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Sen. Win Stoller
Filed: 4/5/2021
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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, 502, 601, 709.5, and 1501 as |
6 | | follows:
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7 | | (35 ILCS 5/201)
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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. 201. Tax imposed. |
11 | | (a) In general. A tax measured by net income is hereby |
12 | | imposed on every
individual, corporation, trust and estate for |
13 | | each taxable year ending
after July 31, 1969 on the privilege |
14 | | of earning or receiving income in or
as a resident of this |
15 | | State. Such tax shall be in addition to all other
occupation or |
16 | | privilege taxes imposed by this State or by any municipal
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1 | | corporation or political subdivision thereof. |
2 | | (b) Rates. The tax imposed by subsection (a) of this |
3 | | Section shall be
determined as follows, except as adjusted by |
4 | | subsection (d-1): |
5 | | (1) In the case of an individual, trust or estate, for |
6 | | taxable years
ending prior to July 1, 1989, an amount |
7 | | equal to 2 1/2% of the taxpayer's
net income for the |
8 | | taxable year. |
9 | | (2) In the case of an individual, trust or estate, for |
10 | | taxable years
beginning prior to July 1, 1989 and ending |
11 | | after June 30, 1989, an amount
equal to the sum of (i) 2 |
12 | | 1/2% of the taxpayer's net income for the period
prior to |
13 | | July 1, 1989, as calculated under Section 202.3, and (ii) |
14 | | 3% of the
taxpayer's net income for the period after June |
15 | | 30, 1989, as calculated
under Section 202.3. |
16 | | (3) In the case of an individual, trust or estate, for |
17 | | taxable years
beginning after June 30, 1989, and ending |
18 | | prior to January 1, 2011, an amount equal to 3% of the |
19 | | taxpayer's net
income for the taxable year. |
20 | | (4) In the case of an individual, trust, or estate, |
21 | | for taxable years beginning prior to January 1, 2011, and |
22 | | ending after December 31, 2010, an amount equal to the sum |
23 | | of (i) 3% of the taxpayer's net income for the period prior |
24 | | to January 1, 2011, as calculated under Section 202.5, and |
25 | | (ii) 5% of the taxpayer's net income for the period after |
26 | | December 31, 2010, as calculated under Section 202.5. |
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1 | | (5) In the case of an individual, trust, or estate, |
2 | | for taxable years beginning on or after January 1, 2011, |
3 | | and ending prior to January 1, 2015, an amount equal to 5% |
4 | | of the taxpayer's net income for the taxable year. |
5 | | (5.1) In the case of an individual, trust, or estate, |
6 | | for taxable years beginning prior to January 1, 2015, and |
7 | | ending after December 31, 2014, an amount equal to the sum |
8 | | of (i) 5% of the taxpayer's net income for the period prior |
9 | | to January 1, 2015, as calculated under Section 202.5, and |
10 | | (ii) 3.75% of the taxpayer's net income for the period |
11 | | after December 31, 2014, as calculated under Section |
12 | | 202.5. |
13 | | (5.2) In the case of an individual, trust, or estate, |
14 | | for taxable years beginning on or after January 1, 2015, |
15 | | and ending prior to July 1, 2017, an amount equal to 3.75% |
16 | | of the taxpayer's net income for the taxable year. |
17 | | (5.3) In the case of an individual, trust, or estate, |
18 | | for taxable years beginning prior to July 1, 2017, and |
19 | | ending after June 30, 2017, an amount equal to the sum of |
20 | | (i) 3.75% of the taxpayer's net income for the period |
21 | | prior to July 1, 2017, as calculated under Section 202.5, |
22 | | and (ii) 4.95% of the taxpayer's net income for the period |
23 | | after June 30, 2017, as calculated under Section 202.5. |
24 | | (5.4) In the case of an individual, trust, or estate, |
25 | | for taxable years beginning on or after July 1, 2017, an |
26 | | amount equal to 4.95% of the taxpayer's net income for the |
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1 | | taxable year. |
2 | | (6) In the case of a corporation, for taxable years
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3 | | ending prior to July 1, 1989, an amount equal to 4% of the
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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, an amount equal to 7% |
21 | | of the taxpayer's net income for the taxable year. |
22 | | The rates under this subsection (b) are subject to the |
23 | | provisions of Section 201.5. |
24 | | (b-5) Surcharge; sale or exchange of assets, properties, |
25 | | and intangibles of organization gaming licensees. For each of |
26 | | taxable years 2019 through 2027, a surcharge is imposed on all |
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1 | | taxpayers on income arising from the sale or exchange of |
2 | | capital assets, depreciable business property, real property |
3 | | used in the trade or business, and Section 197 intangibles (i) |
4 | | of an organization licensee under the Illinois Horse Racing |
5 | | Act of 1975 and (ii) of an organization gaming licensee under |
6 | | the Illinois Gambling 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 shall not apply if: |
10 | | (1) the organization gaming license, organization |
11 | | license, or racetrack property is transferred as a result |
12 | | of any of the following: |
13 | | (A) bankruptcy, a receivership, or a debt |
14 | | adjustment initiated by or against the initial |
15 | | licensee or the substantial owners of the initial |
16 | | licensee; |
17 | | (B) cancellation, revocation, or termination of |
18 | | any such license by the Illinois Gaming Board or the |
19 | | Illinois Racing Board; |
20 | | (C) a determination by the Illinois Gaming Board |
21 | | that transfer of the license is in the best interests |
22 | | of Illinois gaming; |
23 | | (D) the death of an owner of the equity interest in |
24 | | a licensee; |
25 | | (E) the acquisition of a controlling interest in |
26 | | the stock or substantially all of the assets of a |
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1 | | publicly traded company; |
2 | | (F) a transfer by a parent company to a wholly |
3 | | owned subsidiary; or |
4 | | (G) the transfer or sale to or by one person to |
5 | | another person where both persons were initial owners |
6 | | of the license when the license was issued; or |
7 | | (2) the controlling interest in the organization |
8 | | gaming license, organization license, or racetrack |
9 | | property is transferred in a transaction to lineal |
10 | | descendants in which no gain or loss is recognized or as a |
11 | | result of a transaction in accordance with Section 351 of |
12 | | the Internal Revenue Code in which no gain or loss is |
13 | | recognized; or |
14 | | (3) live horse racing was not conducted in 2010 at a |
15 | | racetrack located within 3 miles of the Mississippi River |
16 | | under a license issued pursuant to the Illinois Horse |
17 | | Racing Act of 1975. |
18 | | The transfer of an organization gaming license, |
19 | | organization license, or racetrack property by a person other |
20 | | than the initial licensee to receive the organization gaming |
21 | | license is not subject to a surcharge. The Department shall |
22 | | adopt rules necessary to implement and administer this |
23 | | subsection. |
24 | | (c) Personal Property Tax Replacement Income Tax.
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25 | | Beginning on July 1, 1979 and thereafter, in addition to such |
26 | | income
tax, there is also hereby imposed the Personal Property |
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1 | | Tax Replacement
Income Tax measured by net income on every |
2 | | corporation (including Subchapter
S corporations), partnership |
3 | | and trust, for each taxable year ending after
June 30, 1979. |
4 | | Such taxes are imposed on the privilege of earning or
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5 | | receiving income in or as a resident of this State. The |
6 | | Personal Property
Tax Replacement Income Tax shall be in |
7 | | addition to the income tax imposed
by subsections (a) and (b) |
8 | | of this Section and in addition to all other
occupation or |
9 | | privilege taxes imposed by this State or by any municipal
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10 | | corporation or political subdivision thereof. |
11 | | (d) Additional Personal Property Tax Replacement Income |
12 | | Tax Rates.
The personal property tax replacement income tax |
13 | | imposed by this subsection
and subsection (c) of this Section |
14 | | in the case of a corporation, other
than a Subchapter S |
15 | | corporation and except as adjusted by subsection (d-1),
shall |
16 | | be an additional amount equal to
2.85% of such taxpayer's net |
17 | | income for the taxable year, except that
beginning on January |
18 | | 1, 1981, and thereafter, the rate of 2.85% specified
in this |
19 | | subsection shall be reduced to 2.5%, and in the case of a
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20 | | partnership, trust or a Subchapter S corporation shall be an |
21 | | additional
amount equal to 1.5% of such taxpayer's net income |
22 | | for the taxable year. |
23 | | (d-1) Rate reduction for certain foreign insurers. In the |
24 | | case of a
foreign insurer, as defined by Section 35A-5 of the |
25 | | Illinois Insurance Code,
whose state or country of domicile |
26 | | imposes on insurers domiciled in Illinois
a retaliatory tax |
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1 | | (excluding any insurer
whose premiums from reinsurance assumed |
2 | | are 50% or more of its total insurance
premiums as determined |
3 | | under paragraph (2) of subsection (b) of Section 304,
except |
4 | | that for purposes of this determination premiums from |
5 | | reinsurance do
not include premiums from inter-affiliate |
6 | | reinsurance arrangements),
beginning with taxable years ending |
7 | | on or after December 31, 1999,
the sum of
the rates of tax |
8 | | imposed by subsections (b) and (d) shall be reduced (but not
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9 | | increased) to the rate at which the total amount of tax imposed |
10 | | under this Act,
net of all credits allowed under this Act, |
11 | | shall equal (i) the total amount of
tax that would be imposed |
12 | | on the foreign insurer's net income allocable to
Illinois for |
13 | | the taxable year by such foreign insurer's state or country of
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14 | | domicile if that net income were subject to all income taxes |
15 | | and taxes
measured by net income imposed by such foreign |
16 | | insurer's state or country of
domicile, net of all credits |
17 | | allowed or (ii) a rate of zero if no such tax is
imposed on |
18 | | such income by the foreign insurer's state of domicile.
For |
19 | | the purposes of this subsection (d-1), an inter-affiliate |
20 | | includes a
mutual insurer under common management. |
21 | | (1) For the purposes of subsection (d-1), in no event |
22 | | shall the sum of the
rates of tax imposed by subsections |
23 | | (b) and (d) be reduced below the rate at
which the sum of: |
24 | | (A) the total amount of tax imposed on such |
25 | | foreign insurer under
this Act for a taxable year, net |
26 | | of all credits allowed under this Act, plus |
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1 | | (B) the privilege tax imposed by Section 409 of |
2 | | the Illinois Insurance
Code, the fire insurance |
3 | | company tax imposed by Section 12 of the Fire
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4 | | Investigation Act, and the fire department taxes |
5 | | imposed under Section 11-10-1
of the Illinois |
6 | | Municipal Code, |
7 | | equals 1.25% for taxable years ending prior to December |
8 | | 31, 2003, or
1.75% for taxable years ending on or after |
9 | | December 31, 2003, of the net
taxable premiums written for |
10 | | the taxable year,
as described by subsection (1) of |
11 | | Section 409 of the Illinois Insurance Code.
This paragraph |
12 | | will in no event increase the rates imposed under |
13 | | subsections
(b) and (d). |
14 | | (2) Any reduction in the rates of tax imposed by this |
15 | | subsection shall be
applied first against the rates |
16 | | imposed by subsection (b) and only after the
tax imposed |
17 | | by subsection (a) net of all credits allowed under this |
18 | | Section
other than the credit allowed under subsection (i) |
19 | | has been reduced to zero,
against the rates imposed by |
20 | | subsection (d). |
21 | | This subsection (d-1) is exempt from the provisions of |
22 | | Section 250. |
23 | | (d-2) For taxable years beginning on or after January 1, |
24 | | 2021, a partnership or Subchapter S corporation may elect to |
25 | | pay a tax that is imposed on the partnership or Subchapter S |
26 | | corporation. This tax is computed by multiplying each |
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1 | | pass-through owner's share of business income apportionable to |
2 | | Illinois and nonbusiness income allocated to Illinois under |
3 | | Section 303 of this Act, if this share is not a net loss, by |
4 | | the applicable rates of tax for that pass-through owner under |
5 | | subsections (a) through (d) of this Section, and taking the |
6 | | sum of these amounts. This election shall be made on the |
7 | | partnership's or Subchapter S corporation's return filed under |
8 | | Section 502 in such manner as the Department may prescribe. |
9 | | (e) Investment credit. A taxpayer shall be allowed a |
10 | | credit
against the Personal Property Tax Replacement Income |
11 | | Tax for
investment in qualified property. |
12 | | (1) A taxpayer shall be allowed a credit equal to .5% |
13 | | of
the basis of qualified property placed in service |
14 | | during the taxable year,
provided such property is placed |
15 | | in service on or after
July 1, 1984. There shall be allowed |
16 | | an additional credit equal
to .5% of the basis of |
17 | | qualified property placed in service during the
taxable |
18 | | year, provided such property is placed in service on or
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19 | | after July 1, 1986, and the taxpayer's base employment
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20 | | within Illinois has increased by 1% or more over the |
21 | | preceding year as
determined by the taxpayer's employment |
22 | | records filed with the
Illinois Department of Employment |
23 | | Security. Taxpayers who are new to
Illinois shall be |
24 | | deemed to have met the 1% growth in base employment for
the |
25 | | first year in which they file employment records with the |
26 | | Illinois
Department of Employment Security. The provisions |
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1 | | added to this Section by
Public Act 85-1200 (and restored |
2 | | by Public Act 87-895) shall be
construed as declaratory of |
3 | | existing law and not as a new enactment. If,
in any year, |
4 | | the increase in base employment within Illinois over the
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5 | | preceding year is less than 1%, the additional credit |
6 | | shall be limited to that
percentage times a fraction, the |
7 | | numerator of which is .5% and the denominator
of which is |
8 | | 1%, but shall not exceed .5%. The investment credit shall |
9 | | not be
allowed to the extent that it would reduce a |
10 | | taxpayer's liability in any tax
year below zero, nor may |
11 | | any credit for qualified property be allowed for any
year |
12 | | other than the year in which the property was placed in |
13 | | service in
Illinois. For tax years ending on or after |
14 | | December 31, 1987, and on or
before December 31, 1988, the |
15 | | credit shall be allowed for the tax year in
which the |
16 | | property is placed in service, or, if the amount of the |
17 | | credit
exceeds the tax liability for that year, whether it |
18 | | exceeds the original
liability or the liability as later |
19 | | amended, such excess may be carried
forward and applied to |
20 | | the tax liability of the 5 taxable years following
the |
21 | | excess credit years if the taxpayer (i) makes investments |
22 | | which cause
the creation of a minimum of 2,000 full-time |
23 | | equivalent jobs in Illinois,
(ii) is located in an |
24 | | enterprise zone established pursuant to the Illinois
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25 | | Enterprise Zone Act and (iii) is certified by the |
26 | | Department of Commerce
and Community Affairs (now |
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1 | | Department of Commerce and Economic Opportunity) as |
2 | | complying with the requirements specified in
clause (i) |
3 | | and (ii) by July 1, 1986. The Department of Commerce and
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4 | | Community Affairs (now Department of Commerce and Economic |
5 | | Opportunity) shall notify the Department of Revenue of all |
6 | | such
certifications immediately. For tax years ending |
7 | | after December 31, 1988,
the credit shall be allowed for |
8 | | the tax year in which the property is
placed in service, |
9 | | or, if the amount of the credit exceeds the tax
liability |
10 | | for that year, whether it exceeds the original liability |
11 | | or the
liability as later amended, such excess may be |
12 | | carried forward and applied
to the tax liability of the 5 |
13 | | taxable years following the excess credit
years. The |
14 | | credit shall be applied to the earliest year for which |
15 | | there is
a liability. If there is credit from more than one |
16 | | tax year that is
available to offset a liability, earlier |
17 | | credit shall be applied first. |
18 | | (2) The term "qualified property" means property |
19 | | which: |
20 | | (A) is tangible, whether new or used, including |
21 | | buildings and structural
components of buildings and |
22 | | signs that are real property, but not including
land |
23 | | or improvements to real property that are not a |
24 | | structural component of a
building such as |
25 | | landscaping, sewer lines, local access roads, fencing, |
26 | | parking
lots, and other appurtenances; |
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1 | | (B) is depreciable pursuant to Section 167 of the |
2 | | Internal Revenue Code,
except that "3-year property" |
3 | | as defined in Section 168(c)(2)(A) of that
Code is not |
4 | | eligible for the credit provided by this subsection |
5 | | (e); |
6 | | (C) is acquired by purchase as defined in Section |
7 | | 179(d) of
the Internal Revenue Code; |
8 | | (D) is used in Illinois by a taxpayer who is |
9 | | primarily engaged in
manufacturing, or in mining coal |
10 | | or fluorite, or in retailing, or was placed in service |
11 | | on or after July 1, 2006 in a River Edge Redevelopment |
12 | | Zone established pursuant to the River Edge |
13 | | Redevelopment Zone Act; and |
14 | | (E) has not previously been used in Illinois in |
15 | | such a manner and by
such a person as would qualify for |
16 | | the credit provided by this subsection
(e) or |
17 | | subsection (f). |
18 | | (3) For purposes of this subsection (e), |
19 | | "manufacturing" means
the material staging and production |
20 | | of tangible personal property by
procedures commonly |
21 | | regarded as manufacturing, processing, fabrication, or
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22 | | assembling which changes some existing material into new |
23 | | shapes, new
qualities, or new combinations. For purposes |
24 | | of this subsection
(e) the term "mining" shall have the |
25 | | same meaning as the term "mining" in
Section 613(c) of the |
26 | | Internal Revenue Code. For purposes of this subsection
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1 | | (e), the term "retailing" means the sale of tangible |
2 | | personal property for use or consumption and not for |
3 | | resale, or
services rendered in conjunction with the sale |
4 | | of tangible personal property for use or consumption and |
5 | | not for resale. For purposes of this subsection (e), |
6 | | "tangible personal property" has the same meaning as when |
7 | | that term is used in the Retailers' Occupation Tax Act, |
8 | | and, for taxable years ending after December 31, 2008, |
9 | | does not include the generation, transmission, or |
10 | | distribution of electricity. |
11 | | (4) The basis of qualified property shall be the basis
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12 | | used to compute the depreciation deduction for federal |
13 | | income tax purposes. |
14 | | (5) If the basis of the property for federal income |
15 | | tax depreciation
purposes is increased after it has been |
16 | | placed in service in Illinois by
the taxpayer, the amount |
17 | | of such increase shall be deemed property placed
in |
18 | | service on the date of such increase in basis. |
19 | | (6) The term "placed in service" shall have the same
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20 | | meaning as under Section 46 of the Internal Revenue Code. |
21 | | (7) If during any taxable year, any property ceases to
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22 | | be qualified property in the hands of the taxpayer within |
23 | | 48 months after
being placed in service, or the situs of |
24 | | any qualified property is
moved outside Illinois within 48 |
25 | | months after being placed in service, the
Personal |
26 | | Property Tax Replacement Income Tax for such taxable year |
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1 | | shall be
increased. Such increase shall be determined by |
2 | | (i) recomputing the
investment credit which would have |
3 | | been allowed for the year in which
credit for such |
4 | | property was originally allowed by eliminating such
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5 | | property from such computation and, (ii) subtracting such |
6 | | recomputed credit
from the amount of credit previously |
7 | | allowed. For the purposes of this
paragraph (7), a |
8 | | reduction of the basis of qualified property resulting
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9 | | from a redetermination of the purchase price shall be |
10 | | deemed a disposition
of qualified property to the extent |
11 | | of such reduction. |
12 | | (8) Unless the investment credit is extended by law, |
13 | | the
basis of qualified property shall not include costs |
14 | | incurred after
December 31, 2018, except for costs |
15 | | incurred pursuant to a binding
contract entered into on or |
16 | | before December 31, 2018. |
17 | | (9) Each taxable year ending before December 31, 2000, |
18 | | a partnership may
elect to pass through to its
partners |
19 | | the credits to which the partnership is entitled under |
20 | | this subsection
(e) for the taxable year. A partner may |
21 | | use the credit allocated to him or her
under this |
22 | | paragraph only against the tax imposed in subsections (c) |
23 | | and (d) of
this Section. If the partnership makes that |
24 | | election, those credits shall be
allocated among the |
25 | | partners in the partnership in accordance with the rules
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26 | | set forth in Section 704(b) of the Internal Revenue Code, |
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1 | | and the rules
promulgated under that Section, and the |
2 | | allocated amount of the credits shall
be allowed to the |
3 | | partners for that taxable year. The partnership shall make
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4 | | this election on its Personal Property Tax Replacement |
5 | | Income Tax return for
that taxable year. The election to |
6 | | pass through the credits shall be
irrevocable. |
7 | | For taxable years ending on or after December 31, |
8 | | 2000, a
partner that qualifies its
partnership for a |
9 | | subtraction under subparagraph (I) of paragraph (2) of
|
10 | | subsection (d) of Section 203 or a shareholder that |
11 | | qualifies a Subchapter S
corporation for a subtraction |
12 | | under subparagraph (S) of paragraph (2) of
subsection (b) |
13 | | of Section 203 shall be allowed a credit under this |
14 | | subsection
(e) equal to its share of the credit earned |
15 | | under this subsection (e) during
the taxable year by the |
16 | | partnership or Subchapter S corporation, determined in
|
17 | | accordance with the determination of income and |
18 | | distributive share of
income under Sections 702 and 704 |
19 | | and Subchapter S of the Internal Revenue
Code. This |
20 | | paragraph is exempt from the provisions of Section 250. |
21 | | (f) Investment credit; Enterprise Zone; River Edge |
22 | | Redevelopment Zone. |
23 | | (1) A taxpayer shall be allowed a credit against the |
24 | | tax imposed
by subsections (a) and (b) of this Section for |
25 | | investment in qualified
property which is placed in |
26 | | service in an Enterprise Zone created
pursuant to the |
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1 | | Illinois Enterprise Zone Act or, for property placed in |
2 | | service on or after July 1, 2006, a River Edge |
3 | | Redevelopment Zone established pursuant to the River Edge |
4 | | Redevelopment Zone Act. For partners, shareholders
of |
5 | | Subchapter S corporations, and owners of limited liability |
6 | | companies,
if the liability company is treated as a |
7 | | partnership for purposes of
federal and State income |
8 | | taxation, there shall be allowed a credit under
this |
9 | | subsection (f) to be determined in accordance with the |
10 | | determination
of income and distributive share of income |
11 | | under Sections 702 and 704 and
Subchapter S of the |
12 | | Internal Revenue Code. The credit shall be .5% of the
|
13 | | basis for such property. The credit shall be available |
14 | | only in the taxable
year in which the property is placed in |
15 | | service in the Enterprise Zone or River Edge Redevelopment |
16 | | Zone and
shall not be allowed to the extent that it would |
17 | | reduce a taxpayer's
liability for the tax imposed by |
18 | | subsections (a) and (b) of this Section to
below zero. For |
19 | | tax years ending on or after December 31, 1985, the credit
|
20 | | shall be allowed for the tax year in which the property is |
21 | | placed in
service, or, if the amount of the credit exceeds |
22 | | the tax liability for that
year, whether it exceeds the |
23 | | original liability or the liability as later
amended, such |
24 | | excess may be carried forward and applied to the tax
|
25 | | liability of the 5 taxable years following the excess |
26 | | credit year.
The credit shall be applied to the earliest |
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1 | | year for which there is a
liability. If there is credit |
2 | | from more than one tax year that is available
to offset a |
3 | | liability, the credit accruing first in time shall be |
4 | | applied
first. |
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 | | (f); |
13 | | (C) is acquired by purchase as defined in Section |
14 | | 179(d) of
the Internal Revenue Code; |
15 | | (D) is used in the Enterprise Zone or River Edge |
16 | | Redevelopment Zone by the taxpayer; and |
17 | | (E) has not been previously used in Illinois in |
18 | | such a manner and by
such a person as would qualify for |
19 | | the credit provided by this subsection
(f) or |
20 | | subsection (e). |
21 | | (3) The basis of qualified property shall be the basis |
22 | | used to compute
the depreciation deduction for federal |
23 | | income tax purposes. |
24 | | (4) If the basis of the property for federal income |
25 | | tax depreciation
purposes is increased after it has been |
26 | | placed in service in the Enterprise
Zone or River Edge |
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1 | | Redevelopment Zone by the taxpayer, the amount of such |
2 | | increase shall be deemed property
placed in service on the |
3 | | date of such increase in basis. |
4 | | (5) The term "placed in service" shall have the same |
5 | | meaning as under
Section 46 of the Internal Revenue Code. |
6 | | (6) If during any taxable year, any property ceases to |
7 | | be qualified
property in the hands of the taxpayer within |
8 | | 48 months after being placed
in service, or the situs of |
9 | | any qualified property is moved outside the
Enterprise |
10 | | Zone or River Edge Redevelopment Zone within 48 months |
11 | | after being placed in service, the tax
imposed under |
12 | | subsections (a) and (b) of this Section for such taxable |
13 | | year
shall be increased. Such increase shall be determined |
14 | | by (i) recomputing
the investment credit which would have |
15 | | been allowed for the year in which
credit for such |
16 | | property was originally allowed by eliminating such
|
17 | | property from such computation, and (ii) subtracting such |
18 | | recomputed credit
from the amount of credit previously |
19 | | allowed. For the purposes of this
paragraph (6), a |
20 | | reduction of the basis of qualified property resulting
|
21 | | from a redetermination of the purchase price shall be |
22 | | deemed a disposition
of qualified property to the extent |
23 | | of such reduction. |
24 | | (7) There shall be allowed an additional credit equal |
25 | | to 0.5% of the basis of qualified property placed in |
26 | | service during the taxable year in a River Edge |
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1 | | Redevelopment Zone, provided such property is placed in |
2 | | service on or after July 1, 2006, and the taxpayer's base |
3 | | employment within Illinois has increased by 1% or more |
4 | | over the preceding year as determined by the taxpayer's |
5 | | employment records filed with the Illinois Department of |
6 | | Employment Security. Taxpayers who are new to Illinois |
7 | | shall be deemed to have met the 1% growth in base |
8 | | employment for the first year in which they file |
9 | | employment records with the Illinois Department of |
10 | | Employment Security. If, in any year, the increase in base |
11 | | employment within Illinois over the preceding year is less |
12 | | than 1%, the additional credit shall be limited to that |
13 | | percentage times a fraction, the numerator of which is |
14 | | 0.5% and the denominator of which is 1%, but shall not |
15 | | exceed 0.5%.
|
16 | | (8) For taxable years beginning on or after January 1, |
17 | | 2021, there shall be allowed an Enterprise Zone |
18 | | construction jobs credit against the taxes imposed under |
19 | | subsections (a) and (b) of this Section as provided in |
20 | | Section 13 of the Illinois Enterprise Zone Act. |
21 | | The credit or credits may not reduce the taxpayer's |
22 | | liability to less than zero. If the amount of the credit or |
23 | | credits exceeds the taxpayer's liability, the excess may |
24 | | be carried forward and applied against the taxpayer's |
25 | | liability in succeeding calendar years in the same manner |
26 | | provided under paragraph (4) of Section 211 of this Act. |
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1 | | The credit or credits shall be applied to the earliest |
2 | | year for which there is a tax liability. If there are |
3 | | credits from more than one taxable year that are available |
4 | | to offset a liability, the earlier credit shall be applied |
5 | | first. |
6 | | For partners, shareholders of Subchapter S |
7 | | corporations, and owners of limited liability companies, |
8 | | if the liability company is treated as a partnership for |
9 | | the purposes of federal and State income taxation, there |
10 | | shall be allowed a credit under this Section to be |
11 | | determined in accordance with the determination of income |
12 | | and distributive share of income under Sections 702 and |
13 | | 704 and Subchapter S of the Internal Revenue Code. |
14 | | The total aggregate amount of credits awarded under |
15 | | the Blue Collar Jobs Act (Article 20 of Public Act 101-9 |
16 | | this amendatory Act of the 101st General Assembly ) shall |
17 | | not exceed $20,000,000 in any State fiscal year . |
18 | | This paragraph (8) is exempt from the provisions of |
19 | | Section 250. |
20 | | (g) (Blank). |
21 | | (h) Investment credit; High Impact Business. |
22 | | (1) Subject to subsections (b) and (b-5) of Section
|
23 | | 5.5 of the Illinois Enterprise Zone Act, a taxpayer shall |
24 | | be allowed a credit
against the tax imposed by subsections |
25 | | (a) and (b) of this Section for
investment in qualified
|
26 | | property which is placed in service by a Department of |
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1 | | Commerce and Economic Opportunity
designated High Impact |
2 | | Business. The credit shall be .5% of the basis
for such |
3 | | property. The credit shall not be available (i) until the |
4 | | minimum
investments in qualified property set forth in |
5 | | subdivision (a)(3)(A) of
Section 5.5 of the Illinois
|
6 | | Enterprise Zone Act have been satisfied
or (ii) until the |
7 | | time authorized in subsection (b-5) of the Illinois
|
8 | | Enterprise Zone Act for entities designated as High Impact |
9 | | Businesses under
subdivisions (a)(3)(B), (a)(3)(C), and |
10 | | (a)(3)(D) of Section 5.5 of the Illinois
Enterprise Zone |
11 | | Act, and shall not be allowed to the extent that it would
|
12 | | reduce a taxpayer's liability for the tax imposed by |
13 | | subsections (a) and (b) of
this Section to below zero. The |
14 | | credit applicable to such investments shall be
taken in |
15 | | the taxable year in which such investments have been |
16 | | completed. The
credit for additional investments beyond |
17 | | the minimum investment by a designated
high impact |
18 | | business authorized under subdivision (a)(3)(A) of Section |
19 | | 5.5 of
the Illinois Enterprise Zone Act shall be available |
20 | | only in the taxable year in
which the property is placed in |
21 | | service and shall not be allowed to the extent
that it |
22 | | would reduce a taxpayer's liability for the tax imposed by |
23 | | subsections
(a) and (b) of this Section to below zero.
