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Rep. Anthony DeLuca
Filed: 5/6/2021
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1 | | AMENDMENT TO SENATE BILL 2531
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2 | | AMENDMENT NO. ______. Amend Senate Bill 2531 by replacing |
3 | | everything after the enacting clause with the following:
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4 | | "Section 5. The Illinois Income Tax Act is amended by |
5 | | changing Sections 201, 203, and 901 as follows:
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6 | | (35 ILCS 5/201)
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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
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16 | | corporation or political subdivision thereof. |
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1 | | (b) Rates. The tax imposed by subsection (a) of this |
2 | | Section shall be
determined as follows, except as adjusted by |
3 | | subsection (d-1): |
4 | | (1) In the case of an individual, trust or estate, for |
5 | | taxable years
ending prior to July 1, 1989, an amount |
6 | | equal to 2 1/2% of the taxpayer's
net income for the |
7 | | taxable year. |
8 | | (2) In the case of an individual, trust or estate, for |
9 | | taxable years
beginning prior to July 1, 1989 and ending |
10 | | after June 30, 1989, an amount
equal to the sum of (i) 2 |
11 | | 1/2% of the taxpayer's net income for the period
prior to |
12 | | July 1, 1989, as calculated under Section 202.3, and (ii) |
13 | | 3% of the
taxpayer's net income for the period after June |
14 | | 30, 1989, as calculated
under Section 202.3. |
15 | | (3) In the case of an individual, trust or estate, for |
16 | | taxable years
beginning after June 30, 1989, and ending |
17 | | prior to January 1, 2011, an amount equal to 3% of the |
18 | | taxpayer's net
income for the taxable year. |
19 | | (4) In the case of an individual, trust, or estate, |
20 | | for taxable years beginning prior to January 1, 2011, and |
21 | | ending after December 31, 2010, an amount equal to the sum |
22 | | of (i) 3% of the taxpayer's net income for the period prior |
23 | | to January 1, 2011, as calculated under Section 202.5, and |
24 | | (ii) 5% of the taxpayer's net income for the period after |
25 | | December 31, 2010, as calculated under Section 202.5. |
26 | | (5) In the case of an individual, trust, or estate, |
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1 | | for taxable years beginning on or after January 1, 2011, |
2 | | and ending prior to January 1, 2015, an amount equal to 5% |
3 | | of the taxpayer's net income for the taxable year. |
4 | | (5.1) In the case of an individual, trust, or estate, |
5 | | for taxable years beginning prior to January 1, 2015, and |
6 | | ending after December 31, 2014, an amount equal to the sum |
7 | | of (i) 5% of the taxpayer's net income for the period prior |
8 | | to January 1, 2015, as calculated under Section 202.5, and |
9 | | (ii) 3.75% of the taxpayer's net income for the period |
10 | | after December 31, 2014, as calculated under Section |
11 | | 202.5. |
12 | | (5.2) In the case of an individual, trust, or estate, |
13 | | for taxable years beginning on or after January 1, 2015, |
14 | | and ending prior to July 1, 2017, an amount equal to 3.75% |
15 | | of the taxpayer's net income for the taxable year. |
16 | | (5.3) In the case of an individual, trust, or estate, |
17 | | for taxable years beginning prior to July 1, 2017, and |
18 | | ending after June 30, 2017, an amount equal to the sum of |
19 | | (i) 3.75% of the taxpayer's net income for the period |
20 | | prior to July 1, 2017, as calculated under Section 202.5, |
21 | | and (ii) 4.95% of the taxpayer's net income for the period |
22 | | after June 30, 2017, as calculated under Section 202.5. |
23 | | (5.4) In the case of an individual, trust, or estate, |
24 | | for taxable years beginning on or after July 1, 2017, an |
25 | | amount equal to 4.95% of the taxpayer's net income for the |
26 | | taxable year. |
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1 | | (6) In the case of a corporation, for taxable years
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2 | | ending prior to July 1, 1989, an amount equal to 4% of the
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3 | | taxpayer's net income for the taxable year. |
4 | | (7) In the case of a corporation, for taxable years |
5 | | beginning prior to
July 1, 1989 and ending after June 30, |
6 | | 1989, an amount equal to the sum of
(i) 4% of the |
7 | | taxpayer's net income for the period prior to July 1, |
8 | | 1989,
as calculated under Section 202.3, and (ii) 4.8% of |
9 | | the taxpayer's net
income for the period after June 30, |
10 | | 1989, as calculated under Section
202.3. |
11 | | (8) In the case of a corporation, for taxable years |
12 | | beginning after
June 30, 1989, and ending prior to January |
13 | | 1, 2011, an amount equal to 4.8% of the taxpayer's net |
14 | | income for the
taxable year. |
15 | | (9) In the case of a corporation, for taxable years |
16 | | beginning prior to January 1, 2011, and ending after |
17 | | December 31, 2010, an amount equal to the sum of (i) 4.8% |
18 | | of the taxpayer's net income for the period prior to |
19 | | January 1, 2011, as calculated under Section 202.5, and |
20 | | (ii) 7% of the taxpayer's net income for the period after |
21 | | December 31, 2010, as calculated under Section 202.5. |
22 | | (10) In the case of a corporation, for taxable years |
23 | | beginning on or after January 1, 2011, and ending prior to |
24 | | January 1, 2015, an amount equal to 7% of the taxpayer's |
25 | | net income for the taxable year. |
26 | | (11) In the case of a corporation, for taxable years |
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1 | | beginning prior to January 1, 2015, and ending after |
2 | | December 31, 2014, an amount equal to the sum of (i) 7% of |
3 | | the taxpayer's net income for the period prior to January |
4 | | 1, 2015, as calculated under Section 202.5, and (ii) 5.25% |
5 | | of the taxpayer's net income for the period after December |
6 | | 31, 2014, as calculated under Section 202.5. |
7 | | (12) In the case of a corporation, for taxable years |
8 | | beginning on or after January 1, 2015, and ending prior to |
9 | | July 1, 2017, an amount equal to 5.25% of the taxpayer's |
10 | | net income for the taxable year. |
11 | | (13) In the case of a corporation, for taxable years |
12 | | beginning prior to July 1, 2017, and ending after June 30, |
13 | | 2017, an amount equal to the sum of (i) 5.25% of the |
14 | | taxpayer's net income for the period prior to July 1, |
15 | | 2017, as calculated under Section 202.5, and (ii) 7% of |
16 | | the taxpayer's net income for the period after June 30, |
17 | | 2017, as calculated under Section 202.5. |
18 | | (14) In the case of a corporation, for taxable years |
19 | | beginning on or after July 1, 2017, an amount equal to 7% |
20 | | of the taxpayer's net income for the taxable year. |
21 | | The rates under this subsection (b) are subject to the |
22 | | provisions of Section 201.5. |
23 | | (b-5) Surcharge; sale or exchange of assets, properties, |
24 | | and intangibles of organization gaming licensees. For each of |
25 | | taxable years 2019 through 2027, a surcharge is imposed on all |
26 | | taxpayers on income arising from the sale or exchange of |
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1 | | capital assets, depreciable business property, real property |
2 | | used in the trade or business, and Section 197 intangibles (i) |
3 | | of an organization licensee under the Illinois Horse Racing |
4 | | Act of 1975 and (ii) of an organization gaming licensee under |
5 | | the Illinois Gambling Act. The amount of the surcharge is |
6 | | equal to the amount of federal income tax liability for the |
7 | | taxable year attributable to those sales and exchanges. The |
8 | | surcharge imposed shall not apply if: |
9 | | (1) the organization gaming license, organization |
10 | | license, or racetrack property is transferred as a result |
11 | | of any of the following: |
12 | | (A) bankruptcy, a receivership, or a debt |
13 | | adjustment initiated by or against the initial |
14 | | licensee or the substantial owners of the initial |
15 | | licensee; |
16 | | (B) cancellation, revocation, or termination of |
17 | | any such license by the Illinois Gaming Board or the |
18 | | Illinois Racing Board; |
19 | | (C) a determination by the Illinois Gaming Board |
20 | | that transfer of the license is in the best interests |
21 | | of Illinois gaming; |
22 | | (D) the death of an owner of the equity interest in |
23 | | a licensee; |
24 | | (E) the acquisition of a controlling interest in |
25 | | the stock or substantially all of the assets of a |
26 | | publicly traded company; |
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1 | | (F) a transfer by a parent company to a wholly |
2 | | owned subsidiary; or |
3 | | (G) the transfer or sale to or by one person to |
4 | | another person where both persons were initial owners |
5 | | of the license when the license was issued; or |
6 | | (2) the controlling interest in the organization |
7 | | gaming license, organization license, or racetrack |
8 | | property is transferred in a transaction to lineal |
9 | | descendants in which no gain or loss is recognized or as a |
10 | | result of a transaction in accordance with Section 351 of |
11 | | the Internal Revenue Code in which no gain or loss is |
12 | | recognized; or |
13 | | (3) live horse racing was not conducted in 2010 at a |
14 | | racetrack located within 3 miles of the Mississippi River |
15 | | under a license issued pursuant to the Illinois Horse |
16 | | Racing Act of 1975. |
17 | | The transfer of an organization gaming license, |
18 | | organization license, or racetrack property by a person other |
19 | | than the initial licensee to receive the organization gaming |
20 | | license is not subject to a surcharge. The Department shall |
21 | | adopt rules necessary to implement and administer this |
22 | | subsection. |
23 | | (c) Personal Property Tax Replacement Income Tax.
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24 | | Beginning on July 1, 1979 and thereafter, in addition to such |
25 | | income
tax, there is also hereby imposed the Personal Property |
26 | | Tax Replacement
Income Tax measured by net income on every |
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1 | | corporation (including Subchapter
S corporations), partnership |
2 | | and trust, for each taxable year ending after
June 30, 1979. |
3 | | Such taxes are imposed on the privilege of earning or
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4 | | receiving income in or as a resident of this State. The |
5 | | Personal Property
Tax Replacement Income Tax shall be in |
6 | | addition to the income tax imposed
by subsections (a) and (b) |
7 | | of this Section and in addition to all other
occupation or |
8 | | privilege taxes imposed by this State or by any municipal
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9 | | corporation or political subdivision thereof. |
10 | | (d) Additional Personal Property Tax Replacement Income |
11 | | Tax Rates.
The personal property tax replacement income tax |
12 | | imposed by this subsection
and subsection (c) of this Section |
13 | | in the case of a corporation, other
than a Subchapter S |
14 | | corporation and except as adjusted by subsection (d-1),
shall |
15 | | be an additional amount equal to
2.85% of such taxpayer's net |
16 | | income for the taxable year, except that
beginning on January |
17 | | 1, 1981, and thereafter, the rate of 2.85% specified
in this |
18 | | subsection shall be reduced to 2.5%, and in the case of a
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19 | | partnership, trust or a Subchapter S corporation shall be an |
20 | | additional
amount equal to 1.5% of such taxpayer's net income |
21 | | for the taxable year. |
22 | | (d-1) Rate reduction for certain foreign insurers. In the |
23 | | case of a
foreign insurer, as defined by Section 35A-5 of the |
24 | | Illinois Insurance Code,
whose state or country of domicile |
25 | | imposes on insurers domiciled in Illinois
a retaliatory tax |
26 | | (excluding any insurer
whose premiums from reinsurance assumed |
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1 | | are 50% or more of its total insurance
premiums as determined |
2 | | under paragraph (2) of subsection (b) of Section 304,
except |
3 | | that for purposes of this determination premiums from |
4 | | reinsurance do
not include premiums from inter-affiliate |
5 | | reinsurance arrangements),
beginning with taxable years ending |
6 | | on or after December 31, 1999,
the sum of
the rates of tax |
7 | | imposed by subsections (b) and (d) shall be reduced (but not
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8 | | increased) to the rate at which the total amount of tax imposed |
9 | | under this Act,
net of all credits allowed under this Act, |
10 | | shall equal (i) the total amount of
tax that would be imposed |
11 | | on the foreign insurer's net income allocable to
Illinois for |
12 | | the taxable year by such foreign insurer's state or country of
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13 | | domicile if that net income were subject to all income taxes |
14 | | and taxes
measured by net income imposed by such foreign |
15 | | insurer's state or country of
domicile, net of all credits |
16 | | allowed or (ii) a rate of zero if no such tax is
imposed on |
17 | | such income by the foreign insurer's state of domicile.
For |
18 | | the purposes of this subsection (d-1), an inter-affiliate |
19 | | includes a
mutual insurer under common management. |
20 | | (1) For the purposes of subsection (d-1), in no event |
21 | | shall the sum of the
rates of tax imposed by subsections |
22 | | (b) and (d) be reduced below the rate at
which the sum of: |
23 | | (A) the total amount of tax imposed on such |
24 | | foreign insurer under
this Act for a taxable year, net |
25 | | of all credits allowed under this Act, plus |
26 | | (B) the privilege tax imposed by Section 409 of |
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1 | | the Illinois Insurance
Code, the fire insurance |
2 | | company tax imposed by Section 12 of the Fire
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3 | | Investigation Act, and the fire department taxes |
4 | | imposed under Section 11-10-1
of the Illinois |
5 | | Municipal Code, |
6 | | equals 1.25% for taxable years ending prior to December |
7 | | 31, 2003, or
1.75% for taxable years ending on or after |
8 | | December 31, 2003, of the net
taxable premiums written for |
9 | | the taxable year,
as described by subsection (1) of |
10 | | Section 409 of the Illinois Insurance Code.
This paragraph |
11 | | will in no event increase the rates imposed under |
12 | | subsections
(b) and (d). |
13 | | (2) Any reduction in the rates of tax imposed by this |
14 | | subsection shall be
applied first against the rates |
15 | | imposed by subsection (b) and only after the
tax imposed |
16 | | by subsection (a) net of all credits allowed under this |
17 | | Section
other than the credit allowed under subsection (i) |
18 | | has been reduced to zero,
against the rates imposed by |
19 | | subsection (d). |
20 | | This subsection (d-1) is exempt from the provisions of |
21 | | Section 250. |
22 | | (e) Investment credit. A taxpayer shall be allowed a |
23 | | credit
against the Personal Property Tax Replacement Income |
24 | | Tax for
investment in qualified property. |
25 | | (1) A taxpayer shall be allowed a credit equal to .5% |
26 | | of
the basis of qualified property placed in service |
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1 | | during the taxable year,
provided such property is placed |
2 | | in service on or after
July 1, 1984. There shall be allowed |
3 | | an additional credit equal
to .5% of the basis of |
4 | | qualified property placed in service during the
taxable |
5 | | year, provided such property is placed in service on or
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6 | | after July 1, 1986, and the taxpayer's base employment
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7 | | within Illinois has increased by 1% or more over the |
8 | | preceding year as
determined by the taxpayer's employment |
9 | | records filed with the
Illinois Department of Employment |
10 | | Security. Taxpayers who are new to
Illinois shall be |
11 | | deemed to have met the 1% growth in base employment for
the |
12 | | first year in which they file employment records with the |
13 | | Illinois
Department of Employment Security. The provisions |
14 | | added to this Section by
Public Act 85-1200 (and restored |
15 | | by Public Act 87-895) shall be
construed as declaratory of |
16 | | existing law and not as a new enactment. If,
in any year, |
17 | | the increase in base employment within Illinois over the
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18 | | preceding year is less than 1%, the additional credit |
19 | | shall be limited to that
percentage times a fraction, the |
20 | | numerator of which is .5% and the denominator
of which is |
21 | | 1%, but shall not exceed .5%. The investment credit shall |
22 | | not be
allowed to the extent that it would reduce a |
23 | | taxpayer's liability in any tax
year below zero, nor may |
24 | | any credit for qualified property be allowed for any
year |
25 | | other than the year in which the property was placed in |
26 | | service in
Illinois. For tax years ending on or after |
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1 | | December 31, 1987, and on or
before December 31, 1988, the |
2 | | credit shall be allowed for the tax year in
which the |
3 | | property is placed in service, or, if the amount of the |
4 | | credit
exceeds the tax liability for that year, whether it |
5 | | exceeds the original
liability or the liability as later |
6 | | amended, such excess may be carried
forward and applied to |
7 | | the tax liability of the 5 taxable years following
the |
8 | | excess credit years if the taxpayer (i) makes investments |
9 | | which cause
the creation of a minimum of 2,000 full-time |
10 | | equivalent jobs in Illinois,
(ii) is located in an |
11 | | enterprise zone established pursuant to the Illinois
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12 | | Enterprise Zone Act and (iii) is certified by the |
13 | | Department of Commerce
and Community Affairs (now |
14 | | Department of Commerce and Economic Opportunity) as |
15 | | complying with the requirements specified in
clause (i) |
16 | | and (ii) by July 1, 1986. The Department of Commerce and
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17 | | Community Affairs (now Department of Commerce and Economic |
18 | | Opportunity) shall notify the Department of Revenue of all |
19 | | such
certifications immediately. For tax years ending |
20 | | after December 31, 1988,
the credit shall be allowed for |
21 | | the tax year in which the property is
placed in service, |
22 | | or, if the amount of the credit exceeds the tax
liability |
23 | | for that year, whether it exceeds the original liability |
24 | | or the
liability as later amended, such excess may be |
25 | | carried forward and applied
to the tax liability of the 5 |
26 | | taxable years following the excess credit
years. The |
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1 | | credit shall be applied to the earliest year for which |
2 | | there is
a liability. If there is credit from more than one |
3 | | tax year that is
available to offset a liability, earlier |
4 | | credit shall be applied first. |
5 | | (2) The term "qualified property" means property |
6 | | which: |
7 | | (A) is tangible, whether new or used, including |
8 | | buildings and structural
components of buildings and |
9 | | signs that are real property, but not including
land |
10 | | or improvements to real property that are not a |
11 | | structural component of a
building such as |
12 | | landscaping, sewer lines, local access roads, fencing, |
13 | | parking
lots, and other appurtenances; |
14 | | (B) is depreciable pursuant to Section 167 of the |
15 | | Internal Revenue Code,
except that "3-year property" |
16 | | as defined in Section 168(c)(2)(A) of that
Code is not |
17 | | eligible for the credit provided by this subsection |
18 | | (e); |
19 | | (C) is acquired by purchase as defined in Section |
20 | | 179(d) of
the Internal Revenue Code; |
21 | | (D) is used in Illinois by a taxpayer who is |
22 | | primarily engaged in
manufacturing, or in mining coal |
23 | | or fluorite, or in retailing, or was placed in service |
24 | | on or after July 1, 2006 in a River Edge Redevelopment |
25 | | Zone established pursuant to the River Edge |
26 | | Redevelopment Zone Act; and |
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1 | | (E) has not previously been used in Illinois in |
2 | | such a manner and by
such a person as would qualify for |
3 | | the credit provided by this subsection
(e) or |
4 | | subsection (f). |
5 | | (3) For purposes of this subsection (e), |
6 | | "manufacturing" means
the material staging and production |
7 | | of tangible personal property by
procedures commonly |
8 | | regarded as manufacturing, processing, fabrication, or
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9 | | assembling which changes some existing material into new |
10 | | shapes, new
qualities, or new combinations. For purposes |
11 | | of this subsection
(e) the term "mining" shall have the |
12 | | same meaning as the term "mining" in
Section 613(c) of the |
13 | | Internal Revenue Code. For purposes of this subsection
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14 | | (e), the term "retailing" means the sale of tangible |
15 | | personal property for use or consumption and not for |
16 | | resale, or
services rendered in conjunction with the sale |
17 | | of tangible personal property for use or consumption and |
18 | | not for resale. For purposes of this subsection (e), |
19 | | "tangible personal property" has the same meaning as when |
20 | | that term is used in the Retailers' Occupation Tax Act, |
21 | | and, for taxable years ending after December 31, 2008, |
22 | | does not include the generation, transmission, or |
23 | | distribution of electricity. |
24 | | (4) The basis of qualified property shall be the basis
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25 | | used to compute the depreciation deduction for federal |
26 | | income tax purposes. |
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1 | | (5) If the basis of the property for federal income |
2 | | tax depreciation
purposes is increased after it has been |
3 | | placed in service in Illinois by
the taxpayer, the amount |
4 | | of such increase shall be deemed property placed
in |
5 | | service on the date of such increase in basis. |
6 | | (6) The term "placed in service" shall have the same
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7 | | meaning as under Section 46 of the Internal Revenue Code. |
8 | | (7) If during any taxable year, any property ceases to
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9 | | be qualified property in the hands of the taxpayer within |
10 | | 48 months after
being placed in service, or the situs of |
11 | | any qualified property is
moved outside Illinois within 48 |
12 | | months after being placed in service, the
Personal |
13 | | Property Tax Replacement Income Tax for such taxable year |
14 | | shall be
increased. Such increase shall be determined by |
15 | | (i) recomputing the
investment credit which would have |
16 | | been allowed for the year in which
credit for such |
17 | | property was originally allowed by eliminating such
|
18 | | property from such computation and, (ii) subtracting such |
19 | | recomputed credit
from the amount of credit previously |
20 | | allowed. For the purposes of this
paragraph (7), a |
21 | | reduction of the basis of qualified property resulting
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22 | | from a redetermination of the purchase price shall be |
23 | | deemed a disposition
of qualified property to the extent |
24 | | of such reduction. |
25 | | (8) Unless the investment credit is extended by law, |
26 | | the
basis of qualified property shall not include costs |
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1 | | incurred after
December 31, 2018, except for costs |
2 | | incurred pursuant to a binding
contract entered into on or |
3 | | before December 31, 2018. |
4 | | (9) Each taxable year ending before December 31, 2000, |
5 | | a partnership may
elect to pass through to its
partners |
6 | | the credits to which the partnership is entitled under |
7 | | this subsection
(e) for the taxable year. A partner may |
8 | | use the credit allocated to him or her
under this |
9 | | paragraph only against the tax imposed in subsections (c) |
10 | | and (d) of
this Section. If the partnership makes that |
11 | | election, those credits shall be
allocated among the |
12 | | partners in the partnership in accordance with the rules
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13 | | set forth in Section 704(b) of the Internal Revenue Code, |
14 | | and the rules
promulgated under that Section, and the |
15 | | allocated amount of the credits shall
be allowed to the |
16 | | partners for that taxable year. The partnership shall make
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17 | | this election on its Personal Property Tax Replacement |
18 | | Income Tax return for
that taxable year. The election to |
19 | | pass through the credits shall be
irrevocable. |
20 | | For taxable years ending on or after December 31, |
21 | | 2000, a
partner that qualifies its
partnership for a |
22 | | subtraction under subparagraph (I) of paragraph (2) of
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23 | | subsection (d) of Section 203 or a shareholder that |
24 | | qualifies a Subchapter S
corporation for a subtraction |
25 | | under subparagraph (S) of paragraph (2) of
subsection (b) |
26 | | of Section 203 shall be allowed a credit under this |
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1 | | subsection
(e) equal to its share of the credit earned |
2 | | under this subsection (e) during
the taxable year by the |
3 | | partnership or Subchapter S corporation, determined in
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4 | | accordance with the determination of income and |
5 | | distributive share of
income under Sections 702 and 704 |
6 | | and Subchapter S of the Internal Revenue
Code. This |
7 | | paragraph is exempt from the provisions of Section 250. |
8 | | (f) Investment credit; Enterprise Zone; River Edge |
9 | | Redevelopment Zone. |
10 | | (1) A taxpayer shall be allowed a credit against the |
11 | | tax imposed
by subsections (a) and (b) of this Section for |
12 | | investment in qualified
property which is placed in |
13 | | service in an Enterprise Zone created
pursuant to the |
14 | | Illinois Enterprise Zone Act or, for property placed in |
15 | | service on or after July 1, 2006, a River Edge |
16 | | Redevelopment Zone established pursuant to the River Edge |
17 | | Redevelopment Zone Act. For partners, shareholders
of |
18 | | Subchapter S corporations, and owners of limited liability |
19 | | companies,
if the liability company is treated as a |
20 | | partnership for purposes of
federal and State income |
21 | | taxation, there shall be allowed a credit under
this |
22 | | subsection (f) to be determined in accordance with the |
23 | | determination
of income and distributive share of income |
24 | | under Sections 702 and 704 and
Subchapter S of the |
25 | | Internal Revenue Code. The credit shall be .5% of the
|
26 | | basis for such property. The credit shall be available |
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1 | | only in the taxable
year in which the property is placed in |
2 | | service in the Enterprise Zone or River Edge Redevelopment |
3 | | Zone 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. For |
6 | | tax years ending on or after December 31, 1985, the credit
|
7 | | shall be allowed for the tax year in which the property is |
8 | | placed in
service, or, if the amount of the credit exceeds |
9 | | the tax liability for that
year, whether it exceeds the |
10 | | original liability or the liability as later
amended, such |
11 | | excess may be carried forward and applied to the tax
|
12 | | liability of the 5 taxable years following the excess |
13 | | credit year.
