|
|
|
HB2706 Enrolled |
|
LRB094 03732 BDD 33741 b |
|
|
1 |
| AN ACT concerning revenue.
|
2 |
| Be it enacted by the People of the State of Illinois,
|
3 |
| represented in the General Assembly:
|
4 |
| Section 5. The Illinois Lottery Law is amended by changing |
5 |
| Sections 3, 4, 5, 7.1, 7.6, 7.11, 9, 10, 10.1, 10.1a, 10.2, |
6 |
| 10.6, 10.7, 12, 13, 14, 14.3, 19, 21, and 24 as follows:
|
7 |
| (20 ILCS 1605/3) (from Ch. 120, par. 1153)
|
8 |
| Sec. 3. For the purposes of this Act:
|
9 |
| a. "Lottery" or "State Lottery" means the lottery or |
10 |
| lotteries
established and operated pursuant to this Act.
|
11 |
| b. "Board" means the Lottery Control Board created by this |
12 |
| Act.
|
13 |
| c. "Department" means the Department of Revenue
the |
14 |
| Lottery .
|
15 |
| d. "Director" means the Director of Revenue
the Department |
16 |
| of the
Lottery .
|
17 |
| e. "Chairman" means the Chairman of the Lottery Control |
18 |
| Board.
|
19 |
| f. "Multi-state game directors" means such persons, |
20 |
| including the
Superintendent
Director of the Department of the |
21 |
| Lottery , as may be designated by an
agreement between the |
22 |
| Division
Department of the Lottery and one or more additional
|
23 |
| lotteries operated under the laws of another state or states.
|
24 |
| g. "Division" means the Division of the State Lottery of |
25 |
| the Department of Revenue.
|
26 |
| h. "Superintendent" means the Superintendent of the |
27 |
| Division of the State Lottery of the Department of Revenue.
|
28 |
| (Source: P.A. 85-183.)
|
29 |
| (20 ILCS 1605/4) (from Ch. 120, par. 1154)
|
30 |
| Sec. 4. The Department of the Lottery is
established to |
31 |
| implement and regulate the State Lottery in the manner
provided |
|
|
|
HB2706 Enrolled |
- 2 - |
LRB094 03732 BDD 33741 b |
|
|
1 |
| in this Act. |
2 |
| In accordance with Executive Order No. 9 (2003), the |
3 |
| Division of the State Lottery is established within the |
4 |
| Department of Revenue. Unless otherwise provided by law, the |
5 |
| Division of the State Lottery shall be subject to and governed |
6 |
| by all of the laws and rules applicable to the Department.
|
7 |
| (Source: P.A. 84-1128.)
|
8 |
| (20 ILCS 1605/5) (from Ch. 120, par. 1155)
|
9 |
| Sec. 5. The Division
Department of the Lottery shall be |
10 |
| under
the supervision and direction
of a Superintendent
|
11 |
| Director of the Lottery , who
shall be a person qualified by
|
12 |
| training and experience to perform the duties required by this |
13 |
| Act. The
Superintendent
Director shall be appointed by the |
14 |
| Governor, by and with the advice
and consent of the Senate. The |
15 |
| term of office of the Superintendent
Director shall
expire on |
16 |
| the third Monday of January in odd numbered years provided that
|
17 |
| he or she shall hold his office until a
his successor is |
18 |
| appointed and qualified.
|
19 |
| Any vacancy occurring in the office of the Superintendent
|
20 |
| Director shall be
filled in the same manner as the original |
21 |
| appointment.
|
22 |
| The Superintendent
Director shall devote his or her entire |
23 |
| time and attention to the
duties of the
his office and shall |
24 |
| not be engaged in any other profession or
occupation. The |
25 |
| Superintendent
He shall receive such salary as shall be |
26 |
| provided by law.
|
27 |
| (Source: P.A. 84-1128.)
|
28 |
| (20 ILCS 1605/7.1) (from Ch. 120, par. 1157.1)
|
29 |
| Sec. 7.1. The Department shall promulgate such rules and
|
30 |
| regulations governing the establishment
and operation of a |
31 |
| State lottery as it deems necessary to carry out the
purposes |
32 |
| of this Act. Such rules and regulations shall be subject to the
|
33 |
| provisions of The Illinois Administrative Procedure Act. The |
34 |
| Division shall issue written game rules, play instructions, |
|
|
|
HB2706 Enrolled |
- 3 - |
LRB094 03732 BDD 33741 b |
|
|
1 |
| directives, operations manuals, brochures, or any other |
2 |
| publications necessary to conduct specific games, as |
3 |
| authorized by rule by the Department.
Any written game rules, |
4 |
| play instructions, directives, operations manuals,
brochures, |
5 |
| or other game publications issued by the Division
Department |
6 |
| that relate
to a specific lottery game shall be maintained as a |
7 |
| public record in the
Division's
Department's principal office, |
8 |
| and made available for public inspection and
copying but shall |
9 |
| be exempt from the rulemaking procedures of the Illinois
|
10 |
| Administrative Procedure Act. However, when such written |
11 |
| materials contain
any policy of general applicability, the |
12 |
| Division
Department shall formulate and
adopt such policy as a |
13 |
| rule in accordance with the provisions of the
Illinois |
14 |
| Administrative Procedure Act. In addition, the Division
|
15 |
| Department shall
publish each January in the Illinois Register |
16 |
| a list of all game-specific
rules, play instructions, |
17 |
| directives, operations manuals, brochures, or
other |
18 |
| game-specific publications issued by the Division
Department |
19 |
| during the
previous year and instructions concerning how the |
20 |
| public may obtain copies
of these materials from the Division
|
21 |
| Department .
|
22 |
| (Source: P.A. 86-433.)
|
23 |
| (20 ILCS 1605/7.6) (from Ch. 120, par. 1157.6)
|
24 |
| Sec. 7.6. The Board shall advise and make recommendations |
25 |
| to the
Superintendent or the Director regarding the functions |
26 |
| and operations of the State Lottery. A copy of all
such |
27 |
| recommendations shall also be forwarded to the Governor, the |
28 |
| Attorney
General, the Speaker of the House, the President of |
29 |
| the Senate and the
minority leaders of both houses.
|
30 |
| (Source: P.A. 84-1128.)
|
31 |
| (20 ILCS 1605/7.11) (from Ch. 120, par. 1157.11)
|
32 |
| Sec. 7.11. The Division
Department may establish and |
33 |
| collect nominal charges
for promotional products ("premiums") |
34 |
| and other promotional materials
produced or acquired by the |
|
|
|
HB2706 Enrolled |
- 4 - |
LRB094 03732 BDD 33741 b |
|
|
1 |
| Division
Department as part of its advertising and
promotion |
2 |
| activities. Such premiums or other promotional materials may be
|
3 |
| sold to individuals, government agencies and not-for-profit |
4 |
| organizations,
but not to for-profit enterprises for the |
5 |
| purpose of resale. Other State
agencies shall be charged no |
6 |
| more than the cost to the Division
Department of the
premium or |
7 |
| promotional material. All proceeds from the sale of premiums or
|
8 |
| promotional materials shall be deposited in the State Lottery |
9 |
| Fund in the
State Treasury.
|
10 |
| (Source: P.A. 86-1220.)
|
11 |
| (20 ILCS 1605/9) (from Ch. 120, par. 1159)
|
12 |
| Sec. 9. The Superintendent
Director , as administrative |
13 |
| head of
the Division
Department of the
Lottery , shall direct |
14 |
| and supervise all its administrative and
technical activities |
15 |
| and shall report to the Director . In addition to the duties |
16 |
| imposed upon him
elsewhere in this Act, it
shall be the |
17 |
| Superintendent's
his duty:
|
18 |
| a. To supervise and administer the operation of the lottery |
19 |
| in
accordance with the provisions of this Act or such
rules and |
20 |
| regulations of the Department
adopted thereunder.
|
21 |
| b. To attend meetings of the Board
Department or to appoint |
22 |
| a designee to
attend in his stead.
|
23 |
| c. To employ and direct such personnel in accord with the |
24 |
| Personnel Code,
as may be necessary to carry out the purposes |
25 |
| of this Act. The Superintendent may, subject to the approval of |
26 |
| the Director, use the services, personnel, or facilities of the |
27 |
| Department.
In addition , the Superintendent
Director
may by |
28 |
| agreement secure such services as he or she may deem necessary
|
29 |
| from any other department, agency, or unit of the State |
30 |
| government, and
may employ and compensate such consultants and |
31 |
| technical assistants as may
be required and is otherwise |
32 |
| permitted by law.
|
33 |
| d. To license, in accordance with the provisions of |
34 |
| Sections 10 and 10.1
of this Act and the rules and regulations |
35 |
| of the Department
adopted thereunder,
as agents to sell lottery |
|
|
|
HB2706 Enrolled |
- 5 - |
LRB094 03732 BDD 33741 b |
|
|
1 |
| tickets such persons as in his opinion will best
serve the |
2 |
| public convenience and promote the sale of tickets or shares.
|
3 |
| The Superintendent
Director may require a bond from every |
4 |
| licensed agent, in such
amount as provided in the rules and |
5 |
| regulations of the Department. Every licensed
agent shall |
6 |
| prominently display his license, or a copy thereof, as provided
|
7 |
| in the rules and regulations of the Department.
|
8 |
| e. To suspend or revoke any license issued pursuant to this |
9 |
| Act or the
rules and regulations promulgated by the Department |
10 |
| thereunder.
|
11 |
| f. To confer regularly as necessary or desirable and not
|
12 |
| less than once
every month with the Lottery Control Board on |
13 |
| the operation and administration
of the Lottery; to make |
14 |
| available for inspection by the Board or any member
of the |
15 |
| Board, upon request, all books, records, files, and other |
16 |
| information
and documents of his office; to advise the Board |
17 |
| and recommend such rules
and regulations and such other matters |
18 |
| as he deems necessary and advisable
to improve the operation |
19 |
| and administration of the lottery.
|
20 |
| g. To enter into contracts for the operation of the |
21 |
| lottery, or any part
thereof, and into contracts for the |
22 |
| promotion of the lottery on behalf of
the Department with any |
23 |
| person, firm or corporation, to perform any of the
functions |
24 |
| provided for in this Act or the rules and regulations |
25 |
| promulgated
thereunder. The Department shall not expend State |
26 |
| funds on a contractual
basis for such functions unless those |
27 |
| functions and expenditures are expressly
authorized by the |
28 |
| General Assembly.
|
29 |
| h. To enter into an agreement or agreements with the |
30 |
| management of state
lotteries operated pursuant to the laws of |
31 |
| other states for the purpose of
creating and operating a |
32 |
| multi-state lottery game wherein a separate and
distinct prize |
33 |
| pool would be combined to award larger prizes to the public
|
34 |
| than could be offered by the several state lotteries, |
35 |
| individually. No
tickets or shares offered in connection with a |
36 |
| multi-state lottery game
shall be sold within the State of |
|
|
|
HB2706 Enrolled |
- 6 - |
LRB094 03732 BDD 33741 b |
|
|
1 |
| Illinois, except those offered by and
through the Department. |
2 |
| No such agreement shall purport to pledge the full
faith and |
3 |
| credit of the State of Illinois, nor shall the Department |
4 |
| expend
State funds on a contractual basis in connection with |
5 |
| any such game unless
such expenditures are expressly authorized |
6 |
| by the General Assembly,
provided, however, that in the event |
7 |
| of error or omission by the Illinois
State Lottery in the |
8 |
| conduct of the game, as determined by the multi-state
game |
9 |
| directors, the Department shall be authorized to pay a prize |
10 |
| winner or
winners the lesser of a disputed prize or $1,000,000, |
11 |
| any such payment to
be made solely from funds appropriated for |
12 |
| game prize purposes. The
Department shall be authorized to |
13 |
| share in the ordinary operating expenses
of any such |
14 |
| multi-state lottery game, from funds appropriated by the |
15 |
| General Assembly,
and in the event the multi-state game control |
16 |
| offices are physically
located within the State of Illinois, |
17 |
| the Department is authorized to
advance start-up operating |
18 |
| costs not to exceed $150,000, subject to
proportionate |
19 |
| reimbursement of such costs by the other participating state
|
20 |
| lotteries. The Department shall be authorized to share |
21 |
| proportionately in
the costs of establishing a liability |
22 |
| reserve fund from funds appropriated
by the General Assembly. |
23 |
| The Department is authorized to transfer prize
award funds |
24 |
| attributable to Illinois sales of multi-state lottery game |
25 |
| tickets to
the multi-state control office, or its designated |
26 |
| depository, for deposit
to such game pool account or accounts |
27 |
| as may be established by the
multi-state game directors, the |
28 |
| records of which account or accounts shall
be available at all |
29 |
| times for inspection in an audit by the Auditor General
of |
30 |
| Illinois and any other auditors pursuant to the laws of the |
31 |
| State of
Illinois.
No multi-state game prize awarded to a |
32 |
| nonresident of Illinois, with
respect to a ticket or share |
33 |
| purchased in a state other than the State of
Illinois, shall be |
34 |
| deemed to be a prize awarded under this Act for the
purpose of |
35 |
| taxation under the Illinois Income Tax Act.
All of the net |
36 |
| revenues accruing from the sale of multi-state lottery
tickets |
|
|
|
HB2706 Enrolled |
- 7 - |
LRB094 03732 BDD 33741 b |
|
|
1 |
| or shares shall be transferred into the Common School Fund |
2 |
| pursuant
to Section 7.2.
The Department shall promulgate such |
3 |
| rules as may be appropriate to
implement the provisions of this |
4 |
| Section.
|
5 |
| i. To make a continuous study and investigation of (1) the |
6 |
| operation and
the administration of similar laws which may be |
7 |
| in effect in other states
or countries, (2) any literature on |
8 |
| the subject which from time to time
may be published or |
9 |
| available, (3) any Federal laws which may affect the
operation |
10 |
| of the
lottery, and (4) the reaction of Illinois citizens to |
11 |
| existing and potential
features of the lottery with a view to |
12 |
| recommending or effecting changes
that will tend to serve the |
13 |
| purposes of this Act.
|
14 |
| j. To report monthly to the State Treasurer and the Lottery |
15 |
| Control Board
a full and complete statement of lottery |
16 |
| revenues, prize disbursements and
other expenses for each month |
17 |
| and the amounts to be transferred to the Common
School Fund |
18 |
| pursuant to Section 7.2 or such other funds as are otherwise
|
19 |
| authorized by Section 21.2 of this Act, and to
make an annual |
20 |
| report, which shall include a full and complete statement
of |
21 |
| lottery revenues, prize disbursements and other expenses, to |
22 |
| the Governor
and the Board. All reports required by this |
23 |
| subsection shall be public
and copies of all
such reports shall |
24 |
| be sent to the Speaker of the House, the President of
the |
25 |
| Senate, and the minority leaders of both houses.
|
26 |
| (Source: P.A. 85-183.)
|
27 |
| (20 ILCS 1605/10) (from Ch. 120, par. 1160)
|
28 |
| Sec. 10. The Division
Department , upon application |
29 |
| therefor on forms prescribed
by the Division
Department , and |
30 |
| upon a determination by the Division
Department that the
|
31 |
| applicant meets all of the qualifications specified in this |
32 |
| Act, shall
issue a license as an agent to sell lottery tickets |
33 |
| or shares. No license
as an agent to sell lottery tickets or |
34 |
| shares shall be issued to any person
to engage in business |
35 |
| exclusively as a lottery sales agent.
|
|
|
|
HB2706 Enrolled |
- 8 - |
LRB094 03732 BDD 33741 b |
|
|
1 |
| Before issuing such license the Superintendent
Director |
2 |
| shall consider (a) the financial
responsibility and security of |
3 |
| the person and his business or activity, (b)
the accessibility |
4 |
| of his place of business or activity to the public, (c)
the |
5 |
| sufficiency of existing licenses to serve the public |
6 |
| convenience, (d)
the volume of expected sales, and (e) such |
7 |
| other factors as he or she may
deem appropriate.
|
8 |
| Until September 1, 1987, the provisions of Sections 2a, 4, |
9 |
| 5, 5a, 5b,
5c, 5d, 5e, 5f, 5g, 5h, 5i, 5j, 6, 6a, 6b, 6c, 8, 9, |
10 |
| 10, 12 and 13.5
of the Retailers' Occupation Tax Act which are |
11 |
| not inconsistent
with this Act shall apply to the subject |
12 |
| matter of this Act to the same
extent as if such provisions |
13 |
| were included in this Act. For purposes of
this Act, references |
14 |
| in such incorporated Sections of the Retailers'
Occupation Tax |
15 |
| Act to retailers, sellers or persons engaged in the business
of |
16 |
| selling tangible personal property mean persons engaged in |
17 |
| selling
lottery tickets or shares; references in such |
18 |
| incorporated Sections to
sales of tangible personal property |
19 |
| mean the selling of lottery tickets or
shares; and references |
20 |
| in such incorporated Sections to
certificates of registration |
21 |
| mean licenses issued under this Act. The
provisions of the |
22 |
| Retailers' Occupation Tax Act as heretofore applied to
the |
23 |
| subject matter of this Act shall not apply with respect to |
24 |
| tickets sold
by or delivered to lottery sales agents on and |
25 |
| after September 1, 1987, but
such provisions shall continue to |
26 |
| apply with respect to transactions
involving the sale and |
27 |
| delivery of tickets prior to September 1, 1987.
|
28 |
| All licenses issued by the Division
Department under this |
29 |
| Act shall be valid
for a period not to exceed 2 years after |
30 |
| issuance unless sooner
revoked, canceled or suspended as in |
31 |
| this Act provided. No license issued
under this Act shall be |
32 |
| transferable or assignable. Such license shall be
|
33 |
| conspicuously displayed in the place of business conducted by |
34 |
| the licensee
in Illinois where lottery tickets or shares are to |
35 |
| be sold under such license.
|
36 |
| For purposes of this Section, the term "person" shall be |
|
|
|
HB2706 Enrolled |
- 9 - |
LRB094 03732 BDD 33741 b |
|
|
1 |
| construed to
mean and include an individual, association, |
2 |
| partnership, corporation,
club, trust, estate, society, |
3 |
| company, joint stock company, receiver,
trustee, referee, any |
4 |
| other person acting in a fiduciary or representative
capacity |
5 |
| who is appointed by a court, or any combination of individuals.
|
6 |
| "Person" includes any department, commission, agency or
|
7 |
| instrumentality of the State, including any county, city, |
8 |
| village, or
township and any agency or instrumentality thereof.
|
9 |
| (Source: P.A. 86-1475; 87-895.)
|
10 |
| (20 ILCS 1605/10.1) (from Ch. 120, par. 1160.1)
|
11 |
| Sec. 10.1. The following are ineligible for any license |
12 |
| under this Act:
|
13 |
| (a) any person who has been convicted of a felony;
|
14 |
| (b) any person who is or has been a professional gambler or |
15 |
| gambling
promoter;
|
16 |
| (c) any person who has engaged in bookmaking or other forms |
17 |
| of illegal
gambling;
|
18 |
| (d) any person who is not of good character and reputation |
19 |
| in the
community in which he resides;
|
20 |
| (e) any person who has been found guilty of any fraud or
|
21 |
| misrepresentation in any connection;
|
22 |
| (f) any firm or corporation in which a person defined in |
23 |
| (a), (b), (c),
(d) or (e) has a proprietary, equitable or |
24 |
| credit interest of 5% or more.
|
25 |
| (g) any organization in which a person defined in (a), (b), |
26 |
| (c), (d) or
(e) is an officer, director, or managing agent, |
27 |
| whether compensated or not;
|
28 |
| (h) any organization in which a person defined in (a), (b), |
29 |
| (c), (d), or
(e) is to participate in the management or sales |
30 |
| of lottery tickets or
shares.
|
31 |
| However, with respect to persons defined in (a), the |
32 |
| Department may grant
any such person a license under this Act |
33 |
| when:
|
34 |
| 1) at least 10 years have elapsed since the date when the |
35 |
| sentence for
the most recent such conviction was satisfactorily |
|
|
|
HB2706 Enrolled |
- 10 - |
LRB094 03732 BDD 33741 b |
|
|
1 |
| completed;
|
2 |
| 2) the applicant has no history of criminal activity |
3 |
| subsequent to such conviction;
|
4 |
| 3) the applicant has complied with all conditions of |
5 |
| probation, conditional
discharge, supervision, parole or |
6 |
| mandatory supervised release; and
|
7 |
| 4) the applicant presents at least 3 letters of |
8 |
| recommendation from responsible
citizens in his community who |
9 |
| personally can attest that the character and
attitude of the |
10 |
| applicant indicate that he is unlikely
to commit another crime.
|
11 |
| The Division
Department may revoke, without notice or a |
12 |
| hearing, the license of
any agent who violates this Act or any |
13 |
| rule or regulation promulgated
pursuant to this Act. However, |
14 |
| if the Division
Department does revoke a license
without notice |
15 |
| and an opportunity for a hearing, the Division
Department |
16 |
| shall, by
appropriate notice, afford the person whose license |
17 |
| has been revoked an
opportunity for a hearing within 30 days |
18 |
| after the revocation order has
been issued. As a result of any |
19 |
| such hearing, the Division
Department may confirm
its action in |
20 |
| revoking the license, or it may order the restoration of such
|
21 |
| license.
|
22 |
| (Source: P.A. 82-404.)
|
23 |
| (20 ILCS 1605/10.1a) (from Ch. 120, par. 1160.1a)
|
24 |
| Sec. 10.1a. In addition to other grounds specified in this |
25 |
| Act, the
Division
Department shall refuse to issue and shall |
26 |
| suspend the license of any lottery
sales agency who fails to |
27 |
| file a return, or to pay the tax, penalty or
interest shown in |
28 |
| a filed return, or to pay any final assessment of tax,
penalty |
29 |
| or interest, as required by any tax Act administered by the
|
30 |
| Illinois Department of Revenue , until such time as the |
31 |
| requirements of any
such tax Act are satisfied, unless the |
32 |
| agency is contesting, in accordance
with the procedures |
33 |
| established by the appropriate revenue Act, its
liability for |
34 |
| the tax or the amount of tax. The Division
Department shall
|
35 |
| affirmatively verify the tax status of every sales agency |
|
|
|
HB2706 Enrolled |
- 11 - |
LRB094 03732 BDD 33741 b |
|
|
1 |
| before issuing or
renewing a license. For purposes of this |
2 |
| Section, a sales agency shall not
be considered delinquent in |
3 |
| the payment of a tax if the agency (a) has
entered into an |
4 |
| agreement with the Department of Revenue for the payment of
all |
5 |
| such taxes that are due and (b) is in compliance with the |
6 |
| agreement.
|
7 |
| (Source: P.A. 87-341.)
|
8 |
| (20 ILCS 1605/10.2) (from Ch. 120, par. 1160.2)
|
9 |
| Sec. 10.2. Application and other fees. Each application |
10 |
| for a new lottery license must be accompanied by a one-time |
11 |
| application fee of $50; the Division
Department , however, may |
12 |
| waive the fee for licenses of limited duration as provided by |
13 |
| Department rule. Each application for renewal of a lottery |
14 |
| license must be accompanied by a renewal fee of $25. Each |
15 |
| lottery licensee granted on-line status pursuant to the |
16 |
| Department's rules must pay a fee of $10 per week as partial |
17 |
| reimbursement for telecommunications charges incurred by the |
18 |
| Department in providing access to the lottery's on-line gaming |
19 |
| system. The Department, by rule, may increase or decrease the |
20 |
| amount of these fees.
|
21 |
| (Source: P.A. 93-840, eff. 7-30-04.)
|
22 |
| (20 ILCS 1605/10.6) (from Ch. 120, par. 1160.6)
|
23 |
| Sec. 10.6. The Division
Department shall make an effort to |
24 |
| more directly inform
players of the odds of winning prizes. |
25 |
| This effort shall include, at a
minimum, that the Division
|
26 |
| Department require all ticket agents to display a placard
|
27 |
| stating the odds of winning for each game offered by that |
28 |
| agent.
|
29 |
| (Source: P.A. 85-183.)
|
30 |
| (20 ILCS 1605/10.7)
|
31 |
| Sec. 10.7. Compulsive gambling.
|
32 |
| (a) Each lottery sales agent shall post a statement |
33 |
| regarding obtaining
assistance with gambling problems and |
|
|
|
HB2706 Enrolled |
- 12 - |
LRB094 03732 BDD 33741 b |
|
|
1 |
| including a toll-free "800" telephone
number providing crisis |
2 |
| counseling and referral services to families
experiencing |
3 |
| difficulty as a result of problem or compulsive gambling. The
|
4 |
| text of the statement shall be determined by rule by the |
5 |
| Department of
Human Services, shall be no more than
one |
6 |
| sentence in length, and shall be posted on the placard required |
7 |
| under
Section 10.6. The signs shall be provided by the |
8 |
| Department of Human
Services.
|
9 |
| (b) The Division
Department shall print a statement |
10 |
| regarding obtaining assistance
with gambling problems, the |
11 |
| text of which shall be determined by rule by the
Department of |
12 |
| Human Services, on all
paper stock it provides to
the general |
13 |
| public.
|
14 |
| (c) The Division
Department shall print a statement of no |
15 |
| more than one sentence
in length regarding obtaining assistance |
16 |
| with gambling problems and including a
toll-free "800" number |
17 |
| providing crisis counseling and referral services to
families |
18 |
| experiencing difficulty as a result of problem or compulsive |
19 |
| gambling
on the back of all lottery tickets.
|
20 |
| (Source: P.A. 89-374, eff. 1-1-96; 89-507, eff. 7-1-97.)
|
21 |
| (20 ILCS 1605/12) (from Ch. 120, par. 1162)
|
22 |
| Sec. 12. The public inspection and copying of the records |
23 |
| and data of the
Division
Department and the Board shall be |
24 |
| generally governed by the provisions of the
Freedom of |
25 |
| Information Act except that the following shall additionally be
|
26 |
| exempt from inspection and copying:
|
27 |
| (i) information privileged against introduction in |
28 |
| judicial proceedings;
|
29 |
| (ii) internal communications of the several agencies;
|
30 |
| (iii) information concerning secret manufacturing |
31 |
| processes or
confidential data submitted by any person under |
32 |
| this Act;
|
33 |
| (iv) any creative proposals, scripts, storyboards or other |
34 |
| materials
prepared by or for the Division
Department , prior to |
35 |
| the placement of the materials in
the media, if the prior |
|
|
|
HB2706 Enrolled |
- 13 - |
LRB094 03732 BDD 33741 b |
|
|
1 |
| release of the materials would compromise the
effectiveness of |
2 |
| an advertising campaign.
