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Public Act 097-0636 | ||||
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AN ACT concerning revenue.
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Be it enacted by the People of the State of Illinois, | ||||
represented in the General Assembly:
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Article 1. Findings | ||||
Section 1-1. Legislative findings. | ||||
(1) The House of Representatives adopted House Resolution | ||||
110 on March 8, 2011, setting forth the estimates of general | ||||
funds the House expects to be available during State fiscal | ||||
year 2012. | ||||
(2) In determining the estimates of general funds expected | ||||
to be available during State fiscal year 2012, the House | ||||
Revenue & Finance Committee assumed that the State would not | ||||
collect approximately $600,000,000 of income tax revenues due | ||||
to the allowance of special bonus depreciation rules approved | ||||
by the federal government. | ||||
(3) The House of Representatives adopted House Resolution | ||||
158 on March 30, 2011, which provides that if the actual amount | ||||
of funds from State sources that become available during State | ||||
fiscal year 2012 exceeds the House's estimates set forth in | ||||
House Resolution 110, then that excess shall first be used to | ||||
reduce the backlog of unpaid State obligations to the extent | ||||
authorized by law. | ||||
(4) These concepts are prudent and should be continued for |
State fiscal year 2013 and beyond. | ||
(5) As the House Revenue & Finance Committee develops the | ||
estimates of general funds expected to be available during | ||
State fiscal year 2013, an estimated $250,000,000 of income tax | ||
revenues in excess of the State fiscal year 2012 budgeted | ||
amount will become available due to the phasing out of the | ||
allowance of special bonus depreciation rules approved by the | ||
federal government. | ||
(6) Therefore, the General Assembly finds that a tax | ||
incentive package that does not exceed $250,000,000 in State | ||
fiscal year 2013 can be approved without any negative impact to | ||
the State budget in State fiscal years 2012 and 2013 while | ||
providing tax relief to a large number of Illinois individual | ||
and business taxpayers. | ||
Article 5. Illinois Independent Tax Tribunal Act | ||
Section 5-1. Short title. This Article may be cited as the | ||
Illinois Independent Tax Tribunal Act. | ||
Section 5-5. Independent Tax Tribunal Board; Department of | ||
Revenue. | ||
(a) On and after July 1, 2013, the Department of Revenue, | ||
or any successor agency, shall no longer hear and act upon any | ||
protests of notices of tax liability or deficiencies for all | ||
taxes administered by the Department of Revenue. |
(b) Beginning July 1, 2013, an Independent Tax Tribunal | ||
Board shall assume, exercise, and administer all rights, | ||
powers, duties, and responsibilities pertaining to any | ||
protests of notices of tax liability or deficiencies for all | ||
taxes administered by the Department of Revenue. The | ||
Independent Tax Tribunal Board shall be created by law and no | ||
State agency shall assume the functions of the Board. | ||
Article 10. Live Theater Production Tax Credit Act | ||
Section 10-1. Short title. This Article may be cited as the | ||
Live Theater Production Tax Credit Act. References in this | ||
Article to "this Act" mean this Article. | ||
Section 10-5. Purpose. The Illinois economy depends | ||
heavily on the commercial for-profit live theater industry and | ||
the pre-Broadway and long-run shows that are presented in | ||
Illinois. As a result of intense competition from other | ||
prominent theater cities in the United States and abroad in | ||
attracting pre-Broadway and long-run shows, Illinois must move | ||
aggressively with new business development investment tools so | ||
that Illinois is more competitive in site location decision | ||
making for show producers. In an increasingly global economy, | ||
Illinois' long-term development will benefit from the | ||
rational, strategic use of State resources in support of | ||
pre-Broadway live theater and long-run show development and |
growth. It is the purpose of this Act to preserve and expand | ||
the existing work force used in live theater and enhance the | ||
marketing of the presentation of live theater in Illinois. It | ||
shall be the policy of this State to promote and encourage the | ||
training and hiring of Illinois residents who represent the | ||
diversity of the Illinois population through the creation and | ||
implementation of training, education, and recruitment | ||
programs organized in cooperation with Illinois colleges and | ||
universities, labor organizations, and the commercial | ||
for-profit live theater industry. | ||
Section 10-10. Definitions. As used in this Act: | ||
"Accredited theater production" means a for-profit live | ||
stage presentation in a qualified production facility, as | ||
defined in this Section, that is either (i) a pre-Broadway | ||
production or (ii) a long-run production for which the | ||
aggregate Illinois labor and marketing expenditures exceed | ||
$100,000. | ||
"Pre-Broadway production" means a live stage production | ||
that, in its original or adaptive version, is performed in a | ||
qualified production facility having a presentation scheduled | ||
for Broadway's Theater District in New York City within 12 | ||
months after its Illinois presentation. | ||
"Long-run production" means a live stage production that is | ||
performed in a qualified production facility for longer than 8 | ||
weeks, with at least 6 performances per week, and includes a |
production that spans the end of one tax year and the | ||
commencement of a new tax year that, in combination, meets the | ||
criteria set forth in this definition making it a long-run | ||
production eligible for a theater tax credit award in each tax | ||
year or portion thereof. | ||
"Accredited theater production certificate" means a | ||
certificate issued by the Department certifying that the | ||
production is an accredited theater production that meets the | ||
guidelines of this Act. | ||
"Applicant" means a taxpayer that is a theater producer, | ||
owner, licensee, operator, or presenter that is presenting or | ||
has presented a live stage presentation located within the | ||
State of Illinois who: | ||
(1) owns or licenses the theatrical rights of the stage | ||
presentation for the Illinois production period; or | ||
(2) has contracted or will contract directly with the | ||
owner or licensee of the theatrical rights or a person | ||
acting on behalf of the owner or licensee to provide live | ||
performances of the production. | ||
An applicant that directly or indirectly owns, controls, or | ||
operates multiple qualified production facilities shall be | ||
presumed to be and considered for the purposes of this Act to | ||
be a single applicant; provided, however, that as to each of | ||
the applicant's qualified production facilities, the applicant | ||
shall be eligible to separately and contemporaneously (i) apply | ||
for and obtain accredited theater production certificates, |
(ii) stage accredited theater productions, and (iii) apply for | ||
and receive a tax credit award certificate for each of the | ||
applicant's accredited theater productions performed at each | ||
of the applicant's qualified production facilities. | ||
"Department" means the Department of Commerce and Economic | ||
Opportunity. | ||
"Director" means the Director of the Department. | ||
"Illinois labor expenditure" means gross salary or wages | ||
including, but not limited to, taxes, benefits, and any other | ||
consideration incurred or paid to non-talent employees of the | ||
applicant for services rendered to and on behalf of the | ||
accredited theater production. To qualify as an Illinois labor | ||
expenditure, the expenditure must be: | ||
(1) incurred or paid by the applicant on or after the | ||
effective date of the Act for services related to any | ||
portion of an accredited theater production from its | ||
pre-production stages, including, but not limited to, the | ||
writing of the script, casting, hiring of service | ||
providers, purchases from vendors, marketing, advertising, | ||
public relations, load in, rehearsals, performances, other | ||
accredited theater production related activities, and load | ||
out; | ||
(2) directly attributable to the accredited theater | ||
production; | ||
(3) limited to the first $100,000 of wages incurred or | ||
paid to each employee of an accredited theater production |
in each tax year; | ||
(4) included in the federal income tax basis of the | ||
property; | ||
(5) paid in the tax year for which the applicant is | ||
claiming the tax credit award, or no later than 60 days | ||
after the end of the tax year; | ||
(6) paid to persons residing in Illinois at the time | ||
payments were made; and | ||
(7) reasonable in the circumstances. | ||
"Illinois production spending" means any and all expenses | ||
directly or indirectly incurred relating to an accredited | ||
theater production presented in any qualified production | ||
facility of the applicant, including, but not limited to, | ||
expenditures for: | ||
(1) national marketing, public relations, and the | ||
creation and placement of print, electronic, television, | ||
billboard, and other forms of advertising; and | ||
(2) the construction and fabrication of scenic | ||
materials and elements; provided, however, that the | ||
maximum amount of expenditures attributable to the | ||
construction and fabrication of scenic materials and | ||
elements eligible for a tax credit award shall not exceed | ||
$500,000 per applicant per production in any single tax | ||
year. | ||
"Qualified production facility" means a facility located | ||
in the State in which live theatrical productions are, or are |
intended to be, exclusively presented that contains at least | ||
one stage, a seating capacity of 1,200 or more seats, and | ||
dressing rooms, storage areas, and other ancillary amenities | ||
necessary for the accredited theater production. | ||
"Tax credit award" means the issuance to a taxpayer by the | ||
Department of a tax credit award in conformance with Sections | ||
10-40 and 10-45 of this Act. | ||
"Tax year" means a calendar year for the period January 1 | ||
to and including December 31. | ||
Section 10-15. Powers of the Department. The Department, in | ||
addition to those powers granted under the Civil Administrative | ||
Code of Illinois, is granted and has all the powers necessary | ||
or convenient to carry out and effectuate the purposes and | ||
provisions of this Act, including, but not limited to, the | ||
power and authority to: | ||
(1) adopt rules deemed necessary and appropriate for | ||
the administration of the Tax Credit Award program; | ||
establish forms for applications, notifications, | ||
contracts, or any other agreements; and accept | ||
applications at any time during the year; | ||
(2) assist applicants pursuant to the provisions of | ||
this Act to promote, foster, and support live theater | ||
development and production and its related job creation or | ||
retention within the State; | ||
(3) gather information and conduct inquiries, in the |
manner and by the methods set forth in this Act, required | ||
for the Department to comply with Section 10-40 and, | ||
without limitation, obtain information with respect to | ||
applicants for the purpose of making any designations or | ||
certifications necessary or desirable to assist the | ||
Department with any recommendation or guidance in the | ||
furtherance of the purposes of this Act and relating to | ||
applicants' participation in training, education, and | ||
recruitment programs that are organized in cooperation | ||
with Illinois colleges and universities or labor | ||
organizations designed to promote and encourage the | ||
training and hiring of Illinois residents who represent the | ||
diversity of the Illinois population; | ||
(4) provide for sufficient personnel to permit | ||
administrative, staffing, operating, and related support | ||
required to adequately discharge its duties and | ||
responsibilities described in this Act from funds as may be | ||
appropriated by the General Assembly for the | ||
administration of this Act; and | ||
(5) require that the applicant at all times keep proper | ||
books and records of accounts relating to the tax credit | ||
award, in accordance with generally accepted accounting | ||
principles consistently applied, and make, upon reasonable | ||
written request by the Department, those books and records | ||
available for reasonable Department inspection and audit | ||
during the applicant's normal business hours. Any |
documents or data made available to or received from the | ||
applicant by any agent, employee, officer, or service | ||
provider to the Department shall be deemed confidential and | ||
shall not constitute public records to the extent that the | ||
documents or data consist of commercial or financial | ||
information regarding the operation by the applicant of any | ||
theater or any accredited theater production, or any | ||
recipient of any tax credit award under this Act. | ||
Section 10-20. Tax credit award. Subject to the conditions | ||
set forth in this Act, an applicant is entitled to a tax credit | ||
award as approved by the Department for qualifying Illinois | ||
labor expenditures and Illinois production spending for each | ||
tax year in which the applicant is awarded an accredited | ||
theater production certificate issued by the Department. The | ||
amount of tax credits awarded pursuant to this Act shall not | ||
exceed $2,000,000 in any fiscal year. Credits shall be awarded | ||
on a first-come, first-served basis. Notwithstanding the | ||
foregoing, if the amount of credits applied for in any fiscal | ||
year exceeds the amount authorized to be awarded under this | ||
Section, the excess credit amount shall be awarded in the next | ||
fiscal year in which credits remain available for award and | ||
shall be treated as having been applied for on the first day of | ||
that fiscal year.
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Section 10-25. Application for certification of accredited |
theater production. Any applicant proposing an accredited | ||
theater production located or planned to be located in Illinois | ||
may request an accredited theater production certificate by | ||
application to the Department. | ||
Section 10-30. Review of application for accredited | ||
theater production certificate. | ||
(a) The Department shall issue an accredited theater | ||
production certificate to an applicant if it finds that by a | ||
preponderance the following conditions exist: | ||
(1) the applicant intends to make the expenditure in | ||
the State required for certification of the accredited | ||
theater production; | ||
(2) the applicant's accredited theater production is | ||
economically sound and will benefit the people of the State | ||
of Illinois by increasing opportunities for employment and | ||
will strengthen the economy of Illinois; | ||
(3) the following requirements related to the | ||
implementation of a diversity plan have been met: (i) the | ||
applicant has filed with the Department a diversity plan | ||
outlining specific goals for hiring Illinois labor | ||
expenditure eligible minority persons and females, as | ||
defined in the Business Enterprise for Minorities, | ||
Females, and Persons with Disabilities Act, and for using | ||
vendors receiving certification under the Business | ||
Enterprise for Minorities, Females, and Persons with |
Disabilities Act; (ii) the Department has approved the plan | ||
as meeting the requirements established by the Department | ||
and verified that the applicant has met or made good faith | ||
efforts in achieving those goals; and (iii) the Department | ||
has adopted any rules that are necessary to ensure | ||
compliance with the provisions set forth in this paragraph | ||
and necessary to require that the applicant's plan reflects | ||
the diversity of the population of this State; | ||
(4) the applicant's accredited theater production | ||
application indicates whether the applicant intends to | ||
participate in training, education, and recruitment | ||
programs that are organized in cooperation with Illinois | ||
colleges and universities, labor organizations, and the | ||
holders of accredited theater production certificates and | ||
are designed to promote and encourage the training and | ||
hiring of Illinois residents who represent the diversity of | ||
Illinois; | ||
(5) if not for the tax credit award, the applicant's | ||
accredited theater production would not occur in Illinois, | ||
which may be demonstrated by any means, including, but not | ||
limited to, evidence that: (i) the applicant, presenter, | ||
owner, or licensee of the production rights has other state | ||
or international location options at which to present the | ||
production and could reasonably and efficiently locate | ||
outside of the State, (ii) at least one other state or | ||
nation could be considered for the production, (iii) the |
receipt of the tax award credit is a major factor in the | ||
decision of the applicant, presenter, production owner or | ||
licensee as to where the production will be presented and | ||
that without the tax credit award the applicant likely | ||
would not create or retain jobs in Illinois, or (iv) | ||
receipt of the tax credit award is essential to the | ||
applicant's decision to create or retain new jobs in the | ||
State; and | ||
(6) the tax credit award will result in an overall | ||
positive impact to the State, as determined by the | ||
Department using the best available data. | ||
(b) If any of the provisions in this Section conflict with | ||
any existing collective bargaining agreements, the terms and | ||
conditions of those collective bargaining agreements shall | ||
control.
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(c) The Department shall act expeditiously regarding | ||
approval of applications for accredited theater production | ||
certificates so as to accommodate the pre-production work, | ||
booking, commencement of ticket sales, determination of | ||
performance dates, load in, and other matters relating to the | ||
live theater productions for which approval is sought. | ||
Section 10-35. Training programs for skills in critical | ||
demand. To accomplish the purposes of this Act, the Department | ||
may use the training programs provided under Section 605-800 of | ||
the Department of Commerce and Economic Opportunity Law of the |
Civil Administrative Code of Illinois. | ||
Section 10-40. Issuance of Tax Credit Award Certificate.
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(a) In order to qualify for a tax credit award under this | ||
Act, an applicant must file an application for each accredited | ||
theater production at each of the applicant's qualified | ||
production facilities, on forms prescribed by the Department, | ||
providing information necessary to calculate the tax credit | ||
award and any additional information as reasonably required by | ||
the Department. | ||
(b) Upon satisfactory review of the application, the | ||
Department shall issue a tax credit award certificate stating | ||
the amount of the tax credit award to which the applicant is | ||
entitled for that tax year and shall contemporaneously notify | ||
the applicant and Illinois Department of Revenue in accordance | ||
with Section 222 of the Illinois Income Tax Act. | ||
Section 10-45. Amount and payment of the tax credit award. | ||
The tax credit award shall be calculated each tax year based | ||
upon the filing by the applicant on forms prescribed by the | ||
Department containing information regarding qualifying and | ||
quantified Illinois labor expenditures, as defined in Section | ||
10-10, net of the limitation in that Section, and Illinois | ||
production spending, as defined in Section 10-10, net of the | ||
limitation in that Section. From the amount calculated, the | ||
applicant shall be entitled to receive a tax credit award of up |
to: | ||
(1) 20% of the Illinois labor expenditures for each tax | ||
year; plus | ||
(2) 20% of the Illinois production spending for each | ||
tax year; plus | ||
(3) 15% of the Illinois labor expenditures generated by | ||
the employment of Illinois residents in geographic areas of | ||
high poverty or high unemployment in each tax year, as | ||
determined by the Department. | ||
Following the Department's determination of the tax credit | ||
award, the Department shall issue the tax credit award to the | ||
applicant. | ||
Section 10-50. Live theater tax credit award program | ||
evaluation and reports. | ||
(a) The Department's live theater tax credit award | ||
evaluation must include: | ||
(i) an assessment of the effectiveness of the program | ||
in creating and retaining new jobs in Illinois; | ||
(ii) an assessment of the revenue impact of the | ||
program; | ||
(iii) in the discretion of the Department, a review of | ||
the practices and experiences of other states or nations | ||
with similar programs; and | ||
(iv) an assessment of the overall success of the | ||
program. The Department may make a recommendation to |
extend, modify, or not extend the program based on the | ||
evaluation. | ||
(b) At the end of each fiscal quarter, the Department shall | ||
submit to the General Assembly a report that includes, without | ||
limitation: | ||
(i) an assessment of the economic impact of the | ||
program, including the number of jobs created and retained, | ||
and whether the job positions are entry level, management, | ||
vendor, or production related; | ||
(ii) the amount of accredited theater production | ||
spending brought to Illinois, including the amount of | ||
spending and type of Illinois vendors hired in connection | ||
with an accredited theater production; and | ||
(iii) a determination of whether those receiving | ||
qualifying Illinois labor expenditure salaries or wages | ||
reflect the geographical, racial and ethnic, gender, and | ||
income level diversity of the State of Illinois. | ||
(c) At the end of each fiscal year, the Department shall | ||
submit to the General Assembly a report that includes, without | ||
limitation: | ||
(i) the identification of each vendor that provided | ||
goods or services that were included in an accredited | ||
theater production's Illinois production spending; | ||
(ii) a statement of the amount paid to each identified | ||
vendor by the accredited theater production and whether the | ||
vendor is a minority or female owned business as defined in |
Section 2 of the Business Enterprise for Minorities, | ||
Females, and Persons with Disabilities Act; and | ||
(iii) a description of the steps taken by the | ||
Department to encourage accredited theater productions to | ||
use vendors who are minority or female owned businesses. | ||
Section 10-55. Program terms and conditions. Any | ||
documentary materials or data made available or received from | ||
an applicant by any agent or employee of the Department are | ||
confidential and are not public records to the extent that the | ||
materials or data consist of commercial or financial | ||
information regarding the operation of or the production of the | ||
applicant or recipient of any tax credit award under this Act. | ||
Section 10-80. The Illinois Income Tax Act is amended by | ||
adding Section 222 as follows: | ||
(35 ILCS 5/222 new) | ||
Sec. 222. Live theater production credit. | ||
(a) For tax years beginning on or after January 1, 2012, a | ||
taxpayer who has received a tax credit award under the Live | ||
Theater Production Tax Credit Act is entitled to a credit | ||
against the taxes imposed under subsections (a) and (b) of | ||
Section 201 of this Act in an amount determined under that Act | ||
by the Department of Commerce and Economic Opportunity. | ||
(b) If the taxpayer is a partnership, limited liability |
partnership, limited liability company, or Subchapter S | ||
corporation, the tax credit award is allowed to the partners, | ||
unit holders, 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. | ||
(c) A sale, assignment, or transfer of the tax credit award | ||
may be made by the taxpayer earning the credit within one year | ||
after the credit is awarded in accordance with rules adopted by | ||
the Department of Commerce and Economic Opportunity. | ||
(d) The Department of Revenue, in cooperation with the | ||
Department of Commerce and Economic Opportunity, shall adopt | ||
rules to enforce and administer the provisions of this Section. | ||
(e) The tax credit award may not be carried back. If the | ||
amount of the credit exceeds the tax liability for the year, | ||
the excess may be carried forward and applied to the tax | ||
liability of the 5 tax years following the excess credit year. | ||
The tax credit award shall be applied to the earliest year for | ||
which there is a tax liability. If there are credits from more | ||
than one tax year that are available to offset liability, the | ||
earlier credit shall be applied first. In no event may a credit | ||
under this Section reduce the taxpayer's liability to less than | ||
zero. | ||
Article 15. Amendatory Provisions |
Section 15-5. The Economic Development Area Tax Increment | ||
Allocation Act is amended by changing Sections 3, 4, 5, 8, 9, | ||
and 11 and by adding Sections 4.5 and 4.7 as follows:
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(20 ILCS 620/3) (from Ch. 67 1/2, par. 1003)
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Sec. 3. Definitions. In this Act, words or terms shall have | ||
the
following meanings unless the context or usage clearly | ||
indicates that another
meaning is intended.
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(a) "Department" means the Department of Commerce and | ||
Economic Opportunity.
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(b) "Economic development plan" means the written plan of a | ||
municipality
which sets forth an economic development program | ||
for an economic
development project area. Each economic | ||
development plan shall include but
not be limited to (1) | ||
estimated economic development project costs, (2)
the sources | ||
of funds to pay such costs, (3) the nature and term of any
| ||
obligations to be issued by the municipality to pay such costs, | ||
(4) the
most recent equalized assessed valuation of the | ||
economic development project
area,
(5) an estimate of the | ||
equalized assessed valuation of the economic
development | ||
project area after completion of an economic development | ||
project,
(6) the estimated date of completion of any economic | ||
development project
proposed to be undertaken, (7) a general | ||
description of any proposed
developer, user, or tenant of any | ||
property to be located or improved
within the economic | ||
development project area, (8) a description of the
type, |
structure and general character of the facilities to be | ||
developed or
improved in the economic development project area, | ||
(9) a description of the
general land uses to apply in the
| ||
economic development project area, (10) a description of the | ||
type, class and
number of employees to be employed in the | ||
operation of the facilities to be
developed or improved in the | ||
economic development project area, and (11) a
commitment by the | ||
municipality to fair
employment practices and an affirmative | ||
action plan with respect to any
economic development program to | ||
be undertaken by the municipality.
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(c) "Economic development project" means any development | ||
project in
furtherance of the objectives of this Act.
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(d) "Economic development project area" means any improved | ||
or vacant
area which (1) is located within or partially within | ||
or partially without
the territorial limits of a municipality, | ||
provided that no area without the
territorial limits of a | ||
municipality shall be included in an economic
development | ||
project area without the express consent of the Department,
| ||
acting as agent for the State, (2) is contiguous, (3) is not | ||
less in the
aggregate than three hundred twenty acres, (4) is | ||
suitable for siting by any
commercial, manufacturing, | ||
industrial, research or transportation
enterprise of | ||
facilities to include but not be limited to commercial
| ||
businesses, offices, factories, mills, processing plants, | ||
assembly plants,
packing plants, fabricating plants, | ||
industrial or commercial distribution
centers, warehouses, |
repair overhaul or service facilities, freight
terminals, | ||
research facilities, test facilities or transportation
| ||
facilities, whether or not such area has been used at any time | ||
for such
facilities and whether or not the area has been used | ||
or is suitable for
other uses, including commercial | ||
agricultural purposes, and (5) which has
been approved and | ||
certified by the Department pursuant to this Act.
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(e) "Economic development project costs" mean and include | ||
the sum total
of all reasonable or necessary costs incurred by | ||
a municipality incidental
to an economic development project, | ||
including, without limitation, the following:
| ||
(1) Costs of studies, surveys, development of plans and | ||
specifications,
implementation and administration of an | ||
economic development plan, personnel
and professional service | ||
costs for architectural, engineering, legal,
marketing, | ||
financial, planning, police, fire, public works or other
| ||
services, provided that no charges for professional services | ||
may be based
on a percentage of incremental tax revenues;
| ||
(2) Property assembly costs within an economic development | ||
project
area, including but not limited to acquisition of land | ||
and other real or
personal property or rights or interests | ||
therein, and specifically
including payments to developers or | ||
other nongovernmental persons as
reimbursement for property | ||
assembly costs incurred by such developer or
other | ||
nongovernmental person;
| ||
(3) Site preparation costs, including but not limited to |
clearance of
any area within an economic development project | ||
area by demolition or
removal of any existing buildings, | ||
structures, fixtures, utilities and
improvements and clearing | ||
and grading; and including installation, repair,
construction, | ||
reconstruction, or relocation of public streets, public
| ||
utilities, and other public site improvements within or without | ||
an economic
development project area which are essential to the | ||
preparation of the
economic development project area for use in | ||
accordance with an economic
development plan; and specifically | ||
including payments to developers or
other nongovernmental | ||
persons as reimbursement for site preparation costs incurred by | ||
such
developer or nongovernmental person;
| ||
(4) Costs of renovation, rehabilitation, reconstruction, | ||
relocation,
repair or remodeling of any existing buildings, | ||
improvements, and fixtures
within an economic development | ||
project area, and specifically including
payments to | ||
developers or other nongovernmental persons as reimbursement
| ||
for such costs incurred by such developer or nongovernmental | ||
person;
| ||
(5) Costs of construction , acquisition, and operation | ||
within an economic development project area of
public | ||
improvements, including but not limited to, publicly owned | ||
buildings, structures,
works, utilities or fixtures; provided | ||
that no allocation made to the municipality pursuant to | ||
subparagraph (A) of paragraph (2) of subsection (g) of Section | ||
4 of this Act or subparagraph (A) of paragraph (4) of |
subsection (g) of Section 4 of this Act shall be used to | ||
operate a convention center or similar entertainment complex or | ||
venue;
| ||
(6) Financing costs, including but not limited to all | ||
necessary and
incidental expenses related to the issuance of | ||
obligations, payment of any
interest on any obligations issued | ||
hereunder which accrues during the
estimated period of | ||
construction of any economic development project for
which such | ||
obligations are issued and for not exceeding 36 months
| ||
thereafter, and any reasonable reserves related to the issuance | ||
of such obligations;
| ||
(7) All or a portion of a taxing district's capital costs | ||
resulting
from an economic development project necessarily | ||
incurred or estimated to
be incurred by a taxing district in | ||
the furtherance of the objectives of an
economic development | ||
project, to the extent that the municipality by
written | ||
agreement accepts and approves such costs;
| ||
(8) Relocation costs to the extent that a municipality | ||
determines
that relocation costs shall be paid or is required | ||
to make payment of
relocation costs by federal or State law;
| ||
(9) The estimated tax revenues from real property in an | ||
economic
development project area acquired by a municipality | ||
which,
according to the economic development plan, is to be | ||
used for a private
use and which any taxing district would have | ||
received had the municipality
not adopted tax increment | ||
allocation financing for an economic development
project area |
and which would result from such taxing district's levies made
| ||
after the time of the adoption by the municipality of tax | ||
increment
allocation financing to the time the current | ||
equalized assessed value of
real property in the economic | ||
development project area exceeds the total
initial equalized | ||
value of real property in said area;
| ||
(10) Costs of job training, advanced vocational or career | ||
education,
including but not limited to courses in | ||
occupational, semi-technical or
technical fields leading | ||
directly to employment, incurred by one or more
taxing | ||
districts, provided that such costs are related to the | ||
establishment
and maintenance of additional job training, | ||
advanced vocational education
or career education programs for | ||
persons employed or to be employed by
employers located in an | ||
economic development project area, and further
provided that | ||
when such costs are incurred by a taxing district or taxing
| ||
districts other than the municipality they shall be set forth | ||
in a written
agreement by or among the municipality and the | ||
taxing district or taxing
districts, which agreement describes | ||
the program to be undertaken,
including but not limited to the | ||
number of employees to be trained, a
description of the | ||
training and services to be provided, the number and
type of | ||
positions available or to be available, itemized costs of the
| ||
program and sources of funds to pay the same, and the term of | ||
the
agreement. Such costs include, specifically, the payment by | ||
community
college districts of costs pursuant to Sections 3-37, |
3-38, 3-40 and 3-40.1
of the Public Community College Act and | ||
by school districts of costs
pursuant to Sections 10-22.20a and | ||
10-23.3a of The School Code;
| ||
(11) Private financing costs incurred by developers or | ||
other
nongovernmental persons in connection with an economic | ||
development project,
and specifically including payments to | ||
developers or other nongovernmental
persons as reimbursement | ||
for such costs incurred by such developer or other
| ||
nongovernmental person, provided that:
| ||
(A) private financing costs shall be
paid or reimbursed by | ||
a municipality
only pursuant to the prior official action of | ||
the municipality evidencing
an intent to pay or reimburse such | ||
private financing costs;
| ||
(B) except as provided in subparagraph (D), the aggregate | ||
amount of
such costs paid or reimbursed by a municipality in | ||
any one year shall not exceed 30%
of such costs paid or | ||
incurred by the developer or other nongovernmental
person in | ||
that year;
| ||
(C) private financing costs shall be paid or reimbursed by | ||
a
municipality solely from the special tax allocation
fund | ||
established pursuant to this Act and shall not be paid or | ||
reimbursed from the
proceeds of any obligations issued by a | ||
municipality;
| ||
(D) if there are not sufficient funds available in the | ||
special tax
allocation fund in any year to make such payment or | ||
reimbursement in full, any amount of
such interest cost |
remaining to be paid or reimbursed by a municipality
shall | ||
accrue and be
payable when funds are available in
the special | ||
tax allocation fund to make such payment; and
| ||
(E) in connection with its approval and certification of an | ||
economic
development project pursuant to Section 5 of this Act, | ||
the Department shall
review any agreement authorizing the | ||
payment or reimbursement by a municipality of private
financing | ||
costs in its consideration of the impact on the revenues of the
| ||
municipality and the affected taxing districts of the use of | ||
tax increment
allocation financing.
| ||
(f) "Municipality" means a city, village or incorporated | ||
town.
| ||
(g) "Obligations" means any instrument evidencing the | ||
obligation of a
municipality to pay money, including without | ||
limitation, bonds, notes,
installment or financing contracts, | ||
certificates, tax anticipation warrants
or notes, vouchers, | ||
and any other evidence of indebtedness.
| ||
(h) "Taxing districts" means counties, townships, | ||
municipalities, and
school, road, park, sanitary, mosquito | ||
abatement, forest preserve, public
health, fire protection, | ||
river conservancy, tuberculosis sanitarium and any
other | ||
municipal corporations or districts with the power to levy | ||
taxes upon property located within the economic development | ||
project area .
| ||
(Source: P.A. 94-793, eff. 5-19-06.)
|
(20 ILCS 620/4) (from Ch. 67 1/2, par. 1004)
| ||
Sec. 4.
Establishment of economic development project | ||
areas;
ordinance; notice; hearing; changes in economic | ||
development plan. Economic
development project areas shall be | ||
established as follows:
| ||
(a) The corporate authorities of a municipality shall by | ||
ordinance
propose the establishment of an economic development | ||
project area
and fix a
time and place for a public hearing, and | ||
shall submit a certified copy of
the ordinance as adopted to | ||
the Department.
| ||
(b) (1) Notice of the public hearing shall be given by | ||
publication and
mailing. Notice by publication shall be given | ||
by publication at least
twice, the first publication to be not | ||
more than 30 nor less than 10 days
prior to the hearing in a | ||
newspaper of general circulation within the taxing
districts | ||
having property in the proposed economic development project
| ||
area. Notice by mailing shall be given by depositing such | ||
notice together
with a copy of the
proposed economic | ||
development plan in the United States mails by
certified mail | ||
addressed to the person or persons in whose name the general
| ||
taxes for the last preceding year were paid on each lot, block, | ||
tract, or
parcel of land lying within the economic development | ||
project area. The
notice shall be mailed not less than 10 days | ||
prior to the date set for the
public hearing. In the event | ||
taxes for the last preceding year were not
paid, the notice | ||
shall also be sent to the persons last listed on the tax
rolls |
within the preceding 3 years as the owners of such property.
| ||
(2) The notices issued pursuant to this Section shall | ||
include the following:
| ||
(A) The time and place of public hearing;
| ||
(B) The boundaries of the proposed economic development | ||
project area by
legal description and by street location where | ||
possible;
| ||
(C) A notification that all interested persons will be | ||
given an
opportunity to be heard at the public hearing;
| ||
(D) An invitation for any person to submit alternative | ||
proposals or bids
for any proposed conveyance, lease, mortgage | ||
or other disposition of land
within the proposed economic | ||
development project area;
| ||
(E) A description of the economic development plan or | ||
economic
development project if a
plan or project
is a subject | ||
matter of the hearing; and
| ||
(F) Such other matters as the municipality may deem | ||
appropriate.
| ||
(3) Not less than 30 days prior to the date set for | ||
hearing, the
municipality shall give notice by mail as provided | ||
in this subsection (b)
to all taxing districts, of which | ||
taxable property is included in the
economic development | ||
project area, and to the Department. In addition to
the other | ||
requirements under this subsection (b), the notice shall | ||
include
an invitation to the Department and each taxing | ||
district to submit comments
to the municipality concerning the |
subject matter of the hearing prior to
the date of hearing.
| ||
(c) At the public hearing any interested person, the | ||
Department or any
affected taxing district may file written | ||
objections with the municipal clerk
and may be heard orally | ||
with respect to any issues embodied in
the notice. The | ||
municipality shall hear and determine all alternate
proposals | ||
or bids for any proposed conveyance, lease, mortgage or other
| ||
disposition of land and all protests and
objections at the | ||
hearing, and the hearing may be adjourned to another date
| ||
without further notice other than a motion to be entered upon | ||
the minutes
fixing the time and place of the adjourned hearing.
| ||
Public hearings with regard to an economic development plan, | ||
economic
development project area, or economic development | ||
project may be held simultaneously.
| ||
(d) At the public hearing or at any time prior to the | ||
adoption by the
municipality of an ordinance approving an | ||
economic development plan, the
municipality may make changes in | ||
the economic development plan.
Changes which (1) alter the
| ||
exterior boundaries of the proposed economic development | ||
project area,
(2) substantially affect the general land uses | ||
established in the proposed
economic development plan, (3) | ||
substantially change the nature of the
proposed economic | ||
development project, (4) change the general description of
any | ||
proposed developer, user or tenant of any property to be | ||
located or
improved within the economic development project | ||
area, or (5) change the
description of the type, class and |
number of employees to be employed in
the operation of the | ||
facilities to be developed or improved within the
economic | ||
development project area shall be made only after notice and
| ||
hearing pursuant to the procedures set forth in this Section.
| ||
Changes which
do not (1) alter the exterior boundaries of a | ||
proposed economic development project area,
(2) substantially | ||
affect the general land uses established in the proposed
| ||
economic development plan, (3) substantially change the nature | ||
of the proposed economic
development project, (4) change the | ||
general description of any proposed
developer, user or tenant | ||
of any property to be located or improved within
the economic | ||
development project area, or (5) change the description of the
| ||
type, class and number of employees to be employed in the | ||
operation of the
facilities to be
developed or improved within | ||
the economic development project area may be
made without | ||
further hearing, provided that
the municipality shall give | ||
notice of its changes by mail to the Department
and to each | ||
affected taxing district and by publication in a newspaper or
| ||
newspapers of general circulation within the affected taxing | ||
districts.
Such notice by mail and by publication shall each | ||
occur not later than 10
days following the adoption by | ||
ordinance of such changes.
| ||
(e) At any time within 30 days of the final adjournment of | ||
the
public hearing, a municipality may, by ordinance, approve | ||
the economic
development plan, establish the economic | ||
development project area, and
authorize tax increment
|
allocation financing for such economic development project | ||
area. Any
ordinance adopted which approves an economic | ||
development plan shall
contain findings that the developer or | ||
any of its successor entities and its subsidiaries economic | ||
development project
shall create or retain
not less than 4,250 | ||
2,000 full-time equivalent jobs, that private investment in an
| ||
amount not less than $100,000,000 shall occur in the
economic | ||
development project area, that the economic development | ||
project
will encourage the increase of commerce and industry | ||
within the State,
thereby reducing the evils attendant upon | ||
unemployment and increasing
opportunities for personal income, | ||
and that the economic
development project will increase or | ||
maintain the property, sales and
income tax bases of the | ||
municipality and of the State. Any ordinance
adopted which | ||
establishes an economic development project area shall
contain | ||
the boundaries of such area by legal description and, where
| ||
possible, by street location. Any ordinance adopted which | ||
authorizes tax
increment allocation financing shall provide | ||
that the ad valorem taxes, if
any, arising from the levies upon | ||
taxable real property in such economic
development project area | ||
by taxing districts and tax rates determined in
the manner | ||
provided in subsection (b) of Section 6 of this Act each year
| ||
after the effective date of the ordinance until economic | ||
development
project costs and all municipal obligations | ||
financing economic development
project costs incurred under | ||
this Act have been paid shall be divided as follows:
|
(1) That portion of taxes levied upon each taxable lot, | ||
block, tract or
parcel of real property which is attributable | ||
to the lower of the current
equalized assessed value or the | ||
initial equalized assessed value of each
such taxable lot, | ||
block, tract or parcel of real property in the economic
| ||
development project area shall be allocated to and when | ||
collected shall be
paid by the county collector to the | ||
respective affected taxing districts in
the manner required by | ||
law in the absence of the adoption of tax increment
allocation | ||
financing.
| ||
(2) That portion, if any, of such taxes which is | ||
attributable to the
increase in the current equalized assessed | ||
valuation of each taxable lot,
block, tract or parcel of real | ||
property in the economic development project
area over and | ||
above the initial equalized assessed value of each property
in | ||
the economic development project area shall be allocated to and | ||
when
collected shall be paid to the municipal treasurer who | ||
shall deposit such
taxes into a special fund called the special | ||
tax allocation fund of the
municipality for the purpose of | ||
paying economic development project costs
and obligations | ||
incurred in the payment thereof.
| ||
(f) After a municipality has by ordinance approved an | ||
economic
development plan and established an economic | ||
development project area,
the plan may be amended and the
| ||
boundaries of the area may be altered only as herein provided.
| ||
Amendments which (1) alter the exterior boundaries of an |
economic development
project area, (2) substantially affect | ||
the general land uses established pursuant to the
economic | ||
development plan, (3) substantially change the
nature of the | ||
economic development project, (4) change
the general | ||
description
of any proposed developer, user, or tenant of any | ||
property to be located or
improved within the economic | ||
development project area, or (5) change the description
of the | ||
type, class and number of employees to be employed in the | ||
operation
of the facilities to be developed or improved within | ||
the economic
development project area, shall be made only after
| ||
notice and hearing pursuant to the procedures set forth in this | ||
Section.
