| ||||
| Public Act 101-0009 | ||||
| ||||
| ||||
AN ACT concerning revenue.
| ||||
Be it enacted by the People of the State of Illinois,
| ||||
represented in the General Assembly:
| ||||
ARTICLE 10. AMENDATORY PROVISIONS | ||||
Section 10-3. The State Finance Act is amended by changing | ||||
Section 6z-81 as follows: | ||||
(30 ILCS 105/6z-81) | ||||
Sec. 6z-81. Healthcare Provider Relief Fund. | ||||
(a) There is created in the State treasury a special fund | ||||
to be known as the Healthcare Provider Relief Fund. | ||||
(b) The Fund is created for the purpose of receiving and | ||||
disbursing moneys in accordance with this Section. | ||||
Disbursements from the Fund shall be made only as follows: | ||||
(1) Subject to appropriation, for payment by the | ||||
Department of Healthcare and
Family Services or by the | ||||
Department of Human Services of medical bills and related | ||||
expenses, including administrative expenses, for which the | ||||
State is responsible under Titles XIX and XXI of the Social | ||||
Security Act, the Illinois Public Aid Code, the Children's | ||||
Health Insurance Program Act, the Covering ALL KIDS Health | ||||
Insurance Act, and the Long Term Acute Care Hospital | ||||
Quality Improvement Transfer Program Act. | ||||
(2) For repayment of funds borrowed from other State
| ||
funds or from outside sources, including interest thereon. | ||
(3) For State fiscal years 2017, 2018, and 2019, for | ||
making payments to the human poison control center pursuant | ||
to Section 12-4.105 of the Illinois Public Aid Code. | ||
(c) The Fund shall consist of the following: | ||
(1) Moneys received by the State from short-term
| ||
borrowing pursuant to the Short Term Borrowing Act on or | ||
after the effective date of Public Act 96-820. | ||
(2) All federal matching funds received by the
Illinois | ||
Department of Healthcare and Family Services as a result of | ||
expenditures made by the Department that are attributable | ||
to moneys deposited in the Fund. | ||
(3) All federal matching funds received by the
Illinois | ||
Department of Healthcare and Family Services as a result of | ||
federal approval of Title XIX State plan amendment | ||
transmittal number 07-09. | ||
(3.5) Proceeds from the assessment authorized under | ||
Article V-H of the Public Aid Code. | ||
(4) All other moneys received for the Fund from any
| ||
other source, including interest earned thereon. | ||
(5) All federal matching funds received by the
Illinois | ||
Department of Healthcare and Family Services as a result of | ||
expenditures made by the Department for Medical Assistance | ||
from the General Revenue Fund, the Tobacco Settlement | ||
Recovery Fund, the Long-Term Care Provider Fund, and the | ||
Drug Rebate Fund related to individuals eligible for | ||
medical assistance pursuant to the Patient Protection and | ||
Affordable Care Act (P.L. 111-148) and Section 5-2 of the | ||
Illinois Public Aid Code. | ||
(d) In addition to any other transfers that may be provided | ||
for by law, on the effective date of Public Act 97-44, or as | ||
soon thereafter as practical, the State Comptroller shall | ||
direct and the State Treasurer shall transfer the sum of | ||
$365,000,000 from the General Revenue Fund into the Healthcare | ||
Provider Relief Fund.
| ||
(e) In addition to any other transfers that may be provided | ||
for by law, on July 1, 2011, or as soon thereafter as | ||
practical, the State Comptroller shall direct and the State | ||
Treasurer shall transfer the sum of $160,000,000 from the | ||
General Revenue Fund to the Healthcare Provider Relief Fund. | ||
(f) Notwithstanding any other State law to the contrary, | ||
and in addition to any other transfers that may be provided for | ||
by law, the State Comptroller shall order transferred and the | ||
State Treasurer shall transfer $500,000,000 to the Healthcare | ||
Provider Relief Fund from the General Revenue Fund in equal | ||
monthly installments of $100,000,000, with the first transfer | ||
to be made on July 1, 2012, or as soon thereafter as practical, | ||
and with each of the remaining transfers to be made on August | ||
1, 2012, September 1, 2012, October 1, 2012, and November 1, | ||
2012, or as soon thereafter as practical. This transfer may | ||
assist the Department of Healthcare and Family Services in | ||
improving Medical Assistance bill processing timeframes or in | ||
meeting the possible requirements of Senate Bill 3397, or other | ||
similar legislation, of the 97th General Assembly should it | ||
become law. | ||
(g) Notwithstanding any other State law to the contrary, | ||
and in addition to any other transfers that may be provided for | ||
by law, on July 1, 2013, or as soon thereafter as may be | ||
practical, the State Comptroller shall direct and the State | ||
Treasurer shall transfer the sum of $601,000,000 from the | ||
General Revenue Fund to the Healthcare Provider Relief Fund. | ||
(Source: P.A. 99-516, eff. 6-30-16; 100-587, eff. 6-4-18.) | ||
Section 10-5. The Illinois Income Tax Act is amended by | ||
changing Section 203 as follows: | ||
(35 ILCS 5/203) (from Ch. 120, par. 2-203) | ||
Sec. 203. Base income defined. | ||
(a) Individuals. | ||
(1) In general. In the case of an individual, base | ||
income means an
amount equal to the taxpayer's adjusted | ||
gross income for the taxable
year as modified by paragraph | ||
(2). | ||
(2) Modifications. The adjusted gross income referred | ||
to in
paragraph (1) shall be modified by adding thereto the | ||
sum of the
following amounts: | ||
(A) An amount equal to all amounts paid or accrued | ||
to the taxpayer
as interest or dividends during the | ||
taxable year to the extent excluded
from gross income | ||
in the computation of adjusted gross income, except | ||
stock
dividends of qualified public utilities | ||
described in Section 305(e) of the
Internal Revenue | ||
Code; | ||
(B) An amount equal to the amount of tax imposed by | ||
this Act to the
extent deducted from gross income in | ||
the computation of adjusted gross
income for the | ||
taxable year; | ||
(C) An amount equal to the amount received during | ||
the taxable year
as a recovery or refund of real | ||
property taxes paid with respect to the
taxpayer's | ||
principal residence under the Revenue Act of
1939 and | ||
for which a deduction was previously taken under | ||
subparagraph (L) of
this paragraph (2) prior to July 1, | ||
1991, the retrospective application date of
Article 4 | ||
of Public Act 87-17. In the case of multi-unit or | ||
multi-use
structures and farm dwellings, the taxes on | ||
the taxpayer's principal residence
shall be that | ||
portion of the total taxes for the entire property | ||
which is
attributable to such principal residence; | ||
(D) An amount equal to the amount of the capital | ||
gain deduction
allowable under the Internal Revenue | ||
Code, to the extent deducted from gross
income in the | ||
computation of adjusted gross income; | ||
(D-5) An amount, to the extent not included in | ||
adjusted gross income,
equal to the amount of money | ||
withdrawn by the taxpayer in the taxable year from
a | ||
medical care savings account and the interest earned on | ||
the account in the
taxable year of a withdrawal | ||
pursuant to subsection (b) of Section 20 of the
Medical | ||
Care Savings Account Act or subsection (b) of Section | ||
20 of the
Medical Care Savings Account Act of 2000; | ||
(D-10) For taxable years ending after December 31, | ||
1997, an
amount equal to any eligible remediation costs | ||
that the individual
deducted in computing adjusted | ||
gross income and for which the
individual claims a | ||
credit under subsection (l) of Section 201; | ||
(D-15) For taxable years 2001 and thereafter, an | ||
amount equal to the
bonus depreciation deduction taken | ||
on the taxpayer's federal income tax return for the | ||
taxable
year under subsection (k) of Section 168 of the | ||
Internal Revenue Code; | ||
(D-16) If the taxpayer sells, transfers, abandons, | ||
or otherwise disposes of property for which the | ||
taxpayer was required in any taxable year to
make an | ||
addition modification under subparagraph (D-15), then | ||
an amount equal
to the aggregate amount of the | ||
deductions taken in all taxable
years under | ||
subparagraph (Z) with respect to that property. | ||
If the taxpayer continues to own property through | ||
the last day of the last tax year for which the | ||
taxpayer may claim a depreciation deduction for | ||
federal income tax purposes and for which the taxpayer | ||
was allowed in any taxable year to make a subtraction | ||
modification under subparagraph (Z), then an amount | ||
equal to that subtraction modification.
| ||
The taxpayer is required to make the addition | ||
modification under this
subparagraph
only once with | ||
respect to any one piece of property; | ||
(D-17) An amount equal to the amount otherwise | ||
allowed as a deduction in computing base income for | ||
interest paid, accrued, or incurred, directly or | ||
indirectly, (i) for taxable years ending on or after | ||
December 31, 2004, to a foreign person who would be a | ||
member of the same unitary business group but for the | ||
fact that foreign person's business activity outside | ||
the United States is 80% or more of the foreign | ||
person's total business activity and (ii) for taxable | ||
years ending on or after December 31, 2008, to a person | ||
who would be a member of the same unitary business | ||
group but for the fact that the person is prohibited | ||
under Section 1501(a)(27) from being included in the | ||
unitary business group because he or she is ordinarily | ||
required to apportion business income under different | ||
subsections of Section 304. The addition modification | ||
required by this subparagraph shall be reduced to the | ||
extent that dividends were included in base income of | ||
the unitary group for the same taxable year and | ||
received by the taxpayer or by a member of the | ||
taxpayer's unitary business group (including amounts | ||
included in gross income under Sections 951 through 964 | ||
of the Internal Revenue Code and amounts included in | ||
gross income under Section 78 of the Internal Revenue | ||
Code) with respect to the stock of the same person to | ||
whom the interest was paid, accrued, or incurred. | ||
This paragraph shall not apply to the following:
| ||
(i) an item of interest paid, accrued, or | ||
incurred, directly or indirectly, to a person who | ||
is subject in a foreign country or state, other | ||
than a state which requires mandatory unitary | ||
reporting, to a tax on or measured by net income | ||
with respect to such interest; or | ||
(ii) an item of interest paid, accrued, or | ||
incurred, directly or indirectly, to a person if | ||
the taxpayer can establish, based on a | ||
preponderance of the evidence, both of the | ||
following: | ||
(a) the person, during the same taxable | ||
year, paid, accrued, or incurred, the interest | ||
to a person that is not a related member, and | ||
(b) the transaction giving rise to the | ||
interest expense between the taxpayer and the | ||
person did not have as a principal purpose the | ||
avoidance of Illinois income tax, and is paid | ||
pursuant to a contract or agreement that | ||
reflects an arm's-length interest rate and | ||
terms; or
| ||
(iii) the taxpayer can establish, based on | ||
clear and convincing evidence, that the interest | ||
paid, accrued, or incurred relates to a contract or | ||
agreement entered into at arm's-length rates and | ||
terms and the principal purpose for the payment is | ||
not federal or Illinois tax avoidance; or
| ||
(iv) an item of interest paid, accrued, or | ||
incurred, directly or indirectly, to a person if | ||
the taxpayer establishes by clear and convincing | ||
evidence that the adjustments are unreasonable; or | ||
if the taxpayer and the Director agree in writing | ||
to the application or use of an alternative method | ||
of apportionment under Section 304(f).
| ||
Nothing in this subsection shall preclude the | ||
Director from making any other adjustment | ||
otherwise allowed under Section 404 of this Act for | ||
any tax year beginning after the effective date of | ||
this amendment provided such adjustment is made | ||
pursuant to regulation adopted by the Department | ||
and such regulations provide methods and standards | ||
by which the Department will utilize its authority | ||
under Section 404 of this Act;
| ||
(D-18) An amount equal to the amount of intangible | ||
expenses and costs otherwise allowed as a deduction in | ||
computing base income, and that were paid, accrued, or | ||
incurred, directly or indirectly, (i) for taxable | ||
years ending on or after December 31, 2004, to a | ||
foreign person who would be a member of the same | ||
unitary business group but for the fact that the | ||
foreign person's business activity outside the United | ||
States is 80% or more of that person's total business | ||
activity and (ii) for taxable years ending on or after | ||
December 31, 2008, to a person who would be a member of | ||
the same unitary business group but for the fact that | ||
the person is prohibited under Section 1501(a)(27) | ||
from being included in the unitary business group | ||
because he or she is ordinarily required to apportion | ||
business income under different subsections of Section | ||
304. The addition modification required by this | ||
subparagraph shall be reduced to the extent that | ||
dividends were included in base income of the unitary | ||
group for the same taxable year and received by the | ||
taxpayer or by a member of the taxpayer's unitary | ||
business group (including amounts included in gross | ||
income under Sections 951 through 964 of the Internal | ||
Revenue Code and amounts included in gross income under | ||
Section 78 of the Internal Revenue Code) with respect | ||
to the stock of the same person to whom the intangible | ||
expenses and costs were directly or indirectly paid, | ||
incurred, or accrued. The preceding sentence does not | ||
apply to the extent that the same dividends caused a | ||
reduction to the addition modification required under | ||
Section 203(a)(2)(D-17) of this Act. As used in this | ||
subparagraph, the term "intangible expenses and costs" | ||
includes (1) expenses, losses, and costs for, or | ||
related to, the direct or indirect acquisition, use, | ||
maintenance or management, ownership, sale, exchange, | ||
or any other disposition of intangible property; (2) | ||
losses incurred, directly or indirectly, from | ||
factoring transactions or discounting transactions; | ||
(3) royalty, patent, technical, and copyright fees; | ||
(4) licensing fees; and (5) other similar expenses and | ||
costs.
For purposes of this subparagraph, "intangible | ||
property" includes patents, patent applications, trade | ||
names, trademarks, service marks, copyrights, mask | ||
works, trade secrets, and similar types of intangible | ||
assets. | ||
This paragraph shall not apply to the following: | ||
(i) any item of intangible expenses or costs | ||
paid, accrued, or incurred, directly or | ||
indirectly, from a transaction with a person who is | ||
subject in a foreign country or state, other than a | ||
state which requires mandatory unitary reporting, | ||
to a tax on or measured by net income with respect | ||
to such item; or | ||
(ii) any item of intangible expense or cost | ||
paid, accrued, or incurred, directly or | ||
indirectly, if the taxpayer can establish, based | ||
on a preponderance of the evidence, both of the | ||
following: | ||
(a) the person during the same taxable | ||
year paid, accrued, or incurred, the | ||
intangible expense or cost to a person that is | ||
not a related member, and | ||
(b) the transaction giving rise to the | ||
intangible expense or cost between the | ||
taxpayer and the person did not have as a | ||
principal purpose the avoidance of Illinois | ||
income tax, and is paid pursuant to a contract | ||
or agreement that reflects arm's-length terms; | ||
or | ||
(iii) any item of intangible expense or cost | ||
paid, accrued, or incurred, directly or | ||
indirectly, from a transaction with a person if the | ||
taxpayer establishes by clear and convincing | ||
evidence, that the adjustments are unreasonable; | ||
or if the taxpayer and the Director agree in | ||
writing to the application or use of an alternative | ||
method of apportionment under Section 304(f);
| ||
Nothing in this subsection shall preclude the | ||
Director from making any other adjustment | ||
otherwise allowed under Section 404 of this Act for | ||
any tax year beginning after the effective date of | ||
this amendment provided such adjustment is made | ||
pursuant to regulation adopted by the Department | ||
and such regulations provide methods and standards | ||
by which the Department will utilize its authority | ||
under Section 404 of this Act;
| ||
(D-19) For taxable years ending on or after | ||
December 31, 2008, an amount equal to the amount of | ||
insurance premium expenses and costs otherwise allowed | ||
as a deduction in computing base income, and that were | ||
paid, accrued, or incurred, directly or indirectly, to | ||
a person who would be a member of the same unitary | ||
business group but for the fact that the person is | ||
prohibited under Section 1501(a)(27) from being | ||
included in the unitary business group because he or | ||
she is ordinarily required to apportion business | ||
income under different subsections of Section 304. The | ||
addition modification required by this subparagraph | ||
shall be reduced to the extent that dividends were | ||
included in base income of the unitary group for the | ||
same taxable year and received by the taxpayer or by a | ||
member of the taxpayer's unitary business group | ||
(including amounts included in gross income under | ||
Sections 951 through 964 of the Internal Revenue Code | ||
and amounts included in gross income under Section 78 | ||
of the Internal Revenue Code) with respect to the stock | ||
of the same person to whom the premiums and costs were | ||
directly or indirectly paid, incurred, or accrued. The | ||
preceding sentence does not apply to the extent that | ||
the same dividends caused a reduction to the addition | ||
modification required under Section 203(a)(2)(D-17) or | ||
Section 203(a)(2)(D-18) of this Act.
| ||
(D-20) For taxable years beginning on or after | ||
January 1,
2002 and ending on or before December 31, | ||
2006, in
the
case of a distribution from a qualified | ||
tuition program under Section 529 of
the Internal | ||
Revenue Code, other than (i) a distribution from a | ||
College Savings
Pool created under Section 16.5 of the | ||
State Treasurer Act or (ii) a
distribution from the | ||
Illinois Prepaid Tuition Trust Fund, an amount equal to
| ||
the amount excluded from gross income under Section | ||
529(c)(3)(B). For taxable years beginning on or after | ||
January 1, 2007, in the case of a distribution from a | ||
qualified tuition program under Section 529 of the | ||
Internal Revenue Code, other than (i) a distribution | ||
from a College Savings Pool created under Section 16.5 | ||
of the State Treasurer Act, (ii) a distribution from | ||
the Illinois Prepaid Tuition Trust Fund, or (iii) a | ||
distribution from a qualified tuition program under | ||
Section 529 of the Internal Revenue Code that (I) | ||
adopts and determines that its offering materials | ||
comply with the College Savings Plans Network's | ||
disclosure principles and (II) has made reasonable | ||
efforts to inform in-state residents of the existence | ||
of in-state qualified tuition programs by informing | ||
Illinois residents directly and, where applicable, to | ||
inform financial intermediaries distributing the | ||
program to inform in-state residents of the existence | ||
of in-state qualified tuition programs at least | ||
annually, an amount equal to the amount excluded from | ||
gross income under Section 529(c)(3)(B). | ||
For the purposes of this subparagraph (D-20), a | ||
qualified tuition program has made reasonable efforts | ||
if it makes disclosures (which may use the term | ||
"in-state program" or "in-state plan" and need not | ||
specifically refer to Illinois or its qualified | ||
programs by name) (i) directly to prospective | ||
participants in its offering materials or makes a | ||
public disclosure, such as a website posting; and (ii) | ||
where applicable, to intermediaries selling the | ||
out-of-state program in the same manner that the | ||
out-of-state program distributes its offering | ||
materials; | ||
(D-20.5) For taxable years beginning on or after | ||
January 1, 2018, in the case of a distribution from a | ||
qualified ABLE program under Section 529A of the | ||
Internal Revenue Code, other than a distribution from a | ||
qualified ABLE program created under Section 16.6 of | ||
the State Treasurer Act, an amount equal to the amount | ||
excluded from gross income under Section 529A(c)(1)(B) | ||
of the Internal Revenue Code; | ||
(D-21) For taxable years beginning on or after | ||
January 1, 2007, in the case of transfer of moneys from | ||
a qualified tuition program under Section 529 of the | ||
Internal Revenue Code that is administered by the State | ||
to an out-of-state program, an amount equal to the | ||
amount of moneys previously deducted from base income | ||
under subsection (a)(2)(Y) of this Section; | ||
(D-21.5) For taxable years beginning on or after | ||
January 1, 2018, in the case of the transfer of moneys | ||
from a qualified tuition program under Section 529 or a | ||
qualified ABLE program under Section 529A of the | ||
Internal Revenue Code that is administered by this | ||
State to an ABLE account established under an | ||
out-of-state ABLE account program, an amount equal to | ||
the contribution component of the transferred amount | ||
that was previously deducted from base income under | ||
subsection (a)(2)(Y) or subsection (a)(2)(HH) of this | ||
Section; | ||
(D-22) For taxable years beginning on or after | ||
January 1, 2009, and prior to January 1, 2018, in the | ||
case of a nonqualified withdrawal or refund of moneys | ||
from a qualified tuition program under Section 529 of | ||
the Internal Revenue Code administered by the State | ||
that is not used for qualified expenses at an eligible | ||
education institution, an amount equal to the | ||
contribution component of the nonqualified withdrawal | ||
or refund that was previously deducted from base income | ||
under subsection (a)(2)(y) of this Section, provided | ||
that the withdrawal or refund did not result from the | ||
beneficiary's death or disability. For taxable years | ||
beginning on or after January 1, 2018: (1) in the case | ||
of a nonqualified withdrawal or refund, as defined | ||
under Section
16.5 of the State Treasurer Act, of | ||
moneys from a qualified tuition program under Section | ||
529 of the Internal Revenue Code administered by the | ||
State, an amount equal to the contribution component of | ||
the nonqualified withdrawal or refund that was | ||
previously deducted from base
income under subsection | ||
(a)(2)(Y) of this Section, and (2) in the case of a | ||
nonqualified withdrawal or refund from a qualified | ||
ABLE program under Section 529A of the Internal Revenue | ||
Code administered by the State that is not used for | ||
qualified disability expenses, an amount equal to the | ||
contribution component of the nonqualified withdrawal | ||
or refund that was previously deducted from base income | ||
under subsection (a)(2)(HH) of this Section; | ||
(D-23) An amount equal to the credit allowable to | ||
the taxpayer under Section 218(a) of this Act, | ||
determined without regard to Section 218(c) of this | ||
Act; | ||
(D-24) For taxable years ending on or after | ||
December 31, 2017, an amount equal to the deduction | ||
allowed under Section 199 of the Internal Revenue Code | ||
for the taxable year; | ||
and by deducting from the total so obtained the
sum of the | ||
following amounts: | ||
(E) For taxable years ending before December 31, | ||
2001,
any amount included in such total in respect of | ||
any compensation
(including but not limited to any | ||
compensation paid or accrued to a
serviceman while a | ||
prisoner of war or missing in action) paid to a | ||
resident
by reason of being on active duty in the Armed | ||
Forces of the United States
and in respect of any | ||
compensation paid or accrued to a resident who as a
| ||
governmental employee was a prisoner of war or missing | ||
in action, and in
respect of any compensation paid to a | ||
resident in 1971 or thereafter for
annual training | ||
performed pursuant to Sections 502 and 503, Title 32,
| ||
United States Code as a member of the Illinois National | ||
Guard or, beginning with taxable years ending on or | ||
after December 31, 2007, the National Guard of any | ||
other state.
For taxable years ending on or after | ||
December 31, 2001, any amount included in
such total in | ||
respect of any compensation (including but not limited | ||
to any
compensation paid or accrued to a serviceman | ||
while a prisoner of war or missing
in action) paid to a | ||
resident by reason of being a member of any component | ||
of
the Armed Forces of the United States and in respect | ||
of any compensation paid
or accrued to a resident who | ||
as a governmental employee was a prisoner of war
or | ||
missing in action, and in respect of any compensation | ||
paid to a resident in
2001 or thereafter by reason of | ||
being a member of the Illinois National Guard or, | ||
beginning with taxable years ending on or after | ||
December 31, 2007, the National Guard of any other | ||
state.
The provisions of this subparagraph (E) are | ||
exempt
from the provisions of Section 250; | ||
(F) An amount equal to all amounts included in such | ||
total pursuant
to the provisions of Sections 402(a), | ||
402(c), 403(a), 403(b), 406(a), 407(a),
and 408 of the | ||
Internal Revenue Code, or included in such total as
| ||
distributions under the provisions of any retirement | ||
or disability plan for
employees of any governmental | ||
agency or unit, or retirement payments to
retired | ||
partners, which payments are excluded in computing net | ||
earnings
from self employment by Section 1402 of the | ||
Internal Revenue Code and
regulations adopted pursuant | ||
thereto; | ||
(G) The valuation limitation amount; | ||
(H) An amount equal to the amount of any tax | ||
imposed by this Act
which was refunded to the taxpayer | ||
and included in such total for the
taxable year; | ||
(I) An amount equal to all amounts included in such | ||
total pursuant
to the provisions of Section 111 of the | ||
Internal Revenue Code as a
recovery of items previously | ||
deducted from adjusted gross income in the
computation | ||
of taxable income; | ||
(J) An amount equal to those dividends included in | ||
such total which were
paid by a corporation which | ||
conducts business operations in a River Edge | ||
Redevelopment Zone or zones created under the River | ||
Edge Redevelopment Zone Act, and conducts
| ||
substantially all of its operations in a River Edge | ||
Redevelopment Zone or zones. This subparagraph (J) is | ||
exempt from the provisions of Section 250; | ||
(K) An amount equal to those dividends included in | ||
such total that
were paid by a corporation that | ||
conducts business operations in a federally
designated | ||
Foreign Trade Zone or Sub-Zone and that is designated a | ||
High Impact
Business located in Illinois; provided | ||
that dividends eligible for the
deduction provided in | ||
subparagraph (J) of paragraph (2) of this subsection
| ||
shall not be eligible for the deduction provided under | ||
this subparagraph
(K); | ||
(L) For taxable years ending after December 31, | ||
1983, an amount equal to
all social security benefits | ||
and railroad retirement benefits included in
such | ||
total pursuant to Sections 72(r) and 86 of the Internal | ||
Revenue Code; | ||
(M) With the exception of any amounts subtracted | ||
under subparagraph
(N), an amount equal to the sum of | ||
all amounts disallowed as
deductions by (i) Sections | ||
171(a)(2), and 265(a)(2) 265(2) of the Internal | ||
Revenue Code, and all amounts of expenses allocable
to | ||
interest and disallowed as deductions by Section | ||
265(a)(1) 265(1) of the Internal
Revenue Code;
and (ii) | ||
for taxable years
ending on or after August 13, 1999, | ||
Sections 171(a)(2), 265,
280C, and 832(b)(5)(B)(i) of | ||
the Internal Revenue Code, plus, for taxable years | ||
ending on or after December 31, 2011, Section 45G(e)(3) | ||
of the Internal Revenue Code and, for taxable years | ||
ending on or after December 31, 2008, any amount | ||
included in gross income under Section 87 of the | ||
Internal Revenue Code; the provisions of this
| ||
subparagraph are exempt from the provisions of Section | ||
250; | ||
(N) An amount equal to all amounts included in such | ||
total which are
exempt from taxation by this State | ||
either by reason of its statutes or
Constitution
or by | ||
reason of the Constitution, treaties or statutes of the | ||
United States;
provided that, in the case of any | ||
statute of this State that exempts income
derived from | ||
bonds or other obligations from the tax imposed under | ||
this Act,
the amount exempted shall be the interest net | ||
of bond premium amortization; | ||
(O) An amount equal to any contribution made to a | ||
job training
project established pursuant to the Tax | ||
Increment Allocation Redevelopment Act; | ||
(P) An amount equal to the amount of the deduction | ||
used to compute the
federal income tax credit for | ||
restoration of substantial amounts held under
claim of | ||
right for the taxable year pursuant to Section 1341 of | ||
the
Internal Revenue Code or of any itemized deduction | ||
taken from adjusted gross income in the computation of | ||
taxable income for restoration of substantial amounts | ||
held under claim of right for the taxable year; | ||
(Q) An amount equal to any amounts included in such | ||
total, received by
the taxpayer as an acceleration in | ||
the payment of life, endowment or annuity
benefits in | ||
advance of the time they would otherwise be payable as | ||
an indemnity
for a terminal illness; | ||
(R) An amount equal to the amount of any federal or | ||
State bonus paid
to veterans of the Persian Gulf War; | ||
(S) An amount, to the extent included in adjusted | ||
gross income, equal
to the amount of a contribution | ||
made in the taxable year on behalf of the
taxpayer to a | ||
medical care savings account established under the | ||
Medical Care
Savings Account Act or the Medical Care | ||
Savings Account Act of 2000 to the
extent the | ||
contribution is accepted by the account
administrator | ||
as provided in that Act; | ||
(T) An amount, to the extent included in adjusted | ||
gross income, equal to
the amount of interest earned in | ||
the taxable year on a medical care savings
account | ||
established under the Medical Care Savings Account Act | ||
or the Medical
Care Savings Account Act of 2000 on | ||
behalf of the
taxpayer, other than interest added | ||
pursuant to item (D-5) of this paragraph
(2); | ||
(U) For one taxable year beginning on or after | ||
January 1,
1994, an
amount equal to the total amount of | ||
tax imposed and paid under subsections (a)
and (b) of | ||
Section 201 of this Act on grant amounts received by | ||
the taxpayer
under the Nursing Home Grant Assistance | ||
Act during the taxpayer's taxable years
1992 and 1993; | ||
(V) Beginning with tax years ending on or after | ||
December 31, 1995 and
ending with tax years ending on | ||
or before December 31, 2004, an amount equal to
the | ||
amount paid by a taxpayer who is a
self-employed | ||
taxpayer, a partner of a partnership, or a
shareholder | ||
in a Subchapter S corporation for health insurance or | ||
long-term
care insurance for that taxpayer or that | ||
taxpayer's spouse or dependents, to
the extent that the | ||
amount paid for that health insurance or long-term care
| ||
insurance may be deducted under Section 213 of the | ||
Internal Revenue Code, has not been deducted on the | ||
federal income tax return of the taxpayer,
and does not | ||
exceed the taxable income attributable to that | ||
taxpayer's income,
self-employment income, or | ||
Subchapter S corporation income; except that no
| ||
deduction shall be allowed under this item (V) if the | ||
taxpayer is eligible to
participate in any health | ||
insurance or long-term care insurance plan of an
| ||
employer of the taxpayer or the taxpayer's
spouse. The | ||
amount of the health insurance and long-term care | ||
insurance
subtracted under this item (V) shall be | ||
determined by multiplying total
health insurance and | ||
long-term care insurance premiums paid by the taxpayer
| ||
times a number that represents the fractional | ||
percentage of eligible medical
expenses under Section | ||
213 of the Internal Revenue Code of 1986 not actually
| ||
deducted on the taxpayer's federal income tax return; | ||
(W) For taxable years beginning on or after January | ||
1, 1998,
all amounts included in the taxpayer's federal | ||
gross income
in the taxable year from amounts converted | ||
from a regular IRA to a Roth IRA.
This paragraph is | ||
exempt from the provisions of Section
250; | ||
(X) For taxable year 1999 and thereafter, an amount | ||
equal to the
amount of any (i) distributions, to the | ||
extent includible in gross income for
federal income | ||
tax purposes, made to the taxpayer because of his or | ||
her status
as a victim of persecution for racial or | ||
religious reasons by Nazi Germany or
any other Axis | ||
regime or as an heir of the victim and (ii) items
of | ||
income, to the extent
includible in gross income for | ||
federal income tax purposes, attributable to,
derived | ||
from or in any way related to assets stolen from, | ||
hidden from, or
otherwise lost to a victim of
| ||
persecution for racial or religious reasons by Nazi | ||
Germany or any other Axis
regime immediately prior to, | ||
during, and immediately after World War II,
including, | ||
but
not limited to, interest on the proceeds receivable | ||
as insurance
under policies issued to a victim of | ||
persecution for racial or religious
reasons
by Nazi | ||
Germany or any other Axis regime by European insurance | ||
companies
immediately prior to and during World War II;
| ||
provided, however, this subtraction from federal | ||
adjusted gross income does not
apply to assets acquired | ||
with such assets or with the proceeds from the sale of
| ||
such assets; provided, further, this paragraph shall | ||
only apply to a taxpayer
who was the first recipient of | ||
such assets after their recovery and who is a
victim of | ||
persecution for racial or religious reasons
by Nazi | ||
Germany or any other Axis regime or as an heir of the | ||
victim. The
amount of and the eligibility for any | ||
public assistance, benefit, or
similar entitlement is | ||
not affected by the inclusion of items (i) and (ii) of
| ||
this paragraph in gross income for federal income tax | ||
purposes.
This paragraph is exempt from the provisions | ||
of Section 250; | ||
(Y) For taxable years beginning on or after January | ||
1, 2002
and ending
on or before December 31, 2004, | ||
moneys contributed in the taxable year to a College | ||
Savings Pool account under
Section 16.5 of the State | ||
Treasurer Act, except that amounts excluded from
gross | ||
income under Section 529(c)(3)(C)(i) of the Internal | ||
Revenue Code
shall not be considered moneys | ||
contributed under this subparagraph (Y). For taxable | ||
years beginning on or after January 1, 2005, a maximum | ||
of $10,000
contributed
in the
taxable year to (i) a | ||
College Savings Pool account under Section 16.5 of the
| ||
State
Treasurer Act or (ii) the Illinois Prepaid | ||
Tuition Trust Fund,
except that
amounts excluded from | ||
gross income under Section 529(c)(3)(C)(i) of the
| ||
Internal
Revenue Code shall not be considered moneys | ||
contributed under this subparagraph
(Y). For purposes | ||
of this subparagraph, contributions made by an | ||
employer on behalf of an employee, or matching | ||
contributions made by an employee, shall be treated as | ||
made by the employee. This
subparagraph (Y) is exempt | ||
from the provisions of Section 250; | ||
(Z) For taxable years 2001 and thereafter, for the | ||
taxable year in
which the bonus depreciation deduction
| ||
is taken on the taxpayer's federal income tax return | ||
under
subsection (k) of Section 168 of the Internal | ||
Revenue Code and for each
applicable taxable year | ||
thereafter, an amount equal to "x", where: | ||
(1) "y" equals the amount of the depreciation | ||
deduction taken for the
taxable year
on the | ||
taxpayer's federal income tax return on property | ||
for which the bonus
depreciation deduction
was | ||
taken in any year under subsection (k) of Section | ||
168 of the Internal
Revenue Code, but not including | ||
the bonus depreciation deduction; | ||
(2) for taxable years ending on or before | ||
December 31, 2005, "x" equals "y" multiplied by 30 | ||
and then divided by 70 (or "y"
multiplied by | ||
0.429); and | ||
(3) for taxable years ending after December | ||
31, 2005: | ||
(i) for property on which a bonus | ||
depreciation deduction of 30% of the adjusted | ||
basis was taken, "x" equals "y" multiplied by | ||
30 and then divided by 70 (or "y"
multiplied by | ||
0.429); and | ||
(ii) for property on which a bonus | ||
depreciation deduction of 50% of the adjusted | ||
basis was taken, "x" equals "y" multiplied by | ||
1.0. | ||
The aggregate amount deducted under this | ||
subparagraph in all taxable
years for any one piece of | ||
property may not exceed the amount of the bonus
| ||
depreciation deduction
taken on that property on the | ||
taxpayer's federal income tax return under
subsection | ||
(k) of Section 168 of the Internal Revenue Code. This | ||
subparagraph (Z) is exempt from the provisions of | ||
Section 250; | ||
(AA) If the taxpayer sells, transfers, abandons, | ||
or otherwise disposes of
property for which the | ||
taxpayer was required in any taxable year to make an
| ||
addition modification under subparagraph (D-15), then | ||
an amount equal to that
addition modification.
| ||
If the taxpayer continues to own property through | ||
the last day of the last tax year for which the | ||
taxpayer may claim a depreciation deduction for | ||
federal income tax purposes and for which the taxpayer | ||
was required in any taxable year to make an addition | ||
modification under subparagraph (D-15), then an amount | ||
equal to that addition modification.
| ||
The taxpayer is allowed to take the deduction under | ||
this subparagraph
only once with respect to any one | ||
piece of property. | ||
This subparagraph (AA) is exempt from the | ||
provisions of Section 250; | ||
(BB) Any amount included in adjusted gross income, | ||
other
than
salary,
received by a driver in a | ||
ridesharing arrangement using a motor vehicle; | ||
(CC) The amount of (i) any interest income (net of | ||
the deductions allocable thereto) taken into account | ||
for the taxable year with respect to a transaction with | ||
a taxpayer that is required to make an addition | ||
modification with respect to such transaction under | ||
Section 203(a)(2)(D-17), 203(b)(2)(E-12), | ||
203(c)(2)(G-12), or 203(d)(2)(D-7), but not to exceed | ||
the amount of that addition modification, and
(ii) any | ||
income from intangible property (net of the deductions | ||
allocable thereto) taken into account for the taxable | ||
year with respect to a transaction with a taxpayer that | ||
is required to make an addition modification with | ||
respect to such transaction under Section | ||
203(a)(2)(D-18), 203(b)(2)(E-13), 203(c)(2)(G-13), or | ||
203(d)(2)(D-8), but not to exceed the amount of that | ||
addition modification. This subparagraph (CC) is | ||
exempt from the provisions of Section 250; | ||
(DD) An amount equal to the interest income taken | ||
into account for the taxable year (net of the | ||
deductions allocable thereto) with respect to | ||
transactions with (i) a foreign person who would be a | ||
member of the taxpayer's unitary business group but for | ||
the fact that the foreign person's business activity | ||
outside the United States is 80% or more of that | ||
person's total business activity and (ii) for taxable | ||
years ending on or after December 31, 2008, to a person | ||
who would be a member of the same unitary business | ||
group but for the fact that the person is prohibited | ||
under Section 1501(a)(27) from being included in the | ||
unitary business group because he or she is ordinarily | ||
required to apportion business income under different | ||
subsections of Section 304, but not to exceed the | ||
addition modification required to be made for the same | ||
taxable year under Section 203(a)(2)(D-17) for | ||
interest paid, accrued, or incurred, directly or | ||
indirectly, to the same person. This subparagraph (DD) | ||
is exempt from the provisions of Section 250; | ||
(EE) An amount equal to the income from intangible | ||
property taken into account for the taxable year (net | ||
of the deductions allocable thereto) with respect to | ||
transactions with (i) a foreign person who would be a | ||
member of the taxpayer's unitary business group but for | ||
the fact that the foreign person's business activity | ||
outside the United States is 80% or more of that | ||
person's total business activity and (ii) for taxable | ||
years ending on or after December 31, 2008, to a person | ||
who would be a member of the same unitary business | ||
group but for the fact that the person is prohibited | ||
under Section 1501(a)(27) from being included in the | ||
unitary business group because he or she is ordinarily | ||
required to apportion business income under different | ||
subsections of Section 304, but not to exceed the | ||
addition modification required to be made for the same | ||
taxable year under Section 203(a)(2)(D-18) for | ||
intangible expenses and costs paid, accrued, or | ||
incurred, directly or indirectly, to the same foreign | ||
person. This subparagraph (EE) is exempt from the | ||
provisions of Section 250; | ||
(FF) An amount equal to any amount awarded to the | ||
taxpayer during the taxable year by the Court of Claims | ||
under subsection (c) of Section 8 of the Court of | ||
Claims Act for time unjustly served in a State prison. | ||
This subparagraph (FF) is exempt from the provisions of | ||
Section 250; | ||
(GG) For taxable years ending on or after December | ||
31, 2011, in the case of a taxpayer who was required to | ||
add back any insurance premiums under Section | ||
203(a)(2)(D-19), such taxpayer may elect to subtract | ||
that part of a reimbursement received from the | ||
insurance company equal to the amount of the expense or | ||
loss (including expenses incurred by the insurance | ||
company) that would have been taken into account as a | ||
deduction for federal income tax purposes if the | ||
expense or loss had been uninsured. If a taxpayer makes | ||
the election provided for by this subparagraph (GG), | ||
the insurer to which the premiums were paid must add | ||
back to income the amount subtracted by the taxpayer | ||
pursuant to this subparagraph (GG). This subparagraph | ||
(GG) is exempt from the provisions of Section 250; and | ||
(HH) For taxable years beginning on or after | ||
January 1, 2018 and prior to January 1, 2023, a maximum | ||
of $10,000 contributed in the taxable year to a | ||
qualified ABLE account under Section 16.6 of the State | ||
Treasurer Act, except that amounts excluded from gross | ||
income under Section 529(c)(3)(C)(i) or Section | ||
529A(c)(1)(C) of the Internal Revenue Code shall not be | ||
considered moneys contributed under this subparagraph | ||
(HH). For purposes of this subparagraph (HH), | ||
contributions made by an employer on behalf of an | ||
employee, or matching contributions made by an | ||
employee, shall be treated as made by the employee. | ||
(b) Corporations. | ||
(1) In general. In the case of a corporation, base | ||
income means an
amount equal to the taxpayer's taxable | ||
income for the taxable year as
modified by paragraph (2). | ||
(2) Modifications. The taxable income referred to in | ||
paragraph (1)
shall be modified by adding thereto the sum | ||
of the following amounts: | ||
(A) An amount equal to all amounts paid or accrued | ||
to the taxpayer
as interest and all distributions | ||
received from regulated investment
companies during | ||
the taxable year to the extent excluded from gross
| ||
income in the computation of taxable income; | ||
(B) An amount equal to the amount of tax imposed by | ||
this Act to the
extent deducted from gross income in | ||
the computation of taxable income
for the taxable year; | ||
(C) In the case of a regulated investment company, | ||
an amount equal to
the excess of (i) the net long-term | ||
capital gain for the taxable year, over
(ii) the amount | ||
of the capital gain dividends designated as such in | ||
accordance
with Section 852(b)(3)(C) of the Internal | ||
Revenue Code and any amount
designated under Section | ||
852(b)(3)(D) of the Internal Revenue Code,
| ||
attributable to the taxable year (this amendatory Act | ||
of 1995
(Public Act 89-89) is declarative of existing | ||
law and is not a new
enactment); | ||
(D) The amount of any net operating loss deduction | ||
taken in arriving
at taxable income, other than a net | ||
operating loss carried forward from a
taxable year | ||
ending prior to December 31, 1986; | ||
(E) For taxable years in which a net operating loss | ||
carryback or
carryforward from a taxable year ending | ||
prior to December 31, 1986 is an
element of taxable | ||
income under paragraph (1) of subsection (e) or
| ||
subparagraph (E) of paragraph (2) of subsection (e), | ||
the amount by which
addition modifications other than | ||
those provided by this subparagraph (E)
exceeded | ||
subtraction modifications in such earlier taxable | ||
year, with the
following limitations applied in the | ||
order that they are listed: | ||
(i) the addition modification relating to the | ||
net operating loss
carried back or forward to the | ||
taxable year from any taxable year ending
prior to | ||
December 31, 1986 shall be reduced by the amount of | ||
addition
modification under this subparagraph (E) | ||
which related to that net operating
loss and which | ||
was taken into account in calculating the base | ||
income of an
earlier taxable year, and | ||
(ii) the addition modification relating to the | ||
net operating loss
carried back or forward to the | ||
taxable year from any taxable year ending
prior to | ||
December 31, 1986 shall not exceed the amount of | ||
such carryback or
carryforward; | ||
For taxable years in which there is a net operating | ||
loss carryback or
carryforward from more than one other | ||
taxable year ending prior to December
31, 1986, the | ||
addition modification provided in this subparagraph | ||
(E) shall
be the sum of the amounts computed | ||
independently under the preceding
provisions of this | ||
subparagraph (E) for each such taxable year; | ||
(E-5) For taxable years ending after December 31, | ||
1997, an
amount equal to any eligible remediation costs | ||
that the corporation
deducted in computing adjusted | ||
gross income and for which the
corporation claims a | ||
credit under subsection (l) of Section 201; | ||
(E-10) For taxable years 2001 and thereafter, an | ||
amount equal to the
bonus depreciation deduction taken | ||
on the taxpayer's federal income tax return for the | ||
taxable
year under subsection (k) of Section 168 of the | ||
Internal Revenue Code; | ||
(E-11) If the taxpayer sells, transfers, abandons, | ||
or otherwise disposes of property for which the | ||
taxpayer was required in any taxable year to
make an | ||
addition modification under subparagraph (E-10), then | ||
an amount equal
to the aggregate amount of the | ||
deductions taken in all taxable
years under | ||
subparagraph (T) with respect to that property. | ||
If the taxpayer continues to own property through | ||
the last day of the last tax year for which the | ||
taxpayer may claim a depreciation deduction for | ||
federal income tax purposes and for which the taxpayer | ||
was allowed in any taxable year to make a subtraction | ||
modification under subparagraph (T), then an amount | ||
equal to that subtraction modification.
| ||
The taxpayer is required to make the addition | ||
modification under this
subparagraph
only once with | ||
respect to any one piece of property; | ||
(E-12) An amount equal to the amount otherwise | ||
allowed as a deduction in computing base income for | ||
interest paid, accrued, or incurred, directly or | ||
indirectly, (i) for taxable years ending on or after | ||
December 31, 2004, to a foreign person who would be a | ||
member of the same unitary business group but for the | ||
fact the foreign person's business activity outside | ||
the United States is 80% or more of the foreign | ||
person's total business activity and (ii) for taxable | ||
years ending on or after December 31, 2008, to a person | ||
who would be a member of the same unitary business | ||
group but for the fact that the person is prohibited | ||
under Section 1501(a)(27) from being included in the | ||
unitary business group because he or she is ordinarily | ||
required to apportion business income under different | ||
subsections of Section 304. The addition modification | ||
required by this subparagraph shall be reduced to the | ||
extent that dividends were included in base income of | ||
the unitary group for the same taxable year and | ||
received by the taxpayer or by a member of the | ||
taxpayer's unitary business group (including amounts | ||
included in gross income pursuant to Sections 951 | ||
through 964 of the Internal Revenue Code and amounts | ||
included in gross income under Section 78 of the | ||
Internal Revenue Code) with respect to the stock of the | ||
same person to whom the interest was paid, accrued, or | ||
incurred.
| ||
This paragraph shall not apply to the following:
| ||
(i) an item of interest paid, accrued, or | ||
incurred, directly or indirectly, to a person who | ||
is subject in a foreign country or state, other | ||
than a state which requires mandatory unitary | ||
reporting, to a tax on or measured by net income | ||
with respect to such interest; or | ||
(ii) an item of interest paid, accrued, or | ||
incurred, directly or indirectly, to a person if | ||
the taxpayer can establish, based on a | ||
preponderance of the evidence, both of the | ||
following: | ||
(a) the person, during the same taxable | ||
year, paid, accrued, or incurred, the interest | ||
to a person that is not a related member, and | ||
(b) the transaction giving rise to the | ||
interest expense between the taxpayer and the | ||
person did not have as a principal purpose the | ||
avoidance of Illinois income tax, and is paid | ||
pursuant to a contract or agreement that | ||
reflects an arm's-length interest rate and | ||
terms; or
| ||
(iii) the taxpayer can establish, based on | ||
clear and convincing evidence, that the interest | ||
paid, accrued, or incurred relates to a contract or | ||
agreement entered into at arm's-length rates and | ||
terms and the principal purpose for the payment is | ||
not federal or Illinois tax avoidance; or
| ||
(iv) an item of interest paid, accrued, or | ||
incurred, directly or indirectly, to a person if | ||
the taxpayer establishes by clear and convincing | ||
evidence that the adjustments are unreasonable; or | ||
if the taxpayer and the Director agree in writing | ||
to the application or use of an alternative method | ||
of apportionment under Section 304(f).
| ||
Nothing in this subsection shall preclude the | ||
Director from making any other adjustment | ||
otherwise allowed under Section 404 of this Act for | ||
any tax year beginning after the effective date of | ||
this amendment provided such adjustment is made | ||
pursuant to regulation adopted by the Department | ||
and such regulations provide methods and standards | ||
by which the Department will utilize its authority | ||
under Section 404 of this Act;
| ||
(E-13) An amount equal to the amount of intangible | ||
expenses and costs otherwise allowed as a deduction in | ||
computing base income, and that were paid, accrued, or | ||
incurred, directly or indirectly, (i) for taxable | ||
years ending on or after December 31, 2004, to a | ||
foreign person who would be a member of the same | ||
unitary business group but for the fact that the | ||
foreign person's business activity outside the United | ||
States is 80% or more of that person's total business | ||
activity and (ii) for taxable years ending on or after | ||
December 31, 2008, to a person who would be a member of | ||
the same unitary business group but for the fact that | ||
the person is prohibited under Section 1501(a)(27) | ||
from being included in the unitary business group | ||
because he or she is ordinarily required to apportion | ||
business income under different subsections of Section | ||
304. The addition modification required by this | ||
subparagraph shall be reduced to the extent that | ||
dividends were included in base income of the unitary | ||
group for the same taxable year and received by the | ||
taxpayer or by a member of the taxpayer's unitary | ||
business group (including amounts included in gross | ||
income pursuant to Sections 951 through 964 of the | ||
Internal Revenue Code and amounts included in gross | ||
income under Section 78 of the Internal Revenue Code) | ||
with respect to the stock of the same person to whom | ||
the intangible expenses and costs were directly or | ||
indirectly paid, incurred, or accrued. The preceding | ||
sentence shall not apply to the extent that the same | ||
dividends caused a reduction to the addition | ||
modification required under Section 203(b)(2)(E-12) of | ||
this Act.
As used in this subparagraph, the term | ||
"intangible expenses and costs" includes (1) expenses, | ||
losses, and costs for, or related to, the direct or | ||
indirect acquisition, use, maintenance or management, | ||
ownership, sale, exchange, or any other disposition of | ||
intangible property; (2) losses incurred, directly or | ||
indirectly, from factoring transactions or discounting | ||
transactions; (3) royalty, patent, technical, and | ||
copyright fees; (4) licensing fees; and (5) other | ||
similar expenses and costs.