For |
24 | | tax years ending on or after December 31, 1987, the credit |
25 | | shall be
allowed for the tax year in which the property is |
26 | | placed in service, or, if
the amount of the credit exceeds |
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1 | | the tax liability for that year, whether
it exceeds the |
2 | | original liability or the liability as later amended, such
|
3 | | excess may be carried forward and applied to the tax |
4 | | liability of the 5
taxable years following the excess |
5 | | credit year. The credit shall be
applied to the earliest |
6 | | year for which there is a liability. If there is
credit |
7 | | from more than one tax year that is available to offset a |
8 | | liability,
the credit accruing first in time shall be |
9 | | applied first. |
10 | | Changes made in this subdivision (h)(1) by Public Act |
11 | | 88-670
restore changes made by Public Act 85-1182 and |
12 | | reflect existing law. |
13 | | (2) The term qualified property means property which: |
14 | | (A) is tangible, whether new or used, including |
15 | | buildings and
structural components of buildings; |
16 | | (B) is depreciable pursuant to Section 167 of the |
17 | | Internal Revenue
Code, except that "3-year property" |
18 | | as defined in Section 168(c)(2)(A) of
that Code is not |
19 | | eligible for the credit provided by this subsection |
20 | | (h); |
21 | | (C) is acquired by purchase as defined in Section |
22 | | 179(d) of the
Internal Revenue Code; and |
23 | | (D) is not eligible for the Enterprise Zone |
24 | | Investment Credit provided
by subsection (f) of this |
25 | | Section. |
26 | | (3) The basis of qualified property shall be the basis |
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1 | | used to compute
the depreciation deduction for federal |
2 | | income tax purposes. |
3 | | (4) If the basis of the property for federal income |
4 | | tax depreciation
purposes is increased after it has been |
5 | | placed in service in a federally
designated Foreign Trade |
6 | | Zone or Sub-Zone located in Illinois by the taxpayer,
the |
7 | | amount of such increase shall be deemed property placed in |
8 | | service on
the date of such increase in basis. |
9 | | (5) The term "placed in service" shall have the same |
10 | | meaning as under
Section 46 of the Internal Revenue Code. |
11 | | (6) If during any taxable year ending on or before |
12 | | December 31, 1996,
any property ceases to be qualified
|
13 | | property in the hands of the taxpayer within 48 months |
14 | | after being placed
in service, or the situs of any |
15 | | qualified property is moved outside
Illinois within 48 |
16 | | months after being placed in service, the tax imposed
|
17 | | under subsections (a) and (b) of this Section for such |
18 | | taxable year shall
be increased. Such increase shall be |
19 | | determined by (i) recomputing the
investment credit which |
20 | | would have been allowed for the year in which
credit for |
21 | | such property was originally allowed by eliminating such
|
22 | | property from such computation, and (ii) subtracting such |
23 | | recomputed credit
from the amount of credit previously |
24 | | allowed. For the purposes of this
paragraph (6), a |
25 | | reduction of the basis of qualified property resulting
|
26 | | from a redetermination of the purchase price shall be |
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1 | | deemed a disposition
of qualified property to the extent |
2 | | of such reduction. |
3 | | (7) Beginning with tax years ending after December 31, |
4 | | 1996, if a
taxpayer qualifies for the credit under this |
5 | | subsection (h) and thereby is
granted a tax abatement and |
6 | | the taxpayer relocates its entire facility in
violation of |
7 | | the explicit terms and length of the contract under |
8 | | Section
18-183 of the Property Tax Code, the tax imposed |
9 | | under subsections
(a) and (b) of this Section shall be |
10 | | increased for the taxable year
in which the taxpayer |
11 | | relocated its facility by an amount equal to the
amount of |
12 | | credit received by the taxpayer under this subsection (h). |
13 | | (h-5) High Impact Business construction constructions jobs |
14 | | credit. For taxable years beginning on or after January 1, |
15 | | 2021, there shall also be allowed a High Impact Business |
16 | | construction jobs credit against the tax imposed under |
17 | | subsections (a) and (b) of this Section as provided in |
18 | | subsections (i) and (j) of Section 5.5 of the Illinois |
19 | | Enterprise Zone Act. |
20 | | The credit or credits may not reduce the taxpayer's |
21 | | liability to less than zero. If the amount of the credit or |
22 | | credits exceeds the taxpayer's liability, the excess may be |
23 | | carried forward and applied against the taxpayer's liability |
24 | | in succeeding calendar years in the manner provided under |
25 | | paragraph (4) of Section 211 of this Act. The credit or credits |
26 | | shall be applied to the earliest year for which there is a tax |
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1 | | liability. If there are credits from more than one taxable |
2 | | year that are available to offset a liability, the earlier |
3 | | credit shall be applied first. |
4 | | For partners, shareholders of Subchapter S corporations, |
5 | | and owners of limited liability companies, if the liability |
6 | | company is treated as a partnership for the purposes of |
7 | | federal and State income taxation, there shall be allowed a |
8 | | credit under this Section to be determined in accordance with |
9 | | the determination of income and distributive share of income |
10 | | under Sections 702 and 704 and Subchapter S of the Internal |
11 | | Revenue Code. |
12 | | The total aggregate amount of credits awarded under the |
13 | | Blue Collar Jobs Act (Article 20 of Public Act 101-9 this |
14 | | amendatory Act of the 101st General Assembly ) shall not exceed |
15 | | $20,000,000 in any State fiscal year . |
16 | | This subsection (h-5) is exempt from the provisions of |
17 | | Section 250. |
18 | | (i) Credit for Personal Property Tax Replacement Income |
19 | | Tax.
For tax years ending prior to December 31, 2003, a credit |
20 | | shall be allowed
against the tax imposed by
subsections (a) |
21 | | and (b) of this Section for the tax imposed by subsections (c)
|
22 | | and (d) of this Section. This credit shall be computed by |
23 | | multiplying the tax
imposed by subsections (c) and (d) of this |
24 | | Section by a fraction, the numerator
of which is base income |
25 | | allocable to Illinois and the denominator of which is
Illinois |
26 | | base income, and further multiplying the product by the tax |
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1 | | rate
imposed by subsections (a) and (b) of this Section. |
2 | | Any credit earned on or after December 31, 1986 under
this |
3 | | subsection which is unused in the year
the credit is computed |
4 | | because it exceeds the tax liability imposed by
subsections |
5 | | (a) and (b) for that year (whether it exceeds the original
|
6 | | liability or the liability as later amended) may be carried |
7 | | forward and
applied to the tax liability imposed by |
8 | | subsections (a) and (b) of the 5
taxable years following the |
9 | | excess credit year, provided that no credit may
be carried |
10 | | forward to any year ending on or
after December 31, 2003. This |
11 | | credit shall be
applied first to the earliest year for which |
12 | | there is a liability. If
there is a credit under this |
13 | | subsection from more than one tax year that is
available to |
14 | | offset a liability the earliest credit arising under this
|
15 | | subsection shall be applied first. |
16 | | If, during any taxable year ending on or after December |
17 | | 31, 1986, the
tax imposed by subsections (c) and (d) of this |
18 | | Section for which a taxpayer
has claimed a credit under this |
19 | | subsection (i) is reduced, the amount of
credit for such tax |
20 | | shall also be reduced. Such reduction shall be
determined by |
21 | | recomputing the credit to take into account the reduced tax
|
22 | | imposed by subsections (c) and (d). If any portion of the
|
23 | | reduced amount of credit has been carried to a different |
24 | | taxable year, an
amended return shall be filed for such |
25 | | taxable year to reduce the amount of
credit claimed. |
26 | | (j) Training expense credit. Beginning with tax years |
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1 | | ending on or
after December 31, 1986 and prior to December 31, |
2 | | 2003, a taxpayer shall be
allowed a credit against the
tax |
3 | | imposed by subsections (a) and (b) under this Section
for all |
4 | | amounts paid or accrued, on behalf of all persons
employed by |
5 | | the taxpayer in Illinois or Illinois residents employed
|
6 | | outside of Illinois by a taxpayer, for educational or |
7 | | vocational training in
semi-technical or technical fields or |
8 | | semi-skilled or skilled fields, which
were deducted from gross |
9 | | income in the computation of taxable income. The
credit |
10 | | against the tax imposed by subsections (a) and (b) shall be |
11 | | 1.6% of
such training expenses. For partners, shareholders of |
12 | | subchapter S
corporations, and owners of limited liability |
13 | | companies, if the liability
company is treated as a |
14 | | partnership for purposes of federal and State income
taxation, |
15 | | there shall be allowed a credit under this subsection (j) to be
|
16 | | determined in accordance with the determination of income and |
17 | | distributive
share of income under Sections 702 and 704 and |
18 | | subchapter S of the Internal
Revenue Code. |
19 | | Any credit allowed under this subsection which is unused |
20 | | in the year
the credit is earned may be carried forward to each |
21 | | of the 5 taxable
years following the year for which the credit |
22 | | is first computed until it is
used. This credit shall be |
23 | | applied first to the earliest year for which
there is a |
24 | | liability. If there is a credit under this subsection from |
25 | | more
than one tax year that is available to offset a liability , |
26 | | the earliest
credit arising under this subsection shall be |
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1 | | applied first. No carryforward
credit may be claimed in any |
2 | | tax year ending on or after
December 31, 2003. |
3 | | (k) Research and development credit. For tax years ending |
4 | | after July 1, 1990 and prior to
December 31, 2003, and |
5 | | beginning again for tax years ending on or after December 31, |
6 | | 2004, and ending prior to January 1, 2027, a taxpayer shall be
|
7 | | allowed a credit against the tax imposed by subsections (a) |
8 | | and (b) of this
Section for increasing research activities in |
9 | | this State. The credit
allowed against the tax imposed by |
10 | | subsections (a) and (b) shall be equal
to 6 1/2% of the |
11 | | qualifying expenditures for increasing research activities
in |
12 | | this State. For partners, shareholders of subchapter S |
13 | | corporations, and
owners of limited liability companies, if |
14 | | the liability company is treated as a
partnership for purposes |
15 | | of federal and State income taxation, there shall be
allowed a |
16 | | credit under this subsection to be determined in accordance |
17 | | with the
determination of income and distributive share of |
18 | | income under Sections 702 and
704 and subchapter S of the |
19 | | Internal Revenue Code. |
20 | | For purposes of this subsection, "qualifying expenditures" |
21 | | means the
qualifying expenditures as defined for the federal |
22 | | credit for increasing
research activities which would be |
23 | | allowable under Section 41 of the
Internal Revenue Code and |
24 | | which are conducted in this State, "qualifying
expenditures |
25 | | for increasing research activities in this State" means the
|
26 | | excess of qualifying expenditures for the taxable year in |
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1 | | which incurred
over qualifying expenditures for the base |
2 | | period, "qualifying expenditures
for the base period" means |
3 | | the average of the qualifying expenditures for
each year in |
4 | | the base period, and "base period" means the 3 taxable years
|
5 | | immediately preceding the taxable year for which the |
6 | | determination is
being made. |
7 | | Any credit in excess of the tax liability for the taxable |
8 | | year
may be carried forward. A taxpayer may elect to have the
|
9 | | unused credit shown on its final completed return carried over |
10 | | as a credit
against the tax liability for the following 5 |
11 | | taxable years or until it has
been fully used, whichever |
12 | | occurs first; provided that no credit earned in a tax year |
13 | | ending prior to December 31, 2003 may be carried forward to any |
14 | | year ending on or after December 31, 2003. |
15 | | If an unused credit is carried forward to a given year from |
16 | | 2 or more
earlier years, that credit arising in the earliest |
17 | | year will be applied
first against the tax liability for the |
18 | | given year. If a tax liability for
the given year still |
19 | | remains, the credit from the next earliest year will
then be |
20 | | applied, and so on, until all credits have been used or no tax
|
21 | | liability for the given year remains. Any remaining unused |
22 | | credit or
credits then will be carried forward to the next |
23 | | following year in which a
tax liability is incurred, except |
24 | | that no credit can be carried forward to
a year which is more |
25 | | than 5 years after the year in which the expense for
which the |
26 | | credit is given was incurred. |
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1 | | No inference shall be drawn from Public Act 91-644 this |
2 | | amendatory Act of the 91st General
Assembly in construing this |
3 | | Section for taxable years beginning before January
1, 1999. |
4 | | It is the intent of the General Assembly that the research |
5 | | and development credit under this subsection (k) shall apply |
6 | | continuously for all tax years ending on or after December 31, |
7 | | 2004 and ending prior to January 1, 2027, including, but not |
8 | | limited to, the period beginning on January 1, 2016 and ending |
9 | | on July 6, 2017 ( the effective date of Public Act 100-22) this |
10 | | amendatory Act of the 100th General Assembly . All actions |
11 | | taken in reliance on the continuation of the credit under this |
12 | | subsection (k) by any taxpayer are hereby validated. |
13 | | (l) Environmental Remediation Tax Credit. |
14 | | (i) For tax years ending after December 31, 1997 and |
15 | | on or before
December 31, 2001, a taxpayer shall be |
16 | | allowed a credit against the tax
imposed by subsections |
17 | | (a) and (b) of this Section for certain amounts paid
for |
18 | | unreimbursed eligible remediation costs, as specified in |
19 | | this subsection.
For purposes of this Section, |
20 | | "unreimbursed eligible remediation costs" means
costs |
21 | | approved by the Illinois Environmental Protection Agency |
22 | | ("Agency") under
Section 58.14 of the Environmental |
23 | | Protection Act that were paid in performing
environmental |
24 | | remediation at a site for which a No Further Remediation |
25 | | Letter
was issued by the Agency and recorded under Section |
26 | | 58.10 of the Environmental
Protection Act. The credit must |
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1 | | be claimed for the taxable year in which
Agency approval |
2 | | of the eligible remediation costs is granted. The credit |
3 | | is
not available to any taxpayer if the taxpayer or any |
4 | | related party caused or
contributed to, in any material |
5 | | respect, a release of regulated substances on,
in, or |
6 | | under the site that was identified and addressed by the |
7 | | remedial
action pursuant to the Site Remediation Program |
8 | | of the Environmental Protection
Act. After the Pollution |
9 | | Control Board rules are adopted pursuant to the
Illinois |
10 | | Administrative Procedure Act for the administration and |
11 | | enforcement of
Section 58.9 of the Environmental |
12 | | Protection Act, determinations as to credit
availability |
13 | | for purposes of this Section shall be made consistent with |
14 | | those
rules. For purposes of this Section, "taxpayer" |
15 | | includes a person whose tax
attributes the taxpayer has |
16 | | succeeded to under Section 381 of the Internal
Revenue |
17 | | Code and "related party" includes the persons disallowed a |
18 | | deduction
for losses by paragraphs (b), (c), and (f)(1) of |
19 | | Section 267 of the Internal
Revenue Code by virtue of |
20 | | being a related taxpayer, as well as any of its
partners. |
21 | | The credit allowed against the tax imposed by subsections |
22 | | (a) and
(b) shall be equal to 25% of the unreimbursed |
23 | | eligible remediation costs in
excess of $100,000 per site, |
24 | | except that the $100,000 threshold shall not apply
to any |
25 | | site contained in an enterprise zone as determined by the |
26 | | Department of
Commerce and Community Affairs (now |
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1 | | Department of Commerce and Economic Opportunity). The |
2 | | total credit allowed shall not exceed
$40,000 per year |
3 | | with a maximum total of $150,000 per site. For partners |
4 | | and
shareholders of subchapter S corporations, there shall |
5 | | be allowed a credit
under this subsection to be determined |
6 | | in accordance with the determination of
income and |
7 | | distributive share of income under Sections 702 and 704 |
8 | | and
subchapter S of the Internal Revenue Code. |
9 | | (ii) A credit allowed under this subsection that is |
10 | | unused in the year
the credit is earned may be carried |
11 | | forward to each of the 5 taxable years
following the year |
12 | | for which the credit is first earned until it is used.
The |
13 | | term "unused credit" does not include any amounts of |
14 | | unreimbursed eligible
remediation costs in excess of the |
15 | | maximum credit per site authorized under
paragraph (i). |
16 | | This credit shall be applied first to the earliest year
|
17 | | for which there is a liability. If there is a credit under |
18 | | this subsection
from more than one tax year that is |
19 | | available to offset a liability, the
earliest credit |
20 | | arising under this subsection shall be applied first. A
|
21 | | credit allowed under this subsection may be sold to a |
22 | | buyer as part of a sale
of all or part of the remediation |
23 | | site for which the credit was granted. The
purchaser of a |
24 | | remediation site and the tax credit shall succeed to the |
25 | | unused
credit and remaining carry-forward period of the |
26 | | seller. To perfect the
transfer, the assignor shall record |
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1 | | the transfer in the chain of title for the
site and provide |
2 | | written notice to the Director of the Illinois Department |
3 | | of
Revenue of the assignor's intent to sell the |
4 | | remediation site and the amount of
the tax credit to be |
5 | | transferred as a portion of the sale. In no event may a
|
6 | | credit be transferred to any taxpayer if the taxpayer or a |
7 | | related party would
not be eligible under the provisions |
8 | | of subsection (i). |
9 | | (iii) For purposes of this Section, the term "site" |
10 | | shall have the same
meaning as under Section 58.2 of the |
11 | | Environmental Protection Act. |
12 | | (m) Education expense credit. Beginning with tax years |
13 | | ending after
December 31, 1999, a taxpayer who
is the |
14 | | custodian of one or more qualifying pupils shall be allowed a |
15 | | credit
against the tax imposed by subsections (a) and (b) of |
16 | | this Section for
qualified education expenses incurred on |
17 | | behalf of the qualifying pupils.
The credit shall be equal to |
18 | | 25% of qualified education expenses, but in no
event may the |
19 | | total credit under this subsection claimed by a
family that is |
20 | | the
custodian of qualifying pupils exceed (i) $500 for tax |
21 | | years ending prior to December 31, 2017, and (ii) $750 for tax |
22 | | years ending on or after December 31, 2017. In no event shall a |
23 | | credit under
this subsection reduce the taxpayer's liability |
24 | | under this Act to less than
zero. Notwithstanding any other |
25 | | provision of law, for taxable years beginning on or after |
26 | | January 1, 2017, no taxpayer may claim a credit under this |
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1 | | subsection (m) if the taxpayer's adjusted gross income for the |
2 | | taxable year exceeds (i) $500,000, in the case of spouses |
3 | | filing a joint federal tax return or (ii) $250,000, in the case |
4 | | of all other taxpayers. This subsection is exempt from the |
5 | | provisions of Section 250 of this
Act. |
6 | | For purposes of this subsection: |
7 | | "Qualifying pupils" means individuals who (i) are |
8 | | residents of the State of
Illinois, (ii) are under the age of |
9 | | 21 at the close of the school year for
which a credit is |
10 | | sought, and (iii) during the school year for which a credit
is |
11 | | sought were full-time pupils enrolled in a kindergarten |
12 | | through twelfth
grade education program at any school, as |
13 | | defined in this subsection. |
14 | | "Qualified education expense" means the amount incurred
on |
15 | | behalf of a qualifying pupil in excess of $250 for tuition, |
16 | | book fees, and
lab fees at the school in which the pupil is |
17 | | enrolled during the regular school
year. |
18 | | "School" means any public or nonpublic elementary or |
19 | | secondary school in
Illinois that is in compliance with Title |
20 | | VI of the Civil Rights Act of 1964
and attendance at which |
21 | | satisfies the requirements of Section 26-1 of the
School Code, |
22 | | except that nothing shall be construed to require a child to
|
23 | | attend any particular public or nonpublic school to qualify |
24 | | for the credit
under this Section. |
25 | | "Custodian" means, with respect to qualifying pupils, an |
26 | | Illinois resident
who is a parent, the parents, a legal |
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1 | | guardian, or the legal guardians of the
qualifying pupils. |
2 | | (n) River Edge Redevelopment Zone site remediation tax |
3 | | credit.
|
4 | | (i) For tax years ending on or after December 31, |
5 | | 2006, a taxpayer shall be allowed a credit against the tax |
6 | | imposed by subsections (a) and (b) of this Section for |
7 | | certain amounts paid for unreimbursed eligible remediation |
8 | | costs, as specified in this subsection. For purposes of |
9 | | this Section, "unreimbursed eligible remediation costs" |
10 | | means costs approved by the Illinois Environmental |
11 | | Protection Agency ("Agency") under Section 58.14a of the |
12 | | Environmental Protection Act that were paid in performing |
13 | | environmental remediation at a site within a River Edge |
14 | | Redevelopment Zone for which a No Further Remediation |
15 | | Letter was issued by the Agency and recorded under Section |
16 | | 58.10 of the Environmental Protection Act. The credit must |
17 | | be claimed for the taxable year in which Agency approval |
18 | | of the eligible remediation costs is granted. The credit |
19 | | is not available to any taxpayer if the taxpayer or any |
20 | | related party caused or contributed to, in any material |
21 | | respect, a release of regulated substances on, in, or |
22 | | under the site that was identified and addressed by the |
23 | | remedial action pursuant to the Site Remediation Program |
24 | | of the Environmental Protection Act. Determinations as to |
25 | | credit availability for purposes of this Section shall be |
26 | | made consistent with rules adopted by the Pollution |
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1 | | Control Board pursuant to the Illinois Administrative |
2 | | Procedure Act for the administration and enforcement of |
3 | | Section 58.9 of the Environmental Protection Act. For |
4 | | purposes of this Section, "taxpayer" includes a person |
5 | | whose tax attributes the taxpayer has succeeded to under |
6 | | Section 381 of the Internal Revenue Code and "related |
7 | | party" includes the persons disallowed a deduction for |
8 | | losses by paragraphs (b), (c), and (f)(1) of Section 267 |
9 | | of the Internal Revenue Code by virtue of being a related |
10 | | taxpayer, as well as any of its partners. The credit |
11 | | allowed against the tax imposed by subsections (a) and (b) |
12 | | shall be equal to 25% of the unreimbursed eligible |
13 | | remediation costs in excess of $100,000 per site. |
14 | | (ii) A credit allowed under this subsection that is |
15 | | unused in the year the credit is earned may be carried |
16 | | forward to each of the 5 taxable years following the year |
17 | | for which the credit is first earned until it is used. This |
18 | | credit shall be applied first to the earliest year for |
19 | | which there is a liability. If there is a credit under this |
20 | | subsection from more than one tax year that is available |
21 | | to offset a liability, the earliest credit arising under |
22 | | this subsection shall be applied first. A credit allowed |
23 | | under this subsection may be sold to a buyer as part of a |
24 | | sale of all or part of the remediation site for which the |
25 | | credit was granted. The purchaser of a remediation site |
26 | | and the tax credit shall succeed to the unused credit and |
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1 | | remaining carry-forward period of the seller. To perfect |
2 | | the transfer, the assignor shall record the transfer in |
3 | | the chain of title for the site and provide written notice |
4 | | to the Director of the Illinois Department of Revenue of |
5 | | the assignor's intent to sell the remediation site and the |
6 | | amount of the tax credit to be transferred as a portion of |
7 | | the sale. In no event may a credit be transferred to any |
8 | | taxpayer if the taxpayer or a related party would not be |
9 | | eligible under the provisions of subsection (i). |
10 | | (iii) For purposes of this Section, the term "site" |
11 | | shall have the same meaning as under Section 58.2 of the |
12 | | Environmental Protection Act. |
13 | | (o) For each of taxable years during the Compassionate Use |
14 | | of Medical Cannabis Program, a surcharge is imposed on all |
15 | | taxpayers on income arising from the sale or exchange of |
16 | | capital assets, depreciable business property, real property |
17 | | used in the trade or business, and Section 197 intangibles of |
18 | | an organization registrant under the Compassionate Use of |
19 | | Medical Cannabis Program Act. The amount of the surcharge is |
20 | | equal to the amount of federal income tax liability for the |
21 | | taxable year attributable to those sales and exchanges. The |
22 | | surcharge imposed does not apply if: |
23 | | (1) the medical cannabis cultivation center |
24 | | registration, medical cannabis dispensary registration, or |
25 | | the property of a registration is transferred as a result |
26 | | of any of the following: |
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1 | | (A) bankruptcy, a receivership, or a debt |
2 | | adjustment initiated by or against the initial |
3 | | registration or the substantial owners of the initial |
4 | | registration; |
5 | | (B) cancellation, revocation, or termination of |
6 | | any registration by the Illinois Department of Public |
7 | | Health; |
8 | | (C) a determination by the Illinois Department of |
9 | | Public Health that transfer of the registration is in |
10 | | the best interests of Illinois qualifying patients as |
11 | | defined by the Compassionate Use of Medical Cannabis |
12 | | Program Act; |
13 | | (D) the death of an owner of the equity interest in |
14 | | a registrant; |
15 | | (E) the acquisition of a controlling interest in |
16 | | the stock or substantially all of the assets of a |
17 | | publicly traded company; |
18 | | (F) a transfer by a parent company to a wholly |
19 | | owned subsidiary; or |
20 | | (G) the transfer or sale to or by one person to |
21 | | another person where both persons were initial owners |
22 | | of the registration when the registration was issued; |
23 | | or |
24 | | (2) the cannabis cultivation center registration, |
25 | | medical cannabis dispensary registration, or the |
26 | | controlling interest in a registrant's property is |
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1 | | transferred in a transaction to lineal descendants in |
2 | | which no gain or loss is recognized or as a result of a |
3 | | transaction in accordance with Section 351 of the Internal |
4 | | Revenue Code in which no gain or loss is recognized. |
5 | | (Source: P.A. 100-22, eff. 7-6-17; 101-9, eff. 6-5-19; 101-31, |
6 | | eff. 6-28-19; 101-207, eff. 8-2-19; 101-363, eff. 8-9-19; |
7 | | revised 11-18-20.) |
8 | | (Text of Section with the changes made by P.A. 101-8, |
9 | | which did not take effect (see Section 99 of P.A. 101-8))
|
10 | | Sec. 201. Tax imposed. |
11 | | (a) In general. A tax measured by net income is hereby |
12 | | imposed on every
individual, corporation, trust and estate for |
13 | | each taxable year ending
after July 31, 1969 on the privilege |
14 | | of earning or receiving income in or
as a resident of this |
15 | | State. Such tax shall be in addition to all other
occupation or |
16 | | privilege taxes imposed by this State or by any municipal
|
17 | | corporation or political subdivision thereof. |
18 | | (b) Rates. The tax imposed by subsection (a) of this |
19 | | Section shall be
determined as follows, except as adjusted by |
20 | | subsection (d-1): |
21 | | (1) In the case of an individual, trust or estate, for |
22 | | taxable years
ending prior to July 1, 1989, an amount |
23 | | equal to 2 1/2% of the taxpayer's
net income for the |
24 | | taxable year. |
25 | | (2) In the case of an individual, trust or estate, for |
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1 | | taxable years
beginning prior to July 1, 1989 and ending |
2 | | after June 30, 1989, an amount
equal to the sum of (i) 2 |
3 | | 1/2% of the taxpayer's net income for the period
prior to |
4 | | July 1, 1989, as calculated under Section 202.3, and (ii) |
5 | | 3% of the
taxpayer's net income for the period after June |
6 | | 30, 1989, as calculated
under Section 202.3. |
7 | | (3) In the case of an individual, trust or estate, for |
8 | | taxable years
beginning after June 30, 1989, and ending |
9 | | prior to January 1, 2011, an amount equal to 3% of the |
10 | | taxpayer's net
income for the taxable year. |
11 | | (4) In the case of an individual, trust, or estate, |
12 | | for taxable years beginning prior to January 1, 2011, and |
13 | | ending after December 31, 2010, an amount equal to the sum |
14 | | of (i) 3% of the taxpayer's net income for the period prior |
15 | | to January 1, 2011, as calculated under Section 202.5, and |
16 | | (ii) 5% of the taxpayer's net income for the period after |
17 | | December 31, 2010, as calculated under Section 202.5. |
18 | | (5) In the case of an individual, trust, or estate, |
19 | | for taxable years beginning on or after January 1, 2011, |
20 | | and ending prior to January 1, 2015, an amount equal to 5% |
21 | | of the taxpayer's net income for the taxable year. |
22 | | (5.1) In the case of an individual, trust, or estate, |
23 | | for taxable years beginning prior to January 1, 2015, and |
24 | | ending after December 31, 2014, an amount equal to the sum |
25 | | of (i) 5% of the taxpayer's net income for the period prior |
26 | | to January 1, 2015, as calculated under Section 202.5, and |
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1 | | (ii) 3.75% of the taxpayer's net income for the period |
2 | | after December 31, 2014, as calculated under Section |
3 | | 202.5. |
4 | | (5.2) In the case of an individual, trust, or estate, |
5 | | for taxable years beginning on or after January 1, 2015, |
6 | | and ending prior to July 1, 2017, an amount equal to 3.75% |
7 | | of the taxpayer's net income for the taxable year. |
8 | | (5.3) In the case of an individual, trust, or estate, |
9 | | for taxable years beginning prior to July 1, 2017, and |
10 | | ending after June 30, 2017, an amount equal to the sum of |
11 | | (i) 3.75% of the taxpayer's net income for the period |
12 | | prior to July 1, 2017, as calculated under Section 202.5, |
13 | | and (ii) 4.95% of the taxpayer's net income for the period |
14 | | after June 30, 2017, as calculated under Section 202.5. |
15 | | (5.4) In the case of an individual, trust, or estate, |
16 | | for taxable years beginning on or after July 1, 2017 and |
17 | | beginning prior to January 1, 2021 , an amount equal to |
18 | | 4.95% of the taxpayer's net income for the taxable year. |
19 | | (5.5) In the case of an individual, trust, or estate, |
20 | | for taxable years beginning on or after January 1, 2021, |
21 | | an amount calculated under the rate structure set forth in |
22 | | Section 201.1. |
23 | | (6) In the case of a corporation, for taxable years
|
24 | | ending prior to July 1, 1989, an amount equal to 4% of the
|
25 | | taxpayer's net income for the taxable year. |
26 | | (7) In the case of a corporation, for taxable years |
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1 | | beginning prior to
July 1, 1989 and ending after June 30, |
2 | | 1989, an amount equal to the sum of
(i) 4% of the |
3 | | taxpayer's net income for the period prior to July 1, |
4 | | 1989,
as calculated under Section 202.3, and (ii) 4.8% of |
5 | | the taxpayer's net
income for the period after June 30, |
6 | | 1989, as calculated under Section
202.3. |
7 | | (8) In the case of a corporation, for taxable years |
8 | | beginning after
June 30, 1989, and ending prior to January |
9 | | 1, 2011, an amount equal to 4.8% of the taxpayer's net |
10 | | income for the
taxable year. |
11 | | (9) In the case of a corporation, for taxable years |
12 | | beginning prior to January 1, 2011, and ending after |
13 | | December 31, 2010, an amount equal to the sum of (i) 4.8% |
14 | | of the taxpayer's net income for the period prior to |
15 | | January 1, 2011, as calculated under Section 202.5, and |
16 | | (ii) 7% of the taxpayer's net income for the period after |
17 | | December 31, 2010, as calculated under Section 202.5. |
18 | | (10) In the case of a corporation, for taxable years |
19 | | beginning on or after January 1, 2011, and ending prior to |
20 | | January 1, 2015, an amount equal to 7% of the taxpayer's |
21 | | net income for the taxable year. |
22 | | (11) In the case of a corporation, for taxable years |
23 | | beginning prior to January 1, 2015, and ending after |
24 | | December 31, 2014, an amount equal to the sum of (i) 7% of |
25 | | the taxpayer's net income for the period prior to January |
26 | | 1, 2015, as calculated under Section 202.5, and (ii) 5.25% |
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1 | | of the taxpayer's net income for the period after December |
2 | | 31, 2014, as calculated under Section 202.5. |
3 | | (12) In the case of a corporation, for taxable years |
4 | | beginning on or after January 1, 2015, and ending prior to |
5 | | July 1, 2017, an amount equal to 5.25% of the taxpayer's |
6 | | net income for the taxable year. |
7 | | (13) In the case of a corporation, for taxable years |
8 | | beginning prior to July 1, 2017, and ending after June 30, |
9 | | 2017, an amount equal to the sum of (i) 5.25% of the |
10 | | taxpayer's net income for the period prior to July 1, |
11 | | 2017, as calculated under Section 202.5, and (ii) 7% of |
12 | | the taxpayer's net income for the period after June 30, |
13 | | 2017, as calculated under Section 202.5. |
14 | | (14) In the case of a corporation, for taxable years |
15 | | beginning on or after July 1, 2017 and beginning prior to |
16 | | January 1, 2021 , an amount equal to 7% of the taxpayer's |
17 | | net income for the taxable year. |
18 | | (15) In the case of a corporation, for taxable years |
19 | | beginning on or after January 1, 2021, an amount equal to |
20 | | 7.99% 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.
