|
| | 102ND GENERAL ASSEMBLY
State of Illinois
2021 and 2022 SB2531 Introduced 2/26/2021, by Sen. Win Stoller SYNOPSIS AS INTRODUCED: |
| 35 ILCS 5/201 | | 35 ILCS 5/203 | from Ch. 120, par. 2-203 | 35 ILCS 5/601 | from Ch. 120, par. 6-601 | 35 ILCS 5/709.5 | | 35 ILCS 5/1501 | from Ch. 120, par. 15-1501 |
|
Amends the Illinois Income Tax Act. Provides that a partnership or Subchapter S corporation may elect to pay a tax computed by multiplying the share of business income apportionable to Illinois and nonbusiness income allocated to Illinois that is distributable to each partner or shareholder and multiplied by the applicable rates of tax for that partner or shareholder. Creates a deduction in an amount equal to those amounts. Effective immediately.
|
| |
| | | FISCAL NOTE ACT MAY APPLY | |
| | A BILL FOR |
|
|
| | SB2531 | | LRB102 15312 HLH 20668 b |
|
|
1 | | AN ACT concerning revenue.
|
2 | | Be it enacted by the People of the State of Illinois,
|
3 | | represented in the General Assembly:
|
4 | | Section 5. The Illinois Income Tax Act is amended by |
5 | | changing Sections 201, 203, 601, 709.5, and 1501 as follows:
|
6 | | (35 ILCS 5/201)
|
7 | | (Text of Section without the changes made by P.A. 101-8, |
8 | | which did not take effect (see Section 99 of P.A. 101-8)) |
9 | | Sec. 201. Tax imposed. |
10 | | (a) In general. A tax measured by net income is hereby |
11 | | imposed on every
individual, corporation, trust and estate for |
12 | | each taxable year ending
after July 31, 1969 on the privilege |
13 | | of earning or receiving income in or
as a resident of this |
14 | | State. Such tax shall be in addition to all other
occupation or |
15 | | privilege taxes imposed by this State or by any municipal
|
16 | | corporation or political subdivision thereof. |
17 | | (b) Rates. The tax imposed by subsection (a) of this |
18 | | Section shall be
determined as follows, except as adjusted by |
19 | | subsection (d-1): |
20 | | (1) In the case of an individual, trust or estate, for |
21 | | taxable years
ending prior to July 1, 1989, an amount |
22 | | equal to 2 1/2% of the taxpayer's
net income for the |
23 | | taxable year. |
|
| | SB2531 | - 2 - | LRB102 15312 HLH 20668 b |
|
|
1 | | (2) In the case of an individual, trust or estate, for |
2 | | taxable years
beginning prior to July 1, 1989 and ending |
3 | | after June 30, 1989, an amount
equal to the sum of (i) 2 |
4 | | 1/2% of the taxpayer's net income for the period
prior to |
5 | | July 1, 1989, as calculated under Section 202.3, and (ii) |
6 | | 3% of the
taxpayer's net income for the period after June |
7 | | 30, 1989, as calculated
under Section 202.3. |
8 | | (3) In the case of an individual, trust or estate, for |
9 | | taxable years
beginning after June 30, 1989, and ending |
10 | | prior to January 1, 2011, an amount equal to 3% of the |
11 | | taxpayer's net
income for the taxable year. |
12 | | (4) In the case of an individual, trust, or estate, |
13 | | for taxable years beginning prior to January 1, 2011, and |
14 | | ending after December 31, 2010, an amount equal to the sum |
15 | | of (i) 3% of the taxpayer's net income for the period prior |
16 | | to January 1, 2011, as calculated under Section 202.5, and |
17 | | (ii) 5% of the taxpayer's net income for the period after |
18 | | December 31, 2010, as calculated under Section 202.5. |
19 | | (5) In the case of an individual, trust, or estate, |
20 | | for taxable years beginning on or after January 1, 2011, |
21 | | and ending prior to January 1, 2015, an amount equal to 5% |
22 | | of the taxpayer's net income for the taxable year. |
23 | | (5.1) In the case of an individual, trust, or estate, |
24 | | for taxable years beginning prior to January 1, 2015, and |
25 | | ending after December 31, 2014, an amount equal to the sum |
26 | | of (i) 5% of the taxpayer's net income for the period prior |
|
| | SB2531 | - 3 - | LRB102 15312 HLH 20668 b |
|
|
1 | | to January 1, 2015, as calculated under Section 202.5, and |
2 | | (ii) 3.75% of the taxpayer's net income for the period |
3 | | after December 31, 2014, as calculated under Section |
4 | | 202.5. |
5 | | (5.2) In the case of an individual, trust, or estate, |
6 | | for taxable years beginning on or after January 1, 2015, |
7 | | and ending prior to July 1, 2017, an amount equal to 3.75% |
8 | | of the taxpayer's net income for the taxable year. |
9 | | (5.3) In the case of an individual, trust, or estate, |
10 | | for taxable years beginning prior to July 1, 2017, and |
11 | | ending after June 30, 2017, an amount equal to the sum of |
12 | | (i) 3.75% of the taxpayer's net income for the period |
13 | | prior to July 1, 2017, as calculated under Section 202.5, |
14 | | and (ii) 4.95% of the taxpayer's net income for the period |
15 | | after June 30, 2017, as calculated under Section 202.5. |
16 | | (5.4) In the case of an individual, trust, or estate, |
17 | | for taxable years beginning on or after July 1, 2017, an |
18 | | amount equal to 4.95% of the taxpayer's net income for the |
19 | | taxable year. |
20 | | (6) In the case of a corporation, for taxable years
|
21 | | ending prior to July 1, 1989, an amount equal to 4% of the
|
22 | | taxpayer's net income for the taxable year. |
23 | | (7) In the case of a corporation, for taxable years |
24 | | beginning prior to
July 1, 1989 and ending after June 30, |
25 | | 1989, an amount equal to the sum of
(i) 4% of the |
26 | | taxpayer's net income for the period prior to July 1, |
|
| | SB2531 | - 4 - | LRB102 15312 HLH 20668 b |
|
|
1 | | 1989,
as calculated under Section 202.3, and (ii) 4.8% of |
2 | | the taxpayer's net
income for the period after June 30, |
3 | | 1989, as calculated under Section
202.3. |
4 | | (8) In the case of a corporation, for taxable years |
5 | | beginning after
June 30, 1989, and ending prior to January |
6 | | 1, 2011, an amount equal to 4.8% of the taxpayer's net |
7 | | income for the
taxable year. |
8 | | (9) In the case of a corporation, for taxable years |
9 | | beginning prior to January 1, 2011, and ending after |
10 | | December 31, 2010, an amount equal to the sum of (i) 4.8% |
11 | | of the taxpayer's net income for the period prior to |
12 | | January 1, 2011, as calculated under Section 202.5, and |
13 | | (ii) 7% of the taxpayer's net income for the period after |
14 | | December 31, 2010, as calculated under Section 202.5. |
15 | | (10) In the case of a corporation, for taxable years |
16 | | beginning on or after January 1, 2011, and ending prior to |
17 | | January 1, 2015, an amount equal to 7% of the taxpayer's |
18 | | net income for the taxable year. |
19 | | (11) In the case of a corporation, for taxable years |
20 | | beginning prior to January 1, 2015, and ending after |
21 | | December 31, 2014, an amount equal to the sum of (i) 7% of |
22 | | the taxpayer's net income for the period prior to January |
23 | | 1, 2015, as calculated under Section 202.5, and (ii) 5.25% |
24 | | of the taxpayer's net income for the period after December |
25 | | 31, 2014, as calculated under Section 202.5. |
26 | | (12) In the case of a corporation, for taxable years |
|
| | SB2531 | - 5 - | LRB102 15312 HLH 20668 b |
|
|
1 | | beginning on or after January 1, 2015, and ending prior to |
2 | | July 1, 2017, an amount equal to 5.25% of the taxpayer's |
3 | | net income for the taxable year. |
4 | | (13) In the case of a corporation, for taxable years |
5 | | beginning prior to July 1, 2017, and ending after June 30, |
6 | | 2017, an amount equal to the sum of (i) 5.25% of the |
7 | | taxpayer's net income for the period prior to July 1, |
8 | | 2017, as calculated under Section 202.5, and (ii) 7% of |
9 | | the taxpayer's net income for the period after June 30, |
10 | | 2017, as calculated under Section 202.5. |
11 | | (14) In the case of a corporation, for taxable years |
12 | | beginning on or after July 1, 2017, an amount equal to 7% |
13 | | of the taxpayer's net income for the taxable year. |
14 | | The rates under this subsection (b) are subject to the |
15 | | provisions of Section 201.5. |
16 | | (b-5) Surcharge; sale or exchange of assets, properties, |
17 | | and intangibles of organization gaming licensees. For each of |
18 | | taxable years 2019 through 2027, a surcharge is imposed on all |
19 | | taxpayers on income arising from the sale or exchange of |
20 | | capital assets, depreciable business property, real property |
21 | | used in the trade or business, and Section 197 intangibles (i) |
22 | | of an organization licensee under the Illinois Horse Racing |
23 | | Act of 1975 and (ii) of an organization gaming licensee under |
24 | | the Illinois Gambling Act. The amount of the surcharge is |
25 | | equal to the amount of federal income tax liability for the |
26 | | taxable year attributable to those sales and exchanges. The |
|
| | SB2531 | - 6 - | LRB102 15312 HLH 20668 b |
|
|
1 | | surcharge imposed shall not apply if: |
2 | | (1) the organization gaming license, organization |
3 | | license, or racetrack property is transferred as a result |
4 | | of any of the following: |
5 | | (A) bankruptcy, a receivership, or a debt |
6 | | adjustment initiated by or against the initial |
7 | | licensee or the substantial owners of the initial |
8 | | licensee; |
9 | | (B) cancellation, revocation, or termination of |
10 | | any such license by the Illinois Gaming Board or the |
11 | | Illinois Racing Board; |
12 | | (C) a determination by the Illinois Gaming Board |
13 | | that transfer of the license is in the best interests |
14 | | of Illinois gaming; |
15 | | (D) the death of an owner of the equity interest in |
16 | | a licensee; |
17 | | (E) the acquisition of a controlling interest in |
18 | | the stock or substantially all of the assets of a |
19 | | publicly traded company; |
20 | | (F) a transfer by a parent company to a wholly |
21 | | owned subsidiary; or |
22 | | (G) the transfer or sale to or by one person to |
23 | | another person where both persons were initial owners |
24 | | of the license when the license was issued; or |
25 | | (2) the controlling interest in the organization |
26 | | gaming license, organization license, or racetrack |
|
| | SB2531 | - 7 - | LRB102 15312 HLH 20668 b |
|
|
1 | | property is transferred in a transaction to lineal |
2 | | descendants in which no gain or loss is recognized or as a |
3 | | result of a transaction in accordance with Section 351 of |
4 | | the Internal Revenue Code in which no gain or loss is |
5 | | recognized; or |
6 | | (3) live horse racing was not conducted in 2010 at a |
7 | | racetrack located within 3 miles of the Mississippi River |
8 | | under a license issued pursuant to the Illinois Horse |
9 | | Racing Act of 1975. |
10 | | The transfer of an organization gaming license, |
11 | | organization license, or racetrack property by a person other |
12 | | than the initial licensee to receive the organization gaming |
13 | | license is not subject to a surcharge. The Department shall |
14 | | adopt rules necessary to implement and administer this |
15 | | subsection. |
16 | | (c) Personal Property Tax Replacement Income Tax.
|
17 | | Beginning on July 1, 1979 and thereafter, in addition to such |
18 | | income
tax, there is also hereby imposed the Personal Property |
19 | | Tax Replacement
Income Tax measured by net income on every |
20 | | corporation (including Subchapter
S corporations), partnership |
21 | | and trust, for each taxable year ending after
June 30, 1979. |
22 | | Such taxes are imposed on the privilege of earning or
|
23 | | receiving income in or as a resident of this State. The |
24 | | Personal Property
Tax Replacement Income Tax shall be in |
25 | | addition to the income tax imposed
by subsections (a) and (b) |
26 | | of this Section and in addition to all other
occupation or |
|
| | SB2531 | - 8 - | LRB102 15312 HLH 20668 b |
|
|
1 | | privilege taxes imposed by this State or by any municipal
|
2 | | corporation or political subdivision thereof. |
3 | | (d) Additional Personal Property Tax Replacement Income |
4 | | Tax Rates.
The personal property tax replacement income tax |
5 | | imposed by this subsection
and subsection (c) of this Section |
6 | | in the case of a corporation, other
than a Subchapter S |
7 | | corporation and except as adjusted by subsection (d-1),
shall |
8 | | be an additional amount equal to
2.85% of such taxpayer's net |
9 | | income for the taxable year, except that
beginning on January |
10 | | 1, 1981, and thereafter, the rate of 2.85% specified
in this |
11 | | subsection shall be reduced to 2.5%, and in the case of a
|
12 | | partnership, trust or a Subchapter S corporation shall be an |
13 | | additional
amount equal to 1.5% of such taxpayer's net income |
14 | | for the taxable year. |
15 | | (d-1) Rate reduction for certain foreign insurers. In the |
16 | | case of a
foreign insurer, as defined by Section 35A-5 of the |
17 | | Illinois Insurance Code,
whose state or country of domicile |
18 | | imposes on insurers domiciled in Illinois
a retaliatory tax |
19 | | (excluding any insurer
whose premiums from reinsurance assumed |
20 | | are 50% or more of its total insurance
premiums as determined |
21 | | under paragraph (2) of subsection (b) of Section 304,
except |
22 | | that for purposes of this determination premiums from |
23 | | reinsurance do
not include premiums from inter-affiliate |
24 | | reinsurance arrangements),
beginning with taxable years ending |
25 | | on or after December 31, 1999,
the sum of
the rates of tax |
26 | | imposed by subsections (b) and (d) shall be reduced (but not
|
|
| | SB2531 | - 9 - | LRB102 15312 HLH 20668 b |
|
|
1 | | increased) to the rate at which the total amount of tax imposed |
2 | | under this Act,
net of all credits allowed under this Act, |
3 | | shall equal (i) the total amount of
tax that would be imposed |
4 | | on the foreign insurer's net income allocable to
Illinois for |
5 | | the taxable year by such foreign insurer's state or country of
|
6 | | domicile if that net income were subject to all income taxes |
7 | | and taxes
measured by net income imposed by such foreign |
8 | | insurer's state or country of
domicile, net of all credits |
9 | | allowed or (ii) a rate of zero if no such tax is
imposed on |
10 | | such income by the foreign insurer's state of domicile.
For |
11 | | the purposes of this subsection (d-1), an inter-affiliate |
12 | | includes a
mutual insurer under common management. |
13 | | (1) For the purposes of subsection (d-1), in no event |
14 | | shall the sum of the
rates of tax imposed by subsections |
15 | | (b) and (d) be reduced below the rate at
which the sum of: |
16 | | (A) the total amount of tax imposed on such |
17 | | foreign insurer under
this Act for a taxable year, net |
18 | | of all credits allowed under this Act, plus |
19 | | (B) the privilege tax imposed by Section 409 of |
20 | | the Illinois Insurance
Code, the fire insurance |
21 | | company tax imposed by Section 12 of the Fire
|
22 | | Investigation Act, and the fire department taxes |
23 | | imposed under Section 11-10-1
of the Illinois |
24 | | Municipal Code, |
25 | | equals 1.25% for taxable years ending prior to December |
26 | | 31, 2003, or
1.75% for taxable years ending on or after |
|
| | SB2531 | - 10 - | LRB102 15312 HLH 20668 b |
|
|
1 | | December 31, 2003, of the net
taxable premiums written for |
2 | | the taxable year,
as described by subsection (1) of |
3 | | Section 409 of the Illinois Insurance Code.
This paragraph |
4 | | will in no event increase the rates imposed under |
5 | | subsections
(b) and (d). |
6 | | (2) Any reduction in the rates of tax imposed by this |
7 | | subsection shall be
applied first against the rates |
8 | | imposed by subsection (b) and only after the
tax imposed |
9 | | by subsection (a) net of all credits allowed under this |
10 | | Section
other than the credit allowed under subsection (i) |
11 | | has been reduced to zero,
against the rates imposed by |
12 | | subsection (d). |
13 | | This subsection (d-1) is exempt from the provisions of |
14 | | Section 250. |
15 | | (d-2) A partnership or Subchapter S corporation may elect |
16 | | to pay a tax that is imposed on the partnership or Subchapter S |
17 | | corporation. This tax is computed by multiplying the share of |
18 | | business income apportionable to Illinois and nonbusiness |
19 | | income allocated to Illinois under Section 303 of this Act, if |
20 | | this share is not a net loss, that is distributable to each |
21 | | partner or shareholder as multiplied by the applicable rates |
22 | | of tax for that partner or shareholder under subsections (a) |
23 | | through (d) of Section 201 of this Act, and taking the sum of |
24 | | these amounts. This election shall be made on the |
25 | | partnership's or Subchapter S corporation's return filed under |
26 | | Section 502 in such manner as the Department may prescribe. |
|
| | SB2531 | - 11 - | LRB102 15312 HLH 20668 b |
|
|
1 | | (e) Investment credit. A taxpayer shall be allowed a |
2 | | credit
against the Personal Property Tax Replacement Income |
3 | | Tax for
investment in qualified property. |
4 | | (1) A taxpayer shall be allowed a credit equal to .5% |
5 | | of
the basis of qualified property placed in service |
6 | | during the taxable year,
provided such property is placed |
7 | | in service on or after
July 1, 1984. There shall be allowed |
8 | | an additional credit equal
to .5% of the basis of |
9 | | qualified property placed in service during the
taxable |
10 | | year, provided such property is placed in service on or
|
11 | | after July 1, 1986, and the taxpayer's base employment
|
12 | | within Illinois has increased by 1% or more over the |
13 | | preceding year as
determined by the taxpayer's employment |
14 | | records filed with the
Illinois Department of Employment |
15 | | Security. Taxpayers who are new to
Illinois shall be |
16 | | deemed to have met the 1% growth in base employment for
the |
17 | | first year in which they file employment records with the |
18 | | Illinois
Department of Employment Security. The provisions |
19 | | added to this Section by
Public Act 85-1200 (and restored |
20 | | by Public Act 87-895) shall be
construed as declaratory of |
21 | | existing law and not as a new enactment. If,
in any year, |
22 | | the increase in base employment within Illinois over the
|
23 | | preceding year is less than 1%, the additional credit |
24 | | shall be limited to that
percentage times a fraction, the |
25 | | numerator of which is .5% and the denominator
of which is |
26 | | 1%, but shall not exceed .5%. The investment credit shall |
|
| | SB2531 | - 12 - | LRB102 15312 HLH 20668 b |
|
|
1 | | not be
allowed to the extent that it would reduce a |
2 | | taxpayer's liability in any tax
year below zero, nor may |
3 | | any credit for qualified property be allowed for any
year |
4 | | other than the year in which the property was placed in |
5 | | service in
Illinois. For tax years ending on or after |
6 | | December 31, 1987, and on or
before December 31, 1988, the |
7 | | credit shall be allowed for the tax year in
which the |
8 | | property is placed in service, or, if the amount of the |
9 | | credit
exceeds the tax liability for that year, whether it |
10 | | exceeds the original
liability or the liability as later |
11 | | amended, such excess may be carried
forward and applied to |
12 | | the tax liability of the 5 taxable years following
the |
13 | | excess credit years if the taxpayer (i) makes investments |
14 | | which cause
the creation of a minimum of 2,000 full-time |
15 | | equivalent jobs in Illinois,
(ii) is located in an |
16 | | enterprise zone established pursuant to the Illinois
|
17 | | Enterprise Zone Act and (iii) is certified by the |
18 | | Department of Commerce
and Community Affairs (now |
19 | | Department of Commerce and Economic Opportunity) as |
20 | | complying with the requirements specified in
clause (i) |
21 | | and (ii) by July 1, 1986. The Department of Commerce and
|
22 | | Community Affairs (now Department of Commerce and Economic |
23 | | Opportunity) shall notify the Department of Revenue of all |
24 | | such
certifications immediately. For tax years ending |
25 | | after December 31, 1988,
the credit shall be allowed for |
26 | | the tax year in which the property is
placed in service, |
|
| | SB2531 | - 13 - | LRB102 15312 HLH 20668 b |
|
|
1 | | or, if the amount of the credit exceeds the tax
liability |
2 | | for that year, whether it exceeds the original liability |
3 | | or the
liability as later amended, such excess may be |
4 | | carried forward and applied
to the tax liability of the 5 |
5 | | taxable years following the excess credit
years. The |
6 | | credit shall be applied to the earliest year for which |
7 | | there is
a liability. If there is credit from more than one |
8 | | tax year that is
available to offset a liability, earlier |
9 | | credit shall be applied first. |
10 | | (2) The term "qualified property" means property |
11 | | which: |
12 | | (A) is tangible, whether new or used, including |
13 | | buildings and structural
components of buildings and |
14 | | signs that are real property, but not including
land |
15 | | or improvements to real property that are not a |
16 | | structural component of a
building such as |
17 | | landscaping, sewer lines, local access roads, fencing, |
18 | | parking
lots, and other appurtenances; |
19 | | (B) is depreciable pursuant to Section 167 of the |
20 | | Internal Revenue Code,
except that "3-year property" |
21 | | as defined in Section 168(c)(2)(A) of that
Code is not |
22 | | eligible for the credit provided by this subsection |
23 | | (e); |
24 | | (C) is acquired by purchase as defined in Section |
25 | | 179(d) of
the Internal Revenue Code; |
26 | | (D) is used in Illinois by a taxpayer who is |
|
| | SB2531 | - 14 - | LRB102 15312 HLH 20668 b |
|
|
1 | | primarily engaged in
manufacturing, or in mining coal |
2 | | or fluorite, or in retailing, or was placed in service |
3 | | on or after July 1, 2006 in a River Edge Redevelopment |
4 | | Zone established pursuant to the River Edge |
5 | | Redevelopment Zone Act; and |
6 | | (E) has not previously been used in Illinois in |
7 | | such a manner and by
such a person as would qualify for |
8 | | the credit provided by this subsection
(e) or |
9 | | subsection (f). |
10 | | (3) For purposes of this subsection (e), |
11 | | "manufacturing" means
the material staging and production |
12 | | of tangible personal property by
procedures commonly |
13 | | regarded as manufacturing, processing, fabrication, or
|
14 | | assembling which changes some existing material into new |
15 | | shapes, new
qualities, or new combinations. For purposes |
16 | | of this subsection
(e) the term "mining" shall have the |
17 | | same meaning as the term "mining" in
Section 613(c) of the |
18 | | Internal Revenue Code. For purposes of this subsection
|
19 | | (e), the term "retailing" means the sale of tangible |
20 | | personal property for use or consumption and not for |
21 | | resale, or
services rendered in conjunction with the sale |
22 | | of tangible personal property for use or consumption and |
23 | | not for resale. For purposes of this subsection (e), |
24 | | "tangible personal property" has the same meaning as when |
25 | | that term is used in the Retailers' Occupation Tax Act, |
26 | | and, for taxable years ending after December 31, 2008, |
|
| | SB2531 | - 15 - | LRB102 15312 HLH 20668 b |
|
|
1 | | does not include the generation, transmission, or |
2 | | distribution of electricity. |
3 | | (4) The basis of qualified property shall be the basis
|
4 | | used to compute the depreciation deduction for federal |
5 | | income tax purposes. |
6 | | (5) If the basis of the property for federal income |
7 | | tax depreciation
purposes is increased after it has been |
8 | | placed in service in Illinois by
the taxpayer, the amount |
9 | | of such increase shall be deemed property placed
in |
10 | | service on the date of such increase in basis. |
11 | | (6) The term "placed in service" shall have the same
|
12 | | meaning as under Section 46 of the Internal Revenue Code. |
13 | | (7) If during any taxable year, any property ceases to
|
14 | | be qualified property in the hands of the taxpayer within |
15 | | 48 months after
being placed in service, or the situs of |
16 | | any qualified property is
moved outside Illinois within 48 |
17 | | months after being placed in service, the
Personal |
18 | | Property Tax Replacement Income Tax for such taxable year |
19 | | shall be
increased. Such increase shall be determined by |
20 | | (i) recomputing the
investment credit which would have |
21 | | been allowed for the year in which
credit for such |
22 | | property was originally allowed by eliminating such
|
23 | | property from such computation and, (ii) subtracting such |
24 | | recomputed credit
from the amount of credit previously |
25 | | allowed. For the purposes of this
paragraph (7), a |
26 | | reduction of the basis of qualified property resulting
|
|
| | SB2531 | - 16 - | LRB102 15312 HLH 20668 b |
|
|
1 | | from a redetermination of the purchase price shall be |
2 | | deemed a disposition
of qualified property to the extent |
3 | | of such reduction. |
4 | | (8) Unless the investment credit is extended by law, |
5 | | the
basis of qualified property shall not include costs |
6 | | incurred after
December 31, 2018, except for costs |
7 | | incurred pursuant to a binding
contract entered into on or |
8 | | before December 31, 2018. |
9 | | (9) Each taxable year ending before December 31, 2000, |
10 | | a partnership may
elect to pass through to its
partners |
11 | | the credits to which the partnership is entitled under |
12 | | this subsection
(e) for the taxable year. A partner may |
13 | | use the credit allocated to him or her
under this |
14 | | paragraph only against the tax imposed in subsections (c) |
15 | | and (d) of
this Section. If the partnership makes that |
16 | | election, those credits shall be
allocated among the |
17 | | partners in the partnership in accordance with the rules
|
18 | | set forth in Section 704(b) of the Internal Revenue Code, |
19 | | and the rules
promulgated under that Section, and the |
20 | | allocated amount of the credits shall
be allowed to the |
21 | | partners for that taxable year. The partnership shall make
|
22 | | this election on its Personal Property Tax Replacement |
23 | | Income Tax return for
that taxable year. The election to |
24 | | pass through the credits shall be
irrevocable. |
25 | | For taxable years ending on or after December 31, |
26 | | 2000, a
partner that qualifies its
partnership for a |
|
| | SB2531 | - 17 - | LRB102 15312 HLH 20668 b |
|
|
1 | | subtraction under subparagraph (I) of paragraph (2) of
|
2 | | subsection (d) of Section 203 or a shareholder that |
3 | | qualifies a Subchapter S
corporation for a subtraction |
4 | | under subparagraph (S) of paragraph (2) of
subsection (b) |
5 | | of Section 203 shall be allowed a credit under this |
6 | | subsection
(e) equal to its share of the credit earned |
7 | | under this subsection (e) during
the taxable year by the |
8 | | partnership or Subchapter S corporation, determined in
|
9 | | accordance with the determination of income and |
10 | | distributive share of
income under Sections 702 and 704 |
11 | | and Subchapter S of the Internal Revenue
Code. This |
12 | | paragraph is exempt from the provisions of Section 250. |
13 | | (f) Investment credit; Enterprise Zone; River Edge |
14 | | Redevelopment Zone. |
15 | | (1) A taxpayer shall be allowed a credit against the |
16 | | tax imposed
by subsections (a) and (b) of this Section for |
17 | | investment in qualified
property which is placed in |
18 | | service in an Enterprise Zone created
pursuant to the |
19 | | Illinois Enterprise Zone Act or, for property placed in |
20 | | service on or after July 1, 2006, a River Edge |
21 | | Redevelopment Zone established pursuant to the River Edge |
22 | | Redevelopment Zone Act. For partners, shareholders
of |
23 | | Subchapter S corporations, and owners of limited liability |
24 | | companies,
if the liability company is treated as a |
25 | | partnership for purposes of
federal and State income |
26 | | taxation, there shall be allowed a credit under
this |
|
| | SB2531 | - 18 - | LRB102 15312 HLH 20668 b |
|
|
1 | | subsection (f) to be determined in accordance with the |
2 | | determination
of income and distributive share of income |
3 | | under Sections 702 and 704 and
Subchapter S of the |
4 | | Internal Revenue Code. The credit shall be .5% of the
|
5 | | basis for such property. The credit shall be available |
6 | | only in the taxable
year in which the property is placed in |
7 | | service in the Enterprise Zone or River Edge Redevelopment |
8 | | Zone and
shall not be allowed to the extent that it would |
9 | | reduce a taxpayer's
liability for the tax imposed by |
10 | | subsections (a) and (b) of this Section to
below zero. For |
11 | | tax years ending on or after December 31, 1985, the credit
|
12 | | shall be allowed for the tax year in which the property is |
13 | | placed in
service, or, if the amount of the credit exceeds |
14 | | the tax liability for that
year, whether it exceeds the |
15 | | original liability or the liability as later
amended, such |
16 | | excess may be carried forward and applied to the tax
|
17 | | liability of the 5 taxable years following the excess |
18 | | credit year.
The credit shall be applied to the earliest |
19 | | year for which there is a
liability. If there is credit |
20 | | from more than one tax year that is available
to offset a |
21 | | liability, the credit accruing first in time shall be |
22 | | applied
first. |
23 | | (2) The term qualified property means property which: |
24 | | (A) is tangible, whether new or used, including |
25 | | buildings and
structural components of buildings; |
26 | | (B) is depreciable pursuant to Section 167 of the |
|
| | SB2531 | - 19 - | LRB102 15312 HLH 20668 b |
|
|
1 | | Internal Revenue
Code, except that "3-year property" |
2 | | as defined in Section 168(c)(2)(A) of
that Code is not |
3 | | eligible for the credit provided by this subsection |
4 | | (f); |
5 | | (C) is acquired by purchase as defined in Section |
6 | | 179(d) of
the Internal Revenue Code; |
7 | | (D) is used in the Enterprise Zone or River Edge |
8 | | Redevelopment Zone by the taxpayer; and |
9 | | (E) has not been previously used in Illinois in |
10 | | such a manner and by
such a person as would qualify for |
11 | | the credit provided by this subsection
(f) or |
12 | | subsection (e). |
13 | | (3) The basis of qualified property shall be the basis |
14 | | used to compute
the depreciation deduction for federal |
15 | | income tax purposes. |
16 | | (4) If the basis of the property for federal income |
17 | | tax depreciation
purposes is increased after it has been |
18 | | placed in service in the Enterprise
Zone or River Edge |
19 | | Redevelopment Zone by the taxpayer, the amount of such |
20 | | increase shall be deemed property
placed in service on the |
21 | | date of such increase in basis. |
22 | | (5) The term "placed in service" shall have the same |
23 | | meaning as under
Section 46 of the Internal Revenue Code. |
24 | | (6) If during any taxable year, any property ceases to |
25 | | be qualified
property in the hands of the taxpayer within |
26 | | 48 months after being placed
in service, or the situs of |
|
| | SB2531 | - 20 - | LRB102 15312 HLH 20668 b |
|
|
1 | | any qualified property is moved outside the
Enterprise |
2 | | Zone or River Edge Redevelopment Zone within 48 months |
3 | | after being placed in service, the tax
imposed under |
4 | | subsections (a) and (b) of this Section for such taxable |
5 | | year
shall be increased. Such increase shall be determined |
6 | | by (i) recomputing
the investment credit which would have |
7 | | been allowed for the year in which
credit for such |
8 | | property was originally allowed by eliminating such
|
9 | | property from such computation, and (ii) subtracting such |
10 | | recomputed credit
from the amount of credit previously |
11 | | allowed. For the purposes of this
paragraph (6), a |
12 | | reduction of the basis of qualified property resulting
|
13 | | from a redetermination of the purchase price shall be |
14 | | deemed a disposition
of qualified property to the extent |
15 | | of such reduction. |
16 | | (7) There shall be allowed an additional credit equal |
17 | | to 0.5% of the basis of qualified property placed in |
18 | | service during the taxable year in a River Edge |
19 | | Redevelopment Zone, provided such property is placed in |
20 | | service on or after July 1, 2006, and the taxpayer's base |
21 | | employment within Illinois has increased by 1% or more |
22 | | over the preceding year as determined by the taxpayer's |
23 | | employment records filed with the Illinois Department of |
24 | | Employment Security. Taxpayers who are new to Illinois |
25 | | shall be deemed to have met the 1% growth in base |
26 | | employment for the first year in which they file |
|
| | SB2531 | - 21 - | LRB102 15312 HLH 20668 b |
|
|
1 | | employment records with the Illinois Department of |
2 | | Employment Security. If, in any year, the increase in base |
3 | | employment within Illinois over the preceding year is less |
4 | | than 1%, the additional credit shall be limited to that |
5 | | percentage times a fraction, the numerator of which is |
6 | | 0.5% and the denominator of which is 1%, but shall not |
7 | | exceed 0.5%.
|
8 | | (8) For taxable years beginning on or after January 1, |
9 | | 2021, there shall be allowed an Enterprise Zone |
10 | | construction jobs credit against the taxes imposed under |
11 | | subsections (a) and (b) of this Section as provided in |
12 | | Section 13 of the Illinois Enterprise Zone Act. |
13 | | The credit or credits may not reduce the taxpayer's |
14 | | liability to less than zero. If the amount of the credit or |
15 | | credits exceeds the taxpayer's liability, the excess may |
16 | | be carried forward and applied against the taxpayer's |
17 | | liability in succeeding calendar years in the same manner |
18 | | provided under paragraph (4) of Section 211 of this Act. |
19 | | The credit or credits shall be applied to the earliest |
20 | | year for which there is a tax liability. If there are |
21 | | credits from more than one taxable year that are available |
22 | | to offset a liability, the earlier credit shall be applied |
23 | | first. |
24 | | For partners, shareholders of Subchapter S |
25 | | corporations, and owners of limited liability companies, |
26 | | if the liability company is treated as a partnership for |
|
| | SB2531 | - 22 - | LRB102 15312 HLH 20668 b |
|
|
1 | | the purposes of federal and State income taxation, there |
2 | | shall be allowed a credit under this Section to be |
3 | | determined in accordance with the determination of income |
4 | | and distributive share of income under Sections 702 and |
5 | | 704 and Subchapter S of the Internal Revenue Code. |
6 | | The total aggregate amount of credits awarded under |
7 | | the Blue Collar Jobs Act (Article 20 of Public Act 101-9 |
8 | | this amendatory Act of the 101st General Assembly ) shall |
9 | | not exceed $20,000,000 in any State fiscal year . |
10 | | This paragraph (8) is exempt from the provisions of |
11 | | Section 250. |
12 | | (g) (Blank). |
13 | | (h) Investment credit; High Impact Business. |
14 | | (1) Subject to subsections (b) and (b-5) of Section
|
15 | | 5.5 of the Illinois Enterprise Zone Act, a taxpayer shall |
16 | | be allowed a credit
against the tax imposed by subsections |
17 | | (a) and (b) of this Section for
investment in qualified
|
18 | | property which is placed in service by a Department of |
19 | | Commerce and Economic Opportunity
designated High Impact |
20 | | Business. The credit shall be .5% of the basis
for such |
21 | | property. The credit shall not be available (i) until the |
22 | | minimum
investments in qualified property set forth in |
23 | | subdivision (a)(3)(A) of
Section 5.5 of the Illinois
|
24 | | Enterprise Zone Act have been satisfied
or (ii) until the |
25 | | time authorized in subsection (b-5) of the Illinois
|
26 | | Enterprise Zone Act for entities designated as High Impact |
|
| | SB2531 | - 23 - | LRB102 15312 HLH 20668 b |
|
|
1 | | Businesses under
subdivisions (a)(3)(B), (a)(3)(C), and |
2 | | (a)(3)(D) of Section 5.5 of the Illinois
Enterprise Zone |
3 | | Act, and shall not be allowed to the extent that it would
|
4 | | reduce a taxpayer's liability for the tax imposed by |
5 | | subsections (a) and (b) of
this Section to below zero. The |
6 | | credit applicable to such investments shall be
taken in |
7 | | the taxable year in which such investments have been |
8 | | completed. The
credit for additional investments beyond |
9 | | the minimum investment by a designated
high impact |
10 | | business authorized under subdivision (a)(3)(A) of Section |
11 | | 5.5 of
the Illinois Enterprise Zone Act shall be available |
12 | | only in the taxable year in
which the property is placed in |
13 | | service and shall not be allowed to the extent
that it |
14 | | would reduce a taxpayer's liability for the tax imposed by |
15 | | subsections
(a) and (b) of this Section to below zero.
