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1 | AN ACT concerning rural technology.
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2 | Be it enacted by the People of the State of Illinois, | ||||||||||||||||||||||||||||||||||
3 | represented in the General Assembly:
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4 | Section 1. Short title. This Act may be cited as the Arts | ||||||||||||||||||||||||||||||||||
5 | District Act.
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6 | Section 5. Definitions. As used in this Act: | ||||||||||||||||||||||||||||||||||
7 | "Council" means the Illinois Arts Council. | ||||||||||||||||||||||||||||||||||
8 | "Department" means the Department of Revenue. | ||||||||||||||||||||||||||||||||||
9 | "Downtown" has the meaning set forth under Section 605-523 | ||||||||||||||||||||||||||||||||||
10 | of the Department of Commerce and Economic Opportunity Law in | ||||||||||||||||||||||||||||||||||
11 | the Civil Administrative Code of Illinois. "Downtown" also | ||||||||||||||||||||||||||||||||||
12 | includes any district designated by the Illinois Main Street | ||||||||||||||||||||||||||||||||||
13 | Advisory Council under the Illinois Mainstreet Program. | ||||||||||||||||||||||||||||||||||
14 | "Gallery" means a person engaged in the sale of original | ||||||||||||||||||||||||||||||||||
15 | works of art. | ||||||||||||||||||||||||||||||||||
16 | "Work of art" means a painting, sculpture, book or other | ||||||||||||||||||||||||||||||||||
17 | literary work; musical composition, film, or live theatrical, | ||||||||||||||||||||||||||||||||||
18 | dance, or musical performance. | ||||||||||||||||||||||||||||||||||
19 | "Working artist" means in individual whose primary means of | ||||||||||||||||||||||||||||||||||
20 | employment is as an artist engaged in the creation of original | ||||||||||||||||||||||||||||||||||
21 | works of art. | ||||||||||||||||||||||||||||||||||
22 | Section 10. Creation of Illinois Arts Districts. |
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| |||||||
1 | (a) A municipality may apply to the Council to have | ||||||
2 | territory located that municipality designated as an Illinois | ||||||
3 | Arts District.
To qualify as an Illinois Arts District, the | ||||||
4 | territory must meet the following requirements: | ||||||
5 | (1) the territory must be a contiguous area located | ||||||
6 | within the downtown of the municipality; | ||||||
7 | (2) the territory must be within a blighted | ||||||
8 | neighborhood; | ||||||
9 | (3) the territory must house a significant number of | ||||||
10 | working artists and galleries that create or sell original | ||||||
11 | works of art; and | ||||||
12 | (4) the designation of the territory as an Illinois Art | ||||||
13 | District will likely spur the development of a larger arts | ||||||
14 | community. | ||||||
15 | The municipality's application must be in the form and manner | ||||||
16 | required by the Council. | ||||||
17 | (b) Upon receiving an application under subsection (a), the | ||||||
18 | Council must determine whether the territory qualifies for | ||||||
19 | designation as an Illinois Arts District under the requirements | ||||||
20 | set forth under subsection (a). In making this determination, | ||||||
21 | the Council may consider only those working artists and | ||||||
22 | galleries that create or sell original works of art. | ||||||
23 | (c) If the Council determines that the territory meets all | ||||||
24 | the requirements under subsection (a), then the Council shall | ||||||
25 | designate the territory as an Illinois Arts District. Within 30 | ||||||
26 | days after making this designation, the Council must notify the |
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| |||||||
1 | municipality and the Department of this designation.
| ||||||
2 | Section 15. Application of use and occupation taxes within | ||||||
3 | Illinois Arts Districts. | ||||||
4 | (a) Any gallery whose primary place of business is within | ||||||
5 | an Illinois Arts District and a working artist who both resides | ||||||
6 | and works within an Illinois Arts District may apply to the | ||||||
7 | Department for an exemption from the taxes imposed under the | ||||||
8 | Use Tax Act, the Service Use Tax Act, the Service Occupation | ||||||
9 | Tax Act, and the Retailers' Occupation Tax Act. The application | ||||||
10 | must be in the form and manner required by the Department. | ||||||
11 | (b) Any use or sale of a work of art that is sold from a | ||||||
12 | place of business within an Illinois Arts District by a person | ||||||
13 | who has been granted an exemption under subsection (a) is | ||||||
14 | exempt from the taxes imposed under the Use Tax Act, the | ||||||
15 | Service Use Tax Act, the Service Occupation Tax Act, and the | ||||||
16 | Retailers' Occupation Tax Act. | ||||||
17 | Section 20. Income tax deduction. A working artist may | ||||||
18 | deduct from his or her Illinois base income, under Section 203 | ||||||
19 | of the Illinois Income Tax Act, an amount equal to 50% of any | ||||||
20 | income derived solely from the sale of original works of art | ||||||
21 | created within an Illinois Arts District, but not to exceed | ||||||
22 | $12,000 in any taxable year. | ||||||
23 | Section 25. Application of the Film Production Services Tax |
| |||||||
| |||||||
1 | Credit Act. Nothing in this Act supersedes any provision of the | ||||||
2 | Film Production Services Tax Credit Act. No person may claim a | ||||||
3 | tax credit or other benefit in the same taxable year under both | ||||||
4 | this Act and the Film Production Services Tax Credit Act. | ||||||
5 | Section 30. Report. Within one year after the effective | ||||||
6 | date of this Act and each year thereafter, the Council shall | ||||||
7 | deliver to the Governor and the General Assembly a report | ||||||
8 | summarizing the number of Illinois Arts Districts, their impact | ||||||
9 | on local economies, and recommendations for further | ||||||
10 | improvements. Any other State agency must provide assistance, | ||||||
11 | as necessary, in the creation of the annual report.
| ||||||
12 | Section 900. The Illinois Income Tax Act is amended by | ||||||
13 | amending Section 203 as
follows:
| ||||||
14 | (35 ILCS 5/203) (from Ch. 120, par. 2-203)
| ||||||
15 | Sec. 203. Base income defined.
| ||||||
16 | (a) Individuals.
| ||||||
17 | (1) In general. In the case of an individual, base | ||||||
18 | income means an
amount equal to the taxpayer's adjusted | ||||||
19 | gross income for the taxable
year as modified by paragraph | ||||||
20 | (2).