Amendments which do not
(1) alter the boundaries of | ||
the economic
development project area,
(2) substantially | ||
affect the general land uses established in the economic
| ||
development plan, (3) substantially change the nature of the | ||
economic development
project, (4) change the general | ||
description of any proposed developer, user, or tenant
of any | ||
property to be located or improved within the economic | ||
development
project area, or (5) change the description of the | ||
type, class and number of employees
to be employed in the | ||
operation of the facilities
to be developed or improved within | ||
the economic development project area
may be made without | ||
further hearing, provided that
the municipality shall give
| ||
notice of any amendment by mail to the Department and to each | ||
taxing
district and by publication in a newspaper or newspapers | ||
of
general circulation within the affected taxing districts. |
Such notice by
mail and by publication shall each occur not | ||
later than 10 days following
the adoption by ordinance of any | ||
amendments. | ||
(g) Extension of economic development project area; | ||
allocations; payment of outstanding claims; changes in | ||
equalized assessed valuation.
| ||
(1) Notwithstanding anything to the contrary set forth in | ||
this Act, upon the effective date of this amendatory Act of the | ||
97th General Assembly, the duration of any existing economic | ||
development plan created pursuant to this Act is extended to | ||
the duration permitted under this subsection, up to a maximum | ||
duration of 15 years. | ||
(2) For the purposes of this Section, real estate taxes | ||
paid on property within the economic development project area | ||
during calendar year 2013 and remitted to the developer and the | ||
taxing districts in 2014 shall be the "base amount". Beginning | ||
with real estate taxes remitted in 2014, for any economic | ||
development plan extended by operation of item (1) of this | ||
subsection (g), until such time as all existing obligations, as | ||
that term is defined in item (5) of this subsection (g), have | ||
been satisfied, the allocation of the special tax allocation | ||
fund shall be as follows: | ||
(A) All receipts up to the first $350,000 shall be | ||
maintained by the municipality in an escrow account to be | ||
used solely for (i) expenses relating to the reports | ||
required by Section 4.7 of this Act and (ii) legal expenses |
incurred in defense of any civil action brought against the | ||
municipality relating to the economic development | ||
agreement. The escrow account shall be within the scope of | ||
the annual audit provided in Section 4.7 of this Act. Each | ||
December 31 following a deposit into the escrow account, | ||
any unobligated balance in the escrow account shall be | ||
distributed to the taxing districts in the same manner and | ||
proportion as the most recent distribution by the county | ||
collector to the taxing districts in the economic | ||
development project area. | ||
(B) After the allocation required pursuant to | ||
paragraph (A) of this item (2), the next $5,000,000 of the | ||
receipts shall be allocated to the municipality. | ||
(C) After the allocations required pursuant to | ||
paragraphs (A) and (B) of this item (2), 55% of the | ||
remaining receipts shall be allocated to the developer. | ||
(D) After the allocations required pursuant to parts | ||
(A) and (B) of this item (2), 45% of the remaining receipts | ||
shall be allocated to the taxing districts located within | ||
the economic development project area, excluding the | ||
municipality. | ||
(3) For real estate taxes paid in 2012 and remitted to the | ||
developer and the taxing districts in 2013 and prior years, the | ||
allocation formula contained in any economic development plan | ||
in effect immediately prior to the effective date of this | ||
amendatory Act of the 97th General Assembly shall apply. |
(4) Beginning with real estate taxes paid in 2014 and | ||
remitted to the developer and the taxing districts in 2015 and | ||
each year thereafter, if the taxes paid within the economic | ||
development project area change from the base amount, the | ||
allocation of the special tax allocation fund shall be as | ||
follows: | ||
(A) If the amount of current year taxes paid is less | ||
than the base amount, then the administrative escrow | ||
account shall receive the first $350,000 of receipts, the | ||
municipality shall receive the next $5,000,000 of | ||
receipts, the developer shall receive 55% of receipts over | ||
$5,350,000, and the remaining 45% of receipts over | ||
$5,350,000 shall be distributed to the taxing districts | ||
(excluding the municipality) in the same manner and | ||
proportion as the most recent distribution by the county | ||
collector to those taxing districts in the economic | ||
development project area. | ||
(B) If the amount of current year taxes paid is greater | ||
than the base amount, then 75% of the increase in real | ||
estate tax receipts shall be payable to the developer and | ||
the remaining 25% of the increase in real estate tax | ||
receipts shall be distributed to the taxing districts | ||
(including the municipality) pursuant to the formula in | ||
this subsection. | ||
(5) After (i) all existing obligations and interest thereon | ||
have been satisfied, (ii) any excess moneys have been |
distributed pursuant to this subsection, and (iii) final | ||
closing of the books and records of the economic development | ||
project area has occurred, the municipality shall adopt an | ||
ordinance dissolving the special tax allocation fund for the | ||
economic development project area and terminating the | ||
designation of the economic development project area as an | ||
economic development project area. All excess moneys in the | ||
special tax allocation fund shall be distributed to the taxing | ||
districts in the same manner and proportion as the most recent | ||
distribution by the county collector to those taxing districts | ||
in the economic development project area. For the purpose of | ||
this subsection (g), "existing obligations" means (i) the | ||
obligations of the developer that existed before the base year, | ||
as certified by a sworn affidavit of the principal financial | ||
officer of the developer attesting that the amounts set forth | ||
are true and correct, (ii) obligations of the municipality | ||
relating to the payment of the obligations of the developer, | ||
and (iii) any amounts payable by taxing districts to the | ||
developer for property taxes determined to have been overpaid, | ||
to the extent that those amounts payable have been carried | ||
forward as an interest bearing note due to the developer. All | ||
obligations of the developer due and payable shall be processed | ||
and paid in the order received, with the oldest notes to be | ||
processed and paid first. Beginning January 1, 2012, all | ||
outstanding interest bearing notes shall bear interest at the | ||
rate of 4% until paid. |
(h) Beginning on the effective date of this amendatory Act | ||
of the 97th General Assembly, the taxing districts shall meet | ||
annually 180 days after the close of the municipal fiscal year, | ||
or as soon as the economic development project audit for that | ||
fiscal year becomes available, to review the effectiveness and | ||
status of the economic development project area up to that | ||
date. | ||
(Source: P.A. 86-38.)
| ||
(20 ILCS 620/4.5 new) | ||
Sec. 4.5. Recapture. | ||
(a) In the event that the developer terminates all of its | ||
operations and vacates the redevelopment area within 60 months | ||
after the effective date of this amendatory Act of the 97th | ||
General Assembly, the developer shall be required to remit to | ||
the Department an amount equal to the payments disbursed to the | ||
developer in 2014 and subsequent years under the Agreement. | ||
Within 30 days after receipt, the Department shall remit such | ||
funds to the county collector. The county collector shall | ||
thereafter make distribution to the respective taxing | ||
districts in the same manner and proportion as the most recent | ||
distribution by the county collector to those taxing districts | ||
of real property taxes from real property in the economic | ||
development project area. | ||
(b) In the event the developer fails to maintain 4,250 jobs | ||
at any time before the termination of the economic development |
project area, except as provided in subsection (c), the | ||
developer shall forfeit an amount of its allocations from the | ||
special tax allocation fund for that time period in which the | ||
developer failed to maintain 4,250 jobs. The amount forfeited | ||
shall equal the percentage of the year that the developer | ||
failed to maintain 4,250 jobs multiplied by the amount the | ||
developer would have received if they maintained 4,250 jobs for | ||
the entire year. Any funds that are forfeited shall be | ||
distributed to the taxing districts in the same manner and | ||
proportion as the most recent distribution by the county | ||
collector to those taxing districts (inclusive of the | ||
municipality) in the economic development project area. | ||
(c) In the event that the developer maintains no jobs at | ||
any time before the termination of the economic development | ||
project area, the municipality shall adopt an ordinance | ||
dissolving the special tax allocation fund for the economic | ||
development project area and terminating the economic | ||
development project area as an economic development project | ||
area. That ordinance shall be adopted no later than one year | ||
after the date that the developer maintains no jobs within the | ||
economic development project area. All excess moneys in the | ||
special tax allocation fund shall be distributed to the taxing | ||
districts in the same manner and proportion as the most recent | ||
distribution by the county collector to those taxing districts | ||
in the economic development project area. |
(20 ILCS 620/4.7 new) | ||
Sec. 4.7. Municipal reports. After the effective date of | ||
this amendatory Act of the 97th General Assembly, a | ||
municipality shall submit in an electronic format all of the | ||
following information for each economic development project | ||
area (i) to the State Comptroller and (ii) to all taxing | ||
districts overlapping the economic development project area no | ||
later than 180 days after the close of each municipal fiscal | ||
year or as soon thereafter as the audited financial statements | ||
become available: | ||
(1) Any amendments to the economic development plan or | ||
the economic development project area. | ||
(2) Audited financial statements of the special tax | ||
allocation fund once a cumulative total of $100,000 has | ||
been deposited into the fund. | ||
(3) Certification of the Chief Executive Officer of the | ||
municipality that the municipality has complied with all of | ||
the requirements of this Act during the preceding fiscal | ||
year. | ||
(4) An opinion of legal counsel that the municipality | ||
is in compliance with this Act. | ||
(5) An analysis of the special tax allocation fund that | ||
sets forth: | ||
(A) the balance in the special tax allocation fund | ||
at the beginning of the fiscal year; | ||
(B) all amounts deposited in the special tax |
allocation fund by source; | ||
(C) an itemized list of all expenditures from the | ||
special tax allocation fund by category of permissible | ||
economic development project cost; and | ||
(D) the balance in the special tax allocation fund | ||
at the end of the fiscal year, including a breakdown of | ||
that balance by source and a breakdown of that balance | ||
identifying any portion of the balance that is | ||
required, pledged, earmarked, or otherwise designated | ||
for payment of or securing of obligations and | ||
anticipated economic development project costs; any | ||
portion of that ending balance that has not been | ||
identified or is not identified as being required, | ||
pledged, earmarked, or otherwise designated for | ||
payment of or securing of obligations or anticipated | ||
economic development project costs shall be designated | ||
as surplus as set forth in Section 8 of this Act. | ||
(6) A description of all property purchased by the | ||
municipality within the economic development project area | ||
including: | ||
(A) street address; | ||
(B) approximate size or description of property; | ||
(C) purchase price; and | ||
(D) the seller of the property. | ||
(7) A statement setting forth all activities | ||
undertaken in furtherance of the objectives of the economic |
development plan, including: | ||
(A) any project implemented in the preceding | ||
fiscal year; | ||
(B) a description of the economic development | ||
activities undertaken; | ||
(C) a description of any agreements entered into by | ||
the municipality with regard to the disposition or | ||
redevelopment of any property within the economic | ||
development project area; | ||
(D) additional information on the use of all funds | ||
received under this Act and steps taken by the | ||
municipality to achieve the objectives of the economic | ||
development plan; | ||
(E) information regarding contracts that the | ||
municipality's tax increment advisors or consultants | ||
have entered into with entities or persons that have | ||
received, or are receiving, payments financed by tax | ||
increment revenues produced by the same economic | ||
development project area; and | ||
(F) a review of public and, to the extent possible, | ||
private investment actually undertaken on or after the | ||
effective date of this amendatory Act of the 97th | ||
General Assembly and prior to the date of the report | ||
and estimated to be undertaken during the following | ||
fiscal year; this review shall, on a project by project | ||
basis, set forth the estimated amounts of public and |
private investment incurred after the effective date | ||
of this amendatory Act of the 97th General Assembly and | ||
provide the ratio of private investment to public | ||
investment to the date of the report and as estimated | ||
to the completion of the economic development project. | ||
(8) With regard to any obligations issued by the | ||
municipality: | ||
(A) copies of any official statements; and | ||
(B) an analysis prepared by a financial advisor or | ||
underwriter setting forth: (i) the nature and term of | ||
those obligations; and (ii) projected debt service | ||
including required reserves and debt coverage. | ||
(9) For special tax allocation funds that have | ||
experienced cumulative deposits of incremental tax | ||
revenues of $100,000 or more, a certified audit report | ||
reviewing compliance with this Act performed by an | ||
independent certified public accountant licensed by the | ||
authority of the State of Illinois. The financial portion | ||
of the audit must be conducted in accordance with Standards | ||
for Audits of Governmental Organizations, Programs, | ||
Activities, and Functions adopted by the Comptroller | ||
General of the United States (1981), as amended, or the | ||
standards specified by Section 8-8-5 of the Illinois | ||
Municipal Auditing Law of the Illinois Municipal Code. The | ||
audit report shall contain a letter from the independent | ||
certified public accountant indicating compliance or |
noncompliance with the requirements of subsection (e) of | ||
Section 3 of this Act. | ||
(10) A list of all intergovernmental agreements in | ||
effect during the fiscal year to which the municipality is | ||
a party and an accounting of any moneys transferred or | ||
received by the municipality during that fiscal year | ||
pursuant to those intergovernmental agreements.
| ||
(20 ILCS 620/5) (from Ch. 67 1/2, par. 1005)
| ||
Sec. 5.
Submission to Department; certification by | ||
Department;
limitation on number of permissible economic | ||
development project areas.
(a) The municipality shall submit | ||
certified copies of any ordinances
adopted approving an | ||
economic development plan, establishing an
economic | ||
development project area, and authorizing tax increment | ||
allocation
financing for such economic development project | ||
area to the Department,
together with (1) a map of the economic
| ||
development project area, (2) a copy of the economic | ||
development plan as
approved, (3) an analysis, and any | ||
supporting documents and statistics,
demonstrating that the | ||
developer or any of its successor entities and its subsidiaries | ||
economic development project shall
create or retain
not less | ||
than 4,250 2,000 full-time equivalent jobs and that private | ||
investment
in the amount of not less than $100,000,000 shall | ||
occur
in the economic development project area, (4) an estimate | ||
of the economic
impact of the economic development project and |
the use of tax increment
allocation financing upon the revenues | ||
of the municipality and the affected
taxing districts, (5) a | ||
record of all public hearings had in connection
with the | ||
establishment of the economic development project area, and (6)
| ||
such other information as the Department by regulation may | ||
require.
| ||
(b) Upon receipt of an application from a municipality the | ||
Department
shall review the application to determine whether | ||
the economic development
project area qualifies as an economic | ||
development project area under this
Act. At its discretion, the | ||
Department may accept or reject the
application or may request | ||
such additional information as it deems
necessary or advisable | ||
to aid its review. If any such area is found to be
qualified to | ||
be an economic development project area, the Department shall
| ||
approve and certify such economic development project area and | ||
shall
provide written notice of its approval and certification | ||
to the municipality and
to the county clerk. In determining | ||
whether an economic development
project area shall be approved | ||
and certified, the Department shall consider
(1) whether, | ||
without public intervention, the State would suffer
| ||
substantial economic dislocation, such as relocation of a | ||
commercial
business or industrial or manufacturing facility to | ||
another state,
territory or country, or would not otherwise | ||
benefit from private
investment offering substantial | ||
employment opportunities and economic
growth, and (2) the | ||
impact on the revenues of the municipality and the
affected |
taxing districts of the use of tax increment allocation | ||
financing
in connection with the economic development project.
| ||
(c) On or before the date which is 18 months following the | ||
date on which
this Act becomes law, the Department shall submit | ||
to the General Assembly a
report detailing the number of | ||
economic development project areas it has
approved and | ||
certified, the number and type of jobs created or retained
| ||
therein, the aggregate amount of private investment therein, | ||
the impact on
the revenues of municipalities and affected | ||
taxing districts of the use of
tax increment allocation | ||
financing therein, and such additional information
as the | ||
Department may determine to be relevant. On or after the date | ||
which
is 20 months following the date on which this Act becomes | ||
law the authority
granted hereunder to municipalities to | ||
establish economic development
project areas and to adopt tax | ||
increment allocation financing in connection
therewith and to | ||
the Department to approve and certify economic development
| ||
project areas shall expire unless the General Assembly shall | ||
have
authorized municipalities and the Department to continue | ||
to exercise the
powers granted to them hereunder.
| ||
(Source: P.A. 86-38.)
| ||
(20 ILCS 620/8) (from Ch. 67 1/2, par. 1008)
| ||
Sec. 8.
Issuance of obligations for economic development | ||
project
costs. Obligations secured by the special tax | ||
allocation fund provided for in
Section 7 of this Act for an |
economic development project area may be issued to
provide for | ||
economic development project costs. Those obligations, when so
| ||
issued, shall be retired in the manner provided in the | ||
ordinance
authorizing the issuance of the obligations by the | ||
receipts of taxes
levied as specified in Section 6 of this Act | ||
against the taxable property
included in
the economic | ||
development project area and by other revenue designated or
| ||
pledged by the municipality. A municipality may in the | ||
ordinance pledge
all or any part of the funds in and to be | ||
deposited in the special tax
allocation fund created pursuant | ||
to Section 7 of this Act to the payment of the
economic | ||
development project costs and obligations.
Whenever a | ||
municipality pledges all of the funds to the credit of a
| ||
special tax allocation fund to secure obligations issued or to | ||
be issued to
pay economic development project costs, the | ||
municipality may specifically
provide that funds remaining to | ||
the credit of such special tax allocation
fund after the | ||
payment of such obligations shall be accounted for annually
and | ||
shall be deemed to be "surplus" funds, and such "surplus" funds | ||
shall be
distributed as hereinafter provided. Whenever a | ||
municipality pledges less
than all of the monies to the credit | ||
of a special tax allocation fund to
secure obligations issued | ||
or to be issued to pay economic development
project costs, the | ||
municipality shall provide that monies to the credit of
the | ||
special tax allocation fund and not subject to such pledge or
| ||
otherwise encumbered or required for payment of contractual |
obligations
for specific economic development project costs | ||
shall be calculated
annually and shall be deemed to be | ||
"surplus" funds, and such "surplus"
funds shall be distributed | ||
as hereinafter provided. All funds to the
credit of a special | ||
tax allocation fund which are deemed to be "surplus"
funds | ||
shall be distributed annually within 180 days of the close of | ||
the
municipality's fiscal year by being paid by the municipal | ||
treasurer to the
county collector.
The county collector shall
| ||
thereafter make distribution to the respective taxing | ||
districts in the same
manner and proportion as the most recent | ||
distribution by the county
collector to those taxing districts | ||
of real property taxes from real
property in the economic | ||
development project area.
| ||
Without limiting the foregoing in this Section the | ||
municipality may, in
addition to obligations secured by the | ||
special tax allocation fund, pledge
for a period not greater | ||
than the term of the obligations towards payment
of those | ||
obligations any part or any combination of the following: (i) | ||
net
revenues of all or part of any economic development | ||
project; (ii) taxes
levied and collected on any or all property | ||
in the municipality, including,
specifically, taxes levied or | ||
imposed by the municipality in a special
service area pursuant | ||
to "An Act to provide the manner of levying or
imposing taxes | ||
for the provision of special services to areas within the
| ||
boundaries of home rule units and non-home rule municipalities | ||
and
counties", approved September 21, 1973, as now or hereafter |
amended; (iii) the
full faith and credit of the municipality; | ||
(iv) a mortgage on part or all
of the economic development | ||
project; or (v) any other taxes or anticipated
receipts that | ||
the municipality may lawfully pledge.
| ||
Such obligations may be issued in one or more series | ||
bearing interest at
such rate or rates as the corporate | ||
authorities of the municipality shall
determine by ordinance, | ||
which rate or rates may be variable or fixed,
without regard to | ||
any limitations contained in any law now in effect or
hereafter | ||
adopted. Such obligations shall bear such date or dates, mature
| ||
at such time or times not exceeding 38 20 years from their | ||
respective dates,
but in no event exceeding 38 23 years from | ||
the date of establishment of the
economic development project | ||
area, be in such denomination, be in such
form, whether coupon, | ||
registered or book-entry, carry such registration,
conversion | ||
and exchange privileges, be executed in such manner, be payable
| ||
in such medium of payment at such place or places within or | ||
without the
State of Illinois, contain such covenants, terms | ||
and conditions, be subject
to redemption with or without | ||
premium, be subject to defeasance upon such
terms, and have | ||
such rank or priority, as such ordinance shall provide.
| ||
Obligations issued pursuant to this Act may be sold at public | ||
or private
sale at such price as shall be determined by the | ||
corporate authorities of
the municipalities. Such obligations | ||
may, but need not, be issued utilizing
the provisions of any | ||
one or more of the omnibus bond Acts
specified in Section 1.33 |
of "An Act to revise the law in relation to the
construction of | ||
the statutes", approved March 5, 1874, as now or hereafter
| ||
amended. No referendum approval of the electors shall be | ||
required as a condition to
the issuance of obligations pursuant | ||
to this Act except as provided in this Section.
| ||
Whenever a municipality issues bonds for the purpose of | ||
financing
economic development project costs, the municipality | ||
may provide by
ordinance for the appointment of a trustee, | ||
which may be any trust company
within the State, and for the | ||
establishment of the funds or accounts to be
maintained by such | ||
trustee as the municipality shall deem necessary to
provide for | ||
the security and payment of the bonds. If the municipality
| ||
provides for the appointment of a trustee, the trustee shall be | ||
considered
the assignee of any payments assigned by the | ||
municipality pursuant to the
ordinance and this Section. Any | ||
amounts paid to the trustee as assignee
shall be deposited in | ||
the funds or accounts established pursuant to the
trust | ||
agreement, and shall be held by the trustee in trust for the | ||
benefit of
the holders
of the bonds, and the holders shall have | ||
a lien on and a security interest
in those bonds or accounts so | ||
long as the bonds remain outstanding and
unpaid. Upon | ||
retirement of the bonds, the trustee shall pay over any excess
| ||
amounts held to the municipality for deposit in the special tax | ||
allocation
fund.
| ||
In the event the municipality authorizes the issuance of | ||
obligations
pursuant to the authority of this Act secured by |
the full faith and
credit of the municipality, or pledges ad | ||
valorem taxes pursuant to clause
(ii) of the second paragraph | ||
of this Section, which obligations are other than
obligations
| ||
which may be issued under home rule powers provided by Article | ||
VII,
Section 6 of the Illinois Constitution or which ad valorem | ||
taxes are other than
ad valorem
taxes which may be pledged | ||
under home rule powers provided by Article VII, Section
6 of | ||
the Illinois Constitution or which are levied in a special | ||
service
area pursuant to "An Act to provide the manner of | ||
levying or imposing taxes
for the provision of special services | ||
to areas within the boundaries of
home rule units and non-home | ||
rule municipalities and counties", approved
September 21, | ||
1973, as now or hereafter amended,
the ordinance authorizing | ||
the
issuance of those obligations or pledging those taxes shall | ||
be published
within 10 days after the ordinance has been | ||
adopted, in one or more
newspapers having a general circulation | ||
within the municipality. The
publication of the ordinance shall | ||
be accompanied by a notice of (1) the
specific number of voters | ||
required to sign a petition requesting the
question of the | ||
issuance of the obligations or pledging such ad valorem taxes
| ||
to be submitted to the electors; (2) the time within which the | ||
petition must
be filed; and (3) the date of the prospective | ||
referendum. The municipal
clerk shall provide a petition form | ||
to any individual requesting one.
| ||
If no petition is filed with the municipal clerk, as | ||
hereinafter provided
in this Section, within 21 days after the |
publication of the ordinance, the
ordinance shall be in effect. | ||
However, if within that 21 day period a petition
is filed with | ||
the municipal clerk, signed by electors numbering not less
than | ||
15% of the number of electors voting for the mayor or president | ||
at the
last general municipal election, asking that the | ||
question of issuing
obligations using full faith and credit of | ||
the municipality as security for
the cost of paying for | ||
economic development project costs, or of pledging
such ad | ||
valorem taxes for the payment of those obligations, or both, be | ||
submitted
to the electors of the municipality, the municipality | ||
shall not be
authorized to issue obligations of the | ||
municipality using the full faith and
credit of the | ||
municipality as security or pledging such ad valorem taxes for | ||
the
payment of those obligations, or both, until the | ||
proposition
has been submitted to and approved by a majority of | ||
the voters voting on
the proposition at a regularly scheduled | ||
election. The municipality shall
certify the proposition to the | ||
proper election authorities for submission
in accordance with | ||
the general election law.
| ||
The ordinance authorizing the obligations may provide that | ||
the
obligations shall contain a recital that they are issued | ||
pursuant to this
Act, which recital shall be conclusive | ||
evidence of their validity and of
the regularity of their | ||
issuance.
| ||
In the event the municipality authorizes issuance of | ||
obligations pursuant
to this Act secured by the full faith and |
credit of the municipality, the
ordinance authorizing the | ||
obligations may provide for the levy and
collection of a direct | ||
annual tax upon all taxable property within the
municipality | ||
sufficient to pay the principal thereof and interest thereon
as | ||
it matures, which levy may be in addition to and exclusive of | ||
the
maximum of all other taxes authorized to be levied by the | ||
municipality,
which levy, however, shall be abated to the | ||
extent that monies from other
sources are available for payment | ||
of the obligations and the municipality
certifies the amount of | ||
those monies available to the county clerk.
| ||
A certified copy of the ordinance shall be filed with the | ||
county clerk
of each county in which any portion of the | ||
municipality is situated, and
shall constitute the authority | ||
for the extension and collection of the taxes
to be deposited | ||
in the special tax allocation fund.
| ||
A municipality may also issue its obligations to refund, in | ||
whole or in
part, obligations theretofore issued by the | ||
municipality under the
authority of this Act, whether at or | ||
prior to maturity. However,
the last maturity of the refunding | ||
obligations shall not be expressed
to mature later than 38 23 | ||
years from the date of the ordinance establishing
the economic | ||
development project area.
| ||
In the event a municipality issues obligations under home | ||
rule powers or
other legislative authority, the proceeds of | ||
which are pledged to pay for
economic development project | ||
costs, the municipality may, if it has
followed the procedures |
in conformance with this Act, retire those
obligations from | ||
funds in the special tax allocation fund in amounts and in
such | ||
manner as if those obligations had been issued pursuant to the
| ||
provisions of this Act.
| ||
No obligations issued pursuant to this Act shall be | ||
regarded as
indebtedness of the municipality issuing those | ||
obligations or any other
taxing district for the purpose of any | ||
limitation imposed by law.
| ||
Obligations issued pursuant to this Act shall not be | ||
subject to the
provisions of "An Act to authorize public | ||
corporations to issue bonds,
other evidences of indebtedness | ||
and tax anticipation warrants subject to
interest rate | ||
limitations set forth therein", approved May 26, 1970, as | ||
amended.
| ||
(Source: P.A. 86-38.)
| ||
(20 ILCS 620/9) (from Ch. 67 1/2, par. 1009)
| ||
Sec. 9. Powers of municipalities. In addition to powers | ||
which it may
now
have, any municipality has the power under | ||
this Act:
| ||
(a) To make and enter into all contracts necessary or | ||
incidental to the
implementation and furtherance of an economic | ||
development plan.
| ||
(b) Within an economic development project area, to acquire | ||
by purchase,
donation, lease or eminent domain, and to own, | ||
convey, lease, mortgage or
dispose of land and other real or |
personal property or rights or interests
therein; and to grant | ||
or acquire licenses, easements and options with
respect | ||
thereto, all in the manner and at such price the municipality
| ||
determines is reasonably necessary to achieve the objectives of | ||
the
economic development project. No conveyance, lease, | ||
mortgage, disposition
of land or other property acquired by the | ||
municipality, or agreement
relating to the development of | ||
property, shall be made or executed except
pursuant to prior | ||
official action of the municipality.
No conveyance, lease, | ||
mortgage or other disposition of land, and no
agreement | ||
relating to the development of property, shall be made without
| ||
making public disclosure of the terms and disposition of all | ||
bids and
proposals submitted to the municipality in connection | ||
therewith.
| ||
(c) To clear any area within an economic development | ||
project area by
demolition or removal of any existing | ||
buildings, structures, fixtures,
utilities or improvements, | ||
and to clear and grade land.
| ||
(d) To install, repair, construct, reconstruct or relocate | ||
public
streets, public utilities, and other public site | ||
improvements within or
without an economic development project | ||
area which are essential to the
preparation of an economic | ||
development project area for use in accordance
with an economic | ||
development plan.
| ||
(e) To renovate, rehabilitate, reconstruct, relocate, | ||
repair or remodel
any existing buildings, improvements, and |
fixtures within an economic
development project area.
| ||
(f) To construct , acquire, and operate public | ||
improvements, including but not limited to,
publicly owned | ||
buildings, structures, works, utilities or fixtures within any | ||
economic
development project area , subject to the restrictions | ||
of item (5) of subsection (e) of Section 3 of this Act .
| ||
(g) To issue obligations as provided in this Act provided .
| ||
(h) To fix, charge and collect fees, rents and charges for | ||
the use of
any building, facility or property or any portion | ||
thereof owned or leased
by the municipality within an economic | ||
development project area.
| ||
(i) To accept grants, guarantees, donations of property or | ||
labor, or any
other thing of value for use in connection with | ||
an economic development project.
| ||
(j) To pay or cause to be paid economic development project | ||
costs. Any
payments to be made by the municipality to | ||
developers or other
nongovernmental persons for economic | ||
development project costs incurred by
such developer or other | ||
nongovernmental person shall be made only pursuant
to the prior | ||
official action of the municipality evidencing an intent to
pay | ||
or cause to be paid such economic development project costs. A
| ||
municipality is not required to obtain any right, title or | ||
interest in any
real or personal property in order to pay | ||
economic development project
costs associated with such | ||
property. The municipality shall adopt such
accounting | ||
procedures as may be necessary to determine that such economic
|
development project costs are properly paid.
| ||
(k) To exercise any and all other powers necessary to | ||
effectuate the
purposes of this Act.
| ||
(l) To create a commission of not less than 5 or more than | ||
15 persons to be
appointed by the mayor or president of the | ||
municipality with the consent of
the majority of the corporate | ||
authorities of the municipality. Members of a
commission shall | ||
be appointed for initial terms of 1, 2, 3, 4, and 5 years,
| ||
respectively, in such numbers as to provide that the terms of | ||
not more than
1/3 of all such members shall expire in any one | ||
year. Their successors
shall be appointed for a term of 5 | ||
years. The commission, subject to
approval of the corporate | ||
authorities, may exercise the powers enumerated in
this | ||
Section. The commission shall also have the power to hold the | ||
public
hearings required by this Act and make recommendations | ||
to the corporate
authorities concerning the approval of | ||
economic development plans, the
establishment of economic | ||
development project areas, and the adoption of
tax increment | ||
allocation financing for economic development project areas.
| ||
(Source: P.A. 91-357, eff. 7-29-99.)
| ||
(20 ILCS 620/11) (from Ch. 67 1/2, par. 1011)
| ||
Sec. 11. Payment of project costs; revenues from | ||
governmental municipal property. Revenues received by a taxing | ||
district municipality from any property, building or
facility | ||
owned, leased or operated by the taxing district municipality |
or any agency or
authority established by the taxing district | ||
municipality may be used to pay economic
development project | ||
costs, or reduce outstanding obligations of the
taxing district | ||
municipality incurred under this Act for economic development | ||
project
costs. The taxing district municipality may place those | ||
revenues in the special tax
allocation fund which shall be held | ||
by the municipal treasurer of the taxing district or other
| ||
person designated by the taxing district municipality . Revenue | ||
received by a taxing district the municipality
from the sale or | ||
other disposition of real or personal property or rights
or | ||
interests therein acquired by a taxing district the
| ||
municipality with the proceeds of obligations funded by tax | ||
increment
allocation financing may be used to acquire and | ||
operate other governmental property that is within the economic | ||
development project area or that provides services within the | ||
economic development project area, subject to the restrictions | ||
of item (5) of subsection (e) of Section 3 of this Act. shall | ||
be deposited by the municipality in the special
tax allocation | ||
fund.
| ||
(Source: P.A. 86-38.)
| ||
Section 15-7. The New Markets Development Program Act is | ||
amended by changing Section 50 as follows:
| ||
(20 ILCS 663/50)
| ||
Sec. 50. Sunset. For fiscal years following fiscal year |
2017 2012 , qualified equity investments shall not be made under | ||
this Act unless reauthorization is made pursuant to this | ||
Section. For all fiscal years following fiscal year 2017 2012 , | ||
unless the General Assembly adopts a joint resolution granting | ||
authority to the Department to approve qualified equity | ||
investments for the Illinois new markets development program | ||
and clearly describing the amount of tax credits available for | ||
the next fiscal year, or otherwise complies with the provisions | ||
of this Section, no qualified equity investments may be | ||
permitted to be made under this Act. The amount of available | ||
tax credits contained in such a resolution shall not exceed the | ||
limitation provided under Section 20. Nothing in this Section | ||
precludes a taxpayer who makes a qualified equity investment | ||
prior to the expiration of authority to make qualified equity | ||
investments from claiming tax credits relating to that | ||
qualified equity investment for each applicable credit | ||
allowance date.
| ||
(Source: P.A. 95-1024, eff. 12-31-08.) | ||
Section 15-10. The Illinois Income Tax Act is amended by | ||
changing Sections 201, 207, 250, 304, 804, and 1501 as follows: | ||
(35 ILCS 5/201) (from Ch. 120, par. 2-201) | ||
Sec. 201. Tax Imposed. | ||
(a) In general. A tax measured by net income is hereby | ||
imposed on every
individual, corporation, trust and estate for |
each taxable year ending
after July 31, 1969 on the privilege | ||
of earning or receiving income in or
as a resident of this | ||
State. Such tax shall be in addition to all other
occupation or | ||
privilege taxes imposed by this State or by any municipal
| ||
corporation or political subdivision thereof. | ||
(b) Rates. The tax imposed by subsection (a) of this | ||
Section shall be
determined as follows, except as adjusted by | ||
subsection (d-1): | ||
(1) In the case of an individual, trust or estate, for | ||
taxable years
ending prior to July 1, 1989, an amount equal | ||
to 2 1/2% of the taxpayer's
net income for the taxable | ||
year. | ||
(2) In the case of an individual, trust or estate, for | ||
taxable years
beginning prior to July 1, 1989 and ending | ||
after June 30, 1989, an amount
equal to the sum of (i) 2 | ||
1/2% of the taxpayer's net income for the period
prior to | ||
July 1, 1989, as calculated under Section 202.3, and (ii) | ||
3% of the
taxpayer's net income for the period after June | ||
30, 1989, as calculated
under Section 202.3. | ||
(3) In the case of an individual, trust or estate, for | ||
taxable years
beginning after June 30, 1989, and ending | ||
prior to January 1, 2011, an amount equal to 3% of the | ||
taxpayer's net
income for the taxable year. | ||
(4) In the case of an individual, trust, or estate, for | ||
taxable years beginning prior to January 1, 2011, and | ||
ending after December 31, 2010, an amount equal to the sum |
of (i) 3% of the taxpayer's net income for the period prior | ||
to January 1, 2011, as calculated under Section 202.5, and | ||
(ii) 5% of the taxpayer's net income for the period after | ||
December 31, 2010, as calculated under Section 202.5. | ||
(5) In the case of an individual, trust, or estate, for | ||
taxable years beginning on or after January 1, 2011, and | ||
ending prior to January 1, 2015, an amount equal to 5% of | ||
the taxpayer's net income for the taxable year. | ||
(5.1) In the case of an individual, trust, or estate, | ||
for taxable years beginning prior to January 1, 2015, and | ||
ending after December 31, 2014, an amount equal to the sum | ||
of (i) 5% of the taxpayer's net income for the period prior | ||
to January 1, 2015, as calculated under Section 202.5, and | ||
(ii) 3.75% of the taxpayer's net income for the period | ||
after December 31, 2014, as calculated under Section 202.5. | ||
(5.2) In the case of an individual, trust, or estate, | ||
for taxable years beginning on or after January 1, 2015, | ||
and ending prior to January 1, 2025, 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 January 1, 2025, and | ||
ending after December 31, 2024, an amount equal to the sum | ||
of (i) 3.75% of the taxpayer's net income for the period | ||
prior to January 1, 2025, as calculated under Section | ||
202.5, and (ii) 3.25% of the taxpayer's net income for the | ||
period after December 31, 2024, as calculated under Section |
202.5. | ||
(5.4) In the case of an individual, trust, or estate, | ||
for taxable years beginning on or after January 1, 2025, an | ||
amount equal to 3.25% 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 | ||
January 1, 2025, 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 January 1, 2025, and ending after | ||
December 31, 2024, an amount equal to the sum of (i) 5.25% | ||
of the taxpayer's net income for the period prior to | ||
January 1, 2025, as calculated under Section 202.5, and | ||
(ii) 4.8% of the taxpayer's net income for the period after | ||
December 31, 2024, as calculated under Section 202.5. | ||
(14) In the case of a corporation, for taxable years | ||
beginning on or after January 1, 2025, an amount equal to | ||
4.8% of the taxpayer's net income for the taxable year. | ||
The rates under this subsection (b) are subject to the |
provisions of Section 201.5. | ||
(c) Personal Property Tax Replacement Income Tax.
| ||
Beginning on July 1, 1979 and thereafter, in addition to such | ||
income
tax, there is also hereby imposed the Personal Property | ||
Tax Replacement
Income Tax measured by net income on every | ||
corporation (including Subchapter
S corporations), partnership | ||
and trust, for each taxable year ending after
June 30, 1979. | ||
Such taxes are imposed on the privilege of earning or
receiving | ||
income in or as a resident of this State. The Personal Property
| ||
Tax Replacement Income Tax shall be in addition to the income | ||
tax imposed
by subsections (a) and (b) of this Section and in | ||
addition to all other
occupation or privilege taxes imposed by | ||
this State or by any municipal
corporation or political | ||
subdivision thereof. | ||
(d) Additional Personal Property Tax Replacement Income | ||
Tax Rates.
The personal property tax replacement income tax | ||
imposed by this subsection
and subsection (c) of this Section | ||
in the case of a corporation, other
than a Subchapter S | ||
corporation and except as adjusted by subsection (d-1),
shall | ||
be an additional amount equal to
2.85% of such taxpayer's net | ||
income for the taxable year, except that
beginning on January | ||
1, 1981, and thereafter, the rate of 2.85% specified
in this | ||
subsection shall be reduced to 2.5%, and in the case of a
| ||
partnership, trust or a Subchapter S corporation shall be an | ||
additional
amount equal to 1.5% of such taxpayer's net income | ||
for the taxable year. |
(d-1) Rate reduction for certain foreign insurers. In the | ||
case of a
foreign insurer, as defined by Section 35A-5 of the | ||
Illinois Insurance Code,
whose state or country of domicile | ||
imposes on insurers domiciled in Illinois
a retaliatory tax | ||
(excluding any insurer
whose premiums from reinsurance assumed | ||
are 50% or more of its total insurance
premiums as determined | ||
under paragraph (2) of subsection (b) of Section 304,
except | ||
that for purposes of this determination premiums from | ||
reinsurance do
not include premiums from inter-affiliate | ||
reinsurance arrangements),
beginning with taxable years ending | ||
on or after December 31, 1999,
the sum of
the rates of tax | ||
imposed by subsections (b) and (d) shall be reduced (but not
| ||
increased) to the rate at which the total amount of tax imposed | ||
under this Act,
net of all credits allowed under this Act, | ||
shall equal (i) the total amount of
tax that would be imposed | ||
on the foreign insurer's net income allocable to
Illinois for | ||
the taxable year by such foreign insurer's state or country of
| ||
domicile if that net income were subject to all income taxes | ||
and taxes
measured by net income imposed by such foreign | ||
insurer's state or country of
domicile, net of all credits | ||
allowed or (ii) a rate of zero if no such tax is
imposed on such | ||
income by the foreign insurer's state of domicile.
For the | ||
purposes of this subsection (d-1), an inter-affiliate includes | ||
a
mutual insurer under common management. | ||
(1) For the purposes of subsection (d-1), in no event | ||
shall the sum of the
rates of tax imposed by subsections |
(b) and (d) be reduced below the rate at
which the sum of: | ||
(A) the total amount of tax imposed on such foreign | ||
insurer under
this Act for a taxable year, net of all | ||
credits allowed under this Act, plus | ||
(B) the privilege tax imposed by Section 409 of the | ||
Illinois Insurance
Code, the fire insurance company | ||
tax imposed by Section 12 of the Fire
Investigation | ||
Act, and the fire department taxes imposed under | ||
Section 11-10-1
of the Illinois Municipal Code, | ||
equals 1.25% for taxable years ending prior to December 31, | ||
2003, or
1.75% for taxable years ending on or after | ||
December 31, 2003, of the net
taxable premiums written for | ||
the taxable year,
as described by subsection (1) of Section | ||
409 of the Illinois Insurance Code.
This paragraph will in | ||
no event increase the rates imposed under subsections
(b) | ||
and (d). | ||
(2) Any reduction in the rates of tax imposed by this | ||
subsection shall be
applied first against the rates imposed | ||
by subsection (b) and only after the
tax imposed by | ||
subsection (a) net of all credits allowed under this | ||
Section
other than the credit allowed under subsection (i) | ||
has been reduced to zero,
against the rates imposed by | ||
subsection (d). | ||
This subsection (d-1) is exempt from the provisions of | ||
Section 250. | ||
(e) Investment credit. A taxpayer shall be allowed a credit
|
against the Personal Property Tax Replacement Income Tax for
| ||
investment in qualified property. | ||
(1) A taxpayer shall be allowed a credit equal to .5% | ||
of
the basis of qualified property placed in service during | ||
the taxable year,
provided such property is placed in | ||
service on or after
July 1, 1984. There shall be allowed an | ||
additional credit equal
to .5% of the basis of qualified | ||
property placed in service during the
taxable year, | ||
provided such property is placed in service on or
after | ||
July 1, 1986, and the taxpayer's base employment
within | ||
Illinois has increased by 1% or more over the preceding | ||
year as
determined by the taxpayer's employment records | ||
filed with the
Illinois Department of Employment Security. | ||
Taxpayers who are new to
Illinois shall be deemed to have | ||
met the 1% growth in base employment for
the first year in | ||
which they file employment records with the Illinois
| ||
Department of Employment Security. The provisions added to | ||
this Section by
Public Act 85-1200 (and restored by Public | ||
Act 87-895) shall be
construed as declaratory of existing | ||
law and not as a new enactment. If,
in any year, the | ||
increase in base employment within Illinois over the
| ||
preceding year is less than 1%, the additional credit shall | ||
be limited to that
percentage times a fraction, the | ||
numerator of which is .5% and the denominator
of which is | ||
1%, but shall not exceed .5%. The investment credit shall | ||
not be
allowed to the extent that it would reduce a |
taxpayer's liability in any tax
year below zero, nor may | ||
any credit for qualified property be allowed for any
year | ||
other than the year in which the property was placed in | ||
service in
Illinois. For tax years ending on or after | ||
December 31, 1987, and on or
before December 31, 1988, the | ||
credit shall be allowed for the tax year in
which the | ||
property is placed in service, or, if the amount of the | ||
credit
exceeds the tax liability for that year, whether it | ||
exceeds the original
liability or the liability as later | ||
amended, such excess may be carried
forward and applied to | ||
the tax liability of the 5 taxable years following
the | ||
excess credit years if the taxpayer (i) makes investments | ||
which cause
the creation of a minimum of 2,000 full-time | ||
equivalent jobs in Illinois,
(ii) is located in an | ||
enterprise zone established pursuant to the Illinois
| ||
Enterprise Zone Act and (iii) is certified by the | ||
Department of Commerce
and Community Affairs (now | ||
Department of Commerce and Economic Opportunity) as | ||
complying with the requirements specified in
clause (i) and | ||
(ii) by July 1, 1986. The Department of Commerce and
| ||
Community Affairs (now Department of Commerce and Economic | ||
Opportunity) shall notify the Department of Revenue of all | ||
such
certifications immediately. For tax years ending | ||
after December 31, 1988,
the credit shall be allowed for | ||
the tax year in which the property is
placed in service, | ||
or, if the amount of the credit exceeds the tax
liability |
for that year, whether it exceeds the original liability or | ||
the
liability as later amended, such excess may be carried | ||
forward and applied
to the tax liability of the 5 taxable | ||
years following the excess credit
years. The credit shall | ||
be applied to the earliest year for which there is
a | ||
liability. If there is credit from more than one tax year | ||
that is
available to offset a liability, earlier credit | ||
shall be applied first. | ||
(2) The term "qualified property" means property | ||
which: | ||
(A) is tangible, whether new or used, including | ||
buildings and structural
components of buildings and | ||
signs that are real property, but not including
land or | ||
improvements to real property that are not a structural | ||
component of a
building such as landscaping, sewer | ||
lines, local access roads, fencing, parking
lots, and | ||
other appurtenances; | ||
(B) is depreciable pursuant to Section 167 of the | ||
Internal Revenue Code,
except that "3-year property" | ||
as defined in Section 168(c)(2)(A) of that
Code is not | ||
eligible for the credit provided by this subsection | ||
(e); | ||
(C) is acquired by purchase as defined in Section | ||
179(d) of
the Internal Revenue Code; | ||
(D) is used in Illinois by a taxpayer who is | ||
primarily engaged in
manufacturing, or in mining coal |
or fluorite, or in retailing, or was placed in service | ||
on or after July 1, 2006 in a River Edge Redevelopment | ||
Zone established pursuant to the River Edge | ||
Redevelopment Zone Act; and | ||
(E) has not previously been used in Illinois in | ||
such a manner and by
such a person as would qualify for | ||
the credit provided by this subsection
(e) or | ||
subsection (f). | ||
(3) For purposes of this subsection (e), | ||
"manufacturing" means
the material staging and production | ||
of tangible personal property by
procedures commonly | ||
regarded as manufacturing, processing, fabrication, or
| ||
assembling which changes some existing material into new | ||
shapes, new
qualities, or new combinations. For purposes of | ||
this subsection
(e) the term "mining" shall have the same | ||
meaning as the term "mining" in
Section 613(c) of the | ||
Internal Revenue Code. For purposes of this subsection
(e), | ||
the term "retailing" means the sale of tangible personal | ||
property for use or consumption and not for resale, or
| ||
services rendered in conjunction with the sale of tangible | ||
personal property for use or consumption and not for | ||
resale. For purposes of this subsection (e), "tangible | ||
personal property" has the same meaning as when that term | ||
is used in the Retailers' Occupation Tax Act, and, for | ||
taxable years ending after December 31, 2008, does not | ||
include the generation, transmission, or distribution of |
electricity. | ||
(4) The basis of qualified property shall be the basis
| ||
used to compute the depreciation deduction for federal | ||
income tax purposes. | ||
(5) If the basis of the property for federal income tax | ||
depreciation
purposes is increased after it has been placed | ||
in service in Illinois by
the taxpayer, the amount of such | ||
increase shall be deemed property placed
in service on the | ||
date of such increase in basis. | ||
(6) The term "placed in service" shall have the same
| ||
meaning as under Section 46 of the Internal Revenue Code. | ||
(7) If during any taxable year, any property ceases to
| ||
be qualified property in the hands of the taxpayer within | ||
48 months after
being placed in service, or the situs of | ||
any qualified property is
moved outside Illinois within 48 | ||
months after being placed in service, the
Personal Property | ||
Tax Replacement Income Tax for such taxable year shall be
| ||
increased. Such increase shall be determined by (i) | ||
recomputing the
investment credit which would have been | ||
allowed for the year in which
credit for such property was | ||
originally allowed by eliminating such
property from such | ||
computation and, (ii) subtracting such recomputed credit
| ||
from the amount of credit previously allowed. For the | ||
purposes of this
paragraph (7), a reduction of the basis of | ||
qualified property resulting
from a redetermination of the | ||
purchase price shall be deemed a disposition
of qualified |
property to the extent of such reduction. | ||
(8) Unless the investment credit is extended by law, | ||
the
basis of qualified property shall not include costs | ||
incurred after
December 31, 2018 2013 , except for costs | ||
incurred pursuant to a binding
contract entered into on or | ||
before December 31, 2018 2013 . | ||
(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%.
