Sen. Celina Villanueva

Filed: 3/7/2024

 

 


 

 


 
10300SB3273sam001LRB103 39224 HLH 70758 a

1
AMENDMENT TO SENATE BILL 3273

2    AMENDMENT NO. ______. Amend Senate Bill 3273 by replacing
3everything after the enacting clause with the following:
 
4    "Section 1. Short title. This Act may be cited as the
5Workforce Development through Charitable Loan Repayment Act.
 
6    Section 5. Purpose. The purpose of this Act is to create a
7private sector incentive for qualified workers to work and
8live in eligible areas while also reducing the student debt
9burden of those workers.
 
10    Section 10. Definitions. As used in this Act:
11    "Commission" means the Illinois Student Assistance
12Commission.
13    "Full-time employee" means an individual who is employed
14for consideration for at least 35 hours each week.
15    "Program" means the Workforce Development Through

 

 

10300SB3273sam001- 2 -LRB103 39224 HLH 70758 a

1Charitable Loan Repayment Program established under this Act.
2    "Qualified community foundation" means a community
3foundation or similar publicly supported organization
4described in Section 170(b)(1)(A)(vi) of the Internal Revenue
5Code of 1986 that is organized or operating in this State and
6that substantially complies, as determined by the Commission,
7with the national standards for United States community
8foundations established by the National Council on
9Foundations.
10    "Qualified worker" means an individual who meets all of
11the following:
12        (1) the individual is a full-time employee of a
13    business that meets one or more of the following:
14            (A) the business is a qualified new business
15        venture that is registered with the Department of
16        Commerce and Economic Opportunity under Section 220 of
17        the Illinois Income Tax Act;
18            (B) the business is primarily engaged in a
19        targeted growth industry;
20            (C) the business is a minority-owned business, a
21        women-owned business, or a business owned by a person
22        with a disability, as those terms are defined in the
23        Business Enterprise for Minorities, Women, and Persons
24        with Disabilities Act; or
25            (D) the business is a not-for-profit corporation,
26        as defined in the General Not For Profit Corporation

 

 

10300SB3273sam001- 3 -LRB103 39224 HLH 70758 a

1        Act of 1986;
2        (2) the individual is employed by the business
3    described in paragraph (1) at a job site that is located in
4    an Enterprise Zone, an Opportunity Zone, an underserved
5    area, or an area that has a bachelor's degree attainment
6    rate for the population that is below the State or
7    national average for the population, as determined by the
8    United States Census Bureau; and
9        (3) the individual (i) received an associate degree or
10    higher and has an outstanding balance due on a qualified
11    education loan, as defined in Section 221 of the Internal
12    Revenue Code, or (ii) accrued educational debt while
13    pursuing skilled trades and related schooling.
14    "Student loan repayment assistance" means grants or
15post-graduation scholarships made by a community foundation
16directly to a student loan servicer on behalf of a qualified
17worker.
18    "Targeted growth industry" means one or more of the
19following:
20        (1) advanced manufacturing;
21        (2) agribusiness and food processing;
22        (3) transportation distribution and logistics;
23        (4) life sciences and biotechnology;
24        (5) business and professional services; or
25        (6) energy.
26    "Underserved area" has the meaning given to that term in

 

 

10300SB3273sam001- 4 -LRB103 39224 HLH 70758 a

1Section 5-5 of the Economic Development for a Growing Economy
2Tax Credit Act.
 
3    Section 15. Establishment of the Program; advertisement.
4The Workforce Development through Charitable Loan Repayment
5Program is hereby created for the purpose of facilitating
6student loan repayment assistance for qualified workers. The
7Program shall be administered by qualified community
8foundations with the assistance of the Commission. The
9Commission shall advertise the program on its website.
 
10    Section 20. Applications. Each qualified community
11foundation shall establish an application process for
12qualified workers to receive student loan repayment assistance
13from the qualified community foundation in accordance with
14this Act and rules adopted for the implementation of this Act
15by the Commission. If necessary due to limited funds, the
16qualified community foundation shall give priority to
17applicants with a higher student debt-to-income ratio when
18awarding student loan repayment assistance under the Program.
 
19    Section 25. Eligibility; work requirement. Each individual
20qualified community foundation shall certify the eligibility
21of qualified workers to receive student loan repayment
22assistance and establish work requirements in accordance with
23this Act, rules adopted by the Commission, and the

 

 

10300SB3273sam001- 5 -LRB103 39224 HLH 70758 a

1requirements of the individual qualified community foundation.
 