For purposes of this | ||
subparagraph, "intangible property" includes patents, | ||
patent applications, trade names, trademarks, service | ||
marks, copyrights, mask works, trade secrets, and | ||
similar types of intangible assets. | ||
This paragraph shall not apply to the following: | ||
(i) any item of intangible expenses or costs | ||
paid, accrued, or incurred, directly or | ||
indirectly, from a transaction with a person who is | ||
subject in a foreign country or state, other than a | ||
state which requires mandatory unitary reporting, | ||
to a tax on or measured by net income with respect | ||
to such item; or | ||
(ii) any item of intangible expense or cost | ||
paid, accrued, or incurred, directly or | ||
indirectly, if the taxpayer can establish, based | ||
on a preponderance of the evidence, both of the | ||
following: | ||
(a) the person during the same taxable | ||
year paid, accrued, or incurred, the | ||
intangible expense or cost to a person that is | ||
not a related member, and | ||
(b) the transaction giving rise to the | ||
intangible expense or cost between the | ||
taxpayer and the person did not have as a | ||
principal purpose the avoidance of Illinois | ||
income tax, and is paid pursuant to a contract | ||
or agreement that reflects arm's-length terms; | ||
or | ||
(iii) any item of intangible expense or cost | ||
paid, accrued, or incurred, directly or | ||
indirectly, from a transaction with a person if the | ||
taxpayer establishes by clear and convincing | ||
evidence, that the adjustments are unreasonable; | ||
or if the taxpayer and the Director agree in | ||
writing to the application or use of an alternative | ||
method of apportionment under Section 304(f);
| ||
Nothing in this subsection shall preclude the | ||
Director from making any other adjustment | ||
otherwise allowed under Section 404 of this Act for | ||
any tax year beginning after the effective date of | ||
this amendment provided such adjustment is made | ||
pursuant to regulation adopted by the Department | ||
and such regulations provide methods and standards | ||
by which the Department will utilize its authority | ||
under Section 404 of this Act;
| ||
(E-14) For taxable years ending on or after | ||
December 31, 2008, an amount equal to the amount of | ||
insurance premium expenses and costs otherwise allowed | ||
as a deduction in computing base income, and that were | ||
paid, accrued, or incurred, directly or indirectly, to | ||
a person who would be a member of the same unitary | ||
business group but for the fact that the person is | ||
prohibited under Section 1501(a)(27) from being | ||
included in the unitary business group because he or | ||
she is ordinarily required to apportion business | ||
income under different subsections of Section 304. The | ||
addition modification required by this subparagraph | ||
shall be reduced to the extent that dividends were | ||
included in base income of the unitary group for the | ||
same taxable year and received by the taxpayer or by a | ||
member of the taxpayer's unitary business group | ||
(including amounts included in gross income under | ||
Sections 951 through 964 of the Internal Revenue Code | ||
and amounts included in gross income under Section 78 | ||
of the Internal Revenue Code) with respect to the stock | ||
of the same person to whom the premiums and costs were | ||
directly or indirectly paid, incurred, or accrued. The | ||
preceding sentence does not apply to the extent that | ||
the same dividends caused a reduction to the addition | ||
modification required under Section 203(b)(2)(E-12) or | ||
Section 203(b)(2)(E-13) of this Act;
| ||
(E-15) For taxable years beginning after December | ||
31, 2008, any deduction for dividends paid by a captive | ||
real estate investment trust that is allowed to a real | ||
estate investment trust under Section 857(b)(2)(B) of | ||
the Internal Revenue Code for dividends paid; | ||
(E-16) An amount equal to the credit allowable to | ||
the taxpayer under Section 218(a) of this Act, | ||
determined without regard to Section 218(c) of this | ||
Act; | ||
(E-17) For taxable years ending on or after | ||
December 31, 2017, an amount equal to the deduction | ||
allowed under Section 199 of the Internal Revenue Code | ||
for the taxable year; | ||
(E-18) for taxable years beginning after December | ||
31, 2018, an amount equal to the deduction allowed | ||
under Section 250(a)(1)(A) of the Internal Revenue | ||
Code for the taxable year. | ||
and by deducting from the total so obtained the sum of the | ||
following
amounts: | ||
(F) An amount equal to the amount of any tax | ||
imposed by this Act
which was refunded to the taxpayer | ||
and included in such total for the
taxable year; | ||
(G) An amount equal to any amount included in such | ||
total under
Section 78 of the Internal Revenue Code; | ||
(H) In the case of a regulated investment company, | ||
an amount equal
to the amount of exempt interest | ||
dividends as defined in subsection (b)(5) of Section | ||
852 of the Internal Revenue Code, paid to shareholders
| ||
for the taxable year; | ||
(I) With the exception of any amounts subtracted | ||
under subparagraph
(J),
an amount equal to the sum of | ||
all amounts disallowed as
deductions by (i) Sections | ||
171(a)(2), and 265(a)(2) and amounts disallowed as
| ||
interest expense by Section 291(a)(3) of the Internal | ||
Revenue Code, and all amounts of expenses allocable to | ||
interest and
disallowed as deductions by Section | ||
265(a)(1) of the Internal Revenue Code;
and (ii) for | ||
taxable years
ending on or after August 13, 1999, | ||
Sections
171(a)(2), 265,
280C, 291(a)(3), and | ||
832(b)(5)(B)(i) of the Internal Revenue Code, plus, | ||
for tax years ending on or after December 31, 2011, | ||
amounts disallowed as deductions by Section 45G(e)(3) | ||
of the Internal Revenue Code and, for taxable years | ||
ending on or after December 31, 2008, any amount | ||
included in gross income under Section 87 of the | ||
Internal Revenue Code and the policyholders' share of | ||
tax-exempt interest of a life insurance company under | ||
Section 807(a)(2)(B) of the Internal Revenue Code (in | ||
the case of a life insurance company with gross income | ||
from a decrease in reserves for the tax year) or | ||
Section 807(b)(1)(B) of the Internal Revenue Code (in | ||
the case of a life insurance company allowed a | ||
deduction for an increase in reserves for the tax | ||
year); the
provisions of this
subparagraph are exempt | ||
from the provisions of Section 250; | ||
(J) An amount equal to all amounts included in such | ||
total which are
exempt from taxation by this State | ||
either by reason of its statutes or
Constitution
or by | ||
reason of the Constitution, treaties or statutes of the | ||
United States;
provided that, in the case of any | ||
statute of this State that exempts income
derived from | ||
bonds or other obligations from the tax imposed under | ||
this Act,
the amount exempted shall be the interest net | ||
of bond premium amortization; | ||
(K) An amount equal to those dividends included in | ||
such total
which were paid by a corporation which | ||
conducts
business operations in a River Edge | ||
Redevelopment Zone or zones created under the River | ||
Edge Redevelopment Zone Act and conducts substantially | ||
all of its
operations in a River Edge Redevelopment | ||
Zone or zones. This subparagraph (K) is exempt from the | ||
provisions of Section 250; | ||
(L) An amount equal to those dividends included in | ||
such total that
were paid by a corporation that | ||
conducts business operations in a federally
designated | ||
Foreign Trade Zone or Sub-Zone and that is designated a | ||
High Impact
Business located in Illinois; provided | ||
that dividends eligible for the
deduction provided in | ||
subparagraph (K) of paragraph 2 of this subsection
| ||
shall not be eligible for the deduction provided under | ||
this subparagraph
(L); | ||
(M) For any taxpayer that is a financial | ||
organization within the meaning
of Section 304(c) of | ||
this Act, an amount included in such total as interest
| ||
income from a loan or loans made by such taxpayer to a | ||
borrower, to the extent
that such a loan is secured by | ||
property which is eligible for the River Edge | ||
Redevelopment Zone Investment Credit. To determine the | ||
portion of a loan or loans that is
secured by property | ||
eligible for a Section 201(f) investment
credit to the | ||
borrower, the entire principal amount of the loan or | ||
loans
between the taxpayer and the borrower should be | ||
divided into the basis of the
Section 201(f) investment | ||
credit property which secures the
loan or loans, using | ||
for this purpose the original basis of such property on
| ||
the date that it was placed in service in the River | ||
Edge Redevelopment Zone. The subtraction modification | ||
available to the taxpayer in any
year under this | ||
subsection shall be that portion of the total interest | ||
paid
by the borrower with respect to such loan | ||
attributable to the eligible
property as calculated | ||
under the previous sentence. This subparagraph (M) is | ||
exempt from the provisions of Section 250; | ||
(M-1) For any taxpayer that is a financial | ||
organization within the
meaning of Section 304(c) of | ||
this Act, an amount included in such total as
interest | ||
income from a loan or loans made by such taxpayer to a | ||
borrower,
to the extent that such a loan is secured by | ||
property which is eligible for
the High Impact Business | ||
Investment Credit. To determine the portion of a
loan | ||
or loans that is secured by property eligible for a | ||
Section 201(h) investment credit to the borrower, the | ||
entire principal amount of
the loan or loans between | ||
the taxpayer and the borrower should be divided into
| ||
the basis of the Section 201(h) investment credit | ||
property which
secures the loan or loans, using for | ||
this purpose the original basis of such
property on the | ||
date that it was placed in service in a federally | ||
designated
Foreign Trade Zone or Sub-Zone located in | ||
Illinois. No taxpayer that is
eligible for the | ||
deduction provided in subparagraph (M) of paragraph | ||
(2) of
this subsection shall be eligible for the | ||
deduction provided under this
subparagraph (M-1). The | ||
subtraction modification available to taxpayers in
any | ||
year under this subsection shall be that portion of the | ||
total interest
paid by the borrower with respect to | ||
such loan attributable to the eligible
property as | ||
calculated under the previous sentence; | ||
(N) Two times any contribution made during the | ||
taxable year to a
designated zone organization to the | ||
extent that the contribution (i)
qualifies as a | ||
charitable contribution under subsection (c) of | ||
Section 170
of the Internal Revenue Code and (ii) must, | ||
by its terms, be used for a
project approved by the | ||
Department of Commerce and Economic Opportunity under | ||
Section 11 of the Illinois Enterprise Zone Act or under | ||
Section 10-10 of the River Edge Redevelopment Zone Act. | ||
This subparagraph (N) is exempt from the provisions of | ||
Section 250; | ||
(O) An amount equal to: (i) 85% for taxable years | ||
ending on or before
December 31, 1992, or, a percentage | ||
equal to the percentage allowable under
Section | ||
243(a)(1) of the Internal Revenue Code of 1986 for | ||
taxable years ending
after December 31, 1992, of the | ||
amount by which dividends included in taxable
income | ||
and received from a corporation that is not created or | ||
organized under
the laws of the United States or any | ||
state or political subdivision thereof,
including, for | ||
taxable years ending on or after December 31, 1988, | ||
dividends
received or deemed received or paid or deemed | ||
paid under Sections 951 through
965 of the Internal | ||
Revenue Code, exceed the amount of the modification
| ||
provided under subparagraph (G) of paragraph (2) of | ||
this subsection (b) which
is related to such dividends, | ||
and including, for taxable years ending on or after | ||
December 31, 2008, dividends received from a captive | ||
real estate investment trust; plus (ii) 100% of the | ||
amount by which dividends,
included in taxable income | ||
and received, including, for taxable years ending on
or | ||
after December 31, 1988, dividends received or deemed | ||
received or paid or
deemed paid under Sections 951 | ||
through 964 of the Internal Revenue Code and including, | ||
for taxable years ending on or after December 31, 2008, | ||
dividends received from a captive real estate | ||
investment trust, from
any such corporation specified | ||
in clause (i) that would but for the provisions
of | ||
Section 1504(b)(3) of the Internal Revenue Code be | ||
treated as a member of
the affiliated group which | ||
includes the dividend recipient, exceed the amount
of | ||
the modification provided under subparagraph (G) of | ||
paragraph (2) of this
subsection (b) which is related | ||
to such dividends. This subparagraph (O) is exempt from | ||
the provisions of Section 250 of this Act; | ||
(P) An amount equal to any contribution made to a | ||
job training project
established pursuant to the Tax | ||
Increment Allocation Redevelopment Act; | ||
(Q) An amount equal to the amount of the deduction | ||
used to compute the
federal income tax credit for | ||
restoration of substantial amounts held under
claim of | ||
right for the taxable year pursuant to Section 1341 of | ||
the
Internal Revenue Code; | ||
(R) On and after July 20, 1999, in the case of an | ||
attorney-in-fact with respect to whom an
interinsurer | ||
or a reciprocal insurer has made the election under | ||
Section 835 of
the Internal Revenue Code, 26 U.S.C. | ||
835, an amount equal to the excess, if
any, of the | ||
amounts paid or incurred by that interinsurer or | ||
reciprocal insurer
in the taxable year to the | ||
attorney-in-fact over the deduction allowed to that
| ||
interinsurer or reciprocal insurer with respect to the | ||
attorney-in-fact under
Section 835(b) of the Internal | ||
Revenue Code for the taxable year; the provisions of | ||
this subparagraph are exempt from the provisions of | ||
Section 250; | ||
(S) For taxable years ending on or after December | ||
31, 1997, in the
case of a Subchapter
S corporation, an | ||
amount equal to all amounts of income allocable to a
| ||
shareholder subject to the Personal Property Tax | ||
Replacement Income Tax imposed
by subsections (c) and | ||
(d) of Section 201 of this Act, including amounts
| ||
allocable to organizations exempt from federal income | ||
tax by reason of Section
501(a) of the Internal Revenue | ||
Code. This subparagraph (S) is exempt from
the | ||
provisions of Section 250; | ||
(T) For taxable years 2001 and thereafter, for the | ||
taxable year in
which the bonus depreciation deduction
| ||
is taken on the taxpayer's federal income tax return | ||
under
subsection (k) of Section 168 of the Internal | ||
Revenue Code and for each
applicable taxable year | ||
thereafter, an amount equal to "x", where: | ||
(1) "y" equals the amount of the depreciation | ||
deduction taken for the
taxable year
on the | ||
taxpayer's federal income tax return on property | ||
for which the bonus
depreciation deduction
was | ||
taken in any year under subsection (k) of Section | ||
168 of the Internal
Revenue Code, but not including | ||
the bonus depreciation deduction; | ||
(2) for taxable years ending on or before | ||
December 31, 2005, "x" equals "y" multiplied by 30 | ||
and then divided by 70 (or "y"
multiplied by | ||
0.429); and | ||
(3) for taxable years ending after December | ||
31, 2005: | ||
(i) for property on which a bonus | ||
depreciation deduction of 30% of the adjusted | ||
basis was taken, "x" equals "y" multiplied by | ||
30 and then divided by 70 (or "y"
multiplied by | ||
0.429); and | ||
(ii) for property on which a bonus | ||
depreciation deduction of 50% of the adjusted | ||
basis was taken, "x" equals "y" multiplied by | ||
1.0. | ||
The aggregate amount deducted under this | ||
subparagraph in all taxable
years for any one piece of | ||
property may not exceed the amount of the bonus
| ||
depreciation deduction
taken on that property on the | ||
taxpayer's federal income tax return under
subsection | ||
(k) of Section 168 of the Internal Revenue Code. This | ||
subparagraph (T) is exempt from the provisions of | ||
Section 250; | ||
(U) If the taxpayer sells, transfers, abandons, or | ||
otherwise disposes of
property for which the taxpayer | ||
was required in any taxable year to make an
addition | ||
modification under subparagraph (E-10), then an amount | ||
equal to that
addition modification. | ||
If the taxpayer continues to own property through | ||
the last day of the last tax year for which the | ||
taxpayer may claim a depreciation deduction for | ||
federal income tax purposes and for which the taxpayer | ||
was required in any taxable year to make an addition | ||
modification under subparagraph (E-10), then an amount | ||
equal to that addition modification.
| ||
The taxpayer is allowed to take the deduction under | ||
this subparagraph
only once with respect to any one | ||
piece of property. | ||
This subparagraph (U) is exempt from the | ||
provisions of Section 250; | ||
(V) The amount of: (i) any interest income (net of | ||
the deductions allocable thereto) taken into account | ||
for the taxable year with respect to a transaction with | ||
a taxpayer that is required to make an addition | ||
modification with respect to such transaction under | ||
Section 203(a)(2)(D-17), 203(b)(2)(E-12), | ||
203(c)(2)(G-12), or 203(d)(2)(D-7), but not to exceed | ||
the amount of such addition modification,
(ii) any | ||
income from intangible property (net of the deductions | ||
allocable thereto) taken into account for the taxable | ||
year with respect to a transaction with a taxpayer that | ||
is required to make an addition modification with | ||
respect to such transaction under Section | ||
203(a)(2)(D-18), 203(b)(2)(E-13), 203(c)(2)(G-13), or | ||
203(d)(2)(D-8), but not to exceed the amount of such | ||
addition modification, and (iii) any insurance premium | ||
income (net of deductions allocable thereto) taken | ||
into account for the taxable year with respect to a | ||
transaction with a taxpayer that is required to make an | ||
addition modification with respect to such transaction | ||
under Section 203(a)(2)(D-19), Section | ||
203(b)(2)(E-14), Section 203(c)(2)(G-14), or Section | ||
203(d)(2)(D-9), but not to exceed the amount of that | ||
addition modification. This subparagraph (V) is exempt | ||
from the provisions of Section 250;
| ||
(W) An amount equal to the interest income taken | ||
into account for the taxable year (net of the | ||
deductions allocable thereto) with respect to | ||
transactions with (i) a foreign person who would be a | ||
member of the taxpayer's unitary business group but for | ||
the fact that the foreign person's business activity | ||
outside the United States is 80% or more of that | ||
person's total business activity and (ii) for taxable | ||
years ending on or after December 31, 2008, to a person | ||
who would be a member of the same unitary business | ||
group but for the fact that the person is prohibited | ||
under Section 1501(a)(27) from being included in the | ||
unitary business group because he or she is ordinarily | ||
required to apportion business income under different | ||
subsections of Section 304, but not to exceed the | ||
addition modification required to be made for the same | ||
taxable year under Section 203(b)(2)(E-12) for | ||
interest paid, accrued, or incurred, directly or | ||
indirectly, to the same person. This subparagraph (W) | ||
is exempt from the provisions of Section 250;
| ||
(X) An amount equal to the income from intangible | ||
property taken into account for the taxable year (net | ||
of the deductions allocable thereto) with respect to | ||
transactions with (i) a foreign person who would be a | ||
member of the taxpayer's unitary business group but for | ||
the fact that the foreign person's business activity | ||
outside the United States is 80% or more of that | ||
person's total business activity and (ii) for taxable | ||
years ending on or after December 31, 2008, to a person | ||
who would be a member of the same unitary business | ||
group but for the fact that the person is prohibited | ||
under Section 1501(a)(27) from being included in the | ||
unitary business group because he or she is ordinarily | ||
required to apportion business income under different | ||
subsections of Section 304, but not to exceed the | ||
addition modification required to be made for the same | ||
taxable year under Section 203(b)(2)(E-13) for | ||
intangible expenses and costs paid, accrued, or | ||
incurred, directly or indirectly, to the same foreign | ||
person. This subparagraph (X) is exempt from the | ||
provisions of Section 250;
| ||
(Y) For taxable years ending on or after December | ||
31, 2011, in the case of a taxpayer who was required to | ||
add back any insurance premiums under Section | ||
203(b)(2)(E-14), such taxpayer may elect to subtract | ||
that part of a reimbursement received from the | ||
insurance company equal to the amount of the expense or | ||
loss (including expenses incurred by the insurance | ||
company) that would have been taken into account as a | ||
deduction for federal income tax purposes if the | ||
expense or loss had been uninsured. If a taxpayer makes | ||
the election provided for by this subparagraph (Y), the | ||
insurer to which the premiums were paid must add back | ||
to income the amount subtracted by the taxpayer | ||
pursuant to this subparagraph (Y). This subparagraph | ||
(Y) is exempt from the provisions of Section 250; and | ||
(Z) The difference between the nondeductible | ||
controlled foreign corporation dividends under Section | ||
965(e)(3) of the Internal Revenue Code over the taxable | ||
income of the taxpayer, computed without regard to | ||
Section 965(e)(2)(A) of the Internal Revenue Code, and | ||
without regard to any net operating loss deduction. | ||
This subparagraph (Z) is exempt from the provisions of | ||
Section 250. | ||
(3) Special rule. For purposes of paragraph (2)(A), | ||
"gross income"
in the case of a life insurance company, for | ||
tax years ending on and after
December 31, 1994,
and prior | ||
to December 31, 2011, shall mean the gross investment | ||
income for the taxable year and, for tax years ending on or | ||
after December 31, 2011, shall mean all amounts included in | ||
life insurance gross income under Section 803(a)(3) of the | ||
Internal Revenue Code. | ||
(c) Trusts and estates. | ||
(1) In general. In the case of a trust or estate, base | ||
income means
an amount equal to the taxpayer's taxable | ||
income for the taxable year as
modified by paragraph (2). | ||
(2) Modifications. Subject to the provisions of | ||
paragraph (3), the
taxable income referred to in paragraph | ||
(1) shall be modified by adding
thereto the sum of the | ||
following amounts: | ||
(A) An amount equal to all amounts paid or accrued | ||
to the taxpayer
as interest or dividends during the | ||
taxable year to the extent excluded
from gross income | ||
in the computation of taxable income; | ||
(B) In the case of (i) an estate, $600; (ii) a | ||
trust which, under
its governing instrument, is | ||
required to distribute all of its income
currently, | ||
$300; and (iii) any other trust, $100, but in each such | ||
case,
only to the extent such amount was deducted in | ||
the computation of
taxable income; | ||
(C) An amount equal to the amount of tax imposed by | ||
this Act to the
extent deducted from gross income in | ||
the computation of taxable income
for the taxable year; | ||
(D) The amount of any net operating loss deduction | ||
taken in arriving at
taxable income, other than a net | ||
operating loss carried forward from a
taxable year | ||
ending prior to December 31, 1986; | ||
(E) For taxable years in which a net operating loss | ||
carryback or
carryforward from a taxable year ending | ||
prior to December 31, 1986 is an
element of taxable | ||
income under paragraph (1) of subsection (e) or | ||
subparagraph
(E) of paragraph (2) of subsection (e), | ||
the amount by which addition
modifications other than | ||
those provided by this subparagraph (E) exceeded
| ||
subtraction modifications in such taxable year, with | ||
the following limitations
applied in the order that | ||
they are listed: | ||
(i) the addition modification relating to the | ||
net operating loss
carried back or forward to the | ||
taxable year from any taxable year ending
prior to | ||
December 31, 1986 shall be reduced by the amount of | ||
addition
modification under this subparagraph (E) | ||
which related to that net
operating loss and which | ||
was taken into account in calculating the base
| ||
income of an earlier taxable year, and | ||
(ii) the addition modification relating to the | ||
net operating loss
carried back or forward to the | ||
taxable year from any taxable year ending
prior to | ||
December 31, 1986 shall not exceed the amount of | ||
such carryback or
carryforward; | ||
For taxable years in which there is a net operating | ||
loss carryback or
carryforward from more than one other | ||
taxable year ending prior to December
31, 1986, the | ||
addition modification provided in this subparagraph | ||
(E) shall
be the sum of the amounts computed | ||
independently under the preceding
provisions of this | ||
subparagraph (E) for each such taxable year; | ||
(F) For taxable years ending on or after January 1, | ||
1989, an amount
equal to the tax deducted pursuant to | ||
Section 164 of the Internal Revenue
Code if the trust | ||
or estate is claiming the same tax for purposes of the
| ||
Illinois foreign tax credit under Section 601 of this | ||
Act; | ||
(G) An amount equal to the amount of the capital | ||
gain deduction
allowable under the Internal Revenue | ||
Code, to the extent deducted from
gross income in the | ||
computation of taxable income; | ||
(G-5) For taxable years ending after December 31, | ||
1997, an
amount equal to any eligible remediation costs | ||
that the trust or estate
deducted in computing adjusted | ||
gross income and for which the trust
or estate claims a | ||
credit under subsection (l) of Section 201; | ||
(G-10) For taxable years 2001 and thereafter, an | ||
amount equal to the
bonus depreciation deduction taken | ||
on the taxpayer's federal income tax return for the | ||
taxable
year under subsection (k) of Section 168 of the | ||
Internal Revenue Code; and | ||
(G-11) If the taxpayer sells, transfers, abandons, | ||
or otherwise disposes of property for which the | ||
taxpayer was required in any taxable year to
make an | ||
addition modification under subparagraph (G-10), then | ||
an amount equal
to the aggregate amount of the | ||
deductions taken in all taxable
years under | ||
subparagraph (R) with respect to that property. | ||
If the taxpayer continues to own property through | ||
the last day of the last tax year for which the | ||
taxpayer may claim a depreciation deduction for | ||
federal income tax purposes and for which the taxpayer | ||
was allowed in any taxable year to make a subtraction | ||
modification under subparagraph (R), then an amount | ||
equal to that subtraction modification.
| ||
The taxpayer is required to make the addition | ||
modification under this
subparagraph
only once with | ||
respect to any one piece of property; | ||
(G-12) An amount equal to the amount otherwise | ||
allowed as a deduction in computing base income for | ||
interest paid, accrued, or incurred, directly or | ||
indirectly, (i) for taxable years ending on or after | ||
December 31, 2004, to a foreign person who would be a | ||
member of the same unitary business group but for the | ||
fact that the foreign person's business activity | ||
outside the United States is 80% or more of the foreign | ||
person's total business activity and (ii) for taxable | ||
years ending on or after December 31, 2008, to a person | ||
who would be a member of the same unitary business | ||
group but for the fact that the person is prohibited | ||
under Section 1501(a)(27) from being included in the | ||
unitary business group because he or she is ordinarily | ||
required to apportion business income under different | ||
subsections of Section 304. The addition modification | ||
required by this subparagraph shall be reduced to the | ||
extent that dividends were included in base income of | ||
the unitary group for the same taxable year and | ||
received by the taxpayer or by a member of the | ||
taxpayer's unitary business group (including amounts | ||
included in gross income pursuant to Sections 951 | ||
through 964 of the Internal Revenue Code and amounts | ||
included in gross income under Section 78 of the | ||
Internal Revenue Code) with respect to the stock of the | ||
same person to whom the interest was paid, accrued, or | ||
incurred.
| ||
This paragraph shall not apply to the following:
| ||
(i) an item of interest paid, accrued, or | ||
incurred, directly or indirectly, to a person who | ||
is subject in a foreign country or state, other | ||
than a state which requires mandatory unitary | ||
reporting, to a tax on or measured by net income | ||
with respect to such interest; or | ||
(ii) an item of interest paid, accrued, or | ||
incurred, directly or indirectly, to a person if | ||
the taxpayer can establish, based on a | ||
preponderance of the evidence, both of the | ||
following: | ||
(a) the person, during the same taxable | ||
year, paid, accrued, or incurred, the interest | ||
to a person that is not a related member, and | ||
(b) the transaction giving rise to the | ||
interest expense between the taxpayer and the | ||
person did not have as a principal purpose the | ||
avoidance of Illinois income tax, and is paid | ||
pursuant to a contract or agreement that | ||
reflects an arm's-length interest rate and | ||
terms; or
| ||
(iii) the taxpayer can establish, based on | ||
clear and convincing evidence, that the interest | ||
paid, accrued, or incurred relates to a contract or | ||
agreement entered into at arm's-length rates and | ||
terms and the principal purpose for the payment is | ||
not federal or Illinois tax avoidance; or
| ||
(iv) an item of interest paid, accrued, or | ||
incurred, directly or indirectly, to a person if | ||
the taxpayer establishes by clear and convincing | ||
evidence that the adjustments are unreasonable; or | ||
if the taxpayer and the Director agree in writing | ||
to the application or use of an alternative method | ||
of apportionment under Section 304(f).
| ||
Nothing in this subsection shall preclude the | ||
Director from making any other adjustment | ||
otherwise allowed under Section 404 of this Act for | ||
any tax year beginning after the effective date of | ||
this amendment provided such adjustment is made | ||
pursuant to regulation adopted by the Department | ||
and such regulations provide methods and standards | ||
by which the Department will utilize its authority | ||
under Section 404 of this Act;
| ||
(G-13) An amount equal to the amount of intangible | ||
expenses and costs otherwise allowed as a deduction in | ||
computing base income, and that were paid, accrued, or | ||
incurred, directly or indirectly, (i) for taxable | ||
years ending on or after December 31, 2004, to a | ||
foreign person who would be a member of the same | ||
unitary business group but for the fact that the | ||
foreign person's business activity outside the United | ||
States is 80% or more of that person's total business | ||
activity and (ii) for taxable years ending on or after | ||
December 31, 2008, to a person who would be a member of | ||
the same unitary business group but for the fact that | ||
the person is prohibited under Section 1501(a)(27) | ||
from being included in the unitary business group | ||
because he or she is ordinarily required to apportion | ||
business income under different subsections of Section | ||
304. The addition modification required by this | ||
subparagraph shall be reduced to the extent that | ||
dividends were included in base income of the unitary | ||
group for the same taxable year and received by the | ||
taxpayer or by a member of the taxpayer's unitary | ||
business group (including amounts included in gross | ||
income pursuant to Sections 951 through 964 of the | ||
Internal Revenue Code and amounts included in gross | ||
income under Section 78 of the Internal Revenue Code) | ||
with respect to the stock of the same person to whom | ||
the intangible expenses and costs were directly or | ||
indirectly paid, incurred, or accrued. The preceding | ||
sentence shall not apply to the extent that the same | ||
dividends caused a reduction to the addition | ||
modification required under Section 203(c)(2)(G-12) of | ||
this Act. As used in this subparagraph, the term | ||
"intangible expenses and costs" includes: (1) | ||
expenses, losses, and costs for or related to the | ||
direct or indirect acquisition, use, maintenance or | ||
management, ownership, sale, exchange, or any other | ||
disposition of intangible property; (2) losses | ||
incurred, directly or indirectly, from factoring | ||
transactions or discounting transactions; (3) royalty, | ||
patent, technical, and copyright fees; (4) licensing | ||
fees; and (5) other similar expenses and costs. For | ||
purposes of this subparagraph, "intangible property" | ||
includes patents, patent applications, trade names, | ||
trademarks, service marks, copyrights, mask works, | ||
trade secrets, and similar types of intangible assets. | ||
This paragraph shall not apply to the following: | ||
(i) any item of intangible expenses or costs | ||
paid, accrued, or incurred, directly or | ||
indirectly, from a transaction with a person who is | ||
subject in a foreign country or state, other than a | ||
state which requires mandatory unitary reporting, | ||
to a tax on or measured by net income with respect | ||
to such item; or | ||
(ii) any item of intangible expense or cost | ||
paid, accrued, or incurred, directly or | ||
indirectly, if the taxpayer can establish, based | ||
on a preponderance of the evidence, both of the | ||
following: | ||
(a) the person during the same taxable | ||
year paid, accrued, or incurred, the | ||
intangible expense or cost to a person that is | ||
not a related member, and | ||
(b) the transaction giving rise to the | ||
intangible expense or cost between the | ||
taxpayer and the person did not have as a | ||
principal purpose the avoidance of Illinois | ||
income tax, and is paid pursuant to a contract | ||
or agreement that reflects arm's-length terms; | ||
or | ||
(iii) any item of intangible expense or cost | ||
paid, accrued, or incurred, directly or | ||
indirectly, from a transaction with a person if the | ||
taxpayer establishes by clear and convincing | ||
evidence, that the adjustments are unreasonable; | ||
or if the taxpayer and the Director agree in | ||
writing to the application or use of an alternative | ||
method of apportionment under Section 304(f);
| ||
Nothing in this subsection shall preclude the | ||
Director from making any other adjustment | ||
otherwise allowed under Section 404 of this Act for | ||
any tax year beginning after the effective date of | ||
this amendment provided such adjustment is made | ||
pursuant to regulation adopted by the Department | ||
and such regulations provide methods and standards | ||
by which the Department will utilize its authority | ||
under Section 404 of this Act;
| ||
(G-14) For taxable years ending on or after | ||
December 31, 2008, an amount equal to the amount of | ||
insurance premium expenses and costs otherwise allowed | ||
as a deduction in computing base income, and that were | ||
paid, accrued, or incurred, directly or indirectly, to | ||
a person who would be a member of the same unitary | ||
business group but for the fact that the person is | ||
prohibited under Section 1501(a)(27) from being | ||
included in the unitary business group because he or | ||
she is ordinarily required to apportion business | ||
income under different subsections of Section 304. The | ||
addition modification required by this subparagraph | ||
shall be reduced to the extent that dividends were | ||
included in base income of the unitary group for the | ||
same taxable year and received by the taxpayer or by a | ||
member of the taxpayer's unitary business group | ||
(including amounts included in gross income under | ||
Sections 951 through 964 of the Internal Revenue Code | ||
and amounts included in gross income under Section 78 | ||
of the Internal Revenue Code) with respect to the stock | ||
of the same person to whom the premiums and costs were | ||
directly or indirectly paid, incurred, or accrued. The | ||
preceding sentence does not apply to the extent that | ||
the same dividends caused a reduction to the addition | ||
modification required under Section 203(c)(2)(G-12) or | ||
Section 203(c)(2)(G-13) of this Act; | ||
(G-15) An amount equal to the credit allowable to | ||
the taxpayer under Section 218(a) of this Act, | ||
determined without regard to Section 218(c) of this | ||
Act; | ||
(G-16) For taxable years ending on or after | ||
December 31, 2017, an amount equal to the deduction | ||
allowed under Section 199 of the Internal Revenue Code | ||
for the taxable year; | ||
and by deducting from the total so obtained the sum of the | ||
following
amounts: | ||
(H) An amount equal to all amounts included in such | ||
total pursuant
to the provisions of Sections 402(a), | ||
402(c), 403(a), 403(b), 406(a), 407(a)
and 408 of the | ||
Internal Revenue Code or included in such total as
| ||
distributions under the provisions of any retirement | ||
or disability plan for
employees of any governmental | ||
agency or unit, or retirement payments to
retired | ||
partners, which payments are excluded in computing net | ||
earnings
from self employment by Section 1402 of the | ||
Internal Revenue Code and
regulations adopted pursuant | ||
thereto; | ||
(I) The valuation limitation amount; | ||
(J) An amount equal to the amount of any tax | ||
imposed by this Act
which was refunded to the taxpayer | ||
and included in such total for the
taxable year; | ||
(K) An amount equal to all amounts included in | ||
taxable income as
modified by subparagraphs (A), (B), | ||
(C), (D), (E), (F) and (G) which
are exempt from | ||
taxation by this State either by reason of its statutes | ||
or
Constitution
or by reason of the Constitution, | ||
treaties or statutes of the United States;
provided | ||
that, in the case of any statute of this State that | ||
exempts income
derived from bonds or other obligations | ||
from the tax imposed under this Act,
the amount | ||
exempted shall be the interest net of bond premium | ||
amortization; | ||
(L) With the exception of any amounts subtracted | ||
under subparagraph
(K),
an amount equal to the sum of | ||
all amounts disallowed as
deductions by (i) Sections | ||
171(a)(2) and 265(a)(2) of the Internal Revenue
Code, | ||
and all amounts of expenses allocable
to interest and | ||
disallowed as deductions by Section 265(a)(1) 265(1) | ||
of the Internal
Revenue Code;
and (ii) for taxable | ||
years
ending on or after August 13, 1999, Sections
| ||
171(a)(2), 265,
280C, and 832(b)(5)(B)(i) of the | ||
Internal Revenue Code, plus, (iii) for taxable years | ||
ending on or after December 31, 2011, Section 45G(e)(3) | ||
of the Internal Revenue Code and, for taxable years | ||
ending on or after December 31, 2008, any amount | ||
included in gross income under Section 87 of the | ||
Internal Revenue Code; the provisions of this
| ||
subparagraph are exempt from the provisions of Section | ||
250; | ||
(M) An amount equal to those dividends included in | ||
such total
which were paid by a corporation which | ||
conducts business operations in a River Edge | ||
Redevelopment Zone or zones created under the River | ||
Edge Redevelopment Zone Act and
conducts substantially | ||
all of its operations in a River Edge Redevelopment | ||
Zone or zones. This subparagraph (M) is exempt from the | ||
provisions of Section 250; | ||
(N) An amount equal to any contribution made to a | ||
job training
project established pursuant to the Tax | ||
Increment Allocation
Redevelopment Act; | ||
(O) An amount equal to those dividends included in | ||
such total
that were paid by a corporation that | ||
conducts business operations in a
federally designated | ||
Foreign Trade Zone or Sub-Zone and that is designated
a | ||
High Impact Business located in Illinois; provided | ||
that dividends eligible
for the deduction provided in | ||
subparagraph (M) of paragraph (2) of this
subsection | ||
shall not be eligible for the deduction provided under | ||
this
subparagraph (O); | ||
(P) An amount equal to the amount of the deduction | ||
used to compute the
federal income tax credit for | ||
restoration of substantial amounts held under
claim of | ||
right for the taxable year pursuant to Section 1341 of | ||
the
Internal Revenue Code; | ||
(Q) For taxable year 1999 and thereafter, an amount | ||
equal to the
amount of any
(i) distributions, to the | ||
extent includible in gross income for
federal income | ||
tax purposes, made to the taxpayer because of
his or | ||
her status as a victim of
persecution for racial or | ||
religious reasons by Nazi Germany or any other Axis
| ||
regime or as an heir of the victim and (ii) items
of | ||
income, to the extent
includible in gross income for | ||
federal income tax purposes, attributable to,
derived | ||
from or in any way related to assets stolen from, | ||
hidden from, or
otherwise lost to a victim of
| ||
persecution for racial or religious reasons by Nazi
| ||
Germany or any other Axis regime
immediately prior to, | ||
during, and immediately after World War II, including,
| ||
but
not limited to, interest on the proceeds receivable | ||
as insurance
under policies issued to a victim of | ||
persecution for racial or religious
reasons by Nazi | ||
Germany or any other Axis regime by European insurance
| ||
companies
immediately prior to and during World War II;
| ||
provided, however, this subtraction from federal | ||
adjusted gross income does not
apply to assets acquired | ||
with such assets or with the proceeds from the sale of
| ||
such assets; provided, further, this paragraph shall | ||
only apply to a taxpayer
who was the first recipient of | ||
such assets after their recovery and who is a
victim of
| ||
persecution for racial or religious reasons
by Nazi | ||
Germany or any other Axis regime or as an heir of the | ||
victim. The
amount of and the eligibility for any | ||
public assistance, benefit, or
similar entitlement is | ||
not affected by the inclusion of items (i) and (ii) of
| ||
this paragraph in gross income for federal income tax | ||
purposes.
This paragraph is exempt from the provisions | ||
of Section 250; | ||
(R) For taxable years 2001 and thereafter, for the | ||
taxable year in
which the bonus depreciation deduction
| ||
is taken on the taxpayer's federal income tax return | ||
under
subsection (k) of Section 168 of the Internal | ||
Revenue Code and for each
applicable taxable year | ||
thereafter, an amount equal to "x", where: | ||
(1) "y" equals the amount of the depreciation | ||
deduction taken for the
taxable year
on the | ||
taxpayer's federal income tax return on property | ||
for which the bonus
depreciation deduction
was | ||
taken in any year under subsection (k) of Section | ||
168 of the Internal
Revenue Code, but not including | ||
the bonus depreciation deduction; | ||
(2) for taxable years ending on or before | ||
December 31, 2005, "x" equals "y" multiplied by 30 | ||
and then divided by 70 (or "y"
multiplied by | ||
0.429); and | ||
(3) for taxable years ending after December | ||
31, 2005: | ||
(i) for property on which a bonus | ||
depreciation deduction of 30% of the adjusted | ||
basis was taken, "x" equals "y" multiplied by | ||
30 and then divided by 70 (or "y"
multiplied by | ||
0.429); and | ||
(ii) for property on which a bonus | ||
depreciation deduction of 50% of the adjusted | ||
basis was taken, "x" equals "y" multiplied by | ||
1.0. | ||
The aggregate amount deducted under this | ||
subparagraph in all taxable
years for any one piece of | ||
property may not exceed the amount of the bonus
| ||
depreciation deduction
taken on that property on the | ||
taxpayer's federal income tax return under
subsection | ||
(k) of Section 168 of the Internal Revenue Code. This | ||
subparagraph (R) is exempt from the provisions of | ||
Section 250; | ||
(S) If the taxpayer sells, transfers, abandons, or | ||
otherwise disposes of
property for which the taxpayer | ||
was required in any taxable year to make an
addition | ||
modification under subparagraph (G-10), then an amount | ||
equal to that
addition modification. | ||
If the taxpayer continues to own property through | ||
the last day of the last tax year for which the | ||
taxpayer may claim a depreciation deduction for | ||
federal income tax purposes and for which the taxpayer | ||
was required in any taxable year to make an addition | ||
modification under subparagraph (G-10), then an amount | ||
equal to that addition modification.
| ||
The taxpayer is allowed to take the deduction under | ||
this subparagraph
only once with respect to any one | ||
piece of property. | ||
This subparagraph (S) is exempt from the | ||
provisions of Section 250; | ||
(T) The amount of (i) any interest income (net of | ||
the deductions allocable thereto) taken into account | ||
for the taxable year with respect to a transaction with | ||
a taxpayer that is required to make an addition | ||
modification with respect to such transaction under | ||
Section 203(a)(2)(D-17), 203(b)(2)(E-12), | ||
203(c)(2)(G-12), or 203(d)(2)(D-7), but not to exceed | ||
the amount of such addition modification and
(ii) any | ||
income from intangible property (net of the deductions | ||
allocable thereto) taken into account for the taxable | ||
year with respect to a transaction with a taxpayer that | ||
is required to make an addition modification with | ||
respect to such transaction under Section | ||
203(a)(2)(D-18), 203(b)(2)(E-13), 203(c)(2)(G-13), or | ||
203(d)(2)(D-8), but not to exceed the amount of such | ||
addition modification. This subparagraph (T) is exempt | ||
from the provisions of Section 250;
| ||
(U) An amount equal to the interest income taken | ||
into account for the taxable year (net of the | ||
deductions allocable thereto) with respect to | ||
transactions with (i) a foreign person who would be a | ||
member of the taxpayer's unitary business group but for | ||
the fact the foreign person's business activity | ||
outside the United States is 80% or more of that | ||
person's total business activity and (ii) for taxable | ||
years ending on or after December 31, 2008, to a person | ||
who would be a member of the same unitary business | ||
group but for the fact that the person is prohibited | ||
under Section 1501(a)(27) from being included in the | ||
unitary business group because he or she is ordinarily | ||
required to apportion business income under different | ||
subsections of Section 304, but not to exceed the | ||
addition modification required to be made for the same | ||
taxable year under Section 203(c)(2)(G-12) for | ||
interest paid, accrued, or incurred, directly or | ||
indirectly, to the same person. This subparagraph (U) | ||
is exempt from the provisions of Section 250; | ||
(V) An amount equal to the income from intangible | ||
property taken into account for the taxable year (net | ||
of the deductions allocable thereto) with respect to | ||
transactions with (i) a foreign person who would be a | ||
member of the taxpayer's unitary business group but for | ||
the fact that the foreign person's business activity | ||
outside the United States is 80% or more of that | ||
person's total business activity and (ii) for taxable | ||
years ending on or after December 31, 2008, to a person | ||
who would be a member of the same unitary business | ||
group but for the fact that the person is prohibited | ||
under Section 1501(a)(27) from being included in the | ||
unitary business group because he or she is ordinarily | ||
required to apportion business income under different | ||
subsections of Section 304, but not to exceed the | ||
addition modification required to be made for the same | ||
taxable year under Section 203(c)(2)(G-13) for | ||
intangible expenses and costs paid, accrued, or | ||
incurred, directly or indirectly, to the same foreign | ||
person. This subparagraph (V) is exempt from the | ||
provisions of Section 250;
| ||
(W) in the case of an estate, an amount equal to | ||
all amounts included in such total pursuant to the | ||
provisions of Section 111 of the Internal Revenue Code | ||
as a recovery of items previously deducted by the | ||
decedent from adjusted gross income in the computation | ||
of taxable income. This subparagraph (W) is exempt from | ||
Section 250; | ||
(X) an amount equal to the refund included in such | ||
total of any tax deducted for federal income tax | ||
purposes, to the extent that deduction was added back | ||
under subparagraph (F). This subparagraph (X) is | ||
exempt from the provisions of Section 250; and | ||
(Y) For taxable years ending on or after December | ||
31, 2011, in the case of a taxpayer who was required to | ||
add back any insurance premiums under Section | ||
203(c)(2)(G-14), such taxpayer may elect to subtract | ||
that part of a reimbursement received from the | ||
insurance company equal to the amount of the expense or | ||
loss (including expenses incurred by the insurance | ||
company) that would have been taken into account as a | ||
deduction for federal income tax purposes if the | ||
expense or loss had been uninsured. If a taxpayer makes | ||
the election provided for by this subparagraph (Y), the | ||
insurer to which the premiums were paid must add back | ||
to income the amount subtracted by the taxpayer | ||
pursuant to this subparagraph (Y). This subparagraph | ||
(Y) is exempt from the provisions of Section 250; and . | ||
(Z) For taxable years beginning after December 31, | ||
2018 and before January 1, 2026, the amount of excess | ||
business loss of the taxpayer disallowed as a deduction | ||
by Section 461(l)(1)(B) of the Internal Revenue Code. | ||
(3) Limitation. The amount of any modification | ||
otherwise required
under this subsection shall, under | ||
regulations prescribed by the
Department, be adjusted by | ||
any amounts included therein which were
properly paid, | ||
credited, or required to be distributed, or permanently set
| ||
aside for charitable purposes pursuant to Internal Revenue | ||
Code Section
642(c) during the taxable year. | ||
(d) Partnerships. | ||
(1) In general. In the case of a partnership, base | ||
income means an
amount equal to the taxpayer's taxable | ||
income for the taxable year as
modified by paragraph (2). | ||
(2) Modifications. The taxable income referred to in | ||
paragraph (1)
shall be modified by adding thereto the sum | ||
of the following amounts: | ||
(A) An amount equal to all amounts paid or accrued | ||
to the taxpayer as
interest or dividends during the | ||
taxable year to the extent excluded from
gross income | ||
in the computation of taxable income; | ||
(B) An amount equal to the amount of tax imposed by | ||
this Act to the
extent deducted from gross income for | ||
the taxable year; | ||
(C) The amount of deductions allowed to the | ||
partnership pursuant to
Section 707 (c) of the Internal | ||
Revenue Code in calculating its taxable income; | ||
(D) An amount equal to the amount of the capital | ||
gain deduction
allowable under the Internal Revenue | ||
Code, to the extent deducted from
gross income in the | ||
computation of taxable income; | ||
(D-5) For taxable years 2001 and thereafter, an | ||
amount equal to the
bonus depreciation deduction taken | ||
on the taxpayer's federal income tax return for the | ||
taxable
year under subsection (k) of Section 168 of the | ||
Internal Revenue Code; | ||
(D-6) If the taxpayer sells, transfers, abandons, | ||
or otherwise disposes of
property for which the | ||
taxpayer was required in any taxable year to make an
| ||
addition modification under subparagraph (D-5), then | ||
an amount equal to the
aggregate amount of the | ||
deductions taken in all taxable years
under | ||
subparagraph (O) with respect to that property. | ||
If the taxpayer continues to own property through | ||
the last day of the last tax year for which the | ||
taxpayer may claim a depreciation deduction for | ||
federal income tax purposes and for which the taxpayer | ||
was allowed in any taxable year to make a subtraction | ||
modification under subparagraph (O), then an amount | ||
equal to that subtraction modification.
| ||
The taxpayer is required to make the addition | ||
modification under this
subparagraph
only once with | ||
respect to any one piece of property; | ||
(D-7) An amount equal to the amount otherwise | ||
allowed as a deduction in computing base income for | ||
interest paid, accrued, or incurred, directly or | ||
indirectly, (i) for taxable years ending on or after | ||
December 31, 2004, to a foreign person who would be a | ||
member of the same unitary business group but for the | ||
fact the foreign person's business activity outside | ||
the United States is 80% or more of the foreign | ||
person's total business activity and (ii) for taxable | ||
years ending on or after December 31, 2008, to a person | ||
who would be a member of the same unitary business | ||
group but for the fact that the person is prohibited | ||
under Section 1501(a)(27) from being included in the | ||
unitary business group because he or she is ordinarily | ||
required to apportion business income under different | ||
subsections of Section 304. The addition modification | ||
required by this subparagraph shall be reduced to the | ||
extent that dividends were included in base income of | ||
the unitary group for the same taxable year and | ||
received by the taxpayer or by a member of the | ||
taxpayer's unitary business group (including amounts | ||
included in gross income pursuant to Sections 951 | ||
through 964 of the Internal Revenue Code and amounts | ||
included in gross income under Section 78 of the | ||
Internal Revenue Code) with respect to the stock of the | ||
same person to whom the interest was paid, accrued, or | ||
incurred.
| ||
This paragraph shall not apply to the following:
| ||
(i) an item of interest paid, accrued, or | ||
incurred, directly or indirectly, to a person who | ||
is subject in a foreign country or state, other | ||
than a state which requires mandatory unitary | ||
reporting, to a tax on or measured by net income | ||
with respect to such interest; or | ||
(ii) an item of interest paid, accrued, or | ||
incurred, directly or indirectly, to a person if | ||
the taxpayer can establish, based on a | ||
preponderance of the evidence, both of the | ||
following: | ||
(a) the person, during the same taxable | ||
year, paid, accrued, or incurred, the interest | ||
to a person that is not a related member, and | ||
(b) the transaction giving rise to the | ||
interest expense between the taxpayer and the | ||
person did not have as a principal purpose the | ||
avoidance of Illinois income tax, and is paid | ||
pursuant to a contract or agreement that | ||
reflects an arm's-length interest rate and | ||
terms; or
| ||
(iii) the taxpayer can establish, based on | ||
clear and convincing evidence, that the interest | ||
paid, accrued, or incurred relates to a contract or | ||
agreement entered into at arm's-length rates and | ||
terms and the principal purpose for the payment is | ||
not federal or Illinois tax avoidance; or
| ||
(iv) an item of interest paid, accrued, or | ||
incurred, directly or indirectly, to a person if | ||
the taxpayer establishes by clear and convincing | ||
evidence that the adjustments are unreasonable; or | ||
if the taxpayer and the Director agree in writing | ||
to the application or use of an alternative method | ||
of apportionment under Section 304(f).