| ||
(g) Jobs Tax Credit; Enterprise Zone, River Edge | ||
Redevelopment Zone, and Foreign Trade Zone or Sub-Zone. | ||
(1) A taxpayer conducting a trade or business in an | ||
enterprise zone
or a High Impact Business designated by the | ||
Department of Commerce and
Economic Opportunity or for | ||
taxable years ending on or after December 31, 2006, in a | ||
River Edge Redevelopment Zone conducting a trade or | ||
business in a federally designated
Foreign Trade Zone or | ||
Sub-Zone shall be allowed a credit against the tax
imposed | ||
by subsections (a) and (b) of this Section in the amount of | ||
$500
per eligible employee hired to work in the zone during | ||
the taxable year. | ||
(2) To qualify for the credit: | ||
(A) the taxpayer must hire 5 or more eligible | ||
employees to work in an
enterprise zone, River Edge | ||
Redevelopment Zone, or federally designated Foreign | ||
Trade Zone or Sub-Zone
during the taxable year; | ||
(B) the taxpayer's total employment within the | ||
enterprise zone, River Edge Redevelopment Zone, or
| ||
federally designated Foreign Trade Zone or Sub-Zone | ||
must
increase by 5 or more full-time employees beyond | ||
the total employed in that
zone at the end of the | ||
previous tax year for which a jobs tax
credit under | ||
this Section was taken, or beyond the total employed by |
the
taxpayer as of December 31, 1985, whichever is | ||
later; and | ||
(C) the eligible employees must be employed 180 | ||
consecutive days in
order to be deemed hired for | ||
purposes of this subsection. | ||
(3) An "eligible employee" means an employee who is: | ||
(A) Certified by the Department of Commerce and | ||
Economic Opportunity
as "eligible for services" | ||
pursuant to regulations promulgated in
accordance with | ||
Title II of the Job Training Partnership Act, Training
| ||
Services for the Disadvantaged or Title III of the Job | ||
Training Partnership
Act, Employment and Training | ||
Assistance for Dislocated Workers Program. | ||
(B) Hired after the enterprise zone, River Edge | ||
Redevelopment Zone, or federally designated Foreign
| ||
Trade Zone or Sub-Zone was designated or the trade or
| ||
business was located in that zone, whichever is later. | ||
(C) Employed in the enterprise zone, River Edge | ||
Redevelopment Zone, or Foreign Trade Zone or
Sub-Zone. | ||
An employee is employed in an
enterprise zone or | ||
federally designated Foreign Trade Zone or Sub-Zone
if | ||
his services are rendered there or it is the base of
| ||
operations for the services performed. | ||
(D) A full-time employee working 30 or more hours | ||
per week. | ||
(4) For tax years ending on or after December 31, 1985 |
and prior to
December 31, 1988, the credit shall be allowed | ||
for the tax year in which
the eligible employees are hired. | ||
For tax years ending on or after
December 31, 1988, the | ||
credit shall be allowed for the tax year immediately
| ||
following the tax year in which the eligible employees are | ||
hired. 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,
earlier | ||
credit shall be applied first. | ||
(5) The Department of Revenue shall promulgate such | ||
rules and regulations
as may be deemed necessary to carry | ||
out the purposes of this subsection (g). | ||
(6) The credit shall be available for eligible | ||
employees hired on or
after January 1, 1986. | ||
(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). | ||
(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, 2016 | ||
January 1, 2011 , 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 , and no credit may be | ||
carried forward to any taxable year ending on or after January | ||
1, 2011 . | ||
If an unused credit is carried forward to a given year from | ||
2 or more
earlier years, that credit arising in the earliest | ||
year will be applied
first against the tax liability for the | ||
given year. If a tax liability for
the given year still | ||
remains, the credit from the next earliest year will
then be | ||
applied, and so on, until all credits have been used or no tax
| ||
liability for the given year remains. Any remaining unused | ||
credit or
credits then will be carried forward to the next | ||
following year in which a
tax liability is incurred, except | ||
that no credit can be carried forward to
a year which is more | ||
than 5 years after the year in which the expense for
which the | ||
credit is given was incurred. | ||
No inference shall be drawn from this amendatory Act of the | ||
91st General
Assembly in construing this Section for taxable | ||
years beginning before January
1, 1999. | ||
(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 $500. In no event shall a | ||
credit under
this subsection reduce the taxpayer's liability | ||
under this Act to less than
zero. 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. | ||
(Source: P.A. 96-115, eff. 7-31-09; 96-116, eff. 7-31-09; | ||
96-937, eff. 6-23-10; 96-1000, eff. 7-2-10; 96-1496, eff. | ||
1-13-11; 97-2, eff. 5-6-11.)
| ||
(35 ILCS 5/207) (from Ch. 120, par. 2-207)
| ||
Sec. 207. Net Losses.
| ||
(a) If after applying all of the (i) modifications
provided | ||
for in paragraph (2) of Section 203(b), paragraph (2) of | ||
Section
203(c) and paragraph (2) of Section 203(d) and (ii) the | ||
allocation and
apportionment provisions of Article 3 of this
|
Act and subsection (c) of this Section, the taxpayer's net | ||
income results in a loss;
| ||
(1) for any taxable year ending prior to December 31, | ||
1999, such loss
shall be allowed
as a carryover or | ||
carryback deduction in the manner allowed under Section
172 | ||
of the Internal Revenue Code;
| ||
(2) for any taxable year ending on or after December | ||
31, 1999 and prior
to December 31, 2003, such loss
shall be | ||
allowed as a carryback to each of the 2 taxable years | ||
preceding the
taxable year of such loss and shall be a net | ||
operating loss carryover to each of the
20 taxable years | ||
following the taxable year of such loss; and
| ||
(3) for any taxable year ending on or after December | ||
31, 2003, such loss
shall be allowed as a net operating | ||
loss carryover to each of the 12 taxable years
following | ||
the taxable year of such loss, except as provided in | ||
subsection (d).
| ||
(a-5) Election to relinquish carryback and order of | ||
application of
losses.
| ||
(A) For losses incurred in tax years ending prior | ||
to December 31,
2003, the taxpayer may elect to | ||
relinquish the entire carryback period
with respect to | ||
such loss. Such election shall be made in the form and | ||
manner
prescribed by the Department and shall be made | ||
by the due date (including
extensions of time) for | ||
filing the taxpayer's return for the taxable year in
|
which such loss is incurred, and such election, once | ||
made, shall be
irrevocable.
| ||
(B) The entire amount of such loss shall be carried | ||
to the earliest
taxable year to which such loss may be | ||
carried. The amount of such loss which
shall be carried | ||
to each of the other taxable years shall be the excess, | ||
if
any, of the amount of such loss over the sum of the | ||
deductions for carryback or
carryover of such loss | ||
allowable for each of the prior taxable years to which
| ||
such loss may be carried.
| ||
(b) Any loss determined under subsection (a) of this | ||
Section must be carried
back or carried forward in the same | ||
manner for purposes of subsections (a)
and (b) of Section 201 | ||
of this Act as for purposes of subsections (c) and
(d) of | ||
Section 201 of this Act.
| ||
(c) Notwithstanding any other provision of this Act, for | ||
each taxable year ending on or after December 31, 2008, for | ||
purposes of computing the loss for the taxable year under | ||
subsection (a) of this Section and the deduction taken into | ||
account for the taxable year for a net operating loss carryover | ||
under paragraphs (1), (2), and (3) of subsection (a) of this | ||
Section, the loss and net operating loss carryover shall be | ||
reduced in an amount equal to the reduction to the net | ||
operating loss and net operating loss carryover to the taxable | ||
year, respectively, required under Section 108(b)(2)(A) of the | ||
Internal Revenue Code, multiplied by a fraction, the numerator |
of which is the amount of discharge of indebtedness income that | ||
is excluded from gross income for the taxable year (but only if | ||
the taxable year ends on or after December 31, 2008) under | ||
Section 108(a) of the Internal Revenue Code and that would have | ||
been allocated and apportioned to this State under Article 3 of | ||
this Act but for that exclusion, and the denominator of which | ||
is the total amount of discharge of indebtedness income | ||
excluded from gross income under Section 108(a) of the Internal | ||
Revenue Code for the taxable year. The reduction required under | ||
this subsection (c) shall be made after the determination of | ||
Illinois net income for the taxable year in which the | ||
indebtedness is discharged.
| ||
(d) In the case of a corporation (other than a Subchapter S | ||
corporation), no carryover deduction shall be allowed under | ||
this Section for any taxable year ending after December 31, | ||
2010 and prior to December 31, 2012, and no carryover deduction | ||
shall exceed $100,000 for any taxable year ending on or after | ||
December 31, 2012 and prior to December 31, 2014; provided | ||
that, for purposes of determining the taxable years to which a | ||
net loss may be carried under subsection (a) of this Section, | ||
no taxable year for which a deduction is disallowed under this | ||
subsection , or for which the deduction would exceed $100,000 if | ||
not for this subsection, shall be counted. | ||
(e) In the case of a residual interest holder in a real | ||
estate mortgage investment conduit subject to Section 860E of | ||
the Internal Revenue Code, the net loss in subsection (a) shall |
be equal to: | ||
(1) the amount computed under subsection (a), without | ||
regard to this subsection (e), or if that amount is | ||
positive, zero; | ||
(2) minus an amount equal to the amount computed under | ||
subsection (a), without regard to this subsection (e), | ||
minus the amount that would be computed under subsection | ||
(a) if the taxpayer's federal taxable income were computed | ||
without regard to Section 860E of the Internal Revenue Code | ||
and without regard to this subsection (e). | ||
The modification in this subsection (e) is exempt from the | ||
provisions of Section 250. | ||
(Source: P.A. 96-1496, eff. 1-13-11; 97-507, eff. 8-23-11.)
| ||
(35 ILCS 5/250)
| ||
Sec. 250. Sunset of exemptions, credits, and deductions. | ||
(a) The application
of every exemption, credit, and | ||
deduction against tax imposed by this Act that
becomes law | ||
after the effective date of this amendatory Act of 1994 shall | ||
be
limited by a reasonable and appropriate sunset date. A | ||
taxpayer is not
entitled to take the exemption, credit, or | ||
deduction for tax years beginning on
or after the sunset
date. | ||
Except as provided in subsection (b) of this Section, if If a | ||
reasonable and appropriate sunset date is not
specified in the | ||
Public Act that creates the exemption, credit, or deduction, a
| ||
taxpayer shall not be entitled to take the exemption, credit, |
or deduction for
tax years beginning on or after 5 years after | ||
the effective date of the Public
Act creating the
exemption, | ||
credit, or deduction and thereafter; provided, however, that in
| ||
the case of any Public Act authorizing the issuance of | ||
tax-exempt obligations
that does not specify a sunset date for | ||
the exemption or deduction of income
derived from the | ||
obligations, the exemption or deduction shall not terminate
| ||
until after the obligations have been paid by the issuer.
| ||
(b) Notwithstanding the provisions of subsection (a) of | ||
this Section, the sunset date of any exemption, credit, or | ||
deduction that is scheduled to expire in 2011, 2012, or 2013 by | ||
operation of this Section shall be extended by 5 years. | ||
(Source: P.A. 88-660, eff. 9-16-94; 89-460, eff. 5-24-96.)
| ||
(35 ILCS 5/304) (from Ch. 120, par. 3-304)
| ||
Sec. 304. Business income of persons other than residents.
| ||
(a) In general. The business income of a person other than | ||
a
resident shall be allocated to this State if such person's | ||
business
income is derived solely from this State. If a person | ||
other than a
resident derives business income from this State | ||
and one or more other
states, then, for tax years ending on or | ||
before December 30, 1998, and
except as otherwise provided by | ||
this Section, such
person's business income shall be | ||
apportioned to this State by
multiplying the income by a | ||
fraction, the numerator of which is the sum
of the property | ||
factor (if any), the payroll factor (if any) and 200% of the
|
sales factor (if any), and the denominator of which is 4 | ||
reduced by the
number of factors other than the sales factor | ||
which have a denominator
of zero and by an additional 2 if the | ||
sales factor has a denominator of zero.
For tax years ending on | ||
or after December 31, 1998, and except as otherwise
provided by | ||
this Section, persons other than
residents who derive business | ||
income from this State and one or more other
states shall | ||
compute their apportionment factor by weighting their | ||
property,
payroll, and sales factors as provided in
subsection | ||
(h) of this Section.
| ||
(1) Property factor.
| ||
(A) The property factor is a fraction, the numerator of | ||
which is the
average value of the person's real and | ||
tangible personal property owned
or rented and used in the | ||
trade or business in this State during the
taxable year and | ||
the denominator of which is the average value of all
the | ||
person's real and tangible personal property owned or | ||
rented and
used in the trade or business during the taxable | ||
year.
| ||
(B) Property owned by the person is valued at its | ||
original cost.
Property rented by the person is valued at 8 | ||
times the net annual rental
rate. Net annual rental rate is | ||
the annual rental rate paid by the
person less any annual | ||
rental rate received by the person from
sub-rentals.
| ||
(C) The average value of property shall be determined | ||
by averaging
the values at the beginning and ending of the |
taxable year but the
Director may require the averaging of | ||
monthly values during the taxable
year if reasonably | ||
required to reflect properly the average value of the
| ||
person's property.
| ||
(2) Payroll factor.
| ||
(A) The payroll factor is a fraction, the numerator of | ||
which is the
total amount paid in this State during the | ||
taxable year by the person
for compensation, and the | ||
denominator of which is the total compensation
paid | ||
everywhere during the taxable year.
| ||
(B) Compensation is paid in this State if:
| ||
(i) The individual's service is performed entirely | ||
within this
State;
| ||
(ii) The individual's service is performed both | ||
within and without
this State, but the service | ||
performed without this State is incidental
to the | ||
individual's service performed within this State; or
| ||
(iii) Some of the service is performed within this | ||
State and either
the base of operations, or if there is | ||
no base of operations, the place
from which the service | ||
is directed or controlled is within this State,
or the | ||
base of operations or the place from which the service | ||
is
directed or controlled is not in any state in which | ||
some part of the
service is performed, but the | ||
individual's residence is in this State.
| ||
(iv) Compensation paid to nonresident professional |
athletes. | ||
(a) General. The Illinois source income of a | ||
nonresident individual who is a member of a | ||
professional athletic team includes the portion of the | ||
individual's total compensation for services performed | ||
as a member of a professional athletic team during the | ||
taxable year which the number of duty days spent within | ||
this State performing services for the team in any | ||
manner during the taxable year bears to the total | ||
number of duty days spent both within and without this | ||
State during the taxable year. | ||
(b) Travel days. Travel days that do not involve | ||
either a game, practice, team meeting, or other similar | ||
team event are not considered duty days spent in this | ||
State. However, such travel days are considered in the | ||
total duty days spent both within and without this | ||
State. | ||
(c) Definitions. For purposes of this subpart | ||
(iv): | ||
(1) The term "professional athletic team" | ||
includes, but is not limited to, any professional | ||
baseball, basketball, football, soccer, or hockey | ||
team. | ||
(2) The term "member of a professional | ||
athletic team" includes those employees who are | ||
active players, players on the disabled list, and |
any other persons required to travel and who travel | ||
with and perform services on behalf of a | ||
professional athletic team on a regular basis. | ||
This includes, but is not limited to, coaches, | ||
managers, and trainers. | ||
(3) Except as provided in items (C) and (D) of | ||
this subpart (3), the term "duty days" means all | ||
days during the taxable year from the beginning of | ||
the professional athletic team's official | ||
pre-season training period through the last game | ||
in which the team competes or is scheduled to | ||
compete. Duty days shall be counted for the year in | ||
which they occur, including where a team's | ||
official pre-season training period through the | ||
last game in which the team competes or is | ||
scheduled to compete, occurs during more than one | ||
tax year. | ||
(A) Duty days shall also include days on | ||
which a member of a professional athletic team | ||
performs service for a team on a date that does | ||
not fall within the foregoing period (e.g., | ||
participation in instructional leagues, the | ||
"All Star Game", or promotional "caravans"). | ||
Performing a service for a professional | ||
athletic team includes conducting training and | ||
rehabilitation activities, when such |
activities are conducted at team facilities. | ||
(B) Also included in duty days are game | ||
days, practice days, days spent at team | ||
meetings, promotional caravans, preseason | ||
training camps, and days served with the team | ||
through all post-season games in which the team | ||
competes or is scheduled to compete. | ||
(C) Duty days for any person who joins a | ||
team during the period from the beginning of | ||
the professional athletic team's official | ||
pre-season training period through the last | ||
game in which the team competes, or is | ||
scheduled to compete, shall begin on the day | ||
that person joins the team. Conversely, duty | ||
days for any person who leaves a team during | ||
this period shall end on the day that person | ||
leaves the team. Where a person switches teams | ||
during a taxable year, a separate duty-day | ||
calculation shall be made for the period the | ||
person was with each team. | ||
(D) Days for which a member of a | ||
professional athletic team is not compensated | ||
and is not performing services for the team in | ||
any manner, including days when such member of | ||
a professional athletic team has been | ||
suspended without pay and prohibited from |
performing any services for the team, shall not | ||
be treated as duty days. | ||
(E) Days for which a member of a | ||
professional athletic team is on the disabled | ||
list and does not conduct rehabilitation | ||
activities at facilities of the team, and is | ||
not otherwise performing services for the team | ||
in Illinois, shall not be considered duty days | ||
spent in this State. All days on the disabled | ||
list, however, are considered to be included in | ||
total duty days spent both within and without | ||
this State. | ||
(4) The term "total compensation for services | ||
performed as a member of a professional athletic | ||
team" means the total compensation received during | ||
the taxable year for services performed: | ||
(A) from the beginning of the official | ||
pre-season training period through the last | ||
game in which the team competes or is scheduled | ||
to compete during that taxable year; and | ||
(B) during the taxable year on a date which | ||
does not fall within the foregoing period | ||
(e.g., participation in instructional leagues, | ||
the "All Star Game", or promotional caravans). | ||
This compensation shall include, but is not | ||
limited to, salaries, wages, bonuses as described |
in this subpart, and any other type of compensation | ||
paid during the taxable year to a member of a | ||
professional athletic team for services performed | ||
in that year. This compensation does not include | ||
strike benefits, severance pay, termination pay, | ||
contract or option year buy-out payments, | ||
expansion or relocation payments, or any other | ||
payments not related to services performed for the | ||
team. | ||
For purposes of this subparagraph, "bonuses" | ||
included in "total compensation for services | ||
performed as a member of a professional athletic | ||
team" subject to the allocation described in | ||
Section 302(c)(1) are: bonuses earned as a result | ||
of play (i.e., performance bonuses) during the | ||
season, including bonuses paid for championship, | ||
playoff or "bowl" games played by a team, or for | ||
selection to all-star league or other honorary | ||
positions; and bonuses paid for signing a | ||
contract, unless the payment of the signing bonus | ||
is not conditional upon the signee playing any | ||
games for the team or performing any subsequent | ||
services for the team or even making the team, the | ||
signing bonus is payable separately from the | ||
salary and any other compensation, and the signing | ||
bonus is nonrefundable.
|
(3) Sales factor.
| ||
(A) The sales factor is a fraction, the numerator of | ||
which is the
total sales of the person in this State during | ||
the taxable year, and the
denominator of which is the total | ||
sales of the person everywhere during
the taxable year.
| ||
(B) Sales of tangible personal property are in this | ||
State if:
| ||
(i) The property is delivered or shipped to a | ||
purchaser, other than
the United States government, | ||
within this State regardless of the f. o.
b. point or | ||
other conditions of the sale; or
| ||
(ii) The property is shipped from an office, store, | ||
warehouse,
factory or other place of storage in this | ||
State and either the purchaser
is the United States | ||
government or the person is not taxable in the
state of | ||
the purchaser; provided, however, that premises owned | ||
or leased
by a person who has independently contracted | ||
with the seller for the printing
of newspapers, | ||
periodicals or books shall not be deemed to be an | ||
office,
store, warehouse, factory or other place of | ||
storage for purposes of this
Section.
Sales of tangible | ||
personal property are not in this State if the
seller | ||
and purchaser would be members of the same unitary | ||
business group
but for the fact that either the seller | ||
or purchaser is a person with 80%
or more of total | ||
business activity outside of the United States and the
|
property is purchased for resale.
| ||
(B-1) Patents, copyrights, trademarks, and similar | ||
items of intangible
personal property.
| ||
(i) Gross receipts from the licensing, sale, or | ||
other disposition of a
patent, copyright, trademark, | ||
or similar item of intangible personal property, other | ||
than gross receipts governed by paragraph (B-7) of this | ||
item (3),
are in this State to the extent the item is | ||
utilized in this State during the
year the gross | ||
receipts are included in gross income.
| ||
(ii) Place of utilization.
| ||
(I) A patent is utilized in a state to the | ||
extent that it is employed
in production, | ||
fabrication, manufacturing, or other processing in | ||
the state or
to the extent that a patented product | ||
is produced in the state. If a patent is
utilized | ||
in
more than one state, the extent to which it is | ||
utilized in any one state shall
be a fraction equal | ||
to the gross receipts of the licensee or purchaser | ||
from
sales or leases of items produced, | ||
fabricated, manufactured, or processed
within that | ||
state using the patent and of patented items | ||
produced within that
state, divided by the total of | ||
such gross receipts for all states in which the
| ||
patent is utilized.
| ||
(II) A copyright is utilized in a state to the |
extent that printing or
other publication | ||
originates in the state. If a copyright is utilized | ||
in more
than one state, the extent to which it is | ||
utilized in any one state shall be a
fraction equal | ||
to the gross receipts from sales or licenses of | ||
materials
printed or published in that state | ||
divided by the total of such gross receipts
for all | ||
states in which the copyright is utilized.
| ||
(III) Trademarks and other items of intangible | ||
personal property
governed by this paragraph (B-1) | ||
are utilized in the state in which the
commercial | ||
domicile of the licensee or purchaser is located.
| ||
(iii) If the state of utilization of an item of | ||
property governed by
this paragraph (B-1) cannot be | ||
determined from the taxpayer's books and
records or | ||
from the books and records of any person related to the | ||
taxpayer
within the meaning of Section 267(b) of the | ||
Internal Revenue Code, 26 U.S.C.
267, the gross
| ||
receipts attributable to that item shall be excluded | ||
from both the numerator
and the denominator of the | ||
sales factor.
| ||
(B-2) Gross receipts from the license, sale, or other | ||
disposition of
patents, copyrights, trademarks, and | ||
similar items of intangible personal
property, other than | ||
gross receipts governed by paragraph (B-7) of this item | ||
(3), may be included in the numerator or denominator of the |
sales factor
only if gross receipts from licenses, sales, | ||
or other disposition of such items
comprise more than 50% | ||
of the taxpayer's total gross receipts included in gross
| ||
income during the tax year and during each of the 2 | ||
immediately preceding tax
years; provided that, when a | ||
taxpayer is a member of a unitary business group,
such | ||
determination shall be made on the basis of the gross | ||
receipts of the
entire unitary business group.
| ||
(B-5) For taxable years ending on or after December 31, | ||
2008, except as provided in subsections (ii) through (vii), | ||
receipts from the sale of telecommunications service or | ||
mobile telecommunications service are in this State if the | ||
customer's service address is in this State. | ||
(i) For purposes of this subparagraph (B-5), the | ||
following terms have the following meanings: | ||
"Ancillary services" means services that are | ||
associated with or incidental to the provision of | ||
"telecommunications services", including but not | ||
limited to "detailed telecommunications billing", | ||
"directory assistance", "vertical service", and "voice | ||
mail services". | ||
"Air-to-Ground Radiotelephone service" means a | ||
radio service, as that term is defined in 47 CFR 22.99, | ||
in which common carriers are authorized to offer and | ||
provide radio telecommunications service for hire to | ||
subscribers in aircraft. |
"Call-by-call Basis" means any method of charging | ||
for telecommunications services where the price is | ||
measured by individual calls. | ||
"Communications Channel" means a physical or | ||
virtual path of communications over which signals are | ||
transmitted between or among customer channel | ||
termination points. | ||
"Conference bridging service" means an "ancillary | ||
service" that links two or more participants of an | ||
audio or video conference call and may include the | ||
provision of a telephone number. "Conference bridging | ||
service" does not include the "telecommunications | ||
services" used to reach the conference bridge. | ||
"Customer Channel Termination Point" means the | ||
location where the customer either inputs or receives | ||
the communications. | ||
"Detailed telecommunications billing service" | ||
means an "ancillary service" of separately stating | ||
information pertaining to individual calls on a | ||
customer's billing statement. | ||
"Directory assistance" means an "ancillary | ||
service" of providing telephone number information, | ||
and/or address information. | ||
"Home service provider" means the facilities based | ||
carrier or reseller with which the customer contracts | ||
for the provision of mobile telecommunications |
services. | ||
"Mobile telecommunications service" means | ||
commercial mobile radio service, as defined in Section | ||
20.3 of Title 47 of the Code of Federal Regulations as | ||
in effect on June 1, 1999. | ||
"Place of primary use" means the street address | ||
representative of where the customer's use of the | ||
telecommunications service primarily occurs, which | ||
must be the residential street address or the primary | ||
business street address of the customer. In the case of | ||
mobile telecommunications services, "place of primary | ||
use" must be within the licensed service area of the | ||
home service provider. | ||
"Post-paid telecommunication service" means the | ||
telecommunications service obtained by making a | ||
payment on a call-by-call basis either through the use | ||
of a credit card or payment mechanism such as a bank | ||
card, travel card, credit card, or debit card, or by | ||
charge made to a telephone number which is not | ||
associated with the origination or termination of the | ||
telecommunications service. A post-paid calling | ||
service includes telecommunications service, except a | ||
prepaid wireless calling service, that would be a | ||
prepaid calling service except it is not exclusively a | ||
telecommunication service. | ||
"Prepaid telecommunication service" means the |
right to access exclusively telecommunications | ||
services, which must be paid for in advance and which | ||
enables the origination of calls using an access number | ||
or authorization code, whether manually or | ||
electronically dialed, and that is sold in | ||
predetermined units or dollars of which the number | ||
declines with use in a known amount. | ||
"Prepaid Mobile telecommunication service" means a | ||
telecommunications service that provides the right to | ||
utilize mobile wireless service as well as other | ||
non-telecommunication services, including but not | ||
limited to ancillary services, which must be paid for | ||
in advance that is sold in predetermined units or | ||
dollars of which the number declines with use in a | ||
known amount. | ||
"Private communication service" means a | ||
telecommunication service that entitles the customer | ||
to exclusive or priority use of a communications | ||
channel or group of channels between or among | ||
termination points, regardless of the manner in which | ||
such channel or channels are connected, and includes | ||
switching capacity, extension lines, stations, and any | ||
other associated services that are provided in | ||
connection with the use of such channel or channels. | ||
"Service address" means: | ||
(a) The location of the telecommunications |
equipment to which a customer's call is charged and | ||
from which the call originates or terminates, | ||
regardless of where the call is billed or paid; | ||
(b) If the location in line (a) is not known, | ||
service address means the origination point of the | ||
signal of the telecommunications services first | ||
identified by either the seller's | ||
telecommunications system or in information | ||
received by the seller from its service provider | ||
where the system used to transport such signals is | ||
not that of the seller; and | ||
(c) If the locations in line (a) and line (b) | ||
are not known, the service address means the | ||
location of the customer's place of primary use. | ||
"Telecommunications service" means the electronic | ||
transmission, conveyance, or routing of voice, data, | ||
audio, video, or any other information or signals to a | ||
point, or between or among points. The term | ||
"telecommunications service" includes such | ||
transmission, conveyance, or routing in which computer | ||
processing applications are used to act on the form, | ||
code or protocol of the content for purposes of | ||
transmission, conveyance or routing without regard to | ||
whether such service is referred to as voice over | ||
Internet protocol services or is classified by the | ||
Federal Communications Commission as enhanced or value |
added. "Telecommunications service" does not include: | ||
(a) Data processing and information services | ||
that allow data to be generated, acquired, stored, | ||
processed, or retrieved and delivered by an | ||
electronic transmission to a purchaser when such | ||
purchaser's primary purpose for the underlying | ||
transaction is the processed data or information; | ||
(b) Installation or maintenance of wiring or | ||
equipment on a customer's premises; | ||
(c) Tangible personal property; | ||
(d) Advertising, including but not limited to | ||
directory advertising. | ||
(e) Billing and collection services provided | ||
to third parties; | ||
(f) Internet access service; | ||
(g) Radio and television audio and video | ||
programming services, regardless of the medium, | ||
including the furnishing of transmission, | ||
conveyance and routing of such services by the | ||
programming service provider. Radio and television | ||
audio and video programming services shall include | ||
but not be limited to cable service as defined in | ||
47 USC 522(6) and audio and video programming | ||
services delivered by commercial mobile radio | ||
service providers, as defined in 47 CFR 20.3; | ||
(h) "Ancillary services"; or |
(i) Digital products "delivered | ||
electronically", including but not limited to | ||
software, music, video, reading materials or ring | ||
tones. | ||
"Vertical service" means an "ancillary service" | ||
that is offered in connection with one or more | ||
"telecommunications services", which offers advanced | ||
calling features that allow customers to identify | ||
callers and to manage multiple calls and call | ||
connections, including "conference bridging services". | ||
"Voice mail service" means an "ancillary service" | ||
that enables the customer to store, send or receive | ||
recorded messages. "Voice mail service" does not | ||
include any "vertical services" that the customer may | ||
be required to have in order to utilize the "voice mail | ||
service". | ||
(ii) Receipts from the sale of telecommunications | ||
service sold on an individual call-by-call basis are in | ||
this State if either of the following applies: | ||
(a) The call both originates and terminates in | ||
this State. | ||
(b) The call either originates or terminates | ||
in this State and the service address is located in | ||
this State. | ||
(iii) Receipts from the sale of postpaid | ||
telecommunications service at retail are in this State |
if the origination point of the telecommunication | ||
signal, as first identified by the service provider's | ||
telecommunication system or as identified by | ||
information received by the seller from its service | ||
provider if the system used to transport | ||
telecommunication signals is not the seller's, is | ||
located in this State. | ||
(iv) Receipts from the sale of prepaid | ||
telecommunications service or prepaid mobile | ||
telecommunications service at retail are in this State | ||
if the purchaser obtains the prepaid card or similar | ||
means of conveyance at a location in this State. | ||
Receipts from recharging a prepaid telecommunications | ||
service or mobile telecommunications service is in | ||
this State if the purchaser's billing information | ||
indicates a location in this State. | ||
(v) Receipts from the sale of private | ||
communication services are in this State as follows: | ||
(a) 100% of receipts from charges imposed at | ||
each channel termination point in this State. | ||
(b) 100% of receipts from charges for the total | ||
channel mileage between each channel termination | ||
point in this State. | ||
(c) 50% of the total receipts from charges for | ||
service segments when those segments are between 2 | ||
customer channel termination points, 1 of which is |
located in this State and the other is located | ||
outside of this State, which segments are | ||
separately charged. | ||
(d) The receipts from charges for service | ||
segments with a channel termination point located | ||
in this State and in two or more other states, and | ||
which segments are not separately billed, are in | ||
this State based on a percentage determined by | ||
dividing the number of customer channel | ||
termination points in this State by the total | ||
number of customer channel termination points. | ||
(vi) Receipts from charges for ancillary services | ||
for telecommunications service sold to customers at | ||
retail are in this State if the customer's primary | ||
place of use of telecommunications services associated | ||
with those ancillary services is in this State. If the | ||
seller of those ancillary services cannot determine | ||
where the associated telecommunications are located, | ||
then the ancillary services shall be based on the | ||
location of the purchaser. | ||
(vii) Receipts to access a carrier's network or | ||
from the sale of telecommunication services or | ||
ancillary services for resale are in this State as | ||
follows: | ||
(a) 100% of the receipts from access fees | ||
attributable to intrastate telecommunications |
service that both originates and terminates in | ||
this State. | ||
(b) 50% of the receipts from access fees | ||
attributable to interstate telecommunications | ||
service if the interstate call either originates | ||
or terminates in this State. | ||
(c) 100% of the receipts from interstate end | ||
user access line charges, if the customer's | ||
service address is in this State. As used in this | ||
subdivision, "interstate end user access line | ||
charges" includes, but is not limited to, the | ||
surcharge approved by the federal communications | ||
commission and levied pursuant to 47 CFR 69. | ||
(d) Gross receipts from sales of | ||
telecommunication services or from ancillary | ||
services for telecommunications services sold to | ||
other telecommunication service providers for | ||
resale shall be sourced to this State using the | ||
apportionment concepts used for non-resale | ||
receipts of telecommunications services if the | ||
information is readily available to make that | ||
determination. If the information is not readily | ||
available, then the taxpayer may use any other | ||
reasonable and consistent method. | ||
(B-7) For taxable years ending on or after December 31, | ||
2008, receipts from the sale of broadcasting services are |
in this State if the broadcasting services are received in | ||
this State. For purposes of this paragraph (B-7), the | ||
following terms have the following meanings: | ||
"Advertising revenue" means consideration received | ||
by the taxpayer in exchange for broadcasting services | ||
or allowing the broadcasting of commercials or | ||
announcements in connection with the broadcasting of | ||
film or radio programming, from sponsorships of the | ||
programming, or from product placements in the | ||
programming. | ||
"Audience factor" means the ratio that the | ||
audience or subscribers located in this State of a | ||
station, a network, or a cable system bears to the | ||
total audience or total subscribers for that station, | ||
network, or cable system. The audience factor for film | ||
or radio programming shall be determined by reference | ||
to the books and records of the taxpayer or by | ||
reference to published rating statistics provided the | ||
method used by the taxpayer is consistently used from | ||
year to year for this purpose and fairly represents the | ||
taxpayer's activity in this State. | ||
"Broadcast" or "broadcasting" or "broadcasting | ||
services" means the transmission or provision of film | ||
or radio programming, whether through the public | ||
airwaves, by cable, by direct or indirect satellite | ||
transmission, or by any other means of communication, |
either through a station, a network, or a cable system. | ||
"Film" or "film programming" means the broadcast | ||
on television of any and all performances, events, or | ||
productions, including but not limited to news, | ||
sporting events, plays, stories, or other literary, | ||
commercial, educational, or artistic works, either | ||
live or through the use of video tape, disc, or any | ||
other type of format or medium. Each episode of a | ||
series of films produced for television shall | ||
constitute separate "film" notwithstanding that the | ||
series relates to the same principal subject and is | ||
produced during one or more tax periods. | ||
"Radio" or "radio programming" means the broadcast | ||
on radio of any and all performances, events, or | ||
productions, including but not limited to news, | ||
sporting events, plays, stories, or other literary, | ||
commercial, educational, or artistic works, either | ||
live or through the use of an audio tape, disc, or any | ||
other format or medium. Each episode in a series of | ||
radio programming produced for radio broadcast shall | ||
constitute a separate "radio programming" | ||
notwithstanding that the series relates to the same | ||
principal subject and is produced during one or more | ||
tax periods. | ||
(i) In the case of advertising revenue from | ||
broadcasting, the customer is the advertiser and |
the service is received in this State if the | ||
commercial domicile of the advertiser is in this | ||
State. | ||
(ii) In the case where film or radio | ||
programming is broadcast by a station, a network, | ||
or a cable system for a fee or other remuneration | ||
received from the recipient of the broadcast, the | ||
portion of the service that is received in this | ||
State is measured by the portion of the recipients | ||
of the broadcast located in this State. | ||
Accordingly, the fee or other remuneration for | ||
such service that is included in the Illinois | ||
numerator of the sales factor is the total of those | ||
fees or other remuneration received from | ||
recipients in Illinois. For purposes of this | ||
paragraph, a taxpayer may determine the location | ||
of the recipients of its broadcast using the | ||
address of the recipient shown in its contracts | ||
with the recipient or using the billing address of | ||
the recipient in the taxpayer's records. | ||
(iii) In the case where film or radio | ||
programming is broadcast by a station, a network, | ||
or a cable system for a fee or other remuneration | ||
from the person providing the programming, the | ||
portion of the broadcast service that is received | ||
by such station, network, or cable system in this |
State is measured by the portion of recipients of | ||
the broadcast located in this State. Accordingly, | ||
the amount of revenue related to such an | ||
arrangement that is included in the Illinois | ||
numerator of the sales factor is the total fee or | ||
other total remuneration from the person providing | ||
the programming related to that broadcast | ||
multiplied by the Illinois audience factor for | ||
that broadcast. | ||
(iv) In the case where film or radio | ||
programming is provided by a taxpayer that is a | ||
network or station to a customer for broadcast in | ||
exchange for a fee or other remuneration from that | ||
customer the broadcasting service is received at | ||
the location of the office of the customer from | ||
which the services were ordered in the regular | ||
course of the customer's trade or business. | ||
Accordingly, in such a case the revenue derived by | ||
the taxpayer that is included in the taxpayer's | ||
Illinois numerator of the sales factor is the | ||
revenue from such customers who receive the | ||
broadcasting service in Illinois. | ||
(v) In the case where film or radio programming | ||
is provided by a taxpayer that is not a network or | ||
station to another person for broadcasting in | ||
exchange for a fee or other remuneration from that |
person, the broadcasting service is received at | ||
the location of the office of the customer from | ||
which the services were ordered in the regular | ||
course of the customer's trade or business. | ||
Accordingly, in such a case the revenue derived by | ||
the taxpayer that is included in the taxpayer's | ||
Illinois numerator of the sales factor is the | ||
revenue from such customers who receive the | ||
broadcasting service in Illinois.
| ||
(C) For taxable years ending before December 31, 2008, | ||
sales, other than sales governed by paragraphs (B), (B-1), | ||
and (B-2), are in
this State if:
| ||
(i) The income-producing activity is performed in | ||
this State; or
| ||
(ii) The income-producing activity is performed | ||
both within and
without this State and a greater | ||
proportion of the income-producing
activity is | ||
performed within this State than without this State, | ||
based
on performance costs.
| ||
(C-5) For taxable years ending on or after December 31, | ||
2008, sales, other than sales governed by paragraphs (B), | ||
(B-1), (B-2), (B-5), and (B-7), are in this State if any of | ||
the following criteria are met: | ||
(i) Sales from the sale or lease of real property | ||
are in this State if the property is located in this | ||
State. |
(ii) Sales from the lease or rental of tangible | ||
personal property are in this State if the property is | ||
located in this State during the rental period. Sales | ||
from the lease or rental of tangible personal property | ||
that is characteristically moving property, including, | ||
but not limited to, motor vehicles, rolling stock, | ||
aircraft, vessels, or mobile equipment are in this | ||
State to the extent that the property is used in this | ||
State. | ||
(iii) In the case of interest, net gains (but not | ||
less than zero) and other items of income from | ||
intangible personal property, the sale is in this State | ||
if: | ||
(a) in the case of a taxpayer who is a dealer | ||
in the item of intangible personal property within | ||
the meaning of Section 475 of the Internal Revenue | ||
Code, the income or gain is received from a | ||
customer in this State. For purposes of this | ||
subparagraph, a customer is in this State if the | ||
customer is an individual, trust or estate who is a | ||
resident of this State and, for all other | ||
customers, if the customer's commercial domicile | ||
is in this State. Unless the dealer has actual | ||
knowledge of the residence or commercial domicile | ||
of a customer during a taxable year, the customer | ||
shall be deemed to be a customer in this State if |
the billing address of the customer, as shown in | ||
the records of the dealer, is in this State; or | ||
(b) in all other cases, if the | ||
income-producing activity of the taxpayer is | ||
performed in this State or, if the | ||
income-producing activity of the taxpayer is | ||
performed both within and without this State, if a | ||
greater proportion of the income-producing | ||
activity of the taxpayer is performed within this | ||
State than in any other state, based on performance | ||
costs. | ||
(iv) Sales of services are in this State if the | ||
services are received in this State. For the purposes | ||
of this section, gross receipts from the performance of | ||
services provided to a corporation, partnership, or | ||
trust may only be attributed to a state where that | ||
corporation, partnership, or trust has a fixed place of | ||
business. If the state where the services are received | ||
is not readily determinable or is a state where the | ||
corporation, partnership, or trust receiving the | ||
service does not have a fixed place of business, the | ||
services shall be deemed to be received at the location | ||
of the office of the customer from which the services | ||
were ordered in the regular course of the customer's | ||
trade or business. If the ordering office cannot be | ||
determined, the services shall be deemed to be received |
at the office of the customer to which the services are | ||
billed. If the taxpayer is not taxable in the state in | ||
which the services are received, the sale must be | ||
excluded from both the numerator and the denominator of | ||
the sales factor. The Department shall adopt rules | ||
prescribing where specific types of service are | ||
received, including, but not limited to, publishing, | ||
and utility service.
| ||
(D) For taxable years ending on or after December 31, | ||
1995, the following
items of income shall not be included | ||
in the numerator or denominator of the
sales factor: | ||
dividends; amounts included under Section 78 of the | ||
Internal
Revenue Code; and Subpart F income as defined in | ||
Section 952 of the Internal
Revenue Code.
