102ND GENERAL ASSEMBLY
State of Illinois
2021 and 2022
HB4705

 

Introduced 1/27/2022, by Rep. Jim Durkin

 

SYNOPSIS AS INTRODUCED:
 
35 ILCS 5/203  from Ch. 120, par. 2-203
35 ILCS 5/207  from Ch. 120, par. 2-207
35 ILCS 405/2  from Ch. 120, par. 405A-2
35 ILCS 405/3  from Ch. 120, par. 405A-3
35 ILCS 405/4  from Ch. 120, par. 405A-4
805 ILCS 5/15.35  from Ch. 32, par. 15.35
805 ILCS 5/15.65  from Ch. 32, par. 15.65

    Amends the Illinois Income Tax Act. Makes changes concerning the federal depreciation deduction and net operating losses to restore provisions that were in effect prior to Public Act 102-16. Amends the Illinois Estate and Generation-Skipping Transfer Tax Act. Provides that no tax shall be imposed under the Act for persons dying on or after the effective date of the amendatory Act or for transfers made on or after the effective date of the amendatory Act. Amends the Business Corporation Act of 1983. Provides that provisions imposing a franchise tax on corporations are repealed on December 31, 2024. Provides that, on or after January 1, 2022 and prior to January 1, 2023, the first $10,000 in liability is exempt from the franchise tax. Provides that, on or after January 1, 2023 and prior to January 1, 2024, the first $100,000 in liability is exempt from the franchise tax. Effective immediately.


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A BILL FOR

 

HB4705LRB102 23056 HLH 32212 b

1    AN ACT concerning revenue.
 
2    Be it enacted by the People of the State of Illinois,
3represented in the General Assembly:
 
4    Section 5. The Illinois Income Tax Act is amended by
5changing Sections 203 and 207 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
15    the 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
10        1, 1991, the retrospective application date of Article
11        4 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
24        on the account in the taxable year of a withdrawal
25        pursuant to subsection (b) of Section 20 of the
26        Medical Care Savings Account Act or subsection (b) of

 

 

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1        Section 20 of the Medical Care Savings Account Act of
2        2000;
3            (D-10) For taxable years ending after December 31,
4        1997, an amount equal to any eligible remediation
5        costs that the individual deducted in computing
6        adjusted gross income and for which the individual
7        claims a credit under subsection (l) of Section 201;
8            (D-15) For taxable years 2001 and thereafter, an
9        amount equal to the bonus depreciation deduction taken
10        on the taxpayer's federal income tax return for the
11        taxable year under subsection (k) of Section 168 of
12        the Internal Revenue Code;
13            (D-16) If the taxpayer sells, transfers, abandons,
14        or otherwise disposes of property for which the
15        taxpayer was required in any taxable year to make an
16        addition modification under subparagraph (D-15), then
17        an amount equal to the aggregate amount of the
18        deductions taken in all taxable years under
19        subparagraph (Z) with respect to that property.
20            If the taxpayer continues to own property through
21        the last day of the last tax year for which the
22        taxpayer may claim a depreciation deduction for
23        federal income tax purposes a subtraction is allowed
24        with respect to that property under subparagraph (Z)
25        and for which the taxpayer was allowed in any taxable
26        year to make a subtraction modification under

 

 

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1        subparagraph (Z), then an amount equal to that
2        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            (D-17) 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 that 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 under Sections 951 through
2        964 of the Internal Revenue Code and amounts included
3        in gross income under Section 78 of the Internal
4        Revenue Code) with respect to the stock of the same
5        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
6            or agreement entered into at arm's-length rates
7            and terms and the principal purpose for the
8            payment is not federal or Illinois tax avoidance;
9            or
10                (iv) an item of interest paid, accrued, or
11            incurred, directly or indirectly, to a person if
12            the taxpayer establishes by clear and convincing
13            evidence that the adjustments are unreasonable; or
14            if the taxpayer and the Director agree in writing
15            to the application or use of an alternative method
16            of apportionment under Section 304(f).
17                Nothing in this subsection shall preclude the
18            Director from making any other adjustment
19            otherwise allowed under Section 404 of this Act
20            for any tax year beginning after the effective
21            date of this amendment provided such adjustment is
22            made pursuant to regulation adopted by the
23            Department and such regulations provide methods
24            and standards by which the Department will utilize
25            its authority under Section 404 of this Act;
26            (D-18) An amount equal to the amount of intangible

 

 

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1        expenses and costs otherwise allowed as a deduction in
2        computing base income, and that were paid, accrued, or
3        incurred, directly or indirectly, (i) for taxable
4        years ending on or after December 31, 2004, to a
5        foreign person who would be a member of the same
6        unitary business group but for the fact that the
7        foreign person's business activity outside the United
8        States is 80% or more of that person's total business
9        activity and (ii) for taxable years ending on or after
10        December 31, 2008, to a person who would be a member of
11        the same unitary business group but for the fact that
12        the person is prohibited under Section 1501(a)(27)
13        from being included in the unitary business group
14        because he or she is ordinarily required to apportion
15        business income under different subsections of Section
16        304. The addition modification required by this
17        subparagraph shall be reduced to the extent that
18        dividends were included in base income of the unitary
19        group for the same taxable year and received by the
20        taxpayer or by a member of the taxpayer's unitary
21        business group (including amounts included in gross
22        income under Sections 951 through 964 of the Internal
23        Revenue Code and amounts included in gross income
24        under Section 78 of the Internal Revenue Code) with
25        respect to the stock of the same person to whom the
26        intangible expenses and costs were directly or

 

 

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1        indirectly paid, incurred, or accrued. The preceding
2        sentence does not apply to the extent that the same
3        dividends caused a reduction to the addition
4        modification required under Section 203(a)(2)(D-17) of
5        this Act. As used in this subparagraph, the term
6        "intangible expenses and costs" includes (1) expenses,
7        losses, and costs for, or related to, the direct or
8        indirect acquisition, use, maintenance or management,
9        ownership, sale, exchange, or any other disposition of
10        intangible property; (2) losses incurred, directly or
11        indirectly, from factoring transactions or discounting
12        transactions; (3) royalty, patent, technical, and
13        copyright fees; (4) licensing fees; and (5) other
14        similar expenses and costs. For purposes of this
15        subparagraph, "intangible property" includes patents,
16        patent applications, trade names, trademarks, service
17        marks, copyrights, mask works, trade secrets, and
18        similar types of intangible assets.
19            This paragraph shall not apply to the following:
20                (i) any item of intangible expenses or costs
21            paid, accrued, or incurred, directly or
22            indirectly, from a transaction with a person who
23            is subject in a foreign country or state, other
24            than a state which requires mandatory unitary
25            reporting, to a tax on or measured by net income
26            with respect to such item; or

 

 

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1                (ii) any item of intangible expense or cost
2            paid, accrued, or incurred, directly or
3            indirectly, if the taxpayer can establish, based
4            on a preponderance of the evidence, both of the
5            following:
6                    (a) the person during the same taxable
7                year paid, accrued, or incurred, the
8                intangible expense or cost to a person that is
9                not a related member, and
10                    (b) the transaction giving rise to the
11                intangible expense or cost between the
12                taxpayer and the person did not have as a
13                principal purpose the avoidance of Illinois
14                income tax, and is paid pursuant to a contract
15                or agreement that reflects arm's-length terms;
16                or
17                (iii) any item of intangible expense or cost
18            paid, accrued, or incurred, directly or
19            indirectly, from a transaction with a person if
20            the taxpayer establishes by clear and convincing
21            evidence, that the adjustments are unreasonable;
22            or if the taxpayer and the Director agree in
23            writing to the application or use of an
24            alternative method of apportionment under Section
25            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
3            for any tax year beginning after the effective
4            date of this amendment provided such adjustment is
5            made pursuant to regulation adopted by the
6            Department and such regulations provide methods
7            and standards by which the Department will utilize
8            its authority under Section 404 of this Act;
9            (D-19) 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
3        stock of the same person to whom the premiums and costs
4        were directly or indirectly paid, incurred, or
5        accrued. The preceding sentence does not apply to the
6        extent that the same dividends caused a reduction to
7        the addition modification required under Section
8        203(a)(2)(D-17) or Section 203(a)(2)(D-18) of this
9        Act;
10            (D-20) For taxable years beginning on or after
11        January 1, 2002 and ending on or before December 31,
12        2006, in the case of a distribution from a qualified
13        tuition program under Section 529 of the Internal
14        Revenue Code, other than (i) a distribution from a
15        College Savings Pool created under Section 16.5 of the
16        State Treasurer Act or (ii) a distribution from the
17        Illinois Prepaid Tuition Trust Fund, an amount equal
18        to the amount excluded from gross income under Section
19        529(c)(3)(B). For taxable years beginning on or after
20        January 1, 2007, in the case of a distribution from a
21        qualified tuition program under Section 529 of the
22        Internal Revenue Code, other than (i) a distribution
23        from a College Savings Pool created under Section 16.5
24        of the State Treasurer Act, (ii) a distribution from
25        the Illinois Prepaid Tuition Trust Fund, or (iii) a
26        distribution from a qualified tuition program under

 

 

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1        Section 529 of the Internal Revenue Code that (I)
2        adopts and determines that its offering materials
3        comply with the College Savings Plans Network's
4        disclosure principles and (II) has made reasonable
5        efforts to inform in-state residents of the existence
6        of in-state qualified tuition programs by informing
7        Illinois residents directly and, where applicable, to
8        inform financial intermediaries distributing the
9        program to inform in-state residents of the existence
10        of in-state qualified tuition programs at least
11        annually, an amount equal to the amount excluded from
12        gross income under Section 529(c)(3)(B).
13            For the purposes of this subparagraph (D-20), a
14        qualified tuition program has made reasonable efforts
15        if it makes disclosures (which may use the term
16        "in-state program" or "in-state plan" and need not
17        specifically refer to Illinois or its qualified
18        programs by name) (i) directly to prospective
19        participants in its offering materials or makes a
20        public disclosure, such as a website posting; and (ii)
21        where applicable, to intermediaries selling the
22        out-of-state program in the same manner that the
23        out-of-state program distributes its offering
24        materials;
25            (D-20.5) For taxable years beginning on or after
26        January 1, 2018, in the case of a distribution from a

 

 

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1        qualified ABLE program under Section 529A of the
2        Internal Revenue Code, other than a distribution from
3        a qualified ABLE program created under Section 16.6 of
4        the State Treasurer Act, an amount equal to the amount
5        excluded from gross income under Section 529A(c)(1)(B)
6        of the Internal Revenue Code;
7            (D-21) For taxable years beginning on or after
8        January 1, 2007, in the case of transfer of moneys from
9        a qualified tuition program under Section 529 of the
10        Internal Revenue Code that is administered by the
11        State to an out-of-state program, an amount equal to
12        the amount of moneys previously deducted from base
13        income under subsection (a)(2)(Y) of this Section;
14            (D-21.5) For taxable years beginning on or after
15        January 1, 2018, in the case of the transfer of moneys
16        from a qualified tuition program under Section 529 or
17        a qualified ABLE program under Section 529A of the
18        Internal Revenue Code that is administered by this
19        State to an ABLE account established under an
20        out-of-state ABLE account program, an amount equal to
21        the contribution component of the transferred amount
22        that was previously deducted from base income under
23        subsection (a)(2)(Y) or subsection (a)(2)(HH) of this
24        Section;
25            (D-22) For taxable years beginning on or after
26        January 1, 2009, and prior to January 1, 2018, in the

 

 

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1        case of a nonqualified withdrawal or refund of moneys
2        from a qualified tuition program under Section 529 of
3        the Internal Revenue Code administered by the State
4        that is not used for qualified expenses at an eligible
5        education institution, an amount equal to the
6        contribution component of the nonqualified withdrawal
7        or refund that was previously deducted from base
8        income under subsection (a)(2)(y) of this Section,
9        provided that the withdrawal or refund did not result
10        from the beneficiary's death or disability. For
11        taxable years beginning on or after January 1, 2018:
12        (1) in the case of a nonqualified withdrawal or
13        refund, as defined under Section 16.5 of the State
14        Treasurer Act, of moneys from a qualified tuition
15        program under Section 529 of the Internal Revenue Code
16        administered by the State, an amount equal to the
17        contribution component of the nonqualified withdrawal
18        or refund that was previously deducted from base
19        income under subsection (a)(2)(Y) of this Section, and
20        (2) in the case of a nonqualified withdrawal or refund
21        from a qualified ABLE program under Section 529A of
22        the Internal Revenue Code administered by the State
23        that is not used for qualified disability expenses, an
24        amount equal to the contribution component of the
25        nonqualified withdrawal or refund that was previously
26        deducted from base income under subsection (a)(2)(HH)

 

 

HB4705- 15 -LRB102 23056 HLH 32212 b

1        of this Section;
2            (D-23) An amount equal to the credit allowable to
3        the taxpayer under Section 218(a) of this Act,
4        determined without regard to Section 218(c) of this
5        Act;
6            (D-24) For taxable years ending on or after
7        December 31, 2017, an amount equal to the deduction
8        allowed under Section 199 of the Internal Revenue Code
9        for the taxable year;
10            (D-25) In the case of a resident, an amount equal
11        to the amount of tax for which a credit is allowed
12        pursuant to Section 201(p)(7) of this Act;
13    and by deducting from the total so obtained the sum of the
14    following amounts:
15            (E) For taxable years ending before December 31,
16        2001, any amount included in such total in respect of
17        any compensation (including but not limited to any
18        compensation paid or accrued to a serviceman while a
19        prisoner of war or missing in action) paid to a
20        resident by reason of being on active duty in the Armed
21        Forces of the United States and in respect of any
22        compensation paid or accrued to a resident who as a
23        governmental employee was a prisoner of war or missing
24        in action, and in respect of any compensation paid to a
25        resident in 1971 or thereafter for annual training
26        performed pursuant to Sections 502 and 503, Title 32,

 

 

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1        United States Code as a member of the Illinois
2        National Guard or, beginning with taxable years ending
3        on or after December 31, 2007, the National Guard of
4        any other state. For taxable years ending on or after
5        December 31, 2001, any amount included in such total
6        in respect of any compensation (including but not
7        limited to any compensation paid or accrued to a
8        serviceman while a prisoner of war or missing in
9        action) paid to a resident by reason of being a member
10        of any component of the Armed Forces of the United
11        States and in respect of any compensation paid or
12        accrued to a resident who as a governmental employee
13        was a prisoner of war or missing in action, and in
14        respect of any compensation paid to a resident in 2001
15        or thereafter by reason of being a member of the
16        Illinois National Guard or, beginning with taxable
17        years ending on or after December 31, 2007, the
18        National Guard of any other state. The provisions of
19        this subparagraph (E) are exempt from the provisions
20        of Section 250;
21            (F) An amount equal to all amounts included in
22        such total pursuant to the provisions of Sections
23        402(a), 402(c), 403(a), 403(b), 406(a), 407(a), and
24        408 of the Internal Revenue Code, or included in such
25        total as distributions under the provisions of any
26        retirement or disability plan for employees of any

 

 

HB4705- 17 -LRB102 23056 HLH 32212 b

1        governmental agency or unit, or retirement payments to
2        retired partners, which payments are excluded in
3        computing net earnings from self employment by Section
4        1402 of the Internal Revenue Code and regulations
5        adopted pursuant thereto;
6            (G) The valuation limitation amount;
7            (H) An amount equal to the amount of any tax
8        imposed by this Act which was refunded to the taxpayer
9        and included in such total for the taxable year;
10            (I) An amount equal to all amounts included in
11        such total pursuant to the provisions of Section 111
12        of the Internal Revenue Code as a recovery of items
13        previously deducted from adjusted gross income in the
14        computation of taxable income;
15            (J) 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
20        substantially all of its operations in a River Edge
21        Redevelopment Zone or zones. This subparagraph (J) is
22        exempt from the provisions of Section 250;
23            (K) 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

 

 

HB4705- 18 -LRB102 23056 HLH 32212 b

1        a High Impact Business located in Illinois; provided
2        that dividends eligible for the deduction provided in
3        subparagraph (J) of paragraph (2) of this subsection
4        shall not be eligible for the deduction provided under
5        this subparagraph (K);
6            (L) For taxable years ending after December 31,
7        1983, an amount equal to all social security benefits
8        and railroad retirement benefits included in such
9        total pursuant to Sections 72(r) and 86 of the
10        Internal Revenue Code;
11            (M) With the exception of any amounts subtracted
12        under subparagraph (N), an amount equal to the sum of
13        all amounts disallowed as deductions by (i) Sections
14        171(a)(2) and 265(a)(2) of the Internal Revenue Code,
15        and all amounts of expenses allocable to interest and
16        disallowed as deductions by Section 265(a)(1) of the
17        Internal Revenue Code; and (ii) for taxable years
18        ending on or after August 13, 1999, Sections
19        171(a)(2), 265, 280C, and 832(b)(5)(B)(i) of the
20        Internal Revenue Code, plus, for taxable years ending
21        on or after December 31, 2011, Section 45G(e)(3) of
22        the Internal Revenue Code and, for taxable years
23        ending on or after December 31, 2008, any amount
24        included in gross income under Section 87 of the
25        Internal Revenue Code; the provisions of this
26        subparagraph are exempt from the provisions of Section

