Illinois General Assembly - Full Text of HB5191
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Full Text of HB5191  103rd General Assembly

HB5191 103RD GENERAL ASSEMBLY

 


 
103RD GENERAL ASSEMBLY
State of Illinois
2023 and 2024
HB5191

 

Introduced 2/9/2024, by Rep. Brad Halbrook

 

SYNOPSIS AS INTRODUCED:
 
New Act
35 ILCS 5/201
35 ILCS 5/517 new
35 ILCS 5/714 new
35 ILCS 105/3-10
5 ILCS 100/5-45.55 new

    Creates the Protect Illinois Manufacturing and Energy from Foreign Adversaries Act. Provides that a disqualified foreign adversary may not receive certain State incentives. Provides that a disqualified foreign adversary that operates in Illinois is subject to specified taxes and fees. Defines "disqualified foreign adversary" as individuals or entities that are associated with a foreign adversary and that establish, invest in, or operate an advanced manufacturing and energy business. Amends the Illinois Income Tax Act and the Use Tax Act to make conforming changes. Amends the Illinois Administrative Procedure Act to provide for emergency rulemaking. Effective immediately.


LRB103 38839 HLH 68976 b

 

 

A BILL FOR

 

HB5191LRB103 38839 HLH 68976 b

1    AN ACT concerning State government.
 
2    Be it enacted by the People of the State of Illinois,
3represented in the General Assembly:
 
4    Section 1. Short title. This Act may be cited as the
5Protect Illinois Manufacturing and Energy from Foreign
6Adversaries Act.
 
7    Section 5. Legislative intent. The General Assembly finds
8and declares that protecting the State and the nation against
9dangerous foreign investments is an important public purpose.
 
10    Section 10. Definitions.
11    "Disqualified foreign adversary" means any of the
12following individuals or entities that establishes, invests
13in, or operates a specified advanced manufacturing and energy
14business located in this State:
15        (1) the government of a foreign adversary, any agency
16    or government instrumentality of a foreign adversary, or
17    any entity that is directly or indirectly owned,
18    controlled, or directed by any such government, agency, or
19    government instrumentality;
20        (2) an individual who is a citizen of a foreign
21    adversary, an entity organized under the laws of a foreign
22    adversary or any political subdivision of a foreign

 

 

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1    adversary, or an entity whose headquarters is located in a
2    foreign adversary;
3        (3) any individual or entity that is directly or
4    indirectly owned, controlled, directed, or materially
5    influenced by any party described in items (1) or (2);
6        (4) any entity in which 10% or more of the outstanding
7    equity interest, by value, voting, governance, board
8    appointment, or similar rights or influence, is held
9    directly or indirectly by or on behalf of one or more of
10    the persons or entities described in items (1), (2), or
11    (3) on any day of the applicable tax year, including
12    through interests in co-investment vehicles, joint
13    ventures, or similar arrangements; or
14        (5) an individual or entity whose actions, management,
15    or operations are subject to the direct or indirect
16    influence of one or more persons or entities described in
17    items (1) through (4) as a result of any debt, lease or
18    sublease arrangement, management or operating arrangement,
19    contract manufacturing arrangement, license or sublicense
20    agreement, financial derivative or other obligation or
21    arrangement entered into between such parties, as
22    determined by the Illinois Secretary of State, the
23    Department of Revenue, the Department of Commerce and
24    Economic Opportunity, the Office of the Governor, or any
25    other department or agency of the State, provided that the
26    mere purchase of equipment or manufacturing inputs on

 

 

HB5191- 3 -LRB103 38839 HLH 68976 b

1    arm's-length terms shall not, in and of itself, be deemed
2    to provide a substantial benefit.
3    "Foreign adversary" means any foreign adversary, as
4defined in 15 CFR 7.4 on the effective date of this Act.
5    "Specified advanced manufacturing and energy business"
6means a business that produces or manufactures any eligible
7component, as defined in Section 45X(c)(1)(A) of the Internal
8Revenue Code of 1986, as amended and any U.S. Treasury
9regulations issued thereafter.
 
10    Section 15. Disqualified foreign adversaries.
11Notwithstanding any other provision of law, no disqualified
12foreign adversary is eligible to receive any of the State
13incentives listed in Section 20, and each disqualified foreign
14adversary that operates in Illinois is subject to the taxes
15and fees set forth in Section 25.
 
16    Section 20. Prohibited State incentives. No disqualified
17foreign adversary shall be granted or benefit from any of the
18following incentives granted by the State or any political
19subdivision of the State:
20        (1) any exemption or reduction to State or local
21    property and real property transfer taxes;
22        (2) any exemption or exclusion from State income taxes
23    or use and occupation taxes;
24        (3) any deferment of State or local fees or taxes;

 

 

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1        (4) any financial assistance or training granted by
2    the State or a unit of local government to attract and
3    retain employees;
4        (5) any discretionary incentive, including a grant,
5    debt financing resource, or infrastructure assistance; or
6        (6) any other incentive or benefit granted by the
7    Department of Revenue, the Department of Commerce and
8    Economic Opportunity, or any other agency or department of
9    the State.
 
10    Section 25. Taxes and fees. Beginning on January 1, 2025,
11any disqualified foreign adversary that operates in the State
12is subject to the following taxes and fees in respect of its
13business operations:
14        (1) an excise tax of 20% of any gross revenues of the
15    disqualified foreign adversary attributable to Illinois,
16    as provided in subsection (b-6) of Section 201 of the
17    Illinois Income Tax Act;
18        (2) an excise tax of 30% of the selling price of any
19    tangible property, intangible property, or services used
20    or acquired by the disqualified foreign adversary in the
21    State of Illinois, as provided in Section 3-10 of the Use
22    Tax Act;
23        (3) an excise tax of 80% of the compensation paid to
24    persons employed by the taxpayer in Illinois, as provided
25    in Section 714 of the Illinois Income Tax Act; and

 

 

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1        (4) an annual fee for the privilege of doing business
2    in Illinois equal to the greater of (i) $250,000 or (ii)
3    15% of the fair market value of the disqualified foreign
4    adversary's total shareholders' equity reported on the
5    U.S. Form 1120, Schedule L, total partner capital reported
6    on U.S. Form 1065, Schedule L, or comparable measure of
7    owners' equity as determined by the Department of Revenue,
8    in each case, relative to the disqualified foreign
9    adversary immediately preceding fiscal year; the fee under
10    this item (4) shall be collected by the Secretary of State
11    in the same manner as franchise taxes are collected under
12    the Business Corporation Act of 1983.
 
13    Section 30. Administration.
14    (a) Each State income tax return and annual report filed
15in Illinois shall hereafter require taxpayer certification as
16to the taxpayer's status as a disqualified foreign adversary.
17    (b) The Department of Commerce and Economic Opportunity
18may adopt any rules, including emergency rules, necessary for
19the prompt implementation of the provisions of this Act by the
20Department of Commerce and Economic Opportunity. The
21Department of Revenue may adopt any rules, including emergency
22rules, necessary for the prompt implementation of the
23provisions of this Act by the Department of Revenue. The
24Secretary of State may adopt any rules, including emergency
25rules, necessary for the prompt implementation of the

 

 

HB5191- 6 -LRB103 38839 HLH 68976 b

1provisions of this Act by the Secretary of State.
 
