SB2047 EnrolledLRB103 00133 HLH 45137 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, 214, 216, 218, 222, 224, 228, 229, 231,
6and 237 and by adding Section 251 as follows:
 
7    (35 ILCS 5/201)
8    Sec. 201. Tax imposed.
9    (a) In general. A tax measured by net income is hereby
10imposed on every individual, corporation, trust and estate for
11each taxable year ending after July 31, 1969 on the privilege
12of earning or receiving income in or as a resident of this
13State. Such tax shall be in addition to all other occupation or
14privilege taxes imposed by this State or by any municipal
15corporation or political subdivision thereof.
16    (b) Rates. The tax imposed by subsection (a) of this
17Section shall be determined as follows, except as adjusted by
18subsection (d-1):
19        (1) In the case of an individual, trust or estate, for
20    taxable years ending prior to July 1, 1989, an amount
21    equal to 2 1/2% of the taxpayer's net income for the
22    taxable year.
23        (2) In the case of an individual, trust or estate, for

 

 

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

 

 

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

 

 

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

 

 

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

 

 

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1        (1) the organization gaming license, organization
2    license, or racetrack property is transferred as a result
3    of any of the following:
4            (A) bankruptcy, a receivership, or a debt
5        adjustment initiated by or against the initial
6        licensee or the substantial owners of the initial
7        licensee;
8            (B) cancellation, revocation, or termination of
9        any such license by the Illinois Gaming Board or the
10        Illinois Racing Board;
11            (C) a determination by the Illinois Gaming Board
12        that transfer of the license is in the best interests
13        of Illinois gaming;
14            (D) the death of an owner of the equity interest in
15        a licensee;
16            (E) the acquisition of a controlling interest in
17        the stock or substantially all of the assets of a
18        publicly traded company;
19            (F) a transfer by a parent company to a wholly
20        owned subsidiary; or
21            (G) the transfer or sale to or by one person to
22        another person where both persons were initial owners
23        of the license when the license was issued; or
24        (2) the controlling interest in the organization
25    gaming license, organization license, or racetrack
26    property is transferred in a transaction to lineal

 

 

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

 

 

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1corporation or political subdivision thereof.
2    (d) Additional Personal Property Tax Replacement Income
3Tax Rates. The personal property tax replacement income tax
4imposed by this subsection and subsection (c) of this Section
5in the case of a corporation, other than a Subchapter S
6corporation and except as adjusted by subsection (d-1), shall
7be an additional amount equal to 2.85% of such taxpayer's net
8income for the taxable year, except that beginning on January
91, 1981, and thereafter, the rate of 2.85% specified in this
10subsection shall be reduced to 2.5%, and in the case of a
11partnership, trust or a Subchapter S corporation shall be an
12additional amount equal to 1.5% of such taxpayer's net income
13for the taxable year.
14    (d-1) Rate reduction for certain foreign insurers. In the
15case of a foreign insurer, as defined by Section 35A-5 of the
16Illinois Insurance Code, whose state or country of domicile
17imposes on insurers domiciled in Illinois a retaliatory tax
18(excluding any insurer whose premiums from reinsurance assumed
19are 50% or more of its total insurance premiums as determined
20under paragraph (2) of subsection (b) of Section 304, except
21that for purposes of this determination premiums from
22reinsurance do not include premiums from inter-affiliate
23reinsurance arrangements), beginning with taxable years ending
24on or after December 31, 1999, the sum of the rates of tax
25imposed by subsections (b) and (d) shall be reduced (but not
26increased) to the rate at which the total amount of tax imposed

 

 

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

 

 

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

 

 

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

 

 

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1    which cause the creation of a minimum of 2,000 full-time
2    equivalent jobs in Illinois, (ii) is located in an
3    enterprise zone established pursuant to the Illinois
4    Enterprise Zone Act and (iii) is certified by the
5    Department of Commerce and Community Affairs (now
6    Department of Commerce and Economic Opportunity) as
7    complying with the requirements specified in clause (i)
8    and (ii) by July 1, 1986. The Department of Commerce and
9    Community Affairs (now Department of Commerce and Economic
10    Opportunity) shall notify the Department of Revenue of all
11    such certifications immediately. For tax years ending
12    after December 31, 1988, the credit shall be allowed for
13    the tax year in which the property is placed in service,
14    or, if the amount of the credit exceeds the tax liability
15    for that year, whether it exceeds the original liability
16    or the liability as later amended, such excess may be
17    carried forward and applied to the tax liability of the 5
18    taxable years following the excess credit years. The
19    credit shall be applied to the earliest year for which
20    there is a liability. If there is credit from more than one
21    tax year that is available to offset a liability, earlier
22    credit shall be applied first.
23        (2) The term "qualified property" means property
24    which:
25            (A) is tangible, whether new or used, including
26        buildings and structural components of buildings and

 

 

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

 

 

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

 

 

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

 

 

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

 

 

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1Redevelopment Zone.
2        (1) A taxpayer shall be allowed a credit against the
3    tax imposed by subsections (a) and (b) of this Section for
4    investment in qualified property which is placed in
5    service in an Enterprise Zone created pursuant to the
6    Illinois Enterprise Zone Act or, for property placed in
7    service on or after July 1, 2006, a River Edge
8    Redevelopment Zone established pursuant to the River Edge
9    Redevelopment Zone Act. For partners, shareholders of
10    Subchapter S corporations, and owners of limited liability
11    companies, if the liability company is treated as a
12    partnership for purposes of federal and State income
13    taxation, for taxable years ending before December 31,
14    2023, there shall be allowed a credit under this
15    subsection (f) to be determined in accordance with the
16    determination of income and distributive share of income
17    under Sections 702 and 704 and Subchapter S of the
18    Internal Revenue Code. For taxable years ending on or
19    after December 31, 2023, for partners and shareholders of
20    Subchapter S corporations, the provisions of Section 251
21    shall apply with respect to the credit under this
22    subsection. The credit shall be .5% of the basis for such
23    property. The credit shall be available only in the
24    taxable year in which the property is placed in service in
25    the Enterprise Zone or River Edge Redevelopment Zone and
26    shall not be allowed to the extent that it would reduce a

 

 

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1    taxpayer's liability for the tax imposed by subsections
2    (a) and (b) of this Section to below zero. For tax years
3    ending on or after December 31, 1985, the credit shall be
4    allowed for the tax year in which the property is placed in
5    service, or, if the amount of the credit exceeds the tax
6    liability for that year, whether it exceeds the original
7    liability or the liability as later amended, such excess
8    may be carried forward and applied to the tax liability of
9    the 5 taxable years following the excess credit year. The
10    credit shall be applied to the earliest year for which
11    there is a liability. If there is credit from more than one
12    tax year that is available to offset a liability, the
13    credit accruing first in time shall be applied first.
14        (2) The term qualified property means property which:
15            (A) is tangible, whether new or used, including
16        buildings and structural components of buildings;
17            (B) is depreciable pursuant to Section 167 of the
18        Internal Revenue Code, except that "3-year property"
19        as defined in Section 168(c)(2)(A) of that Code is not
20        eligible for the credit provided by this subsection
21        (f);
22            (C) is acquired by purchase as defined in Section
23        179(d) of the Internal Revenue Code;
24            (D) is used in the Enterprise Zone or River Edge
25        Redevelopment Zone by the taxpayer; and
26            (E) has not been previously used in Illinois in

 

 

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

 

 