 

 

HB4705- 19 -LRB102 23056 HLH 32212 b

1        250;
2            (N) An amount equal to all amounts included in
3        such total which are exempt from taxation by this
4        State either by reason of its statutes or Constitution
5        or by reason of the Constitution, treaties or statutes
6        of the United States; provided that, in the case of any
7        statute of this State that exempts income derived from
8        bonds or other obligations from the tax imposed under
9        this Act, the amount exempted shall be the interest
10        net of bond premium amortization;
11            (O) An amount equal to any contribution made to a
12        job training project established pursuant to the Tax
13        Increment Allocation Redevelopment Act;
14            (P) An amount equal to the amount of the deduction
15        used to compute the federal income tax credit for
16        restoration of substantial amounts held under claim of
17        right for the taxable year pursuant to Section 1341 of
18        the Internal Revenue Code or of any itemized deduction
19        taken from adjusted gross income in the computation of
20        taxable income for restoration of substantial amounts
21        held under claim of right for the taxable year;
22            (Q) An amount equal to any amounts included in
23        such total, received by the taxpayer as an
24        acceleration in the payment of life, endowment or
25        annuity benefits in advance of the time they would
26        otherwise be payable as an indemnity for a terminal

 

 

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1        illness;
2            (R) An amount equal to the amount of any federal or
3        State bonus paid to veterans of the Persian Gulf War;
4            (S) An amount, to the extent included in adjusted
5        gross income, equal to the amount of a contribution
6        made in the taxable year on behalf of the taxpayer to a
7        medical care savings account established under the
8        Medical Care Savings Account Act or the Medical Care
9        Savings Account Act of 2000 to the extent the
10        contribution is accepted by the account administrator
11        as provided in that Act;
12            (T) An amount, to the extent included in adjusted
13        gross income, equal to the amount of interest earned
14        in the taxable year on a medical care savings account
15        established under the Medical Care Savings Account Act
16        or the Medical Care Savings Account Act of 2000 on
17        behalf of the taxpayer, other than interest added
18        pursuant to item (D-5) of this paragraph (2);
19            (U) For one taxable year beginning on or after
20        January 1, 1994, an amount equal to the total amount of
21        tax imposed and paid under subsections (a) and (b) of
22        Section 201 of this Act on grant amounts received by
23        the taxpayer under the Nursing Home Grant Assistance
24        Act during the taxpayer's taxable years 1992 and 1993;
25            (V) Beginning with tax years ending on or after
26        December 31, 1995 and ending with tax years ending on

 

 

HB4705- 21 -LRB102 23056 HLH 32212 b

1        or before December 31, 2004, an amount equal to the
2        amount paid by a taxpayer who is a self-employed
3        taxpayer, a partner of a partnership, or a shareholder
4        in a Subchapter S corporation for health insurance or
5        long-term care insurance for that taxpayer or that
6        taxpayer's spouse or dependents, to the extent that
7        the amount paid for that health insurance or long-term
8        care insurance may be deducted under Section 213 of
9        the Internal Revenue Code, has not been deducted on
10        the federal income tax return of the taxpayer, and
11        does not exceed the taxable income attributable to
12        that taxpayer's income, self-employment income, or
13        Subchapter S corporation income; except that no
14        deduction shall be allowed under this item (V) if the
15        taxpayer is eligible to participate in any health
16        insurance or long-term care insurance plan of an
17        employer of the taxpayer or the taxpayer's spouse. The
18        amount of the health insurance and long-term care
19        insurance subtracted under this item (V) shall be
20        determined by multiplying total health insurance and
21        long-term care insurance premiums paid by the taxpayer
22        times a number that represents the fractional
23        percentage of eligible medical expenses under Section
24        213 of the Internal Revenue Code of 1986 not actually
25        deducted on the taxpayer's federal income tax return;
26            (W) For taxable years beginning on or after

 

 

HB4705- 22 -LRB102 23056 HLH 32212 b

1        January 1, 1998, all amounts included in the
2        taxpayer's federal gross income in the taxable year
3        from amounts converted from a regular IRA to a Roth
4        IRA. This paragraph is exempt from the provisions of
5        Section 250;
6            (X) For taxable year 1999 and thereafter, an
7        amount equal to the amount of any (i) distributions,
8        to the extent includible in gross income for federal
9        income tax purposes, made to the taxpayer because of
10        his or her status as a victim of persecution for racial
11        or religious reasons by Nazi Germany or any other Axis
12        regime or as an heir of the victim and (ii) items of
13        income, to the extent includible in gross income for
14        federal income tax purposes, attributable to, derived
15        from or in any way related to assets stolen from,
16        hidden from, or otherwise lost to a victim of
17        persecution for racial or religious reasons by Nazi
18        Germany or any other Axis regime immediately prior to,
19        during, and immediately after World War II, including,
20        but not limited to, interest on the proceeds
21        receivable as insurance under policies issued to a
22        victim of persecution for racial or religious reasons
23        by Nazi Germany or any other Axis regime by European
24        insurance companies immediately prior to and during
25        World War II; provided, however, this subtraction from
26        federal adjusted gross income does not apply to assets

 

 

HB4705- 23 -LRB102 23056 HLH 32212 b

1        acquired with such assets or with the proceeds from
2        the sale of such assets; provided, further, this
3        paragraph shall only apply to a taxpayer who was the
4        first recipient of such assets after their recovery
5        and who is a victim of persecution for racial or
6        religious reasons by Nazi Germany or any other Axis
7        regime or as an heir of the victim. The amount of and
8        the eligibility for any public assistance, benefit, or
9        similar entitlement is not affected by the inclusion
10        of items (i) and (ii) of this paragraph in gross income
11        for federal income tax purposes. This paragraph is
12        exempt from the provisions of Section 250;
13            (Y) For taxable years beginning on or after
14        January 1, 2002 and ending on or before December 31,
15        2004, moneys contributed in the taxable year to a
16        College Savings Pool account under Section 16.5 of the
17        State Treasurer Act, except that amounts excluded from
18        gross income under Section 529(c)(3)(C)(i) of the
19        Internal Revenue Code shall not be considered moneys
20        contributed under this subparagraph (Y). For taxable
21        years beginning on or after January 1, 2005, a maximum
22        of $10,000 contributed in the taxable year to (i) a
23        College Savings Pool account under Section 16.5 of the
24        State Treasurer Act or (ii) the Illinois Prepaid
25        Tuition Trust Fund, except that amounts excluded from
26        gross income under Section 529(c)(3)(C)(i) of the

 

 

HB4705- 24 -LRB102 23056 HLH 32212 b

1        Internal Revenue Code shall not be considered moneys
2        contributed under this subparagraph (Y). For purposes
3        of this subparagraph, contributions made by an
4        employer on behalf of an employee, or matching
5        contributions made by an employee, shall be treated as
6        made by the employee. This subparagraph (Y) is exempt
7        from the provisions of Section 250;
8            (Z) For taxable years 2001 and thereafter, for the
9        taxable year in which the bonus depreciation deduction
10        is taken on the taxpayer's federal income tax return
11        under subsection (k) of Section 168 of the Internal
12        Revenue Code and for each applicable taxable year
13        thereafter, an amount equal to "x", where:
14                (1) "y" equals the amount of the depreciation
15            deduction taken for the taxable year on the
16            taxpayer's federal income tax return on property
17            for which the bonus depreciation deduction was
18            taken in any year under subsection (k) of Section
19            168 of the Internal Revenue Code, but not
20            including the bonus depreciation deduction;
21                (2) for taxable years ending on or before
22            December 31, 2005, "x" equals "y" multiplied by 30
23            and then divided by 70 (or "y" multiplied by
24            0.429); and
25                (3) for taxable years ending after December
26            31, 2005:

 

 

HB4705- 25 -LRB102 23056 HLH 32212 b

1                    (i) for property on which a bonus
2                depreciation deduction of 30% of the adjusted
3                basis was taken, "x" equals "y" multiplied by
4                30 and then divided by 70 (or "y" multiplied
5                by 0.429); and
6                    (ii) for property on which a bonus
7                depreciation deduction of 50% of the adjusted
8                basis was taken, "x" equals "y" multiplied by
9                1.0;
10                    (iii) (blank); for property on which a
11                bonus depreciation deduction of 100% of the
12                adjusted basis was taken in a taxable year
13                ending on or after December 31, 2021, "x"
14                equals the depreciation deduction that would
15                be allowed on that property if the taxpayer
16                had made the election under Section 168(k)(7)
17                of the Internal Revenue Code to not claim
18                bonus deprecation on that property; and
19                    (iv) (blank). for property on which a
20                bonus depreciation deduction of a percentage
21                other than 30%, 50% or 100% of the adjusted
22                basis was taken in a taxable year ending on or
23                after December 31, 2021, "x" equals "y"
24                multiplied by 100 times the percentage bonus
25                depreciation on the property (that is,
26                100(bonus%)) and then divided by 100 times 1

 

 

HB4705- 26 -LRB102 23056 HLH 32212 b

1                minus the percentage bonus depreciation on the
2                property (that is, 100(1–bonus%)).
3            The aggregate amount deducted under this
4        subparagraph in all taxable years for any one piece of
5        property may not exceed the amount of the bonus
6        depreciation deduction taken on that property on the
7        taxpayer's federal income tax return under subsection
8        (k) of Section 168 of the Internal Revenue Code. This
9        subparagraph (Z) is exempt from the provisions of
10        Section 250;
11            (AA) If the taxpayer sells, transfers, abandons,
12        or otherwise disposes of property for which the
13        taxpayer was required in any taxable year to make an
14        addition modification under subparagraph (D-15), then
15        an amount equal to that addition modification.
16            If the taxpayer continues to own property through
17        the last day of the last tax year for which the
18        taxpayer may claim a depreciation deduction for
19        federal income tax purposes a subtraction is allowed
20        with respect to that property under subparagraph (Z)
21        and for which the taxpayer was required in any taxable
22        year to make an addition modification under
23        subparagraph (D-15), then an amount equal to that
24        addition modification.
25            The taxpayer is allowed to take the deduction
26        under this subparagraph only once with respect to any

 

 

HB4705- 27 -LRB102 23056 HLH 32212 b

1        one piece of property.
2            This subparagraph (AA) is exempt from the
3        provisions of Section 250;
4            (BB) Any amount included in adjusted gross income,
5        other than salary, received by a driver in a
6        ridesharing arrangement using a motor vehicle;
7            (CC) The amount of (i) any interest income (net of
8        the deductions allocable thereto) taken into account
9        for the taxable year with respect to a transaction
10        with a taxpayer that is required to make an addition
11        modification with respect to such transaction under
12        Section 203(a)(2)(D-17), 203(b)(2)(E-12),
13        203(c)(2)(G-12), or 203(d)(2)(D-7), but not to exceed
14        the amount of that addition modification, and (ii) any
15        income from intangible property (net of the deductions
16        allocable thereto) taken into account for the taxable
17        year with respect to a transaction with a taxpayer
18        that is required to make an addition modification with
19        respect to such transaction under Section
20        203(a)(2)(D-18), 203(b)(2)(E-13), 203(c)(2)(G-13), or
21        203(d)(2)(D-8), but not to exceed the amount of that
22        addition modification. This subparagraph (CC) is
23        exempt from the provisions of Section 250;
24            (DD) An amount equal to the interest income taken
25        into account for the taxable year (net of the
26        deductions allocable thereto) with respect to

 

 

HB4705- 28 -LRB102 23056 HLH 32212 b

1        transactions with (i) a foreign person who would be a
2        member of the taxpayer's unitary business group but
3        for the fact that the foreign person's business
4        activity outside the United States is 80% or more of
5        that person's total business activity and (ii) for
6        taxable years ending on or after December 31, 2008, to
7        a person who would be a member of the same unitary
8        business group but for the fact that the person is
9        prohibited under Section 1501(a)(27) from being
10        included in the unitary business group because he or
11        she is ordinarily required to apportion business
12        income under different subsections of Section 304, but
13        not to exceed the addition modification required to be
14        made for the same taxable year under Section
15        203(a)(2)(D-17) for interest paid, accrued, or
16        incurred, directly or indirectly, to the same person.
17        This subparagraph (DD) is exempt from the provisions
18        of Section 250;
19            (EE) 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
24        for the fact that the foreign person's business
25        activity outside the United States is 80% or more of
26        that person's total business activity and (ii) for

 

 

HB4705- 29 -LRB102 23056 HLH 32212 b

1        taxable years ending on or after December 31, 2008, to
2        a 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, but
8        not to exceed the addition modification required to be
9        made for the same taxable year under Section
10        203(a)(2)(D-18) for intangible expenses and costs
11        paid, accrued, or incurred, directly or indirectly, to
12        the same foreign person. This subparagraph (EE) is
13        exempt from the provisions of Section 250;
14            (FF) An amount equal to any amount awarded to the
15        taxpayer during the taxable year by the Court of
16        Claims under subsection (c) of Section 8 of the Court
17        of Claims Act for time unjustly served in a State
18        prison. This subparagraph (FF) is exempt from the
19        provisions of Section 250;
20            (GG) For taxable years ending on or after December
21        31, 2011, in the case of a taxpayer who was required to
22        add back any insurance premiums under Section
23        203(a)(2)(D-19), such taxpayer may elect to subtract
24        that part of a reimbursement received from the
25        insurance company equal to the amount of the expense
26        or loss (including expenses incurred by the insurance

 

 

HB4705- 30 -LRB102 23056 HLH 32212 b

1        company) that would have been taken into account as a
2        deduction for federal income tax purposes if the
3        expense or loss had been uninsured. If a taxpayer
4        makes the election provided for by this subparagraph
5        (GG), the insurer to which the premiums were paid must
6        add back to income the amount subtracted by the
7        taxpayer pursuant to this subparagraph (GG). This
8        subparagraph (GG) is exempt from the provisions of
9        Section 250; and
10            (HH) For taxable years beginning on or after
11        January 1, 2018 and prior to January 1, 2023, a maximum
12        of $10,000 contributed in the taxable year to a
13        qualified ABLE account under Section 16.6 of the State
14        Treasurer Act, except that amounts excluded from gross
15        income under Section 529(c)(3)(C)(i) or Section
16        529A(c)(1)(C) of the Internal Revenue Code shall not
17        be considered moneys contributed under this
18        subparagraph (HH). For purposes of this subparagraph
19        (HH), contributions made by an employer on behalf of
20        an employee, or matching contributions made by an
21        employee, shall be treated as made by the employee.
 
22    (b) Corporations.
23        (1) In general. In the case of a corporation, base
24    income means an amount equal to the taxpayer's taxable
25    income for the taxable year as modified by paragraph (2).

