Public Act 102-0658
 
SB2531 EnrolledLRB102 15312 HLH 20668 b


  
    AN ACT concerning revenue.
  
 
    Be it enacted by the People of the State of Illinois,
 
represented in the General Assembly:
  





 
    Section 5. The Illinois Income Tax Act is amended  by 
changing Sections 201, 203, and 901 as follows:
 
 

    (35 ILCS 5/201)

 
    (Text of Section without the changes made by P.A. 101-8, 
which did not take effect (see Section 99 of P.A. 101-8))
    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. 
    (b-5) Surcharge; sale or exchange of assets, properties, 
and intangibles of organization gaming  licensees. For each of 
taxable years 2019 through 2027, 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 (i)  
of an organization licensee under the Illinois Horse Racing 
Act of 1975 and (ii) of an organization gaming licensee under 
the Illinois Gambling 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 shall not apply if: 
        (1) the organization gaming license, organization 
    license, or racetrack property is transferred as a result 
    of any of the following:
            (A) bankruptcy, a receivership, or a debt 
        adjustment initiated by or against the initial 
        licensee or the substantial owners of the initial 
        licensee;
            (B) cancellation, revocation, or termination of 
        any such license by the Illinois Gaming Board or the 
        Illinois Racing Board;
            (C) a determination by the Illinois Gaming Board 
        that transfer of the license is in the best interests 
        of Illinois gaming;
            (D) the death of an owner of the equity interest in 
        a licensee;
            (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 license when the license was issued; or 
        (2) the controlling interest in the organization 
    gaming license, organization license, or racetrack 
    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; or
        (3) live horse racing was not conducted in 2010 at a 
    racetrack located within 3 miles of the Mississippi River 
    under a license issued pursuant to the Illinois Horse 
    Racing Act of 1975. 
    The transfer of an organization gaming license, 
organization license, or racetrack property by a person other 
than the initial licensee to receive the organization gaming 
license is not subject to a surcharge. The Department shall 
adopt rules necessary to implement and administer this 
subsection. 
    (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 Public Act 101-9 
    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 construction 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 Public Act 101-9 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, 2027, 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 Public Act 91-644 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, 2027, including, but not 
limited to, the period beginning on January 1, 2016 and ending 
on July 6, 2017 (the effective date of Public Act 100-22) 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 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 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 
        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.
    (p) Pass-through entity tax. 
        (1) For taxable years ending on or after December 31, 
    2021 and beginning prior to January 1, 2026, a partnership 
    (other than a publicly traded partnership under Section 
    7704 of the Internal Revenue Code) or Subchapter S 
    corporation may elect to apply the provisions of this 
    subsection. A separate election shall be made for each 
    taxable year. Such election shall be made at such time, 
    and in such form and manner as prescribed by the 
    Department, and, once made, is irrevocable. 
        (2) Entity-level tax. A partnership or Subchapter S 
    corporation electing to apply the provisions of this 
    subsection shall be subject to a tax for the privilege of 
    earning or receiving income in this State in an amount 
    equal to 4.95% of the taxpayer's net income for the 
    taxable year. 
        (3) Net income defined. 
            (A) In general. For purposes of paragraph (2), the 
        term net income has the same meaning as defined in 
        Section 202 of this Act, except that the following 
        provisions shall not apply: 
                (i) the standard exemption allowed under 
            Section 204; 
                (ii) the deduction for net losses allowed 
            under Section 207; 
                (iii) in the case of an S corporation, the 
            modification under Section 203(b)(2)(S); and 
                (iv) in the case of a partnership, the 
            modifications under Section 203(d)(2)(H) and 
            Section 203(d)(2)(I). 
            (B) Special rule for tiered partnerships. If a 
        taxpayer making the election under paragraph (1) is a 
        partner of another taxpayer making the election under 
        paragraph (1), net income shall be computed as 
        provided in subparagraph (A), except that the taxpayer 
        shall subtract its distributive share of the net 
        income of the electing partnership (including its 
        distributive share of the net income of the electing 
        partnership derived as a distributive share from 
        electing partnerships in which it is a partner). 
        (4) Credit for entity level tax. Each partner or 
    shareholder of a taxpayer making the election under this 
    Section shall be allowed a credit against the tax imposed 
    under subsections (a) and (b) of Section 201 of this Act 
    for the taxable year of the partnership or Subchapter S 
    corporation for which an election is in effect ending 
    within or with the taxable year of the partner or 
    shareholder in an amount equal to 4.95% times the partner 
    or shareholder's distributive share of the net income of 
    the electing partnership or Subchapter S corporation, but 
    not to exceed the partner's or shareholder's share of the 
    tax imposed under paragraph (1) which is actually paid by 
    the partnership or Subchapter S corporation. If the 
    taxpayer is a partnership or Subchapter S corporation that 
    is itself a partner of a partnership making the election 
    under paragraph (1), the credit under this paragraph shall 
    be allowed to the taxpayer's partners or shareholders (or 
    if the partner is a partnership or Subchapter S 
    corporation then its 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. If the 
    amount of the credit allowed under this paragraph exceeds 
    the partner's or shareholder's liability for tax imposed 
    under subsections (a) and (b) of Section 201 of this Act 
    for the taxable year, such excess shall be treated as an 
    overpayment for purposes of Section 909 of this Act. 
        (5) Nonresidents. A nonresident individual who is a 
    partner or shareholder of a partnership or Subchapter S 
    corporation for a taxable year for which an election is in 
    effect under paragraph (1) shall not be required to file 
    an income tax return under this Act for such taxable year 
    if the only source of net income of the individual (or the 
    individual and the individual's spouse in the case of a 
    joint return) is from an entity making the election under 
    paragraph (1) and the credit allowed to the partner or 
    shareholder under paragraph (4) equals or exceeds the 
    individual's liability for the tax imposed under 
    subsections (a) and (b) of Section 201 of this Act for the 
    taxable year.
        (6) Liability for tax. Except as provided in this 
    paragraph, a partnership or Subchapter S making the 
    election under paragraph (1) is liable for the 
    entity-level tax imposed under paragraph (2). If the 
    electing partnership or corporation fails to pay the full 
    amount of tax deemed assessed under paragraph (2), the 
    partners or shareholders shall be liable to pay the tax 
    assessed (including penalties and interest). Each partner 
    or shareholder shall be liable for the unpaid assessment 
    based on the ratio of the partner's or shareholder's share 
    of the net income of the partnership over the total net 
    income of the partnership. If the partnership or 
    Subchapter S corporation fails to pay the tax assessed 
    (including penalties and interest) and thereafter an 
    amount of such tax is paid by the partners or 
    shareholders, such amount shall not be collected from the 
    partnership or corporation. 
        (7) Foreign tax. For purposes of the credit allowed 
    under Section 601(b)(3) of this Act, tax paid by a 
    partnership or Subchapter S corporation to another state 
    which, as determined by the Department, is substantially 
    similar to the tax imposed under this subsection, shall be 
    considered tax paid by the partner or shareholder to the 
    extent that the partner's or shareholder's share of the 
    income of the partnership or Subchapter S corporation 
    allocated and apportioned to such other state bears to the 
    total income of the partnership or Subchapter S 
    corporation allocated or apportioned to such other state. 
        (8) Suspension of withholding. The provisions of 
    Section 709.5 of this Act shall not apply to a partnership 
    or Subchapter S corporation for the taxable year for which 
    an election under paragraph (1) is in effect. 
        (9) Requirement to pay estimated tax. For each taxable 
    year for which an election under paragraph (1) is in 
    effect, a partnership or Subchapter S corporation is 
    required to pay estimated tax for such taxable year under 
    Sections 803 and 804 of this Act if the amount payable as 
    estimated tax can reasonably be expected to exceed $500. 
        (10) The provisions of this subsection shall apply 
    only with respect to taxable years for which the 
    limitation on individual deductions applies under Section 
    164(b)(6) of the Internal Revenue Code. 
(Source: P.A. 100-22, eff. 7-6-17; 101-9, eff. 6-5-19; 101-31, 
eff. 6-28-19; 101-207, eff. 8-2-19; 101-363, eff. 8-9-19; 
revised 11-18-20.)
 