2    Section 30. Administration; rules. Qualified community
3foundations shall administer the Program under this Act and
4shall issue to qualified workers any forms required by the
5Commission or the Department of Revenue. The Commission shall
6adopt rules for the Program's effective implementation, except
7that rules regarding the documentation necessary to deduct
8student loan repayment assistance from the worker's income
9under subparagraph (LL) of subsection (a) of Section 203 of
10the Illinois Income Tax Act shall be adopted by the Department
11of Revenue in consultation with the Commission. Individual
12qualified community foundations may impose requirements for
13participation in the Program, which shall not be inconsistent
14with this Act or the rules adopted by the Commission or the
15Department of Revenue in connection with this Act.
 
16    Section 35. Reporting. Each qualified community foundation
17shall submit an annual report to the Commission summarizing
18its loan repayment activity under the Program. Reports under
19this Section shall be submitted in the form and manner
20prescribed by the Commission.
 
21    Section 900. The Illinois Income Tax Act is amended by
22changing Section 203 as follows:
 

 

 

10300SB3273sam001- 6 -LRB103 39224 HLH 70758 a

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

 

 

10300SB3273sam001- 7 -LRB103 39224 HLH 70758 a

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

 

 

10300SB3273sam001- 8 -LRB103 39224 HLH 70758 a

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

 

 

10300SB3273sam001- 9 -LRB103 39224 HLH 70758 a

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

 

 

10300SB3273sam001- 10 -LRB103 39224 HLH 70758 a

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

 

 

10300SB3273sam001- 11 -LRB103 39224 HLH 70758 a

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

 

 

10300SB3273sam001- 12 -LRB103 39224 HLH 70758 a

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

 

 

10300SB3273sam001- 13 -LRB103 39224 HLH 70758 a

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

 

 

10300SB3273sam001- 14 -LRB103 39224 HLH 70758 a

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

 

 

10300SB3273sam001- 15 -LRB103 39224 HLH 70758 a

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

 

 

10300SB3273sam001- 16 -LRB103 39224 HLH 70758 a

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

 

 

10300SB3273sam001- 17 -LRB103 39224 HLH 70758 a

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

 

 

10300SB3273sam001- 18 -LRB103 39224 HLH 70758 a

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

 

 

10300SB3273sam001- 19 -LRB103 39224 HLH 70758 a

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

 

 

10300SB3273sam001- 20 -LRB103 39224 HLH 70758 a

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

 

 

10300SB3273sam001- 21 -LRB103 39224 HLH 70758 a

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

 

 

10300SB3273sam001- 22 -LRB103 39224 HLH 70758 a

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;

 

 

10300SB3273sam001- 23 -LRB103 39224 HLH 70758 a

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;

 

 

10300SB3273sam001- 24 -LRB103 39224 HLH 70758 a

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

 

 

10300SB3273sam001- 25 -LRB103 39224 HLH 70758 a

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

 

 

10300SB3273sam001- 26 -LRB103 39224 HLH 70758 a

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

 

 

10300SB3273sam001- 27 -LRB103 39224 HLH 70758 a

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

 

 

10300SB3273sam001- 28 -LRB103 39224 HLH 70758 a

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

 

 

10300SB3273sam001- 29 -LRB103 39224 HLH 70758 a

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

 

 

10300SB3273sam001- 30 -LRB103 39224 HLH 70758 a

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;

 

 

10300SB3273sam001- 31 -LRB103 39224 HLH 70758 a

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),

 

 

10300SB3273sam001- 32 -LRB103 39224 HLH 70758 a

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

 

 

10300SB3273sam001- 33 -LRB103 39224 HLH 70758 a

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

 

 

10300SB3273sam001- 34 -LRB103 39224 HLH 70758 a

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

 

 

10300SB3273sam001- 35 -LRB103 39224 HLH 70758 a

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

 

 

10300SB3273sam001- 36 -LRB103 39224 HLH 70758 a

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, 2025, if the taxpayer is a qualified
16        worker, as defined in the Workforce Development
17        through Charitable Loan Repayment Act, an amount equal
18        to the amount included in the taxpayer's federal
19        adjusted gross income that is attributable to student
20        loan repayment assistance received by the taxpayer
21        during the taxable year from a qualified community
22        foundation under the provisions of the Workforce
23        Development Through Charitable Loan Repayment Act.
24            This subparagraph (LL) is exempt from the
25        provisions of Section 250.
 

 

 

10300SB3273sam001- 37 -LRB103 39224 HLH 70758 a

1    (b) Corporations.
2        (1) In general. In the case of a corporation, base
3    income means an amount equal to the taxpayer's taxable
4    income for the taxable year as modified by paragraph (2).
5        (2) Modifications. The taxable income referred to in
6    paragraph (1) shall be modified by adding thereto the sum
7    of the following amounts:
8            (A) An amount equal to all amounts paid or accrued
9        to the taxpayer as interest and all distributions
10        received from regulated investment companies during
11        the taxable year to the extent excluded from gross
12        income in the computation of taxable income;
13            (B) An amount equal to the amount of tax imposed by
14        this Act to the extent deducted from gross income in
15        the computation of taxable income for the taxable
16        year;
17            (C) In the case of a regulated investment company,
18        an amount equal to the excess of (i) the net long-term
19        capital gain for the taxable year, over (ii) the
20        amount of the capital gain dividends designated as
21        such in accordance with Section 852(b)(3)(C) of the
22        Internal Revenue Code and any amount designated under
23        Section 852(b)(3)(D) of the Internal Revenue Code,
24        attributable to the taxable year (this amendatory Act
25        of 1995 (Public Act 89-89) is declarative of existing
26        law and is not a new enactment);