 

 

HB4705- 31 -LRB102 23056 HLH 32212 b

1        (2) Modifications. The taxable income referred to in
2    paragraph (1) shall be modified by adding thereto the sum
3    of the following amounts:
4            (A) An amount equal to all amounts paid or accrued
5        to the taxpayer as interest and all distributions
6        received from regulated investment companies during
7        the taxable year to the extent excluded from gross
8        income in the computation of taxable income;
9            (B) An amount equal to the amount of tax imposed by
10        this Act to the extent deducted from gross income in
11        the computation of taxable income for the taxable
12        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
16        amount of the capital gain dividends designated as
17        such in accordance with Section 852(b)(3)(C) of the
18        Internal Revenue Code and any amount designated under
19        Section 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;

 

 

HB4705- 32 -LRB102 23056 HLH 32212 b

1            (E) For taxable years in which a net operating
2        loss carryback or carryforward from a taxable year
3        ending prior to December 31, 1986 is an element of
4        taxable income under paragraph (1) of subsection (e)
5        or subparagraph (E) of paragraph (2) of subsection
6        (e), the amount by which addition modifications other
7        than 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
15            of addition modification under this subparagraph
16            (E) which related to that net operating loss and
17            which was taken into account in calculating the
18            base 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
25        operating loss carryback or carryforward from more
26        than one other taxable year ending prior to December

 

 

HB4705- 33 -LRB102 23056 HLH 32212 b

1        31, 1986, the addition modification provided in this
2        subparagraph (E) shall be the sum of the amounts
3        computed independently under the preceding provisions
4        of this 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
7        costs that the corporation deducted in computing
8        adjusted gross income and for which the corporation
9        claims a 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
14        the 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 which the
24        taxpayer may claim a depreciation deduction for
25        federal income tax purposes a subtraction is allowed
26        with respect to that property under subparagraph (T)

 

 

HB4705- 34 -LRB102 23056 HLH 32212 b

1        and for which the taxpayer was allowed in any taxable
2        year to make a subtraction modification under
3        subparagraph (T), then an amount equal to that
4        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            (E-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 the foreign person's business activity outside
15        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

 

 

HB4705- 35 -LRB102 23056 HLH 32212 b

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
7        the same person to whom the interest was paid,
8        accrued, or 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

 

 

HB4705- 36 -LRB102 23056 HLH 32212 b

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
8            or agreement entered into at arm's-length rates
9            and terms and the principal purpose for the
10            payment is not federal or Illinois tax avoidance;
11            or
12                (iv) an item of interest paid, accrued, or
13            incurred, directly or indirectly, to a person if
14            the taxpayer establishes by clear and convincing
15            evidence that the adjustments are unreasonable; or
16            if the taxpayer and the Director agree in writing
17            to the application or use of an alternative method
18            of apportionment under Section 304(f).
19                Nothing in this subsection shall preclude the
20            Director from making any other adjustment
21            otherwise allowed under Section 404 of this Act
22            for any tax year beginning after the effective
23            date of this amendment provided such adjustment is
24            made pursuant to regulation adopted by the
25            Department and such regulations provide methods
26            and standards by which the Department will utilize

 

 

HB4705- 37 -LRB102 23056 HLH 32212 b

1            its authority under Section 404 of this Act;
2            (E-13) An amount equal to the amount of intangible
3        expenses and costs otherwise allowed as a deduction in
4        computing base income, and that were paid, accrued, or
5        incurred, directly or indirectly, (i) for taxable
6        years ending on or after December 31, 2004, to a
7        foreign person who would be a member of the same
8        unitary business group but for the fact that the
9        foreign person's business activity outside the United
10        States is 80% or more of that person's total business
11        activity and (ii) for taxable years ending on or after
12        December 31, 2008, to a person who would be a member of
13        the same unitary business group but for the fact that
14        the person is prohibited under Section 1501(a)(27)
15        from being included in the unitary business group
16        because he or she is ordinarily required to apportion
17        business income under different subsections of Section
18        304. The addition modification required by this
19        subparagraph shall be reduced to the extent that
20        dividends were included in base income of the unitary
21        group for the same taxable year and received by the
22        taxpayer or by a member of the taxpayer's unitary
23        business group (including amounts included in gross
24        income pursuant to Sections 951 through 964 of the
25        Internal Revenue Code and amounts included in gross
26        income under Section 78 of the Internal Revenue Code)

 

 

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1        with respect to the stock of the same person to whom
2        the intangible expenses and costs were directly or
3        indirectly paid, incurred, or accrued. The preceding
4        sentence shall not apply to the extent that the same
5        dividends caused a reduction to the addition
6        modification required under Section 203(b)(2)(E-12) of
7        this Act. As used in this subparagraph, the term
8        "intangible expenses and costs" includes (1) expenses,
9        losses, and costs for, or related to, the direct or
10        indirect acquisition, use, maintenance or management,
11        ownership, sale, exchange, or any other disposition of
12        intangible property; (2) losses incurred, directly or
13        indirectly, from factoring transactions or discounting
14        transactions; (3) royalty, patent, technical, and
15        copyright fees; (4) licensing fees; and (5) other
16        similar expenses and costs. For purposes of this
17        subparagraph, "intangible property" includes patents,
18        patent applications, trade names, trademarks, service
19        marks, copyrights, mask works, trade secrets, and
20        similar types of intangible assets.
21            This paragraph shall not apply to the following:
22                (i) any item of intangible expenses or costs
23            paid, accrued, or incurred, directly or
24            indirectly, from a transaction with a person who
25            is subject in a foreign country or state, other
26            than a state which requires mandatory unitary

 

 

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1            reporting, to a tax on or measured by net income
2            with respect to such item; or
3                (ii) any item of intangible expense or cost
4            paid, accrued, or incurred, directly or
5            indirectly, if the taxpayer can establish, based
6            on a preponderance of the evidence, both of the
7            following:
8                    (a) the person during the same taxable
9                year paid, accrued, or incurred, the
10                intangible expense or cost to a person that is
11                not a related member, and
12                    (b) the transaction giving rise to the
13                intangible expense or cost between the
14                taxpayer and the person did not have as a
15                principal purpose the avoidance of Illinois
16                income tax, and is paid pursuant to a contract
17                or agreement that reflects arm's-length terms;
18                or
19                (iii) any item of intangible expense or cost
20            paid, accrued, or incurred, directly or
21            indirectly, from a transaction with a person if
22            the taxpayer establishes by clear and convincing
23            evidence, that the adjustments are unreasonable;
24            or if the taxpayer and the Director agree in
25            writing to the application or use of an
26            alternative method of apportionment under Section

 

 

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1            304(f);
2                Nothing in this subsection shall preclude the
3            Director from making any other adjustment
4            otherwise allowed under Section 404 of this Act
5            for any tax year beginning after the effective
6            date of this amendment provided such adjustment is
7            made pursuant to regulation adopted by the
8            Department and such regulations provide methods
9            and standards by which the Department will utilize
10            its authority under Section 404 of this Act;
11            (E-14) For taxable years ending on or after
12        December 31, 2008, an amount equal to the amount of
13        insurance premium expenses and costs otherwise allowed
14        as a deduction in computing base income, and that were
15        paid, accrued, or incurred, directly or indirectly, to
16        a person who would be a member of the same unitary
17        business group but for the fact that the person is
18        prohibited under Section 1501(a)(27) from being
19        included in the unitary business group because he or
20        she is ordinarily required to apportion business
21        income under different subsections of Section 304. The
22        addition modification required by this subparagraph
23        shall be reduced to the extent that dividends were
24        included in base income of the unitary group for the
25        same taxable year and received by the taxpayer or by a
26        member of the taxpayer's unitary business group

 

 

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1        (including amounts included in gross income under
2        Sections 951 through 964 of the Internal Revenue Code
3        and amounts included in gross income under Section 78
4        of the Internal Revenue Code) with respect to the
5        stock of the same person to whom the premiums and costs
6        were directly or indirectly paid, incurred, or
7        accrued. The preceding sentence does not apply to the
8        extent that the same dividends caused a reduction to
9        the addition modification required under Section
10        203(b)(2)(E-12) or Section 203(b)(2)(E-13) of this
11        Act;
12            (E-15) For taxable years beginning after December
13        31, 2008, any deduction for dividends paid by a
14        captive real estate investment trust that is allowed
15        to a real estate investment trust under Section
16        857(b)(2)(B) of the Internal Revenue Code for
17        dividends paid;
18            (E-16) An amount equal to the credit allowable to
19        the taxpayer under Section 218(a) of this Act,
20        determined without regard to Section 218(c) of this
21        Act;
22            (E-17) For taxable years ending on or after
23        December 31, 2017, an amount equal to the deduction
24        allowed under Section 199 of the Internal Revenue Code
25        for the taxable year;
26            (E-18) for taxable years beginning after December

 

 

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1        31, 2018, an amount equal to the deduction allowed
2        under Section 250(a)(1)(A) of the Internal Revenue
3        Code for the taxable year;
4            (E-19) for taxable years ending on or after June
5        30, 2021, an amount equal to the deduction allowed
6        under Section 250(a)(1)(B)(i) of the Internal Revenue
7        Code for the taxable year;
8            (E-20) for taxable years ending on or after June
9        30, 2021, an amount equal to the deduction allowed
10        under Sections 243(e) and 245A(a) of the Internal
11        Revenue Code for the taxable year.
12    and by deducting from the total so obtained the sum of the
13    following amounts:
14            (F) An amount equal to the amount of any tax
15        imposed by this Act which was refunded to the taxpayer
16        and included in such total for the taxable year;
17            (G) An amount equal to any amount included in such
18        total under Section 78 of the Internal Revenue Code;
19            (H) In the case of a regulated investment company,
20        an amount equal to the amount of exempt interest
21        dividends as defined in subsection (b)(5) of Section
22        852 of the Internal Revenue Code, paid to shareholders
23        for the taxable year;
24            (I) With the exception of any amounts subtracted
25        under subparagraph (J), an amount equal to the sum of
26        all amounts disallowed as deductions by (i) Sections

 

 

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1        171(a)(2) and 265(a)(2) and amounts disallowed as
2        interest expense by Section 291(a)(3) of the Internal
3        Revenue Code, and all amounts of expenses allocable to
4        interest and disallowed as deductions by Section
5        265(a)(1) of the Internal Revenue Code; and (ii) for
6        taxable years ending on or after August 13, 1999,
7        Sections 171(a)(2), 265, 280C, 291(a)(3), and
8        832(b)(5)(B)(i) of the Internal Revenue Code, plus,
9        for tax years ending on or after December 31, 2011,
10        amounts disallowed as deductions by Section 45G(e)(3)
11        of the Internal Revenue Code and, for taxable years
12        ending on or after December 31, 2008, any amount
13        included in gross income under Section 87 of the
14        Internal Revenue Code and the policyholders' share of
15        tax-exempt interest of a life insurance company under
16        Section 807(a)(2)(B) of the Internal Revenue Code (in
17        the case of a life insurance company with gross income
18        from a decrease in reserves for the tax year) or
19        Section 807(b)(1)(B) of the Internal Revenue Code (in
20        the case of a life insurance company allowed a
21        deduction for an increase in reserves for the tax
22        year); the provisions of this subparagraph are exempt
23        from the provisions of Section 250;
24            (J) An amount equal to all amounts included in
25        such total which are exempt from taxation by this
26        State either by reason of its statutes or Constitution

 

 

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1        or by reason of the Constitution, treaties or statutes
2        of the United States; provided that, in the case of any
3        statute of this State that exempts income derived from
4        bonds or other obligations from the tax imposed under
5        this Act, the amount exempted shall be the interest
6        net of bond premium amortization;
7            (K) An amount equal to those dividends included in
8        such total which were paid by a corporation which
9        conducts business operations in a River Edge
10        Redevelopment Zone or zones created under the River
11        Edge Redevelopment Zone Act and conducts substantially
12        all of its operations in a River Edge Redevelopment
13        Zone or zones. This subparagraph (K) is exempt from
14        the provisions of Section 250;
15            (L) An amount equal to those dividends included in
16        such total that were paid by a corporation that
17        conducts business operations in a federally designated
18        Foreign Trade Zone or Sub-Zone and that is designated
19        a High Impact Business located in Illinois; provided
20        that dividends eligible for the deduction provided in
21        subparagraph (K) of paragraph 2 of this subsection
22        shall not be eligible for the deduction provided under
23        this subparagraph (L);
24            (M) For any taxpayer that is a financial
25        organization within the meaning of Section 304(c) of
26        this Act, an amount included in such total as interest

 

 

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1        income from a loan or loans made by such taxpayer to a
2        borrower, to the extent that such a loan is secured by
3        property which is eligible for the River Edge
4        Redevelopment Zone Investment Credit. To determine the
5        portion of a loan or loans that is secured by property
6        eligible for a Section 201(f) investment credit to the
7        borrower, the entire principal amount of the loan or
8        loans between the taxpayer and the borrower should be
9        divided into the basis of the Section 201(f)
10        investment credit property which secures the loan or
11        loans, using for this purpose the original basis of
12        such property on the date that it was placed in service
13        in the River Edge Redevelopment Zone. The subtraction
14        modification available to the taxpayer in any year
15        under this subsection shall be that portion of the
16        total interest paid by the borrower with respect to
17        such loan attributable to the eligible property as
18        calculated under the previous sentence. This
19        subparagraph (M) is exempt from the provisions of
20        Section 250;
21            (M-1) For any taxpayer that is a financial
22        organization within the meaning of Section 304(c) of
23        this Act, an amount included in such total as interest
24        income from a loan or loans made by such taxpayer to a
25        borrower, to the extent that such a loan is secured by
26        property which is eligible for the High Impact

 

 

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1        Business Investment Credit. To determine the portion
2        of a loan or loans that is secured by property eligible
3        for a Section 201(h) investment credit to the
4        borrower, the entire principal amount of the loan or
5        loans between the taxpayer and the borrower should be
6        divided into the basis of the Section 201(h)
7        investment credit property which secures the loan or
8        loans, using for this purpose the original basis of
9        such property on the date that it was placed in service
10        in a federally designated Foreign Trade Zone or
11        Sub-Zone located in Illinois. No taxpayer that is
12        eligible for the deduction provided in subparagraph
13        (M) of paragraph (2) of this subsection shall be
14        eligible for the deduction provided under this
15        subparagraph (M-1). The subtraction modification
16        available to taxpayers in any year under this
17        subsection shall be that portion of the total interest
18        paid by the borrower with respect to such loan
19        attributable to the eligible property as calculated
20        under the previous sentence;
21            (N) Two times any contribution made during the
22        taxable year to a designated zone organization to the
23        extent that the contribution (i) qualifies as a
24        charitable contribution under subsection (c) of
25        Section 170 of the Internal Revenue Code and (ii)
26        must, by its terms, be used for a project approved by

 

 

HB4705- 47 -LRB102 23056 HLH 32212 b

1        the Department of Commerce and Economic Opportunity
2        under Section 11 of the Illinois Enterprise Zone Act
3        or under Section 10-10 of the River Edge Redevelopment
4        Zone Act. This subparagraph (N) is exempt from the
5        provisions of Section 250;
6            (O) An amount equal to: (i) 85% for taxable years
7        ending on or before December 31, 1992, or, a
8        percentage equal to the percentage allowable under
9        Section 243(a)(1) of the Internal Revenue Code of 1986
10        for taxable years ending after December 31, 1992, of
11        the amount by which dividends included in taxable
12        income and received from a corporation that is not
13        created or organized under the laws of the United
14        States or any state or political subdivision thereof,
15        including, for taxable years ending on or after
16        December 31, 1988, dividends received or deemed
17        received or paid or deemed paid under Sections 951
18        through 965 of the Internal Revenue Code, exceed the
19        amount of the modification provided under subparagraph
20        (G) of paragraph (2) of this subsection (b) which is
21        related to such dividends, and including, for taxable
22        years ending on or after December 31, 2008, dividends
23        received from a captive real estate investment trust;
24        plus (ii) 100% of the amount by which dividends,
25        included in taxable income and received, including,
26        for taxable years ending on or after December 31,

 

 

HB4705- 48 -LRB102 23056 HLH 32212 b

1        1988, dividends received or deemed received or paid or
2        deemed paid under Sections 951 through 964 of the
3        Internal Revenue Code and including, for taxable years
4        ending on or after December 31, 2008, dividends
5        received from a captive real estate investment trust,
6        from any such corporation specified in clause (i) that
7        would but for the provisions of Section 1504(b)(3) of
8        the Internal Revenue Code be treated as a member of the
9        affiliated group which includes the dividend
10        recipient, exceed the amount of the modification
11        provided under subparagraph (G) of paragraph (2) of
12        this subsection (b) which is related to such
13        dividends. For taxable years ending on or after June
14        30, 2021, (i) for purposes of this subparagraph, the
15        term "dividend" does not include any amount treated as
16        a dividend under Section 1248 of the Internal Revenue
17        Code, and (ii) this subparagraph shall not apply to
18        dividends for which a deduction is allowed under
19        Section 245(a) of the Internal Revenue Code. This
20        subparagraph (O) is exempt from the provisions of
21        Section 250 of this Act;
22            (P) An amount equal to any contribution made to a
23        job training project established pursuant to the Tax
24        Increment Allocation Redevelopment Act;
25            (Q) An amount equal to the amount of the deduction
26        used to compute the federal income tax credit for

 

 

HB4705- 49 -LRB102 23056 HLH 32212 b

1        restoration of substantial amounts held under claim of
2        right for the taxable year pursuant to Section 1341 of
3        the Internal Revenue Code;
4            (R) On and after July 20, 1999, in the case of an
5        attorney-in-fact with respect to whom an interinsurer
6        or a reciprocal insurer has made the election under
7        Section 835 of the Internal Revenue Code, 26 U.S.C.
8        835, an amount equal to the excess, if any, of the
9        amounts paid or incurred by that interinsurer or
10        reciprocal insurer in the taxable year to the
11        attorney-in-fact over the deduction allowed to that
12        interinsurer or reciprocal insurer with respect to the
13        attorney-in-fact under Section 835(b) of the Internal
14        Revenue Code for the taxable year; the provisions of
15        this subparagraph are exempt from the provisions of
16        Section 250;
17            (S) For taxable years ending on or after December
18        31, 1997, in the case of a Subchapter S corporation, an
19        amount equal to all amounts of income allocable to a
20        shareholder subject to the Personal Property Tax
21        Replacement Income Tax imposed by subsections (c) and
22        (d) of Section 201 of this Act, including amounts
23        allocable to organizations exempt from federal income
24        tax by reason of Section 501(a) of the Internal
25        Revenue Code. This subparagraph (S) is exempt from the
26        provisions of Section 250;

 

 

