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1 | AN ACT concerning insurance.
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2 | WHEREAS, Recent data indicates increasingly unaffordable | ||||||||||||||||||||||||
3 | health care and health insurance costs, a need to address | ||||||||||||||||||||||||
4 | quality in health care, and an increasing number of uninsured | ||||||||||||||||||||||||
5 | that requires Illinois policy makers change their approach to | ||||||||||||||||||||||||
6 | health care and health insurance coverage; and | ||||||||||||||||||||||||
7 | WHEREAS, Without a transformation, the high cost of health | ||||||||||||||||||||||||
8 | insurance, resulting in part from unacceptable quality of care | ||||||||||||||||||||||||
9 | and historic mandates, will cause the number of uninsured | ||||||||||||||||||||||||
10 | persons to increase in this State; and | ||||||||||||||||||||||||
11 | WHEREAS, It is the intent of this Act to strategically | ||||||||||||||||||||||||
12 | address these issues by collaborating with private purchasers | ||||||||||||||||||||||||
13 | and implementing the following health plans funded by the | ||||||||||||||||||||||||
14 | State: (1) increased measurement, transparency, and disclosure | ||||||||||||||||||||||||
15 | of hospital and clinician performance; (2) information, tools, | ||||||||||||||||||||||||
16 | and incentives for patients and other consumers to enable them | ||||||||||||||||||||||||
17 | to make informed health care decisions; (3) payment of | ||||||||||||||||||||||||
18 | hospitals and clinicians based on their performance; (4) health | ||||||||||||||||||||||||
19 | information technology, including an electronic health record | ||||||||||||||||||||||||
20 | for all Illinois citizens; (5) preventative and wellness | ||||||||||||||||||||||||
21 | initiatives; and (6) review of current health plan design and | ||||||||||||||||||||||||
22 | requirements identifying elements of the plans that need | ||||||||||||||||||||||||
23 | elimination and implementation of new provisions that are | ||||||||||||||||||||||||
24 | consistent with guidelines and protocols established by |
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1 | organizations representing medical professions and | ||||||
2 | organizations within affordable budget guidelines; therefore | ||||||
3 | Be it enacted by the People of the State of Illinois,
| ||||||
4 | represented in the General Assembly:
| ||||||
5 | Section 1. Short title. This Act may be cited as the | ||||||
6 | Consumer Choice of Benefits Health Insurance Plan Act. | ||||||
7 | Section 5. Purpose. The General Assembly recognizes the | ||||||
8 | need for individuals in this State to have the opportunity to | ||||||
9 | choose health insurance plans that are more affordable and | ||||||
10 | flexible than existing market policies offering accident and | ||||||
11 | health insurance coverage. The General Assembly, therefore, | ||||||
12 | seeks to increase the availability of health insurance coverage | ||||||
13 | by allowing insurers authorized to engage in the business of | ||||||
14 | insurance in this State to issue accident and health policies | ||||||
15 | that, in whole or in part, do not offer or provide | ||||||
16 | state-mandated health benefits. | ||||||
17 | Section 10. Definitions. For purposes of this Act: | ||||||
18 | "Consumer Choice of Benefits Health Insurance Plan" means | ||||||
19 | an accident or health insurance policy that, in whole or in | ||||||
20 | part, does not offer and provide state-mandated health | ||||||
21 | benefits, but that provides creditable coverage as defined by | ||||||
22 | Section 20 of the Illinois Health Insurance Portability and |
| |||||||
| |||||||
1 | Accountability Act. | ||||||
2 | "Department" means the Department of Financial and | ||||||
3 | Professional Regulation. | ||||||
4 | "Director" means the Director of Insurance. | ||||||
5 | "Insurer" means an insurance company actively engaged in | ||||||
6 | issuing approved policies of accident and health insurance in | ||||||
7 | Illinois. | ||||||
8 | Section 15. State-mandated health benefits. For purposes | ||||||
9 | of this Act, "state-mandated health benefits" means coverage | ||||||
10 | required under this Act or other laws of this State to be | ||||||
11 | provided in an individual major medical, blanket, or group | ||||||
12 | major medical policy for accident and health insurance or a | ||||||
13 | contract for a health-related condition that:
| ||||||
14 | (1) includes coverage for specific health care | ||||||
15 | services or benefits; or
| ||||||
16 | (2) includes coverage for a specific category of | ||||||
17 | licensed health care practitioner from whom an insured is | ||||||
18 | entitled to receive care.
| ||||||
19 | "State-mandated health benefits" does not include benefits | ||||||
20 | that are mandated by federal law or standard provisions or | ||||||
21 | rights required under this Act or other laws of this State to | ||||||
22 | be provided in a group major medical policy for accident and | ||||||
23 | health insurance that are unrelated to specific health | ||||||
24 | illnesses, injuries, or conditions of an insured, including | ||||||
25 | provisions related to:
|
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| |||||||
1 | (1) continuation of coverage under Sections 367e, | ||||||
2 | 367f, 367g, 367h, 367j, 367.2, and 367.2-5 of the Illinois | ||||||
3 | Insurance Code; | ||||||
4 | (2) conversion coverage under Sections 356d and | ||||||
5 | 367e(A) of the Illinois Insurance Code; | ||||||
6 | (3) preexisting conditions under: | ||||||
7 | (i) Section 20 of the Illinois Health Insurance | ||||||
8 | Portability and Accountability Act; | ||||||
9 | (ii) Section 367i of the Illinois Insurance Code; | ||||||
10 | and | ||||||
11 | (iii) Part 2005 of Chapter 1 or Title 50 of the | ||||||
12 | Illinois Administrative Code;
| ||||||
13 | (4) coverage for children, including newborn or | ||||||
14 | adopted children, under Sections 356c, 356h, and 367b of | ||||||
15 | the Illinois Insurance Code; | ||||||
16 | (5) timely payment of claims under Section 368a of the | ||||||
17 | Illinois Insurance Code; | ||||||
18 | (6) a consumer's right to an adequate and accessible | ||||||
19 | network under Section 370i of the Illinois Insurance Code. | ||||||
20 | These rights shall not be waived under a Consumer Choice of | ||||||
21 | Benefits Health Insurance Plan product;
| ||||||
22 | (7) coverage for mental health services and mental | ||||||
23 | illness rehabilitation services under Sections 367c and | ||||||
24 | 367d of the Illinois Insurance Code.
| ||||||
25 | "State-mandated health benefits" does not include benefits | ||||||
26 | that are mandated by federal law or standard provisions or |
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| |||||||
1 | rights required under this Act or other laws of this State to | ||||||
2 | be provided in an individual major medical or blanket policy | ||||||
3 | for accident and health insurance that are unrelated to | ||||||
4 | specific health illnesses, injuries, or conditions of an | ||||||
5 | insured, including provisions related to:
| ||||||
6 | (1) preexisting conditions under Part 2005 of Chapter 1 | ||||||
7 | of Title 50 of the Illinois Administrative Code; | ||||||
8 | (2) coverage for children, including newborn or | ||||||
9 | adopted children, under Sections 356b, 356c, and 356h of | ||||||
10 | the Illinois Insurance Code; | ||||||
11 | (3) timely payment of claims under Section 368a of the | ||||||
12 | Illinois Insurance Code; | ||||||
13 | (4) a consumer's right to an adequate and accessible | ||||||
14 | network under Section 370i of the Illinois Insurance Code;
| ||||||
15 | (5) coverage requirements for individual policies | ||||||
16 | outlined in Section 2007.70 of Title 50 of the Illinois | ||||||
17 | Administrative Code. These rights shall not be waived under | ||||||
18 | a Consumer Choice of Benefits Health Insurance Plan | ||||||
19 | product. | ||||||
20 | Section 20. Consumer Choice of Benefits Health Insurance | ||||||
21 | Plans authorized. An insurer may offer one or more Consumer | ||||||
22 | Choice of Benefits Health Insurance Plans. | ||||||
23 | Section 25. Notice to policyholder and enrollees. | ||||||
24 | (a) Each written application for enrollment, including any |
| |||||||
| |||||||
1 | application for enrollment under a group policy, in a Consumer | ||||||
2 | Choice of Benefits Health Insurance Plan must contain the | ||||||
3 | following language at the beginning of the application in bold | ||||||
4 | type:
| ||||||
5 | "You have the option to choose this Consumer Choice of | ||||||
6 | Benefits Health Insurance Plan that, either in whole or in | ||||||
7 | part, does not provide state-mandated health insurance | ||||||
8 | benefits normally required in accident and health | ||||||
9 | insurance policies in Illinois. This Consumer Choice of | ||||||
10 | Benefits Health Insurance Plan may provide a more | ||||||
11 | affordable health insurance policy for you although, at the | ||||||
12 | same time, it may provide you with fewer health insurance | ||||||
13 | benefits than those normally included as state-mandated | ||||||
14 | health insurance benefits in policies in Illinois. If you | ||||||
15 | choose this Consumer Choice of Benefits Health Insurance | ||||||
16 | Plan, please consult the insurance company or your | ||||||
17 | employer's benefits department to determine which | ||||||
18 | state-mandated health benefits are not included in this | ||||||
19 | policy.".
| ||||||
20 | (b) Each Consumer Choice of Benefits Health Insurance Plan | ||||||
21 | must contain the following language at or near the beginning of | ||||||
22 | the policy in bold type:
| ||||||
23 | "This Consumer Choice of Benefits Health Insurance Plan, | ||||||
24 | either in whole or in part, does not provide state-mandated | ||||||
25 | health benefits normally required in accident and health | ||||||
26 | insurance policies in Illinois. This Consumer Choice of |
| |||||||
| |||||||
1 | Benefits Health Insurance Plan may provide a more | ||||||
2 | affordable health insurance policy for you although, at the | ||||||
3 | same time, it may provide you with fewer health benefits | ||||||
4 | than those normally included as state-mandated health | ||||||
5 | benefits in policies in Illinois. Please consult with the | ||||||
6 | insurance company or your employer's benefits department | ||||||
7 | to determine which state-mandated health benefits are not | ||||||
8 | included in this policy.".
| ||||||
9 | Section 30. Disclosure statement. | ||||||
10 | (a) When a Consumer Choice of Benefits Health Insurance | ||||||
11 | Plan policy is issued, an insurer providing a Consumer Choice | ||||||
12 | of Benefits Health Insurance Plan must provide an applicant or | ||||||
13 | subscriber with a written disclosure statement that: | ||||||
14 | (1) acknowledges that the Consumer Choice of Benefits | ||||||
15 | Health Insurance Plan being purchased does not provide some | ||||||
16 | or all state-mandated health benefits; | ||||||
17 | (2) lists those state-mandated health benefits not | ||||||
18 | included under the Consumer Choice of Benefits Health | ||||||
19 | Insurance Plan; | ||||||
20 | (3) provides a notice, if the Consumer Choice of | ||||||
21 | Benefits Health Insurance Plan is issued to an individual | ||||||
22 | policyholder, that purchasing a plan may limit the | ||||||
23 | policyholder's future coverage options in the event the | ||||||
24 | policyholder's health changes and needed benefits are not | ||||||
25 | available under the Consumer Choice of Benefits Health |
| |||||||
| |||||||
1 | Insurance Plan; and
| ||||||
2 | (4) includes a section that allows for a signature by | ||||||
3 | the applicant or subscriber attesting to the fact that the | ||||||
4 | applicant has read and understood the disclosure statement | ||||||
5 | and attesting to the fact that the applicant or subscriber | ||||||
6 | has in fact been given a choice between the Consumer Choice | ||||||
7 | of Benefits Health Insurance Plan that they have chosen and | ||||||
8 | a health insurance plan that includes all state-mandated | ||||||
9 | health benefits. | ||||||
10 | (b) Each applicant and subscriber for initial coverage must | ||||||
11 | sign the disclosure statement provided by the insurer under | ||||||
12 | subsection (a) of this Section and return the statement to the | ||||||
13 | insurer. Under a group policy or contract, the term "applicant" | ||||||
14 | means the employer and the term "subscriber" means employee. | ||||||
15 | Under an individual policy or contract "applicant" means the | ||||||
16 | individual purchasing the policy.
| ||||||
17 | (c) An insurer must: | ||||||
18 | (1) retain the signed disclosure statement in the | ||||||
19 | insurer's records; and
| ||||||
20 | (2) provide the signed disclosure statement to the | ||||||
21 | Department upon request from the Director.
| ||||||
22 | Section 35. Rules. The Director shall adopt rules as | ||||||
23 | necessary to implement this Act. | ||||||
24 | Section 40. Additional policies. An insurer that offers one |
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1 | or more Consumer Choice of Benefits Health Insurance Plans | ||||||
2 | under this Act to an employer group must also offer to all | ||||||
3 | eligible employees in the group at least one accident and | ||||||
4 | health insurance policy that has been filed and approved with | ||||||
5 | the Department and includes coverage for all state-mandated | ||||||
6 | health benefits. An employer that offers a Consumer Choice of | ||||||
7 | Benefits Health Insurance Plan to its eligible employees must | ||||||
8 | offer at least one accident and health insurance policy that | ||||||
9 | includes coverage for all state-mandated health benefits that | ||||||
10 | has been filed and approved by the Department. | ||||||
11 | Section 45. Rates; rating and underwriting records. | ||||||
12 | (a) An insurer offering a Consumer Choice of Benefits | ||||||
13 | Health Insurance Plan under this Act shall maintain at its | ||||||
14 | principal place of business a complete and detailed description | ||||||
15 | of its rating practices and renewal underwriting practices, | ||||||
16 | including information and documentation that demonstrates that | ||||||
17 | its rating methods and practices are based upon commonly | ||||||
18 | accepted actuarial assumptions and are in accordance with sound | ||||||
19 | actuarial principles and that the rates for the Consumer Choice | ||||||
20 | of Benefits Health Insurance Plan reflect the difference in its | ||||||
21 | benefit package from a non-Consumer Choice of Benefits Health | ||||||
22 | Insurance Plan. | ||||||
23 | (b) Upon request, an insurer shall provide to the | ||||||
24 | Department an actuarial certification certifying that the | ||||||
25 | insurer is in compliance with this Act, and that the rating |
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| |||||||
1 | methods of the insurer are actuarially sound. Such | ||||||
2 | certification shall be in a form and manner and shall contain | ||||||
3 | such information as specified by the Director. A copy of the | ||||||
4 | certification shall be retained by the insurer at its principal | ||||||
5 | place of business for a period of 3 years from the date of | ||||||
6 | certification. This shall include any work papers prepared in | ||||||
7 | support of the actuarial certification. | ||||||
8 | (c) Nothing in this Section shall be construed as granting | ||||||
9 | the Director any power or authority to determine, fix, | ||||||
10 | prescribe, or promulgate the rates to be charged for any | ||||||
11 | individual or group accident and health insurance policy or | ||||||
12 | policies issued under this Act.
| ||||||
13 | Section 50. Applicability of Illinois Insurance Code | ||||||
14 | provisions. All policies of accident and health insurance | ||||||
15 | issued under this Act shall be subject to the provisions of | ||||||
16 | subsection (a) of Section 356g and Sections 356c, 356n, 370, | ||||||
17 | 370a, 370e, and 370o of the Illinois Insurance Code. | ||||||
18 | Section 900. The Illinois Income Tax Act is amended by | ||||||
19 | changing Section 203 and by adding Section 218 as follows:
| ||||||
20 | (35 ILCS 5/203) (from Ch. 120, par. 2-203)
| ||||||
21 | Sec. 203. Base income defined.
| ||||||
22 | (a) Individuals.
| ||||||
23 | (1) In general. In the case of an individual, base |
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| |||||||
1 | income means an
amount equal to the taxpayer's adjusted | ||||||
2 | gross income for the taxable
year as modified by paragraph | ||||||
3 | (2).
| ||||||
4 | (2) Modifications. The adjusted gross income referred | ||||||
5 | to in
paragraph (1) shall be modified by adding thereto the | ||||||
6 | sum of the
following amounts:
| ||||||
7 | (A) An amount equal to all amounts paid or accrued | ||||||
8 | to the taxpayer
as interest or dividends during the | ||||||
9 | taxable year to the extent excluded
from gross income | ||||||
10 | in the computation of adjusted gross income, except | ||||||
11 | stock
dividends of qualified public utilities | ||||||
12 | described in Section 305(e) of the
Internal Revenue | ||||||
13 | Code;
| ||||||
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 adjusted gross
income for the | ||||||
17 | taxable year;
| ||||||
18 | (C) An amount equal to the amount received during | ||||||
19 | the taxable year
as a recovery or refund of real | ||||||
20 | property taxes paid with respect to the
taxpayer's | ||||||
21 | principal residence under the Revenue Act of
1939 and | ||||||
22 | for which a deduction was previously taken under | ||||||
23 | subparagraph (L) of
this paragraph (2) prior to July 1, | ||||||
24 | 1991, the retrospective application date of
Article 4 | ||||||
25 | of Public Act 87-17. In the case of multi-unit or | ||||||
26 | multi-use
structures and farm dwellings, the taxes on |
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1 | the taxpayer's principal residence
shall be that | ||||||
2 | portion of the total taxes for the entire property | ||||||
3 | which is
attributable to such principal residence;
| ||||||
4 | (D) An amount equal to the amount of the capital | ||||||
5 | gain deduction
allowable under the Internal Revenue | ||||||
6 | Code, to the extent deducted from gross
income in the | ||||||
7 | computation of adjusted gross income;
| ||||||
8 | (D-5) An amount, to the extent not included in | ||||||
9 | adjusted gross income,
equal to the amount of money | ||||||
10 | withdrawn by the taxpayer in the taxable year from
a | ||||||
11 | medical care savings account and the interest earned on | ||||||
12 | the account in the
taxable year of a withdrawal | ||||||
13 | pursuant to subsection (b) of Section 20 of the
Medical | ||||||
14 | Care Savings Account Act or subsection (b) of Section | ||||||
15 | 20 of the
Medical Care Savings Account Act of 2000;
| ||||||
16 | (D-10) For taxable years ending after December 31, | ||||||
17 | 1997, an
amount equal to any eligible remediation costs | ||||||
18 | that the individual
deducted in computing adjusted | ||||||
19 | gross income and for which the
individual claims a | ||||||
20 | credit under subsection (l) of Section 201;
| ||||||
21 | (D-15) For taxable years 2001 and thereafter, an | ||||||
22 | amount equal to the
bonus depreciation deduction taken | ||||||
23 | on the taxpayer's federal income tax return for the | ||||||
24 | taxable
year under subsection (k) of Section 168 of the | ||||||
25 | Internal Revenue Code . For taxable years 2008 and
| ||||||
26 | thereafter, this subparagraph does not apply to bonus |
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| |||||||
1 | depreciation deductions taken
for health information | ||||||
2 | technology on the taxpayer's federal income tax return | ||||||
3 | for the
taxable year under subsection (k) of Section | ||||||
4 | 168 of the Internal Revenue Code. "Health information | ||||||
5 | technology" means
information technology hardware or | ||||||
6 | software that is used primarily for the electronic
| ||||||
7 | creation, maintenance, and exchange of medical care | ||||||
8 | information to improve the
quality or efficiency of | ||||||
9 | medical care ;
| ||||||
10 | (D-16) If the taxpayer sells, transfers, abandons, | ||||||
11 | or otherwise disposes of property for which the | ||||||
12 | taxpayer was required in any taxable year to
make an | ||||||
13 | addition modification under subparagraph (D-15), then | ||||||
14 | an amount equal
to the aggregate amount of the | ||||||
15 | deductions taken in all taxable
years under | ||||||
16 | subparagraph (Z) with respect to that property.
| ||||||
17 | If the taxpayer continues to own property through | ||||||
18 | the last day of the last tax year for which the | ||||||
19 | taxpayer may claim a depreciation deduction for | ||||||
20 | federal income tax purposes and for which the taxpayer | ||||||
21 | was allowed in any taxable year to make a subtraction | ||||||
22 | modification under subparagraph (Z), then an amount | ||||||
23 | equal to that subtraction modification.