For |
16 | | tax years ending on or after December 31, 1987, the credit |
17 | | shall be
allowed for the tax year in which the property is |
18 | | placed in service, or, if
the amount of the credit exceeds |
19 | | the tax liability for that year, whether
it exceeds the |
20 | | original liability or the liability as later amended, such
|
21 | | excess may be carried forward and applied to the tax |
22 | | liability of the 5
taxable years following the excess |
23 | | credit year. The credit shall be
applied to the earliest |
24 | | year for which there is a liability. If there is
credit |
25 | | from more than one tax year that is available to offset a |
26 | | liability,
the credit accruing first in time shall be |
|
| | SB2531 | - 24 - | LRB102 15312 HLH 20668 b |
|
|
1 | | applied first. |
2 | | Changes made in this subdivision (h)(1) by Public Act |
3 | | 88-670
restore changes made by Public Act 85-1182 and |
4 | | reflect existing law. |
5 | | (2) The term qualified property means property which: |
6 | | (A) is tangible, whether new or used, including |
7 | | buildings and
structural components of buildings; |
8 | | (B) is depreciable pursuant to Section 167 of the |
9 | | Internal Revenue
Code, except that "3-year property" |
10 | | as defined in Section 168(c)(2)(A) of
that Code is not |
11 | | eligible for the credit provided by this subsection |
12 | | (h); |
13 | | (C) is acquired by purchase as defined in Section |
14 | | 179(d) of the
Internal Revenue Code; and |
15 | | (D) is not eligible for the Enterprise Zone |
16 | | Investment Credit provided
by subsection (f) of this |
17 | | Section. |
18 | | (3) The basis of qualified property shall be the basis |
19 | | used to compute
the depreciation deduction for federal |
20 | | income tax purposes. |
21 | | (4) If the basis of the property for federal income |
22 | | tax depreciation
purposes is increased after it has been |
23 | | placed in service in a federally
designated Foreign Trade |
24 | | Zone or Sub-Zone located in Illinois by the taxpayer,
the |
25 | | amount of such increase shall be deemed property placed in |
26 | | service on
the date of such increase in basis. |
|
| | SB2531 | - 25 - | LRB102 15312 HLH 20668 b |
|
|
1 | | (5) The term "placed in service" shall have the same |
2 | | meaning as under
Section 46 of the Internal Revenue Code. |
3 | | (6) If during any taxable year ending on or before |
4 | | December 31, 1996,
any property ceases to be qualified
|
5 | | property in the hands of the taxpayer within 48 months |
6 | | after being placed
in service, or the situs of any |
7 | | qualified property is moved outside
Illinois within 48 |
8 | | months after being placed in service, the tax imposed
|
9 | | under subsections (a) and (b) of this Section for such |
10 | | taxable year shall
be increased. Such increase shall be |
11 | | determined by (i) recomputing the
investment credit which |
12 | | would have been allowed for the year in which
credit for |
13 | | such property was originally allowed by eliminating such
|
14 | | property from such computation, and (ii) subtracting such |
15 | | recomputed credit
from the amount of credit previously |
16 | | allowed. For the purposes of this
paragraph (6), a |
17 | | reduction of the basis of qualified property resulting
|
18 | | from a redetermination of the purchase price shall be |
19 | | deemed a disposition
of qualified property to the extent |
20 | | of such reduction. |
21 | | (7) Beginning with tax years ending after December 31, |
22 | | 1996, if a
taxpayer qualifies for the credit under this |
23 | | subsection (h) and thereby is
granted a tax abatement and |
24 | | the taxpayer relocates its entire facility in
violation of |
25 | | the explicit terms and length of the contract under |
26 | | Section
18-183 of the Property Tax Code, the tax imposed |
|
| | SB2531 | - 26 - | LRB102 15312 HLH 20668 b |
|
|
1 | | under subsections
(a) and (b) of this Section shall be |
2 | | increased for the taxable year
in which the taxpayer |
3 | | relocated its facility by an amount equal to the
amount of |
4 | | credit received by the taxpayer under this subsection (h). |
5 | | (h-5) High Impact Business construction constructions jobs |
6 | | credit. For taxable years beginning on or after January 1, |
7 | | 2021, there shall also be allowed a High Impact Business |
8 | | construction jobs credit against the tax imposed under |
9 | | subsections (a) and (b) of this Section as provided in |
10 | | subsections (i) and (j) of Section 5.5 of the Illinois |
11 | | Enterprise Zone Act. |
12 | | The credit or credits may not reduce the taxpayer's |
13 | | liability to less than zero. If the amount of the credit or |
14 | | credits exceeds the taxpayer's liability, the excess may be |
15 | | carried forward and applied against the taxpayer's liability |
16 | | in succeeding calendar years in the manner provided under |
17 | | paragraph (4) of Section 211 of this Act. The credit or credits |
18 | | shall be applied to the earliest year for which there is a tax |
19 | | liability. If there are credits from more than one taxable |
20 | | year that are available to offset a liability, the earlier |
21 | | credit shall be applied first. |
22 | | For partners, shareholders of Subchapter S corporations, |
23 | | and owners of limited liability companies, if the liability |
24 | | company is treated as a partnership for the purposes of |
25 | | federal and State income taxation, there shall be allowed a |
26 | | credit under this Section to be determined in accordance with |
|
| | SB2531 | - 27 - | LRB102 15312 HLH 20668 b |
|
|
1 | | the determination of income and distributive share of income |
2 | | under Sections 702 and 704 and Subchapter S of the Internal |
3 | | Revenue Code. |
4 | | The total aggregate amount of credits awarded under the |
5 | | Blue Collar Jobs Act (Article 20 of Public Act 101-9 this |
6 | | amendatory Act of the 101st General Assembly ) shall not exceed |
7 | | $20,000,000 in any State fiscal year . |
8 | | This subsection (h-5) is exempt from the provisions of |
9 | | Section 250. |
10 | | (i) Credit for Personal Property Tax Replacement Income |
11 | | Tax.
For tax years ending prior to December 31, 2003, a credit |
12 | | shall be allowed
against the tax imposed by
subsections (a) |
13 | | and (b) of this Section for the tax imposed by subsections (c)
|
14 | | and (d) of this Section. This credit shall be computed by |
15 | | multiplying the tax
imposed by subsections (c) and (d) of this |
16 | | Section by a fraction, the numerator
of which is base income |
17 | | allocable to Illinois and the denominator of which is
Illinois |
18 | | base income, and further multiplying the product by the tax |
19 | | rate
imposed by subsections (a) and (b) of this Section. |
20 | | Any credit earned on or after December 31, 1986 under
this |
21 | | subsection which is unused in the year
the credit is computed |
22 | | because it exceeds the tax liability imposed by
subsections |
23 | | (a) and (b) for that year (whether it exceeds the original
|
24 | | liability or the liability as later amended) may be carried |
25 | | forward and
applied to the tax liability imposed by |
26 | | subsections (a) and (b) of the 5
taxable years following the |
|
| | SB2531 | - 28 - | LRB102 15312 HLH 20668 b |
|
|
1 | | excess credit year, provided that no credit may
be carried |
2 | | forward to any year ending on or
after December 31, 2003. This |
3 | | credit shall be
applied first to the earliest year for which |
4 | | there is a liability. If
there is a credit under this |
5 | | subsection from more than one tax year that is
available to |
6 | | offset a liability the earliest credit arising under this
|
7 | | subsection shall be applied first. |
8 | | If, during any taxable year ending on or after December |
9 | | 31, 1986, the
tax imposed by subsections (c) and (d) of this |
10 | | Section for which a taxpayer
has claimed a credit under this |
11 | | subsection (i) is reduced, the amount of
credit for such tax |
12 | | shall also be reduced. Such reduction shall be
determined by |
13 | | recomputing the credit to take into account the reduced tax
|
14 | | imposed by subsections (c) and (d). If any portion of the
|
15 | | reduced amount of credit has been carried to a different |
16 | | taxable year, an
amended return shall be filed for such |
17 | | taxable year to reduce the amount of
credit claimed. |
18 | | (j) Training expense credit. Beginning with tax years |
19 | | ending on or
after December 31, 1986 and prior to December 31, |
20 | | 2003, a taxpayer shall be
allowed a credit against the
tax |
21 | | imposed by subsections (a) and (b) under this Section
for all |
22 | | amounts paid or accrued, on behalf of all persons
employed by |
23 | | the taxpayer in Illinois or Illinois residents employed
|
24 | | outside of Illinois by a taxpayer, for educational or |
25 | | vocational training in
semi-technical or technical fields or |
26 | | semi-skilled or skilled fields, which
were deducted from gross |
|
| | SB2531 | - 29 - | LRB102 15312 HLH 20668 b |
|
|
1 | | income in the computation of taxable income. The
credit |
2 | | against the tax imposed by subsections (a) and (b) shall be |
3 | | 1.6% of
such training expenses. For partners, shareholders of |
4 | | subchapter S
corporations, and owners of limited liability |
5 | | companies, if the liability
company is treated as a |
6 | | partnership for purposes of federal and State income
taxation, |
7 | | there shall be allowed a credit under this subsection (j) to be
|
8 | | determined in accordance with the determination of income and |
9 | | distributive
share of income under Sections 702 and 704 and |
10 | | subchapter S of the Internal
Revenue Code. |
11 | | Any credit allowed under this subsection which is unused |
12 | | in the year
the credit is earned may be carried forward to each |
13 | | of the 5 taxable
years following the year for which the credit |
14 | | is first computed until it is
used. This credit shall be |
15 | | applied first to the earliest year for which
there is a |
16 | | liability. If there is a credit under this subsection from |
17 | | more
than one tax year that is available to offset a liability , |
18 | | the earliest
credit arising under this subsection shall be |
19 | | applied first. No carryforward
credit may be claimed in any |
20 | | tax year ending on or after
December 31, 2003. |
21 | | (k) Research and development credit. For tax years ending |
22 | | after July 1, 1990 and prior to
December 31, 2003, and |
23 | | beginning again for tax years ending on or after December 31, |
24 | | 2004, and ending prior to January 1, 2027, a taxpayer shall be
|
25 | | allowed a credit against the tax imposed by subsections (a) |
26 | | and (b) of this
Section for increasing research activities in |
|
| | SB2531 | - 30 - | LRB102 15312 HLH 20668 b |
|
|
1 | | this State. The credit
allowed against the tax imposed by |
2 | | subsections (a) and (b) shall be equal
to 6 1/2% of the |
3 | | qualifying expenditures for increasing research activities
in |
4 | | this State. For partners, shareholders of subchapter S |
5 | | corporations, and
owners of limited liability companies, if |
6 | | the liability company is treated as a
partnership for purposes |
7 | | of federal and State income taxation, there shall be
allowed a |
8 | | credit under this subsection to be determined in accordance |
9 | | with the
determination of income and distributive share of |
10 | | income under Sections 702 and
704 and subchapter S of the |
11 | | Internal Revenue Code. |
12 | | For purposes of this subsection, "qualifying expenditures" |
13 | | means the
qualifying expenditures as defined for the federal |
14 | | credit for increasing
research activities which would be |
15 | | allowable under Section 41 of the
Internal Revenue Code and |
16 | | which are conducted in this State, "qualifying
expenditures |
17 | | for increasing research activities in this State" means the
|
18 | | excess of qualifying expenditures for the taxable year in |
19 | | which incurred
over qualifying expenditures for the base |
20 | | period, "qualifying expenditures
for the base period" means |
21 | | the average of the qualifying expenditures for
each year in |
22 | | the base period, and "base period" means the 3 taxable years
|
23 | | immediately preceding the taxable year for which the |
24 | | determination is
being made. |
25 | | Any credit in excess of the tax liability for the taxable |
26 | | year
may be carried forward. A taxpayer may elect to have the
|
|
| | SB2531 | - 31 - | LRB102 15312 HLH 20668 b |
|
|
1 | | unused credit shown on its final completed return carried over |
2 | | as a credit
against the tax liability for the following 5 |
3 | | taxable years or until it has
been fully used, whichever |
4 | | occurs first; provided that no credit earned in a tax year |
5 | | ending prior to December 31, 2003 may be carried forward to any |
6 | | year ending on or after December 31, 2003. |
7 | | If an unused credit is carried forward to a given year from |
8 | | 2 or more
earlier years, that credit arising in the earliest |
9 | | year will be applied
first against the tax liability for the |
10 | | given year. If a tax liability for
the given year still |
11 | | remains, the credit from the next earliest year will
then be |
12 | | applied, and so on, until all credits have been used or no tax
|
13 | | liability for the given year remains. Any remaining unused |
14 | | credit or
credits then will be carried forward to the next |
15 | | following year in which a
tax liability is incurred, except |
16 | | that no credit can be carried forward to
a year which is more |
17 | | than 5 years after the year in which the expense for
which the |
18 | | credit is given was incurred. |
19 | | No inference shall be drawn from Public Act 91-644 this |
20 | | amendatory Act of the 91st General
Assembly in construing this |
21 | | Section for taxable years beginning before January
1, 1999. |
22 | | It is the intent of the General Assembly that the research |
23 | | and development credit under this subsection (k) shall apply |
24 | | continuously for all tax years ending on or after December 31, |
25 | | 2004 and ending prior to January 1, 2027, including, but not |
26 | | limited to, the period beginning on January 1, 2016 and ending |
|
| | SB2531 | - 32 - | LRB102 15312 HLH 20668 b |
|
|
1 | | on July 6, 2017 ( the effective date of Public Act 100-22) this |
2 | | amendatory Act of the 100th General Assembly . All actions |
3 | | taken in reliance on the continuation of the credit under this |
4 | | subsection (k) by any taxpayer are hereby validated. |
5 | | (l) Environmental Remediation Tax Credit. |
6 | | (i) For tax years ending after December 31, 1997 and |
7 | | on or before
December 31, 2001, a taxpayer shall be |
8 | | allowed a credit against the tax
imposed by subsections |
9 | | (a) and (b) of this Section for certain amounts paid
for |
10 | | unreimbursed eligible remediation costs, as specified in |
11 | | this subsection.
For purposes of this Section, |
12 | | "unreimbursed eligible remediation costs" means
costs |
13 | | approved by the Illinois Environmental Protection Agency |
14 | | ("Agency") under
Section 58.14 of the Environmental |
15 | | Protection Act that were paid in performing
environmental |
16 | | remediation at a site for which a No Further Remediation |
17 | | Letter
was issued by the Agency and recorded under Section |
18 | | 58.10 of the Environmental
Protection Act. The credit must |
19 | | be claimed for the taxable year in which
Agency approval |
20 | | of the eligible remediation costs is granted. The credit |
21 | | is
not available to any taxpayer if the taxpayer or any |
22 | | related party caused or
contributed to, in any material |
23 | | respect, a release of regulated substances on,
in, or |
24 | | under the site that was identified and addressed by the |
25 | | remedial
action pursuant to the Site Remediation Program |
26 | | of the Environmental Protection
Act. After the Pollution |
|
| | SB2531 | - 33 - | LRB102 15312 HLH 20668 b |
|
|
1 | | Control Board rules are adopted pursuant to the
Illinois |
2 | | Administrative Procedure Act for the administration and |
3 | | enforcement of
Section 58.9 of the Environmental |
4 | | Protection Act, determinations as to credit
availability |
5 | | for purposes of this Section shall be made consistent with |
6 | | those
rules. For purposes of this Section, "taxpayer" |
7 | | includes a person whose tax
attributes the taxpayer has |
8 | | succeeded to under Section 381 of the Internal
Revenue |
9 | | Code and "related party" includes the persons disallowed a |
10 | | deduction
for losses by paragraphs (b), (c), and (f)(1) of |
11 | | Section 267 of the Internal
Revenue Code by virtue of |
12 | | being a related taxpayer, as well as any of its
partners. |
13 | | The credit allowed against the tax imposed by subsections |
14 | | (a) and
(b) shall be equal to 25% of the unreimbursed |
15 | | eligible remediation costs in
excess of $100,000 per site, |
16 | | except that the $100,000 threshold shall not apply
to any |
17 | | site contained in an enterprise zone as determined by the |
18 | | Department of
Commerce and Community Affairs (now |
19 | | Department of Commerce and Economic Opportunity). The |
20 | | total credit allowed shall not exceed
$40,000 per year |
21 | | with a maximum total of $150,000 per site. For partners |
22 | | and
shareholders of subchapter S corporations, there shall |
23 | | be allowed a credit
under this subsection to be determined |
24 | | in accordance with the determination of
income and |
25 | | distributive share of income under Sections 702 and 704 |
26 | | and
subchapter S of the Internal Revenue Code. |
|
| | SB2531 | - 34 - | LRB102 15312 HLH 20668 b |
|
|
1 | | (ii) A credit allowed under this subsection that is |
2 | | unused in the year
the credit is earned may be carried |
3 | | forward to each of the 5 taxable years
following the year |
4 | | for which the credit is first earned until it is used.
The |
5 | | term "unused credit" does not include any amounts of |
6 | | unreimbursed eligible
remediation costs in excess of the |
7 | | maximum credit per site authorized under
paragraph (i). |
8 | | This credit shall be applied first to the earliest year
|
9 | | for which there is a liability. If there is a credit under |
10 | | this subsection
from more than one tax year that is |
11 | | available to offset a liability, the
earliest credit |
12 | | arising under this subsection shall be applied first. A
|
13 | | credit allowed under this subsection may be sold to a |
14 | | buyer as part of a sale
of all or part of the remediation |
15 | | site for which the credit was granted. The
purchaser of a |
16 | | remediation site and the tax credit shall succeed to the |
17 | | unused
credit and remaining carry-forward period of the |
18 | | seller. To perfect the
transfer, the assignor shall record |
19 | | the transfer in the chain of title for the
site and provide |
20 | | written notice to the Director of the Illinois Department |
21 | | of
Revenue of the assignor's intent to sell the |
22 | | remediation site and the amount of
the tax credit to be |
23 | | transferred as a portion of the sale. In no event may a
|
24 | | credit be transferred to any taxpayer if the taxpayer or a |
25 | | related party would
not be eligible under the provisions |
26 | | of subsection (i). |
|
| | SB2531 | - 35 - | LRB102 15312 HLH 20668 b |
|
|
1 | | (iii) For purposes of this Section, the term "site" |
2 | | shall have the same
meaning as under Section 58.2 of the |
3 | | Environmental Protection Act. |
4 | | (m) Education expense credit. Beginning with tax years |
5 | | ending after
December 31, 1999, a taxpayer who
is the |
6 | | custodian of one or more qualifying pupils shall be allowed a |
7 | | credit
against the tax imposed by subsections (a) and (b) of |
8 | | this Section for
qualified education expenses incurred on |
9 | | behalf of the qualifying pupils.
The credit shall be equal to |
10 | | 25% of qualified education expenses, but in no
event may the |
11 | | total credit under this subsection claimed by a
family that is |
12 | | the
custodian of qualifying pupils exceed (i) $500 for tax |
13 | | years ending prior to December 31, 2017, and (ii) $750 for tax |
14 | | years ending on or after December 31, 2017. In no event shall a |
15 | | credit under
this subsection reduce the taxpayer's liability |
16 | | under this Act to less than
zero. Notwithstanding any other |
17 | | provision of law, for taxable years beginning on or after |
18 | | January 1, 2017, no taxpayer may claim a credit under this |
19 | | subsection (m) if the taxpayer's adjusted gross income for the |
20 | | taxable year exceeds (i) $500,000, in the case of spouses |
21 | | filing a joint federal tax return or (ii) $250,000, in the case |
22 | | of all other taxpayers. This subsection is exempt from the |
23 | | provisions of Section 250 of this
Act. |
24 | | For purposes of this subsection: |
25 | | "Qualifying pupils" means individuals who (i) are |
26 | | residents of the State of
Illinois, (ii) are under the age of |
|
| | SB2531 | - 36 - | LRB102 15312 HLH 20668 b |
|
|
1 | | 21 at the close of the school year for
which a credit is |
2 | | sought, and (iii) during the school year for which a credit
is |
3 | | sought were full-time pupils enrolled in a kindergarten |
4 | | through twelfth
grade education program at any school, as |
5 | | defined in this subsection. |
6 | | "Qualified education expense" means the amount incurred
on |
7 | | behalf of a qualifying pupil in excess of $250 for tuition, |
8 | | book fees, and
lab fees at the school in which the pupil is |
9 | | enrolled during the regular school
year. |
10 | | "School" means any public or nonpublic elementary or |
11 | | secondary school in
Illinois that is in compliance with Title |
12 | | VI of the Civil Rights Act of 1964
and attendance at which |
13 | | satisfies the requirements of Section 26-1 of the
School Code, |
14 | | except that nothing shall be construed to require a child to
|
15 | | attend any particular public or nonpublic school to qualify |
16 | | for the credit
under this Section. |
17 | | "Custodian" means, with respect to qualifying pupils, an |
18 | | Illinois resident
who is a parent, the parents, a legal |
19 | | guardian, or the legal guardians of the
qualifying pupils. |
20 | | (n) River Edge Redevelopment Zone site remediation tax |
21 | | credit.
|
22 | | (i) For tax years ending on or after December 31, |
23 | | 2006, a taxpayer shall be allowed a credit against the tax |
24 | | imposed by subsections (a) and (b) of this Section for |
25 | | certain amounts paid for unreimbursed eligible remediation |
26 | | costs, as specified in this subsection. For purposes of |
|
| | SB2531 | - 37 - | LRB102 15312 HLH 20668 b |
|
|
1 | | this Section, "unreimbursed eligible remediation costs" |
2 | | means costs approved by the Illinois Environmental |
3 | | Protection Agency ("Agency") under Section 58.14a of the |
4 | | Environmental Protection Act that were paid in performing |
5 | | environmental remediation at a site within a River Edge |
6 | | Redevelopment Zone for which a No Further Remediation |
7 | | Letter was issued by the Agency and recorded under Section |
8 | | 58.10 of the Environmental Protection Act. The credit must |
9 | | be claimed for the taxable year in which Agency approval |
10 | | of the eligible remediation costs is granted. The credit |
11 | | is not available to any taxpayer if the taxpayer or any |
12 | | related party caused or contributed to, in any material |
13 | | respect, a release of regulated substances on, in, or |
14 | | under the site that was identified and addressed by the |
15 | | remedial action pursuant to the Site Remediation Program |
16 | | of the Environmental Protection Act. Determinations as to |
17 | | credit availability for purposes of this Section shall be |
18 | | made consistent with rules adopted by the Pollution |
19 | | Control Board pursuant to the Illinois Administrative |
20 | | Procedure Act for the administration and enforcement of |
21 | | Section 58.9 of the Environmental Protection Act. For |
22 | | purposes of this Section, "taxpayer" includes a person |
23 | | whose tax attributes the taxpayer has succeeded to under |
24 | | Section 381 of the Internal Revenue Code and "related |
25 | | party" includes the persons disallowed a deduction for |
26 | | losses by paragraphs (b), (c), and (f)(1) of Section 267 |
|
| | SB2531 | - 38 - | LRB102 15312 HLH 20668 b |
|
|
1 | | of the Internal Revenue Code by virtue of being a related |
2 | | taxpayer, as well as any of its partners. The credit |
3 | | allowed against the tax imposed by subsections (a) and (b) |
4 | | shall be equal to 25% of the unreimbursed eligible |
5 | | remediation costs in excess of $100,000 per site. |
6 | | (ii) A credit allowed under this subsection that is |
7 | | unused in the year the credit is earned may be carried |
8 | | forward to each of the 5 taxable years following the year |
9 | | for which the credit is first earned until it is used. This |
10 | | credit shall be applied first to the earliest year for |
11 | | which there is a liability. If there is a credit under this |
12 | | subsection from more than one tax year that is available |
13 | | to offset a liability, the earliest credit arising under |
14 | | this subsection shall be applied first. A credit allowed |
15 | | under this subsection may be sold to a buyer as part of a |
16 | | sale of all or part of the remediation site for which the |
17 | | credit was granted. The purchaser of a remediation site |
18 | | and the tax credit shall succeed to the unused credit and |
19 | | remaining carry-forward period of the seller. To perfect |
20 | | the transfer, the assignor shall record the transfer in |
21 | | the chain of title for the site and provide written notice |
22 | | to the Director of the Illinois Department of Revenue of |
23 | | the assignor's intent to sell the remediation site and the |
24 | | amount of the tax credit to be transferred as a portion of |
25 | | the sale. In no event may a credit be transferred to any |
26 | | taxpayer if the taxpayer or a related party would not be |
|
| | SB2531 | - 39 - | LRB102 15312 HLH 20668 b |
|
|
1 | | eligible under the provisions of subsection (i). |
2 | | (iii) For purposes of this Section, the term "site" |
3 | | shall have the same meaning as under Section 58.2 of the |
4 | | Environmental Protection Act. |
5 | | (o) For each of taxable years during the Compassionate Use |
6 | | of Medical Cannabis Program, a surcharge is imposed on all |
7 | | taxpayers on income arising from the sale or exchange of |
8 | | capital assets, depreciable business property, real property |
9 | | used in the trade or business, and Section 197 intangibles of |
10 | | an organization registrant under the Compassionate Use of |
11 | | Medical Cannabis Program Act. The amount of the surcharge is |
12 | | equal to the amount of federal income tax liability for the |
13 | | taxable year attributable to those sales and exchanges. The |
14 | | surcharge imposed does not apply if: |
15 | | (1) the medical cannabis cultivation center |
16 | | registration, medical cannabis dispensary registration, or |
17 | | the property of a registration is transferred as a result |
18 | | of any of the following: |
19 | | (A) bankruptcy, a receivership, or a debt |
20 | | adjustment initiated by or against the initial |
21 | | registration or the substantial owners of the initial |
22 | | registration; |
23 | | (B) cancellation, revocation, or termination of |
24 | | any registration by the Illinois Department of Public |
25 | | Health; |
26 | | (C) a determination by the Illinois Department of |
|
| | SB2531 | - 40 - | LRB102 15312 HLH 20668 b |
|
|
1 | | Public Health that transfer of the registration is in |
2 | | the best interests of Illinois qualifying patients as |
3 | | defined by the Compassionate Use of Medical Cannabis |
4 | | Program Act; |
5 | | (D) the death of an owner of the equity interest in |
6 | | a registrant; |
7 | | (E) the acquisition of a controlling interest in |
8 | | the stock or substantially all of the assets of a |
9 | | publicly traded company; |
10 | | (F) a transfer by a parent company to a wholly |
11 | | owned subsidiary; or |
12 | | (G) the transfer or sale to or by one person to |
13 | | another person where both persons were initial owners |
14 | | of the registration when the registration was issued; |
15 | | or |
16 | | (2) the cannabis cultivation center registration, |
17 | | medical cannabis dispensary registration, or the |
18 | | controlling interest in a registrant's property is |
19 | | transferred in a transaction to lineal descendants in |
20 | | which no gain or loss is recognized or as a result of a |
21 | | transaction in accordance with Section 351 of the Internal |
22 | | Revenue Code in which no gain or loss is recognized. |
23 | | (Source: P.A. 100-22, eff. 7-6-17; 101-9, eff. 6-5-19; 101-31, |
24 | | eff. 6-28-19; 101-207, eff. 8-2-19; 101-363, eff. 8-9-19; |
25 | | revised 11-18-20.) |
|
| | SB2531 | - 41 - | LRB102 15312 HLH 20668 b |
|
|
1 | | (Text of Section with the changes made by P.A. 101-8, |
2 | | which did not take effect (see Section 99 of P.A. 101-8))
|
3 | | Sec. 201. Tax imposed. |
4 | | (a) In general. A tax measured by net income is hereby |
5 | | imposed on every
individual, corporation, trust and estate for |
6 | | each taxable year ending
after July 31, 1969 on the privilege |
7 | | of earning or receiving income in or
as a resident of this |
8 | | State. Such tax shall be in addition to all other
occupation or |
9 | | privilege taxes imposed by this State or by any municipal
|
10 | | corporation or political subdivision thereof. |
11 | | (b) Rates. The tax imposed by subsection (a) of this |
12 | | Section shall be
determined as follows, except as adjusted by |
13 | | subsection (d-1): |
14 | | (1) In the case of an individual, trust or estate, for |
15 | | taxable years
ending prior to July 1, 1989, an amount |
16 | | equal to 2 1/2% of the taxpayer's
net income for the |
17 | | taxable year. |
18 | | (2) In the case of an individual, trust or estate, for |
19 | | taxable years
beginning prior to July 1, 1989 and ending |
20 | | after June 30, 1989, an amount
equal to the sum of (i) 2 |
21 | | 1/2% of the taxpayer's net income for the period
prior to |
22 | | July 1, 1989, as calculated under Section 202.3, and (ii) |
23 | | 3% of the
taxpayer's net income for the period after June |
24 | | 30, 1989, as calculated
under Section 202.3. |
25 | | (3) In the case of an individual, trust or estate, for |
26 | | taxable years
beginning after June 30, 1989, and ending |
|
| | SB2531 | - 42 - | LRB102 15312 HLH 20668 b |
|
|
1 | | prior to January 1, 2011, an amount equal to 3% of the |
2 | | taxpayer's net
income for the taxable year. |
3 | | (4) In the case of an individual, trust, or estate, |
4 | | for taxable years beginning prior to January 1, 2011, and |
5 | | ending after December 31, 2010, an amount equal to the sum |
6 | | of (i) 3% of the taxpayer's net income for the period prior |
7 | | to January 1, 2011, as calculated under Section 202.5, and |
8 | | (ii) 5% of the taxpayer's net income for the period after |
9 | | December 31, 2010, as calculated under Section 202.5. |
10 | | (5) In the case of an individual, trust, or estate, |
11 | | for taxable years beginning on or after January 1, 2011, |
12 | | and ending prior to January 1, 2015, an amount equal to 5% |
13 | | of the taxpayer's net income for the taxable year. |
14 | | (5.1) In the case of an individual, trust, or estate, |
15 | | for taxable years beginning prior to January 1, 2015, and |
16 | | ending after December 31, 2014, an amount equal to the sum |
17 | | of (i) 5% of the taxpayer's net income for the period prior |
18 | | to January 1, 2015, as calculated under Section 202.5, and |
19 | | (ii) 3.75% of the taxpayer's net income for the period |
20 | | after December 31, 2014, as calculated under Section |
21 | | 202.5. |
22 | | (5.2) In the case of an individual, trust, or estate, |
23 | | for taxable years beginning on or after January 1, 2015, |
24 | | and ending prior to July 1, 2017, an amount equal to 3.75% |
25 | | of the taxpayer's net income for the taxable year. |
26 | | (5.3) In the case of an individual, trust, or estate, |
|
| | SB2531 | - 43 - | LRB102 15312 HLH 20668 b |
|
|
1 | | for taxable years beginning prior to July 1, 2017, and |
2 | | ending after June 30, 2017, an amount equal to the sum of |
3 | | (i) 3.75% of the taxpayer's net income for the period |
4 | | prior to July 1, 2017, as calculated under Section 202.5, |
5 | | and (ii) 4.95% of the taxpayer's net income for the period |
6 | | after June 30, 2017, as calculated under Section 202.5. |
7 | | (5.4) In the case of an individual, trust, or estate, |
8 | | for taxable years beginning on or after July 1, 2017 and |
9 | | beginning prior to January 1, 2021 , an amount equal to |
10 | | 4.95% of the taxpayer's net income for the taxable year. |
11 | | (5.5) In the case of an individual, trust, or estate, |
12 | | for taxable years beginning on or after January 1, 2021, |
13 | | an amount calculated under the rate structure set forth in |
14 | | Section 201.1. |
15 | | (6) In the case of a corporation, for taxable years
|
16 | | ending prior to July 1, 1989, an amount equal to 4% of the
|
17 | | taxpayer's net income for the taxable year. |
18 | | (7) In the case of a corporation, for taxable years |
19 | | beginning prior to
July 1, 1989 and ending after June 30, |
20 | | 1989, an amount equal to the sum of
(i) 4% of the |
21 | | taxpayer's net income for the period prior to July 1, |
22 | | 1989,
as calculated under Section 202.3, and (ii) 4.8% of |
23 | | the taxpayer's net
income for the period after June 30, |
24 | | 1989, as calculated under Section
202.3. |
25 | | (8) In the case of a corporation, for taxable years |
26 | | beginning after
June 30, 1989, and ending prior to January |
|
| | SB2531 | - 44 - | LRB102 15312 HLH 20668 b |
|
|
1 | | 1, 2011, an amount equal to 4.8% of the taxpayer's net |
2 | | income for the
taxable year. |
3 | | (9) In the case of a corporation, for taxable years |
4 | | beginning prior to January 1, 2011, and ending after |
5 | | December 31, 2010, an amount equal to the sum of (i) 4.8% |
6 | | of the taxpayer's net income for the period prior to |
7 | | January 1, 2011, as calculated under Section 202.5, and |
8 | | (ii) 7% of the taxpayer's net income for the period after |
9 | | December 31, 2010, as calculated under Section 202.5. |
10 | | (10) In the case of a corporation, for taxable years |
11 | | beginning on or after January 1, 2011, and ending prior to |
12 | | January 1, 2015, an amount equal to 7% of the taxpayer's |
13 | | net income for the taxable year. |
14 | | (11) In the case of a corporation, for taxable years |
15 | | beginning prior to January 1, 2015, and ending after |
16 | | December 31, 2014, an amount equal to the sum of (i) 7% of |
17 | | the taxpayer's net income for the period prior to January |
18 | | 1, 2015, as calculated under Section 202.5, and (ii) 5.25% |
19 | | of the taxpayer's net income for the period after December |
20 | | 31, 2014, as calculated under Section 202.5. |
21 | | (12) In the case of a corporation, for taxable years |
22 | | beginning on or after January 1, 2015, and ending prior to |
23 | | July 1, 2017, an amount equal to 5.25% of the taxpayer's |
24 | | net income for the taxable year. |
25 | | (13) In the case of a corporation, for taxable years |
26 | | beginning prior to July 1, 2017, and ending after June 30, |
|
| | SB2531 | - 45 - | LRB102 15312 HLH 20668 b |
|
|
1 | | 2017, an amount equal to the sum of (i) 5.25% of the |
2 | | taxpayer's net income for the period prior to July 1, |
3 | | 2017, as calculated under Section 202.5, and (ii) 7% of |
4 | | the taxpayer's net income for the period after June 30, |
5 | | 2017, as calculated under Section 202.5. |
6 | | (14) In the case of a corporation, for taxable years |
7 | | beginning on or after July 1, 2017 and beginning prior to |
8 | | January 1, 2021 , an amount equal to 7% of the taxpayer's |
9 | | net income for the taxable year. |
10 | | (15) In the case of a corporation, for taxable years |
11 | | beginning on or after January 1, 2021, an amount equal to |
12 | | 7.99% of the taxpayer's net income for the taxable year. |
13 | | The rates under this subsection (b) are subject to the |
14 | | provisions of Section 201.5. |
15 | | (b-5) Surcharge; sale or exchange of assets, properties, |
16 | | and intangibles of organization gaming licensees. For each of |
17 | | taxable years 2019 through 2027, a surcharge is imposed on all |
18 | | taxpayers on income arising from the sale or exchange of |
19 | | capital assets, depreciable business property, real property |
20 | | used in the trade or business, and Section 197 intangibles (i) |
21 | | of an organization licensee under the Illinois Horse Racing |
22 | | Act of 1975 and (ii) of an organization gaming licensee under |
23 | | the Illinois Gambling Act. The amount of the surcharge is |
24 | | equal to the amount of federal income tax liability for the |
25 | | taxable year attributable to those sales and exchanges. The |
26 | | surcharge imposed shall not apply if: |
|
| | SB2531 | - 46 - | LRB102 15312 HLH 20668 b |
|
|
1 | | (1) the organization gaming license, organization |
2 | | license, or racetrack property is transferred as a result |
3 | | of any of the following: |
4 | | (A) bankruptcy, a receivership, or a debt |
5 | | adjustment initiated by or against the initial |
6 | | licensee or the substantial owners of the initial |
7 | | licensee; |
8 | | (B) cancellation, revocation, or termination of |
9 | | any such license by the Illinois Gaming Board or the |
10 | | Illinois Racing Board; |
11 | | (C) a determination by the Illinois Gaming Board |
12 | | that transfer of the license is in the best interests |
13 | | of Illinois gaming; |
14 | | (D) the death of an owner of the equity interest in |
15 | | a licensee; |
16 | | (E) the acquisition of a controlling interest in |
17 | | the stock or substantially all of the assets of a |
18 | | publicly traded company; |
19 | | (F) a transfer by a parent company to a wholly |
20 | | owned subsidiary; or |
21 | | (G) the transfer or sale to or by one person to |
22 | | another person where both persons were initial owners |
23 | | of the license when the license was issued; or |
24 | | (2) the controlling interest in the organization |
25 | | gaming license, organization license, or racetrack |
26 | | property is transferred in a transaction to lineal |
|
| | SB2531 | - 47 - | LRB102 15312 HLH 20668 b |
|
|
1 | | descendants in which no gain or loss is recognized or as a |
2 | | result of a transaction in accordance with Section 351 of |
3 | | the Internal Revenue Code in which no gain or loss is |
4 | | recognized; or |
5 | | (3) live horse racing was not conducted in 2010 at a |
6 | | racetrack located within 3 miles of the Mississippi River |
7 | | under a license issued pursuant to the Illinois Horse |
8 | | Racing Act of 1975. |
9 | | The transfer of an organization gaming license, |
10 | | organization license, or racetrack property by a person other |
11 | | than the initial licensee to receive the organization gaming |
12 | | license is not subject to a surcharge. The Department shall |
13 | | adopt rules necessary to implement and administer this |
14 | | subsection. |
15 | | (c) Personal Property Tax Replacement Income Tax.
