103RD GENERAL ASSEMBLY
State of Illinois
2023 and 2024
SB1832

 

Introduced 2/9/2023, by Sen. Elgie R. Sims, Jr.

 

SYNOPSIS AS INTRODUCED:
 
35 ILCS 5/201
35 ILCS 5/704A

    Amends the Illinois Income Tax Act. Provides that the research and development credit applies for taxable years ending prior to January 1, 2037 (currently, January 1, 2027). Provides that, in the case of qualifying quantum information science expenditures, the research and development credit shall be equal to 13% of the qualifying expenditures for increasing research activities in this State (currently, 6.5%). Provides that certain qualified startup taxpayers may elect to claim the credit against their obligation to pay withholding taxes. Effective immediately.


LRB103 27553 HLH 53928 b

 

 

A BILL FOR

 

SB1832LRB103 27553 HLH 53928 b

1    AN ACT concerning revenue.
 
2    Be it enacted by the People of the State of Illinois,
3represented in the General Assembly:
 
4    Section 5. The Illinois Income Tax Act is amended by
5changing Sections 201 and 704A as follows:
 
6    (35 ILCS 5/201)
7    Sec. 201. Tax imposed.
8    (a) In general. A tax measured by net income is hereby
9imposed on every individual, corporation, trust and estate for
10each taxable year ending after July 31, 1969 on the privilege
11of earning or receiving income in or as a resident of this
12State. Such tax shall be in addition to all other occupation or
13privilege taxes imposed by this State or by any municipal
14corporation or political subdivision thereof.
15    (b) Rates. The tax imposed by subsection (a) of this
16Section shall be determined as follows, except as adjusted by
17subsection (d-1):
18        (1) In the case of an individual, trust or estate, for
19    taxable years ending prior to July 1, 1989, an amount
20    equal to 2 1/2% of the taxpayer's net income for the
21    taxable year.
22        (2) In the case of an individual, trust or estate, for
23    taxable years beginning prior to July 1, 1989 and ending

 

 

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1    after June 30, 1989, an amount equal to the sum of (i) 2
2    1/2% of the taxpayer's net income for the period prior to
3    July 1, 1989, as calculated under Section 202.3, and (ii)
4    3% of the taxpayer's net income for the period after June
5    30, 1989, as calculated under Section 202.3.
6        (3) In the case of an individual, trust or estate, for
7    taxable years beginning after June 30, 1989, and ending
8    prior to January 1, 2011, an amount equal to 3% of the
9    taxpayer's net income for the taxable year.
10        (4) In the case of an individual, trust, or estate,
11    for taxable years beginning prior to January 1, 2011, and
12    ending after December 31, 2010, an amount equal to the sum
13    of (i) 3% of the taxpayer's net income for the period prior
14    to January 1, 2011, as calculated under Section 202.5, and
15    (ii) 5% of the taxpayer's net income for the period after
16    December 31, 2010, as calculated under Section 202.5.
17        (5) In the case of an individual, trust, or estate,
18    for taxable years beginning on or after January 1, 2011,
19    and ending prior to January 1, 2015, an amount equal to 5%
20    of the taxpayer's net income for the taxable year.
21        (5.1) In the case of an individual, trust, or estate,
22    for taxable years beginning prior to January 1, 2015, and
23    ending after December 31, 2014, an amount equal to the sum
24    of (i) 5% of the taxpayer's net income for the period prior
25    to January 1, 2015, as calculated under Section 202.5, and
26    (ii) 3.75% of the taxpayer's net income for the period

 

 

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1    after December 31, 2014, as calculated under Section
2    202.5.
3        (5.2) In the case of an individual, trust, or estate,
4    for taxable years beginning on or after January 1, 2015,
5    and ending prior to July 1, 2017, an amount equal to 3.75%
6    of the taxpayer's net income for the taxable year.
7        (5.3) In the case of an individual, trust, or estate,
8    for taxable years beginning prior to July 1, 2017, and
9    ending after June 30, 2017, an amount equal to the sum of
10    (i) 3.75% of the taxpayer's net income for the period
11    prior to July 1, 2017, as calculated under Section 202.5,
12    and (ii) 4.95% of the taxpayer's net income for the period
13    after June 30, 2017, as calculated under Section 202.5.
14        (5.4) In the case of an individual, trust, or estate,
15    for taxable years beginning on or after July 1, 2017, an
16    amount equal to 4.95% of the taxpayer's net income for the
17    taxable year.
18        (6) In the case of a corporation, for taxable years
19    ending prior to July 1, 1989, an amount equal to 4% of the
20    taxpayer's net income for the taxable year.
21        (7) In the case of a corporation, for taxable years
22    beginning prior to July 1, 1989 and ending after June 30,
23    1989, an amount equal to the sum of (i) 4% of the
24    taxpayer's net income for the period prior to July 1,
25    1989, as calculated under Section 202.3, and (ii) 4.8% of
26    the taxpayer's net income for the period after June 30,

 

 

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1    1989, as calculated under Section 202.3.
2        (8) In the case of a corporation, for taxable years
3    beginning after June 30, 1989, and ending prior to January
4    1, 2011, an amount equal to 4.8% of the taxpayer's net
5    income for the taxable year.
6        (9) In the case of a corporation, for taxable years
7    beginning prior to January 1, 2011, and ending after
8    December 31, 2010, an amount equal to the sum of (i) 4.8%
9    of the taxpayer's net income for the period prior to
10    January 1, 2011, as calculated under Section 202.5, and
11    (ii) 7% of the taxpayer's net income for the period after
12    December 31, 2010, as calculated under Section 202.5.
13        (10) In the case of a corporation, for taxable years
14    beginning on or after January 1, 2011, and ending prior to
15    January 1, 2015, an amount equal to 7% of the taxpayer's
16    net income for the taxable year.
17        (11) In the case of a corporation, for taxable years
18    beginning prior to January 1, 2015, and ending after
19    December 31, 2014, an amount equal to the sum of (i) 7% of
20    the taxpayer's net income for the period prior to January
21    1, 2015, as calculated under Section 202.5, and (ii) 5.25%
22    of the taxpayer's net income for the period after December
23    31, 2014, as calculated under Section 202.5.
24        (12) In the case of a corporation, for taxable years
25    beginning on or after January 1, 2015, and ending prior to
26    July 1, 2017, an amount equal to 5.25% of the taxpayer's

 

 

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1    net income for the taxable year.
2        (13) In the case of a corporation, for taxable years
3    beginning prior to July 1, 2017, and ending after June 30,
4    2017, an amount equal to the sum of (i) 5.25% of the
5    taxpayer's net income for the period prior to July 1,
6    2017, as calculated under Section 202.5, and (ii) 7% of
7    the taxpayer's net income for the period after June 30,
8    2017, as calculated under Section 202.5.
9        (14) In the case of a corporation, for taxable years
10    beginning on or after July 1, 2017, an amount equal to 7%
11    of the taxpayer's net income for the taxable year.
12    The rates under this subsection (b) are subject to the
13provisions of Section 201.5.
14    (b-5) Surcharge; sale or exchange of assets, properties,
15and intangibles of organization gaming licensees. For each of
16taxable years 2019 through 2027, a surcharge is imposed on all
17taxpayers on income arising from the sale or exchange of
18capital assets, depreciable business property, real property
19used in the trade or business, and Section 197 intangibles (i)
20of an organization licensee under the Illinois Horse Racing
21Act of 1975 and (ii) of an organization gaming licensee under
22the Illinois Gambling Act. The amount of the surcharge is
23equal to the amount of federal income tax liability for the
24taxable year attributable to those sales and exchanges. The
25surcharge imposed shall not apply if:
26        (1) the organization gaming license, organization

 

 

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1    license, or racetrack property is transferred as a result
2    of any of the following:
3            (A) bankruptcy, a receivership, or a debt
4        adjustment initiated by or against the initial
5        licensee or the substantial owners of the initial
6        licensee;
7            (B) cancellation, revocation, or termination of
8        any such license by the Illinois Gaming Board or the
9        Illinois Racing Board;
10            (C) a determination by the Illinois Gaming Board
11        that transfer of the license is in the best interests
12        of Illinois gaming;
13            (D) the death of an owner of the equity interest in
14        a licensee;
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 license when the license was issued; or
23        (2) the controlling interest in the organization
24    gaming license, organization license, or racetrack
25    property is transferred in a transaction to lineal
26    descendants in which no gain or loss is recognized or as a

 

 

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1    result of a transaction in accordance with Section 351 of
2    the Internal Revenue Code in which no gain or loss is
3    recognized; or
4        (3) live horse racing was not conducted in 2010 at a
5    racetrack located within 3 miles of the Mississippi River
6    under a license issued pursuant to the Illinois Horse
7    Racing Act of 1975.
8    The transfer of an organization gaming license,
9organization license, or racetrack property by a person other
10than the initial licensee to receive the organization gaming
11license is not subject to a surcharge. The Department shall
12adopt rules necessary to implement and administer this
13subsection.
14    (c) Personal Property Tax Replacement Income Tax.
15Beginning on July 1, 1979 and thereafter, in addition to such
16income tax, there is also hereby imposed the Personal Property
17Tax Replacement Income Tax measured by net income on every
18corporation (including Subchapter S corporations), partnership
19and trust, for each taxable year ending after June 30, 1979.
20Such taxes are imposed on the privilege of earning or
21receiving income in or as a resident of this State. The
22Personal Property Tax Replacement Income Tax shall be in
23addition to the income tax imposed by subsections (a) and (b)
24of this Section and in addition to all other occupation or
25privilege taxes imposed by this State or by any municipal
26corporation or political subdivision thereof.

