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| | 100TH GENERAL ASSEMBLY
State of Illinois
2017 and 2018 HB4775 Introduced , by Rep. Jaime M. Andrade, Jr. SYNOPSIS AS INTRODUCED: |
| 35 ILCS 5/203 | from Ch. 120, par. 2-203 |
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Amends the Illinois Income Tax Act. Creates a deduction in an amount equal to the difference between (i) the amount paid by the taxpayer in property taxes during the taxable year and (ii) $10,000, but not to exceed $5,000 per taxpayer in any taxable year. Effective immediately.
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| | | FISCAL NOTE ACT MAY APPLY | |
| | A BILL FOR |
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1 | | AN ACT concerning revenue.
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2 | | Be it enacted by the People of the State of Illinois,
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3 | | represented in the General Assembly:
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4 | | Section 5. The Illinois Income Tax Act is amended by |
5 | | changing Section 203 as follows: |
6 | | (35 ILCS 5/203) (from Ch. 120, par. 2-203) |
7 | | Sec. 203. Base income defined. |
8 | | (a) Individuals. |
9 | | (1) In general. In the case of an individual, base |
10 | | income means an
amount equal to the taxpayer's adjusted |
11 | | gross income for the taxable
year as modified by paragraph |
12 | | (2). |
13 | | (2) Modifications. The adjusted gross income referred |
14 | | to in
paragraph (1) shall be modified by adding thereto the |
15 | | sum of the
following amounts: |
16 | | (A) An amount equal to all amounts paid or accrued |
17 | | to the taxpayer
as interest or dividends during the |
18 | | taxable year to the extent excluded
from gross income |
19 | | in the computation of adjusted gross income, except |
20 | | stock
dividends of qualified public utilities |
21 | | described in Section 305(e) of the
Internal Revenue |
22 | | Code; |
23 | | (B) An amount equal to the amount of tax imposed by |
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1 | | this Act to the
extent deducted from gross income in |
2 | | the computation of adjusted gross
income for the |
3 | | taxable year; |
4 | | (C) An amount equal to the amount received during |
5 | | the taxable year
as a recovery or refund of real |
6 | | property taxes paid with respect to the
taxpayer's |
7 | | principal residence under the Revenue Act of
1939 and |
8 | | for which a deduction was previously taken under |
9 | | subparagraph (L) of
this paragraph (2) prior to July 1, |
10 | | 1991, the retrospective application date of
Article 4 |
11 | | of Public Act 87-17. In the case of multi-unit or |
12 | | multi-use
structures and farm dwellings, the taxes on |
13 | | the taxpayer's principal residence
shall be that |
14 | | portion of the total taxes for the entire property |
15 | | which is
attributable to such principal residence; |
16 | | (D) An amount equal to the amount of the capital |
17 | | gain deduction
allowable under the Internal Revenue |
18 | | Code, to the extent deducted from gross
income in the |
19 | | computation of adjusted gross income; |
20 | | (D-5) An amount, to the extent not included in |
21 | | adjusted gross income,
equal to the amount of money |
22 | | withdrawn by the taxpayer in the taxable year from
a |
23 | | medical care savings account and the interest earned on |
24 | | the account in the
taxable year of a withdrawal |
25 | | pursuant to subsection (b) of Section 20 of the
Medical |
26 | | Care Savings Account Act or subsection (b) of Section |
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1 | | 20 of the
Medical Care Savings Account Act of 2000; |
2 | | (D-10) For taxable years ending after December 31, |
3 | | 1997, an
amount equal to any eligible remediation costs |
4 | | that the individual
deducted in computing adjusted |
5 | | gross income and for which the
individual claims a |
6 | | credit under subsection (l) of Section 201; |
7 | | (D-15) For taxable years 2001 and thereafter, an |
8 | | amount equal to the
bonus depreciation deduction taken |
9 | | on the taxpayer's federal income tax return for the |
10 | | taxable
year under subsection (k) of Section 168 of the |
11 | | Internal Revenue Code; |
12 | | (D-16) If the taxpayer sells, transfers, abandons, |
13 | | or otherwise disposes of property for which the |
14 | | taxpayer was required in any taxable year to
make an |
15 | | addition modification under subparagraph (D-15), then |
16 | | an amount equal
to the aggregate amount of the |
17 | | deductions taken in all taxable
years under |
18 | | subparagraph (Z) with respect to that property. |
19 | | If the taxpayer continues to own property through |
20 | | the last day of the last tax year for which the |
21 | | taxpayer may claim a depreciation deduction for |
22 | | federal income tax purposes and for which the taxpayer |
23 | | was allowed in any taxable year to make a subtraction |
24 | | modification under subparagraph (Z), then an amount |
25 | | equal to that subtraction modification.
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26 | | The taxpayer is required to make the addition |
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1 | | modification under this
subparagraph
only once with |
2 | | respect to any one piece of property; |
3 | | (D-17) An amount equal to the amount otherwise |
4 | | allowed as a deduction in computing base income for |
5 | | interest paid, accrued, or incurred, directly or |
6 | | indirectly, (i) for taxable years ending on or after |
7 | | December 31, 2004, to a foreign person who would be a |
8 | | member of the same unitary business group but for the |
9 | | fact that foreign person's business activity outside |
10 | | the United States is 80% or more of the foreign |
11 | | person's total business activity and (ii) for taxable |
12 | | years ending on or after December 31, 2008, to a person |
13 | | who would be a member of the same unitary business |
14 | | group but for the fact that the person is prohibited |
15 | | under Section 1501(a)(27) from being included in the |
16 | | unitary business group because he or she is ordinarily |
17 | | required to apportion business income under different |
18 | | subsections of Section 304. The addition modification |
19 | | required by this subparagraph shall be reduced to the |
20 | | extent that dividends were included in base income of |
21 | | the unitary group for the same taxable year and |
22 | | received by the taxpayer or by a member of the |
23 | | taxpayer's unitary business group (including amounts |
24 | | included in gross income under Sections 951 through 964 |
25 | | of the Internal Revenue Code and amounts included in |
26 | | gross income under Section 78 of the Internal Revenue |
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1 | | Code) with respect to the stock of the same person to |
2 | | whom the interest was paid, accrued, or incurred. |
3 | | This paragraph shall not apply to the following:
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4 | | (i) an item of interest paid, accrued, or |
5 | | incurred, directly or indirectly, to a person who |
6 | | is subject in a foreign country or state, other |
7 | | than a state which requires mandatory unitary |
8 | | reporting, to a tax on or measured by net income |
9 | | with respect to such interest; or |
10 | | (ii) an item of interest paid, accrued, or |
11 | | incurred, directly or indirectly, to a person if |
12 | | the taxpayer can establish, based on a |
13 | | preponderance of the evidence, both of the |
14 | | following: |
15 | | (a) the person, during the same taxable |
16 | | year, paid, accrued, or incurred, the interest |
17 | | to a person that is not a related member, and |
18 | | (b) the transaction giving rise to the |
19 | | interest expense between the taxpayer and the |
20 | | person did not have as a principal purpose the |
21 | | avoidance of Illinois income tax, and is paid |
22 | | pursuant to a contract or agreement that |
23 | | reflects an arm's-length interest rate and |
24 | | terms; or
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25 | | (iii) the taxpayer can establish, based on |
26 | | clear and convincing evidence, that the interest |
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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
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5 | | (iv) an item of interest paid, accrued, or |
6 | | incurred, directly or indirectly, to a person if |
7 | | the taxpayer establishes by clear and convincing |
8 | | evidence that the adjustments are unreasonable; or |
9 | | if the taxpayer and the Director agree in writing |
10 | | to the application or use of an alternative method |
11 | | of apportionment under Section 304(f).
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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;
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21 | | (D-18) An amount equal to the amount of intangible |
22 | | expenses and costs otherwise allowed as a deduction in |
23 | | computing base income, and that were paid, accrued, or |
24 | | incurred, directly or indirectly, (i) for taxable |
25 | | years ending on or after December 31, 2004, to a |
26 | | foreign person who would be a member of the same |
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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 and (ii) for taxable years ending on or after |
5 | | December 31, 2008, to a person who would be a member of |
6 | | the same unitary business group but for the fact that |
7 | | the person is prohibited under Section 1501(a)(27) |
8 | | from being included in the unitary business group |
9 | | because he or she is ordinarily required to apportion |
10 | | business income under different subsections of Section |
11 | | 304. The addition modification required by this |
12 | | subparagraph shall be reduced to the extent that |
13 | | dividends were included in base income of the unitary |
14 | | group for the same taxable year and received by the |
15 | | taxpayer or by a member of the taxpayer's unitary |
16 | | business group (including amounts included in gross |
17 | | income under Sections 951 through 964 of the Internal |
18 | | Revenue Code and amounts included in gross income under |
19 | | Section 78 of the Internal Revenue Code) with respect |
20 | | to the stock of the same person to whom the intangible |
21 | | expenses and costs were directly or indirectly paid, |
22 | | incurred, or accrued. The preceding sentence does not |
23 | | apply to the extent that the same dividends caused a |
24 | | reduction to the addition modification required under |
25 | | Section 203(a)(2)(D-17) of this Act. As used in this |
26 | | subparagraph, the term "intangible expenses and costs" |
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1 | | includes (1) expenses, losses, and costs for, or |
2 | | related to, the direct or indirect acquisition, use, |
3 | | maintenance or management, ownership, sale, exchange, |
4 | | or any other disposition of intangible property; (2) |
5 | | losses incurred, directly or indirectly, from |
6 | | factoring transactions or discounting transactions; |
7 | | (3) royalty, patent, technical, and copyright fees; |
8 | | (4) licensing fees; and (5) other similar expenses and |
9 | | costs.
For purposes of this subparagraph, "intangible |
10 | | property" includes patents, patent applications, trade |
11 | | names, trademarks, service marks, copyrights, mask |
12 | | works, trade secrets, and similar types of intangible |
13 | | assets. |
14 | | This paragraph shall not apply to the following: |
15 | | (i) any item of intangible expenses or costs |
16 | | paid, accrued, or incurred, directly or |
17 | | indirectly, from a transaction with a person who is |
18 | | subject in a foreign country or state, other than a |
19 | | state which requires mandatory unitary reporting, |
20 | | to a tax on or measured by net income with respect |
21 | | to such item; or |
22 | | (ii) any item of intangible expense or cost |
23 | | paid, accrued, or incurred, directly or |
24 | | indirectly, if the taxpayer can establish, based |
25 | | on a preponderance of the evidence, both of the |
26 | | following: |
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1 | | (a) the person during the same taxable |
2 | | year paid, accrued, or incurred, the |
3 | | intangible expense or cost to a person that is |
4 | | not a related member, and |
5 | | (b) the transaction giving rise to the |
6 | | intangible expense or cost between the |
7 | | taxpayer and the person did not have as a |
8 | | principal purpose the avoidance of Illinois |
9 | | income tax, and is paid pursuant to a contract |
10 | | or agreement that reflects arm's-length terms; |
11 | | or |
12 | | (iii) any item of intangible expense or cost |
13 | | paid, accrued, or incurred, directly or |
14 | | indirectly, from a transaction with a person if the |
15 | | taxpayer establishes by clear and convincing |
16 | | evidence, that the adjustments are unreasonable; |
17 | | or if the taxpayer and the Director agree in |
18 | | writing to the application or use of an alternative |
19 | | method of apportionment under Section 304(f);
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20 | | Nothing in this subsection shall preclude the |
21 | | Director from making any other adjustment |
22 | | otherwise allowed under Section 404 of this Act for |
23 | | any tax year beginning after the effective date of |
24 | | this amendment provided such adjustment is made |
25 | | pursuant to regulation adopted by the Department |
26 | | and such regulations provide methods and standards |
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1 | | by which the Department will utilize its authority |
2 | | under Section 404 of this Act;
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3 | | (D-19) For taxable years ending on or after |
4 | | December 31, 2008, an amount equal to the amount of |
5 | | insurance premium expenses and costs otherwise allowed |
6 | | as a deduction in computing base income, and that were |
7 | | paid, accrued, or incurred, directly or indirectly, to |
8 | | a person who would be a member of the same unitary |
9 | | business group but for the fact that the person is |
10 | | prohibited under Section 1501(a)(27) from being |
11 | | included in the unitary business group because he or |
12 | | she is ordinarily required to apportion business |
13 | | income under different subsections of Section 304. The |
14 | | addition modification required by this subparagraph |
15 | | shall be reduced to the extent that dividends were |
16 | | included in base income of the unitary group for the |
17 | | same taxable year and received by the taxpayer or by a |
18 | | member of the taxpayer's unitary business group |
19 | | (including amounts included in gross income under |
20 | | Sections 951 through 964 of the Internal Revenue Code |
21 | | and amounts included in gross income under Section 78 |
22 | | of the Internal Revenue Code) with respect to the stock |
23 | | of the same person to whom the premiums and costs were |
24 | | directly or indirectly paid, incurred, or accrued. The |
25 | | preceding sentence does not apply to the extent that |
26 | | the same dividends caused a reduction to the addition |
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1 | | modification required under Section 203(a)(2)(D-17) or |
2 | | Section 203(a)(2)(D-18) of this Act.
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3 | | (D-20) For taxable years beginning on or after |
4 | | January 1,
2002 and ending on or before December 31, |
5 | | 2006, in
the
case of a distribution from a qualified |
6 | | tuition program under Section 529 of
the Internal |
7 | | Revenue Code, other than (i) a distribution from a |
8 | | College Savings
Pool created under Section 16.5 of the |
9 | | State Treasurer Act or (ii) a
distribution from the |
10 | | Illinois Prepaid Tuition Trust Fund, an amount equal to
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11 | | the amount excluded from gross income under Section |
12 | | 529(c)(3)(B). For taxable years beginning on or after |
13 | | January 1, 2007, in the case of a distribution from a |
14 | | qualified tuition program under Section 529 of the |
15 | | Internal Revenue Code, other than (i) a distribution |
16 | | from a College Savings Pool created under Section 16.5 |
17 | | of the State Treasurer Act, (ii) a distribution from |
18 | | the Illinois Prepaid Tuition Trust Fund, or (iii) a |
19 | | distribution from a qualified tuition program under |
20 | | Section 529 of the Internal Revenue Code that (I) |
21 | | adopts and determines that its offering materials |
22 | | comply with the College Savings Plans Network's |
23 | | disclosure principles and (II) has made reasonable |
24 | | efforts to inform in-state residents of the existence |
25 | | of in-state qualified tuition programs by informing |
26 | | Illinois residents directly and, where applicable, to |
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1 | | inform financial intermediaries distributing the |
2 | | program to inform in-state residents of the existence |
3 | | of in-state qualified tuition programs at least |
4 | | annually, an amount equal to the amount excluded from |
5 | | gross income under Section 529(c)(3)(B). |
6 | | For the purposes of this subparagraph (D-20), a |
7 | | qualified tuition program has made reasonable efforts |
8 | | if it makes disclosures (which may use the term |
9 | | "in-state program" or "in-state plan" and need not |
10 | | specifically refer to Illinois or its qualified |
11 | | programs by name) (i) directly to prospective |
12 | | participants in its offering materials or makes a |
13 | | public disclosure, such as a website posting; and (ii) |
14 | | where applicable, to intermediaries selling the |
15 | | out-of-state program in the same manner that the |
16 | | out-of-state program distributes its offering |
17 | | materials; |
18 | | (D-21) For taxable years beginning on or after |
19 | | January 1, 2007, in the case of transfer of moneys from |
20 | | a qualified tuition program under Section 529 of the |
21 | | Internal Revenue Code that is administered by the State |
22 | | to an out-of-state program, an amount equal to the |
23 | | amount of moneys previously deducted from base income |
24 | | under subsection (a)(2)(Y) of this Section; |
25 | | (D-22) For taxable years beginning on or after |
26 | | January 1, 2009, in the case of a nonqualified |
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1 | | withdrawal or refund of moneys from a qualified tuition |
2 | | program under Section 529 of the Internal Revenue Code |
3 | | administered by the State that is not used for |
4 | | qualified expenses at an eligible education |
5 | | institution, an amount equal to the contribution |
6 | | component of the nonqualified withdrawal or refund |
7 | | that was previously deducted from base income under |
8 | | subsection (a)(2)(y) of this Section, provided that |
9 | | the withdrawal or refund did not result from the |
10 | | beneficiary's death or disability; |
11 | | (D-23) An amount equal to the credit allowable to |
12 | | the taxpayer under Section 218(a) of this Act, |
13 | | determined without regard to Section 218(c) of this |
14 | | Act; |
15 | | (D-24) For taxable years ending on or after |
16 | | December 31, 2017, an amount equal to the deduction |
17 | | allowed under Section 199 of the Internal Revenue Code |
18 | | for the taxable year; |
19 | | and by deducting from the total so obtained the
sum of the |
20 | | following amounts: |
21 | | (E) For taxable years ending before December 31, |
22 | | 2001,
any amount included in such total in respect of |
23 | | any compensation
(including but not limited to any |
24 | | compensation paid or accrued to a
serviceman while a |
25 | | prisoner of war or missing in action) paid to a |
26 | | resident
by reason of being on active duty in the Armed |
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1 | | Forces of the United States
and in respect of any |
2 | | compensation paid or accrued to a resident who as a
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3 | | governmental employee was a prisoner of war or missing |
4 | | in action, and in
respect of any compensation paid to a |
5 | | resident in 1971 or thereafter for
annual training |
6 | | performed pursuant to Sections 502 and 503, Title 32,
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7 | | United States Code as a member of the Illinois National |
8 | | Guard or, beginning with taxable years ending on or |
9 | | after December 31, 2007, the National Guard of any |
10 | | other state.