SB2047 Enrolled- 20 -LRB103 00133 HLH 45137 b

1    recomputed credit from the amount of credit previously
2    allowed. For the purposes of this paragraph (6), a
3    reduction of the basis of qualified property resulting
4    from a redetermination of the purchase price shall be
5    deemed a disposition of qualified property to the extent
6    of such reduction.
7        (7) There shall be allowed an additional credit equal
8    to 0.5% of the basis of qualified property placed in
9    service during the taxable year in a River Edge
10    Redevelopment Zone, provided such property is placed in
11    service on or after July 1, 2006, and the taxpayer's base
12    employment within Illinois has increased by 1% or more
13    over the preceding year as determined by the taxpayer's
14    employment records filed with the Illinois Department of
15    Employment Security. Taxpayers who are new to Illinois
16    shall be deemed to have met the 1% growth in base
17    employment for the first year in which they file
18    employment records with the Illinois Department of
19    Employment Security. If, in any year, the increase in base
20    employment within Illinois over the preceding year is less
21    than 1%, the additional credit shall be limited to that
22    percentage times a fraction, the numerator of which is
23    0.5% and the denominator of which is 1%, but shall not
24    exceed 0.5%.
25        (8) For taxable years beginning on or after January 1,
26    2021, there shall be allowed an Enterprise Zone

 

 

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1    construction jobs credit against the taxes imposed under
2    subsections (a) and (b) of this Section as provided in
3    Section 13 of the Illinois Enterprise Zone Act.
4        The credit or credits may not reduce the taxpayer's
5    liability to less than zero. If the amount of the credit or
6    credits exceeds the taxpayer's liability, the excess may
7    be carried forward and applied against the taxpayer's
8    liability in succeeding calendar years in the same manner
9    provided under paragraph (4) of Section 211 of this Act.
10    The credit or credits shall be applied to the earliest
11    year for which there is a tax liability. If there are
12    credits from more than one taxable year that are available
13    to offset a liability, the earlier credit shall be applied
14    first.
15        For partners, shareholders of Subchapter S
16    corporations, and owners of limited liability companies,
17    if the liability company is treated as a partnership for
18    the purposes of federal and State income taxation, for
19    taxable years ending before December 31, 2023, there shall
20    be allowed a credit under this Section to be 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. For taxable
24    years ending on or after December 31, 2023, for partners
25    and shareholders of Subchapter S corporations, the
26    provisions of Section 251 shall apply with respect to the

 

 

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1    credit under this subsection.
2        The total aggregate amount of credits awarded under
3    the Blue Collar Jobs Act (Article 20 of Public Act 101-9)
4    shall not exceed $20,000,000 in any State fiscal year.
5        This paragraph (8) is exempt from the provisions of
6    Section 250.
7    (g) (Blank).
8    (h) Investment credit; High Impact Business.
9        (1) Subject to subsections (b) and (b-5) of Section
10    5.5 of the Illinois Enterprise Zone Act, a taxpayer shall
11    be allowed a credit against the tax imposed by subsections
12    (a) and (b) of this Section for investment in qualified
13    property which is placed in service by a Department of
14    Commerce and Economic Opportunity designated High Impact
15    Business. The credit shall be .5% of the basis for such
16    property. The credit shall not be available (i) until the
17    minimum investments in qualified property set forth in
18    subdivision (a)(3)(A) of Section 5.5 of the Illinois
19    Enterprise Zone Act have been satisfied or (ii) until the
20    time authorized in subsection (b-5) of the Illinois
21    Enterprise Zone Act for entities designated as High Impact
22    Businesses under subdivisions (a)(3)(B), (a)(3)(C), and
23    (a)(3)(D) of Section 5.5 of the Illinois Enterprise Zone
24    Act, and shall not be allowed to the extent that it would
25    reduce a taxpayer's liability for the tax imposed by
26    subsections (a) and (b) of this Section to below zero. The

 

 

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1    credit applicable to such investments shall be taken in
2    the taxable year in which such investments have been
3    completed. The credit for additional investments beyond
4    the minimum investment by a designated high impact
5    business authorized under subdivision (a)(3)(A) of Section
6    5.5 of the Illinois Enterprise Zone Act shall be available
7    only in the taxable year in which the property is placed in
8    service and shall not be allowed to the extent that it
9    would reduce a taxpayer's liability for the tax imposed by
10    subsections (a) and (b) of this Section to below zero. For
11    tax years ending on or after December 31, 1987, the credit
12    shall be allowed for the tax year in which the property is
13    placed in service, or, if the amount of the credit exceeds
14    the tax liability for that year, whether it exceeds the
15    original liability or the liability as later amended, such
16    excess may be carried forward and applied to the tax
17    liability of the 5 taxable years following the excess
18    credit year. The credit shall be applied to the earliest
19    year for which there is a liability. If there is credit
20    from more than one tax year that is available to offset a
21    liability, the credit accruing first in time shall be
22    applied first.
23        Changes made in this subdivision (h)(1) by Public Act
24    88-670 restore changes made by Public Act 85-1182 and
25    reflect existing law.
26        (2) The term qualified property means property which:

 

 

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1            (A) is tangible, whether new or used, including
2        buildings and structural components of buildings;
3            (B) is depreciable pursuant to Section 167 of the
4        Internal Revenue Code, except that "3-year property"
5        as defined in Section 168(c)(2)(A) of that Code is not
6        eligible for the credit provided by this subsection
7        (h);
8            (C) is acquired by purchase as defined in Section
9        179(d) of the Internal Revenue Code; and
10            (D) is not eligible for the Enterprise Zone
11        Investment Credit provided by subsection (f) of this
12        Section.
13        (3) The basis of qualified property shall be the basis
14    used to compute the depreciation deduction for federal
15    income tax purposes.
16        (4) If the basis of the property for federal income
17    tax depreciation purposes is increased after it has been
18    placed in service in a federally designated Foreign Trade
19    Zone or Sub-Zone located in Illinois by the taxpayer, the
20    amount of such increase shall be deemed property placed in
21    service on the date of such increase in basis.
22        (5) The term "placed in service" shall have the same
23    meaning as under Section 46 of the Internal Revenue Code.
24        (6) If during any taxable year ending on or before
25    December 31, 1996, any property ceases to be qualified
26    property in the hands of the taxpayer within 48 months

 

 

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1    after being placed in service, or the situs of any
2    qualified property is moved outside Illinois within 48
3    months after being placed in service, the tax imposed
4    under subsections (a) and (b) of this Section for such
5    taxable year shall be increased. Such increase shall be
6    determined by (i) recomputing the investment credit which
7    would have been allowed for the year in which credit for
8    such property was originally allowed by eliminating such
9    property from such computation, and (ii) subtracting such
10    recomputed credit from the amount of credit previously
11    allowed. For the purposes of this paragraph (6), a
12    reduction of the basis of qualified property resulting
13    from a redetermination of the purchase price shall be
14    deemed a disposition of qualified property to the extent
15    of such reduction.
16        (7) Beginning with tax years ending after December 31,
17    1996, if a taxpayer qualifies for the credit under this
18    subsection (h) and thereby is granted a tax abatement and
19    the taxpayer relocates its entire facility in violation of
20    the explicit terms and length of the contract under
21    Section 18-183 of the Property Tax Code, the tax imposed
22    under subsections (a) and (b) of this Section shall be
23    increased for the taxable year in which the taxpayer
24    relocated its facility by an amount equal to the amount of
25    credit received by the taxpayer under this subsection (h).
26    (h-5) High Impact Business construction jobs credit. For

 

 

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1taxable years beginning on or after January 1, 2021, there
2shall also be allowed a High Impact Business construction jobs
3credit against the tax imposed under subsections (a) and (b)
4of this Section as provided in subsections (i) and (j) of
5Section 5.5 of the Illinois Enterprise Zone Act.
6    The credit or credits may not reduce the taxpayer's
7liability to less than zero. If the amount of the credit or
8credits exceeds the taxpayer's liability, the excess may be
9carried forward and applied against the taxpayer's liability
10in succeeding calendar years in the manner provided under
11paragraph (4) of Section 211 of this Act. The credit or credits
12shall be applied to the earliest year for which there is a tax
13liability. If there are credits from more than one taxable
14year that are available to offset a liability, the earlier
15credit shall be applied first.
16    For partners, shareholders of Subchapter S corporations,
17and owners of limited liability companies, for taxable years
18ending before December 31, 2023, if the liability company is
19treated as a partnership for the purposes of federal and State
20income taxation, there shall be allowed a credit under this
21Section to be determined in accordance with the determination
22of income and distributive share of income under Sections 702
23and 704 and Subchapter S of the Internal Revenue Code. For
24taxable years ending on or after December 31, 2023, for
25partners and shareholders of Subchapter S corporations, the
26provisions of Section 251 shall apply with respect to the