| ||
Nothing in this subsection shall preclude the | ||
Director from making any other adjustment | ||
otherwise allowed under Section 404 of this Act for | ||
any tax year beginning after the effective date of | ||
this amendment provided such adjustment is made | ||
pursuant to regulation adopted by the Department | ||
and such regulations provide methods and standards | ||
by which the Department will utilize its authority | ||
under Section 404 of this Act; and
| ||
(D-8) An amount equal to the amount of intangible | ||
expenses and costs otherwise allowed as a deduction in | ||
computing base income, and that were paid, accrued, or | ||
incurred, directly or indirectly, (i) for taxable | ||
years ending on or after December 31, 2004, to a | ||
foreign person who would be a member of the same | ||
unitary business group but for the fact that the | ||
foreign person's business activity outside the United | ||
States is 80% or more of that person's total business | ||
activity and (ii) for taxable years ending on or after | ||
December 31, 2008, to a person who would be a member of | ||
the same unitary business group but for the fact that | ||
the person is prohibited under Section 1501(a)(27) | ||
from being included in the unitary business group | ||
because he or she is ordinarily required to apportion | ||
business income under different subsections of Section | ||
304. The addition modification required by this | ||
subparagraph shall be reduced to the extent that | ||
dividends were included in base income of the unitary | ||
group for the same taxable year and received by the | ||
taxpayer or by a member of the taxpayer's unitary | ||
business group (including amounts included in gross | ||
income pursuant to Sections 951 through 964 of the | ||
Internal Revenue Code and amounts included in gross | ||
income under Section 78 of the Internal Revenue Code) | ||
with respect to the stock of the same person to whom | ||
the intangible expenses and costs were directly or | ||
indirectly paid, incurred or accrued. The preceding | ||
sentence shall not apply to the extent that the same | ||
dividends caused a reduction to the addition | ||
modification required under Section 203(d)(2)(D-7) of | ||
this Act. As used in this subparagraph, the term | ||
"intangible expenses and costs" includes (1) expenses, | ||
losses, and costs for, or related to, the direct or | ||
indirect acquisition, use, maintenance or management, | ||
ownership, sale, exchange, or any other disposition of | ||
intangible property; (2) losses incurred, directly or | ||
indirectly, from factoring transactions or discounting | ||
transactions; (3) royalty, patent, technical, and | ||
copyright fees; (4) licensing fees; and (5) other | ||
similar expenses and costs. For purposes of this | ||
subparagraph, "intangible property" includes patents, | ||
patent applications, trade names, trademarks, service | ||
marks, copyrights, mask works, trade secrets, and | ||
similar types of intangible assets; | ||
This paragraph shall not apply to the following: | ||
(i) any item of intangible expenses or costs | ||
paid, accrued, or incurred, directly or | ||
indirectly, from a transaction with a person who is | ||
subject in a foreign country or state, other than a | ||
state which requires mandatory unitary reporting, | ||
to a tax on or measured by net income with respect | ||
to such item; or | ||
(ii) any item of intangible expense or cost | ||
paid, accrued, or incurred, directly or | ||
indirectly, if the taxpayer can establish, based | ||
on a preponderance of the evidence, both of the | ||
following: | ||
(a) the person during the same taxable | ||
year paid, accrued, or incurred, the | ||
intangible expense or cost to a person that is | ||
not a related member, and | ||
(b) the transaction giving rise to the | ||
intangible expense or cost between the | ||
taxpayer and the person did not have as a | ||
principal purpose the avoidance of Illinois | ||
income tax, and is paid pursuant to a contract | ||
or agreement that reflects arm's-length terms; | ||
or | ||
(iii) any item of intangible expense or cost | ||
paid, accrued, or incurred, directly or | ||
indirectly, from a transaction with a person if the | ||
taxpayer establishes by clear and convincing | ||
evidence, that the adjustments are unreasonable; | ||
or if the taxpayer and the Director agree in | ||
writing to the application or use of an alternative | ||
method of apportionment under Section 304(f);
| ||
Nothing in this subsection shall preclude the | ||
Director from making any other adjustment | ||
otherwise allowed under Section 404 of this Act for | ||
any tax year beginning after the effective date of | ||
this amendment provided such adjustment is made | ||
pursuant to regulation adopted by the Department | ||
and such regulations provide methods and standards | ||
by which the Department will utilize its authority | ||
under Section 404 of this Act;
| ||
(D-9) For taxable years ending on or after December | ||
31, 2008, an amount equal to the amount of insurance | ||
premium expenses and costs otherwise allowed as a | ||
deduction in computing base income, and that were paid, | ||
accrued, or incurred, directly or indirectly, to a | ||
person who would be a member of the same unitary | ||
business group but for the fact that the person is | ||
prohibited under Section 1501(a)(27) from being | ||
included in the unitary business group because he or | ||
she is ordinarily required to apportion business | ||
income under different subsections of Section 304. The | ||
addition modification required by this subparagraph | ||
shall be reduced to the extent that dividends were | ||
included in base income of the unitary group for the | ||
same taxable year and received by the taxpayer or by a | ||
member of the taxpayer's unitary business group | ||
(including amounts included in gross income under | ||
Sections 951 through 964 of the Internal Revenue Code | ||
and amounts included in gross income under Section 78 | ||
of the Internal Revenue Code) with respect to the stock | ||
of the same person to whom the premiums and costs were | ||
directly or indirectly paid, incurred, or accrued. The | ||
preceding sentence does not apply to the extent that | ||
the same dividends caused a reduction to the addition | ||
modification required under Section 203(d)(2)(D-7) or | ||
Section 203(d)(2)(D-8) of this Act; | ||
(D-10) An amount equal to the credit allowable to | ||
the taxpayer under Section 218(a) of this Act, | ||
determined without regard to Section 218(c) of this | ||
Act; | ||
(D-11) For taxable years ending on or after | ||
December 31, 2017, an amount equal to the deduction | ||
allowed under Section 199 of the Internal Revenue Code | ||
for the taxable year; | ||
and by deducting from the total so obtained the following | ||
amounts: | ||
(E) The valuation limitation amount; | ||
(F) An amount equal to the amount of any tax | ||
imposed by this Act which
was refunded to the taxpayer | ||
and included in such total for the taxable year; | ||
(G) An amount equal to all amounts included in | ||
taxable income as
modified by subparagraphs (A), (B), | ||
(C) and (D) which are exempt from
taxation by this | ||
State either by reason of its statutes or Constitution | ||
or
by reason of
the Constitution, treaties or statutes | ||
of the United States;
provided that, in the case of any | ||
statute of this State that exempts income
derived from | ||
bonds or other obligations from the tax imposed under | ||
this Act,
the amount exempted shall be the interest net | ||
of bond premium amortization; | ||
(H) Any income of the partnership which | ||
constitutes personal service
income as defined in | ||
Section 1348(b)(1) of the Internal Revenue Code (as
in | ||
effect December 31, 1981) or a reasonable allowance for | ||
compensation
paid or accrued for services rendered by | ||
partners to the partnership,
whichever is greater; | ||
this subparagraph (H) is exempt from the provisions of | ||
Section 250; | ||
(I) An amount equal to all amounts of income | ||
distributable to an entity
subject to the Personal | ||
Property Tax Replacement Income Tax imposed by
| ||
subsections (c) and (d) of Section 201 of this Act | ||
including amounts
distributable to organizations | ||
exempt from federal income tax by reason of
Section | ||
501(a) of the Internal Revenue Code; this subparagraph | ||
(I) is exempt from the provisions of Section 250; | ||
(J) With the exception of any amounts subtracted | ||
under subparagraph
(G),
an amount equal to the sum of | ||
all amounts disallowed as deductions
by (i) Sections | ||
171(a)(2), and 265(a)(2) 265(2) of the Internal | ||
Revenue Code, and all amounts of expenses allocable to
| ||
interest and disallowed as deductions by Section | ||
265(a)(1) 265(1) of the Internal
Revenue Code;
and (ii) | ||
for taxable years
ending on or after August 13, 1999, | ||
Sections
171(a)(2), 265,
280C, and 832(b)(5)(B)(i) of | ||
the Internal Revenue Code, plus, (iii) for taxable | ||
years ending on or after December 31, 2011, Section | ||
45G(e)(3) of the Internal Revenue Code and, for taxable | ||
years ending on or after December 31, 2008, any amount | ||
included in gross income under Section 87 of the | ||
Internal Revenue Code; the provisions of this
| ||
subparagraph are exempt from the provisions of Section | ||
250; | ||
(K) An amount equal to those dividends included in | ||
such total which were
paid by a corporation which | ||
conducts business operations in a River Edge | ||
Redevelopment Zone or zones created under the River | ||
Edge Redevelopment Zone Act and
conducts substantially | ||
all of its operations
from a River Edge Redevelopment | ||
Zone or zones. This subparagraph (K) is exempt from the | ||
provisions of Section 250; | ||
(L) An amount equal to any contribution made to a | ||
job training project
established pursuant to the Real | ||
Property Tax Increment Allocation
Redevelopment Act; | ||
(M) An amount equal to those dividends included in | ||
such total
that were paid by a corporation that | ||
conducts business operations in a
federally designated | ||
Foreign Trade Zone or Sub-Zone and that is designated a
| ||
High Impact Business located in Illinois; provided | ||
that dividends eligible
for the deduction provided in | ||
subparagraph (K) of paragraph (2) of this
subsection | ||
shall not be eligible for the deduction provided under | ||
this
subparagraph (M); | ||
(N) An amount equal to the amount of the deduction | ||
used to compute the
federal income tax credit for | ||
restoration of substantial amounts held under
claim of | ||
right for the taxable year pursuant to Section 1341 of | ||
the
Internal Revenue Code; | ||
(O) For taxable years 2001 and thereafter, for the | ||
taxable year in
which the bonus depreciation deduction
| ||
is taken on the taxpayer's federal income tax return | ||
under
subsection (k) of Section 168 of the Internal | ||
Revenue Code and for each
applicable taxable year | ||
thereafter, an amount equal to "x", where: | ||
(1) "y" equals the amount of the depreciation | ||
deduction taken for the
taxable year
on the | ||
taxpayer's federal income tax return on property | ||
for which the bonus
depreciation deduction
was | ||
taken in any year under subsection (k) of Section | ||
168 of the Internal
Revenue Code, but not including | ||
the bonus depreciation deduction; | ||
(2) for taxable years ending on or before | ||
December 31, 2005, "x" equals "y" multiplied by 30 | ||
and then divided by 70 (or "y"
multiplied by | ||
0.429); and | ||
(3) for taxable years ending after December | ||
31, 2005: | ||
(i) for property on which a bonus | ||
depreciation deduction of 30% of the adjusted | ||
basis was taken, "x" equals "y" multiplied by | ||
30 and then divided by 70 (or "y"
multiplied by | ||
0.429); and | ||
(ii) for property on which a bonus | ||
depreciation deduction of 50% of the adjusted | ||
basis was taken, "x" equals "y" multiplied by | ||
1.0. | ||
The aggregate amount deducted under this | ||
subparagraph in all taxable
years for any one piece of | ||
property may not exceed the amount of the bonus
| ||
depreciation deduction
taken on that property on the | ||
taxpayer's federal income tax return under
subsection | ||
(k) of Section 168 of the Internal Revenue Code. This | ||
subparagraph (O) is exempt from the provisions of | ||
Section 250; | ||
(P) If the taxpayer sells, transfers, abandons, or | ||
otherwise disposes of
property for which the taxpayer | ||
was required in any taxable year to make an
addition | ||
modification under subparagraph (D-5), then an amount | ||
equal to that
addition modification. | ||
If the taxpayer continues to own property through | ||
the last day of the last tax year for which the | ||
taxpayer may claim a depreciation deduction for | ||
federal income tax purposes and for which the taxpayer | ||
was required in any taxable year to make an addition | ||
modification under subparagraph (D-5), then an amount | ||
equal to that addition modification.
| ||
The taxpayer is allowed to take the deduction under | ||
this subparagraph
only once with respect to any one | ||
piece of property. | ||
This subparagraph (P) is exempt from the | ||
provisions of Section 250; | ||
(Q) The amount of (i) any interest income (net of | ||
the deductions allocable thereto) taken into account | ||
for the taxable year with respect to a transaction with | ||
a taxpayer that is required to make an addition | ||
modification with respect to such transaction under | ||
Section 203(a)(2)(D-17), 203(b)(2)(E-12), | ||
203(c)(2)(G-12), or 203(d)(2)(D-7), but not to exceed | ||
the amount of such addition modification and
(ii) any | ||
income from intangible property (net of the deductions | ||
allocable thereto) taken into account for the taxable | ||
year with respect to a transaction with a taxpayer that | ||
is required to make an addition modification with | ||
respect to such transaction under Section | ||
203(a)(2)(D-18), 203(b)(2)(E-13), 203(c)(2)(G-13), or | ||
203(d)(2)(D-8), but not to exceed the amount of such | ||
addition modification. This subparagraph (Q) is exempt | ||
from Section 250;
| ||
(R) An amount equal to the interest income taken | ||
into account for the taxable year (net of the | ||
deductions allocable thereto) with respect to | ||
transactions with (i) a foreign person who would be a | ||
member of the taxpayer's unitary business group but for | ||
the fact that the foreign person's business activity | ||
outside the United States is 80% or more of that | ||
person's total business activity and (ii) for taxable | ||
years ending on or after December 31, 2008, to a person | ||
who would be a member of the same unitary business | ||
group but for the fact that the person is prohibited | ||
under Section 1501(a)(27) from being included in the | ||
unitary business group because he or she is ordinarily | ||
required to apportion business income under different | ||
subsections of Section 304, but not to exceed the | ||
addition modification required to be made for the same | ||
taxable year under Section 203(d)(2)(D-7) for interest | ||
paid, accrued, or incurred, directly or indirectly, to | ||
the same person. This subparagraph (R) is exempt from | ||
Section 250; | ||
(S) An amount equal to the income from intangible | ||
property taken into account for the taxable year (net | ||
of the deductions allocable thereto) with respect to | ||
transactions with (i) a foreign person who would be a | ||
member of the taxpayer's unitary business group but for | ||
the fact that the foreign person's business activity | ||
outside the United States is 80% or more of that | ||
person's total business activity and (ii) for taxable | ||
years ending on or after December 31, 2008, to a person | ||
who would be a member of the same unitary business | ||
group but for the fact that the person is prohibited | ||
under Section 1501(a)(27) from being included in the | ||
unitary business group because he or she is ordinarily | ||
required to apportion business income under different | ||
subsections of Section 304, but not to exceed the | ||
addition modification required to be made for the same | ||
taxable year under Section 203(d)(2)(D-8) for | ||
intangible expenses and costs paid, accrued, or | ||
incurred, directly or indirectly, to the same person. | ||
This subparagraph (S) is exempt from Section 250; and
| ||
(T) For taxable years ending on or after December | ||
31, 2011, in the case of a taxpayer who was required to | ||
add back any insurance premiums under Section | ||
203(d)(2)(D-9), such taxpayer may elect to subtract | ||
that part of a reimbursement received from the | ||
insurance company equal to the amount of the expense or | ||
loss (including expenses incurred by the insurance | ||
company) that would have been taken into account as a | ||
deduction for federal income tax purposes if the | ||
expense or loss had been uninsured. If a taxpayer makes | ||
the election provided for by this subparagraph (T), the | ||
insurer to which the premiums were paid must add back | ||
to income the amount subtracted by the taxpayer | ||
pursuant to this subparagraph (T). This subparagraph | ||
(T) is exempt from the provisions of Section 250. | ||
(e) Gross income; adjusted gross income; taxable income. | ||
(1) In general. Subject to the provisions of paragraph | ||
(2) and
subsection (b)(3), for purposes of this Section and | ||
Section 803(e), a
taxpayer's gross income, adjusted gross | ||
income, or taxable income for
the taxable year shall mean | ||
the amount of gross income, adjusted gross
income or | ||
taxable income properly reportable for federal income tax
| ||
purposes for the taxable year under the provisions of the | ||
Internal
Revenue Code. Taxable income may be less than | ||
zero. However, for taxable
years ending on or after | ||
December 31, 1986, net operating loss
carryforwards from | ||
taxable years ending prior to December 31, 1986, may not
| ||
exceed the sum of federal taxable income for the taxable | ||
year before net
operating loss deduction, plus the excess | ||
of addition modifications over
subtraction modifications | ||
for the taxable year. For taxable years ending
prior to | ||
December 31, 1986, taxable income may never be an amount in | ||
excess
of the net operating loss for the taxable year as | ||
defined in subsections
(c) and (d) of Section 172 of the | ||
Internal Revenue Code, provided that when
taxable income of | ||
a corporation (other than a Subchapter S corporation),
| ||
trust, or estate is less than zero and addition | ||
modifications, other than
those provided by subparagraph | ||
(E) of paragraph (2) of subsection (b) for
corporations or | ||
subparagraph (E) of paragraph (2) of subsection (c) for
| ||
trusts and estates, exceed subtraction modifications, an | ||
addition
modification must be made under those | ||
subparagraphs for any other taxable
year to which the | ||
taxable income less than zero (net operating loss) is
| ||
applied under Section 172 of the Internal Revenue Code or | ||
under
subparagraph (E) of paragraph (2) of this subsection | ||
(e) applied in
conjunction with Section 172 of the Internal | ||
Revenue Code. | ||
(2) Special rule. For purposes of paragraph (1) of this | ||
subsection,
the taxable income properly reportable for | ||
federal income tax purposes
shall mean: | ||
(A) Certain life insurance companies. In the case | ||
of a life
insurance company subject to the tax imposed | ||
by Section 801 of the
Internal Revenue Code, life | ||
insurance company taxable income, plus the
amount of | ||
distribution from pre-1984 policyholder surplus | ||
accounts as
calculated under Section 815a of the | ||
Internal Revenue Code; | ||
(B) Certain other insurance companies. In the case | ||
of mutual
insurance companies subject to the tax | ||
imposed by Section 831 of the
Internal Revenue Code, | ||
insurance company taxable income; | ||
(C) Regulated investment companies. In the case of | ||
a regulated
investment company subject to the tax | ||
imposed by Section 852 of the
Internal Revenue Code, | ||
investment company taxable income; | ||
(D) Real estate investment trusts. In the case of a | ||
real estate
investment trust subject to the tax imposed | ||
by Section 857 of the
Internal Revenue Code, real | ||
estate investment trust taxable income; | ||
(E) Consolidated corporations. In the case of a | ||
corporation which
is a member of an affiliated group of | ||
corporations filing a consolidated
income tax return | ||
for the taxable year for federal income tax purposes,
| ||
taxable income determined as if such corporation had | ||
filed a separate
return for federal income tax purposes | ||
for the taxable year and each
preceding taxable year | ||
for which it was a member of an affiliated group.
For | ||
purposes of this subparagraph, the taxpayer's separate | ||
taxable
income shall be determined as if the election | ||
provided by Section
243(b)(2) of the Internal Revenue | ||
Code had been in effect for all such years; | ||
(F) Cooperatives. In the case of a cooperative | ||
corporation or
association, the taxable income of such | ||
organization determined in
accordance with the | ||
provisions of Section 1381 through 1388 of the
Internal | ||
Revenue Code, but without regard to the prohibition | ||
against offsetting losses from patronage activities | ||
against income from nonpatronage activities; except | ||
that a cooperative corporation or association may make | ||
an election to follow its federal income tax treatment | ||
of patronage losses and nonpatronage losses. In the | ||
event such election is made, such losses shall be | ||
computed and carried over in a manner consistent with | ||
subsection (a) of Section 207 of this Act and | ||
apportioned by the apportionment factor reported by | ||
the cooperative on its Illinois income tax return filed | ||
for the taxable year in which the losses are incurred. | ||
The election shall be effective for all taxable years | ||
with original returns due on or after the date of the | ||
election. In addition, the cooperative may file an | ||
amended return or returns, as allowed under this Act, | ||
to provide that the election shall be effective for | ||
losses incurred or carried forward for taxable years | ||
occurring prior to the date of the election. Once made, | ||
the election may only be revoked upon approval of the | ||
Director. The Department shall adopt rules setting | ||
forth requirements for documenting the elections and | ||
any resulting Illinois net loss and the standards to be | ||
used by the Director in evaluating requests to revoke | ||
elections. Public Act 96-932 is declaratory of | ||
existing law; | ||
(G) Subchapter S corporations. In the case of: (i) | ||
a Subchapter S
corporation for which there is in effect | ||
an election for the taxable year
under Section 1362 of | ||
the Internal Revenue Code, the taxable income of such
| ||
corporation determined in accordance with Section | ||
1363(b) of the Internal
Revenue Code, except that | ||
taxable income shall take into
account those items | ||
which are required by Section 1363(b)(1) of the
| ||
Internal Revenue Code to be separately stated; and (ii) | ||
a Subchapter
S corporation for which there is in effect | ||
a federal election to opt out of
the provisions of the | ||
Subchapter S Revision Act of 1982 and have applied
| ||
instead the prior federal Subchapter S rules as in | ||
effect on July 1, 1982,
the taxable income of such | ||
corporation determined in accordance with the
federal | ||
Subchapter S rules as in effect on July 1, 1982; and | ||
(H) Partnerships. In the case of a partnership, | ||
taxable income
determined in accordance with Section | ||
703 of the Internal Revenue Code,
except that taxable | ||
income shall take into account those items which are
| ||
required by Section 703(a)(1) to be separately stated | ||
but which would be
taken into account by an individual | ||
in calculating his taxable income. | ||
(3) Recapture of business expenses on disposition of | ||
asset or business. Notwithstanding any other law to the | ||
contrary, if in prior years income from an asset or | ||
business has been classified as business income and in a | ||
later year is demonstrated to be non-business income, then | ||
all expenses, without limitation, deducted in such later | ||
year and in the 2 immediately preceding taxable years | ||
related to that asset or business that generated the | ||
non-business income shall be added back and recaptured as | ||
business income in the year of the disposition of the asset | ||
or business. Such amount shall be apportioned to Illinois | ||
using the greater of the apportionment fraction computed | ||
for the business under Section 304 of this Act for the | ||
taxable year or the average of the apportionment fractions | ||
computed for the business under Section 304 of this Act for | ||
the taxable year and for the 2 immediately preceding | ||
taxable years.
| ||
(f) Valuation limitation amount. | ||
(1) In general. The valuation limitation amount | ||
referred to in
subsections (a)(2)(G), (c)(2)(I) and | ||
(d)(2)(E) is an amount equal to: | ||
(A) The sum of the pre-August 1, 1969 appreciation | ||
amounts (to the
extent consisting of gain reportable | ||
under the provisions of Section
1245 or 1250 of the | ||
Internal Revenue Code) for all property in respect
of | ||
which such gain was reported for the taxable year; plus | ||
(B) The lesser of (i) the sum of the pre-August 1, | ||
1969 appreciation
amounts (to the extent consisting of | ||
capital gain) for all property in
respect of which such | ||
gain was reported for federal income tax purposes
for | ||
the taxable year, or (ii) the net capital gain for the | ||
taxable year,
reduced in either case by any amount of | ||
such gain included in the amount
determined under | ||
subsection (a)(2)(F) or (c)(2)(H). | ||
(2) Pre-August 1, 1969 appreciation amount. | ||
(A) If the fair market value of property referred | ||
to in paragraph
(1) was readily ascertainable on August | ||
1, 1969, the pre-August 1, 1969
appreciation amount for | ||
such property is the lesser of (i) the excess of
such | ||
fair market value over the taxpayer's basis (for | ||
determining gain)
for such property on that date | ||
(determined under the Internal Revenue
Code as in | ||
effect on that date), or (ii) the total gain realized | ||
and
reportable for federal income tax purposes in | ||
respect of the sale,
exchange or other disposition of | ||
such property. | ||
(B) If the fair market value of property referred | ||
to in paragraph
(1) was not readily ascertainable on | ||
August 1, 1969, the pre-August 1,
1969 appreciation | ||
amount for such property is that amount which bears
the | ||
same ratio to the total gain reported in respect of the | ||
property for
federal income tax purposes for the | ||
taxable year, as the number of full
calendar months in | ||
that part of the taxpayer's holding period for the
| ||
property ending July 31, 1969 bears to the number of | ||
full calendar
months in the taxpayer's entire holding | ||
period for the
property. | ||
(C) The Department shall prescribe such | ||
regulations as may be
necessary to carry out the | ||
purposes of this paragraph. | ||
(g) Double deductions. Unless specifically provided | ||
otherwise, nothing
in this Section shall permit the same item | ||
to be deducted more than once. | ||
(h) Legislative intention. Except as expressly provided by | ||
this
Section there shall be no modifications or limitations on | ||
the amounts
of income, gain, loss or deduction taken into | ||
account in determining
gross income, adjusted gross income or | ||
taxable income for federal income
tax purposes for the taxable | ||
year, or in the amount of such items
entering into the | ||
computation of base income and net income under this
Act for | ||
such taxable year, whether in respect of property values as of
| ||
August 1, 1969 or otherwise. | ||
(Source: P.A. 100-22, eff. 7-6-17; 100-905, eff. 8-17-18; | ||
revised 10-29-18.) | ||
Section 10-10. The Use Tax Act is amended by changing | ||
Section 2 and by adding Section 2d as follows:
| ||
(35 ILCS 105/2) (from Ch. 120, par. 439.2)
| ||
Sec. 2. Definitions. | ||
"Use" means the exercise by any person of any right or | ||
power over
tangible personal property incident to the ownership | ||
of that property,
except that it does not include the sale of | ||
such property in any form as
tangible personal property in the | ||
regular course of business to the extent
that such property is | ||
not first subjected to a use for which it was
purchased, and | ||
does not include the use of such property by its owner for
| ||
demonstration purposes: Provided that the property purchased | ||
is deemed to
be purchased for the purpose of resale, despite | ||
first being used, to the
extent to which it is resold as an | ||
ingredient of an intentionally produced
product or by-product | ||
of manufacturing. "Use" does not mean the demonstration
use or | ||
interim use of tangible personal property by a retailer before | ||
he sells
that tangible personal property. For watercraft or | ||
aircraft, if the period of
demonstration use or interim use by | ||
the retailer exceeds 18 months,
the retailer
shall pay on the | ||
retailers' original cost price the tax imposed by this Act,
and | ||
no credit for that tax is permitted if the watercraft or | ||
aircraft is
subsequently sold by the retailer. "Use" does not | ||
mean the physical
incorporation of tangible personal property, | ||
to the extent not first subjected
to a use for which it was | ||
purchased, as an ingredient or constituent, into
other tangible | ||
personal property (a) which is sold in the regular course of
| ||
business or (b) which the person incorporating such ingredient | ||
or constituent
therein has undertaken at the time of such | ||
purchase to cause to be transported
in interstate commerce to | ||
destinations outside the State of Illinois: Provided
that the | ||
property purchased is deemed to be purchased for the purpose of
| ||
resale, despite first being used, to the extent to which it is | ||
resold as an
ingredient of an intentionally produced product or | ||
by-product of manufacturing.
| ||
"Watercraft" means a Class 2, Class 3, or Class 4 | ||
watercraft as defined in
Section 3-2 of the Boat Registration | ||
and Safety Act, a personal watercraft, or
any boat equipped | ||
with an inboard motor.
| ||
"Purchase at retail" means the acquisition of the ownership | ||
of or title
to tangible personal property through a sale at | ||
retail.
| ||
"Purchaser" means anyone who, through a sale at retail, | ||
acquires the
ownership of tangible personal property for a | ||
valuable consideration.
| ||
"Sale at retail" means any transfer of the ownership of or | ||
title to
tangible personal property to a purchaser, for the | ||
purpose of use, and not
for the purpose of resale in any form | ||
as tangible personal property to the
extent not first subjected | ||
to a use for which it was purchased, for a
valuable | ||
consideration: Provided that the property purchased is deemed | ||
to
be purchased for the purpose of resale, despite first being | ||
used, to the
extent to which it is resold as an ingredient of | ||
an intentionally produced
product or by-product of | ||
manufacturing. For this purpose, slag produced as
an incident | ||
to manufacturing pig iron or steel and sold is considered to be
| ||
an intentionally produced by-product of manufacturing. "Sale | ||
at retail"
includes any such transfer made for resale unless | ||
made in compliance with
Section 2c of the Retailers' Occupation | ||
Tax Act, as incorporated by
reference into Section 12 of this | ||
Act. Transactions whereby the possession
of the property is | ||
transferred but the seller retains the title as security
for | ||
payment of the selling price are sales.
| ||
"Sale at retail" shall also be construed to include any | ||
Illinois
florist's sales transaction in which the purchase | ||
order is received in
Illinois by a florist and the sale is for | ||
use or consumption, but the
Illinois florist has a florist in | ||
another state deliver the property to the
purchaser or the | ||
purchaser's donee in such other state.
| ||
Nonreusable tangible personal property that is used by | ||
persons engaged in
the business of operating a restaurant, | ||
cafeteria, or drive-in is a sale for
resale when it is | ||
transferred to customers in the ordinary course of business
as | ||
part of the sale of food or beverages and is used to deliver, | ||
package, or
consume food or beverages, regardless of where | ||
consumption of the food or
beverages occurs. Examples of those | ||
items include, but are not limited to
nonreusable, paper and | ||
plastic cups, plates, baskets, boxes, sleeves, buckets
or other | ||
containers, utensils, straws, placemats, napkins, doggie bags, | ||
and
wrapping or packaging
materials that are transferred to | ||
customers as part of the sale of food or
beverages in the | ||
ordinary course of business.
| ||
The purchase, employment and transfer of such tangible | ||
personal property
as newsprint and ink for the primary purpose | ||
of conveying news (with or
without other information) is not a | ||
purchase, use or sale of tangible
personal property.
| ||
"Selling price" means the consideration for a sale valued | ||
in money
whether received in money or otherwise, including | ||
cash, credits, property
other than as hereinafter provided, and | ||
services, but not including the
value of or credit given for | ||
traded-in tangible personal property where the
item that is | ||
traded-in is of like kind and character as that which is being
| ||
sold, and shall be determined without any deduction on account | ||
of the cost
of the property sold, the cost of materials used, | ||
labor or service cost or
any other expense whatsoever, but does | ||
not include interest or finance
charges which appear as | ||
separate items on the bill of sale or sales
contract nor | ||
charges that are added to prices by sellers on account of the
| ||
seller's tax liability under the "Retailers' Occupation Tax | ||
Act", or on
account of the seller's duty to collect, from the | ||
purchaser, the tax that
is imposed by this Act, or, except as | ||
otherwise provided with respect to any cigarette tax imposed by | ||
a home rule unit, on account of the seller's tax liability | ||
under any local occupation tax administered by the Department, | ||
or, except as otherwise provided with respect to any cigarette | ||
tax imposed by a home rule unit on account of the seller's duty | ||
to collect, from the purchasers, the tax that is imposed under | ||
any local use tax administered by the Department. Effective | ||
December 1, 1985, "selling price"
shall include charges that | ||
are added to prices by sellers on account of the
seller's tax | ||
liability under the Cigarette Tax Act, on account of the | ||
seller's
duty to collect, from the purchaser, the tax imposed | ||
under the Cigarette Use
Tax Act, and on account of the seller's | ||
duty to collect, from the purchaser,
any cigarette tax imposed | ||
by a home rule unit.
| ||
Notwithstanding any law to the contrary, for any motor | ||
vehicle, as defined in Section 1-146 of the Vehicle Code, that | ||
is sold on or after January 1, 2015 for the purpose of leasing | ||
the vehicle for a defined period that is longer than one year | ||
and (1) is a motor vehicle of the second division that: (A) is | ||
a self-contained motor vehicle designed or permanently | ||
converted to provide living quarters for recreational, | ||
camping, or travel use, with direct walk through access to the | ||
living quarters from the driver's seat; (B) is of the van | ||
configuration designed for the transportation of not less than | ||
7 nor more than 16 passengers; or (C) has a gross vehicle | ||
weight rating of 8,000 pounds or less or (2) is a motor vehicle | ||
of the first division, "selling price" or "amount of sale" | ||
means the consideration received by the lessor pursuant to the | ||
lease contract, including amounts due at lease signing and all | ||
monthly or other regular payments charged over the term of the | ||
lease. Also included in the selling price is any amount | ||
received by the lessor from the lessee for the leased vehicle | ||
that is not calculated at the time the lease is executed, | ||
including, but not limited to, excess mileage charges and | ||
charges for excess wear and tear. For sales that occur in | ||
Illinois, with respect to any amount received by the lessor | ||
from the lessee for the leased vehicle that is not calculated | ||
at the time the lease is executed, the lessor who purchased the | ||
motor vehicle does not incur the tax imposed by the Use Tax Act | ||
on those amounts, and the retailer who makes the retail sale of | ||
the motor vehicle to the lessor is not required to collect the | ||
tax imposed by this Act or to pay the tax imposed by the | ||
Retailers' Occupation Tax Act on those amounts. However, the | ||
lessor who purchased the motor vehicle assumes the liability | ||
for reporting and paying the tax on those amounts directly to | ||
the Department in the same form (Illinois Retailers' Occupation | ||
Tax, and local retailers' occupation taxes, if applicable) in | ||
which the retailer would have reported and paid such tax if the | ||
retailer had accounted for the tax to the Department. For | ||
amounts received by the lessor from the lessee that are not | ||
calculated at the time the lease is executed, the lessor must | ||
file the return and pay the tax to the Department by the due | ||
date otherwise required by this Act for returns other than | ||
transaction returns. If the retailer is entitled under this Act | ||
to a discount for collecting and remitting the tax imposed | ||
under this Act to the Department with respect to the sale of | ||
the motor vehicle to the lessor, then the right to the discount | ||
provided in this Act shall be transferred to the lessor with | ||
respect to the tax paid by the lessor for any amount received | ||
by the lessor from the lessee for the leased vehicle that is | ||
not calculated at the time the lease is executed; provided that | ||
the discount is only allowed if the return is timely filed and | ||
for amounts timely paid. The "selling price" of a motor vehicle | ||
that is sold on or after January 1, 2015 for the purpose of | ||
leasing for a defined period of longer than one year shall not | ||
be reduced by the value of or credit given for traded-in | ||
tangible personal property owned by the lessor, nor shall it be | ||
reduced by the value of or credit given for traded-in tangible | ||
personal property owned by the lessee, regardless of whether | ||
the trade-in value thereof is assigned by the lessee to the | ||
lessor. In the case of a motor vehicle that is sold for the | ||
purpose of leasing for a defined period of longer than one | ||
year, the sale occurs at the time of the delivery of the | ||
vehicle, regardless of the due date of any lease payments. A | ||
lessor who incurs a Retailers' Occupation Tax liability on the | ||
sale of a motor vehicle coming off lease may not take a credit | ||
against that liability for the Use Tax the lessor paid upon the | ||
purchase of the motor vehicle (or for any tax the lessor paid | ||
with respect to any amount received by the lessor from the | ||
lessee for the leased vehicle that was not calculated at the | ||
time the lease was executed) if the selling price of the motor | ||
vehicle at the time of purchase was calculated using the | ||
definition of "selling price" as defined in this paragraph. | ||
Notwithstanding any other provision of this Act to the | ||
contrary, lessors shall file all returns and make all payments | ||
required under this paragraph to the Department by electronic | ||
means in the manner and form as required by the Department. | ||
This paragraph does not apply to leases of motor vehicles for | ||
which, at the time the lease is entered into, the term of the | ||
lease is not a defined period, including leases with a defined | ||
initial period with the option to continue the lease on a | ||
month-to-month or other basis beyond the initial defined | ||
period. | ||
The phrase "like kind and character" shall be liberally | ||
construed
(including but not limited to any form of motor | ||
vehicle for any form of
motor vehicle, or any kind of farm or | ||
agricultural implement for any other
kind of farm or | ||
agricultural implement), while not including a kind of item
| ||
which, if sold at retail by that retailer, would be exempt from | ||
retailers'
occupation tax and use tax as an isolated or | ||
occasional sale.
| ||
"Department" means the Department of Revenue.
| ||
"Person" means any natural individual, firm, partnership, | ||
association,
joint stock company, joint adventure, public or | ||
private corporation, limited
liability company, or a
receiver, | ||
executor, trustee, guardian or other representative appointed
| ||
by order of any court.
| ||
"Retailer" means and includes every person engaged in the | ||
business of
making sales at retail as defined in this Section.
| ||
A person who holds himself or herself out as being engaged | ||
(or who habitually
engages) in selling tangible personal | ||
property at retail is a retailer
hereunder with respect to such | ||
sales (and not primarily in a service
occupation) | ||
notwithstanding the fact that such person designs and produces
| ||
such tangible personal property on special order for the | ||
purchaser and in
such a way as to render the property of value | ||
only to such purchaser, if
such tangible personal property so | ||
produced on special order serves
substantially the same | ||
function as stock or standard items of tangible
personal | ||
property that are sold at retail.
| ||
A person whose activities are organized and conducted | ||
primarily as a
not-for-profit service enterprise, and who | ||
engages in selling tangible
personal property at retail | ||
(whether to the public or merely to members and
their guests) | ||
is a retailer with respect to such transactions, excepting
only | ||
a person organized and operated exclusively for charitable, | ||
religious
or educational purposes either (1), to the extent of | ||
sales by such person
to its members, students, patients or | ||
inmates of tangible personal property
to be used primarily for | ||
the purposes of such person, or (2), to the extent
of sales by | ||
such person of tangible personal property which is not sold or
| ||
offered for sale by persons organized for profit. The selling | ||
of school
books and school supplies by schools at retail to | ||
students is not
"primarily for the purposes of" the school | ||
which does such selling. This
paragraph does not apply to nor | ||
subject to taxation occasional dinners,
social or similar | ||
activities of a person organized and operated exclusively
for | ||
charitable, religious or educational purposes, whether or not | ||
such
activities are open to the public.
| ||
A person who is the recipient of a grant or contract under | ||
Title VII of
the Older Americans Act of 1965 (P.L. 92-258) and | ||
serves meals to
participants in the federal Nutrition Program | ||
for the Elderly in return for
contributions established in | ||
amount by the individual participant pursuant
to a schedule of | ||
suggested fees as provided for in the federal Act is not a
| ||
retailer under this Act with respect to such transactions.
| ||
Persons who engage in the business of transferring tangible | ||
personal
property upon the redemption of trading stamps are | ||
retailers hereunder when
engaged in such business.
| ||
The isolated or occasional sale of tangible personal | ||
property at retail
by a person who does not hold himself out as | ||
being engaged (or who does not
habitually engage) in selling | ||
such tangible personal property at retail or
a sale through a | ||
bulk vending machine does not make such person a retailer
| ||
hereunder. However, any person who is engaged in a business | ||
which is not
subject to the tax imposed by the "Retailers' | ||
Occupation Tax Act" because
of involving the sale of or a | ||
contract to sell real estate or a
construction contract to | ||
improve real estate, but who, in the course of
conducting such | ||
business, transfers tangible personal property to users or
| ||
consumers in the finished form in which it was purchased, and | ||
which does
not become real estate, under any provision of a | ||
construction contract or
real estate sale or real estate sales | ||
agreement entered into with some
other person arising out of or | ||
because of such nontaxable business, is a
retailer to the | ||
extent of the value of the tangible personal property so
| ||
transferred. If, in such transaction, a separate charge is made | ||
for the
tangible personal property so transferred, the value of | ||
such property, for
the purposes of this Act, is the amount so | ||
separately charged, but not less
than the cost of such property | ||
to the transferor; if no separate charge is
made, the value of | ||
such property, for the purposes of this Act, is the cost
to the | ||
transferor of such tangible personal property.
| ||
"Retailer maintaining a place of business in this State", | ||
or any like
term, means and includes any of the following | ||
retailers:
| ||
(1) A retailer having or maintaining within this State, | ||
directly or by
a subsidiary, an office, distribution house, | ||
sales house, warehouse or other
place of business, or any | ||
agent or other representative operating within this
State | ||
under the authority of the retailer or its subsidiary, | ||
irrespective of
whether such place of business or agent or | ||
other representative is located here
permanently or | ||
temporarily, or whether such retailer or subsidiary is | ||
licensed
to do business in this State. However, the | ||
ownership of property that is
located at the premises of a | ||
printer with which the retailer has contracted for
printing | ||
and that consists of the final printed product, property | ||
that becomes
a part of the final printed product, or copy | ||
from which the printed product is
produced shall not result | ||
in the retailer being deemed to have or maintain an
office, | ||
distribution house, sales house, warehouse, or other place | ||
of business
within this State. | ||
(1.1) A retailer having a contract with a person | ||
located in this State under which the person, for a | ||
commission or other consideration based upon the sale of | ||
tangible personal property by the retailer, directly or | ||
indirectly refers potential customers to the retailer by | ||
providing to the potential customers a promotional code or | ||
other mechanism that allows the retailer to track purchases | ||
referred by such persons. Examples of mechanisms that allow | ||
the retailer to track purchases referred by such persons | ||
include but are not limited to the use of a link on the | ||
person's Internet website, promotional codes distributed | ||
through the person's hand-delivered or mailed material, | ||
and promotional codes distributed by the person through | ||
radio or other broadcast media. The provisions of this | ||
paragraph (1.1) shall apply only if the cumulative gross | ||
receipts from sales of tangible personal property by the | ||
retailer to customers who are referred to the retailer by | ||
all persons in this State under such contracts exceed | ||
$10,000 during the preceding 4 quarterly periods ending on | ||
the last day of March, June, September, and December. A | ||
retailer meeting the requirements of this paragraph (1.1) | ||
shall be presumed to be maintaining a place of business in | ||
this State but may rebut this presumption by submitting | ||
proof that the referrals or other activities pursued within | ||
this State by such persons were not sufficient to meet the | ||
nexus standards of the United States Constitution during | ||
the preceding 4 quarterly periods. | ||
(1.2) Beginning July 1, 2011, a retailer having a | ||
contract with a person located in this State under which: | ||
(A) the retailer sells the same or substantially | ||
similar line of products as the person located in this | ||
State and does so using an identical or substantially | ||
similar name, trade name, or trademark as the person | ||
located in this State; and | ||
(B) the retailer provides a commission or other | ||
consideration to the person located in this State based | ||
upon the sale of tangible personal property by the | ||
retailer. | ||
The provisions of this paragraph (1.2) shall apply only if | ||
the cumulative gross receipts from sales of tangible | ||
personal property by the retailer to customers in this | ||
State under all such contracts exceed $10,000 during the | ||
preceding 4 quarterly periods ending on the last day of | ||
March, June, September, and December.
| ||
(2) A retailer soliciting orders for tangible personal | ||
property by
means of a telecommunication or television | ||
shopping system (which utilizes toll
free numbers) which is | ||
intended by the retailer to be broadcast by cable
| ||
television or other means of broadcasting, to consumers | ||
located in this State.
| ||
(3) A retailer, pursuant to a contract with a | ||
broadcaster or publisher
located in this State, soliciting | ||
orders for tangible personal property by
means of | ||
advertising which is disseminated primarily to consumers | ||
located in
this State and only secondarily to bordering | ||
jurisdictions.
| ||
(4) A retailer soliciting orders for tangible personal | ||
property by mail
if the solicitations are substantial and | ||
recurring and if the retailer benefits
from any banking, | ||
financing, debt collection, telecommunication, or | ||
marketing
activities occurring in this State or benefits | ||
from the location in this State
of authorized installation, | ||
servicing, or repair facilities.
| ||
(5) A retailer that is owned or controlled by the same | ||
interests that own
or control any retailer engaging in | ||
business in the same or similar line of
business in this | ||
State.
| ||
(6) A retailer having a franchisee or licensee | ||
operating under its trade
name if the franchisee or | ||
licensee is required to collect the tax under this
Section.
| ||
(7) A retailer, pursuant to a contract with a cable | ||
television operator
located in this State, soliciting | ||
orders for tangible personal property by
means of | ||
advertising which is transmitted or distributed over a | ||
cable
television system in this State.
| ||
(8) A retailer engaging in activities in Illinois, | ||
which activities in
the state in which the retail business | ||
engaging in such activities is located
would constitute | ||
maintaining a place of business in that state.
| ||
(9) Beginning October 1, 2018, a retailer making sales | ||
of tangible personal property to purchasers in Illinois | ||
from outside of Illinois if: | ||
(A) the cumulative gross receipts from sales of | ||
tangible personal property to purchasers in Illinois | ||
are $100,000 or more; or | ||
(B) the retailer enters into 200 or more separate | ||
transactions for the sale of tangible personal | ||
property to purchasers in Illinois. | ||
The retailer shall determine on a quarterly basis, | ||
ending on the last day of March, June, September, and | ||
December, whether he or she meets the criteria of either | ||
subparagraph (A) or (B) of this paragraph (9) for the | ||
preceding 12-month period. If the retailer meets the | ||
criteria of either subparagraph (A) or (B) for a 12-month | ||
period, he or she is considered a retailer maintaining a | ||
place of business in this State and is required to collect | ||
and remit the tax imposed under this Act and file returns | ||
for one year. At the end of that one-year period, the | ||
retailer shall determine whether the retailer met the | ||
criteria of either subparagraph (A) or (B) during the | ||
preceding 12-month period. If the retailer met the criteria | ||
in either subparagraph (A) or (B) for the preceding | ||
12-month period, he or she is considered a retailer | ||
maintaining a place of business in this State and is | ||
required to collect and remit the tax imposed under this | ||
Act and file returns for the subsequent year. If at the end | ||
of a one-year period a retailer that was required to | ||
collect and remit the tax imposed under this Act determines | ||
that he or she did not meet the criteria in either | ||
subparagraph (A) or (B) during the preceding 12-month | ||
period, the retailer shall subsequently determine on a | ||
quarterly basis, ending on the last day of March, June, | ||
September, and December, whether he or she meets the | ||
criteria of either subparagraph (A) or (B) for the | ||
preceding 12-month period. | ||
Beginning January 1, 2020, neither the gross receipts | ||
from nor the number of separate transactions for sales of | ||
tangible personal property to purchasers in Illinois that a | ||
retailer makes through a marketplace facilitator and for | ||
which the retailer has received a certification from the | ||
marketplace facilitator pursuant to Section 2d of this Act | ||
shall be included for purposes of determining whether he or | ||
she has met the thresholds of this paragraph (9). | ||
(10) Beginning January 1, 2020, a marketplace | ||
facilitator, as defined in Section 2d of this Act. | ||
"Bulk vending machine" means a vending machine,
containing | ||
unsorted confections, nuts, toys, or other items designed
| ||
primarily to be used or played with by children
which, when a | ||
coin or coins of a denomination not larger than $0.50 are | ||
inserted, are dispensed in equal portions, at random and
| ||
without selection by the customer.
| ||
(Source: P.A. 99-78, eff. 7-20-15; 100-587, eff. 6-4-18.)
| ||
(35 ILCS 105/2d new) | ||
Sec. 2d. Marketplace facilitators and marketplace sellers. | ||
(a) As used in this Section: | ||
"Affiliate" means a person that, with respect to another | ||
person: (i) has a direct or indirect ownership interest of more | ||
than 5 percent in the other person; or (ii) is related to the | ||
other person because a third person, or a group of third | ||
persons who are affiliated with each other as defined in this | ||
subsection, holds a direct or indirect ownership interest of | ||
more than 5% in the related person. | ||
"Marketplace" means a physical or electronic place, forum, | ||
platform, application, or other method by which a marketplace | ||
seller sells or offers to sell items. | ||
"Marketplace facilitator" means a person who, pursuant to | ||
an agreement with a marketplace seller, facilitates sales of | ||
tangible personal property by that marketplace seller. A person | ||
facilitates a sale of tangible personal property by, directly | ||
or indirectly through one or more affiliates, doing both of the | ||
following: (i) listing or otherwise making available for sale | ||
the tangible personal property of the marketplace seller | ||
through a marketplace owned or operated by the marketplace | ||
facilitator; and (ii) processing sales or payments for | ||
marketplace sellers. | ||
"Marketplace seller" means a person that sells or offers to | ||
sell tangible personal property through a marketplace. | ||
(b) Beginning on January 1, 2020, a marketplace facilitator | ||
who meets either of the following criteria is considered the | ||
retailer of each sale of tangible personal property made on the | ||
marketplace: | ||
(1) the cumulative gross receipts from sales of | ||
tangible personal property to purchasers in Illinois by the | ||
marketplace facilitator and by marketplace sellers are | ||
$100,000 or more; or | ||
(2) the marketplace facilitator and marketplace | ||
sellers cumulatively enter into 200 or more separate | ||
transactions for the sale of tangible personal property to | ||
purchasers in Illinois. | ||
A marketplace facilitator shall determine on a quarterly | ||
basis, ending on the last day of March, June, September, and | ||
December, whether he or she meets the criteria of either | ||
paragraph (1) or (2) of this subsection (b) for the preceding | ||
12-month period. If the marketplace facilitator meets the | ||
criteria of either paragraph (1) or (2) for a 12-month period, | ||
he or she is considered a retailer maintaining a place of | ||
business in this State and is required to collect and remit the | ||
tax imposed under this Act and file returns for one year. At | ||
the end of that one-year period, the marketplace facilitator | ||
shall determine whether the marketplace facilitator met the | ||
criteria of either paragraph (1) or (2) during the preceding | ||
12-month period. If the marketplace facilitator met the | ||
criteria in either paragraph (1) or (2) for the preceding | ||
12-month period, he or she is considered a retailer maintaining | ||
a place of business in this State and is required to collect | ||
and remit the tax imposed under this Act and file returns for | ||
the subsequent year. If at the end of a one-year period a | ||
marketplace facilitator that was required to collect and remit | ||
the tax imposed under this Act determines that he or she did | ||
not meet the criteria in either paragraph (1) or (2) during the | ||
preceding 12-month period, the marketplace facilitator shall | ||
subsequently determine on a quarterly basis, ending on the last | ||
day of March, June, September, and December, whether he or she | ||
meets the criteria of either paragraph (1) or (2) for the | ||
preceding 12-month period. | ||
(c) A marketplace facilitator that meets either of the | ||
thresholds in subsection (b) of this Section is considered the | ||
retailer of each sale made through its marketplace and is | ||
liable for collecting and remitting the tax under this Act on | ||
all such sales. The marketplace facilitator has all the rights | ||
and duties, and is required to comply with the same | ||
requirements and procedures, as all other retailers | ||
maintaining a place of business in this State who are | ||
registered or who are required to be registered to collect and | ||
remit the tax imposed by this Act. | ||
(d) A marketplace facilitator shall: | ||
(1) certify to each marketplace seller that the | ||
marketplace facilitator assumes the rights and duties of a | ||
retailer under this Act with respect to sales made by the | ||
marketplace seller through the marketplace; and | ||
(2) collect taxes imposed by this Act as required by | ||
Section 3-45 of this Act for sales made through the | ||
marketplace. | ||
(e) A marketplace seller shall retain books and records for | ||
all sales made through a marketplace in accordance with the | ||
requirements of Section 11. | ||
(f) A marketplace seller shall furnish to the marketplace | ||
facilitator information that is necessary for the marketplace | ||
facilitator to correctly collect and remit taxes for a retail | ||
sale. The information may include a certification that an item | ||
being sold is taxable, not taxable, exempt from taxation, or | ||
taxable at a specified rate. A marketplace seller shall be held | ||
harmless for liability for the tax imposed under this Act when | ||
a marketplace facilitator fails to correctly collect and remit | ||
tax after having been provided with information by a | ||
marketplace seller to correctly collect and remit taxes imposed | ||
under this Act. | ||
(g) Except as provided in subsection (h), if the | ||
marketplace facilitator demonstrates to the satisfaction of | ||
the Department that its failure to correctly collect and remit | ||
tax on a retail sale resulted from the marketplace | ||
facilitator's good faith reliance on incorrect or insufficient | ||
information provided by a marketplace seller, it shall be | ||
relieved of liability for the tax on that retail sale. In this | ||
case, a marketplace seller is liable for any resulting tax due. | ||
(h) A marketplace facilitator and marketplace seller that | ||
are affiliates, as defined by subsection (a), are jointly and | ||
severally liable for tax liability resulting from a sale made | ||
by the affiliated marketplace seller through the marketplace. | ||
(i) This Section does not affect the tax liability of a | ||
purchaser under this Act. | ||
(j) The Department may adopt rules for the administration | ||
and enforcement of the provisions of this Section. | ||
Section 10-15. The Service Use Tax Act is amended by | ||
changing Section 2 and by adding Section 2d as follows:
| ||
(35 ILCS 110/2) (from Ch. 120, par. 439.32)
| ||
Sec. 2. Definitions. In this Act: | ||
"Use" means the exercise by any person of any right or | ||
power
over tangible personal property incident to the ownership | ||
of that
property, but does not include the sale or use for | ||
demonstration by him
of that property in any form as tangible | ||
personal property in the
regular course of business.