| ||||||
21 | (2) Modifications. The adjusted gross income referred | ||||||
22 | to in
paragraph (1) shall be modified by adding thereto the | ||||||
23 | sum of the
following amounts:
|
| |||||||
| |||||||
1 | (A) An amount equal to all amounts paid or accrued | ||||||
2 | to the taxpayer
as interest or dividends during the | ||||||
3 | taxable year to the extent excluded
from gross income | ||||||
4 | in the computation of adjusted gross income, except | ||||||
5 | stock
dividends of qualified public utilities | ||||||
6 | described in Section 305(e) of the
Internal Revenue | ||||||
7 | Code;
| ||||||
8 | (B) An amount equal to the amount of tax imposed by | ||||||
9 | this Act to the
extent deducted from gross income in | ||||||
10 | the computation of adjusted gross
income for the | ||||||
11 | taxable year;
| ||||||
12 | (C) An amount equal to the amount received during | ||||||
13 | the taxable year
as a recovery or refund of real | ||||||
14 | property taxes paid with respect to the
taxpayer's | ||||||
15 | principal residence under the Revenue Act of
1939 and | ||||||
16 | for which a deduction was previously taken under | ||||||
17 | subparagraph (L) of
this paragraph (2) prior to July 1, | ||||||
18 | 1991, the retrospective application date of
Article 4 | ||||||
19 | of Public Act 87-17. In the case of multi-unit or | ||||||
20 | multi-use
structures and farm dwellings, the taxes on | ||||||
21 | the taxpayer's principal residence
shall be that | ||||||
22 | portion of the total taxes for the entire property | ||||||
23 | which is
attributable to such principal residence;
| ||||||
24 | (D) An amount equal to the amount of the capital | ||||||
25 | gain deduction
allowable under the Internal Revenue | ||||||
26 | Code, to the extent deducted from gross
income in the |
| |||||||
| |||||||
1 | computation of adjusted gross income;
| ||||||
2 | (D-5) An amount, to the extent not included in | ||||||
3 | adjusted gross income,
equal to the amount of money | ||||||
4 | withdrawn by the taxpayer in the taxable year from
a | ||||||
5 | medical care savings account and the interest earned on | ||||||
6 | the account in the
taxable year of a withdrawal | ||||||
7 | pursuant to subsection (b) of Section 20 of the
Medical | ||||||
8 | Care Savings Account Act or subsection (b) of Section | ||||||
9 | 20 of the
Medical Care Savings Account Act of 2000;
| ||||||
10 | (D-10) For taxable years ending after December 31, | ||||||
11 | 1997, an
amount equal to any eligible remediation costs | ||||||
12 | that the individual
deducted in computing adjusted | ||||||
13 | gross income and for which the
individual claims a | ||||||
14 | credit under subsection (l) of Section 201;
| ||||||
15 | (D-15) For taxable years 2001 and thereafter, an | ||||||
16 | amount equal to the
bonus depreciation deduction taken | ||||||
17 | on the taxpayer's federal income tax return for the | ||||||
18 | taxable
year under subsection (k) of Section 168 of the | ||||||
19 | Internal Revenue Code;
| ||||||
20 | (D-16) If the taxpayer sells, transfers, abandons, | ||||||
21 | or otherwise disposes of property for which the | ||||||
22 | taxpayer was required in any taxable year to
make an | ||||||
23 | addition modification under subparagraph (D-15), then | ||||||
24 | an amount equal
to the aggregate amount of the | ||||||
25 | deductions taken in all taxable
years under | ||||||
26 | subparagraph (Z) with respect to that property.
|
| |||||||
| |||||||
1 | If the taxpayer continues to own property through | ||||||
2 | the last day of the last tax year for which the | ||||||
3 | taxpayer may claim a depreciation deduction for | ||||||
4 | federal income tax purposes and for which the taxpayer | ||||||
5 | was allowed in any taxable year to make a subtraction | ||||||
6 | modification under subparagraph (Z), then an amount | ||||||
7 | equal to that subtraction modification.
| ||||||
8 | The taxpayer is required to make the addition | ||||||
9 | modification under this
subparagraph
only once with | ||||||
10 | respect to any one piece of property;
| ||||||
11 | (D-17) For taxable years ending on or after | ||||||
12 | December 31, 2004, an amount equal to the amount | ||||||
13 | otherwise allowed as a deduction in computing base | ||||||
14 | income for interest paid, accrued, or incurred, | ||||||
15 | directly or indirectly, to a foreign person who would | ||||||
16 | be a member of the same unitary business group but for | ||||||
17 | the fact that foreign person's business activity | ||||||
18 | outside the United States is 80% or more of the foreign | ||||||
19 | person's total business activity. The addition | ||||||
20 | modification required by this subparagraph shall be | ||||||
21 | reduced to the extent that dividends were included in | ||||||
22 | base income of the unitary group for the same taxable | ||||||
23 | year and received by the taxpayer or by a member of the | ||||||
24 | taxpayer's unitary business group (including amounts | ||||||
25 | included in gross income under Sections 951 through 964 | ||||||
26 | of the Internal Revenue Code and amounts included in |
| |||||||
| |||||||
1 | gross income under Section 78 of the Internal Revenue | ||||||
2 | Code) with respect to the stock of the same person to | ||||||
3 | whom the interest was paid, accrued, or incurred. | ||||||
4 | This paragraph shall not apply to the following:
| ||||||
5 | (i) an item of interest paid, accrued, or | ||||||
6 | incurred, directly or indirectly, to a foreign | ||||||
7 | person who is subject in a foreign country or | ||||||
8 | state, other than a state which requires mandatory | ||||||
9 | unitary reporting, to a tax on or measured by net | ||||||
10 | income with respect to such interest; or | ||||||
11 | (ii) an item of interest paid, accrued, or | ||||||
12 | incurred, directly or indirectly, to a foreign | ||||||
13 | person if the taxpayer can establish, based on a | ||||||
14 | preponderance of the evidence, both of the | ||||||
15 | following: | ||||||
16 | (a) the foreign person, during the same | ||||||
17 | taxable year, paid, accrued, or incurred, the | ||||||
18 | interest to a person that is not a related | ||||||
19 | member, and | ||||||
20 | (b) the transaction giving rise to the | ||||||
21 | interest expense between the taxpayer and the | ||||||
22 | foreign person did not have as a principal | ||||||
23 | purpose the avoidance of Illinois income tax, | ||||||
24 | and is paid pursuant to a contract or agreement | ||||||
25 | that reflects an arm's-length interest rate | ||||||
26 | and terms; or
|
| |||||||
| |||||||
1 | (iii) the taxpayer can establish, based on | ||||||
2 | clear and convincing evidence, that the interest | ||||||
3 | paid, accrued, or incurred relates to a contract or | ||||||
4 | agreement entered into at arm's-length rates and | ||||||
5 | terms and the principal purpose for the payment is | ||||||
6 | not federal or Illinois tax avoidance; or
| ||||||
7 | (iv) an item of interest paid, accrued, or | ||||||
8 | incurred, directly or indirectly, to a foreign | ||||||
9 | person if the taxpayer establishes by clear and | ||||||
10 | convincing evidence that the adjustments are | ||||||
11 | unreasonable; or if the taxpayer and the Director | ||||||
12 | agree in writing to the application or use of an | ||||||
13 | alternative method of apportionment under Section | ||||||
14 | 304(f).