The credit shall be applied to the earliest |
14 | | year for which there is a
liability. If there is credit |
15 | | from more than one tax year that is available
to offset a |
16 | | liability, the credit accruing first in time shall be |
17 | | applied
first. |
18 | | (2) The term qualified property means property which: |
19 | | (A) is tangible, whether new or used, including |
20 | | buildings and
structural components of buildings; |
21 | | (B) is depreciable pursuant to Section 167 of the |
22 | | Internal Revenue
Code, except that "3-year property" |
23 | | as defined in Section 168(c)(2)(A) of
that Code is not |
24 | | eligible for the credit provided by this subsection |
25 | | (f); |
26 | | (C) is acquired by purchase as defined in Section |
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1 | | 179(d) of
the Internal Revenue Code; |
2 | | (D) is used in the Enterprise Zone or River Edge |
3 | | Redevelopment Zone by the taxpayer; and |
4 | | (E) has not been previously used in Illinois in |
5 | | such a manner and by
such a person as would qualify for |
6 | | the credit provided by this subsection
(f) or |
7 | | subsection (e). |
8 | | (3) The basis of qualified property shall be the basis |
9 | | used to compute
the depreciation deduction for federal |
10 | | income tax purposes. |
11 | | (4) If the basis of the property for federal income |
12 | | tax depreciation
purposes is increased after it has been |
13 | | placed in service in the Enterprise
Zone or River Edge |
14 | | Redevelopment Zone by the taxpayer, the amount of such |
15 | | increase shall be deemed property
placed in service on the |
16 | | date of such increase in basis. |
17 | | (5) The term "placed in service" shall have the same |
18 | | meaning as under
Section 46 of the Internal Revenue Code. |
19 | | (6) If during any taxable year, any property ceases to |
20 | | be qualified
property in the hands of the taxpayer within |
21 | | 48 months after being placed
in service, or the situs of |
22 | | any qualified property is moved outside the
Enterprise |
23 | | Zone or River Edge Redevelopment Zone within 48 months |
24 | | after being placed in service, the tax
imposed under |
25 | | subsections (a) and (b) of this Section for such taxable |
26 | | year
shall be increased. Such increase shall be determined |
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1 | | by (i) recomputing
the investment credit which would have |
2 | | been allowed for the year in which
credit for such |
3 | | property was originally allowed by eliminating such
|
4 | | property from such computation, and (ii) subtracting such |
5 | | recomputed credit
from the amount of credit previously |
6 | | allowed. For the purposes of this
paragraph (6), a |
7 | | reduction of the basis of qualified property resulting
|
8 | | from a redetermination of the purchase price shall be |
9 | | deemed a disposition
of qualified property to the extent |
10 | | of such reduction. |
11 | | (7) There shall be allowed an additional credit equal |
12 | | to 0.5% of the basis of qualified property placed in |
13 | | service during the taxable year in a River Edge |
14 | | Redevelopment Zone, provided such property is placed in |
15 | | service on or after July 1, 2006, and the taxpayer's base |
16 | | employment within Illinois has increased by 1% or more |
17 | | over the preceding year as determined by the taxpayer's |
18 | | employment records filed with the Illinois Department of |
19 | | Employment Security. Taxpayers who are new to Illinois |
20 | | shall be deemed to have met the 1% growth in base |
21 | | employment for the first year in which they file |
22 | | employment records with the Illinois Department of |
23 | | Employment Security. If, in any year, the increase in base |
24 | | employment within Illinois over the preceding year is less |
25 | | than 1%, the additional credit shall be limited to that |
26 | | percentage times a fraction, the numerator of which is |
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1 | | 0.5% and the denominator of which is 1%, but shall not |
2 | | exceed 0.5%.
|
3 | | (8) For taxable years beginning on or after January 1, |
4 | | 2021, there shall be allowed an Enterprise Zone |
5 | | construction jobs credit against the taxes imposed under |
6 | | subsections (a) and (b) of this Section as provided in |
7 | | Section 13 of the Illinois Enterprise Zone Act. |
8 | | The credit or credits may not reduce the taxpayer's |
9 | | liability to less than zero. If the amount of the credit or |
10 | | credits exceeds the taxpayer's liability, the excess may |
11 | | be carried forward and applied against the taxpayer's |
12 | | liability in succeeding calendar years in the same manner |
13 | | provided under paragraph (4) of Section 211 of this Act. |
14 | | The credit or credits shall be applied to the earliest |
15 | | year for which there is a tax liability. If there are |
16 | | credits from more than one taxable year that are available |
17 | | to offset a liability, the earlier credit shall be applied |
18 | | first. |
19 | | For partners, shareholders of Subchapter S |
20 | | corporations, and owners of limited liability companies, |
21 | | if the liability company is treated as a partnership for |
22 | | the purposes of federal and State income taxation, there |
23 | | shall be allowed a credit under this Section to be |
24 | | determined in accordance with the determination of income |
25 | | and distributive share of income under Sections 702 and |
26 | | 704 and Subchapter S of the Internal Revenue Code. |
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1 | | The total aggregate amount of credits awarded under |
2 | | the Blue Collar Jobs Act (Article 20 of Public Act 101-9 |
3 | | this amendatory Act of the 101st General Assembly ) shall |
4 | | not exceed $20,000,000 in any State fiscal year . |
5 | | This paragraph (8) is exempt from the provisions of |
6 | | Section 250. |
7 | | (g) (Blank). |
8 | | (h) Investment credit; High Impact Business. |
9 | | (1) Subject to subsections (b) and (b-5) of Section
|
10 | | 5.5 of the Illinois Enterprise Zone Act, a taxpayer shall |
11 | | be allowed a credit
against the tax imposed by subsections |
12 | | (a) and (b) of this Section for
investment in qualified
|
13 | | property which is placed in service by a Department of |
14 | | Commerce and Economic Opportunity
designated High Impact |
15 | | Business. The credit shall be .5% of the basis
for such |
16 | | property. The credit shall not be available (i) until the |
17 | | minimum
investments in qualified property set forth in |
18 | | subdivision (a)(3)(A) of
Section 5.5 of the Illinois
|
19 | | Enterprise Zone Act have been satisfied
or (ii) until the |
20 | | time authorized in subsection (b-5) of the Illinois
|
21 | | Enterprise Zone Act for entities designated as High Impact |
22 | | Businesses under
subdivisions (a)(3)(B), (a)(3)(C), and |
23 | | (a)(3)(D) of Section 5.5 of the Illinois
Enterprise Zone |
24 | | Act, and shall not be allowed to the extent that it would
|
25 | | reduce a taxpayer's liability for the tax imposed by |
26 | | subsections (a) and (b) of
this Section to below zero. The |
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1 | | credit applicable to such investments shall be
taken in |
2 | | the taxable year in which such investments have been |
3 | | completed. The
credit for additional investments beyond |
4 | | the minimum investment by a designated
high impact |
5 | | business authorized under subdivision (a)(3)(A) of Section |
6 | | 5.5 of
the Illinois Enterprise Zone Act shall be available |
7 | | only in the taxable year in
which the property is placed in |
8 | | service and shall not be allowed to the extent
that it |
9 | | would 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, 1987, 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 | | Changes made in this subdivision (h)(1) by Public Act |
24 | | 88-670
restore changes made by Public Act 85-1182 and |
25 | | reflect existing law. |
26 | | (2) The term qualified property means property which: |
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1 | | (A) is tangible, whether new or used, including |
2 | | buildings and
structural components of buildings; |
3 | | (B) is depreciable pursuant to Section 167 of the |
4 | | Internal Revenue
Code, except that "3-year property" |
5 | | as defined in Section 168(c)(2)(A) of
that Code is not |
6 | | eligible for the credit provided by this subsection |
7 | | (h); |
8 | | (C) is acquired by purchase as defined in Section |
9 | | 179(d) of the
Internal Revenue Code; and |
10 | | (D) is not eligible for the Enterprise Zone |
11 | | Investment Credit provided
by subsection (f) of this |
12 | | Section. |
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 a federally
designated Foreign Trade |
19 | | Zone or Sub-Zone located in Illinois by the taxpayer,
the |
20 | | amount of such increase shall be deemed property placed in |
21 | | service on
the 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 ending on or before |
25 | | December 31, 1996,
any property ceases to be qualified
|
26 | | property in the hands of the taxpayer within 48 months |
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1 | | after being placed
in service, or the situs of any |
2 | | qualified property is moved outside
Illinois within 48 |
3 | | months after being placed in service, the tax imposed
|
4 | | under subsections (a) and (b) of this Section for such |
5 | | taxable year shall
be increased. Such increase shall be |
6 | | determined by (i) recomputing the
investment credit which |
7 | | would have been allowed for the year in which
credit for |
8 | | such 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) Beginning with tax years ending after December 31, |
17 | | 1996, if a
taxpayer qualifies for the credit under this |
18 | | subsection (h) and thereby is
granted a tax abatement and |
19 | | the taxpayer relocates its entire facility in
violation of |
20 | | the explicit terms and length of the contract under |
21 | | Section
18-183 of the Property Tax Code, the tax imposed |
22 | | under subsections
(a) and (b) of this Section shall be |
23 | | increased for the taxable year
in which the taxpayer |
24 | | relocated its facility by an amount equal to the
amount of |
25 | | credit received by the taxpayer under this subsection (h). |
26 | | (h-5) High Impact Business construction constructions jobs |
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1 | | credit. For taxable years beginning on or after January 1, |
2 | | 2021, there shall also be allowed a High Impact Business |
3 | | construction jobs credit against the tax imposed under |
4 | | subsections (a) and (b) of this Section as provided in |
5 | | subsections (i) and (j) of Section 5.5 of the Illinois |
6 | | Enterprise Zone Act. |
7 | | The credit or credits may not reduce the taxpayer's |
8 | | liability to less than zero. If the amount of the credit or |
9 | | credits exceeds the taxpayer's liability, the excess may be |
10 | | carried forward and applied against the taxpayer's liability |
11 | | in succeeding calendar years in the manner provided under |
12 | | paragraph (4) of Section 211 of this Act. The credit or credits |
13 | | shall be applied to the earliest year for which there is a tax |
14 | | liability. If there are credits from more than one taxable |
15 | | year that are available to offset a liability, the earlier |
16 | | credit shall be applied first. |
17 | | For partners, shareholders of Subchapter S corporations, |
18 | | and owners of limited liability companies, if the liability |
19 | | company is treated as a partnership for the purposes of |
20 | | federal and State income taxation, there shall be allowed a |
21 | | credit under this Section to be determined in accordance with |
22 | | the determination of income and distributive share of income |
23 | | under Sections 702 and 704 and Subchapter S of the Internal |
24 | | Revenue Code. |
25 | | The total aggregate amount of credits awarded under the |
26 | | Blue Collar Jobs Act (Article 20 of Public Act 101-9 this |
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1 | | amendatory Act of the 101st General Assembly ) shall not exceed |
2 | | $20,000,000 in any State fiscal year . |
3 | | This subsection (h-5) is exempt from the provisions of |
4 | | Section 250. |
5 | | (i) Credit for Personal Property Tax Replacement Income |
6 | | Tax.
For tax years ending prior to December 31, 2003, a credit |
7 | | shall be allowed
against the tax imposed by
subsections (a) |
8 | | and (b) of this Section for the tax imposed by subsections (c)
|
9 | | and (d) of this Section. This credit shall be computed by |
10 | | multiplying the tax
imposed by subsections (c) and (d) of this |
11 | | Section by a fraction, the numerator
of which is base income |
12 | | allocable to Illinois and the denominator of which is
Illinois |
13 | | base income, and further multiplying the product by the tax |
14 | | rate
imposed by subsections (a) and (b) of this Section. |
15 | | Any credit earned on or after December 31, 1986 under
this |
16 | | subsection which is unused in the year
the credit is computed |
17 | | because it exceeds the tax liability imposed by
subsections |
18 | | (a) and (b) for that year (whether it exceeds the original
|
19 | | liability or the liability as later amended) may be carried |
20 | | forward and
applied to the tax liability imposed by |
21 | | subsections (a) and (b) of the 5
taxable years following the |
22 | | excess credit year, provided that no credit may
be carried |
23 | | forward to any year ending on or
after December 31, 2003. This |
24 | | credit shall be
applied first to the earliest year for which |
25 | | there is a liability. If
there is a credit under this |
26 | | subsection from more than one tax year that is
available to |
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1 | | offset a liability the earliest credit arising under this
|
2 | | subsection shall be applied first. |
3 | | If, during any taxable year ending on or after December |
4 | | 31, 1986, the
tax imposed by subsections (c) and (d) of this |
5 | | Section for which a taxpayer
has claimed a credit under this |
6 | | subsection (i) is reduced, the amount of
credit for such tax |
7 | | shall also be reduced. Such reduction shall be
determined by |
8 | | recomputing the credit to take into account the reduced tax
|
9 | | imposed by subsections (c) and (d). If any portion of the
|
10 | | reduced amount of credit has been carried to a different |
11 | | taxable year, an
amended return shall be filed for such |
12 | | taxable year to reduce the amount of
credit claimed. |
13 | | (j) Training expense credit. Beginning with tax years |
14 | | ending on or
after December 31, 1986 and prior to December 31, |
15 | | 2003, a taxpayer shall be
allowed a credit against the
tax |
16 | | imposed by subsections (a) and (b) under this Section
for all |
17 | | amounts paid or accrued, on behalf of all persons
employed by |
18 | | the taxpayer in Illinois or Illinois residents employed
|
19 | | outside of Illinois by a taxpayer, for educational or |
20 | | vocational training in
semi-technical or technical fields or |
21 | | semi-skilled or skilled fields, which
were deducted from gross |
22 | | income in the computation of taxable income. The
credit |
23 | | against the tax imposed by subsections (a) and (b) shall be |
24 | | 1.6% of
such training expenses. For partners, shareholders of |
25 | | subchapter S
corporations, and owners of limited liability |
26 | | companies, if the liability
company is treated as a |
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1 | | partnership for purposes of federal and State income
taxation, |
2 | | there shall be allowed a credit under this subsection (j) to be
|
3 | | determined in accordance with the determination of income and |
4 | | distributive
share of income under Sections 702 and 704 and |
5 | | subchapter S of the Internal
Revenue Code. |
6 | | Any credit allowed under this subsection which is unused |
7 | | in the year
the credit is earned may be carried forward to each |
8 | | of the 5 taxable
years following the year for which the credit |
9 | | is first computed until it is
used. This credit shall be |
10 | | applied first to the earliest year for which
there is a |
11 | | liability. If there is a credit under this subsection from |
12 | | more
than one tax year that is available to offset a liability , |
13 | | the earliest
credit arising under this subsection shall be |
14 | | applied first. No carryforward
credit may be claimed in any |
15 | | tax year ending on or after
December 31, 2003. |
16 | | (k) Research and development credit. For tax years ending |
17 | | after July 1, 1990 and prior to
December 31, 2003, and |
18 | | beginning again for tax years ending on or after December 31, |
19 | | 2004, and ending prior to January 1, 2027, a taxpayer shall be
|
20 | | allowed a credit against the tax imposed by subsections (a) |
21 | | and (b) of this
Section for increasing research activities in |
22 | | this State. The credit
allowed against the tax imposed by |
23 | | subsections (a) and (b) shall be equal
to 6 1/2% of the |
24 | | qualifying expenditures for increasing research activities
in |
25 | | this State. For partners, shareholders of subchapter S |
26 | | corporations, and
owners of limited liability companies, if |
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1 | | the liability company is treated as a
partnership for purposes |
2 | | of federal and State income taxation, there shall be
allowed a |
3 | | credit under this subsection to be determined in accordance |
4 | | with the
determination of income and distributive share of |
5 | | income under Sections 702 and
704 and subchapter S of the |
6 | | Internal Revenue Code. |
7 | | For purposes of this subsection, "qualifying expenditures" |
8 | | means the
qualifying expenditures as defined for the federal |
9 | | credit for increasing
research activities which would be |
10 | | allowable under Section 41 of the
Internal Revenue Code and |
11 | | which are conducted in this State, "qualifying
expenditures |
12 | | for increasing research activities in this State" means the
|
13 | | excess of qualifying expenditures for the taxable year in |
14 | | which incurred
over qualifying expenditures for the base |
15 | | period, "qualifying expenditures
for the base period" means |
16 | | the average of the qualifying expenditures for
each year in |
17 | | the base period, and "base period" means the 3 taxable years
|
18 | | immediately preceding the taxable year for which the |
19 | | determination is
being made. |
20 | | Any credit in excess of the tax liability for the taxable |
21 | | year
may be carried forward. A taxpayer may elect to have the
|
22 | | unused credit shown on its final completed return carried over |
23 | | as a credit
against the tax liability for the following 5 |
24 | | taxable years or until it has
been fully used, whichever |
25 | | occurs first; provided that no credit earned in a tax year |
26 | | ending prior to December 31, 2003 may be carried forward to any |
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1 | | year ending on or after December 31, 2003. |
2 | | If an unused credit is carried forward to a given year from |
3 | | 2 or more
earlier years, that credit arising in the earliest |
4 | | year will be applied
first against the tax liability for the |
5 | | given year. If a tax liability for
the given year still |
6 | | remains, the credit from the next earliest year will
then be |
7 | | applied, and so on, until all credits have been used or no tax
|
8 | | liability for the given year remains. Any remaining unused |
9 | | credit or
credits then will be carried forward to the next |
10 | | following year in which a
tax liability is incurred, except |
11 | | that no credit can be carried forward to
a year which is more |
12 | | than 5 years after the year in which the expense for
which the |
13 | | credit is given was incurred. |
14 | | No inference shall be drawn from Public Act 91-644 this |
15 | | amendatory Act of the 91st General
Assembly in construing this |
16 | | Section for taxable years beginning before January
1, 1999. |
17 | | It is the intent of the General Assembly that the research |
18 | | and development credit under this subsection (k) shall apply |
19 | | continuously for all tax years ending on or after December 31, |
20 | | 2004 and ending prior to January 1, 2027, including, but not |
21 | | limited to, the period beginning on January 1, 2016 and ending |
22 | | on July 6, 2017 ( the effective date of Public Act 100-22) this |
23 | | amendatory Act of the 100th General Assembly . All actions |
24 | | taken in reliance on the continuation of the credit under this |
25 | | subsection (k) by any taxpayer are hereby validated. |
26 | | (l) Environmental Remediation Tax Credit. |
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1 | | (i) For tax years ending after December 31, 1997 and |
2 | | on or before
December 31, 2001, a taxpayer shall be |
3 | | allowed a credit against the tax
imposed by subsections |
4 | | (a) and (b) of this Section for certain amounts paid
for |
5 | | unreimbursed eligible remediation costs, as specified in |
6 | | this subsection.
For purposes of this Section, |
7 | | "unreimbursed eligible remediation costs" means
costs |
8 | | approved by the Illinois Environmental Protection Agency |
9 | | ("Agency") under
Section 58.14 of the Environmental |
10 | | Protection Act that were paid in performing
environmental |
11 | | remediation at a site for which a No Further Remediation |
12 | | Letter
was issued by the Agency and recorded under Section |
13 | | 58.10 of the Environmental
Protection Act. The credit must |
14 | | be claimed for the taxable year in which
Agency approval |
15 | | of the eligible remediation costs is granted. The credit |
16 | | is
not available to any taxpayer if the taxpayer or any |
17 | | related party caused or
contributed to, in any material |
18 | | respect, a release of regulated substances on,
in, or |
19 | | under the site that was identified and addressed by the |
20 | | remedial
action pursuant to the Site Remediation Program |
21 | | of the Environmental Protection
Act. After the Pollution |
22 | | Control Board rules are adopted pursuant to the
Illinois |
23 | | Administrative Procedure Act for the administration and |
24 | | enforcement of
Section 58.9 of the Environmental |
25 | | Protection Act, determinations as to credit
availability |
26 | | for purposes of this Section shall be made consistent with |
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1 | | those
rules. For purposes of this Section, "taxpayer" |
2 | | includes a person whose tax
attributes the taxpayer has |
3 | | succeeded to under Section 381 of the Internal
Revenue |
4 | | Code and "related party" includes the persons disallowed a |
5 | | deduction
for losses by paragraphs (b), (c), and (f)(1) of |
6 | | Section 267 of the Internal
Revenue Code by virtue of |
7 | | being a related taxpayer, as well as any of its
partners. |
8 | | The credit allowed against the tax imposed by subsections |
9 | | (a) and
(b) shall be equal to 25% of the unreimbursed |
10 | | eligible remediation costs in
excess of $100,000 per site, |
11 | | except that the $100,000 threshold shall not apply
to any |
12 | | site contained in an enterprise zone as determined by the |
13 | | Department of
Commerce and Community Affairs (now |
14 | | Department of Commerce and Economic Opportunity). The |
15 | | total credit allowed shall not exceed
$40,000 per year |
16 | | with a maximum total of $150,000 per site. For partners |
17 | | and
shareholders of subchapter S corporations, there shall |
18 | | be allowed a credit
under this subsection to be determined |
19 | | in accordance with the determination of
income and |
20 | | distributive share of income under Sections 702 and 704 |
21 | | and
subchapter S of the Internal Revenue Code. |
22 | | (ii) A credit allowed under this subsection that is |
23 | | unused in the year
the credit is earned may be carried |
24 | | forward to each of the 5 taxable years
following the year |
25 | | for which the credit is first earned until it is used.
The |
26 | | term "unused credit" does not include any amounts of |
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1 | | unreimbursed eligible
remediation costs in excess of the |
2 | | maximum credit per site authorized under
paragraph (i). |
3 | | This credit shall be applied first to the earliest year
|
4 | | for which there is a liability. If there is a credit under |
5 | | this subsection
from more than one tax year that is |
6 | | available to offset a liability, the
earliest credit |
7 | | arising under this subsection shall be applied first. A
|
8 | | credit allowed under this subsection may be sold to a |
9 | | buyer as part of a sale
of all or part of the remediation |
10 | | site for which the credit was granted. The
purchaser of a |
11 | | remediation site and the tax credit shall succeed to the |
12 | | unused
credit and remaining carry-forward period of the |
13 | | seller. To perfect the
transfer, the assignor shall record |
14 | | the transfer in the chain of title for the
site and provide |
15 | | written notice to the Director of the Illinois Department |
16 | | of
Revenue of the assignor's intent to sell the |
17 | | remediation site and the amount of
the tax credit to be |
18 | | transferred as a portion of the sale. In no event may a
|
19 | | credit be transferred to any taxpayer if the taxpayer or a |
20 | | related party would
not be eligible under the provisions |
21 | | of subsection (i). |
22 | | (iii) For purposes of this Section, the term "site" |
23 | | shall have the same
meaning as under Section 58.2 of the |
24 | | Environmental Protection Act. |
25 | | (m) Education expense credit. Beginning with tax years |
26 | | ending after
December 31, 1999, a taxpayer who
is the |
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1 | | custodian of one or more qualifying pupils shall be allowed a |
2 | | credit
against the tax imposed by subsections (a) and (b) of |
3 | | this Section for
qualified education expenses incurred on |
4 | | behalf of the qualifying pupils.
The credit shall be equal to |
5 | | 25% of qualified education expenses, but in no
event may the |
6 | | total credit under this subsection claimed by a
family that is |
7 | | the
custodian of qualifying pupils exceed (i) $500 for tax |
8 | | years ending prior to December 31, 2017, and (ii) $750 for tax |
9 | | years ending on or after December 31, 2017. In no event shall a |
10 | | credit under
this subsection reduce the taxpayer's liability |
11 | | under this Act to less than
zero. Notwithstanding any other |
12 | | provision of law, for taxable years beginning on or after |
13 | | January 1, 2017, no taxpayer may claim a credit under this |
14 | | subsection (m) if the taxpayer's adjusted gross income for the |
15 | | taxable year exceeds (i) $500,000, in the case of spouses |
16 | | filing a joint federal tax return or (ii) $250,000, in the case |
17 | | of all other taxpayers. This subsection is exempt from the |
18 | | provisions of Section 250 of this
Act. |
19 | | For purposes of this subsection: |
20 | | "Qualifying pupils" means individuals who (i) are |
21 | | residents of the State of
Illinois, (ii) are under the age of |
22 | | 21 at the close of the school year for
which a credit is |
23 | | sought, and (iii) during the school year for which a credit
is |
24 | | sought were full-time pupils enrolled in a kindergarten |
25 | | through twelfth
grade education program at any school, as |
26 | | defined in this subsection. |
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1 | | "Qualified education expense" means the amount incurred
on |
2 | | behalf of a qualifying pupil in excess of $250 for tuition, |
3 | | book fees, and
lab fees at the school in which the pupil is |
4 | | enrolled during the regular school
year. |
5 | | "School" means any public or nonpublic elementary or |
6 | | secondary school in
Illinois that is in compliance with Title |
7 | | VI of the Civil Rights Act of 1964
and attendance at which |
8 | | satisfies the requirements of Section 26-1 of the
School Code, |
9 | | except that nothing shall be construed to require a child to
|
10 | | attend any particular public or nonpublic school to qualify |
11 | | for the credit
under this Section. |
12 | | "Custodian" means, with respect to qualifying pupils, an |
13 | | Illinois resident
who is a parent, the parents, a legal |
14 | | guardian, or the legal guardians of the
qualifying pupils. |
15 | | (n) River Edge Redevelopment Zone site remediation tax |
16 | | credit.