 

 

10300SB3273sam001- 38 -LRB103 39224 HLH 70758 a

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

 

 

10300SB3273sam001- 39 -LRB103 39224 HLH 70758 a

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

 

 

10300SB3273sam001- 40 -LRB103 39224 HLH 70758 a

1        the last day of the last tax year for which a
2        subtraction is allowed with respect to that property
3        under subparagraph (T) and for which the taxpayer was
4        allowed in any taxable year to make a subtraction
5        modification under subparagraph (T), then an amount
6        equal to that subtraction modification.
7            The taxpayer is required to make the addition
8        modification under this subparagraph only once with
9        respect to any one piece of property;
10            (E-12) An amount equal to the amount otherwise
11        allowed as a deduction in computing base income for
12        interest paid, accrued, or incurred, directly or
13        indirectly, (i) for taxable years ending on or after
14        December 31, 2004, to a foreign person who would be a
15        member of the same unitary business group but for the
16        fact the foreign person's business activity outside
17        the United States is 80% or more of the foreign
18        person's total business activity and (ii) for taxable
19        years ending on or after December 31, 2008, to a person
20        who would be a member of the same unitary business
21        group but for the fact that the person is prohibited
22        under Section 1501(a)(27) from being included in the
23        unitary business group because he or she is ordinarily
24        required to apportion business income under different
25        subsections of Section 304. The addition modification
26        required by this subparagraph shall be reduced to the

 

 

10300SB3273sam001- 41 -LRB103 39224 HLH 70758 a

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

 

 

10300SB3273sam001- 42 -LRB103 39224 HLH 70758 a

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

 

 

10300SB3273sam001- 43 -LRB103 39224 HLH 70758 a

1            Department and such regulations provide methods
2            and standards by which the Department will utilize
3            its authority under Section 404 of this Act;
4            (E-13) An amount equal to the amount of intangible
5        expenses and costs otherwise allowed as a deduction in
6        computing base income, and that were paid, accrued, or
7        incurred, directly or indirectly, (i) for taxable
8        years ending on or after December 31, 2004, to a
9        foreign person who would be a member of the same
10        unitary business group but for the fact that the
11        foreign person's business activity outside the United
12        States is 80% or more of that person's total business
13        activity and (ii) for taxable years ending on or after
14        December 31, 2008, to a person who would be a member of
15        the same unitary business group but for the fact that
16        the person is prohibited under Section 1501(a)(27)
17        from being included in the unitary business group
18        because he or she is ordinarily required to apportion
19        business income under different subsections of Section
20        304. The addition modification required by this
21        subparagraph shall be reduced to the extent that
22        dividends were included in base income of the unitary
23        group for the same taxable year and received by the
24        taxpayer or by a member of the taxpayer's unitary
25        business group (including amounts included in gross
26        income pursuant to Sections 951 through 964 of the

 

 

10300SB3273sam001- 44 -LRB103 39224 HLH 70758 a

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

 

 

10300SB3273sam001- 45 -LRB103 39224 HLH 70758 a

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

 

 

10300SB3273sam001- 46 -LRB103 39224 HLH 70758 a

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

 

 

10300SB3273sam001- 47 -LRB103 39224 HLH 70758 a

1        same taxable year and received by the taxpayer or by a
2        member of the taxpayer's unitary business group
3        (including amounts included in gross income under
4        Sections 951 through 964 of the Internal Revenue Code
5        and amounts included in gross income under Section 78
6        of the Internal Revenue Code) with respect to the
7        stock of the same person to whom the premiums and costs
8        were directly or indirectly paid, incurred, or
9        accrued. The preceding sentence does not apply to the
10        extent that the same dividends caused a reduction to
11        the addition modification required under Section
12        203(b)(2)(E-12) or Section 203(b)(2)(E-13) of this
13        Act;
14            (E-15) For taxable years beginning after December
15        31, 2008, any deduction for dividends paid by a
16        captive real estate investment trust that is allowed
17        to a real estate investment trust under Section
18        857(b)(2)(B) of the Internal Revenue Code for
19        dividends paid;
20            (E-16) An amount equal to the credit allowable to
21        the taxpayer under Section 218(a) of this Act,
22        determined without regard to Section 218(c) of this
23        Act;
24            (E-17) For taxable years ending on or after
25        December 31, 2017, an amount equal to the deduction
26        allowed under Section 199 of the Internal Revenue Code

