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1 | AN ACT concerning taxes.
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2 | Be it enacted by the People of the State of Illinois,
| ||||||||||||||||||||||||||||||
3 | represented in the General Assembly:
| ||||||||||||||||||||||||||||||
4 | Section 5. The Illinois Income Tax Act is amended by | ||||||||||||||||||||||||||||||
5 | changing Sections 201, 204, and 901 and by adding Section 202.5 | ||||||||||||||||||||||||||||||
6 | as follows:
| ||||||||||||||||||||||||||||||
7 | (35 ILCS 5/201) (from Ch. 120, par. 2-201)
| ||||||||||||||||||||||||||||||
8 | Sec. 201. Tax Imposed.
| ||||||||||||||||||||||||||||||
9 | (a) In general. A tax measured by net income is hereby | ||||||||||||||||||||||||||||||
10 | imposed on every
individual, corporation, trust and estate for | ||||||||||||||||||||||||||||||
11 | each taxable year ending
after July 31, 1969 on the privilege | ||||||||||||||||||||||||||||||
12 | of earning or receiving income in or
as a resident of this | ||||||||||||||||||||||||||||||
13 | State. Such tax shall be in addition to all other
occupation or | ||||||||||||||||||||||||||||||
14 | privilege taxes imposed by this State or by any municipal
| ||||||||||||||||||||||||||||||
15 | corporation or political subdivision thereof.
| ||||||||||||||||||||||||||||||
16 | (b) Rates. The tax imposed by subsection (a) of this | ||||||||||||||||||||||||||||||
17 | Section shall be
determined as follows, except as adjusted by | ||||||||||||||||||||||||||||||
18 | subsection (d-1):
| ||||||||||||||||||||||||||||||
19 | (1) In the case of an individual, trust or estate, for | ||||||||||||||||||||||||||||||
20 | taxable years
ending prior to July 1, 1989, an amount equal | ||||||||||||||||||||||||||||||
21 | to 2 1/2% of the taxpayer's
net income for the taxable | ||||||||||||||||||||||||||||||
22 | year.
| ||||||||||||||||||||||||||||||
23 | (2) In the case of an individual, trust or estate, for | ||||||||||||||||||||||||||||||
24 | taxable years
beginning prior to July 1, 1989 and ending | ||||||||||||||||||||||||||||||
25 | after June 30, 1989, an amount
equal to the sum of (i) 2 | ||||||||||||||||||||||||||||||
26 | 1/2% of the taxpayer's net income for the period
prior to | ||||||||||||||||||||||||||||||
27 | July 1, 1989, as calculated under Section 202.3, and (ii) | ||||||||||||||||||||||||||||||
28 | 3% of the
taxpayer's net income for the period after June | ||||||||||||||||||||||||||||||
29 | 30, 1989, as calculated
under Section 202.3.
| ||||||||||||||||||||||||||||||
30 | (3) In the case of an individual, trust or estate, for | ||||||||||||||||||||||||||||||
31 | taxable years
beginning after June 30, 1989 and ending on | ||||||||||||||||||||||||||||||
32 | or before December 31, 2003 , an amount equal to 3% of the |
| |||||||
| |||||||
1 | taxpayer's net
income for the taxable year.
| ||||||
2 | (4) In the case of an individual, trust, or estate, for | ||||||
3 | taxable years
beginning prior to January 1, 2004 and ending | ||||||
4 | after December 31, 2003, an amount
equal to the sum of (i) | ||||||
5 | 3% of the taxpayer's net income for the period
prior to | ||||||
6 | January 1, 2004, as calculated under Section 202.5, and | ||||||
7 | (ii) 4% of the
taxpayer's net income for the period after | ||||||
8 | December 31, 2004, as calculated
under Section 202.5.
| ||||||
9 | (Blank) .
| ||||||
10 | (5) In the case of an individual, trust or estate, for | ||||||
11 | taxable years
beginning after December 31, 2003, an amount | ||||||
12 | equal to 4% of the taxpayer's net
income for the taxable | ||||||
13 | year.
(Blank) .
| ||||||
14 | (6) In the case of a corporation, for taxable years
| ||||||
15 | ending prior to July 1, 1989, an amount equal to 4% of the
| ||||||
16 | taxpayer's net income for the taxable year.
| ||||||
17 | (7) In the case of a corporation, for taxable years | ||||||
18 | beginning prior to
July 1, 1989 and ending after June 30, | ||||||
19 | 1989, an amount equal to the sum of
(i) 4% of the | ||||||
20 | taxpayer's net income for the period prior to July 1, 1989,
| ||||||
21 | as calculated under Section 202.3, and (ii) 4.8% of the | ||||||
22 | taxpayer's net
income for the period after June 30, 1989, | ||||||
23 | as calculated under Section
202.3.
| ||||||
24 | (8) In the case of a corporation, for taxable years | ||||||
25 | beginning after
June 30, 1989, an amount equal to 4.8% of | ||||||
26 | the taxpayer's net income for the
taxable year.
| ||||||
27 | (c) Personal Property Tax Replacement Income Tax.
| ||||||
28 | Beginning on July 1, 1979 and thereafter, in addition to such | ||||||
29 | income
tax, there is also hereby imposed the Personal Property | ||||||
30 | Tax Replacement
Income Tax measured by net income on every | ||||||
31 | corporation (including Subchapter
S corporations), partnership | ||||||
32 | and trust, for each taxable year ending after
June 30, 1979. | ||||||
33 | Such taxes are imposed on the privilege of earning or
receiving | ||||||
34 | income in or as a resident of this State. The Personal Property
| ||||||
35 | Tax Replacement Income Tax shall be in addition to the income | ||||||
36 | tax imposed
by subsections (a) and (b) of this Section and in |
| |||||||
| |||||||
1 | addition to all other
occupation or privilege taxes imposed by | ||||||
2 | this State or by any municipal
corporation or political | ||||||
3 | subdivision thereof.
| ||||||
4 | (d) Additional Personal Property Tax Replacement Income | ||||||
5 | Tax Rates.
The personal property tax replacement income tax | ||||||
6 | imposed by this subsection
and subsection (c) of this Section | ||||||
7 | in the case of a corporation, other
than a Subchapter S | ||||||
8 | corporation and except as adjusted by subsection (d-1),
shall | ||||||
9 | be an additional amount equal to
2.85% of such taxpayer's net | ||||||
10 | income for the taxable year, except that
beginning on January | ||||||
11 | 1, 1981, and thereafter, the rate of 2.85% specified
in this | ||||||
12 | subsection shall be reduced to 2.5%, and in the case of a
| ||||||
13 | partnership, trust or a Subchapter S corporation shall be an | ||||||
14 | additional
amount equal to 1.5% of such taxpayer's net income | ||||||
15 | for the taxable year.
| ||||||
16 | (d-1) Rate reduction for certain foreign insurers. In the | ||||||
17 | case of a
foreign insurer, as defined by Section 35A-5 of the | ||||||
18 | Illinois Insurance Code,
whose state or country of domicile | ||||||
19 | imposes on insurers domiciled in Illinois
a retaliatory tax | ||||||
20 | (excluding any insurer
whose premiums from reinsurance assumed | ||||||
21 | are 50% or more of its total insurance
premiums as determined | ||||||
22 | under paragraph (2) of subsection (b) of Section 304,
except | ||||||
23 | that for purposes of this determination premiums from | ||||||
24 | reinsurance do
not include premiums from inter-affiliate | ||||||
25 | reinsurance arrangements),
beginning with taxable years ending | ||||||
26 | on or after December 31, 1999,
the sum of
the rates of tax | ||||||
27 | imposed by subsections (b) and (d) shall be reduced (but not
| ||||||
28 | increased) to the rate at which the total amount of tax imposed | ||||||
29 | under this Act,
net of all credits allowed under this Act, | ||||||
30 | shall equal (i) the total amount of
tax that would be imposed | ||||||
31 | on the foreign insurer's net income allocable to
Illinois for | ||||||
32 | the taxable year by such foreign insurer's state or country of
| ||||||
33 | domicile if that net income were subject to all income taxes | ||||||
34 | and taxes
measured by net income imposed by such foreign | ||||||
35 | insurer's state or country of
domicile, net of all credits | ||||||
36 | allowed or (ii) a rate of zero if no such tax is
imposed on such |
| |||||||
| |||||||
1 | income by the foreign insurer's state of domicile.
For the | ||||||
2 | purposes of this subsection (d-1), an inter-affiliate includes | ||||||
3 | a
mutual insurer under common management.
| ||||||
4 | (1) For the purposes of subsection (d-1), in no event | ||||||
5 | shall the sum of the
rates of tax imposed by subsections | ||||||
6 | (b) and (d) be reduced below the rate at
which the sum of:
| ||||||
7 | (A) the total amount of tax imposed on such foreign | ||||||
8 | insurer under
this Act for a taxable year, net of all | ||||||
9 | credits allowed under this Act, plus
| ||||||
10 | (B) the privilege tax imposed by Section 409 of the | ||||||
11 | Illinois Insurance
Code, the fire insurance company | ||||||
12 | tax imposed by Section 12 of the Fire
Investigation | ||||||
13 | Act, and the fire department taxes imposed under | ||||||
14 | Section 11-10-1
of the Illinois Municipal Code,
| ||||||
15 | equals 1.25% for taxable years ending prior to December 31, | ||||||
16 | 2003, or
1.75% for taxable years ending on or after | ||||||
17 | December 31, 2003, of the net
taxable premiums written for | ||||||
18 | the taxable year,
as described by subsection (1) of Section | ||||||
19 | 409 of the Illinois Insurance Code.