2    Section 97. Severability. The provisions of this Act are
3severable under Section 1.31 of the Statute on Statutes.
 
4    Section 900. The Illinois Income Tax Act is amended by
5changing Section 201 and by adding Sections 517 and 714 as
6follows:
 
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    (b-6) Notwithstanding any other provision of law, for
16taxable years beginning on or after January 1, 2025, a
17taxpayer that is a disqualified foreign adversary, as defined
18in the Protect Illinois Manufacturing and Energy from Foreign
19Adversaries Act, is subject to an additional excise tax of 20%
20of the gross revenues of the disqualified foreign adversary
21attributable to Illinois, as determined under Article 3.
22    (c) Personal Property Tax Replacement Income Tax.
23Beginning on July 1, 1979 and thereafter, in addition to such
24income tax, there is also hereby imposed the Personal Property
25Tax Replacement Income Tax measured by net income on every
26corporation (including Subchapter S corporations), partnership

 

 

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1and trust, for each taxable year ending after June 30, 1979.
2Such taxes are imposed on the privilege of earning or
3receiving income in or as a resident of this State. The
4Personal Property Tax Replacement Income Tax shall be in
5addition to the income tax imposed by subsections (a) and (b)
6of this Section and in addition to all other occupation or
7privilege taxes imposed by this State or by any municipal
8corporation or political subdivision thereof.
9    (d) Additional Personal Property Tax Replacement Income
10Tax Rates. The personal property tax replacement income tax
11imposed by this subsection and subsection (c) of this Section
12in the case of a corporation, other than a Subchapter S
13corporation and except as adjusted by subsection (d-1), shall
14be an additional amount equal to 2.85% of such taxpayer's net
15income for the taxable year, except that beginning on January
161, 1981, and thereafter, the rate of 2.85% specified in this
17subsection shall be reduced to 2.5%, and in the case of a
18partnership, trust or a Subchapter S corporation shall be an
19additional amount equal to 1.5% of such taxpayer's net income
20for the taxable year.
21    (d-1) Rate reduction for certain foreign insurers. In the
22case of a foreign insurer, as defined by Section 35A-5 of the
23Illinois Insurance Code, whose state or country of domicile
24imposes on insurers domiciled in Illinois a retaliatory tax
25(excluding any insurer whose premiums from reinsurance assumed
26are 50% or more of its total insurance premiums as determined

 

 

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1under paragraph (2) of subsection (b) of Section 304, except
2that for purposes of this determination premiums from
3reinsurance do not include premiums from inter-affiliate
4reinsurance arrangements), beginning with taxable years ending
5on or after December 31, 1999, the sum of the rates of tax
6imposed by subsections (b) and (d) shall be reduced (but not
7increased) to the rate at which the total amount of tax imposed
8under this Act, net of all credits allowed under this Act,
9shall equal (i) the total amount of tax that would be imposed
10on the foreign insurer's net income allocable to Illinois for
11the taxable year by such foreign insurer's state or country of
12domicile if that net income were subject to all income taxes
13and taxes measured by net income imposed by such foreign
14insurer's state or country of domicile, net of all credits
15allowed or (ii) a rate of zero if no such tax is imposed on
16such income by the foreign insurer's state of domicile. For
17the purposes of this subsection (d-1), an inter-affiliate
18includes a mutual insurer under common management.
19        (1) For the purposes of subsection (d-1), in no event
20    shall the sum of the rates of tax imposed by subsections
21    (b) and (d) be reduced below the rate at which the sum of:
22            (A) the total amount of tax imposed on such
23        foreign insurer under this Act for a taxable year, net
24        of all credits allowed under this Act, plus
25            (B) the privilege tax imposed by Section 409 of
26        the Illinois Insurance Code, the fire insurance

 

 

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1        company tax imposed by Section 12 of the Fire
2        Investigation Act, and the fire department taxes
3        imposed under Section 11-10-1 of the Illinois
4        Municipal Code,
5    equals 1.25% for taxable years ending prior to December
6    31, 2003, or 1.75% for taxable years ending on or after
7    December 31, 2003, of the net taxable premiums written for
8    the taxable year, as described by subsection (1) of
9    Section 409 of the Illinois Insurance Code. This paragraph
10    will in no event increase the rates imposed under
11    subsections (b) and (d).
12        (2) Any reduction in the rates of tax imposed by this
13    subsection shall be applied first against the rates
14    imposed by subsection (b) and only after the tax imposed
15    by subsection (a) net of all credits allowed under this
16    Section other than the credit allowed under subsection (i)
17    has been reduced to zero, against the rates imposed by
18    subsection (d).
19    This subsection (d-1) is exempt from the provisions of
20Section 250.
21    (e) Investment credit. A taxpayer shall be allowed a
22credit against the Personal Property Tax Replacement Income
23Tax for investment in qualified property.
24        (1) A taxpayer shall be allowed a credit equal to .5%
25    of the basis of qualified property placed in service
26    during the taxable year, provided such property is placed

 

 

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1    in service on or after July 1, 1984. There shall be allowed
2    an additional credit equal to .5% of the basis of
3    qualified property placed in service during the taxable
4    year, provided such property is placed in service on or
5    after July 1, 1986, and the taxpayer's base employment
6    within Illinois has increased by 1% or more over the
7    preceding year as determined by the taxpayer's employment
8    records filed with the Illinois Department of Employment
9    Security. Taxpayers who are new to Illinois shall be
10    deemed to have met the 1% growth in base employment for the
11    first year in which they file employment records with the
12    Illinois Department of Employment Security. The provisions
13    added to this Section by Public Act 85-1200 (and restored
14    by Public Act 87-895) shall be construed as declaratory of
15    existing law and not as a new enactment. If, in any year,
16    the increase in base employment within Illinois over the
17    preceding year is less than 1%, the additional credit
18    shall be limited to that percentage times a fraction, the
19    numerator of which is .5% and the denominator of which is
20    1%, but shall not exceed .5%. The investment credit shall
21    not be allowed to the extent that it would reduce a
22    taxpayer's liability in any tax year below zero, nor may
23    any credit for qualified property be allowed for any year
24    other than the year in which the property was placed in
25    service in Illinois. For tax years ending on or after
26    December 31, 1987, and on or before December 31, 1988, the

 

 

HB5191- 17 -LRB103 38839 HLH 68976 b

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

 

 

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1    there is a liability. If there is credit from more than one
2    tax year that is available to offset a liability, earlier
3    credit shall be applied first.
4        (2) The term "qualified property" means property
5    which:
6            (A) is tangible, whether new or used, including
7        buildings and structural components of buildings and
8        signs that are real property, but not including land
9        or improvements to real property that are not a
10        structural component of a building such as
11        landscaping, sewer lines, local access roads, fencing,
12        parking lots, and other appurtenances;
13            (B) is depreciable pursuant to Section 167 of the
14        Internal Revenue Code, except that "3-year property"
15        as defined in Section 168(c)(2)(A) of that Code is not
16        eligible for the credit provided by this subsection
17        (e);
18            (C) is acquired by purchase as defined in Section
19        179(d) of the Internal Revenue Code;
20            (D) is used in Illinois by a taxpayer who is
21        primarily engaged in manufacturing, or in mining coal
22        or fluorite, or in retailing, or was placed in service
23        on or after July 1, 2006 in a River Edge Redevelopment
24        Zone established pursuant to the River Edge
25        Redevelopment Zone Act; and
26            (E) has not previously been 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 (e) or
3        subsection (f).
4        (3) For purposes of this subsection (e),
5    "manufacturing" means the material staging and production
6    of tangible personal property by procedures commonly
7    regarded as manufacturing, processing, fabrication, or
8    assembling which changes some existing material into new
9    shapes, new qualities, or new combinations. For purposes
10    of this subsection (e) the term "mining" shall have the
11    same meaning as the term "mining" in Section 613(c) of the
12    Internal Revenue Code. For purposes of this subsection
13    (e), the term "retailing" means the sale of tangible
14    personal property for use or consumption and not for
15    resale, or services rendered in conjunction with the sale
16    of tangible personal property for use or consumption and
17    not for resale. For purposes of this subsection (e),
18    "tangible personal property" has the same meaning as when
19    that term is used in the Retailers' Occupation Tax Act,
20    and, for taxable years ending after December 31, 2008,
21    does not include the generation, transmission, or
22    distribution of electricity.
23        (4) The basis of qualified property shall be the basis
24    used to compute the depreciation deduction for federal
25    income tax purposes.
26        (5) If the basis of the property for federal income

 

 

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1    tax depreciation purposes is increased after it has been
2    placed in service in Illinois by the taxpayer, the amount
3    of such increase shall be deemed property placed in
4    service on the date of such increase in basis.
5        (6) The term "placed in service" shall have the same
6    meaning as under Section 46 of the Internal Revenue Code.
7        (7) If during any taxable year, any property ceases to
8    be qualified property in the hands of the taxpayer within
9    48 months after being placed in service, or the situs of
10    any qualified property is moved outside Illinois within 48
11    months after being placed in service, the Personal
12    Property Tax Replacement Income Tax for such taxable year
13    shall be increased. Such increase shall be determined by
14    (i) recomputing the investment credit which would have
15    been allowed for the year in which credit for such
16    property was originally allowed by eliminating such
17    property from such computation and, (ii) subtracting such
18    recomputed credit from the amount of credit previously
19    allowed. For the purposes of this paragraph (7), a
20    reduction of the basis of qualified property resulting
21    from a redetermination of the purchase price shall be
22    deemed a disposition of qualified property to the extent
23    of such reduction.
24        (8) Unless the investment credit is extended by law,
25    the basis of qualified property shall not include costs
26    incurred after December 31, 2018, except for costs