|
3 |
| (Source: P.A. 88-522.)
|
4 |
| (20 ILCS 1605/13) (from Ch. 120, par. 1163)
|
5 |
| Sec. 13. Except as otherwise provided in Section 13.1, no |
6 |
| prize, nor any
portion of a prize, nor any right of any
person |
7 |
| to a prize awarded shall be assignable. Any prize, or portion
|
8 |
| thereof remaining unpaid at the death of a prize winner, may be |
9 |
| paid to the
estate
of such deceased prize winner, or to the |
10 |
| trustee under a revocable living
trust established by the |
11 |
| deceased prize winner as settlor, provided that a
copy of such |
12 |
| a trust has been filed with the Department along with a
|
13 |
| notarized letter of direction from the settlor and no written |
14 |
| notice of
revocation has been received by the Division
|
15 |
| Department prior to the settlor's
death. Following such a |
16 |
| settlor's death and prior to any payment to such a
successor |
17 |
| trustee, the Superintendent
Director shall obtain from the |
18 |
| trustee and each
trust beneficiary a written agreement to |
19 |
| indemnify and hold the Department and the Division
harmless |
20 |
| with respect to any claims that may be asserted against the
|
21 |
| Department or the Division arising from payment to or through |
22 |
| the trust. Notwithstanding
any other provision of this Section, |
23 |
| any person pursuant to an appropriate
judicial order may be |
24 |
| paid
the prize to which a winner is entitled, and all or part |
25 |
| of any prize
otherwise payable by
State warrant under this |
26 |
| Section shall be withheld upon certification to
the State |
27 |
| Comptroller from the Illinois Department of Public Aid as
|
28 |
| provided in Section 10-17.5 of The Illinois Public Aid Code. |
29 |
| The Director
and the Superintendent shall be discharged of all |
30 |
| further liability upon payment of a prize
pursuant to this |
31 |
| Section.
|
32 |
| (Source: P.A. 93-465, eff. 1-1-04.)
|
33 |
| (20 ILCS 1605/14) (from Ch. 120, par. 1164)
|
34 |
| Sec. 14. No person shall sell a ticket or share at a price |
|
|
|
HB2706 Enrolled |
- 14 - |
LRB094 03732 BDD 33741 b |
|
|
1 |
| greater than that
fixed by rule or regulation of the Department |
2 |
| or the Division . No person other than a
licensed lottery sales |
3 |
| agent or distributor shall sell or resell lottery
tickets or |
4 |
| shares. No person shall charge a fee to redeem a winning ticket |
5 |
| or
share.
|
6 |
| Any person convicted of violating this Section shall be |
7 |
| guilty of a
Class B misdemeanor; provided, that if any offense |
8 |
| under this Section is
a subsequent offense, the offender shall |
9 |
| be guilty of a Class 4 felony.
|
10 |
| (Source: P.A. 87-1271.)
|
11 |
| (20 ILCS 1605/14.3)
|
12 |
| Sec. 14.3. Misuse of proprietary material prohibited. |
13 |
| Except as may be
provided in Section 7.11, or by bona fide sale |
14 |
| or by prior authorization from
the Department or the Division , |
15 |
| or otherwise by law, all premiums, promotional and other
|
16 |
| proprietary material produced or acquired by the Division
|
17 |
| Department as part of its
advertising and promotional |
18 |
| activities shall remain the property of the
Department. Nothing |
19 |
| herein shall be construed to affect the rights or
obligations |
20 |
| of the Department or any other person under federal or State
|
21 |
| trademark or copyright laws.
|
22 |
| (Source: P.A. 88-522.)
|
23 |
| (20 ILCS 1605/19) (from Ch. 120, par. 1169)
|
24 |
| Sec. 19. The Division
Department shall establish an |
25 |
| appropriate period for the
claiming of prizes for each lottery |
26 |
| game offered. Each claim period shall
be stated in game rules |
27 |
| and written play
instructions issued by the Superintendent
|
28 |
| Director in accordance with Section 7.1 of
this Act. Written |
29 |
| play instructions shall be made available to all players
|
30 |
| through sales agents licensed to sell game tickets or shares.
|
31 |
| Prizes for lottery games which involve the purchase of a |
32 |
| physical lottery
ticket may be claimed only by presentation of |
33 |
| a valid winning lottery
ticket that matches validation records |
34 |
| on file with the Lottery; no
claim may be honored which is |
|
|
|
HB2706 Enrolled |
- 15 - |
LRB094 03732 BDD 33741 b |
|
|
1 |
| based on the assertion that the ticket was
lost or stolen. No |
2 |
| lottery ticket which has been altered, mutilated, or
fails to |
3 |
| pass validation tests shall be deemed to be a winning ticket.
|
4 |
| If no claim
is made for the money within the established |
5 |
| claim period, the prize may
be included in the prize pool of |
6 |
| such special drawing or drawings as the
Division
Department |
7 |
| may, from time to time, designate. Unclaimed
multi-state game |
8 |
| prize money may be included in the multi-state
prize
pool for |
9 |
| such special drawing or drawings as the multi-state game |
10 |
| directors
may, from time to time, designate. Any bonuses |
11 |
| offered by the Department
to sales agents who sell winning |
12 |
| tickets or shares shall be
payable to such agents regardless of |
13 |
| whether or not the prize money on the
ticket or share is |
14 |
| claimed, provided that the agent can be identified as
the |
15 |
| vendor of the winning ticket or share, and
that the winning |
16 |
| ticket or share was sold on or after January 1, 1984.
All |
17 |
| unclaimed prize money not included in the prize pool of a |
18 |
| special
drawing shall be transferred to the Common School Fund.
|
19 |
| (Source: P.A. 90-724, eff. 1-1-99.)
|
20 |
| (20 ILCS 1605/21) (from Ch. 120, par. 1171)
|
21 |
| Sec. 21. All lottery sales agents or distributors shall be |
22 |
| liable to the
Lottery for any and all tickets accepted or |
23 |
| generated by any employee or
representative of that agent or |
24 |
| distributor, and such tickets shall be deemed
to have been |
25 |
| purchased by the agent or distributor unless returned to the
|
26 |
| Lottery within the time and in the manner prescribed by the |
27 |
| Superintendent
Director . All
moneys received by such agents or |
28 |
| distributors from the sale of lottery tickets
or shares, less |
29 |
| the amount retained as compensation for the sale of the tickets
|
30 |
| or shares and the amount paid out as prizes, shall be paid over |
31 |
| to a lottery
representative or deposited in a bank or savings |
32 |
| and loan association approved
by the State Treasurer, as |
33 |
| prescribed by the Superintendent
Director .
|
34 |
| No bank or savings and loan association shall receive |
35 |
| public funds as
permitted by this Section, unless it has |
|
|
|
HB2706 Enrolled |
- 16 - |
LRB094 03732 BDD 33741 b |
|
|
1 |
| complied with the requirements
established pursuant to Section |
2 |
| 6 of the Public Funds Investment Act.
|
3 |
| Each payment or deposit shall be accompanied by a report of |
4 |
| the agent's
receipts and transactions in the sale of lottery |
5 |
| tickets in such form and
containing such information as the |
6 |
| Superintendent
Director may require. Any
discrepancies in such |
7 |
| receipts and transactions may be resolved as
provided by the |
8 |
| rules and regulations of the Department.
|
9 |
| If any money due the Lottery by a sales agent or |
10 |
| distributor is not paid
when due or demanded, it shall |
11 |
| immediately become delinquent and be billed
on a subsequent |
12 |
| monthly statement. If on the closing date for any monthly
|
13 |
| statement a delinquent amount previously billed of more than |
14 |
| $50 remains
unpaid, interest in such amount shall be accrued at |
15 |
| the rate of 2% per month
or fraction thereof from the date when |
16 |
| such delinquent amount becomes past
due until such delinquent |
17 |
| amount, including interest, penalty and other
costs and charges |
18 |
| that the Department may incur in collecting such amounts, is
|
19 |
| paid. In case any agent or distributor fails to pay any moneys |
20 |
| due the Lottery
within 30 days after a second bill or statement |
21 |
| is rendered to the agent or
distributor, such amount shall be |
22 |
| deemed seriously delinquent and may be
referred by the |
23 |
| Department to a collection agency or credit bureau for
|
24 |
| collection. Any contract entered into by the Department for the |
25 |
| collection of
seriously delinquent accounts with a collection |
26 |
| agency or credit bureau may be
satisfied by a commercially |
27 |
| reasonable percentage of the delinquent account
recouped, |
28 |
| which shall be negotiated by the Department in accordance with
|
29 |
| commercially accepted standards. Any costs incurred by the |
30 |
| Department or
others authorized to act in its behalf in |
31 |
| collecting such delinquencies may be
assessed against the agent |
32 |
| or distributor and included as a part of the
delinquent |
33 |
| account.
|
34 |
| In case of failure of an agent or distributor to pay a |
35 |
| seriously delinquent
amount, or any portion thereof, including |
36 |
| interest, penalty and costs,
the Division
Department may issue |
|
|
|
HB2706 Enrolled |
- 17 - |
LRB094 03732 BDD 33741 b |
|
|
1 |
| a Notice of Assessment. In determining amounts
shown on the |
2 |
| Notice of Assessment, the Division
Department shall utilize the
|
3 |
| financial information available from its records. Such Notice |
4 |
| of
Assessment shall be prima facie correct and shall be prima |
5 |
| facie evidence
of delinquent sums due under this Section at any |
6 |
| hearing before the Board,
or its Hearing Officers, or at any |
7 |
| other legal proceeding. Reproduced
copies of the Division's
|
8 |
| Department's records relating to a delinquent account or a
|
9 |
| Notice of Assessment offered in the name of the Department, |
10 |
| under the
Certificate of the Director or any officer or |
11 |
| employee of the Department
designated in writing by the |
12 |
| Director shall, without further proof, be
admitted into |
13 |
| evidence in any such hearing or any legal proceeding and shall |
14 |
| be
prima facie proof of the delinquency, including principal |
15 |
| and any interest,
penalties and costs, as shown thereon. The |
16 |
| Attorney General may bring suit on
behalf of the Department to |
17 |
| collect all such delinquent amounts, or any portion
thereof, |
18 |
| including interest, penalty and costs, due the Lottery.
|
19 |
| Any person who accepts money that is due to the Department |
20 |
| from the
sale of lottery tickets under this Act, but who |
21 |
| wilfully fails to remit
such payment to the Department when due |
22 |
| or who purports to make such payment
but wilfully fails to do |
23 |
| so because his check or other remittance fails to
clear the |
24 |
| bank or savings and loan association against
which it is drawn, |
25 |
| in
addition to the amount due and in addition to any other |
26 |
| penalty provided by
law, shall be assessed, and shall pay, a |
27 |
| penalty equal to 5% of the deficiency
plus any costs or charges |
28 |
| incurred by the Department in collecting such amount.
|
29 |
| The Director may make such arrangements for any person(s), |
30 |
| banks, savings and
loan associations or distributors, to |
31 |
| perform such functions, activities or
services in connection |
32 |
| with the operation of the lottery as he deems advisable
|
33 |
| pursuant to this Act, the State Comptroller Act, or the rules |
34 |
| and regulations of the Department,
and such functions, |
35 |
| activities or services shall constitute lawful functions,
|
36 |
| activities and services of such person(s), banks, savings and |
|
|
|
HB2706 Enrolled |
- 18 - |
LRB094 03732 BDD 33741 b |
|
|
1 |
| loan associations
or distributors.
|
2 |
| All income arising out of any activity or purpose of the |
3 |
| Division
Department
shall,
pursuant to the State Finance Act, |
4 |
| be paid into the State Treasury except as otherwise provided by |
5 |
| the
rules and regulations of the Department and shall be |
6 |
| covered into a special
fund to be known as the State Lottery |
7 |
| Fund. Banks and savings and loan
associations may be |
8 |
| compensated for services rendered based upon the activity
and |
9 |
| amount of funds on deposit.
|
10 |
| (Source: P.A. 91-357, eff. 7-29-99.)
|
11 |
| (20 ILCS 1605/24) (from Ch. 120, par. 1174)
|
12 |
| Sec. 24. The State Comptroller shall conduct a preaudit of |
13 |
| all accounts and
transactions of the Department in connection |
14 |
| with the operation of the State Lottery under the State |
15 |
| Comptroller Act, excluding
payments issued by the Department |
16 |
| for prizes of $25,000 or less.
|
17 |
| The Auditor General or a certified public accountant
firm |
18 |
| appointed by
him shall conduct an annual post-audit of all |
19 |
| accounts and transactions of
the Department in connection with |
20 |
| the operation of the State Lottery and other special post |
21 |
| audits as the Auditor General, the
Legislative Audit |
22 |
| Commission, or the General Assembly deems
necessary. The
annual |
23 |
| post-audits shall include payments made by lottery sales agents |
24 |
| of
prizes of less than $600 authorized under Section 20, and |
25 |
| payments made by
the Department of prizes up to $25,000 |
26 |
| authorized under
Section 20.1. The Auditor General or his agent
|
27 |
| conducting an audit under this
Act shall have access and |
28 |
| authority to examine any and all records of the
Department or |
29 |
| the Board, its distributing agents and its licensees.
|
30 |
| (Source: P.A. 91-357, eff. 7-29-99.)
|
31 |
| Section 10. The Illinois Income Tax Act is amended by |
32 |
| changing Sections 203 and 902 as follows:
|
33 |
| (35 ILCS 5/203) (from Ch. 120, par. 2-203)
|
|
|
|
HB2706 Enrolled |
- 19 - |
LRB094 03732 BDD 33741 b |
|
|
1 |
| Sec. 203. Base income defined.
|
2 |
| (a) Individuals.
|
3 |
| (1) In general. In the case of an individual, base |
4 |
| income means an
amount equal to the taxpayer's adjusted |
5 |
| gross income for the taxable
year as modified by paragraph |
6 |
| (2).
|
7 |
| (2) Modifications. The adjusted gross income referred |
8 |
| to in
paragraph (1) shall be modified by adding thereto the |
9 |
| sum of the
following amounts:
|
10 |
| (A) An amount equal to all amounts paid or accrued |
11 |
| to the taxpayer
as interest or dividends during the |
12 |
| taxable year to the extent excluded
from gross income |
13 |
| in the computation of adjusted gross income, except |
14 |
| stock
dividends of qualified public utilities |
15 |
| described in Section 305(e) of the
Internal Revenue |
16 |
| Code;
|
17 |
| (B) An amount equal to the amount of tax imposed by |
18 |
| this Act to the
extent deducted from gross income in |
19 |
| the computation of adjusted gross
income for the |
20 |
| taxable year;
|
21 |
| (C) An amount equal to the amount received during |
22 |
| the taxable year
as a recovery or refund of real |
23 |
| property taxes paid with respect to the
taxpayer's |
24 |
| principal residence under the Revenue Act of
1939 and |
25 |
| for which a deduction was previously taken under |
26 |
| subparagraph (L) of
this paragraph (2) prior to July 1, |
27 |
| 1991, the retrospective application date of
Article 4 |
28 |
| of Public Act 87-17. In the case of multi-unit or |
29 |
| multi-use
structures and farm dwellings, the taxes on |
30 |
| the taxpayer's principal residence
shall be that |
31 |
| portion of the total taxes for the entire property |
32 |
| which is
attributable to such principal residence;
|
33 |
| (D) An amount equal to the amount of the capital |
34 |
| gain deduction
allowable under the Internal Revenue |
35 |
| Code, to the extent deducted from gross
income in the |
36 |
| computation of adjusted gross income;
|
|
|
|
HB2706 Enrolled |
- 20 - |
LRB094 03732 BDD 33741 b |
|
|
1 |
| (D-5) An amount, to the extent not included in |
2 |
| adjusted gross income,
equal to the amount of money |
3 |
| withdrawn by the taxpayer in the taxable year from
a |
4 |
| medical care savings account and the interest earned on |
5 |
| the account in the
taxable year of a withdrawal |
6 |
| pursuant to subsection (b) of Section 20 of the
Medical |
7 |
| Care Savings Account Act or subsection (b) of Section |
8 |
| 20 of the
Medical Care Savings Account Act of 2000;
|
9 |
| (D-10) For taxable years ending after December 31, |
10 |
| 1997, an
amount equal to any eligible remediation costs |
11 |
| that the individual
deducted in computing adjusted |
12 |
| gross income and for which the
individual claims a |
13 |
| credit under subsection (l) of Section 201;
|
14 |
| (D-15) For taxable years 2001 and thereafter, an |
15 |
| amount equal to the
bonus depreciation deduction (30% |
16 |
| of the adjusted basis of the qualified
property) taken |
17 |
| on the taxpayer's federal income tax return for the |
18 |
| taxable
year under subsection (k) of Section 168 of the |
19 |
| Internal Revenue Code;
|
20 |
| (D-16) If the taxpayer sells, transfers, abandons, |
21 |
| or otherwise disposes of
reports a capital gain or loss |
22 |
| on the
taxpayer's federal income tax return for the |
23 |
| taxable year based on a sale or
transfer of property |
24 |
| for which the taxpayer was required in any taxable year |
25 |
| to
make an addition modification under subparagraph |
26 |
| (D-15), then an amount equal
to the aggregate amount of |
27 |
| the deductions taken in all taxable
years under |
28 |
| subparagraph (Z) with respect to that property.
|
29 |
| If the taxpayer continues to own property through |
30 |
| the last day of the last tax year for which the |
31 |
| taxpayer may claim a depreciation deduction for |
32 |
| federal income tax purposes and for which the taxpayer |
33 |
| was allowed in any taxable year to make a subtraction |
34 |
| modification under subparagraph (Z), then an amount |
35 |
| equal to that subtraction modification.
|
36 |
| The taxpayer is required to make the addition |
|
|
|
HB2706 Enrolled |
- 21 - |
LRB094 03732 BDD 33741 b |
|
|
1 |
| modification under this
subparagraph
only once with |
2 |
| respect to any one piece of property;
|
3 |
| (D-17) For taxable years ending on or after |
4 |
| December 31, 2004, an amount equal to the amount |
5 |
| otherwise allowed as a deduction in computing base |
6 |
| income for interest paid, accrued, or incurred, |
7 |
| directly or indirectly, to a foreign person who would |
8 |
| be a member of the same unitary business group but for |
9 |
| the fact that foreign person's business activity |
10 |
| outside the United States is 80% or more of the foreign |
11 |
| person's total business activity. The addition |
12 |
| modification required by this subparagraph shall be |
13 |
| reduced to the extent that dividends were included in |
14 |
| base income of the unitary group for the same taxable |
15 |
| year and received by the taxpayer or by a member of the |
16 |
| taxpayer's unitary business group (including amounts |
17 |
| included in gross income under Sections 951 through 964 |
18 |
| of the Internal Revenue Code and amounts included in |
19 |
| gross income under Section 78 of the Internal Revenue |
20 |
| Code) with respect to the stock of the same person to |
21 |
| whom the interest was paid, accrued, or incurred. |
22 |
| This paragraph shall not apply to the following:
|
23 |
| (i) an item of interest paid, accrued, or |
24 |
| incurred, directly or indirectly, to a foreign |
25 |
| person who is subject in a foreign country or |
26 |
| state, other than a state which requires mandatory |
27 |
| unitary reporting, to a tax on or measured by net |
28 |
| income with respect to such interest; or |
29 |
| (ii) an item of interest paid, accrued, or |
30 |
| incurred, directly or indirectly, to a foreign |
31 |
| person if the taxpayer can establish, based on a |
32 |
| preponderance of the evidence, both of the |
33 |
| following: |
34 |
| (a) the foreign person, during the same |
35 |
| taxable year, paid, accrued, or incurred, the |
36 |
| interest to a person that is not a related |
|
|
|
HB2706 Enrolled |
- 22 - |
LRB094 03732 BDD 33741 b |
|
|
1 |
| member, and |
2 |
| (b) the transaction giving rise to the |
3 |
| interest expense between the taxpayer and the |
4 |
| foreign person did not have as a principal |
5 |
| purpose the avoidance of Illinois income tax, |
6 |
| and is paid pursuant to a contract or agreement |
7 |
| that reflects an arm's-length interest rate |
8 |
| and terms; or
|
9 |
| (iii) the taxpayer can establish, based on |
10 |
| clear and convincing evidence, that the interest |
11 |
| paid, accrued, or incurred relates to a contract or |
12 |
| agreement entered into at arm's-length rates and |
13 |
| terms and the principal purpose for the payment is |
14 |
| not federal or Illinois tax avoidance; or
|
15 |
| (iv) an item of interest paid, accrued, or |
16 |
| incurred, directly or indirectly, to a foreign |
17 |
| person if the taxpayer establishes by clear and |
18 |
| convincing evidence that the adjustments are |
19 |
| unreasonable; or if the taxpayer and the Director |
20 |
| agree in writing to the application or use of an |
21 |
| alternative method of apportionment under Section |
22 |
| 304(f).
|
23 |
| Nothing in this subsection shall preclude the |
24 |
| Director from making any other adjustment |
25 |
| otherwise allowed under Section 404 of this Act for |
26 |
| any tax year beginning after the effective date of |
27 |
| this amendment provided such adjustment is made |
28 |
| pursuant to regulation adopted by the Department |
29 |
| and such regulations provide methods and standards |
30 |
| by which the Department will utilize its authority |
31 |
| under Section 404 of this Act;
|
32 |
| (D-18) For taxable years ending on or after |
33 |
| December 31, 2004, an amount equal to the amount of |
34 |
| intangible expenses and costs otherwise allowed as a |
35 |
| deduction in computing base income, and that were paid, |
36 |
| accrued, or incurred, directly or indirectly, to a |
|
|
|
HB2706 Enrolled |
- 23 - |
LRB094 03732 BDD 33741 b |
|
|
1 |
| foreign person who would be a member of the same |
2 |
| unitary business group but for the fact that the |
3 |
| foreign person's business activity outside the United |
4 |
| States is 80% or more of that person's total business |
5 |
| activity. The addition modification required by this |
6 |
| subparagraph shall be reduced to the extent that |
7 |
| dividends were included in base income of the unitary |
8 |
| group for the same taxable year and received by the |
9 |
| taxpayer or by a member of the taxpayer's unitary |
10 |
| business group (including amounts included in gross |
11 |
| income under Sections 951 through 964 of the Internal |
12 |
| Revenue Code and amounts included in gross income under |
13 |
| Section 78 of the Internal Revenue Code) with respect |
14 |
| to the stock of the same person to whom the intangible |
15 |
| expenses and costs were directly or indirectly paid, |
16 |
| incurred, or accrued. The preceding sentence does not |
17 |
| apply to the extent that the same dividends caused a |
18 |
| reduction to the addition modification required under |
19 |
| Section 203(a)(2)(D-17) of this Act. As used in this |
20 |
| subparagraph, the term "intangible expenses and costs" |
21 |
| includes (1) expenses, losses, and costs for, or |
22 |
| related to, the direct or indirect acquisition, use, |
23 |
| maintenance or management, ownership, sale, exchange, |
24 |
| or any other disposition of intangible property; (2) |
25 |
| losses incurred, directly or indirectly, from |
26 |
| factoring transactions or discounting transactions; |
27 |
| (3) royalty, patent, technical, and copyright fees; |
28 |
| (4) licensing fees; and (5) other similar expenses and |
29 |
| costs.
For purposes of this subparagraph, "intangible |
30 |
| property" includes patents, patent applications, trade |
31 |
| names, trademarks, service marks, copyrights, mask |
32 |
| works, trade secrets, and similar types of intangible |
33 |
| assets. |
34 |
| This paragraph shall not apply to the following: |
35 |
| (i) any item of intangible expenses or costs |
36 |
| paid, accrued, or incurred, directly or |
|
|
|
HB2706 Enrolled |
- 24 - |
LRB094 03732 BDD 33741 b |
|
|
1 |
| indirectly, from a transaction with a foreign |
2 |
| person who is subject in a foreign country or |
3 |
| state, other than a state which requires mandatory |
4 |
| unitary reporting, to a tax on or measured by net |
5 |
| income with respect to such item; or |
6 |
| (ii) any item of intangible expense or cost |
7 |
| paid, accrued, or incurred, directly or |
8 |
| indirectly, if the taxpayer can establish, based |
9 |
| on a preponderance of the evidence, both of the |
10 |
| following: |
11 |
| (a) the foreign person during the same |
12 |
| taxable year paid, accrued, or incurred, the |
13 |
| intangible expense or cost to a person that is |
14 |
| not a related member, and |
15 |
| (b) the transaction giving rise to the |
16 |
| intangible expense or cost between the |
17 |
| taxpayer and the foreign person did not have as |
18 |
| a principal purpose the avoidance of Illinois |
19 |
| income tax, and is paid pursuant to a contract |
20 |
| or agreement that reflects arm's-length terms; |
21 |
| or |
22 |
| (iii) any item of intangible expense or cost |
23 |
| paid, accrued, or incurred, directly or |
24 |
| indirectly, from a transaction with a foreign |
25 |
| person if the taxpayer establishes by clear and |
26 |
| convincing evidence, that the adjustments are |
27 |
| unreasonable; or if the taxpayer and the Director |
28 |
| agree in writing to the application or use of an |
29 |
| alternative method of apportionment under Section |
30 |
| 304(f);
|
31 |
| Nothing in this subsection shall preclude the |
32 |
| Director from making any other adjustment |
33 |
| otherwise allowed under Section 404 of this Act for |
34 |
| any tax year beginning after the effective date of |
35 |
| this amendment provided such adjustment is made |
36 |
| pursuant to regulation adopted by the Department |
|
|
|
HB2706 Enrolled |
- 25 - |
LRB094 03732 BDD 33741 b |
|
|
1 |
| and such regulations provide methods and standards |
2 |
| by which the Department will utilize its authority |
3 |
| under Section 404 of this Act;
|
4 |
| (D-20) For taxable years beginning on or after |
5 |
| January 1,
2002, in
the
case of a distribution from a |
6 |
| qualified tuition program under Section 529 of
the |
7 |
| Internal Revenue Code, other than (i) a distribution |
8 |
| from a College Savings
Pool created under Section 16.5 |
9 |
| of the State Treasurer Act or (ii) a
distribution from |
10 |
| the Illinois Prepaid Tuition Trust Fund, an amount |
11 |
| equal to
the amount excluded from gross income under |
12 |
| Section 529(c)(3)(B);
|
13 |
| and by deducting from the total so obtained the
sum of the |
14 |
| following amounts:
|
15 |
| (E) For taxable years ending before December 31, |
16 |
| 2001,
any amount included in such total in respect of |
17 |
| any compensation
(including but not limited to any |
18 |
| compensation paid or accrued to a
serviceman while a |
19 |
| prisoner of war or missing in action) paid to a |
20 |
| resident
by reason of being on active duty in the Armed |
21 |
| Forces of the United States
and in respect of any |
22 |
| compensation paid or accrued to a resident who as a
|
23 |
| governmental employee was a prisoner of war or missing |
24 |
| in action, and in
respect of any compensation paid to a |
25 |
| resident in 1971 or thereafter for
annual training |
26 |
| performed pursuant to Sections 502 and 503, Title 32,
|
27 |
| United States Code as a member of the Illinois National |
28 |
| Guard.