This paragraph will in | ||||||
20 | no event increase the rates imposed under subsections
(b) | ||||||
21 | and (d).
| ||||||
22 | (2) Any reduction in the rates of tax imposed by this | ||||||
23 | subsection shall be
applied first against the rates imposed | ||||||
24 | by subsection (b) and only after the
tax imposed by | ||||||
25 | subsection (a) net of all credits allowed under this | ||||||
26 | Section
other than the credit allowed under subsection (i) | ||||||
27 | has been reduced to zero,
against the rates imposed by | ||||||
28 | subsection (d).
| ||||||
29 | This subsection (d-1) is exempt from the provisions of | ||||||
30 | Section 250.
| ||||||
31 | (e) Investment credit. A taxpayer shall be allowed a credit
| ||||||
32 | against the Personal Property Tax Replacement Income Tax for
| ||||||
33 | investment in qualified property.
| ||||||
34 | (1) A taxpayer shall be allowed a credit equal to .5% | ||||||
35 | of
the basis of qualified property placed in service during | ||||||
36 | the taxable year,
provided such property is placed in |
| |||||||
| |||||||
1 | service on or after
July 1, 1984. There shall be allowed an | ||||||
2 | additional credit equal
to .5% of the basis of qualified | ||||||
3 | property placed in service during the
taxable year, | ||||||
4 | provided such property is placed in service on or
after | ||||||
5 | July 1, 1986, and the taxpayer's base employment
within | ||||||
6 | Illinois has increased by 1% or more over the preceding | ||||||
7 | year as
determined by the taxpayer's employment records | ||||||
8 | filed with the
Illinois Department of Employment Security. | ||||||
9 | Taxpayers who are new to
Illinois shall be deemed to have | ||||||
10 | met the 1% growth in base employment for
the first year in | ||||||
11 | which they file employment records with the Illinois
| ||||||
12 | Department of Employment Security. The provisions added to | ||||||
13 | this Section by
Public Act 85-1200 (and restored by Public | ||||||
14 | Act 87-895) shall be
construed as declaratory of existing | ||||||
15 | law and not as a new enactment. If,
in any year, the | ||||||
16 | increase in base employment within Illinois over the
| ||||||
17 | preceding year is less than 1%, the additional credit shall | ||||||
18 | be limited to that
percentage times a fraction, the | ||||||
19 | numerator of which is .5% and the denominator
of which is | ||||||
20 | 1%, but shall not exceed .5%. The investment credit shall | ||||||
21 | not be
allowed to the extent that it would reduce a | ||||||
22 | taxpayer's liability in any tax
year below zero, nor may | ||||||
23 | any credit for qualified property be allowed for any
year | ||||||
24 | other than the year in which the property was placed in | ||||||
25 | service in
Illinois. For tax years ending on or after | ||||||
26 | December 31, 1987, and on or
before December 31, 1988, the | ||||||
27 | credit shall be allowed for the tax year in
which the | ||||||
28 | property is placed in service, or, if the amount of the | ||||||
29 | credit
exceeds the tax liability for that year, whether it | ||||||
30 | exceeds the original
liability or the liability as later | ||||||
31 | amended, such excess may be carried
forward and applied to | ||||||
32 | the tax liability of the 5 taxable years following
the | ||||||
33 | excess credit years if the taxpayer (i) makes investments | ||||||
34 | which cause
the creation of a minimum of 2,000 full-time | ||||||
35 | equivalent jobs in Illinois,
(ii) is located in an | ||||||
36 | enterprise zone established pursuant to the Illinois
|
| |||||||
| |||||||
1 | Enterprise Zone Act and (iii) is certified by the | ||||||
2 | Department of Commerce
and Community Affairs (now | ||||||
3 | Department of Commerce and Economic Opportunity) as | ||||||
4 | complying with the requirements specified in
clause (i) and | ||||||
5 | (ii) by July 1, 1986. The Department of Commerce and
| ||||||
6 | Community Affairs (now Department of Commerce and Economic | ||||||
7 | Opportunity) shall notify the Department of Revenue of all | ||||||
8 | such
certifications immediately. For tax years ending | ||||||
9 | after December 31, 1988,
the credit shall be allowed for | ||||||
10 | the tax year in which the property is
placed in service, | ||||||
11 | or, if the amount of the credit exceeds the tax
liability | ||||||
12 | for that year, whether it exceeds the original liability or | ||||||
13 | the
liability as later amended, such excess may be carried | ||||||
14 | forward and applied
to the tax liability of the 5 taxable | ||||||
15 | years following the excess credit
years. The credit shall | ||||||
16 | be applied to the earliest year for which there is
a | ||||||
17 | liability. If there is credit from more than one tax year | ||||||
18 | that is
available to offset a liability, earlier credit | ||||||
19 | shall be applied first.
| ||||||
20 | (2) The term "qualified property" means property | ||||||
21 | which:
| ||||||
22 | (A) is tangible, whether new or used, including | ||||||
23 | buildings and structural
components of buildings and | ||||||
24 | signs that are real property, but not including
land or | ||||||
25 | improvements to real property that are not a structural | ||||||
26 | component of a
building such as landscaping, sewer | ||||||
27 | lines, local access roads, fencing, parking
lots, and | ||||||
28 | other appurtenances;
| ||||||
29 | (B) is depreciable pursuant to Section 167 of the | ||||||
30 | Internal Revenue Code,
except that "3-year property" | ||||||
31 | as defined in Section 168(c)(2)(A) of that
Code is not | ||||||
32 | eligible for the credit provided by this subsection | ||||||
33 | (e);
| ||||||
34 | (C) is acquired by purchase as defined in Section | ||||||
35 | 179(d) of
the Internal Revenue Code;
| ||||||
36 | (D) is used in Illinois by a taxpayer who is |
| |||||||
| |||||||
1 | primarily engaged in
manufacturing, or in mining coal | ||||||
2 | or fluorite, or in retailing; and
| ||||||
3 | (E) has not previously been used in Illinois in | ||||||
4 | such a manner and by
such a person as would qualify for | ||||||
5 | the credit provided by this subsection
(e) or | ||||||
6 | subsection (f).
| ||||||
7 | (3) For purposes of this subsection (e), | ||||||
8 | "manufacturing" means
the material staging and production | ||||||
9 | of tangible personal property by
procedures commonly | ||||||
10 | regarded as manufacturing, processing, fabrication, or
| ||||||
11 | assembling which changes some existing material into new | ||||||
12 | shapes, new
qualities, or new combinations. For purposes of | ||||||
13 | this subsection
(e) the term "mining" shall have the same | ||||||
14 | meaning as the term "mining" in
Section 613(c) of the | ||||||
15 | Internal Revenue Code. For purposes of this subsection
(e), | ||||||
16 | the term "retailing" means the sale of tangible personal | ||||||
17 | property or
services rendered in conjunction with the sale | ||||||
18 | of tangible consumer goods
or commodities.
| ||||||
19 | (4) The basis of qualified property shall be the basis
| ||||||
20 | used to compute the depreciation deduction for federal | ||||||
21 | income tax purposes.
| ||||||
22 | (5) If the basis of the property for federal income tax | ||||||
23 | depreciation
purposes is increased after it has been placed | ||||||
24 | in service in Illinois by
the taxpayer, the amount of such | ||||||
25 | increase shall be deemed property placed
in service on the | ||||||
26 | date of such increase in basis.
| ||||||
27 | (6) The term "placed in service" shall have the same
| ||||||
28 | meaning as under Section 46 of the Internal Revenue Code.
| ||||||
29 | (7) If during any taxable year, any property ceases to
| ||||||
30 | be qualified property in the hands of the taxpayer within | ||||||
31 | 48 months after
being placed in service, or the situs of | ||||||
32 | any qualified property is
moved outside Illinois within 48 | ||||||
33 | months after being placed in service, the
Personal Property | ||||||
34 | Tax Replacement Income Tax for such taxable year shall be
| ||||||
35 | increased. Such increase shall be determined by (i) | ||||||
36 | recomputing the
investment credit which would have been |
| |||||||
| |||||||
1 | allowed for the year in which
credit for such property was | ||||||
2 | originally allowed by eliminating such
property from such | ||||||
3 | computation and, (ii) subtracting such recomputed credit
| ||||||
4 | from the amount of credit previously allowed. For the | ||||||
5 | purposes of this
paragraph (7), a reduction of the basis of | ||||||
6 | qualified property resulting
from a redetermination of the | ||||||
7 | purchase price shall be deemed a disposition
of qualified | ||||||
8 | property to the extent of such reduction.
| ||||||
9 | (8) Unless the investment credit is extended by law, | ||||||
10 | the
basis of qualified property shall not include costs | ||||||
11 | incurred after
December 31, 2003, except for costs incurred | ||||||
12 | pursuant to a binding
contract entered into on or before | ||||||
13 | December 31, 2003.