 

 

10300SB3273sam001- 48 -LRB103 39224 HLH 70758 a

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

 

 

10300SB3273sam001- 49 -LRB103 39224 HLH 70758 a

1        under subparagraph (J), an amount equal to the sum of
2        all amounts disallowed as deductions by (i) Sections
3        171(a)(2) and 265(a)(2) and amounts disallowed as
4        interest expense by Section 291(a)(3) of the Internal
5        Revenue Code, and all amounts of expenses allocable to
6        interest and disallowed as deductions by Section
7        265(a)(1) of the Internal Revenue Code; and (ii) for
8        taxable years ending on or after August 13, 1999,
9        Sections 171(a)(2), 265, 280C, 291(a)(3), and
10        832(b)(5)(B)(i) of the Internal Revenue Code, plus,
11        for tax years ending on or after December 31, 2011,
12        amounts disallowed as deductions by Section 45G(e)(3)
13        of the Internal Revenue Code and, for taxable years
14        ending on or after December 31, 2008, any amount
15        included in gross income under Section 87 of the
16        Internal Revenue Code and the policyholders' share of
17        tax-exempt interest of a life insurance company under
18        Section 807(a)(2)(B) of the Internal Revenue Code (in
19        the case of a life insurance company with gross income
20        from a decrease in reserves for the tax year) or
21        Section 807(b)(1)(B) of the Internal Revenue Code (in
22        the case of a life insurance company allowed a
23        deduction for an increase in reserves for the tax
24        year); the provisions of this subparagraph are exempt
25        from the provisions of Section 250;
26            (J) An amount equal to all amounts included in

 

 

10300SB3273sam001- 50 -LRB103 39224 HLH 70758 a

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

 

 

10300SB3273sam001- 51 -LRB103 39224 HLH 70758 a

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

 

 

10300SB3273sam001- 52 -LRB103 39224 HLH 70758 a

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

 

 

10300SB3273sam001- 53 -LRB103 39224 HLH 70758 a

1        Section 170 of the Internal Revenue Code and (ii)
2        must, by its terms, be used for a project approved by
3        the Department of Commerce and Economic Opportunity
4        under Section 11 of the Illinois Enterprise Zone Act
5        or under Section 10-10 of the River Edge Redevelopment
6        Zone Act. This subparagraph (N) is exempt from the
7        provisions of Section 250;
8            (O) An amount equal to: (i) 85% for taxable years
9        ending on or before December 31, 1992, or, a
10        percentage equal to the percentage allowable under
11        Section 243(a)(1) of the Internal Revenue Code of 1986
12        for taxable years ending after December 31, 1992, of
13        the amount by which dividends included in taxable
14        income and received from a corporation that is not
15        created or organized under the laws of the United
16        States or any state or political subdivision thereof,
17        including, for taxable years ending on or after
18        December 31, 1988, dividends received or deemed
19        received or paid or deemed paid under Sections 951
20        through 965 of the Internal Revenue Code, exceed the
21        amount of the modification provided under subparagraph
22        (G) of paragraph (2) of this subsection (b) which is
23        related to such dividends, and including, for taxable
24        years ending on or after December 31, 2008, dividends
25        received from a captive real estate investment trust;
26        plus (ii) 100% of the amount by which dividends,

 

 

10300SB3273sam001- 54 -LRB103 39224 HLH 70758 a

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

 

 

10300SB3273sam001- 55 -LRB103 39224 HLH 70758 a

1            (Q) An amount equal to the amount of the deduction
2        used to compute the federal income tax credit for
3        restoration of substantial amounts held under claim of
4        right for the taxable year pursuant to Section 1341 of
5        the Internal Revenue Code;
6            (R) On and after July 20, 1999, in the case of an
7        attorney-in-fact with respect to whom an interinsurer
8        or a reciprocal insurer has made the election under
9        Section 835 of the Internal Revenue Code, 26 U.S.C.
10        835, an amount equal to the excess, if any, of the
11        amounts paid or incurred by that interinsurer or
12        reciprocal insurer in the taxable year to the
13        attorney-in-fact over the deduction allowed to that
14        interinsurer or reciprocal insurer with respect to the
15        attorney-in-fact under Section 835(b) of the Internal
16        Revenue Code for the taxable year; the provisions of
17        this subparagraph are exempt from the provisions of
18        Section 250;
19            (S) For taxable years ending on or after December
20        31, 1997, in the case of a Subchapter S corporation, an
21        amount equal to all amounts of income allocable to a
22        shareholder subject to the Personal Property Tax
23        Replacement Income Tax imposed by subsections (c) and
24        (d) of Section 201 of this Act, including amounts
25        allocable to organizations exempt from federal income
26        tax by reason of Section 501(a) of the Internal

 

 