|
17 | | (i) For tax years ending on or after December 31, |
18 | | 2006, a taxpayer shall be allowed a credit against the tax |
19 | | imposed by subsections (a) and (b) of this Section for |
20 | | certain amounts paid for unreimbursed eligible remediation |
21 | | costs, as specified in this subsection. For purposes of |
22 | | this Section, "unreimbursed eligible remediation costs" |
23 | | means costs approved by the Illinois Environmental |
24 | | Protection Agency ("Agency") under Section 58.14a of the |
25 | | Environmental Protection Act that were paid in performing |
26 | | environmental remediation at a site within a River Edge |
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1 | | Redevelopment Zone for which a No Further Remediation |
2 | | Letter was issued by the Agency and recorded under Section |
3 | | 58.10 of the Environmental Protection Act. The credit must |
4 | | be claimed for the taxable year in which Agency approval |
5 | | of the eligible remediation costs is granted. The credit |
6 | | is not available to any taxpayer if the taxpayer or any |
7 | | related party caused or contributed to, in any material |
8 | | respect, a release of regulated substances on, in, or |
9 | | under the site that was identified and addressed by the |
10 | | remedial action pursuant to the Site Remediation Program |
11 | | of the Environmental Protection Act. Determinations as to |
12 | | credit availability for purposes of this Section shall be |
13 | | made consistent with rules adopted by the Pollution |
14 | | Control Board pursuant to the Illinois Administrative |
15 | | Procedure Act for the administration and enforcement of |
16 | | Section 58.9 of the Environmental Protection Act. For |
17 | | purposes of this Section, "taxpayer" includes a person |
18 | | whose tax attributes the taxpayer has succeeded to under |
19 | | Section 381 of the Internal Revenue Code and "related |
20 | | party" includes the persons disallowed a deduction for |
21 | | losses by paragraphs (b), (c), and (f)(1) of Section 267 |
22 | | of the Internal Revenue Code by virtue of being a related |
23 | | taxpayer, as well as any of its partners. The credit |
24 | | allowed against the tax imposed by subsections (a) and (b) |
25 | | shall be equal to 25% of the unreimbursed eligible |
26 | | remediation costs in excess of $100,000 per site. |
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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. This |
5 | | credit shall be applied first to the earliest year for |
6 | | which there is a liability. If there is a credit under this |
7 | | subsection from more than one tax year that is available |
8 | | to offset a liability, the earliest credit arising under |
9 | | this subsection shall be applied first. A credit allowed |
10 | | under this subsection may be sold to a buyer as part of a |
11 | | sale of all or part of the remediation site for which the |
12 | | credit was granted. The purchaser of a remediation site |
13 | | and the tax credit shall succeed to the unused credit and |
14 | | remaining carry-forward period of the seller. To perfect |
15 | | the transfer, the assignor shall record the transfer in |
16 | | the chain of title for the site and provide written notice |
17 | | to the Director of the Illinois Department of Revenue of |
18 | | the assignor's intent to sell the remediation site and the |
19 | | amount of the tax credit to be transferred as a portion of |
20 | | the sale. In no event may a credit be transferred to any |
21 | | taxpayer if the taxpayer or a related party would not be |
22 | | eligible under the provisions of subsection (i). |
23 | | (iii) For purposes of this Section, the term "site" |
24 | | shall have the same meaning as under Section 58.2 of the |
25 | | Environmental Protection Act. |
26 | | (o) For each of taxable years during the Compassionate Use |
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1 | | of Medical Cannabis Program, a surcharge is imposed on all |
2 | | taxpayers on income arising from the sale or exchange of |
3 | | capital assets, depreciable business property, real property |
4 | | used in the trade or business, and Section 197 intangibles of |
5 | | an organization registrant under the Compassionate Use of |
6 | | Medical Cannabis Program Act. The amount of the surcharge is |
7 | | equal to the amount of federal income tax liability for the |
8 | | taxable year attributable to those sales and exchanges. The |
9 | | surcharge imposed does not apply if: |
10 | | (1) the medical cannabis cultivation center |
11 | | registration, medical cannabis dispensary registration, or |
12 | | the property of a registration is transferred as a result |
13 | | of any of the following: |
14 | | (A) bankruptcy, a receivership, or a debt |
15 | | adjustment initiated by or against the initial |
16 | | registration or the substantial owners of the initial |
17 | | registration; |
18 | | (B) cancellation, revocation, or termination of |
19 | | any registration by the Illinois Department of Public |
20 | | Health; |
21 | | (C) a determination by the Illinois Department of |
22 | | Public Health that transfer of the registration is in |
23 | | the best interests of Illinois qualifying patients as |
24 | | defined by the Compassionate Use of Medical Cannabis |
25 | | Program Act; |
26 | | (D) the death of an owner of the equity interest in |
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1 | | a registrant; |
2 | | (E) the acquisition of a controlling interest in |
3 | | the stock or substantially all of the assets of a |
4 | | publicly traded company; |
5 | | (F) a transfer by a parent company to a wholly |
6 | | owned subsidiary; or |
7 | | (G) the transfer or sale to or by one person to |
8 | | another person where both persons were initial owners |
9 | | of the registration when the registration was issued; |
10 | | or |
11 | | (2) the cannabis cultivation center registration, |
12 | | medical cannabis dispensary registration, or the |
13 | | controlling interest in a registrant's property is |
14 | | transferred in a transaction to lineal descendants in |
15 | | which no gain or loss is recognized or as a result of a |
16 | | transaction in accordance with Section 351 of the Internal |
17 | | Revenue Code in which no gain or loss is recognized. |
18 | | (p) Pass-through entity tax. |
19 | | (1) For taxable years ending on or after December 31, |
20 | | 2021 and beginning prior to January 1, 2026, a partnership |
21 | | (other than a publicly traded partnership under Section |
22 | | 7704 of the Internal Revenue Code) or Subchapter S |
23 | | corporation may elect to apply the provisions of this |
24 | | subsection. A separate election shall be made for each |
25 | | taxable year. Such election shall be made at such time, |
26 | | and in such form and manner as prescribed by the |
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1 | | Department, and, once made, is irrevocable. |
2 | | (2) Entity-level tax. A partnership or Subchapter S |
3 | | corporation electing to apply the provisions of this |
4 | | subsection shall be subject to a tax for the privilege of |
5 | | earning or receiving income in this State in an amount |
6 | | equal to 4.95% of the taxpayer's net income for the |
7 | | taxable year. |
8 | | (3) Net income defined. |
9 | | (A) In general. For purposes of paragraph (2), the |
10 | | term net income has the same meaning as defined in |
11 | | Section 202 of this Act, except that the following |
12 | | provisions shall not apply: |
13 | | (i) the standard exemption allowed under |
14 | | Section 204; |
15 | | (ii) the deduction for net losses allowed |
16 | | under Section 207; |
17 | | (iii) in the case of an S corporation, the |
18 | | modification under Section 203(b)(2)(S); and |
19 | | (iv) in the case of a partnership, the |
20 | | modifications under Section 203(d)(2)(H) and |
21 | | Section 203(d)(2)(I). |
22 | | (B) Special rule for tiered partnerships. If a |
23 | | taxpayer making the election under paragraph (1) is a |
24 | | partner of another taxpayer making the election under |
25 | | paragraph (1), net income shall be computed as |
26 | | provided in subparagraph (A), except that the taxpayer |
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1 | | shall subtract its distributive share of the net |
2 | | income of the electing partnership (including its |
3 | | distributive share of the net income of the electing |
4 | | partnership derived as a distributive share from |
5 | | electing partnerships in which it is a partner). |
6 | | (4) Credit for entity level tax. Each partner or |
7 | | shareholder of a taxpayer making the election under this |
8 | | Section shall be allowed a credit against the tax imposed |
9 | | under subsections (a) and (b) of Section 201 of this Act |
10 | | for the taxable year of the partnership or Subchapter S |
11 | | corporation for which an election is in effect ending |
12 | | within or with the taxable year of the partner or |
13 | | shareholder in an amount equal to 4.95% times the partner |
14 | | or shareholder's distributive share of the net income of |
15 | | the electing partnership or Subchapter S corporation, but |
16 | | not to exceed the partner's or shareholder's share of the |
17 | | tax imposed under paragraph (1) which is actually paid by |
18 | | the partnership or Subchapter S corporation. If the |
19 | | taxpayer is a partnership or Subchapter S corporation that |
20 | | is itself a partner of a partnership making the election |
21 | | under paragraph (1), the credit under this paragraph shall |
22 | | be allowed to the taxpayer's partners or shareholders (or |
23 | | if the partner is a partnership or Subchapter S |
24 | | corporation then its partners or shareholders) in |
25 | | accordance with the determination of income and |
26 | | distributive share of income under Sections 702 and 704 |
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1 | | and Subchapter S of the Internal Revenue Code. If the |
2 | | amount of the credit allowed under this paragraph exceeds |
3 | | the partner's or shareholder's liability for tax imposed |
4 | | under subsections (a) and (b) of Section 201 of this Act |
5 | | for the taxable year, such excess shall be treated as an |
6 | | overpayment for purposes of Section 909 of this Act. |
7 | | (5) Nonresidents. A nonresident individual who is a |
8 | | partner or shareholder of a partnership or Subchapter S |
9 | | corporation for a taxable year for which an election is in |
10 | | effect under paragraph (1) shall not be required to file |
11 | | an income tax return under this Act for such taxable year |
12 | | if the only source of net income of the individual (or the |
13 | | individual and the individual's spouse in the case of a |
14 | | joint return) is from an entity making the election under |
15 | | paragraph (1) and the credit allowed to the partner or |
16 | | shareholder under paragraph (4) equals or exceeds the |
17 | | individual's liability for the tax imposed under |
18 | | subsections (a) and (b) of Section 201 of this Act for the |
19 | | taxable year. |
20 | | (6) Liability for tax. Except as provided in this |
21 | | paragraph, a partnership or Subchapter S making the |
22 | | election under paragraph (1) is liable for the |
23 | | entity-level tax imposed under paragraph (2). If the |
24 | | electing partnership or corporation fails to pay the full |
25 | | amount of tax deemed assessed under paragraph (2), the |
26 | | partners or shareholders shall be liable to pay the tax |
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1 | | assessed (including penalties and interest). Each partner |
2 | | or shareholder shall be liable for the unpaid assessment |
3 | | based on the ratio of the partner's or shareholder's share |
4 | | of the net income of the partnership over the total net |
5 | | income of the partnership. If the partnership or |
6 | | Subchapter S corporation fails to pay the tax assessed |
7 | | (including penalties and interest) and thereafter an |
8 | | amount of such tax is paid by the partners or |
9 | | shareholders, such amount shall not be collected from the |
10 | | partnership or corporation. |
11 | | (7) Foreign tax. For purposes of the credit allowed |
12 | | under Section 601(b)(3) of this Act, tax paid by a |
13 | | partnership or Subchapter S corporation to another state |
14 | | which, as determined by the Department, is substantially |
15 | | similar to the tax imposed under this subsection, shall be |
16 | | considered tax paid by the partner or shareholder to the |
17 | | extent that the partner's or shareholder's share of the |
18 | | income of the partnership or Subchapter S corporation |
19 | | allocated and apportioned to such other state bears to the |
20 | | total income of the partnership or Subchapter S |
21 | | corporation allocated or apportioned to such other state. |
22 | | (8) Suspension of withholding. The provisions of |
23 | | Section 709.5 of this Act shall not apply to a partnership |
24 | | or Subchapter S corporation for the taxable year for which |
25 | | an election under paragraph (1) is in effect. |
26 | | (9) Requirement to pay estimated tax. For each taxable |
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1 | | year for which an election under paragraph (1) is in |
2 | | effect, a partnership or Subchapter S corporation is |
3 | | required to pay estimated tax for such taxable year under |
4 | | Sections 803 and 804 of this Act if the amount payable as |
5 | | estimated tax can reasonably be expected to exceed $500. |
6 | | (10) The provisions of this subsection shall apply |
7 | | only with respect to taxable years for which the |
8 | | limitation on individual deductions applies under Section |
9 | | 164(b)(6) of the Internal Revenue Code. |
10 | | (Source: P.A. 100-22, eff. 7-6-17; 101-9, eff. 6-5-19; 101-31, |
11 | | eff. 6-28-19; 101-207, eff. 8-2-19; 101-363, eff. 8-9-19; |
12 | | revised 11-18-20.) |
13 | | (Text of Section with the changes made by P.A. 101-8, |
14 | | which did not take effect (see Section 99 of P.A. 101-8))
|
15 | | Sec. 201. Tax imposed. |
16 | | (a) In general. A tax measured by net income is hereby |
17 | | imposed on every
individual, corporation, trust and estate for |
18 | | each taxable year ending
after July 31, 1969 on the privilege |
19 | | of earning or receiving income in or
as a resident of this |
20 | | State. Such tax shall be in addition to all other
occupation or |
21 | | privilege taxes imposed by this State or by any municipal
|
22 | | corporation or political subdivision thereof. |
23 | | (b) Rates. The tax imposed by subsection (a) of this |
24 | | Section shall be
determined as follows, except as adjusted by |
25 | | subsection (d-1): |
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1 | | (1) In the case of an individual, trust or estate, for |
2 | | taxable years
ending prior to July 1, 1989, an amount |
3 | | equal to 2 1/2% of the taxpayer's
net income for the |
4 | | taxable year. |
5 | | (2) In the case of an individual, trust or estate, for |
6 | | taxable years
beginning prior to July 1, 1989 and ending |
7 | | after June 30, 1989, an amount
equal to the sum of (i) 2 |
8 | | 1/2% of the taxpayer's net income for the period
prior to |
9 | | July 1, 1989, as calculated under Section 202.3, and (ii) |
10 | | 3% of the
taxpayer's net income for the period after June |
11 | | 30, 1989, as calculated
under Section 202.3. |
12 | | (3) In the case of an individual, trust or estate, for |
13 | | taxable years
beginning after June 30, 1989, and ending |
14 | | prior to January 1, 2011, an amount equal to 3% of the |
15 | | taxpayer's net
income for the taxable year. |
16 | | (4) In the case of an individual, trust, or estate, |
17 | | for taxable years beginning prior to January 1, 2011, and |
18 | | ending after December 31, 2010, an amount equal to the sum |
19 | | of (i) 3% of the taxpayer's net income for the period prior |
20 | | to January 1, 2011, as calculated under Section 202.5, and |
21 | | (ii) 5% of the taxpayer's net income for the period after |
22 | | December 31, 2010, as calculated under Section 202.5. |
23 | | (5) In the case of an individual, trust, or estate, |
24 | | for taxable years beginning on or after January 1, 2011, |
25 | | and ending prior to January 1, 2015, an amount equal to 5% |
26 | | of the taxpayer's net income for the taxable year. |
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1 | | (5.1) In the case of an individual, trust, or estate, |
2 | | for taxable years beginning prior to January 1, 2015, and |
3 | | ending after December 31, 2014, an amount equal to the sum |
4 | | of (i) 5% of the taxpayer's net income for the period prior |
5 | | to January 1, 2015, as calculated under Section 202.5, and |
6 | | (ii) 3.75% of the taxpayer's net income for the period |
7 | | after December 31, 2014, as calculated under Section |
8 | | 202.5. |
9 | | (5.2) In the case of an individual, trust, or estate, |
10 | | for taxable years beginning on or after January 1, 2015, |
11 | | and ending prior to July 1, 2017, an amount equal to 3.75% |
12 | | of the taxpayer's net income for the taxable year. |
13 | | (5.3) In the case of an individual, trust, or estate, |
14 | | for taxable years beginning prior to July 1, 2017, and |
15 | | ending after June 30, 2017, an amount equal to the sum of |
16 | | (i) 3.75% of the taxpayer's net income for the period |
17 | | prior to July 1, 2017, as calculated under Section 202.5, |
18 | | and (ii) 4.95% of the taxpayer's net income for the period |
19 | | after June 30, 2017, as calculated under Section 202.5. |
20 | | (5.4) In the case of an individual, trust, or estate, |
21 | | for taxable years beginning on or after July 1, 2017 and |
22 | | beginning prior to January 1, 2021 , an amount equal to |
23 | | 4.95% of the taxpayer's net income for the taxable year. |
24 | | (5.5) In the case of an individual, trust, or estate, |
25 | | for taxable years beginning on or after January 1, 2021, |
26 | | an amount calculated under the rate structure set forth in |
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1 | | Section 201.1. |
2 | | (6) In the case of a corporation, for taxable years
|
3 | | ending prior to July 1, 1989, an amount equal to 4% of the
|
4 | | taxpayer's net income for the taxable year. |
5 | | (7) In the case of a corporation, for taxable years |
6 | | beginning prior to
July 1, 1989 and ending after June 30, |
7 | | 1989, an amount equal to the sum of
(i) 4% of the |
8 | | taxpayer's net income for the period prior to July 1, |
9 | | 1989,
as calculated under Section 202.3, and (ii) 4.8% of |
10 | | the taxpayer's net
income for the period after June 30, |
11 | | 1989, as calculated under Section
202.3. |
12 | | (8) In the case of a corporation, for taxable years |
13 | | beginning after
June 30, 1989, and ending prior to January |
14 | | 1, 2011, an amount equal to 4.8% of the taxpayer's net |
15 | | income for the
taxable year. |
16 | | (9) In the case of a corporation, for taxable years |
17 | | beginning prior to January 1, 2011, and ending after |
18 | | December 31, 2010, an amount equal to the sum of (i) 4.8% |
19 | | of the taxpayer's net income for the period prior to |
20 | | January 1, 2011, as calculated under Section 202.5, and |
21 | | (ii) 7% of the taxpayer's net income for the period after |
22 | | December 31, 2010, as calculated under Section 202.5. |
23 | | (10) In the case of a corporation, for taxable years |
24 | | beginning on or after January 1, 2011, and ending prior to |
25 | | January 1, 2015, an amount equal to 7% of the taxpayer's |
26 | | net income for the taxable year. |
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1 | | (11) In the case of a corporation, for taxable years |
2 | | beginning prior to January 1, 2015, and ending after |
3 | | December 31, 2014, an amount equal to the sum of (i) 7% of |
4 | | the taxpayer's net income for the period prior to January |
5 | | 1, 2015, as calculated under Section 202.5, and (ii) 5.25% |
6 | | of the taxpayer's net income for the period after December |
7 | | 31, 2014, as calculated under Section 202.5. |
8 | | (12) In the case of a corporation, for taxable years |
9 | | beginning on or after January 1, 2015, and ending prior to |
10 | | July 1, 2017, an amount equal to 5.25% of the taxpayer's |
11 | | net income for the taxable year. |
12 | | (13) In the case of a corporation, for taxable years |
13 | | beginning prior to July 1, 2017, and ending after June 30, |
14 | | 2017, an amount equal to the sum of (i) 5.25% of the |
15 | | taxpayer's net income for the period prior to July 1, |
16 | | 2017, as calculated under Section 202.5, and (ii) 7% of |
17 | | the taxpayer's net income for the period after June 30, |
18 | | 2017, as calculated under Section 202.5. |
19 | | (14) In the case of a corporation, for taxable years |
20 | | beginning on or after July 1, 2017 and beginning prior to |
21 | | January 1, 2021 , an amount equal to 7% of the taxpayer's |
22 | | net income for the taxable year. |
23 | | (15) In the case of a corporation, for taxable years |
24 | | beginning on or after January 1, 2021, an amount equal to |
25 | | 7.99% of the taxpayer's net income for the taxable year. |
26 | | The rates under this subsection (b) are subject to the |
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1 | | provisions of Section 201.5. |
2 | | (b-5) Surcharge; sale or exchange of assets, properties, |
3 | | and intangibles of organization gaming licensees. For each of |
4 | | taxable years 2019 through 2027, a surcharge is imposed on all |
5 | | taxpayers on income arising from the sale or exchange of |
6 | | capital assets, depreciable business property, real property |
7 | | used in the trade or business, and Section 197 intangibles (i) |
8 | | of an organization licensee under the Illinois Horse Racing |
9 | | Act of 1975 and (ii) of an organization gaming licensee under |
10 | | the Illinois Gambling 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 shall not apply if: |
14 | | (1) the organization gaming license, organization |
15 | | license, or racetrack property is transferred as a result |
16 | | of any of the following: |
17 | | (A) bankruptcy, a receivership, or a debt |
18 | | adjustment initiated by or against the initial |
19 | | licensee or the substantial owners of the initial |
20 | | licensee; |
21 | | (B) cancellation, revocation, or termination of |
22 | | any such license by the Illinois Gaming Board or the |
23 | | Illinois Racing Board; |
24 | | (C) a determination by the Illinois Gaming Board |
25 | | that transfer of the license is in the best interests |
26 | | of Illinois gaming; |
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1 | | (D) the death of an owner of the equity interest in |
2 | | a licensee; |
3 | | (E) the acquisition of a controlling interest in |
4 | | the stock or substantially all of the assets of a |
5 | | publicly traded company; |
6 | | (F) a transfer by a parent company to a wholly |
7 | | owned subsidiary; or |
8 | | (G) the transfer or sale to or by one person to |
9 | | another person where both persons were initial owners |
10 | | of the license when the license was issued; or |
11 | | (2) the controlling interest in the organization |
12 | | gaming license, organization license, or racetrack |
13 | | property is transferred in a transaction to lineal |
14 | | descendants in which no gain or loss is recognized or as a |
15 | | result of a transaction in accordance with Section 351 of |
16 | | the Internal Revenue Code in which no gain or loss is |
17 | | recognized; or |
18 | | (3) live horse racing was not conducted in 2010 at a |
19 | | racetrack located within 3 miles of the Mississippi River |
20 | | under a license issued pursuant to the Illinois Horse |
21 | | Racing Act of 1975. |
22 | | The transfer of an organization gaming license, |
23 | | organization license, or racetrack property by a person other |
24 | | than the initial licensee to receive the organization gaming |
25 | | license is not subject to a surcharge. The Department shall |
26 | | adopt rules necessary to implement and administer this |
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1 | | subsection. |
2 | | (c) Personal Property Tax Replacement Income Tax.
|
3 | | Beginning on July 1, 1979 and thereafter, in addition to such |
4 | | income
tax, there is also hereby imposed the Personal Property |
5 | | Tax Replacement
Income Tax measured by net income on every |
6 | | corporation (including Subchapter
S corporations), partnership |
7 | | and trust, for each taxable year ending after
June 30, 1979. |
8 | | Such taxes are imposed on the privilege of earning or
|
9 | | receiving income in or as a resident of this State. The |
10 | | Personal Property
Tax Replacement Income Tax shall be in |
11 | | addition to the income tax imposed
by subsections (a) and (b) |
12 | | of this Section and in addition to all other
occupation or |
13 | | privilege taxes imposed by this State or by any municipal
|
14 | | corporation or political subdivision thereof. |
15 | | (d) Additional Personal Property Tax Replacement Income |
16 | | Tax Rates.
The personal property tax replacement income tax |
17 | | imposed by this subsection
and subsection (c) of this Section |
18 | | in the case of a corporation, other
than a Subchapter S |
19 | | corporation and except as adjusted by subsection (d-1),
shall |
20 | | be an additional amount equal to
2.85% of such taxpayer's net |
21 | | income for the taxable year, except that
beginning on January |
22 | | 1, 1981, and thereafter, the rate of 2.85% specified
in this |
23 | | subsection shall be reduced to 2.5%, and in the case of a
|
24 | | partnership, trust or a Subchapter S corporation shall be an |
25 | | additional
amount equal to 1.5% of such taxpayer's net income |
26 | | for the taxable year. |
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1 | | (d-1) Rate reduction for certain foreign insurers. In the |
2 | | case of a
foreign insurer, as defined by Section 35A-5 of the |
3 | | Illinois Insurance Code,
whose state or country of domicile |
4 | | imposes on insurers domiciled in Illinois
a retaliatory tax |
5 | | (excluding any insurer
whose premiums from reinsurance assumed |
6 | | are 50% or more of its total insurance
premiums as determined |
7 | | under paragraph (2) of subsection (b) of Section 304,
except |
8 | | that for purposes of this determination premiums from |
9 | | reinsurance do
not include premiums from inter-affiliate |
10 | | reinsurance arrangements),
beginning with taxable years ending |
11 | | on or after December 31, 1999,
the sum of
the rates of tax |
12 | | imposed by subsections (b) and (d) shall be reduced (but not
|
13 | | increased) to the rate at which the total amount of tax imposed |
14 | | under this Act,
net of all credits allowed under this Act, |
15 | | shall equal (i) the total amount of
tax that would be imposed |
16 | | on the foreign insurer's net income allocable to
Illinois for |
17 | | the taxable year by such foreign insurer's state or country of
|
18 | | domicile if that net income were subject to all income taxes |
19 | | and taxes
measured by net income imposed by such foreign |
20 | | insurer's state or country of
domicile, net of all credits |
21 | | allowed or (ii) a rate of zero if no such tax is
imposed on |
22 | | such income by the foreign insurer's state of domicile.
For |
23 | | the purposes of this subsection (d-1), an inter-affiliate |
24 | | includes a
mutual insurer under common management. |
25 | | (1) For the purposes of subsection (d-1), in no event |
26 | | shall the sum of the
rates of tax imposed by subsections |
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1 | | (b) and (d) be reduced below the rate at
which the sum of: |
2 | | (A) the total amount of tax imposed on such |
3 | | foreign insurer under
this Act for a taxable year, net |
4 | | of all credits allowed under this Act, plus |
5 | | (B) the privilege tax imposed by Section 409 of |
6 | | the Illinois Insurance
Code, the fire insurance |
7 | | company tax imposed by Section 12 of the Fire
|
8 | | Investigation Act, and the fire department taxes |
9 | | imposed under Section 11-10-1
of the Illinois |
10 | | Municipal Code, |
11 | | equals 1.25% for taxable years ending prior to December |
12 | | 31, 2003, or
1.75% for taxable years ending on or after |
13 | | December 31, 2003, of the net
taxable premiums written for |
14 | | the taxable year,
as described by subsection (1) of |
15 | | Section 409 of the Illinois Insurance Code.
This paragraph |
16 | | will in no event increase the rates imposed under |
17 | | subsections
(b) and (d). |
18 | | (2) Any reduction in the rates of tax imposed by this |
19 | | subsection shall be
applied first against the rates |
20 | | imposed by subsection (b) and only after the
tax imposed |
21 | | by subsection (a) net of all credits allowed under this |
22 | | Section
other than the credit allowed under subsection (i) |
23 | | has been reduced to zero,
against the rates imposed by |
24 | | subsection (d). |
25 | | This subsection (d-1) is exempt from the provisions of |
26 | | Section 250. |
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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 |
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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, |
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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 |
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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, |
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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
|
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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 |
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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 |
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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 |
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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 |
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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 |
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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 |
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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 |
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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 |
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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. |
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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 |
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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 |
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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 |
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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 |
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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 |
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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
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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 |
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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 |
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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. |
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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). |
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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 |
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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 |
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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 |
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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 |
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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 |
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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 | | (p) Pass-through entity tax. |
24 | | (1) For taxable years ending on or after December 31, |
25 | | 2021 and beginning prior to January 1, 2026, a partnership |
26 | | (other than a publicly traded partnership under Section |
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1 | | 7704 of the Internal Revenue Code) or Subchapter S |
2 | | corporation may elect to apply the provisions of this |
3 | | subsection. A separate election shall be made for each |
4 | | taxable year. Such election shall be made at such time, |
5 | | and in such form and manner as prescribed by the |
6 | | Department, and, once made, is irrevocable. |
7 | | (2) Entity-level tax. A partnership or Subchapter S |
8 | | corporation electing to apply the provisions of this |
9 | | subsection shall be subject to a tax for the privilege of |
10 | | earning or receiving income in this State in an amount |
11 | | equal to 4.95% of the taxpayer's net income for the |
12 | | taxable year. |
13 | | (3) Net income defined. |
14 | | (A) In general. For purposes of paragraph (2), the |
15 | | term net income has the same meaning as defined in |
16 | | Section 202 of this Act, except that the following |
17 | | provisions shall not apply: |
18 | | (i) the standard exemption allowed under |
19 | | Section 204; |
20 | | (ii) the deduction for net losses allowed |
21 | | under Section 207; |
22 | | (iii) in the case of an S corporation, the |
23 | | modification under Section 203(b)(2)(S); and |
24 | | (iv) in the case of a partnership, the |
25 | | modifications under Section 203(d)(2)(H) and |
26 | | Section 203(d)(2)(I). |
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1 | | (B) Special rule for tiered partnerships. If a |
2 | | taxpayer making the election under paragraph (1) is a |
3 | | partner of another taxpayer making the election under |
4 | | paragraph (1), net income shall be computed as |
5 | | provided in subparagraph (A), except that the taxpayer |
6 | | shall subtract its distributive share of the net |
7 | | income of the electing partnership (including its |
8 | | distributive share of the net income of the electing |
9 | | partnership derived as a distributive share from |
10 | | electing partnerships in which it is a partner). |
11 | | (4) Credit for entity level tax. Each partner or |
12 | | shareholder of a taxpayer making the election under this |
13 | | Section shall be allowed a credit against the tax imposed |
14 | | under subsections (a) and (b) of Section 201 of this Act |
15 | | for the taxable year of the partnership or Subchapter S |
16 | | corporation for which an election is in effect ending |
17 | | within or with the taxable year of the partner or |
18 | | shareholder in an amount equal to 4.95% times the partner |
19 | | or shareholder's distributive share of the net income of |
20 | | the electing partnership or Subchapter S corporation, but |
21 | | not to exceed the partner's or shareholder's share of the |
22 | | tax imposed under paragraph (1) which is actually paid by |
23 | | the partnership or Subchapter S corporation. If the |
24 | | taxpayer is a partnership or Subchapter S corporation that |
25 | | is itself a partner of a partnership making the election |
26 | | under paragraph (1), the credit under this paragraph shall |
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1 | | be allowed to the taxpayer's partners or shareholders (or |
2 | | if the partner is a partnership or Subchapter S |
3 | | corporation then its partners or shareholders) in |
4 | | accordance with the determination of income and |
5 | | distributive share of income under Sections 702 and 704 |
6 | | and Subchapter S of the Internal Revenue Code. If the |
7 | | amount of the credit allowed under this paragraph exceeds |
8 | | the partner's or shareholder's liability for tax imposed |
9 | | under subsections (a) and (b) of Section 201 of this Act |
10 | | for the taxable year, such excess shall be treated as an |
11 | | overpayment for purposes of Section 909 of this Act. |
12 | | (5) Nonresidents. A nonresident individual who is a |
13 | | partner or shareholder of a partnership or Subchapter S |
14 | | corporation for a taxable year for which an election is in |
15 | | effect under paragraph (1) shall not be required to file |
16 | | an income tax return under this Act for such taxable year |
17 | | if the only source of net income of the individual (or the |
18 | | individual and the individual's spouse in the case of a |
19 | | joint return) is from an entity making the election under |
20 | | paragraph (1) and the credit allowed to the partner or |
21 | | shareholder under paragraph (4) equals or exceeds the |
22 | | individual's liability for the tax imposed under |
23 | | subsections (a) and (b) of Section 201 of this Act for the |
24 | | taxable year. |
25 | | (6) Liability for tax. Except as provided in this |
26 | | paragraph, a partnership or Subchapter S making the |
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1 | | election under paragraph (1) is liable for the |
2 | | entity-level tax imposed under paragraph (2). If the |
3 | | electing partnership or corporation fails to pay the full |
4 | | amount of tax deemed assessed under paragraph (2), the |
5 | | partners or shareholders shall be liable to pay the tax |
6 | | assessed (including penalties and interest). Each partner |
7 | | or shareholder shall be liable for the unpaid assessment |
8 | | based on the ratio of the partner's or shareholder's share |
9 | | of the net income of the partnership over the total net |
10 | | income of the partnership. If the partnership or |
11 | | Subchapter S corporation fails to pay the tax assessed |
12 | | (including penalties and interest) and thereafter an |
13 | | amount of such tax is paid by the partners or |
14 | | shareholders, such amount shall not be collected from the |
15 | | partnership or corporation. |
16 | | (7) Foreign tax. For purposes of the credit allowed |
17 | | under Section 601(b)(3) of this Act, tax paid by a |
18 | | partnership or Subchapter S corporation to another state |
19 | | which, as determined by the Department, is substantially |
20 | | similar to the tax imposed under this subsection, shall be |
21 | | considered tax paid by the partner or shareholder to the |
22 | | extent that the partner's or shareholder's share of the |
23 | | income of the partnership or Subchapter S corporation |
24 | | allocated and apportioned to such other state bears to the |
25 | | total income of the partnership or Subchapter S |
26 | | corporation allocated or apportioned to such other state. |
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1 | | (8) Suspension of withholding. The provisions of |
2 | | Section 709.5 of this Act shall not apply to a partnership |
3 | | or Subchapter S corporation for the taxable year for which |
4 | | an election under paragraph (1) is in effect. |
5 | | (9) Requirement to pay estimated tax. For each taxable |
6 | | year for which an election under paragraph (1) is in |
7 | | effect, a partnership or Subchapter S corporation is |
8 | | required to pay estimated tax for such taxable year under |
9 | | Sections 803 and 804 of this Act if the amount payable as |
10 | | estimated tax can reasonably be expected to exceed $500. |
11 | | (10) The provisions of this subsection shall apply |
12 | | only with respect to taxable years for which the |
13 | | limitation on individual deductions applies under Section |
14 | | 164(b)(6) of the Internal Revenue Code. |
15 | | (Source: P.A. 100-22, eff. 7-6-17; 101-8, see Section 99 for |
16 | | effective date; 101-9, eff. 6-5-19; 101-31, eff. 6-28-19; |
17 | | 101-207, eff. 8-2-19; 101-363, eff. 8-9-19; revised 11-18-20.) |
18 | | (35 ILCS 5/203) (from Ch. 120, par. 2-203) |
19 | | Sec. 203. Base income defined. |
20 | | (a) Individuals. |
21 | | (1) In general. In the case of an individual, base |
22 | | income means an
amount equal to the taxpayer's adjusted |
23 | | gross income for the taxable
year as modified by paragraph |
24 | | (2). |
25 | | (2) Modifications. The adjusted gross income referred |
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1 | | to in
paragraph (1) shall be modified by adding thereto |
2 | | the sum of the
following amounts: |
3 | | (A) An amount equal to all amounts paid or accrued |
4 | | to the taxpayer
as interest or dividends during the |
5 | | taxable year to the extent excluded
from gross income |
6 | | in the computation of adjusted gross income, except |
7 | | stock
dividends of qualified public utilities |
8 | | described in Section 305(e) of the
Internal Revenue |
9 | | Code; |
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 adjusted gross
income for the |
13 | | taxable year; |
14 | | (C) An amount equal to the amount received during |
15 | | the taxable year
as a recovery or refund of real |
16 | | property taxes paid with respect to the
taxpayer's |
17 | | principal residence under the Revenue Act of
1939 and |
18 | | for which a deduction was previously taken under |
19 | | subparagraph (L) of
this paragraph (2) prior to July |
20 | | 1, 1991, the retrospective application date of
Article |
21 | | 4 of Public Act 87-17. In the case of multi-unit or |
22 | | multi-use
structures and farm dwellings, the taxes on |
23 | | the taxpayer's principal residence
shall be that |
24 | | portion of the total taxes for the entire property |
25 | | which is
attributable to such principal residence; |
26 | | (D) An amount equal to the amount of the capital |
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1 | | gain deduction
allowable under the Internal Revenue |
2 | | Code, to the extent deducted from gross
income in the |
3 | | computation of adjusted gross income; |
4 | | (D-5) An amount, to the extent not included in |
5 | | adjusted gross income,
equal to the amount of money |
6 | | withdrawn by the taxpayer in the taxable year from
a |
7 | | medical care savings account and the interest earned |
8 | | on the account in the
taxable year of a withdrawal |
9 | | pursuant to subsection (b) of Section 20 of the
|
10 | | Medical Care Savings Account Act or subsection (b) of |
11 | | Section 20 of the
Medical Care Savings Account Act of |
12 | | 2000; |
13 | | (D-10) For taxable years ending after December 31, |
14 | | 1997, an
amount equal to any eligible remediation |
15 | | costs that the individual
deducted in computing |
16 | | adjusted gross income and for which the
individual |
17 | | claims a credit under subsection (l) of Section 201; |
18 | | (D-15) For taxable years 2001 and thereafter, an |
19 | | amount equal to the
bonus depreciation deduction taken |
20 | | on the taxpayer's federal income tax return for the |
21 | | taxable
year under subsection (k) of Section 168 of |
22 | | the Internal Revenue Code; |
23 | | (D-16) If the taxpayer sells, transfers, abandons, |
24 | | or otherwise disposes of property for which the |
25 | | taxpayer was required in any taxable year to
make an |
26 | | addition modification under subparagraph (D-15), then |
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1 | | an amount equal
to the aggregate amount of the |
2 | | deductions taken in all taxable
years under |
3 | | subparagraph (Z) with respect to that property. |
4 | | If the taxpayer continues to own property through |
5 | | the last day of the last tax year for which the |
6 | | taxpayer may claim a depreciation deduction for |
7 | | federal income tax purposes and for which the taxpayer |
8 | | was allowed in any taxable year to make a subtraction |
9 | | modification under subparagraph (Z), then an amount |
10 | | equal to that subtraction modification.