"Use" does | ||
not mean the interim
use of
tangible personal property nor the | ||
physical incorporation of tangible
personal property, as an | ||
ingredient or constituent, into other tangible
personal | ||
property, (a) which is sold in the regular course of business
| ||
or (b) which the person incorporating such ingredient or | ||
constituent
therein has undertaken at the time of such purchase | ||
to cause to be
transported in interstate commerce to | ||
destinations outside the State of
Illinois.
| ||
"Purchased from a serviceman" means the acquisition of the | ||
ownership
of, or title to, tangible personal property through a | ||
sale of service.
| ||
"Purchaser" means any person who, through a sale of | ||
service, acquires
the ownership of, or title to, any tangible | ||
personal property.
| ||
"Cost price" means the consideration paid by the serviceman | ||
for a
purchase valued in money, whether paid in money or | ||
otherwise, including
cash, credits and services, and shall be | ||
determined without any
deduction on account of the supplier's | ||
cost of the property sold or on
account of any other expense | ||
incurred by the supplier. When a serviceman
contracts out part | ||
or all of the services required in his sale of service,
it | ||
shall be presumed that the cost price to the serviceman of the | ||
property
transferred to him or her by his or her subcontractor | ||
is equal to 50% of
the subcontractor's charges to the | ||
serviceman in the absence of proof of
the consideration paid by | ||
the subcontractor for the purchase of such property.
| ||
"Selling price" means the consideration for a sale valued | ||
in money
whether received in money or otherwise, including | ||
cash, credits and
service, and shall be determined without any | ||
deduction on account of the
serviceman's cost of the property | ||
sold, the cost of materials used,
labor or service cost or any | ||
other expense whatsoever, but does not
include interest or | ||
finance charges which appear as separate items on
the bill of | ||
sale or sales contract nor charges that are added to prices
by | ||
sellers on account of the seller's duty to collect, from the
| ||
purchaser, the tax that is imposed by this Act.
| ||
"Department" means the Department of Revenue.
| ||
"Person" means any natural individual, firm, partnership,
| ||
association, joint stock company, joint venture, public or | ||
private
corporation, limited liability company, and any | ||
receiver, executor, trustee,
guardian or other representative | ||
appointed by order of any court.
| ||
"Sale of service" means any transaction except:
| ||
(1) a retail sale of tangible personal property taxable | ||
under the
Retailers' Occupation Tax Act or under the Use | ||
Tax Act.
| ||
(2) a sale of tangible personal property for the | ||
purpose of resale
made in compliance with Section 2c of the | ||
Retailers' Occupation Tax Act.
| ||
(3) except as hereinafter provided, a sale or transfer | ||
of tangible
personal property as an incident to the | ||
rendering of service for or by
any governmental body, or | ||
for or by any corporation, society,
association, | ||
foundation or institution organized and operated
| ||
exclusively for charitable, religious or educational | ||
purposes or any
not-for-profit corporation, society, | ||
association, foundation,
institution or organization which | ||
has no compensated officers or
employees and which is | ||
organized and operated primarily for the
recreation of | ||
persons 55 years of age or older. A limited liability | ||
company
may qualify for the exemption under this paragraph | ||
only if the limited
liability company is organized and | ||
operated exclusively for educational
purposes.
| ||
(4) (blank).
| ||
(4a) a sale or transfer of tangible personal
property | ||
as an incident
to the rendering of service for owners, | ||
lessors, or shippers of tangible
personal property which is | ||
utilized by interstate carriers for hire for
use as rolling | ||
stock moving in interstate commerce so long as so used by
| ||
interstate carriers for hire, and equipment operated by a
| ||
telecommunications provider, licensed as a common carrier | ||
by the Federal
Communications Commission, which is | ||
permanently installed in or affixed to
aircraft moving in | ||
interstate commerce.
| ||
(4a-5) on and after July 1, 2003 and through June 30, | ||
2004, a sale or transfer of a motor vehicle
of
the
second | ||
division with a gross vehicle weight in excess of 8,000 | ||
pounds as an
incident to the rendering of service if that | ||
motor
vehicle is subject
to the commercial distribution fee | ||
imposed under Section 3-815.1 of the
Illinois Vehicle
Code. | ||
Beginning on July 1, 2004 and through June 30, 2005, the | ||
use in this State of motor vehicles of the second division: | ||
(i) with a gross vehicle weight rating in excess of 8,000 | ||
pounds; (ii) that are subject to the commercial | ||
distribution fee imposed under Section 3-815.1 of the | ||
Illinois Vehicle Code; and (iii) that are primarily used | ||
for commercial purposes. Through June 30, 2005, this
| ||
exemption applies to repair and replacement parts added | ||
after the
initial
purchase of such a motor vehicle if that | ||
motor vehicle is used in a manner that
would
qualify for | ||
the rolling stock exemption otherwise provided for in this | ||
Act. For purposes of this paragraph, "used for commercial | ||
purposes" means the transportation of persons or property | ||
in furtherance of any commercial or industrial enterprise | ||
whether for-hire or not.
| ||
(5) a sale or transfer of machinery and equipment used | ||
primarily in the
process of the manufacturing or | ||
assembling, either in an existing, an expanded
or a new | ||
manufacturing facility, of tangible personal property for | ||
wholesale or
retail sale or lease, whether such sale or | ||
lease is made directly by the
manufacturer or by some other | ||
person, whether the materials used in the process
are owned | ||
by the manufacturer or some other person, or whether such | ||
sale or
lease is made apart from or as an incident to the | ||
seller's engaging in a
service occupation and the | ||
applicable tax is a Service Use Tax or Service
Occupation | ||
Tax, rather than Use Tax or Retailers' Occupation Tax. The | ||
exemption provided by this paragraph (5) does not include | ||
machinery and equipment used in (i) the generation of | ||
electricity for wholesale or retail sale; (ii) the | ||
generation or treatment of natural or artificial gas for | ||
wholesale or retail sale that is delivered to customers | ||
through pipes, pipelines, or mains; or (iii) the treatment | ||
of water for wholesale or retail sale that is delivered to | ||
customers through pipes, pipelines, or mains. The | ||
provisions of Public Act 98-583 are declaratory of existing | ||
law as to the meaning and scope of this exemption. The | ||
exemption under this paragraph (5) is exempt from the | ||
provisions of Section 3-75.
| ||
(5a) the repairing, reconditioning or remodeling, for | ||
a
common carrier by rail, of tangible personal property | ||
which belongs to such
carrier for hire, and as to which | ||
such carrier receives the physical possession
of the | ||
repaired, reconditioned or remodeled item of tangible | ||
personal property
in Illinois, and which such carrier | ||
transports, or shares with another common
carrier in the | ||
transportation of such property, out of Illinois on a | ||
standard
uniform bill of lading showing the person who | ||
repaired, reconditioned or
remodeled the property to a | ||
destination outside Illinois, for use outside
Illinois.
| ||
(5b) a sale or transfer of tangible personal property | ||
which is produced by
the seller thereof on special order in | ||
such a way as to have made the
applicable tax the Service | ||
Occupation Tax or the Service Use Tax, rather than
the | ||
Retailers' Occupation Tax or the Use Tax, for an interstate | ||
carrier by rail
which receives the physical possession of | ||
such property in Illinois, and which
transports such | ||
property, or shares with another common carrier in the
| ||
transportation of such property, out of Illinois on a | ||
standard uniform bill of
lading showing the seller of the | ||
property as the shipper or consignor of such
property to a | ||
destination outside Illinois, for use outside Illinois.
| ||
(6) until July 1, 2003, a sale or transfer of | ||
distillation machinery
and equipment, sold
as a unit or kit | ||
and assembled or installed by the retailer, which
machinery | ||
and equipment is certified by the user to be used only for | ||
the
production of ethyl alcohol that will be used for | ||
consumption as motor fuel
or as a component of motor fuel | ||
for the personal use of such user and not
subject to sale | ||
or resale.
| ||
(7) at the election of any serviceman not required to | ||
be
otherwise registered as a retailer under Section 2a of | ||
the Retailers'
Occupation Tax Act, made for each fiscal | ||
year sales
of service in which the aggregate annual cost | ||
price of tangible
personal property transferred as an | ||
incident to the sales of service is
less than 35%, or 75% | ||
in the case of servicemen transferring prescription
drugs | ||
or servicemen engaged in graphic arts production, of the | ||
aggregate
annual total gross receipts from all sales of | ||
service. The purchase of
such tangible personal property by | ||
the serviceman shall be subject to tax
under the Retailers' | ||
Occupation Tax Act and the Use Tax Act.
However, if a
| ||
primary serviceman who has made the election described in | ||
this paragraph
subcontracts service work to a secondary | ||
serviceman who has also made the
election described in this | ||
paragraph, the primary serviceman does not
incur a Use Tax | ||
liability if the secondary serviceman (i) has paid or will | ||
pay
Use
Tax on his or her cost price of any tangible | ||
personal property transferred
to the primary serviceman | ||
and (ii) certifies that fact in writing to the
primary
| ||
serviceman.
| ||
Tangible personal property transferred incident to the | ||
completion of a
maintenance agreement is exempt from the tax | ||
imposed pursuant to this Act.
| ||
Exemption (5) also includes machinery and equipment used in | ||
the general
maintenance or repair of such exempt machinery and | ||
equipment or for in-house
manufacture of exempt machinery and | ||
equipment. On and after July 1, 2017, exemption (5) also
| ||
includes graphic arts machinery and equipment, as
defined in | ||
paragraph (5) of Section 3-5. The machinery and equipment | ||
exemption does not include machinery and equipment used in (i) | ||
the generation of electricity for wholesale or retail sale; | ||
(ii) the generation or treatment of natural or artificial gas | ||
for wholesale or retail sale that is delivered to customers | ||
through pipes, pipelines, or mains; or (iii) the treatment of | ||
water for wholesale or retail sale that is delivered to | ||
customers through pipes, pipelines, or mains. The provisions of | ||
Public Act 98-583 are declaratory of existing law as to the | ||
meaning and scope of this exemption. For the purposes of | ||
exemption
(5), each of these terms shall have the following | ||
meanings: (1) "manufacturing
process" shall mean the | ||
production of any article of tangible personal
property, | ||
whether such article is a finished product or an article for | ||
use in
the process of manufacturing or assembling a different | ||
article of tangible
personal property, by procedures commonly | ||
regarded as manufacturing,
processing, fabricating, or | ||
refining which changes some existing
material or materials into | ||
a material with a different form, use or
name. In relation to a | ||
recognized integrated business composed of a
series of | ||
operations which collectively constitute manufacturing, or
| ||
individually constitute manufacturing operations, the | ||
manufacturing
process shall be deemed to commence with the | ||
first operation or stage of
production in the series, and shall | ||
not be deemed to end until the
completion of the final product | ||
in the last operation or stage of
production in the series; and | ||
further, for purposes of exemption (5),
photoprocessing is | ||
deemed to be a manufacturing process of tangible
personal | ||
property for wholesale or retail sale; (2) "assembling process" | ||
shall
mean the production of any article of tangible personal | ||
property, whether such
article is a finished product or an | ||
article for use in the process of
manufacturing or assembling a | ||
different article of tangible personal
property, by the | ||
combination of existing materials in a manner commonly
regarded | ||
as assembling which results in a material of a different form,
| ||
use or name; (3) "machinery" shall mean major mechanical | ||
machines or
major components of such machines contributing to a | ||
manufacturing or
assembling process; and (4) "equipment" shall | ||
include any independent
device or tool separate from any | ||
machinery but essential to an
integrated manufacturing or | ||
assembly process; including computers
used primarily in a | ||
manufacturer's computer
assisted design, computer assisted | ||
manufacturing (CAD/CAM) system;
or any subunit or assembly | ||
comprising a component of any machinery or
auxiliary, adjunct | ||
or attachment parts of machinery, such as tools, dies,
jigs, | ||
fixtures, patterns and molds; or any parts which require | ||
periodic
replacement in the course of normal operation; but | ||
shall not include hand
tools.
Equipment includes chemicals or | ||
chemicals acting as catalysts but only if the
chemicals or | ||
chemicals acting as catalysts effect a direct and immediate | ||
change
upon a
product being manufactured or assembled for | ||
wholesale or retail sale or
lease.
The purchaser of such | ||
machinery and equipment who has an active
resale registration | ||
number shall furnish such number to the seller at the
time of | ||
purchase. The user of such machinery and equipment and tools
| ||
without an active resale registration number shall prepare a | ||
certificate of
exemption for each transaction stating facts | ||
establishing the exemption for
that transaction, which | ||
certificate shall be available to the Department
for inspection | ||
or audit. The Department shall prescribe the form of the
| ||
certificate.
| ||
Any informal rulings, opinions or letters issued by the | ||
Department in
response to an inquiry or request for any opinion | ||
from any person
regarding the coverage and applicability of | ||
exemption (5) to specific
devices shall be published, | ||
maintained as a public record, and made
available for public | ||
inspection and copying. If the informal ruling,
opinion or | ||
letter contains trade secrets or other confidential
| ||
information, where possible the Department shall delete such | ||
information
prior to publication. Whenever such informal | ||
rulings, opinions, or
letters contain any policy of general | ||
applicability, the Department
shall formulate and adopt such | ||
policy as a rule in accordance with the
provisions of the | ||
Illinois Administrative Procedure Act.
| ||
On and after July 1, 1987, no entity otherwise eligible | ||
under exemption
(3) of this Section shall make tax-free | ||
purchases unless it has an active
exemption identification | ||
number issued by the Department.
| ||
The purchase, employment and transfer of such tangible | ||
personal
property as newsprint and ink for the primary purpose | ||
of conveying news
(with or without other information) is not a | ||
purchase, use or sale of
service or of tangible personal | ||
property within the meaning of this Act.
| ||
"Serviceman" means any person who is engaged in the | ||
occupation of
making sales of service.
| ||
"Sale at retail" means "sale at retail" as defined in the | ||
Retailers'
Occupation Tax Act.
| ||
"Supplier" means any person who makes sales of tangible | ||
personal
property to servicemen for the purpose of resale as an | ||
incident to a
sale of service.
| ||
"Serviceman maintaining a place of business in this State", | ||
or any
like term, means and includes any serviceman:
| ||
(1) having or maintaining within this State, directly | ||
or by a
subsidiary, an office, distribution house, sales | ||
house, warehouse or
other place of business, or any agent | ||
or other representative operating
within this State under | ||
the authority of the serviceman or its
subsidiary, | ||
irrespective of whether such place of business or agent or
| ||
other representative is located here permanently or | ||
temporarily, or
whether such serviceman or subsidiary is | ||
licensed to do business in this
State; | ||
(1.1) having a contract with a person located in this | ||
State under which the person, for a commission or other | ||
consideration based on the sale of service by the | ||
serviceman, directly or indirectly refers potential | ||
customers to the serviceman by providing to the potential | ||
customers a promotional code or other mechanism that allows | ||
the serviceman to track purchases referred by such persons. | ||
Examples of mechanisms that allow the serviceman to track | ||
purchases referred by such persons include but are not | ||
limited to the use of a link on the person's Internet | ||
website, promotional codes distributed through the | ||
person's hand-delivered or mailed material, and | ||
promotional codes distributed by the person through radio | ||
or other broadcast media. The provisions of this paragraph | ||
(1.1) shall apply only if the cumulative gross receipts | ||
from sales of service by the serviceman to customers who | ||
are referred to the serviceman by all persons in this State | ||
under such contracts exceed $10,000 during the preceding 4 | ||
quarterly periods ending on the last day of March, June, | ||
September, and December; a serviceman meeting the | ||
requirements of this paragraph (1.1) shall be presumed to | ||
be maintaining a place of business in this State but may | ||
rebut this presumption by submitting proof that the | ||
referrals or other activities pursued within this State by | ||
such persons were not sufficient to meet the nexus | ||
standards of the United States Constitution during the | ||
preceding 4 quarterly periods; | ||
(1.2) beginning July 1, 2011, having a contract with a | ||
person located in this State under which: | ||
(A) the serviceman sells the same or substantially | ||
similar line of services as the person located in this | ||
State and does so using an identical or substantially | ||
similar name, trade name, or trademark as the person | ||
located in this State; and | ||
(B) the serviceman provides a commission or other | ||
consideration to the person located in this State based | ||
upon the sale of services by the serviceman. | ||
The provisions of this paragraph (1.2) shall apply only if | ||
the cumulative gross receipts from sales of service by the | ||
serviceman to customers in this State under all such | ||
contracts exceed $10,000 during the preceding 4 quarterly | ||
periods ending on the last day of March, June, September, | ||
and December;
| ||
(2) soliciting orders for tangible personal property | ||
by means of a
telecommunication or television shopping | ||
system (which utilizes toll free
numbers) which is intended | ||
by the retailer to be broadcast by cable
television or | ||
other means of broadcasting, to consumers located in this | ||
State;
| ||
(3) pursuant to a contract with a broadcaster or | ||
publisher located in this
State, soliciting orders for | ||
tangible personal property by means of advertising
which is | ||
disseminated primarily to consumers located in this State | ||
and only
secondarily to bordering jurisdictions;
| ||
(4) soliciting orders for tangible personal property | ||
by mail if the
solicitations are substantial and recurring | ||
and if the retailer benefits
from any banking, financing, | ||
debt collection, telecommunication, or
marketing | ||
activities occurring in this State or benefits from the | ||
location
in this State of authorized installation, | ||
servicing, or repair facilities;
| ||
(5) being owned or controlled by the same interests | ||
which own or
control any retailer engaging in business in | ||
the same or similar line of
business in this State;
| ||
(6) having a franchisee or licensee operating under its | ||
trade name if
the franchisee or licensee is required to | ||
collect the tax under this Section;
| ||
(7) pursuant to a contract with a cable television | ||
operator located in
this State, soliciting orders for | ||
tangible personal property by means of
advertising which is | ||
transmitted or distributed over a cable television
system | ||
in this State;
| ||
(8) engaging in activities in Illinois, which | ||
activities in the
state in which the supply business | ||
engaging in such activities is located
would constitute | ||
maintaining a place of business in that state; or
| ||
(9) beginning October 1, 2018, making sales of service | ||
to purchasers in Illinois from outside of Illinois if: | ||
(A) the cumulative gross receipts from sales of | ||
service to purchasers in Illinois are $100,000 or more; | ||
or | ||
(B) the serviceman enters into 200 or more separate | ||
transactions for sales of service to purchasers in | ||
Illinois. | ||
The serviceman shall determine on a quarterly basis, | ||
ending on the last day of March, June, September, and | ||
December, whether he or she meets the criteria of either | ||
subparagraph (A) or (B) of this paragraph (9) for the | ||
preceding 12-month period. If the serviceman meets the | ||
criteria of either subparagraph (A) or (B) for a 12-month | ||
period, he or she is considered a serviceman maintaining a | ||
place of business in this State and is required to collect | ||
and remit the tax imposed under this Act and file returns | ||
for one year. At the end of that one-year period, the | ||
serviceman shall determine whether the serviceman met the | ||
criteria of either subparagraph (A) or (B) during the | ||
preceding 12-month period. If the serviceman met the | ||
criteria in either subparagraph (A) or (B) for the | ||
preceding 12-month period, he or she is considered a | ||
serviceman maintaining a place of business in this State | ||
and is required to collect and remit the tax imposed under | ||
this Act and file returns for the subsequent year. If at | ||
the end of a one-year period a serviceman that was required | ||
to collect and remit the tax imposed under this Act | ||
determines that he or she did not meet the criteria in | ||
either subparagraph (A) or (B) during the preceding | ||
12-month period, the serviceman subsequently shall | ||
determine on a quarterly basis, ending on the last day of | ||
March, June, September, and December, whether he or she | ||
meets the criteria of either subparagraph (A) or (B) for | ||
the preceding 12-month period. | ||
Beginning January 1, 2020, neither the gross receipts | ||
from nor the number of separate transactions for sales of | ||
service to purchasers in Illinois that a serviceman makes | ||
through a marketplace facilitator and for which the | ||
serviceman has received a certification from the | ||
marketplace facilitator pursuant to Section 2d of this Act | ||
shall be included for purposes of determining whether he or | ||
she has met the thresholds of this paragraph (9). | ||
(10) Beginning January 1, 2020, a marketplace | ||
facilitator, as defined in Section 2d of this Act. | ||
(Source: P.A. 100-22, eff. 7-6-17; 100-321, eff. 8-24-17; | ||
100-587, eff. 6-4-18; 100-863, eff. 8-14-18.)
| ||
(35 ILCS 110/2d new) | ||
Sec. 2d. Marketplace facilitators and marketplace | ||
servicemen. | ||
(a) Definitions. For purposes of this Section: | ||
"Affiliate" means a person that, with respect to another | ||
person: (i) has a direct or indirect ownership interest of more | ||
than 5% in the other person; or (ii) is related to the other | ||
person because a third person, or group of third persons who | ||
are affiliated with each other as defined in this subsection, | ||
holds a direct or indirect ownership interest of more than 5% | ||
in the related person. | ||
"Marketplace" means a physical or electronic place, forum, | ||
platform, application or other method by which a marketplace | ||
serviceman makes or offers to make sales of service. | ||
"Marketplace facilitator" means a person who, pursuant to | ||
an agreement with a marketplace serviceman, facilitates sales | ||
of service by that marketplace serviceman. A person facilitates | ||
a sale of service by, directly or indirectly through one or | ||
more affiliates, doing both of the following: (i) listing or | ||
otherwise making available a sale of service of the marketplace | ||
serviceman through a marketplace owned or operated by the | ||
marketplace facilitator; and (ii) processing sales of service | ||
for, or payments for sales of service by, marketplace | ||
servicemen. | ||
"Marketplace serviceman" means a person that makes or | ||
offers to make a sale of service through a marketplace. | ||
(b) Beginning January 1, 2020, a marketplace facilitator | ||
who meets either of the following criteria is considered the | ||
serviceman for each sale of service made on the marketplace: | ||
(1) the cumulative gross receipts from sales of service | ||
to purchasers in Illinois by the marketplace facilitator | ||
and by marketplace servicemen are $100,000 or more; or | ||
(2) the marketplace facilitator and marketplace | ||
servicemen cumulatively enter into 200 or more separate | ||
transactions for the sale of service to purchasers in | ||
Illinois. | ||
A marketplace facilitator shall determine on a quarterly | ||
basis, ending on the last day of March, June, September, and | ||
December, whether he or she meets the criteria of either | ||
paragraph (1) or (2) of this subsection (b) for the preceding | ||
12-month period. If the marketplace facilitator meets the | ||
criteria of either paragraph (1) or (2) for a 12-month period, | ||
he or she is considered a serviceman maintaining a place of | ||
business in this State and is required to collect and remit the | ||
tax imposed under this Act and file returns for one year. At | ||
the end of that one-year period, the marketplace facilitator | ||
shall determine whether the marketplace facilitator met the | ||
criteria of either paragraph (1) or (2) during the preceding | ||
12-month period. If the marketplace facilitator met the | ||
criteria in either paragraph (1) or (2) for the preceding | ||
12-month period, he or she is considered a serviceman | ||
maintaining a place of business in this State and is required | ||
to collect and remit the tax imposed under this Act and file | ||
returns for the subsequent year. If, at the end of a one-year | ||
period, a marketplace facilitator that was required to collect | ||
and remit the tax imposed under this Act determines that he or | ||
she did not meet the criteria in either paragraph (1) or (2) | ||
during the preceding 12-month period, the marketplace | ||
facilitator shall subsequently determine on a quarterly basis, | ||
ending on the last day of March, June, September, and December, | ||
whether he or she meets the criteria of either paragraph (1) or | ||
(2) for the preceding 12-month period. | ||
(c) A marketplace facilitator that meets either of the | ||
thresholds in subsection (b) of this Section is considered the | ||
serviceman for each sale of service made through its | ||
marketplace and is liable for collecting and remitting the tax | ||
under this Act on all such sales. The marketplace facilitator | ||
has all the rights and duties, and is required to comply with | ||
the same requirements and procedures, as all other servicemen | ||
maintaining a place of business in this State who are | ||
registered or who are required to be registered to collect and | ||
remit the tax imposed by this Act. | ||
(d) A marketplace facilitator shall: | ||
(1) certify to each marketplace serviceman that the | ||
marketplace facilitator assumes the rights and duties of a | ||
serviceman under this Act with respect to sales of service | ||
made by the marketplace serviceman through the | ||
marketplace; and | ||
(2) collect taxes imposed by this Act as required by | ||
Section 3-40 of this Act for sales of service made through | ||
the marketplace. | ||
(e) A marketplace serviceman shall retain books and records | ||
for all sales of service made through a marketplace in | ||
accordance with the requirements of Section 11. | ||
(f) A marketplace serviceman shall furnish to the | ||
marketplace facilitator information that is necessary for the | ||
marketplace facilitator to correctly collect and remit taxes | ||
for a sale of service. The information may include a | ||
certification that an item transferred incident to a sale of | ||
service under this Act is taxable, not taxable, exempt from | ||
taxation, or taxable at a specified rate. A marketplace | ||
serviceman shall be held harmless for liability for the tax | ||
imposed under this Act when a marketplace facilitator fails to | ||
correctly collect and remit tax after having been provided with | ||
information by a marketplace serviceman to correctly collect | ||
and remit taxes imposed under this Act. | ||
(g) Except as provided in subsection (h), if the | ||
marketplace facilitator demonstrates to the satisfaction of | ||
the Department that its failure to correctly collect and remit | ||
tax on a sale of service resulted from the marketplace | ||
facilitator's good faith reliance on incorrect or insufficient | ||
information provided by a marketplace serviceman, it shall be | ||
relieved of liability for the tax on that sale of service. In | ||
this case, a marketplace serviceman is liable for any resulting | ||
tax due. | ||
(h) A marketplace facilitator and marketplace serviceman | ||
that are affiliates, as defined by subsection (a), are jointly | ||
and severally liable for tax liability resulting from a sale of | ||
service made by the affiliated marketplace serviceman through | ||
the marketplace. | ||
(i) This Section does not affect the tax liability of a | ||
purchaser under this Act. | ||
(j) The Department may adopt rules for the administration | ||
and enforcement of the provisions of this Section. | ||
Section 10-35. The Tax Delinquency Amnesty Act is amended | ||
by changing Section 10 as follows:
| ||
(35 ILCS 745/10)
| ||
Sec. 10. Amnesty program. The Department shall establish an | ||
amnesty
program for all taxpayers owing any tax imposed by | ||
reason of or pursuant to
authorization by any law of the State | ||
of Illinois and collected by the
Department.
| ||
The amnesty program shall be for a period from October 1, | ||
2003 through
November 15, 2003 and for a period beginning on | ||
October 1, 2010 and ending November 8, 2010 and for a period | ||
beginning on October 1, 2019 and ending on November 15, 2019.
| ||
The amnesty program shall provide that, upon payment by a | ||
taxpayer of all
taxes
due from that taxpayer to the State of | ||
Illinois for any taxable period ending
(i) after June 30,
1983 | ||
and prior to July 1, 2002 for the tax amnesty period occurring | ||
from October 1, 2003 through
November 15, 2003, and (ii) after | ||
June 30, 2002 and prior to July 1, 2009 for the tax amnesty | ||
period beginning on October 1, 2010 through November 8, 2010, | ||
and (iii) after June 30, 2011 and prior to July 1, 2018 for the | ||
tax amnesty period beginning on October 1, 2019 through | ||
November 15, 2019, the
Department shall abate and not seek to | ||
collect any interest or penalties that
may be
applicable and | ||
the Department shall not seek civil or criminal prosecution for
| ||
any taxpayer for the period of time for which amnesty has been | ||
granted to the
taxpayer. Failure to pay all taxes due to the | ||
State for a taxable period shall
invalidate any
amnesty granted | ||
under this Act. Amnesty shall be granted only if all amnesty
| ||
conditions are
satisfied by the taxpayer.
| ||
Amnesty shall not be granted to taxpayers who are a party | ||
to any criminal
investigation or to any civil or criminal | ||
litigation that is pending in any
circuit court or appellate | ||
court or the Supreme Court of this State for
nonpayment, | ||
delinquency, or fraud in relation to any State tax imposed by | ||
any
law of the State of Illinois.
| ||
Participation in an amnesty program shall not preclude a | ||
taxpayer from claiming a refund for an overpayment of tax on an | ||
issue unrelated to the issues for which the taxpayer claimed | ||
amnesty or for an overpayment of tax by taxpayers estimating a | ||
non-final liability for the amnesty program pursuant to Section | ||
506(b) of the Illinois Income Tax Act (35 ILCS 5/506(b)). | ||
Voluntary payments made under this Act shall be made by | ||
cash, check,
guaranteed remittance, or ACH debit.
| ||
The Department shall adopt rules as necessary to implement | ||
the provisions of
this Act.
| ||
Except as otherwise provided in this Section, all money | ||
collected under this
Act that would otherwise be deposited into | ||
the General Revenue Fund shall be
deposited as
follows: (i) | ||
one-half into the Common School Fund; (ii) one-half into the
| ||
General
Revenue Fund. Two percent of all money collected under | ||
this Act shall be
deposited by
the State Treasurer into the Tax | ||
Compliance and Administration Fund and,
subject to
| ||
appropriation, shall be used by the Department to cover costs | ||
associated with
the administration of this Act.
| ||
(Source: P.A. 96-1435, eff. 8-16-10.)
| ||
Section 10-40. The Health Maintenance Organization Act is | ||
amended by changing Section 5-5 and by adding Section 5-10 as | ||
follows:
| ||
(215 ILCS 125/5-5) (from Ch. 111 1/2, par. 1413)
| ||
Sec. 5-5. Suspension, revocation or denial of | ||
certification of authority. The Director may suspend or revoke | ||
any certificate of authority issued
to a health maintenance | ||
organization under this Act or deny an
application for a | ||
certificate of authority if he finds any of the
following:
| ||
(a) The health maintenance organization is operating | ||
significantly
in contravention of its basic organizational | ||
document, its health care
plan, or in a manner contrary to that | ||
described in any information
submitted under Section 2-1 or | ||
4-12.
| ||
(b) The health maintenance organization issues contracts | ||
or
evidences of coverage or uses a schedule of charges for | ||
health care
services that do not comply with the requirement of | ||
Section 2-1
or 4-12.
| ||
(c) The health care plan does not provide or arrange for | ||
basic health
care services, except as provided in Section 4-13 | ||
concerning mental health
services for clients of the Department | ||
of Children and Family Services.
| ||
(d) The Director of Public Health certifies to the Director | ||
that
(1) the health maintenance organization does not meet the | ||
requirements of
Section 2-2 or (2) the health maintenance | ||
organization is unable to fulfill
its obligations to furnish | ||
health care services as required under its
health care plan. | ||
The Department of Public Health shall promulgate by
rule, | ||
pursuant to the Illinois Administrative Procedure Act, the | ||
precise
standards used for determining what constitutes a | ||
material
misrepresentation, what constitutes a material | ||
violation of a contract or
evidence of coverage, or what | ||
constitutes good faith with regard to
certification under this | ||
paragraph.
| ||
(e) The health maintenance organization is no longer | ||
financially
responsible and may reasonably be expected to be | ||
unable to meet its
obligations to enrollees or prospective | ||
enrollees.
| ||
(f) The health maintenance organization, or any person on | ||
its behalf,
has advertised or merchandised its services in an | ||
untrue, misrepresentative,
misleading, deceptive, or unfair | ||
manner.
| ||
(g) The continued operation of the health maintenance | ||
organization would
be hazardous to its enrollees.
| ||
(h) The health maintenance organization has neglected to | ||
correct, within the
time prescribed by subsection (c) of | ||
Section 2-4, any deficiency occurring due
to the organization's | ||
prescribed minimum net worth or special contingent
reserve | ||
being impaired.
| ||
(i) The health maintenance organization has otherwise | ||
failed to
substantially comply with this Act.
| ||
(j) The health maintenance organization has failed to meet | ||
the
requirements for issuance of a certificate of authority set | ||
forth in
Section 2-2.
| ||
When the certificate of authority of a health maintenance | ||
organization
is revoked, the organization shall proceed, | ||
immediately following the
effective date of the order of | ||
revocation, to wind up its affairs and shall
conduct no further | ||
business except as may be essential to the orderly
conclusion | ||
of the affairs of the organization. The Director may permit | ||
further
operation of the organization that he finds to be in | ||
the best interest of
enrollees to the end that the enrollees | ||
will be afforded the greatest practical
opportunity to obtain | ||
health care services.
| ||
(k) The health maintenance organization has failed to pay | ||
any assessment due under Article V-H of the Public Aid Code for | ||
60 days following the due date of the payment (as extended by | ||
any grace period granted). | ||
(Source: P.A. 88-487.)
| ||
(215 ILCS 125/5-10 new) | ||
Sec. 5-10. Managed care organizations; revenue data. | ||
(a) No managed care organization shall pass the cost of the | ||
assessment imposed pursuant to Article V-H of the Public Aid | ||
Code on to consumers as a discrete addition to their premiums. | ||
(b) The Department shall provide the Department of | ||
Healthcare and Family Services with member months and premium | ||
revenue data needed for implementing the assessment imposed | ||
under Article V-H of the Public Aid Code. | ||
Section 10-45. The Illinois Public Aid Code is amended by | ||
adding the Article V-H as follows: | ||
(305 ILCS 5/Art. V-H heading new) | ||
ARTICLE V-H. MANAGED CARE ORGANIZATION PROVIDER ASSESSMENT. | ||
(305 ILCS 5/5H-1 new) | ||
Sec. 5H-1. Definitions. As used in this Article: | ||
"Base year" means the 12-month period from January 1, 2018 | ||
to December 31, 2018. | ||
"Department" means the Department of Healthcare and Family | ||
Services. | ||
"Federal employee health benefit" means the program of | ||
health benefits plans, as defined in 5 U.S.C. 8901, available | ||
to federal employees under 5 U.S.C. 8901 to 8914. | ||
"Fund" means the Healthcare Provider Relief Fund. | ||
"Managed care organization" means an entity operating | ||
under a certificate of authority issued pursuant to the Health | ||
Maintenance Organization Act or as a Managed Care Community | ||
Network pursuant to Section 5-11 of the Public Aid Code. | ||
"Medicaid managed care organization" means a managed care | ||
organization under contract with the Department to provide | ||
services to recipients of benefits in the medical assistance | ||
program pursuant to Article V of the Public Aid Code, the | ||
Children's Health Insurance Program Act, or the Covering ALL | ||
KIDS Health Insurance Act. It does not include contracts the | ||
same entity or an affiliated entity has for other business. | ||
"Medicare" means the federal Medicare program established | ||
under Title XVIII of the federal Social Security Act. | ||
"Member months" means the aggregate total number of months | ||
all individuals are enrolled for coverage in a Managed Care | ||
Organization during the base year. Member months are determined | ||
by the Department for Medicaid Managed Care Organizations based | ||
on enrollment data in its Medicaid Management Information | ||
System and by the Department of Insurance for other Managed | ||
Care Organizations based on required filings with the | ||
Department of Insurance. Member months do not include months | ||
individuals are enrolled in a Limited Health Services | ||
Organization, including stand-alone dental or vision plans, a | ||
Medicare Advantage Plan, a Medicare Supplement Plan, a Medicaid | ||
Medicare Alignment Initiate Plan pursuant to a Memorandum of | ||
Understanding between the Department and the Federal Centers | ||
for Medicare and Medicaid Services or a Federal Employee Health | ||
Benefits Plan. | ||
(305 ILCS 5/5H-2 new) | ||
Sec. 5H-2. Federal waivers. The Department shall request a | ||
waiver from the federal Centers for Medicare and Medicaid | ||
Services of the broad-based and uniformity provisions of | ||
Section 1903(w)(3)(B) and (C) of Title XIX of the Social | ||
Security Act, 42 U.S.C. 1396b, relating to the assessment | ||
imposed under this Article. The assessment required pursuant to | ||
Section 5H-3 shall not be due and payable until such waiver has | ||
been approved and all other federal requirements necessary to | ||
obtain federal financial participation have been approved by | ||
the Centers for Medicare and Medicaid Services. | ||
(305 ILCS 5/5H-3 new) | ||
Sec. 5H-3. Managed care assessment. | ||
(a) For State Fiscal year 2020 through State Fiscal Year | ||
2025, there is imposed upon managed care organization member | ||
months an assessment, calculated on base year data, as set | ||
forth below for the appropriate tier: | ||
(1) Tier 1: $60.20 per member month. | ||
(2) Tier 2: $1.20 per member month. | ||
(3) Tier 3: $2.40 per member month. | ||
(b) The tiers are established as follows: | ||
(1) Tier 1 includes the first 4,195,000 member months | ||
in a Medicaid managed care organization for the base year; | ||
(ii) Tier 2 includes member months over 4,195,000 in a | ||
Medicaid managed care organization during the base year; | ||
and | ||
(iv) Tier 3 includes member months during the base year | ||
in a managed care organization that is not a Medicaid | ||
managed care organization. | ||
(c) For State fiscal year 2020 through State fiscal year | ||
2025, the Department may by rule adjust rates or tier | ||
parameters or both in order to maximize the revenue generated | ||
by the assessment consistent with federal regulations and to | ||
meet federal statistical tests necessary for federal financial | ||
participation. Any upward adjustment to the Tier 3 rate shall | ||
be the minimum necessary to meet federal statistical tests. | ||
(305 ILCS 5/5H-4 new) | ||
Sec. 5H-4. Payment of assessment. | ||
(a) The assessment payable pursuant to Section 5H-3 shall | ||
be due and payable in monthly installments, each equaling | ||
one-twelfth of the assessment for the year, on the first State | ||
business day of each month. | ||
(b) If the approval of the waivers required under Section | ||
5H-2 is delayed beyond the start of State fiscal year 2020, | ||
then the first installment shall be due on the first business | ||
day of the first month that begins more than 15 days after the | ||
date of such approval. In the event approval results in | ||
installments beginning after July 1, 2019, the amount of each | ||
installment for that fiscal year shall equal the full amount of | ||
the annual assessment divided by the number of payments that | ||
will be paid in fiscal year 2020. | ||
(c) The Department shall notify each managed care | ||
organization of its annual fiscal year 2020 assessment and the | ||
installment due dates no later than 30 days prior to the first | ||
installment due date and the annual assessment and due dates | ||
for each subsequent year at least 30 days prior to the start of | ||
each fiscal year. | ||
(d) Proceeds from the assessment levied pursuant to Section | ||
5H-3 shall be deposited into the Fund. | ||
(305 ILCS 5/5H-5 new) | ||
Sec. 5H-5. Liability or resultant entities. In the event of | ||
a merger, acquisition, or any similar transaction involving | ||
entities subject to the assessment under this Article, the | ||
resultant entity shall be responsible for the full amount of | ||
the assessment for all entities involved in the transaction | ||
with the member months allotted to tiers as they were prior to | ||
the transaction and no member months shall change tiers as a | ||
result of any transaction. A managed care organization that | ||
ceases doing business in the State during any fiscal year shall | ||
be liable only for the monthly installments due in months that | ||
they operated in the State. The Department shall by rule | ||
establish a methodology to set the assessment base member | ||
months for a managed care organization that begins operating in | ||
the State at any time after 2018. Nothing in this Section shall | ||
be construed to limit authority granted in subsection (c) of | ||
Section 5H-3. | ||
(305 ILCS 5/5H-6 new) | ||
Sec. 5H-6. Recordkeeping; penalties. | ||
(a) A managed care organization that is liable for the | ||
assessment under this Article shall keep accurate and complete | ||
records and pertinent documents as may be required by the | ||
Department. Records required by the Department shall be | ||
retained for a period of 4 years after the assessment imposed | ||
under this Act to which the records apply is due or as | ||
otherwise provided by law. The Department or the Department of | ||
Insurance may audit all records necessary to ensure compliance | ||
with this Article and make adjustments to assessment amounts | ||
previously calculated based on the results of any such audit. | ||
(b) If a managed care organization fails to make a payment | ||
due under this Article in a timely fashion, they shall pay an | ||
additional penalty of 5% of the amount of the installment not | ||
paid on or before the due date, or any grace period granted, | ||
plus 5% of the portion thereof remaining unpaid on the last day | ||
of each 30-day period thereafter. The Department is authorized | ||
to grant grace periods of up to 30 days upon request of a | ||
managed care organization for good cause due to financial or | ||
other difficulties, as determined by the Department. If a | ||
managed care organization fails to make a payment within 60 | ||
days after the due date the Department shall additionally | ||
impose a contractual sanction allowed against a Medicaid | ||
managed care organization and may terminate any such contract. | ||
The Department of Insurance shall take action against the | ||
certificate of authority of a non-Medicaid managed care | ||
organization that fails to pay an installment within 60 days | ||
after the due date. | ||
(305 ILCS 5/5H-7 new) | ||
Sec. 5H-7. Rulemaking. The Department may by rule modify or | ||
make adjustments to any methodology, assessment amount, | ||
assessment tier, or other similar provision specified in this | ||
Article, including broadening the tax base in subsection (a) of | ||
Section 5H-3, to the extent necessary to meet the requirements | ||
of federal law or regulations, obtain federal approval, or to | ||
ensure federal financial participation is available. However, | ||
upward adjustments to Tier 3 rates shall be the minimum | ||
necessary to meet federal statistical tests to receive federal | ||
financial participation. The Department shall adopt rules to | ||
implement this Article under the Illinois Administrative | ||
Procedure Act. | ||
(305 ILCS 5/5H-8 new) | ||
Sec. 5H-8. Duties of the Department. | ||
(a) The Department shall ensure that rates to Medicaid | ||
managed care organizations are actuarially sound including | ||
appropriate incorporation of assessments under this Article, | ||
other taxes and administrative expenses, including | ||
standardization of processes, and cost of medical care. | ||
(b) The Department shall pay to each Medicaid managed care | ||
organization the amount required to be included in its rates | ||
due to the assessment under this Article in order to ensure | ||
actuarial soundness within 10 business days of receipt of each | ||
assessment payment from the Medicaid managed care | ||
organization. The Department shall extend the deadline for any | ||
assessment payment due after the initial assessment payment if | ||
the payment to the managed care organizations under this | ||
subsection for the previous assessment payment has not been | ||
paid. Such extension shall extend until 7 business days after | ||
receipt by the managed care organization of the late payment | ||
under this subsection. | ||
(c) Reimbursement of assessments paid under this Article | ||
shall not be required to count as revenue towards any | ||
calculation of the managed care organization's medical loss | ||
ratio, net worth, risk based capital or other deposit | ||
requirements as may otherwise be required under the Insurance | ||
Code. Such reimbursements will be considered revenue in | ||
calculating the 6% limit under 42 U.S.C. 433.68(f)(3). | ||
(d) The Department shall include in its annual report, | ||
beginning with its fiscal year 2020 report, and every year | ||
thereafter, information on the revenues collected from this | ||
assessment, the federal funds drawn based on those revenues, | ||
the rates set in Section 5H-3 or any alterations thereof by | ||
administrative rule, and other impacts this gross revenue has | ||
had on the Medicaid program. | ||
Section 10-50. The Franchise Tax and License Fee Amnesty | ||
Act of 2007 is amended by changing Section 5-10 as follows: | ||
(805 ILCS 8/5-10)
| ||
Sec. 5-10. Amnesty program. The Secretary shall establish | ||
an amnesty program for all taxpayers owing any franchise tax or | ||
license fee imposed by Article XV of the Business Corporation | ||
Act of 1983. The amnesty program shall be for a period from | ||
February 1, 2008 through March 15, 2008. The amnesty program | ||
shall also be for a period between October 1, 2019 and November | ||
15, 2019, and shall apply to franchise tax or license fee | ||
liabilities for any tax period ending after March 15, 2008 and | ||
on or before June 30, 2019. The amnesty program shall provide | ||
that, upon payment by a taxpayer of all franchise taxes and | ||
license fees due from that taxpayer to the State of Illinois | ||
for any taxable period, the Secretary shall abate and not seek | ||
to collect any interest or penalties that may be applicable, | ||
and the Secretary shall not seek civil or criminal prosecution | ||
for any taxpayer for the period of time for which amnesty has | ||
been granted to the taxpayer. Failure to pay all taxes due to | ||
the State for a taxable period shall not invalidate any amnesty | ||
granted under this Act with respect to the taxes paid pursuant | ||
to the amnesty program. Amnesty shall be granted only if all | ||
amnesty conditions are satisfied by the taxpayer. Amnesty shall | ||
not be granted to taxpayers who are a party to any criminal | ||
investigation or to any civil or criminal litigation that is | ||
pending in any circuit court or appellate court or the Supreme | ||
Court of this State for nonpayment, delinquency, or fraud in | ||
relation to any franchise tax or license fee imposed by Article | ||
XV of the Business Corporation Act of 1983. Voluntary payments | ||
made under this Act shall be made by check, guaranteed | ||
remittance, or ACH debit. The Secretary shall adopt rules as | ||
necessary to implement the provisions of this Act. Except as | ||
otherwise provided in this Section, all money collected under | ||
this Act that would otherwise be deposited into the General | ||
Revenue Fund shall be deposited into the General Revenue Fund. | ||
Two percent of all money collected under this Act shall be | ||
deposited by the State Treasurer into the Franchise Tax and | ||
License Fee Amnesty Administration Fund and, subject to | ||
appropriation, shall be used by the Secretary to cover costs | ||
associated with the administration of this Act.
| ||
(Source: P.A. 95-233, eff. 8-16-07; 95-707, eff. 1-11-08.) | ||
ARTICLE 20. BLUE COLLAR JOBS ACT | ||
Section 20-1. This Act may be referred to as the Blue | ||
Collar Jobs Act. | ||
Section 20-5. The Illinois Enterprise Zone Act is amended | ||
by changing Section 5.5 and by adding Section 13 as follows:
| ||
(20 ILCS 655/5.5)
(from Ch. 67 1/2, par. 609.1)
| ||
Sec. 5.5. High Impact Business.
| ||
(a) In order to respond to unique opportunities to assist | ||
in the
encouragement, development, growth and expansion of the | ||
private sector through
large scale investment and development | ||
projects, the Department is authorized
to receive and approve | ||
applications for the designation of "High Impact
Businesses" in | ||
Illinois subject to the following conditions:
| ||
(1) such applications may be submitted at any time | ||
during the year;
| ||
(2) such business is not located, at the time of | ||
designation, in
an enterprise zone designated pursuant to | ||
this Act;
| ||
(3) the business intends to do one or more of the | ||
following:
| ||
(A) the business intends to make a minimum | ||
investment of
$12,000,000 which will be placed in | ||
service in qualified property and
intends to create 500 | ||
full-time equivalent jobs at a designated location
in | ||
Illinois or intends to make a minimum investment of | ||
$30,000,000 which
will be placed in service in | ||
qualified property and intends to retain 1,500
| ||
full-time retained jobs at a designated location in | ||
Illinois.
The business must certify in writing that the | ||
investments would not be
placed in service in qualified | ||
property and the job creation or job
retention would | ||
not occur without the tax credits and exemptions set | ||
forth
in subsection (b) of this Section. The terms | ||
"placed in service" and
"qualified property" have the | ||
same meanings as described in subsection (h)
of Section | ||
201 of the Illinois Income Tax Act; or
| ||
(B) the business intends to establish a new | ||
electric generating
facility at a designated location | ||
in Illinois. "New electric generating
facility", for | ||
purposes of this Section, means a newly-constructed
| ||
electric
generation plant
or a newly-constructed | ||
generation capacity expansion at an existing electric
| ||
generation
plant, including the transmission lines and | ||
associated
equipment that transfers electricity from | ||
points of supply to points of
delivery, and for which | ||
such new foundation construction commenced not sooner
| ||
than July 1,
2001. Such facility shall be designed to | ||
provide baseload electric
generation and shall operate | ||
on a continuous basis throughout the year;
and (i) | ||
shall have an aggregate rated generating capacity of at | ||
least 1,000
megawatts for all new units at one site if | ||
it uses natural gas as its primary
fuel and foundation | ||
construction of the facility is commenced on
or before | ||
December 31, 2004, or shall have an aggregate rated | ||
generating
capacity of at least 400 megawatts for all | ||
new units at one site if it uses
coal or gases derived | ||
from coal
as its primary fuel and
shall support the | ||
creation of at least 150 new Illinois coal mining jobs, | ||
or
(ii) shall be funded through a federal Department of | ||
Energy grant before December 31, 2010 and shall support | ||
the creation of Illinois
coal-mining
jobs, or (iii) | ||
shall use coal gasification or integrated | ||
gasification-combined cycle units
that generate
| ||
electricity or chemicals, or both, and shall support | ||
the creation of Illinois
coal-mining
jobs.
The
| ||
business must certify in writing that the investments | ||
necessary to establish
a new electric generating | ||
facility would not be placed in service and the
job | ||
creation in the case of a coal-fueled plant
would not | ||
occur without the tax credits and exemptions set forth | ||
in
subsection (b-5) of this Section. The term "placed | ||
in service" has
the same meaning as described in | ||
subsection
(h) of Section 201 of the Illinois Income | ||
Tax Act; or
| ||
(B-5) the business intends to establish a new | ||
gasification
facility at a designated location in | ||
Illinois. As used in this Section, "new gasification | ||
facility" means a newly constructed coal gasification | ||
facility that generates chemical feedstocks or | ||
transportation fuels derived from coal (which may | ||
include, but are not limited to, methane, methanol, and | ||
nitrogen fertilizer), that supports the creation or | ||
retention of Illinois coal-mining jobs, and that | ||
qualifies for financial assistance from the Department | ||
before December 31, 2010. A new gasification facility | ||
does not include a pilot project located within | ||
Jefferson County or within a county adjacent to | ||
Jefferson County for synthetic natural gas from coal; | ||
or
| ||
(C) the business intends to establish
production | ||
operations at a new coal mine, re-establish production | ||
operations at
a closed coal mine, or expand production | ||
at an existing coal mine
at a designated location in | ||
Illinois not sooner than July 1, 2001;
provided that | ||
the
production operations result in the creation of 150 | ||
new Illinois coal mining
jobs as described in | ||
subdivision (a)(3)(B) of this Section, and further
| ||
provided that the coal extracted from such mine is | ||
utilized as the predominant
source for a new electric | ||
generating facility.
The business must certify in | ||
writing that the
investments necessary to establish a | ||
new, expanded, or reopened coal mine would
not
be | ||
placed in service and the job creation would not
occur | ||
without the tax credits and exemptions set forth in | ||
subsection (b-5) of
this Section. The term "placed in | ||
service" has
the same meaning as described in | ||
subsection (h) of Section 201 of the
Illinois Income | ||
Tax Act; or
| ||
(D) the business intends to construct new | ||
transmission facilities or
upgrade existing | ||
transmission facilities at designated locations in | ||
Illinois,
for which construction commenced not sooner | ||
than July 1, 2001. For the
purposes of this Section, | ||
"transmission facilities" means transmission lines
| ||
with a voltage rating of 115 kilovolts or above, | ||
including associated
equipment, that transfer | ||
electricity from points of supply to points of
delivery | ||
and that transmit a majority of the electricity | ||
generated by a new
electric generating facility | ||
designated as a High Impact Business in accordance
with | ||
this Section. The business must certify in writing that | ||
the investments
necessary to construct new | ||
transmission facilities or upgrade existing
| ||
transmission facilities would not be placed in service
| ||
without the tax credits and exemptions set forth in | ||
subsection (b-5) of this
Section. The term "placed in | ||
service" has the
same meaning as described in | ||
subsection (h) of Section 201 of the Illinois
Income | ||
Tax Act; or
| ||
(E) the business intends to establish a new wind | ||
power facility at a designated location in Illinois. | ||
For purposes of this Section, "new wind power facility" | ||
means a newly constructed electric generation | ||
facility, or a newly constructed expansion of an | ||
existing electric generation facility, placed in | ||
service on or after July 1, 2009, that generates | ||
electricity using wind energy devices, and such | ||
facility shall be deemed to include all associated | ||
transmission lines, substations, and other equipment | ||
related to the generation of electricity from wind | ||
energy devices. For purposes of this Section, "wind | ||
energy device" means any device, with a nameplate | ||
capacity of at least 0.5 megawatts, that is used in the | ||
process of converting kinetic energy from the wind to | ||
generate electricity; or | ||
(F) the business commits to (i) make a minimum | ||
investment of $500,000,000, which will be placed in | ||
service in a qualified property, (ii) create 125 | ||
full-time equivalent jobs at a designated location in | ||
Illinois, (iii) establish a fertilizer plant at a | ||
designated location in Illinois that complies with the | ||
set-back standards as described in Table 1: Initial | ||
Isolation and Protective Action Distances in the 2012 | ||
Emergency Response Guidebook published by the United | ||
States Department of Transportation, (iv) pay a | ||
prevailing wage for employees at that location who are | ||
engaged in construction activities, and (v) secure an | ||
appropriate level of general liability insurance to | ||
protect against catastrophic failure of the fertilizer | ||
plant or any of its constituent systems; in addition, | ||
the business must agree to enter into a construction | ||
project labor agreement including provisions | ||
establishing wages, benefits, and other compensation | ||
for employees performing work under the project labor | ||
agreement at that location; for the purposes of this | ||
Section, "fertilizer plant" means a newly constructed | ||
or upgraded plant utilizing gas used in the production | ||
of anhydrous ammonia and downstream nitrogen | ||
fertilizer products for resale; for the purposes of | ||
this Section, "prevailing wage" means the hourly cash | ||
wages plus fringe benefits for training and
| ||
apprenticeship programs approved by the U.S. | ||
Department of Labor, Bureau of
Apprenticeship and | ||
Training, health and welfare, insurance, vacations and
| ||
pensions paid generally, in the
locality in which the | ||
work is being performed, to employees engaged in
work | ||
of a similar character on public works; this paragraph | ||
(F) applies only to businesses that submit an | ||
application to the Department within 60 days after the | ||
effective date of this amendatory Act of the 98th | ||
General Assembly; and
| ||
(4) no later than 90 days after an application is | ||
submitted, the
Department shall notify the applicant of the | ||
Department's determination of
the qualification of the | ||
proposed High Impact Business under this Section.
| ||
(b) Businesses designated as High Impact Businesses | ||
pursuant to
subdivision (a)(3)(A) of this Section shall qualify | ||
for the credits and
exemptions described in the
following Acts: | ||
Section 9-222 and Section 9-222.1A of the Public Utilities
Act,
| ||
subsection (h)
of Section 201 of the Illinois Income Tax Act,
| ||
and Section 1d of
the
Retailers' Occupation Tax Act; provided | ||
that these credits and
exemptions
described in these Acts shall | ||
not be authorized until the minimum
investments set forth in | ||
subdivision (a)(3)(A) of this
Section have been placed in
| ||
service in qualified properties and, in the case of the | ||
exemptions
described in the Public Utilities Act and Section 1d | ||
of the Retailers'
Occupation Tax Act, the minimum full-time | ||
equivalent jobs or full-time retained jobs set
forth in | ||
subdivision (a)(3)(A) of this Section have been
created or | ||
retained.