 

 

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1credit under this subsection.
2    The total aggregate amount of credits awarded under the
3Blue Collar Jobs Act (Article 20 of Public Act 101-9) shall not
4exceed $20,000,000 in any State fiscal year.
5    This subsection (h-5) is exempt from the provisions of
6Section 250.
7    (i) Credit for Personal Property Tax Replacement Income
8Tax. For tax years ending prior to December 31, 2003, a credit
9shall be allowed against the tax imposed by subsections (a)
10and (b) of this Section for the tax imposed by subsections (c)
11and (d) of this Section. This credit shall be computed by
12multiplying the tax imposed by subsections (c) and (d) of this
13Section by a fraction, the numerator of which is base income
14allocable to Illinois and the denominator of which is Illinois
15base income, and further multiplying the product by the tax
16rate imposed by subsections (a) and (b) of this Section.
17    Any credit earned on or after December 31, 1986 under this
18subsection which is unused in the year the credit is computed
19because it exceeds the tax liability imposed by subsections
20(a) and (b) for that year (whether it exceeds the original
21liability or the liability as later amended) may be carried
22forward and applied to the tax liability imposed by
23subsections (a) and (b) of the 5 taxable years following the
24excess credit year, provided that no credit may be carried
25forward to any year ending on or after December 31, 2003. This
26credit shall be applied first to the earliest year for which

 

 

SB2047 Enrolled- 28 -LRB103 00133 HLH 45137 b

1there is a liability. If there is a credit under this
2subsection from more than one tax year that is available to
3offset a liability the earliest credit arising under this
4subsection shall be applied first.
5    If, during any taxable year ending on or after December
631, 1986, the tax imposed by subsections (c) and (d) of this
7Section for which a taxpayer has claimed a credit under this
8subsection (i) is reduced, the amount of credit for such tax
9shall also be reduced. Such reduction shall be determined by
10recomputing the credit to take into account the reduced tax
11imposed by subsections (c) and (d). If any portion of the
12reduced amount of credit has been carried to a different
13taxable year, an amended return shall be filed for such
14taxable year to reduce the amount of credit claimed.
15    (j) Training expense credit. Beginning with tax years
16ending on or after December 31, 1986 and prior to December 31,
172003, a taxpayer shall be allowed a credit against the tax
18imposed by subsections (a) and (b) under this Section for all
19amounts paid or accrued, on behalf of all persons employed by
20the taxpayer in Illinois or Illinois residents employed
21outside of Illinois by a taxpayer, for educational or
22vocational training in semi-technical or technical fields or
23semi-skilled or skilled fields, which were deducted from gross
24income in the computation of taxable income. The credit
25against the tax imposed by subsections (a) and (b) shall be
261.6% of such training expenses. For partners, shareholders of

 

 

SB2047 Enrolled- 29 -LRB103 00133 HLH 45137 b

1subchapter S corporations, and owners of limited liability
2companies, if the liability company is treated as a
3partnership for purposes of federal and State income taxation,
4for taxable years ending before December 31, 2023, there shall
5be allowed a credit under this subsection (j) to be determined
6in accordance with the determination of income and
7distributive share of income under Sections 702 and 704 and
8subchapter S of the Internal Revenue Code. For taxable years
9ending on or after December 31, 2023, for partners and
10shareholders of Subchapter S corporations, the provisions of
11Section 251 shall apply with respect to the credit under this
12subsection.
13    Any credit allowed under this subsection which is unused
14in the year the credit is earned may be carried forward to each
15of the 5 taxable years following the year for which the credit
16is first computed until it is used. This credit shall be
17applied first to the earliest year for which there is a
18liability. If there is a credit under this subsection from
19more than one tax year that is available to offset a liability,
20the earliest credit arising under this subsection shall be
21applied first. No carryforward credit may be claimed in any
22tax year ending on or after December 31, 2003.
23    (k) Research and development credit. For tax years ending
24after July 1, 1990 and prior to December 31, 2003, and
25beginning again for tax years ending on or after December 31,
262004, and ending prior to January 1, 2027, a taxpayer shall be

 

 

SB2047 Enrolled- 30 -LRB103 00133 HLH 45137 b

1allowed a credit against the tax imposed by subsections (a)
2and (b) of this Section for increasing research activities in
3this State. The credit allowed against the tax imposed by
4subsections (a) and (b) shall be equal to 6 1/2% of the
5qualifying expenditures for increasing research activities in
6this State. For partners, shareholders of subchapter S
7corporations, and owners of limited liability companies, if
8the liability company is treated as a partnership for purposes
9of federal and State income taxation, for taxable years ending
10before December 31, 2023, there shall be allowed a credit
11under this subsection to be determined in accordance with the
12determination of income and distributive share of income under
13Sections 702 and 704 and subchapter S of the Internal Revenue
14Code. For taxable years ending on or after December 31, 2023,
15for partners and shareholders of Subchapter S corporations,
16the provisions of Section 251 shall apply with respect to the
17credit under this subsection.
18    For purposes of this subsection, "qualifying expenditures"
19means the qualifying expenditures as defined for the federal
20credit for increasing research activities which would be
21allowable under Section 41 of the Internal Revenue Code and
22which are conducted in this State, "qualifying expenditures
23for increasing research activities in this State" means the
24excess of qualifying expenditures for the taxable year in
25which incurred over qualifying expenditures for the base
26period, "qualifying expenditures for the base period" means

 

 

SB2047 Enrolled- 31 -LRB103 00133 HLH 45137 b

1the average of the qualifying expenditures for each year in
2the base period, and "base period" means the 3 taxable years
3immediately preceding the taxable year for which the
4determination is being made.
5    Any credit in excess of the tax liability for the taxable
6year may be carried forward. A taxpayer may elect to have the
7unused credit shown on its final completed return carried over
8as a credit against the tax liability for the following 5
9taxable years or until it has been fully used, whichever
10occurs first; provided that no credit earned in a tax year
11ending prior to December 31, 2003 may be carried forward to any
12year ending on or after December 31, 2003.
13    If an unused credit is carried forward to a given year from
142 or more earlier years, that credit arising in the earliest
15year will be applied first against the tax liability for the
16given year. If a tax liability for the given year still
17remains, the credit from the next earliest year will then be
18applied, and so on, until all credits have been used or no tax
19liability for the given year remains. Any remaining unused
20credit or credits then will be carried forward to the next
21following year in which a tax liability is incurred, except
22that no credit can be carried forward to a year which is more
23than 5 years after the year in which the expense for which the
24credit is given was incurred.
25    No inference shall be drawn from Public Act 91-644 in
26construing this Section for taxable years beginning before

 

 

SB2047 Enrolled- 32 -LRB103 00133 HLH 45137 b

1January 1, 1999.
2    It is the intent of the General Assembly that the research
3and development credit under this subsection (k) shall apply
4continuously for all tax years ending on or after December 31,
52004 and ending prior to January 1, 2027, including, but not
6limited to, the period beginning on January 1, 2016 and ending
7on July 6, 2017 (the effective date of Public Act 100-22). All
8actions taken in reliance on the continuation of the credit
9under this subsection (k) by any taxpayer are hereby
10validated.
11    (l) Environmental Remediation Tax Credit.
12        (i) For tax years ending after December 31, 1997 and
13    on or before December 31, 2001, a taxpayer shall be
14    allowed a credit against the tax imposed by subsections
15    (a) and (b) of this Section for certain amounts paid for
16    unreimbursed eligible remediation costs, as specified in
17    this subsection. For purposes of this Section,
18    "unreimbursed eligible remediation costs" means costs
19    approved by the Illinois Environmental Protection Agency
20    ("Agency") under Section 58.14 of the Environmental
21    Protection Act that were paid in performing environmental
22    remediation at a site for which a No Further Remediation
23    Letter was issued by the Agency and recorded under Section
24    58.10 of the Environmental Protection Act. The credit must
25    be claimed for the taxable year in which Agency approval
26    of the eligible remediation costs is granted. The credit

