22        total under Section 78 of the Internal Revenue Code;
23            (H) In the case of a regulated investment company,
24        an amount equal to the amount of exempt interest
25        dividends as defined in subsection (b)(5) of Section
26        852 of the Internal Revenue Code, paid to shareholders

 

 

HB5759- 82 -LRB103 36173 HLH 66265 b

1        for the taxable year;
2            (I) With the exception of any amounts subtracted
3        under subparagraph (J), an amount equal to the sum of
4        all amounts disallowed as deductions by (i) Sections
5        171(a)(2) and 265(a)(2) and amounts disallowed as
6        interest expense by Section 291(a)(3) of the Internal
7        Revenue Code, and all amounts of expenses allocable to
8        interest and disallowed as deductions by Section
9        265(a)(1) of the Internal Revenue Code; and (ii) for
10        taxable years ending on or after August 13, 1999,
11        Sections 171(a)(2), 265, 280C, 291(a)(3), and
12        832(b)(5)(B)(i) of the Internal Revenue Code, plus,
13        for tax years ending on or after December 31, 2011,
14        amounts disallowed as deductions by Section 45G(e)(3)
15        of the Internal Revenue Code and, for taxable years
16        ending on or after December 31, 2008, any amount
17        included in gross income under Section 87 of the
18        Internal Revenue Code and the policyholders' share of
19        tax-exempt interest of a life insurance company under
20        Section 807(a)(2)(B) of the Internal Revenue Code (in
21        the case of a life insurance company with gross income
22        from a decrease in reserves for the tax year) or
23        Section 807(b)(1)(B) of the Internal Revenue Code (in
24        the case of a life insurance company allowed a
25        deduction for an increase in reserves for the tax
26        year); the provisions of this subparagraph are exempt

 

 

HB5759- 83 -LRB103 36173 HLH 66265 b

1        from the provisions of Section 250;
2            (J) An amount equal to all amounts included in
3        such total which are exempt from taxation by this
4        State either by reason of its statutes or Constitution
5        or by reason of the Constitution, treaties or statutes
6        of the United States; provided that, in the case of any
7        statute of this State that exempts income derived from
8        bonds or other obligations from the tax imposed under
9        this Act, the amount exempted shall be the interest
10        net of bond premium amortization;
11            (K) An amount equal to those dividends included in
12        such total which were paid by a corporation which
13        conducts business operations in a River Edge
14        Redevelopment Zone or zones created under the River
15        Edge Redevelopment Zone Act and conducts substantially
16        all of its operations in a River Edge Redevelopment
17        Zone or zones. This subparagraph (K) is exempt from
18        the provisions of Section 250;
19            (L) An amount equal to those dividends included in
20        such total that were paid by a corporation that
21        conducts business operations in a federally designated
22        Foreign Trade Zone or Sub-Zone and that is designated
23        a High Impact Business located in Illinois; provided
24        that dividends eligible for the deduction provided in
25        subparagraph (K) of paragraph 2 of this subsection
26        shall not be eligible for the deduction provided under

 

 

HB5759- 84 -LRB103 36173 HLH 66265 b

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

 

 

HB5759- 85 -LRB103 36173 HLH 66265 b

1        this Act, an amount included in such total as interest
2        income from a loan or loans made by such taxpayer to a
3        borrower, to the extent that such a loan is secured by
4        property which is eligible for the High Impact
5        Business Investment Credit. To determine the portion
6        of a loan or loans that is secured by property eligible
7        for a Section 201(h) investment credit to the
8        borrower, the entire principal amount of the loan or
9        loans between the taxpayer and the borrower should be
10        divided into the basis of the Section 201(h)
11        investment credit property which secures the loan or
12        loans, using for this purpose the original basis of
13        such property on the date that it was placed in service
14        in a federally designated Foreign Trade Zone or
15        Sub-Zone located in Illinois. No taxpayer that is
16        eligible for the deduction provided in subparagraph
17        (M) of paragraph (2) of this subsection shall be
18        eligible for the deduction provided under this
19        subparagraph (M-1). The subtraction modification
20        available to taxpayers in any year under this
21        subsection shall be that portion of the total interest
22        paid by the borrower with respect to such loan
23        attributable to the eligible property as calculated
24        under the previous sentence;
25            (N) Two times any contribution made during the
26        taxable year to a designated zone organization to the

 

 

HB5759- 86 -LRB103 36173 HLH 66265 b

1        extent that the contribution (i) qualifies as a
2        charitable contribution under subsection (c) of
3        Section 170 of the Internal Revenue Code and (ii)
4        must, by its terms, be used for a project approved by
5        the Department of Commerce and Economic Opportunity
6        under Section 11 of the Illinois Enterprise Zone Act
7        or under Section 10-10 of the River Edge Redevelopment
8        Zone Act. This subparagraph (N) is exempt from the
9        provisions of Section 250;
10            (O) An amount equal to: (i) 85% for taxable years
11        ending on or before December 31, 1992, or, a
12        percentage equal to the percentage allowable under
13        Section 243(a)(1) of the Internal Revenue Code of 1986
14        for taxable years ending after December 31, 1992, of
15        the amount by which dividends included in taxable
16        income and received from a corporation that is not
17        created or organized under the laws of the United
18        States or any state or political subdivision thereof,
19        including, for taxable years ending on or after
20        December 31, 1988, dividends received or deemed
21        received or paid or deemed paid under Sections 951
22        through 965 of the Internal Revenue Code, exceed the
23        amount of the modification provided under subparagraph
24        (G) of paragraph (2) of this subsection (b) which is
25        related to such dividends, and including, for taxable
26        years ending on or after December 31, 2008, dividends

 

 

HB5759- 87 -LRB103 36173 HLH 66265 b

1        received from a captive real estate investment trust;
2        plus (ii) 100% of the amount by which dividends,
3        included in taxable income and received, including,
4        for taxable years ending on or after December 31,
5        1988, dividends received or deemed received or paid or
6        deemed paid under Sections 951 through 964 of the
7        Internal Revenue Code and including, for taxable years
8        ending on or after December 31, 2008, dividends
9        received from a captive real estate investment trust,
10        from any such corporation specified in clause (i) that
11        would but for the provisions of Section 1504(b)(3) of
12        the Internal Revenue Code be treated as a member of the
13        affiliated group which includes the dividend
14        recipient, exceed the amount of the modification
15        provided under subparagraph (G) of paragraph (2) of
16        this subsection (b) which is related to such
17        dividends. For taxable years ending on or after June
18        30, 2021, (i) for purposes of this subparagraph, the
19        term "dividend" does not include any amount treated as
20        a dividend under Section 1248 of the Internal Revenue
21        Code, and (ii) this subparagraph shall not apply to
22        dividends for which a deduction is allowed under
23        Section 245(a) of the Internal Revenue Code. This
24        subparagraph (O) is exempt from the provisions of
25        Section 250 of this Act;
26            (P) An amount equal to any contribution made to a

 

 

HB5759- 88 -LRB103 36173 HLH 66265 b

1        job training project established pursuant to the Tax
2        Increment Allocation Redevelopment Act;
3            (Q) An amount equal to the amount of the deduction
4        used to compute the federal income tax credit for
5        restoration of substantial amounts held under claim of
6        right for the taxable year pursuant to Section 1341 of
7        the Internal Revenue Code;
8            (R) On and after July 20, 1999, in the case of an
9        attorney-in-fact with respect to whom an interinsurer
10        or a reciprocal insurer has made the election under
11        Section 835 of the Internal Revenue Code, 26 U.S.C.
12        835, an amount equal to the excess, if any, of the
13        amounts paid or incurred by that interinsurer or
14        reciprocal insurer in the taxable year to the
15        attorney-in-fact over the deduction allowed to that
16        interinsurer or reciprocal insurer with respect to the
17        attorney-in-fact under Section 835(b) of the Internal
18        Revenue Code for the taxable year; the provisions of
19        this subparagraph are exempt from the provisions of
20        Section 250;
21            (S) For taxable years ending on or after December
22        31, 1997, in the case of a Subchapter S corporation, an
23        amount equal to all amounts of income allocable to a
24        shareholder subject to the Personal Property Tax
25        Replacement Income Tax imposed by subsections (c) and
26        (d) of Section 201 of this Act, including amounts

 

 

HB5759- 89 -LRB103 36173 HLH 66265 b

1        allocable to organizations exempt from federal income
2        tax by reason of Section 501(a) of the Internal
3        Revenue Code. This subparagraph (S) is exempt from the
4        provisions of Section 250;
5            (T) For taxable years 2001 and thereafter, for the
6        taxable year in which the bonus depreciation deduction
7        is taken on the taxpayer's federal income tax return
8        under subsection (k) of Section 168 of the Internal
9        Revenue Code and for each applicable taxable year
10        thereafter, an amount equal to "x", where:
11                (1) "y" equals the amount of the depreciation
12            deduction taken for the taxable year on the
13            taxpayer's federal income tax return on property
14            for which the bonus depreciation deduction was
15            taken in any year under subsection (k) of Section
16            168 of the Internal Revenue Code, but not
17            including the bonus depreciation deduction;
18                (2) for taxable years ending on or before
19            December 31, 2005, "x" equals "y" multiplied by 30
20            and then divided by 70 (or "y" multiplied by
21            0.429); and
22                (3) for taxable years ending after December
23            31, 2005:
24                    (i) for property on which a bonus
25                depreciation deduction of 30% of the adjusted
26                basis was taken, "x" equals "y" multiplied by

 

 

HB5759- 90 -LRB103 36173 HLH 66265 b

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

 

 

HB5759- 91 -LRB103 36173 HLH 66265 b

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

 

 