Businesses designated as High Impact Businesses | ||
under
this Section shall also
qualify for the exemption | ||
described in Section 5l of the Retailers' Occupation
Tax Act. | ||
The credit provided in subsection (h) of Section 201 of the | ||
Illinois
Income Tax Act shall be applicable to investments in | ||
qualified property as set
forth in subdivision (a)(3)(A) of | ||
this Section.
| ||
(b-5) Businesses designated as High Impact Businesses | ||
pursuant to
subdivisions (a)(3)(B), (a)(3)(B-5), (a)(3)(C), | ||
and (a)(3)(D) of this Section shall qualify
for the credits and | ||
exemptions described in the following Acts: Section 51 of
the | ||
Retailers' Occupation Tax Act, Section 9-222 and Section | ||
9-222.1A of the
Public Utilities Act, and subsection (h) of | ||
Section 201 of the Illinois Income
Tax Act; however, the | ||
credits and exemptions authorized under Section 9-222 and
| ||
Section 9-222.1A of the Public Utilities Act, and subsection | ||
(h) of Section 201
of the Illinois Income Tax Act shall not be | ||
authorized until the new electric
generating facility, the new | ||
gasification facility, the new transmission facility, or the | ||
new, expanded, or
reopened coal mine is operational,
except | ||
that a new electric generating facility whose primary fuel | ||
source is
natural gas is eligible only for the exemption under | ||
Section 5l of the
Retailers' Occupation Tax Act.
| ||
(b-6) Businesses designated as High Impact Businesses | ||
pursuant to subdivision (a)(3)(E) of this Section shall qualify | ||
for the exemptions described in Section 5l of the Retailers' | ||
Occupation Tax Act; any business so designated as a High Impact | ||
Business being, for purposes of this Section, a "Wind Energy | ||
Business". | ||
(b-7) Beginning on January 1, 2021, businesses designated | ||
as High Impact Businesses by the Department shall qualify for | ||
the High Impact Business construction jobs credit under | ||
subsection (h-5) of Section 201 of the Illinois Income Tax Act | ||
if the business meets the criteria set forth in subsection (i) | ||
of this Section. The total aggregate amount of credits awarded | ||
under the Blue Collar Jobs Act (Article 20 of this amendatory | ||
Act of the 101st General Assembly) shall not exceed $20,000,000 | ||
in any State fiscal year. | ||
(c) High Impact Businesses located in federally designated | ||
foreign trade
zones or sub-zones are also eligible for | ||
additional credits, exemptions and
deductions as described in | ||
the following Acts: Section 9-221 and Section
9-222.1 of the | ||
Public
Utilities Act; and subsection (g) of Section 201, and | ||
Section 203
of the Illinois Income Tax Act.
| ||
(d) Except for businesses contemplated under subdivision | ||
(a)(3)(E) of this Section, existing Illinois businesses which | ||
apply for designation as a
High Impact Business must provide | ||
the Department with the prospective plan
for which 1,500 | ||
full-time retained jobs would be eliminated in the event that | ||
the
business is not designated.
| ||
(e) Except for new wind power facilities contemplated under | ||
subdivision (a)(3)(E) of this Section, new proposed facilities | ||
which apply for designation as High Impact
Business must | ||
provide the Department with proof of alternative non-Illinois
| ||
sites which would receive the proposed investment and job | ||
creation in the
event that the business is not designated as a | ||
High Impact Business.
| ||
(f) Except for businesses contemplated under subdivision | ||
(a)(3)(E) of this Section, in the event that a business is | ||
designated a High Impact Business
and it is later determined | ||
after reasonable notice and an opportunity for a
hearing as | ||
provided under the Illinois Administrative Procedure Act, that
| ||
the business would have placed in service in qualified property | ||
the
investments and created or retained the requisite number of | ||
jobs without
the benefits of the High Impact Business | ||
designation, the Department shall
be required to immediately | ||
revoke the designation and notify the Director
of the | ||
Department of Revenue who shall begin proceedings to recover | ||
all
wrongfully exempted State taxes with interest. The business | ||
shall also be
ineligible for all State funded Department | ||
programs for a period of 10 years.
| ||
(g) The Department shall revoke a High Impact Business | ||
designation if
the participating business fails to comply with | ||
the terms and conditions of
the designation. However, the | ||
penalties for new wind power facilities or Wind Energy | ||
Businesses for failure to comply with any of the terms or | ||
conditions of the Illinois Prevailing Wage Act shall be only | ||
those penalties identified in the Illinois Prevailing Wage Act, | ||
and the Department shall not revoke a High Impact Business | ||
designation as a result of the failure to comply with any of | ||
the terms or conditions of the Illinois Prevailing Wage Act in | ||
relation to a new wind power facility or a Wind Energy | ||
Business.
| ||
(h) Prior to designating a business, the Department shall | ||
provide the
members of the General Assembly and Commission on | ||
Government Forecasting and Accountability
with a report | ||
setting forth the terms and conditions of the designation and
| ||
guarantees that have been received by the Department in | ||
relation to the
proposed business being designated.
| ||
(i) High Impact Business construction jobs credit. | ||
Beginning on January 1, 2021, a High Impact Business may | ||
receive a tax credit against the tax imposed under subsections | ||
(a) and (b) of Section 201 of the Illinois Income Tax Act in an | ||
amount equal to 50% of the amount of the incremental income tax | ||
attributable to High Impact Business construction jobs credit | ||
employees employed in the course of completing a High Impact | ||
Business construction jobs project. However, the High Impact | ||
Business construction jobs credit may equal 75% of the amount | ||
of the incremental income tax attributable to High Impact | ||
Business construction jobs credit employees if the High Impact | ||
Business construction jobs credit project is located in an | ||
underserved area. | ||
The Department shall certify to the Department of Revenue: | ||
(1) the identity of taxpayers that are eligible for the High | ||
Impact Business construction jobs credit; and (2) the amount of | ||
High Impact Business construction jobs credits that are claimed | ||
pursuant to subsection (h-5) of Section 201 of the Illinois | ||
Income Tax Act in each taxable year. Any business entity that | ||
receives a High Impact Business construction jobs credit shall | ||
maintain a certified payroll pursuant to subsection (j) of this | ||
Section. | ||
As used in this subsection (i): | ||
"High Impact Business construction jobs credit" means an | ||
amount equal to 50% (or 75% if the High Impact Business | ||
construction project is located in an underserved area) of the | ||
incremental income tax attributable to High Impact Business | ||
construction job employees. The total aggregate amount of | ||
credits awarded under the Blue Collar Jobs Act (Article 20 of | ||
this amendatory Act of the 101st General Assembly) shall not | ||
exceed $20,000,000 in any State fiscal year | ||
"High Impact Business construction job employee" means a | ||
laborer or worker who is employed by an Illinois contractor or | ||
subcontractor in the actual construction work on the site of a | ||
High Impact Business construction job project. | ||
"High Impact Business construction jobs project" means | ||
building a structure or building or making improvements of any | ||
kind to real property, undertaken and commissioned by a | ||
business that was designated as a High Impact Business by the | ||
Department. The term "High Impact Business construction jobs | ||
project" does not include the routine operation, routine | ||
repair, or routine maintenance of existing structures, | ||
buildings, or real property. | ||
"Incremental income tax" means the total amount withheld | ||
during the taxable year from the compensation of High Impact | ||
Business construction job employees. | ||
"Underserved area" means a geographic area that meets one | ||
or more of the following conditions: | ||
(1) the area has a poverty rate of at least 20% | ||
according to the latest federal decennial census; | ||
(2) 75% or more of the children in the area participate | ||
in the federal free lunch program according to reported | ||
statistics from the State Board of Education; | ||
(3) at least 20% of the households in the area receive | ||
assistance under the Supplemental Nutrition Assistance | ||
Program (SNAP); or | ||
(4) the area has an average unemployment rate, as | ||
determined by the Illinois Department of Employment | ||
Security, that is more than 120% of the national | ||
unemployment average, as determined by the U.S. Department | ||
of Labor, for a period of at least 2 consecutive calendar | ||
years preceding the date of the application. | ||
(j) Each contractor and subcontractor who is engaged in and | ||
executing a High Impact Business Construction jobs project, as | ||
defined under subsection (i) of this Section, for a business | ||
that is entitled to a credit pursuant to subsection (i) of this | ||
Section shall: | ||
(1) make and keep, for a period of 5 years from the | ||
date of the last payment made on or after the effective | ||
date of this amendatory Act of the 101st General Assembly | ||
on a contract or subcontract for a High Impact Business | ||
Construction Jobs Project, records for all laborers and | ||
other workers employed by the contractor or subcontractor | ||
on the project; the records shall include: | ||
(A) the worker's name; | ||
(B) the worker's address; | ||
(C) the worker's telephone number, if available; | ||
(D) the worker's social security number; | ||
(E) the worker's classification or | ||
classifications; | ||
(F) the worker's gross and net wages paid in each | ||
pay period; | ||
(G) the worker's number of hours worked each day; | ||
(H) the worker's starting and ending times of work | ||
each day; | ||
(I) the worker's hourly wage rate; and | ||
(J) the worker's hourly overtime wage rate; | ||
(2) no later than the 15th day of each calendar month, | ||
provide a certified payroll for the immediately preceding | ||
month to the taxpayer in charge of the High Impact Business | ||
construction jobs project; within 5 business days after | ||
receiving the certified payroll, the taxpayer shall file | ||
the certified payroll with the Department of Labor and the | ||
Department of Commerce and Economic Opportunity; a | ||
certified payroll must be filed for only those calendar | ||
months during which construction on a High Impact Business | ||
construction jobs project has occurred; the certified | ||
payroll shall consist of a complete copy of the records | ||
identified in paragraph (1) of this subsection (j), but may | ||
exclude the starting and ending times of work each day; the | ||
certified payroll shall be accompanied by a statement | ||
signed by the contractor or subcontractor or an officer, | ||
employee, or agent of the contractor or subcontractor which | ||
avers that: | ||
(A) he or she has examined the certified payroll | ||
records required to be submitted by the Act and such | ||
records are true and accurate; and | ||
(B) the contractor or subcontractor is aware that | ||
filing a certified payroll that he or she knows to be | ||
false is a Class A misdemeanor. | ||
A general contractor is not prohibited from relying on a | ||
certified payroll of a lower-tier subcontractor, provided the | ||
general contractor does not knowingly rely upon a | ||
subcontractor's false certification. | ||
Any contractor or subcontractor subject to this | ||
subsection, and any officer, employee, or agent of such | ||
contractor or subcontractor whose duty as an officer, employee, | ||
or agent it is to file a certified payroll under this | ||
subsection, who willfully fails to file such a certified | ||
payroll on or before the date such certified payroll is | ||
required by this paragraph to be filed and any person who | ||
willfully files a false certified payroll that is false as to | ||
any material fact is in violation of this Act and guilty of a | ||
Class A misdemeanor. | ||
The taxpayer in charge of the project shall keep the | ||
records submitted in accordance with this subsection on or | ||
after the effective date of this amendatory Act of the 101st | ||
General Assembly for a period of 5 years from the date of the | ||
last payment for work on a contract or subcontract for the High | ||
Impact Business construction jobs project. | ||
The records submitted in accordance with this subsection | ||
shall be considered public records, except an employee's | ||
address, telephone number, and social security number, and made | ||
available in accordance with the Freedom of Information Act. | ||
The Department of Labor shall accept any reasonable submissions | ||
by the contractor that meet the requirements of this subsection | ||
(j) and shall share the information with the Department in | ||
order to comply with the awarding of a High Impact Business | ||
construction jobs credit. A contractor, subcontractor, or | ||
public body may retain records required under this Section in | ||
paper or electronic format. | ||
(k) Upon 7 business days' notice, each contractor and | ||
subcontractor shall make available for inspection and copying | ||
at a location within this State during reasonable hours, the | ||
records identified in this subsection (j) to the taxpayer in | ||
charge of the High Impact Business construction jobs project, | ||
its officers and agents, the Director of the Department of | ||
Labor and his deputies and agents, and to federal, State, or | ||
local law enforcement agencies and prosecutors. | ||
(Source: P.A. 97-905, eff. 8-7-12; 98-109, eff. 7-25-13.)
| ||
(20 ILCS 655/13 new) | ||
Sec. 13. Enterprise Zone construction jobs credit. | ||
(a) Beginning on January 1, 2021, a business entity in a | ||
certified Enterprise Zone that makes a capital investment of at | ||
least $10,000,000 in an Enterprise Zone construction jobs | ||
project may receive an Enterprise Zone construction jobs credit | ||
against the tax imposed under subsections (a) and (b) of | ||
Section 201 of the Illinois Income Tax Act in an amount equal | ||
to 50% of the amount of the incremental income tax attributable | ||
to Enterprise Zone construction jobs credit employees employed | ||
in the course of completing an Enterprise Zone construction | ||
jobs project. However, the Enterprise Zone construction jobs | ||
credit may equal 75% of the amount of the incremental income | ||
tax attributable to Enterprise Zone construction jobs credit | ||
employees if the project is located in an underserved area. | ||
(b) A business entity seeking a credit under this Section | ||
must submit an application to the Department and must receive | ||
approval from the designating municipality or county and the | ||
Department for the Enterprise Zone construction jobs credit | ||
project. The application must describe the nature and benefit | ||
of the project to the certified Enterprise Zone and its | ||
potential contributors. The total aggregate amount of credits | ||
awarded under the Blue Collar Jobs Act (Article 20 of this | ||
amendatory Act of the 101st General Assembly) shall not exceed | ||
$20,000,000 in any State fiscal year. | ||
Within 45 days after receipt of an application, the | ||
Department shall give notice to the applicant as to whether the | ||
application has been approved or disapproved. If the Department | ||
disapproves the application, it shall specify the reasons for | ||
this decision and allow 60 days for the applicant to amend and | ||
resubmit its application. The Department shall provide | ||
assistance upon request to applicants. Resubmitted | ||
applications shall receive the Department's approval or | ||
disapproval within 30 days after the application is | ||
resubmitted. Those resubmitted applications satisfying initial | ||
Department objectives shall be approved unless reasonable | ||
circumstances warrant disapproval. | ||
On an annual basis, the designated zone organization shall | ||
furnish a statement to the Department on the programmatic and | ||
financial status of any approved project and an audited | ||
financial statement of the project. | ||
The Department shall certify to the Department of Revenue | ||
the identity of taxpayers who are eligible for the credits and | ||
the amount of credits that are claimed pursuant to subparagraph | ||
(8) of subsection (f) of Section 201 the Illinois Income Tax | ||
Act. | ||
The Enterprise Zone construction jobs credit project must | ||
be undertaken by the business entity in the course of | ||
completing a project that complies with the criteria contained | ||
in Section 4 of this Act and is undertaken in a certified | ||
Enterprise Zone. The Department shall adopt any necessary rules | ||
for the implementation of this subsection (b). | ||
(c) Any business entity that receives an Enterprise Zone | ||
construction jobs credit shall maintain a certified payroll | ||
pursuant to subsection (d) of this Section. | ||
(d) Each contractor and subcontractor who is engaged in and | ||
is executing an Enterprise Zone Construction jobs credit | ||
project for a business that is entitled to a credit pursuant to | ||
this Section shall: | ||
(1) make and keep, for a period of 5 years from the | ||
date of the last payment made on or after the effective | ||
date of this amendatory Act of the 101st General Assembly | ||
on a contract or subcontract for an Enterprise Zone | ||
construction jobs credit project, records for all laborers | ||
and other workers employed by them on the project; the | ||
records shall include: | ||
(A) the worker's name; | ||
(B) the worker's address; | ||
(C) the worker's telephone number, if available; | ||
(D) the worker's social security number; | ||
(E) the worker's classification or | ||
classifications; | ||
(F) the worker's gross and net wages paid in each | ||
pay period; | ||
(G) the worker's number of hours worked each day; | ||
(H) the worker's starting and ending times of work | ||
each day; | ||
(I) the worker's hourly wage rate; and | ||
(J) the worker's hourly overtime wage rate; | ||
(2) no later than the 15th day of each calendar month, | ||
provide a certified payroll for the immediately preceding | ||
month to the taxpayer in charge of the project; within 5 | ||
business days after receiving the certified payroll, the | ||
taxpayer shall file the certified payroll with the | ||
Department of Labor and the Department of Commerce and | ||
Economic Opportunity; a certified payroll must be filed for | ||
only those calendar months during which construction on an | ||
Enterprise Zone construction jobs project has occurred; | ||
the certified payroll shall consist of a complete copy of | ||
the records identified in paragraph (1) of this subsection | ||
(d), but may exclude the starting and ending times of work | ||
each day; the certified payroll shall be accompanied by a | ||
statement signed by the contractor or subcontractor or an | ||
officer, employee, or agent of the contractor or | ||
subcontractor which avers that: | ||
(A) he or she has examined the certified payroll | ||
records required to be submitted by the Act and such | ||
records are true and accurate; and | ||
(B) the contractor or subcontractor is aware that | ||
filing a certified payroll that he or she knows to be | ||
false is a Class A misdemeanor. | ||
A general contractor is not prohibited from relying on a | ||
certified payroll of a lower-tier subcontractor, provided the | ||
general contractor does not knowingly rely upon a | ||
subcontractor's false certification. | ||
Any contractor or subcontractor subject to this | ||
subsection, and any officer, employee, or agent of such | ||
contractor or subcontractor whose duty as an officer, employee, | ||
or agent it is to file a certified payroll under this | ||
subsection, who willfully fails to file such a certified | ||
payroll on or before the date such certified payroll is | ||
required by this paragraph to be filed and any person who | ||
willfully files a false certified payroll that is false as to | ||
any material fact is in violation of this Act and guilty of a | ||
Class A misdemeanor. | ||
The taxpayer in charge of the project shall keep the | ||
records submitted in accordance with this subsection on or | ||
after the effective date of this amendatory Act of the 101st | ||
General Assembly for a period of 5 years from the date of the | ||
last payment for work on a contract or subcontract for the | ||
project. | ||
The records submitted in accordance with this subsection | ||
shall be considered public records, except an employee's | ||
address, telephone number, and social security number, and made | ||
available in accordance with the Freedom of Information Act. | ||
The Department of Labor shall accept any reasonable submissions | ||
by the contractor that meet the requirements of this subsection | ||
and shall share the information with the Department in order to | ||
comply with the awarding of Enterprise Zone construction jobs | ||
credits. A contractor, subcontractor, or public body may retain | ||
records required under this Section in paper or electronic | ||
format. | ||
Upon 7 business days' notice, the contractor and each | ||
subcontractor shall make available for inspection and copying | ||
at a location within this State during reasonable hours, the | ||
records identified in paragraph (1) of this subsection to the | ||
taxpayer in charge of the project, its officers and agents, the | ||
Director of Labor and his deputies and agents, and to federal, | ||
State, or local law enforcement agencies and prosecutors. | ||
(e) As used in this Section: | ||
"Enterprise Zone construction jobs credit" means an amount | ||
equal to 50% (or 75% if the project is located in an | ||
underserved area) of the incremental income tax attributable to | ||
Enterprise Zone construction jobs credit employees. | ||
"Enterprise Zone construction jobs credit employee" means | ||
a laborer or worker who is employed by an Illinois contractor | ||
or subcontractor in the actual construction work on the site of | ||
an Enterprise Zone construction jobs credit project. | ||
"Enterprise Zone construction jobs credit project" means | ||
building a structure or building or making improvements of any | ||
kind to real property commissioned and paid for by a business | ||
that has applied and been approved for an Enterprise Zone | ||
construction jobs credit pursuant to this Section. "Enterprise | ||
Zone construction jobs credit project" does not include the | ||
routine operation, routine repair, or routine maintenance of | ||
existing structures, buildings, or real property. | ||
"Incremental income tax" means the total amount withheld | ||
during the taxable year from the compensation of Enterprise | ||
Zone construction jobs credit employees. | ||
"Underserved area" means a geographic area that meets one | ||
or more of the following conditions: | ||
(1) the area has a poverty rate of at least 20% | ||
according to the latest federal decennial census; | ||
(2) 75% or more of the children in the area participate | ||
in the federal free lunch program according to reported | ||
statistics from the State Board of Education; | ||
(3) at least 20% of the households in the area receive | ||
assistance under the Supplemental Nutrition Assistance | ||
Program (SNAP); or | ||
(4) the area has an average unemployment rate, as | ||
determined by the Illinois Department of Employment | ||
Security, that is more than 120% of the national | ||
unemployment average, as determined by the U.S. Department | ||
of Labor, for a period of at least 2 consecutive calendar | ||
years preceding the date of the application. | ||
Section 20-10. The Illinois Income Tax Act is amended by | ||
changing Sections 201, 211, and 221 as follows: | ||
(35 ILCS 5/201) (from Ch. 120, par. 2-201) | ||
Sec. 201. Tax imposed. | ||
(a) In general. A tax measured by net income is hereby | ||
imposed on every
individual, corporation, trust and estate for | ||
each taxable year ending
after July 31, 1969 on the privilege | ||
of earning or receiving income in or
as a resident of this | ||
State. Such tax shall be in addition to all other
occupation or | ||
privilege taxes imposed by this State or by any municipal
| ||
corporation or political subdivision thereof. | ||
(b) Rates. The tax imposed by subsection (a) of this | ||
Section shall be
determined as follows, except as adjusted by | ||
subsection (d-1): | ||
(1) In the case of an individual, trust or estate, for | ||
taxable years
ending prior to July 1, 1989, an amount equal | ||
to 2 1/2% of the taxpayer's
net income for the taxable | ||
year. | ||
(2) In the case of an individual, trust or estate, for | ||
taxable years
beginning prior to July 1, 1989 and ending | ||
after June 30, 1989, an amount
equal to the sum of (i) 2 | ||
1/2% of the taxpayer's net income for the period
prior to | ||
July 1, 1989, as calculated under Section 202.3, and (ii) | ||
3% of the
taxpayer's net income for the period after June | ||
30, 1989, as calculated
under Section 202.3. | ||
(3) In the case of an individual, trust or estate, for | ||
taxable years
beginning after June 30, 1989, and ending | ||
prior to January 1, 2011, an amount equal to 3% of the | ||
taxpayer's net
income for the taxable year. | ||
(4) In the case of an individual, trust, or estate, for | ||
taxable years beginning prior to January 1, 2011, and | ||
ending after December 31, 2010, an amount equal to the sum | ||
of (i) 3% of the taxpayer's net income for the period prior | ||
to January 1, 2011, as calculated under Section 202.5, and | ||
(ii) 5% of the taxpayer's net income for the period after | ||
December 31, 2010, as calculated under Section 202.5. | ||
(5) In the case of an individual, trust, or estate, for | ||
taxable years beginning on or after January 1, 2011, and | ||
ending prior to January 1, 2015, an amount equal to 5% of | ||
the taxpayer's net income for the taxable year. | ||
(5.1) In the case of an individual, trust, or estate, | ||
for taxable years beginning prior to January 1, 2015, and | ||
ending after December 31, 2014, an amount equal to the sum | ||
of (i) 5% of the taxpayer's net income for the period prior | ||
to January 1, 2015, as calculated under Section 202.5, and | ||
(ii) 3.75% of the taxpayer's net income for the period | ||
after December 31, 2014, as calculated under Section 202.5. | ||
(5.2) In the case of an individual, trust, or estate, | ||
for taxable years beginning on or after January 1, 2015, | ||
and ending prior to July 1, 2017, an amount equal to 3.75% | ||
of the taxpayer's net income for the taxable year. | ||
(5.3) In the case of an individual, trust, or estate, | ||
for taxable years beginning prior to July 1, 2017, and | ||
ending after June 30, 2017, an amount equal to the sum of | ||
(i) 3.75% of the taxpayer's net income for the period prior | ||
to July 1, 2017, as calculated under Section 202.5, and | ||
(ii) 4.95% of the taxpayer's net income for the period | ||
after June 30, 2017, as calculated under Section 202.5. | ||
(5.4) In the case of an individual, trust, or estate, | ||
for taxable years beginning on or after July 1, 2017, an | ||
amount equal to 4.95% of the taxpayer's net income for the | ||
taxable year. | ||
(6) In the case of a corporation, for taxable years
| ||
ending prior to July 1, 1989, an amount equal to 4% of the
| ||
taxpayer's net income for the taxable year. | ||
(7) In the case of a corporation, for taxable years | ||
beginning prior to
July 1, 1989 and ending after June 30, | ||
1989, an amount equal to the sum of
(i) 4% of the | ||
taxpayer's net income for the period prior to July 1, 1989,
| ||
as calculated under Section 202.3, and (ii) 4.8% of the | ||
taxpayer's net
income for the period after June 30, 1989, | ||
as calculated under Section
202.3. | ||
(8) In the case of a corporation, for taxable years | ||
beginning after
June 30, 1989, and ending prior to January | ||
1, 2011, an amount equal to 4.8% of the taxpayer's net | ||
income for the
taxable year. | ||
(9) In the case of a corporation, for taxable years | ||
beginning prior to January 1, 2011, and ending after | ||
December 31, 2010, an amount equal to the sum of (i) 4.8% | ||
of the taxpayer's net income for the period prior to | ||
January 1, 2011, as calculated under Section 202.5, and | ||
(ii) 7% of the taxpayer's net income for the period after | ||
December 31, 2010, as calculated under Section 202.5. | ||
(10) In the case of a corporation, for taxable years | ||
beginning on or after January 1, 2011, and ending prior to | ||
January 1, 2015, an amount equal to 7% of the taxpayer's | ||
net income for the taxable year. | ||
(11) In the case of a corporation, for taxable years | ||
beginning prior to January 1, 2015, and ending after | ||
December 31, 2014, an amount equal to the sum of (i) 7% of | ||
the taxpayer's net income for the period prior to January | ||
1, 2015, as calculated under Section 202.5, and (ii) 5.25% | ||
of the taxpayer's net income for the period after December | ||
31, 2014, as calculated under Section 202.5. | ||
(12) In the case of a corporation, for taxable years | ||
beginning on or after January 1, 2015, and ending prior to | ||
July 1, 2017, an amount equal to 5.25% of the taxpayer's | ||
net income for the taxable year. | ||
(13) In the case of a corporation, for taxable years | ||
beginning prior to July 1, 2017, and ending after June 30, | ||
2017, an amount equal to the sum of (i) 5.25% of the | ||
taxpayer's net income for the period prior to July 1, 2017, | ||
as calculated under Section 202.5, and (ii) 7% of the | ||
taxpayer's net income for the period after June 30, 2017, | ||
as calculated under Section 202.5. | ||
(14) In the case of a corporation, for taxable years | ||
beginning on or after July 1, 2017, an amount equal to 7% | ||
of the taxpayer's net income for the taxable year. | ||
The rates under this subsection (b) are subject to the | ||
provisions of Section 201.5. | ||
(c) Personal Property Tax Replacement Income Tax.
| ||
Beginning on July 1, 1979 and thereafter, in addition to such | ||
income
tax, there is also hereby imposed the Personal Property | ||
Tax Replacement
Income Tax measured by net income on every | ||
corporation (including Subchapter
S corporations), partnership | ||
and trust, for each taxable year ending after
June 30, 1979. | ||
Such taxes are imposed on the privilege of earning or
receiving | ||
income in or as a resident of this State. The Personal Property
| ||
Tax Replacement Income Tax shall be in addition to the income | ||
tax imposed
by subsections (a) and (b) of this Section and in | ||
addition to all other
occupation or privilege taxes imposed by | ||
this State or by any municipal
corporation or political | ||
subdivision thereof. | ||
(d) Additional Personal Property Tax Replacement Income | ||
Tax Rates.
The personal property tax replacement income tax | ||
imposed by this subsection
and subsection (c) of this Section | ||
in the case of a corporation, other
than a Subchapter S | ||
corporation and except as adjusted by subsection (d-1),
shall | ||
be an additional amount equal to
2.85% of such taxpayer's net | ||
income for the taxable year, except that
beginning on January | ||
1, 1981, and thereafter, the rate of 2.85% specified
in this | ||
subsection shall be reduced to 2.5%, and in the case of a
| ||
partnership, trust or a Subchapter S corporation shall be an | ||
additional
amount equal to 1.5% of such taxpayer's net income | ||
for the taxable year. | ||
(d-1) Rate reduction for certain foreign insurers. In the | ||
case of a
foreign insurer, as defined by Section 35A-5 of the | ||
Illinois Insurance Code,
whose state or country of domicile | ||
imposes on insurers domiciled in Illinois
a retaliatory tax | ||
(excluding any insurer
whose premiums from reinsurance assumed | ||
are 50% or more of its total insurance
premiums as determined | ||
under paragraph (2) of subsection (b) of Section 304,
except | ||
that for purposes of this determination premiums from | ||
reinsurance do
not include premiums from inter-affiliate | ||
reinsurance arrangements),
beginning with taxable years ending | ||
on or after December 31, 1999,
the sum of
the rates of tax | ||
imposed by subsections (b) and (d) shall be reduced (but not
| ||
increased) to the rate at which the total amount of tax imposed | ||
under this Act,
net of all credits allowed under this Act, | ||
shall equal (i) the total amount of
tax that would be imposed | ||
on the foreign insurer's net income allocable to
Illinois for | ||
the taxable year by such foreign insurer's state or country of
| ||
domicile if that net income were subject to all income taxes | ||
and taxes
measured by net income imposed by such foreign | ||
insurer's state or country of
domicile, net of all credits | ||
allowed or (ii) a rate of zero if no such tax is
imposed on such | ||
income by the foreign insurer's state of domicile.
For the | ||
purposes of this subsection (d-1), an inter-affiliate includes | ||
a
mutual insurer under common management. | ||
(1) For the purposes of subsection (d-1), in no event | ||
shall the sum of the
rates of tax imposed by subsections | ||
(b) and (d) be reduced below the rate at
which the sum of: | ||
(A) the total amount of tax imposed on such foreign | ||
insurer under
this Act for a taxable year, net of all | ||
credits allowed under this Act, plus | ||
(B) the privilege tax imposed by Section 409 of the | ||
Illinois Insurance
Code, the fire insurance company | ||
tax imposed by Section 12 of the Fire
Investigation | ||
Act, and the fire department taxes imposed under | ||
Section 11-10-1
of the Illinois Municipal Code, | ||
equals 1.25% for taxable years ending prior to December 31, | ||
2003, or
1.75% for taxable years ending on or after | ||
December 31, 2003, of the net
taxable premiums written for | ||
the taxable year,
as described by subsection (1) of Section | ||
409 of the Illinois Insurance Code.
This paragraph will in | ||
no event increase the rates imposed under subsections
(b) | ||
and (d). | ||
(2) Any reduction in the rates of tax imposed by this | ||
subsection shall be
applied first against the rates imposed | ||
by subsection (b) and only after the
tax imposed by | ||
subsection (a) net of all credits allowed under this | ||
Section
other than the credit allowed under subsection (i) | ||
has been reduced to zero,
against the rates imposed by | ||
subsection (d). | ||
This subsection (d-1) is exempt from the provisions of | ||
Section 250. | ||
(e) Investment credit. A taxpayer shall be allowed a credit
| ||
against the Personal Property Tax Replacement Income Tax for
| ||
investment in qualified property. | ||
(1) A taxpayer shall be allowed a credit equal to .5% | ||
of
the basis of qualified property placed in service during | ||
the taxable year,
provided such property is placed in | ||
service on or after
July 1, 1984. There shall be allowed an | ||
additional credit equal
to .5% of the basis of qualified | ||
property placed in service during the
taxable year, | ||
provided such property is placed in service on or
after | ||
July 1, 1986, and the taxpayer's base employment
within | ||
Illinois has increased by 1% or more over the preceding | ||
year as
determined by the taxpayer's employment records | ||
filed with the
Illinois Department of Employment Security. | ||
Taxpayers who are new to
Illinois shall be deemed to have | ||
met the 1% growth in base employment for
the first year in | ||
which they file employment records with the Illinois
| ||
Department of Employment Security. The provisions added to | ||
this Section by
Public Act 85-1200 (and restored by Public | ||
Act 87-895) shall be
construed as declaratory of existing | ||
law and not as a new enactment. If,
in any year, the | ||
increase in base employment within Illinois over the
| ||
preceding year is less than 1%, the additional credit shall | ||
be limited to that
percentage times a fraction, the | ||
numerator of which is .5% and the denominator
of which is | ||
1%, but shall not exceed .5%. The investment credit shall | ||
not be
allowed to the extent that it would reduce a | ||
taxpayer's liability in any tax
year below zero, nor may | ||
any credit for qualified property be allowed for any
year | ||
other than the year in which the property was placed in | ||
service in
Illinois. For tax years ending on or after | ||
December 31, 1987, and on or
before December 31, 1988, the | ||
credit shall be allowed for the tax year in
which the | ||
property is placed in service, or, if the amount of the | ||
credit
exceeds the tax liability for that year, whether it | ||
exceeds the original
liability or the liability as later | ||
amended, such excess may be carried
forward and applied to | ||
the tax liability of the 5 taxable years following
the | ||
excess credit years if the taxpayer (i) makes investments | ||
which cause
the creation of a minimum of 2,000 full-time | ||
equivalent jobs in Illinois,
(ii) is located in an | ||
enterprise zone established pursuant to the Illinois
| ||
Enterprise Zone Act and (iii) is certified by the | ||
Department of Commerce
and Community Affairs (now | ||
Department of Commerce and Economic Opportunity) as | ||
complying with the requirements specified in
clause (i) and | ||
(ii) by July 1, 1986. The Department of Commerce and
| ||
Community Affairs (now Department of Commerce and Economic | ||
Opportunity) shall notify the Department of Revenue of all | ||
such
certifications immediately. For tax years ending | ||
after December 31, 1988,
the credit shall be allowed for | ||
the tax year in which the property is
placed in service, | ||
or, if the amount of the credit exceeds the tax
liability | ||
for that year, whether it exceeds the original liability or | ||
the
liability as later amended, such excess may be carried | ||
forward and applied
to the tax liability of the 5 taxable | ||
years following the excess credit
years. The credit shall | ||
be applied to the earliest year for which there is
a | ||
liability. If there is credit from more than one tax year | ||
that is
available to offset a liability, earlier credit | ||
shall be applied first. | ||
(2) The term "qualified property" means property | ||
which: | ||
(A) is tangible, whether new or used, including | ||
buildings and structural
components of buildings and | ||
signs that are real property, but not including
land or | ||
improvements to real property that are not a structural | ||
component of a
building such as landscaping, sewer | ||
lines, local access roads, fencing, parking
lots, and | ||
other appurtenances; | ||
(B) is depreciable pursuant to Section 167 of the | ||
Internal Revenue Code,
except that "3-year property" | ||
as defined in Section 168(c)(2)(A) of that
Code is not | ||
eligible for the credit provided by this subsection | ||
(e); | ||
(C) is acquired by purchase as defined in Section | ||
179(d) of
the Internal Revenue Code; | ||
(D) is used in Illinois by a taxpayer who is | ||
primarily engaged in
manufacturing, or in mining coal | ||
or fluorite, or in retailing, or was placed in service | ||
on or after July 1, 2006 in a River Edge Redevelopment | ||
Zone established pursuant to the River Edge | ||
Redevelopment Zone Act; and | ||
(E) has not previously been used in Illinois in | ||
such a manner and by
such a person as would qualify for | ||
the credit provided by this subsection
(e) or | ||
subsection (f). | ||
(3) For purposes of this subsection (e), | ||
"manufacturing" means
the material staging and production | ||
of tangible personal property by
procedures commonly | ||
regarded as manufacturing, processing, fabrication, or
| ||
assembling which changes some existing material into new | ||
shapes, new
qualities, or new combinations. For purposes of | ||
this subsection
(e) the term "mining" shall have the same | ||
meaning as the term "mining" in
Section 613(c) of the | ||
Internal Revenue Code. For purposes of this subsection
(e), | ||
the term "retailing" means the sale of tangible personal | ||
property for use or consumption and not for resale, or
| ||
services rendered in conjunction with the sale of tangible | ||
personal property for use or consumption and not for | ||
resale. For purposes of this subsection (e), "tangible | ||
personal property" has the same meaning as when that term | ||
is used in the Retailers' Occupation Tax Act, and, for | ||
taxable years ending after December 31, 2008, does not | ||
include the generation, transmission, or distribution of | ||
electricity. | ||
(4) The basis of qualified property shall be the basis
| ||
used to compute the depreciation deduction for federal | ||
income tax purposes. | ||
(5) If the basis of the property for federal income tax | ||
depreciation
purposes is increased after it has been placed | ||
in service in Illinois by
the taxpayer, the amount of such | ||
increase shall be deemed property placed
in service on the | ||
date of such increase in basis. | ||
(6) The term "placed in service" shall have the same
| ||
meaning as under Section 46 of the Internal Revenue Code. | ||
(7) If during any taxable year, any property ceases to
| ||
be qualified property in the hands of the taxpayer within | ||
48 months after
being placed in service, or the situs of | ||
any qualified property is
moved outside Illinois within 48 | ||
months after being placed in service, the
Personal Property | ||
Tax Replacement Income Tax for such taxable year shall be
| ||
increased. Such increase shall be determined by (i) | ||
recomputing the
investment credit which would have been | ||
allowed for the year in which
credit for such property was | ||
originally allowed by eliminating such
property from such | ||
computation and, (ii) subtracting such recomputed credit
| ||
from the amount of credit previously allowed. For the | ||
purposes of this
paragraph (7), a reduction of the basis of | ||
qualified property resulting
from a redetermination of the | ||
purchase price shall be deemed a disposition
of qualified | ||
property to the extent of such reduction. | ||
(8) Unless the investment credit is extended by law, | ||
the
basis of qualified property shall not include costs | ||
incurred after
December 31, 2018, except for costs incurred | ||
pursuant to a binding
contract entered into on or before | ||
December 31, 2018. | ||
(9) Each taxable year ending before December 31, 2000, | ||
a partnership may
elect to pass through to its
partners the | ||
credits to which the partnership is entitled under this | ||
subsection
(e) for the taxable year. A partner may use the | ||
credit allocated to him or her
under this paragraph only | ||
against the tax imposed in subsections (c) and (d) of
this | ||
Section. If the partnership makes that election, those | ||
credits shall be
allocated among the partners in the | ||
partnership in accordance with the rules
set forth in | ||
Section 704(b) of the Internal Revenue Code, and the rules
| ||
promulgated under that Section, and the allocated amount of | ||
the credits shall
be allowed to the partners for that | ||
taxable year. The partnership shall make
this election on | ||
its Personal Property Tax Replacement Income Tax return for
| ||
that taxable year. The election to pass through the credits | ||
shall be
irrevocable. | ||
For taxable years ending on or after December 31, 2000, | ||
a
partner that qualifies its
partnership for a subtraction | ||
under subparagraph (I) of paragraph (2) of
subsection (d) | ||
of Section 203 or a shareholder that qualifies a Subchapter | ||
S
corporation for a subtraction under subparagraph (S) of | ||
paragraph (2) of
subsection (b) of Section 203 shall be | ||
allowed a credit under this subsection
(e) equal to its | ||
share of the credit earned under this subsection (e) during
| ||
the taxable year by the partnership or Subchapter S | ||
corporation, determined in
accordance with the | ||
determination of income and distributive share of
income | ||
under Sections 702 and 704 and Subchapter S of the Internal | ||
Revenue
Code. This paragraph is exempt from the provisions | ||
of Section 250. | ||
(f) Investment credit; Enterprise Zone; River Edge | ||
Redevelopment Zone. | ||
(1) A taxpayer shall be allowed a credit against the | ||
tax imposed
by subsections (a) and (b) of this Section for | ||
investment in qualified
property which is placed in service | ||
in an Enterprise Zone created
pursuant to the Illinois | ||
Enterprise Zone Act or, for property placed in service on | ||
or after July 1, 2006, a River Edge Redevelopment Zone | ||
established pursuant to the River Edge Redevelopment Zone | ||
Act. For partners, shareholders
of Subchapter S | ||
corporations, and owners of limited liability companies,
| ||
if the liability company is treated as a partnership for | ||
purposes of
federal and State income taxation, there shall | ||
be allowed a credit under
this subsection (f) to be | ||
determined in accordance with the determination
of income | ||
and distributive share of income under Sections 702 and 704 | ||
and
Subchapter S of the Internal Revenue Code. The credit | ||
shall be .5% of the
basis for such property. The credit | ||
shall be available only in the taxable
year in which the | ||
property is placed in service in the Enterprise Zone or | ||
River Edge Redevelopment Zone and
shall not be allowed to | ||
the extent that it would reduce a taxpayer's
liability for | ||
the tax imposed by subsections (a) and (b) of this Section | ||
to
below zero. For tax years ending on or after December | ||
31, 1985, the credit
shall be allowed for the tax year in | ||
which the property is placed in
service, or, if the amount | ||
of the credit exceeds the tax liability for that
year, | ||
whether it exceeds the original liability or the liability | ||
as later
amended, such excess may be carried forward and | ||
applied to the tax
liability of the 5 taxable years | ||
following the excess credit year.
The credit shall be | ||
applied to the earliest year for which there is a
| ||
liability. If there is credit from more than one tax year | ||
that is available
to offset a liability, the credit | ||
accruing first in time shall be applied
first. | ||
(2) The term qualified property means property which: | ||
(A) is tangible, whether new or used, including | ||
buildings and
structural components of buildings; | ||
(B) is depreciable pursuant to Section 167 of the | ||
Internal Revenue
Code, except that "3-year property" | ||
as defined in Section 168(c)(2)(A) of
that Code is not | ||
eligible for the credit provided by this subsection | ||
(f); | ||
(C) is acquired by purchase as defined in Section | ||
179(d) of
the Internal Revenue Code; | ||
(D) is used in the Enterprise Zone or River Edge | ||
Redevelopment Zone by the taxpayer; and | ||
(E) has not been previously used in Illinois in | ||
such a manner and by
such a person as would qualify for | ||
the credit provided by this subsection
(f) or | ||
subsection (e). | ||
(3) The basis of qualified property shall be the basis | ||
used to compute
the depreciation deduction for federal | ||
income tax purposes. | ||
(4) If the basis of the property for federal income tax | ||
depreciation
purposes is increased after it has been placed | ||
in service in the Enterprise
Zone or River Edge | ||
Redevelopment Zone by the taxpayer, the amount of such | ||
increase shall be deemed property
placed in service on the | ||
date of such increase in basis. | ||
(5) The term "placed in service" shall have the same | ||
meaning as under
Section 46 of the Internal Revenue Code. | ||
(6) If during any taxable year, any property ceases to | ||
be qualified
property in the hands of the taxpayer within | ||
48 months after being placed
in service, or the situs of | ||
any qualified property is moved outside the
Enterprise Zone | ||
or River Edge Redevelopment Zone within 48 months after | ||
being placed in service, the tax
imposed under subsections | ||
(a) and (b) of this Section for such taxable year
shall be | ||
increased. Such increase shall be determined by (i) | ||
recomputing
the investment credit which would have been | ||
allowed for the year in which
credit for such property was | ||
originally allowed by eliminating such
property from such | ||
computation, and (ii) subtracting such recomputed credit
| ||
from the amount of credit previously allowed. For the | ||
purposes of this
paragraph (6), a reduction of the basis of | ||
qualified property resulting
from a redetermination of the | ||
purchase price shall be deemed a disposition
of qualified | ||
property to the extent of such reduction. | ||
(7) There shall be allowed an additional credit equal | ||
to 0.5% of the basis of qualified property placed in | ||
service during the taxable year in a River Edge | ||
Redevelopment Zone, provided such property is placed in | ||
service on or after July 1, 2006, and the taxpayer's base | ||
employment within Illinois has increased by 1% or more over | ||
the preceding year as determined by the taxpayer's | ||
employment records filed with the Illinois Department of | ||
Employment Security. Taxpayers who are new to Illinois | ||
shall be deemed to have met the 1% growth in base | ||
employment for the first year in which they file employment | ||
records with the Illinois Department of Employment | ||
Security. If, in any year, the increase in base employment | ||
within Illinois over the preceding year is less than 1%, | ||
the additional credit shall be limited to that percentage | ||
times a fraction, the numerator of which is 0.5% and the | ||
denominator of which is 1%, but shall not exceed 0.5%.
| ||
(8) For taxable years beginning on or after January 1, | ||
2021, there shall be allowed an Enterprise Zone | ||
construction jobs credit against the taxes imposed under | ||
subsections (a) and (b) of this Section as provided in | ||
Section 13 of the Illinois Enterprise Zone Act. | ||
The credit or credits may not reduce the taxpayer's | ||
liability to less than zero. If the amount of the credit or | ||
credits exceeds the taxpayer's liability, the excess may be | ||
carried forward and applied against the taxpayer's | ||
liability in succeeding calendar years in the same manner | ||
provided under paragraph (4) of Section 211 of this Act. | ||
The credit or credits shall be applied to the earliest year | ||
for which there is a tax liability. If there are credits | ||
from more than one taxable year that are available to | ||
offset a liability, the earlier credit shall be applied | ||
first. | ||
For partners, shareholders of Subchapter S | ||
corporations, and owners of limited liability companies, | ||
if the liability company is treated as a partnership for | ||
the purposes of federal and State income taxation, there | ||
shall be allowed a credit under this Section to be | ||
determined in accordance with the determination of income | ||
and distributive share of income under Sections 702 and 704 | ||
and Subchapter S of the Internal Revenue Code. | ||
The total aggregate amount of credits awarded under the | ||
Blue Collar Jobs Act (Article 20 of this amendatory Act of | ||
the 101st General Assembly) shall not exceed $20,000,000 in | ||
any State fiscal year | ||
This paragraph (8) is exempt from the provisions of | ||
Section 250. | ||
(g) (Blank). | ||
(h) Investment credit; High Impact Business. | ||
(1) Subject to subsections (b) and (b-5) of Section
5.5 | ||
of the Illinois Enterprise Zone Act, a taxpayer shall be | ||
allowed a credit
against the tax imposed by subsections (a) | ||
and (b) of this Section for
investment in qualified
| ||
property which is placed in service by a Department of | ||
Commerce and Economic Opportunity
designated High Impact | ||
Business. The credit shall be .5% of the basis
for such | ||
property. The credit shall not be available (i) until the | ||
minimum
investments in qualified property set forth in | ||
subdivision (a)(3)(A) of
Section 5.5 of the Illinois
| ||
Enterprise Zone Act have been satisfied
or (ii) until the | ||
time authorized in subsection (b-5) of the Illinois
| ||
Enterprise Zone Act for entities designated as High Impact | ||
Businesses under
subdivisions (a)(3)(B), (a)(3)(C), and | ||
(a)(3)(D) of Section 5.5 of the Illinois
Enterprise Zone | ||
Act, and shall not be allowed to the extent that it would
| ||
reduce a taxpayer's liability for the tax imposed by | ||
subsections (a) and (b) of
this Section to below zero. The | ||
credit applicable to such investments shall be
taken in the | ||
taxable year in which such investments have been completed. | ||
The
credit for additional investments beyond the minimum | ||
investment by a designated
high impact business authorized | ||
under subdivision (a)(3)(A) of Section 5.5 of
the Illinois | ||
Enterprise Zone Act shall be available only in the taxable | ||
year in
which the property is placed in service and shall | ||
not be allowed to the extent
that it would reduce a | ||
taxpayer's liability for the tax imposed by subsections
(a) | ||
and (b) of this Section to below zero.
For tax years ending | ||
on or after December 31, 1987, the credit shall be
allowed | ||
for the tax year in which the property is placed in | ||
service, or, if
the amount of the credit exceeds the tax | ||
liability for that year, whether
it exceeds the original | ||
liability or the liability as later amended, such
excess | ||
may be carried forward and applied to the tax liability of | ||
the 5
taxable years following the excess credit year. The | ||
credit shall be
applied to the earliest year for which | ||
there is a liability. If there is
credit from more than one | ||
tax year that is available to offset a liability,
the | ||
credit accruing first in time shall be applied first. | ||
Changes made in this subdivision (h)(1) by Public Act | ||
88-670
restore changes made by Public Act 85-1182 and | ||
reflect existing law. | ||
(2) The term qualified property means property which: | ||
(A) is tangible, whether new or used, including | ||
buildings and
structural components of buildings; | ||
(B) is depreciable pursuant to Section 167 of the | ||
Internal Revenue
Code, except that "3-year property" | ||
as defined in Section 168(c)(2)(A) of
that Code is not | ||
eligible for the credit provided by this subsection | ||
(h); | ||
(C) is acquired by purchase as defined in Section | ||
179(d) of the
Internal Revenue Code; and | ||
(D) is not eligible for the Enterprise Zone | ||
Investment Credit provided
by subsection (f) of this | ||
Section. | ||
(3) The basis of qualified property shall be the basis | ||
used to compute
the depreciation deduction for federal | ||
income tax purposes. | ||
(4) If the basis of the property for federal income tax | ||
depreciation
purposes is increased after it has been placed | ||
in service in a federally
designated Foreign Trade Zone or | ||
Sub-Zone located in Illinois by the taxpayer,
the amount of | ||
such increase shall be deemed property placed in service on
| ||
the date of such increase in basis. | ||
(5) The term "placed in service" shall have the same | ||
meaning as under
Section 46 of the Internal Revenue Code. | ||
(6) If during any taxable year ending on or before | ||
December 31, 1996,
any property ceases to be qualified
| ||
property in the hands of the taxpayer within 48 months | ||
after being placed
in service, or the situs of any | ||
qualified property is moved outside
Illinois within 48 | ||
months after being placed in service, the tax imposed
under | ||
subsections (a) and (b) of this Section for such taxable | ||
year shall
be increased. Such increase shall be determined | ||
by (i) recomputing the
investment credit which would have | ||
been allowed for the year in which
credit for such property | ||
was originally allowed by eliminating such
property from | ||
such computation, and (ii) subtracting such recomputed | ||
credit
from the amount of credit previously allowed. For | ||
the purposes of this
paragraph (6), a reduction of the | ||
basis of qualified property resulting
from a | ||
redetermination of the purchase price shall be deemed a | ||
disposition
of qualified property to the extent of such | ||
reduction. | ||
(7) Beginning with tax years ending after December 31, | ||
1996, if a
taxpayer qualifies for the credit under this | ||
subsection (h) and thereby is
granted a tax abatement and | ||
the taxpayer relocates its entire facility in
violation of | ||
the explicit terms and length of the contract under Section
| ||
18-183 of the Property Tax Code, the tax imposed under | ||
subsections
(a) and (b) of this Section shall be increased | ||
for the taxable year
in which the taxpayer relocated its | ||
facility by an amount equal to the
amount of credit | ||
received by the taxpayer under this subsection (h). | ||
(h-5) High Impact Business constructions jobs credit. For | ||
taxable years beginning on or after January 1, 2021, there | ||
shall also be allowed a High Impact Business construction jobs | ||
credit against the tax imposed under subsections (a) and (b) of | ||
this Section as provided in subsections (i) and (j) of Section | ||
5.5 of the Illinois Enterprise Zone Act. | ||
The credit or credits may not reduce the taxpayer's | ||
liability to less than zero. If the amount of the credit or | ||
credits exceeds the taxpayer's liability, the excess may be | ||
carried forward and applied against the taxpayer's liability in | ||
succeeding calendar years in the manner provided under | ||
paragraph (4) of Section 211 of this Act. The credit or credits | ||
shall be applied to the earliest year for which there is a tax | ||
liability. If there are credits from more than one taxable year | ||
that are available to offset a liability, the earlier credit | ||
shall be applied first. | ||
For partners, shareholders of Subchapter S corporations, | ||
and owners of limited liability companies, if the liability | ||
company is treated as a partnership for the purposes of federal | ||
and State income taxation, there shall be allowed a credit | ||
under this Section to be determined in accordance with the | ||
determination of income and distributive share of income under | ||
Sections 702 and 704 and Subchapter S of the Internal Revenue | ||
Code. | ||
The total aggregate amount of credits awarded under the | ||
Blue Collar Jobs Act (Article 20 of this amendatory Act of the | ||
101st General Assembly) shall not exceed $20,000,000 in any | ||
State fiscal year | ||
This subsection (h-5) is exempt from the provisions of | ||
Section 250. | ||
(i) Credit for Personal Property Tax Replacement Income | ||
Tax.