| ||||||
14 | (9) Each taxable year ending before December 31, 2000, | ||||||
15 | a partnership may
elect to pass through to its
partners the | ||||||
16 | credits to which the partnership is entitled under this | ||||||
17 | subsection
(e) for the taxable year. A partner may use the | ||||||
18 | credit allocated to him or her
under this paragraph only | ||||||
19 | against the tax imposed in subsections (c) and (d) of
this | ||||||
20 | Section. If the partnership makes that election, those | ||||||
21 | credits shall be
allocated among the partners in the | ||||||
22 | partnership in accordance with the rules
set forth in | ||||||
23 | Section 704(b) of the Internal Revenue Code, and the rules
| ||||||
24 | promulgated under that Section, and the allocated amount of | ||||||
25 | the credits shall
be allowed to the partners for that | ||||||
26 | taxable year. The partnership shall make
this election on | ||||||
27 | its Personal Property Tax Replacement Income Tax return for
| ||||||
28 | that taxable year. The election to pass through the credits | ||||||
29 | shall be
irrevocable.
| ||||||
30 | For taxable years ending on or after December 31, 2000, | ||||||
31 | a
partner that qualifies its
partnership for a subtraction | ||||||
32 | under subparagraph (I) of paragraph (2) of
subsection (d) | ||||||
33 | of Section 203 or a shareholder that qualifies a Subchapter | ||||||
34 | S
corporation for a subtraction under subparagraph (S) of | ||||||
35 | paragraph (2) of
subsection (b) of Section 203 shall be | ||||||
36 | allowed a credit under this subsection
(e) equal to its |
| |||||||
| |||||||
1 | share of the credit earned under this subsection (e) during
| ||||||
2 | the taxable year by the partnership or Subchapter S | ||||||
3 | corporation, determined in
accordance with the | ||||||
4 | determination of income and distributive share of
income | ||||||
5 | under Sections 702 and 704 and Subchapter S of the Internal | ||||||
6 | Revenue
Code. This paragraph is exempt from the provisions | ||||||
7 | of Section 250.
| ||||||
8 | (f) Investment credit; Enterprise Zone.
| ||||||
9 | (1) A taxpayer shall be allowed a credit against the | ||||||
10 | tax imposed
by subsections (a) and (b) of this Section for | ||||||
11 | investment in qualified
property which is placed in service | ||||||
12 | in an Enterprise Zone created
pursuant to the Illinois | ||||||
13 | Enterprise Zone Act. For partners, shareholders
of | ||||||
14 | Subchapter S corporations, and owners of limited liability | ||||||
15 | companies,
if the liability company is treated as a | ||||||
16 | partnership for purposes of
federal and State income | ||||||
17 | taxation, there shall be allowed a credit under
this | ||||||
18 | subsection (f) to be determined in accordance with the | ||||||
19 | determination
of income and distributive share of income | ||||||
20 | under Sections 702 and 704 and
Subchapter S of the Internal | ||||||
21 | Revenue Code. The credit shall be .5% of the
basis for such | ||||||
22 | property. The credit shall be available only in the taxable
| ||||||
23 | year in which the property is placed in service in the | ||||||
24 | Enterprise Zone and
shall not be allowed to the extent that | ||||||
25 | it would reduce a taxpayer's
liability for the tax imposed | ||||||
26 | by subsections (a) and (b) of this Section to
below zero. | ||||||
27 | For tax years ending on or after December 31, 1985, the | ||||||
28 | credit
shall be allowed for the tax year in which the | ||||||
29 | property is placed in
service, or, if the amount of the | ||||||
30 | credit exceeds the tax liability for that
year, whether it | ||||||
31 | exceeds the original liability or the liability as later
| ||||||
32 | amended, such excess may be carried forward and applied to | ||||||
33 | the tax
liability of the 5 taxable years following the | ||||||
34 | excess credit year.
The credit shall be applied to the | ||||||
35 | earliest year for which there is a
liability. If there is | ||||||
36 | credit from more than one tax year that is available
to |
| |||||||
| |||||||
1 | offset a liability, the credit accruing first in time shall | ||||||
2 | be applied
first.
| ||||||
3 | (2) The term qualified property means property which:
| ||||||
4 | (A) is tangible, whether new or used, including | ||||||
5 | buildings and
structural components of buildings;
| ||||||
6 | (B) is depreciable pursuant to Section 167 of the | ||||||
7 | Internal Revenue
Code, except that "3-year property" | ||||||
8 | as defined in Section 168(c)(2)(A) of
that Code is not | ||||||
9 | eligible for the credit provided by this subsection | ||||||
10 | (f);
| ||||||
11 | (C) is acquired by purchase as defined in Section | ||||||
12 | 179(d) of
the Internal Revenue Code;
| ||||||
13 | (D) is used in the Enterprise Zone by the taxpayer; | ||||||
14 | and
| ||||||
15 | (E) has not been previously used in Illinois in | ||||||
16 | such a manner and by
such a person as would qualify for | ||||||
17 | the credit provided by this subsection
(f) or | ||||||
18 | subsection (e).
| ||||||
19 | (3) The basis of qualified property shall be the basis | ||||||
20 | used to compute
the depreciation deduction for federal | ||||||
21 | income tax purposes.
| ||||||
22 | (4) If the basis of the property for federal income tax | ||||||
23 | depreciation
purposes is increased after it has been placed | ||||||
24 | in service in the Enterprise
Zone by the taxpayer, the | ||||||
25 | amount of such increase shall be deemed property
placed in | ||||||
26 | service on the date of such increase in basis.
| ||||||
27 | (5) The term "placed in service" shall have the same | ||||||
28 | meaning as under
Section 46 of the Internal Revenue Code.
| ||||||
29 | (6) If during any taxable year, any property ceases to | ||||||
30 | be qualified
property in the hands of the taxpayer within | ||||||
31 | 48 months after being placed
in service, or the situs of | ||||||
32 | any qualified property is moved outside the
Enterprise Zone | ||||||
33 | within 48 months after being placed in service, the tax
| ||||||
34 | imposed under subsections (a) and (b) of this Section for | ||||||
35 | such taxable year
shall be increased. Such increase shall | ||||||
36 | be determined by (i) recomputing
the investment credit |
| |||||||
| |||||||
1 | which would have been allowed for the year in which
credit | ||||||
2 | for such property was originally allowed by eliminating | ||||||
3 | such
property from such computation, and (ii) subtracting | ||||||
4 | such recomputed credit
from the amount of credit previously | ||||||
5 | allowed. For the purposes of this
paragraph (6), a | ||||||
6 | reduction of the basis of qualified property resulting
from | ||||||
7 | a redetermination of the purchase price shall be deemed a | ||||||
8 | disposition
of qualified property to the extent of such | ||||||
9 | reduction.
| ||||||
10 | (g) Jobs Tax Credit; Enterprise Zone and Foreign Trade | ||||||
11 | Zone or Sub-Zone.
| ||||||
12 | (1) A taxpayer conducting a trade or business in an | ||||||
13 | enterprise zone
or a High Impact Business designated by the | ||||||
14 | Department of Commerce and
Economic Opportunity
Community | ||||||
15 | Affairs conducting a trade or business in a federally | ||||||
16 | designated
Foreign Trade Zone or Sub-Zone shall be allowed | ||||||
17 | a credit against the tax
imposed by subsections (a) and (b) | ||||||
18 | of this Section in the amount of $500
per eligible employee | ||||||
19 | hired to work in the zone during the taxable year.
| ||||||
20 | (2) To qualify for the credit:
| ||||||
21 | (A) the taxpayer must hire 5 or more eligible | ||||||
22 | employees to work in an
enterprise zone or federally | ||||||
23 | designated Foreign Trade Zone or Sub-Zone
during the | ||||||
24 | taxable year;
| ||||||
25 | (B) the taxpayer's total employment within the | ||||||
26 | enterprise zone or
federally designated Foreign Trade | ||||||
27 | Zone or Sub-Zone must
increase by 5 or more full-time | ||||||
28 | employees beyond the total employed in that
zone at the | ||||||
29 | end of the previous tax year for which a jobs tax
| ||||||
30 | credit under this Section was taken, or beyond the | ||||||
31 | total employed by the
taxpayer as of December 31, 1985, | ||||||
32 | whichever is later; and
| ||||||
33 | (C) the eligible employees must be employed 180 | ||||||
34 | consecutive days in
order to be deemed hired for | ||||||
35 | purposes of this subsection.
| ||||||
36 | (3) An "eligible employee" means an employee who is:
|
| |||||||
| |||||||
1 | (A) Certified by the Department of Commerce and | ||||||
2 | Economic Opportunity
Community Affairs
as "eligible | ||||||
3 | for services" pursuant to regulations promulgated in
| ||||||
4 | accordance with Title II of the Job Training | ||||||
5 | Partnership Act, Training
Services for the | ||||||
6 | Disadvantaged or Title III of the Job Training | ||||||
7 | Partnership
Act, Employment and Training Assistance | ||||||
8 | for Dislocated Workers Program.
| ||||||
9 | (B) Hired after the enterprise zone or federally | ||||||
10 | designated Foreign
Trade Zone or Sub-Zone was | ||||||
11 | designated or the trade or
business was located in that | ||||||
12 | zone, whichever is later.
