Illinois General Assembly - Full Text of SB2531
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Full Text of SB2531  102nd General Assembly

SB2531sam002 102ND GENERAL ASSEMBLY

Sen. Win Stoller

Filed: 4/16/2021

 

 


 

 


 
10200SB2531sam002LRB102 15312 HLH 25342 a

1
AMENDMENT TO SENATE BILL 2531

2    AMENDMENT NO. ______. Amend Senate Bill 2531, AS AMENDED,
3by replacing everything after the enacting clause with the
4following:
 
5    "Section 5. The Illinois Income Tax Act is amended by
6changing Section 201 as follows:
 
7    (35 ILCS 5/201)
8    (Text of Section without the changes made by P.A. 101-8,
9which did not take effect (see Section 99 of P.A. 101-8))
10    Sec. 201. Tax imposed.
11    (a) In general. A tax measured by net income is hereby
12imposed on every individual, corporation, trust and estate for
13each taxable year ending after July 31, 1969 on the privilege
14of earning or receiving income in or as a resident of this
15State. Such tax shall be in addition to all other occupation or
16privilege taxes imposed by this State or by any municipal

 

 

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1corporation or political subdivision thereof.
2    (b) Rates. The tax imposed by subsection (a) of this
3Section shall be determined as follows, except as adjusted by
4subsection (d-1):
5        (1) In the case of an individual, trust or estate, for
6    taxable years ending prior to July 1, 1989, an amount
7    equal to 2 1/2% of the taxpayer's net income for the
8    taxable year.
9        (2) In the case of an individual, trust or estate, for
10    taxable years beginning prior to July 1, 1989 and ending
11    after June 30, 1989, an amount equal to the sum of (i) 2
12    1/2% of the taxpayer's net income for the period prior to
13    July 1, 1989, as calculated under Section 202.3, and (ii)
14    3% of the taxpayer's net income for the period after June
15    30, 1989, as calculated under Section 202.3.
16        (3) In the case of an individual, trust or estate, for
17    taxable years beginning after June 30, 1989, and ending
18    prior to January 1, 2011, an amount equal to 3% of the
19    taxpayer's net income for the taxable year.
20        (4) In the case of an individual, trust, or estate,
21    for taxable years beginning prior to January 1, 2011, and
22    ending after December 31, 2010, an amount equal to the sum
23    of (i) 3% of the taxpayer's net income for the period prior
24    to January 1, 2011, as calculated under Section 202.5, and
25    (ii) 5% of the taxpayer's net income for the period after
26    December 31, 2010, as calculated under Section 202.5.

 

 

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1        (5) In the case of an individual, trust, or estate,
2    for taxable years beginning on or after January 1, 2011,
3    and ending prior to January 1, 2015, an amount equal to 5%
4    of the taxpayer's net income for the taxable year.
5        (5.1) In the case of an individual, trust, or estate,
6    for taxable years beginning prior to January 1, 2015, and
7    ending after December 31, 2014, an amount equal to the sum
8    of (i) 5% of the taxpayer's net income for the period prior
9    to January 1, 2015, as calculated under Section 202.5, and
10    (ii) 3.75% of the taxpayer's net income for the period
11    after December 31, 2014, as calculated under Section
12    202.5.
13        (5.2) In the case of an individual, trust, or estate,
14    for taxable years beginning on or after January 1, 2015,
15    and ending prior to July 1, 2017, an amount equal to 3.75%
16    of the taxpayer's net income for the taxable year.
17        (5.3) In the case of an individual, trust, or estate,
18    for taxable years beginning prior to July 1, 2017, and
19    ending after June 30, 2017, an amount equal to the sum of
20    (i) 3.75% of the taxpayer's net income for the period
21    prior to July 1, 2017, as calculated under Section 202.5,
22    and (ii) 4.95% of the taxpayer's net income for the period
23    after June 30, 2017, as calculated under Section 202.5.
24        (5.4) In the case of an individual, trust, or estate,
25    for taxable years beginning on or after July 1, 2017, an
26    amount equal to 4.95% of the taxpayer's net income for the

 

 

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

 

 

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1        (11) In the case of a corporation, for taxable years
2    beginning prior to January 1, 2015, and ending after
3    December 31, 2014, an amount equal to the sum of (i) 7% of
4    the taxpayer's net income for the period prior to January
5    1, 2015, as calculated under Section 202.5, and (ii) 5.25%
6    of the taxpayer's net income for the period after December
7    31, 2014, as calculated under Section 202.5.
8        (12) In the case of a corporation, for taxable years
9    beginning on or after January 1, 2015, and ending prior to
10    July 1, 2017, an amount equal to 5.25% of the taxpayer's
11    net income for the taxable year.
12        (13) In the case of a corporation, for taxable years
13    beginning prior to July 1, 2017, and ending after June 30,
14    2017, an amount equal to the sum of (i) 5.25% of the
15    taxpayer's net income for the period prior to July 1,
16    2017, as calculated under Section 202.5, and (ii) 7% of
17    the taxpayer's net income for the period after June 30,
18    2017, as calculated under Section 202.5.
19        (14) In the case of a corporation, for taxable years
20    beginning on or after July 1, 2017, an amount equal to 7%
21    of the taxpayer's net income for the taxable year.
22    The rates under this subsection (b) are subject to the
23provisions of Section 201.5.
24    (b-5) Surcharge; sale or exchange of assets, properties,
25and intangibles of organization gaming licensees. For each of
26taxable years 2019 through 2027, a surcharge is imposed on all

 

 

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1taxpayers on income arising from the sale or exchange of
2capital assets, depreciable business property, real property
3used in the trade or business, and Section 197 intangibles (i)
4of an organization licensee under the Illinois Horse Racing
5Act of 1975 and (ii) of an organization gaming licensee under
6the Illinois Gambling Act. The amount of the surcharge is
7equal to the amount of federal income tax liability for the
8taxable year attributable to those sales and exchanges. The
9surcharge imposed shall not apply if:
10        (1) the organization gaming license, organization
11    license, or racetrack property is transferred as a result
12    of any of the following:
13            (A) bankruptcy, a receivership, or a debt
14        adjustment initiated by or against the initial
15        licensee or the substantial owners of the initial
16        licensee;
17            (B) cancellation, revocation, or termination of
18        any such license by the Illinois Gaming Board or the
19        Illinois Racing Board;
20            (C) a determination by the Illinois Gaming Board
21        that transfer of the license is in the best interests
22        of Illinois gaming;
23            (D) the death of an owner of the equity interest in
24        a licensee;
25            (E) the acquisition of a controlling interest in
26        the stock or substantially all of the assets of a

 

 

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1        publicly traded company;
2            (F) a transfer by a parent company to a wholly
3        owned subsidiary; or
4            (G) the transfer or sale to or by one person to
5        another person where both persons were initial owners
6        of the license when the license was issued; or
7        (2) the controlling interest in the organization
8    gaming license, organization license, or racetrack
9    property is transferred in a transaction to lineal
10    descendants in which no gain or loss is recognized or as a
11    result of a transaction in accordance with Section 351 of
12    the Internal Revenue Code in which no gain or loss is
13    recognized; or
14        (3) live horse racing was not conducted in 2010 at a
15    racetrack located within 3 miles of the Mississippi River
16    under a license issued pursuant to the Illinois Horse
17    Racing Act of 1975.
18    The transfer of an organization gaming license,
19organization license, or racetrack property by a person other
20than the initial licensee to receive the organization gaming
21license is not subject to a surcharge. The Department shall
22adopt rules necessary to implement and administer this
23subsection.
24    (c) Personal Property Tax Replacement Income Tax.
25Beginning on July 1, 1979 and thereafter, in addition to such
26income tax, there is also hereby imposed the Personal Property

 

 

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1Tax Replacement Income Tax measured by net income on every
2corporation (including Subchapter S corporations), partnership
3and trust, for each taxable year ending after June 30, 1979.
4Such taxes are imposed on the privilege of earning or
5receiving income in or as a resident of this State. The
6Personal Property Tax Replacement Income Tax shall be in
7addition to the income tax imposed by subsections (a) and (b)
8of this Section and in addition to all other occupation or
9privilege taxes imposed by this State or by any municipal
10corporation or political subdivision thereof.
11    (d) Additional Personal Property Tax Replacement Income
12Tax Rates. The personal property tax replacement income tax
13imposed by this subsection and subsection (c) of this Section
14in the case of a corporation, other than a Subchapter S
15corporation and except as adjusted by subsection (d-1), shall
16be an additional amount equal to 2.85% of such taxpayer's net
17income for the taxable year, except that beginning on January
181, 1981, and thereafter, the rate of 2.85% specified in this
19subsection shall be reduced to 2.5%, and in the case of a
20partnership, trust or a Subchapter S corporation shall be an
21additional amount equal to 1.5% of such taxpayer's net income
22for the taxable year.
23    (d-1) Rate reduction for certain foreign insurers. In the
24case of a foreign insurer, as defined by Section 35A-5 of the
25Illinois Insurance Code, whose state or country of domicile
26imposes on insurers domiciled in Illinois a retaliatory tax

 

 