    (Text of Section with the changes made by P.A. 101-8, 
which did not take effect (see Section 99 of P.A. 101-8))
  
    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 and 
    beginning prior to January 1, 2021, an amount equal to 
    4.95% of the taxpayer's net income for the taxable year. 
        (5.5) In the case of an individual, trust, or estate, 
    for taxable years beginning on or after January 1, 2021, 
    an amount calculated under the rate structure set forth in 
    Section 201.1. 
        (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 and beginning prior to 
    January 1, 2021, an amount equal to 7% of the taxpayer's 
    net income for the taxable year. 
        (15) In the case of a corporation, for taxable years 
    beginning on or after January 1, 2021, an amount equal to 
    7.99% 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. 
    (b-5) Surcharge; sale or exchange of assets, properties, 
and intangibles of organization gaming  licensees. For each of 
taxable years 2019 through 2027, 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 (i)  
of an organization licensee under the Illinois Horse Racing 
Act of 1975 and (ii) of an organization gaming licensee under 
the Illinois Gambling 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 shall not apply if: 
        (1) the organization gaming license, organization 
    license, or racetrack property is transferred as a result 
    of any of the following:
            (A) bankruptcy, a receivership, or a debt 
        adjustment initiated by or against the initial 
        licensee or the substantial owners of the initial 
        licensee;
            (B) cancellation, revocation, or termination of 
        any such license by the Illinois Gaming Board or the 
        Illinois Racing Board;
            (C) a determination by the Illinois Gaming Board 
        that transfer of the license is in the best interests 
        of Illinois gaming;
            (D) the death of an owner of the equity interest in 
        a licensee;
            (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 license when the license was issued; or 
        (2) the controlling interest in the organization 
    gaming license, organization license, or racetrack 
    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; or
        (3) live horse racing was not conducted in 2010 at a 
    racetrack located within 3 miles of the Mississippi River 
    under a license issued pursuant to the Illinois Horse 
    Racing Act of 1975. 
    The transfer of an organization gaming license, 
organization license, or racetrack property by a person other 
than the initial licensee to receive the organization gaming 
license is not subject to a surcharge. The Department shall 
adopt rules necessary to implement and administer this 
subsection. 
    (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 Public Act 101-9 
    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 construction 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 Public Act 101-9 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, 2027, 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 Public Act 91-644 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, 2027, including, but not 
limited to, the period beginning on January 1, 2016 and ending 
on July 6, 2017 (the effective date of Public Act 100-22) 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 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 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 
        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.
    (p) Pass-through entity tax. 
        (1) For taxable years ending on or after December 31, 
    2021 and beginning prior to January 1, 2026, a partnership 
    (other than a publicly traded partnership under Section 
    7704 of the Internal Revenue Code) or Subchapter S 
    corporation may elect to apply the provisions of this 
    subsection. A separate election shall be made for each 
    taxable year. Such election shall be made at such time, 
    and in such form and manner as prescribed by the 
    Department, and, once made, is irrevocable. 
        (2) Entity-level tax. A partnership or Subchapter S 
    corporation electing to apply the provisions of this 
    subsection shall be subject to a tax for the privilege of 
    earning or receiving income in this State in an amount 
    equal to 4.95% of the taxpayer's net income for the 
    taxable year. 
        (3) Net income defined. 
            (A) In general. For purposes of paragraph (2), the 
        term net income has the same meaning as defined in 
        Section 202 of this Act, except that the following 
        provisions shall not apply: 
                (i) the standard exemption allowed under 
            Section 204; 
                (ii) the deduction for net losses allowed 
            under Section 207; 
                (iii) in the case of an S corporation, the 
            modification under Section 203(b)(2)(S); and 
                (iv) in the case of a partnership, the 
            modifications under Section 203(d)(2)(H) and 
            Section 203(d)(2)(I). 
            (B) Special rule for tiered partnerships. If a 
        taxpayer making the election under paragraph (1) is a 
        partner of another taxpayer making the election under 
        paragraph (1), net income shall be computed as 
        provided in subparagraph (A), except that the taxpayer 
        shall subtract its distributive share of the net 
        income of the electing partnership (including its 
        distributive share of the net income of the electing 