HB5759- 92 -LRB103 36173 HLH 66265 b

1        for the taxable year with respect to a transaction
2        with a taxpayer that is required to make an addition
3        modification with respect to such transaction under
4        Section 203(a)(2)(D-17), 203(b)(2)(E-12),
5        203(c)(2)(G-12), or 203(d)(2)(D-7), but not to exceed
6        the amount of such addition modification, (ii) any
7        income from intangible property (net of the deductions
8        allocable thereto) taken into account for the taxable
9        year with respect to a transaction with a taxpayer
10        that is required to make an addition modification with
11        respect to such transaction under Section
12        203(a)(2)(D-18), 203(b)(2)(E-13), 203(c)(2)(G-13), or
13        203(d)(2)(D-8), but not to exceed the amount of such
14        addition modification, and (iii) any insurance premium
15        income (net of deductions allocable thereto) taken
16        into account for the taxable year with respect to a
17        transaction with a taxpayer that is required to make
18        an addition modification with respect to such
19        transaction under Section 203(a)(2)(D-19), Section
20        203(b)(2)(E-14), Section 203(c)(2)(G-14), or Section
21        203(d)(2)(D-9), but not to exceed the amount of that
22        addition modification. This subparagraph (V) is exempt
23        from the provisions of Section 250;
24            (W) An amount equal to the interest income taken
25        into account for the taxable year (net of the
26        deductions allocable thereto) with respect to

 

 

HB5759- 93 -LRB103 36173 HLH 66265 b

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

 

 

HB5759- 94 -LRB103 36173 HLH 66265 b

1        taxable years ending on or after December 31, 2008, to
2        a person who would be a member of the same unitary
3        business group but for the fact that the person is
4        prohibited under Section 1501(a)(27) from being
5        included in the unitary business group because he or
6        she is ordinarily required to apportion business
7        income under different subsections of Section 304, but
8        not to exceed the addition modification required to be
9        made for the same taxable year under Section
10        203(b)(2)(E-13) for intangible expenses and costs
11        paid, accrued, or incurred, directly or indirectly, to
12        the same foreign person. This subparagraph (X) is
13        exempt from the provisions of Section 250;
14            (Y) For taxable years ending on or after December
15        31, 2011, in the case of a taxpayer who was required to
16        add back any insurance premiums under Section
17        203(b)(2)(E-14), such taxpayer may elect to subtract
18        that part of a reimbursement received from the
19        insurance company equal to the amount of the expense
20        or loss (including expenses incurred by the insurance
21        company) that would have been taken into account as a
22        deduction for federal income tax purposes if the
23        expense or loss had been uninsured. If a taxpayer
24        makes the election provided for by this subparagraph
25        (Y), the insurer to which the premiums were paid must
26        add back to income the amount subtracted by the

 

 

HB5759- 95 -LRB103 36173 HLH 66265 b

1        taxpayer pursuant to this subparagraph (Y). This
2        subparagraph (Y) is exempt from the provisions of
3        Section 250;
4            (Z) The difference between the nondeductible
5        controlled foreign corporation dividends under Section
6        965(e)(3) of the Internal Revenue Code over the
7        taxable income of the taxpayer, computed without
8        regard to Section 965(e)(2)(A) of the Internal Revenue
9        Code, and without regard to any net operating loss
10        deduction. This subparagraph (Z) is exempt from the
11        provisions of Section 250; and
12            (AA) For taxable years beginning on or after
13        January 1, 2023, for any cannabis establishment
14        operating in this State and licensed under the
15        Cannabis Regulation and Tax Act or any cannabis
16        cultivation center or medical cannabis dispensing
17        organization operating in this State and licensed
18        under the Compassionate Use of Medical Cannabis
19        Program Act, an amount equal to the deductions that
20        were disallowed under Section 280E of the Internal
21        Revenue Code for the taxable year and that would not be
22        added back under this subsection. The provisions of
23        this subparagraph (AA) are exempt from the provisions
24        of Section 250.
25        (3) Special rule. For purposes of paragraph (2)(A),
26    "gross income" in the case of a life insurance company,

 

 

HB5759- 96 -LRB103 36173 HLH 66265 b

1    for tax years ending on and after December 31, 1994, and
2    prior to December 31, 2011, shall mean the gross
3    investment income for the taxable year and, for tax years
4    ending on or after December 31, 2011, shall mean all
5    amounts included in life insurance gross income under
6    Section 803(a)(3) of the Internal Revenue Code.
 
7    (c) Trusts and estates.
8        (1) In general. In the case of a trust or estate, base
9    income means an amount equal to the taxpayer's taxable
10    income for the taxable year as modified by paragraph (2).
11        (2) Modifications. Subject to the provisions of
12    paragraph (3), the taxable income referred to in paragraph
13    (1) shall be modified by adding thereto the sum of the
14    following amounts:
15            (A) An amount equal to all amounts paid or accrued
16        to the taxpayer as interest or dividends during the
17        taxable year to the extent excluded from gross income
18        in the computation of taxable income;
19            (B) In the case of (i) an estate, $600; (ii) a
20        trust which, under its governing instrument, is
21        required to distribute all of its income currently,
22        $300; and (iii) any other trust, $100, but in each such
23        case, only to the extent such amount was deducted in
24        the computation of taxable income;
25            (C) An amount equal to the amount of tax imposed by

 

 

HB5759- 97 -LRB103 36173 HLH 66265 b

1        this Act to the extent deducted from gross income in
2        the computation of taxable income for the taxable
3        year;
4            (D) The amount of any net operating loss deduction
5        taken in arriving at taxable income, other than a net
6        operating loss carried forward from a taxable year
7        ending prior to December 31, 1986;
8            (E) For taxable years in which a net operating
9        loss carryback or carryforward from a taxable year
10        ending prior to December 31, 1986 is an element of
11        taxable income under paragraph (1) of subsection (e)
12        or subparagraph (E) of paragraph (2) of subsection
13        (e), the amount by which addition modifications other
14        than those provided by this subparagraph (E) exceeded
15        subtraction modifications in such taxable year, with
16        the following limitations applied in the order that
17        they are listed:
18                (i) the addition modification relating to the
19            net operating loss carried back or forward to the
20            taxable year from any taxable year ending prior to
21            December 31, 1986 shall be reduced by the amount
22            of addition modification under this subparagraph
23            (E) which related to that net operating loss and
24            which was taken into account in calculating the
25            base income of an earlier taxable year, and
26                (ii) the addition modification relating to the

 

 

HB5759- 98 -LRB103 36173 HLH 66265 b

1            net operating loss carried back or forward to the
2            taxable year from any taxable year ending prior to
3            December 31, 1986 shall not exceed the amount of
4            such carryback or carryforward;
5            For taxable years in which there is a net
6        operating loss carryback or carryforward from more
7        than one other taxable year ending prior to December
8        31, 1986, the addition modification provided in this
9        subparagraph (E) shall be the sum of the amounts
10        computed independently under the preceding provisions
11        of this subparagraph (E) for each such taxable year;
12            (F) For taxable years ending on or after January
13        1, 1989, an amount equal to the tax deducted pursuant
14        to Section 164 of the Internal Revenue Code if the
15        trust or estate is claiming the same tax for purposes
16        of the Illinois foreign tax credit under Section 601
17        of this Act;
18            (G) An amount equal to the amount of the capital
19        gain deduction allowable under the Internal Revenue
20        Code, to the extent deducted from gross income in the
21        computation of taxable income;
22            (G-5) For taxable years ending after December 31,
23        1997, an amount equal to any eligible remediation
24        costs that the trust or estate deducted in computing
25        adjusted gross income and for which the trust or
26        estate claims a credit under subsection (l) of Section

 

 

HB5759- 99 -LRB103 36173 HLH 66265 b

1        201;
2            (G-10) For taxable years 2001 and thereafter, an
3        amount equal to the bonus depreciation deduction taken
4        on the taxpayer's federal income tax return for the
5        taxable year under subsection (k) of Section 168 of
6        the Internal Revenue Code; and
7            (G-11) If the taxpayer sells, transfers, abandons,
8        or otherwise disposes of property for which the
9        taxpayer was required in any taxable year to make an
10        addition modification under subparagraph (G-10), then
11        an amount equal to the aggregate amount of the
12        deductions taken in all taxable years under
13        subparagraph (R) with respect to that property.
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 (R) and for which the taxpayer was
18        allowed in any taxable year to make a subtraction
19        modification under subparagraph (R), then an amount
20        equal to that subtraction modification.
21            The taxpayer is required to make the addition
22        modification under this subparagraph only once with
23        respect to any one piece of property;
24            (G-12) An amount equal to the amount otherwise
25        allowed as a deduction in computing base income for
26        interest paid, accrued, or incurred, directly or

 

 

HB5759- 100 -LRB103 36173 HLH 66265 b

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

 

 

HB5759- 101 -LRB103 36173 HLH 66265 b

1            incurred, directly or indirectly, to 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 interest; or
6                (ii) an item of interest paid, accrued, or
7            incurred, directly or indirectly, to a person if
8            the taxpayer can establish, based on a
9            preponderance of the evidence, both of the
10            following:
11                    (a) the person, during the same taxable
12                year, paid, accrued, or incurred, the interest
13                to a person that is not a related member, and
14                    (b) the transaction giving rise to the
15                interest expense between the taxpayer and the
16                person did not have as a principal purpose the
17                avoidance of Illinois income tax, and is paid
18                pursuant to a contract or agreement that
19                reflects an arm's-length interest rate and
20                terms; or
21                (iii) the taxpayer can establish, based on
22            clear and convincing evidence, that the interest
23            paid, accrued, or incurred relates to a contract
24            or agreement entered into at arm's-length rates
25            and terms and the principal purpose for the
26            payment is not federal or Illinois tax avoidance;

 

 