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1(excluding any insurer whose premiums from reinsurance assumed
2are 50% or more of its total insurance premiums as determined
3under paragraph (2) of subsection (b) of Section 304, except
4that for purposes of this determination premiums from
5reinsurance do not include premiums from inter-affiliate
6reinsurance arrangements), beginning with taxable years ending
7on or after December 31, 1999, the sum of the rates of tax
8imposed by subsections (b) and (d) shall be reduced (but not
9increased) to the rate at which the total amount of tax imposed
10under this Act, net of all credits allowed under this Act,
11shall equal (i) the total amount of tax that would be imposed
12on the foreign insurer's net income allocable to Illinois for
13the taxable year by such foreign insurer's state or country of
14domicile if that net income were subject to all income taxes
15and taxes measured by net income imposed by such foreign
16insurer's state or country of domicile, net of all credits
17allowed or (ii) a rate of zero if no such tax is imposed on
18such income by the foreign insurer's state of domicile. For
19the purposes of this subsection (d-1), an inter-affiliate
20includes a mutual insurer under common management.
21        (1) For the purposes of subsection (d-1), in no event
22    shall the sum of the rates of tax imposed by subsections
23    (b) and (d) be reduced below the rate at which the sum of:
24            (A) the total amount of tax imposed on such
25        foreign insurer under this Act for a taxable year, net
26        of all credits allowed under this Act, plus

 

 

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

 

 

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

 

 

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1    service in Illinois. For tax years ending on or after
2    December 31, 1987, and on or before December 31, 1988, the
3    credit shall be allowed for the tax year in which the
4    property is placed in service, or, if the amount of the
5    credit exceeds the tax liability for that year, whether it
6    exceeds the original liability or the liability as later
7    amended, such excess may be carried forward and applied to
8    the tax liability of the 5 taxable years following the
9    excess credit years if the taxpayer (i) makes investments
10    which cause the creation of a minimum of 2,000 full-time
11    equivalent jobs in Illinois, (ii) is located in an
12    enterprise zone established pursuant to the Illinois
13    Enterprise Zone Act and (iii) is certified by the
14    Department of Commerce and Community Affairs (now
15    Department of Commerce and Economic Opportunity) as
16    complying with the requirements specified in clause (i)
17    and (ii) by July 1, 1986. The Department of Commerce and
18    Community Affairs (now Department of Commerce and Economic
19    Opportunity) shall notify the Department of Revenue of all
20    such certifications immediately. For tax years ending
21    after December 31, 1988, the credit shall be allowed for
22    the tax year in which the property is placed in service,
23    or, if the amount of the credit exceeds the tax liability
24    for that year, whether it exceeds the original liability
25    or the liability as later amended, such excess may be
26    carried forward and applied to the tax liability of the 5

 

 

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1    taxable years following the excess credit years. The
2    credit shall be applied to the earliest year for which
3    there is a liability. If there is credit from more than one
4    tax year that is available to offset a liability, earlier
5    credit shall be applied first.
6        (2) The term "qualified property" means property
7    which:
8            (A) is tangible, whether new or used, including
9        buildings and structural components of buildings and
10        signs that are real property, but not including land
11        or improvements to real property that are not a
12        structural component of a building such as
13        landscaping, sewer lines, local access roads, fencing,
14        parking lots, and other appurtenances;
15            (B) is depreciable pursuant to Section 167 of the
16        Internal Revenue Code, except that "3-year property"
17        as defined in Section 168(c)(2)(A) of that Code is not
18        eligible for the credit provided by this subsection
19        (e);
20            (C) is acquired by purchase as defined in Section
21        179(d) of the Internal Revenue Code;
22            (D) is used in Illinois by a taxpayer who is
23        primarily engaged in manufacturing, or in mining coal
24        or fluorite, or in retailing, or was placed in service
25        on or after July 1, 2006 in a River Edge Redevelopment
26        Zone established pursuant to the River Edge

 

 

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1        Redevelopment Zone Act; and
2            (E) has not previously been used in Illinois in
3        such a manner and by such a person as would qualify for
4        the credit provided by this subsection (e) or
5        subsection (f).
6        (3) For purposes of this subsection (e),
7    "manufacturing" means the material staging and production
8    of tangible personal property by procedures commonly
9    regarded as manufacturing, processing, fabrication, or
10    assembling which changes some existing material into new
11    shapes, new qualities, or new combinations. For purposes
12    of this subsection (e) the term "mining" shall have the
13    same meaning as the term "mining" in Section 613(c) of the
14    Internal Revenue Code. For purposes of this subsection
15    (e), the term "retailing" means the sale of tangible
16    personal property for use or consumption and not for
17    resale, or services rendered in conjunction with the sale
18    of tangible personal property for use or consumption and
19    not for resale. For purposes of this subsection (e),
20    "tangible personal property" has the same meaning as when
21    that term is used in the Retailers' Occupation Tax Act,
22    and, for taxable years ending after December 31, 2008,
23    does not include the generation, transmission, or
24    distribution of electricity.
25        (4) The basis of qualified property shall be the basis
26    used to compute the depreciation deduction for federal

 

 

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1    income tax purposes.
2        (5) If the basis of the property for federal income
3    tax depreciation purposes is increased after it has been
4    placed in service in Illinois by the taxpayer, the amount
5    of such increase shall be deemed property placed in
6    service on the date of such increase in basis.
7        (6) The term "placed in service" shall have the same
8    meaning as under Section 46 of the Internal Revenue Code.
9        (7) If during any taxable year, any property ceases to
10    be qualified property in the hands of the taxpayer within
11    48 months after being placed in service, or the situs of
12    any qualified property is moved outside Illinois within 48
13    months after being placed in service, the Personal
14    Property Tax Replacement Income Tax for such taxable year
15    shall be increased. Such increase shall be determined by
16    (i) recomputing the investment credit which would have
17    been allowed for the year in which credit for such
18    property was originally allowed by eliminating such
19    property from such computation and, (ii) subtracting such
20    recomputed credit from the amount of credit previously
21    allowed. For the purposes of this paragraph (7), a
22    reduction of the basis of qualified property resulting
23    from a redetermination of the purchase price shall be
24    deemed a disposition of qualified property to the extent
25    of such reduction.
26        (8) Unless the investment credit is extended by law,

 

 

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1    the basis of qualified property shall not include costs
2    incurred after December 31, 2018, except for costs
3    incurred pursuant to a binding contract entered into on or
4    before December 31, 2018.
5        (9) Each taxable year ending before December 31, 2000,
6    a partnership may elect to pass through to its partners
7    the credits to which the partnership is entitled under
8    this subsection (e) for the taxable year. A partner may
9    use the credit allocated to him or her under this
10    paragraph only against the tax imposed in subsections (c)
11    and (d) of this Section. If the partnership makes that
12    election, those credits shall be allocated among the
13    partners in the partnership in accordance with the rules
14    set forth in Section 704(b) of the Internal Revenue Code,
15    and the rules promulgated under that Section, and the
16    allocated amount of the credits shall be allowed to the
17    partners for that taxable year. The partnership shall make
18    this election on its Personal Property Tax Replacement
19    Income Tax return for that taxable year. The election to
20    pass through the credits shall be irrevocable.
21        For taxable years ending on or after December 31,
22    2000, a partner that qualifies its partnership for a
23    subtraction under subparagraph (I) of paragraph (2) of
24    subsection (d) of Section 203 or a shareholder that
25    qualifies a Subchapter S corporation for a subtraction
26    under subparagraph (S) of paragraph (2) of subsection (b)

 

 

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1    of Section 203 shall be allowed a credit under this
2    subsection (e) equal to its share of the credit earned
3    under this subsection (e) during the taxable year by the
4    partnership or Subchapter S corporation, determined in
5    accordance with the determination of income and
6    distributive share of income under Sections 702 and 704
7    and Subchapter S of the Internal Revenue Code. This
8    paragraph is exempt from the provisions of Section 250.
9    (f) Investment credit; Enterprise Zone; River Edge
10Redevelopment Zone.
11        (1) A taxpayer shall be allowed a credit against the
12    tax imposed by subsections (a) and (b) of this Section for
13    investment in qualified property which is placed in
14    service in an Enterprise Zone created pursuant to the
15    Illinois Enterprise Zone Act or, for property placed in
16    service on or after July 1, 2006, a River Edge
17    Redevelopment Zone established pursuant to the River Edge
18    Redevelopment Zone Act. For partners, shareholders of
19    Subchapter S corporations, and owners of limited liability
20    companies, if the liability company is treated as a
21    partnership for purposes of federal and State income
22    taxation, there shall be allowed a credit under this
23    subsection (f) to be determined in accordance with the
24    determination of income and distributive share of income
25    under Sections 702 and 704 and Subchapter S of the
26    Internal Revenue Code. The credit shall be .5% of the

 

 

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

 

 

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

 

 

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

 

 

10200SB2531sam002- 21 -LRB102 15312 HLH 25342 a

1    percentage times a fraction, the numerator of which is
2    0.5% and the denominator of which is 1%, but shall not
3    exceed 0.5%.
4        (8) For taxable years beginning on or after January 1,
5    2021, there shall be allowed an Enterprise Zone
6    construction jobs credit against the taxes imposed under
7    subsections (a) and (b) of this Section as provided in
8    Section 13 of the Illinois Enterprise Zone Act.
9        The credit or credits may not reduce the taxpayer's
10    liability to less than zero. If the amount of the credit or
11    credits exceeds the taxpayer's liability, the excess may
12    be carried forward and applied against the taxpayer's
13    liability in succeeding calendar years in the same manner
14    provided under paragraph (4) of Section 211 of this Act.
15    The credit or credits shall be applied to the earliest
16    year for which there is a tax liability. If there are
17    credits from more than one taxable year that are available
18    to offset a liability, the earlier credit shall be applied
19    first.
20        For partners, shareholders of Subchapter S
21    corporations, and owners of limited liability companies,
22    if the liability company is treated as a partnership for
23    the purposes of federal and State income taxation, there
24    shall be allowed a credit under this Section to be
25    determined in accordance with the determination of income
26    and distributive share of income under Sections 702 and