For taxable years ending on or after December |
29 |
| 31, 2001, any amount included in
such total in respect |
30 |
| of any compensation (including but not limited to any
|
31 |
| compensation paid or accrued to a serviceman while a |
32 |
| prisoner of war or missing
in action) paid to a |
33 |
| resident by reason of being a member of any component |
34 |
| of
the Armed Forces of the United States and in respect |
35 |
| of any compensation paid
or accrued to a resident who |
36 |
| as a governmental employee was a prisoner of war
or |
|
|
|
HB2706 Enrolled |
- 26 - |
LRB094 03732 BDD 33741 b |
|
|
1 |
| missing in action, and in respect of any compensation |
2 |
| paid to a resident in
2001 or thereafter by reason of |
3 |
| being a member of the Illinois National Guard.
The |
4 |
| provisions of this amendatory Act of the 92nd General |
5 |
| Assembly are exempt
from the provisions of Section 250;
|
6 |
| (F) An amount equal to all amounts included in such |
7 |
| total pursuant
to the provisions of Sections 402(a), |
8 |
| 402(c), 403(a), 403(b), 406(a), 407(a),
and 408 of the |
9 |
| Internal Revenue Code, or included in such total as
|
10 |
| distributions under the provisions of any retirement |
11 |
| or disability plan for
employees of any governmental |
12 |
| agency or unit, or retirement payments to
retired |
13 |
| partners, which payments are excluded in computing net |
14 |
| earnings
from self employment by Section 1402 of the |
15 |
| Internal Revenue Code and
regulations adopted pursuant |
16 |
| thereto;
|
17 |
| (G) The valuation limitation amount;
|
18 |
| (H) An amount equal to the amount of any tax |
19 |
| imposed by this Act
which was refunded to the taxpayer |
20 |
| and included in such total for the
taxable year;
|
21 |
| (I) An amount equal to all amounts included in such |
22 |
| total pursuant
to the provisions of Section 111 of the |
23 |
| Internal Revenue Code as a
recovery of items previously |
24 |
| deducted from adjusted gross income in the
computation |
25 |
| of taxable income;
|
26 |
| (J) An amount equal to those dividends included in |
27 |
| such total which were
paid by a corporation which |
28 |
| conducts business operations in an Enterprise
Zone or |
29 |
| zones created under the Illinois Enterprise Zone Act, |
30 |
| and conducts
substantially all of its operations in an |
31 |
| Enterprise Zone or zones;
|
32 |
| (K) An amount equal to those dividends included in |
33 |
| such total that
were paid by a corporation that |
34 |
| conducts business operations in a federally
designated |
35 |
| Foreign Trade Zone or Sub-Zone and that is designated a |
36 |
| High Impact
Business located in Illinois; provided |
|
|
|
HB2706 Enrolled |
- 27 - |
LRB094 03732 BDD 33741 b |
|
|
1 |
| that dividends eligible for the
deduction provided in |
2 |
| subparagraph (J) of paragraph (2) of this subsection
|
3 |
| shall not be eligible for the deduction provided under |
4 |
| this subparagraph
(K);
|
5 |
| (L) For taxable years ending after December 31, |
6 |
| 1983, an amount equal to
all social security benefits |
7 |
| and railroad retirement benefits included in
such |
8 |
| total pursuant to Sections 72(r) and 86 of the Internal |
9 |
| Revenue Code;
|
10 |
| (M) With the exception of any amounts subtracted |
11 |
| under subparagraph
(N), an amount equal to the sum of |
12 |
| all amounts disallowed as
deductions by (i) Sections |
13 |
| 171(a) (2), and 265(2) of the Internal Revenue Code
of |
14 |
| 1954, as now or hereafter amended, and all amounts of |
15 |
| expenses allocable
to interest and disallowed as |
16 |
| deductions by Section 265(1) of the Internal
Revenue |
17 |
| Code of 1954, as now or hereafter amended;
and (ii) for |
18 |
| taxable years
ending on or after August 13, 1999, |
19 |
| Sections 171(a)(2), 265,
280C, and 832(b)(5)(B)(i) of |
20 |
| the Internal Revenue Code; the provisions of this
|
21 |
| subparagraph are exempt from the provisions of Section |
22 |
| 250;
|
23 |
| (N) An amount equal to all amounts included in such |
24 |
| total which are
exempt from taxation by this State |
25 |
| either by reason of its statutes or
Constitution
or by |
26 |
| reason of the Constitution, treaties or statutes of the |
27 |
| United States;
provided that, in the case of any |
28 |
| statute of this State that exempts income
derived from |
29 |
| bonds or other obligations from the tax imposed under |
30 |
| this Act,
the amount exempted shall be the interest net |
31 |
| of bond premium amortization;
|
32 |
| (O) An amount equal to any contribution made to a |
33 |
| job training
project established pursuant to the Tax |
34 |
| Increment Allocation Redevelopment Act;
|
35 |
| (P) An amount equal to the amount of the deduction |
36 |
| used to compute the
federal income tax credit for |
|
|
|
HB2706 Enrolled |
- 28 - |
LRB094 03732 BDD 33741 b |
|
|
1 |
| restoration of substantial amounts held under
claim of |
2 |
| right for the taxable year pursuant to Section 1341 of |
3 |
| the
Internal Revenue Code of 1986;
|
4 |
| (Q) An amount equal to any amounts included in such |
5 |
| total, received by
the taxpayer as an acceleration in |
6 |
| the payment of life, endowment or annuity
benefits in |
7 |
| advance of the time they would otherwise be payable as |
8 |
| an indemnity
for a terminal illness;
|
9 |
| (R) An amount equal to the amount of any federal or |
10 |
| State bonus paid
to veterans of the Persian Gulf War;
|
11 |
| (S) An amount, to the extent included in adjusted |
12 |
| gross income, equal
to the amount of a contribution |
13 |
| made in the taxable year on behalf of the
taxpayer to a |
14 |
| medical care savings account established under the |
15 |
| Medical Care
Savings Account Act or the Medical Care |
16 |
| Savings Account Act of 2000 to the
extent the |
17 |
| contribution is accepted by the account
administrator |
18 |
| as provided in that Act;
|
19 |
| (T) An amount, to the extent included in adjusted |
20 |
| gross income, equal to
the amount of interest earned in |
21 |
| the taxable year on a medical care savings
account |
22 |
| established under the Medical Care Savings Account Act |
23 |
| or the Medical
Care Savings Account Act of 2000 on |
24 |
| behalf of the
taxpayer, other than interest added |
25 |
| pursuant to item (D-5) of this paragraph
(2);
|
26 |
| (U) For one taxable year beginning on or after |
27 |
| January 1,
1994, an
amount equal to the total amount of |
28 |
| tax imposed and paid under subsections (a)
and (b) of |
29 |
| Section 201 of this Act on grant amounts received by |
30 |
| the taxpayer
under the Nursing Home Grant Assistance |
31 |
| Act during the taxpayer's taxable years
1992 and 1993;
|
32 |
| (V) Beginning with tax years ending on or after |
33 |
| December 31, 1995 and
ending with tax years ending on |
34 |
| or before December 31, 2004, an amount equal to
the |
35 |
| amount paid by a taxpayer who is a
self-employed |
36 |
| taxpayer, a partner of a partnership, or a
shareholder |
|
|
|
HB2706 Enrolled |
- 29 - |
LRB094 03732 BDD 33741 b |
|
|
1 |
| in a Subchapter S corporation for health insurance or |
2 |
| long-term
care insurance for that taxpayer or that |
3 |
| taxpayer's spouse or dependents, to
the extent that the |
4 |
| amount paid for that health insurance or long-term care
|
5 |
| insurance may be deducted under Section 213 of the |
6 |
| Internal Revenue Code of
1986, has not been deducted on |
7 |
| the federal income tax return of the taxpayer,
and does |
8 |
| not exceed the taxable income attributable to that |
9 |
| taxpayer's income,
self-employment income, or |
10 |
| Subchapter S corporation income; except that no
|
11 |
| deduction shall be allowed under this item (V) if the |
12 |
| taxpayer is eligible to
participate in any health |
13 |
| insurance or long-term care insurance plan of an
|
14 |
| employer of the taxpayer or the taxpayer's
spouse. The |
15 |
| amount of the health insurance and long-term care |
16 |
| insurance
subtracted under this item (V) shall be |
17 |
| determined by multiplying total
health insurance and |
18 |
| long-term care insurance premiums paid by the taxpayer
|
19 |
| times a number that represents the fractional |
20 |
| percentage of eligible medical
expenses under Section |
21 |
| 213 of the Internal Revenue Code of 1986 not actually
|
22 |
| deducted on the taxpayer's federal income tax return;
|
23 |
| (W) For taxable years beginning on or after January |
24 |
| 1, 1998,
all amounts included in the taxpayer's federal |
25 |
| gross income
in the taxable year from amounts converted |
26 |
| from a regular IRA to a Roth IRA.
This paragraph is |
27 |
| exempt from the provisions of Section
250;
|
28 |
| (X) For taxable year 1999 and thereafter, an amount |
29 |
| equal to the
amount of any (i) distributions, to the |
30 |
| extent includible in gross income for
federal income |
31 |
| tax purposes, made to the taxpayer because of his or |
32 |
| her status
as a victim of persecution for racial or |
33 |
| religious reasons by Nazi Germany or
any other Axis |
34 |
| regime or as an heir of the victim and (ii) items
of |
35 |
| income, to the extent
includible in gross income for |
36 |
| federal income tax purposes, attributable to,
derived |
|
|
|
HB2706 Enrolled |
- 30 - |
LRB094 03732 BDD 33741 b |
|
|
1 |
| from or in any way related to assets stolen from, |
2 |
| hidden from, or
otherwise lost to a victim of
|
3 |
| persecution for racial or religious reasons by Nazi |
4 |
| Germany or any other Axis
regime immediately prior to, |
5 |
| during, and immediately after World War II,
including, |
6 |
| but
not limited to, interest on the proceeds receivable |
7 |
| as insurance
under policies issued to a victim of |
8 |
| persecution for racial or religious
reasons
by Nazi |
9 |
| Germany or any other Axis regime by European insurance |
10 |
| companies
immediately prior to and during World War II;
|
11 |
| provided, however, this subtraction from federal |
12 |
| adjusted gross income does not
apply to assets acquired |
13 |
| with such assets or with the proceeds from the sale of
|
14 |
| such assets; provided, further, this paragraph shall |
15 |
| only apply to a taxpayer
who was the first recipient of |
16 |
| such assets after their recovery and who is a
victim of |
17 |
| persecution for racial or religious reasons
by Nazi |
18 |
| Germany or any other Axis regime or as an heir of the |
19 |
| victim. The
amount of and the eligibility for any |
20 |
| public assistance, benefit, or
similar entitlement is |
21 |
| not affected by the inclusion of items (i) and (ii) of
|
22 |
| this paragraph in gross income for federal income tax |
23 |
| purposes.
This paragraph is exempt from the provisions |
24 |
| of Section 250;
|
25 |
| (Y) For taxable years beginning on or after January |
26 |
| 1, 2002
and ending
on or before December 31, 2004, |
27 |
| moneys contributed in the taxable year to a College |
28 |
| Savings Pool account under
Section 16.5 of the State |
29 |
| Treasurer Act, except that amounts excluded from
gross |
30 |
| income under Section 529(c)(3)(C)(i) of the Internal |
31 |
| Revenue Code
shall not be considered moneys |
32 |
| contributed under this subparagraph (Y). For taxable |
33 |
| years beginning on or after January 1, 2005, a maximum |
34 |
| of $10,000
contributed
in the
taxable year to (i) a |
35 |
| College Savings Pool account under Section 16.5 of the
|
36 |
| State
Treasurer Act or (ii) the Illinois Prepaid |
|
|
|
HB2706 Enrolled |
- 31 - |
LRB094 03732 BDD 33741 b |
|
|
1 |
| Tuition Trust Fund,
except that
amounts excluded from |
2 |
| gross income under Section 529(c)(3)(C)(i) of the
|
3 |
| Internal
Revenue Code shall not be considered moneys |
4 |
| contributed under this subparagraph
(Y). This
|
5 |
| subparagraph (Y) is exempt from the provisions of |
6 |
| Section 250;
|
7 |
| (Z) For taxable years 2001 and thereafter, for the |
8 |
| taxable year in
which the bonus depreciation deduction |
9 |
| (30% of the adjusted basis of the
qualified property)
|
10 |
| is taken on the taxpayer's federal income tax return |
11 |
| under
subsection (k) of Section 168 of the Internal |
12 |
| Revenue Code and for each
applicable taxable year |
13 |
| thereafter, an amount equal to "x", where:
|
14 |
| (1) "y" equals the amount of the depreciation |
15 |
| deduction taken for the
taxable year
on the |
16 |
| taxpayer's federal income tax return on property |
17 |
| for which the bonus
depreciation deduction (30% of |
18 |
| the adjusted basis of the qualified property)
was |
19 |
| taken in any year under subsection (k) of Section |
20 |
| 168 of the Internal
Revenue Code, but not including |
21 |
| the bonus depreciation deduction; and
|
22 |
| (2) for taxable years ending on or before |
23 |
| December 31, 2005, "x" equals "y" multiplied by 30 |
24 |
| and then divided by 70 (or "y"
multiplied by |
25 |
| 0.429) ; and |
26 |
| (3) for taxable years ending after December |
27 |
| 31, 2005: |
28 |
| (i) for property on which a bonus |
29 |
| depreciation deduction of 30% of the adjusted |
30 |
| basis was taken, "x" equals "y" multiplied by |
31 |
| 30 and then divided by 70 (or "y"
multiplied by |
32 |
| 0.429); and |
33 |
| (ii) for property on which a bonus |
34 |
| depreciation deduction of 50% of the adjusted |
35 |
| basis was taken, "x" equals "y" multiplied by |
36 |
| 1.0 .
|
|
|
|
HB2706 Enrolled |
- 32 - |
LRB094 03732 BDD 33741 b |
|
|
1 |
| The aggregate amount deducted under this |
2 |
| subparagraph in all taxable
years for any one piece of |
3 |
| property may not exceed the amount of the bonus
|
4 |
| depreciation deduction (30% of the adjusted basis of |
5 |
| the qualified property)
taken on that property on the |
6 |
| taxpayer's federal income tax return under
subsection |
7 |
| (k) of Section 168 of the Internal Revenue Code . This |
8 |
| subparagraph (Z) is exempt from the provisions of |
9 |
| Section 250 ;
|
10 |
| (AA) If the taxpayer sells, transfers, abandons, |
11 |
| or otherwise disposes of
reports a capital gain or loss |
12 |
| on the taxpayer's
federal income tax return for the |
13 |
| taxable year based on a sale or transfer of
property |
14 |
| for which the taxpayer was required in any taxable year |
15 |
| to make an
addition modification under subparagraph |
16 |
| (D-15), then an amount equal to that
addition |
17 |
| modification.
|
18 |
| If the taxpayer continues to own property through |
19 |
| the last day of the last tax year for which the |
20 |
| taxpayer may claim a depreciation deduction for |
21 |
| federal income tax purposes and for which the taxpayer |
22 |
| was required in any taxable year to make an addition |
23 |
| modification under subparagraph (D-15), then an amount |
24 |
| equal to that addition modification.
|
25 |
| The taxpayer is allowed to take the deduction under |
26 |
| this subparagraph
only once with respect to any one |
27 |
| piece of property . |
28 |
| This subparagraph (AA) is exempt from the |
29 |
| provisions of Section 250 ;
|
30 |
| (BB) Any amount included in adjusted gross income, |
31 |
| other
than
salary,
received by a driver in a |
32 |
| ridesharing arrangement using a motor vehicle;
|
33 |
| (CC) The amount of (i) any interest income (net of |
34 |
| the deductions allocable thereto) taken into account |
35 |
| for the taxable year with respect to a transaction with |
36 |
| a taxpayer that is required to make an addition |
|
|
|
HB2706 Enrolled |
- 33 - |
LRB094 03732 BDD 33741 b |
|
|
1 |
| modification with respect to such transaction under |
2 |
| Section 203(a)(2)(D-17), 203(b)(2) (E-12) (E-13) , |
3 |
| 203(c)(2)(G-12), or 203(d)(2)(D-7), but not to exceed |
4 |
| the amount of that addition modification, and
(ii) any |
5 |
| income from intangible property (net of the deductions |
6 |
| allocable thereto) taken into account for the taxable |
7 |
| year with respect to a transaction with a taxpayer that |
8 |
| is required to make an addition modification with |
9 |
| respect to such transaction under Section |
10 |
| 203(a)(2)(D-18), 203(b)(2) (E-13) (E-14) , |
11 |
| 203(c)(2)(G-13), or 203(d)(2)(D-8), but not to exceed |
12 |
| the amount of that addition modification; |
13 |
| (DD) An amount equal to the interest income taken |
14 |
| into account for the taxable year (net of the |
15 |
| deductions allocable thereto) with respect to |
16 |
| transactions with a foreign person who would be a |
17 |
| member of the taxpayer's unitary business group but for |
18 |
| the fact that the foreign person's business activity |
19 |
| outside the United States is 80% or more of that |
20 |
| person's total business activity, but not to exceed the |
21 |
| addition modification required to be made for the same |
22 |
| taxable year under Section 203(a)(2)(D-17) for |
23 |
| interest paid, accrued, or incurred, directly or |
24 |
| indirectly, to the same foreign person; and |
25 |
| (EE) An amount equal to the income from intangible |
26 |
| property taken into account for the taxable year (net |
27 |
| of the deductions allocable thereto) with respect to |
28 |
| transactions with a foreign person who would be a |
29 |
| member of the taxpayer's unitary business group but for |
30 |
| the fact that the foreign person's business activity |
31 |
| outside the United States is 80% or more of that |
32 |
| person's total business activity, but not to exceed the |
33 |
| addition modification required to be made for the same |
34 |
| taxable year under Section 203(a)(2)(D-18) for |
35 |
| intangible expenses and costs paid, accrued, or |
36 |
| incurred, directly or indirectly, to the same foreign |
|
|
|
HB2706 Enrolled |
- 34 - |
LRB094 03732 BDD 33741 b |
|
|
1 |
| person.
|
2 |
| (b) Corporations.
|
3 |
| (1) In general. In the case of a corporation, base |
4 |
| income means an
amount equal to the taxpayer's taxable |
5 |
| income for the taxable year as
modified by paragraph (2).
|
6 |
| (2) Modifications. The taxable income referred to in |
7 |
| paragraph (1)
shall be modified by adding thereto the sum |
8 |
| of the following amounts:
|
9 |
| (A) An amount equal to all amounts paid or accrued |
10 |
| to the taxpayer
as interest and all distributions |
11 |
| received from regulated investment
companies during |
12 |
| the taxable year to the extent excluded from gross
|
13 |
| income in the computation of taxable income;
|
14 |
| (B) An amount equal to the amount of tax imposed by |
15 |
| this Act to the
extent deducted from gross income in |
16 |
| the computation of taxable income
for the taxable year;
|
17 |
| (C) In the case of a regulated investment company, |
18 |
| an amount equal to
the excess of (i) the net long-term |
19 |
| capital gain for the taxable year, over
(ii) the amount |
20 |
| of the capital gain dividends designated as such in |
21 |
| accordance
with Section 852(b)(3)(C) of the Internal |
22 |
| Revenue Code and any amount
designated under Section |
23 |
| 852(b)(3)(D) of the Internal Revenue Code,
|
24 |
| attributable to the taxable year (this amendatory Act |
25 |
| of 1995
(Public Act 89-89) is declarative of existing |
26 |
| law and is not a new
enactment);
|
27 |
| (D) The amount of any net operating loss deduction |
28 |
| taken in arriving
at taxable income, other than a net |
29 |
| operating loss carried forward from a
taxable year |
30 |
| ending prior to December 31, 1986;
|
31 |
| (E) For taxable years in which a net operating loss |
32 |
| carryback or
carryforward from a taxable year ending |
33 |
| prior to December 31, 1986 is an
element of taxable |
34 |
| income under paragraph (1) of subsection (e) or
|
35 |
| subparagraph (E) of paragraph (2) of subsection (e), |
|
|
|
HB2706 Enrolled |
- 35 - |
LRB094 03732 BDD 33741 b |
|
|
1 |
| the amount by which
addition modifications other than |
2 |
| those provided by this subparagraph (E)
exceeded |
3 |
| subtraction modifications in such earlier taxable |
4 |
| year, with the
following limitations applied in the |
5 |
| order that they are listed:
|
6 |
| (i) the addition modification relating to the |
7 |
| net operating loss
carried back or forward to the |
8 |
| taxable year from any taxable year ending
prior to |
9 |
| December 31, 1986 shall be reduced by the amount of |
10 |
| addition
modification under this subparagraph (E) |
11 |
| which related to that net operating
loss and which |
12 |
| was taken into account in calculating the base |
13 |
| income of an
earlier taxable year, and
|
14 |
| (ii) the addition modification relating to the |
15 |
| net operating loss
carried back or forward to the |
16 |
| taxable year from any taxable year ending
prior to |
17 |
| December 31, 1986 shall not exceed the amount of |
18 |
| such carryback or
carryforward;
|
19 |
| For taxable years in which there is a net operating |
20 |
| loss carryback or
carryforward from more than one other |
21 |
| taxable year ending prior to December
31, 1986, the |
22 |
| addition modification provided in this subparagraph |
23 |
| (E) shall
be the sum of the amounts computed |
24 |
| independently under the preceding
provisions of this |
25 |
| subparagraph (E) for each such taxable year;
|
26 |
| (E-5) For taxable years ending after December 31, |
27 |
| 1997, an
amount equal to any eligible remediation costs |
28 |
| that the corporation
deducted in computing adjusted |
29 |
| gross income and for which the
corporation claims a |
30 |
| credit under subsection (l) of Section 201;
|
31 |
| (E-10) For taxable years 2001 and thereafter, an |
32 |
| amount equal to the
bonus depreciation deduction (30% |
33 |
| of the adjusted basis of the qualified
property) taken |
34 |
| on the taxpayer's federal income tax return for the |
35 |
| taxable
year under subsection (k) of Section 168 of the |
36 |
| Internal Revenue Code; and
|
|
|
|
HB2706 Enrolled |
- 36 - |
LRB094 03732 BDD 33741 b |
|
|
1 |
| (E-11) If the taxpayer sells, transfers, abandons, |
2 |
| or otherwise disposes of
reports a capital gain or loss |
3 |
| on the
taxpayer's federal income tax return for the |
4 |
| taxable year based on a sale or
transfer of property |
5 |
| for which the taxpayer was required in any taxable year |
6 |
| to
make an addition modification under subparagraph |
7 |
| (E-10), then an amount equal
to the aggregate amount of |
8 |
| the deductions taken in all taxable
years under |
9 |
| subparagraph (T) with respect to that property.
|
10 |
| If the taxpayer continues to own property through |
11 |
| the last day of the last tax year for which the |
12 |
| taxpayer may claim a depreciation deduction for |
13 |
| federal income tax purposes and for which the taxpayer |
14 |
| was allowed in any taxable year to make a subtraction |
15 |
| modification under subparagraph (T), then an amount |
16 |
| equal to that subtraction modification.
|
17 |
| The taxpayer is required to make the addition |
18 |
| modification under this
subparagraph
only once with |
19 |
| respect to any one piece of property;
|
20 |
| (E-12) For taxable years ending on or after |
21 |
| December 31, 2004, an amount equal to the amount |
22 |
| otherwise allowed as a deduction in computing base |
23 |
| income for interest paid, accrued, or incurred, |
24 |
| directly or indirectly, to a foreign person who would |
25 |
| be a member of the same unitary business group but for |
26 |
| the fact the foreign person's business activity |
27 |
| outside the United States is 80% or more of the foreign |
28 |
| person's total business activity. The addition |
29 |
| modification required by this subparagraph shall be |
30 |
| reduced to the extent that dividends were included in |
31 |
| base income of the unitary group for the same taxable |
32 |
| year and received by the taxpayer or by a member of the |
33 |
| taxpayer's unitary business group (including amounts |
34 |
| included in gross income pursuant to Sections 951 |
35 |
| through 964 of the Internal Revenue Code and amounts |
36 |
| included in gross income under Section 78 of the |
|
|
|
HB2706 Enrolled |
- 37 - |
LRB094 03732 BDD 33741 b |
|
|
1 |
| Internal Revenue Code) with respect to the stock of the |
2 |
| same person to whom the interest was paid, accrued, or |
3 |
| incurred.
|
4 |
| This paragraph shall not apply to the following:
|
5 |
| (i) an item of interest paid, accrued, or |
6 |
| incurred, directly or indirectly, to a foreign |
7 |
| person who is subject in a foreign country or |
8 |
| state, other than a state which requires mandatory |
9 |
| unitary reporting, to a tax on or measured by net |
10 |
| income with respect to such interest; or |
11 |
| (ii) an item of interest paid, accrued, or |
12 |
| incurred, directly or indirectly, to a foreign |
13 |
| person if the taxpayer can establish, based on a |
14 |
| preponderance of the evidence, both of the |
15 |
| following: |
16 |
| (a) the foreign person, during the same |
17 |
| taxable year, paid, accrued, or incurred, the |
18 |
| interest to a person that is not a related |
19 |
| member, and |
20 |
| (b) the transaction giving rise to the |
21 |
| interest expense between the taxpayer and the |
22 |
| foreign person did not have as a principal |
23 |
| purpose the avoidance of Illinois income tax, |
24 |
| and is paid pursuant to a contract or agreement |
25 |
| that reflects an arm's-length interest rate |
26 |
| and terms; or
|
27 |
| (iii) the taxpayer can establish, based on |
28 |
| clear and convincing evidence, that the interest |
29 |
| paid, accrued, or incurred relates to a contract or |
30 |
| agreement entered into at arm's-length rates and |
31 |
| terms and the principal purpose for the payment is |
32 |
| not federal or Illinois tax avoidance; or
|
33 |
| (iv) an item of interest paid, accrued, or |
34 |
| incurred, directly or indirectly, to a foreign |
35 |
| person if the taxpayer establishes by clear and |
36 |
| convincing evidence that the adjustments are |
|
|
|
HB2706 Enrolled |
- 38 - |
LRB094 03732 BDD 33741 b |
|
|
1 |
| unreasonable; or if the taxpayer and the Director |
2 |
| agree in writing to the application or use of an |
3 |
| alternative method of apportionment under Section |
4 |
| 304(f).
|
5 |
| Nothing in this subsection shall preclude the |
6 |
| Director from making any other adjustment |
7 |
| otherwise allowed under Section 404 of this Act for |
8 |
| any tax year beginning after the effective date of |
9 |
| this amendment provided such adjustment is made |
10 |
| pursuant to regulation adopted by the Department |
11 |
| and such regulations provide methods and standards |
12 |
| by which the Department will utilize its authority |
13 |
| under Section 404 of this Act;
|
14 |
| (E-13) For taxable years ending on or after |
15 |
| December 31, 2004, an amount equal to the amount of |
16 |
| intangible expenses and costs otherwise allowed as a |
17 |
| deduction in computing base income, and that were paid, |
18 |
| accrued, or incurred, directly or indirectly, to a |
19 |
| foreign person who would be a member of the same |
20 |
| unitary business group but for the fact that the |
21 |
| foreign person's business activity outside the United |
22 |
| States is 80% or more of that person's total business |
23 |
| activity. The addition modification required by this |
24 |
| subparagraph shall be reduced to the extent that |
25 |
| dividends were included in base income of the unitary |
26 |
| group for the same taxable year and received by the |
27 |
| taxpayer or by a member of the taxpayer's unitary |
28 |
| business group (including amounts included in gross |
29 |
| income pursuant to Sections 951 through 964 of the |
30 |
| Internal Revenue Code and amounts included in gross |
31 |
| income under Section 78 of the Internal Revenue Code) |
32 |
| with respect to the stock of the same person to whom |
33 |
| the intangible expenses and costs were directly or |
34 |
| indirectly paid, incurred, or accrued. The preceding |
35 |
| sentence shall not apply to the extent that the same |
36 |
| dividends caused a reduction to the addition |
|
|
|
HB2706 Enrolled |
- 39 - |
LRB094 03732 BDD 33741 b |
|
|
1 |
| modification required under Section 203(b)(2)(E-12) of |
2 |
| this Act.