        partnership derived as a distributive share from 
        electing partnerships in which it is a partner). 
        (4) Credit for entity level tax. Each partner or 
    shareholder of a taxpayer making the election under this 
    Section shall be allowed a credit against the tax imposed 
    under subsections (a) and (b) of Section 201 of this Act 
    for the taxable year of the partnership or Subchapter S 
    corporation for which an election is in effect ending 
    within or with the taxable year of the partner or 
    shareholder in an amount equal to 4.95% times the partner 
    or shareholder's distributive share of the net income of 
    the electing partnership or Subchapter S corporation, but 
    not to exceed the partner's or shareholder's share of the 
    tax imposed under paragraph (1) which is actually paid by 
    the partnership or Subchapter S corporation. If the 
    taxpayer is a partnership or Subchapter S corporation that 
    is itself a partner of a partnership making the election 
    under paragraph (1), the credit under this paragraph shall 
    be allowed to the taxpayer's partners or shareholders (or 
    if the partner is a partnership or Subchapter S 
    corporation then its 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. If the 
    amount of the credit allowed under this paragraph exceeds 
    the partner's or shareholder's liability for tax imposed 
    under subsections (a) and (b) of Section 201 of this Act 
    for the taxable year, such excess shall be treated as an 
    overpayment for purposes of Section 909 of this Act. 
        (5) Nonresidents. A nonresident individual who is a 
    partner or shareholder of a partnership or Subchapter S 
    corporation for a taxable year for which an election is in 
    effect under paragraph (1) shall not be required to file 
    an income tax return under this Act for such taxable year 
    if the only source of net income of the individual (or the 
    individual and the individual's spouse in the case of a 
    joint return) is from an entity making the election under 
    paragraph (1) and the credit allowed to the partner or 
    shareholder under paragraph (4) equals or exceeds the 
    individual's liability for the tax imposed under 
    subsections (a) and (b) of Section 201 of this Act for the 
    taxable year.
        (6) Liability for tax. Except as provided in this 
    paragraph, a partnership or Subchapter S making the 
    election under paragraph (1) is liable for the 
    entity-level tax imposed under paragraph (2). If the 
    electing partnership or corporation fails to pay the full 
    amount of tax deemed assessed under paragraph (2), the 
    partners or shareholders shall be liable to pay the tax 
    assessed (including penalties and interest). Each partner 
    or shareholder shall be liable for the unpaid assessment 
    based on the ratio of the partner's or shareholder's share 
    of the net income of the partnership over the total net 
    income of the partnership. If the partnership or 
    Subchapter S corporation fails to pay the tax assessed 
    (including penalties and interest) and thereafter an 
    amount of such tax is paid by the partners or 
    shareholders, such amount shall not be collected from the 
    partnership or corporation. 
        (7) Foreign tax. For purposes of the credit allowed 
    under Section 601(b)(3) of this Act, tax paid by a 
    partnership or Subchapter S corporation to another state 
    which, as determined by the Department, is substantially 
    similar to the tax imposed under this subsection, shall be 
    considered tax paid by the partner or shareholder to the 
    extent that the partner's or shareholder's share of the 
    income of the partnership or Subchapter S corporation 
    allocated and apportioned to such other state bears to the 
    total income of the partnership or Subchapter S 
    corporation allocated or apportioned to such other state. 
        (8) Suspension of withholding. The provisions of 
    Section 709.5 of this Act shall not apply to a partnership 
    or Subchapter S corporation for the taxable year for which 
    an election under paragraph (1) is in effect. 
        (9) Requirement to pay estimated tax. For each taxable 
    year for which an election under paragraph (1) is in 
    effect, a partnership or Subchapter S corporation is 
    required to pay estimated tax for such taxable year under 
    Sections 803 and 804 of this Act if the amount payable as 
    estimated tax can reasonably be expected to exceed $500. 
        (10) The provisions of this subsection shall apply 
    only with respect to taxable years for which the 
    limitation on individual deductions applies under Section 
    164(b)(6) of the Internal Revenue Code. 
(Source: P.A. 100-22, eff. 7-6-17; 101-8, see Section 99 for 
effective date; 101-9, eff. 6-5-19; 101-31, eff. 6-28-19; 
101-207, eff. 8-2-19; 101-363, eff. 8-9-19; revised 11-18-20.)
 
    (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; 
            (D-25) In the case of a resident, an amount equal 
        to the amount of tax for which a credit is allowed 
        pursuant to Section 201(p)(7) of this Act; 
    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) 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, 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) 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;
            (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) 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, 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; 
101-9, eff. 6-5-19; 101-81, eff. 7-12-19; revised 9-20-19.)
 