10300SB3273sam001- 56 -LRB103 39224 HLH 70758 a

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

 

 

10300SB3273sam001- 57 -LRB103 39224 HLH 70758 a

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

 

 

10300SB3273sam001- 58 -LRB103 39224 HLH 70758 a

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

 

 

10300SB3273sam001- 59 -LRB103 39224 HLH 70758 a

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

 

 

10300SB3273sam001- 60 -LRB103 39224 HLH 70758 a

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

 

 

10300SB3273sam001- 61 -LRB103 39224 HLH 70758 a

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

 

 

10300SB3273sam001- 62 -LRB103 39224 HLH 70758 a

1        Section 250;
2            (Z) The difference between the nondeductible
3        controlled foreign corporation dividends under Section
4        965(e)(3) of the Internal Revenue Code over the
5        taxable income of the taxpayer, computed without
6        regard to Section 965(e)(2)(A) of the Internal Revenue
7        Code, and without regard to any net operating loss
8        deduction. This subparagraph (Z) is exempt from the
9        provisions of Section 250; and
10            (AA) For taxable years beginning on or after
11        January 1, 2023, for any cannabis establishment
12        operating in this State and licensed under the
13        Cannabis Regulation and Tax Act or any cannabis
14        cultivation center or medical cannabis dispensing
15        organization operating in this State and licensed
16        under the Compassionate Use of Medical Cannabis
17        Program Act, an amount equal to the deductions that
18        were disallowed under Section 280E of the Internal
19        Revenue Code for the taxable year and that would not be
20        added back under this subsection. The provisions of
21        this subparagraph (AA) are exempt from the provisions
22        of Section 250.
23        (3) Special rule. For purposes of paragraph (2)(A),
24    "gross income" in the case of a life insurance company,
25    for tax years ending on and after December 31, 1994, and
26    prior to December 31, 2011, shall mean the gross

 

 

10300SB3273sam001- 63 -LRB103 39224 HLH 70758 a

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

 

 

10300SB3273sam001- 64 -LRB103 39224 HLH 70758 a

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

 

 

10300SB3273sam001- 65 -LRB103 39224 HLH 70758 a

1            December 31, 1986 shall not exceed the amount of
2            such carryback or carryforward;
3            For taxable years in which there is a net
4        operating loss carryback or carryforward from more
5        than one other taxable year ending prior to December
6        31, 1986, the addition modification provided in this
7        subparagraph (E) shall be the sum of the amounts
8        computed independently under the preceding provisions
9        of this subparagraph (E) for each such taxable year;
10            (F) For taxable years ending on or after January
11        1, 1989, an amount equal to the tax deducted pursuant
12        to Section 164 of the Internal Revenue Code if the
13        trust or estate is claiming the same tax for purposes
14        of the Illinois foreign tax credit under Section 601
15        of this Act;
16            (G) An amount equal to the amount of the capital
17        gain deduction allowable under the Internal Revenue
18        Code, to the extent deducted from gross income in the
19        computation of taxable income;
20            (G-5) For taxable years ending after December 31,
21        1997, an amount equal to any eligible remediation
22        costs that the trust or estate deducted in computing
23        adjusted gross income and for which the trust or
24        estate claims a credit under subsection (l) of Section
25        201;
26            (G-10) For taxable years 2001 and thereafter, an

 

 

10300SB3273sam001- 66 -LRB103 39224 HLH 70758 a

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; and
5            (G-11) 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 (G-10), then
9        an amount equal to the aggregate amount of the
10        deductions taken in all taxable years under
11        subparagraph (R) 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 (R) and for which the taxpayer was
16        allowed in any taxable year to make a subtraction
17        modification under subparagraph (R), 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            (G-12) 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

 

 

10300SB3273sam001- 67 -LRB103 39224 HLH 70758 a

1        member of the same unitary business group but for the
2        fact that the foreign person's business activity
3        outside 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 pursuant to Sections 951
18        through 964 of the Internal Revenue Code and amounts
19        included in gross income under Section 78 of the
20        Internal Revenue Code) with respect to the stock of
21        the same person to whom the interest was paid,
22        accrued, or 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

 

 

10300SB3273sam001- 68 -LRB103 39224 HLH 70758 a

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

 

 

10300SB3273sam001- 69 -LRB103 39224 HLH 70758 a

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            (G-13) 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

 

 

10300SB3273sam001- 70 -LRB103 39224 HLH 70758 a

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 pursuant to Sections 951 through 964 of the
13        Internal Revenue Code and amounts included in gross
14        income under Section 78 of the Internal Revenue Code)
15        with respect to the stock of the same person to whom
16        the intangible expenses and costs were directly or
17        indirectly paid, incurred, or accrued. The preceding
18        sentence shall not apply to the extent that the same
19        dividends caused a reduction to the addition
20        modification required under Section 203(c)(2)(G-12) of
21        this Act. As used in this subparagraph, the term
22        "intangible expenses and costs" includes: (1)
23        expenses, losses, and costs for or related to the
24        direct or indirect acquisition, use, maintenance or
25        management, ownership, sale, exchange, or any other
26        disposition of intangible property; (2) losses