No inference | ||
shall be drawn from the enactment of this paragraph (D) in
| ||
construing this Section for taxable years ending before | ||
December 31, 1995.
| ||
(E) Paragraphs (B-1) and (B-2) shall apply to tax years | ||
ending on or
after December 31, 1999, provided that a | ||
taxpayer may elect to apply the
provisions of these | ||
paragraphs to prior tax years. Such election shall be made
| ||
in the form and manner prescribed by the Department, shall | ||
be irrevocable, and
shall apply to all tax years; provided | ||
that, if a taxpayer's Illinois income
tax liability for any | ||
tax year, as assessed under Section 903 prior to January
1, | ||
1999, was computed in a manner contrary to the provisions |
of paragraphs
(B-1) or (B-2), no refund shall be payable to | ||
the taxpayer for that tax year to
the extent such refund is | ||
the result of applying the provisions of paragraph
(B-1) or | ||
(B-2) retroactively. In the case of a unitary business | ||
group, such
election shall apply to all members of such | ||
group for every tax year such group
is in existence, but | ||
shall not apply to any taxpayer for any period during
which | ||
that taxpayer is not a member of such group.
| ||
(b) Insurance companies.
| ||
(1) In general. Except as otherwise
provided by | ||
paragraph (2), business income of an insurance company for | ||
a
taxable year shall be apportioned to this State by | ||
multiplying such
income by a fraction, the numerator of | ||
which is the direct premiums
written for insurance upon | ||
property or risk in this State, and the
denominator of | ||
which is the direct premiums written for insurance upon
| ||
property or risk everywhere. For purposes of this | ||
subsection, the term
"direct premiums written" means the | ||
total amount of direct premiums
written, assessments and | ||
annuity considerations as reported for the
taxable year on | ||
the annual statement filed by the company with the
Illinois | ||
Director of Insurance in the form approved by the National
| ||
Convention of Insurance Commissioners
or such other form as | ||
may be
prescribed in lieu thereof.
| ||
(2) Reinsurance. If the principal source of premiums | ||
written by an
insurance company consists of premiums for |
reinsurance accepted by it,
the business income of such | ||
company shall be apportioned to this State
by multiplying | ||
such income by a fraction, the numerator of which is the
| ||
sum of (i) direct premiums written for insurance upon | ||
property or risk
in this State, plus (ii) premiums written | ||
for reinsurance accepted in
respect of property or risk in | ||
this State, and the denominator of which
is the sum of | ||
(iii) direct premiums written for insurance upon property
| ||
or risk everywhere, plus (iv) premiums written for | ||
reinsurance accepted
in respect of property or risk | ||
everywhere. For purposes of this
paragraph, premiums | ||
written for reinsurance accepted in respect of
property or | ||
risk in this State, whether or not otherwise determinable,
| ||
may, at the election of the company, be determined on the | ||
basis of the
proportion which premiums written for | ||
reinsurance accepted from
companies commercially domiciled | ||
in Illinois bears to premiums written
for reinsurance | ||
accepted from all sources, or, alternatively, in the
| ||
proportion which the sum of the direct premiums written for | ||
insurance
upon property or risk in this State by each | ||
ceding company from which
reinsurance is accepted bears to | ||
the sum of the total direct premiums
written by each such | ||
ceding company for the taxable year. The election made by a | ||
company under this paragraph for its first taxable year | ||
ending on or after December 31, 2011, shall be binding for | ||
that company for that taxable year and for all subsequent |
taxable years, and may be altered only with the written | ||
permission of the Department, which shall not be | ||
unreasonably withheld.
| ||
(c) Financial organizations.
| ||
(1) In general. For taxable years ending before | ||
December 31, 2008, business income of a financial
| ||
organization shall be apportioned to this State by | ||
multiplying such
income by a fraction, the numerator of | ||
which is its business income from
sources within this | ||
State, and the denominator of which is its business
income | ||
from all sources. For the purposes of this subsection, the
| ||
business income of a financial organization from sources | ||
within this
State is the sum of the amounts referred to in | ||
subparagraphs (A) through
(E) following, but excluding the | ||
adjusted income of an international banking
facility as | ||
determined in paragraph (2):
| ||
(A) Fees, commissions or other compensation for | ||
financial services
rendered within this State;
| ||
(B) Gross profits from trading in stocks, bonds or | ||
other securities
managed within this State;
| ||
(C) Dividends, and interest from Illinois | ||
customers, which are received
within this State;
| ||
(D) Interest charged to customers at places of | ||
business maintained
within this State for carrying | ||
debit balances of margin accounts,
without deduction | ||
of any costs incurred in carrying such accounts; and
|
(E) Any other gross income resulting from the | ||
operation as a
financial organization within this | ||
State. In computing the amounts
referred to in | ||
paragraphs (A) through (E) of this subsection, any | ||
amount
received by a member of an affiliated group | ||
(determined under Section
1504(a) of the Internal | ||
Revenue Code but without reference to whether
any such | ||
corporation is an "includible corporation" under | ||
Section
1504(b) of the Internal Revenue Code) from | ||
another member of such group
shall be included only to | ||
the extent such amount exceeds expenses of the
| ||
recipient directly related thereto.
| ||
(2) International Banking Facility. For taxable years | ||
ending before December 31, 2008:
| ||
(A) Adjusted Income. The adjusted income of an | ||
international banking
facility is its income reduced | ||
by the amount of the floor amount.
| ||
(B) Floor Amount. The floor amount shall be the | ||
amount, if any,
determined
by multiplying the income of | ||
the international banking facility by a fraction,
not | ||
greater than one, which is determined as follows:
| ||
(i) The numerator shall be:
| ||
The average aggregate, determined on a | ||
quarterly basis, of the
financial
organization's | ||
loans to banks in foreign countries, to foreign | ||
domiciled
borrowers (except where secured |
primarily by real estate) and to foreign
| ||
governments and other foreign official | ||
institutions, as reported for its
branches, | ||
agencies and offices within the state on its | ||
"Consolidated Report
of Condition", Schedule A, | ||
Lines 2.c., 5.b., and 7.a., which was filed with
| ||
the Federal Deposit Insurance Corporation and | ||
other regulatory authorities,
for the year 1980, | ||
minus
| ||
The average aggregate, determined on a | ||
quarterly basis, of such loans
(other
than loans of | ||
an international banking facility), as reported by | ||
the financial
institution for its branches, | ||
agencies and offices within the state, on
the | ||
corresponding Schedule and lines of the | ||
Consolidated Report of Condition
for the current | ||
taxable year, provided, however, that in no case | ||
shall the
amount determined in this clause (the | ||
subtrahend) exceed the amount determined
in the | ||
preceding clause (the minuend); and
| ||
(ii) the denominator shall be the average | ||
aggregate, determined on a
quarterly basis, of the | ||
international banking facility's loans to banks in
| ||
foreign countries, to foreign domiciled borrowers | ||
(except where secured
primarily by real estate) | ||
and to foreign governments and other foreign
|
official institutions, which were recorded in its | ||
financial accounts for
the current taxable year.
| ||
(C) Change to Consolidated Report of Condition and | ||
in Qualification.
In the event the Consolidated Report | ||
of Condition which is filed with the
Federal Deposit | ||
Insurance Corporation and other regulatory authorities | ||
is
altered so that the information required for | ||
determining the floor amount
is not found on Schedule | ||
A, lines 2.c., 5.b. and 7.a., the financial
institution | ||
shall notify the Department and the Department may, by
| ||
regulations or otherwise, prescribe or authorize the | ||
use of an alternative
source for such information. The | ||
financial institution shall also notify
the Department | ||
should its international banking facility fail to | ||
qualify as
such, in whole or in part, or should there | ||
be any amendment or change to
the Consolidated Report | ||
of Condition, as originally filed, to the extent
such | ||
amendment or change alters the information used in | ||
determining the floor
amount.
| ||
(3) For taxable years ending on or after December 31, | ||
2008, the business income of a financial organization shall | ||
be apportioned to this State by multiplying such income by | ||
a fraction, the numerator of which is its gross receipts | ||
from sources in this State or otherwise attributable to | ||
this State's marketplace and the denominator of which is | ||
its gross receipts everywhere during the taxable year. |
"Gross receipts" for purposes of this subparagraph (3) | ||
means gross income, including net taxable gain on | ||
disposition of assets, including securities and money | ||
market instruments, when derived from transactions and | ||
activities in the regular course of the financial | ||
organization's trade or business. The following examples | ||
are illustrative:
| ||
(i) Receipts from the lease or rental of real or | ||
tangible personal property are in this State if the | ||
property is located in this State during the rental | ||
period. Receipts from the lease or rental of tangible | ||
personal property that is characteristically moving | ||
property, including, but not limited to, motor | ||
vehicles, rolling stock, aircraft, vessels, or mobile | ||
equipment are from sources in this State to the extent | ||
that the property is used in this State. | ||
(ii) Interest income, commissions, fees, gains on | ||
disposition, and other receipts from assets in the | ||
nature of loans that are secured primarily by real | ||
estate or tangible personal property are from sources | ||
in this State if the security is located in this State. | ||
(iii) Interest income, commissions, fees, gains on | ||
disposition, and other receipts from consumer loans | ||
that are not secured by real or tangible personal | ||
property are from sources in this State if the debtor | ||
is a resident of this State. |
(iv) Interest income, commissions, fees, gains on | ||
disposition, and other receipts from commercial loans | ||
and installment obligations that are not secured by | ||
real or tangible personal property are from sources in | ||
this State if the proceeds of the loan are to be | ||
applied in this State. If it cannot be determined where | ||
the funds are to be applied, the income and receipts | ||
are from sources in this State if the office of the | ||
borrower from which the loan was negotiated in the | ||
regular course of business is located in this State. If | ||
the location of this office cannot be determined, the | ||
income and receipts shall be excluded from the | ||
numerator and denominator of the sales factor.
| ||
(v) Interest income, fees, gains on disposition, | ||
service charges, merchant discount income, and other | ||
receipts from credit card receivables are from sources | ||
in this State if the card charges are regularly billed | ||
to a customer in this State. | ||
(vi) Receipts from the performance of services, | ||
including, but not limited to, fiduciary, advisory, | ||
and brokerage services, are in this State if the | ||
services are received in this State within the meaning | ||
of subparagraph (a)(3)(C-5)(iv) of this Section. | ||
(vii) Receipts from the issuance of travelers | ||
checks and money orders are from sources in this State | ||
if the checks and money orders are issued from a |
location within this State. | ||
(viii) Receipts from investment assets and | ||
activities and trading assets and activities are | ||
included in the receipts factor as follows: | ||
(1) Interest, dividends, net gains (but not | ||
less than zero) and other income from investment | ||
assets and activities from trading assets and | ||
activities shall be included in the receipts | ||
factor. Investment assets and activities and | ||
trading assets and activities include but are not | ||
limited to: investment securities; trading account | ||
assets; federal funds; securities purchased and | ||
sold under agreements to resell or repurchase; | ||
options; futures contracts; forward contracts; | ||
notional principal contracts such as swaps; | ||
equities; and foreign currency transactions. With | ||
respect to the investment and trading assets and | ||
activities described in subparagraphs (A) and (B) | ||
of this paragraph, the receipts factor shall | ||
include the amounts described in such | ||
subparagraphs. | ||
(A) The receipts factor shall include the | ||
amount by which interest from federal funds | ||
sold and securities purchased under resale | ||
agreements exceeds interest expense on federal | ||
funds purchased and securities sold under |
repurchase agreements. | ||
(B) The receipts factor shall include the | ||
amount by which interest, dividends, gains and | ||
other income from trading assets and | ||
activities, including but not limited to | ||
assets and activities in the matched book, in | ||
the arbitrage book, and foreign currency | ||
transactions, exceed amounts paid in lieu of | ||
interest, amounts paid in lieu of dividends, | ||
and losses from such assets and activities. | ||
(2) The numerator of the receipts factor | ||
includes interest, dividends, net gains (but not | ||
less than zero), and other income from investment | ||
assets and activities and from trading assets and | ||
activities described in paragraph (1) of this | ||
subsection that are attributable to this State. | ||
(A) The amount of interest, dividends, net | ||
gains (but not less than zero), and other | ||
income from investment assets and activities | ||
in the investment account to be attributed to | ||
this State and included in the numerator is | ||
determined by multiplying all such income from | ||
such assets and activities by a fraction, the | ||
numerator of which is the gross income from | ||
such assets and activities which are properly | ||
assigned to a fixed place of business of the |
taxpayer within this State and the denominator | ||
of which is the gross income from all such | ||
assets and activities. | ||
(B) The amount of interest from federal | ||
funds sold and purchased and from securities | ||
purchased under resale agreements and | ||
securities sold under repurchase agreements | ||
attributable to this State and included in the | ||
numerator is determined by multiplying the | ||
amount described in subparagraph (A) of | ||
paragraph (1) of this subsection from such | ||
funds and such securities by a fraction, the | ||
numerator of which is the gross income from | ||
such funds and such securities which are | ||
properly assigned to a fixed place of business | ||
of the taxpayer within this State and the | ||
denominator of which is the gross income from | ||
all such funds and such securities. | ||
(C) The amount of interest, dividends, | ||
gains, and other income from trading assets and | ||
activities, including but not limited to | ||
assets and activities in the matched book, in | ||
the arbitrage book and foreign currency | ||
transactions (but excluding amounts described | ||
in subparagraphs (A) or (B) of this paragraph), | ||
attributable to this State and included in the |
numerator is determined by multiplying the | ||
amount described in subparagraph (B) of | ||
paragraph (1) of this subsection by a fraction, | ||
the numerator of which is the gross income from | ||
such trading assets and activities which are | ||
properly assigned to a fixed place of business | ||
of the taxpayer within this State and the | ||
denominator of which is the gross income from | ||
all such assets and activities. | ||
(D) Properly assigned, for purposes of | ||
this paragraph (2) of this subsection, means | ||
the investment or trading asset or activity is | ||
assigned to the fixed place of business with | ||
which it has a preponderance of substantive | ||
contacts. An investment or trading asset or | ||
activity assigned by the taxpayer to a fixed | ||
place of business without the State shall be | ||
presumed to have been properly assigned if: | ||
(i) the taxpayer has assigned, in the | ||
regular course of its business, such asset | ||
or activity on its records to a fixed place | ||
of business consistent with federal or | ||
state regulatory requirements; | ||
(ii) such assignment on its records is | ||
based upon substantive contacts of the | ||
asset or activity to such fixed place of |
business; and | ||
(iii) the taxpayer uses such records | ||
reflecting assignment of such assets or | ||
activities for the filing of all state and | ||
local tax returns for which an assignment | ||
of such assets or activities to a fixed | ||
place of business is required. | ||
(E) The presumption of proper assignment | ||
of an investment or trading asset or activity | ||
provided in subparagraph (D) of paragraph (2) | ||
of this subsection may be rebutted upon a | ||
showing by the Department, supported by a | ||
preponderance of the evidence, that the | ||
preponderance of substantive contacts | ||
regarding such asset or activity did not occur | ||
at the fixed place of business to which it was | ||
assigned on the taxpayer's records. If the | ||
fixed place of business that has a | ||
preponderance of substantive contacts cannot | ||
be determined for an investment or trading | ||
asset or activity to which the presumption in | ||
subparagraph (D) of paragraph (2) of this | ||
subsection does not apply or with respect to | ||
which that presumption has been rebutted, that | ||
asset or activity is properly assigned to the | ||
state in which the taxpayer's commercial |
domicile is located. For purposes of this | ||
subparagraph (E), it shall be presumed, | ||
subject to rebuttal, that taxpayer's | ||
commercial domicile is in the state of the | ||
United States or the District of Columbia to | ||
which the greatest number of employees are | ||
regularly connected with the management of the | ||
investment or trading income or out of which | ||
they are working, irrespective of where the | ||
services of such employees are performed, as of | ||
the last day of the taxable year.
| ||
(4) (Blank). | ||
(5) (Blank). | ||
(c-1) Federally regulated exchanges. For taxable years | ||
ending on or after December 31, 2012, business income of a | ||
federally regulated exchange shall, at the option of the | ||
federally regulated exchange, be apportioned to this State by | ||
multiplying such income by a fraction, the numerator of which | ||
is its business income from sources within this State, and the | ||
denominator of which is its business income from all sources. | ||
For purposes of this subsection, the business income within | ||
this State of a federally regulated exchange is the sum of the | ||
following: | ||
(1) Receipts attributable to transactions executed on | ||
a physical trading floor if that physical trading floor is | ||
located in this State. |
(2) Receipts attributable to all other matching, | ||
execution, or clearing transactions, including without | ||
limitation receipts from the provision of matching, | ||
execution, or clearing services to another entity, | ||
multiplied by (i) for taxable years ending on or after | ||
December 31, 2012 but before December 31, 2013, 63.77%; and | ||
(ii) for taxable years ending on or after December 31, | ||
2013, 27.54%. | ||
(3) All other receipts not governed by subparagraphs | ||
(1) or (2) of this subsection (c-1), to the extent the | ||
receipts would be characterized as "sales in this State" | ||
under item (3) of subsection (a) of this Section. | ||
"Federally regulated exchange" means (i) a "registered | ||
entity" within the meaning of 7 U.S.C. Section 1a(40)(A), (B), | ||
or (C), (ii) an "exchange" or "clearing agency" within the | ||
meaning of 15 U.S.C. Section 78c (a)(1) or (23), (iii) any such | ||
entities regulated under any successor regulatory structure to | ||
the foregoing, and (iv) all taxpayers who are members of the | ||
same unitary business group as a federally regulated exchange, | ||
determined without regard to the prohibition in Section | ||
1501(a)(27) of this Act against including in a unitary business | ||
group taxpayers who are ordinarily required to apportion | ||
business income under different subsections of this Section; | ||
provided that this subparagraph (iv) shall apply only if 50% or | ||
more of the business receipts of the unitary business group | ||
determined by application of this subparagraph (iv) for the |
taxable year are attributable to the matching, execution, or | ||
clearing of transactions conducted by an entity described in | ||
subparagraph (i), (ii), or (iii) of this paragraph. | ||
In no event shall the Illinois apportionment percentage | ||
computed in accordance with this subsection (c-1) for any | ||
taxpayer for any tax year be less than the Illinois | ||
apportionment percentage computed under this subsection (c-1) | ||
for that taxpayer for the first full tax year ending on or | ||
after December 31, 2013 for which this subsection (c-1) applied | ||
to the taxpayer. | ||
(d) Transportation services. For taxable years ending | ||
before December 31, 2008, business income derived from | ||
furnishing
transportation services shall be apportioned to | ||
this State in accordance
with paragraphs (1) and (2):
| ||
(1) Such business income (other than that derived from
| ||
transportation by pipeline) shall be apportioned to this | ||
State by
multiplying such income by a fraction, the | ||
numerator of which is the
revenue miles of the person in | ||
this State, and the denominator of which
is the revenue | ||
miles of the person everywhere. For purposes of this
| ||
paragraph, a revenue mile is the transportation of 1 | ||
passenger or 1 net
ton of freight the distance of 1 mile | ||
for a consideration. Where a
person is engaged in the | ||
transportation of both passengers and freight,
the | ||
fraction above referred to shall be determined by means of | ||
an
average of the passenger revenue mile fraction and the |
freight revenue
mile fraction, weighted to reflect the | ||
person's
| ||
(A) relative railway operating income from total | ||
passenger and total
freight service, as reported to the | ||
Interstate Commerce Commission, in
the case of | ||
transportation by railroad, and
| ||
(B) relative gross receipts from passenger and | ||
freight
transportation, in case of transportation | ||
other than by railroad.
| ||
(2) Such business income derived from transportation | ||
by pipeline
shall be apportioned to this State by | ||
multiplying such income by a
fraction, the numerator of | ||
which is the revenue miles of the person in
this State, and | ||
the denominator of which is the revenue miles of the
person | ||
everywhere. For the purposes of this paragraph, a revenue | ||
mile is
the transportation by pipeline of 1 barrel of oil, | ||
1,000 cubic feet of
gas, or of any specified quantity of | ||
any other substance, the distance
of 1 mile for a | ||
consideration.
| ||
(3) For taxable years ending on or after December 31, | ||
2008, business income derived from providing | ||
transportation services other than airline services shall | ||
be apportioned to this State by using a fraction, (a) the | ||
numerator of which shall be (i) all receipts from any | ||
movement or shipment of people, goods, mail, oil, gas, or | ||
any other substance (other than by airline) that both |
originates and terminates in this State, plus (ii) that | ||
portion of the person's gross receipts from movements or | ||
shipments of people, goods, mail, oil, gas, or any other | ||
substance (other than by airline) that originates in one | ||
state or jurisdiction and terminates in another state or | ||
jurisdiction, that is determined by the ratio that the | ||
miles traveled in this State bears to total miles | ||
everywhere and (b) the denominator of which shall be all | ||
revenue derived from the movement or shipment of people, | ||
goods, mail, oil, gas, or any other substance (other than | ||
by airline). Where a taxpayer is engaged in the | ||
transportation of both passengers and freight, the | ||
fraction above referred to shall first be determined | ||
separately for passenger miles and freight miles. Then an | ||
average of the passenger miles fraction and the freight | ||
miles fraction shall be weighted to reflect the taxpayer's: | ||
(A) relative railway operating income from total | ||
passenger and total freight service, as reported to the | ||
Surface Transportation Board, in the case of | ||
transportation by railroad; and
| ||
(B) relative gross receipts from passenger and | ||
freight transportation, in case of transportation | ||
other than by railroad.
| ||
(4) For taxable years ending on or after December 31, | ||
2008, business income derived from furnishing airline
| ||
transportation services shall be apportioned to this State |
by
multiplying such income by a fraction, the numerator of | ||
which is the
revenue miles of the person in this State, and | ||
the denominator of which
is the revenue miles of the person | ||
everywhere. For purposes of this
paragraph, a revenue mile | ||
is the transportation of one passenger or one net
ton of | ||
freight the distance of one mile for a consideration. If a
| ||
person is engaged in the transportation of both passengers | ||
and freight,
the fraction above referred to shall be | ||
determined by means of an
average of the passenger revenue | ||
mile fraction and the freight revenue
mile fraction, | ||
weighted to reflect the person's relative gross receipts | ||
from passenger and freight
airline transportation.
| ||
(e) Combined apportionment. Where 2 or more persons are | ||
engaged in
a unitary business as described in subsection | ||
(a)(27) of
Section 1501,
a part of which is conducted in this | ||
State by one or more members of the
group, the business income | ||
attributable to this State by any such member
or members shall | ||
be apportioned by means of the combined apportionment method.
| ||
(f) Alternative allocation. If the allocation and | ||
apportionment
provisions of subsections (a) through (e) and of | ||
subsection (h) do not
fairly represent the
extent of a person's | ||
business activity in this State, the person may
petition for, | ||
or the Director may, without a petition, permit or require, in | ||
respect of all or any part
of the person's business activity, | ||
if reasonable:
| ||
(1) Separate accounting;
|
(2) The exclusion of any one or more factors;
| ||
(3) The inclusion of one or more additional factors | ||
which will
fairly represent the person's business | ||
activities in this State; or
| ||
(4) The employment of any other method to effectuate an | ||
equitable
allocation and apportionment of the person's | ||
business income.
| ||
(g) Cross reference. For allocation of business income by | ||
residents,
see Section 301(a).
| ||
(h) For tax years ending on or after December 31, 1998, the | ||
apportionment
factor of persons who apportion their business | ||
income to this State under
subsection (a) shall be equal to:
| ||
(1) for tax years ending on or after December 31, 1998 | ||
and before December
31, 1999, 16 2/3% of the property | ||
factor plus 16 2/3% of the payroll factor
plus
66 2/3% of | ||
the sales factor;
| ||
(2) for tax years ending on or after December 31, 1999 | ||
and before December
31,
2000, 8 1/3% of the property factor | ||
plus 8 1/3% of the payroll factor plus 83
1/3%
of the sales | ||
factor;
| ||
(3) for tax years ending on or after December 31, 2000, | ||
the sales factor.
| ||
If, in any tax year ending on or after December 31, 1998 and | ||
before December
31, 2000, the denominator of the payroll, | ||
property, or sales factor is zero,
the apportionment
factor | ||
computed in paragraph (1) or (2) of this subsection for that |
year shall
be divided by an amount equal to 100% minus the | ||
percentage weight given to each
factor whose denominator is | ||
equal to zero.
| ||
(Source: P.A. 96-763, eff. 8-25-09; 97-507, eff. 8-23-11.)
| ||
(35 ILCS 5/804) (from Ch. 120, par. 8-804)
| ||
Sec. 804. Failure to Pay Estimated Tax.
| ||
(a) In general. In case of any underpayment of estimated | ||
tax by a
taxpayer, except as provided in subsection (d) or (e), | ||
the taxpayer shall
be liable to a penalty in an amount | ||
determined at the rate prescribed by
Section 3-3 of the Uniform | ||
Penalty and Interest Act upon the amount of the
underpayment | ||
(determined under subsection (b)) for each required | ||
installment.
| ||
(b) Amount of underpayment. For purposes of subsection (a), | ||
the
amount of the underpayment shall be the excess of:
| ||
(1) the amount of the installment which would be | ||
required to be paid
under subsection (c), over
| ||
(2) the amount, if any, of the installment paid on or | ||
before the
last date prescribed for payment.
| ||
(c) Amount of Required Installments.
| ||
(1) Amount.
| ||
(A) In General. Except as provided in paragraphs | ||
paragraph (2) and (3) , the amount of any
required | ||
installment shall be 25% of the required annual | ||
payment.
|
(B) Required Annual Payment. For purposes of | ||
subparagraph (A),
the term "required annual payment" | ||
means the lesser of :
| ||
(i) 90% of the tax shown on the return for the | ||
taxable year, or
if no return is filed, 90% of the | ||
tax for such year ; ,
| ||
(ii) for installments due prior to February 1, | ||
2011, and after January 31, 2012, 100% of the tax | ||
shown on the return of the taxpayer for the
| ||
preceding taxable year if a return showing a | ||
liability for tax was filed by
the taxpayer for the | ||
preceding taxable year and such preceding year was | ||
a
taxable year of 12 months; or
| ||
(iii) for installments due after January 31, | ||
2011, and prior to February 1, 2012, 150% of the | ||
tax shown on the return of the taxpayer for the | ||
preceding taxable year if a return showing a | ||
liability for tax was filed by the taxpayer for the | ||
preceding taxable year and such preceding year was | ||
a taxable year of 12 months.
| ||
(2) Lower Required Installment where Annualized Income | ||
Installment is Less
Than Amount Determined Under Paragraph | ||
(1).
| ||
(A) In General. In the case of any required | ||
installment if a taxpayer
establishes that the | ||
annualized income installment is less than the amount
|
determined under paragraph (1),
| ||||||||
(i) the amount of such required installment | ||||||||
shall be the annualized
income installment, and
| ||||||||
(ii) any reduction in a required installment | ||||||||
resulting from the
application of this | ||||||||
subparagraph shall be recaptured by increasing the
| ||||||||
amount of the next required installment determined | ||||||||
under paragraph (1) by
the amount of such | ||||||||
reduction, and by increasing subsequent required
| ||||||||
installments to the extent that the reduction has | ||||||||
not previously been
recaptured under this clause.
| ||||||||
(B) Determination of Annualized Income | ||||||||
Installment. In the case of
any required installment, | ||||||||
the annualized income installment is the
excess, if | ||||||||
any, of :
| ||||||||
(i) an amount equal to the applicable | ||||||||
percentage of the tax for the
taxable year computed | ||||||||
by placing on an annualized basis the net income | ||||||||
for
months in the taxable year ending before the | ||||||||
due date for the installment, over
| ||||||||
(ii) the aggregate amount of any prior | ||||||||
required installments for
the taxable year.
| ||||||||
(C) Applicable Percentage.
| ||||||||
|
| ||||||||
(D) Annualized Net Income; Individuals. For | ||||||||
individuals, net
income shall be placed on an | ||||||||
annualized basis by:
| ||||||||
(i) multiplying by 12, or in the case of a | ||||||||
taxable year of
less than 12 months, by the number | ||||||||
of months in the taxable year, the
net income | ||||||||
computed without regard to the standard exemption | ||||||||
for the months
in the taxable
year ending before | ||||||||
the month in which the installment is required to | ||||||||
be paid;
| ||||||||
(ii) dividing the resulting amount by the | ||||||||
number of months in the
taxable year ending before | ||||||||
the month in which such installment date falls; and
| ||||||||
(iii) deducting from such amount the standard | ||||||||
exemption allowable for
the taxable year, such | ||||||||
standard exemption being determined as of the last
| ||||||||
date prescribed for payment of the installment.
| ||||||||
(E) Annualized Net Income; Corporations. For | ||||||||
corporations,
net income shall be placed on an | ||||||||
annualized basis by multiplying
by 12 the taxable | ||||||||
income
| ||||||||
(i) for the first 3 months of the taxable year, | ||||||||
in the case of the
installment required to be paid |
in the 4th month,
| ||
(ii) for the first 3 months or for the first 5 | ||
months of the taxable
year, in the case of the | ||
installment required to be paid in the 6th month,
| ||
(iii) for the first 6 months or for the first 8 | ||
months of the taxable
year, in the case of the | ||
installment required to be paid in the 9th month, | ||
and
| ||
(iv) for the first 9 months or for the first 11 | ||
months of the taxable
year, in the case of the | ||
installment required to be paid in the 12th month
| ||
of the taxable year,
| ||
then dividing the resulting amount by the number of | ||
months in the taxable
year (3, 5, 6, 8, 9, or 11 as the | ||
case may be).
| ||
(3) Notwithstanding any other provision of this | ||
subsection (c), in the case of a federally regulated | ||
exchange that elects to apportion its income under Section | ||
304(c-1) of this Act, the amount of each required | ||
installment due prior to June 30 of the first taxable year | ||
to which the election applies shall be 25% of the tax that | ||
would have been shown on the return for that taxable year | ||
if the taxpayer had not made such election. | ||
(d) Exceptions. Notwithstanding the provisions of the | ||
preceding
subsections, the penalty imposed by subsection (a) | ||
shall not
be imposed if the taxpayer was not required to file |
an Illinois income
tax return for the preceding taxable year, | ||
or, for individuals, if the
taxpayer had no tax liability for | ||
the preceding taxable year and such year
was a taxable year of | ||
12 months.
The penalty imposed by subsection (a) shall
also not | ||
be imposed on any underpayments of estimated tax due before the
| ||
effective date of this amendatory Act of 1998 which | ||
underpayments are solely
attributable to the change in | ||
apportionment from subsection (a) to subsection
(h) of Section | ||
304. The provisions of this amendatory Act of 1998 apply to tax
| ||
years ending on or after December 31, 1998.
| ||
(e) The penalty imposed for underpayment of estimated tax | ||
by subsection
(a) of this Section shall not be imposed to the | ||
extent that the Director
or his or her designate determines, | ||
pursuant to Section 3-8 of the Uniform Penalty
and Interest Act | ||
that the penalty should not be imposed.
| ||
(f) Definition of tax. For purposes of subsections (b) and | ||
(c),
the term "tax" means the excess of the tax imposed under | ||
Article 2 of
this Act, over the amounts credited against such | ||
tax under Sections
601(b) (3) and (4).
| ||
(g) Application of Section in case of tax withheld under | ||
Article 7.
For purposes of applying this Section:
| ||
(1) tax
withheld from compensation for the taxable year | ||
shall be deemed a payment
of estimated tax, and an equal | ||
part of such amount shall be deemed paid
on each | ||
installment date for such taxable year, unless the taxpayer
| ||
establishes the dates on which all amounts were actually |
withheld, in
which case the amounts so withheld shall be | ||
deemed payments of estimated
tax on the dates on which such | ||
amounts were actually withheld;
| ||
(2) amounts timely paid by a partnership, Subchapter S | ||
corporation, or trust on behalf of a partner, shareholder, | ||
or beneficiary pursuant to subsection (f) of Section 502 or | ||
Section 709.5 and claimed as a payment of estimated tax | ||
shall be deemed a payment of estimated tax made on the last | ||
day of the taxable year of the partnership, Subchapter S | ||
corporation, or trust for which the income from the | ||
withholding is made was computed; and | ||
(3) all other amounts pursuant to Article 7 shall be | ||
deemed a payment of estimated tax on the date the payment | ||
is made to the taxpayer of the amount from which the tax is | ||
withheld.
| ||
(g-5) Amounts withheld under the State Salary and Annuity | ||
Withholding
Act. An individual who has amounts withheld under | ||
paragraph (10) of Section 4
of the State Salary and Annuity | ||
Withholding Act may elect to have those amounts
treated as | ||
payments of estimated tax made on the dates on which those | ||
amounts
are actually withheld.
| ||
(i) Short taxable year. The application of this Section to
| ||
taxable years of less than 12 months shall be in accordance | ||
with
regulations prescribed by the Department.
| ||
The changes in this Section made by Public Act 84-127 shall | ||
apply to
taxable years ending on or after January 1, 1986.
|
(Source: P.A. 96-1496, eff. 1-13-11; 97-507, eff. 8-23-11; | ||
revised 11-18-11.)
| ||
(35 ILCS 5/1501) (from Ch. 120, par. 15-1501)
| ||
Sec. 1501. Definitions.
| ||
(a) In general. When used in this Act, where not
otherwise | ||
distinctly expressed or manifestly incompatible with the | ||
intent
thereof:
| ||
(1) Business income. The term "business income" means | ||
all income that may be treated as apportionable business | ||
income under the Constitution of the United States. | ||
Business income is net of the deductions allocable thereto. | ||
Such term does not include compensation
or the deductions | ||
allocable thereto.
For each taxable year beginning on or | ||
after January 1, 2003, a taxpayer may
elect to treat all | ||
income other than compensation as business income. This
| ||
election shall be made in accordance with rules adopted by | ||
the Department and,
once made, shall be irrevocable.
| ||
(1.5) Captive real estate investment trust:
| ||
(A) The term "captive real estate investment | ||
trust" means a corporation, trust, or association:
| ||
(i) that is considered a real estate | ||
investment trust for the taxable year under | ||
Section 856 of the Internal Revenue Code;
| ||
(ii) the certificates of beneficial interest | ||
or shares of which are not regularly traded on an |
established securities market; and | ||
(iii) of which more than 50% of the voting | ||
power or value of the beneficial interest or | ||
shares, at any time during the last half of the | ||
taxable year, is owned or controlled, directly, | ||
indirectly, or constructively, by a single | ||
corporation. | ||
(B) The term "captive real estate investment | ||
trust" does not include: | ||
(i) a real estate investment trust of which | ||
more than 50% of the voting power or value of the | ||
beneficial interest or shares is owned or | ||
controlled, directly, indirectly, or | ||
constructively, by: | ||
(a) a real estate investment trust, other | ||
than a captive real estate investment trust; | ||
(b) a person who is exempt from taxation | ||
under Section 501 of the Internal Revenue Code, | ||
and who is not required to treat income | ||
received from the real estate investment trust | ||
as unrelated business taxable income under | ||
Section 512 of the Internal Revenue Code; | ||
(c) a listed Australian property trust, if | ||
no more than 50% of the voting power or value | ||
of the beneficial interest or shares of that | ||
trust, at any time during the last half of the |
taxable year, is owned or controlled, directly | ||
or indirectly, by a single person; | ||
(d) an entity organized as a trust, | ||
provided a listed Australian property trust | ||
described in subparagraph (c) owns or | ||
controls, directly or indirectly, or | ||
constructively, 75% or more of the voting power | ||
or value of the beneficial interests or shares | ||
of such entity; or | ||
(e) an entity that is organized outside of | ||
the laws of the United States and that | ||
satisfies all of the following criteria: | ||
(1) at least 75% of the entity's total | ||
asset value at the close of its taxable | ||
year is represented by real estate assets | ||
(as defined in Section 856(c)(5)(B) of the | ||
Internal Revenue Code, thereby including | ||
shares or certificates of beneficial | ||
interest in any real estate investment | ||
trust), cash and cash equivalents, and | ||
U.S. Government securities; | ||
(2) the entity is not subject to tax on | ||
amounts that are distributed to its | ||
beneficial owners or is exempt from | ||
entity-level taxation; | ||
(3) the entity distributes at least |
85% of its taxable income (as computed in | ||
the jurisdiction in which it is organized) | ||
to the holders of its shares or | ||
certificates of beneficial interest on an | ||
annual basis; | ||
(4) either (i) the shares or | ||
beneficial interests of the entity are | ||
regularly traded on an established | ||
securities market or (ii) not more than 10% | ||
of the voting power or value in the entity | ||
is held, directly, indirectly, or | ||
constructively, by a single entity or | ||
individual; and | ||
(5) the entity is organized in a | ||
country that has entered into a tax treaty | ||
with the United States; or | ||
(ii) during its first taxable year for which it | ||
elects to be treated as a real estate investment | ||
trust under Section 856(c)(1) of the Internal | ||
Revenue Code, a real estate investment trust the | ||
certificates of beneficial interest or shares of | ||
which are not regularly traded on an established | ||
securities market, but only if the certificates of | ||
beneficial interest or shares of the real estate | ||
investment trust are regularly traded on an | ||
established securities market prior to the earlier |
of the due date (including extensions) for filing | ||
its return under this Act for that first taxable | ||
year or the date it actually files that return. | ||
(C) For the purposes of this subsection (1.5), the | ||
constructive ownership rules prescribed under Section | ||
318(a) of the Internal Revenue Code, as modified by | ||
Section 856(d)(5) of the Internal Revenue Code, apply | ||
in determining the ownership of stock, assets, or net | ||
profits of any person.
| ||
(2) Commercial domicile. The term "commercial | ||
domicile" means the
principal
place from which the trade or | ||
business of the taxpayer is directed or managed.
| ||
(3) Compensation. The term "compensation" means wages, | ||
salaries,
commissions
and any other form of remuneration | ||
paid to employees for personal services.
| ||
(4) Corporation. The term "corporation" includes | ||
associations, joint-stock
companies, insurance companies | ||
and cooperatives. Any entity, including a
limited | ||
liability company formed under the Illinois Limited | ||
Liability Company
Act, shall be treated as a corporation if | ||
it is so classified for federal
income tax purposes.
| ||
(5) Department. The term "Department" means the | ||
Department of Revenue of
this State.
| ||
(6) Director. The term "Director" means the Director of | ||
Revenue of this
State.
| ||
(7) Fiduciary. The term "fiduciary" means a guardian, |
trustee, executor,
administrator, receiver, or any person | ||
acting in any fiduciary capacity for any
person.
| ||
(8) Financial organization.
| ||
(A) The term "financial organization" means
any
| ||
bank, bank holding company, trust company, savings | ||
bank, industrial bank,
land bank, safe deposit | ||
company, private banker, savings and loan association,
| ||
building and loan association, credit union, currency | ||
exchange, cooperative
bank, small loan company, sales | ||
finance company, investment company, or any
person | ||
which is owned by a bank or bank holding company. For | ||
the purpose of
this Section a "person" will include | ||
only those persons which a bank holding
company may | ||
acquire and hold an interest in, directly or | ||
indirectly, under the
provisions of the Bank Holding | ||
Company Act of 1956 (12 U.S.C. 1841, et seq.),
except | ||
where interests in any person must be disposed of | ||
within certain
required time limits under the Bank | ||
Holding Company Act of 1956.
| ||
(B) For purposes of subparagraph (A) of this | ||
paragraph, the term
"bank" includes (i) any entity that | ||
is regulated by the Comptroller of the
Currency under | ||
the National Bank Act, or by the Federal Reserve Board, | ||
or by
the
Federal Deposit Insurance Corporation and | ||
(ii) any federally or State chartered
bank
operating as | ||
a credit card bank.
|
(C) For purposes of subparagraph (A) of this | ||
paragraph, the term
"sales finance company" has the | ||
meaning provided in the following item (i) or
(ii):
| ||
(i) A person primarily engaged in one or more | ||
of the following
businesses: the business of | ||
purchasing customer receivables, the business
of | ||
making loans upon the security of customer | ||
receivables, the
business of making loans for the | ||
express purpose of funding purchases of
tangible | ||
personal property or services by the borrower, or | ||
the business of
finance leasing. For purposes of | ||
this item (i), "customer receivable"
means:
| ||
(a) a retail installment contract or | ||
retail charge agreement within
the
meaning
of | ||
the Sales Finance Agency Act, the Retail | ||
Installment Sales Act, or the
Motor Vehicle | ||
Retail Installment Sales Act;
| ||
(b) an installment, charge, credit, or | ||
similar contract or agreement
arising from
the | ||
sale of tangible personal property or services | ||
in a transaction involving
a deferred payment | ||
price payable in one or more installments | ||
subsequent
to the sale; or
| ||
(c) the outstanding balance of a contract | ||
or agreement described in
provisions
(a) or (b) | ||
of this item (i).
|
A customer receivable need not provide for | ||
payment of interest on
deferred
payments. A sales | ||
finance company may purchase a customer receivable | ||
from, or
make a loan secured by a customer | ||
receivable to, the seller in the original
| ||
transaction or to a person who purchased the | ||
customer receivable directly or
indirectly from | ||
that seller.
| ||
(ii) A corporation meeting each of the | ||
following criteria:
| ||
(a) the corporation must be a member of an | ||
"affiliated group" within
the
meaning of | ||
Section 1504(a) of the Internal Revenue Code, | ||
determined
without regard to Section 1504(b) | ||
of the Internal Revenue Code;
| ||
(b) more than 50% of the gross income of | ||
the corporation for the
taxable
year
must be | ||
interest income derived from qualifying loans. | ||
A "qualifying
loan" is a loan made to a member | ||
of the corporation's affiliated group that
| ||
originates customer receivables (within the | ||
meaning of item (i)) or to whom
customer | ||
receivables originated by a member of the | ||
affiliated group have been
transferred, to
the | ||
extent the average outstanding balance of | ||
loans from that corporation
to members of its |
affiliated group during the taxable year do not | ||
exceed
the limitation amount for that | ||
corporation. The "limitation amount" for a
| ||
corporation is the average outstanding | ||
balances during the taxable year of
customer | ||
receivables (within the meaning of item (i)) | ||
originated by
all members of the affiliated | ||
group.
If the average outstanding balances of | ||
the
loans made by a corporation to members of | ||
its affiliated group exceed the
limitation | ||
amount, the interest income of that | ||
corporation from qualifying
loans shall be | ||
equal to its interest income from loans to | ||
members of its
affiliated groups times a | ||
fraction equal to the limitation amount | ||
divided by
the average outstanding balances of | ||
the loans made by that corporation to
members | ||
of its affiliated group;
| ||
(c) the total of all shareholder's equity | ||
(including, without
limitation,
paid-in
| ||
capital on common and preferred stock and | ||
retained earnings) of the
corporation plus the | ||
total of all of its loans, advances, and other
| ||
obligations payable or owed to members of its | ||
affiliated group may not
exceed 20% of the | ||
total assets of the corporation at any time |
during the tax
year; and
| ||
(d) more than 50% of all interest-bearing | ||
obligations of the
affiliated group payable to | ||
persons outside the group determined in | ||
accordance
with generally accepted accounting | ||
principles must be obligations of the
| ||
corporation.
| ||
This amendatory Act of the 91st General Assembly is | ||
declaratory of
existing
law.
| ||
(D) Subparagraphs
(B) and (C) of this paragraph are | ||
declaratory of
existing law and apply retroactively, | ||
for all tax years beginning on or before
December 31, | ||
1996,
to all original returns, to all amended returns | ||
filed no later than 30
days after the effective date of | ||
this amendatory Act of 1996, and to all
notices issued | ||
on or before the effective date of this amendatory Act | ||
of 1996
under subsection (a) of Section 903, subsection | ||
(a) of Section 904,
subsection (e) of Section 909, or | ||
Section 912.
A taxpayer that is a "financial | ||
organization" that engages in any transaction
with an | ||
affiliate shall be a "financial organization" for all | ||
purposes of this
Act.
| ||
(E) For all tax years beginning on or
before | ||
December 31, 1996, a taxpayer that falls within the | ||
definition
of a
"financial organization" under | ||
subparagraphs (B) or (C) of this paragraph, but
who |
does
not fall within the definition of a "financial | ||
organization" under the Proposed
Regulations issued by | ||
the Department of Revenue on July 19, 1996, may
| ||
irrevocably elect to apply the Proposed Regulations | ||
for all of those years as
though the Proposed | ||
Regulations had been lawfully promulgated, adopted, | ||
and in
effect for all of those years. For purposes of | ||
applying subparagraphs (B) or
(C) of
this
paragraph to | ||
all of those years, the election allowed by this | ||
subparagraph
applies only to the taxpayer making the | ||
election and to those members of the
taxpayer's unitary | ||
business group who are ordinarily required to | ||
apportion
business income under the same subsection of | ||
Section 304 of this Act as the
taxpayer making the | ||
election. No election allowed by this subparagraph | ||
shall
be made under a claim
filed under subsection (d) | ||
of Section 909 more than 30 days after the
effective | ||
date of this amendatory Act of 1996.
| ||
(F) Finance Leases. For purposes of this | ||
subsection, a finance lease
shall be treated as a loan | ||
or other extension of credit, rather than as a
lease,
| ||
regardless of how the transaction is characterized for | ||
any other purpose,
including the purposes of any | ||
regulatory agency to which the lessor is subject.