HB5759- 102 -LRB103 36173 HLH 66265 b

1            or
2                (iv) an item of interest paid, accrued, or
3            incurred, directly or indirectly, to a person if
4            the taxpayer establishes by clear and convincing
5            evidence that the adjustments are unreasonable; or
6            if the taxpayer and the Director agree in writing
7            to the application or use of an alternative method
8            of apportionment under Section 304(f).
9                Nothing in this subsection shall preclude the
10            Director from making any other adjustment
11            otherwise allowed under Section 404 of this Act
12            for any tax year beginning after the effective
13            date of this amendment provided such adjustment is
14            made pursuant to regulation adopted by the
15            Department and such regulations provide methods
16            and standards by which the Department will utilize
17            its authority under Section 404 of this Act;
18            (G-13) An amount equal to the amount of intangible
19        expenses and costs otherwise allowed as a deduction in
20        computing base income, and that were paid, accrued, or
21        incurred, directly or indirectly, (i) for taxable
22        years ending on or after December 31, 2004, to a
23        foreign person who would be a member of the same
24        unitary business group but for the fact that the
25        foreign person's business activity outside the United
26        States is 80% or more of that person's total business

 

 

HB5759- 103 -LRB103 36173 HLH 66265 b

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

 

 

HB5759- 104 -LRB103 36173 HLH 66265 b

1        management, ownership, sale, exchange, or any other
2        disposition of intangible property; (2) losses
3        incurred, directly or indirectly, from factoring
4        transactions or discounting transactions; (3) royalty,
5        patent, technical, and copyright fees; (4) licensing
6        fees; and (5) other similar expenses and costs. For
7        purposes of this subparagraph, "intangible property"
8        includes patents, patent applications, trade names,
9        trademarks, service marks, copyrights, mask works,
10        trade secrets, and similar types of intangible assets.
11            This paragraph shall not apply to the following:
12                (i) any item of intangible expenses or costs
13            paid, accrued, or incurred, directly or
14            indirectly, from a transaction with 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 item; or
19                (ii) any item of intangible expense or cost
20            paid, accrued, or incurred, directly or
21            indirectly, if the taxpayer can establish, based
22            on a preponderance of the evidence, both of the
23            following:
24                    (a) the person during the same taxable
25                year paid, accrued, or incurred, the
26                intangible expense or cost to a person that is

 

 

HB5759- 105 -LRB103 36173 HLH 66265 b

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

 

 

HB5759- 106 -LRB103 36173 HLH 66265 b

1            (G-14) For taxable years ending on or after
2        December 31, 2008, an amount equal to the amount of
3        insurance premium expenses and costs otherwise allowed
4        as a deduction in computing base income, and that were
5        paid, accrued, or incurred, directly or indirectly, to
6        a person who would be a member of the same unitary
7        business group but for the fact that the person is
8        prohibited under Section 1501(a)(27) from being
9        included in the unitary business group because he or
10        she is ordinarily required to apportion business
11        income under different subsections of Section 304. The
12        addition modification required by this subparagraph
13        shall be reduced to the extent that dividends were
14        included in base income of the unitary group for the
15        same taxable year and received by the taxpayer or by a
16        member of the taxpayer's unitary business group
17        (including amounts included in gross income under
18        Sections 951 through 964 of the Internal Revenue Code
19        and amounts included in gross income under Section 78
20        of the Internal Revenue Code) with respect to the
21        stock of the same person to whom the premiums and costs
22        were directly or indirectly paid, incurred, or
23        accrued. The preceding sentence does not apply to the
24        extent that the same dividends caused a reduction to
25        the addition modification required under Section
26        203(c)(2)(G-12) or Section 203(c)(2)(G-13) of this

 

 

HB5759- 107 -LRB103 36173 HLH 66265 b

1        Act;
2            (G-15) An amount equal to the credit allowable to
3        the taxpayer under Section 218(a) of this Act,
4        determined without regard to Section 218(c) of this
5        Act;
6            (G-16) For taxable years ending on or after
7        December 31, 2017, an amount equal to the deduction
8        allowed under Section 199 of the Internal Revenue Code
9        for the taxable year;
10    and by deducting from the total so obtained the sum of the
11    following amounts:
12            (H) An amount equal to all amounts included in
13        such total pursuant to the provisions of Sections
14        402(a), 402(c), 403(a), 403(b), 406(a), 407(a) and 408
15        of the Internal Revenue Code or included in such total
16        as distributions under the provisions of any
17        retirement or disability plan for employees of any
18        governmental agency or unit, or retirement payments to
19        retired partners, which payments are excluded in
20        computing net earnings from self employment by Section
21        1402 of the Internal Revenue Code and regulations
22        adopted pursuant thereto;
23            (I) The valuation limitation amount;
24            (J) An amount equal to the amount of any tax
25        imposed by this Act which was refunded to the taxpayer
26        and included in such total for the taxable year;

 

 

HB5759- 108 -LRB103 36173 HLH 66265 b

1            (K) An amount equal to all amounts included in
2        taxable income as modified by subparagraphs (A), (B),
3        (C), (D), (E), (F) and (G) which are exempt from
4        taxation by this State either by reason of its
5        statutes or Constitution or by reason of the
6        Constitution, treaties or statutes of the United
7        States; provided that, in the case of any statute of
8        this State that exempts income derived from bonds or
9        other obligations from the tax imposed under this Act,
10        the amount exempted shall be the interest net of bond
11        premium amortization;
12            (L) With the exception of any amounts subtracted
13        under subparagraph (K), an amount equal to the sum of
14        all amounts disallowed as deductions by (i) Sections
15        171(a)(2) and 265(a)(2) of the Internal Revenue Code,
16        and all amounts of expenses allocable to interest and
17        disallowed as deductions by Section 265(a)(1) of the
18        Internal Revenue Code; and (ii) for taxable years
19        ending on or after August 13, 1999, Sections
20        171(a)(2), 265, 280C, and 832(b)(5)(B)(i) of the
21        Internal Revenue Code, plus, (iii) for taxable years
22        ending on or after December 31, 2011, Section
23        45G(e)(3) of the Internal Revenue Code and, for
24        taxable years ending on or after December 31, 2008,
25        any amount included in gross income under Section 87
26        of the Internal Revenue Code; the provisions of this

 

 

HB5759- 109 -LRB103 36173 HLH 66265 b

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

 

 

HB5759- 110 -LRB103 36173 HLH 66265 b

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

 

 

HB5759- 111 -LRB103 36173 HLH 66265 b

1        and who is a victim of persecution for racial or
2        religious reasons by Nazi Germany or any other Axis
3        regime or as an heir of the victim. The amount of and
4        the eligibility for any public assistance, benefit, or
5        similar entitlement is not affected by the inclusion
6        of items (i) and (ii) of this paragraph in gross income
7        for federal income tax purposes. This paragraph is
8        exempt from the provisions of Section 250;
9            (R) For taxable years 2001 and thereafter, for the
10        taxable year in which the bonus depreciation deduction
11        is taken on the taxpayer's federal income tax return
12        under subsection (k) of Section 168 of the Internal
13        Revenue Code and for each applicable taxable year
14        thereafter, an amount equal to "x", where:
15                (1) "y" equals the amount of the depreciation
16            deduction taken for the taxable year on the
17            taxpayer's federal income tax return on property
18            for which the bonus depreciation deduction was
19            taken in any year under subsection (k) of Section
20            168 of the Internal Revenue Code, but not
21            including the bonus depreciation deduction;
22                (2) for taxable years ending on or before
23            December 31, 2005, "x" equals "y" multiplied by 30
24            and then divided by 70 (or "y" multiplied by
25            0.429); and
26                (3) for taxable years ending after December

 

 

HB5759- 112 -LRB103 36173 HLH 66265 b

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

 

 

HB5759- 113 -LRB103 36173 HLH 66265 b

1                then divided by 100 times 1 minus the
2                percentage bonus depreciation on the property
3                (that is, 100(1-bonus%)).
4            The aggregate amount deducted under this
5        subparagraph in all taxable years for any one piece of
6        property may not exceed the amount of the bonus
7        depreciation deduction taken on that property on the
8        taxpayer's federal income tax return under subsection
9        (k) of Section 168 of the Internal Revenue Code. This
10        subparagraph (R) is exempt from the provisions of
11        Section 250;
12            (S) If the taxpayer sells, transfers, abandons, or
13        otherwise disposes of property for which the taxpayer
14        was required in any taxable year to make an addition
15        modification under subparagraph (G-10), then an amount
16        equal to that addition modification.
17            If the taxpayer continues to own property through
18        the last day of the last tax year for which a
19        subtraction is allowed with respect to that property
20        under subparagraph (R) and for which the taxpayer was
21        required in any taxable year to make an addition
22        modification under subparagraph (G-10), then an amount
23        equal to that addition modification.
24            The taxpayer is allowed to take the deduction
25        under this subparagraph only once with respect to any
26        one piece of property.