|
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
|
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
|
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
|
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
|
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
|
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
|
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 | | (d-2) For taxable years beginning on or after January 1, |
23 | | 2021, a partnership or Subchapter S corporation may elect to |
24 | | pay a tax that is imposed on the partnership or Subchapter S |
25 | | corporation. This tax is computed by multiplying each |
26 | | pass-through owner's share of business income apportionable to |
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1 | | Illinois and nonbusiness income allocated to Illinois under |
2 | | Section 303 of this Act, if this share is not a net loss, by |
3 | | the applicable rates of tax for that pass-through owner under |
4 | | subsections (a) through (d) of this Section, and taking the |
5 | | sum of these amounts. This election shall be made on the |
6 | | partnership's or Subchapter S corporation's return filed under |
7 | | Section 502 in such manner as the Department may prescribe. |
8 | | (e) Investment credit. A taxpayer shall be allowed a |
9 | | credit
against the Personal Property Tax Replacement Income |
10 | | Tax for
investment in qualified property. |
11 | | (1) A taxpayer shall be allowed a credit equal to .5% |
12 | | of
the basis of qualified property placed in service |
13 | | during the taxable year,
provided such property is placed |
14 | | in service on or after
July 1, 1984. There shall be allowed |
15 | | an additional credit equal
to .5% of the basis of |
16 | | qualified property placed in service during the
taxable |
17 | | year, provided such property is placed in service on or
|
18 | | after July 1, 1986, and the taxpayer's base employment
|
19 | | within Illinois has increased by 1% or more over the |
20 | | preceding year as
determined by the taxpayer's employment |
21 | | records filed with the
Illinois Department of Employment |
22 | | Security. Taxpayers who are new to
Illinois shall be |
23 | | deemed to have met the 1% growth in base employment for
the |
24 | | first year in which they file employment records with the |
25 | | Illinois
Department of Employment Security. The provisions |
26 | | added to this Section by
Public Act 85-1200 (and restored |
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1 | | by Public Act 87-895) shall be
construed as declaratory of |
2 | | existing law and not as a new enactment. If,
in any year, |
3 | | the increase in base employment within Illinois over the
|
4 | | preceding year is less than 1%, the additional credit |
5 | | shall be limited to that
percentage times a fraction, the |
6 | | numerator of which is .5% and the denominator
of which is |
7 | | 1%, but shall not exceed .5%. The investment credit shall |
8 | | not be
allowed to the extent that it would reduce a |
9 | | taxpayer's liability in any tax
year below zero, nor may |
10 | | any credit for qualified property be allowed for any
year |
11 | | other than the year in which the property was placed in |
12 | | service in
Illinois. For tax years ending on or after |
13 | | December 31, 1987, and on or
before December 31, 1988, the |
14 | | credit shall be allowed for the tax year in
which the |
15 | | property is placed in service, or, if the amount of the |
16 | | credit
exceeds the tax liability for that year, whether it |
17 | | exceeds the original
liability or the liability as later |
18 | | amended, such excess may be carried
forward and applied to |
19 | | the tax liability of the 5 taxable years following
the |
20 | | excess credit years if the taxpayer (i) makes investments |
21 | | which cause
the creation of a minimum of 2,000 full-time |
22 | | equivalent jobs in Illinois,
(ii) is located in an |
23 | | enterprise zone established pursuant to the Illinois
|
24 | | Enterprise Zone Act and (iii) is certified by the |
25 | | Department of Commerce
and Community Affairs (now |
26 | | Department of Commerce and Economic Opportunity) as |
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1 | | complying with the requirements specified in
clause (i) |
2 | | and (ii) by July 1, 1986. The Department of Commerce and
|
3 | | Community Affairs (now Department of Commerce and Economic |
4 | | Opportunity) shall notify the Department of Revenue of all |
5 | | such
certifications immediately. For tax years ending |
6 | | after December 31, 1988,
the credit shall be allowed for |
7 | | the tax year in which the property is
placed in service, |
8 | | or, if the amount of the credit exceeds the tax
liability |
9 | | for that year, whether it exceeds the original liability |
10 | | or the
liability as later amended, such excess may be |
11 | | carried forward and applied
to the tax liability of the 5 |
12 | | taxable years following the excess credit
years. The |
13 | | credit shall be applied to the earliest year for which |
14 | | there is
a liability. If there is credit from more than one |
15 | | tax year that is
available to offset a liability, earlier |
16 | | credit shall be applied first. |
17 | | (2) The term "qualified property" means property |
18 | | which: |
19 | | (A) is tangible, whether new or used, including |
20 | | buildings and structural
components of buildings and |
21 | | signs that are real property, but not including
land |
22 | | or improvements to real property that are not a |
23 | | structural component of a
building such as |
24 | | landscaping, sewer lines, local access roads, fencing, |
25 | | parking
lots, and other appurtenances; |
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 | | (e); |
5 | | (C) is acquired by purchase as defined in Section |
6 | | 179(d) of
the Internal Revenue Code; |
7 | | (D) is used in Illinois by a taxpayer who is |
8 | | primarily engaged in
manufacturing, or in mining coal |
9 | | or fluorite, or in retailing, or was placed in service |
10 | | on or after July 1, 2006 in a River Edge Redevelopment |
11 | | Zone established pursuant to the River Edge |
12 | | Redevelopment Zone Act; and |
13 | | (E) has not previously been used in Illinois in |
14 | | such a manner and by
such a person as would qualify for |
15 | | the credit provided by this subsection
(e) or |
16 | | subsection (f). |
17 | | (3) For purposes of this subsection (e), |
18 | | "manufacturing" means
the material staging and production |
19 | | of tangible personal property by
procedures commonly |
20 | | regarded as manufacturing, processing, fabrication, or
|
21 | | assembling which changes some existing material into new |
22 | | shapes, new
qualities, or new combinations. For purposes |
23 | | of this subsection
(e) the term "mining" shall have the |
24 | | same meaning as the term "mining" in
Section 613(c) of the |
25 | | Internal Revenue Code. For purposes of this subsection
|
26 | | (e), the term "retailing" means the sale of tangible |
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1 | | personal property for use or consumption and not for |
2 | | resale, or
services rendered in conjunction with the sale |
3 | | of tangible personal property for use or consumption and |
4 | | not for resale. For purposes of this subsection (e), |
5 | | "tangible personal property" has the same meaning as when |
6 | | that term is used in the Retailers' Occupation Tax Act, |
7 | | and, for taxable years ending after December 31, 2008, |
8 | | does not include the generation, transmission, or |
9 | | distribution of electricity. |
10 | | (4) The basis of qualified property shall be the basis
|
11 | | used to compute the depreciation deduction for federal |
12 | | income tax purposes. |
13 | | (5) If the basis of the property for federal income |
14 | | tax depreciation
purposes is increased after it has been |
15 | | placed in service in Illinois by
the taxpayer, the amount |
16 | | of such increase shall be deemed property placed
in |
17 | | service on the date of such increase in basis. |
18 | | (6) The term "placed in service" shall have the same
|
19 | | meaning as under Section 46 of the Internal Revenue Code. |
20 | | (7) If during any taxable year, any property ceases to
|
21 | | be qualified property in the hands of the taxpayer within |
22 | | 48 months after
being placed in service, or the situs of |
23 | | any qualified property is
moved outside Illinois within 48 |
24 | | months after being placed in service, the
Personal |
25 | | Property Tax Replacement Income Tax for such taxable year |
26 | | shall be
increased. Such increase shall be determined by |
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1 | | (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 (7), 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 | | (8) Unless the investment credit is extended by law, |
12 | | the
basis of qualified property shall not include costs |
13 | | incurred after
December 31, 2018, except for costs |
14 | | incurred pursuant to a binding
contract entered into on or |
15 | | before December 31, 2018. |
16 | | (9) Each taxable year ending before December 31, 2000, |
17 | | a partnership may
elect to pass through to its
partners |
18 | | the credits to which the partnership is entitled under |
19 | | this subsection
(e) for the taxable year. A partner may |
20 | | use the credit allocated to him or her
under this |
21 | | paragraph only against the tax imposed in subsections (c) |
22 | | and (d) of
this Section. If the partnership makes that |
23 | | election, those credits shall be
allocated among the |
24 | | partners in the partnership in accordance with the rules
|
25 | | set forth in Section 704(b) of the Internal Revenue Code, |
26 | | and the rules
promulgated under that Section, and the |
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1 | | allocated amount of the credits shall
be allowed to the |
2 | | partners for that taxable year. The partnership shall make
|
3 | | this election on its Personal Property Tax Replacement |
4 | | Income Tax return for
that taxable year. The election to |
5 | | pass through the credits shall be
irrevocable. |
6 | | For taxable years ending on or after December 31, |
7 | | 2000, a
partner that qualifies its
partnership for a |
8 | | subtraction under subparagraph (I) of paragraph (2) of
|
9 | | subsection (d) of Section 203 or a shareholder that |
10 | | qualifies a Subchapter S
corporation for a subtraction |
11 | | under subparagraph (S) of paragraph (2) of
subsection (b) |
12 | | of Section 203 shall be allowed a credit under this |
13 | | subsection
(e) equal to its share of the credit earned |
14 | | under this subsection (e) during
the taxable year by the |
15 | | partnership or Subchapter S corporation, determined in
|
16 | | accordance with the determination of income and |
17 | | distributive share of
income under Sections 702 and 704 |
18 | | and Subchapter S of the Internal Revenue
Code. This |
19 | | paragraph is exempt from the provisions of Section 250. |
20 | | (f) Investment credit; Enterprise Zone; River Edge |
21 | | Redevelopment Zone. |
22 | | (1) A taxpayer shall be allowed a credit against the |
23 | | tax imposed
by subsections (a) and (b) of this Section for |
24 | | investment in qualified
property which is placed in |
25 | | service in an Enterprise Zone created
pursuant to the |
26 | | Illinois Enterprise Zone Act or, for property placed in |
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1 | | service on or after July 1, 2006, a River Edge |
2 | | Redevelopment Zone established pursuant to the River Edge |
3 | | Redevelopment Zone Act. 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 |
7 | | taxation, there shall be allowed a credit under
this |
8 | | subsection (f) to be determined in accordance with the |
9 | | determination
of income and distributive share of income |
10 | | under Sections 702 and 704 and
Subchapter S of the |
11 | | Internal Revenue Code. The credit shall be .5% of the
|
12 | | basis for such property. The credit shall be available |
13 | | only in the taxable
year in which the property is placed in |
14 | | service in the Enterprise Zone or River Edge Redevelopment |
15 | | Zone and
shall not be allowed to the extent that it would |
16 | | reduce a taxpayer's
liability for the tax imposed by |
17 | | subsections (a) and (b) of this Section to
below zero. For |
18 | | tax years ending on or after December 31, 1985, the credit
|
19 | | shall be allowed for the tax year in which the property is |
20 | | placed in
service, or, if the amount of the credit exceeds |
21 | | the tax liability for that
year, whether it exceeds the |
22 | | original liability or the liability as later
amended, such |
23 | | excess may be carried forward and applied to the tax
|
24 | | liability of the 5 taxable years following the excess |
25 | | credit year.
The credit shall be applied to the earliest |
26 | | year for which there is a
liability. If there is credit |
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1 | | from more than one tax year that is available
to offset a |
2 | | liability, the credit accruing first in time shall be |
3 | | applied
first. |
4 | | (2) The term qualified property means property which: |
5 | | (A) is tangible, whether new or used, including |
6 | | buildings and
structural components of buildings; |
7 | | (B) is depreciable pursuant to Section 167 of the |
8 | | Internal Revenue
Code, except that "3-year property" |
9 | | as defined in Section 168(c)(2)(A) of
that Code is not |
10 | | eligible for the credit provided by this subsection |
11 | | (f); |
12 | | (C) is acquired by purchase as defined in Section |
13 | | 179(d) of
the Internal Revenue Code; |
14 | | (D) is used in the Enterprise Zone or River Edge |
15 | | Redevelopment Zone by the taxpayer; and |
16 | | (E) has not been previously used in Illinois in |
17 | | such a manner and by
such a person as would qualify for |
18 | | the credit provided by this subsection
(f) or |
19 | | subsection (e). |
20 | | (3) The basis of qualified property shall be the basis |
21 | | used to compute
the depreciation deduction for federal |
22 | | income tax purposes. |
23 | | (4) If the basis of the property for federal income |
24 | | tax depreciation
purposes is increased after it has been |
25 | | placed in service in the Enterprise
Zone or River Edge |
26 | | Redevelopment Zone by the taxpayer, the amount of such |
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1 | | increase shall be deemed property
placed in service on the |
2 | | date of such increase in basis. |
3 | | (5) The term "placed in service" shall have the same |
4 | | meaning as under
Section 46 of the Internal Revenue Code. |
5 | | (6) If during any taxable year, any property ceases to |
6 | | be qualified
property in the hands of the taxpayer within |
7 | | 48 months after being placed
in service, or the situs of |
8 | | any qualified property is moved outside the
Enterprise |
9 | | Zone or River Edge Redevelopment Zone within 48 months |
10 | | after being placed in service, the tax
imposed under |
11 | | subsections (a) and (b) of this Section for such taxable |
12 | | year
shall be increased. Such increase shall be determined |
13 | | by (i) recomputing
the investment credit which would have |
14 | | been allowed for the year in which
credit for such |
15 | | property was originally allowed by eliminating such
|
16 | | property from such computation, and (ii) subtracting such |
17 | | recomputed credit
from the amount of credit previously |
18 | | allowed. For the purposes of this
paragraph (6), a |
19 | | reduction of the basis of qualified property resulting
|
20 | | from a redetermination of the purchase price shall be |
21 | | deemed a disposition
of qualified property to the extent |
22 | | of such reduction. |
23 | | (7) There shall be allowed an additional credit equal |
24 | | to 0.5% of the basis of qualified property placed in |
25 | | service during the taxable year in a River Edge |
26 | | Redevelopment Zone, provided such property is placed in |
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1 | | service on or after July 1, 2006, and the taxpayer's base |
2 | | employment within Illinois has increased by 1% or more |
3 | | over the preceding year as determined by the taxpayer's |
4 | | employment records filed with the Illinois Department of |
5 | | Employment Security. Taxpayers who are new to Illinois |
6 | | shall be deemed to have met the 1% growth in base |
7 | | employment for the first year in which they file |
8 | | employment records with the Illinois Department of |
9 | | Employment Security. If, in any year, the increase in base |
10 | | employment within Illinois over the preceding year is less |
11 | | than 1%, the additional credit shall be limited to that |
12 | | percentage times a fraction, the numerator of which is |
13 | | 0.5% and the denominator of which is 1%, but shall not |
14 | | exceed 0.5%.
|
15 | | (8) For taxable years beginning on or after January 1, |
16 | | 2021, there shall be allowed an Enterprise Zone |
17 | | construction jobs credit against the taxes imposed under |
18 | | subsections (a) and (b) of this Section as provided in |
19 | | Section 13 of the Illinois Enterprise Zone Act. |
20 | | The credit or credits may not reduce the taxpayer's |
21 | | liability to less than zero. If the amount of the credit or |
22 | | credits exceeds the taxpayer's liability, the excess may |
23 | | be carried forward and applied against the taxpayer's |
24 | | liability in succeeding calendar years in the same manner |
25 | | provided under paragraph (4) of Section 211 of this Act. |
26 | | The credit or credits shall be applied to the earliest |
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1 | | year for which there is a tax liability. If there are |
2 | | credits from more than one taxable year that are available |
3 | | to offset a liability, the earlier credit shall be applied |
4 | | first. |
5 | | For partners, shareholders of Subchapter S |
6 | | corporations, and owners of limited liability companies, |
7 | | if the liability company is treated as a partnership for |
8 | | the purposes of federal and State income taxation, there |
9 | | shall be allowed a credit under this Section to be |
10 | | determined in accordance with the determination of income |
11 | | and distributive share of income under Sections 702 and |
12 | | 704 and Subchapter S of the Internal Revenue Code. |
13 | | The total aggregate amount of credits awarded under |
14 | | the Blue Collar Jobs Act (Article 20 of Public Act 101-9 |
15 | | this amendatory Act of the 101st General Assembly ) shall |
16 | | not exceed $20,000,000 in any State fiscal year . |
17 | | This paragraph (8) is exempt from the provisions of |
18 | | Section 250. |
19 | | (g) (Blank). |
20 | | (h) Investment credit; High Impact Business. |
21 | | (1) Subject to subsections (b) and (b-5) of Section
|
22 | | 5.5 of the Illinois Enterprise Zone Act, a taxpayer shall |
23 | | be allowed a credit
against the tax imposed by subsections |
24 | | (a) and (b) of this Section for
investment in qualified
|
25 | | property which is placed in service by a Department of |
26 | | Commerce and Economic Opportunity
designated High Impact |
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1 | | Business. The credit shall be .5% of the basis
for such |
2 | | property. The credit shall not be available (i) until the |
3 | | minimum
investments in qualified property set forth in |
4 | | subdivision (a)(3)(A) of
Section 5.5 of the Illinois
|
5 | | Enterprise Zone Act have been satisfied
or (ii) until the |
6 | | time authorized in subsection (b-5) of the Illinois
|
7 | | Enterprise Zone Act for entities designated as High Impact |
8 | | Businesses under
subdivisions (a)(3)(B), (a)(3)(C), and |
9 | | (a)(3)(D) of Section 5.5 of the Illinois
Enterprise Zone |
10 | | Act, and shall not be allowed to the extent that it would
|
11 | | reduce a taxpayer's liability for the tax imposed by |
12 | | subsections (a) and (b) of
this Section to below zero. The |
13 | | credit applicable to such investments shall be
taken in |
14 | | the taxable year in which such investments have been |
15 | | completed. The
credit for additional investments beyond |
16 | | the minimum investment by a designated
high impact |
17 | | business authorized under subdivision (a)(3)(A) of Section |
18 | | 5.5 of
the Illinois Enterprise Zone Act shall be available |
19 | | only in the taxable year in
which the property is placed in |
20 | | service and shall not be allowed to the extent
that it |
21 | | would reduce a taxpayer's liability for the tax imposed by |
22 | | subsections
(a) and (b) of this Section to below zero.
For |
23 | | tax years ending on or after December 31, 1987, the credit |
24 | | shall be
allowed for the tax year in which the property is |
25 | | placed in service, or, if
the amount of the credit exceeds |
26 | | the tax liability for that year, whether
it exceeds the |
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1 | | original liability or the liability as later amended, such
|
2 | | excess may be carried forward and applied to the tax |
3 | | liability of the 5
taxable years following the excess |
4 | | credit year. The credit shall be
applied to the earliest |
5 | | year for which there is a liability. If there is
credit |
6 | | from more than one tax year that is available to offset a |
7 | | liability,
the credit accruing first in time shall be |
8 | | applied first. |
9 | | Changes made in this subdivision (h)(1) by Public Act |
10 | | 88-670
restore changes made by Public Act 85-1182 and |
11 | | reflect existing law. |
12 | | (2) The term qualified property means property which: |
13 | | (A) is tangible, whether new or used, including |
14 | | buildings and
structural components of buildings; |
15 | | (B) is depreciable pursuant to Section 167 of the |
16 | | Internal Revenue
Code, except that "3-year property" |
17 | | as defined in Section 168(c)(2)(A) of
that Code is not |
18 | | eligible for the credit provided by this subsection |
19 | | (h); |
20 | | (C) is acquired by purchase as defined in Section |
21 | | 179(d) of the
Internal Revenue Code; and |
22 | | (D) is not eligible for the Enterprise Zone |
23 | | Investment Credit provided
by subsection (f) of this |
24 | | Section. |
25 | | (3) The basis of qualified property shall be the basis |
26 | | used to compute
the depreciation deduction for federal |
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1 | | income tax purposes. |
2 | | (4) If the basis of the property for federal income |
3 | | tax depreciation
purposes is increased after it has been |
4 | | placed in service in a federally
designated Foreign Trade |
5 | | Zone or Sub-Zone located in Illinois by the taxpayer,
the |
6 | | amount of such increase shall be deemed property placed in |
7 | | service on
the date of such increase in basis. |
8 | | (5) The term "placed in service" shall have the same |
9 | | meaning as under
Section 46 of the Internal Revenue Code. |
10 | | (6) If during any taxable year ending on or before |
11 | | December 31, 1996,
any property ceases to be qualified
|
12 | | property in the hands of the taxpayer within 48 months |
13 | | after being placed
in service, or the situs of any |
14 | | qualified property is moved outside
Illinois within 48 |
15 | | months after being placed in service, the tax imposed
|
16 | | under subsections (a) and (b) of this Section for such |
17 | | taxable year shall
be increased. Such increase shall be |
18 | | determined by (i) recomputing the
investment credit which |
19 | | would have been allowed for the year in which
credit for |
20 | | such property was originally allowed by eliminating such
|
21 | | property from such computation, and (ii) subtracting such |
22 | | recomputed credit
from the amount of credit previously |
23 | | allowed. For the purposes of this
paragraph (6), a |
24 | | reduction of the basis of qualified property resulting
|
25 | | from a redetermination of the purchase price shall be |
26 | | deemed a disposition
of qualified property to the extent |
|
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1 | | of such reduction. |
2 | | (7) Beginning with tax years ending after December 31, |
3 | | 1996, if a
taxpayer qualifies for the credit under this |
4 | | subsection (h) and thereby is
granted a tax abatement and |
5 | | the taxpayer relocates its entire facility in
violation of |
6 | | the explicit terms and length of the contract under |
7 | | Section
18-183 of the Property Tax Code, the tax imposed |
8 | | under subsections
(a) and (b) of this Section shall be |
9 | | increased for the taxable year
in which the taxpayer |
10 | | relocated its facility by an amount equal to the
amount of |
11 | | credit received by the taxpayer under this subsection (h). |
12 | | (h-5) High Impact Business construction constructions jobs |
13 | | credit. For taxable years beginning on or after January 1, |
14 | | 2021, there shall also be allowed a High Impact Business |
15 | | construction jobs credit against the tax imposed under |
16 | | subsections (a) and (b) of this Section as provided in |
17 | | subsections (i) and (j) of Section 5.5 of the Illinois |
18 | | Enterprise Zone Act. |
19 | | The credit or credits may not reduce the taxpayer's |
20 | | liability to less than zero. If the amount of the credit or |
21 | | credits exceeds the taxpayer's liability, the excess may be |
22 | | carried forward and applied against the taxpayer's liability |
23 | | in succeeding calendar years in the manner provided under |
24 | | paragraph (4) of Section 211 of this Act. The credit or credits |
25 | | shall be applied to the earliest year for which there is a tax |
26 | | liability. If there are credits from more than one taxable |
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1 | | year that are available to offset a liability, the earlier |
2 | | credit shall be applied first. |
3 | | For partners, shareholders of Subchapter S corporations, |
4 | | and owners of limited liability companies, if the liability |
5 | | company is treated as a partnership for the purposes of |
6 | | federal and State income taxation, there shall be allowed a |
7 | | credit under this Section to be determined in accordance with |
8 | | the determination of income and distributive share of income |
9 | | under Sections 702 and 704 and Subchapter S of the Internal |
10 | | Revenue Code. |
11 | | The total aggregate amount of credits awarded under the |
12 | | Blue Collar Jobs Act (Article 20 of Public Act 101-9 this |
13 | | amendatory Act of the 101st General Assembly ) shall not exceed |
14 | | $20,000,000 in any State fiscal year . |
15 | | This subsection (h-5) is exempt from the provisions of |
16 | | Section 250. |
17 | | (i) Credit for Personal Property Tax Replacement Income |
18 | | Tax.