HB4705- 50 -LRB102 23056 HLH 32212 b

1            (T) For taxable years 2001 and thereafter, for the
2        taxable year in which the bonus depreciation deduction
3        is taken on the taxpayer's federal income tax return
4        under subsection (k) of Section 168 of the Internal
5        Revenue Code and for each applicable taxable year
6        thereafter, an amount equal to "x", where:
7                (1) "y" equals the amount of the depreciation
8            deduction taken for the taxable year on the
9            taxpayer's federal income tax return on property
10            for which the bonus depreciation deduction was
11            taken in any year under subsection (k) of Section
12            168 of the Internal Revenue Code, but not
13            including the bonus depreciation deduction;
14                (2) for taxable years ending on or before
15            December 31, 2005, "x" equals "y" multiplied by 30
16            and then divided by 70 (or "y" multiplied by
17            0.429); and
18                (3) for taxable years ending after December
19            31, 2005:
20                    (i) for property on which a bonus
21                depreciation deduction of 30% of the adjusted
22                basis was taken, "x" equals "y" multiplied by
23                30 and then divided by 70 (or "y" multiplied
24                by 0.429); and
25                    (ii) for property on which a bonus
26                depreciation deduction of 50% of the adjusted

 

 

HB4705- 51 -LRB102 23056 HLH 32212 b

1                basis was taken, "x" equals "y" multiplied by
2                1.0;
3                    (iii) (blank); for property on which a
4                bonus depreciation deduction of 100% of the
5                adjusted basis was taken in a taxable year
6                ending on or after December 31, 2021, "x"
7                equals the depreciation deduction that would
8                be allowed on that property if the taxpayer
9                had made the election under Section 168(k)(7)
10                of the Internal Revenue Code to not claim
11                bonus deprecation on that property; and
12                    (iv) (blank). for property on which a
13                bonus depreciation deduction of a percentage
14                other than 30%, 50% or 100% of the adjusted
15                basis was taken in a taxable year ending on or
16                after December 31, 2021, "x" equals "y"
17                multiplied by 100 times the percentage bonus
18                depreciation on the property (that is,
19                100(bonus%)) and then divided by 100 times 1
20                minus the percentage bonus depreciation on the
21                property (that is, 100(1–bonus%)).
22            The aggregate amount deducted under this
23        subparagraph in all taxable years for any one piece of
24        property may not exceed the amount of the bonus
25        depreciation deduction taken on that property on the
26        taxpayer's federal income tax return under subsection

 

 

HB4705- 52 -LRB102 23056 HLH 32212 b

1        (k) of Section 168 of the Internal Revenue Code. This
2        subparagraph (T) is exempt from the provisions of
3        Section 250;
4            (U) If the taxpayer sells, transfers, abandons, or
5        otherwise disposes of property for which the taxpayer
6        was required in any taxable year to make an addition
7        modification under subparagraph (E-10), then an amount
8        equal to that addition modification.
9            If the taxpayer continues to own property through
10        the last day of the last tax year for which the
11        taxpayer may claim a depreciation deduction for
12        federal income tax purposes a subtraction is allowed
13        with respect to that property under subparagraph (T)
14        and for which the taxpayer was required in any taxable
15        year to make an addition modification under
16        subparagraph (E-10), then an amount equal to that
17        addition modification.
18            The taxpayer is allowed to take the deduction
19        under this subparagraph only once with respect to any
20        one piece of property.
21            This subparagraph (U) is exempt from the
22        provisions of Section 250;
23            (V) The amount of: (i) any interest income (net of
24        the deductions allocable thereto) taken into account
25        for the taxable year with respect to a transaction
26        with a taxpayer that is required to make an addition

 

 

HB4705- 53 -LRB102 23056 HLH 32212 b

1        modification with respect to such transaction under
2        Section 203(a)(2)(D-17), 203(b)(2)(E-12),
3        203(c)(2)(G-12), or 203(d)(2)(D-7), but not to exceed
4        the amount of such addition modification, (ii) any
5        income from intangible property (net of the deductions
6        allocable thereto) taken into account for the taxable
7        year with respect to a transaction with a taxpayer
8        that is required to make an addition modification with
9        respect to such transaction under Section
10        203(a)(2)(D-18), 203(b)(2)(E-13), 203(c)(2)(G-13), or
11        203(d)(2)(D-8), but not to exceed the amount of such
12        addition modification, and (iii) any insurance premium
13        income (net of deductions allocable thereto) taken
14        into account for the taxable year with respect to a
15        transaction with a taxpayer that is required to make
16        an addition modification with respect to such
17        transaction under Section 203(a)(2)(D-19), Section
18        203(b)(2)(E-14), Section 203(c)(2)(G-14), or Section
19        203(d)(2)(D-9), but not to exceed the amount of that
20        addition modification. This subparagraph (V) is exempt
21        from the provisions of Section 250;
22            (W) An amount equal to the interest income taken
23        into account for the taxable year (net of the
24        deductions allocable thereto) with respect to
25        transactions with (i) a foreign person who would be a
26        member of the taxpayer's unitary business group but

 

 

HB4705- 54 -LRB102 23056 HLH 32212 b

1        for the fact that the foreign person's business
2        activity outside the United States is 80% or more of
3        that person's total business activity and (ii) for
4        taxable years ending on or after December 31, 2008, to
5        a person who would be a member of the same unitary
6        business group but for the fact that the person is
7        prohibited under Section 1501(a)(27) from being
8        included in the unitary business group because he or
9        she is ordinarily required to apportion business
10        income under different subsections of Section 304, but
11        not to exceed the addition modification required to be
12        made for the same taxable year under Section
13        203(b)(2)(E-12) for interest paid, accrued, or
14        incurred, directly or indirectly, to the same person.
15        This subparagraph (W) is exempt from the provisions of
16        Section 250;
17            (X) An amount equal to the income from intangible
18        property taken into account for the taxable year (net
19        of the deductions allocable thereto) with respect to
20        transactions with (i) a foreign person who would be a
21        member of the taxpayer's unitary business group but
22        for the fact that the foreign person's business
23        activity outside the United States is 80% or more of
24        that person's total business activity and (ii) for
25        taxable years ending on or after December 31, 2008, to
26        a person who would be a member of the same unitary

 

 

HB4705- 55 -LRB102 23056 HLH 32212 b

1        business group but for the fact that the person is
2        prohibited under Section 1501(a)(27) from being
3        included in the unitary business group because he or
4        she is ordinarily required to apportion business
5        income under different subsections of Section 304, but
6        not to exceed the addition modification required to be
7        made for the same taxable year under Section
8        203(b)(2)(E-13) for intangible expenses and costs
9        paid, accrued, or incurred, directly or indirectly, to
10        the same foreign person. This subparagraph (X) is
11        exempt from the provisions of Section 250;
12            (Y) For taxable years ending on or after December
13        31, 2011, in the case of a taxpayer who was required to
14        add back any insurance premiums under Section
15        203(b)(2)(E-14), such taxpayer may elect to subtract
16        that part of a reimbursement received from the
17        insurance company equal to the amount of the expense
18        or loss (including expenses incurred by the insurance
19        company) that would have been taken into account as a
20        deduction for federal income tax purposes if the
21        expense or loss had been uninsured. If a taxpayer
22        makes the election provided for by this subparagraph
23        (Y), the insurer to which the premiums were paid must
24        add back to income the amount subtracted by the
25        taxpayer pursuant to this subparagraph (Y). This
26        subparagraph (Y) is exempt from the provisions of

 

 

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1        Section 250; and
2            (Z) The difference between the nondeductible
3        controlled foreign corporation dividends under Section
4        965(e)(3) of the Internal Revenue Code over the
5        taxable income of the taxpayer, computed without
6        regard to Section 965(e)(2)(A) of the Internal Revenue
7        Code, and without regard to any net operating loss
8        deduction. This subparagraph (Z) is exempt from the
9        provisions of Section 250.
10        (3) Special rule. For purposes of paragraph (2)(A),
11    "gross income" in the case of a life insurance company,
12    for tax years ending on and after December 31, 1994, and
13    prior to December 31, 2011, shall mean the gross
14    investment income for the taxable year and, for tax years
15    ending on or after December 31, 2011, shall mean all
16    amounts included in life insurance gross income under
17    Section 803(a)(3) of the Internal Revenue Code.
 
18    (c) Trusts and estates.
19        (1) In general. In the case of a trust or estate, base
20    income means an amount equal to the taxpayer's taxable
21    income for the taxable year as modified by paragraph (2).
22        (2) Modifications. Subject to the provisions of
23    paragraph (3), the taxable income referred to in paragraph
24    (1) shall be modified by adding thereto the sum of the
25    following amounts:

 

 

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1            (A) An amount equal to all amounts paid or accrued
2        to the taxpayer as interest or dividends during the
3        taxable year to the extent excluded from gross income
4        in the computation of taxable income;
5            (B) In the case of (i) an estate, $600; (ii) a
6        trust which, under its governing instrument, is
7        required to distribute all of its income currently,
8        $300; and (iii) any other trust, $100, but in each such
9        case, only to the extent such amount was deducted in
10        the computation of taxable income;
11            (C) An amount equal to the amount of tax imposed by
12        this Act to the extent deducted from gross income in
13        the computation of taxable income for the taxable
14        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
20        loss carryback or carryforward from a taxable year
21        ending prior to December 31, 1986 is an element of
22        taxable income under paragraph (1) of subsection (e)
23        or subparagraph (E) of paragraph (2) of subsection
24        (e), the amount by which addition modifications other
25        than 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
7            of addition modification under this subparagraph
8            (E) which related to that net operating loss and
9            which was taken into account in calculating the
10            base 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
17        operating loss carryback or carryforward from more
18        than one other taxable year ending prior to December
19        31, 1986, the addition modification provided in this
20        subparagraph (E) shall be the sum of the amounts
21        computed independently under the preceding provisions
22        of this subparagraph (E) for each such taxable year;
23            (F) For taxable years ending on or after January
24        1, 1989, an amount equal to the tax deducted pursuant
25        to Section 164 of the Internal Revenue Code if the
26        trust or estate is claiming the same tax for purposes

 

 

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1        of the Illinois foreign tax credit under Section 601
2        of this 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
9        costs that the trust or estate deducted in computing
10        adjusted gross income and for which the trust or
11        estate claims a credit under subsection (l) of Section
12        201;
13            (G-10) For taxable years 2001 and thereafter, an
14        amount equal to the bonus depreciation deduction taken
15        on the taxpayer's federal income tax return for the
16        taxable year under subsection (k) of Section 168 of
17        the Internal Revenue Code; and
18            (G-11) If the taxpayer sells, transfers, abandons,
19        or otherwise disposes of property for which the
20        taxpayer was required in any taxable year to make an
21        addition modification under subparagraph (G-10), then
22        an amount equal to the aggregate amount of the
23        deductions taken in all taxable years under
24        subparagraph (R) with respect to that property.
25            If the taxpayer continues to own property through
26        the last day of the last tax year for which the

 

 

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1        taxpayer may claim a depreciation deduction for
2        federal income tax purposes a subtraction is allowed
3        with respect to that property under subparagraph (R)
4        and for which the taxpayer was allowed in any taxable
5        year to make a subtraction modification under
6        subparagraph (R), then an amount equal to that
7        subtraction modification.
8            The taxpayer is required to make the addition
9        modification under this subparagraph only once with
10        respect to any one piece of property;
11            (G-12) An amount equal to the amount otherwise
12        allowed as a deduction in computing base income for
13        interest paid, accrued, or incurred, directly or
14        indirectly, (i) for taxable years ending on or after
15        December 31, 2004, to a foreign person who would be a
16        member of the same unitary business group but for the
17        fact that the foreign person's business activity
18        outside the United States is 80% or more of the foreign
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. The addition modification

 

 

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1        required by this subparagraph shall be reduced to the
2        extent that dividends were included in base income of
3        the unitary group for the same taxable year and
4        received by the taxpayer or by a member of the
5        taxpayer's unitary business group (including amounts
6        included in gross income pursuant to Sections 951
7        through 964 of the Internal Revenue Code and amounts
8        included in gross income under Section 78 of the
9        Internal Revenue Code) with respect to the stock of
10        the same person to whom the interest was paid,
11        accrued, or incurred.
12            This paragraph shall not apply to the following:
13                (i) an item of interest paid, accrued, or
14            incurred, directly or indirectly, to a person who
15            is subject in a foreign country or state, other
16            than a state which requires mandatory unitary
17            reporting, to a tax on or measured by net income
18            with respect to such interest; or
19                (ii) an item of interest paid, accrued, or
20            incurred, directly or indirectly, to a person if
21            the taxpayer can establish, based on a
22            preponderance of the evidence, both of the
23            following:
24                    (a) the person, during the same taxable
25                year, paid, accrued, or incurred, the interest
26                to a person that is not a related member, and

 

 

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1                    (b) the transaction giving rise to the
2                interest expense between the taxpayer and the
3                person did not have as a principal purpose the
4                avoidance of Illinois income tax, and is paid
5                pursuant to a contract or agreement that
6                reflects an arm's-length interest rate and
7                terms; or
8                (iii) the taxpayer can establish, based on
9            clear and convincing evidence, that the interest
10            paid, accrued, or incurred relates to a contract
11            or agreement entered into at arm's-length rates
12            and terms and the principal purpose for the
13            payment is not federal or Illinois tax avoidance;
14            or
15                (iv) an item of interest paid, accrued, or
16            incurred, directly or indirectly, to a person if
17            the taxpayer establishes by clear and convincing
18            evidence that the adjustments are unreasonable; or
19            if the taxpayer and the Director agree in writing
20            to the application or use of an alternative method
21            of apportionment under Section 304(f).
22                Nothing in this subsection shall preclude the
23            Director from making any other adjustment
24            otherwise allowed under Section 404 of this Act
25            for any tax year beginning after the effective
26            date of this amendment provided such adjustment is

 

 

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1            made pursuant to regulation adopted by the
2            Department and such regulations provide methods
3            and standards by which the Department will utilize
4            its authority under Section 404 of this Act;
5            (G-13) An amount equal to the amount of intangible
6        expenses and costs otherwise allowed as a deduction in
7        computing base income, and that were paid, accrued, or
8        incurred, directly or indirectly, (i) for taxable
9        years ending on or after December 31, 2004, to a
10        foreign person who would be a member of the same
11        unitary business group but for the fact that the
12        foreign person's business activity outside the United
13        States is 80% or more of that person's total business
14        activity and (ii) for taxable years ending on or after
15        December 31, 2008, to a person who would be a member of
16        the same unitary business group but for the fact that
17        the person is prohibited under Section 1501(a)(27)
18        from being included in the unitary business group
19        because he or she is ordinarily required to apportion
20        business income under different subsections of Section
21        304. The addition modification required by this
22        subparagraph shall be reduced to the extent that
23        dividends were included in base income of the unitary
24        group for the same taxable year and received by the
25        taxpayer or by a member of the taxpayer's unitary
26        business group (including amounts included in gross

 

 

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1        income pursuant to Sections 951 through 964 of the
2        Internal Revenue Code and amounts included in gross
3        income under Section 78 of the Internal Revenue Code)
4        with respect to the stock of the same person to whom
5        the intangible expenses and costs were directly or
6        indirectly paid, incurred, or accrued. The preceding
7        sentence shall not apply to the extent that the same
8        dividends caused a reduction to the addition
9        modification required under Section 203(c)(2)(G-12) of
10        this Act. As used in this subparagraph, the term
11        "intangible expenses and costs" includes: (1)
12        expenses, losses, and costs for or related to the
13        direct or indirect acquisition, use, maintenance or
14        management, ownership, sale, exchange, or any other
15        disposition of intangible property; (2) losses
16        incurred, directly or indirectly, from factoring
17        transactions or discounting transactions; (3) royalty,
18        patent, technical, and copyright fees; (4) licensing
19        fees; and (5) other similar expenses and costs. For
20        purposes of this subparagraph, "intangible property"
21        includes patents, patent applications, trade names,
22        trademarks, service marks, copyrights, mask works,
23        trade secrets, and similar types of intangible assets.
24            This paragraph shall not apply to the following:
25                (i) any item of intangible expenses or costs
26            paid, accrued, or incurred, directly or

 

 

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1            indirectly, from a transaction with a person who
2            is subject in a foreign country or state, other
3            than a state which requires mandatory unitary
4            reporting, to a tax on or measured by net income
5            with respect to such item; or
6                (ii) any item of intangible expense or cost
7            paid, accrued, or incurred, directly or
8            indirectly, if the taxpayer can establish, based
9            on a preponderance of the evidence, both of the
10            following:
11                    (a) the person during the same taxable
12                year paid, accrued, or incurred, the
13                intangible expense or cost to a person that is
14                not a related member, and
15                    (b) the transaction giving rise to the
16                intangible expense or cost between the
17                taxpayer and the person did not have as a
18                principal purpose the avoidance of Illinois
19                income tax, and is paid pursuant to a contract
20                or agreement that reflects arm's-length terms;
21                or
22                (iii) any item of intangible expense or cost
23            paid, accrued, or incurred, directly or
24            indirectly, from a transaction with a person if
25            the taxpayer establishes by clear and convincing
26            evidence, that the adjustments are unreasonable;

 

 