 

 

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1    704 and Subchapter S of the Internal Revenue Code.
2        The total aggregate amount of credits awarded under
3    the Blue Collar Jobs Act (Article 20 of Public Act 101-9
4    this amendatory Act of the 101st General Assembly) shall
5    not exceed $20,000,000 in any State fiscal year.
6        This paragraph (8) is exempt from the provisions of
7    Section 250.
8    (g) (Blank).
9    (h) Investment credit; High Impact Business.
10        (1) Subject to subsections (b) and (b-5) of Section
11    5.5 of the Illinois Enterprise Zone Act, a taxpayer shall
12    be allowed a credit against the tax imposed by subsections
13    (a) and (b) of this Section for investment in qualified
14    property which is placed in service by a Department of
15    Commerce and Economic Opportunity designated High Impact
16    Business. The credit shall be .5% of the basis for such
17    property. The credit shall not be available (i) until the
18    minimum investments in qualified property set forth in
19    subdivision (a)(3)(A) of Section 5.5 of the Illinois
20    Enterprise Zone Act have been satisfied or (ii) until the
21    time authorized in subsection (b-5) of the Illinois
22    Enterprise Zone Act for entities designated as High Impact
23    Businesses under subdivisions (a)(3)(B), (a)(3)(C), and
24    (a)(3)(D) of Section 5.5 of the Illinois Enterprise Zone
25    Act, and shall not be allowed to the extent that it would
26    reduce a taxpayer's liability for the tax imposed by

 

 

10200SB2531sam002- 23 -LRB102 15312 HLH 25342 a

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

 

 

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

 

 

10200SB2531sam002- 25 -LRB102 15312 HLH 25342 a

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

 

 

10200SB2531sam002- 26 -LRB102 15312 HLH 25342 a

1    (h-5) High Impact Business construction constructions jobs
2credit. For taxable years beginning on or after January 1,
32021, there shall also be allowed a High Impact Business
4construction jobs credit against the tax imposed under
5subsections (a) and (b) of this Section as provided in
6subsections (i) and (j) of Section 5.5 of the Illinois
7Enterprise Zone Act.
8    The credit or credits may not reduce the taxpayer's
9liability to less than zero. If the amount of the credit or
10credits exceeds the taxpayer's liability, the excess may be
11carried forward and applied against the taxpayer's liability
12in succeeding calendar years in the manner provided under
13paragraph (4) of Section 211 of this Act. The credit or credits
14shall be applied to the earliest year for which there is a tax
15liability. If there are credits from more than one taxable
16year that are available to offset a liability, the earlier
17credit shall be applied first.
18    For partners, shareholders of Subchapter S corporations,
19and owners of limited liability companies, if the liability
20company is treated as a partnership for the purposes of
21federal and State income taxation, there shall be allowed a
22credit under this Section to be determined in accordance with
23the determination of income and distributive share of income
24under Sections 702 and 704 and Subchapter S of the Internal
25Revenue Code.
26    The total aggregate amount of credits awarded under the

 

 

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

 

 

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1subsection from more than one tax year that is available to
2offset a liability the earliest credit arising under this
3subsection shall be applied first.
4    If, during any taxable year ending on or after December
531, 1986, the tax imposed by subsections (c) and (d) of this
6Section for which a taxpayer has claimed a credit under this
7subsection (i) is reduced, the amount of credit for such tax
8shall also be reduced. Such reduction shall be determined by
9recomputing the credit to take into account the reduced tax
10imposed by subsections (c) and (d). If any portion of the
11reduced amount of credit has been carried to a different
12taxable year, an amended return shall be filed for such
13taxable year to reduce the amount of credit claimed.
14    (j) Training expense credit. Beginning with tax years
15ending on or after December 31, 1986 and prior to December 31,
162003, a taxpayer shall be allowed a credit against the tax
17imposed by subsections (a) and (b) under this Section for all
18amounts paid or accrued, on behalf of all persons employed by
19the taxpayer in Illinois or Illinois residents employed
20outside of Illinois by a taxpayer, for educational or
21vocational training in semi-technical or technical fields or
22semi-skilled or skilled fields, which were deducted from gross
23income in the computation of taxable income. The credit
24against the tax imposed by subsections (a) and (b) shall be
251.6% of such training expenses. For partners, shareholders of
26subchapter S corporations, and owners of limited liability

 

 

10200SB2531sam002- 29 -LRB102 15312 HLH 25342 a

1companies, if the liability company is treated as a
2partnership for purposes of federal and State income taxation,
3there shall be allowed a credit under this subsection (j) to be
4determined in accordance with the determination of income and
5distributive share of income under Sections 702 and 704 and
6subchapter S of the Internal Revenue Code.
7    Any credit allowed under this subsection which is unused
8in the year the credit is earned may be carried forward to each
9of the 5 taxable years following the year for which the credit
10is first computed until it is used. This credit shall be
11applied first to the earliest year for which there is a
12liability. If there is a credit under this subsection from
13more than one tax year that is available to offset a liability,
14the earliest credit arising under this subsection shall be
15applied first. No carryforward credit may be claimed in any
16tax year ending on or after December 31, 2003.
17    (k) Research and development credit. For tax years ending
18after July 1, 1990 and prior to December 31, 2003, and
19beginning again for tax years ending on or after December 31,
202004, and ending prior to January 1, 2027, a taxpayer shall be
21allowed a credit against the tax imposed by subsections (a)
22and (b) of this Section for increasing research activities in
23this State. The credit allowed against the tax imposed by
24subsections (a) and (b) shall be equal to 6 1/2% of the
25qualifying expenditures for increasing research activities in
26this State. For partners, shareholders of subchapter S

 

 

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1corporations, and owners of limited liability companies, if
2the liability company is treated as a partnership for purposes
3of federal and State income taxation, there shall be allowed a
4credit under this subsection to be determined in accordance
5with the determination of income and distributive share of
6income under Sections 702 and 704 and subchapter S of the
7Internal Revenue Code.
8    For purposes of this subsection, "qualifying expenditures"
9means the qualifying expenditures as defined for the federal
10credit for increasing research activities which would be
11allowable under Section 41 of the Internal Revenue Code and
12which are conducted in this State, "qualifying expenditures
13for increasing research activities in this State" means the
14excess of qualifying expenditures for the taxable year in
15which incurred over qualifying expenditures for the base
16period, "qualifying expenditures for the base period" means
17the average of the qualifying expenditures for each year in
18the base period, and "base period" means the 3 taxable years
19immediately preceding the taxable year for which the
20determination is being made.
21    Any credit in excess of the tax liability for the taxable
22year may be carried forward. A taxpayer may elect to have the
23unused credit shown on its final completed return carried over
24as a credit against the tax liability for the following 5
25taxable years or until it has been fully used, whichever
26occurs first; provided that no credit earned in a tax year

 

 

10200SB2531sam002- 31 -LRB102 15312 HLH 25342 a

1ending prior to December 31, 2003 may be carried forward to any
2year ending on or after December 31, 2003.
3    If an unused credit is carried forward to a given year from
42 or more earlier years, that credit arising in the earliest
5year will be applied first against the tax liability for the
6given year. If a tax liability for the given year still
7remains, the credit from the next earliest year will then be
8applied, and so on, until all credits have been used or no tax
9liability for the given year remains. Any remaining unused
10credit or credits then will be carried forward to the next
11following year in which a tax liability is incurred, except
12that no credit can be carried forward to a year which is more
13than 5 years after the year in which the expense for which the
14credit is given was incurred.
15    No inference shall be drawn from Public Act 91-644 this
16amendatory Act of the 91st General Assembly in construing this
17Section for taxable years beginning before January 1, 1999.
18    It is the intent of the General Assembly that the research
19and development credit under this subsection (k) shall apply
20continuously for all tax years ending on or after December 31,
212004 and ending prior to January 1, 2027, including, but not
22limited to, the period beginning on January 1, 2016 and ending
23on July 6, 2017 (the effective date of Public Act 100-22) this
24amendatory Act of the 100th General Assembly. All actions
25taken in reliance on the continuation of the credit under this
26subsection (k) by any taxpayer are hereby validated.