As used in this subparagraph, the term |
3 |
| "intangible expenses and costs" includes (1) expenses, |
4 |
| losses, and costs for, or related to, the direct or |
5 |
| indirect acquisition, use, maintenance or management, |
6 |
| ownership, sale, exchange, or any other disposition of |
7 |
| intangible property; (2) losses incurred, directly or |
8 |
| indirectly, from factoring transactions or discounting |
9 |
| transactions; (3) royalty, patent, technical, and |
10 |
| copyright fees; (4) licensing fees; and (5) other |
11 |
| similar expenses and costs.
For purposes of this |
12 |
| subparagraph, "intangible property" includes patents, |
13 |
| patent applications, trade names, trademarks, service |
14 |
| marks, copyrights, mask works, trade secrets, and |
15 |
| similar types of intangible assets. |
16 |
| This paragraph shall not apply to the following: |
17 |
| (i) any item of intangible expenses or costs |
18 |
| paid, accrued, or incurred, directly or |
19 |
| indirectly, from a transaction with a foreign |
20 |
| person who is subject in a foreign country or |
21 |
| state, other than a state which requires mandatory |
22 |
| unitary reporting, to a tax on or measured by net |
23 |
| income with respect to such item; or |
24 |
| (ii) any item of intangible expense or cost |
25 |
| paid, accrued, or incurred, directly or |
26 |
| indirectly, if the taxpayer can establish, based |
27 |
| on a preponderance of the evidence, both of the |
28 |
| following: |
29 |
| (a) the foreign person during the same |
30 |
| taxable year paid, accrued, or incurred, the |
31 |
| intangible expense or cost to a person that is |
32 |
| not a related member, and |
33 |
| (b) the transaction giving rise to the |
34 |
| intangible expense or cost between the |
35 |
| taxpayer and the foreign person did not have as |
36 |
| a principal purpose the avoidance of Illinois |
|
|
|
HB2706 Enrolled |
- 40 - |
LRB094 03732 BDD 33741 b |
|
|
1 |
| income tax, and is paid pursuant to a contract |
2 |
| or agreement that reflects arm's-length terms; |
3 |
| or |
4 |
| (iii) any item of intangible expense or cost |
5 |
| paid, accrued, or incurred, directly or |
6 |
| indirectly, from a transaction with a foreign |
7 |
| person if the taxpayer establishes by clear and |
8 |
| convincing evidence, that the adjustments are |
9 |
| unreasonable; or if the taxpayer and the Director |
10 |
| agree in writing to the application or use of an |
11 |
| alternative method of apportionment under Section |
12 |
| 304(f);
|
13 |
| Nothing in this subsection shall preclude the |
14 |
| Director from making any other adjustment |
15 |
| otherwise allowed under Section 404 of this Act for |
16 |
| any tax year beginning after the effective date of |
17 |
| this amendment provided such adjustment is made |
18 |
| pursuant to regulation adopted by the Department |
19 |
| and such regulations provide methods and standards |
20 |
| by which the Department will utilize its authority |
21 |
| under Section 404 of this Act;
|
22 |
| and by deducting from the total so obtained the sum of the |
23 |
| following
amounts:
|
24 |
| (F) An amount equal to the amount of any tax |
25 |
| imposed by this Act
which was refunded to the taxpayer |
26 |
| and included in such total for the
taxable year;
|
27 |
| (G) An amount equal to any amount included in such |
28 |
| total under
Section 78 of the Internal Revenue Code;
|
29 |
| (H) In the case of a regulated investment company, |
30 |
| an amount equal
to the amount of exempt interest |
31 |
| dividends as defined in subsection (b)
(5) of Section |
32 |
| 852 of the Internal Revenue Code, paid to shareholders
|
33 |
| for the taxable year;
|
34 |
| (I) With the exception of any amounts subtracted |
35 |
| under subparagraph
(J),
an amount equal to the sum of |
36 |
| all amounts disallowed as
deductions by (i) Sections |
|
|
|
HB2706 Enrolled |
- 41 - |
LRB094 03732 BDD 33741 b |
|
|
1 |
| 171(a) (2), and 265(a)(2) and amounts disallowed as
|
2 |
| interest expense by Section 291(a)(3) of the Internal |
3 |
| Revenue Code, as now
or hereafter amended, and all |
4 |
| amounts of expenses allocable to interest and
|
5 |
| disallowed as deductions by Section 265(a)(1) of the |
6 |
| Internal Revenue Code,
as now or hereafter amended;
and |
7 |
| (ii) for taxable years
ending on or after August 13, |
8 |
| 1999, Sections
171(a)(2), 265,
280C, 291(a)(3), and |
9 |
| 832(b)(5)(B)(i) of the Internal Revenue Code; the
|
10 |
| provisions of this
subparagraph are exempt from the |
11 |
| provisions of Section 250;
|
12 |
| (J) An amount equal to all amounts included in such |
13 |
| total which are
exempt from taxation by this State |
14 |
| either by reason of its statutes or
Constitution
or by |
15 |
| reason of the Constitution, treaties or statutes of the |
16 |
| United States;
provided that, in the case of any |
17 |
| statute of this State that exempts income
derived from |
18 |
| bonds or other obligations from the tax imposed under |
19 |
| this Act,
the amount exempted shall be the interest net |
20 |
| of bond premium amortization;
|
21 |
| (K) An amount equal to those dividends included in |
22 |
| such total
which were paid by a corporation which |
23 |
| conducts
business operations in an Enterprise Zone or |
24 |
| zones created under
the Illinois Enterprise Zone Act |
25 |
| and conducts substantially all of its
operations in an |
26 |
| Enterprise Zone or zones;
|
27 |
| (L) An amount equal to those dividends included in |
28 |
| such total that
were paid by a corporation that |
29 |
| conducts business operations in a federally
designated |
30 |
| Foreign Trade Zone or Sub-Zone and that is designated a |
31 |
| High Impact
Business located in Illinois; provided |
32 |
| that dividends eligible for the
deduction provided in |
33 |
| subparagraph (K) of paragraph 2 of this subsection
|
34 |
| shall not be eligible for the deduction provided under |
35 |
| this subparagraph
(L);
|
36 |
| (M) For any taxpayer that is a financial |
|
|
|
HB2706 Enrolled |
- 42 - |
LRB094 03732 BDD 33741 b |
|
|
1 |
| organization within the meaning
of Section 304(c) of |
2 |
| this Act, an amount included in such total as interest
|
3 |
| income from a loan or loans made by such taxpayer to a |
4 |
| borrower, to the extent
that such a loan is secured by |
5 |
| property which is eligible for the Enterprise
Zone |
6 |
| Investment Credit. To determine the portion of a loan |
7 |
| or loans that is
secured by property eligible for a |
8 |
| Section 201(f) investment
credit to the borrower, the |
9 |
| entire principal amount of the loan or loans
between |
10 |
| the taxpayer and the borrower should be divided into |
11 |
| the basis of the
Section 201(f) investment credit |
12 |
| property which secures the
loan or loans, using for |
13 |
| this purpose the original basis of such property on
the |
14 |
| date that it was placed in service in the
Enterprise |
15 |
| Zone. The subtraction modification available to |
16 |
| taxpayer in any
year under this subsection shall be |
17 |
| that portion of the total interest paid
by the borrower |
18 |
| with respect to such loan attributable to the eligible
|
19 |
| property as calculated under the previous sentence;
|
20 |
| (M-1) For any taxpayer that is a financial |
21 |
| organization within the
meaning of Section 304(c) of |
22 |
| this Act, an amount included in such total as
interest |
23 |
| income from a loan or loans made by such taxpayer to a |
24 |
| borrower,
to the extent that such a loan is secured by |
25 |
| property which is eligible for
the High Impact Business |
26 |
| Investment Credit. To determine the portion of a
loan |
27 |
| or loans that is secured by property eligible for a |
28 |
| Section 201(h) investment credit to the borrower, the |
29 |
| entire principal amount of
the loan or loans between |
30 |
| the taxpayer and the borrower should be divided into
|
31 |
| the basis of the Section 201(h) investment credit |
32 |
| property which
secures the loan or loans, using for |
33 |
| this purpose the original basis of such
property on the |
34 |
| date that it was placed in service in a federally |
35 |
| designated
Foreign Trade Zone or Sub-Zone located in |
36 |
| Illinois. No taxpayer that is
eligible for the |
|
|
|
HB2706 Enrolled |
- 43 - |
LRB094 03732 BDD 33741 b |
|
|
1 |
| deduction provided in subparagraph (M) of paragraph |
2 |
| (2) of
this subsection shall be eligible for the |
3 |
| deduction provided under this
subparagraph (M-1). The |
4 |
| subtraction modification available to taxpayers in
any |
5 |
| year under this subsection shall be that portion of the |
6 |
| total interest
paid by the borrower with respect to |
7 |
| such loan attributable to the eligible
property as |
8 |
| calculated under the previous sentence;
|
9 |
| (N) Two times any contribution made during the |
10 |
| taxable year to a
designated zone organization to the |
11 |
| extent that the contribution (i)
qualifies as a |
12 |
| charitable contribution under subsection (c) of |
13 |
| Section 170
of the Internal Revenue Code and (ii) must, |
14 |
| by its terms, be used for a
project approved by the |
15 |
| Department of Commerce and Economic Opportunity under |
16 |
| Section 11 of the Illinois Enterprise Zone Act;
|
17 |
| (O) An amount equal to: (i) 85% for taxable years |
18 |
| ending on or before
December 31, 1992, or, a percentage |
19 |
| equal to the percentage allowable under
Section |
20 |
| 243(a)(1) of the Internal Revenue Code of 1986 for |
21 |
| taxable years ending
after December 31, 1992, of the |
22 |
| amount by which dividends included in taxable
income |
23 |
| and received from a corporation that is not created or |
24 |
| organized under
the laws of the United States or any |
25 |
| state or political subdivision thereof,
including, for |
26 |
| taxable years ending on or after December 31, 1988, |
27 |
| dividends
received or deemed received or paid or deemed |
28 |
| paid under Sections 951 through
964 of the Internal |
29 |
| Revenue Code, exceed the amount of the modification
|
30 |
| provided under subparagraph (G) of paragraph (2) of |
31 |
| this subsection (b) which
is related to such dividends; |
32 |
| plus (ii) 100% of the amount by which dividends,
|
33 |
| included in taxable income and received, including, |
34 |
| for taxable years ending on
or after December 31, 1988, |
35 |
| dividends received or deemed received or paid or
deemed |
36 |
| paid under Sections 951 through 964 of the Internal |
|
|
|
HB2706 Enrolled |
- 44 - |
LRB094 03732 BDD 33741 b |
|
|
1 |
| Revenue Code, from
any such corporation specified in |
2 |
| clause (i) that would but for the provisions
of Section |
3 |
| 1504 (b) (3) of the Internal Revenue Code be treated as |
4 |
| a member of
the affiliated group which includes the |
5 |
| dividend recipient, exceed the amount
of the |
6 |
| modification provided under subparagraph (G) of |
7 |
| paragraph (2) of this
subsection (b) which is related |
8 |
| to such dividends;
|
9 |
| (P) An amount equal to any contribution made to a |
10 |
| job training project
established pursuant to the Tax |
11 |
| Increment Allocation Redevelopment Act;
|
12 |
| (Q) An amount equal to the amount of the deduction |
13 |
| used to compute the
federal income tax credit for |
14 |
| restoration of substantial amounts held under
claim of |
15 |
| right for the taxable year pursuant to Section 1341 of |
16 |
| the
Internal Revenue Code of 1986;
|
17 |
| (R) In the case of an attorney-in-fact with respect |
18 |
| to whom an
interinsurer or a reciprocal insurer has |
19 |
| made the election under Section 835 of
the Internal |
20 |
| Revenue Code, 26 U.S.C. 835, an amount equal to the |
21 |
| excess, if
any, of the amounts paid or incurred by that |
22 |
| interinsurer or reciprocal insurer
in the taxable year |
23 |
| to the attorney-in-fact over the deduction allowed to |
24 |
| that
interinsurer or reciprocal insurer with respect |
25 |
| to the attorney-in-fact under
Section 835(b) of the |
26 |
| Internal Revenue Code for the taxable year;
|
27 |
| (S) For taxable years ending on or after December |
28 |
| 31, 1997, in the
case of a Subchapter
S corporation, an |
29 |
| amount equal to all amounts of income allocable to a
|
30 |
| shareholder subject to the Personal Property Tax |
31 |
| Replacement Income Tax imposed
by subsections (c) and |
32 |
| (d) of Section 201 of this Act, including amounts
|
33 |
| allocable to organizations exempt from federal income |
34 |
| tax by reason of Section
501(a) of the Internal Revenue |
35 |
| Code. This subparagraph (S) is exempt from
the |
36 |
| provisions of Section 250;
|
|
|
|
HB2706 Enrolled |
- 45 - |
LRB094 03732 BDD 33741 b |
|
|
1 |
| (T) For taxable years 2001 and thereafter, for the |
2 |
| taxable year in
which the bonus depreciation deduction |
3 |
| (30% of the adjusted basis of the
qualified property)
|
4 |
| is taken on the taxpayer's federal income tax return |
5 |
| under
subsection (k) of Section 168 of the Internal |
6 |
| Revenue Code and for each
applicable taxable year |
7 |
| thereafter, an amount equal to "x", where:
|
8 |
| (1) "y" equals the amount of the depreciation |
9 |
| deduction taken for the
taxable year
on the |
10 |
| taxpayer's federal income tax return on property |
11 |
| for which the bonus
depreciation deduction (30% of |
12 |
| the adjusted basis of the qualified property)
was |
13 |
| taken in any year under subsection (k) of Section |
14 |
| 168 of the Internal
Revenue Code, but not including |
15 |
| the bonus depreciation deduction; and
|
16 |
| (2) for taxable years ending on or before |
17 |
| December 31, 2005, "x" equals "y" multiplied by 30 |
18 |
| and then divided by 70 (or "y"
multiplied by |
19 |
| 0.429) ; and |
20 |
| (3) for taxable years ending after December |
21 |
| 31, 2005: |
22 |
| (i) for property on which a bonus |
23 |
| depreciation deduction of 30% of the adjusted |
24 |
| basis was taken, "x" equals "y" multiplied by |
25 |
| 30 and then divided by 70 (or "y"
multiplied by |
26 |
| 0.429); and |
27 |
| (ii) for property on which a bonus |
28 |
| depreciation deduction of 50% of the adjusted |
29 |
| basis was taken, "x" equals "y" multiplied by |
30 |
| 1.0 .
|
31 |
| The aggregate amount deducted under this |
32 |
| subparagraph in all taxable
years for any one piece of |
33 |
| property may not exceed the amount of the bonus
|
34 |
| depreciation deduction (30% of the adjusted basis of |
35 |
| the qualified property)
taken on that property on the |
36 |
| taxpayer's federal income tax return under
subsection |
|
|
|
HB2706 Enrolled |
- 46 - |
LRB094 03732 BDD 33741 b |
|
|
1 |
| (k) of Section 168 of the Internal Revenue Code . This |
2 |
| subparagraph (T) is exempt from the provisions of |
3 |
| Section 250 ;
|
4 |
| (U) If the taxpayer sells, transfers, abandons, or |
5 |
| otherwise disposes of
reports a capital gain or loss on |
6 |
| the taxpayer's
federal income tax return for the |
7 |
| taxable year based on a sale or transfer of
property |
8 |
| for which the taxpayer was required in any taxable year |
9 |
| to make an
addition modification under subparagraph |
10 |
| (E-10), then an amount equal to that
addition |
11 |
| modification.
|
12 |
| If the taxpayer continues to own property through |
13 |
| the last day of the last tax year for which the |
14 |
| taxpayer may claim a depreciation deduction for |
15 |
| federal income tax purposes and for which the taxpayer |
16 |
| was required in any taxable year to make an addition |
17 |
| modification under subparagraph (E-10), then an amount |
18 |
| equal to that addition modification.
|
19 |
| The taxpayer is allowed to take the deduction under |
20 |
| this subparagraph
only once with respect to any one |
21 |
| piece of property . |
22 |
| This subparagraph (U) is exempt from the |
23 |
| provisions of Section 250 ;
|
24 |
| (V) The amount of: (i) any interest income (net of |
25 |
| the deductions allocable thereto) taken into account |
26 |
| for the taxable year with respect to a transaction with |
27 |
| a taxpayer that is required to make an addition |
28 |
| modification with respect to such transaction under |
29 |
| Section 203(a)(2)(D-17), 203(b)(2)(E-12), |
30 |
| 203(c)(2)(G-12), or 203(d)(2)(D-7), but not to exceed |
31 |
| the amount of such addition modification and
(ii) any |
32 |
| income from intangible property (net of the deductions |
33 |
| allocable thereto) taken into account for the taxable |
34 |
| year with respect to a transaction with a taxpayer that |
35 |
| is required to make an addition modification with |
36 |
| respect to such transaction under Section |
|
|
|
HB2706 Enrolled |
- 47 - |
LRB094 03732 BDD 33741 b |
|
|
1 |
| 203(a)(2)(D-18), 203(b)(2)(E-13), 203(c)(2)(G-13), or |
2 |
| 203(d)(2)(D-8), but not to exceed the amount of such |
3 |
| addition modification;
|
4 |
| (W) An amount equal to the interest income taken |
5 |
| into account for the taxable year (net of the |
6 |
| deductions allocable thereto) with respect to |
7 |
| transactions with a foreign person who would be a |
8 |
| member of the taxpayer's unitary business group but for |
9 |
| the fact that the foreign person's business activity |
10 |
| outside the United States is 80% or more of that |
11 |
| person's total business activity, but not to exceed the |
12 |
| addition modification required to be made for the same |
13 |
| taxable year under Section 203(b)(2)(E-12) for |
14 |
| interest paid, accrued, or incurred, directly or |
15 |
| indirectly, to the same foreign person; and
|
16 |
| (X) An amount equal to the income from intangible |
17 |
| property taken into account for the taxable year (net |
18 |
| of the deductions allocable thereto) with respect to |
19 |
| transactions with a foreign person who would be a |
20 |
| member of the taxpayer's unitary business group but for |
21 |
| the fact that the foreign person's business activity |
22 |
| outside the United States is 80% or more of that |
23 |
| person's total business activity, but not to exceed the |
24 |
| addition modification required to be made for the same |
25 |
| taxable year under Section 203(b)(2)(E-13) for |
26 |
| intangible expenses and costs paid, accrued, or |
27 |
| incurred, directly or indirectly, to the same foreign |
28 |
| person.
|
29 |
| (3) Special rule. For purposes of paragraph (2) (A), |
30 |
| "gross income"
in the case of a life insurance company, for |
31 |
| tax years ending on and after
December 31, 1994,
shall mean |
32 |
| the gross investment income for the taxable year.
|
33 |
| (c) Trusts and estates.
|
34 |
| (1) In general. In the case of a trust or estate, base |
35 |
| income means
an amount equal to the taxpayer's taxable |
|
|
|
HB2706 Enrolled |
- 48 - |
LRB094 03732 BDD 33741 b |
|
|
1 |
| income for the taxable year as
modified by paragraph (2).
|
2 |
| (2) Modifications. Subject to the provisions of |
3 |
| paragraph (3), the
taxable income referred to in paragraph |
4 |
| (1) shall be modified by adding
thereto the sum of the |
5 |
| following amounts:
|
6 |
| (A) An amount equal to all amounts paid or accrued |
7 |
| to the taxpayer
as interest or dividends during the |
8 |
| taxable year to the extent excluded
from gross income |
9 |
| in the computation of taxable income;
|
10 |
| (B) In the case of (i) an estate, $600; (ii) a |
11 |
| trust which, under
its governing instrument, is |
12 |
| required to distribute all of its income
currently, |
13 |
| $300; and (iii) any other trust, $100, but in each such |
14 |
| case,
only to the extent such amount was deducted in |
15 |
| the computation of
taxable income;
|
16 |
| (C) An amount equal to the amount of tax imposed by |
17 |
| this Act to the
extent deducted from gross income in |
18 |
| the computation of taxable income
for the taxable year;
|
19 |
| (D) The amount of any net operating loss deduction |
20 |
| taken in arriving at
taxable income, other than a net |
21 |
| operating loss carried forward from a
taxable year |
22 |
| ending prior to December 31, 1986;
|
23 |
| (E) For taxable years in which a net operating loss |
24 |
| carryback or
carryforward from a taxable year ending |
25 |
| prior to December 31, 1986 is an
element of taxable |
26 |
| income under paragraph (1) of subsection (e) or |
27 |
| subparagraph
(E) of paragraph (2) of subsection (e), |
28 |
| the amount by which addition
modifications other than |
29 |
| those provided by this subparagraph (E) exceeded
|
30 |
| subtraction modifications in such taxable year, with |
31 |
| the following limitations
applied in the order that |
32 |
| they are listed:
|
33 |
| (i) the addition modification relating to the |
34 |
| net operating loss
carried back or forward to the |
35 |
| taxable year from any taxable year ending
prior to |
36 |
| December 31, 1986 shall be reduced by the amount of |
|
|
|
HB2706 Enrolled |
- 49 - |
LRB094 03732 BDD 33741 b |
|
|
1 |
| addition
modification under this subparagraph (E) |
2 |
| which related to that net
operating loss and which |
3 |
| was taken into account in calculating the base
|
4 |
| income of an earlier taxable year, and
|
5 |
| (ii) the addition modification relating to the |
6 |
| net operating loss
carried back or forward to the |
7 |
| taxable year from any taxable year ending
prior to |
8 |
| December 31, 1986 shall not exceed the amount of |
9 |
| such carryback or
carryforward;
|
10 |
| For taxable years in which there is a net operating |
11 |
| loss carryback or
carryforward from more than one other |
12 |
| taxable year ending prior to December
31, 1986, the |
13 |
| addition modification provided in this subparagraph |
14 |
| (E) shall
be the sum of the amounts computed |
15 |
| independently under the preceding
provisions of this |
16 |
| subparagraph (E) for each such taxable year;
|
17 |
| (F) For taxable years ending on or after January 1, |
18 |
| 1989, an amount
equal to the tax deducted pursuant to |
19 |
| Section 164 of the Internal Revenue
Code if the trust |
20 |
| or estate is claiming the same tax for purposes of the
|
21 |
| Illinois foreign tax credit under Section 601 of this |
22 |
| Act;
|
23 |
| (G) An amount equal to the amount of the capital |
24 |
| gain deduction
allowable under the Internal Revenue |
25 |
| Code, to the extent deducted from
gross income in the |
26 |
| computation of taxable income;
|
27 |
| (G-5) For taxable years ending after December 31, |
28 |
| 1997, an
amount equal to any eligible remediation costs |
29 |
| that the trust or estate
deducted in computing adjusted |
30 |
| gross income and for which the trust
or estate claims a |
31 |
| credit under subsection (l) of Section 201;
|
32 |
| (G-10) For taxable years 2001 and thereafter, an |
33 |
| amount equal to the
bonus depreciation deduction (30% |
34 |
| of the adjusted basis of the qualified
property) taken |
35 |
| on the taxpayer's federal income tax return for the |
36 |
| taxable
year under subsection (k) of Section 168 of the |
|
|
|
HB2706 Enrolled |
- 50 - |
LRB094 03732 BDD 33741 b |
|
|
1 |
| Internal Revenue Code; and
|
2 |
| (G-11) If the taxpayer sells, transfers, abandons, |
3 |
| or otherwise disposes of
reports a capital gain or loss |
4 |
| on the
taxpayer's federal income tax return for the |
5 |
| taxable year based on a sale or
transfer of property |
6 |
| for which the taxpayer was required in any taxable year |
7 |
| to
make an addition modification under subparagraph |
8 |
| (G-10), then an amount equal
to the aggregate amount of |
9 |
| the deductions taken in all taxable
years under |
10 |
| subparagraph (R) with respect to that property.
|
11 |
| If the taxpayer continues to own property through |
12 |
| the last day of the last tax year for which the |
13 |
| taxpayer may claim a depreciation deduction for |
14 |
| federal income tax purposes and for which the taxpayer |
15 |
| was allowed in any taxable year to make a subtraction |
16 |
| modification under subparagraph (R), then an amount |
17 |
| equal to that subtraction modification.