For taxable years ending on or after |
11 | | December 31, 2001, any amount included in
such total in |
12 | | respect of any compensation (including but not limited |
13 | | to any
compensation paid or accrued to a serviceman |
14 | | while a prisoner of war or missing
in action) paid to a |
15 | | resident by reason of being a member of any component |
16 | | of
the Armed Forces of the United States and in respect |
17 | | of any compensation paid
or accrued to a resident who |
18 | | as a governmental employee was a prisoner of war
or |
19 | | missing in action, and in respect of any compensation |
20 | | paid to a resident in
2001 or thereafter by reason of |
21 | | being a member of the Illinois National Guard or, |
22 | | beginning with taxable years ending on or after |
23 | | December 31, 2007, the National Guard of any other |
24 | | state.
The provisions of this subparagraph (E) are |
25 | | exempt
from the provisions of Section 250; |
26 | | (F) An amount equal to all amounts included in such |
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1 | | total pursuant
to the provisions of Sections 402(a), |
2 | | 402(c), 403(a), 403(b), 406(a), 407(a),
and 408 of the |
3 | | Internal Revenue Code, or included in such total as
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4 | | distributions under the provisions of any retirement |
5 | | or disability plan for
employees of any governmental |
6 | | agency or unit, or retirement payments to
retired |
7 | | partners, which payments are excluded in computing net |
8 | | earnings
from self employment by Section 1402 of the |
9 | | Internal Revenue Code and
regulations adopted pursuant |
10 | | thereto; |
11 | | (G) The valuation limitation amount; |
12 | | (H) An amount equal to the amount of any tax |
13 | | imposed by this Act
which was refunded to the taxpayer |
14 | | and included in such total for the
taxable year; |
15 | | (I) An amount equal to all amounts included in such |
16 | | total pursuant
to the provisions of Section 111 of the |
17 | | Internal Revenue Code as a
recovery of items previously |
18 | | deducted from adjusted gross income in the
computation |
19 | | of taxable income; |
20 | | (J) An amount equal to those dividends included in |
21 | | such total which were
paid by a corporation which |
22 | | conducts business operations in a River Edge |
23 | | Redevelopment Zone or zones created under the River |
24 | | Edge Redevelopment Zone Act, and conducts
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25 | | substantially all of its operations in a River Edge |
26 | | Redevelopment Zone or zones. This subparagraph (J) is |
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1 | | exempt from the provisions of Section 250; |
2 | | (K) 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 (J) of paragraph (2) of this subsection
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9 | | shall not be eligible for the deduction provided under |
10 | | this subparagraph
(K); |
11 | | (L) For taxable years ending after December 31, |
12 | | 1983, an amount equal to
all social security benefits |
13 | | and railroad retirement benefits included in
such |
14 | | total pursuant to Sections 72(r) and 86 of the Internal |
15 | | Revenue Code; |
16 | | (M) With the exception of any amounts subtracted |
17 | | under subparagraph
(N), an amount equal to the sum of |
18 | | all amounts disallowed as
deductions by (i) Sections |
19 | | 171(a) (2), and 265(2) of the Internal Revenue Code, |
20 | | and all amounts of expenses allocable
to interest and |
21 | | disallowed as deductions by Section 265(1) of the |
22 | | Internal
Revenue Code;
and (ii) for taxable years
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23 | | ending on or after August 13, 1999, Sections 171(a)(2), |
24 | | 265,
280C, and 832(b)(5)(B)(i) of the Internal Revenue |
25 | | Code, plus, for taxable years ending on or after |
26 | | December 31, 2011, Section 45G(e)(3) of the Internal |
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1 | | Revenue Code and, for taxable years ending on or after |
2 | | December 31, 2008, any amount included in gross income |
3 | | under Section 87 of the Internal Revenue Code; the |
4 | | provisions of this
subparagraph are exempt from the |
5 | | provisions of Section 250; |
6 | | (N) An amount equal to all amounts included in such |
7 | | total which are
exempt from taxation by this State |
8 | | either by reason of its statutes or
Constitution
or by |
9 | | reason of the Constitution, treaties or statutes of the |
10 | | United States;
provided that, in the case of any |
11 | | statute of this State that exempts income
derived from |
12 | | bonds or other obligations from the tax imposed under |
13 | | this Act,
the amount exempted shall be the interest net |
14 | | of bond premium amortization; |
15 | | (O) An amount equal to any contribution made to a |
16 | | job training
project established pursuant to the Tax |
17 | | Increment Allocation Redevelopment Act; |
18 | | (P) An amount equal to the amount of the deduction |
19 | | used to compute the
federal income tax credit for |
20 | | restoration of substantial amounts held under
claim of |
21 | | right for the taxable year pursuant to Section 1341 of |
22 | | the
Internal Revenue Code or of any itemized deduction |
23 | | taken from adjusted gross income in the computation of |
24 | | taxable income for restoration of substantial amounts |
25 | | held under claim of right for the taxable year; |
26 | | (Q) An amount equal to any amounts included in such |
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1 | | total, received by
the taxpayer as an acceleration in |
2 | | the payment of life, endowment or annuity
benefits in |
3 | | advance of the time they would otherwise be payable as |
4 | | an indemnity
for a terminal illness; |
5 | | (R) An amount equal to the amount of any federal or |
6 | | State bonus paid
to veterans of the Persian Gulf War; |
7 | | (S) An amount, to the extent included in adjusted |
8 | | gross income, equal
to the amount of a contribution |
9 | | made in the taxable year on behalf of the
taxpayer to a |
10 | | medical care savings account established under the |
11 | | Medical Care
Savings Account Act or the Medical Care |
12 | | Savings Account Act of 2000 to the
extent the |
13 | | contribution is accepted by the account
administrator |
14 | | as provided in that Act; |
15 | | (T) An amount, to the extent included in adjusted |
16 | | gross income, equal to
the amount of interest earned in |
17 | | the taxable year on a medical care savings
account |
18 | | established under the Medical Care Savings Account Act |
19 | | or the Medical
Care Savings Account Act of 2000 on |
20 | | behalf of the
taxpayer, other than interest added |
21 | | pursuant to item (D-5) of this paragraph
(2); |
22 | | (U) For one taxable year beginning on or after |
23 | | January 1,
1994, an
amount equal to the total amount of |
24 | | tax imposed and paid under subsections (a)
and (b) of |
25 | | Section 201 of this Act on grant amounts received by |
26 | | the taxpayer
under the Nursing Home Grant Assistance |
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1 | | Act during the taxpayer's taxable years
1992 and 1993; |
2 | | (V) Beginning with tax years ending on or after |
3 | | December 31, 1995 and
ending with tax years ending on |
4 | | or before December 31, 2004, an amount equal to
the |
5 | | amount paid by a taxpayer who is a
self-employed |
6 | | taxpayer, a partner of a partnership, or a
shareholder |
7 | | in a Subchapter S corporation for health insurance or |
8 | | long-term
care insurance for that taxpayer or that |
9 | | taxpayer's spouse or dependents, to
the extent that the |
10 | | amount paid for that health insurance or long-term care
|
11 | | insurance may be deducted under Section 213 of the |
12 | | Internal Revenue Code, has not been deducted on the |
13 | | federal income tax return of the taxpayer,
and does not |
14 | | exceed the taxable income attributable to that |
15 | | taxpayer's income,
self-employment income, or |
16 | | Subchapter S corporation income; except that no
|
17 | | deduction shall be allowed under this item (V) if the |
18 | | taxpayer is eligible to
participate in any health |
19 | | insurance or long-term care insurance plan of an
|
20 | | employer of the taxpayer or the taxpayer's
spouse. The |
21 | | amount of the health insurance and long-term care |
22 | | insurance
subtracted under this item (V) shall be |
23 | | determined by multiplying total
health insurance and |
24 | | long-term care insurance premiums paid by the taxpayer
|
25 | | times a number that represents the fractional |
26 | | percentage of eligible medical
expenses under Section |
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1 | | 213 of the Internal Revenue Code of 1986 not actually
|
2 | | deducted on the taxpayer's federal income tax return; |
3 | | (W) For taxable years beginning on or after January |
4 | | 1, 1998,
all amounts included in the taxpayer's federal |
5 | | gross income
in the taxable year from amounts converted |
6 | | from a regular IRA to a Roth IRA.
This paragraph is |
7 | | exempt from the provisions of Section
250; |
8 | | (X) For taxable year 1999 and thereafter, an amount |
9 | | equal to the
amount of any (i) distributions, to the |
10 | | extent includible in gross income for
federal income |
11 | | tax purposes, made to the taxpayer because of his or |
12 | | her status
as a victim of persecution for racial or |
13 | | religious reasons by Nazi Germany or
any other Axis |
14 | | regime or as an heir of the victim and (ii) items
of |
15 | | income, to the extent
includible in gross income for |
16 | | federal income tax purposes, attributable to,
derived |
17 | | from or in any way related to assets stolen from, |
18 | | hidden from, or
otherwise lost to a victim of
|
19 | | persecution for racial or religious reasons by Nazi |
20 | | Germany or any other Axis
regime immediately prior to, |
21 | | during, and immediately after World War II,
including, |
22 | | but
not limited to, interest on the proceeds receivable |
23 | | as insurance
under policies issued to a victim of |
24 | | persecution for racial or religious
reasons
by Nazi |
25 | | Germany or any other Axis regime by European insurance |
26 | | companies
immediately prior to and during World War II;
|
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1 | | provided, however, this subtraction from federal |
2 | | adjusted gross income does not
apply to assets acquired |
3 | | with such assets or with the proceeds from the sale of
|
4 | | such assets; provided, further, this paragraph shall |
5 | | only apply to a taxpayer
who was the first recipient of |
6 | | such assets after their recovery and who is a
victim of |
7 | | persecution for racial or religious reasons
by Nazi |
8 | | Germany or any other Axis regime or as an heir of the |
9 | | victim. The
amount of and the eligibility for any |
10 | | public assistance, benefit, or
similar entitlement is |
11 | | not affected by the inclusion of items (i) and (ii) of
|
12 | | this paragraph in gross income for federal income tax |
13 | | purposes.
This paragraph is exempt from the provisions |
14 | | of Section 250; |
15 | | (Y) For taxable years beginning on or after January |
16 | | 1, 2002
and ending
on or before December 31, 2004, |
17 | | moneys contributed in the taxable year to a College |
18 | | Savings Pool account under
Section 16.5 of the State |
19 | | Treasurer Act, except that amounts excluded from
gross |
20 | | income under Section 529(c)(3)(C)(i) of the Internal |
21 | | Revenue Code
shall not be considered moneys |
22 | | contributed under this subparagraph (Y). For taxable |
23 | | years beginning on or after January 1, 2005, a maximum |
24 | | of $10,000
contributed
in the
taxable year to (i) a |
25 | | College Savings Pool account under Section 16.5 of the
|
26 | | State
Treasurer Act or (ii) the Illinois Prepaid |
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1 | | Tuition Trust Fund,
except that
amounts excluded from |
2 | | gross income under Section 529(c)(3)(C)(i) of the
|
3 | | Internal
Revenue Code shall not be considered moneys |
4 | | contributed under this subparagraph
(Y). For purposes |
5 | | of this subparagraph, contributions made by an |
6 | | employer on behalf of an employee, or matching |
7 | | contributions made by an employee, shall be treated as |
8 | | made by the employee. This
subparagraph (Y) is exempt |
9 | | from the provisions of Section 250; |
10 | | (Z) For taxable years 2001 and thereafter, for the |
11 | | taxable year in
which the bonus depreciation deduction
|
12 | | is taken on the taxpayer's federal income tax return |
13 | | under
subsection (k) of Section 168 of the Internal |
14 | | Revenue Code and for each
applicable taxable year |
15 | | thereafter, an amount equal to "x", where: |
16 | | (1) "y" equals the amount of the depreciation |
17 | | deduction taken for the
taxable year
on the |
18 | | taxpayer's federal income tax return on property |
19 | | for which the bonus
depreciation deduction
was |
20 | | taken in any year under subsection (k) of Section |
21 | | 168 of the Internal
Revenue Code, but not including |
22 | | the bonus depreciation deduction; |
23 | | (2) for taxable years ending on or before |
24 | | December 31, 2005, "x" equals "y" multiplied by 30 |
25 | | and then divided by 70 (or "y"
multiplied by |
26 | | 0.429); and |
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1 | | (3) for taxable years ending after December |
2 | | 31, 2005: |
3 | | (i) for property on which a bonus |
4 | | depreciation deduction of 30% of the adjusted |
5 | | basis was taken, "x" equals "y" multiplied by |
6 | | 30 and then divided by 70 (or "y"
multiplied by |
7 | | 0.429); and |
8 | | (ii) for property on which a bonus |
9 | | depreciation deduction of 50% of the adjusted |
10 | | basis was taken, "x" equals "y" multiplied by |
11 | | 1.0. |
12 | | The aggregate amount deducted under this |
13 | | subparagraph in all taxable
years for any one piece of |
14 | | property may not exceed the amount of the bonus
|
15 | | depreciation deduction
taken on that property on the |
16 | | taxpayer's federal income tax return under
subsection |
17 | | (k) of Section 168 of the Internal Revenue Code. This |
18 | | subparagraph (Z) is exempt from the provisions of |
19 | | Section 250; |
20 | | (AA) If the taxpayer sells, transfers, abandons, |
21 | | or otherwise disposes of
property for which the |
22 | | taxpayer was required in any taxable year to make an
|
23 | | addition modification under subparagraph (D-15), then |
24 | | an amount equal to that
addition modification.
|
25 | | If the taxpayer continues to own property through |
26 | | the last day of the last tax year for which the |
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1 | | taxpayer may claim a depreciation deduction for |
2 | | federal income tax purposes and for which the taxpayer |
3 | | was required in any taxable year to make an addition |
4 | | modification under subparagraph (D-15), then an amount |
5 | | equal to that addition modification.