| ||||||
15 | Nothing in this subsection shall preclude the | ||||||
16 | Director from making any other adjustment | ||||||
17 | otherwise allowed under Section 404 of this Act for | ||||||
18 | any tax year beginning after the effective date of | ||||||
19 | this amendment provided such adjustment is made | ||||||
20 | pursuant to regulation adopted by the Department | ||||||
21 | and such regulations provide methods and standards | ||||||
22 | by which the Department will utilize its authority | ||||||
23 | under Section 404 of this Act;
| ||||||
24 | (D-18) For taxable years ending on or after | ||||||
25 | December 31, 2004, an amount equal to the amount of | ||||||
26 | intangible expenses and costs otherwise allowed as a |
| |||||||
| |||||||
1 | deduction in computing base income, and that were paid, | ||||||
2 | accrued, or incurred, directly or indirectly, to a | ||||||
3 | foreign person who would be a member of the same | ||||||
4 | unitary business group but for the fact that the | ||||||
5 | foreign person's business activity outside the United | ||||||
6 | States is 80% or more of that person's total business | ||||||
7 | activity. The addition modification required by this | ||||||
8 | subparagraph shall be reduced to the extent that | ||||||
9 | dividends were included in base income of the unitary | ||||||
10 | group for the same taxable year and received by the | ||||||
11 | taxpayer or by a member of the taxpayer's unitary | ||||||
12 | business group (including amounts included in gross | ||||||
13 | income under Sections 951 through 964 of the Internal | ||||||
14 | Revenue Code and amounts included in gross income under | ||||||
15 | Section 78 of the Internal Revenue Code) with respect | ||||||
16 | to the stock of the same person to whom the intangible | ||||||
17 | expenses and costs were directly or indirectly paid, | ||||||
18 | incurred, or accrued. The preceding sentence does not | ||||||
19 | apply to the extent that the same dividends caused a | ||||||
20 | reduction to the addition modification required under | ||||||
21 | Section 203(a)(2)(D-17) of this Act. As used in this | ||||||
22 | subparagraph, the term "intangible expenses and costs" | ||||||
23 | includes (1) expenses, losses, and costs for, or | ||||||
24 | related to, the direct or indirect acquisition, use, | ||||||
25 | maintenance or management, ownership, sale, exchange, | ||||||
26 | or any other disposition of intangible property; (2) |
| |||||||
| |||||||
1 | losses incurred, directly or indirectly, from | ||||||
2 | factoring transactions or discounting transactions; | ||||||
3 | (3) royalty, patent, technical, and copyright fees; | ||||||
4 | (4) licensing fees; and (5) other similar expenses and | ||||||
5 | costs.
For purposes of this subparagraph, "intangible | ||||||
6 | property" includes patents, patent applications, trade | ||||||
7 | names, trademarks, service marks, copyrights, mask | ||||||
8 | works, trade secrets, and similar types of intangible | ||||||
9 | assets. | ||||||
10 | This paragraph shall not apply to the following: | ||||||
11 | (i) any item of intangible expenses or costs | ||||||
12 | paid, accrued, or incurred, directly or | ||||||
13 | indirectly, from a transaction with a foreign | ||||||
14 | person who is subject in a foreign country or | ||||||
15 | state, other than a state which requires mandatory | ||||||
16 | unitary reporting, to a tax on or measured by net | ||||||
17 | income with respect to such item; or | ||||||
18 | (ii) any item of intangible expense or cost | ||||||
19 | paid, accrued, or incurred, directly or | ||||||
20 | indirectly, if the taxpayer can establish, based | ||||||
21 | on a preponderance of the evidence, both of the | ||||||
22 | following: | ||||||
23 | (a) the foreign person during the same | ||||||
24 | taxable year paid, accrued, or incurred, the | ||||||
25 | intangible expense or cost to a person that is | ||||||
26 | not a related member, and |
| |||||||
| |||||||
1 | (b) the transaction giving rise to the | ||||||
2 | intangible expense or cost between the | ||||||
3 | taxpayer and the foreign person did not have as | ||||||
4 | a principal purpose the avoidance of Illinois | ||||||
5 | income tax, and is paid pursuant to a contract | ||||||
6 | or agreement that reflects arm's-length terms; | ||||||
7 | or | ||||||
8 | (iii) any item of intangible expense or cost | ||||||
9 | paid, accrued, or incurred, directly or | ||||||
10 | indirectly, from a transaction with a foreign | ||||||
11 | person if the taxpayer establishes by clear and | ||||||
12 | convincing evidence, that the adjustments are | ||||||
13 | unreasonable; or if the taxpayer and the Director | ||||||
14 | agree in writing to the application or use of an | ||||||
15 | alternative method of apportionment under Section | ||||||
16 | 304(f);
| ||||||
17 | Nothing in this subsection shall preclude the | ||||||
18 | Director from making any other adjustment | ||||||
19 | otherwise allowed under Section 404 of this Act for | ||||||
20 | any tax year beginning after the effective date of | ||||||
21 | this amendment provided such adjustment is made | ||||||
22 | pursuant to regulation adopted by the Department | ||||||
23 | and such regulations provide methods and standards | ||||||
24 | by which the Department will utilize its authority | ||||||
25 | under Section 404 of this Act;
| ||||||
26 | (D-20) For taxable years beginning on or after |
| |||||||
| |||||||
1 | January 1,
2002, in
the
case of a distribution from a | ||||||
2 | qualified tuition program under Section 529 of
the | ||||||
3 | Internal Revenue Code, other than (i) a distribution | ||||||
4 | from a College Savings
Pool created under Section 16.5 | ||||||
5 | of the State Treasurer Act or (ii) a
distribution from | ||||||
6 | the Illinois Prepaid Tuition Trust Fund, an amount | ||||||
7 | equal to
the amount excluded from gross income under | ||||||
8 | Section 529(c)(3)(B);
| ||||||
9 | and by deducting from the total so obtained the
sum of the | ||||||
10 | following amounts:
| ||||||
11 | (E) For taxable years ending before December 31, | ||||||
12 | 2001,
any amount included in such total in respect of | ||||||
13 | any compensation
(including but not limited to any | ||||||
14 | compensation paid or accrued to a
serviceman while a | ||||||
15 | prisoner of war or missing in action) paid to a | ||||||
16 | resident
by reason of being on active duty in the Armed | ||||||
17 | Forces of the United States
and in respect of any | ||||||
18 | compensation paid or accrued to a resident who as a
| ||||||
19 | governmental employee was a prisoner of war or missing | ||||||
20 | in action, and in
respect of any compensation paid to a | ||||||
21 | resident in 1971 or thereafter for
annual training | ||||||
22 | performed pursuant to Sections 502 and 503, Title 32,
| ||||||
23 | United States Code as a member of the Illinois National | ||||||
24 | Guard.
For taxable years ending on or after December | ||||||
25 | 31, 2001, any amount included in
such total in respect | ||||||
26 | of any compensation (including but not limited to any
|
| |||||||
| |||||||
1 | compensation paid or accrued to a serviceman while a | ||||||
2 | prisoner of war or missing
in action) paid to a | ||||||
3 | resident by reason of being a member of any component | ||||||
4 | of
the Armed Forces of the United States and in respect | ||||||
5 | of any compensation paid
or accrued to a resident who | ||||||
6 | as a governmental employee was a prisoner of war
or | ||||||
7 | missing in action, and in respect of any compensation | ||||||
8 | paid to a resident in
2001 or thereafter by reason of | ||||||
9 | being a member of the Illinois National Guard.