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1            or if the taxpayer and the Director agree in
2            writing to the application or use of an
3            alternative method of apportionment under Section
4            304(f);
5                Nothing in this subsection shall preclude the
6            Director from making any other adjustment
7            otherwise allowed under Section 404 of this Act
8            for any tax year beginning after the effective
9            date of this amendment provided such adjustment is
10            made pursuant to regulation adopted by the
11            Department and such regulations provide methods
12            and standards by which the Department will utilize
13            its authority under Section 404 of this Act;
14            (G-14) For taxable years ending on or after
15        December 31, 2008, an amount equal to the amount of
16        insurance premium expenses and costs otherwise allowed
17        as a deduction in computing base income, and that were
18        paid, accrued, or incurred, directly or indirectly, to
19        a person who would be a member of the same unitary
20        business group but for the fact that the person is
21        prohibited under Section 1501(a)(27) from being
22        included in the unitary business group because he or
23        she is ordinarily required to apportion business
24        income under different subsections of Section 304. The
25        addition modification required by this subparagraph
26        shall be reduced to the extent that dividends were

 

 

HB4705- 67 -LRB102 23056 HLH 32212 b

1        included in base income of the unitary group for the
2        same taxable year and received by the taxpayer or by a
3        member of the taxpayer's unitary business group
4        (including amounts included in gross income under
5        Sections 951 through 964 of the Internal Revenue Code
6        and amounts included in gross income under Section 78
7        of the Internal Revenue Code) with respect to the
8        stock of the same person to whom the premiums and costs
9        were directly or indirectly paid, incurred, or
10        accrued. The preceding sentence does not apply to the
11        extent that the same dividends caused a reduction to
12        the addition modification required under Section
13        203(c)(2)(G-12) or Section 203(c)(2)(G-13) of this
14        Act;
15            (G-15) An amount equal to the credit allowable to
16        the taxpayer under Section 218(a) of this Act,
17        determined without regard to Section 218(c) of this
18        Act;
19            (G-16) For taxable years ending on or after
20        December 31, 2017, an amount equal to the deduction
21        allowed under Section 199 of the Internal Revenue Code
22        for the taxable year;
23    and by deducting from the total so obtained the sum of the
24    following amounts:
25            (H) An amount equal to all amounts included in
26        such total pursuant to the provisions of Sections

 

 

HB4705- 68 -LRB102 23056 HLH 32212 b

1        402(a), 402(c), 403(a), 403(b), 406(a), 407(a) and 408
2        of the Internal Revenue Code or included in such total
3        as distributions under the provisions of any
4        retirement or disability plan for employees of any
5        governmental agency or unit, or retirement payments to
6        retired partners, which payments are excluded in
7        computing net earnings from self employment by Section
8        1402 of the Internal Revenue Code and regulations
9        adopted pursuant thereto;
10            (I) The valuation limitation amount;
11            (J) An amount equal to the amount of any tax
12        imposed by this Act which was refunded to the taxpayer
13        and included in such total for the taxable year;
14            (K) An amount equal to all amounts included in
15        taxable income as modified by subparagraphs (A), (B),
16        (C), (D), (E), (F) and (G) which are exempt from
17        taxation by this State either by reason of its
18        statutes or Constitution or by reason of the
19        Constitution, treaties or statutes of the United
20        States; provided that, in the case of any statute of
21        this State that exempts income derived from bonds or
22        other obligations from the tax imposed under this Act,
23        the amount exempted shall be the interest net of bond
24        premium amortization;
25            (L) With the exception of any amounts subtracted
26        under subparagraph (K), an amount equal to the sum of

 

 

HB4705- 69 -LRB102 23056 HLH 32212 b

1        all amounts disallowed as deductions by (i) Sections
2        171(a)(2) and 265(a)(2) of the Internal Revenue Code,
3        and all amounts of expenses allocable to interest and
4        disallowed as deductions by Section 265(a)(1) of the
5        Internal Revenue Code; and (ii) for taxable years
6        ending on or after August 13, 1999, Sections
7        171(a)(2), 265, 280C, and 832(b)(5)(B)(i) of the
8        Internal Revenue Code, plus, (iii) for taxable years
9        ending on or after December 31, 2011, Section
10        45G(e)(3) of the Internal Revenue Code and, for
11        taxable years ending on or after December 31, 2008,
12        any amount included in gross income under Section 87
13        of the Internal Revenue Code; the provisions of this
14        subparagraph are exempt from the provisions of Section
15        250;
16            (M) An amount equal to those dividends included in
17        such total which were paid by a corporation which
18        conducts business operations in a River Edge
19        Redevelopment Zone or zones created under the River
20        Edge Redevelopment Zone Act and conducts substantially
21        all of its operations in a River Edge Redevelopment
22        Zone or zones. This subparagraph (M) is exempt from
23        the provisions of Section 250;
24            (N) An amount equal to any contribution made to a
25        job training project established pursuant to the Tax
26        Increment Allocation Redevelopment Act;

 

 

HB4705- 70 -LRB102 23056 HLH 32212 b

1            (O) An amount equal to those dividends included in
2        such total that were paid by a corporation that
3        conducts business operations in a federally designated
4        Foreign Trade Zone or Sub-Zone and that is designated
5        a High Impact Business located in Illinois; provided
6        that dividends eligible for the deduction provided in
7        subparagraph (M) of paragraph (2) of this subsection
8        shall not be eligible for the deduction provided under
9        this subparagraph (O);
10            (P) An amount equal to the amount of the deduction
11        used to compute the federal income tax credit for
12        restoration of substantial amounts held under claim of
13        right for the taxable year pursuant to Section 1341 of
14        the Internal Revenue Code;
15            (Q) For taxable year 1999 and thereafter, an
16        amount equal to the amount of any (i) distributions,
17        to the extent includible in gross income for federal
18        income tax purposes, made to the taxpayer because of
19        his or her status as a victim of persecution for racial
20        or religious reasons by Nazi Germany or any other Axis
21        regime or as an heir of the victim and (ii) items of
22        income, to the extent includible in gross income for
23        federal income tax purposes, attributable to, derived
24        from or in any way related to assets stolen from,
25        hidden from, or otherwise lost to a victim of
26        persecution for racial or religious reasons by Nazi

 

 

HB4705- 71 -LRB102 23056 HLH 32212 b

1        Germany or any other Axis regime immediately prior to,
2        during, and immediately after World War II, including,
3        but not limited to, interest on the proceeds
4        receivable as insurance under policies issued to a
5        victim of persecution for racial or religious reasons
6        by Nazi Germany or any other Axis regime by European
7        insurance companies immediately prior to and during
8        World War II; provided, however, this subtraction from
9        federal adjusted gross income does not apply to assets
10        acquired with such assets or with the proceeds from
11        the sale of such assets; provided, further, this
12        paragraph shall only apply to a taxpayer who was the
13        first recipient of such assets after their recovery
14        and who is a victim of persecution for racial or
15        religious reasons by Nazi Germany or any other Axis
16        regime or as an heir of the victim. The amount of and
17        the eligibility for any public assistance, benefit, or
18        similar entitlement is not affected by the inclusion
19        of items (i) and (ii) of this paragraph in gross income
20        for federal income tax purposes. This paragraph is
21        exempt from the provisions of Section 250;
22            (R) For taxable years 2001 and thereafter, for the
23        taxable year in which the bonus depreciation deduction
24        is taken on the taxpayer's federal income tax return
25        under subsection (k) of Section 168 of the Internal
26        Revenue Code and for each applicable taxable year

 

 

HB4705- 72 -LRB102 23056 HLH 32212 b

1        thereafter, an amount equal to "x", where:
2                (1) "y" equals the amount of the depreciation
3            deduction taken for the taxable year on the
4            taxpayer's federal income tax return on property
5            for which the bonus depreciation deduction was
6            taken in any year under subsection (k) of Section
7            168 of the Internal Revenue Code, but not
8            including the bonus depreciation deduction;
9                (2) for taxable years ending on or before
10            December 31, 2005, "x" equals "y" multiplied by 30
11            and then divided by 70 (or "y" multiplied by
12            0.429); and
13                (3) for taxable years ending after December
14            31, 2005:
15                    (i) for property on which a bonus
16                depreciation deduction of 30% of the adjusted
17                basis was taken, "x" equals "y" multiplied by
18                30 and then divided by 70 (or "y" multiplied
19                by 0.429); and
20                    (ii) for property on which a bonus
21                depreciation deduction of 50% of the adjusted
22                basis was taken, "x" equals "y" multiplied by
23                1.0;
24                    (iii) (blank); for property on which a
25                bonus depreciation deduction of 100% of the
26                adjusted basis was taken in a taxable year

 

 

HB4705- 73 -LRB102 23056 HLH 32212 b

1                ending on or after December 31, 2021, "x"
2                equals the depreciation deduction that would
3                be allowed on that property if the taxpayer
4                had made the election under Section 168(k)(7)
5                of the Internal Revenue Code to not claim
6                bonus deprecation on that property; and
7                    (iv) (blank). for property on which a
8                bonus depreciation deduction of a percentage
9                other than 30%, 50% or 100% of the adjusted
10                basis was taken in a taxable year ending on or
11                after December 31, 2021, "x" equals "y"
12                multiplied by 100 times the percentage bonus
13                depreciation on the property (that is,
14                100(bonus%)) and then divided by 100 times 1
15                minus the percentage bonus depreciation on the
16                property (that is, 100(1–bonus%)).
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 a the
6        taxpayer may claim a depreciation deduction for
7        federal income tax purposes subtraction is allowed
8        with respect to that property under subparagraph (R)
9        and for which the taxpayer was required in any taxable
10        year to make an addition modification under
11        subparagraph (G-10), then an amount equal to that
12        addition modification.
13            The taxpayer is allowed to take the deduction
14        under this subparagraph only once with respect to any
15        one piece of property.
16            This subparagraph (S) is exempt from the
17        provisions of Section 250;
18            (T) The amount of (i) any interest income (net of
19        the deductions allocable thereto) taken into account
20        for the taxable year with respect to a transaction
21        with a taxpayer that is required to make an addition
22        modification with respect to such transaction under
23        Section 203(a)(2)(D-17), 203(b)(2)(E-12),
24        203(c)(2)(G-12), or 203(d)(2)(D-7), but not to exceed
25        the amount of such addition modification and (ii) any
26        income from intangible property (net of the deductions

 

 

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1        allocable thereto) taken into account for the taxable
2        year with respect to a transaction with a taxpayer
3        that is required to make an addition modification with
4        respect to such transaction under Section
5        203(a)(2)(D-18), 203(b)(2)(E-13), 203(c)(2)(G-13), or
6        203(d)(2)(D-8), but not to exceed the amount of such
7        addition modification. This subparagraph (T) is exempt
8        from the provisions of Section 250;
9            (U) An amount equal to the interest income taken
10        into account for the taxable year (net of the
11        deductions allocable thereto) with respect to
12        transactions with (i) a foreign person who would be a
13        member of the taxpayer's unitary business group but
14        for the fact the foreign person's business activity
15        outside the United States is 80% or more of that
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, but not to exceed the
24        addition modification required to be made for the same
25        taxable year under Section 203(c)(2)(G-12) for
26        interest paid, accrued, or incurred, directly or

 

 

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1        indirectly, to the same person. This subparagraph (U)
2        is exempt from the provisions of Section 250;
3            (V) An amount equal to the income from intangible
4        property taken into account for the taxable year (net
5        of the deductions allocable thereto) with respect to
6        transactions with (i) a foreign person who would be a
7        member of the taxpayer's unitary business group but
8        for the fact that the foreign person's business
9        activity outside the United States is 80% or more of
10        that person's total business activity and (ii) for
11        taxable years ending on or after December 31, 2008, 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, but
18        not to exceed the addition modification required to be
19        made for the same taxable year under Section
20        203(c)(2)(G-13) for intangible expenses and costs
21        paid, accrued, or incurred, directly or indirectly, to
22        the same foreign person. This subparagraph (V) is
23        exempt from the provisions of Section 250;
24            (W) in the case of an estate, an amount equal to
25        all amounts included in such total pursuant to the
26        provisions of Section 111 of the Internal Revenue Code

 

 

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1        as a recovery of items previously deducted by the
2        decedent from adjusted gross income in the computation
3        of taxable income. This subparagraph (W) is exempt
4        from Section 250;
5            (X) an amount equal to the refund included in such
6        total of any tax deducted for federal income tax
7        purposes, to the extent that deduction was added back
8        under subparagraph (F). This subparagraph (X) is
9        exempt from the provisions of Section 250;
10            (Y) For taxable years ending on or after December
11        31, 2011, in the case of a taxpayer who was required to
12        add back any insurance premiums under Section
13        203(c)(2)(G-14), such taxpayer may elect to subtract
14        that part of a reimbursement received from the
15        insurance company equal to the amount of the expense
16        or loss (including expenses incurred by the insurance
17        company) that would have been taken into account as a
18        deduction for federal income tax purposes if the
19        expense or loss had been uninsured. If a taxpayer
20        makes the election provided for by this subparagraph
21        (Y), the insurer to which the premiums were paid must
22        add back to income the amount subtracted by the
23        taxpayer pursuant to this subparagraph (Y). This
24        subparagraph (Y) is exempt from the provisions of
25        Section 250; and
26            (Z) For taxable years beginning after December 31,

 

 

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1        2018 and before January 1, 2026, the amount of excess
2        business loss of the taxpayer disallowed as a
3        deduction by Section 461(l)(1)(B) of the Internal
4        Revenue Code.
5        (3) Limitation. The amount of any modification
6    otherwise required under this subsection shall, under
7    regulations prescribed by the Department, be adjusted by
8    any amounts included therein which were properly paid,
9    credited, or required to be distributed, or permanently
10    set aside for charitable purposes pursuant to Internal
11    Revenue Code Section 642(c) during the taxable year.
 
12    (d) Partnerships.
13        (1) In general. In the case of a partnership, base
14    income means an amount equal to the taxpayer's taxable
15    income for the taxable year as modified by paragraph (2).
16        (2) Modifications. The taxable income referred to in
17    paragraph (1) shall be modified by adding thereto the sum
18    of the following amounts:
19            (A) An amount equal to all amounts paid or accrued
20        to the taxpayer as interest or dividends during the
21        taxable year to the extent excluded from gross income
22        in the computation of taxable income;
23            (B) An amount equal to the amount of tax imposed by
24        this Act to the extent deducted from gross income for
25        the taxable year;

 

 

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1            (C) The amount of deductions allowed to the
2        partnership pursuant to Section 707 (c) of the
3        Internal Revenue Code in calculating its taxable
4        income;
5            (D) An amount equal to the amount of the capital
6        gain deduction allowable under the Internal Revenue
7        Code, to the extent deducted from gross income in the
8        computation of taxable income;
9            (D-5) For taxable years 2001 and thereafter, an
10        amount equal to the bonus depreciation deduction taken
11        on the taxpayer's federal income tax return for the
12        taxable year under subsection (k) of Section 168 of
13        the Internal Revenue Code;
14            (D-6) If the taxpayer sells, transfers, abandons,
15        or otherwise disposes of property for which the
16        taxpayer was required in any taxable year to make an
17        addition modification under subparagraph (D-5), then
18        an amount equal to the aggregate amount of the
19        deductions taken in all taxable years under
20        subparagraph (O) with respect to that property.
21            If the taxpayer continues to own property through
22        the last day of the last tax year for which the
23        taxpayer may claim a depreciation deduction for
24        federal income tax purposes a subtraction is allowed
25        with respect to that property under subparagraph (O)
26        and for which the taxpayer was allowed in any taxable

 

 

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1        year to make a subtraction modification under
2        subparagraph (O), then an amount equal to that
3        subtraction modification.
4            The taxpayer is required to make the addition
5        modification under this subparagraph only once with
6        respect to any one piece of property;
7            (D-7) An amount equal to the amount otherwise
8        allowed as a deduction in computing base income for
9        interest paid, accrued, or incurred, directly or
10        indirectly, (i) for taxable years ending on or after
11        December 31, 2004, to a foreign person who would be a
12        member of the same unitary business group but for the
13        fact the foreign person's business activity outside
14        the United States is 80% or more of the foreign
15        person's total business activity and (ii) for taxable
16        years ending on or after December 31, 2008, to a person
17        who would be a member of the same unitary business
18        group but for the fact that the person is prohibited
19        under Section 1501(a)(27) from being included in the
20        unitary business group because he or she is ordinarily
21        required to apportion business income under different
22        subsections of Section 304. The addition modification
23        required by this subparagraph shall be reduced to the
24        extent that dividends were included in base income of
25        the unitary group for the same taxable year and
26        received by the taxpayer or by a member of the

 

 