For tax years ending prior to December 31, 2003, a credit |
19 | | shall be allowed
against the tax imposed by
subsections (a) |
20 | | and (b) of this Section for the tax imposed by subsections (c)
|
21 | | and (d) of this Section. This credit shall be computed by |
22 | | multiplying the tax
imposed by subsections (c) and (d) of this |
23 | | Section by a fraction, the numerator
of which is base income |
24 | | allocable to Illinois and the denominator of which is
Illinois |
25 | | base income, and further multiplying the product by the tax |
26 | | rate
imposed by subsections (a) and (b) of this Section. |
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1 | | Any credit earned on or after December 31, 1986 under
this |
2 | | subsection which is unused in the year
the credit is computed |
3 | | because it exceeds the tax liability imposed by
subsections |
4 | | (a) and (b) for that year (whether it exceeds the original
|
5 | | liability or the liability as later amended) may be carried |
6 | | forward and
applied to the tax liability imposed by |
7 | | subsections (a) and (b) of the 5
taxable years following the |
8 | | excess credit year, provided that no credit may
be carried |
9 | | forward to any year ending on or
after December 31, 2003. This |
10 | | credit shall be
applied first to the earliest year for which |
11 | | there is a liability. If
there is a credit under this |
12 | | subsection from more than one tax year that is
available to |
13 | | offset a liability the earliest credit arising under this
|
14 | | subsection shall be applied first. |
15 | | If, during any taxable year ending on or after December |
16 | | 31, 1986, the
tax imposed by subsections (c) and (d) of this |
17 | | Section for which a taxpayer
has claimed a credit under this |
18 | | subsection (i) is reduced, the amount of
credit for such tax |
19 | | shall also be reduced. Such reduction shall be
determined by |
20 | | recomputing the credit to take into account the reduced tax
|
21 | | imposed by subsections (c) and (d). If any portion of the
|
22 | | reduced amount of credit has been carried to a different |
23 | | taxable year, an
amended return shall be filed for such |
24 | | taxable year to reduce the amount of
credit claimed. |
25 | | (j) Training expense credit. Beginning with tax years |
26 | | ending on or
after December 31, 1986 and prior to December 31, |
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1 | | 2003, a taxpayer shall be
allowed a credit against the
tax |
2 | | imposed by subsections (a) and (b) under this Section
for all |
3 | | amounts paid or accrued, on behalf of all persons
employed by |
4 | | the taxpayer in Illinois or Illinois residents employed
|
5 | | outside of Illinois by a taxpayer, for educational or |
6 | | vocational training in
semi-technical or technical fields or |
7 | | semi-skilled or skilled fields, which
were deducted from gross |
8 | | income in the computation of taxable income. The
credit |
9 | | against the tax imposed by subsections (a) and (b) shall be |
10 | | 1.6% of
such training expenses. For partners, shareholders of |
11 | | subchapter S
corporations, and owners of limited liability |
12 | | companies, if the liability
company is treated as a |
13 | | partnership for purposes of federal and State income
taxation, |
14 | | there shall be allowed a credit under this subsection (j) to be
|
15 | | determined in accordance with the determination of income and |
16 | | distributive
share of income under Sections 702 and 704 and |
17 | | subchapter S of the Internal
Revenue Code. |
18 | | Any credit allowed under this subsection which is unused |
19 | | in the year
the credit is earned may be carried forward to each |
20 | | of the 5 taxable
years following the year for which the credit |
21 | | is first computed until it is
used. This credit shall be |
22 | | applied first to the earliest year for which
there is a |
23 | | liability. If there is a credit under this subsection from |
24 | | more
than one tax year that is available to offset a liability , |
25 | | the earliest
credit arising under this subsection shall be |
26 | | applied first. No carryforward
credit may be claimed in any |
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1 | | tax year ending on or after
December 31, 2003. |
2 | | (k) Research and development credit. For tax years ending |
3 | | after July 1, 1990 and prior to
December 31, 2003, and |
4 | | beginning again for tax years ending on or after December 31, |
5 | | 2004, and ending prior to January 1, 2027, a taxpayer shall be
|
6 | | allowed a credit against the tax imposed by subsections (a) |
7 | | and (b) of this
Section for increasing research activities in |
8 | | this State. The credit
allowed against the tax imposed by |
9 | | subsections (a) and (b) shall be equal
to 6 1/2% of the |
10 | | qualifying expenditures for increasing research activities
in |
11 | | this State. For partners, shareholders of subchapter S |
12 | | corporations, and
owners of limited liability companies, if |
13 | | the liability company is treated as a
partnership for purposes |
14 | | of federal and State income taxation, there shall be
allowed a |
15 | | credit under this subsection to be determined in accordance |
16 | | with the
determination of income and distributive share of |
17 | | income under Sections 702 and
704 and subchapter S of the |
18 | | Internal Revenue Code. |
19 | | For purposes of this subsection, "qualifying expenditures" |
20 | | means the
qualifying expenditures as defined for the federal |
21 | | credit for increasing
research activities which would be |
22 | | allowable under Section 41 of the
Internal Revenue Code and |
23 | | which are conducted in this State, "qualifying
expenditures |
24 | | for increasing research activities in this State" means the
|
25 | | excess of qualifying expenditures for the taxable year in |
26 | | which incurred
over qualifying expenditures for the base |
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1 | | period, "qualifying expenditures
for the base period" means |
2 | | the average of the qualifying expenditures for
each year in |
3 | | the base period, and "base period" means the 3 taxable years
|
4 | | immediately preceding the taxable year for which the |
5 | | determination is
being made. |
6 | | Any credit in excess of the tax liability for the taxable |
7 | | year
may be carried forward. A taxpayer may elect to have the
|
8 | | unused credit shown on its final completed return carried over |
9 | | as a credit
against the tax liability for the following 5 |
10 | | taxable years or until it has
been fully used, whichever |
11 | | occurs first; provided that no credit earned in a tax year |
12 | | ending prior to December 31, 2003 may be carried forward to any |
13 | | year ending on or after December 31, 2003. |
14 | | If an unused credit is carried forward to a given year from |
15 | | 2 or more
earlier years, that credit arising in the earliest |
16 | | year will be applied
first against the tax liability for the |
17 | | given year. If a tax liability for
the given year still |
18 | | remains, the credit from the next earliest year will
then be |
19 | | applied, and so on, until all credits have been used or no tax
|
20 | | liability for the given year remains. Any remaining unused |
21 | | credit or
credits then will be carried forward to the next |
22 | | following year in which a
tax liability is incurred, except |
23 | | that no credit can be carried forward to
a year which is more |
24 | | than 5 years after the year in which the expense for
which the |
25 | | credit is given was incurred. |
26 | | No inference shall be drawn from Public Act 91-644 this |
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1 | | amendatory Act of the 91st General
Assembly in construing this |
2 | | Section for taxable years beginning before January
1, 1999. |
3 | | It is the intent of the General Assembly that the research |
4 | | and development credit under this subsection (k) shall apply |
5 | | continuously for all tax years ending on or after December 31, |
6 | | 2004 and ending prior to January 1, 2027, including, but not |
7 | | limited to, the period beginning on January 1, 2016 and ending |
8 | | on July 6, 2017 ( the effective date of Public Act 100-22) this |
9 | | amendatory Act of the 100th General Assembly . All actions |
10 | | taken in reliance on the continuation of the credit under this |
11 | | subsection (k) by any taxpayer are hereby validated. |
12 | | (l) Environmental Remediation Tax Credit. |
13 | | (i) For tax years ending after December 31, 1997 and |
14 | | on or before
December 31, 2001, a taxpayer shall be |
15 | | allowed a credit against the tax
imposed by subsections |
16 | | (a) and (b) of this Section for certain amounts paid
for |
17 | | unreimbursed eligible remediation costs, as specified in |
18 | | this subsection.
For purposes of this Section, |
19 | | "unreimbursed eligible remediation costs" means
costs |
20 | | approved by the Illinois Environmental Protection Agency |
21 | | ("Agency") under
Section 58.14 of the Environmental |
22 | | Protection Act that were paid in performing
environmental |
23 | | remediation at a site for which a No Further Remediation |
24 | | Letter
was issued by the Agency and recorded under Section |
25 | | 58.10 of the Environmental
Protection Act. The credit must |
26 | | be claimed for the taxable year in which
Agency approval |
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1 | | of the eligible remediation costs is granted. The credit |
2 | | is
not available to any taxpayer if the taxpayer or any |
3 | | related party caused or
contributed to, in any material |
4 | | respect, a release of regulated substances on,
in, or |
5 | | under the site that was identified and addressed by the |
6 | | remedial
action pursuant to the Site Remediation Program |
7 | | of the Environmental Protection
Act. After the Pollution |
8 | | Control Board rules are adopted pursuant to the
Illinois |
9 | | Administrative Procedure Act for the administration and |
10 | | enforcement of
Section 58.9 of the Environmental |
11 | | Protection Act, determinations as to credit
availability |
12 | | for purposes of this Section shall be made consistent with |
13 | | those
rules. For purposes of this Section, "taxpayer" |
14 | | includes a person whose tax
attributes the taxpayer has |
15 | | succeeded to under Section 381 of the Internal
Revenue |
16 | | Code and "related party" includes the persons disallowed a |
17 | | deduction
for losses by paragraphs (b), (c), and (f)(1) of |
18 | | Section 267 of the Internal
Revenue Code by virtue of |
19 | | being a related taxpayer, as well as any of its
partners. |
20 | | The credit allowed against the tax imposed by subsections |
21 | | (a) and
(b) shall be equal to 25% of the unreimbursed |
22 | | eligible remediation costs in
excess of $100,000 per site, |
23 | | except that the $100,000 threshold shall not apply
to any |
24 | | site contained in an enterprise zone as determined by the |
25 | | Department of
Commerce and Community Affairs (now |
26 | | Department of Commerce and Economic Opportunity). The |
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1 | | total credit allowed shall not exceed
$40,000 per year |
2 | | with a maximum total of $150,000 per site. For partners |
3 | | and
shareholders of subchapter S corporations, there shall |
4 | | be allowed a credit
under this subsection to be determined |
5 | | in accordance with the determination of
income and |
6 | | distributive share of income under Sections 702 and 704 |
7 | | and
subchapter S of the Internal Revenue Code. |
8 | | (ii) A credit allowed under this subsection that is |
9 | | unused in the year
the credit is earned may be carried |
10 | | forward to each of the 5 taxable years
following the year |
11 | | for which the credit is first earned until it is used.
The |
12 | | term "unused credit" does not include any amounts of |
13 | | unreimbursed eligible
remediation costs in excess of the |
14 | | maximum credit per site authorized under
paragraph (i). |
15 | | This credit shall be applied first to the earliest year
|
16 | | for which there is a liability. If there is a credit under |
17 | | this subsection
from more than one tax year that is |
18 | | available to offset a liability, the
earliest credit |
19 | | arising under this subsection shall be applied first. A
|
20 | | credit allowed under this subsection may be sold to a |
21 | | buyer as part of a sale
of all or part of the remediation |
22 | | site for which the credit was granted. The
purchaser of a |
23 | | remediation site and the tax credit shall succeed to the |
24 | | unused
credit and remaining carry-forward period of the |
25 | | seller. To perfect the
transfer, the assignor shall record |
26 | | the transfer in the chain of title for the
site and provide |
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1 | | written notice to the Director of the Illinois Department |
2 | | of
Revenue of the assignor's intent to sell the |
3 | | remediation site and the amount of
the tax credit to be |
4 | | transferred as a portion of the sale. In no event may a
|
5 | | credit be transferred to any taxpayer if the taxpayer or a |
6 | | related party would
not be eligible under the provisions |
7 | | of subsection (i). |
8 | | (iii) For purposes of this Section, the term "site" |
9 | | shall have the same
meaning as under Section 58.2 of the |
10 | | Environmental Protection Act. |
11 | | (m) Education expense credit. Beginning with tax years |
12 | | ending after
December 31, 1999, a taxpayer who
is the |
13 | | custodian of one or more qualifying pupils shall be allowed a |
14 | | credit
against the tax imposed by subsections (a) and (b) of |
15 | | this Section for
qualified education expenses incurred on |
16 | | behalf of the qualifying pupils.
The credit shall be equal to |
17 | | 25% of qualified education expenses, but in no
event may the |
18 | | total credit under this subsection claimed by a
family that is |
19 | | the
custodian of qualifying pupils exceed (i) $500 for tax |
20 | | years ending prior to December 31, 2017, and (ii) $750 for tax |
21 | | years ending on or after December 31, 2017. In no event shall a |
22 | | credit under
this subsection reduce the taxpayer's liability |
23 | | under this Act to less than
zero. Notwithstanding any other |
24 | | provision of law, for taxable years beginning on or after |
25 | | January 1, 2017, no taxpayer may claim a credit under this |
26 | | subsection (m) if the taxpayer's adjusted gross income for the |
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1 | | taxable year exceeds (i) $500,000, in the case of spouses |
2 | | filing a joint federal tax return or (ii) $250,000, in the case |
3 | | of all other taxpayers. This subsection is exempt from the |
4 | | provisions of Section 250 of this
Act. |
5 | | For purposes of this subsection: |
6 | | "Qualifying pupils" means individuals who (i) are |
7 | | residents of the State of
Illinois, (ii) are under the age of |
8 | | 21 at the close of the school year for
which a credit is |
9 | | sought, and (iii) during the school year for which a credit
is |
10 | | sought were full-time pupils enrolled in a kindergarten |
11 | | through twelfth
grade education program at any school, as |
12 | | defined in this subsection. |
13 | | "Qualified education expense" means the amount incurred
on |
14 | | behalf of a qualifying pupil in excess of $250 for tuition, |
15 | | book fees, and
lab fees at the school in which the pupil is |
16 | | enrolled during the regular school
year. |
17 | | "School" means any public or nonpublic elementary or |
18 | | secondary school in
Illinois that is in compliance with Title |
19 | | VI of the Civil Rights Act of 1964
and attendance at which |
20 | | satisfies the requirements of Section 26-1 of the
School Code, |
21 | | except that nothing shall be construed to require a child to
|
22 | | attend any particular public or nonpublic school to qualify |
23 | | for the credit
under this Section. |
24 | | "Custodian" means, with respect to qualifying pupils, an |
25 | | Illinois resident
who is a parent, the parents, a legal |
26 | | guardian, or the legal guardians of the
qualifying pupils. |
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1 | | (n) River Edge Redevelopment Zone site remediation tax |
2 | | credit.
|
3 | | (i) For tax years ending on or after December 31, |
4 | | 2006, a taxpayer shall be allowed a credit against the tax |
5 | | imposed by subsections (a) and (b) of this Section for |
6 | | certain amounts paid for unreimbursed eligible remediation |
7 | | costs, as specified in this subsection. For purposes of |
8 | | this Section, "unreimbursed eligible remediation costs" |
9 | | means costs approved by the Illinois Environmental |
10 | | Protection Agency ("Agency") under Section 58.14a of the |
11 | | Environmental Protection Act that were paid in performing |
12 | | environmental remediation at a site within a River Edge |
13 | | Redevelopment Zone for which a No Further Remediation |
14 | | Letter was issued by the Agency and recorded under Section |
15 | | 58.10 of the Environmental Protection Act. The credit must |
16 | | be claimed for the taxable year in which Agency approval |
17 | | of the eligible remediation costs is granted. The credit |
18 | | is not available to any taxpayer if the taxpayer or any |
19 | | related party caused or contributed to, in any material |
20 | | respect, a release of regulated substances on, in, or |
21 | | under the site that was identified and addressed by the |
22 | | remedial action pursuant to the Site Remediation Program |
23 | | of the Environmental Protection Act. Determinations as to |
24 | | credit availability for purposes of this Section shall be |
25 | | made consistent with rules adopted by the Pollution |
26 | | Control Board pursuant to the Illinois Administrative |
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1 | | Procedure Act for the administration and enforcement of |
2 | | Section 58.9 of the Environmental Protection Act. For |
3 | | purposes of this Section, "taxpayer" includes a person |
4 | | whose tax attributes the taxpayer has succeeded to under |
5 | | Section 381 of the Internal Revenue Code and "related |
6 | | party" includes the persons disallowed a deduction for |
7 | | losses by paragraphs (b), (c), and (f)(1) of Section 267 |
8 | | of the Internal Revenue Code by virtue of being a related |
9 | | taxpayer, as well as any of its partners. The credit |
10 | | allowed against the tax imposed by subsections (a) and (b) |
11 | | shall be equal to 25% of the unreimbursed eligible |
12 | | remediation costs in excess of $100,000 per site. |
13 | | (ii) A credit allowed under this subsection that is |
14 | | unused in the year the credit is earned may be carried |
15 | | forward to each of the 5 taxable years following the year |
16 | | for which the credit is first earned until it is used. This |
17 | | credit shall be applied first to the earliest year for |
18 | | which there is a liability. If there is a credit under this |
19 | | subsection from more than one tax year that is available |
20 | | to offset a liability, the earliest credit arising under |
21 | | this subsection shall be applied first. A credit allowed |
22 | | under this subsection may be sold to a buyer as part of a |
23 | | sale of all or part of the remediation site for which the |
24 | | credit was granted. The purchaser of a remediation site |
25 | | and the tax credit shall succeed to the unused credit and |
26 | | remaining carry-forward period of the seller. To perfect |
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1 | | the transfer, the assignor shall record the transfer in |
2 | | the chain of title for the site and provide written notice |
3 | | to the Director of the Illinois Department of Revenue of |
4 | | the assignor's intent to sell the remediation site and the |
5 | | amount of the tax credit to be transferred as a portion of |
6 | | the sale. In no event may a credit be transferred to any |
7 | | taxpayer if the taxpayer or a related party would not be |
8 | | eligible under the provisions of subsection (i). |
9 | | (iii) For purposes of this Section, the term "site" |
10 | | shall have the same meaning as under Section 58.2 of the |
11 | | Environmental Protection Act. |
12 | | (o) For each of taxable years during the Compassionate Use |
13 | | of Medical Cannabis Program, a surcharge is imposed on all |
14 | | taxpayers on income arising from the sale or exchange of |
15 | | capital assets, depreciable business property, real property |
16 | | used in the trade or business, and Section 197 intangibles of |
17 | | an organization registrant under the Compassionate Use of |
18 | | Medical Cannabis Program Act. The amount of the surcharge is |
19 | | equal to the amount of federal income tax liability for the |
20 | | taxable year attributable to those sales and exchanges. The |
21 | | surcharge imposed does not apply if: |
22 | | (1) the medical cannabis cultivation center |
23 | | registration, medical cannabis dispensary registration, or |
24 | | the property of a registration is transferred as a result |
25 | | of any of the following: |
26 | | (A) bankruptcy, a receivership, or a debt |
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1 | | adjustment initiated by or against the initial |
2 | | registration or the substantial owners of the initial |
3 | | registration; |
4 | | (B) cancellation, revocation, or termination of |
5 | | any registration by the Illinois Department of Public |
6 | | Health; |
7 | | (C) a determination by the Illinois Department of |
8 | | Public Health that transfer of the registration is in |
9 | | the best interests of Illinois qualifying patients as |
10 | | defined by the Compassionate Use of Medical Cannabis |
11 | | Program Act; |
12 | | (D) the death of an owner of the equity interest in |
13 | | a registrant; |
14 | | (E) the acquisition of a controlling interest in |
15 | | the stock or substantially all of the assets of a |
16 | | publicly traded company; |
17 | | (F) a transfer by a parent company to a wholly |
18 | | owned subsidiary; or |
19 | | (G) the transfer or sale to or by one person to |
20 | | another person where both persons were initial owners |
21 | | of the registration when the registration was issued; |
22 | | or |
23 | | (2) the cannabis cultivation center registration, |
24 | | medical cannabis dispensary registration, or the |
25 | | controlling interest in a registrant's property is |
26 | | transferred in a transaction to lineal descendants in |
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1 | | which no gain or loss is recognized or as a result of a |
2 | | transaction in accordance with Section 351 of the Internal |
3 | | Revenue Code in which no gain or loss is recognized. |
4 | | (Source: P.A. 100-22, eff. 7-6-17; 101-8, see Section 99 for |
5 | | effective date; 101-9, eff. 6-5-19; 101-31, eff. 6-28-19; |
6 | | 101-207, eff. 8-2-19; 101-363, eff. 8-9-19; revised 11-18-20.) |
7 | | (35 ILCS 5/203) (from Ch. 120, par. 2-203) |
8 | | Sec. 203. Base income defined. |
9 | | (a) Individuals. |
10 | | (1) In general. In the case of an individual, base |
11 | | income means an
amount equal to the taxpayer's adjusted |
12 | | gross income for the taxable
year as modified by paragraph |
13 | | (2). |
14 | | (2) Modifications. The adjusted gross income referred |
15 | | to in
paragraph (1) shall be modified by adding thereto |
16 | | the sum of the
following amounts: |
17 | | (A) An amount equal to all amounts paid or accrued |
18 | | to the taxpayer
as interest or dividends during the |
19 | | taxable year to the extent excluded
from gross income |
20 | | in the computation of adjusted gross income, except |
21 | | stock
dividends of qualified public utilities |
22 | | described in Section 305(e) of the
Internal Revenue |
23 | | Code; |
24 | | (B) An amount equal to the amount of tax imposed by |
25 | | this Act to the
extent deducted from gross income in |
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1 | | the computation of adjusted gross
income for the |
2 | | taxable year; |
3 | | (B-1) For Illinois residents, an amount equal to |
4 | | the amount of tax imposed by other state and local |
5 | | jurisdictions on partnerships or Subchapter S |
6 | | corporations in which the resident is a direct or |
7 | | indirect owner to the extent deducted from gross |
8 | | income in the resident's computation of adjusted gross |
9 | | income for the taxable year; |
10 | | (C) An amount equal to the amount received during |
11 | | the taxable year
as a recovery or refund of real |
12 | | property taxes paid with respect to the
taxpayer's |
13 | | principal residence under the Revenue Act of
1939 and |
14 | | for which a deduction was previously taken under |
15 | | subparagraph (L) of
this paragraph (2) prior to July |
16 | | 1, 1991, the retrospective application date of
Article |
17 | | 4 of Public Act 87-17. In the case of multi-unit or |
18 | | multi-use
structures and farm dwellings, the taxes on |
19 | | the taxpayer's principal residence
shall be that |
20 | | portion of the total taxes for the entire property |
21 | | which is
attributable to such principal residence; |
22 | | (D) An amount equal to the amount of the capital |
23 | | gain deduction
allowable under the Internal Revenue |
24 | | Code, to the extent deducted from gross
income in the |
25 | | computation of adjusted gross income; |
26 | | (D-5) An amount, to the extent not included in |
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1 | | adjusted gross income,
equal to the amount of money |
2 | | withdrawn by the taxpayer in the taxable year from
a |
3 | | medical care savings account and the interest earned |
4 | | on the account in the
taxable year of a withdrawal |
5 | | pursuant to subsection (b) of Section 20 of the
|
6 | | Medical Care Savings Account Act or subsection (b) of |
7 | | Section 20 of the
Medical Care Savings Account Act of |
8 | | 2000; |
9 | | (D-10) For taxable years ending after December 31, |
10 | | 1997, an
amount equal to any eligible remediation |
11 | | costs that the individual
deducted in computing |
12 | | adjusted gross income and for which the
individual |
13 | | claims a credit under subsection (l) of Section 201; |
14 | | (D-15) 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; |
19 | | (D-16) 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 (D-15), then |
23 | | an amount equal
to the aggregate amount of the |
24 | | deductions taken in all taxable
years under |
25 | | subparagraph (Z) 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 (Z), 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 | | (D-17) 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 foreign person's business activity outside |
17 | | 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 under Sections 951 through |
6 | | 964 of the Internal Revenue Code and amounts included |
7 | | in gross income under Section 78 of the Internal |
8 | | Revenue Code) with respect to the stock of the same |
9 | | person to whom the interest was paid, accrued, or |
10 | | 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 | | (D-18) 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 under Sections 951 through 964 of the Internal |
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1 | | Revenue Code and amounts included in gross income |
2 | | under Section 78 of the Internal Revenue Code) with |
3 | | respect to the stock of the same person to whom the |
4 | | intangible expenses and costs were directly or |
5 | | indirectly paid, incurred, or accrued. The preceding |
6 | | sentence does not apply to the extent that the same |
7 | | dividends caused a reduction to the addition |
8 | | modification required under Section 203(a)(2)(D-17) of |
9 | | this Act. As used in this subparagraph, the term |
10 | | "intangible expenses and costs" includes (1) expenses, |
11 | | losses, and costs for, or related to, the direct or |
12 | | indirect acquisition, use, maintenance or management, |
13 | | ownership, sale, exchange, or any other disposition of |
14 | | intangible property; (2) losses incurred, directly or |
15 | | indirectly, from factoring transactions or discounting |
16 | | transactions; (3) royalty, patent, technical, and |
17 | | copyright fees; (4) licensing fees; and (5) other |
18 | | similar expenses and costs.
For purposes of this |
19 | | subparagraph, "intangible property" includes patents, |
20 | | patent applications, trade names, trademarks, service |
21 | | marks, copyrights, mask works, trade secrets, and |
22 | | 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 | | (D-19) 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(a)(2)(D-17) or Section 203(a)(2)(D-18) of this |
13 | | Act ; .
|
14 | | (D-20) For taxable years beginning on or after |
15 | | January 1,
2002 and ending on or before December 31, |
16 | | 2006, in
the
case of a distribution from a qualified |
17 | | tuition program under Section 529 of
the Internal |
18 | | Revenue Code, other than (i) a distribution from a |
19 | | College Savings
Pool created under Section 16.5 of the |
20 | | State Treasurer Act or (ii) a
distribution from the |
21 | | Illinois Prepaid Tuition Trust Fund, an amount equal |
22 | | to
the amount excluded from gross income under Section |
23 | | 529(c)(3)(B). For taxable years beginning on or after |
24 | | January 1, 2007, in the case of a distribution from a |
25 | | qualified tuition program under Section 529 of the |
26 | | Internal Revenue Code, other than (i) a distribution |
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1 | | from a College Savings Pool created under Section 16.5 |
2 | | of the State Treasurer Act, (ii) a distribution from |
3 | | the Illinois Prepaid Tuition Trust Fund, or (iii) a |
4 | | distribution from a qualified tuition program under |
5 | | Section 529 of the Internal Revenue Code that (I) |
6 | | adopts and determines that its offering materials |
7 | | comply with the College Savings Plans Network's |
8 | | disclosure principles and (II) has made reasonable |
9 | | efforts to inform in-state residents of the existence |
10 | | of in-state qualified tuition programs by informing |
11 | | Illinois residents directly and, where applicable, to |
12 | | inform financial intermediaries distributing the |
13 | | program to inform in-state residents of the existence |
14 | | of in-state qualified tuition programs at least |
15 | | annually, an amount equal to the amount excluded from |
16 | | gross income under Section 529(c)(3)(B). |
17 | | For the purposes of this subparagraph (D-20), a |
18 | | qualified tuition program has made reasonable efforts |
19 | | if it makes disclosures (which may use the term |
20 | | "in-state program" or "in-state plan" and need not |
21 | | specifically refer to Illinois or its qualified |
22 | | programs by name) (i) directly to prospective |
23 | | participants in its offering materials or makes a |
24 | | public disclosure, such as a website posting; and (ii) |
25 | | where applicable, to intermediaries selling the |
26 | | out-of-state program in the same manner that the |
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1 | | out-of-state program distributes its offering |
2 | | materials; |
3 | | (D-20.5) For taxable years beginning on or after |
4 | | January 1, 2018, in the case of a distribution from a |
5 | | qualified ABLE program under Section 529A of the |
6 | | Internal Revenue Code, other than a distribution from |
7 | | a qualified ABLE program created under Section 16.6 of |
8 | | the State Treasurer Act, an amount equal to the amount |
9 | | excluded from gross income under Section 529A(c)(1)(B) |
10 | | of the Internal Revenue Code; |
11 | | (D-21) For taxable years beginning on or after |
12 | | January 1, 2007, in the case of transfer of moneys from |
13 | | a qualified tuition program under Section 529 of the |
14 | | Internal Revenue Code that is administered by the |
15 | | State to an out-of-state program, an amount equal to |
16 | | the amount of moneys previously deducted from base |
17 | | income under subsection (a)(2)(Y) of this Section; |
18 | | (D-21.5) For taxable years beginning on or after |
19 | | January 1, 2018, in the case of the transfer of moneys |
20 | | from a qualified tuition program under Section 529 or |
21 | | a qualified ABLE program under Section 529A of the |
22 | | Internal Revenue Code that is administered by this |
23 | | State to an ABLE account established under an |
24 | | out-of-state ABLE account program, an amount equal to |
25 | | the contribution component of the transferred amount |
26 | | that was previously deducted from base income under |
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1 | | subsection (a)(2)(Y) or subsection (a)(2)(HH) of this |
2 | | Section; |
3 | | (D-22) For taxable years beginning on or after |
4 | | January 1, 2009, and prior to January 1, 2018, in the |
5 | | case of a nonqualified withdrawal or refund of moneys |
6 | | from a qualified tuition program under Section 529 of |
7 | | the Internal Revenue Code administered by the State |
8 | | that is not used for qualified expenses at an eligible |
9 | | education institution, an amount equal to the |
10 | | contribution component of the nonqualified withdrawal |
11 | | or refund that was previously deducted from base |
12 | | income under subsection (a)(2)(y) of this Section, |
13 | | provided that the withdrawal or refund did not result |
14 | | from the beneficiary's death or disability. For |
15 | | taxable years beginning on or after January 1, 2018: |
16 | | (1) in the case of a nonqualified withdrawal or |
17 | | refund, as defined under Section
16.5 of the State |
18 | | Treasurer Act, of moneys from a qualified tuition |
19 | | program under Section 529 of the Internal Revenue Code |
20 | | administered by the State, an amount equal to the |
21 | | contribution component of the nonqualified withdrawal |
22 | | or refund that was previously deducted from base
|
23 | | income under subsection (a)(2)(Y) of this Section, and |
24 | | (2) in the case of a nonqualified withdrawal or refund |
25 | | from a qualified ABLE program under Section 529A of |
26 | | the Internal Revenue Code administered by the State |
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1 | | that is not used for qualified disability expenses, an |
2 | | amount equal to the contribution component of the |
3 | | nonqualified withdrawal or refund that was previously |
4 | | deducted from base income under subsection (a)(2)(HH) |
5 | | of this Section; |
6 | | (D-23) An amount equal to the credit allowable to |
7 | | the taxpayer under Section 218(a) of this Act, |
8 | | determined without regard to Section 218(c) of this |
9 | | Act; |
10 | | (D-24) For taxable years ending on or after |
11 | | December 31, 2017, an amount equal to the deduction |
12 | | allowed under Section 199 of the Internal Revenue Code |
13 | | for the taxable year; |
14 | | and by deducting from the total so obtained the
sum of the |
15 | | following amounts: |
16 | | (E) For taxable years ending before December 31, |
17 | | 2001,
any amount included in such total in respect of |
18 | | any compensation
(including but not limited to any |
19 | | compensation paid or accrued to a
serviceman while a |
20 | | prisoner of war or missing in action) paid to a |
21 | | resident
by reason of being on active duty in the Armed |
22 | | Forces of the United States
and in respect of any |
23 | | compensation paid or accrued to a resident who as a
|
24 | | governmental employee was a prisoner of war or missing |
25 | | in action, and in
respect of any compensation paid to a |
26 | | resident in 1971 or thereafter for
annual training |
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1 | | performed pursuant to Sections 502 and 503, Title 32,
|
2 | | United States Code as a member of the Illinois |
3 | | National Guard or, beginning with taxable years ending |
4 | | on or after December 31, 2007, the National Guard of |
5 | | any other state.
For taxable years ending on or after |
6 | | December 31, 2001, any amount included in
such total |
7 | | in respect of any compensation (including but not |
8 | | limited to any
compensation paid or accrued to a |
9 | | serviceman while a prisoner of war or missing
in |
10 | | action) paid to a resident by reason of being a member |
11 | | of any component of
the Armed Forces of the United |
12 | | States and in respect of any compensation paid
or |
13 | | accrued to a resident who as a governmental employee |
14 | | was a prisoner of war
or missing in action, and in |
15 | | respect of any compensation paid to a resident in
2001 |
16 | | or thereafter by reason of being a member of the |
17 | | Illinois National Guard or, beginning with taxable |
18 | | years ending on or after December 31, 2007, the |
19 | | National Guard of any other state.