|
11 | | The taxpayer is required to make the addition |
12 | | modification under this
subparagraph
only once with |
13 | | respect to any one piece of property; |
14 | | (D-17) An amount equal to the amount otherwise |
15 | | allowed as a deduction in computing base income for |
16 | | interest paid, accrued, or incurred, directly or |
17 | | indirectly, (i) for taxable years ending on or after |
18 | | December 31, 2004, to a foreign person who would be a |
19 | | member of the same unitary business group but for the |
20 | | fact that foreign person's business activity outside |
21 | | the United States is 80% or more of the foreign |
22 | | person's total business activity and (ii) for taxable |
23 | | years ending on or after December 31, 2008, to a person |
24 | | who would be a member of the same unitary business |
25 | | group but for the fact that the person is prohibited |
26 | | under Section 1501(a)(27) from being included in the |
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1 | | unitary business group because he or she is ordinarily |
2 | | required to apportion business income under different |
3 | | subsections of Section 304. The addition modification |
4 | | required by this subparagraph shall be reduced to the |
5 | | extent that dividends were included in base income of |
6 | | the unitary group for the same taxable year and |
7 | | received by the taxpayer or by a member of the |
8 | | taxpayer's unitary business group (including amounts |
9 | | included in gross income under Sections 951 through |
10 | | 964 of the Internal Revenue Code and amounts included |
11 | | in gross income under Section 78 of the Internal |
12 | | Revenue Code) with respect to the stock of the same |
13 | | person to whom the interest was paid, accrued, or |
14 | | incurred. |
15 | | This paragraph shall not apply to the following:
|
16 | | (i) an item of interest paid, accrued, or |
17 | | incurred, directly or indirectly, to a person who |
18 | | is subject in a foreign country or state, other |
19 | | than a state which requires mandatory unitary |
20 | | reporting, to a tax on or measured by net income |
21 | | with respect to such interest; or |
22 | | (ii) an item of interest paid, accrued, or |
23 | | incurred, directly or indirectly, to a person if |
24 | | the taxpayer can establish, based on a |
25 | | preponderance of the evidence, both of the |
26 | | following: |
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1 | | (a) the person, during the same taxable |
2 | | year, paid, accrued, or incurred, the interest |
3 | | to a person that is not a related member, and |
4 | | (b) the transaction giving rise to the |
5 | | interest expense between the taxpayer and the |
6 | | person did not have as a principal purpose the |
7 | | avoidance of Illinois income tax, and is paid |
8 | | pursuant to a contract or agreement that |
9 | | reflects an arm's-length interest rate and |
10 | | terms; or
|
11 | | (iii) the taxpayer can establish, based on |
12 | | clear and convincing evidence, that the interest |
13 | | paid, accrued, or incurred relates to a contract |
14 | | or agreement entered into at arm's-length rates |
15 | | and terms and the principal purpose for the |
16 | | payment is not federal or Illinois tax avoidance; |
17 | | or
|
18 | | (iv) an item of interest paid, accrued, or |
19 | | incurred, directly or indirectly, to a person if |
20 | | the taxpayer establishes by clear and convincing |
21 | | evidence that the adjustments are unreasonable; or |
22 | | if the taxpayer and the Director agree in writing |
23 | | to the application or use of an alternative method |
24 | | of apportionment under Section 304(f).
|
25 | | Nothing in this subsection shall preclude the |
26 | | Director from making any other adjustment |
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1 | | otherwise allowed under Section 404 of this Act |
2 | | for any tax year beginning after the effective |
3 | | date of this amendment provided such adjustment is |
4 | | made pursuant to regulation adopted by the |
5 | | Department and such regulations provide methods |
6 | | and standards by which the Department will utilize |
7 | | its authority under Section 404 of this Act;
|
8 | | (D-18) An amount equal to the amount of intangible |
9 | | expenses and costs otherwise allowed as a deduction in |
10 | | computing base income, and that were paid, accrued, or |
11 | | incurred, directly or indirectly, (i) for taxable |
12 | | years ending on or after December 31, 2004, to a |
13 | | foreign person who would be a member of the same |
14 | | unitary business group but for the fact that the |
15 | | foreign person's business activity outside the United |
16 | | States is 80% or more of that person's total business |
17 | | activity and (ii) for taxable years ending on or after |
18 | | December 31, 2008, to a person who would be a member of |
19 | | the same unitary business group but for the fact that |
20 | | the person is prohibited under Section 1501(a)(27) |
21 | | from being included in the unitary business group |
22 | | because he or she is ordinarily required to apportion |
23 | | business income under different subsections of Section |
24 | | 304. The addition modification required by this |
25 | | subparagraph shall be reduced to the extent that |
26 | | dividends were included in base income of the unitary |
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1 | | group for the same taxable year and received by the |
2 | | taxpayer or by a member of the taxpayer's unitary |
3 | | business group (including amounts included in gross |
4 | | income under Sections 951 through 964 of the Internal |
5 | | Revenue Code and amounts included in gross income |
6 | | under Section 78 of the Internal Revenue Code) with |
7 | | respect to the stock of the same person to whom the |
8 | | intangible expenses and costs were directly or |
9 | | indirectly paid, incurred, or accrued. The preceding |
10 | | sentence does not apply to the extent that the same |
11 | | dividends caused a reduction to the addition |
12 | | modification required under Section 203(a)(2)(D-17) of |
13 | | this Act. As used in this subparagraph, the term |
14 | | "intangible expenses and costs" includes (1) expenses, |
15 | | losses, and costs for, or related to, the direct or |
16 | | indirect acquisition, use, maintenance or management, |
17 | | ownership, sale, exchange, or any other disposition of |
18 | | intangible property; (2) losses incurred, directly or |
19 | | indirectly, from factoring transactions or discounting |
20 | | transactions; (3) royalty, patent, technical, and |
21 | | copyright fees; (4) licensing fees; and (5) other |
22 | | similar expenses and costs.
For purposes of this |
23 | | subparagraph, "intangible property" includes patents, |
24 | | patent applications, trade names, trademarks, service |
25 | | marks, copyrights, mask works, trade secrets, and |
26 | | similar types of intangible assets. |
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1 | | This paragraph shall not apply to the following: |
2 | | (i) any item of intangible expenses or costs |
3 | | paid, accrued, or incurred, directly or |
4 | | indirectly, from a transaction with a person who |
5 | | is subject in a foreign country or state, other |
6 | | than a state which requires mandatory unitary |
7 | | reporting, to a tax on or measured by net income |
8 | | with respect to such item; or |
9 | | (ii) any item of intangible expense or cost |
10 | | paid, accrued, or incurred, directly or |
11 | | indirectly, if the taxpayer can establish, based |
12 | | on a preponderance of the evidence, both of the |
13 | | following: |
14 | | (a) the person during the same taxable |
15 | | year paid, accrued, or incurred, the |
16 | | intangible expense or cost to a person that is |
17 | | not a related member, and |
18 | | (b) the transaction giving rise to the |
19 | | intangible expense or cost between the |
20 | | taxpayer and the person did not have as a |
21 | | principal purpose the avoidance of Illinois |
22 | | income tax, and is paid pursuant to a contract |
23 | | or agreement that reflects arm's-length terms; |
24 | | or |
25 | | (iii) any item of intangible expense or cost |
26 | | paid, accrued, or incurred, directly or |
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1 | | indirectly, from a transaction with a person if |
2 | | the taxpayer establishes by clear and convincing |
3 | | evidence, that the adjustments are unreasonable; |
4 | | or if the taxpayer and the Director agree in |
5 | | writing to the application or use of an |
6 | | alternative method of apportionment under Section |
7 | | 304(f);
|
8 | | Nothing in this subsection shall preclude the |
9 | | Director from making any other adjustment |
10 | | otherwise allowed under Section 404 of this Act |
11 | | for any tax year beginning after the effective |
12 | | date of this amendment provided such adjustment is |
13 | | made pursuant to regulation adopted by the |
14 | | Department and such regulations provide methods |
15 | | and standards by which the Department will utilize |
16 | | its authority under Section 404 of this Act;
|
17 | | (D-19) For taxable years ending on or after |
18 | | December 31, 2008, an amount equal to the amount of |
19 | | insurance premium expenses and costs otherwise allowed |
20 | | as a deduction in computing base income, and that were |
21 | | paid, accrued, or incurred, directly or indirectly, to |
22 | | a person who would be a member of the same unitary |
23 | | business group but for the fact that the person is |
24 | | prohibited under Section 1501(a)(27) from being |
25 | | included in the unitary business group because he or |
26 | | she is ordinarily required to apportion business |
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1 | | income under different subsections of Section 304. The |
2 | | addition modification required by this subparagraph |
3 | | shall be reduced to the extent that dividends were |
4 | | included in base income of the unitary group for the |
5 | | same taxable year and received by the taxpayer or by a |
6 | | member of the taxpayer's unitary business group |
7 | | (including amounts included in gross income under |
8 | | Sections 951 through 964 of the Internal Revenue Code |
9 | | and amounts included in gross income under Section 78 |
10 | | of the Internal Revenue Code) with respect to the |
11 | | stock of the same person to whom the premiums and costs |
12 | | were directly or indirectly paid, incurred, or |
13 | | accrued. The preceding sentence does not apply to the |
14 | | extent that the same dividends caused a reduction to |
15 | | the addition modification required under Section |
16 | | 203(a)(2)(D-17) or Section 203(a)(2)(D-18) of this |
17 | | Act ; .
|
18 | | (D-20) For taxable years beginning on or after |
19 | | January 1,
2002 and ending on or before December 31, |
20 | | 2006, in
the
case of a distribution from a qualified |
21 | | tuition program under Section 529 of
the Internal |
22 | | Revenue Code, other than (i) a distribution from a |
23 | | College Savings
Pool created under Section 16.5 of the |
24 | | State Treasurer Act or (ii) a
distribution from the |
25 | | Illinois Prepaid Tuition Trust Fund, an amount equal |
26 | | to
the amount excluded from gross income under Section |
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1 | | 529(c)(3)(B). For taxable years beginning on or after |
2 | | January 1, 2007, in the case of a distribution from a |
3 | | qualified tuition program under Section 529 of the |
4 | | Internal Revenue Code, other than (i) a distribution |
5 | | from a College Savings Pool created under Section 16.5 |
6 | | of the State Treasurer Act, (ii) a distribution from |
7 | | the Illinois Prepaid Tuition Trust Fund, or (iii) a |
8 | | distribution from a qualified tuition program under |
9 | | Section 529 of the Internal Revenue Code that (I) |
10 | | adopts and determines that its offering materials |
11 | | comply with the College Savings Plans Network's |
12 | | disclosure principles and (II) has made reasonable |
13 | | efforts to inform in-state residents of the existence |
14 | | of in-state qualified tuition programs by informing |
15 | | Illinois residents directly and, where applicable, to |
16 | | inform financial intermediaries distributing the |
17 | | program to inform in-state residents of the existence |
18 | | of in-state qualified tuition programs at least |
19 | | annually, an amount equal to the amount excluded from |
20 | | gross income under Section 529(c)(3)(B). |
21 | | For the purposes of this subparagraph (D-20), a |
22 | | qualified tuition program has made reasonable efforts |
23 | | if it makes disclosures (which may use the term |
24 | | "in-state program" or "in-state plan" and need not |
25 | | specifically refer to Illinois or its qualified |
26 | | programs by name) (i) directly to prospective |
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1 | | participants in its offering materials or makes a |
2 | | public disclosure, such as a website posting; and (ii) |
3 | | where applicable, to intermediaries selling the |
4 | | out-of-state program in the same manner that the |
5 | | out-of-state program distributes its offering |
6 | | materials; |
7 | | (D-20.5) For taxable years beginning on or after |
8 | | January 1, 2018, in the case of a distribution from a |
9 | | qualified ABLE program under Section 529A of the |
10 | | Internal Revenue Code, other than a distribution from |
11 | | a qualified ABLE program created under Section 16.6 of |
12 | | the State Treasurer Act, an amount equal to the amount |
13 | | excluded from gross income under Section 529A(c)(1)(B) |
14 | | of the Internal Revenue Code; |
15 | | (D-21) For taxable years beginning on or after |
16 | | January 1, 2007, in the case of transfer of moneys from |
17 | | a qualified tuition program under Section 529 of the |
18 | | Internal Revenue Code that is administered by the |
19 | | State to an out-of-state program, an amount equal to |
20 | | the amount of moneys previously deducted from base |
21 | | income under subsection (a)(2)(Y) of this Section; |
22 | | (D-21.5) For taxable years beginning on or after |
23 | | January 1, 2018, in the case of the transfer of moneys |
24 | | from a qualified tuition program under Section 529 or |
25 | | a qualified ABLE program under Section 529A of the |
26 | | Internal Revenue Code that is administered by this |
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1 | | State to an ABLE account established under an |
2 | | out-of-state ABLE account program, an amount equal to |
3 | | the contribution component of the transferred amount |
4 | | that was previously deducted from base income under |
5 | | subsection (a)(2)(Y) or subsection (a)(2)(HH) of this |
6 | | Section; |
7 | | (D-22) For taxable years beginning on or after |
8 | | January 1, 2009, and prior to January 1, 2018, in the |
9 | | case of a nonqualified withdrawal or refund of moneys |
10 | | from a qualified tuition program under Section 529 of |
11 | | the Internal Revenue Code administered by the State |
12 | | that is not used for qualified expenses at an eligible |
13 | | education institution, an amount equal to the |
14 | | contribution component of the nonqualified withdrawal |
15 | | or refund that was previously deducted from base |
16 | | income under subsection (a)(2)(y) of this Section, |
17 | | provided that the withdrawal or refund did not result |
18 | | from the beneficiary's death or disability. For |
19 | | taxable years beginning on or after January 1, 2018: |
20 | | (1) in the case of a nonqualified withdrawal or |
21 | | refund, as defined under Section
16.5 of the State |
22 | | Treasurer Act, of moneys from a qualified tuition |
23 | | program under Section 529 of the Internal Revenue Code |
24 | | administered by the State, an amount equal to the |
25 | | contribution component of the nonqualified withdrawal |
26 | | or refund that was previously deducted from base
|
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1 | | income under subsection (a)(2)(Y) of this Section, and |
2 | | (2) in the case of a nonqualified withdrawal or refund |
3 | | from a qualified ABLE program under Section 529A of |
4 | | the Internal Revenue Code administered by the State |
5 | | that is not used for qualified disability expenses, an |
6 | | amount equal to the contribution component of the |
7 | | nonqualified withdrawal or refund that was previously |
8 | | deducted from base income under subsection (a)(2)(HH) |
9 | | of this Section; |
10 | | (D-23) An amount equal to the credit allowable to |
11 | | the taxpayer under Section 218(a) of this Act, |
12 | | determined without regard to Section 218(c) of this |
13 | | Act; |
14 | | (D-24) For taxable years ending on or after |
15 | | December 31, 2017, an amount equal to the deduction |
16 | | allowed under Section 199 of the Internal Revenue Code |
17 | | for the taxable year; |
18 | | (D-25) In the case of a resident, an amount equal |
19 | | to the amount of tax for which a credit is allowed |
20 | | pursuant to Section 201(p)(7) of this Act; |
21 | | and by deducting from the total so obtained the
sum of the |
22 | | following amounts: |
23 | | (E) For taxable years ending before December 31, |
24 | | 2001,
any amount included in such total in respect of |
25 | | any compensation
(including but not limited to any |
26 | | compensation paid or accrued to a
serviceman while a |
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1 | | prisoner of war or missing in action) paid to a |
2 | | resident
by reason of being on active duty in the Armed |
3 | | Forces of the United States
and in respect of any |
4 | | compensation paid or accrued to a resident who as a
|
5 | | governmental employee was a prisoner of war or missing |
6 | | in action, and in
respect of any compensation paid to a |
7 | | resident in 1971 or thereafter for
annual training |
8 | | performed pursuant to Sections 502 and 503, Title 32,
|
9 | | United States Code as a member of the Illinois |
10 | | National Guard or, beginning with taxable years ending |
11 | | on or after December 31, 2007, the National Guard of |
12 | | any other state.
For taxable years ending on or after |
13 | | December 31, 2001, any amount included in
such total |
14 | | in respect of any compensation (including but not |
15 | | limited to any
compensation paid or accrued to a |
16 | | serviceman while a prisoner of war or missing
in |
17 | | action) paid to a resident by reason of being a member |
18 | | of any component of
the Armed Forces of the United |
19 | | States and in respect of any compensation paid
or |
20 | | accrued to a resident who as a governmental employee |
21 | | was a prisoner of war
or missing in action, and in |
22 | | respect of any compensation paid to a resident in
2001 |
23 | | or thereafter by reason of being a member of the |
24 | | Illinois National Guard or, beginning with taxable |
25 | | years ending on or after December 31, 2007, the |
26 | | National Guard of any other state.
The provisions of |
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1 | | this subparagraph (E) are exempt
from the provisions |
2 | | of Section 250; |
3 | | (F) An amount equal to all amounts included in |
4 | | such total pursuant
to the provisions of Sections |
5 | | 402(a), 402(c), 403(a), 403(b), 406(a), 407(a),
and |
6 | | 408 of the Internal Revenue Code, or included in such |
7 | | total as
distributions under the provisions of any |
8 | | retirement or disability plan for
employees of any |
9 | | governmental agency or unit, or retirement payments to
|
10 | | retired partners, which payments are excluded in |
11 | | computing net earnings
from self employment by Section |
12 | | 1402 of the Internal Revenue Code and
regulations |
13 | | adopted pursuant thereto; |
14 | | (G) The valuation limitation amount; |
15 | | (H) An amount equal to the amount of any tax |
16 | | imposed by this Act
which was refunded to the taxpayer |
17 | | and included in such total for the
taxable year; |
18 | | (I) An amount equal to all amounts included in |
19 | | such total pursuant
to the provisions of Section 111 |
20 | | of the Internal Revenue Code as a
recovery of items |
21 | | previously deducted from adjusted gross income in the
|
22 | | computation of taxable income; |
23 | | (J) 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 |
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1 | | Edge Redevelopment Zone Act, and conducts
|
2 | | substantially all of its operations in a River Edge |
3 | | Redevelopment Zone or zones. This subparagraph (J) is |
4 | | exempt from the provisions of Section 250; |
5 | | (K) An amount equal to those dividends included in |
6 | | such total that
were paid by a corporation that |
7 | | conducts business operations in a federally
designated |
8 | | Foreign Trade Zone or Sub-Zone and that is designated |
9 | | a High Impact
Business located in Illinois; provided |
10 | | that dividends eligible for the
deduction provided in |
11 | | subparagraph (J) of paragraph (2) of this subsection
|
12 | | shall not be eligible for the deduction provided under |
13 | | this subparagraph
(K); |
14 | | (L) For taxable years ending after December 31, |
15 | | 1983, an amount equal to
all social security benefits |
16 | | and railroad retirement benefits included in
such |
17 | | total pursuant to Sections 72(r) and 86 of the |
18 | | Internal Revenue Code; |
19 | | (M) With the exception of any amounts subtracted |
20 | | under subparagraph
(N), an amount equal to the sum of |
21 | | all amounts disallowed as
deductions by (i) Sections |
22 | | 171(a)(2) , and 265(a)(2) of the Internal Revenue Code, |
23 | | and all amounts of expenses allocable
to interest and |
24 | | disallowed as deductions by Section 265(a)(1) of the |
25 | | Internal
Revenue Code;
and (ii) for taxable years
|
26 | | ending on or after August 13, 1999, Sections |
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1 | | 171(a)(2), 265,
280C, and 832(b)(5)(B)(i) of the |
2 | | Internal Revenue Code, plus, for taxable years ending |
3 | | on or after December 31, 2011, Section 45G(e)(3) of |
4 | | the Internal Revenue Code and, for taxable years |
5 | | ending on or after December 31, 2008, any amount |
6 | | included in gross income under Section 87 of the |
7 | | Internal Revenue Code; the provisions of this
|
8 | | subparagraph are exempt from the provisions of Section |
9 | | 250; |
10 | | (N) An amount equal to all amounts included in |
11 | | such total which are
exempt from taxation by this |
12 | | State either by reason of its statutes or
Constitution
|
13 | | or by reason of the Constitution, treaties or statutes |
14 | | of the United States;
provided that, in the case of any |
15 | | statute of this State that exempts income
derived from |
16 | | bonds or other obligations from the tax imposed under |
17 | | this Act,
the amount exempted shall be the interest |
18 | | net of bond premium amortization; |
19 | | (O) An amount equal to any contribution made to a |
20 | | job training
project established pursuant to the Tax |
21 | | Increment Allocation Redevelopment Act; |
22 | | (P) An amount equal to the amount of the deduction |
23 | | used to compute the
federal income tax credit for |
24 | | restoration of substantial amounts held under
claim of |
25 | | right for the taxable year pursuant to Section 1341 of |
26 | | the
Internal Revenue Code or of any itemized deduction |
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1 | | taken from adjusted gross income in the computation of |
2 | | taxable income for restoration of substantial amounts |
3 | | held under claim of right for the taxable year; |
4 | | (Q) An amount equal to any amounts included in |
5 | | such total, received by
the taxpayer as an |
6 | | acceleration in the payment of life, endowment or |
7 | | annuity
benefits in advance of the time they would |
8 | | otherwise be payable as an indemnity
for a terminal |
9 | | illness; |
10 | | (R) An amount equal to the amount of any federal or |
11 | | State bonus paid
to veterans of the Persian Gulf War; |
12 | | (S) An amount, to the extent included in adjusted |
13 | | gross income, equal
to the amount of a contribution |
14 | | made in the taxable year on behalf of the
taxpayer to a |
15 | | medical care savings account established under the |
16 | | Medical Care
Savings Account Act or the Medical Care |
17 | | Savings Account Act of 2000 to the
extent the |
18 | | contribution is accepted by the account
administrator |
19 | | as provided in that Act; |
20 | | (T) An amount, to the extent included in adjusted |
21 | | gross income, equal to
the amount of interest earned |
22 | | in the taxable year on a medical care savings
account |
23 | | established under the Medical Care Savings Account Act |
24 | | or the Medical
Care Savings Account Act of 2000 on |
25 | | behalf of the
taxpayer, other than interest added |
26 | | pursuant to item (D-5) of this paragraph
(2); |
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1 | | (U) For one taxable year beginning on or after |
2 | | January 1,
1994, an
amount equal to the total amount of |
3 | | tax imposed and paid under subsections (a)
and (b) of |
4 | | Section 201 of this Act on grant amounts received by |
5 | | the taxpayer
under the Nursing Home Grant Assistance |
6 | | Act during the taxpayer's taxable years
1992 and 1993; |
7 | | (V) Beginning with tax years ending on or after |
8 | | December 31, 1995 and
ending with tax years ending on |
9 | | or before December 31, 2004, an amount equal to
the |
10 | | amount paid by a taxpayer who is a
self-employed |
11 | | taxpayer, a partner of a partnership, or a
shareholder |
12 | | in a Subchapter S corporation for health insurance or |
13 | | long-term
care insurance for that taxpayer or that |
14 | | taxpayer's spouse or dependents, to
the extent that |
15 | | the amount paid for that health insurance or long-term |
16 | | care
insurance may be deducted under Section 213 of |
17 | | the Internal Revenue Code, has not been deducted on |
18 | | the federal income tax return of the taxpayer,
and |
19 | | does not exceed the taxable income attributable to |
20 | | that taxpayer's income,
self-employment income, or |
21 | | Subchapter S corporation income; except that no
|
22 | | deduction shall be allowed under this item (V) if the |
23 | | taxpayer is eligible to
participate in any health |
24 | | insurance or long-term care insurance plan of an
|
25 | | employer of the taxpayer or the taxpayer's
spouse. The |
26 | | amount of the health insurance and long-term care |
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1 | | insurance
subtracted under this item (V) shall be |
2 | | determined by multiplying total
health insurance and |
3 | | long-term care insurance premiums paid by the taxpayer
|
4 | | times a number that represents the fractional |
5 | | percentage of eligible medical
expenses under Section |
6 | | 213 of the Internal Revenue Code of 1986 not actually
|
7 | | deducted on the taxpayer's federal income tax return; |
8 | | (W) For taxable years beginning on or after |
9 | | January 1, 1998,
all amounts included in the |
10 | | taxpayer's federal gross income
in the taxable year |
11 | | from amounts converted from a regular IRA to a Roth |
12 | | IRA.
