100TH GENERAL ASSEMBLY
State of Illinois
2017 and 2018
HB3361

 

Introduced , by Rep. Elgie R. Sims, Jr.

 

SYNOPSIS AS INTRODUCED:
 
35 ILCS 5/201  from Ch. 120, par. 2-201
35 ILCS 5/216
35 ILCS 120/5k  from Ch. 120, par. 444k
415 ILCS 5/58.14a

    Amends the Illinois Income Tax Act. Provides that the Department of Commerce and Economic Opportunity may designate investment zones. Provides that an area is eligible for designation as an investment zone if the median household income is less than 125% of the federal poverty level. Provides that the corporate authorities of the municipality in which a prospective investment zone is located may apply with the Department of Commerce and Economic Opportunity to have the area designated as an investment zone. Provides for an income tax credit for site remediation in an investment zone. Provides that the credit for wages paid to ex-felons shall be equal to 25% (currently, 5%) of those wages. Provides that the total credit for each ex-offender may not exceed $2,500 (currently, $1,500). Requires qualified ex-offenders to complete certain job training programs. Amends the Retailers' Occupation Tax Act. Provides for a building materials exemption for investment zones.


LRB100 10875 HLH 21110 b

FISCAL NOTE ACT MAY APPLY

 

 

A BILL FOR

 

HB3361LRB100 10875 HLH 21110 b

1    AN ACT concerning revenue.
 
2    Be it enacted by the People of the State of Illinois,
3represented in the General Assembly:
 
4    Section 5. The Illinois Income Tax Act is amended by
5changing Sections 201 and 216 as follows:
 
6    (35 ILCS 5/201)  (from Ch. 120, par. 2-201)
7    Sec. 201. Tax Imposed.
8    (a) In general. A tax measured by net income is hereby
9imposed on every individual, corporation, trust and estate for
10each taxable year ending after July 31, 1969 on the privilege
11of earning or receiving income in or as a resident of this
12State. Such tax shall be in addition to all other occupation or
13privilege taxes imposed by this State or by any municipal
14corporation or political subdivision thereof.
15    (b) Rates. The tax imposed by subsection (a) of this
16Section shall be determined as follows, except as adjusted by
17subsection (d-1):
18        (1) In the case of an individual, trust or estate, for
19    taxable years ending prior to July 1, 1989, an amount equal
20    to 2 1/2% of the taxpayer's net income for the taxable
21    year.
22        (2) In the case of an individual, trust or estate, for
23    taxable years beginning prior to July 1, 1989 and ending

 

 

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1    after June 30, 1989, an amount equal to the sum of (i) 2
2    1/2% of the taxpayer's net income for the period prior to
3    July 1, 1989, as calculated under Section 202.3, and (ii)
4    3% of the taxpayer's net income for the period after June
5    30, 1989, as calculated under Section 202.3.
6        (3) In the case of an individual, trust or estate, for
7    taxable years beginning after June 30, 1989, and ending
8    prior to January 1, 2011, an amount equal to 3% of the
9    taxpayer's net income for the taxable year.
10        (4) In the case of an individual, trust, or estate, for
11    taxable years beginning prior to January 1, 2011, and
12    ending after December 31, 2010, an amount equal to the sum
13    of (i) 3% of the taxpayer's net income for the period prior
14    to January 1, 2011, as calculated under Section 202.5, and
15    (ii) 5% of the taxpayer's net income for the period after
16    December 31, 2010, as calculated under Section 202.5.
17        (5) In the case of an individual, trust, or estate, for
18    taxable years beginning on or after January 1, 2011, and
19    ending prior to January 1, 2015, an amount equal to 5% of
20    the taxpayer's net income for the taxable year.
21        (5.1) In the case of an individual, trust, or estate,
22    for taxable years beginning prior to January 1, 2015, and
23    ending after December 31, 2014, an amount equal to the sum
24    of (i) 5% of the taxpayer's net income for the period prior
25    to January 1, 2015, as calculated under Section 202.5, and
26    (ii) 3.75% of the taxpayer's net income for the period

 

 

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1    after December 31, 2014, as calculated under Section 202.5.
2        (5.2) In the case of an individual, trust, or estate,
3    for taxable years beginning on or after January 1, 2015,
4    and ending prior to January 1, 2025, an amount equal to
5    3.75% of the taxpayer's net income for the taxable year.
6        (5.3) In the case of an individual, trust, or estate,
7    for taxable years beginning prior to January 1, 2025, and
8    ending after December 31, 2024, an amount equal to the sum
9    of (i) 3.75% of the taxpayer's net income for the period
10    prior to January 1, 2025, as calculated under Section
11    202.5, and (ii) 3.25% of the taxpayer's net income for the
12    period after December 31, 2024, as calculated under Section
13    202.5.
14        (5.4) In the case of an individual, trust, or estate,
15    for taxable years beginning on or after January 1, 2025, an
16    amount equal to 3.25% of the taxpayer's net income for the
17    taxable year.
18        (6) In the case of a corporation, for taxable years
19    ending prior to July 1, 1989, an amount equal to 4% of the
20    taxpayer's net income for the taxable year.
21        (7) In the case of a corporation, for taxable years
22    beginning prior to July 1, 1989 and ending after June 30,
23    1989, an amount equal to the sum of (i) 4% of the
24    taxpayer's net income for the period prior to July 1, 1989,
25    as calculated under Section 202.3, and (ii) 4.8% of the
26    taxpayer's net income for the period after June 30, 1989,

 

 

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1    as calculated under Section 202.3.
2        (8) In the case of a corporation, for taxable years
3    beginning after June 30, 1989, and ending prior to January
4    1, 2011, an amount equal to 4.8% of the taxpayer's net
5    income for the taxable year.
6        (9) In the case of a corporation, for taxable years
7    beginning prior to January 1, 2011, and ending after
8    December 31, 2010, an amount equal to the sum of (i) 4.8%
9    of the taxpayer's net income for the period prior to
10    January 1, 2011, as calculated under Section 202.5, and
11    (ii) 7% of the taxpayer's net income for the period after
12    December 31, 2010, as calculated under Section 202.5.
13        (10) In the case of a corporation, for taxable years
14    beginning on or after January 1, 2011, and ending prior to
15    January 1, 2015, an amount equal to 7% of the taxpayer's
16    net income for the taxable year.
17        (11) In the case of a corporation, for taxable years
18    beginning prior to January 1, 2015, and ending after
19    December 31, 2014, an amount equal to the sum of (i) 7% of
20    the taxpayer's net income for the period prior to January
21    1, 2015, as calculated under Section 202.5, and (ii) 5.25%
22    of the taxpayer's net income for the period after December
23    31, 2014, as calculated under Section 202.5.
24        (12) In the case of a corporation, for taxable years
25    beginning on or after January 1, 2015, and ending prior to
26    January 1, 2025, an amount equal to 5.25% of the taxpayer's

 

 

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1    net income for the taxable year.
2        (13) In the case of a corporation, for taxable years
3    beginning prior to January 1, 2025, and ending after
4    December 31, 2024, an amount equal to the sum of (i) 5.25%
5    of the taxpayer's net income for the period prior to
6    January 1, 2025, as calculated under Section 202.5, and
7    (ii) 4.8% of the taxpayer's net income for the period after
8    December 31, 2024, as calculated under Section 202.5.
9        (14) In the case of a corporation, for taxable years
10    beginning on or after January 1, 2025, an amount equal to
11    4.8% of the taxpayer's net income for the taxable year.
12    The rates under this subsection (b) are subject to the
13provisions of Section 201.5.
14    (c) Personal Property Tax Replacement Income Tax.
15Beginning on July 1, 1979 and thereafter, in addition to such
16income tax, there is also hereby imposed the Personal Property
17Tax Replacement Income Tax measured by net income on every
18corporation (including Subchapter S corporations), partnership
19and trust, for each taxable year ending after June 30, 1979.
20Such taxes are imposed on the privilege of earning or receiving
21income in or as a resident of this State. The Personal Property
22Tax Replacement Income Tax shall be in addition to the income
23tax imposed by subsections (a) and (b) of this Section and in
24addition to all other occupation or privilege taxes imposed by
25this State or by any municipal corporation or political
26subdivision thereof.