The provisions of |
20 | | this subparagraph (E) are exempt
from the provisions |
21 | | of Section 250; |
22 | | (F) An amount equal to all amounts included in |
23 | | such total pursuant
to the provisions of Sections |
24 | | 402(a), 402(c), 403(a), 403(b), 406(a), 407(a),
and |
25 | | 408 of the Internal Revenue Code, or included in such |
26 | | total as
distributions under the provisions of any |
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1 | | retirement or disability plan for
employees of any |
2 | | governmental agency or unit, or retirement payments to
|
3 | | retired partners, which payments are excluded in |
4 | | computing net earnings
from self employment by Section |
5 | | 1402 of the Internal Revenue Code and
regulations |
6 | | adopted pursuant thereto; |
7 | | (G) The valuation limitation amount; |
8 | | (H) An amount equal to the amount of any tax |
9 | | imposed by this Act
which was refunded to the taxpayer |
10 | | and included in such total for the
taxable year; |
11 | | (I) An amount equal to all amounts included in |
12 | | such total pursuant
to the provisions of Section 111 |
13 | | of the Internal Revenue Code as a
recovery of items |
14 | | previously deducted from adjusted gross income in the
|
15 | | computation of taxable income; |
16 | | (J) An amount equal to those dividends included in |
17 | | such total which were
paid by a corporation which |
18 | | conducts business operations in a River Edge |
19 | | Redevelopment Zone or zones created under the River |
20 | | Edge Redevelopment Zone Act, and conducts
|
21 | | substantially all of its operations in a River Edge |
22 | | Redevelopment Zone or zones. This subparagraph (J) is |
23 | | exempt from the provisions of Section 250; |
24 | | (K) An amount equal to those dividends included in |
25 | | such total that
were paid by a corporation that |
26 | | conducts business operations in a federally
designated |
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1 | | Foreign Trade Zone or Sub-Zone and that is designated |
2 | | a High Impact
Business located in Illinois; provided |
3 | | that dividends eligible for the
deduction provided in |
4 | | subparagraph (J) of paragraph (2) of this subsection
|
5 | | shall not be eligible for the deduction provided under |
6 | | this subparagraph
(K); |
7 | | (L) For taxable years ending after December 31, |
8 | | 1983, an amount equal to
all social security benefits |
9 | | and railroad retirement benefits included in
such |
10 | | total pursuant to Sections 72(r) and 86 of the |
11 | | Internal Revenue Code; |
12 | | (M) With the exception of any amounts subtracted |
13 | | under subparagraph
(N), an amount equal to the sum of |
14 | | all amounts disallowed as
deductions by (i) Sections |
15 | | 171(a)(2) , and 265(a)(2) of the Internal Revenue Code, |
16 | | and all amounts of expenses allocable
to interest and |
17 | | disallowed as deductions by Section 265(a)(1) of the |
18 | | Internal
Revenue Code;
and (ii) for taxable years
|
19 | | ending on or after August 13, 1999, Sections |
20 | | 171(a)(2), 265,
280C, and 832(b)(5)(B)(i) of the |
21 | | Internal Revenue Code, plus, for taxable years ending |
22 | | on or after December 31, 2011, Section 45G(e)(3) of |
23 | | the Internal Revenue Code and, for taxable years |
24 | | ending on or after December 31, 2008, any amount |
25 | | included in gross income under Section 87 of the |
26 | | Internal Revenue Code; the provisions of this
|
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1 | | subparagraph are exempt from the provisions of Section |
2 | | 250; |
3 | | (N) An amount equal to all amounts included in |
4 | | such total which are
exempt from taxation by this |
5 | | State either by reason of its statutes or
Constitution
|
6 | | or by reason of the Constitution, treaties or statutes |
7 | | of the United States;
provided that, in the case of any |
8 | | statute of this State that exempts income
derived from |
9 | | bonds or other obligations from the tax imposed under |
10 | | this Act,
the amount exempted shall be the interest |
11 | | net of bond premium amortization; |
12 | | (O) An amount equal to any contribution made to a |
13 | | job training
project established pursuant to the Tax |
14 | | Increment Allocation Redevelopment Act; |
15 | | (P) An amount equal to the amount of the deduction |
16 | | used to compute the
federal income tax credit for |
17 | | restoration of substantial amounts held under
claim of |
18 | | right for the taxable year pursuant to Section 1341 of |
19 | | the
Internal Revenue Code or of any itemized deduction |
20 | | taken from adjusted gross income in the computation of |
21 | | taxable income for restoration of substantial amounts |
22 | | held under claim of right for the taxable year; |
23 | | (Q) An amount equal to any amounts included in |
24 | | such total, received by
the taxpayer as an |
25 | | acceleration in the payment of life, endowment or |
26 | | annuity
benefits in advance of the time they would |
|
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1 | | otherwise be payable as an indemnity
for a terminal |
2 | | illness; |
3 | | (R) An amount equal to the amount of any federal or |
4 | | State bonus paid
to veterans of the Persian Gulf War; |
5 | | (S) An amount, to the extent included in adjusted |
6 | | gross income, equal
to the amount of a contribution |
7 | | made in the taxable year on behalf of the
taxpayer to a |
8 | | medical care savings account established under the |
9 | | Medical Care
Savings Account Act or the Medical Care |
10 | | Savings Account Act of 2000 to the
extent the |
11 | | contribution is accepted by the account
administrator |
12 | | as provided in that Act; |
13 | | (T) An amount, to the extent included in adjusted |
14 | | gross income, equal to
the amount of interest earned |
15 | | in the taxable year on a medical care savings
account |
16 | | established under the Medical Care Savings Account Act |
17 | | or the Medical
Care Savings Account Act of 2000 on |
18 | | behalf of the
taxpayer, other than interest added |
19 | | pursuant to item (D-5) of this paragraph
(2); |
20 | | (U) For one taxable year beginning on or after |
21 | | January 1,
1994, an
amount equal to the total amount of |
22 | | tax imposed and paid under subsections (a)
and (b) of |
23 | | Section 201 of this Act on grant amounts received by |
24 | | the taxpayer
under the Nursing Home Grant Assistance |
25 | | Act during the taxpayer's taxable years
1992 and 1993; |
26 | | (V) Beginning with tax years ending on or after |
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1 | | December 31, 1995 and
ending with tax years ending on |
2 | | or before December 31, 2004, an amount equal to
the |
3 | | amount paid by a taxpayer who is a
self-employed |
4 | | taxpayer, a partner of a partnership, or a
shareholder |
5 | | in a Subchapter S corporation for health insurance or |
6 | | long-term
care insurance for that taxpayer or that |
7 | | taxpayer's spouse or dependents, to
the extent that |
8 | | the amount paid for that health insurance or long-term |
9 | | care
insurance may be deducted under Section 213 of |
10 | | the Internal Revenue Code, has not been deducted on |
11 | | the federal income tax return of the taxpayer,
and |
12 | | does not exceed the taxable income attributable to |
13 | | that taxpayer's income,
self-employment income, or |
14 | | Subchapter S corporation income; except that no
|
15 | | deduction shall be allowed under this item (V) if the |
16 | | taxpayer is eligible to
participate in any health |
17 | | insurance or long-term care insurance plan of an
|
18 | | employer of the taxpayer or the taxpayer's
spouse. The |
19 | | amount of the health insurance and long-term care |
20 | | insurance
subtracted under this item (V) shall be |
21 | | determined by multiplying total
health insurance and |
22 | | long-term care insurance premiums paid by the taxpayer
|
23 | | times a number that represents the fractional |
24 | | percentage of eligible medical
expenses under Section |
25 | | 213 of the Internal Revenue Code of 1986 not actually
|
26 | | deducted on the taxpayer's federal income tax return; |
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1 | | (W) For taxable years beginning on or after |
2 | | January 1, 1998,
all amounts included in the |
3 | | taxpayer's federal gross income
in the taxable year |
4 | | from amounts converted from a regular IRA to a Roth |
5 | | IRA.
This paragraph is exempt from the provisions of |
6 | | Section
250; |
7 | | (X) For taxable year 1999 and thereafter, an |
8 | | amount equal to the
amount of any (i) distributions, |
9 | | to the extent includible in gross income for
federal |
10 | | income tax purposes, made to the taxpayer because of |
11 | | his or her status
as a victim of persecution for racial |
12 | | or religious reasons by Nazi Germany or
any other Axis |
13 | | regime or as an heir of the victim and (ii) items
of |
14 | | income, to the extent
includible in gross income for |
15 | | federal income tax purposes, attributable to,
derived |
16 | | from or in any way related to assets stolen from, |
17 | | hidden from, or
otherwise lost to a victim of
|
18 | | persecution for racial or religious reasons by Nazi |
19 | | Germany or any other Axis
regime immediately prior to, |
20 | | during, and immediately after World War II,
including, |
21 | | but
not limited to, interest on the proceeds |
22 | | receivable as insurance
under policies issued to a |
23 | | victim of persecution for racial or religious
reasons
|
24 | | by Nazi Germany or any other Axis regime by European |
25 | | insurance companies
immediately prior to and during |
26 | | World War II;
provided, however, this subtraction from |
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1 | | federal adjusted gross income does not
apply to assets |
2 | | acquired with such assets or with the proceeds from |
3 | | the sale of
such assets; provided, further, this |
4 | | paragraph shall only apply to a taxpayer
who was the |
5 | | first recipient of such assets after their recovery |
6 | | and who is a
victim of persecution for racial or |
7 | | religious reasons
by Nazi Germany or any other Axis |
8 | | regime or as an heir of the victim. The
amount of and |
9 | | the eligibility for any public assistance, benefit, or
|
10 | | similar entitlement is not affected by the inclusion |
11 | | of items (i) and (ii) of
this paragraph in gross income |
12 | | for federal income tax purposes.
This paragraph is |
13 | | exempt from the provisions of Section 250; |
14 | | (Y) For taxable years beginning on or after |
15 | | January 1, 2002
and ending
on or before December 31, |
16 | | 2004, moneys contributed in the taxable year to a |
17 | | College Savings Pool account under
Section 16.5 of the |
18 | | State Treasurer Act, except that amounts excluded from
|
19 | | gross income under Section 529(c)(3)(C)(i) of the |
20 | | Internal Revenue Code
shall not be considered moneys |
21 | | contributed under this subparagraph (Y). For taxable |
22 | | years beginning on or after January 1, 2005, a maximum |
23 | | of $10,000
contributed
in the
taxable year to (i) a |
24 | | College Savings Pool account under Section 16.5 of the
|
25 | | State
Treasurer Act or (ii) the Illinois Prepaid |
26 | | Tuition Trust Fund,
except that
amounts excluded from |
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1 | | gross income under Section 529(c)(3)(C)(i) of the
|
2 | | Internal
Revenue Code shall not be considered moneys |
3 | | contributed under this subparagraph
(Y). For purposes |
4 | | of this subparagraph, contributions made by an |
5 | | employer on behalf of an employee, or matching |
6 | | contributions made by an employee, shall be treated as |
7 | | made by the employee. This
subparagraph (Y) is exempt |
8 | | from the provisions of Section 250; |
9 | | (Z) For taxable years 2001 and thereafter, for the |
10 | | taxable year in
which the bonus depreciation deduction
|
11 | | is taken on the taxpayer's federal income tax return |
12 | | under
subsection (k) of Section 168 of the Internal |
13 | | Revenue Code and for each
applicable taxable year |
14 | | thereafter, an amount equal to "x", where: |
15 | | (1) "y" equals the amount of the depreciation |
16 | | deduction taken for the
taxable year
on the |
17 | | taxpayer's federal income tax return on property |
18 | | for which the bonus
depreciation deduction
was |
19 | | taken in any year under subsection (k) of Section |
20 | | 168 of the Internal
Revenue Code, but not |
21 | | including the bonus depreciation deduction; |
22 | | (2) for taxable years ending on or before |
23 | | December 31, 2005, "x" equals "y" multiplied by 30 |
24 | | and then divided by 70 (or "y"
multiplied by |
25 | | 0.429); and |
26 | | (3) for taxable years ending after December |
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1 | | 31, 2005: |
2 | | (i) for property on which a bonus |
3 | | depreciation deduction of 30% of the adjusted |
4 | | basis was taken, "x" equals "y" multiplied by |
5 | | 30 and then divided by 70 (or "y"
multiplied |
6 | | by 0.429); and |
7 | | (ii) for property on which a bonus |
8 | | depreciation deduction of 50% of the adjusted |
9 | | basis was taken, "x" equals "y" multiplied by |
10 | | 1.0. |
11 | | The aggregate amount deducted under this |
12 | | subparagraph in all taxable
years for any one piece of |
13 | | property may not exceed the amount of the bonus
|
14 | | depreciation deduction
taken on that property on the |
15 | | taxpayer's federal income tax return under
subsection |
16 | | (k) of Section 168 of the Internal Revenue Code. This |
17 | | subparagraph (Z) is exempt from the provisions of |
18 | | Section 250; |
19 | | (AA) 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 (D-15), then |
23 | | an amount equal to that
addition modification.
|
24 | | If the taxpayer continues to own property through |
25 | | the last day of the last tax year for which the |
26 | | taxpayer may claim a depreciation deduction for |
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1 | | federal income tax purposes and for which the taxpayer |
2 | | was required in any taxable year to make an addition |
3 | | modification under subparagraph (D-15), then an amount |
4 | | equal to that addition modification.
|
5 | | The taxpayer is allowed to take the deduction |
6 | | under this subparagraph
only once with respect to any |
7 | | one piece of property. |
8 | | This subparagraph (AA) is exempt from the |
9 | | provisions of Section 250; |
10 | | (BB) Any amount included in adjusted gross income, |
11 | | other
than
salary,
received by a driver in a |
12 | | ridesharing arrangement using a motor vehicle; |
13 | | (CC) The amount of (i) any interest income (net of |
14 | | the deductions allocable thereto) taken into account |
15 | | for the taxable year with respect to a transaction |
16 | | with a taxpayer that is required to make an addition |
17 | | modification with respect to such transaction under |
18 | | Section 203(a)(2)(D-17), 203(b)(2)(E-12), |
19 | | 203(c)(2)(G-12), or 203(d)(2)(D-7), but not to exceed |
20 | | the amount of that addition modification, and
(ii) any |
21 | | income from intangible property (net of the deductions |
22 | | allocable thereto) taken into account for the taxable |
23 | | year with respect to a transaction with a taxpayer |
24 | | that is required to make an addition modification with |
25 | | respect to such transaction under Section |
26 | | 203(a)(2)(D-18), 203(b)(2)(E-13), 203(c)(2)(G-13), or |
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1 | | 203(d)(2)(D-8), but not to exceed the amount of that |
2 | | addition modification. This subparagraph (CC) is |
3 | | exempt from the provisions of Section 250; |
4 | | (DD) An amount equal to the interest income taken |
5 | | into account for the taxable year (net of the |
6 | | deductions allocable thereto) with respect to |
7 | | transactions with (i) a foreign person who would be a |
8 | | member of the taxpayer's unitary business group but |
9 | | for the fact that the foreign person's business |
10 | | activity outside the United States is 80% or more of |
11 | | that person's total business activity and (ii) for |
12 | | taxable years ending on or after December 31, 2008, to |
13 | | a person who would be a member of the same unitary |
14 | | business group but for the fact that the person is |
15 | | prohibited under Section 1501(a)(27) from being |
16 | | included in the unitary business group because he or |
17 | | she is ordinarily required to apportion business |
18 | | income under different subsections of Section 304, but |
19 | | not to exceed the addition modification required to be |
20 | | made for the same taxable year under Section |
21 | | 203(a)(2)(D-17) for interest paid, accrued, or |
22 | | incurred, directly or indirectly, to the same person. |
23 | | This subparagraph (DD) is exempt from the provisions |
24 | | of Section 250; |
25 | | (EE) An amount equal to the income from intangible |
26 | | property taken into account for the taxable year (net |
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1 | | of the deductions allocable thereto) with respect to |
2 | | transactions with (i) a foreign person who would be a |
3 | | member of the taxpayer's unitary business group but |
4 | | for the fact that the foreign person's business |
5 | | activity outside the United States is 80% or more of |
6 | | that person's total business activity and (ii) for |
7 | | taxable years ending on or after December 31, 2008, to |
8 | | a person who would be a member of the same unitary |
9 | | business group but for the fact that the person is |
10 | | prohibited under Section 1501(a)(27) from being |
11 | | included in the unitary business group because he or |
12 | | she is ordinarily required to apportion business |
13 | | income under different subsections of Section 304, but |
14 | | not to exceed the addition modification required to be |
15 | | made for the same taxable year under Section |
16 | | 203(a)(2)(D-18) for intangible expenses and costs |
17 | | paid, accrued, or incurred, directly or indirectly, to |
18 | | the same foreign person. This subparagraph (EE) is |
19 | | exempt from the provisions of Section 250; |
20 | | (FF) An amount equal to any amount awarded to the |
21 | | taxpayer during the taxable year by the Court of |
22 | | Claims under subsection (c) of Section 8 of the Court |
23 | | of Claims Act for time unjustly served in a State |
24 | | prison. This subparagraph (FF) is exempt from the |
25 | | provisions of Section 250; |
26 | | (GG) For taxable years ending on or after December |
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1 | | 31, 2011, in the case of a taxpayer who was required to |
2 | | add back any insurance premiums under Section |
3 | | 203(a)(2)(D-19), such taxpayer may elect to subtract |
4 | | that part of a reimbursement received from the |
5 | | insurance company equal to the amount of the expense |
6 | | or loss (including expenses incurred by the insurance |
7 | | company) that would have been taken into account as a |
8 | | deduction for federal income tax purposes if the |
9 | | expense or loss had been uninsured. If a taxpayer |
10 | | makes the election provided for by this subparagraph |
11 | | (GG), the insurer to which the premiums were paid must |
12 | | add back to income the amount subtracted by the |
13 | | taxpayer pursuant to this subparagraph (GG). This |
14 | | subparagraph (GG) is exempt from the provisions of |
15 | | Section 250; and |
16 | | (HH) For taxable years beginning on or after |
17 | | January 1, 2018 and prior to January 1, 2023, a maximum |
18 | | of $10,000 contributed in the taxable year to a |
19 | | qualified ABLE account under Section 16.6 of the State |
20 | | Treasurer Act, except that amounts excluded from gross |
21 | | income under Section 529(c)(3)(C)(i) or Section |
22 | | 529A(c)(1)(C) of the Internal Revenue Code shall not |
23 | | be considered moneys contributed under this |
24 | | subparagraph (HH). For purposes of this subparagraph |
25 | | (HH), contributions made by an employer on behalf of |
26 | | an employee, or matching contributions made by an |
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1 | | employee, shall be treated as made by the employee ; . |
2 | | (II) An amount equal to a pass-through owner's |
3 | | direct share of business income apportionable to |
4 | | Illinois and nonbusiness income allocated to Illinois |
5 | | under Section 303 of this Act that was included by a |
6 | | partnership or Subchapter S corporation in its |
7 | | computation of the elective tax under subsection (d-2) |
8 | | of Section 201. This subparagraph (II) is exempt from |
9 | | the provisions of Section 250; and |
10 | | (JJ) An amount equal to an individual's indirect |
11 | | share of business income apportionable to Illinois and |
12 | | nonbusiness income allocated to Illinois under Section |
13 | | 303 of this Act that was included by a partnership or |
14 | | Subchapter S corporation in its computation of the |
15 | | elective tax under subsection (d-2) of Section 201, |
16 | | multiplied by: (i) 30.3% if the individual is a direct |
17 | | shareholder in a Subchapter S corporation that is a |
18 | | direct partner in a partnership that elected tax under |
19 | | subsection (d-2) of Section 201; (ii) 100% if the |
20 | | individual is a beneficiary of a trust that is a direct |
21 | | owner in an entity that elected tax under subsection |
22 | | (d-2) of Section 201, to the extent income is |
23 | | distributed by the trust to the beneficiary; or (iii) |
24 | | 30.3% if the individual is a beneficiary of a trust |
25 | | that is a direct shareholder in a Subchapter S |
26 | | corporation that is a direct partner in a partnership |
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1 | | that elected tax under subsection (d-2) of Section |
2 | | 201, to the extent income is distributed by the trust |
3 | | to the beneficiary. This subparagraph (JJ) is exempt |
4 | | from the provisions of Section 250. |
5 | | (b) Corporations. |
6 | | (1) In general. In the case of a corporation, base |
7 | | income means an
amount equal to the taxpayer's taxable |
8 | | income for the taxable year as
modified by paragraph (2). |
9 | | (2) Modifications. The taxable income referred to in |
10 | | paragraph (1)
shall be modified by adding thereto the sum |
11 | | of the following amounts: |
12 | | (A) An amount equal to all amounts paid or accrued |
13 | | to the taxpayer
as interest and all distributions |
14 | | received from regulated investment
companies during |
15 | | the taxable year to the extent excluded from gross
|
16 | | income in the computation of taxable income; |
17 | | (B) An amount equal to the amount of tax imposed by |
18 | | this Act to the
extent deducted from gross income in |
19 | | the computation of taxable income
for the taxable |
20 | | year; |
21 | | (C) In the case of a regulated investment company, |
22 | | an amount equal to
the excess of (i) the net long-term |
23 | | capital gain for the taxable year, over
(ii) the |
24 | | amount of the capital gain dividends designated as |
25 | | such in accordance
with Section 852(b)(3)(C) of the |
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1 | | Internal Revenue Code and any amount
designated under |
2 | | Section 852(b)(3)(D) of the Internal Revenue Code,
|
3 | | attributable to the taxable year (this amendatory Act |
4 | | of 1995
(Public Act 89-89) is declarative of existing |
5 | | law and is not a new
enactment); |
6 | | (D) The amount of any net operating loss deduction |
7 | | taken in arriving
at taxable income, other than a net |
8 | | operating loss carried forward from a
taxable year |
9 | | ending prior to December 31, 1986; |
10 | | (E) For taxable years in which a net operating |
11 | | loss carryback or
carryforward from a taxable year |
12 | | ending prior to December 31, 1986 is an
element of |
13 | | taxable income under paragraph (1) of subsection (e) |
14 | | or
subparagraph (E) of paragraph (2) of subsection |
15 | | (e), the amount by which
addition modifications other |
16 | | than those provided by this subparagraph (E)
exceeded |
17 | | subtraction modifications in such earlier taxable |
18 | | year, with the
following limitations applied in the |
19 | | order that they are listed: |
20 | | (i) the addition modification relating to the |
21 | | net operating loss
carried back or forward to the |
22 | | taxable year from any taxable year ending
prior to |
23 | | December 31, 1986 shall be reduced by the amount |
24 | | of addition
modification under this subparagraph |
25 | | (E) which related to that net operating
loss and |
26 | | which was taken into account in calculating the |
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1 | | base income of an
earlier taxable year, and |
2 | | (ii) the addition modification relating to the |
3 | | net operating loss
carried back or forward to the |
4 | | taxable year from any taxable year ending
prior to |
5 | | December 31, 1986 shall not exceed the amount of |
6 | | such carryback or
carryforward; |
7 | | For taxable years in which there is a net |
8 | | operating loss carryback or
carryforward from more |
9 | | than one other taxable year ending prior to December
|
10 | | 31, 1986, the addition modification provided in this |
11 | | subparagraph (E) shall
be the sum of the amounts |
12 | | computed independently under the preceding
provisions |
13 | | of this subparagraph (E) for each such taxable year; |
14 | | (E-5) For taxable years ending after December 31, |
15 | | 1997, an
amount equal to any eligible remediation |
16 | | costs that the corporation
deducted in computing |
17 | | adjusted gross income and for which the
corporation |
18 | | claims a credit under subsection (l) of Section 201; |
19 | | (E-10) For taxable years 2001 and thereafter, an |
20 | | amount equal to the
bonus depreciation deduction taken |
21 | | on the taxpayer's federal income tax return for the |
22 | | taxable
year under subsection (k) of Section 168 of |
23 | | the Internal Revenue Code; |
24 | | (E-11) If the taxpayer sells, transfers, abandons, |
25 | | or otherwise disposes of property for which the |
26 | | taxpayer was required in any taxable year to
make an |
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1 | | addition modification under subparagraph (E-10), then |
2 | | an amount equal
to the aggregate amount of the |
3 | | deductions taken in all taxable
years under |
4 | | subparagraph (T) with respect to that property. |
5 | | If the taxpayer continues to own property through |
6 | | the last day of the last tax year for which the |
7 | | taxpayer may claim a depreciation deduction for |
8 | | federal income tax purposes and for which the taxpayer |
9 | | was allowed in any taxable year to make a subtraction |
10 | | modification under subparagraph (T), then an amount |
11 | | equal to that subtraction modification.
|
12 | | The taxpayer is required to make the addition |
13 | | modification under this
subparagraph
only once with |
14 | | respect to any one piece of property; |
15 | | (E-12) An amount equal to the amount otherwise |
16 | | allowed as a deduction in computing base income for |
17 | | interest paid, accrued, or incurred, directly or |
18 | | indirectly, (i) for taxable years ending on or after |
19 | | December 31, 2004, to a foreign person who would be a |
20 | | member of the same unitary business group but for the |
21 | | fact the foreign person's business activity outside |
22 | | the United States is 80% or more of the foreign |
23 | | person's total business activity and (ii) for taxable |
24 | | years ending on or after December 31, 2008, to a person |
25 | | who would be a member of the same unitary business |
26 | | group but for the fact that the person is prohibited |
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1 | | under Section 1501(a)(27) from being included in the |
2 | | unitary business group because he or she is ordinarily |
3 | | required to apportion business income under different |
4 | | subsections of Section 304. The addition modification |
5 | | required by this subparagraph shall be reduced to the |
6 | | extent that dividends were included in base income of |
7 | | the unitary group for the same taxable year and |
8 | | received by the taxpayer or by a member of the |
9 | | taxpayer's unitary business group (including amounts |
10 | | included in gross income pursuant to Sections 951 |
11 | | through 964 of the Internal Revenue Code and amounts |
12 | | included in gross income under Section 78 of the |
13 | | Internal Revenue Code) with respect to the stock of |
14 | | the same person to whom the interest was paid, |
15 | | accrued, or incurred.
|
16 | | This paragraph shall not apply to the following:
|
17 | | (i) an item of interest paid, accrued, or |
18 | | incurred, directly or indirectly, to a person who |
19 | | is subject in a foreign country or state, other |
20 | | than a state which requires mandatory unitary |
21 | | reporting, to a tax on or measured by net income |
22 | | with respect to such interest; or |
23 | | (ii) an item of interest paid, accrued, or |
24 | | incurred, directly or indirectly, to a person if |
25 | | the taxpayer can establish, based on a |
26 | | preponderance of the evidence, both of the |
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1 | | following: |
2 | | (a) the person, during the same taxable |
3 | | year, paid, accrued, or incurred, the interest |
4 | | to a person that is not a related member, and |
5 | | (b) the transaction giving rise to the |
6 | | interest expense between the taxpayer and the |
7 | | person did not have as a principal purpose the |
8 | | avoidance of Illinois income tax, and is paid |
9 | | pursuant to a contract or agreement that |
10 | | reflects an arm's-length interest rate and |
11 | | terms; or
|
12 | | (iii) the taxpayer can establish, based on |
13 | | clear and convincing evidence, that the interest |
14 | | paid, accrued, or incurred relates to a contract |
15 | | or agreement entered into at arm's-length rates |
16 | | and terms and the principal purpose for the |
17 | | payment is not federal or Illinois tax avoidance; |
18 | | or
|
19 | | (iv) an item of interest paid, accrued, or |
20 | | incurred, directly or indirectly, to a person if |
21 | | the taxpayer establishes by clear and convincing |
22 | | evidence that the adjustments are unreasonable; or |
23 | | if the taxpayer and the Director agree in writing |
24 | | to the application or use of an alternative method |
25 | | of apportionment under Section 304(f).
|
26 | | Nothing in this subsection shall preclude the |
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1 | | Director from making any other adjustment |
2 | | otherwise allowed under Section 404 of this Act |
3 | | for any tax year beginning after the effective |
4 | | date of this amendment provided such adjustment is |
5 | | made pursuant to regulation adopted by the |
6 | | Department and such regulations provide methods |
7 | | and standards by which the Department will utilize |
8 | | its authority under Section 404 of this Act;
|
9 | | (E-13) An amount equal to the amount of intangible |
10 | | expenses and costs otherwise allowed as a deduction in |
11 | | computing base income, and that were paid, accrued, or |
12 | | incurred, directly or indirectly, (i) for taxable |
13 | | years ending on or after December 31, 2004, to a |
14 | | foreign person who would be a member of the same |
15 | | unitary business group but for the fact that the |
16 | | foreign person's business activity outside the United |
17 | | States is 80% or more of that person's total business |
18 | | activity and (ii) for taxable years ending on or after |
19 | | December 31, 2008, to a person who would be a member of |
20 | | the same unitary business group but for the fact that |
21 | | the person is prohibited under Section 1501(a)(27) |
22 | | from being included in the unitary business group |
23 | | because he or she is ordinarily required to apportion |
24 | | business income under different subsections of Section |
25 | | 304. The addition modification required by this |
26 | | subparagraph shall be reduced to the extent that |
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1 | | dividends were included in base income of the unitary |
2 | | group for the same taxable year and received by the |
3 | | taxpayer or by a member of the taxpayer's unitary |
4 | | business group (including amounts included in gross |
5 | | income pursuant to Sections 951 through 964 of the |
6 | | Internal Revenue Code and amounts included in gross |
7 | | income under Section 78 of the Internal Revenue Code) |
8 | | with respect to the stock of the same person to whom |
9 | | the intangible expenses and costs were directly or |
10 | | indirectly paid, incurred, or accrued. The preceding |
11 | | sentence shall not apply to the extent that the same |
12 | | dividends caused a reduction to the addition |
13 | | modification required under Section 203(b)(2)(E-12) of |
14 | | this Act.