 

    (35 ILCS 5/901)

 
    (Text of Section without the changes made by P.A. 101-8, 
which did not take effect (see Section 99 of P.A. 101-8))
    Sec. 901. Collection authority. 
    (a) In general. The Department shall collect the taxes 
imposed by this Act.  The Department
shall collect certified 
past due child support amounts under Section 2505-650
of the 
Department of Revenue Law of the
Civil Administrative Code of 
Illinois.  Except as
provided in subsections (b), (c), (e), 
(f), (g), and (h) of this Section, money collected
pursuant to 
subsections (a) and (b) of Section 201 of this Act shall be

paid into the General Revenue Fund in the State treasury; 
money
collected pursuant to subsections (c) and (d) of Section 
201 of this Act
shall be paid into the Personal Property Tax 
Replacement Fund, a special
fund in the State Treasury; and 
money collected under Section 2505-650 of the
Department of 
Revenue Law of the
Civil Administrative Code of Illinois shall 
be paid
into the
Child Support Enforcement Trust Fund, a 
special fund outside the State
Treasury, or
to the State

Disbursement Unit established under Section 10-26 of the 
Illinois Public Aid
Code, as directed by the Department of 
Healthcare and Family Services.
    (b) Local Government Distributive Fund. Beginning August 
1, 2017, the Treasurer shall transfer each month from the 
General Revenue Fund to the Local Government Distributive Fund 
an amount equal to the sum of: (i) 6.06% (10% of the ratio of 
the 3% individual income tax rate prior to 2011 to the 4.95% 
individual income tax rate after July 1, 2017) of the net 
revenue realized from the tax imposed by subsections (a) and 
(b) of Section 201 of this Act upon individuals, trusts, and 
estates during the preceding month; and (ii) 6.85% (10% of the 
ratio of the 4.8% corporate income tax rate prior to 2011 to 
the 7% corporate income tax rate after July 1, 2017) of the net 
revenue realized from the tax imposed by subsections (a) and 
(b) of Section 201 of this Act upon corporations during the 
preceding month; and (iii) beginning February 1, 2022, 6.06% 
of the net revenue realized from the tax imposed by subsection 
(p) of Section 201 of this Act upon electing pass-through 
entities. Net revenue realized for a month shall be defined as 
the
revenue from the tax imposed by subsections (a) and (b) of 
Section 201 of this
Act which is deposited in the General 
Revenue Fund, the Education Assistance
Fund, the Income Tax 
Surcharge Local Government Distributive Fund, the Fund for the 
Advancement of Education, and the Commitment to Human Services 
Fund during the
month minus the amount paid out of the General 
Revenue Fund in State warrants
during that same month as 
refunds to taxpayers for overpayment of liability
under the 
tax imposed by subsections (a) and (b) of Section 201 of this 
Act.
    Notwithstanding any provision of law to the contrary, 
beginning on July 6, 2017 (the effective date of Public Act 
100-23), those amounts required under this subsection (b) to 
be transferred by the Treasurer into the Local Government 
Distributive Fund from the General Revenue Fund shall be 
directly deposited into the Local Government Distributive Fund 
as the revenue is realized from the tax imposed by subsections 
(a) and (b) of Section 201 of this Act.
    For State fiscal year 2020 only, notwithstanding any 
provision of law to the contrary, the total amount of revenue 
and deposits under this Section attributable to revenues 
realized during State fiscal year 2020 shall be reduced by 5%. 
    (c) Deposits Into Income Tax Refund Fund.
        (1) Beginning on January 1, 1989 and thereafter, the 
    Department shall
deposit a percentage of the amounts 
    collected pursuant to subsections (a)
and (b)(1), (2), and 
    (3) of Section 201 of this Act into a fund in the State

    treasury known as the Income Tax Refund Fund.  Beginning 
    with State fiscal year 1990 and for each fiscal year

    thereafter, the percentage deposited into the Income Tax 
    Refund Fund during a
fiscal year shall be the Annual 
    Percentage. For fiscal year 2011, the Annual Percentage 
    shall be 8.75%. For fiscal year 2012, the Annual 
    Percentage shall be 8.75%. For fiscal year 2013, the 
    Annual Percentage shall be 9.75%. For fiscal year 2014, 
    the Annual Percentage shall be 9.5%. For fiscal year 2015, 
    the Annual Percentage shall be 10%. For fiscal year 2018, 
    the Annual Percentage shall be 9.8%. For fiscal year 2019, 
    the Annual Percentage shall be 9.7%. For fiscal year 2020, 
    the Annual Percentage shall be 9.5%. For fiscal year 2021, 
    the Annual Percentage shall be 9%. For all other
fiscal 
    years, the
Annual Percentage shall be calculated as a 
    fraction, the numerator of which
shall be the amount of 
    refunds approved for payment by the Department during
the 
    preceding fiscal year as a result of overpayment of tax 
    liability under
subsections (a) and (b)(1), (2), and (3) 
    of Section 201 of this Act plus the
amount of such refunds 
    remaining approved but unpaid at the end of the
preceding 
    fiscal year, minus the amounts transferred into the Income 
    Tax
Refund Fund from the Tobacco Settlement Recovery Fund, 
    and
the denominator of which shall be the amounts which 
    will be collected pursuant
to subsections (a) and (b)(1), 
    (2), and (3) of Section 201 of this Act during
the 
    preceding fiscal year; except that in State fiscal year 
    2002, the Annual
Percentage shall in no event exceed 7.6%.  
    The Director of Revenue shall
certify the Annual 
    Percentage to the Comptroller on the last business day of

    the fiscal year immediately preceding the fiscal year for 
    which it is to be
effective.
        (2) Beginning on January 1, 1989 and thereafter, the 
    Department shall
deposit a percentage of the amounts 
    collected pursuant to subsections (a)
and (b)(6), (7), and 
    (8), (c) and (d) of Section 201
of this Act into a fund in 
    the State treasury known as the Income Tax
Refund Fund.  
    Beginning
with State fiscal year 1990 and for each fiscal 
    year thereafter, the
percentage deposited into the Income 
    Tax Refund Fund during a fiscal year
shall be the Annual 
    Percentage. For fiscal year 2011, the Annual Percentage 
    shall be 17.5%. For fiscal year 2012, the Annual 
    Percentage shall be 17.5%. For fiscal year 2013, the 
    Annual Percentage shall be 14%. For fiscal year 2014, the 
    Annual Percentage shall be 13.4%. For fiscal year 2015, 
    the Annual Percentage shall be 14%. For fiscal year 2018, 
    the Annual Percentage shall be 17.5%.  For fiscal year 
    2019, the Annual Percentage shall be 15.5%. For fiscal 
    year 2020, the Annual Percentage shall be 14.25%. For 
    fiscal year 2021, the Annual Percentage shall be 14%. For 
    all other fiscal years, the Annual
Percentage shall be 
    calculated
as a fraction, the numerator of which shall be 
    the amount of refunds
approved for payment by the 
    Department during the preceding fiscal year as
a result of 
    overpayment of tax liability under subsections (a) and 
    (b)(6),
(7), and (8), (c) and (d) of Section 201 of this 
    Act plus the
amount of such refunds remaining approved but 
    unpaid at the end of the
preceding fiscal year, and the 
    denominator of
which shall be the amounts which will be 
    collected pursuant to subsections (a)
and (b)(6), (7), and 
    (8), (c) and (d) of Section 201 of this Act during the