|
6 | | The taxpayer is allowed to take the deduction under |
7 | | this subparagraph
only once with respect to any one |
8 | | piece of property. |
9 | | This subparagraph (AA) is exempt from the |
10 | | provisions of Section 250; |
11 | | (BB) Any amount included in adjusted gross income, |
12 | | other
than
salary,
received by a driver in a |
13 | | ridesharing arrangement using a motor vehicle; |
14 | | (CC) The amount of (i) any interest income (net of |
15 | | the deductions allocable thereto) taken into account |
16 | | for the taxable year with respect to a transaction with |
17 | | a taxpayer that is required to make an addition |
18 | | modification with respect to such transaction under |
19 | | Section 203(a)(2)(D-17), 203(b)(2)(E-12), |
20 | | 203(c)(2)(G-12), or 203(d)(2)(D-7), but not to exceed |
21 | | the amount of that addition modification, and
(ii) any |
22 | | income from intangible property (net of the deductions |
23 | | allocable thereto) taken into account for the taxable |
24 | | year with respect to a transaction with a taxpayer that |
25 | | is required to make an addition modification with |
26 | | respect to such transaction under Section |
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1 | | 203(a)(2)(D-18), 203(b)(2)(E-13), 203(c)(2)(G-13), or |
2 | | 203(d)(2)(D-8), but not to exceed the amount of that |
3 | | addition modification. This subparagraph (CC) is |
4 | | exempt from the provisions of Section 250; |
5 | | (DD) An amount equal to the interest income taken |
6 | | into account for the taxable year (net of the |
7 | | deductions allocable thereto) with respect to |
8 | | transactions with (i) a foreign person who would be a |
9 | | member of the taxpayer's unitary business group but for |
10 | | the fact that the foreign person's business activity |
11 | | outside the United States is 80% or more of that |
12 | | person's total business activity and (ii) for taxable |
13 | | years ending on or after December 31, 2008, to a person |
14 | | who would be a member of the same unitary business |
15 | | group but for the fact that the person is prohibited |
16 | | under Section 1501(a)(27) from being included in the |
17 | | unitary business group because he or she is ordinarily |
18 | | required to apportion business income under different |
19 | | subsections of Section 304, but not to exceed the |
20 | | addition modification required to be made for the same |
21 | | taxable year under Section 203(a)(2)(D-17) for |
22 | | interest paid, accrued, or incurred, directly or |
23 | | indirectly, to the same person. This subparagraph (DD) |
24 | | is exempt from the provisions of Section 250; |
25 | | (EE) An amount equal to the income from intangible |
26 | | property taken into account for the taxable year (net |
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1 | | of the deductions allocable thereto) with respect to |
2 | | transactions with (i) 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 and (ii) for taxable |
7 | | years ending on or after December 31, 2008, to a person |
8 | | who would be a member of the same unitary business |
9 | | group but for the fact that the person is prohibited |
10 | | under Section 1501(a)(27) from being included in the |
11 | | unitary business group because he or she is ordinarily |
12 | | required to apportion business income under different |
13 | | subsections of Section 304, but not to exceed the |
14 | | addition modification required to be made for the same |
15 | | taxable year under Section 203(a)(2)(D-18) for |
16 | | intangible expenses and costs paid, accrued, or |
17 | | incurred, directly or indirectly, to the same foreign |
18 | | person. This subparagraph (EE) is exempt from the |
19 | | provisions of Section 250; |
20 | | (FF) An amount equal to any amount awarded to the |
21 | | taxpayer during the taxable year by the Court of Claims |
22 | | under subsection (c) of Section 8 of the Court of |
23 | | Claims Act for time unjustly served in a State prison. |
24 | | This subparagraph (FF) is exempt from the provisions of |
25 | | Section 250; and |
26 | | (GG) For taxable years ending on or after December |
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1 | | 31, 2011, in the case of a taxpayer who was required to |
2 | | add back any insurance premiums under Section |
3 | | 203(a)(2)(D-19), such taxpayer may elect to subtract |
4 | | that part of a reimbursement received from the |
5 | | insurance company equal to the amount of the expense or |
6 | | loss (including expenses incurred by the insurance |
7 | | company) that would have been taken into account as a |
8 | | deduction for federal income tax purposes if the |
9 | | expense or loss had been uninsured. If a taxpayer makes |
10 | | the election provided for by this subparagraph (GG), |
11 | | the insurer to which the premiums were paid must add |
12 | | back to income the amount subtracted by the taxpayer |
13 | | pursuant to this subparagraph (GG). This subparagraph |
14 | | (GG) is exempt from the provisions of Section 250 ; and |
15 | | . |
16 | | (HH) For taxable years ending on or after December |
17 | | 31, 2018, an amount equal to the difference between (i) |
18 | | the amount paid by the taxpayer in property taxes |
19 | | during the taxable year and (ii) $10,000, but not to |
20 | | exceed $5,000 per taxpayer in any taxable year. This |
21 | | subparagraph (HH) is exempt from the provisions of |
22 | | Section 250. |
23 | | (b) Corporations. |
24 | | (1) In general. In the case of a corporation, base |
25 | | income means an
amount equal to the taxpayer's taxable |
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1 | | income for the taxable year as
modified by paragraph (2). |
2 | | (2) Modifications. The taxable income referred to in |
3 | | paragraph (1)
shall be modified by adding thereto the sum |
4 | | of the following amounts: |
5 | | (A) An amount equal to all amounts paid or accrued |
6 | | to the taxpayer
as interest and all distributions |
7 | | received from regulated investment
companies during |
8 | | the taxable year to the extent excluded from gross
|
9 | | income in the computation of taxable income; |
10 | | (B) An amount equal to the amount of tax imposed by |
11 | | this Act to the
extent deducted from gross income in |
12 | | the computation of taxable income
for the taxable year; |
13 | | (C) In the case of a regulated investment company, |
14 | | an amount equal to
the excess of (i) the net long-term |
15 | | capital gain for the taxable year, over
(ii) the amount |
16 | | of the capital gain dividends designated as such in |
17 | | accordance
with Section 852(b)(3)(C) of the Internal |
18 | | Revenue Code and any amount
designated under Section |
19 | | 852(b)(3)(D) of the Internal Revenue Code,
|
20 | | attributable to the taxable year (this amendatory Act |
21 | | of 1995
(Public Act 89-89) is declarative of existing |
22 | | law and is not a new
enactment); |
23 | | (D) The amount of any net operating loss deduction |
24 | | taken in arriving
at taxable income, other than a net |
25 | | operating loss carried forward from a
taxable year |
26 | | ending prior to December 31, 1986; |
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1 | | (E) For taxable years in which a net operating loss |
2 | | carryback or
carryforward from a taxable year ending |
3 | | prior to December 31, 1986 is an
element of taxable |
4 | | income under paragraph (1) of subsection (e) or
|
5 | | subparagraph (E) of paragraph (2) of subsection (e), |
6 | | the amount by which
addition modifications other than |
7 | | those provided by this subparagraph (E)
exceeded |
8 | | subtraction modifications in such earlier taxable |
9 | | year, with the
following limitations applied in the |
10 | | order that they are listed: |
11 | | (i) the addition modification relating to the |
12 | | net operating loss
carried back or forward to the |
13 | | taxable year from any taxable year ending
prior to |
14 | | December 31, 1986 shall be reduced by the amount of |
15 | | addition
modification under this subparagraph (E) |
16 | | which related to that net operating
loss and which |
17 | | was taken into account in calculating the base |
18 | | income of an
earlier taxable year, and |
19 | | (ii) the addition modification relating to the |
20 | | net operating loss
carried back or forward to the |
21 | | taxable year from any taxable year ending
prior to |
22 | | December 31, 1986 shall not exceed the amount of |
23 | | such carryback or
carryforward; |
24 | | For taxable years in which there is a net operating |
25 | | loss carryback or
carryforward from more than one other |
26 | | taxable year ending prior to December
31, 1986, the |
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1 | | addition modification provided in this subparagraph |
2 | | (E) shall
be the sum of the amounts computed |
3 | | independently under the preceding
provisions of this |
4 | | subparagraph (E) for each such taxable year; |
5 | | (E-5) For taxable years ending after December 31, |
6 | | 1997, an
amount equal to any eligible remediation costs |
7 | | that the corporation
deducted in computing adjusted |
8 | | gross income and for which the
corporation claims a |
9 | | credit under subsection (l) of Section 201; |
10 | | (E-10) For taxable years 2001 and thereafter, an |
11 | | amount equal to the
bonus depreciation deduction taken |
12 | | on the taxpayer's federal income tax return for the |
13 | | taxable
year under subsection (k) of Section 168 of the |
14 | | Internal Revenue Code; |
15 | | (E-11) 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 (E-10), then |
19 | | an amount equal
to the aggregate amount of the |
20 | | deductions taken in all taxable
years under |
21 | | subparagraph (T) with respect to that property. |
22 | | If the taxpayer continues to own property through |
23 | | the last day of the last tax year for which the |
24 | | taxpayer may claim a depreciation deduction for |
25 | | federal income tax purposes and for which the taxpayer |
26 | | was allowed in any taxable year to make a subtraction |
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1 | | modification under subparagraph (T), then an amount |
2 | | equal to that subtraction modification.
|
3 | | The taxpayer is required to make the addition |
4 | | modification under this
subparagraph
only once with |
5 | | respect to any one piece of property; |
6 | | (E-12) An amount equal to the amount otherwise |
7 | | allowed as a deduction in computing base income for |
8 | | interest paid, accrued, or incurred, directly or |
9 | | indirectly, (i) for taxable years ending on or after |
10 | | December 31, 2004, to a foreign person who would be a |
11 | | member of the same unitary business group but for the |
12 | | fact the foreign person's business activity outside |
13 | | the United States is 80% or more of the foreign |
14 | | person's total business activity and (ii) for taxable |
15 | | years ending on or after December 31, 2008, to a person |
16 | | who would be a member of the same unitary business |
17 | | group but for the fact that the person is prohibited |
18 | | under Section 1501(a)(27) from being included in the |
19 | | unitary business group because he or she is ordinarily |
20 | | required to apportion business income under different |
21 | | subsections of Section 304. The addition modification |
22 | | required by this subparagraph shall be reduced to the |
23 | | extent that dividends were included in base income of |
24 | | the unitary group for the same taxable year and |
25 | | received by the taxpayer or by a member of the |
26 | | taxpayer's unitary business group (including amounts |
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1 | | included in gross income pursuant to Sections 951 |
2 | | through 964 of the Internal Revenue Code and amounts |
3 | | included in gross income under Section 78 of the |
4 | | Internal Revenue Code) with respect to the stock of the |
5 | | same person to whom the interest was paid, accrued, or |
6 | | incurred.
|
7 | | This paragraph shall not apply to the following:
|
8 | | (i) an item of interest paid, accrued, or |
9 | | incurred, directly or indirectly, to a person who |
10 | | is subject in a foreign country or state, other |
11 | | than a state which requires mandatory unitary |
12 | | reporting, to a tax on or measured by net income |
13 | | with respect to such interest; or |
14 | | (ii) an item of interest paid, accrued, or |
15 | | incurred, directly or indirectly, to a person if |
16 | | the taxpayer can establish, based on a |
17 | | preponderance of the evidence, both of the |
18 | | following: |
19 | | (a) the person, during the same taxable |
20 | | year, paid, accrued, or incurred, the interest |
21 | | to a person that is not a related member, and |
22 | | (b) the transaction giving rise to the |
23 | | interest expense between the taxpayer and the |
24 | | person did not have as a principal purpose the |
25 | | avoidance of Illinois income tax, and is paid |
26 | | pursuant to a contract or agreement that |
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1 | | reflects an arm's-length interest rate and |
2 | | terms; or
|
3 | | (iii) the taxpayer can establish, based on |
4 | | clear and convincing evidence, that the interest |
5 | | paid, accrued, or incurred relates to a contract or |
6 | | agreement entered into at arm's-length rates and |
7 | | terms and the principal purpose for the payment is |
8 | | not federal or Illinois tax avoidance; or
|
9 | | (iv) an item of interest paid, accrued, or |
10 | | incurred, directly or indirectly, to a person if |
11 | | the taxpayer establishes by clear and convincing |
12 | | evidence that the adjustments are unreasonable; or |
13 | | if the taxpayer and the Director agree in writing |
14 | | to the application or use of an alternative method |
15 | | of apportionment under Section 304(f).
|
16 | | Nothing in this subsection shall preclude the |
17 | | Director from making any other adjustment |
18 | | otherwise allowed under Section 404 of this Act for |
19 | | any tax year beginning after the effective date of |
20 | | this amendment provided such adjustment is made |
21 | | pursuant to regulation adopted by the Department |
22 | | and such regulations provide methods and standards |
23 | | by which the Department will utilize its authority |
24 | | under Section 404 of this Act;
|
25 | | (E-13) An amount equal to the amount of intangible |
26 | | expenses and costs otherwise allowed as a deduction in |
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1 | | computing base income, and that were paid, accrued, or |
2 | | incurred, directly or indirectly, (i) for taxable |
3 | | years ending on or after December 31, 2004, to a |
4 | | foreign person who would be a member of the same |
5 | | unitary business group but for the fact that the |
6 | | foreign person's business activity outside the United |
7 | | States is 80% or more of that person's total business |
8 | | activity and (ii) for taxable years ending on or after |
9 | | December 31, 2008, to a person who would be a member of |
10 | | the same unitary business group but for the fact that |
11 | | the person is prohibited under Section 1501(a)(27) |
12 | | from being included in the unitary business group |
13 | | because he or she is ordinarily required to apportion |
14 | | business income under different subsections of Section |
15 | | 304. The addition modification required by this |
16 | | subparagraph shall be reduced to the extent that |
17 | | dividends were included in base income of the unitary |
18 | | group for the same taxable year and received by the |
19 | | taxpayer or by a member of the taxpayer's unitary |
20 | | business group (including amounts included in gross |
21 | | income pursuant to Sections 951 through 964 of the |
22 | | Internal Revenue Code and amounts included in gross |
23 | | income under Section 78 of the Internal Revenue Code) |
24 | | with respect to the stock of the same person to whom |
25 | | the intangible expenses and costs were directly or |
26 | | indirectly paid, incurred, or accrued. The preceding |
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1 | | sentence shall not apply to the extent that the same |
2 | | dividends caused a reduction to the addition |
3 | | modification required under Section 203(b)(2)(E-12) of |
4 | | this Act.
As used in this subparagraph, the term |
5 | | "intangible expenses and costs" includes (1) expenses, |
6 | | losses, and costs for, or related to, the direct or |
7 | | indirect acquisition, use, maintenance or management, |
8 | | ownership, sale, exchange, or any other disposition of |
9 | | intangible property; (2) losses incurred, directly or |
10 | | indirectly, from factoring transactions or discounting |
11 | | transactions; (3) royalty, patent, technical, and |
12 | | copyright fees; (4) licensing fees; and (5) other |
13 | | similar expenses and costs.