 

 

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1    (d) Additional Personal Property Tax Replacement Income
2Tax Rates. The personal property tax replacement income tax
3imposed by this subsection and subsection (c) of this Section
4in the case of a corporation, other than a Subchapter S
5corporation and except as adjusted by subsection (d-1), shall
6be an additional amount equal to 2.85% of such taxpayer's net
7income for the taxable year, except that beginning on January
81, 1981, and thereafter, the rate of 2.85% specified in this
9subsection shall be reduced to 2.5%, and in the case of a
10partnership, trust or a Subchapter S corporation shall be an
11additional amount equal to 1.5% of such taxpayer's net income
12for the taxable year.
13    (d-1) Rate reduction for certain foreign insurers. In the
14case of a foreign insurer, as defined by Section 35A-5 of the
15Illinois Insurance Code, whose state or country of domicile
16imposes on insurers domiciled in Illinois a retaliatory tax
17(excluding any insurer whose premiums from reinsurance assumed
18are 50% or more of its total insurance premiums as determined
19under paragraph (2) of subsection (b) of Section 304, except
20that for purposes of this determination premiums from
21reinsurance do not include premiums from inter-affiliate
22reinsurance arrangements), beginning with taxable years ending
23on or after December 31, 1999, the sum of the rates of tax
24imposed by subsections (b) and (d) shall be reduced (but not
25increased) to the rate at which the total amount of tax imposed
26under this Act, net of all credits allowed under this Act,

 

 

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1shall equal (i) the total amount of tax that would be imposed
2on the foreign insurer's net income allocable to Illinois for
3the taxable year by such foreign insurer's state or country of
4domicile if that net income were subject to all income taxes
5and taxes measured by net income imposed by such foreign
6insurer's state or country of domicile, net of all credits
7allowed or (ii) a rate of zero if no such tax is imposed on
8such income by the foreign insurer's state of domicile. For
9the purposes of this subsection (d-1), an inter-affiliate
10includes a mutual insurer under common management.
11        (1) For the purposes of subsection (d-1), in no event
12    shall the sum of the rates of tax imposed by subsections
13    (b) and (d) be reduced below the rate at which the sum of:
14            (A) the total amount of tax imposed on such
15        foreign insurer under this Act for a taxable year, net
16        of all credits allowed under this Act, plus
17            (B) the privilege tax imposed by Section 409 of
18        the Illinois Insurance Code, the fire insurance
19        company tax imposed by Section 12 of the Fire
20        Investigation Act, and the fire department taxes
21        imposed under Section 11-10-1 of the Illinois
22        Municipal Code,
23    equals 1.25% for taxable years ending prior to December
24    31, 2003, or 1.75% for taxable years ending on or after
25    December 31, 2003, of the net taxable premiums written for
26    the taxable year, as described by subsection (1) of

 

 

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1    Section 409 of the Illinois Insurance Code. This paragraph
2    will in no event increase the rates imposed under
3    subsections (b) and (d).
4        (2) Any reduction in the rates of tax imposed by this
5    subsection shall be applied first against the rates
6    imposed by subsection (b) and only after the tax imposed
7    by subsection (a) net of all credits allowed under this
8    Section other than the credit allowed under subsection (i)
9    has been reduced to zero, against the rates imposed by
10    subsection (d).
11    This subsection (d-1) is exempt from the provisions of
12Section 250.
13    (e) Investment credit. A taxpayer shall be allowed a
14credit against the Personal Property Tax Replacement Income
15Tax for investment in qualified property.
16        (1) A taxpayer shall be allowed a credit equal to .5%
17    of the basis of qualified property placed in service
18    during the taxable year, provided such property is placed
19    in service on or after July 1, 1984. There shall be allowed
20    an additional credit equal to .5% of the basis of
21    qualified property placed in service during the taxable
22    year, provided such property is placed in service on or
23    after July 1, 1986, and the taxpayer's base employment
24    within Illinois has increased by 1% or more over the
25    preceding year as determined by the taxpayer's employment
26    records filed with the Illinois Department of Employment

 

 

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1    Security. Taxpayers who are new to Illinois shall be
2    deemed to have met the 1% growth in base employment for the
3    first year in which they file employment records with the
4    Illinois Department of Employment Security. The provisions
5    added to this Section by Public Act 85-1200 (and restored
6    by Public Act 87-895) shall be construed as declaratory of
7    existing law and not as a new enactment. If, in any year,
8    the increase in base employment within Illinois over the
9    preceding year is less than 1%, the additional credit
10    shall be limited to that percentage times a fraction, the
11    numerator of which is .5% and the denominator of which is
12    1%, but shall not exceed .5%. The investment credit shall
13    not be allowed to the extent that it would reduce a
14    taxpayer's liability in any tax year below zero, nor may
15    any credit for qualified property be allowed for any year
16    other than the year in which the property was placed in
17    service in Illinois. For tax years ending on or after
18    December 31, 1987, and on or before December 31, 1988, the
19    credit shall be allowed for the tax year in which the
20    property is placed in service, or, if the amount of the
21    credit exceeds the tax liability for that year, whether it
22    exceeds the original liability or the liability as later
23    amended, such excess may be carried forward and applied to
24    the tax liability of the 5 taxable years following the
25    excess credit years if the taxpayer (i) makes investments
26    which cause the creation of a minimum of 2,000 full-time

 

 

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1    equivalent jobs in Illinois, (ii) is located in an
2    enterprise zone established pursuant to the Illinois
3    Enterprise Zone Act and (iii) is certified by the
4    Department of Commerce and Community Affairs (now
5    Department of Commerce and Economic Opportunity) as
6    complying with the requirements specified in clause (i)
7    and (ii) by July 1, 1986. The Department of Commerce and
8    Community Affairs (now Department of Commerce and Economic
9    Opportunity) shall notify the Department of Revenue of all
10    such certifications immediately. For tax years ending
11    after December 31, 1988, the credit shall be allowed for
12    the tax year in which the property is placed in service,
13    or, if the amount of the credit exceeds the tax liability
14    for that year, whether it exceeds the original liability
15    or the liability as later amended, such excess may be
16    carried forward and applied to the tax liability of the 5
17    taxable years following the excess credit years. The
18    credit shall be applied to the earliest year for which
19    there is a liability. If there is credit from more than one
20    tax year that is available to offset a liability, earlier
21    credit shall be applied first.
22        (2) The term "qualified property" means property
23    which:
24            (A) is tangible, whether new or used, including
25        buildings and structural components of buildings and
26        signs that are real property, but not including land

 

 

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1        or improvements to real property that are not a
2        structural component of a building such as
3        landscaping, sewer lines, local access roads, fencing,
4        parking lots, and other appurtenances;
5            (B) is depreciable pursuant to Section 167 of the
6        Internal Revenue Code, except that "3-year property"
7        as defined in Section 168(c)(2)(A) of that Code is not
8        eligible for the credit provided by this subsection
9        (e);
10            (C) is acquired by purchase as defined in Section
11        179(d) of the Internal Revenue Code;
12            (D) is used in Illinois by a taxpayer who is
13        primarily engaged in manufacturing, or in mining coal
14        or fluorite, or in retailing, or was placed in service
15        on or after July 1, 2006 in a River Edge Redevelopment
16        Zone established pursuant to the River Edge
17        Redevelopment Zone Act; and
18            (E) has not previously been used in Illinois in
19        such a manner and by such a person as would qualify for
20        the credit provided by this subsection (e) or
21        subsection (f).
22        (3) For purposes of this subsection (e),
23    "manufacturing" means the material staging and production
24    of tangible personal property by procedures commonly
25    regarded as manufacturing, processing, fabrication, or
26    assembling which changes some existing material into new

 

 

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1    shapes, new qualities, or new combinations. For purposes
2    of this subsection (e) the term "mining" shall have the
3    same meaning as the term "mining" in Section 613(c) of the
4    Internal Revenue Code. For purposes of this subsection
5    (e), the term "retailing" means the sale of tangible
6    personal property for use or consumption and not for
7    resale, or services rendered in conjunction with the sale
8    of tangible personal property for use or consumption and
9    not for resale. For purposes of this subsection (e),
10    "tangible personal property" has the same meaning as when
11    that term is used in the Retailers' Occupation Tax Act,
12    and, for taxable years ending after December 31, 2008,
13    does not include the generation, transmission, or
14    distribution of electricity.
15        (4) The basis of qualified property shall be the basis
16    used to compute the depreciation deduction for federal
17    income tax purposes.
18        (5) If the basis of the property for federal income
19    tax depreciation purposes is increased after it has been
20    placed in service in Illinois by the taxpayer, the amount
21    of such increase shall be deemed property placed in
22    service on the date of such increase in basis.
23        (6) The term "placed in service" shall have the same
24    meaning as under Section 46 of the Internal Revenue Code.
25        (7) If during any taxable year, any property ceases to
26    be qualified property in the hands of the taxpayer within

 

 

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1    48 months after being placed in service, or the situs of
2    any qualified property is moved outside Illinois within 48
3    months after being placed in service, the Personal
4    Property Tax Replacement Income Tax for such taxable year
5    shall be increased. Such increase shall be determined by
6    (i) recomputing the investment credit which would have
7    been allowed for the year in which credit for such
8    property was originally allowed by eliminating such
9    property from such computation and, (ii) subtracting such
10    recomputed credit from the amount of credit previously
11    allowed. For the purposes of this paragraph (7), a
12    reduction of the basis of qualified property resulting
13    from a redetermination of the purchase price shall be
14    deemed a disposition of qualified property to the extent
15    of such reduction.
16        (8) Unless the investment credit is extended by law,
17    the basis of qualified property shall not include costs
18    incurred after December 31, 2018, except for costs
19    incurred pursuant to a binding contract entered into on or
20    before December 31, 2018.
21        (9) Each taxable year ending before December 31, 2000,
22    a partnership may elect to pass through to its partners
23    the credits to which the partnership is entitled under
24    this subsection (e) for the taxable year. A partner may
25    use the credit allocated to him or her under this
26    paragraph only against the tax imposed in subsections (c)