 

 

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1    incurred pursuant to a binding contract entered into on or
2    before December 31, 2018.
3        (9) Each taxable year ending before December 31, 2000,
4    a partnership may elect to pass through to its partners
5    the credits to which the partnership is entitled under
6    this subsection (e) for the taxable year. A partner may
7    use the credit allocated to him or her under this
8    paragraph only against the tax imposed in subsections (c)
9    and (d) of this Section. If the partnership makes that
10    election, those credits shall be allocated among the
11    partners in the partnership in accordance with the rules
12    set forth in Section 704(b) of the Internal Revenue Code,
13    and the rules promulgated under that Section, and the
14    allocated amount of the credits shall be allowed to the
15    partners for that taxable year. The partnership shall make
16    this election on its Personal Property Tax Replacement
17    Income Tax return for that taxable year. The election to
18    pass through the credits shall be irrevocable.
19        For taxable years ending on or after December 31,
20    2000, a partner that qualifies its partnership for a
21    subtraction under subparagraph (I) of paragraph (2) of
22    subsection (d) of Section 203 or a shareholder that
23    qualifies a Subchapter S corporation for a subtraction
24    under subparagraph (S) of paragraph (2) of subsection (b)
25    of Section 203 shall be allowed a credit under this
26    subsection (e) equal to its share of the credit earned

 

 

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1    under this subsection (e) during the taxable year by the
2    partnership or Subchapter S corporation, determined in
3    accordance with the determination of income and
4    distributive share of income under Sections 702 and 704
5    and Subchapter S of the Internal Revenue Code. This
6    paragraph is exempt from the provisions of Section 250.
7    (f) Investment credit; Enterprise Zone; River Edge
8Redevelopment Zone.
9        (1) A taxpayer shall be allowed a credit against the
10    tax imposed by subsections (a) and (b) of this Section for
11    investment in qualified property which is placed in
12    service in an Enterprise Zone created pursuant to the
13    Illinois Enterprise Zone Act or, for property placed in
14    service on or after July 1, 2006, a River Edge
15    Redevelopment Zone established pursuant to the River Edge
16    Redevelopment Zone Act. For partners, shareholders of
17    Subchapter S corporations, and owners of limited liability
18    companies, if the liability company is treated as a
19    partnership for purposes of federal and State income
20    taxation, for taxable years ending before December 31,
21    2023, there shall be allowed a credit under this
22    subsection (f) to be determined in accordance with the
23    determination of income and distributive share of income
24    under Sections 702 and 704 and Subchapter S of the
25    Internal Revenue Code. For taxable years ending on or
26    after December 31, 2023, for partners and shareholders of

 

 

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1    Subchapter S corporations, the provisions of Section 251
2    shall apply with respect to the credit under this
3    subsection. The credit shall be .5% of the basis for such
4    property. The credit shall be available only in the
5    taxable year in which the property is placed in service in
6    the Enterprise Zone or River Edge Redevelopment Zone and
7    shall not be allowed to the extent that it would reduce a
8    taxpayer's liability for the tax imposed by subsections
9    (a) and (b) of this Section to below zero. For tax years
10    ending on or after December 31, 1985, the credit shall be
11    allowed for the tax year in which the property is placed in
12    service, or, if the amount of the credit exceeds the tax
13    liability for that year, whether it exceeds the original
14    liability or the liability as later amended, such excess
15    may be carried forward and applied to the tax liability of
16    the 5 taxable years following the excess credit year. The
17    credit shall be applied to the earliest year for which
18    there is a liability. If there is credit from more than one
19    tax year that is available to offset a liability, the
20    credit accruing first in time shall be applied first.
21        (2) The term qualified property means property which:
22            (A) is tangible, whether new or used, including
23        buildings and structural components of buildings;
24            (B) is depreciable pursuant to Section 167 of the
25        Internal Revenue Code, except that "3-year property"
26        as defined in Section 168(c)(2)(A) of that Code is not

 

 

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

 

 

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1    after being placed in service, the tax imposed under
2    subsections (a) and (b) of this Section for such taxable
3    year shall be increased. Such increase shall be determined
4    by (i) recomputing the investment credit which would have
5    been allowed for the year in which credit for such
6    property was originally allowed by eliminating such
7    property from such computation, and (ii) subtracting such
8    recomputed credit from the amount of credit previously
9    allowed. For the purposes of this paragraph (6), a
10    reduction of the basis of qualified property resulting
11    from a redetermination of the purchase price shall be
12    deemed a disposition of qualified property to the extent
13    of such reduction.
14        (7) There shall be allowed an additional credit equal
15    to 0.5% of the basis of qualified property placed in
16    service during the taxable year in a River Edge
17    Redevelopment Zone, provided such property is placed in
18    service on or after July 1, 2006, and the taxpayer's base
19    employment within Illinois has increased by 1% or more
20    over the preceding year as determined by the taxpayer's
21    employment records filed with the Illinois Department of
22    Employment Security. Taxpayers who are new to Illinois
23    shall be deemed to have met the 1% growth in base
24    employment for the first year in which they file
25    employment records with the Illinois Department of
26    Employment Security. If, in any year, the increase in base

 

 

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1    employment within Illinois over the preceding year is less
2    than 1%, the additional credit shall be limited to that
3    percentage times a fraction, the numerator of which is
4    0.5% and the denominator of which is 1%, but shall not
5    exceed 0.5%.
6        (8) For taxable years beginning on or after January 1,
7    2021, there shall be allowed an Enterprise Zone
8    construction jobs credit against the taxes imposed under
9    subsections (a) and (b) of this Section as provided in
10    Section 13 of the Illinois Enterprise Zone Act.
11        The credit or credits may not reduce the taxpayer's
12    liability to less than zero. If the amount of the credit or
13    credits exceeds the taxpayer's liability, the excess may
14    be carried forward and applied against the taxpayer's
15    liability in succeeding calendar years in the same manner
16    provided under paragraph (4) of Section 211 of this Act.
17    The credit or credits shall be applied to the earliest
18    year for which there is a tax liability. If there are
19    credits from more than one taxable year that are available
20    to offset a liability, the earlier credit shall be applied
21    first.
22        For partners, shareholders of Subchapter S
23    corporations, and owners of limited liability companies,
24    if the liability company is treated as a partnership for
25    the purposes of federal and State income taxation, for
26    taxable years ending before December 31, 2023, there shall

 

 

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1    be allowed a credit under this Section to be determined in
2    accordance with the determination of income and
3    distributive share of income under Sections 702 and 704
4    and Subchapter S of the Internal Revenue Code. For taxable
5    years ending on or after December 31, 2023, for partners
6    and shareholders of Subchapter S corporations, the
7    provisions of Section 251 shall apply with respect to the
8    credit under this subsection.
9        The total aggregate amount of credits awarded under
10    the Blue Collar Jobs Act (Article 20 of Public Act 101-9)
11    shall not exceed $20,000,000 in any State fiscal year.
12        This paragraph (8) is exempt from the provisions of
13    Section 250.
14    (g) (Blank).
15    (h) Investment credit; High Impact Business.
16        (1) Subject to subsections (b) and (b-5) of Section
17    5.5 of the Illinois Enterprise Zone Act, a taxpayer shall
18    be allowed a credit against the tax imposed by subsections
19    (a) and (b) of this Section for investment in qualified
20    property which is placed in service by a Department of
21    Commerce and Economic Opportunity designated High Impact
22    Business. The credit shall be .5% of the basis for such
23    property. The credit shall not be available (i) until the
24    minimum investments in qualified property set forth in
25    subdivision (a)(3)(A) of Section 5.5 of the Illinois
26    Enterprise Zone Act have been satisfied or (ii) until the

 

 

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1    time authorized in subsection (b-5) of the Illinois
2    Enterprise Zone Act for entities designated as High Impact
3    Businesses under subdivisions (a)(3)(B), (a)(3)(C), and
4    (a)(3)(D) of Section 5.5 of the Illinois Enterprise Zone
5    Act, and shall not be allowed to the extent that it would
6    reduce a taxpayer's liability for the tax imposed by
7    subsections (a) and (b) of this Section to below zero. The
8    credit applicable to such investments shall be taken in
9    the taxable year in which such investments have been
10    completed. The credit for additional investments beyond
11    the minimum investment by a designated high impact
12    business authorized under subdivision (a)(3)(A) of Section
13    5.5 of the Illinois Enterprise Zone Act shall be available
14    only in the taxable year in which the property is placed in
15    service and shall not be allowed to the extent that it
16    would reduce a taxpayer's liability for the tax imposed by
17    subsections (a) and (b) of this Section to below zero. For
18    tax years ending on or after December 31, 1987, the credit
19    shall be allowed for the tax year in which the property is
20    placed in service, or, if the amount of the credit exceeds
21    the tax liability for that year, whether it exceeds the
22    original liability or the liability as later amended, such
23    excess may be carried forward and applied to the tax
24    liability of the 5 taxable years following the excess
25    credit year. The credit shall be applied to the earliest
26    year for which there is a liability. If there is credit