The | ||||||
10 | provisions of this amendatory Act of the 92nd General | ||||||
11 | Assembly are exempt
from the provisions of Section 250;
| ||||||
12 | (F) An amount equal to all amounts included in such | ||||||
13 | total pursuant
to the provisions of Sections 402(a), | ||||||
14 | 402(c), 403(a), 403(b), 406(a), 407(a),
and 408 of the | ||||||
15 | Internal Revenue Code, or included in such total as
| ||||||
16 | distributions under the provisions of any retirement | ||||||
17 | or disability plan for
employees of any governmental | ||||||
18 | agency or unit, or retirement payments to
retired | ||||||
19 | partners, which payments are excluded in computing net | ||||||
20 | earnings
from self employment by Section 1402 of the | ||||||
21 | Internal Revenue Code and
regulations adopted pursuant | ||||||
22 | thereto;
| ||||||
23 | (G) The valuation limitation amount;
| ||||||
24 | (H) An amount equal to the amount of any tax | ||||||
25 | imposed by this Act
which was refunded to the taxpayer | ||||||
26 | and included in such total for the
taxable year;
|
| |||||||
| |||||||
1 | (I) An amount equal to all amounts included in such | ||||||
2 | total pursuant
to the provisions of Section 111 of the | ||||||
3 | Internal Revenue Code as a
recovery of items previously | ||||||
4 | deducted from adjusted gross income in the
computation | ||||||
5 | of taxable income;
| ||||||
6 | (J) An amount equal to those dividends included in | ||||||
7 | such total which were
paid by a corporation which | ||||||
8 | conducts business operations in an Enterprise
Zone or | ||||||
9 | zones created under the Illinois Enterprise Zone Act or | ||||||
10 | a River Edge Redevelopment Zone or zones created under | ||||||
11 | the River Edge Redevelopment Zone Act, and conducts
| ||||||
12 | substantially all of its operations in an Enterprise | ||||||
13 | Zone or zones or a River Edge Redevelopment Zone or | ||||||
14 | zones. This subparagraph (J) is exempt from the | ||||||
15 | provisions of Section 250;
| ||||||
16 | (K) An amount equal to those dividends included in | ||||||
17 | such total that
were paid by a corporation that | ||||||
18 | conducts business operations in a federally
designated | ||||||
19 | Foreign Trade Zone or Sub-Zone and that is designated a | ||||||
20 | High Impact
Business located in Illinois; provided | ||||||
21 | that dividends eligible for the
deduction provided in | ||||||
22 | subparagraph (J) of paragraph (2) of this subsection
| ||||||
23 | shall not be eligible for the deduction provided under | ||||||
24 | this subparagraph
(K);
| ||||||
25 | (L) For taxable years ending after December 31, | ||||||
26 | 1983, an amount equal to
all social security benefits |
| |||||||
| |||||||
1 | and railroad retirement benefits included in
such | ||||||
2 | total pursuant to Sections 72(r) and 86 of the Internal | ||||||
3 | Revenue Code;
| ||||||
4 | (M) With the exception of any amounts subtracted | ||||||
5 | under subparagraph
(N), an amount equal to the sum of | ||||||
6 | all amounts disallowed as
deductions by (i) Sections | ||||||
7 | 171(a) (2), and 265(2) of the Internal Revenue Code
of | ||||||
8 | 1954, as now or hereafter amended, and all amounts of | ||||||
9 | expenses allocable
to interest and disallowed as | ||||||
10 | deductions by Section 265(1) of the Internal
Revenue | ||||||
11 | Code of 1954, as now or hereafter amended;
and (ii) for | ||||||
12 | taxable years
ending on or after August 13, 1999, | ||||||
13 | Sections 171(a)(2), 265,
280C, and 832(b)(5)(B)(i) of | ||||||
14 | the Internal Revenue Code; the provisions of this
| ||||||
15 | subparagraph are exempt from the provisions of Section | ||||||
16 | 250;
| ||||||
17 | (N) An amount equal to all amounts included in such | ||||||
18 | total which are
exempt from taxation by this State | ||||||
19 | either by reason of its statutes or
Constitution
or by | ||||||
20 | reason of the Constitution, treaties or statutes of the | ||||||
21 | United States;
provided that, in the case of any | ||||||
22 | statute of this State that exempts income
derived from | ||||||
23 | bonds or other obligations from the tax imposed under | ||||||
24 | this Act,
the amount exempted shall be the interest net | ||||||
25 | of bond premium amortization;
| ||||||
26 | (O) An amount equal to any contribution made to a |
| |||||||
| |||||||
1 | job training
project established pursuant to the Tax | ||||||
2 | Increment Allocation Redevelopment Act;
| ||||||
3 | (P) An amount equal to the amount of the deduction | ||||||
4 | used to compute the
federal income tax credit for | ||||||
5 | restoration of substantial amounts held under
claim of | ||||||
6 | right for the taxable year pursuant to Section 1341 of | ||||||
7 | the
Internal Revenue Code of 1986;
| ||||||
8 | (Q) An amount equal to any amounts included in such | ||||||
9 | total, received by
the taxpayer as an acceleration in | ||||||
10 | the payment of life, endowment or annuity
benefits in | ||||||
11 | advance of the time they would otherwise be payable as | ||||||
12 | an indemnity
for a terminal illness;
| ||||||
13 | (R) An amount equal to the amount of any federal or | ||||||
14 | State bonus paid
to veterans of the Persian Gulf War;
| ||||||
15 | (S) An amount, to the extent included in adjusted | ||||||
16 | gross income, equal
to the amount of a contribution | ||||||
17 | made in the taxable year on behalf of the
taxpayer to a | ||||||
18 | medical care savings account established under the | ||||||
19 | Medical Care
Savings Account Act or the Medical Care | ||||||
20 | Savings Account Act of 2000 to the
extent the | ||||||
21 | contribution is accepted by the account
administrator | ||||||
22 | as provided in that Act;
| ||||||
23 | (T) An amount, to the extent included in adjusted | ||||||
24 | gross income, equal to
the amount of interest earned in | ||||||
25 | the taxable year on a medical care savings
account | ||||||
26 | established under the Medical Care Savings Account Act |
| |||||||
| |||||||
1 | or the Medical
Care Savings Account Act of 2000 on | ||||||
2 | behalf of the
taxpayer, other than interest added | ||||||
3 | pursuant to item (D-5) of this paragraph
(2);
| ||||||
4 | (U) For one taxable year beginning on or after | ||||||
5 | January 1,
1994, an
amount equal to the total amount of | ||||||
6 | tax imposed and paid under subsections (a)
and (b) of | ||||||
7 | Section 201 of this Act on grant amounts received by | ||||||
8 | the taxpayer
under the Nursing Home Grant Assistance | ||||||
9 | Act during the taxpayer's taxable years
1992 and 1993;
| ||||||
10 | (V) Beginning with tax years ending on or after | ||||||
11 | December 31, 1995 and
ending with tax years ending on | ||||||
12 | or before December 31, 2004, an amount equal to
the | ||||||
13 | amount paid by a taxpayer who is a
self-employed | ||||||
14 | taxpayer, a partner of a partnership, or a
shareholder | ||||||
15 | in a Subchapter S corporation for health insurance or | ||||||
16 | long-term
care insurance for that taxpayer or that | ||||||
17 | taxpayer's spouse or dependents, to
the extent that the | ||||||
18 | amount paid for that health insurance or long-term care
| ||||||
19 | insurance may be deducted under Section 213 of the | ||||||
20 | Internal Revenue Code of
1986, has not been deducted on | ||||||
21 | the federal income tax return of the taxpayer,
and does | ||||||
22 | not exceed the taxable income attributable to that | ||||||
23 | taxpayer's income,
self-employment income, or | ||||||
24 | Subchapter S corporation income; except that no
| ||||||
25 | deduction shall be allowed under this item (V) if the | ||||||
26 | taxpayer is eligible to
participate in any health |
| |||||||
| |||||||
1 | insurance or long-term care insurance plan of an
| ||||||
2 | employer of the taxpayer or the taxpayer's
spouse. The | ||||||
3 | amount of the health insurance and long-term care | ||||||
4 | insurance
subtracted under this item (V) shall be | ||||||
5 | determined by multiplying total
health insurance and | ||||||
6 | long-term care insurance premiums paid by the taxpayer
| ||||||
7 | times a number that represents the fractional | ||||||
8 | percentage of eligible medical
expenses under Section | ||||||
9 | 213 of the Internal Revenue Code of 1986 not actually
| ||||||
10 | deducted on the taxpayer's federal income tax return;
| ||||||
11 | (W) For taxable years beginning on or after January | ||||||
12 | 1, 1998,
all amounts included in the taxpayer's federal | ||||||
13 | gross income
in the taxable year from amounts converted | ||||||
14 | from a regular IRA to a Roth IRA.
