93RD GENERAL ASSEMBLY
State of Illinois
2003 and 2004
HB7294

 

Introduced 4/23/2004, by Rep. William Davis

 

SYNOPSIS AS INTRODUCED:
 
35 ILCS 5/201   from Ch. 120, par. 2-201
35 ILCS 5/202.5 new
35 ILCS 5/204   from Ch. 120, par. 2-204
35 ILCS 5/901   from Ch. 120, par. 9-901

    Amends the Illinois Income Tax Act. Increases the rate of tax on individuals and on trusts and estates from 3% to 4%. Increases the amount of the standard exemption for individuals from $2,000 to $12,000. Effective immediately.


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FISCAL NOTE ACT MAY APPLY

 

 

A BILL FOR

 

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1     AN ACT concerning taxes.
 
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

 

 

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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

 

 

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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

 

 

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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

 

 

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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

 

 

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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

 

 

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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

 

 

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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

 

 

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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

 

 

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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

 

 

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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:

 

 

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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

 

 

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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

 

 

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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.

 

 

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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

 

 

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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

 

 

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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"

 

 

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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

 

 

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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

 

 

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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"

 

 

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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.

 

 

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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

 

 

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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

 

 

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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

 

 

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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

 

 

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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

 

 

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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

 

 

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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

 

 

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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

 

 

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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,

 

 

HB7294 - 31 - LRB093 21640 BDD 49186 b

1 eff. 6-28-02; 93-32, eff. 6-20-03.)
 
2     Section 99. Effective date. This Act takes effect upon
3 becoming law.