 

 

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1    and (d) of this Section. If the partnership makes that
2    election, those credits shall be allocated among the
3    partners in the partnership in accordance with the rules
4    set forth in Section 704(b) of the Internal Revenue Code,
5    and the rules promulgated under that Section, and the
6    allocated amount of the credits shall be allowed to the
7    partners for that taxable year. The partnership shall make
8    this election on its Personal Property Tax Replacement
9    Income Tax return for that taxable year. The election to
10    pass through the credits shall be irrevocable.
11        For taxable years ending on or after December 31,
12    2000, a partner that qualifies its partnership for a
13    subtraction under subparagraph (I) of paragraph (2) of
14    subsection (d) of Section 203 or a shareholder that
15    qualifies a Subchapter S corporation for a subtraction
16    under subparagraph (S) of paragraph (2) of subsection (b)
17    of Section 203 shall be allowed a credit under this
18    subsection (e) equal to its share of the credit earned
19    under this subsection (e) during the taxable year by the
20    partnership or Subchapter S corporation, determined in
21    accordance with the determination of income and
22    distributive share of income under Sections 702 and 704
23    and Subchapter S of the Internal Revenue Code. This
24    paragraph is exempt from the provisions of Section 250.
25    (f) Investment credit; Enterprise Zone; River Edge
26Redevelopment Zone.

 

 

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1        (1) A taxpayer shall be allowed a credit against the
2    tax imposed by subsections (a) and (b) of this Section for
3    investment in qualified property which is placed in
4    service in an Enterprise Zone created pursuant to the
5    Illinois Enterprise Zone Act or, for property placed in
6    service on or after July 1, 2006, a River Edge
7    Redevelopment Zone established pursuant to the River Edge
8    Redevelopment Zone Act. For partners, shareholders of
9    Subchapter S corporations, and owners of limited liability
10    companies, if the liability company is treated as a
11    partnership for purposes of federal and State income
12    taxation, there shall be allowed a credit under this
13    subsection (f) to be determined in accordance with the
14    determination of income and distributive share of income
15    under Sections 702 and 704 and Subchapter S of the
16    Internal Revenue Code. The credit shall be .5% of the
17    basis for such property. The credit shall be available
18    only in the taxable year in which the property is placed in
19    service in the Enterprise Zone or River Edge Redevelopment
20    Zone and shall not be allowed to the extent that it would
21    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, 1985, 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        (2) The term qualified property means property which:
10            (A) is tangible, whether new or used, including
11        buildings and structural components of buildings;
12            (B) is depreciable pursuant to Section 167 of the
13        Internal Revenue Code, except that "3-year property"
14        as defined in Section 168(c)(2)(A) of that Code is not
15        eligible for the credit provided by this subsection
16        (f);
17            (C) is acquired by purchase as defined in Section
18        179(d) of the Internal Revenue Code;
19            (D) is used in the Enterprise Zone or River Edge
20        Redevelopment Zone by the taxpayer; and
21            (E) has not been previously used in Illinois in
22        such a manner and by such a person as would qualify for
23        the credit provided by this subsection (f) or
24        subsection (e).
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 the Enterprise Zone or River Edge
5    Redevelopment Zone by the taxpayer, the amount of such
6    increase shall be deemed property placed in service on the
7    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, any property ceases to
11    be qualified property in the hands of the taxpayer within
12    48 months after being placed in service, or the situs of
13    any qualified property is moved outside the Enterprise
14    Zone or River Edge Redevelopment Zone within 48 months
15    after being placed in service, the tax imposed under
16    subsections (a) and (b) of this Section for such taxable
17    year shall be increased. Such increase shall be determined
18    by (i) recomputing the investment credit which would have
19    been allowed for the year in which credit for such
20    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) There shall be allowed an additional credit equal
3    to 0.5% of the basis of qualified property placed in
4    service during the taxable year in a River Edge
5    Redevelopment Zone, provided such property is placed in
6    service on or after July 1, 2006, and the taxpayer's base
7    employment within Illinois has increased by 1% or more
8    over the preceding year as determined by the taxpayer's
9    employment records filed with the Illinois Department of
10    Employment Security. Taxpayers who are new to Illinois
11    shall be deemed to have met the 1% growth in base
12    employment for the first year in which they file
13    employment records with the Illinois Department of
14    Employment Security. If, in any year, the increase in base
15    employment within Illinois over the preceding year is less
16    than 1%, the additional credit shall be limited to that
17    percentage times a fraction, the numerator of which is
18    0.5% and the denominator of which is 1%, but shall not
19    exceed 0.5%.
20        (8) For taxable years beginning on or after January 1,
21    2021, there shall be allowed an Enterprise Zone
22    construction jobs credit against the taxes imposed under
23    subsections (a) and (b) of this Section as provided in
24    Section 13 of the Illinois Enterprise Zone Act.
25        The credit or credits may not reduce the taxpayer's
26    liability to less than zero. If the amount of the credit or

 

 

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1    credits exceeds the taxpayer's liability, the excess may
2    be carried forward and applied against the taxpayer's
3    liability in succeeding calendar years in the same manner
4    provided under paragraph (4) of Section 211 of this Act.
5    The credit or credits shall be applied to the earliest
6    year for which there is a tax liability. If there are
7    credits from more than one taxable year that are available
8    to offset a liability, the earlier credit shall be applied
9    first.
10        For partners, shareholders of Subchapter S
11    corporations, and owners of limited liability companies,
12    if the liability company is treated as a partnership for
13    the purposes of federal and State income taxation, there
14    shall be allowed a credit under this Section to be
15    determined in accordance with the determination of income
16    and distributive share of income under Sections 702 and
17    704 and Subchapter S of the Internal Revenue Code.
18        The total aggregate amount of credits awarded under
19    the Blue Collar Jobs Act (Article 20 of Public Act 101-9)
20    shall not exceed $20,000,000 in any State fiscal year.
21        This paragraph (8) is exempt from the provisions of
22    Section 250.
23    (g) (Blank).
24    (h) Investment credit; High Impact Business.
25        (1) Subject to subsections (b) and (b-5) of Section
26    5.5 of the Illinois Enterprise Zone Act, a taxpayer shall

 

 

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1    be allowed a credit against the tax imposed by subsections
2    (a) and (b) of this Section for investment in qualified
3    property which is placed in service by a Department of
4    Commerce and Economic Opportunity designated High Impact
5    Business. The credit shall be .5% of the basis for such
6    property. The credit shall not be available (i) until the
7    minimum investments in qualified property set forth in
8    subdivision (a)(3)(A) of Section 5.5 of the Illinois
9    Enterprise Zone Act have been satisfied or (ii) until the
10    time authorized in subsection (b-5) of the Illinois
11    Enterprise Zone Act for entities designated as High Impact
12    Businesses under subdivisions (a)(3)(B), (a)(3)(C), and
13    (a)(3)(D) of Section 5.5 of the Illinois Enterprise Zone
14    Act, and shall not be allowed to the extent that it would
15    reduce a taxpayer's liability for the tax imposed by
16    subsections (a) and (b) of this Section to below zero. The
17    credit applicable to such investments shall be taken in
18    the taxable year in which such investments have been
19    completed. The credit for additional investments beyond
20    the minimum investment by a designated high impact
21    business authorized under subdivision (a)(3)(A) of Section
22    5.5 of the Illinois Enterprise Zone Act shall be available
23    only in the taxable year in which the property is placed in
24    service and shall not be allowed to the extent that it
25    would reduce a taxpayer's liability for the tax imposed by
26    subsections (a) and (b) of this Section to below zero. For

 

 

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1    tax years ending on or after December 31, 1987, the credit
2    shall be allowed for the tax year in which the property is
3    placed in service, or, if the amount of the credit exceeds
4    the tax liability for that year, whether it exceeds the
5    original liability or the liability as later amended, such
6    excess may be carried forward and applied to the tax
7    liability of the 5 taxable years following the excess
8    credit year. The credit shall be applied to the earliest
9    year for which there is a liability. If there is credit
10    from more than one tax year that is available to offset a
11    liability, the credit accruing first in time shall be
12    applied first.
13        Changes made in this subdivision (h)(1) by Public Act
14    88-670 restore changes made by Public Act 85-1182 and
15    reflect existing law.
16        (2) The term qualified property means property which:
17            (A) is tangible, whether new or used, including
18        buildings and structural components of buildings;
19            (B) is depreciable pursuant to Section 167 of the
20        Internal Revenue Code, except that "3-year property"
21        as defined in Section 168(c)(2)(A) of that Code is not
22        eligible for the credit provided by this subsection
23        (h);
24            (C) is acquired by purchase as defined in Section
25        179(d) of the Internal Revenue Code; and
26            (D) is not eligible for the Enterprise Zone

 

 

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1        Investment Credit provided by subsection (f) of this
2        Section.
3        (3) The basis of qualified property shall be the basis
4    used to compute the depreciation deduction for federal
5    income tax purposes.
6        (4) If the basis of the property for federal income
7    tax depreciation purposes is increased after it has been
8    placed in service in a federally designated Foreign Trade
9    Zone or Sub-Zone located in Illinois by the taxpayer, the
10    amount of such increase shall be deemed property placed in
11    service on the date of such increase in basis.
12        (5) The term "placed in service" shall have the same
13    meaning as under Section 46 of the Internal Revenue Code.
14        (6) If during any taxable year ending on or before
15    December 31, 1996, any property ceases to be qualified
16    property in the hands of the taxpayer within 48 months
17    after being placed in service, or the situs of any
18    qualified property is moved outside Illinois within 48
19    months after being placed in service, the tax imposed
20    under subsections (a) and (b) of this Section for such
21    taxable year shall be increased. Such increase shall be
22    determined by (i) recomputing the investment credit which
23    would have been allowed for the year in which credit for
24    such property was originally allowed by eliminating such
25    property from such computation, and (ii) subtracting such
26    recomputed credit from the amount of credit previously