| ||||||
13 | (C) Employed in the enterprise zone or Foreign | ||||||
14 | Trade Zone or
Sub-Zone. An employee is employed in an
| ||||||
15 | enterprise zone or federally designated Foreign Trade | ||||||
16 | Zone or Sub-Zone
if his services are rendered there or | ||||||
17 | it is the base of
operations for the services | ||||||
18 | performed.
| ||||||
19 | (D) A full-time employee working 30 or more hours | ||||||
20 | per week.
| ||||||
21 | (4) For tax years ending on or after December 31, 1985 | ||||||
22 | and prior to
December 31, 1988, the credit shall be allowed | ||||||
23 | for the tax year in which
the eligible employees are hired. | ||||||
24 | For tax years ending on or after
December 31, 1988, the | ||||||
25 | credit shall be allowed for the tax year immediately
| ||||||
26 | following the tax year in which the eligible employees are | ||||||
27 | hired. If the
amount of the credit exceeds the tax | ||||||
28 | liability for that year, whether it
exceeds the original | ||||||
29 | liability or the liability as later amended, such
excess | ||||||
30 | may be carried forward and applied to the tax liability of | ||||||
31 | the 5
taxable years following the excess credit year. The | ||||||
32 | credit shall be
applied to the earliest year for which | ||||||
33 | there is a liability. If there is
credit from more than one | ||||||
34 | tax year that is available to offset a liability,
earlier | ||||||
35 | credit shall be applied first.
| ||||||
36 | (5) The Department of Revenue shall promulgate such |
| |||||||
| |||||||
1 | rules and regulations
as may be deemed necessary to carry | ||||||
2 | out the purposes of this subsection (g).
| ||||||
3 | (6) The credit shall be available for eligible | ||||||
4 | employees hired on or
after January 1, 1986.
| ||||||
5 | (h) Investment credit; High Impact Business.
| ||||||
6 | (1) Subject to subsections (b) and (b-5) of Section
5.5 | ||||||
7 | of the Illinois Enterprise Zone Act, a taxpayer shall be | ||||||
8 | allowed a credit
against the tax imposed by subsections (a) | ||||||
9 | and (b) of this Section for
investment in qualified
| ||||||
10 | property which is placed in service by a Department of | ||||||
11 | Commerce and Economic Opportunity
Community
Affairs | ||||||
12 | designated High Impact Business. The credit shall be .5% of | ||||||
13 | the basis
for such property. The credit shall not be | ||||||
14 | available (i) until the minimum
investments in qualified | ||||||
15 | property set forth in subdivision (a)(3)(A) of
Section 5.5 | ||||||
16 | of the Illinois
Enterprise Zone Act have been satisfied
or | ||||||
17 | (ii) until the time authorized in subsection (b-5) of the | ||||||
18 | Illinois
Enterprise Zone Act for entities designated as | ||||||
19 | High Impact Businesses under
subdivisions (a)(3)(B), | ||||||
20 | (a)(3)(C), and (a)(3)(D) of Section 5.5 of the Illinois
| ||||||
21 | Enterprise Zone Act, and shall not be allowed to the extent | ||||||
22 | that it would
reduce a taxpayer's liability for the tax | ||||||
23 | imposed by subsections (a) and (b) of
this Section to below | ||||||
24 | zero. The credit applicable to such investments shall be
| ||||||
25 | taken in the taxable year in which such investments have | ||||||
26 | been completed. The
credit for additional investments | ||||||
27 | beyond the minimum investment by a designated
high impact | ||||||
28 | business authorized under subdivision (a)(3)(A) of Section | ||||||
29 | 5.5 of
the Illinois Enterprise Zone Act shall be available | ||||||
30 | only in the taxable year in
which the property is placed in | ||||||
31 | service and shall not be allowed to the extent
that it | ||||||
32 | would reduce a taxpayer's liability for the tax imposed by | ||||||
33 | subsections
(a) and (b) of this Section to below zero.
For | ||||||
34 | tax years ending on or after December 31, 1987, the credit | ||||||
35 | shall be
allowed for the tax year in which the property is | ||||||
36 | placed in service, or, if
the amount of the credit exceeds |
| |||||||
| |||||||
1 | the tax liability for that year, whether
it exceeds the | ||||||
2 | original liability or the liability as later amended, such
| ||||||
3 | excess may be carried forward and applied to the tax | ||||||
4 | liability of the 5
taxable years following the excess | ||||||
5 | credit year. The credit shall be
applied to the earliest | ||||||
6 | year for which there is a liability. If there is
credit | ||||||
7 | from more than one tax year that is available to offset a | ||||||
8 | liability,
the credit accruing first in time shall be | ||||||
9 | applied first.
| ||||||
10 | Changes made in this subdivision (h)(1) by Public Act | ||||||
11 | 88-670
restore changes made by Public Act 85-1182 and | ||||||
12 | reflect existing law.
| ||||||
13 | (2) The term qualified property means property which:
| ||||||
14 | (A) is tangible, whether new or used, including | ||||||
15 | buildings and
structural components of buildings;
| ||||||
16 | (B) is depreciable pursuant to Section 167 of the | ||||||
17 | Internal Revenue
Code, except that "3-year property" | ||||||
18 | as defined in Section 168(c)(2)(A) of
that Code is not | ||||||
19 | eligible for the credit provided by this subsection | ||||||
20 | (h);
| ||||||
21 | (C) is acquired by purchase as defined in Section | ||||||
22 | 179(d) of the
Internal Revenue Code; and
| ||||||
23 | (D) is not eligible for the Enterprise Zone | ||||||
24 | Investment Credit provided
by subsection (f) of this | ||||||
25 | Section.
| ||||||
26 | (3) The basis of qualified property shall be the basis | ||||||
27 | used to compute
the depreciation deduction for federal | ||||||
28 | income tax purposes.
| ||||||
29 | (4) If the basis of the property for federal income tax | ||||||
30 | depreciation
purposes is increased after it has been placed | ||||||
31 | in service in a federally
designated Foreign Trade Zone or | ||||||
32 | Sub-Zone located in Illinois by the taxpayer,
the amount of | ||||||
33 | such increase shall be deemed property placed in service on
| ||||||
34 | the date of such increase in basis.
| ||||||
35 | (5) The term "placed in service" shall have the same | ||||||
36 | meaning as under
Section 46 of the Internal Revenue Code.
|
| |||||||
| |||||||
1 | (6) If during any taxable year ending on or before | ||||||
2 | December 31, 1996,
any property ceases to be qualified
| ||||||
3 | property in the hands of the taxpayer within 48 months | ||||||
4 | after being placed
in service, or the situs of any | ||||||
5 | qualified property is moved outside
Illinois within 48 | ||||||
6 | months after being placed in service, the tax imposed
under | ||||||
7 | subsections (a) and (b) of this Section for such taxable | ||||||
8 | year shall
be increased. Such increase shall be determined | ||||||
9 | by (i) recomputing the
investment credit which would have | ||||||
10 | been allowed for the year in which
credit for such property | ||||||
11 | was originally allowed by eliminating such
property from | ||||||
12 | such computation, and (ii) subtracting such recomputed | ||||||
13 | credit
from the amount of credit previously allowed. For | ||||||
14 | the purposes of this
paragraph (6), a reduction of the | ||||||
15 | basis of qualified property resulting
from a | ||||||
16 | redetermination of the purchase price shall be deemed a | ||||||
17 | disposition
of qualified property to the extent of such | ||||||
18 | reduction.
| ||||||
19 | (7) Beginning with tax years ending after December 31, | ||||||
20 | 1996, if a
taxpayer qualifies for the credit under this | ||||||
21 | subsection (h) and thereby is
granted a tax abatement and | ||||||
22 | the taxpayer relocates its entire facility in
violation of | ||||||
23 | the explicit terms and length of the contract under Section
| ||||||
24 | 18-183 of the Property Tax Code, the tax imposed under | ||||||
25 | subsections
(a) and (b) of this Section shall be increased | ||||||
26 | for the taxable year
in which the taxpayer relocated its | ||||||
27 | facility by an amount equal to the
amount of credit | ||||||
28 | received by the taxpayer under this subsection (h).
| ||||||
29 | (i) Credit for Personal Property Tax Replacement Income | ||||||
30 | Tax.