|
18 |
| The taxpayer is required to make the addition |
19 |
| modification under this
subparagraph
only once with |
20 |
| respect to any one piece of property;
|
21 |
| (G-12) For taxable years ending on or after |
22 |
| December 31, 2004, an amount equal to the amount |
23 |
| otherwise allowed as a deduction in computing base |
24 |
| income for interest paid, accrued, or incurred, |
25 |
| directly or indirectly, to a foreign person who would |
26 |
| be a member of the same unitary business group but for |
27 |
| the fact that the foreign person's business activity |
28 |
| outside the United States is 80% or more of the foreign |
29 |
| person's total business activity. The addition |
30 |
| modification required by this subparagraph shall be |
31 |
| reduced to the extent that dividends were included in |
32 |
| base income of the unitary group for the same taxable |
33 |
| year and received by the taxpayer or by a member of the |
34 |
| taxpayer's unitary business group (including amounts |
35 |
| included in gross income pursuant to Sections 951 |
36 |
| through 964 of the Internal Revenue Code and amounts |
|
|
|
HB2706 Enrolled |
- 51 - |
LRB094 03732 BDD 33741 b |
|
|
1 |
| included in gross income under Section 78 of the |
2 |
| Internal Revenue Code) with respect to the stock of the |
3 |
| same person to whom the interest was paid, accrued, or |
4 |
| incurred.
|
5 |
| This paragraph shall not apply to the following:
|
6 |
| (i) an item of interest paid, accrued, or |
7 |
| incurred, directly or indirectly, to a foreign |
8 |
| person who is subject in a foreign country or |
9 |
| state, other than a state which requires mandatory |
10 |
| unitary reporting, to a tax on or measured by net |
11 |
| income with respect to such interest; or |
12 |
| (ii) an item of interest paid, accrued, or |
13 |
| incurred, directly or indirectly, to a foreign |
14 |
| person if the taxpayer can establish, based on a |
15 |
| preponderance of the evidence, both of the |
16 |
| following: |
17 |
| (a) the foreign person, during the same |
18 |
| taxable year, paid, accrued, or incurred, the |
19 |
| interest to a person that is not a related |
20 |
| member, and |
21 |
| (b) the transaction giving rise to the |
22 |
| interest expense between the taxpayer and the |
23 |
| foreign person did not have as a principal |
24 |
| purpose the avoidance of Illinois income tax, |
25 |
| and is paid pursuant to a contract or agreement |
26 |
| that reflects an arm's-length interest rate |
27 |
| and terms; or
|
28 |
| (iii) the taxpayer can establish, based on |
29 |
| clear and convincing evidence, that the interest |
30 |
| paid, accrued, or incurred relates to a contract or |
31 |
| agreement entered into at arm's-length rates and |
32 |
| terms and the principal purpose for the payment is |
33 |
| not federal or Illinois tax avoidance; or
|
34 |
| (iv) an item of interest paid, accrued, or |
35 |
| incurred, directly or indirectly, to a foreign |
36 |
| person if the taxpayer establishes by clear and |
|
|
|
HB2706 Enrolled |
- 52 - |
LRB094 03732 BDD 33741 b |
|
|
1 |
| convincing evidence that the adjustments are |
2 |
| unreasonable; or if the taxpayer and the Director |
3 |
| agree in writing to the application or use of an |
4 |
| alternative method of apportionment under Section |
5 |
| 304(f).
|
6 |
| Nothing in this subsection shall preclude the |
7 |
| Director from making any other adjustment |
8 |
| otherwise allowed under Section 404 of this Act for |
9 |
| any tax year beginning after the effective date of |
10 |
| this amendment provided such adjustment is made |
11 |
| pursuant to regulation adopted by the Department |
12 |
| and such regulations provide methods and standards |
13 |
| by which the Department will utilize its authority |
14 |
| under Section 404 of this Act;
|
15 |
| (G-13) For taxable years ending on or after |
16 |
| December 31, 2004, an amount equal to the amount of |
17 |
| intangible expenses and costs otherwise allowed as a |
18 |
| deduction in computing base income, and that were paid, |
19 |
| accrued, or incurred, directly or indirectly, to a |
20 |
| foreign person who would be a member of the same |
21 |
| unitary business group but for the fact that the |
22 |
| foreign person's business activity outside the United |
23 |
| States is 80% or more of that person's total business |
24 |
| activity. The addition modification required by this |
25 |
| subparagraph shall be reduced to the extent that |
26 |
| dividends were included in base income of the unitary |
27 |
| group for the same taxable year and received by the |
28 |
| taxpayer or by a member of the taxpayer's unitary |
29 |
| business group (including amounts included in gross |
30 |
| income pursuant to Sections 951 through 964 of the |
31 |
| Internal Revenue Code and amounts included in gross |
32 |
| income under Section 78 of the Internal Revenue Code) |
33 |
| with respect to the stock of the same person to whom |
34 |
| the intangible expenses and costs were directly or |
35 |
| indirectly paid, incurred, or accrued. The preceding |
36 |
| sentence shall not apply to the extent that the same |
|
|
|
HB2706 Enrolled |
- 53 - |
LRB094 03732 BDD 33741 b |
|
|
1 |
| dividends caused a reduction to the addition |
2 |
| modification required under Section 203(c)(2)(G-12) of |
3 |
| this Act. As used in this subparagraph, the term |
4 |
| "intangible expenses and costs" includes: (1) |
5 |
| expenses, losses, and costs for or related to the |
6 |
| direct or indirect acquisition, use, maintenance or |
7 |
| management, ownership, sale, exchange, or any other |
8 |
| disposition of intangible property; (2) losses |
9 |
| incurred, directly or indirectly, from factoring |
10 |
| transactions or discounting transactions; (3) royalty, |
11 |
| patent, technical, and copyright fees; (4) licensing |
12 |
| fees; and (5) other similar expenses and costs. For |
13 |
| purposes of this subparagraph, "intangible property" |
14 |
| includes patents, patent applications, trade names, |
15 |
| trademarks, service marks, copyrights, mask works, |
16 |
| trade secrets, and similar types of intangible assets. |
17 |
| This paragraph shall not apply to the following: |
18 |
| (i) any item of intangible expenses or costs |
19 |
| paid, accrued, or incurred, directly or |
20 |
| indirectly, from a transaction with a foreign |
21 |
| person who is subject in a foreign country or |
22 |
| state, other than a state which requires mandatory |
23 |
| unitary reporting, to a tax on or measured by net |
24 |
| income with respect to such item; or |
25 |
| (ii) any item of intangible expense or cost |
26 |
| paid, accrued, or incurred, directly or |
27 |
| indirectly, if the taxpayer can establish, based |
28 |
| on a preponderance of the evidence, both of the |
29 |
| following: |
30 |
| (a) the foreign person during the same |
31 |
| taxable year paid, accrued, or incurred, the |
32 |
| intangible expense or cost to a person that is |
33 |
| not a related member, and |
34 |
| (b) the transaction giving rise to the |
35 |
| intangible expense or cost between the |
36 |
| taxpayer and the foreign person did not have as |
|
|
|
HB2706 Enrolled |
- 54 - |
LRB094 03732 BDD 33741 b |
|
|
1 |
| a principal purpose the avoidance of Illinois |
2 |
| income tax, and is paid pursuant to a contract |
3 |
| or agreement that reflects arm's-length terms; |
4 |
| or |
5 |
| (iii) any item of intangible expense or cost |
6 |
| paid, accrued, or incurred, directly or |
7 |
| indirectly, from a transaction with a foreign |
8 |
| person if the taxpayer establishes by clear and |
9 |
| convincing evidence, that the adjustments are |
10 |
| unreasonable; or if the taxpayer and the Director |
11 |
| agree in writing to the application or use of an |
12 |
| alternative method of apportionment under Section |
13 |
| 304(f);
|
14 |
| Nothing in this subsection shall preclude the |
15 |
| Director from making any other adjustment |
16 |
| otherwise allowed under Section 404 of this Act for |
17 |
| any tax year beginning after the effective date of |
18 |
| this amendment provided such adjustment is made |
19 |
| pursuant to regulation adopted by the Department |
20 |
| and such regulations provide methods and standards |
21 |
| by which the Department will utilize its authority |
22 |
| under Section 404 of this Act;
|
23 |
| and by deducting from the total so obtained the sum of the |
24 |
| following
amounts:
|
25 |
| (H) An amount equal to all amounts included in such |
26 |
| total pursuant
to the provisions of Sections 402(a), |
27 |
| 402(c), 403(a), 403(b), 406(a), 407(a)
and 408 of the |
28 |
| Internal Revenue Code or included in such total as
|
29 |
| distributions under the provisions of any retirement |
30 |
| or disability plan for
employees of any governmental |
31 |
| agency or unit, or retirement payments to
retired |
32 |
| partners, which payments are excluded in computing net |
33 |
| earnings
from self employment by Section 1402 of the |
34 |
| Internal Revenue Code and
regulations adopted pursuant |
35 |
| thereto;
|
36 |
| (I) The valuation limitation amount;
|
|
|
|
HB2706 Enrolled |
- 55 - |
LRB094 03732 BDD 33741 b |
|
|
1 |
| (J) An amount equal to the amount of any tax |
2 |
| imposed by this Act
which was refunded to the taxpayer |
3 |
| and included in such total for the
taxable year;
|
4 |
| (K) An amount equal to all amounts included in |
5 |
| taxable income as
modified by subparagraphs (A), (B), |
6 |
| (C), (D), (E), (F) and (G) which
are exempt from |
7 |
| taxation by this State either by reason of its statutes |
8 |
| or
Constitution
or by reason of the Constitution, |
9 |
| treaties or statutes of the United States;
provided |
10 |
| that, in the case of any statute of this State that |
11 |
| exempts income
derived from bonds or other obligations |
12 |
| from the tax imposed under this Act,
the amount |
13 |
| exempted shall be the interest net of bond premium |
14 |
| amortization;
|
15 |
| (L) With the exception of any amounts subtracted |
16 |
| under subparagraph
(K),
an amount equal to the sum of |
17 |
| all amounts disallowed as
deductions by (i) Sections |
18 |
| 171(a) (2) and 265(a)(2) of the Internal Revenue
Code, |
19 |
| as now or hereafter amended, and all amounts of |
20 |
| expenses allocable
to interest and disallowed as |
21 |
| deductions by Section 265(1) of the Internal
Revenue |
22 |
| Code of 1954, as now or hereafter amended;
and (ii) for |
23 |
| taxable years
ending on or after August 13, 1999, |
24 |
| Sections
171(a)(2), 265,
280C, and 832(b)(5)(B)(i) of |
25 |
| the Internal Revenue Code; the provisions of this
|
26 |
| subparagraph are exempt from the provisions of Section |
27 |
| 250;
|
28 |
| (M) An amount equal to those dividends included in |
29 |
| such total
which were paid by a corporation which |
30 |
| conducts business operations in an
Enterprise Zone or |
31 |
| zones created under the Illinois Enterprise Zone Act |
32 |
| and
conducts substantially all of its operations in an |
33 |
| Enterprise Zone or Zones;
|
34 |
| (N) An amount equal to any contribution made to a |
35 |
| job training
project established pursuant to the Tax |
36 |
| Increment Allocation
Redevelopment Act;
|
|
|
|
HB2706 Enrolled |
- 56 - |
LRB094 03732 BDD 33741 b |
|
|
1 |
| (O) An amount equal to those dividends included in |
2 |
| such total
that were paid by a corporation that |
3 |
| conducts business operations in a
federally designated |
4 |
| Foreign Trade Zone or Sub-Zone and that is designated
a |
5 |
| High Impact Business located in Illinois; provided |
6 |
| that dividends eligible
for the deduction provided in |
7 |
| subparagraph (M) of paragraph (2) of this
subsection |
8 |
| shall not be eligible for the deduction provided under |
9 |
| this
subparagraph (O);
|
10 |
| (P) An amount equal to the amount of the deduction |
11 |
| used to compute the
federal income tax credit for |
12 |
| restoration of substantial amounts held under
claim of |
13 |
| right for the taxable year pursuant to Section 1341 of |
14 |
| the
Internal Revenue Code of 1986;
|
15 |
| (Q) For taxable year 1999 and thereafter, an amount |
16 |
| equal to the
amount of any
(i) distributions, to the |
17 |
| extent includible in gross income for
federal income |
18 |
| tax purposes, made to the taxpayer because of
his or |
19 |
| her status as a victim of
persecution for racial or |
20 |
| religious reasons by Nazi Germany or any other Axis
|
21 |
| regime or as an heir of the victim and (ii) items
of |
22 |
| income, to the extent
includible in gross income for |
23 |
| federal income tax purposes, attributable to,
derived |
24 |
| from or in any way related to assets stolen from, |
25 |
| hidden from, or
otherwise lost to a victim of
|
26 |
| persecution for racial or religious reasons by Nazi
|
27 |
| Germany or any other Axis regime
immediately prior to, |
28 |
| during, and immediately after World War II, including,
|
29 |
| but
not limited to, interest on the proceeds receivable |
30 |
| as insurance
under policies issued to a victim of |
31 |
| persecution for racial or religious
reasons by Nazi |
32 |
| Germany or any other Axis regime by European insurance
|
33 |
| companies
immediately prior to and during World War II;
|
34 |
| provided, however, this subtraction from federal |
35 |
| adjusted gross income does not
apply to assets acquired |
36 |
| with such assets or with the proceeds from the sale of
|
|
|
|
HB2706 Enrolled |
- 57 - |
LRB094 03732 BDD 33741 b |
|
|
1 |
| such assets; provided, further, this paragraph shall |
2 |
| only apply to a taxpayer
who was the first recipient of |
3 |
| such assets after their recovery and who is a
victim of
|
4 |
| persecution for racial or religious reasons
by Nazi |
5 |
| Germany or any other Axis regime or as an heir of the |
6 |
| victim. The
amount of and the eligibility for any |
7 |
| public assistance, benefit, or
similar entitlement is |
8 |
| not affected by the inclusion of items (i) and (ii) of
|
9 |
| this paragraph in gross income for federal income tax |
10 |
| purposes.
This paragraph is exempt from the provisions |
11 |
| of Section 250;
|
12 |
| (R) For taxable years 2001 and thereafter, for the |
13 |
| taxable year in
which the bonus depreciation deduction |
14 |
| (30% of the adjusted basis of the
qualified property)
|
15 |
| is taken on the taxpayer's federal income tax return |
16 |
| under
subsection (k) of Section 168 of the Internal |
17 |
| Revenue Code and for each
applicable taxable year |
18 |
| thereafter, an amount equal to "x", where:
|
19 |
| (1) "y" equals the amount of the depreciation |
20 |
| deduction taken for the
taxable year
on the |
21 |
| taxpayer's federal income tax return on property |
22 |
| for which the bonus
depreciation deduction (30% of |
23 |
| the adjusted basis of the qualified property)
was |
24 |
| taken in any year under subsection (k) of Section |
25 |
| 168 of the Internal
Revenue Code, but not including |
26 |
| the bonus depreciation deduction; and
|
27 |
| (2) for taxable years ending on or before |
28 |
| December 31, 2005, "x" equals "y" multiplied by 30 |
29 |
| and then divided by 70 (or "y"
multiplied by |
30 |
| 0.429) ; and |
31 |
| (3) for taxable years ending after December |
32 |
| 31, 2005: |
33 |
| (i) for property on which a bonus |
34 |
| depreciation deduction of 30% of the adjusted |
35 |
| basis was taken, "x" equals "y" multiplied by |
36 |
| 30 and then divided by 70 (or "y"
multiplied by |
|
|
|
HB2706 Enrolled |
- 58 - |
LRB094 03732 BDD 33741 b |
|
|
1 |
| 0.429); and |
2 |
| (ii) for property on which a bonus |
3 |
| depreciation deduction of 50% of the adjusted |
4 |
| basis was taken, "x" equals "y" multiplied by |
5 |
| 1.0 .
|
6 |
| The aggregate amount deducted under this |
7 |
| subparagraph in all taxable
years for any one piece of |
8 |
| property may not exceed the amount of the bonus
|
9 |
| depreciation deduction (30% of the adjusted basis of |
10 |
| the qualified property)
taken on that property on the |
11 |
| taxpayer's federal income tax return under
subsection |
12 |
| (k) of Section 168 of the Internal Revenue Code . This |
13 |
| subparagraph (R) is exempt from the provisions of |
14 |
| Section 250 ;
|
15 |
| (S) If the taxpayer sells, transfers, abandons, or |
16 |
| otherwise disposes of
reports a capital gain or loss on |
17 |
| the taxpayer's
federal income tax return for the |
18 |
| taxable year based on a sale or transfer of
property |
19 |
| for which the taxpayer was required in any taxable year |
20 |
| to make an
addition modification under subparagraph |
21 |
| (G-10), then an amount equal to that
addition |
22 |
| modification.
|
23 |
| If the taxpayer continues to own property through |
24 |
| the last day of the last tax year for which the |
25 |
| taxpayer may claim a depreciation deduction for |
26 |
| federal income tax purposes and for which the taxpayer |
27 |
| was required in any taxable year to make an addition |
28 |
| modification under subparagraph (G-10), then an amount |
29 |
| equal to that addition modification.
|
30 |
| The taxpayer is allowed to take the deduction under |
31 |
| this subparagraph
only once with respect to any one |
32 |
| piece of property . |
33 |
| This subparagraph (S) is exempt from the |
34 |
| provisions of Section 250 ;
|
35 |
| (T) The amount of (i) any interest income (net of |
36 |
| the deductions allocable thereto) taken into account |
|
|
|
HB2706 Enrolled |
- 59 - |
LRB094 03732 BDD 33741 b |
|
|
1 |
| for the taxable year with respect to a transaction with |
2 |
| a taxpayer that is required to make an addition |
3 |
| modification with respect to such transaction under |
4 |
| Section 203(a)(2)(D-17), 203(b)(2)(E-12), |
5 |
| 203(c)(2)(G-12), or 203(d)(2)(D-7), but not to exceed |
6 |
| the amount of such addition modification and
(ii) any |
7 |
| income from intangible property (net of the deductions |
8 |
| allocable thereto) taken into account for the taxable |
9 |
| year with respect to a transaction with a taxpayer that |
10 |
| is required to make an addition modification with |
11 |
| respect to such transaction under Section |
12 |
| 203(a)(2)(D-18), 203(b)(2)(E-13), 203(c)(2)(G-13), or |
13 |
| 203(d)(2)(D-8), but not to exceed the amount of such |
14 |
| addition modification;
|
15 |
| (U) An amount equal to the interest income taken |
16 |
| into account for the taxable year (net of the |
17 |
| deductions allocable thereto) with respect to |
18 |
| transactions with a foreign person who would be a |
19 |
| member of the taxpayer's unitary business group but for |
20 |
| the fact the foreign person's business activity |
21 |
| outside the United States is 80% or more of that |
22 |
| person's total business activity, but not to exceed the |
23 |
| addition modification required to be made for the same |
24 |
| taxable year under Section 203(c)(2)(G-12) for |
25 |
| interest paid, accrued, or incurred, directly or |
26 |
| indirectly, to the same foreign person; and
|
27 |
| (V) An amount equal to the income from intangible |
28 |
| property taken into account for the taxable year (net |
29 |
| of the deductions allocable thereto) with respect to |
30 |
| transactions with a foreign person who would be a |
31 |
| member of the taxpayer's unitary business group but for |
32 |
| the fact that the foreign person's business activity |
33 |
| outside the United States is 80% or more of that |
34 |
| person's total business activity, but not to exceed the |
35 |
| addition modification required to be made for the same |
36 |
| taxable year under Section 203(c)(2)(G-13) for |
|
|
|
HB2706 Enrolled |
- 60 - |
LRB094 03732 BDD 33741 b |
|
|
1 |
| intangible expenses and costs paid, accrued, or |
2 |
| incurred, directly or indirectly, to the same foreign |
3 |
| person.
|
4 |
| (3) Limitation. The amount of any modification |
5 |
| otherwise required
under this subsection shall, under |
6 |
| regulations prescribed by the
Department, be adjusted by |
7 |
| any amounts included therein which were
properly paid, |
8 |
| credited, or required to be distributed, or permanently set
|
9 |
| aside for charitable purposes pursuant to Internal Revenue |
10 |
| Code Section
642(c) during the taxable year.
|
11 |
| (d) Partnerships.
|
12 |
| (1) In general. In the case of a partnership, base |
13 |
| income means an
amount equal to the taxpayer's taxable |
14 |
| income for the taxable year as
modified by paragraph (2).
|
15 |
| (2) Modifications. The taxable income referred to in |
16 |
| paragraph (1)
shall be modified by adding thereto the sum |
17 |
| of the following amounts:
|
18 |
| (A) An amount equal to all amounts paid or accrued |
19 |
| to the taxpayer as
interest or dividends during the |
20 |
| taxable year to the extent excluded from
gross income |
21 |
| in the computation of taxable income;
|
22 |
| (B) An amount equal to the amount of tax imposed by |
23 |
| this Act to the
extent deducted from gross income for |
24 |
| the taxable year;
|
25 |
| (C) The amount of deductions allowed to the |
26 |
| partnership pursuant to
Section 707 (c) of the Internal |
27 |
| Revenue Code in calculating its taxable income;
|
28 |
| (D) An amount equal to the amount of the capital |
29 |
| gain deduction
allowable under the Internal Revenue |
30 |
| Code, to the extent deducted from
gross income in the |
31 |
| computation of taxable income;
|
32 |
| (D-5) For taxable years 2001 and thereafter, an |
33 |
| amount equal to the
bonus depreciation deduction (30% |
34 |
| of the adjusted basis of the qualified
property) taken |
35 |
| on the taxpayer's federal income tax return for the |
|
|
|
HB2706 Enrolled |
- 61 - |
LRB094 03732 BDD 33741 b |
|
|
1 |
| taxable
year under subsection (k) of Section 168 of the |
2 |
| Internal Revenue Code;
|
3 |
| (D-6) If the taxpayer sells, transfers, abandons, |
4 |
| or otherwise disposes of
reports a capital gain or loss |
5 |
| on the taxpayer's
federal income tax return for the |
6 |
| taxable year based on a sale or transfer of
property |
7 |
| for which the taxpayer was required in any taxable year |
8 |
| to make an
addition modification under subparagraph |
9 |
| (D-5), then an amount equal to the
aggregate amount of |
10 |
| the deductions taken in all taxable years
under |
11 |
| subparagraph (O) with respect to that property.
|
12 |
| If the taxpayer continues to own property through |
13 |
| the last day of the last tax year for which the |
14 |
| taxpayer may claim a depreciation deduction for |
15 |
| federal income tax purposes and for which the taxpayer |
16 |
| was allowed in any taxable year to make a subtraction |
17 |
| modification under subparagraph (O), then an amount |
18 |
| equal to that subtraction modification.
|
19 |
| The taxpayer is required to make the addition |
20 |
| modification under this
subparagraph
only once with |
21 |
| respect to any one piece of property;
|
22 |
| (D-7) For taxable years ending on or after December |
23 |
| 31, 2004, an amount equal to the amount otherwise |
24 |
| allowed as a deduction in computing base income for |
25 |
| interest paid, accrued, or incurred, directly or |
26 |
| indirectly, to a foreign person who would be a member |
27 |
| of the same unitary business group but for the fact the |
28 |
| foreign person's business activity outside the United |
29 |
| States is 80% or more of the foreign person's total |
30 |
| business activity. The addition modification required |
31 |
| by this subparagraph shall be reduced to the extent |
32 |
| that dividends were included in base income of the |
33 |
| unitary group for the same taxable year and received by |
34 |
| the taxpayer or by a member of the taxpayer's unitary |
35 |
| business group (including amounts included in gross |
36 |
| income pursuant to Sections 951 through 964 of the |
|
|
|
HB2706 Enrolled |
- 62 - |
LRB094 03732 BDD 33741 b |
|
|
1 |
| Internal Revenue Code and amounts included in gross |
2 |
| income under Section 78 of the Internal Revenue Code) |
3 |
| with respect to the stock of the same person to whom |
4 |
| the interest was paid, accrued, or incurred.
|
5 |
| This paragraph shall not apply to the following:
|
6 |
| (i) an item of interest paid, accrued, or |
7 |
| incurred, directly or indirectly, to a foreign |
8 |
| person who is subject in a foreign country or |
9 |
| state, other than a state which requires mandatory |
10 |
| unitary reporting, to a tax on or measured by net |
11 |
| income with respect to such interest; or |
12 |
| (ii) an item of interest paid, accrued, or |
13 |
| incurred, directly or indirectly, to a foreign |
14 |
| person if the taxpayer can establish, based on a |
15 |
| preponderance of the evidence, both of the |
16 |
| following: |
17 |
| (a) the foreign person, during the same |
18 |
| taxable year, paid, accrued, or incurred, the |
19 |
| interest to a person that is not a related |
20 |
| member, and |
21 |
| (b) the transaction giving rise to the |
22 |
| interest expense between the taxpayer and the |
23 |
| foreign person did not have as a principal |
24 |
| purpose the avoidance of Illinois income tax, |
25 |
| and is paid pursuant to a contract or agreement |
26 |
| that reflects an arm's-length interest rate |
27 |
| and terms; or
|
28 |
| (iii) the taxpayer can establish, based on |
29 |
| clear and convincing evidence, that the interest |
30 |
| paid, accrued, or incurred relates to a contract or |
31 |
| agreement entered into at arm's-length rates and |
32 |
| terms and the principal purpose for the payment is |
33 |
| not federal or Illinois tax avoidance; or
|
34 |
| (iv) an item of interest paid, accrued, or |
35 |
| incurred, directly or indirectly, to a foreign |
36 |
| person if the taxpayer establishes by clear and |
|
|
|
HB2706 Enrolled |
- 63 - |
LRB094 03732 BDD 33741 b |
|
|
1 |
| convincing evidence that the adjustments are |
2 |
| unreasonable; or if the taxpayer and the Director |
3 |
| agree in writing to the application or use of an |
4 |
| alternative method of apportionment under Section |
5 |
| 304(f).