This paragraph is | ||||||
15 | exempt from the provisions of Section
250;
| ||||||
16 | (X) For taxable year 1999 and thereafter, an amount | ||||||
17 | equal to the
amount of any (i) distributions, to the | ||||||
18 | extent includible in gross income for
federal income | ||||||
19 | tax purposes, made to the taxpayer because of his or | ||||||
20 | her status
as a victim of persecution for racial or | ||||||
21 | religious reasons by Nazi Germany or
any other Axis | ||||||
22 | regime or as an heir of the victim and (ii) items
of | ||||||
23 | income, to the extent
includible in gross income for | ||||||
24 | federal income tax purposes, attributable to,
derived | ||||||
25 | from or in any way related to assets stolen from, | ||||||
26 | hidden from, or
otherwise lost to a victim of
|
| |||||||
| |||||||
1 | persecution for racial or religious reasons by Nazi | ||||||
2 | Germany or any other Axis
regime immediately prior to, | ||||||
3 | during, and immediately after World War II,
including, | ||||||
4 | but
not limited to, interest on the proceeds receivable | ||||||
5 | as insurance
under policies issued to a victim of | ||||||
6 | persecution for racial or religious
reasons
by Nazi | ||||||
7 | Germany or any other Axis regime by European insurance | ||||||
8 | companies
immediately prior to and during World War II;
| ||||||
9 | provided, however, this subtraction from federal | ||||||
10 | adjusted gross income does not
apply to assets acquired | ||||||
11 | with such assets or with the proceeds from the sale of
| ||||||
12 | such assets; provided, further, this paragraph shall | ||||||
13 | only apply to a taxpayer
who was the first recipient of | ||||||
14 | such assets after their recovery and who is a
victim of | ||||||
15 | persecution for racial or religious reasons
by Nazi | ||||||
16 | Germany or any other Axis regime or as an heir of the | ||||||
17 | victim. The
amount of and the eligibility for any | ||||||
18 | public assistance, benefit, or
similar entitlement is | ||||||
19 | not affected by the inclusion of items (i) and (ii) of
| ||||||
20 | this paragraph in gross income for federal income tax | ||||||
21 | purposes.
This paragraph is exempt from the provisions | ||||||
22 | of Section 250;
| ||||||
23 | (Y) For taxable years beginning on or after January | ||||||
24 | 1, 2002
and ending
on or before December 31, 2004, | ||||||
25 | moneys contributed in the taxable year to a College | ||||||
26 | Savings Pool account under
Section 16.5 of the State |
| |||||||
| |||||||
1 | Treasurer Act, except that amounts excluded from
gross | ||||||
2 | income under Section 529(c)(3)(C)(i) of the Internal | ||||||
3 | Revenue Code
shall not be considered moneys | ||||||
4 | contributed under this subparagraph (Y). For taxable | ||||||
5 | years beginning on or after January 1, 2005, a maximum | ||||||
6 | of $10,000
contributed
in the
taxable year to (i) a | ||||||
7 | College Savings Pool account under Section 16.5 of the
| ||||||
8 | State
Treasurer Act or (ii) the Illinois Prepaid | ||||||
9 | Tuition Trust Fund,
except that
amounts excluded from | ||||||
10 | gross income under Section 529(c)(3)(C)(i) of the
| ||||||
11 | Internal
Revenue Code shall not be considered moneys | ||||||
12 | contributed under this subparagraph
(Y). This
| ||||||
13 | subparagraph (Y) is exempt from the provisions of | ||||||
14 | Section 250;
| ||||||
15 | (Z) For taxable years 2001 and thereafter, for the | ||||||
16 | taxable year in
which the bonus depreciation deduction
| ||||||
17 | is taken on the taxpayer's federal income tax return | ||||||
18 | under
subsection (k) of Section 168 of the Internal | ||||||
19 | Revenue Code and for each
applicable taxable year | ||||||
20 | thereafter, an amount equal to "x", where:
| ||||||
21 | (1) "y" equals the amount of the depreciation | ||||||
22 | deduction taken for the
taxable year
on the | ||||||
23 | taxpayer's federal income tax return on property | ||||||
24 | for which the bonus
depreciation deduction
was | ||||||
25 | taken in any year under subsection (k) of Section | ||||||
26 | 168 of the Internal
Revenue Code, but not including |
| |||||||
| |||||||
1 | the bonus depreciation deduction;
| ||||||
2 | (2) for taxable years ending on or before | ||||||
3 | December 31, 2005, "x" equals "y" multiplied by 30 | ||||||
4 | and then divided by 70 (or "y"
multiplied by | ||||||
5 | 0.429); and | ||||||
6 | (3) for taxable years ending after December | ||||||
7 | 31, 2005: | ||||||
8 | (i) for property on which a bonus | ||||||
9 | depreciation deduction of 30% of the adjusted | ||||||
10 | basis was taken, "x" equals "y" multiplied by | ||||||
11 | 30 and then divided by 70 (or "y"
multiplied by | ||||||
12 | 0.429); and | ||||||
13 | (ii) for property on which a bonus | ||||||
14 | depreciation deduction of 50% of the adjusted | ||||||
15 | basis was taken, "x" equals "y" multiplied by | ||||||
16 | 1.0.
| ||||||
17 | The aggregate amount deducted under this | ||||||
18 | subparagraph in all taxable
years for any one piece of | ||||||
19 | property may not exceed the amount of the bonus
| ||||||
20 | depreciation deduction
taken on that property on the | ||||||
21 | taxpayer's federal income tax return under
subsection | ||||||
22 | (k) of Section 168 of the Internal Revenue Code. This | ||||||
23 | subparagraph (Z) is exempt from the provisions of | ||||||
24 | Section 250;
| ||||||
25 | (AA) If the taxpayer sells, transfers, abandons, | ||||||
26 | or otherwise disposes of
property for which the |
| |||||||
| |||||||
1 | taxpayer was required in any taxable year to make an
| ||||||
2 | addition modification under subparagraph (D-15), then | ||||||
3 | an amount equal to that
addition modification.
| ||||||
4 | If the taxpayer continues to own property through | ||||||
5 | the last day of the last tax year for which the | ||||||
6 | taxpayer may claim a depreciation deduction for | ||||||
7 | federal income tax purposes and for which the taxpayer | ||||||
8 | was required in any taxable year to make an addition | ||||||
9 | modification under subparagraph (D-15), then an amount | ||||||
10 | equal to that addition modification.