For purposes of this |
14 | | subparagraph, "intangible property" includes patents, |
15 | | patent applications, trade names, trademarks, service |
16 | | marks, copyrights, mask works, trade secrets, and |
17 | | similar types of intangible assets. |
18 | | This paragraph shall not apply to the following: |
19 | | (i) any item of intangible expenses or costs |
20 | | paid, accrued, or incurred, directly or |
21 | | indirectly, from a transaction with a person who is |
22 | | subject in a foreign country or state, other than a |
23 | | state which requires mandatory unitary reporting, |
24 | | to a tax on or measured by net income with respect |
25 | | to such item; or |
26 | | (ii) any item of intangible expense or cost |
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1 | | paid, accrued, or incurred, directly or |
2 | | indirectly, if the taxpayer can establish, based |
3 | | on a preponderance of the evidence, both of the |
4 | | following: |
5 | | (a) the person during the same taxable |
6 | | year paid, accrued, or incurred, the |
7 | | intangible expense or cost to a person that is |
8 | | not a related member, and |
9 | | (b) the transaction giving rise to the |
10 | | intangible expense or cost between the |
11 | | taxpayer and the person did not have as a |
12 | | principal purpose the avoidance of Illinois |
13 | | income tax, and is paid pursuant to a contract |
14 | | or agreement that reflects arm's-length terms; |
15 | | or |
16 | | (iii) any item of intangible expense or cost |
17 | | paid, accrued, or incurred, directly or |
18 | | indirectly, from a transaction with a person if the |
19 | | taxpayer establishes by clear and convincing |
20 | | evidence, that the adjustments are unreasonable; |
21 | | or if the taxpayer and the Director agree in |
22 | | writing to the application or use of an alternative |
23 | | method of apportionment under Section 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 |
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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 | | (E-14) For taxable years ending on or after |
8 | | December 31, 2008, an amount equal to the amount of |
9 | | insurance premium expenses and costs otherwise allowed |
10 | | as a deduction in computing base income, and that were |
11 | | paid, accrued, or incurred, directly or indirectly, to |
12 | | a person who would be a member of the same unitary |
13 | | business group but for the fact that the person is |
14 | | prohibited under Section 1501(a)(27) from being |
15 | | included in the unitary business group because he or |
16 | | she is ordinarily required to apportion business |
17 | | income under different subsections of Section 304. The |
18 | | addition modification required by this subparagraph |
19 | | shall be reduced to the extent that dividends were |
20 | | included in base income of the unitary group for the |
21 | | same taxable year and received by the taxpayer or by a |
22 | | member of the taxpayer's unitary business group |
23 | | (including amounts included in gross income under |
24 | | Sections 951 through 964 of the Internal Revenue Code |
25 | | and amounts included in gross income under Section 78 |
26 | | of the Internal Revenue Code) with respect to the stock |
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1 | | of the same person to whom the premiums and costs were |
2 | | directly or indirectly paid, incurred, or accrued. The |
3 | | preceding sentence does not apply to the extent that |
4 | | the same dividends caused a reduction to the addition |
5 | | modification required under Section 203(b)(2)(E-12) or |
6 | | Section 203(b)(2)(E-13) of this Act;
|
7 | | (E-15) For taxable years beginning after December |
8 | | 31, 2008, any deduction for dividends paid by a captive |
9 | | real estate investment trust that is allowed to a real |
10 | | estate investment trust under Section 857(b)(2)(B) of |
11 | | the Internal Revenue Code for dividends paid; |
12 | | (E-16) An amount equal to the credit allowable to |
13 | | the taxpayer under Section 218(a) of this Act, |
14 | | determined without regard to Section 218(c) of this |
15 | | Act; |
16 | | (E-17) For taxable years ending on or after |
17 | | December 31, 2017, an amount equal to the deduction |
18 | | allowed under Section 199 of the Internal Revenue Code |
19 | | for the taxable year; |
20 | | and by deducting from the total so obtained the sum of the |
21 | | following
amounts: |
22 | | (F) An amount equal to the amount of any tax |
23 | | imposed by this Act
which was refunded to the taxpayer |
24 | | and included in such total for the
taxable year; |
25 | | (G) An amount equal to any amount included in such |
26 | | total under
Section 78 of the Internal Revenue Code; |
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1 | | (H) In the case of a regulated investment company, |
2 | | an amount equal
to the amount of exempt interest |
3 | | dividends as defined in subsection (b)
(5) of Section |
4 | | 852 of the Internal Revenue Code, paid to shareholders
|
5 | | for the taxable year; |
6 | | (I) With the exception of any amounts subtracted |
7 | | under subparagraph
(J),
an amount equal to the sum of |
8 | | all amounts disallowed as
deductions by (i) Sections |
9 | | 171(a) (2), and 265(a)(2) and amounts disallowed as
|
10 | | interest expense by Section 291(a)(3) of the Internal |
11 | | Revenue Code, and all amounts of expenses allocable to |
12 | | interest and
disallowed as deductions by Section |
13 | | 265(a)(1) of the Internal Revenue Code;
and (ii) for |
14 | | taxable years
ending on or after August 13, 1999, |
15 | | Sections
171(a)(2), 265,
280C, 291(a)(3), and |
16 | | 832(b)(5)(B)(i) of the Internal Revenue Code, plus, |
17 | | for tax years ending on or after December 31, 2011, |
18 | | amounts disallowed as deductions by Section 45G(e)(3) |
19 | | of the Internal Revenue Code and, for taxable years |
20 | | ending on or after December 31, 2008, any amount |
21 | | included in gross income under Section 87 of the |
22 | | Internal Revenue Code and the policyholders' share of |
23 | | tax-exempt interest of a life insurance company under |
24 | | Section 807(a)(2)(B) of the Internal Revenue Code (in |
25 | | the case of a life insurance company with gross income |
26 | | from a decrease in reserves for the tax year) or |
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1 | | Section 807(b)(1)(B) of the Internal Revenue Code (in |
2 | | the case of a life insurance company allowed a |
3 | | deduction for an increase in reserves for the tax |
4 | | year); the
provisions of this
subparagraph are exempt |
5 | | from the provisions of Section 250; |
6 | | (J) An amount equal to all amounts included in such |
7 | | total which are
exempt from taxation by this State |
8 | | either by reason of its statutes or
Constitution
or by |
9 | | reason of the Constitution, treaties or statutes of the |
10 | | United States;
provided that, in the case of any |
11 | | statute of this State that exempts income
derived from |
12 | | bonds or other obligations from the tax imposed under |
13 | | this Act,
the amount exempted shall be the interest net |
14 | | of bond premium amortization; |
15 | | (K) An amount equal to those dividends included in |
16 | | such total
which were paid by a corporation which |
17 | | conducts
business operations in a River Edge |
18 | | Redevelopment Zone or zones created under the River |
19 | | Edge Redevelopment Zone Act and conducts substantially |
20 | | all of its
operations in a River Edge Redevelopment |
21 | | Zone or zones. This subparagraph (K) is exempt from the |
22 | | provisions of Section 250; |
23 | | (L) An amount equal to those dividends included in |
24 | | such total that
were paid by a corporation that |
25 | | conducts business operations in a federally
designated |
26 | | Foreign Trade Zone or Sub-Zone and that is designated a |
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1 | | High Impact
Business located in Illinois; provided |
2 | | that dividends eligible for the
deduction provided in |
3 | | subparagraph (K) of paragraph 2 of this subsection
|
4 | | shall not be eligible for the deduction provided under |
5 | | this subparagraph
(L); |
6 | | (M) For any taxpayer that is a financial |
7 | | organization within the meaning
of Section 304(c) of |
8 | | this Act, an amount included in such total as interest
|
9 | | income from a loan or loans made by such taxpayer to a |
10 | | borrower, to the extent
that such a loan is secured by |
11 | | property which is eligible for the River Edge |
12 | | Redevelopment Zone Investment Credit. To determine the |
13 | | portion of a loan or loans that is
secured by property |
14 | | eligible for a Section 201(f) investment
credit to the |
15 | | borrower, the entire principal amount of the loan or |
16 | | loans
between the taxpayer and the borrower should be |
17 | | divided into the basis of the
Section 201(f) investment |
18 | | credit property which secures the
loan or loans, using |
19 | | for this purpose the original basis of such property on
|
20 | | the date that it was placed in service in the River |
21 | | Edge Redevelopment Zone. The subtraction modification |
22 | | available to taxpayer in any
year under this subsection |
23 | | shall be that portion of the total interest paid
by the |
24 | | borrower with respect to such loan attributable to the |
25 | | eligible
property as calculated under the previous |
26 | | sentence. This subparagraph (M) is exempt from the |
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1 | | provisions of Section 250; |
2 | | (M-1) For any taxpayer that is a financial |
3 | | organization within the
meaning of Section 304(c) of |
4 | | this Act, an amount included in such total as
interest |
5 | | income from a loan or loans made by such taxpayer to a |
6 | | borrower,
to the extent that such a loan is secured by |
7 | | property which is eligible for
the High Impact Business |
8 | | Investment Credit. To determine the portion of a
loan |
9 | | or loans that is secured by property eligible for a |
10 | | Section 201(h) investment credit to the borrower, the |
11 | | entire principal amount of
the loan or loans between |
12 | | the taxpayer and the borrower should be divided into
|
13 | | the basis of the Section 201(h) investment credit |
14 | | property which
secures the loan or loans, using for |
15 | | this purpose the original basis of such
property on the |
16 | | date that it was placed in service in a federally |
17 | | designated
Foreign Trade Zone or Sub-Zone located in |
18 | | Illinois. No taxpayer that is
eligible for the |
19 | | deduction provided in subparagraph (M) of paragraph |
20 | | (2) of
this subsection shall be eligible for the |
21 | | deduction provided under this
subparagraph (M-1). The |
22 | | subtraction modification available to taxpayers in
any |
23 | | year under this subsection shall be that portion of the |
24 | | total interest
paid by the borrower with respect to |
25 | | such loan attributable to the eligible
property as |
26 | | calculated under the previous sentence; |
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1 | | (N) Two times any contribution made during the |
2 | | taxable year to a
designated zone organization to the |
3 | | extent that the contribution (i)
qualifies as a |
4 | | charitable contribution under subsection (c) of |
5 | | Section 170
of the Internal Revenue Code and (ii) must, |
6 | | by its terms, be used for a
project approved by the |
7 | | Department of Commerce and Economic Opportunity under |
8 | | Section 11 of the Illinois Enterprise Zone Act or under |
9 | | Section 10-10 of the River Edge Redevelopment Zone Act. |
10 | | This subparagraph (N) is exempt from the provisions of |
11 | | Section 250; |
12 | | (O) An amount equal to: (i) 85% for taxable years |
13 | | ending on or before
December 31, 1992, or, a percentage |
14 | | equal to the percentage allowable under
Section |
15 | | 243(a)(1) of the Internal Revenue Code of 1986 for |
16 | | taxable years ending
after December 31, 1992, of the |
17 | | amount by which dividends included in taxable
income |
18 | | and received from a corporation that is not created or |
19 | | organized under
the laws of the United States or any |
20 | | state or political subdivision thereof,
including, for |
21 | | taxable years ending on or after December 31, 1988, |
22 | | dividends
received or deemed received or paid or deemed |
23 | | paid under Sections 951 through
965 of the Internal |
24 | | Revenue Code, exceed the amount of the modification
|
25 | | provided under subparagraph (G) of paragraph (2) of |
26 | | this subsection (b) which
is related to such dividends, |
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1 | | and including, for taxable years ending on or after |
2 | | December 31, 2008, dividends received from a captive |
3 | | real estate investment trust; plus (ii) 100% of the |
4 | | amount by which dividends,
included in taxable income |
5 | | and received, including, for taxable years ending on
or |
6 | | after December 31, 1988, dividends received or deemed |
7 | | received or paid or
deemed paid under Sections 951 |
8 | | through 964 of the Internal Revenue Code and including, |
9 | | for taxable years ending on or after December 31, 2008, |
10 | | dividends received from a captive real estate |
11 | | investment trust, from
any such corporation specified |
12 | | in clause (i) that would but for the provisions
of |
13 | | Section 1504 (b) (3) of the Internal Revenue Code be |
14 | | treated as a member of
the affiliated group which |
15 | | includes the dividend recipient, exceed the amount
of |
16 | | the modification provided under subparagraph (G) of |
17 | | paragraph (2) of this
subsection (b) which is related |
18 | | to such dividends. This subparagraph (O) is exempt from |
19 | | the provisions of Section 250 of this Act; |
20 | | (P) An amount equal to any contribution made to a |
21 | | job training project
established pursuant to the Tax |
22 | | Increment Allocation Redevelopment Act; |
23 | | (Q) An amount equal to the amount of the deduction |
24 | | used to compute the
federal income tax credit for |
25 | | restoration of substantial amounts held under
claim of |
26 | | right for the taxable year pursuant to Section 1341 of |
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1 | | the
Internal Revenue Code; |
2 | | (R) On and after July 20, 1999, in the case of an |
3 | | attorney-in-fact with respect to whom an
interinsurer |
4 | | or a reciprocal insurer has made the election under |
5 | | Section 835 of
the Internal Revenue Code, 26 U.S.C. |
6 | | 835, an amount equal to the excess, if
any, of the |
7 | | amounts paid or incurred by that interinsurer or |
8 | | reciprocal insurer
in the taxable year to the |
9 | | attorney-in-fact over the deduction allowed to that
|
10 | | interinsurer or reciprocal insurer with respect to the |
11 | | attorney-in-fact under
Section 835(b) of the Internal |
12 | | Revenue Code for the taxable year; the provisions of |
13 | | this subparagraph are exempt from the provisions of |
14 | | Section 250; |
15 | | (S) For taxable years ending on or after December |
16 | | 31, 1997, in the
case of a Subchapter
S corporation, an |
17 | | amount equal to all amounts of income allocable to a
|
18 | | shareholder subject to the Personal Property Tax |
19 | | Replacement Income Tax imposed
by subsections (c) and |
20 | | (d) of Section 201 of this Act, including amounts
|
21 | | allocable to organizations exempt from federal income |
22 | | tax by reason of Section
501(a) of the Internal Revenue |
23 | | Code. This subparagraph (S) is exempt from
the |
24 | | provisions of Section 250; |
25 | | (T) For taxable years 2001 and thereafter, for the |
26 | | taxable year in
which the bonus depreciation deduction
|
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1 | | is taken on the taxpayer's federal income tax return |
2 | | under
subsection (k) of Section 168 of the Internal |
3 | | Revenue Code and for each
applicable taxable year |
4 | | thereafter, an amount equal to "x", where: |
5 | | (1) "y" equals the amount of the depreciation |
6 | | deduction taken for the
taxable year
on the |
7 | | taxpayer's federal income tax return on property |
8 | | for which the bonus
depreciation deduction
was |
9 | | taken in any year under subsection (k) of Section |
10 | | 168 of the Internal
Revenue Code, but not including |
11 | | the bonus depreciation deduction; |
12 | | (2) for taxable years ending on or before |
13 | | December 31, 2005, "x" equals "y" multiplied by 30 |
14 | | and then divided by 70 (or "y"
multiplied by |
15 | | 0.429); and |
16 | | (3) for taxable years ending after December |
17 | | 31, 2005: |
18 | | (i) for property on which a bonus |
19 | | depreciation deduction of 30% of the adjusted |
20 | | basis was taken, "x" equals "y" multiplied by |
21 | | 30 and then divided by 70 (or "y"
multiplied by |
22 | | 0.429); and |
23 | | (ii) for property on which a bonus |
24 | | depreciation deduction of 50% of the adjusted |
25 | | basis was taken, "x" equals "y" multiplied by |
26 | | 1.0. |
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1 | | The aggregate amount deducted under this |
2 | | subparagraph in all taxable
years for any one piece of |
3 | | property may not exceed the amount of the bonus
|
4 | | depreciation deduction
taken on that property on the |
5 | | taxpayer's federal income tax return under
subsection |
6 | | (k) of Section 168 of the Internal Revenue Code. This |
7 | | subparagraph (T) is exempt from the provisions of |
8 | | Section 250; |
9 | | (U) If the taxpayer sells, transfers, abandons, or |
10 | | otherwise disposes of
property for which the taxpayer |
11 | | was required in any taxable year to make an
addition |
12 | | modification under subparagraph (E-10), then an amount |
13 | | equal to that
addition modification. |
14 | | If the taxpayer continues to own property through |
15 | | the last day of the last tax year for which the |
16 | | taxpayer may claim a depreciation deduction for |
17 | | federal income tax purposes and for which the taxpayer |
18 | | was required in any taxable year to make an addition |
19 | | modification under subparagraph (E-10), then an amount |
20 | | equal to that addition modification.