|
16 | | Beginning on July 1, 1979 and thereafter, in addition to such |
17 | | income
tax, there is also hereby imposed the Personal Property |
18 | | Tax Replacement
Income Tax measured by net income on every |
19 | | corporation (including Subchapter
S corporations), partnership |
20 | | and trust, for each taxable year ending after
June 30, 1979. |
21 | | Such taxes are imposed on the privilege of earning or
|
22 | | receiving income in or as a resident of this State. The |
23 | | Personal Property
Tax Replacement Income Tax shall be in |
24 | | addition to the income tax imposed
by subsections (a) and (b) |
25 | | of this Section and in addition to all other
occupation or |
26 | | privilege taxes imposed by this State or by any municipal
|
|
| | SB2531 | - 48 - | LRB102 15312 HLH 20668 b |
|
|
1 | | corporation or political subdivision thereof. |
2 | | (d) Additional Personal Property Tax Replacement Income |
3 | | Tax Rates.
The personal property tax replacement income tax |
4 | | imposed by this subsection
and subsection (c) of this Section |
5 | | in the case of a corporation, other
than a Subchapter S |
6 | | corporation and except as adjusted by subsection (d-1),
shall |
7 | | be an additional amount equal to
2.85% of such taxpayer's net |
8 | | income for the taxable year, except that
beginning on January |
9 | | 1, 1981, and thereafter, the rate of 2.85% specified
in this |
10 | | subsection shall be reduced to 2.5%, and in the case of a
|
11 | | partnership, trust or a Subchapter S corporation shall be an |
12 | | additional
amount equal to 1.5% of such taxpayer's net income |
13 | | for the taxable year. |
14 | | (d-1) Rate reduction for certain foreign insurers. In the |
15 | | case of a
foreign insurer, as defined by Section 35A-5 of the |
16 | | Illinois Insurance Code,
whose state or country of domicile |
17 | | imposes on insurers domiciled in Illinois
a retaliatory tax |
18 | | (excluding any insurer
whose premiums from reinsurance assumed |
19 | | are 50% or more of its total insurance
premiums as determined |
20 | | under paragraph (2) of subsection (b) of Section 304,
except |
21 | | that for purposes of this determination premiums from |
22 | | reinsurance do
not include premiums from inter-affiliate |
23 | | reinsurance arrangements),
beginning with taxable years ending |
24 | | on or after December 31, 1999,
the sum of
the rates of tax |
25 | | imposed by subsections (b) and (d) shall be reduced (but not
|
26 | | increased) to the rate at which the total amount of tax imposed |
|
| | SB2531 | - 49 - | LRB102 15312 HLH 20668 b |
|
|
1 | | under this Act,
net of all credits allowed under this Act, |
2 | | shall equal (i) the total amount of
tax that would be imposed |
3 | | on the foreign insurer's net income allocable to
Illinois for |
4 | | the taxable year by such foreign insurer's state or country of
|
5 | | domicile if that net income were subject to all income taxes |
6 | | and taxes
measured by net income imposed by such foreign |
7 | | insurer's state or country of
domicile, net of all credits |
8 | | allowed or (ii) a rate of zero if no such tax is
imposed on |
9 | | such income by the foreign insurer's state of domicile.
For |
10 | | the purposes of this subsection (d-1), an inter-affiliate |
11 | | includes a
mutual insurer under common management. |
12 | | (1) For the purposes of subsection (d-1), in no event |
13 | | shall the sum of the
rates of tax imposed by subsections |
14 | | (b) and (d) be reduced below the rate at
which the sum of: |
15 | | (A) the total amount of tax imposed on such |
16 | | foreign insurer under
this Act for a taxable year, net |
17 | | of all credits allowed under this Act, plus |
18 | | (B) the privilege tax imposed by Section 409 of |
19 | | the Illinois Insurance
Code, the fire insurance |
20 | | company tax imposed by Section 12 of the Fire
|
21 | | Investigation Act, and the fire department taxes |
22 | | imposed under Section 11-10-1
of the Illinois |
23 | | Municipal Code, |
24 | | equals 1.25% for taxable years ending prior to December |
25 | | 31, 2003, or
1.75% for taxable years ending on or after |
26 | | December 31, 2003, of the net
taxable premiums written for |
|
| | SB2531 | - 50 - | LRB102 15312 HLH 20668 b |
|
|
1 | | the taxable year,
as described by subsection (1) of |
2 | | Section 409 of the Illinois Insurance Code.
This paragraph |
3 | | will in no event increase the rates imposed under |
4 | | subsections
(b) and (d). |
5 | | (2) Any reduction in the rates of tax imposed by this |
6 | | subsection shall be
applied first against the rates |
7 | | imposed by subsection (b) and only after the
tax imposed |
8 | | by subsection (a) net of all credits allowed under this |
9 | | Section
other than the credit allowed under subsection (i) |
10 | | has been reduced to zero,
against the rates imposed by |
11 | | subsection (d). |
12 | | This subsection (d-1) is exempt from the provisions of |
13 | | Section 250. |
14 | | (d-2) A partnership or Subchapter S corporation may elect |
15 | | to pay a tax that is imposed on the partnership or Subchapter S |
16 | | corporation. This tax is computed by multiplying the share of |
17 | | business income apportionable to Illinois and nonbusiness |
18 | | income allocated to Illinois under Section 303 of this Act, if |
19 | | this share is not a net loss, that is distributable to each |
20 | | partner or shareholder as multiplied by the applicable rates |
21 | | of tax for that partner or shareholder under subsections (a) |
22 | | through (d) of Section 201 of this Act, and taking the sum of |
23 | | these amounts. This election shall be made on the |
24 | | partnership's or Subchapter S corporation's return filed under |
25 | | Section 502 in such manner as the Department may prescribe. |
26 | | (e) Investment credit. A taxpayer shall be allowed a |
|
| | SB2531 | - 51 - | LRB102 15312 HLH 20668 b |
|
|
1 | | credit
against the Personal Property Tax Replacement Income |
2 | | Tax for
investment in qualified property. |
3 | | (1) A taxpayer shall be allowed a credit equal to .5% |
4 | | of
the basis of qualified property placed in service |
5 | | during the taxable year,
provided such property is placed |
6 | | in service on or after
July 1, 1984. There shall be allowed |
7 | | an additional credit equal
to .5% of the basis of |
8 | | qualified property placed in service during the
taxable |
9 | | year, provided such property is placed in service on or
|
10 | | after July 1, 1986, and the taxpayer's base employment
|
11 | | within Illinois has increased by 1% or more over the |
12 | | preceding year as
determined by the taxpayer's employment |
13 | | records filed with the
Illinois Department of Employment |
14 | | Security. Taxpayers who are new to
Illinois shall be |
15 | | deemed to have met the 1% growth in base employment for
the |
16 | | first year in which they file employment records with the |
17 | | Illinois
Department of Employment Security. The provisions |
18 | | added to this Section by
Public Act 85-1200 (and restored |
19 | | by Public Act 87-895) shall be
construed as declaratory of |
20 | | existing law and not as a new enactment. If,
in any year, |
21 | | the increase in base employment within Illinois over the
|
22 | | preceding year is less than 1%, the additional credit |
23 | | shall be limited to that
percentage times a fraction, the |
24 | | numerator of which is .5% and the denominator
of which is |
25 | | 1%, but shall not exceed .5%. The investment credit shall |
26 | | not be
allowed to the extent that it would reduce a |
|
| | SB2531 | - 52 - | LRB102 15312 HLH 20668 b |
|
|
1 | | taxpayer's liability in any tax
year below zero, nor may |
2 | | any credit for qualified property be allowed for any
year |
3 | | other than the year in which the property was placed in |
4 | | service in
Illinois. For tax years ending on or after |
5 | | December 31, 1987, and on or
before December 31, 1988, the |
6 | | credit shall be allowed for the tax year in
which the |
7 | | property is placed in service, or, if the amount of the |
8 | | credit
exceeds the tax liability for that year, whether it |
9 | | exceeds the original
liability or the liability as later |
10 | | amended, such excess may be carried
forward and applied to |
11 | | the tax liability of the 5 taxable years following
the |
12 | | excess credit years if the taxpayer (i) makes investments |
13 | | which cause
the creation of a minimum of 2,000 full-time |
14 | | equivalent jobs in Illinois,
(ii) is located in an |
15 | | enterprise zone established pursuant to the Illinois
|
16 | | Enterprise Zone Act and (iii) is certified by the |
17 | | Department of Commerce
and Community Affairs (now |
18 | | Department of Commerce and Economic Opportunity) as |
19 | | complying with the requirements specified in
clause (i) |
20 | | and (ii) by July 1, 1986. The Department of Commerce and
|
21 | | Community Affairs (now Department of Commerce and Economic |
22 | | Opportunity) shall notify the Department of Revenue of all |
23 | | such
certifications immediately. For tax years ending |
24 | | after December 31, 1988,
the credit shall be allowed for |
25 | | the tax year in which the property is
placed in service, |
26 | | or, if the amount of the credit exceeds the tax
liability |
|
| | SB2531 | - 53 - | LRB102 15312 HLH 20668 b |
|
|
1 | | for that year, whether it exceeds the original liability |
2 | | or the
liability as later amended, such excess may be |
3 | | carried forward and applied
to the tax liability of the 5 |
4 | | taxable years following the excess credit
years. The |
5 | | credit shall be applied to the earliest year for which |
6 | | there is
a liability. If there is credit from more than one |
7 | | tax year that is
available to offset a liability, earlier |
8 | | credit shall be applied first. |
9 | | (2) The term "qualified property" means property |
10 | | which: |
11 | | (A) is tangible, whether new or used, including |
12 | | buildings and structural
components of buildings and |
13 | | signs that are real property, but not including
land |
14 | | or improvements to real property that are not a |
15 | | structural component of a
building such as |
16 | | landscaping, sewer lines, local access roads, fencing, |
17 | | parking
lots, and other appurtenances; |
18 | | (B) is depreciable pursuant to Section 167 of the |
19 | | Internal Revenue Code,
except that "3-year property" |
20 | | as defined in Section 168(c)(2)(A) of that
Code is not |
21 | | eligible for the credit provided by this subsection |
22 | | (e); |
23 | | (C) is acquired by purchase as defined in Section |
24 | | 179(d) of
the Internal Revenue Code; |
25 | | (D) is used in Illinois by a taxpayer who is |
26 | | primarily engaged in
manufacturing, or in mining coal |
|
| | SB2531 | - 54 - | LRB102 15312 HLH 20668 b |
|
|
1 | | or fluorite, or in retailing, or was placed in service |
2 | | on or after July 1, 2006 in a River Edge Redevelopment |
3 | | Zone established pursuant to the River Edge |
4 | | Redevelopment Zone Act; and |
5 | | (E) has not previously been used in Illinois in |
6 | | such a manner and by
such a person as would qualify for |
7 | | the credit provided by this subsection
(e) or |
8 | | subsection (f). |
9 | | (3) For purposes of this subsection (e), |
10 | | "manufacturing" means
the material staging and production |
11 | | of tangible personal property by
procedures commonly |
12 | | regarded as manufacturing, processing, fabrication, or
|
13 | | assembling which changes some existing material into new |
14 | | shapes, new
qualities, or new combinations. For purposes |
15 | | of this subsection
(e) the term "mining" shall have the |
16 | | same meaning as the term "mining" in
Section 613(c) of the |
17 | | Internal Revenue Code. For purposes of this subsection
|
18 | | (e), the term "retailing" means the sale of tangible |
19 | | personal property for use or consumption and not for |
20 | | resale, or
services rendered in conjunction with the sale |
21 | | of tangible personal property for use or consumption and |
22 | | not for resale. For purposes of this subsection (e), |
23 | | "tangible personal property" has the same meaning as when |
24 | | that term is used in the Retailers' Occupation Tax Act, |
25 | | and, for taxable years ending after December 31, 2008, |
26 | | does not include the generation, transmission, or |
|
| | SB2531 | - 55 - | LRB102 15312 HLH 20668 b |
|
|
1 | | distribution of electricity. |
2 | | (4) The basis of qualified property shall be the basis
|
3 | | used to compute the depreciation deduction for federal |
4 | | income tax purposes. |
5 | | (5) If the basis of the property for federal income |
6 | | tax depreciation
purposes is increased after it has been |
7 | | placed in service in Illinois by
the taxpayer, the amount |
8 | | of such increase shall be deemed property placed
in |
9 | | service on the date of such increase in basis. |
10 | | (6) The term "placed in service" shall have the same
|
11 | | meaning as under Section 46 of the Internal Revenue Code. |
12 | | (7) If during any taxable year, any property ceases to
|
13 | | be qualified property in the hands of the taxpayer within |
14 | | 48 months after
being placed in service, or the situs of |
15 | | any qualified property is
moved outside Illinois within 48 |
16 | | months after being placed in service, the
Personal |
17 | | Property Tax Replacement Income Tax for such taxable year |
18 | | shall be
increased. Such increase shall be determined by |
19 | | (i) recomputing the
investment credit which would have |
20 | | been allowed for the year in which
credit for such |
21 | | property was originally allowed by eliminating such
|
22 | | property from such computation and, (ii) subtracting such |
23 | | recomputed credit
from the amount of credit previously |
24 | | allowed. For the purposes of this
paragraph (7), a |
25 | | reduction of the basis of qualified property resulting
|
26 | | from a redetermination of the purchase price shall be |
|
| | SB2531 | - 56 - | LRB102 15312 HLH 20668 b |
|
|
1 | | deemed a disposition
of qualified property to the extent |
2 | | of such reduction. |
3 | | (8) Unless the investment credit is extended by law, |
4 | | the
basis of qualified property shall not include costs |
5 | | incurred after
December 31, 2018, except for costs |
6 | | incurred pursuant to a binding
contract entered into on or |
7 | | before December 31, 2018. |
8 | | (9) Each taxable year ending before December 31, 2000, |
9 | | a partnership may
elect to pass through to its
partners |
10 | | the credits to which the partnership is entitled under |
11 | | this subsection
(e) for the taxable year. A partner may |
12 | | use the credit allocated to him or her
under this |
13 | | paragraph only against the tax imposed in subsections (c) |
14 | | and (d) of
this Section. If the partnership makes that |
15 | | election, those credits shall be
allocated among the |
16 | | partners in the partnership in accordance with the rules
|
17 | | set forth in Section 704(b) of the Internal Revenue Code, |
18 | | and the rules
promulgated under that Section, and the |
19 | | allocated amount of the credits shall
be allowed to the |
20 | | partners for that taxable year. The partnership shall make
|
21 | | this election on its Personal Property Tax Replacement |
22 | | Income Tax return for
that taxable year. The election to |
23 | | pass through the credits shall be
irrevocable. |
24 | | For taxable years ending on or after December 31, |
25 | | 2000, a
partner that qualifies its
partnership for a |
26 | | subtraction under subparagraph (I) of paragraph (2) of
|
|
| | SB2531 | - 57 - | LRB102 15312 HLH 20668 b |
|
|
1 | | subsection (d) of Section 203 or a shareholder that |
2 | | qualifies a Subchapter S
corporation for a subtraction |
3 | | under subparagraph (S) of paragraph (2) of
subsection (b) |
4 | | of Section 203 shall be allowed a credit under this |
5 | | subsection
(e) equal to its share of the credit earned |
6 | | under this subsection (e) during
the taxable year by the |
7 | | partnership or Subchapter S corporation, determined in
|
8 | | accordance with the determination of income and |
9 | | distributive share of
income under Sections 702 and 704 |
10 | | and Subchapter S of the Internal Revenue
Code. This |
11 | | paragraph is exempt from the provisions of Section 250. |
12 | | (f) Investment credit; Enterprise Zone; River Edge |
13 | | Redevelopment Zone. |
14 | | (1) A taxpayer shall be allowed a credit against the |
15 | | tax imposed
by subsections (a) and (b) of this Section for |
16 | | investment in qualified
property which is placed in |
17 | | service in an Enterprise Zone created
pursuant to the |
18 | | Illinois Enterprise Zone Act or, for property placed in |
19 | | service on or after July 1, 2006, a River Edge |
20 | | Redevelopment Zone established pursuant to the River Edge |
21 | | Redevelopment Zone Act. For partners, shareholders
of |
22 | | Subchapter S corporations, and owners of limited liability |
23 | | companies,
if the liability company is treated as a |
24 | | partnership for purposes of
federal and State income |
25 | | taxation, there shall be allowed a credit under
this |
26 | | subsection (f) to be determined in accordance with the |
|
| | SB2531 | - 58 - | LRB102 15312 HLH 20668 b |
|
|
1 | | determination
of income and distributive share of income |
2 | | under Sections 702 and 704 and
Subchapter S of the |
3 | | Internal Revenue Code. The credit shall be .5% of the
|
4 | | basis for such property. The credit shall be available |
5 | | only in the taxable
year in which the property is placed in |
6 | | service in the Enterprise Zone or River Edge Redevelopment |
7 | | Zone and
shall not be allowed to the extent that it would |
8 | | reduce a taxpayer's
liability for the tax imposed by |
9 | | subsections (a) and (b) of this Section to
below zero. For |
10 | | tax years ending on or after December 31, 1985, the credit
|
11 | | shall be allowed for the tax year in which the property is |
12 | | placed in
service, or, if the amount of the credit exceeds |
13 | | the tax liability for that
year, whether it exceeds the |
14 | | original liability or the liability as later
amended, such |
15 | | excess may be carried forward and applied to the tax
|
16 | | liability of the 5 taxable years following the excess |
17 | | credit year.
The credit shall be applied to the earliest |
18 | | year for which there is a
liability. If there is credit |
19 | | from more than one tax year that is available
to offset a |
20 | | liability, the credit accruing first in time shall be |
21 | | applied
first. |
22 | | (2) The term qualified property means property which: |
23 | | (A) is tangible, whether new or used, including |
24 | | buildings and
structural components of buildings; |
25 | | (B) is depreciable pursuant to Section 167 of the |
26 | | Internal Revenue
Code, except that "3-year property" |
|
| | SB2531 | - 59 - | LRB102 15312 HLH 20668 b |
|
|
1 | | as defined in Section 168(c)(2)(A) of
that Code is not |
2 | | eligible for the credit provided by this subsection |
3 | | (f); |
4 | | (C) is acquired by purchase as defined in Section |
5 | | 179(d) of
the Internal Revenue Code; |
6 | | (D) is used in the Enterprise Zone or River Edge |
7 | | Redevelopment Zone by the taxpayer; and |
8 | | (E) has not been previously used in Illinois in |
9 | | such a manner and by
such a person as would qualify for |
10 | | the credit provided by this subsection
(f) or |
11 | | subsection (e). |
12 | | (3) The basis of qualified property shall be the basis |
13 | | used to compute
the depreciation deduction for federal |
14 | | income tax purposes. |
15 | | (4) If the basis of the property for federal income |
16 | | tax depreciation
purposes is increased after it has been |
17 | | placed in service in the Enterprise
Zone or River Edge |
18 | | Redevelopment Zone by the taxpayer, the amount of such |
19 | | increase shall be deemed property
placed in service on the |
20 | | date of such increase in basis. |
21 | | (5) The term "placed in service" shall have the same |
22 | | meaning as under
Section 46 of the Internal Revenue Code. |
23 | | (6) If during any taxable year, any property ceases to |
24 | | be qualified
property in the hands of the taxpayer within |
25 | | 48 months after being placed
in service, or the situs of |
26 | | any qualified property is moved outside the
Enterprise |
|
| | SB2531 | - 60 - | LRB102 15312 HLH 20668 b |
|
|
1 | | Zone or River Edge Redevelopment Zone within 48 months |
2 | | after being placed in service, the tax
imposed under |
3 | | subsections (a) and (b) of this Section for such taxable |
4 | | year
shall be increased. Such increase shall be determined |
5 | | by (i) recomputing
the investment credit which would have |
6 | | been allowed for the year in which
credit for such |
7 | | property was originally allowed by eliminating such
|
8 | | property from such computation, and (ii) subtracting such |
9 | | recomputed credit
from the amount of credit previously |
10 | | allowed. For the purposes of this
paragraph (6), a |
11 | | reduction of the basis of qualified property resulting
|
12 | | from a redetermination of the purchase price shall be |
13 | | deemed a disposition
of qualified property to the extent |
14 | | of such reduction. |
15 | | (7) There shall be allowed an additional credit equal |
16 | | to 0.5% of the basis of qualified property placed in |
17 | | service during the taxable year in a River Edge |
18 | | Redevelopment Zone, provided such property is placed in |
19 | | service on or after July 1, 2006, and the taxpayer's base |
20 | | employment within Illinois has increased by 1% or more |
21 | | over the preceding year as determined by the taxpayer's |
22 | | employment records filed with the Illinois Department of |
23 | | Employment Security. Taxpayers who are new to Illinois |
24 | | shall be deemed to have met the 1% growth in base |
25 | | employment for the first year in which they file |
26 | | employment records with the Illinois Department of |
|
| | SB2531 | - 61 - | LRB102 15312 HLH 20668 b |
|
|
1 | | Employment Security. If, in any year, the increase in base |
2 | | employment within Illinois over the preceding year is less |
3 | | than 1%, the additional credit shall be limited to that |
4 | | percentage times a fraction, the numerator of which is |
5 | | 0.5% and the denominator of which is 1%, but shall not |
6 | | exceed 0.5%.
|
7 | | (8) For taxable years beginning on or after January 1, |
8 | | 2021, there shall be allowed an Enterprise Zone |
9 | | construction jobs credit against the taxes imposed under |
10 | | subsections (a) and (b) of this Section as provided in |
11 | | Section 13 of the Illinois Enterprise Zone Act. |
12 | | The credit or credits may not reduce the taxpayer's |
13 | | liability to less than zero. If the amount of the credit or |
14 | | credits exceeds the taxpayer's liability, the excess may |
15 | | be carried forward and applied against the taxpayer's |
16 | | liability in succeeding calendar years in the same manner |
17 | | provided under paragraph (4) of Section 211 of this Act. |
18 | | The credit or credits shall be applied to the earliest |
19 | | year for which there is a tax liability. If there are |
20 | | credits from more than one taxable year that are available |
21 | | to offset a liability, the earlier credit shall be applied |
22 | | first. |
23 | | For partners, shareholders of Subchapter S |
24 | | corporations, and owners of limited liability companies, |
25 | | if the liability company is treated as a partnership for |
26 | | the purposes of federal and State income taxation, there |
|
| | SB2531 | - 62 - | LRB102 15312 HLH 20668 b |
|
|
1 | | shall be allowed a credit under this Section to be |
2 | | determined in accordance with the determination of income |
3 | | and distributive share of income under Sections 702 and |
4 | | 704 and Subchapter S of the Internal Revenue Code. |
5 | | The total aggregate amount of credits awarded under |
6 | | the Blue Collar Jobs Act (Article 20 of Public Act 101-9 |
7 | | this amendatory Act of the 101st General Assembly ) shall |
8 | | not exceed $20,000,000 in any State fiscal year . |
9 | | This paragraph (8) is exempt from the provisions of |
10 | | Section 250. |
11 | | (g) (Blank). |
12 | | (h) Investment credit; High Impact Business. |
13 | | (1) Subject to subsections (b) and (b-5) of Section
|
14 | | 5.5 of the Illinois Enterprise Zone Act, a taxpayer shall |
15 | | be allowed a credit
against the tax imposed by subsections |
16 | | (a) and (b) of this Section for
investment in qualified
|
17 | | property which is placed in service by a Department of |
18 | | Commerce and Economic Opportunity
designated High Impact |
19 | | Business. The credit shall be .5% of the basis
for such |
20 | | property. The credit shall not be available (i) until the |
21 | | minimum
investments in qualified property set forth in |
22 | | subdivision (a)(3)(A) of
Section 5.5 of the Illinois
|
23 | | Enterprise Zone Act have been satisfied
or (ii) until the |
24 | | time authorized in subsection (b-5) of the Illinois
|
25 | | Enterprise Zone Act for entities designated as High Impact |
26 | | Businesses under
subdivisions (a)(3)(B), (a)(3)(C), and |
|
| | SB2531 | - 63 - | LRB102 15312 HLH 20668 b |
|
|
1 | | (a)(3)(D) of Section 5.5 of the Illinois
Enterprise Zone |
2 | | Act, and shall not be allowed to the extent that it would
|
3 | | reduce a taxpayer's liability for the tax imposed by |
4 | | subsections (a) and (b) of
this Section to below zero. The |
5 | | credit applicable to such investments shall be
taken in |
6 | | the taxable year in which such investments have been |
7 | | completed. The
credit for additional investments beyond |
8 | | the minimum investment by a designated
high impact |
9 | | business authorized under subdivision (a)(3)(A) of Section |
10 | | 5.5 of
the Illinois Enterprise Zone Act shall be available |
11 | | only in the taxable year in
which the property is placed in |
12 | | service and shall not be allowed to the extent
that it |
13 | | would reduce a taxpayer's liability for the tax imposed by |
14 | | subsections
(a) and (b) of this Section to below zero.
