Full Text of HB7294 93rd General Assembly
HB7294 93RD GENERAL ASSEMBLY
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93RD GENERAL ASSEMBLY
State of Illinois
2003 and 2004 HB7294
Introduced 4/23/2004, by Rep. William Davis SYNOPSIS AS INTRODUCED: |
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35 ILCS 5/201 |
from Ch. 120, par. 2-201 |
35 ILCS 5/202.5 new |
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35 ILCS 5/204 |
from Ch. 120, par. 2-204 |
35 ILCS 5/901 |
from Ch. 120, par. 9-901 |
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Amends the Illinois Income Tax Act. Increases the rate of tax on individuals and on trusts and estates from 3% to 4%. Increases the amount of the standard exemption for individuals from $2,000 to $12,000. Effective immediately.
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A BILL FOR
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HB7294 |
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LRB093 21640 BDD 49186 b |
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| AN ACT concerning taxes.
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| Be it enacted by the People of the State of Illinois,
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| represented in the General Assembly:
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| Section 5. The Illinois Income Tax Act is amended by | 5 |
| changing Sections 201, 204, and 901 and by adding Section 202.5 | 6 |
| as follows:
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| (35 ILCS 5/201) (from Ch. 120, par. 2-201)
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| Sec. 201. Tax Imposed.
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| (a) In general. A tax measured by net income is hereby | 10 |
| imposed on every
individual, corporation, trust and estate for | 11 |
| each taxable year ending
after July 31, 1969 on the privilege | 12 |
| of earning or receiving income in or
as a resident of this | 13 |
| State. Such tax shall be in addition to all other
occupation or | 14 |
| privilege taxes imposed by this State or by any municipal
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| corporation or political subdivision thereof.
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| (b) Rates. The tax imposed by subsection (a) of this | 17 |
| Section shall be
determined as follows, except as adjusted by | 18 |
| subsection (d-1):
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| (1) In the case of an individual, trust or estate, for | 20 |
| taxable years
ending prior to July 1, 1989, an amount equal | 21 |
| to 2 1/2% of the taxpayer's
net income for the taxable | 22 |
| year.
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| (2) In the case of an individual, trust or estate, for | 24 |
| taxable years
beginning prior to July 1, 1989 and ending | 25 |
| after June 30, 1989, an amount
equal to the sum of (i) 2 | 26 |
| 1/2% of the taxpayer's net income for the period
prior to | 27 |
| July 1, 1989, as calculated under Section 202.3, and (ii) | 28 |
| 3% of the
taxpayer's net income for the period after June | 29 |
| 30, 1989, as calculated
under Section 202.3.
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| (3) In the case of an individual, trust or estate, for | 31 |
| taxable years
beginning after June 30, 1989 and ending on | 32 |
| or before December 31, 2003 , an amount equal to 3% of the |
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| taxpayer's net
income for the taxable year.
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| (4) In the case of an individual, trust, or estate, for | 3 |
| taxable years
beginning prior to January 1, 2004 and ending | 4 |
| after December 31, 2003, an amount
equal to the sum of (i) | 5 |
| 3% of the taxpayer's net income for the period
prior to | 6 |
| January 1, 2004, as calculated under Section 202.5, and | 7 |
| (ii) 4% of the
taxpayer's net income for the period after | 8 |
| December 31, 2004, as calculated
under Section 202.5.
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| (Blank) .
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| (5) In the case of an individual, trust or estate, for | 11 |
| taxable years
beginning after December 31, 2003, an amount | 12 |
| equal to 4% of the taxpayer's net
income for the taxable | 13 |
| year.
(Blank) .
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| (6) In the case of a corporation, for taxable years
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| ending prior to July 1, 1989, an amount equal to 4% of the
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| taxpayer's net income for the taxable year.
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| (7) In the case of a corporation, for taxable years | 18 |
| beginning prior to
July 1, 1989 and ending after June 30, | 19 |
| 1989, an amount equal to the sum of
(i) 4% of the | 20 |
| taxpayer's net income for the period prior to July 1, 1989,
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| as calculated under Section 202.3, and (ii) 4.8% of the | 22 |
| taxpayer's net
income for the period after June 30, 1989, | 23 |
| as calculated under Section
202.3.
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| (8) In the case of a corporation, for taxable years | 25 |
| beginning after
June 30, 1989, an amount equal to 4.8% of | 26 |
| the taxpayer's net income for the
taxable year.
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| (c) Personal Property Tax Replacement Income Tax.
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| Beginning on July 1, 1979 and thereafter, in addition to such | 29 |
| income
tax, there is also hereby imposed the Personal Property | 30 |
| Tax Replacement
Income Tax measured by net income on every | 31 |
| corporation (including Subchapter
S corporations), partnership | 32 |
| and trust, for each taxable year ending after
June 30, 1979. | 33 |
| Such taxes are imposed on the privilege of earning or
receiving | 34 |
| income in or as a resident of this State. The Personal Property
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| Tax Replacement Income Tax shall be in addition to the income | 36 |
| tax imposed
by subsections (a) and (b) of this Section and in |
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| addition to all other
occupation or privilege taxes imposed by | 2 |
| this State or by any municipal
corporation or political | 3 |
| subdivision thereof.
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| (d) Additional Personal Property Tax Replacement Income | 5 |
| Tax Rates.
The personal property tax replacement income tax | 6 |
| imposed by this subsection
and subsection (c) of this Section | 7 |
| in the case of a corporation, other
than a Subchapter S | 8 |
| corporation and except as adjusted by subsection (d-1),
shall | 9 |
| be an additional amount equal to
2.85% of such taxpayer's net | 10 |
| income for the taxable year, except that
beginning on January | 11 |
| 1, 1981, and thereafter, the rate of 2.85% specified
in this | 12 |
| subsection shall be reduced to 2.5%, and in the case of a
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| partnership, trust or a Subchapter S corporation shall be an | 14 |
| additional
amount equal to 1.5% of such taxpayer's net income | 15 |
| for the taxable year.
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| (d-1) Rate reduction for certain foreign insurers. In the | 17 |
| case of a
foreign insurer, as defined by Section 35A-5 of the | 18 |
| Illinois Insurance Code,
whose state or country of domicile | 19 |
| imposes on insurers domiciled in Illinois
a retaliatory tax | 20 |
| (excluding any insurer
whose premiums from reinsurance assumed | 21 |
| are 50% or more of its total insurance
premiums as determined | 22 |
| under paragraph (2) of subsection (b) of Section 304,
except | 23 |
| that for purposes of this determination premiums from | 24 |
| reinsurance do
not include premiums from inter-affiliate | 25 |
| reinsurance arrangements),
beginning with taxable years ending | 26 |
| on or after December 31, 1999,
the sum of
the rates of tax | 27 |
| imposed by subsections (b) and (d) shall be reduced (but not
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| increased) to the rate at which the total amount of tax imposed | 29 |
| under this Act,
net of all credits allowed under this Act, | 30 |
| shall equal (i) the total amount of
tax that would be imposed | 31 |
| on the foreign insurer's net income allocable to
Illinois for | 32 |
| the taxable year by such foreign insurer's state or country of
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| domicile if that net income were subject to all income taxes | 34 |
| and taxes
measured by net income imposed by such foreign | 35 |
| insurer's state or country of
domicile, net of all credits | 36 |
| allowed or (ii) a rate of zero if no such tax is
imposed on such |
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| income by the foreign insurer's state of domicile.
For the | 2 |
| purposes of this subsection (d-1), an inter-affiliate includes | 3 |
| a
mutual insurer under common management.
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| (1) For the purposes of subsection (d-1), in no event | 5 |
| shall the sum of the
rates of tax imposed by subsections | 6 |
| (b) and (d) be reduced below the rate at
which the sum of:
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| (A) the total amount of tax imposed on such foreign | 8 |
| insurer under
this Act for a taxable year, net of all | 9 |
| credits allowed under this Act, plus
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| (B) the privilege tax imposed by Section 409 of the | 11 |
| Illinois Insurance
Code, the fire insurance company | 12 |
| tax imposed by Section 12 of the Fire
Investigation | 13 |
| Act, and the fire department taxes imposed under | 14 |
| Section 11-10-1
of the Illinois Municipal Code,
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| equals 1.25% for taxable years ending prior to December 31, | 16 |
| 2003, or
1.75% for taxable years ending on or after | 17 |
| December 31, 2003, of the net
taxable premiums written for | 18 |
| the taxable year,
as described by subsection (1) of Section | 19 |
| 409 of the Illinois Insurance Code.