 

 

HB5191- 29 -LRB103 38839 HLH 68976 b

1    from more than one tax year that is available to offset a
2    liability, the credit accruing first in time shall be
3    applied first.
4        Changes made in this subdivision (h)(1) by Public Act
5    88-670 restore changes made by Public Act 85-1182 and
6    reflect existing law.
7        (2) The term qualified property means property which:
8            (A) is tangible, whether new or used, including
9        buildings and structural components of buildings;
10            (B) is depreciable pursuant to Section 167 of the
11        Internal Revenue Code, except that "3-year property"
12        as defined in Section 168(c)(2)(A) of that Code is not
13        eligible for the credit provided by this subsection
14        (h);
15            (C) is acquired by purchase as defined in Section
16        179(d) of the Internal Revenue Code; and
17            (D) is not eligible for the Enterprise Zone
18        Investment Credit provided by subsection (f) of this
19        Section.
20        (3) The basis of qualified property shall be the basis
21    used to compute the depreciation deduction for federal
22    income tax purposes.
23        (4) If the basis of the property for federal income
24    tax depreciation purposes is increased after it has been
25    placed in service in a federally designated Foreign Trade
26    Zone or Sub-Zone located in Illinois by the taxpayer, the

 

 

HB5191- 30 -LRB103 38839 HLH 68976 b

1    amount of such increase shall be deemed property placed in
2    service on the date of such increase in basis.
3        (5) The term "placed in service" shall have the same
4    meaning as under Section 46 of the Internal Revenue Code.
5        (6) If during any taxable year ending on or before
6    December 31, 1996, any property ceases to be qualified
7    property in the hands of the taxpayer within 48 months
8    after being placed in service, or the situs of any
9    qualified property is moved outside Illinois within 48
10    months after being placed in service, the tax imposed
11    under subsections (a) and (b) of this Section for such
12    taxable year shall be increased. Such increase shall be
13    determined by (i) recomputing the investment credit which
14    would have been allowed for the year in which credit for
15    such property was originally allowed by eliminating such
16    property from such computation, and (ii) subtracting such
17    recomputed credit from the amount of credit previously
18    allowed. For the purposes of this paragraph (6), a
19    reduction of the basis of qualified property resulting
20    from a redetermination of the purchase price shall be
21    deemed a disposition of qualified property to the extent
22    of such reduction.
23        (7) Beginning with tax years ending after December 31,
24    1996, if a taxpayer qualifies for the credit under this
25    subsection (h) and thereby is granted a tax abatement and
26    the taxpayer relocates its entire facility in violation of

 

 

HB5191- 31 -LRB103 38839 HLH 68976 b

1    the explicit terms and length of the contract under
2    Section 18-183 of the Property Tax Code, the tax imposed
3    under subsections (a) and (b) of this Section shall be
4    increased for the taxable year in which the taxpayer
5    relocated its facility by an amount equal to the amount of
6    credit received by the taxpayer under this subsection (h).
7    (h-5) High Impact Business construction jobs credit. For
8taxable years beginning on or after January 1, 2021, there
9shall also be allowed a High Impact Business construction jobs
10credit against the tax imposed under subsections (a) and (b)
11of this Section as provided in subsections (i) and (j) of
12Section 5.5 of the Illinois Enterprise Zone Act.
13    The credit or credits may not reduce the taxpayer's
14liability to less than zero. If the amount of the credit or
15credits exceeds the taxpayer's liability, the excess may be
16carried forward and applied against the taxpayer's liability
17in succeeding calendar years in the manner provided under
18paragraph (4) of Section 211 of this Act. The credit or credits
19shall be applied to the earliest year for which there is a tax
20liability. If there are credits from more than one taxable
21year that are available to offset a liability, the earlier
22credit shall be applied first.
23    For partners, shareholders of Subchapter S corporations,
24and owners of limited liability companies, for taxable years
25ending before December 31, 2023, if the liability company is
26treated as a partnership for the purposes of federal and State

 

 

HB5191- 32 -LRB103 38839 HLH 68976 b

1income taxation, there shall be allowed a credit under this
2Section to be determined in accordance with the determination
3of income and distributive share of income under Sections 702
4and 704 and Subchapter S of the Internal Revenue Code. For
5taxable years ending on or after December 31, 2023, for
6partners and shareholders of Subchapter S corporations, the
7provisions of Section 251 shall apply with respect to the
8credit under this subsection.
9    The total aggregate amount of credits awarded under the
10Blue Collar Jobs Act (Article 20 of Public Act 101-9) shall not
11exceed $20,000,000 in any State fiscal year.
12    This subsection (h-5) is exempt from the provisions of
13Section 250.
14    (i) Credit for Personal Property Tax Replacement Income
15Tax. For tax years ending prior to December 31, 2003, a credit
16shall be allowed against the tax imposed by subsections (a)
17and (b) of this Section for the tax imposed by subsections (c)
18and (d) of this Section. This credit shall be computed by
19multiplying the tax imposed by subsections (c) and (d) of this
20Section by a fraction, the numerator of which is base income
21allocable to Illinois and the denominator of which is Illinois
22base income, and further multiplying the product by the tax
23rate imposed by subsections (a) and (b) of this Section.
24    Any credit earned on or after December 31, 1986 under this
25subsection which is unused in the year the credit is computed
26because it exceeds the tax liability imposed by subsections

 

 

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1(a) and (b) for that year (whether it exceeds the original
2liability or the liability as later amended) may be carried
3forward and applied to the tax liability imposed by
4subsections (a) and (b) of the 5 taxable years following the
5excess credit year, provided that no credit may be carried
6forward to any year ending on or after December 31, 2003. This
7credit shall be applied first to the earliest year for which
8there is a liability. If there is a credit under this
9subsection from more than one tax year that is available to
10offset a liability the earliest credit arising under this
11subsection shall be applied first.
12    If, during any taxable year ending on or after December
1331, 1986, the tax imposed by subsections (c) and (d) of this
14Section for which a taxpayer has claimed a credit under this
15subsection (i) is reduced, the amount of credit for such tax
16shall also be reduced. Such reduction shall be determined by
17recomputing the credit to take into account the reduced tax
18imposed by subsections (c) and (d). If any portion of the
19reduced amount of credit has been carried to a different
20taxable year, an amended return shall be filed for such
21taxable year to reduce the amount of credit claimed.
22    (j) Training expense credit. Beginning with tax years
23ending on or after December 31, 1986 and prior to December 31,
242003, a taxpayer shall be allowed a credit against the tax
25imposed by subsections (a) and (b) under this Section for all
26amounts paid or accrued, on behalf of all persons employed by

 

 

HB5191- 34 -LRB103 38839 HLH 68976 b

1the taxpayer in Illinois or Illinois residents employed
2outside of Illinois by a taxpayer, for educational or
3vocational training in semi-technical or technical fields or
4semi-skilled or skilled fields, which were deducted from gross
5income in the computation of taxable income. The credit
6against the tax imposed by subsections (a) and (b) shall be
71.6% of such training expenses. For partners, shareholders of
8subchapter S corporations, and owners of limited liability
9companies, if the liability company is treated as a
10partnership for purposes of federal and State income taxation,
11for taxable years ending before December 31, 2023, there shall
12be allowed a credit under this subsection (j) to be determined
13in accordance with the determination of income and
14distributive share of income under Sections 702 and 704 and
15subchapter S of the Internal Revenue Code. For taxable years
16ending on or after December 31, 2023, for partners and
17shareholders of Subchapter S corporations, the provisions of
18Section 251 shall apply with respect to the credit under this
19subsection.
20    Any credit allowed under this subsection which is unused
21in the year the credit is earned may be carried forward to each
22of the 5 taxable years following the year for which the credit
23is first computed until it is used. This credit shall be
24applied first to the earliest year for which there is a
25liability. If there is a credit under this subsection from
26more than one tax year that is available to offset a liability,