|
6 |
| Nothing in this subsection shall preclude the |
7 |
| Director from making any other adjustment |
8 |
| otherwise allowed under Section 404 of this Act for |
9 |
| any tax year beginning after the effective date of |
10 |
| this amendment provided such adjustment is made |
11 |
| pursuant to regulation adopted by the Department |
12 |
| and such regulations provide methods and standards |
13 |
| by which the Department will utilize its authority |
14 |
| under Section 404 of this Act; and
|
15 |
| (D-8) For taxable years ending on or after December |
16 |
| 31, 2004, an amount equal to the amount of intangible |
17 |
| expenses and costs otherwise allowed as a deduction in |
18 |
| computing base income, and that were paid, accrued, or |
19 |
| incurred, directly or indirectly, to a foreign person |
20 |
| who would be a member of the same unitary business |
21 |
| group but for the fact that the foreign person's |
22 |
| business activity outside the United States is 80% or |
23 |
| more of that person's total business activity. The |
24 |
| addition modification required by this subparagraph |
25 |
| shall be reduced to the extent that dividends were |
26 |
| included in base income of the unitary group for the |
27 |
| same taxable year and received by the taxpayer or by a |
28 |
| member of the taxpayer's unitary business group |
29 |
| (including amounts included in gross income pursuant |
30 |
| to Sections 951 through 964 of the Internal Revenue |
31 |
| Code and amounts included in gross income under Section |
32 |
| 78 of the Internal Revenue Code) with respect to the |
33 |
| stock of the same person to whom the intangible |
34 |
| expenses and costs were directly or indirectly paid, |
35 |
| incurred or accrued. The preceding sentence shall not |
36 |
| apply to the extent that the same dividends caused a |
|
|
|
HB2706 Enrolled |
- 64 - |
LRB094 03732 BDD 33741 b |
|
|
1 |
| reduction to the addition modification required under |
2 |
| Section 203(d)(2)(D-7) of this Act. As used in this |
3 |
| subparagraph, the term "intangible expenses and costs" |
4 |
| includes (1) expenses, losses, and costs for, or |
5 |
| related to, the direct or indirect acquisition, use, |
6 |
| maintenance or management, ownership, sale, exchange, |
7 |
| or any other disposition of intangible property; (2) |
8 |
| losses incurred, directly or indirectly, from |
9 |
| factoring transactions or discounting transactions; |
10 |
| (3) royalty, patent, technical, and copyright fees; |
11 |
| (4) licensing fees; and (5) other similar expenses and |
12 |
| costs. For purposes of this subparagraph, "intangible |
13 |
| property" includes patents, patent applications, trade |
14 |
| names, trademarks, service marks, copyrights, mask |
15 |
| works, trade secrets, and similar types of intangible |
16 |
| assets; |
17 |
| This paragraph shall not apply to the following: |
18 |
| (i) any item of intangible expenses or costs |
19 |
| paid, accrued, or incurred, directly or |
20 |
| indirectly, from a transaction with a foreign |
21 |
| person who is subject in a foreign country or |
22 |
| state, other than a state which requires mandatory |
23 |
| unitary reporting, to a tax on or measured by net |
24 |
| income with respect to such item; or |
25 |
| (ii) any item of intangible expense or cost |
26 |
| paid, accrued, or incurred, directly or |
27 |
| indirectly, if the taxpayer can establish, based |
28 |
| on a preponderance of the evidence, both of the |
29 |
| following: |
30 |
| (a) the foreign person during the same |
31 |
| taxable year paid, accrued, or incurred, the |
32 |
| intangible expense or cost to a person that is |
33 |
| not a related member, and |
34 |
| (b) the transaction giving rise to the |
35 |
| intangible expense or cost between the |
36 |
| taxpayer and the foreign person did not have as |
|
|
|
HB2706 Enrolled |
- 65 - |
LRB094 03732 BDD 33741 b |
|
|
1 |
| a principal purpose the avoidance of Illinois |
2 |
| income tax, and is paid pursuant to a contract |
3 |
| or agreement that reflects arm's-length terms; |
4 |
| or |
5 |
| (iii) any item of intangible expense or cost |
6 |
| paid, accrued, or incurred, directly or |
7 |
| indirectly, from a transaction with a foreign |
8 |
| person if the taxpayer establishes by clear and |
9 |
| convincing evidence, that the adjustments are |
10 |
| unreasonable; or if the taxpayer and the Director |
11 |
| agree in writing to the application or use of an |
12 |
| alternative method of apportionment under Section |
13 |
| 304(f);
|
14 |
| Nothing in this subsection shall preclude the |
15 |
| Director from making any other adjustment |
16 |
| otherwise allowed under Section 404 of this Act for |
17 |
| any tax year beginning after the effective date of |
18 |
| this amendment provided such adjustment is made |
19 |
| pursuant to regulation adopted by the Department |
20 |
| and such regulations provide methods and standards |
21 |
| by which the Department will utilize its authority |
22 |
| under Section 404 of this Act;
|
23 |
| and by deducting from the total so obtained the following |
24 |
| amounts:
|
25 |
| (E) The valuation limitation amount;
|
26 |
| (F) An amount equal to the amount of any tax |
27 |
| imposed by this Act which
was refunded to the taxpayer |
28 |
| and included in such total for the taxable year;
|
29 |
| (G) An amount equal to all amounts included in |
30 |
| taxable income as
modified by subparagraphs (A), (B), |
31 |
| (C) and (D) which are exempt from
taxation by this |
32 |
| State either by reason of its statutes or Constitution |
33 |
| or
by reason of
the Constitution, treaties or statutes |
34 |
| of the United States;
provided that, in the case of any |
35 |
| statute of this State that exempts income
derived from |
36 |
| bonds or other obligations from the tax imposed under |
|
|
|
HB2706 Enrolled |
- 66 - |
LRB094 03732 BDD 33741 b |
|
|
1 |
| this Act,
the amount exempted shall be the interest net |
2 |
| of bond premium amortization;
|
3 |
| (H) Any income of the partnership which |
4 |
| constitutes personal service
income as defined in |
5 |
| Section 1348 (b) (1) of the Internal Revenue Code (as
|
6 |
| in effect December 31, 1981) or a reasonable allowance |
7 |
| for compensation
paid or accrued for services rendered |
8 |
| by partners to the partnership,
whichever is greater;
|
9 |
| (I) An amount equal to all amounts of income |
10 |
| distributable to an entity
subject to the Personal |
11 |
| Property Tax Replacement Income Tax imposed by
|
12 |
| subsections (c) and (d) of Section 201 of this Act |
13 |
| including amounts
distributable to organizations |
14 |
| exempt from federal income tax by reason of
Section |
15 |
| 501(a) of the Internal Revenue Code;
|
16 |
| (J) With the exception of any amounts subtracted |
17 |
| under subparagraph
(G),
an amount equal to the sum of |
18 |
| all amounts disallowed as deductions
by (i) Sections |
19 |
| 171(a) (2), and 265(2) of the Internal Revenue Code of |
20 |
| 1954,
as now or hereafter amended, and all amounts of |
21 |
| expenses allocable to
interest and disallowed as |
22 |
| deductions by Section 265(1) of the Internal
Revenue |
23 |
| Code, as now or hereafter amended;
and (ii) for taxable |
24 |
| years
ending on or after August 13, 1999, Sections
|
25 |
| 171(a)(2), 265,
280C, and 832(b)(5)(B)(i) of the |
26 |
| Internal Revenue Code; the provisions of this
|
27 |
| subparagraph are exempt from the provisions of Section |
28 |
| 250;
|
29 |
| (K) An amount equal to those dividends included in |
30 |
| such total which were
paid by a corporation which |
31 |
| conducts business operations in an Enterprise
Zone or |
32 |
| zones created under the Illinois Enterprise Zone Act, |
33 |
| enacted by
the 82nd General Assembly, and
conducts |
34 |
| substantially all of its operations
in an Enterprise |
35 |
| Zone or Zones;
|
36 |
| (L) An amount equal to any contribution made to a |
|
|
|
HB2706 Enrolled |
- 67 - |
LRB094 03732 BDD 33741 b |
|
|
1 |
| job training project
established pursuant to the Real |
2 |
| Property Tax Increment Allocation
Redevelopment Act;
|
3 |
| (M) An amount equal to those dividends included in |
4 |
| such total
that were paid by a corporation that |
5 |
| conducts business operations in a
federally designated |
6 |
| Foreign Trade Zone or Sub-Zone and that is designated a
|
7 |
| High Impact Business located in Illinois; provided |
8 |
| that dividends eligible
for the deduction provided in |
9 |
| subparagraph (K) of paragraph (2) of this
subsection |
10 |
| shall not be eligible for the deduction provided under |
11 |
| this
subparagraph (M);
|
12 |
| (N) An amount equal to the amount of the deduction |
13 |
| used to compute the
federal income tax credit for |
14 |
| restoration of substantial amounts held under
claim of |
15 |
| right for the taxable year pursuant to Section 1341 of |
16 |
| the
Internal Revenue Code of 1986;
|
17 |
| (O) For taxable years 2001 and thereafter, for the |
18 |
| taxable year in
which the bonus depreciation deduction |
19 |
| (30% of the adjusted basis of the
qualified property)
|
20 |
| is taken on the taxpayer's federal income tax return |
21 |
| under
subsection (k) of Section 168 of the Internal |
22 |
| Revenue Code and for each
applicable taxable year |
23 |
| thereafter, an amount equal to "x", where:
|
24 |
| (1) "y" equals the amount of the depreciation |
25 |
| deduction taken for the
taxable year
on the |
26 |
| taxpayer's federal income tax return on property |
27 |
| for which the bonus
depreciation deduction (30% of |
28 |
| the adjusted basis of the qualified property)
was |
29 |
| taken in any year under subsection (k) of Section |
30 |
| 168 of the Internal
Revenue Code, but not including |
31 |
| the bonus depreciation deduction; and
|
32 |
| (2) for taxable years ending on or before |
33 |
| December 31, 2005, "x" equals "y" multiplied by 30 |
34 |
| and then divided by 70 (or "y"
multiplied by |
35 |
| 0.429) ; and |
36 |
| (3) for taxable years ending after December |
|
|
|
HB2706 Enrolled |
- 68 - |
LRB094 03732 BDD 33741 b |
|
|
1 |
| 31, 2005: |
2 |
| (i) for property on which a bonus |
3 |
| depreciation deduction of 30% of the adjusted |
4 |
| basis was taken, "x" equals "y" multiplied by |
5 |
| 30 and then divided by 70 (or "y"
multiplied by |
6 |
| 0.429); and |
7 |
| (ii) for property on which a bonus |
8 |
| depreciation deduction of 50% of the adjusted |
9 |
| basis was taken, "x" equals "y" multiplied by |
10 |
| 1.0 .
|
11 |
| The aggregate amount deducted under this |
12 |
| subparagraph in all taxable
years for any one piece of |
13 |
| property may not exceed the amount of the bonus
|
14 |
| depreciation deduction (30% of the adjusted basis of |
15 |
| the qualified property)
taken on that property on the |
16 |
| taxpayer's federal income tax return under
subsection |
17 |
| (k) of Section 168 of the Internal Revenue Code . This |
18 |
| subparagraph (O) is exempt from the provisions of |
19 |
| Section 250 ;
|
20 |
| (P) If the taxpayer sells, transfers, abandons, or |
21 |
| otherwise disposes of
reports a capital gain or loss on |
22 |
| the taxpayer's
federal income tax return for the |
23 |
| taxable year based on a sale or transfer of
property |
24 |
| for which the taxpayer was required in any taxable year |
25 |
| to make an
addition modification under subparagraph |
26 |
| (D-5), then an amount equal to that
addition |
27 |
| modification.
|
28 |
| If the taxpayer continues to own property through |
29 |
| the last day of the last tax year for which the |
30 |
| taxpayer may claim a depreciation deduction for |
31 |
| federal income tax purposes and for which the taxpayer |
32 |
| was required in any taxable year to make an addition |
33 |
| modification under subparagraph (D-5), then an amount |
34 |
| equal to that addition modification.
|
35 |
| The taxpayer is allowed to take the deduction under |
36 |
| this subparagraph
only once with respect to any one |
|
|
|
HB2706 Enrolled |
- 69 - |
LRB094 03732 BDD 33741 b |
|
|
1 |
| piece of property . |
2 |
| This subparagraph (P) is exempt from the |
3 |
| provisions of Section 250 ;
|
4 |
| (Q) The amount of (i) any interest income (net of |
5 |
| the deductions allocable thereto) taken into account |
6 |
| for the taxable year with respect to a transaction with |
7 |
| a taxpayer that is required to make an addition |
8 |
| modification with respect to such transaction under |
9 |
| Section 203(a)(2)(D-17), 203(b)(2)(E-12), |
10 |
| 203(c)(2)(G-12), or 203(d)(2)(D-7), but not to exceed |
11 |
| the amount of such addition modification and
(ii) any |
12 |
| income from intangible property (net of the deductions |
13 |
| allocable thereto) taken into account for the taxable |
14 |
| year with respect to a transaction with a taxpayer that |
15 |
| is required to make an addition modification with |
16 |
| respect to such transaction under Section |
17 |
| 203(a)(2)(D-18), 203(b)(2)(E-13), 203(c)(2)(G-13), or |
18 |
| 203(d)(2)(D-8), but not to exceed the amount of such |
19 |
| addition modification;
|
20 |
| (R) An amount equal to the interest income taken |
21 |
| into account for the taxable year (net of the |
22 |
| deductions allocable thereto) with respect to |
23 |
| transactions with a foreign person who would be a |
24 |
| member of the taxpayer's unitary business group but for |
25 |
| the fact that the foreign person's business activity |
26 |
| outside the United States is 80% or more of that |
27 |
| person's total business activity, but not to exceed the |
28 |
| addition modification required to be made for the same |
29 |
| taxable year under Section 203(d)(2)(D-7) for interest |
30 |
| paid, accrued, or incurred, directly or indirectly, to |
31 |
| the same foreign person; and
|
32 |
| (S) An amount equal to the income from intangible |
33 |
| property taken into account for the taxable year (net |
34 |
| of the deductions allocable thereto) with respect to |
35 |
| transactions with a foreign person who would be a |
36 |
| member of the taxpayer's unitary business group but for |
|
|
|
HB2706 Enrolled |
- 70 - |
LRB094 03732 BDD 33741 b |
|
|
1 |
| the fact that the foreign person's business activity |
2 |
| outside the United States is 80% or more of that |
3 |
| person's total business activity, but not to exceed the |
4 |
| addition modification required to be made for the same |
5 |
| taxable year under Section 203(d)(2)(D-8) for |
6 |
| intangible expenses and costs paid, accrued, or |
7 |
| incurred, directly or indirectly, to the same foreign |
8 |
| person.
|
9 |
| (e) Gross income; adjusted gross income; taxable income.
|
10 |
| (1) In general. Subject to the provisions of paragraph |
11 |
| (2) and
subsection (b) (3), for purposes of this Section |
12 |
| and Section 803(e), a
taxpayer's gross income, adjusted |
13 |
| gross income, or taxable income for
the taxable year shall |
14 |
| mean the amount of gross income, adjusted gross
income or |
15 |
| taxable income properly reportable for federal income tax
|
16 |
| purposes for the taxable year under the provisions of the |
17 |
| Internal
Revenue Code. Taxable income may be less than |
18 |
| zero. However, for taxable
years ending on or after |
19 |
| December 31, 1986, net operating loss
carryforwards from |
20 |
| taxable years ending prior to December 31, 1986, may not
|
21 |
| exceed the sum of federal taxable income for the taxable |
22 |
| year before net
operating loss deduction, plus the excess |
23 |
| of addition modifications over
subtraction modifications |
24 |
| for the taxable year. For taxable years ending
prior to |
25 |
| December 31, 1986, taxable income may never be an amount in |
26 |
| excess
of the net operating loss for the taxable year as |
27 |
| defined in subsections
(c) and (d) of Section 172 of the |
28 |
| Internal Revenue Code, provided that when
taxable income of |
29 |
| a corporation (other than a Subchapter S corporation),
|
30 |
| trust, or estate is less than zero and addition |
31 |
| modifications, other than
those provided by subparagraph |
32 |
| (E) of paragraph (2) of subsection (b) for
corporations or |
33 |
| subparagraph (E) of paragraph (2) of subsection (c) for
|
34 |
| trusts and estates, exceed subtraction modifications, an |
35 |
| addition
modification must be made under those |
|
|
|
HB2706 Enrolled |
- 71 - |
LRB094 03732 BDD 33741 b |
|
|
1 |
| subparagraphs for any other taxable
year to which the |
2 |
| taxable income less than zero (net operating loss) is
|
3 |
| applied under Section 172 of the Internal Revenue Code or |
4 |
| under
subparagraph (E) of paragraph (2) of this subsection |
5 |
| (e) applied in
conjunction with Section 172 of the Internal |
6 |
| Revenue Code.
|
7 |
| (2) Special rule. For purposes of paragraph (1) of this |
8 |
| subsection,
the taxable income properly reportable for |
9 |
| federal income tax purposes
shall mean:
|
10 |
| (A) Certain life insurance companies. In the case |
11 |
| of a life
insurance company subject to the tax imposed |
12 |
| by Section 801 of the
Internal Revenue Code, life |
13 |
| insurance company taxable income, plus the
amount of |
14 |
| distribution from pre-1984 policyholder surplus |
15 |
| accounts as
calculated under Section 815a of the |
16 |
| Internal Revenue Code;
|
17 |
| (B) Certain other insurance companies. In the case |
18 |
| of mutual
insurance companies subject to the tax |
19 |
| imposed by Section 831 of the
Internal Revenue Code, |
20 |
| insurance company taxable income;
|
21 |
| (C) Regulated investment companies. In the case of |
22 |
| a regulated
investment company subject to the tax |
23 |
| imposed by Section 852 of the
Internal Revenue Code, |
24 |
| investment company taxable income;
|
25 |
| (D) Real estate investment trusts. In the case of a |
26 |
| real estate
investment trust subject to the tax imposed |
27 |
| by Section 857 of the
Internal Revenue Code, real |
28 |
| estate investment trust taxable income;
|
29 |
| (E) Consolidated corporations. In the case of a |
30 |
| corporation which
is a member of an affiliated group of |
31 |
| corporations filing a consolidated
income tax return |
32 |
| for the taxable year for federal income tax purposes,
|
33 |
| taxable income determined as if such corporation had |
34 |
| filed a separate
return for federal income tax purposes |
35 |
| for the taxable year and each
preceding taxable year |
36 |
| for which it was a member of an affiliated group.
For |
|
|
|
HB2706 Enrolled |
- 72 - |
LRB094 03732 BDD 33741 b |
|
|
1 |
| purposes of this subparagraph, the taxpayer's separate |
2 |
| taxable
income shall be determined as if the election |
3 |
| provided by Section
243(b) (2) of the Internal Revenue |
4 |
| Code had been in effect for all such years;
|
5 |
| (F) Cooperatives. In the case of a cooperative |
6 |
| corporation or
association, the taxable income of such |
7 |
| organization determined in
accordance with the |
8 |
| provisions of Section 1381 through 1388 of the
Internal |
9 |
| Revenue Code;
|
10 |
| (G) Subchapter S corporations. In the case of: (i) |
11 |
| a Subchapter S
corporation for which there is in effect |
12 |
| an election for the taxable year
under Section 1362 of |
13 |
| the Internal Revenue Code, the taxable income of such
|
14 |
| corporation determined in accordance with Section |
15 |
| 1363(b) of the Internal
Revenue Code, except that |
16 |
| taxable income shall take into
account those items |
17 |
| which are required by Section 1363(b)(1) of the
|
18 |
| Internal Revenue Code to be separately stated; and (ii) |
19 |
| a Subchapter
S corporation for which there is in effect |
20 |
| a federal election to opt out of
the provisions of the |
21 |
| Subchapter S Revision Act of 1982 and have applied
|
22 |
| instead the prior federal Subchapter S rules as in |
23 |
| effect on July 1, 1982,
the taxable income of such |
24 |
| corporation determined in accordance with the
federal |
25 |
| Subchapter S rules as in effect on July 1, 1982; and
|
26 |
| (H) Partnerships. In the case of a partnership, |
27 |
| taxable income
determined in accordance with Section |
28 |
| 703 of the Internal Revenue Code,
except that taxable |
29 |
| income shall take into account those items which are
|
30 |
| required by Section 703(a)(1) to be separately stated |
31 |
| but which would be
taken into account by an individual |
32 |
| in calculating his taxable income.
|
33 |
| (3) Recapture of business expenses on disposition of |
34 |
| asset or business. Notwithstanding any other law to the |
35 |
| contrary, if in prior years income from an asset or |
36 |
| business has been classified as business income and in a |
|
|
|
HB2706 Enrolled |
- 73 - |
LRB094 03732 BDD 33741 b |
|
|
1 |
| later year is demonstrated to be non-business income, then |
2 |
| all expenses, without limitation, deducted in such later |
3 |
| year and in the 2 immediately preceding taxable years |
4 |
| related to that asset or business that generated the |
5 |
| non-business income shall be added back and recaptured as |
6 |
| business income in the year of the disposition of the asset |
7 |
| or business. Such amount shall be apportioned to Illinois |
8 |
| using the greater of the apportionment fraction computed |
9 |
| for the business under Section 304 of this Act for the |
10 |
| taxable year or the average of the apportionment fractions |
11 |
| computed for the business under Section 304 of this Act for |
12 |
| the taxable year and for the 2 immediately preceding |
13 |
| taxable years.
|
14 |
| (f) Valuation limitation amount.
|
15 |
| (1) In general. The valuation limitation amount |
16 |
| referred to in
subsections (a) (2) (G), (c) (2) (I) and |
17 |
| (d)(2) (E) is an amount equal to:
|
18 |
| (A) The sum of the pre-August 1, 1969 appreciation |
19 |
| amounts (to the
extent consisting of gain reportable |
20 |
| under the provisions of Section
1245 or 1250 of the |
21 |
| Internal Revenue Code) for all property in respect
of |
22 |
| which such gain was reported for the taxable year; plus
|
23 |
| (B) The lesser of (i) the sum of the pre-August 1, |
24 |
| 1969 appreciation
amounts (to the extent consisting of |
25 |
| capital gain) for all property in
respect of which such |
26 |
| gain was reported for federal income tax purposes
for |
27 |
| the taxable year, or (ii) the net capital gain for the |
28 |
| taxable year,
reduced in either case by any amount of |
29 |
| such gain included in the amount
determined under |
30 |
| subsection (a) (2) (F) or (c) (2) (H).
|
31 |
| (2) Pre-August 1, 1969 appreciation amount.
|
32 |
| (A) If the fair market value of property referred |
33 |
| to in paragraph
(1) was readily ascertainable on August |
34 |
| 1, 1969, the pre-August 1, 1969
appreciation amount for |
35 |
| such property is the lesser of (i) the excess of
such |
36 |
| fair market value over the taxpayer's basis (for |
|
|
|
HB2706 Enrolled |
- 74 - |
LRB094 03732 BDD 33741 b |
|
|
1 |
| determining gain)
for such property on that date |
2 |
| (determined under the Internal Revenue
Code as in |
3 |
| effect on that date), or (ii) the total gain realized |
4 |
| and
reportable for federal income tax purposes in |
5 |
| respect of the sale,
exchange or other disposition of |
6 |
| such property.
|
7 |
| (B) If the fair market value of property referred |
8 |
| to in paragraph
(1) was not readily ascertainable on |
9 |
| August 1, 1969, the pre-August 1,
1969 appreciation |
10 |
| amount for such property is that amount which bears
the |
11 |
| same ratio to the total gain reported in respect of the |
12 |
| property for
federal income tax purposes for the |
13 |
| taxable year, as the number of full
calendar months in |
14 |
| that part of the taxpayer's holding period for the
|
15 |
| property ending July 31, 1969 bears to the number of |
16 |
| full calendar
months in the taxpayer's entire holding |
17 |
| period for the
property.
|
18 |
| (C) The Department shall prescribe such |
19 |
| regulations as may be
necessary to carry out the |
20 |
| purposes of this paragraph.
|
21 |
| (g) Double deductions. Unless specifically provided |
22 |
| otherwise, nothing
in this Section shall permit the same item |
23 |
| to be deducted more than once.
|
24 |
| (h) Legislative intention. Except as expressly provided by |
25 |
| this
Section there shall be no modifications or limitations on |
26 |
| the amounts
of income, gain, loss or deduction taken into |
27 |
| account in determining
gross income, adjusted gross income or |
28 |
| taxable income for federal income
tax purposes for the taxable |
29 |
| year, or in the amount of such items
entering into the |
30 |
| computation of base income and net income under this
Act for |
31 |
| such taxable year, whether in respect of property values as of
|
32 |
| August 1, 1969 or otherwise.
|
33 |
| (Source: P.A. 92-16, eff. 6-28-01; 92-244, eff. 8-3-01; 92-439, |
34 |
| eff. 8-17-01; 92-603, eff. 6-28-02; 92-626, eff. 7-11-02; |
|
|
|
HB2706 Enrolled |
- 75 - |
LRB094 03732 BDD 33741 b |
|
|
1 |
| 92-651, eff. 7-11-02; 92-846, eff. 8-23-02; 93-812, eff. |
2 |
| 7-26-04; 93-840, eff. 7-30-04; revised 10-12-04.)
|
3 |
| (35 ILCS 5/902) (from Ch. 120, par. 9-902)
|
4 |
| Sec. 902. Notice and Demand. |
5 |
| (a) In general. Except as provided in subsection (b) the |
6 |
| Director shall,
as soon as practicable after an amount payable |
7 |
| under this Act is deemed
assessed (as provided in Section 903), |
8 |
| give notice to each person liable
for any unpaid portion of |
9 |
| such assessment, stating the amount unpaid and
demanding |
10 |
| payment thereof. In the case of tax deemed assessed with the
|
11 |
| filing of a return, the Director shall give notice no later |
12 |
| than 3 years
after the date the return was filed. Upon receipt |
13 |
| of any notice and demand
there shall be paid
at the place and |
14 |
| time stated in such notice the amount stated in such
notice. |
15 |
| Such notice shall be left at the dwelling or usual place of |
16 |
| business
of such person or shall be sent by mail to the |
17 |
| person's last known address.
|
18 |
| (b) Judicial review. In the case of a deficiency deemed |
19 |
| assessed under
Section 903 (a) (2) after the filing of a |
20 |
| protest, notice and demand shall
not be made with respect to |
21 |
| such assessment until all proceedings in court
for the review |
22 |
| of such assessment have terminated or the time for the
taking |
23 |
| thereof has expired without such proceedings being instituted.
|
24 |
| (c) Action for recovery of taxes. At any time that the |
25 |
| Department might
commence proceedings for a levy under Section |
26 |
| 1109, regardless of whether a
notice of lien was filed under |
27 |
| the provisions of Section 1103, it may bring an
action in any |
28 |
| court of competent jurisdiction within or without this State
in |
29 |
| the name of the people of this State to recover the amount of |
30 |
| any taxes,
penalties and interest due and unpaid under this |
31 |
| Act. In such action, the
certificate of the Department showing |
32 |
| the amount of the delinquency shall
be prima facie evidence of |
33 |
| the correctness of such amount, its assessment
and of the |
34 |
| compliance by the Department with all the provisions of this |
35 |
| Act.
|
|
|
|
HB2706 Enrolled |
- 76 - |
LRB094 03732 BDD 33741 b |
|
|
1 |
| (d) Sales or transfers outside the usual course of
|
2 |
| business-Report-Payment of Tax - Rights and duties of purchaser |
3 |
| or
transferee - penalty. If any taxpayer, outside the usual |
4 |
| course of his
business, sells or transfers the major part of |
5 |
| any one or more of (A) the
stock of goods which he is engaged in |
6 |
| the business of selling, or (B) the
furniture or fixtures, or |
7 |
| (C) the machinery and equipment, or (D) the real
property, of |
8 |
| any business that is subject to the provisions of this Act,
the |
9 |
| purchaser or transferee of such assets shall, no later than 10 |
10 |
| business days
after the sale or transfer, file a notice of sale |
11 |
| or transfer of business
assets with the
Chicago office of the |
12 |
| Department disclosing the name and address of the
seller or |
13 |
| transferor, the
name and address of the purchaser or |
14 |
| transferee, the date of the sale or
transfer, a copy of the |
15 |
| sales contract and financing agreements which shall
include a |
16 |
| description of the property sold or transferred, the amount of
|
17 |
| the purchase price or a statement of other consideration for |
18 |
| the sale or
transfer, and the terms for payment of the purchase |
19 |
| price, and such other
information as the Department may |
20 |
| reasonably require. If the purchaser or
transferee fails to |
21 |
| file the above described notice of sale with the
Department |
22 |
| within the prescribed time, the purchaser or transferee shall |
23 |
| be
personally liable to the Department for the amount
owed |
24 |
| hereunder by the seller or transferor
but unpaid, up to the
|
25 |
| amount of the reasonable value of the property acquired by the |
26 |
| purchaser or
transferee. The purchaser or transferee shall pay |
27 |
| the Department the
amount of tax, penalties, and interest owed |
28 |
| by the seller or transferor
under this Act, to the extent they |
29 |
| have
not been paid by the seller or transferor. The seller or |
30 |
| transferor, or
the purchaser or transferee, at least 10 |
31 |
| business days before the date of the sale
or transfer, may |
32 |
| notify the Department of the intended sale or transfer
and |
33 |
| request the Department to make a determination as to whether |
34 |
| the seller
or transferor owes any
tax, penalty or
interest due |
35 |
| under this Act. The Department shall take such steps as may
be |
36 |
| appropriate to comply with such request.
|
|
|
|
HB2706 Enrolled |
- 77 - |
LRB094 03732 BDD 33741 b |
|
|
1 |
| Any order issued by the Department pursuant to this Section |
2 |
| to withhold
from the purchase price shall be issued within 10 |
3 |
| business days after the Department
receives notification of a |
4 |
| sale as provided in this Section.