 

 

SB2047 Enrolled- 33 -LRB103 00133 HLH 45137 b

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

 

 

SB2047 Enrolled- 34 -LRB103 00133 HLH 45137 b

1    with a maximum total of $150,000 per site. For partners
2    and shareholders of subchapter S corporations, there shall
3    be allowed a credit under this subsection to be determined
4    in accordance with the determination of income and
5    distributive share of income under Sections 702 and 704
6    and subchapter S of the Internal Revenue Code.
7        (ii) A credit allowed under this subsection that is
8    unused in the year the credit is earned may be carried
9    forward to each of the 5 taxable years following the year
10    for which the credit is first earned until it is used. The
11    term "unused credit" does not include any amounts of
12    unreimbursed eligible remediation costs in excess of the
13    maximum credit per site authorized under paragraph (i).
14    This credit shall be applied first to the earliest year
15    for which there is a liability. If there is a credit under
16    this subsection from more than one tax year that is
17    available to offset a liability, the earliest credit
18    arising under this subsection shall be applied first. A
19    credit allowed under this subsection may be sold to a
20    buyer as part of a sale of all or part of the remediation
21    site for which the credit was granted. The purchaser of a
22    remediation site and the tax credit shall succeed to the
23    unused credit and remaining carry-forward period of the
24    seller. To perfect the transfer, the assignor shall record
25    the transfer in the chain of title for the site and provide
26    written notice to the Director of the Illinois Department

 

 

SB2047 Enrolled- 35 -LRB103 00133 HLH 45137 b

1    of Revenue of the assignor's intent to sell the
2    remediation site and the amount of the tax credit to be
3    transferred as a portion of the sale. In no event may a
4    credit be transferred to any taxpayer if the taxpayer or a
5    related party would not be eligible under the provisions
6    of subsection (i).
7        (iii) For purposes of this Section, the term "site"
8    shall have the same meaning as under Section 58.2 of the
9    Environmental Protection Act.
10    (m) Education expense credit. Beginning with tax years
11ending after December 31, 1999, a taxpayer who is the
12custodian of one or more qualifying pupils shall be allowed a
13credit against the tax imposed by subsections (a) and (b) of
14this Section for qualified education expenses incurred on
15behalf of the qualifying pupils. The credit shall be equal to
1625% of qualified education expenses, but in no event may the
17total credit under this subsection claimed by a family that is
18the custodian of qualifying pupils exceed (i) $500 for tax
19years ending prior to December 31, 2017, and (ii) $750 for tax
20years ending on or after December 31, 2017. In no event shall a
21credit under this subsection reduce the taxpayer's liability
22under this Act to less than zero. Notwithstanding any other
23provision of law, for taxable years beginning on or after
24January 1, 2017, no taxpayer may claim a credit under this
25subsection (m) if the taxpayer's adjusted gross income for the
26taxable year exceeds (i) $500,000, in the case of spouses

 

 

SB2047 Enrolled- 36 -LRB103 00133 HLH 45137 b

1filing a joint federal tax return or (ii) $250,000, in the case
2of all other taxpayers. This subsection is exempt from the
3provisions of Section 250 of this Act.
4    For purposes of this subsection:
5    "Qualifying pupils" means individuals who (i) are
6residents of the State of Illinois, (ii) are under the age of
721 at the close of the school year for which a credit is
8sought, and (iii) during the school year for which a credit is
9sought were full-time pupils enrolled in a kindergarten
10through twelfth grade education program at any school, as
11defined in this subsection.
12    "Qualified education expense" means the amount incurred on
13behalf of a qualifying pupil in excess of $250 for tuition,
14book fees, and lab fees at the school in which the pupil is
15enrolled during the regular school year.
16    "School" means any public or nonpublic elementary or
17secondary school in Illinois that is in compliance with Title
18VI of the Civil Rights Act of 1964 and attendance at which
19satisfies the requirements of Section 26-1 of the School Code,
20except that nothing shall be construed to require a child to
21attend any particular public or nonpublic school to qualify
22for the credit under this Section.
23    "Custodian" means, with respect to qualifying pupils, an
24Illinois resident who is a parent, the parents, a legal
25guardian, or the legal guardians of the qualifying pupils.
26    (n) River Edge Redevelopment Zone site remediation tax

 

 

SB2047 Enrolled- 37 -LRB103 00133 HLH 45137 b

1credit.
2        (i) For tax years ending on or after December 31,
3    2006, a taxpayer shall be allowed a credit against the tax
4    imposed by subsections (a) and (b) of this Section for
5    certain amounts paid for unreimbursed eligible remediation
6    costs, as specified in this subsection. For purposes of
7    this Section, "unreimbursed eligible remediation costs"
8    means costs approved by the Illinois Environmental
9    Protection Agency ("Agency") under Section 58.14a of the
10    Environmental Protection Act that were paid in performing
11    environmental remediation at a site within a River Edge
12    Redevelopment Zone for which a No Further Remediation
13    Letter was issued by the Agency and recorded under Section
14    58.10 of the Environmental Protection Act. The credit must
15    be claimed for the taxable year in which Agency approval
16    of the eligible remediation costs is granted. The credit
17    is not available to any taxpayer if the taxpayer or any
18    related party caused or contributed to, in any material
19    respect, a release of regulated substances on, in, or
20    under the site that was identified and addressed by the
21    remedial action pursuant to the Site Remediation Program
22    of the Environmental Protection Act. Determinations as to
23    credit availability for purposes of this Section shall be
24    made consistent with rules adopted by the Pollution
25    Control Board pursuant to the Illinois Administrative
26    Procedure Act for the administration and enforcement of

 

 

SB2047 Enrolled- 38 -LRB103 00133 HLH 45137 b

1    Section 58.9 of the Environmental Protection Act. For
2    purposes of this Section, "taxpayer" includes a person
3    whose tax attributes the taxpayer has succeeded to under
4    Section 381 of the Internal Revenue Code and "related
5    party" includes the persons disallowed a deduction for
6    losses by paragraphs (b), (c), and (f)(1) of Section 267
7    of the Internal Revenue Code by virtue of being a related
8    taxpayer, as well as any of its partners. The credit
9    allowed against the tax imposed by subsections (a) and (b)
10    shall be equal to 25% of the unreimbursed eligible
11    remediation costs in excess of $100,000 per site.
12        (ii) A credit allowed under this subsection that is
13    unused in the year the credit is earned may be carried
14    forward to each of the 5 taxable years following the year
15    for which the credit is first earned until it is used. This
16    credit shall be applied first to the earliest year for
17    which there is a liability. If there is a credit under this
18    subsection from more than one tax year that is available
19    to offset a liability, the earliest credit arising under
20    this subsection shall be applied first. A credit allowed
21    under this subsection may be sold to a buyer as part of a
22    sale of all or part of the remediation site for which the
23    credit was granted. The purchaser of a remediation site
24    and the tax credit shall succeed to the unused credit and
25    remaining carry-forward period of the seller. To perfect
26    the transfer, the assignor shall record the transfer in

 

 

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

 

 

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

 

 