 

 

HB5191- 35 -LRB103 38839 HLH 68976 b

1the earliest credit arising under this subsection shall be
2applied first. No carryforward credit may be claimed in any
3tax year ending on or after December 31, 2003.
4    (k) Research and development credit. For tax years ending
5after July 1, 1990 and prior to December 31, 2003, and
6beginning again for tax years ending on or after December 31,
72004, and ending prior to January 1, 2027, a taxpayer shall be
8allowed a credit against the tax imposed by subsections (a)
9and (b) of this Section for increasing research activities in
10this State. The credit allowed against the tax imposed by
11subsections (a) and (b) shall be equal to 6 1/2% of the
12qualifying expenditures for increasing research activities in
13this State. For partners, shareholders of subchapter S
14corporations, and owners of limited liability companies, if
15the liability company is treated as a partnership for purposes
16of federal and State income taxation, for taxable years ending
17before December 31, 2023, there shall be allowed a credit
18under this subsection to be determined in accordance with the
19determination of income and distributive share of income under
20Sections 702 and 704 and subchapter S of the Internal Revenue
21Code. For taxable years ending on or after December 31, 2023,
22for partners and shareholders of Subchapter S corporations,
23the provisions of Section 251 shall apply with respect to the
24credit under this subsection.
25    For purposes of this subsection, "qualifying expenditures"
26means the qualifying expenditures as defined for the federal

 

 

HB5191- 36 -LRB103 38839 HLH 68976 b

1credit for increasing research activities which would be
2allowable under Section 41 of the Internal Revenue Code and
3which are conducted in this State, "qualifying expenditures
4for increasing research activities in this State" means the
5excess of qualifying expenditures for the taxable year in
6which incurred over qualifying expenditures for the base
7period, "qualifying expenditures for the base period" means
8the average of the qualifying expenditures for each year in
9the base period, and "base period" means the 3 taxable years
10immediately preceding the taxable year for which the
11determination is being made.
12    Any credit in excess of the tax liability for the taxable
13year may be carried forward. A taxpayer may elect to have the
14unused credit shown on its final completed return carried over
15as a credit against the tax liability for the following 5
16taxable years or until it has been fully used, whichever
17occurs first; provided that no credit earned in a tax year
18ending prior to December 31, 2003 may be carried forward to any
19year ending on or after December 31, 2003.
20    If an unused credit is carried forward to a given year from
212 or more earlier years, that credit arising in the earliest
22year will be applied first against the tax liability for the
23given year. If a tax liability for the given year still
24remains, the credit from the next earliest year will then be
25applied, and so on, until all credits have been used or no tax
26liability for the given year remains. Any remaining unused

 

 

HB5191- 37 -LRB103 38839 HLH 68976 b

1credit or credits then will be carried forward to the next
2following year in which a tax liability is incurred, except
3that no credit can be carried forward to a year which is more
4than 5 years after the year in which the expense for which the
5credit is given was incurred.
6    No inference shall be drawn from Public Act 91-644 in
7construing this Section for taxable years beginning before
8January 1, 1999.
9    It is the intent of the General Assembly that the research
10and development credit under this subsection (k) shall apply
11continuously for all tax years ending on or after December 31,
122004 and ending prior to January 1, 2027, including, but not
13limited to, the period beginning on January 1, 2016 and ending
14on July 6, 2017 (the effective date of Public Act 100-22). All
15actions taken in reliance on the continuation of the credit
16under this subsection (k) by any taxpayer are hereby
17validated.
18    (l) Environmental Remediation Tax Credit.
19        (i) For tax years ending after December 31, 1997 and
20    on or before December 31, 2001, a taxpayer shall be
21    allowed a credit against the tax imposed by subsections
22    (a) and (b) of this Section for certain amounts paid for
23    unreimbursed eligible remediation costs, as specified in
24    this subsection. For purposes of this Section,
25    "unreimbursed eligible remediation costs" means costs
26    approved by the Illinois Environmental Protection Agency

 

 

HB5191- 38 -LRB103 38839 HLH 68976 b

1    ("Agency") under Section 58.14 of the Environmental
2    Protection Act that were paid in performing environmental
3    remediation at a site for which a No Further Remediation
4    Letter was issued by the Agency and recorded under Section
5    58.10 of the Environmental Protection Act. The credit must
6    be claimed for the taxable year in which Agency approval
7    of the eligible remediation costs is granted. The credit
8    is not available to any taxpayer if the taxpayer or any
9    related party caused or contributed to, in any material
10    respect, a release of regulated substances on, in, or
11    under the site that was identified and addressed by the
12    remedial action pursuant to the Site Remediation Program
13    of the Environmental Protection Act. After the Pollution
14    Control Board rules are adopted pursuant to the Illinois
15    Administrative Procedure Act for the administration and
16    enforcement of Section 58.9 of the Environmental
17    Protection Act, determinations as to credit availability
18    for purposes of this Section shall be made consistent with
19    those rules. For purposes of this Section, "taxpayer"
20    includes a person whose tax attributes the taxpayer has
21    succeeded to under Section 381 of the Internal Revenue
22    Code and "related party" includes the persons disallowed a
23    deduction for losses by paragraphs (b), (c), and (f)(1) of
24    Section 267 of the Internal Revenue Code by virtue of
25    being a related taxpayer, as well as any of its partners.
26    The credit allowed against the tax imposed by subsections

 

 

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1    (a) and (b) shall be equal to 25% of the unreimbursed
2    eligible remediation costs in excess of $100,000 per site,
3    except that the $100,000 threshold shall not apply to any
4    site contained in an enterprise zone as determined by the
5    Department of Commerce and Community Affairs (now
6    Department of Commerce and Economic Opportunity). The
7    total credit allowed shall not exceed $40,000 per year
8    with a maximum total of $150,000 per site. For partners
9    and shareholders of subchapter S corporations, there shall
10    be allowed a credit under this subsection to be determined
11    in accordance with the determination of income and
12    distributive share of income under Sections 702 and 704
13    and subchapter S of the Internal Revenue Code.
14        (ii) A credit allowed under this subsection that is
15    unused in the year the credit is earned may be carried
16    forward to each of the 5 taxable years following the year
17    for which the credit is first earned until it is used. The
18    term "unused credit" does not include any amounts of
19    unreimbursed eligible remediation costs in excess of the
20    maximum credit per site authorized under paragraph (i).
21    This credit shall be applied first to the earliest year
22    for which there is a liability. If there is a credit under
23    this subsection from more than one tax year that is
24    available to offset a liability, the earliest credit
25    arising under this subsection shall be applied first. A
26    credit allowed under this subsection may be sold to a

 

 

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1    buyer as part of a sale of all or part of the remediation
2    site for which the credit was granted. The purchaser of a
3    remediation site and the tax credit shall succeed to the
4    unused credit and remaining carry-forward period of the
5    seller. To perfect the transfer, the assignor shall record
6    the transfer in the chain of title for the site and provide
7    written notice to the Director of the Illinois Department
8    of Revenue of the assignor's intent to sell the
9    remediation site and the amount of the tax credit to be
10    transferred as a portion of the sale. In no event may a
11    credit be transferred to any taxpayer if the taxpayer or a
12    related party would not be eligible under the provisions
13    of subsection (i).
14        (iii) For purposes of this Section, the term "site"
15    shall have the same meaning as under Section 58.2 of the
16    Environmental Protection Act.
17    (m) Education expense credit. Beginning with tax years
18ending after December 31, 1999, a taxpayer who is the
19custodian of one or more qualifying pupils shall be allowed a
20credit against the tax imposed by subsections (a) and (b) of
21this Section for qualified education expenses incurred on
22behalf of the qualifying pupils. The credit shall be equal to
2325% of qualified education expenses, but in no event may the
24total credit under this subsection claimed by a family that is
25the custodian of qualifying pupils exceed (i) $500 for tax
26years ending prior to December 31, 2017, and (ii) $750 for tax

 

 