|
21 | | The taxpayer is allowed to take the deduction under |
22 | | this subparagraph
only once with respect to any one |
23 | | piece of property. |
24 | | This subparagraph (U) is exempt from the |
25 | | provisions of Section 250; |
26 | | (V) The amount of: (i) any interest income (net of |
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1 | | the deductions allocable thereto) taken into account |
2 | | for the taxable year with respect to a transaction with |
3 | | a taxpayer that is required to make an addition |
4 | | modification with respect to such transaction under |
5 | | Section 203(a)(2)(D-17), 203(b)(2)(E-12), |
6 | | 203(c)(2)(G-12), or 203(d)(2)(D-7), but not to exceed |
7 | | the amount of such addition modification,
(ii) any |
8 | | income from intangible property (net of the deductions |
9 | | allocable thereto) taken into account for the taxable |
10 | | year with respect to a transaction with a taxpayer that |
11 | | is required to make an addition modification with |
12 | | respect to such transaction under Section |
13 | | 203(a)(2)(D-18), 203(b)(2)(E-13), 203(c)(2)(G-13), or |
14 | | 203(d)(2)(D-8), but not to exceed the amount of such |
15 | | addition modification, and (iii) any insurance premium |
16 | | income (net of deductions allocable thereto) taken |
17 | | into account for the taxable year with respect to a |
18 | | transaction with a taxpayer that is required to make an |
19 | | addition modification with respect to such transaction |
20 | | under Section 203(a)(2)(D-19), Section |
21 | | 203(b)(2)(E-14), Section 203(c)(2)(G-14), or Section |
22 | | 203(d)(2)(D-9), but not to exceed the amount of that |
23 | | addition modification. This subparagraph (V) is exempt |
24 | | from the provisions of Section 250;
|
25 | | (W) An amount equal to the interest income taken |
26 | | into account for the taxable year (net of the |
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1 | | deductions allocable thereto) with respect to |
2 | | transactions with (i) 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 and (ii) for taxable |
7 | | years ending on or after December 31, 2008, to a person |
8 | | who would be a member of the same unitary business |
9 | | group but for the fact that the person is prohibited |
10 | | under Section 1501(a)(27) from being included in the |
11 | | unitary business group because he or she is ordinarily |
12 | | required to apportion business income under different |
13 | | subsections of Section 304, but not to exceed the |
14 | | addition modification required to be made for the same |
15 | | taxable year under Section 203(b)(2)(E-12) for |
16 | | interest paid, accrued, or incurred, directly or |
17 | | indirectly, to the same person. This subparagraph (W) |
18 | | is exempt from the provisions of Section 250;
|
19 | | (X) 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 (i) 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 and (ii) for taxable |
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1 | | years ending on or after December 31, 2008, to a person |
2 | | who would be a member of the same unitary business |
3 | | group but for the fact that the person is prohibited |
4 | | under Section 1501(a)(27) from being included in the |
5 | | unitary business group because he or she is ordinarily |
6 | | required to apportion business income under different |
7 | | subsections of Section 304, but not to exceed the |
8 | | addition modification required to be made for the same |
9 | | taxable year under Section 203(b)(2)(E-13) for |
10 | | intangible expenses and costs paid, accrued, or |
11 | | incurred, directly or indirectly, to the same foreign |
12 | | person. This subparagraph (X) is exempt from the |
13 | | provisions of Section 250;
|
14 | | (Y) For taxable years ending on or after December |
15 | | 31, 2011, in the case of a taxpayer who was required to |
16 | | add back any insurance premiums under Section |
17 | | 203(b)(2)(E-14), such taxpayer may elect to subtract |
18 | | that part of a reimbursement received from the |
19 | | insurance company equal to the amount of the expense or |
20 | | loss (including expenses incurred by the insurance |
21 | | company) that would have been taken into account as a |
22 | | deduction for federal income tax purposes if the |
23 | | expense or loss had been uninsured. If a taxpayer makes |
24 | | the election provided for by this subparagraph (Y), the |
25 | | insurer to which the premiums were paid must add back |
26 | | to income the amount subtracted by the taxpayer |
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1 | | pursuant to this subparagraph (Y). This subparagraph |
2 | | (Y) is exempt from the provisions of Section 250; and |
3 | | (Z) The difference between the nondeductible |
4 | | controlled foreign corporation dividends under Section |
5 | | 965(e)(3) of the Internal Revenue Code over the taxable |
6 | | income of the taxpayer, computed without regard to |
7 | | Section 965(e)(2)(A) of the Internal Revenue Code, and |
8 | | without regard to any net operating loss deduction. |
9 | | This subparagraph (Z) is exempt from the provisions of |
10 | | Section 250. |
11 | | (3) Special rule. For purposes of paragraph (2) (A), |
12 | | "gross income"
in the case of a life insurance company, for |
13 | | tax years ending on and after
December 31, 1994,
and prior |
14 | | to December 31, 2011, shall mean the gross investment |
15 | | income for the taxable year and, for tax years ending on or |
16 | | after December 31, 2011, shall mean all amounts included in |
17 | | life insurance gross income under Section 803(a)(3) of the |
18 | | Internal Revenue Code. |
19 | | (c) Trusts and estates. |
20 | | (1) In general. In the case of a trust or estate, base |
21 | | income means
an amount equal to the taxpayer's taxable |
22 | | income for the taxable year as
modified by paragraph (2). |
23 | | (2) Modifications. Subject to the provisions of |
24 | | paragraph (3), the
taxable income referred to in paragraph |
25 | | (1) shall be modified by adding
thereto the sum of the |
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1 | | following amounts: |
2 | | (A) An amount equal to all amounts paid or accrued |
3 | | to the taxpayer
as interest or dividends during the |
4 | | taxable year to the extent excluded
from gross income |
5 | | in the computation of taxable income; |
6 | | (B) In the case of (i) an estate, $600; (ii) a |
7 | | trust which, under
its governing instrument, is |
8 | | required to distribute all of its income
currently, |
9 | | $300; and (iii) any other trust, $100, but in each such |
10 | | case,
only to the extent such amount was deducted in |
11 | | the computation of
taxable income; |
12 | | (C) An amount equal to the amount of tax imposed by |
13 | | this Act to the
extent deducted from gross income in |
14 | | the computation of taxable income
for the taxable year; |
15 | | (D) The amount of any net operating loss deduction |
16 | | taken in arriving at
taxable income, other than a net |
17 | | operating loss carried forward from a
taxable year |
18 | | ending prior to December 31, 1986; |
19 | | (E) For taxable years in which a net operating loss |
20 | | carryback or
carryforward from a taxable year ending |
21 | | prior to December 31, 1986 is an
element of taxable |
22 | | income under paragraph (1) of subsection (e) or |
23 | | subparagraph
(E) of paragraph (2) of subsection (e), |
24 | | the amount by which addition
modifications other than |
25 | | those provided by this subparagraph (E) exceeded
|
26 | | subtraction modifications in such taxable year, with |
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1 | | the following limitations
applied in the order that |
2 | | they are listed: |
3 | | (i) the addition modification relating to the |
4 | | net operating loss
carried back or forward to the |
5 | | taxable year from any taxable year ending
prior to |
6 | | December 31, 1986 shall be reduced by the amount of |
7 | | addition
modification under this subparagraph (E) |
8 | | which related to that net
operating loss and which |
9 | | was taken into account in calculating the base
|
10 | | income of an earlier taxable year, and |
11 | | (ii) the addition modification relating to the |
12 | | net operating loss
carried back or forward to the |
13 | | taxable year from any taxable year ending
prior to |
14 | | December 31, 1986 shall not exceed the amount of |
15 | | such carryback or
carryforward; |
16 | | For taxable years in which there is a net operating |
17 | | loss carryback or
carryforward from more than one other |
18 | | taxable year ending prior to December
31, 1986, the |
19 | | addition modification provided in this subparagraph |
20 | | (E) shall
be the sum of the amounts computed |
21 | | independently under the preceding
provisions of this |
22 | | subparagraph (E) for each such taxable year; |
23 | | (F) For taxable years ending on or after January 1, |
24 | | 1989, an amount
equal to the tax deducted pursuant to |
25 | | Section 164 of the Internal Revenue
Code if the trust |
26 | | or estate is claiming the same tax for purposes of the
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1 | | Illinois foreign tax credit under Section 601 of this |
2 | | Act; |
3 | | (G) An amount equal to the amount of the capital |
4 | | gain deduction
allowable under the Internal Revenue |
5 | | Code, to the extent deducted from
gross income in the |
6 | | computation of taxable income; |
7 | | (G-5) For taxable years ending after December 31, |
8 | | 1997, an
amount equal to any eligible remediation costs |
9 | | that the trust or estate
deducted in computing adjusted |
10 | | gross income and for which the trust
or estate claims a |
11 | | credit under subsection (l) of Section 201; |
12 | | (G-10) For taxable years 2001 and thereafter, an |
13 | | amount equal to the
bonus depreciation deduction taken |
14 | | on the taxpayer's federal income tax return for the |
15 | | taxable
year under subsection (k) of Section 168 of the |
16 | | Internal Revenue Code; and |
17 | | (G-11) If the taxpayer sells, transfers, abandons, |
18 | | or otherwise disposes of property for which the |
19 | | taxpayer was required in any taxable year to
make an |
20 | | addition modification under subparagraph (G-10), then |
21 | | an amount equal
to the aggregate amount of the |
22 | | deductions taken in all taxable
years under |
23 | | subparagraph (R) with respect to that property. |
24 | | If the taxpayer continues to own property through |
25 | | the last day of the last tax year for which the |
26 | | taxpayer may claim a depreciation deduction for |
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1 | | federal income tax purposes and for which the taxpayer |
2 | | was allowed in any taxable year to make a subtraction |
3 | | modification under subparagraph (R), then an amount |
4 | | equal to that subtraction modification.
|
5 | | The taxpayer is required to make the addition |
6 | | modification under this
subparagraph
only once with |
7 | | respect to any one piece of property; |
8 | | (G-12) An amount equal to the amount otherwise |
9 | | allowed as a deduction in computing base income for |
10 | | interest paid, accrued, or incurred, directly or |
11 | | indirectly, (i) for taxable years ending on or after |
12 | | December 31, 2004, to a foreign person who would be a |
13 | | member of the same unitary business group but for the |
14 | | fact that the foreign person's business activity |
15 | | outside the United States is 80% or more of the foreign |
16 | | person's total business activity and (ii) for taxable |
17 | | years ending on or after December 31, 2008, to a person |
18 | | who would be a member of the same unitary business |
19 | | group but for the fact that the person is prohibited |
20 | | under Section 1501(a)(27) from being included in the |
21 | | unitary business group because he or she is ordinarily |
22 | | required to apportion business income under different |
23 | | subsections of Section 304. The addition modification |
24 | | required by this subparagraph shall be reduced to the |
25 | | extent that dividends were included in base income of |
26 | | the unitary group for the same taxable year and |
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1 | | received by the taxpayer or by a member of the |
2 | | taxpayer's unitary business group (including amounts |
3 | | included in gross income pursuant to Sections 951 |
4 | | through 964 of the Internal Revenue Code and amounts |
5 | | included in gross income under Section 78 of the |
6 | | Internal Revenue Code) with respect to the stock of the |
7 | | same person to whom the interest was paid, accrued, or |
8 | | incurred.
|
9 | | This paragraph shall not apply to the following:
|
10 | | (i) an item of interest paid, accrued, or |
11 | | incurred, directly or indirectly, to a person who |
12 | | is subject in a foreign country or state, other |
13 | | than a state which requires mandatory unitary |
14 | | reporting, to a tax on or measured by net income |
15 | | with respect to such interest; or |
16 | | (ii) an item of interest paid, accrued, or |
17 | | incurred, directly or indirectly, to a person if |
18 | | the taxpayer can establish, based on a |
19 | | preponderance of the evidence, both of the |
20 | | following: |
21 | | (a) the person, during the same taxable |
22 | | year, paid, accrued, or incurred, the interest |
23 | | to a person that is not a related member, and |
24 | | (b) the transaction giving rise to the |
25 | | interest expense between the taxpayer and the |
26 | | person did not have as a principal purpose the |
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1 | | avoidance of Illinois income tax, and is paid |
2 | | pursuant to a contract or agreement that |
3 | | reflects an arm's-length interest rate and |
4 | | terms; or
|
5 | | (iii) the taxpayer can establish, based on |
6 | | clear and convincing evidence, that the interest |
7 | | paid, accrued, or incurred relates to a contract or |
8 | | agreement entered into at arm's-length rates and |
9 | | terms and the principal purpose for the payment is |
10 | | not federal or Illinois tax avoidance; or
|
11 | | (iv) an item of interest paid, accrued, or |
12 | | incurred, directly or indirectly, to a person if |
13 | | the taxpayer establishes by clear and convincing |
14 | | evidence that the adjustments are unreasonable; or |
15 | | if the taxpayer and the Director agree in writing |
16 | | to the application or use of an alternative method |
17 | | of apportionment under Section 304(f).