A | ||
finance lease is any transaction in the form of a lease | ||
in which the lessee
is treated as the owner of the |
leased asset entitled to any deduction for
| ||
depreciation allowed under Section 167 of the Internal | ||
Revenue Code.
| ||
(9) Fiscal year. The term "fiscal year" means an | ||
accounting period of
12 months ending on the last day of | ||
any month other than December.
| ||
(9.5) Fixed place of business. The term "fixed place of | ||
business" has the same meaning as that term is given in | ||
Section 864 of the Internal Revenue Code and the related | ||
Treasury regulations.
| ||
(10) Includes and including. The terms "includes" and | ||
"including" when
used in a definition contained in this Act | ||
shall not be deemed to exclude
other things otherwise | ||
within the meaning of the term defined.
| ||
(11) Internal Revenue Code. The term "Internal Revenue | ||
Code" means the
United States Internal Revenue Code of 1954 | ||
or any successor law or laws
relating to federal income | ||
taxes in effect for the taxable year.
| ||
(11.5) Investment partnership. | ||
(A) The term "investment partnership" means any | ||
entity that is treated as a partnership for federal | ||
income tax purposes that meets the following | ||
requirements: | ||
(i) no less than 90% of the partnership's cost | ||
of its total assets consists of qualifying | ||
investment securities, deposits at banks or other |
financial institutions, and office space and | ||
equipment reasonably necessary to carry on its | ||
activities as an investment partnership; | ||
(ii) no less than 90% of its gross income | ||
consists of interest, dividends, and gains from | ||
the sale or exchange of qualifying investment | ||
securities; and
| ||
(iii) the partnership is not a dealer in | ||
qualifying investment securities. | ||
(B) For purposes of this paragraph (11.5), the term | ||
"qualifying investment securities" includes all of the | ||
following:
| ||
(i) common stock, including preferred or debt | ||
securities convertible into common stock, and | ||
preferred stock; | ||
(ii) bonds, debentures, and other debt | ||
securities; | ||
(iii) foreign and domestic currency deposits | ||
secured by federal, state, or local governmental | ||
agencies; | ||
(iv) mortgage or asset-backed securities | ||
secured by federal, state, or local governmental | ||
agencies; | ||
(v) repurchase agreements and loan | ||
participations; | ||
(vi) foreign currency exchange contracts and |
forward and futures contracts on foreign | ||
currencies; | ||
(vii) stock and bond index securities and | ||
futures contracts and other similar financial | ||
securities and futures contracts on those | ||
securities;
| ||
(viii) options for the purchase or sale of any | ||
of the securities, currencies, contracts, or | ||
financial instruments described in items (i) to | ||
(vii), inclusive;
| ||
(ix) regulated futures contracts;
| ||
(x) commodities (not described in Section | ||
1221(a)(1) of the Internal Revenue Code) or | ||
futures, forwards, and options with respect to | ||
such commodities, provided, however, that any item | ||
of a physical commodity to which title is actually | ||
acquired in the partnership's capacity as a dealer | ||
in such commodity shall not be a qualifying | ||
investment security;
| ||
(xi) derivatives; and
| ||
(xii) a partnership interest in another | ||
partnership that is an investment partnership.
| ||
(12) Mathematical error. The term "mathematical error" | ||
includes the
following types of errors, omissions, or | ||
defects in a return filed by a
taxpayer which prevents | ||
acceptance of the return as filed for processing:
|
(A) arithmetic errors or incorrect computations on | ||
the return or
supporting schedules;
| ||
(B) entries on the wrong lines;
| ||
(C) omission of required supporting forms or | ||
schedules or the omission
of the information in whole | ||
or in part called for thereon; and
| ||
(D) an attempt to claim, exclude, deduct, or | ||
improperly report, in a
manner
directly contrary to the | ||
provisions of the Act and regulations thereunder
any | ||
item of income, exemption, deduction, or credit.
| ||
(13) Nonbusiness income. The term "nonbusiness income" | ||
means all income
other than business income or | ||
compensation.
| ||
(14) Nonresident. The term "nonresident" means a | ||
person who is not a
resident.
| ||
(15) Paid, incurred and accrued. The terms "paid", | ||
"incurred" and
"accrued"
shall be construed according to | ||
the method of accounting upon the basis
of which the | ||
person's base income is computed under this Act.
| ||
(16) Partnership and partner. The term "partnership" | ||
includes a syndicate,
group, pool, joint venture or other | ||
unincorporated organization, through
or by means of which | ||
any business, financial operation, or venture is carried
| ||
on, and which is not, within the meaning of this Act, a | ||
trust or estate
or a corporation; and the term "partner" | ||
includes a member in such syndicate,
group, pool, joint |
venture or organization.
| ||
The term "partnership" includes any entity, including | ||
a limited
liability company formed under the Illinois
| ||
Limited Liability Company Act, classified as a partnership | ||
for federal income tax purposes.
| ||
The term "partnership" does not include a syndicate, | ||
group, pool,
joint venture, or other unincorporated | ||
organization established for the
sole purpose of playing | ||
the Illinois State Lottery.
| ||
(17) Part-year resident. The term "part-year resident" | ||
means an individual
who became a resident during the | ||
taxable year or ceased to be a resident
during the taxable | ||
year. Under Section 1501(a)(20)(A)(i) residence
commences | ||
with presence in this State for other than a temporary or | ||
transitory
purpose and ceases with absence from this State | ||
for other than a temporary or
transitory purpose. Under | ||
Section 1501(a)(20)(A)(ii) residence commences
with the | ||
establishment of domicile in this State and ceases with the
| ||
establishment of domicile in another State.
| ||
(18) Person. The term "person" shall be construed to | ||
mean and include
an individual, a trust, estate, | ||
partnership, association, firm, company,
corporation, | ||
limited liability company, or fiduciary. For purposes of | ||
Section
1301 and 1302 of this Act, a "person" means (i) an | ||
individual, (ii) a
corporation, (iii) an officer, agent, or | ||
employee of a
corporation, (iv) a member, agent or employee |
of a partnership, or (v)
a member,
manager, employee, | ||
officer, director, or agent of a limited liability company
| ||
who in such capacity commits an offense specified in | ||
Section 1301 and 1302.
| ||
(18A) Records. The term "records" includes all data | ||
maintained by the
taxpayer, whether on paper, microfilm, | ||
microfiche, or any type of
machine-sensible data | ||
compilation.
| ||
(19) Regulations. The term "regulations" includes | ||
rules promulgated and
forms prescribed by the Department.
| ||
(20) Resident. The term "resident" means:
| ||
(A) an individual (i) who is
in this State for | ||
other than a temporary or transitory purpose during the
| ||
taxable year; or (ii) who is domiciled in this State | ||
but is absent from
the State for a temporary or | ||
transitory purpose during the taxable year;
| ||
(B) The estate of a decedent who at his or her | ||
death was domiciled in
this
State;
| ||
(C) A trust created by a will of a decedent who at | ||
his death was
domiciled
in this State; and
| ||
(D) An irrevocable trust, the grantor of which was | ||
domiciled in this
State
at the time such trust became | ||
irrevocable. For purpose of this subparagraph,
a trust | ||
shall be considered irrevocable to the extent that the | ||
grantor is
not treated as the owner thereof under | ||
Sections 671 through 678 of the Internal
Revenue Code.
|
(21) Sales. The term "sales" means all gross receipts | ||
of the taxpayer
not allocated under Sections 301, 302 and | ||
303.
| ||
(22) State. The term "state" when applied to a | ||
jurisdiction other than
this State means any state of the | ||
United States, the District of Columbia,
the Commonwealth | ||
of Puerto Rico, any Territory or Possession of the United
| ||
States, and any foreign country, or any political | ||
subdivision of any of the
foregoing. For purposes of the | ||
foreign tax credit under Section 601, the
term "state" | ||
means any state of the United States, the District of | ||
Columbia,
the Commonwealth of Puerto Rico, and any | ||
territory or possession of the
United States, or any | ||
political subdivision of any of the foregoing,
effective | ||
for tax years ending on or after December 31, 1989.
| ||
(23) Taxable year. The term "taxable year" means the | ||
calendar year, or
the fiscal year ending during such | ||
calendar year, upon the basis of which
the base income is | ||
computed under this Act. "Taxable year" means, in the
case | ||
of a return made for a fractional part of a year under the | ||
provisions
of this Act, the period for which such return is | ||
made.
| ||
(24) Taxpayer. The term "taxpayer" means any person | ||
subject to the tax
imposed by this Act.
| ||
(25) International banking facility. The term | ||
international banking
facility shall have the same meaning |
as is set forth in the Illinois Banking
Act or as is set | ||
forth in the laws of the United States or regulations of
| ||
the Board of Governors of the Federal Reserve System.
| ||
(26) Income Tax Return Preparer.
| ||
(A) The term "income tax return preparer"
means any | ||
person who prepares for compensation, or who employs | ||
one or more
persons to prepare for compensation, any | ||
return of tax imposed by this Act
or any claim for | ||
refund of tax imposed by this Act. The preparation of a
| ||
substantial portion of a return or claim for refund | ||
shall be treated as
the preparation of that return or | ||
claim for refund.
| ||
(B) A person is not an income tax return preparer | ||
if all he or she does
is
| ||
(i) furnish typing, reproducing, or other | ||
mechanical assistance;
| ||
(ii) prepare returns or claims for refunds for | ||
the employer by whom he
or she is regularly and | ||
continuously employed;
| ||
(iii) prepare as a fiduciary returns or claims | ||
for refunds for any
person; or
| ||
(iv) prepare claims for refunds for a taxpayer | ||
in response to any
notice
of deficiency issued to | ||
that taxpayer or in response to any waiver of
| ||
restriction after the commencement of an audit of | ||
that taxpayer or of another
taxpayer if a |
determination in the audit of the other taxpayer | ||
directly or
indirectly affects the tax liability | ||
of the taxpayer whose claims he or she is
| ||
preparing.
| ||
(27) Unitary business group. | ||
(A) The term "unitary business group" means
a group | ||
of persons related through common ownership whose | ||
business activities
are integrated with, dependent | ||
upon and contribute to each other. The group
will not | ||
include those members whose business activity outside | ||
the United
States is 80% or more of any such member's | ||
total business activity; for
purposes of this | ||
paragraph and clause (a)(3)(B)(ii) of Section 304,
| ||
business
activity within the United States shall be | ||
measured by means of the factors
ordinarily applicable | ||
under subsections (a), (b), (c), (d), or (h)
of Section
| ||
304 except that, in the case of members ordinarily | ||
required to apportion
business income by means of the 3 | ||
factor formula of property, payroll and sales
| ||
specified in subsection (a) of Section 304, including | ||
the
formula as weighted in subsection (h) of Section | ||
304, such members shall
not use the sales factor in the | ||
computation and the results of the property
and payroll | ||
factor computations of subsection (a) of Section 304 | ||
shall be
divided by 2 (by one if either
the property or | ||
payroll factor has a denominator of zero). The |
computation
required by the preceding sentence shall, | ||
in each case, involve the division of
the member's | ||
property, payroll, or revenue miles in the United | ||
States,
insurance premiums on property or risk in the | ||
United States, or financial
organization business | ||
income from sources within the United States, as the
| ||
case may be, by the respective worldwide figures for | ||
such items. Common
ownership in the case of | ||
corporations is the direct or indirect control or
| ||
ownership of more than 50% of the outstanding voting | ||
stock of the persons
carrying on unitary business | ||
activity. Unitary business activity can
ordinarily be | ||
illustrated where the activities of the members are: | ||
(1) in the
same general line (such as manufacturing, | ||
wholesaling, retailing of tangible
personal property, | ||
insurance, transportation or finance); or (2) are | ||
steps in a
vertically structured enterprise or process | ||
(such as the steps involved in the
production of | ||
natural resources, which might include exploration, | ||
mining,
refining, and marketing); and, in either | ||
instance, the members are functionally
integrated | ||
through the exercise of strong centralized management | ||
(where, for
example, authority over such matters as | ||
purchasing, financing, tax compliance,
product line, | ||
personnel, marketing and capital investment is not | ||
left to each
member).
|
(B) In no event, shall any
unitary business group | ||
include members
which are ordinarily required to | ||
apportion business income under different
subsections | ||
of Section 304 except that for tax years ending on or | ||
after
December 31, 1987 this prohibition shall not | ||
apply to a holding company that would otherwise be a | ||
member of a unitary business group with taxpayers that | ||
apportion business income under any of subsections | ||
(b), (c), (c-1), or (d) of Section 304. If a unitary | ||
business
group would, but for the preceding sentence, | ||
include members that are
ordinarily required to | ||
apportion business income under different subsections | ||
of
Section 304, then for each subsection of Section 304 | ||
for which there are two or
more members, there shall be | ||
a separate unitary business group composed of such
| ||
members. For purposes of the preceding two sentences, a | ||
member is "ordinarily
required to apportion business | ||
income" under a particular subsection of Section
304 if | ||
it would be required to use the apportionment method | ||
prescribed by such
subsection except for the fact that | ||
it derives business income solely from
Illinois. As | ||
used in this paragraph, the phrase "United States" | ||
means only the 50 states and the District of Columbia, | ||
but does not include any territory or possession of the | ||
United States or any area over which the United States | ||
has asserted jurisdiction or claimed exclusive rights |
with respect to the exploration for or exploitation of | ||
natural resources.
| ||
(C) Holding companies. | ||
(i) For purposes of this subparagraph, a | ||
"holding company" is a corporation (other than a | ||
corporation that is a financial organization under | ||
paragraph (8) of this subsection (a) of Section | ||
1501 because it is a bank holding company under the | ||
provisions of the Bank Holding Company Act of 1956 | ||
(12 U.S.C. 1841, et seq.) or because it is owned by | ||
a bank or a bank holding company) that owns a | ||
controlling interest in one or more other | ||
taxpayers ("controlled taxpayers"); that, during | ||
the period that includes the taxable year and the 2 | ||
immediately preceding taxable years or, if the | ||
corporation was formed during the current or | ||
immediately preceding taxable year, the taxable | ||
years in which the corporation has been in | ||
existence, derived substantially all its gross | ||
income from dividends, interest, rents, royalties, | ||
fees or other charges received from controlled | ||
taxpayers for the provision of services, and gains | ||
on the sale or other disposition of interests in | ||
controlled taxpayers or in property leased or | ||
licensed to controlled taxpayers or used by the | ||
taxpayer in providing services to controlled |
taxpayers; and that incurs no substantial expenses | ||
other than expenses (including interest and other | ||
costs of borrowing) incurred in connection with | ||
the acquisition and holding of interests in | ||
controlled taxpayers and in the provision of | ||
services to controlled taxpayers or in the leasing | ||
or licensing of property to controlled taxpayers. | ||
(ii) The income of a holding company which is a | ||
member of more than one unitary business group | ||
shall be included in each unitary business group of | ||
which it is a member on a pro rata basis, by | ||
including in each unitary business group that | ||
portion of the base income of the holding company | ||
that bears the same proportion to the total base | ||
income of the holding company as the gross receipts | ||
of the unitary business group bears to the combined | ||
gross receipts of all unitary business groups (in | ||
both cases without regard to the holding company) | ||
or on any other reasonable basis, consistently | ||
applied. | ||
(iii) A holding company shall apportion its | ||
business income under the subsection of Section | ||
304 used by the other members of its unitary | ||
business group. The apportionment factors of a | ||
holding company which would be a member of more | ||
than one unitary business group shall be included |
with the apportionment factors of each unitary | ||
business group of which it is a member on a pro | ||
rata basis using the same method used in clause | ||
(ii). | ||
(iv) The provisions of this subparagraph (C) | ||
are intended to clarify existing law. | ||
(D) If including the base income and factors of a | ||
holding company in more than one unitary business group | ||
under subparagraph (C) does not fairly reflect the | ||
degree of integration between the holding company and | ||
one or more of the unitary business groups, the | ||
dependence of the holding company and one or more of | ||
the unitary business groups upon each other, or the | ||
contributions between the holding company and one or | ||
more of the unitary business groups, the holding | ||
company may petition the Director, under the | ||
procedures provided under Section 304(f), for | ||
permission to include all base income and factors of | ||
the holding company only with members of a unitary | ||
business group apportioning their business income | ||
under one subsection of subsections (a), (b), (c), or | ||
(d) of Section 304. If the petition is granted, the | ||
holding company shall be included in a unitary business | ||
group only with persons apportioning their business | ||
income under the selected subsection of Section 304 | ||
until the Director grants a petition of the holding |
company either to be included in more than one unitary | ||
business group under subparagraph (C) or to include its | ||
base income and factors only with members of a unitary | ||
business group apportioning their business income | ||
under a different subsection of Section 304. | ||
(E) If the unitary business group members' | ||
accounting periods differ,
the common parent's | ||
accounting period or, if there is no common parent, the
| ||
accounting period of the member that is expected to | ||
have, on a recurring basis,
the greatest Illinois | ||
income tax liability must be used to determine whether | ||
to
use the apportionment method provided in subsection | ||
(a) or subsection (h) of
Section 304. The
prohibition | ||
against membership in a unitary business group for | ||
taxpayers
ordinarily required to apportion income | ||
under different subsections of Section
304 does not | ||
apply to taxpayers required to apportion income under | ||
subsection
(a) and subsection (h) of Section
304. The | ||
provisions of this amendatory Act of 1998 apply to tax
| ||
years ending on or after December 31, 1998.
| ||
(28) Subchapter S corporation. The term "Subchapter S | ||
corporation"
means a corporation for which there is in | ||
effect an election under Section
1362 of the Internal | ||
Revenue Code, or for which there is 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.
| ||
(30) Foreign person. The term "foreign person" means | ||
any person who is a nonresident alien individual and any | ||
nonindividual entity, regardless of where created or | ||
organized, whose business activity outside the United | ||
States is 80% or more of the entity's total business | ||
activity.
| ||
(b) Other definitions.
| ||
(1) Words denoting number, gender, and so forth,
when | ||
used in this Act, where not otherwise distinctly expressed | ||
or manifestly
incompatible with the intent thereof:
| ||
(A) Words importing the singular include and apply | ||
to several persons,
parties or things;
| ||
(B) Words importing the plural include the | ||
singular; and
| ||
(C) Words importing the masculine gender include | ||
the feminine as well.
| ||
(2) "Company" or "association" as including successors | ||
and assigns. The
word "company" or "association", when used | ||
in reference to a corporation,
shall be deemed to embrace | ||
the words "successors and assigns of such company
or | ||
association", and in like manner as if these last-named | ||
words, or words
of similar import, were expressed.
| ||
(3) Other terms. Any term used in any Section of this | ||
Act with respect
to the application of, or in connection |
with, the provisions of any other
Section of this Act shall | ||
have the same meaning as in such other Section.
| ||
(Source: P.A. 96-641, eff. 8-24-09; 97-507, eff. 8-23-11.)
| ||
Section 15-15. The Economic Development for a Growing | ||
Economy Tax Credit Act is amended by changing Section 5-15 as | ||
follows: | ||
(35 ILCS 10/5-15) | ||
Sec. 5-15. Tax Credit Awards. Subject to the conditions set | ||
forth in this
Act, a Taxpayer is
entitled to a Credit against | ||
or, as described in subsection (g) of this Section, a payment | ||
towards taxes imposed pursuant to subsections (a) and (b)
of | ||
Section 201 of the Illinois
Income Tax Act that may be imposed | ||
on the Taxpayer for a taxable year beginning
on or
after | ||
January 1, 1999,
if the Taxpayer is awarded a Credit by the | ||
Department under this Act for that
taxable year. | ||
(a) The Department shall make Credit awards under this Act | ||
to foster job
creation and retention in Illinois. | ||
(b) A person that proposes a project to create new jobs in | ||
Illinois must
enter into an Agreement with the
Department for | ||
the Credit under this Act. | ||
(c) The Credit shall be claimed for the taxable years | ||
specified in the
Agreement. | ||
(d) The Credit shall not exceed the Incremental Income Tax | ||
attributable to
the project that is the subject of the |
Agreement. | ||
(e) Nothing herein shall prohibit a Tax Credit Award to an | ||
Applicant that uses a PEO if all other award criteria are | ||
satisfied.
| ||
(f) In lieu of the Credit allowed under this Act against | ||
the taxes imposed pursuant to subsections (a) and (b) of | ||
Section 201 of the Illinois Income Tax Act for any taxable year | ||
ending on or after December 31, 2009, the Taxpayer may elect to | ||
claim the Credit against its obligation to pay over withholding | ||
under Section 704A of the Illinois Income Tax Act. | ||
(1) The election under this subsection (f) may be made | ||
only by a Taxpayer that (i) is primarily engaged in one of | ||
the following business activities: water purification and | ||
treatment, motor vehicle metal stamping, automobile | ||
manufacturing, automobile and light duty motor vehicle | ||
manufacturing, motor vehicle manufacturing, light truck | ||
and utility vehicle manufacturing, heavy duty truck | ||
manufacturing, motor vehicle body manufacturing, cable | ||
television infrastructure design or manufacturing, or | ||
wireless telecommunication or computing terminal device | ||
design or manufacturing for use on public networks and (ii) | ||
meets the following criteria: | ||
(A) the Taxpayer (i) had an Illinois net loss or an | ||
Illinois net loss deduction under Section 207 of the | ||
Illinois Income Tax Act for the taxable year in which | ||
the Credit is awarded, (ii) employed a minimum of 1,000 |
full-time employees in this State during the taxable | ||
year in which the Credit is awarded, (iii) has an | ||
Agreement under this Act on December 14, 2009 (the | ||
effective date of Public Act 96-834), and (iv) is in | ||
compliance with all provisions of that Agreement; | ||
(B) the Taxpayer (i) had an Illinois net loss or an | ||
Illinois net loss deduction under Section 207 of the | ||
Illinois Income Tax Act for the taxable year in which | ||
the Credit is awarded, (ii) employed a minimum of 1,000 | ||
full-time employees in this State during the taxable | ||
year in which the Credit is awarded, and (iii) has | ||
applied for an Agreement within 365 days after December | ||
14, 2009 (the effective date of Public Act 96-834); | ||
(C) the Taxpayer (i) had an Illinois net operating | ||
loss carryforward under Section 207 of the Illinois | ||
Income Tax Act in a taxable year ending during calendar | ||
year 2008, (ii) has applied for an Agreement within 150 | ||
days after the effective date of this amendatory Act of | ||
the 96th General Assembly, (iii) creates at least 400 | ||
new jobs in Illinois, (iv) retains at least 2,000 jobs | ||
in Illinois that would have been at risk of relocation | ||
out of Illinois over a 10-year period, and (v) makes a | ||
capital investment of at least $75,000,000; | ||
(D) the Taxpayer (i) had an Illinois net operating | ||
loss carryforward under Section 207 of the Illinois | ||
Income Tax Act in a taxable year ending during calendar |
year 2009, (ii) has applied for an Agreement within 150 | ||
days after the effective date of this amendatory Act of | ||
the 96th General Assembly, (iii) creates at least 150 | ||
new jobs, (iv) retains at least 1,000 jobs in Illinois | ||
that would have been at risk of relocation out of | ||
Illinois over a 10-year period, and (v) makes a capital | ||
investment of at least $57,000,000; or | ||
(E) the Taxpayer (i) employed at least 2,500 | ||
full-time employees in the State during the year in | ||
which the Credit is awarded, (ii) commits to make at | ||
least $500,000,000 in combined capital improvements | ||
and project costs under the Agreement, (iii) applies | ||
for an Agreement between January 1, 2011 and June 30, | ||
2011, (iv) executes an Agreement for the Credit during | ||
calendar year 2011, and (v) was incorporated no more | ||
than 5 years before the filing of an application for an | ||
Agreement. | ||
(1.5) The election under this subsection (f) may also | ||
be made by a Taxpayer for any Credit awarded pursuant to an | ||
agreement that was executed between January 1, 2011 and | ||
June 30, 2011, if the Taxpayer (i) is primarily engaged in | ||
the manufacture of inner tubes or tires, or both, from | ||
natural and synthetic rubber, (ii) employs a minimum of | ||
2,400 full-time employees in Illinois at the time of | ||
application, (iii) creates at least 350 full-time jobs and | ||
retains at least 250 full-time jobs in Illinois that would |
have been at risk of being created or retained outside of | ||
Illinois, and (iv) makes a capital investment of at least | ||
$200,000,000 at the project location. | ||
(1.6) The election under this subsection (f) may also | ||
be made by a Taxpayer for any Credit awarded pursuant to an | ||
agreement that was executed within 150 days after the | ||
effective date of this amendatory Act of the 97th General | ||
Assembly, if the Taxpayer (i) is primarily engaged in the | ||
operation of a discount department store, (ii) maintains | ||
its corporate headquarters in Illinois, (iii) employs a | ||
minimum of 4,250 full-time employees at its corporate | ||
headquarters in Illinois at the time of application, (iv) | ||
retains at least 4,250 full-time jobs in Illinois that | ||
would have been at risk of being relocated outside of | ||
Illinois, (v) had a minimum of $40,000,000,000 in total | ||
revenue in 2010, and (vi) makes a capital investment of at | ||
least $300,000,000 at the project location. | ||
(1.7) Notwithstanding any other provision of law, the | ||
election under this subsection (f) may also be made by a | ||
Taxpayer for any Credit awarded pursuant to an agreement | ||
that was executed or applied for on or after July 1, 2011 | ||
and on or before March 31, 2012, if the Taxpayer is | ||
primarily engaged in the manufacture of original and | ||
aftermarket filtration parts and products for automobiles, | ||
motor vehicles, light duty motor vehicles, light trucks and | ||
utility vehicles, and heavy duty trucks, (ii) employs a |
minimum of 1,000 full-time employees in Illinois at the | ||
time of application, (iii) creates at least 250 full-time | ||
jobs in Illinois, (iv) relocates its corporate | ||
headquarters to Illinois from another state, and (v) makes | ||
a capital investment of at least $4,000,000 at the project | ||
location. | ||
(2) An election under this subsection shall allow the | ||
credit to be taken against payments otherwise due under | ||
Section 704A of the Illinois Income Tax Act during the | ||
first calendar year beginning after the end of the taxable | ||
year in which the credit is awarded under this Act. | ||
(3) The election shall be made in the form and manner | ||
required by the Illinois Department of Revenue and, once | ||
made, shall be irrevocable. | ||
(4) If a Taxpayer who meets the requirements of | ||
subparagraph (A) of paragraph (1) of this subsection (f) | ||
elects to claim the Credit against its withholdings as | ||
provided in this subsection (f), then, on and after the | ||
date of the election, the terms of the Agreement between | ||
the Taxpayer and the Department may not be further amended | ||
during the term of the Agreement. | ||
(g) A pass-through entity that has been awarded a credit | ||
under this Act, its shareholders, or its partners may treat | ||
some or all of the credit awarded pursuant to this Act as a tax | ||
payment for purposes of the Illinois Income Tax Act. The term | ||
"tax payment" means a payment as described in Article 6 or |
Article 8 of the Illinois Income Tax Act or a composite payment | ||
made by a pass-through entity on behalf of any of its | ||
shareholders or partners to satisfy such shareholders' or | ||
partners' taxes imposed pursuant to subsections (a) and (b) of | ||
Section 201 of the Illinois Income Tax Act. In no event shall | ||
the amount of the award credited pursuant to this Act exceed | ||
the Illinois income tax liability of the pass-through entity or | ||
its shareholders or partners for the taxable year. | ||
(Source: P.A. 96-834, eff. 12-14-09; 96-836, eff. 12-16-09; | ||
96-905, eff. 6-4-10; 96-1000, eff. 7-2-10; 96-1534, eff. | ||
3-4-11; 97-2, eff. 5-6-11.) | ||
Section 15-17. The Business Location Efficiency Incentive | ||
Act is amended by changing Section 25 as follows: | ||
(35 ILCS 11/25) | ||
(Section scheduled to be repealed on December 31, 2011)
| ||
Sec. 25. Repeal. This Act is repealed on December 31, 2016 | ||
2011 .
| ||
(Source: P.A. 94-966, eff. 1-1-07.) | ||
Section 15-18. The Small Business Job Creation Tax Credit | ||
Act is amended by changing Sections 10 and 25 as follows: | ||
(35 ILCS 25/10)
| ||
Sec. 10. Definitions. In this Act: |
"Applicant" means a person that is operating a business | ||
located within the State of Illinois that is engaged in | ||
interstate or intrastate commerce and either: | ||
(1) has no more than 50 full-time employees, without | ||
regard to the location of employment of such employees at | ||
the beginning of the incentive period; or | ||
(2) hired within the incentive period an employee who | ||
had participated as worker-trainee in the Put Illinois to | ||
Work Program during 2010. | ||
In the case of any person that is a member of a unitary | ||
business group within the meaning of subdivision (a)(27) of | ||
Section 1501 of the Illinois Income Tax Act, "applicant" refers | ||
to the unitary business group. | ||
"Certificate" means the tax credit certificate issued by | ||
the Department under Section 35 of this Act. | ||
"Certificate of eligibility" means the certificate issued | ||
by the Department under Section 20 of this Act. | ||
"Credit" means the amount awarded by the Department to an | ||
applicant by issuance of a certificate under Section 35 of this | ||
Act for each new full-time equivalent employee hired or job | ||
created. | ||
"Department" means the Department of Commerce and Economic | ||
Opportunity. | ||
"Director" means the Director of the Department. | ||
"Full-time employee" means an individual who is employed | ||
for a basic wage for at least 35 hours each week or who renders |
any other standard of service generally accepted by industry | ||
custom or practice as full-time employment. | ||
"Incentive period" means the period beginning on July 1 and | ||
ending on June 30 of the following year. The first incentive | ||
period shall begin on July 1, 2010 and the last incentive | ||
period shall end ending on June 30, 2016 2011 . | ||
"Basic wage" means compensation for employment that is no | ||
less than $10 per hour or the equivalent salary for a new | ||
employee. | ||
"New employee" means a full-time employee: | ||
(1) who first became employed by an applicant with less | ||
than 50 full-time employees within the incentive period | ||
whose hire results in a net increase in the applicant's | ||
full-time Illinois employees and who is receiving a basic | ||
wage as compensation; or | ||
(2) who participated as a worker-trainee in the Put | ||
Illinois to Work Program during 2010 and who is | ||
subsequently hired during the incentive period by an | ||
applicant and who is receiving a basic wage as | ||
compensation. | ||
The term "new employee" does not include: | ||
(1) a person who was previously employed in Illinois by | ||
the applicant or a related member prior to the onset of the | ||
incentive period; or | ||
(2) any individual who has a direct or indirect | ||
ownership interest of at least 5% in the profits, capital, |
or value of the applicant or a related member. | ||
"Noncompliance date" means, in the case of an applicant | ||
that is not complying with the requirements of the provisions | ||
of this Act, the day following the last date upon which the | ||
taxpayer was in compliance with the requirements of the | ||
provisions of this Act, as determined by the Director, pursuant | ||
to Section 45 of this Act. | ||
"Put Illinois to Work Program" means a worker training and | ||
employment program that was established by the State of | ||
Illinois with funding from the United States Department of | ||
Health and Human Services of Emergency Temporary Assistance to | ||
Needy Families funds authorized by the American Recovery and | ||
Reinvestment Act of 2009 (ARRA TANF Funds). These ARRA TANF | ||
funds were in turn used by the State of Illinois to fund the | ||
Put Illinois to Work Program. | ||
"Related member" means a person that, with respect to the | ||
applicant during any portion of the incentive period, is any | ||
one of the following, | ||
(1) An individual, if the individual and the members of | ||
the individual's family (as defined in Section 318 of the | ||
Internal Revenue Code) own directly, indirectly, | ||
beneficially, or constructively, in the aggregate, at | ||
least 50% of the value of the outstanding profits, capital, | ||
stock, or other ownership interest in the applicant. | ||
(2) A partnership, estate, or trust and any partner or | ||
beneficiary, if the partnership, estate, or trust and its |
partners or beneficiaries own directly, indirectly, | ||
beneficially, or constructively, in the aggregate, at | ||
least 50% of the profits, capital, stock, or other | ||
ownership interest in the applicant. | ||
(3) A corporation, and any party related to the | ||
corporation in a manner that would require an attribution | ||
of stock from the corporation under the attribution rules | ||
of Section 318 of the Internal Revenue Code, if the | ||
applicant and any other related member own, in the | ||
aggregate, directly, indirectly, beneficially, or | ||
constructively, at least 50% of the value of the | ||
corporation's outstanding stock. | ||
(4) A corporation and any party related to that | ||
corporation in a manner that would require an attribution | ||
of stock from the corporation to the party or from the | ||
party to the corporation under the attribution rules of | ||
Section 318 of the Internal Revenue Code, if the | ||
corporation and all such related parties own, in the | ||
aggregate, at least 50% of the profits, capital, stock, or | ||
other ownership interest in the applicant. | ||
(5) A person to or from whom there is attribution of | ||
stock ownership in accordance with Section 1563(e) of the | ||
Internal Revenue Code, except that for purposes of | ||
determining whether a person is a related member under this | ||
paragraph, "20%" shall be substituted for "5%" whenever | ||
"5%" appears in Section 1563(e) of the Internal Revenue |
Code.
| ||
(Source: P.A. 96-888, eff. 4-13-10; 96-1498, eff. 1-18-11.) | ||
(35 ILCS 25/25)
| ||
Sec. 25. Tax credit. | ||
(a) Subject to the conditions set forth in this Act, an | ||
applicant is entitled to a credit against payment of taxes | ||
withheld under Section 704A of the Illinois Income Tax Act: | ||
(1) for new employees who participated as | ||
worker-trainees in the Put Illinois to Work Program during | ||
2010: | ||
(A) in the first calendar year ending on or after | ||
the date that is 6 months after December 31, 2010, or | ||
the date of hire, whichever is later. Under this | ||
subparagraph, the applicant is entitled to one-half of | ||
the credit allowable for each new employee who is | ||
employed for at least 6 months after the date of hire; | ||
and | ||
(B) in the first calendar year ending on or after | ||
the date that is 12 months after December 31, 2010, or | ||
the date of hire, whichever is later. Under this | ||
subparagraph, the applicant is entitled to one-half of | ||
the credit allowable for each new employee who is | ||
employed for at least 12 months after the date of hire; | ||
(2) for all other new employees, in the first calendar | ||
year ending on or after the date that is 12 months after |
the date of hire of a new employee. The credit shall be | ||
allowed as a credit to an applicant for each full-time | ||
employee hired during the incentive period that results in | ||
a net increase in full-time Illinois employees, where the | ||
net increase in the employer's full-time Illinois | ||
employees is maintained for at least 12 months. | ||
(b) The Department shall make credit awards under this Act | ||
to further job creation. | ||
(c) The credit shall be claimed for the first calendar year | ||
ending on or after the date on which the certificate is issued | ||
by the Department. | ||
(d) The credit shall not exceed $2,500 per new employee | ||
hired. | ||
(e) The net increase in full-time Illinois employees, | ||
measured on an annual full-time equivalent basis, shall be the | ||
total number of full-time Illinois employees of the applicant | ||
on the final day of the incentive period June 30, 2011 , minus | ||
the number of full-time Illinois employees employed by the | ||
employer on the first day of that same incentive period July 1, | ||
2010 . For purposes of the calculation, an employer that begins | ||
doing business in this State during the incentive period, as | ||
determined by the Director, shall be treated as having zero | ||
Illinois employees on the first day of the incentive period | ||
July 1, 2010 . | ||
(f) The net increase in the number of full-time Illinois | ||
employees of the applicant under subsection (e) must be |
sustained continuously for at least 12 months, starting with | ||
the date of hire of a new employee during the incentive period. | ||
Eligibility for the credit does not depend on the continuous | ||
employment of any particular individual. For purposes of this | ||
subsection (f), if a new employee ceases to be employed before | ||
the completion of the 12-month period for any reason, the net | ||
increase in the number of full-time Illinois employees shall be | ||
treated as continuous if a different new employee is hired as a | ||
replacement within a reasonable time for the same position.
| ||
(Source: P.A. 96-888, eff. 4-13-10; 96-1498, eff. 1-18-11.) | ||
Section 15-20. The Use Tax Act is amended by changing | ||
Sections 3-5, 3-10, and 3-90 as follows:
| ||
(35 ILCS 105/3-5)
| ||
Sec. 3-5. Exemptions. Use of the following tangible | ||
personal property
is exempt from the tax imposed by this Act:
| ||
(1) Personal property purchased from a corporation, | ||
society, association,
foundation, institution, or | ||
organization, other than a limited liability
company, that is | ||
organized and operated as a not-for-profit service enterprise
| ||
for the benefit of persons 65 years of age or older if the | ||
personal property
was not purchased by the enterprise for the | ||
purpose of resale by the
enterprise.
| ||
(2) Personal property purchased by a not-for-profit | ||
Illinois county
fair association for use in conducting, |
operating, or promoting the
county fair.
| ||
(3) Personal property purchased by a not-for-profit
arts or | ||
cultural organization that establishes, by proof required by | ||
the
Department by
rule, that it has received an exemption under | ||
Section 501(c)(3) of the Internal
Revenue Code and that is | ||
organized and operated primarily for the
presentation
or | ||
support of arts or cultural programming, activities, or | ||
services. These
organizations include, but are not limited to, | ||
music and dramatic arts
organizations such as symphony | ||
orchestras and theatrical groups, arts and
cultural service | ||
organizations, local arts councils, visual arts organizations,
| ||
and media arts organizations.
On and after the effective date | ||
of this amendatory Act of the 92nd General
Assembly, however, | ||
an entity otherwise eligible for this exemption shall not
make | ||
tax-free purchases unless it has an active identification | ||
number issued by
the Department.
| ||
(4) Personal property purchased by a governmental body, by | ||
a
corporation, society, association, foundation, or | ||
institution organized and
operated exclusively for charitable, | ||
religious, or educational purposes, or
by a not-for-profit | ||
corporation, society, association, foundation,
institution, or | ||
organization that has no compensated officers or employees
and | ||
that is organized and operated primarily for the recreation of | ||
persons
55 years of age or older. A limited liability company | ||
may qualify for the
exemption under this paragraph only if the | ||
limited liability company is
organized and operated |
exclusively for educational purposes. On and after July
1, | ||
1987, however, no entity otherwise eligible for this exemption | ||
shall make
tax-free purchases unless it has an active exemption | ||
identification number
issued by the Department.
| ||
(5) Until July 1, 2003, a passenger car that is a | ||
replacement vehicle to
the extent that the
purchase price of | ||
the car is subject to the Replacement Vehicle Tax.
| ||
(6) Until July 1, 2003 and beginning again on September 1, | ||
2004 through August 30, 2014, graphic arts machinery and | ||
equipment, including
repair and replacement
parts, both new and | ||
used, and including that manufactured on special order,
| ||
certified by the purchaser to be used primarily for graphic | ||
arts production,
and including machinery and equipment | ||
purchased for lease.
Equipment includes chemicals or chemicals | ||
acting as catalysts but only if
the
chemicals or chemicals | ||
acting as catalysts effect a direct and immediate change
upon a | ||
graphic arts product.
| ||
(7) Farm chemicals.
| ||
(8) Legal tender, currency, medallions, or gold or silver | ||
coinage issued by
the State of Illinois, the government of the | ||
United States of America, or the
government of any foreign | ||
country, and bullion.
| ||
(9) Personal property purchased from a teacher-sponsored | ||
student
organization affiliated with an elementary or | ||
secondary school located in
Illinois.
| ||
(10) A motor vehicle of the first division, a motor vehicle |
of the
second division that is a self-contained motor vehicle | ||
designed or
permanently converted to provide living quarters | ||
for recreational, camping,
or travel use, with direct walk | ||
through to the living quarters from the
driver's seat, or a | ||
motor vehicle of the second division that is of the
van | ||
configuration designed for the transportation of not less than | ||
7 nor
more than 16 passengers, as defined in Section 1-146 of | ||
the Illinois
Vehicle Code, that is used for automobile renting, | ||
as defined in the
Automobile Renting Occupation and Use Tax | ||
Act.
| ||
(11) Farm machinery and equipment, both new and used,
| ||
including that manufactured on special order, certified by the | ||
purchaser
to be used primarily for production agriculture or | ||
State or federal
agricultural programs, including individual | ||
replacement parts for
the machinery and equipment, including | ||
machinery and equipment
purchased
for lease,
and including | ||
implements of husbandry defined in Section 1-130 of
the | ||
Illinois Vehicle Code, farm machinery and agricultural | ||
chemical and
fertilizer spreaders, and nurse wagons required to | ||
be registered
under Section 3-809 of the Illinois Vehicle Code,
| ||
but excluding other motor
vehicles required to be
registered | ||
under the Illinois Vehicle Code.
Horticultural polyhouses or | ||
hoop houses used for propagating, growing, or
overwintering | ||
plants shall be considered farm machinery and equipment under
| ||
this item (11).
Agricultural chemical tender tanks and dry | ||
boxes shall include units sold
separately from a motor vehicle |
required to be licensed and units sold mounted
on a motor | ||
vehicle required to be licensed if the selling price of the | ||
tender
is separately stated.
| ||
Farm machinery and equipment shall include precision | ||
farming equipment
that is
installed or purchased to be | ||
installed on farm machinery and equipment
including, but not | ||
limited to, tractors, harvesters, sprayers, planters,
seeders, | ||
or spreaders.
Precision farming equipment includes, but is not | ||
limited to, soil testing
sensors, computers, monitors, | ||
software, global positioning
and mapping systems, and other | ||
such equipment.
| ||
Farm machinery and equipment also includes computers, | ||
sensors, software, and
related equipment used primarily in the
| ||
computer-assisted operation of production agriculture | ||
facilities, equipment,
and
activities such as, but not limited | ||
to,
the collection, monitoring, and correlation of
animal and | ||
crop data for the purpose of
formulating animal diets and | ||
agricultural chemicals. This item (11) is exempt
from the | ||
provisions of
Section 3-90.
| ||
(12) Fuel and petroleum products sold to or used by an air | ||
common
carrier, certified by the carrier to be used for | ||
consumption, shipment, or
storage in the conduct of its | ||
business as an air common carrier, for a
flight destined for or | ||
returning from a location or locations
outside the United | ||
States without regard to previous or subsequent domestic
| ||
stopovers.
|
(13) Proceeds of mandatory service charges separately
| ||
stated on customers' bills for the purchase and consumption of | ||
food and
beverages purchased at retail from a retailer, to the | ||
extent that the proceeds
of the service charge are in fact | ||
turned over as tips or as a substitute
for tips to the | ||
employees who participate directly in preparing, serving,
| ||
hosting or cleaning up the food or beverage function with | ||
respect to which
the service charge is imposed.
| ||
(14) Until July 1, 2003, oil field exploration, drilling, | ||
and production
equipment,
including (i) rigs and parts of rigs, | ||
rotary
rigs, cable tool rigs, and workover rigs, (ii) pipe and | ||
tubular goods,
including casing and drill strings, (iii) pumps | ||
and pump-jack units, (iv)
storage tanks and flow lines, (v) any | ||
individual replacement part for oil
field exploration, | ||
drilling, and production equipment, and (vi) machinery and
| ||
equipment purchased
for lease; but excluding motor vehicles | ||
required to be registered under the
Illinois Vehicle Code.
| ||
(15) Photoprocessing machinery and equipment, including | ||
repair and
replacement parts, both new and used, including that
| ||
manufactured on special order, certified by the purchaser to be | ||
used
primarily for photoprocessing, and including
| ||
photoprocessing machinery and equipment purchased for lease.
| ||
(16) Until July 1, 2003, coal exploration, mining, | ||
offhighway hauling,
processing, maintenance, and reclamation | ||
equipment,
including replacement parts and equipment, and
| ||
including equipment purchased for lease, but excluding motor
|
vehicles required to be registered under the Illinois Vehicle | ||
Code.
| ||
(17) Until July 1, 2003, distillation machinery and | ||
equipment, sold as a
unit or kit,
assembled or installed by the | ||
retailer, certified by the user to be used
only for the | ||
production of ethyl alcohol that will be used for consumption
| ||
as motor fuel or as a component of motor fuel for the personal | ||
use of the
user, and not subject to sale or resale.
| ||
(18) Manufacturing and assembling machinery and equipment | ||
used
primarily in the process of manufacturing or assembling | ||
tangible
personal property for wholesale or retail sale or | ||
lease, whether that sale
or lease is made directly by the | ||
manufacturer or by some other person,
whether the materials | ||
used in the process are
owned by the manufacturer or some other | ||
person, or whether that sale or
lease is made apart from or as | ||
an incident to the seller's engaging in
the service occupation | ||
of producing machines, tools, dies, jigs,
patterns, gauges, or | ||
other similar items of no commercial value on
special order for | ||
a particular purchaser.
| ||
(19) Personal property delivered to a purchaser or | ||
purchaser's donee
inside Illinois when the purchase order for | ||
that personal property was
received by a florist located | ||
outside Illinois who has a florist located
inside Illinois | ||
deliver the personal property.
| ||
(20) Semen used for artificial insemination of livestock | ||
for direct
agricultural production.
|
(21) Horses, or interests in horses, registered with and | ||
meeting the
requirements of any of the
Arabian Horse Club | ||
Registry of America, Appaloosa Horse Club, American Quarter
| ||
Horse Association, United States
Trotting Association, or | ||
Jockey Club, as appropriate, used for
purposes of breeding or | ||
racing for prizes. This item (21) is exempt from the provisions | ||
of Section 3-90, and the exemption provided for under this item | ||
(21) applies for all periods beginning May 30, 1995, but no | ||
claim for credit or refund is allowed on or after January 1, | ||
2008
for such taxes paid during the period beginning May 30, | ||
2000 and ending on January 1, 2008.
| ||
(22) Computers and communications equipment utilized for | ||
any
hospital
purpose
and equipment used in the diagnosis,
| ||
analysis, or treatment of hospital patients purchased by a | ||
lessor who leases
the
equipment, under a lease of one year or | ||
longer executed or in effect at the
time the lessor would | ||
otherwise be subject to the tax imposed by this Act, to a
| ||
hospital
that has been issued an active tax exemption | ||
identification number by
the
Department under Section 1g of the | ||
Retailers' Occupation Tax Act. If the
equipment is leased in a | ||
manner that does not qualify for
this exemption or is used in | ||
any other non-exempt manner, the lessor
shall be liable for the
| ||
tax imposed under this Act or the Service Use Tax Act, as the | ||
case may
be, based on the fair market value of the property at | ||
the time the
non-qualifying use occurs. No lessor shall collect | ||
or attempt to collect an
amount (however
designated) that |
purports to reimburse that lessor for the tax imposed by this
| ||
Act or the Service Use Tax Act, as the case may be, if the tax | ||
has not been
paid by the lessor. If a lessor improperly | ||
collects any such amount from the
lessee, the lessee shall have | ||
a legal right to claim a refund of that amount
from the lessor. | ||
If, however, that amount is not refunded to the lessee for
any | ||
reason, the lessor is liable to pay that amount to the | ||
Department.
| ||
(23) Personal property purchased by a lessor who leases the
| ||
property, under
a
lease of
one year or longer executed or in | ||
effect at the time
the lessor would otherwise be subject to the | ||
tax imposed by this Act,
to a governmental body
that has been | ||
issued an active sales tax exemption identification number by | ||
the
Department under Section 1g of the Retailers' Occupation | ||
Tax Act.