For |
15 | | tax years ending on or after December 31, 1987, the credit |
16 | | shall be
allowed for the tax year in which the property is |
17 | | placed in service, or, if
the amount of the credit exceeds |
18 | | the tax liability for that year, whether
it exceeds the |
19 | | original liability or the liability as later amended, such
|
20 | | excess may be carried forward and applied to the tax |
21 | | liability of the 5
taxable years following the excess |
22 | | credit year. The credit shall be
applied to the earliest |
23 | | year for which there is a liability. If there is
credit |
24 | | from more than one tax year that is available to offset a |
25 | | liability,
the credit accruing first in time shall be |
26 | | applied first. |
|
| | SB2531 | - 64 - | LRB102 15312 HLH 20668 b |
|
|
1 | | Changes made in this subdivision (h)(1) by Public Act |
2 | | 88-670
restore changes made by Public Act 85-1182 and |
3 | | reflect existing law. |
4 | | (2) The term qualified property means property which: |
5 | | (A) is tangible, whether new or used, including |
6 | | buildings and
structural components of buildings; |
7 | | (B) is depreciable pursuant to Section 167 of the |
8 | | Internal Revenue
Code, except that "3-year property" |
9 | | as defined in Section 168(c)(2)(A) of
that Code is not |
10 | | eligible for the credit provided by this subsection |
11 | | (h); |
12 | | (C) is acquired by purchase as defined in Section |
13 | | 179(d) of the
Internal Revenue Code; and |
14 | | (D) is not eligible for the Enterprise Zone |
15 | | Investment Credit provided
by subsection (f) of this |
16 | | Section. |
17 | | (3) The basis of qualified property shall be the basis |
18 | | used to compute
the depreciation deduction for federal |
19 | | income tax purposes. |
20 | | (4) If the basis of the property for federal income |
21 | | tax depreciation
purposes is increased after it has been |
22 | | placed in service in a federally
designated Foreign Trade |
23 | | Zone or Sub-Zone located in Illinois by the taxpayer,
the |
24 | | amount of such increase shall be deemed property placed in |
25 | | service on
the date of such increase in basis. |
26 | | (5) The term "placed in service" shall have the same |
|
| | SB2531 | - 65 - | LRB102 15312 HLH 20668 b |
|
|
1 | | meaning as under
Section 46 of the Internal Revenue Code. |
2 | | (6) If during any taxable year ending on or before |
3 | | December 31, 1996,
any property ceases to be qualified
|
4 | | property in the hands of the taxpayer within 48 months |
5 | | after being placed
in service, or the situs of any |
6 | | qualified property is moved outside
Illinois within 48 |
7 | | months after being placed in service, the tax imposed
|
8 | | under subsections (a) and (b) of this Section for such |
9 | | taxable year shall
be increased. Such increase shall be |
10 | | determined by (i) recomputing the
investment credit which |
11 | | would have been allowed for the year in which
credit for |
12 | | such property was originally allowed by eliminating such
|
13 | | property from such computation, and (ii) subtracting such |
14 | | recomputed credit
from the amount of credit previously |
15 | | allowed. For the purposes of this
paragraph (6), a |
16 | | reduction of the basis of qualified property resulting
|
17 | | from a redetermination of the purchase price shall be |
18 | | deemed a disposition
of qualified property to the extent |
19 | | of such reduction. |
20 | | (7) Beginning with tax years ending after December 31, |
21 | | 1996, if a
taxpayer qualifies for the credit under this |
22 | | subsection (h) and thereby is
granted a tax abatement and |
23 | | the taxpayer relocates its entire facility in
violation of |
24 | | the explicit terms and length of the contract under |
25 | | Section
18-183 of the Property Tax Code, the tax imposed |
26 | | under subsections
(a) and (b) of this Section shall be |
|
| | SB2531 | - 66 - | LRB102 15312 HLH 20668 b |
|
|
1 | | increased for the taxable year
in which the taxpayer |
2 | | relocated its facility by an amount equal to the
amount of |
3 | | credit received by the taxpayer under this subsection (h). |
4 | | (h-5) High Impact Business construction constructions jobs |
5 | | credit. For taxable years beginning on or after January 1, |
6 | | 2021, there shall also be allowed a High Impact Business |
7 | | construction jobs credit against the tax imposed under |
8 | | subsections (a) and (b) of this Section as provided in |
9 | | subsections (i) and (j) of Section 5.5 of the Illinois |
10 | | Enterprise Zone Act. |
11 | | The credit or credits may not reduce the taxpayer's |
12 | | liability to less than zero. If the amount of the credit or |
13 | | credits exceeds the taxpayer's liability, the excess may be |
14 | | carried forward and applied against the taxpayer's liability |
15 | | in succeeding calendar years in the manner provided under |
16 | | paragraph (4) of Section 211 of this Act. The credit or credits |
17 | | shall be applied to the earliest year for which there is a tax |
18 | | liability. If there are credits from more than one taxable |
19 | | year that are available to offset a liability, the earlier |
20 | | credit shall be applied first. |
21 | | For partners, shareholders of Subchapter S corporations, |
22 | | and owners of limited liability companies, if the liability |
23 | | company is treated as a partnership for the purposes of |
24 | | federal and State income taxation, there shall be allowed a |
25 | | credit under this Section to be determined in accordance with |
26 | | the determination of income and distributive share of income |
|
| | SB2531 | - 67 - | LRB102 15312 HLH 20668 b |
|
|
1 | | under Sections 702 and 704 and Subchapter S of the Internal |
2 | | Revenue Code. |
3 | | The total aggregate amount of credits awarded under the |
4 | | Blue Collar Jobs Act (Article 20 of Public Act 101-9 this |
5 | | amendatory Act of the 101st General Assembly ) shall not exceed |
6 | | $20,000,000 in any State fiscal year . |
7 | | This subsection (h-5) is exempt from the provisions of |
8 | | Section 250. |
9 | | (i) Credit for Personal Property Tax Replacement Income |
10 | | Tax.
For tax years ending prior to December 31, 2003, a credit |
11 | | shall be allowed
against the tax imposed by
subsections (a) |
12 | | and (b) of this Section for the tax imposed by subsections (c)
|
13 | | and (d) of this Section. This credit shall be computed by |
14 | | multiplying the tax
imposed by subsections (c) and (d) of this |
15 | | Section by a fraction, the numerator
of which is base income |
16 | | allocable to Illinois and the denominator of which is
Illinois |
17 | | base income, and further multiplying the product by the tax |
18 | | rate
imposed by subsections (a) and (b) of this Section. |
19 | | Any credit earned on or after December 31, 1986 under
this |
20 | | subsection which is unused in the year
the credit is computed |
21 | | because it exceeds the tax liability imposed by
subsections |
22 | | (a) and (b) for that year (whether it exceeds the original
|
23 | | liability or the liability as later amended) may be carried |
24 | | forward and
applied to the tax liability imposed by |
25 | | subsections (a) and (b) of the 5
taxable years following the |
26 | | excess credit year, provided that no credit may
be carried |
|
| | SB2531 | - 68 - | LRB102 15312 HLH 20668 b |
|
|
1 | | forward to any year ending on or
after December 31, 2003. This |
2 | | credit shall be
applied first to the earliest year for which |
3 | | there is a liability. If
there is a credit under this |
4 | | subsection from more than one tax year that is
available to |
5 | | offset a liability the earliest credit arising under this
|
6 | | subsection shall be applied first. |
7 | | If, during any taxable year ending on or after December |
8 | | 31, 1986, the
tax imposed by subsections (c) and (d) of this |
9 | | Section for which a taxpayer
has claimed a credit under this |
10 | | subsection (i) is reduced, the amount of
credit for such tax |
11 | | shall also be reduced. Such reduction shall be
determined by |
12 | | recomputing the credit to take into account the reduced tax
|
13 | | imposed by subsections (c) and (d). If any portion of the
|
14 | | reduced amount of credit has been carried to a different |
15 | | taxable year, an
amended return shall be filed for such |
16 | | taxable year to reduce the amount of
credit claimed. |
17 | | (j) Training expense credit. Beginning with tax years |
18 | | ending on or
after December 31, 1986 and prior to December 31, |
19 | | 2003, a taxpayer shall be
allowed a credit against the
tax |
20 | | imposed by subsections (a) and (b) under this Section
for all |
21 | | amounts paid or accrued, on behalf of all persons
employed by |
22 | | the taxpayer in Illinois or Illinois residents employed
|
23 | | outside of Illinois by a taxpayer, for educational or |
24 | | vocational training in
semi-technical or technical fields or |
25 | | semi-skilled or skilled fields, which
were deducted from gross |
26 | | income in the computation of taxable income. The
credit |
|
| | SB2531 | - 69 - | LRB102 15312 HLH 20668 b |
|
|
1 | | against the tax imposed by subsections (a) and (b) shall be |
2 | | 1.6% of
such training expenses. For partners, shareholders of |
3 | | subchapter S
corporations, and owners of limited liability |
4 | | companies, if the liability
company is treated as a |
5 | | partnership for purposes of federal and State income
taxation, |
6 | | there shall be allowed a credit under this subsection (j) to be
|
7 | | determined in accordance with the determination of income and |
8 | | distributive
share of income under Sections 702 and 704 and |
9 | | subchapter S of the Internal
Revenue Code. |
10 | | Any credit allowed under this subsection which is unused |
11 | | in the year
the credit is earned may be carried forward to each |
12 | | of the 5 taxable
years following the year for which the credit |
13 | | is first computed until it is
used. This credit shall be |
14 | | applied first to the earliest year for which
there is a |
15 | | liability. If there is a credit under this subsection from |
16 | | more
than one tax year that is available to offset a liability , |
17 | | the earliest
credit arising under this subsection shall be |
18 | | applied first. No carryforward
credit may be claimed in any |
19 | | tax year ending on or after
December 31, 2003. |
20 | | (k) Research and development credit. For tax years ending |
21 | | after July 1, 1990 and prior to
December 31, 2003, and |
22 | | beginning again for tax years ending on or after December 31, |
23 | | 2004, and ending prior to January 1, 2027, a taxpayer shall be
|
24 | | allowed a credit against the tax imposed by subsections (a) |
25 | | and (b) of this
Section for increasing research activities in |
26 | | this State. The credit
allowed against the tax imposed by |
|
| | SB2531 | - 70 - | LRB102 15312 HLH 20668 b |
|
|
1 | | subsections (a) and (b) shall be equal
to 6 1/2% of the |
2 | | qualifying expenditures for increasing research activities
in |
3 | | this State. For partners, shareholders of subchapter S |
4 | | corporations, and
owners of limited liability companies, if |
5 | | the liability company is treated as a
partnership for purposes |
6 | | of federal and State income taxation, there shall be
allowed a |
7 | | credit under this subsection to be determined in accordance |
8 | | with the
determination of income and distributive share of |
9 | | income under Sections 702 and
704 and subchapter S of the |
10 | | Internal Revenue Code. |
11 | | For purposes of this subsection, "qualifying expenditures" |
12 | | means the
qualifying expenditures as defined for the federal |
13 | | credit for increasing
research activities which would be |
14 | | allowable under Section 41 of the
Internal Revenue Code and |
15 | | which are conducted in this State, "qualifying
expenditures |
16 | | for increasing research activities in this State" means the
|
17 | | excess of qualifying expenditures for the taxable year in |
18 | | which incurred
over qualifying expenditures for the base |
19 | | period, "qualifying expenditures
for the base period" means |
20 | | the average of the qualifying expenditures for
each year in |
21 | | the base period, and "base period" means the 3 taxable years
|
22 | | immediately preceding the taxable year for which the |
23 | | determination is
being made. |
24 | | Any credit in excess of the tax liability for the taxable |
25 | | year
may be carried forward. A taxpayer may elect to have the
|
26 | | unused credit shown on its final completed return carried over |
|
| | SB2531 | - 71 - | LRB102 15312 HLH 20668 b |
|
|
1 | | as a credit
against the tax liability for the following 5 |
2 | | taxable years or until it has
been fully used, whichever |
3 | | occurs first; provided that no credit earned in a tax year |
4 | | ending prior to December 31, 2003 may be carried forward to any |
5 | | year ending on or after December 31, 2003. |
6 | | If an unused credit is carried forward to a given year from |
7 | | 2 or more
earlier years, that credit arising in the earliest |
8 | | year will be applied
first against the tax liability for the |
9 | | given year. If a tax liability for
the given year still |
10 | | remains, the credit from the next earliest year will
then be |
11 | | applied, and so on, until all credits have been used or no tax
|
12 | | liability for the given year remains. Any remaining unused |
13 | | credit or
credits then will be carried forward to the next |
14 | | following year in which a
tax liability is incurred, except |
15 | | that no credit can be carried forward to
a year which is more |
16 | | than 5 years after the year in which the expense for
which the |
17 | | credit is given was incurred. |
18 | | No inference shall be drawn from Public Act 91-644 this |
19 | | amendatory Act of the 91st General
Assembly in construing this |
20 | | Section for taxable years beginning before January
1, 1999. |
21 | | It is the intent of the General Assembly that the research |
22 | | and development credit under this subsection (k) shall apply |
23 | | continuously for all tax years ending on or after December 31, |
24 | | 2004 and ending prior to January 1, 2027, including, but not |
25 | | limited to, the period beginning on January 1, 2016 and ending |
26 | | on July 6, 2017 ( the effective date of Public Act 100-22) this |
|
| | SB2531 | - 72 - | LRB102 15312 HLH 20668 b |
|
|
1 | | amendatory Act of the 100th General Assembly . All actions |
2 | | taken in reliance on the continuation of the credit under this |
3 | | subsection (k) by any taxpayer are hereby validated. |
4 | | (l) Environmental Remediation Tax Credit. |
5 | | (i) For tax years ending after December 31, 1997 and |
6 | | on or before
December 31, 2001, a taxpayer shall be |
7 | | allowed a credit against the tax
imposed by subsections |
8 | | (a) and (b) of this Section for certain amounts paid
for |
9 | | unreimbursed eligible remediation costs, as specified in |
10 | | this subsection.
For purposes of this Section, |
11 | | "unreimbursed eligible remediation costs" means
costs |
12 | | approved by the Illinois Environmental Protection Agency |
13 | | ("Agency") under
Section 58.14 of the Environmental |
14 | | Protection Act that were paid in performing
environmental |
15 | | remediation at a site for which a No Further Remediation |
16 | | Letter
was issued by the Agency and recorded under Section |
17 | | 58.10 of the Environmental
Protection Act. The credit must |
18 | | be claimed for the taxable year in which
Agency approval |
19 | | of the eligible remediation costs is granted. The credit |
20 | | is
not available to any taxpayer if the taxpayer or any |
21 | | related party caused or
contributed to, in any material |
22 | | respect, a release of regulated substances on,
in, or |
23 | | under the site that was identified and addressed by the |
24 | | remedial
action pursuant to the Site Remediation Program |
25 | | of the Environmental Protection
Act. After the Pollution |
26 | | Control Board rules are adopted pursuant to the
Illinois |
|
| | SB2531 | - 73 - | LRB102 15312 HLH 20668 b |
|
|
1 | | Administrative Procedure Act for the administration and |
2 | | enforcement of
Section 58.9 of the Environmental |
3 | | Protection Act, determinations as to credit
availability |
4 | | for purposes of this Section shall be made consistent with |
5 | | those
rules. For purposes of this Section, "taxpayer" |
6 | | includes a person whose tax
attributes the taxpayer has |
7 | | succeeded to under Section 381 of the Internal
Revenue |
8 | | Code and "related party" includes the persons disallowed a |
9 | | deduction
for losses by paragraphs (b), (c), and (f)(1) of |
10 | | Section 267 of the Internal
Revenue Code by virtue of |
11 | | being a related taxpayer, as well as any of its
partners. |
12 | | The credit allowed against the tax imposed by subsections |
13 | | (a) and
(b) shall be equal to 25% of the unreimbursed |
14 | | eligible remediation costs in
excess of $100,000 per site, |
15 | | except that the $100,000 threshold shall not apply
to any |
16 | | site contained in an enterprise zone as determined by the |
17 | | Department of
Commerce and Community Affairs (now |
18 | | Department of Commerce and Economic Opportunity). The |
19 | | total credit allowed shall not exceed
$40,000 per year |
20 | | with a maximum total of $150,000 per site. For partners |
21 | | and
shareholders of subchapter S corporations, there shall |
22 | | be allowed a credit
under this subsection to be determined |
23 | | in accordance with the determination of
income and |
24 | | distributive share of income under Sections 702 and 704 |
25 | | and
subchapter S of the Internal Revenue Code. |
26 | | (ii) A credit allowed under this subsection that is |
|
| | SB2531 | - 74 - | LRB102 15312 HLH 20668 b |
|
|
1 | | unused in the year
the credit is earned may be carried |
2 | | forward to each of the 5 taxable years
following the year |
3 | | for which the credit is first earned until it is used.
The |
4 | | term "unused credit" does not include any amounts of |
5 | | unreimbursed eligible
remediation costs in excess of the |
6 | | maximum credit per site authorized under
paragraph (i). |
7 | | This credit shall be applied first to the earliest year
|
8 | | for which there is a liability. If there is a credit under |
9 | | this subsection
from more than one tax year that is |
10 | | available to offset a liability, the
earliest credit |
11 | | arising under this subsection shall be applied first. A
|
12 | | credit allowed under this subsection may be sold to a |
13 | | buyer as part of a sale
of all or part of the remediation |
14 | | site for which the credit was granted. The
purchaser of a |
15 | | remediation site and the tax credit shall succeed to the |
16 | | unused
credit and remaining carry-forward period of the |
17 | | seller. To perfect the
transfer, the assignor shall record |
18 | | the transfer in the chain of title for the
site and provide |
19 | | written notice to the Director of the Illinois Department |
20 | | of
Revenue of the assignor's intent to sell the |
21 | | remediation site and the amount of
the tax credit to be |
22 | | transferred as a portion of the sale. In no event may a
|
23 | | credit be transferred to any taxpayer if the taxpayer or a |
24 | | related party would
not be eligible under the provisions |
25 | | of subsection (i). |
26 | | (iii) For purposes of this Section, the term "site" |
|
| | SB2531 | - 75 - | LRB102 15312 HLH 20668 b |
|
|
1 | | shall have the same
meaning as under Section 58.2 of the |
2 | | Environmental Protection Act. |
3 | | (m) Education expense credit. Beginning with tax years |
4 | | ending after
December 31, 1999, a taxpayer who
is the |
5 | | custodian of one or more qualifying pupils shall be allowed a |
6 | | credit
against the tax imposed by subsections (a) and (b) of |
7 | | this Section for
qualified education expenses incurred on |
8 | | behalf of the qualifying pupils.
The credit shall be equal to |
9 | | 25% of qualified education expenses, but in no
event may the |
10 | | total credit under this subsection claimed by a
family that is |
11 | | the
custodian of qualifying pupils exceed (i) $500 for tax |
12 | | years ending prior to December 31, 2017, and (ii) $750 for tax |
13 | | years ending on or after December 31, 2017. In no event shall a |
14 | | credit under
this subsection reduce the taxpayer's liability |
15 | | under this Act to less than
zero. Notwithstanding any other |
16 | | provision of law, for taxable years beginning on or after |
17 | | January 1, 2017, no taxpayer may claim a credit under this |
18 | | subsection (m) if the taxpayer's adjusted gross income for the |
19 | | taxable year exceeds (i) $500,000, in the case of spouses |
20 | | filing a joint federal tax return or (ii) $250,000, in the case |
21 | | of all other taxpayers. This subsection is exempt from the |
22 | | provisions of Section 250 of this
Act. |
23 | | For purposes of this subsection: |
24 | | "Qualifying pupils" means individuals who (i) are |
25 | | residents of the State of
Illinois, (ii) are under the age of |
26 | | 21 at the close of the school year for
which a credit is |
|
| | SB2531 | - 76 - | LRB102 15312 HLH 20668 b |
|
|
1 | | sought, and (iii) during the school year for which a credit
is |
2 | | sought were full-time pupils enrolled in a kindergarten |
3 | | through twelfth
grade education program at any school, as |
4 | | defined in this subsection. |
5 | | "Qualified education expense" means the amount incurred
on |
6 | | behalf of a qualifying pupil in excess of $250 for tuition, |
7 | | book fees, and
lab fees at the school in which the pupil is |
8 | | enrolled during the regular school
year. |
9 | | "School" means any public or nonpublic elementary or |
10 | | secondary school in
Illinois that is in compliance with Title |
11 | | VI of the Civil Rights Act of 1964
and attendance at which |
12 | | satisfies the requirements of Section 26-1 of the
School Code, |
13 | | except that nothing shall be construed to require a child to
|
14 | | attend any particular public or nonpublic school to qualify |
15 | | for the credit
under this Section. |
16 | | "Custodian" means, with respect to qualifying pupils, an |
17 | | Illinois resident
who is a parent, the parents, a legal |
18 | | guardian, or the legal guardians of the
qualifying pupils. |
19 | | (n) River Edge Redevelopment Zone site remediation tax |
20 | | credit.
|
21 | | (i) For tax years ending on or after December 31, |
22 | | 2006, a taxpayer shall be allowed a credit against the tax |
23 | | imposed by subsections (a) and (b) of this Section for |
24 | | certain amounts paid for unreimbursed eligible remediation |
25 | | costs, as specified in this subsection. For purposes of |
26 | | this Section, "unreimbursed eligible remediation costs" |
|
| | SB2531 | - 77 - | LRB102 15312 HLH 20668 b |
|
|
1 | | means costs approved by the Illinois Environmental |
2 | | Protection Agency ("Agency") under Section 58.14a of the |
3 | | Environmental Protection Act that were paid in performing |
4 | | environmental remediation at a site within a River Edge |
5 | | Redevelopment Zone for which a No Further Remediation |
6 | | Letter was issued by the Agency and recorded under Section |
7 | | 58.10 of the Environmental Protection Act. The credit must |
8 | | be claimed for the taxable year in which Agency approval |
9 | | of the eligible remediation costs is granted. The credit |
10 | | is not available to any taxpayer if the taxpayer or any |
11 | | related party caused or contributed to, in any material |
12 | | respect, a release of regulated substances on, in, or |
13 | | under the site that was identified and addressed by the |
14 | | remedial action pursuant to the Site Remediation Program |
15 | | of the Environmental Protection Act. Determinations as to |
16 | | credit availability for purposes of this Section shall be |
17 | | made consistent with rules adopted by the Pollution |
18 | | Control Board pursuant to the Illinois Administrative |
19 | | Procedure Act for the administration and enforcement of |
20 | | Section 58.9 of the Environmental Protection Act. For |
21 | | purposes of this Section, "taxpayer" includes a person |
22 | | whose tax attributes the taxpayer has succeeded to under |
23 | | Section 381 of the Internal Revenue Code and "related |
24 | | party" includes the persons disallowed a deduction for |
25 | | losses by paragraphs (b), (c), and (f)(1) of Section 267 |
26 | | of the Internal Revenue Code by virtue of being a related |
|
| | SB2531 | - 78 - | LRB102 15312 HLH 20668 b |
|
|
1 | | taxpayer, as well as any of its partners. The credit |
2 | | allowed against the tax imposed by subsections (a) and (b) |
3 | | shall be equal to 25% of the unreimbursed eligible |
4 | | remediation costs in excess of $100,000 per site. |
5 | | (ii) A credit allowed under this subsection that is |
6 | | unused in the year the credit is earned may be carried |
7 | | forward to each of the 5 taxable years following the year |
8 | | for which the credit is first earned until it is used. This |
9 | | credit shall be applied first to the earliest year for |
10 | | which there is a liability. If there is a credit under this |
11 | | subsection from more than one tax year that is available |
12 | | to offset a liability, the earliest credit arising under |
13 | | this subsection shall be applied first. A credit allowed |
14 | | under this subsection may be sold to a buyer as part of a |
15 | | sale of all or part of the remediation site for which the |
16 | | credit was granted. The purchaser of a remediation site |
17 | | and the tax credit shall succeed to the unused credit and |
18 | | remaining carry-forward period of the seller. To perfect |
19 | | the transfer, the assignor shall record the transfer in |
20 | | the chain of title for the site and provide written notice |
21 | | to the Director of the Illinois Department of Revenue of |
22 | | the assignor's intent to sell the remediation site and the |
23 | | amount of the tax credit to be transferred as a portion of |
24 | | the sale. In no event may a credit be transferred to any |
25 | | taxpayer if the taxpayer or a related party would not be |
26 | | eligible under the provisions of subsection (i). |
|
| | SB2531 | - 79 - | LRB102 15312 HLH 20668 b |
|
|
1 | | (iii) For purposes of this Section, the term "site" |
2 | | shall have the same meaning as under Section 58.2 of the |
3 | | Environmental Protection Act. |
4 | | (o) For each of taxable years during the Compassionate Use |
5 | | of Medical Cannabis Program, a surcharge is imposed on all |
6 | | taxpayers on income arising from the sale or exchange of |
7 | | capital assets, depreciable business property, real property |
8 | | used in the trade or business, and Section 197 intangibles of |
9 | | an organization registrant under the Compassionate Use of |
10 | | Medical Cannabis Program Act. The amount of the surcharge is |
11 | | equal to the amount of federal income tax liability for the |
12 | | taxable year attributable to those sales and exchanges. The |
13 | | surcharge imposed does not apply if: |
14 | | (1) the medical cannabis cultivation center |
15 | | registration, medical cannabis dispensary registration, or |
16 | | the property of a registration is transferred as a result |
17 | | of any of the following: |
18 | | (A) bankruptcy, a receivership, or a debt |
19 | | adjustment initiated by or against the initial |
20 | | registration or the substantial owners of the initial |
21 | | registration; |
22 | | (B) cancellation, revocation, or termination of |
23 | | any registration by the Illinois Department of Public |
24 | | Health; |
25 | | (C) a determination by the Illinois Department of |
26 | | Public Health that transfer of the registration is in |
|
| | SB2531 | - 80 - | LRB102 15312 HLH 20668 b |
|
|
1 | | the best interests of Illinois qualifying patients as |
2 | | defined by the Compassionate Use of Medical Cannabis |
3 | | Program Act; |
4 | | (D) the death of an owner of the equity interest in |
5 | | a registrant; |
6 | | (E) the acquisition of a controlling interest in |
7 | | the stock or substantially all of the assets of a |
8 | | publicly traded company; |
9 | | (F) a transfer by a parent company to a wholly |
10 | | owned subsidiary; or |
11 | | (G) the transfer or sale to or by one person to |
12 | | another person where both persons were initial owners |
13 | | of the registration when the registration was issued; |
14 | | or |
15 | | (2) the cannabis cultivation center registration, |
16 | | medical cannabis dispensary registration, or the |
17 | | controlling interest in a registrant's property is |
18 | | transferred in a transaction to lineal descendants in |
19 | | which no gain or loss is recognized or as a result of a |
20 | | transaction in accordance with Section 351 of the Internal |
21 | | Revenue Code in which no gain or loss is recognized. |
22 | | (Source: P.A. 100-22, eff. 7-6-17; 101-8, see Section 99 for |
23 | | effective date; 101-9, eff. 6-5-19; 101-31, eff. 6-28-19; |
24 | | 101-207, eff. 8-2-19; 101-363, eff. 8-9-19; revised 11-18-20.) |
25 | | (35 ILCS 5/203) (from Ch. 120, par. 2-203) |
|
| | SB2531 | - 81 - | LRB102 15312 HLH 20668 b |
|
|
1 | | Sec. 203. Base income defined. |
2 | | (a) Individuals. |
3 | | (1) In general. In the case of an individual, base |
4 | | income means an
amount equal to the taxpayer's adjusted |
5 | | gross income for the taxable
year as modified by paragraph |
6 | | (2). |
7 | | (2) Modifications. The adjusted gross income referred |
8 | | to in
paragraph (1) shall be modified by adding thereto |
9 | | the sum of the
following amounts: |
10 | | (A) An amount equal to all amounts paid or accrued |
11 | | to the taxpayer
as interest or dividends during the |
12 | | taxable year to the extent excluded
from gross income |
13 | | in the computation of adjusted gross income, except |
14 | | stock
dividends of qualified public utilities |
15 | | described in Section 305(e) of the
Internal Revenue |
16 | | Code; |
17 | | (B) An amount equal to the amount of tax imposed by |
18 | | this Act to the
extent deducted from gross income in |
19 | | the computation of adjusted gross
income for the |
20 | | taxable year; |
21 | | (C) An amount equal to the amount received during |
22 | | the taxable year
as a recovery or refund of real |
23 | | property taxes paid with respect to the
taxpayer's |
24 | | principal residence under the Revenue Act of
1939 and |
25 | | for which a deduction was previously taken under |
26 | | subparagraph (L) of
this paragraph (2) prior to July |
|
| | SB2531 | - 82 - | LRB102 15312 HLH 20668 b |
|
|
1 | | 1, 1991, the retrospective application date of
Article |
2 | | 4 of Public Act 87-17. In the case of multi-unit or |
3 | | multi-use
structures and farm dwellings, the taxes on |
4 | | the taxpayer's principal residence
shall be that |
5 | | portion of the total taxes for the entire property |
6 | | which is
attributable to such principal residence; |
7 | | (D) An amount equal to the amount of the capital |
8 | | gain deduction
allowable under the Internal Revenue |
9 | | Code, to the extent deducted from gross
income in the |
10 | | computation of adjusted gross income; |
11 | | (D-5) An amount, to the extent not included in |
12 | | adjusted gross income,
equal to the amount of money |
13 | | withdrawn by the taxpayer in the taxable year from
a |
14 | | medical care savings account and the interest earned |
15 | | on the account in the
taxable year of a withdrawal |
16 | | pursuant to subsection (b) of Section 20 of the
|
17 | | Medical Care Savings Account Act or subsection (b) of |
18 | | Section 20 of the
Medical Care Savings Account Act of |
19 | | 2000; |
20 | | (D-10) For taxable years ending after December 31, |
21 | | 1997, an
amount equal to any eligible remediation |
22 | | costs that the individual
deducted in computing |
23 | | adjusted gross income and for which the
individual |
24 | | claims a credit under subsection (l) of Section 201; |
25 | | (D-15) For taxable years 2001 and thereafter, an |
26 | | amount equal to the
bonus depreciation deduction taken |
|
| | SB2531 | - 83 - | LRB102 15312 HLH 20668 b |
|
|
1 | | on the taxpayer's federal income tax return for the |
2 | | taxable
year under subsection (k) of Section 168 of |
3 | | the Internal Revenue Code; |
4 | | (D-16) If the taxpayer sells, transfers, abandons, |
5 | | or otherwise disposes of property for which the |
6 | | taxpayer was required in any taxable year to
make an |
7 | | addition modification under subparagraph (D-15), then |
8 | | an amount equal
to the aggregate amount of the |
9 | | deductions taken in all taxable
years under |
10 | | subparagraph (Z) with respect to that property. |
11 | | If the taxpayer continues to own property through |
12 | | the last day of the last tax year for which the |
13 | | taxpayer may claim a depreciation deduction for |
14 | | federal income tax purposes and for which the taxpayer |
15 | | was allowed in any taxable year to make a subtraction |
16 | | modification under subparagraph (Z), then an amount |
17 | | equal to that subtraction modification.
|
18 | | The taxpayer is required to make the addition |
19 | | modification under this
subparagraph
only once with |
20 | | respect to any one piece of property; |
21 | | (D-17) An amount equal to the amount otherwise |
22 | | allowed as a deduction in computing base income for |
23 | | interest paid, accrued, or incurred, directly or |
24 | | indirectly, (i) for taxable years ending on or after |
25 | | December 31, 2004, to a foreign person who would be a |
26 | | member of the same unitary business group but for the |
|
| | SB2531 | - 84 - | LRB102 15312 HLH 20668 b |
|
|
1 | | fact that foreign person's business activity outside |
2 | | the United States is 80% or more of the foreign |
3 | | person's total business activity and (ii) for taxable |
4 | | years ending on or after December 31, 2008, to a person |
5 | | who would be a member of the same unitary business |
6 | | group but for the fact that the person is prohibited |
7 | | under Section 1501(a)(27) from being included in the |
8 | | unitary business group because he or she is ordinarily |
9 | | required to apportion business income under different |
10 | | subsections of Section 304. The addition modification |
11 | | required by this subparagraph shall be reduced to the |
12 | | extent that dividends were included in base income of |
13 | | the unitary group for the same taxable year and |
14 | | received by the taxpayer or by a member of the |
15 | | taxpayer's unitary business group (including amounts |
16 | | included in gross income under Sections 951 through |
17 | | 964 of the Internal Revenue Code and amounts included |
18 | | in gross income under Section 78 of the Internal |
19 | | Revenue Code) with respect to the stock of the same |
20 | | person to whom the interest was paid, accrued, or |
21 | | incurred. |
22 | | This paragraph shall not apply to the following:
|
23 | | (i) an item of interest paid, accrued, or |
24 | | incurred, directly or indirectly, to a person who |
25 | | is subject in a foreign country or state, other |
26 | | than a state which requires mandatory unitary |
|
| | SB2531 | - 85 - | LRB102 15312 HLH 20668 b |
|
|
1 | | reporting, to a tax on or measured by net income |
2 | | with respect to such interest; or |
3 | | (ii) an item of interest paid, accrued, or |
4 | | incurred, directly or indirectly, to a person if |
5 | | the taxpayer can establish, based on a |
6 | | preponderance of the evidence, both of the |
7 | | following: |
8 | | (a) the person, during the same taxable |
9 | | year, paid, accrued, or incurred, the interest |
10 | | to a person that is not a related member, and |
11 | | (b) the transaction giving rise to the |
12 | | interest expense between the taxpayer and the |
13 | | person did not have as a principal purpose the |
14 | | avoidance of Illinois income tax, and is paid |
15 | | pursuant to a contract or agreement that |
16 | | reflects an arm's-length interest rate and |
17 | | terms; or
|
18 | | (iii) the taxpayer can establish, based on |
19 | | clear and convincing evidence, that the interest |
20 | | paid, accrued, or incurred relates to a contract |
21 | | or agreement entered into at arm's-length rates |
22 | | and terms and the principal purpose for the |
23 | | payment is not federal or Illinois tax avoidance; |
24 | | or
|
25 | | (iv) an item of interest paid, accrued, or |
26 | | incurred, directly or indirectly, to a person if |
|
| | SB2531 | - 86 - | LRB102 15312 HLH 20668 b |
|
|
1 | | the taxpayer establishes by clear and convincing |
2 | | evidence that the adjustments are unreasonable; or |
3 | | if the taxpayer and the Director agree in writing |
4 | | to the application or use of an alternative method |
5 | | of apportionment under Section 304(f).
|
6 | | Nothing in this subsection shall preclude the |
7 | | Director from making any other adjustment |
8 | | otherwise allowed under Section 404 of this Act |
9 | | for any tax year beginning after the effective |
10 | | date of this amendment provided such adjustment is |
11 | | made pursuant to regulation adopted by the |
12 | | Department and such regulations provide methods |
13 | | and standards by which the Department will utilize |
14 | | its authority under Section 404 of this Act;
|
15 | | (D-18) An amount equal to the amount of intangible |
16 | | expenses and costs otherwise allowed as a deduction in |
17 | | computing base income, and that were paid, accrued, or |
18 | | incurred, directly or indirectly, (i) for taxable |
19 | | years ending on or after December 31, 2004, to a |
20 | | foreign person who would be a member of the same |
21 | | unitary business group but for the fact that the |
22 | | foreign person's business activity outside the United |
23 | | States is 80% or more of that person's total business |
24 | | activity and (ii) for taxable years ending on or after |
25 | | December 31, 2008, to a person who would be a member of |
26 | | the same unitary business group but for the fact that |
|
| | SB2531 | - 87 - | LRB102 15312 HLH 20668 b |
|
|
1 | | the person is prohibited under Section 1501(a)(27) |
2 | | from being included in the unitary business group |
3 | | because he or she is ordinarily required to apportion |
4 | | business income under different subsections of Section |
5 | | 304. The addition modification required by this |
6 | | subparagraph shall be reduced to the extent that |
7 | | dividends were included in base income of the unitary |
8 | | group for the same taxable year and received by the |
9 | | taxpayer or by a member of the taxpayer's unitary |
10 | | business group (including amounts included in gross |
11 | | income under Sections 951 through 964 of the Internal |
12 | | Revenue Code and amounts included in gross income |
13 | | under Section 78 of the Internal Revenue Code) with |
14 | | respect to the stock of the same person to whom the |
15 | | intangible expenses and costs were directly or |
16 | | indirectly paid, incurred, or accrued. The preceding |
17 | | sentence does not apply to the extent that the same |
18 | | dividends caused a reduction to the addition |
19 | | modification required under Section 203(a)(2)(D-17) of |
20 | | this Act. As used in this subparagraph, the term |
21 | | "intangible expenses and costs" includes (1) expenses, |
22 | | losses, and costs for, or related to, the direct or |
23 | | indirect acquisition, use, maintenance or management, |
24 | | ownership, sale, exchange, or any other disposition of |
25 | | intangible property; (2) losses incurred, directly or |
26 | | indirectly, from factoring transactions or discounting |
|
| | SB2531 | - 88 - | LRB102 15312 HLH 20668 b |
|
|
1 | | transactions; (3) royalty, patent, technical, and |
2 | | copyright fees; (4) licensing fees; and (5) other |
3 | | similar expenses and costs.