 

 

10200SB2531sam002- 32 -LRB102 15312 HLH 25342 a

1    (l) Environmental Remediation Tax Credit.
2        (i) For tax years ending after December 31, 1997 and
3    on or before December 31, 2001, a taxpayer shall be
4    allowed a credit against the tax imposed by subsections
5    (a) and (b) of this Section for certain amounts paid for
6    unreimbursed eligible remediation costs, as specified in
7    this subsection. For purposes of this Section,
8    "unreimbursed eligible remediation costs" means costs
9    approved by the Illinois Environmental Protection Agency
10    ("Agency") under Section 58.14 of the Environmental
11    Protection Act that were paid in performing environmental
12    remediation at a site for which a No Further Remediation
13    Letter was issued by the Agency and recorded under Section
14    58.10 of the Environmental Protection Act. The credit must
15    be claimed for the taxable year in which Agency approval
16    of the eligible remediation costs is granted. The credit
17    is not available to any taxpayer if the taxpayer or any
18    related party caused or contributed to, in any material
19    respect, a release of regulated substances on, in, or
20    under the site that was identified and addressed by the
21    remedial action pursuant to the Site Remediation Program
22    of the Environmental Protection Act. After the Pollution
23    Control Board rules are adopted pursuant to the Illinois
24    Administrative Procedure Act for the administration and
25    enforcement of Section 58.9 of the Environmental
26    Protection Act, determinations as to credit availability

 

 

10200SB2531sam002- 33 -LRB102 15312 HLH 25342 a

1    for purposes of this Section shall be made consistent with
2    those rules. For purposes of this Section, "taxpayer"
3    includes a person whose tax attributes the taxpayer has
4    succeeded to under Section 381 of the Internal Revenue
5    Code and "related party" includes the persons disallowed a
6    deduction for losses by paragraphs (b), (c), and (f)(1) of
7    Section 267 of the Internal Revenue Code by virtue of
8    being a related taxpayer, as well as any of its partners.
9    The credit allowed against the tax imposed by subsections
10    (a) and (b) shall be equal to 25% of the unreimbursed
11    eligible remediation costs in excess of $100,000 per site,
12    except that the $100,000 threshold shall not apply to any
13    site contained in an enterprise zone as determined by the
14    Department of Commerce and Community Affairs (now
15    Department of Commerce and Economic Opportunity). The
16    total credit allowed shall not exceed $40,000 per year
17    with a maximum total of $150,000 per site. For partners
18    and shareholders of subchapter S corporations, there shall
19    be allowed a credit under this subsection to be determined
20    in accordance with the determination of income and
21    distributive share of income under Sections 702 and 704
22    and subchapter S of the Internal Revenue Code.
23        (ii) A credit allowed under this subsection that is
24    unused in the year the credit is earned may be carried
25    forward to each of the 5 taxable years following the year
26    for which the credit is first earned until it is used. The

 

 

10200SB2531sam002- 34 -LRB102 15312 HLH 25342 a

1    term "unused credit" does not include any amounts of
2    unreimbursed eligible remediation costs in excess of the
3    maximum credit per site authorized under paragraph (i).
4    This credit shall be applied first to the earliest year
5    for which there is a liability. If there is a credit under
6    this subsection from more than one tax year that is
7    available to offset a liability, the earliest credit
8    arising under this subsection shall be applied first. A
9    credit allowed under this subsection may be sold to a
10    buyer as part of a sale of all or part of the remediation
11    site for which the credit was granted. The purchaser of a
12    remediation site and the tax credit shall succeed to the
13    unused credit and remaining carry-forward period of the
14    seller. To perfect the transfer, the assignor shall record
15    the transfer in the chain of title for the site and provide
16    written notice to the Director of the Illinois Department
17    of Revenue of the assignor's intent to sell the
18    remediation site and the amount of the tax credit to be
19    transferred as a portion of the sale. In no event may a
20    credit be transferred to any taxpayer if the taxpayer or a
21    related party would not be eligible under the provisions
22    of subsection (i).
23        (iii) For purposes of this Section, the term "site"
24    shall have the same meaning as under Section 58.2 of the
25    Environmental Protection Act.
26    (m) Education expense credit. Beginning with tax years

 

 

10200SB2531sam002- 35 -LRB102 15312 HLH 25342 a

1ending after December 31, 1999, a taxpayer who is the
2custodian of one or more qualifying pupils shall be allowed a
3credit against the tax imposed by subsections (a) and (b) of
4this Section for qualified education expenses incurred on
5behalf of the qualifying pupils. The credit shall be equal to
625% of qualified education expenses, but in no event may the
7total credit under this subsection claimed by a family that is
8the custodian of qualifying pupils exceed (i) $500 for tax
9years ending prior to December 31, 2017, and (ii) $750 for tax
10years ending on or after December 31, 2017. In no event shall a
11credit under this subsection reduce the taxpayer's liability
12under this Act to less than zero. Notwithstanding any other
13provision of law, for taxable years beginning on or after
14January 1, 2017, no taxpayer may claim a credit under this
15subsection (m) if the taxpayer's adjusted gross income for the
16taxable year exceeds (i) $500,000, in the case of spouses
17filing a joint federal tax return or (ii) $250,000, in the case
18of all other taxpayers. This subsection is exempt from the
19provisions of Section 250 of this Act.
20    For purposes of this subsection:
21    "Qualifying pupils" means individuals who (i) are
22residents of the State of Illinois, (ii) are under the age of
2321 at the close of the school year for which a credit is
24sought, and (iii) during the school year for which a credit is
25sought were full-time pupils enrolled in a kindergarten
26through twelfth grade education program at any school, as

 

 

10200SB2531sam002- 36 -LRB102 15312 HLH 25342 a

1defined in this subsection.
2    "Qualified education expense" means the amount incurred on
3behalf of a qualifying pupil in excess of $250 for tuition,
4book fees, and lab fees at the school in which the pupil is
5enrolled during the regular school year.
6    "School" means any public or nonpublic elementary or
7secondary school in Illinois that is in compliance with Title
8VI of the Civil Rights Act of 1964 and attendance at which
9satisfies the requirements of Section 26-1 of the School Code,
10except that nothing shall be construed to require a child to
11attend any particular public or nonpublic school to qualify
12for the credit under this Section.
13    "Custodian" means, with respect to qualifying pupils, an
14Illinois resident who is a parent, the parents, a legal
15guardian, or the legal guardians of the qualifying pupils.
16    (n) River Edge Redevelopment Zone site remediation tax
17credit.
18        (i) For tax years ending on or after December 31,
19    2006, a taxpayer shall be allowed a credit against the tax
20    imposed by subsections (a) and (b) of this Section for
21    certain amounts paid for unreimbursed eligible remediation
22    costs, as specified in this subsection. For purposes of
23    this Section, "unreimbursed eligible remediation costs"
24    means costs approved by the Illinois Environmental
25    Protection Agency ("Agency") under Section 58.14a of the
26    Environmental Protection Act that were paid in performing

 

 

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

 

 

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1    remediation costs in excess of $100,000 per site.
2        (ii) A credit allowed under this subsection that is
3    unused in the year the credit is earned may be carried
4    forward to each of the 5 taxable years following the year
5    for which the credit is first earned until it is used. This
6    credit shall be applied first to the earliest year for
7    which there is a liability. If there is a credit under this
8    subsection from more than one tax year that is available
9    to offset a liability, the earliest credit arising under
10    this subsection shall be applied first. A credit allowed
11    under this subsection may be sold to a buyer as part of a
12    sale of all or part of the remediation site for which the
13    credit was granted. The purchaser of a remediation site
14    and the tax credit shall succeed to the unused credit and
15    remaining carry-forward period of the seller. To perfect
16    the transfer, the assignor shall record the transfer in
17    the chain of title for the site and provide written notice
18    to the Director of the Illinois Department of Revenue of
19    the assignor's intent to sell the remediation site and the
20    amount of the tax credit to be transferred as a portion of
21    the sale. In no event may a credit be transferred to any
22    taxpayer if the taxpayer or a related party would not be
23    eligible under the provisions of subsection (i).
24        (iii) For purposes of this Section, the term "site"
25    shall have the same meaning as under Section 58.2 of the
26    Environmental Protection Act.

 

 

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1    (o) For each of taxable years during the Compassionate Use
2of Medical Cannabis Program, a surcharge is imposed on all
3taxpayers on income arising from the sale or exchange of
4capital assets, depreciable business property, real property
5used in the trade or business, and Section 197 intangibles of
6an organization registrant under the Compassionate Use of
7Medical Cannabis Program Act. The amount of the surcharge is
8equal to the amount of federal income tax liability for the
9taxable year attributable to those sales and exchanges. The
10surcharge imposed does not apply if:
11        (1) the medical cannabis cultivation center
12    registration, medical cannabis dispensary registration, or
13    the property of a registration is transferred as a result
14    of any of the following:
15            (A) bankruptcy, a receivership, or a debt
16        adjustment initiated by or against the initial
17        registration or the substantial owners of the initial
18        registration;
19            (B) cancellation, revocation, or termination of
20        any registration by the Illinois Department of Public
21        Health;
22            (C) a determination by the Illinois Department of
23        Public Health that transfer of the registration is in
24        the best interests of Illinois qualifying patients as
25        defined by the Compassionate Use of Medical Cannabis
26        Program Act;

 

 

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1            (D) the death of an owner of the equity interest in
2        a registrant;
3            (E) the acquisition of a controlling interest in
4        the stock or substantially all of the assets of a
5        publicly traded company;
6            (F) a transfer by a parent company to a wholly
7        owned subsidiary; or
8            (G) the transfer or sale to or by one person to
9        another person where both persons were initial owners
10        of the registration when the registration was issued;
11        or
12        (2) the cannabis cultivation center registration,
13    medical cannabis dispensary registration, or the
14    controlling interest in a registrant's property is
15    transferred in a transaction to lineal descendants in
16    which no gain or loss is recognized or as a result of a
17    transaction in accordance with Section 351 of the Internal
18    Revenue Code in which no gain or loss is recognized.
19    (p) Pass-through entity tax.
20        (1) For taxable years ending on or after December 31,
21    2021 and beginning prior to January 1, 2026, a partnership
22    (other than a publicly traded partnership under Section
23    7704 of the Internal Revenue Code) or Subchapter S
24    corporation may elect to apply the provisions of this
25    subsection. A separate election shall be made for each
26    taxable year. Such election shall be made at such time,