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1        taxpayer's unitary business group (including amounts
2        included in gross income pursuant to Sections 951
3        through 964 of the Internal Revenue Code and amounts
4        included in gross income under Section 78 of the
5        Internal Revenue Code) with respect to the stock of
6        the same person to whom the interest was paid,
7        accrued, or incurred.
8            This paragraph shall not apply to the following:
9                (i) an item of interest paid, accrued, or
10            incurred, directly or indirectly, to a person who
11            is subject in a foreign country or state, other
12            than a state which requires mandatory unitary
13            reporting, to a tax on or measured by net income
14            with respect to such interest; or
15                (ii) an item of interest paid, accrued, or
16            incurred, directly or indirectly, to a person if
17            the taxpayer can establish, based on a
18            preponderance of the evidence, both of the
19            following:
20                    (a) the person, during the same taxable
21                year, paid, accrued, or incurred, the interest
22                to a person that is not a related member, and
23                    (b) the transaction giving rise to the
24                interest expense between the taxpayer and the
25                person did not have as a principal purpose the
26                avoidance of Illinois income tax, and is paid

 

 

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1                pursuant to a contract or agreement that
2                reflects an arm's-length interest rate and
3                terms; or
4                (iii) the taxpayer can establish, based on
5            clear and convincing evidence, that the interest
6            paid, accrued, or incurred relates to a contract
7            or agreement entered into at arm's-length rates
8            and terms and the principal purpose for the
9            payment is not federal or Illinois tax avoidance;
10            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
21            for any tax year beginning after the effective
22            date of this amendment provided such adjustment is
23            made pursuant to regulation adopted by the
24            Department and such regulations provide methods
25            and standards by which the Department will utilize
26            its authority under Section 404 of this Act; and

 

 

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1            (D-8) 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(d)(2)(D-7) of
6        this Act. As used in this subparagraph, the term
7        "intangible expenses and costs" includes (1) expenses,
8        losses, and costs for, or related to, the direct or
9        indirect acquisition, use, maintenance or management,
10        ownership, sale, exchange, or any other disposition of
11        intangible property; (2) losses incurred, directly or
12        indirectly, from factoring transactions or discounting
13        transactions; (3) royalty, patent, technical, and
14        copyright fees; (4) licensing fees; and (5) other
15        similar expenses and costs. For purposes of this
16        subparagraph, "intangible property" includes patents,
17        patent applications, trade names, trademarks, service
18        marks, copyrights, mask works, trade secrets, and
19        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
24            is subject in a foreign country or state, other
25            than a state which requires mandatory unitary
26            reporting, to a tax on or measured by net income

 

 

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1            with respect 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
21            the 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
25            alternative method of apportionment under Section
26            304(f);

 

 

HB4705- 86 -LRB102 23056 HLH 32212 b

1                Nothing in this subsection shall preclude the
2            Director from making any other adjustment
3            otherwise allowed under Section 404 of this Act
4            for any tax year beginning after the effective
5            date of this amendment provided such adjustment is
6            made pursuant to regulation adopted by the
7            Department and such regulations provide methods
8            and standards by which the Department will utilize
9            its authority under Section 404 of this Act;
10            (D-9) For taxable years ending on or after
11        December 31, 2008, an amount equal to the amount of
12        insurance premium expenses and costs otherwise allowed
13        as a deduction in computing base income, and that were
14        paid, accrued, or incurred, directly or indirectly, to
15        a person who would be a member of the same unitary
16        business group but for the fact that the person is
17        prohibited under Section 1501(a)(27) from being
18        included in the unitary business group because he or
19        she is ordinarily required to apportion business
20        income under different subsections of Section 304. The
21        addition modification required by this subparagraph
22        shall be reduced to the extent that dividends were
23        included in base income of the unitary group for the
24        same taxable year and received by the taxpayer or by a
25        member of the taxpayer's unitary business group
26        (including amounts included in gross income under

 

 

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1        Sections 951 through 964 of the Internal Revenue Code
2        and amounts included in gross income under Section 78
3        of the Internal Revenue Code) with respect to the
4        stock of the same person to whom the premiums and costs
5        were directly or indirectly paid, incurred, or
6        accrued. The preceding sentence does not apply to the
7        extent that the same dividends caused a reduction to
8        the addition modification required under Section
9        203(d)(2)(D-7) or Section 203(d)(2)(D-8) of this Act;
10            (D-10) An amount equal to the credit allowable to
11        the taxpayer under Section 218(a) of this Act,
12        determined without regard to Section 218(c) of this
13        Act;
14            (D-11) For taxable years ending on or after
15        December 31, 2017, an amount equal to the deduction
16        allowed under Section 199 of the Internal Revenue Code
17        for the taxable year;
18    and by deducting from the total so obtained the following
19    amounts:
20            (E) The valuation limitation amount;
21            (F) An amount equal to the amount of any tax
22        imposed by this Act which was refunded to the taxpayer
23        and included in such total for the taxable year;
24            (G) An amount equal to all amounts included in
25        taxable income as modified by subparagraphs (A), (B),
26        (C) and (D) which are exempt from taxation by this

 

 

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1        State either by reason of its statutes or Constitution
2        or by reason of the Constitution, treaties or statutes
3        of the United States; provided that, in the case of any
4        statute of this State that exempts income derived from
5        bonds or other obligations from the tax imposed under
6        this Act, the amount exempted shall be the interest
7        net of bond premium amortization;
8            (H) Any income of the partnership which
9        constitutes personal service income as defined in
10        Section 1348(b)(1) of the Internal Revenue Code (as in
11        effect December 31, 1981) or a reasonable allowance
12        for compensation paid or accrued for services rendered
13        by partners to the partnership, whichever is greater;
14        this subparagraph (H) is exempt from the provisions of
15        Section 250;
16            (I) An amount equal to all amounts of income
17        distributable to an entity subject to the Personal
18        Property Tax Replacement Income Tax imposed by
19        subsections (c) and (d) of Section 201 of this Act
20        including amounts distributable to organizations
21        exempt from federal income tax by reason of Section
22        501(a) of the Internal Revenue Code; this subparagraph
23        (I) is exempt from the provisions of Section 250;
24            (J) With the exception of any amounts subtracted
25        under subparagraph (G), an amount equal to the sum of
26        all amounts disallowed as deductions by (i) Sections

 

 

HB4705- 89 -LRB102 23056 HLH 32212 b

1        171(a)(2) and 265(a)(2) of the Internal Revenue Code,
2        and all amounts of expenses allocable to interest and
3        disallowed as deductions by Section 265(a)(1) of the
4        Internal Revenue Code; and (ii) for taxable years
5        ending on or after August 13, 1999, Sections
6        171(a)(2), 265, 280C, and 832(b)(5)(B)(i) of the
7        Internal Revenue Code, plus, (iii) for taxable years
8        ending on or after December 31, 2011, Section
9        45G(e)(3) of the Internal Revenue Code and, for
10        taxable years ending on or after December 31, 2008,
11        any amount included in gross income under Section 87
12        of the Internal Revenue Code; the provisions of this
13        subparagraph are exempt from the provisions of Section
14        250;
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 from a River Edge Redevelopment
21        Zone or zones. This subparagraph (K) is exempt from
22        the provisions of Section 250;
23            (L) An amount equal to any contribution made to a
24        job training project established pursuant to the Real
25        Property Tax Increment Allocation Redevelopment Act;
26            (M) An amount equal to those dividends included in

 

 

HB4705- 90 -LRB102 23056 HLH 32212 b

1        such total that were paid by a corporation that
2        conducts business operations in a federally designated
3        Foreign Trade Zone or Sub-Zone and that is designated
4        a High Impact Business located in Illinois; provided
5        that dividends eligible for the deduction provided in
6        subparagraph (K) of paragraph (2) of this subsection
7        shall not be eligible for the deduction provided under
8        this subparagraph (M);
9            (N) An amount equal to the amount of the deduction
10        used to compute the federal income tax credit for
11        restoration of substantial amounts held under claim of
12        right for the taxable year pursuant to Section 1341 of
13        the Internal Revenue Code;
14            (O) For taxable years 2001 and thereafter, for the
15        taxable year in which the bonus depreciation deduction
16        is taken on the taxpayer's federal income tax return
17        under subsection (k) of Section 168 of the Internal
18        Revenue Code and for each applicable taxable year
19        thereafter, an amount equal to "x", where:
20                (1) "y" equals the amount of the depreciation
21            deduction taken for the taxable year on the
22            taxpayer's federal income tax return on property
23            for which the bonus depreciation deduction was
24            taken in any year under subsection (k) of Section
25            168 of the Internal Revenue Code, but not
26            including the bonus depreciation deduction;

 

 

HB4705- 91 -LRB102 23056 HLH 32212 b

1                (2) for taxable years ending on or before
2            December 31, 2005, "x" equals "y" multiplied by 30
3            and then divided by 70 (or "y" multiplied by
4            0.429); and
5                (3) for taxable years ending after December
6            31, 2005:
7                    (i) for property on which a bonus
8                depreciation deduction of 30% of the adjusted
9                basis was taken, "x" equals "y" multiplied by
10                30 and then divided by 70 (or "y" multiplied
11                by 0.429); and
12                    (ii) for property on which a bonus
13                depreciation deduction of 50% of the adjusted
14                basis was taken, "x" equals "y" multiplied by
15                1.0;
16                    (iii) (blank); for property on which a
17                bonus depreciation deduction of 100% of the
18                adjusted basis was taken in a taxable year
19                ending on or after December 31, 2021, "x"
20                equals the depreciation deduction that would
21                be allowed on that property if the taxpayer
22                had made the election under Section 168(k)(7)
23                of the Internal Revenue Code to not claim
24                bonus deprecation on that property; and
25                    (iv) (blank). for property on which a
26                bonus depreciation deduction of a percentage

 

 

HB4705- 92 -LRB102 23056 HLH 32212 b

1                other than 30%, 50% or 100% of the adjusted
2                basis was taken in a taxable year ending on or
3                after December 31, 2021, "x" equals "y"
4                multiplied by 100 times the percentage bonus
5                depreciation on the property (that is,
6                100(bonus%)) and then divided by 100 times 1
7                minus the percentage bonus depreciation on the
8                property (that is, 100(1–bonus%)).
9            The aggregate amount deducted under this
10        subparagraph in all taxable years for any one piece of
11        property may not exceed the amount of the bonus
12        depreciation deduction taken on that property on the
13        taxpayer's federal income tax return under subsection
14        (k) of Section 168 of the Internal Revenue Code. This
15        subparagraph (O) is exempt from the provisions of
16        Section 250;
17            (P) If the taxpayer sells, transfers, abandons, or
18        otherwise disposes of property 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            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 a subtraction is allowed
26        with respect to that property under subparagraph (O)

 

 

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1        and for which the taxpayer was required in any taxable
2        year to make an addition modification under
3        subparagraph (D-5), then an amount equal to that
4        addition modification.
5            The taxpayer is allowed to take the deduction
6        under this subparagraph only once with respect to any
7        one piece of property.
8            This subparagraph (P) is exempt from the
9        provisions of Section 250;
10            (Q) The amount of (i) any interest income (net of
11        the deductions allocable thereto) taken into account
12        for the taxable year with respect to a transaction
13        with a taxpayer that is required to make an addition
14        modification with respect to such transaction under
15        Section 203(a)(2)(D-17), 203(b)(2)(E-12),
16        203(c)(2)(G-12), or 203(d)(2)(D-7), but not to exceed
17        the amount of such addition modification and (ii) any
18        income from intangible property (net of the deductions
19        allocable thereto) taken into account for the taxable
20        year with respect to a transaction with a taxpayer
21        that is required to make an addition modification with
22        respect to such transaction under Section
23        203(a)(2)(D-18), 203(b)(2)(E-13), 203(c)(2)(G-13), or
24        203(d)(2)(D-8), but not to exceed the amount of such
25        addition modification. This subparagraph (Q) is exempt
26        from Section 250;

 

 

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1            (R) An amount equal to the interest income taken
2        into account for the taxable year (net of the
3        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
6        for the fact that the foreign person's business
7        activity outside the United States is 80% or more of
8        that person's total business activity and (ii) for
9        taxable years ending on or after December 31, 2008, to
10        a person who would be a member of the same unitary
11        business group but for the fact that the person is
12        prohibited under Section 1501(a)(27) from being
13        included in the unitary business group because he or
14        she is ordinarily required to apportion business
15        income under different subsections of Section 304, but
16        not to exceed the addition modification required to be
17        made for the same taxable year under Section
18        203(d)(2)(D-7) for interest paid, accrued, or
19        incurred, directly or indirectly, to the same person.
20        This subparagraph (R) is exempt from Section 250;
21            (S) An amount equal to the income from intangible
22        property taken into account for the taxable year (net
23        of the deductions allocable thereto) with respect to
24        transactions with (i) a foreign person who would be a
25        member of the taxpayer's unitary business group but
26        for the fact that the foreign person's business

 

 

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1        activity outside the United States is 80% or more of
2        that person's total business activity and (ii) for
3        taxable years ending on or after December 31, 2008, to
4        a person who would be a member of the same unitary
5        business group but for the fact that the person is
6        prohibited under Section 1501(a)(27) from being
7        included in the unitary business group because he or
8        she is ordinarily required to apportion business
9        income under different subsections of Section 304, but
10        not to exceed the addition modification required to be
11        made for the same taxable year under Section
12        203(d)(2)(D-8) for intangible expenses and costs paid,
13        accrued, or incurred, directly or indirectly, to the
14        same person. This subparagraph (S) is exempt from
15        Section 250; and
16            (T) For taxable years ending on or after December
17        31, 2011, in the case of a taxpayer who was required to
18        add back any insurance premiums under Section
19        203(d)(2)(D-9), such taxpayer may elect to subtract
20        that part of a reimbursement received from the
21        insurance company equal to the amount of the expense
22        or loss (including expenses incurred by the insurance
23        company) that would have been taken into account as a
24        deduction for federal income tax purposes if the
25        expense or loss had been uninsured. If a taxpayer
26        makes the election provided for by this subparagraph

 

 

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1        (T), the insurer to which the premiums were paid must
2        add back to income the amount subtracted by the
3        taxpayer pursuant to this subparagraph (T). This
4        subparagraph (T) is exempt from the provisions of
5        Section 250.
 
6    (e) Gross income; adjusted gross income; taxable income.
7        (1) In general. Subject to the provisions of paragraph
8    (2) and subsection (b)(3), for purposes of this Section
9    and Section 803(e), a taxpayer's gross income, adjusted
10    gross income, or taxable income for the taxable year shall
11    mean the amount of gross income, adjusted gross income or
12    taxable income properly reportable for federal income tax
13    purposes for the taxable year under the provisions of the
14    Internal Revenue Code. Taxable income may be less than
15    zero. However, for taxable years ending on or after
16    December 31, 1986, net operating loss carryforwards from
17    taxable years ending prior to December 31, 1986, may not
18    exceed the sum of federal taxable income for the taxable
19    year before net operating loss deduction, plus the excess
20    of addition modifications over subtraction modifications
21    for the taxable year. For taxable years ending prior to
22    December 31, 1986, taxable income may never be an amount
23    in excess of the net operating loss for the taxable year as
24    defined in subsections (c) and (d) of Section 172 of the
25    Internal Revenue Code, provided that when taxable income

 

 

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1    of a corporation (other than a Subchapter S corporation),
2    trust, or estate is less than zero and addition
3    modifications, other than those provided by subparagraph
4    (E) of paragraph (2) of subsection (b) for corporations or
5    subparagraph (E) of paragraph (2) of subsection (c) for
6    trusts and estates, exceed subtraction modifications, an
7    addition modification must be made under those
8    subparagraphs for any other taxable year to which the
9    taxable income less than zero (net operating loss) is
10    applied under Section 172 of the Internal Revenue Code or
11    under subparagraph (E) of paragraph (2) of this subsection
12    (e) applied in conjunction with Section 172 of the
13    Internal Revenue Code.
14        (2) Special rule. For purposes of paragraph (1) of
15    this subsection, the taxable income properly reportable
16    for federal income tax purposes shall mean:
17            (A) Certain life insurance companies. In the case
18        of a life insurance company subject to the tax imposed
19        by Section 801 of the Internal Revenue Code, life
20        insurance company taxable income, plus the amount of
21        distribution from pre-1984 policyholder surplus
22        accounts as calculated under Section 815a of the
23        Internal Revenue Code;
24            (B) Certain other insurance companies. In the case
25        of mutual insurance companies subject to the tax
26        imposed by Section 831 of the Internal Revenue Code,

 

 

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1        insurance company taxable income;
2            (C) Regulated investment companies. In the case of
3        a regulated investment company subject to the tax
4        imposed by Section 852 of the Internal Revenue Code,
5        investment company taxable income;
6            (D) Real estate investment trusts. In the case of
7        a real estate investment trust subject to the tax
8        imposed by Section 857 of the Internal Revenue Code,
9        real estate investment trust taxable income;
10            (E) Consolidated corporations. In the case of a
11        corporation which is a member of an affiliated group
12        of corporations filing a consolidated income tax
13        return for the taxable year for federal income tax
14        purposes, taxable income determined as if such
15        corporation had filed a separate return for federal
16        income tax purposes for the taxable year and each
17        preceding taxable year for which it was a member of an
18        affiliated group. For purposes of this subparagraph,
19        the taxpayer's separate taxable income shall be
20        determined as if the election provided by Section
21        243(b)(2) of the Internal Revenue Code had been in
22        effect for all such years;
23            (F) Cooperatives. In the case of a cooperative
24        corporation or association, the taxable income of such
25        organization determined in accordance with the
26        provisions of Section 1381 through 1388 of the