For tax years ending prior to December 31, 2003, a credit | ||||||
31 | shall be allowed
against the tax imposed by
subsections (a) and | ||||||
32 | (b) of this Section for the tax imposed by subsections (c)
and | ||||||
33 | (d) of this Section. This credit shall be computed by | ||||||
34 | multiplying the tax
imposed by subsections (c) and (d) of this | ||||||
35 | Section by a fraction, the numerator
of which is base income | ||||||
36 | allocable to Illinois and the denominator of which is
Illinois |
| |||||||
| |||||||
1 | base income, and further multiplying the product by the tax | ||||||
2 | rate
imposed by subsections (a) and (b) of this Section.
| ||||||
3 | Any credit earned on or after December 31, 1986 under
this | ||||||
4 | subsection which is unused in the year
the credit is computed | ||||||
5 | because it exceeds the tax liability imposed by
subsections (a) | ||||||
6 | and (b) for that year (whether it exceeds the original
| ||||||
7 | liability or the liability as later amended) may be carried | ||||||
8 | forward and
applied to the tax liability imposed by subsections | ||||||
9 | (a) and (b) of the 5
taxable years following the excess credit | ||||||
10 | year, provided that no credit may
be carried forward to any | ||||||
11 | year ending on or
after December 31, 2003. This credit shall be
| ||||||
12 | applied first to the earliest year for which there is a | ||||||
13 | liability. If
there is a credit under this subsection from more | ||||||
14 | than one tax year that is
available to offset a liability the | ||||||
15 | earliest credit arising under this
subsection shall be applied | ||||||
16 | first.
| ||||||
17 | If, during any taxable year ending on or after December 31, | ||||||
18 | 1986, the
tax imposed by subsections (c) and (d) of this | ||||||
19 | Section for which a taxpayer
has claimed a credit under this | ||||||
20 | subsection (i) is reduced, the amount of
credit for such tax | ||||||
21 | shall also be reduced. Such reduction shall be
determined by | ||||||
22 | recomputing the credit to take into account the reduced tax
| ||||||
23 | imposed by subsections (c) and (d). If any portion of the
| ||||||
24 | reduced amount of credit has been carried to a different | ||||||
25 | taxable year, an
amended return shall be filed for such taxable | ||||||
26 | year to reduce the amount of
credit claimed.
| ||||||
27 | (j) Training expense credit. Beginning with tax years | ||||||
28 | ending on or
after December 31, 1986 and prior to December 31, | ||||||
29 | 2003, a taxpayer shall be
allowed a credit against the
tax | ||||||
30 | imposed by subsections (a) and (b) under this Section
for all | ||||||
31 | amounts paid or accrued, on behalf of all persons
employed by | ||||||
32 | the taxpayer in Illinois or Illinois residents employed
outside | ||||||
33 | of Illinois by a taxpayer, for educational or vocational | ||||||
34 | training in
semi-technical or technical fields or semi-skilled | ||||||
35 | or skilled fields, which
were deducted from gross income in the | ||||||
36 | computation of taxable income. The
credit against the tax |
| |||||||
| |||||||
1 | imposed by subsections (a) and (b) shall be 1.6% of
such | ||||||
2 | training expenses. For partners, shareholders of subchapter S
| ||||||
3 | corporations, and owners of limited liability companies, if the | ||||||
4 | liability
company is treated as a partnership for purposes of | ||||||
5 | federal and State income
taxation, there shall be allowed a | ||||||
6 | credit under this subsection (j) to be
determined in accordance | ||||||
7 | with the determination of income and distributive
share of | ||||||
8 | income under Sections 702 and 704 and subchapter S of the | ||||||
9 | Internal
Revenue Code.
| ||||||
10 | Any credit allowed under this subsection which is unused in | ||||||
11 | the year
the credit is earned may be carried forward to each of | ||||||
12 | the 5 taxable
years following the year for which the credit is | ||||||
13 | first computed until it is
used. This credit shall be applied | ||||||
14 | first to the earliest year for which
there is a liability. If | ||||||
15 | there is a credit under this subsection from more
than one tax | ||||||
16 | year that is available to offset a liability the earliest
| ||||||
17 | credit arising under this subsection shall be applied first. No | ||||||
18 | carryforward
credit may be claimed in any tax year ending on or | ||||||
19 | after
December 31, 2003.
| ||||||
20 | (k) Research and development credit.
| ||||||
21 | For tax years ending after July 1, 1990 and prior to
| ||||||
22 | December 31, 2003, a taxpayer shall be
allowed a credit against | ||||||
23 | the tax imposed by subsections (a) and (b) of this
Section for | ||||||
24 | increasing research activities in this State. The credit
| ||||||
25 | allowed against the tax imposed by subsections (a) and (b) | ||||||
26 | shall be equal
to 6 1/2% of the qualifying expenditures for | ||||||
27 | increasing research activities
in this State. For partners, | ||||||
28 | shareholders of subchapter S corporations, and
owners of | ||||||
29 | limited liability companies, if the liability company is | ||||||
30 | treated as a
partnership for purposes of federal and State | ||||||
31 | income taxation, there shall be
allowed a credit under this | ||||||
32 | subsection to be determined in accordance with the
| ||||||
33 | determination of income and distributive share of income under | ||||||
34 | Sections 702 and
704 and subchapter S of the Internal Revenue | ||||||
35 | Code.
| ||||||
36 | For purposes of this subsection, "qualifying expenditures" |
| |||||||
| |||||||
1 | means the
qualifying expenditures as defined for the federal | ||||||
2 | credit for increasing
research activities which would be | ||||||
3 | allowable under Section 41 of the
Internal Revenue Code and | ||||||
4 | which are conducted in this State, "qualifying
expenditures for | ||||||
5 | increasing research activities in this State" means the
excess | ||||||
6 | of qualifying expenditures for the taxable year in which | ||||||
7 | incurred
over qualifying expenditures for the base period, | ||||||
8 | "qualifying expenditures
for the base period" means the average | ||||||
9 | of the qualifying expenditures for
each year in the base | ||||||
10 | period, and "base period" means the 3 taxable years
immediately | ||||||
11 | preceding the taxable year for which the determination is
being | ||||||
12 | made.
| ||||||
13 | Any credit in excess of the tax liability for the taxable | ||||||
14 | year
may be carried forward. A taxpayer may elect to have the
| ||||||
15 | unused credit shown on its final completed return carried over | ||||||
16 | as a credit
against the tax liability for the following 5 | ||||||
17 | taxable years or until it has
been fully used, whichever occurs | ||||||
18 | first; provided that no credit may be
carried forward to any | ||||||
19 | year ending on or
after December 31, 2003.
| ||||||
20 | If an unused credit is carried forward to a given year from | ||||||
21 | 2 or more
earlier years, that credit arising in the earliest | ||||||
22 | year will be applied
first against the tax liability for the | ||||||
23 | given year. If a tax liability for
the given year still | ||||||
24 | remains, the credit from the next earliest year will
then be | ||||||
25 | applied, and so on, until all credits have been used or no tax
| ||||||
26 | liability for the given year remains. Any remaining unused | ||||||
27 | credit or
credits then will be carried forward to the next | ||||||
28 | following year in which a
tax liability is incurred, except | ||||||
29 | that no credit can be carried forward to
a year which is more | ||||||
30 | than 5 years after the year in which the expense for
which the | ||||||
31 | credit is given was incurred.
| ||||||
32 | No inference shall be drawn from this amendatory Act of the | ||||||
33 | 91st General
Assembly in construing this Section for taxable | ||||||
34 | years beginning before January
1, 1999.
| ||||||
35 | (l) Environmental Remediation Tax Credit.
| ||||||
36 | (i) For tax years ending after December 31, 1997 and on |
| |||||||
| |||||||
1 | or before
December 31, 2001, a taxpayer shall be allowed a | ||||||
2 | credit against the tax
imposed by subsections (a) and (b) | ||||||
3 | of this Section for certain amounts paid
for unreimbursed | ||||||
4 | eligible remediation costs, as specified in this | ||||||
5 | subsection.
For purposes of this Section, "unreimbursed | ||||||
6 | eligible remediation costs" means
costs approved by the | ||||||
7 | Illinois Environmental Protection Agency ("Agency") under
| ||||||
8 | Section 58.14 of the Environmental Protection Act that were | ||||||
9 | paid in performing
environmental remediation at a site for | ||||||
10 | which a No Further Remediation Letter
was issued by the | ||||||
11 | Agency and recorded under Section 58.10 of the | ||||||
12 | Environmental
Protection Act. The credit must be claimed | ||||||
13 | for the taxable year in which
Agency approval of the | ||||||
14 | eligible remediation costs is granted. The credit is
not | ||||||
15 | available to any taxpayer if the taxpayer or any related | ||||||
16 | party caused or
contributed to, in any material respect, a | ||||||
17 | release of regulated substances on,
in, or under the site | ||||||
18 | that was identified and addressed by the remedial
action | ||||||
19 | pursuant to the Site Remediation Program of the | ||||||
20 | Environmental Protection
Act. After the Pollution Control | ||||||
21 | Board rules are adopted pursuant to the
Illinois | ||||||
22 | Administrative Procedure Act for the administration and | ||||||
23 | enforcement of
Section 58.9 of the Environmental | ||||||
24 | Protection Act, determinations as to credit
availability | ||||||
25 | for purposes of this Section shall be made consistent with | ||||||
26 | those
rules. For purposes of this Section, "taxpayer" | ||||||
27 | includes a person whose tax
attributes the taxpayer has | ||||||
28 | succeeded to under Section 381 of the Internal
Revenue Code | ||||||
29 | and "related party" includes the persons disallowed a | ||||||
30 | deduction
for losses by paragraphs (b), (c), and (f)(1) of | ||||||
31 | Section 267 of the Internal
Revenue Code by virtue of being | ||||||
32 | a related taxpayer, as well as any of its
partners. The | ||||||
33 | credit allowed against the tax imposed by subsections (a) | ||||||
34 | and
(b) shall be equal to 25% of the unreimbursed eligible | ||||||
35 | remediation costs in
excess of $100,000 per site, except | ||||||
36 | that the $100,000 threshold shall not apply
to any site |
| |||||||
| |||||||
1 | contained in an enterprise zone as determined by the | ||||||
2 | Department of
Commerce and Community Affairs (now | ||||||
3 | Department of Commerce and Economic Opportunity) . The | ||||||
4 | total credit allowed shall not exceed
$40,000 per year with | ||||||
5 | a maximum total of $150,000 per site. For partners and
| ||||||
6 | shareholders of subchapter S corporations, there shall be | ||||||
7 | allowed a credit
under this subsection to be determined in | ||||||
8 | accordance with the determination of
income and | ||||||
9 | distributive share of income under Sections 702 and 704 and
| ||||||
10 | subchapter S of the Internal Revenue Code.
| ||||||
11 | (ii) A credit allowed under this subsection that is | ||||||
12 | unused in the year
the credit is earned may be carried | ||||||
13 | forward to each of the 5 taxable years
following the year | ||||||
14 | for which the credit is first earned until it is used.