 

 

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1    and in such form and manner as prescribed by the
2    Department, and, once made, is irrevocable.
3        (2) Entity-level tax. A partnership or Subchapter S
4    corporation electing to apply the provisions of this
5    subsection shall be subject to a tax for the privilege of
6    earning or receiving income in this State in an amount
7    equal to 4.95% of the taxpayer's net income for the
8    taxable year.
9        (3) Net income defined.
10            (A) In general. For purposes of paragraph (2), the
11        term net income has the same meaning as defined in
12        Section 202 of this Act, except that the following
13        provisions shall not apply:
14                (i) the standard exemption allowed under
15            Section 204;
16                (ii) the deduction for net losses allowed
17            under Section 207;
18                (iii) in the case of an S corporation, the
19            modification under Section 203(b)(2)(S); and
20                (iv) in the case of a partnership, the
21                modifications under Section 203(d)(2)(H) and
22                Section 203(d)(2)(I).
23            (B) Special rule for tiered partnerships. If a
24        taxpayer making the election under paragraph (1) is a
25        partner of another taxpayer making the election under
26        paragraph (1), net income shall be computed as

 

 

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

 

 

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

 

 

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

 

 

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1        (9) Requirement to pay estimated tax. For each taxable
2    year for which an election under paragraph (1) is in
3    effect, a partnership or Subchapter S corporation is
4    required to pay estimated tax for such taxable year under
5    Sections 803 and 804 of this Act if the amount payable as
6    estimated tax can reasonably be expected to exceed $500.
7(Source: P.A. 100-22, eff. 7-6-17; 101-9, eff. 6-5-19; 101-31,
8eff. 6-28-19; 101-207, eff. 8-2-19; 101-363, eff. 8-9-19;
9revised 11-18-20.)
 
10    (Text of Section with the changes made by P.A. 101-8,
11which did not take effect (see Section 99 of P.A. 101-8))
12    Sec. 201. Tax imposed.
13    (a) In general. A tax measured by net income is hereby
14imposed on every individual, corporation, trust and estate for
15each taxable year ending after July 31, 1969 on the privilege
16of earning or receiving income in or as a resident of this
17State. Such tax shall be in addition to all other occupation or
18privilege taxes imposed by this State or by any municipal
19corporation or political subdivision thereof.
20    (b) Rates. The tax imposed by subsection (a) of this
21Section shall be determined as follows, except as adjusted by
22subsection (d-1):
23        (1) In the case of an individual, trust or estate, for
24    taxable years ending prior to July 1, 1989, an amount
25    equal to 2 1/2% of the taxpayer's net income for the

 

 

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

 

 

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1    of (i) 5% of the taxpayer's net income for the period prior
2    to January 1, 2015, as calculated under Section 202.5, and
3    (ii) 3.75% of the taxpayer's net income for the period
4    after December 31, 2014, as calculated under Section
5    202.5.
6        (5.2) In the case of an individual, trust, or estate,
7    for taxable years beginning on or after January 1, 2015,
8    and ending prior to July 1, 2017, an amount equal to 3.75%
9    of the taxpayer's net income for the taxable year.
10        (5.3) In the case of an individual, trust, or estate,
11    for taxable years beginning prior to July 1, 2017, and
12    ending after June 30, 2017, an amount equal to the sum of
13    (i) 3.75% of the taxpayer's net income for the period
14    prior to July 1, 2017, as calculated under Section 202.5,
15    and (ii) 4.95% of the taxpayer's net income for the period
16    after June 30, 2017, as calculated under Section 202.5.
17        (5.4) In the case of an individual, trust, or estate,
18    for taxable years beginning on or after July 1, 2017 and
19    beginning prior to January 1, 2021, an amount equal to
20    4.95% of the taxpayer's net income for the taxable year.
21        (5.5) In the case of an individual, trust, or estate,
22    for taxable years beginning on or after January 1, 2021,
23    an amount calculated under the rate structure set forth in
24    Section 201.1.
25        (6) In the case of a corporation, for taxable years
26    ending prior to July 1, 1989, an amount equal to 4% of the

 

 

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

 

 

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1    the taxpayer's net income for the period prior to January
2    1, 2015, as calculated under Section 202.5, and (ii) 5.25%
3    of the taxpayer's net income for the period after December
4    31, 2014, as calculated under Section 202.5.
5        (12) In the case of a corporation, for taxable years
6    beginning on or after January 1, 2015, and ending prior to
7    July 1, 2017, an amount equal to 5.25% of the taxpayer's
8    net income for the taxable year.
9        (13) In the case of a corporation, for taxable years
10    beginning prior to July 1, 2017, and ending after June 30,
11    2017, an amount equal to the sum of (i) 5.25% of the
12    taxpayer's net income for the period prior to July 1,
13    2017, as calculated under Section 202.5, and (ii) 7% of
14    the taxpayer's net income for the period after June 30,
15    2017, as calculated under Section 202.5.
16        (14) In the case of a corporation, for taxable years
17    beginning on or after July 1, 2017 and beginning prior to
18    January 1, 2021, an amount equal to 7% of the taxpayer's
19    net income for the taxable year.
20        (15) In the case of a corporation, for taxable years
21    beginning on or after January 1, 2021, an amount equal to
22    7.99% of the taxpayer's net income for the taxable year.
23    The rates under this subsection (b) are subject to the
24provisions of Section 201.5.
25    (b-5) Surcharge; sale or exchange of assets, properties,
26and intangibles of organization gaming licensees. For each of

 

 

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1taxable years 2019 through 2027, a surcharge is imposed on all
2taxpayers on income arising from the sale or exchange of
3capital assets, depreciable business property, real property
4used in the trade or business, and Section 197 intangibles (i)
5of an organization licensee under the Illinois Horse Racing
6Act of 1975 and (ii) of an organization gaming licensee under
7the Illinois Gambling Act. The amount of the surcharge is
8equal to the amount of federal income tax liability for the
9taxable year attributable to those sales and exchanges. The
10surcharge imposed shall not apply if:
11        (1) the organization gaming license, organization
12    license, or racetrack property is transferred as a result
13    of any of the following:
14            (A) bankruptcy, a receivership, or a debt
15        adjustment initiated by or against the initial
16        licensee or the substantial owners of the initial
17        licensee;
18            (B) cancellation, revocation, or termination of
19        any such license by the Illinois Gaming Board or the
20        Illinois Racing Board;
21            (C) a determination by the Illinois Gaming Board
22        that transfer of the license is in the best interests
23        of Illinois gaming;
24            (D) the death of an owner of the equity interest in
25        a licensee;
26            (E) the acquisition of a controlling interest in

 

 

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1        the stock or substantially all of the assets of a
2        publicly traded company;
3            (F) a transfer by a parent company to a wholly
4        owned subsidiary; or
5            (G) the transfer or sale to or by one person to
6        another person where both persons were initial owners
7        of the license when the license was issued; or
8        (2) the controlling interest in the organization
9    gaming license, organization license, or racetrack
10    property is transferred in a transaction to lineal
11    descendants in which no gain or loss is recognized or as a
12    result of a transaction in accordance with Section 351 of
13    the Internal Revenue Code in which no gain or loss is
14    recognized; or
15        (3) live horse racing was not conducted in 2010 at a
16    racetrack located within 3 miles of the Mississippi River
17    under a license issued pursuant to the Illinois Horse
18    Racing Act of 1975.
19    The transfer of an organization gaming license,
20organization license, or racetrack property by a person other
21than the initial licensee to receive the organization gaming
22license is not subject to a surcharge. The Department shall
23adopt rules necessary to implement and administer this
24subsection.
25    (c) Personal Property Tax Replacement Income Tax.
26Beginning on July 1, 1979 and thereafter, in addition to such

 

 

10200SB2531sam002- 52 -LRB102 15312 HLH 25342 a

1income tax, there is also hereby imposed the Personal Property
2Tax Replacement Income Tax measured by net income on every
3corporation (including Subchapter S corporations), partnership
4and trust, for each taxable year ending after June 30, 1979.
5Such taxes are imposed on the privilege of earning or
6receiving income in or as a resident of this State. The
7Personal Property Tax Replacement Income Tax shall be in
8addition to the income tax imposed by subsections (a) and (b)
9of this Section and in addition to all other occupation or
10privilege taxes imposed by this State or by any municipal
11corporation or political subdivision thereof.
12    (d) Additional Personal Property Tax Replacement Income
13Tax Rates. The personal property tax replacement income tax
14imposed by this subsection and subsection (c) of this Section
15in the case of a corporation, other than a Subchapter S
16corporation and except as adjusted by subsection (d-1), shall
17be an additional amount equal to 2.85% of such taxpayer's net
18income for the taxable year, except that beginning on January
191, 1981, and thereafter, the rate of 2.85% specified in this
20subsection shall be reduced to 2.5%, and in the case of a
21partnership, trust or a Subchapter S corporation shall be an
22additional amount equal to 1.5% of such taxpayer's net income
23for the taxable year.
24    (d-1) Rate reduction for certain foreign insurers. In the
25case of a foreign insurer, as defined by Section 35A-5 of the
26Illinois Insurance Code, whose state or country of domicile

 

 