This paragraph will in | 20 |
| no event increase the rates imposed under subsections
(b) | 21 |
| and (d).
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| (2) Any reduction in the rates of tax imposed by this | 23 |
| subsection shall be
applied first against the rates imposed | 24 |
| by subsection (b) and only after the
tax imposed by | 25 |
| subsection (a) net of all credits allowed under this | 26 |
| Section
other than the credit allowed under subsection (i) | 27 |
| has been reduced to zero,
against the rates imposed by | 28 |
| subsection (d).
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| This subsection (d-1) is exempt from the provisions of | 30 |
| Section 250.
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| (e) Investment credit. A taxpayer shall be allowed a credit
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| against the Personal Property Tax Replacement Income Tax for
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| investment in qualified property.
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| (1) A taxpayer shall be allowed a credit equal to .5% | 35 |
| of
the basis of qualified property placed in service during | 36 |
| the taxable year,
provided such property is placed in |
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| service on or after
July 1, 1984. There shall be allowed an | 2 |
| additional credit equal
to .5% of the basis of qualified | 3 |
| property placed in service during the
taxable year, | 4 |
| provided such property is placed in service on or
after | 5 |
| July 1, 1986, and the taxpayer's base employment
within | 6 |
| Illinois has increased by 1% or more over the preceding | 7 |
| year as
determined by the taxpayer's employment records | 8 |
| filed with the
Illinois Department of Employment Security. | 9 |
| Taxpayers who are new to
Illinois shall be deemed to have | 10 |
| met the 1% growth in base employment for
the first year in | 11 |
| which they file employment records with the Illinois
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| Department of Employment Security. The provisions added to | 13 |
| this Section by
Public Act 85-1200 (and restored by Public | 14 |
| Act 87-895) shall be
construed as declaratory of existing | 15 |
| law and not as a new enactment. If,
in any year, the | 16 |
| increase in base employment within Illinois over the
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| preceding year is less than 1%, the additional credit shall | 18 |
| be limited to that
percentage times a fraction, the | 19 |
| numerator of which is .5% and the denominator
of which is | 20 |
| 1%, but shall not exceed .5%. The investment credit shall | 21 |
| not be
allowed to the extent that it would reduce a | 22 |
| taxpayer's liability in any tax
year below zero, nor may | 23 |
| any credit for qualified property be allowed for any
year | 24 |
| other than the year in which the property was placed in | 25 |
| service in
Illinois. For tax years ending on or after | 26 |
| December 31, 1987, and on or
before December 31, 1988, the | 27 |
| credit shall be allowed for the tax year in
which the | 28 |
| property is placed in service, or, if the amount of the | 29 |
| credit
exceeds the tax liability for that year, whether it | 30 |
| exceeds the original
liability or the liability as later | 31 |
| amended, such excess may be carried
forward and applied to | 32 |
| the tax liability of the 5 taxable years following
the | 33 |
| excess credit years if the taxpayer (i) makes investments | 34 |
| which cause
the creation of a minimum of 2,000 full-time | 35 |
| equivalent jobs in Illinois,
(ii) is located in an | 36 |
| enterprise zone established pursuant to the Illinois
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| Enterprise Zone Act and (iii) is certified by the | 2 |
| Department of Commerce
and Community Affairs (now | 3 |
| Department of Commerce and Economic Opportunity) as | 4 |
| complying with the requirements specified in
clause (i) and | 5 |
| (ii) by July 1, 1986. The Department of Commerce and
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| Community Affairs (now Department of Commerce and Economic | 7 |
| Opportunity) shall notify the Department of Revenue of all | 8 |
| such
certifications immediately. For tax years ending | 9 |
| after December 31, 1988,
the credit shall be allowed for | 10 |
| the tax year in which the property is
placed in service, | 11 |
| or, if the amount of the credit exceeds the tax
liability | 12 |
| for that year, whether it exceeds the original liability or | 13 |
| the
liability as later amended, such excess may be carried | 14 |
| forward and applied
to the tax liability of the 5 taxable | 15 |
| years following the excess credit
years. The credit shall | 16 |
| be applied to the earliest year for which there is
a | 17 |
| liability. If there is credit from more than one tax year | 18 |
| that is
available to offset a liability, earlier credit | 19 |
| shall be applied first.
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| (2) The term "qualified property" means property | 21 |
| which:
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| (A) is tangible, whether new or used, including | 23 |
| buildings and structural
components of buildings and | 24 |
| signs that are real property, but not including
land or | 25 |
| improvements to real property that are not a structural | 26 |
| component of a
building such as landscaping, sewer | 27 |
| lines, local access roads, fencing, parking
lots, and | 28 |
| other appurtenances;
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| (B) is depreciable pursuant to Section 167 of the | 30 |
| Internal Revenue Code,
except that "3-year property" | 31 |
| as defined in Section 168(c)(2)(A) of that
Code is not | 32 |
| eligible for the credit provided by this subsection | 33 |
| (e);
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| (C) is acquired by purchase as defined in Section | 35 |
| 179(d) of
the Internal Revenue Code;
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| (D) is used in Illinois by a taxpayer who is |
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| primarily engaged in
manufacturing, or in mining coal | 2 |
| or fluorite, or in retailing; and
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| (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).
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| (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
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| assembling which changes some existing material into new | 12 |
| shapes, new
qualities, or new combinations. For purposes of | 13 |
| this subsection
(e) the term "mining" shall have the same | 14 |
| meaning as the term "mining" in
Section 613(c) of the | 15 |
| Internal Revenue Code. For purposes of this subsection
(e), | 16 |
| the term "retailing" means the sale of tangible personal | 17 |
| property or
services rendered in conjunction with the sale | 18 |
| of tangible consumer goods
or commodities.
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| (4) The basis of qualified property shall be the basis
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| used to compute the depreciation deduction for federal | 21 |
| income tax purposes.
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| (5) If the basis of the property for federal income tax | 23 |
| depreciation
purposes is increased after it has been placed | 24 |
| in service in Illinois by
the taxpayer, the amount of such | 25 |
| increase shall be deemed property placed
in service on the | 26 |
| date of such increase in basis.
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| (6) The term "placed in service" shall have the same
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| meaning as under Section 46 of the Internal Revenue Code.
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| (7) If during any taxable year, any property ceases to
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| be qualified property in the hands of the taxpayer within | 31 |
| 48 months after
being placed in service, or the situs of | 32 |
| any qualified property is
moved outside Illinois within 48 | 33 |
| months after being placed in service, the
Personal Property | 34 |
| Tax Replacement Income Tax for such taxable year shall be
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| increased. Such increase shall be determined by (i) | 36 |
| recomputing the
investment credit which would have been |
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| allowed for the year in which
credit for such property was | 2 |
| originally allowed by eliminating such
property from such | 3 |
| computation and, (ii) subtracting such recomputed credit
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| from the amount of credit previously allowed. For the | 5 |
| purposes of this
paragraph (7), a reduction of the basis of | 6 |
| qualified property resulting
from a redetermination of the | 7 |
| purchase price shall be deemed a disposition
of qualified | 8 |
| property to the extent of such reduction.
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| (8) Unless the investment credit is extended by law, | 10 |
| the
basis of qualified property shall not include costs | 11 |
| incurred after
December 31, 2003, except for costs incurred | 12 |
| pursuant to a binding
contract entered into on or before | 13 |
| December 31, 2003.
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| (9) Each taxable year ending before December 31, 2000, | 15 |
| a partnership may
elect to pass through to its
partners the | 16 |
| credits to which the partnership is entitled under this | 17 |
| subsection
(e) for the taxable year. A partner may use the | 18 |
| credit allocated to him or her
under this paragraph only | 19 |
| against the tax imposed in subsections (c) and (d) of
this | 20 |
| Section. If the partnership makes that election, those | 21 |
| credits shall be
allocated among the partners in the | 22 |
| partnership in accordance with the rules
set forth in | 23 |
| Section 704(b) of the Internal Revenue Code, and the rules
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| promulgated under that Section, and the allocated amount of | 25 |
| the credits shall
be allowed to the partners for that | 26 |
| taxable year. The partnership shall make
this election on | 27 |
| its Personal Property Tax Replacement Income Tax return for
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| that taxable year. The election to pass through the credits | 29 |
| shall be
irrevocable.