|
18 | | Nothing in this subsection shall preclude the |
19 | | Director from making any other adjustment |
20 | | otherwise allowed under Section 404 of this Act for |
21 | | any tax year beginning after the effective date of |
22 | | this amendment provided such adjustment is made |
23 | | pursuant to regulation adopted by the Department |
24 | | and such regulations provide methods and standards |
25 | | by which the Department will utilize its authority |
26 | | under Section 404 of this Act;
|
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1 | | (G-13) An amount equal to the amount of intangible |
2 | | expenses and costs otherwise allowed as a deduction in |
3 | | computing base income, and that were paid, accrued, or |
4 | | incurred, directly or indirectly, (i) for taxable |
5 | | years ending on or after December 31, 2004, to a |
6 | | foreign person who would be a member of the same |
7 | | unitary business group but for the fact that the |
8 | | foreign person's business activity outside the United |
9 | | States is 80% or more of that person's total business |
10 | | activity and (ii) for taxable years ending on or after |
11 | | December 31, 2008, to a person who would be a member of |
12 | | the same unitary business group but for the fact that |
13 | | the person is prohibited under Section 1501(a)(27) |
14 | | from being included in the unitary business group |
15 | | because he or she is ordinarily required to apportion |
16 | | business income under different subsections of Section |
17 | | 304. The addition modification required by this |
18 | | subparagraph shall be reduced to the extent that |
19 | | dividends were included in base income of the unitary |
20 | | group for the same taxable year and received by the |
21 | | 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 |
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1 | | the intangible expenses and costs were directly or |
2 | | indirectly paid, incurred, or accrued. The preceding |
3 | | sentence shall not apply to the extent that the same |
4 | | dividends caused a reduction to the addition |
5 | | modification required under Section 203(c)(2)(G-12) of |
6 | | this Act. As used in this subparagraph, the term |
7 | | "intangible expenses and costs" includes: (1) |
8 | | expenses, losses, and costs for or related to the |
9 | | direct or indirect acquisition, use, maintenance or |
10 | | management, ownership, sale, exchange, or any other |
11 | | disposition of intangible property; (2) losses |
12 | | incurred, directly or indirectly, from factoring |
13 | | transactions or discounting transactions; (3) royalty, |
14 | | patent, technical, and copyright fees; (4) licensing |
15 | | fees; and (5) other similar expenses and costs. For |
16 | | purposes of this subparagraph, "intangible property" |
17 | | includes patents, patent applications, trade names, |
18 | | trademarks, service marks, copyrights, mask works, |
19 | | trade secrets, and similar types of intangible assets. |
20 | | This paragraph shall not apply to the following: |
21 | | (i) any item of intangible expenses or costs |
22 | | paid, accrued, or incurred, directly or |
23 | | indirectly, from a transaction with a person who is |
24 | | subject in a foreign country or state, other than a |
25 | | state which requires mandatory unitary reporting, |
26 | | to a tax on or measured by net income with respect |
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1 | | to such item; or |
2 | | (ii) any item of intangible expense or cost |
3 | | paid, accrued, or incurred, directly or |
4 | | indirectly, if the taxpayer can establish, based |
5 | | on a preponderance of the evidence, both of the |
6 | | following: |
7 | | (a) the person during the same taxable |
8 | | year paid, accrued, or incurred, the |
9 | | intangible expense or cost to a person that is |
10 | | not a related member, and |
11 | | (b) the transaction giving rise to the |
12 | | intangible expense or cost between the |
13 | | taxpayer and the person did not have as a |
14 | | principal purpose the avoidance of Illinois |
15 | | income tax, and is paid pursuant to a contract |
16 | | or agreement that reflects arm's-length terms; |
17 | | or |
18 | | (iii) any item of intangible expense or cost |
19 | | paid, accrued, or incurred, directly or |
20 | | indirectly, from a transaction with a person if the |
21 | | taxpayer establishes by clear and convincing |
22 | | evidence, that the adjustments are unreasonable; |
23 | | or if the taxpayer and the Director agree in |
24 | | writing to the application or use of an alternative |
25 | | method of apportionment under Section 304(f);
|
26 | | Nothing in this subsection shall preclude the |
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1 | | Director from making any other adjustment |
2 | | otherwise allowed under Section 404 of this Act for |
3 | | any tax year beginning after the effective date of |
4 | | this amendment provided such adjustment is made |
5 | | pursuant to regulation adopted by the Department |
6 | | and such regulations provide methods and standards |
7 | | by which the Department will utilize its authority |
8 | | under Section 404 of this Act;
|
9 | | (G-14) For taxable years ending on or after |
10 | | December 31, 2008, an amount equal to the amount of |
11 | | insurance premium expenses and costs otherwise allowed |
12 | | as a deduction in computing base income, and that were |
13 | | paid, accrued, or incurred, directly or indirectly, to |
14 | | a person who would be a member of the same unitary |
15 | | business group but for the fact that the person is |
16 | | prohibited under Section 1501(a)(27) from being |
17 | | included in the unitary business group because he or |
18 | | she is ordinarily required to apportion business |
19 | | income under different subsections of Section 304. The |
20 | | addition modification required by this subparagraph |
21 | | shall be reduced to the extent that dividends were |
22 | | included in base income of the unitary group for the |
23 | | same taxable year and received by the taxpayer or by a |
24 | | member of the taxpayer's unitary business group |
25 | | (including amounts included in gross income under |
26 | | Sections 951 through 964 of the Internal Revenue Code |
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1 | | and amounts included in gross income under Section 78 |
2 | | of the Internal Revenue Code) with respect to the stock |
3 | | of the same person to whom the premiums and costs were |
4 | | directly or indirectly paid, incurred, or accrued. The |
5 | | preceding sentence does not apply to the extent that |
6 | | the same dividends caused a reduction to the addition |
7 | | modification required under Section 203(c)(2)(G-12) or |
8 | | Section 203(c)(2)(G-13) of this Act; |
9 | | (G-15) An amount equal to the credit allowable to |
10 | | the taxpayer under Section 218(a) of this Act, |
11 | | determined without regard to Section 218(c) of this |
12 | | Act; |
13 | | (G-16) For taxable years ending on or after |
14 | | December 31, 2017, an amount equal to the deduction |
15 | | allowed under Section 199 of the Internal Revenue Code |
16 | | for the taxable year; |
17 | | and by deducting from the total so obtained the sum of the |
18 | | following
amounts: |
19 | | (H) An amount equal to all amounts included in such |
20 | | total pursuant
to the provisions of Sections 402(a), |
21 | | 402(c), 403(a), 403(b), 406(a), 407(a)
and 408 of the |
22 | | Internal Revenue Code or included in such total as
|
23 | | distributions under the provisions of any retirement |
24 | | or disability plan for
employees of any governmental |
25 | | agency or unit, or retirement payments to
retired |
26 | | partners, which payments are excluded in computing net |
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1 | | earnings
from self employment by Section 1402 of the |
2 | | Internal Revenue Code and
regulations adopted pursuant |
3 | | thereto; |
4 | | (I) The valuation limitation amount; |
5 | | (J) An amount equal to the amount of any tax |
6 | | imposed by this Act
which was refunded to the taxpayer |
7 | | and included in such total for the
taxable year; |
8 | | (K) An amount equal to all amounts included in |
9 | | taxable income as
modified by subparagraphs (A), (B), |
10 | | (C), (D), (E), (F) and (G) which
are exempt from |
11 | | taxation by this State either by reason of its statutes |
12 | | or
Constitution
or by reason of the Constitution, |
13 | | treaties or statutes of the United States;
provided |
14 | | that, in the case of any statute of this State that |
15 | | exempts income
derived from bonds or other obligations |
16 | | from the tax imposed under this Act,
the amount |
17 | | exempted shall be the interest net of bond premium |
18 | | amortization; |
19 | | (L) With the exception of any amounts subtracted |
20 | | under subparagraph
(K),
an amount equal to the sum of |
21 | | all amounts disallowed as
deductions by (i) Sections |
22 | | 171(a) (2) and 265(a)(2) of the Internal Revenue
Code, |
23 | | and all amounts of expenses allocable
to interest and |
24 | | disallowed as deductions by Section 265(1) of the |
25 | | Internal
Revenue Code;
and (ii) for taxable years
|
26 | | ending on or after August 13, 1999, Sections
171(a)(2), |
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1 | | 265,
280C, and 832(b)(5)(B)(i) of the Internal Revenue |
2 | | Code, plus, (iii) for taxable years ending on or after |
3 | | December 31, 2011, Section 45G(e)(3) of the Internal |
4 | | Revenue Code and, for taxable years ending on or after |
5 | | December 31, 2008, any amount included in gross income |
6 | | under Section 87 of the Internal Revenue Code; the |
7 | | provisions of this
subparagraph are exempt from the |
8 | | provisions of Section 250; |
9 | | (M) An amount equal to those dividends included in |
10 | | such total
which were paid by a corporation which |
11 | | conducts business operations in a River Edge |
12 | | Redevelopment Zone or zones created under the River |
13 | | Edge Redevelopment Zone Act and
conducts substantially |
14 | | all of its operations in a River Edge Redevelopment |
15 | | Zone or zones. This subparagraph (M) is exempt from the |
16 | | provisions of Section 250; |
17 | | (N) An amount equal to any contribution made to a |
18 | | job training
project established pursuant to the Tax |
19 | | Increment Allocation
Redevelopment Act; |
20 | | (O) An amount equal to those dividends included in |
21 | | such total
that were paid by a corporation that |
22 | | conducts business operations in a
federally designated |
23 | | Foreign Trade Zone or Sub-Zone and that is designated
a |
24 | | High Impact Business located in Illinois; provided |
25 | | that dividends eligible
for the deduction provided in |
26 | | subparagraph (M) of paragraph (2) of this
subsection |
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1 | | shall not be eligible for the deduction provided under |
2 | | this
subparagraph (O); |
3 | | (P) An amount equal to the amount of the deduction |
4 | | used to compute the
federal income tax credit for |
5 | | restoration of substantial amounts held under
claim of |
6 | | right for the taxable year pursuant to Section 1341 of |
7 | | the
Internal Revenue Code; |
8 | | (Q) For taxable year 1999 and thereafter, an amount |
9 | | equal to the
amount of any
(i) distributions, to the |
10 | | extent includible in gross income for
federal income |
11 | | tax purposes, made to the taxpayer because of
his or |
12 | | her status as a victim of
persecution for racial or |
13 | | religious reasons by Nazi Germany or any other Axis
|
14 | | regime or as an heir of the victim and (ii) items
of |
15 | | income, to the extent
includible in gross income for |
16 | | federal income tax purposes, attributable to,
derived |
17 | | from or in any way related to assets stolen from, |
18 | | hidden from, or
otherwise lost to a victim of
|
19 | | persecution for racial or religious reasons by Nazi
|
20 | | Germany or any other Axis regime
immediately prior to, |
21 | | during, and immediately after World War II, including,
|
22 | | but
not limited to, interest on the proceeds receivable |
23 | | as insurance
under policies issued to a victim of |
24 | | persecution for racial or religious
reasons by Nazi |
25 | | Germany or any other Axis regime by European insurance
|
26 | | companies
immediately prior to and during World War II;
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1 | | provided, however, this subtraction from federal |
2 | | adjusted gross income does not
apply to assets acquired |
3 | | with such assets or with the proceeds from the sale of
|
4 | | such assets; provided, further, this paragraph shall |
5 | | only apply to a taxpayer
who was the first recipient of |
6 | | such assets after their recovery and who is a
victim of
|
7 | | persecution for racial or religious reasons
by Nazi |
8 | | Germany or any other Axis regime or as an heir of the |
9 | | victim. The
amount of and the eligibility for any |
10 | | public assistance, benefit, or
similar entitlement is |
11 | | not affected by the inclusion of items (i) and (ii) of
|
12 | | this paragraph in gross income for federal income tax |
13 | | purposes.
This paragraph is exempt from the provisions |
14 | | of Section 250; |
15 | | (R) For taxable years 2001 and thereafter, for the |
16 | | taxable year in
which the bonus depreciation deduction
|
17 | | is taken on the taxpayer's federal income tax return |
18 | | under
subsection (k) of Section 168 of the Internal |
19 | | Revenue Code and for each
applicable taxable year |
20 | | thereafter, an amount equal to "x", where: |
21 | | (1) "y" equals the amount of the depreciation |
22 | | deduction taken for the
taxable year
on the |
23 | | taxpayer's federal income tax return on property |
24 | | for which the bonus
depreciation deduction
was |
25 | | taken in any year under subsection (k) of Section |
26 | | 168 of the Internal
Revenue Code, but not including |
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1 | | the bonus depreciation deduction; |
2 | | (2) for taxable years ending on or before |
3 | | December 31, 2005, "x" equals "y" multiplied by 30 |
4 | | and then divided by 70 (or "y"
multiplied by |
5 | | 0.429); and |
6 | | (3) for taxable years ending after December |
7 | | 31, 2005: |
8 | | (i) for property on which a bonus |
9 | | depreciation deduction of 30% of the adjusted |
10 | | basis was taken, "x" equals "y" multiplied by |
11 | | 30 and then divided by 70 (or "y"
multiplied by |
12 | | 0.429); and |
13 | | (ii) for property on which a bonus |
14 | | depreciation deduction of 50% of the adjusted |
15 | | basis was taken, "x" equals "y" multiplied by |
16 | | 1.0. |
17 | | The aggregate amount deducted under this |
18 | | subparagraph in all taxable
years for any one piece of |
19 | | property may not exceed the amount of the bonus
|
20 | | depreciation deduction
taken on that property on the |
21 | | taxpayer's federal income tax return under
subsection |
22 | | (k) of Section 168 of the Internal Revenue Code. This |
23 | | subparagraph (R) is exempt from the provisions of |
24 | | Section 250; |
25 | | (S) If the taxpayer sells, transfers, abandons, or |
26 | | otherwise disposes of
property for which the taxpayer |
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1 | | was required in any taxable year to make an
addition |
2 | | modification under subparagraph (G-10), then an amount |
3 | | equal to that
addition modification. |
4 | | If the taxpayer continues to own property through |
5 | | the last day of the last tax year for which the |
6 | | taxpayer may claim a depreciation deduction for |
7 | | federal income tax purposes and for which the taxpayer |
8 | | was required in any taxable year to make an addition |
9 | | modification under subparagraph (G-10), then an amount |
10 | | equal to that addition modification.
|
11 | | The taxpayer is allowed to take the deduction under |
12 | | this subparagraph
only once with respect to any one |
13 | | piece of property. |
14 | | This subparagraph (S) is exempt from the |
15 | | provisions of Section 250; |
16 | | (T) The amount of (i) any interest income (net of |
17 | | the deductions allocable thereto) taken into account |
18 | | for the taxable year with respect to a transaction with |
19 | | a taxpayer that is required to make an addition |
20 | | modification with respect to such transaction under |
21 | | Section 203(a)(2)(D-17), 203(b)(2)(E-12), |
22 | | 203(c)(2)(G-12), or 203(d)(2)(D-7), but not to exceed |
23 | | the amount of such addition modification and
(ii) any |
24 | | income from intangible property (net of the deductions |
25 | | allocable thereto) taken into account for the taxable |
26 | | year with respect to a transaction with a taxpayer that |
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1 | | is required to make an addition modification with |
2 | | respect to such transaction under Section |
3 | | 203(a)(2)(D-18), 203(b)(2)(E-13), 203(c)(2)(G-13), or |
4 | | 203(d)(2)(D-8), but not to exceed the amount of such |
5 | | addition modification. This subparagraph (T) is exempt |
6 | | from the provisions of Section 250;
|
7 | | (U) 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 (i) a foreign person who would be a |
11 | | member of the taxpayer's unitary business group but for |
12 | | the fact the foreign person's business activity |
13 | | outside the United States is 80% or more of that |
14 | | person's total business activity and (ii) for taxable |
15 | | years ending on or after December 31, 2008, to a person |
16 | | who would be a member of the same unitary business |
17 | | group but for the fact that the person is prohibited |
18 | | under Section 1501(a)(27) from being included in the |
19 | | unitary business group because he or she is ordinarily |
20 | | required to apportion business income under different |
21 | | subsections of Section 304, but not to exceed the |
22 | | addition modification required to be made for the same |
23 | | taxable year under Section 203(c)(2)(G-12) for |
24 | | interest paid, accrued, or incurred, directly or |
25 | | indirectly, to the same person. This subparagraph (U) |
26 | | is exempt from the provisions of Section 250; |
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1 | | (V) 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 (i) 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 and (ii) for taxable |
9 | | years ending on or after December 31, 2008, to a person |
10 | | who would be a member of the same unitary business |
11 | | group but for the fact that the person is prohibited |
12 | | under Section 1501(a)(27) from being included in the |
13 | | unitary business group because he or she is ordinarily |
14 | | required to apportion business income under different |
15 | | subsections of Section 304, but not to exceed the |
16 | | addition modification required to be made for the same |
17 | | taxable year under Section 203(c)(2)(G-13) for |
18 | | intangible expenses and costs paid, accrued, or |
19 | | incurred, directly or indirectly, to the same foreign |
20 | | person. This subparagraph (V) is exempt from the |
21 | | provisions of Section 250;
|
22 | | (W) in the case of an estate, an amount equal to |
23 | | all amounts included in such total pursuant to the |
24 | | provisions of Section 111 of the Internal Revenue Code |
25 | | as a recovery of items previously deducted by the |
26 | | decedent from adjusted gross income in the computation |
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1 | | of taxable income. This subparagraph (W) is exempt from |
2 | | Section 250; |
3 | | (X) an amount equal to the refund included in such |
4 | | total of any tax deducted for federal income tax |
5 | | purposes, to the extent that deduction was added back |
6 | | under subparagraph (F). This subparagraph (X) is |
7 | | exempt from the provisions of Section 250; and |
8 | | (Y) For taxable years ending on or after December |
9 | | 31, 2011, in the case of a taxpayer who was required to |
10 | | add back any insurance premiums under Section |
11 | | 203(c)(2)(G-14), such taxpayer may elect to subtract |
12 | | that part of a reimbursement received from the |
13 | | insurance company equal to the amount of the expense or |
14 | | loss (including expenses incurred by the insurance |
15 | | company) that would have been taken into account as a |
16 | | deduction for federal income tax purposes if the |
17 | | expense or loss had been uninsured. If a taxpayer makes |
18 | | the election provided for by this subparagraph (Y), the |
19 | | insurer to which the premiums were paid must add back |
20 | | to income the amount subtracted by the taxpayer |
21 | | pursuant to this subparagraph (Y). This subparagraph |
22 | | (Y) is exempt from the provisions of Section 250. |
23 | | (3) Limitation. The amount of any modification |
24 | | otherwise required
under this subsection shall, under |
25 | | regulations prescribed by the
Department, be adjusted by |
26 | | any amounts included therein which were
properly paid, |
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1 | | credited, or required to be distributed, or permanently set
|
2 | | aside for charitable purposes pursuant to Internal Revenue |
3 | | Code Section
642(c) during the taxable year. |
4 | | (d) Partnerships. |
5 | | (1) In general. In the case of a partnership, base |
6 | | income means an
amount equal to the taxpayer's taxable |
7 | | income for the taxable year as
modified by paragraph (2). |
8 | | (2) Modifications. The taxable income referred to in |
9 | | paragraph (1)
shall be modified by adding thereto the sum |
10 | | of the following amounts: |
11 | | (A) An amount equal to all amounts paid or accrued |
12 | | to the taxpayer as
interest or dividends during the |
13 | | taxable year to the extent excluded from
gross income |
14 | | in the computation of taxable income; |
15 | | (B) An amount equal to the amount of tax imposed by |
16 | | this Act to the
extent deducted from gross income for |
17 | | the taxable year; |
18 | | (C) The amount of deductions allowed to the |
19 | | partnership pursuant to
Section 707 (c) of the Internal |
20 | | Revenue Code in calculating its taxable income; |
21 | | (D) An amount equal to the amount of the capital |
22 | | gain deduction
allowable under the Internal Revenue |
23 | | Code, to the extent deducted from
gross income in the |
24 | | computation of taxable income; |
25 | | (D-5) For taxable years 2001 and thereafter, an |
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1 | | amount equal to the
bonus depreciation deduction taken |
2 | | on the taxpayer's federal income tax return for the |
3 | | taxable
year under subsection (k) of Section 168 of the |
4 | | Internal Revenue Code; |
5 | | (D-6) If the taxpayer sells, transfers, abandons, |
6 | | or otherwise disposes of
property for which the |
7 | | taxpayer was required in any taxable year to make an
|
8 | | addition modification under subparagraph (D-5), then |
9 | | an amount equal to the
aggregate amount of the |
10 | | deductions taken in all taxable years
under |
11 | | subparagraph (O) with respect to that property. |
12 | | If the taxpayer continues to own property through |
13 | | the last day of the last tax year for which the |
14 | | taxpayer may claim a depreciation deduction for |
15 | | federal income tax purposes and for which the taxpayer |
16 | | was allowed in any taxable year to make a subtraction |
17 | | modification under subparagraph (O), then an amount |
18 | | equal to that subtraction modification.