10200SB2531sam002- 53 -LRB102 15312 HLH 25342 a

1imposes on insurers domiciled in Illinois a retaliatory tax
2(excluding any insurer whose premiums from reinsurance assumed
3are 50% or more of its total insurance premiums as determined
4under paragraph (2) of subsection (b) of Section 304, except
5that for purposes of this determination premiums from
6reinsurance do not include premiums from inter-affiliate
7reinsurance arrangements), beginning with taxable years ending
8on or after December 31, 1999, the sum of the rates of tax
9imposed by subsections (b) and (d) shall be reduced (but not
10increased) to the rate at which the total amount of tax imposed
11under this Act, net of all credits allowed under this Act,
12shall equal (i) the total amount of tax that would be imposed
13on the foreign insurer's net income allocable to Illinois for
14the taxable year by such foreign insurer's state or country of
15domicile if that net income were subject to all income taxes
16and taxes measured by net income imposed by such foreign
17insurer's state or country of domicile, net of all credits
18allowed or (ii) a rate of zero if no such tax is imposed on
19such income by the foreign insurer's state of domicile. For
20the purposes of this subsection (d-1), an inter-affiliate
21includes a mutual insurer under common management.
22        (1) For the purposes of subsection (d-1), in no event
23    shall the sum of the rates of tax imposed by subsections
24    (b) and (d) be reduced below the rate at which the sum of:
25            (A) the total amount of tax imposed on such
26        foreign insurer under this Act for a taxable year, net

 

 

10200SB2531sam002- 54 -LRB102 15312 HLH 25342 a

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

 

 

10200SB2531sam002- 55 -LRB102 15312 HLH 25342 a

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

 

 

10200SB2531sam002- 56 -LRB102 15312 HLH 25342 a

1    other than the year in which the property was placed in
2    service in Illinois. For tax years ending on or after
3    December 31, 1987, and on or before December 31, 1988, the
4    credit shall be allowed for the tax year in which the
5    property is placed in service, or, if the amount of the
6    credit exceeds the tax liability for that year, whether it
7    exceeds the original liability or the liability as later
8    amended, such excess may be carried forward and applied to
9    the tax liability of the 5 taxable years following the
10    excess credit years if the taxpayer (i) makes investments
11    which cause the creation of a minimum of 2,000 full-time
12    equivalent jobs in Illinois, (ii) is located in an
13    enterprise zone established pursuant to the Illinois
14    Enterprise Zone Act and (iii) is certified by the
15    Department of Commerce and Community Affairs (now
16    Department of Commerce and Economic Opportunity) as
17    complying with the requirements specified in clause (i)
18    and (ii) by July 1, 1986. The Department of Commerce and
19    Community Affairs (now Department of Commerce and Economic
20    Opportunity) shall notify the Department of Revenue of all
21    such certifications immediately. For tax years ending
22    after December 31, 1988, the credit shall be allowed for
23    the tax year in which the property is placed in service,
24    or, if the amount of the credit exceeds the tax liability
25    for that year, whether it exceeds the original liability
26    or the liability as later amended, such excess may be

 

 

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1    carried forward and applied to the tax liability of the 5
2    taxable years following the excess credit years. The
3    credit shall be applied to the earliest year for which
4    there is a liability. If there is credit from more than one
5    tax year that is available to offset a liability, earlier
6    credit shall be applied first.
7        (2) The term "qualified property" means property
8    which:
9            (A) is tangible, whether new or used, including
10        buildings and structural components of buildings and
11        signs that are real property, but not including land
12        or improvements to real property that are not a
13        structural component of a building such as
14        landscaping, sewer lines, local access roads, fencing,
15        parking lots, and other appurtenances;
16            (B) is depreciable pursuant to Section 167 of the
17        Internal Revenue Code, except that "3-year property"
18        as defined in Section 168(c)(2)(A) of that Code is not
19        eligible for the credit provided by this subsection
20        (e);
21            (C) is acquired by purchase as defined in Section
22        179(d) of the Internal Revenue Code;
23            (D) is used in Illinois by a taxpayer who is
24        primarily engaged in manufacturing, or in mining coal
25        or fluorite, or in retailing, or was placed in service
26        on or after July 1, 2006 in a River Edge Redevelopment

 

 

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1        Zone established pursuant to the River Edge
2        Redevelopment Zone Act; and
3            (E) has not previously been used in Illinois in
4        such a manner and by such a person as would qualify for
5        the credit provided by this subsection (e) or
6        subsection (f).
7        (3) For purposes of this subsection (e),
8    "manufacturing" means the material staging and production
9    of tangible personal property by procedures commonly
10    regarded as manufacturing, processing, fabrication, or
11    assembling which changes some existing material into new
12    shapes, new qualities, or new combinations. For purposes
13    of this subsection (e) the term "mining" shall have the
14    same meaning as the term "mining" in Section 613(c) of the
15    Internal Revenue Code. For purposes of this subsection
16    (e), the term "retailing" means the sale of tangible
17    personal property for use or consumption and not for
18    resale, or services rendered in conjunction with the sale
19    of tangible personal property for use or consumption and
20    not for resale. For purposes of this subsection (e),
21    "tangible personal property" has the same meaning as when
22    that term is used in the Retailers' Occupation Tax Act,
23    and, for taxable years ending after December 31, 2008,
24    does not include the generation, transmission, or
25    distribution of electricity.
26        (4) The basis of qualified property shall be the basis

 

 

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1    used to compute the depreciation deduction for federal
2    income tax purposes.
3        (5) If the basis of the property for federal income
4    tax depreciation purposes is increased after it has been
5    placed in service in Illinois by the taxpayer, the amount
6    of such increase shall be deemed property placed in
7    service on the date of such increase in basis.
8        (6) The term "placed in service" shall have the same
9    meaning as under Section 46 of the Internal Revenue Code.
10        (7) If during any taxable year, any property ceases to
11    be qualified property in the hands of the taxpayer within
12    48 months after being placed in service, or the situs of
13    any qualified property is moved outside Illinois within 48
14    months after being placed in service, the Personal
15    Property Tax Replacement Income Tax for such taxable year
16    shall be increased. Such increase shall be determined by
17    (i) recomputing the investment credit which would have
18    been allowed for the year in which credit for such
19    property was originally allowed by eliminating such
20    property from such computation and, (ii) subtracting such
21    recomputed credit from the amount of credit previously
22    allowed. For the purposes of this paragraph (7), a
23    reduction of the basis of qualified property resulting
24    from a redetermination of the purchase price shall be
25    deemed a disposition of qualified property to the extent
26    of such reduction.

 

 

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1        (8) Unless the investment credit is extended by law,
2    the basis of qualified property shall not include costs
3    incurred after December 31, 2018, except for costs
4    incurred pursuant to a binding contract entered into on or
5    before December 31, 2018.
6        (9) Each taxable year ending before December 31, 2000,
7    a partnership may elect to pass through to its partners
8    the credits to which the partnership is entitled under
9    this subsection (e) for the taxable year. A partner may
10    use the credit allocated to him or her under this
11    paragraph only against the tax imposed in subsections (c)
12    and (d) of this Section. If the partnership makes that
13    election, those credits shall be allocated among the
14    partners in the partnership in accordance with the rules
15    set forth in Section 704(b) of the Internal Revenue Code,
16    and the rules promulgated under that Section, and the
17    allocated amount of the credits shall be allowed to the
18    partners for that taxable year. The partnership shall make
19    this election on its Personal Property Tax Replacement
20    Income Tax return for that taxable year. The election to
21    pass through the credits shall be irrevocable.
22        For taxable years ending on or after December 31,
23    2000, a partner that qualifies its partnership for a
24    subtraction under subparagraph (I) of paragraph (2) of
25    subsection (d) of Section 203 or a shareholder that
26    qualifies a Subchapter S corporation for a subtraction

 

 

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1    under subparagraph (S) of paragraph (2) of subsection (b)
2    of Section 203 shall be allowed a credit under this
3    subsection (e) equal to its share of the credit earned
4    under this subsection (e) during the taxable year by the
5    partnership or Subchapter S corporation, determined in
6    accordance with the determination of income and
7    distributive share of income under Sections 702 and 704
8    and Subchapter S of the Internal Revenue Code. This
9    paragraph is exempt from the provisions of Section 250.
10    (f) Investment credit; Enterprise Zone; River Edge
11Redevelopment Zone.
12        (1) A taxpayer shall be allowed a credit against the
13    tax imposed by subsections (a) and (b) of this Section for
14    investment in qualified property which is placed in
15    service in an Enterprise Zone created pursuant to the
16    Illinois Enterprise Zone Act or, for property placed in
17    service on or after July 1, 2006, a River Edge
18    Redevelopment Zone established pursuant to the River Edge
19    Redevelopment Zone Act. For partners, shareholders of
20    Subchapter S corporations, and owners of limited liability
21    companies, if the liability company is treated as a
22    partnership for purposes of federal and State income
23    taxation, there shall be allowed a credit under this
24    subsection (f) to be determined in accordance with the
25    determination of income and distributive share of income
26    under Sections 702 and 704 and Subchapter S of the

 

 

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

 

 

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

 

 

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

 

 

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

 

 