As used in this subparagraph, the term |
15 | | "intangible expenses and costs" includes (1) expenses, |
16 | | losses, and costs for, or related to, the direct or |
17 | | indirect acquisition, use, maintenance or management, |
18 | | ownership, sale, exchange, or any other disposition of |
19 | | intangible property; (2) losses incurred, directly or |
20 | | indirectly, from factoring transactions or discounting |
21 | | transactions; (3) royalty, patent, technical, and |
22 | | copyright fees; (4) licensing fees; and (5) other |
23 | | similar expenses and costs.
For purposes of this |
24 | | subparagraph, "intangible property" includes patents, |
25 | | patent applications, trade names, trademarks, service |
26 | | marks, copyrights, mask works, trade secrets, and |
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1 | | similar types of intangible assets. |
2 | | This paragraph shall not apply to the following: |
3 | | (i) any item of intangible expenses or costs |
4 | | paid, accrued, or incurred, directly or |
5 | | indirectly, from a transaction with a person who |
6 | | is subject in a foreign country or state, other |
7 | | than a state which requires mandatory unitary |
8 | | reporting, to a tax on or measured by net income |
9 | | with respect to such item; or |
10 | | (ii) any item of intangible expense or cost |
11 | | paid, accrued, or incurred, directly or |
12 | | indirectly, if the taxpayer can establish, based |
13 | | on a preponderance of the evidence, both of the |
14 | | following: |
15 | | (a) the person during the same taxable |
16 | | year paid, accrued, or incurred, the |
17 | | intangible expense or cost to a person that is |
18 | | not a related member, and |
19 | | (b) the transaction giving rise to the |
20 | | intangible expense or cost between the |
21 | | taxpayer and the person did not have as a |
22 | | principal purpose the avoidance of Illinois |
23 | | income tax, and is paid pursuant to a contract |
24 | | or agreement that reflects arm's-length terms; |
25 | | or |
26 | | (iii) any item of intangible expense or cost |
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1 | | paid, accrued, or incurred, directly or |
2 | | indirectly, from a transaction with a person if |
3 | | the taxpayer establishes by clear and convincing |
4 | | evidence, that the adjustments are unreasonable; |
5 | | or if the taxpayer and the Director agree in |
6 | | writing to the application or use of an |
7 | | alternative method of apportionment under Section |
8 | | 304(f);
|
9 | | Nothing in this subsection shall preclude the |
10 | | Director from making any other adjustment |
11 | | otherwise allowed under Section 404 of this Act |
12 | | for any tax year beginning after the effective |
13 | | date of this amendment provided such adjustment is |
14 | | made pursuant to regulation adopted by the |
15 | | Department and such regulations provide methods |
16 | | and standards by which the Department will utilize |
17 | | its authority under Section 404 of this Act;
|
18 | | (E-14) For taxable years ending on or after |
19 | | December 31, 2008, an amount equal to the amount of |
20 | | insurance premium expenses and costs otherwise allowed |
21 | | as a deduction in computing base income, and that were |
22 | | paid, accrued, or incurred, directly or indirectly, to |
23 | | a person who would be a member of the same unitary |
24 | | business group but for the fact that the person is |
25 | | prohibited under Section 1501(a)(27) from being |
26 | | included in the unitary business group because he or |
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1 | | she is ordinarily required to apportion business |
2 | | income under different subsections of Section 304. The |
3 | | addition modification required by this subparagraph |
4 | | shall be reduced to the extent that dividends were |
5 | | included in base income of the unitary group for the |
6 | | same taxable year and received by the taxpayer or by a |
7 | | member of the taxpayer's unitary business group |
8 | | (including amounts included in gross income under |
9 | | Sections 951 through 964 of the Internal Revenue Code |
10 | | and amounts included in gross income under Section 78 |
11 | | of the Internal Revenue Code) with respect to the |
12 | | stock of the same person to whom the premiums and costs |
13 | | were directly or indirectly paid, incurred, or |
14 | | accrued. The preceding sentence does not apply to the |
15 | | extent that the same dividends caused a reduction to |
16 | | the addition modification required under Section |
17 | | 203(b)(2)(E-12) or Section 203(b)(2)(E-13) of this |
18 | | Act;
|
19 | | (E-15) For taxable years beginning after December |
20 | | 31, 2008, any deduction for dividends paid by a |
21 | | captive real estate investment trust that is allowed |
22 | | to a real estate investment trust under Section |
23 | | 857(b)(2)(B) of the Internal Revenue Code for |
24 | | dividends paid; |
25 | | (E-16) An amount equal to the credit allowable to |
26 | | the taxpayer under Section 218(a) of this Act, |
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1 | | determined without regard to Section 218(c) of this |
2 | | Act; |
3 | | (E-17) For taxable years ending on or after |
4 | | December 31, 2017, an amount equal to the deduction |
5 | | allowed under Section 199 of the Internal Revenue Code |
6 | | for the taxable year; |
7 | | (E-18) for taxable years beginning after December |
8 | | 31, 2018, an amount equal to the deduction allowed |
9 | | under Section 250(a)(1)(A) of the Internal Revenue |
10 | | Code for the taxable year. |
11 | | and by deducting from the total so obtained the sum of the |
12 | | following
amounts: |
13 | | (F) An amount equal to the amount of any tax |
14 | | imposed by this Act
which was refunded to the taxpayer |
15 | | and included in such total for the
taxable year; |
16 | | (G) An amount equal to any amount included in such |
17 | | total under
Section 78 of the Internal Revenue Code; |
18 | | (H) In the case of a regulated investment company, |
19 | | an amount equal
to the amount of exempt interest |
20 | | dividends as defined in subsection (b)(5) of Section |
21 | | 852 of the Internal Revenue Code, paid to shareholders
|
22 | | for the taxable year; |
23 | | (I) With the exception of any amounts subtracted |
24 | | under subparagraph
(J),
an amount equal to the sum of |
25 | | all amounts disallowed as
deductions by (i) Sections |
26 | | 171(a)(2) , and 265(a)(2) and amounts disallowed as
|
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1 | | interest expense by Section 291(a)(3) of the Internal |
2 | | Revenue Code, and all amounts of expenses allocable to |
3 | | interest and
disallowed as deductions by Section |
4 | | 265(a)(1) of the Internal Revenue Code;
and (ii) for |
5 | | taxable years
ending on or after August 13, 1999, |
6 | | Sections
171(a)(2), 265,
280C, 291(a)(3), and |
7 | | 832(b)(5)(B)(i) of the Internal Revenue Code, plus, |
8 | | for tax years ending on or after December 31, 2011, |
9 | | amounts disallowed as deductions by Section 45G(e)(3) |
10 | | of the Internal Revenue Code and, for taxable years |
11 | | ending on or after December 31, 2008, any amount |
12 | | included in gross income under Section 87 of the |
13 | | Internal Revenue Code and the policyholders' share of |
14 | | tax-exempt interest of a life insurance company under |
15 | | Section 807(a)(2)(B) of the Internal Revenue Code (in |
16 | | the case of a life insurance company with gross income |
17 | | from a decrease in reserves for the tax year) or |
18 | | Section 807(b)(1)(B) of the Internal Revenue Code (in |
19 | | the case of a life insurance company allowed a |
20 | | deduction for an increase in reserves for the tax |
21 | | year); the
provisions of this
subparagraph are exempt |
22 | | from the provisions of Section 250; |
23 | | (J) An amount equal to all amounts included in |
24 | | such total which are
exempt from taxation by this |
25 | | State either by reason of its statutes or
Constitution
|
26 | | or by reason of the Constitution, treaties or statutes |
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1 | | of the United States;
provided that, in the case of any |
2 | | statute of this State that exempts income
derived from |
3 | | bonds or other obligations from the tax imposed under |
4 | | this Act,
the amount exempted shall be the interest |
5 | | net of bond premium amortization; |
6 | | (K) An amount equal to those dividends included in |
7 | | such total
which were paid by a corporation which |
8 | | conducts
business operations in a River Edge |
9 | | Redevelopment Zone or zones created under the River |
10 | | Edge Redevelopment Zone Act and conducts substantially |
11 | | all of its
operations in a River Edge Redevelopment |
12 | | Zone or zones. This subparagraph (K) is exempt from |
13 | | the provisions of Section 250; |
14 | | (L) An amount equal to those dividends included in |
15 | | such total that
were paid by a corporation that |
16 | | conducts business operations in a federally
designated |
17 | | Foreign Trade Zone or Sub-Zone and that is designated |
18 | | a High Impact
Business located in Illinois; provided |
19 | | that dividends eligible for the
deduction provided in |
20 | | subparagraph (K) of paragraph 2 of this subsection
|
21 | | shall not be eligible for the deduction provided under |
22 | | this subparagraph
(L); |
23 | | (M) For any taxpayer that is a financial |
24 | | organization within the meaning
of Section 304(c) of |
25 | | this Act, an amount included in such total as interest
|
26 | | income from a loan or loans made by such taxpayer to a |
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1 | | borrower, to the extent
that such a loan is secured by |
2 | | property which is eligible for the River Edge |
3 | | Redevelopment Zone Investment Credit. To determine the |
4 | | portion of a loan or loans that is
secured by property |
5 | | eligible for a Section 201(f) investment
credit to the |
6 | | borrower, the entire principal amount of the loan or |
7 | | loans
between the taxpayer and the borrower should be |
8 | | divided into the basis of the
Section 201(f) |
9 | | investment credit property which secures the
loan or |
10 | | loans, using for this purpose the original basis of |
11 | | such property on
the date that it was placed in service |
12 | | in the River Edge Redevelopment Zone. The subtraction |
13 | | modification available to the taxpayer in any
year |
14 | | under this subsection shall be that portion of the |
15 | | total interest paid
by the borrower with respect to |
16 | | such loan attributable to the eligible
property as |
17 | | calculated under the previous sentence. This |
18 | | subparagraph (M) is exempt from the provisions of |
19 | | Section 250; |
20 | | (M-1) For any taxpayer that is a financial |
21 | | organization within the
meaning of Section 304(c) of |
22 | | this Act, an amount included in such total as
interest |
23 | | income from a loan or loans made by such taxpayer to a |
24 | | borrower,
to the extent that such a loan is secured by |
25 | | property which is eligible for
the High Impact |
26 | | Business Investment Credit. To determine the portion |
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1 | | of a
loan or loans that is secured by property eligible |
2 | | for a Section 201(h) investment credit to the |
3 | | borrower, the entire principal amount of
the loan or |
4 | | loans between the taxpayer and the borrower should be |
5 | | divided into
the basis of the Section 201(h) |
6 | | investment credit property which
secures the loan or |
7 | | loans, using for this purpose the original basis of |
8 | | such
property on the date that it was placed in service |
9 | | in a federally designated
Foreign Trade Zone or |
10 | | Sub-Zone located in Illinois. No taxpayer that is
|
11 | | eligible for the deduction provided in subparagraph |
12 | | (M) of paragraph (2) of
this subsection shall be |
13 | | eligible for the deduction provided under this
|
14 | | subparagraph (M-1). The subtraction modification |
15 | | available to taxpayers in
any year under this |
16 | | subsection shall be that portion of the total interest
|
17 | | paid by the borrower with respect to such loan |
18 | | attributable to the eligible
property as calculated |
19 | | under the previous sentence; |
20 | | (N) Two times any contribution made during the |
21 | | taxable year to a
designated zone organization to the |
22 | | extent that the contribution (i)
qualifies as a |
23 | | charitable contribution under subsection (c) of |
24 | | Section 170
of the Internal Revenue Code and (ii) |
25 | | must, by its terms, be used for a
project approved by |
26 | | the Department of Commerce and Economic Opportunity |
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1 | | under Section 11 of the Illinois Enterprise Zone Act |
2 | | or under Section 10-10 of the River Edge Redevelopment |
3 | | Zone Act. This subparagraph (N) is exempt from the |
4 | | provisions of Section 250; |
5 | | (O) An amount equal to: (i) 85% for taxable years |
6 | | ending on or before
December 31, 1992, or, a |
7 | | percentage equal to the percentage allowable under
|
8 | | Section 243(a)(1) of the Internal Revenue Code of 1986 |
9 | | for taxable years ending
after December 31, 1992, of |
10 | | the amount by which dividends included in taxable
|
11 | | income and received from a corporation that is not |
12 | | created or organized under
the laws of the United |
13 | | States or any state or political subdivision thereof,
|
14 | | including, for taxable years ending on or after |
15 | | December 31, 1988, dividends
received or deemed |
16 | | received or paid or deemed paid under Sections 951 |
17 | | through
965 of the Internal Revenue Code, exceed the |
18 | | amount of the modification
provided under subparagraph |
19 | | (G) of paragraph (2) of this subsection (b) which
is |
20 | | related to such dividends, and including, for taxable |
21 | | years ending on or after December 31, 2008, dividends |
22 | | received from a captive real estate investment trust; |
23 | | plus (ii) 100% of the amount by which dividends,
|
24 | | included in taxable income and received, including, |
25 | | for taxable years ending on
or after December 31, |
26 | | 1988, dividends received or deemed received or paid or
|
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1 | | deemed paid under Sections 951 through 964 of the |
2 | | Internal Revenue Code and including, for taxable years |
3 | | ending on or after December 31, 2008, dividends |
4 | | received from a captive real estate investment trust, |
5 | | from
any such corporation specified in clause (i) that |
6 | | would but for the provisions
of Section 1504(b)(3) of |
7 | | the Internal Revenue Code be treated as a member of
the |
8 | | affiliated group which includes the dividend |
9 | | recipient, exceed the amount
of the modification |
10 | | provided under subparagraph (G) of paragraph (2) of |
11 | | this
subsection (b) which is related to such |
12 | | dividends. This subparagraph (O) is exempt from the |
13 | | provisions of Section 250 of this Act; |
14 | | (P) An amount equal to any contribution made to a |
15 | | job training project
established pursuant to the Tax |
16 | | Increment Allocation Redevelopment Act; |
17 | | (Q) An amount equal to the amount of the deduction |
18 | | used to compute the
federal income tax credit for |
19 | | restoration of substantial amounts held under
claim of |
20 | | right for the taxable year pursuant to Section 1341 of |
21 | | the
Internal Revenue Code; |
22 | | (R) On and after July 20, 1999, in the case of an |
23 | | attorney-in-fact with respect to whom an
interinsurer |
24 | | or a reciprocal insurer has made the election under |
25 | | Section 835 of
the Internal Revenue Code, 26 U.S.C. |
26 | | 835, an amount equal to the excess, if
any, of the |
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1 | | amounts paid or incurred by that interinsurer or |
2 | | reciprocal insurer
in the taxable year to the |
3 | | attorney-in-fact over the deduction allowed to that
|
4 | | interinsurer or reciprocal insurer with respect to the |
5 | | attorney-in-fact under
Section 835(b) of the Internal |
6 | | Revenue Code for the taxable year; the provisions of |
7 | | this subparagraph are exempt from the provisions of |
8 | | Section 250; |
9 | | (S) For taxable years ending on or after December |
10 | | 31, 1997, in the
case of a Subchapter
S corporation, an |
11 | | amount equal to all amounts of income allocable to a
|
12 | | shareholder subject to the Personal Property Tax |
13 | | Replacement Income Tax imposed
by subsections (c) and |
14 | | (d) of Section 201 of this Act, including amounts
|
15 | | allocable to organizations exempt from federal income |
16 | | tax by reason of Section
501(a) of the Internal |
17 | | Revenue Code. This subparagraph (S) is exempt from
the |
18 | | provisions of Section 250; |
19 | | (T) For taxable years 2001 and thereafter, for the |
20 | | taxable year in
which the bonus depreciation deduction
|
21 | | is taken on the taxpayer's federal income tax return |
22 | | under
subsection (k) of Section 168 of the Internal |
23 | | Revenue Code and for each
applicable taxable year |
24 | | thereafter, an amount equal to "x", where: |
25 | | (1) "y" equals the amount of the depreciation |
26 | | deduction taken for the
taxable year
on the |
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1 | | taxpayer's federal income tax return on property |
2 | | for which the bonus
depreciation deduction
was |
3 | | taken in any year under subsection (k) of Section |
4 | | 168 of the Internal
Revenue Code, but not |
5 | | including the bonus depreciation deduction; |
6 | | (2) for taxable years ending on or before |
7 | | December 31, 2005, "x" equals "y" multiplied by 30 |
8 | | and then divided by 70 (or "y"
multiplied by |
9 | | 0.429); and |
10 | | (3) for taxable years ending after December |
11 | | 31, 2005: |
12 | | (i) for property on which a bonus |
13 | | depreciation deduction of 30% of the adjusted |
14 | | basis was taken, "x" equals "y" multiplied by |
15 | | 30 and then divided by 70 (or "y"
multiplied |
16 | | by 0.429); and |
17 | | (ii) for property on which a bonus |
18 | | depreciation deduction of 50% of the adjusted |
19 | | basis was taken, "x" equals "y" multiplied by |
20 | | 1.0. |
21 | | The aggregate amount deducted under this |
22 | | subparagraph in all taxable
years for any one piece of |
23 | | property may not exceed the amount of the bonus
|
24 | | depreciation deduction
taken on that property on the |
25 | | taxpayer's federal income tax return under
subsection |
26 | | (k) of Section 168 of the Internal Revenue Code. This |
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1 | | subparagraph (T) is exempt from the provisions of |
2 | | Section 250; |
3 | | (U) If the taxpayer sells, transfers, abandons, or |
4 | | otherwise disposes of
property for which the taxpayer |
5 | | was required in any taxable year to make an
addition |
6 | | modification under subparagraph (E-10), then an amount |
7 | | equal to that
addition modification. |
8 | | If the taxpayer continues to own property through |
9 | | the last day of the last tax year for which the |
10 | | taxpayer may claim a depreciation deduction for |
11 | | federal income tax purposes and for which the taxpayer |
12 | | was required in any taxable year to make an addition |
13 | | modification under subparagraph (E-10), then an amount |
14 | | equal to that addition modification.
|
15 | | The taxpayer is allowed to take the deduction |
16 | | under this subparagraph
only once with respect to any |
17 | | one piece of property. |
18 | | This subparagraph (U) is exempt from the |
19 | | provisions of Section 250; |
20 | | (V) 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 such addition modification,
(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 such |
9 | | addition modification, and (iii) any insurance premium |
10 | | income (net of deductions allocable thereto) taken |
11 | | into account for the taxable year with respect to a |
12 | | transaction with a taxpayer that is required to make |
13 | | an addition modification with respect to such |
14 | | transaction under Section 203(a)(2)(D-19), Section |
15 | | 203(b)(2)(E-14), Section 203(c)(2)(G-14), or Section |
16 | | 203(d)(2)(D-9), but not to exceed the amount of that |
17 | | addition modification. This subparagraph (V) is exempt |
18 | | from the provisions of Section 250;
|
19 | | (W) An amount equal to the interest income taken |
20 | | into account for the taxable year (net of the |
21 | | deductions allocable thereto) with respect to |
22 | | transactions with (i) a foreign person who would be a |
23 | | member of the taxpayer's unitary business group but |
24 | | for the fact that the foreign person's business |
25 | | activity outside the United States is 80% or more of |
26 | | that person's total business activity and (ii) for |
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1 | | taxable years ending on or after December 31, 2008, to |
2 | | a person who would be a member of the same unitary |
3 | | business group but for the fact that the person is |
4 | | prohibited under Section 1501(a)(27) from being |
5 | | included in the unitary business group because he or |
6 | | she is ordinarily required to apportion business |
7 | | income under different subsections of Section 304, but |
8 | | not to exceed the addition modification required to be |
9 | | made for the same taxable year under Section |
10 | | 203(b)(2)(E-12) for interest paid, accrued, or |
11 | | incurred, directly or indirectly, to the same person. |
12 | | This subparagraph (W) is exempt from the provisions of |
13 | | Section 250;
|
14 | | (X) An amount equal to the income from intangible |
15 | | property taken into account for the taxable year (net |
16 | | of the deductions allocable thereto) with respect to |
17 | | transactions with (i) a foreign person who would be a |
18 | | member of the taxpayer's unitary business group but |
19 | | for the fact that the foreign person's business |
20 | | activity outside the United States is 80% or more of |
21 | | that person's total business activity and (ii) for |
22 | | taxable years ending on or after December 31, 2008, to |
23 | | a person who would be a member of the same unitary |
24 | | business group but for the fact that the person is |
25 | | prohibited under Section 1501(a)(27) from being |
26 | | included in the unitary business group because he or |
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1 | | she is ordinarily required to apportion business |
2 | | income under different subsections of Section 304, but |
3 | | not to exceed the addition modification required to be |
4 | | made for the same taxable year under Section |
5 | | 203(b)(2)(E-13) for intangible expenses and costs |
6 | | paid, accrued, or incurred, directly or indirectly, to |
7 | | the same foreign person. This subparagraph (X) is |
8 | | exempt from the provisions of Section 250;
|
9 | | (Y) For taxable years ending on or after December |
10 | | 31, 2011, in the case of a taxpayer who was required to |
11 | | add back any insurance premiums under Section |
12 | | 203(b)(2)(E-14), such taxpayer may elect to subtract |
13 | | that part of a reimbursement received from the |
14 | | insurance company equal to the amount of the expense |
15 | | or loss (including expenses incurred by the insurance |
16 | | company) that would have been taken into account as a |
17 | | deduction for federal income tax purposes if the |
18 | | expense or loss had been uninsured. If a taxpayer |
19 | | makes the election provided for by this subparagraph |
20 | | (Y), the insurer to which the premiums were paid must |
21 | | add back to income the amount subtracted by the |
22 | | taxpayer pursuant to this subparagraph (Y). This |
23 | | subparagraph (Y) is exempt from the provisions of |
24 | | Section 250; and |
25 | | (Z) The difference between the nondeductible |
26 | | controlled foreign corporation dividends under Section |
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1 | | 965(e)(3) of the Internal Revenue Code over the |
2 | | taxable income of the taxpayer, computed without |
3 | | regard to Section 965(e)(2)(A) of the Internal Revenue |
4 | | Code, and without regard to any net operating loss |
5 | | deduction. This subparagraph (Z) is exempt from the |
6 | | provisions of Section 250 ; and . |
7 | | (AA) An amount equal to a pass-through owner's |
8 | | direct share of business income apportionable to |
9 | | Illinois and nonbusiness income allocated to Illinois |
10 | | under Section 303 of this Act that was included by a |
11 | | partnership or Subchapter S corporation in its |
12 | | computation of the elective tax under subsection (d-2) |
13 | | of Section 201. This subparagraph (AA) is exempt from |
14 | | the provisions of Section 250. |
15 | | (3) Special rule. For purposes of paragraph (2)(A), |
16 | | "gross income"
in the case of a life insurance company, |
17 | | for tax years ending on and after
December 31, 1994,
and |
18 | | prior to December 31, 2011, shall mean the gross |
19 | | investment income for the taxable year and, for tax years |
20 | | ending on or after December 31, 2011, shall mean all |
21 | | amounts included in life insurance gross income under |
22 | | Section 803(a)(3) of the Internal Revenue Code. |
23 | | (c) Trusts and estates. |
24 | | (1) In general. In the case of a trust or estate, base |
25 | | income means
an amount equal to the taxpayer's taxable |
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1 | | income for the taxable year as
modified by paragraph (2). |
2 | | (2) Modifications. Subject to the provisions of |
3 | | paragraph (3), the
taxable income referred to in paragraph |
4 | | (1) shall be modified by adding
thereto the sum of the |
5 | | following amounts: |
6 | | (A) An amount equal to all amounts paid or accrued |
7 | | to the taxpayer
as interest or dividends during the |
8 | | taxable year to the extent excluded
from gross income |
9 | | in the computation of taxable income; |
10 | | (B) In the case of (i) an estate, $600; (ii) a |
11 | | trust which, under
its governing instrument, is |
12 | | required to distribute all of its income
currently, |
13 | | $300; and (iii) any other trust, $100, but in each such |
14 | | case,
only to the extent such amount was deducted in |
15 | | the computation of
taxable income; |
16 | | (C) An amount equal to the amount of tax imposed by |
17 | | this Act to the
extent deducted from gross income in |
18 | | the computation of taxable income
for the taxable |
19 | | year; |
20 | | (D) The amount of any net operating loss deduction |
21 | | taken in arriving at
taxable income, other than a net |
22 | | operating loss carried forward from a
taxable year |
23 | | ending prior to December 31, 1986; |
24 | | (E) For taxable years in which a net operating |
25 | | loss carryback or
carryforward from a taxable year |
26 | | ending prior to December 31, 1986 is an
element of |
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1 | | taxable income under paragraph (1) of subsection (e) |
2 | | or subparagraph
(E) of paragraph (2) of subsection |
3 | | (e), the amount by which addition
modifications other |
4 | | than those provided by this subparagraph (E) exceeded
|
5 | | subtraction modifications in such taxable year, with |
6 | | the following limitations
applied in the order that |
7 | | they are listed: |
8 | | (i) the addition modification relating to the |
9 | | net operating loss
carried back or forward to the |
10 | | taxable year from any taxable year ending
prior to |
11 | | December 31, 1986 shall be reduced by the amount |
12 | | of addition
modification under this subparagraph |
13 | | (E) which related to that net
operating loss and |
14 | | which was taken into account in calculating the |
15 | | base
income of an earlier taxable year, and |
16 | | (ii) the addition modification relating to the |
17 | | net operating loss
carried back or forward to the |
18 | | taxable year from any taxable year ending
prior to |
19 | | December 31, 1986 shall not exceed the amount of |
20 | | such carryback or
carryforward; |
21 | | For taxable years in which there is a net |
22 | | operating loss carryback or
carryforward from more |
23 | | than one other taxable year ending prior to December
|
24 | | 31, 1986, the addition modification provided in this |
25 | | subparagraph (E) shall
be the sum of the amounts |
26 | | computed independently under the preceding
provisions |
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1 | | of this subparagraph (E) for each such taxable year; |
2 | | (F) For taxable years ending on or after January |
3 | | 1, 1989, an amount
equal to the tax deducted pursuant |
4 | | to Section 164 of the Internal Revenue
Code if the |
5 | | trust or estate is claiming the same tax for purposes |
6 | | of the
Illinois foreign tax credit under Section 601 |
7 | | of this Act; |
8 | | (G) An amount equal to the amount of the capital |
9 | | gain deduction
allowable under the Internal Revenue |
10 | | Code, to the extent deducted from
gross income in the |
11 | | computation of taxable income; |
12 | | (G-5) For taxable years ending after December 31, |
13 | | 1997, an
amount equal to any eligible remediation |
14 | | costs that the trust or estate
deducted in computing |
15 | | adjusted gross income and for which the trust
or |
16 | | estate claims a credit under subsection (l) of Section |
17 | | 201; |
18 | | (G-10) 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; and |
23 | | (G-11) 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 (G-10), 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 (R) 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 (R), 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 | | (G-12) 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 the foreign person's business activity |
21 | | outside 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 pursuant to Sections 951 |
10 | | through 964 of the Internal Revenue Code and amounts |
11 | | included in gross income under Section 78 of the |
12 | | Internal Revenue Code) with respect to the stock of |
13 | | the same person to whom the interest was paid, |
14 | | accrued, or 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 | | (G-13) 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 pursuant to Sections 951 through 964 of the |
5 | | Internal Revenue Code and amounts included in gross |
6 | | income under Section 78 of the Internal Revenue Code) |
7 | | with respect to the stock of the same person to whom |
8 | | the intangible expenses and costs were directly or |
9 | | indirectly paid, incurred, or accrued. The preceding |
10 | | sentence shall not apply to the extent that the same |
11 | | dividends caused a reduction to the addition |
12 | | modification required under Section 203(c)(2)(G-12) of |
13 | | this Act. As used in this subparagraph, the term |
14 | | "intangible expenses and costs" includes: (1) |
15 | | expenses, losses, and costs for or related to the |
16 | | direct or indirect acquisition, use, maintenance or |
17 | | management, ownership, sale, exchange, or any other |
18 | | disposition of intangible property; (2) losses |
19 | | incurred, directly or indirectly, from factoring |
20 | | transactions or discounting transactions; (3) royalty, |
21 | | patent, technical, and copyright fees; (4) licensing |
22 | | fees; and (5) other similar expenses and costs. For |
23 | | purposes of this subparagraph, "intangible property" |
24 | | includes patents, patent applications, trade names, |
25 | | trademarks, service marks, copyrights, mask works, |
26 | | trade secrets, and 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 | | (G-14) 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(c)(2)(G-12) or Section 203(c)(2)(G-13) of this |
17 | | Act; |
18 | | (G-15) An amount equal to the credit allowable to |
19 | | the taxpayer under Section 218(a) of this Act, |
20 | | determined without regard to Section 218(c) of this |
21 | | Act; |
22 | | (G-16) For taxable years ending on or after |
23 | | December 31, 2017, an amount equal to the deduction |
24 | | allowed under Section 199 of the Internal Revenue Code |
25 | | for the taxable year; |
26 | | and by deducting from the total so obtained the sum of the |
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1 | | following
amounts: |
2 | | (H) An amount equal to all amounts included in |
3 | | such total pursuant
to the provisions of Sections |
4 | | 402(a), 402(c), 403(a), 403(b), 406(a), 407(a)
and 408 |
5 | | of the Internal Revenue Code or included in such total |
6 | | as
distributions under the provisions of any |
7 | | retirement or disability plan for
employees of any |
8 | | governmental agency or unit, or retirement payments to
|
9 | | retired partners, which payments are excluded in |
10 | | computing net earnings
from self employment by Section |
11 | | 1402 of the Internal Revenue Code and
regulations |
12 | | adopted pursuant thereto; |
13 | | (I) The valuation limitation amount; |
14 | | (J) An amount equal to the amount of any tax |
15 | | imposed by this Act
which was refunded to the taxpayer |
16 | | and included in such total for the
taxable year; |
17 | | (K) An amount equal to all amounts included in |
18 | | taxable income as
modified by subparagraphs (A), (B), |
19 | | (C), (D), (E), (F) and (G) which
are exempt from |
20 | | taxation by this State either by reason of its |
21 | | statutes or
Constitution
or by reason of the |
22 | | Constitution, treaties or statutes of the United |
23 | | States;
provided that, in the case of any statute of |
24 | | this State that exempts income
derived from bonds or |
25 | | other obligations from the tax imposed under this Act,
|
26 | | the amount exempted shall be the interest net of bond |
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1 | | premium amortization; |
2 | | (L) With the exception of any amounts subtracted |
3 | | under subparagraph
(K),
an amount equal to the sum of |
4 | | all amounts disallowed as
deductions by (i) Sections |
5 | | 171(a)(2) and 265(a)(2) of the Internal Revenue
Code, |
6 | | and all amounts of expenses allocable
to interest and |
7 | | disallowed as deductions by Section 265(a)(1) of the |
8 | | Internal
Revenue Code;
and (ii) for taxable years
|
9 | | ending on or after August 13, 1999, Sections
|
10 | | 171(a)(2), 265,
280C, and 832(b)(5)(B)(i) of the |
11 | | Internal Revenue Code, plus, (iii) for taxable years |
12 | | ending on or after December 31, 2011, Section |
13 | | 45G(e)(3) of the Internal Revenue Code and, for |
14 | | taxable years ending on or after December 31, 2008, |
15 | | any amount included in gross income under Section 87 |
16 | | of the Internal Revenue Code; the provisions of this
|
17 | | subparagraph are exempt from the provisions of Section |
18 | | 250; |
19 | | (M) An amount equal to those dividends included in |
20 | | such total
which were paid by a corporation which |
21 | | conducts business operations in a River Edge |
22 | | Redevelopment Zone or zones created under the River |
23 | | Edge Redevelopment Zone Act and
conducts substantially |
24 | | all of its operations in a River Edge Redevelopment |
25 | | Zone or zones. This subparagraph (M) is exempt from |
26 | | the provisions of Section 250; |
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1 | | (N) An amount equal to any contribution made to a |
2 | | job training
project established pursuant to the Tax |
3 | | Increment Allocation
Redevelopment Act; |
4 | | (O) An amount equal to those dividends included in |
5 | | such total
that were paid by a corporation that |
6 | | conducts business operations in a
federally designated |
7 | | Foreign Trade Zone or Sub-Zone and that is designated
|
8 | | a High Impact Business located in Illinois; provided |
9 | | that dividends eligible
for the deduction provided in |
10 | | subparagraph (M) of paragraph (2) of this
subsection |
11 | | shall not be eligible for the deduction provided under |
12 | | this
subparagraph (O); |
13 | | (P) An amount equal to the amount of the deduction |
14 | | used to compute the
federal income tax credit for |
15 | | restoration of substantial amounts held under
claim of |
16 | | right for the taxable year pursuant to Section 1341 of |
17 | | the
Internal Revenue Code; |
18 | | (Q) For taxable year 1999 and thereafter, an |
19 | | amount equal to the
amount of any
(i) distributions, |
20 | | to the extent includible in gross income for
federal |
21 | | income tax purposes, made to the taxpayer because of
|
22 | | his or her status as a victim of
persecution for racial |
23 | | or religious reasons by Nazi Germany or any other Axis
|
24 | | regime or as an heir of the victim and (ii) items
of |
25 | | income, to the extent
includible in gross income for |
26 | | federal income tax purposes, attributable to,
derived |
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1 | | from or in any way related to assets stolen from, |
2 | | hidden from, or
otherwise lost to a victim of
|
3 | | persecution for racial or religious reasons by Nazi
|
4 | | Germany or any other Axis regime
immediately prior to, |
5 | | during, and immediately after World War II, including,
|
6 | | but
not limited to, interest on the proceeds |
7 | | receivable as insurance
under policies issued to a |
8 | | victim of persecution for racial or religious
reasons |
9 | | by Nazi Germany or any other Axis regime by European |
10 | | insurance
companies
immediately prior to and during |
11 | | World War II;
provided, however, this subtraction from |
12 | | federal adjusted gross income does not
apply to assets |
13 | | acquired with such assets or with the proceeds from |
14 | | the sale of
such assets; provided, further, this |
15 | | paragraph shall only apply to a taxpayer
who was the |
16 | | first recipient of such assets after their recovery |
17 | | and who is a
victim of
persecution for racial or |
18 | | religious reasons
by Nazi Germany or any other Axis |
19 | | regime or as an heir of the victim. The
amount of and |
20 | | the eligibility for any public assistance, benefit, or
|
21 | | similar entitlement is not affected by the inclusion |
22 | | of items (i) and (ii) of
this paragraph in gross income |
23 | | for federal income tax purposes.