 

 

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1    (d) Additional Personal Property Tax Replacement Income
2Tax Rates. The personal property tax replacement income tax
3imposed by this subsection and subsection (c) of this Section
4in the case of a corporation, other than a Subchapter S
5corporation and except as adjusted by subsection (d-1), shall
6be an additional amount equal to 2.85% of such taxpayer's net
7income for the taxable year, except that beginning on January
81, 1981, and thereafter, the rate of 2.85% specified in this
9subsection shall be reduced to 2.5%, and in the case of a
10partnership, trust or a Subchapter S corporation shall be an
11additional amount equal to 1.5% of such taxpayer's net income
12for the taxable year.
13    (d-1) Rate reduction for certain foreign insurers. In the
14case of a foreign insurer, as defined by Section 35A-5 of the
15Illinois Insurance Code, whose state or country of domicile
16imposes on insurers domiciled in Illinois a retaliatory tax
17(excluding any insurer whose premiums from reinsurance assumed
18are 50% or more of its total insurance premiums as determined
19under paragraph (2) of subsection (b) of Section 304, except
20that for purposes of this determination premiums from
21reinsurance do not include premiums from inter-affiliate
22reinsurance arrangements), beginning with taxable years ending
23on or after December 31, 1999, the sum of the rates of tax
24imposed by subsections (b) and (d) shall be reduced (but not
25increased) to the rate at which the total amount of tax imposed
26under this Act, net of all credits allowed under this Act,

 

 

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1shall equal (i) the total amount of tax that would be imposed
2on the foreign insurer's net income allocable to Illinois for
3the taxable year by such foreign insurer's state or country of
4domicile if that net income were subject to all income taxes
5and taxes measured by net income imposed by such foreign
6insurer's state or country of domicile, net of all credits
7allowed or (ii) a rate of zero if no such tax is imposed on such
8income by the foreign insurer's state of domicile. For the
9purposes of this subsection (d-1), an inter-affiliate includes
10a mutual insurer under common management.
11        (1) For the purposes of subsection (d-1), in no event
12    shall the sum of the rates of tax imposed by subsections
13    (b) and (d) be reduced below the rate at which the sum of:
14            (A) the total amount of tax imposed on such foreign
15        insurer under this Act for a taxable year, net of all
16        credits allowed under this Act, plus
17            (B) the privilege tax imposed by Section 409 of the
18        Illinois Insurance Code, the fire insurance company
19        tax imposed by Section 12 of the Fire Investigation
20        Act, and the fire department taxes imposed under
21        Section 11-10-1 of the Illinois Municipal Code,
22    equals 1.25% for taxable years ending prior to December 31,
23    2003, or 1.75% for taxable years ending on or after
24    December 31, 2003, of the net taxable premiums written for
25    the taxable year, as described by subsection (1) of Section
26    409 of the Illinois Insurance Code. This paragraph will in

 

 

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1    no event increase the rates imposed under subsections (b)
2    and (d).
3        (2) Any reduction in the rates of tax imposed by this
4    subsection shall be applied first against the rates imposed
5    by subsection (b) and only after the tax imposed by
6    subsection (a) net of all credits allowed under this
7    Section other than the credit allowed under subsection (i)
8    has been reduced to zero, against the rates imposed by
9    subsection (d).
10    This subsection (d-1) is exempt from the provisions of
11Section 250.
12    (e) Investment credit. A taxpayer shall be allowed a credit
13against the Personal Property Tax Replacement Income Tax for
14investment in qualified property.
15        (1) A taxpayer shall be allowed a credit equal to .5%
16    of the basis of qualified property placed in service during
17    the taxable year, provided such property is placed in
18    service on or after July 1, 1984. There shall be allowed an
19    additional credit equal to .5% of the basis of qualified
20    property placed in service during the taxable year,
21    provided such property is placed in service on or after
22    July 1, 1986, and the taxpayer's base employment within
23    Illinois has increased by 1% or more over the preceding
24    year as determined by the taxpayer's employment records
25    filed with the Illinois Department of Employment Security.
26    Taxpayers who are new to Illinois shall be deemed to have

 

 

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1    met the 1% growth in base employment for the first year in
2    which they file employment records with the Illinois
3    Department of Employment Security. The provisions added to
4    this Section by Public Act 85-1200 (and restored by Public
5    Act 87-895) shall be construed as declaratory of existing
6    law and not as a new enactment. If, in any year, the
7    increase in base employment within Illinois over the
8    preceding year is less than 1%, the additional credit shall
9    be limited to that percentage times a fraction, the
10    numerator of which is .5% and the denominator of which is
11    1%, but shall not exceed .5%. The investment credit shall
12    not be allowed to the extent that it would reduce a
13    taxpayer's liability in any tax year below zero, nor may
14    any credit for qualified property be allowed for any year
15    other than the year in which the property was placed in
16    service in Illinois. For tax years ending on or after
17    December 31, 1987, and on or before December 31, 1988, the
18    credit shall be allowed for the tax year in which the
19    property is placed in service, or, if the amount of the
20    credit exceeds the tax liability for that year, whether it
21    exceeds the original liability or the liability as later
22    amended, such excess may be carried forward and applied to
23    the tax liability of the 5 taxable years following the
24    excess credit years if the taxpayer (i) makes investments
25    which cause the creation of a minimum of 2,000 full-time
26    equivalent jobs in Illinois, (ii) is located in an

 

 

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1    enterprise zone established pursuant to the Illinois
2    Enterprise Zone Act and (iii) is certified by the
3    Department of Commerce and Community Affairs (now
4    Department of Commerce and Economic Opportunity) as
5    complying with the requirements specified in clause (i) and
6    (ii) by July 1, 1986. The Department of Commerce and
7    Community Affairs (now Department of Commerce and Economic
8    Opportunity) shall notify the Department of Revenue of all
9    such certifications immediately. For tax years ending
10    after December 31, 1988, the credit shall be allowed for
11    the tax year in which the property is placed in service,
12    or, if the amount of the credit exceeds the tax liability
13    for that year, whether it exceeds the original liability or
14    the liability as later amended, such excess may be carried
15    forward and applied to the tax liability of the 5 taxable
16    years following the excess credit years. The credit shall
17    be applied to the earliest year for which there is a
18    liability. If there is credit from more than one tax year
19    that is available to offset a liability, earlier credit
20    shall be applied first.
21        (2) The term "qualified property" means property
22    which:
23            (A) is tangible, whether new or used, including
24        buildings and structural components of buildings and
25        signs that are real property, but not including land or
26        improvements to real property that are not a structural

 

 

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1        component of a building such as landscaping, sewer
2        lines, local access roads, fencing, parking lots, and
3        other appurtenances;
4            (B) is depreciable pursuant to Section 167 of the
5        Internal Revenue Code, except that "3-year property"
6        as defined in Section 168(c)(2)(A) of that Code is not
7        eligible for the credit provided by this subsection
8        (e);
9            (C) is acquired by purchase as defined in Section
10        179(d) of the Internal Revenue Code;
11            (D) is used in Illinois by a taxpayer who is
12        primarily engaged in manufacturing, or in mining coal
13        or fluorite, or in retailing, or was placed in service
14        on or after July 1, 2006 in a River Edge Redevelopment
15        Zone established pursuant to the River Edge
16        Redevelopment Zone Act; and
17            (E) has not previously been used in Illinois in
18        such a manner and by such a person as would qualify for
19        the credit provided by this subsection (e) or
20        subsection (f).
21        (3) For purposes of this subsection (e),
22    "manufacturing" means the material staging and production
23    of tangible personal property by procedures commonly
24    regarded as manufacturing, processing, fabrication, or
25    assembling which changes some existing material into new
26    shapes, new qualities, or new combinations. For purposes of

 

 

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1    this subsection (e) the term "mining" shall have the same
2    meaning as the term "mining" in Section 613(c) of the
3    Internal Revenue Code. For purposes of this subsection (e),
4    the term "retailing" means the sale of tangible personal
5    property for use or consumption and not for resale, or
6    services rendered in conjunction with the sale of tangible
7    personal property for use or consumption and not for
8    resale. For purposes of this subsection (e), "tangible
9    personal property" has the same meaning as when that term
10    is used in the Retailers' Occupation Tax Act, and, for
11    taxable years ending after December 31, 2008, does not
12    include the generation, transmission, or distribution of
13    electricity.
14        (4) The basis of qualified property shall be the basis
15    used to compute the depreciation deduction for federal
16    income tax purposes.
17        (5) If the basis of the property for federal income tax
18    depreciation purposes is increased after it has been placed
19    in service in Illinois by the taxpayer, the amount of such
20    increase shall be deemed property placed in service on the
21    date of such increase in basis.
22        (6) The term "placed in service" shall have the same
23    meaning as under Section 46 of the Internal Revenue Code.
24        (7) If during any taxable year, any property ceases to
25    be qualified property in the hands of the taxpayer within
26    48 months after being placed in service, or the situs of

 

 