If the
property is leased in a manner that does not | ||
qualify for
this exemption
or used in any other non-exempt | ||
manner, the lessor shall be liable for the
tax imposed under | ||
this Act or the Service Use Tax Act, as the case may
be, based | ||
on the fair market value of the property at the time the
| ||
non-qualifying use occurs. No lessor shall collect or attempt | ||
to collect an
amount (however
designated) that purports to | ||
reimburse that lessor for the tax imposed by this
Act or the | ||
Service Use Tax Act, as the case may be, if the tax has not been
| ||
paid by the lessor. If a lessor improperly collects any such | ||
amount from the
lessee, the lessee shall have a legal right to | ||
claim a refund of that amount
from the lessor. If, however, |
that amount is not refunded to the lessee for
any reason, the | ||
lessor is liable to pay that amount to the Department.
| ||
(24) Beginning with taxable years ending on or after | ||
December
31, 1995
and
ending with taxable years ending on or | ||
before December 31, 2004,
personal property that is
donated for | ||
disaster relief to be used in a State or federally declared
| ||
disaster area in Illinois or bordering Illinois by a | ||
manufacturer or retailer
that is registered in this State to a | ||
corporation, society, association,
foundation, or institution | ||
that has been issued a sales tax exemption
identification | ||
number by the Department that assists victims of the disaster
| ||
who reside within the declared disaster area.
| ||
(25) Beginning with taxable years ending on or after | ||
December
31, 1995 and
ending with taxable years ending on or | ||
before December 31, 2004, personal
property that is used in the | ||
performance of infrastructure repairs in this
State, including | ||
but not limited to municipal roads and streets, access roads,
| ||
bridges, sidewalks, waste disposal systems, water and sewer | ||
line extensions,
water distribution and purification | ||
facilities, storm water drainage and
retention facilities, and | ||
sewage treatment facilities, resulting from a State
or | ||
federally declared disaster in Illinois or bordering Illinois | ||
when such
repairs are initiated on facilities located in the | ||
declared disaster area
within 6 months after the disaster.
| ||
(26) Beginning July 1, 1999, game or game birds purchased | ||
at a "game
breeding
and hunting preserve area" as that term is
|
used in
the Wildlife Code. This paragraph is exempt from the | ||
provisions
of
Section 3-90.
| ||
(27) A motor vehicle, as that term is defined in Section | ||
1-146
of the
Illinois
Vehicle Code, that is donated to a | ||
corporation, limited liability company,
society, association, | ||
foundation, or institution that is determined by the
Department | ||
to be organized and operated exclusively for educational | ||
purposes.
For purposes of this exemption, "a corporation, | ||
limited liability company,
society, association, foundation, | ||
or institution organized and operated
exclusively for | ||
educational purposes" means all tax-supported public schools,
| ||
private schools that offer systematic instruction in useful | ||
branches of
learning by methods common to public schools and | ||
that compare favorably in
their scope and intensity with the | ||
course of study presented in tax-supported
schools, and | ||
vocational or technical schools or institutes organized and
| ||
operated exclusively to provide a course of study of not less | ||
than 6 weeks
duration and designed to prepare individuals to | ||
follow a trade or to pursue a
manual, technical, mechanical, | ||
industrial, business, or commercial
occupation.
| ||
(28) Beginning January 1, 2000, personal property, | ||
including
food,
purchased through fundraising
events for the | ||
benefit of
a public or private elementary or
secondary school, | ||
a group of those schools, or one or more school
districts if | ||
the events are
sponsored by an entity recognized by the school | ||
district that consists
primarily of volunteers and includes
|
parents and teachers of the school children. This paragraph | ||
does not apply
to fundraising
events (i) for the benefit of | ||
private home instruction or (ii)
for which the fundraising | ||
entity purchases the personal property sold at
the events from | ||
another individual or entity that sold the property for the
| ||
purpose of resale by the fundraising entity and that
profits | ||
from the sale to the
fundraising entity. This paragraph is | ||
exempt
from the provisions
of Section 3-90.
| ||
(29) Beginning January 1, 2000 and through December 31, | ||
2001, new or
used automatic vending
machines that prepare and | ||
serve hot food and beverages, including coffee, soup,
and
other | ||
items, and replacement parts for these machines.
Beginning | ||
January 1,
2002 and through June 30, 2003, machines and parts | ||
for machines used in
commercial, coin-operated amusement and | ||
vending business if a use or occupation
tax is paid on the | ||
gross receipts derived from the use of the commercial,
| ||
coin-operated amusement and vending machines.
This
paragraph
| ||
is exempt from the provisions of Section 3-90.
| ||
(30) Beginning January 1, 2001 and through June 30, 2016 | ||
June 30, 2011 , food for human consumption that is to be | ||
consumed off the premises
where it is sold (other than | ||
alcoholic beverages, soft drinks, and food that
has been | ||
prepared for immediate consumption) and prescription and
| ||
nonprescription medicines, drugs, medical appliances, and | ||
insulin, urine
testing materials, syringes, and needles used by | ||
diabetics, for human use, when
purchased for use by a person |
receiving medical assistance under Article V of
the Illinois | ||
Public Aid Code who resides in a licensed long-term care | ||
facility,
as defined in the Nursing Home Care Act, or in a | ||
licensed facility as defined in the ID/DD Community Care Act or | ||
the Specialized Mental Health Rehabilitation Act.
| ||
(31) Beginning on
the effective date of this amendatory Act | ||
of the 92nd General Assembly,
computers and communications | ||
equipment
utilized for any hospital purpose and equipment used | ||
in the diagnosis,
analysis, or treatment of hospital patients | ||
purchased by a lessor who leases
the equipment, under a lease | ||
of one year or longer executed or in effect at the
time the | ||
lessor would otherwise be subject to the tax imposed by this | ||
Act, to a
hospital that has been issued an active tax exemption | ||
identification number by
the Department under Section 1g of the | ||
Retailers' Occupation Tax Act. If the
equipment is leased in a | ||
manner that does not qualify for this exemption or is
used in | ||
any other nonexempt manner, the lessor shall be liable for the | ||
tax
imposed under this Act or the Service Use Tax Act, as the | ||
case may be, based on
the fair market value of the property at | ||
the time the nonqualifying use
occurs. No lessor shall collect | ||
or attempt to collect an amount (however
designated) that | ||
purports to reimburse that lessor for the tax imposed by this
| ||
Act or the Service Use Tax Act, as the case may be, if the tax | ||
has not been
paid by the lessor. If a lessor improperly | ||
collects any such amount from the
lessee, the lessee shall have | ||
a legal right to claim a refund of that amount
from the lessor. |
If, however, that amount is not refunded to the lessee for
any | ||
reason, the lessor is liable to pay that amount to the | ||
Department.
This paragraph is exempt from the provisions of | ||
Section 3-90.
| ||
(32) Beginning on
the effective date of this amendatory Act | ||
of the 92nd General Assembly,
personal property purchased by a | ||
lessor who leases the property,
under a lease of one year or | ||
longer executed or in effect at the time the
lessor would | ||
otherwise be subject to the tax imposed by this Act, to a
| ||
governmental body that has been issued an active sales tax | ||
exemption
identification number by the Department under | ||
Section 1g of the Retailers'
Occupation Tax Act. If the | ||
property is leased in a manner that does not
qualify for this | ||
exemption or used in any other nonexempt manner, the lessor
| ||
shall be liable for the tax imposed under this Act or the | ||
Service Use Tax Act,
as the case may be, based on the fair | ||
market value of the property at the time
the nonqualifying use | ||
occurs. No lessor shall collect or attempt to collect
an amount | ||
(however designated) that purports to reimburse that lessor for | ||
the
tax imposed by this Act or the Service Use Tax Act, as the | ||
case may be, if the
tax has not been paid by the lessor. If a | ||
lessor improperly collects any such
amount from the lessee, the | ||
lessee shall have a legal right to claim a refund
of that | ||
amount from the lessor. If, however, that amount is not | ||
refunded to
the lessee for any reason, the lessor is liable to | ||
pay that amount to the
Department. This paragraph is exempt |
from the provisions of Section 3-90.
| ||
(33) On and after July 1, 2003 and through June 30, 2004, | ||
the use in this State of motor vehicles of
the second division | ||
with a gross vehicle weight in excess of 8,000 pounds and
that | ||
are subject to the commercial distribution fee imposed under | ||
Section
3-815.1 of the Illinois Vehicle Code. Beginning on July | ||
1, 2004 and through June 30, 2005, the use in this State of | ||
motor vehicles of the second division: (i) with a gross vehicle | ||
weight rating in excess of 8,000 pounds; (ii) that are subject | ||
to the commercial distribution fee imposed under Section | ||
3-815.1 of the Illinois Vehicle Code; and (iii) that are | ||
primarily used for commercial purposes. Through June 30, 2005, | ||
this exemption applies to repair and
replacement parts added | ||
after the initial purchase of such a motor vehicle if
that | ||
motor
vehicle is used in a manner that would qualify for the | ||
rolling stock exemption
otherwise provided for in this Act. For | ||
purposes of this paragraph, the term "used for commercial | ||
purposes" means the transportation of persons or property in | ||
furtherance of any commercial or industrial enterprise, | ||
whether for-hire or not.
| ||
(34) Beginning January 1, 2008, tangible personal property | ||
used in the construction or maintenance of a community water | ||
supply, as defined under Section 3.145 of the Environmental | ||
Protection Act, that is operated by a not-for-profit | ||
corporation that holds a valid water supply permit issued under | ||
Title IV of the Environmental Protection Act. This paragraph is |
exempt from the provisions of Section 3-90. | ||
(35) Beginning January 1, 2010, materials, parts, | ||
equipment, components, and furnishings incorporated into or | ||
upon an aircraft as part of the modification, refurbishment, | ||
completion, replacement, repair, or maintenance of the | ||
aircraft. This exemption includes consumable supplies used in | ||
the modification, refurbishment, completion, replacement, | ||
repair, and maintenance of aircraft, but excludes any | ||
materials, parts, equipment, components, and consumable | ||
supplies used in the modification, replacement, repair, and | ||
maintenance of aircraft engines or power plants, whether such | ||
engines or power plants are installed or uninstalled upon any | ||
such aircraft. "Consumable supplies" include, but are not | ||
limited to, adhesive, tape, sandpaper, general purpose | ||
lubricants, cleaning solution, latex gloves, and protective | ||
films. This exemption applies only to those organizations that | ||
(i) hold an Air Agency Certificate and are empowered to operate | ||
an approved repair station by the Federal Aviation | ||
Administration, (ii) have a Class IV Rating, and (iii) conduct | ||
operations in accordance with Part 145 of the Federal Aviation | ||
Regulations. The exemption does not include aircraft operated | ||
by a commercial air carrier providing scheduled passenger air | ||
service pursuant to authority issued under Part 121 or Part 129 | ||
of the Federal Aviation Regulations. | ||
(36) Tangible personal property purchased by a | ||
public-facilities corporation, as described in Section |
11-65-10 of the Illinois Municipal Code, for purposes of | ||
constructing or furnishing a municipal convention hall, but | ||
only if the legal title to the municipal convention hall is | ||
transferred to the municipality without any further | ||
consideration by or on behalf of the municipality at the time | ||
of the completion of the municipal convention hall or upon the | ||
retirement or redemption of any bonds or other debt instruments | ||
issued by the public-facilities corporation in connection with | ||
the development of the municipal convention hall. This | ||
exemption includes existing public-facilities corporations as | ||
provided in Section 11-65-25 of the Illinois Municipal Code. | ||
This paragraph is exempt from the provisions of Section 3-90. | ||
(Source: P.A. 96-116, eff. 7-31-09; 96-339, eff. 7-1-10; | ||
96-532, eff. 8-14-09; 96-759, eff. 1-1-10; 96-1000, eff. | ||
7-2-10; 97-38, eff. 6-28-11; 97-227, eff. 1-1-12; 97-431, eff. | ||
8-16-11; revised 9-12-11.)
| ||
(35 ILCS 105/3-10)
| ||
Sec. 3-10. Rate of tax. Unless otherwise provided in this | ||
Section, the tax
imposed by this Act is at the rate of 6.25% of | ||
either the selling price or the
fair market value, if any, of | ||
the tangible personal property. In all cases
where property | ||
functionally used or consumed is the same as the property that
| ||
was purchased at retail, then the tax is imposed on the selling | ||
price of the
property. In all cases where property functionally | ||
used or consumed is a
by-product or waste product that has been |
refined, manufactured, or produced
from property purchased at | ||
retail, then the tax is imposed on the lower of the
fair market | ||
value, if any, of the specific property so used in this State | ||
or on
the selling price of the property purchased at retail. | ||
For purposes of this
Section "fair market value" means the | ||
price at which property would change
hands between a willing | ||
buyer and a willing seller, neither being under any
compulsion | ||
to buy or sell and both having reasonable knowledge of the
| ||
relevant facts. The fair market value shall be established by | ||
Illinois sales by
the taxpayer of the same property as that | ||
functionally used or consumed, or if
there are no such sales by | ||
the taxpayer, then comparable sales or purchases of
property of | ||
like kind and character in Illinois.
| ||
Beginning on July 1, 2000 and through December 31, 2000, | ||
with respect to
motor fuel, as defined in Section 1.1 of the | ||
Motor Fuel Tax
Law, and gasohol, as defined in Section 3-40 of | ||
the Use Tax Act, the tax is
imposed at the rate of 1.25%.
| ||
Beginning on August 6, 2010 through August 15, 2010, with | ||
respect to sales tax holiday items as defined in Section 3-6 of | ||
this Act, the
tax is imposed at the rate of 1.25%. | ||
With respect to gasohol, the tax imposed by this Act | ||
applies to (i) 70%
of the proceeds of sales made on or after | ||
January 1, 1990, and before
July 1, 2003, (ii) 80% of the | ||
proceeds of sales made
on or after July 1, 2003 and on or | ||
before December 31, 2018 2013 , and (iii) 100% of the proceeds | ||
of sales made
thereafter.
If, at any time, however, the tax |
under this Act on sales of gasohol is
imposed at the
rate of | ||
1.25%, then the tax imposed by this Act applies to 100% of the | ||
proceeds
of sales of gasohol made during that time.
| ||
With respect to majority blended ethanol fuel, the tax | ||
imposed by this Act
does
not apply
to the proceeds of sales | ||
made on or after July 1, 2003 and on or before
December
31, | ||
2018 2013 but applies to 100% of the proceeds of sales made | ||
thereafter.
| ||
With respect to biodiesel blends with no less than 1% and | ||
no more than 10%
biodiesel, the tax imposed by this Act applies | ||
to (i) 80% of the
proceeds of sales made on or after July 1, | ||
2003 and on or before December 31, 2018
2013 and (ii) 100% of | ||
the proceeds of sales made
thereafter.
If, at any time, | ||
however, the tax under this Act on sales of biodiesel blends
| ||
with no less than 1% and no more than 10% biodiesel
is imposed | ||
at the rate of
1.25%, then the
tax imposed by this Act applies | ||
to 100% of the proceeds of sales of biodiesel
blends with no | ||
less than 1% and no more than 10% biodiesel
made
during that | ||
time.
| ||
With respect to 100% biodiesel and biodiesel blends with | ||
more than 10%
but no more than 99% biodiesel, the tax imposed | ||
by this Act does not apply to
the
proceeds of sales made on or | ||
after July 1, 2003 and on or before
December 31, 2018 2013 but | ||
applies to 100% of the proceeds of sales made
thereafter.
| ||
With respect to food for human consumption that is to be | ||
consumed off the
premises where it is sold (other than |
alcoholic beverages, soft drinks, and
food that has been | ||
prepared for immediate consumption) and prescription and
| ||
nonprescription medicines, drugs, medical appliances, | ||
modifications to a motor
vehicle for the purpose of rendering | ||
it usable by a disabled person, and
insulin, urine testing | ||
materials, syringes, and needles used by diabetics, for
human | ||
use, the tax is imposed at the rate of 1%. For the purposes of | ||
this
Section, until September 1, 2009: the term "soft drinks" | ||
means any complete, finished, ready-to-use,
non-alcoholic | ||
drink, whether carbonated or not, including but not limited to
| ||
soda water, cola, fruit juice, vegetable juice, carbonated | ||
water, and all other
preparations commonly known as soft drinks | ||
of whatever kind or description that
are contained in any | ||
closed or sealed bottle, can, carton, or container,
regardless | ||
of size; but "soft drinks" does not include coffee, tea, | ||
non-carbonated
water, infant formula, milk or milk products as | ||
defined in the Grade A
Pasteurized Milk and Milk Products Act, | ||
or drinks containing 50% or more
natural fruit or vegetable | ||
juice.
| ||
Notwithstanding any other provisions of this
Act, | ||
beginning September 1, 2009, "soft drinks" means non-alcoholic | ||
beverages that contain natural or artificial sweeteners. "Soft | ||
drinks" do not include beverages that contain milk or milk | ||
products, soy, rice or similar milk substitutes, or greater | ||
than 50% of vegetable or fruit juice by volume. | ||
Until August 1, 2009, and notwithstanding any other |
provisions of this
Act, "food for human consumption that is to | ||
be consumed off the premises where
it is sold" includes all | ||
food sold through a vending machine, except soft
drinks and | ||
food products that are dispensed hot from a vending machine,
| ||
regardless of the location of the vending machine. Beginning | ||
August 1, 2009, and notwithstanding any other provisions of | ||
this Act, "food for human consumption that is to be consumed | ||
off the premises where it is sold" includes all food sold | ||
through a vending machine, except soft drinks, candy, and food | ||
products that are dispensed hot from a vending machine, | ||
regardless of the location of the vending machine.
| ||
Notwithstanding any other provisions of this
Act, | ||
beginning September 1, 2009, "food for human consumption that | ||
is to be consumed off the premises where
it is sold" does not | ||
include candy. For purposes of this Section, "candy" means a | ||
preparation of sugar, honey, or other natural or artificial | ||
sweeteners in combination with chocolate, fruits, nuts or other | ||
ingredients or flavorings in the form of bars, drops, or | ||
pieces. "Candy" does not include any preparation that contains | ||
flour or requires refrigeration. | ||
Notwithstanding any other provisions of this
Act, | ||
beginning September 1, 2009, "nonprescription medicines and | ||
drugs" does not include grooming and hygiene products. For | ||
purposes of this Section, "grooming and hygiene products" | ||
includes, but is not limited to, soaps and cleaning solutions, | ||
shampoo, toothpaste, mouthwash, antiperspirants, and sun tan |
lotions and screens, unless those products are available by | ||
prescription only, regardless of whether the products meet the | ||
definition of "over-the-counter-drugs". For the purposes of | ||
this paragraph, "over-the-counter-drug" means a drug for human | ||
use that contains a label that identifies the product as a drug | ||
as required by 21 C.F.R. ยง 201.66. The "over-the-counter-drug" | ||
label includes: | ||
(A) A "Drug Facts" panel; or | ||
(B) A statement of the "active ingredient(s)" with a | ||
list of those ingredients contained in the compound, | ||
substance or preparation. | ||
If the property that is purchased at retail from a retailer | ||
is acquired
outside Illinois and used outside Illinois before | ||
being brought to Illinois
for use here and is taxable under | ||
this Act, the "selling price" on which
the tax is computed | ||
shall be reduced by an amount that represents a
reasonable | ||
allowance for depreciation for the period of prior out-of-state | ||
use.
| ||
(Source: P.A. 96-34, eff. 7-13-09; 96-37, eff. 7-13-09; 96-38, | ||
eff. 7-13-09; 96-1000, eff. 7-2-10; 96-1012, eff. 7-7-10.)
| ||
(35 ILCS 105/3-90)
| ||
Sec. 3-90. Sunset of exemptions, credits, and deductions. | ||
(a) The application
of every exemption, credit, and | ||
deduction against tax imposed by this Act that
becomes law | ||
after the effective date of this amendatory Act of 1994 shall |
be
limited by a reasonable and appropriate sunset date. A | ||
taxpayer is not
entitled to take the exemption, credit, or | ||
deduction beginning on the sunset
date and thereafter. Except | ||
as provided in subsection (b) of this Section, if If a | ||
reasonable and appropriate sunset date is not
specified in the | ||
Public Act that creates the exemption, credit, or deduction, a
| ||
taxpayer shall not be entitled to take the exemption, credit, | ||
or deduction
beginning 5 years after the effective date of the | ||
Public Act creating the
exemption, credit, or deduction and | ||
thereafter.
| ||
(b) Notwithstanding the provisions of subsection (a) of | ||
this Section, the sunset date of any exemption, credit, or | ||
deduction that is scheduled to expire in 2011, 2012, or 2013 by | ||
operation of this Section shall be extended by 5 years. | ||
(Source: P.A. 88-660, eff. 9-16-94; 89-235, eff.
8-4-95.)
| ||
Section 15-25. The Service Use Tax Act is amended by | ||
changing Sections 3-5, 3-10, and 3-75 as follows:
| ||
(35 ILCS 110/3-5)
| ||
Sec. 3-5. Exemptions. Use of the following tangible | ||
personal property
is exempt from the tax imposed by this Act:
| ||
(1) Personal property purchased from a corporation, | ||
society,
association, foundation, institution, or | ||
organization, other than a limited
liability company, that is | ||
organized and operated as a not-for-profit service
enterprise |
for the benefit of persons 65 years of age or older if the | ||
personal
property was not purchased by the enterprise for the | ||
purpose of resale by the
enterprise.
| ||
(2) Personal property purchased by a non-profit Illinois | ||
county fair
association for use in conducting, operating, or | ||
promoting the county fair.
| ||
(3) Personal property purchased by a not-for-profit arts
or | ||
cultural
organization that establishes, by proof required by | ||
the Department by rule,
that it has received an exemption under | ||
Section 501(c)(3) of the Internal
Revenue Code and that is | ||
organized and operated primarily for the
presentation
or | ||
support of arts or cultural programming, activities, or | ||
services. These
organizations include, but are not limited to, | ||
music and dramatic arts
organizations such as symphony | ||
orchestras and theatrical groups, arts and
cultural service | ||
organizations, local arts councils, visual arts organizations,
| ||
and media arts organizations.
On and after the effective date | ||
of this amendatory Act of the 92nd General
Assembly, however, | ||
an entity otherwise eligible for this exemption shall not
make | ||
tax-free purchases unless it has an active identification | ||
number issued by
the Department.
| ||
(4) Legal tender, currency, medallions, or gold or silver | ||
coinage issued
by the State of Illinois, the government of the | ||
United States of America,
or the government of any foreign | ||
country, and bullion.
| ||
(5) Until July 1, 2003 and beginning again on September 1, |
2004 through August 30, 2014, graphic arts machinery and | ||
equipment, including
repair and
replacement parts, both new and | ||
used, and including that manufactured on
special order or | ||
purchased for lease, certified by the purchaser to be used
| ||
primarily for graphic arts production.
Equipment includes | ||
chemicals or
chemicals acting as catalysts but only if
the | ||
chemicals or chemicals acting as catalysts effect a direct and | ||
immediate
change upon a graphic arts product.
| ||
(6) Personal property purchased from a teacher-sponsored | ||
student
organization affiliated with an elementary or | ||
secondary school located
in Illinois.
| ||
(7) Farm machinery and equipment, both new and used, | ||
including that
manufactured on special order, certified by the | ||
purchaser to be used
primarily for production agriculture or | ||
State or federal agricultural
programs, including individual | ||
replacement parts for the machinery and
equipment, including | ||
machinery and equipment purchased for lease,
and including | ||
implements of husbandry defined in Section 1-130 of
the | ||
Illinois Vehicle Code, farm machinery and agricultural | ||
chemical and
fertilizer spreaders, and nurse wagons required to | ||
be registered
under Section 3-809 of the Illinois Vehicle Code,
| ||
but
excluding other motor vehicles required to be registered | ||
under the Illinois
Vehicle Code.
Horticultural polyhouses or | ||
hoop houses used for propagating, growing, or
overwintering | ||
plants shall be considered farm machinery and equipment under
| ||
this item (7).
Agricultural chemical tender tanks and dry boxes |
shall include units sold
separately from a motor vehicle | ||
required to be licensed and units sold mounted
on a motor | ||
vehicle required to be licensed if the selling price of the | ||
tender
is separately stated.
| ||
Farm machinery and equipment shall include precision | ||
farming equipment
that is
installed or purchased to be | ||
installed on farm machinery and equipment
including, but not | ||
limited to, tractors, harvesters, sprayers, planters,
seeders, | ||
or spreaders.
Precision farming equipment includes, but is not | ||
limited to,
soil testing sensors, computers, monitors, | ||
software, global positioning
and mapping systems, and other | ||
such equipment.
| ||
Farm machinery and equipment also includes computers, | ||
sensors, software, and
related equipment used primarily in the
| ||
computer-assisted operation of production agriculture | ||
facilities, equipment,
and activities such as, but
not limited | ||
to,
the collection, monitoring, and correlation of
animal and | ||
crop data for the purpose of
formulating animal diets and | ||
agricultural chemicals. This item (7) is exempt
from the | ||
provisions of
Section 3-75.
| ||
(8) Fuel and petroleum products sold to or used by an air | ||
common
carrier, certified by the carrier to be used for | ||
consumption, shipment, or
storage in the conduct of its | ||
business as an air common carrier, for a
flight destined for or | ||
returning from a location or locations
outside the United | ||
States without regard to previous or subsequent domestic
|
stopovers.
| ||
(9) Proceeds of mandatory service charges separately | ||
stated on
customers' bills for the purchase and consumption of | ||
food and beverages
acquired as an incident to the purchase of a | ||
service from a serviceman, to
the extent that the proceeds of | ||
the service charge are in fact
turned over as tips or as a | ||
substitute for tips to the employees who
participate directly | ||
in preparing, serving, hosting or cleaning up the
food or | ||
beverage function with respect to which the service charge is | ||
imposed.
| ||
(10) Until July 1, 2003, oil field exploration, drilling, | ||
and production
equipment, including
(i) rigs and parts of rigs, | ||
rotary rigs, cable tool
rigs, and workover rigs, (ii) pipe and | ||
tubular goods, including casing and
drill strings, (iii) pumps | ||
and pump-jack units, (iv) storage tanks and flow
lines, (v) any | ||
individual replacement part for oil field exploration,
| ||
drilling, and production equipment, and (vi) machinery and | ||
equipment purchased
for lease; but
excluding motor vehicles | ||
required to be registered under the Illinois
Vehicle Code.
| ||
(11) Proceeds from the sale of photoprocessing machinery | ||
and
equipment, including repair and replacement parts, both new | ||
and
used, including that manufactured on special order, | ||
certified by the
purchaser to be used primarily for | ||
photoprocessing, and including
photoprocessing machinery and | ||
equipment purchased for lease.
| ||
(12) Until July 1, 2003, coal exploration, mining, |
offhighway hauling,
processing,
maintenance, and reclamation | ||
equipment, including
replacement parts and equipment, and | ||
including
equipment purchased for lease, but excluding motor | ||
vehicles required to be
registered under the Illinois Vehicle | ||
Code.
| ||
(13) Semen used for artificial insemination of livestock | ||
for direct
agricultural production.
| ||
(14) Horses, or interests in horses, registered with and | ||
meeting the
requirements of any of the
Arabian Horse Club | ||
Registry of America, Appaloosa Horse Club, American Quarter
| ||
Horse Association, United States
Trotting Association, or | ||
Jockey Club, as appropriate, used for
purposes of breeding or | ||
racing for prizes. This item (14) is exempt from the provisions | ||
of Section 3-75, and the exemption provided for under this item | ||
(14) applies for all periods beginning May 30, 1995, but no | ||
claim for credit or refund is allowed on or after the effective | ||
date of this amendatory Act of the 95th General Assembly for | ||
such taxes paid during the period beginning May 30, 2000 and | ||
ending on the effective date of this amendatory Act of the 95th | ||
General Assembly.
| ||
(15) Computers and communications equipment utilized for | ||
any
hospital
purpose
and equipment used in the diagnosis,
| ||
analysis, or treatment of hospital patients purchased by a | ||
lessor who leases
the
equipment, under a lease of one year or | ||
longer executed or in effect at the
time
the lessor would | ||
otherwise be subject to the tax imposed by this Act,
to a
|
hospital
that has been issued an active tax exemption | ||
identification number by the
Department under Section 1g of the | ||
Retailers' Occupation Tax Act.
If the
equipment is leased in a | ||
manner that does not qualify for
this exemption
or is used in | ||
any other non-exempt manner,
the lessor shall be liable for the
| ||
tax imposed under this Act or the Use Tax Act, as the case may
| ||
be, based on the fair market value of the property at the time | ||
the
non-qualifying use occurs. No lessor shall collect or | ||
attempt to collect an
amount (however
designated) that purports | ||
to reimburse that lessor for the tax imposed by this
Act or the | ||
Use Tax Act, as the case may be, if the tax has not been
paid by | ||
the lessor. If a lessor improperly collects any such amount | ||
from the
lessee, the lessee shall have a legal right to claim a | ||
refund of that amount
from the lessor. If, however, that amount | ||
is not refunded to the lessee for
any reason, the lessor is | ||
liable to pay that amount to the Department.
| ||
(16) Personal property purchased by a lessor who leases the
| ||
property, under
a
lease of one year or longer executed or in | ||
effect at the time
the lessor would otherwise be subject to the | ||
tax imposed by this Act,
to a governmental body
that has been | ||
issued an active tax exemption identification number by the
| ||
Department under Section 1g of the Retailers' Occupation Tax | ||
Act.
If the
property is leased in a manner that does not | ||
qualify for
this exemption
or is used in any other non-exempt | ||
manner,
the lessor shall be liable for the
tax imposed under | ||
this Act or the Use Tax Act, as the case may
be, based on the |
fair market value of the property at the time the
| ||
non-qualifying use occurs. No lessor shall collect or attempt | ||
to collect an
amount (however
designated) that purports to | ||
reimburse that lessor for the tax imposed by this
Act or the | ||
Use Tax Act, as the case may be, if the tax has not been
paid by | ||
the lessor. If a lessor improperly collects any such amount | ||
from the
lessee, the lessee shall have a legal right to claim a | ||
refund of that amount
from the lessor. If, however, that amount | ||
is not refunded to the lessee for
any reason, the lessor is | ||
liable to pay that amount to the Department.
| ||
(17) Beginning with taxable years ending on or after | ||
December
31,
1995
and
ending with taxable years ending on or | ||
before December 31, 2004,
personal property that is
donated for | ||
disaster relief to be used in a State or federally declared
| ||
disaster area in Illinois or bordering Illinois by a | ||
manufacturer or retailer
that is registered in this State to a | ||
corporation, society, association,
foundation, or institution | ||
that has been issued a sales tax exemption
identification | ||
number by the Department that assists victims of the disaster
| ||
who reside within the declared disaster area.
| ||
(18) Beginning with taxable years ending on or after | ||
December
31, 1995 and
ending with taxable years ending on or | ||
before December 31, 2004, personal
property that is used in the | ||
performance of infrastructure repairs in this
State, including | ||
but not limited to municipal roads and streets, access roads,
| ||
bridges, sidewalks, waste disposal systems, water and sewer |
line extensions,
water distribution and purification | ||
facilities, storm water drainage and
retention facilities, and | ||
sewage treatment facilities, resulting from a State
or | ||
federally declared disaster in Illinois or bordering Illinois | ||
when such
repairs are initiated on facilities located in the | ||
declared disaster area
within 6 months after the disaster.
| ||
(19) Beginning July 1, 1999, game or game birds purchased | ||
at a "game
breeding
and hunting preserve area" as that term is
| ||
used in
the Wildlife Code. This paragraph is exempt from the | ||
provisions
of
Section 3-75.
| ||
(20) A motor vehicle, as that term is defined in Section | ||
1-146
of the
Illinois Vehicle Code, that is donated to a | ||
corporation, limited liability
company, society, association, | ||
foundation, or institution that is determined by
the Department | ||
to be organized and operated exclusively for educational
| ||
purposes. For purposes of this exemption, "a corporation, | ||
limited liability
company, society, association, foundation, | ||
or institution organized and
operated
exclusively for | ||
educational purposes" means all tax-supported public schools,
| ||
private schools that offer systematic instruction in useful | ||
branches of
learning by methods common to public schools and | ||
that compare favorably in
their scope and intensity with the | ||
course of study presented in tax-supported
schools, and | ||
vocational or technical schools or institutes organized and
| ||
operated exclusively to provide a course of study of not less | ||
than 6 weeks
duration and designed to prepare individuals to |
follow a trade or to pursue a
manual, technical, mechanical, | ||
industrial, business, or commercial
occupation.
| ||
(21) Beginning January 1, 2000, personal property, | ||
including
food,
purchased through fundraising
events for the | ||
benefit of
a public or private elementary or
secondary school, | ||
a group of those schools, or one or more school
districts if | ||
the events are
sponsored by an entity recognized by the school | ||
district that consists
primarily of volunteers and includes
| ||
parents and teachers of the school children. This paragraph | ||
does not apply
to fundraising
events (i) for the benefit of | ||
private home instruction or (ii)
for which the fundraising | ||
entity purchases the personal property sold at
the events from | ||
another individual or entity that sold the property for the
| ||
purpose of resale by the fundraising entity and that
profits | ||
from the sale to the
fundraising entity. This paragraph is | ||
exempt
from the provisions
of Section 3-75.
| ||
(22) Beginning January 1, 2000
and through December 31, | ||
2001, new or used automatic vending
machines that prepare and | ||
serve hot food and beverages, including coffee, soup,
and
other | ||
items, and replacement parts for these machines.
Beginning | ||
January 1,
2002 and through June 30, 2003, machines and parts | ||
for machines used in
commercial, coin-operated
amusement
and | ||
vending business if a use or occupation tax is paid on the | ||
gross receipts
derived from
the use of the commercial, | ||
coin-operated amusement and vending machines.
This
paragraph
| ||
is exempt from the provisions of Section 3-75.
|
(23) Beginning August 23, 2001 and through June 30, 2016 | ||
June 30, 2011 , food for human consumption that is to be | ||
consumed off the
premises
where it is sold (other than | ||
alcoholic beverages, soft drinks, and food that
has been | ||
prepared for immediate consumption) and prescription and
| ||
nonprescription medicines, drugs, medical appliances, and | ||
insulin, urine
testing materials, syringes, and needles used by | ||
diabetics, for human use, when
purchased for use by a person | ||
receiving medical assistance under Article V of
the Illinois | ||
Public Aid Code who resides in a licensed long-term care | ||
facility,
as defined in the Nursing Home Care Act, or in a | ||
licensed facility as defined in the ID/DD Community Care Act or | ||
the Specialized Mental Health Rehabilitation Act.
| ||
(24) Beginning on the effective date of this amendatory Act | ||
of the 92nd
General Assembly, computers and communications | ||
equipment
utilized for any hospital purpose and equipment used | ||
in the diagnosis,
analysis, or treatment of hospital patients | ||
purchased by a lessor who leases
the equipment, under a lease | ||
of one year or longer executed or in effect at the
time the | ||
lessor would otherwise be subject to the tax imposed by this | ||
Act, to a
hospital that has been issued an active tax exemption | ||
identification number by
the Department under Section 1g of the | ||
Retailers' Occupation Tax Act. If the
equipment is leased in a | ||
manner that does not qualify for this exemption or is
used in | ||
any other nonexempt manner, the lessor shall be liable for the
| ||
tax imposed under this Act or the Use Tax Act, as the case may |
be, based on the
fair market value of the property at the time | ||
the nonqualifying use occurs.
No lessor shall collect or | ||
attempt to collect an amount (however
designated) that purports | ||
to reimburse that lessor for the tax imposed by this
Act or the | ||
Use Tax Act, as the case may be, if the tax has not been
paid by | ||
the lessor. If a lessor improperly collects any such amount | ||
from the
lessee, the lessee shall have a legal right to claim a | ||
refund of that amount
from the lessor. If, however, that amount | ||
is not refunded to the lessee for
any reason, the lessor is | ||
liable to pay that amount to the Department.
This paragraph is | ||
exempt from the provisions of Section 3-75.
| ||
(25) Beginning
on the effective date of this amendatory Act | ||
of the 92nd General Assembly,
personal property purchased by a | ||
lessor
who leases the property, under a lease of one year or | ||
longer executed or in
effect at the time the lessor would | ||
otherwise be subject to the tax imposed by
this Act, to a | ||
governmental body that has been issued an active tax exemption
| ||
identification number by the Department under Section 1g of the | ||
Retailers'
Occupation Tax Act. If the property is leased in a | ||
manner that does not
qualify for this exemption or is used in | ||
any other nonexempt manner, the
lessor shall be liable for the | ||
tax imposed under this Act or the Use Tax Act,
as the case may | ||
be, based on the fair market value of the property at the time
| ||
the nonqualifying use occurs. No lessor shall collect or | ||
attempt to collect
an amount (however designated) that purports | ||
to reimburse that lessor for the
tax imposed by this Act or the |
Use Tax Act, as the case may be, if the tax has
not been paid by | ||
the lessor. If a lessor improperly collects any such amount
| ||
from the lessee, the lessee shall have a legal right to claim a | ||
refund of that
amount from the lessor. If, however, that amount | ||
is not refunded to the lessee
for any reason, the lessor is | ||
liable to pay that amount to the Department.
This paragraph is | ||
exempt from the provisions of Section 3-75.
| ||
(26) Beginning January 1, 2008, tangible personal property | ||
used in the construction or maintenance of a community water | ||
supply, as defined under Section 3.145 of the Environmental | ||
Protection Act, that is operated by a not-for-profit | ||
corporation that holds a valid water supply permit issued under | ||
Title IV of the Environmental Protection Act. This paragraph is | ||
exempt from the provisions of Section 3-75.
| ||
(27) Beginning January 1, 2010, materials, parts, | ||
equipment, components, and furnishings incorporated into or | ||
upon an aircraft as part of the modification, refurbishment, | ||
completion, replacement, repair, or maintenance of the | ||
aircraft. This exemption includes consumable supplies used in | ||
the modification, refurbishment, completion, replacement, | ||
repair, and maintenance of aircraft, but excludes any | ||
materials, parts, equipment, components, and consumable | ||
supplies used in the modification, replacement, repair, and | ||
maintenance of aircraft engines or power plants, whether such | ||
engines or power plants are installed or uninstalled upon any | ||
such aircraft. "Consumable supplies" include, but are not |
limited to, adhesive, tape, sandpaper, general purpose | ||
lubricants, cleaning solution, latex gloves, and protective | ||
films. This exemption applies only to those organizations that | ||
(i) hold an Air Agency Certificate and are empowered to operate | ||
an approved repair station by the Federal Aviation | ||
Administration, (ii) have a Class IV Rating, and (iii) conduct | ||
operations in accordance with Part 145 of the Federal Aviation | ||
Regulations. The exemption does not include aircraft operated | ||
by a commercial air carrier providing scheduled passenger air | ||
service pursuant to authority issued under Part 121 or Part 129 | ||
of the Federal Aviation Regulations. | ||
(28) Tangible personal property purchased by a | ||
public-facilities corporation, as described in Section | ||
11-65-10 of the Illinois Municipal Code, for purposes of | ||
constructing or furnishing a municipal convention hall, but | ||
only if the legal title to the municipal convention hall is | ||
transferred to the municipality without any further | ||
consideration by or on behalf of the municipality at the time | ||
of the completion of the municipal convention hall or upon the | ||
retirement or redemption of any bonds or other debt instruments | ||
issued by the public-facilities corporation in connection with | ||
the development of the municipal convention hall. This | ||
exemption includes existing public-facilities corporations as | ||
provided in Section 11-65-25 of the Illinois Municipal Code. | ||
This paragraph is exempt from the provisions of Section 3-75. | ||
(Source: P.A. 96-116, eff. 7-31-09; 96-339, eff. 7-1-10; |
96-532, eff. 8-14-09; 96-759, eff. 1-1-10; 96-1000, eff. | ||
7-2-10; 97-38, eff. 6-28-11; 97-227, eff. 1-1-12; 97-431, eff. | ||
8-16-11; revised 9-12-11.)
| ||
(35 ILCS 110/3-10) (from Ch. 120, par. 439.33-10)
| ||
Sec. 3-10. Rate of tax. Unless otherwise provided in this | ||
Section,
the tax imposed by this Act is at the rate of 6.25% of | ||
the selling
price of tangible personal property transferred as | ||
an incident to the sale
of service, but, for the purpose of | ||
computing this tax, in no event shall
the selling price be less | ||
than the cost price of the property to the
serviceman.
| ||
Beginning on July 1, 2000 and through December 31, 2000, | ||
with respect to
motor fuel, as defined in Section 1.1 of the | ||
Motor Fuel Tax
Law, and gasohol, as defined in Section 3-40 of | ||
the Use Tax Act, the tax is
imposed at
the rate of 1.25%.
| ||
With respect to gasohol, as defined in the Use Tax Act, the | ||
tax imposed
by this Act applies to (i) 70% of the selling price | ||
of property transferred
as an incident to the sale of service | ||
on or after January 1, 1990,
and before July 1, 2003, (ii) 80% | ||
of the selling price of
property transferred as an incident to | ||
the sale of service on or after July
1, 2003 and on or before | ||
December 31, 2018 2013 , and (iii)
100% of the selling price | ||
thereafter.