 

 

HB5759- 114 -LRB103 36173 HLH 66265 b

1            This subparagraph (S) is exempt from the
2        provisions of Section 250;
3            (T) 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 such 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 such
18        addition modification. This subparagraph (T) is exempt
19        from the provisions of Section 250;
20            (U) 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 the foreign person's business activity
26        outside the United States is 80% or more of that

 

 

HB5759- 115 -LRB103 36173 HLH 66265 b

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

 

 

HB5759- 116 -LRB103 36173 HLH 66265 b

1        she is ordinarily required to apportion business
2        income under different subsections of Section 304, but
3        not to exceed the addition modification required to be
4        made for the same taxable year under Section
5        203(c)(2)(G-13) for intangible expenses and costs
6        paid, accrued, or incurred, directly or indirectly, to
7        the same foreign person. This subparagraph (V) is
8        exempt from the provisions of Section 250;
9            (W) in the case of an estate, an amount equal to
10        all amounts included in such total pursuant to the
11        provisions of Section 111 of the Internal Revenue Code
12        as a recovery of items previously deducted by the
13        decedent from adjusted gross income in the computation
14        of taxable income. This subparagraph (W) is exempt
15        from Section 250;
16            (X) an amount equal to the refund included in such
17        total of any tax deducted for federal income tax
18        purposes, to the extent that deduction was added back
19        under subparagraph (F). This subparagraph (X) is
20        exempt from the provisions of Section 250;
21            (Y) For taxable years ending on or after December
22        31, 2011, in the case of a taxpayer who was required to
23        add back any insurance premiums under Section
24        203(c)(2)(G-14), such taxpayer may elect to subtract
25        that part of a reimbursement received from the
26        insurance company equal to the amount of the expense

 

 

HB5759- 117 -LRB103 36173 HLH 66265 b

1        or loss (including expenses incurred by the insurance
2        company) that would have been taken into account as a
3        deduction for federal income tax purposes if the
4        expense or loss had been uninsured. If a taxpayer
5        makes the election provided for by this subparagraph
6        (Y), the insurer to which the premiums were paid must
7        add back to income the amount subtracted by the
8        taxpayer pursuant to this subparagraph (Y). This
9        subparagraph (Y) is exempt from the provisions of
10        Section 250;
11            (Z) For taxable years beginning after December 31,
12        2018 and before January 1, 2026, the amount of excess
13        business loss of the taxpayer disallowed as a
14        deduction by Section 461(l)(1)(B) of the Internal
15        Revenue Code; and
16            (AA) For taxable years beginning on or after
17        January 1, 2023, for any cannabis establishment
18        operating in this State and licensed under the
19        Cannabis Regulation and Tax Act or any cannabis
20        cultivation center or medical cannabis dispensing
21        organization operating in this State and licensed
22        under the Compassionate Use of Medical Cannabis
23        Program Act, an amount equal to the deductions that
24        were disallowed under Section 280E of the Internal
25        Revenue Code for the taxable year and that would not be
26        added back under this subsection. The provisions of

 

 

HB5759- 118 -LRB103 36173 HLH 66265 b

1        this subparagraph (AA) are exempt from the provisions
2        of Section 250.
3        (3) Limitation. The amount of any modification
4    otherwise required under this subsection shall, under
5    regulations prescribed by the Department, be adjusted by
6    any amounts included therein which were properly paid,
7    credited, or required to be distributed, or permanently
8    set aside for charitable purposes pursuant to Internal
9    Revenue Code Section 642(c) during the taxable year.
 
10    (d) Partnerships.
11        (1) In general. In the case of a partnership, base
12    income means an amount equal to the taxpayer's taxable
13    income for the taxable year as modified by paragraph (2).
14        (2) Modifications. The taxable income referred to in
15    paragraph (1) shall be modified by adding thereto the sum
16    of the following amounts:
17            (A) An amount equal to all amounts paid or accrued
18        to the taxpayer as interest or dividends during the
19        taxable year to the extent excluded from gross income
20        in the computation of taxable income;
21            (B) An amount equal to the amount of tax imposed by
22        this Act to the extent deducted from gross income for
23        the taxable year;
24            (C) The amount of deductions allowed to the
25        partnership pursuant to Section 707 (c) of the

 

 

HB5759- 119 -LRB103 36173 HLH 66265 b

1        Internal Revenue Code in calculating its taxable
2        income;
3            (D) An amount equal to the amount of the capital
4        gain deduction allowable under the Internal Revenue
5        Code, to the extent deducted from gross income in the
6        computation of taxable income;
7            (D-5) For taxable years 2001 and thereafter, an
8        amount equal to the bonus depreciation deduction taken
9        on the taxpayer's federal income tax return for the
10        taxable year under subsection (k) of Section 168 of
11        the Internal Revenue Code;
12            (D-6) If the taxpayer sells, transfers, abandons,
13        or otherwise disposes of property for which the
14        taxpayer was required in any taxable year to make an
15        addition modification under subparagraph (D-5), then
16        an amount equal to the aggregate amount of the
17        deductions taken in all taxable years under
18        subparagraph (O) with respect to that property.
19            If the taxpayer continues to own property through
20        the last day of the last tax year for which a
21        subtraction is allowed with respect to that property
22        under subparagraph (O) and for which the taxpayer was
23        allowed in any taxable year to make a subtraction
24        modification under subparagraph (O), then an amount
25        equal to that subtraction modification.
26            The taxpayer is required to make the addition

 

 

HB5759- 120 -LRB103 36173 HLH 66265 b

1        modification under this subparagraph only once with
2        respect to any one piece of property;
3            (D-7) An amount equal to the amount otherwise
4        allowed as a deduction in computing base income for
5        interest paid, accrued, or incurred, directly or
6        indirectly, (i) for taxable years ending on or after
7        December 31, 2004, to a foreign person who would be a
8        member of the same unitary business group but for the
9        fact the foreign person's business activity outside
10        the United States is 80% or more of the foreign
11        person's total business activity and (ii) for taxable
12        years ending on or after December 31, 2008, to a person
13        who would be a member of the same unitary business
14        group but for the fact that the person is prohibited
15        under Section 1501(a)(27) from being included in the
16        unitary business group because he or she is ordinarily
17        required to apportion business income under different
18        subsections of Section 304. The addition modification
19        required by this subparagraph shall be reduced to the
20        extent that dividends were included in base income of
21        the unitary group for the same taxable year and
22        received by the taxpayer or by a member of the
23        taxpayer's unitary business group (including amounts
24        included in gross income pursuant to Sections 951
25        through 964 of the Internal Revenue Code and amounts
26        included in gross income under Section 78 of the

 

 

HB5759- 121 -LRB103 36173 HLH 66265 b

1        Internal Revenue Code) with respect to the stock of
2        the same person to whom the interest was paid,
3        accrued, or incurred.
4            This paragraph shall not apply to the following:
5                (i) an item of interest paid, accrued, or
6            incurred, directly or indirectly, to 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 interest; or
11                (ii) an item of interest paid, accrued, or
12            incurred, directly or indirectly, to a person if
13            the taxpayer can establish, based on a
14            preponderance of the evidence, both of the
15            following:
16                    (a) the person, during the same taxable
17                year, paid, accrued, or incurred, the interest
18                to a person that is not a related member, and
19                    (b) the transaction giving rise to the
20                interest expense between the taxpayer and the
21                person did not have as a principal purpose the
22                avoidance of Illinois income tax, and is paid
23                pursuant to a contract or agreement that
24                reflects an arm's-length interest rate and
25                terms; or
26                (iii) the taxpayer can establish, based on

 

 

HB5759- 122 -LRB103 36173 HLH 66265 b

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

 

 

HB5759- 123 -LRB103 36173 HLH 66265 b

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

 

 

HB5759- 124 -LRB103 36173 HLH 66265 b

1        modification required under Section 203(d)(2)(D-7) of
2        this Act. As used in this subparagraph, the term
3        "intangible expenses and costs" includes (1) expenses,
4        losses, and costs for, or related to, the direct or
5        indirect acquisition, use, maintenance or management,
6        ownership, sale, exchange, or any other disposition of
7        intangible property; (2) losses incurred, directly or
8        indirectly, from factoring transactions or discounting
9        transactions; (3) royalty, patent, technical, and
10        copyright fees; (4) licensing fees; and (5) other
11        similar expenses and costs. For purposes of this
12        subparagraph, "intangible property" includes patents,
13        patent applications, trade names, trademarks, service
14        marks, copyrights, mask works, trade secrets, and
15        similar types of intangible assets;
16            This paragraph shall not apply to the following:
17                (i) any item of intangible expenses or costs
18            paid, accrued, or incurred, directly or
19            indirectly, from a transaction with 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 item; or
24                (ii) any item of intangible expense or cost
25            paid, accrued, or incurred, directly or
26            indirectly, if the taxpayer can establish, based

 

 

HB5759- 125 -LRB103 36173 HLH 66265 b

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

 

 

HB5759- 126 -LRB103 36173 HLH 66265 b

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

 

 

HB5759- 127 -LRB103 36173 HLH 66265 b

1        were directly or indirectly paid, incurred, or
2        accrued. The preceding sentence does not apply to the
3        extent that the same dividends caused a reduction to
4        the addition modification required under Section
5        203(d)(2)(D-7) or Section 203(d)(2)(D-8) of this Act;
6            (D-10) An amount equal to the credit allowable to
7        the taxpayer under Section 218(a) of this Act,
8        determined without regard to Section 218(c) of this
9        Act;
10            (D-11) For taxable years ending on or after
11        December 31, 2017, an amount equal to the deduction
12        allowed under Section 199 of the Internal Revenue Code
13        for the taxable year;
14    and by deducting from the total so obtained the following
15    amounts:
16            (E) The valuation limitation amount;
17            (F) An amount equal to the amount of any tax
18        imposed by this Act which was refunded to the taxpayer
19        and included in such total for the taxable year;
20            (G) An amount equal to all amounts included in
21        taxable income as modified by subparagraphs (A), (B),
22        (C) and (D) which are exempt from taxation by this
23        State either by reason of its statutes or Constitution
24        or by reason of the Constitution, treaties or statutes
25        of the United States; provided that, in the case of any
26        statute of this State that exempts income derived from

 

 

HB5759- 128 -LRB103 36173 HLH 66265 b

1        bonds or other obligations from the tax imposed under
2        this Act, the amount exempted shall be the interest
3        net of bond premium amortization;
4            (H) Any income of the partnership which
5        constitutes personal service income as defined in
6        Section 1348(b)(1) of the Internal Revenue Code (as in
7        effect December 31, 1981) or a reasonable allowance
8        for compensation paid or accrued for services rendered
9        by partners to the partnership, whichever is greater;
10        this subparagraph (H) is exempt from the provisions of
11        Section 250;
12            (I) An amount equal to all amounts of income
13        distributable to an entity subject to the Personal
14        Property Tax Replacement Income Tax imposed by
15        subsections (c) and (d) of Section 201 of this Act
16        including amounts distributable to organizations
17        exempt from federal income tax by reason of Section
18        501(a) of the Internal Revenue Code; this subparagraph
19        (I) is exempt from the provisions of Section 250;
20            (J) With the exception of any amounts subtracted
21        under subparagraph (G), an amount equal to the sum of
22        all amounts disallowed as deductions by (i) Sections
23        171(a)(2) and 265(a)(2) of the Internal Revenue Code,
24        and all amounts of expenses allocable to interest and
25        disallowed as deductions by Section 265(a)(1) of the
26        Internal Revenue Code; and (ii) for taxable years