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1years ending on or after December 31, 2017. In no event shall a
2credit under this subsection reduce the taxpayer's liability
3under this Act to less than zero. Notwithstanding any other
4provision of law, for taxable years beginning on or after
5January 1, 2017, no taxpayer may claim a credit under this
6subsection (m) if the taxpayer's adjusted gross income for the
7taxable year exceeds (i) $500,000, in the case of spouses
8filing a joint federal tax return or (ii) $250,000, in the case
9of all other taxpayers. This subsection is exempt from the
10provisions of Section 250 of this Act.
11    For purposes of this subsection:
12    "Qualifying pupils" means individuals who (i) are
13residents of the State of Illinois, (ii) are under the age of
1421 at the close of the school year for which a credit is
15sought, and (iii) during the school year for which a credit is
16sought were full-time pupils enrolled in a kindergarten
17through twelfth grade education program at any school, as
18defined in this subsection.
19    "Qualified education expense" means the amount incurred on
20behalf of a qualifying pupil in excess of $250 for tuition,
21book fees, and lab fees at the school in which the pupil is
22enrolled during the regular school year.
23    "School" means any public or nonpublic elementary or
24secondary school in Illinois that is in compliance with Title
25VI of the Civil Rights Act of 1964 and attendance at which
26satisfies the requirements of Section 26-1 of the School Code,

 

 

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1except that nothing shall be construed to require a child to
2attend any particular public or nonpublic school to qualify
3for the credit under this Section.
4    "Custodian" means, with respect to qualifying pupils, an
5Illinois resident who is a parent, the parents, a legal
6guardian, or the legal guardians of the qualifying pupils.
7    (n) River Edge Redevelopment Zone site remediation tax
8credit.
9        (i) For tax years ending on or after December 31,
10    2006, a taxpayer shall be allowed a credit against the tax
11    imposed by subsections (a) and (b) of this Section for
12    certain amounts paid for unreimbursed eligible remediation
13    costs, as specified in this subsection. For purposes of
14    this Section, "unreimbursed eligible remediation costs"
15    means costs approved by the Illinois Environmental
16    Protection Agency ("Agency") under Section 58.14a of the
17    Environmental Protection Act that were paid in performing
18    environmental remediation at a site within a River Edge
19    Redevelopment Zone for which a No Further Remediation
20    Letter was issued by the Agency and recorded under Section
21    58.10 of the Environmental Protection Act. The credit must
22    be claimed for the taxable year in which Agency approval
23    of the eligible remediation costs is granted. The credit
24    is not available to any taxpayer if the taxpayer or any
25    related party caused or contributed to, in any material
26    respect, a release of regulated substances on, in, or

 

 

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1    under the site that was identified and addressed by the
2    remedial action pursuant to the Site Remediation Program
3    of the Environmental Protection Act. Determinations as to
4    credit availability for purposes of this Section shall be
5    made consistent with rules adopted by the Pollution
6    Control Board pursuant to the Illinois Administrative
7    Procedure Act for the administration and enforcement of
8    Section 58.9 of the Environmental Protection Act. For
9    purposes of this Section, "taxpayer" includes a person
10    whose tax attributes the taxpayer has succeeded to under
11    Section 381 of the Internal Revenue Code and "related
12    party" includes the persons disallowed a deduction for
13    losses by paragraphs (b), (c), and (f)(1) of Section 267
14    of the Internal Revenue Code by virtue of being a related
15    taxpayer, as well as any of its partners. The credit
16    allowed against the tax imposed by subsections (a) and (b)
17    shall be equal to 25% of the unreimbursed eligible
18    remediation costs in excess of $100,000 per site.
19        (ii) A credit allowed under this subsection that is
20    unused in the year the credit is earned may be carried
21    forward to each of the 5 taxable years following the year
22    for which the credit is first earned until it is used. This
23    credit shall be applied first to the earliest year for
24    which there is a liability. If there is a credit under this
25    subsection from more than one tax year that is available
26    to offset a liability, the earliest credit arising under

 

 

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1    this subsection shall be applied first. A credit allowed
2    under this subsection may be sold to a buyer as part of a
3    sale of all or part of the remediation site for which the
4    credit was granted. The purchaser of a remediation site
5    and the tax credit shall succeed to the unused credit and
6    remaining carry-forward period of the seller. To perfect
7    the transfer, the assignor shall record the transfer in
8    the chain of title for the site and provide written notice
9    to the Director of the Illinois Department of Revenue of
10    the assignor's intent to sell the remediation site and the
11    amount of the tax credit to be transferred as a portion of
12    the sale. In no event may a credit be transferred to any
13    taxpayer if the taxpayer or a related party would not be
14    eligible under the provisions of subsection (i).
15        (iii) For purposes of this Section, the term "site"
16    shall have the same meaning as under Section 58.2 of the
17    Environmental Protection Act.
18    (o) For each of taxable years during the Compassionate Use
19of Medical Cannabis Program, a surcharge is imposed on all
20taxpayers on income arising from the sale or exchange of
21capital assets, depreciable business property, real property
22used in the trade or business, and Section 197 intangibles of
23an organization registrant under the Compassionate Use of
24Medical Cannabis Program Act. The amount of the surcharge is
25equal to the amount of federal income tax liability for the
26taxable year attributable to those sales and exchanges. The

 

 

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1surcharge imposed does not apply if:
2        (1) the medical cannabis cultivation center
3    registration, medical cannabis dispensary registration, or
4    the property of a registration is transferred as a result
5    of any of the following:
6            (A) bankruptcy, a receivership, or a debt
7        adjustment initiated by or against the initial
8        registration or the substantial owners of the initial
9        registration;
10            (B) cancellation, revocation, or termination of
11        any registration by the Illinois Department of Public
12        Health;
13            (C) a determination by the Illinois Department of
14        Public Health that transfer of the registration is in
15        the best interests of Illinois qualifying patients as
16        defined by the Compassionate Use of Medical Cannabis
17        Program Act;
18            (D) the death of an owner of the equity interest in
19        a registrant;
20            (E) the acquisition of a controlling interest in
21        the stock or substantially all of the assets of a
22        publicly traded company;
23            (F) a transfer by a parent company to a wholly
24        owned subsidiary; or
25            (G) the transfer or sale to or by one person to
26        another person where both persons were initial owners

 

 

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1        of the registration when the registration was issued;
2        or
3        (2) the cannabis cultivation center registration,
4    medical cannabis dispensary registration, or the
5    controlling interest in a registrant's property is
6    transferred in a transaction to lineal descendants in
7    which no gain or loss is recognized or as a result of a
8    transaction in accordance with Section 351 of the Internal
9    Revenue Code in which no gain or loss is recognized.
10    (p) Pass-through entity tax.
11        (1) For taxable years ending on or after December 31,
12    2021 and beginning prior to January 1, 2026, a partnership
13    (other than a publicly traded partnership under Section
14    7704 of the Internal Revenue Code) or Subchapter S
15    corporation may elect to apply the provisions of this
16    subsection. A separate election shall be made for each
17    taxable year. Such election shall be made at such time,
18    and in such form and manner as prescribed by the
19    Department, and, once made, is irrevocable.
20        (2) Entity-level tax. A partnership or Subchapter S
21    corporation electing to apply the provisions of this
22    subsection shall be subject to a tax for the privilege of
23    earning or receiving income in this State in an amount
24    equal to 4.95% of the taxpayer's net income for the
25    taxable year.
26        (3) Net income defined.

 

 

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1            (A) In general. For purposes of paragraph (2), the
2        term net income has the same meaning as defined in
3        Section 202 of this Act, except that, for tax years
4        ending on or after December 31, 2023, a deduction
5        shall be allowed in computing base income for
6        distributions to a retired partner to the extent that
7        the partner's distributions are exempt from tax under
8        Section 203(a)(2)(F) of this Act. In addition, the
9        following modifications shall not apply:
10                (i) the standard exemption allowed under
11            Section 204;
12                (ii) the deduction for net losses allowed
13            under Section 207;
14                (iii) in the case of an S corporation, the
15            modification under Section 203(b)(2)(S); and
16                (iv) in the case of a partnership, the
17            modifications under Section 203(d)(2)(H) and
18            Section 203(d)(2)(I).
19            (B) Special rule for tiered partnerships. If a
20        taxpayer making the election under paragraph (1) is a
21        partner of another taxpayer making the election under
22        paragraph (1), net income shall be computed as
23        provided in subparagraph (A), except that the taxpayer
24        shall subtract its distributive share of the net
25        income of the electing partnership (including its
26        distributive share of the net income of the electing

 

 