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1    any qualified property is moved outside Illinois within 48
2    months after being placed in service, the Personal Property
3    Tax Replacement Income Tax for such taxable year shall be
4    increased. Such increase shall be determined by (i)
5    recomputing the investment credit which would have been
6    allowed for the year in which credit for such property was
7    originally allowed by eliminating such property from such
8    computation and, (ii) subtracting such recomputed credit
9    from the amount of credit previously allowed. For the
10    purposes of this paragraph (7), a reduction of the basis of
11    qualified property resulting from a redetermination of the
12    purchase price shall be deemed a disposition of qualified
13    property to the extent of such reduction.
14        (8) Unless the investment credit is extended by law,
15    the basis of qualified property shall not include costs
16    incurred after December 31, 2018, except for costs incurred
17    pursuant to a binding contract entered into on or before
18    December 31, 2018.
19        (9) Each taxable year ending before December 31, 2000,
20    a partnership may elect to pass through to its partners the
21    credits to which the partnership is entitled under this
22    subsection (e) for the taxable year. A partner may use the
23    credit allocated to him or her under this paragraph only
24    against the tax imposed in subsections (c) and (d) of this
25    Section. If the partnership makes that election, those
26    credits shall be allocated among the partners in the

 

 

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1    partnership in accordance with the rules set forth in
2    Section 704(b) of the Internal Revenue Code, and the rules
3    promulgated under that Section, and the allocated amount of
4    the credits shall be allowed to the partners for that
5    taxable year. The partnership shall make this election on
6    its Personal Property Tax Replacement Income Tax return for
7    that taxable year. The election to pass through the credits
8    shall be irrevocable.
9        For taxable years ending on or after December 31, 2000,
10    a partner that qualifies its partnership for a subtraction
11    under subparagraph (I) of paragraph (2) of subsection (d)
12    of Section 203 or a shareholder that qualifies a Subchapter
13    S corporation for a subtraction under subparagraph (S) of
14    paragraph (2) of subsection (b) of Section 203 shall be
15    allowed a credit under this subsection (e) equal to its
16    share of the credit earned under this subsection (e) during
17    the taxable year by the partnership or Subchapter S
18    corporation, determined in accordance with the
19    determination of income and distributive share of income
20    under Sections 702 and 704 and Subchapter S of the Internal
21    Revenue Code. This paragraph is exempt from the provisions
22    of Section 250.
23    (f) Investment credit; Enterprise Zone; River Edge
24Redevelopment Zone.
25        (1) A taxpayer shall be allowed a credit against the
26    tax imposed by subsections (a) and (b) of this Section for

 

 

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1    investment in qualified property which is placed in service
2    in an Enterprise Zone created pursuant to the Illinois
3    Enterprise Zone Act or, for property placed in service on
4    or after July 1, 2006, a River Edge Redevelopment Zone
5    established pursuant to the River Edge Redevelopment Zone
6    Act. For partners, shareholders of Subchapter S
7    corporations, and owners of limited liability companies,
8    if the liability company is treated as a partnership for
9    purposes of federal and State income taxation, there shall
10    be allowed a credit under this subsection (f) to be
11    determined in accordance with the determination of income
12    and distributive share of income under Sections 702 and 704
13    and Subchapter S of the Internal Revenue Code. The credit
14    shall be .5% of the basis for such property. The credit
15    shall be available only in the taxable year in which the
16    property is placed in service in the Enterprise Zone or
17    River Edge Redevelopment Zone and shall not be allowed to
18    the extent that it would reduce a taxpayer's liability for
19    the tax imposed by subsections (a) and (b) of this Section
20    to below zero. For tax years ending on or after December
21    31, 1985, the credit shall be allowed for the tax year in
22    which the property is placed in service, or, if the amount
23    of the credit exceeds the tax liability for that year,
24    whether it exceeds the original liability or the liability
25    as later amended, such excess may be carried forward and
26    applied to the tax liability of the 5 taxable years

 

 

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1    following the excess credit year. The credit shall be
2    applied to the earliest year for which there is a
3    liability. If there is credit from more than one tax year
4    that is available to offset a liability, the credit
5    accruing first in time shall be applied first.
6        (2) The term qualified property means property which:
7            (A) is tangible, whether new or used, including
8        buildings and structural components of buildings;
9            (B) is depreciable pursuant to Section 167 of the
10        Internal Revenue Code, except that "3-year property"
11        as defined in Section 168(c)(2)(A) of that Code is not
12        eligible for the credit provided by this subsection
13        (f);
14            (C) is acquired by purchase as defined in Section
15        179(d) of the Internal Revenue Code;
16            (D) is used in the Enterprise Zone or River Edge
17        Redevelopment Zone by the taxpayer; and
18            (E) has not been previously used in Illinois in
19        such a manner and by such a person as would qualify for
20        the credit provided by this subsection (f) or
21        subsection (e).
22        (3) The basis of qualified property shall be the basis
23    used to compute the depreciation deduction for federal
24    income tax purposes.
25        (4) If the basis of the property for federal income tax
26    depreciation purposes is increased after it has been placed

 

 

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1    in service in the Enterprise Zone or River Edge
2    Redevelopment Zone by the taxpayer, the amount of such
3    increase shall be deemed property placed in service on the
4    date of such increase in basis.
5        (5) The term "placed in service" shall have the same
6    meaning as under Section 46 of the Internal Revenue Code.
7        (6) If during any taxable year, any property ceases to
8    be qualified property in the hands of the taxpayer within
9    48 months after being placed in service, or the situs of
10    any qualified property is moved outside the Enterprise Zone
11    or River Edge Redevelopment Zone within 48 months after
12    being placed in service, the tax imposed under subsections
13    (a) and (b) of this Section for such taxable year shall be
14    increased. Such increase shall be determined by (i)
15    recomputing the investment credit which would have been
16    allowed for the year in which credit for such property was
17    originally allowed by eliminating such property from such
18    computation, and (ii) subtracting such recomputed credit
19    from the amount of credit previously allowed. For the
20    purposes of this paragraph (6), a reduction of the basis of
21    qualified property resulting from a redetermination of the
22    purchase price shall be deemed a disposition of qualified
23    property to the extent of such reduction.
24        (7) There shall be allowed an additional credit equal
25    to 0.5% of the basis of qualified property placed in
26    service during the taxable year in a River Edge

 

 

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1    Redevelopment Zone, provided such property is placed in
2    service on or after July 1, 2006, and the taxpayer's base
3    employment within Illinois has increased by 1% or more over
4    the preceding year as determined by the taxpayer's
5    employment records filed with the Illinois Department of
6    Employment Security. Taxpayers who are new to Illinois
7    shall be deemed to have met the 1% growth in base
8    employment for the first year in which they file employment
9    records with the Illinois Department of Employment
10    Security. If, in any year, the increase in base employment
11    within Illinois over the preceding year is less than 1%,
12    the additional credit shall be limited to that percentage
13    times a fraction, the numerator of which is 0.5% and the
14    denominator of which is 1%, but shall not exceed 0.5%.
15    (g) (Blank).
16    (h) Investment credit; High Impact Business.
17        (1) Subject to subsections (b) and (b-5) of Section 5.5
18    of the Illinois Enterprise Zone Act, a taxpayer shall be
19    allowed a credit against the tax imposed by subsections (a)
20    and (b) of this Section for investment in qualified
21    property which is placed in service by a Department of
22    Commerce and Economic Opportunity designated High Impact
23    Business. The credit shall be .5% of the basis for such
24    property. The credit shall not be available (i) until the
25    minimum investments in qualified property set forth in
26    subdivision (a)(3)(A) of Section 5.5 of the Illinois

 

 

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1    Enterprise Zone Act have been satisfied or (ii) until the
2    time authorized in subsection (b-5) of the Illinois
3    Enterprise Zone Act for entities designated as High Impact
4    Businesses under subdivisions (a)(3)(B), (a)(3)(C), and
5    (a)(3)(D) of Section 5.5 of the Illinois Enterprise Zone
6    Act, and shall not be allowed to the extent that it would
7    reduce a taxpayer's liability for the tax imposed by
8    subsections (a) and (b) of this Section to below zero. The
9    credit applicable to such investments shall be taken in the
10    taxable year in which such investments have been completed.
11    The credit for additional investments beyond the minimum
12    investment by a designated high impact business authorized
13    under subdivision (a)(3)(A) of Section 5.5 of the Illinois
14    Enterprise Zone Act shall be available only in the taxable
15    year in which the property is placed in service and shall
16    not be allowed to the extent that it would reduce a
17    taxpayer's liability for the tax imposed by subsections (a)
18    and (b) of this Section to below zero. For tax years ending
19    on or after December 31, 1987, the credit shall be allowed
20    for the tax year in which the property is placed in
21    service, or, if the amount of the credit exceeds the tax
22    liability for that year, whether it exceeds the original
23    liability or the liability as later amended, such excess
24    may be carried forward and applied to the tax liability of
25    the 5 taxable years following the excess credit year. The
26    credit shall be applied to the earliest year for which