 

 

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1    allowed. For the purposes of this paragraph (6), a
2    reduction of the basis of qualified property resulting
3    from a redetermination of the purchase price shall be
4    deemed a disposition of qualified property to the extent
5    of such reduction.
6        (7) Beginning with tax years ending after December 31,
7    1996, if a taxpayer qualifies for the credit under this
8    subsection (h) and thereby is granted a tax abatement and
9    the taxpayer relocates its entire facility in violation of
10    the explicit terms and length of the contract under
11    Section 18-183 of the Property Tax Code, the tax imposed
12    under subsections (a) and (b) of this Section shall be
13    increased for the taxable year in which the taxpayer
14    relocated its facility by an amount equal to the amount of
15    credit received by the taxpayer under this subsection (h).
16    (h-5) High Impact Business construction jobs credit. For
17taxable years beginning on or after January 1, 2021, there
18shall also be allowed a High Impact Business construction jobs
19credit against the tax imposed under subsections (a) and (b)
20of this Section as provided in subsections (i) and (j) of
21Section 5.5 of the Illinois Enterprise Zone Act.
22    The credit or credits may not reduce the taxpayer's
23liability to less than zero. If the amount of the credit or
24credits exceeds the taxpayer's liability, the excess may be
25carried forward and applied against the taxpayer's liability
26in succeeding calendar years in the manner provided under

 

 

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1paragraph (4) of Section 211 of this Act. The credit or credits
2shall be applied to the earliest year for which there is a tax
3liability. If there are credits from more than one taxable
4year that are available to offset a liability, the earlier
5credit shall be applied first.
6    For partners, shareholders of Subchapter S corporations,
7and owners of limited liability companies, if the liability
8company is treated as a partnership for the purposes of
9federal and State income taxation, there shall be allowed a
10credit under this Section to be determined in accordance with
11the determination of income and distributive share of income
12under Sections 702 and 704 and Subchapter S of the Internal
13Revenue Code.
14    The total aggregate amount of credits awarded under the
15Blue Collar Jobs Act (Article 20 of Public Act 101-9) shall not
16exceed $20,000,000 in any State fiscal year.
17    This subsection (h-5) is exempt from the provisions of
18Section 250.
19    (i) Credit for Personal Property Tax Replacement Income
20Tax. For tax years ending prior to December 31, 2003, a credit
21shall be allowed against the tax imposed by subsections (a)
22and (b) of this Section for the tax imposed by subsections (c)
23and (d) of this Section. This credit shall be computed by
24multiplying the tax imposed by subsections (c) and (d) of this
25Section by a fraction, the numerator of which is base income
26allocable to Illinois and the denominator of which is Illinois

 

 

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1base income, and further multiplying the product by the tax
2rate imposed by subsections (a) and (b) of this Section.
3    Any credit earned on or after December 31, 1986 under this
4subsection which is unused in the year the credit is computed
5because it exceeds the tax liability imposed by subsections
6(a) and (b) for that year (whether it exceeds the original
7liability or the liability as later amended) may be carried
8forward and applied to the tax liability imposed by
9subsections (a) and (b) of the 5 taxable years following the
10excess credit year, provided that no credit may be carried
11forward to any year ending on or after December 31, 2003. This
12credit shall be applied first to the earliest year for which
13there is a liability. If there is a credit under this
14subsection from more than one tax year that is available to
15offset a liability the earliest credit arising under this
16subsection shall be applied first.
17    If, during any taxable year ending on or after December
1831, 1986, the tax imposed by subsections (c) and (d) of this
19Section for which a taxpayer has claimed a credit under this
20subsection (i) is reduced, the amount of credit for such tax
21shall also be reduced. Such reduction shall be determined by
22recomputing the credit to take into account the reduced tax
23imposed by subsections (c) and (d). If any portion of the
24reduced amount of credit has been carried to a different
25taxable year, an amended return shall be filed for such
26taxable year to reduce the amount of credit claimed.

 

 

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1    (j) Training expense credit. Beginning with tax years
2ending on or after December 31, 1986 and prior to December 31,
32003, a taxpayer shall be allowed a credit against the tax
4imposed by subsections (a) and (b) under this Section for all
5amounts paid or accrued, on behalf of all persons employed by
6the taxpayer in Illinois or Illinois residents employed
7outside of Illinois by a taxpayer, for educational or
8vocational training in semi-technical or technical fields or
9semi-skilled or skilled fields, which were deducted from gross
10income in the computation of taxable income. The credit
11against the tax imposed by subsections (a) and (b) shall be
121.6% of such training expenses. For partners, shareholders of
13subchapter S corporations, and owners of limited liability
14companies, if the liability company is treated as a
15partnership for purposes of federal and State income taxation,
16there shall be allowed a credit under this subsection (j) to be
17determined in accordance with the determination of income and
18distributive share of income under Sections 702 and 704 and
19subchapter S of the Internal Revenue Code.
20    Any credit allowed under this subsection which is unused
21in the year the credit is earned may be carried forward to each
22of the 5 taxable years following the year for which the credit
23is first computed until it is used. This credit shall be
24applied first to the earliest year for which there is a
25liability. If there is a credit under this subsection from
26more than one tax year that is available to offset a liability,

 

 

SB1832- 29 -LRB103 27553 HLH 53928 b

1the earliest credit arising under this subsection shall be
2applied first. No carryforward credit may be claimed in any
3tax year ending on or after December 31, 2003.
4    (k) Research and development credit. For tax years ending
5after July 1, 1990 and prior to December 31, 2003, and
6beginning again for tax years ending on or after December 31,
72004, and ending prior to January 1, 2037 January 1, 2027, a
8taxpayer shall be allowed a credit against the tax imposed by
9subsections (a) and (b) of this Section for increasing
10research activities in this State. The credit allowed against
11the tax imposed by subsections (a) and (b) shall be equal to 6
121/2% of the qualifying expenditures for increasing research
13activities in this State, except that, in the case of
14qualifying quantum information science expenditures, the
15credit allowed against the tax imposed by subsections (a) and
16(b) of this Section shall be equal to 13% of the qualifying
17expenditures for increasing research activities in this State.
18For partners, shareholders of subchapter S corporations, and
19owners of limited liability companies, if the liability
20company is treated as a partnership for purposes of federal
21and State income taxation, there shall be allowed a credit
22under this subsection to be determined in accordance with the
23determination of income and distributive share of income under
24Sections 702 and 704 and subchapter S of the Internal Revenue
25Code.
26    In lieu of the credit allowed under this subsection (k)

 

 

SB1832- 30 -LRB103 27553 HLH 53928 b

1against taxes imposed pursuant to subsections (a) and (b) of
2this Section, for any taxable year ending after December 31,
32023, a qualified startup taxpayer may elect to claim the
4credit against its obligation to pay over withholding taxes
5under Section 704A. However, the taxpayer may not make such an
6election for a taxable year if the taxpayer has an Illinois
7income tax liability for that taxable year with respect to the
8taxes imposed pursuant to subsections (a) and (b) of Section
9201 of this Act against which the taxpayer may claim the credit
10under this subsection (k).
11    As used in For purposes of this subsection: ,
12        "Business entity" means a corporation, association,
13    partnership, limited liability company, or other legal
14    entity.
15        "Qualified startup taxpayer" means a business entity
16    that (i) was incorporated or organized no more than 5
17    years before the first day of the taxable year for which
18    the credit is sought, (ii) has never had any Illinois
19    income tax liability, excluding any Illinois income tax
20    liability of a related member, which shall not be
21    attributed to the startup taxpayer, and (iii) otherwise
22    meets the requirements of this subsection (k).
23        "Qualifying "qualifying expenditures" means the
24    qualifying expenditures as defined for the federal credit
25    for increasing research activities which would be
26    allowable under Section 41 of the Internal Revenue Code

 

 

SB1832- 31 -LRB103 27553 HLH 53928 b

1    and which are conducted in this State. ,
2        "Qualifying "qualifying expenditures for increasing
3    research activities in this State" means the excess of
4    qualifying expenditures for the taxable year in which
5    incurred over qualifying expenditures for the base period.
6    ,
7        "Qualifying "qualifying expenditures for the base
8    period" means the average of the qualifying expenditures
9    for each year in the base period, and "base period" means
10    the 3 taxable years immediately preceding the taxable year
11    for which the determination is being made.
12        "Qualifying quantum information science expenditures"
13    means qualifying expenditures in quantum information
14    science, as that term is defined in Section 2 of the
15    federal National Quantum Initiative Act.
16        "Related member" has the meaning given to the term in
17    Section 5-5 of the Economic Development for a Growing
18    Economy Tax Credit Act.
19    Any credit in excess of the tax liability for the taxable
20year may be carried forward. A taxpayer may elect to have the
21unused credit shown on its final completed return carried over
22as a credit against the tax liability for the following 5
23taxable years or until it has been fully used, whichever
24occurs first; provided that no credit earned in a tax year
25ending prior to December 31, 2003 may be carried forward to any
26year ending on or after December 31, 2003.