The | ||||||
15 | term "unused credit" does not include any amounts of | ||||||
16 | unreimbursed eligible
remediation costs in excess of the | ||||||
17 | maximum credit per site authorized under
paragraph (i). | ||||||
18 | This credit shall be applied first to the earliest year
for | ||||||
19 | which there is a liability. If there is a credit under this | ||||||
20 | subsection
from more than one tax year that is available to | ||||||
21 | offset a liability, the
earliest credit arising under this | ||||||
22 | subsection shall be applied first. A
credit allowed under | ||||||
23 | this subsection may be sold to a buyer as part of a sale
of | ||||||
24 | all or part of the remediation site for which the credit | ||||||
25 | was granted. The
purchaser of a remediation site and the | ||||||
26 | tax credit shall succeed to the unused
credit and remaining | ||||||
27 | carry-forward period of the seller. To perfect the
| ||||||
28 | transfer, the assignor shall record the transfer in the | ||||||
29 | chain of title for the
site and provide written notice to | ||||||
30 | the Director of the Illinois Department of
Revenue of the | ||||||
31 | assignor's intent to sell the remediation site and the | ||||||
32 | amount of
the tax credit to be transferred as a portion of | ||||||
33 | the sale. In no event may a
credit be transferred to any | ||||||
34 | taxpayer if the taxpayer or a related party would
not be | ||||||
35 | eligible under the provisions of subsection (i).
| ||||||
36 | (iii) For purposes of this Section, the term "site" |
| |||||||
| |||||||
1 | shall have the same
meaning as under Section 58.2 of the | ||||||
2 | Environmental Protection Act.
| ||||||
3 | (m) Education expense credit. Beginning with tax years | ||||||
4 | ending after
December 31, 1999, a taxpayer who
is the custodian | ||||||
5 | of one or more qualifying pupils shall be allowed a credit
| ||||||
6 | against the tax imposed by subsections (a) and (b) of this | ||||||
7 | Section for
qualified education expenses incurred on behalf of | ||||||
8 | the qualifying pupils.
The credit shall be equal to 25% of | ||||||
9 | qualified education expenses, but in no
event may the total | ||||||
10 | credit under this subsection claimed by a
family that is the
| ||||||
11 | custodian of qualifying pupils exceed $500. In no event shall a | ||||||
12 | credit under
this subsection reduce the taxpayer's liability | ||||||
13 | under this Act to less than
zero. This subsection is exempt | ||||||
14 | from the provisions of Section 250 of this
Act.
| ||||||
15 | For purposes of this subsection:
| ||||||
16 | "Qualifying pupils" means individuals who (i) are | ||||||
17 | residents of the State of
Illinois, (ii) are under the age of | ||||||
18 | 21 at the close of the school year for
which a credit is | ||||||
19 | sought, and (iii) during the school year for which a credit
is | ||||||
20 | sought were full-time pupils enrolled in a kindergarten through | ||||||
21 | twelfth
grade education program at any school, as defined in | ||||||
22 | this subsection.
| ||||||
23 | "Qualified education expense" means the amount incurred
on | ||||||
24 | behalf of a qualifying pupil in excess of $250 for tuition, | ||||||
25 | book fees, and
lab fees at the school in which the pupil is | ||||||
26 | enrolled during the regular school
year.
| ||||||
27 | "School" means any public or nonpublic elementary or | ||||||
28 | secondary school in
Illinois that is in compliance with Title | ||||||
29 | VI of the Civil Rights Act of 1964
and attendance at which | ||||||
30 | satisfies the requirements of Section 26-1 of the
School Code, | ||||||
31 | except that nothing shall be construed to require a child to
| ||||||
32 | attend any particular public or nonpublic school to qualify for | ||||||
33 | the credit
under this Section.
| ||||||
34 | "Custodian" means, with respect to qualifying pupils, an | ||||||
35 | Illinois resident
who is a parent, the parents, a legal | ||||||
36 | guardian, or the legal guardians of the
qualifying pupils.
|
| |||||||
| |||||||
1 | (Source: P.A. 92-12, eff.
7-1-01; 92-16, eff. 6-28-01; 92-651, | ||||||
2 | eff. 7-11-02; 92-846, eff. 8-23-02; 93-29,
eff. 6-20-03; | ||||||
3 | revised 12-6-03.)
| ||||||
4 | (35 ILCS 5/202.5 new) | ||||||
5 | Sec. 202.5. Net income attributable to the period prior to | ||||||
6 | January 1, 2004 and net income attributable to the period after | ||||||
7 | December 31, 2003. | ||||||
8 | (a) In general. With respect to the taxable year of a | ||||||
9 | taxpayer beginning prior to January 1, 2004 and ending after | ||||||
10 | December 31, 2003, net income for the period after December 31, | ||||||
11 | 2003 shall be that amount that bears the same ratio to the | ||||||
12 | taxpayer's net income for the entire taxable year as the number | ||||||
13 | of days in that year after December 31, 2003 bears to the total | ||||||
14 | number of days in that year, and the net income for the period | ||||||
15 | prior to January 1, 2004 shall be that amount that bears the | ||||||
16 | same ratio to the taxpayer's net income for the entire taxable | ||||||
17 | year as the number of days in that year prior to January 1, | ||||||
18 | 2004 bears to the total number of days in that year. | ||||||
19 | (b) Election to attribute income and deduction items | ||||||
20 | specifically to the respective portions of a taxable year prior | ||||||
21 | to January 1, 2004 and after December 31, 2003. In the case of | ||||||
22 | a taxpayer with a taxable year beginning prior to January 1, | ||||||
23 | 2004 and ending after December 31, 2003, the taxpayer may | ||||||
24 | elect, instead of the procedure established in subsection (a) | ||||||
25 | of this Section, to determine net income on a specific | ||||||
26 | accounting basis for the 2 portions of his or her taxable year: | ||||||
27 | (i) from the beginning of the taxable year through | ||||||
28 | December 31, 2003; and | ||||||
29 | (ii) from January 1, 2004 through the end of the | ||||||
30 | taxable year. | ||||||
31 | If the taxpayer elects specific accounting under this | ||||||
32 | subsection, there shall be taken into account in computing base | ||||||
33 | income for each of the 2 portions of the taxable year only | ||||||
34 | those items earned, received, paid, incurred or accrued in each | ||||||
35 | such period. The standard exemption provided by Section 204 |
| |||||||
| |||||||
1 | shall be divided between the respective periods in amounts that | ||||||
2 | bear the same ratio to the total exemption allowable under | ||||||
3 | Section 204 (determined without regard to this Section) as the | ||||||
4 | total number of days in each such period bears to the total | ||||||
5 | number of days in the taxable year. The election provided by | ||||||
6 | this subsection must be made in such manner and at such time | ||||||
7 | that the Department by forms or regulations prescribes, but | ||||||
8 | must be made no later than the due date (including any | ||||||
9 | extensions thereof) for the filing of the return for the | ||||||
10 | taxable year, and shall be irrevocable.
| ||||||
11 | (35 ILCS 5/204) (from Ch. 120, par. 2-204)
| ||||||
12 | Sec. 204. Standard Exemption.
| ||||||
13 | (a) Allowance of exemption. In computing net income under | ||||||
14 | this Act, there
shall be allowed as an exemption the sum of the | ||||||
15 | amounts determined under
subsections (b), (c) and (d), | ||||||
16 | multiplied by a fraction the numerator of which
is the amount | ||||||
17 | of the taxpayer's base income allocable to this State for the
| ||||||
18 | taxable year and the denominator of which is the taxpayer's | ||||||
19 | total base income
for the taxable year.
| ||||||
20 | (b) Basic amount. For the purpose of subsection (a) of this | ||||||
21 | Section,
except as provided by subsection (a) of Section 205 | ||||||
22 | and in this
subsection, each taxpayer shall be allowed a basic | ||||||
23 | amount of $1000, except
that for corporations the basic amount | ||||||
24 | shall be zero for tax years ending on
or
after December 31, | ||||||
25 | 2003, and for individuals the basic amount shall be:
| ||||||
26 | (1) for taxable years ending on or after December 31, | ||||||
27 | 1998 and prior to
December 31, 1999, $1,300;
| ||||||
28 | (2) for taxable years ending on or after December 31, | ||||||
29 | 1999 and prior to
December 31, 2000, $1,650;
| ||||||
30 | (3) for taxable years ending on or after December 31, | ||||||
31 | 2000 and prior to January 1, 2004 , $2,000 ; | ||||||
32 | (4) for taxable years ending on or after January 1, | ||||||
33 | 2004, $12,000 .