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| For taxable years ending on or after December 31, 2000, | 31 |
| a
partner that qualifies its
partnership for a subtraction | 32 |
| under subparagraph (I) of paragraph (2) of
subsection (d) | 33 |
| of Section 203 or a shareholder that qualifies a Subchapter | 34 |
| S
corporation for a subtraction under subparagraph (S) of | 35 |
| paragraph (2) of
subsection (b) of Section 203 shall be | 36 |
| allowed a credit under this subsection
(e) equal to its |
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| share of the credit earned under this subsection (e) during
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| the taxable year by the partnership or Subchapter S | 3 |
| corporation, determined in
accordance with the | 4 |
| determination of income and distributive share of
income | 5 |
| under Sections 702 and 704 and Subchapter S of the Internal | 6 |
| Revenue
Code. This paragraph is exempt from the provisions | 7 |
| of Section 250.
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| (f) Investment credit; Enterprise Zone.
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| (1) A taxpayer shall be allowed a credit against the | 10 |
| tax imposed
by subsections (a) and (b) of this Section for | 11 |
| investment in qualified
property which is placed in service | 12 |
| in an Enterprise Zone created
pursuant to the Illinois | 13 |
| Enterprise Zone Act. For partners, shareholders
of | 14 |
| Subchapter S corporations, and owners of limited liability | 15 |
| companies,
if the liability company is treated as a | 16 |
| partnership for purposes of
federal and State income | 17 |
| taxation, there shall be allowed a credit under
this | 18 |
| subsection (f) to be determined in accordance with the | 19 |
| determination
of income and distributive share of income | 20 |
| under Sections 702 and 704 and
Subchapter S of the Internal | 21 |
| Revenue Code. The credit shall be .5% of the
basis for such | 22 |
| property. The credit shall be available only in the taxable
| 23 |
| year in which the property is placed in service in the | 24 |
| Enterprise Zone and
shall not be allowed to the extent that | 25 |
| it would reduce a taxpayer's
liability for the tax imposed | 26 |
| by subsections (a) and (b) of this Section to
below zero. | 27 |
| For tax years ending on or after December 31, 1985, the | 28 |
| credit
shall be allowed for the tax year in which the | 29 |
| property is placed in
service, or, if the amount of the | 30 |
| credit exceeds the tax liability for that
year, whether it | 31 |
| exceeds the original liability or the liability as later
| 32 |
| amended, such excess may be carried forward and applied to | 33 |
| the tax
liability of the 5 taxable years following the | 34 |
| excess credit year.
The credit shall be applied to the | 35 |
| earliest year for which there is a
liability. If there is | 36 |
| credit from more than one tax year that is available
to |
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| offset a liability, the credit accruing first in time shall | 2 |
| be applied
first.
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| (2) The term qualified property means property which:
| 4 |
| (A) is tangible, whether new or used, including | 5 |
| buildings and
structural components of buildings;
| 6 |
| (B) is depreciable pursuant to Section 167 of the | 7 |
| Internal Revenue
Code, except that "3-year property" | 8 |
| as defined in Section 168(c)(2)(A) of
that Code is not | 9 |
| eligible for the credit provided by this subsection | 10 |
| (f);
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| (C) is acquired by purchase as defined in Section | 12 |
| 179(d) of
the Internal Revenue Code;
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| (D) is used in the Enterprise Zone by the taxpayer; | 14 |
| and
| 15 |
| (E) has not been previously used in Illinois in | 16 |
| such a manner and by
such a person as would qualify for | 17 |
| the credit provided by this subsection
(f) or | 18 |
| subsection (e).
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| (3) The basis of qualified property shall be the basis | 20 |
| used to compute
the depreciation deduction for federal | 21 |
| income tax purposes.
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| (4) If the basis of the property for federal income tax | 23 |
| depreciation
purposes is increased after it has been placed | 24 |
| in service in the Enterprise
Zone by the taxpayer, the | 25 |
| amount of such increase shall be deemed property
placed in | 26 |
| service on the date of such increase in basis.
| 27 |
| (5) The term "placed in service" shall have the same | 28 |
| meaning as under
Section 46 of the Internal Revenue Code.
| 29 |
| (6) If during any taxable year, any property ceases to | 30 |
| be qualified
property in the hands of the taxpayer within | 31 |
| 48 months after being placed
in service, or the situs of | 32 |
| any qualified property is moved outside the
Enterprise Zone | 33 |
| within 48 months after being placed in service, the tax
| 34 |
| imposed under subsections (a) and (b) of this Section for | 35 |
| such taxable year
shall be increased. Such increase shall | 36 |
| be determined by (i) recomputing
the investment credit |
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| which would have been allowed for the year in which
credit | 2 |
| for such property was originally allowed by eliminating | 3 |
| such
property from such computation, and (ii) subtracting | 4 |
| such recomputed credit
from the amount of credit previously | 5 |
| allowed. For the purposes of this
paragraph (6), a | 6 |
| reduction of the basis of qualified property resulting
from | 7 |
| a redetermination of the purchase price shall be deemed a | 8 |
| disposition
of qualified property to the extent of such | 9 |
| reduction.
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| (g) Jobs Tax Credit; Enterprise Zone and Foreign Trade | 11 |
| Zone or Sub-Zone.
| 12 |
| (1) A taxpayer conducting a trade or business in an | 13 |
| enterprise zone
or a High Impact Business designated by the | 14 |
| Department of Commerce and
Economic Opportunity
Community | 15 |
| Affairs conducting a trade or business in a federally | 16 |
| designated
Foreign Trade Zone or Sub-Zone shall be allowed | 17 |
| a credit against the tax
imposed by subsections (a) and (b) | 18 |
| of this Section in the amount of $500
per eligible employee | 19 |
| hired to work in the zone during the taxable year.
| 20 |
| (2) To qualify for the credit:
| 21 |
| (A) the taxpayer must hire 5 or more eligible | 22 |
| employees to work in an
enterprise zone or federally | 23 |
| designated Foreign Trade Zone or Sub-Zone
during the | 24 |
| taxable year;
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| (B) the taxpayer's total employment within the | 26 |
| enterprise zone or
federally designated Foreign Trade | 27 |
| Zone or Sub-Zone must
increase by 5 or more full-time | 28 |
| employees beyond the total employed in that
zone at the | 29 |
| end of the previous tax year for which a jobs tax
| 30 |
| credit under this Section was taken, or beyond the | 31 |
| total employed by the
taxpayer as of December 31, 1985, | 32 |
| whichever is later; and
| 33 |
| (C) the eligible employees must be employed 180 | 34 |
| consecutive days in
order to be deemed hired for | 35 |
| purposes of this subsection.
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| (3) An "eligible employee" means an employee who is:
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| (A) Certified by the Department of Commerce and | 2 |
| Economic Opportunity
Community Affairs
as "eligible | 3 |
| for services" pursuant to regulations promulgated in
| 4 |
| accordance with Title II of the Job Training | 5 |
| Partnership Act, Training
Services for the | 6 |
| Disadvantaged or Title III of the Job Training | 7 |
| Partnership
Act, Employment and Training Assistance | 8 |
| for Dislocated Workers Program.
| 9 |
| (B) Hired after the enterprise zone or federally | 10 |
| designated Foreign
Trade Zone or Sub-Zone was | 11 |
| designated or the trade or
business was located in that | 12 |
| zone, whichever is later.
| 13 |
| (C) Employed in the enterprise zone or Foreign | 14 |
| Trade Zone or
Sub-Zone. An employee is employed in an
| 15 |
| enterprise zone or federally designated Foreign Trade | 16 |
| Zone or Sub-Zone
if his services are rendered there or | 17 |
| it is the base of
operations for the services | 18 |
| performed.
| 19 |
| (D) A full-time employee working 30 or more hours | 20 |
| per week.
| 21 |
| (4) For tax years ending on or after December 31, 1985 | 22 |
| and prior to
December 31, 1988, the credit shall be allowed | 23 |
| for the tax year in which
the eligible employees are hired. | 24 |
| For tax years ending on or after
December 31, 1988, the | 25 |
| credit shall be allowed for the tax year immediately
| 26 |
| following the tax year in which the eligible employees are | 27 |
| hired. If the
amount of the credit exceeds the tax | 28 |
| liability for that year, whether it
exceeds the original | 29 |
| liability or the liability as later amended, such
excess | 30 |
| may be carried forward and applied to the tax liability of | 31 |
| the 5
taxable years following the excess credit year. The | 32 |
| credit shall be
applied to the earliest year for which | 33 |
| there is a liability. If there is
credit from more than one | 34 |
| tax year that is available to offset a liability,
earlier | 35 |
| credit shall be applied first.