    preceding fiscal year; except that in State fiscal year 
    2002, the Annual
Percentage shall in no event exceed 23%.  
    The Director of Revenue shall
certify the Annual 
    Percentage to the Comptroller on the last business day of

    the fiscal year immediately preceding the fiscal year for 
    which it is to be
effective.
        (3) The Comptroller shall order transferred and the 
    Treasurer shall
transfer from the Tobacco Settlement 
    Recovery Fund to the Income Tax Refund
Fund (i) 
    $35,000,000 in January, 2001, (ii) $35,000,000 in January, 
    2002, and
(iii) $35,000,000 in January, 2003.
    (d) Expenditures from Income Tax Refund Fund.
        (1) Beginning January 1, 1989, money in the Income Tax 
    Refund Fund
shall be expended exclusively for the purpose 
    of paying refunds resulting
from overpayment of tax 
    liability under Section 201 of this Act
and for
making 
    transfers pursuant to this subsection (d).
        (2) The Director shall order payment of refunds 
    resulting from
overpayment of tax liability under Section 
    201 of this Act from the
Income Tax Refund Fund only to the 
    extent that amounts collected pursuant
to Section 201 of 
    this Act and transfers pursuant to this subsection (d)
and 
    item (3) of subsection (c) have been deposited and 
    retained in the
Fund.
        (3) As soon as possible after the end of each fiscal 
    year, the Director
shall
order transferred and the State 
    Treasurer and State Comptroller shall
transfer from the 
    Income Tax Refund Fund to the Personal Property Tax

    Replacement Fund an amount, certified by the Director to 
    the Comptroller,
equal to the excess of the amount 
    collected pursuant to subsections (c) and
(d) of Section 
    201 of this Act deposited into the Income Tax Refund Fund

    during the fiscal year over the amount of refunds 
    resulting from
overpayment of tax liability under 
    subsections (c) and (d) of Section 201
of this Act paid 
    from the Income Tax Refund Fund during the fiscal year.
        (4) As soon as possible after the end of each fiscal 
    year, the Director shall
order transferred and the State 
    Treasurer and State Comptroller shall
transfer from the 
    Personal Property Tax Replacement Fund to the Income Tax

    Refund Fund an amount, certified by the Director to the 
    Comptroller, equal
to the excess of the amount of refunds 
    resulting from overpayment of tax
liability under 
    subsections (c) and (d) of Section 201 of this Act paid

    from the Income Tax Refund Fund during the fiscal year 
    over the amount
collected pursuant to subsections (c) and 
    (d) of Section 201 of this Act
deposited into the Income 
    Tax Refund Fund during the fiscal year.
        (4.5) As soon as possible after the end of fiscal year 
    1999 and of each
fiscal year
thereafter, the Director 
    shall order transferred and the State Treasurer and
State 
    Comptroller shall transfer from the Income Tax Refund Fund 
    to the General
Revenue Fund any surplus remaining in the 
    Income Tax Refund Fund as of the end
of such fiscal year; 
    excluding for fiscal years 2000, 2001, and 2002
amounts 
    attributable to transfers under item (3) of subsection (c) 
    less refunds
resulting from the earned income tax credit.
        (5) This Act shall constitute an irrevocable and 
    continuing
appropriation from the Income Tax Refund Fund 
    for the purpose of paying
refunds upon the order of the 
    Director in accordance with the provisions of
this 
    Section.
    (e) Deposits into the Education Assistance Fund and the 
Income Tax
Surcharge Local Government Distributive Fund. On 
July 1, 1991, and thereafter, of the amounts collected 
pursuant to
subsections (a) and (b) of Section 201 of this Act, 
minus deposits into the
Income Tax Refund Fund, the Department 
shall deposit 7.3% into the
Education Assistance Fund in the 
State Treasury.  Beginning July 1, 1991,
and continuing through 
January 31, 1993, of the amounts collected pursuant to

subsections (a) and (b) of Section 201 of the Illinois Income 
Tax Act, minus
deposits into the Income Tax Refund Fund, the 
Department shall deposit 3.0%
into the Income Tax Surcharge 
Local Government Distributive Fund in the State
Treasury.  
Beginning February 1, 1993 and continuing through June 30, 
1993, of
the amounts collected pursuant to subsections (a) and 
(b) of Section 201 of the
Illinois Income Tax Act, minus 
deposits into the Income Tax Refund Fund, the
Department shall 
deposit 4.4% into the Income Tax Surcharge Local Government

Distributive Fund in the State Treasury.  Beginning July 1, 
1993, and
continuing through June 30, 1994, of the amounts 
collected under subsections
(a) and (b) of Section 201 of this 
Act, minus deposits into the Income Tax
Refund Fund, the 
Department shall deposit 1.475% into the Income Tax Surcharge