 

 

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1    there is a liability. If there is credit from more than one
2    tax year that is available to offset a liability, the
3    credit accruing first in time shall be applied first.
4        Changes made in this subdivision (h)(1) by Public Act
5    88-670 restore changes made by Public Act 85-1182 and
6    reflect existing law.
7        (2) The term qualified property means property which:
8            (A) is tangible, whether new or used, including
9        buildings and structural components of buildings;
10            (B) is depreciable pursuant to Section 167 of the
11        Internal Revenue Code, except that "3-year property"
12        as defined in Section 168(c)(2)(A) of that Code is not
13        eligible for the credit provided by this subsection
14        (h);
15            (C) is acquired by purchase as defined in Section
16        179(d) of the Internal Revenue Code; and
17            (D) is not eligible for the Enterprise Zone
18        Investment Credit provided by subsection (f) of this
19        Section.
20        (3) The basis of qualified property shall be the basis
21    used to compute the depreciation deduction for federal
22    income tax purposes.
23        (4) If the basis of the property for federal income tax
24    depreciation purposes is increased after it has been placed
25    in service in a federally designated Foreign Trade Zone or
26    Sub-Zone located in Illinois by the taxpayer, the amount of

 

 

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1    such increase shall be deemed property placed in service on
2    the date of such increase in basis.
3        (5) The term "placed in service" shall have the same
4    meaning as under Section 46 of the Internal Revenue Code.
5        (6) If during any taxable year ending on or before
6    December 31, 1996, any property ceases to be qualified
7    property in the hands of the taxpayer within 48 months
8    after being placed in service, or the situs of any
9    qualified property is moved outside Illinois within 48
10    months after being placed in service, the tax imposed under
11    subsections (a) and (b) of this Section for such taxable
12    year shall be increased. Such increase shall be determined
13    by (i) recomputing the investment credit which would have
14    been allowed for the year in which credit for such property
15    was originally allowed by eliminating such property from
16    such computation, and (ii) subtracting such recomputed
17    credit from the amount of credit previously allowed. For
18    the purposes of this paragraph (6), a reduction of the
19    basis of qualified property resulting from a
20    redetermination of the purchase price shall be deemed a
21    disposition of qualified property to the extent of such
22    reduction.
23        (7) Beginning with tax years ending after December 31,
24    1996, if a taxpayer qualifies for the credit under this
25    subsection (h) and thereby is granted a tax abatement and
26    the taxpayer relocates its entire facility in violation of

 

 

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1    the explicit terms and length of the contract under Section
2    18-183 of the Property Tax Code, the tax imposed under
3    subsections (a) and (b) of this Section shall be increased
4    for the taxable year in which the taxpayer relocated its
5    facility by an amount equal to the amount of credit
6    received by the taxpayer under this subsection (h).
7    (i) Credit for Personal Property Tax Replacement Income
8Tax. For tax years ending prior to December 31, 2003, a credit
9shall be allowed against the tax imposed by subsections (a) and
10(b) of this Section for the tax imposed by subsections (c) and
11(d) of this Section. This credit shall be computed by
12multiplying the tax imposed by subsections (c) and (d) of this
13Section by a fraction, the numerator of which is base income
14allocable to Illinois and the denominator of which is Illinois
15base income, and further multiplying the product by the tax
16rate imposed by subsections (a) and (b) of this Section.
17    Any credit earned on or after December 31, 1986 under this
18subsection which is unused in the year the credit is computed
19because it exceeds the tax liability imposed by subsections (a)
20and (b) for that year (whether it exceeds the original
21liability or the liability as later amended) may be carried
22forward and applied to the tax liability imposed by subsections
23(a) and (b) of the 5 taxable years following the excess credit
24year, provided that no credit may be carried forward to any
25year ending on or after December 31, 2003. This credit shall be
26applied first to the earliest year for which there is a

 

 

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1liability. If there is a credit under this subsection from more
2than one tax year that is available to offset a liability the
3earliest credit arising under this subsection shall be applied
4first.
5    If, during any taxable year ending on or after December 31,
61986, the tax imposed by subsections (c) and (d) of this
7Section for which a taxpayer has claimed a credit under this
8subsection (i) is reduced, the amount of credit for such tax
9shall also be reduced. Such reduction shall be determined by
10recomputing the credit to take into account the reduced tax
11imposed by subsections (c) and (d). If any portion of the
12reduced amount of credit has been carried to a different
13taxable year, an amended return shall be filed for such taxable
14year to reduce the amount of credit claimed.
15    (j) Training expense credit. Beginning with tax years
16ending on or after December 31, 1986 and prior to December 31,
172003, a taxpayer shall be allowed a credit against the tax
18imposed by subsections (a) and (b) under this Section for all
19amounts paid or accrued, on behalf of all persons employed by
20the taxpayer in Illinois or Illinois residents employed outside
21of Illinois by a taxpayer, for educational or vocational
22training in semi-technical or technical fields or semi-skilled
23or skilled fields, which were deducted from gross income in the
24computation of taxable income. The credit against the tax
25imposed by subsections (a) and (b) shall be 1.6% of such
26training expenses. For partners, shareholders of subchapter S

 

 

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1corporations, and owners of limited liability companies, if the
2liability company is treated as a partnership for purposes of
3federal and State income taxation, there shall be allowed a
4credit under this subsection (j) to be determined in accordance
5with the determination of income and distributive share of
6income under Sections 702 and 704 and subchapter S of the
7Internal Revenue Code.
8    Any credit allowed under this subsection which is unused in
9the year the credit is earned may be carried forward to each of
10the 5 taxable years following the year for which the credit is
11first computed until it is used. This credit shall be applied
12first to the earliest year for which there is a liability. If
13there is a credit under this subsection from more than one tax
14year that is available to offset a liability the earliest
15credit arising under this subsection shall be applied first. No
16carryforward credit may be claimed in any tax year ending on or
17after December 31, 2003.
18    (k) Research and development credit. For tax years ending
19after July 1, 1990 and prior to December 31, 2003, and
20beginning again for tax years ending on or after December 31,
212004, and ending prior to January 1, 2016, a taxpayer shall be
22allowed a credit against the tax imposed by subsections (a) and
23(b) of this Section for increasing research activities in this
24State. The credit allowed against the tax imposed by
25subsections (a) and (b) shall be equal to 6 1/2% of the
26qualifying expenditures for increasing research activities in

 

 

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1this State. For partners, shareholders of subchapter S
2corporations, and owners of limited liability companies, if the
3liability company is treated as a partnership for purposes of
4federal and State income taxation, there shall be allowed a
5credit under this subsection to be determined in accordance
6with the determination of income and distributive share of
7income under Sections 702 and 704 and subchapter S of the
8Internal Revenue Code.
9    For purposes of this subsection, "qualifying expenditures"
10means the qualifying expenditures as defined for the federal
11credit for increasing research activities which would be
12allowable under Section 41 of the Internal Revenue Code and
13which are conducted in this State, "qualifying expenditures for
14increasing research activities in this State" means the excess
15of qualifying expenditures for the taxable year in which
16incurred over qualifying expenditures for the base period,
17"qualifying expenditures for the base period" means the average
18of the qualifying expenditures for each year in the base
19period, and "base period" means the 3 taxable years immediately
20preceding the taxable year for which the determination is being
21made.
22    Any credit in excess of the tax liability for the taxable
23year may be carried forward. A taxpayer may elect to have the
24unused credit shown on its final completed return carried over
25as a credit against the tax liability for the following 5
26taxable years or until it has been fully used, whichever occurs

 

 

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1first; provided that no credit earned in a tax year ending
2prior to December 31, 2003 may be carried forward to any year
3ending on or after December 31, 2003.
4    If an unused credit is carried forward to a given year from
52 or more earlier years, that credit arising in the earliest
6year will be applied first against the tax liability for the
7given year. If a tax liability for the given year still
8remains, the credit from the next earliest year will then be
9applied, and so on, until all credits have been used or no tax
10liability for the given year remains. Any remaining unused
11credit or credits then will be carried forward to the next
12following year in which a tax liability is incurred, except
13that no credit can be carried forward to a year which is more
14than 5 years after the year in which the expense for which the
15credit is given was incurred.
16    No inference shall be drawn from this amendatory Act of the
1791st General Assembly in construing this Section for taxable
18years beginning before January 1, 1999.
19    (l) Environmental Remediation Tax Credit.
20        (i) For tax years ending after December 31, 1997 and on
21    or before December 31, 2001, a taxpayer shall be allowed a
22    credit against the tax imposed by subsections (a) and (b)
23    of this Section for certain amounts paid for unreimbursed
24    eligible remediation costs, as specified in this
25    subsection. For purposes of this Section, "unreimbursed
26    eligible remediation costs" means costs approved by the