| 36 |
| (5) The Department of Revenue shall promulgate such |
|
|
|
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|
| 1 |
| rules and regulations
as may be deemed necessary to carry | 2 |
| out the purposes of this subsection (g).
| 3 |
| (6) The credit shall be available for eligible | 4 |
| employees hired on or
after January 1, 1986.
| 5 |
| (h) Investment credit; High Impact Business.
| 6 |
| (1) Subject to subsections (b) and (b-5) of Section
5.5 | 7 |
| of the Illinois Enterprise Zone Act, a taxpayer shall be | 8 |
| allowed a credit
against the tax imposed by subsections (a) | 9 |
| and (b) of this Section for
investment in qualified
| 10 |
| property which is placed in service by a Department of | 11 |
| Commerce and Economic Opportunity
Community
Affairs | 12 |
| designated High Impact Business. The credit shall be .5% of | 13 |
| the basis
for such property. The credit shall not be | 14 |
| available (i) until the minimum
investments in qualified | 15 |
| property set forth in subdivision (a)(3)(A) of
Section 5.5 | 16 |
| of the Illinois
Enterprise Zone Act have been satisfied
or | 17 |
| (ii) until the time authorized in subsection (b-5) of the | 18 |
| Illinois
Enterprise Zone Act for entities designated as | 19 |
| High Impact Businesses under
subdivisions (a)(3)(B), | 20 |
| (a)(3)(C), and (a)(3)(D) of Section 5.5 of the Illinois
| 21 |
| Enterprise Zone Act, and shall not be allowed to the extent | 22 |
| that it would
reduce a taxpayer's liability for the tax | 23 |
| imposed by subsections (a) and (b) of
this Section to below | 24 |
| zero. The credit applicable to such investments shall be
| 25 |
| taken in the taxable year in which such investments have | 26 |
| been completed. The
credit for additional investments | 27 |
| beyond the minimum investment by a designated
high impact | 28 |
| business authorized under subdivision (a)(3)(A) of Section | 29 |
| 5.5 of
the Illinois Enterprise Zone Act shall be available | 30 |
| only in the taxable year in
which the property is placed in | 31 |
| service and shall not be allowed to the extent
that it | 32 |
| would reduce a taxpayer's liability for the tax imposed by | 33 |
| subsections
(a) and (b) of this Section to below zero.
For | 34 |
| tax years ending on or after December 31, 1987, the credit | 35 |
| shall be
allowed for the tax year in which the property is | 36 |
| placed in service, or, if
the amount of the credit exceeds |
|
|
|
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|
| 1 |
| the tax liability for that year, whether
it exceeds the | 2 |
| original liability or the liability as later amended, such
| 3 |
| excess may be carried forward and applied to the tax | 4 |
| liability of the 5
taxable years following the excess | 5 |
| credit year. The credit shall be
applied to the earliest | 6 |
| year for which there is a liability. If there is
credit | 7 |
| from more than one tax year that is available to offset a | 8 |
| liability,
the credit accruing first in time shall be | 9 |
| applied first.
| 10 |
| Changes made in this subdivision (h)(1) by Public Act | 11 |
| 88-670
restore changes made by Public Act 85-1182 and | 12 |
| reflect existing law.
| 13 |
| (2) The term qualified property means property which:
| 14 |
| (A) is tangible, whether new or used, including | 15 |
| buildings and
structural components of buildings;
| 16 |
| (B) is depreciable pursuant to Section 167 of the | 17 |
| Internal Revenue
Code, except that "3-year property" | 18 |
| as defined in Section 168(c)(2)(A) of
that Code is not | 19 |
| eligible for the credit provided by this subsection | 20 |
| (h);
| 21 |
| (C) is acquired by purchase as defined in Section | 22 |
| 179(d) of the
Internal Revenue Code; and
| 23 |
| (D) is not eligible for the Enterprise Zone | 24 |
| Investment Credit provided
by subsection (f) of this | 25 |
| Section.
| 26 |
| (3) The basis of qualified property shall be the basis | 27 |
| used to compute
the depreciation deduction for federal | 28 |
| income tax purposes.
| 29 |
| (4) If the basis of the property for federal income tax | 30 |
| depreciation
purposes is increased after it has been placed | 31 |
| in service in a federally
designated Foreign Trade Zone or | 32 |
| Sub-Zone located in Illinois by the taxpayer,
the amount of | 33 |
| such increase shall be deemed property placed in service on
| 34 |
| the date of such increase in basis.
| 35 |
| (5) The term "placed in service" shall have the same | 36 |
| meaning as under
Section 46 of the Internal Revenue Code.
|
|
|
|
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|
| 1 |
| (6) If during any taxable year ending on or before | 2 |
| December 31, 1996,
any property ceases to be qualified
| 3 |
| property in the hands of the taxpayer within 48 months | 4 |
| after being placed
in service, or the situs of any | 5 |
| qualified property is moved outside
Illinois within 48 | 6 |
| months after being placed in service, the tax imposed
under | 7 |
| subsections (a) and (b) of this Section for such taxable | 8 |
| year shall
be increased. Such increase shall be determined | 9 |
| by (i) recomputing the
investment credit which would have | 10 |
| been allowed for the year in which
credit for such property | 11 |
| was originally allowed by eliminating such
property from | 12 |
| such computation, and (ii) subtracting such recomputed | 13 |
| credit
from the amount of credit previously allowed. For | 14 |
| the purposes of this
paragraph (6), a reduction of the | 15 |
| basis of qualified property resulting
from a | 16 |
| redetermination of the purchase price shall be deemed a | 17 |
| disposition
of qualified property to the extent of such | 18 |
| reduction.
| 19 |
| (7) Beginning with tax years ending after December 31, | 20 |
| 1996, if a
taxpayer qualifies for the credit under this | 21 |
| subsection (h) and thereby is
granted a tax abatement and | 22 |
| the taxpayer relocates its entire facility in
violation of | 23 |
| the explicit terms and length of the contract under Section
| 24 |
| 18-183 of the Property Tax Code, the tax imposed under | 25 |
| subsections
(a) and (b) of this Section shall be increased | 26 |
| for the taxable year
in which the taxpayer relocated its | 27 |
| facility by an amount equal to the
amount of credit | 28 |
| received by the taxpayer under this subsection (h).
| 29 |
| (i) Credit for Personal Property Tax Replacement Income | 30 |
| Tax.
For tax years ending prior to December 31, 2003, a credit | 31 |
| shall be allowed
against the tax imposed by
subsections (a) and | 32 |
| (b) of this Section for the tax imposed by subsections (c)
and | 33 |
| (d) of this Section. This credit shall be computed by | 34 |
| multiplying the tax
imposed by subsections (c) and (d) of this | 35 |
| Section by a fraction, the numerator
of which is base income | 36 |
| allocable to Illinois and the denominator of which is
Illinois |
|
|
|
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|
| 1 |
| base income, and further multiplying the product by the tax | 2 |
| rate
imposed by subsections (a) and (b) of this Section.
| 3 |
| Any credit earned on or after December 31, 1986 under
this | 4 |
| subsection which is unused in the year
the credit is computed | 5 |
| because it exceeds the tax liability imposed by
subsections (a) | 6 |
| and (b) for that year (whether it exceeds the original
| 7 |
| liability or the liability as later amended) may be carried | 8 |
| forward and
applied to the tax liability imposed by subsections | 9 |
| (a) and (b) of the 5
taxable years following the excess credit | 10 |
| year, provided that no credit may
be carried forward to any | 11 |
| year ending on or
after December 31, 2003. This credit shall be
| 12 |
| applied first to the earliest year for which there is a | 13 |
| liability. If
there is a credit under this subsection from more | 14 |
| than one tax year that is
available to offset a liability the | 15 |
| earliest credit arising under this
subsection shall be applied | 16 |
| first.
| 17 |
| If, during any taxable year ending on or after December 31, | 18 |
| 1986, the
tax imposed by subsections (c) and (d) of this | 19 |
| Section for which a taxpayer
has claimed a credit under this | 20 |
| subsection (i) is reduced, the amount of
credit for such tax | 21 |
| shall also be reduced. Such reduction shall be
determined by | 22 |
| recomputing the credit to take into account the reduced tax
| 23 |
| imposed by subsections (c) and (d). If any portion of the
| 24 |
| reduced amount of credit has been carried to a different | 25 |
| taxable year, an
amended return shall be filed for such taxable | 26 |
| year to reduce the amount of
credit claimed.