This paragraph is exempt from the provisions of |
13 | | Section
250; |
14 | | (X) For taxable year 1999 and thereafter, an |
15 | | amount equal to the
amount of any (i) distributions, |
16 | | to the extent includible in gross income for
federal |
17 | | income tax purposes, made to the taxpayer because of |
18 | | his or her status
as a victim of persecution for racial |
19 | | or religious reasons by Nazi Germany or
any other Axis |
20 | | regime or as an heir of the victim and (ii) items
of |
21 | | income, to the extent
includible in gross income for |
22 | | federal income tax purposes, attributable to,
derived |
23 | | from or in any way related to assets stolen from, |
24 | | hidden from, or
otherwise lost to a victim of
|
25 | | persecution for racial or religious reasons by Nazi |
26 | | Germany or any other Axis
regime immediately prior to, |
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1 | | during, and immediately after World War II,
including, |
2 | | but
not limited to, interest on the proceeds |
3 | | receivable as insurance
under policies issued to a |
4 | | victim of persecution for racial or religious
reasons
|
5 | | by Nazi Germany or any other Axis regime by European |
6 | | insurance companies
immediately prior to and during |
7 | | World War II;
provided, however, this subtraction from |
8 | | federal adjusted gross income does not
apply to assets |
9 | | acquired with such assets or with the proceeds from |
10 | | the sale of
such assets; provided, further, this |
11 | | paragraph shall only apply to a taxpayer
who was the |
12 | | first recipient of such assets after their recovery |
13 | | and who is a
victim of persecution for racial or |
14 | | religious reasons
by Nazi Germany or any other Axis |
15 | | regime or as an heir of the victim. The
amount of and |
16 | | the eligibility for any public assistance, benefit, or
|
17 | | similar entitlement is not affected by the inclusion |
18 | | of items (i) and (ii) of
this paragraph in gross income |
19 | | for federal income tax purposes.
This paragraph is |
20 | | exempt from the provisions of Section 250; |
21 | | (Y) For taxable years beginning on or after |
22 | | January 1, 2002
and ending
on or before December 31, |
23 | | 2004, moneys contributed in the taxable year to a |
24 | | College Savings Pool account under
Section 16.5 of the |
25 | | State Treasurer Act, except that amounts excluded from
|
26 | | gross income under Section 529(c)(3)(C)(i) of the |
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1 | | Internal Revenue Code
shall not be considered moneys |
2 | | contributed under this subparagraph (Y). For taxable |
3 | | years beginning on or after January 1, 2005, a maximum |
4 | | of $10,000
contributed
in the
taxable year to (i) a |
5 | | College Savings Pool account under Section 16.5 of the
|
6 | | State
Treasurer Act or (ii) the Illinois Prepaid |
7 | | Tuition Trust Fund,
except that
amounts excluded from |
8 | | gross income under Section 529(c)(3)(C)(i) of the
|
9 | | Internal
Revenue Code shall not be considered moneys |
10 | | contributed under this subparagraph
(Y). For purposes |
11 | | of this subparagraph, contributions made by an |
12 | | employer on behalf of an employee, or matching |
13 | | contributions made by an employee, shall be treated as |
14 | | made by the employee. This
subparagraph (Y) is exempt |
15 | | from the provisions of Section 250; |
16 | | (Z) For taxable years 2001 and thereafter, for the |
17 | | taxable year in
which the bonus depreciation deduction
|
18 | | is taken on the taxpayer's federal income tax return |
19 | | under
subsection (k) of Section 168 of the Internal |
20 | | Revenue Code and for each
applicable taxable year |
21 | | thereafter, an amount equal to "x", where: |
22 | | (1) "y" equals the amount of the depreciation |
23 | | deduction taken for the
taxable year
on the |
24 | | taxpayer's federal income tax return on property |
25 | | for which the bonus
depreciation deduction
was |
26 | | taken in any year under subsection (k) of Section |
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1 | | 168 of the Internal
Revenue Code, but not |
2 | | including the bonus depreciation deduction; |
3 | | (2) for taxable years ending on or before |
4 | | December 31, 2005, "x" equals "y" multiplied by 30 |
5 | | and then divided by 70 (or "y"
multiplied by |
6 | | 0.429); and |
7 | | (3) for taxable years ending after December |
8 | | 31, 2005: |
9 | | (i) for property on which a bonus |
10 | | depreciation deduction of 30% of the adjusted |
11 | | basis was taken, "x" equals "y" multiplied by |
12 | | 30 and then divided by 70 (or "y"
multiplied |
13 | | by 0.429); and |
14 | | (ii) for property on which a bonus |
15 | | depreciation deduction of 50% of the adjusted |
16 | | basis was taken, "x" equals "y" multiplied by |
17 | | 1.0. |
18 | | The aggregate amount deducted under this |
19 | | subparagraph in all taxable
years for any one piece of |
20 | | property may not exceed the amount of the bonus
|
21 | | depreciation deduction
taken on that property on the |
22 | | taxpayer's federal income tax return under
subsection |
23 | | (k) of Section 168 of the Internal Revenue Code. This |
24 | | subparagraph (Z) is exempt from the provisions of |
25 | | Section 250; |
26 | | (AA) If the taxpayer sells, transfers, abandons, |
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1 | | or otherwise disposes of
property for which the |
2 | | taxpayer was required in any taxable year to make an
|
3 | | addition modification under subparagraph (D-15), then |
4 | | an amount equal to that
addition modification.
|
5 | | If the taxpayer continues to own property through |
6 | | the last day of the last tax year for which the |
7 | | taxpayer may claim a depreciation deduction for |
8 | | federal income tax purposes and for which the taxpayer |
9 | | was required in any taxable year to make an addition |
10 | | modification under subparagraph (D-15), then an amount |
11 | | equal to that addition modification.
|
12 | | The taxpayer is allowed to take the deduction |
13 | | under this subparagraph
only once with respect to any |
14 | | one piece of property. |
15 | | This subparagraph (AA) is exempt from the |
16 | | provisions of Section 250; |
17 | | (BB) Any amount included in adjusted gross income, |
18 | | other
than
salary,
received by a driver in a |
19 | | ridesharing arrangement using a motor vehicle; |
20 | | (CC) The amount of (i) any interest income (net of |
21 | | the deductions allocable thereto) taken into account |
22 | | for the taxable year with respect to a transaction |
23 | | with a taxpayer that is required to make an addition |
24 | | modification with respect to such transaction under |
25 | | Section 203(a)(2)(D-17), 203(b)(2)(E-12), |
26 | | 203(c)(2)(G-12), or 203(d)(2)(D-7), but not to exceed |
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1 | | the amount of that addition modification, and
(ii) any |
2 | | income from intangible property (net of the deductions |
3 | | allocable thereto) taken into account for the taxable |
4 | | year with respect to a transaction with a taxpayer |
5 | | that is required to make an addition modification with |
6 | | respect to such transaction under Section |
7 | | 203(a)(2)(D-18), 203(b)(2)(E-13), 203(c)(2)(G-13), or |
8 | | 203(d)(2)(D-8), but not to exceed the amount of that |
9 | | addition modification. This subparagraph (CC) is |
10 | | exempt from the provisions of Section 250; |
11 | | (DD) 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 |
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1 | | made for the same taxable year under Section |
2 | | 203(a)(2)(D-17) for interest paid, accrued, or |
3 | | incurred, directly or indirectly, to the same person. |
4 | | This subparagraph (DD) is exempt from the provisions |
5 | | of Section 250; |
6 | | (EE) 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(a)(2)(D-18) for intangible expenses and costs |
24 | | paid, accrued, or incurred, directly or indirectly, to |
25 | | the same foreign person. This subparagraph (EE) is |
26 | | exempt from the provisions of Section 250; |
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1 | | (FF) An amount equal to any amount awarded to the |
2 | | taxpayer during the taxable year by the Court of |
3 | | Claims under subsection (c) of Section 8 of the Court |
4 | | of Claims Act for time unjustly served in a State |
5 | | prison. This subparagraph (FF) is exempt from the |
6 | | provisions of Section 250; |
7 | | (GG) For taxable years ending on or after December |
8 | | 31, 2011, in the case of a taxpayer who was required to |
9 | | add back any insurance premiums under Section |
10 | | 203(a)(2)(D-19), such taxpayer may elect to subtract |
11 | | that part of a reimbursement received from the |
12 | | insurance company equal to the amount of the expense |
13 | | or loss (including expenses incurred by the insurance |
14 | | company) that would have been taken into account as a |
15 | | deduction for federal income tax purposes if the |
16 | | expense or loss had been uninsured. If a taxpayer |
17 | | makes the election provided for by this subparagraph |
18 | | (GG), the insurer to which the premiums were paid must |
19 | | add back to income the amount subtracted by the |
20 | | taxpayer pursuant to this subparagraph (GG). This |
21 | | subparagraph (GG) is exempt from the provisions of |
22 | | Section 250; and |
23 | | (HH) For taxable years beginning on or after |
24 | | January 1, 2018 and prior to January 1, 2023, a maximum |
25 | | of $10,000 contributed in the taxable year to a |
26 | | qualified ABLE account under Section 16.6 of the State |
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1 | | Treasurer Act, except that amounts excluded from gross |
2 | | income under Section 529(c)(3)(C)(i) or Section |
3 | | 529A(c)(1)(C) of the Internal Revenue Code shall not |
4 | | be considered moneys contributed under this |
5 | | subparagraph (HH). For purposes of this subparagraph |
6 | | (HH), contributions made by an employer on behalf of |
7 | | an employee, or matching contributions made by an |
8 | | employee, shall be treated as made by the employee. |
9 | | (b) Corporations. |
10 | | (1) In general. In the case of a corporation, base |
11 | | income means an
amount equal to the taxpayer's taxable |
12 | | income for the taxable year as
modified by paragraph (2). |
13 | | (2) Modifications. The taxable income referred to in |
14 | | paragraph (1)
shall be modified by adding thereto the sum |
15 | | of the following amounts: |
16 | | (A) An amount equal to all amounts paid or accrued |
17 | | to the taxpayer
as interest and all distributions |
18 | | received from regulated investment
companies during |
19 | | the taxable year to the extent excluded from gross
|
20 | | income in the computation of taxable income; |
21 | | (B) An amount equal to the amount of tax imposed by |
22 | | this Act to the
extent deducted from gross income in |
23 | | the computation of taxable income
for the taxable |
24 | | year; |
25 | | (C) In the case of a regulated investment company, |
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1 | | an amount equal to
the excess of (i) the net long-term |
2 | | capital gain for the taxable year, over
(ii) the |
3 | | amount of the capital gain dividends designated as |
4 | | such in accordance
with Section 852(b)(3)(C) of the |
5 | | Internal Revenue Code and any amount
designated under |
6 | | Section 852(b)(3)(D) of the Internal Revenue Code,
|
7 | | attributable to the taxable year (this amendatory Act |
8 | | of 1995
(Public Act 89-89) is declarative of existing |
9 | | law and is not a new
enactment); |
10 | | (D) The amount of any net operating loss deduction |
11 | | taken in arriving
at taxable income, other than a net |
12 | | operating loss carried forward from a
taxable year |
13 | | ending prior to December 31, 1986; |
14 | | (E) For taxable years in which a net operating |
15 | | loss carryback or
carryforward from a taxable year |
16 | | ending prior to December 31, 1986 is an
element of |
17 | | taxable income under paragraph (1) of subsection (e) |
18 | | or
subparagraph (E) of paragraph (2) of subsection |
19 | | (e), the amount by which
addition modifications other |
20 | | than those provided by this subparagraph (E)
exceeded |
21 | | subtraction modifications in such earlier taxable |
22 | | year, with the
following limitations applied in the |
23 | | order that they are listed: |
24 | | (i) the addition modification relating to the |
25 | | net operating loss
carried back or forward to the |
26 | | taxable year from any taxable year ending
prior to |
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1 | | December 31, 1986 shall be reduced by the amount |
2 | | of addition
modification under this subparagraph |
3 | | (E) which related to that net operating
loss and |
4 | | which was taken into account in calculating the |
5 | | base income of an
earlier taxable year, and |
6 | | (ii) the addition modification relating to the |
7 | | net operating loss
carried back or forward to the |
8 | | taxable year from any taxable year ending
prior to |
9 | | December 31, 1986 shall not exceed the amount of |
10 | | such carryback or
carryforward; |
11 | | For taxable years in which there is a net |
12 | | operating loss carryback or
carryforward from more |
13 | | than one other taxable year ending prior to December
|
14 | | 31, 1986, the addition modification provided in this |
15 | | subparagraph (E) shall
be the sum of the amounts |
16 | | computed independently under the preceding
provisions |
17 | | of this subparagraph (E) for each such taxable year; |
18 | | (E-5) For taxable years ending after December 31, |
19 | | 1997, an
amount equal to any eligible remediation |
20 | | costs that the corporation
deducted in computing |
21 | | adjusted gross income and for which the
corporation |
22 | | claims a credit under subsection (l) of Section 201; |
23 | | (E-10) For taxable years 2001 and thereafter, an |
24 | | amount equal to the
bonus depreciation deduction taken |
25 | | on the taxpayer's federal income tax return for the |
26 | | taxable
year under subsection (k) of Section 168 of |
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1 | | the Internal Revenue Code; |
2 | | (E-11) If the taxpayer sells, transfers, abandons, |
3 | | or otherwise disposes of property for which the |
4 | | taxpayer was required in any taxable year to
make an |
5 | | addition modification under subparagraph (E-10), then |
6 | | an amount equal
to the aggregate amount of the |
7 | | deductions taken in all taxable
years under |
8 | | subparagraph (T) with respect to that property. |
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 allowed in any taxable year to make a subtraction |
14 | | modification under subparagraph (T), then an amount |
15 | | equal to that subtraction modification.
|
16 | | The taxpayer is required to make the addition |
17 | | modification under this
subparagraph
only once with |
18 | | respect to any one piece of property; |
19 | | (E-12) An amount equal to the amount otherwise |
20 | | allowed as a deduction in computing base income for |
21 | | interest paid, accrued, or incurred, directly or |
22 | | indirectly, (i) for taxable years ending on or after |
23 | | December 31, 2004, to a foreign person who would be a |
24 | | member of the same unitary business group but for the |
25 | | fact the foreign person's business activity outside |
26 | | the United States is 80% or more of the foreign |
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1 | | person's total business activity and (ii) for taxable |
2 | | years ending on or after December 31, 2008, to a person |
3 | | who would be a member of the same unitary business |
4 | | group but for the fact that the person is prohibited |
5 | | under Section 1501(a)(27) from being included in the |
6 | | unitary business group because he or she is ordinarily |
7 | | required to apportion business income under different |
8 | | subsections of Section 304. The addition modification |
9 | | required by this subparagraph shall be reduced to the |
10 | | extent that dividends were included in base income of |
11 | | the unitary group for the same taxable year and |
12 | | received by the taxpayer or by a member of the |
13 | | taxpayer's unitary business group (including amounts |
14 | | included in gross income pursuant to Sections 951 |
15 | | through 964 of the Internal Revenue Code and amounts |
16 | | included in gross income under Section 78 of the |
17 | | Internal Revenue Code) with respect to the stock of |
18 | | the same person to whom the interest was paid, |
19 | | accrued, or incurred.
|
20 | | This paragraph shall not apply to the following:
|
21 | | (i) an item of interest paid, accrued, or |
22 | | incurred, directly or indirectly, to a person who |
23 | | is subject in a foreign country or state, other |
24 | | than a state which requires mandatory unitary |
25 | | reporting, to a tax on or measured by net income |
26 | | with respect to such interest; or |
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1 | | (ii) an item of interest paid, accrued, or |
2 | | incurred, directly or indirectly, to a person if |
3 | | the taxpayer can establish, based on a |
4 | | preponderance of the evidence, both of the |
5 | | following: |
6 | | (a) the person, during the same taxable |
7 | | year, paid, accrued, or incurred, the interest |
8 | | to a person that is not a related member, and |
9 | | (b) the transaction giving rise to the |
10 | | interest expense between the taxpayer and the |
11 | | person did not have as a principal purpose the |
12 | | avoidance of Illinois income tax, and is paid |
13 | | pursuant to a contract or agreement that |
14 | | reflects an arm's-length interest rate and |
15 | | terms; or
|
16 | | (iii) the taxpayer can establish, based on |
17 | | clear and convincing evidence, that the interest |
18 | | paid, accrued, or incurred relates to a contract |
19 | | or agreement entered into at arm's-length rates |
20 | | and terms and the principal purpose for the |
21 | | payment is not federal or Illinois tax avoidance; |
22 | | or
|
23 | | (iv) an item of interest paid, accrued, or |
24 | | incurred, directly or indirectly, to a person if |
25 | | the taxpayer establishes by clear and convincing |
26 | | evidence that the adjustments are unreasonable; or |
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1 | | if the taxpayer and the Director agree in writing |
2 | | to the application or use of an alternative method |
3 | | of apportionment under Section 304(f).
|
4 | | Nothing in this subsection shall preclude the |
5 | | Director from making any other adjustment |
6 | | otherwise allowed under Section 404 of this Act |
7 | | for any tax year beginning after the effective |
8 | | date of this amendment provided such adjustment is |
9 | | made pursuant to regulation adopted by the |
10 | | Department and such regulations provide methods |
11 | | and standards by which the Department will utilize |
12 | | its authority under Section 404 of this Act;
|
13 | | (E-13) An amount equal to the amount of intangible |
14 | | expenses and costs otherwise allowed as a deduction in |
15 | | computing base income, and that were paid, accrued, or |
16 | | incurred, directly or indirectly, (i) for taxable |
17 | | years ending on or after December 31, 2004, to a |
18 | | foreign person who would be a member of the same |
19 | | unitary business group but for the fact that the |
20 | | foreign person's business activity outside the United |
21 | | States is 80% or more of that person's total business |
22 | | activity and (ii) for taxable years ending on or after |
23 | | December 31, 2008, to a person who would be a member of |
24 | | the same unitary business group but for the fact that |
25 | | the person is prohibited under Section 1501(a)(27) |
26 | | from being included in the unitary business group |
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1 | | because he or she is ordinarily required to apportion |
2 | | business income under different subsections of Section |
3 | | 304. The addition modification required by this |
4 | | subparagraph shall be reduced to the extent that |
5 | | dividends were included in base income of the unitary |
6 | | group for the same taxable year and received by the |
7 | | taxpayer or by a member of the taxpayer's unitary |
8 | | business group (including amounts included in gross |
9 | | income pursuant to Sections 951 through 964 of the |
10 | | Internal Revenue Code and amounts included in gross |
11 | | income under Section 78 of the Internal Revenue Code) |
12 | | with respect to the stock of the same person to whom |
13 | | the intangible expenses and costs were directly or |
14 | | indirectly paid, incurred, or accrued. The preceding |
15 | | sentence shall not apply to the extent that the same |
16 | | dividends caused a reduction to the addition |
17 | | modification required under Section 203(b)(2)(E-12) of |
18 | | this Act.
As used in this subparagraph, the term |
19 | | "intangible expenses and costs" includes (1) expenses, |
20 | | losses, and costs for, or related to, the direct or |
21 | | indirect acquisition, use, maintenance or management, |
22 | | ownership, sale, exchange, or any other disposition of |
23 | | intangible property; (2) losses incurred, directly or |
24 | | indirectly, from factoring transactions or discounting |
25 | | transactions; (3) royalty, patent, technical, and |
26 | | copyright fees; (4) licensing fees; and (5) other |
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1 | | similar expenses and costs.