 

 

10300SB3273sam001- 71 -LRB103 39224 HLH 70758 a

1        incurred, directly or indirectly, from factoring
2        transactions or discounting transactions; (3) royalty,
3        patent, technical, and copyright fees; (4) licensing
4        fees; and (5) other similar expenses and costs. For
5        purposes of this subparagraph, "intangible property"
6        includes patents, patent applications, trade names,
7        trademarks, service marks, copyrights, mask works,
8        trade secrets, and 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

 

 

10300SB3273sam001- 72 -LRB103 39224 HLH 70758 a

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            (G-14) For taxable years ending on or after
26        December 31, 2008, an amount equal to the amount of

 

 

10300SB3273sam001- 73 -LRB103 39224 HLH 70758 a

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(c)(2)(G-12) or Section 203(c)(2)(G-13) of this
25        Act;
26            (G-15) An amount equal to the credit allowable to

 

 

10300SB3273sam001- 74 -LRB103 39224 HLH 70758 a

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

 

 

10300SB3273sam001- 75 -LRB103 39224 HLH 70758 a

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

 

 

10300SB3273sam001- 76 -LRB103 39224 HLH 70758 a

1            (M) An amount equal to those dividends included in
2        such total which were paid by a corporation which
3        conducts business operations in a River Edge
4        Redevelopment Zone or zones created under the River
5        Edge Redevelopment Zone Act and conducts substantially
6        all of its operations in a River Edge Redevelopment
7        Zone or zones. This subparagraph (M) is exempt from
8        the provisions of Section 250;
9            (N) An amount equal to any contribution made to a
10        job training project established pursuant to the Tax
11        Increment Allocation Redevelopment Act;
12            (O) An amount equal to those dividends included in
13        such total that were paid by a corporation that
14        conducts business operations in a federally designated
15        Foreign Trade Zone or Sub-Zone and that is designated
16        a High Impact Business located in Illinois; provided
17        that dividends eligible for the deduction provided in
18        subparagraph (M) of paragraph (2) of this subsection
19        shall not be eligible for the deduction provided under
20        this subparagraph (O);
21            (P) An amount equal to the amount of the deduction
22        used to compute the federal income tax credit for
23        restoration of substantial amounts held under claim of
24        right for the taxable year pursuant to Section 1341 of
25        the Internal Revenue Code;
26            (Q) For taxable year 1999 and thereafter, an

 

 

10300SB3273sam001- 77 -LRB103 39224 HLH 70758 a

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

 

 

10300SB3273sam001- 78 -LRB103 39224 HLH 70758 a

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

 

 

10300SB3273sam001- 79 -LRB103 39224 HLH 70758 a

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

 

 

10300SB3273sam001- 80 -LRB103 39224 HLH 70758 a

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

 

 

10300SB3273sam001- 81 -LRB103 39224 HLH 70758 a

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

 

 

10300SB3273sam001- 82 -LRB103 39224 HLH 70758 a

1        who would be a member of the same unitary business
2        group but for the fact that the person is prohibited
3        under Section 1501(a)(27) from being included in the
4        unitary business group because he or she is ordinarily
5        required to apportion business income under different
6        subsections of Section 304, but not to exceed the
7        addition modification required to be made for the same
8        taxable year under Section 203(c)(2)(G-12) for
9        interest paid, accrued, or incurred, directly or
10        indirectly, to the same person. This subparagraph (U)
11        is exempt from the provisions of Section 250;
12            (V) An amount equal to the income from intangible
13        property taken into account for the taxable year (net
14        of the 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

 

 

10300SB3273sam001- 83 -LRB103 39224 HLH 70758 a

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

 

 

10300SB3273sam001- 84 -LRB103 39224 HLH 70758 a

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

 

 

10300SB3273sam001- 85 -LRB103 39224 HLH 70758 a

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

 

 

10300SB3273sam001- 86 -LRB103 39224 HLH 70758 a

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

 

 

10300SB3273sam001- 87 -LRB103 39224 HLH 70758 a

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

 

 

10300SB3273sam001- 88 -LRB103 39224 HLH 70758 a

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

 

 

10300SB3273sam001- 89 -LRB103 39224 HLH 70758 a

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

 

 

10300SB3273sam001- 90 -LRB103 39224 HLH 70758 a

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

 

 

10300SB3273sam001- 91 -LRB103 39224 HLH 70758 a

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

 

 

10300SB3273sam001- 92 -LRB103 39224 HLH 70758 a

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

 

 

10300SB3273sam001- 93 -LRB103 39224 HLH 70758 a

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

 

 