| ||||||
34 | For taxable years ending on or after December 31, 1992, a | ||||||
35 | taxpayer whose
Illinois base income exceeds the basic amount |
| |||||||
| |||||||
1 | and who is claimed as a dependent
on another person's tax | ||||||
2 | return under the Internal Revenue Code of 1986 shall
not be | ||||||
3 | allowed any basic amount under this subsection.
| ||||||
4 | (c) Additional amount for individuals. In the case of an | ||||||
5 | individual
taxpayer, there shall be allowed for the purpose of | ||||||
6 | subsection (a), in
addition to the basic amount provided by | ||||||
7 | subsection (b), an additional
exemption equal to the basic | ||||||
8 | amount for each
exemption in excess of one
allowable to such | ||||||
9 | individual taxpayer for the taxable year under Section
151 of | ||||||
10 | the Internal Revenue Code.
| ||||||
11 | (d) Additional exemptions for an individual taxpayer and | ||||||
12 | his or her
spouse. In the case of an individual taxpayer and | ||||||
13 | his or her spouse, he or
she shall each be allowed additional | ||||||
14 | exemptions as follows:
| ||||||
15 | (1) Additional exemption for taxpayer or spouse 65 | ||||||
16 | years of age or older.
| ||||||
17 | (A) For taxpayer. An additional exemption of | ||||||
18 | $1,000 for the taxpayer if
he or she has attained the | ||||||
19 | age of 65 before the end of the taxable year.
| ||||||
20 | (B) For spouse when a joint return is not filed. An | ||||||
21 | additional
exemption of $1,000 for the spouse of the | ||||||
22 | taxpayer if a joint return is not
made by the taxpayer | ||||||
23 | and his spouse, and if the spouse has attained the age
| ||||||
24 | of 65 before the end of such taxable year, and, for the | ||||||
25 | calendar year in
which the taxable year of the taxpayer | ||||||
26 | begins, has no gross income and is
not the dependent of | ||||||
27 | another taxpayer.
| ||||||
28 | (2) Additional exemption for blindness of taxpayer or | ||||||
29 | spouse.
| ||||||
30 | (A) For taxpayer. An additional exemption of | ||||||
31 | $1,000 for the taxpayer if
he or she is blind at the | ||||||
32 | end of the taxable year.
| ||||||
33 | (B) For spouse when a joint return is not filed. An | ||||||
34 | additional
exemption of $1,000 for the spouse of the | ||||||
35 | taxpayer if a separate return is made
by the taxpayer, | ||||||
36 | and if the spouse is blind and, for the calendar year |
| |||||||
| |||||||
1 | in which
the taxable year of the taxpayer begins, has | ||||||
2 | no gross income and is not the
dependent of another | ||||||
3 | taxpayer. For purposes of this paragraph, the
| ||||||
4 | determination of whether the spouse is blind shall be | ||||||
5 | made as of the end of the
taxable year of the taxpayer; | ||||||
6 | except that if the spouse dies during such
taxable year | ||||||
7 | such determination shall be made as of the time of such | ||||||
8 | death.
| ||||||
9 | (C) Blindness defined. For purposes of this | ||||||
10 | subsection, an individual
is blind only if his or her | ||||||
11 | central visual acuity does not exceed 20/200 in
the | ||||||
12 | better eye with correcting lenses, or if his or her | ||||||
13 | visual acuity is
greater than 20/200 but is accompanied | ||||||
14 | by a limitation in the fields of
vision such that the | ||||||
15 | widest diameter of the visual fields subtends an angle
| ||||||
16 | no greater than 20 degrees.
| ||||||
17 | (e) Cross reference. See Article 3 for the manner of | ||||||
18 | determining
base income allocable to this State.
| ||||||
19 | (f) Application of Section 250. Section 250 does not apply | ||||||
20 | to the
amendments to this Section made by Public Act 90-613.
| ||||||
21 | (Source: P.A. 93-29, eff. 6-20-03.)
| ||||||
22 | (35 ILCS 5/901) (from Ch. 120, par. 9-901)
| ||||||
23 | Sec. 901. Collection Authority.
| ||||||
24 | (a) In general.
| ||||||
25 | The Department shall collect the taxes imposed by this Act. | ||||||
26 | The Department
shall collect certified past due child support | ||||||
27 | amounts under Section 2505-650
of the Department of Revenue Law | ||||||
28 | (20 ILCS 2505/2505-650). Except as
provided in subsections (c) | ||||||
29 | and (e) of this Section, money collected
pursuant to | ||||||
30 | subsections (a) and (b) of Section 201 of this Act shall be
| ||||||
31 | paid into the General Revenue Fund in the State treasury; money
| ||||||
32 | collected pursuant to subsections (c) and (d) of Section 201 of | ||||||
33 | this Act
shall be paid into the Personal Property Tax | ||||||
34 | Replacement Fund, a special
fund in the State Treasury; and | ||||||
35 | money collected under Section 2505-650 of the
Department of |
| |||||||
| |||||||
1 | Revenue Law (20 ILCS 2505/2505-650) shall be paid
into the
| ||||||
2 | Child Support Enforcement Trust Fund, a special fund outside | ||||||
3 | the State
Treasury, or
to the State
Disbursement Unit | ||||||
4 | established under Section 10-26 of the Illinois Public Aid
| ||||||
5 | Code, as directed by the Department of Public
Aid.
| ||||||
6 | (b) Local Governmental Distributive Fund.
| ||||||
7 | Beginning August 1, 1969, and continuing through June 30, | ||||||
8 | 1994, the Treasurer
shall transfer each month from the General | ||||||
9 | Revenue Fund to a special fund in
the State treasury, to be | ||||||
10 | known as the "Local Government Distributive Fund", an
amount | ||||||
11 | equal to 1/12 of the net revenue realized from the tax imposed | ||||||
12 | by
subsections (a) and (b) of Section 201 of this Act during | ||||||
13 | the preceding month.
Beginning July 1, 1994, and continuing | ||||||
14 | through June 30, 1995, the Treasurer
shall transfer each month | ||||||
15 | from the General Revenue Fund to the Local Government
| ||||||
16 | Distributive Fund an amount equal to 1/11 of the net revenue | ||||||
17 | realized from the
tax imposed by subsections (a) and (b) of | ||||||
18 | Section 201 of this Act during the
preceding month. Beginning | ||||||
19 | July 1, 1995, the Treasurer shall transfer each
month from the | ||||||
20 | General Revenue Fund to the Local Government Distributive Fund
| ||||||
21 | an amount equal to the net of (i) 1/10 of the net revenue | ||||||
22 | realized from the
tax imposed by
subsections (a) and (b) of | ||||||
23 | Section 201 of the Illinois Income Tax Act during
the preceding | ||||||
24 | month
(ii) minus, beginning July 1, 2003 and ending June 30, | ||||||
25 | 2004, $6,666,666, and
beginning July 1,
2004, zero. Net revenue | ||||||
26 | realized for a month shall be defined as the
revenue from the | ||||||
27 | tax imposed by subsections (a) and (b) of Section 201 of this
| ||||||
28 | Act which is deposited in the General Revenue Fund, the | ||||||
29 | Educational Assistance
Fund and the Income Tax Surcharge Local | ||||||
30 | Government Distributive Fund during the
month minus the amount | ||||||
31 | paid out of the General Revenue Fund in State warrants
during | ||||||
32 | that same month as refunds to taxpayers for overpayment of | ||||||
33 | liability
under the tax imposed by subsections (a) and (b) of | ||||||
34 | Section 201 of this Act.
| ||||||
35 | (c) Deposits Into Income Tax Refund Fund.
| ||||||
36 | (1) Beginning on January 1, 1989 and thereafter, the |
| |||||||
| |||||||
1 | Department shall
deposit a percentage of the amounts | ||||||
2 | collected pursuant to subsections (a)
and (b)(1), (2), and | ||||||
3 | (3), (4), and (5) of Section 201 of this Act into a fund in | ||||||
4 | the State
treasury known as the Income Tax Refund Fund. The | ||||||
5 | Department shall deposit 6%
of such amounts during the | ||||||
6 | period beginning January 1, 1989 and ending on June
30, | ||||||
7 | 1989. Beginning with State fiscal year 1990 and for each | ||||||
8 | fiscal year
thereafter, the percentage deposited into the | ||||||
9 | Income Tax Refund Fund during a
fiscal year shall be the | ||||||
10 | Annual Percentage. For fiscal years 1999 through
2001, the | ||||||
11 | Annual Percentage shall be 7.1%.
For fiscal year 2003, the | ||||||
12 | Annual Percentage shall be 8%.