| 27 |
| (j) Training expense credit. Beginning with tax years | 28 |
| ending on or
after December 31, 1986 and prior to December 31, | 29 |
| 2003, a taxpayer shall be
allowed a credit against the
tax | 30 |
| imposed by subsections (a) and (b) under this Section
for all | 31 |
| amounts paid or accrued, on behalf of all persons
employed by | 32 |
| the taxpayer in Illinois or Illinois residents employed
outside | 33 |
| of Illinois by a taxpayer, for educational or vocational | 34 |
| training in
semi-technical or technical fields or semi-skilled | 35 |
| or skilled fields, which
were deducted from gross income in the | 36 |
| computation of taxable income. The
credit against the tax |
|
|
|
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|
| 1 |
| imposed by subsections (a) and (b) shall be 1.6% of
such | 2 |
| training expenses. For partners, shareholders of subchapter S
| 3 |
| corporations, and owners of limited liability companies, if the | 4 |
| liability
company is treated as a partnership for purposes of | 5 |
| federal and State income
taxation, there shall be allowed a | 6 |
| credit under this subsection (j) to be
determined in accordance | 7 |
| with the determination of income and distributive
share of | 8 |
| income under Sections 702 and 704 and subchapter S of the | 9 |
| Internal
Revenue Code.
| 10 |
| Any credit allowed under this subsection which is unused in | 11 |
| the year
the credit is earned may be carried forward to each of | 12 |
| the 5 taxable
years following the year for which the credit is | 13 |
| first computed until it is
used. This credit shall be applied | 14 |
| first to the earliest year for which
there is a liability. If | 15 |
| there is a credit under this subsection from more
than one tax | 16 |
| year that is available to offset a liability the earliest
| 17 |
| credit arising under this subsection shall be applied first. No | 18 |
| carryforward
credit may be claimed in any tax year ending on or | 19 |
| after
December 31, 2003.
| 20 |
| (k) Research and development credit.
| 21 |
| For tax years ending after July 1, 1990 and prior to
| 22 |
| December 31, 2003, a taxpayer shall be
allowed a credit against | 23 |
| the tax imposed by subsections (a) and (b) of this
Section for | 24 |
| increasing research activities in this State. The credit
| 25 |
| allowed against the tax imposed by subsections (a) and (b) | 26 |
| shall be equal
to 6 1/2% of the qualifying expenditures for | 27 |
| increasing research activities
in this State. For partners, | 28 |
| shareholders of subchapter S corporations, and
owners of | 29 |
| limited liability companies, if the liability company is | 30 |
| treated as a
partnership for purposes of federal and State | 31 |
| income taxation, there shall be
allowed a credit under this | 32 |
| subsection to be determined in accordance with the
| 33 |
| determination of income and distributive share of income under | 34 |
| Sections 702 and
704 and subchapter S of the Internal Revenue | 35 |
| Code.
| 36 |
| For purposes of this subsection, "qualifying expenditures" |
|
|
|
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|
| 1 |
| means the
qualifying expenditures as defined for the federal | 2 |
| credit for increasing
research activities which would be | 3 |
| allowable under Section 41 of the
Internal Revenue Code and | 4 |
| which are conducted in this State, "qualifying
expenditures for | 5 |
| increasing research activities in this State" means the
excess | 6 |
| of qualifying expenditures for the taxable year in which | 7 |
| incurred
over qualifying expenditures for the base period, | 8 |
| "qualifying expenditures
for the base period" means the average | 9 |
| of the qualifying expenditures for
each year in the base | 10 |
| period, and "base period" means the 3 taxable years
immediately | 11 |
| preceding the taxable year for which the determination is
being | 12 |
| made.
| 13 |
| Any credit in excess of the tax liability for the taxable | 14 |
| year
may be carried forward. A taxpayer may elect to have the
| 15 |
| unused credit shown on its final completed return carried over | 16 |
| as a credit
against the tax liability for the following 5 | 17 |
| taxable years or until it has
been fully used, whichever occurs | 18 |
| first; provided that no credit may be
carried forward to any | 19 |
| year ending on or
after December 31, 2003.
| 20 |
| If an unused credit is carried forward to a given year from | 21 |
| 2 or more
earlier years, that credit arising in the earliest | 22 |
| year will be applied
first against the tax liability for the | 23 |
| given year. If a tax liability for
the given year still | 24 |
| remains, the credit from the next earliest year will
then be | 25 |
| applied, and so on, until all credits have been used or no tax
| 26 |
| liability for the given year remains. Any remaining unused | 27 |
| credit or
credits then will be carried forward to the next | 28 |
| following year in which a
tax liability is incurred, except | 29 |
| that no credit can be carried forward to
a year which is more | 30 |
| than 5 years after the year in which the expense for
which the | 31 |
| credit is given was incurred.
| 32 |
| No inference shall be drawn from this amendatory Act of the | 33 |
| 91st General
Assembly in construing this Section for taxable | 34 |
| years beginning before January
1, 1999.
| 35 |
| (l) Environmental Remediation Tax Credit.
| 36 |
| (i) For tax years ending after December 31, 1997 and on |
|
|
|
HB7294 |
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|
| 1 |
| or before
December 31, 2001, a taxpayer shall be allowed a | 2 |
| credit against the tax
imposed by subsections (a) and (b) | 3 |
| of this Section for certain amounts paid
for unreimbursed | 4 |
| eligible remediation costs, as specified in this | 5 |
| subsection.
For purposes of this Section, "unreimbursed | 6 |
| eligible remediation costs" means
costs approved by the | 7 |
| Illinois Environmental Protection Agency ("Agency") under
| 8 |
| Section 58.14 of the Environmental Protection Act that were | 9 |
| paid in performing
environmental remediation at a site for | 10 |
| which a No Further Remediation Letter
was issued by the | 11 |
| Agency and recorded under Section 58.10 of the | 12 |
| Environmental
Protection Act. The credit must be claimed | 13 |
| for the taxable year in which
Agency approval of the | 14 |
| eligible remediation costs is granted. The credit is
not | 15 |
| available to any taxpayer if the taxpayer or any related | 16 |
| party caused or
contributed to, in any material respect, a | 17 |
| release of regulated substances on,
in, or under the site | 18 |
| that was identified and addressed by the remedial
action | 19 |
| pursuant to the Site Remediation Program of the | 20 |
| Environmental Protection
Act. After the Pollution Control | 21 |
| Board rules are adopted pursuant to the
Illinois | 22 |
| Administrative Procedure Act for the administration and | 23 |
| enforcement of
Section 58.9 of the Environmental | 24 |
| Protection Act, determinations as to credit
availability | 25 |
| for purposes of this Section shall be made consistent with | 26 |
| those
rules. For purposes of this Section, "taxpayer" | 27 |
| includes a person whose tax
attributes the taxpayer has | 28 |
| succeeded to under Section 381 of the Internal
Revenue Code | 29 |
| and "related party" includes the persons disallowed a | 30 |
| deduction
for losses by paragraphs (b), (c), and (f)(1) of | 31 |
| Section 267 of the Internal
Revenue Code by virtue of being | 32 |
| a related taxpayer, as well as any of its
partners. The | 33 |
| credit allowed against the tax imposed by subsections (a) | 34 |
| and
(b) shall be equal to 25% of the unreimbursed eligible | 35 |
| remediation costs in
excess of $100,000 per site, except | 36 |
| that the $100,000 threshold shall not apply
to any site |
|
|
|
HB7294 |
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LRB093 21640 BDD 49186 b |
|
| 1 |
| contained in an enterprise zone as determined by the | 2 |
| Department of
Commerce and Community Affairs (now | 3 |
| Department of Commerce and Economic Opportunity) . The | 4 |
| total credit allowed shall not exceed
$40,000 per year with | 5 |
| a maximum total of $150,000 per site. For partners and
| 6 |
| shareholders of subchapter S corporations, there shall be | 7 |
| allowed a credit
under this subsection to be determined in | 8 |
| accordance with the determination of
income and | 9 |
| distributive share of income under Sections 702 and 704 and
| 10 |
| subchapter S of the Internal Revenue Code.
| 11 |
| (ii) A credit allowed under this subsection that is | 12 |
| unused in the year
the credit is earned may be carried | 13 |
| forward to each of the 5 taxable years
following the year | 14 |
| for which the credit is first earned until it is used.