The purchaser or transferee |
5 |
| shall withhold such portion of
the purchase price
as may be |
6 |
| directed by the Department, but not to exceed a
minimum amount |
7 |
| varying by type of business, as determined by the Department
|
8 |
| pursuant to regulations, plus twice the outstanding unpaid |
9 |
| liabilities and
twice the average liability of preceding |
10 |
| filings times the number of
unfiled returns which were not |
11 |
| filed when due,
to cover the amount of all tax, penalty, and |
12 |
| interest due and
unpaid by the seller or transferor under this |
13 |
| Act or, if the payment of
money or property is not involved, |
14 |
| shall withhold the performance of the
condition that |
15 |
| constitutes the consideration for the sale or transfer.
Within |
16 |
| 60 business days after issuance of
the initial order to |
17 |
| withhold, the Department shall provide written notice
to the |
18 |
| purchaser or transferee of the actual amount of all taxes, |
19 |
| penalties
and interest then due and whether or not additional |
20 |
| amounts may become due
as a result of unpaid taxes required to |
21 |
| be withheld by an employer, returns
which were not filed when |
22 |
| due, pending assessments and audits not
completed. The |
23 |
| purchaser or transferee shall continue to withhold the
amount |
24 |
| directed to be withheld by the initial order or such lesser |
25 |
| amount
as is specified by the final withholding order or to |
26 |
| withhold the
performance of the condition which constitutes the |
27 |
| consideration for the
sale or transfer
until
the purchaser or |
28 |
| transferee receives from the Department a certificate showing
|
29 |
| that no unpaid tax, penalty or interest is due from the seller
|
30 |
| or transferor under this Act.
|
31 |
| The purchaser or transferee is relieved of any duty to |
32 |
| continue to
withhold from the purchase price and of any |
33 |
| liability for tax, penalty,
or interest due hereunder from the |
34 |
| seller or transferor if the Department
fails to notify the |
35 |
| purchaser or transferee in the manner provided
herein of the |
36 |
| amount to be withheld
within 10 business days after the sale or |
|
|
|
HB2706 Enrolled |
- 78 - |
LRB094 03732 BDD 33741 b |
|
|
1 |
| transfer has been reported to the
Department or within 60 |
2 |
| business days after issuance of the initial order to
withhold, |
3 |
| as the case may be.
The Department shall have the right to |
4 |
| determine
amounts claimed on an estimated basis to allow for |
5 |
| periods for which
returns were not filed when due, pending |
6 |
| assessments and audits not
completed, however the purchaser or |
7 |
| transferee shall be personally liable
only for the actual |
8 |
| amount due when determined.
|
9 |
| If the seller or transferor has failed to pay the tax, |
10 |
| penalty, and
interest due from him hereunder and the Department |
11 |
| makes timely
claim therefor against the purchaser or transferee |
12 |
| as hereinabove provided,
then the purchaser
or transferee shall |
13 |
| pay to the Department the amount so withheld from the
purchase |
14 |
| price. If the purchaser or transferee fails to comply with the
|
15 |
| requirements of this Section, the purchaser or transferee shall |
16 |
| be
personally liable to the Department for the amount owed |
17 |
| hereunder by
the seller or transferor up to the amount of the |
18 |
| reasonable
value of the property acquired by the purchaser or |
19 |
| transferee.
|
20 |
| Any person who shall acquire any property or rights thereto |
21 |
| which, at the
time of such acquisition, is subject to a valid |
22 |
| lien in favor of the
Department, shall be personally liable to |
23 |
| the Department for a sum equal to
the amount of taxes, |
24 |
| penalties and interests, secured by such lien, but not
to |
25 |
| exceed the reasonable value of such property acquired by him.
|
26 |
| (Source: P.A. 86-923; 86-953.)
|
27 |
| Section 15. The Retailers' Occupation Tax Act is amended by |
28 |
| changing Section 5j as follows:
|
29 |
| (35 ILCS 120/5j) (from Ch. 120, par. 444j)
|
30 |
| Sec. 5j. If any taxpayer, outside the usual course of his |
31 |
| business, sells or
transfers the major part of any one or more |
32 |
| of (A) the stock of goods which
he is engaged in the business |
33 |
| of selling, or (B) the furniture or fixtures,
(C) the machinery |
34 |
| and equipment, or (D) the real property, of
any business that |
|
|
|
HB2706 Enrolled |
- 79 - |
LRB094 03732 BDD 33741 b |
|
|
1 |
| is subject to the
provisions of this Act, the purchaser or |
2 |
| transferee of such asset shall,
no later than 10 business days |
3 |
| after the sale or transfer, file a
notice of sale or transfer |
4 |
| of business assets with the Chicago office
of the Department |
5 |
| disclosing the
name and address of the seller
or transferor, |
6 |
| the name and address of the purchaser or transferee, the
date |
7 |
| of the sale or transfer, a copy of the sales contract and |
8 |
| financing
agreements which shall include a description of the |
9 |
| property sold, the
amount of the purchase price or a statement |
10 |
| of other consideration for
the sale or transfer, the terms for |
11 |
| payment of the purchase price, and
such other information as |
12 |
| the Department
may reasonably require. If the purchaser or |
13 |
| transferee fails to file the
above described notice of sale |
14 |
| with the Department within the prescribed
time, the purchaser |
15 |
| or transferee shall be personally liable for the amount
owed |
16 |
| hereunder by the seller or transferor to the Department up to |
17 |
| the
amount of the reasonable value of the property acquired by |
18 |
| the purchaser or
transferee. The seller or transferor shall pay |
19 |
| the Department
the amount of tax, penalty and interest (if any) |
20 |
| due from him under this
Act up to the date of the payment of |
21 |
| tax. The seller or
transferor, or the purchaser
or transferee, |
22 |
| at least 10 business days before the date of the sale or |
23 |
| transfer,
may notify the Department of the intended sale or |
24 |
| transfer and request the
Department to audit the books and |
25 |
| records of the seller or transferor, or
to do whatever else may |
26 |
| be necessary to determine how much the seller or
transferor |
27 |
| owes to the Department hereunder up to the date of the sale or
|
28 |
| transfer. The Department shall take such steps as may be |
29 |
| appropriate to
comply with such request.
|
30 |
| Any order issued by the Department pursuant to this Section |
31 |
| to withhold
from the purchase price shall be issued within 10 |
32 |
| business days after the Department
receives notification of a |
33 |
| sale as provided in this Section.
The purchaser or transferee |
34 |
| shall withhold such portion of
the purchase price
as may be |
35 |
| directed by the Department, but not to exceed a
minimum amount |
36 |
| varying by type of business, as determined by the Department
|
|
|
|
HB2706 Enrolled |
- 80 - |
LRB094 03732 BDD 33741 b |
|
|
1 |
| pursuant to regulations, plus twice the outstanding unpaid |
2 |
| liabilities and
twice the average liability of preceding |
3 |
| filings times the number of
unfiled returns,
to cover the |
4 |
| amount of all tax, penalty and interest due and unpaid by the
|
5 |
| seller or transferor under this Act or, if the payment of money |
6 |
| or property
is not involved, shall withhold the performance of |
7 |
| the condition that
constitutes the consideration for the sale |
8 |
| or transfer. Within 60
business days after issuance of the |
9 |
| initial order to
withhold, the Department shall provide written |
10 |
| notice to the purchaser or
transferee of the actual amount of |
11 |
| all taxes, penalties and interest then
due and whether or not |
12 |
| additional amounts may become due as a result of
unfiled |
13 |
| returns, pending assessments and audits not completed. The
|
14 |
| purchaser or transferee shall continue to withhold the amount |
15 |
| directed to
be withheld by the initial order or such lesser |
16 |
| amount as is specified by
the final withholding order or to |
17 |
| withhold the performance of the condition
which constitutes the |
18 |
| consideration for the sale or transfer
until the
purchaser or |
19 |
| transferee receives from the Department a certificate showing
|
20 |
| that such tax,
penalty and interest have been paid or a |
21 |
| certificate from the Department
showing that no tax, penalty or |
22 |
| interest is due from the seller or
transferor under this Act.
|
23 |
| The purchaser or transferee is relieved of any duty to |
24 |
| continue to withhold from the
purchase price and of any |
25 |
| liability for tax, penalty or interest due
hereunder from the |
26 |
| seller or transferor if the Department fails to notify
the |
27 |
| purchaser or transferee in the manner provided herein of the |
28 |
| amount
to be withheld within 10 business days after the sale
or |
29 |
| transfer has been reported to the Department or within 60 |
30 |
| business days after
issuance of the initial order to withhold, |
31 |
| as the case may be.
The Department shall have the right to |
32 |
| determine amounts claimed on an
estimated basis to allow for |
33 |
| non-filed periods, pending assessments and
audits not |
34 |
| completed, however the purchaser or transferee shall be
|
35 |
| personally liable only for the actual amount due when |
36 |
| determined.
|
|
|
|
HB2706 Enrolled |
- 81 - |
LRB094 03732 BDD 33741 b |
|
|
1 |
| If the seller or transferor fails to pay the tax, penalty |
2 |
| and interest
(if any) due from him hereunder and the Department |
3 |
| makes timely claim
therefor against the purchaser or transferee |
4 |
| as hereinabove provided, then
the purchaser or transferee shall |
5 |
| pay the amount so withheld from the
purchase price to the |
6 |
| Department. If the purchaser or transferee fails to
comply with |
7 |
| the requirements of this Section, the purchaser or transferee
|
8 |
| shall be personally liable to the Department for the amount |
9 |
| owed hereunder
by the seller or transferor to the Department up |
10 |
| to the amount of the
reasonable value of the property acquired |
11 |
| by the purchaser or transferee.
|
12 |
| Any person who shall acquire any property or rights thereto |
13 |
| which, at
the time of such acquisition, is subject to a valid |
14 |
| lien in favor of the
Department shall be personally liable to |
15 |
| the Department for a sum equal to
the amount of taxes secured |
16 |
| by such lien but not to exceed the reasonable
value of such |
17 |
| property acquired by him.
|
18 |
| (Source: P.A. 86-923; 86-953.)
|
19 |
| Section 20. The Cigarette Tax Act is amended by changing |
20 |
| Section 21 as follows:
|
21 |
| (35 ILCS 130/21) (from Ch. 120, par. 453.21)
|
22 |
| Sec. 21. (a) When any original packages of cigarettes or
|
23 |
| any cigarette vending device shall have been declared forfeited |
24 |
| to the State by
the Department, as provided in Section 18a of |
25 |
| this Act, and when all proceedings
for the judicial review of |
26 |
| the Department's decision have terminated, the
Department |
27 |
| shall, to the extent that its decision is sustained on review, |
28 |
| destroy, maintain and use in an undercover capacity, or sell
|
29 |
| such property for the best price obtainable and shall forthwith |
30 |
| pay over the
proceeds of such sale to the State Treasurer.
If |
31 |
| the value of such property to be sold at any one time is
$500 or |
32 |
| more, however,
such property shall be sold only to the highest |
33 |
| and best bidder on
such terms and conditions and on open |
34 |
| competitive bidding after public
advertisement, in such manner |
|
|
|
HB2706 Enrolled |
- 82 - |
LRB094 03732 BDD 33741 b |
|
|
1 |
| and for such terms as the Department, by
rule, may prescribe.
|
2 |
| (b) If no complaint for review, as provided in Section 8 of
|
3 |
| this Act, has been filed within the time required by the |
4 |
| Administrative
Review Law, and if no stay order has been |
5 |
| entered thereunder, the
Department shall proceed to sell the |
6 |
| property for the
best price obtainable and shall forthwith pay |
7 |
| over the proceeds of such
sale to the State Treasurer. If the |
8 |
| value
of such property to be sold at any one time is $500
or |
9 |
| more, however, such property
shall be sold only to the highest |
10 |
| and best bidder on such terms and
conditions and on open |
11 |
| competitive bidding after public
advertisement, in such manner |
12 |
| and for such terms as the Department, by
rule, may prescribe.
|
13 |
| (c) Upon making a sale of unstamped original packages of
|
14 |
| cigarettes as provided in this Section, the Department shall |
15 |
| affix
a distinctive stamp to each of the original packages so |
16 |
| sold indicating
that the same are sold under this Section.
|
17 |
| (d) Notwithstanding the foregoing, any cigarettes seized |
18 |
| under
this Act or under the Cigarette Use Tax Act may, at the |
19 |
| discretion of the
Director of Revenue, be distributed to any |
20 |
| eleemosynary institution within
the State of Illinois.
|
21 |
| (Source: P.A. 82-783.)
|
22 |
| Section 25. The Cigarette Use Tax Act is amended by |
23 |
| changing Sections 26 and 27 as follows:
|
24 |
| (35 ILCS 135/26) (from Ch. 120, par. 453.56)
|
25 |
| Sec. 26. Whenever any peace officer of the State or any |
26 |
| duly authorized
officer or employee of the Department shall |
27 |
| have reason to believe that any
violation of this Act has |
28 |
| occurred and that the person so violating the Act
has in his, |
29 |
| her or its possession any original package of cigarettes, not
|
30 |
| tax stamped or tax imprinted underneath the sealed transparent |
31 |
| wrapper of
such original packages, as required by this Act, or |
32 |
| any vending device
containing such original packages to which |
33 |
| stamps have not been affixed, or
on which an authorized |
34 |
| substitute for stamps has not been imprinted
underneath the |
|
|
|
HB2706 Enrolled |
- 83 - |
LRB094 03732 BDD 33741 b |
|
|
1 |
| sealed transparent wrapper of such original packages, as
|
2 |
| required by this Act, he may file or cause to be filed his |
3 |
| complaint in
writing, verified by affidavit, with any circuit |
4 |
| court within whose
jurisdiction the premises to be searched are |
5 |
| situated, stating the facts
upon which such belief is founded, |
6 |
| the premises to be searched, and the
property to be seized, and |
7 |
| procure a search warrant and execute the same.
Upon the |
8 |
| execution of such search warrant, the peace officer, or officer |
9 |
| or
employee of the Department, executing such search warrant |
10 |
| shall make due
return thereof to the court issuing the same, |
11 |
| together with an inventory of
the property taken thereunder. |
12 |
| The court shall thereupon issue process
against the owner of |
13 |
| such property if he is known; otherwise, such process
shall be |
14 |
| issued against the person in whose possession the property so
|
15 |
| taken is found, if such person is known. In case of inability |
16 |
| to serve such
process upon the owner or the person in |
17 |
| possession of the property at the
time of its seizure, as |
18 |
| hereinbefore provided, notice of the proceedings
before the |
19 |
| court shall be given as required by the statutes of the State
|
20 |
| governing cases of Attachment. Upon the return of the process |
21 |
| duly served
or upon the posting or publishing of notice made, |
22 |
| as hereinabove provided,
the court or jury, if a jury shall be |
23 |
| demanded, shall proceed to determine
whether or not such |
24 |
| property so seized was held or possessed in violation
of this |
25 |
| Act, or whether, if a vending device has been so seized, it
|
26 |
| contained at the time of its seizure original packages not tax |
27 |
| stamped or
tax imprinted underneath the sealed transparent |
28 |
| wrapper of such original
packages as required by this Act. In |
29 |
| case of a finding that the original
packages seized were not |
30 |
| tax stamped or tax imprinted underneath the sealed
transparent |
31 |
| wrapper of such original packages in accordance with the
|
32 |
| provisions of this Act, or that any vending device so seized |
33 |
| contained at
the time of its seizure original packages not tax |
34 |
| stamped or tax imprinted
underneath the sealed transparent |
35 |
| wrapper of such original packages in
accordance with the |
36 |
| provisions of this Act, judgment shall be entered
confiscating |
|
|
|
HB2706 Enrolled |
- 84 - |
LRB094 03732 BDD 33741 b |
|
|
1 |
| and forfeiting the property to the State and ordering its
|
2 |
| delivery to the Department, and in addition thereto, the court |
3 |
| shall have
power to tax and assess the costs of the |
4 |
| proceedings.
|
5 |
| When any original packages or any cigarette vending device |
6 |
| shall have
been declared forfeited to the State by any court, |
7 |
| as hereinbefore
provided, and when such confiscated and |
8 |
| forfeited property shall have been
delivered to the Department, |
9 |
| as provided in this Act, the said Department
shall destroy, |
10 |
| maintain and use in an undercover capacity, or sell such |
11 |
| property for the best price obtainable and shall forthwith
pay |
12 |
| over the proceeds of such sale to the State Treasurer; |
13 |
| provided,
however, that if the value of such property to be |
14 |
| sold at any one time
shall be $500 or more, such property shall |
15 |
| be sold only to the highest and
best bidder on such terms and |
16 |
| conditions and on open competitive bidding
after public |
17 |
| advertisement, in such manner and for such terms as the
|
18 |
| Department, by rule, may prescribe.
|
19 |
| Upon making such a sale of original packages of cigarettes |
20 |
| which were
not tax stamped or tax imprinted underneath the |
21 |
| sealed transparent wrapper
of such original packages as |
22 |
| required by this Act, the Department shall
affix a distinctive |
23 |
| stamp to each of the original packages so sold
indicating that |
24 |
| the same are sold pursuant to the provisions of this
Section.
|
25 |
| (Source: Laws 1965, p. 3710.)
|
26 |
| (35 ILCS 135/27) (from Ch. 120, par. 453.57)
|
27 |
| Sec. 27. When any original packages of cigarettes or any |
28 |
| cigarette vending
device shall have been declared forfeited to |
29 |
| the State by the Department,
as provided in Section 25 of this |
30 |
| Act, and when all proceedings for the
judicial review of the |
31 |
| Department's decision have terminated, the
Department shall, |
32 |
| to the extent that its decision is sustained on review,
|
33 |
| destroy, maintain and use in an undercover capacity, or sell |
34 |
| such property for the best price obtainable and shall forthwith |
35 |
| pay
over the proceeds of such sale to the State Treasurer; |
|
|
|
HB2706 Enrolled |
- 85 - |
LRB094 03732 BDD 33741 b |
|
|
1 |
| provided, however,
that if the value of such property to be |
2 |
| sold at any one time shall be Five
Hundred Dollars ($500) or |
3 |
| more, such property shall be sold only to the
highest and best |
4 |
| bidder on such terms and conditions and on open
competitive |
5 |
| bidding after public advertisement, in such manner and for such
|
6 |
| terms as the Department, by rule, may prescribe.
|
7 |
| If no complaint for review, as provided in Section 21 of |
8 |
| this Act, has
been filed within the time required by the |
9 |
| "Administrative Review Law,"
and if no stay order has been |
10 |
| entered thereunder, the Department shall
proceed to sell said |
11 |
| property for the best price obtainable and shall
forthwith pay |
12 |
| over the proceeds of such sale to the State Treasurer;
|
13 |
| provided, however, that if the value of such property to be |
14 |
| sold at any one
time shall be $500 or more, such property shall |
15 |
| be
sold only to the highest and best bidder on such terms and |
16 |
| conditions and
on open competitive bidding after public |
17 |
| advertisement, in such manner and
for such terms as the |
18 |
| Department, by rule, may prescribe.
|
19 |
| Upon making a sale of unstamped original packages of |
20 |
| cigarettes as
provided in this Section, the Department shall |
21 |
| affix a distinctive stamp to
each of the original packages so |
22 |
| sold indicating that the same are sold
pursuant to the |
23 |
| provisions of this Section.
|
24 |
| (Source: P.A. 83-1539.)
|
25 |
| Section 30. The Tobacco Products Tax Act of 1995 is amended |
26 |
| by changing Section 10-58 as follows:
|
27 |
| (35 ILCS 143/10-58)
|
28 |
| Sec. 10-58. Sale of forfeited tobacco products or vending |
29 |
| devices.
|
30 |
| (a) When any tobacco products or any vending devices are
|
31 |
| declared forfeited to the State by the Department, as provided |
32 |
| in Section
10-55, and when all proceedings for the judicial |
33 |
| review of the
Department's decision have terminated, the |
34 |
| Department shall, to the extent that
its decision is sustained |
|
|
|
HB2706 Enrolled |
- 86 - |
LRB094 03732 BDD 33741 b |
|
|
1 |
| on review, sell the property for the best price
obtainable and |
2 |
| shall forthwith pay over the proceeds of the sale to the State
|
3 |
| Treasurer. If the value of the property to be sold at any one |
4 |
| time is $500 or
more, however, the property shall be sold only |
5 |
| to the highest and best bidder
on terms and conditions, and on |
6 |
| open competitive bidding after public
advertisement, in a |
7 |
| manner and for terms as the Department, by rule,
may prescribe.
|
8 |
| (b) If no complaint for review, as provided in Section 12 |
9 |
| of the Retailers'
Occupation Tax Act, has been filed within the |
10 |
| time required by the
Administrative Review Law, and if no stay |
11 |
| order has been entered under that
Law, the Department shall |
12 |
| proceed to destroy, maintain and use in an undercover capacity, |
13 |
| or sell the property for the best price
obtainable and shall |
14 |
| forthwith pay over the proceeds of the sale to the State
|
15 |
| Treasurer. If the value of the property to be sold at any one |
16 |
| time is $500 or
more, however, the property shall be sold only |
17 |
| to the highest and best bidder
on terms and conditions, and on |
18 |
| open competitive bidding after public
advertisement, in a |
19 |
| manner and for terms as the Department, by rule, may
prescribe.
|
20 |
| (c) Upon making a sale of tobacco products as provided in |
21 |
| this Section, the
Department shall affix a distinctive stamp to |
22 |
| each of the tobacco products so
sold indicating that they are |
23 |
| sold under this Section.
|
24 |
| (d) Notwithstanding the foregoing, any tobacco products |
25 |
| seized under this
Act may, at the discretion of the Director of |
26 |
| Revenue, be distributed to any
eleemosynary institution within |
27 |
| the State of Illinois.
|
28 |
| (Source: P.A. 92-743, eff. 7-25-02.)
|
29 |
| Section 35. The Local Mass Transit District Act is amended |
30 |
| by changing
Section 5.01 as follows:
|
31 |
| (70 ILCS 3610/5.01)
(from Ch. 111 2/3, par. 355.01)
|
32 |
| Sec. 5.01. Metro East Mass Transit District; use and |
33 |
| occupation taxes.
|
34 |
| (a) The Board of Trustees of any Metro East Mass Transit
|
|
|
|
HB2706 Enrolled |
- 87 - |
LRB094 03732 BDD 33741 b |
|
|
1 |
| District may, by ordinance adopted with the concurrence of |
2 |
| two-thirds of
the then trustees, impose throughout the District |
3 |
| any or all of the taxes and
fees provided in this Section. All |
4 |
| taxes and fees imposed under this Section
shall be used only |
5 |
| for public mass transportation systems, and the amount used
to |
6 |
| provide mass transit service to unserved areas of the District |
7 |
| shall be in
the same proportion to the total proceeds as the |
8 |
| number of persons residing in
the unserved areas is to the |
9 |
| total population of the District. Except as
otherwise provided |
10 |
| in this Act, taxes imposed under
this Section and civil |
11 |
| penalties imposed incident thereto shall be
collected and |
12 |
| enforced by the State Department of Revenue.