| ||||||
24 | The taxpayer is required to make the addition | ||||||
25 | modification under this
subparagraph
only once with | ||||||
26 | respect to any one piece of property;
|
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| |||||||
1 | (D-17) For taxable years ending on or after | ||||||
2 | December 31, 2004, an amount equal to the amount | ||||||
3 | otherwise allowed as a deduction in computing base | ||||||
4 | income for interest paid, accrued, or incurred, | ||||||
5 | directly or indirectly, to a foreign person who would | ||||||
6 | be a member of the same unitary business group but for | ||||||
7 | the fact that foreign person's business activity | ||||||
8 | outside the United States is 80% or more of the foreign | ||||||
9 | person's total business activity. The addition | ||||||
10 | modification required by this subparagraph shall be | ||||||
11 | reduced to the extent that dividends were included in | ||||||
12 | base income of the unitary group for the same taxable | ||||||
13 | year and received by the taxpayer or by a member of the | ||||||
14 | taxpayer's unitary business group (including amounts | ||||||
15 | included in gross income under Sections 951 through 964 | ||||||
16 | of the Internal Revenue Code and amounts included in | ||||||
17 | gross income under Section 78 of the Internal Revenue | ||||||
18 | Code) with respect to the stock of the same person to | ||||||
19 | whom the interest was paid, accrued, or incurred. | ||||||
20 | This paragraph shall not apply to the following:
| ||||||
21 | (i) an item of interest paid, accrued, or | ||||||
22 | incurred, directly or indirectly, to a foreign | ||||||
23 | person who is subject in a foreign country or | ||||||
24 | state, other than a state which requires mandatory | ||||||
25 | unitary reporting, to a tax on or measured by net | ||||||
26 | income with respect to such interest; or |
| |||||||
| |||||||
1 | (ii) an item of interest paid, accrued, or | ||||||
2 | incurred, directly or indirectly, to a foreign | ||||||
3 | person if the taxpayer can establish, based on a | ||||||
4 | preponderance of the evidence, both of the | ||||||
5 | following: | ||||||
6 | (a) the foreign person, during the same | ||||||
7 | taxable year, paid, accrued, or incurred, the | ||||||
8 | interest to a person that is not a related | ||||||
9 | member, and | ||||||
10 | (b) the transaction giving rise to the | ||||||
11 | interest expense between the taxpayer and the | ||||||
12 | foreign person did not have as a principal | ||||||
13 | purpose the avoidance of Illinois income tax, | ||||||
14 | and is paid pursuant to a contract or agreement | ||||||
15 | that reflects an arm's-length interest rate | ||||||
16 | and terms; or
| ||||||
17 | (iii) the taxpayer can establish, based on | ||||||
18 | clear and convincing evidence, that the interest | ||||||
19 | paid, accrued, or incurred relates to a contract or | ||||||
20 | agreement entered into at arm's-length rates and | ||||||
21 | terms and the principal purpose for the payment is | ||||||
22 | not federal or Illinois tax avoidance; or
| ||||||
23 | (iv) an item of interest paid, accrued, or | ||||||
24 | incurred, directly or indirectly, to a foreign | ||||||
25 | person if the taxpayer establishes by clear and | ||||||
26 | convincing evidence that the adjustments are |
| |||||||
| |||||||
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 | (D-18) 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 |
| |||||||
| |||||||
1 | taxpayer or by a member of the taxpayer's unitary | ||||||
2 | business group (including amounts included in gross | ||||||
3 | income under Sections 951 through 964 of the Internal | ||||||
4 | Revenue Code and amounts included in gross income under | ||||||
5 | Section 78 of the Internal Revenue Code) with respect | ||||||
6 | to the stock of the same person to whom the intangible | ||||||
7 | expenses and costs were directly or indirectly paid, | ||||||
8 | incurred, or accrued. The preceding sentence does not | ||||||
9 | apply to the extent that the same dividends caused a | ||||||
10 | reduction to the addition modification required under | ||||||
11 | Section 203(a)(2)(D-17) of this Act. As used in this | ||||||
12 | subparagraph, the term "intangible expenses and costs" | ||||||
13 | includes (1) expenses, losses, and costs for, or | ||||||
14 | related to, the direct or indirect acquisition, use, | ||||||
15 | maintenance or management, ownership, sale, exchange, | ||||||
16 | or any other disposition of intangible property; (2) | ||||||
17 | losses incurred, directly or indirectly, from | ||||||
18 | factoring transactions or discounting transactions; | ||||||
19 | (3) royalty, patent, technical, and copyright fees; | ||||||
20 | (4) licensing fees; and (5) other similar expenses and | ||||||
21 | costs.
For purposes of this subparagraph, "intangible | ||||||
22 | property" includes patents, patent applications, trade | ||||||
23 | names, trademarks, service marks, copyrights, mask | ||||||
24 | works, trade secrets, and similar types of intangible | ||||||
25 | assets. | ||||||
26 | This paragraph shall not apply to the following: |
| |||||||
| |||||||
1 | (i) any item of intangible expenses or costs | ||||||
2 | paid, accrued, or incurred, directly or | ||||||
3 | indirectly, from a transaction with a foreign | ||||||
4 | person who is subject in a foreign country or | ||||||
5 | state, other than a state which requires mandatory | ||||||
6 | unitary reporting, to a tax on or measured by net | ||||||
7 | income with respect to such item; or | ||||||
8 | (ii) any item of intangible expense or cost | ||||||
9 | paid, accrued, or incurred, directly or | ||||||
10 | indirectly, if the taxpayer can establish, based | ||||||
11 | on a preponderance of the evidence, both of the | ||||||
12 | following: | ||||||
13 | (a) the foreign person during the same | ||||||
14 | taxable year paid, accrued, or incurred, the | ||||||
15 | intangible expense or cost to a person that is | ||||||
16 | not a related member, and | ||||||
17 | (b) the transaction giving rise to the | ||||||
18 | intangible expense or cost between the | ||||||
19 | taxpayer and the foreign person did not have as | ||||||
20 | a principal purpose the avoidance of Illinois | ||||||
21 | income tax, and is paid pursuant to a contract | ||||||
22 | or agreement that reflects arm's-length terms; | ||||||
23 | or | ||||||
24 | (iii) any item of intangible expense or cost | ||||||
25 | paid, accrued, or incurred, directly or | ||||||
26 | indirectly, from a transaction with a foreign |
| |||||||
| |||||||
1 | person if the taxpayer establishes by clear and | ||||||
2 | convincing evidence, that the adjustments are | ||||||
3 | unreasonable; or if the taxpayer and the Director | ||||||
4 | agree in writing to the application or use of an | ||||||
5 | alternative method of apportionment under Section | ||||||
6 | 304(f);
| ||||||
7 | Nothing in this subsection shall preclude the | ||||||
8 | Director from making any other adjustment | ||||||
9 | otherwise allowed under Section 404 of this Act for | ||||||
10 | any tax year beginning after the effective date of | ||||||
11 | this amendment provided such adjustment is made | ||||||
12 | pursuant to regulation adopted by the Department | ||||||
13 | and such regulations provide methods and standards | ||||||
14 | by which the Department will utilize its authority | ||||||
15 | under Section 404 of this Act;
| ||||||
16 | (D-20) For taxable years beginning on or after | ||||||
17 | January 1,
2002, in
the
case of a distribution from a | ||||||
18 | qualified tuition program under Section 529 of
the | ||||||
19 | Internal Revenue Code, other than (i) a distribution | ||||||
20 | from a College Savings
Pool created under Section 16.5 | ||||||
21 | of the State Treasurer Act or (ii) a
distribution from | ||||||
22 | the Illinois Prepaid Tuition Trust Fund, an amount | ||||||
23 | equal to
the amount excluded from gross income under | ||||||
24 | Section 529(c)(3)(B);
| ||||||
25 | and by deducting from the total so obtained the
sum of the | ||||||
26 | following amounts:
|
| |||||||
| |||||||
1 | (E) For taxable years ending before December 31, | ||||||
2 | 2001,
any amount included in such total in respect of | ||||||
3 | any compensation
(including but not limited to any | ||||||
4 | compensation paid or accrued to a
serviceman while a | ||||||
5 | prisoner of war or missing in action) paid to a | ||||||
6 | resident
by reason of being on active duty in the Armed | ||||||
7 | Forces of the United States
and in respect of any | ||||||
8 | compensation paid or accrued to a resident who as a
| ||||||
9 | governmental employee was a prisoner of war or missing | ||||||
10 | in action, and in
respect of any compensation paid to a | ||||||
11 | resident in 1971 or thereafter for
annual training | ||||||
12 | performed pursuant to Sections 502 and 503, Title 32,
| ||||||
13 | United States Code as a member of the Illinois National | ||||||
14 | Guard.
For taxable years ending on or after December | ||||||
15 | 31, 2001, any amount included in
such total in respect | ||||||
16 | of any compensation (including but not limited to any
| ||||||
17 | compensation paid or accrued to a serviceman while a | ||||||
18 | prisoner of war or missing
in action) paid to a | ||||||
19 | resident by reason of being a member of any component | ||||||
20 | of
the Armed Forces of the United States and in respect | ||||||
21 | of any compensation paid
or accrued to a resident who | ||||||
22 | as a governmental employee was a prisoner of war
or | ||||||
23 | missing in action, and in respect of any compensation | ||||||
24 | paid to a resident in
2001 or thereafter by reason of | ||||||
25 | being a member of the Illinois National Guard.
The | ||||||
26 | provisions of this amendatory Act of the 92nd General |
| |||||||
| |||||||
1 | Assembly are exempt
from the provisions of Section 250;
| ||||||
2 | (F) An amount equal to all amounts included in such | ||||||
3 | total pursuant
to the provisions of Sections 402(a), | ||||||
4 | 402(c), 403(a), 403(b), 406(a), 407(a),
and 408 of the | ||||||
5 | Internal Revenue Code, or included in such total as
| ||||||
6 | distributions under the provisions of any retirement | ||||||
7 | or disability plan for
employees of any governmental | ||||||
8 | agency or unit, or retirement payments to
retired | ||||||
9 | partners, which payments are excluded in computing net | ||||||
10 | earnings
from self employment by Section 1402 of the | ||||||
11 | Internal Revenue Code and
regulations adopted pursuant | ||||||
12 | thereto;
| ||||||
13 | (G) The valuation limitation amount;
| ||||||
14 | (H) An amount equal to the amount of any tax | ||||||
15 | imposed by this Act
which was refunded to the taxpayer | ||||||
16 | and included in such total for the
taxable year;
| ||||||
17 | (I) An amount equal to all amounts included in such | ||||||
18 | total pursuant
to the provisions of Section 111 of the | ||||||
19 | Internal Revenue Code as a
recovery of items previously | ||||||
20 | deducted from adjusted gross income in the
computation | ||||||
21 | of taxable income;
| ||||||
22 | (J) An amount equal to those dividends included in | ||||||
23 | such total which were
paid by a corporation which | ||||||
24 | conducts business operations in an Enterprise
Zone or | ||||||
25 | zones created under the Illinois Enterprise Zone Act or | ||||||
26 | a River Edge Redevelopment Zone or zones created under |
| |||||||
| |||||||
1 | the River Edge Redevelopment Zone Act, and conducts
| ||||||
2 | substantially all of its operations in an Enterprise | ||||||
3 | Zone or zones or a River Edge Redevelopment Zone or | ||||||
4 | zones. This subparagraph (J) is exempt from the | ||||||
5 | provisions of Section 250;
| ||||||
6 | (K) An amount equal to those dividends included in | ||||||
7 | such total that
were paid by a corporation that | ||||||
8 | conducts business operations in a federally
designated | ||||||
9 | Foreign Trade Zone or Sub-Zone and that is designated a | ||||||
10 | High Impact
Business located in Illinois; provided | ||||||
11 | that dividends eligible for the
deduction provided in | ||||||
12 | subparagraph (J) of paragraph (2) of this subsection
| ||||||
13 | shall not be eligible for the deduction provided under | ||||||
14 | this subparagraph
(K);
| ||||||
15 | (L) For taxable years ending after December 31, | ||||||
16 | 1983, an amount equal to
all social security benefits | ||||||
17 | and railroad retirement benefits included in
such | ||||||
18 | total pursuant to Sections 72(r) and 86 of the Internal | ||||||
19 | Revenue Code;
| ||||||
20 | (M) With the exception of any amounts subtracted | ||||||
21 | under subparagraph
(N), an amount equal to the sum of | ||||||
22 | all amounts disallowed as
deductions by (i) Sections | ||||||
23 | 171(a) (2), and 265(2) of the Internal Revenue Code
of | ||||||
24 | 1954, as now or hereafter amended, and all amounts of | ||||||
25 | expenses allocable
to interest and disallowed as | ||||||
26 | deductions by Section 265(1) of the Internal
Revenue |
| |||||||
| |||||||
1 | Code of 1954, as now or hereafter amended;
and (ii) for | ||||||
2 | taxable years
ending on or after August 13, 1999, | ||||||
3 | Sections 171(a)(2), 265,
280C, and 832(b)(5)(B)(i) of | ||||||
4 | the Internal Revenue Code; the provisions of this
| ||||||
5 | subparagraph are exempt from the provisions of Section | ||||||
6 | 250;
| ||||||
7 | (N) An amount equal to all amounts included in such | ||||||
8 | total which are
exempt from taxation by this State | ||||||
9 | either by reason of its statutes or
Constitution
or by | ||||||
10 | reason of the Constitution, treaties or statutes of the | ||||||
11 | United States;
provided that, in the case of any | ||||||
12 | statute of this State that exempts income
derived from | ||||||
13 | bonds or other obligations from the tax imposed under | ||||||
14 | this Act,
the amount exempted shall be the interest net | ||||||
15 | of bond premium amortization;
| ||||||
16 | (O) An amount equal to any contribution made to a | ||||||
17 | job training
project established pursuant to the Tax | ||||||
18 | Increment Allocation Redevelopment Act;
| ||||||
19 | (P) An amount equal to the amount of the deduction | ||||||
20 | used to compute the
federal income tax credit for | ||||||
21 | restoration of substantial amounts held under
claim of | ||||||
22 | right for the taxable year pursuant to Section 1341 of | ||||||
23 | the
Internal Revenue Code of 1986;
| ||||||
24 | (Q) An amount equal to any amounts included in such | ||||||
25 | total, received by
the taxpayer as an acceleration in | ||||||
26 | the payment of life, endowment or annuity
benefits in |
| |||||||
| |||||||
1 | advance of the time they would otherwise be payable as | ||||||
2 | an indemnity
for a terminal illness;
| ||||||
3 | (R) An amount equal to the amount of any federal or | ||||||
4 | State bonus paid
to veterans of the Persian Gulf War;
| ||||||
5 | (S) An amount, to the extent included in adjusted | ||||||
6 | gross income, equal
to the amount of a contribution | ||||||
7 | made in the taxable year on behalf of the
taxpayer to a | ||||||
8 | medical care savings account established under the | ||||||
9 | Medical Care
Savings Account Act or the Medical Care | ||||||
10 | Savings Account Act of 2000 to the
extent the | ||||||
11 | contribution is accepted by the account
administrator | ||||||
12 | as provided in that Act;
| ||||||
13 | (T) An amount, to the extent included in adjusted | ||||||
14 | gross income, equal to
the amount of interest earned in | ||||||
15 | the taxable year on a medical care savings
account | ||||||
16 | established under the Medical Care Savings Account Act | ||||||
17 | or the Medical
Care Savings Account Act of 2000 on | ||||||
18 | behalf of the
taxpayer, other than interest added | ||||||
19 | pursuant to item (D-5) of this paragraph
(2);
| ||||||
20 | (U) For one taxable year beginning on or after | ||||||
21 | January 1,
1994, an
amount equal to the total amount of | ||||||
22 | tax imposed and paid under subsections (a)
and (b) of | ||||||
23 | Section 201 of this Act on grant amounts received by | ||||||
24 | the taxpayer
under the Nursing Home Grant Assistance | ||||||
25 | Act during the taxpayer's taxable years
1992 and 1993;
| ||||||
26 | (V) Beginning with tax years ending on or after |
| |||||||
| |||||||
1 | December 31, 1995 and
ending with tax years ending on | ||||||
2 | or before December 31, 2004, an amount equal to
the | ||||||
3 | amount paid by a taxpayer who is a
self-employed | ||||||
4 | taxpayer, a partner of a partnership, or a
shareholder | ||||||
5 | in a Subchapter S corporation for health insurance or | ||||||
6 | long-term
care insurance for that taxpayer or that | ||||||
7 | taxpayer's spouse or dependents, to
the extent that the | ||||||
8 | amount paid for that health insurance or long-term care
| ||||||
9 | insurance may be deducted under Section 213 of the | ||||||
10 | Internal Revenue Code of
1986, has not been deducted on | ||||||
11 | the federal income tax return of the taxpayer,
and does | ||||||
12 | not exceed the taxable income attributable to that | ||||||
13 | taxpayer's income,
self-employment income, or | ||||||
14 | Subchapter S corporation income; except that no
| ||||||
15 | deduction shall be allowed under this item (V) if the | ||||||
16 | taxpayer is eligible to
participate in any health | ||||||
17 | insurance or long-term care insurance plan of an
| ||||||
18 | employer of the taxpayer or the taxpayer's
spouse. The | ||||||
19 | amount of the health insurance and long-term care | ||||||
20 | insurance
subtracted under this item (V) shall be | ||||||
21 | determined by multiplying total
health insurance and | ||||||
22 | long-term care insurance premiums paid by the taxpayer
| ||||||
23 | times a number that represents the fractional | ||||||
24 | percentage of eligible medical
expenses under Section | ||||||
25 | 213 of the Internal Revenue Code of 1986 not actually
| ||||||
26 | deducted on the taxpayer's federal income tax return;
|
| |||||||
| |||||||
1 | (W) For taxable years beginning on or after January | ||||||
2 | 1, 1998,
all amounts included in the taxpayer's federal | ||||||
3 | gross income
in the taxable year from amounts converted | ||||||
4 | from a regular IRA to a Roth IRA.
This paragraph is | ||||||
5 | exempt from the provisions of Section
250;
| ||||||
6 | (X) For taxable year 1999 and thereafter, an amount | ||||||
7 | equal to the
amount of any (i) distributions, to the | ||||||
8 | extent includible in gross income for
federal income | ||||||
9 | tax purposes, made to the taxpayer because of his or | ||||||
10 | her status
as a victim of persecution for racial or | ||||||
11 | religious reasons by Nazi Germany or
any other Axis | ||||||
12 | regime or as an heir of the victim and (ii) items
of | ||||||
13 | income, to the extent
includible in gross income for | ||||||
14 | federal income tax purposes, attributable to,
derived | ||||||
15 | from or in any way related to assets stolen from, | ||||||
16 | hidden from, or
otherwise lost to a victim of
| ||||||
17 | persecution for racial or religious reasons by Nazi | ||||||
18 | Germany or any other Axis
regime immediately prior to, | ||||||
19 | during, and immediately after World War II,
including, | ||||||
20 | but
not limited to, interest on the proceeds receivable | ||||||
21 | as insurance
under policies issued to a victim of | ||||||
22 | persecution for racial or religious
reasons
by Nazi | ||||||
23 | Germany or any other Axis regime by European insurance | ||||||
24 | companies
immediately prior to and during World War II;
| ||||||
25 | provided, however, this subtraction from federal | ||||||
26 | adjusted gross income does not
apply to assets acquired |
| |||||||
| |||||||
1 | with such assets or with the proceeds from the sale of
| ||||||
2 | such assets; provided, further, this paragraph shall | ||||||
3 | only apply to a taxpayer
who was the first recipient of | ||||||
4 | such assets after their recovery and who is a
victim of | ||||||
5 | persecution for racial or religious reasons
by Nazi | ||||||
6 | Germany or any other Axis regime or as an heir of the | ||||||
7 | victim. The
amount of and the eligibility for any | ||||||
8 | public assistance, benefit, or
similar entitlement is | ||||||
9 | not affected by the inclusion of items (i) and (ii) of
| ||||||
10 | this paragraph in gross income for federal income tax | ||||||
11 | purposes.