If, at any time, however, the tax under this Act on | ||
sales of gasohol, as
defined in
the Use Tax Act, is imposed at | ||
the rate of 1.25%, then the
tax imposed by this Act applies to | ||
100% of the proceeds of sales of gasohol
made during that time.
|
With respect to majority blended ethanol fuel, as defined | ||
in the Use Tax Act,
the
tax
imposed by this Act does not apply | ||
to the selling price of property transferred
as an incident to | ||
the sale of service on or after July 1, 2003 and on or before
| ||
December 31, 2018 2013 but applies to 100% of the selling price | ||
thereafter.
| ||
With respect to biodiesel blends, as defined in the Use Tax | ||
Act, with no less
than 1% and no
more than 10% biodiesel, the | ||
tax imposed by this Act
applies to (i) 80% of the selling price | ||
of property transferred as an incident
to the sale of service | ||
on or after July 1, 2003 and on or before December 31, 2018
| ||
2013 and (ii) 100% of the proceeds of the selling price
| ||
thereafter.
If, at any time, however, the tax under this Act on | ||
sales of biodiesel blends,
as
defined in the Use Tax Act, with | ||
no less than 1% and no more than 10% biodiesel
is imposed at | ||
the rate of 1.25%, then the
tax imposed by this Act applies to | ||
100% of the proceeds of sales of biodiesel
blends with no less | ||
than 1% and no more than 10% biodiesel
made
during that time.
| ||
With respect to 100% biodiesel, as defined in the Use Tax | ||
Act, and biodiesel
blends, as defined in the Use Tax Act, with
| ||
more than 10% but no more than 99% biodiesel, the tax imposed | ||
by this Act
does not apply to the proceeds of the selling price | ||
of property transferred
as an incident to the sale of service | ||
on or after July 1, 2003 and on or before
December 31, 2018 | ||
2013 but applies to 100% of the selling price thereafter.
| ||
At the election of any registered serviceman made for each |
fiscal year,
sales of service in which the aggregate annual | ||
cost price of tangible
personal property transferred as an | ||
incident to the sales of service is
less than 35%, or 75% in | ||
the case of servicemen transferring prescription
drugs or | ||
servicemen engaged in graphic arts production, of the aggregate
| ||
annual total gross receipts from all sales of service, the tax | ||
imposed by
this Act shall be based on the serviceman's cost | ||
price of the tangible
personal property transferred as an | ||
incident to the sale of those services.
| ||
The tax shall be imposed at the rate of 1% on food prepared | ||
for
immediate consumption and transferred incident to a sale of | ||
service subject
to this Act or the Service Occupation Tax Act | ||
by an entity licensed under
the Hospital Licensing Act, the | ||
Nursing Home Care Act, the ID/DD Community Care Act, the | ||
Specialized Mental Health Rehabilitation Act, or the
Child Care
| ||
Act of 1969. The tax shall
also be imposed at the rate of 1% on | ||
food for human consumption that is to be
consumed off the | ||
premises where it is sold (other than alcoholic beverages,
soft | ||
drinks, and food that has been prepared for immediate | ||
consumption and is
not otherwise included in this paragraph) | ||
and prescription and nonprescription
medicines, drugs, medical | ||
appliances, modifications to a motor vehicle for the
purpose of | ||
rendering it usable by a disabled person, and insulin, urine | ||
testing
materials,
syringes, and needles used by diabetics, for
| ||
human use. For the purposes of this Section, until September 1, | ||
2009: the term "soft drinks" means any
complete, finished, |
ready-to-use, non-alcoholic drink, whether carbonated or
not, | ||
including but not limited to soda water, cola, fruit juice, | ||
vegetable
juice, carbonated water, and all other preparations | ||
commonly known as soft
drinks of whatever kind or description | ||
that are contained in any closed or
sealed bottle, can, carton, | ||
or container, regardless of size; but "soft drinks"
does not | ||
include coffee, tea, non-carbonated water, infant formula, | ||
milk or
milk products as defined in the Grade A Pasteurized | ||
Milk and Milk Products Act,
or drinks containing 50% or more | ||
natural fruit or vegetable juice.
| ||
Notwithstanding any other provisions of this
Act, | ||
beginning September 1, 2009, "soft drinks" means non-alcoholic | ||
beverages that contain natural or artificial sweeteners. "Soft | ||
drinks" do not include beverages that contain milk or milk | ||
products, soy, rice or similar milk substitutes, or greater | ||
than 50% of vegetable or fruit juice by volume. | ||
Until August 1, 2009, and notwithstanding any other | ||
provisions of this Act, "food for human
consumption that is to | ||
be consumed off the premises where it is sold" includes
all | ||
food sold through a vending machine, except soft drinks and | ||
food products
that are dispensed hot from a vending machine, | ||
regardless of the location of
the vending machine. Beginning | ||
August 1, 2009, and notwithstanding any other provisions of | ||
this Act, "food for human consumption that is to be consumed | ||
off the premises where it is sold" includes all food sold | ||
through a vending machine, except soft drinks, candy, and food |
products that are dispensed hot from a vending machine, | ||
regardless of the location of the vending machine.
| ||
Notwithstanding any other provisions of this
Act, | ||
beginning September 1, 2009, "food for human consumption that | ||
is to be consumed off the premises where
it is sold" does not | ||
include candy. For purposes of this Section, "candy" means a | ||
preparation of sugar, honey, or other natural or artificial | ||
sweeteners in combination with chocolate, fruits, nuts or other | ||
ingredients or flavorings in the form of bars, drops, or | ||
pieces. "Candy" does not include any preparation that contains | ||
flour or requires refrigeration. | ||
Notwithstanding any other provisions of this
Act, | ||
beginning September 1, 2009, "nonprescription medicines and | ||
drugs" does not include grooming and hygiene products. For | ||
purposes of this Section, "grooming and hygiene products" | ||
includes, but is not limited to, soaps and cleaning solutions, | ||
shampoo, toothpaste, mouthwash, antiperspirants, and sun tan | ||
lotions and screens, unless those products are available by | ||
prescription only, regardless of whether the products meet the | ||
definition of "over-the-counter-drugs". For the purposes of | ||
this paragraph, "over-the-counter-drug" means a drug for human | ||
use that contains a label that identifies the product as a drug | ||
as required by 21 C.F.R. ยง 201.66. The "over-the-counter-drug" | ||
label includes: | ||
(A) A "Drug Facts" panel; or | ||
(B) A statement of the "active ingredient(s)" with a |
list of those ingredients contained in the compound, | ||
substance or preparation. | ||
If the property that is acquired from a serviceman is | ||
acquired outside
Illinois and used outside Illinois before | ||
being brought to Illinois for use
here and is taxable under | ||
this Act, the "selling price" on which the tax
is computed | ||
shall be reduced by an amount that represents a reasonable
| ||
allowance for depreciation for the period of prior out-of-state | ||
use.
| ||
(Source: P.A. 96-34, eff. 7-13-09; 96-37, eff. 7-13-09; 96-38, | ||
eff. 7-13-09; 96-339, eff. 7-1-10; 96-1000, eff. 7-2-10; 97-38, | ||
eff. 6-28-11; 97-227, eff. 1-1-12; revised 9-12-11.)
| ||
(35 ILCS 110/3-75)
| ||
Sec. 3-75. Sunset of exemptions, credits, and deductions. | ||
(a) The application
of every exemption, credit, and | ||
deduction against tax imposed by this Act that
becomes law | ||
after the effective date of this amendatory Act of 1994 shall | ||
be
limited by a reasonable and appropriate sunset date. A | ||
taxpayer is not
entitled to take the exemption, credit, or | ||
deduction beginning on the sunset
date and thereafter. Except | ||
as provided in subsection (b) of this Section, if If a | ||
reasonable and appropriate sunset date is not
specified in the | ||
Public Act that creates the exemption, credit, or deduction, a
| ||
taxpayer shall not be entitled to take the exemption, credit, | ||
or deduction
beginning 5 years after the effective date of the |
Public Act creating the
exemption, credit, or deduction and | ||
thereafter.
| ||
(b) Notwithstanding the provisions of subsection (a) of | ||
this Section, the sunset date of any exemption, credit, or | ||
deduction that is scheduled to expire in 2011, 2012, or 2013 by | ||
operation of this Section shall be extended by 5 years. | ||
(Source: P.A. 88-660, eff. 9-16-94; 89-235, eff.
8-4-95.)
| ||
Section 15-30. The Service Occupation Tax Act is amended by | ||
changing Sections 3-5, 3-10, and 3-55 as follows:
| ||
(35 ILCS 115/3-5)
| ||
Sec. 3-5. Exemptions. The following tangible personal | ||
property is
exempt from the tax imposed by this Act:
| ||
(1) Personal property sold by a corporation, society, | ||
association,
foundation, institution, or organization, other | ||
than a limited liability
company, that is organized and | ||
operated as a not-for-profit service enterprise
for the benefit | ||
of persons 65 years of age or older if the personal property
| ||
was not purchased by the enterprise for the purpose of resale | ||
by the
enterprise.
| ||
(2) Personal property purchased by a not-for-profit | ||
Illinois county fair
association for use in conducting, | ||
operating, or promoting the county fair.
| ||
(3) Personal property purchased by any not-for-profit
arts | ||
or cultural organization that establishes, by proof required by |
the
Department by
rule, that it has received an exemption under | ||
Section 501(c)(3) of the
Internal Revenue Code and that is | ||
organized and operated primarily for the
presentation
or | ||
support of arts or cultural programming, activities, or | ||
services. These
organizations include, but are not limited to, | ||
music and dramatic arts
organizations such as symphony | ||
orchestras and theatrical groups, arts and
cultural service | ||
organizations, local arts councils, visual arts organizations,
| ||
and media arts organizations.
On and after the effective date | ||
of this amendatory Act of the 92nd General
Assembly, however, | ||
an entity otherwise eligible for this exemption shall not
make | ||
tax-free purchases unless it has an active identification | ||
number issued by
the Department.
| ||
(4) Legal tender, currency, medallions, or gold or silver | ||
coinage
issued by the State of Illinois, the government of the | ||
United States of
America, or the government of any foreign | ||
country, and bullion.
| ||
(5) Until July 1, 2003 and beginning again on September 1, | ||
2004 through August 30, 2014, graphic arts machinery and | ||
equipment, including
repair and
replacement parts, both new and | ||
used, and including that manufactured on
special order or | ||
purchased for lease, certified by the purchaser to be used
| ||
primarily for graphic arts production.
Equipment includes | ||
chemicals or chemicals acting as catalysts but only if
the
| ||
chemicals or chemicals acting as catalysts effect a direct and | ||
immediate change
upon a graphic arts product.
|
(6) Personal property sold by a teacher-sponsored student | ||
organization
affiliated with an elementary or secondary school | ||
located in Illinois.
| ||
(7) Farm machinery and equipment, both new and used, | ||
including that
manufactured on special order, certified by the | ||
purchaser to be used
primarily for production agriculture or | ||
State or federal agricultural
programs, including individual | ||
replacement parts for the machinery and
equipment, including | ||
machinery and equipment purchased for lease,
and including | ||
implements of husbandry defined in Section 1-130 of
the | ||
Illinois Vehicle Code, farm machinery and agricultural | ||
chemical and
fertilizer spreaders, and nurse wagons required to | ||
be registered
under Section 3-809 of the Illinois Vehicle Code,
| ||
but
excluding other motor vehicles required to be registered | ||
under the Illinois
Vehicle
Code.
Horticultural polyhouses or | ||
hoop houses used for propagating, growing, or
overwintering | ||
plants shall be considered farm machinery and equipment under
| ||
this item (7).
Agricultural chemical tender tanks and dry boxes | ||
shall include units sold
separately from a motor vehicle | ||
required to be licensed and units sold mounted
on a motor | ||
vehicle required to be licensed if the selling price of the | ||
tender
is separately stated.
| ||
Farm machinery and equipment shall include precision | ||
farming equipment
that is
installed or purchased to be | ||
installed on farm machinery and equipment
including, but not | ||
limited to, tractors, harvesters, sprayers, planters,
seeders, |
or spreaders.
Precision farming equipment includes, but is not | ||
limited to,
soil testing sensors, computers, monitors, | ||
software, global positioning
and mapping systems, and other | ||
such equipment.
| ||
Farm machinery and equipment also includes computers, | ||
sensors, software, and
related equipment used primarily in the
| ||
computer-assisted operation of production agriculture | ||
facilities, equipment,
and activities such as, but
not limited | ||
to,
the collection, monitoring, and correlation of
animal and | ||
crop data for the purpose of
formulating animal diets and | ||
agricultural chemicals. This item (7) is exempt
from the | ||
provisions of
Section 3-55.
| ||
(8) Fuel and petroleum products sold to or used by an air | ||
common
carrier, certified by the carrier to be used for | ||
consumption, shipment,
or storage in the conduct of its | ||
business as an air common carrier, for
a flight destined for or | ||
returning from a location or locations
outside the United | ||
States without regard to previous or subsequent domestic
| ||
stopovers.
| ||
(9) Proceeds of mandatory service charges separately
| ||
stated on customers' bills for the purchase and consumption of | ||
food and
beverages, to the extent that the proceeds of the | ||
service charge are in fact
turned over as tips or as a | ||
substitute for tips to the employees who
participate directly | ||
in preparing, serving, hosting or cleaning up the
food or | ||
beverage function with respect to which the service charge is |
imposed.
| ||
(10) Until July 1, 2003, oil field exploration, drilling, | ||
and production
equipment,
including (i) rigs and parts of rigs, | ||
rotary rigs, cable tool
rigs, and workover rigs, (ii) pipe and | ||
tubular goods, including casing and
drill strings, (iii) pumps | ||
and pump-jack units, (iv) storage tanks and flow
lines, (v) any | ||
individual replacement part for oil field exploration,
| ||
drilling, and production equipment, and (vi) machinery and | ||
equipment purchased
for lease; but
excluding motor vehicles | ||
required to be registered under the Illinois
Vehicle Code.
| ||
(11) Photoprocessing machinery and equipment, including | ||
repair and
replacement parts, both new and used, including that | ||
manufactured on
special order, certified by the purchaser to be | ||
used primarily for
photoprocessing, and including | ||
photoprocessing machinery and equipment
purchased for lease.
| ||
(12) Until July 1, 2003, coal exploration, mining, | ||
offhighway hauling,
processing,
maintenance, and reclamation | ||
equipment, including
replacement parts and equipment, and | ||
including
equipment
purchased for lease, but excluding motor | ||
vehicles required to be registered
under the Illinois Vehicle | ||
Code.
| ||
(13) Beginning January 1, 1992 and through June 30, 2016 | ||
June 30, 2011 , food for human consumption that is to be | ||
consumed off the premises
where it is sold (other than | ||
alcoholic beverages, soft drinks and food that
has been | ||
prepared for immediate consumption) and prescription and
|
non-prescription medicines, drugs, medical appliances, and | ||
insulin, urine
testing materials, syringes, and needles used by | ||
diabetics, for human use,
when purchased for use by a person | ||
receiving medical assistance under
Article V of the Illinois | ||
Public Aid Code who resides in a licensed
long-term care | ||
facility, as defined in the Nursing Home Care Act, or in a | ||
licensed facility as defined in the ID/DD Community Care Act or | ||
the Specialized Mental Health Rehabilitation Act.
| ||
(14) Semen used for artificial insemination of livestock | ||
for direct
agricultural production.
| ||
(15) Horses, or interests in horses, registered with and | ||
meeting the
requirements of any of the
Arabian Horse Club | ||
Registry of America, Appaloosa Horse Club, American Quarter
| ||
Horse Association, United States
Trotting Association, or | ||
Jockey Club, as appropriate, used for
purposes of breeding or | ||
racing for prizes. This item (15) is exempt from the provisions | ||
of Section 3-55, and the exemption provided for under this item | ||
(15) applies for all periods beginning May 30, 1995, but no | ||
claim for credit or refund is allowed on or after January 1, | ||
2008 (the effective date of Public Act 95-88)
for such taxes | ||
paid during the period beginning May 30, 2000 and ending on | ||
January 1, 2008 (the effective date of Public Act 95-88).
| ||
(16) Computers and communications equipment utilized for | ||
any
hospital
purpose
and equipment used in the diagnosis,
| ||
analysis, or treatment of hospital patients sold to a lessor | ||
who leases the
equipment, under a lease of one year or longer |
executed or in effect at the
time of the purchase, to a
| ||
hospital
that has been issued an active tax exemption | ||
identification number by the
Department under Section 1g of the | ||
Retailers' Occupation Tax Act.
| ||
(17) Personal property sold to a lessor who leases the
| ||
property, under a
lease of one year or longer executed or in | ||
effect at the time of the purchase,
to a governmental body
that | ||
has been issued an active tax exemption identification number | ||
by the
Department under Section 1g of the Retailers' Occupation | ||
Tax Act.
| ||
(18) Beginning with taxable years ending on or after | ||
December
31, 1995
and
ending with taxable years ending on or | ||
before December 31, 2004,
personal property that is
donated for | ||
disaster relief to be used in a State or federally declared
| ||
disaster area in Illinois or bordering Illinois by a | ||
manufacturer or retailer
that is registered in this State to a | ||
corporation, society, association,
foundation, or institution | ||
that has been issued a sales tax exemption
identification | ||
number by the Department that assists victims of the disaster
| ||
who reside within the declared disaster area.
| ||
(19) Beginning with taxable years ending on or after | ||
December
31, 1995 and
ending with taxable years ending on or | ||
before December 31, 2004, personal
property that is used in the | ||
performance of infrastructure repairs in this
State, including | ||
but not limited to municipal roads and streets, access roads,
| ||
bridges, sidewalks, waste disposal systems, water and sewer |
line extensions,
water distribution and purification | ||
facilities, storm water drainage and
retention facilities, and | ||
sewage treatment facilities, resulting from a State
or | ||
federally declared disaster in Illinois or bordering Illinois | ||
when such
repairs are initiated on facilities located in the | ||
declared disaster area
within 6 months after the disaster.
| ||
(20) Beginning July 1, 1999, game or game birds sold at a | ||
"game breeding
and
hunting preserve area" as that term is used
| ||
in the
Wildlife Code. This paragraph is exempt from the | ||
provisions
of
Section 3-55.
| ||
(21) A motor vehicle, as that term is defined in Section | ||
1-146
of the
Illinois Vehicle Code, that is donated to a | ||
corporation, limited liability
company, society, association, | ||
foundation, or institution that is determined by
the Department | ||
to be organized and operated exclusively for educational
| ||
purposes. For purposes of this exemption, "a corporation, | ||
limited liability
company, society, association, foundation, | ||
or institution organized and
operated
exclusively for | ||
educational purposes" means all tax-supported public schools,
| ||
private schools that offer systematic instruction in useful | ||
branches of
learning by methods common to public schools and | ||
that compare favorably in
their scope and intensity with the | ||
course of study presented in tax-supported
schools, and | ||
vocational or technical schools or institutes organized and
| ||
operated exclusively to provide a course of study of not less | ||
than 6 weeks
duration and designed to prepare individuals to |
follow a trade or to pursue a
manual, technical, mechanical, | ||
industrial, business, or commercial
occupation.
| ||
(22) Beginning January 1, 2000, personal property, | ||
including
food,
purchased through fundraising
events for the | ||
benefit of
a public or private elementary or
secondary school, | ||
a group of those schools, or one or more school
districts if | ||
the events are
sponsored by an entity recognized by the school | ||
district that consists
primarily of volunteers and includes
| ||
parents and teachers of the school children. This paragraph | ||
does not apply
to fundraising
events (i) for the benefit of | ||
private home instruction or (ii)
for which the fundraising | ||
entity purchases the personal property sold at
the events from | ||
another individual or entity that sold the property for the
| ||
purpose of resale by the fundraising entity and that
profits | ||
from the sale to the
fundraising entity. This paragraph is | ||
exempt
from the provisions
of Section 3-55.
| ||
(23) Beginning January 1, 2000
and through December 31, | ||
2001, new or used automatic vending
machines that prepare and | ||
serve hot food and beverages, including coffee, soup,
and
other | ||
items, and replacement parts for these machines.
Beginning | ||
January 1,
2002 and through June 30, 2003, machines and parts | ||
for
machines used in commercial, coin-operated amusement
and | ||
vending business if a use or occupation tax is paid on the | ||
gross receipts
derived from
the use of the commercial, | ||
coin-operated amusement and vending machines.
This paragraph | ||
is exempt from the provisions of Section 3-55.
|
(24) Beginning
on the effective date of this amendatory Act | ||
of the 92nd General Assembly,
computers and communications | ||
equipment
utilized for any hospital purpose and equipment used | ||
in the diagnosis,
analysis, or treatment of hospital patients | ||
sold to a lessor who leases the
equipment, under a lease of one | ||
year or longer executed or in effect at the
time of the | ||
purchase, to a hospital that has been issued an active tax
| ||
exemption identification number by the Department under | ||
Section 1g of the
Retailers' Occupation Tax Act. This paragraph | ||
is exempt from the provisions of
Section 3-55.
| ||
(25) Beginning
on the effective date of this amendatory Act | ||
of the 92nd General Assembly,
personal property sold to a | ||
lessor who
leases the property, under a lease of one year or | ||
longer executed or in effect
at the time of the purchase, to a | ||
governmental body that has been issued an
active tax exemption | ||
identification number by the Department under Section 1g
of the | ||
Retailers' Occupation Tax Act. This paragraph is exempt from | ||
the
provisions of Section 3-55.
| ||
(26) Beginning on January 1, 2002 and through June 30, | ||
2016, tangible personal property
purchased
from an Illinois | ||
retailer by a taxpayer engaged in centralized purchasing
| ||
activities in Illinois who will, upon receipt of the property | ||
in Illinois,
temporarily store the property in Illinois (i) for | ||
the purpose of subsequently
transporting it outside this State | ||
for use or consumption thereafter solely
outside this State or | ||
(ii) for the purpose of being processed, fabricated, or
|
manufactured into, attached to, or incorporated into other | ||
tangible personal
property to be transported outside this State | ||
and thereafter used or consumed
solely outside this State. The | ||
Director of Revenue shall, pursuant to rules
adopted in | ||
accordance with the Illinois Administrative Procedure Act, | ||
issue a
permit to any taxpayer in good standing with the | ||
Department who is eligible for
the exemption under this | ||
paragraph (26). The permit issued under
this paragraph (26) | ||
shall authorize the holder, to the extent and
in the manner | ||
specified in the rules adopted under this Act, to purchase
| ||
tangible personal property from a retailer exempt from the | ||
taxes imposed by
this Act. Taxpayers shall maintain all | ||
necessary books and records to
substantiate the use and | ||
consumption of all such tangible personal property
outside of | ||
the State of Illinois.
| ||
(27) Beginning January 1, 2008, tangible personal property | ||
used in the construction or maintenance of a community water | ||
supply, as defined under Section 3.145 of the Environmental | ||
Protection Act, that is operated by a not-for-profit | ||
corporation that holds a valid water supply permit issued under | ||
Title IV of the Environmental Protection Act. This paragraph is | ||
exempt from the provisions of Section 3-55.
| ||
(28) Tangible personal property sold to a | ||
public-facilities corporation, as described in Section | ||
11-65-10 of the Illinois Municipal Code, for purposes of | ||
constructing or furnishing a municipal convention hall, but |
only if the legal title to the municipal convention hall is | ||
transferred to the municipality without any further | ||
consideration by or on behalf of the municipality at the time | ||
of the completion of the municipal convention hall or upon the | ||
retirement or redemption of any bonds or other debt instruments | ||
issued by the public-facilities corporation in connection with | ||
the development of the municipal convention hall. This | ||
exemption includes existing public-facilities corporations as | ||
provided in Section 11-65-25 of the Illinois Municipal Code. | ||
This paragraph is exempt from the provisions of Section 3-55. | ||
(29) Beginning January 1, 2010, materials, parts, | ||
equipment, components, and furnishings incorporated into or | ||
upon an aircraft as part of the modification, refurbishment, | ||
completion, replacement, repair, or maintenance of the | ||
aircraft. This exemption includes consumable supplies used in | ||
the modification, refurbishment, completion, replacement, | ||
repair, and maintenance of aircraft, but excludes any | ||
materials, parts, equipment, components, and consumable | ||
supplies used in the modification, replacement, repair, and | ||
maintenance of aircraft engines or power plants, whether such | ||
engines or power plants are installed or uninstalled upon any | ||
such aircraft. "Consumable supplies" include, but are not | ||
limited to, adhesive, tape, sandpaper, general purpose | ||
lubricants, cleaning solution, latex gloves, and protective | ||
films. This exemption applies only to those organizations that | ||
(i) hold an Air Agency Certificate and are empowered to operate |
an approved repair station by the Federal Aviation | ||
Administration, (ii) have a Class IV Rating, and (iii) conduct | ||
operations in accordance with Part 145 of the Federal Aviation | ||
Regulations. The exemption does not include aircraft operated | ||
by a commercial air carrier providing scheduled passenger air | ||
service pursuant to authority issued under Part 121 or Part 129 | ||
of the Federal Aviation Regulations. | ||
(Source: P.A. 96-116, eff. 7-31-09; 96-339, eff. 7-1-10; | ||
96-532, eff. 8-14-09; 96-759, eff. 1-1-10; 96-1000, eff. | ||
7-2-10; 97-38, eff. 6-28-11; 97-73, eff. 6-30-11; 97-227, eff. | ||
1-1-12; 97-431, eff. 8-16-11; revised 9-12-11.)
| ||
(35 ILCS 115/3-10) (from Ch. 120, par. 439.103-10)
| ||
Sec. 3-10. Rate of tax. Unless otherwise provided in this | ||
Section,
the tax imposed by this Act is at the rate of 6.25% of | ||
the "selling price",
as defined in Section 2 of the Service Use | ||
Tax Act, of the tangible
personal property. For the purpose of | ||
computing this tax, in no event
shall the "selling price" be | ||
less than the cost price to the serviceman of
the tangible | ||
personal property transferred. The selling price of each item
| ||
of tangible personal property transferred as an incident of a | ||
sale of
service may be shown as a distinct and separate item on | ||
the serviceman's
billing to the service customer. If the | ||
selling price is not so shown, the
selling price of the | ||
tangible personal property is deemed to be 50% of the
| ||
serviceman's entire billing to the service customer. When, |
however, a
serviceman contracts to design, develop, and produce | ||
special order machinery or
equipment, the tax imposed by this | ||
Act shall be based on the serviceman's
cost price of the | ||
tangible personal property transferred incident to the
| ||
completion of the contract.
| ||
Beginning on July 1, 2000 and through December 31, 2000, | ||
with respect to
motor fuel, as defined in Section 1.1 of the | ||
Motor Fuel Tax
Law, and gasohol, as defined in Section 3-40 of | ||
the Use Tax Act, the tax is
imposed at
the rate of 1.25%.
| ||
With respect to gasohol, as defined in the Use Tax Act, the | ||
tax imposed
by this Act shall apply to (i) 70% of the cost | ||
price of property
transferred as
an incident to the sale of | ||
service on or after January 1, 1990, and before
July 1, 2003, | ||
(ii) 80% of the selling price of property transferred as an
| ||
incident to the sale of service on or after July
1, 2003 and on | ||
or before December 31, 2018 2013 , and (iii) 100%
of
the cost | ||
price
thereafter.
If, at any time, however, the tax under this | ||
Act on sales of gasohol, as
defined in
the Use Tax Act, is | ||
imposed at the rate of 1.25%, then the
tax imposed by this Act | ||
applies to 100% of the proceeds of sales of gasohol
made during | ||
that time.
| ||
With respect to majority blended ethanol fuel, as defined | ||
in the Use Tax Act,
the
tax
imposed by this Act does not apply | ||
to the selling price of property transferred
as an incident to | ||
the sale of service on or after July 1, 2003 and on or before
| ||
December 31, 2018 2013 but applies to 100% of the selling price |
thereafter.
| ||
With respect to biodiesel blends, as defined in the Use Tax | ||
Act, with no less
than 1% and no
more than 10% biodiesel, the | ||
tax imposed by this Act
applies to (i) 80% of the selling price | ||
of property transferred as an incident
to the sale of service | ||
on or after July 1, 2003 and on or before December 31, 2018
| ||
2013 and (ii) 100% of the proceeds of the selling price
| ||
thereafter.
If, at any time, however, the tax under this Act on | ||
sales of biodiesel blends,
as
defined in the Use Tax Act, with | ||
no less than 1% and no more than 10% biodiesel
is imposed at | ||
the rate of 1.25%, then the
tax imposed by this Act applies to | ||
100% of the proceeds of sales of biodiesel
blends with no less | ||
than 1% and no more than 10% biodiesel
made
during that time.
| ||
With respect to 100% biodiesel, as defined in the Use Tax | ||
Act, and biodiesel
blends, as defined in the Use Tax Act, with
| ||
more than 10% but no more than 99% biodiesel material, the tax | ||
imposed by this
Act
does not apply to the proceeds of the | ||
selling price of property transferred
as an incident to the | ||
sale of service on or after July 1, 2003 and on or before
| ||
December 31, 2018 2013 but applies to 100% of the selling price | ||
thereafter.
| ||
At the election of any registered serviceman made for each | ||
fiscal year,
sales of service in which the aggregate annual | ||
cost price of tangible
personal property transferred as an | ||
incident to the sales of service is
less than 35%, or 75% in | ||
the case of servicemen transferring prescription
drugs or |
servicemen engaged in graphic arts production, of the aggregate
| ||
annual total gross receipts from all sales of service, the tax | ||
imposed by
this Act shall be based on the serviceman's cost | ||
price of the tangible
personal property transferred incident to | ||
the sale of those services.
| ||
The tax shall be imposed at the rate of 1% on food prepared | ||
for
immediate consumption and transferred incident to a sale of | ||
service subject
to this Act or the Service Occupation Tax Act | ||
by an entity licensed under
the Hospital Licensing Act, the | ||
Nursing Home Care Act, the ID/DD Community Care Act, the | ||
Specialized Mental Health Rehabilitation Act, or the
Child Care | ||
Act of 1969. The tax shall
also be imposed at the rate of 1% on | ||
food for human consumption that is
to be consumed off the
| ||
premises where it is sold (other than alcoholic beverages, soft | ||
drinks, and
food that has been prepared for immediate | ||
consumption and is not
otherwise included in this paragraph) | ||
and prescription and
nonprescription medicines, drugs, medical | ||
appliances, modifications to a motor
vehicle for the purpose of | ||
rendering it usable by a disabled person, and
insulin, urine | ||
testing materials, syringes, and needles used by diabetics, for
| ||
human use. For the purposes of this Section, until September 1, | ||
2009: the term "soft drinks" means any
complete, finished, | ||
ready-to-use, non-alcoholic drink, whether carbonated or
not, | ||
including but not limited to soda water, cola, fruit juice, | ||
vegetable
juice, carbonated water, and all other preparations | ||
commonly known as soft
drinks of whatever kind or description |
that are contained in any closed or
sealed can, carton, or | ||
container, regardless of size; but "soft drinks" does not
| ||
include coffee, tea, non-carbonated water, infant formula, | ||
milk or milk
products as defined in the Grade A Pasteurized | ||
Milk and Milk Products Act, or
drinks containing 50% or more | ||
natural fruit or vegetable juice.
| ||
Notwithstanding any other provisions of this
Act, | ||
beginning September 1, 2009, "soft drinks" means non-alcoholic | ||
beverages that contain natural or artificial sweeteners. "Soft | ||
drinks" do not include beverages that contain milk or milk | ||
products, soy, rice or similar milk substitutes, or greater | ||
than 50% of vegetable or fruit juice by volume. | ||
Until August 1, 2009, and notwithstanding any other | ||
provisions of this Act, "food for human consumption
that is to | ||
be consumed off the premises where it is sold" includes all | ||
food
sold through a vending machine, except soft drinks and | ||
food products that are
dispensed hot from a vending machine, | ||
regardless of the location of the vending
machine. Beginning | ||
August 1, 2009, and notwithstanding any other provisions of | ||
this Act, "food for human consumption that is to be consumed | ||
off the premises where it is sold" includes all food sold | ||
through a vending machine, except soft drinks, candy, and food | ||
products that are dispensed hot from a vending machine, | ||
regardless of the location of the vending machine.
| ||
Notwithstanding any other provisions of this
Act, | ||
beginning September 1, 2009, "food for human consumption that |
is to be consumed off the premises where
it is sold" does not | ||
include candy. For purposes of this Section, "candy" means a | ||
preparation of sugar, honey, or other natural or artificial | ||
sweeteners in combination with chocolate, fruits, nuts or other | ||
ingredients or flavorings in the form of bars, drops, or | ||
pieces. "Candy" does not include any preparation that contains | ||
flour or requires refrigeration. | ||
Notwithstanding any other provisions of this
Act, | ||
beginning September 1, 2009, "nonprescription medicines and | ||
drugs" does not include grooming and hygiene products. For | ||
purposes of this Section, "grooming and hygiene products" | ||
includes, but is not limited to, soaps and cleaning solutions, | ||
shampoo, toothpaste, mouthwash, antiperspirants, and sun tan | ||
lotions and screens, unless those products are available by | ||
prescription only, regardless of whether the products meet the | ||
definition of "over-the-counter-drugs". For the purposes of | ||
this paragraph, "over-the-counter-drug" means a drug for human | ||
use that contains a label that identifies the product as a drug | ||
as required by 21 C.F.R. ยง 201.66. The "over-the-counter-drug" | ||
label includes: | ||
(A) A "Drug Facts" panel; or | ||
(B) A statement of the "active ingredient(s)" with a | ||
list of those ingredients contained in the compound, | ||
substance or preparation. | ||
(Source: P.A. 96-34, eff. 7-13-09; 96-37, eff. 7-13-09; 96-38, | ||
eff. 7-13-09; 96-339, eff. 7-1-10; 96-1000, eff. 7-2-10; 97-38, |
eff. 6-28-11; 97-227, eff. 1-1-12; revised 9-12-11.)
| ||
(35 ILCS 115/3-55)
| ||
Sec. 3-55. Sunset of exemptions, credits, and deductions. | ||
(a) The application
of every exemption, credit, and | ||
deduction against tax imposed by this Act that
becomes law | ||
after the effective date of this amendatory Act of 1994 shall | ||
be
limited by a reasonable and appropriate sunset date. A | ||
taxpayer is not
entitled to take the exemption, credit, or | ||
deduction beginning on the sunset
date and thereafter. Except | ||
as provided in subsection (b) of this Section, if If a | ||
reasonable and appropriate sunset date is not
specified in the | ||
Public Act that creates the exemption, credit, or deduction, a
| ||
taxpayer shall not be entitled to take the exemption, credit, | ||
or deduction
beginning 5 years after the effective date of the | ||
Public Act creating the
exemption, credit, or deduction and | ||
thereafter.
| ||
(b) Notwithstanding the provisions of subsection (a) of | ||
this Section, the sunset date of any exemption, credit, or | ||
deduction that is scheduled to expire in 2011, 2012, or 2013 by | ||
operation of this Section shall be extended by 5 years. | ||
(Source: P.A. 88-660, eff. 9-16-94.)
| ||
Section 15-35. The Retailers' Occupation Tax Act is amended | ||
by changing Sections 2-5, 2-10, and 2-70 as follows:
|
(35 ILCS 120/2-5)
| ||
Sec. 2-5. Exemptions. Gross receipts from proceeds from the | ||
sale of
the following tangible personal property are exempt | ||
from the tax imposed
by this Act:
| ||
(1) Farm chemicals.
| ||
(2) Farm machinery and equipment, both new and used, | ||
including that
manufactured on special order, certified by the | ||
purchaser to be used
primarily for production agriculture or | ||
State or federal agricultural
programs, including individual | ||
replacement parts for the machinery and
equipment, including | ||
machinery and equipment purchased for lease,
and including | ||
implements of husbandry defined in Section 1-130 of
the | ||
Illinois Vehicle Code, farm machinery and agricultural | ||
chemical and
fertilizer spreaders, and nurse wagons required to | ||
be registered
under Section 3-809 of the Illinois Vehicle Code,
| ||
but
excluding other motor vehicles required to be registered | ||
under the Illinois
Vehicle Code.
Horticultural polyhouses or | ||
hoop houses used for propagating, growing, or
overwintering | ||
plants shall be considered farm machinery and equipment under
| ||
this item (2).
Agricultural chemical tender tanks and dry boxes | ||
shall include units sold
separately from a motor vehicle | ||
required to be licensed and units sold mounted
on a motor | ||
vehicle required to be licensed, if the selling price of the | ||
tender
is separately stated.
| ||
Farm machinery and equipment shall include precision | ||
farming equipment
that is
installed or purchased to be |
installed on farm machinery and equipment
including, but not | ||
limited to, tractors, harvesters, sprayers, planters,
seeders, | ||
or spreaders.
Precision farming equipment includes, but is not | ||
limited to,
soil testing sensors, computers, monitors, | ||
software, global positioning
and mapping systems, and other | ||
such equipment.
| ||
Farm machinery and equipment also includes computers, | ||
sensors, software, and
related equipment used primarily in the
| ||
computer-assisted operation of production agriculture | ||
facilities, equipment,
and activities such as, but
not limited | ||
to,
the collection, monitoring, and correlation of
animal and | ||
crop data for the purpose of
formulating animal diets and | ||
agricultural chemicals. This item (2) (7) is exempt
from the | ||
provisions of
Section 2-70.
| ||
(3) Until July 1, 2003, distillation machinery and | ||
equipment, sold as a
unit or kit,
assembled or installed by the | ||
retailer, certified by the user to be used
only for the | ||
production of ethyl alcohol that will be used for consumption
| ||
as motor fuel or as a component of motor fuel for the personal | ||
use of the
user, and not subject to sale or resale.
| ||
(4) Until July 1, 2003 and beginning again September 1, | ||
2004 through August 30, 2014, graphic arts machinery and | ||
equipment, including
repair and
replacement parts, both new and | ||
used, and including that manufactured on
special order or | ||
purchased for lease, certified by the purchaser to be used
| ||
primarily for graphic arts production.
Equipment includes |
chemicals or
chemicals acting as catalysts but only if
the | ||
chemicals or chemicals acting as catalysts effect a direct and | ||
immediate
change upon a
graphic arts product.
| ||
(5) A motor vehicle of the first division, a motor vehicle | ||
of the second division that is a self contained motor vehicle | ||
designed or permanently converted to provide living quarters | ||
for recreational, camping, or travel use, with direct walk | ||
through access to the living quarters from the driver's seat, | ||
or a motor vehicle of the second division that is of the van | ||
configuration designed for the transportation of not less than | ||
7 nor more than 16 passengers, as defined in Section 1-146 of | ||
the Illinois Vehicle Code, that is used for automobile renting, | ||
as defined in the Automobile Renting Occupation and Use Tax | ||
Act. This paragraph is exempt from
the provisions of Section | ||
2-70.
| ||
(6) Personal property sold by a teacher-sponsored student | ||
organization
affiliated with an elementary or secondary school | ||
located in Illinois.
| ||
(7) Until July 1, 2003, proceeds of that portion of the | ||
selling price of
a passenger car the
sale of which is subject | ||
to the Replacement Vehicle Tax.
| ||
(8) Personal property sold to an Illinois county fair | ||
association for
use in conducting, operating, or promoting the | ||
county fair.
| ||
(9) Personal property sold to a not-for-profit arts
or | ||
cultural organization that establishes, by proof required by |
the Department
by
rule, that it has received an exemption under | ||
Section 501(c)(3) of the
Internal Revenue Code and that is | ||
organized and operated primarily for the
presentation
or | ||
support of arts or cultural programming, activities, or | ||
services. These
organizations include, but are not limited to, | ||
music and dramatic arts
organizations such as symphony | ||
orchestras and theatrical groups, arts and
cultural service | ||
organizations, local arts councils, visual arts organizations,
| ||
and media arts organizations.