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1    and distributive share of income under Sections 702 and
2    704 and Subchapter S of the Internal Revenue Code.
3        The total aggregate amount of credits awarded under
4    the Blue Collar Jobs Act (Article 20 of Public Act 101-9
5    this amendatory Act of the 101st General Assembly) shall
6    not exceed $20,000,000 in any State fiscal year.
7        This paragraph (8) is exempt from the provisions of
8    Section 250.
9    (g) (Blank).
10    (h) Investment credit; High Impact Business.
11        (1) Subject to subsections (b) and (b-5) of Section
12    5.5 of the Illinois Enterprise Zone Act, a taxpayer shall
13    be allowed a credit against the tax imposed by subsections
14    (a) and (b) of this Section for investment in qualified
15    property which is placed in service by a Department of
16    Commerce and Economic Opportunity designated High Impact
17    Business. The credit shall be .5% of the basis for such
18    property. The credit shall not be available (i) until the
19    minimum investments in qualified property set forth in
20    subdivision (a)(3)(A) of Section 5.5 of the Illinois
21    Enterprise Zone Act have been satisfied or (ii) until the
22    time authorized in subsection (b-5) of the Illinois
23    Enterprise Zone Act for entities designated as High Impact
24    Businesses under subdivisions (a)(3)(B), (a)(3)(C), and
25    (a)(3)(D) of Section 5.5 of the Illinois Enterprise Zone
26    Act, and shall not be allowed to the extent that it would

 

 

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

 

 

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

 

 

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

 

 

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1    credit received by the taxpayer under this subsection (h).
2    (h-5) High Impact Business construction constructions jobs
3credit. For taxable years beginning on or after January 1,
42021, there shall also be allowed a High Impact Business
5construction jobs credit against the tax imposed under
6subsections (a) and (b) of this Section as provided in
7subsections (i) and (j) of Section 5.5 of the Illinois
8Enterprise Zone Act.
9    The credit or credits may not reduce the taxpayer's
10liability to less than zero. If the amount of the credit or
11credits exceeds the taxpayer's liability, the excess may be
12carried forward and applied against the taxpayer's liability
13in succeeding calendar years in the manner provided under
14paragraph (4) of Section 211 of this Act. The credit or credits
15shall be applied to the earliest year for which there is a tax
16liability. If there are credits from more than one taxable
17year that are available to offset a liability, the earlier
18credit shall be applied first.
19    For partners, shareholders of Subchapter S corporations,
20and owners of limited liability companies, if the liability
21company is treated as a partnership for the purposes of
22federal and State income taxation, there shall be allowed a
23credit under this Section to be determined in accordance with
24the determination of income and distributive share of income
25under Sections 702 and 704 and Subchapter S of the Internal
26Revenue Code.

 

 

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

 

 

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

 

 

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1subchapter S corporations, and owners of limited liability
2companies, if the liability company is treated as a
3partnership for purposes of federal and State income taxation,
4there shall be allowed a credit under this subsection (j) to be
5determined in accordance with the determination of income and
6distributive share of income under Sections 702 and 704 and
7subchapter S of the Internal Revenue Code.
8    Any credit allowed under this subsection which is unused
9in the year the credit is earned may be carried forward to each
10of the 5 taxable years following the year for which the credit
11is first computed until it is used. This credit shall be
12applied first to the earliest year for which there is a
13liability. If there is a credit under this subsection from
14more than one tax year that is available to offset a liability,
15the earliest credit arising under this subsection shall be
16applied first. No carryforward credit may be claimed in any
17tax year ending on or after December 31, 2003.
18    (k) Research and development credit. For tax years ending
19after July 1, 1990 and prior to December 31, 2003, and
20beginning again for tax years ending on or after December 31,
212004, and ending prior to January 1, 2027, a taxpayer shall be
22allowed a credit against the tax imposed by subsections (a)
23and (b) of this Section for increasing research activities in
24this State. The credit allowed against the tax imposed by
25subsections (a) and (b) shall be equal to 6 1/2% of the
26qualifying expenditures for increasing research activities in

 

 

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1this State. For partners, shareholders of subchapter S
2corporations, and owners of limited liability companies, if
3the liability company is treated as a partnership for purposes
4of federal and State income taxation, there shall be allowed a
5credit under this subsection to be determined in accordance
6with the determination of income and distributive share of
7income under Sections 702 and 704 and subchapter S of the
8Internal Revenue Code.
9    For purposes of this subsection, "qualifying expenditures"
10means the qualifying expenditures as defined for the federal
11credit for increasing research activities which would be
12allowable under Section 41 of the Internal Revenue Code and
13which are conducted in this State, "qualifying expenditures
14for increasing research activities in this State" means the
15excess of qualifying expenditures for the taxable year in
16which incurred over qualifying expenditures for the base
17period, "qualifying expenditures for the base period" means
18the average of the qualifying expenditures for each year in
19the base period, and "base period" means the 3 taxable years
20immediately preceding the taxable year for which the
21determination is being made.
22    Any credit in excess of the tax liability for the taxable
23year may be carried forward. A taxpayer may elect to have the
24unused credit shown on its final completed return carried over
25as a credit against the tax liability for the following 5
26taxable years or until it has been fully used, whichever

 

 

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1occurs first; provided that no credit earned in a tax year
2ending prior to December 31, 2003 may be carried forward to any
3year ending on or after December 31, 2003.
4    If an unused credit is carried forward to a given year from
52 or more earlier years, that credit arising in the earliest
6year will be applied first against the tax liability for the
7given year. If a tax liability for the given year still
8remains, the credit from the next earliest year will then be
9applied, and so on, until all credits have been used or no tax
10liability for the given year remains. Any remaining unused
11credit or credits then will be carried forward to the next
12following year in which a tax liability is incurred, except
13that no credit can be carried forward to a year which is more
14than 5 years after the year in which the expense for which the
15credit is given was incurred.
16    No inference shall be drawn from Public Act 91-644 this
17amendatory Act of the 91st General Assembly in construing this
18Section for taxable years beginning before January 1, 1999.
19    It is the intent of the General Assembly that the research
20and development credit under this subsection (k) shall apply
21continuously for all tax years ending on or after December 31,
222004 and ending prior to January 1, 2027, including, but not
23limited to, the period beginning on January 1, 2016 and ending
24on July 6, 2017 (the effective date of Public Act 100-22) this
25amendatory Act of the 100th General Assembly. All actions
26taken in reliance on the continuation of the credit under this

 

 

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1subsection (k) by any taxpayer are hereby validated.
2    (l) Environmental Remediation Tax Credit.
3        (i) For tax years ending after December 31, 1997 and
4    on or before December 31, 2001, a taxpayer shall be
5    allowed a credit against the tax imposed by subsections
6    (a) and (b) of this Section for certain amounts paid for
7    unreimbursed eligible remediation costs, as specified in
8    this subsection. For purposes of this Section,
9    "unreimbursed eligible remediation costs" means costs
10    approved by the Illinois Environmental Protection Agency
11    ("Agency") under Section 58.14 of the Environmental
12    Protection Act that were paid in performing environmental
13    remediation at a site for which a No Further Remediation
14    Letter was issued by the Agency and recorded under Section
15    58.10 of the Environmental Protection Act. The credit must
16    be claimed for the taxable year in which Agency approval
17    of the eligible remediation costs is granted. The credit
18    is not available to any taxpayer if the taxpayer or any
19    related party caused or contributed to, in any material
20    respect, a release of regulated substances on, in, or
21    under the site that was identified and addressed by the
22    remedial action pursuant to the Site Remediation Program
23    of the Environmental Protection Act. After the Pollution
24    Control Board rules are adopted pursuant to the Illinois
25    Administrative Procedure Act for the administration and
26    enforcement of Section 58.9 of the Environmental

 

 

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1    Protection Act, determinations as to credit availability
2    for purposes of this Section shall be made consistent with
3    those rules. For purposes of this Section, "taxpayer"
4    includes a person whose tax attributes the taxpayer has
5    succeeded to under Section 381 of the Internal Revenue
6    Code and "related party" includes the persons disallowed a
7    deduction for losses by paragraphs (b), (c), and (f)(1) of
8    Section 267 of the Internal Revenue Code by virtue of
9    being a related taxpayer, as well as any of its partners.
10    The credit allowed against the tax imposed by subsections
11    (a) and (b) shall be equal to 25% of the unreimbursed
12    eligible remediation costs in excess of $100,000 per site,
13    except that the $100,000 threshold shall not apply to any
14    site contained in an enterprise zone as determined by the
15    Department of Commerce and Community Affairs (now
16    Department of Commerce and Economic Opportunity). The
17    total credit allowed shall not exceed $40,000 per year
18    with a maximum total of $150,000 per site. For partners
19    and shareholders of subchapter S corporations, there shall
20    be allowed a credit under this subsection to be determined
21    in accordance with the determination of income and
22    distributive share of income under Sections 702 and 704
23    and subchapter S of the Internal Revenue Code.
24        (ii) A credit allowed under this subsection that is
25    unused in the year the credit is earned may be carried
26    forward to each of the 5 taxable years following the year

 

 

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1    for which the credit is first earned until it is used. The
2    term "unused credit" does not include any amounts of
3    unreimbursed eligible remediation costs in excess of the
4    maximum credit per site authorized under paragraph (i).
5    This credit shall be applied first to the earliest year
6    for which there is a liability. If there is a credit under
7    this subsection from more than one tax year that is
8    available to offset a liability, the earliest credit
9    arising under this subsection shall be applied first. A
10    credit allowed under this subsection may be sold to a
11    buyer as part of a sale of all or part of the remediation
12    site for which the credit was granted. The purchaser of a
13    remediation site and the tax credit shall succeed to the
14    unused credit and remaining carry-forward period of the
15    seller. To perfect the transfer, the assignor shall record
16    the transfer in the chain of title for the site and provide
17    written notice to the Director of the Illinois Department
18    of Revenue of the assignor's intent to sell the
19    remediation site and the amount of the tax credit to be
20    transferred as a portion of the sale. In no event may a
21    credit be transferred to any taxpayer if the taxpayer or a
22    related party would not be eligible under the provisions
23    of subsection (i).
24        (iii) For purposes of this Section, the term "site"
25    shall have the same meaning as under Section 58.2 of the
26    Environmental Protection Act.