This paragraph is exempt from the provisions | ||||||
12 | of Section 250;
| ||||||
13 | (Y) For taxable years beginning on or after January | ||||||
14 | 1, 2002
and ending
on or before December 31, 2004, | ||||||
15 | moneys contributed in the taxable year to a College | ||||||
16 | Savings Pool account under
Section 16.5 of the State | ||||||
17 | Treasurer Act, except that amounts excluded from
gross | ||||||
18 | income under Section 529(c)(3)(C)(i) of the Internal | ||||||
19 | Revenue Code
shall not be considered moneys | ||||||
20 | contributed under this subparagraph (Y). For taxable | ||||||
21 | years beginning on or after January 1, 2005, a maximum | ||||||
22 | of $10,000
contributed
in the
taxable year to (i) a | ||||||
23 | College Savings Pool account under Section 16.5 of the
| ||||||
24 | State
Treasurer Act or (ii) the Illinois Prepaid | ||||||
25 | Tuition Trust Fund,
except that
amounts excluded from | ||||||
26 | gross income under Section 529(c)(3)(C)(i) of the
|
| |||||||
| |||||||
1 | Internal
Revenue Code shall not be considered moneys | ||||||
2 | contributed under this subparagraph
(Y). This
| ||||||
3 | subparagraph (Y) is exempt from the provisions of | ||||||
4 | Section 250;
| ||||||
5 | (Z) For taxable years 2001 and thereafter, for the | ||||||
6 | taxable year in
which the bonus depreciation deduction
| ||||||
7 | is taken on the taxpayer's federal income tax return | ||||||
8 | under
subsection (k) of Section 168 of the Internal | ||||||
9 | Revenue Code and for each
applicable taxable year | ||||||
10 | thereafter, an amount equal to "x", where:
| ||||||
11 | (1) "y" equals the amount of the depreciation | ||||||
12 | deduction taken for the
taxable year
on the | ||||||
13 | taxpayer's federal income tax return on property | ||||||
14 | for which the bonus
depreciation deduction
was | ||||||
15 | taken in any year under subsection (k) of Section | ||||||
16 | 168 of the Internal
Revenue Code, but not including | ||||||
17 | the bonus depreciation deduction;
| ||||||
18 | (2) for taxable years ending on or before | ||||||
19 | December 31, 2005, "x" equals "y" multiplied by 30 | ||||||
20 | and then divided by 70 (or "y"
multiplied by | ||||||
21 | 0.429); and | ||||||
22 | (3) for taxable years ending after December | ||||||
23 | 31, 2005: | ||||||
24 | (i) for property on which a bonus | ||||||
25 | depreciation deduction of 30% of the adjusted | ||||||
26 | basis was taken, "x" equals "y" multiplied by |
| |||||||
| |||||||
1 | 30 and then divided by 70 (or "y"
multiplied by | ||||||
2 | 0.429); and | ||||||
3 | (ii) for property on which a bonus | ||||||
4 | depreciation deduction of 50% of the adjusted | ||||||
5 | basis was taken, "x" equals "y" multiplied by | ||||||
6 | 1.0.
| ||||||
7 | The aggregate amount deducted under this | ||||||
8 | subparagraph in all taxable
years for any one piece of | ||||||
9 | property may not exceed the amount of the bonus
| ||||||
10 | depreciation deduction
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 (Z) is exempt from the provisions of | ||||||
14 | Section 250;
| ||||||
15 | (AA) If the taxpayer sells, transfers, abandons, | ||||||
16 | or otherwise disposes of
property for which the | ||||||
17 | taxpayer was required in any taxable year to make an
| ||||||
18 | addition modification under subparagraph (D-15), then | ||||||
19 | an amount equal to that
addition modification.
| ||||||
20 | If the taxpayer continues to own property through | ||||||
21 | the last day of the last tax year for which the | ||||||
22 | taxpayer may claim a depreciation deduction for | ||||||
23 | federal income tax purposes and for which the taxpayer | ||||||
24 | was required in any taxable year to make an addition | ||||||
25 | modification under subparagraph (D-15), then an amount | ||||||
26 | equal to that addition modification.
|
| |||||||
| |||||||
1 | The taxpayer is allowed to take the deduction under | ||||||
2 | this subparagraph
only once with respect to any one | ||||||
3 | piece of property. | ||||||
4 | This subparagraph (AA) is exempt from the | ||||||
5 | provisions of Section 250;
| ||||||
6 | (BB) Any amount included in adjusted gross income, | ||||||
7 | other
than
salary,
received by a driver in a | ||||||
8 | ridesharing arrangement using a motor vehicle;
| ||||||
9 | (CC) The amount of (i) any interest income (net of | ||||||
10 | the deductions allocable thereto) taken into account | ||||||
11 | for the taxable year with respect to a transaction with | ||||||
12 | a taxpayer that is required to make an addition | ||||||
13 | modification with respect to such transaction under | ||||||
14 | Section 203(a)(2)(D-17), 203(b)(2)(E-12), | ||||||
15 | 203(c)(2)(G-12), or 203(d)(2)(D-7), but not to exceed | ||||||
16 | the amount of that addition modification, and
(ii) any | ||||||
17 | income from intangible property (net of the deductions | ||||||
18 | allocable thereto) taken into account for the taxable | ||||||
19 | year with respect to a transaction with a taxpayer that | ||||||
20 | is required to make an addition modification with | ||||||
21 | respect to such transaction under Section | ||||||
22 | 203(a)(2)(D-18), 203(b)(2)(E-13), 203(c)(2)(G-13), or | ||||||
23 | 203(d)(2)(D-8), but not to exceed the amount of that | ||||||
24 | addition modification; | ||||||
25 | (DD) An amount equal to the interest income taken | ||||||
26 | into account for the taxable year (net of the |
| |||||||
| |||||||
1 | deductions allocable thereto) with respect to | ||||||
2 | transactions with a foreign person who would be a | ||||||
3 | member of the taxpayer's unitary business group but for | ||||||
4 | the fact that the foreign person's business activity | ||||||
5 | outside the United States is 80% or more of that | ||||||
6 | person's total business activity, but not to exceed the | ||||||
7 | addition modification required to be made for the same | ||||||
8 | taxable year under Section 203(a)(2)(D-17) for | ||||||
9 | interest paid, accrued, or incurred, directly or | ||||||
10 | indirectly, to the same foreign person; and | ||||||
11 | (EE) An amount equal to the income from intangible | ||||||
12 | property taken into account for the taxable year (net | ||||||
13 | of the deductions allocable thereto) with respect to | ||||||
14 | transactions with a foreign person who would be a | ||||||
15 | member of the taxpayer's unitary business group but for | ||||||
16 | the fact that the foreign person's business activity | ||||||
17 | outside the United States is 80% or more of that | ||||||
18 | person's total business activity, but not to exceed the | ||||||
19 | addition modification required to be made for the same | ||||||
20 | taxable year under Section 203(a)(2)(D-18) for | ||||||
21 | intangible expenses and costs paid, accrued, or | ||||||
22 | incurred, directly or indirectly, to the same foreign | ||||||
23 | person.
| ||||||
24 | (b) Corporations.
| ||||||
25 | (1) In general. In the case of a corporation, base |
| |||||||
| |||||||
1 | income means an
amount equal to the taxpayer's taxable | ||||||
2 | income for the taxable year as
modified by paragraph (2).
| ||||||
3 | (2) Modifications. The taxable income referred to in | ||||||
4 | paragraph (1)
shall be modified by adding thereto the sum | ||||||
5 | of the following amounts:
| ||||||
6 | (A) An amount equal to all amounts paid or accrued | ||||||
7 | to the taxpayer
as interest and all distributions | ||||||
8 | received from regulated investment
companies during | ||||||
9 | the taxable year to the extent excluded from gross
| ||||||
10 | income in the computation of taxable income;
| ||||||
11 | (B) An amount equal to the amount of tax imposed by | ||||||
12 | this Act to the
extent deducted from gross income in | ||||||
13 | the computation of taxable income
for the taxable year;
| ||||||
14 | (C) In the case of a regulated investment company, | ||||||
15 | an amount equal to
the excess of (i) the net long-term | ||||||
16 | capital gain for the taxable year, over
(ii) the amount | ||||||
17 | of the capital gain dividends designated as such in | ||||||
18 | accordance
with Section 852(b)(3)(C) of the Internal | ||||||
19 | Revenue Code and any amount
designated under Section | ||||||
20 | 852(b)(3)(D) of the Internal Revenue Code,
| ||||||
21 | attributable to the taxable year (this amendatory Act | ||||||
22 | of 1995
(Public Act 89-89) is declarative of existing | ||||||
23 | law and is not a new
enactment);
| ||||||
24 | (D) The amount of any net operating loss deduction | ||||||
25 | taken in arriving
at taxable income, other than a net | ||||||
26 | operating loss carried forward from a
taxable year |
| |||||||
| |||||||
1 | ending prior to December 31, 1986;
| ||||||
2 | (E) For taxable years in which a net operating loss | ||||||
3 | carryback or
carryforward from a taxable year ending | ||||||
4 | prior to December 31, 1986 is an
element of taxable | ||||||
5 | income under paragraph (1) of subsection (e) or
| ||||||
6 | subparagraph (E) of paragraph (2) of subsection (e), | ||||||
7 | the amount by which
addition modifications other than | ||||||
8 | those provided by this subparagraph (E)
exceeded | ||||||
9 | subtraction modifications in such earlier taxable | ||||||
10 | year, with the
following limitations applied in the | ||||||
11 | order that they are listed:
| ||||||
12 | (i) the addition modification relating to the | ||||||
13 | net operating loss
carried back or forward to the | ||||||
14 | taxable year from any taxable year ending
prior to | ||||||
15 | December 31, 1986 shall be reduced by the amount of | ||||||
16 | addition
modification under this subparagraph (E) | ||||||
17 | which related to that net operating
loss and which | ||||||
18 | was taken into account in calculating the base | ||||||
19 | income of an
earlier taxable year, and
| ||||||
20 | (ii) the addition modification relating to the | ||||||
21 | net operating loss
carried back or forward to the | ||||||
22 | taxable year from any taxable year ending
prior to | ||||||
23 | December 31, 1986 shall not exceed the amount of | ||||||
24 | such carryback or
carryforward;
| ||||||
25 | For taxable years in which there is a net operating | ||||||
26 | loss carryback or
carryforward from more than one other |
| |||||||
| |||||||
1 | taxable year ending prior to December
31, 1986, the | ||||||
2 | addition modification provided in this subparagraph | ||||||
3 | (E) shall
be the sum of the amounts computed | ||||||
4 | independently under the preceding
provisions of this | ||||||
5 | subparagraph (E) for each such taxable year;
| ||||||
6 | (E-5) For taxable years ending after December 31, | ||||||
7 | 1997, an
amount equal to any eligible remediation costs | ||||||
8 | that the corporation
deducted in computing adjusted | ||||||
9 | gross income and for which the
corporation claims a | ||||||
10 | credit under subsection (l) of Section 201;
| ||||||
11 | (E-10) For taxable years 2001 and thereafter, an | ||||||
12 | amount equal to the
bonus depreciation deduction taken | ||||||
13 | on the taxpayer's federal income tax return for the | ||||||
14 | taxable
year under subsection (k) of Section 168 of the | ||||||
15 | Internal Revenue Code . For taxable years 2008 and
| ||||||
16 | thereafter, this subparagraph does not apply to bonus | ||||||
17 | depreciation deductions taken
for health information | ||||||
18 | technology on the taxpayer's federal income tax return | ||||||
19 | for the
taxable year under subsection (k) of Section | ||||||
20 | 168 of the Internal Revenue Code. "Health information | ||||||
21 | technology" means
information technology hardware or | ||||||
22 | software that is used primarily for the electronic
| ||||||
23 | creation, maintenance, and exchange of medical care | ||||||
24 | information to improve
the quality or efficiency of | ||||||
25 | medical care ; and
| ||||||
26 | (E-11) If the taxpayer sells, transfers, abandons, |
| |||||||
| |||||||
1 | or otherwise disposes of property for which the | ||||||
2 | taxpayer was required in any taxable year to
make an | ||||||
3 | addition modification under subparagraph (E-10), then | ||||||
4 | an amount equal
to the aggregate amount of the | ||||||
5 | deductions taken in all taxable
years under | ||||||
6 | subparagraph (T) with respect to that property.
| ||||||
7 | If the taxpayer continues to own property through | ||||||
8 | the last day of the last tax year for which the | ||||||
9 | taxpayer may claim a depreciation deduction for | ||||||
10 | federal income tax purposes and for which the taxpayer | ||||||
11 | was allowed in any taxable year to make a subtraction | ||||||
12 | modification under subparagraph (T), then an amount | ||||||
13 | equal to that subtraction modification.
| ||||||
14 | The taxpayer is required to make the addition | ||||||
15 | modification under this
subparagraph
only once with | ||||||
16 | respect to any one piece of property;
| ||||||
17 | (E-12) For taxable years ending on or after | ||||||
18 | December 31, 2004, an amount equal to the amount | ||||||
19 | otherwise allowed as a deduction in computing base | ||||||
20 | income for interest paid, accrued, or incurred, | ||||||
21 | directly or indirectly, to a foreign person who would | ||||||
22 | be a member of the same unitary business group but for | ||||||
23 | the fact the foreign person's business activity | ||||||
24 | outside the United States is 80% or more of the foreign | ||||||
25 | person's total business activity. The addition | ||||||
26 | modification required by this subparagraph shall be |
| |||||||
| |||||||
1 | reduced to the extent that dividends were included in | ||||||
2 | base income of the unitary group for the same taxable | ||||||
3 | year and received by the taxpayer or by a member of the | ||||||
4 | taxpayer's unitary business group (including amounts | ||||||
5 | included in gross income pursuant to Sections 951 | ||||||
6 | through 964 of the Internal Revenue Code and amounts | ||||||
7 | included in gross income under Section 78 of the | ||||||
8 | Internal Revenue Code) with respect to the stock of the | ||||||
9 | same person to whom the interest was paid, accrued, or | ||||||
10 | incurred.
| ||||||
11 | This paragraph shall not apply to the following:
| ||||||
12 | (i) an item of interest paid, accrued, or | ||||||
13 | incurred, directly or indirectly, to a foreign | ||||||
14 | person who is subject in a foreign country or | ||||||
15 | state, other than a state which requires mandatory | ||||||
16 | unitary reporting, to a tax on or measured by net | ||||||
17 | income with respect to such interest; or | ||||||
18 | (ii) an item of interest paid, accrued, or | ||||||
19 | incurred, directly or indirectly, to a foreign | ||||||
20 | person if the taxpayer can establish, based on a | ||||||
21 | preponderance of the evidence, both of the | ||||||
22 | following: | ||||||
23 | (a) the foreign person, during the same | ||||||
24 | taxable year, paid, accrued, or incurred, the | ||||||
25 | interest to a person that is not a related | ||||||
26 | member, and |
| |||||||
| |||||||
1 | (b) the transaction giving rise to the | ||||||
2 | interest expense between the taxpayer and the | ||||||
3 | foreign person did not have as a principal | ||||||
4 | purpose the avoidance of Illinois income tax, | ||||||
5 | and is paid pursuant to a contract or agreement | ||||||
6 | that reflects an arm's-length interest rate | ||||||
7 | and terms; or
| ||||||
8 | (iii) the taxpayer can establish, based on | ||||||
9 | clear and convincing evidence, that the interest | ||||||
10 | paid, accrued, or incurred relates to a contract or | ||||||
11 | agreement entered into at arm's-length rates and | ||||||
12 | terms and the principal purpose for the payment is | ||||||
13 | not federal or Illinois tax avoidance; or
| ||||||
14 | (iv) an item of interest paid, accrued, or | ||||||
15 | incurred, directly or indirectly, to a foreign | ||||||
16 | person if the taxpayer establishes by clear and | ||||||
17 | convincing evidence that the adjustments are | ||||||
18 | unreasonable; or if the taxpayer and the Director | ||||||
19 | agree in writing to the application or use of an | ||||||
20 | alternative method of apportionment under Section | ||||||
21 | 304(f).
| ||||||
22 | Nothing in this subsection shall preclude the | ||||||
23 | Director from making any other adjustment | ||||||
24 | otherwise allowed under Section 404 of this Act for | ||||||
25 | any tax year beginning after the effective date of | ||||||
26 | this amendment provided such adjustment is made |
| |||||||
| |||||||
1 | pursuant to regulation adopted by the Department | ||||||
2 | and such regulations provide methods and standards | ||||||
3 | by which the Department will utilize its authority | ||||||
4 | under Section 404 of this Act;
| ||||||
5 | (E-13) For taxable years ending on or after | ||||||
6 | December 31, 2004, an amount equal to the amount of | ||||||
7 | intangible expenses and costs otherwise allowed as a | ||||||
8 | deduction in computing base income, and that were paid, | ||||||
9 | accrued, or incurred, directly or indirectly, to a | ||||||
10 | foreign person who would be a member of the same | ||||||
11 | unitary business group but for the fact that the | ||||||
12 | foreign person's business activity outside the United | ||||||
13 | States is 80% or more of that person's total business | ||||||
14 | activity. The addition modification required by this | ||||||
15 | subparagraph shall be reduced to the extent that | ||||||
16 | dividends were included in base income of the unitary | ||||||
17 | group for the same taxable year and received by the | ||||||
18 | taxpayer or by a member of the taxpayer's unitary | ||||||
19 | business group (including amounts included in gross | ||||||
20 | income pursuant to Sections 951 through 964 of the | ||||||
21 | Internal Revenue Code and amounts included in gross | ||||||
22 | income under Section 78 of the Internal Revenue Code) | ||||||
23 | with respect to the stock of the same person to whom | ||||||
24 | the intangible expenses and costs were directly or | ||||||
25 | indirectly paid, incurred, or accrued. The preceding | ||||||
26 | sentence shall not apply to the extent that the same |
| |||||||
| |||||||
1 | dividends caused a reduction to the addition | ||||||
2 | modification required under Section 203(b)(2)(E-12) of | ||||||
3 | this Act.
As used in this subparagraph, the term | ||||||
4 | "intangible expenses and costs" includes (1) expenses, | ||||||
5 | losses, and costs for, or related to, the direct or | ||||||
6 | indirect acquisition, use, maintenance or management, | ||||||
7 | ownership, sale, exchange, or any other disposition of | ||||||
8 | intangible property; (2) losses incurred, directly or | ||||||
9 | indirectly, from factoring transactions or discounting | ||||||
10 | transactions; (3) royalty, patent, technical, and | ||||||
11 | copyright fees; (4) licensing fees; and (5) other | ||||||
12 | similar expenses and costs.