For purposes of this |
2 | | subparagraph, "intangible property" includes patents, |
3 | | patent applications, trade names, trademarks, service |
4 | | marks, copyrights, mask works, trade secrets, and |
5 | | similar types of intangible assets. |
6 | | This paragraph shall not apply to the following: |
7 | | (i) any item of intangible expenses or costs |
8 | | paid, accrued, or incurred, directly or |
9 | | indirectly, from a transaction with a person who |
10 | | is subject in a foreign country or state, other |
11 | | than a state which requires mandatory unitary |
12 | | reporting, to a tax on or measured by net income |
13 | | with respect to such item; or |
14 | | (ii) any item of intangible expense or cost |
15 | | paid, accrued, or incurred, directly or |
16 | | indirectly, if the taxpayer can establish, based |
17 | | on a preponderance of the evidence, both of the |
18 | | following: |
19 | | (a) the person during the same taxable |
20 | | year paid, accrued, or incurred, the |
21 | | intangible expense or cost to a person that is |
22 | | not a related member, and |
23 | | (b) the transaction giving rise to the |
24 | | intangible expense or cost between the |
25 | | taxpayer and the person did not have as a |
26 | | principal purpose the avoidance of Illinois |
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1 | | income tax, and is paid pursuant to a contract |
2 | | or agreement that reflects arm's-length terms; |
3 | | or |
4 | | (iii) any item of intangible expense or cost |
5 | | paid, accrued, or incurred, directly or |
6 | | indirectly, from a transaction with a person if |
7 | | the taxpayer establishes by clear and convincing |
8 | | evidence, that the adjustments are unreasonable; |
9 | | or if the taxpayer and the Director agree in |
10 | | writing to the application or use of an |
11 | | alternative method of apportionment under Section |
12 | | 304(f);
|
13 | | Nothing in this subsection shall preclude the |
14 | | Director from making any other adjustment |
15 | | otherwise allowed under Section 404 of this Act |
16 | | for any tax year beginning after the effective |
17 | | date of this amendment provided such adjustment is |
18 | | made pursuant to regulation adopted by the |
19 | | Department and such regulations provide methods |
20 | | and standards by which the Department will utilize |
21 | | its authority under Section 404 of this Act;
|
22 | | (E-14) For taxable years ending on or after |
23 | | December 31, 2008, an amount equal to the amount of |
24 | | insurance premium expenses and costs otherwise allowed |
25 | | as a deduction in computing base income, and that were |
26 | | paid, accrued, or incurred, directly or indirectly, to |
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1 | | a person who would be a member of the same unitary |
2 | | business group but for the fact that the person is |
3 | | prohibited under Section 1501(a)(27) from being |
4 | | included in the unitary business group because he or |
5 | | she is ordinarily required to apportion business |
6 | | income under different subsections of Section 304. The |
7 | | addition modification required by this subparagraph |
8 | | shall be reduced to the extent that dividends were |
9 | | included in base income of the unitary group for the |
10 | | same taxable year and received by the taxpayer or by a |
11 | | member of the taxpayer's unitary business group |
12 | | (including amounts included in gross income under |
13 | | Sections 951 through 964 of the Internal Revenue Code |
14 | | and amounts included in gross income under Section 78 |
15 | | of the Internal Revenue Code) with respect to the |
16 | | stock of the same person to whom the premiums and costs |
17 | | were directly or indirectly paid, incurred, or |
18 | | accrued. The preceding sentence does not apply to the |
19 | | extent that the same dividends caused a reduction to |
20 | | the addition modification required under Section |
21 | | 203(b)(2)(E-12) or Section 203(b)(2)(E-13) of this |
22 | | Act;
|
23 | | (E-15) For taxable years beginning after December |
24 | | 31, 2008, any deduction for dividends paid by a |
25 | | captive real estate investment trust that is allowed |
26 | | to a real estate investment trust under Section |
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1 | | 857(b)(2)(B) of the Internal Revenue Code for |
2 | | dividends paid; |
3 | | (E-16) An amount equal to the credit allowable to |
4 | | the taxpayer under Section 218(a) of this Act, |
5 | | determined without regard to Section 218(c) of this |
6 | | Act; |
7 | | (E-17) For taxable years ending on or after |
8 | | December 31, 2017, an amount equal to the deduction |
9 | | allowed under Section 199 of the Internal Revenue Code |
10 | | for the taxable year; |
11 | | (E-18) for taxable years beginning after December |
12 | | 31, 2018, an amount equal to the deduction allowed |
13 | | under Section 250(a)(1)(A) of the Internal Revenue |
14 | | Code for the taxable year. |
15 | | and by deducting from the total so obtained the sum of the |
16 | | following
amounts: |
17 | | (F) An amount equal to the amount of any tax |
18 | | imposed by this Act
which was refunded to the taxpayer |
19 | | and included in such total for the
taxable year; |
20 | | (G) An amount equal to any amount included in such |
21 | | total under
Section 78 of the Internal Revenue Code; |
22 | | (H) In the case of a regulated investment company, |
23 | | an amount equal
to the amount of exempt interest |
24 | | dividends as defined in subsection (b)(5) of Section |
25 | | 852 of the Internal Revenue Code, paid to shareholders
|
26 | | for the taxable year; |
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1 | | (I) With the exception of any amounts subtracted |
2 | | under subparagraph
(J),
an amount equal to the sum of |
3 | | all amounts disallowed as
deductions by (i) Sections |
4 | | 171(a)(2) , and 265(a)(2) and amounts disallowed as
|
5 | | interest expense by Section 291(a)(3) of the Internal |
6 | | Revenue Code, and all amounts of expenses allocable to |
7 | | interest and
disallowed as deductions by Section |
8 | | 265(a)(1) of the Internal Revenue Code;
and (ii) for |
9 | | taxable years
ending on or after August 13, 1999, |
10 | | Sections
171(a)(2), 265,
280C, 291(a)(3), and |
11 | | 832(b)(5)(B)(i) of the Internal Revenue Code, plus, |
12 | | for tax years ending on or after December 31, 2011, |
13 | | amounts disallowed as deductions by Section 45G(e)(3) |
14 | | of the Internal Revenue Code and, for taxable years |
15 | | ending on or after December 31, 2008, any amount |
16 | | included in gross income under Section 87 of the |
17 | | Internal Revenue Code and the policyholders' share of |
18 | | tax-exempt interest of a life insurance company under |
19 | | Section 807(a)(2)(B) of the Internal Revenue Code (in |
20 | | the case of a life insurance company with gross income |
21 | | from a decrease in reserves for the tax year) or |
22 | | Section 807(b)(1)(B) of the Internal Revenue Code (in |
23 | | the case of a life insurance company allowed a |
24 | | deduction for an increase in reserves for the tax |
25 | | year); the
provisions of this
subparagraph are exempt |
26 | | from the provisions of Section 250; |
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1 | | (J) An amount equal to all amounts included in |
2 | | such total which are
exempt from taxation by this |
3 | | State either by reason of its statutes or
Constitution
|
4 | | or by reason of the Constitution, treaties or statutes |
5 | | of the United States;
provided that, in the case of any |
6 | | statute of this State that exempts income
derived from |
7 | | bonds or other obligations from the tax imposed under |
8 | | this Act,
the amount exempted shall be the interest |
9 | | net of bond premium amortization; |
10 | | (K) An amount equal to those dividends included in |
11 | | such total
which were paid by a corporation which |
12 | | conducts
business operations in a River Edge |
13 | | Redevelopment Zone or zones created under the River |
14 | | Edge Redevelopment Zone Act and conducts substantially |
15 | | all of its
operations in a River Edge Redevelopment |
16 | | Zone or zones. This subparagraph (K) is exempt from |
17 | | the provisions of Section 250; |
18 | | (L) An amount equal to those dividends included in |
19 | | such total that
were paid by a corporation that |
20 | | conducts business operations in a federally
designated |
21 | | Foreign Trade Zone or Sub-Zone and that is designated |
22 | | a High Impact
Business located in Illinois; provided |
23 | | that dividends eligible for the
deduction provided in |
24 | | subparagraph (K) of paragraph 2 of this subsection
|
25 | | shall not be eligible for the deduction provided under |
26 | | this subparagraph
(L); |
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1 | | (M) For any taxpayer that is a financial |
2 | | organization within the meaning
of Section 304(c) of |
3 | | this Act, an amount included in such total as interest
|
4 | | income from a loan or loans made by such taxpayer to a |
5 | | borrower, to the extent
that such a loan is secured by |
6 | | property which is eligible for the River Edge |
7 | | Redevelopment Zone Investment Credit. To determine the |
8 | | portion of a loan or loans that is
secured by property |
9 | | eligible for a Section 201(f) investment
credit to the |
10 | | borrower, the entire principal amount of the loan or |
11 | | loans
between the taxpayer and the borrower should be |
12 | | divided into the basis of the
Section 201(f) |
13 | | investment credit property which secures the
loan or |
14 | | loans, using for this purpose the original basis of |
15 | | such property on
the date that it was placed in service |
16 | | in the River Edge Redevelopment Zone. The subtraction |
17 | | modification available to the taxpayer in any
year |
18 | | under this subsection shall be that portion of the |
19 | | total interest paid
by the borrower with respect to |
20 | | such loan attributable to the eligible
property as |
21 | | calculated under the previous sentence. This |
22 | | subparagraph (M) is exempt from the provisions of |
23 | | Section 250; |
24 | | (M-1) For any taxpayer that is a financial |
25 | | organization within the
meaning of Section 304(c) of |
26 | | this Act, an amount included in such total as
interest |
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1 | | income from a loan or loans made by such taxpayer to a |
2 | | borrower,
to the extent that such a loan is secured by |
3 | | property which is eligible for
the High Impact |
4 | | Business Investment Credit. To determine the portion |
5 | | of a
loan or loans that is secured by property eligible |
6 | | for a Section 201(h) investment credit to the |
7 | | borrower, the entire principal amount of
the loan or |
8 | | loans between the taxpayer and the borrower should be |
9 | | divided into
the basis of the Section 201(h) |
10 | | investment credit property which
secures the loan or |
11 | | loans, using for this purpose the original basis of |
12 | | such
property on the date that it was placed in service |
13 | | in a federally designated
Foreign Trade Zone or |
14 | | Sub-Zone located in Illinois. No taxpayer that is
|
15 | | eligible for the deduction provided in subparagraph |
16 | | (M) of paragraph (2) of
this subsection shall be |
17 | | eligible for the deduction provided under this
|
18 | | subparagraph (M-1). The subtraction modification |
19 | | available to taxpayers in
any year under this |
20 | | subsection shall be that portion of the total interest
|
21 | | paid by the borrower with respect to such loan |
22 | | attributable to the eligible
property as calculated |
23 | | under the previous sentence; |
24 | | (N) Two times any contribution made during the |
25 | | taxable year to a
designated zone organization to the |
26 | | extent that the contribution (i)
qualifies as a |
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1 | | charitable contribution under subsection (c) of |
2 | | Section 170
of the Internal Revenue Code and (ii) |
3 | | must, by its terms, be used for a
project approved by |
4 | | the Department of Commerce and Economic Opportunity |
5 | | under Section 11 of the Illinois Enterprise Zone Act |
6 | | or under Section 10-10 of the River Edge Redevelopment |
7 | | Zone Act. This subparagraph (N) is exempt from the |
8 | | provisions of Section 250; |
9 | | (O) An amount equal to: (i) 85% for taxable years |
10 | | ending on or before
December 31, 1992, or, a |
11 | | percentage equal to the percentage allowable under
|
12 | | Section 243(a)(1) of the Internal Revenue Code of 1986 |
13 | | for taxable years ending
after December 31, 1992, of |
14 | | the amount by which dividends included in taxable
|
15 | | income and received from a corporation that is not |
16 | | created or organized under
the laws of the United |
17 | | States or any state or political subdivision thereof,
|
18 | | including, for taxable years ending on or after |
19 | | December 31, 1988, dividends
received or deemed |
20 | | received or paid or deemed paid under Sections 951 |
21 | | through
965 of the Internal Revenue Code, exceed the |
22 | | amount of the modification
provided under subparagraph |
23 | | (G) of paragraph (2) of this subsection (b) which
is |
24 | | related to such dividends, and including, for taxable |
25 | | years ending on or after December 31, 2008, dividends |
26 | | received from a captive real estate investment trust; |
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1 | | plus (ii) 100% of the amount by which dividends,
|
2 | | included in taxable income and received, including, |
3 | | for taxable years ending on
or after December 31, |
4 | | 1988, dividends received or deemed received or paid or
|
5 | | deemed paid under Sections 951 through 964 of the |
6 | | Internal Revenue Code and including, for taxable years |
7 | | ending on or after December 31, 2008, dividends |
8 | | received from a captive real estate investment trust, |
9 | | from
any such corporation specified in clause (i) that |
10 | | would but for the provisions
of Section 1504(b)(3) of |
11 | | the Internal Revenue Code be treated as a member of
the |
12 | | affiliated group which includes the dividend |
13 | | recipient, exceed the amount
of the modification |
14 | | provided under subparagraph (G) of paragraph (2) of |
15 | | this
subsection (b) which is related to such |
16 | | dividends. This subparagraph (O) is exempt from the |
17 | | provisions of Section 250 of this Act; |
18 | | (P) An amount equal to any contribution made to a |
19 | | job training project
established pursuant to the Tax |
20 | | Increment Allocation Redevelopment Act; |
21 | | (Q) An amount equal to the amount of the deduction |
22 | | used to compute the
federal income tax credit for |
23 | | restoration of substantial amounts held under
claim of |
24 | | right for the taxable year pursuant to Section 1341 of |
25 | | the
Internal Revenue Code; |
26 | | (R) On and after July 20, 1999, in the case of an |
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1 | | attorney-in-fact with respect to whom an
interinsurer |
2 | | or a reciprocal insurer has made the election under |
3 | | Section 835 of
the Internal Revenue Code, 26 U.S.C. |
4 | | 835, an amount equal to the excess, if
any, of the |
5 | | amounts paid or incurred by that interinsurer or |
6 | | reciprocal insurer
in the taxable year to the |
7 | | attorney-in-fact over the deduction allowed to that
|
8 | | interinsurer or reciprocal insurer with respect to the |
9 | | attorney-in-fact under
Section 835(b) of the Internal |
10 | | Revenue Code for the taxable year; the provisions of |
11 | | this subparagraph are exempt from the provisions of |
12 | | Section 250; |
13 | | (S) For taxable years ending on or after December |
14 | | 31, 1997, in the
case of a Subchapter
S corporation, an |
15 | | amount equal to all amounts of income allocable to a
|
16 | | shareholder subject to the Personal Property Tax |
17 | | Replacement Income Tax imposed
by subsections (c) and |
18 | | (d) of Section 201 of this Act, including amounts
|
19 | | allocable to organizations exempt from federal income |
20 | | tax by reason of Section
501(a) of the Internal |
21 | | Revenue Code. This subparagraph (S) is exempt from
the |
22 | | provisions of Section 250; |
23 | | (T) For taxable years 2001 and thereafter, for the |
24 | | taxable year in
which the bonus depreciation deduction
|
25 | | is taken on the taxpayer's federal income tax return |
26 | | under
subsection (k) of Section 168 of the Internal |
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1 | | Revenue Code and for each
applicable taxable year |
2 | | thereafter, an amount equal to "x", where: |
3 | | (1) "y" equals the amount of the depreciation |
4 | | deduction taken for the
taxable year
on the |
5 | | taxpayer's federal income tax return on property |
6 | | for which the bonus
depreciation deduction
was |
7 | | taken in any year under subsection (k) of Section |
8 | | 168 of the Internal
Revenue Code, but not |
9 | | including the bonus depreciation deduction; |
10 | | (2) for taxable years ending on or before |
11 | | December 31, 2005, "x" equals "y" multiplied by 30 |
12 | | and then divided by 70 (or "y"
multiplied by |
13 | | 0.429); and |
14 | | (3) for taxable years ending after December |
15 | | 31, 2005: |
16 | | (i) for property on which a bonus |
17 | | depreciation deduction of 30% of the adjusted |
18 | | basis was taken, "x" equals "y" multiplied by |
19 | | 30 and then divided by 70 (or "y"
multiplied |
20 | | by 0.429); and |
21 | | (ii) for property on which a bonus |
22 | | depreciation deduction of 50% of the adjusted |
23 | | basis was taken, "x" equals "y" multiplied by |
24 | | 1.0. |
25 | | The aggregate amount deducted under this |
26 | | subparagraph in all taxable
years for any one piece of |
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1 | | property may not exceed the amount of the bonus
|
2 | | depreciation deduction
taken on that property on the |
3 | | taxpayer's federal income tax return under
subsection |
4 | | (k) of Section 168 of the Internal Revenue Code. This |
5 | | subparagraph (T) is exempt from the provisions of |
6 | | Section 250; |
7 | | (U) If the taxpayer sells, transfers, abandons, or |
8 | | otherwise disposes of
property for which the taxpayer |
9 | | was required in any taxable year to make an
addition |
10 | | modification under subparagraph (E-10), then an amount |
11 | | equal to that
addition modification. |
12 | | If the taxpayer continues to own property through |
13 | | the last day of the last tax year for which the |
14 | | taxpayer may claim a depreciation deduction for |
15 | | federal income tax purposes and for which the taxpayer |
16 | | was required in any taxable year to make an addition |
17 | | modification under subparagraph (E-10), then an amount |
18 | | equal to that addition modification.
|
19 | | The taxpayer is allowed to take the deduction |
20 | | under this subparagraph
only once with respect to any |
21 | | one piece of property. |
22 | | This subparagraph (U) is exempt from the |
23 | | provisions of Section 250; |
24 | | (V) 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 |
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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 such addition modification,
(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 such |
13 | | addition modification, and (iii) any insurance premium |
14 | | income (net of deductions allocable thereto) taken |
15 | | into account for the taxable year with respect to a |
16 | | transaction with a taxpayer that is required to make |
17 | | an addition modification with respect to such |
18 | | transaction under Section 203(a)(2)(D-19), Section |
19 | | 203(b)(2)(E-14), Section 203(c)(2)(G-14), or Section |
20 | | 203(d)(2)(D-9), but not to exceed the amount of that |
21 | | addition modification. This subparagraph (V) is exempt |
22 | | from the provisions of Section 250;
|
23 | | (W) An amount equal to the interest income taken |
24 | | into account for the taxable year (net of the |
25 | | deductions allocable thereto) with respect to |
26 | | transactions with (i) a foreign person who would be a |
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1 | | member of the taxpayer's unitary business group but |
2 | | for the fact that the foreign person's business |
3 | | activity outside the United States is 80% or more of |
4 | | that person's total business activity and (ii) for |
5 | | taxable years ending on or after December 31, 2008, to |
6 | | a person who would be a member of the same unitary |
7 | | business group but for the fact that the person is |
8 | | prohibited under Section 1501(a)(27) from being |
9 | | included in the unitary business group because he or |
10 | | she is ordinarily required to apportion business |
11 | | income under different subsections of Section 304, but |
12 | | not to exceed the addition modification required to be |
13 | | made for the same taxable year under Section |
14 | | 203(b)(2)(E-12) for interest paid, accrued, or |
15 | | incurred, directly or indirectly, to the same person. |
16 | | This subparagraph (W) is exempt from the provisions of |
17 | | Section 250;
|
18 | | (X) An amount equal to the income from intangible |
19 | | property taken into account for the taxable year (net |
20 | | of the deductions allocable thereto) with respect to |
21 | | transactions with (i) a foreign person who would be a |
22 | | member of the taxpayer's unitary business group but |
23 | | for the fact that the foreign person's business |
24 | | activity outside the United States is 80% or more of |
25 | | that person's total business activity and (ii) for |
26 | | taxable years ending on or after December 31, 2008, to |
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1 | | a person who would be a member of the same unitary |
2 | | business group but for the fact that the person is |
3 | | prohibited under Section 1501(a)(27) from being |
4 | | included in the unitary business group because he or |
5 | | she is ordinarily required to apportion business |
6 | | income under different subsections of Section 304, but |
7 | | not to exceed the addition modification required to be |
8 | | made for the same taxable year under Section |
9 | | 203(b)(2)(E-13) for intangible expenses and costs |
10 | | paid, accrued, or incurred, directly or indirectly, to |
11 | | the same foreign person. This subparagraph (X) is |
12 | | exempt from the provisions of Section 250;
|
13 | | (Y) For taxable years ending on or after December |
14 | | 31, 2011, in the case of a taxpayer who was required to |
15 | | add back any insurance premiums under Section |
16 | | 203(b)(2)(E-14), such taxpayer may elect to subtract |
17 | | that part of a reimbursement received from the |
18 | | insurance company equal to the amount of the expense |
19 | | or loss (including expenses incurred by the insurance |
20 | | company) that would have been taken into account as a |
21 | | deduction for federal income tax purposes if the |
22 | | expense or loss had been uninsured. If a taxpayer |
23 | | makes the election provided for by this subparagraph |
24 | | (Y), the insurer to which the premiums were paid must |
25 | | add back to income the amount subtracted by the |
26 | | taxpayer pursuant to this subparagraph (Y). This |
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1 | | subparagraph (Y) is exempt from the provisions of |
2 | | Section 250; and |
3 | | (Z) The difference between the nondeductible |
4 | | controlled foreign corporation dividends under Section |
5 | | 965(e)(3) of the Internal Revenue Code over the |
6 | | taxable income of the taxpayer, computed without |
7 | | regard to Section 965(e)(2)(A) of the Internal Revenue |
8 | | Code, and without regard to any net operating loss |
9 | | deduction. This subparagraph (Z) is exempt from the |
10 | | provisions of Section 250. |
11 | | (3) Special rule. For purposes of paragraph (2)(A), |
12 | | "gross income"
in the case of a life insurance company, |
13 | | for tax years ending on and after
December 31, 1994,
and |
14 | | prior to December 31, 2011, shall mean the gross |
15 | | investment income for the taxable year and, for tax years |
16 | | ending on or after December 31, 2011, shall mean all |
17 | | amounts included in life insurance gross income under |
18 | | Section 803(a)(3) of the Internal Revenue Code. |
19 | | (c) Trusts and estates. |
20 | | (1) In general. In the case of a trust or estate, base |
21 | | income means
an amount equal to the taxpayer's taxable |
22 | | income for the taxable year as
modified by paragraph (2). |
23 | | (2) Modifications. Subject to the provisions of |
24 | | paragraph (3), the
taxable income referred to in paragraph |
25 | | (1) shall be modified by adding
thereto the sum of the |
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1 | | following amounts: |
2 | | (A) An amount equal to all amounts paid or accrued |
3 | | to the taxpayer
as interest or dividends during the |
4 | | taxable year to the extent excluded
from gross income |
5 | | in the computation of taxable income; |
6 | | (B) In the case of (i) an estate, $600; (ii) a |
7 | | trust which, under
its governing instrument, is |
8 | | required to distribute all of its income
currently, |
9 | | $300; and (iii) any other trust, $100, but in each such |
10 | | case,
only to the extent such amount was deducted in |
11 | | the computation of
taxable income; |
12 | | (C) An amount equal to the amount of tax imposed by |
13 | | this Act to the
extent deducted from gross income in |
14 | | the computation of taxable income
for the taxable |
15 | | year; |
16 | | (D) The amount of any net operating loss deduction |
17 | | taken in arriving at
taxable income, other than a net |
18 | | operating loss carried forward from a
taxable year |
19 | | ending prior to December 31, 1986; |
20 | | (E) For taxable years in which a net operating |
21 | | loss carryback or
carryforward from a taxable year |
22 | | ending prior to December 31, 1986 is an
element of |
23 | | taxable income under paragraph (1) of subsection (e) |
24 | | or subparagraph
(E) of paragraph (2) of subsection |
25 | | (e), the amount by which addition
modifications other |
26 | | than those provided by this subparagraph (E) exceeded
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1 | | subtraction modifications in such taxable year, with |
2 | | the following limitations
applied in the order that |
3 | | they are listed: |
4 | | (i) the addition modification relating to the |
5 | | net operating loss
carried back or forward to the |
6 | | taxable year from any taxable year ending
prior to |
7 | | December 31, 1986 shall be reduced by the amount |
8 | | of addition
modification under this subparagraph |
9 | | (E) which related to that net
operating loss and |
10 | | which was taken into account in calculating the |
11 | | base
income of an earlier taxable year, and |
12 | | (ii) 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 not exceed the amount of |
16 | | such carryback or
carryforward; |
17 | | For taxable years in which there is a net |
18 | | operating loss carryback or
carryforward from more |
19 | | than one other taxable year ending prior to December
|
20 | | 31, 1986, the addition modification provided in this |
21 | | subparagraph (E) shall
be the sum of the amounts |
22 | | computed independently under the preceding
provisions |
23 | | of this subparagraph (E) for each such taxable year; |
24 | | (F) For taxable years ending on or after January |
25 | | 1, 1989, an amount
equal to the tax deducted pursuant |
26 | | to Section 164 of the Internal Revenue
Code if the |
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1 | | trust or estate is claiming the same tax for purposes |
2 | | of the
Illinois foreign tax credit under Section 601 |
3 | | of this Act; |
4 | | (G) An amount equal to the amount of the capital |
5 | | gain deduction
allowable under the Internal Revenue |
6 | | Code, to the extent deducted from
gross income in the |
7 | | computation of taxable income; |
8 | | (G-5) For taxable years ending after December 31, |
9 | | 1997, an
amount equal to any eligible remediation |
10 | | costs that the trust or estate
deducted in computing |
11 | | adjusted gross income and for which the trust
or |
12 | | estate claims a credit under subsection (l) of Section |
13 | | 201; |
14 | | (G-10) For taxable years 2001 and thereafter, an |
15 | | amount equal to the
bonus depreciation deduction taken |
16 | | on the taxpayer's federal income tax return for the |
17 | | taxable
year under subsection (k) of Section 168 of |
18 | | the Internal Revenue Code; and |
19 | | (G-11) If the taxpayer sells, transfers, abandons, |
20 | | or otherwise disposes of property for which the |
21 | | taxpayer was required in any taxable year to
make an |
22 | | addition modification under subparagraph (G-10), then |
23 | | an amount equal
to the aggregate amount of the |
24 | | deductions taken in all taxable
years under |
25 | | subparagraph (R) with respect to that property. |
26 | | If the taxpayer continues to own property through |
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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 allowed in any taxable year to make a subtraction |
5 | | modification under subparagraph (R), then an amount |
6 | | equal to that subtraction modification.
|
7 | | The taxpayer is required to make the addition |
8 | | modification under this
subparagraph
only once with |
9 | | respect to any one piece of property; |
10 | | (G-12) An amount equal to the amount otherwise |
11 | | allowed as a deduction in computing base income for |
12 | | interest paid, accrued, or incurred, directly or |
13 | | indirectly, (i) for taxable years ending on or after |
14 | | December 31, 2004, to a foreign person who would be a |
15 | | member of the same unitary business group but for the |
16 | | fact that the foreign person's business activity |
17 | | outside the United States is 80% or more of the foreign |
18 | | person's total business activity and (ii) for taxable |
19 | | years ending on or after December 31, 2008, to a person |
20 | | who would be a member of the same unitary business |
21 | | group but for the fact that the person is prohibited |
22 | | under Section 1501(a)(27) from being included in the |
23 | | unitary business group because he or she is ordinarily |
24 | | required to apportion business income under different |
25 | | subsections of Section 304. The addition modification |
26 | | required by this subparagraph shall be reduced to the |
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1 | | extent that dividends were included in base income of |
2 | | the unitary group for the same taxable year and |
3 | | received by the taxpayer or by a member of the |
4 | | taxpayer's unitary business group (including amounts |
5 | | included in gross income pursuant to Sections 951 |
6 | | through 964 of the Internal Revenue Code and amounts |
7 | | included in gross income under Section 78 of the |
8 | | Internal Revenue Code) with respect to the stock of |
9 | | the same person to whom the interest was paid, |
10 | | accrued, or incurred.
|
11 | | This paragraph shall not apply to the following:
|
12 | | (i) an item of interest paid, accrued, or |
13 | | incurred, directly or indirectly, to a person who |
14 | | is subject in a foreign country or state, other |
15 | | than a state which requires mandatory unitary |
16 | | reporting, to a tax on or measured by net income |
17 | | with respect to such interest; or |
18 | | (ii) an item of interest paid, accrued, or |
19 | | incurred, directly or indirectly, to a person if |
20 | | the taxpayer can establish, based on a |
21 | | preponderance of the evidence, both of the |
22 | | following: |
23 | | (a) the person, during the same taxable |
24 | | year, paid, accrued, or incurred, the interest |
25 | | to a person that is not a related member, and |
26 | | (b) the transaction giving rise to the |
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1 | | interest expense between the taxpayer and the |
2 | | person did not have as a principal purpose the |
3 | | avoidance of Illinois income tax, and is paid |
4 | | pursuant to a contract or agreement that |
5 | | reflects an arm's-length interest rate and |
6 | | terms; or
|
7 | | (iii) the taxpayer can establish, based on |
8 | | clear and convincing evidence, that the interest |
9 | | paid, accrued, or incurred relates to a contract |
10 | | or agreement entered into at arm's-length rates |
11 | | and terms and the principal purpose for the |
12 | | payment is not federal or Illinois tax avoidance; |
13 | | or
|
14 | | (iv) an item of interest paid, accrued, or |
15 | | incurred, directly or indirectly, to a person if |
16 | | the taxpayer establishes by clear and convincing |
17 | | evidence that the adjustments are unreasonable; or |
18 | | if the taxpayer and the Director agree in writing |
19 | | to the application or use of an alternative method |
20 | | of apportionment under Section 304(f).