10300SB3273sam001- 94 -LRB103 39224 HLH 70758 a

1        extent that the same dividends caused a reduction to
2        the addition modification required under Section
3        203(d)(2)(D-7) or Section 203(d)(2)(D-8) of this Act;
4            (D-10) An amount equal to the credit allowable to
5        the taxpayer under Section 218(a) of this Act,
6        determined without regard to Section 218(c) of this
7        Act;
8            (D-11) For taxable years ending on or after
9        December 31, 2017, an amount equal to the deduction
10        allowed under Section 199 of the Internal Revenue Code
11        for the taxable year;
12    and by deducting from the total so obtained the following
13    amounts:
14            (E) The valuation limitation amount;
15            (F) An amount equal to the amount of any tax
16        imposed by this Act which was refunded to the taxpayer
17        and included in such total for the taxable year;
18            (G) An amount equal to all amounts included in
19        taxable income as modified by subparagraphs (A), (B),
20        (C) and (D) which are exempt from taxation by this
21        State either by reason of its statutes or Constitution
22        or by reason of the Constitution, treaties or statutes
23        of the United States; provided that, in the case of any
24        statute of this State that exempts income derived from
25        bonds or other obligations from the tax imposed under
26        this Act, the amount exempted shall be the interest

 

 

10300SB3273sam001- 95 -LRB103 39224 HLH 70758 a

1        net of bond premium amortization;
2            (H) Any income of the partnership which
3        constitutes personal service income as defined in
4        Section 1348(b)(1) of the Internal Revenue Code (as in
5        effect December 31, 1981) or a reasonable allowance
6        for compensation paid or accrued for services rendered
7        by partners to the partnership, whichever is greater;
8        this subparagraph (H) is exempt from the provisions of
9        Section 250;
10            (I) An amount equal to all amounts of income
11        distributable to an entity subject to the Personal
12        Property Tax Replacement Income Tax imposed by
13        subsections (c) and (d) of Section 201 of this Act
14        including amounts distributable to organizations
15        exempt from federal income tax by reason of Section
16        501(a) of the Internal Revenue Code; this subparagraph
17        (I) is exempt from the provisions of Section 250;
18            (J) With the exception of any amounts subtracted
19        under subparagraph (G), an amount equal to the sum of
20        all amounts disallowed as deductions by (i) Sections
21        171(a)(2) and 265(a)(2) of the Internal Revenue Code,
22        and all amounts of expenses allocable to interest and
23        disallowed as deductions by Section 265(a)(1) of the
24        Internal Revenue Code; and (ii) for taxable years
25        ending on or after August 13, 1999, Sections
26        171(a)(2), 265, 280C, and 832(b)(5)(B)(i) of the

 

 

10300SB3273sam001- 96 -LRB103 39224 HLH 70758 a

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

 

 

10300SB3273sam001- 97 -LRB103 39224 HLH 70758 a

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

 

 

10300SB3273sam001- 98 -LRB103 39224 HLH 70758 a

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

 

 

10300SB3273sam001- 99 -LRB103 39224 HLH 70758 a

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

 

 

10300SB3273sam001- 100 -LRB103 39224 HLH 70758 a

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

 

 

10300SB3273sam001- 101 -LRB103 39224 HLH 70758 a

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(d)(2)(D-7) for interest paid, accrued, or
11        incurred, directly or indirectly, to the same person.
12        This subparagraph (R) is exempt from Section 250;
13            (S) An amount equal to the income from intangible
14        property taken into account for the taxable year (net
15        of the deductions allocable thereto) with respect to
16        transactions with (i) a foreign person who would be a
17        member of the taxpayer's unitary business group but
18        for the fact that the foreign person's business
19        activity outside the United States is 80% or more of
20        that person's total business activity and (ii) for
21        taxable years ending on or after December 31, 2008, to
22        a person who would be a member of the same unitary
23        business group but for the fact that the person is
24        prohibited under Section 1501(a)(27) from being
25        included in the unitary business group because he or
26        she is ordinarily required to apportion business

 

 

10300SB3273sam001- 102 -LRB103 39224 HLH 70758 a

1        income under different subsections of Section 304, but
2        not to exceed the addition modification required to be
3        made for the same taxable year under Section
4        203(d)(2)(D-8) for intangible expenses and costs paid,
5        accrued, or incurred, directly or indirectly, to the
6        same person. This subparagraph (S) is exempt from
7        Section 250;
8            (T) 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(d)(2)(D-9), 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        (T), 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 (T). This
22        subparagraph (T) is exempt from the provisions of
23        Section 250; and
24            (U) For taxable years beginning on or after
25        January 1, 2023, for any cannabis establishment
26        operating in this State and licensed under the

 

 

10300SB3273sam001- 103 -LRB103 39224 HLH 70758 a

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

 

 