For tax years ending prior to December 31, 2003, a credit | ||
shall be allowed
against the tax imposed by
subsections (a) and | ||
(b) of this Section for the tax imposed by subsections (c)
and | ||
(d) of this Section. This credit shall be computed by | ||
multiplying the tax
imposed by subsections (c) and (d) of this | ||
Section by a fraction, the numerator
of which is base income | ||
allocable to Illinois and the denominator of which is
Illinois | ||
base income, and further multiplying the product by the tax | ||
rate
imposed by subsections (a) and (b) of this Section. | ||
Any credit earned on or after December 31, 1986 under
this | ||
subsection which is unused in the year
the credit is computed | ||
because it exceeds the tax liability imposed by
subsections (a) | ||
and (b) for that year (whether it exceeds the original
| ||
liability or the liability as later amended) may be carried | ||
forward and
applied to the tax liability imposed by subsections | ||
(a) and (b) of the 5
taxable years following the excess credit | ||
year, provided that no credit may
be carried forward to any | ||
year ending on or
after December 31, 2003. This credit shall be
| ||
applied first to the earliest year for which there is a | ||
liability. If
there is a credit under this subsection from more | ||
than one tax year that is
available to offset a liability the | ||
earliest credit arising under this
subsection shall be applied | ||
first. | ||
If, during any taxable year ending on or after December 31, | ||
1986, the
tax imposed by subsections (c) and (d) of this | ||
Section for which a taxpayer
has claimed a credit under this | ||
subsection (i) is reduced, the amount of
credit for such tax | ||
shall also be reduced. Such reduction shall be
determined by | ||
recomputing the credit to take into account the reduced tax
| ||
imposed by subsections (c) and (d). If any portion of the
| ||
reduced amount of credit has been carried to a different | ||
taxable year, an
amended return shall be filed for such taxable | ||
year to reduce the amount of
credit claimed. | ||
(j) Training expense credit. Beginning with tax years | ||
ending on or
after December 31, 1986 and prior to December 31, | ||
2003, a taxpayer shall be
allowed a credit against the
tax | ||
imposed by subsections (a) and (b) under this Section
for all | ||
amounts paid or accrued, on behalf of all persons
employed by | ||
the taxpayer in Illinois or Illinois residents employed
outside | ||
of Illinois by a taxpayer, for educational or vocational | ||
training in
semi-technical or technical fields or semi-skilled | ||
or skilled fields, which
were deducted from gross income in the | ||
computation of taxable income. The
credit against the tax | ||
imposed by subsections (a) and (b) shall be 1.6% of
such | ||
training expenses. For partners, shareholders of subchapter S
| ||
corporations, and owners of limited liability companies, if the | ||
liability
company is treated as a partnership for purposes of | ||
federal and State income
taxation, there shall be allowed a | ||
credit under this subsection (j) to be
determined in accordance | ||
with the determination of income and distributive
share of | ||
income under Sections 702 and 704 and subchapter S of the | ||
Internal
Revenue Code. | ||
Any credit allowed under this subsection which is unused in | ||
the year
the credit is earned may be carried forward to each of | ||
the 5 taxable
years following the year for which the credit is | ||
first computed until it is
used. This credit shall be applied | ||
first to the earliest year for which
there is a liability. If | ||
there is a credit under this subsection from more
than one tax | ||
year that is available to offset a liability the earliest
| ||
credit arising under this subsection shall be applied first. No | ||
carryforward
credit may be claimed in any tax year ending on or | ||
after
December 31, 2003. | ||
(k) Research and development credit. For tax years ending | ||
after July 1, 1990 and prior to
December 31, 2003, and | ||
beginning again for tax years ending on or after December 31, | ||
2004, and ending prior to January 1, 2022, a taxpayer shall be
| ||
allowed a credit against the tax imposed by subsections (a) and | ||
(b) of this
Section for increasing research activities in this | ||
State. The credit
allowed against the tax imposed by | ||
subsections (a) and (b) shall be equal
to 6 1/2% of the | ||
qualifying expenditures for increasing research activities
in | ||
this State. For partners, shareholders of subchapter S | ||
corporations, and
owners of limited liability companies, if the | ||
liability company is treated as a
partnership for purposes of | ||
federal and State income taxation, there shall be
allowed a | ||
credit under this subsection to be determined in accordance | ||
with the
determination of income and distributive share of | ||
income under Sections 702 and
704 and subchapter S of the | ||
Internal Revenue Code. | ||
For purposes of this subsection, "qualifying expenditures" | ||
means the
qualifying expenditures as defined for the federal | ||
credit for increasing
research activities which would be | ||
allowable under Section 41 of the
Internal Revenue Code and | ||
which are conducted in this State, "qualifying
expenditures for | ||
increasing research activities in this State" means the
excess | ||
of qualifying expenditures for the taxable year in which | ||
incurred
over qualifying expenditures for the base period, | ||
"qualifying expenditures
for the base period" means the average | ||
of the qualifying expenditures for
each year in the base | ||
period, and "base period" means the 3 taxable years
immediately | ||
preceding the taxable year for which the determination is
being | ||
made. | ||
Any credit in excess of the tax liability for the taxable | ||
year
may be carried forward. A taxpayer may elect to have the
| ||
unused credit shown on its final completed return carried over | ||
as a credit
against the tax liability for the following 5 | ||
taxable years or until it has
been fully used, whichever occurs | ||
first; provided that no credit earned in a tax year ending | ||
prior to December 31, 2003 may be carried forward to any year | ||
ending on or after December 31, 2003. | ||
If an unused credit is carried forward to a given year from | ||
2 or more
earlier years, that credit arising in the earliest | ||
year will be applied
first against the tax liability for the | ||
given year. If a tax liability for
the given year still | ||
remains, the credit from the next earliest year will
then be | ||
applied, and so on, until all credits have been used or no tax
| ||
liability for the given year remains. Any remaining unused | ||
credit or
credits then will be carried forward to the next | ||
following year in which a
tax liability is incurred, except | ||
that no credit can be carried forward to
a year which is more | ||
than 5 years after the year in which the expense for
which the | ||
credit is given was incurred. | ||
No inference shall be drawn from this amendatory Act of the | ||
91st General
Assembly in construing this Section for taxable | ||
years beginning before January
1, 1999. | ||
It is the intent of the General Assembly that the research | ||
and development credit under this subsection (k) shall apply | ||
continuously for all tax years ending on or after December 31, | ||
2004 and ending prior to January 1, 2022, including, but not | ||
limited to, the period beginning on January 1, 2016 and ending | ||
on the effective date of this amendatory Act of the 100th | ||
General Assembly. All actions taken in reliance on the | ||
continuation of the credit under this subsection (k) by any | ||
taxpayer are hereby validated. | ||
(l) Environmental Remediation Tax Credit. | ||
(i) For tax years ending after December 31, 1997 and on | ||
or before
December 31, 2001, a taxpayer shall be allowed a | ||
credit against the tax
imposed by subsections (a) and (b) | ||
of this Section for certain amounts paid
for unreimbursed | ||
eligible remediation costs, as specified in this | ||
subsection.
For purposes of this Section, "unreimbursed | ||
eligible remediation costs" means
costs approved by the | ||
Illinois Environmental Protection Agency ("Agency") under
| ||
Section 58.14 of the Environmental Protection Act that were | ||
paid in performing
environmental remediation at a site for | ||
which a No Further Remediation Letter
was issued by the | ||
Agency and recorded under Section 58.10 of the | ||
Environmental
Protection Act. The credit must be claimed | ||
for the taxable year in which
Agency approval of the | ||
eligible remediation costs is granted. The credit is
not | ||
available to any taxpayer if the taxpayer or any related | ||
party caused or
contributed to, in any material respect, a | ||
release of regulated substances on,
in, or under the site | ||
that was identified and addressed by the remedial
action | ||
pursuant to the Site Remediation Program of the | ||
Environmental Protection
Act. After the Pollution Control | ||
Board rules are adopted pursuant to the
Illinois | ||
Administrative Procedure Act for the administration and | ||
enforcement of
Section 58.9 of the Environmental | ||
Protection Act, determinations as to credit
availability | ||
for purposes of this Section shall be made consistent with | ||
those
rules. For purposes of this Section, "taxpayer" | ||
includes a person whose tax
attributes the taxpayer has | ||
succeeded to under Section 381 of the Internal
Revenue Code | ||
and "related party" includes the persons disallowed a | ||
deduction
for losses by paragraphs (b), (c), and (f)(1) of | ||
Section 267 of the Internal
Revenue Code by virtue of being | ||
a related taxpayer, as well as any of its
partners. The | ||
credit allowed against the tax imposed by subsections (a) | ||
and
(b) shall be equal to 25% of the unreimbursed eligible | ||
remediation costs in
excess of $100,000 per site, except | ||
that the $100,000 threshold shall not apply
to any site | ||
contained in an enterprise zone as determined by the | ||
Department of
Commerce and Community Affairs (now | ||
Department of Commerce and Economic Opportunity). The | ||
total credit allowed shall not exceed
$40,000 per year with | ||
a maximum total of $150,000 per site. For partners and
| ||
shareholders of subchapter S corporations, there shall be | ||
allowed a credit
under this subsection to be determined in | ||
accordance with the determination of
income and | ||
distributive share of income under Sections 702 and 704 and
| ||
subchapter S of the Internal Revenue Code. | ||
(ii) A credit allowed under this subsection that is | ||
unused in the year
the credit is earned may be carried | ||
forward to each of the 5 taxable years
following the year | ||
for which the credit is first earned until it is used.
The | ||
term "unused credit" does not include any amounts of | ||
unreimbursed eligible
remediation costs in excess of the | ||
maximum credit per site authorized under
paragraph (i). | ||
This credit shall be applied first to the earliest year
for | ||
which there is a liability. If there is a credit under this | ||
subsection
from more than one tax year that is available to | ||
offset a liability, the
earliest credit arising under this | ||
subsection shall be applied first. A
credit allowed under | ||
this subsection may be sold to a buyer as part of a sale
of | ||
all or part of the remediation site for which the credit | ||
was granted. The
purchaser of a remediation site and the | ||
tax credit shall succeed to the unused
credit and remaining | ||
carry-forward period of the seller. To perfect the
| ||
transfer, the assignor shall record the transfer in the | ||
chain of title for the
site and provide written notice to | ||
the Director of the Illinois Department of
Revenue of the | ||
assignor's intent to sell the remediation site and the | ||
amount of
the tax credit to be transferred as a portion of | ||
the sale. In no event may a
credit be transferred to any | ||
taxpayer if the taxpayer or a related party would
not be | ||
eligible under the provisions of subsection (i). | ||
(iii) For purposes of this Section, the term "site" | ||
shall have the same
meaning as under Section 58.2 of the | ||
Environmental Protection Act. | ||
(m) Education expense credit. Beginning with tax years | ||
ending after
December 31, 1999, a taxpayer who
is the custodian | ||
of one or more qualifying pupils shall be allowed a credit
| ||
against the tax imposed by subsections (a) and (b) of this | ||
Section for
qualified education expenses incurred on behalf of | ||
the qualifying pupils.
The credit shall be equal to 25% of | ||
qualified education expenses, but in no
event may the total | ||
credit under this subsection claimed by a
family that is the
| ||
custodian of qualifying pupils exceed (i) $500 for tax years | ||
ending prior to December 31, 2017, and (ii) $750 for tax years | ||
ending on or after December 31, 2017. In no event shall a | ||
credit under
this subsection reduce the taxpayer's liability | ||
under this Act to less than
zero. Notwithstanding any other | ||
provision of law, for taxable years beginning on or after | ||
January 1, 2017, no taxpayer may claim a credit under this | ||
subsection (m) if the taxpayer's adjusted gross income for the | ||
taxable year exceeds (i) $500,000, in the case of spouses | ||
filing a joint federal tax return or (ii) $250,000, in the case | ||
of all other taxpayers. This subsection is exempt from the | ||
provisions of Section 250 of this
Act. | ||
For purposes of this subsection: | ||
"Qualifying pupils" means individuals who (i) are | ||
residents of the State of
Illinois, (ii) are under the age of | ||
21 at the close of the school year for
which a credit is | ||
sought, and (iii) during the school year for which a credit
is | ||
sought were full-time pupils enrolled in a kindergarten through | ||
twelfth
grade education program at any school, as defined in | ||
this subsection. | ||
"Qualified education expense" means the amount incurred
on | ||
behalf of a qualifying pupil in excess of $250 for tuition, | ||
book fees, and
lab fees at the school in which the pupil is | ||
enrolled during the regular school
year. | ||
"School" means any public or nonpublic elementary or | ||
secondary school in
Illinois that is in compliance with Title | ||
VI of the Civil Rights Act of 1964
and attendance at which | ||
satisfies the requirements of Section 26-1 of the
School Code, | ||
except that nothing shall be construed to require a child to
| ||
attend any particular public or nonpublic school to qualify for | ||
the credit
under this Section. | ||
"Custodian" means, with respect to qualifying pupils, an | ||
Illinois resident
who is a parent, the parents, a legal | ||
guardian, or the legal guardians of the
qualifying pupils. | ||
(n) River Edge Redevelopment Zone site remediation tax | ||
credit.
| ||
(i) For tax years ending on or after December 31, 2006, | ||
a taxpayer shall be allowed a credit against the tax | ||
imposed by subsections (a) and (b) of this Section for | ||
certain amounts paid for unreimbursed eligible remediation | ||
costs, as specified in this subsection. For purposes of | ||
this Section, "unreimbursed eligible remediation costs" | ||
means costs approved by the Illinois Environmental | ||
Protection Agency ("Agency") under Section 58.14a of the | ||
Environmental Protection Act that were paid in performing | ||
environmental remediation at a site within a River Edge | ||
Redevelopment Zone for which a No Further Remediation | ||
Letter was issued by the Agency and recorded under Section | ||
58.10 of the Environmental Protection Act. The credit must | ||
be claimed for the taxable year in which Agency approval of | ||
the eligible remediation costs is granted. The credit is | ||
not available to any taxpayer if the taxpayer or any | ||
related party caused or contributed to, in any material | ||
respect, a release of regulated substances on, in, or under | ||
the site that was identified and addressed by the remedial | ||
action pursuant to the Site Remediation Program of the | ||
Environmental Protection Act. Determinations as to credit | ||
availability for purposes of this Section shall be made | ||
consistent with rules adopted by the Pollution Control | ||
Board pursuant to the Illinois Administrative Procedure | ||
Act for the administration and enforcement of Section 58.9 | ||
of the Environmental Protection Act. For purposes of this | ||
Section, "taxpayer" includes a person whose tax attributes | ||
the taxpayer has succeeded to under Section 381 of the | ||
Internal Revenue Code and "related party" includes the | ||
persons disallowed a deduction for losses by paragraphs | ||
(b), (c), and (f)(1) of Section 267 of the Internal Revenue | ||
Code by virtue of being a related taxpayer, as well as any | ||
of its partners. The credit allowed against the tax imposed | ||
by subsections (a) and (b) shall be equal to 25% of the | ||
unreimbursed eligible remediation costs in excess of | ||
$100,000 per site. | ||
(ii) A credit allowed under this subsection that is | ||
unused in the year the credit is earned may be carried | ||
forward to each of the 5 taxable years following the year | ||
for which the credit is first earned until it is used. This | ||
credit shall be applied first to the earliest year for | ||
which there is a liability. If there is a credit under this | ||
subsection from more than one tax year that is available to | ||
offset a liability, the earliest credit arising under this | ||
subsection shall be applied first. A credit allowed under | ||
this subsection may be sold to a buyer as part of a sale of | ||
all or part of the remediation site for which the credit | ||
was granted. The purchaser of a remediation site and the | ||
tax credit shall succeed to the unused credit and remaining | ||
carry-forward period of the seller. To perfect the | ||
transfer, the assignor shall record the transfer in the | ||
chain of title for the site and provide written notice to | ||
the Director of the Illinois Department of Revenue of the | ||
assignor's intent to sell the remediation site and the | ||
amount of the tax credit to be transferred as a portion of | ||
the sale. In no event may a credit be transferred to any | ||
taxpayer if the taxpayer or a related party would not be | ||
eligible under the provisions of subsection (i). | ||
(iii) For purposes of this Section, the term "site" | ||
shall have the same meaning as under Section 58.2 of the | ||
Environmental Protection Act. | ||
(o) For each of taxable years during the Compassionate Use | ||
of Medical Cannabis Pilot Program, a surcharge is imposed on | ||
all taxpayers on income arising from the sale or exchange of | ||
capital assets, depreciable business property, real property | ||
used in the trade or business, and Section 197 intangibles of | ||
an organization registrant under the Compassionate Use of | ||
Medical Cannabis Pilot Program Act. The amount of the surcharge | ||
is equal to the amount of federal income tax liability for the | ||
taxable year attributable to those sales and exchanges. The | ||
surcharge imposed does not apply if: | ||
(1) the medical cannabis cultivation center | ||
registration, medical cannabis dispensary registration, or | ||
the property of a registration is transferred as a result | ||
of any of the following: | ||
(A) bankruptcy, a receivership, or a debt | ||
adjustment initiated by or against the initial | ||
registration or the substantial owners of the initial | ||
registration; | ||
(B) cancellation, revocation, or termination of | ||
any registration by the Illinois Department of Public | ||
Health; | ||
(C) a determination by the Illinois Department of | ||
Public Health that transfer of the registration is in | ||
the best interests of Illinois qualifying patients as | ||
defined by the Compassionate Use of Medical Cannabis | ||
Pilot Program Act; | ||
(D) the death of an owner of the equity interest in | ||
a registrant; | ||
(E) the acquisition of a controlling interest in | ||
the stock or substantially all of the assets of a | ||
publicly traded company; | ||
(F) a transfer by a parent company to a wholly | ||
owned subsidiary; or | ||
(G) the transfer or sale to or by one person to | ||
another person where both persons were initial owners | ||
of the registration when the registration was issued; | ||
or | ||
(2) the cannabis cultivation center registration, | ||
medical cannabis dispensary registration, or the | ||
controlling interest in a registrant's property is | ||
transferred in a transaction to lineal descendants in which | ||
no gain or loss is recognized or as a result of a | ||
transaction in accordance with Section 351 of the Internal | ||
Revenue Code in which no gain or loss is recognized. | ||
(Source: P.A. 100-22, eff. 7-6-17.)
| ||
(35 ILCS 5/211)
| ||
Sec. 211. Economic Development for a Growing Economy Tax | ||
Credit. For tax years beginning on or after January 1, 1999, a | ||
Taxpayer
who has entered into an Agreement (including a New | ||
Construction EDGE Agreement) under the Economic Development | ||
for a Growing
Economy Tax Credit Act is entitled to a credit | ||
against the taxes imposed
under subsections (a) and (b) of | ||
Section 201 of this Act in an amount to be
determined in the | ||
Agreement. If the Taxpayer is a partnership or Subchapter
S | ||
corporation, the credit shall be allowed to the partners or | ||
shareholders in
accordance with the determination of income and | ||
distributive share of income
under Sections 702 and 704 and | ||
subchapter S of the Internal Revenue Code.
The Department, in | ||
cooperation with the Department
of Commerce and Economic | ||
Opportunity, shall prescribe rules to enforce and
administer | ||
the provisions of this Section. This Section is
exempt from the | ||
provisions of Section 250 of this Act.
| ||
The credit shall be subject to the conditions set forth in
| ||
the Agreement and the following limitations:
| ||
(1) The tax credit shall not exceed the Incremental | ||
Income Tax
(as defined in Section 5-5 of the Economic | ||
Development for a Growing Economy
Tax Credit Act) with | ||
respect to the project; additionally, the New Construction | ||
EDGE Credit shall not exceed the New Construction EDGE | ||
Incremental Income Tax (as defined in Section 5-5 of the | ||
Economic Development for a Growing Economy Tax Credit Act).
| ||
(2) The amount of the credit allowed during the tax | ||
year plus the sum of
all amounts allowed in prior years | ||
shall not exceed 100% of the aggregate
amount expended by | ||
the Taxpayer during all prior tax years on approved costs
| ||
defined by Agreement.
| ||
(3) The amount of the credit shall be determined on an | ||
annual
basis. Except as applied in a carryover year | ||
pursuant to Section 211(4) of
this Act, the credit may not | ||
be applied against any State
income tax liability in more | ||
than 10 taxable
years; provided, however, that (i) an | ||
eligible business certified by the
Department of Commerce | ||
and Economic Opportunity under the Corporate Headquarters
| ||
Relocation Act may not
apply the credit against any of its | ||
State income tax liability in more than 15
taxable years
| ||
and (ii) credits allowed to that eligible business are | ||
subject to the
conditions
and requirements set forth in | ||
Sections 5-35 and 5-45 of the Economic
Development for a | ||
Growing Economy Tax Credit Act and Section 5-51 as | ||
applicable to New Construction EDGE Credits.
| ||
(4) The credit may not exceed the amount of taxes | ||
imposed pursuant to
subsections (a) and (b) of Section 201 | ||
of this Act. Any credit
that is unused in the year the | ||
credit is computed may be carried forward and
applied to | ||
the tax liability of the 5 taxable years following the | ||
excess credit
year. The credit shall be applied to the | ||
earliest year for which there is a
tax liability. If there | ||
are credits from more than one tax year that are
available | ||
to offset a liability, the earlier credit shall be applied | ||
first.
| ||
(5) No credit shall be allowed with respect to any | ||
Agreement for any
taxable year ending after the | ||
Noncompliance Date. Upon receiving notification
by the | ||
Department of Commerce and Economic Opportunity of the | ||
noncompliance of a
Taxpayer with an Agreement, the | ||
Department shall notify the Taxpayer that no
credit is | ||
allowed with respect to that Agreement for any taxable year | ||
ending
after the Noncompliance Date, as stated in such | ||
notification. If any credit
has been allowed with respect | ||
to an Agreement for a taxable year ending after
the | ||
Noncompliance Date for that Agreement, any refund paid to | ||
the
Taxpayer for that taxable year shall, to the extent of | ||
that credit allowed, be
an erroneous refund within the | ||
meaning of Section 912 of this Act.
| ||
(6) For purposes of this Section, the terms | ||
"Agreement", "Incremental
Income Tax", "New Construction | ||
EDGE Agreement", "New Construction EDGE Credit", "New | ||
Construction EDGE Incremental Income Tax", and | ||
"Noncompliance Date" have the same meaning as when used
in | ||
the Economic Development for a Growing Economy Tax Credit | ||
Act.
| ||
(Source: P.A. 94-793, eff. 5-19-06.)
| ||
(35 ILCS 5/221) | ||
Sec. 221. Rehabilitation costs; qualified historic | ||
properties; River Edge Redevelopment Zone. | ||
(a) For taxable years that begin on or after January 1, | ||
2012 and begin prior to January 1, 2018, there shall be allowed | ||
a tax credit against the tax imposed by subsections (a) and (b) | ||
of Section 201 of this Act in an amount equal to 25% of | ||
qualified expenditures incurred by a qualified taxpayer during | ||
the taxable year in the restoration and preservation of a | ||
qualified historic structure located in a River Edge | ||
Redevelopment Zone pursuant to a qualified rehabilitation | ||
plan, provided that the total amount of such expenditures (i) | ||
must equal $5,000 or more and (ii) must exceed 50% of the | ||
purchase price of the property. | ||
(a-1) For taxable years that begin on or after January 1, | ||
2018 and end prior to January 1, 2022, there shall be allowed a | ||
tax credit against the tax imposed by subsections (a) and (b) | ||
of Section 201 of this Act in an aggregate amount equal to 25% | ||
of qualified expenditures incurred by a qualified taxpayer in | ||
the restoration and preservation of a qualified historic | ||
structure located in a River Edge Redevelopment Zone pursuant | ||
to a qualified rehabilitation plan, provided that the total | ||
amount of such expenditures must (i) equal $5,000 or more and | ||
(ii) exceed the adjusted basis of the qualified historic | ||
structure on the first day the qualified rehabilitation plan | ||
begins. For any rehabilitation project, regardless of duration | ||
or number of phases, the project's compliance with the | ||
foregoing provisions (i) and (ii) shall be determined based on | ||
the aggregate amount of qualified expenditures for the entire | ||
project and may include expenditures incurred under subsection | ||
(a), this subsection, or both subsection (a) and this | ||
subsection. If the qualified rehabilitation plan spans | ||
multiple years, the aggregate credit for the entire project | ||
shall be allowed in the last taxable year, except for phased | ||
rehabilitation projects, which may receive credits upon | ||
completion of each phase. Before obtaining the first phased | ||
credit: (A) the total amount of such expenditures must meet the | ||
requirements of provisions (i) and (ii) of this subsection; (B) | ||
the rehabilitated portion of the qualified historic structure | ||
must be placed in service; and (C) the requirements of | ||
subsection (b) must be met. | ||
(a-2) For taxable years beginning on or after January 1, | ||
2021 and ending prior to January 1, 2022, there shall be | ||
allowed a tax credit against the tax imposed by subsections (a) | ||
and (b) of Section 201 as provided in Section 10-10.3 of the | ||
River Edge Redevelopment Zone Act. The credit allowed under | ||
this subsection (a-2) shall apply only to taxpayers that make a | ||
capital investment of at least $1,000,000 in a qualified | ||
rehabilitation plan. | ||
The credit or credits may not reduce the taxpayer's | ||
liability to less than zero. If the amount of the credit or | ||
credits exceeds the taxpayer's liability, the excess may be | ||
carried forward and applied against the taxpayer's liability in | ||
succeeding calendar years in the manner provided under | ||
paragraph (4) of Section 211 of this Act. The credit or credits | ||
shall be applied to the earliest year for which there is a tax | ||
liability. If there are credits from more than one taxable year | ||
that are available to offset a liability, the earlier credit | ||
shall be applied first. | ||
For partners, shareholders of Subchapter S corporations, | ||
and owners of limited liability companies, if the liability | ||
company is treated as a partnership for the purposes of federal | ||
and State income taxation, there shall be allowed a credit | ||
under this Section to be determined in accordance with the | ||
determination of income and distributive share of income under | ||
Sections 702 and 704 and Subchapter S of the Internal Revenue | ||
Code. | ||
The total aggregate amount of credits awarded under the | ||
Blue Collar Jobs Act (Article 20 of this amendatory Act of the | ||
101st General Assembly) shall not exceed $20,000,000 in any | ||
State fiscal year. | ||
(b) To obtain a tax credit pursuant to this Section, the | ||
taxpayer must apply with the Department of Natural Resources. | ||
The Department of Natural Resources shall determine the amount | ||
of eligible rehabilitation costs and expenses in addition to | ||
the amount of the River Edge construction jobs credit within 45 | ||
days of receipt of a complete application. The taxpayer must | ||
submit a certification of costs prepared by an independent | ||
certified public accountant that certifies (i) the project | ||
expenses, (ii) whether those expenses are qualified | ||
expenditures, and (iii) that the qualified expenditures exceed | ||
the adjusted basis of the qualified historic structure on the | ||
first day the qualified rehabilitation plan commenced. The | ||
Department of Natural Resources is authorized, but not | ||
required, to accept this certification of costs to determine | ||
the amount of qualified expenditures and the amount of the | ||
credit. The Department of Natural Resources shall provide | ||
guidance as to the minimum standards to be followed in the | ||
preparation of such certification. The Department of Natural | ||
Resources and the National Park Service shall determine whether | ||
the rehabilitation is consistent with the United States | ||
Secretary of the Interior's Standards for Rehabilitation. | ||
(b-1) Upon completion of the project and approval of the | ||
complete application, the Department of Natural Resources | ||
shall issue a single certificate in the amount of the eligible | ||
credits equal to 25% of qualified expenditures incurred during | ||
the eligible taxable years, as defined in subsections (a) and | ||
(a-1), excepting any credits awarded under subsection (a) prior | ||
to January 1, 2019 (the effective date of Public Act 100-629) | ||
this amendatory Act of the 100th General Assembly and any | ||
phased credits issued prior to the eligible taxable year under | ||
subsection (a-1). At the time the certificate is issued, an | ||
issuance fee up to the maximum amount of 2% of the amount of | ||
the credits issued by the certificate may be collected from the | ||
applicant to administer the provisions of this Section. If | ||
collected, this issuance fee shall be deposited into the | ||
Historic Property Administrative Fund, a special fund created | ||
in the State treasury. Subject to appropriation, moneys in the | ||
Historic Property Administrative Fund shall be provided to the | ||
Department of Natural Resources as reimbursement Department of | ||
Natural Resources for the costs associated with administering | ||
this Section. | ||
(c) The taxpayer must attach the certificate to the tax | ||
return on which the credits are to be claimed. The tax credit | ||
under this Section may not reduce the taxpayer's liability to | ||
less than
zero. If the amount of the credit exceeds the tax | ||
liability for the year, the excess credit may be carried | ||
forward and applied to the tax liability of the 5 taxable years | ||
following the excess credit year. | ||
(c-1) Subject to appropriation, moneys in the Historic | ||
Property Administrative Fund shall be used, on a biennial basis | ||
beginning at the end of the second fiscal year after January 1, | ||
2019 (the effective date of Public Act 100-629) this amendatory | ||
Act of the 100th General Assembly, to hire a qualified third | ||
party to prepare a biennial report to assess the overall | ||
economic impact to the State from the qualified rehabilitation | ||
projects under this Section completed in that year and in | ||
previous years. The overall economic impact shall include at | ||
least: (1) the direct and indirect or induced economic impacts | ||
of completed projects; (2) temporary, permanent, and | ||
construction jobs created; (3) sales, income, and property tax | ||
generation before, during construction, and after completion; | ||
and (4) indirect neighborhood impact after completion. The | ||
report shall be submitted to the Governor and the General | ||
Assembly. The report to the General Assembly shall be filed | ||
with the Clerk of the House of Representatives and the | ||
Secretary of the Senate in electronic form only, in the manner | ||
that the Clerk and the Secretary shall direct. | ||
(c-2) The Department of Natural Resources may adopt rules | ||
to implement this Section in addition to the rules expressly | ||
authorized in this Section. | ||
(d) As used in this Section, the following terms have the | ||
following meanings. | ||
"Phased rehabilitation" means a project that is completed | ||
in phases, as defined under Section 47 of the federal Internal | ||
Revenue Code and pursuant to National Park Service regulations | ||
at 36 C.F.R. 67. | ||
"Placed in service" means the date when the property is | ||
placed in a condition or state of readiness and availability | ||
for a specifically assigned function as defined under Section | ||
47 of the federal Internal Revenue Code and federal Treasury | ||
Regulation Sections 1.46 and 1.48. | ||
"Qualified expenditure" means all the costs and expenses | ||
defined as qualified rehabilitation expenditures under Section | ||
47 of the federal Internal Revenue Code that were incurred in | ||
connection with a qualified historic structure. | ||
"Qualified historic structure" means a certified historic | ||
structure as defined under Section 47(c)(3) of the federal | ||
Internal Revenue Code. | ||
"Qualified rehabilitation plan" means a project that is | ||
approved by the Department of Natural Resources and the | ||
National Park Service as being consistent with the United | ||
States Secretary of the Interior's Standards for | ||
Rehabilitation. | ||
"Qualified taxpayer" means the owner of the qualified | ||
historic structure or any other person who qualifies for the | ||
federal rehabilitation credit allowed by Section 47 of the | ||
federal Internal Revenue Code with respect to that qualified | ||
historic structure. Partners, shareholders of subchapter S | ||
corporations, and owners of limited liability companies (if the | ||
limited liability company is treated as a partnership for | ||
purposes of federal and State income taxation) are entitled to | ||
a credit under this Section to be determined in accordance with | ||
the determination of income and distributive share of income | ||
under Sections 702 and 703 and subchapter S of the Internal | ||
Revenue Code, provided that credits granted to a partnership, a | ||
limited liability company taxed as a partnership, or other | ||
multiple owners of property shall be passed through to the | ||
partners, members, or owners respectively on a pro rata basis | ||
or pursuant to an executed agreement among the partners, | ||
members, or owners documenting any alternate distribution | ||
method.
| ||
(Source: P.A. 99-914, eff. 12-20-16; 100-236, eff. 8-18-17; | ||
100-629, eff. 1-1-19; 100-695, eff. 8-3-18; revised 10-18-18.) | ||
Section 20-15. The Economic Development for a Growing | ||
Economy Tax Credit Act is amended by changing Section 5-5 and | ||
by adding Sections 5-51 and 5-56 as follows:
| ||
(35 ILCS 10/5-5)
| ||
Sec. 5-5. Definitions. As used in this Act:
| ||
"Agreement" means the Agreement between a Taxpayer and the | ||
Department under
the provisions of Section 5-50 of this Act.
| ||
"Applicant" means a Taxpayer that is operating a business | ||
located or that
the Taxpayer plans to locate within the State | ||
of Illinois and that is engaged
in interstate or intrastate | ||
commerce for the purpose of manufacturing,
processing, | ||
assembling, warehousing, or distributing products, conducting
| ||
research and development, providing tourism services, or | ||
providing services
in interstate commerce, office industries, | ||
or agricultural processing, but
excluding retail, retail food, | ||
health, or professional services.
"Applicant" does not include | ||
a Taxpayer who closes or
substantially reduces an operation at | ||
one location in the State and relocates
substantially the same | ||
operation to another location in the State. This does
not | ||
prohibit a Taxpayer from expanding its operations at another | ||
location in
the State, provided that existing operations of a | ||
similar nature located within
the State are not closed or | ||
substantially reduced. This also does not prohibit
a Taxpayer | ||
from moving its operations from one location in the State to | ||
another
location in the State for the purpose of expanding the | ||
operation provided that
the Department determines that | ||
expansion cannot reasonably be accommodated
within the | ||
municipality in which the business is located, or in the case | ||
of a
business located in an incorporated area of the county, | ||
within the county in
which the business is located, after | ||
conferring with the chief elected
official of the municipality | ||
or county and taking into consideration any
evidence offered by | ||
the municipality or county regarding the ability to
accommodate | ||
expansion within the municipality or county.
| ||
"Committee" means the Illinois Business Investment | ||
Committee created under
Section 5-25 of this Act within the | ||
Illinois Economic Development Board.
| ||
"Credit" means the amount agreed to between the Department | ||
and Applicant
under this Act, but not to exceed the lesser of: | ||
(1) the sum of (i) 50% of the Incremental Income Tax | ||
attributable to
New Employees at the Applicant's project and | ||
(ii) 10% of the training costs of New Employees; or (2) 100% of | ||
the Incremental Income Tax attributable to
New Employees at the | ||
Applicant's project. However, if the project is located in an | ||
underserved area, then the amount of the Credit may not exceed | ||
the lesser of: (1) the sum of (i) 75% of the Incremental Income | ||
Tax attributable to
New Employees at the Applicant's project | ||
and (ii) 10% of the training costs of New Employees; or (2) | ||
100% of the Incremental Income Tax attributable to
New | ||
Employees at the Applicant's project. If an Applicant agrees to | ||
hire the required number of New Employees, then the maximum | ||
amount of the Credit for that Applicant may be increased by an | ||
amount not to exceed 25% of the Incremental Income Tax | ||
attributable to retained employees at the Applicant's project; | ||
provided that, in order to receive the increase for retained | ||
employees, the Applicant must provide the additional evidence | ||
required under paragraph (3) of subsection (b) of Section 5-25.
| ||
"Department" means the Department of Commerce and Economic | ||
Opportunity.
| ||
"Director" means the Director of Commerce and Economic | ||
Opportunity.
| ||
"Full-time Employee" means an individual who is employed | ||
for consideration
for at least 35 hours each week or who | ||
renders any other standard of service
generally accepted by | ||
industry custom or practice as full-time employment. An | ||
individual for whom a W-2 is issued by a Professional Employer | ||
Organization (PEO) is a full-time employee if employed in the | ||
service of the Applicant for consideration for at least 35 | ||
hours each week or who renders any other standard of service | ||
generally accepted by industry custom or practice as full-time | ||
employment to Applicant.
| ||
"Incremental Income Tax" means the total amount withheld | ||
during the taxable
year from the compensation of New Employees | ||
and, if applicable, retained employees under Article 7 of the | ||
Illinois
Income Tax Act arising from employment at a project | ||
that is the subject of an
Agreement.
| ||
"New Construction EDGE Agreement" means the Agreement | ||
between a Taxpayer and the Department under the provisions of | ||
Section 5-51 of this Act. | ||
"New Construction EDGE Credit" means an amount agreed to | ||
between the Department and the Applicant under this Act as part | ||
of a New Construction EDGE Agreement that does not exceed 50% | ||
of the Incremental Income Tax attributable to New Construction | ||
EDGE Employees at the Applicant's project; however, if the New | ||
Construction EDGE Project is located in an underserved area, | ||
then the amount of the New Construction EDGE Credit may not | ||
exceed 75% of the Incremental Income Tax attributable to New | ||
Construction EDGE Employees at the Applicant's New | ||
Construction EDGE Project. | ||
"New Construction EDGE Employee" means a laborer or worker | ||
who is employed by an Illinois contractor or subcontractor in | ||
the actual construction work on the site of a New Construction | ||
EDGE Project, pursuant to a New Construction EDGE Agreement. | ||
"New Construction EDGE Incremental Income Tax" means the | ||
total amount withheld during the taxable year from the | ||
compensation of New Construction EDGE Employees. | ||
"New Construction EDGE Project" means the building of a | ||
Taxpayer's structure or building, or making improvements of any | ||
kind to real property. "New Construction EDGE Project" does not | ||
include the routine operation, routine repair, or routine | ||
maintenance of existing structures, buildings, or real | ||
property. | ||
"New Employee" means:
| ||
(a) A Full-time Employee first employed by a Taxpayer | ||
in the project
that is the subject of an Agreement and who | ||
is hired after the Taxpayer
enters into the tax credit | ||
Agreement.
| ||
(b) The term "New Employee" does not include:
| ||
(1) an employee of the Taxpayer who performs a job | ||
that was previously
performed by another employee, if | ||
that job existed for at least 6
months before hiring | ||
the employee;
| ||
(2) an employee of the Taxpayer who was previously | ||
employed in
Illinois by a Related Member of the | ||
Taxpayer and whose employment was
shifted to the | ||
Taxpayer after the Taxpayer entered into the tax credit
| ||
Agreement; or
| ||
(3) a child, grandchild, parent, or spouse, other | ||
than a spouse who
is legally separated from the | ||
individual, of any individual who has a direct
or an | ||
indirect ownership interest of at least 5% in the | ||
profits, capital, or
value of the Taxpayer.
| ||
(c) Notwithstanding paragraph (1) of subsection (b), | ||
an employee may be
considered a New Employee under the | ||
Agreement if the employee performs a job
that was | ||
previously performed by an employee who was:
| ||
(1) treated under the Agreement as a New Employee; | ||
and
| ||
(2) promoted by the Taxpayer to another job.
| ||
(d) Notwithstanding subsection (a), the Department may | ||
award Credit to an
Applicant with respect to an employee | ||
hired prior to the date of the Agreement
if:
| ||
(1) the Applicant is in receipt of a letter from | ||
the Department stating
an
intent to enter into a credit | ||
Agreement;
| ||
(2) the letter described in paragraph (1) is issued | ||
by the
Department not later than 15 days after the | ||
effective date of this Act; and
| ||
(3) the employee was hired after the date the | ||
letter described in
paragraph (1) was issued.
| ||
"Noncompliance Date" means, in the case of a Taxpayer that | ||
is not complying
with the requirements of the Agreement or the | ||
provisions of this Act, the day
following the last date upon | ||
which the Taxpayer was in compliance with the
requirements of | ||
the Agreement and the provisions of this Act, as determined
by | ||
the Director, pursuant to Section 5-65.
| ||
"Pass Through Entity" means an entity that is exempt from | ||
the tax under
subsection (b) or (c) of Section 205 of the | ||
Illinois Income Tax Act.
| ||
"Professional Employer Organization" (PEO) means an | ||
employee leasing company, as defined in Section 206.1(A)(2) of | ||
the Illinois Unemployment Insurance Act.
| ||
"Related Member" means a person that, with respect to the | ||
Taxpayer during
any portion of the taxable year, is any one of | ||
the following:
| ||
(1) An individual stockholder, if the stockholder and | ||
the members of the
stockholder's family (as defined in | ||
Section 318 of the Internal Revenue Code)
own directly, | ||
indirectly, beneficially, or constructively, in the | ||
aggregate,
at least 50% of the value of the Taxpayer's | ||
outstanding stock.
| ||
(2) A partnership, estate, or trust and any partner or | ||
beneficiary,
if the partnership, estate, or trust, and its | ||
partners or beneficiaries own
directly, indirectly, | ||
beneficially, or constructively, in the aggregate, at
| ||
least 50% of the profits, capital, stock, or value of the
| ||
Taxpayer.
| ||
(3) A corporation, and any party related to the | ||
corporation in a manner
that would require an attribution | ||
of stock from the corporation to the
party or from the | ||
party to the corporation under the attribution rules
of | ||
Section 318 of the Internal Revenue Code, if the Taxpayer | ||
owns
directly, indirectly, beneficially, or constructively | ||
at least
50% of the value of the corporation's outstanding | ||
stock.
| ||
(4) A corporation and any party related to that | ||
corporation in a manner
that would require an attribution | ||
of stock from the corporation to the party or
from the | ||
party to the corporation under the attribution rules of | ||
Section 318 of
the Internal Revenue Code, if the | ||
corporation and all such related parties own
in the | ||
aggregate at least 50% of the profits, capital, stock, or | ||
value of the
Taxpayer.
| ||
(5) A person to or from whom there is attribution of | ||
stock ownership
in accordance with Section 1563(e) of the | ||
Internal Revenue Code, except,
for purposes of determining | ||
whether a person is a Related Member under
this paragraph, | ||
20% shall be substituted for 5% wherever 5% appears in
| ||
Section 1563(e) of the Internal Revenue Code.
| ||
"Taxpayer" means an individual, corporation, partnership, | ||
or other entity
that has any Illinois Income Tax liability.
| ||
"Underserved area" means a geographic area that meets one | ||
or more of the following conditions: | ||
(1) the area has a poverty rate of at least 20% | ||
according to the latest federal decennial census; | ||
(2) 75% or more of the children in the area participate | ||
in the federal free lunch program according to reported | ||
statistics from the State Board of Education; | ||
(3) at least 20% of the households in the area receive | ||
assistance under the Supplemental Nutrition Assistance | ||
Program (SNAP); or | ||
(4) the area has
an average unemployment rate, as | ||
determined by the Illinois Department of
Employment | ||
Security, that is more than 120% of the national | ||
unemployment average, as
determined by the U.S. Department | ||
of Labor, for a period of at least 2 consecutive calendar | ||
years preceding the date of the application. | ||
(Source: P.A. 100-511, eff. 9-18-17.)
| ||
(35 ILCS 10/5-51 new) | ||
Sec. 5-51. New Construction EDGE Agreement. | ||
(a) Notwithstanding any other provisions of this Act, and | ||
in addition to any Credit otherwise allowed under this Act, | ||
beginning on January 1, 2021, there is allowed a New | ||
Construction EDGE Credit for eligible Applicants that meet the | ||
following criteria: | ||
(1) the Department has certified that the Applicant | ||
meets all requirements of Sections 5-15, 5-20, and 5-25; | ||
and | ||
(2) the Department has certified that, pursuant to | ||
Section 5-20, the Applicant's Agreement includes a capital | ||
investment of at least $10,000,000 in a New Construction | ||
EDGE Project to be placed in service within the State as a | ||
direct result of an Agreement entered into pursuant to this | ||
Section. | ||
(b) The Department shall notify each Applicant during the | ||
application process that their project is eligible for a New | ||
Construction EDGE Credit. The Department shall create a | ||
separate application to be filled out by the Applicant | ||
regarding the New Construction EDGE credit. The Application | ||
shall include the following: | ||
(1) a detailed description of the New Construction EDGE | ||
Project that is subject to the New Construction EDGE | ||
Agreement, including the location and amount of the | ||
investment and jobs created or retained; | ||
(2) the duration of the New Construction EDGE Credit | ||
and the first taxable year for which the Credit may be | ||
claimed; | ||
(3) the New Construction EDGE Credit amount that will | ||
be allowed for each taxable year; | ||
(4) a requirement that the Director is authorized to | ||
verify with the appropriate State agencies the amount of | ||
the incremental income tax withheld by a Taxpayer, and | ||
after doing so, shall issue a certificate to the Taxpayer | ||
stating that the amounts have been verified; | ||
(5) the amount of the capital investment, which may at | ||
no point be less than $10,000,000, the time period of | ||
placing the New Construction EDGE Project in service, and | ||
the designated location in Illinois for the investment; | ||
(6) a requirement that the Taxpayer shall provide | ||
written notification to the Director not more than 30 days | ||
after the Taxpayer determines that the capital investment | ||
of at least $10,000,000 is not or will not be achieved or | ||
maintained as set forth in the terms and conditions of the | ||
Agreement; | ||
(7) a detailed provision that the Taxpayer shall be | ||
awarded a New Construction EDGE Credit upon the verified | ||
completion and occupancy of a New Construction EDGE | ||
Project; and | ||
(8) any other performance conditions, including the | ||
ability to verify that a New Construction EDGE Project is | ||
built and completed, or that contract provisions as the | ||
Department determines are appropriate. | ||
(c) The Department shall post on its website the terms of | ||
each New Construction EDGE Agreement entered into under this | ||
Act on or after the effective date of this amendatory Act of | ||
the 101st General Assembly. Such information shall be posted | ||
within 10 days after entering into the Agreement and must | ||
include the following: | ||
(1) the name of the recipient business; | ||
(2) the location of the project; | ||
(3) the estimated value of the credit; and | ||
(4) whether or not the project is located in an | ||
underserved area. | ||
(d) The Department, in collaboration with the Department of | ||
Labor, shall require that certified payroll reporting, | ||
pursuant to Section 5-56 of this Act, be completed in order to | ||
verify the wages and any other necessary information which the | ||
Department may deem necessary to ascertain and certify the | ||
total number of New Construction EDGE Employees subject to a | ||
New Construction EDGE Agreement and amount of a New | ||
Construction EDGE Credit. | ||
(e) The total aggregate amount of credits awarded under the | ||
Blue Collar Jobs Act (Article 20 of this amendatory Act of the | ||
101st General Assembly) shall not exceed $20,000,000 in any | ||
State fiscal year. | ||
(35 ILCS 10/5-56 new) | ||
Sec. 5-56. Certified payroll. | ||
(a) Each contractor and subcontractor that is engaged in | ||
and is executing a New Construction EDGE Project for a | ||
Taxpayer, pursuant to a New Construction EDGE Agreement shall: | ||
(1) make and keep, for a period of 5 years from the | ||
date of the last payment made on or after the effective | ||
date of this amendatory Act of the 101st General Assembly | ||
on a contract or subcontract for a New Construction EDGE | ||
Project pursuant to a New Construction EDGE Agreement, | ||
records of all laborers and other workers employed by the | ||
contractor or subcontractor on the project; the records | ||
shall include: | ||
(A) the worker's name; | ||
(B) the worker's address; | ||
(C) the worker's telephone number, if available; | ||
(D) the worker's social security number; | ||
(E) the worker's classification or | ||
classifications; | ||
(F) the worker's gross and net wages paid in each | ||
pay period; | ||
(G) the worker's number of hours worked each day; | ||
(H) the worker's starting and ending times of work | ||
each day; | ||
(I) the worker's hourly wage rate; and | ||
(J) the worker's hourly overtime wage rate; and | ||
(2) no later than the 15th day of each calendar month, | ||
provide a certified payroll for the immediately preceding | ||
month to the taxpayer in charge of the project; within 5 | ||
business days after receiving the certified payroll, the | ||
taxpayer shall file the certified payroll with the | ||
Department of Labor and the Department of Commerce and | ||
Economic Opportunity; a certified payroll must be filed for | ||
only those calendar months during which construction on a | ||
New Construction EDGE Project has occurred; the certified | ||
payroll shall consist of a complete copy of the records | ||
identified in paragraph (1), but may exclude the starting | ||
and ending times of work each day; the certified payroll | ||
shall be accompanied by a statement signed by the | ||
contractor or subcontractor or an officer, employee, or | ||
agent of the contractor or subcontractor which avers that: | ||
(A) he or she has examined the certified payroll | ||
records required to be submitted by the Act and such | ||
records are true and accurate; and | ||
(B) the contractor or subcontractor is aware that | ||
filing a certified payroll that he or she knows to be | ||
false is a Class A misdemeanor. | ||
A general contractor is not prohibited from relying on a | ||
certified payroll of a lower-tier subcontractor, provided the | ||
general contractor does not knowingly rely upon a | ||
subcontractor's false certification. | ||
Any contractor or subcontractor subject to this Section, | ||
and any officer, employee, or agent of such contractor or | ||
subcontractor whose duty as an officer, employee, or agent it | ||
is to file a certified payroll under this Section, who | ||
willfully fails to file such a certified payroll on or before | ||
the date such certified payroll is required to be filed and any | ||
person who willfully files a false certified payroll that is | ||
false as to any material fact is in violation of this Act and | ||
guilty of a Class A misdemeanor. | ||
The taxpayer in charge of the project shall keep the | ||
records submitted in accordance with this subsection on or | ||
after the effective date of this amendatory Act of the 101st | ||
General Assembly for a period of 5 years from the date of the | ||
last payment for work on a contract or subcontract for the | ||
project. | ||
The records submitted in accordance with this subsection | ||
shall be considered public records, except an employee's | ||
address, telephone number, and social security number, and made | ||
available in accordance with the Freedom of Information Act. | ||
The Department of Labor shall accept any reasonable submissions | ||
by the contractor that meet the requirements of this subsection | ||
and shall share the information with the Department in order to | ||
comply with the awarding of New Construction EDGE Credits. A | ||
contractor, subcontractor, or public body may retain records | ||
required under this Section in paper or electronic format. | ||
Upon 7 business days' notice, the contractor and each | ||
subcontractor shall make available for inspection and copying | ||
at a location within this State during reasonable hours, the | ||
records identified in paragraph (1) of this subsection to the | ||
taxpayer in charge of the project, its officers and agents, the | ||
Director of Labor and his deputies and agents, and to federal, | ||
State, or local law enforcement agencies and prosecutors. | ||
Section 20-20. The River Edge Redevelopment Zone Act is | ||
amended by changing Section 10-3 and by adding Sections 10-10.3 | ||
and 10-10.4 as follows: | ||
(65 ILCS 115/10-3)
| ||
Sec. 10-3. Definitions. As used in this Act: | ||
"Department" means the Department of Commerce and Economic | ||
Opportunity. | ||
"River Edge Redevelopment Zone" means an area of the State | ||
certified by the Department as a River Edge Redevelopment Zone | ||
pursuant to this Act. | ||
"Designated zone organization" means an association or | ||
entity: (1) the members of which are substantially all | ||
residents of the River Edge Redevelopment Zone or of the | ||
municipality in which the River Edge Redevelopment Zone is | ||
located; (2) the board of directors of which is elected by the | ||
members of the organization; (3) that satisfies the criteria | ||
set forth in Section 501(c) (3) or 501(c) (4) of the Internal | ||
Revenue Code; and (4) that exists primarily for the purpose of | ||
performing within the zone, for the benefit of the residents | ||
and businesses thereof, any of the functions set forth in | ||
Section 8 of this Act. | ||
"Incremental income tax" means the total amount withheld | ||
during the taxable year from the compensation of River Edge | ||
Construction Jobs Employees. | ||
"Agency" means: each officer, board, commission, and | ||
agency created by the Constitution, in the executive branch of | ||
State government, other than the State Board of Elections; each | ||
officer, department, board, commission, agency, institution, | ||
authority, university, and body politic and corporate of the | ||
State; each administrative unit or corporate outgrowth of the | ||
State government that is created by or pursuant to statute, | ||
other than units of local government and their officers, school | ||
districts, and boards of election commissioners; and each | ||
administrative unit or corporate outgrowth of the above and as | ||
may be created by executive order of the Governor. No entity is | ||
an "agency" for the purposes of this Act unless the entity is | ||
authorized by law to make rules or regulations. | ||
"River Edge construction jobs credit" means an amount equal | ||
to 50% of the incremental income tax attributable to River Edge | ||
construction employees employed on a River Edge construction | ||
jobs project. However, the amount may equal 75% of the | ||
incremental income tax attributable to River Edge construction | ||
employees employed on a River Edge construction jobs project | ||
located in an underserved area. The total aggregate amount of | ||
credits awarded under the Blue Collar Jobs Act (Article 20 of | ||
this amendatory Act of the 101st General Assembly) shall not | ||
exceed $20,000,000 in any State fiscal year. | ||
"River Edge construction jobs employee" means a laborer or | ||
worker who is employed by an Illinois contractor or | ||
subcontractor in the actual construction work on the site of a | ||
River Edge construction jobs project. | ||
"River Edge construction jobs project" means building a | ||
structure or building, or making improvements of any kind to | ||
real property, in a River Edge Redevelopment Zone that is built | ||
or improved in the course of completing a qualified | ||
rehabilitation plan. "River Edge construction jobs project" | ||
does not include the routine operation, routine repair, or | ||
routine maintenance of existing structures, buildings, or real | ||
property. | ||
"Rule" means each agency statement of general | ||
applicability that implements, applies, interprets, or | ||
prescribes law or policy, but does not include (i) statements | ||
concerning only the internal management of an agency and not | ||
affecting private rights or procedures available to persons or | ||
entities outside the agency, (ii) intra-agency memoranda, or | ||
(iii) the prescription of standardized forms.