 

 

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1    (m) Education expense credit. Beginning with tax years
2ending after December 31, 1999, a taxpayer who is the
3custodian of one or more qualifying pupils shall be allowed a
4credit against the tax imposed by subsections (a) and (b) of
5this Section for qualified education expenses incurred on
6behalf of the qualifying pupils. The credit shall be equal to
725% of qualified education expenses, but in no event may the
8total credit under this subsection claimed by a family that is
9the custodian of qualifying pupils exceed (i) $500 for tax
10years ending prior to December 31, 2017, and (ii) $750 for tax
11years ending on or after December 31, 2017. In no event shall a
12credit under this subsection reduce the taxpayer's liability
13under this Act to less than zero. Notwithstanding any other
14provision of law, for taxable years beginning on or after
15January 1, 2017, no taxpayer may claim a credit under this
16subsection (m) if the taxpayer's adjusted gross income for the
17taxable year exceeds (i) $500,000, in the case of spouses
18filing a joint federal tax return or (ii) $250,000, in the case
19of all other taxpayers. This subsection is exempt from the
20provisions of Section 250 of this Act.
21    For purposes of this subsection:
22    "Qualifying pupils" means individuals who (i) are
23residents of the State of Illinois, (ii) are under the age of
2421 at the close of the school year for which a credit is
25sought, and (iii) during the school year for which a credit is
26sought were full-time pupils enrolled in a kindergarten

 

 

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1through twelfth grade education program at any school, as
2defined in this subsection.
3    "Qualified education expense" means the amount incurred on
4behalf of a qualifying pupil in excess of $250 for tuition,
5book fees, and lab fees at the school in which the pupil is
6enrolled during the regular school year.
7    "School" means any public or nonpublic elementary or
8secondary school in Illinois that is in compliance with Title
9VI of the Civil Rights Act of 1964 and attendance at which
10satisfies the requirements of Section 26-1 of the School Code,
11except that nothing shall be construed to require a child to
12attend any particular public or nonpublic school to qualify
13for the credit under this Section.
14    "Custodian" means, with respect to qualifying pupils, an
15Illinois resident who is a parent, the parents, a legal
16guardian, or the legal guardians of the qualifying pupils.
17    (n) River Edge Redevelopment Zone site remediation tax
18credit.
19        (i) For tax years ending on or after December 31,
20    2006, a taxpayer shall be allowed a credit against the tax
21    imposed by subsections (a) and (b) of this Section for
22    certain amounts paid for unreimbursed eligible remediation
23    costs, as specified in this subsection. For purposes of
24    this Section, "unreimbursed eligible remediation costs"
25    means costs approved by the Illinois Environmental
26    Protection Agency ("Agency") under Section 58.14a of the

 

 

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1    Environmental Protection Act that were paid in performing
2    environmental remediation at a site within a River Edge
3    Redevelopment Zone 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. Determinations as to
14    credit availability for purposes of this Section shall be
15    made consistent with rules adopted by the Pollution
16    Control Board pursuant to the Illinois Administrative
17    Procedure Act for the administration and enforcement of
18    Section 58.9 of the Environmental Protection Act. For
19    purposes of this Section, "taxpayer" includes a person
20    whose tax attributes the taxpayer has succeeded to under
21    Section 381 of the Internal Revenue Code and "related
22    party" includes the persons disallowed a deduction for
23    losses by paragraphs (b), (c), and (f)(1) of Section 267
24    of the Internal Revenue Code by virtue of being a related
25    taxpayer, as well as any of its partners. The credit
26    allowed against the tax imposed by subsections (a) and (b)

 

 

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1    shall be equal to 25% of the unreimbursed eligible
2    remediation costs in excess of $100,000 per site.
3        (ii) A credit allowed under this subsection that is
4    unused in the year the credit is earned may be carried
5    forward to each of the 5 taxable years following the year
6    for which the credit is first earned until it is used. This
7    credit shall be applied first to the earliest year for
8    which there is a liability. If there is a credit under this
9    subsection from more than one tax year that is available
10    to offset a liability, the earliest credit arising under
11    this subsection shall be applied first. A credit allowed
12    under this subsection may be sold to a buyer as part of a
13    sale of all or part of the remediation site for which the
14    credit was granted. The purchaser of a remediation site
15    and the tax credit shall succeed to the unused credit and
16    remaining carry-forward period of the seller. To perfect
17    the transfer, the assignor shall record the transfer in
18    the chain of title for the site and provide written notice
19    to the Director of the Illinois Department of Revenue of
20    the assignor's intent to sell the remediation site and the
21    amount of the tax credit to be transferred as a portion of
22    the sale. In no event may a credit be transferred to any
23    taxpayer if the taxpayer or a related party would not be
24    eligible under the provisions of subsection (i).
25        (iii) For purposes of this Section, the term "site"
26    shall have the same meaning as under Section 58.2 of the

 

 

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1    Environmental Protection Act.
2    (o) For each of taxable years during the Compassionate Use
3of Medical Cannabis Program, a surcharge is imposed on all
4taxpayers on income arising from the sale or exchange of
5capital assets, depreciable business property, real property
6used in the trade or business, and Section 197 intangibles of
7an organization registrant under the Compassionate Use of
8Medical Cannabis Program Act. The amount of the surcharge is
9equal to the amount of federal income tax liability for the
10taxable year attributable to those sales and exchanges. The
11surcharge imposed does not apply if:
12        (1) the medical cannabis cultivation center
13    registration, medical cannabis dispensary registration, or
14    the property of a registration is transferred as a result
15    of any of the following:
16            (A) bankruptcy, a receivership, or a debt
17        adjustment initiated by or against the initial
18        registration or the substantial owners of the initial
19        registration;
20            (B) cancellation, revocation, or termination of
21        any registration by the Illinois Department of Public
22        Health;
23            (C) a determination by the Illinois Department of
24        Public Health that transfer of the registration is in
25        the best interests of Illinois qualifying patients as
26        defined by the Compassionate Use of Medical Cannabis

 

 

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1        Program Act;
2            (D) the death of an owner of the equity interest in
3        a registrant;
4            (E) the acquisition of a controlling interest in
5        the stock or substantially all of the assets of a
6        publicly traded company;
7            (F) a transfer by a parent company to a wholly
8        owned subsidiary; or
9            (G) the transfer or sale to or by one person to
10        another person where both persons were initial owners
11        of the registration when the registration was issued;
12        or
13        (2) the cannabis cultivation center registration,
14    medical cannabis dispensary registration, or the
15    controlling interest in a registrant's property is
16    transferred in a transaction to lineal descendants in
17    which no gain or loss is recognized or as a result of a
18    transaction in accordance with Section 351 of the Internal
19    Revenue Code in which no gain or loss is recognized.
20    (p) Pass-through entity tax.
21        (1) For taxable years ending on or after December 31,
22    2021 and beginning prior to January 1, 2026, a partnership
23    (other than a publicly traded partnership under Section
24    7704 of the Internal Revenue Code) or Subchapter S
25    corporation may elect to apply the provisions of this
26    subsection. A separate election shall be made for each

 

 

10200SB2531sam002- 85 -LRB102 15312 HLH 25342 a

1    taxable year. Such election shall be made at such time,
2    and in such form and manner as prescribed by the
3    Department, and, once made, is irrevocable.
4        (2) Entity-level tax. A partnership or Subchapter S
5    corporation electing to apply the provisions of this
6    subsection shall be subject to a tax for the privilege of
7    earning or receiving income in this State in an amount
8    equal to 4.95% of the taxpayer's net income for the
9    taxable year.
10        (3) Net income defined.
11            (A) In general. For purposes of paragraph (2), the
12        term net income has the same meaning as defined in
13        Section 202 of this Act, except that the following
14        provisions shall not apply:
15                (i) the standard exemption allowed under
16            Section 204;
17                (ii) the deduction for net losses allowed
18            under Section 207;
19                (iii) in the case of an S corporation, the
20            modification under Section 203(b)(2)(S); and
21                (iv) in the case of a partnership, the
22                modifications under Section 203(d)(2)(H) and
23                Section 203(d)(2)(I).
24            (B) Special rule for tiered partnerships. If a
25        taxpayer making the election under paragraph (1) is a
26        partner of another taxpayer making the election under

 

 

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

 

 

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

 

 

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

 

 

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1    an election under paragraph (1) is in effect.
2        (9) Requirement to pay estimated tax. For each taxable
3    year for which an election under paragraph (1) is in
4    effect, a partnership or Subchapter S corporation is
5    required to pay estimated tax for such taxable year under
6    Sections 803 and 804 of this Act if the amount payable as
7    estimated tax can reasonably be expected to exceed $500.
8(Source: P.A. 100-22, eff. 7-6-17; 101-8, see Section 99 for
9effective date; 101-9, eff. 6-5-19; 101-31, eff. 6-28-19;
10101-207, eff. 8-2-19; 101-363, eff. 8-9-19; revised 11-18-20.)
 
11    Section 99. Effective date. This Act takes effect upon
12becoming law.".