 

 

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1    If an unused credit is carried forward to a given year from
22 or more earlier years, that credit arising in the earliest
3year will be applied first against the tax liability for the
4given year. If a tax liability for the given year still
5remains, the credit from the next earliest year will then be
6applied, and so on, until all credits have been used or no tax
7liability for the given year remains. Any remaining unused
8credit or credits then will be carried forward to the next
9following year in which a tax liability is incurred, except
10that no credit can be carried forward to a year which is more
11than 5 years after the year in which the expense for which the
12credit is given was incurred.
13    If the taxpayer makes qualifying quantum information
14science expenditures, and the credit claimed under this
15subsection exceeds the taxpayer's Illinois income tax
16liability, then 90% of the excess credit amount may be
17refunded to the taxpayer in accordance with rules adopted by
18the Department. If the excess credit amount is refunded to the
19taxpayer, then the portion of the excess credit amount that is
20refunded to the taxpayer may not be carried forward and may not
21be taken against the taxpayer's obligations to pay withholding
22taxes under Section 704A.
23    No inference shall be drawn from Public Act 91-644 in
24construing this Section for taxable years beginning before
25January 1, 1999.
26    It is the intent of the General Assembly that the research

 

 

SB1832- 33 -LRB103 27553 HLH 53928 b

1and development credit under this subsection (k) shall apply
2continuously for all tax years ending on or after December 31,
32004 and ending prior to January 1, 2027, including, but not
4limited to, the period beginning on January 1, 2016 and ending
5on July 6, 2017 (the effective date of Public Act 100-22). All
6actions taken in reliance on the continuation of the credit
7under this subsection (k) by any taxpayer are hereby
8validated.
9    (l) Environmental Remediation Tax Credit.
10        (i) For tax years ending after December 31, 1997 and
11    on or before December 31, 2001, a taxpayer shall be
12    allowed a credit against the tax imposed by subsections
13    (a) and (b) of this Section for certain amounts paid for
14    unreimbursed eligible remediation costs, as specified in
15    this subsection. For purposes of this Section,
16    "unreimbursed eligible remediation costs" means costs
17    approved by the Illinois Environmental Protection Agency
18    ("Agency") under Section 58.14 of the Environmental
19    Protection Act that were paid in performing environmental
20    remediation at a site for which a No Further Remediation
21    Letter was issued by the Agency and recorded under Section
22    58.10 of the Environmental Protection Act. The credit must
23    be claimed for the taxable year in which Agency approval
24    of the eligible remediation costs is granted. The credit
25    is not available to any taxpayer if the taxpayer or any
26    related party caused or contributed to, in any material

 

 

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1    respect, a release of regulated substances on, in, or
2    under the site that was identified and addressed by the
3    remedial action pursuant to the Site Remediation Program
4    of the Environmental Protection Act. After the Pollution
5    Control Board rules are adopted pursuant to the Illinois
6    Administrative Procedure Act for the administration and
7    enforcement of Section 58.9 of the Environmental
8    Protection Act, determinations as to credit availability
9    for purposes of this Section shall be made consistent with
10    those rules. For purposes of this Section, "taxpayer"
11    includes a person whose tax attributes the taxpayer has
12    succeeded to under Section 381 of the Internal Revenue
13    Code and "related party" includes the persons disallowed a
14    deduction for losses by paragraphs (b), (c), and (f)(1) of
15    Section 267 of the Internal Revenue Code by virtue of
16    being a related taxpayer, as well as any of its partners.
17    The credit allowed against the tax imposed by subsections
18    (a) and (b) shall be equal to 25% of the unreimbursed
19    eligible remediation costs in excess of $100,000 per site,
20    except that the $100,000 threshold shall not apply to any
21    site contained in an enterprise zone as determined by the
22    Department of Commerce and Community Affairs (now
23    Department of Commerce and Economic Opportunity). The
24    total credit allowed shall not exceed $40,000 per year
25    with a maximum total of $150,000 per site. For partners
26    and shareholders of subchapter S corporations, there shall

 

 

SB1832- 35 -LRB103 27553 HLH 53928 b

1    be allowed a credit under this subsection to be determined
2    in accordance with the determination of income and
3    distributive share of income under Sections 702 and 704
4    and subchapter S of the Internal Revenue Code.
5        (ii) A credit allowed under this subsection that is
6    unused in the year the credit is earned may be carried
7    forward to each of the 5 taxable years following the year
8    for which the credit is first earned until it is used. The
9    term "unused credit" does not include any amounts of
10    unreimbursed eligible remediation costs in excess of the
11    maximum credit per site authorized under paragraph (i).
12    This credit shall be applied first to the earliest year
13    for which there is a liability. If there is a credit under
14    this subsection from more than one tax year that is
15    available to offset a liability, the earliest credit
16    arising under this subsection shall be applied first. A
17    credit allowed under this subsection may be sold to a
18    buyer as part of a sale of all or part of the remediation
19    site for which the credit was granted. The purchaser of a
20    remediation site and the tax credit shall succeed to the
21    unused credit and remaining carry-forward period of the
22    seller. To perfect the transfer, the assignor shall record
23    the transfer in the chain of title for the site and provide
24    written notice to the Director of the Illinois Department
25    of Revenue of the assignor's intent to sell the
26    remediation site and the amount of the tax credit to be

 

 

SB1832- 36 -LRB103 27553 HLH 53928 b

1    transferred as a portion of the sale. In no event may a
2    credit be transferred to any taxpayer if the taxpayer or a
3    related party would not be eligible under the provisions
4    of subsection (i).
5        (iii) For purposes of this Section, the term "site"
6    shall have the same meaning as under Section 58.2 of the
7    Environmental Protection Act.
8    (m) Education expense credit. Beginning with tax years
9ending after December 31, 1999, a taxpayer who is the
10custodian of one or more qualifying pupils shall be allowed a
11credit against the tax imposed by subsections (a) and (b) of
12this Section for qualified education expenses incurred on
13behalf of the qualifying pupils. The credit shall be equal to
1425% of qualified education expenses, but in no event may the
15total credit under this subsection claimed by a family that is
16the custodian of qualifying pupils exceed (i) $500 for tax
17years ending prior to December 31, 2017, and (ii) $750 for tax
18years ending on or after December 31, 2017. In no event shall a
19credit under this subsection reduce the taxpayer's liability
20under this Act to less than zero. Notwithstanding any other
21provision of law, for taxable years beginning on or after
22January 1, 2017, no taxpayer may claim a credit under this
23subsection (m) if the taxpayer's adjusted gross income for the
24taxable year exceeds (i) $500,000, in the case of spouses
25filing a joint federal tax return or (ii) $250,000, in the case
26of all other taxpayers. This subsection is exempt from the

 

 

SB1832- 37 -LRB103 27553 HLH 53928 b

1provisions of Section 250 of this Act.
2    For purposes of this subsection:
3    "Qualifying pupils" means individuals who (i) are
4residents of the State of Illinois, (ii) are under the age of
521 at the close of the school year for which a credit is
6sought, and (iii) during the school year for which a credit is
7sought were full-time pupils enrolled in a kindergarten
8through twelfth grade education program at any school, as
9defined in this subsection.
10    "Qualified education expense" means the amount incurred on
11behalf of a qualifying pupil in excess of $250 for tuition,
12book fees, and lab fees at the school in which the pupil is
13enrolled during the regular school year.
14    "School" means any public or nonpublic elementary or
15secondary school in Illinois that is in compliance with Title
16VI of the Civil Rights Act of 1964 and attendance at which
17satisfies the requirements of Section 26-1 of the School Code,
18except that nothing shall be construed to require a child to
19attend any particular public or nonpublic school to qualify
20for the credit under this Section.
21    "Custodian" means, with respect to qualifying pupils, an
22Illinois resident who is a parent, the parents, a legal
23guardian, or the legal guardians of the qualifying pupils.
24    (n) River Edge Redevelopment Zone site remediation tax
25credit.
26        (i) For tax years ending on or after December 31,

 

 

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1    2006, a taxpayer shall be allowed a credit against the tax
2    imposed by subsections (a) and (b) of this Section for
3    certain amounts paid for unreimbursed eligible remediation
4    costs, as specified in this subsection. For purposes of
5    this Section, "unreimbursed eligible remediation costs"
6    means costs approved by the Illinois Environmental
7    Protection Agency ("Agency") under Section 58.14a of the
8    Environmental Protection Act that were paid in performing
9    environmental remediation at a site within a River Edge
10    Redevelopment Zone for which a No Further Remediation
11    Letter was issued by the Agency and recorded under Section
12    58.10 of the Environmental Protection Act. The credit must
13    be claimed for the taxable year in which Agency approval
14    of the eligible remediation costs is granted. The credit
15    is not available to any taxpayer if the taxpayer or any
16    related party caused or contributed to, in any material
17    respect, a release of regulated substances on, in, or
18    under the site that was identified and addressed by the
19    remedial action pursuant to the Site Remediation Program
20    of the Environmental Protection Act. Determinations as to
21    credit availability for purposes of this Section shall be
22    made consistent with rules adopted by the Pollution
23    Control Board pursuant to the Illinois Administrative
24    Procedure Act for the administration and enforcement of
25    Section 58.9 of the Environmental Protection Act. For
26    purposes of this Section, "taxpayer" includes a person

 

 

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1    whose tax attributes the taxpayer has succeeded to under
2    Section 381 of the Internal Revenue Code and "related
3    party" includes the persons disallowed a deduction for
4    losses by paragraphs (b), (c), and (f)(1) of Section 267
5    of the Internal Revenue Code by virtue of being a related
6    taxpayer, as well as any of its partners. The credit
7    allowed against the tax imposed by subsections (a) and (b)
8    shall be equal to 25% of the unreimbursed eligible
9    remediation costs in excess of $100,000 per site.
10        (ii) A credit allowed under this subsection that is
11    unused in the year the credit is earned may be carried
12    forward to each of the 5 taxable years following the year
13    for which the credit is first earned until it is used. This
14    credit shall be applied first to the earliest year for
15    which there is a liability. If there is a credit under this
16    subsection from more than one tax year that is available
17    to offset a liability, the earliest credit arising under
18    this subsection shall be applied first. A credit allowed
19    under this subsection may be sold to a buyer as part of a
20    sale of all or part of the remediation site for which the
21    credit was granted. The purchaser of a remediation site
22    and the tax credit shall succeed to the unused credit and
23    remaining carry-forward period of the seller. To perfect
24    the transfer, the assignor shall record the transfer in
25    the chain of title for the site and provide written notice
26    to the Director of the Illinois Department of Revenue of