| ||
"Underserved area" means a geographic area that meets one | ||
or more of the following conditions: | ||
(1) the area has a poverty rate of at least 20% | ||
according to the latest federal decennial census; | ||
(2) 75% or more of the children in the area participate | ||
in the federal free lunch program according to reported | ||
statistics from the State Board of Education; | ||
(3) at least 20% of the households in the area receive | ||
assistance under the Supplemental Nutrition Assistance | ||
Program (SNAP); or | ||
(4) the area has an average unemployment rate, as | ||
determined by the Illinois Department of Employment | ||
Security, that is more than 120% of the national | ||
unemployment average, as determined by the U.S. Department | ||
of Labor, for a period of at least 2 consecutive calendar | ||
years preceding the date of the application. | ||
(Source: P.A. 94-1021, eff. 7-12-06.) | ||
(65 ILCS 115/10-10.3 new) | ||
Sec. 10-10.3. River Edge Construction Jobs Credit. | ||
(a) Beginning on January 1, 2021, a business entity may | ||
receive a tax credit against the tax imposed under subsections | ||
(a) and (b) of Section 201 in an amount equal to 50% (or 75% if | ||
the project is located in an underserved area) of the amount of | ||
the incremental income tax attributable to River Edge | ||
construction jobs employees employed in the course of | ||
completing a River Edge construction jobs project. The credit | ||
allowed under this Section shall apply only to taxpayers that | ||
make a capital investment of at least $1,000,000 in a qualified | ||
rehabilitation plan. | ||
(b) A business entity seeking a credit under this Section | ||
must submit an application to the Department describing the | ||
nature and benefit of the River Edge construction jobs project | ||
to the qualified rehabilitation project and the River Edge | ||
Redevelopment Zone. The Department may adopt any necessary | ||
rules in order to administer the provisions of this Section. | ||
(c) Within 45 days after the receipt of an application, the | ||
Department shall give notice to the applicant as to whether the | ||
application has been approved or disapproved. If the Department | ||
disapproves the application, it shall specify the reasons for | ||
this decision and allow 60 days for the applicant to amend and | ||
resubmit its application. The Department shall provide | ||
assistance upon request to applicants. Resubmitted | ||
applications shall receive the Department's approval or | ||
disapproval within 30 days of resubmission. Those resubmitted | ||
applications satisfying initial Department objectives shall be | ||
approved unless reasonable circumstances warrant disapproval. | ||
(d) On an annual basis, the designated zone organization | ||
shall furnish a statement to the Department on the programmatic | ||
and financial status of any approved project and an audited | ||
financial statement of the project. | ||
(e) The Department shall certify to the Department of | ||
Revenue the identity of the taxpayers who are eligible for | ||
River Edge construction jobs credits and the amounts of River | ||
Edge construction jobs credits awarded in each taxable year. | ||
(f) The Department, in collaboration with the Department of | ||
Labor, shall require certified payroll reporting, pursuant to | ||
Section 10-10.4 of this Act, be completed in order to verify | ||
the wages and any other necessary information which the | ||
Department may deem necessary to ascertain and certify the | ||
total number of River Edge construction jobs employees and | ||
determine the amount of a River Edge construction jobs credit. | ||
(g) The total aggregate amount of credits awarded under the | ||
Blue Collar Jobs Act (Article 20 of this amendatory Act of the | ||
101st General Assembly) shall not exceed $20,000,000 in any | ||
State fiscal year. | ||
(65 ILCS 115/10-10.4 new) | ||
Sec. 10-10.4. Certified payroll. | ||
(a) Any contractor and each subcontractor who is engaged in | ||
and is executing a River Edge construction jobs project for a | ||
taxpayer that is entitled to a credit pursuant to Section | ||
10-10.3 of this Act shall: | ||
(1) make and keep, for a period of 5 years from the | ||
date of the last payment made on or after the effective | ||
date of this amendatory Act of the 101st General Assembly | ||
on a contract or subcontract for a River Edge Construction | ||
Jobs Project in a River Edge Redevelopment Zone records of | ||
all laborers and other workers employed by them on the | ||
project; the records shall include: | ||
(A) the worker's name; | ||
(B) the worker's address; | ||
(C) the worker's telephone number, if available; | ||
(D) the worker's social security number; | ||
(E) the worker's classification or | ||
classifications; | ||
(F) the worker's gross and net wages paid in each | ||
pay period; | ||
(G) the worker's number of hours worked each day; | ||
(H) the worker's starting and ending times of work | ||
each day; | ||
(I) the worker's hourly wage rate; and | ||
(J) the worker's hourly overtime wage rate; | ||
(2) no later than the 15th day of each calendar month, | ||
provide a certified payroll for the immediately preceding | ||
month to the taxpayer in charge of the project; within 5 | ||
business days after receiving the certified payroll, the | ||
taxpayer shall file the certified payroll with the | ||
Department of Labor and the Department of Commerce and | ||
Economic Opportunity; a certified payroll must be filed for | ||
only those calendar months during which construction on a | ||
River Edge Construction Jobs Project has occurred; the | ||
certified payroll shall consist of a complete copy of the | ||
records identified in paragraph (1), but may exclude the | ||
starting and ending times of work each day; the certified | ||
payroll shall be accompanied by a statement signed by the | ||
contractor or subcontractor or an officer, employee, or | ||
agent of the contractor or subcontractor which avers that: | ||
(A) he or she has examined the certified payroll | ||
records required to be submitted and such records are | ||
true and accurate; and | ||
(B) the contractor or subcontractor is aware that | ||
filing a certified payroll that he or she knows to be | ||
false is a Class A misdemeanor. | ||
A general contractor is not prohibited from relying on a | ||
certified payroll of a lower-tier subcontractor, provided the | ||
general contractor does not knowingly rely upon a | ||
subcontractor's false certification. | ||
Any contractor or subcontractor subject to this Section, | ||
and any officer, employee, or agent of such contractor or | ||
subcontractor whose duty as an officer, employee, or agent it | ||
is to file a certified payroll under this Section, who | ||
willfully fails to file such a certified payroll on or before | ||
the date such certified payroll is required to be filed and any | ||
person who willfully files a false certified payroll that is | ||
false as to any material fact is in violation of this Act and | ||
guilty of a Class A misdemeanor. | ||
The taxpayer in charge of the project shall keep the | ||
records submitted in accordance with this Section on or after | ||
the effective date of this amendatory Act of the 101st General | ||
Assembly for a period of 5 years from the date of the last | ||
payment for work on a contract or subcontract for the project. | ||
The records submitted in accordance with this subsection | ||
shall be considered public records, except an employee's | ||
address, telephone number, and social security number, and made | ||
available in accordance with the Freedom of Information Act. | ||
The Department of Labor shall accept any reasonable submissions | ||
by the contractor that meet the requirements of this subsection | ||
and shall share the information with the Department in order to | ||
comply with the awarding of River Edge construction jobs | ||
credits. A contractor, subcontractor, or public body may retain | ||
records required under this Section in paper or electronic | ||
format. | ||
Upon 7 business days' notice, the contractor and each | ||
subcontractor shall make available for inspection and copying | ||
at a location within this State during reasonable hours, the | ||
records identified in paragraph (1) of this subsection to the | ||
taxpayer in charge of the project, its officers and agents, the | ||
Director of Labor and his deputies and agents, and to federal, | ||
State, or local law enforcement agencies and prosecutors. | ||
ARTICLE 25. MANUFACTURING MACHINERY AND EQUIPMENT | ||
Section 25-5. The Use Tax Act is amended by changing | ||
Sections 3-5 and 3-50 as follows:
| ||
(35 ILCS 105/3-5)
| ||
Sec. 3-5. Exemptions. Use of the following tangible | ||
personal property is exempt from the tax imposed by this Act:
| ||
(1) Personal property purchased from a corporation, | ||
society, association,
foundation, institution, or | ||
organization, other than a limited liability
company, that is | ||
organized and operated as a not-for-profit service enterprise
| ||
for the benefit of persons 65 years of age or older if the | ||
personal property was not purchased by the enterprise for the | ||
purpose of resale by the
enterprise.
| ||
(2) Personal property purchased by a not-for-profit | ||
Illinois county
fair association for use in conducting, | ||
operating, or promoting the
county fair.
| ||
(3) Personal property purchased by a not-for-profit
arts or | ||
cultural organization that establishes, by proof required by | ||
the
Department by
rule, that it has received an exemption under | ||
Section 501(c)(3) of the Internal
Revenue Code and that is | ||
organized and operated primarily for the
presentation
or | ||
support of arts or cultural programming, activities, or | ||
services. These
organizations include, but are not limited to, | ||
music and dramatic arts
organizations such as symphony | ||
orchestras and theatrical groups, arts and
cultural service | ||
organizations, local arts councils, visual arts organizations,
| ||
and media arts organizations.
On and after July 1, 2001 (the | ||
effective date of Public Act 92-35), however, an entity | ||
otherwise eligible for this exemption shall not
make tax-free | ||
purchases unless it has an active identification number issued | ||
by
the Department.
| ||
(4) Personal property purchased by a governmental body, by | ||
a
corporation, society, association, foundation, or | ||
institution organized and
operated exclusively for charitable, | ||
religious, or educational purposes, or
by a not-for-profit | ||
corporation, society, association, foundation,
institution, or | ||
organization that has no compensated officers or employees
and | ||
that is organized and operated primarily for the recreation of | ||
persons
55 years of age or older. A limited liability company | ||
may qualify for the
exemption under this paragraph only if the | ||
limited liability company is
organized and operated | ||
exclusively for educational purposes. On and after July
1, | ||
1987, however, no entity otherwise eligible for this exemption | ||
shall make
tax-free purchases unless it has an active exemption | ||
identification number
issued by the Department.
| ||
(5) Until July 1, 2003, a passenger car that is a | ||
replacement vehicle to
the extent that the
purchase price of | ||
the car is subject to the Replacement Vehicle Tax.
| ||
(6) Until July 1, 2003 and beginning again on September 1, | ||
2004 through August 30, 2014, graphic arts machinery and | ||
equipment, including
repair and replacement
parts, both new and | ||
used, and including that manufactured on special order,
| ||
certified by the purchaser to be used primarily for graphic | ||
arts production,
and including machinery and equipment | ||
purchased for lease.
Equipment includes chemicals or chemicals | ||
acting as catalysts but only if
the
chemicals or chemicals | ||
acting as catalysts effect a direct and immediate change
upon a | ||
graphic arts product. Beginning on July 1, 2017, graphic arts | ||
machinery and equipment is included in the manufacturing and | ||
assembling machinery and equipment exemption under paragraph | ||
(18).
| ||
(7) Farm chemicals.
| ||
(8) Legal tender, currency, medallions, or gold or silver | ||
coinage issued by
the State of Illinois, the government of the | ||
United States of America, or the
government of any foreign | ||
country, and bullion.
| ||
(9) Personal property purchased from a teacher-sponsored | ||
student
organization affiliated with an elementary or | ||
secondary school located in
Illinois.
| ||
(10) A motor vehicle that is used for automobile renting, | ||
as defined in the
Automobile Renting Occupation and Use Tax | ||
Act.
| ||
(11) Farm machinery and equipment, both new and used,
| ||
including that manufactured on special order, certified by the | ||
purchaser
to be used primarily for production agriculture or | ||
State or federal
agricultural programs, including individual | ||
replacement parts for
the machinery and equipment, including | ||
machinery and equipment
purchased
for lease,
and including | ||
implements of husbandry defined in Section 1-130 of
the | ||
Illinois Vehicle Code, farm machinery and agricultural | ||
chemical and
fertilizer spreaders, and nurse wagons required to | ||
be registered
under Section 3-809 of the Illinois Vehicle Code,
| ||
but excluding other motor
vehicles required to be
registered | ||
under the Illinois Vehicle Code.
Horticultural polyhouses or | ||
hoop houses used for propagating, growing, or
overwintering | ||
plants shall be considered farm machinery and equipment under
| ||
this item (11).
Agricultural chemical tender tanks and dry | ||
boxes shall include units sold
separately from a motor vehicle | ||
required to be licensed and units sold mounted
on a motor | ||
vehicle required to be licensed if the selling price of the | ||
tender
is separately stated.
| ||
Farm machinery and equipment shall include precision | ||
farming equipment
that is
installed or purchased to be | ||
installed on farm machinery and equipment
including, but not | ||
limited to, tractors, harvesters, sprayers, planters,
seeders, | ||
or spreaders.
Precision farming equipment includes, but is not | ||
limited to, soil testing
sensors, computers, monitors, | ||
software, global positioning
and mapping systems, and other | ||
such equipment.
| ||
Farm machinery and equipment also includes computers, | ||
sensors, software, and
related equipment used primarily in the
| ||
computer-assisted operation of production agriculture | ||
facilities, equipment,
and
activities such as, but not limited | ||
to,
the collection, monitoring, and correlation of
animal and | ||
crop data for the purpose of
formulating animal diets and | ||
agricultural chemicals. This item (11) is exempt
from the | ||
provisions of
Section 3-90.
| ||
(12) Until June 30, 2013, fuel and petroleum products sold | ||
to or used by an air common
carrier, certified by the carrier | ||
to be used for consumption, shipment, or
storage in the conduct | ||
of its business as an air common carrier, for a
flight destined | ||
for or returning from a location or locations
outside the | ||
United States without regard to previous or subsequent domestic
| ||
stopovers.
| ||
Beginning July 1, 2013, fuel and petroleum products sold to | ||
or used by an air carrier, certified by the carrier to be used | ||
for consumption, shipment, or storage in the conduct of its | ||
business as an air common carrier, for a flight that (i) is | ||
engaged in foreign trade or is engaged in trade between the | ||
United States and any of its possessions and (ii) transports at | ||
least one individual or package for hire from the city of | ||
origination to the city of final destination on the same | ||
aircraft, without regard to a change in the flight number of | ||
that aircraft. | ||
(13) Proceeds of mandatory service charges separately
| ||
stated on customers' bills for the purchase and consumption of | ||
food and
beverages purchased at retail from a retailer, to the | ||
extent that the proceeds
of the service charge are in fact | ||
turned over as tips or as a substitute
for tips to the | ||
employees who participate directly in preparing, serving,
| ||
hosting or cleaning up the food or beverage function with | ||
respect to which
the service charge is imposed.
| ||
(14) Until July 1, 2003, oil field exploration, drilling, | ||
and production
equipment,
including (i) rigs and parts of rigs, | ||
rotary
rigs, cable tool rigs, and workover rigs, (ii) pipe and | ||
tubular goods,
including casing and drill strings, (iii) pumps | ||
and pump-jack units, (iv)
storage tanks and flow lines, (v) any | ||
individual replacement part for oil
field exploration, | ||
drilling, and production equipment, and (vi) machinery and
| ||
equipment purchased
for lease; but excluding motor vehicles | ||
required to be registered under the
Illinois Vehicle Code.
| ||
(15) Photoprocessing machinery and equipment, including | ||
repair and
replacement parts, both new and used, including that
| ||
manufactured on special order, certified by the purchaser to be | ||
used
primarily for photoprocessing, and including
| ||
photoprocessing machinery and equipment purchased for lease.
| ||
(16) Until July 1, 2023, coal and aggregate exploration, | ||
mining, off-highway hauling,
processing, maintenance, and | ||
reclamation equipment,
including replacement parts and | ||
equipment, and
including equipment purchased for lease, but | ||
excluding motor
vehicles required to be registered under the | ||
Illinois Vehicle Code. The changes made to this Section by | ||
Public Act 97-767 apply on and after July 1, 2003, but no claim | ||
for credit or refund is allowed on or after August 16, 2013 | ||
(the effective date of Public Act 98-456)
for such taxes paid | ||
during the period beginning July 1, 2003 and ending on August | ||
16, 2013 (the effective date of Public Act 98-456).
| ||
(17) Until July 1, 2003, distillation machinery and | ||
equipment, sold as a
unit or kit,
assembled or installed by the | ||
retailer, certified by the user to be used
only for the | ||
production of ethyl alcohol that will be used for consumption
| ||
as motor fuel or as a component of motor fuel for the personal | ||
use of the
user, and not subject to sale or resale.
| ||
(18) Manufacturing and assembling machinery and equipment | ||
used
primarily in the process of manufacturing or assembling | ||
tangible
personal property for wholesale or retail sale or | ||
lease, whether that sale
or lease is made directly by the | ||
manufacturer or by some other person,
whether the materials | ||
used in the process are
owned by the manufacturer or some other | ||
person, or whether that sale or
lease is made apart from or as | ||
an incident to the seller's engaging in
the service occupation | ||
of producing machines, tools, dies, jigs,
patterns, gauges, or | ||
other similar items of no commercial value on
special order for | ||
a particular purchaser. The exemption provided by this | ||
paragraph (18) includes production related tangible personal | ||
property, as defined in Section 3-50, purchased on or after | ||
July 1, 2019. The exemption provided by this paragraph (18) | ||
does not include machinery and equipment used in (i) the | ||
generation of electricity for wholesale or retail sale; (ii) | ||
the generation or treatment of natural or artificial gas for | ||
wholesale or retail sale that is delivered to customers through | ||
pipes, pipelines, or mains; or (iii) the treatment of water for | ||
wholesale or retail sale that is delivered to customers through | ||
pipes, pipelines, or mains. The provisions of Public Act 98-583 | ||
are declaratory of existing law as to the meaning and scope of | ||
this exemption. Beginning on July 1, 2017, the exemption | ||
provided by this paragraph (18) includes, but is not limited | ||
to, graphic arts machinery and equipment, as defined in | ||
paragraph (6) of this Section.
| ||
(19) Personal property delivered to a purchaser or | ||
purchaser's donee
inside Illinois when the purchase order for | ||
that personal property was
received by a florist located | ||
outside Illinois who has a florist located
inside Illinois | ||
deliver the personal property.
| ||
(20) Semen used for artificial insemination of livestock | ||
for direct
agricultural production.
| ||
(21) Horses, or interests in horses, registered with and | ||
meeting the
requirements of any of the
Arabian Horse Club | ||
Registry of America, Appaloosa Horse Club, American Quarter
| ||
Horse Association, United States
Trotting Association, or | ||
Jockey Club, as appropriate, used for
purposes of breeding or | ||
racing for prizes. This item (21) is exempt from the provisions | ||
of Section 3-90, and the exemption provided for under this item | ||
(21) applies for all periods beginning May 30, 1995, but no | ||
claim for credit or refund is allowed on or after January 1, | ||
2008
for such taxes paid during the period beginning May 30, | ||
2000 and ending on January 1, 2008.
| ||
(22) Computers and communications equipment utilized for | ||
any
hospital
purpose
and equipment used in the diagnosis,
| ||
analysis, or treatment of hospital patients purchased by a | ||
lessor who leases
the
equipment, under a lease of one year or | ||
longer executed or in effect at the
time the lessor would | ||
otherwise be subject to the tax imposed by this Act, to a
| ||
hospital
that has been issued an active tax exemption | ||
identification number by
the
Department under Section 1g of the | ||
Retailers' Occupation Tax Act. If the
equipment is leased in a | ||
manner that does not qualify for
this exemption or is used in | ||
any other non-exempt manner, the lessor
shall be liable for the
| ||
tax imposed under this Act or the Service Use Tax Act, as the | ||
case may
be, based on the fair market value of the property at | ||
the time the
non-qualifying use occurs. No lessor shall collect | ||
or attempt to collect an
amount (however
designated) that | ||
purports to reimburse that lessor for the tax imposed by this
| ||
Act or the Service Use Tax Act, as the case may be, if the tax | ||
has not been
paid by the lessor. If a lessor improperly | ||
collects any such amount from the
lessee, the lessee shall have | ||
a legal right to claim a refund of that amount
from the lessor. | ||
If, however, that amount is not refunded to the lessee for
any | ||
reason, the lessor is liable to pay that amount to the | ||
Department.
| ||
(23) Personal property purchased by a lessor who leases the
| ||
property, under
a
lease of
one year or longer executed or in | ||
effect at the time
the lessor would otherwise be subject to the | ||
tax imposed by this Act,
to a governmental body
that has been | ||
issued an active sales tax exemption identification number by | ||
the
Department under Section 1g of the Retailers' Occupation | ||
Tax Act.
If the
property is leased in a manner that does not | ||
qualify for
this exemption
or used in any other non-exempt | ||
manner, the lessor shall be liable for the
tax imposed under | ||
this Act or the Service Use Tax Act, as the case may
be, based | ||
on the fair market value of the property at the time the
| ||
non-qualifying use occurs. No lessor shall collect or attempt | ||
to collect an
amount (however
designated) that purports to | ||
reimburse that lessor for the tax imposed by this
Act or the | ||
Service Use Tax Act, as the case may be, if the tax has not been
| ||
paid by the lessor. If a lessor improperly collects any such | ||
amount from the
lessee, the lessee shall have a legal right to | ||
claim a refund of that amount
from the lessor. If, however, | ||
that amount is not refunded to the lessee for
any reason, the | ||
lessor is liable to pay that amount to the Department.
| ||
(24) Beginning with taxable years ending on or after | ||
December
31, 1995
and
ending with taxable years ending on or | ||
before December 31, 2004,
personal property that is
donated for | ||
disaster relief to be used in a State or federally declared
| ||
disaster area in Illinois or bordering Illinois by a | ||
manufacturer or retailer
that is registered in this State to a | ||
corporation, society, association,
foundation, or institution | ||
that has been issued a sales tax exemption
identification | ||
number by the Department that assists victims of the disaster
| ||
who reside within the declared disaster area.
| ||
(25) Beginning with taxable years ending on or after | ||
December
31, 1995 and
ending with taxable years ending on or | ||
before December 31, 2004, personal
property that is used in the | ||
performance of infrastructure repairs in this
State, including | ||
but not limited to municipal roads and streets, access roads,
| ||
bridges, sidewalks, waste disposal systems, water and sewer | ||
line extensions,
water distribution and purification | ||
facilities, storm water drainage and
retention facilities, and | ||
sewage treatment facilities, resulting from a State
or | ||
federally declared disaster in Illinois or bordering Illinois | ||
when such
repairs are initiated on facilities located in the | ||
declared disaster area
within 6 months after the disaster.
| ||
(26) Beginning July 1, 1999, game or game birds purchased | ||
at a "game
breeding
and hunting preserve area" as that term is
| ||
used in
the Wildlife Code. This paragraph is exempt from the | ||
provisions
of
Section 3-90.
| ||
(27) A motor vehicle, as that term is defined in Section | ||
1-146
of the
Illinois
Vehicle Code, that is donated to a | ||
corporation, limited liability company,
society, association, | ||
foundation, or institution that is determined by the
Department | ||
to be organized and operated exclusively for educational | ||
purposes.
For purposes of this exemption, "a corporation, | ||
limited liability company,
society, association, foundation, | ||
or institution organized and operated
exclusively for | ||
educational purposes" means all tax-supported public schools,
| ||
private schools that offer systematic instruction in useful | ||
branches of
learning by methods common to public schools and | ||
that compare favorably in
their scope and intensity with the | ||
course of study presented in tax-supported
schools, and | ||
vocational or technical schools or institutes organized and
| ||
operated exclusively to provide a course of study of not less | ||
than 6 weeks
duration and designed to prepare individuals to | ||
follow a trade or to pursue a
manual, technical, mechanical, | ||
industrial, business, or commercial
occupation.
| ||
(28) Beginning January 1, 2000, personal property, | ||
including
food,
purchased through fundraising
events for the | ||
benefit of
a public or private elementary or
secondary school, | ||
a group of those schools, or one or more school
districts if | ||
the events are
sponsored by an entity recognized by the school | ||
district that consists
primarily of volunteers and includes
| ||
parents and teachers of the school children. This paragraph | ||
does not apply
to fundraising
events (i) for the benefit of | ||
private home instruction or (ii)
for which the fundraising | ||
entity purchases the personal property sold at
the events from | ||
another individual or entity that sold the property for the
| ||
purpose of resale by the fundraising entity and that
profits | ||
from the sale to the
fundraising entity. This paragraph is | ||
exempt
from the provisions
of Section 3-90.
| ||
(29) Beginning January 1, 2000 and through December 31, | ||
2001, new or
used automatic vending
machines that prepare and | ||
serve hot food and beverages, including coffee, soup,
and
other | ||
items, and replacement parts for these machines.
Beginning | ||
January 1,
2002 and through June 30, 2003, machines and parts | ||
for machines used in
commercial, coin-operated amusement and | ||
vending business if a use or occupation
tax is paid on the | ||
gross receipts derived from the use of the commercial,
| ||
coin-operated amusement and vending machines.
This
paragraph
| ||
is exempt from the provisions of Section 3-90.
| ||
(30) Beginning January 1, 2001 and through June 30, 2016, | ||
food for human consumption that is to be consumed off the | ||
premises
where it is sold (other than alcoholic beverages, soft | ||
drinks, and food that
has been prepared for immediate | ||
consumption) and prescription and
nonprescription medicines, | ||
drugs, medical appliances, and insulin, urine
testing | ||
materials, syringes, and needles used by diabetics, for human | ||
use, when
purchased for use by a person receiving medical | ||
assistance under Article V of
the Illinois Public Aid Code who | ||
resides in a licensed long-term care facility,
as defined in | ||
the Nursing Home Care Act, or in a licensed facility as defined | ||
in the ID/DD Community Care Act, the MC/DD Act, or the | ||
Specialized Mental Health Rehabilitation Act of 2013.
| ||
(31) Beginning on August 2, 2001 (the effective date of | ||
Public Act 92-227),
computers and communications equipment
| ||
utilized for any hospital purpose and equipment used in the | ||
diagnosis,
analysis, or treatment of hospital patients | ||
purchased by a lessor who leases
the equipment, under a lease | ||
of one year or longer executed or in effect at the
time the | ||
lessor would otherwise be subject to the tax imposed by this | ||
Act, to a
hospital that has been issued an active tax exemption | ||
identification number by
the Department under Section 1g of the | ||
Retailers' Occupation Tax Act. If the
equipment is leased in a | ||
manner that does not qualify for this exemption or is
used in | ||
any other nonexempt manner, the lessor shall be liable for the | ||
tax
imposed under this Act or the Service Use Tax Act, as the | ||
case may be, based on
the fair market value of the property at | ||
the time the nonqualifying use
occurs. No lessor shall collect | ||
or attempt to collect an amount (however
designated) that | ||
purports to reimburse that lessor for the tax imposed by this
| ||
Act or the Service Use Tax Act, as the case may be, if the tax | ||
has not been
paid by the lessor. If a lessor improperly | ||
collects any such amount from the
lessee, the lessee shall have | ||
a legal right to claim a refund of that amount
from the lessor. | ||
If, however, that amount is not refunded to the lessee for
any | ||
reason, the lessor is liable to pay that amount to the | ||
Department.
This paragraph is exempt from the provisions of | ||
Section 3-90.
| ||
(32) Beginning on August 2, 2001 (the effective date of | ||
Public Act 92-227),
personal property purchased by a lessor who | ||
leases the property,
under a lease of one year or longer | ||
executed or in effect at the time the
lessor would otherwise be | ||
subject to the tax imposed by this Act, to a
governmental body | ||
that has been issued an active sales tax exemption
| ||
identification number by the Department under Section 1g of the | ||
Retailers'
Occupation Tax Act. If the property is leased in a | ||
manner that does not
qualify for this exemption or used in any | ||
other nonexempt manner, the lessor
shall be liable for the tax | ||
imposed under this Act or the Service Use Tax Act,
as the case | ||
may be, based on the fair market value of the property at the | ||
time
the nonqualifying use occurs. No lessor shall collect or | ||
attempt to collect
an amount (however designated) that purports | ||
to reimburse that lessor for the
tax imposed by this Act or the | ||
Service Use Tax Act, as the case may be, if the
tax has not been | ||
paid by the lessor. If a lessor improperly collects any such
| ||
amount from the lessee, the lessee shall have a legal right to | ||
claim a refund
of that amount from the lessor. If, however, | ||
that amount is not refunded to
the lessee for any reason, the | ||
lessor is liable to pay that amount to the
Department. This | ||
paragraph is exempt from the provisions of Section 3-90.
| ||
(33) On and after July 1, 2003 and through June 30, 2004, | ||
the use in this State of motor vehicles of
the second division | ||
with a gross vehicle weight in excess of 8,000 pounds and
that | ||
are subject to the commercial distribution fee imposed under | ||
Section
3-815.1 of the Illinois Vehicle Code. Beginning on July | ||
1, 2004 and through June 30, 2005, the use in this State of | ||
motor vehicles of the second division: (i) with a gross vehicle | ||
weight rating in excess of 8,000 pounds; (ii) that are subject | ||
to the commercial distribution fee imposed under Section | ||
3-815.1 of the Illinois Vehicle Code; and (iii) that are | ||
primarily used for commercial purposes. Through June 30, 2005, | ||
this exemption applies to repair and
replacement parts added | ||
after the initial purchase of such a motor vehicle if
that | ||
motor
vehicle is used in a manner that would qualify for the | ||
rolling stock exemption
otherwise provided for in this Act. For | ||
purposes of this paragraph, the term "used for commercial | ||
purposes" means the transportation of persons or property in | ||
furtherance of any commercial or industrial enterprise, | ||
whether for-hire or not.
| ||
(34) Beginning January 1, 2008, tangible personal property | ||
used in the construction or maintenance of a community water | ||
supply, as defined under Section 3.145 of the Environmental | ||
Protection Act, that is operated by a not-for-profit | ||
corporation that holds a valid water supply permit issued under | ||
Title IV of the Environmental Protection Act. This paragraph is | ||
exempt from the provisions of Section 3-90. | ||
(35) Beginning January 1, 2010, materials, parts, | ||
equipment, components, and furnishings incorporated into or | ||
upon an aircraft as part of the modification, refurbishment, | ||
completion, replacement, repair, or maintenance of the | ||
aircraft. This exemption includes consumable supplies used in | ||
the modification, refurbishment, completion, replacement, | ||
repair, and maintenance of aircraft, but excludes any | ||
materials, parts, equipment, components, and consumable | ||
supplies used in the modification, replacement, repair, and | ||
maintenance of aircraft engines or power plants, whether such | ||
engines or power plants are installed or uninstalled upon any | ||
such aircraft. "Consumable supplies" include, but are not | ||
limited to, adhesive, tape, sandpaper, general purpose | ||
lubricants, cleaning solution, latex gloves, and protective | ||
films. This exemption applies only to the use of qualifying | ||
tangible personal property by persons who modify, refurbish, | ||
complete, repair, replace, or maintain aircraft and who (i) | ||
hold an Air Agency Certificate and are empowered to operate an | ||
approved repair station by the Federal Aviation | ||
Administration, (ii) have a Class IV Rating, and (iii) conduct | ||
operations in accordance with Part 145 of the Federal Aviation | ||
Regulations. The exemption does not include aircraft operated | ||
by a commercial air carrier providing scheduled passenger air | ||
service pursuant to authority issued under Part 121 or Part 129 | ||
of the Federal Aviation Regulations. The changes made to this | ||
paragraph (35) by Public Act 98-534 are declarative of existing | ||
law. | ||
(36) Tangible personal property purchased by a | ||
public-facilities corporation, as described in Section | ||
11-65-10 of the Illinois Municipal Code, for purposes of | ||
constructing or furnishing a municipal convention hall, but | ||
only if the legal title to the municipal convention hall is | ||
transferred to the municipality without any further | ||
consideration by or on behalf of the municipality at the time | ||
of the completion of the municipal convention hall or upon the | ||
retirement or redemption of any bonds or other debt instruments | ||
issued by the public-facilities corporation in connection with | ||
the development of the municipal convention hall. This | ||
exemption includes existing public-facilities corporations as | ||
provided in Section 11-65-25 of the Illinois Municipal Code. | ||
This paragraph is exempt from the provisions of Section 3-90. | ||
(37) Beginning January 1, 2017, menstrual pads, tampons, | ||
and menstrual cups. | ||
(38) Merchandise that is subject to the Rental Purchase | ||
Agreement Occupation and Use Tax. The purchaser must certify | ||
that the item is purchased to be rented subject to a rental | ||
purchase agreement, as defined in the Rental Purchase Agreement | ||
Act, and provide proof of registration under the Rental | ||
Purchase Agreement Occupation and Use Tax Act. This paragraph | ||
is exempt from the provisions of Section 3-90. | ||
(39) Tangible personal property purchased by a purchaser | ||
who is exempt from the tax imposed by this Act by operation of | ||
federal law. This paragraph is exempt from the provisions of | ||
Section 3-90. | ||
(Source: P.A. 99-180, eff. 7-29-15; 99-855, eff. 8-19-16; | ||
100-22, eff. 7-6-17; 100-437, eff. 1-1-18; 100-594, eff. | ||
6-29-18; 100-863, eff. 8-14-18; 100-1171, eff. 1-4-19; revised | ||
1-8-19.)
| ||
(35 ILCS 105/3-50) (from Ch. 120, par. 439.3-50)
| ||
Sec. 3-50. Manufacturing and assembly exemption. The | ||
manufacturing
and assembling machinery and equipment exemption | ||
includes
machinery and equipment that replaces machinery and | ||
equipment in an
existing manufacturing facility as well as | ||
machinery and equipment that
are for use in an expanded or new | ||
manufacturing facility. The machinery and
equipment exemption | ||
also includes machinery and equipment used in the
general | ||
maintenance or repair of exempt machinery and equipment or for
| ||
in-house manufacture of exempt machinery and equipment. | ||
Beginning on July 1, 2017, the manufacturing and assembling | ||
machinery and equipment exemption also includes graphic arts | ||
machinery and equipment, as defined in paragraph (6) of Section | ||
3-5. The machinery and equipment exemption does not include | ||
machinery and equipment used in (i) the generation of | ||
electricity for wholesale or retail sale; (ii) the generation | ||
or treatment of natural or artificial gas for wholesale or | ||
retail sale that is delivered to customers through pipes, | ||
pipelines, or mains; or (iii) the treatment of water for | ||
wholesale or retail sale that is delivered to customers through | ||
pipes, pipelines, or mains. The provisions of this amendatory | ||
Act of the 98th General Assembly are declaratory of existing | ||
law as to the meaning and scope of this exemption. For the
| ||
purposes of this exemption, terms have the following
meanings:
| ||
(1) "Manufacturing process" means the production of
an | ||
article of tangible personal property, whether the article
| ||
is a finished product or an article for use in the process | ||
of manufacturing
or assembling a different article of | ||
tangible personal property, by
a procedure commonly | ||
regarded as manufacturing, processing, fabricating, or
| ||
refining that changes some existing material into a | ||
material
with a different form, use, or name. In relation | ||
to a recognized integrated
business composed of a series of | ||
operations that collectively constitute
manufacturing, or | ||
individually constitute
manufacturing operations, the | ||
manufacturing process commences with the
first operation | ||
or stage of production in the series
and does not end until | ||
the completion of the final product
in the last operation | ||
or stage of production in the series. For purposes
of this | ||
exemption, photoprocessing is a
manufacturing process of | ||
tangible personal property for wholesale or retail
sale.
| ||
(2) "Assembling process" means the production of
an | ||
article of tangible personal property, whether the article
| ||
is a finished product or an article for use in the process | ||
of manufacturing
or assembling a different article of | ||
tangible personal property, by the
combination of existing | ||
materials in a manner commonly regarded as
assembling that | ||
results in an article or material of a different
form, use, | ||
or name.
| ||
(3) "Machinery" means major
mechanical machines or | ||
major components of those machines contributing to a
| ||
manufacturing or assembling process.
| ||
(4) "Equipment" includes an independent device
or tool | ||
separate from machinery but essential to an integrated
| ||
manufacturing or assembly process; including computers | ||
used primarily in
a manufacturer's computer assisted | ||
design,
computer assisted manufacturing (CAD/CAM) system; | ||
any
subunit or assembly comprising a component of any | ||
machinery or auxiliary,
adjunct, or attachment parts of | ||
machinery, such as tools, dies, jigs,
fixtures, patterns, | ||
and molds; and any parts that require
periodic replacement | ||
in the course of normal operation; but does not
include | ||
hand tools. Equipment includes chemicals or chemicals | ||
acting as
catalysts but only if
the chemicals or chemicals | ||
acting as catalysts effect a direct and
immediate change | ||
upon a
product being manufactured or assembled for | ||
wholesale or retail sale or
lease. | ||
(5) "Production related tangible personal property" | ||
means all tangible personal property that is used or | ||
consumed by the purchaser in a manufacturing facility in | ||
which a manufacturing process takes place and includes, | ||
without limitation, tangible personal property that is | ||
purchased for incorporation into real estate within a | ||
manufacturing facility, supplies and consumables used in a | ||
manufacturing facility including fuels, coolants, | ||
solvents, oils, lubricants, and adhesives, hand tools, | ||
protective apparel, and fire and safety equipment used or | ||
consumed within a manufacturing facility, and tangible | ||
personal property that is used or consumed in activities | ||
such as research and development, preproduction material | ||
handling, receiving, quality control, inventory control, | ||
storage, staging, and packaging for shipping and | ||
transportation purposes. "Production related tangible | ||
personal property" does not include (i) tangible personal | ||
property that is used, within or without a manufacturing | ||
facility, in sales, purchasing, accounting, fiscal | ||
management, marketing, personnel recruitment or selection, | ||
or landscaping or (ii) tangible personal property that is | ||
required to be titled or registered with a department, | ||
agency, or unit of federal, State, or local government.
| ||
The manufacturing and assembling machinery and equipment | ||
exemption includes production related tangible personal | ||
property that is purchased on or after July 1, 2007 and on or | ||
before June 30, 2008 and on or after July 1, 2019. The | ||
exemption for production related tangible personal property | ||
purchased on or after July 1, 2007 and on or before June 30, | ||
2008 is subject to both of the following limitations: | ||
(1) The maximum amount of the exemption for any one | ||
taxpayer may not exceed 5% of the purchase price of | ||
production related tangible personal property that is | ||
purchased on or after July 1, 2007 and on or before June | ||
30, 2008. A credit under Section 3-85 of this Act may not | ||
be earned by the purchase of production related tangible | ||
personal property for which an exemption is received under | ||
this Section. | ||
(2) The maximum aggregate amount of the exemptions for | ||
production related tangible personal property purchased on | ||
or after July 1, 2007 and on or before June 30, 2008 | ||
awarded under this Act and the Retailers' Occupation Tax | ||
Act to all taxpayers may not exceed $10,000,000. If the | ||
claims for the exemption exceed $10,000,000, then the | ||
Department shall reduce the amount of the exemption to each | ||
taxpayer on a pro rata basis. | ||
The Department shall may adopt rules to implement and | ||
administer the exemption for production related tangible | ||
personal property. | ||
The manufacturing and assembling machinery and equipment
| ||
exemption includes the sale of materials to a purchaser who
| ||
produces exempted types of machinery, equipment, or tools and | ||
who rents or
leases that machinery, equipment, or tools to a
| ||
manufacturer of tangible
personal property. This exemption | ||
also includes the sale of materials to a
purchaser who | ||
manufactures those materials into an exempted type of
| ||
machinery, equipment, or tools that the purchaser uses
himself | ||
or herself in the
manufacturing of tangible personal property. | ||
This exemption includes the
sale of exempted types of machinery | ||
or equipment to a
purchaser who is not the manufacturer, but | ||
who rents or leases the use of
the property to a manufacturer. | ||
The purchaser of the machinery and
equipment who has an active | ||
resale registration number shall
furnish that number to the | ||
seller at the time of purchase.
A user of the machinery, | ||
equipment, or tools without an
active resale registration | ||
number shall prepare a certificate of exemption
for each | ||
transaction stating facts establishing the exemption for that
| ||
transaction, and that certificate shall be
available to the | ||
Department for inspection or audit. The Department shall
| ||
prescribe the form of the certificate. Informal rulings, | ||
opinions, or
letters issued by the Department in
response to an | ||
inquiry or request for an opinion from any person
regarding the | ||
coverage and applicability of this exemption to specific
| ||
devices shall be published, maintained as a public record, and | ||
made
available for public inspection and copying. If the | ||
informal ruling,
opinion, or letter contains trade secrets or | ||
other confidential
information, where possible, the Department | ||
shall delete that information
before publication. Whenever | ||
informal rulings, opinions, or
letters contain a policy of | ||
general applicability, the Department
shall formulate and | ||
adopt that policy as a rule in accordance with the
Illinois | ||
Administrative Procedure Act.
| ||
The manufacturing and assembling machinery and equipment
| ||
exemption is exempt from the provisions of Section 3-90. | ||
(Source: P.A. 100-22, eff. 7-6-17.)
| ||
Section 25-10. The Service Use Tax Act is amended by | ||
changing Section 2 as follows:
| ||
(35 ILCS 110/2) (from Ch. 120, par. 439.32)
| ||
Sec. 2. Definitions. In this Act: | ||
"Use" means the exercise by any person of any right or | ||
power
over tangible personal property incident to the ownership | ||
of that
property, but does not include the sale or use for | ||
demonstration by him
of that property in any form as tangible | ||
personal property in the
regular course of business.
"Use" does | ||
not mean the interim
use of
tangible personal property nor the | ||
physical incorporation of tangible
personal property, as an | ||
ingredient or constituent, into other tangible
personal | ||
property, (a) which is sold in the regular course of business
| ||
or (b) which the person incorporating such ingredient or | ||
constituent
therein has undertaken at the time of such purchase | ||
to cause to be
transported in interstate commerce to | ||
destinations outside the State of
Illinois.
| ||
"Purchased from a serviceman" means the acquisition of the | ||
ownership
of, or title to, tangible personal property through a | ||
sale of service.
| ||
"Purchaser" means any person who, through a sale of | ||
service, acquires
the ownership of, or title to, any tangible | ||
personal property.
| ||
"Cost price" means the consideration paid by the serviceman | ||
for a
purchase valued in money, whether paid in money or | ||
otherwise, including
cash, credits and services, and shall be | ||
determined without any
deduction on account of the supplier's | ||
cost of the property sold or on
account of any other expense | ||
incurred by the supplier. When a serviceman
contracts out part | ||
or all of the services required in his sale of service,
it | ||
shall be presumed that the cost price to the serviceman of the | ||
property
transferred to him or her by his or her subcontractor | ||
is equal to 50% of
the subcontractor's charges to the | ||
serviceman in the absence of proof of
the consideration paid by | ||
the subcontractor for the purchase of such property.
| ||
"Selling price" means the consideration for a sale valued | ||
in money
whether received in money or otherwise, including | ||
cash, credits and
service, and shall be determined without any | ||
deduction on account of the
serviceman's cost of the property | ||
sold, the cost of materials used,
labor or service cost or any | ||
other expense whatsoever, but does not
include interest or | ||
finance charges which appear as separate items on
the bill of | ||
sale or sales contract nor charges that are added to prices
by | ||
sellers on account of the seller's duty to collect, from the
| ||
purchaser, the tax that is imposed by this Act.
| ||
"Department" means the Department of Revenue.
| ||
"Person" means any natural individual, firm, partnership,
| ||
association, joint stock company, joint venture, public or | ||
private
corporation, limited liability company, and any | ||
receiver, executor, trustee,
guardian or other representative | ||
appointed by order of any court.
| ||
"Sale of service" means any transaction except:
| ||
(1) a retail sale of tangible personal property taxable | ||
under the
Retailers' Occupation Tax Act or under the Use | ||
Tax Act.
| ||
(2) a sale of tangible personal property for the | ||
purpose of resale
made in compliance with Section 2c of the | ||
Retailers' Occupation Tax Act.
| ||
(3) except as hereinafter provided, a sale or transfer | ||
of tangible
personal property as an incident to the | ||
rendering of service for or by
any governmental body, or | ||
for or by any corporation, society,
association, | ||
foundation or institution organized and operated
| ||
exclusively for charitable, religious or educational | ||
purposes or any
not-for-profit corporation, society, | ||
association, foundation,
institution or organization which | ||
has no compensated officers or
employees and which is | ||
organized and operated primarily for the
recreation of | ||
persons 55 years of age or older. A limited liability | ||
company
may qualify for the exemption under this paragraph | ||
only if the limited
liability company is organized and | ||
operated exclusively for educational
purposes.
| ||
(4) (blank).
| ||
(4a) a sale or transfer of tangible personal
property | ||
as an incident
to the rendering of service for owners, | ||
lessors, or shippers of tangible
personal property which is | ||
utilized by interstate carriers for hire for
use as rolling | ||
stock moving in interstate commerce so long as so used by
| ||
interstate carriers for hire, and equipment operated by a
| ||
telecommunications provider, licensed as a common carrier | ||
by the Federal
Communications Commission, which is | ||
permanently installed in or affixed to
aircraft moving in | ||
interstate commerce.
| ||
(4a-5) on and after July 1, 2003 and through June 30, | ||
2004, a sale or transfer of a motor vehicle
of
the
second | ||
division with a gross vehicle weight in excess of 8,000 | ||
pounds as an
incident to the rendering of service if that | ||
motor
vehicle is subject
to the commercial distribution fee | ||
imposed under Section 3-815.1 of the
Illinois Vehicle
Code. | ||
Beginning on July 1, 2004 and through June 30, 2005, the | ||
use in this State of motor vehicles of the second division: | ||
(i) with a gross vehicle weight rating in excess of 8,000 | ||
pounds; (ii) that are subject to the commercial | ||
distribution fee imposed under Section 3-815.1 of the | ||
Illinois Vehicle Code; and (iii) that are primarily used | ||
for commercial purposes. Through June 30, 2005, this
| ||
exemption applies to repair and replacement parts added | ||
after the
initial
purchase of such a motor vehicle if that | ||
motor vehicle is used in a manner that
would
qualify for | ||
the rolling stock exemption otherwise provided for in this | ||
Act. For purposes of this paragraph, "used for commercial | ||
purposes" means the transportation of persons or property | ||
in furtherance of any commercial or industrial enterprise | ||
whether for-hire or not.
| ||
(5) a sale or transfer of machinery and equipment used | ||
primarily in the
process of the manufacturing or | ||
assembling, either in an existing, an expanded
or a new | ||
manufacturing facility, of tangible personal property for | ||
wholesale or
retail sale or lease, whether such sale or | ||
lease is made directly by the
manufacturer or by some other | ||
person, whether the materials used in the process
are owned | ||
by the manufacturer or some other person, or whether such | ||
sale or
lease is made apart from or as an incident to the | ||
seller's engaging in a
service occupation and the | ||
applicable tax is a Service Use Tax or Service
Occupation | ||
Tax, rather than Use Tax or Retailers' Occupation Tax. The | ||
exemption provided by this paragraph (5) includes | ||
production related tangible personal property, as defined | ||
in Section 3-50 of the Use Tax Act, purchased on or after | ||
July 1, 2019. The exemption provided by this paragraph (5) | ||
does not include machinery and equipment used in (i) the | ||
generation of electricity for wholesale or retail sale; | ||
(ii) the generation or treatment of natural or artificial | ||
gas for wholesale or retail sale that is delivered to | ||
customers through pipes, pipelines, or mains; or (iii) the | ||
treatment of water for wholesale or retail sale that is | ||
delivered to customers through pipes, pipelines, or mains. | ||
The provisions of Public Act 98-583 are declaratory of | ||
existing law as to the meaning and scope of this exemption. | ||
The exemption under this paragraph (5) is exempt from the | ||
provisions of Section 3-75.
| ||
(5a) the repairing, reconditioning or remodeling, for | ||
a
common carrier by rail, of tangible personal property | ||
which belongs to such
carrier for hire, and as to which | ||
such carrier receives the physical possession
of the | ||
repaired, reconditioned or remodeled item of tangible | ||
personal property
in Illinois, and which such carrier | ||
transports, or shares with another common
carrier in the | ||
transportation of such property, out of Illinois on a | ||
standard
uniform bill of lading showing the person who | ||
repaired, reconditioned or
remodeled the property to a | ||
destination outside Illinois, for use outside
Illinois.
| ||
(5b) a sale or transfer of tangible personal property | ||
which is produced by
the seller thereof on special order in | ||
such a way as to have made the
applicable tax the Service | ||
Occupation Tax or the Service Use Tax, rather than
the | ||
Retailers' Occupation Tax or the Use Tax, for an interstate | ||
carrier by rail
which receives the physical possession of | ||
such property in Illinois, and which
transports such | ||
property, or shares with another common carrier in the
| ||
transportation of such property, out of Illinois on a | ||
standard uniform bill of
lading showing the seller of the | ||
property as the shipper or consignor of such
property to a | ||
destination outside Illinois, for use outside Illinois.
| ||
(6) until July 1, 2003, a sale or transfer of | ||
distillation machinery
and equipment, sold
as a unit or kit | ||
and assembled or installed by the retailer, which
machinery | ||
and equipment is certified by the user to be used only for | ||
the
production of ethyl alcohol that will be used for | ||
consumption as motor fuel
or as a component of motor fuel | ||
for the personal use of such user and not
subject to sale | ||
or resale.
| ||
(7) at the election of any serviceman not required to | ||
be
otherwise registered as a retailer under Section 2a of | ||
the Retailers'
Occupation Tax Act, made for each fiscal | ||
year sales
of service in which the aggregate annual cost | ||
price of tangible
personal property transferred as an | ||
incident to the sales of service is
less than 35%, or 75% | ||
in the case of servicemen transferring prescription
drugs | ||
or servicemen engaged in graphic arts production, of the | ||
aggregate
annual total gross receipts from all sales of | ||
service. The purchase of
such tangible personal property by | ||
the serviceman shall be subject to tax
under the Retailers' | ||
Occupation Tax Act and the Use Tax Act.