This paragraph is |
24 | | exempt from the provisions of Section 250; |
25 | | (R) For taxable years 2001 and thereafter, for the |
26 | | taxable year in
which the bonus depreciation deduction
|
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1 | | is taken on the taxpayer's federal income tax return |
2 | | under
subsection (k) of Section 168 of the Internal |
3 | | Revenue Code and for each
applicable taxable year |
4 | | thereafter, an amount equal to "x", where: |
5 | | (1) "y" equals the amount of the depreciation |
6 | | deduction taken for the
taxable year
on the |
7 | | taxpayer's federal income tax return on property |
8 | | for which the bonus
depreciation deduction
was |
9 | | taken in any year under subsection (k) of Section |
10 | | 168 of the Internal
Revenue Code, but not |
11 | | including the bonus depreciation deduction; |
12 | | (2) for taxable years ending on or before |
13 | | December 31, 2005, "x" equals "y" multiplied by 30 |
14 | | and then divided by 70 (or "y"
multiplied by |
15 | | 0.429); and |
16 | | (3) for taxable years ending after December |
17 | | 31, 2005: |
18 | | (i) for property on which a bonus |
19 | | depreciation deduction of 30% of the adjusted |
20 | | basis was taken, "x" equals "y" multiplied by |
21 | | 30 and then divided by 70 (or "y"
multiplied |
22 | | by 0.429); and |
23 | | (ii) for property on which a bonus |
24 | | depreciation deduction of 50% of the adjusted |
25 | | basis was taken, "x" equals "y" multiplied by |
26 | | 1.0. |
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1 | | The aggregate amount deducted under this |
2 | | subparagraph in all taxable
years for any one piece of |
3 | | property may not exceed the amount of the bonus
|
4 | | depreciation deduction
taken on that property on the |
5 | | taxpayer's federal income tax return under
subsection |
6 | | (k) of Section 168 of the Internal Revenue Code. This |
7 | | subparagraph (R) is exempt from the provisions of |
8 | | Section 250; |
9 | | (S) If the taxpayer sells, transfers, abandons, or |
10 | | otherwise disposes of
property for which the taxpayer |
11 | | was required in any taxable year to make an
addition |
12 | | modification under subparagraph (G-10), then an amount |
13 | | equal to that
addition modification. |
14 | | If the taxpayer continues to own property through |
15 | | the last day of the last tax year for which the |
16 | | taxpayer may claim a depreciation deduction for |
17 | | federal income tax purposes and for which the taxpayer |
18 | | was required in any taxable year to make an addition |
19 | | modification under subparagraph (G-10), then an amount |
20 | | equal to that addition modification.
|
21 | | The taxpayer is allowed to take the deduction |
22 | | under this subparagraph
only once with respect to any |
23 | | one piece of property. |
24 | | This subparagraph (S) is exempt from the |
25 | | provisions of Section 250; |
26 | | (T) The amount of (i) any interest income (net of |
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1 | | the deductions allocable thereto) taken into account |
2 | | for the taxable year with respect to a transaction |
3 | | with a taxpayer that is required to make an addition |
4 | | modification with respect to such transaction under |
5 | | Section 203(a)(2)(D-17), 203(b)(2)(E-12), |
6 | | 203(c)(2)(G-12), or 203(d)(2)(D-7), but not to exceed |
7 | | the amount of such addition modification and
(ii) any |
8 | | income from intangible property (net of the deductions |
9 | | allocable thereto) taken into account for the taxable |
10 | | year with respect to a transaction with a taxpayer |
11 | | that is required to make an addition modification with |
12 | | respect to such transaction under Section |
13 | | 203(a)(2)(D-18), 203(b)(2)(E-13), 203(c)(2)(G-13), or |
14 | | 203(d)(2)(D-8), but not to exceed the amount of such |
15 | | addition modification. This subparagraph (T) is exempt |
16 | | from the provisions of Section 250;
|
17 | | (U) An amount equal to the interest income taken |
18 | | into account for the taxable year (net of the |
19 | | deductions allocable thereto) with respect to |
20 | | transactions with (i) a foreign person who would be a |
21 | | member of the taxpayer's unitary business group but |
22 | | for the fact the foreign person's business activity |
23 | | outside the United States is 80% or more of that |
24 | | person's total business activity and (ii) for taxable |
25 | | years ending on or after December 31, 2008, to a person |
26 | | who would be a member of the same unitary business |
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1 | | group but for the fact that the person is prohibited |
2 | | under Section 1501(a)(27) from being included in the |
3 | | unitary business group because he or she is ordinarily |
4 | | required to apportion business income under different |
5 | | subsections of Section 304, but not to exceed the |
6 | | addition modification required to be made for the same |
7 | | taxable year under Section 203(c)(2)(G-12) for |
8 | | interest paid, accrued, or incurred, directly or |
9 | | indirectly, to the same person. This subparagraph (U) |
10 | | is exempt from the provisions of Section 250; |
11 | | (V) An amount equal to the income from intangible |
12 | | property taken into account for the taxable year (net |
13 | | of the 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(c)(2)(G-13) for intangible expenses and costs |
3 | | paid, accrued, or incurred, directly or indirectly, to |
4 | | the same foreign person. This subparagraph (V) is |
5 | | exempt from the provisions of Section 250;
|
6 | | (W) in the case of an estate, an amount equal to |
7 | | all amounts included in such total pursuant to the |
8 | | provisions of Section 111 of the Internal Revenue Code |
9 | | as a recovery of items previously deducted by the |
10 | | decedent from adjusted gross income in the computation |
11 | | of taxable income. This subparagraph (W) is exempt |
12 | | from Section 250; |
13 | | (X) an amount equal to the refund included in such |
14 | | total of any tax deducted for federal income tax |
15 | | purposes, to the extent that deduction was added back |
16 | | under subparagraph (F). This subparagraph (X) is |
17 | | exempt from the provisions of Section 250; |
18 | | (Y) For taxable years ending on or after December |
19 | | 31, 2011, in the case of a taxpayer who was required to |
20 | | add back any insurance premiums under Section |
21 | | 203(c)(2)(G-14), such taxpayer may elect to subtract |
22 | | that part of a reimbursement received from the |
23 | | insurance company equal to the amount of the expense |
24 | | or loss (including expenses incurred by the insurance |
25 | | company) that would have been taken into account as a |
26 | | deduction for federal income tax purposes if the |
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1 | | expense or loss had been uninsured. If a taxpayer |
2 | | makes the election provided for by this subparagraph |
3 | | (Y), the insurer to which the premiums were paid must |
4 | | add back to income the amount subtracted by the |
5 | | taxpayer pursuant to this subparagraph (Y). This |
6 | | subparagraph (Y) is exempt from the provisions of |
7 | | Section 250; and |
8 | | (Z) For taxable years beginning after December 31, |
9 | | 2018 and before January 1, 2026, the amount of excess |
10 | | business loss of the taxpayer disallowed as a |
11 | | deduction by Section 461(l)(1)(B) of the Internal |
12 | | Revenue Code ; . |
13 | | (AA) An amount equal to a pass-through owner's |
14 | | direct share of business income apportionable to |
15 | | Illinois and nonbusiness income allocated to Illinois |
16 | | under Section 303 of this Act that was included by a |
17 | | partnership or Subchapter S corporation in its |
18 | | computation of the elective tax under subsection (d-2) |
19 | | of Section 201. This subparagraph (AA) is exempt from |
20 | | the provisions of Section 250; and |
21 | | (BB) An amount equal to a trust's indirect share |
22 | | of business income apportionable to Illinois and |
23 | | nonbusiness income allocated to Illinois under Section |
24 | | 303 of this Act that was included by a partnership in |
25 | | its computation of the elective tax under subsection |
26 | | (d-2) of Section 201, multiplied by 23.26% if the |
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1 | | trust is a direct shareholder in a Subchapter S |
2 | | corporation that is a direct partner in a partnership |
3 | | that elected tax under subsection (d-2) of Section |
4 | | 201, to the extent income is not distributed by the |
5 | | trust to its beneficiaries. This subparagraph (BB) is |
6 | | exempt from the provisions of Section 250. |
7 | | (3) Limitation. The amount of any modification |
8 | | otherwise required
under this subsection shall, under |
9 | | regulations prescribed by the
Department, be adjusted by |
10 | | any amounts included therein which were
properly paid, |
11 | | credited, or required to be distributed, or permanently |
12 | | set
aside for charitable purposes pursuant to Internal |
13 | | Revenue Code Section
642(c) during the taxable year. |
14 | | (d) Partnerships. |
15 | | (1) In general. In the case of a partnership, base |
16 | | income means an
amount equal to the taxpayer's taxable |
17 | | income for the taxable year as
modified by paragraph (2). |
18 | | (2) Modifications. The taxable income referred to in |
19 | | paragraph (1)
shall be modified by adding thereto the sum |
20 | | of the following amounts: |
21 | | (A) An amount equal to all amounts paid or accrued |
22 | | to the taxpayer as
interest or dividends during the |
23 | | taxable year to the extent excluded from
gross income |
24 | | in the computation of taxable income; |
25 | | (B) An amount equal to the amount of tax imposed by |
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1 | | this Act to the
extent deducted from gross income for |
2 | | the taxable year; |
3 | | (C) The amount of deductions allowed to the |
4 | | partnership pursuant to
Section 707 (c) of the |
5 | | Internal Revenue Code in calculating its taxable |
6 | | income; |
7 | | (D) An amount equal to the amount of the capital |
8 | | gain deduction
allowable under the Internal Revenue |
9 | | Code, to the extent deducted from
gross income in the |
10 | | computation of taxable income; |
11 | | (D-5) For taxable years 2001 and thereafter, an |
12 | | amount equal to the
bonus depreciation deduction taken |
13 | | on the taxpayer's federal income tax return for the |
14 | | taxable
year under subsection (k) of Section 168 of |
15 | | the Internal Revenue Code; |
16 | | (D-6) If the taxpayer sells, transfers, abandons, |
17 | | or otherwise disposes of
property for which the |
18 | | taxpayer was required in any taxable year to make an
|
19 | | addition modification under subparagraph (D-5), then |
20 | | an amount equal to the
aggregate amount of the |
21 | | deductions taken in all taxable years
under |
22 | | subparagraph (O) with respect to that property. |
23 | | If the taxpayer continues to own property through |
24 | | the last day of the last tax year for which the |
25 | | taxpayer may claim a depreciation deduction for |
26 | | federal income tax purposes and for which the taxpayer |
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1 | | was allowed in any taxable year to make a subtraction |
2 | | modification under subparagraph (O), then an amount |
3 | | equal to that subtraction modification.
|
4 | | The taxpayer is required to make the addition |
5 | | modification under this
subparagraph
only once with |
6 | | respect to any one piece of property; |
7 | | (D-7) An amount equal to the amount otherwise |
8 | | allowed as a deduction in computing base income for |
9 | | interest paid, accrued, or incurred, directly or |
10 | | indirectly, (i) for taxable years ending on or after |
11 | | December 31, 2004, to a foreign person who would be a |
12 | | member of the same unitary business group but for the |
13 | | fact the foreign person's business activity outside |
14 | | the United States is 80% or more of the foreign |
15 | | person's total business activity and (ii) for taxable |
16 | | years ending on or after December 31, 2008, to a person |
17 | | who would be a member of the same unitary business |
18 | | group but for the fact that the person is prohibited |
19 | | under Section 1501(a)(27) from being included in the |
20 | | unitary business group because he or she is ordinarily |
21 | | required to apportion business income under different |
22 | | subsections of Section 304. The addition modification |
23 | | required by this subparagraph shall be reduced to the |
24 | | extent that dividends were included in base income of |
25 | | the unitary group for the same taxable year and |
26 | | received by the taxpayer or by a member of the |
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1 | | taxpayer's unitary business group (including amounts |
2 | | included in gross income pursuant to Sections 951 |
3 | | through 964 of the Internal Revenue Code and amounts |
4 | | included in gross income under Section 78 of the |
5 | | Internal Revenue Code) with respect to the stock of |
6 | | the same person to whom the interest was paid, |
7 | | accrued, or incurred.
|
8 | | This paragraph shall not apply to the following:
|
9 | | (i) an item of interest paid, accrued, or |
10 | | incurred, directly or indirectly, to a person who |
11 | | is subject in a foreign country or state, other |
12 | | than a state which requires mandatory unitary |
13 | | reporting, to a tax on or measured by net income |
14 | | with respect to such interest; or |
15 | | (ii) an item of interest paid, accrued, or |
16 | | incurred, directly or indirectly, to a person if |
17 | | the taxpayer can establish, based on a |
18 | | preponderance of the evidence, both of the |
19 | | following: |
20 | | (a) the person, during the same taxable |
21 | | year, paid, accrued, or incurred, the interest |
22 | | to a person that is not a related member, and |
23 | | (b) the transaction giving rise to the |
24 | | interest expense between the taxpayer and the |
25 | | person did not have as a principal purpose the |
26 | | avoidance of Illinois income tax, and is paid |
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1 | | pursuant to a contract or agreement that |
2 | | reflects an arm's-length interest rate and |
3 | | terms; or
|
4 | | (iii) the taxpayer can establish, based on |
5 | | clear and convincing evidence, that the interest |
6 | | paid, accrued, or incurred relates to a contract |
7 | | or agreement entered into at arm's-length rates |
8 | | and terms and the principal purpose for the |
9 | | payment is not federal or Illinois tax avoidance; |
10 | | or
|
11 | | (iv) an item of interest paid, accrued, or |
12 | | incurred, directly or indirectly, to a person if |
13 | | the taxpayer establishes by clear and convincing |
14 | | evidence that the adjustments are unreasonable; or |
15 | | if the taxpayer and the Director agree in writing |
16 | | to the application or use of an alternative method |
17 | | of apportionment under Section 304(f).
|
18 | | Nothing in this subsection shall preclude the |
19 | | Director from making any other adjustment |
20 | | otherwise allowed under Section 404 of this Act |
21 | | for any tax year beginning after the effective |
22 | | date of this amendment provided such adjustment is |
23 | | made pursuant to regulation adopted by the |
24 | | Department and such regulations provide methods |
25 | | and standards by which the Department will utilize |
26 | | its authority under Section 404 of this Act; and
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1 | | (D-8) An amount equal to the amount of intangible |
2 | | expenses and costs otherwise allowed as a deduction in |
3 | | computing base income, and that were paid, accrued, or |
4 | | incurred, directly or indirectly, (i) for taxable |
5 | | years ending on or after December 31, 2004, to a |
6 | | foreign person who would be a member of the same |
7 | | unitary business group but for the fact that the |
8 | | foreign person's business activity outside the United |
9 | | States is 80% or more of that person's total business |
10 | | activity and (ii) for taxable years ending on or after |
11 | | December 31, 2008, to a person who would be a member of |
12 | | the same unitary business group but for the fact that |
13 | | the person is prohibited under Section 1501(a)(27) |
14 | | from being included in the unitary business group |
15 | | because he or she is ordinarily required to apportion |
16 | | business income under different subsections of Section |
17 | | 304. The addition modification required by this |
18 | | subparagraph shall be reduced to the extent that |
19 | | dividends were included in base income of the unitary |
20 | | group for the same taxable year and received by the |
21 | | taxpayer or by a member of the taxpayer's unitary |
22 | | business group (including amounts included in gross |
23 | | income pursuant to Sections 951 through 964 of the |
24 | | Internal Revenue Code and amounts included in gross |
25 | | income under Section 78 of the Internal Revenue Code) |
26 | | with respect to the stock of the same person to whom |
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1 | | the intangible expenses and costs were directly or |
2 | | indirectly paid, incurred or accrued. The preceding |
3 | | sentence shall not apply to the extent that the same |
4 | | dividends caused a reduction to the addition |
5 | | modification required under Section 203(d)(2)(D-7) of |
6 | | this Act. As used in this subparagraph, the term |
7 | | "intangible expenses and costs" includes (1) expenses, |
8 | | losses, and costs for, or related to, the direct or |
9 | | indirect acquisition, use, maintenance or management, |
10 | | ownership, sale, exchange, or any other disposition of |
11 | | intangible property; (2) losses incurred, directly or |
12 | | indirectly, from factoring transactions or discounting |
13 | | transactions; (3) royalty, patent, technical, and |
14 | | copyright fees; (4) licensing fees; and (5) other |
15 | | similar expenses and costs. For purposes of this |
16 | | subparagraph, "intangible property" includes patents, |
17 | | patent applications, trade names, trademarks, service |
18 | | marks, copyrights, mask works, trade secrets, and |
19 | | similar types of intangible assets; |
20 | | This paragraph shall not apply to the following: |
21 | | (i) any item of intangible expenses or costs |
22 | | paid, accrued, or incurred, directly or |
23 | | indirectly, from a transaction with a person who |
24 | | is subject in a foreign country or state, other |
25 | | than a state which requires mandatory unitary |
26 | | reporting, to a tax on or measured by net income |
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1 | | with respect to such item; or |
2 | | (ii) any item of intangible expense or cost |
3 | | paid, accrued, or incurred, directly or |
4 | | indirectly, if the taxpayer can establish, based |
5 | | on a preponderance of the evidence, both of the |
6 | | following: |
7 | | (a) the person during the same taxable |
8 | | year paid, accrued, or incurred, the |
9 | | intangible expense or cost to a person that is |
10 | | not a related member, and |
11 | | (b) the transaction giving rise to the |
12 | | intangible expense or cost between the |
13 | | taxpayer and the person did not have as a |
14 | | principal purpose the avoidance of Illinois |
15 | | income tax, and is paid pursuant to a contract |
16 | | or agreement that reflects arm's-length terms; |
17 | | or |
18 | | (iii) any item of intangible expense or cost |
19 | | paid, accrued, or incurred, directly or |
20 | | indirectly, from a transaction with a person if |
21 | | the taxpayer establishes by clear and convincing |
22 | | evidence, that the adjustments are unreasonable; |
23 | | or if the taxpayer and the Director agree in |
24 | | writing to the application or use of an |
25 | | alternative method of apportionment under Section |
26 | | 304(f);
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1 | | Nothing in this subsection shall preclude the |
2 | | Director from making any other adjustment |
3 | | otherwise allowed under Section 404 of this Act |
4 | | for any tax year beginning after the effective |
5 | | date of this amendment provided such adjustment is |
6 | | made pursuant to regulation adopted by the |
7 | | Department and such regulations provide methods |
8 | | and standards by which the Department will utilize |
9 | | its authority under Section 404 of this Act;
|
10 | | (D-9) For taxable years ending on or after |
11 | | December 31, 2008, an amount equal to the amount of |
12 | | insurance premium expenses and costs otherwise allowed |
13 | | as a deduction in computing base income, and that were |
14 | | paid, accrued, or incurred, directly or indirectly, to |
15 | | a person who would be a member of the same unitary |
16 | | business group but for the fact that the person is |
17 | | prohibited under Section 1501(a)(27) from being |
18 | | included in the unitary business group because he or |
19 | | she is ordinarily required to apportion business |
20 | | income under different subsections of Section 304. The |
21 | | addition modification required by this subparagraph |
22 | | shall be reduced to the extent that dividends were |
23 | | included in base income of the unitary group for the |
24 | | same taxable year and received by the taxpayer or by a |
25 | | member of the taxpayer's unitary business group |
26 | | (including amounts included in gross income under |
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1 | | Sections 951 through 964 of the Internal Revenue Code |
2 | | and amounts included in gross income under Section 78 |
3 | | of the Internal Revenue Code) with respect to the |
4 | | stock of the same person to whom the premiums and costs |
5 | | were directly or indirectly paid, incurred, or |
6 | | accrued. The preceding sentence does not apply to the |
7 | | extent that the same dividends caused a reduction to |
8 | | the addition modification required under Section |
9 | | 203(d)(2)(D-7) or Section 203(d)(2)(D-8) of this Act; |
10 | | (D-10) An amount equal to the credit allowable to |
11 | | the taxpayer under Section 218(a) of this Act, |
12 | | determined without regard to Section 218(c) of this |
13 | | Act; |
14 | | (D-11) For taxable years ending on or after |
15 | | December 31, 2017, an amount equal to the deduction |
16 | | allowed under Section 199 of the Internal Revenue Code |
17 | | for the taxable year; |
18 | | and by deducting from the total so obtained the following |
19 | | amounts: |
20 | | (E) The valuation limitation amount; |
21 | | (F) An amount equal to the amount of any tax |
22 | | imposed by this Act which
was refunded to the taxpayer |
23 | | and included in such total for the taxable year; |
24 | | (G) An amount equal to all amounts included in |
25 | | taxable income as
modified by subparagraphs (A), (B), |
26 | | (C) and (D) which are exempt from
taxation by this |
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1 | | State either by reason of its statutes or Constitution |
2 | | or
by reason of
the Constitution, treaties or statutes |
3 | | of the United States;
provided that, in the case of any |
4 | | statute of this State that exempts income
derived from |
5 | | bonds or other obligations from the tax imposed under |
6 | | this Act,
the amount exempted shall be the interest |
7 | | net of bond premium amortization; |
8 | | (H) Any income of the partnership which |
9 | | constitutes personal service
income as defined in |
10 | | Section 1348(b)(1) of the Internal Revenue Code (as
in |
11 | | effect December 31, 1981) or a reasonable allowance |
12 | | for compensation
paid or accrued for services rendered |
13 | | by partners to the partnership,
whichever is greater; |
14 | | this subparagraph (H) is exempt from the provisions of |
15 | | Section 250; |
16 | | (I) An amount equal to all amounts of income |
17 | | distributable to an entity
subject to the Personal |
18 | | Property Tax Replacement Income Tax imposed by
|
19 | | subsections (c) and (d) of Section 201 of this Act |
20 | | including amounts
distributable to organizations |
21 | | exempt from federal income tax by reason of
Section |
22 | | 501(a) of the Internal Revenue Code; this subparagraph |
23 | | (I) is exempt from the provisions of Section 250; |
24 | | (J) With the exception of any amounts subtracted |
25 | | under subparagraph
(G),
an amount equal to the sum of |
26 | | all amounts disallowed as deductions
by (i) Sections |
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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 | | (K) An amount equal to those dividends included in |
16 | | such total which were
paid by a corporation which |
17 | | conducts business operations in a River Edge |
18 | | Redevelopment Zone or zones created under the River |
19 | | Edge Redevelopment Zone Act and
conducts substantially |
20 | | all of its operations
from a River Edge Redevelopment |
21 | | Zone or zones. This subparagraph (K) is exempt from |
22 | | the provisions of Section 250; |
23 | | (L) An amount equal to any contribution made to a |
24 | | job training project
established pursuant to the Real |
25 | | Property Tax Increment Allocation
Redevelopment Act; |
26 | | (M) An amount equal to those dividends included in |
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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 (K) of paragraph (2) of this
subsection |
7 | | shall not be eligible for the deduction provided under |
8 | | this
subparagraph (M); |
9 | | (N) An amount equal to the amount of the deduction |
10 | | used to compute the
federal income tax credit for |
11 | | restoration of substantial amounts held under
claim of |
12 | | right for the taxable year pursuant to Section 1341 of |
13 | | the
Internal Revenue Code; |
14 | | (O) For taxable years 2001 and thereafter, for the |
15 | | taxable year in
which the bonus depreciation deduction
|
16 | | is taken on the taxpayer's federal income tax return |
17 | | under
subsection (k) of Section 168 of the Internal |
18 | | Revenue Code and for each
applicable taxable year |
19 | | thereafter, an amount equal to "x", where: |
20 | | (1) "y" equals the amount of the depreciation |
21 | | deduction taken for the
taxable year
on the |
22 | | taxpayer's federal income tax return on property |
23 | | for which the bonus
depreciation deduction
was |
24 | | taken in any year under subsection (k) of Section |
25 | | 168 of the Internal
Revenue Code, but not |
26 | | including the bonus depreciation deduction; |
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1 | | (2) for taxable years ending on or before |
2 | | December 31, 2005, "x" equals "y" multiplied by 30 |
3 | | and then divided by 70 (or "y"
multiplied by |
4 | | 0.429); and |
5 | | (3) for taxable years ending after December |
6 | | 31, 2005: |
7 | | (i) for property on which a bonus |
8 | | depreciation deduction of 30% of the adjusted |
9 | | basis was taken, "x" equals "y" multiplied by |
10 | | 30 and then divided by 70 (or "y"
multiplied |
11 | | by 0.429); and |
12 | | (ii) for property on which a bonus |
13 | | depreciation deduction of 50% of the adjusted |
14 | | basis was taken, "x" equals "y" multiplied by |
15 | | 1.0. |
16 | | The aggregate amount deducted under this |
17 | | subparagraph in all taxable
years for any one piece of |
18 | | property may not exceed the amount of the bonus
|
19 | | depreciation deduction
taken on that property on the |
20 | | taxpayer's federal income tax return under
subsection |
21 | | (k) of Section 168 of the Internal Revenue Code. This |
22 | | subparagraph (O) is exempt from the provisions of |
23 | | Section 250; |
24 | | (P) If the taxpayer sells, transfers, abandons, or |
25 | | otherwise disposes of
property for which the taxpayer |
26 | | was required in any taxable year to make an
addition |
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1 | | modification under subparagraph (D-5), then an amount |
2 | | equal to that
addition modification. |
3 | | If the taxpayer continues to own property through |
4 | | the last day of the last tax year for which the |
5 | | taxpayer may claim a depreciation deduction for |
6 | | federal income tax purposes and for which the taxpayer |
7 | | was required in any taxable year to make an addition |
8 | | modification under subparagraph (D-5), then an amount |
9 | | equal to that addition modification.