 

 

HB5759- 129 -LRB103 36173 HLH 66265 b

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

 

 

HB5759- 130 -LRB103 36173 HLH 66265 b

1        that dividends eligible for the deduction provided in
2        subparagraph (K) of paragraph (2) of this subsection
3        shall not be eligible for the deduction provided under
4        this subparagraph (M);
5            (N) An amount equal to the amount of the deduction
6        used to compute the federal income tax credit for
7        restoration of substantial amounts held under claim of
8        right for the taxable year pursuant to Section 1341 of
9        the Internal Revenue Code;
10            (O) For taxable years 2001 and thereafter, for the
11        taxable year in which the bonus depreciation deduction
12        is taken on the taxpayer's federal income tax return
13        under subsection (k) of Section 168 of the Internal
14        Revenue Code and for each applicable taxable year
15        thereafter, an amount equal to "x", where:
16                (1) "y" equals the amount of the depreciation
17            deduction taken for the taxable year on the
18            taxpayer's federal income tax return on property
19            for which the bonus depreciation deduction was
20            taken in any year under subsection (k) of Section
21            168 of the Internal Revenue Code, but not
22            including the bonus depreciation deduction;
23                (2) for taxable years ending on or before
24            December 31, 2005, "x" equals "y" multiplied by 30
25            and then divided by 70 (or "y" multiplied by
26            0.429); and

 

 

HB5759- 131 -LRB103 36173 HLH 66265 b

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

 

 

HB5759- 132 -LRB103 36173 HLH 66265 b

1                on the property (that is, 100(bonus%)) and
2                then divided by 100 times 1 minus the
3                percentage bonus depreciation on the property
4                (that is, 100(1-bonus%)).
5            The aggregate amount deducted under this
6        subparagraph in all taxable years for any one piece of
7        property may not exceed the amount of the bonus
8        depreciation deduction taken on that property on the
9        taxpayer's federal income tax return under subsection
10        (k) of Section 168 of the Internal Revenue Code. This
11        subparagraph (O) is exempt from the provisions of
12        Section 250;
13            (P) If the taxpayer sells, transfers, abandons, or
14        otherwise disposes of property for which the taxpayer
15        was required in any taxable year to make an addition
16        modification under subparagraph (D-5), then an amount
17        equal to that addition modification.
18            If the taxpayer continues to own property through
19        the last day of the last tax year for which a
20        subtraction is allowed with respect to that property
21        under subparagraph (O) and for which the taxpayer was
22        required in any taxable year to make an addition
23        modification under subparagraph (D-5), then an amount
24        equal to that addition modification.
25            The taxpayer is allowed to take the deduction
26        under this subparagraph only once with respect to any

 

 

HB5759- 133 -LRB103 36173 HLH 66265 b

1        one piece of property.
2            This subparagraph (P) is exempt from the
3        provisions of Section 250;
4            (Q) The amount of (i) any interest income (net of
5        the deductions allocable thereto) taken into account
6        for the taxable year with respect to a transaction
7        with a taxpayer that is required to make an addition
8        modification with respect to such transaction under
9        Section 203(a)(2)(D-17), 203(b)(2)(E-12),
10        203(c)(2)(G-12), or 203(d)(2)(D-7), but not to exceed
11        the amount of such addition modification and (ii) any
12        income from intangible property (net of the deductions
13        allocable thereto) taken into account for the taxable
14        year with respect to a transaction with a taxpayer
15        that is required to make an addition modification with
16        respect to such transaction under Section
17        203(a)(2)(D-18), 203(b)(2)(E-13), 203(c)(2)(G-13), or
18        203(d)(2)(D-8), but not to exceed the amount of such
19        addition modification. This subparagraph (Q) is exempt
20        from Section 250;
21            (R) An amount equal to the interest income taken
22        into account for the taxable year (net of the
23        deductions allocable thereto) with respect to
24        transactions with (i) a foreign person who would be a
25        member of the taxpayer's unitary business group but
26        for the fact that the foreign person's business

 

 

HB5759- 134 -LRB103 36173 HLH 66265 b

1        activity outside the United States is 80% or more of
2        that person's total business activity and (ii) for
3        taxable years ending on or after December 31, 2008, to
4        a person who would be a member of the same unitary
5        business group but for the fact that the person is
6        prohibited under Section 1501(a)(27) from being
7        included in the unitary business group because he or
8        she is ordinarily required to apportion business
9        income under different subsections of Section 304, but
10        not to exceed the addition modification required to be
11        made for the same taxable year under Section
12        203(d)(2)(D-7) for interest paid, accrued, or
13        incurred, directly or indirectly, to the same person.
14        This subparagraph (R) is exempt from Section 250;
15            (S) 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

 

 

HB5759- 135 -LRB103 36173 HLH 66265 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(d)(2)(D-8) for intangible expenses and costs paid,
7        accrued, or incurred, directly or indirectly, to the
8        same person. This subparagraph (S) is exempt from
9        Section 250;
10            (T) For taxable years ending on or after December
11        31, 2011, in the case of a taxpayer who was required to
12        add back any insurance premiums under Section
13        203(d)(2)(D-9), such taxpayer may elect to subtract
14        that part of a reimbursement received from the
15        insurance company equal to the amount of the expense
16        or loss (including expenses incurred by the insurance
17        company) that would have been taken into account as a
18        deduction for federal income tax purposes if the
19        expense or loss had been uninsured. If a taxpayer
20        makes the election provided for by this subparagraph
21        (T), the insurer to which the premiums were paid must
22        add back to income the amount subtracted by the
23        taxpayer pursuant to this subparagraph (T). This
24        subparagraph (T) is exempt from the provisions of
25        Section 250; and
26            (U) For taxable years beginning on or after

 

 

HB5759- 136 -LRB103 36173 HLH 66265 b

1        January 1, 2023, for any cannabis establishment
2        operating in this State and licensed under the
3        Cannabis Regulation and Tax Act or any cannabis
4        cultivation center or medical cannabis dispensing
5        organization operating in this State and licensed
6        under the Compassionate Use of Medical Cannabis
7        Program Act, an amount equal to the deductions that
8        were disallowed under Section 280E of the Internal
9        Revenue Code for the taxable year and that would not be
10        added back under this subsection. The provisions of
11        this subparagraph (U) are exempt from the provisions
12        of Section 250.
 
13    (e) Gross income; adjusted gross income; taxable income.
14        (1) In general. Subject to the provisions of paragraph
15    (2) and subsection (b)(3), for purposes of this Section
16    and Section 803(e), a taxpayer's gross income, adjusted
17    gross income, or taxable income for the taxable year shall
18    mean the amount of gross income, adjusted gross income or
19    taxable income properly reportable for federal income tax
20    purposes for the taxable year under the provisions of the
21    Internal Revenue Code. Taxable income may be less than
22    zero. However, for taxable years ending on or after
23    December 31, 1986, net operating loss carryforwards from
24    taxable years ending prior to December 31, 1986, may not
25    exceed the sum of federal taxable income for the taxable

 

 

HB5759- 137 -LRB103 36173 HLH 66265 b

1    year before net operating loss deduction, plus the excess
2    of addition modifications over subtraction modifications
3    for the taxable year. For taxable years ending prior to
4    December 31, 1986, taxable income may never be an amount
5    in excess of the net operating loss for the taxable year as
6    defined in subsections (c) and (d) of Section 172 of the
7    Internal Revenue Code, provided that when taxable income
8    of a corporation (other than a Subchapter S corporation),
9    trust, or estate is less than zero and addition
10    modifications, other than those provided by subparagraph
11    (E) of paragraph (2) of subsection (b) for corporations or
12    subparagraph (E) of paragraph (2) of subsection (c) for
13    trusts and estates, exceed subtraction modifications, an
14    addition modification must be made under those
15    subparagraphs for any other taxable year to which the
16    taxable income less than zero (net operating loss) is
17    applied under Section 172 of the Internal Revenue Code or
18    under subparagraph (E) of paragraph (2) of this subsection
19    (e) applied in conjunction with Section 172 of the
20    Internal Revenue Code.
21        (2) Special rule. For purposes of paragraph (1) of
22    this subsection, the taxable income properly reportable
23    for federal income tax purposes shall mean:
24            (A) Certain life insurance companies. In the case
25        of a life insurance company subject to the tax imposed
26        by Section 801 of the Internal Revenue Code, life

 

 

HB5759- 138 -LRB103 36173 HLH 66265 b

1        insurance company taxable income, plus the amount of
2        distribution from pre-1984 policyholder surplus
3        accounts as calculated under Section 815a of the
4        Internal Revenue Code;
5            (B) Certain other insurance companies. In the case
6        of mutual insurance companies subject to the tax
7        imposed by Section 831 of the Internal Revenue Code,
8        insurance company taxable income;
9            (C) Regulated investment companies. In the case of
10        a regulated investment company subject to the tax
11        imposed by Section 852 of the Internal Revenue Code,
12        investment company taxable income;
13            (D) Real estate investment trusts. In the case of
14        a real estate investment trust subject to the tax
15        imposed by Section 857 of the Internal Revenue Code,
16        real estate investment trust taxable income;
17            (E) Consolidated corporations. In the case of a
18        corporation which is a member of an affiliated group
19        of corporations filing a consolidated income tax
20        return for the taxable year for federal income tax
21        purposes, taxable income determined as if such
22        corporation had filed a separate return for federal
23        income tax purposes for the taxable year and each
24        preceding taxable year for which it was a member of an
25        affiliated group. For purposes of this subparagraph,
26        the taxpayer's separate taxable income shall be

 

 