| ||||||
11 | The taxpayer is allowed to take the deduction under | ||||||
12 | this subparagraph
only once with respect to any one | ||||||
13 | piece of property. | ||||||
14 | This subparagraph (AA) is exempt from the | ||||||
15 | provisions of Section 250;
| ||||||
16 | (BB) Any amount included in adjusted gross income, | ||||||
17 | other
than
salary,
received by a driver in a | ||||||
18 | ridesharing arrangement using a motor vehicle;
| ||||||
19 | (CC) The amount of (i) any interest income (net of | ||||||
20 | the deductions allocable thereto) taken into account | ||||||
21 | for the taxable year with respect to a transaction with | ||||||
22 | a taxpayer that is required to make an addition | ||||||
23 | modification with respect to such transaction under | ||||||
24 | Section 203(a)(2)(D-17), 203(b)(2)(E-12), | ||||||
25 | 203(c)(2)(G-12), or 203(d)(2)(D-7), but not to exceed | ||||||
26 | the amount of that addition modification, and
(ii) any |
| |||||||
| |||||||
1 | income from intangible property (net of the deductions | ||||||
2 | allocable thereto) taken into account for the taxable | ||||||
3 | year with respect to a transaction with a taxpayer that | ||||||
4 | is required to make an addition modification with | ||||||
5 | respect to such transaction under Section | ||||||
6 | 203(a)(2)(D-18), 203(b)(2)(E-13), 203(c)(2)(G-13), or | ||||||
7 | 203(d)(2)(D-8), but not to exceed the amount of that | ||||||
8 | addition modification; | ||||||
9 | (DD) An amount equal to the interest income taken | ||||||
10 | into account for the taxable year (net of the | ||||||
11 | deductions allocable thereto) with respect to | ||||||
12 | transactions with a foreign person who would be a | ||||||
13 | member of the taxpayer's unitary business group but for | ||||||
14 | the fact that the foreign person's business activity | ||||||
15 | outside the United States is 80% or more of that | ||||||
16 | person's total business activity, but not to exceed the | ||||||
17 | addition modification required to be made for the same | ||||||
18 | taxable year under Section 203(a)(2)(D-17) for | ||||||
19 | interest paid, accrued, or incurred, directly or | ||||||
20 | indirectly, to the same foreign person; and | ||||||
21 | (EE) An amount equal to the income from intangible | ||||||
22 | property taken into account for the taxable year (net | ||||||
23 | of the deductions allocable thereto) with respect to | ||||||
24 | transactions with a foreign person who would be a | ||||||
25 | member of the taxpayer's unitary business group but for | ||||||
26 | the fact that the foreign person's business activity |
| |||||||
| |||||||
1 | outside the United States is 80% or more of that | ||||||
2 | person's total business activity, but not to exceed the | ||||||
3 | addition modification required to be made for the same | ||||||
4 | taxable year under Section 203(a)(2)(D-18) for | ||||||
5 | intangible expenses and costs paid, accrued, or | ||||||
6 | incurred, directly or indirectly, to the same foreign | ||||||
7 | person ; and .
| ||||||
8 | (FF) An amount equal to the amount set forth under | ||||||
9 | Section 20 of the Arts District Act.
| ||||||
10 | (b) Corporations.
| ||||||
11 | (1) In general. In the case of a corporation, base | ||||||
12 | income means an
amount equal to the taxpayer's taxable | ||||||
13 | income for the taxable year as
modified by paragraph (2).
| ||||||
14 | (2) Modifications. The taxable income referred to in | ||||||
15 | paragraph (1)
shall be modified by adding thereto the sum | ||||||
16 | of the following amounts:
| ||||||
17 | (A) An amount equal to all amounts paid or accrued | ||||||
18 | to the taxpayer
as interest and all distributions | ||||||
19 | received from regulated investment
companies during | ||||||
20 | the taxable year to the extent excluded from gross
| ||||||
21 | income in the computation of taxable income;
| ||||||
22 | (B) An amount equal to the amount of tax imposed by | ||||||
23 | this Act to the
extent deducted from gross income in | ||||||
24 | the computation of taxable income
for the taxable year;
| ||||||
25 | (C) In the case of a regulated investment company, |
| |||||||
| |||||||
1 | an amount equal to
the excess of (i) the net long-term | ||||||
2 | capital gain for the taxable year, over
(ii) the amount | ||||||
3 | of the capital gain dividends designated as such in | ||||||
4 | accordance
with Section 852(b)(3)(C) of the Internal | ||||||
5 | Revenue Code and any amount
designated under Section | ||||||
6 | 852(b)(3)(D) of the Internal Revenue Code,
| ||||||
7 | attributable to the taxable year (this amendatory Act | ||||||
8 | of 1995
(Public Act 89-89) is declarative of existing | ||||||
9 | law and is not a new
enactment);
| ||||||
10 | (D) The amount of any net operating loss deduction | ||||||
11 | taken in arriving
at taxable income, other than a net | ||||||
12 | operating loss carried forward from a
taxable year | ||||||
13 | ending prior to December 31, 1986;
| ||||||
14 | (E) For taxable years in which a net operating loss | ||||||
15 | carryback or
carryforward from a taxable year ending | ||||||
16 | prior to December 31, 1986 is an
element of taxable | ||||||
17 | income under paragraph (1) of subsection (e) or
| ||||||
18 | subparagraph (E) of paragraph (2) of subsection (e), | ||||||
19 | the amount by which
addition modifications other than | ||||||
20 | those provided by this subparagraph (E)
exceeded | ||||||
21 | subtraction modifications in such earlier taxable | ||||||
22 | year, with the
following limitations applied in the | ||||||
23 | order that they are listed:
| ||||||
24 | (i) the addition modification relating to the | ||||||
25 | net operating loss
carried back or forward to the | ||||||
26 | taxable year from any taxable year ending
prior to |
| |||||||
| |||||||
1 | December 31, 1986 shall be reduced by the amount of | ||||||
2 | addition
modification under this subparagraph (E) | ||||||
3 | which related to that net operating
loss and which | ||||||
4 | was taken into account in calculating the base | ||||||
5 | income of an
earlier taxable year, and
| ||||||
6 | (ii) the addition modification relating to the | ||||||
7 | net operating loss
carried back or forward to the | ||||||
8 | taxable year from any taxable year ending
prior to | ||||||
9 | December 31, 1986 shall not exceed the amount of | ||||||
10 | such carryback or
carryforward;
| ||||||
11 | For taxable years in which there is a net operating | ||||||
12 | loss carryback or
carryforward from more than one other | ||||||
13 | taxable year ending prior to December
31, 1986, the | ||||||
14 | addition modification provided in this subparagraph | ||||||
15 | (E) shall
be the sum of the amounts computed | ||||||
16 | independently under the preceding
provisions of this | ||||||
17 | subparagraph (E) for each such taxable year;
| ||||||
18 | (E-5) For taxable years ending after December 31, | ||||||
19 | 1997, an
amount equal to any eligible remediation costs | ||||||
20 | that the corporation
deducted in computing adjusted | ||||||
21 | gross income and for which the
corporation claims a | ||||||
22 | credit under subsection (l) of Section 201;
| ||||||
23 | (E-10) For taxable years 2001 and thereafter, an | ||||||
24 | amount equal to the
bonus depreciation deduction taken | ||||||
25 | on the taxpayer's federal income tax return for the | ||||||
26 | taxable
year under subsection (k) of Section 168 of the |
| |||||||
| |||||||
1 | Internal Revenue Code; and
| ||||||
2 | (E-11) If the taxpayer sells, transfers, abandons, | ||||||
3 | or otherwise disposes of property for which the | ||||||
4 | taxpayer was required in any taxable year to
make an | ||||||
5 | addition modification under subparagraph (E-10), then | ||||||
6 | an amount equal
to the aggregate amount of the | ||||||
7 | deductions taken in all taxable
years under | ||||||
8 | subparagraph (T) with respect to that property.