 

 

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1    the assignor's intent to sell the remediation site and the
2    amount of the tax credit to be transferred as a portion of
3    the sale. In no event may a credit be transferred to any
4    taxpayer if the taxpayer or a related party would not be
5    eligible under the provisions of subsection (i).
6        (iii) For purposes of this Section, the term "site"
7    shall have the same meaning as under Section 58.2 of the
8    Environmental Protection Act.
9    (o) For each of taxable years during the Compassionate Use
10of Medical Cannabis Program, a surcharge is imposed on all
11taxpayers on income arising from the sale or exchange of
12capital assets, depreciable business property, real property
13used in the trade or business, and Section 197 intangibles of
14an organization registrant under the Compassionate Use of
15Medical Cannabis Program Act. The amount of the surcharge is
16equal to the amount of federal income tax liability for the
17taxable year attributable to those sales and exchanges. The
18surcharge imposed does not apply if:
19        (1) the medical cannabis cultivation center
20    registration, medical cannabis dispensary registration, or
21    the property of a registration is transferred as a result
22    of any of the following:
23            (A) bankruptcy, a receivership, or a debt
24        adjustment initiated by or against the initial
25        registration or the substantial owners of the initial
26        registration;

 

 

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1            (B) cancellation, revocation, or termination of
2        any registration by the Illinois Department of Public
3        Health;
4            (C) a determination by the Illinois Department of
5        Public Health that transfer of the registration is in
6        the best interests of Illinois qualifying patients as
7        defined by the Compassionate Use of Medical Cannabis
8        Program Act;
9            (D) the death of an owner of the equity interest in
10        a registrant;
11            (E) the acquisition of a controlling interest in
12        the stock or substantially all of the assets of a
13        publicly traded company;
14            (F) a transfer by a parent company to a wholly
15        owned subsidiary; or
16            (G) the transfer or sale to or by one person to
17        another person where both persons were initial owners
18        of the registration when the registration was issued;
19        or
20        (2) the cannabis cultivation center registration,
21    medical cannabis dispensary registration, or the
22    controlling interest in a registrant's property is
23    transferred in a transaction to lineal descendants in
24    which no gain or loss is recognized or as a result of a
25    transaction in accordance with Section 351 of the Internal
26    Revenue Code in which no gain or loss is recognized.

 

 

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1    (p) Pass-through entity tax.
2        (1) For taxable years ending on or after December 31,
3    2021 and beginning prior to January 1, 2026, a partnership
4    (other than a publicly traded partnership under Section
5    7704 of the Internal Revenue Code) or Subchapter S
6    corporation may elect to apply the provisions of this
7    subsection. A separate election shall be made for each
8    taxable year. Such election shall be made at such time,
9    and in such form and manner as prescribed by the
10    Department, and, once made, is irrevocable.
11        (2) Entity-level tax. A partnership or Subchapter S
12    corporation electing to apply the provisions of this
13    subsection shall be subject to a tax for the privilege of
14    earning or receiving income in this State in an amount
15    equal to 4.95% of the taxpayer's net income for the
16    taxable year.
17        (3) Net income defined.
18            (A) In general. For purposes of paragraph (2), the
19        term net income has the same meaning as defined in
20        Section 202 of this Act, except that the following
21        provisions shall not apply:
22                (i) the standard exemption allowed under
23            Section 204;
24                (ii) the deduction for net losses allowed
25            under Section 207;
26                (iii) in the case of an S corporation, the

 

 

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1            modification under Section 203(b)(2)(S); and
2                (iv) in the case of a partnership, the
3            modifications under Section 203(d)(2)(H) and
4            Section 203(d)(2)(I).
5            (B) Special rule for tiered partnerships. If a
6        taxpayer making the election under paragraph (1) is a
7        partner of another taxpayer making the election under
8        paragraph (1), net income shall be computed as
9        provided in subparagraph (A), except that the taxpayer
10        shall subtract its distributive share of the net
11        income of the electing partnership (including its
12        distributive share of the net income of the electing
13        partnership derived as a distributive share from
14        electing partnerships in which it is a partner).
15        (4) Credit for entity level tax. Each partner or
16    shareholder of a taxpayer making the election under this
17    Section shall be allowed a credit against the tax imposed
18    under subsections (a) and (b) of Section 201 of this Act
19    for the taxable year of the partnership or Subchapter S
20    corporation for which an election is in effect ending
21    within or with the taxable year of the partner or
22    shareholder in an amount equal to 4.95% times the partner
23    or shareholder's distributive share of the net income of
24    the electing partnership or Subchapter S corporation, but
25    not to exceed the partner's or shareholder's share of the
26    tax imposed under paragraph (1) which is actually paid by

 

 

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1    the partnership or Subchapter S corporation. If the
2    taxpayer is a partnership or Subchapter S corporation that
3    is itself a partner of a partnership making the election
4    under paragraph (1), the credit under this paragraph shall
5    be allowed to the taxpayer's partners or shareholders (or
6    if the partner is a partnership or Subchapter S
7    corporation then its partners or shareholders) in
8    accordance with the determination of income and
9    distributive share of income under Sections 702 and 704
10    and Subchapter S of the Internal Revenue Code. If the
11    amount of the credit allowed under this paragraph exceeds
12    the partner's or shareholder's liability for tax imposed
13    under subsections (a) and (b) of Section 201 of this Act
14    for the taxable year, such excess shall be treated as an
15    overpayment for purposes of Section 909 of this Act.
16        (5) Nonresidents. A nonresident individual who is a
17    partner or shareholder of a partnership or Subchapter S
18    corporation for a taxable year for which an election is in
19    effect under paragraph (1) shall not be required to file
20    an income tax return under this Act for such taxable year
21    if the only source of net income of the individual (or the
22    individual and the individual's spouse in the case of a
23    joint return) is from an entity making the election under
24    paragraph (1) and the credit allowed to the partner or
25    shareholder under paragraph (4) equals or exceeds the
26    individual's liability for the tax imposed under

 

 

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1    subsections (a) and (b) of Section 201 of this Act for the
2    taxable year.
3        (6) Liability for tax. Except as provided in this
4    paragraph, a partnership or Subchapter S making the
5    election under paragraph (1) is liable for the
6    entity-level tax imposed under paragraph (2). If the
7    electing partnership or corporation fails to pay the full
8    amount of tax deemed assessed under paragraph (2), the
9    partners or shareholders shall be liable to pay the tax
10    assessed (including penalties and interest). Each partner
11    or shareholder shall be liable for the unpaid assessment
12    based on the ratio of the partner's or shareholder's share
13    of the net income of the partnership over the total net
14    income of the partnership. If the partnership or
15    Subchapter S corporation fails to pay the tax assessed
16    (including penalties and interest) and thereafter an
17    amount of such tax is paid by the partners or
18    shareholders, such amount shall not be collected from the
19    partnership or corporation.
20        (7) Foreign tax. For purposes of the credit allowed
21    under Section 601(b)(3) of this Act, tax paid by a
22    partnership or Subchapter S corporation to another state
23    which, as determined by the Department, is substantially
24    similar to the tax imposed under this subsection, shall be
25    considered tax paid by the partner or shareholder to the
26    extent that the partner's or shareholder's share of the

 

 

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1    income of the partnership or Subchapter S corporation
2    allocated and apportioned to such other state bears to the
3    total income of the partnership or Subchapter S
4    corporation allocated or apportioned to such other state.
5        (8) Suspension of withholding. The provisions of
6    Section 709.5 of this Act shall not apply to a partnership
7    or Subchapter S corporation for the taxable year for which
8    an election under paragraph (1) is in effect.
9        (9) Requirement to pay estimated tax. For each taxable
10    year for which an election under paragraph (1) is in
11    effect, a partnership or Subchapter S corporation is
12    required to pay estimated tax for such taxable year under
13    Sections 803 and 804 of this Act if the amount payable as
14    estimated tax can reasonably be expected to exceed $500.
15        (10) The provisions of this subsection shall apply
16    only with respect to taxable years for which the
17    limitation on individual deductions applies under Section
18    164(b)(6) of the Internal Revenue Code.
19(Source: P.A. 101-9, eff. 6-5-19; 101-31, eff. 6-28-19;
20101-207, eff. 8-2-19; 101-363, eff. 8-9-19; 102-558, eff.
218-20-21; 102-658, eff. 8-27-21.)
 
22    (35 ILCS 5/704A)
23    Sec. 704A. Employer's return and payment of tax withheld.
24    (a) In general, every employer who deducts and withholds
25or is required to deduct and withhold tax under this Act on or

 

 

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1after January 1, 2008 shall make those payments and returns as
2provided in this Section.
3    (b) Returns. Every employer shall, in the form and manner
4required by the Department, make returns with respect to taxes
5withheld or required to be withheld under this Article 7 for
6each quarter beginning on or after January 1, 2008, on or
7before the last day of the first month following the close of
8that quarter.
9    (c) Payments. With respect to amounts withheld or required
10to be withheld on or after January 1, 2008:
11        (1) Semi-weekly payments. For each calendar year, each
12    employer who withheld or was required to withhold more
13    than $12,000 during the one-year period ending on June 30
14    of the immediately preceding calendar year, payment must
15    be made:
16            (A) on or before each Friday of the calendar year,
17        for taxes withheld or required to be withheld on the
18        immediately preceding Saturday, Sunday, Monday, or
19        Tuesday;
20            (B) on or before each Wednesday of the calendar
21        year, for taxes withheld or required to be withheld on
22        the immediately preceding Wednesday, Thursday, or
23        Friday.
24        Beginning with calendar year 2011, payments made under
25    this paragraph (1) of subsection (c) must be made by
26    electronic funds transfer.