HB5191- 48 -LRB103 38839 HLH 68976 b

1        partnership derived as a distributive share from
2        electing partnerships in which it is a partner).
3        (4) Credit for entity level tax. Each partner or
4    shareholder of a taxpayer making the election under this
5    Section shall be allowed a credit against the tax imposed
6    under subsections (a) and (b) of Section 201 of this Act
7    for the taxable year of the partnership or Subchapter S
8    corporation for which an election is in effect ending
9    within or with the taxable year of the partner or
10    shareholder in an amount equal to 4.95% times the partner
11    or shareholder's distributive share of the net income of
12    the electing partnership or Subchapter S corporation, but
13    not to exceed the partner's or shareholder's share of the
14    tax imposed under paragraph (1) which is actually paid by
15    the partnership or Subchapter S corporation. If the
16    taxpayer is a partnership or Subchapter S corporation that
17    is itself a partner of a partnership making the election
18    under paragraph (1), the credit under this paragraph shall
19    be allowed to the taxpayer's partners or shareholders (or
20    if the partner is a partnership or Subchapter S
21    corporation then its partners or shareholders) 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. If the
25    amount of the credit allowed under this paragraph exceeds
26    the partner's or shareholder's liability for tax imposed

 

 

HB5191- 49 -LRB103 38839 HLH 68976 b

1    under subsections (a) and (b) of Section 201 of this Act
2    for the taxable year, such excess shall be treated as an
3    overpayment for purposes of Section 909 of this Act.
4        (5) Nonresidents. A nonresident individual who is a
5    partner or shareholder of a partnership or Subchapter S
6    corporation for a taxable year for which an election is in
7    effect under paragraph (1) shall not be required to file
8    an income tax return under this Act for such taxable year
9    if the only source of net income of the individual (or the
10    individual and the individual's spouse in the case of a
11    joint return) is from an entity making the election under
12    paragraph (1) and the credit allowed to the partner or
13    shareholder under paragraph (4) equals or exceeds the
14    individual's liability for the tax imposed under
15    subsections (a) and (b) of Section 201 of this Act for the
16    taxable year.
17        (6) Liability for tax. Except as provided in this
18    paragraph, a partnership or Subchapter S making the
19    election under paragraph (1) is liable for the
20    entity-level tax imposed under paragraph (2). If the
21    electing partnership or corporation fails to pay the full
22    amount of tax deemed assessed under paragraph (2), the
23    partners or shareholders shall be liable to pay the tax
24    assessed (including penalties and interest). Each partner
25    or shareholder shall be liable for the unpaid assessment
26    based on the ratio of the partner's or shareholder's share

 

 

HB5191- 50 -LRB103 38839 HLH 68976 b

1    of the net income of the partnership over the total net
2    income of the partnership. If the partnership or
3    Subchapter S corporation fails to pay the tax assessed
4    (including penalties and interest) and thereafter an
5    amount of such tax is paid by the partners or
6    shareholders, such amount shall not be collected from the
7    partnership or corporation.
8        (7) Foreign tax. For purposes of the credit allowed
9    under Section 601(b)(3) of this Act, tax paid by a
10    partnership or Subchapter S corporation to another state
11    which, as determined by the Department, is substantially
12    similar to the tax imposed under this subsection, shall be
13    considered tax paid by the partner or shareholder to the
14    extent that the partner's or shareholder's share of the
15    income of the partnership or Subchapter S corporation
16    allocated and apportioned to such other state bears to the
17    total income of the partnership or Subchapter S
18    corporation allocated or apportioned to such other state.
19        (8) Suspension of withholding. The provisions of
20    Section 709.5 of this Act shall not apply to a partnership
21    or Subchapter S corporation for the taxable year for which
22    an election under paragraph (1) is in effect.
23        (9) Requirement to pay estimated tax. For each taxable
24    year for which an election under paragraph (1) is in
25    effect, a partnership or Subchapter S corporation is
26    required to pay estimated tax for such taxable year under

 

 

HB5191- 51 -LRB103 38839 HLH 68976 b

1    Sections 803 and 804 of this Act if the amount payable as
2    estimated tax can reasonably be expected to exceed $500.
3        (10) The provisions of this subsection shall apply
4    only with respect to taxable years for which the
5    limitation on individual deductions applies under Section
6    164(b)(6) of the Internal Revenue Code.
7(Source: P.A. 102-558, eff. 8-20-21; 102-658, eff. 8-27-21;
8103-9, eff. 6-7-23; 103-396, eff. 1-1-24; revised 12-12-23.)
 
9    (35 ILCS 5/517 new)
10    Sec. 517. Disqualified foreign adversaries. Each return
11filed under this Act shall, on and after January 1, 2025,
12require the taxpayer to certify as to the taxpayer's status as
13a disqualified foreign adversary, as defined in the Protect
14Illinois Manufacturing and Energy from Foreign Adversaries
15Act.
 
16    (35 ILCS 5/714 new)
17    Sec. 714. Disqualified foreign adversaries.
18Notwithstanding any other provision of law, on and after
19January 1, 2025, a taxpayer that is a disqualified foreign
20adversary, as defined in the Protect Illinois Manufacturing
21and Energy from Foreign Adversaries Act, is subject to an
22excise tax of 80% of the compensation paid to persons employed
23by the taxpayer in the State of Illinois. The tax under this
24Section shall be paid by the taxpayer at the same time as

 

 

HB5191- 52 -LRB103 38839 HLH 68976 b

1withholding taxes are paid under this Article 7; however,
2those amounts shall not be deducted from the compensation paid
3to the employee. Each return filed under this Article 7 shall,
4on and after January 1, 2025, require the taxpayer to certify
5as to the taxpayer's status as a disqualified foreign
6adversary, as defined in the Protect Illinois Manufacturing
7and Energy from Foreign Adversaries Act.
 
8    Section 905. The Use Tax Act is amended by changing
9Section 3-10 as follows:
 
10    (35 ILCS 105/3-10)
11    Sec. 3-10. Rate of tax. Unless otherwise provided in this
12Section, the tax imposed by this Act is at the rate of 6.25% of
13either the selling price or the fair market value, if any, of
14the tangible personal property. In all cases where property
15functionally used or consumed is the same as the property that
16was purchased at retail, then the tax is imposed on the selling
17price of the property. In all cases where property
18functionally used or consumed is a by-product or waste product
19that has been refined, manufactured, or produced from property
20purchased at retail, then the tax is imposed on the lower of
21the fair market value, if any, of the specific property so used
22in this State or on the selling price of the property purchased
23at retail. For purposes of this Section "fair market value"
24means the price at which property would change hands between a

 

 

HB5191- 53 -LRB103 38839 HLH 68976 b

1willing buyer and a willing seller, neither being under any
2compulsion to buy or sell and both having reasonable knowledge
3of the relevant facts. The fair market value shall be
4established by Illinois sales by the taxpayer of the same
5property as that functionally used or consumed, or if there
6are no such sales by the taxpayer, then comparable sales or
7purchases of property of like kind and character in Illinois.
8    Beginning on July 1, 2000 and through December 31, 2000,
9with respect to motor fuel, as defined in Section 1.1 of the
10Motor Fuel Tax Law, and gasohol, as defined in Section 3-40 of
11the Use Tax Act, the tax is imposed at the rate of 1.25%.
12    Beginning on August 6, 2010 through August 15, 2010, and
13beginning again on August 5, 2022 through August 14, 2022,
14with respect to sales tax holiday items as defined in Section
153-6 of this Act, the tax is imposed at the rate of 1.25%.
16    With respect to gasohol, the tax imposed by this Act
17applies to (i) 70% of the proceeds of sales made on or after
18January 1, 1990, and before July 1, 2003, (ii) 80% of the
19proceeds of sales made on or after July 1, 2003 and on or
20before July 1, 2017, (iii) 100% of the proceeds of sales made
21after July 1, 2017 and prior to January 1, 2024, (iv) 90% of
22the proceeds of sales made on or after January 1, 2024 and on
23or before December 31, 2028, and (v) 100% of the proceeds of
24sales made after December 31, 2028. If, at any time, however,
25the tax under this Act on sales of gasohol is imposed at the
26rate of 1.25%, then the tax imposed by this Act applies to 100%

 

 