| ||||||
9 | If the taxpayer continues to own property through | ||||||
10 | the last day of the last tax year for which the | ||||||
11 | taxpayer may claim a depreciation deduction for | ||||||
12 | federal income tax purposes and for which the taxpayer | ||||||
13 | was allowed in any taxable year to make a subtraction | ||||||
14 | modification under subparagraph (T), then an amount | ||||||
15 | equal to that subtraction modification.
| ||||||
16 | The taxpayer is required to make the addition | ||||||
17 | modification under this
subparagraph
only once with | ||||||
18 | respect to any one piece of property;
| ||||||
19 | (E-12) For taxable years ending on or after | ||||||
20 | December 31, 2004, an amount equal to the amount | ||||||
21 | otherwise allowed as a deduction in computing base | ||||||
22 | income for interest paid, accrued, or incurred, | ||||||
23 | directly or indirectly, to a foreign person who would | ||||||
24 | be a member of the same unitary business group but for | ||||||
25 | the fact the foreign person's business activity | ||||||
26 | outside the United States is 80% or more of the foreign |
| |||||||
| |||||||
1 | person's total business activity. The addition | ||||||
2 | modification required by this subparagraph shall be | ||||||
3 | reduced to the extent that dividends were included in | ||||||
4 | base income of the unitary group for the same taxable | ||||||
5 | year and received by the taxpayer or by a member of the | ||||||
6 | taxpayer's unitary business group (including amounts | ||||||
7 | included in gross income pursuant to Sections 951 | ||||||
8 | through 964 of the Internal Revenue Code and amounts | ||||||
9 | included in gross income under Section 78 of the | ||||||
10 | Internal Revenue Code) with respect to the stock of the | ||||||
11 | same person to whom the interest was paid, accrued, or | ||||||
12 | incurred.
| ||||||
13 | This paragraph shall not apply to the following:
| ||||||
14 | (i) an item of interest paid, accrued, or | ||||||
15 | incurred, directly or indirectly, to a foreign | ||||||
16 | person who is subject in a foreign country or | ||||||
17 | state, other than a state which requires mandatory | ||||||
18 | unitary reporting, to a tax on or measured by net | ||||||
19 | income with respect to such interest; or | ||||||
20 | (ii) an item of interest paid, accrued, or | ||||||
21 | incurred, directly or indirectly, to a foreign | ||||||
22 | person if the taxpayer can establish, based on a | ||||||
23 | preponderance of the evidence, both of the | ||||||
24 | following: | ||||||
25 | (a) the foreign person, during the same | ||||||
26 | taxable year, paid, accrued, or incurred, the |
| |||||||
| |||||||
1 | interest to a person that is not a related | ||||||
2 | member, and | ||||||
3 | (b) the transaction giving rise to the | ||||||
4 | interest expense between the taxpayer and the | ||||||
5 | foreign person did not have as a principal | ||||||
6 | purpose the avoidance of Illinois income tax, | ||||||
7 | and is paid pursuant to a contract or agreement | ||||||
8 | that reflects an arm's-length interest rate | ||||||
9 | and terms; or
| ||||||
10 | (iii) the taxpayer can establish, based on | ||||||
11 | clear and convincing evidence, that the interest | ||||||
12 | paid, accrued, or incurred relates to a contract or | ||||||
13 | agreement entered into at arm's-length rates and | ||||||
14 | terms and the principal purpose for the payment is | ||||||
15 | not federal or Illinois tax avoidance; or
| ||||||
16 | (iv) an item of interest paid, accrued, or | ||||||
17 | incurred, directly or indirectly, to a foreign | ||||||
18 | person if the taxpayer establishes by clear and | ||||||
19 | convincing evidence that the adjustments are | ||||||
20 | unreasonable; or if the taxpayer and the Director | ||||||
21 | agree in writing to the application or use of an | ||||||
22 | alternative method of apportionment under Section | ||||||
23 | 304(f).
| ||||||
24 | Nothing in this subsection shall preclude the | ||||||
25 | Director from making any other adjustment | ||||||
26 | otherwise allowed under Section 404 of this Act for |
| |||||||
| |||||||
1 | any tax year beginning after the effective date of | ||||||
2 | this amendment provided such adjustment is made | ||||||
3 | pursuant to regulation adopted by the Department | ||||||
4 | and such regulations provide methods and standards | ||||||
5 | by which the Department will utilize its authority | ||||||
6 | under Section 404 of this Act;
| ||||||
7 | (E-13) For taxable years ending on or after | ||||||
8 | December 31, 2004, an amount equal to the amount of | ||||||
9 | intangible expenses and costs otherwise allowed as a | ||||||
10 | deduction in computing base income, and that were paid, | ||||||
11 | accrued, or incurred, directly or indirectly, to a | ||||||
12 | foreign person who would be a member of the same | ||||||
13 | unitary business group but for the fact that the | ||||||
14 | foreign person's business activity outside the United | ||||||
15 | States is 80% or more of that person's total business | ||||||
16 | activity. The addition modification required by this | ||||||
17 | subparagraph shall be reduced to the extent that | ||||||
18 | dividends were included in base income of the unitary | ||||||
19 | group for the same taxable year and received by the | ||||||
20 | taxpayer or by a member of the taxpayer's unitary | ||||||
21 | business group (including amounts included in gross | ||||||
22 | income pursuant to Sections 951 through 964 of the | ||||||
23 | Internal Revenue Code and amounts included in gross | ||||||
24 | income under Section 78 of the Internal Revenue Code) | ||||||
25 | with respect to the stock of the same person to whom | ||||||
26 | the intangible expenses and costs were directly or |
| |||||||
| |||||||
1 | indirectly paid, incurred, or accrued. The preceding | ||||||
2 | sentence shall not apply to the extent that the same | ||||||
3 | dividends caused a reduction to the addition | ||||||
4 | modification required under Section 203(b)(2)(E-12) of | ||||||
5 | this Act.
As used in this subparagraph, the term | ||||||
6 | "intangible expenses and costs" includes (1) expenses, | ||||||
7 | losses, and costs for, or related to, the direct or | ||||||
8 | indirect acquisition, use, maintenance or management, | ||||||
9 | ownership, sale, exchange, or any other disposition of | ||||||
10 | intangible property; (2) losses incurred, directly or | ||||||
11 | indirectly, from factoring transactions or discounting | ||||||
12 | transactions; (3) royalty, patent, technical, and | ||||||
13 | copyright fees; (4) licensing fees; and (5) other | ||||||
14 | similar expenses and costs.