 

 

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1        (2) Semi-weekly payments. Any employer who withholds
2    or is required to withhold more than $12,000 in any
3    quarter of a calendar year is required to make payments on
4    the dates set forth under item (1) of this subsection (c)
5    for each remaining quarter of that calendar year and for
6    the subsequent calendar year.
7        (3) Monthly payments. Each employer, other than an
8    employer described in items (1) or (2) of this subsection,
9    shall pay to the Department, on or before the 15th day of
10    each month the taxes withheld or required to be withheld
11    during the immediately preceding month.
12        (4) Payments with returns. Each employer shall pay to
13    the Department, on or before the due date for each return
14    required to be filed under this Section, any tax withheld
15    or required to be withheld during the period for which the
16    return is due and not previously paid to the Department.
17    (d) Regulatory authority. The Department may, by rule:
18        (1) Permit employers, in lieu of the requirements of
19    subsections (b) and (c), to file annual returns due on or
20    before January 31 of the year for taxes withheld or
21    required to be withheld during the previous calendar year
22    and, if the aggregate amounts required to be withheld by
23    the employer under this Article 7 (other than amounts
24    required to be withheld under Section 709.5) do not exceed
25    $1,000 for the previous calendar year, to pay the taxes
26    required to be shown on each such return no later than the

 

 

SB1832- 49 -LRB103 27553 HLH 53928 b

1    due date for such return.
2        (2) Provide that any payment required to be made under
3    subsection (c)(1) or (c)(2) is deemed to be timely to the
4    extent paid by electronic funds transfer on or before the
5    due date for deposit of federal income taxes withheld
6    from, or federal employment taxes due with respect to, the
7    wages from which the Illinois taxes were withheld.
8        (3) Designate one or more depositories to which
9    payment of taxes required to be withheld under this
10    Article 7 must be paid by some or all employers.
11        (4) Increase the threshold dollar amounts at which
12    employers are required to make semi-weekly payments under
13    subsection (c)(1) or (c)(2).
14    (e) Annual return and payment. Every employer who deducts
15and withholds or is required to deduct and withhold tax from a
16person engaged in domestic service employment, as that term is
17defined in Section 3510 of the Internal Revenue Code, may
18comply with the requirements of this Section with respect to
19such employees by filing an annual return and paying the taxes
20required to be deducted and withheld on or before the 15th day
21of the fourth month following the close of the employer's
22taxable year. The Department may allow the employer's return
23to be submitted with the employer's individual income tax
24return or to be submitted with a return due from the employer
25under Section 1400.2 of the Unemployment Insurance Act.
26    (f) Magnetic media and electronic filing. With respect to

 

 

SB1832- 50 -LRB103 27553 HLH 53928 b

1taxes withheld in calendar years prior to 2017, any W-2 Form
2that, under the Internal Revenue Code and regulations
3promulgated thereunder, is required to be submitted to the
4Internal Revenue Service on magnetic media or electronically
5must also be submitted to the Department on magnetic media or
6electronically for Illinois purposes, if required by the
7Department.
8    With respect to taxes withheld in 2017 and subsequent
9calendar years, the Department may, by rule, require that any
10return (including any amended return) under this Section and
11any W-2 Form that is required to be submitted to the Department
12must be submitted on magnetic media or electronically.
13    The due date for submitting W-2 Forms shall be as
14prescribed by the Department by rule.
15    (g) For amounts deducted or withheld after December 31,
162009, a taxpayer who makes an election under subsection (f) of
17Section 5-15 of the Economic Development for a Growing Economy
18Tax Credit Act for a taxable year shall be allowed a credit
19against payments due under this Section for amounts withheld
20during the first calendar year beginning after the end of that
21taxable year equal to the amount of the credit for the
22incremental income tax attributable to full-time employees of
23the taxpayer awarded to the taxpayer by the Department of
24Commerce and Economic Opportunity under the Economic
25Development for a Growing Economy Tax Credit Act for the
26taxable year and credits not previously claimed and allowed to

 

 

SB1832- 51 -LRB103 27553 HLH 53928 b

1be carried forward under Section 211(4) of this Act as
2provided in subsection (f) of Section 5-15 of the Economic
3Development for a Growing Economy Tax Credit Act. The credit
4or credits may not reduce the taxpayer's obligation for any
5payment due under this Section to less than zero. If the amount
6of the credit or credits exceeds the total payments due under
7this Section with respect to amounts withheld during the
8calendar year, the excess may be carried forward and applied
9against the taxpayer's liability under this Section in the
10succeeding calendar years as allowed to be carried forward
11under paragraph (4) of Section 211 of this Act. The credit or
12credits shall be applied to the earliest year for which there
13is a tax liability. If there are credits from more than one
14taxable year that are available to offset a liability, the
15earlier credit shall be applied first. Each employer who
16deducts and withholds or is required to deduct and withhold
17tax under this Act and who retains income tax withholdings
18under subsection (f) of Section 5-15 of the Economic
19Development for a Growing Economy Tax Credit Act must make a
20return with respect to such taxes and retained amounts in the
21form and manner that the Department, by rule, requires and pay
22to the Department or to a depositary designated by the
23Department those withheld taxes not retained by the taxpayer.
24For purposes of this subsection (g), the term taxpayer shall
25include taxpayer and members of the taxpayer's unitary
26business group as defined under paragraph (27) of subsection

 

 

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1(a) of Section 1501 of this Act. This Section is exempt from
2the provisions of Section 250 of this Act. No credit awarded
3under the Economic Development for a Growing Economy Tax
4Credit Act for agreements entered into on or after January 1,
52015 may be credited against payments due under this Section.
6    (g-1) For amounts deducted or withheld after December 31,
72024, a taxpayer who makes an election under the Reimagining
8Electric Vehicles in Illinois Act shall be allowed a credit
9against payments due under this Section for amounts withheld
10during the first quarterly reporting period beginning after
11the certificate is issued equal to the portion of the REV
12Illinois Credit attributable to the incremental income tax
13attributable to new employees and retained employees as
14certified by the Department of Commerce and Economic
15Opportunity pursuant to an agreement with the taxpayer under
16the Reimagining Electric Vehicles in Illinois Act for the
17taxable year. The credit or credits may not reduce the
18taxpayer's obligation for any payment due under this Section
19to less than zero. If the amount of the credit or credits
20exceeds the total payments due under this Section with respect
21to amounts withheld during the quarterly reporting period, the
22excess may be carried forward and applied against the
23taxpayer's liability under this Section in the succeeding
24quarterly reporting period as allowed to be carried forward
25under paragraph (4) of Section 211 of this Act. The credit or
26credits shall be applied to the earliest quarterly reporting

 

 

SB1832- 53 -LRB103 27553 HLH 53928 b

1period for which there is a tax liability. If there are credits
2from more than one quarterly reporting period that are
3available to offset a liability, the earlier credit shall be
4applied first. Each employer who deducts and withholds or is
5required to deduct and withhold tax under this Act and who
6retains income tax withholdings this subsection must make a
7return with respect to such taxes and retained amounts in the
8form and manner that the Department, by rule, requires and pay
9to the Department or to a depositary designated by the
10Department those withheld taxes not retained by the taxpayer.
11For purposes of this subsection (g-1), the term taxpayer shall
12include taxpayer and members of the taxpayer's unitary
13business group as defined under paragraph (27) of subsection
14(a) of Section 1501 of this Act. This Section is exempt from
15the provisions of Section 250 of this Act.
16    (g-2) For amounts deducted or withheld after December 31,
172024, a taxpayer who makes an election under the Manufacturing
18Illinois Chips for Real Opportunity (MICRO) Act shall be
19allowed a credit against payments due under this Section for
20amounts withheld during the first quarterly reporting period
21beginning after the certificate is issued equal to the portion
22of the MICRO Illinois Credit attributable to the incremental
23income tax attributable to new employees and retained
24employees as certified by the Department of Commerce and
25Economic Opportunity pursuant to an agreement with the
26taxpayer under the Manufacturing Illinois Chips for Real

 

 

SB1832- 54 -LRB103 27553 HLH 53928 b

1Opportunity (MICRO) Act for the taxable year. The credit or
2credits may not reduce the taxpayer's obligation for any
3payment due under this Section to less than zero. If the amount
4of the credit or credits exceeds the total payments due under
5this Section with respect to amounts withheld during the
6quarterly reporting period, the excess may be carried forward
7and applied against the taxpayer's liability under this
8Section in the succeeding quarterly reporting period as
9allowed to be carried forward under paragraph (4) of Section
10211 of this Act. The credit or credits shall be applied to the
11earliest quarterly reporting period for which there is a tax
12liability. If there are credits from more than one quarterly
13reporting period that are available to offset a liability, the
14earlier credit shall be applied first. Each employer who
15deducts and withholds or is required to deduct and withhold
16tax under this Act and who retains income tax withholdings
17this subsection must make a return with respect to such taxes
18and retained amounts in the form and manner that the
19Department, by rule, requires and pay to the Department or to a
20depositary designated by the Department those withheld taxes
21not retained by the taxpayer. For purposes of this subsection,
22the term taxpayer shall include taxpayer and members of the
23taxpayer's unitary business group as defined under paragraph
24(27) of subsection (a) of Section 1501 of this Act. This
25Section is exempt from the provisions of Section 250 of this
26Act.