|
21 | | Nothing in this subsection shall preclude the |
22 | | Director from making any other adjustment |
23 | | otherwise allowed under Section 404 of this Act |
24 | | for any tax year beginning after the effective |
25 | | date of this amendment provided such adjustment is |
26 | | made pursuant to regulation adopted by the |
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1 | | Department and such regulations provide methods |
2 | | and standards by which the Department will utilize |
3 | | its authority under Section 404 of this Act;
|
4 | | (G-13) An amount equal to the amount of intangible |
5 | | expenses and costs otherwise allowed as a deduction in |
6 | | computing base income, and that were paid, accrued, or |
7 | | incurred, directly or indirectly, (i) for taxable |
8 | | years ending on or after December 31, 2004, to a |
9 | | foreign person who would be a member of the same |
10 | | unitary business group but for the fact that the |
11 | | foreign person's business activity outside the United |
12 | | States is 80% or more of that person's total business |
13 | | activity and (ii) for taxable years ending on or after |
14 | | December 31, 2008, to a person who would be a member of |
15 | | the same unitary business group but for the fact that |
16 | | the person is prohibited under Section 1501(a)(27) |
17 | | from being included in the unitary business group |
18 | | because he or she is ordinarily required to apportion |
19 | | business income under different subsections of Section |
20 | | 304. The addition modification required by this |
21 | | subparagraph shall be reduced to the extent that |
22 | | dividends were included in base income of the unitary |
23 | | group for the same taxable year and received by the |
24 | | taxpayer or by a member of the taxpayer's unitary |
25 | | business group (including amounts included in gross |
26 | | income pursuant to Sections 951 through 964 of the |
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1 | | Internal Revenue Code and amounts included in gross |
2 | | income under Section 78 of the Internal Revenue Code) |
3 | | with respect to the stock of the same person to whom |
4 | | the intangible expenses and costs were directly or |
5 | | indirectly paid, incurred, or accrued. The preceding |
6 | | sentence shall not apply to the extent that the same |
7 | | dividends caused a reduction to the addition |
8 | | modification required under Section 203(c)(2)(G-12) of |
9 | | this Act. As used in this subparagraph, the term |
10 | | "intangible expenses and costs" includes: (1) |
11 | | expenses, losses, and costs for or related to the |
12 | | direct or indirect acquisition, use, maintenance or |
13 | | management, ownership, sale, exchange, or any other |
14 | | disposition of intangible property; (2) losses |
15 | | incurred, directly or indirectly, from factoring |
16 | | transactions or discounting transactions; (3) royalty, |
17 | | patent, technical, and copyright fees; (4) licensing |
18 | | fees; and (5) other similar expenses and costs. For |
19 | | purposes of this subparagraph, "intangible property" |
20 | | includes patents, patent applications, trade names, |
21 | | trademarks, service marks, copyrights, mask works, |
22 | | trade secrets, and similar types of intangible assets. |
23 | | This paragraph shall not apply to the following: |
24 | | (i) any item of intangible expenses or costs |
25 | | paid, accrued, or incurred, directly or |
26 | | indirectly, from a transaction with a person who |
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1 | | is subject in a foreign country or state, other |
2 | | than a state which requires mandatory unitary |
3 | | reporting, to a tax on or measured by net income |
4 | | with respect to such item; or |
5 | | (ii) any item of intangible expense or cost |
6 | | paid, accrued, or incurred, directly or |
7 | | indirectly, if the taxpayer can establish, based |
8 | | on a preponderance of the evidence, both of the |
9 | | following: |
10 | | (a) the person during the same taxable |
11 | | year paid, accrued, or incurred, the |
12 | | intangible expense or cost to a person that is |
13 | | not a related member, and |
14 | | (b) the transaction giving rise to the |
15 | | intangible expense or cost between the |
16 | | taxpayer and the person did not have as a |
17 | | principal purpose the avoidance of Illinois |
18 | | income tax, and is paid pursuant to a contract |
19 | | or agreement that reflects arm's-length terms; |
20 | | or |
21 | | (iii) any item of intangible expense or cost |
22 | | paid, accrued, or incurred, directly or |
23 | | indirectly, from a transaction with a person if |
24 | | the taxpayer establishes by clear and convincing |
25 | | evidence, that the adjustments are unreasonable; |
26 | | or if the taxpayer and the Director agree in |
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1 | | writing to the application or use of an |
2 | | alternative method of apportionment under Section |
3 | | 304(f);
|
4 | | Nothing in this subsection shall preclude the |
5 | | Director from making any other adjustment |
6 | | otherwise allowed under Section 404 of this Act |
7 | | for any tax year beginning after the effective |
8 | | date of this amendment provided such adjustment is |
9 | | made pursuant to regulation adopted by the |
10 | | Department and such regulations provide methods |
11 | | and standards by which the Department will utilize |
12 | | its authority under Section 404 of this Act;
|
13 | | (G-14) For taxable years ending on or after |
14 | | December 31, 2008, an amount equal to the amount of |
15 | | insurance premium expenses and costs otherwise allowed |
16 | | as a deduction in computing base income, and that were |
17 | | paid, accrued, or incurred, directly or indirectly, to |
18 | | a person who would be a member of the same unitary |
19 | | business group but for the fact that the person is |
20 | | prohibited under Section 1501(a)(27) from being |
21 | | included in the unitary business group because he or |
22 | | she is ordinarily required to apportion business |
23 | | income under different subsections of Section 304. The |
24 | | addition modification required by this subparagraph |
25 | | shall be reduced to the extent that dividends were |
26 | | included in base income of the unitary group for the |
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1 | | same taxable year and received by the taxpayer or by a |
2 | | member of the taxpayer's unitary business group |
3 | | (including amounts included in gross income under |
4 | | Sections 951 through 964 of the Internal Revenue Code |
5 | | and amounts included in gross income under Section 78 |
6 | | of the Internal Revenue Code) with respect to the |
7 | | stock of the same person to whom the premiums and costs |
8 | | were directly or indirectly paid, incurred, or |
9 | | accrued. The preceding sentence does not apply to the |
10 | | extent that the same dividends caused a reduction to |
11 | | the addition modification required under Section |
12 | | 203(c)(2)(G-12) or Section 203(c)(2)(G-13) of this |
13 | | Act; |
14 | | (G-15) An amount equal to the credit allowable to |
15 | | the taxpayer under Section 218(a) of this Act, |
16 | | determined without regard to Section 218(c) of this |
17 | | Act; |
18 | | (G-16) For taxable years ending on or after |
19 | | December 31, 2017, an amount equal to the deduction |
20 | | allowed under Section 199 of the Internal Revenue Code |
21 | | for the taxable year; |
22 | | and by deducting from the total so obtained the sum of the |
23 | | following
amounts: |
24 | | (H) An amount equal to all amounts included in |
25 | | such total pursuant
to the provisions of Sections |
26 | | 402(a), 402(c), 403(a), 403(b), 406(a), 407(a)
and 408 |
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1 | | of the Internal Revenue Code or included in such total |
2 | | as
distributions under the provisions of any |
3 | | retirement or disability plan for
employees of any |
4 | | governmental agency or unit, or retirement payments to
|
5 | | retired partners, which payments are excluded in |
6 | | computing net earnings
from self employment by Section |
7 | | 1402 of the Internal Revenue Code and
regulations |
8 | | adopted pursuant thereto; |
9 | | (I) The valuation limitation amount; |
10 | | (J) An amount equal to the amount of any tax |
11 | | imposed by this Act
which was refunded to the taxpayer |
12 | | and included in such total for the
taxable year; |
13 | | (K) An amount equal to all amounts included in |
14 | | taxable income as
modified by subparagraphs (A), (B), |
15 | | (C), (D), (E), (F) and (G) which
are exempt from |
16 | | taxation by this State either by reason of its |
17 | | statutes or
Constitution
or by reason of the |
18 | | Constitution, treaties or statutes of the United |
19 | | States;
provided that, in the case of any statute of |
20 | | this State that exempts income
derived from bonds or |
21 | | other obligations from the tax imposed under this Act,
|
22 | | the amount exempted shall be the interest net of bond |
23 | | premium amortization; |
24 | | (L) With the exception of any amounts subtracted |
25 | | under subparagraph
(K),
an amount equal to the sum of |
26 | | all amounts disallowed as
deductions by (i) Sections |
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1 | | 171(a)(2) and 265(a)(2) of the Internal Revenue
Code, |
2 | | and all amounts of expenses allocable
to interest and |
3 | | disallowed as deductions by Section 265(a)(1) of the |
4 | | Internal
Revenue Code;
and (ii) for taxable years
|
5 | | ending on or after August 13, 1999, Sections
|
6 | | 171(a)(2), 265,
280C, and 832(b)(5)(B)(i) of the |
7 | | Internal Revenue Code, plus, (iii) for taxable years |
8 | | ending on or after December 31, 2011, Section |
9 | | 45G(e)(3) of the Internal Revenue Code and, for |
10 | | taxable years ending on or after December 31, 2008, |
11 | | any amount included in gross income under Section 87 |
12 | | of the Internal Revenue Code; the provisions of this
|
13 | | subparagraph are exempt from the provisions of Section |
14 | | 250; |
15 | | (M) An amount equal to those dividends included in |
16 | | such total
which were paid by a corporation which |
17 | | conducts business operations in a River Edge |
18 | | Redevelopment Zone or zones created under the River |
19 | | Edge Redevelopment Zone Act and
conducts substantially |
20 | | all of its operations in a River Edge Redevelopment |
21 | | Zone or zones. This subparagraph (M) is exempt from |
22 | | the provisions of Section 250; |
23 | | (N) An amount equal to any contribution made to a |
24 | | job training
project established pursuant to the Tax |
25 | | Increment Allocation
Redevelopment Act; |
26 | | (O) An amount equal to those dividends included in |
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1 | | such total
that were paid by a corporation that |
2 | | conducts business operations in a
federally designated |
3 | | Foreign Trade Zone or Sub-Zone and that is designated
|
4 | | a High Impact Business located in Illinois; provided |
5 | | that dividends eligible
for the deduction provided in |
6 | | subparagraph (M) of paragraph (2) of this
subsection |
7 | | shall not be eligible for the deduction provided under |
8 | | this
subparagraph (O); |
9 | | (P) 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 | | (Q) For taxable year 1999 and thereafter, an |
15 | | amount equal to the
amount of any
(i) distributions, |
16 | | to the extent includible in gross income for
federal |
17 | | income tax purposes, made to the taxpayer because of
|
18 | | his or her status as a victim of
persecution for racial |
19 | | or religious reasons by Nazi Germany or any other Axis
|
20 | | regime or as an heir of the victim and (ii) items
of |
21 | | income, to the extent
includible in gross income for |
22 | | federal income tax purposes, attributable to,
derived |
23 | | from or in any way related to assets stolen from, |
24 | | hidden from, or
otherwise lost to a victim of
|
25 | | persecution for racial or religious reasons by Nazi
|
26 | | Germany or any other Axis regime
immediately prior to, |
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1 | | during, and immediately after World War II, including,
|
2 | | but
not limited to, interest on the proceeds |
3 | | receivable as insurance
under policies issued to a |
4 | | victim of persecution for racial or religious
reasons |
5 | | by Nazi Germany or any other Axis regime by European |
6 | | insurance
companies
immediately prior to and during |
7 | | World War II;
provided, however, this subtraction from |
8 | | federal adjusted gross income does not
apply to assets |
9 | | acquired with such assets or with the proceeds from |
10 | | the sale of
such assets; provided, further, this |
11 | | paragraph shall only apply to a taxpayer
who was the |
12 | | first recipient of such assets after their recovery |
13 | | and who is a
victim of
persecution for racial or |
14 | | religious reasons
by Nazi Germany or any other Axis |
15 | | regime or as an heir of the victim. The
amount of and |
16 | | the eligibility for any public assistance, benefit, or
|
17 | | similar entitlement is not affected by the inclusion |
18 | | of items (i) and (ii) of
this paragraph in gross income |
19 | | for federal income tax purposes.
This paragraph is |
20 | | exempt from the provisions of Section 250; |
21 | | (R) For taxable years 2001 and thereafter, for the |
22 | | taxable year in
which the bonus depreciation deduction
|
23 | | is taken on the taxpayer's federal income tax return |
24 | | under
subsection (k) of Section 168 of the Internal |
25 | | Revenue Code and for each
applicable taxable year |
26 | | thereafter, an amount equal to "x", where: |
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1 | | (1) "y" equals the amount of the depreciation |
2 | | deduction taken for the
taxable year
on the |
3 | | taxpayer's federal income tax return on property |
4 | | for which the bonus
depreciation deduction
was |
5 | | taken in any year under subsection (k) of Section |
6 | | 168 of the Internal
Revenue Code, but not |
7 | | including the bonus depreciation deduction; |
8 | | (2) for taxable years ending on or before |
9 | | December 31, 2005, "x" equals "y" multiplied by 30 |
10 | | and then divided by 70 (or "y"
multiplied by |
11 | | 0.429); and |
12 | | (3) for taxable years ending after December |
13 | | 31, 2005: |
14 | | (i) for property on which a bonus |
15 | | depreciation deduction of 30% of the adjusted |
16 | | basis was taken, "x" equals "y" multiplied by |
17 | | 30 and then divided by 70 (or "y"
multiplied |
18 | | by 0.429); and |
19 | | (ii) for property on which a bonus |
20 | | depreciation deduction of 50% of the adjusted |
21 | | basis was taken, "x" equals "y" multiplied by |
22 | | 1.0. |
23 | | The aggregate amount deducted under this |
24 | | subparagraph in all taxable
years for any one piece of |
25 | | property may not exceed the amount of the bonus
|
26 | | depreciation deduction
taken on that property on the |
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1 | | taxpayer's federal income tax return under
subsection |
2 | | (k) of Section 168 of the Internal Revenue Code. This |
3 | | subparagraph (R) is exempt from the provisions of |
4 | | Section 250; |
5 | | (S) If the taxpayer sells, transfers, abandons, or |
6 | | otherwise disposes of
property for which the taxpayer |
7 | | was required in any taxable year to make an
addition |
8 | | modification under subparagraph (G-10), then an amount |
9 | | equal to that
addition modification. |
10 | | If the taxpayer continues to own property through |
11 | | the last day of the last tax year for which the |
12 | | taxpayer may claim a depreciation deduction for |
13 | | federal income tax purposes and for which the taxpayer |
14 | | was required in any taxable year to make an addition |
15 | | modification under subparagraph (G-10), then an amount |
16 | | equal to that addition modification.
|
17 | | The taxpayer is allowed to take the deduction |
18 | | under this subparagraph
only once with respect to any |
19 | | one piece of property. |
20 | | This subparagraph (S) is exempt from the |
21 | | provisions of Section 250; |
22 | | (T) The amount of (i) any interest income (net of |
23 | | the deductions allocable thereto) taken into account |
24 | | for the taxable year with respect to a transaction |
25 | | with a taxpayer that is required to make an addition |
26 | | modification with respect to such transaction under |
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1 | | Section 203(a)(2)(D-17), 203(b)(2)(E-12), |
2 | | 203(c)(2)(G-12), or 203(d)(2)(D-7), but not to exceed |
3 | | the amount of such addition modification and
(ii) any |
4 | | income from intangible property (net of the deductions |
5 | | allocable thereto) taken into account for the taxable |
6 | | year with respect to a transaction with a taxpayer |
7 | | that is required to make an addition modification with |
8 | | respect to such transaction under Section |
9 | | 203(a)(2)(D-18), 203(b)(2)(E-13), 203(c)(2)(G-13), or |
10 | | 203(d)(2)(D-8), but not to exceed the amount of such |
11 | | addition modification. This subparagraph (T) is exempt |
12 | | from the provisions of Section 250;
|
13 | | (U) An amount equal to the interest income taken |
14 | | into account for the taxable year (net of the |
15 | | deductions allocable thereto) with respect to |
16 | | transactions with (i) a foreign person who would be a |
17 | | member of the taxpayer's unitary business group but |
18 | | for the fact the foreign person's business activity |
19 | | outside the United States is 80% or more of that |
20 | | person's total business activity and (ii) for taxable |
21 | | years ending on or after December 31, 2008, to a person |
22 | | who would be a member of the same unitary business |
23 | | group but for the fact that the person is prohibited |
24 | | under Section 1501(a)(27) from being included in the |
25 | | unitary business group because he or she is ordinarily |
26 | | required to apportion business income under different |
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1 | | subsections of Section 304, but not to exceed the |
2 | | addition modification required to be made for the same |
3 | | taxable year under Section 203(c)(2)(G-12) for |
4 | | interest paid, accrued, or incurred, directly or |
5 | | indirectly, to the same person. This subparagraph (U) |
6 | | is exempt from the provisions of Section 250; |
7 | | (V) An amount equal to the income from intangible |
8 | | property taken into account for the taxable year (net |
9 | | of the deductions allocable thereto) with respect to |
10 | | transactions with (i) a foreign person who would be a |
11 | | member of the taxpayer's unitary business group but |
12 | | for the fact that the foreign person's business |
13 | | activity outside the United States is 80% or more of |
14 | | that person's total business activity and (ii) for |
15 | | taxable years ending on or after December 31, 2008, to |
16 | | a person who would be a member of the same unitary |
17 | | business group but for the fact that the person is |
18 | | prohibited under Section 1501(a)(27) from being |
19 | | included in the unitary business group because he or |
20 | | she is ordinarily required to apportion business |
21 | | income under different subsections of Section 304, but |
22 | | not to exceed the addition modification required to be |
23 | | made for the same taxable year under Section |
24 | | 203(c)(2)(G-13) for intangible expenses and costs |
25 | | paid, accrued, or incurred, directly or indirectly, to |
26 | | the same foreign person. This subparagraph (V) is |
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1 | | exempt from the provisions of Section 250;
|
2 | | (W) in the case of an estate, an amount equal to |
3 | | all amounts included in such total pursuant to the |
4 | | provisions of Section 111 of the Internal Revenue Code |
5 | | as a recovery of items previously deducted by the |
6 | | decedent from adjusted gross income in the computation |
7 | | of taxable income. This subparagraph (W) is exempt |
8 | | from Section 250; |
9 | | (X) an amount equal to the refund included in such |
10 | | total of any tax deducted for federal income tax |
11 | | purposes, to the extent that deduction was added back |
12 | | under subparagraph (F). This subparagraph (X) is |
13 | | exempt from the provisions of Section 250; |
14 | | (Y) For taxable years ending on or after December |
15 | | 31, 2011, in the case of a taxpayer who was required to |
16 | | add back any insurance premiums under Section |
17 | | 203(c)(2)(G-14), such taxpayer may elect to subtract |
18 | | that part of a reimbursement received from the |
19 | | insurance company equal to the amount of the expense |
20 | | or loss (including expenses incurred by the insurance |
21 | | company) that would have been taken into account as a |
22 | | deduction for federal income tax purposes if the |
23 | | expense or loss had been uninsured. If a taxpayer |
24 | | makes the election provided for by this subparagraph |
25 | | (Y), the insurer to which the premiums were paid must |
26 | | add back to income the amount subtracted by the |
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1 | | taxpayer pursuant to this subparagraph (Y). This |
2 | | subparagraph (Y) is exempt from the provisions of |
3 | | Section 250; and |
4 | | (Z) For taxable years beginning after December 31, |
5 | | 2018 and before January 1, 2026, the amount of excess |
6 | | business loss of the taxpayer disallowed as a |
7 | | deduction by Section 461(l)(1)(B) of the Internal |
8 | | Revenue Code. |
9 | | (3) Limitation. The amount of any modification |
10 | | otherwise required
under this subsection shall, under |
11 | | regulations prescribed by the
Department, be adjusted by |
12 | | any amounts included therein which were
properly paid, |
13 | | credited, or required to be distributed, or permanently |
14 | | set
aside for charitable purposes pursuant to Internal |
15 | | Revenue Code Section
642(c) during the taxable year. |
16 | | (d) Partnerships. |
17 | | (1) In general. In the case of a partnership, 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. The taxable income referred to in |
21 | | paragraph (1)
shall be modified by adding thereto the sum |
22 | | of the following amounts: |
23 | | (A) An amount equal to all amounts paid or accrued |
24 | | to the taxpayer as
interest or dividends during the |
25 | | taxable year to the extent excluded from
gross income |
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1 | | in the computation of taxable income; |
2 | | (B) An amount equal to the amount of tax imposed by |
3 | | this Act to the
extent deducted from gross income for |
4 | | the taxable year; |
5 | | (C) The amount of deductions allowed to the |
6 | | partnership pursuant to
Section 707 (c) of the |
7 | | Internal Revenue Code in calculating its taxable |
8 | | income; |
9 | | (D) An amount equal to the amount of the capital |
10 | | gain deduction
allowable under the Internal Revenue |
11 | | Code, to the extent deducted from
gross income in the |
12 | | computation of taxable income; |
13 | | (D-5) For taxable years 2001 and thereafter, an |
14 | | amount equal to the
bonus depreciation deduction taken |
15 | | on the taxpayer's federal income tax return for the |
16 | | taxable
year under subsection (k) of Section 168 of |
17 | | the Internal Revenue Code; |
18 | | (D-6) If the taxpayer sells, transfers, abandons, |
19 | | or otherwise disposes of
property for which the |
20 | | taxpayer was required in any taxable year to make an
|
21 | | addition modification under subparagraph (D-5), then |
22 | | an amount equal to the
aggregate amount of the |
23 | | deductions taken in all taxable years
under |
24 | | subparagraph (O) with respect to that property. |
25 | | If the taxpayer continues to own property through |
26 | | the last day of the last tax year for which the |
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1 | | taxpayer may claim a depreciation deduction for |
2 | | federal income tax purposes and for which the taxpayer |
3 | | was allowed in any taxable year to make a subtraction |
4 | | modification under subparagraph (O), then an amount |
5 | | equal to that subtraction modification.
|
6 | | The taxpayer is required to make the addition |
7 | | modification under this
subparagraph
only once with |
8 | | respect to any one piece of property; |
9 | | (D-7) An amount equal to the amount otherwise |
10 | | allowed as a deduction in computing base income for |
11 | | interest paid, accrued, or incurred, directly or |
12 | | indirectly, (i) for taxable years ending on or after |
13 | | December 31, 2004, to a foreign person who would be a |
14 | | member of the same unitary business group but for the |
15 | | fact the foreign person's business activity outside |
16 | | the United States is 80% or more of the foreign |
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. The addition modification |
25 | | required by this subparagraph shall be reduced to the |
26 | | extent that dividends were included in base income of |
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1 | | the unitary group for the same taxable year and |
2 | | received by the taxpayer or by a member of the |
3 | | taxpayer's unitary business group (including amounts |
4 | | included in gross income pursuant to Sections 951 |
5 | | through 964 of the Internal Revenue Code and amounts |
6 | | included in gross income under Section 78 of the |
7 | | Internal Revenue Code) with respect to the stock of |
8 | | the same person to whom the interest was paid, |
9 | | accrued, or incurred.
|
10 | | This paragraph shall not apply to the following:
|
11 | | (i) an item of interest paid, accrued, or |
12 | | incurred, directly or indirectly, to a person who |
13 | | is subject in a foreign country or state, other |
14 | | than a state which requires mandatory unitary |
15 | | reporting, to a tax on or measured by net income |
16 | | with respect to such interest; or |
17 | | (ii) an item of interest paid, accrued, or |
18 | | incurred, directly or indirectly, to a person if |
19 | | the taxpayer can establish, based on a |
20 | | preponderance of the evidence, both of the |
21 | | following: |
22 | | (a) the person, during the same taxable |
23 | | year, paid, accrued, or incurred, the interest |
24 | | to a person that is not a related member, and |
25 | | (b) the transaction giving rise to the |
26 | | interest expense between the taxpayer and the |
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1 | | person did not have as a principal purpose the |
2 | | avoidance of Illinois income tax, and is paid |
3 | | pursuant to a contract or agreement that |
4 | | reflects an arm's-length interest rate and |
5 | | terms; or
|
6 | | (iii) the taxpayer can establish, based on |
7 | | clear and convincing evidence, that the interest |
8 | | paid, accrued, or incurred relates to a contract |
9 | | or agreement entered into at arm's-length rates |
10 | | and terms and the principal purpose for the |
11 | | payment is not federal or Illinois tax avoidance; |
12 | | or
|
13 | | (iv) an item of interest paid, accrued, or |
14 | | incurred, directly or indirectly, to a person if |
15 | | the taxpayer establishes by clear and convincing |
16 | | evidence that the adjustments are unreasonable; or |
17 | | if the taxpayer and the Director agree in writing |
18 | | to the application or use of an alternative method |
19 | | of apportionment under Section 304(f).
|
20 | | Nothing in this subsection shall preclude the |
21 | | Director from making any other adjustment |
22 | | otherwise allowed under Section 404 of this Act |
23 | | for any tax year beginning after the effective |
24 | | date of this amendment provided such adjustment is |
25 | | made pursuant to regulation adopted by the |
26 | | Department and such regulations provide methods |
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1 | | and standards by which the Department will utilize |
2 | | its authority under Section 404 of this Act; and
|
3 | | (D-8) An amount equal to the amount of intangible |
4 | | expenses and costs otherwise allowed as a deduction in |
5 | | computing base income, and that were paid, accrued, or |
6 | | incurred, directly or indirectly, (i) for taxable |
7 | | years ending on or after December 31, 2004, to a |
8 | | foreign person who would be a member of the same |
9 | | unitary business group but for the fact that the |
10 | | foreign person's business activity outside the United |
11 | | States is 80% or more of that person's total business |
12 | | activity and (ii) for taxable years ending on or after |
13 | | December 31, 2008, to a person who would be a member of |
14 | | the same unitary business group but for the fact that |
15 | | the person is prohibited under Section 1501(a)(27) |
16 | | from being included in the unitary business group |
17 | | because he or she is ordinarily required to apportion |
18 | | business income under different subsections of Section |
19 | | 304. The addition modification required by this |
20 | | subparagraph shall be reduced to the extent that |
21 | | dividends were included in base income of the unitary |
22 | | group for the same taxable year and received by the |
23 | | taxpayer or by a member of the taxpayer's unitary |
24 | | business group (including amounts included in gross |
25 | | income pursuant to Sections 951 through 964 of the |
26 | | Internal Revenue Code and amounts included in gross |
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1 | | income under Section 78 of the Internal Revenue Code) |
2 | | with respect to the stock of the same person to whom |
3 | | the intangible expenses and costs were directly or |
4 | | indirectly paid, incurred or accrued. The preceding |
5 | | sentence shall not apply to the extent that the same |
6 | | dividends caused a reduction to the addition |
7 | | modification required under Section 203(d)(2)(D-7) of |
8 | | this Act. As used in this subparagraph, the term |
9 | | "intangible expenses and costs" includes (1) expenses, |
10 | | losses, and costs for, or related to, the direct or |
11 | | indirect acquisition, use, maintenance or management, |
12 | | ownership, sale, exchange, or any other disposition of |
13 | | intangible property; (2) losses incurred, directly or |
14 | | indirectly, from factoring transactions or discounting |
15 | | transactions; (3) royalty, patent, technical, and |
16 | | copyright fees; (4) licensing fees; and (5) other |
17 | | similar expenses and costs. For purposes of this |
18 | | subparagraph, "intangible property" includes patents, |
19 | | patent applications, trade names, trademarks, service |
20 | | marks, copyrights, mask works, trade secrets, and |
21 | | similar types of intangible assets; |
22 | | This paragraph shall not apply to the following: |
23 | | (i) any item of intangible expenses or costs |
24 | | paid, accrued, or incurred, directly or |
25 | | indirectly, from a transaction with a person who |
26 | | is subject in a foreign country or state, other |
|
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1 | | than a state which requires mandatory unitary |
2 | | reporting, to a tax on or measured by net income |
3 | | with respect to such item; or |
4 | | (ii) any item of intangible expense or cost |
5 | | paid, accrued, or incurred, directly or |
6 | | indirectly, if the taxpayer can establish, based |
7 | | on a preponderance of the evidence, both of the |
8 | | following: |
9 | | (a) the person during the same taxable |
10 | | year paid, accrued, or incurred, the |
11 | | intangible expense or cost to a person that is |
12 | | not a related member, and |
13 | | (b) the transaction giving rise to the |
14 | | intangible expense or cost between the |
15 | | taxpayer and the person did not have as a |
16 | | principal purpose the avoidance of Illinois |
17 | | income tax, and is paid pursuant to a contract |
18 | | or agreement that reflects arm's-length terms; |
19 | | or |
20 | | (iii) any item of intangible expense or cost |
21 | | paid, accrued, or incurred, directly or |
22 | | indirectly, from a transaction with a person if |
23 | | the taxpayer establishes by clear and convincing |
24 | | evidence, that the adjustments are unreasonable; |
25 | | or if the taxpayer and the Director agree in |
26 | | writing to the application or use of an |
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1 | | alternative method of apportionment under Section |
2 | | 304(f);
|
3 | | Nothing in this subsection shall preclude the |
4 | | Director from making any other adjustment |
5 | | otherwise allowed under Section 404 of this Act |
6 | | for any tax year beginning after the effective |
7 | | date of this amendment provided such adjustment is |
8 | | made pursuant to regulation adopted by the |
9 | | Department and such regulations provide methods |
10 | | and standards by which the Department will utilize |
11 | | its authority under Section 404 of this Act;
|
12 | | (D-9) For taxable years ending on or after |
13 | | December 31, 2008, an amount equal to the amount of |
14 | | insurance premium expenses and costs otherwise allowed |
15 | | as a deduction in computing base income, and that were |
16 | | paid, accrued, or incurred, directly or indirectly, 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. The |
23 | | addition modification required by this subparagraph |
24 | | shall be reduced to the extent that dividends were |
25 | | included in base income of the unitary group for the |
26 | | same taxable year and received by the taxpayer or by a |
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1 | | member of the taxpayer's unitary business group |
2 | | (including amounts included in gross income under |
3 | | Sections 951 through 964 of the Internal Revenue Code |
4 | | and amounts included in gross income under Section 78 |
5 | | of the Internal Revenue Code) with respect to the |
6 | | stock of the same person to whom the premiums and costs |
7 | | were directly or indirectly paid, incurred, or |
8 | | accrued. The preceding sentence does not apply to the |
9 | | extent that the same dividends caused a reduction to |
10 | | the addition modification required under Section |
11 | | 203(d)(2)(D-7) or Section 203(d)(2)(D-8) of this Act; |
12 | | (D-10) An amount equal to the credit allowable to |
13 | | the taxpayer under Section 218(a) of this Act, |
14 | | determined without regard to Section 218(c) of this |
15 | | Act; |
16 | | (D-11) For taxable years ending on or after |
17 | | December 31, 2017, an amount equal to the deduction |
18 | | allowed under Section 199 of the Internal Revenue Code |
19 | | for the taxable year; |
20 | | and by deducting from the total so obtained the following |
21 | | amounts: |
22 | | (E) The valuation limitation amount; |
23 | | (F) An amount equal to the amount of any tax |
24 | | imposed by this Act which
was refunded to the taxpayer |
25 | | and included in such total for the taxable year; |
26 | | (G) An amount equal to all amounts included in |
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1 | | taxable income as
modified by subparagraphs (A), (B), |
2 | | (C) and (D) which are exempt from
taxation by this |
3 | | State either by reason of its statutes or Constitution |
4 | | or
by reason of
the Constitution, treaties or statutes |
5 | | of the United States;
provided that, in the case of any |
6 | | statute of this State that exempts income
derived from |
7 | | bonds or other obligations from the tax imposed under |
8 | | this Act,
the amount exempted shall be the interest |
9 | | net of bond premium amortization; |
10 | | (H) Any income of the partnership which |
11 | | constitutes personal service
income as defined in |
12 | | Section 1348(b)(1) of the Internal Revenue Code (as
in |
13 | | effect December 31, 1981) or a reasonable allowance |
14 | | for compensation
paid or accrued for services rendered |
15 | | by partners to the partnership,
whichever is greater; |
16 | | this subparagraph (H) is exempt from the provisions of |
17 | | Section 250; |
18 | | (I) An amount equal to all amounts of income |
19 | | distributable to an entity
subject to the Personal |
20 | | Property Tax Replacement Income Tax imposed by
|
21 | | subsections (c) and (d) of Section 201 of this Act |
22 | | including amounts
distributable to organizations |
23 | | exempt from federal income tax by reason of
Section |
24 | | 501(a) of the Internal Revenue Code; this subparagraph |
25 | | (I) is exempt from the provisions of Section 250; |
26 | | (J) With the exception of any amounts subtracted |
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1 | | under subparagraph
(G),
an amount equal to the sum of |
2 | | all amounts disallowed as deductions
by (i) Sections |
3 | | 171(a)(2) , and 265(a)(2) of the Internal Revenue Code, |
4 | | and all amounts of expenses allocable to
interest and |
5 | | disallowed as deductions by Section 265(a)(1) of the |
6 | | Internal
Revenue Code;
and (ii) for taxable years
|
7 | | ending on or after August 13, 1999, Sections
|
8 | | 171(a)(2), 265,
280C, and 832(b)(5)(B)(i) of the |
9 | | Internal Revenue Code, plus, (iii) for taxable years |
10 | | ending on or after December 31, 2011, Section |
11 | | 45G(e)(3) of the Internal Revenue Code and, for |
12 | | taxable years ending on or after December 31, 2008, |
13 | | any amount included in gross income under Section 87 |
14 | | of the Internal Revenue Code; the provisions of this
|
15 | | subparagraph are exempt from the provisions of Section |
16 | | 250; |
17 | | (K) An amount equal to those dividends included in |
18 | | such total which were
paid by a corporation which |
19 | | conducts business operations in a River Edge |
20 | | Redevelopment Zone or zones created under the River |
21 | | Edge Redevelopment Zone Act and
conducts substantially |
22 | | all of its operations
from a River Edge Redevelopment |
23 | | Zone or zones. This subparagraph (K) is exempt from |
24 | | the provisions of Section 250; |
25 | | (L) An amount equal to any contribution made to a |
26 | | job training project
established pursuant to the Real |
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1 | | Property Tax Increment Allocation
Redevelopment Act; |
2 | | (M) An amount equal to those dividends included in |
3 | | such total
that were paid by a corporation that |
4 | | conducts business operations in a
federally designated |
5 | | Foreign Trade Zone or Sub-Zone and that is designated |
6 | | a
High Impact Business located in Illinois; provided |
7 | | that dividends eligible
for the deduction provided in |
8 | | subparagraph (K) of paragraph (2) of this
subsection |
9 | | shall not be eligible for the deduction provided under |
10 | | this
subparagraph (M); |
11 | | (N) An amount equal to the amount of the deduction |
12 | | used to compute the
federal income tax credit for |
13 | | restoration of substantial amounts held under
claim of |
14 | | right for the taxable year pursuant to Section 1341 of |
15 | | the
Internal Revenue Code; |
16 | | (O) For taxable years 2001 and thereafter, for the |
17 | | taxable year in
which the bonus depreciation deduction
|
18 | | is taken on the taxpayer's federal income tax return |
19 | | under
subsection (k) of Section 168 of the Internal |
20 | | Revenue Code and for each
applicable taxable year |
21 | | thereafter, an amount equal to "x", where: |
22 | | (1) "y" equals the amount of the depreciation |
23 | | deduction taken for the
taxable year
on the |
24 | | taxpayer's federal income tax return on property |
25 | | for which the bonus
depreciation deduction
was |
26 | | taken in any year under subsection (k) of Section |
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1 | | 168 of the Internal
Revenue Code, but not |
2 | | including the bonus depreciation deduction; |
3 | | (2) for taxable years ending on or before |
4 | | December 31, 2005, "x" equals "y" multiplied by 30 |
5 | | and then divided by 70 (or "y"
multiplied by |
6 | | 0.429); and |
7 | | (3) for taxable years ending after December |
8 | | 31, 2005: |
9 | | (i) for property on which a bonus |
10 | | depreciation deduction of 30% of the adjusted |
11 | | basis was taken, "x" equals "y" multiplied by |
12 | | 30 and then divided by 70 (or "y"
multiplied |
13 | | by 0.429); and |
14 | | (ii) for property on which a bonus |
15 | | depreciation deduction of 50% of the adjusted |
16 | | basis was taken, "x" equals "y" multiplied by |
17 | | 1.0. |
18 | | The aggregate amount deducted under this |
19 | | subparagraph in all taxable
years for any one piece of |
20 | | property may not exceed the amount of the bonus
|
21 | | depreciation deduction
taken on that property on the |
22 | | taxpayer's federal income tax return under
subsection |
23 | | (k) of Section 168 of the Internal Revenue Code. This |
24 | | subparagraph (O) is exempt from the provisions of |
25 | | Section 250; |
26 | | (P) If the taxpayer sells, transfers, abandons, or |
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1 | | otherwise disposes of
property for which the taxpayer |
2 | | was required in any taxable year to make an
addition |
3 | | modification under subparagraph (D-5), then an amount |
4 | | equal to that
addition modification. |
5 | | If the taxpayer continues to own property through |
6 | | the last day of the last tax year for which the |
7 | | taxpayer may claim a depreciation deduction for |
8 | | federal income tax purposes and for which the taxpayer |
9 | | was required in any taxable year to make an addition |
10 | | modification under subparagraph (D-5), then an amount |
11 | | equal to that addition modification.