HB5759- 139 -LRB103 36173 HLH 66265 b

1        determined as if the election provided by Section
2        243(b)(2) of the Internal Revenue Code had been in
3        effect for all such years;
4            (F) Cooperatives. In the case of a cooperative
5        corporation or association, the taxable income of such
6        organization determined in accordance with the
7        provisions of Section 1381 through 1388 of the
8        Internal Revenue Code, but without regard to the
9        prohibition against offsetting losses from patronage
10        activities against income from nonpatronage
11        activities; except that a cooperative corporation or
12        association may make an election to follow its federal
13        income tax treatment of patronage losses and
14        nonpatronage losses. In the event such election is
15        made, such losses shall be computed and carried over
16        in a manner consistent with subsection (a) of Section
17        207 of this Act and apportioned by the apportionment
18        factor reported by the cooperative on its Illinois
19        income tax return filed for the taxable year in which
20        the losses are incurred. The election shall be
21        effective for all taxable years with original returns
22        due on or after the date of the election. In addition,
23        the cooperative may file an amended return or returns,
24        as allowed under this Act, to provide that the
25        election shall be effective for losses incurred or
26        carried forward for taxable years occurring prior to

 

 

HB5759- 140 -LRB103 36173 HLH 66265 b

1        the date of the election. Once made, the election may
2        only be revoked upon approval of the Director. The
3        Department shall adopt rules setting forth
4        requirements for documenting the elections and any
5        resulting Illinois net loss and the standards to be
6        used by the Director in evaluating requests to revoke
7        elections. Public Act 96-932 is declaratory of
8        existing law;
9            (G) Subchapter S corporations. In the case of: (i)
10        a Subchapter S corporation for which there is in
11        effect an election for the taxable year under Section
12        1362 of the Internal Revenue Code, the taxable income
13        of such corporation determined in accordance with
14        Section 1363(b) of the Internal Revenue Code, except
15        that taxable income shall take into account those
16        items which are required by Section 1363(b)(1) of the
17        Internal Revenue Code to be separately stated; and
18        (ii) a Subchapter S corporation for which there is in
19        effect a federal election to opt out of the provisions
20        of the Subchapter S Revision Act of 1982 and have
21        applied instead the prior federal Subchapter S rules
22        as in effect on July 1, 1982, the taxable income of
23        such corporation determined in accordance with the
24        federal Subchapter S rules as in effect on July 1,
25        1982; and
26            (H) Partnerships. In the case of a partnership,

 

 

HB5759- 141 -LRB103 36173 HLH 66265 b

1        taxable income determined in accordance with Section
2        703 of the Internal Revenue Code, except that taxable
3        income shall take into account those items which are
4        required by Section 703(a)(1) to be separately stated
5        but which would be taken into account by an individual
6        in calculating his taxable income.
7        (3) Recapture of business expenses on disposition of
8    asset or business. Notwithstanding any other law to the
9    contrary, if in prior years income from an asset or
10    business has been classified as business income and in a
11    later year is demonstrated to be non-business income, then
12    all expenses, without limitation, deducted in such later
13    year and in the 2 immediately preceding taxable years
14    related to that asset or business that generated the
15    non-business income shall be added back and recaptured as
16    business income in the year of the disposition of the
17    asset or business. Such amount shall be apportioned to
18    Illinois using the greater of the apportionment fraction
19    computed for the business under Section 304 of this Act
20    for the taxable year or the average of the apportionment
21    fractions computed for the business under Section 304 of
22    this Act for the taxable year and for the 2 immediately
23    preceding taxable years.
 
24    (f) Valuation limitation amount.
25        (1) In general. The valuation limitation amount

 

 

HB5759- 142 -LRB103 36173 HLH 66265 b

1    referred to in subsections (a)(2)(G), (c)(2)(I) and
2    (d)(2)(E) is an amount equal to:
3            (A) The sum of the pre-August 1, 1969 appreciation
4        amounts (to the extent consisting of gain reportable
5        under the provisions of Section 1245 or 1250 of the
6        Internal Revenue Code) for all property in respect of
7        which such gain was reported for the taxable year;
8        plus
9            (B) The lesser of (i) the sum of the pre-August 1,
10        1969 appreciation amounts (to the extent consisting of
11        capital gain) for all property in respect of which
12        such gain was reported for federal income tax purposes
13        for the taxable year, or (ii) the net capital gain for
14        the taxable year, reduced in either case by any amount
15        of such gain included in the amount determined under
16        subsection (a)(2)(F) or (c)(2)(H).
17        (2) Pre-August 1, 1969 appreciation amount.
18            (A) If the fair market value of property referred
19        to in paragraph (1) was readily ascertainable on
20        August 1, 1969, the pre-August 1, 1969 appreciation
21        amount for such property is the lesser of (i) the
22        excess of such fair market value over the taxpayer's
23        basis (for determining gain) for such property on that
24        date (determined under the Internal Revenue Code as in
25        effect on that date), or (ii) the total gain realized
26        and reportable for federal income tax purposes in

 

 

HB5759- 143 -LRB103 36173 HLH 66265 b

1        respect of the sale, exchange or other disposition of
2        such property.
3            (B) If the fair market value of property referred
4        to in paragraph (1) was not readily ascertainable on
5        August 1, 1969, the pre-August 1, 1969 appreciation
6        amount for such property is that amount which bears
7        the same ratio to the total gain reported in respect of
8        the property for federal income tax purposes for the
9        taxable year, as the number of full calendar months in
10        that part of the taxpayer's holding period for the
11        property ending July 31, 1969 bears to the number of
12        full calendar months in the taxpayer's entire holding
13        period for the property.
14            (C) The Department shall prescribe such
15        regulations as may be necessary to carry out the
16        purposes of this paragraph.
 
17    (g) Double deductions. Unless specifically provided
18otherwise, nothing in this Section shall permit the same item
19to be deducted more than once.
 
20    (h) Legislative intention. Except as expressly provided by
21this Section there shall be no modifications or limitations on
22the amounts of income, gain, loss or deduction taken into
23account in determining gross income, adjusted gross income or
24taxable income for federal income tax purposes for the taxable

 

 

HB5759- 144 -LRB103 36173 HLH 66265 b

1year, or in the amount of such items entering into the
2computation of base income and net income under this Act for
3such taxable year, whether in respect of property values as of
4August 1, 1969 or otherwise.
5(Source: P.A. 102-16, eff. 6-17-21; 102-558, eff. 8-20-21;
6102-658, eff. 8-27-21; 102-813, eff. 5-13-22; 102-1112, eff.
712-21-22; 103-8, eff. 6-7-23; 103-478, eff. 1-1-24; revised
89-26-23.)
 
9    (35 ILCS 5/222)
10    Sec. 222. Live music and theater production credit.
11    (a) For tax years beginning on or after January 1, 2012 and
12beginning prior to January 1, 2027, a taxpayer who has
13received a tax credit award under the Live Music and Theater
14Production Tax Credit Act is entitled to a credit against the
15taxes imposed under subsections (a) and (b) of Section 201 of
16this Act in an amount determined under that Act by the
17Department of Commerce and Economic Opportunity.
18    (b) For taxable years ending before December 31, 2023, if
19the taxpayer is a partnership, limited liability partnership,
20limited liability company, or Subchapter S corporation, the
21tax credit award is allowed to the partners, unit holders, or
22shareholders in accordance with the determination of income
23and distributive share of income under Sections 702 and 704
24and Subchapter S of the Internal Revenue Code. For taxable
25years ending on or after December 31, 2023, if the taxpayer is

 

 

HB5759- 145 -LRB103 36173 HLH 66265 b

1a partnership or Subchapter S corporation, then the provisions
2of Section 251 apply.
3    (c) A sale, assignment, or transfer of the tax credit
4award may be made by the taxpayer earning the credit within one
5year after the credit is awarded in accordance with rules
6adopted by the Department of Commerce and Economic
7Opportunity.
8    (d) The Department of Revenue, in cooperation with the
9Department of Commerce and Economic Opportunity, shall adopt
10rules to enforce and administer the provisions of this
11Section.
12    (e) The tax credit award may not be carried back. If the
13amount of the credit exceeds the tax liability for the year,
14the excess may be carried forward and applied to the tax
15liability of the 5 tax years following the excess credit year.
16The tax credit award shall be applied to the earliest year for
17which there is a tax liability. If there are credits from more
18than one tax year that are available to offset liability, the
19earlier credit shall be applied first. In no event may a credit
20under this Section reduce the taxpayer's liability to less
21than zero.
22(Source: P.A. 102-16, eff. 6-17-21; 103-396, eff. 1-1-24.)
 
23    (35 ILCS 5/241 new)
24    Sec. 241. Music and Musicians Tax Credits and Jobs Act.
25Taxpayers who have been awarded a credit under the Music and

 

 

HB5759- 146 -LRB103 36173 HLH 66265 b

1Musicians Tax Credits and Jobs Act are entitled to a credit
2against the taxes imposed by subsections (a) and (b) of
3Section 201 as provided in that Act.
 