 

 

SB1832- 55 -LRB103 27553 HLH 53928 b

1    (g-3) A taxpayer who makes an election under subsection
2(k) of Section 201 of this Act for a taxable year shall be
3allowed a credit against payments due under this Section for
4amounts withheld during the first calendar year beginning
5after the last day of the taxable year for which the election
6is made. The credit against withholding shall be equal to the
7amount of the credit allowed under subsection (k) of Section
8201 of this Act. The credit or credits may not reduce the
9taxpayer's obligation for any payment due under this Section
10to less than zero. If the amount of the credit or credits
11exceeds the total payments due under this Section with respect
12to amounts withheld during the calendar year, the excess may
13be carried forward and applied against the taxpayer's
14liability under this Section in the succeeding calendar years
15as allowed to be carried forward under paragraph (4) of
16Section 211 of this Act. The credit or credits shall be applied
17to the earliest year for which there is a tax liability. If
18there are credits from more than one taxable year that are
19available to offset a liability, the earlier credit shall be
20applied first. Each employer who deducts and withholds or is
21required to deduct and withhold tax under this Act and who
22elects to take a credit against taxes imposed under this
23Section pursuant to subsection (k) of Section 201 of this Act
24must make a return with respect to such taxes and retained
25amounts in the form and manner that the Department, by rule,
26requires and pay to the Department or to a depositary

 

 

SB1832- 56 -LRB103 27553 HLH 53928 b

1designated by the Department those withheld taxes not retained
2by the taxpayer.
3    (h) An employer may claim a credit against payments due
4under this Section for amounts withheld during the first
5calendar year ending after the date on which a tax credit
6certificate was issued under Section 35 of the Small Business
7Job Creation Tax Credit Act. The credit shall be equal to the
8amount shown on the certificate, but may not reduce the
9taxpayer's obligation for any payment due under this Section
10to less than zero. If the amount of the credit exceeds the
11total payments due under this Section with respect to amounts
12withheld during the calendar year, the excess may be carried
13forward and applied against the taxpayer's liability under
14this Section in the 5 succeeding calendar years. The credit
15shall be applied to the earliest year for which there is a tax
16liability. If there are credits from more than one calendar
17year that are available to offset a liability, the earlier
18credit shall be applied first. This Section is exempt from the
19provisions of Section 250 of this Act.
20    (i) Each employer with 50 or fewer full-time equivalent
21employees during the reporting period may claim a credit
22against the payments due under this Section for each qualified
23employee in an amount equal to the maximum credit allowable.
24The credit may be taken against payments due for reporting
25periods that begin on or after January 1, 2020, and end on or
26before December 31, 2027. An employer may not claim a credit

 

 

SB1832- 57 -LRB103 27553 HLH 53928 b

1for an employee who has worked fewer than 90 consecutive days
2immediately preceding the reporting period; however, such
3credits may accrue during that 90-day period and be claimed
4against payments under this Section for future reporting
5periods after the employee has worked for the employer at
6least 90 consecutive days. In no event may the credit exceed
7the employer's liability for the reporting period. Each
8employer who deducts and withholds or is required to deduct
9and withhold tax under this Act and who retains income tax
10withholdings under this subsection must make a return with
11respect to such taxes and retained amounts in the form and
12manner that the Department, by rule, requires and pay to the
13Department or to a depositary designated by the Department
14those withheld taxes not retained by the employer.
15    For each reporting period, the employer may not claim a
16credit or credits for more employees than the number of
17employees making less than the minimum or reduced wage for the
18current calendar year during the last reporting period of the
19preceding calendar year. Notwithstanding any other provision
20of this subsection, an employer shall not be eligible for
21credits for a reporting period unless the average wage paid by
22the employer per employee for all employees making less than
23$55,000 during the reporting period is greater than the
24average wage paid by the employer per employee for all
25employees making less than $55,000 during the same reporting
26period of the prior calendar year.

 

 

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1    For purposes of this subsection (i):
2    "Compensation paid in Illinois" has the meaning ascribed
3to that term under Section 304(a)(2)(B) of this Act.
4    "Employer" and "employee" have the meaning ascribed to
5those terms in the Minimum Wage Law, except that "employee"
6also includes employees who work for an employer with fewer
7than 4 employees. Employers that operate more than one
8establishment pursuant to a franchise agreement or that
9constitute members of a unitary business group shall aggregate
10their employees for purposes of determining eligibility for
11the credit.
12    "Full-time equivalent employees" means the ratio of the
13number of paid hours during the reporting period and the
14number of working hours in that period.
15    "Maximum credit" means the percentage listed below of the
16difference between the amount of compensation paid in Illinois
17to employees who are paid not more than the required minimum
18wage reduced by the amount of compensation paid in Illinois to
19employees who were paid less than the current required minimum
20wage during the reporting period prior to each increase in the
21required minimum wage on January 1. If an employer pays an
22employee more than the required minimum wage and that employee
23previously earned less than the required minimum wage, the
24employer may include the portion that does not exceed the
25required minimum wage as compensation paid in Illinois to
26employees who are paid not more than the required minimum

 

 

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1wage.
2        (1) 25% for reporting periods beginning on or after
3    January 1, 2020 and ending on or before December 31, 2020;
4        (2) 21% for reporting periods beginning on or after
5    January 1, 2021 and ending on or before December 31, 2021;
6        (3) 17% for reporting periods beginning on or after
7    January 1, 2022 and ending on or before December 31, 2022;
8        (4) 13% for reporting periods beginning on or after
9    January 1, 2023 and ending on or before December 31, 2023;
10        (5) 9% for reporting periods beginning on or after
11    January 1, 2024 and ending on or before December 31, 2024;
12        (6) 5% for reporting periods beginning on or after
13    January 1, 2025 and ending on or before December 31, 2025.
14    The amount computed under this subsection may continue to
15be claimed for reporting periods beginning on or after January
161, 2026 and:
17        (A) ending on or before December 31, 2026 for
18    employers with more than 5 employees; or
19        (B) ending on or before December 31, 2027 for
20    employers with no more than 5 employees.
21    "Qualified employee" means an employee who is paid not
22more than the required minimum wage and has an average wage
23paid per hour by the employer during the reporting period
24equal to or greater than his or her average wage paid per hour
25by the employer during each reporting period for the
26immediately preceding 12 months. A new qualified employee is

 

 

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1deemed to have earned the required minimum wage in the
2preceding reporting period.
3    "Reporting period" means the quarter for which a return is
4required to be filed under subsection (b) of this Section.
5    (j) For reporting periods beginning on or after January 1,
62023, if a private employer grants all of its employees the
7option of taking a paid leave of absence of at least 30 days
8for the purpose of serving as an organ donor or bone marrow
9donor, then the private employer may take a credit against the
10payments due under this Section in an amount equal to the
11amount withheld under this Section with respect to wages paid
12while the employee is on organ donation leave, not to exceed
13$1,000 in withholdings for each employee who takes organ
14donation leave. To be eligible for the credit, such a leave of
15absence must be taken without loss of pay, vacation time,
16compensatory time, personal days, or sick time for at least
17the first 30 days of the leave of absence. The private employer
18shall adopt rules governing organ donation leave, including
19rules that (i) establish conditions and procedures for
20requesting and approving leave and (ii) require medical
21documentation of the proposed organ or bone marrow donation
22before leave is approved by the private employer. A private
23employer must provide, in the manner required by the
24Department, documentation from the employee's medical
25provider, which the private employer receives from the
26employee, that verifies the employee's organ donation. The

 

 

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1private employer must also provide, in the manner required by
2the Department, documentation that shows that a qualifying
3organ donor leave policy was in place and offered to all
4qualifying employees at the time the leave was taken. For the
5private employer to receive the tax credit, the employee
6taking organ donor leave must allow for the applicable medical
7records to be disclosed to the Department. If the private
8employer cannot provide the required documentation to the
9Department, then the private employer is ineligible for the
10credit under this Section. A private employer must also
11provide, in the form required by the Department, any
12additional documentation or information required by the
13Department to administer the credit under this Section. The
14credit under this subsection (j) shall be taken within one
15year after the date upon which the organ donation leave
16begins. If the leave taken spans into a second tax year, the
17employer qualifies for the allowable credit in the later of
18the 2 years. If the amount of credit exceeds the tax liability
19for the year, the excess may be carried and applied to the tax
20liability for the 3 taxable years following the excess credit
21year. The tax credit shall be applied to the earliest year for
22which there is a tax liability. If there are credits for more
23than one year that are available to offset liability, the
24earlier credit shall be applied first.
25    Nothing in this subsection (j) prohibits a private
26employer from providing an unpaid leave of absence to its

 

 

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1employees for the purpose of serving as an organ donor or bone
2marrow donor; however, if the employer's policy provides for
3fewer than 30 days of paid leave for organ or bone marrow
4donation, then the employer shall not be eligible for the
5credit under this Section.
6    As used in this subsection (j):
7    "Organ" means any biological tissue of the human body that
8may be donated by a living donor, including, but not limited
9to, the kidney, liver, lung, pancreas, intestine, bone, skin,
10or any subpart of those organs.
11    "Organ donor" means a person from whose body an organ is
12taken to be transferred to the body of another person.
13    "Private employer" means a sole proprietorship,
14corporation, partnership, limited liability company, or other
15entity with one or more employees. "Private employer" does not
16include a municipality, county, State agency, or other public
17employer.
18    This subsection (j) is exempt from the provisions of
19Section 250 of this Act.
20(Source: P.A. 101-1, eff. 2-19-19; 102-669, eff. 11-16-21;
21102-700, Article 30, Section 30-5, eff. 4-19-22; 102-700,
22Article 110, Section 110-905, eff. 4-19-22; revised 6-1-22.)
 
23    Section 99. Effective date. This Act takes effect upon
24becoming law.