Local Government Distributive Fund in the State Treasury.
    (f) Deposits into the Fund for the Advancement of 
Education. Beginning February 1, 2015, the Department shall 
deposit the following portions of the revenue realized from 
the tax imposed upon individuals, trusts, and estates by 
subsections (a) and (b) of Section 201 of this Act, minus 
deposits into the Income Tax Refund Fund, into the Fund for the 
Advancement of Education: 
        (1) beginning February 1, 2015, and prior to February 
    1, 2025, 1/30; and 
        (2) beginning February 1, 2025, 1/26. 
    If the rate of tax imposed by subsection (a) and (b) of 
Section 201 is reduced pursuant to Section 201.5 of this Act, 
the Department shall not make the deposits required by this 
subsection (f) on or after the effective date of the 
reduction. 
    (g) Deposits into the Commitment to Human Services Fund. 
Beginning February 1, 2015, the Department shall deposit the 
following portions of the revenue realized from the tax 
imposed upon individuals, trusts, and estates by subsections 
(a) and (b) of Section 201 of this Act, minus deposits into the 
Income Tax Refund Fund, into the Commitment to Human Services 
Fund: 
        (1) beginning February 1, 2015, and prior to February 
    1, 2025, 1/30; and 
        (2) beginning February 1, 2025, 1/26. 
    If the rate of tax imposed by subsection (a) and (b) of 
Section 201 is reduced pursuant to Section 201.5 of this Act, 
the Department shall not make the deposits required by this 
subsection (g) on or after the effective date of the 
reduction. 
    (h) Deposits into the Tax Compliance and Administration 
Fund.  Beginning on the first day of the first calendar month to 
occur on or after August 26, 2014 (the effective date of Public 
Act 98-1098), each month the Department shall pay into the Tax 
Compliance and Administration Fund, to be used, subject to 
appropriation, to fund additional auditors and compliance 
personnel at the Department, an amount equal to 1/12 of 5% of 
the cash receipts collected during the preceding fiscal year 
by the Audit Bureau of the Department from the tax imposed by 
subsections (a), (b), (c), and (d) of Section 201 of this Act, 
net of deposits into the Income Tax Refund Fund made from those 
cash receipts. 
(Source: P.A. 100-22, eff. 7-6-17; 100-23, eff. 7-6-17; 
100-587, eff. 6-4-18; 100-621, eff. 7-20-18; 100-863, eff. 
8-14-18; 100-1171, eff. 1-4-19; 101-10, eff. 6-5-19; 101-81, 
eff. 7-12-19; 101-636, eff. 6-10-20.)
 
    (Text of Section with the changes made by P.A. 101-8, 
which did not take effect (see Section 99 of P.A. 101-8))
  
    Sec. 901. Collection authority. 
    (a) In general. The Department shall collect the taxes 
imposed by this Act.  The Department
shall collect certified 
past due child support amounts under Section 2505-650
of the 
Department of Revenue Law of the
Civil Administrative Code of 
Illinois.  Except as
provided in subsections (b), (c), (e), 
(f), (g), and (h) of this Section, money collected
pursuant to 
subsections (a) and (b) of Section 201 of this Act shall be

paid into the General Revenue Fund in the State treasury; 
money
collected pursuant to subsections (c) and (d) of Section 
201 of this Act
shall be paid into the Personal Property Tax 
Replacement Fund, a special
fund in the State Treasury; and 
money collected under Section 2505-650 of the
Department of 
Revenue Law of the
Civil Administrative Code of Illinois shall 
be paid
into the
Child Support Enforcement Trust Fund, a 
special fund outside the State
Treasury, or
to the State

Disbursement Unit established under Section 10-26 of the 
Illinois Public Aid
Code, as directed by the Department of 
Healthcare and Family Services.
    (b) Local Government Distributive Fund. Beginning August 
1, 2017 and continuing through January 31, 2021, the Treasurer 
shall transfer each month from the General Revenue Fund to the 
Local Government Distributive Fund an amount equal to the sum 
of: (i) 6.06% (10% of the ratio of the 3% individual income tax 
rate prior to 2011 to the 4.95% individual income tax rate 
after July 1, 2017) of the net revenue realized from the tax 
imposed by subsections (a) and (b) of Section 201 of this Act 
upon individuals, trusts, and estates during the preceding 
month; and (ii) 6.85% (10% of the ratio of the 4.8% corporate 
income tax rate prior to 2011 to the 7% corporate income tax 
rate after July 1, 2017) of the net revenue realized from the 
tax imposed by subsections (a) and (b) of Section 201 of this 
Act upon corporations during the preceding month; and (iii) 
beginning February 1, 2022, 6.06% of the net revenue realized 
from the tax imposed by subsection (p) of Section 201 of this 
Act upon electing pass-through entities. Beginning February 1, 
2021, the Treasurer shall transfer each month from the General 
Revenue Fund to the Local Government Distributive Fund an 
amount equal to the sum of (i) 5.32% of the net revenue 
realized from the tax imposed by subsections (a) and (b) of 
Section 201 of this Act upon individuals, trusts, and estates 
during the preceding month and (ii) 6.16% of the net revenue 
realized from the tax imposed by subsections (a) and (b) of 
Section 201 of this Act upon corporations during the preceding 
month. Net revenue realized for a month shall be defined as the

revenue from the tax imposed by subsections (a) and (b) of 
Section 201 of this
Act which is deposited in the General 
Revenue Fund, the Education Assistance
Fund, the Income Tax 
Surcharge Local Government Distributive Fund, the Fund for the 
Advancement of Education, and the Commitment to Human Services 
Fund during the
month minus the amount paid out of the General 
Revenue Fund in State warrants
during that same month as 
refunds to taxpayers for overpayment of liability
under the 
tax imposed by subsections (a) and (b) of Section 201 of this 
Act.
    Notwithstanding any provision of law to the contrary, 
beginning on July 6, 2017 (the effective date of Public Act 
100-23), those amounts required under this subsection (b) to 
be transferred by the Treasurer into the Local Government 
Distributive Fund from the General Revenue Fund shall be 
directly deposited into the Local Government Distributive Fund 
as the revenue is realized from the tax imposed by subsections 
(a) and (b) of Section 201 of this Act.
    For State fiscal year 2020 only, notwithstanding any 
provision of law to the contrary, the total amount of revenue 
and deposits under this Section attributable to revenues 
realized during State fiscal year 2020 shall be reduced by 5%. 
    (c) Deposits Into Income Tax Refund Fund.
        (1) Beginning on January 1, 1989 and thereafter, the 
    Department shall
deposit a percentage of the amounts 
    collected pursuant to subsections (a)
and (b)(1), (2), and 
    (3) of Section 201 of this Act into a fund in the State