 

 

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1    Illinois Environmental Protection Agency ("Agency") under
2    Section 58.14 of the Environmental Protection Act that were
3    paid in performing environmental remediation at a site for
4    which a No Further Remediation Letter was issued by the
5    Agency and recorded under Section 58.10 of the
6    Environmental Protection Act. The credit must be claimed
7    for the taxable year in which Agency approval of the
8    eligible remediation costs is granted. The credit is not
9    available to any taxpayer if the taxpayer or any related
10    party caused or contributed to, in any material respect, a
11    release of regulated substances on, in, or under the site
12    that was identified and addressed by the remedial action
13    pursuant to the Site Remediation Program of the
14    Environmental Protection Act. After the Pollution Control
15    Board rules are adopted pursuant to the Illinois
16    Administrative Procedure Act for the administration and
17    enforcement of Section 58.9 of the Environmental
18    Protection Act, determinations as to credit availability
19    for purposes of this Section shall be made consistent with
20    those rules. For purposes of this Section, "taxpayer"
21    includes a person whose tax attributes the taxpayer has
22    succeeded to under Section 381 of the Internal Revenue Code
23    and "related party" includes the persons disallowed a
24    deduction for losses by paragraphs (b), (c), and (f)(1) of
25    Section 267 of the Internal Revenue Code by virtue of being
26    a related taxpayer, as well as any of its partners. The

 

 

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1    credit allowed against the tax imposed by subsections (a)
2    and (b) shall be equal to 25% of the unreimbursed eligible
3    remediation costs in excess of $100,000 per site, except
4    that the $100,000 threshold shall not apply to any site
5    contained in an enterprise zone as determined by the
6    Department of Commerce and Community Affairs (now
7    Department of Commerce and Economic Opportunity). The
8    total credit allowed shall not exceed $40,000 per year with
9    a maximum total of $150,000 per site. For partners and
10    shareholders of subchapter S corporations, there shall be
11    allowed a credit under this subsection to be determined in
12    accordance with the determination of income and
13    distributive share of income under Sections 702 and 704 and
14    subchapter S of the Internal Revenue Code.
15        (ii) A credit allowed under this subsection that is
16    unused in the year the credit is earned may be carried
17    forward to each of the 5 taxable years following the year
18    for which the credit is first earned until it is used. The
19    term "unused credit" does not include any amounts of
20    unreimbursed eligible remediation costs in excess of the
21    maximum credit per site authorized under paragraph (i).
22    This credit shall be applied first to the earliest year for
23    which there is a liability. If there is a credit under this
24    subsection from more than one tax year that is available to
25    offset a liability, the earliest credit arising under this
26    subsection shall be applied first. A credit allowed under

 

 

HB3361- 29 -LRB100 10875 HLH 21110 b

1    this subsection may be sold to a buyer as part of a sale of
2    all or part of the remediation site for which the credit
3    was granted. The purchaser of a remediation site and the
4    tax credit shall succeed to the unused credit and remaining
5    carry-forward period of the seller. To perfect the
6    transfer, the assignor shall record the transfer in the
7    chain of title for the site and provide written notice to
8    the Director of the Illinois Department of Revenue of the
9    assignor's intent to sell the remediation site and the
10    amount of the tax credit to be transferred as a portion of
11    the sale. In no event may a credit be transferred to any
12    taxpayer if the taxpayer or a related party would not be
13    eligible under the provisions of subsection (i).
14        (iii) For purposes of this Section, the term "site"
15    shall have the same meaning as under Section 58.2 of the
16    Environmental Protection Act.
17    (m) Education expense credit. Beginning with tax years
18ending after December 31, 1999, a taxpayer who is the custodian
19of one or more qualifying pupils shall be allowed a credit
20against the tax imposed by subsections (a) and (b) of this
21Section for qualified education expenses incurred on behalf of
22the qualifying pupils. The credit shall be equal to 25% of
23qualified education expenses, but in no event may the total
24credit under this subsection claimed by a family that is the
25custodian of qualifying pupils exceed $500. In no event shall a
26credit under this subsection reduce the taxpayer's liability

 

 

HB3361- 30 -LRB100 10875 HLH 21110 b

1under this Act to less than zero. This subsection is exempt
2from the provisions of Section 250 of this Act.
3    For purposes of this subsection:
4    "Qualifying pupils" means individuals who (i) are
5residents of the State of Illinois, (ii) are under the age of
621 at the close of the school year for which a credit is
7sought, and (iii) during the school year for which a credit is
8sought were full-time pupils enrolled in a kindergarten through
9twelfth grade education program at any school, as defined in
10this subsection.
11    "Qualified education expense" means the amount incurred on
12behalf of a qualifying pupil in excess of $250 for tuition,
13book fees, and lab fees at the school in which the pupil is
14enrolled during the regular school year.
15    "School" means any public or nonpublic elementary or
16secondary school in Illinois that is in compliance with Title
17VI of the Civil Rights Act of 1964 and attendance at which
18satisfies the requirements of Section 26-1 of the School Code,
19except that nothing shall be construed to require a child to
20attend any particular public or nonpublic school to qualify for
21the credit under this Section.
22    "Custodian" means, with respect to qualifying pupils, an
23Illinois resident who is a parent, the parents, a legal
24guardian, or the legal guardians of the qualifying pupils.
25    (n) River Edge Redevelopment Zone site remediation tax
26credit.

 

 

HB3361- 31 -LRB100 10875 HLH 21110 b

1        (i) For tax years ending on or after December 31, 2006,
2    a taxpayer shall be allowed a credit against the tax
3    imposed by subsections (a) and (b) of this Section for
4    certain amounts paid for unreimbursed eligible remediation
5    costs, as specified in this subsection. For purposes of
6    this Section, "unreimbursed eligible remediation costs"
7    means costs approved by the Illinois Environmental
8    Protection Agency ("Agency") under Section 58.14a of the
9    Environmental Protection Act that were paid in performing
10    environmental remediation at a site within a River Edge
11    Redevelopment Zone for which a No Further Remediation
12    Letter was issued by the Agency and recorded under Section
13    58.10 of the Environmental Protection Act. The credit must
14    be claimed for the taxable year in which Agency approval of
15    the eligible remediation costs is granted. The credit is
16    not available to any taxpayer if the taxpayer or any
17    related party caused or contributed to, in any material
18    respect, a release of regulated substances on, in, or under
19    the site that was identified and addressed by the remedial
20    action pursuant to the Site Remediation Program of the
21    Environmental Protection Act. Determinations as to credit
22    availability for purposes of this Section shall be made
23    consistent with rules adopted by the Pollution Control
24    Board pursuant to the Illinois Administrative Procedure
25    Act for the administration and enforcement of Section 58.9
26    of the Environmental Protection Act. For purposes of this

 

 

HB3361- 32 -LRB100 10875 HLH 21110 b

1    Section, "taxpayer" includes a person whose tax attributes
2    the taxpayer has succeeded to under Section 381 of the
3    Internal Revenue Code and "related party" includes the
4    persons disallowed a deduction for losses by paragraphs
5    (b), (c), and (f)(1) of Section 267 of the Internal Revenue
6    Code by virtue of being a related taxpayer, as well as any
7    of its partners. The credit allowed against the tax imposed
8    by subsections (a) and (b) shall be equal to 25% of the
9    unreimbursed eligible remediation costs in excess of
10    $100,000 per site.
11        (ii) A credit allowed under this subsection that is
12    unused in the year the credit is earned may be carried
13    forward to each of the 5 taxable years following the year
14    for which the credit is first earned until it is used. This
15    credit shall be applied first to the earliest year for
16    which there is a liability. If there is a credit under this
17    subsection from more than one tax year that is available to
18    offset a liability, the earliest credit arising under this
19    subsection shall be applied first. A credit allowed under
20    this subsection may be sold to a buyer as part of a sale of
21    all or part of the remediation site for which the credit
22    was granted. The purchaser of a remediation site and the
23    tax credit shall succeed to the unused credit and remaining
24    carry-forward period of the seller. To perfect the
25    transfer, the assignor shall record the transfer in the
26    chain of title for the site and provide written notice to

 

 