For purposes of this |
4 | | subparagraph, "intangible property" includes patents, |
5 | | patent applications, trade names, trademarks, service |
6 | | marks, copyrights, mask works, trade secrets, and |
7 | | similar types of intangible assets. |
8 | | This paragraph shall not apply to the following: |
9 | | (i) any item of intangible expenses or costs |
10 | | paid, accrued, or incurred, directly or |
11 | | indirectly, from a transaction with a person who |
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 item; or |
16 | | (ii) any item of intangible expense or cost |
17 | | paid, accrued, or incurred, directly or |
18 | | indirectly, if the taxpayer can establish, based |
19 | | on a preponderance of the evidence, both of the |
20 | | following: |
21 | | (a) the person during the same taxable |
22 | | year paid, accrued, or incurred, the |
23 | | intangible expense or cost to a person that is |
24 | | not a related member, and |
25 | | (b) the transaction giving rise to the |
26 | | intangible expense or cost between the |
|
| | SB2531 | - 89 - | LRB102 15312 HLH 20668 b |
|
|
1 | | taxpayer and the person did not have as a |
2 | | principal purpose the avoidance of Illinois |
3 | | income tax, and is paid pursuant to a contract |
4 | | or agreement that reflects arm's-length terms; |
5 | | or |
6 | | (iii) any item of intangible expense or cost |
7 | | paid, accrued, or incurred, directly or |
8 | | indirectly, from a transaction with a person if |
9 | | the taxpayer establishes by clear and convincing |
10 | | evidence, that the adjustments are unreasonable; |
11 | | or if the taxpayer and the Director agree in |
12 | | writing to the application or use of an |
13 | | alternative method of apportionment under Section |
14 | | 304(f);
|
15 | | Nothing in this subsection shall preclude the |
16 | | Director from making any other adjustment |
17 | | otherwise allowed under Section 404 of this Act |
18 | | for any tax year beginning after the effective |
19 | | date of this amendment provided such adjustment is |
20 | | made pursuant to regulation adopted by the |
21 | | Department and such regulations provide methods |
22 | | and standards by which the Department will utilize |
23 | | its authority under Section 404 of this Act;
|
24 | | (D-19) For taxable years ending on or after |
25 | | December 31, 2008, an amount equal to the amount of |
26 | | insurance premium expenses and costs otherwise allowed |
|
| | SB2531 | - 90 - | LRB102 15312 HLH 20668 b |
|
|
1 | | as a deduction in computing base income, and that were |
2 | | paid, accrued, or incurred, directly or indirectly, to |
3 | | a person who would be a member of the same unitary |
4 | | business group but for the fact that the person is |
5 | | prohibited under Section 1501(a)(27) from being |
6 | | included in the unitary business group because he or |
7 | | she is ordinarily required to apportion business |
8 | | income under different subsections of Section 304. The |
9 | | addition modification required by this subparagraph |
10 | | shall be reduced to the extent that dividends were |
11 | | included in base income of the unitary group for the |
12 | | same taxable year and received by the taxpayer or by a |
13 | | member of the taxpayer's unitary business group |
14 | | (including amounts included in gross income under |
15 | | Sections 951 through 964 of the Internal Revenue Code |
16 | | and amounts included in gross income under Section 78 |
17 | | of the Internal Revenue Code) with respect to the |
18 | | stock of the same person to whom the premiums and costs |
19 | | were directly or indirectly paid, incurred, or |
20 | | accrued. The preceding sentence does not apply to the |
21 | | extent that the same dividends caused a reduction to |
22 | | the addition modification required under Section |
23 | | 203(a)(2)(D-17) or Section 203(a)(2)(D-18) of this |
24 | | Act ; .
|
25 | | (D-20) For taxable years beginning on or after |
26 | | January 1,
2002 and ending on or before December 31, |
|
| | SB2531 | - 91 - | LRB102 15312 HLH 20668 b |
|
|
1 | | 2006, in
the
case of a distribution from a qualified |
2 | | tuition program under Section 529 of
the Internal |
3 | | Revenue Code, other than (i) a distribution from a |
4 | | College Savings
Pool created under Section 16.5 of the |
5 | | State Treasurer Act or (ii) a
distribution from the |
6 | | Illinois Prepaid Tuition Trust Fund, an amount equal |
7 | | to
the amount excluded from gross income under Section |
8 | | 529(c)(3)(B). For taxable years beginning on or after |
9 | | January 1, 2007, in the case of a distribution from a |
10 | | qualified tuition program under Section 529 of the |
11 | | Internal Revenue Code, other than (i) a distribution |
12 | | from a College Savings Pool created under Section 16.5 |
13 | | of the State Treasurer Act, (ii) a distribution from |
14 | | the Illinois Prepaid Tuition Trust Fund, or (iii) a |
15 | | distribution from a qualified tuition program under |
16 | | Section 529 of the Internal Revenue Code that (I) |
17 | | adopts and determines that its offering materials |
18 | | comply with the College Savings Plans Network's |
19 | | disclosure principles and (II) has made reasonable |
20 | | efforts to inform in-state residents of the existence |
21 | | of in-state qualified tuition programs by informing |
22 | | Illinois residents directly and, where applicable, to |
23 | | inform financial intermediaries distributing the |
24 | | program to inform in-state residents of the existence |
25 | | of in-state qualified tuition programs at least |
26 | | annually, an amount equal to the amount excluded from |
|
| | SB2531 | - 92 - | LRB102 15312 HLH 20668 b |
|
|
1 | | gross income under Section 529(c)(3)(B). |
2 | | For the purposes of this subparagraph (D-20), a |
3 | | qualified tuition program has made reasonable efforts |
4 | | if it makes disclosures (which may use the term |
5 | | "in-state program" or "in-state plan" and need not |
6 | | specifically refer to Illinois or its qualified |
7 | | programs by name) (i) directly to prospective |
8 | | participants in its offering materials or makes a |
9 | | public disclosure, such as a website posting; and (ii) |
10 | | where applicable, to intermediaries selling the |
11 | | out-of-state program in the same manner that the |
12 | | out-of-state program distributes its offering |
13 | | materials; |
14 | | (D-20.5) For taxable years beginning on or after |
15 | | January 1, 2018, in the case of a distribution from a |
16 | | qualified ABLE program under Section 529A of the |
17 | | Internal Revenue Code, other than a distribution from |
18 | | a qualified ABLE program created under Section 16.6 of |
19 | | the State Treasurer Act, an amount equal to the amount |
20 | | excluded from gross income under Section 529A(c)(1)(B) |
21 | | of the Internal Revenue Code; |
22 | | (D-21) For taxable years beginning on or after |
23 | | January 1, 2007, in the case of transfer of moneys from |
24 | | a qualified tuition program under Section 529 of the |
25 | | Internal Revenue Code that is administered by the |
26 | | State to an out-of-state program, an amount equal to |
|
| | SB2531 | - 93 - | LRB102 15312 HLH 20668 b |
|
|
1 | | the amount of moneys previously deducted from base |
2 | | income under subsection (a)(2)(Y) of this Section; |
3 | | (D-21.5) For taxable years beginning on or after |
4 | | January 1, 2018, in the case of the transfer of moneys |
5 | | from a qualified tuition program under Section 529 or |
6 | | a qualified ABLE program under Section 529A of the |
7 | | Internal Revenue Code that is administered by this |
8 | | State to an ABLE account established under an |
9 | | out-of-state ABLE account program, an amount equal to |
10 | | the contribution component of the transferred amount |
11 | | that was previously deducted from base income under |
12 | | subsection (a)(2)(Y) or subsection (a)(2)(HH) of this |
13 | | Section; |
14 | | (D-22) For taxable years beginning on or after |
15 | | January 1, 2009, and prior to January 1, 2018, in the |
16 | | case of a nonqualified withdrawal or refund of moneys |
17 | | from a qualified tuition program under Section 529 of |
18 | | the Internal Revenue Code administered by the State |
19 | | that is not used for qualified expenses at an eligible |
20 | | education institution, an amount equal to the |
21 | | contribution component of the nonqualified withdrawal |
22 | | or refund that was previously deducted from base |
23 | | income under subsection (a)(2)(y) of this Section, |
24 | | provided that the withdrawal or refund did not result |
25 | | from the beneficiary's death or disability. For |
26 | | taxable years beginning on or after January 1, 2018: |
|
| | SB2531 | - 94 - | LRB102 15312 HLH 20668 b |
|
|
1 | | (1) in the case of a nonqualified withdrawal or |
2 | | refund, as defined under Section
16.5 of the State |
3 | | Treasurer Act, of moneys from a qualified tuition |
4 | | program under Section 529 of the Internal Revenue Code |
5 | | administered by the State, 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, and |
9 | | (2) in the case of a nonqualified withdrawal or refund |
10 | | from a qualified ABLE program under Section 529A of |
11 | | the Internal Revenue Code administered by the State |
12 | | that is not used for qualified disability expenses, an |
13 | | amount equal to the contribution component of the |
14 | | nonqualified withdrawal or refund that was previously |
15 | | deducted from base income under subsection (a)(2)(HH) |
16 | | of this Section; |
17 | | (D-23) An amount equal to the credit allowable to |
18 | | the taxpayer under Section 218(a) of this Act, |
19 | | determined without regard to Section 218(c) of this |
20 | | Act; |
21 | | (D-24) For taxable years ending on or after |
22 | | December 31, 2017, an amount equal to the deduction |
23 | | allowed under Section 199 of the Internal Revenue Code |
24 | | for the taxable year; |
25 | | and by deducting from the total so obtained the
sum of the |
26 | | following amounts: |
|
| | SB2531 | - 95 - | LRB102 15312 HLH 20668 b |
|
|
1 | | (E) For taxable years ending before December 31, |
2 | | 2001,
any amount included in such total in respect of |
3 | | any compensation
(including but not limited to any |
4 | | compensation paid or accrued to a
serviceman while a |
5 | | prisoner of war or missing in action) paid to a |
6 | | resident
by reason of being on active duty in the Armed |
7 | | Forces of the United States
and in respect of any |
8 | | compensation paid or accrued to a resident who as a
|
9 | | governmental employee was a prisoner of war or missing |
10 | | in action, and in
respect of any compensation paid to a |
11 | | resident in 1971 or thereafter for
annual training |
12 | | performed pursuant to Sections 502 and 503, Title 32,
|
13 | | United States Code as a member of the Illinois |
14 | | National Guard or, beginning with taxable years ending |
15 | | on or after December 31, 2007, the National Guard of |
16 | | any other state.
For taxable years ending on or after |
17 | | December 31, 2001, any amount included in
such total |
18 | | in respect of any compensation (including but not |
19 | | limited to any
compensation paid or accrued to a |
20 | | serviceman while a prisoner of war or missing
in |
21 | | action) paid to a resident by reason of being a member |
22 | | of any component of
the Armed Forces of the United |
23 | | States and in respect of any compensation paid
or |
24 | | accrued to a resident who as a governmental employee |
25 | | was a prisoner of war
or missing in action, and in |
26 | | respect of any compensation paid to a resident in
2001 |
|
| | SB2531 | - 96 - | LRB102 15312 HLH 20668 b |
|
|
1 | | or thereafter by reason of being a member of the |
2 | | Illinois National Guard or, beginning with taxable |
3 | | years ending on or after December 31, 2007, the |
4 | | National Guard of any other state.
The provisions of |
5 | | this subparagraph (E) are exempt
from the provisions |
6 | | of Section 250; |
7 | | (F) An amount equal to all amounts included in |
8 | | such total pursuant
to the provisions of Sections |
9 | | 402(a), 402(c), 403(a), 403(b), 406(a), 407(a),
and |
10 | | 408 of the Internal Revenue Code, or included in such |
11 | | total as
distributions under the provisions of any |
12 | | retirement or disability plan for
employees of any |
13 | | governmental agency or unit, or retirement payments to
|
14 | | retired partners, which payments are excluded in |
15 | | computing net earnings
from self employment by Section |
16 | | 1402 of the Internal Revenue Code and
regulations |
17 | | adopted pursuant thereto; |
18 | | (G) The valuation limitation amount; |
19 | | (H) An amount equal to the amount of any tax |
20 | | imposed by this Act
which was refunded to the taxpayer |
21 | | and included in such total for the
taxable year; |
22 | | (I) An amount equal to all amounts included in |
23 | | such total pursuant
to the provisions of Section 111 |
24 | | of the Internal Revenue Code as a
recovery of items |
25 | | previously deducted from adjusted gross income in the
|
26 | | computation of taxable income; |
|
| | SB2531 | - 97 - | LRB102 15312 HLH 20668 b |
|
|
1 | | (J) An amount equal to those dividends included in |
2 | | such total which were
paid by a corporation which |
3 | | conducts business operations in a River Edge |
4 | | Redevelopment Zone or zones created under the River |
5 | | Edge Redevelopment Zone Act, and conducts
|
6 | | substantially all of its operations in a River Edge |
7 | | Redevelopment Zone or zones. This subparagraph (J) is |
8 | | exempt from the provisions of Section 250; |
9 | | (K) An amount equal to those dividends included in |
10 | | such total that
were paid by a corporation that |
11 | | conducts business operations in a federally
designated |
12 | | Foreign Trade Zone or Sub-Zone and that is designated |
13 | | a High Impact
Business located in Illinois; provided |
14 | | that dividends eligible for the
deduction provided in |
15 | | subparagraph (J) of paragraph (2) of this subsection
|
16 | | shall not be eligible for the deduction provided under |
17 | | this subparagraph
(K); |
18 | | (L) For taxable years ending after December 31, |
19 | | 1983, an amount equal to
all social security benefits |
20 | | and railroad retirement benefits included in
such |
21 | | total pursuant to Sections 72(r) and 86 of the |
22 | | Internal Revenue Code; |
23 | | (M) With the exception of any amounts subtracted |
24 | | under subparagraph
(N), an amount equal to the sum of |
25 | | all amounts disallowed as
deductions by (i) Sections |
26 | | 171(a)(2) , and 265(a)(2) of the Internal Revenue Code, |
|
| | SB2531 | - 98 - | LRB102 15312 HLH 20668 b |
|
|
1 | | and all amounts of expenses allocable
to interest and |
2 | | disallowed as deductions by Section 265(a)(1) of the |
3 | | Internal
Revenue Code;
and (ii) for taxable years
|
4 | | ending on or after August 13, 1999, Sections |
5 | | 171(a)(2), 265,
280C, and 832(b)(5)(B)(i) of the |
6 | | Internal Revenue Code, plus, for taxable years ending |
7 | | on or after December 31, 2011, Section 45G(e)(3) of |
8 | | the Internal Revenue Code and, for taxable years |
9 | | ending on or after December 31, 2008, any amount |
10 | | included in gross income under Section 87 of the |
11 | | Internal Revenue Code; the provisions of this
|
12 | | subparagraph are exempt from the provisions of Section |
13 | | 250; |
14 | | (N) An amount equal to all amounts included in |
15 | | such total which are
exempt from taxation by this |
16 | | State either by reason of its statutes or
Constitution
|
17 | | or by reason of the Constitution, treaties or statutes |
18 | | of the United States;
provided that, in the case of any |
19 | | statute of this State that exempts income
derived from |
20 | | bonds or other obligations from the tax imposed under |
21 | | this Act,
the amount exempted shall be the interest |
22 | | net of bond premium amortization; |
23 | | (O) An amount equal to any contribution made to a |
24 | | job training
project established pursuant to the Tax |
25 | | Increment Allocation Redevelopment Act; |
26 | | (P) An amount equal to the amount of the deduction |
|
| | SB2531 | - 99 - | LRB102 15312 HLH 20668 b |
|
|
1 | | used to compute the
federal income tax credit for |
2 | | restoration of substantial amounts held under
claim of |
3 | | right for the taxable year pursuant to Section 1341 of |
4 | | the
Internal Revenue Code or of any itemized deduction |
5 | | taken from adjusted gross income in the computation of |
6 | | taxable income for restoration of substantial amounts |
7 | | held under claim of right for the taxable year; |
8 | | (Q) An amount equal to any amounts included in |
9 | | such total, received by
the taxpayer as an |
10 | | acceleration in the payment of life, endowment or |
11 | | annuity
benefits in advance of the time they would |
12 | | otherwise be payable as an indemnity
for a terminal |
13 | | illness; |
14 | | (R) An amount equal to the amount of any federal or |
15 | | State bonus paid
to veterans of the Persian Gulf War; |
16 | | (S) An amount, to the extent included in adjusted |
17 | | gross income, equal
to the amount of a contribution |
18 | | made in the taxable year on behalf of the
taxpayer to a |
19 | | medical care savings account established under the |
20 | | Medical Care
Savings Account Act or the Medical Care |
21 | | Savings Account Act of 2000 to the
extent the |
22 | | contribution is accepted by the account
administrator |
23 | | as provided in that Act; |
24 | | (T) An amount, to the extent included in adjusted |
25 | | gross income, equal to
the amount of interest earned |
26 | | in the taxable year on a medical care savings
account |
|
| | SB2531 | - 100 - | LRB102 15312 HLH 20668 b |
|
|
1 | | established under the Medical Care Savings Account Act |
2 | | or the Medical
Care Savings Account Act of 2000 on |
3 | | behalf of the
taxpayer, other than interest added |
4 | | pursuant to item (D-5) of this paragraph
(2); |
5 | | (U) For one taxable year beginning on or after |
6 | | January 1,
1994, an
amount equal to the total amount of |
7 | | tax imposed and paid under subsections (a)
and (b) of |
8 | | Section 201 of this Act on grant amounts received by |
9 | | the taxpayer
under the Nursing Home Grant Assistance |
10 | | Act during the taxpayer's taxable years
1992 and 1993; |
11 | | (V) Beginning with tax years ending on or after |
12 | | December 31, 1995 and
ending with tax years ending on |
13 | | or before December 31, 2004, an amount equal to
the |
14 | | amount paid by a taxpayer who is a
self-employed |
15 | | taxpayer, a partner of a partnership, or a
shareholder |
16 | | in a Subchapter S corporation for health insurance or |
17 | | long-term
care insurance for that taxpayer or that |
18 | | taxpayer's spouse or dependents, to
the extent that |
19 | | the amount paid for that health insurance or long-term |
20 | | care
insurance may be deducted under Section 213 of |
21 | | the Internal Revenue Code, has not been deducted on |
22 | | the federal income tax return of the taxpayer,
and |
23 | | does not exceed the taxable income attributable to |
24 | | that taxpayer's income,
self-employment income, or |
25 | | Subchapter S corporation income; except that no
|
26 | | deduction shall be allowed under this item (V) if the |
|
| | SB2531 | - 101 - | LRB102 15312 HLH 20668 b |
|
|
1 | | taxpayer is eligible to
participate in any health |
2 | | insurance or long-term care insurance plan of an
|
3 | | employer of the taxpayer or the taxpayer's
spouse. The |
4 | | amount of the health insurance and long-term care |
5 | | insurance
subtracted under this item (V) shall be |
6 | | determined by multiplying total
health insurance and |
7 | | long-term care insurance premiums paid by the taxpayer
|
8 | | times a number that represents the fractional |
9 | | percentage of eligible medical
expenses under Section |
10 | | 213 of the Internal Revenue Code of 1986 not actually
|
11 | | deducted on the taxpayer's federal income tax return; |
12 | | (W) For taxable years beginning on or after |
13 | | January 1, 1998,
all amounts included in the |
14 | | taxpayer's federal gross income
in the taxable year |
15 | | from amounts converted from a regular IRA to a Roth |
16 | | IRA.
This paragraph is exempt from the provisions of |
17 | | Section
250; |
18 | | (X) For taxable year 1999 and thereafter, an |
19 | | amount equal to the
amount of any (i) distributions, |
20 | | to the extent includible in gross income for
federal |
21 | | income tax purposes, made to the taxpayer because of |
22 | | his or her status
as a victim of persecution for racial |
23 | | or religious reasons by Nazi Germany or
any other Axis |
24 | | regime or as an heir of the victim and (ii) items
of |
25 | | income, to the extent
includible in gross income for |
26 | | federal income tax purposes, attributable to,
derived |
|
| | SB2531 | - 102 - | LRB102 15312 HLH 20668 b |
|
|
1 | | from or in any way related to assets stolen from, |
2 | | hidden from, or
otherwise lost to a victim of
|
3 | | persecution for racial or religious reasons by Nazi |
4 | | Germany or any other Axis
regime immediately prior to, |
5 | | during, and immediately after World War II,
including, |
6 | | but
not limited to, interest on the proceeds |
7 | | receivable as insurance
under policies issued to a |
8 | | victim of persecution for racial or religious
reasons
|
9 | | by Nazi Germany or any other Axis regime by European |
10 | | insurance companies
immediately prior to and during |
11 | | World War II;
provided, however, this subtraction from |
12 | | federal adjusted gross income does not
apply to assets |
13 | | acquired with such assets or with the proceeds from |
14 | | the sale of
such assets; provided, further, this |
15 | | paragraph shall only apply to a taxpayer
who was the |
16 | | first recipient of such assets after their recovery |
17 | | and who is a
victim of persecution for racial or |
18 | | religious reasons
by Nazi Germany or any other Axis |
19 | | regime or as an heir of the victim. The
amount of and |
20 | | the eligibility for any public assistance, benefit, or
|
21 | | similar entitlement is not affected by the inclusion |
22 | | of items (i) and (ii) of
this paragraph in gross income |
23 | | for federal income tax purposes.
This paragraph is |
24 | | exempt from the provisions of Section 250; |
25 | | (Y) For taxable years beginning on or after |
26 | | January 1, 2002
and ending
on or before December 31, |
|
| | SB2531 | - 103 - | LRB102 15312 HLH 20668 b |
|
|
1 | | 2004, moneys contributed in the taxable year to a |
2 | | College Savings Pool account under
Section 16.5 of the |
3 | | State Treasurer Act, except that amounts excluded from
|
4 | | gross income under Section 529(c)(3)(C)(i) of the |
5 | | Internal Revenue Code
shall not be considered moneys |
6 | | contributed under this subparagraph (Y). For taxable |
7 | | years beginning on or after January 1, 2005, a maximum |
8 | | of $10,000
contributed
in the
taxable year to (i) a |
9 | | College Savings Pool account under Section 16.5 of the
|
10 | | State
Treasurer Act or (ii) the Illinois Prepaid |
11 | | Tuition Trust Fund,
except that
amounts excluded from |
12 | | gross income under Section 529(c)(3)(C)(i) of the
|
13 | | Internal
Revenue Code shall not be considered moneys |
14 | | contributed under this subparagraph
(Y). For purposes |
15 | | of this subparagraph, contributions made by an |
16 | | employer on behalf of an employee, or matching |
17 | | contributions made by an employee, shall be treated as |
18 | | made by the employee. This
subparagraph (Y) is exempt |
19 | | from the provisions of Section 250; |
20 | | (Z) For taxable years 2001 and thereafter, for the |
21 | | taxable year in
which the bonus depreciation deduction
|
22 | | is taken on the taxpayer's federal income tax return |
23 | | under
subsection (k) of Section 168 of the Internal |
24 | | Revenue Code and for each
applicable taxable year |
25 | | thereafter, an amount equal to "x", where: |
26 | | (1) "y" equals the amount of the depreciation |
|
| | SB2531 | - 104 - | LRB102 15312 HLH 20668 b |
|
|
1 | | deduction taken for the
taxable year
on the |
2 | | taxpayer's federal income tax return on property |
3 | | for which the bonus
depreciation deduction
was |
4 | | taken in any year under subsection (k) of Section |
5 | | 168 of the Internal
Revenue Code, but not |
6 | | including the bonus depreciation deduction; |
7 | | (2) for taxable years ending on or before |
8 | | December 31, 2005, "x" equals "y" multiplied by 30 |
9 | | and then divided by 70 (or "y"
multiplied by |
10 | | 0.429); and |
11 | | (3) for taxable years ending after December |
12 | | 31, 2005: |
13 | | (i) for property on which a bonus |
14 | | depreciation deduction of 30% of the adjusted |
15 | | basis was taken, "x" equals "y" multiplied by |
16 | | 30 and then divided by 70 (or "y"
multiplied |
17 | | by 0.429); and |
18 | | (ii) for property on which a bonus |
19 | | depreciation deduction of 50% of the adjusted |
20 | | basis was taken, "x" equals "y" multiplied by |
21 | | 1.0. |
22 | | The aggregate amount deducted under this |
23 | | subparagraph in all taxable
years for any one piece of |
24 | | property may not exceed the amount of the bonus
|
25 | | depreciation deduction
taken on that property on the |
26 | | taxpayer's federal income tax return under
subsection |
|
| | SB2531 | - 105 - | LRB102 15312 HLH 20668 b |
|
|
1 | | (k) of Section 168 of the Internal Revenue Code. This |
2 | | subparagraph (Z) is exempt from the provisions of |
3 | | Section 250; |
4 | | (AA) If the taxpayer sells, transfers, abandons, |
5 | | or otherwise disposes of
property for which the |
6 | | taxpayer was required in any taxable year to make an
|
7 | | addition modification under subparagraph (D-15), then |
8 | | an amount equal to that
addition modification.
|
9 | | If the taxpayer continues to own property through |
10 | | the last day of the last tax year for which the |
11 | | taxpayer may claim a depreciation deduction for |
12 | | federal income tax purposes and for which the taxpayer |
13 | | was required in any taxable year to make an addition |
14 | | modification under subparagraph (D-15), then an amount |
15 | | equal to that addition modification.
|
16 | | The taxpayer is allowed to take the deduction |
17 | | under this subparagraph
only once with respect to any |
18 | | one piece of property. |
19 | | This subparagraph (AA) is exempt from the |
20 | | provisions of Section 250; |
21 | | (BB) Any amount included in adjusted gross income, |
22 | | other
than
salary,
received by a driver in a |
23 | | ridesharing arrangement using a motor vehicle; |
24 | | (CC) The amount of (i) any interest income (net of |
25 | | the deductions allocable thereto) taken into account |
26 | | for the taxable year with respect to a transaction |
|
| | SB2531 | - 106 - | LRB102 15312 HLH 20668 b |
|
|
1 | | with a taxpayer that is required to make an addition |
2 | | modification with respect to such transaction under |
3 | | Section 203(a)(2)(D-17), 203(b)(2)(E-12), |
4 | | 203(c)(2)(G-12), or 203(d)(2)(D-7), but not to exceed |
5 | | the amount of that addition modification, and
(ii) any |
6 | | income from intangible property (net of the deductions |
7 | | allocable thereto) taken into account for the taxable |
8 | | year with respect to a transaction with a taxpayer |
9 | | that is required to make an addition modification with |
10 | | respect to such transaction under Section |
11 | | 203(a)(2)(D-18), 203(b)(2)(E-13), 203(c)(2)(G-13), or |
12 | | 203(d)(2)(D-8), but not to exceed the amount of that |
13 | | addition modification. This subparagraph (CC) is |
14 | | exempt from the provisions of Section 250; |
15 | | (DD) An amount equal to the interest income taken |
16 | | into account for the taxable year (net of the |
17 | | deductions allocable thereto) with respect to |
18 | | transactions with (i) a foreign person who would be a |
19 | | member of the taxpayer's unitary business group but |
20 | | for the fact that the foreign person's business |
21 | | activity outside the United States is 80% or more of |
22 | | that person's total business activity and (ii) for |
23 | | taxable years ending on or after December 31, 2008, to |
24 | | a person who would be a member of the same unitary |
25 | | business group but for the fact that the person is |
26 | | prohibited under Section 1501(a)(27) from being |
|
| | SB2531 | - 107 - | LRB102 15312 HLH 20668 b |
|
|
1 | | included in the unitary business group because he or |
2 | | she is ordinarily required to apportion business |
3 | | income under different subsections of Section 304, but |
4 | | not to exceed the addition modification required to be |
5 | | made for the same taxable year under Section |
6 | | 203(a)(2)(D-17) for interest paid, accrued, or |
7 | | incurred, directly or indirectly, to the same person. |
8 | | This subparagraph (DD) is exempt from the provisions |
9 | | of Section 250; |
10 | | (EE) An amount equal to the income from intangible |
11 | | property taken into account for the taxable year (net |
12 | | of the deductions allocable thereto) with respect to |
13 | | transactions with (i) a foreign person who would be a |
14 | | member of the taxpayer's unitary business group but |
15 | | for the fact that the foreign person's business |
16 | | activity outside the United States is 80% or more of |
17 | | that person's total business activity and (ii) for |
18 | | taxable years ending on or after December 31, 2008, 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, but |
25 | | not to exceed the addition modification required to be |
26 | | made for the same taxable year under Section |
|
| | SB2531 | - 108 - | LRB102 15312 HLH 20668 b |
|
|
1 | | 203(a)(2)(D-18) for intangible expenses and costs |
2 | | paid, accrued, or incurred, directly or indirectly, to |
3 | | the same foreign person. This subparagraph (EE) is |
4 | | exempt from the provisions of Section 250; |
5 | | (FF) An amount equal to any amount awarded to the |
6 | | taxpayer during the taxable year by the Court of |
7 | | Claims under subsection (c) of Section 8 of the Court |
8 | | of Claims Act for time unjustly served in a State |
9 | | prison. This subparagraph (FF) is exempt from the |
10 | | provisions of Section 250; |
11 | | (GG) For taxable years ending on or after December |
12 | | 31, 2011, in the case of a taxpayer who was required to |
13 | | add back any insurance premiums under Section |
14 | | 203(a)(2)(D-19), such taxpayer may elect to subtract |
15 | | that part of a reimbursement received from the |
16 | | insurance company equal to the amount of the expense |
17 | | or loss (including expenses incurred by the insurance |
18 | | company) that would have been taken into account as a |
19 | | deduction for federal income tax purposes if the |
20 | | expense or loss had been uninsured. If a taxpayer |
21 | | makes the election provided for by this subparagraph |
22 | | (GG), the insurer to which the premiums were paid must |
23 | | add back to income the amount subtracted by the |
24 | | taxpayer pursuant to this subparagraph (GG). This |
25 | | subparagraph (GG) is exempt from the provisions of |
26 | | Section 250; and |
|
| | SB2531 | - 109 - | LRB102 15312 HLH 20668 b |
|
|
1 | | (HH) For taxable years beginning on or after |
2 | | January 1, 2018 and prior to January 1, 2023, a maximum |
3 | | of $10,000 contributed in the taxable year to a |
4 | | qualified ABLE account under Section 16.6 of the State |
5 | | Treasurer Act, except that amounts excluded from gross |
6 | | income under Section 529(c)(3)(C)(i) or Section |
7 | | 529A(c)(1)(C) of the Internal Revenue Code shall not |
8 | | be considered moneys contributed under this |
9 | | subparagraph (HH). For purposes of this subparagraph |
10 | | (HH), contributions made by an employer on behalf of |
11 | | an employee, or matching contributions made by an |
12 | | employee, shall be treated as made by the employee ; |
13 | | and . |
14 | | (II) An amount equal to a partner's or |
15 | | shareholder's share of business income apportionable |
16 | | to Illinois and nonbusiness income allocated to |
17 | | Illinois under Section 303 of this Act that is |
18 | | distributable to each partner or shareholder and which |
19 | | was included by a partnership or Subchapter S |
20 | | corporation in the computing the elective tax under |
21 | | subsection (d-2) of Section 201. This subparagraph |
22 | | (II) is exempt from the provisions of Section 250. |
23 | | (b) Corporations. |
24 | | (1) In general. In the case of a corporation, base |
25 | | income means an
amount equal to the taxpayer's taxable |
|
| | SB2531 | - 110 - | LRB102 15312 HLH 20668 b |
|
|
1 | | income for the taxable year as
modified by paragraph (2). |
2 | | (2) Modifications. The taxable income referred to in |
3 | | paragraph (1)
shall be modified by adding thereto the sum |
4 | | of the following amounts: |
5 | | (A) An amount equal to all amounts paid or accrued |
6 | | to the taxpayer
as interest and all distributions |
7 | | received from regulated investment
companies during |
8 | | the taxable year to the extent excluded from gross
|
9 | | income in the computation of taxable income; |
10 | | (B) An amount equal to the amount of tax imposed by |
11 | | this Act to the
extent deducted from gross income in |
12 | | the computation of taxable income
for the taxable |
13 | | year; |
14 | | (C) In the case of a regulated investment company, |
15 | | an amount equal to
the excess of (i) the net long-term |
16 | | capital gain for the taxable year, over
(ii) the |
17 | | amount of the capital gain dividends designated as |
18 | | such in accordance
with Section 852(b)(3)(C) of the |
19 | | Internal Revenue Code and any amount
designated under |
20 | | Section 852(b)(3)(D) of the Internal Revenue Code,
|
21 | | attributable to the taxable year (this amendatory Act |
22 | | of 1995
(Public Act 89-89) is declarative of existing |
23 | | law and is not a new
enactment); |
24 | | (D) The amount of any net operating loss deduction |
25 | | taken in arriving
at taxable income, other than a net |
26 | | operating loss carried forward from a
taxable year |
|
| | SB2531 | - 111 - | LRB102 15312 HLH 20668 b |
|
|
1 | | ending prior to December 31, 1986; |
2 | | (E) For taxable years in which a net operating |
3 | | loss carryback or
carryforward from a taxable year |
4 | | ending prior to December 31, 1986 is an
element of |
5 | | taxable income under paragraph (1) of subsection (e) |
6 | | or
subparagraph (E) of paragraph (2) of subsection |
7 | | (e), the amount by which
addition modifications other |
8 | | than those provided by this subparagraph (E)
exceeded |
9 | | subtraction modifications in such earlier taxable |
10 | | year, with the
following limitations applied in the |
11 | | order that they are listed: |
12 | | (i) the addition modification relating to the |
13 | | net operating loss
carried back or forward to the |
14 | | taxable year from any taxable year ending
prior to |
15 | | December 31, 1986 shall be reduced by the amount |
16 | | of addition
modification under this subparagraph |
17 | | (E) which related to that net operating
loss and |
18 | | which was taken into account in calculating the |
19 | | base income of an
earlier taxable year, and |
20 | | (ii) the addition modification relating to the |
21 | | net operating loss
carried back or forward to the |
22 | | taxable year from any taxable year ending
prior to |
23 | | December 31, 1986 shall not exceed the amount of |
24 | | such carryback or
carryforward; |
25 | | For taxable years in which there is a net |
26 | | operating loss carryback or
carryforward from more |
|
| | SB2531 | - 112 - | LRB102 15312 HLH 20668 b |
|
|
1 | | than one other taxable year ending prior to December
|
2 | | 31, 1986, the addition modification provided in this |
3 | | subparagraph (E) shall
be the sum of the amounts |
4 | | computed independently under the preceding
provisions |
5 | | of this subparagraph (E) for each such taxable year; |
6 | | (E-5) For taxable years ending after December 31, |
7 | | 1997, an
amount equal to any eligible remediation |
8 | | costs that the corporation
deducted in computing |
9 | | adjusted gross income and for which the
corporation |
10 | | claims a credit under subsection (l) of Section 201; |
11 | | (E-10) For taxable years 2001 and thereafter, an |
12 | | amount equal to the
bonus depreciation deduction taken |
13 | | on the taxpayer's federal income tax return for the |
14 | | taxable
year under subsection (k) of Section 168 of |
15 | | the Internal Revenue Code; |
16 | | (E-11) If the taxpayer sells, transfers, abandons, |
17 | | or otherwise disposes of property for which the |
18 | | taxpayer was required in any taxable year to
make an |
19 | | addition modification under subparagraph (E-10), then |
20 | | an amount equal
to the aggregate amount of the |
21 | | deductions taken in all taxable
years under |
22 | | subparagraph (T) with respect to that property. |
23 | | If the taxpayer continues to own property through |
24 | | the last day of the last tax year for which the |
25 | | taxpayer may claim a depreciation deduction for |
26 | | federal income tax purposes and for which the taxpayer |
|
| | SB2531 | - 113 - | LRB102 15312 HLH 20668 b |
|
|
1 | | was allowed in any taxable year to make a subtraction |
2 | | modification under subparagraph (T), then an amount |
3 | | equal to that subtraction modification.