    treasury known as the Income Tax Refund Fund.  Beginning 
    with State fiscal year 1990 and for each fiscal year

    thereafter, the percentage deposited into the Income Tax 
    Refund Fund during a
fiscal year shall be the Annual 
    Percentage. For fiscal year 2011, the Annual Percentage 
    shall be 8.75%. For fiscal year 2012, the Annual 
    Percentage shall be 8.75%. For fiscal year 2013, the 
    Annual Percentage shall be 9.75%. For fiscal year 2014, 
    the Annual Percentage shall be 9.5%. For fiscal year 2015, 
    the Annual Percentage shall be 10%. For fiscal year 2018, 
    the Annual Percentage shall be 9.8%. For fiscal year 2019, 
    the Annual Percentage shall be 9.7%. For fiscal year 2020, 
    the Annual Percentage shall be 9.5%. For fiscal year 2021, 
    the Annual Percentage shall be 9%. For all other
fiscal 
    years, the
Annual Percentage shall be calculated as a 
    fraction, the numerator of which
shall be the amount of 
    refunds approved for payment by the Department during
the 
    preceding fiscal year as a result of overpayment of tax 
    liability under
subsections (a) and (b)(1), (2), and (3) 
    of Section 201 of this Act plus the
amount of such refunds 
    remaining approved but unpaid at the end of the
preceding 
    fiscal year, minus the amounts transferred into the Income 
    Tax
Refund Fund from the Tobacco Settlement Recovery Fund, 
    and
the denominator of which shall be the amounts which 
    will be collected pursuant
to subsections (a) and (b)(1), 
    (2), and (3) of Section 201 of this Act during
the 
    preceding fiscal year; except that in State fiscal year 
    2002, the Annual
Percentage shall in no event exceed 7.6%.  
    The Director of Revenue shall
certify the Annual 
    Percentage to the Comptroller on the last business day of

    the fiscal year immediately preceding the fiscal year for 
    which it is to be
effective.
        (2) Beginning on January 1, 1989 and thereafter, the 
    Department shall
deposit a percentage of the amounts 
    collected pursuant to subsections (a)
and (b)(6), (7), and 
    (8), (c) and (d) of Section 201
of this Act into a fund in 
    the State treasury known as the Income Tax
Refund Fund.  
    Beginning
with State fiscal year 1990 and for each fiscal 
    year thereafter, the
percentage deposited into the Income 
    Tax Refund Fund during a fiscal year
shall be the Annual 
    Percentage. For fiscal year 2011, the Annual Percentage 
    shall be 17.5%. For fiscal year 2012, the Annual 
    Percentage shall be 17.5%. For fiscal year 2013, the 
    Annual Percentage shall be 14%. For fiscal year 2014, the 
    Annual Percentage shall be 13.4%. For fiscal year 2015, 
    the Annual Percentage shall be 14%. For fiscal year 2018, 
    the Annual Percentage shall be 17.5%.  For fiscal year 
    2019, the Annual Percentage shall be 15.5%. For fiscal 
    year 2020, the Annual Percentage shall be 14.25%. For 
    fiscal year 2021, the Annual Percentage shall be 14%. For 
    all other fiscal years, the Annual
Percentage shall be 
    calculated
as a fraction, the numerator of which shall be 
    the amount of refunds
approved for payment by the 
    Department during the preceding fiscal year as
a result of 
    overpayment of tax liability under subsections (a) and 
    (b)(6),
(7), and (8), (c) and (d) of Section 201 of this 
    Act plus the
amount of such refunds remaining approved but 
    unpaid at the end of the
preceding fiscal year, and the 
    denominator of
which shall be the amounts which will be 
    collected pursuant to subsections (a)
and (b)(6), (7), and 
    (8), (c) and (d) of Section 201 of this Act during the

    preceding fiscal year; except that in State fiscal year 
    2002, the Annual
Percentage shall in no event exceed 23%.  
    The Director of Revenue shall
certify the Annual 
    Percentage to the Comptroller on the last business day of

    the fiscal year immediately preceding the fiscal year for 
    which it is to be
effective.
        (3) The Comptroller shall order transferred and the 
    Treasurer shall
transfer from the Tobacco Settlement 
    Recovery Fund to the Income Tax Refund
Fund (i) 
    $35,000,000 in January, 2001, (ii) $35,000,000 in January, 
    2002, and
(iii) $35,000,000 in January, 2003.
    (d) Expenditures from Income Tax Refund Fund.
        (1) Beginning January 1, 1989, money in the Income Tax 
    Refund Fund
shall be expended exclusively for the purpose 
    of paying refunds resulting
from overpayment of tax 
    liability under Section 201 of this Act
and for
making 
    transfers pursuant to this subsection (d).
        (2) The Director shall order payment of refunds 
    resulting from
overpayment of tax liability under Section 
    201 of this Act from the
Income Tax Refund Fund only to the 
    extent that amounts collected pursuant
to Section 201 of 
    this Act and transfers pursuant to this subsection (d)
and 
    item (3) of subsection (c) have been deposited and 
    retained in the
Fund.
        (3) As soon as possible after the end of each fiscal 
    year, the Director
shall
order transferred and the State 
    Treasurer and State Comptroller shall
transfer from the 
    Income Tax Refund Fund to the Personal Property Tax