HB3361- 33 -LRB100 10875 HLH 21110 b

1    the Director of the Illinois Department of Revenue of the
2    assignor's intent to sell the remediation site and the
3    amount of the tax credit to be transferred as a portion of
4    the sale. In no event may a credit be transferred to any
5    taxpayer if the taxpayer or a related party would not be
6    eligible under the provisions of subsection (i).
7        (iii) For purposes of this Section, the term "site"
8    shall have the same meaning as under Section 58.2 of the
9    Environmental Protection Act.
10    (n-1) Investment zone site remediation tax credit.
11        (i) For tax years beginning on or after January 1,
12    2018, a taxpayer shall be allowed a credit against the tax
13    imposed by subsections (a) and (b) of this Section for
14    certain amounts paid for unreimbursed eligible remediation
15    costs, as specified in this subsection. For purposes of
16    this Section, "unreimbursed eligible remediation costs"
17    means costs approved by the Illinois Environmental
18    Protection Agency ("Agency") under Section 58.14a of the
19    Environmental Protection Act that were paid in performing
20    environmental remediation at a site within an investment
21    zone for which a No Further Remediation Letter was issued
22    by the Agency and recorded under Section 58.10 of the
23    Environmental Protection Act. The credit must be claimed
24    for the taxable year in which Agency approval of the
25    eligible remediation costs is granted. The credit is not
26    available to any taxpayer if the taxpayer or any related

 

 

HB3361- 34 -LRB100 10875 HLH 21110 b

1    party caused or contributed to, in any material respect, a
2    release of regulated substances on, in, or under the site
3    that was identified and addressed by the remedial action
4    pursuant to the Site Remediation Program of the
5    Environmental Protection Act. Determinations as to credit
6    availability for purposes of this Section shall be made
7    consistent with rules adopted by the Pollution Control
8    Board pursuant to the Illinois Administrative Procedure
9    Act for the administration and enforcement of Section 58.9
10    of the Environmental Protection Act. For purposes of this
11    Section, "taxpayer" includes a person whose tax attributes
12    the taxpayer has succeeded to under Section 381 of the
13    Internal Revenue Code and "related party" includes the
14    persons disallowed a deduction for losses by paragraphs
15    (b), (c), and (f)(1) of Section 267 of the Internal Revenue
16    Code by virtue of being a related taxpayer, as well as any
17    of its partners. The credit allowed against the tax imposed
18    by subsections (a) and (b) shall be equal to 25% of the
19    unreimbursed eligible remediation costs in excess of
20    $100,000 per site.
21        (ii) A credit allowed under this subsection that is
22    unused in the year the credit is earned may be carried
23    forward to each of the 5 taxable years following the year
24    for which the credit is first earned until it is used. This
25    credit shall be applied first to the earliest year for
26    which there is a liability. If there is a credit under this

 

 

HB3361- 35 -LRB100 10875 HLH 21110 b

1    subsection from more than one tax year that is available to
2    offset a liability, the earliest credit arising under this
3    subsection shall be applied first. A credit allowed under
4    this subsection may be sold to a buyer as part of a sale of
5    all or part of the remediation site for which the credit
6    was granted. The purchaser of a remediation site and the
7    tax credit shall succeed to the unused credit and remaining
8    carry-forward period of the seller. To perfect the
9    transfer, the assignor shall record the transfer in the
10    chain of title for the site and provide written notice to
11    the Director of Revenue of the assignor's intent to sell
12    the remediation site and the amount of the tax credit to be
13    transferred as a portion of the sale. In no event may a
14    credit be transferred to any taxpayer if the taxpayer or a
15    related party would not be eligible under the provisions of
16    subsection (i).
17        (iii) For the purposes of this subsection, "investment
18    zone" means an area designated as an investment zone by the
19    Department of Commerce and Economic Opportunity. An area is
20    eligible for designation as an investment zone if the
21    median household income is less than 125% of the federal
22    poverty level. The corporate authorities of the
23    municipality in which a prospective investment zone is
24    located may apply with the Department of Commerce and
25    Economic Opportunity to have the area designated as an
26    investment zone in the form and manner required by the

 

 

HB3361- 36 -LRB100 10875 HLH 21110 b

1    Department.
2        (iv) The credit under this subsection (n-1) is exempt
3    from the provisions of Section 250.
4    (o) For each of taxable years during the Compassionate Use
5of Medical Cannabis Pilot Program, a surcharge is imposed on
6all taxpayers on income arising from the sale or exchange of
7capital assets, depreciable business property, real property
8used in the trade or business, and Section 197 intangibles of
9an organization registrant under the Compassionate Use of
10Medical Cannabis Pilot Program Act. The amount of the surcharge
11is equal to the amount of federal income tax liability for the
12taxable year attributable to those sales and exchanges. The
13surcharge imposed does not apply if:
14        (1) the medical cannabis cultivation center
15    registration, medical cannabis dispensary registration, or
16    the property of a registration is transferred as a result
17    of any of the following:
18            (A) bankruptcy, a receivership, or a debt
19        adjustment initiated by or against the initial
20        registration or the substantial owners of the initial
21        registration;
22            (B) cancellation, revocation, or termination of
23        any registration by the Illinois Department of Public
24        Health;
25            (C) a determination by the Illinois Department of
26        Public Health that transfer of the registration is in

 

 

HB3361- 37 -LRB100 10875 HLH 21110 b

1        the best interests of Illinois qualifying patients as
2        defined by the Compassionate Use of Medical Cannabis
3        Pilot Program Act;
4            (D) the death of an owner of the equity interest in
5        a registrant;
6            (E) the acquisition of a controlling interest in
7        the stock or substantially all of the assets of a
8        publicly traded company;
9            (F) a transfer by a parent company to a wholly
10        owned subsidiary; or
11            (G) the transfer or sale to or by one person to
12        another person where both persons were initial owners
13        of the registration when the registration was issued;
14        or
15        (2) the cannabis cultivation center registration,
16    medical cannabis dispensary registration, or the
17    controlling interest in a registrant's property is
18    transferred in a transaction to lineal descendants in which
19    no gain or loss is recognized or as a result of a
20    transaction in accordance with Section 351 of the Internal
21    Revenue Code in which no gain or loss is recognized.
22(Source: P.A. 97-2, eff. 5-6-11; 97-636, eff. 6-1-12; 97-905,
23eff. 8-7-12; 98-109, eff. 7-25-13; 98-122, eff. 1-1-14; 98-756,
24eff. 7-16-14.)
 
25    (35 ILCS 5/216)

 

 

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1    Sec. 216. Credit for wages paid to ex-felons.
2    (a) For each taxable year beginning on or after January 1,
32007, each taxpayer is entitled to a credit against the tax
4imposed by subsections (a) and (b) of Section 201 of this Act
5in an amount equal to a portion of the 5% of qualified wages
6paid by the taxpayer during the taxable year to one or more
7Illinois residents who are qualified ex-offenders. For tax
8years beginning prior to January 1, 2017, the amount of the
9credit shall be equal to 5% of qualified wages paid by the
10taxpayer during the taxable year to one or more Illinois
11residents who are qualified ex-offenders. For tax years
12beginning on or after January 1, 2017, the amount of the credit
13shall be equal to 25% of qualified wages paid by the taxpayer
14during the taxable year to one or more Illinois residents who
15are qualified ex-offenders. The total credit allowed to a
16taxpayer with respect to each qualified ex-offender may not
17exceed (i) $1,500 for taxable years beginning prior to January
181, 2017 and (ii) $2,500 for all taxable years beginning on or
19after January 1, 2017. For partners, shareholders of Subchapter
20S corporations, and owners of limited liability companies, if
21the liability company is treated as a partnership for purposes
22of federal and State income taxation, there shall be allowed a
23credit under this Section to be determined in accordance with
24the determination of income and distributive share of income
25under Sections 702 and 704 and Subchapter S of the Internal
26Revenue Code.