The | 15 |
| term "unused credit" does not include any amounts of | 16 |
| unreimbursed eligible
remediation costs in excess of the | 17 |
| maximum credit per site authorized under
paragraph (i). | 18 |
| This credit shall be applied first to the earliest year
for | 19 |
| which there is a liability. If there is a credit under this | 20 |
| subsection
from more than one tax year that is available to | 21 |
| offset a liability, the
earliest credit arising under this | 22 |
| subsection shall be applied first. A
credit allowed under | 23 |
| this subsection may be sold to a buyer as part of a sale
of | 24 |
| all or part of the remediation site for which the credit | 25 |
| was granted. The
purchaser of a remediation site and the | 26 |
| tax credit shall succeed to the unused
credit and remaining | 27 |
| carry-forward period of the seller. To perfect the
| 28 |
| transfer, the assignor shall record the transfer in the | 29 |
| chain of title for the
site and provide written notice to | 30 |
| the Director of the Illinois Department of
Revenue of the | 31 |
| assignor's intent to sell the remediation site and the | 32 |
| amount of
the tax credit to be transferred as a portion of | 33 |
| the sale. In no event may a
credit be transferred to any | 34 |
| taxpayer if the taxpayer or a related party would
not be | 35 |
| eligible under the provisions of subsection (i).
| 36 |
| (iii) For purposes of this Section, the term "site" |
|
|
|
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LRB093 21640 BDD 49186 b |
|
| 1 |
| shall have the same
meaning as under Section 58.2 of the | 2 |
| Environmental Protection Act.
| 3 |
| (m) Education expense credit. Beginning with tax years | 4 |
| ending after
December 31, 1999, a taxpayer who
is the custodian | 5 |
| of one or more qualifying pupils shall be allowed a credit
| 6 |
| against the tax imposed by subsections (a) and (b) of this | 7 |
| Section for
qualified education expenses incurred on behalf of | 8 |
| the qualifying pupils.
The credit shall be equal to 25% of | 9 |
| qualified education expenses, but in no
event may the total | 10 |
| credit under this subsection claimed by a
family that is the
| 11 |
| custodian of qualifying pupils exceed $500. In no event shall a | 12 |
| credit under
this subsection reduce the taxpayer's liability | 13 |
| under this Act to less than
zero. This subsection is exempt | 14 |
| from the provisions of Section 250 of this
Act.
| 15 |
| For purposes of this subsection:
| 16 |
| "Qualifying pupils" means individuals who (i) are | 17 |
| residents of the State of
Illinois, (ii) are under the age of | 18 |
| 21 at the close of the school year for
which a credit is | 19 |
| sought, and (iii) during the school year for which a credit
is | 20 |
| sought were full-time pupils enrolled in a kindergarten through | 21 |
| twelfth
grade education program at any school, as defined in | 22 |
| this subsection.
| 23 |
| "Qualified education expense" means the amount incurred
on | 24 |
| behalf of a qualifying pupil in excess of $250 for tuition, | 25 |
| book fees, and
lab fees at the school in which the pupil is | 26 |
| enrolled during the regular school
year.
| 27 |
| "School" means any public or nonpublic elementary or | 28 |
| secondary school in
Illinois that is in compliance with Title | 29 |
| VI of the Civil Rights Act of 1964
and attendance at which | 30 |
| satisfies the requirements of Section 26-1 of the
School Code, | 31 |
| except that nothing shall be construed to require a child to
| 32 |
| attend any particular public or nonpublic school to qualify for | 33 |
| the credit
under this Section.
| 34 |
| "Custodian" means, with respect to qualifying pupils, an | 35 |
| Illinois resident
who is a parent, the parents, a legal | 36 |
| guardian, or the legal guardians of the
qualifying pupils.
|
|
|
|
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|
| 1 |
| (Source: P.A. 92-12, eff.
7-1-01; 92-16, eff. 6-28-01; 92-651, | 2 |
| eff. 7-11-02; 92-846, eff. 8-23-02; 93-29,
eff. 6-20-03; | 3 |
| revised 12-6-03.)
| 4 |
| (35 ILCS 5/202.5 new) | 5 |
| Sec. 202.5. Net income attributable to the period prior to | 6 |
| January 1, 2004 and net income attributable to the period after | 7 |
| December 31, 2003. | 8 |
| (a) In general. With respect to the taxable year of a | 9 |
| taxpayer beginning prior to January 1, 2004 and ending after | 10 |
| December 31, 2003, net income for the period after December 31, | 11 |
| 2003 shall be that amount that bears the same ratio to the | 12 |
| taxpayer's net income for the entire taxable year as the number | 13 |
| of days in that year after December 31, 2003 bears to the total | 14 |
| number of days in that year, and the net income for the period | 15 |
| prior to January 1, 2004 shall be that amount that bears the | 16 |
| same ratio to the taxpayer's net income for the entire taxable | 17 |
| year as the number of days in that year prior to January 1, | 18 |
| 2004 bears to the total number of days in that year. | 19 |
| (b) Election to attribute income and deduction items | 20 |
| specifically to the respective portions of a taxable year prior | 21 |
| to January 1, 2004 and after December 31, 2003. In the case of | 22 |
| a taxpayer with a taxable year beginning prior to January 1, | 23 |
| 2004 and ending after December 31, 2003, the taxpayer may | 24 |
| elect, instead of the procedure established in subsection (a) | 25 |
| of this Section, to determine net income on a specific | 26 |
| accounting basis for the 2 portions of his or her taxable year: | 27 |
| (i) from the beginning of the taxable year through | 28 |
| December 31, 2003; and | 29 |
| (ii) from January 1, 2004 through the end of the | 30 |
| taxable year. | 31 |
| If the taxpayer elects specific accounting under this | 32 |
| subsection, there shall be taken into account in computing base | 33 |
| income for each of the 2 portions of the taxable year only | 34 |
| those items earned, received, paid, incurred or accrued in each | 35 |
| such period. The standard exemption provided by Section 204 |
|
|
|
HB7294 |
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|
| 1 |
| shall be divided between the respective periods in amounts that | 2 |
| bear the same ratio to the total exemption allowable under | 3 |
| Section 204 (determined without regard to this Section) as the | 4 |
| total number of days in each such period bears to the total | 5 |
| number of days in the taxable year. The election provided by | 6 |
| this subsection must be made in such manner and at such time | 7 |
| that the Department by forms or regulations prescribes, but | 8 |
| must be made no later than the due date (including any | 9 |
| extensions thereof) for the filing of the return for the | 10 |
| taxable year, and shall be irrevocable.
| 11 |
| (35 ILCS 5/204) (from Ch. 120, par. 2-204)
| 12 |
| Sec. 204. Standard Exemption.
| 13 |
| (a) Allowance of exemption. In computing net income under | 14 |
| this Act, there
shall be allowed as an exemption the sum of the | 15 |
| amounts determined under
subsections (b), (c) and (d), | 16 |
| multiplied by a fraction the numerator of which
is the amount | 17 |
| of the taxpayer's base income allocable to this State for the
| 18 |
| taxable year and the denominator of which is the taxpayer's | 19 |
| total base income
for the taxable year.
| 20 |
| (b) Basic amount. For the purpose of subsection (a) of this | 21 |
| Section,
except as provided by subsection (a) of Section 205 | 22 |
| and in this
subsection, each taxpayer shall be allowed a basic | 23 |
| amount of $1000, except
that for corporations the basic amount | 24 |
| shall be zero for tax years ending on
or
after December 31, | 25 |
| 2003, and for individuals the basic amount shall be:
| 26 |
| (1) for taxable years ending on or after December 31, | 27 |
| 1998 and prior to
December 31, 1999, $1,300;
| 28 |
| (2) for taxable years ending on or after December 31, | 29 |
| 1999 and prior to
December 31, 2000, $1,650;
| 30 |
| (3) for taxable years ending on or after December 31, | 31 |
| 2000 and prior to January 1, 2004 , $2,000 ; | 32 |
| (4) for taxable years ending on or after January 1, | 33 |
| 2004, $12,000 .
| 34 |
| For taxable years ending on or after December 31, 1992, a | 35 |
| taxpayer whose
Illinois base income exceeds the basic amount |
|
|
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| 1 |
| and who is claimed as a dependent
on another person's tax | 2 |
| return under the Internal Revenue Code of 1986 shall
not be | 3 |
| allowed any basic amount under this subsection.
| 4 |
| (c) Additional amount for individuals. In the case of an | 5 |
| individual
taxpayer, there shall be allowed for the purpose of | 6 |
| subsection (a), in
addition to the basic amount provided by | 7 |
| subsection (b), an additional
exemption equal to the basic | 8 |
| amount for each
exemption in excess of one
allowable to such | 9 |
| individual taxpayer for the taxable year under Section
151 of | 10 |
| the Internal Revenue Code.