10300SB3273sam001- 104 -LRB103 39224 HLH 70758 a

1    for the taxable year. For taxable years ending prior to
2    December 31, 1986, taxable income may never be an amount
3    in excess of the net operating loss for the taxable year as
4    defined in subsections (c) and (d) of Section 172 of the
5    Internal Revenue Code, provided that when taxable income
6    of a corporation (other than a Subchapter S corporation),
7    trust, or estate is less than zero and addition
8    modifications, other than those provided by subparagraph
9    (E) of paragraph (2) of subsection (b) for corporations or
10    subparagraph (E) of paragraph (2) of subsection (c) for
11    trusts and estates, exceed subtraction modifications, an
12    addition modification must be made under those
13    subparagraphs for any other taxable year to which the
14    taxable income less than zero (net operating loss) is
15    applied under Section 172 of the Internal Revenue Code or
16    under subparagraph (E) of paragraph (2) of this subsection
17    (e) applied in conjunction with Section 172 of the
18    Internal Revenue Code.
19        (2) Special rule. For purposes of paragraph (1) of
20    this subsection, the taxable income properly reportable
21    for federal income tax purposes shall mean:
22            (A) Certain life insurance companies. In the case
23        of a life insurance company subject to the tax imposed
24        by Section 801 of the Internal Revenue Code, life
25        insurance company taxable income, plus the amount of
26        distribution from pre-1984 policyholder surplus

 

 

10300SB3273sam001- 105 -LRB103 39224 HLH 70758 a

1        accounts as calculated under Section 815a of the
2        Internal Revenue Code;
3            (B) Certain other insurance companies. In the case
4        of mutual insurance companies subject to the tax
5        imposed by Section 831 of the Internal Revenue Code,
6        insurance company taxable income;
7            (C) Regulated investment companies. In the case of
8        a regulated investment company subject to the tax
9        imposed by Section 852 of the Internal Revenue Code,
10        investment company taxable income;
11            (D) Real estate investment trusts. In the case of
12        a real estate investment trust subject to the tax
13        imposed by Section 857 of the Internal Revenue Code,
14        real estate investment trust taxable income;
15            (E) Consolidated corporations. In the case of a
16        corporation which is a member of an affiliated group
17        of corporations filing a consolidated income tax
18        return for the taxable year for federal income tax
19        purposes, taxable income determined as if such
20        corporation had filed a separate return for federal
21        income tax purposes for the taxable year and each
22        preceding taxable year for which it was a member of an
23        affiliated group. For purposes of this subparagraph,
24        the taxpayer's separate taxable income shall be
25        determined as if the election provided by Section
26        243(b)(2) of the Internal Revenue Code had been in

 

 

10300SB3273sam001- 106 -LRB103 39224 HLH 70758 a

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

 

 

10300SB3273sam001- 107 -LRB103 39224 HLH 70758 a

1        Department shall adopt rules setting forth
2        requirements for documenting the elections and any
3        resulting Illinois net loss and the standards to be
4        used by the Director in evaluating requests to revoke
5        elections. Public Act 96-932 is declaratory of
6        existing law;
7            (G) Subchapter S corporations. In the case of: (i)
8        a Subchapter S corporation for which there is in
9        effect an election for the taxable year under Section
10        1362 of the Internal Revenue Code, the taxable income
11        of such corporation determined in accordance with
12        Section 1363(b) of the Internal Revenue Code, except
13        that taxable income shall take into account those
14        items which are required by Section 1363(b)(1) of the
15        Internal Revenue Code to be separately stated; and
16        (ii) a Subchapter S corporation for which there is in
17        effect a federal election to opt out of the provisions
18        of the Subchapter S Revision Act of 1982 and have
19        applied instead the prior federal Subchapter S rules
20        as in effect on July 1, 1982, the taxable income of
21        such corporation determined in accordance with the
22        federal Subchapter S rules as in effect on July 1,
23        1982; and
24            (H) Partnerships. In the case of a partnership,
25        taxable income determined in accordance with Section
26        703 of the Internal Revenue Code, except that taxable

 

 

10300SB3273sam001- 108 -LRB103 39224 HLH 70758 a

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

 

 

10300SB3273sam001- 109 -LRB103 39224 HLH 70758 a

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

 

 

10300SB3273sam001- 110 -LRB103 39224 HLH 70758 a

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

 

 

10300SB3273sam001- 111 -LRB103 39224 HLH 70758 a

1such taxable year, whether in respect of property values as of
2August 1, 1969 or otherwise.
3(Source: P.A. 102-16, eff. 6-17-21; 102-558, eff. 8-20-21;
4102-658, eff. 8-27-21; 102-813, eff. 5-13-22; 102-1112, eff.
512-21-22; 103-8, eff. 6-7-23; 103-478, eff. 1-1-24; revised
69-26-23.)
 
7    Section 999. Effective date. This Act takes effect upon
8becoming law.".