 

 

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1    (b) For purposes of this Section, "qualified wages":
2        (1) includes only wages that are subject to federal
3    unemployment tax under Section 3306 of the Internal Revenue
4    Code, without regard to any dollar limitation contained in
5    that Section;
6        (2) does not include any amounts paid or incurred by an
7    employer for any period to any qualified ex-offender for
8    whom the employer receives federally funded payments for
9    on-the-job training of that qualified ex-offender for that
10    period; and
11        (3) includes only wages attributable to service
12    rendered during the one-year period beginning with the day
13    the qualified ex-offender begins work for the employer.
14    If the taxpayer has received any payment from a program
15established under Section 482(e)(1) of the federal Social
16Security Act with respect to a qualified ex-offender, then, for
17purposes of calculating the credit under this Section, the
18amount of the qualified wages paid to that qualified
19ex-offender must be reduced by the amount of the payment.
20    (c) For purposes of this Section, "qualified ex-offender"
21means any person who:
22        (1) has been convicted of a crime in this State or of
23    an offense in any other jurisdiction, not including any
24    offense or attempted offense that would subject a person to
25    registration under the Sex Offender Registration Act;
26        (2) was sentenced to a period of incarceration in an

 

 

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1    Illinois adult correctional center; and
2        (3) was hired by the taxpayer within 2 3 years after
3    being released from an Illinois adult correctional center;
4    and .
5        (4) has completed a job skills training program or a
6    job readiness program under Section 9A-9 of the Illinois
7    Public Aid Code.
8    (d) In no event shall a credit under this Section reduce
9the taxpayer's liability to less than zero. If the amount of
10the credit exceeds the tax liability for the year, the excess
11may be carried forward and applied to the tax liability of the
125 taxable years following the excess credit year. The tax
13credit shall be applied to the earliest year for which there is
14a tax liability. If there are credits for more than one year
15that are available to offset a liability, the earlier credit
16shall be applied first.
17    (e) This Section is exempt from the provisions of Section
18250.
19(Source: P.A. 98-165, eff. 8-5-13.)
 
20    Section 10. The Retailers' Occupation Tax Act is amended by
21changing Section 5k as follows:
 
22    (35 ILCS 120/5k)  (from Ch. 120, par. 444k)
23    Sec. 5k. Building materials exemption; enterprise zone.
24    (a) Each retailer who makes a qualified sale of building

 

 

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1materials to be incorporated into real estate in an investment
2zone established under subsection (n-1) of Section 201 of the
3Illinois Income Tax Act or an enterprise zone established by a
4county or municipality under the Illinois Enterprise Zone Act
5by remodeling, rehabilitation or new construction, may deduct
6receipts from such sales when calculating the tax imposed by
7this Act. For purposes of this Section, before July 1, 2013,
8"qualified sale" means a sale of building materials that will
9be incorporated into real estate as part of a building project
10for which a Certificate of Eligibility for Sales Tax Exemption
11has been issued by the administrator of the enterprise zone in
12which the building project is located, and on and after July 1,
132013, "qualified sale" means a sale of building materials that
14will be incorporated into real estate as part of a building
15project for which an Enterprise Zone Building Materials
16Exemption Certificate or an Investment Zone Building Materials
17Exemption Certificate has been issued to the purchaser by the
18Department. A construction contractor or other entity shall not
19make tax-free purchases unless it has an active Exemption
20Certificate issued by the Department at the time of the
21purchase.
22    (b) Before July 1, 2013, to document the exemption allowed
23under this Section, the retailer must obtain from the purchaser
24a copy of the Certificate of Eligibility for Sales Tax
25Exemption issued by the administrator of the enterprise zone
26into which the building materials will be incorporated. On and

 

 

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1after July 1, 2013, to document the exemption allowed under
2this Section, the retailer must obtain from the purchaser the
3certification required under subsection (c), which must
4contain the Enterprise Zone Building Materials Exemption
5Certificate number issued to the purchaser by the Department.
6Upon request from the enterprise zone administrator, the
7Department shall issue an Enterprise Zone Building Materials
8Exemption Certificate for each construction contractor or
9other entity identified by the enterprise zone administrator.
10Upon request from the corporate authorities of the municipality
11in which an investment zone is located, the Department shall
12issue an Investment Zone Building Materials Exemption
13Certificate for each construction contractor or other entity
14identified by the corporate authorities. The Department shall
15make the Exemption Certificates available directly to each
16enterprise zone administrator, construction contractor, or
17other entity. The request for Enterprise Zone Building
18Materials Exemption Certificates from the enterprise zone
19administrator or the corporate authorities to the Department
20must include the following information:
21        (1) the name and address of the construction contractor
22    or other entity;
23        (2) the name and number of the enterprise zone or
24    investment zone;
25        (3) the name and location or address of the building
26    project in the enterprise zone or investment zone;

 

 

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1        (4) the estimated amount of the exemption for each
2    construction contractor or other entity for which a request
3    for Exemption Certificate is made, based on a stated
4    estimated average tax rate and the percentage of the
5    contract that consists of materials;
6        (5) the period of time over which supplies for the
7    project are expected to be purchased; and
8        (6) other reasonable information as the Department may
9    require, including, but not limited to FEIN numbers, to
10    determine if the contractor or other entity, or any
11    partner, or a corporate officer, and in the case of a
12    limited liability company, any manager or member, of the
13    construction contractor or other entity, is or has been the
14    owner, a partner, a corporate officer, and in the case of a
15    limited liability company, a manager or member, of a person
16    that is in default for moneys due to the Department under
17    this Act or any other tax or fee Act administered by the
18    Department.
19    The Department shall issue the Enterprise Zone Building
20Materials Exemption Certificates within 3 business days after
21receipt of request from the zone administrator or corporate
22authorities. This requirement does not apply in circumstances
23where the Department, for reasonable cause, is unable to issue
24the Exemption Certificate within 3 business days. The
25Department may refuse to issue an Exemption Certificate if the
26owner, any partner, or a corporate officer, and in the case of

 

 

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1a limited liability company, any manager or member, of the
2construction contractor or other entity is or has been the
3owner, a partner, a corporate officer, and in the case of a
4limited liability company, a manager or member, of a person
5that is in default for moneys due to the Department under this
6Act or any other tax or fee Act administered by the Department.
7The Enterprise Zone Building Materials Exemption Certificate
8shall contain language stating that if the construction
9contractor or other entity who is issued the Exemption
10Certificate makes a tax-exempt purchase, as described in this
11Section, that is not eligible for exemption under this Section
12or allows another person to make a tax-exempt purchase, as
13described in this Section, that is not eligible for exemption
14under this Section, then, in addition to any tax or other
15penalty imposed, the construction contractor or other entity is
16subject to a penalty equal to the tax that would have been paid
17by the retailer under this Act as well as any applicable local
18retailers' occupation tax on the purchase that is not eligible
19for the exemption.
20    The Department, in its discretion, may require that
21requests the request for Enterprise Zone Building Materials
22Exemption Certificates be submitted electronically. The
23Department may, in its discretion, issue the Exemption
24Certificates electronically. The Enterprise Zone Building
25Materials Exemption Certificate number shall be designed in
26such a way that the Department can identify from the unique

 

 

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1number on the Exemption Certificate issued to a given
2construction contractor or other entity, the name of the
3Enterprise Zone or Investment Zone, the project for which the
4Exemption Certificate is issued, and the construction
5contractor or other entity to whom the Exemption Certificate is
6issued. The Exemption Certificate shall contain an expiration
7date, which shall be no more than 2 years after the date of
8issuance. At the request of the zone administrator, the
9Department may renew an Exemption Certificate. After the
10Department issues Exemption Certificates for a given
11enterprise zone project, the enterprise zone administrator or
12corporate authorities may notify the Department of additional
13construction contractors or other entities eligible for an
14Enterprise Zone Building Materials Exemption Certificate. Upon
15notification by the enterprise zone administrator or corporate
16authorities and subject to the other provisions of this
17subsection (b), the Department shall issue an Enterprise Zone
18Building Materials Exemption Certificate to each additional
19construction contractor or other entity identified by the
20enterprise zone administrator or corporate authorities. An
21enterprise zone administrator may notify the Department to
22rescind an Enterprise Zone Building Materials Exemption
23Certificate previously issued by the Department but that has
24not yet expired; the corporate authorities of the municipality
25may notify the Department to rescind an Investment Zone
26Building Materials Exemption Certificate previously issued by

 

 

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1the Department but that has not yet expired. Upon such
2notification by the enterprise zone administrator and subject
3to the other provisions of this subsection (b), the Department
4shall issue the rescission of the Enterprise Zone Building
5Materials Exemption Certificate to the construction contractor
6or other entity identified by the enterprise zone administrator
7or corporate authorities and provide a copy to the enterprise
8zone administrator or corporate authorities.
9    If the Department of Revenue determines that a construction
10contractor or other entity that was issued an Exemption
11Certificate under this subsection (b) made a tax-exempt
12purchase, as described in this Section, that was not eligible
13for exemption under this Section or allowed another person to
14make a tax-exempt purchase, as described in this Section, that
15was not eligible for exemption under this Section, then, in
16addition to any tax or other penalty imposed, the construction
17contractor or other entity is subject to a penalty equal to the
18tax that would have been paid by the retailer under this Act as
19well as any applicable local retailers' occupation tax on the
20purchase that was not eligible for the exemption.
21    (c) In addition, the retailer must obtain certification
22from the purchaser that contains:
23        (1) a statement that the building materials are being
24    purchased for incorporation into real estate located in an
25    Illinois enterprise zone or investment zone;
26        (2) the location or address of the real estate into