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1    transaction in accordance with Section 351 of the Internal
2    Revenue Code in which no gain or loss is recognized.
3    (p) Pass-through entity tax.
4        (1) For taxable years ending on or after December 31,
5    2021 and beginning prior to January 1, 2026, a partnership
6    (other than a publicly traded partnership under Section
7    7704 of the Internal Revenue Code) or Subchapter S
8    corporation may elect to apply the provisions of this
9    subsection. A separate election shall be made for each
10    taxable year. Such election shall be made at such time,
11    and in such form and manner as prescribed by the
12    Department, and, once made, is irrevocable.
13        (2) Entity-level tax. A partnership or Subchapter S
14    corporation electing to apply the provisions of this
15    subsection shall be subject to a tax for the privilege of
16    earning or receiving income in this State in an amount
17    equal to 4.95% of the taxpayer's net income for the
18    taxable year.
19        (3) Net income defined.
20            (A) In general. For purposes of paragraph (2), the
21        term net income has the same meaning as defined in
22        Section 202 of this Act, except that the following
23        provisions shall not apply:
24                (i) the standard exemption allowed under
25            Section 204;
26                (ii) the deduction for net losses allowed

 

 

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1            under Section 207;
2                (iii) in the case of an S corporation, the
3            modification under Section 203(b)(2)(S); and
4                (iv) in the case of a partnership, the
5            modifications under Section 203(d)(2)(H) and
6            Section 203(d)(2)(I).
7            (B) Special rule for tiered partnerships. If a
8        taxpayer making the election under paragraph (1) is a
9        partner of another taxpayer making the election under
10        paragraph (1), net income shall be computed as
11        provided in subparagraph (A), except that the taxpayer
12        shall subtract its distributive share of the net
13        income of the electing partnership (including its
14        distributive share of the net income of the electing
15        partnership derived as a distributive share from
16        electing partnerships in which it is a partner).
17        (4) Credit for entity level tax. Each partner or
18    shareholder of a taxpayer making the election under this
19    Section shall be allowed a credit against the tax imposed
20    under subsections (a) and (b) of Section 201 of this Act
21    for the taxable year of the partnership or Subchapter S
22    corporation for which an election is in effect ending
23    within or with the taxable year of the partner or
24    shareholder in an amount equal to 4.95% times the partner
25    or shareholder's distributive share of the net income of
26    the electing partnership or Subchapter S corporation, but

 

 

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

 

 

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

 

 

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1    considered tax paid by the partner or shareholder to the
2    extent that the partner's or shareholder's share of the
3    income of the partnership or Subchapter S corporation
4    allocated and apportioned to such other state bears to the
5    total income of the partnership or Subchapter S
6    corporation allocated or apportioned to such other state.
7        (8) Suspension of withholding. The provisions of
8    Section 709.5 of this Act shall not apply to a partnership
9    or Subchapter S corporation for the taxable year for which
10    an election under paragraph (1) is in effect.
11        (9) Requirement to pay estimated tax. For each taxable
12    year for which an election under paragraph (1) is in
13    effect, a partnership or Subchapter S corporation is
14    required to pay estimated tax for such taxable year under
15    Sections 803 and 804 of this Act if the amount payable as
16    estimated tax can reasonably be expected to exceed $500.
17        (10) The provisions of this subsection shall apply
18    only with respect to taxable years for which the
19    limitation on individual deductions applies under Section
20    164(b)(6) of the Internal Revenue Code.
21(Source: P.A. 101-9, eff. 6-5-19; 101-31, eff. 6-28-19;
22101-207, eff. 8-2-19; 101-363, eff. 8-9-19; 102-558, eff.
238-20-21; 102-658, eff. 8-27-21.)
 
24    (35 ILCS 5/214)
25    Sec. 214. Tax credit for affordable housing donations.

 

 

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1    (a) Beginning with taxable years ending on or after
2December 31, 2001 and until the taxable year ending on
3December 31, 2026, a taxpayer who makes a donation under
4Section 7.28 of the Illinois Housing Development Act is
5entitled to a credit against the tax imposed by subsections
6(a) and (b) of Section 201 in an amount equal to 50% of the
7value of the donation. For taxable years ending before
8December 31, 2023, partners Partners, shareholders of
9subchapter S corporations, and owners of limited liability
10companies (if the limited liability company is treated as a
11partnership for purposes of federal and State income taxation)
12are entitled to a credit under this Section to be determined in
13accordance with the determination of income and distributive
14share of income under Sections 702 and 703 and subchapter S of
15the Internal Revenue Code. For taxable years ending on or
16after December 31, 2023, partners and shareholders of
17subchapter S corporations are entitled to a credit under this
18Section as provided in Section 251. Persons or entities not
19subject to the tax imposed by subsections (a) and (b) of
20Section 201 and who make a donation under Section 7.28 of the
21Illinois Housing Development Act are entitled to a credit as
22described in this subsection and may transfer that credit as
23described in subsection (c).
24    (b) If the amount of the credit exceeds the tax liability
25for the year, the excess may be carried forward and applied to
26the tax liability of the 5 taxable years following the excess

 

 

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1credit year. The tax credit shall be applied to the earliest
2year for which there is a tax liability. If there are credits
3for more than one year that are available to offset a
4liability, the earlier credit shall be applied first.
5    (c) The transfer of the tax credit allowed under this
6Section may be made (i) to the purchaser of land that has been
7designated solely for affordable housing projects in
8accordance with the Illinois Housing Development Act or (ii)
9to another donor who has also made a donation in accordance
10with Section 7.28 of the Illinois Housing Development Act.
11    (d) A taxpayer claiming the credit provided by this
12Section must maintain and record any information that the
13Department may require by regulation regarding the project for
14which the credit is claimed. When claiming the credit provided
15by this Section, the taxpayer must provide information
16regarding the taxpayer's donation to the project under the
17Illinois Housing Development Act.
18(Source: P.A. 102-16, eff. 6-17-21; 102-175, eff. 7-29-21.)
 
19    (35 ILCS 5/216)
20    Sec. 216. Credit for wages paid to ex-felons.
21    (a) For each taxable year beginning on or after January 1,
222007, each taxpayer is entitled to a credit against the tax
23imposed by subsections (a) and (b) of Section 201 of this Act
24in an amount equal to 5% of qualified wages paid by the
25taxpayer during the taxable year to one or more Illinois

 

 

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1residents who are qualified ex-offenders. The total credit
2allowed to a taxpayer with respect to each qualified
3ex-offender may not exceed $1,500 for all taxable years. For
4taxable years ending before December 31, 2023, for For
5partners, shareholders of Subchapter S corporations, and
6owners of limited liability companies, if the liability
7company is treated as a partnership for purposes of federal
8and State income taxation, there shall be allowed a credit
9under this Section to be determined in accordance with the
10determination of income and distributive share of income under
11Sections 702 and 704 and Subchapter S of the Internal Revenue
12Code. For taxable years ending on or after December 31, 2023,
13partners and shareholders of subchapter S corporations are
14entitled to a credit under this Section as provided in Section
15251.
16    (b) For purposes of this Section, "qualified wages":
17        (1) includes only wages that are subject to federal
18    unemployment tax under Section 3306 of the Internal
19    Revenue Code, without regard to any dollar limitation
20    contained in that Section;
21        (2) does not include any amounts paid or incurred by
22    an employer for any period to any qualified ex-offender
23    for whom the employer receives federally funded payments
24    for on-the-job training of that qualified ex-offender for
25    that period; and
26        (3) includes only wages attributable to service

 

 

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1    rendered during the one-year period beginning with the day
2    the qualified ex-offender begins work for the employer.
3    If the taxpayer has received any payment from a program
4established under Section 482(e)(1) of the federal Social
5Security Act with respect to a qualified ex-offender, then,
6for purposes of calculating the credit under this Section, the
7amount of the qualified wages paid to that qualified
8ex-offender must be reduced by the amount of the payment.
9    (c) For purposes of this Section, "qualified ex-offender"
10means any person who:
11        (1) has been convicted of a crime in this State or of
12    an offense in any other jurisdiction, not including any
13    offense or attempted offense that would subject a person
14    to registration under the Sex Offender Registration Act;
15        (2) was sentenced to a period of incarceration in an
16    Illinois adult correctional center; and
17        (3) was hired by the taxpayer within 3 years after
18    being released from an Illinois adult correctional center.
19    (d) In no event shall a credit under this Section reduce
20the taxpayer's liability to less than zero. If the amount of
21the credit exceeds the tax liability for the year, the excess
22may be carried forward and applied to the tax liability of the
235 taxable years following the excess credit year. The tax
24credit shall be applied to the earliest year for which there is
25a tax liability. If there are credits for more than one year
26that are available to offset a liability, the earlier credit

 

 

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1shall be applied first.
2    (e) This Section is exempt from the provisions of Section
3250.
4(Source: P.A. 98-165, eff. 8-5-13.)
 