For purposes of this | ||||||
13 | subparagraph, "intangible property" includes patents, | ||||||
14 | patent applications, trade names, trademarks, service | ||||||
15 | marks, copyrights, mask works, trade secrets, and | ||||||
16 | 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 |
| |||||||
| |||||||
1 | indirectly, if the taxpayer can establish, based | ||||||
2 | on a preponderance of the evidence, both of the | ||||||
3 | following: | ||||||
4 | (a) the foreign person during the same | ||||||
5 | taxable year paid, accrued, or incurred, the | ||||||
6 | intangible expense or cost to a person that is | ||||||
7 | not a related member, and | ||||||
8 | (b) the transaction giving rise to the | ||||||
9 | intangible expense or cost between the | ||||||
10 | taxpayer and the foreign person did not have as | ||||||
11 | a principal purpose the avoidance of Illinois | ||||||
12 | income tax, and is paid pursuant to a contract | ||||||
13 | or agreement that reflects arm's-length terms; | ||||||
14 | or | ||||||
15 | (iii) any item of intangible expense or cost | ||||||
16 | paid, accrued, or incurred, directly or | ||||||
17 | indirectly, from a transaction with a foreign | ||||||
18 | person if the taxpayer establishes by clear and | ||||||
19 | convincing evidence, that the adjustments are | ||||||
20 | unreasonable; or if the taxpayer and the Director | ||||||
21 | agree in writing to the application or use of an | ||||||
22 | alternative method of apportionment under Section | ||||||
23 | 304(f);
| ||||||
24 | Nothing in this subsection shall preclude the | ||||||
25 | Director from making any other adjustment | ||||||
26 | otherwise allowed under Section 404 of this Act for |
| |||||||
| |||||||
1 | any tax year beginning after the effective date of | ||||||
2 | this amendment provided such adjustment is made | ||||||
3 | pursuant to regulation adopted by the Department | ||||||
4 | and such regulations provide methods and standards | ||||||
5 | by which the Department will utilize its authority | ||||||
6 | under Section 404 of this Act;
| ||||||
7 | and by deducting from the total so obtained the sum of the | ||||||
8 | following
amounts:
| ||||||
9 | (F) An amount equal to the amount of any tax | ||||||
10 | imposed by this Act
which was refunded to the taxpayer | ||||||
11 | and included in such total for the
taxable year;
| ||||||
12 | (G) An amount equal to any amount included in such | ||||||
13 | total under
Section 78 of the Internal Revenue Code;
| ||||||
14 | (H) In the case of a regulated investment company, | ||||||
15 | an amount equal
to the amount of exempt interest | ||||||
16 | dividends as defined in subsection (b)
(5) of Section | ||||||
17 | 852 of the Internal Revenue Code, paid to shareholders
| ||||||
18 | for the taxable year;
| ||||||
19 | (I) With the exception of any amounts subtracted | ||||||
20 | under subparagraph
(J),
an amount equal to the sum of | ||||||
21 | all amounts disallowed as
deductions by (i) Sections | ||||||
22 | 171(a) (2), and 265(a)(2) and amounts disallowed as
| ||||||
23 | interest expense by Section 291(a)(3) of the Internal | ||||||
24 | Revenue Code, as now
or hereafter amended, and all | ||||||
25 | amounts of expenses allocable to interest and
| ||||||
26 | disallowed as deductions by Section 265(a)(1) of the |
| |||||||
| |||||||
1 | Internal Revenue Code,
as now or hereafter amended;
and | ||||||
2 | (ii) for taxable years
ending on or after August 13, | ||||||
3 | 1999, Sections
171(a)(2), 265,
280C, 291(a)(3), and | ||||||
4 | 832(b)(5)(B)(i) of the Internal Revenue Code; the
| ||||||
5 | provisions of this
subparagraph are exempt from the | ||||||
6 | provisions of Section 250;
| ||||||
7 | (J) An amount equal to all amounts included in such | ||||||
8 | total which are
exempt from taxation by this State | ||||||
9 | either by reason of its statutes or
Constitution
or by | ||||||
10 | reason of the Constitution, treaties or statutes of the | ||||||
11 | United States;
provided that, in the case of any | ||||||
12 | statute of this State that exempts income
derived from | ||||||
13 | bonds or other obligations from the tax imposed under | ||||||
14 | this Act,
the amount exempted shall be the interest net | ||||||
15 | of bond premium amortization;
| ||||||
16 | (K) An amount equal to those dividends included in | ||||||
17 | such total
which were paid by a corporation which | ||||||
18 | conducts
business operations in an Enterprise Zone or | ||||||
19 | zones created under
the Illinois Enterprise Zone Act or | ||||||
20 | a River Edge Redevelopment Zone or zones created under | ||||||
21 | the River Edge Redevelopment Zone Act and conducts | ||||||
22 | substantially all of its
operations in an Enterprise | ||||||
23 | Zone or zones or a River Edge Redevelopment Zone or | ||||||
24 | zones. This subparagraph (K) is exempt from the | ||||||
25 | provisions of Section 250;
| ||||||
26 | (L) An amount equal to those dividends included in |
| |||||||
| |||||||
1 | such total that
were paid by a corporation that | ||||||
2 | conducts business operations in a federally
designated | ||||||
3 | Foreign Trade Zone or Sub-Zone and that is designated a | ||||||
4 | High Impact
Business located in Illinois; provided | ||||||
5 | that dividends eligible for the
deduction provided in | ||||||
6 | subparagraph (K) of paragraph 2 of this subsection
| ||||||
7 | shall not be eligible for the deduction provided under | ||||||
8 | this subparagraph
(L);
| ||||||
9 | (M) For any taxpayer that is a financial | ||||||
10 | organization within the meaning
of Section 304(c) of | ||||||
11 | this Act, an amount included in such total as interest
| ||||||
12 | income from a loan or loans made by such taxpayer to a | ||||||
13 | borrower, to the extent
that such a loan is secured by | ||||||
14 | property which is eligible for the Enterprise
Zone | ||||||
15 | Investment Credit or the River Edge Redevelopment Zone | ||||||
16 | Investment Credit. To determine the portion of a loan | ||||||
17 | or loans that is
secured by property eligible for a | ||||||
18 | Section 201(f) investment
credit to the borrower, the | ||||||
19 | entire principal amount of the loan or loans
between | ||||||
20 | the taxpayer and the borrower should be divided into | ||||||
21 | the basis of the
Section 201(f) investment credit | ||||||
22 | property which secures the
loan or loans, using for | ||||||
23 | this purpose the original basis of such property on
the | ||||||
24 | date that it was placed in service in the
Enterprise | ||||||
25 | Zone or the River Edge Redevelopment Zone. The | ||||||
26 | subtraction modification available to taxpayer in any
|
| |||||||
| |||||||
1 | year under this subsection shall be that portion of the | ||||||
2 | total interest paid
by the borrower with respect to | ||||||
3 | such loan attributable to the eligible
property as | ||||||
4 | calculated under the previous sentence. This | ||||||
5 | subparagraph (M) is exempt from the provisions of | ||||||
6 | Section 250;
| ||||||
7 | (M-1) For any taxpayer that is a financial | ||||||
8 | organization within the
meaning of Section 304(c) of | ||||||
9 | this Act, an amount included in such total as
interest | ||||||
10 | income from a loan or loans made by such taxpayer to a | ||||||
11 | borrower,
to the extent that such a loan is secured by | ||||||
12 | property which is eligible for
the High Impact Business | ||||||
13 | Investment Credit. To determine the portion of a
loan | ||||||
14 | or loans that is secured by property eligible for a | ||||||
15 | Section 201(h) investment credit to the borrower, the | ||||||
16 | entire principal amount of
the loan or loans between | ||||||
17 | the taxpayer and the borrower should be divided into
| ||||||
18 | the basis of the Section 201(h) investment credit | ||||||
19 | property which
secures the loan or loans, using for | ||||||
20 | this purpose the original basis of such
property on the | ||||||
21 | date that it was placed in service in a federally | ||||||
22 | designated
Foreign Trade Zone or Sub-Zone located in | ||||||
23 | Illinois. No taxpayer that is
eligible for the | ||||||
24 | deduction provided in subparagraph (M) of paragraph | ||||||
25 | (2) of
this subsection shall be eligible for the | ||||||
26 | deduction provided under this
subparagraph (M-1). The |
| |||||||
| |||||||
1 | subtraction modification available to taxpayers in
any | ||||||
2 | year under this subsection shall be that portion of the | ||||||
3 | total interest
paid by the borrower with respect to | ||||||
4 | such loan attributable to the eligible
property as | ||||||
5 | calculated under the previous sentence;
| ||||||
6 | (N) Two times any contribution made during the | ||||||
7 | taxable year to a
designated zone organization to the | ||||||
8 | extent that the contribution (i)
qualifies as a | ||||||
9 | charitable contribution under subsection (c) of | ||||||
10 | Section 170
of the Internal Revenue Code and (ii) must, | ||||||
11 | by its terms, be used for a
project approved by the | ||||||
12 | Department of Commerce and Economic Opportunity under | ||||||
13 | Section 11 of the Illinois Enterprise Zone Act or under | ||||||
14 | Section 10-10 of the Illinois River Edge Redevelopment | ||||||
15 | Zone Act. This subparagraph (N) is exempt from the | ||||||
16 | provisions of Section 250;
| ||||||
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, |
| |||||||
| |||||||
1 | dividends
received or deemed received or paid or deemed | ||||||
2 | paid under Sections 951 through
964 of the Internal | ||||||
3 | Revenue Code, exceed the amount of the modification
| ||||||
4 | provided under subparagraph (G) of paragraph (2) of | ||||||
5 | this subsection (b) which
is related to such dividends; | ||||||
6 | plus (ii) 100% of the amount by which dividends,
| ||||||
7 | included in taxable income and received, including, | ||||||
8 | for taxable years ending on
or after December 31, 1988, | ||||||
9 | dividends received or deemed received or paid or
deemed | ||||||
10 | paid under Sections 951 through 964 of the Internal | ||||||
11 | Revenue Code, from
any such corporation specified in | ||||||
12 | clause (i) that would but for the provisions
of Section | ||||||
13 | 1504 (b) (3) of the Internal Revenue Code be treated as | ||||||
14 | a member of
the affiliated group which includes the | ||||||
15 | dividend recipient, exceed the amount
of the | ||||||
16 | modification provided under subparagraph (G) of | ||||||
17 | paragraph (2) of this
subsection (b) which is related | ||||||
18 | to such dividends;
| ||||||
19 | (P) An amount equal to any contribution made to a | ||||||
20 | job training project
established pursuant to the Tax | ||||||
21 | Increment Allocation Redevelopment Act;
| ||||||
22 | (Q) An amount equal to the amount of the deduction | ||||||
23 | used to compute the
federal income tax credit for | ||||||
24 | restoration of substantial amounts held under
claim of | ||||||
25 | right for the taxable year pursuant to Section 1341 of | ||||||
26 | the
Internal Revenue Code of 1986;
|
| |||||||
| |||||||
1 | (R) On and after July 20, 1999, in the case of an | ||||||
2 | attorney-in-fact with respect to whom an
interinsurer | ||||||
3 | or a reciprocal insurer has made the election under | ||||||
4 | Section 835 of
the Internal Revenue Code, 26 U.S.C. | ||||||
5 | 835, an amount equal to the excess, if
any, of the | ||||||
6 | amounts paid or incurred by that interinsurer or | ||||||
7 | reciprocal insurer
in the taxable year to the | ||||||
8 | attorney-in-fact over the deduction allowed to that
| ||||||
9 | interinsurer or reciprocal insurer with respect to the | ||||||
10 | attorney-in-fact under
Section 835(b) of the Internal | ||||||
11 | Revenue Code for the taxable year; the provisions of | ||||||
12 | this subparagraph are exempt from the provisions of | ||||||
13 | Section 250;
| ||||||
14 | (S) For taxable years ending on or after December | ||||||
15 | 31, 1997, in the
case of a Subchapter
S corporation, an | ||||||
16 | amount equal to all amounts of income allocable to a
| ||||||
17 | shareholder subject to the Personal Property Tax | ||||||
18 | Replacement Income Tax imposed
by subsections (c) and | ||||||
19 | (d) of Section 201 of this Act, including amounts
| ||||||
20 | allocable to organizations exempt from federal income | ||||||
21 | tax by reason of Section
501(a) of the Internal Revenue | ||||||
22 | Code. This subparagraph (S) is exempt from
the | ||||||
23 | provisions of Section 250;
| ||||||
24 | (T) For taxable years 2001 and thereafter, for the | ||||||
25 | taxable year in
which the bonus depreciation deduction
| ||||||
26 | is taken on the taxpayer's federal income tax return |
| |||||||
| |||||||
1 | under
subsection (k) of Section 168 of the Internal | ||||||
2 | Revenue Code and for each
applicable taxable year | ||||||
3 | thereafter, an amount equal to "x", where:
| ||||||
4 | (1) "y" equals the amount of the depreciation | ||||||
5 | deduction taken for the
taxable year
on the | ||||||
6 | taxpayer's federal income tax return on property | ||||||
7 | for which the bonus
depreciation deduction
was | ||||||
8 | taken in any year under subsection (k) of Section | ||||||
9 | 168 of the Internal
Revenue Code, but not including | ||||||
10 | the bonus depreciation deduction;
| ||||||
11 | (2) for taxable years ending on or before | ||||||
12 | December 31, 2005, "x" equals "y" multiplied by 30 | ||||||
13 | and then divided by 70 (or "y"
multiplied by | ||||||
14 | 0.429); and | ||||||
15 | (3) for taxable years ending after December | ||||||
16 | 31, 2005: | ||||||
17 | (i) for property on which a bonus | ||||||
18 | depreciation deduction of 30% of the adjusted | ||||||
19 | basis was taken, "x" equals "y" multiplied by | ||||||
20 | 30 and then divided by 70 (or "y"
multiplied by | ||||||
21 | 0.429); and | ||||||
22 | (ii) for property on which a bonus | ||||||
23 | depreciation deduction of 50% of the adjusted | ||||||
24 | basis was taken, "x" equals "y" multiplied by | ||||||
25 | 1.0.
| ||||||
26 | The aggregate amount deducted under this |
| |||||||
| |||||||
1 | subparagraph in all taxable
years for any one piece of | ||||||
2 | property may not exceed the amount of the bonus
| ||||||
3 | depreciation deduction
taken on that property on the | ||||||
4 | taxpayer's federal income tax return under
subsection | ||||||
5 | (k) of Section 168 of the Internal Revenue Code. This | ||||||
6 | subparagraph (T) is exempt from the provisions of | ||||||
7 | Section 250;
| ||||||
8 | (U) If the taxpayer sells, transfers, abandons, or | ||||||
9 | otherwise disposes of
property for which the taxpayer | ||||||
10 | was required in any taxable year to make an
addition | ||||||
11 | modification under subparagraph (E-10), then an amount | ||||||
12 | equal to that
addition modification.
| ||||||
13 | If the taxpayer continues to own property through | ||||||
14 | the last day of the last tax year for which the | ||||||
15 | taxpayer may claim a depreciation deduction for | ||||||
16 | federal income tax purposes and for which the taxpayer | ||||||
17 | was required in any taxable year to make an addition | ||||||
18 | modification under subparagraph (E-10), then an amount | ||||||
19 | equal to that addition modification.
| ||||||
20 | The taxpayer is allowed to take the deduction under | ||||||
21 | this subparagraph
only once with respect to any one | ||||||
22 | piece of property. | ||||||
23 | This subparagraph (U) is exempt from the | ||||||
24 | provisions of Section 250;
| ||||||
25 | (V) The amount of: (i) any interest income (net of | ||||||
26 | the deductions allocable thereto) taken into account |
| |||||||
| |||||||
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 | (W) 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 that 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(b)(2)(E-12) for | ||||||
25 | interest paid, accrued, or incurred, directly or | ||||||
26 | indirectly, to the same foreign person; and
|
| |||||||
| |||||||
1 | (X) An amount equal to the income from intangible | ||||||
2 | property taken into account for the taxable year (net | ||||||
3 | of the deductions allocable thereto) with respect to | ||||||
4 | transactions with a foreign person who would be a | ||||||
5 | member of the taxpayer's unitary business group but for | ||||||
6 | the fact that the foreign person's business activity | ||||||
7 | outside the United States is 80% or more of that | ||||||
8 | person's total business activity, but not to exceed the | ||||||
9 | addition modification required to be made for the same | ||||||
10 | taxable year under Section 203(b)(2)(E-13) for | ||||||
11 | intangible expenses and costs paid, accrued, or | ||||||
12 | incurred, directly or indirectly, to the same foreign | ||||||
13 | person.
| ||||||
14 | (3) Special rule. For purposes of paragraph (2) (A), | ||||||
15 | "gross income"
in the case of a life insurance company, for | ||||||
16 | tax years ending on and after
December 31, 1994,
shall mean | ||||||
17 | the gross investment income for the taxable year.
| ||||||
18 | (c) Trusts and estates.
| ||||||
19 | (1) In general. In the case of a trust or estate, base | ||||||
20 | income means
an amount equal to the taxpayer's taxable | ||||||
21 | income for the taxable year as
modified by paragraph (2).
| ||||||
22 | (2) Modifications. Subject to the provisions of | ||||||
23 | paragraph (3), the
taxable income referred to in paragraph | ||||||
24 | (1) shall be modified by adding
thereto the sum of the | ||||||
25 | following amounts:
|
| |||||||
| |||||||
1 | (A) An amount equal to all amounts paid or accrued | ||||||
2 | to the taxpayer
as interest or dividends during the | ||||||
3 | taxable year to the extent excluded
from gross income | ||||||
4 | in the computation of taxable income;
| ||||||
5 | (B) In the case of (i) an estate, $600; (ii) a | ||||||
6 | trust which, under
its governing instrument, is | ||||||
7 | required to distribute all of its income
currently, | ||||||
8 | $300; and (iii) any other trust, $100, but in each such | ||||||
9 | case,
only to the extent such amount was deducted in | ||||||
10 | the computation of
taxable income;
| ||||||
11 | (C) An amount equal to the amount of tax imposed by | ||||||
12 | this Act to the
extent deducted from gross income in | ||||||
13 | the computation of taxable income
for the taxable year;
| ||||||
14 | (D) The amount of any net operating loss deduction | ||||||
15 | taken in arriving at
taxable income, other than a net | ||||||
16 | operating loss carried forward from a
taxable year | ||||||
17 | ending prior to December 31, 1986;
| ||||||
18 | (E) For taxable years in which a net operating loss | ||||||
19 | carryback or
carryforward from a taxable year ending | ||||||
20 | prior to December 31, 1986 is an
element of taxable | ||||||
21 | income under paragraph (1) of subsection (e) or | ||||||
22 | subparagraph
(E) of paragraph (2) of subsection (e), | ||||||
23 | the amount by which addition
modifications other than | ||||||
24 | those provided by this subparagraph (E) exceeded
| ||||||
25 | subtraction modifications in such taxable year, with | ||||||
26 | the following limitations
applied in the order that |
| |||||||
| |||||||
1 | they are listed:
| ||||||
2 | (i) the addition modification relating to the | ||||||
3 | net operating loss
carried back or forward to the | ||||||
4 | taxable year from any taxable year ending
prior to | ||||||
5 | December 31, 1986 shall be reduced by the amount of | ||||||
6 | addition
modification under this subparagraph (E) | ||||||
7 | which related to that net
operating loss and which | ||||||
8 | was taken into account in calculating the base
| ||||||
9 | income of an earlier taxable year, and
| ||||||
10 | (ii) the addition modification relating to the | ||||||
11 | net operating loss
carried back or forward to the | ||||||
12 | taxable year from any taxable year ending
prior to | ||||||
13 | December 31, 1986 shall not exceed the amount of | ||||||
14 | such carryback or
carryforward;
| ||||||
15 | For taxable years in which there is a net operating | ||||||
16 | loss carryback or
carryforward from more than one other | ||||||
17 | taxable year ending prior to December
31, 1986, the | ||||||
18 | addition modification provided in this subparagraph | ||||||
19 | (E) shall
be the sum of the amounts computed | ||||||
20 | independently under the preceding
provisions of this | ||||||
21 | subparagraph (E) for each such taxable year;
| ||||||
22 | (F) For taxable years ending on or after January 1, | ||||||
23 | 1989, an amount
equal to the tax deducted pursuant to | ||||||
24 | Section 164 of the Internal Revenue
Code if the trust | ||||||
25 | or estate is claiming the same tax for purposes of the
| ||||||
26 | Illinois foreign tax credit under Section 601 of this |
| |||||||
| |||||||
1 | Act;
| ||||||
2 | (G) An amount equal to the amount of the capital | ||||||
3 | gain deduction
allowable under the Internal Revenue | ||||||
4 | Code, to the extent deducted from
gross income in the | ||||||
5 | computation of taxable income;
| ||||||
6 | (G-5) For taxable years ending after December 31, | ||||||
7 | 1997, an
amount equal to any eligible remediation costs | ||||||
8 | that the trust or estate
deducted in computing adjusted | ||||||
9 | gross income and for which the trust
or estate claims a | ||||||
10 | credit under subsection (l) of Section 201;
| ||||||
11 | (G-10) For taxable years 2001 and thereafter, an | ||||||
12 | amount equal to the
bonus depreciation deduction taken | ||||||
13 | on the taxpayer's federal income tax return for the | ||||||
14 | taxable
year under subsection (k) of Section 168 of the | ||||||
15 | Internal Revenue Code; and
| ||||||
16 | (G-11) If the taxpayer sells, transfers, abandons, | ||||||
17 | or otherwise disposes of property for which the | ||||||
18 | taxpayer was required in any taxable year to
make an | ||||||
19 | addition modification under subparagraph (G-10), then | ||||||
20 | an amount equal
to the aggregate amount of the | ||||||
21 | deductions taken in all taxable
years under | ||||||
22 | subparagraph (R) with respect to that property.