HB5191- 54 -LRB103 38839 HLH 68976 b

1of the proceeds of sales of gasohol made during that time.
2    With respect to mid-range ethanol blends, the tax imposed
3by this Act applies to (i) 80% of the proceeds of sales made on
4or after January 1, 2024 and on or before December 31, 2028 and
5(ii) 100% of the proceeds of sales made thereafter. If, at any
6time, however, the tax under this Act on sales of mid-range
7ethanol blends is imposed at the rate of 1.25%, then the tax
8imposed by this Act applies to 100% of the proceeds of sales of
9mid-range ethanol blends made during that time.
10    With respect to majority blended ethanol fuel, the tax
11imposed by this Act does not apply to the proceeds of sales
12made on or after July 1, 2003 and on or before December 31,
132028 but applies to 100% of the proceeds of sales made
14thereafter.
15    With respect to biodiesel blends with no less than 1% and
16no more than 10% biodiesel, the tax imposed by this Act applies
17to (i) 80% of the proceeds of sales made on or after July 1,
182003 and on or before December 31, 2018 and (ii) 100% of the
19proceeds of sales made after December 31, 2018 and before
20January 1, 2024. On and after January 1, 2024 and on or before
21December 31, 2030, the taxation of biodiesel, renewable
22diesel, and biodiesel blends shall be as provided in Section
233-5.1. If, at any time, however, the tax under this Act on
24sales of biodiesel blends with no less than 1% and no more than
2510% biodiesel is imposed at the rate of 1.25%, then the tax
26imposed by this Act applies to 100% of the proceeds of sales of

 

 

HB5191- 55 -LRB103 38839 HLH 68976 b

1biodiesel blends with no less than 1% and no more than 10%
2biodiesel made during that time.
3    With respect to biodiesel and biodiesel blends with more
4than 10% but no more than 99% biodiesel, the tax imposed by
5this Act does not apply to the proceeds of sales made on or
6after July 1, 2003 and on or before December 31, 2023. On and
7after January 1, 2024 and on or before December 31, 2030, the
8taxation of biodiesel, renewable diesel, and biodiesel blends
9shall be as provided in Section 3-5.1.
10    Until July 1, 2022 and beginning again on July 1, 2023,
11with respect to food for human consumption that is to be
12consumed off the premises where it is sold (other than
13alcoholic beverages, food consisting of or infused with adult
14use cannabis, soft drinks, and food that has been prepared for
15immediate consumption), the tax is imposed at the rate of 1%.
16Beginning on July 1, 2022 and until July 1, 2023, with respect
17to food for human consumption that is to be consumed off the
18premises where it is sold (other than alcoholic beverages,
19food consisting of or infused with adult use cannabis, soft
20drinks, and food that has been prepared for immediate
21consumption), the tax is imposed at the rate of 0%.
22    With respect to prescription and nonprescription
23medicines, drugs, medical appliances, products classified as
24Class III medical devices by the United States Food and Drug
25Administration that are used for cancer treatment pursuant to
26a prescription, as well as any accessories and components

 

 

HB5191- 56 -LRB103 38839 HLH 68976 b

1related to those devices, modifications to a motor vehicle for
2the purpose of rendering it usable by a person with a
3disability, and insulin, blood sugar testing materials,
4syringes, and needles used by human diabetics, the tax is
5imposed at the rate of 1%. For the purposes of this Section,
6until September 1, 2009: the term "soft drinks" means any
7complete, finished, ready-to-use, non-alcoholic drink, whether
8carbonated or not, including, but not limited to, soda water,
9cola, fruit juice, vegetable juice, carbonated water, and all
10other preparations commonly known as soft drinks of whatever
11kind or description that are contained in any closed or sealed
12bottle, can, carton, or container, regardless of size; but
13"soft drinks" does not include coffee, tea, non-carbonated
14water, infant formula, milk or milk products as defined in the
15Grade A Pasteurized Milk and Milk Products Act, or drinks
16containing 50% or more natural fruit or vegetable juice.
17    Notwithstanding any other provisions of this Act,
18beginning September 1, 2009, "soft drinks" means non-alcoholic
19beverages that contain natural or artificial sweeteners. "Soft
20drinks" does not include beverages that contain milk or milk
21products, soy, rice or similar milk substitutes, or greater
22than 50% of vegetable or fruit juice by volume.
23    Until August 1, 2009, and notwithstanding any other
24provisions of this Act, "food for human consumption that is to
25be consumed off the premises where it is sold" includes all
26food sold through a vending machine, except soft drinks and

 

 

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1food products that are dispensed hot from a vending machine,
2regardless of the location of the vending machine. Beginning
3August 1, 2009, and notwithstanding any other provisions of
4this Act, "food for human consumption that is to be consumed
5off the premises where it is sold" includes all food sold
6through a vending machine, except soft drinks, candy, and food
7products that are dispensed hot from a vending machine,
8regardless of the location of the vending machine.
9    Notwithstanding any other provisions of this Act,
10beginning September 1, 2009, "food for human consumption that
11is to be consumed off the premises where it is sold" does not
12include candy. For purposes of this Section, "candy" means a
13preparation of sugar, honey, or other natural or artificial
14sweeteners in combination with chocolate, fruits, nuts or
15other ingredients or flavorings in the form of bars, drops, or
16pieces. "Candy" does not include any preparation that contains
17flour or requires refrigeration.
18    Notwithstanding any other provisions of this Act,
19beginning September 1, 2009, "nonprescription medicines and
20drugs" does not include grooming and hygiene products. For
21purposes of this Section, "grooming and hygiene products"
22includes, but is not limited to, soaps and cleaning solutions,
23shampoo, toothpaste, mouthwash, antiperspirants, and sun tan
24lotions and screens, unless those products are available by
25prescription only, regardless of whether the products meet the
26definition of "over-the-counter-drugs". For the purposes of

 

 

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1this paragraph, "over-the-counter-drug" means a drug for human
2use that contains a label that identifies the product as a drug
3as required by 21 CFR 201.66. The "over-the-counter-drug"
4label includes:
5        (A) a "Drug Facts" panel; or
6        (B) a statement of the "active ingredient(s)" with a
7    list of those ingredients contained in the compound,
8    substance or preparation.
9    Beginning on January 1, 2014 (the effective date of Public
10Act 98-122), "prescription and nonprescription medicines and
11drugs" includes medical cannabis purchased from a registered
12dispensing organization under the Compassionate Use of Medical
13Cannabis Program Act.
14    As used in this Section, "adult use cannabis" means
15cannabis subject to tax under the Cannabis Cultivation
16Privilege Tax Law and the Cannabis Purchaser Excise Tax Law
17and does not include cannabis subject to tax under the
18Compassionate Use of Medical Cannabis Program Act.
19    If the property that is purchased at retail from a
20retailer is acquired outside Illinois and used outside
21Illinois before being brought to Illinois for use here and is
22taxable under this Act, the "selling price" on which the tax is
23computed shall be reduced by an amount that represents a
24reasonable allowance for depreciation for the period of prior
25out-of-state use.
26    On and after January 1, 2025, in addition to any other tax

 

 

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1imposed by the State, a taxpayer that is a disqualified
2foreign adversary, as defined in the Protect Illinois
3Manufacturing and Energy from Foreign Adversaries Act, is
4subject to an excise tax of 30% of the selling price of any
5tangible property, intangible property, or services used or
6acquired by the disqualified foreign adversary in the State of
7Illinois. Each return filed under this Act shall, on and after
8January 1, 2025, require the taxpayer to certify as to the
9taxpayer's status as a disqualified foreign adversary, as
10defined in the Protect Illinois Manufacturing and Energy from
11Foreign Adversaries Act.
12(Source: P.A. 102-4, eff. 4-27-21; 102-700, Article 20,
13Section 20-5, eff. 4-19-22; 102-700, Article 60, Section
1460-15, eff. 4-19-22; 102-700, Article 65, Section 65-5, eff.
154-19-22; 103-9, eff. 6-7-23; 103-154 eff. 6-30-23.)
 
16    Section 915. The Illinois Administrative Procedure Act is
17amended by adding Section 5-45.55 as follows:
 
18    (5 ILCS 100/5-45.55 new)
19    Sec. 5-45.55. Emergency rulemaking; the Protect Illinois
20Manufacturing and Energy from Foreign Adversaries Act. To
21provide for the expeditious and timely implementation of the
22Protect Illinois Manufacturing and Energy from Foreign
23Adversaries Act, emergency rules implementing the Protect
24Illinois Manufacturing and Energy from Foreign Adversaries Act

 

 

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1may be adopted in accordance with Section 5-45 by the
2Department of Commerce and Economic Opportunity, the
3Department of Revenue, and the Secretary of State. The
4adoption of emergency rules authorized by Section 5-45 and
5this Section is deemed to be necessary for the public
6interest, safety, and welfare.
7    This Section is repealed one year after the effective date
8of this amendatory Act of the 103rd General Assembly.
 
9    Section 999. Effective date. This Act takes effect upon
10becoming law.