    Replacement Fund an amount, certified by the Director to 
    the Comptroller,
equal to the excess of the amount 
    collected pursuant to subsections (c) and
(d) of Section 
    201 of this Act deposited into the Income Tax Refund Fund

    during the fiscal year over the amount of refunds 
    resulting from
overpayment of tax liability under 
    subsections (c) and (d) of Section 201
of this Act paid 
    from the Income Tax Refund Fund during the fiscal year.
        (4) As soon as possible after the end of each fiscal 
    year, the Director shall
order transferred and the State 
    Treasurer and State Comptroller shall
transfer from the 
    Personal Property Tax Replacement Fund to the Income Tax

    Refund Fund an amount, certified by the Director to the 
    Comptroller, equal
to the excess of the amount of refunds 
    resulting from overpayment of tax
liability under 
    subsections (c) and (d) of Section 201 of this Act paid

    from the Income Tax Refund Fund during the fiscal year 
    over the amount
collected pursuant to subsections (c) and 
    (d) of Section 201 of this Act
deposited into the Income 
    Tax Refund Fund during the fiscal year.
        (4.5) As soon as possible after the end of fiscal year 
    1999 and of each
fiscal year
thereafter, the Director 
    shall order transferred and the State Treasurer and
State 
    Comptroller shall transfer from the Income Tax Refund Fund 
    to the General
Revenue Fund any surplus remaining in the 
    Income Tax Refund Fund as of the end
of such fiscal year; 
    excluding for fiscal years 2000, 2001, and 2002
amounts 
    attributable to transfers under item (3) of subsection (c) 
    less refunds
resulting from the earned income tax credit.
        (5) This Act shall constitute an irrevocable and 
    continuing
appropriation from the Income Tax Refund Fund 
    for the purpose of paying
refunds upon the order of the 
    Director in accordance with the provisions of
this 
    Section.
    (e) Deposits into the Education Assistance Fund and the 
Income Tax
Surcharge Local Government Distributive Fund. On 
July 1, 1991, and thereafter, of the amounts collected 
pursuant to
subsections (a) and (b) of Section 201 of this Act, 
minus deposits into the
Income Tax Refund Fund, the Department 
shall deposit 7.3% into the
Education Assistance Fund in the 
State Treasury.  Beginning July 1, 1991,
and continuing through 
January 31, 1993, of the amounts collected pursuant to

subsections (a) and (b) of Section 201 of the Illinois Income 
Tax Act, minus
deposits into the Income Tax Refund Fund, the 
Department shall deposit 3.0%
into the Income Tax Surcharge 
Local Government Distributive Fund in the State
Treasury.  
Beginning February 1, 1993 and continuing through June 30, 
1993, of
the amounts collected pursuant to subsections (a) and 
(b) of Section 201 of the
Illinois Income Tax Act, minus 
deposits into the Income Tax Refund Fund, the
Department shall 
deposit 4.4% into the Income Tax Surcharge Local Government

Distributive Fund in the State Treasury.  Beginning July 1, 
1993, and
continuing through June 30, 1994, of the amounts 
collected under subsections
(a) and (b) of Section 201 of this 
Act, minus deposits into the Income Tax
Refund Fund, the 
Department shall deposit 1.475% into the Income Tax Surcharge

Local Government Distributive Fund in the State Treasury.
    (f) Deposits into the Fund for the Advancement of 
Education. Beginning February 1, 2015, the Department shall 
deposit the following portions of the revenue realized from 
the tax imposed upon individuals, trusts, and estates by 
subsections (a) and (b) of Section 201 of this Act, minus 
deposits into the Income Tax Refund Fund, into the Fund for the 
Advancement of Education: 
        (1) beginning February 1, 2015, and prior to February 
    1, 2025, 1/30; and 
        (2) beginning February 1, 2025, 1/26. 
    If the rate of tax imposed by subsection (a) and (b) of 
Section 201 is reduced pursuant to Section 201.5 of this Act, 
the Department shall not make the deposits required by this 
subsection (f) on or after the effective date of the 
reduction. 
    (g) Deposits into the Commitment to Human Services Fund. 
Beginning February 1, 2015, the Department shall deposit the 
following portions of the revenue realized from the tax 
imposed upon individuals, trusts, and estates by subsections 
(a) and (b) of Section 201 of this Act, minus deposits into the 
Income Tax Refund Fund, into the Commitment to Human Services 
Fund: 
        (1) beginning February 1, 2015, and prior to February 
    1, 2025, 1/30; and 
        (2) beginning February 1, 2025, 1/26. 
    If the rate of tax imposed by subsection (a) and (b) of 
Section 201 is reduced pursuant to Section 201.5 of this Act, 
the Department shall not make the deposits required by this 
subsection (g) on or after the effective date of the 
reduction. 
    (h) Deposits into the Tax Compliance and Administration 
Fund.  Beginning on the first day of the first calendar month to 
occur on or after August 26, 2014 (the effective date of Public 
Act 98-1098), each month the Department shall pay into the Tax 
Compliance and Administration Fund, to be used, subject to 
appropriation, to fund additional auditors and compliance 
personnel at the Department, an amount equal to 1/12 of 5% of 
the cash receipts collected during the preceding fiscal year 
by the Audit Bureau of the Department from the tax imposed by 
subsections (a), (b), (c), and (d) of Section 201 of this Act, 
net of deposits into the Income Tax Refund Fund made from those 
cash receipts. 
(Source: P.A. 100-22, eff. 7-6-17; 100-23, eff. 7-6-17; 
100-587, eff. 6-4-18; 100-621, eff. 7-20-18; 100-863, eff. 
8-14-18; 100-1171, eff. 1-4-19; 101-8, see Section 99 for 
effective date; 101-10, eff. 6-5-19; 101-81, eff. 7-12-19; 
101-636, eff. 6-10-20.)
 

    Section 99. Effective date. This Act takes effect upon 
becoming law.