The Department |
13 |
| shall have the power to administer and enforce the taxes
and to |
14 |
| determine all rights for refunds for erroneous payments of the |
15 |
| taxes.
|
16 |
| (b) The Board may impose a Metro East Mass Transit District |
17 |
| Retailers'
Occupation Tax upon all persons engaged in the |
18 |
| business of selling tangible
personal property at retail in the |
19 |
| district at a rate of 1/4 of 1%, or as
authorized under |
20 |
| subsection (d-5) of this Section, of the
gross receipts from |
21 |
| the sales made in the course of such business within
the |
22 |
| district. The tax imposed under this Section and all civil
|
23 |
| penalties that may be assessed as an incident thereof shall be |
24 |
| collected
and enforced by the State Department of Revenue. The |
25 |
| Department shall have
full power to administer and enforce this |
26 |
| Section; to collect all taxes
and penalties so collected in the |
27 |
| manner hereinafter provided; and to determine
all rights to |
28 |
| credit memoranda arising on account of the erroneous payment
of |
29 |
| tax or penalty hereunder. In the administration of, and |
30 |
| compliance with,
this Section, the Department and persons who |
31 |
| are subject to this Section
shall have the same rights, |
32 |
| remedies, privileges, immunities, powers and
duties, and be |
33 |
| subject to the same conditions, restrictions, limitations,
|
34 |
| penalties, exclusions, exemptions and definitions of terms and |
35 |
| employ
the same modes of procedure, as are prescribed in |
36 |
| Sections 1, 1a, 1a-1,
1c, 1d, 1e, 1f, 1i, 1j, 2 through 2-65 |
|
|
|
HB2706 Enrolled |
- 88 - |
LRB094 03732 BDD 33741 b |
|
|
1 |
| (in respect to all provisions
therein other than the State rate |
2 |
| of tax), 2c, 3 (except as to the
disposition of taxes and |
3 |
| penalties collected), 4, 5, 5a, 5c, 5d, 5e, 5f,
5g, 5h, 5i, 5j, |
4 |
| 5k, 5l, 6, 6a, 6b, 6c, 7, 8, 9, 10, 11, 12, 13, and 14 of
the |
5 |
| Retailers' Occupation Tax Act and Section 3-7 of the Uniform |
6 |
| Penalty
and Interest Act, as fully as if those provisions were |
7 |
| set forth herein.
|
8 |
| Persons subject to any tax imposed under the Section may |
9 |
| reimburse
themselves for their seller's tax liability |
10 |
| hereunder by separately stating
the tax as an additional |
11 |
| charge, which charge may be stated in combination,
in a single |
12 |
| amount, with State taxes that sellers are required to collect
|
13 |
| under the Use Tax Act, in accordance with such bracket |
14 |
| schedules as the
Department may prescribe.
|
15 |
| Whenever the Department determines that a refund should be |
16 |
| made under this
Section to a claimant instead of issuing a |
17 |
| credit memorandum, the Department
shall notify the State |
18 |
| Comptroller, who shall cause the warrant to be drawn
for the |
19 |
| amount specified, and to the person named, in the notification
|
20 |
| from the Department. The refund shall be paid by the State |
21 |
| Treasurer out
of the Metro East Mass Transit District tax fund |
22 |
| established under
paragraph (g) of this Section.
|
23 |
| If a tax is imposed under this subsection (b), a tax shall |
24 |
| also be
imposed under subsections (c) and (d) of this Section.
|
25 |
| For the purpose of determining whether a tax authorized |
26 |
| under this Section
is applicable, a retail sale, by a producer |
27 |
| of coal or other mineral mined
in Illinois, is a sale at retail |
28 |
| at the place where the coal or other mineral
mined in Illinois |
29 |
| is extracted from the earth. This paragraph does not
apply to |
30 |
| coal or other mineral when it is delivered or shipped by the |
31 |
| seller
to the purchaser at a point outside Illinois so that the |
32 |
| sale is exempt
under the Federal Constitution as a sale in |
33 |
| interstate or foreign commerce.
|
34 |
| Nothing in this Section shall be construed to authorize the |
35 |
| Metro East
Mass Transit District to impose a tax upon the |
36 |
| privilege of engaging in any
business which under the |
|
|
|
HB2706 Enrolled |
- 89 - |
LRB094 03732 BDD 33741 b |
|
|
1 |
| Constitution of the United States may not be made
the subject |
2 |
| of taxation by this State.
|
3 |
| (c) If a tax has been imposed under subsection (b), a Metro |
4 |
| East Mass
Transit District Service Occupation Tax shall
also be |
5 |
| imposed upon all persons engaged, in the district, in the |
6 |
| business
of making sales of service, who, as an incident to |
7 |
| making those sales of
service, transfer tangible personal |
8 |
| property within the District, either in
the form of tangible |
9 |
| personal property or in the form of real estate as an
incident |
10 |
| to a sale of service. The tax rate shall be 1/4%, or as |
11 |
| authorized
under subsection (d-5) of this Section, of the |
12 |
| selling
price of tangible personal property so transferred |
13 |
| within the district.
The tax imposed under this paragraph and |
14 |
| all civil penalties that may be
assessed as an incident thereof |
15 |
| shall be collected and enforced by the
State Department of |
16 |
| Revenue. The Department shall have full power to
administer and |
17 |
| enforce this paragraph; to collect all taxes and penalties
due |
18 |
| hereunder; to dispose of taxes and penalties so collected in |
19 |
| the manner
hereinafter provided; and to determine all rights to |
20 |
| credit memoranda
arising on account of the erroneous payment of |
21 |
| tax or penalty hereunder.
In the administration of, and |
22 |
| compliance with this paragraph, the
Department and persons who |
23 |
| are subject to this paragraph shall have the
same rights, |
24 |
| remedies, privileges, immunities, powers and duties, and be
|
25 |
| subject to the same conditions, restrictions, limitations, |
26 |
| penalties,
exclusions, exemptions and definitions of terms and |
27 |
| employ the same modes
of procedure as are prescribed in |
28 |
| Sections 1a-1, 2 (except that the
reference to State in the |
29 |
| definition of supplier maintaining a place of
business in this |
30 |
| State shall mean the Authority), 2a, 3 through
3-50 (in respect |
31 |
| to all provisions therein other than the State rate of
tax), 4 |
32 |
| (except that the reference to the State shall be to the |
33 |
| Authority),
5, 7, 8 (except that the jurisdiction to which the |
34 |
| tax shall be a debt to
the extent indicated in that Section 8 |
35 |
| shall be the District), 9 (except as
to the disposition of |
36 |
| taxes and penalties collected, and except that
the returned |
|
|
|
HB2706 Enrolled |
- 90 - |
LRB094 03732 BDD 33741 b |
|
|
1 |
| merchandise credit for this tax may not be taken against any
|
2 |
| State tax), 10, 11, 12 (except the reference therein to Section |
3 |
| 2b of the
Retailers' Occupation Tax Act), 13 (except that any |
4 |
| reference to the State
shall mean the District), the first |
5 |
| paragraph of Section 15, 16,
17, 18, 19 and 20 of the Service |
6 |
| Occupation Tax Act and Section 3-7 of
the Uniform Penalty and |
7 |
| Interest Act, as fully as if those provisions were
set forth |
8 |
| herein.
|
9 |
| Persons subject to any tax imposed under the authority |
10 |
| granted in
this paragraph may reimburse themselves for their |
11 |
| serviceman's tax liability
hereunder by separately stating the |
12 |
| tax as an additional charge, which
charge may be stated in |
13 |
| combination, in a single amount, with State tax
that servicemen |
14 |
| are authorized to collect under the Service Use Tax Act, in
|
15 |
| accordance with such bracket schedules as the Department may |
16 |
| prescribe.
|
17 |
| Whenever the Department determines that a refund should be |
18 |
| made under this
paragraph to a claimant instead of issuing a |
19 |
| credit memorandum, the Department
shall notify the State |
20 |
| Comptroller, who shall cause the warrant to be drawn
for the |
21 |
| amount specified, and to the person named, in the notification
|
22 |
| from the Department. The refund shall be paid by the State |
23 |
| Treasurer out
of the Metro East Mass Transit District tax fund |
24 |
| established under
paragraph (g) of this Section.
|
25 |
| Nothing in this paragraph shall be construed to authorize |
26 |
| the District
to impose a tax upon the privilege of engaging in |
27 |
| any business which under
the Constitution of the United States |
28 |
| may not be made the subject of taxation
by the State.
|
29 |
| (d) If a tax has been imposed under subsection (b), a Metro |
30 |
| East Mass
Transit District Use Tax shall
also be imposed upon |
31 |
| the privilege of using, in the district, any item of
tangible |
32 |
| personal property that is purchased outside the district at
|
33 |
| retail from a retailer, and that is titled or registered with |
34 |
| an agency of
this State's government, at a rate of 1/4%, or as |
35 |
| authorized under subsection
(d-5) of this Section, of the |
36 |
| selling price of the
tangible personal property within the |
|
|
|
HB2706 Enrolled |
- 91 - |
LRB094 03732 BDD 33741 b |
|
|
1 |
| District, as "selling price" is
defined in the Use Tax Act. The |
2 |
| tax shall be collected from persons whose
Illinois address for |
3 |
| titling or registration purposes is given as being in
the |
4 |
| District. The tax shall be collected by the Department of |
5 |
| Revenue for
the Metro East Mass Transit District. The tax must |
6 |
| be paid to the State,
or an exemption determination must be |
7 |
| obtained from the Department of
Revenue, before the title or |
8 |
| certificate of registration for the property
may be issued. The |
9 |
| tax or proof of exemption may be transmitted to the
Department |
10 |
| by way of the State agency with which, or the State officer |
11 |
| with
whom, the tangible personal property must be titled or |
12 |
| registered if the
Department and the State agency or State |
13 |
| officer determine that this
procedure will expedite the |
14 |
| processing of applications for title or
registration.
|
15 |
| The Department shall have full power to administer and |
16 |
| enforce this
paragraph; to collect all taxes, penalties and |
17 |
| interest due hereunder; to
dispose of taxes, penalties and |
18 |
| interest so collected in the manner
hereinafter provided; and |
19 |
| to determine all rights to credit memoranda or
refunds arising |
20 |
| on account of the erroneous payment of tax, penalty or
interest |
21 |
| hereunder. In the administration of, and compliance with, this
|
22 |
| paragraph, the Department and persons who are subject to this |
23 |
| paragraph
shall have the same rights, remedies, privileges, |
24 |
| immunities, powers and
duties, and be subject to the same |
25 |
| conditions, restrictions, limitations,
penalties, exclusions, |
26 |
| exemptions and definitions of terms
and employ the same modes |
27 |
| of procedure, as are prescribed in Sections 2
(except the |
28 |
| definition of "retailer maintaining a place of business in this
|
29 |
| State"), 3 through 3-80 (except provisions pertaining to the |
30 |
| State rate
of tax, and except provisions concerning collection |
31 |
| or refunding of the tax
by retailers), 4, 11, 12, 12a, 14, 15, |
32 |
| 19 (except the portions pertaining
to claims by retailers and |
33 |
| except the last paragraph concerning refunds),
20, 21 and 22 of |
34 |
| the Use Tax Act and Section 3-7 of the Uniform Penalty
and |
35 |
| Interest Act, that are not inconsistent with this
paragraph, as |
36 |
| fully as if those provisions were set forth herein.
|
|
|
|
HB2706 Enrolled |
- 92 - |
LRB094 03732 BDD 33741 b |
|
|
1 |
| Whenever the Department determines that a refund should be |
2 |
| made under this
paragraph to a claimant instead of issuing a |
3 |
| credit memorandum, the Department
shall notify the State |
4 |
| Comptroller, who shall cause the order
to be drawn for the |
5 |
| amount specified, and to the person named, in the
notification |
6 |
| from the Department. The refund shall be paid by the State
|
7 |
| Treasurer out of the Metro East Mass Transit District tax fund |
8 |
| established
under paragraph (g) of this Section.
|
9 |
| (d-5) (A) The county board of any county participating in |
10 |
| the Metro
East Mass Transit District may authorize, by |
11 |
| ordinance, a
referendum on the question of whether the tax |
12 |
| rates for the
Metro East Mass Transit District Retailers' |
13 |
| Occupation Tax, the
Metro East Mass Transit District Service |
14 |
| Occupation Tax, and the
Metro East Mass Transit District Use |
15 |
| Tax for
the District should be increased from 0.25% to 0.75%.
|
16 |
| Upon adopting the ordinance, the county
board shall certify the |
17 |
| proposition to the proper election officials who shall
submit |
18 |
| the proposition to the voters of the District at the next |
19 |
| election,
in accordance with the general election law.
|
20 |
| The proposition shall be in substantially the following |
21 |
| form:
|
22 |
| Shall the tax rates for the Metro East Mass Transit |
23 |
| District Retailers'
Occupation Tax, the Metro East Mass |
24 |
| Transit District Service Occupation Tax,
and the Metro East |
25 |
| Mass Transit District Use Tax be increased from 0.25% to
|
26 |
| 0.75%?
|
27 |
| (B) Two thousand five hundred electors of any Metro East |
28 |
| Mass Transit
District may petition the Chief Judge of the |
29 |
| Circuit Court, or any judge of
that Circuit designated by the |
30 |
| Chief Judge, in which that District is located
to cause to be |
31 |
| submitted to a vote of the electors the question whether the |
32 |
| tax
rates for the Metro East Mass Transit District Retailers' |
33 |
| Occupation Tax, the
Metro East Mass Transit District Service |
34 |
| Occupation Tax, and the Metro East
Mass Transit District Use |
35 |
| Tax for the District should be increased from 0.25%
to 0.75%.
|
36 |
| Upon submission of such petition the court shall set a date |
|
|
|
HB2706 Enrolled |
- 93 - |
LRB094 03732 BDD 33741 b |
|
|
1 |
| not less than 10
nor more than 30 days thereafter for a hearing |
2 |
| on the sufficiency thereof.
Notice of the filing of such |
3 |
| petition and of such date shall be given in
writing to the |
4 |
| District and the County Clerk at least 7 days before the date |
5 |
| of
such hearing.
|
6 |
| If such petition is found sufficient, the court shall enter |
7 |
| an order to
submit that proposition at the next election, in |
8 |
| accordance with general
election law.
|
9 |
| The form of the petition shall be in substantially the |
10 |
| following form: To the
Circuit Court of the County of (name of |
11 |
| county):
|
12 |
| We, the undersigned electors of the (name of transit |
13 |
| district),
respectfully petition your honor to submit to a |
14 |
| vote of the electors of (name
of transit district) the |
15 |
| following proposition:
|
16 |
| Shall the tax rates for the Metro East Mass Transit |
17 |
| District Retailers'
Occupation Tax, the Metro East Mass |
18 |
| Transit District Service Occupation Tax,
and the Metro East |
19 |
| Mass Transit District Use Tax be increased from 0.25% to
|
20 |
| 0.75%?
|
21 |
| Name Address, with Street and Number.
|
|
22 | | ...................... |
........................................ |
|
23 | | ...................... |
........................................ |
|
24 |
| (C) The votes shall be recorded as "YES" or "NO". If a |
25 |
| majority of all
votes
cast on the proposition are for the |
26 |
| increase in
the tax rates, the Metro East Mass Transit District |
27 |
| shall begin imposing the
increased rates in the District, and
|
28 |
| the Department of Revenue shall begin collecting the increased |
29 |
| amounts, as
provided under this Section.
An ordinance imposing |
30 |
| or discontinuing a tax hereunder or effecting a change
in the |
31 |
| rate thereof shall be adopted and a certified copy thereof |
32 |
| filed with
the Department on or before the first day of |
33 |
| October, whereupon the Department
shall proceed to administer |
34 |
| and enforce this Section as of the first day of
January next |
|
|
|
HB2706 Enrolled |
- 94 - |
LRB094 03732 BDD 33741 b |
|
|
1 |
| following the adoption and filing , or on or before the first |
2 |
| day
of April, whereupon the Department shall proceed to |
3 |
| administer and enforce this
Section as of the first day of July |
4 |
| next following the adoption and filing .
|
5 |
| (D) If the voters have approved a referendum under this |
6 |
| subsection,
before
November 1, 1994, to
increase the tax rate |
7 |
| under this subsection, the Metro East Mass Transit
District |
8 |
| Board of Trustees may adopt by a majority vote an ordinance at |
9 |
| any
time
before January 1, 1995 that excludes from the rate |
10 |
| increase tangible personal
property that is titled or |
11 |
| registered with an
agency of this State's government.
The |
12 |
| ordinance excluding titled or
registered tangible personal |
13 |
| property from the rate increase must be filed with
the |
14 |
| Department at least 15 days before its effective date.
At any |
15 |
| time after adopting an ordinance excluding from the rate |
16 |
| increase
tangible personal property that is titled or |
17 |
| registered with an agency of this
State's government, the Metro |
18 |
| East Mass Transit District Board of Trustees may
adopt an |
19 |
| ordinance applying the rate increase to that tangible personal
|
20 |
| property. The ordinance shall be adopted, and a certified copy |
21 |
| of that
ordinance shall be filed with the Department, on or |
22 |
| before October 1, whereupon
the Department shall proceed to |
23 |
| administer and enforce the rate increase
against tangible |
24 |
| personal property titled or registered with an agency of this
|
25 |
| State's government as of the following January
1. After |
26 |
| December 31, 1995, any reimposed rate increase in effect under |
27 |
| this
subsection shall no longer apply to tangible personal |
28 |
| property titled or
registered with an agency of this State's |
29 |
| government. Beginning January 1,
1996, the Board of Trustees of |
30 |
| any Metro East Mass Transit
District may never reimpose a |
31 |
| previously excluded tax rate increase on tangible
personal |
32 |
| property titled or registered with an agency of this State's
|
33 |
| government.
After July 1, 2004, if the voters have approved a |
34 |
| referendum under this
subsection to increase the tax rate under |
35 |
| this subsection, the Metro East Mass
Transit District Board of |
36 |
| Trustees may adopt by a majority vote an ordinance
that |
|
|
|
HB2706 Enrolled |
- 95 - |
LRB094 03732 BDD 33741 b |
|
|
1 |
| excludes from the rate increase tangible personal property that |
2 |
| is titled
or registered with an agency of this State's |
3 |
| government. The ordinance excluding titled or registered |
4 |
| tangible personal property from the rate increase shall be
|
5 |
| adopted, and a certified copy of that ordinance shall be filed |
6 |
| with the
Department on or before October 1, whereupon the |
7 |
| Department shall administer and enforce this exclusion from the |
8 |
| rate increase as of the
following January 1, or on or before |
9 |
| April 1, whereupon the Department shall
administer and enforce |
10 |
| this exclusion from the rate increase as of the
following July |
11 |
| 1. The Board of Trustees of any Metro East Mass Transit |
12 |
| District
may never
reimpose a previously excluded tax rate |
13 |
| increase on tangible personal property
titled or registered |
14 |
| with an agency of this State's government.
|
15 |
| (d-6) If the Board of Trustees of any Metro East Mass |
16 |
| Transit District has
imposed a rate increase under subsection |
17 |
| (d-5) and filed an
ordinance with the Department of Revenue |
18 |
| excluding titled property from the
higher rate, then that Board |
19 |
| may, by ordinance adopted with
the concurrence of two-thirds of |
20 |
| the then trustees, impose throughout the
District a fee. The |
21 |
| fee on the excluded property shall not exceed $20 per
retail |
22 |
| transaction or an
amount
equal to the amount of tax excluded, |
23 |
| whichever is less, on
tangible personal property that is titled |
24 |
| or registered with an agency of this
State's government. |
25 |
| Beginning July 1, 2004, the fee shall apply only to
titled |
26 |
| property that is subject to either the Metro East Mass Transit |
27 |
| District
Retailers' Occupation Tax or the Metro East Mass |
28 |
| Transit District Service
Occupation Tax.
|
29 |
| (d-7) Until June 30, 2004, if a fee has been imposed under |
30 |
| subsection
(d-6), a fee shall also
be imposed upon the |
31 |
| privilege of using, in the district, any item of tangible
|
32 |
| personal property that is titled or registered with any agency |
33 |
| of this State's
government, in an amount equal to the amount of |
34 |
| the fee imposed under
subsection (d-6).
|
35 |
| (d-7.1) Beginning July 1, 2004, any fee imposed by the |
36 |
| Board of Trustees
of any Metro East Mass Transit District under |
|
|
|
HB2706 Enrolled |
- 96 - |
LRB094 03732 BDD 33741 b |
|
|
1 |
| subsection (d-6) and all civil
penalties that may be assessed |
2 |
| as an incident of the fees shall be collected
and enforced by |
3 |
| the State Department of Revenue. Reference to "taxes" in this
|
4 |
| Section shall be construed to apply to the administration, |
5 |
| payment, and
remittance of all fees under this Section. For |
6 |
| purposes of any fee imposed
under subsection (d-6), 4% of the |
7 |
| fee, penalty, and interest received by the
Department in the |
8 |
| first 12 months that the fee is collected and enforced by
the |
9 |
| Department and 2% of the fee, penalty, and interest following |
10 |
| the first
12 months shall be deposited into the Tax Compliance |
11 |
| and Administration
Fund and shall be used by the Department, |
12 |
| subject to appropriation, to cover
the costs of the Department. |
13 |
| No retailers' discount shall apply to any fee
imposed under |
14 |
| subsection (d-6).
|
15 |
| (d-8) No item of titled property shall be subject to both
|
16 |
| the higher rate approved by referendum, as authorized under |
17 |
| subsection (d-5),
and any fee imposed under subsection (d-6) or |
18 |
| (d-7).
|
19 |
| (d-9) (Blank).
If fees have been imposed under subsections |
20 |
| (d-6) and
(d-7), the
Board shall forward a copy of the |
21 |
| ordinance adopting such fees, which shall
include all zip codes |
22 |
| in whole or in part within the boundaries of the
district, to |
23 |
| the Secretary
of State within thirty days. By the 25th of each |
24 |
| month, the Secretary of State
shall subsequently provide the |
25 |
| Illinois Department of Revenue
with a list of identifiable |
26 |
| retail
transactions subject
to the .25% rate occurring within |
27 |
| the zip codes which are in whole or in part
within the |
28 |
| boundaries of the district and a list of
title applications for |
29 |
| addresses within the boundaries of the district for the
|
30 |
| previous month.
|
31 |
| (d-10) (Blank).
In the event that a retailer fails to pay |
32 |
| applicable
fees within 30
days of the date of the transaction, |
33 |
| a penalty shall be assessed at the rate of
25% of the amount of |
34 |
| fees. Interest on both late fees and penalties shall be
|
35 |
| assessed at the rate of 1% per month. All fees, penalties, and |
36 |
| attorney fees
shall constitute a lien on the personal and real |
|
|
|
HB2706 Enrolled |
- 97 - |
LRB094 03732 BDD 33741 b |
|
|
1 |
| property of the retailer.
|
2 |
| (e) A certificate of registration issued by the State |
3 |
| Department of
Revenue to a retailer under the Retailers' |
4 |
| Occupation Tax Act or under the
Service Occupation Tax Act |
5 |
| shall permit the registrant to engage in a
business that is |
6 |
| taxed under the tax imposed under paragraphs (b), (c)
or (d) of |
7 |
| this Section and no additional registration shall be required |
8 |
| under
the tax. A certificate issued under the Use Tax Act or |
9 |
| the Service Use Tax
Act shall be applicable with regard to any |
10 |
| tax imposed under paragraph (c)
of this Section.
|
11 |
| (f) (Blank).
The Board may impose a replacement vehicle tax |
12 |
| of $50 on
any
passenger car, as defined in Section 1-157 of the |
13 |
| Illinois Vehicle Code,
purchased within the district area by or |
14 |
| on behalf of an insurance company
to replace a passenger car of |
15 |
| an insured person in settlement of a total
loss claim. The tax |
16 |
| imposed may not become effective before the first
day of the |
17 |
| month following the passage of the ordinance imposing the tax
|
18 |
| and receipt of a certified copy of the ordinance by the |
19 |
| Department of
Revenue. The Department of Revenue shall collect |
20 |
| the tax for the district
in accordance with Sections 3-2002 and |
21 |
| 3-2003 of the Illinois Vehicle Code.
|
22 |
| The Department shall immediately pay over to the State |
23 |
| Treasurer,
ex officio, as trustee, all taxes collected |
24 |
| hereunder. On
or before the 25th day of each calendar month, |
25 |
| the Department shall
prepare and certify to the Comptroller the |
26 |
| disbursement of stated sums
of money to named districts, the |
27 |
| districts to be those from
which retailers have paid taxes or |
28 |
| penalties hereunder to the Department
during the second |
29 |
| preceding calendar month. The amount to be paid to
each |
30 |
| district shall be the amount collected hereunder during the |
31 |
| second
preceding calendar month by the Department, less any |
32 |
| amount determined by
the Department to be necessary for the |
33 |
| payment of refunds. Within 10 days
after receipt by the |
34 |
| Comptroller of the disbursement certification to the
|
35 |
| districts, provided for in this Section to be given to the |
36 |
| Comptroller by
the Department, the Comptroller shall cause the |
|
|
|
HB2706 Enrolled |
- 98 - |
LRB094 03732 BDD 33741 b |
|
|
1 |
| orders to be drawn for the
respective amounts in accordance |
2 |
| with the directions contained in the
certification.
|
3 |
| (g) Any ordinance imposing or discontinuing any tax under |
4 |
| this
Section shall be adopted and a certified copy thereof |
5 |
| filed with the
Department on or before June 1, whereupon the |
6 |
| Department of Revenue shall
proceed to administer and enforce |
7 |
| this Section on behalf of the Metro East
Mass Transit District |
8 |
| as of September 1 next following such
adoption and filing. |
9 |
| Beginning January 1, 1992, an ordinance or resolution
imposing |
10 |
| or discontinuing the tax hereunder shall be adopted and a
|
11 |
| certified copy thereof filed with the Department on or before |
12 |
| the first day
of July, whereupon the Department shall proceed |
13 |
| to administer and enforce
this Section as of the first day of |
14 |
| October next following such adoption
and filing. Beginning |
15 |
| January 1, 1993, except as provided in subsection
(d-5) of this |
16 |
| Section, an ordinance or resolution imposing
or discontinuing |
17 |
| the tax hereunder shall be adopted and a certified copy
thereof |
18 |
| filed with the Department on or before the first day of |
19 |
| October,
whereupon the Department shall proceed to administer |
20 |
| and enforce this
Section as of the first day of January next |
21 |
| following such adoption and
filing ,
or, beginning January 1, |
22 |
| 2004, on or before the first day of April, whereupon
the |
23 |
| Department shall proceed to administer and enforce this Section |
24 |
| as of the
first day of July next following the adoption and |
25 |
| filing .
|
26 |
| (h) Except as provided in subsection (d-7.1), the State |
27 |
| Department of
Revenue shall, upon collecting any taxes as
|
28 |
| provided in this Section, pay the taxes over to the State |
29 |
| Treasurer as
trustee for the District. The taxes shall be held |
30 |
| in a trust fund outside
the State Treasury. On or before the |
31 |
| 25th day of each calendar month, the
State Department of |
32 |
| Revenue shall prepare and certify to the Comptroller of
the |
33 |
| State of Illinois the amount to be paid to the District, which |
34 |
| shall be
the then balance in the fund, less any amount |
35 |
| determined by the Department
to be necessary for the payment of |
36 |
| refunds. Within 10 days after receipt by
the Comptroller of the |