| 11 |
| (d) Additional exemptions for an individual taxpayer and | 12 |
| his or her
spouse. In the case of an individual taxpayer and | 13 |
| his or her spouse, he or
she shall each be allowed additional | 14 |
| exemptions as follows:
| 15 |
| (1) Additional exemption for taxpayer or spouse 65 | 16 |
| years of age or older.
| 17 |
| (A) For taxpayer. An additional exemption of | 18 |
| $1,000 for the taxpayer if
he or she has attained the | 19 |
| age of 65 before the end of the taxable year.
| 20 |
| (B) For spouse when a joint return is not filed. An | 21 |
| additional
exemption of $1,000 for the spouse of the | 22 |
| taxpayer if a joint return is not
made by the taxpayer | 23 |
| and his spouse, and if the spouse has attained the age
| 24 |
| of 65 before the end of such taxable year, and, for the | 25 |
| calendar year in
which the taxable year of the taxpayer | 26 |
| begins, has no gross income and is
not the dependent of | 27 |
| another taxpayer.
| 28 |
| (2) Additional exemption for blindness of taxpayer or | 29 |
| spouse.
| 30 |
| (A) For taxpayer. An additional exemption of | 31 |
| $1,000 for the taxpayer if
he or she is blind at the | 32 |
| end of the taxable year.
| 33 |
| (B) For spouse when a joint return is not filed. An | 34 |
| additional
exemption of $1,000 for the spouse of the | 35 |
| taxpayer if a separate return is made
by the taxpayer, | 36 |
| and if the spouse is blind and, for the calendar year |
|
|
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| 1 |
| in which
the taxable year of the taxpayer begins, has | 2 |
| no gross income and is not the
dependent of another | 3 |
| taxpayer. For purposes of this paragraph, the
| 4 |
| determination of whether the spouse is blind shall be | 5 |
| made as of the end of the
taxable year of the taxpayer; | 6 |
| except that if the spouse dies during such
taxable year | 7 |
| such determination shall be made as of the time of such | 8 |
| death.
| 9 |
| (C) Blindness defined. For purposes of this | 10 |
| subsection, an individual
is blind only if his or her | 11 |
| central visual acuity does not exceed 20/200 in
the | 12 |
| better eye with correcting lenses, or if his or her | 13 |
| visual acuity is
greater than 20/200 but is accompanied | 14 |
| by a limitation in the fields of
vision such that the | 15 |
| widest diameter of the visual fields subtends an angle
| 16 |
| no greater than 20 degrees.
| 17 |
| (e) Cross reference. See Article 3 for the manner of | 18 |
| determining
base income allocable to this State.
| 19 |
| (f) Application of Section 250. Section 250 does not apply | 20 |
| to the
amendments to this Section made by Public Act 90-613.
| 21 |
| (Source: P.A. 93-29, eff. 6-20-03.)
| 22 |
| (35 ILCS 5/901) (from Ch. 120, par. 9-901)
| 23 |
| Sec. 901. Collection Authority.
| 24 |
| (a) In general.
| 25 |
| The Department shall collect the taxes imposed by this Act. | 26 |
| The Department
shall collect certified past due child support | 27 |
| amounts under Section 2505-650
of the Department of Revenue Law | 28 |
| (20 ILCS 2505/2505-650). Except as
provided in subsections (c) | 29 |
| and (e) of this Section, money collected
pursuant to | 30 |
| subsections (a) and (b) of Section 201 of this Act shall be
| 31 |
| paid into the General Revenue Fund in the State treasury; money
| 32 |
| collected pursuant to subsections (c) and (d) of Section 201 of | 33 |
| this Act
shall be paid into the Personal Property Tax | 34 |
| Replacement Fund, a special
fund in the State Treasury; and | 35 |
| money collected under Section 2505-650 of the
Department of |
|
|
|
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| 1 |
| Revenue Law (20 ILCS 2505/2505-650) shall be paid
into the
| 2 |
| Child Support Enforcement Trust Fund, a special fund outside | 3 |
| the State
Treasury, or
to the State
Disbursement Unit | 4 |
| established under Section 10-26 of the Illinois Public Aid
| 5 |
| Code, as directed by the Department of Public
Aid.
| 6 |
| (b) Local Governmental Distributive Fund.
| 7 |
| Beginning August 1, 1969, and continuing through June 30, | 8 |
| 1994, the Treasurer
shall transfer each month from the General | 9 |
| Revenue Fund to a special fund in
the State treasury, to be | 10 |
| known as the "Local Government Distributive Fund", an
amount | 11 |
| equal to 1/12 of the net revenue realized from the tax imposed | 12 |
| by
subsections (a) and (b) of Section 201 of this Act during | 13 |
| the preceding month.
Beginning July 1, 1994, and continuing | 14 |
| through June 30, 1995, the Treasurer
shall transfer each month | 15 |
| from the General Revenue Fund to the Local Government
| 16 |
| Distributive Fund an amount equal to 1/11 of the net revenue | 17 |
| realized from the
tax imposed by subsections (a) and (b) of | 18 |
| Section 201 of this Act during the
preceding month. Beginning | 19 |
| July 1, 1995, the Treasurer shall transfer each
month from the | 20 |
| General Revenue Fund to the Local Government Distributive Fund
| 21 |
| an amount equal to the net of (i) 1/10 of the net revenue | 22 |
| realized from the
tax imposed by
subsections (a) and (b) of | 23 |
| Section 201 of the Illinois Income Tax Act during
the preceding | 24 |
| month
(ii) minus, beginning July 1, 2003 and ending June 30, | 25 |
| 2004, $6,666,666, and
beginning July 1,
2004, zero. Net revenue | 26 |
| realized for a month shall be defined as the
revenue from the | 27 |
| tax imposed by subsections (a) and (b) of Section 201 of this
| 28 |
| Act which is deposited in the General Revenue Fund, the | 29 |
| Educational Assistance
Fund and the Income Tax Surcharge Local | 30 |
| Government Distributive Fund during the
month minus the amount | 31 |
| paid out of the General Revenue Fund in State warrants
during | 32 |
| that same month as refunds to taxpayers for overpayment of | 33 |
| liability
under the tax imposed by subsections (a) and (b) of | 34 |
| Section 201 of this Act.
| 35 |
| (c) Deposits Into Income Tax Refund Fund.
| 36 |
| (1) Beginning on January 1, 1989 and thereafter, the |
|
|
|
HB7294 |
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LRB093 21640 BDD 49186 b |
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| 1 |
| Department shall
deposit a percentage of the amounts | 2 |
| collected pursuant to subsections (a)
and (b)(1), (2), and | 3 |
| (3), (4), and (5) of Section 201 of this Act into a fund in | 4 |
| the State
treasury known as the Income Tax Refund Fund. The | 5 |
| Department shall deposit 6%
of such amounts during the | 6 |
| period beginning January 1, 1989 and ending on June
30, | 7 |
| 1989. Beginning with State fiscal year 1990 and for each | 8 |
| fiscal year
thereafter, the percentage deposited into the | 9 |
| Income Tax Refund Fund during a
fiscal year shall be the | 10 |
| Annual Percentage. For fiscal years 1999 through
2001, the | 11 |
| Annual Percentage shall be 7.1%.
For fiscal year 2003, the | 12 |
| Annual Percentage shall be 8%.
For fiscal year 2004, the | 13 |
| Annual Percentage shall be 11.7%. For all other
fiscal | 14 |
| years, the
Annual Percentage shall be calculated as a | 15 |
| fraction, the numerator of which
shall be the amount of | 16 |
| refunds approved for payment by the Department during
the | 17 |
| preceding fiscal year as a result of overpayment of tax | 18 |
| liability under
subsections (a) and (b)(1), (2), and (3) , | 19 |
| (4), and (5) of Section 201 of this Act plus the
amount of | 20 |
| such refunds remaining approved but unpaid at the end of | 21 |
| the
preceding fiscal year, minus the amounts transferred | 22 |
| into the Income Tax
Refund Fund from the Tobacco Settlement | 23 |
| Recovery Fund, and
the denominator of which shall be the | 24 |
| amounts which will be collected pursuant
to subsections (a) | 25 |
| and (b)(1), (2), and (3) , (4), and (5) of Section 201 of | 26 |
| this Act during
the preceding fiscal year; except that in | 27 |
| State fiscal year 2002, the Annual
Percentage shall in no | 28 |
| event exceed 7.6%. The Director of Revenue shall
certify | 29 |
| the Annual Percentage to the Comptroller on the last | 30 |
| business day of
the fiscal year immediately preceding the | 31 |
| fiscal year for which it is to be
effective.
| 32 |
| (2) Beginning on January 1, 1989 and thereafter, the | 33 |
| Department shall
deposit a percentage of the amounts | 34 |
| collected pursuant to subsections (a)
and (b)(6), (7), and | 35 |
| (8), (c) and (d) of Section 201
of this Act into a fund in | 36 |
| the State treasury known as the Income Tax
Refund Fund. The |
|
|
|
HB7294 |
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LRB093 21640 BDD 49186 b |
|
| 1 |
| Department shall deposit 18% of such amounts during the
| 2 |
| period beginning January 1, 1989 and ending on June 30, | 3 |
| 1989. Beginning
with State fiscal year 1990 and for each | 4 |
| fiscal year thereafter, the
percentage deposited into the | 5 |
| Income Tax Refund Fund during a fiscal year
shall be the | 6 |
| Annual Percentage. For fiscal years 1999, 2000, and 2001, | 7 |
| the
Annual Percentage shall be 19%.