|
19 | | The taxpayer is required to make the addition |
20 | | modification under this
subparagraph
only once with |
21 | | respect to any one piece of property; |
22 | | (D-7) An amount equal to the amount otherwise |
23 | | allowed as a deduction in computing base income for |
24 | | interest paid, accrued, or incurred, directly or |
25 | | indirectly, (i) for taxable years ending on or after |
26 | | December 31, 2004, to a foreign person who would be a |
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1 | | member of the same unitary business group but for the |
2 | | fact the foreign person's business activity outside |
3 | | the United States is 80% or more of the foreign |
4 | | person's total business activity and (ii) for taxable |
5 | | years ending on or after December 31, 2008, to a person |
6 | | who would be a member of the same unitary business |
7 | | group but for the fact that the person is prohibited |
8 | | under Section 1501(a)(27) from being included in the |
9 | | unitary business group because he or she is ordinarily |
10 | | required to apportion business income under different |
11 | | subsections of Section 304. The addition modification |
12 | | required by this subparagraph shall be reduced to the |
13 | | extent that dividends were included in base income of |
14 | | the unitary group for the same taxable year and |
15 | | received by the taxpayer or by a member of the |
16 | | taxpayer's unitary business group (including amounts |
17 | | included in gross income pursuant to Sections 951 |
18 | | through 964 of the Internal Revenue Code and amounts |
19 | | included in gross income under Section 78 of the |
20 | | Internal Revenue Code) with respect to the stock of the |
21 | | same person to whom the interest was paid, accrued, or |
22 | | incurred.
|
23 | | This paragraph shall not apply to the following:
|
24 | | (i) an item of interest paid, accrued, or |
25 | | incurred, directly or indirectly, to a person who |
26 | | is subject in a foreign country or state, other |
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1 | | than a state which requires mandatory unitary |
2 | | reporting, to a tax on or measured by net income |
3 | | with respect to such interest; or |
4 | | (ii) an item of interest paid, accrued, or |
5 | | incurred, directly or indirectly, to a person if |
6 | | the taxpayer can establish, based on a |
7 | | preponderance of the evidence, both of the |
8 | | following: |
9 | | (a) the person, during the same taxable |
10 | | year, paid, accrued, or incurred, the interest |
11 | | to a person that is not a related member, and |
12 | | (b) the transaction giving rise to the |
13 | | interest expense between the taxpayer and the |
14 | | person did not have as a principal purpose the |
15 | | avoidance of Illinois income tax, and is paid |
16 | | pursuant to a contract or agreement that |
17 | | reflects an arm's-length interest rate and |
18 | | terms; or
|
19 | | (iii) the taxpayer can establish, based on |
20 | | clear and convincing evidence, that the interest |
21 | | paid, accrued, or incurred relates to a contract or |
22 | | agreement entered into at arm's-length rates and |
23 | | terms and the principal purpose for the payment is |
24 | | not federal or Illinois tax avoidance; or
|
25 | | (iv) an item of interest paid, accrued, or |
26 | | incurred, directly or indirectly, to a person if |
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1 | | the taxpayer establishes by clear and convincing |
2 | | evidence that the adjustments are unreasonable; or |
3 | | if the taxpayer and the Director agree in writing |
4 | | to the application or use of an alternative method |
5 | | of apportionment under Section 304(f).
|
6 | | Nothing in this subsection shall preclude the |
7 | | Director from making any other adjustment |
8 | | otherwise allowed under Section 404 of this Act for |
9 | | any tax year beginning after the effective date of |
10 | | this amendment provided such adjustment is made |
11 | | pursuant to regulation adopted by the Department |
12 | | and such regulations provide methods and standards |
13 | | by which the Department will utilize its authority |
14 | | under Section 404 of this Act; and
|
15 | | (D-8) An amount equal to the amount of intangible |
16 | | expenses and costs otherwise allowed as a deduction in |
17 | | computing base income, and that were paid, accrued, or |
18 | | incurred, directly or indirectly, (i) for taxable |
19 | | years ending on or after December 31, 2004, to a |
20 | | foreign person who would be a member of the same |
21 | | unitary business group but for the fact that the |
22 | | foreign person's business activity outside the United |
23 | | States is 80% or more of that person's total business |
24 | | activity and (ii) for taxable years ending on or after |
25 | | December 31, 2008, to a person who would be a member of |
26 | | the same unitary business group but for the fact that |
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| | HB4775 | - 77 - | LRB100 18277 HLH 33481 b |
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1 | | the person is prohibited under Section 1501(a)(27) |
2 | | from being included in the unitary business group |
3 | | because he or she is ordinarily required to apportion |
4 | | business income under different subsections of Section |
5 | | 304. The addition modification required by this |
6 | | subparagraph shall be reduced to the extent that |
7 | | dividends were included in base income of the unitary |
8 | | group for the same taxable year and received by the |
9 | | taxpayer or by a member of the taxpayer's unitary |
10 | | business group (including amounts included in gross |
11 | | income pursuant to Sections 951 through 964 of the |
12 | | Internal Revenue Code and amounts included in gross |
13 | | income under Section 78 of the Internal Revenue Code) |
14 | | with respect to the stock of the same person to whom |
15 | | the intangible expenses and costs were directly or |
16 | | indirectly paid, incurred or accrued. The preceding |
17 | | sentence shall not apply to the extent that the same |
18 | | dividends caused a reduction to the addition |
19 | | modification required under Section 203(d)(2)(D-7) of |
20 | | this Act. As used in this subparagraph, the term |
21 | | "intangible expenses and costs" includes (1) expenses, |
22 | | losses, and costs for, or related to, the direct or |
23 | | indirect acquisition, use, maintenance or management, |
24 | | ownership, sale, exchange, or any other disposition of |
25 | | intangible property; (2) losses incurred, directly or |
26 | | indirectly, from factoring transactions or discounting |
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1 | | transactions; (3) royalty, patent, technical, and |
2 | | copyright fees; (4) licensing fees; and (5) other |
3 | | similar expenses and costs. For purposes of this |
4 | | subparagraph, "intangible property" includes patents, |
5 | | patent applications, trade names, trademarks, service |
6 | | marks, copyrights, mask works, trade secrets, and |
7 | | similar types of intangible 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 person who is |
12 | | subject in a foreign country or state, other than a |
13 | | state which requires mandatory unitary reporting, |
14 | | to a tax on or measured by net income with respect |
15 | | 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 person during the same taxable |
22 | | 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 |
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1 | | taxpayer and the person did not have as a |
2 | | 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 person if the |
9 | | taxpayer establishes by clear and convincing |
10 | | evidence, that the adjustments are unreasonable; |
11 | | or if the taxpayer and the Director agree in |
12 | | writing to the application or use of an alternative |
13 | | method of apportionment under Section 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 | | (D-9) For taxable years ending on or after December |
24 | | 31, 2008, an amount equal to the amount of insurance |
25 | | premium expenses and costs otherwise allowed as a |
26 | | deduction in computing base income, and that were paid, |
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1 | | accrued, or incurred, directly or indirectly, to a |
2 | | person who would be a member of the same unitary |
3 | | business group but for the fact that the person is |
4 | | prohibited under Section 1501(a)(27) from being |
5 | | included in the unitary business group because he or |
6 | | she is ordinarily required to apportion business |
7 | | income under different subsections of Section 304. The |
8 | | addition modification required by this subparagraph |
9 | | shall be reduced to the extent that dividends were |
10 | | included in base income of the unitary group for the |
11 | | same taxable year and received by the taxpayer or by a |
12 | | member of the taxpayer's unitary business group |
13 | | (including amounts included in gross income under |
14 | | Sections 951 through 964 of the Internal Revenue Code |
15 | | and amounts included in gross income under Section 78 |
16 | | of the Internal Revenue Code) with respect to the stock |
17 | | of the same person to whom the premiums and costs were |
18 | | directly or indirectly paid, incurred, or accrued. The |
19 | | preceding sentence does not apply to the extent that |
20 | | the same dividends caused a reduction to the addition |
21 | | modification required under Section 203(d)(2)(D-7) or |
22 | | Section 203(d)(2)(D-8) of this Act; |
23 | | (D-10) An amount equal to the credit allowable to |
24 | | the taxpayer under Section 218(a) of this Act, |
25 | | determined without regard to Section 218(c) of this |
26 | | Act; |
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1 | | (D-11) For taxable years ending on or after |
2 | | December 31, 2017, an amount equal to the deduction |
3 | | allowed under Section 199 of the Internal Revenue Code |
4 | | for the taxable year; |
5 | | and by deducting from the total so obtained the following |
6 | | amounts: |
7 | | (E) The valuation limitation amount; |
8 | | (F) An amount equal to the amount of any tax |
9 | | imposed by this Act which
was refunded to the taxpayer |
10 | | and included in such total for the taxable year; |
11 | | (G) An amount equal to all amounts included in |
12 | | taxable income as
modified by subparagraphs (A), (B), |
13 | | (C) and (D) which are exempt from
taxation by this |
14 | | State either by reason of its statutes or Constitution |
15 | | or
by reason of
the Constitution, treaties or statutes |
16 | | of the United States;
provided that, in the case of any |
17 | | statute of this State that exempts income
derived from |
18 | | bonds or other obligations from the tax imposed under |
19 | | this Act,
the amount exempted shall be the interest net |
20 | | of bond premium amortization; |
21 | | (H) Any income of the partnership which |
22 | | constitutes personal service
income as defined in |
23 | | Section 1348 (b) (1) of the Internal Revenue Code (as
|
24 | | in effect December 31, 1981) or a reasonable allowance |
25 | | for compensation
paid or accrued for services rendered |
26 | | by partners to the partnership,
whichever is greater; |
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1 | | this subparagraph (H) is exempt from the provisions of |
2 | | Section 250; |
3 | | (I) An amount equal to all amounts of income |
4 | | distributable to an entity
subject to the Personal |
5 | | Property Tax Replacement Income Tax imposed by
|
6 | | subsections (c) and (d) of Section 201 of this Act |
7 | | including amounts
distributable to organizations |
8 | | exempt from federal income tax by reason of
Section |
9 | | 501(a) of the Internal Revenue Code; this subparagraph |
10 | | (I) is exempt from the provisions of Section 250; |
11 | | (J) With the exception of any amounts subtracted |
12 | | under subparagraph
(G),
an amount equal to the sum of |
13 | | all amounts disallowed as deductions
by (i) Sections |
14 | | 171(a) (2), and 265(2) of the Internal Revenue Code, |
15 | | and all amounts of expenses allocable to
interest and |
16 | | disallowed as deductions by Section 265(1) of the |
17 | | Internal
Revenue Code;
and (ii) for taxable years
|
18 | | ending on or after August 13, 1999, Sections
171(a)(2), |
19 | | 265,
280C, and 832(b)(5)(B)(i) of the Internal Revenue |
20 | | Code, plus, (iii) for taxable years ending on or after |
21 | | December 31, 2011, Section 45G(e)(3) of the Internal |
22 | | Revenue Code and, for taxable years ending on or after |
23 | | December 31, 2008, any amount included in gross income |
24 | | under Section 87 of the Internal Revenue Code; the |
25 | | provisions of this
subparagraph are exempt from the |
26 | | provisions of Section 250; |
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1 | | (K) An amount equal to those dividends included in |
2 | | such total which were
paid by a corporation which |
3 | | conducts business operations in a River Edge |
4 | | Redevelopment Zone or zones created under the River |
5 | | Edge Redevelopment Zone Act and
conducts substantially |
6 | | all of its operations
from a River Edge Redevelopment |
7 | | Zone or zones. This subparagraph (K) is exempt from the |
8 | | provisions of Section 250; |
9 | | (L) An amount equal to any contribution made to a |
10 | | job training project
established pursuant to the Real |
11 | | Property Tax Increment Allocation
Redevelopment Act; |
12 | | (M) An amount equal to those dividends included in |
13 | | such total
that were paid by a corporation that |
14 | | conducts business operations in a
federally designated |
15 | | Foreign Trade Zone or Sub-Zone and that is designated a
|
16 | | High Impact Business located in Illinois; provided |
17 | | that dividends eligible
for the deduction provided in |
18 | | subparagraph (K) of paragraph (2) of this
subsection |
19 | | shall not be eligible for the deduction provided under |
20 | | this
subparagraph (M); |
21 | | (N) An amount equal to the amount of the deduction |
22 | | used to compute the
federal income tax credit for |
23 | | restoration of substantial amounts held under
claim of |
24 | | right for the taxable year pursuant to Section 1341 of |
25 | | the
Internal Revenue Code; |
26 | | (O) For taxable years 2001 and thereafter, for the |
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1 | | taxable year in
which the bonus depreciation deduction
|
2 | | is taken on the taxpayer's federal income tax return |
3 | | under
subsection (k) of Section 168 of the Internal |
4 | | Revenue Code and for each
applicable taxable year |
5 | | thereafter, an amount equal to "x", where: |
6 | | (1) "y" equals the amount of the depreciation |
7 | | deduction taken for the
taxable year
on the |
8 | | taxpayer's federal income tax return on property |
9 | | for which the bonus
depreciation deduction
was |
10 | | taken in any year under subsection (k) of Section |
11 | | 168 of the Internal
Revenue Code, but not including |
12 | | the bonus depreciation deduction; |
13 | | (2) for taxable years ending on or before |
14 | | December 31, 2005, "x" equals "y" multiplied by 30 |
15 | | and then divided by 70 (or "y"
multiplied by |
16 | | 0.429); and |
17 | | (3) for taxable years ending after December |
18 | | 31, 2005: |
19 | | (i) for property on which a bonus |
20 | | depreciation deduction of 30% of the adjusted |
21 | | basis was taken, "x" equals "y" multiplied by |
22 | | 30 and then divided by 70 (or "y"
multiplied by |
23 | | 0.429); and |
24 | | (ii) for property on which a bonus |
25 | | depreciation deduction of 50% of the adjusted |
26 | | basis was taken, "x" equals "y" multiplied by |
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1 | | 1.0. |
2 | | The aggregate amount deducted under this |
3 | | subparagraph in all taxable
years for any one piece of |
4 | | property may not exceed the amount of the bonus
|
5 | | depreciation deduction
taken on that property on the |
6 | | taxpayer's federal income tax return under
subsection |
7 | | (k) of Section 168 of the Internal Revenue Code. This |
8 | | subparagraph (O) is exempt from the provisions of |
9 | | Section 250; |
10 | | (P) If the taxpayer sells, transfers, abandons, or |
11 | | otherwise disposes of
property for which the taxpayer |
12 | | was required in any taxable year to make an
addition |
13 | | modification under subparagraph (D-5), then an amount |
14 | | equal to that
addition modification. |
15 | | If the taxpayer continues to own property through |
16 | | the last day of the last tax year for which the |
17 | | taxpayer may claim a depreciation deduction for |
18 | | federal income tax purposes and for which the taxpayer |
19 | | was required in any taxable year to make an addition |
20 | | modification under subparagraph (D-5), then an amount |
21 | | equal to that addition modification.