However, if a
| ||
primary serviceman who has made the election described in | ||
this paragraph
subcontracts service work to a secondary | ||
serviceman who has also made the
election described in this | ||
paragraph, the primary serviceman does not
incur a Use Tax | ||
liability if the secondary serviceman (i) has paid or will | ||
pay
Use
Tax on his or her cost price of any tangible | ||
personal property transferred
to the primary serviceman | ||
and (ii) certifies that fact in writing to the
primary
| ||
serviceman.
| ||
Tangible personal property transferred incident to the | ||
completion of a
maintenance agreement is exempt from the tax | ||
imposed pursuant to this Act.
| ||
Exemption (5) also includes machinery and equipment used in | ||
the general
maintenance or repair of such exempt machinery and | ||
equipment or for in-house
manufacture of exempt machinery and | ||
equipment. On and after July 1, 2017, exemption (5) also
| ||
includes graphic arts machinery and equipment, as
defined in | ||
paragraph (5) of Section 3-5. The machinery and equipment | ||
exemption does not include machinery and equipment used in (i) | ||
the generation of electricity for wholesale or retail sale; | ||
(ii) the generation or treatment of natural or artificial gas | ||
for wholesale or retail sale that is delivered to customers | ||
through pipes, pipelines, or mains; or (iii) the treatment of | ||
water for wholesale or retail sale that is delivered to | ||
customers through pipes, pipelines, or mains. The provisions of | ||
Public Act 98-583 are declaratory of existing law as to the | ||
meaning and scope of this exemption. For the purposes of | ||
exemption
(5), each of these terms shall have the following | ||
meanings: (1) "manufacturing
process" shall mean the | ||
production of any article of tangible personal
property, | ||
whether such article is a finished product or an article for | ||
use in
the process of manufacturing or assembling a different | ||
article of tangible
personal property, by procedures commonly | ||
regarded as manufacturing,
processing, fabricating, or | ||
refining which changes some existing
material or materials into | ||
a material with a different form, use or
name. In relation to a | ||
recognized integrated business composed of a
series of | ||
operations which collectively constitute manufacturing, or
| ||
individually constitute manufacturing operations, the | ||
manufacturing
process shall be deemed to commence with the | ||
first operation or stage of
production in the series, and shall | ||
not be deemed to end until the
completion of the final product | ||
in the last operation or stage of
production in the series; and | ||
further, for purposes of exemption (5),
photoprocessing is | ||
deemed to be a manufacturing process of tangible
personal | ||
property for wholesale or retail sale; (2) "assembling process" | ||
shall
mean the production of any article of tangible personal | ||
property, whether such
article is a finished product or an | ||
article for use in the process of
manufacturing or assembling a | ||
different article of tangible personal
property, by the | ||
combination of existing materials in a manner commonly
regarded | ||
as assembling which results in a material of a different form,
| ||
use or name; (3) "machinery" shall mean major mechanical | ||
machines or
major components of such machines contributing to a | ||
manufacturing or
assembling process; and (4) "equipment" shall | ||
include any independent
device or tool separate from any | ||
machinery but essential to an
integrated manufacturing or | ||
assembly process; including computers
used primarily in a | ||
manufacturer's computer
assisted design, computer assisted | ||
manufacturing (CAD/CAM) system;
or any subunit or assembly | ||
comprising a component of any machinery or
auxiliary, adjunct | ||
or attachment parts of machinery, such as tools, dies,
jigs, | ||
fixtures, patterns and molds; or any parts which require | ||
periodic
replacement in the course of normal operation; but | ||
shall not include hand
tools.
Equipment includes chemicals or | ||
chemicals acting as catalysts but only if the
chemicals or | ||
chemicals acting as catalysts effect a direct and immediate | ||
change
upon a
product being manufactured or assembled for | ||
wholesale or retail sale or
lease.
The purchaser of such | ||
machinery and equipment who has an active
resale registration | ||
number shall furnish such number to the seller at the
time of | ||
purchase. The user of such machinery and equipment and tools
| ||
without an active resale registration number shall prepare a | ||
certificate of
exemption for each transaction stating facts | ||
establishing the exemption for
that transaction, which | ||
certificate shall be available to the Department
for inspection | ||
or audit. The Department shall prescribe the form of the
| ||
certificate.
| ||
Any informal rulings, opinions or letters issued by the | ||
Department in
response to an inquiry or request for any opinion | ||
from any person
regarding the coverage and applicability of | ||
exemption (5) to specific
devices shall be published, | ||
maintained as a public record, and made
available for public | ||
inspection and copying. If the informal ruling,
opinion or | ||
letter contains trade secrets or other confidential
| ||
information, where possible the Department shall delete such | ||
information
prior to publication. Whenever such informal | ||
rulings, opinions, or
letters contain any policy of general | ||
applicability, the Department
shall formulate and adopt such | ||
policy as a rule in accordance with the
provisions of the | ||
Illinois Administrative Procedure Act.
| ||
On and after July 1, 1987, no entity otherwise eligible | ||
under exemption
(3) of this Section shall make tax-free | ||
purchases unless it has an active
exemption identification | ||
number issued by the Department.
| ||
The purchase, employment and transfer of such tangible | ||
personal
property as newsprint and ink for the primary purpose | ||
of conveying news
(with or without other information) is not a | ||
purchase, use or sale of
service or of tangible personal | ||
property within the meaning of this Act.
| ||
"Serviceman" means any person who is engaged in the | ||
occupation of
making sales of service.
| ||
"Sale at retail" means "sale at retail" as defined in the | ||
Retailers'
Occupation Tax Act.
| ||
"Supplier" means any person who makes sales of tangible | ||
personal
property to servicemen for the purpose of resale as an | ||
incident to a
sale of service.
| ||
"Serviceman maintaining a place of business in this State", | ||
or any
like term, means and includes any serviceman:
| ||
(1) having or maintaining within this State, directly | ||
or by a
subsidiary, an office, distribution house, sales | ||
house, warehouse or
other place of business, or any agent | ||
or other representative operating
within this State under | ||
the authority of the serviceman or its
subsidiary, | ||
irrespective of whether such place of business or agent or
| ||
other representative is located here permanently or | ||
temporarily, or
whether such serviceman or subsidiary is | ||
licensed to do business in this
State; | ||
(1.1) having a contract with a person located in this | ||
State under which the person, for a commission or other | ||
consideration based on the sale of service by the | ||
serviceman, directly or indirectly refers potential | ||
customers to the serviceman by providing to the potential | ||
customers a promotional code or other mechanism that allows | ||
the serviceman to track purchases referred by such persons. | ||
Examples of mechanisms that allow the serviceman to track | ||
purchases referred by such persons include but are not | ||
limited to the use of a link on the person's Internet | ||
website, promotional codes distributed through the | ||
person's hand-delivered or mailed material, and | ||
promotional codes distributed by the person through radio | ||
or other broadcast media. The provisions of this paragraph | ||
(1.1) shall apply only if the cumulative gross receipts | ||
from sales of service by the serviceman to customers who | ||
are referred to the serviceman by all persons in this State | ||
under such contracts exceed $10,000 during the preceding 4 | ||
quarterly periods ending on the last day of March, June, | ||
September, and December; a serviceman meeting the | ||
requirements of this paragraph (1.1) shall be presumed to | ||
be maintaining a place of business in this State but may | ||
rebut this presumption by submitting proof that the | ||
referrals or other activities pursued within this State by | ||
such persons were not sufficient to meet the nexus | ||
standards of the United States Constitution during the | ||
preceding 4 quarterly periods; | ||
(1.2) beginning July 1, 2011, having a contract with a | ||
person located in this State under which: | ||
(A) the serviceman sells the same or substantially | ||
similar line of services as the person located in this | ||
State and does so using an identical or substantially | ||
similar name, trade name, or trademark as the person | ||
located in this State; and | ||
(B) the serviceman provides a commission or other | ||
consideration to the person located in this State based | ||
upon the sale of services by the serviceman. | ||
The provisions of this paragraph (1.2) shall apply only if | ||
the cumulative gross receipts from sales of service by the | ||
serviceman to customers in this State under all such | ||
contracts exceed $10,000 during the preceding 4 quarterly | ||
periods ending on the last day of March, June, September, | ||
and December;
| ||
(2) soliciting orders for tangible personal property | ||
by means of a
telecommunication or television shopping | ||
system (which utilizes toll free
numbers) which is intended | ||
by the retailer to be broadcast by cable
television or | ||
other means of broadcasting, to consumers located in this | ||
State;
| ||
(3) pursuant to a contract with a broadcaster or | ||
publisher located in this
State, soliciting orders for | ||
tangible personal property by means of advertising
which is | ||
disseminated primarily to consumers located in this State | ||
and only
secondarily to bordering jurisdictions;
| ||
(4) soliciting orders for tangible personal property | ||
by mail if the
solicitations are substantial and recurring | ||
and if the retailer benefits
from any banking, financing, | ||
debt collection, telecommunication, or
marketing | ||
activities occurring in this State or benefits from the | ||
location
in this State of authorized installation, | ||
servicing, or repair facilities;
| ||
(5) being owned or controlled by the same interests | ||
which own or
control any retailer engaging in business in | ||
the same or similar line of
business in this State;
| ||
(6) having a franchisee or licensee operating under its | ||
trade name if
the franchisee or licensee is required to | ||
collect the tax under this Section;
| ||
(7) pursuant to a contract with a cable television | ||
operator located in
this State, soliciting orders for | ||
tangible personal property by means of
advertising which is | ||
transmitted or distributed over a cable television
system | ||
in this State;
| ||
(8) engaging in activities in Illinois, which | ||
activities in the
state in which the supply business | ||
engaging in such activities is located
would constitute | ||
maintaining a place of business in that state; or
| ||
(9) beginning October 1, 2018, making sales of service | ||
to purchasers in Illinois from outside of Illinois if: | ||
(A) the cumulative gross receipts from sales of | ||
service to purchasers in Illinois are $100,000 or more; | ||
or | ||
(B) the serviceman enters into 200 or more separate | ||
transactions for sales of service to purchasers in | ||
Illinois. | ||
The serviceman shall determine on a quarterly basis, | ||
ending on the last day of March, June, September, and | ||
December, whether he or she meets the criteria of either | ||
subparagraph (A) or (B) of this paragraph (9) for the | ||
preceding 12-month period. If the serviceman meets the | ||
criteria of either subparagraph (A) or (B) for a 12-month | ||
period, he or she is considered a serviceman maintaining a | ||
place of business in this State and is required to collect | ||
and remit the tax imposed under this Act and file returns | ||
for one year. At the end of that one-year period, the | ||
serviceman shall determine whether the serviceman met the | ||
criteria of either subparagraph (A) or (B) during the | ||
preceding 12-month period. If the serviceman met the | ||
criteria in either subparagraph (A) or (B) for the | ||
preceding 12-month period, he or she is considered a | ||
serviceman maintaining a place of business in this State | ||
and is required to collect and remit the tax imposed under | ||
this Act and file returns for the subsequent year. If at | ||
the end of a one-year period a serviceman that was required | ||
to collect and remit the tax imposed under this Act | ||
determines that he or she did not meet the criteria in | ||
either subparagraph (A) or (B) during the preceding | ||
12-month period, the serviceman subsequently shall | ||
determine on a quarterly basis, ending on the last day of | ||
March, June, September, and December, whether he or she | ||
meets the criteria of either subparagraph (A) or (B) for | ||
the preceding 12-month period. | ||
(Source: P.A. 100-22, eff. 7-6-17; 100-321, eff. 8-24-17; | ||
100-587, eff. 6-4-18; 100-863, eff. 8-14-18.)
| ||
Section 25-15. The Service Occupation Tax Act is amended by | ||
changing Section 2 as follows:
| ||
(35 ILCS 115/2) (from Ch. 120, par. 439.102)
| ||
Sec. 2. In this Act: | ||
"Transfer" means any transfer of the title to property or | ||
of
the ownership of property whether or not the transferor | ||
retains title as
security for the payment of amounts due him | ||
from the transferee.
| ||
"Cost Price" means the consideration paid by the serviceman | ||
for a
purchase valued in money, whether paid in money or | ||
otherwise, including
cash, credits and services, and shall be | ||
determined without any deduction
on account of the supplier's | ||
cost of the property sold or on account of any
other expense | ||
incurred by the supplier. When a serviceman contracts out
part | ||
or all of the services required in his sale of service, it | ||
shall be
presumed that the cost price to the serviceman of the | ||
property
transferred to him by his or her subcontractor is | ||
equal to 50% of the
subcontractor's charges to the serviceman | ||
in the absence of proof of the
consideration paid by the | ||
subcontractor for the purchase of such
property.
| ||
"Department" means the Department of Revenue.
| ||
"Person" means any natural individual, firm, partnership, | ||
association, joint
stock company, joint venture, public or | ||
private corporation, limited liability
company, and any | ||
receiver, executor, trustee, guardian or other representative
| ||
appointed by order of any court.
| ||
"Sale of Service" means any transaction except:
| ||
(a) A retail sale of tangible personal property taxable | ||
under the Retailers'
Occupation Tax Act or under the Use Tax | ||
Act.
| ||
(b) A sale of tangible personal property for the purpose of | ||
resale made in
compliance with Section 2c of the Retailers' | ||
Occupation Tax Act.
| ||
(c) Except as hereinafter provided, a sale or transfer of | ||
tangible personal
property as an incident to the rendering of | ||
service for or by any governmental
body or for or by any | ||
corporation, society, association, foundation or
institution | ||
organized and operated exclusively for charitable, religious | ||
or
educational purposes or any not-for-profit corporation, | ||
society, association,
foundation, institution or organization | ||
which has no compensated officers or
employees and which is | ||
organized and operated primarily for the recreation of
persons | ||
55 years of age or older. A limited liability company may | ||
qualify for
the exemption under this paragraph only if the | ||
limited liability company is
organized and operated | ||
exclusively for educational purposes.
| ||
(d) (Blank).
| ||
(d-1) A sale or transfer of tangible personal
property as | ||
an incident to
the rendering of service for owners, lessors or | ||
shippers of tangible personal
property which is utilized by | ||
interstate carriers for hire for use as rolling
stock moving in | ||
interstate commerce, and equipment operated
by a | ||
telecommunications provider, licensed as a common carrier by | ||
the
Federal Communications Commission, which is permanently | ||
installed in or
affixed to aircraft moving in interstate | ||
commerce.
| ||
(d-1.1) On and after July 1, 2003 and through June 30, | ||
2004, a sale or transfer of a motor vehicle
of the
second | ||
division with a gross vehicle weight in excess of 8,000 pounds | ||
as an
incident to the rendering of service if that motor
| ||
vehicle is subject
to the commercial distribution fee imposed | ||
under Section 3-815.1 of the
Illinois Vehicle
Code. Beginning | ||
on July 1, 2004 and through June 30, 2005, the use in this | ||
State of motor vehicles of the second division: (i) with a | ||
gross vehicle weight rating in excess of 8,000 pounds; (ii) | ||
that are subject to the commercial distribution fee imposed | ||
under Section 3-815.1 of the Illinois Vehicle Code; and (iii) | ||
that are primarily used for commercial purposes. Through June | ||
30, 2005, this exemption applies to repair and replacement | ||
parts added after the
initial
purchase of such a motor vehicle | ||
if that motor vehicle is used in a manner that
would
qualify | ||
for the rolling stock exemption otherwise provided for in this | ||
Act. For purposes of this paragraph, "used for commercial | ||
purposes" means the transportation of persons or property in | ||
furtherance of any commercial or industrial enterprise whether | ||
for-hire or not.
| ||
(d-2) The repairing, reconditioning or remodeling, for a | ||
common carrier by
rail, of tangible personal property which | ||
belongs to such carrier for hire, and
as to which such carrier | ||
receives the physical possession of the repaired,
| ||
reconditioned or remodeled item of tangible personal property | ||
in Illinois, and
which such carrier transports, or shares with | ||
another common carrier in the
transportation of such property, | ||
out of Illinois on a standard uniform bill of
lading showing | ||
the person who repaired, reconditioned or remodeled the | ||
property
as the shipper or consignor of such property to a | ||
destination outside Illinois,
for use outside Illinois.
| ||
(d-3) A sale or transfer of tangible personal property | ||
which
is produced by the seller thereof on special order in | ||
such a way as to have
made the applicable tax the Service | ||
Occupation Tax or the Service Use Tax,
rather than the | ||
Retailers' Occupation Tax or the Use Tax, for an interstate
| ||
carrier by rail which receives the physical possession of such | ||
property in
Illinois, and which transports such property, or | ||
shares with another common
carrier in the transportation of | ||
such property, out of Illinois on a standard
uniform bill of | ||
lading showing the seller of the property as the shipper or
| ||
consignor of such property to a destination outside Illinois, | ||
for use outside
Illinois.
| ||
(d-4) Until January 1, 1997, a sale, by a registered | ||
serviceman paying tax
under this Act to the Department, of | ||
special order printed materials delivered
outside Illinois and | ||
which are not returned to this State, if delivery is made
by | ||
the seller or agent of the seller, including an agent who | ||
causes the product
to be delivered outside Illinois by a common | ||
carrier or the U.S.
postal service.
| ||
(e) A sale or transfer of machinery and equipment used | ||
primarily in
the process of the manufacturing or assembling, | ||
either in an existing, an
expanded or a new manufacturing | ||
facility, of tangible personal property for
wholesale or retail | ||
sale or lease, whether such sale or lease is made directly
by | ||
the manufacturer or by some other person, whether the materials | ||
used in the
process are owned by the manufacturer or some other | ||
person, or whether such
sale or lease is made apart from or as | ||
an incident to the seller's engaging in
a service occupation | ||
and the applicable tax is a Service Occupation Tax or
Service | ||
Use Tax, rather than Retailers' Occupation Tax or Use Tax. The | ||
exemption provided by this paragraph (e) includes production | ||
related tangible personal property, as defined in Section 3-50 | ||
of the Use Tax Act, purchased on or after July 1, 2019. The | ||
exemption provided by this paragraph (e) does not include | ||
machinery and equipment used in (i) the generation of | ||
electricity for wholesale or retail sale; (ii) the generation | ||
or treatment of natural or artificial gas for wholesale or | ||
retail sale that is delivered to customers through pipes, | ||
pipelines, or mains; or (iii) the treatment of water for | ||
wholesale or retail sale that is delivered to customers through | ||
pipes, pipelines, or mains. The provisions of Public Act 98-583 | ||
are declaratory of existing law as to the meaning and scope of | ||
this exemption. The exemption under this subsection (e) is | ||
exempt from the provisions of Section 3-75.
| ||
(f) Until July 1, 2003, the sale or transfer of | ||
distillation
machinery
and equipment, sold as a
unit or kit and | ||
assembled or installed by the retailer, which machinery
and | ||
equipment is certified by the user to be used only for the | ||
production
of ethyl alcohol that will be used for consumption | ||
as motor fuel or as a
component of motor fuel for the personal | ||
use of such user and not subject
to sale or resale.
| ||
(g) At the election of any serviceman not required to be | ||
otherwise
registered as a retailer under Section 2a of the | ||
Retailers' Occupation Tax Act,
made for each fiscal year sales | ||
of service in which the aggregate annual cost
price of tangible | ||
personal property transferred as an incident to the sales of
| ||
service is less than 35% (75% in the case of servicemen | ||
transferring
prescription drugs or servicemen engaged in | ||
graphic arts production) of the
aggregate annual total gross | ||
receipts from all sales of service. The purchase
of such | ||
tangible personal property by the serviceman shall be subject | ||
to tax
under the Retailers' Occupation Tax Act and the Use Tax | ||
Act.
However, if a
primary serviceman who has made the election | ||
described in this paragraph
subcontracts service work to a | ||
secondary serviceman who has also made the
election described | ||
in this paragraph, the primary serviceman does not
incur a Use | ||
Tax liability if the secondary serviceman (i) has paid or will | ||
pay
Use
Tax on his or her cost price of any tangible personal | ||
property transferred
to the primary serviceman and (ii) | ||
certifies that fact in writing to the
primary serviceman.
| ||
Tangible personal property transferred incident to the | ||
completion of a
maintenance agreement is exempt from the tax | ||
imposed pursuant to this Act.
| ||
Exemption (e) also includes machinery and equipment used in | ||
the
general maintenance or repair of such exempt machinery and | ||
equipment or for
in-house manufacture of exempt machinery and | ||
equipment.
On and after July 1, 2017, exemption (e) also
| ||
includes graphic arts machinery and equipment, as
defined in | ||
paragraph (5) of Section 3-5. The machinery and equipment | ||
exemption does not include machinery and equipment used in (i) | ||
the generation of electricity for wholesale or retail sale; | ||
(ii) the generation or treatment of natural or artificial gas | ||
for wholesale or retail sale that is delivered to customers | ||
through pipes, pipelines, or mains; or (iii) the treatment of | ||
water for wholesale or retail sale that is delivered to | ||
customers through pipes, pipelines, or mains. The provisions of | ||
Public Act 98-583 are declaratory of existing law as to the | ||
meaning and scope of this exemption. For the purposes of | ||
exemption (e), each of these terms shall have the following
| ||
meanings: (1) "manufacturing process" shall mean the | ||
production of any
article of tangible personal property, | ||
whether such article is a
finished product or an article for | ||
use in the process of manufacturing
or assembling a different | ||
article of tangible personal property, by
procedures commonly | ||
regarded as manufacturing, processing, fabricating,
or | ||
refining which changes some existing material or materials into | ||
a
material with a different form, use or name. In relation to a
| ||
recognized integrated business composed of a series of | ||
operations which
collectively constitute manufacturing, or | ||
individually constitute
manufacturing operations, the | ||
manufacturing process shall be deemed to
commence with the | ||
first operation or stage of production in the series,
and shall | ||
not be deemed to end until the completion of the final product
| ||
in the last operation or stage of production in the series; and | ||
further for
purposes of exemption (e), photoprocessing is | ||
deemed to be a manufacturing
process of tangible personal | ||
property for wholesale or retail sale;
(2) "assembling process" | ||
shall mean the production of any article of
tangible personal | ||
property, whether such article is a finished product
or an | ||
article for use in the process of manufacturing or assembling a
| ||
different article of tangible personal property, by the | ||
combination of
existing materials in a manner commonly regarded | ||
as assembling which
results in a material of a different form, | ||
use or name; (3) "machinery"
shall mean major mechanical | ||
machines or major components of such machines
contributing to a | ||
manufacturing or assembling process; and (4) "equipment"
shall | ||
include any independent device or tool separate from any | ||
machinery but
essential to an integrated manufacturing or | ||
assembly process; including
computers used primarily in a | ||
manufacturer's computer
assisted design, computer assisted | ||
manufacturing (CAD/CAM) system; or any
subunit or assembly | ||
comprising a component of any machinery or auxiliary,
adjunct | ||
or attachment parts of machinery, such as tools, dies, jigs, | ||
fixtures,
patterns and molds; or any parts which require | ||
periodic replacement in the
course of normal operation; but | ||
shall not include hand tools. Equipment
includes chemicals or | ||
chemicals acting as catalysts but only if the chemicals
or | ||
chemicals acting as catalysts effect a direct and immediate | ||
change upon a
product being manufactured or assembled for | ||
wholesale or retail sale or lease.
The purchaser of such | ||
machinery and equipment
who has an active resale registration | ||
number shall furnish such number to
the seller at the time of | ||
purchase. The purchaser of such machinery and
equipment and | ||
tools without an active resale registration number shall | ||
furnish
to the seller a certificate of exemption for each | ||
transaction stating facts
establishing the exemption for that | ||
transaction, which certificate shall
be available to the | ||
Department for inspection or audit.
| ||
Except as provided in Section 2d of this Act, the rolling | ||
stock exemption
applies to rolling
stock
used by an interstate
| ||
carrier for hire, even just between points in Illinois, if such | ||
rolling
stock transports, for hire, persons whose journeys or | ||
property whose
shipments originate or terminate outside | ||
Illinois.
| ||
Any informal rulings, opinions or letters issued by the | ||
Department in
response to an inquiry or request for any opinion | ||
from any person
regarding the coverage and applicability of | ||
exemption (e) to specific
devices shall be published, | ||
maintained as a public record, and made
available for public | ||
inspection and copying. If the informal ruling,
opinion or | ||
letter contains trade secrets or other confidential
| ||
information, where possible the Department shall delete such | ||
information
prior to publication. Whenever such informal | ||
rulings, opinions, or
letters contain any policy of general | ||
applicability, the Department
shall formulate and adopt such | ||
policy as a rule in accordance with the
provisions of the | ||
Illinois Administrative Procedure Act.
| ||
On and after July 1, 1987, no entity otherwise eligible | ||
under exemption
(c) of this Section shall make tax-free | ||
purchases unless it has an active
exemption identification | ||
number issued by the Department.
| ||
"Serviceman" means any person who is engaged in the | ||
occupation of
making sales of service.
| ||
"Sale at Retail" means "sale at retail" as defined in the | ||
Retailers'
Occupation Tax Act.
| ||
"Supplier" means any person who makes sales of tangible | ||
personal
property to servicemen for the purpose of resale as an | ||
incident to a
sale of service.
| ||
(Source: P.A. 100-22, eff. 7-6-17; 100-321, eff. 8-24-17; | ||
100-863, eff. 8-14-18.)
| ||
Section 25-20. The Retailers' Occupation Tax Act is amended | ||
by changing Section 2-45 as follows:
| ||
(35 ILCS 120/2-45) (from Ch. 120, par. 441-45)
| ||
Sec. 2-45. Manufacturing and assembly exemption. The | ||
manufacturing
and assembly machinery and equipment exemption | ||
includes machinery
and equipment that replaces machinery
and | ||
equipment in an existing manufacturing facility as well as | ||
machinery
and equipment that are for use in an expanded or new
| ||
manufacturing facility.
| ||
The machinery and equipment exemption also includes | ||
machinery
and equipment used in the
general maintenance or | ||
repair of exempt machinery and equipment or for
in-house | ||
manufacture of exempt machinery and equipment.
Beginning on | ||
July 1, 2017, the manufacturing and assembling machinery and | ||
equipment exemption also includes graphic arts machinery and | ||
equipment, as defined in paragraph (4) of Section 2-5. The | ||
machinery and equipment exemption does not include machinery | ||
and equipment used in (i) the generation of electricity for | ||
wholesale or retail sale; (ii) the generation or treatment of | ||
natural or artificial gas for wholesale or retail sale that is | ||
delivered to customers through pipes, pipelines, or mains; or | ||
(iii) the treatment of water for wholesale or retail sale that | ||
is delivered to customers through pipes, pipelines, or mains. | ||
The provisions of this amendatory Act of the 98th General | ||
Assembly are declaratory of existing law as to the meaning and | ||
scope of this exemption. For the purposes of this exemption, | ||
terms have the following meanings:
| ||
(1) "Manufacturing process" means the production of an | ||
article of
tangible personal property, whether the article | ||
is a finished product or an
article for use in the process | ||
of manufacturing or assembling a different
article of | ||
tangible personal property, by a procedure commonly | ||
regarded as
manufacturing, processing, fabricating, or | ||
refining that changes some
existing material or materials | ||
into a material with a different form, use,
or name. In | ||
relation to a recognized integrated business composed of a
| ||
series of operations that collectively constitute | ||
manufacturing, or
individually constitute manufacturing | ||
operations, the manufacturing process
commences with the | ||
first operation or stage of production in the series and
| ||
does not end until the completion of the final product in | ||
the last
operation or stage of production in the series. | ||
For purposes of this
exemption, photoprocessing is a | ||
manufacturing process of tangible personal
property for | ||
wholesale or retail sale.
| ||
(2) "Assembling process" means the production of an | ||
article of
tangible personal property, whether the article | ||
is a finished product or an
article for use in the process | ||
of manufacturing or assembling a different
article of | ||
tangible personal property, by the combination of existing
| ||
materials in a manner commonly regarded as assembling that | ||
results in a
material of a different form, use, or name.
| ||
(3) "Machinery" means major mechanical machines or | ||
major components of
those machines contributing to a | ||
manufacturing or assembling process.
| ||
(4) "Equipment" includes an independent device or tool | ||
separate from
machinery but essential to an integrated | ||
manufacturing or assembly process;
including computers | ||
used primarily in a manufacturer's computer assisted | ||
design, computer assisted manufacturing
(CAD/CAM) system; | ||
any subunit or assembly comprising a component of any
| ||
machinery or auxiliary, adjunct, or attachment parts of | ||
machinery, such as
tools, dies, jigs, fixtures, patterns, | ||
and molds; and any parts that
require periodic replacement | ||
in the course of normal operation; but does
not include | ||
hand tools. Equipment includes chemicals or chemicals | ||
acting as
catalysts but only if
the chemicals or chemicals | ||
acting as catalysts effect a direct and
immediate change | ||
upon a
product being manufactured or assembled for | ||
wholesale or retail sale or
lease.
| ||
(5) "Production related tangible personal property" | ||
means all tangible personal property that is used or | ||
consumed by the purchaser in a manufacturing facility in | ||
which a manufacturing process takes place and includes, | ||
without limitation, tangible personal property that is | ||
purchased for incorporation into real estate within a | ||
manufacturing facility, supplies and consumables used in a | ||
manufacturing facility including fuels, coolants, | ||
solvents, oils, lubricants, and adhesives, hand tools, | ||
protective apparel, and fire and safety equipment used or | ||
consumed within a manufacturing facility, and tangible | ||
personal property that is used or consumed in activities | ||
such as research and development, preproduction material | ||
handling, receiving, quality control, inventory control, | ||
storage, staging, and packaging for shipping and | ||
transportation purposes. "Production related tangible | ||
personal property" does not include (i) tangible personal | ||
property that is used, within or without a manufacturing | ||
facility, in sales, purchasing, accounting, fiscal | ||
management, marketing, personnel recruitment or selection, | ||
or landscaping or (ii) tangible personal property that is | ||
required to be titled or registered with a department, | ||
agency, or unit of federal, State, or local government.
| ||
The manufacturing and assembling machinery and equipment | ||
exemption includes production related tangible personal | ||
property that is purchased on or after July 1, 2007 and on or | ||
before June 30, 2008 and on or after July 1, 2019. The | ||
exemption for production related tangible personal property | ||
purchased on or after July 1, 2007 and before June 30, 2008 is | ||
subject to both of the following limitations: | ||
(1) The maximum amount of the exemption for any one | ||
taxpayer may not exceed 5% of the purchase price of | ||
production related tangible personal property that is | ||
purchased on or after July 1, 2007 and on or before June | ||
30, 2008. A credit under Section 3-85 of this Act may not | ||
be earned by the purchase of production related tangible | ||
personal property for which an exemption is received under | ||
this Section. | ||
(2) The maximum aggregate amount of the exemptions for | ||
production related tangible personal property awarded | ||
under this Act and the Use
Tax Act to all taxpayers may not | ||
exceed $10,000,000. If the claims for the exemption exceed | ||
$10,000,000, then the Department shall reduce the amount of | ||
the exemption to each taxpayer on a pro rata basis. | ||
The Department shall may adopt rules to implement and | ||
administer the exemption for production related tangible | ||
personal property. | ||
The manufacturing and assembling machinery and equipment | ||
exemption
includes the sale of materials to a purchaser who | ||
produces exempted types
of machinery, equipment, or tools and | ||
who rents or leases that machinery,
equipment, or tools to a | ||
manufacturer of tangible personal property. This
exemption | ||
also includes the sale of materials to a purchaser who | ||
manufactures
those materials into an exempted type of | ||
machinery, equipment, or tools
that the purchaser uses himself | ||
or herself in the manufacturing of tangible
personal property. | ||
The purchaser of the machinery and equipment who has an
active | ||
resale registration number shall furnish that number to the | ||
seller
at the time of purchase. A purchaser of the machinery, | ||
equipment, and
tools without an active resale registration | ||
number shall furnish to the
seller a certificate of exemption | ||
for each transaction stating facts
establishing the exemption | ||
for that transaction, and that certificate shall
be available | ||
to the Department for inspection or audit. Informal
rulings, | ||
opinions, or letters issued by the Department in response to an
| ||
inquiry or request for an opinion from any person regarding the | ||
coverage and
applicability of this exemption to specific | ||
devices shall be published,
maintained as a public record,
and | ||
made available for public inspection and copying. If the | ||
informal
ruling, opinion, or letter contains trade secrets or | ||
other confidential
information, where possible, the Department | ||
shall delete that information
before publication. Whenever | ||
informal rulings, opinions, or letters
contain a policy of | ||
general applicability, the Department shall
formulate and | ||
adopt that policy as a rule in accordance with the Illinois
| ||
Administrative Procedure Act.
| ||
The manufacturing and assembling machinery and equipment
| ||
exemption is exempt from the provisions of Section 2-70. | ||
(Source: P.A. 100-22, eff. 7-6-17.)
| ||
ARTICLE 30. BUSINESS CORPORATION ACT OF 1983 | ||
Section 30-5. The Business Corporation Act of 1983 is | ||
amended by changing Sections 14.30, 15.35, 15.65, and 15.97 as | ||
follows:
| ||
(805 ILCS 5/14.30) (from Ch. 32, par. 14.30)
| ||
Sec. 14.30.
Cumulative report of changes in issued shares | ||
or paid-in
capital.
| ||
(a) Each domestic corporation and each foreign corporation
| ||
authorized to transact business in this State that effects any | ||
change in
the number of issued shares or the amount of paid-in | ||
capital prior to January 1, 2024 that has
not theretofore been | ||
reported in any report other than an annual report,
interim | ||
annual report, or final transition annual report, shall execute | ||
and
file, in accordance with Section 1.10 of this Act, a report | ||
with respect to
the changes in its issued shares or paid-in | ||
capital:
| ||
(1) that have occurred subsequent to the last day of | ||
the third month
preceding its anniversary month in the | ||
preceding year and prior to the
first day of the second | ||
month immediately preceding its anniversary month
in the | ||
current year; or
| ||
(2) in the case of a corporation that has established | ||
an extended
filing month, that have occurred during its | ||
fiscal year; or
| ||
(3) in the case of a statutory merger or consolidation | ||
or an amendment
to the corporation's articles of | ||
incorporation that affects the number of
issued shares or | ||
the amount of paid-in capital,
that have
occurred between | ||
the last day of the third month immediately preceding its
| ||
anniversary month and the date of the merger, | ||
consolidation, or
amendment or, in the
case of a | ||
corporation that has established an extended filing month, | ||
that
have occurred between the first day of its fiscal year | ||
and the date of the
merger, consolidation, or amendment; or
| ||
(4) in the case of a statutory merger or consolidation | ||
or an amendment
to the corporation's articles of | ||
incorporation that affects the number of
issued shares or | ||
the amount of paid-in capital,
that have
occurred between | ||
the date of the merger, consolidation, or amendment (but
| ||
not including the merger,
consolidation, or amendment) and | ||
the first day of the second month
immediately preceding
its | ||
anniversary month in the current year, or in the case of a | ||
corporation
that has established an extended filing month, | ||
that have occurred between
the date of the merger, | ||
consolidation or amendment (but not including the
merger, | ||
consolidation or amendment) and the last day of
its fiscal | ||
year.
| ||
(b) The corporation shall file the report required under | ||
subsection
(a) not later than (i) the time its annual report is | ||
required to be filed in
1992 and in each subsequent year and | ||
(ii) not later than the time of filing
the articles of merger, | ||
consolidation, or amendment to the articles of
incorporation | ||
that affects the number of issued shares or the amount of | ||
paid-in
capital of a domestic corporation or the certified copy | ||
of
merger
of a foreign corporation.
| ||
(c) The report shall net decreases against increases that | ||
occur during
the same taxable period. The report shall set | ||
forth:
| ||
(1) The name of the corporation and the state or | ||
country under the laws
of which it is organized.
| ||
(2) A statement of the aggregate number of shares which | ||
the corporation
has authority to issue, itemized by classes | ||
and series, if any, within a class.
| ||
(3) A statement of the aggregate number of issued | ||
shares as last
reported to the Secretary of State in any | ||
document required or permitted by
this Act to be filed, | ||
other than an annual report, interim annual report or
final | ||
transition annual report, itemized by classes and series, | ||
if any,
within a class.
| ||
(4) A statement, expressed in dollars, of the amount of | ||
paid-in capital
of the corporation as last reported to the | ||
Secretary of State in any
document required or permitted by | ||
this Act to be filed, other than an
annual report, interim | ||
annual report or final transition annual report.
| ||
(5) A statement, if applicable, of the aggregate number | ||
of shares
issued by the corporation not theretofore | ||
reported to the Secretary of
State as having been issued, | ||
and a statement, expressed in dollars, of the
value of the | ||
entire consideration received, less expenses, including
| ||
commissions, paid or incurred in connection with the | ||
issuance, for, or on
account of, the issuance of the | ||
shares, itemized by
classes, and series, if any, within a | ||
class; and in the case of shares
issued as a share | ||
dividend, the amount added or transferred to the paid-in
| ||
capital of the corporation for, or on account of, the | ||
issuance of the
shares; provided, however, that the report | ||
shall also include the date of
each issuance made prior to | ||
the current reporting period, and the number of
issued | ||
shares and consideration received in each case.
| ||
(6) A statement, if applicable, expressed in dollars, | ||
of the amount
added or transferred to paid-in capital of | ||
the corporation without the
issuance of shares; provided, | ||
however, that the report shall also include
the date of | ||
each increase made prior to the current reporting period, | ||
and
the consideration received in each case.
| ||
(7) In case of an exchange or reclassification of | ||
issued shares
resulting in an increase in the amount of | ||
paid-in capital, a statement of
the manner in which it was | ||
effected, and a statement, expressed in dollars, of
the | ||
amount added or transferred to the paid-in capital of the | ||
corporation
as a result thereof, except any portion thereof | ||
reported under any other
subsection of this Section as a | ||
part of the consideration received by the
corporation for, | ||
or on account of, its issued shares; provided, however,
| ||
that the report shall also include the date of each | ||
exchange or
reclassification made prior to the current | ||
reporting period and the
consideration received in each | ||
case.
| ||
(8) If the consideration received for the issuance of | ||
any shares not
theretofore reported as having been issued | ||
consists of labor or services
performed or of property, | ||
other than cash, then a statement, expressed in
dollars, of | ||
the value of that consideration as fixed by the board of
| ||
directors.
| ||
(9) In the case of a cancellation of shares or a | ||
reduction in paid-in
capital made pursuant to Section 9.20, | ||
the aggregate
reduction in paid-in capital;
provided, | ||
however, that the report shall also include the date of | ||
each
reduction made prior to the current reporting period.
| ||
(10) A statement of the aggregate number of issued | ||
shares itemized by
classes and series, if any, within a | ||
class, after giving effect to the
changes reported.
| ||
(11) A statement, expressed in dollars, of the amount | ||
of paid-in capital
of the corporation after giving effect | ||
to the changes reported.
| ||
(d) No additional license fees or franchise taxes shall be | ||
payable
upon the filing of the report to the extent that | ||
license fees or franchise
taxes shall have been previously paid | ||
by the corporation in respect of
shares previously issued which | ||
are being exchanged for the shares the
issuance of which is | ||
being reported, provided those facts are shown in
the report.
| ||
(e) The report shall be made on forms prescribed and | ||
furnished by the
Secretary of State.
| ||
(f) Until the report under this Section or a report under | ||
Section 14.25
shall have been filed in the Office of the | ||
Secretary of State showing a
reduction in paid-in capital, the | ||
basis of the annual franchise tax payable
by the corporation | ||
shall not be reduced, provided, however, in no event
shall the | ||
annual franchise tax for any taxable year be reduced if the
| ||
report is not filed prior to the first day of the anniversary | ||
month or, in
the case of a corporation which has established an | ||
extended filing month,
the extended filing month of the | ||
corporation of that taxable year and
before payment of its | ||
annual franchise tax.
| ||
(Source: P.A. 90-421, eff. 1-1-98.)
| ||
(805 ILCS 5/15.35) (from Ch. 32, par. 15.35)
| ||
Sec. 15.35. Franchise taxes payable by domestic | ||
corporations. For the privilege of exercising its franchises in | ||
this State, each
domestic corporation shall pay to the | ||
Secretary of State the following
franchise taxes, computed on | ||
the basis, at the rates and for the periods
prescribed in this | ||
Act:
| ||
(a) An initial franchise tax at the time of filing its | ||
first report of
issuance of shares.
| ||
(b) An additional franchise tax at the time of filing (1) a | ||
report of
the issuance of additional shares, or (2) a report of | ||
an increase in paid-in
capital without the issuance of shares, | ||
or (3) an amendment to the articles
of incorporation or a | ||
report of cumulative changes in paid-in capital,
whenever any | ||
amendment or such report discloses an increase in its paid-in
| ||
capital over the amount thereof last reported in any document, | ||
other than
an annual report, interim annual report or final | ||
transition annual report
required by this Act to be filed in | ||
the office of the Secretary of State.
| ||
(c) An additional franchise tax at the time of filing a | ||
report of paid-in
capital following a statutory merger or | ||
consolidation, which discloses that
the paid-in capital of the | ||
surviving or new corporation immediately after
the merger or | ||
consolidation is greater than the sum of the paid-in capital
of | ||
all of the merged or consolidated corporations as last reported
| ||
by them in any documents, other than annual reports, required | ||
by this Act
to be filed in the office of the Secretary of | ||
State; and in addition, the
surviving or new corporation shall | ||
be liable for a further additional franchise
tax on the paid-in | ||
capital of each of the merged or consolidated
corporations as | ||
last reported by them in any document, other than an annual
| ||
report, required by this Act to be filed with the Secretary of | ||
State from
their taxable year end to the next succeeding | ||
anniversary month or, in
the case of a corporation which has | ||
established an extended filing month,
the extended filing month | ||
of the surviving or new corporation; however if
the taxable | ||
year ends within the 2 month period immediately preceding the
| ||
anniversary month or, in the case of a corporation which has | ||
established an
extended filing month, the extended filing month | ||
of the surviving or new
corporation the tax will be computed to | ||
the anniversary month or, in the
case of a corporation which | ||
has established an extended filing month, the
extended filing | ||
month of the surviving or new corporation in the next
| ||
succeeding calendar year.
| ||
(d) An annual franchise tax payable each year with the | ||
annual report
which the corporation is required by this Act to | ||
file.
| ||
(e) On or after January 1, 2020 and prior to January 1, | ||
2021, the first $30 in liability is exempt from the tax imposed | ||
under this Section. On or after January 1, 2021 and prior to | ||
January 1, 2022, the first $1,000 in liability is exempt from | ||
the tax imposed under this Section. On or after January 1, 2022 | ||
and prior to January 1, 2023, the first $10,000 in liability is | ||
exempt from the tax imposed under this Section. On or after | ||
January 1, 2023 and prior to January 1, 2024, the first | ||
$100,000 in liability is exempt from the tax imposed under this | ||
Section. The provisions of this Section shall not require the | ||
payment of any franchise tax that would otherwise have been due | ||
and payable on or after January 1, 2024. There shall be no | ||
refunds or proration of franchise tax for any taxes due and | ||
payable on or after January 1, 2024 on the basis that a portion | ||
of the corporation's taxable year extends beyond January 1, | ||
2024. This amendatory Act of the 101st General Assembly shall | ||
not affect any right accrued or established, or any liability | ||
or penalty incurred prior to January 1, 2024. | ||
(f) This Section is repealed on December 31, 2025. | ||
(Source: P.A. 86-985.)
| ||
(805 ILCS 5/15.65) (from Ch. 32, par. 15.65)
| ||
Sec. 15.65. Franchise taxes payable by foreign | ||
corporations. For the privilege of exercising its authority to | ||
transact such business
in this State as set out in its | ||
application therefor or any amendment
thereto, each foreign | ||
corporation shall pay to the Secretary of State the
following | ||
franchise taxes, computed on the basis, at the rates and for | ||
the
periods prescribed in this Act:
| ||
(a) An initial franchise tax at the time of filing its | ||
application for
authority to transact business in this State.
| ||
(b) An additional franchise tax at the time of filing (1) a | ||
report of
the issuance of additional shares, or (2) a report of | ||
an increase in paid-in
capital without the issuance of shares, | ||
or (3) a report of cumulative
changes in paid-in capital or a | ||
report of an exchange or reclassification
of shares, whenever | ||
any such report discloses an increase in its paid-in
capital | ||
over the amount thereof last reported in any document, other | ||
than
an annual report, interim annual report or final | ||
transition annual report,
required by this Act to be filed in | ||
the office of the Secretary of State.
| ||
(c) Whenever the corporation shall be a party to a | ||
statutory merger and
shall be the surviving corporation, an | ||
additional franchise tax at the time
of filing its report | ||
following merger, if such report discloses that the
amount | ||
represented in this State of its paid-in capital immediately | ||
after
the merger is greater than the aggregate of the amounts | ||
represented in this
State of the paid-in capital of such of the | ||
merged corporations as were
authorized to transact business in | ||
this State at the time of the merger, as
last reported by them | ||
in any documents, other than annual reports, required
by this | ||
Act to be filed in the office of the Secretary of State; and in
| ||
addition, the surviving corporation shall be liable for a | ||
further
additional franchise tax on the paid-in capital of each | ||
of the merged
corporations as last reported by them in any | ||
document, other than an annual
report, required by this Act to | ||
be filed with the Secretary
of State, from their taxable year | ||
end to the next succeeding anniversary
month or, in the case of | ||
a corporation which has established an extended
filing month, | ||
the extended filing month of the surviving corporation;
however | ||
if the taxable year ends within the 2 month period immediately
| ||
preceding the anniversary month or the extended filing month of | ||
the
surviving corporation, the tax will be computed to the | ||
anniversary or,
extended filing month of the surviving | ||
corporation in the next succeeding
calendar year.
| ||
(d) An annual franchise tax payable each year with any
| ||
annual report which the corporation is required by this Act to | ||
file.
| ||
(e) On or after January 1, 2020 and prior to January 1, | ||
2021, the first $30 in liability is exempt from the tax imposed | ||
under this Section. On or after January 1, 2021 and prior to | ||
January 1, 2022, the first $1,000 in liability is exempt from | ||
the tax imposed under this Section. On or after January 1, 2022 | ||
and prior to January 1, 2023, the first $10,000 in liability is | ||
exempt from the tax imposed under this Section. On or after | ||
January 1, 2023 and prior to January 1, 2024, the first | ||
$100,000 in liability is exempt from the tax imposed under this | ||
Section. The provisions of this Section shall not require the | ||
payment of any franchise tax that would otherwise have been due | ||
and payable on or after January 1, 2024. There shall be no | ||
refunds or proration of franchise tax for any taxes due and | ||
payable on or after January 1, 2024 on the basis that a portion | ||
of the corporation's taxable year extends beyond January 1, | ||
2024. This amendatory Act of the 101st General Assembly shall | ||
not affect any right accrued or established, or any liability | ||
or penalty incurred prior to January 1, 2024. | ||
(f) This Section is repealed on December 31, 2024. | ||
(Source: P.A. 92-33, eff. 7-1-01.)
| ||
(805 ILCS 5/15.97) (from Ch. 32, par. 15.97)
| ||
Sec. 15.97. Corporate Franchise Tax Refund Fund.
| ||
(a) Beginning July 1, 1993, a percentage of the amounts | ||
collected
under Sections 15.35, 15.45, 15.65, and 15.75 of this | ||
Act shall be
deposited into the Corporate Franchise Tax Refund | ||
Fund, a special Fund
hereby created in the State treasury. From | ||
July 1, 1993, until December 31,
1994, there shall be deposited | ||
into the Fund 3% of the amounts received
under those Sections. | ||
Beginning January 1, 1995, and for each fiscal year
beginning | ||
thereafter, 2% of the amounts collected under those Sections
| ||
during the preceding fiscal year shall be deposited into the | ||
Fund.
| ||
(b) Beginning July 1, 1993, moneys in the Fund shall be | ||
expended
exclusively for the purpose of paying refunds payable | ||
because of overpayment
of franchise taxes, penalties, or | ||
interest under Sections 13.70, 15.35,
15.45, 15.65, 15.75, and | ||
16.05 of this
Act and making transfers authorized under this | ||
Section. Refunds in
accordance with the provisions of | ||
subsections (f) and (g) of Section 1.15
and Section 1.17 of | ||
this Act may be made from the Fund only to the extent that
| ||
amounts collected under Sections 15.35, 15.45, 15.65, and 15.75 | ||
of this Act
have been deposited in the Fund and remain | ||
available. On or before August 31 of each year, the balance in | ||
the Fund in excess of $100,000 shall be transferred to the | ||
General Revenue Fund. Notwithstanding the provisions of this | ||
subsection, for the period commencing on or after July 1, 2022, | ||
amounts in the fund shall not be transferred to the General | ||
Revenue Fund and shall be used to pay refunds in accordance | ||
with the provisions of this Act. Within a reasonable time after | ||
December 31, 2022, the Secretary of State shall direct and the | ||
Comptroller shall order transferred to the General Revenue Fund | ||
all amounts remaining in the fund.
| ||
(c) This Act shall constitute an irrevocable and continuing
| ||
appropriation from the Corporate Franchise Tax Refund Fund for | ||
the purpose
of paying refunds upon the order of the Secretary | ||
of State in accordance
with the provisions of this Section.
| ||
(d) This Section is repealed on December 31, 2022. | ||
(Source: P.A. 99-620, eff. 1-1-17.)
| ||
ARTICLE 99. EFFECTIVE DATE | ||
Section 999. Effective date. This Act takes effect upon | ||
becoming law.
| ||