5    (35 ILCS 5/218)
6    Sec. 218. Credit for student-assistance contributions.
7    (a) For taxable years ending on or after December 31, 2009
8and on or before December 31, 2024, each taxpayer who, during
9the taxable year, makes a contribution (i) to a specified
10individual College Savings Pool Account under Section 16.5 of
11the State Treasurer Act or (ii) to the Illinois Prepaid
12Tuition Trust Fund in an amount matching a contribution made
13in the same taxable year by an employee of the taxpayer to that
14Account or Fund is entitled to a credit against the tax imposed
15under subsections (a) and (b) of Section 201 in an amount equal
16to 25% of that matching contribution, but not to exceed $500
17per contributing employee per taxable year.
18    (b) For taxable years ending before December 31, 2023, for
19For partners, shareholders of Subchapter S corporations, and
20owners of limited liability companies, if the liability
21company is treated as a partnership for purposes of federal
22and State income taxation, there is allowed a credit under
23this Section to be determined in accordance with the
24determination of income and distributive share of income under
25Sections 702 and 704 and Subchapter S of the Internal Revenue

 

 

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1Code. For taxable years ending on or after December 31, 2023,
2partners and shareholders of subchapter S corporations are
3entitled to a credit under this Section as provided in Section
4251.
5    (c) The credit may not be carried back. If the amount of
6the credit exceeds the tax liability for the year, the excess
7may be carried forward and applied to the tax liability of the
85 taxable years following the excess credit year. The tax
9credit shall be applied to the earliest year for which there is
10a tax liability. If there are credits for more than one year
11that are available to offset a liability, the earlier credit
12shall be applied first.
13    (d) A taxpayer claiming the credit under this Section must
14maintain and record any information that the Illinois Student
15Assistance Commission, the Office of the State Treasurer, or
16the Department may require regarding the matching contribution
17for which the credit is claimed.
18(Source: P.A. 101-645, eff. 6-26-20; 102-289, eff. 8-6-21.)
 
19    (35 ILCS 5/222)
20    Sec. 222. Live theater production credit.
21    (a) For tax years beginning on or after January 1, 2012 and
22beginning prior to January 1, 2027, a taxpayer who has
23received a tax credit award under the Live Theater Production
24Tax Credit Act is entitled to a credit against the taxes
25imposed under subsections (a) and (b) of Section 201 of this

 

 

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1Act in an amount determined under that Act by the Department of
2Commerce and Economic Opportunity.
3    (b) For taxable years ending before December 31, 2023, if
4If the taxpayer is a partnership, limited liability
5partnership, limited liability company, or Subchapter S
6corporation, the tax credit award is allowed to the partners,
7unit holders, or shareholders in accordance with the
8determination of income and distributive share of income under
9Sections 702 and 704 and Subchapter S of the Internal Revenue
10Code. For taxable years ending on or after December 31, 2023,
11if the taxpayer is a partnership or Subchapter S corporation,
12then the provisions of Section 251 apply.
13    (c) A sale, assignment, or transfer of the tax credit
14award may be made by the taxpayer earning the credit within one
15year after the credit is awarded in accordance with rules
16adopted by the Department of Commerce and Economic
17Opportunity.
18    (d) The Department of Revenue, in cooperation with the
19Department of Commerce and Economic Opportunity, shall adopt
20rules to enforce and administer the provisions of this
21Section.
22    (e) The tax credit award may not be carried back. If the
23amount of the credit exceeds the tax liability for the year,
24the excess may be carried forward and applied to the tax
25liability of the 5 tax years following the excess credit year.
26The tax credit award shall be applied to the earliest year for

 

 

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1which there is a tax liability. If there are credits from more
2than one tax year that are available to offset liability, the
3earlier credit shall be applied first. In no event may a credit
4under this Section reduce the taxpayer's liability to less
5than zero.
6(Source: P.A. 102-16, eff. 6-17-21.)
 
7    (35 ILCS 5/224)
8    Sec. 224. Invest in Kids credit.
9    (a) For taxable years beginning on or after January 1,
102018 and ending before January 1, 2024, each taxpayer for whom
11a tax credit has been awarded by the Department under the
12Invest in Kids Act is entitled to a credit against the tax
13imposed under subsections (a) and (b) of Section 201 of this
14Act in an amount equal to the amount awarded under the Invest
15in Kids Act.
16    (b) For taxable years ending before December 31, 2023, for
17For partners, shareholders of subchapter S corporations, and
18owners of limited liability companies, if the liability
19company is treated as a partnership for purposes of federal
20and State income taxation, the credit under this Section shall
21be determined in accordance with the determination of income
22and distributive share of income under Sections 702 and 704
23and subchapter S of the Internal Revenue Code. For taxable
24years ending on or after December 31, 2023, partners and
25shareholders of subchapter S corporations are entitled to a

 

 

SB2047 Enrolled- 54 -LRB103 00133 HLH 45137 b

1credit under this Section as provided in Section 251.
2    (c) The credit may not be carried back and may not reduce
3the taxpayer's liability to less than zero. If the amount of
4the credit exceeds the tax liability for the year, the excess
5may be carried forward and applied to the tax liability of the
65 taxable years following the excess credit year. The tax
7credit shall be applied to the earliest year for which there is
8a tax liability. If there are credits for more than one year
9that are available to offset the liability, the earlier credit
10shall be applied first.
11    (d) A tax credit awarded by the Department under the
12Invest in Kids Act may not be claimed for any qualified
13contribution for which the taxpayer claims a federal income
14tax deduction.
15(Source: P.A. 102-699, eff. 4-19-22.)
 
16    (35 ILCS 5/228)
17    Sec. 228. Historic preservation credit. For tax years
18beginning on or after January 1, 2019 and ending on or before
19December 31, 2023, a taxpayer who qualifies for a credit under
20the Historic Preservation Tax Credit Act is entitled to a
21credit against the taxes imposed under subsections (a) and (b)
22of Section 201 of this Act as provided in that Act. For taxable
23years ending before December 31, 2023, if If the taxpayer is a
24partnership, Subchapter S corporation, or a limited liability
25company the credit shall be allowed to the partners,

 

 

SB2047 Enrolled- 55 -LRB103 00133 HLH 45137 b

1shareholders, or members in accordance with the determination
2of income and distributive share of income under Sections 702
3and 704 and Subchapter S of the Internal Revenue Code provided
4that credits granted to a partnership, a limited liability
5company taxed as a partnership, or other multiple owners of
6property shall be passed through to the partners, members, or
7owners respectively on a pro rata basis or pursuant to an
8executed agreement among the partners, members, or owners
9documenting any alternate distribution method. For taxable
10years ending on or after December 31, 2023, if the taxpayer is
11a partnership or a Subchapter S corporation, then the
12provisions of Section 251 apply. If the amount of any tax
13credit awarded under this Section exceeds the qualified
14taxpayer's income tax liability for the year in which the
15qualified rehabilitation plan was placed in service, the
16excess amount may be carried forward as provided in the
17Historic Preservation Tax Credit Act.
18(Source: P.A. 101-81, eff. 7-12-19; 102-741, eff. 5-6-22.)
 