| ||||||
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 |
| |||||||
| |||||||
1 | was allowed in any taxable year to make a subtraction | ||||||
2 | modification under subparagraph (R), then an amount | ||||||
3 | equal to that subtraction modification.
| ||||||
4 | The taxpayer is required to make the addition | ||||||
5 | modification under this
subparagraph
only once with | ||||||
6 | respect to any one piece of property;
| ||||||
7 | (G-12) For taxable years ending on or after | ||||||
8 | December 31, 2004, an amount equal to the amount | ||||||
9 | otherwise allowed as a deduction in computing base | ||||||
10 | income for interest paid, accrued, or incurred, | ||||||
11 | directly or indirectly, to a foreign person who would | ||||||
12 | be a member of the same unitary business group but for | ||||||
13 | the fact that the foreign person's business activity | ||||||
14 | outside the United States is 80% or more of the foreign | ||||||
15 | person's total business activity. The addition | ||||||
16 | modification required by this subparagraph shall be | ||||||
17 | reduced to the extent that dividends were included in | ||||||
18 | base income of the unitary group for the same taxable | ||||||
19 | year and received by the taxpayer or by a member of the | ||||||
20 | taxpayer's unitary business group (including amounts | ||||||
21 | included in gross income pursuant to Sections 951 | ||||||
22 | through 964 of the Internal Revenue Code and amounts | ||||||
23 | included in gross income under Section 78 of the | ||||||
24 | Internal Revenue Code) with respect to the stock of the | ||||||
25 | same person to whom the interest was paid, accrued, or | ||||||
26 | incurred.
|
| |||||||
| |||||||
1 | This paragraph shall not apply to the following:
| ||||||
2 | (i) an item of interest paid, accrued, or | ||||||
3 | incurred, directly or indirectly, to a foreign | ||||||
4 | person who is subject in a foreign country or | ||||||
5 | state, other than a state which requires mandatory | ||||||
6 | unitary reporting, to a tax on or measured by net | ||||||
7 | income with respect to such interest; or | ||||||
8 | (ii) an item of interest paid, accrued, or | ||||||
9 | incurred, directly or indirectly, to a foreign | ||||||
10 | person if the taxpayer can establish, based on a | ||||||
11 | preponderance of the evidence, both of the | ||||||
12 | following: | ||||||
13 | (a) the foreign person, during the same | ||||||
14 | taxable year, paid, accrued, or incurred, the | ||||||
15 | interest to a person that is not a related | ||||||
16 | member, and | ||||||
17 | (b) the transaction giving rise to the | ||||||
18 | interest expense between the taxpayer and the | ||||||
19 | foreign person did not have as a principal | ||||||
20 | purpose the avoidance of Illinois income tax, | ||||||
21 | and is paid pursuant to a contract or agreement | ||||||
22 | that reflects an arm's-length interest rate | ||||||
23 | and terms; or
| ||||||
24 | (iii) the taxpayer can establish, based on | ||||||
25 | clear and convincing evidence, that the interest | ||||||
26 | paid, accrued, or incurred relates to a contract or |
| |||||||
| |||||||
1 | agreement entered into at arm's-length rates and | ||||||
2 | terms and the principal purpose for the payment is | ||||||
3 | not federal or Illinois tax avoidance; or
| ||||||
4 | (iv) an item of interest paid, accrued, or | ||||||
5 | incurred, directly or indirectly, to a foreign | ||||||
6 | person if the taxpayer establishes by clear and | ||||||
7 | convincing evidence that the adjustments are | ||||||
8 | unreasonable; or if the taxpayer and the Director | ||||||
9 | agree in writing to the application or use of an | ||||||
10 | alternative method of apportionment under Section | ||||||
11 | 304(f).
| ||||||
12 | Nothing in this subsection shall preclude the | ||||||
13 | Director from making any other adjustment | ||||||
14 | otherwise allowed under Section 404 of this Act for | ||||||
15 | any tax year beginning after the effective date of | ||||||
16 | this amendment provided such adjustment is made | ||||||
17 | pursuant to regulation adopted by the Department | ||||||
18 | and such regulations provide methods and standards | ||||||
19 | by which the Department will utilize its authority | ||||||
20 | under Section 404 of this Act;
| ||||||
21 | (G-13) For taxable years ending on or after | ||||||
22 | December 31, 2004, an amount equal to the amount of | ||||||
23 | intangible expenses and costs otherwise allowed as a | ||||||
24 | deduction in computing base income, and that were paid, | ||||||
25 | accrued, or incurred, directly or indirectly, to a | ||||||
26 | foreign person who would be a member of the same |
| |||||||
| |||||||
1 | unitary business group but for the fact that the | ||||||
2 | foreign person's business activity outside the United | ||||||
3 | States is 80% or more of that person's total business | ||||||
4 | activity. The addition modification required by this | ||||||
5 | subparagraph shall be reduced to the extent that | ||||||
6 | dividends were included in base income of the unitary | ||||||
7 | group for the same taxable year and received by the | ||||||
8 | taxpayer or by a member of the taxpayer's unitary | ||||||
9 | business group (including amounts included in gross | ||||||
10 | income pursuant to Sections 951 through 964 of the | ||||||
11 | Internal Revenue Code and amounts included in gross | ||||||
12 | income under Section 78 of the Internal Revenue Code) | ||||||
13 | with respect to the stock of the same person to whom | ||||||
14 | the intangible expenses and costs were directly or | ||||||
15 | indirectly paid, incurred, or accrued. The preceding | ||||||
16 | sentence shall not apply to the extent that the same | ||||||
17 | dividends caused a reduction to the addition | ||||||
18 | modification required under Section 203(c)(2)(G-12) of | ||||||
19 | this Act. As used in this subparagraph, the term | ||||||
20 | "intangible expenses and costs" includes: (1) | ||||||
21 | expenses, losses, and costs for or related to the | ||||||
22 | direct or indirect acquisition, use, maintenance or | ||||||
23 | management, ownership, sale, exchange, or any other | ||||||
24 | disposition of intangible property; (2) losses | ||||||
25 | incurred, directly or indirectly, from factoring | ||||||
26 | transactions or discounting transactions; (3) royalty, |
| |||||||
| |||||||
1 | patent, technical, and copyright fees; (4) licensing | ||||||
2 | fees; and (5) other similar expenses and costs. For | ||||||
3 | purposes of this subparagraph, "intangible property" | ||||||
4 | includes patents, patent applications, trade names, | ||||||
5 | trademarks, service marks, copyrights, mask works, | ||||||
6 | trade secrets, and similar types of intangible assets. | ||||||
7 | This paragraph shall not apply to the following: | ||||||
8 | (i) any item of intangible expenses or costs | ||||||
9 | paid, accrued, or incurred, directly or | ||||||
10 | indirectly, from a transaction with a foreign | ||||||
11 | person who is subject in a foreign country or | ||||||
12 | state, other than a state which requires mandatory | ||||||
13 | unitary reporting, to a tax on or measured by net | ||||||
14 | income with respect to such item; or | ||||||
15 | (ii) any item of intangible expense or cost | ||||||
16 | paid, accrued, or incurred, directly or | ||||||
17 | indirectly, if the taxpayer can establish, based | ||||||
18 | on a preponderance of the evidence, both of the | ||||||
19 | following: | ||||||
20 | (a) the foreign person during the same | ||||||
21 | taxable year paid, accrued, or incurred, the | ||||||
22 | intangible expense or cost to a person that is | ||||||
23 | not a related member, and | ||||||
24 | (b) the transaction giving rise to the | ||||||
25 | intangible expense or cost between the | ||||||
26 | taxpayer and the foreign person did not have as |
| |||||||
| |||||||
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), |
| |||||||
| |||||||
1 | 402(c), 403(a), 403(b), 406(a), 407(a)
and 408 of the | ||||||
2 | Internal Revenue Code or included in such total as
| ||||||
3 | distributions under the provisions of any retirement | ||||||
4 | or disability plan for
employees of any governmental | ||||||
5 | agency or unit, or retirement payments to
retired | ||||||
6 | partners, which payments are excluded in computing net | ||||||
7 | earnings
from self employment by Section 1402 of the | ||||||
8 | Internal Revenue Code and
regulations adopted pursuant | ||||||
9 | thereto;
| ||||||
10 | (I) The valuation limitation amount;
| ||||||
11 | (J) An amount equal to the amount of any tax | ||||||
12 | imposed by this Act
which was refunded to the taxpayer | ||||||
13 | and included in such total for the
taxable year;
| ||||||
14 | (K) An amount equal to all amounts included in | ||||||
15 | taxable income as
modified by subparagraphs (A), (B), | ||||||
16 | (C), (D), (E), (F) and (G) which
are exempt from | ||||||
17 | taxation by this State either by reason of its statutes | ||||||
18 | or
Constitution
or by reason of the Constitution, | ||||||
19 | treaties or statutes of the United States;
provided | ||||||
20 | that, in the case of any statute of this State that | ||||||
21 | exempts income
derived from bonds or other obligations | ||||||
22 | from the tax imposed under this Act,
the amount | ||||||
23 | exempted shall be the interest net of bond premium | ||||||
24 | amortization;
| ||||||
25 | (L) With the exception of any amounts subtracted | ||||||
26 | under subparagraph
(K),
an amount equal to the sum of |
| |||||||
| |||||||
1 | all amounts disallowed as
deductions by (i) Sections | ||||||
2 | 171(a) (2) and 265(a)(2) of the Internal Revenue
Code, | ||||||
3 | as now or hereafter amended, and all amounts of | ||||||
4 | expenses allocable
to interest and disallowed as | ||||||
5 | deductions by Section 265(1) of the Internal
Revenue | ||||||
6 | Code of 1954, as now or hereafter amended;
and (ii) for | ||||||
7 | taxable years
ending on or after August 13, 1999, | ||||||
8 | Sections
171(a)(2), 265,
280C, and 832(b)(5)(B)(i) of | ||||||
9 | the Internal Revenue Code; the provisions of this
| ||||||
10 | subparagraph are exempt from the provisions of Section | ||||||
11 | 250;
| ||||||
12 | (M) An amount equal to those dividends included in | ||||||
13 | such total
which were paid by a corporation which | ||||||
14 | conducts business operations in an
Enterprise Zone or | ||||||
15 | zones created under the Illinois Enterprise Zone Act or | ||||||
16 | a River Edge Redevelopment Zone or zones created under | ||||||
17 | the River Edge Redevelopment Zone Act and
conducts | ||||||
18 | substantially all of its operations in an Enterprise | ||||||
19 | Zone or Zones or a River Edge Redevelopment Zone or | ||||||
20 | zones. This subparagraph (M) is exempt from the | ||||||
21 | provisions of Section 250;
| ||||||
22 | (N) An amount equal to any contribution made to a | ||||||
23 | job training
project established pursuant to the Tax | ||||||
24 | Increment Allocation
Redevelopment Act;
| ||||||
25 | (O) An amount equal to those dividends included in | ||||||
26 | such total
that were paid by a corporation that |
| |||||||
| |||||||
1 | conducts business operations in a
federally designated | ||||||
2 | Foreign Trade Zone or Sub-Zone and that is designated
a | ||||||
3 | High Impact Business located in Illinois; provided | ||||||
4 | that dividends eligible
for the deduction provided in | ||||||
5 | subparagraph (M) of paragraph (2) of this
subsection | ||||||
6 | shall not be eligible for the deduction provided under | ||||||
7 | this
subparagraph (O);
| ||||||
8 | (P) An amount equal to the amount of the deduction | ||||||
9 | used to compute the
federal income tax credit for | ||||||
10 | restoration of substantial amounts held under
claim of | ||||||
11 | right for the taxable year pursuant to Section 1341 of | ||||||
12 | the
Internal Revenue Code of 1986;
| ||||||
13 | (Q) For taxable year 1999 and thereafter, an amount | ||||||
14 | equal to the
amount of any
(i) distributions, to the | ||||||
15 | extent includible in gross income for
federal income | ||||||
16 | tax purposes, made to the taxpayer because of
his or | ||||||
17 | her status as a victim of
persecution for racial or | ||||||
18 | religious reasons by Nazi Germany or any other Axis
| ||||||
19 | regime or as an heir of the victim and (ii) items
of | ||||||
20 | income, to the extent
includible in gross income for | ||||||
21 | federal income tax purposes, attributable to,
derived | ||||||
22 | from or in any way related to assets stolen from, | ||||||
23 | hidden from, or
otherwise lost to a victim of
| ||||||
24 | persecution for racial or religious reasons by Nazi
| ||||||
25 | Germany or any other Axis regime
immediately prior to, | ||||||
26 | during, and immediately after World War II, including,
|
| |||||||
| |||||||
1 | but
not limited to, interest on the proceeds receivable | ||||||
2 | as insurance
under policies issued to a victim of | ||||||
3 | persecution for racial or religious
reasons by Nazi | ||||||
4 | Germany or any other Axis regime by European insurance
| ||||||
5 | companies
immediately prior to and during World War II;
| ||||||
6 | provided, however, this subtraction from federal | ||||||
7 | adjusted gross income does not
apply to assets acquired | ||||||
8 | with such assets or with the proceeds from the sale of
| ||||||
9 | such assets; provided, further, this paragraph shall | ||||||
10 | only apply to a taxpayer
who was the first recipient of | ||||||
11 | such assets after their recovery and who is a
victim of
| ||||||
12 | persecution for racial or religious reasons
by Nazi | ||||||
13 | Germany or any other Axis regime or as an heir of the | ||||||
14 | victim. The
amount of and the eligibility for any | ||||||
15 | public assistance, benefit, or
similar entitlement is | ||||||
16 | not affected by the inclusion of items (i) and (ii) of
| ||||||
17 | this paragraph in gross income for federal income tax | ||||||
18 | purposes.
This paragraph is exempt from the provisions | ||||||
19 | of Section 250;
| ||||||
20 | (R) For taxable years 2001 and thereafter, for the | ||||||
21 | taxable year in
which the bonus depreciation deduction
| ||||||
22 | is taken on the taxpayer's federal income tax return | ||||||
23 | under
subsection (k) of Section 168 of the Internal | ||||||
24 | Revenue Code and for each
applicable taxable year | ||||||
25 | thereafter, an amount equal to "x", where:
| ||||||
26 | (1) "y" equals the amount of the depreciation |
| |||||||
| |||||||
1 | deduction taken for the
taxable year
on the | ||||||
2 | taxpayer's federal income tax return on property | ||||||
3 | for which the bonus
depreciation deduction
was | ||||||
4 | taken in any year under subsection (k) of Section | ||||||
5 | 168 of the Internal
Revenue Code, but not including | ||||||
6 | the bonus depreciation deduction;
| ||||||
7 | (2) for taxable years ending on or before | ||||||
8 | December 31, 2005, "x" equals "y" multiplied by 30 | ||||||
9 | and then divided by 70 (or "y"
multiplied by | ||||||
10 | 0.429); and | ||||||
11 | (3) for taxable years ending after December | ||||||
12 | 31, 2005: | ||||||
13 | (i) for property on which a bonus | ||||||
14 | depreciation deduction of 30% of the adjusted | ||||||
15 | basis was taken, "x" equals "y" multiplied by | ||||||
16 | 30 and then divided by 70 (or "y"
multiplied by | ||||||
17 | 0.429); and | ||||||
18 | (ii) for property on which a bonus | ||||||
19 | depreciation deduction of 50% of the adjusted | ||||||
20 | basis was taken, "x" equals "y" multiplied by | ||||||
21 | 1.0.
| ||||||
22 | The aggregate amount deducted under this | ||||||
23 | subparagraph in all taxable
years for any one piece of | ||||||
24 | property may not exceed the amount of the bonus
| ||||||
25 | depreciation deduction
taken on that property on the | ||||||
26 | taxpayer's federal income tax return under
subsection |
| |||||||
| |||||||
1 | (k) of Section 168 of the Internal Revenue Code. This | ||||||
2 | subparagraph (R) is exempt from the provisions of | ||||||
3 | Section 250;
| ||||||
4 | (S) If the taxpayer sells, transfers, abandons, or | ||||||
5 | otherwise disposes of
property for which the taxpayer | ||||||
6 | was required in any taxable year to make an
addition | ||||||
7 | modification under subparagraph (G-10), then an amount | ||||||
8 | equal to that
addition modification.
| ||||||
9 | If the taxpayer continues to own property through | ||||||
10 | the last day of the last tax year for which the | ||||||
11 | taxpayer may claim a depreciation deduction for | ||||||
12 | federal income tax purposes and for which the taxpayer | ||||||
13 | was required in any taxable year to make an addition | ||||||
14 | modification under subparagraph (G-10), then an amount | ||||||
15 | equal to that addition modification.
| ||||||
16 | The taxpayer is allowed to take the deduction under | ||||||
17 | this subparagraph
only once with respect to any one | ||||||
18 | piece of property. | ||||||
19 | This subparagraph (S) is exempt from the | ||||||
20 | provisions of Section 250;
| ||||||
21 | (T) The amount of (i) any interest income (net of | ||||||
22 | the deductions allocable thereto) taken into account | ||||||
23 | for the taxable year with respect to a transaction with | ||||||
24 | a taxpayer that is required to make an addition | ||||||
25 | modification with respect to such transaction under | ||||||
26 | Section 203(a)(2)(D-17), 203(b)(2)(E-12), |
| |||||||
| |||||||
1 | 203(c)(2)(G-12), or 203(d)(2)(D-7), but not to exceed | ||||||
2 | the amount of such addition modification and
(ii) any | ||||||
3 | income from intangible property (net of the deductions | ||||||
4 | allocable thereto) taken into account for the taxable | ||||||
5 | year with respect to a transaction with a taxpayer that | ||||||
6 | is required to make an addition modification with | ||||||
7 | respect to such transaction under Section | ||||||
8 | 203(a)(2)(D-18), 203(b)(2)(E-13), 203(c)(2)(G-13), or | ||||||
9 | 203(d)(2)(D-8), but not to exceed the amount of such | ||||||
10 | addition modification;
| ||||||
11 | (U) An amount equal to the interest income taken | ||||||
12 | into account for the taxable year (net of the | ||||||
13 | deductions allocable thereto) with respect to | ||||||
14 | transactions with a foreign person who would be a | ||||||
15 | member of the taxpayer's unitary business group but for | ||||||
16 | the fact the foreign person's business activity | ||||||
17 | outside the United States is 80% or more of that | ||||||
18 | person's total business activity, but not to exceed the | ||||||
19 | addition modification required to be made for the same | ||||||
20 | taxable year under Section 203(c)(2)(G-12) for | ||||||
21 | interest paid, accrued, or incurred, directly or | ||||||
22 | indirectly, to the same foreign person; and
| ||||||
23 | (V) An amount equal to the income from intangible | ||||||
24 | property taken into account for the taxable year (net | ||||||
25 | of the deductions allocable thereto) with respect to | ||||||
26 | transactions with a foreign person who would be a |
| |||||||
| |||||||
1 | member of the taxpayer's unitary business group but for | ||||||
2 | the fact that the foreign person's business activity | ||||||
3 | outside the United States is 80% or more of that | ||||||
4 | person's total business activity, but not to exceed the | ||||||
5 | addition modification required to be made for the same | ||||||
6 | taxable year under Section 203(c)(2)(G-13) for | ||||||
7 | intangible expenses and costs paid, accrued, or | ||||||
8 | incurred, directly or indirectly, to the same foreign | ||||||
9 | person.