 

 

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1    which the building materials will be incorporated;
2        (3) the name of the enterprise zone in which that real
3    estate is located;
4        (4) a description of the building materials being
5    purchased;
6        (5) on and after July 1, 2013, the purchaser's
7    Enterprise Zone Building Materials Exemption Certificate
8    number issued by the Department; and
9        (6) the purchaser's signature and date of purchase.
10    (d) The deduction allowed by this Section for the sale of
11building materials may be limited, to the extent authorized by
12ordinance, adopted after the effective date of this amendatory
13Act of 1992, by the municipality or county that created the
14enterprise zone into which the building materials will be
15incorporated. The ordinance, however, may neither require nor
16prohibit the purchase of building materials from any retailer
17or class of retailers in order to qualify for the exemption
18allowed under this Section. The provisions of this Section are
19exempt from Section 2-70.
20    (e) Notwithstanding anything to the contrary in this
21Section, for enterprise zone projects already in existence and
22for which construction contracts are already in place on July
231, 2013, the request for Enterprise Zone Building Materials
24Exemption Certificates from the enterprise zone administrator
25to the Department for these pre-existing construction
26contractors and other entities must include the information

 

 

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1required under subsection (b), but not including the
2information listed in items (4) and (5). For any new
3construction contract entered into on or after July 1, 2013,
4however, all of the information in subsection (b) must be
5provided.
6(Source: P.A. 97-905, eff. 8-7-12; 98-109, eff. 7-25-13.)
 
7    Section 15. The Environmental Protection Act is amended by
8changing Section 58.14a as follows:
 
9    (415 ILCS 5/58.14a)
10    Sec. 58.14a. River Edge Redevelopment Zone Site
11Remediation Tax Credit Review.
12    (a) Prior to applying for the River Edge Redevelopment Zone
13site remediation tax credit under subsection (n) of Section 201
14of the Illinois Income Tax Act or an investment zone site
15remediation tax credit under subsection (n-5) of the Illinois
16Income Tax Act, a Remediation Applicant must first submit to
17the Agency an application for review of remediation costs. The
18Agency shall review the application in consultation with the
19Department of Commerce and Economic Opportunity. The
20application and review process must be conducted in accordance
21with the requirements of this Section and the rules adopted
22under subsection (g). A preliminary review of the estimated
23remediation costs for development and implementation of the
24Remedial Action Plan may be obtained in accordance with

 

 

HB3361- 49 -LRB100 10875 HLH 21110 b

1subsection (d).
2    (b) No application for review may be submitted until a No
3Further Remediation Letter has been issued by the Agency and
4recorded in the chain of title for the site in accordance with
5Section 58.10. The Agency shall review the application to
6determine whether the costs submitted are remediation costs and
7whether the costs incurred are reasonable. The application must
8be on forms prescribed and provided by the Agency. At a
9minimum, the application must include the following:
10        (1) information identifying the Remediation Applicant,
11    the site for which the tax credit is being sought, and the
12    date of acceptance of the site into the Site Remediation
13    Program;
14        (2) a copy of the No Further Remediation Letter with
15    official verification that the letter has been recorded in
16    the chain of title for the site and a demonstration that
17    the site for which the application is submitted is the same
18    site as the one for which the No Further Remediation Letter
19    is issued;
20        (3) a demonstration that the release of the regulated
21    substances of concern for which the No Further Remediation
22    Letter was issued were not caused or contributed to in any
23    material respect by the Remediation Applicant.
24    Determinations as to credit availability shall be made
25    consistent with the Pollution Control Board rules for the
26    administration and enforcement of Section 58.9 of this Act;

 

 

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1        (4) an itemization and documentation, including
2    receipts, of the remediation costs incurred;
3        (5) a demonstration that the costs incurred are
4    remediation costs as defined in this Act and its rules;
5        (6) a demonstration that the costs submitted for review
6    were incurred by the Remediation Applicant who received the
7    No Further Remediation Letter;
8        (7) an application fee in the amount set forth in
9    subsection (e) for each site for which review of
10    remediation costs is requested and, if applicable,
11    certification from the Department of Commerce and Economic
12    Opportunity that the site is located in a River Edge
13    Redevelopment Zone or an Investment Zone; and
14        (8) any other information deemed appropriate by the
15    Agency.
16    (c) Within 60 days after receipt by the Agency of an
17application meeting the requirements of subsection (b), the
18Agency shall issue a letter to the applicant approving,
19disapproving, or modifying the remediation costs submitted in
20the application. If the remediation costs are approved as
21submitted, then the Agency's letter must state the amount of
22the remediation costs to be applied toward the River Edge
23Redevelopment Zone site remediation tax credit. If an
24application is disapproved or approved with modification of
25remediation costs, then the Agency's letter must set forth the
26reasons for the disapproval or modification and must state the

 

 

HB3361- 51 -LRB100 10875 HLH 21110 b

1amount of the remediation costs, if any, to be applied toward
2the River Edge Redevelopment Zone site remediation tax credit.
3    If a preliminary review of a budget plan has been obtained
4under subsection (d), then the Remediation Applicant may
5submit, with the application and supporting documentation
6under subsection (b), a copy of the Agency's final
7determination accompanied by a certification that the actual
8remediation costs incurred for the development and
9implementation of the Remedial Action Plan are equal to or less
10than the costs approved in the Agency's final determination on
11the budget plan. The certification must be signed by the
12Remediation Applicant and notarized. Based on that submission,
13the Agency is not required to conduct further review of the
14costs incurred for development and implementation of the
15Remedial Action Plan, and it may approve the costs as
16submitted. Within 35 days after the receipt of an Agency letter
17disapproving or modifying an application for approval of
18remediation costs, the Remediation Applicant may appeal the
19Agency's decision to the Board in the manner provided for the
20review of permits under Section 40 of this Act.
21    (d) A Remediation Applicant may obtain a preliminary review
22of estimated remediation costs for the development and
23implementation of the Remedial Action Plan by submitting a
24budget plan along with the Remedial Action Plan. The budget
25plan must be set forth on forms prescribed and provided by the
26Agency and must include, without limitation, line-item

 

 

HB3361- 52 -LRB100 10875 HLH 21110 b

1estimates of the costs associated with each line item (such as
2personnel, equipment, and materials) that the Remediation
3Applicant anticipates will be incurred for the development and
4implementation of the Remedial Action Plan. The Agency shall
5review the budget plan along with the Remedial Action Plan to
6determine whether the estimated costs submitted are
7remediation costs and whether the costs estimated for the
8activities are reasonable.
9    If the Remedial Action Plan is amended by the Remediation
10Applicant or as a result of Agency action, then the
11corresponding budget plan must be revised accordingly and
12resubmitted for Agency review.
13    The budget plan must be accompanied by the applicable fee
14as set forth in subsection (e).
15    The submittal of a budget plan is deemed to be an automatic
1660-day waiver of the Remedial Action Plan review deadlines set
17forth in this Section and its rules.
18    Within the applicable period of review, the Agency shall
19issue a letter to the Remediation Applicant approving,
20disapproving, or modifying the estimated remediation costs
21submitted in the budget plan. If a budget plan is disapproved
22or approved with modification of estimated remediation costs,
23then the Agency's letter must set forth the reasons for the
24disapproval or modification.
25    Within 35 days after receipt of an Agency letter
26disapproving or modifying a budget plan, the Remediation

 

 

HB3361- 53 -LRB100 10875 HLH 21110 b

1Applicant may appeal the Agency's decision to the Board in the
2manner provided for the review of permits under Section 40 of
3this Act.
4    (e) Any fee for a review conducted under this Section is in
5addition to any other fees or payments for Agency services
6rendered under the Site Remediation Program. The fees under
7this Section are as follows:
8        (1) the fee for an application for review of
9    remediation costs is $250 for each site reviewed; and
10        (2) there is no fee for the review of the budget plan
11    submitted under subsection (d).
12    The application fee must be made payable to the State of
13Illinois, for deposit into the Hazardous Waste Fund. Pursuant
14to appropriation, the Agency shall use the fees collected under
15this subsection for development and administration of the
16review program.
17    (f) The Agency has the authority to enter into any
18contracts or agreements that may be necessary to carry out its
19duties and responsibilities under this Section.
20    (g) The Agency shall adopt rules prescribing procedures and
21standards for its administration of this Section. Prior to the
22effective date of rules adopted under this Section, the Agency
23may conduct reviews of applications under this Section. The
24Agency may publish informal guidelines concerning this Section
25to provide guidance.
26(Source: P.A. 95-454, eff. 8-27-07.)