|
10 | | The taxpayer is allowed to take the deduction |
11 | | under this subparagraph
only once with respect to any |
12 | | one piece of property. |
13 | | This subparagraph (P) is exempt from the |
14 | | provisions of Section 250; |
15 | | (Q) The amount of (i) any interest income (net of |
16 | | the deductions allocable thereto) taken into account |
17 | | for the taxable year with respect to a transaction |
18 | | with a taxpayer that is required to make an addition |
19 | | modification with respect to such transaction under |
20 | | Section 203(a)(2)(D-17), 203(b)(2)(E-12), |
21 | | 203(c)(2)(G-12), or 203(d)(2)(D-7), but not to exceed |
22 | | the amount of such addition modification and
(ii) any |
23 | | income from intangible property (net of the deductions |
24 | | allocable thereto) taken into account for the taxable |
25 | | year with respect to a transaction with a taxpayer |
26 | | that is required to make an addition modification with |
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1 | | respect to such transaction under Section |
2 | | 203(a)(2)(D-18), 203(b)(2)(E-13), 203(c)(2)(G-13), or |
3 | | 203(d)(2)(D-8), but not to exceed the amount of such |
4 | | addition modification. This subparagraph (Q) is exempt |
5 | | from Section 250;
|
6 | | (R) An amount equal to the interest income taken |
7 | | into account for the taxable year (net of the |
8 | | 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(d)(2)(D-7) for interest paid, accrued, or |
24 | | incurred, directly or indirectly, to the same person. |
25 | | This subparagraph (R) is exempt from Section 250; |
26 | | (S) An amount equal to the income from intangible |
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1 | | property taken into account for the taxable year (net |
2 | | of the deductions allocable thereto) with respect to |
3 | | transactions with (i) a foreign person who would be a |
4 | | member of the taxpayer's unitary business group but |
5 | | for the fact that the foreign person's business |
6 | | activity outside the United States is 80% or more of |
7 | | that person's total business activity and (ii) for |
8 | | taxable years ending on or after December 31, 2008, to |
9 | | a person who would be a member of the same unitary |
10 | | business group but for the fact that the person is |
11 | | prohibited under Section 1501(a)(27) from being |
12 | | included in the unitary business group because he or |
13 | | she is ordinarily required to apportion business |
14 | | income under different subsections of Section 304, but |
15 | | not to exceed the addition modification required to be |
16 | | made for the same taxable year under Section |
17 | | 203(d)(2)(D-8) for intangible expenses and costs paid, |
18 | | accrued, or incurred, directly or indirectly, to the |
19 | | same person. This subparagraph (S) is exempt from |
20 | | Section 250; and
|
21 | | (T) For taxable years ending on or after December |
22 | | 31, 2011, in the case of a taxpayer who was required to |
23 | | add back any insurance premiums under Section |
24 | | 203(d)(2)(D-9), such taxpayer may elect to subtract |
25 | | that part of a reimbursement received from the |
26 | | insurance company equal to the amount of the expense |
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1 | | or loss (including expenses incurred by the insurance |
2 | | company) that would have been taken into account as a |
3 | | deduction for federal income tax purposes if the |
4 | | expense or loss had been uninsured. If a taxpayer |
5 | | makes the election provided for by this subparagraph |
6 | | (T), the insurer to which the premiums were paid must |
7 | | add back to income the amount subtracted by the |
8 | | taxpayer pursuant to this subparagraph (T). This |
9 | | subparagraph (T) is exempt from the provisions of |
10 | | Section 250. |
11 | | (e) Gross income; adjusted gross income; taxable income. |
12 | | (1) In general. Subject to the provisions of paragraph |
13 | | (2) and
subsection (b)(3), for purposes of this Section |
14 | | and Section 803(e), a
taxpayer's gross income, adjusted |
15 | | gross income, or taxable income for
the taxable year shall |
16 | | mean the amount of gross income, adjusted gross
income or |
17 | | taxable income properly reportable for federal income tax
|
18 | | purposes for the taxable year under the provisions of the |
19 | | Internal
Revenue Code. Taxable income may be less than |
20 | | zero. However, for taxable
years ending on or after |
21 | | December 31, 1986, net operating loss
carryforwards from |
22 | | taxable years ending prior to December 31, 1986, may not
|
23 | | exceed the sum of federal taxable income for the taxable |
24 | | year before net
operating loss deduction, plus the excess |
25 | | of addition modifications over
subtraction modifications |
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1 | | for the taxable year. For taxable years ending
prior to |
2 | | December 31, 1986, taxable income may never be an amount |
3 | | in excess
of the net operating loss for the taxable year as |
4 | | defined in subsections
(c) and (d) of Section 172 of the |
5 | | Internal Revenue Code, provided that when
taxable income |
6 | | of a corporation (other than a Subchapter S corporation),
|
7 | | trust, or estate is less than zero and addition |
8 | | modifications, other than
those provided by subparagraph |
9 | | (E) of paragraph (2) of subsection (b) for
corporations or |
10 | | subparagraph (E) of paragraph (2) of subsection (c) for
|
11 | | trusts and estates, exceed subtraction modifications, an |
12 | | addition
modification must be made under those |
13 | | subparagraphs for any other taxable
year to which the |
14 | | taxable income less than zero (net operating loss) is
|
15 | | applied under Section 172 of the Internal Revenue Code or |
16 | | under
subparagraph (E) of paragraph (2) of this subsection |
17 | | (e) applied in
conjunction with Section 172 of the |
18 | | Internal Revenue Code. |
19 | | (2) Special rule. For purposes of paragraph (1) of |
20 | | this subsection,
the taxable income properly reportable |
21 | | for federal income tax purposes
shall mean: |
22 | | (A) Certain life insurance companies. In the case |
23 | | of a life
insurance company subject to the tax imposed |
24 | | by Section 801 of the
Internal Revenue Code, life |
25 | | insurance company taxable income, plus the
amount of |
26 | | distribution from pre-1984 policyholder surplus |
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1 | | accounts as
calculated under Section 815a of the |
2 | | Internal Revenue Code; |
3 | | (B) Certain other insurance companies. In the case |
4 | | of mutual
insurance companies subject to the tax |
5 | | imposed by Section 831 of the
Internal Revenue Code, |
6 | | insurance company taxable income; |
7 | | (C) Regulated investment companies. In the case of |
8 | | a regulated
investment company subject to the tax |
9 | | imposed by Section 852 of the
Internal Revenue Code, |
10 | | investment company taxable income; |
11 | | (D) Real estate investment trusts. In the case of |
12 | | a real estate
investment trust subject to the tax |
13 | | imposed by Section 857 of the
Internal Revenue Code, |
14 | | real estate investment trust taxable income; |
15 | | (E) Consolidated corporations. In the case of a |
16 | | corporation which
is a member of an affiliated group |
17 | | of corporations filing a consolidated
income tax |
18 | | return for the taxable year for federal income tax |
19 | | purposes,
taxable income determined as if such |
20 | | corporation had filed a separate
return for federal |
21 | | income tax purposes for the taxable year and each
|
22 | | preceding taxable year for which it was a member of an |
23 | | affiliated group.
For purposes of this subparagraph, |
24 | | the taxpayer's separate taxable
income shall be |
25 | | determined as if the election provided by Section
|
26 | | 243(b)(2) of the Internal Revenue Code had been in |
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1 | | effect for all such years; |
2 | | (F) Cooperatives. In the case of a cooperative |
3 | | corporation or
association, the taxable income of such |
4 | | organization determined in
accordance with the |
5 | | provisions of Section 1381 through 1388 of the
|
6 | | Internal Revenue Code, but without regard to the |
7 | | prohibition against offsetting losses from patronage |
8 | | activities against income from nonpatronage |
9 | | activities; except that a cooperative corporation or |
10 | | association may make an election to follow its federal |
11 | | income tax treatment of patronage losses and |
12 | | nonpatronage losses. In the event such election is |
13 | | made, such losses shall be computed and carried over |
14 | | in a manner consistent with subsection (a) of Section |
15 | | 207 of this Act and apportioned by the apportionment |
16 | | factor reported by the cooperative on its Illinois |
17 | | income tax return filed for the taxable year in which |
18 | | the losses are incurred. The election shall be |
19 | | effective for all taxable years with original returns |
20 | | due on or after the date of the election. In addition, |
21 | | the cooperative may file an amended return or returns, |
22 | | as allowed under this Act, to provide that the |
23 | | election shall be effective for losses incurred or |
24 | | carried forward for taxable years occurring prior to |
25 | | the date of the election. Once made, the election may |
26 | | only be revoked upon approval of the Director. The |
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1 | | Department shall adopt rules setting forth |
2 | | requirements for documenting the elections and any |
3 | | resulting Illinois net loss and the standards to be |
4 | | used by the Director in evaluating requests to revoke |
5 | | elections. Public Act 96-932 is declaratory of |
6 | | existing law; |
7 | | (G) Subchapter S corporations. In the case of: (i) |
8 | | a Subchapter S
corporation for which there is in |
9 | | effect an election for the taxable year
under Section |
10 | | 1362 of the Internal Revenue Code, the taxable income |
11 | | of such
corporation determined in accordance with |
12 | | Section 1363(b) of the Internal
Revenue Code, except |
13 | | that taxable income shall take into
account those |
14 | | items which are required by Section 1363(b)(1) of the
|
15 | | Internal Revenue Code to be separately stated; and |
16 | | (ii) a Subchapter
S corporation for which there is in |
17 | | effect a federal election to opt out of
the provisions |
18 | | of the Subchapter S Revision Act of 1982 and have |
19 | | applied
instead the prior federal Subchapter S rules |
20 | | as in effect on July 1, 1982,
the taxable income of |
21 | | such corporation determined in accordance with the
|
22 | | federal Subchapter S rules as in effect on July 1, |
23 | | 1982; and |
24 | | (H) Partnerships. In the case of a partnership, |
25 | | taxable income
determined in accordance with Section |
26 | | 703 of the Internal Revenue Code,
except that taxable |
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1 | | income shall take into account those items which are
|
2 | | required by Section 703(a)(1) to be separately stated |
3 | | but which would be
taken into account by an individual |
4 | | in calculating his taxable income. |
5 | | (3) Recapture of business expenses on disposition of |
6 | | asset or business. Notwithstanding any other law to the |
7 | | contrary, if in prior years income from an asset or |
8 | | business has been classified as business income and in a |
9 | | later year is demonstrated to be non-business income, then |
10 | | all expenses, without limitation, deducted in such later |
11 | | year and in the 2 immediately preceding taxable years |
12 | | related to that asset or business that generated the |
13 | | non-business income shall be added back and recaptured as |
14 | | business income in the year of the disposition of the |
15 | | asset or business. Such amount shall be apportioned to |
16 | | Illinois using the greater of the apportionment fraction |
17 | | computed for the business under Section 304 of this Act |
18 | | for the taxable year or the average of the apportionment |
19 | | fractions computed for the business under Section 304 of |
20 | | this Act for the taxable year and for the 2 immediately |
21 | | preceding taxable years.
|
22 | | (f) Valuation limitation amount. |
23 | | (1) In general. The valuation limitation amount |
24 | | referred to in
subsections (a)(2)(G), (c)(2)(I) and |
25 | | (d)(2)(E) is an amount equal to: |
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1 | | (A) The sum of the pre-August 1, 1969 appreciation |
2 | | amounts (to the
extent consisting of gain reportable |
3 | | under the provisions of Section
1245 or 1250 of the |
4 | | Internal Revenue Code) for all property in respect
of |
5 | | which such gain was reported for the taxable year; |
6 | | plus |
7 | | (B) The lesser of (i) the sum of the pre-August 1, |
8 | | 1969 appreciation
amounts (to the extent consisting of |
9 | | capital gain) for all property in
respect of which |
10 | | such gain was reported for federal income tax purposes
|
11 | | for the taxable year, or (ii) the net capital gain for |
12 | | the taxable year,
reduced in either case by any amount |
13 | | of such gain included in the amount
determined under |
14 | | subsection (a)(2)(F) or (c)(2)(H). |
15 | | (2) Pre-August 1, 1969 appreciation amount. |
16 | | (A) If the fair market value of property referred |
17 | | to in paragraph
(1) was readily ascertainable on |
18 | | August 1, 1969, the pre-August 1, 1969
appreciation |
19 | | amount for such property is the lesser of (i) the |
20 | | excess of
such fair market value over the taxpayer's |
21 | | basis (for determining gain)
for such property on that |
22 | | date (determined under the Internal Revenue
Code as in |
23 | | effect on that date), or (ii) the total gain realized |
24 | | and
reportable for federal income tax purposes in |
25 | | respect of the sale,
exchange or other disposition of |
26 | | such property. |
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1 | | (B) If the fair market value of property referred |
2 | | to in paragraph
(1) was not readily ascertainable on |
3 | | August 1, 1969, the pre-August 1,
1969 appreciation |
4 | | amount for such property is that amount which bears
|
5 | | the same ratio to the total gain reported in respect of |
6 | | the property for
federal income tax purposes for the |
7 | | taxable year, as the number of full
calendar months in |
8 | | that part of the taxpayer's holding period for the
|
9 | | property ending July 31, 1969 bears to the number of |
10 | | full calendar
months in the taxpayer's entire holding |
11 | | period for the
property. |
12 | | (C) The Department shall prescribe such |
13 | | regulations as may be
necessary to carry out the |
14 | | purposes of this paragraph. |
15 | | (g) Double deductions. Unless specifically provided |
16 | | otherwise, nothing
in this Section shall permit the same item |
17 | | to be deducted more than once. |
18 | | (h) Legislative intention. Except as expressly provided by |
19 | | this
Section there shall be no modifications or limitations on |
20 | | the amounts
of income, gain, loss or deduction taken into |
21 | | account in determining
gross income, adjusted gross income or |
22 | | taxable income for federal income
tax purposes for the taxable |
23 | | year, or in the amount of such items
entering into the |
24 | | computation of base income and net income under this
Act for |
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1 | | such taxable year, whether in respect of property values as of
|
2 | | August 1, 1969 or otherwise. |
3 | | (Source: P.A. 100-22, eff. 7-6-17; 100-905, eff. 8-17-18; |
4 | | 101-9, eff. 6-5-19; 101-81, eff. 7-12-19; revised 9-20-19.)
|
5 | | (35 ILCS 5/502) (from Ch. 120, par. 5-502)
|
6 | | (Text of Section without the changes made by P.A. 101-8, |
7 | | which did not take effect (see Section 99 of P.A. 101-8))
|
8 | | Sec. 502. Returns and notices.
|
9 | | (a) In general. A return with respect to the taxes imposed |
10 | | by this
Act shall be made by every person for any taxable year:
|
11 | | (1) for which such person is liable for a tax imposed |
12 | | by this Act,
or
|
13 | | (2) in the case of a resident or in the case of a |
14 | | corporation which
is qualified to do business in this |
15 | | State, for which such person is
required to make a federal |
16 | | income tax return, regardless of whether such
person is |
17 | | liable for a tax imposed by this Act. However, this |
18 | | paragraph
shall not require a resident to make a return if |
19 | | such person has
an
Illinois base income of the basic |
20 | | amount in Section 204(b) or
less and is either claimed as a |
21 | | dependent on
another person's tax return under the |
22 | | Internal Revenue Code, or is
claimed as a dependent on |
23 | | another person's tax return under this Act.
|
24 | | Notwithstanding the provisions of paragraph (1), a |
25 | | nonresident (other than, for taxable years ending on or after |
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1 | | December 31, 2011, a nonresident required to withhold tax |
2 | | under Section 709.5) whose Illinois income tax liability under |
3 | | subsections (a), (b), (c), and (d) of Section 201 of this Act |
4 | | is paid in full after taking into account the credits allowed |
5 | | under subsection (f) of this Section or allowed under Section |
6 | | 709.5 of this Act shall not be required to file a return under |
7 | | this subsection (a). In addition, a nonresident individual |
8 | | with no Illinois income tax liability under subsections (a), |
9 | | (b), (c), and (d) of Section 201 of this Act after taking into |
10 | | account the modifications in subsections (a)(2)(II) and |
11 | | (a)(2)(JJ) of Section 203 shall not be required to file a |
12 | | return under this subsection (a).
|
13 | | (b) Fiduciaries and receivers.
|
14 | | (1) Decedents. If an individual is deceased, any |
15 | | return or notice
required of such individual under this |
16 | | Act shall be made by his
executor, administrator, or other |
17 | | person charged with the property of
such decedent.
|
18 | | (2) Individuals under a disability. If an individual |
19 | | is unable
to make a return or notice required under this |
20 | | Act, the return or notice
required of such individual |
21 | | shall be made by his duly authorized agent,
guardian, |
22 | | fiduciary or other person charged with the care
of the |
23 | | person or property of such individual.
|
24 | | (3) Estates and trusts. Returns or notices required of |
25 | | an estate
or a trust shall be made by the fiduciary |
26 | | thereof.
|
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1 | | (4) Receivers, trustees and assignees for |
2 | | corporations. In a
case where a receiver, trustee in |
3 | | bankruptcy, or assignee, by order of a
court of competent |
4 | | jurisdiction, by operation of law, or otherwise, has
|
5 | | possession of or holds title to all or substantially all |
6 | | the property or
business of a corporation, whether or not |
7 | | such property or business is
being operated, such |
8 | | receiver, trustee, or assignee shall make the
returns and |
9 | | notices required of such corporation in the same manner |
10 | | and
form as corporations are required to make such returns |
11 | | and notices.
|
12 | | (c) Joint returns by husband and wife.
|
13 | | (1) Except as provided in paragraph (3): |
14 | | (A) if a husband and wife file a
joint federal |
15 | | income tax return for a taxable year ending before |
16 | | December 31, 2009, they shall file a joint
return |
17 | | under this Act for such taxable year and their |
18 | | liabilities shall be
joint and several; |
19 | | (B) if a husband and wife file a joint federal |
20 | | income tax return for a taxable year ending on or after |
21 | | December 31, 2009, they may elect to file separate |
22 | | returns under this Act for such taxable year. The |
23 | | election under this paragraph must be made on or |
24 | | before the due date (including extensions) of the |
25 | | return and, once made, shall be irrevocable. If no |
26 | | election is timely made under this paragraph for a |
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1 | | taxable year: |
2 | | (i) the couple must file a joint return under |
3 | | this Act for such taxable year, |
4 | | (ii) their liabilities shall be joint and |
5 | | several, and |
6 | | (iii) any overpayment for that taxable year |
7 | | may be withheld under Section 909 of this Act or |
8 | | under Section 2505-275 of the Civil Administrative |
9 | | Code of Illinois and applied against a debt of |
10 | | either spouse without regard to the amount of the |
11 | | overpayment attributable to the other spouse; and |
12 | | (C) if the federal income tax liability of either |
13 | | spouse is
determined on a separate federal income tax |
14 | | return, they shall file separate
returns under this |
15 | | Act.
|
16 | | (2) If neither spouse is required to file a federal |
17 | | income tax
return and either or both are required to file a |
18 | | return under this Act,
they may elect to file separate or |
19 | | joint returns and pursuant to such
election their |
20 | | liabilities shall be separate or joint and several.
|
21 | | (3) If either husband or wife is a resident and the |
22 | | other is a
nonresident, they shall file separate returns |
23 | | in this State on such
forms as may be required by the |
24 | | Department in which event their tax
liabilities shall be |
25 | | separate; but if they file a joint federal income tax |
26 | | return for a taxable year, they may elect to determine |
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1 | | their
joint net income and file a joint return for that |
2 | | taxable year under the provisions of paragraph (1) of this |
3 | | subsection as if both were residents and
in such case, |
4 | | their liabilities shall be joint and several.
|
5 | | (4) Innocent spouses.
|
6 | | (A) However, for tax liabilities arising and paid |
7 | | prior to August 13,
1999, an innocent spouse shall be |
8 | | relieved of
liability for tax
(including interest and |
9 | | penalties) for any taxable year for which a joint
|
10 | | return has been made, upon submission of proof that |
11 | | the Internal Revenue
Service has made a determination |
12 | | under Section 6013(e) of the Internal
Revenue Code, |
13 | | for the same taxable year, which determination |
14 | | relieved the
spouse from liability for federal income |
15 | | taxes.
If there is no federal income tax liability at |
16 | | issue for the
same taxable year, the Department shall |
17 | | rely on the provisions of Section
6013(e) to determine |
18 | | whether the person requesting innocent spouse |
19 | | abatement of
tax, penalty, and interest is entitled to |
20 | | that relief.
|
21 | | (B) For tax liabilities arising on and after |
22 | | August 13, 1999 or which arose prior to that date, but |
23 | | remain unpaid as of that date, if
an individual
who |
24 | | filed a joint return for any taxable year has made an |
25 | | election under this
paragraph, the individual's |
26 | | liability for any tax shown on the joint return
shall |
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1 | | not exceed the individual's separate return amount and |
2 | | the individual's
liability for any deficiency assessed |
3 | | for that taxable year shall not exceed
the portion of |
4 | | the deficiency properly allocable to the individual. |
5 | | For
purposes of this paragraph:
|
6 | | (i) An election properly made pursuant to |
7 | | Section 6015 of the Internal
Revenue Code shall |
8 | | constitute an election under this paragraph, |
9 | | provided that
the election shall not be effective |
10 | | until the individual has notified the
Department |
11 | | of the election in the form and manner prescribed |
12 | | by the Department.
|
13 | | (ii) If no election has been made under |
14 | | Section 6015, the individual
may make an election |
15 | | under this paragraph in the form and manner |
16 | | prescribed by
the Department, provided that no |
17 | | election may be made if the Department finds
that |
18 | | assets were transferred
between individuals filing |
19 | | a joint return as part of a scheme by such
|
20 | | individuals to avoid payment of Illinois income |
21 | | tax and the election shall not
eliminate the |
22 | | individual's liability for any portion of a |
23 | | deficiency
attributable to an error on the return |
24 | | of which the individual had actual
knowledge as of |
25 | | the date of filing.
|
26 | | (iii) In determining the separate return |
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1 | | amount or portion of any
deficiency attributable |
2 | | to an individual, the Department shall follow the
|
3 | | provisions in subsections (c) and (d) of Section |
4 | | 6015 of the Internal Revenue Code.
|
5 | | (iv) In determining the validity of an |
6 | | individual's election under
subparagraph (ii) and |
7 | | in determining an electing individual's separate |
8 | | return
amount or portion of any deficiency under |
9 | | subparagraph (iii), any determination
made by the |
10 | | Secretary of the Treasury, by the United States |
11 | | Tax Court on
petition for review of a |
12 | | determination by the Secretary of the Treasury, or |
13 | | on
appeal from the United States Tax Court under |
14 | | Section 6015 of
the Internal
Revenue Code |
15 | | regarding criteria for eligibility or under |
16 | | subsection (d) of
Section 6015
of the Internal |
17 | | Revenue Code regarding the allocation of any item |
18 | | of income,
deduction, payment, or credit between |
19 | | an individual making the federal election
and that |
20 | | individual's spouse shall be conclusively presumed |
21 | | to be correct.
With respect to any item that is not |
22 | | the subject of a determination by the
Secretary of |
23 | | the Treasury or the federal courts, in any |
24 | | proceeding
involving this subsection, the
|
25 | | individual making the election shall have the |
26 | | burden of proof with respect to
any item except |
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1 | | that the Department shall have the burden of proof |
2 | | with respect
to items in subdivision (ii).
|
3 | | (v) Any election made by an individual under |
4 | | this subsection shall
apply to all years for which |
5 | | that individual and the spouse named in the
|
6 | | election have filed a joint return.
|
7 | | (vi) After receiving a notice that the federal |
8 | | election has been made
or after receiving an |
9 | | election under subdivision (ii), the Department |
10 | | shall
take no collection action against the |
11 | | electing individual for any liability
arising from |
12 | | a joint return covered by the election until the |
13 | | Department has
notified the electing individual in |
14 | | writing that the election is invalid or of
the |
15 | | portion of the liability the Department has |
16 | | allocated to the electing
individual. Within 60 |
17 | | days (150 days if the individual is outside the |
18 | | United
States) after the issuance of such |
19 | | notification, the individual may file a
written |
20 | | protest of the denial of the election or of the |
21 | | Department's
determination of the liability |
22 | | allocated to him or her and shall be granted a
|
23 | | hearing within the Department under the provisions |
24 | | of Section 908. If a
protest is filed, the |
25 | | Department shall take no collection action against |
26 | | the
electing individual until the decision |
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1 | | regarding the protest has become final
under |
2 | | subsection (d) of Section 908 or, if |
3 | | administrative review of the
Department's decision
|
4 | | is requested under Section 1201, until the |
5 | | decision of the court becomes
final.
|
6 | | (d) Partnerships. Every partnership having any base income
|
7 | | allocable to this State in accordance with section 305(c) |
8 | | shall retain
information concerning all items of income, gain, |
9 | | loss and
deduction; the names and addresses of all of the |
10 | | partners, or names and
addresses of members of a limited |
11 | | liability company, or other
persons who would be entitled to |
12 | | share in the base income of the
partnership if distributed; |
13 | | the amount of the distributive share of
each; and such other |
14 | | pertinent information as the Department may by
forms or |
15 | | regulations prescribe. The partnership shall make that |
16 | | information
available to the Department when requested by the |
17 | | Department.
|
18 | | (e) For taxable years ending on or after December 31, |
19 | | 1985, and before
December 31, 1993, taxpayers
that are |
20 | | corporations (other than Subchapter S corporations) having the
|
21 | | same taxable year and that are members of the same unitary |
22 | | business group
may elect to be treated as one taxpayer for |
23 | | purposes of any original return,
amended return which includes |
24 | | the same taxpayers of the unitary group which
joined in the |
25 | | election to file the original return, extension, claim for
|
26 | | refund, assessment, collection and payment and determination |
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1 | | of the
group's tax liability under this Act. This subsection |
2 | | (e) does not permit the
election to be made for some, but not |
3 | | all, of the purposes enumerated above.
For taxable years |
4 | | ending on or after December 31, 1987, corporate members
(other |
5 | | than Subchapter S corporations) of the same unitary business |
6 | | group
making this subsection (e) election are not required to |
7 | | have the same taxable
year.
|
8 | | For taxable years ending on or after December 31, 1993, |
9 | | taxpayers that are
corporations (other than Subchapter S |
10 | | corporations) and that are members of
the same unitary |
11 | | business group shall be treated as one taxpayer for purposes
|
12 | | of any original return, amended return which includes the same |
13 | | taxpayers of the
unitary group which joined in filing the |
14 | | original return, extension, claim for
refund, assessment, |
15 | | collection and payment and determination of the group's tax
|
16 | | liability under this Act.
|
17 | | (f) For taxable years ending prior to December 31, 2014, |
18 | | the Department may promulgate regulations to permit |
19 | | nonresident
individual partners of the same partnership, |
20 | | nonresident Subchapter S
corporation shareholders of the same |
21 | | Subchapter S corporation, and
nonresident individuals |
22 | | transacting an insurance business in Illinois under
a Lloyds |
23 | | plan of operation, and nonresident individual members of the |
24 | | same
limited liability company that is treated as a |
25 | | partnership under Section 1501
(a)(16) of this Act, to file |
26 | | composite individual income tax returns
reflecting the |
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1 | | composite income of such individuals allocable to Illinois
and |
2 | | to make composite individual income tax payments. For taxable |
3 | | years ending prior to December 31, 2014, the Department may
by |
4 | | regulation also permit such composite returns to include the |
5 | | income tax
owed by Illinois residents attributable to their |
6 | | income from partnerships,
Subchapter S corporations, insurance |
7 | | businesses organized under a Lloyds
plan of operation, or |
8 | | limited liability companies that are treated as
partnership |
9 | | under Section 1501(a)(16) of this Act, in which case such
|
10 | | Illinois residents will be permitted to claim credits on their |
11 | | individual
returns for their shares of the composite tax |
12 | | payments. This paragraph of
subsection (f) applies to taxable |
13 | | years ending on or after December 31, 1987 and ending prior to |
14 | | December 31, 2014.
|
15 | | For taxable years ending on or after December 31, 1999, |
16 | | the Department may,
by regulation, permit any persons |
17 | | transacting an insurance business
organized under a Lloyds |
18 | | plan of operation to file composite returns reflecting
the |
19 | | income of such p |