|
4 | | The taxpayer is required to make the addition |
5 | | modification under this
subparagraph
only once with |
6 | | respect to any one piece of property; |
7 | | (E-12) 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 |
|
| | SB2531 | - 114 - | LRB102 15312 HLH 20668 b |
|
|
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 |
|
| | SB2531 | - 115 - | LRB102 15312 HLH 20668 b |
|
|
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;
|
|
| | SB2531 | - 116 - | LRB102 15312 HLH 20668 b |
|
|
1 | | (E-13) An amount equal to the amount of intangible |
2 | | expenses and costs otherwise allowed as a deduction in |
3 | | computing base income, and that were paid, accrued, or |
4 | | incurred, directly or indirectly, (i) for taxable |
5 | | years ending on or after December 31, 2004, to a |
6 | | foreign person who would be a member of the same |
7 | | unitary business group but for the fact that the |
8 | | foreign person's business activity outside the United |
9 | | States is 80% or more of that person's total business |
10 | | activity and (ii) for taxable years ending on or after |
11 | | December 31, 2008, to a person who would be a member of |
12 | | the same unitary business group but for the fact that |
13 | | the person is prohibited under Section 1501(a)(27) |
14 | | from being included in the unitary business group |
15 | | because he or she is ordinarily required to apportion |
16 | | business income under different subsections of Section |
17 | | 304. The addition modification required by this |
18 | | subparagraph shall be reduced to the extent that |
19 | | dividends were included in base income of the unitary |
20 | | group for the same taxable year and received by the |
21 | | taxpayer or by a member of the taxpayer's unitary |
22 | | business group (including amounts included in gross |
23 | | income pursuant to Sections 951 through 964 of the |
24 | | Internal Revenue Code and amounts included in gross |
25 | | income under Section 78 of the Internal Revenue Code) |
26 | | with respect to the stock of the same person to whom |
|
| | SB2531 | - 117 - | LRB102 15312 HLH 20668 b |
|
|
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(b)(2)(E-12) 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 |
|
| | SB2531 | - 118 - | LRB102 15312 HLH 20668 b |
|
|
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);
|
|
| | SB2531 | - 119 - | LRB102 15312 HLH 20668 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 | | (E-14) 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 |
|
| | SB2531 | - 120 - | LRB102 15312 HLH 20668 b |
|
|
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(b)(2)(E-12) or Section 203(b)(2)(E-13) of this |
10 | | Act;
|
11 | | (E-15) For taxable years beginning after December |
12 | | 31, 2008, any deduction for dividends paid by a |
13 | | captive real estate investment trust that is allowed |
14 | | to a real estate investment trust under Section |
15 | | 857(b)(2)(B) of the Internal Revenue Code for |
16 | | dividends paid; |
17 | | (E-16) An amount equal to the credit allowable to |
18 | | the taxpayer under Section 218(a) of this Act, |
19 | | determined without regard to Section 218(c) of this |
20 | | Act; |
21 | | (E-17) For taxable years ending on or after |
22 | | December 31, 2017, an amount equal to the deduction |
23 | | allowed under Section 199 of the Internal Revenue Code |
24 | | for the taxable year; |
25 | | (E-18) for taxable years beginning after December |
26 | | 31, 2018, an amount equal to the deduction allowed |
|
| | SB2531 | - 121 - | LRB102 15312 HLH 20668 b |
|
|
1 | | under Section 250(a)(1)(A) of the Internal Revenue |
2 | | Code for the taxable year. |
3 | | and by deducting from the total so obtained the sum of the |
4 | | following
amounts: |
5 | | (F) An amount equal to the amount of any tax |
6 | | imposed by this Act
which was refunded to the taxpayer |
7 | | and included in such total for the
taxable year; |
8 | | (G) An amount equal to any amount included in such |
9 | | total under
Section 78 of the Internal Revenue Code; |
10 | | (H) In the case of a regulated investment company, |
11 | | an amount equal
to the amount of exempt interest |
12 | | dividends as defined in subsection (b)(5) of Section |
13 | | 852 of the Internal Revenue Code, paid to shareholders
|
14 | | for the taxable year; |
15 | | (I) With the exception of any amounts subtracted |
16 | | under subparagraph
(J),
an amount equal to the sum of |
17 | | all amounts disallowed as
deductions by (i) Sections |
18 | | 171(a)(2) , and 265(a)(2) and amounts disallowed as
|
19 | | interest expense by Section 291(a)(3) of the Internal |
20 | | Revenue Code, and all amounts of expenses allocable to |
21 | | interest and
disallowed as deductions by Section |
22 | | 265(a)(1) of the Internal Revenue Code;
and (ii) for |
23 | | taxable years
ending on or after August 13, 1999, |
24 | | Sections
171(a)(2), 265,
280C, 291(a)(3), and |
25 | | 832(b)(5)(B)(i) of the Internal Revenue Code, plus, |
26 | | for tax years ending on or after December 31, 2011, |
|
| | SB2531 | - 122 - | LRB102 15312 HLH 20668 b |
|
|
1 | | amounts disallowed as deductions by Section 45G(e)(3) |
2 | | of the Internal Revenue Code and, for taxable years |
3 | | ending on or after December 31, 2008, any amount |
4 | | included in gross income under Section 87 of the |
5 | | Internal Revenue Code and the policyholders' share of |
6 | | tax-exempt interest of a life insurance company under |
7 | | Section 807(a)(2)(B) of the Internal Revenue Code (in |
8 | | the case of a life insurance company with gross income |
9 | | from a decrease in reserves for the tax year) or |
10 | | Section 807(b)(1)(B) of the Internal Revenue Code (in |
11 | | the case of a life insurance company allowed a |
12 | | deduction for an increase in reserves for the tax |
13 | | year); the
provisions of this
subparagraph are exempt |
14 | | from the provisions of Section 250; |
15 | | (J) An amount equal to all amounts included in |
16 | | such total which are
exempt from taxation by this |
17 | | State either by reason of its statutes or
Constitution
|
18 | | or by reason of the Constitution, treaties or statutes |
19 | | of the United States;
provided that, in the case of any |
20 | | statute of this State that exempts income
derived from |
21 | | bonds or other obligations from the tax imposed under |
22 | | this Act,
the amount exempted shall be the interest |
23 | | net of bond premium amortization; |
24 | | (K) An amount equal to those dividends included in |
25 | | such total
which were paid by a corporation which |
26 | | conducts
business operations in a River Edge |
|
| | SB2531 | - 123 - | LRB102 15312 HLH 20668 b |
|
|
1 | | Redevelopment Zone or zones created under the River |
2 | | Edge Redevelopment Zone Act and conducts substantially |
3 | | all of its
operations in a River Edge Redevelopment |
4 | | Zone or zones. This subparagraph (K) is exempt from |
5 | | the provisions of Section 250; |
6 | | (L) An amount equal to those dividends included in |
7 | | such total that
were paid by a corporation that |
8 | | conducts business operations in a federally
designated |
9 | | Foreign Trade Zone or Sub-Zone and that is designated |
10 | | a High Impact
Business located in Illinois; provided |
11 | | that dividends eligible for the
deduction provided in |
12 | | subparagraph (K) of paragraph 2 of this subsection
|
13 | | shall not be eligible for the deduction provided under |
14 | | this subparagraph
(L); |
15 | | (M) For any taxpayer that is a financial |
16 | | organization within the meaning
of Section 304(c) of |
17 | | this Act, an amount included in such total as interest
|
18 | | income from a loan or loans made by such taxpayer to a |
19 | | borrower, to the extent
that such a loan is secured by |
20 | | property which is eligible for the River Edge |
21 | | Redevelopment Zone Investment Credit. To determine the |
22 | | portion of a loan or loans that is
secured by property |
23 | | eligible for a Section 201(f) investment
credit to the |
24 | | borrower, the entire principal amount of the loan or |
25 | | loans
between the taxpayer and the borrower should be |
26 | | divided into the basis of the
Section 201(f) |
|
| | SB2531 | - 124 - | LRB102 15312 HLH 20668 b |
|
|
1 | | investment credit property which secures the
loan or |
2 | | loans, using for this purpose the original basis of |
3 | | such property on
the date that it was placed in service |
4 | | in the River Edge Redevelopment Zone. The subtraction |
5 | | modification available to the taxpayer in any
year |
6 | | under this subsection shall be that portion of the |
7 | | total interest paid
by the borrower with respect to |
8 | | such loan attributable to the eligible
property as |
9 | | calculated under the previous sentence. This |
10 | | subparagraph (M) is exempt from the provisions of |
11 | | Section 250; |
12 | | (M-1) For any taxpayer that is a financial |
13 | | organization within the
meaning of Section 304(c) of |
14 | | this Act, an amount included in such total as
interest |
15 | | income from a loan or loans made by such taxpayer to a |
16 | | borrower,
to the extent that such a loan is secured by |
17 | | property which is eligible for
the High Impact |
18 | | Business Investment Credit. To determine the portion |
19 | | of a
loan or loans that is secured by property eligible |
20 | | for a Section 201(h) investment credit to the |
21 | | borrower, the entire principal amount of
the loan or |
22 | | loans between the taxpayer and the borrower should be |
23 | | divided into
the basis of the Section 201(h) |
24 | | investment credit property which
secures the loan or |
25 | | loans, using for this purpose the original basis of |
26 | | such
property on the date that it was placed in service |
|
| | SB2531 | - 125 - | LRB102 15312 HLH 20668 b |
|
|
1 | | in a federally designated
Foreign Trade Zone or |
2 | | Sub-Zone located in Illinois. No taxpayer that is
|
3 | | eligible for the deduction provided in subparagraph |
4 | | (M) of paragraph (2) of
this subsection shall be |
5 | | eligible for the deduction provided under this
|
6 | | subparagraph (M-1). The subtraction modification |
7 | | available to taxpayers in
any year under this |
8 | | subsection shall be that portion of the total interest
|
9 | | paid by the borrower with respect to such loan |
10 | | attributable to the eligible
property as calculated |
11 | | under the previous sentence; |
12 | | (N) Two times any contribution made during the |
13 | | taxable year to a
designated zone organization to the |
14 | | extent that the contribution (i)
qualifies as a |
15 | | charitable contribution under subsection (c) of |
16 | | Section 170
of the Internal Revenue Code and (ii) |
17 | | must, by its terms, be used for a
project approved by |
18 | | the Department of Commerce and Economic Opportunity |
19 | | under Section 11 of the Illinois Enterprise Zone Act |
20 | | or under Section 10-10 of the River Edge Redevelopment |
21 | | Zone Act. This subparagraph (N) is exempt from the |
22 | | provisions of Section 250; |
23 | | (O) An amount equal to: (i) 85% for taxable years |
24 | | ending on or before
December 31, 1992, or, a |
25 | | percentage equal to the percentage allowable under
|
26 | | Section 243(a)(1) of the Internal Revenue Code of 1986 |
|
| | SB2531 | - 126 - | LRB102 15312 HLH 20668 b |
|
|
1 | | for taxable years ending
after December 31, 1992, of |
2 | | the amount by which dividends included in taxable
|
3 | | income and received from a corporation that is not |
4 | | created or organized under
the laws of the United |
5 | | States or any state or political subdivision thereof,
|
6 | | including, for taxable years ending on or after |
7 | | December 31, 1988, dividends
received or deemed |
8 | | received or paid or deemed paid under Sections 951 |
9 | | through
965 of the Internal Revenue Code, exceed the |
10 | | amount of the modification
provided under subparagraph |
11 | | (G) of paragraph (2) of this subsection (b) which
is |
12 | | related to such dividends, and including, for taxable |
13 | | years ending on or after December 31, 2008, dividends |
14 | | received from a captive real estate investment trust; |
15 | | plus (ii) 100% of the amount by which dividends,
|
16 | | included in taxable income and received, including, |
17 | | for taxable years ending on
or after December 31, |
18 | | 1988, dividends received or deemed received or paid or
|
19 | | deemed paid under Sections 951 through 964 of the |
20 | | Internal Revenue Code and including, for taxable years |
21 | | ending on or after December 31, 2008, dividends |
22 | | received from a captive real estate investment trust, |
23 | | from
any such corporation specified in clause (i) that |
24 | | would but for the provisions
of Section 1504(b)(3) of |
25 | | the Internal Revenue Code be treated as a member of
the |
26 | | affiliated group which includes the dividend |
|
| | SB2531 | - 127 - | LRB102 15312 HLH 20668 b |
|
|
1 | | recipient, exceed the amount
of the modification |
2 | | provided under subparagraph (G) of paragraph (2) of |
3 | | this
subsection (b) which is related to such |
4 | | dividends. This subparagraph (O) is exempt from the |
5 | | provisions of Section 250 of this Act; |
6 | | (P) An amount equal to any contribution made to a |
7 | | job training project
established pursuant to the Tax |
8 | | Increment Allocation Redevelopment Act; |
9 | | (Q) 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 | | (R) On and after July 20, 1999, in the case of an |
15 | | attorney-in-fact with respect to whom an
interinsurer |
16 | | or a reciprocal insurer has made the election under |
17 | | Section 835 of
the Internal Revenue Code, 26 U.S.C. |
18 | | 835, an amount equal to the excess, if
any, of the |
19 | | amounts paid or incurred by that interinsurer or |
20 | | reciprocal insurer
in the taxable year to the |
21 | | attorney-in-fact over the deduction allowed to that
|
22 | | interinsurer or reciprocal insurer with respect to the |
23 | | attorney-in-fact under
Section 835(b) of the Internal |
24 | | Revenue Code for the taxable year; the provisions of |
25 | | this subparagraph are exempt from the provisions of |
26 | | Section 250; |
|
| | SB2531 | - 128 - | LRB102 15312 HLH 20668 b |
|
|
1 | | (S) For taxable years ending on or after December |
2 | | 31, 1997, in the
case of a Subchapter
S corporation, an |
3 | | amount equal to all amounts of income allocable to a
|
4 | | shareholder subject to the Personal Property Tax |
5 | | Replacement Income Tax imposed
by subsections (c) and |
6 | | (d) of Section 201 of this Act, including amounts
|
7 | | allocable to organizations exempt from federal income |
8 | | tax by reason of Section
501(a) of the Internal |
9 | | Revenue Code. This subparagraph (S) is exempt from
the |
10 | | provisions of Section 250; |
11 | | (T) For taxable years 2001 and thereafter, for the |
12 | | taxable year in
which the bonus depreciation deduction
|
13 | | is taken on the taxpayer's federal income tax return |
14 | | under
subsection (k) of Section 168 of the Internal |
15 | | Revenue Code and for each
applicable taxable year |
16 | | thereafter, an amount equal to "x", where: |
17 | | (1) "y" equals the amount of the depreciation |
18 | | deduction taken for the
taxable year
on the |
19 | | taxpayer's federal income tax return on property |
20 | | for which the bonus
depreciation deduction
was |
21 | | taken in any year under subsection (k) of Section |
22 | | 168 of the Internal
Revenue Code, but not |
23 | | including the bonus depreciation deduction; |
24 | | (2) for taxable years ending on or before |
25 | | December 31, 2005, "x" equals "y" multiplied by 30 |
26 | | and then divided by 70 (or "y"
multiplied by |
|
| | SB2531 | - 129 - | LRB102 15312 HLH 20668 b |
|
|
1 | | 0.429); and |
2 | | (3) for taxable years ending after December |
3 | | 31, 2005: |
4 | | (i) for property on which a bonus |
5 | | depreciation deduction of 30% of the adjusted |
6 | | basis was taken, "x" equals "y" multiplied by |
7 | | 30 and then divided by 70 (or "y"
multiplied |
8 | | by 0.429); and |
9 | | (ii) for property on which a bonus |
10 | | depreciation deduction of 50% of the adjusted |
11 | | basis was taken, "x" equals "y" multiplied by |
12 | | 1.0. |
13 | | The aggregate amount deducted under this |
14 | | subparagraph in all taxable
years for any one piece of |
15 | | property may not exceed the amount of the bonus
|
16 | | depreciation deduction
taken on that property on the |
17 | | taxpayer's federal income tax return under
subsection |
18 | | (k) of Section 168 of the Internal Revenue Code. This |
19 | | subparagraph (T) is exempt from the provisions of |
20 | | Section 250; |
21 | | (U) If the taxpayer sells, transfers, abandons, or |
22 | | otherwise disposes of
property for which the taxpayer |
23 | | was required in any taxable year to make an
addition |
24 | | modification under subparagraph (E-10), then an amount |
25 | | equal to that
addition modification. |
26 | | If the taxpayer continues to own property through |
|
| | SB2531 | - 130 - | LRB102 15312 HLH 20668 b |
|
|
1 | | the last day of the last tax year for which the |
2 | | taxpayer may claim a depreciation deduction for |
3 | | federal income tax purposes and for which the taxpayer |
4 | | was required in any taxable year to make an addition |
5 | | modification under subparagraph (E-10), then an amount |
6 | | equal to that addition modification.
|
7 | | The taxpayer is allowed to take the deduction |
8 | | under this subparagraph
only once with respect to any |
9 | | one piece of property. |
10 | | This subparagraph (U) is exempt from the |
11 | | provisions of Section 250; |
12 | | (V) The amount of: (i) any interest income (net of |
13 | | the deductions allocable thereto) taken into account |
14 | | for the taxable year with respect to a transaction |
15 | | with a taxpayer that is required to make an addition |
16 | | modification with respect to such transaction under |
17 | | Section 203(a)(2)(D-17), 203(b)(2)(E-12), |
18 | | 203(c)(2)(G-12), or 203(d)(2)(D-7), but not to exceed |
19 | | the amount of such addition modification,
(ii) any |
20 | | income from intangible property (net of the deductions |
21 | | allocable thereto) taken into account for the taxable |
22 | | year with respect to a transaction with a taxpayer |
23 | | that is required to make an addition modification with |
24 | | respect to such transaction under Section |
25 | | 203(a)(2)(D-18), 203(b)(2)(E-13), 203(c)(2)(G-13), or |
26 | | 203(d)(2)(D-8), but not to exceed the amount of such |
|
| | SB2531 | - 131 - | LRB102 15312 HLH 20668 b |
|
|
1 | | addition modification, and (iii) any insurance premium |
2 | | income (net of deductions allocable thereto) taken |
3 | | into account for the taxable year with respect to a |
4 | | transaction with a taxpayer that is required to make |
5 | | an addition modification with respect to such |
6 | | transaction under Section 203(a)(2)(D-19), Section |
7 | | 203(b)(2)(E-14), Section 203(c)(2)(G-14), or Section |
8 | | 203(d)(2)(D-9), but not to exceed the amount of that |
9 | | addition modification. This subparagraph (V) is exempt |
10 | | from the provisions of Section 250;
|
11 | | (W) An amount equal to the interest income taken |
12 | | into account for the taxable year (net of the |
13 | | deductions allocable thereto) with respect to |
14 | | transactions with (i) a foreign person who would be a |
15 | | member of the taxpayer's unitary business group but |
16 | | for the fact that the foreign person's business |
17 | | activity outside the United States is 80% or more of |
18 | | that person's total business activity and (ii) for |
19 | | taxable years ending on or after December 31, 2008, to |
20 | | a person who would be a member of the same unitary |
21 | | business group but for the fact that the person is |
22 | | prohibited under Section 1501(a)(27) from being |
23 | | included in the unitary business group because he or |
24 | | she is ordinarily required to apportion business |
25 | | income under different subsections of Section 304, but |
26 | | not to exceed the addition modification required to be |
|
| | SB2531 | - 132 - | LRB102 15312 HLH 20668 b |
|
|
1 | | made for the same taxable year under Section |
2 | | 203(b)(2)(E-12) for interest paid, accrued, or |
3 | | incurred, directly or indirectly, to the same person. |
4 | | This subparagraph (W) is exempt from the provisions of |
5 | | Section 250;
|
6 | | (X) An amount equal to the income from intangible |
7 | | property taken into account for the taxable year (net |
8 | | of the deductions allocable thereto) with respect to |
9 | | transactions with (i) a foreign person who would be a |
10 | | member of the taxpayer's unitary business group but |
11 | | for the fact that the foreign person's business |
12 | | activity outside the United States is 80% or more of |
13 | | that person's total business activity and (ii) for |
14 | | taxable years ending on or after December 31, 2008, 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, but |
21 | | not to exceed the addition modification required to be |
22 | | made for the same taxable year under Section |
23 | | 203(b)(2)(E-13) for intangible expenses and costs |
24 | | paid, accrued, or incurred, directly or indirectly, to |
25 | | the same foreign person. This subparagraph (X) is |
26 | | exempt from the provisions of Section 250;
|
|
| | SB2531 | - 133 - | LRB102 15312 HLH 20668 b |
|
|
1 | | (Y) For taxable years ending on or after December |
2 | | 31, 2011, in the case of a taxpayer who was required to |
3 | | add back any insurance premiums under Section |
4 | | 203(b)(2)(E-14), such taxpayer may elect to subtract |
5 | | that part of a reimbursement received from the |
6 | | insurance company equal to the amount of the expense |
7 | | or loss (including expenses incurred by the insurance |
8 | | company) that would have been taken into account as a |
9 | | deduction for federal income tax purposes if the |
10 | | expense or loss had been uninsured. If a taxpayer |
11 | | makes the election provided for by this subparagraph |
12 | | (Y), the insurer to which the premiums were paid must |
13 | | add back to income the amount subtracted by the |
14 | | taxpayer pursuant to this subparagraph (Y). This |
15 | | subparagraph (Y) is exempt from the provisions of |
16 | | Section 250; and |
17 | | (Z) The difference between the nondeductible |
18 | | controlled foreign corporation dividends under Section |
19 | | 965(e)(3) of the Internal Revenue Code over the |
20 | | taxable income of the taxpayer, computed without |
21 | | regard to Section 965(e)(2)(A) of the Internal Revenue |
22 | | Code, and without regard to any net operating loss |
23 | | deduction. This subparagraph (Z) is exempt from the |
24 | | provisions of Section 250 ; and . |
25 | | (AA) An amount equal to a partner's or |
26 | | shareholder's share of business income apportionable |
|
| | SB2531 | - 134 - | LRB102 15312 HLH 20668 b |
|
|
1 | | to Illinois and nonbusiness income allocated to |
2 | | Illinois under Section 303 of this Act that is |
3 | | distributable to each partner or shareholder and which |
4 | | was included by a partnership or Subchapter S |
5 | | corporation in the computing the elective tax under |
6 | | subsection (d-2) of Section 201. This subparagraph |
7 | | (AA) is exempt from the provisions of Section 250. |
8 | | (3) Special rule. For purposes of paragraph (2)(A), |
9 | | "gross income"
in the case of a life insurance company, |
10 | | for tax years ending on and after
December 31, 1994,
and |
11 | | prior to December 31, 2011, shall mean the gross |
12 | | investment income for the taxable year and, for tax years |
13 | | ending on or after December 31, 2011, shall mean all |
14 | | amounts included in life insurance gross income under |
15 | | Section 803(a)(3) of the Internal Revenue Code. |
16 | | (c) Trusts and estates. |
17 | | (1) In general. In the case of a trust or estate, base |
18 | | income means
an amount equal to the taxpayer's taxable |
19 | | income for the taxable year as
modified by paragraph (2). |
20 | | (2) Modifications. Subject to the provisions of |
21 | | paragraph (3), the
taxable income referred to in paragraph |
22 | | (1) shall be modified by adding
thereto the sum of the |
23 | | following amounts: |
24 | | (A) An amount equal to all amounts paid or accrued |
25 | | to the taxpayer
as interest or dividends during the |
|
| | SB2531 | - 135 - | LRB102 15312 HLH 20668 b |
|
|
1 | | taxable year to the extent excluded
from gross income |
2 | | in the computation of taxable income; |
3 | | (B) In the case of (i) an estate, $600; (ii) a |
4 | | trust which, under
its governing instrument, is |
5 | | required to distribute all of its income
currently, |
6 | | $300; and (iii) any other trust, $100, but in each such |
7 | | case,
only to the extent such amount was deducted in |
8 | | the computation of
taxable income; |
9 | | (C) 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 | | (D) The amount of any net operating loss deduction |
14 | | taken in arriving at
taxable income, other than a net |
15 | | operating loss carried forward from a
taxable year |
16 | | ending prior to December 31, 1986; |
17 | | (E) For taxable years in which a net operating |
18 | | loss carryback or
carryforward from a taxable year |
19 | | ending prior to December 31, 1986 is an
element of |
20 | | taxable income under paragraph (1) of subsection (e) |
21 | | or subparagraph
(E) of paragraph (2) of subsection |
22 | | (e), the amount by which addition
modifications other |
23 | | than those provided by this subparagraph (E) exceeded
|
24 | | subtraction modifications in such taxable year, with |
25 | | the following limitations
applied in the order that |
26 | | they are listed: |
|
| | SB2531 | - 136 - | LRB102 15312 HLH 20668 b |
|
|
1 | | (i) the addition modification relating to the |
2 | | net operating loss
carried back or forward to the |
3 | | taxable year from any taxable year ending
prior to |
4 | | December 31, 1986 shall be reduced by the amount |
5 | | of addition
modification under this subparagraph |
6 | | (E) which related to that net
operating loss and |
7 | | which was taken into account in calculating the |
8 | | base
income of an earlier taxable year, and |
9 | | (ii) the addition modification relating to the |
10 | | net operating loss
carried back or forward to the |
11 | | taxable year from any taxable year ending
prior to |
12 | | December 31, 1986 shall not exceed the amount of |
13 | | such carryback or
carryforward; |
14 | | For taxable years in which there is a net |
15 | | operating loss carryback or
carryforward from more |
16 | | than one other taxable year ending prior to December
|
17 | | 31, 1986, the addition modification provided in this |
18 | | subparagraph (E) shall
be the sum of the amounts |
19 | | computed independently under the preceding
provisions |
20 | | of this subparagraph (E) for each such taxable year; |
21 | | (F) For taxable years ending on or after January |
22 | | 1, 1989, an amount
equal to the tax deducted pursuant |
23 | | to Section 164 of the Internal Revenue
Code if the |
24 | | trust or estate is claiming the same tax for purposes |
25 | | of the
Illinois foreign tax credit under Section 601 |
26 | | of this Act; |
|
| | SB2531 | - 137 - | LRB102 15312 HLH 20668 b |
|
|
1 | | (G) An amount equal to the amount of the capital |
2 | | gain deduction
allowable under the Internal Revenue |
3 | | Code, to the extent deducted from
gross income in the |
4 | | computation of taxable income; |
5 | | (G-5) For taxable years ending after December 31, |
6 | | 1997, an
amount equal to any eligible remediation |
7 | | costs that the trust or estate
deducted in computing |
8 | | adjusted gross income and for which the trust
or |
9 | | estate claims a credit under subsection (l) of Section |
10 | | 201; |
11 | | (G-10) For taxable years 2001 and thereafter, an |
12 | | amount equal to the
bonus depreciation deduction taken |
13 | | on the taxpayer's federal income tax return for the |
14 | | taxable
year under subsection (k) of Section 168 of |
15 | | the Internal Revenue Code; and |
16 | | (G-11) If the taxpayer sells, transfers, abandons, |
17 | | or otherwise disposes of property for which the |
18 | | taxpayer was required in any taxable year to
make an |
19 | | addition modification under subparagraph (G-10), then |
20 | | an amount equal
to the aggregate amount of the |
21 | | deductions taken in all taxable
years under |
22 | | subparagraph (R) with respect to that property. |
23 | | If the taxpayer continues to own property through |
24 | | the last day of the last tax year for which the |
25 | | taxpayer may claim a depreciation deduction for |
26 | | federal income tax purposes and for which the taxpayer |
|
| | SB2531 | - 138 - | LRB102 15312 HLH 20668 b |
|
|
1 | | was allowed in any taxable year to make a subtraction |
2 | | modification under subparagraph (R), then an amount |
3 | | equal to that subtraction modification.