For fiscal year 2004, the | ||||||
13 | Annual Percentage shall be 11.7%. For all other
fiscal | ||||||
14 | years, the
Annual Percentage shall be calculated as a | ||||||
15 | fraction, the numerator of which
shall be the amount of | ||||||
16 | refunds approved for payment by the Department during
the | ||||||
17 | preceding fiscal year as a result of overpayment of tax | ||||||
18 | liability under
subsections (a) and (b)(1), (2), and (3) , | ||||||
19 | (4), and (5) of Section 201 of this Act plus the
amount of | ||||||
20 | such refunds remaining approved but unpaid at the end of | ||||||
21 | the
preceding fiscal year, minus the amounts transferred | ||||||
22 | into the Income Tax
Refund Fund from the Tobacco Settlement | ||||||
23 | Recovery Fund, and
the denominator of which shall be the | ||||||
24 | amounts which will be collected pursuant
to subsections (a) | ||||||
25 | and (b)(1), (2), and (3) , (4), and (5) of Section 201 of | ||||||
26 | this Act during
the preceding fiscal year; except that in | ||||||
27 | State fiscal year 2002, the Annual
Percentage shall in no | ||||||
28 | event exceed 7.6%. The Director of Revenue shall
certify | ||||||
29 | the Annual Percentage to the Comptroller on the last | ||||||
30 | business day of
the fiscal year immediately preceding the | ||||||
31 | fiscal year for which it is to be
effective.
| ||||||
32 | (2) Beginning on January 1, 1989 and thereafter, the | ||||||
33 | Department shall
deposit a percentage of the amounts | ||||||
34 | collected pursuant to subsections (a)
and (b)(6), (7), and | ||||||
35 | (8), (c) and (d) of Section 201
of this Act into a fund in | ||||||
36 | the State treasury known as the Income Tax
Refund Fund. The |
| |||||||
| |||||||
1 | Department shall deposit 18% of such amounts during the
| ||||||
2 | period beginning January 1, 1989 and ending on June 30, | ||||||
3 | 1989. Beginning
with State fiscal year 1990 and for each | ||||||
4 | fiscal year thereafter, the
percentage deposited into the | ||||||
5 | Income Tax Refund Fund during a fiscal year
shall be the | ||||||
6 | Annual Percentage. For fiscal years 1999, 2000, and 2001, | ||||||
7 | the
Annual Percentage shall be 19%.
For fiscal year 2003, | ||||||
8 | the Annual Percentage shall be 27%. For fiscal year
2004, | ||||||
9 | the Annual Percentage shall be 32%.
For all other fiscal | ||||||
10 | years, the Annual
Percentage shall be calculated
as a | ||||||
11 | fraction, the numerator of which shall be the amount of | ||||||
12 | refunds
approved for payment by the Department during the | ||||||
13 | preceding fiscal year as
a result of overpayment of tax | ||||||
14 | liability under subsections (a) and (b)(6),
(7), and (8), | ||||||
15 | (c) and (d) of Section 201 of this Act plus the
amount of | ||||||
16 | such refunds remaining approved but unpaid at the end of | ||||||
17 | the
preceding fiscal year, and the denominator of
which | ||||||
18 | shall be the amounts which will be collected pursuant to | ||||||
19 | subsections (a)
and (b)(6), (7), and (8), (c) and (d) of | ||||||
20 | Section 201 of this Act during the
preceding fiscal year; | ||||||
21 | except that in State fiscal year 2002, the Annual
| ||||||
22 | Percentage shall in no event exceed 23%. The Director of | ||||||
23 | Revenue shall
certify the Annual Percentage to the | ||||||
24 | Comptroller on the last business day of
the fiscal year | ||||||
25 | immediately preceding the fiscal year for which it is to be
| ||||||
26 | effective.
| ||||||
27 | (3) The Comptroller shall order transferred and the | ||||||
28 | Treasurer shall
transfer from the Tobacco Settlement | ||||||
29 | Recovery Fund to the Income Tax Refund
Fund (i) $35,000,000 | ||||||
30 | in January, 2001, (ii) $35,000,000 in January, 2002, and
| ||||||
31 | (iii) $35,000,000 in January, 2003.
| ||||||
32 | (d) Expenditures from Income Tax Refund Fund.
| ||||||
33 | (1) Beginning January 1, 1989, money in the Income Tax | ||||||
34 | Refund Fund
shall be expended exclusively for the purpose | ||||||
35 | of paying refunds resulting
from overpayment of tax | ||||||
36 | liability under Section 201 of this Act, for paying
rebates |
| |||||||
| |||||||
1 | under Section 208.1 in the event that the amounts in the | ||||||
2 | Homeowners'
Tax Relief Fund are insufficient for that | ||||||
3 | purpose,
and for
making transfers pursuant to this | ||||||
4 | subsection (d).
| ||||||
5 | (2) The Director shall order payment of refunds | ||||||
6 | resulting from
overpayment of tax liability under Section | ||||||
7 | 201 of this Act from the
Income Tax Refund Fund only to the | ||||||
8 | extent that amounts collected pursuant
to Section 201 of | ||||||
9 | this Act and transfers pursuant to this subsection (d)
and | ||||||
10 | item (3) of subsection (c) have been deposited and retained | ||||||
11 | in the
Fund.
| ||||||
12 | (3) As soon as possible after the end of each fiscal | ||||||
13 | year, the Director
shall
order transferred and the State | ||||||
14 | Treasurer and State Comptroller shall
transfer from the | ||||||
15 | Income Tax Refund Fund to the Personal Property Tax
| ||||||
16 | Replacement Fund an amount, certified by the Director to | ||||||
17 | the Comptroller,
equal to the excess of the amount | ||||||
18 | collected pursuant to subsections (c) and
(d) of Section | ||||||
19 | 201 of this Act deposited into the Income Tax Refund Fund
| ||||||
20 | during the fiscal year over the amount of refunds resulting | ||||||
21 | from
overpayment of tax liability under subsections (c) and | ||||||
22 | (d) of Section 201
of this Act paid from the Income Tax | ||||||
23 | Refund Fund during the fiscal year.
| ||||||
24 | (4) As soon as possible after the end of each fiscal | ||||||
25 | year, the Director shall
order transferred and the State | ||||||
26 | Treasurer and State Comptroller shall
transfer from the | ||||||
27 | Personal Property Tax Replacement Fund to the Income Tax
| ||||||
28 | Refund Fund an amount, certified by the Director to the | ||||||
29 | Comptroller, equal
to the excess of the amount of refunds | ||||||
30 | resulting from overpayment of tax
liability under | ||||||
31 | subsections (c) and (d) of Section 201 of this Act paid
| ||||||
32 | from the Income Tax Refund Fund during the fiscal year over | ||||||
33 | the amount
collected pursuant to subsections (c) and (d) of | ||||||
34 | Section 201 of this Act
deposited into the Income Tax | ||||||
35 | Refund Fund during the fiscal year.
| ||||||
36 | (4.5) As soon as possible after the end of fiscal year |
| |||||||
| |||||||
1 | 1999 and of each
fiscal year
thereafter, the Director shall | ||||||
2 | order transferred and the State Treasurer and
State | ||||||
3 | Comptroller shall transfer from the Income Tax Refund Fund | ||||||
4 | to the General
Revenue Fund any surplus remaining in the | ||||||
5 | Income Tax Refund Fund as of the end
of such fiscal year; | ||||||
6 | excluding for fiscal years 2000, 2001, and 2002
amounts | ||||||
7 | attributable to transfers under item (3) of subsection (c) | ||||||
8 | less refunds
resulting from the earned income tax credit.
| ||||||
9 | (5) This Act shall constitute an irrevocable and | ||||||
10 | continuing
appropriation from the Income Tax Refund Fund | ||||||
11 | for the purpose of paying
refunds upon the order of the | ||||||
12 | Director in accordance with the provisions of
this Section.
| ||||||
13 | (e) Deposits into the Education Assistance Fund and the | ||||||
14 | Income Tax
Surcharge Local Government Distributive Fund.
| ||||||
15 | On July 1, 1991, and thereafter, of the amounts collected | ||||||
16 | pursuant to
subsections (a) and (b) of Section 201 of this Act, | ||||||
17 | minus deposits into the
Income Tax Refund Fund, the Department | ||||||
18 | shall deposit 7.3% into the
Education Assistance Fund in the | ||||||
19 | State Treasury. Beginning July 1, 1991,
and continuing through | ||||||
20 | January 31, 1993, of the amounts collected pursuant to
| ||||||
21 | subsections (a) and (b) of Section 201 of the Illinois Income | ||||||
22 | Tax Act, minus
deposits into the Income Tax Refund Fund, the | ||||||
23 | Department shall deposit 3.0%
into the Income Tax Surcharge | ||||||
24 | Local Government Distributive Fund in the State
Treasury. | ||||||
25 | Beginning February 1, 1993 and continuing through June 30, | ||||||
26 | 1993, of
the amounts collected pursuant to subsections (a) and | ||||||
27 | (b) of Section 201 of the
Illinois Income Tax Act, minus | ||||||
28 | deposits into the Income Tax Refund Fund, the
Department shall | ||||||
29 | deposit 4.4% into the Income Tax Surcharge Local Government
| ||||||
30 | Distributive Fund in the State Treasury. Beginning July 1, | ||||||
31 | 1993, and
continuing through June 30, 1994, of the amounts | ||||||
32 | collected under subsections
(a) and (b) of Section 201 of this | ||||||
33 | Act, minus deposits into the Income Tax
Refund Fund, the | ||||||
34 | Department shall deposit 1.475% into the Income Tax Surcharge
| ||||||
35 | Local Government Distributive Fund in the State Treasury.
| ||||||
36 | (Source: P.A. 92-11, eff. 6-11-01; 92-16,
eff. 6-28-01; 92-600, |
| |||||||
| |||||||
1 | eff. 6-28-02; 93-32, eff. 6-20-03.)
| ||||||
2 | Section 99. Effective date. This Act takes effect upon | ||||||
3 | becoming law.
|