 

 

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1        Internal Revenue Code, but without regard to the
2        prohibition against offsetting losses from patronage
3        activities against income from nonpatronage
4        activities; except that a cooperative corporation or
5        association may make an election to follow its federal
6        income tax treatment of patronage losses and
7        nonpatronage losses. In the event such election is
8        made, such losses shall be computed and carried over
9        in a manner consistent with subsection (a) of Section
10        207 of this Act and apportioned by the apportionment
11        factor reported by the cooperative on its Illinois
12        income tax return filed for the taxable year in which
13        the losses are incurred. The election shall be
14        effective for all taxable years with original returns
15        due on or after the date of the election. In addition,
16        the cooperative may file an amended return or returns,
17        as allowed under this Act, to provide that the
18        election shall be effective for losses incurred or
19        carried forward for taxable years occurring prior to
20        the date of the election. Once made, the election may
21        only be revoked upon approval of the Director. The
22        Department shall adopt rules setting forth
23        requirements for documenting the elections and any
24        resulting Illinois net loss and the standards to be
25        used by the Director in evaluating requests to revoke
26        elections. Public Act 96-932 is declaratory of

 

 

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1        existing law;
2            (G) Subchapter S corporations. In the case of: (i)
3        a Subchapter S corporation for which there is in
4        effect an election for the taxable year under Section
5        1362 of the Internal Revenue Code, the taxable income
6        of such corporation determined in accordance with
7        Section 1363(b) of the Internal Revenue Code, except
8        that taxable income shall take into account those
9        items which are required by Section 1363(b)(1) of the
10        Internal Revenue Code to be separately stated; and
11        (ii) a Subchapter S corporation for which there is in
12        effect a federal election to opt out of the provisions
13        of the Subchapter S Revision Act of 1982 and have
14        applied instead the prior federal Subchapter S rules
15        as in effect on July 1, 1982, the taxable income of
16        such corporation determined in accordance with the
17        federal Subchapter S rules as in effect on July 1,
18        1982; and
19            (H) Partnerships. In the case of a partnership,
20        taxable income determined in accordance with Section
21        703 of the Internal Revenue Code, except that taxable
22        income shall take into account those items which are
23        required by Section 703(a)(1) to be separately stated
24        but which would be taken into account by an individual
25        in calculating his taxable income.
26        (3) Recapture of business expenses on disposition of

 

 

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1    asset or business. Notwithstanding any other law to the
2    contrary, if in prior years income from an asset or
3    business has been classified as business income and in a
4    later year is demonstrated to be non-business income, then
5    all expenses, without limitation, deducted in such later
6    year and in the 2 immediately preceding taxable years
7    related to that asset or business that generated the
8    non-business income shall be added back and recaptured as
9    business income in the year of the disposition of the
10    asset or business. Such amount shall be apportioned to
11    Illinois using the greater of the apportionment fraction
12    computed for the business under Section 304 of this Act
13    for the taxable year or the average of the apportionment
14    fractions computed for the business under Section 304 of
15    this Act for the taxable year and for the 2 immediately
16    preceding taxable years.
 
17    (f) Valuation limitation amount.
18        (1) In general. The valuation limitation amount
19    referred to in subsections (a)(2)(G), (c)(2)(I) and
20    (d)(2)(E) is an amount equal to:
21            (A) The sum of the pre-August 1, 1969 appreciation
22        amounts (to the extent consisting of gain reportable
23        under the provisions of Section 1245 or 1250 of the
24        Internal Revenue Code) for all property in respect of
25        which such gain was reported for the taxable year;

 

 

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1        plus
2            (B) The lesser of (i) the sum of the pre-August 1,
3        1969 appreciation amounts (to the extent consisting of
4        capital gain) for all property in respect of which
5        such gain was reported for federal income tax purposes
6        for the taxable year, or (ii) the net capital gain for
7        the taxable year, reduced in either case by any amount
8        of such gain included in the amount determined under
9        subsection (a)(2)(F) or (c)(2)(H).
10        (2) Pre-August 1, 1969 appreciation amount.
11            (A) If the fair market value of property referred
12        to in paragraph (1) was readily ascertainable on
13        August 1, 1969, the pre-August 1, 1969 appreciation
14        amount for such property is the lesser of (i) the
15        excess of such fair market value over the taxpayer's
16        basis (for determining gain) for such property on that
17        date (determined under the Internal Revenue Code as in
18        effect on that date), or (ii) the total gain realized
19        and reportable for federal income tax purposes in
20        respect of the sale, exchange or other disposition of
21        such property.
22            (B) If the fair market value of property referred
23        to in paragraph (1) was not readily ascertainable on
24        August 1, 1969, the pre-August 1, 1969 appreciation
25        amount for such property is that amount which bears
26        the same ratio to the total gain reported in respect of

 

 

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1        the property for federal income tax purposes for the
2        taxable year, as the number of full calendar months in
3        that part of the taxpayer's holding period for the
4        property ending July 31, 1969 bears to the number of
5        full calendar months in the taxpayer's entire holding
6        period for the property.
7            (C) The Department shall prescribe such
8        regulations as may be necessary to carry out the
9        purposes of this paragraph.
 
10    (g) Double deductions. Unless specifically provided
11otherwise, nothing in this Section shall permit the same item
12to be deducted more than once.
 
13    (h) Legislative intention. Except as expressly provided by
14this Section there shall be no modifications or limitations on
15the amounts of income, gain, loss or deduction taken into
16account in determining gross income, adjusted gross income or
17taxable income for federal income tax purposes for the taxable
18year, or in the amount of such items entering into the
19computation of base income and net income under this Act for
20such taxable year, whether in respect of property values as of
21August 1, 1969 or otherwise.
22(Source: P.A. 101-9, eff. 6-5-19; 101-81, eff. 7-12-19;
23102-16, eff. 6-17-21; 102-558, eff. 8-20-21; 102-658, eff.
248-27-21; revised 10-14-21.)
 

 

 

HB4705- 104 -LRB102 23056 HLH 32212 b

1    (35 ILCS 5/207)  (from Ch. 120, par. 2-207)
2    Sec. 207. Net Losses.
3    (a) If after applying all of the (i) modifications
4provided for in paragraph (2) of Section 203(b), paragraph (2)
5of Section 203(c) and paragraph (2) of Section 203(d) and (ii)
6the allocation and apportionment provisions of Article 3 of
7this Act and subsection (c) of this Section, the taxpayer's
8net income results in a loss;
9        (1) for any taxable year ending prior to December 31,
10    1999, such loss shall be allowed as a carryover or
11    carryback deduction in the manner allowed under Section
12    172 of the Internal Revenue Code;
13        (2) for any taxable year ending on or after December
14    31, 1999 and prior to December 31, 2003, such loss shall be
15    allowed as a carryback to each of the 2 taxable years
16    preceding the taxable year of such loss and shall be a net
17    operating loss carryover to each of the 20 taxable years
18    following the taxable year of such loss;
19        (3) for any taxable year ending on or after December
20    31, 2003 and prior to December 31, 2021, such loss shall be
21    allowed as a net operating loss carryover to each of the 12
22    taxable years following the taxable year of such loss,
23    except as provided in subsection (d); and
24        (4) for any taxable year ending on or after December
25    31, 2021, and for any net loss incurred in a taxable year

 

 

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1    prior to a taxable year ending on or after December 31,
2    2021 for which the statute of limitation for utilization
3    of such net loss has not expired, such loss shall be
4    allowed as a net operating loss carryover to each of the 20
5    taxable years following the taxable year of such loss,
6    except as provided in subsection (d).
7    (a-5) Election to relinquish carryback and order of
8application of losses.
9            (A) For losses incurred in tax years ending prior
10        to December 31, 2003, the taxpayer may elect to
11        relinquish the entire carryback period with respect to
12        such loss. Such election shall be made in the form and
13        manner prescribed by the Department and shall be made
14        by the due date (including extensions of time) for
15        filing the taxpayer's return for the taxable year in
16        which such loss is incurred, and such election, once
17        made, shall be irrevocable.
18            (B) The entire amount of such loss shall be
19        carried to the earliest taxable year to which such
20        loss may be carried. The amount of such loss which
21        shall be carried to each of the other taxable years
22        shall be the excess, if any, of the amount of such loss
23        over the sum of the deductions for carryback or
24        carryover of such loss allowable for each of the prior
25        taxable years to which such loss may be carried.
26    (b) Any loss determined under subsection (a) of this

 

 

HB4705- 106 -LRB102 23056 HLH 32212 b

1Section must be carried back or carried forward in the same
2manner for purposes of subsections (a) and (b) of Section 201
3of this Act as for purposes of subsections (c) and (d) of
4Section 201 of this Act.
5    (c) Notwithstanding any other provision of this Act, for
6each taxable year ending on or after December 31, 2008, for
7purposes of computing the loss for the taxable year under
8subsection (a) of this Section and the deduction taken into
9account for the taxable year for a net operating loss
10carryover under paragraphs (1), (2), and (3) of subsection (a)
11of this Section, the loss and net operating loss carryover
12shall be reduced in an amount equal to the reduction to the net
13operating loss and net operating loss carryover to the taxable
14year, respectively, required under Section 108(b)(2)(A) of the
15Internal Revenue Code, multiplied by a fraction, the numerator
16of which is the amount of discharge of indebtedness income
17that is excluded from gross income for the taxable year (but
18only if the taxable year ends on or after December 31, 2008)
19under Section 108(a) of the Internal Revenue Code and that
20would have been allocated and apportioned to this State under
21Article 3 of this Act but for that exclusion, and the
22denominator of which is the total amount of discharge of
23indebtedness income excluded from gross income under Section
24108(a) of the Internal Revenue Code for the taxable year. The
25reduction required under this subsection (c) shall be made
26after the determination of Illinois net income for the taxable

 

 

HB4705- 107 -LRB102 23056 HLH 32212 b

1year in which the indebtedness is discharged.
2    (d) In the case of a corporation (other than a Subchapter S
3corporation), no carryover deduction shall be allowed under
4this Section for any taxable year ending after December 31,
52010 and prior to December 31, 2012, and no carryover
6deduction shall exceed $100,000 for any taxable year ending on
7or after December 31, 2012 and prior to December 31, 2014 and
8for any taxable year ending on or after December 31, 2021 and
9prior to December 31, 2024; provided that, for purposes of
10determining the taxable years to which a net loss may be
11carried under subsection (a) of this Section, no taxable year
12for which a deduction is disallowed under this subsection, or
13for which the deduction would exceed $100,000 if not for this
14subsection, shall be counted.
15    (e) In the case of a residual interest holder in a real
16estate mortgage investment conduit subject to Section 860E of
17the Internal Revenue Code, the net loss in subsection (a)
18shall be equal to:
19        (1) the amount computed under subsection (a), without
20    regard to this subsection (e), or if that amount is
21    positive, zero;
22        (2) minus an amount equal to the amount computed under
23    subsection (a), without regard to this subsection (e),
24    minus the amount that would be computed under subsection
25    (a) if the taxpayer's federal taxable income were computed
26    without regard to Section 860E of the Internal Revenue

 

 

HB4705- 108 -LRB102 23056 HLH 32212 b

1    Code and without regard to this subsection (e).
2    The modification in this subsection (e) is exempt from the
3provisions of Section 250.
4(Source: P.A. 102-16, eff. 6-17-21; 102-669, eff. 11-16-21.)
 
5    Section 10. The Illinois Estate and Generation-Skipping
6Transfer Tax Act is amended by changing Sections 2, 3, and 4 as
7follows:
 
8    (35 ILCS 405/2)  (from Ch. 120, par. 405A-2)
9    Sec. 2. Definitions.
10    "Federal estate tax" means the tax due to the United
11States with respect to a taxable transfer under Chapter 11 of
12the Internal Revenue Code.
13    "Federal generation-skipping transfer tax" means the tax
14due to the United States with respect to a taxable transfer
15under Chapter 13 of the Internal Revenue Code.
16    "Federal return" means the federal estate tax return with
17respect to the federal estate tax and means the federal
18generation-skipping transfer tax return with respect to the
19federal generation-skipping transfer tax.
20    "Federal transfer tax" means the federal estate tax or the
21federal generation-skipping transfer tax.
22    "Illinois estate tax" means the tax due to this State with
23respect to a taxable transfer.
24    "Illinois generation-skipping transfer tax" means the tax

 

 

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1due to this State with respect to a taxable transfer that gives
2rise to a federal generation-skipping transfer tax.
3    "Illinois transfer tax" means the Illinois estate tax or
4the Illinois generation-skipping transfer tax.
5    "Internal Revenue Code" means, unless otherwise provided,
6the Internal Revenue Code of 1986, as amended from time to
7time.
8    "Non-resident trust" means a trust that is not a resident
9of this State for purposes of the Illinois Income Tax Act, as
10amended from time to time.
11    "Person" means and includes any individual, trust, estate,
12partnership, association, company or corporation.
13    "Qualified heir" means a qualified heir as defined in
14Section 2032A(e)(1) of the Internal Revenue Code.
15    "Resident trust" means a trust that is a resident of this
16State for purposes of the Illinois Income Tax Act, as amended
17from time to time.
18    "State" means any state, territory or possession of the
19United States and the District of Columbia.
20    "State tax credit" means:
21    (a) For persons dying on or after January 1, 2003 and
22through December 31, 2005, an amount equal to the full credit
23calculable under Section 2011 or Section 2604 of the Internal
24Revenue Code as the credit would have been computed and
25allowed under the Internal Revenue Code as in effect on
26December 31, 2001, without the reduction in the State Death

 

 

HB4705- 110 -LRB102 23056 HLH 32212 b

1Tax Credit as provided in Section 2011(b)(2) or the
2termination of the State Death Tax Credit as provided in
3Section 2011(f) as enacted by the Economic Growth and Tax
4Relief Reconciliation Act of 2001, but recognizing the
5increased applicable exclusion amount through December 31,
62005.
7    (b) For persons dying after December 31, 2005 and on or
8before December 31, 2009, and for persons dying after December
931, 2010 and prior to the effective date of this amendatory Act
10of the 102nd General Assembly, an amount equal to the full
11credit calculable under Section 2011 or 2604 of the Internal
12Revenue Code as the credit would have been computed and
13allowed under the Internal Revenue Code as in effect on
14December 31, 2001, without the reduction in the State Death
15Tax Credit as provided in Section 2011(b)(2) or the
16termination of the State Death Tax Credit as provided in
17Section 2011(f) as enacted by the Economic Growth and Tax
18Relief Reconciliation Act of 2001, but recognizing the
19exclusion amount of only (i) $2,000,000 for persons dying
20prior to January 1, 2012, (ii) $3,500,000 for persons dying on
21or after January 1, 2012 and prior to January 1, 2013, and
22(iii) $4,000,000 for persons dying on or after January 1,
232013, and with reduction to the adjusted taxable estate for
24any qualified terminable interest property election as defined
25in subsection (b-1) of this Section.
26    (b-1) The person required to file the Illinois return may

 

 

HB4705- 111 -LRB102 23056 HLH 32212 b

1elect on a timely filed Illinois return a marital deduction
2for qualified terminable interest property under Section
32056(b)(7) of the Internal Revenue Code for purposes of the
4Illinois estate tax that is separate and independent of any
5qualified terminable interest property election for federal
6estate tax purposes. For purposes of the Illinois estate tax,
7the inclusion of property in the gross estate of a surviving
8spouse is the same as under Section 2044 of the Internal
9Revenue Code.
10    In the case of any trust for which a State or federal
11qualified terminable interest property election is made, the
12trustee may not retain non-income producing assets for more
13than a reasonable amount of time without the consent of the
14surviving spouse.
15    "Taxable transfer" means an event that gives rise to a
16state tax credit, including any credit as a result of the
17imposition of an additional tax under Section 2032A(c) of the
18Internal Revenue Code.
19    "Transferee" means a transferee within the meaning of
20Section 2603(a)(1) and Section 6901(h) of the Internal Revenue
21Code.
22    "Transferred property" means:
23        (1) With respect to a taxable transfer occurring at
24    the death of an individual, the deceased individual's
25    gross estate as defined in Section 2031 of the Internal
26    Revenue Code.

 

 

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1        (2) With respect to a taxable transfer occurring as a
2    result of a taxable termination as defined in Section
3    2612(a) of the Internal Revenue Code, the taxable amount
4    determined under Section 2622(a) of the Internal Revenue
5    Code.
6        (3) With respect to a taxable transfer occurring as a
7    result of a taxable distribution as defined in Section
8    2612(b) of the Internal Revenue Code, the taxable amount
9    determined under Section 2621(a) of the Internal Revenue
10    Code.
11        (4) With respect to an event which causes the
12    imposition of an additional estate tax under Section
13    2032A(c) of the Internal Revenue Code, the qualified real
14    property that was disposed of or which ceased to be used
15    for the qualified use, within the meaning of Section
16    2032A(c)(1) of the Internal Revenue Code.
17    "Trust" includes a trust as defined in Section 2652(b)(1)
18of the Internal Revenue Code.
19(Source: P.A. 96-789, eff. 9-8-09; 96-1496, eff. 1-13-11;
2097-636, eff. 6-1-12.)
 