| ||||||
10 | (3) Limitation. The amount of any modification | ||||||
11 | otherwise required
under this subsection shall, under | ||||||
12 | regulations prescribed by the
Department, be adjusted by | ||||||
13 | any amounts included therein which were
properly paid, | ||||||
14 | credited, or required to be distributed, or permanently set
| ||||||
15 | aside for charitable purposes pursuant to Internal Revenue | ||||||
16 | Code Section
642(c) during the taxable year.
| ||||||
17 | (d) Partnerships.
| ||||||
18 | (1) In general. In the case of a partnership, base | ||||||
19 | income means an
amount equal to the taxpayer's taxable | ||||||
20 | income for the taxable year as
modified by paragraph (2).
| ||||||
21 | (2) Modifications. The taxable income referred to in | ||||||
22 | paragraph (1)
shall be modified by adding thereto the sum | ||||||
23 | of the following amounts:
| ||||||
24 | (A) An amount equal to all amounts paid or accrued | ||||||
25 | to the taxpayer as
interest or dividends during the |
| |||||||
| |||||||
1 | taxable year to the extent excluded from
gross income | ||||||
2 | in the computation of taxable income;
| ||||||
3 | (B) An amount equal to the amount of tax imposed by | ||||||
4 | this Act to the
extent deducted from gross income for | ||||||
5 | the taxable year;
| ||||||
6 | (C) The amount of deductions allowed to the | ||||||
7 | partnership pursuant to
Section 707 (c) of the Internal | ||||||
8 | Revenue Code in calculating its taxable income;
| ||||||
9 | (D) An amount equal to the amount of the capital | ||||||
10 | gain deduction
allowable under the Internal Revenue | ||||||
11 | Code, to the extent deducted from
gross income in the | ||||||
12 | computation of taxable income;
| ||||||
13 | (D-5) For taxable years 2001 and thereafter, an | ||||||
14 | amount equal to the
bonus depreciation deduction taken | ||||||
15 | on the taxpayer's federal income tax return for the | ||||||
16 | taxable
year under subsection (k) of Section 168 of the | ||||||
17 | Internal Revenue Code;
| ||||||
18 | (D-6) If the taxpayer sells, transfers, abandons, | ||||||
19 | or otherwise disposes of
property for which the | ||||||
20 | taxpayer was required in any taxable year to make an
| ||||||
21 | addition modification under subparagraph (D-5), then | ||||||
22 | an amount equal to the
aggregate amount of the | ||||||
23 | deductions taken in all taxable years
under | ||||||
24 | subparagraph (O) with respect to that property.
| ||||||
25 | If the taxpayer continues to own property through | ||||||
26 | the last day of the last tax year for which the |
| |||||||
| |||||||
1 | taxpayer may claim a depreciation deduction for | ||||||
2 | federal income tax purposes and for which the taxpayer | ||||||
3 | was allowed in any taxable year to make a subtraction | ||||||
4 | modification under subparagraph (O), then an amount | ||||||
5 | equal to that subtraction modification.
| ||||||
6 | The taxpayer is required to make the addition | ||||||
7 | modification under this
subparagraph
only once with | ||||||
8 | respect to any one piece of property;
| ||||||
9 | (D-7) For taxable years ending on or after December | ||||||
10 | 31, 2004, an amount equal to the amount otherwise | ||||||
11 | allowed as a deduction in computing base income for | ||||||
12 | interest paid, accrued, or incurred, directly or | ||||||
13 | indirectly, to a foreign person who would be a member | ||||||
14 | of the same unitary business group but for the fact the | ||||||
15 | foreign person's business activity outside the United | ||||||
16 | States is 80% or more of the foreign person's total | ||||||
17 | business activity. The addition modification required | ||||||
18 | by this subparagraph shall be reduced to the extent | ||||||
19 | that dividends were included in base income of the | ||||||
20 | unitary group for the same taxable year and received by | ||||||
21 | the taxpayer or by a member of the taxpayer's unitary | ||||||
22 | business group (including amounts included in gross | ||||||
23 | income pursuant to Sections 951 through 964 of the | ||||||
24 | Internal Revenue Code and amounts included in gross | ||||||
25 | income under Section 78 of the Internal Revenue Code) | ||||||
26 | with respect to the stock of the same person to whom |
| |||||||
| |||||||
1 | the interest was paid, accrued, or incurred.
| ||||||
2 | This paragraph shall not apply to the following:
| ||||||
3 | (i) an item of interest paid, accrued, or | ||||||
4 | incurred, directly or indirectly, to a foreign | ||||||
5 | person who is subject in a foreign country or | ||||||
6 | state, other than a state which requires mandatory | ||||||
7 | unitary reporting, to a tax on or measured by net | ||||||
8 | income with respect to such interest; or | ||||||
9 | (ii) an item of interest paid, accrued, or | ||||||
10 | incurred, directly or indirectly, to a foreign | ||||||
11 | person if the taxpayer can establish, based on a | ||||||
12 | preponderance of the evidence, both of the | ||||||
13 | following: | ||||||
14 | (a) the foreign person, during the same | ||||||
15 | taxable year, paid, accrued, or incurred, the | ||||||
16 | interest to a person that is not a related | ||||||
17 | member, and | ||||||
18 | (b) the transaction giving rise to the | ||||||
19 | interest expense between the taxpayer and the | ||||||
20 | foreign person did not have as a principal | ||||||
21 | purpose the avoidance of Illinois income tax, | ||||||
22 | and is paid pursuant to a contract or agreement | ||||||
23 | that reflects an arm's-length interest rate | ||||||
24 | and terms; or
| ||||||
25 | (iii) the taxpayer can establish, based on | ||||||
26 | clear and convincing evidence, that the interest |
| |||||||
| |||||||
1 | paid, accrued, or incurred relates to a contract or | ||||||
2 | agreement entered into at arm's-length rates and | ||||||
3 | terms and the principal purpose for the payment is | ||||||
4 | not federal or Illinois tax avoidance; or
| ||||||
5 | (iv) an item of interest paid, accrued, or | ||||||
6 | incurred, directly or indirectly, to 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; and
| ||||||
22 | (D-8) For taxable years ending on or after December | ||||||
23 | 31, 2004, an amount equal to the amount of intangible | ||||||
24 | expenses and costs otherwise allowed as a deduction in | ||||||
25 | computing base income, and that were paid, accrued, or | ||||||
26 | incurred, directly or indirectly, to a foreign person |
| |||||||
| |||||||
1 | who would be a member of the same unitary business | ||||||
2 | group but for the fact that the foreign person's | ||||||
3 | business activity outside the United States is 80% or | ||||||
4 | more of that person's total business activity. The | ||||||
5 | addition modification required by this subparagraph | ||||||
6 | shall be reduced to the extent that dividends were | ||||||
7 | included in base income of the unitary group for the | ||||||
8 | same taxable year and received by the taxpayer or by a | ||||||
9 | member of the taxpayer's unitary business group | ||||||
10 | (including amounts included in gross income pursuant | ||||||
11 | to Sections 951 through 964 of the Internal Revenue | ||||||
12 | Code and amounts included in gross income under Section | ||||||
13 | 78 of the Internal Revenue Code) with respect to the | ||||||
14 | 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 shall not | ||||||
17 | apply to the extent that the same dividends caused a | ||||||
18 | reduction to the addition modification required under | ||||||
19 | Section 203(d)(2)(D-7) 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; |
| |||||||
| |||||||
1 | (3) royalty, patent, technical, and copyright fees; | ||||||
2 | (4) licensing fees; and (5) other similar expenses and | ||||||
3 | costs. For purposes of this subparagraph, "intangible | ||||||
4 | property" includes patents, patent applications, trade | ||||||
5 | names, trademarks, service marks, copyrights, mask | ||||||
6 | works, trade secrets, and similar types of intangible | ||||||
7 | assets; | ||||||
8 | This paragraph shall not apply to the following: | ||||||
9 | (i) any item of intangible expenses or costs | ||||||
10 | paid, accrued, or incurred, directly or | ||||||
11 | indirectly, from a transaction with a foreign | ||||||
12 | person who is subject in a foreign country or | ||||||
13 | state, other than a state which requires mandatory | ||||||
14 | unitary reporting, to a tax on or measured by net | ||||||
15 | income with respect to such item; or | ||||||
16 | (ii) any item of intangible expense or cost | ||||||
17 | paid, accrued, or incurred, directly or | ||||||
18 | indirectly, if the taxpayer can establish, based | ||||||
19 | on a preponderance of the evidence, both of the | ||||||
20 | following: | ||||||
21 | (a) the foreign person during the same | ||||||
22 | taxable year paid, accrued, or incurred, the | ||||||
23 | intangible expense or cost to a person that is | ||||||
24 | not a related member, and | ||||||
25 | (b) the transaction giving rise to the | ||||||
26 | intangible expense or cost between the |
| |||||||
| |||||||
1 | taxpayer and the foreign person did not have as | ||||||
2 | a principal purpose the avoidance of Illinois | ||||||
3 | income tax, and is paid pursuant to a contract | ||||||
4 | or agreement that reflects arm's-length terms; | ||||||
5 | or | ||||||
6 | (iii) any item of intangible expense or cost | ||||||
7 | paid, accrued, or incurred, directly or | ||||||
8 | indirectly, from a transaction with a foreign | ||||||
9 | person if the taxpayer establishes by clear and | ||||||
10 | convincing evidence, that the adjustments are | ||||||
11 | unreasonable; or if the taxpayer and the Director | ||||||
12 | agree in writing to the application or use of an | ||||||
13 | alternative method of apportionment under Section | ||||||
14 | 304(f);
| ||||||
15 | Nothing in this subsection shall preclude the | ||||||
16 | Director from making any other adjustment | ||||||
17 | otherwise allowed under Section 404 of this Act for | ||||||
18 | any tax year beginning after the effective date of | ||||||
19 | this amendment provided such adjustment is made | ||||||
20 | pursuant to regulation adopted by the Department | ||||||
21 | and such regulations provide methods and standards | ||||||
22 | by which the Department will utilize its authority | ||||||
23 | under Section 404 of this Act;
| ||||||
24 | and by deducting from the total so obtained the following | ||||||
25 | amounts:
| ||||||
26 | (E) The valuation limitation amount;
|
| |||||||
| |||||||
1 | (F) 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 | (G) An amount equal to all amounts included in | ||||||
5 | taxable income as
modified by subparagraphs (A), (B), | ||||||
6 | (C) and (D) which are exempt from
taxation by this | ||||||
7 | State either by reason of its statutes or Constitution | ||||||
8 | or
by reason of
the Constitution, treaties or statutes | ||||||
9 | of the United States;
provided that, in the case of any | ||||||
10 | statute of this State that exempts income
derived from | ||||||
11 | bonds or other obligations from the tax imposed under | ||||||
12 | this Act,
the amount exempted shall be the interest net | ||||||
13 | of bond premium amortization;
| ||||||
14 | (H) Any income of the partnership which | ||||||
15 | constitutes personal service
income as defined in | ||||||
16 | Section 1348 (b) (1) of the Internal Revenue Code (as
| ||||||
17 | in effect December 31, 1981) or a reasonable allowance | ||||||
18 | for compensation
paid or accrued for services rendered | ||||||
19 | by partners to the partnership,
whichever is greater;
| ||||||
20 | (I) An amount equal to all amounts of income | ||||||
21 | distributable to an entity
subject to the Personal | ||||||
22 | Property Tax Replacement Income Tax imposed by
| ||||||
23 | subsections (c) and (d) of Section 201 of this Act | ||||||
24 | including amounts
distributable to organizations | ||||||
25 | exempt from federal income tax by reason of
Section | ||||||
26 | 501(a) of the Internal Revenue Code;
|
| |||||||
| |||||||
1 | (J) With the exception of any amounts subtracted | ||||||
2 | under subparagraph
(G),
an amount equal to the sum of | ||||||
3 | all amounts disallowed as deductions
by (i) Sections | ||||||
4 | 171(a) (2), and 265(2) of the Internal Revenue Code of | ||||||
5 | 1954,
as now or hereafter amended, and all amounts of | ||||||
6 | expenses allocable to
interest and disallowed as | ||||||
7 | deductions by Section 265(1) of the Internal
Revenue | ||||||
8 | Code, as now or hereafter amended;
and (ii) for taxable | ||||||
9 | years
ending on or after August 13, 1999, Sections
| ||||||
10 | 171(a)(2), 265,
280C, and 832(b)(5)(B)(i) of the | ||||||
11 | Internal Revenue Code; the provisions of this
| ||||||
12 | subparagraph are exempt from the provisions of Section | ||||||
13 | 250;
| ||||||
14 | (K) An amount equal to those dividends included in | ||||||
15 | such total which were
paid by a corporation which | ||||||
16 | conducts business operations in an Enterprise
Zone or | ||||||
17 | zones created under the Illinois Enterprise Zone Act, | ||||||
18 | enacted by
the 82nd General Assembly, or a River Edge | ||||||
19 | Redevelopment Zone or zones created under the River | ||||||
20 | Edge Redevelopment Zone Act and
conducts substantially | ||||||
21 | all of its operations
in an Enterprise Zone or Zones or | ||||||
22 | from a River Edge Redevelopment Zone or zones. This | ||||||
23 | subparagraph (K) is exempt from the provisions of | ||||||
24 | Section 250;
| ||||||
25 | (L) An amount equal to any contribution made to a | ||||||
26 | job training project
established pursuant to the Real |
| |||||||
| |||||||
1 | Property Tax Increment Allocation
Redevelopment Act;
| ||||||
2 | (M) An amount equal to those dividends included in | ||||||
3 | such total
that were paid by a corporation that | ||||||
4 | conducts business operations in a
federally designated | ||||||
5 | Foreign Trade Zone or Sub-Zone and that is designated a
| ||||||
6 | High Impact Business located in Illinois; provided | ||||||
7 | that dividends eligible
for the deduction provided in | ||||||
8 | subparagraph (K) of paragraph (2) of this
subsection | ||||||
9 | shall not be eligible for the deduction provided under | ||||||
10 | this
subparagraph (M);
| ||||||
11 | (N) An amount equal to the amount of the deduction | ||||||
12 | used to compute the
federal income tax credit for | ||||||
13 | restoration of substantial amounts held under
claim of | ||||||
14 | right for the taxable year pursuant to Section 1341 of | ||||||
15 | the
Internal Revenue Code of 1986;
| ||||||
16 | (O) For taxable years 2001 and thereafter, for the | ||||||
17 | taxable year in
which the bonus depreciation deduction
| ||||||
18 | is taken on the taxpayer's federal income tax return | ||||||
19 | under
subsection (k) of Section 168 of the Internal | ||||||
20 | Revenue Code and for each
applicable taxable year | ||||||
21 | thereafter, an amount equal to "x", where:
| ||||||
22 | (1) "y" equals the amount of the depreciation | ||||||
23 | deduction taken for the
taxable year
on the | ||||||
24 | taxpayer's federal income tax return on property | ||||||
25 | for which the bonus
depreciation deduction
was | ||||||
26 | taken in any year under subsection (k) of Section |
| |||||||
| |||||||
1 | 168 of the Internal
Revenue Code, but not including | ||||||
2 | the bonus depreciation deduction;
| ||||||
3 | (2) for taxable years ending on or before | ||||||
4 | December 31, 2005, "x" equals "y" multiplied by 30 | ||||||
5 | and then divided by 70 (or "y"
multiplied by | ||||||
6 | 0.429); and | ||||||
7 | (3) for taxable years ending after December | ||||||
8 | 31, 2005: | ||||||
9 | (i) for property on which a bonus | ||||||
10 | depreciation deduction of 30% of the adjusted | ||||||
11 | basis was taken, "x" equals "y" multiplied by | ||||||
12 | 30 and then divided by 70 (or "y"
multiplied by | ||||||
13 | 0.429); and | ||||||
14 | (ii) for property on which a bonus | ||||||
15 | depreciation deduction of 50% of the adjusted | ||||||
16 | basis was taken, "x" equals "y" multiplied by | ||||||
17 | 1.0.
| ||||||
18 | The aggregate amount deducted under this | ||||||
19 | subparagraph in all taxable
years for any one piece of | ||||||
20 | property may not exceed the amount of the bonus
| ||||||
21 | depreciation deduction
taken on that property on the | ||||||
22 | taxpayer's federal income tax return under
subsection | ||||||
23 | (k) of Section 168 of the Internal Revenue Code. This | ||||||
24 | subparagraph (O) is exempt from the provisions of | ||||||
25 | Section 250;
| ||||||
26 | (P) If the taxpayer sells, transfers, abandons, or |
| |||||||
| |||||||
1 | otherwise disposes of
property for which the taxpayer | ||||||
2 | was required in any taxable year to make an
addition | ||||||
3 | modification under subparagraph (D-5), then an amount | ||||||
4 | equal to that
addition modification.
| ||||||
5 | If the taxpayer continues to own property through | ||||||
6 | the last day of the last tax year for which the | ||||||
7 | taxpayer may claim a depreciation deduction for | ||||||
8 | federal income tax purposes and for which the taxpayer | ||||||
9 | was required in any taxable year to make an addition | ||||||
10 | modification under subparagraph (D-5), then an amount | ||||||
11 | equal to that addition modification.
| ||||||
12 | The taxpayer is allowed to take the deduction under | ||||||
13 | this subparagraph
only once with respect to any one | ||||||
14 | piece of property. | ||||||
15 | This subparagraph (P) is exempt from the | ||||||
16 | provisions of Section 250;
| ||||||
17 | (Q) The amount of (i) any interest income (net of | ||||||
18 | the deductions allocable thereto) taken into account | ||||||
19 | for the taxable year with respect to a transaction with | ||||||
20 | a taxpayer that is required to make an addition | ||||||
21 | modification with respect to such transaction under | ||||||
22 | Section 203(a)(2)(D-17), 203(b)(2)(E-12), | ||||||
23 | 203(c)(2)(G-12), or 203(d)(2)(D-7), but not to exceed | ||||||
24 | the amount of such addition modification and
(ii) any | ||||||
25 | income from intangible property (net of the deductions | ||||||
26 | allocable thereto) taken into account for the taxable |
| |||||||
| |||||||
1 | year with respect to a transaction with a taxpayer that | ||||||
2 | is required to make an addition modification with | ||||||
3 | respect to such transaction under Section | ||||||
4 | 203(a)(2)(D-18), 203(b)(2)(E-13), 203(c)(2)(G-13), or | ||||||
5 | 203(d)(2)(D-8), but not to exceed the amount of such | ||||||
6 | addition modification;
| ||||||
7 | (R) An amount equal to the interest income taken | ||||||
8 | into account for the taxable year (net of the | ||||||
9 | deductions allocable thereto) with respect to | ||||||
10 | transactions with a foreign person who would be a | ||||||
11 | member of the taxpayer's unitary business group but for | ||||||
12 | the fact that the foreign person's business activity | ||||||
13 | outside the United States is 80% or more of that | ||||||
14 | person's total business activity, but not to exceed the | ||||||
15 | addition modification required to be made for the same | ||||||
16 | taxable year under Section 203(d)(2)(D-7) for interest | ||||||
17 | paid, accrued, or incurred, directly or indirectly, to | ||||||
18 | the same foreign person; and
| ||||||
19 | (S) An amount equal to the income from intangible | ||||||
20 | property taken into account for the taxable year (net | ||||||
21 | of the deductions allocable thereto) with respect to | ||||||
22 | transactions with a foreign person who would be a | ||||||
23 | member of the taxpayer's unitary business group but for | ||||||
24 | the fact that the foreign person's business activity | ||||||
25 | outside the United States is 80% or more of that | ||||||
26 | person's total business activity, but not to exceed the |
| |||||||
| |||||||
1 | addition modification required to be made for the same | ||||||
2 | taxable year under Section 203(d)(2)(D-8) for | ||||||
3 | intangible expenses and costs paid, accrued, or | ||||||
4 | incurred, directly or indirectly, to the same foreign | ||||||
5 | person.