On and after the effective date | ||
of this amendatory Act of the 92nd General
Assembly, however, | ||
an entity otherwise eligible for this exemption shall not
make | ||
tax-free purchases unless it has an active identification | ||
number issued by
the Department.
| ||
(10) Personal property sold by a corporation, society, | ||
association,
foundation, institution, or organization, other | ||
than a limited liability
company, that is organized and | ||
operated as a not-for-profit service enterprise
for the benefit | ||
of persons 65 years of age or older if the personal property
| ||
was not purchased by the enterprise for the purpose of resale | ||
by the
enterprise.
| ||
(11) Personal property sold to a governmental body, to a | ||
corporation,
society, association, foundation, or institution | ||
organized and operated
exclusively for charitable, religious, | ||
or educational purposes, or to a
not-for-profit corporation, | ||
society, association, foundation, institution,
or organization | ||
that has no compensated officers or employees and that is
|
organized and operated primarily for the recreation of persons | ||
55 years of
age or older. A limited liability company may | ||
qualify for the exemption under
this paragraph only if the | ||
limited liability company is organized and operated
| ||
exclusively for educational purposes. On and after July 1, | ||
1987, however, no
entity otherwise eligible for this exemption | ||
shall make tax-free purchases
unless it has an active | ||
identification number issued by the Department.
| ||
(12) Tangible personal property sold to
interstate | ||
carriers
for hire for use as
rolling stock moving in interstate | ||
commerce or to lessors under leases of
one year or longer | ||
executed or in effect at the time of purchase by
interstate | ||
carriers for hire for use as rolling stock moving in interstate
| ||
commerce and equipment operated by a telecommunications | ||
provider, licensed as a
common carrier by the Federal | ||
Communications Commission, which is permanently
installed in | ||
or affixed to aircraft moving in interstate commerce.
| ||
(12-5) On and after July 1, 2003 and through June 30, 2004, | ||
motor vehicles of the second division
with a gross vehicle | ||
weight in excess of 8,000 pounds
that
are
subject to the | ||
commercial distribution fee imposed under Section 3-815.1 of
| ||
the Illinois
Vehicle Code. Beginning on July 1, 2004 and | ||
through June 30, 2005, the use in this State of motor vehicles | ||
of the second division: (i) with a gross vehicle weight rating | ||
in excess of 8,000 pounds; (ii) that are subject to the | ||
commercial distribution fee imposed under Section 3-815.1 of |
the Illinois Vehicle Code; and (iii) that are primarily used | ||
for commercial purposes. Through June 30, 2005, this
exemption | ||
applies to repair and replacement parts added
after the
initial | ||
purchase of such a motor vehicle if that motor vehicle is used | ||
in a
manner that
would qualify for the rolling stock exemption | ||
otherwise provided for in this
Act. For purposes of this | ||
paragraph, "used for commercial purposes" means the | ||
transportation of persons or property in furtherance of any | ||
commercial or industrial enterprise whether for-hire or not.
| ||
(13) Proceeds from sales to owners, lessors, or
shippers of
| ||
tangible personal property that is utilized by interstate | ||
carriers for
hire for use as rolling stock moving in interstate | ||
commerce
and equipment operated by a telecommunications | ||
provider, licensed as a
common carrier by the Federal | ||
Communications Commission, which is
permanently installed in | ||
or affixed to aircraft moving in interstate commerce.
| ||
(14) Machinery and equipment that will be used by the | ||
purchaser, or a
lessee of the purchaser, primarily in the | ||
process of manufacturing or
assembling tangible personal | ||
property for wholesale or retail sale or
lease, whether the | ||
sale or lease is made directly by the manufacturer or by
some | ||
other person, whether the materials used in the process are | ||
owned by
the manufacturer or some other person, or whether the | ||
sale or lease is made
apart from or as an incident to the | ||
seller's engaging in the service
occupation of producing | ||
machines, tools, dies, jigs, patterns, gauges, or
other similar |
items of no commercial value on special order for a particular
| ||
purchaser.
| ||
(15) Proceeds of mandatory service charges separately | ||
stated on
customers' bills for purchase and consumption of food | ||
and beverages, to the
extent that the proceeds of the service | ||
charge are in fact turned over as
tips or as a substitute for | ||
tips to the employees who participate directly
in preparing, | ||
serving, hosting or cleaning up the food or beverage function
| ||
with respect to which the service charge is imposed.
| ||
(16) Petroleum products sold to a purchaser if the seller
| ||
is prohibited by federal law from charging tax to the | ||
purchaser.
| ||
(17) Tangible personal property sold to a common carrier by | ||
rail or
motor that
receives the physical possession of the | ||
property in Illinois and that
transports the property, or | ||
shares with another common carrier in the
transportation of the | ||
property, out of Illinois on a standard uniform bill
of lading | ||
showing the seller of the property as the shipper or consignor | ||
of
the property to a destination outside Illinois, for use | ||
outside Illinois.
| ||
(18) Legal tender, currency, medallions, or gold or silver | ||
coinage
issued by the State of Illinois, the government of the | ||
United States of
America, or the government of any foreign | ||
country, and bullion.
| ||
(19) Until July 1 2003, oil field exploration, drilling, | ||
and production
equipment, including
(i) rigs and parts of rigs, |
rotary rigs, cable tool
rigs, and workover rigs, (ii) pipe and | ||
tubular goods, including casing and
drill strings, (iii) pumps | ||
and pump-jack units, (iv) storage tanks and flow
lines, (v) any | ||
individual replacement part for oil field exploration,
| ||
drilling, and production equipment, and (vi) machinery and | ||
equipment purchased
for lease; but
excluding motor vehicles | ||
required to be registered under the Illinois
Vehicle Code.
| ||
(20) Photoprocessing machinery and equipment, including | ||
repair and
replacement parts, both new and used, including that | ||
manufactured on
special order, certified by the purchaser to be | ||
used primarily for
photoprocessing, and including | ||
photoprocessing machinery and equipment
purchased for lease.
| ||
(21) Until July 1, 2003, coal exploration, mining, | ||
offhighway hauling,
processing,
maintenance, and reclamation | ||
equipment, including
replacement parts and equipment, and | ||
including
equipment purchased for lease, but excluding motor | ||
vehicles required to be
registered under the Illinois Vehicle | ||
Code.
| ||
(22) Fuel and petroleum products sold to or used by an air | ||
carrier,
certified by the carrier to be used for consumption, | ||
shipment, or storage
in the conduct of its business as an air | ||
common carrier, for a flight
destined for or returning from a | ||
location or locations
outside the United States without regard | ||
to previous or subsequent domestic
stopovers.
| ||
(23) A transaction in which the purchase order is received | ||
by a florist
who is located outside Illinois, but who has a |
florist located in Illinois
deliver the property to the | ||
purchaser or the purchaser's donee in Illinois.
| ||
(24) Fuel consumed or used in the operation of ships, | ||
barges, or vessels
that are used primarily in or for the | ||
transportation of property or the
conveyance of persons for | ||
hire on rivers bordering on this State if the
fuel is delivered | ||
by the seller to the purchaser's barge, ship, or vessel
while | ||
it is afloat upon that bordering river.
| ||
(25) Except as provided in item (25-5) of this Section, a
| ||
motor vehicle sold in this State to a nonresident even though | ||
the
motor vehicle is delivered to the nonresident in this | ||
State, if the motor
vehicle is not to be titled in this State, | ||
and if a drive-away permit
is issued to the motor vehicle as | ||
provided in Section 3-603 of the Illinois
Vehicle Code or if | ||
the nonresident purchaser has vehicle registration
plates to | ||
transfer to the motor vehicle upon returning to his or her home
| ||
state. The issuance of the drive-away permit or having
the
| ||
out-of-state registration plates to be transferred is prima | ||
facie evidence
that the motor vehicle will not be titled in | ||
this State.
| ||
(25-5) The exemption under item (25) does not apply if the | ||
state in which the motor vehicle will be titled does not allow | ||
a reciprocal exemption for a motor vehicle sold and delivered | ||
in that state to an Illinois resident but titled in Illinois. | ||
The tax collected under this Act on the sale of a motor vehicle | ||
in this State to a resident of another state that does not |
allow a reciprocal exemption shall be imposed at a rate equal | ||
to the state's rate of tax on taxable property in the state in | ||
which the purchaser is a resident, except that the tax shall | ||
not exceed the tax that would otherwise be imposed under this | ||
Act. At the time of the sale, the purchaser shall execute a | ||
statement, signed under penalty of perjury, of his or her | ||
intent to title the vehicle in the state in which the purchaser | ||
is a resident within 30 days after the sale and of the fact of | ||
the payment to the State of Illinois of tax in an amount | ||
equivalent to the state's rate of tax on taxable property in | ||
his or her state of residence and shall submit the statement to | ||
the appropriate tax collection agency in his or her state of | ||
residence. In addition, the retailer must retain a signed copy | ||
of the statement in his or her records. Nothing in this item | ||
shall be construed to require the removal of the vehicle from | ||
this state following the filing of an intent to title the | ||
vehicle in the purchaser's state of residence if the purchaser | ||
titles the vehicle in his or her state of residence within 30 | ||
days after the date of sale. The tax collected under this Act | ||
in accordance with this item (25-5) shall be proportionately | ||
distributed as if the tax were collected at the 6.25% general | ||
rate imposed under this Act.
| ||
(25-7) Beginning on July 1, 2007, no tax is imposed under | ||
this Act on the sale of an aircraft, as defined in Section 3 of | ||
the Illinois Aeronautics Act, if all of the following | ||
conditions are met: |
(1) the aircraft leaves this State within 15 days after | ||
the later of either the issuance of the final billing for | ||
the sale of the aircraft, or the authorized approval for | ||
return to service, completion of the maintenance record | ||
entry, and completion of the test flight and ground test | ||
for inspection, as required by 14 C.F.R. 91.407; | ||
(2) the aircraft is not based or registered in this | ||
State after the sale of the aircraft; and | ||
(3) the seller retains in his or her books and records | ||
and provides to the Department a signed and dated | ||
certification from the purchaser, on a form prescribed by | ||
the Department, certifying that the requirements of this | ||
item (25-7) are met. The certificate must also include the | ||
name and address of the purchaser, the address of the | ||
location where the aircraft is to be titled or registered, | ||
the address of the primary physical location of the | ||
aircraft, and other information that the Department may | ||
reasonably require. | ||
For purposes of this item (25-7): | ||
"Based in this State" means hangared, stored, or otherwise | ||
used, excluding post-sale customizations as defined in this | ||
Section, for 10 or more days in each 12-month period | ||
immediately following the date of the sale of the aircraft. | ||
"Registered in this State" means an aircraft registered | ||
with the Department of Transportation, Aeronautics Division, | ||
or titled or registered with the Federal Aviation |
Administration to an address located in this State. | ||
This paragraph (25-7) is exempt from the provisions
of
| ||
Section 2-70.
| ||
(26) Semen used for artificial insemination of livestock | ||
for direct
agricultural production.
| ||
(27) Horses, or interests in horses, registered with and | ||
meeting the
requirements of any of the
Arabian Horse Club | ||
Registry of America, Appaloosa Horse Club, American Quarter
| ||
Horse Association, United States
Trotting Association, or | ||
Jockey Club, as appropriate, used for
purposes of breeding or | ||
racing for prizes. This item (27) is exempt from the provisions | ||
of Section 2-70, and the exemption provided for under this item | ||
(27) applies for all periods beginning May 30, 1995, but no | ||
claim for credit or refund is allowed on or after January 1, | ||
2008 (the effective date of Public Act 95-88)
for such taxes | ||
paid during the period beginning May 30, 2000 and ending on | ||
January 1, 2008 (the effective date of Public Act 95-88).
| ||
(28) Computers and communications equipment utilized for | ||
any
hospital
purpose
and equipment used in the diagnosis,
| ||
analysis, or treatment of hospital patients sold to a lessor | ||
who leases the
equipment, under a lease of one year or longer | ||
executed or in effect at the
time of the purchase, to a
| ||
hospital
that has been issued an active tax exemption | ||
identification number by the
Department under Section 1g of | ||
this Act.
| ||
(29) Personal property sold to a lessor who leases the
|
property, under a
lease of one year or longer executed or in | ||
effect at the time of the purchase,
to a governmental body
that | ||
has been issued an active tax exemption identification number | ||
by the
Department under Section 1g of this Act.
| ||
(30) Beginning with taxable years ending on or after | ||
December
31, 1995
and
ending with taxable years ending on or | ||
before December 31, 2004,
personal property that is
donated for | ||
disaster relief to be used in a State or federally declared
| ||
disaster area in Illinois or bordering Illinois by a | ||
manufacturer or retailer
that is registered in this State to a | ||
corporation, society, association,
foundation, or institution | ||
that has been issued a sales tax exemption
identification | ||
number by the Department that assists victims of the disaster
| ||
who reside within the declared disaster area.
| ||
(31) Beginning with taxable years ending on or after | ||
December
31, 1995 and
ending with taxable years ending on or | ||
before December 31, 2004, personal
property that is used in the | ||
performance of infrastructure repairs in this
State, including | ||
but not limited to municipal roads and streets, access roads,
| ||
bridges, sidewalks, waste disposal systems, water and sewer | ||
line extensions,
water distribution and purification | ||
facilities, storm water drainage and
retention facilities, and | ||
sewage treatment facilities, resulting from a State
or | ||
federally declared disaster in Illinois or bordering Illinois | ||
when such
repairs are initiated on facilities located in the | ||
declared disaster area
within 6 months after the disaster.
|
(32) Beginning July 1, 1999, game or game birds sold at a | ||
"game breeding
and
hunting preserve area" as that term is used
| ||
in the
Wildlife Code. This paragraph is exempt from the | ||
provisions
of
Section 2-70.
| ||
(33) A motor vehicle, as that term is defined in Section | ||
1-146
of the
Illinois Vehicle Code, that is donated to a | ||
corporation, limited liability
company, society, association, | ||
foundation, or institution that is determined by
the Department | ||
to be organized and operated exclusively for educational
| ||
purposes. For purposes of this exemption, "a corporation, | ||
limited liability
company, society, association, foundation, | ||
or institution organized and
operated
exclusively for | ||
educational purposes" means all tax-supported public schools,
| ||
private schools that offer systematic instruction in useful | ||
branches of
learning by methods common to public schools and | ||
that compare favorably in
their scope and intensity with the | ||
course of study presented in tax-supported
schools, and | ||
vocational or technical schools or institutes organized and
| ||
operated exclusively to provide a course of study of not less | ||
than 6 weeks
duration and designed to prepare individuals to | ||
follow a trade or to pursue a
manual, technical, mechanical, | ||
industrial, business, or commercial
occupation.
| ||
(34) Beginning January 1, 2000, personal property, | ||
including food, purchased
through fundraising events for the | ||
benefit of a public or private elementary or
secondary school, | ||
a group of those schools, or one or more school districts if
|
the events are sponsored by an entity recognized by the school | ||
district that
consists primarily of volunteers and includes | ||
parents and teachers of the
school children. This paragraph | ||
does not apply to fundraising events (i) for
the benefit of | ||
private home instruction or (ii) for which the fundraising
| ||
entity purchases the personal property sold at the events from | ||
another
individual or entity that sold the property for the | ||
purpose of resale by the
fundraising entity and that profits | ||
from the sale to the fundraising entity.
This paragraph is | ||
exempt from the provisions of Section 2-70.
| ||
(35) Beginning January 1, 2000 and through December 31, | ||
2001, new or used
automatic vending machines that prepare and | ||
serve hot food and beverages,
including coffee, soup, and other | ||
items, and replacement parts for these
machines. Beginning | ||
January 1, 2002 and through June 30, 2003, machines
and parts | ||
for machines used in
commercial, coin-operated amusement and | ||
vending business if a use or occupation
tax is paid on the | ||
gross receipts derived from the use of the commercial,
| ||
coin-operated amusement and vending machines. This paragraph | ||
is exempt from
the provisions of Section 2-70.
| ||
(35-5) Beginning August 23, 2001 and through June 30, 2016 | ||
June 30, 2011 , food for human consumption that is to be | ||
consumed off
the premises where it is sold (other than | ||
alcoholic beverages, soft drinks,
and food that has been | ||
prepared for immediate consumption) and prescription
and | ||
nonprescription medicines, drugs, medical appliances, and |
insulin, urine
testing materials, syringes, and needles used by | ||
diabetics, for human use, when
purchased for use by a person | ||
receiving medical assistance under Article V of
the Illinois | ||
Public Aid Code who resides in a licensed long-term care | ||
facility,
as defined in the Nursing Home Care Act, or a | ||
licensed facility as defined in the ID/DD Community Care Act or | ||
the Specialized Mental Health Rehabilitation Act.
| ||
(36) Beginning August 2, 2001, computers and | ||
communications equipment
utilized for any hospital purpose and | ||
equipment used in the diagnosis,
analysis, or treatment of | ||
hospital patients sold to a lessor who leases the
equipment, | ||
under a lease of one year or longer executed or in effect at | ||
the
time of the purchase, to a hospital that has been issued an | ||
active tax
exemption identification number by the Department | ||
under Section 1g of this Act.
This paragraph is exempt from the | ||
provisions of Section 2-70.
| ||
(37) Beginning August 2, 2001, personal property sold to a | ||
lessor who
leases the property, under a lease of one year or | ||
longer executed or in effect
at the time of the purchase, to a | ||
governmental body that has been issued an
active tax exemption | ||
identification number by the Department under Section 1g
of | ||
this Act. This paragraph is exempt from the provisions of | ||
Section 2-70.
| ||
(38) Beginning on January 1, 2002 and through June 30, | ||
2016, tangible personal property purchased
from an Illinois | ||
retailer by a taxpayer engaged in centralized purchasing
|
activities in Illinois who will, upon receipt of the property | ||
in Illinois,
temporarily store the property in Illinois (i) for | ||
the purpose of subsequently
transporting it outside this State | ||
for use or consumption thereafter solely
outside this State or | ||
(ii) for the purpose of being processed, fabricated, or
| ||
manufactured into, attached to, or incorporated into other | ||
tangible personal
property to be transported outside this State | ||
and thereafter used or consumed
solely outside this State. The | ||
Director of Revenue shall, pursuant to rules
adopted in | ||
accordance with the Illinois Administrative Procedure Act, | ||
issue a
permit to any taxpayer in good standing with the | ||
Department who is eligible for
the exemption under this | ||
paragraph (38). The permit issued under
this paragraph (38) | ||
shall authorize the holder, to the extent and
in the manner | ||
specified in the rules adopted under this Act, to purchase
| ||
tangible personal property from a retailer exempt from the | ||
taxes imposed by
this Act. Taxpayers shall maintain all | ||
necessary books and records to
substantiate the use and | ||
consumption of all such tangible personal property
outside of | ||
the State of Illinois.
| ||
(39) Beginning January 1, 2008, tangible personal property | ||
used in the construction or maintenance of a community water | ||
supply, as defined under Section 3.145 of the Environmental | ||
Protection Act, that is operated by a not-for-profit | ||
corporation that holds a valid water supply permit issued under | ||
Title IV of the Environmental Protection Act. This paragraph is |
exempt from the provisions of Section 2-70.
| ||
(40) Beginning January 1, 2010, materials, parts, | ||
equipment, components, and furnishings incorporated into or | ||
upon an aircraft as part of the modification, refurbishment, | ||
completion, replacement, repair, or maintenance of the | ||
aircraft. This exemption includes consumable supplies used in | ||
the modification, refurbishment, completion, replacement, | ||
repair, and maintenance of aircraft, but excludes any | ||
materials, parts, equipment, components, and consumable | ||
supplies used in the modification, replacement, repair, and | ||
maintenance of aircraft engines or power plants, whether such | ||
engines or power plants are installed or uninstalled upon any | ||
such aircraft. "Consumable supplies" include, but are not | ||
limited to, adhesive, tape, sandpaper, general purpose | ||
lubricants, cleaning solution, latex gloves, and protective | ||
films. This exemption applies only to those organizations that | ||
(i) hold an Air Agency Certificate and are empowered to operate | ||
an approved repair station by the Federal Aviation | ||
Administration, (ii) have a Class IV Rating, and (iii) conduct | ||
operations in accordance with Part 145 of the Federal Aviation | ||
Regulations. The exemption does not include aircraft operated | ||
by a commercial air carrier providing scheduled passenger air | ||
service pursuant to authority issued under Part 121 or Part 129 | ||
of the Federal Aviation Regulations. | ||
(41) Tangible personal property sold to a | ||
public-facilities corporation, as described in Section |
11-65-10 of the Illinois Municipal Code, for purposes of | ||
constructing or furnishing a municipal convention hall, but | ||
only if the legal title to the municipal convention hall is | ||
transferred to the municipality without any further | ||
consideration by or on behalf of the municipality at the time | ||
of the completion of the municipal convention hall or upon the | ||
retirement or redemption of any bonds or other debt instruments | ||
issued by the public-facilities corporation in connection with | ||
the development of the municipal convention hall. This | ||
exemption includes existing public-facilities corporations as | ||
provided in Section 11-65-25 of the Illinois Municipal Code. | ||
This paragraph is exempt from the provisions of Section 2-70. | ||
(Source: P.A. 96-116, eff. 7-31-09; 96-339, eff. 7-1-10; | ||
96-532, eff. 8-14-09; 96-759, eff. 1-1-10; 96-1000, eff. | ||
7-2-10; 97-38, eff. 6-28-11; 97-73, eff. 6-30-11; 97-227, eff. | ||
1-1-12; 97-431, eff. 8-16-11; revised 9-12-11.)
| ||
(35 ILCS 120/2-10)
| ||
Sec. 2-10. Rate of tax. Unless otherwise provided in this | ||
Section,
the tax imposed by this Act is at the rate of 6.25% of | ||
gross receipts
from sales of tangible personal property made in | ||
the course of business.
| ||
Beginning on July 1, 2000 and through December 31, 2000, | ||
with respect to
motor fuel, as defined in Section 1.1 of the | ||
Motor Fuel Tax
Law, and gasohol, as defined in Section 3-40 of | ||
the Use Tax Act, the tax is
imposed at the rate of 1.25%.
|
Beginning on August 6, 2010 through August 15, 2010, with | ||
respect to sales tax holiday items as defined in Section 2-8 of | ||
this Act, the
tax is imposed at the rate of 1.25%. | ||
Within 14 days after the effective date of this amendatory | ||
Act of the 91st
General Assembly, each retailer of motor fuel | ||
and gasohol shall cause the
following notice to be posted in a | ||
prominently visible place on each retail
dispensing device that | ||
is used to dispense motor
fuel or gasohol in the State of | ||
Illinois: "As of July 1, 2000, the State of
Illinois has | ||
eliminated the State's share of sales tax on motor fuel and
| ||
gasohol through December 31, 2000. The price on this pump | ||
should reflect the
elimination of the tax." The notice shall be | ||
printed in bold print on a sign
that is no smaller than 4 | ||
inches by 8 inches. The sign shall be clearly
visible to | ||
customers. Any retailer who fails to post or maintain a | ||
required
sign through December 31, 2000 is guilty of a petty | ||
offense for which the fine
shall be $500 per day per each | ||
retail premises where a violation occurs.
| ||
With respect to gasohol, as defined in the Use Tax Act, the | ||
tax imposed
by this Act applies to (i) 70% of the proceeds of | ||
sales made on or after
January 1, 1990, and before July 1, | ||
2003, (ii) 80% of the proceeds of
sales made on or after July | ||
1, 2003 and on or before December 31,
2018 2013 , and (iii) 100% | ||
of the proceeds of sales
made thereafter.
If, at any time, | ||
however, the tax under this Act on sales of gasohol, as
defined | ||
in
the Use Tax Act, is imposed at the rate of 1.25%, then the
|
tax imposed by this Act applies to 100% of the proceeds of | ||
sales of gasohol
made during that time.
| ||
With respect to majority blended ethanol fuel, as defined | ||
in the Use Tax Act,
the
tax
imposed by this Act does not apply | ||
to the proceeds of sales made on or after
July 1, 2003 and on or | ||
before December 31, 2018 2013 but applies to 100% of the
| ||
proceeds of sales made thereafter.
| ||
With respect to biodiesel blends, as defined in the Use Tax | ||
Act, with no less
than 1% and no
more than 10% biodiesel, the | ||
tax imposed by this Act
applies to (i) 80% of the proceeds of | ||
sales made on or after July 1, 2003
and on or before December | ||
31, 2018 2013 and (ii) 100% of the
proceeds of sales made | ||
thereafter.
If, at any time, however, the tax under this Act on | ||
sales of biodiesel blends,
as
defined in the Use Tax Act, with | ||
no less than 1% and no more than 10% biodiesel
is imposed at | ||
the rate of 1.25%, then the
tax imposed by this Act applies to | ||
100% of the proceeds of sales of biodiesel
blends with no less | ||
than 1% and no more than 10% biodiesel
made
during that time.
| ||
With respect to 100% biodiesel, as defined in the Use Tax | ||
Act, and biodiesel
blends, as defined in the Use Tax Act, with
| ||
more than 10% but no more than 99% biodiesel, the tax imposed | ||
by this Act
does not apply to the proceeds of sales made on or | ||
after July 1, 2003
and on or before December 31, 2018 2013 but | ||
applies to 100% of the
proceeds of sales made thereafter.
| ||
With respect to food for human consumption that is to be | ||
consumed off the
premises where it is sold (other than |
alcoholic beverages, soft drinks, and
food that has been | ||
prepared for immediate consumption) and prescription and
| ||
nonprescription medicines, drugs, medical appliances, | ||
modifications to a motor
vehicle for the purpose of rendering | ||
it usable by a disabled person, and
insulin, urine testing | ||
materials, syringes, and needles used by diabetics, for
human | ||
use, the tax is imposed at the rate of 1%. For the purposes of | ||
this
Section, until September 1, 2009: the term "soft drinks" | ||
means any complete, finished, ready-to-use,
non-alcoholic | ||
drink, whether carbonated or not, including but not limited to
| ||
soda water, cola, fruit juice, vegetable juice, carbonated | ||
water, and all other
preparations commonly known as soft drinks | ||
of whatever kind or description that
are contained in any | ||
closed or sealed bottle, can, carton, or container,
regardless | ||
of size; but "soft drinks" does not include coffee, tea, | ||
non-carbonated
water, infant formula, milk or milk products as | ||
defined in the Grade A
Pasteurized Milk and Milk Products Act, | ||
or drinks containing 50% or more
natural fruit or vegetable | ||
juice.
| ||
Notwithstanding any other provisions of this
Act, | ||
beginning September 1, 2009, "soft drinks" means non-alcoholic | ||
beverages that contain natural or artificial sweeteners. "Soft | ||
drinks" do not include beverages that contain milk or milk | ||
products, soy, rice or similar milk substitutes, or greater | ||
than 50% of vegetable or fruit juice by volume. | ||
Until August 1, 2009, and notwithstanding any other |
provisions of this
Act, "food for human consumption that is to | ||
be consumed off the premises where
it is sold" includes all | ||
food sold through a vending machine, except soft
drinks and | ||
food products that are dispensed hot from a vending machine,
| ||
regardless of the location of the vending machine. Beginning | ||
August 1, 2009, and notwithstanding any other provisions of | ||
this Act, "food for human consumption that is to be consumed | ||
off the premises where it is sold" includes all food sold | ||
through a vending machine, except soft drinks, candy, and food | ||
products that are dispensed hot from a vending machine, | ||
regardless of the location of the vending machine.
| ||
Notwithstanding any other provisions of this
Act, | ||
beginning September 1, 2009, "food for human consumption that | ||
is to be consumed off the premises where
it is sold" does not | ||
include candy. For purposes of this Section, "candy" means a | ||
preparation of sugar, honey, or other natural or artificial | ||
sweeteners in combination with chocolate, fruits, nuts or other | ||
ingredients or flavorings in the form of bars, drops, or | ||
pieces. "Candy" does not include any preparation that contains | ||
flour or requires refrigeration. | ||
Notwithstanding any other provisions of this
Act, | ||
beginning September 1, 2009, "nonprescription medicines and | ||
drugs" does not include grooming and hygiene products. For | ||
purposes of this Section, "grooming and hygiene products" | ||
includes, but is not limited to, soaps and cleaning solutions, | ||
shampoo, toothpaste, mouthwash, antiperspirants, and sun tan |
lotions and screens, unless those products are available by | ||
prescription only, regardless of whether the products meet the | ||
definition of "over-the-counter-drugs". For the purposes of | ||
this paragraph, "over-the-counter-drug" means a drug for human | ||
use that contains a label that identifies the product as a drug | ||
as required by 21 C.F.R. ยง 201.66. The "over-the-counter-drug" | ||
label includes: | ||
(A) A "Drug Facts" panel; or | ||
(B) A statement of the "active ingredient(s)" with a | ||
list of those ingredients contained in the compound, | ||
substance or preparation.
| ||
(Source: P.A. 96-34, eff. 7-13-09; 96-37, eff. 7-13-09; 96-38, | ||
eff. 7-13-09; 96-1000, eff. 7-2-10; 96-1012, eff. 7-7-10.)
| ||
(35 ILCS 120/2-70)
| ||
Sec. 2-70. Sunset of exemptions, credits, and deductions. | ||
(a) The application
of every exemption, credit, and | ||
deduction against tax imposed by this Act that
becomes law | ||
after the effective date of this amendatory Act of 1994 shall | ||
be
limited by a reasonable and appropriate sunset date. A | ||
taxpayer is not
entitled to take the exemption, credit, or | ||
deduction beginning on the sunset
date and thereafter. Except | ||
as provided in subsection (b) of this Section, if If a | ||
reasonable and appropriate sunset date is not
specified in the | ||
Public Act that creates the exemption, credit, or deduction, a
| ||
taxpayer shall not be entitled to take the exemption, credit, |
or deduction
beginning 5 years after the effective date of the | ||
Public Act creating the
exemption, credit, or deduction and | ||
thereafter.
| ||
(b) Notwithstanding the provisions of subsection (a) of | ||
this Section, the sunset date of any exemption, credit, or | ||
deduction that is scheduled to expire in 2011, 2012, or 2013 by | ||
operation of this Section shall be extended by 5 years. | ||
(Source: P.A. 88-660, eff. 9-16-94.)
| ||
Section 15-37. The Property Tax Code is amended by changing | ||
Section 18-165 as follows:
| ||
(35 ILCS 200/18-165)
| ||
Sec. 18-165. Abatement of taxes.
| ||
(a) Any taxing district, upon a majority vote of its | ||
governing authority,
may, after the determination of the | ||
assessed valuation of its property, order
the clerk of that | ||
county to abate any portion of its taxes on the following
types | ||
of property:
| ||
(1) Commercial and industrial.
| ||
(A) The property of any commercial or industrial | ||
firm,
including but not limited to the property of (i) | ||
any firm that
is used for collecting, separating, | ||
storing, or processing recyclable
materials, locating | ||
within the taxing district during the immediately | ||
preceding
year from another state, territory, or |
country, or having been newly created
within this State | ||
during the immediately preceding year, or expanding an
| ||
existing facility, or (ii) any firm that is used for | ||
the generation and
transmission of
electricity | ||
locating within the taxing district during the | ||
immediately
preceding year or expanding its presence | ||
within the taxing district during the
immediately | ||
preceding year by construction of a new electric | ||
generating
facility that uses natural gas as its fuel, | ||
or any firm that is used for
production operations at a | ||
new,
expanded, or reopened coal mine within the taxing | ||
district, that
has been certified as a High Impact | ||
Business by the Illinois Department of
Commerce and | ||
Economic Opportunity. The property of any firm used for | ||
the
generation and transmission of electricity shall | ||
include all property of the
firm used for transmission | ||
facilities as defined in Section 5.5 of the Illinois
| ||
Enterprise Zone Act. The abatement shall not exceed a | ||
period of 10 years
and the aggregate amount of abated | ||
taxes for all taxing districts combined
shall not | ||
exceed $4,000,000.
| ||
(A-5) Any property in the taxing district of a new | ||
electric generating
facility, as defined in Section | ||
605-332 of the Department of Commerce and
Economic | ||
Opportunity Law of the Civil Administrative Code of | ||
Illinois.
The abatement shall not exceed a period of 10 |
years.
The abatement shall be subject to the following | ||
limitations:
| ||
(i) if the equalized assessed valuation of the | ||
new electric generating
facility is equal to or | ||
greater than $25,000,000 but less
than | ||
$50,000,000, then the abatement may not exceed (i) | ||
over the entire term
of the abatement, 5% of the | ||
taxing district's aggregate taxes from the
new | ||
electric generating facility and (ii) in any one
| ||
year of abatement, 20% of the taxing district's | ||
taxes from the
new electric generating facility;
| ||
(ii) if the equalized assessed valuation of | ||
the new electric
generating facility is equal to or | ||
greater than $50,000,000 but less
than | ||
$75,000,000, then the abatement may not exceed (i) | ||
over the entire term
of the abatement, 10% of the | ||
taxing district's aggregate taxes from the
new | ||
electric generating facility and (ii) in any one
| ||
year of abatement, 35% of the taxing district's | ||
taxes from the
new electric generating facility;
| ||
(iii) if the equalized assessed valuation of | ||
the new electric
generating facility
is equal to or | ||
greater than $75,000,000 but less
than | ||
$100,000,000, then the abatement may not exceed | ||
(i) over the entire term
of the abatement, 20% of | ||
the taxing district's aggregate taxes from the
new |
electric generating facility and (ii) in any one
| ||
year of abatement, 50% of the taxing district's | ||
taxes from the
new electric generating facility;
| ||
(iv) if the equalized assessed valuation of | ||
the new electric
generating facility is equal to or | ||
greater than $100,000,000 but less
than | ||
$125,000,000, then the
abatement may not exceed | ||
(i) over the entire term of the abatement, 30% of | ||
the
taxing district's aggregate taxes from the new | ||
electric generating facility
and (ii) in any one | ||
year of abatement, 60% of the taxing
district's | ||
taxes from the new electric generating facility;
| ||
(v) if the equalized assessed valuation of the | ||
new electric generating
facility is equal to or | ||
greater than $125,000,000 but less
than | ||
$150,000,000, then the
abatement may not exceed | ||
(i) over the entire term of the abatement, 40% of | ||
the
taxing district's aggregate taxes from the new | ||
electric generating facility
and (ii) in any one | ||
year of abatement, 60% of the taxing
district's | ||
taxes from the new electric generating facility;
| ||
(vi) if the equalized assessed valuation of | ||
the new electric
generating facility is equal to or | ||
greater than $150,000,000, then the
abatement may | ||
not exceed (i) over the entire term of the | ||
abatement, 50% of the
taxing district's aggregate |
taxes from the new electric generating facility
| ||
and (ii) in any one year of abatement, 60% of the | ||
taxing
district's taxes from the new electric | ||
generating facility.
| ||
The abatement is not effective unless
the owner of | ||
the new electric generating facility agrees to
repay to | ||
the taxing district all amounts previously abated, | ||
together with
interest computed at the rate and in the | ||
manner provided for delinquent taxes,
in the event that | ||
the owner of the new electric generating facility | ||
closes the
new electric generating facility before the | ||
expiration of the
entire term of the abatement.
| ||
The authorization of taxing districts to abate | ||
taxes under this
subdivision (a)(1)(A-5) expires on | ||
January 1, 2010.
| ||
(B) The property of any commercial or industrial
| ||
development of at least 500 acres having been created | ||
within the taxing
district. The abatement shall not | ||
exceed a period of 20 years and the
aggregate amount of | ||
abated taxes for all taxing districts combined shall | ||
not
exceed $12,000,000.
| ||
(C) The property of any commercial or industrial | ||
firm currently
located in the taxing district that | ||
expands a facility or its number of
employees. The | ||
abatement shall not exceed a period of 10 years and the
| ||
aggregate amount of abated taxes for all taxing |
districts combined shall not
exceed $4,000,000. The | ||
abatement period may be renewed at the option of the
| ||
taxing districts.
| ||
(2) Horse racing. Any property in the taxing district | ||
which
is used for the racing of horses and upon which | ||
capital improvements consisting
of expansion, improvement | ||
or replacement of existing facilities have been made
since | ||
July 1, 1987. The combined abatements for such property | ||
from all taxing
districts in any county shall not exceed | ||
$5,000,000 annually and shall not
exceed a period of 10 | ||
years.
| ||
(3) Auto racing. Any property designed exclusively for | ||
the racing of
motor vehicles. Such abatement shall not | ||
exceed a period of 10 years.
| ||
(4) Academic or research institute. The property of any | ||
academic or
research institute in the taxing district that | ||
(i) is an exempt organization
under paragraph (3) of | ||
Section 501(c) of the Internal Revenue Code, (ii)
operates | ||
for the benefit of the public by actually and exclusively | ||
performing
scientific research and making the results of | ||
the research available to the
interested public on a | ||
non-discriminatory basis, and (iii) employs more than
100 | ||
employees. An abatement granted under this paragraph shall | ||
be for at
least 15 years and the aggregate amount of abated | ||
taxes for all taxing
districts combined shall not exceed | ||
$5,000,000.
|
(5) Housing for older persons. Any property in the | ||
taxing district that
is devoted exclusively to affordable | ||
housing for older households. For
purposes of this | ||
paragraph, "older households" means those households (i)
| ||
living in housing provided under any State or federal | ||
program that the
Department of Human Rights determines is | ||
specifically designed and operated to
assist elderly | ||
persons and is solely occupied by persons 55 years of age | ||
or
older and (ii) whose annual income does not exceed 80% | ||
of the area gross median
income, adjusted for family size, | ||
as such gross income and median income are
determined from | ||
time to time by the United States Department of Housing and
| ||
Urban Development. The abatement shall not exceed a period | ||
of 15 years, and
the aggregate amount of abated taxes for | ||
all taxing districts shall not exceed
$3,000,000.
| ||
(6) Historical society. For assessment years 1998 | ||
through 2018 2013 , the
property of an historical society | ||
qualifying as an exempt organization under
Section | ||
501(c)(3) of the federal Internal Revenue Code.
| ||
(7) Recreational facilities. Any property in the | ||
taxing district (i)
that is used for a municipal airport, | ||
(ii) that
is subject to a leasehold assessment under | ||
Section 9-195 of this Code and (iii)
which
is sublet from a | ||
park district that is leasing the property from a
| ||
municipality, but only if the property is used exclusively | ||
for recreational
facilities or for parking lots used |
exclusively for those facilities. The
abatement shall not | ||
exceed a period of 10 years.
| ||
(8) Relocated corporate headquarters. If approval | ||
occurs within 5 years
after the effective date of this | ||
amendatory Act of the 92nd General Assembly,
any property | ||
or a portion of any property in a taxing district that is | ||
used by
an eligible business for a corporate headquarters | ||
as defined in the Corporate
Headquarters Relocation Act. | ||
Instead of an abatement under this paragraph (8),
a taxing | ||
district may enter into an agreement with an eligible | ||
business to make
annual payments to that eligible business | ||
in an amount not to exceed the
property taxes paid directly | ||
or indirectly by that eligible business to the
taxing | ||
district and any other taxing districts for
premises | ||
occupied pursuant to a written lease and may make those | ||
payments
without the need for an annual appropriation. No | ||
school district, however, may
enter into an agreement with, | ||
or abate taxes for, an eligible business unless
the | ||
municipality in which the corporate headquarters is | ||
located agrees to
provide funding to the school district in | ||
an amount equal to the amount abated
or paid by the school | ||
district as provided in this paragraph (8).
Any abatement | ||
ordered or
agreement entered into under this paragraph (8) | ||
may be effective for the entire
term specified by the | ||
taxing district, except the term of the abatement or
annual | ||
payments may not exceed 20 years. |
(9) United States Military Public/Private Residential | ||
Developments. Each building, structure, or other | ||
improvement designed, financed, constructed, renovated, | ||
managed, operated, or maintained after January 1, 2006 | ||
under a "PPV Lease", as set forth under Division 14 of | ||
Article 10, and any such PPV Lease.
| ||
(10) Property located in a business corridor that | ||
qualifies for an abatement under Section 18-184.10. | ||
(b) Upon a majority vote of its governing authority, any | ||
municipality
may, after the determination of the assessed | ||
valuation of its property, order
the county clerk to abate any | ||
portion of its taxes on any property that is
located within the | ||
corporate limits of the municipality in accordance with
Section | ||
8-3-18 of the Illinois Municipal Code.
| ||
(Source: P.A. 96-1136, eff. 7-21-10; 97-577, eff. 1-1-12.)
| ||
Section 15-40. The Illinois Estate and Generation-Skipping | ||
Transfer Tax Act is amended by changing Section 2 as follows:
| ||
(35 ILCS 405/2) (from Ch. 120, par. 405A-2)
| ||
Sec. 2. Definitions.
| ||
"Federal estate tax" means the tax due to the United States | ||
with respect
to a taxable transfer under Chapter 11 of the | ||
Internal Revenue Code.
| ||
"Federal generation-skipping transfer tax" means the tax | ||
due to the
United States with respect to a taxable transfer |
under Chapter 13 of the
Internal Revenue Code.
| ||
"Federal return" means the federal estate tax return with | ||
respect to the
federal estate tax and means the federal | ||
generation-skipping transfer tax
return
with respect to the | ||
federal generation-skipping transfer tax.
| ||
"Federal transfer tax" means the federal estate tax or the | ||
federal
generation-skipping transfer tax.
| ||
"Illinois estate tax" means the tax due to this State with | ||
respect to a
taxable transfer.
| ||
"Illinois generation-skipping transfer tax" means the tax | ||
due to this State
with respect to a taxable transfer that gives | ||
rise to a federal
generation-skipping transfer tax.
| ||
"Illinois transfer tax" means the Illinois estate tax or | ||
the Illinois
generation-skipping transfer tax.
| ||
"Internal Revenue Code" means, unless otherwise provided, | ||
the Internal
Revenue Code of 1986, as
amended from time to | ||
time.
| ||
"Non-resident trust" means a trust that is not a resident | ||
of this State
for purposes of the Illinois Income Tax Act, as | ||
amended from time to time.
| ||
"Person" means and includes any individual, trust, estate, | ||
partnership,
association, company or corporation.
| ||
"Qualified heir" means a qualified heir as defined in | ||
Section 2032A(e)(1)
of the Internal Revenue Code.
| ||
"Resident trust" means a trust that is a resident of this | ||
State for
purposes of the Illinois Income Tax Act, as amended |
from time to time.
| ||
"State" means any state, territory or possession of the | ||
United States and
the District of Columbia.
| ||
"State tax credit" means:
| ||
(a) For persons dying on or after January 1, 2003 and
| ||
through December 31, 2005, an amount
equal
to the full credit | ||
calculable under Section 2011 or Section 2604 of the
Internal | ||
Revenue
Code as the credit would have been computed and allowed | ||
under the Internal
Revenue
Code as in effect on December 31, | ||
2001, without the reduction in the State
Death Tax
Credit as | ||
provided in Section 2011(b)(2) or the termination of the State | ||
Death
Tax Credit
as provided in Section 2011(f) as enacted by | ||
the Economic Growth and Tax Relief
Reconciliation Act of 2001, | ||
but recognizing the increased applicable exclusion
amount
| ||
through December 31, 2005.
| ||
(b) For persons dying after December 31, 2005 and on or | ||
before December 31,
2009, and for persons dying after December | ||
31, 2010, an amount equal to the full
credit
calculable under | ||
Section 2011 or 2604 of the Internal Revenue Code as the
credit | ||
would
have been computed and allowed under the Internal Revenue | ||
Code as in effect on
December 31, 2001, without the reduction | ||
in the State Death Tax Credit as
provided in
Section 2011(b)(2) | ||
or the termination of the State Death Tax Credit as provided
in
| ||
Section 2011(f) as enacted by the Economic Growth and Tax | ||
Relief Reconciliation
Act of
2001, but recognizing the | ||
exclusion amount of only (i) $2,000,000 for persons dying prior |
to January 1, 2012, (ii) $3,500,000 for persons dying on or | ||
after January 1, 2012 and prior to January 1, 2013, and (iii) | ||
$4,000,000 for persons dying on or after January 1, 2013 , and | ||
with reduction to the adjusted taxable estate for any qualified | ||
terminable interest property election as defined in subsection | ||
(b-1) of this Section.
| ||
(b-1) The person required to file the Illinois return may | ||
elect on a timely filed Illinois return a marital deduction for | ||
qualified terminable interest property under Section | ||
2056(b)(7) of the Internal Revenue Code for purposes of the | ||
Illinois estate tax that is separate and independent of any | ||
qualified terminable interest property election for federal | ||
estate tax purposes. For purposes of the Illinois estate tax, | ||
the inclusion of property in the gross estate of a surviving | ||
spouse is the same as under Section 2044 of the Internal | ||
Revenue Code. | ||
In the case of any trust for which a State or federal | ||
qualified terminable interest property election is made, the | ||
trustee may not retain non-income producing assets for more | ||
than a reasonable amount of time without the consent of the | ||
surviving spouse.
| ||
"Taxable transfer" means an event that gives rise to a | ||
state tax credit,
including any credit as a result of the | ||
imposition of an
additional tax under Section 2032A(c) of the | ||
Internal Revenue Code.
| ||
"Transferee" means a transferee within the meaning of |
Section 2603(a)(1)
and Section 6901(h) of the Internal Revenue | ||
Code.
| ||
"Transferred property" means:
| ||
(1) With respect to a taxable transfer occurring at the | ||
death of an
individual, the
deceased individual's gross | ||
estate as defined in Section 2031 of the
Internal Revenue | ||
Code.
| ||
(2) With respect to a taxable transfer occurring as a | ||
result of a
taxable termination as defined in Section | ||
2612(a) of the Internal Revenue Code,
the taxable amount | ||
determined under Section 2622(a) of the Internal Revenue
| ||
Code.
| ||
(3) With respect to a taxable transfer occurring as a | ||
result of a
taxable distribution as defined in Section | ||
2612(b) of the Internal Revenue Code,
the taxable amount | ||
determined under Section 2621(a) of the Internal Revenue
| ||
Code.
| ||
(4) With respect to an event which causes the | ||
imposition of an
additional estate tax under Section | ||
2032A(c) of the Internal Revenue Code,
the
qualified real | ||
property that was disposed of or which ceased to be used | ||
for
the qualified use, within the meaning of Section | ||
2032A(c)(1) of the Internal
Revenue Code.
| ||
"Trust" includes a trust as defined in Section 2652(b)(1) | ||
of the Internal
Revenue Code.
| ||
(Source: P.A. 96-789, eff. 9-8-09; 96-1496, eff. 1-13-11.)
|