|
4 | | The taxpayer is required to make the addition |
5 | | modification under this
subparagraph
only once with |
6 | | respect to any one piece of property; |
7 | | (G-12) 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 that the foreign person's business activity |
14 | | outside the United States is 80% or more of the foreign |
15 | | person's total business activity 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 |
|
| | SB2531 | - 139 - | LRB102 15312 HLH 20668 b |
|
|
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 |
|
| | SB2531 | - 140 - | LRB102 15312 HLH 20668 b |
|
|
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;
|
|
| | SB2531 | - 141 - | LRB102 15312 HLH 20668 b |
|
|
1 | | (G-13) An amount equal to the amount of intangible |
2 | | expenses and costs otherwise allowed as a deduction in |
3 | | computing base income, and that were paid, accrued, or |
4 | | incurred, directly or indirectly, (i) for taxable |
5 | | years ending on or after December 31, 2004, to a |
6 | | foreign person who would be a member of the same |
7 | | unitary business group but for the fact that the |
8 | | foreign person's business activity outside the United |
9 | | States is 80% or more of that person's total business |
10 | | activity and (ii) for taxable years ending on or after |
11 | | December 31, 2008, to a person who would be a member of |
12 | | the same unitary business group but for the fact that |
13 | | the person is prohibited under Section 1501(a)(27) |
14 | | from being included in the unitary business group |
15 | | because he or she is ordinarily required to apportion |
16 | | business income under different subsections of Section |
17 | | 304. The addition modification required by this |
18 | | subparagraph shall be reduced to the extent that |
19 | | dividends were included in base income of the unitary |
20 | | group for the same taxable year and received by the |
21 | | taxpayer or by a member of the taxpayer's unitary |
22 | | business group (including amounts included in gross |
23 | | income pursuant to Sections 951 through 964 of the |
24 | | Internal Revenue Code and amounts included in gross |
25 | | income under Section 78 of the Internal Revenue Code) |
26 | | with respect to the stock of the same person to whom |
|
| | SB2531 | - 142 - | LRB102 15312 HLH 20668 b |
|
|
1 | | the intangible expenses and costs were directly or |
2 | | indirectly paid, incurred, or accrued. The preceding |
3 | | sentence shall not apply to the extent that the same |
4 | | dividends caused a reduction to the addition |
5 | | modification required under Section 203(c)(2)(G-12) of |
6 | | this Act. As used in this subparagraph, the term |
7 | | "intangible expenses and costs" includes: (1) |
8 | | expenses, losses, and costs for or related to the |
9 | | direct or indirect acquisition, use, maintenance or |
10 | | management, ownership, sale, exchange, or any other |
11 | | disposition of intangible property; (2) losses |
12 | | incurred, directly or indirectly, from factoring |
13 | | transactions or discounting transactions; (3) royalty, |
14 | | patent, technical, and copyright fees; (4) licensing |
15 | | fees; and (5) other similar expenses and costs. For |
16 | | purposes of this subparagraph, "intangible property" |
17 | | includes patents, patent applications, trade names, |
18 | | trademarks, service marks, copyrights, mask works, |
19 | | trade secrets, and similar types of intangible assets. |
20 | | This paragraph shall not apply to the following: |
21 | | (i) any item of intangible expenses or costs |
22 | | paid, accrued, or incurred, directly or |
23 | | indirectly, from a transaction with a person who |
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 |
|
| | SB2531 | - 143 - | LRB102 15312 HLH 20668 b |
|
|
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);
|
|
| | SB2531 | - 144 - | LRB102 15312 HLH 20668 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 | | (G-14) 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 |
|
| | SB2531 | - 145 - | LRB102 15312 HLH 20668 b |
|
|
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(c)(2)(G-12) or Section 203(c)(2)(G-13) of this |
10 | | Act; |
11 | | (G-15) An amount equal to the credit allowable to |
12 | | the taxpayer under Section 218(a) of this Act, |
13 | | determined without regard to Section 218(c) of this |
14 | | Act; |
15 | | (G-16) For taxable years ending on or after |
16 | | December 31, 2017, an amount equal to the deduction |
17 | | allowed under Section 199 of the Internal Revenue Code |
18 | | for the taxable year; |
19 | | and by deducting from the total so obtained the sum of the |
20 | | following
amounts: |
21 | | (H) 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 408 |
24 | | of the Internal Revenue Code or included in such total |
25 | | as
distributions under the provisions of any |
26 | | retirement or disability plan for
employees of any |
|
| | SB2531 | - 146 - | LRB102 15312 HLH 20668 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 | | (I) The valuation limitation amount; |
7 | | (J) 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 | | (K) An amount equal to all amounts included in |
11 | | taxable income as
modified by subparagraphs (A), (B), |
12 | | (C), (D), (E), (F) and (G) which
are exempt from |
13 | | taxation by this State either by reason of its |
14 | | statutes or
Constitution
or by reason of the |
15 | | Constitution, treaties or statutes of the United |
16 | | States;
provided that, in the case of any statute of |
17 | | this State that exempts income
derived from bonds or |
18 | | other obligations from the tax imposed under this Act,
|
19 | | the amount exempted shall be the interest net of bond |
20 | | premium amortization; |
21 | | (L) With the exception of any amounts subtracted |
22 | | under subparagraph
(K),
an amount equal to the sum of |
23 | | all amounts disallowed as
deductions by (i) Sections |
24 | | 171(a)(2) and 265(a)(2) of the Internal Revenue
Code, |
25 | | and all amounts of expenses allocable
to interest and |
26 | | disallowed as deductions by Section 265(a)(1) of the |
|
| | SB2531 | - 147 - | LRB102 15312 HLH 20668 b |
|
|
1 | | Internal
Revenue Code;
and (ii) for taxable years
|
2 | | ending on or after August 13, 1999, Sections
|
3 | | 171(a)(2), 265,
280C, and 832(b)(5)(B)(i) of the |
4 | | Internal Revenue Code, plus, (iii) for taxable years |
5 | | ending on or after December 31, 2011, Section |
6 | | 45G(e)(3) of the Internal Revenue Code and, for |
7 | | taxable years ending on or after December 31, 2008, |
8 | | any amount included in gross income under Section 87 |
9 | | of the Internal Revenue Code; the provisions of this
|
10 | | subparagraph are exempt from the provisions of Section |
11 | | 250; |
12 | | (M) An amount equal to those dividends included in |
13 | | such total
which were paid by a corporation which |
14 | | conducts business operations in a River Edge |
15 | | Redevelopment Zone or zones created under the River |
16 | | Edge Redevelopment Zone Act and
conducts substantially |
17 | | all of its operations in a River Edge Redevelopment |
18 | | Zone or zones. This subparagraph (M) is exempt from |
19 | | the provisions of Section 250; |
20 | | (N) An amount equal to any contribution made to a |
21 | | job training
project established pursuant to the Tax |
22 | | Increment Allocation
Redevelopment Act; |
23 | | (O) 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
|
|
| | SB2531 | - 148 - | LRB102 15312 HLH 20668 b |
|
|
1 | | a High Impact Business located in Illinois; provided |
2 | | that dividends eligible
for the deduction provided in |
3 | | subparagraph (M) of paragraph (2) of this
subsection |
4 | | shall not be eligible for the deduction provided under |
5 | | this
subparagraph (O); |
6 | | (P) An amount equal to the amount of the deduction |
7 | | used to compute the
federal income tax credit for |
8 | | restoration of substantial amounts held under
claim of |
9 | | right for the taxable year pursuant to Section 1341 of |
10 | | the
Internal Revenue Code; |
11 | | (Q) For taxable year 1999 and thereafter, an |
12 | | amount equal to the
amount of any
(i) distributions, |
13 | | to the extent includible in gross income for
federal |
14 | | income tax purposes, made to the taxpayer because of
|
15 | | his or her status as a victim of
persecution for racial |
16 | | or religious reasons by Nazi Germany or any other Axis
|
17 | | regime or as an heir of the victim and (ii) items
of |
18 | | income, to the extent
includible in gross income for |
19 | | federal income tax purposes, attributable to,
derived |
20 | | from or in any way related to assets stolen from, |
21 | | hidden from, or
otherwise lost to a victim of
|
22 | | persecution for racial or religious reasons by Nazi
|
23 | | Germany or any other Axis regime
immediately prior to, |
24 | | during, and immediately after World War II, including,
|
25 | | but
not limited to, interest on the proceeds |
26 | | receivable as insurance
under policies issued to a |
|
| | SB2531 | - 149 - | LRB102 15312 HLH 20668 b |
|
|
1 | | victim of persecution for racial or religious
reasons |
2 | | by Nazi Germany or any other Axis regime by European |
3 | | insurance
companies
immediately prior to and during |
4 | | World War II;
provided, however, this subtraction from |
5 | | federal adjusted gross income does not
apply to assets |
6 | | acquired with such assets or with the proceeds from |
7 | | the sale of
such assets; provided, further, this |
8 | | paragraph shall only apply to a taxpayer
who was the |
9 | | first recipient of such assets after their recovery |
10 | | and who is a
victim of
persecution for racial or |
11 | | religious reasons
by Nazi Germany or any other Axis |
12 | | regime or as an heir of the victim. The
amount of and |
13 | | the eligibility for any public assistance, benefit, or
|
14 | | similar entitlement is not affected by the inclusion |
15 | | of items (i) and (ii) of
this paragraph in gross income |
16 | | for federal income tax purposes.
This paragraph is |
17 | | exempt from the provisions of Section 250; |
18 | | (R) For taxable years 2001 and thereafter, for the |
19 | | taxable year in
which the bonus depreciation deduction
|
20 | | is taken on the taxpayer's federal income tax return |
21 | | under
subsection (k) of Section 168 of the Internal |
22 | | Revenue Code and for each
applicable taxable year |
23 | | thereafter, an amount equal to "x", where: |
24 | | (1) "y" equals the amount of the depreciation |
25 | | deduction taken for the
taxable year
on the |
26 | | taxpayer's federal income tax return on property |
|
| | SB2531 | - 150 - | LRB102 15312 HLH 20668 b |
|
|
1 | | for which the bonus
depreciation deduction
was |
2 | | taken in any year under subsection (k) of Section |
3 | | 168 of the Internal
Revenue Code, but not |
4 | | including the bonus depreciation deduction; |
5 | | (2) for taxable years ending on or before |
6 | | December 31, 2005, "x" equals "y" multiplied by 30 |
7 | | and then divided by 70 (or "y"
multiplied by |
8 | | 0.429); and |
9 | | (3) for taxable years ending after December |
10 | | 31, 2005: |
11 | | (i) for property on which a bonus |
12 | | depreciation deduction of 30% of the adjusted |
13 | | basis was taken, "x" equals "y" multiplied by |
14 | | 30 and then divided by 70 (or "y"
multiplied |
15 | | by 0.429); and |
16 | | (ii) for property on which a bonus |
17 | | depreciation deduction of 50% of the adjusted |
18 | | basis was taken, "x" equals "y" multiplied by |
19 | | 1.0. |
20 | | The aggregate amount deducted under this |
21 | | subparagraph in all taxable
years for any one piece of |
22 | | property may not exceed the amount of the bonus
|
23 | | depreciation deduction
taken on that property on the |
24 | | taxpayer's federal income tax return under
subsection |
25 | | (k) of Section 168 of the Internal Revenue Code. This |
26 | | subparagraph (R) is exempt from the provisions of |
|
| | SB2531 | - 151 - | LRB102 15312 HLH 20668 b |
|
|
1 | | Section 250; |
2 | | (S) If the taxpayer sells, transfers, abandons, or |
3 | | otherwise disposes of
property for which the taxpayer |
4 | | was required in any taxable year to make an
addition |
5 | | modification under subparagraph (G-10), then an amount |
6 | | equal to that
addition modification. |
7 | | If the taxpayer continues to own property through |
8 | | the last day of the last tax year for which the |
9 | | taxpayer may claim a depreciation deduction for |
10 | | federal income tax purposes and for which the taxpayer |
11 | | was required in any taxable year to make an addition |
12 | | modification under subparagraph (G-10), then an amount |
13 | | equal to that addition modification.
|
14 | | The taxpayer is allowed to take the deduction |
15 | | under this subparagraph
only once with respect to any |
16 | | one piece of property. |
17 | | This subparagraph (S) is exempt from the |
18 | | provisions of Section 250; |
19 | | (T) The amount of (i) any interest income (net of |
20 | | the deductions allocable thereto) taken into account |
21 | | for the taxable year with respect to a transaction |
22 | | with a taxpayer that is required to make an addition |
23 | | modification with respect to such transaction under |
24 | | Section 203(a)(2)(D-17), 203(b)(2)(E-12), |
25 | | 203(c)(2)(G-12), or 203(d)(2)(D-7), but not to exceed |
26 | | the amount of such addition modification and
(ii) any |
|
| | SB2531 | - 152 - | LRB102 15312 HLH 20668 b |
|
|
1 | | income from intangible property (net of the deductions |
2 | | allocable thereto) taken into account for the taxable |
3 | | year with respect to a transaction with a taxpayer |
4 | | that is required to make an addition modification with |
5 | | respect to such transaction under Section |
6 | | 203(a)(2)(D-18), 203(b)(2)(E-13), 203(c)(2)(G-13), or |
7 | | 203(d)(2)(D-8), but not to exceed the amount of such |
8 | | addition modification. This subparagraph (T) is exempt |
9 | | from the provisions of Section 250;
|
10 | | (U) An amount equal to the interest income taken |
11 | | into account for the taxable year (net of the |
12 | | deductions allocable thereto) with respect to |
13 | | transactions with (i) a foreign person who would be a |
14 | | member of the taxpayer's unitary business group but |
15 | | for the fact the foreign person's business activity |
16 | | outside the United States is 80% or more of that |
17 | | person's total business activity and (ii) for taxable |
18 | | years ending on or after December 31, 2008, to a person |
19 | | who would be a member of the same unitary business |
20 | | group but for the fact that the person is prohibited |
21 | | under Section 1501(a)(27) from being included in the |
22 | | unitary business group because he or she is ordinarily |
23 | | required to apportion business income under different |
24 | | subsections of Section 304, but not to exceed the |
25 | | addition modification required to be made for the same |
26 | | taxable year under Section 203(c)(2)(G-12) for |
|
| | SB2531 | - 153 - | LRB102 15312 HLH 20668 b |
|
|
1 | | interest paid, accrued, or incurred, directly or |
2 | | indirectly, to the same person. This subparagraph (U) |
3 | | is exempt from the provisions of Section 250; |
4 | | (V) An amount equal to the income from intangible |
5 | | property taken into account for the taxable year (net |
6 | | of the deductions allocable thereto) with respect to |
7 | | transactions with (i) a foreign person who would be a |
8 | | member of the taxpayer's unitary business group but |
9 | | for the fact that the foreign person's business |
10 | | activity outside the United States is 80% or more of |
11 | | that person's total business activity and (ii) for |
12 | | taxable years ending on or after December 31, 2008, to |
13 | | a person who would be a member of the same unitary |
14 | | business group but for the fact that the person is |
15 | | prohibited under Section 1501(a)(27) from being |
16 | | included in the unitary business group because he or |
17 | | she is ordinarily required to apportion business |
18 | | income under different subsections of Section 304, but |
19 | | not to exceed the addition modification required to be |
20 | | made for the same taxable year under Section |
21 | | 203(c)(2)(G-13) for intangible expenses and costs |
22 | | paid, accrued, or incurred, directly or indirectly, to |
23 | | the same foreign person. This subparagraph (V) is |
24 | | exempt from the provisions of Section 250;
|
25 | | (W) in the case of an estate, an amount equal to |
26 | | all amounts included in such total pursuant to the |
|
| | SB2531 | - 154 - | LRB102 15312 HLH 20668 b |
|
|
1 | | provisions of Section 111 of the Internal Revenue Code |
2 | | as a recovery of items previously deducted by the |
3 | | decedent from adjusted gross income in the computation |
4 | | of taxable income. This subparagraph (W) is exempt |
5 | | from Section 250; |
6 | | (X) an amount equal to the refund included in such |
7 | | total of any tax deducted for federal income tax |
8 | | purposes, to the extent that deduction was added back |
9 | | under subparagraph (F). This subparagraph (X) is |
10 | | exempt from the provisions of Section 250; |
11 | | (Y) For taxable years ending on or after December |
12 | | 31, 2011, in the case of a taxpayer who was required to |
13 | | add back any insurance premiums under Section |
14 | | 203(c)(2)(G-14), such taxpayer may elect to subtract |
15 | | that part of a reimbursement received from the |
16 | | insurance company equal to the amount of the expense |
17 | | or loss (including expenses incurred by the insurance |
18 | | company) that would have been taken into account as a |
19 | | deduction for federal income tax purposes if the |
20 | | expense or loss had been uninsured. If a taxpayer |
21 | | makes the election provided for by this subparagraph |
22 | | (Y), the insurer to which the premiums were paid must |
23 | | add back to income the amount subtracted by the |
24 | | taxpayer pursuant to this subparagraph (Y). This |
25 | | subparagraph (Y) is exempt from the provisions of |
26 | | Section 250; and |
|
| | SB2531 | - 155 - | LRB102 15312 HLH 20668 b |
|
|
1 | | (Z) For taxable years beginning after December 31, |
2 | | 2018 and before January 1, 2026, the amount of excess |
3 | | business loss of the taxpayer disallowed as a |
4 | | deduction by Section 461(l)(1)(B) of the Internal |
5 | | Revenue Code ; and . |
6 | | (AA) An amount equal to a partner's or |
7 | | shareholder's share of business income apportionable |
8 | | to Illinois and nonbusiness income allocated to |
9 | | Illinois under Section 303 of this Act that is |
10 | | distributable to each partner or shareholder and which |
11 | | was included by a partnership or Subchapter S |
12 | | corporation in the computing the elective tax under |
13 | | subsection (d-2) of Section 201. This subparagraph |
14 | | (AA) is exempt from the provisions of Section 250. |
15 | | (3) Limitation. The amount of any modification |
16 | | otherwise required
under this subsection shall, under |
17 | | regulations prescribed by the
Department, be adjusted by |
18 | | any amounts included therein which were
properly paid, |
19 | | credited, or required to be distributed, or permanently |
20 | | set
aside for charitable purposes pursuant to Internal |
21 | | Revenue Code Section
642(c) during the taxable year. |
22 | | (d) Partnerships. |
23 | | (1) In general. In the case of a partnership, base |
24 | | income means an
amount equal to the taxpayer's taxable |
25 | | income for the taxable year as
modified by paragraph (2). |
|
| | SB2531 | - 156 - | LRB102 15312 HLH 20668 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 or dividends during the |
6 | | taxable year to the extent excluded from
gross income |
7 | | in the computation of taxable income; |
8 | | (B) An amount equal to the amount of tax imposed by |
9 | | this Act to the
extent deducted from gross income for |
10 | | the taxable year; |
11 | | (C) The amount of deductions allowed to the |
12 | | partnership pursuant to
Section 707 (c) of the |
13 | | Internal Revenue Code in calculating its taxable |
14 | | income; |
15 | | (D) An amount equal to the amount of the capital |
16 | | gain deduction
allowable under the Internal Revenue |
17 | | Code, to the extent deducted from
gross income in the |
18 | | computation of taxable income; |
19 | | (D-5) For taxable years 2001 and thereafter, an |
20 | | amount equal to the
bonus depreciation deduction taken |
21 | | on the taxpayer's federal income tax return for the |
22 | | taxable
year under subsection (k) of Section 168 of |
23 | | the Internal Revenue Code; |
24 | | (D-6) If the taxpayer sells, transfers, abandons, |
25 | | or otherwise disposes of
property for which the |
26 | | taxpayer was required in any taxable year to make an
|
|
| | SB2531 | - 157 - | LRB102 15312 HLH 20668 b |
|
|
1 | | addition modification under subparagraph (D-5), then |
2 | | an amount equal to the
aggregate amount of the |
3 | | deductions taken in all taxable years
under |
4 | | subparagraph (O) with respect to that property. |
5 | | If the taxpayer continues to own property through |
6 | | the last day of the last tax year for which the |
7 | | taxpayer may claim a depreciation deduction for |
8 | | federal income tax purposes and for which the taxpayer |
9 | | was allowed in any taxable year to make a subtraction |
10 | | modification under subparagraph (O), then an amount |
11 | | equal to that subtraction modification.
|
12 | | The taxpayer is required to make the addition |
13 | | modification under this
subparagraph
only once with |
14 | | respect to any one piece of property; |
15 | | (D-7) An amount equal to the amount otherwise |
16 | | allowed as a deduction in computing base income for |
17 | | interest paid, accrued, or incurred, directly or |
18 | | indirectly, (i) for taxable years ending on or after |
19 | | December 31, 2004, to a foreign person who would be a |
20 | | member of the same unitary business group but for the |
21 | | fact the foreign person's business activity outside |
22 | | the United States is 80% or more of the foreign |
23 | | person's total business activity and (ii) for taxable |
24 | | years ending on or after December 31, 2008, to a person |
25 | | who would be a member of the same unitary business |
26 | | group but for the fact that the person is prohibited |
|
| | SB2531 | - 158 - | LRB102 15312 HLH 20668 b |
|
|
1 | | under Section 1501(a)(27) from being included in the |
2 | | unitary business group because he or she is ordinarily |
3 | | required to apportion business income under different |
4 | | subsections of Section 304. The addition modification |
5 | | required by this subparagraph shall be reduced to the |
6 | | extent that dividends were included in base income of |
7 | | the unitary group for the same taxable year and |
8 | | received by the taxpayer or by a member of the |
9 | | taxpayer's unitary business group (including amounts |
10 | | included in gross income pursuant to Sections 951 |
11 | | through 964 of the Internal Revenue Code and amounts |
12 | | included in gross income under Section 78 of the |
13 | | Internal Revenue Code) with respect to the stock of |
14 | | the same person to whom the interest was paid, |
15 | | accrued, or incurred.
|
16 | | This paragraph shall not apply to the following:
|
17 | | (i) an item of interest paid, accrued, or |
18 | | incurred, directly or indirectly, to a person who |
19 | | is subject in a foreign country or state, other |
20 | | than a state which requires mandatory unitary |
21 | | reporting, to a tax on or measured by net income |
22 | | with respect to such interest; or |
23 | | (ii) an item of interest paid, accrued, or |
24 | | incurred, directly or indirectly, to a person if |
25 | | the taxpayer can establish, based on a |
26 | | preponderance of the evidence, both of the |
|
| | SB2531 | - 159 - | LRB102 15312 HLH 20668 b |
|
|
1 | | following: |
2 | | (a) the person, during the same taxable |
3 | | year, paid, accrued, or incurred, the interest |
4 | | to a person that is not a related member, and |
5 | | (b) the transaction giving rise to the |
6 | | interest expense between the taxpayer and the |
7 | | person did not have as a principal purpose the |
8 | | avoidance of Illinois income tax, and is paid |
9 | | pursuant to a contract or agreement that |
10 | | reflects an arm's-length interest rate and |
11 | | terms; or
|
12 | | (iii) the taxpayer can establish, based on |
13 | | clear and convincing evidence, that the interest |
14 | | paid, accrued, or incurred relates to a contract |
15 | | or agreement entered into at arm's-length rates |
16 | | and terms and the principal purpose for the |
17 | | payment is not federal or Illinois tax avoidance; |
18 | | or
|
19 | | (iv) an item of interest paid, accrued, or |
20 | | incurred, directly or indirectly, to a person if |
21 | | the taxpayer establishes by clear and convincing |
22 | | evidence that the adjustments are unreasonable; or |
23 | | if the taxpayer and the Director agree in writing |
24 | | to the application or use of an alternative method |
25 | | of apportionment under Section 304(f).
|
26 | | Nothing in this subsection shall preclude the |
|
| | SB2531 | - 160 - | LRB102 15312 HLH 20668 b |
|
|
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; and
|
9 | | (D-8) An amount equal to the amount of intangible |
10 | | expenses and costs otherwise allowed as a deduction in |
11 | | computing base income, and that were paid, accrued, or |
12 | | incurred, directly or indirectly, (i) for taxable |
13 | | years ending on or after December 31, 2004, to a |
14 | | foreign person who would be a member of the same |
15 | | unitary business group but for the fact that the |
16 | | foreign person's business activity outside the United |
17 | | States is 80% or more of that person's total business |
18 | | activity and (ii) for taxable years ending on or after |
19 | | December 31, 2008, to a person who would be a member of |
20 | | the same unitary business group but for the fact that |
21 | | the person is prohibited under Section 1501(a)(27) |
22 | | from being included in the unitary business group |
23 | | because he or she is ordinarily required to apportion |
24 | | business income under different subsections of Section |
25 | | 304. The addition modification required by this |
26 | | subparagraph shall be reduced to the extent that |
|
| | SB2531 | - 161 - | LRB102 15312 HLH 20668 b |
|
|
1 | | dividends were included in base income of the unitary |
2 | | group for the same taxable year and received by the |
3 | | taxpayer or by a member of the taxpayer's unitary |
4 | | business group (including amounts included in gross |
5 | | income pursuant to Sections 951 through 964 of the |
6 | | Internal Revenue Code and amounts included in gross |
7 | | income under Section 78 of the Internal Revenue Code) |
8 | | with respect to the stock of the same person to whom |
9 | | the intangible expenses and costs were directly or |
10 | | indirectly paid, incurred or accrued. The preceding |
11 | | sentence shall not apply to the extent that the same |
12 | | dividends caused a reduction to the addition |
13 | | modification required under Section 203(d)(2)(D-7) of |
14 | | this Act. As used in this subparagraph, the term |
15 | | "intangible expenses and costs" includes (1) expenses, |
16 | | losses, and costs for, or related to, the direct or |
17 | | indirect acquisition, use, maintenance or management, |
18 | | ownership, sale, exchange, or any other disposition of |
19 | | intangible property; (2) losses incurred, directly or |
20 | | indirectly, from factoring transactions or discounting |
21 | | transactions; (3) royalty, patent, technical, and |
22 | | copyright fees; (4) licensing fees; and (5) other |
23 | | similar expenses and costs. For purposes of this |
24 | | subparagraph, "intangible property" includes patents, |
25 | | patent applications, trade names, trademarks, service |
26 | | marks, copyrights, mask works, trade secrets, and |
|
| | SB2531 | - 162 - | LRB102 15312 HLH 20668 b |
|
|
1 | | similar types of intangible assets; |
2 | | This paragraph shall not apply to the following: |
3 | | (i) any item of intangible expenses or costs |
4 | | paid, accrued, or incurred, directly or |
5 | | indirectly, from a transaction with a person who |
6 | | is subject in a foreign country or state, other |
7 | | than a state which requires mandatory unitary |
8 | | reporting, to a tax on or measured by net income |
9 | | with respect to such item; or |
10 | | (ii) any item of intangible expense or cost |
11 | | paid, accrued, or incurred, directly or |
12 | | indirectly, if the taxpayer can establish, based |
13 | | on a preponderance of the evidence, both of the |
14 | | following: |
15 | | (a) the person during the same taxable |
16 | | year paid, accrued, or incurred, the |
17 | | intangible expense or cost to a person that is |
18 | | not a related member, and |
19 | | (b) the transaction giving rise to the |
20 | | intangible expense or cost between the |
21 | | taxpayer and the person did not have as a |
22 | | principal purpose the avoidance of Illinois |
23 | | income tax, and is paid pursuant to a contract |
24 | | or agreement that reflects arm's-length terms; |
25 | | or |
26 | | (iii) any item of intangible expense or cost |
|
| | SB2531 | - 163 - | LRB102 15312 HLH 20668 b |
|
|
1 | | paid, accrued, or incurred, directly or |
2 | | indirectly, from a transaction with a person if |
3 | | the taxpayer establishes by clear and convincing |
4 | | evidence, that the adjustments are unreasonable; |
5 | | or if the taxpayer and the Director agree in |
6 | | writing to the application or use of an |
7 | | alternative method of apportionment under Section |
8 | | 304(f);
|
9 | | Nothing in this subsection shall preclude the |
10 | | Director from making any other adjustment |
11 | | otherwise allowed under Section 404 of this Act |
12 | | for any tax year beginning after the effective |
13 | | date of this amendment provided such adjustment is |
14 | | made pursuant to regulation adopted by the |
15 | | Department and such regulations provide methods |
16 | | and standards by which the Department will utilize |
17 | | its authority under Section 404 of this Act;
|
18 | | (D-9) For taxable years ending on or after |
19 | | December 31, 2008, an amount equal to the amount of |
20 | | insurance premium expenses and costs otherwise allowed |
21 | | as a deduction in computing base income, and that were |
22 | | paid, accrued, or incurred, directly or indirectly, to |
23 | | a person who would be a member of the same unitary |
24 | | business group but for the fact that the person is |
25 | | prohibited under Section 1501(a)(27) from being |
26 | | included in the unitary business group because he or |
|
| | SB2531 | - 164 - | LRB102 15312 HLH 20668 b |
|
|
1 | | she is ordinarily required to apportion business |
2 | | income under different subsections of Section 304. The |
3 | | addition modification required by this subparagraph |
4 | | shall be reduced to the extent that dividends were |
5 | | included in base income of the unitary group for the |
6 | | same taxable year and received by the taxpayer or by a |
7 | | member of the taxpayer's unitary business group |
8 | | (including amounts included in gross income under |
9 | | Sections 951 through 964 of the Internal Revenue Code |
10 | | and amounts included in gross income under Section 78 |
11 | | of the Internal Revenue Code) with respect to the |
12 | | stock of the same person to whom the premiums and costs |
13 | | were directly or indirectly paid, incurred, or |
14 | | accrued. The preceding sentence does not apply to the |
15 | | extent that the same dividends caused a reduction to |
16 | | the addition modification required under Section |
17 | | 203(d)(2)(D-7) or Section 203(d)(2)(D-8) of this Act; |
18 | | (D-10) 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 | | (D-11) 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 | | and by deducting from the total so obtained the following |
|
| | SB2531 | - 165 - | LRB102 15312 HLH 20668 b |
|
|
1 | | amounts: |
2 | | (E) The valuation limitation amount; |
3 | | (F) An amount equal to the amount of any tax |
4 | | imposed by this Act which
was refunded to the taxpayer |
5 | | and included in such total for the taxable year; |
6 | | (G) An amount equal to all amounts included in |
7 | | taxable income as
modified by subparagraphs (A), (B), |
8 | | (C) and (D) which are exempt from
taxation by this |
9 | | State either by reason of its statutes or Constitution |
10 | | or
by reason of
the Constitution, treaties or statutes |
11 | | of the United States;
provided that, in the case of any |
12 | | statute of this State that exempts income
derived from |
13 | | bonds or other obligations from the tax imposed under |
14 | | this Act,
the amount exempted shall be the interest |
15 | | net of bond premium amortization; |
16 | | (H) Any income of the partnership which |
17 | | constitutes personal service
income as defined in |
18 | | Section 1348(b)(1) of the Internal Revenue Code (as
in |
19 | | effect December 31, 1981) or a reasonable allowance |
20 | | for compensation
paid or accrued for services rendered |
21 | | by partners to the partnership,
whichever is greater; |
22 | | this subparagraph (H) is exempt from the provisions of |
23 | | Section 250; |
24 | | (I) An amount equal to all amounts of income |
25 | | distributable to an entity
subject to the Personal |
26 | | Property Tax Replacement Income Tax imposed by
|
|
| | SB2531 | - 166 - | LRB102 15312 HLH 20668 b |
|
|
1 | | subsections (c) and (d) of Section 201 of this Act |
2 | | including amounts
distributable to organizations |
3 | | exempt from federal income tax by reason of
Section |
4 | | 501(a) of the Internal Revenue Code; this subparagraph |
5 | | (I) is exempt from the provisions of Section 250; |
6 | | (J) With the exception of any amounts subtracted |
7 | | under subparagraph
(G),
an amount equal to the sum of |
8 | | all amounts disallowed as deductions
by (i) Sections |
9 | | 171(a)(2) , and 265(a)(2) of the Internal Revenue Code, |
10 | | and all amounts of expenses allocable to
interest and |
11 | | disallowed as deductions by Section 265(a)(1) of the |
12 | | Internal
Revenue Code;
and (ii) for taxable years
|
13 | | ending on or after August 13, 1999, Sections
|
14 | | 171(a)(2), 265,
280C, and 832(b)(5)(B)(i) of the |
15 | | Internal Revenue Code, plus, (iii) for taxable years |
16 | | ending on or after December 31, 2011, Section |
17 | | 45G(e)(3) of the Internal Revenue Code and, for |
18 | | taxable years ending on or after December 31, 2008, |
19 | | any amount included in gross income under Section 87 |
20 | | of the Internal Revenue Code; the provisions of this
|
21 | | subparagraph are exempt from the provisions of Section |
22 | | 250; |
23 | | (K) An amount equal to those dividends included in |
24 | | such total which were
paid by a corporation which |
25 | | conducts business operations in a River Edge |
26 | | Redevelopment Zone or zones created under the River |
|
| | SB2531 | - 167 - | LRB102 15312 HLH 20668 b |
|
|
1 | | Edge Redevelopment Zone Act and
conducts substantially |
2 | | all of its operations
from a River Edge Redevelopment |
3 | | Zone or zones. This subparagraph (K) is exempt from |
4 | | the provisions of Section 250; |
5 | | (L) An amount equal to any contribution made to a |
6 | | job training project
established pursuant to the Real |
7 | | Property Tax Increment Allocation
Redevelopment Act; |
8 | | (M) An amount equal to those dividends included in |
9 | | such total
that were paid by a corporation that |
10 | | conducts business operations in a
federally designated |
11 | | Foreign Trade Zone or Sub-Zone and that is designated |
12 | | a
High Impact Business located in Illinois; provided |
13 | | that dividends eligible
for the deduction provided in |
14 | | subparagraph (K) of paragraph (2) of this
subsection |
15 | | shall not be eligible for the deduction provided under |
16 | | this
subparagraph (M); |
17 | | (N) An amount equal to the amount of the deduction |
18 | | used to compute the
federal income tax credit for |
19 | | restoration of substantial amounts held under
claim of |
20 | | right for the taxable year pursuant to Section 1341 of |
21 | | the
Internal Revenue Code; |
22 | | (O) 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 |
|
| | SB2531 | - 168 - | LRB102 15312 HLH 20668 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 | | The aggregate amount deducted under this |
25 | | subparagraph in all taxable
years for any one piece of |
26 | | property may not exceed the amount of the bonus
|
|
| | SB2531 | - 169 - | LRB102 15312 HLH 20668 b |
|
|
1 | | depreciation deduction
taken on that property on the |
2 | | taxpayer's federal income tax return under
subsection |
3 | | (k) of Section 168 of the Internal Revenue Code. This |
4 | | subparagraph (O) is exempt from the provisions of |
5 | | Section 250; |
6 | | (P) If the taxpayer sells, transfers, abandons, or |
7 | | otherwise disposes of
property for which the taxpayer |
8 | | was required in any taxable year to make an
addition |
9 | | modification under subparagraph (D-5), then an amount |
10 | | equal to that
addition modification. |
11 | | If the taxpayer continues to own property through |
12 | | the last day of the last tax year for which the |
13 | | taxpayer may claim a depreciation deduction for |
14 | | federal income tax purposes and for which the taxpayer |
15 | | was required in any taxable year to make an addition |
16 | | modification under subparagraph (D-5), then an amount |
17 | | equal to that 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 (P) is exempt from the |
22 | | provisions of Section 250; |
23 | | (Q) 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 |
|
| | SB2531 | - 170 - | LRB102 15312 HLH 20668 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 and
(ii) any |
5 | | income from intangible property (net of the deductions |
6 | | allocable thereto) taken into account for the taxable |
7 | | year with respect to a transaction with a taxpayer |
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. This subparagraph (Q) is exempt |
13 | | from Section 250;
|
14 | | (R) An amount equal to the interest income taken |
15 | | into account for the taxable year (net of the |
16 | | deductions allocable thereto) with respect to |
17 | | transactions with (i) a foreign person who would be a |
18 | | member of the taxpayer's unitary business group but |
19 | | for the fact that the foreign person's business |
20 | | activity outside the United States is 80% or more of |
21 | | that person's total business activity and (ii) for |
22 | | taxable years ending on or after December 31, 2008, to |
23 | | a person who would be a member of the same unitary |
24 | | business group but for the fact that the person is |
25 | | prohibited under Section 1501(a)(27) from being |
26 | | included in the unitary business group because he or |
|
| | SB2531 | - 171 - | LRB102 15312 HLH 20668 b |
|
|
1 | | she is ordinarily required to apportion business |
2 | | income under different subsections of Section 304, but |
3 | | not to exceed the addition modification required to be |
4 | | made for the same taxable year under Section |
5 | | 203(d)(2)(D-7) for interest paid, accrued, or |
6 | | incurred, directly or indirectly, to the same person. |
7 | | This subparagraph (R) is exempt from Section 250; |
8 | | (S) An amount equal to the income from intangible |
9 | | property taken into account for the taxable year (net |
10 | | of the deductions allocable thereto) with respect to |
11 | | transactions with (i) a foreign person who would be a |
12 | | member of the taxpayer's unitary business group but |
13 | | for the fact that the foreign person's business |
14 | | activity outside the United States is 80% or more of |
15 | | that person's total business activity and (ii) for |
16 | | taxable years ending on or after December 31, 2008, to |
17 | | a person who would be a member of the same unitary |
18 | | business group but for the fact that the person is |
19 | | prohibited under Section 1501(a)(27) from being |
20 | | included in the unitary business group because he or |
21 | | she is ordinarily required to apportion business |
22 | | income under different subsections of Section 304, but |
23 | | not to exceed the addition modification required to be |
24 | | made for the same taxable year under Section |
25 | | 203(d)(2)(D-8) for intangible expenses and costs paid, |
26 | | accrued, or incurred, directly or indirectly, to the |
|
| | SB2531 | - 172 - | LRB102 15312 HLH 20668 b |
|
|
1 | | same person. This subparagraph (S) is exempt from |
2 | | Section 250; and
|
3 | | (T) For taxable years ending on or after December |
4 | | 31, 2011, in the case of a taxpayer who was required to |
5 | | add back any insurance premiums under Section |
6 | | 203(d)(2)(D-9), such taxpayer may elect to subtract |
7 | | that part of a reimbursement received from the |
8 | | insurance company equal to the amount of the expense |
9 | | or loss (including expenses incurred by the insurance |
10 | | company) that would have been taken into account as a |
11 | | deduction for federal income tax purposes if the |
12 | | expense or loss had been uninsured. If a taxpayer |
13 | | makes the election provided for by this subparagraph |
14 | | (T), the insurer to which the premiums were paid must |
15 | | add back to income the amount subtracted by the |
16 | | taxpayer pursuant to this subparagraph (T). This |
17 | | subparagraph (T) is exempt from the provisions of |
18 | | Section 250 ; and . |
19 | | (U) An amount equal to a partner's or |
20 | | shareholder's share of business income apportionable |
21 | | to Illinois and nonbusiness income allocated to |
22 | | Illinois under Section 303 of this Act that is |
23 | | distributable to each partner or shareholder and which |
24 | | was included by a partnership or Subchapter S |
25 | | corporation in the computing the elective tax under |
26 | | subsection (d-2) of Section 201. This subparagraph (U) |
|
| | SB2531 | - 173 - | LRB102 15312 HLH 20668 b |
|
|
1 | | is exempt from the provisions of Section 250. |
2 | | (e) Gross income; adjusted gross income; taxable income. |
3 | | (1) In general. Subject to the provisions of paragraph |
4 | | (2) and
subsection (b)(3), for purposes of this Section |
5 | | and Section 803(e), a
taxpayer's gross income, adjusted |
6 | | gross income, or taxable income for
the taxable year shall |
7 | | mean the amount of gross income, adjusted gross
income or |
8 | | taxable income properly reportable for federal income tax
|
9 | | purposes for the taxable year under the provisions of the |
10 | | Internal
Revenue Code. Taxable income may be less than |
11 | | zero. However, for taxable
years ending on or after |
12 | | December 31, 1986, net operating loss
carryforwards from |
13 | | taxable years ending prior to December 31, 1986, may not
|
14 | | exceed the sum of federal taxable income for the taxable |
15 | | year before net
operating loss deduction, plus the excess |
16 | | of addition modifications over
subtraction modifications |
17 | | for the taxable year. For taxable years ending
prior to |
18 | | December 31, 1986, taxable income may never be an amount |
19 | | in excess
of the net operating loss for the taxable year as |
20 | | defined in subsections
(c) and (d) of Section 172 of the |
21 | | Internal Revenue Code, provided that when
taxable income |
22 | | of a corporation (other than a Subchapter S corporation),
|
23 | | trust, or estate is less than zero and addition |
24 | | modifications, other than
those provided by subparagraph |
25 | | (E) of paragraph (2) of subsection (b) for
corporations or |
|
| | SB2531 | - 174 - | LRB102 15312 HLH 20668 b |
|
|
1 | | subparagraph (E) of paragraph (2) of subsection (c) for
|
2 | | trusts and estates, exceed subtraction modifications, an |
3 | | addition
modification must be made under those |
4 | | subparagraphs for any other taxable
year to which the |
5 | | taxable income less than zero (net operating loss) is
|
6 | | applied under Section 172 of the Internal Revenue Code or |
7 | | under
subparagraph (E) of paragraph (2) of this subsection |
8 | | (e) applied in
conjunction with Section 172 of the |
9 | | Internal Revenue Code. |
10 | | (2) Special rule. For purposes of paragraph (1) of |
11 | | this subsection,
the taxable income properly reportable |
12 | | for federal income tax purposes
shall mean: |
13 | | (A) Certain life insurance companies. In the case |
14 | | of a life
insurance company subject to the tax imposed |
15 | | by Section 801 of the
Internal Revenue Code, life |
16 | | insurance company taxable income, plus the
amount of |
17 | | distribution from pre-1984 policyholder surplus |
18 | | accounts as
calculated under Section 815a of the |
19 | | Internal Revenue Code; |
20 | | (B) Certain other insurance companies. In the case |
21 | | of mutual
insurance companies subject to the tax |
22 | | imposed by Section 831 of the
Internal Revenue Code, |
23 | | insurance company taxable income; |
24 | | (C) Regulated investment companies. In the case of |
25 | | a regulated
investment company subject to the tax |
26 | | imposed by Section 852 of the
Internal Revenue Code, |
|
| | SB2531 | - 175 - | LRB102 15312 HLH 20668 b |
|
|
1 | | investment company taxable income; |
2 | | (D) Real estate investment trusts. In the case of |
3 | | a real estate
investment trust subject to the tax |
4 | | imposed by Section 857 of the
Internal Revenue Code, |
5 | | real estate investment trust taxable income; |
6 | | (E) Consolidated corporations. In the case of a |
7 | | corporation which
is a member of an affiliated group |
8 | | of corporations filing a consolidated
income tax |
9 | | return for the taxable year for federal income tax |
10 | | purposes,
taxable income determined as if such |
11 | | corporation had filed a separate
return for federal |
12 | | income tax purposes for the taxable year and each
|
13 | | preceding taxable year for which it was a member of an |
14 | | affiliated group.