4    (35 ILCS 5/242 new)
5    Sec. 242. Theater infrastructure projects.
6    (a) For taxable years beginning on or after January 1,
72025, the Department of Commerce and Economic Opportunity may
8award the following credits against the taxes imposed by
9subsections (a) and (b) of Section 201:
10        (1) Credits for investments in State-certified higher
11    education musical or theatrical infrastructure projects.
12    Investments in a State-certified higher education musical
13    or theatrical infrastructure project attributable to areas
14    other than where live performances will take place may
15    comprise no more than 25% of total qualifying
16    expenditures.
17        As used in this paragraph (1):
18        "State-certified higher education musical or
19    theatrical infrastructure project" means a project
20    certified by the Department of Commerce and Economic
21    Opportunity that involves the construction of a new
22    proscenium or black-box theater facility that:
23            (A) is primarily designed to host live
24        performances;
25            (B) is situated on a parcel of land that is located

 

 

HB5759- 147 -LRB103 36173 HLH 66265 b

1        on the campus of a higher education institution in
2        this State;
3            (C) is owned by a higher education campus
4        institution or support foundation related to the
5        campus that is primarily designed to benefit and
6        support campus students and the higher education
7        facility; and
8            (D) has a minimum fixed seating capacity of 250.
9        (2) Credits for investments in State-certified musical
10    or theatrical facility infrastructure projects.
11        As used in this paragraph (2):
12        "State-certified musical or theatrical facility
13    infrastructure project" means a capital infrastructure
14    project in the State that is certified by the Department
15    of Commerce and Economic Opportunity and is directly
16    related to the production or performance of musical or
17    theatrical productions.
18        (3) Credits for investments in State-certified sound
19    scoring infrastructure projects.
20        As used in this paragraph (3):
21        "State-certified sound scoring infrastructure
22    project" means a sound scoring infrastructure project at a
23    new or rehabilitated facility in the State that is
24    primarily designed to record live music for film or
25    television.
26    (b) In no event shall a credit under this Section reduce

 

 

HB5759- 148 -LRB103 36173 HLH 66265 b

1the taxpayer's liability to less than zero. If the amount of
2the credit exceeds the tax liability for the year, the excess
3may be carried forward and applied to the tax liability of the
45 taxable years following the excess credit year. The tax
5credit shall be applied to the earliest year for which there is
6a tax liability. If there are credits for more than one year
7that are available to offset a liability, the earlier credit
8shall be applied first.
9    (c) For partners of partnerships and shareholders of
10Subchapter S corporations, the provisions of Section 251 shall
11apply with respect to the credit under this Section.
12    (d) This Section is exempt from the provisions of Section
13250.
 
14    Section 15-10. The Live Theater Production Tax Credit Act
15is amended by changing Sections 10-1, 10-5, 10-10, 10-15,
1610-20, 10-25, 10-30, 10-40, and 10-50 as follows:
 
17    (35 ILCS 17/10-1)
18    Sec. 10-1. Short title. This Article may be cited as the
19Live Music and Theater Production Tax Credit Act. References
20in this Article to "this Act" mean this Article.
21(Source: P.A. 97-636, eff. 6-1-12.)
 
22    (35 ILCS 17/10-5)
23    Sec. 10-5. Purpose. The Illinois economy depends heavily

 

 

HB5759- 149 -LRB103 36173 HLH 66265 b

1on the commercial for-profit live theater industry and the
2accredited theater productions that are presented in Illinois.
3As a result of intense competition from other prominent
4theater cities in the United States and abroad in attracting
5theater productions, Illinois must move aggressively with new
6business development investment tools so that Illinois is more
7competitive in site location decision making for show
8producers. In an increasingly global economy, Illinois'
9long-term development will benefit from the rational,
10strategic use of State resources in support of accredited
11theater productions. It is the purpose of this Act to preserve
12and expand the existing work force used in live theater and
13music and enhance the marketing of the presentation of live
14theater and music in Illinois. It shall be the policy of this
15State to promote and encourage the training and hiring of
16Illinois residents who represent the diversity of the Illinois
17population through the creation and implementation of
18training, education, and recruitment programs organized in
19cooperation with Illinois colleges and universities, labor
20organizations, and the commercial for-profit live theater and
21music industry.
22(Source: P.A. 102-1112, eff. 12-21-22.)
 
23    (35 ILCS 17/10-10)
24    Sec. 10-10. Definitions. As used in this Act:
25    "Accredited theater production" means a for-profit live

 

 

HB5759- 150 -LRB103 36173 HLH 66265 b

1stage presentation in a qualified production facility, as
2defined in this Section, that is either (i) a pre-Broadway
3production; or (ii) a long-run production for which the
4aggregate Illinois labor and marketing expenditures exceed
5$100,000; or (iii) a musical production. For credits awarded
6under this Act in State Fiscal Year 2023, "accredited theater
7production" also includes any commercial Broadway touring
8show.
9    "Commercial Broadway touring show" means a production that
10(i) is performed in a qualified production facility and plays
11in more than 2 other markets in North America outside of
12Illinois within 12 months of its Illinois presentation and
13(ii) has Illinois production spending of not less than
14$100,000, as shown on the applicant's application for the
15credit.
16    "Pre-Broadway production" means a live stage production
17that, in its original or adaptive version, is performed in a
18qualified production facility having a presentation scheduled
19for Broadway's Theater District in New York City within 12
20months after its Illinois presentation.
21    "Long-run production" means a live stage production that
22is performed in a qualified production facility for longer
23than 8 weeks, with at least 6 performances per week, and
24includes a production that spans the end of one tax year and
25the commencement of a new tax year that, in combination, meets
26the criteria set forth in this definition making it a long-run

 

 

HB5759- 151 -LRB103 36173 HLH 66265 b

1production eligible for a theater tax credit award in each tax
2year or portion thereof.
3    "Accredited theater production certificate" means a
4certificate issued by the Department certifying that the
5production is an accredited theater production that meets the
6guidelines of this Act.
7    "Applicant" means a taxpayer that is a theater producer,
8owner, licensee, operator, or presenter that is presenting or
9has presented a live stage presentation located within the
10State of Illinois who:
11        (1) owns or licenses the theatrical rights of the
12    stage presentation for the Illinois production period; or
13        (2) has contracted or will contract directly with the
14    owner or licensee of the theatrical rights or a person
15    acting on behalf of the owner or licensee to provide live
16    performances of the production.
17    An applicant that directly or indirectly owns, controls,
18or operates multiple qualified production facilities shall be
19presumed to be and considered for the purposes of this Act to
20be a single applicant; provided, however, that as to each of
21the applicant's qualified production facilities, the applicant
22shall be eligible to separately and contemporaneously (i)
23apply for and obtain accredited theater production
24certificates, (ii) stage accredited theater productions, and
25(iii) apply for and receive a tax credit award certificate for
26each of the applicant's accredited theater productions

 

 

HB5759- 152 -LRB103 36173 HLH 66265 b

1performed at each of the applicant's qualified production
2facilities.
3    "Department" means the Department of Commerce and Economic
4Opportunity.
5    "Director" means the Director of the Department.
6    "Illinois labor expenditure" means gross salary or wages
7including, but not limited to, taxes, benefits, and any other
8consideration incurred or paid to non-talent employees of the
9applicant for services rendered to and on behalf of the
10accredited theater production. To qualify as an Illinois labor
11expenditure, the expenditure must be:
12        (1) incurred or paid by the applicant on or after the
13    effective date of the Act for services related to any
14    portion of an accredited theater production from its
15    pre-production stages, including, but not limited to, the
16    writing of the script, casting, hiring of service
17    providers, purchases from vendors, marketing, advertising,
18    public relations, load in, rehearsals, performances, other
19    accredited theater production related activities, and load
20    out;
21        (2) directly attributable to the accredited theater
22    production;
23        (3) limited to the first $100,000 of wages incurred or
24    paid to each employee of an accredited theater production
25    in each tax year;
26        (4) included in the federal income tax basis of the

 

 

HB5759- 153 -LRB103 36173 HLH 66265 b

1    property;
2        (5) paid in the tax year for which the applicant is
3    claiming the tax credit award, or no later than 60 days
4    after the end of the tax year;
5        (6) paid to persons residing in Illinois at the time
6    payments were made; and
7        (7) reasonable in the circumstances.
8    "Illinois production spending" means any and all expenses
9directly or indirectly incurred relating to an accredited
10theater production presented in any qualified production
11facility of the applicant, including, but not limited to,
12expenditures for:
13        (1) national marketing, public relations, and the
14    creation and placement of print, electronic, television,
15    billboard, and other forms of advertising; and
16        (2) the construction and fabrication of scenic
17    materials and elements; provided, however, that the
18    maximum amount of expenditures attributable to the
19    construction and fabrication of scenic materials and
20    elements eligible for a tax credit award shall not exceed
21    $500,000 per applicant per production in any single tax
22    year.
23    "Musical production" means a live musical performance that
24occurs in the State in front of a live audience, whether or not
25there is a charge for admission, and includes the producing,
26rehearsing, marketing, administration, recording, performing,

 

 

HB5759- 154 -LRB103 36173 HLH 66265 b

1or filming of that performance. "Musical production" includes,
2but is not limited to, drama, comedy, comedy revue, opera,
3ballet, jazz, cabaret, and variety entertainment.
4    "Qualified production facility" means a facility located
5in the State in which live theatrical or musical productions
6are, or are intended to be, exclusively presented that
7contains at least one stage, a seating capacity of 1,200 or
8more seats, and dressing rooms, storage areas, and other
9ancillary amenities necessary for the accredited theater
10production.
11    "Tax credit award" means the issuance to a taxpayer by the
12Department of a tax credit award in conformance with Sections
1310-40 and 10-45 of this Act.
14    "Tax year" means a calendar year for the period January 1
15to and including December 31.
16(Source: P.A. 102-1112, eff. 12-21-22.)
 