| ||||||
6 | (e) Gross income; adjusted gross income; taxable income.
| ||||||
7 | (1) In general. Subject to the provisions of paragraph | ||||||
8 | (2) and
subsection (b) (3), for purposes of this Section | ||||||
9 | and Section 803(e), a
taxpayer's gross income, adjusted | ||||||
10 | gross income, or taxable income for
the taxable year shall | ||||||
11 | mean the amount of gross income, adjusted gross
income or | ||||||
12 | taxable income properly reportable for federal income tax
| ||||||
13 | purposes for the taxable year under the provisions of the | ||||||
14 | Internal
Revenue Code. Taxable income may be less than | ||||||
15 | zero. However, for taxable
years ending on or after | ||||||
16 | December 31, 1986, net operating loss
carryforwards from | ||||||
17 | taxable years ending prior to December 31, 1986, may not
| ||||||
18 | exceed the sum of federal taxable income for the taxable | ||||||
19 | year before net
operating loss deduction, plus the excess | ||||||
20 | of addition modifications over
subtraction modifications | ||||||
21 | for the taxable year. For taxable years ending
prior to | ||||||
22 | December 31, 1986, taxable income may never be an amount in | ||||||
23 | excess
of the net operating loss for the taxable year as | ||||||
24 | defined in subsections
(c) and (d) of Section 172 of the | ||||||
25 | Internal Revenue Code, provided that when
taxable income of |
| |||||||
| |||||||
1 | a corporation (other than a Subchapter S corporation),
| ||||||
2 | trust, or estate is less than zero and addition | ||||||
3 | modifications, other than
those provided by subparagraph | ||||||
4 | (E) of paragraph (2) of subsection (b) for
corporations or | ||||||
5 | subparagraph (E) of paragraph (2) of subsection (c) for
| ||||||
6 | trusts and estates, exceed subtraction modifications, an | ||||||
7 | addition
modification must be made under those | ||||||
8 | subparagraphs for any other taxable
year to which the | ||||||
9 | taxable income less than zero (net operating loss) is
| ||||||
10 | applied under Section 172 of the Internal Revenue Code or | ||||||
11 | under
subparagraph (E) of paragraph (2) of this subsection | ||||||
12 | (e) applied in
conjunction with Section 172 of the Internal | ||||||
13 | Revenue Code.
| ||||||
14 | (2) Special rule. For purposes of paragraph (1) of this | ||||||
15 | subsection,
the taxable income properly reportable for | ||||||
16 | federal income tax purposes
shall mean:
| ||||||
17 | (A) Certain life insurance companies. In the case | ||||||
18 | of a life
insurance company subject to the tax imposed | ||||||
19 | by Section 801 of the
Internal Revenue Code, life | ||||||
20 | insurance company taxable income, plus the
amount of | ||||||
21 | distribution from pre-1984 policyholder surplus | ||||||
22 | accounts as
calculated under Section 815a of the | ||||||
23 | Internal Revenue Code;
| ||||||
24 | (B) Certain other insurance companies. In the case | ||||||
25 | of mutual
insurance companies subject to the tax | ||||||
26 | imposed by Section 831 of the
Internal Revenue Code, |
| |||||||
| |||||||
1 | insurance company taxable income;
| ||||||
2 | (C) Regulated investment companies. In the case of | ||||||
3 | a regulated
investment company subject to the tax | ||||||
4 | imposed by Section 852 of the
Internal Revenue Code, | ||||||
5 | investment company taxable income;
| ||||||
6 | (D) Real estate investment trusts. In the case of a | ||||||
7 | real estate
investment trust subject to the tax imposed | ||||||
8 | by Section 857 of the
Internal Revenue Code, real | ||||||
9 | estate investment trust taxable income;
| ||||||
10 | (E) Consolidated corporations. In the case of a | ||||||
11 | corporation which
is a member of an affiliated group of | ||||||
12 | corporations filing a consolidated
income tax return | ||||||
13 | for the taxable year for federal income tax purposes,
| ||||||
14 | taxable income determined as if such corporation had | ||||||
15 | filed a separate
return for federal income tax purposes | ||||||
16 | for the taxable year and each
preceding taxable year | ||||||
17 | for which it was a member of an affiliated group.
For | ||||||
18 | purposes of this subparagraph, the taxpayer's separate | ||||||
19 | taxable
income shall be determined as if the election | ||||||
20 | provided by Section
243(b) (2) of the Internal Revenue | ||||||
21 | Code had been in effect for all such years;
| ||||||
22 | (F) Cooperatives. In the case of a cooperative | ||||||
23 | corporation or
association, the taxable income of such | ||||||
24 | organization determined in
accordance with the | ||||||
25 | provisions of Section 1381 through 1388 of the
Internal | ||||||
26 | Revenue Code;
|
| |||||||
| |||||||
1 | (G) Subchapter S corporations. In the case of: (i) | ||||||
2 | a Subchapter S
corporation for which there is in effect | ||||||
3 | an election for the taxable year
under Section 1362 of | ||||||
4 | the Internal Revenue Code, the taxable income of such
| ||||||
5 | corporation determined in accordance with Section | ||||||
6 | 1363(b) of the Internal
Revenue Code, except that | ||||||
7 | taxable income shall take into
account those items | ||||||
8 | which are required by Section 1363(b)(1) of the
| ||||||
9 | Internal Revenue Code to be separately stated; and (ii) | ||||||
10 | a Subchapter
S corporation for which there is in effect | ||||||
11 | a federal election to opt out of
the provisions of the | ||||||
12 | Subchapter S Revision Act of 1982 and have applied
| ||||||
13 | instead the prior federal Subchapter S rules as in | ||||||
14 | effect on July 1, 1982,
the taxable income of such | ||||||
15 | corporation determined in accordance with the
federal | ||||||
16 | Subchapter S rules as in effect on July 1, 1982; and
| ||||||
17 | (H) Partnerships. In the case of a partnership, | ||||||
18 | taxable income
determined in accordance with Section | ||||||
19 | 703 of the Internal Revenue Code,
except that taxable | ||||||
20 | income shall take into account those items which are
| ||||||
21 | required by Section 703(a)(1) to be separately stated | ||||||
22 | but which would be
taken into account by an individual | ||||||
23 | in calculating his taxable income.
| ||||||
24 | (3) Recapture of business expenses on disposition of | ||||||
25 | asset or business. Notwithstanding any other law to the | ||||||
26 | contrary, if in prior years income from an asset or |
| |||||||
| |||||||
1 | business has been classified as business income and in a | ||||||
2 | later year is demonstrated to be non-business income, then | ||||||
3 | all expenses, without limitation, deducted in such later | ||||||
4 | year and in the 2 immediately preceding taxable years | ||||||
5 | related to that asset or business that generated the | ||||||
6 | non-business income shall be added back and recaptured as | ||||||
7 | business income in the year of the disposition of the asset | ||||||
8 | or business. Such amount shall be apportioned to Illinois | ||||||
9 | using the greater of the apportionment fraction computed | ||||||
10 | for the business under Section 304 of this Act for the | ||||||
11 | taxable year or the average of the apportionment fractions | ||||||
12 | computed for the business under Section 304 of this Act for | ||||||
13 | the taxable year and for the 2 immediately preceding | ||||||
14 | taxable years.
| ||||||
15 | (f) Valuation limitation amount.
| ||||||
16 | (1) In general. The valuation limitation amount | ||||||
17 | referred to in
subsections (a) (2) (G), (c) (2) (I) and | ||||||
18 | (d)(2) (E) is an amount equal to:
| ||||||
19 | (A) The sum of the pre-August 1, 1969 appreciation | ||||||
20 | amounts (to the
extent consisting of gain reportable | ||||||
21 | under the provisions of Section
1245 or 1250 of the | ||||||
22 | Internal Revenue Code) for all property in respect
of | ||||||
23 | which such gain was reported for the taxable year; plus
| ||||||
24 | (B) The lesser of (i) the sum of the pre-August 1, | ||||||
25 | 1969 appreciation
amounts (to the extent consisting of | ||||||
26 | capital gain) for all property in
respect of which such |
| |||||||
| |||||||
1 | gain was reported for federal income tax purposes
for | ||||||
2 | the taxable year, or (ii) the net capital gain for the | ||||||
3 | taxable year,
reduced in either case by any amount of | ||||||
4 | such gain included in the amount
determined under | ||||||
5 | subsection (a) (2) (F) or (c) (2) (H).
| ||||||
6 | (2) Pre-August 1, 1969 appreciation amount.
| ||||||
7 | (A) If the fair market value of property referred | ||||||
8 | to in paragraph
(1) was readily ascertainable on August | ||||||
9 | 1, 1969, the pre-August 1, 1969
appreciation amount for | ||||||
10 | such property is the lesser of (i) the excess of
such | ||||||
11 | fair market value over the taxpayer's basis (for | ||||||
12 | determining gain)
for such property on that date | ||||||
13 | (determined under the Internal Revenue
Code as in | ||||||
14 | effect on that date), or (ii) the total gain realized | ||||||
15 | and
reportable for federal income tax purposes in | ||||||
16 | respect of the sale,
exchange or other disposition of | ||||||
17 | such property.
| ||||||
18 | (B) If the fair market value of property referred | ||||||
19 | to in paragraph
(1) was not readily ascertainable on | ||||||
20 | August 1, 1969, the pre-August 1,
1969 appreciation | ||||||
21 | amount for such property is that amount which bears
the | ||||||
22 | same ratio to the total gain reported in respect of the | ||||||
23 | property for
federal income tax purposes for the | ||||||
24 | taxable year, as the number of full
calendar months in | ||||||
25 | that part of the taxpayer's holding period for the
| ||||||
26 | property ending July 31, 1969 bears to the number of |
| |||||||
| |||||||
1 | full calendar
months in the taxpayer's entire holding | ||||||
2 | period for the
property.
| ||||||
3 | (C) The Department shall prescribe such | ||||||
4 | regulations as may be
necessary to carry out the | ||||||
5 | purposes of this paragraph.
| ||||||
6 | (g) Double deductions. Unless specifically provided | ||||||
7 | otherwise, nothing
in this Section shall permit the same item | ||||||
8 | to be deducted more than once.
| ||||||
9 | (h) Legislative intention. Except as expressly provided by | ||||||
10 | this
Section there shall be no modifications or limitations on | ||||||
11 | the amounts
of income, gain, loss or deduction taken into | ||||||
12 | account in determining
gross income, adjusted gross income or | ||||||
13 | taxable income for federal income
tax purposes for the taxable | ||||||
14 | year, or in the amount of such items
entering into the | ||||||
15 | computation of base income and net income under this
Act for | ||||||
16 | such taxable year, whether in respect of property values as of
| ||||||
17 | August 1, 1969 or otherwise.
| ||||||
18 | (Source: P.A. 93-812, eff. 7-26-04; 93-840, eff. 7-30-04; | ||||||
19 | 94-776, eff. 5-19-06; 94-789, eff. 5-19-06; 94-1021, eff. | ||||||
20 | 7-12-06; 94-1074, eff. 12-26-06; revised 1-2-07.)
| ||||||
21 | (35 ILCS 5/218 new) | ||||||
22 | Sec. 218. Employer health insurance contribution credit. | ||||||
23 | (a) For taxable years ending on or after December 31, 2008, |
| |||||||
| |||||||
1 | each taxpayer who is an employer that makes a contribution to | ||||||
2 | the cost of health care benefits that the employer provides to | ||||||
3 | its employees is entitled to a credit against the tax imposed | ||||||
4 | under subsections (a) and (b) of Section 201 of this Act in an | ||||||
5 | amount equal to 33% of the contributed amount. | ||||||
6 | (b) For partners, shareholders of Subchapter S | ||||||
7 | corporations, and owners of limited liability companies, if the | ||||||
8 | liability company is treated as a partnership for purposes of | ||||||
9 | federal and State income taxation, there is allowed a credit | ||||||
10 | against the tax imposed under subsections (a) and (b) of | ||||||
11 | Section 201 of the Illinois Income Tax Act in an amount equal | ||||||
12 | to 33% of the contributed amount under this Section to be | ||||||
13 | determined in accordance with the determination of income and | ||||||
14 | distributive share of income under Sections 702 and 704 and | ||||||
15 | Subchapter S of the Internal Revenue Code. | ||||||
16 | (c) This Section applies only if: | ||||||
17 | (1) the employer employs fewer than 10 full-time | ||||||
18 | employees during the employer's taxable year; and | ||||||
19 | (2) a federal waiver has been approved by the Centers | ||||||
20 | for Medicare and Medicaid Services of the U.S. Department | ||||||
21 | of Health and Human Services for the funding for the | ||||||
22 | credits provided under this Section. | ||||||
23 | (d) The Department shall develop rules for the apportioning | ||||||
24 | of credits if the funds obtained by the federal waiver are | ||||||
25 | insufficient to pay the credits due under this Section. | ||||||
26 | (e) The credit under this Section may not be carried |
| |||||||
| |||||||
1 | forward or back. In no event shall a credit under this Section | ||||||
2 | reduce the taxpayer's liability to less than zero. | ||||||
3 | Section 905. The Illinois Insurance Code is amended by | ||||||
4 | adding Articles XLV and XLVI as follows: | ||||||
5 | (215 ILCS 5/Art. XLV heading new) | ||||||
6 | ARTICLE XLV. ILLINOIS INNOVATIVE INSURANCE SOLUTIONS | ||||||
7 | (215 ILCS 5/1500 new)
| ||||||
8 | Sec. 1500. Short title. This Article may be cited as the | ||||||
9 | Illinois Innovative Insurance Solutions Law.
| ||||||
10 | (215 ILCS 5/1505 new)
| ||||||
11 | Sec. 1505. Purpose. It is hereby determined and declared | ||||||
12 | that the purpose of this Article is to establish a program, | ||||||
13 | called the Illinois Innovative Insurance Solutions Program, | ||||||
14 | whereby health insurance carriers may develop and submit to the | ||||||
15 | Director of Insurance for consideration and approval, policies | ||||||
16 | or plans of individual major medical, blanket, or group major | ||||||
17 | medical accident and health insurance having the potential to | ||||||
18 | increase Illinois residents' access to health care coverage, | ||||||
19 | but which may not otherwise meet existing regulatory | ||||||
20 | requirements. The Director of Insurance is authorized by this | ||||||
21 | Section to grant approval of such innovative products on a | ||||||
22 | limited, pilot program basis in order that any overriding |
| |||||||
| |||||||
1 | potential to increase access to health care may be assessed on | ||||||
2 | a limited trial basis. The purpose of this program is to | ||||||
3 | encourage private health insurance market innovation and | ||||||
4 | creativity in order to arrive at viable solutions for providing | ||||||
5 | health insurance coverage and access to previously uninsured | ||||||
6 | Illinois residents. | ||||||
7 | (215 ILCS 5/1510 new)
| ||||||
8 | Sec. 1510. Director approval of product. Carriers | ||||||
9 | proposing accident and health policies or plans subject to the | ||||||
10 | Illinois Innovative Insurance Solutions Program shall submit, | ||||||
11 | to the Director of Insurance a sample policy and a summary | ||||||
12 | sheet indicating which policy provisions differ from existing | ||||||
13 | Illinois law, what the target consumer market is for the | ||||||
14 | product, an actuarial review of the policy, and a detailed | ||||||
15 | explanation as to how the product is anticipated to increase | ||||||
16 | access to healthcare coverage for uninsured Illinois | ||||||
17 | residents. The Director of Insurance must approve any such | ||||||
18 | policies or plans before the carrier can market the policies or | ||||||
19 | plans. The Director of Insurance shall provide a decision in | ||||||
20 | writing to the carrier within 180 days of receipt of the | ||||||
21 | carrier's submittal as to whether the policy meets the | ||||||
22 | requirements of this Act. | ||||||
23 | Any policy or plan approved under this Act must comply with | ||||||
24 | the following provisions: | ||||||
25 | (1) preexisting conditions under Part 2005 of Title 50 |
| |||||||
| |||||||
1 | of the Illinois Administrative Code; | ||||||
2 | (2) coverage for children, including newborn or | ||||||
3 | adopted children, under Sections 356b, 356c, and 356h of | ||||||
4 | this Code; | ||||||
5 | (3) timely payment of claims under Section 368a of this | ||||||
6 | Code; | ||||||
7 | (4) a consumers right to an adequate and accessible | ||||||
8 | network under Section 370i of the Code; and | ||||||
9 | (5) coverage requirements for individual policies | ||||||
10 | outlined in Section 2007.70 of Title 50 of the Illinois | ||||||
11 | Administrative Code.
| ||||||
12 | These protections may not be waived under a plan or product | ||||||
13 | authorized under this Act.