For fiscal year 2003, | 8 |
| the Annual Percentage shall be 27%. For fiscal year
2004, | 9 |
| the Annual Percentage shall be 32%.
For all other fiscal | 10 |
| years, the Annual
Percentage shall be calculated
as a | 11 |
| fraction, the numerator of which shall be the amount of | 12 |
| refunds
approved for payment by the Department during the | 13 |
| preceding fiscal year as
a result of overpayment of tax | 14 |
| liability under subsections (a) and (b)(6),
(7), and (8), | 15 |
| (c) and (d) of Section 201 of this Act plus the
amount of | 16 |
| such refunds remaining approved but unpaid at the end of | 17 |
| the
preceding fiscal year, and the denominator of
which | 18 |
| shall be the amounts which will be collected pursuant to | 19 |
| subsections (a)
and (b)(6), (7), and (8), (c) and (d) of | 20 |
| Section 201 of this Act during the
preceding fiscal year; | 21 |
| except that in State fiscal year 2002, the Annual
| 22 |
| Percentage shall in no event exceed 23%. The Director of | 23 |
| Revenue shall
certify the Annual Percentage to the | 24 |
| Comptroller on the last business day of
the fiscal year | 25 |
| immediately preceding the fiscal year for which it is to be
| 26 |
| effective.
| 27 |
| (3) The Comptroller shall order transferred and the | 28 |
| Treasurer shall
transfer from the Tobacco Settlement | 29 |
| Recovery Fund to the Income Tax Refund
Fund (i) $35,000,000 | 30 |
| in January, 2001, (ii) $35,000,000 in January, 2002, and
| 31 |
| (iii) $35,000,000 in January, 2003.
| 32 |
| (d) Expenditures from Income Tax Refund Fund.
| 33 |
| (1) Beginning January 1, 1989, money in the Income Tax | 34 |
| Refund Fund
shall be expended exclusively for the purpose | 35 |
| of paying refunds resulting
from overpayment of tax | 36 |
| liability under Section 201 of this Act, for paying
rebates |
|
|
|
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LRB093 21640 BDD 49186 b |
|
| 1 |
| under Section 208.1 in the event that the amounts in the | 2 |
| Homeowners'
Tax Relief Fund are insufficient for that | 3 |
| purpose,
and for
making transfers pursuant to this | 4 |
| subsection (d).
| 5 |
| (2) The Director shall order payment of refunds | 6 |
| resulting from
overpayment of tax liability under Section | 7 |
| 201 of this Act from the
Income Tax Refund Fund only to the | 8 |
| extent that amounts collected pursuant
to Section 201 of | 9 |
| this Act and transfers pursuant to this subsection (d)
and | 10 |
| item (3) of subsection (c) have been deposited and retained | 11 |
| in the
Fund.
| 12 |
| (3) As soon as possible after the end of each fiscal | 13 |
| year, the Director
shall
order transferred and the State | 14 |
| Treasurer and State Comptroller shall
transfer from the | 15 |
| Income Tax Refund Fund to the Personal Property Tax
| 16 |
| Replacement Fund an amount, certified by the Director to | 17 |
| the Comptroller,
equal to the excess of the amount | 18 |
| collected pursuant to subsections (c) and
(d) of Section | 19 |
| 201 of this Act deposited into the Income Tax Refund Fund
| 20 |
| during the fiscal year over the amount of refunds resulting | 21 |
| from
overpayment of tax liability under subsections (c) and | 22 |
| (d) of Section 201
of this Act paid from the Income Tax | 23 |
| Refund Fund during the fiscal year.
| 24 |
| (4) As soon as possible after the end of each fiscal | 25 |
| year, the Director shall
order transferred and the State | 26 |
| Treasurer and State Comptroller shall
transfer from the | 27 |
| Personal Property Tax Replacement Fund to the Income Tax
| 28 |
| Refund Fund an amount, certified by the Director to the | 29 |
| Comptroller, equal
to the excess of the amount of refunds | 30 |
| resulting from overpayment of tax
liability under | 31 |
| subsections (c) and (d) of Section 201 of this Act paid
| 32 |
| from the Income Tax Refund Fund during the fiscal year over | 33 |
| the amount
collected pursuant to subsections (c) and (d) of | 34 |
| Section 201 of this Act
deposited into the Income Tax | 35 |
| Refund Fund during the fiscal year.
| 36 |
| (4.5) As soon as possible after the end of fiscal year |
|
|
|
HB7294 |
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LRB093 21640 BDD 49186 b |
|
| 1 |
| 1999 and of each
fiscal year
thereafter, the Director shall | 2 |
| order transferred and the State Treasurer and
State | 3 |
| Comptroller shall transfer from the Income Tax Refund Fund | 4 |
| to the General
Revenue Fund any surplus remaining in the | 5 |
| Income Tax Refund Fund as of the end
of such fiscal year; | 6 |
| excluding for fiscal years 2000, 2001, and 2002
amounts | 7 |
| attributable to transfers under item (3) of subsection (c) | 8 |
| less refunds
resulting from the earned income tax credit.
| 9 |
| (5) This Act shall constitute an irrevocable and | 10 |
| continuing
appropriation from the Income Tax Refund Fund | 11 |
| for the purpose of paying
refunds upon the order of the | 12 |
| Director in accordance with the provisions of
this Section.
| 13 |
| (e) Deposits into the Education Assistance Fund and the | 14 |
| Income Tax
Surcharge Local Government Distributive Fund.
| 15 |
| On July 1, 1991, and thereafter, of the amounts collected | 16 |
| pursuant to
subsections (a) and (b) of Section 201 of this Act, | 17 |
| minus deposits into the
Income Tax Refund Fund, the Department | 18 |
| shall deposit 7.3% into the
Education Assistance Fund in the | 19 |
| State Treasury. Beginning July 1, 1991,
and continuing through | 20 |
| January 31, 1993, of the amounts collected pursuant to
| 21 |
| subsections (a) and (b) of Section 201 of the Illinois Income | 22 |
| Tax Act, minus
deposits into the Income Tax Refund Fund, the | 23 |
| Department shall deposit 3.0%
into the Income Tax Surcharge | 24 |
| Local Government Distributive Fund in the State
Treasury. | 25 |
| Beginning February 1, 1993 and continuing through June 30, | 26 |
| 1993, of
the amounts collected pursuant to subsections (a) and | 27 |
| (b) of Section 201 of the
Illinois Income Tax Act, minus | 28 |
| deposits into the Income Tax Refund Fund, the
Department shall | 29 |
| deposit 4.4% into the Income Tax Surcharge Local Government
| 30 |
| Distributive Fund in the State Treasury. Beginning July 1, | 31 |
| 1993, and
continuing through June 30, 1994, of the amounts | 32 |
| collected under subsections
(a) and (b) of Section 201 of this | 33 |
| Act, minus deposits into the Income Tax
Refund Fund, the | 34 |
| Department shall deposit 1.475% into the Income Tax Surcharge
| 35 |
| Local Government Distributive Fund in the State Treasury.
| 36 |
| (Source: P.A. 92-11, eff. 6-11-01; 92-16,
eff. 6-28-01; 92-600, |
|
|
|
HB7294 |
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LRB093 21640 BDD 49186 b |
|
| 1 |
| eff. 6-28-02; 93-32, eff. 6-20-03.)
| 2 |
| Section 99. Effective date. This Act takes effect upon | 3 |
| becoming law.
|
|