17    (35 ILCS 17/10-15)
18    Sec. 10-15. Powers of the Department. The Department, in
19addition to those powers granted under the Civil
20Administrative Code of Illinois, is granted and has all the
21powers necessary or convenient to carry out and effectuate the
22purposes and provisions of this Act, including, but not
23limited to, the power and authority to:
24        (1) adopt rules deemed necessary and appropriate for
25    the administration of the Tax Credit Award program;

 

 

HB5759- 155 -LRB103 36173 HLH 66265 b

1    establish forms for applications, notifications,
2    contracts, or any other agreements; and accept
3    applications at any time during the year;
4        (2) assist applicants pursuant to the provisions of
5    this Act to promote, foster, and support live theater
6    development and production and its related job creation or
7    retention within the State;
8        (3) gather information and conduct inquiries, in the
9    manner and by the methods set forth in this Act, required
10    for the Department to comply with Section 10-40 and,
11    without limitation, obtain information with respect to
12    applicants for the purpose of making any designations or
13    certifications necessary or desirable to assist the
14    Department with any recommendation or guidance in the
15    furtherance of the purposes of this Act and relating to
16    applicants' participation in training, education, and
17    recruitment programs that are organized in cooperation
18    with Illinois colleges and universities or labor
19    organizations designed to promote and encourage the
20    training and hiring of Illinois residents who represent
21    the diversity of the Illinois population;
22        (4) provide for sufficient personnel to permit
23    administrative, staffing, operating, and related support
24    required to adequately discharge its duties and
25    responsibilities described in this Act from funds as may
26    be appropriated by the General Assembly for the

 

 

HB5759- 156 -LRB103 36173 HLH 66265 b

1    administration of this Act; and
2        (5) require that the applicant at all times keep
3    proper books and records of accounts relating to the tax
4    credit award, in accordance with generally accepted
5    accounting principles consistently applied, and make, upon
6    reasonable written request by the Department, those books
7    and records available for reasonable Department inspection
8    and audit during the applicant's normal business hours.
9    Any documents or data made available to or received from
10    the applicant by any agent, employee, officer, or service
11    provider to the Department shall be deemed confidential
12    and shall not constitute public records to the extent that
13    the documents or data consist of commercial or financial
14    information regarding the operation by the applicant of
15    any theater or any accredited theater production, or any
16    recipient of any tax credit award under this Act.
17(Source: P.A. 97-636, eff. 6-1-12.)
 
18    (35 ILCS 17/10-20)
19    Sec. 10-20. Tax credit award. Subject to the conditions
20set forth in this Act, an applicant is entitled to a tax credit
21award as approved by the Department for qualifying Illinois
22labor expenditures and Illinois production spending for each
23tax year in which the applicant is awarded an accredited
24theater production certificate issued by the Department. The
25amount of tax credits awarded pursuant to this Act shall not

 

 

HB5759- 157 -LRB103 36173 HLH 66265 b

1exceed $2,000,000 in any State fiscal year, except that the
2amount of tax credits awarded pursuant to this Act for the
3State fiscal year ending on June 30, 2023 shall not exceed
4$4,000,000. For the State fiscal year ending on June 30, 2023,
5no more than $2,000,000 in credits may be awarded to
6accredited theater productions that are not commercial
7Broadway touring shows, and no more than $2,000,000 in credits
8may be awarded to commercial Broadway touring shows. Credits
9shall be awarded on a first-come, first-served basis.
10Notwithstanding the foregoing, if the amount of credits
11applied for in any fiscal year exceeds the amount authorized
12to be awarded under this Section, the excess credit amount
13shall be awarded in the next fiscal year in which credits
14remain available for award and shall be treated as having been
15applied for on the first day of that fiscal year.
16(Source: P.A. 102-700, eff. 4-19-22; 102-1112, eff. 12-21-22.)
 
17    (35 ILCS 17/10-25)
18    Sec. 10-25. Application for certification of accredited
19theater production. Any applicant proposing an accredited
20theater production located or planned to be located in
21Illinois may request an accredited theater production
22certificate by application to the Department.
23(Source: P.A. 97-636, eff. 6-1-12.)
 
24    (35 ILCS 17/10-30)

 

 

HB5759- 158 -LRB103 36173 HLH 66265 b

1    Sec. 10-30. Review of application for accredited theater
2production certificate.
3    (a) The Department shall issue an accredited theater
4production certificate to an applicant if it finds that by a
5preponderance the following conditions exist:
6        (1) the applicant intends to make the expenditure in
7    the State required for certification of the accredited
8    theater production;
9        (2) the applicant's accredited theater production is
10    economically sound and will benefit the people of the
11    State of Illinois by increasing opportunities for
12    employment and will strengthen the economy of Illinois;
13        (3) the following requirements related to the
14    implementation of a diversity plan have been met: (i) the
15    applicant has filed with the Department a diversity plan
16    outlining specific goals for hiring Illinois labor
17    expenditure eligible minority persons and women, as
18    defined in the Business Enterprise for Minorities, Women,
19    and Persons with Disabilities Act, and for using vendors
20    receiving certification under the Business Enterprise for
21    Minorities, Women, and Persons with Disabilities Act; (ii)
22    the Department has approved the plan as meeting the
23    requirements established by the Department and verified
24    that the applicant has met or made good faith efforts in
25    achieving those goals; and (iii) the Department has
26    adopted any rules that are necessary to ensure compliance

 

 

HB5759- 159 -LRB103 36173 HLH 66265 b

1    with the provisions set forth in this paragraph and
2    necessary to require that the applicant's plan reflects
3    the diversity of the population of this State;
4        (4) the applicant's accredited theater production
5    application indicates whether the applicant intends to
6    participate in training, education, and recruitment
7    programs that are organized in cooperation with Illinois
8    colleges and universities, labor organizations, and the
9    holders of accredited theater production certificates and
10    are designed to promote and encourage the training and
11    hiring of Illinois residents who represent the diversity
12    of Illinois;
13        (5) except for commercial Broadway touring shows
14    qualifying in the State fiscal year ending June 30, 2023,
15    if not for the tax credit award, the applicant's
16    accredited theater production would not occur in Illinois,
17    which may be demonstrated by any means, including, but not
18    limited to, evidence that: (i) the applicant, presenter,
19    owner, or licensee of the production rights has other
20    state or international location options at which to
21    present the production and could reasonably and
22    efficiently locate outside of the State, (ii) at least one
23    other state or nation could be considered for the
24    production, (iii) the receipt of the tax award credit is a
25    major factor in the decision of the applicant, presenter,
26    production owner or licensee as to where the production

 

 

HB5759- 160 -LRB103 36173 HLH 66265 b

1    will be presented and that without the tax credit award
2    the applicant likely would not create or retain jobs in
3    Illinois, or (iv) receipt of the tax credit award is
4    essential to the applicant's decision to create or retain
5    new jobs in the State; and
6        (6) the production will contribute to establishing the
7    State as a leader in the live performance industry;
8        (7) the production will increase the availability and
9    utilization of federal and State incentives in the
10    financing or operation of the production; and
11        (8) (6) the tax credit award will result in an overall
12    positive impact to the State, as determined by the
13    Department using the best available data.
14    (b) If any of the provisions in this Section conflict with
15any existing collective bargaining agreements, the terms and
16conditions of those collective bargaining agreements shall
17control.
18    (c) The Department shall act expeditiously regarding
19approval of applications for accredited theater production
20certificates so as to accommodate the pre-production work,
21booking, commencement of ticket sales, determination of
22performance dates, load in, and other matters relating to the
23live theater productions for which approval is sought.
24(Source: P.A. 102-1112, eff. 12-21-22.)
 
25    (35 ILCS 17/10-40)

 

 

HB5759- 161 -LRB103 36173 HLH 66265 b

1    Sec. 10-40. Issuance of Tax Credit Award Certificate.
2    (a) In order to qualify for a tax credit award under this
3Act, an applicant must file an application for each accredited
4theater production at each of the applicant's qualified
5production facilities, on forms prescribed by the Department,
6providing information necessary to calculate the tax credit
7award and any additional information as reasonably required by
8the Department.
9    (b) Upon satisfactory review of the application, the
10Department shall issue a tax credit award certificate stating
11the amount of the tax credit award to which the applicant is
12entitled for that tax year and shall contemporaneously notify
13the applicant and Illinois Department of Revenue in accordance
14with Section 222 of the Illinois Income Tax Act.
15(Source: P.A. 97-636, eff. 6-1-12.)
 
16    (35 ILCS 17/10-50)
17    Sec. 10-50. Live theater and music tax credit award
18program evaluation and reports.
19    (a) The Department's live theater and music tax credit
20award evaluation must include:
21        (i) an assessment of the effectiveness of the program
22    in creating and retaining new jobs in Illinois;
23        (ii) an assessment of the revenue impact of the
24    program;
25        (iii) in the discretion of the Department, a review of

 

 

HB5759- 162 -LRB103 36173 HLH 66265 b

1    the practices and experiences of other states or nations
2    with similar programs; and
3        (iv) an assessment of the overall success of the
4    program. The Department may make a recommendation to
5    extend, modify, or not extend the program based on the
6    evaluation.
7    (b) At the end of each fiscal quarter, the Department
8shall submit to the General Assembly a report that includes,
9without limitation:
10        (i) an assessment of the economic impact of the
11    program, including the number of jobs created and
12    retained, and whether the job positions are entry level,
13    management, vendor, or production related;
14        (ii) the amount of accredited theater production
15    spending brought to Illinois, including the amount of
16    spending and type of Illinois vendors hired in connection
17    with an accredited theater production; and
18        (iii) a determination of whether those receiving
19    qualifying Illinois labor expenditure salaries or wages
20    reflect the geographical, racial and ethnic, gender, and
21    income level diversity of the State of Illinois.
22    (c) At the end of each fiscal year, the Department shall
23submit to the General Assembly a report that includes, without
24limitation:
25        (i) the identification of each vendor that provided
26    goods or services that were included in an accredited

 

 

HB5759- 163 -LRB103 36173 HLH 66265 b

1    theater production's Illinois production spending;
2        (ii) a statement of the amount paid to each identified
3    vendor by the accredited theater production and whether
4    the vendor is a minority-owned or women-owned business as
5    defined in Section 2 of the Business Enterprise for
6    Minorities, Women, and Persons with Disabilities Act; and
7        (iii) a description of the steps taken by the
8    Department to encourage accredited theater productions to
9    use vendors who are minority-owned or women-owned
10    businesses.
11(Source: P.A. 100-391, eff. 8-25-17.)
 
12
ARTICLE 95. NON-ACCELERATION

 
13    Section 95-95. No acceleration or delay. Where this Act
14makes changes in a statute that is represented in this Act by
15text that is not yet or no longer in effect (for example, a
16Section represented by multiple versions), the use of that
17text does not accelerate or delay the taking effect of (i) the
18changes made by this Act or (ii) provisions derived from any
19other Public Act.