19    (35 ILCS 5/229)
20    Sec. 229. Data center construction employment tax credit.
21    (a) A taxpayer who has been awarded a credit by the
22Department of Commerce and Economic Opportunity under Section
23605-1025 of the Department of Commerce and Economic
24Opportunity Law of the Civil Administrative Code of Illinois
25is entitled to a credit against the taxes imposed under

 

 

SB2047 Enrolled- 56 -LRB103 00133 HLH 45137 b

1subsections (a) and (b) of Section 201 of this Act. The amount
2of the credit shall be 20% of the wages paid during the taxable
3year to a full-time or part-time employee of a construction
4contractor employed by a certified data center if those wages
5are paid for the construction of a new data center in a
6geographic area that meets any one of the following criteria:
7        (1) the area has a poverty rate of at least 20%,
8    according to the U.S. Census Bureau American Community
9    Survey 5-Year Estimates;
10        (2) 75% or more of the children in the area
11    participate in the federal free lunch program, according
12    to reported statistics from the State Board of Education;
13        (3) 20% or more of the households in the area receive
14    assistance under the Supplemental Nutrition Assistance
15    Program (SNAP), according to data from the U.S. Census
16    Bureau American Community Survey 5-year Estimates; or
17        (4) the area has an average unemployment rate, as
18    determined by the Department of Employment Security, that
19    is more than 120% of the national unemployment average, as
20    determined by the U.S. Department of Labor, for a period
21    of at least 2 consecutive calendar years preceding the
22    date of the application.
23    For taxable years ending before December 31, 2023, if If
24the taxpayer is a partnership, a Subchapter S corporation, or
25a limited liability company that has elected partnership tax
26treatment, the credit shall be allowed to the partners,

 

 

SB2047 Enrolled- 57 -LRB103 00133 HLH 45137 b

1shareholders, or members in accordance with the determination
2of income and distributive share of income under Sections 702
3and 704 and subchapter S of the Internal Revenue Code, as
4applicable. For taxable years ending on or after December 31,
52023, if the taxpayer is a partnership or a Subchapter S
6corporation, then the provisions of Section 251 apply. The
7Department, in cooperation with the Department of Commerce and
8Economic Opportunity, shall adopt rules to enforce and
9administer this Section. This Section is exempt from the
10provisions of Section 250 of this Act.
11    (b) In no event shall a credit under this Section reduce
12the taxpayer's liability to less than zero. If the amount of
13the credit exceeds the tax liability for the year, the excess
14may be carried forward and applied to the tax liability of the
155 taxable years following the excess credit year. The tax
16credit shall be applied to the earliest year for which there is
17a tax liability. If there are credits for more than one year
18that are available to offset a liability, the earlier credit
19shall be applied first.
20    (c) No credit shall be allowed with respect to any
21certification for any taxable year ending after the revocation
22of the certification by the Department of Commerce and
23Economic Opportunity. Upon receiving notification by the
24Department of Commerce and Economic Opportunity of the
25revocation of certification, the Department shall notify the
26taxpayer that no credit is allowed for any taxable year ending

 

 

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1after the revocation date, as stated in such notification. If
2any credit has been allowed with respect to a certification
3for a taxable year ending after the revocation date, any
4refund paid to the taxpayer for that taxable year shall, to the
5extent of that credit allowed, be an erroneous refund within
6the meaning of Section 912 of this Act.
7(Source: P.A. 101-31, eff. 6-28-19; 101-604, eff. 12-13-19;
8102-558, eff. 8-20-21.)
 
9    (35 ILCS 5/231)
10    Sec. 231. Apprenticeship education expense credit.
11    (a) As used in this Section:
12    "Department" means the Department of Commerce and Economic
13Opportunity.
14    "Employer" means an Illinois taxpayer who is the employer
15of the qualifying apprentice.
16    "Qualifying apprentice" means an individual who: (i) is a
17resident of the State of Illinois; (ii) is at least 16 years
18old at the close of the school year for which a credit is
19sought; (iii) during the school year for which a credit is
20sought, was a full-time apprentice enrolled in an
21apprenticeship program which is registered with the United
22States Department of Labor, Office of Apprenticeship; and (iv)
23is employed in Illinois by the taxpayer who is the employer.
24    "Qualified education expense" means the amount incurred on
25behalf of a qualifying apprentice not to exceed $3,500 for

 

 

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1tuition, book fees, and lab fees at the school or community
2college in which the apprentice is enrolled during the regular
3school year.
4    "School" means any public or nonpublic secondary school in
5Illinois that is: (i) an institution of higher education that
6provides a program that leads to an industry-recognized
7postsecondary credential or degree; (ii) an entity that
8carries out programs registered under the federal National
9Apprenticeship Act; or (iii) another public or private
10provider of a program of training services, which may include
11a joint labor-management organization.
12    (b) For taxable years beginning on or after January 1,
132020, and beginning on or before January 1, 2025, the employer
14of one or more qualifying apprentices shall be allowed a
15credit against the tax imposed by subsections (a) and (b) of
16Section 201 of the Illinois Income Tax Act for qualified
17education expenses incurred on behalf of a qualifying
18apprentice. The credit shall be equal to 100% of the qualified
19education expenses, but in no event may the total credit
20amount awarded to a single taxpayer in a single taxable year
21exceed $3,500 per qualifying apprentice. A taxpayer shall be
22entitled to an additional $1,500 credit against the tax
23imposed by subsections (a) and (b) of Section 201 of the
24Illinois Income Tax Act if (i) the qualifying apprentice
25resides in an underserved area as defined in Section 5-5 of the
26Economic Development for a Growing Economy Tax Credit Act

 

 

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1during the school year for which a credit is sought by an
2employer or (ii) the employer's principal place of business is
3located in an underserved area, as defined in Section 5-5 of
4the Economic Development for a Growing Economy Tax Credit Act.
5In no event shall a credit under this Section reduce the
6taxpayer's liability under this Act to less than zero. For
7taxable years ending before December 31, 2023, for For
8partners, shareholders of Subchapter S corporations, and
9owners of limited liability companies, if the liability
10company is treated as a partnership for purposes of federal
11and State income taxation, there shall be allowed a credit
12under this Section to be determined in accordance with the
13determination of income and distributive share of income under
14Sections 702 and 704 and Subchapter S of the Internal Revenue
15Code. For taxable years ending on or after December 31, 2023,
16partners and shareholders of subchapter S corporations are
17entitled to a credit under this Section as provided in Section
18251.
19    (c) The Department shall implement a program to certify
20applicants for an apprenticeship credit under this Section.
21Upon satisfactory review, the Department shall issue a tax
22credit certificate to an employer incurring costs on behalf of
23a qualifying apprentice stating the amount of the tax credit
24to which the employer is entitled. If the employer is seeking a
25tax credit for multiple qualifying apprentices, the Department
26may issue a single tax credit certificate that encompasses the

 

 

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1aggregate total of tax credits for qualifying apprentices for
2a single employer.
3    (d) The Department, in addition to those powers granted
4under the Civil Administrative Code of Illinois, is granted
5and shall have all the powers necessary or convenient to carry
6out and effectuate the purposes and provisions of this
7Section, including, but not limited to, power and authority
8to:
9        (1) Adopt rules deemed necessary and appropriate for
10    the administration of this Section; establish forms for
11    applications, notifications, contracts, or any other
12    agreements; and accept applications at any time during the
13    year and require that all applications be submitted via
14    the Internet. The Department shall require that
15    applications be submitted in electronic form.
16        (2) Provide guidance and assistance to applicants
17    pursuant to the provisions of this Section and cooperate
18    with applicants to promote, foster, and support job
19    creation within the State.
20        (3) Enter into agreements and memoranda of
21    understanding for participation of and engage in
22    cooperation with agencies of the federal government, units
23    of local government, universities, research foundations or
24    institutions, regional economic development corporations,
25    or other organizations for the purposes of this Section.
26        (4) Gather information and conduct inquiries, in the

 

 