| ||||||
14 | (215 ILCS 5/Art. XLVI heading new) | ||||||
15 | ARTICLE XLVI. ILLINOIS HEALTH INSURANCE PREMIUM ASSISTANCE | ||||||
16 | (215 ILCS 5/1600 new)
| ||||||
17 | Sec. 1600. Short title. This Article may be cited as the | ||||||
18 | Illinois Health Insurance Premium Assistance Program. | ||||||
19 | (215 ILCS 5/1605 new)
| ||||||
20 | Sec. 1605. Legislative intent. The General Assembly finds | ||||||
21 | that, for the economic and social benefit of all residents of | ||||||
22 | this State, it is important to enable all State residents to | ||||||
23 | access affordable health insurance coverage. |
| |||||||
| |||||||
1 | (215 ILCS 5/1610 new)
| ||||||
2 | Sec. 1610. Definitions. In this Act: | ||||||
3 | "Carrier" is as defined in the Small Employer Health | ||||||
4 | Insurance Rating Act. | ||||||
5 | "Department" means the Department of Healthcare and Family | ||||||
6 | Services. | ||||||
7 | "Employee" has the same meaning as provided in the Illinois | ||||||
8 | Health Insurance Portability and Accountability Act. | ||||||
9 | "Eligible individual" means an individual who: | ||||||
10 | (1) is a resident of the State of Illinois; | ||||||
11 | (2) is not eligible for Medicare; | ||||||
12 | (3) except as otherwise provided by the Department, has | ||||||
13 | family income less than 300% of the federal poverty level | ||||||
14 | or, if the individual is not married, has income less than | ||||||
15 | 100% of the federal poverty level; | ||||||
16 | (4) has investments, savings or other assets less than | ||||||
17 | the limit established by the Department; and | ||||||
18 | (5) Meets other eligibility criteria established by | ||||||
19 | the Department. | ||||||
20 | "Family" means: | ||||||
21 | (1) a single individual; | ||||||
22 | (2) an adult and the adult's spouse; | ||||||
23 | (3) an adult and the adult's spouse, all unmarried, | ||||||
24 | dependent children less than 23 years of age, including | ||||||
25 | adopted children, children placed for adoption and |
| |||||||
| |||||||
1 | children under the legal guardianship of the adult or the | ||||||
2 | adult's spouse; | ||||||
3 | (4) an adult and the adult's unmarried, dependent | ||||||
4 | children less than 23 years of age, including adopted | ||||||
5 | children, children placed for adoption and children under | ||||||
6 | the legal guardianship of the adult; or | ||||||
7 | (5) a dependent elderly relative or a dependent adult | ||||||
8 | disabled child who meets criteria established by the | ||||||
9 | Department and who lives in the home of the adult described | ||||||
10 | in 1, 2, 3, or 4 of this subsection. | ||||||
11 | "Federal poverty level" means the federal poverty level | ||||||
12 | guidelines published annually by the United States Department | ||||||
13 | of Health and Human Services. | ||||||
14 | "Family member" means an employee's spouse, any unmarried | ||||||
15 | child or stepchild within age limits and other conditions | ||||||
16 | imposed by the Department of Professional and Financial | ||||||
17 | Regulation's Division of Insurance with regard to unmarried | ||||||
18 | children or stepchildren or any other dependents eligible under | ||||||
19 | the terms of the health benefit plan selected by the employee's | ||||||
20 | employer. | ||||||
21 | "Health benefit plan" has the same meaning as provided in | ||||||
22 | the Small Employer Health Insurance Rating Act. "Health benefit | ||||||
23 | plan" includes the Illinois Comprehensive Health Insurance | ||||||
24 | Plan and any plan provided by a less than fully insured | ||||||
25 | multiple employer welfare arrangement or by another benefit | ||||||
26 | arrangement defined in the federal Employee Retirement Income |
| |||||||
| |||||||
1 | Security Act of 1974, as amended. Health benefit plan does not | ||||||
2 | include coverage for accident only, specific disease or | ||||||
3 | condition only, credit, disability income, coverage of | ||||||
4 | Medicare services pursuant to contracts with the federal | ||||||
5 | government, Medicare supplement insurance, student accident | ||||||
6 | and health insurance, long term care insurance, hospital | ||||||
7 | indemnity only, dental only, vision only, coverage issued as a | ||||||
8 | supplement to liability insurance, insurance arising out of a | ||||||
9 | workers' compensation or similar law, automobile medical | ||||||
10 | payment insurance, insurance under which the benefits are | ||||||
11 | payable with or without regard to fault and that is legally | ||||||
12 | required to be contained in any liability insurance policy or | ||||||
13 | equivalent self-insurance or coverage obtained or provided in | ||||||
14 | another state but not available in Illinois. | ||||||
15 | "Income" means gross income in cash or kind available to | ||||||
16 | the applicant or the applicant's family. "Income" does not | ||||||
17 | include earned income of the applicant's children or income | ||||||
18 | earned by a spouse if there is a legal separation. | ||||||
19 | "Premium" means the monthly or other periodic charge for a | ||||||
20 | health benefit plan. | ||||||
21 | "Program" means the Illinois Health Insurance Premium | ||||||
22 | Assistance Program. | ||||||
23 | "Rebate" means payment or reimbursement to an eligible | ||||||
24 | individual toward the eligible individual's purchase or | ||||||
25 | contribution of premium towards a health benefit plan for the | ||||||
26 | eligible individual and the eligible individual's family and |
| |||||||
| |||||||
1 | may include co-payments or deductible expenses that are the | ||||||
2 | responsibility of the eligible individual. | ||||||
3 | "Small employer" has the same meaning as provided in the | ||||||
4 | Illinois Health Insurance Portability and Accountability Act. | ||||||
5 | "Third-party administrator" means any insurance company or | ||||||
6 | other entity licensed under the Illinois Insurance Code to | ||||||
7 | administer health insurance benefit programs.
| ||||||
8 | (215 ILCS 5/1615 new)
| ||||||
9 | Sec. 1615. Program Operation. The Illinois Health | ||||||
10 | Insurance Premium Assistance Program is created. The Program | ||||||
11 | shall be administered by the Department of Healthcare and | ||||||
12 | Family Services. The Department shall have the same powers and | ||||||
13 | authority to administer the Program as are provided to the | ||||||
14 | Department in connection with the Department's administration | ||||||
15 | of the Illinois Public Aid Code, the Children's Health | ||||||
16 | Insurance Program Act, and the Covering ALL KIDS Health | ||||||
17 | Insurance Program. | ||||||
18 | (215 ILCS 5/1620 new)
| ||||||
19 | Sec. 1620. Additional duties of Department; rules. | ||||||
20 | (a) In carrying out its duties under this Program, the | ||||||
21 | Department may: | ||||||
22 | (1) enter into contracts for administration of this Act | ||||||
23 | that include, but are not limited to: | ||||||
24 | (a) distribution of rebate payments; |
| |||||||
| |||||||
1 | (b) eligibility determination; | ||||||
2 | (c) data collection; | ||||||
3 | (d) financial tracking and reporting; and | ||||||
4 | (e) such other services as the Department may deem | ||||||
5 | necessary for the administration of the Program; and | ||||||
6 | (2) retain consultants and employ staff. | ||||||
7 | (b) The Department shall adopt rules reasonably necessary | ||||||
8 | to carry out the purposes of this Act.
If the Department | ||||||
9 | decides to enter into any contract pursuant to this subsection, | ||||||
10 | the Department shall engage in competitive bidding. | ||||||
11 | (215 ILCS 5/1625 new)
| ||||||
12 | Sec. 1625. Application to participate in program; issuance | ||||||
13 | of rebates; restrictions; health benefit plan enrollment. | ||||||
14 | (a) To enroll in the Program, an applicant shall submit a | ||||||
15 | written application to the Department in the form and manner | ||||||
16 | prescribed by the Department. If the applicant qualifies as an | ||||||
17 | eligible individual, the applicant shall either be enrolled in | ||||||
18 | the program or placed on a waiting list for enrollment. | ||||||
19 | (b) After an eligible individual has enrolled in the | ||||||
20 | program, the individual shall remain eligible for enrollment | ||||||
21 | for the period of time established by the Department. | ||||||
22 | (c) After an eligible individual has enrolled in the | ||||||
23 | program, the Department shall issue
rebates as provided in | ||||||
24 | accordance with the restrictions in Section 25 of the | ||||||
25 | Children's Health Insurance Program Act and available
|
| |||||||
| |||||||
1 | appropriations. | ||||||
2 | (d) Rebates may not be issued to an eligible individual | ||||||
3 | unless all eligible children, if any, in the eligible | ||||||
4 | individual's family are covered under a health benefit plan, | ||||||
5 | Medicaid, or the Covering ALL KIDS Health Insurance Act. | ||||||
6 | (e) Rebates may not be used to subsidize premiums on a | ||||||
7 | health benefit plan whose premiums are wholly paid by the | ||||||
8 | eligible individual's employer. | ||||||
9 | (f) The Department may issue rebates to an eligible | ||||||
10 | individual in advance of a purchase of a health benefit plan. | ||||||
11 | (g) An eligible individual must enroll in a health benefit | ||||||
12 | plan if such a plan is available to the eligible individual | ||||||
13 | through the individual's employment. | ||||||
14 | (h) Notwithstanding Section 1610, if an eligible | ||||||
15 | individual is enrolled in a group health benefit plan available | ||||||
16 | to the eligible individual through the individual's | ||||||
17 | employment, and the employer requires enrollment in both a | ||||||
18 | health benefit plan and a dental plan, the individual is | ||||||
19 | eligible for a rebate for both the health benefit plan and the | ||||||
20 | dental plan. | ||||||
21 | (215 ILCS 5/1630 new)
| ||||||
22 | Sec. 1630. Level of assistance determinations. | ||||||
23 | (a) The Department shall determine the level of assistance | ||||||
24 | to be granted under Section 1625 based on a sliding scale that | ||||||
25 | considers: |
| |||||||
| |||||||
1 | (1) family size; | ||||||
2 | (2) family income; | ||||||
3 | (3) the number of members of a family who will receive | ||||||
4 | health benefit plan coverage subsidized through the | ||||||
5 | Program; and | ||||||
6 | (4) such other factors as the Department may establish. | ||||||
7 | (b) Notwithstanding the sliding scale established in | ||||||
8 | subsection (a) of this Section, the Department may establish | ||||||
9 | different assistance levels for otherwise similarly situated | ||||||
10 | eligible individuals based on factors including but not limited | ||||||
11 | to whether the individual is enrolled in an employer-sponsored | ||||||
12 | group health benefit plan or an individual health benefit plan. | ||||||
13 | (215 ILCS 5/1635 new)
| ||||||
14 | Sec. 1635. Rebates limited to funds appropriated; | ||||||
15 | enrollment restrictions. | ||||||
16 | (a) Notwithstanding eligibility criteria and rebate | ||||||
17 | amounts established in this Act, rebates shall be provided only | ||||||
18 | to the extent the General Assembly specifically appropriates | ||||||
19 | funds to provide such assistance. | ||||||
20 | (b) The Department may prohibit or limit enrollment in the | ||||||
21 | Program to ensure that Program expenditures are within | ||||||
22 | legislatively appropriated amounts. Prohibitions or | ||||||
23 | limitations allowed under this Section may include but are not | ||||||
24 | limited to: | ||||||
25 | (1) lowering the allowable income level necessary to |
| |||||||
| |||||||
1 | qualify as an eligible individual; and | ||||||
2 | (2) establishing a waiting list of eligible | ||||||
3 | individuals who shall receive rebates only when sufficient | ||||||
4 | funds are available. | ||||||
5 | (215 ILCS 5/1640 new)
| ||||||
6 | Sec. 1640. Emergency rulemaking. The Department may adopt | ||||||
7 | rules necessary to establish and implement this Program through | ||||||
8 | the use of emergency rulemaking in accordance with Section 5-45 | ||||||
9 | of the Illinois Administrative Procedure Act. For the purposes | ||||||
10 | of that Act, the General Assembly finds that the adoption of | ||||||
11 | rules to implement this Program is deemed an emergency and | ||||||
12 | necessary for the public interest, safety, and welfare. This | ||||||
13 | Section is repealed on July 1, 2008. | ||||||
14 | (215 ILCS 5/1645 new)
| ||||||
15 | Sec. 1645. Funding. This Act shall only take effect upon | ||||||
16 | the approval of a federal waiver by the Centers for Medicare | ||||||
17 | and Medicaid Services of the U.S. Department of Health and | ||||||
18 | Human Services for the funding for the rebates provided under | ||||||
19 | this Act. | ||||||
20 | (215 ILCS 5/1650 new)
| ||||||
21 | Sec. 1650. Severability. If any provision of this Act or | ||||||
22 | its application to any person or circumstance is held invalid, | ||||||
23 | the invalidity of that provision or application does not affect |
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| |||||||
1 | other provisions or applications of this Act that can be given | ||||||
2 | effect without the invalid provision or application, and to | ||||||
3 | this end the provisions of this Act are severable. | ||||||
4 | (215 ILCS 5/1655 new)
| ||||||
5 | Sec. 1655. Repealer. This Act is repealed on December 31, | ||||||
6 | 2017. | ||||||
7 | Section 910. The Managed Care Reform and Patient Rights Act | ||||||
8 | is amended by changing Section 90 and by adding Section 90.1 as | ||||||
9 | follows:
| ||||||
10 | (215 ILCS 134/90)
| ||||||
11 | Sec. 90. Office of Consumer Health Insurance.
| ||||||
12 | (a) The Director of Insurance shall establish the Office of | ||||||
13 | Consumer
Health Insurance within the Department of Insurance to | ||||||
14 | provide assistance and
information to all health care consumers | ||||||
15 | within the State. Within the
appropriation allocated, the | ||||||
16 | Office shall provide information and assistance to
all health | ||||||
17 | care consumers by:
| ||||||
18 | (1) assisting consumers in understanding health | ||||||
19 | insurance marketing
materials and
the coverage provisions | ||||||
20 | of individual plans;
| ||||||
21 | (2) educating enrollees about their rights within | ||||||
22 | individual plans;
| ||||||
23 | (3) assisting enrollees with the process of filing |
| |||||||
| |||||||
1 | formal
grievances and appeals;
| ||||||
2 | (4) establishing and operating a toll-free "800" | ||||||
3 | telephone number
line to handle
consumer inquiries;
| ||||||
4 | (5) making related information available in languages | ||||||
5 | other than English
that
are spoken as a primary language by | ||||||
6 | a significant portion of the State's
population, as | ||||||
7 | determined by the Department;
| ||||||
8 | (6) analyzing, commenting on, monitoring, and making | ||||||
9 | publicly available
reports
on the development and | ||||||
10 | implementation of federal, State, and local laws,
| ||||||
11 | regulations, and other governmental policies and actions | ||||||
12 | that pertain to the
adequacy of health care plans, | ||||||
13 | facilities, and services in the State;
| ||||||
14 | (7) filing an annual report with the Governor, the | ||||||
15 | Director, and the
General
Assembly, which shall contain | ||||||
16 | recommendations for improvement of the regulation
of | ||||||
17 | health insurance plans, including recommendations on | ||||||
18 | improving health care
consumer assistance and patterns, | ||||||
19 | abuses, and progress that it has identified
from its | ||||||
20 | interaction with health care consumers; and
| ||||||
21 | (8) performing all duties assigned to the Office by the | ||||||
22 | Director.
| ||||||
23 | (b) The report required under subsection (a)(7) shall be | ||||||
24 | filed by January
31, 2001 and each January 31 thereafter.
| ||||||
25 | (c) Nothing in this Section shall be interpreted to | ||||||
26 | authorize access to or
disclosure of individual patient or |
| |||||||
| |||||||
1 | health care professional or provider
records.
| ||||||
2 | (d) The Office of Consumer Health Insurance shall: | ||||||
3 | (1) develop and implement a health coverage public | ||||||
4 | awareness and education program by: | ||||||
5 | (i) increasing public awareness of health coverage | ||||||
6 | options available in this State; | ||||||
7 | (ii) educate the public on the value of health | ||||||
8 | coverage; and | ||||||
9 | (iii) provide information on health coverage | ||||||
10 | options, including explanations of deductibles and | ||||||
11 | copayments and the differences between health | ||||||
12 | maintenance organizations, preferred provider | ||||||
13 | organizations, point of service plans, health savings | ||||||
14 | accounts and compatible high deductible health benefit | ||||||
15 | plans, and other forms of health insurance coverage. | ||||||
16 | (2) provide information, including financial ratings, | ||||||
17 | about specific health coverage issuers but may not favor or | ||||||
18 | endorse one particular issuer over another. | ||||||
19 | (3) develop and release public service announcements | ||||||
20 | to educate consumers and employers about the types of | ||||||
21 | policies and availability of health coverage in this State. | ||||||
22 | (4) develop an Internet website designed to educate the | ||||||
23 | public about the types of policies and availability of | ||||||
24 | health coverage in this State. | ||||||
25 | (5) provide other appropriate education to the public | ||||||
26 | regarding the value of health coverage.
|
| |||||||
| |||||||
1 | (Source: P.A. 91-617, eff. 1-1-00.)
| ||||||
2 | (215 ILCS 134/90.1 new) | ||||||
3 | Sec. 90.1. Task force. | ||||||
4 | (a) The Director shall appoint a task force to annually | ||||||
5 | review and make recommendations to the General Assembly and the | ||||||
6 | Governor regarding legislative changes needed to meet and | ||||||
7 | implement the following health care policies and objectives: | ||||||
8 | (1) increased measurement, transparency, and | ||||||
9 | disclosure of hospital and clinician performance; | ||||||
10 | (2) information, tools, and incentives for patients | ||||||
11 | and other consumers to enable them to make informed health | ||||||
12 | care decisions; | ||||||
13 | (3) payment of hospitals and clinicians based on their | ||||||
14 | performance; | ||||||
15 | (4) health information technology, including an | ||||||
16 | electronic health record for all Illinois citizens; | ||||||
17 | (5) preventative and wellness initiatives; and | ||||||
18 | (6) review of current health plan design and | ||||||
19 | requirements, identifying elements of the plans that need | ||||||
20 | elimination, and implementation of new provisions that are | ||||||
21 | consistent with guidelines and protocols established by | ||||||
22 | organizations representing medical professions and | ||||||
23 | organizations with affordable budget guidelines. | ||||||
24 | The task force must report by January 1, 2008 to the | ||||||
25 | Governor and the General Assembly and by January 1 of each year |
| |||||||
| |||||||
1 | thereafter.
| ||||||
2 | (b) The task force shall be composed of the following | ||||||
3 | members: | ||||||
4 | (1) a consumer of an individual health insurance plan; | ||||||
5 | (2) an employer of less than 10 employees; | ||||||
6 | (3) an employer of 10 to 50 employees; | ||||||
7 | (4) an employer of more than 50 employees; | ||||||
8 | (5) a self-insured employer; | ||||||
9 | (6) a health insurance agent; | ||||||
10 | (7) a physician; | ||||||
11 | (8) an advanced practice nurse; | ||||||
12 | (9) a hospital; | ||||||
13 | (10) a medical unit of an institution of higher | ||||||
14 | education; | ||||||
15 | (11) a health care insurer; | ||||||
16 | (12) a representative from the Illinois Comprehensive | ||||||
17 | Health Insurance Plan; and | ||||||
18 | (13) a representative of the Department of Healthcare | ||||||
19 | and Family Services responsible for programs under | ||||||
20 | Medicaid and the children's health insurance program. | ||||||
21 | (c) The Director or his designee shall serve as Chairman of | ||||||
22 | the Task Force and consult the task force regarding the content | ||||||
23 | of the public service announcements, Internet website, and | ||||||
24 | educational materials required in Section 90 of this Act. The | ||||||
25 | Director has authority to make final decisions as to what the | ||||||
26 | program's materials will contain. |
| |||||||
| |||||||
1 | (d) The Department may accept gifts and grants from any | ||||||
2 | party, including a health benefit plan issuer or a foundation | ||||||
3 | associated with a health benefit plan issuer, to assist with | ||||||
4 | funding the programs established in Section 90 of this Act. The | ||||||
5 | Department shall adopt rules
governing acceptance of donations | ||||||
6 | that are consistent with the Illinois Governmental Ethics Act. | ||||||
7 | Before adopting rules under this subsection (d), the Department | ||||||
8 | shall: | ||||||
9 | (1) submit the proposed rules to the Illinois Board of | ||||||
10 | Ethics
for review; and | ||||||
11 | (2) consider the Board's recommendations regarding the | ||||||
12 | regulations. | ||||||
13 | Section 915. The Illinois Public Aid Code is amended by | ||||||
14 | adding Section 5-26 as follows: | ||||||
15 | (305 ILCS 5/5-26 new) | ||||||
16 | Sec. 5-26. Incentive payments to providers. Subject to | ||||||
17 | appropriation, the Department shall establish incentive | ||||||
18 | payments to eligible
providers based on a quality reporting | ||||||
19 | system using quality measures consistent with criteria
| ||||||
20 | established by the Centers for Medicare and Medicaid Services | ||||||
21 | to implement the physician
quality reporting system | ||||||
22 | established under the federal Tax Relief and Health Care Act of | ||||||
23 | 2006.
Subject to appropriation, the Department shall establish | ||||||
24 | incentive payments to eligible
providers who make health |
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1 | information technology investments that lead to administrative | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2 | and
benefit delivery cost savings to the Department in its | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
3 | administration and enforcement of the
Act. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
4 | (215 ILCS 5/Art. XIXB rep.) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
5 | Section 930. The Illinois Insurance Code is amended by | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
6 | repealing Article XIXB.
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7 | Section 9999. Effective date. This Act takes effect upon | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
8 | becoming law.
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