|
22 | | The taxpayer is allowed to take the deduction under |
23 | | this subparagraph
only once with respect to any one |
24 | | piece of property. |
25 | | This subparagraph (P) is exempt from the |
26 | | provisions of Section 250; |
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1 | | (Q) The amount of (i) any interest income (net of |
2 | | the deductions allocable thereto) taken into account |
3 | | for the taxable year with respect to a transaction with |
4 | | a taxpayer that is required to make an addition |
5 | | modification with respect to such transaction under |
6 | | Section 203(a)(2)(D-17), 203(b)(2)(E-12), |
7 | | 203(c)(2)(G-12), or 203(d)(2)(D-7), but not to exceed |
8 | | the amount of such addition modification and
(ii) any |
9 | | income from intangible property (net of the deductions |
10 | | allocable thereto) taken into account for the taxable |
11 | | year with respect to a transaction with a taxpayer that |
12 | | is required to make an addition modification with |
13 | | respect to such transaction under Section |
14 | | 203(a)(2)(D-18), 203(b)(2)(E-13), 203(c)(2)(G-13), or |
15 | | 203(d)(2)(D-8), but not to exceed the amount of such |
16 | | addition modification. This subparagraph (Q) is exempt |
17 | | from Section 250;
|
18 | | (R) An amount equal to the interest income taken |
19 | | into account for the taxable year (net of the |
20 | | deductions allocable thereto) with respect to |
21 | | transactions with (i) a foreign person who would be a |
22 | | member of the taxpayer's unitary business group but for |
23 | | the fact that the foreign person's business activity |
24 | | outside the United States is 80% or more of that |
25 | | person's total business activity and (ii) for taxable |
26 | | years ending on or after December 31, 2008, to a person |
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1 | | who would be a member of the same unitary business |
2 | | group but for the fact that the person is prohibited |
3 | | under Section 1501(a)(27) from being included in the |
4 | | unitary business group because he or she is ordinarily |
5 | | required to apportion business income under different |
6 | | subsections of Section 304, but not to exceed the |
7 | | addition modification required to be made for the same |
8 | | taxable year under Section 203(d)(2)(D-7) for interest |
9 | | paid, accrued, or incurred, directly or indirectly, to |
10 | | the same person. This subparagraph (R) is exempt from |
11 | | Section 250; |
12 | | (S) An amount equal to the income from intangible |
13 | | property taken into account for the taxable year (net |
14 | | of the deductions allocable thereto) with respect to |
15 | | transactions with (i) a foreign person who would be a |
16 | | member of the taxpayer's unitary business group but for |
17 | | the fact that the foreign person's business activity |
18 | | outside the United States is 80% or more of that |
19 | | person's total business activity and (ii) for taxable |
20 | | years ending on or after December 31, 2008, to a person |
21 | | who would be a member of the same unitary business |
22 | | group but for the fact that the person is prohibited |
23 | | under Section 1501(a)(27) from being included in the |
24 | | unitary business group because he or she is ordinarily |
25 | | required to apportion business income under different |
26 | | subsections of Section 304, but not to exceed the |
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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 person. |
5 | | This subparagraph (S) is exempt from Section 250; and
|
6 | | (T) For taxable years ending on or after December |
7 | | 31, 2011, in the case of a taxpayer who was required to |
8 | | add back any insurance premiums under Section |
9 | | 203(d)(2)(D-9), such taxpayer may elect to subtract |
10 | | that part of a reimbursement received from the |
11 | | insurance company equal to the amount of the expense or |
12 | | loss (including expenses incurred by the insurance |
13 | | company) that would have been taken into account as a |
14 | | deduction for federal income tax purposes if the |
15 | | expense or loss had been uninsured. If a taxpayer makes |
16 | | the election provided for by this subparagraph (T), the |
17 | | insurer to which the premiums were paid must add back |
18 | | to income the amount subtracted by the taxpayer |
19 | | pursuant to this subparagraph (T). This subparagraph |
20 | | (T) is exempt from the provisions of Section 250. |
21 | | (e) Gross income; adjusted gross income; taxable income. |
22 | | (1) In general. Subject to the provisions of paragraph |
23 | | (2) and
subsection (b) (3), for purposes of this Section |
24 | | and Section 803(e), a
taxpayer's gross income, adjusted |
25 | | gross income, or taxable income for
the taxable year shall |
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1 | | mean the amount of gross income, adjusted gross
income or |
2 | | taxable income properly reportable for federal income tax
|
3 | | purposes for the taxable year under the provisions of the |
4 | | Internal
Revenue Code. Taxable income may be less than |
5 | | zero. However, for taxable
years ending on or after |
6 | | December 31, 1986, net operating loss
carryforwards from |
7 | | taxable years ending prior to December 31, 1986, may not
|
8 | | exceed the sum of federal taxable income for the taxable |
9 | | year before net
operating loss deduction, plus the excess |
10 | | of addition modifications over
subtraction modifications |
11 | | for the taxable year. For taxable years ending
prior to |
12 | | December 31, 1986, taxable income may never be an amount in |
13 | | excess
of the net operating loss for the taxable year as |
14 | | defined in subsections
(c) and (d) of Section 172 of the |
15 | | Internal Revenue Code, provided that when
taxable income of |
16 | | a corporation (other than a Subchapter S corporation),
|
17 | | trust, or estate is less than zero and addition |
18 | | modifications, other than
those provided by subparagraph |
19 | | (E) of paragraph (2) of subsection (b) for
corporations or |
20 | | subparagraph (E) of paragraph (2) of subsection (c) for
|
21 | | trusts and estates, exceed subtraction modifications, an |
22 | | addition
modification must be made under those |
23 | | subparagraphs for any other taxable
year to which the |
24 | | taxable income less than zero (net operating loss) is
|
25 | | applied under Section 172 of the Internal Revenue Code or |
26 | | under
subparagraph (E) of paragraph (2) of this subsection |
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1 | | (e) applied in
conjunction with Section 172 of the Internal |
2 | | Revenue Code. |
3 | | (2) Special rule. For purposes of paragraph (1) of this |
4 | | subsection,
the taxable income properly reportable for |
5 | | federal income tax purposes
shall mean: |
6 | | (A) Certain life insurance companies. In the case |
7 | | of a life
insurance company subject to the tax imposed |
8 | | by Section 801 of the
Internal Revenue Code, life |
9 | | insurance company taxable income, plus the
amount of |
10 | | distribution from pre-1984 policyholder surplus |
11 | | accounts as
calculated under Section 815a of the |
12 | | Internal Revenue Code; |
13 | | (B) Certain other insurance companies. In the case |
14 | | of mutual
insurance companies subject to the tax |
15 | | imposed by Section 831 of the
Internal Revenue Code, |
16 | | insurance company taxable income; |
17 | | (C) Regulated investment companies. In the case of |
18 | | a regulated
investment company subject to the tax |
19 | | imposed by Section 852 of the
Internal Revenue Code, |
20 | | investment company taxable income; |
21 | | (D) Real estate investment trusts. In the case of a |
22 | | real estate
investment trust subject to the tax imposed |
23 | | by Section 857 of the
Internal Revenue Code, real |
24 | | estate investment trust taxable income; |
25 | | (E) Consolidated corporations. In the case of a |
26 | | corporation which
is a member of an affiliated group of |
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1 | | corporations filing a consolidated
income tax return |
2 | | for the taxable year for federal income tax purposes,
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3 | | taxable income determined as if such corporation had |
4 | | filed a separate
return for federal income tax purposes |
5 | | for the taxable year and each
preceding taxable year |
6 | | for which it was a member of an affiliated group.
For |
7 | | purposes of this subparagraph, the taxpayer's separate |
8 | | taxable
income shall be determined as if the election |
9 | | provided by Section
243(b) (2) of the Internal Revenue |
10 | | Code had been in effect for all such years; |
11 | | (F) Cooperatives. In the case of a cooperative |
12 | | corporation or
association, the taxable income of such |
13 | | organization determined in
accordance with the |
14 | | provisions of Section 1381 through 1388 of the
Internal |
15 | | Revenue Code, but without regard to the prohibition |
16 | | against offsetting losses from patronage activities |
17 | | against income from nonpatronage activities; except |
18 | | that a cooperative corporation or association may make |
19 | | an election to follow its federal income tax treatment |
20 | | of patronage losses and nonpatronage losses. In the |
21 | | event such election is made, such losses shall be |
22 | | computed and carried over in a manner consistent with |
23 | | subsection (a) of Section 207 of this Act and |
24 | | apportioned by the apportionment factor reported by |
25 | | the cooperative on its Illinois income tax return filed |
26 | | for the taxable year in which the losses are incurred. |
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1 | | The election shall be effective for all taxable years |
2 | | with original returns due on or after the date of the |
3 | | election. In addition, the cooperative may file an |
4 | | amended return or returns, as allowed under this Act, |
5 | | to provide that the election shall be effective for |
6 | | losses incurred or carried forward for taxable years |
7 | | occurring prior to the date of the election. Once made, |
8 | | the election may only be revoked upon approval of the |
9 | | Director. The Department shall adopt rules setting |
10 | | forth requirements for documenting the elections and |
11 | | any resulting Illinois net loss and the standards to be |
12 | | used by the Director in evaluating requests to revoke |
13 | | elections. Public Act 96-932 is declaratory of |
14 | | existing law; |
15 | | (G) Subchapter S corporations. In the case of: (i) |
16 | | a Subchapter S
corporation for which there is in effect |
17 | | an election for the taxable year
under Section 1362 of |
18 | | the Internal Revenue Code, the taxable income of such
|
19 | | corporation determined in accordance with Section |
20 | | 1363(b) of the Internal
Revenue Code, except that |
21 | | taxable income shall take into
account those items |
22 | | which are required by Section 1363(b)(1) of the
|
23 | | Internal Revenue Code to be separately stated; and (ii) |
24 | | a Subchapter
S corporation for which there is in effect |
25 | | a federal election to opt out of
the provisions of the |
26 | | Subchapter S Revision Act of 1982 and have applied
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1 | | instead the prior federal Subchapter S rules as in |
2 | | effect on July 1, 1982,
the taxable income of such |
3 | | corporation determined in accordance with the
federal |
4 | | Subchapter S rules as in effect on July 1, 1982; and |
5 | | (H) Partnerships. In the case of a partnership, |
6 | | taxable income
determined in accordance with Section |
7 | | 703 of the Internal Revenue Code,
except that taxable |
8 | | income shall take into account those items which are
|
9 | | required by Section 703(a)(1) to be separately stated |
10 | | but which would be
taken into account by an individual |
11 | | in calculating his taxable income. |
12 | | (3) Recapture of business expenses on disposition of |
13 | | asset or business. Notwithstanding any other law to the |
14 | | contrary, if in prior years income from an asset or |
15 | | business has been classified as business income and in a |
16 | | later year is demonstrated to be non-business income, then |
17 | | all expenses, without limitation, deducted in such later |
18 | | year and in the 2 immediately preceding taxable years |
19 | | related to that asset or business that generated the |
20 | | non-business income shall be added back and recaptured as |
21 | | business income in the year of the disposition of the asset |
22 | | or business. Such amount shall be apportioned to Illinois |
23 | | using the greater of the apportionment fraction computed |
24 | | for the business under Section 304 of this Act for the |
25 | | taxable year or the average of the apportionment fractions |
26 | | computed for the business under Section 304 of this Act for |
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1 | | the taxable year and for the 2 immediately preceding |
2 | | taxable years.
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3 | | (f) Valuation limitation amount. |
4 | | (1) In general. The valuation limitation amount |
5 | | referred to in
subsections (a) (2) (G), (c) (2) (I) and |
6 | | (d)(2) (E) is an amount equal to: |
7 | | (A) The sum of the pre-August 1, 1969 appreciation |
8 | | amounts (to the
extent consisting of gain reportable |
9 | | under the provisions of Section
1245 or 1250 of the |
10 | | Internal Revenue Code) for all property in respect
of |
11 | | which such gain was reported for the taxable year; plus |
12 | | (B) The lesser of (i) the sum of the pre-August 1, |
13 | | 1969 appreciation
amounts (to the extent consisting of |
14 | | capital gain) for all property in
respect of which such |
15 | | gain was reported for federal income tax purposes
for |
16 | | the taxable year, or (ii) the net capital gain for the |
17 | | taxable year,
reduced in either case by any amount of |
18 | | such gain included in the amount
determined under |
19 | | subsection (a) (2) (F) or (c) (2) (H). |
20 | | (2) Pre-August 1, 1969 appreciation amount. |
21 | | (A) If the fair market value of property referred |
22 | | to in paragraph
(1) was readily ascertainable on August |
23 | | 1, 1969, the pre-August 1, 1969
appreciation amount for |
24 | | such property is the lesser of (i) the excess of
such |
25 | | fair market value over the taxpayer's basis (for |
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1 | | determining gain)
for such property on that date |
2 | | (determined under the Internal Revenue
Code as in |
3 | | effect on that date), or (ii) the total gain realized |
4 | | and
reportable for federal income tax purposes in |
5 | | respect of the sale,
exchange or other disposition of |
6 | | such property. |
7 | | (B) If the fair market value of property referred |
8 | | to in paragraph
(1) was not readily ascertainable on |
9 | | August 1, 1969, the pre-August 1,
1969 appreciation |
10 | | amount for such property is that amount which bears
the |
11 | | same ratio to the total gain reported in respect of the |
12 | | property for
federal income tax purposes for the |
13 | | taxable year, as the number of full
calendar months in |
14 | | that part of the taxpayer's holding period for the
|
15 | | property ending July 31, 1969 bears to the number of |
16 | | full calendar
months in the taxpayer's entire holding |
17 | | period for the
property. |
18 | | (C) The Department shall prescribe such |
19 | | regulations as may be
necessary to carry out the |
20 | | purposes of this paragraph. |
21 | | (g) Double deductions. Unless specifically provided |
22 | | otherwise, nothing
in this Section shall permit the same item |
23 | | to be deducted more than once. |
24 | | (h) Legislative intention. Except as expressly provided by |
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1 | | this
Section there shall be no modifications or limitations on |
2 | | the amounts
of income, gain, loss or deduction taken into |
3 | | account in determining
gross income, adjusted gross income or |
4 | | taxable income for federal income
tax purposes for the taxable |
5 | | year, or in the amount of such items
entering into the |
6 | | computation of base income and net income under this
Act for |
7 | | such taxable year, whether in respect of property values as of
|
8 | | August 1, 1969 or otherwise. |
9 | | (Source: P.A. 100-22, eff. 7-6-17.)
|
10 | | Section 99. Effective date. This Act takes effect upon |
11 | | becoming law.
|