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1    manner and by the methods it deems desirable, including,
2    without limitation, gathering information with respect to
3    applicants for the purpose of making any designations or
4    certifications necessary or desirable or to gather
5    information in furtherance of the purposes of this Act.
6        (5) Establish, negotiate, and effectuate any term,
7    agreement, or other document with any person necessary or
8    appropriate to accomplish the purposes of this Section,
9    and consent, subject to the provisions of any agreement
10    with another party, to the modification or restructuring
11    of any agreement to which the Department is a party.
12        (6) Provide for sufficient personnel to permit
13    administration, staffing, operation, and related support
14    required to adequately discharge its duties and
15    responsibilities described in this Section from funds made
16    available through charges to applicants or from funds as
17    may be appropriated by the General Assembly for the
18    administration of this Section.
19        (7) Require applicants, upon written request, to issue
20    any necessary authorization to the appropriate federal,
21    State, or local authority or any other person for the
22    release to the Department of information requested by the
23    Department, including, but not be limited to, financial
24    reports, returns, or records relating to the applicant or
25    to the amount of credit allowable under this Section.
26        (8) Require that an applicant shall, at all times,

 

 

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1    keep proper books of record and account in accordance with
2    generally accepted accounting principles consistently
3    applied, with the books, records, or papers related to the
4    agreement in the custody or control of the applicant open
5    for reasonable Department inspection and audits,
6    including, without limitation, the making of copies of the
7    books, records, or papers.
8        (9) Take whatever actions are necessary or appropriate
9    to protect the State's interest in the event of
10    bankruptcy, default, foreclosure, or noncompliance with
11    the terms and conditions of financial assistance or
12    participation required under this Section or any agreement
13    entered into under this Section, including the power to
14    sell, dispose of, lease, or rent, upon terms and
15    conditions determined by the Department to be appropriate,
16    real or personal property that the Department may recover
17    as a result of these actions.
18    (e) The Department, in consultation with the Department of
19Revenue, shall adopt rules to administer this Section. The
20aggregate amount of the tax credits that may be claimed under
21this Section for qualified education expenses incurred by an
22employer on behalf of a qualifying apprentice shall be limited
23to $5,000,000 per calendar year. If applications for a greater
24amount are received, credits shall be allowed on a first-come
25first-served basis, based on the date on which each properly
26completed application for a certificate of eligibility is

 

 

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1received by the Department. If more than one certificate is
2received on the same day, the credits will be awarded based on
3the time of submission for that particular day.
4    (f) An employer may not sell or otherwise transfer a
5credit awarded under this Section to another person or
6taxpayer.
7    (g) The employer shall provide the Department such
8information as the Department may require, including but not
9limited to: (i) the name, age, and taxpayer identification
10number of each qualifying apprentice employed by the taxpayer
11during the taxable year; (ii) the amount of qualified
12education expenses incurred with respect to each qualifying
13apprentice; and (iii) the name of the school at which the
14qualifying apprentice is enrolled and the qualified education
15expenses are incurred.
16    (h) On or before July 1 of each year, the Department shall
17report to the Governor and the General Assembly on the tax
18credit certificates awarded under this Section for the prior
19calendar year. The report must include:
20        (1) the name of each employer awarded or allocated a
21    credit;
22        (2) the number of qualifying apprentices for whom the
23    employer has incurred qualified education expenses;
24        (3) the North American Industry Classification System
25    (NAICS) code applicable to each employer awarded or
26    allocated a credit;

 

 

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1        (4) the amount of the credit awarded or allocated to
2    each employer;
3        (5) the total number of employers awarded or allocated
4    a credit;
5        (6) the total number of qualifying apprentices for
6    whom employers receiving credits under this Section
7    incurred qualified education expenses; and
8        (7) the average cost to the employer of all
9    apprenticeships receiving credits under this Section.
10(Source: P.A. 101-207, eff. 8-2-19; 102-558, eff. 8-20-21.)
 
11    (35 ILCS 5/237)
12    Sec. 237. REV Illinois Investment Tax credits.
13    (a) For tax years beginning on or after the effective date
14of this amendatory Act of the 102nd General Assembly, a
15taxpayer shall be allowed a credit against the tax imposed by
16subsections (a) and (b) of Section 201 for investment in
17qualified property which is placed in service at the site of a
18REV Illinois Project subject to an agreement between the
19taxpayer and the Department of Commerce and Economic
20Opportunity pursuant to the Reimagining Electric Vehicles in
21Illinois Act. For taxable years ending before December 31,
222023, for For partners, shareholders of Subchapter S
23corporations, and owners of limited liability companies, if
24the liability company is treated as a partnership for purposes
25of federal and State income taxation, there shall be allowed a

 

 

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1credit under this Section to be determined in accordance with
2the determination of income and distributive share of income
3under Sections 702 and 704 and Subchapter S of the Internal
4Revenue Code. For taxable years ending on or after December
531, 2023, partners and shareholders of subchapter S
6corporations are entitled to a credit under this Section as
7provided in Section 251. The credit shall be 0.5% of the basis
8for such property. The credit shall be available only in the
9taxable year in which the property is placed in service and
10shall not be allowed to the extent that it would reduce a
11taxpayer's liability for the tax imposed by subsections (a)
12and (b) of Section 201 to below zero. The credit shall be
13allowed for the tax year in which the property is placed in
14service, or, if the amount of the credit exceeds the tax
15liability for that year, whether it exceeds the original
16liability or the liability as later amended, such excess may
17be carried forward and applied to the tax liability of the 5
18taxable years following the excess credit year. The credit
19shall be applied to the earliest year for which there is a
20liability. If there is credit from more than one tax year that
21is available to offset a liability, the credit accruing first
22in time shall be applied first.
23    (b) The term qualified property means property which:
24        (1) is tangible, whether new or used, including
25    buildings and structural components of buildings;
26        (2) is depreciable pursuant to Section 167 of the

 

 

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1    Internal Revenue Code, except that "3-year property" as
2    defined in Section 168(c)(2)(A) of that Code is not
3    eligible for the credit provided by this Section;
4        (3) is acquired by purchase as defined in Section
5    179(d) of the Internal Revenue Code;
6        (4) is used at the site of the REV Illinois Project by
7    the taxpayer; and
8        (5) has not been previously used in Illinois in such a
9    manner and by such a person as would qualify for the credit
10    provided by this Section.
11    (c) The basis of qualified property shall be the basis
12used to compute the depreciation deduction for federal income
13tax purposes.
14    (d) If the basis of the property for federal income tax
15depreciation purposes is increased after it has been placed in
16service at the site of the REV Illinois Project by the
17taxpayer, the amount of such increase shall be deemed property
18placed in service on the date of such increase in basis.
19    (e) The term "placed in service" shall have the same
20meaning as under Section 46 of the Internal Revenue Code.
21    (f) If during any taxable year, any property ceases to be
22qualified property in the hands of the taxpayer within 48
23months after being placed in service, or the situs of any
24qualified property is moved from the REV Illinois Project site
25within 48 months after being placed in service, the tax
26imposed under subsections (a) and (b) of Section 201 for such

 

 

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1taxable year shall be increased. Such increase shall be
2determined by (i) recomputing the investment credit which
3would have been allowed for the year in which credit for such
4property was originally allowed by eliminating such property
5from such computation, and (ii) subtracting such recomputed
6credit from the amount of credit previously allowed. For the
7purposes of this subsection (f), a reduction of the basis of
8qualified property resulting from a redetermination of the
9purchase price shall be deemed a disposition of qualified
10property to the extent of such reduction.
11(Source: P.A. 102-669, eff. 11-16-21.)
 
12    (35 ILCS 5/251 new)
13    Sec. 251. Pass-through of credits to partners and S
14corporation shareholders. For taxable years ending on or after
15December 31, 2023, if any person earning a credit against the
16tax imposed under subsections (a) and (b) of Section 201 is a
17partnership or Subchapter S corporation, the credit is allowed
18to pass through to the partners and shareholders in accordance
19with the determination of income and distributive share of
20income under Sections 702 and 704 and Subchapter S of the
21Internal Revenue Code, or as otherwise agreed by the partners
22or shareholders, provided that such agreement shall be
23executed in writing prior to the due date of the return for the
24taxable year and meet such other requirements as the
25Department may establish by rule. Partnership has the meaning

 

 

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1prescribed in subdivision (a)(16) of Section 1501.