For purposes of this subparagraph, |
15 | | the taxpayer's separate taxable
income shall be |
16 | | determined as if the election provided by Section
|
17 | | 243(b)(2) of the Internal Revenue Code had been in |
18 | | effect for all such years; |
19 | | (F) Cooperatives. In the case of a cooperative |
20 | | corporation or
association, the taxable income of such |
21 | | organization determined in
accordance with the |
22 | | provisions of Section 1381 through 1388 of the
|
23 | | Internal Revenue Code, but without regard to the |
24 | | prohibition against offsetting losses from patronage |
25 | | activities against income from nonpatronage |
26 | | activities; except that a cooperative corporation or |
|
| | SB2531 | - 176 - | LRB102 15312 HLH 20668 b |
|
|
1 | | association may make an election to follow its federal |
2 | | income tax treatment of patronage losses and |
3 | | nonpatronage losses. In the event such election is |
4 | | made, such losses shall be computed and carried over |
5 | | in a manner consistent with subsection (a) of Section |
6 | | 207 of this Act and apportioned by the apportionment |
7 | | factor reported by the cooperative on its Illinois |
8 | | income tax return filed for the taxable year in which |
9 | | the losses are incurred. The election shall be |
10 | | effective for all taxable years with original returns |
11 | | due on or after the date of the election. In addition, |
12 | | the cooperative may file an amended return or returns, |
13 | | as allowed under this Act, to provide that the |
14 | | election shall be effective for losses incurred or |
15 | | carried forward for taxable years occurring prior to |
16 | | the date of the election. Once made, the election may |
17 | | only be revoked upon approval of the Director. The |
18 | | Department shall adopt rules setting forth |
19 | | requirements for documenting the elections and any |
20 | | resulting Illinois net loss and the standards to be |
21 | | used by the Director in evaluating requests to revoke |
22 | | elections. Public Act 96-932 is declaratory of |
23 | | existing law; |
24 | | (G) Subchapter S corporations. In the case of: (i) |
25 | | a Subchapter S
corporation for which there is in |
26 | | effect an election for the taxable year
under Section |
|
| | SB2531 | - 177 - | LRB102 15312 HLH 20668 b |
|
|
1 | | 1362 of the Internal Revenue Code, the taxable income |
2 | | of such
corporation determined in accordance with |
3 | | Section 1363(b) of the Internal
Revenue Code, except |
4 | | that taxable income shall take into
account those |
5 | | items which are required by Section 1363(b)(1) of the
|
6 | | Internal Revenue Code to be separately stated; and |
7 | | (ii) a Subchapter
S corporation for which there is in |
8 | | effect a federal election to opt out of
the provisions |
9 | | of the Subchapter S Revision Act of 1982 and have |
10 | | applied
instead the prior federal Subchapter S rules |
11 | | as in effect on July 1, 1982,
the taxable income of |
12 | | such corporation determined in accordance with the
|
13 | | federal Subchapter S rules as in effect on July 1, |
14 | | 1982; and |
15 | | (H) Partnerships. In the case of a partnership, |
16 | | taxable income
determined in accordance with Section |
17 | | 703 of the Internal Revenue Code,
except that taxable |
18 | | income shall take into account those items which are
|
19 | | required by Section 703(a)(1) to be separately stated |
20 | | but which would be
taken into account by an individual |
21 | | in calculating his taxable income. |
22 | | (3) Recapture of business expenses on disposition of |
23 | | asset or business. Notwithstanding any other law to the |
24 | | contrary, if in prior years income from an asset or |
25 | | business has been classified as business income and in a |
26 | | later year is demonstrated to be non-business income, then |
|
| | SB2531 | - 178 - | LRB102 15312 HLH 20668 b |
|
|
1 | | all expenses, without limitation, deducted in such later |
2 | | year and in the 2 immediately preceding taxable years |
3 | | related to that asset or business that generated the |
4 | | non-business income shall be added back and recaptured as |
5 | | business income in the year of the disposition of the |
6 | | asset or business. Such amount shall be apportioned to |
7 | | Illinois using the greater of the apportionment fraction |
8 | | computed for the business under Section 304 of this Act |
9 | | for the taxable year or the average of the apportionment |
10 | | fractions computed for the business under Section 304 of |
11 | | this Act for the taxable year and for the 2 immediately |
12 | | preceding taxable years.
|
13 | | (f) Valuation limitation amount. |
14 | | (1) In general. The valuation limitation amount |
15 | | referred to in
subsections (a)(2)(G), (c)(2)(I) and |
16 | | (d)(2)(E) is an amount equal to: |
17 | | (A) The sum of the pre-August 1, 1969 appreciation |
18 | | amounts (to the
extent consisting of gain reportable |
19 | | under the provisions of Section
1245 or 1250 of the |
20 | | Internal Revenue Code) for all property in respect
of |
21 | | which such gain was reported for the taxable year; |
22 | | plus |
23 | | (B) The lesser of (i) the sum of the pre-August 1, |
24 | | 1969 appreciation
amounts (to the extent consisting of |
25 | | capital gain) for all property in
respect of which |
|
| | SB2531 | - 179 - | LRB102 15312 HLH 20668 b |
|
|
1 | | such gain was reported for federal income tax purposes
|
2 | | for the taxable year, or (ii) the net capital gain for |
3 | | the taxable year,
reduced in either case by any amount |
4 | | of such gain included in the amount
determined under |
5 | | subsection (a)(2)(F) or (c)(2)(H). |
6 | | (2) Pre-August 1, 1969 appreciation amount. |
7 | | (A) If the fair market value of property referred |
8 | | to in paragraph
(1) was readily ascertainable on |
9 | | August 1, 1969, the pre-August 1, 1969
appreciation |
10 | | amount for such property is the lesser of (i) the |
11 | | excess of
such fair market value over the taxpayer's |
12 | | basis (for determining gain)
for such property on that |
13 | | date (determined under the Internal Revenue
Code as in |
14 | | effect on that date), or (ii) the total gain realized |
15 | | and
reportable for federal income tax purposes in |
16 | | respect of the sale,
exchange or other disposition of |
17 | | such property. |
18 | | (B) If the fair market value of property referred |
19 | | to in paragraph
(1) was not readily ascertainable on |
20 | | August 1, 1969, the pre-August 1,
1969 appreciation |
21 | | amount for such property is that amount which bears
|
22 | | the same ratio to the total gain reported in respect of |
23 | | the property for
federal income tax purposes for the |
24 | | taxable year, as the number of full
calendar months in |
25 | | that part of the taxpayer's holding period for the
|
26 | | property ending July 31, 1969 bears to the number of |
|
| | SB2531 | - 180 - | LRB102 15312 HLH 20668 b |
|
|
1 | | full calendar
months in the taxpayer's entire holding |
2 | | period for the
property. |
3 | | (C) The Department shall prescribe such |
4 | | regulations as may be
necessary to carry out the |
5 | | purposes of this paragraph. |
6 | | (g) Double deductions. Unless specifically provided |
7 | | otherwise, nothing
in this Section shall permit the same item |
8 | | to be deducted more than once. |
9 | | (h) Legislative intention. Except as expressly provided by |
10 | | this
Section there shall be no modifications or limitations on |
11 | | the amounts
of income, gain, loss or deduction taken into |
12 | | account in determining
gross income, adjusted gross income or |
13 | | taxable income for federal income
tax purposes for the taxable |
14 | | year, or in the amount of such items
entering into the |
15 | | computation of base income and net income under this
Act for |
16 | | such taxable year, whether in respect of property values as of
|
17 | | August 1, 1969 or otherwise. |
18 | | (Source: P.A. 100-22, eff. 7-6-17; 100-905, eff. 8-17-18; |
19 | | 101-9, eff. 6-5-19; 101-81, eff. 7-12-19; revised 9-20-19.)
|
20 | | (35 ILCS 5/601) (from Ch. 120, par. 6-601)
|
21 | | Sec. 601. Payment on due date of return.
|
22 | | (a) In general. Every taxpayer required to file a return |
23 | | under
this Act shall, without assessment, notice or demand, |
|
| | SB2531 | - 181 - | LRB102 15312 HLH 20668 b |
|
|
1 | | pay any tax due
thereon to the Department, at the place fixed |
2 | | for filing, on or before
the date fixed for filing such return |
3 | | (determined without regard to any
extension of time for filing |
4 | | the return) pursuant to regulations
prescribed by the |
5 | | Department.
If, however, the due date for payment of a |
6 | | taxpayer's federal income tax
liability for a tax year (as |
7 | | provided in the Internal Revenue Code or by
Treasury |
8 | | regulation, or as extended by the Internal Revenue Service) is |
9 | | later
than the date fixed for filing the taxpayer's Illinois |
10 | | income tax return for
that tax year, the Department may, by |
11 | | rule, prescribe a due date for payment
that is not later than |
12 | | the due date for payment of the taxpayer's federal
income tax |
13 | | liability. For purposes of the Illinois Administrative |
14 | | Procedure
Act, the adoption of rules to prescribe a later due |
15 | | date for payment shall be
deemed an emergency and necessary |
16 | | for the public interest, safety, and
welfare.
|
17 | | (b) Amount payable. In making payment as provided in this
|
18 | | section there shall remain payable only the balance of such |
19 | | tax
remaining due after giving effect to the following:
|
20 | | (1) Withheld tax. Any amount withheld during any |
21 | | calendar year
pursuant to Article 7 from compensation paid |
22 | | to a taxpayer shall be
deemed to have been paid on account |
23 | | of any tax imposed by subsections 201(a)
and (b) of this |
24 | | Act on
such taxpayer for his taxable year beginning in |
25 | | such calendar year. If
more than one taxable year begins |
26 | | in a calendar year, such amount shall
be deemed to have |
|
| | SB2531 | - 182 - | LRB102 15312 HLH 20668 b |
|
|
1 | | been paid on account of such tax for the last taxable
year |
2 | | so beginning.
|
3 | | (2) Estimated and tentative tax payments. Any amount |
4 | | of estimated tax
paid by a taxpayer pursuant to Article 8 |
5 | | for a taxable year shall be deemed to
have been paid on |
6 | | account of the tax imposed by this Act for such
taxable |
7 | | year.
|
8 | | (3) Foreign tax. The aggregate amount of tax which is |
9 | | imposed
upon or measured by income and which is paid by a |
10 | | resident for a taxable
year to another state or states on |
11 | | income which is also subject to the tax
imposed by |
12 | | subsections 201(a) and (b) of this Act shall be credited |
13 | | against
the tax imposed by subsections 201(a) and (b) |
14 | | otherwise due under
this Act for such taxable year. For |
15 | | taxable years ending prior to December 31, 2009, the |
16 | | aggregate credit provided under this
paragraph shall not |
17 | | exceed that amount which bears the same ratio to the tax
|
18 | | imposed by subsections 201(a) and (b) otherwise due under |
19 | | this Act as the
amount of the taxpayer's base income |
20 | | subject to tax both by such other state or
states and by |
21 | | this State bears to his total base income subject to tax by |
22 | | this
State for the taxable year. For taxable years ending |
23 | | on or after December 31, 2009, the credit provided under |
24 | | this paragraph for tax paid to other states shall not |
25 | | exceed that amount which bears the same ratio to the tax |
26 | | imposed by subsections 201(a) and (b) otherwise due under |
|
| | SB2531 | - 183 - | LRB102 15312 HLH 20668 b |
|
|
1 | | this Act as the amount of the taxpayer's base income that |
2 | | would be allocated or apportioned to other states if all |
3 | | other states had adopted the provisions in Article 3 of |
4 | | this Act bears to the taxpayer's total base income subject |
5 | | to tax by this State for the taxable year. This subsection |
6 | | is exempt from the 30-day threshold set forth in |
7 | | subparagraph (iii) of paragraph (B) of item (2) of |
8 | | subsection (a) of Section 304. The credit provided by this |
9 | | paragraph shall
not be allowed if any creditable tax was |
10 | | deducted in determining base income
for the taxable year. |
11 | | This credit shall include representation of taxes based on |
12 | | income that are imposed on partnerships in which the |
13 | | taxpayer is a partner and Subchapter S corporations in |
14 | | which the taxpayer is a shareholder. Any person claiming |
15 | | such credit shall attach a
statement in support thereof |
16 | | and shall notify the Director of any refund
or reductions |
17 | | in the amount of tax claimed as a credit hereunder all in
|
18 | | such manner and at such time as the Department shall by |
19 | | regulations prescribe.
|
20 | | (4) Accumulation and capital gain distributions. If |
21 | | the net
income of a taxpayer includes amounts included in |
22 | | his base income by
reason of Section 667 of the Internal |
23 | | Revenue Code (relating to
accumulation and capital gain |
24 | | distributions by a trust, respectively),
the tax imposed |
25 | | on such taxpayer by this Act shall be credited with his
pro |
26 | | rata portion of the taxes imposed by this Act on such trust |
|
| | SB2531 | - 184 - | LRB102 15312 HLH 20668 b |
|
|
1 | | for
preceding taxable years which would not have been |
2 | | payable for such
preceding years if the trust had in fact |
3 | | made distributions to its
beneficiaries at the times and |
4 | | in the amounts specified in Sections 666
and 669 of the |
5 | | Internal Revenue Code. The credit provided by this
|
6 | | paragraph shall not reduce the tax otherwise due from the |
7 | | taxpayer to an
amount less than that which would be due if |
8 | | the amounts included by
reason of Section 667 of the |
9 | | Internal Revenue Code were
excluded from his or her base |
10 | | income.
|
11 | | (c) Cross reference. For application against tax due of
|
12 | | overpayments of tax for a prior year, see Section 909.
|
13 | | (Source: P.A. 101-585, eff. 8-26-19.)
|
14 | | (35 ILCS 5/709.5)
|
15 | | Sec. 709.5. Withholding by partnerships, Subchapter S |
16 | | corporations, and trusts. |
17 | | (a) In general. Except for a partnership or Subchapter S |
18 | | corporation that has elected the tax under subsection (d-2) of |
19 | | Section 201, for For each taxable year ending on or after |
20 | | December 31, 2008, every partnership (other than a publicly |
21 | | traded partnership under Section 7704 of the Internal Revenue |
22 | | Code or investment partnership), Subchapter S corporation, and |
23 | | trust must withhold from each nonresident partner, |
24 | | shareholder, or beneficiary (other than a partner, |
25 | | shareholder, or beneficiary who is exempt from tax under |
|
| | SB2531 | - 185 - | LRB102 15312 HLH 20668 b |
|
|
1 | | Section 501(a) of the Internal Revenue Code or under Section |
2 | | 205 of this Act, who is included on a composite return filed by |
3 | | the partnership or Subchapter S corporation for the taxable |
4 | | year under subsection (f) of Section 502 of this Act), or who |
5 | | is a retired partner, to the extent that partner's |
6 | | distributions are exempt from tax under Section 203(a)(2)(F) |
7 | | of this Act) an amount equal to the sum of (i) the share of |
8 | | business income of the partnership, Subchapter S corporation, |
9 | | or trust apportionable to Illinois plus (ii) for taxable years |
10 | | ending on or after December 31, 2014, the share of nonbusiness |
11 | | income of the partnership, Subchapter S corporation, or trust |
12 | | allocated to Illinois under Section 303 of this Act (other |
13 | | than an amount allocated to the commercial domicile of the |
14 | | taxpayer under Section 303 of this Act) that is distributable |
15 | | to that partner, shareholder, or beneficiary under Sections |
16 | | 702 and 704 and Subchapter S of the Internal Revenue Code, |
17 | | whether or not distributed, (iii) multiplied by the applicable |
18 | | rates of tax for that partner, shareholder, or beneficiary |
19 | | under subsections (a) through (d) of Section 201 of this Act, |
20 | | and (iv) net of the share of any credit under Article 2 of this |
21 | | Act that is distributable by the partnership, Subchapter S |
22 | | corporation, or trust and allowable against the tax liability |
23 | | of that partner, shareholder, or beneficiary for a taxable |
24 | | year ending on or after December 31, 2014. |
25 | | (b) Credit for taxes withheld. Any amount withheld under |
26 | | subsection (a) of this Section and paid to the Department |
|
| | SB2531 | - 186 - | LRB102 15312 HLH 20668 b |
|
|
1 | | shall be treated as a payment of the estimated tax liability or |
2 | | of the liability for withholding under this Section of the |
3 | | partner, shareholder, or beneficiary to whom the income is |
4 | | distributable for the taxable year in which that person |
5 | | incurred a liability under this Act with respect to that |
6 | | income.
The Department shall adopt rules pursuant to which a |
7 | | partner, shareholder, or beneficiary may claim a credit |
8 | | against its obligation for withholding under this Section for |
9 | | amounts withheld under this Section with respect to income |
10 | | distributable to it by a partnership, Subchapter S |
11 | | corporation, or trust and allowing its partners, shareholders, |
12 | | or beneficiaries to claim a credit under this subsection (b) |
13 | | for those withheld amounts.
|
14 | | (c) Exemption from withholding. |
15 | | (1) A partnership, Subchapter S corporation, or trust |
16 | | shall not be required to withhold tax under subsection (a) |
17 | | of this Section with respect to any nonresident partner, |
18 | | shareholder, or beneficiary (other than an individual) |
19 | | from whom the partnership, S corporation, or trust has |
20 | | received a certificate, completed in the form and manner |
21 | | prescribed by the Department, stating that such |
22 | | nonresident partner, shareholder, or beneficiary shall: |
23 | | (A) file all returns that the partner, |
24 | | shareholder, or beneficiary is required to file under |
25 | | Section 502 of this Act and make timely payment of all |
26 | | taxes imposed under Section 201 of this Act or under |
|
| | SB2531 | - 187 - | LRB102 15312 HLH 20668 b |
|
|
1 | | this Section on the partner, shareholder, or |
2 | | beneficiary with respect to income of the partnership, |
3 | | S corporation, or trust; and |
4 | | (B) be subject to personal jurisdiction in this |
5 | | State for purposes of the collection of income taxes, |
6 | | together with related interest and penalties, imposed |
7 | | on the partner, shareholder, or beneficiary with |
8 | | respect to the income of the partnership, S |
9 | | corporation, or trust. |
10 | | (2) The Department may revoke the exemption provided |
11 | | by this subsection (c) at any time that it determines that |
12 | | the nonresident partner, shareholder, or beneficiary is |
13 | | not abiding by the terms of the certificate. The |
14 | | Department shall notify the partnership, S corporation, or |
15 | | trust that it has revoked a certificate by notice left at |
16 | | the usual place of business of the partnership, S |
17 | | corporation, or trust or by mail to the last known address |
18 | | of the partnership, S corporation, or trust. |
19 | | (3) A partnership, S corporation, or trust that |
20 | | receives a certificate under this subsection (c) properly |
21 | | completed by a nonresident partner, shareholder, or |
22 | | beneficiary shall not be required to withhold any amount |
23 | | from that partner, shareholder, or beneficiary, the |
24 | | payment of which would be due under Section 711(a-5) of |
25 | | this Act after the receipt of the certificate and no |
26 | | earlier than 60 days after the Department has notified the |
|
| | SB2531 | - 188 - | LRB102 15312 HLH 20668 b |
|
|
1 | | partnership, S corporation, or trust that the certificate |
2 | | has been revoked. |
3 | | (4) Certificates received by a partnership, S |
4 | | corporation, or trust under this subsection (c) must be |
5 | | retained by the partnership, S corporation, or trust and a |
6 | | record of such certificates must be provided to the |
7 | | Department, in a format in which the record is available |
8 | | for review by the Department, upon request by the |
9 | | Department. The Department may, by rule, require the |
10 | | record of certificates to be maintained and provided to |
11 | | the Department electronically.
|
12 | | (Source: P.A. 100-201, eff. 8-18-17.)
|
13 | | (35 ILCS 5/1501) (from Ch. 120, par. 15-1501)
|
14 | | Sec. 1501. Definitions.
|
15 | | (a) In general. When used in this Act, where not
otherwise |
16 | | distinctly expressed or manifestly incompatible with the |
17 | | intent
thereof:
|
18 | | (1) Business income. The term "business income" means |
19 | | all income that may be treated as apportionable business |
20 | | income under the Constitution of the United States. |
21 | | Business income is net of the deductions allocable |
22 | | thereto. Such term does not include compensation
or the |
23 | | deductions allocable thereto.
For each taxable year |
24 | | beginning on or after January 1, 2003, a taxpayer may
|
25 | | elect to treat all income other than compensation as |
|
| | SB2531 | - 189 - | LRB102 15312 HLH 20668 b |
|
|
1 | | business income. This
election shall be made in accordance |
2 | | with rules adopted by the Department and,
once made, shall |
3 | | be irrevocable.
|
4 | | (1.5) Captive real estate investment trust:
|
5 | | (A) The term "captive real estate investment |
6 | | trust" means a corporation, trust, or association:
|
7 | | (i) that is considered a real estate |
8 | | investment trust for the taxable year under |
9 | | Section 856 of the Internal Revenue Code;
|
10 | | (ii) the certificates of beneficial interest |
11 | | or shares of which are not regularly traded on an |
12 | | established securities market; and |
13 | | (iii) of which more than 50% of the voting |
14 | | power or value of the beneficial interest or |
15 | | shares, at any time during the last half of the |
16 | | taxable year, is owned or controlled, directly, |
17 | | indirectly, or constructively, by a single |
18 | | corporation. |
19 | | (B) The term "captive real estate investment |
20 | | trust" does not include: |
21 | | (i) a real estate investment trust of which |
22 | | more than 50% of the voting power or value of the |
23 | | beneficial interest or shares is owned or |
24 | | controlled, directly, indirectly, or |
25 | | constructively, by: |
26 | | (a) a real estate investment trust, other |
|
| | SB2531 | - 190 - | LRB102 15312 HLH 20668 b |
|
|
1 | | than a captive real estate investment trust; |
2 | | (b) a person who is exempt from taxation |
3 | | under Section 501 of the Internal Revenue |
4 | | Code, and who is not required to treat income |
5 | | received from the real estate investment trust |
6 | | as unrelated business taxable income under |
7 | | Section 512 of the Internal Revenue Code; |
8 | | (c) a listed Australian property trust, if |
9 | | no more than 50% of the voting power or value |
10 | | of the beneficial interest or shares of that |
11 | | trust, at any time during the last half of the |
12 | | taxable year, is owned or controlled, directly |
13 | | or indirectly, by a single person; |
14 | | (d) an entity organized as a trust, |
15 | | provided a listed Australian property trust |
16 | | described in subparagraph (c) owns or |
17 | | controls, directly or indirectly, or |
18 | | constructively, 75% or more of the voting |
19 | | power or value of the beneficial interests or |
20 | | shares of such entity; or |
21 | | (e) an entity that is organized outside of |
22 | | the laws of the United States and that |
23 | | satisfies all of the following criteria: |
24 | | (1) at least 75% of the entity's total |
25 | | asset value at the close of its taxable |
26 | | year is represented by real estate assets |
|
| | SB2531 | - 191 - | LRB102 15312 HLH 20668 b |
|
|
1 | | (as defined in Section 856(c)(5)(B) of the |
2 | | Internal Revenue Code, thereby including |
3 | | shares or certificates of beneficial |
4 | | interest in any real estate investment |
5 | | trust), cash and cash equivalents, and |
6 | | U.S. Government securities; |
7 | | (2) the entity is not subject to tax |
8 | | on amounts that are distributed to its |
9 | | beneficial owners or is exempt from |
10 | | entity-level taxation; |
11 | | (3) the entity distributes at least |
12 | | 85% of its taxable income (as computed in |
13 | | the jurisdiction in which it is organized) |
14 | | to the holders of its shares or |
15 | | certificates of beneficial interest on an |
16 | | annual basis; |
17 | | (4) either (i) the shares or |
18 | | beneficial interests of the entity are |
19 | | regularly traded on an established |
20 | | securities market or (ii) not more than |
21 | | 10% of the voting power or value in the |
22 | | entity is held, directly, indirectly, or |
23 | | constructively, by a single entity or |
24 | | individual; and |
25 | | (5) the entity is organized in a |
26 | | country that has entered into a tax treaty |