|
12 | | The taxpayer is allowed to take the deduction |
13 | | under this subparagraph
only once with respect to any |
14 | | one piece of property. |
15 | | This subparagraph (P) is exempt from the |
16 | | provisions of Section 250; |
17 | | (Q) The amount of (i) any interest income (net of |
18 | | the deductions allocable thereto) taken into account |
19 | | for the taxable year with respect to a transaction |
20 | | with a taxpayer that is required to make an addition |
21 | | modification with respect to such transaction under |
22 | | Section 203(a)(2)(D-17), 203(b)(2)(E-12), |
23 | | 203(c)(2)(G-12), or 203(d)(2)(D-7), but not to exceed |
24 | | the amount of such addition modification and
(ii) any |
25 | | income from intangible property (net of the deductions |
26 | | allocable thereto) taken into account for the taxable |
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1 | | year with respect to a transaction with a taxpayer |
2 | | that is required to make an addition modification with |
3 | | respect to such transaction under Section |
4 | | 203(a)(2)(D-18), 203(b)(2)(E-13), 203(c)(2)(G-13), or |
5 | | 203(d)(2)(D-8), but not to exceed the amount of such |
6 | | addition modification. This subparagraph (Q) is exempt |
7 | | from Section 250;
|
8 | | (R) An amount equal to the interest income taken |
9 | | into account for the taxable year (net of the |
10 | | 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-7) for interest paid, accrued, or |
26 | | incurred, directly or indirectly, to the same person. |
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1 | | This subparagraph (R) is exempt from Section 250; |
2 | | (S) An amount equal to the income from intangible |
3 | | property taken into account for the taxable year (net |
4 | | of the deductions allocable thereto) with respect to |
5 | | transactions with (i) a foreign person who would be a |
6 | | member of the taxpayer's unitary business group but |
7 | | for the fact that the foreign person's business |
8 | | activity outside the United States is 80% or more of |
9 | | that person's total business activity and (ii) for |
10 | | taxable years ending on or after December 31, 2008, to |
11 | | a person who would be a member of the same unitary |
12 | | business group but for the fact that the person is |
13 | | prohibited under Section 1501(a)(27) from being |
14 | | included in the unitary business group because he or |
15 | | she is ordinarily required to apportion business |
16 | | income under different subsections of Section 304, but |
17 | | not to exceed the addition modification required to be |
18 | | made for the same taxable year under Section |
19 | | 203(d)(2)(D-8) for intangible expenses and costs paid, |
20 | | accrued, or incurred, directly or indirectly, to the |
21 | | same person. This subparagraph (S) is exempt from |
22 | | Section 250; and
|
23 | | (T) For taxable years ending on or after December |
24 | | 31, 2011, in the case of a taxpayer who was required to |
25 | | add back any insurance premiums under Section |
26 | | 203(d)(2)(D-9), such taxpayer may elect to subtract |
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1 | | that part of a reimbursement received from the |
2 | | insurance company equal to the amount of the expense |
3 | | or loss (including expenses incurred by the insurance |
4 | | company) that would have been taken into account as a |
5 | | deduction for federal income tax purposes if the |
6 | | expense or loss had been uninsured. If a taxpayer |
7 | | makes the election provided for by this subparagraph |
8 | | (T), the insurer to which the premiums were paid must |
9 | | add back to income the amount subtracted by the |
10 | | taxpayer pursuant to this subparagraph (T). This |
11 | | subparagraph (T) is exempt from the provisions of |
12 | | Section 250. |
13 | | (e) Gross income; adjusted gross income; taxable income. |
14 | | (1) In general. Subject to the provisions of paragraph |
15 | | (2) and
subsection (b)(3), for purposes of this Section |
16 | | and Section 803(e), a
taxpayer's gross income, adjusted |
17 | | gross income, or taxable income for
the taxable year shall |
18 | | mean the amount of gross income, adjusted gross
income or |
19 | | taxable income properly reportable for federal income tax
|
20 | | purposes for the taxable year under the provisions of the |
21 | | Internal
Revenue Code. Taxable income may be less than |
22 | | zero. However, for taxable
years ending on or after |
23 | | December 31, 1986, net operating loss
carryforwards from |
24 | | taxable years ending prior to December 31, 1986, may not
|
25 | | exceed the sum of federal taxable income for the taxable |
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1 | | year before net
operating loss deduction, plus the excess |
2 | | of addition modifications over
subtraction modifications |
3 | | for the taxable year. For taxable years ending
prior to |
4 | | December 31, 1986, taxable income may never be an amount |
5 | | in excess
of the net operating loss for the taxable year as |
6 | | defined in subsections
(c) and (d) of Section 172 of the |
7 | | Internal Revenue Code, provided that when
taxable income |
8 | | of a corporation (other than a Subchapter S corporation),
|
9 | | trust, or estate is less than zero and addition |
10 | | modifications, other than
those provided by subparagraph |
11 | | (E) of paragraph (2) of subsection (b) for
corporations or |
12 | | subparagraph (E) of paragraph (2) of subsection (c) for
|
13 | | trusts and estates, exceed subtraction modifications, an |
14 | | addition
modification must be made under those |
15 | | subparagraphs for any other taxable
year to which the |
16 | | taxable income less than zero (net operating loss) is
|
17 | | applied under Section 172 of the Internal Revenue Code or |
18 | | under
subparagraph (E) of paragraph (2) of this subsection |
19 | | (e) applied in
conjunction with Section 172 of the |
20 | | Internal Revenue Code. |
21 | | (2) Special rule. For purposes of paragraph (1) of |
22 | | this subsection,
the taxable income properly reportable |
23 | | for federal income tax purposes
shall mean: |
24 | | (A) Certain life insurance companies. In the case |
25 | | of a life
insurance company subject to the tax imposed |
26 | | by Section 801 of the
Internal Revenue Code, life |
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1 | | insurance company taxable income, plus the
amount of |
2 | | distribution from pre-1984 policyholder surplus |
3 | | accounts as
calculated under Section 815a of the |
4 | | Internal Revenue Code; |
5 | | (B) Certain other insurance companies. In the case |
6 | | of mutual
insurance companies subject to the tax |
7 | | imposed by Section 831 of the
Internal Revenue Code, |
8 | | insurance company taxable income; |
9 | | (C) Regulated investment companies. In the case of |
10 | | a regulated
investment company subject to the tax |
11 | | imposed by Section 852 of the
Internal Revenue Code, |
12 | | investment company taxable income; |
13 | | (D) Real estate investment trusts. In the case of |
14 | | a real estate
investment trust subject to the tax |
15 | | imposed by Section 857 of the
Internal Revenue Code, |
16 | | real estate investment trust taxable income; |
17 | | (E) Consolidated corporations. In the case of a |
18 | | corporation which
is a member of an affiliated group |
19 | | of corporations filing a consolidated
income tax |
20 | | return for the taxable year for federal income tax |
21 | | purposes,
taxable income determined as if such |
22 | | corporation had filed a separate
return for federal |
23 | | income tax purposes for the taxable year and each
|
24 | | preceding taxable year for which it was a member of an |
25 | | affiliated group.
For purposes of this subparagraph, |
26 | | the taxpayer's separate taxable
income shall be |
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1 | | determined as if the election provided by Section
|
2 | | 243(b)(2) of the Internal Revenue Code had been in |
3 | | effect for all such years; |
4 | | (F) Cooperatives. In the case of a cooperative |
5 | | corporation or
association, the taxable income of such |
6 | | organization determined in
accordance with the |
7 | | provisions of Section 1381 through 1388 of the
|
8 | | Internal Revenue Code, but without regard to the |
9 | | prohibition against offsetting losses from patronage |
10 | | activities against income from nonpatronage |
11 | | activities; except that a cooperative corporation or |
12 | | association may make an election to follow its federal |
13 | | income tax treatment of patronage losses and |
14 | | nonpatronage losses. In the event such election is |
15 | | made, such losses shall be computed and carried over |
16 | | in a manner consistent with subsection (a) of Section |
17 | | 207 of this Act and apportioned by the apportionment |
18 | | factor reported by the cooperative on its Illinois |
19 | | income tax return filed for the taxable year in which |
20 | | the losses are incurred. The election shall be |
21 | | effective for all taxable years with original returns |
22 | | due on or after the date of the election. In addition, |
23 | | the cooperative may file an amended return or returns, |
24 | | as allowed under this Act, to provide that the |
25 | | election shall be effective for losses incurred or |
26 | | carried forward for taxable years occurring prior to |
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1 | | the date of the election. Once made, the election may |
2 | | only be revoked upon approval of the Director. The |
3 | | Department shall adopt rules setting forth |
4 | | requirements for documenting the elections and any |
5 | | resulting Illinois net loss and the standards to be |
6 | | used by the Director in evaluating requests to revoke |
7 | | elections. Public Act 96-932 is declaratory of |
8 | | existing law; |
9 | | (G) Subchapter S corporations. In the case of: (i) |
10 | | a Subchapter S
corporation for which there is in |
11 | | effect an election for the taxable year
under Section |
12 | | 1362 of the Internal Revenue Code, the taxable income |
13 | | of such
corporation determined in accordance with |
14 | | Section 1363(b) of the Internal
Revenue Code, except |
15 | | that taxable income shall take into
account those |
16 | | items which are required by Section 1363(b)(1) of the
|
17 | | Internal Revenue Code to be separately stated; and |
18 | | (ii) a Subchapter
S corporation for which there is in |
19 | | effect a federal election to opt out of
the provisions |
20 | | of the Subchapter S Revision Act of 1982 and have |
21 | | applied
instead the prior federal Subchapter S rules |
22 | | as in effect on July 1, 1982,
the taxable income of |
23 | | such corporation determined in accordance with the
|
24 | | federal Subchapter S rules as in effect on July 1, |
25 | | 1982; and |
26 | | (H) Partnerships. In the case of a partnership, |
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1 | | taxable income
determined in accordance with Section |
2 | | 703 of the Internal Revenue Code,
except that taxable |
3 | | income shall take into account those items which are
|
4 | | required by Section 703(a)(1) to be separately stated |
5 | | but which would be
taken into account by an individual |
6 | | in calculating his taxable income. |
7 | | (3) Recapture of business expenses on disposition of |
8 | | asset or business. Notwithstanding any other law to the |
9 | | contrary, if in prior years income from an asset or |
10 | | business has been classified as business income and in a |
11 | | later year is demonstrated to be non-business income, then |
12 | | all expenses, without limitation, deducted in such later |
13 | | year and in the 2 immediately preceding taxable years |
14 | | related to that asset or business that generated the |
15 | | non-business income shall be added back and recaptured as |
16 | | business income in the year of the disposition of the |
17 | | asset or business. Such amount shall be apportioned to |
18 | | Illinois using the greater of the apportionment fraction |
19 | | computed for the business under Section 304 of this Act |
20 | | for the taxable year or the average of the apportionment |
21 | | fractions computed for the business under Section 304 of |
22 | | this Act for the taxable year and for the 2 immediately |
23 | | preceding taxable years.
|
24 | | (f) Valuation limitation amount. |
25 | | (1) In general. The valuation limitation amount |
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1 | | referred to in
subsections (a)(2)(G), (c)(2)(I) and |
2 | | (d)(2)(E) is an amount equal to: |
3 | | (A) The sum of the pre-August 1, 1969 appreciation |
4 | | amounts (to the
extent consisting of gain reportable |
5 | | under the provisions of Section
1245 or 1250 of the |
6 | | Internal Revenue Code) for all property in respect
of |
7 | | which such gain was reported for the taxable year; |
8 | | plus |
9 | | (B) The lesser of (i) the sum of the pre-August 1, |
10 | | 1969 appreciation
amounts (to the extent consisting of |
11 | | capital gain) for all property in
respect of which |
12 | | such gain was reported for federal income tax purposes
|
13 | | for the taxable year, or (ii) the net capital gain for |
14 | | the taxable year,
reduced in either case by any amount |
15 | | of such gain included in the amount
determined under |
16 | | subsection (a)(2)(F) or (c)(2)(H). |
17 | | (2) Pre-August 1, 1969 appreciation amount. |
18 | | (A) If the fair market value of property referred |
19 | | to in paragraph
(1) was readily ascertainable on |
20 | | August 1, 1969, the pre-August 1, 1969
appreciation |
21 | | amount for such property is the lesser of (i) the |
22 | | excess of
such fair market value over the taxpayer's |
23 | | basis (for determining gain)
for such property on that |
24 | | date (determined under the Internal Revenue
Code as in |
25 | | effect on that date), or (ii) the total gain realized |
26 | | and
reportable for federal income tax purposes in |
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1 | | respect of the sale,
exchange or other disposition of |
2 | | such property. |
3 | | (B) If the fair market value of property referred |
4 | | to in paragraph
(1) was not readily ascertainable on |
5 | | August 1, 1969, the pre-August 1,
1969 appreciation |
6 | | amount for such property is that amount which bears
|
7 | | the same ratio to the total gain reported in respect of |
8 | | the property for
federal income tax purposes for the |
9 | | taxable year, as the number of full
calendar months in |
10 | | that part of the taxpayer's holding period for the
|
11 | | property ending July 31, 1969 bears to the number of |
12 | | full calendar
months in the taxpayer's entire holding |
13 | | period for the
property. |
14 | | (C) The Department shall prescribe such |
15 | | regulations as may be
necessary to carry out the |
16 | | purposes of this paragraph. |
17 | | (g) Double deductions. Unless specifically provided |
18 | | otherwise, nothing
in this Section shall permit the same item |
19 | | to be deducted more than once. |
20 | | (h) Legislative intention. Except as expressly provided by |
21 | | this
Section there shall be no modifications or limitations on |
22 | | the amounts
of income, gain, loss or deduction taken into |
23 | | account in determining
gross income, adjusted gross income or |
24 | | taxable income for federal income
tax purposes for the taxable |
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1 | | year, or in the amount of such items
entering into the |
2 | | computation of base income and net income under this
Act for |
3 | | such taxable year, whether in respect of property values as of
|
4 | | August 1, 1969 or otherwise. |
5 | | (Source: P.A. 100-22, eff. 7-6-17; 100-905, eff. 8-17-18; |
6 | | 101-9, eff. 6-5-19; 101-81, eff. 7-12-19; revised 9-20-19.)
|
7 | | (35 ILCS 5/901)
|
8 | | (Text of Section without the changes made by P.A. 101-8, |
9 | | which did not take effect (see Section 99 of P.A. 101-8)) |
10 | | Sec. 901. Collection authority. |
11 | | (a) In general. The Department shall collect the taxes |
12 | | imposed by this Act. The Department
shall collect certified |
13 | | past due child support amounts under Section 2505-650
of the |
14 | | Department of Revenue Law of the
Civil Administrative Code of |
15 | | Illinois. Except as
provided in subsections (b), (c), (e), |
16 | | (f), (g), and (h) of this Section, money collected
pursuant to |
17 | | subsections (a) and (b) of Section 201 of this Act shall be
|
18 | | paid into the General Revenue Fund in the State treasury; |
19 | | money
collected pursuant to subsections (c) and (d) of Section |
20 | | 201 of this Act
shall be paid into the Personal Property Tax |
21 | | Replacement Fund, a special
fund in the State Treasury; and |
22 | | money collected under Section 2505-650 of the
Department of |
23 | | Revenue Law of the
Civil Administrative Code of Illinois shall |
24 | | be paid
into the
Child Support Enforcement Trust Fund, a |
25 | | special fund outside the State
Treasury, or
to the State
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1 | | Disbursement Unit established under Section 10-26 of the |
2 | | Illinois Public Aid
Code, as directed by the Department of |
3 | | Healthcare and Family Services. |
4 | | (b) Local Government Distributive Fund. Beginning August |
5 | | 1, 2017, the Treasurer shall transfer each month from the |
6 | | General Revenue Fund to the Local Government Distributive Fund |
7 | | an amount equal to the sum of : (i) 6.06% (10% of the ratio of |
8 | | the 3% individual income tax rate prior to 2011 to the 4.95% |
9 | | individual income tax rate after July 1, 2017) of the net |
10 | | revenue realized from the tax imposed by subsections (a) and |
11 | | (b) of Section 201 of this Act upon individuals, trusts, and |
12 | | estates during the preceding month ; and (ii) 6.85% (10% of the |
13 | | ratio of the 4.8% corporate income tax rate prior to 2011 to |
14 | | the 7% corporate income tax rate after July 1, 2017) of the net |
15 | | revenue realized from the tax imposed by subsections (a) and |
16 | | (b) of Section 201 of this Act upon corporations during the |
17 | | preceding month ; and (iii) beginning February 1, 2022, 6.06% |
18 | | of the net revenue realized from the tax imposed by subsection |
19 | | (p) of Section 201 of this Act upon electing pass through |
20 | | entities . Net revenue realized for a month shall be defined as |
21 | | the
revenue from the tax imposed by subsections (a) and (b) of |
22 | | Section 201 of this
Act which is deposited in the General |
23 | | Revenue Fund, the Education Assistance
Fund, the Income Tax |
24 | | Surcharge Local Government Distributive Fund, the Fund for the |
25 | | Advancement of Education, and the Commitment to Human Services |
26 | | Fund during the
month minus the amount paid out of the General |
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1 | | Revenue Fund in State warrants
during that same month as |
2 | | refunds to taxpayers for overpayment of liability
under the |
3 | | tax imposed by subsections (a) and (b) of Section 201 of this |
4 | | Act. |
5 | | Notwithstanding any provision of law to the contrary, |
6 | | beginning on July 6, 2017 (the effective date of Public Act |
7 | | 100-23), those amounts required under this subsection (b) to |
8 | | be transferred by the Treasurer into the Local Government |
9 | | Distributive Fund from the General Revenue Fund shall be |
10 | | directly deposited into the Local Government Distributive Fund |
11 | | as the revenue is realized from the tax imposed by subsections |
12 | | (a) and (b) of Section 201 of this Act. |
13 | | For State fiscal year 2020 only, notwithstanding any |
14 | | provision of law to the contrary, the total amount of revenue |
15 | | and deposits under this Section attributable to revenues |
16 | | realized during State fiscal year 2020 shall be reduced by 5%. |
17 | | (c) Deposits Into Income Tax Refund Fund. |
18 | | (1) Beginning on January 1, 1989 and thereafter, the |
19 | | Department shall
deposit a percentage of the amounts |
20 | | collected pursuant to subsections (a)
and (b)(1), (2), and |
21 | | (3) of Section 201 of this Act into a fund in the State
|
22 | | treasury known as the Income Tax Refund Fund. Beginning |
23 | | with State fiscal year 1990 and for each fiscal year
|
24 | | thereafter, the percentage deposited into the Income Tax |
25 | | Refund Fund during a
fiscal year shall be the Annual |
26 | | Percentage. For fiscal year 2011, the Annual Percentage |
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1 | | shall be 8.75%. For fiscal year 2012, the Annual |
2 | | Percentage shall be 8.75%. For fiscal year 2013, the |
3 | | Annual Percentage shall be 9.75%. For fiscal year 2014, |
4 | | the Annual Percentage shall be 9.5%. For fiscal year 2015, |
5 | | the Annual Percentage shall be 10%. For fiscal year 2018, |
6 | | the Annual Percentage shall be 9.8%. For fiscal year 2019, |
7 | | the Annual Percentage shall be 9.7%. For fiscal year 2020, |
8 | | the Annual Percentage shall be 9.5%. For fiscal year 2021, |
9 | | the Annual Percentage shall be 9%. For all other
fiscal |
10 | | years, the
Annual Percentage shall be calculated as a |
11 | | fraction, the numerator of which
shall be the amount of |
12 | | refunds approved for payment by the Department during
the |
13 | | preceding fiscal year as a result of overpayment of tax |
14 | | liability under
subsections (a) and (b)(1), (2), and (3) |
15 | | of Section 201 of this Act plus the
amount of such refunds |
16 | | remaining approved but unpaid at the end of the
preceding |
17 | | fiscal year, minus the amounts transferred into the Income |
18 | | Tax
Refund Fund from the Tobacco Settlement Recovery Fund, |
19 | | and
the denominator of which shall be the amounts which |
20 | | will be collected pursuant
to subsections (a) and (b)(1), |
21 | | (2), and (3) of Section 201 of this Act during
the |
22 | | preceding fiscal year; except that in State fiscal year |
23 | | 2002, the Annual
Percentage shall in no event exceed 7.6%. |
24 | | The Director of Revenue shall
certify the Annual |
25 | | Percentage to the Comptroller on the last business day of
|
26 | | the fiscal year immediately preceding the fiscal year for |
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1 | | which it is to be
effective. |
2 | | (2) Beginning on January 1, 1989 and thereafter, the |
3 | | Department shall
deposit a percentage of the amounts |
4 | | collected pursuant to subsections (a)
and (b)(6), (7), and |
5 | | (8), (c) and (d) of Section 201
of this Act into a fund in |
6 | | the State treasury known as the Income Tax
Refund Fund. |
7 | | Beginning
with State fiscal year 1990 and for each fiscal |
8 | | year thereafter, the
percentage deposited into the Income |
9 | | Tax Refund Fund during a fiscal year
shall be the Annual |
10 | | Percentage. For fiscal year 2011, the Annual Percentage |
11 | | shall be 17.5%. For fiscal year 2012, the Annual |
12 | | Percentage shall be 17.5%. For fiscal year 2013, the |
13 | | Annual Percentage shall be 14%. For fiscal year 2014, the |
14 | | Annual Percentage shall be 13.4%. For fiscal year 2015, |
15 | | the Annual Percentage shall be 14%. For fiscal year 2018, |
16 | | the Annual Percentage shall be 17.5%. For fiscal year |
17 | | 2019, the Annual Percentage shall be 15.5%. For fiscal |
18 | | year 2020, the Annual Percentage shall be 14.25%. For |
19 | | fiscal year 2021, the Annual Percentage shall be 14%. For |
20 | | all other fiscal years, the Annual
Percentage shall be |
21 | | calculated
as a fraction, the numerator of which shall be |
22 | | the amount of refunds
approved for payment by the |
23 | | Department during the preceding fiscal year as
a result of |
24 | | overpayment of tax liability under subsections (a) and |
25 | | (b)(6),
(7), and (8), (c) and (d) of Section 201 of this |
26 | | Act plus the
amount of such refunds remaining approved but |