21    (35 ILCS 405/3)  (from Ch. 120, par. 405A-3)
22    Sec. 3. Illinois estate tax.
23    (a) Imposition of Tax. An Illinois estate tax is imposed
24on every taxable transfer involving transferred property
25having a tax situs within the State of Illinois.

 

 

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1    (b) Amount of tax. On estates of persons dying before
2January 1, 2003, the amount of the Illinois estate tax shall be
3the state tax credit, as defined in Section 2 of this Act, with
4respect to the taxable transfer reduced by the lesser of:
5        (1) the amount of the state tax credit paid to any
6    other state or states; and
7        (2) the amount determined by multiplying the maximum
8    state tax credit allowable with respect to the taxable
9    transfer by the percentage which the gross value of the
10    transferred property not having a tax situs in Illinois
11    bears to the gross value of the total transferred
12    property.
13    (c) On estates of persons dying on or after January 1, 2003
14and prior to the effective date of this amendatory Act of the
15102nd General Assembly, the amount of the Illinois estate tax
16shall be the state tax credit, as defined in Section 2 of this
17Act, reduced by the amount determined by multiplying the state
18tax credit with respect to the taxable transfer by the
19percentage which the gross value of the transferred property
20not having a tax situs in Illinois bears to the gross value of
21the total transferred property.
22    (d) No tax shall be imposed under this Act for persons
23dying on or after the effective date of this amendatory Act of
24the 102nd General Assembly.
25(Source: P.A. 93-30, eff. 6-20-03; 94-419, eff. 8-2-05.)
 

 

 

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1    (35 ILCS 405/4)  (from Ch. 120, par. 405A-4)
2    Sec. 4. Illinois generation-skipping transfer tax.
3    (a) Imposition of tax. An Illinois generation-skipping
4transfer tax is imposed on every taxable transfer resulting in
5federal generation-skipping transfer tax involving transferred
6property having a tax situs within the State of Illinois.
7    (b) Amount of tax. The amount of the Illinois
8generation-skipping transfer tax shall be the maximum state
9tax credit allowable with respect to the taxable transfer,
10reduced by the lesser of:
11        (1) the amount of the state tax credit paid to any
12    other state or states; and
13        (2) the amount determined by multiplying the maximum
14    state tax credit allowable with respect to the taxable
15    transfer by the percentage which the gross value of the
16    transferred property not having a tax situs in Illinois
17    bears to the gross value of the total transferred
18    property.
19    (c) No tax shall be imposed under this Act for transfers
20occurring on or after the effective date of this amendatory
21Act of the 102nd General Assembly.
22(Source: P.A. 86-737.)
 
23    Section 15. The Business Corporation Act of 1983 is
24amended by changing Sections 15.35 and 15.65 as follows:
 

 

 

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1    (805 ILCS 5/15.35)  (from Ch. 32, par. 15.35)
2    (Text of Section from P.A. 102-16)
3    Sec. 15.35. Franchise taxes payable by domestic
4corporations. For the privilege of exercising its franchises
5in this State, each domestic corporation shall pay to the
6Secretary of State the following franchise taxes, computed on
7the basis, at the rates and for the periods prescribed in this
8Act:
9        (a) An initial franchise tax at the time of filing its
10    first report of issuance of shares.
11        (b) An additional franchise tax at the time of filing
12    (1) a report of the issuance of additional shares, or (2) a
13    report of an increase in paid-in capital without the
14    issuance of shares, or (3) an amendment to the articles of
15    incorporation or a report of cumulative changes in paid-in
16    capital, whenever any amendment or such report discloses
17    an increase in its paid-in capital over the amount thereof
18    last reported in any document, other than an annual
19    report, interim annual report or final transition annual
20    report required by this Act to be filed in the office of
21    the Secretary of State.
22        (c) An additional franchise tax at the time of filing
23    a report of paid-in capital following a statutory merger
24    or consolidation, which discloses that the paid-in capital
25    of the surviving or new corporation immediately after the
26    merger or consolidation is greater than the sum of the

 

 

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1    paid-in capital of all of the merged or consolidated
2    corporations as last reported by them in any documents,
3    other than annual reports, required by this Act to be
4    filed in the office of the Secretary of State; and in
5    addition, the surviving or new corporation shall be liable
6    for a further additional franchise tax on the paid-in
7    capital of each of the merged or consolidated corporations
8    as last reported by them in any document, other than an
9    annual report, required by this Act to be filed with the
10    Secretary of State from their taxable year end to the next
11    succeeding anniversary month or, in the case of a
12    corporation which has established an extended filing
13    month, the extended filing month of the surviving or new
14    corporation; however if the taxable year ends within the
15    2-month period immediately preceding the anniversary month
16    or, in the case of a corporation which has established an
17    extended filing month, the extended filing month of the
18    surviving or new corporation the tax will be computed to
19    the anniversary month or, in the case of a corporation
20    which has established an extended filing month, the
21    extended filing month of the surviving or new corporation
22    in the next succeeding calendar year.
23        (d) An annual franchise tax payable each year with the
24    annual report which the corporation is required by this
25    Act to file.
26    On or after January 1, 2020 and prior to January 1, 2021,

 

 

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1the first $30 in liability is exempt from the tax imposed under
2this Section. On or after January 1, 2021 and prior to January
31, 2022, the first $1,000 in liability is exempt from the tax
4imposed under this Section. On or after January 1, 2022 and
5prior to January 1, 2023, the first $10,000 in liability is
6exempt from the tax imposed under this Section. On or after
7January 1, 2023 and prior to January 1, 2024, the first
8$100,000 in liability is exempt from the tax imposed under
9this Section. The provisions of this Section shall not require
10the payment of any franchise tax that would otherwise have
11been due and payable on or after January 1, 2024. There shall
12be no refunds or proration of franchise tax for any taxes due
13and payable on or after January 1, 2024 on the basis that a
14portion of the corporation's taxable year extends beyond
15January 1, 2024. Public Act 101-9 shall not affect any right
16accrued or established, or any liability or penalty incurred
17prior to January 1, 2024.
18    This Section is repealed on December 31, 2024.
19(Source: P.A. 101-9, eff. 6-5-19; 102-16, eff. 6-17-21.)
 
20    (Text of Section from P.A. 102-282)
21    Sec. 15.35. Franchise taxes payable by domestic
22corporations. For the privilege of exercising its franchises
23in this State, each domestic corporation shall pay to the
24Secretary of State the following franchise taxes, computed on
25the basis, at the rates and for the periods prescribed in this

 

 

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1Act:
2        (a) An initial franchise tax at the time of filing its
3    first report of issuance of shares.
4        (b) An additional franchise tax at the time of filing
5    (1) a report of the issuance of additional shares, or (2) a
6    report of an increase in paid-in capital without the
7    issuance of shares, or (3) an amendment to the articles of
8    incorporation or a report of cumulative changes in paid-in
9    capital, whenever any amendment or such report discloses
10    an increase in its paid-in capital over the amount thereof
11    last reported in any document, other than an annual
12    report, interim annual report or final transition annual
13    report required by this Act to be filed in the office of
14    the Secretary of State.
15        (c) An additional franchise tax at the time of filing
16    a report of paid-in capital following a statutory merger
17    or consolidation, which discloses that the paid-in capital
18    of the surviving or new corporation immediately after the
19    merger or consolidation is greater than the sum of the
20    paid-in capital of all of the merged or consolidated
21    corporations as last reported by them in any documents,
22    other than annual reports, required by this Act to be
23    filed in the office of the Secretary of State; and in
24    addition, the surviving or new corporation shall be liable
25    for a further additional franchise tax on the paid-in
26    capital of each of the merged or consolidated corporations

 

 

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1    as last reported by them in any document, other than an
2    annual report, required by this Act to be filed with the
3    Secretary of State from their taxable year end to the next
4    succeeding anniversary month or, in the case of a
5    corporation which has established an extended filing
6    month, the extended filing month of the surviving or new
7    corporation; however if the taxable year ends within the
8    2-month period immediately preceding the anniversary month
9    or, in the case of a corporation which has established an
10    extended filing month, the extended filing month of the
11    surviving or new corporation the tax will be computed to
12    the anniversary month or, in the case of a corporation
13    which has established an extended filing month, the
14    extended filing month of the surviving or new corporation
15    in the next succeeding calendar year.
16        (d) An annual franchise tax payable each year with the
17    annual report which the corporation is required by this
18    Act to file.
19    On or after January 1, 2020 and prior to January 1, 2021,
20the first $30 in liability is exempt from the tax imposed under
21this Section. On or after January 1, 2021 and prior to January
221, 2022, the first $1,000 in liability is exempt from the tax
23imposed under this Section. On or after January 1, 2022 and
24prior to January 1, 2023, the first $10,000 in liability is
25exempt from the tax imposed under this Section. On or after
26January 1, 2023 and prior to January 1, 2024, the first

 

 

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1$100,000 in liability is exempt from the tax imposed under
2this Section. The provisions of this Section shall not require
3the payment of any franchise tax that would otherwise have
4been due and payable on or after January 1, 2024. There shall
5be no refunds or proration of franchise tax for any taxes due
6and payable on or after January 1, 2024 on the basis that a
7portion of the corporation's taxable year extends beyond
8January 1, 2024. Public Act 101-9 shall not affect any right
9accrued or established, or any liability or penalty incurred
10prior to January 1, 2024.
11    This Section is repealed on December 31, 2024.
12(Source: P.A. 101-9, eff. 6-5-19; 102-282, eff. 1-1-22.)
 
13    (Text of Section from P.A. 102-558)
14    Sec. 15.35. Franchise taxes payable by domestic
15corporations. For the privilege of exercising its franchises
16in this State, each domestic corporation shall pay to the
17Secretary of State the following franchise taxes, computed on
18the basis, at the rates and for the periods prescribed in this
19Act:
20        (a) An initial franchise tax at the time of filing its
21    first report of issuance of shares.
22        (b) An additional franchise tax at the time of filing
23    (1) a report of the issuance of additional shares, or (2) a
24    report of an increase in paid-in capital without the
25    issuance of shares, or (3) an amendment to the articles of

 

 

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1    incorporation or a report of cumulative changes in paid-in
2    capital, whenever any amendment or such report discloses
3    an increase in its paid-in capital over the amount thereof
4    last reported in any document, other than an annual
5    report, interim annual report or final transition annual
6    report required by this Act to be filed in the office of
7    the Secretary of State.
8        (c) An additional franchise tax at the time of filing
9    a report of paid-in capital following a statutory merger
10    or consolidation, which discloses that the paid-in capital
11    of the surviving or new corporation immediately after the
12    merger or consolidation is greater than the sum of the
13    paid-in capital of all of the merged or consolidated
14    corporations as last reported by them in any documents,
15    other than annual reports, required by this Act to be
16    filed in the office of the Secretary of State; and in
17    addition, the surviving or new corporation shall be liable
18    for a further additional franchise tax on the paid-in
19    capital of each of the merged or consolidated corporations
20    as last reported by them in any document, other than an
21    annual report, required by this Act to be filed with the
22    Secretary of State from their taxable year end to the next
23    succeeding anniversary month or, in the case of a
24    corporation which has established an extended filing
25    month, the extended filing month of the surviving or new
26    corporation; however if the taxable year ends within the

 

 

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1    2-month period immediately preceding the anniversary month
2    or, in the case of a corporation which has established an
3    extended filing month, the extended filing month of the
4    surviving or new corporation the tax will be computed to
5    the anniversary month or, in the case of a corporation
6    which has established an extended filing month, the
7    extended filing month of the surviving or new corporation
8    in the next succeeding calendar year.
9        (d) An annual franchise tax payable each year with the
10    annual report which the corporation is required by this
11    Act to file.
12    On or after January 1, 2020 and prior to January 1, 2021,
13the first $30 in liability is exempt from the tax imposed under
14this Section. On or after January 1, 2021 and prior to January
151, 2022, the first $1,000 in liability is exempt from the tax
16imposed under this Section. On or after January 1, 2022 and
17prior to January 1, 2023, the first $10,000 in liability is
18exempt from the tax imposed under this Section. On or after
19January 1, 2023 and prior to January 1, 2024, the first
20$100,000 in liability is exempt from the tax imposed under
21this Section. The provisions of this Section shall not require
22the payment of any franchise tax that would otherwise have
23been due and payable on or after January 1, 2024. There shall
24be no refunds or proration of franchise tax for any taxes due
25and payable on or after January 1, 2024 on the basis that a
26portion of the corporation's taxable year extends beyond

 

 

HB4705- 123 -LRB102 23056 HLH 32212 b

1January 1, 2024. Public Act 101-9 shall not affect any right
2accrued or established, or any liability or penalty incurred
3prior to January 1, 2024.
4    This Section is repealed on December 31, 2024 December 31,
52025.
6(Source: P.A. 101-9, eff. 6-5-19; 102-558, eff. 8-20-21.)
 
7    (805 ILCS 5/15.65)  (from Ch. 32, par. 15.65)
8    (Section scheduled to be repealed on December 31, 2024)
9    Sec. 15.65. Franchise taxes payable by foreign
10corporations. For the privilege of exercising its authority to
11transact such business in this State as set out in its
12application therefor or any amendment thereto, each foreign
13corporation shall pay to the Secretary of State the following
14franchise taxes, computed on the basis, at the rates and for
15the periods prescribed in this Act:
16        (a) An initial franchise tax at the time of filing its
17    application for authority to transact business in this
18    State.
19        (b) An additional franchise tax at the time of filing
20    (1) a report of the issuance of additional shares, or (2) a
21    report of an increase in paid-in capital without the
22    issuance of shares, or (3) a report of cumulative changes
23    in paid-in capital or a report of an exchange or
24    reclassification of shares, whenever any such report
25    discloses an increase in its paid-in capital over the

 

 

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1    amount thereof last reported in any document, other than
2    an annual report, interim annual report or final
3    transition annual report, required by this Act to be filed
4    in the office of the Secretary of State.
5        (c) Whenever the corporation shall be a party to a
6    statutory merger and shall be the surviving corporation,
7    an additional franchise tax at the time of filing its
8    report following merger, if such report discloses that the
9    amount represented in this State of its paid-in capital
10    immediately after the merger is greater than the aggregate
11    of the amounts represented in this State of the paid-in
12    capital of such of the merged corporations as were
13    authorized to transact business in this State at the time
14    of the merger, as last reported by them in any documents,
15    other than annual reports, required by this Act to be
16    filed in the office of the Secretary of State; and in
17    addition, the surviving corporation shall be liable for a
18    further additional franchise tax on the paid-in capital of
19    each of the merged corporations as last reported by them
20    in any document, other than an annual report, required by
21    this Act to be filed with the Secretary of State, from
22    their taxable year end to the next succeeding anniversary
23    month or, in the case of a corporation which has
24    established an extended filing month, the extended filing
25    month of the surviving corporation; however if the taxable
26    year ends within the 2-month period immediately preceding

 

 

HB4705- 125 -LRB102 23056 HLH 32212 b

1    the anniversary month or the extended filing month of the
2    surviving corporation, the tax will be computed to the
3    anniversary or, extended filing month of the surviving
4    corporation in the next succeeding calendar year.
5        (d) An annual franchise tax payable each year with any
6    annual report which the corporation is required by this
7    Act to file.
8    On or after January 1, 2020 and prior to January 1, 2021,
9the first $30 in liability is exempt from the tax imposed under
10this Section. On or after January 1, 2021 and prior to January
111, 2022, the first $1,000 in liability is exempt from the tax
12imposed under this Section. On or after January 1, 2022 and
13prior to January 1, 2023, the first $10,000 in liability is
14exempt from the tax imposed under this Section. On or after
15January 1, 2023 and prior to January 1, 2024, the first
16$100,000 in liability is exempt from the tax imposed under
17this Section. The provisions of this Section shall not require
18the payment of any franchise tax that would otherwise have
19been due and payable on or after January 1, 2024. There shall
20be no refunds or proration of franchise tax for any taxes due
21and payable on or after January 1, 2024 on the basis that a
22portion of the corporation's taxable year extends beyond
23January 1, 2024. Public Act 101-9 shall not affect any right
24accrued or established, or any liability or penalty incurred
25prior to January 1, 2024.
26    This Section is repealed on December 31, 2024. Public Act

 

 

HB4705- 126 -LRB102 23056 HLH 32212 b

1101-9
2(Source: P.A. 101-9, eff. 6-5-19; 102-16, eff. 6-17-21;
3102-558, eff. 8-20-21; revised 10-21-21.)
 
4    Section 99. Effective date. This Act takes effect upon
5becoming law.