For purposes of this | ||||||
15 | subparagraph, "intangible property" includes patents, | ||||||
16 | patent applications, trade names, trademarks, service | ||||||
17 | marks, copyrights, mask works, trade secrets, and | ||||||
18 | similar types of intangible assets. | ||||||
19 | This paragraph shall not apply to the following: | ||||||
20 | (i) any item of intangible expenses or costs | ||||||
21 | paid, accrued, or incurred, directly or | ||||||
22 | indirectly, from a transaction with a foreign | ||||||
23 | person who is subject in a foreign country or | ||||||
24 | state, other than a state which requires mandatory | ||||||
25 | unitary reporting, to a tax on or measured by net | ||||||
26 | income with respect to such item; or |
| |||||||
| |||||||
1 | (ii) any item of intangible expense or cost | ||||||
2 | paid, accrued, or incurred, directly or | ||||||
3 | indirectly, if the taxpayer can establish, based | ||||||
4 | on a preponderance of the evidence, both of the | ||||||
5 | following: | ||||||
6 | (a) the foreign person during the same | ||||||
7 | taxable year paid, accrued, or incurred, the | ||||||
8 | intangible expense or cost to a person that is | ||||||
9 | not a related member, and | ||||||
10 | (b) the transaction giving rise to the | ||||||
11 | intangible expense or cost between the | ||||||
12 | taxpayer and the foreign person did not have as | ||||||
13 | a principal purpose the avoidance of Illinois | ||||||
14 | income tax, and is paid pursuant to a contract | ||||||
15 | or agreement that reflects arm's-length terms; | ||||||
16 | or | ||||||
17 | (iii) any item of intangible expense or cost | ||||||
18 | paid, accrued, or incurred, directly or | ||||||
19 | indirectly, from a transaction with a foreign | ||||||
20 | person if the taxpayer establishes by clear and | ||||||
21 | convincing evidence, that the adjustments are | ||||||
22 | unreasonable; or if the taxpayer and the Director | ||||||
23 | agree in writing to the application or use of an | ||||||
24 | alternative method of apportionment under Section | ||||||
25 | 304(f);
| ||||||
26 | Nothing in this subsection shall preclude the |
| |||||||
| |||||||
1 | Director from making any other adjustment | ||||||
2 | otherwise allowed under Section 404 of this Act for | ||||||
3 | any tax year beginning after the effective date of | ||||||
4 | this amendment provided such adjustment is made | ||||||
5 | pursuant to regulation adopted by the Department | ||||||
6 | and such regulations provide methods and standards | ||||||
7 | by which the Department will utilize its authority | ||||||
8 | under Section 404 of this Act;
| ||||||
9 | and by deducting from the total so obtained the sum of the | ||||||
10 | following
amounts:
| ||||||
11 | (F) An amount equal to the amount of any tax | ||||||
12 | imposed by this Act
which was refunded to the taxpayer | ||||||
13 | and included in such total for the
taxable year;
| ||||||
14 | (G) An amount equal to any amount included in such | ||||||
15 | total under
Section 78 of the Internal Revenue Code;
| ||||||
16 | (H) In the case of a regulated investment company, | ||||||
17 | an amount equal
to the amount of exempt interest | ||||||
18 | dividends as defined in subsection (b)
(5) of Section | ||||||
19 | 852 of the Internal Revenue Code, paid to shareholders
| ||||||
20 | for the taxable year;
| ||||||
21 | (I) With the exception of any amounts subtracted | ||||||
22 | under subparagraph
(J),
an amount equal to the sum of | ||||||
23 | all amounts disallowed as
deductions by (i) Sections | ||||||
24 | 171(a) (2), and 265(a)(2) and amounts disallowed as
| ||||||
25 | interest expense by Section 291(a)(3) of the Internal | ||||||
26 | Revenue Code, as now
or hereafter amended, and all |
| |||||||
| |||||||
1 | amounts of expenses allocable to interest and
| ||||||
2 | disallowed as deductions by Section 265(a)(1) of the | ||||||
3 | Internal Revenue Code,
as now or hereafter amended;
and | ||||||
4 | (ii) for taxable years
ending on or after August 13, | ||||||
5 | 1999, Sections
171(a)(2), 265,
280C, 291(a)(3), and | ||||||
6 | 832(b)(5)(B)(i) of the Internal Revenue Code; the
| ||||||
7 | provisions of this
subparagraph are exempt from the | ||||||
8 | provisions of Section 250;
| ||||||
9 | (J) An amount equal to all amounts included in such | ||||||
10 | total which are
exempt from taxation by this State | ||||||
11 | either by reason of its statutes or
Constitution
or by | ||||||
12 | reason of the Constitution, treaties or statutes of the | ||||||
13 | United States;
provided that, in the case of any | ||||||
14 | statute of this State that exempts income
derived from | ||||||
15 | bonds or other obligations from the tax imposed under | ||||||
16 | this Act,
the amount exempted shall be the interest net | ||||||
17 | of bond premium amortization;
| ||||||
18 | (K) An amount equal to those dividends included in | ||||||
19 | such total
which were paid by a corporation which | ||||||
20 | conducts
business operations in an Enterprise Zone or | ||||||
21 | zones created under
the Illinois Enterprise Zone Act or | ||||||
22 | a River Edge Redevelopment Zone or zones created under | ||||||
23 | the River Edge Redevelopment Zone Act and conducts | ||||||
24 | substantially all of its
operations in an Enterprise | ||||||
25 | Zone or zones or a River Edge Redevelopment Zone or | ||||||
26 | zones. This subparagraph (K) is exempt from the |
| |||||||
| |||||||
1 | provisions of Section 250;
| ||||||
2 | (L) An amount equal to those dividends included in | ||||||
3 | such total that
were paid by a corporation that | ||||||
4 | conducts business operations in a federally
designated | ||||||
5 | Foreign Trade Zone or Sub-Zone and that is designated a | ||||||
6 | High Impact
Business located in Illinois; provided | ||||||
7 | that dividends eligible for the
deduction provided in | ||||||
8 | subparagraph (K) of paragraph 2 of this subsection
| ||||||
9 | shall not be eligible for the deduction provided under | ||||||
10 | this subparagraph
(L);
| ||||||
11 | (M) For any taxpayer that is a financial | ||||||
12 | organization within the meaning
of Section 304(c) of | ||||||
13 | this Act, an amount included in such total as interest
| ||||||
14 | income from a loan or loans made by such taxpayer to a | ||||||
15 | borrower, to the extent
that such a loan is secured by | ||||||
16 | property which is eligible for the Enterprise
Zone | ||||||
17 | Investment Credit or the River Edge Redevelopment Zone | ||||||
18 | Investment Credit. To determine the portion of a loan | ||||||
19 | or loans that is
secured by property eligible for a | ||||||
20 | Section 201(f) investment
credit to the borrower, the | ||||||
21 | entire principal amount of the loan or loans
between | ||||||
22 | the taxpayer and the borrower should be divided into | ||||||
23 | the basis of the
Section 201(f) investment credit | ||||||
24 | property which secures the
loan or loans, using for | ||||||
25 | this purpose the original basis of such property on
the | ||||||
26 | date that it was placed in service in the
Enterprise |
| |||||||
| |||||||
1 | Zone or the River Edge Redevelopment Zone. The | ||||||
2 | subtraction modification available to taxpayer in any
| ||||||
3 | year under this subsection shall be that portion of the | ||||||
4 | total interest paid
by the borrower with respect to | ||||||
5 | such loan attributable to the eligible
property as | ||||||
6 | calculated under the previous sentence. This | ||||||
7 | subparagraph (M) is exempt from the provisions of | ||||||
8 | Section 250;
| ||||||
9 | (M-1) For any taxpayer that is a financial | ||||||
10 | organization within the
meaning of Section 304(c) of | ||||||
11 | this Act, an amount included in such total as
interest | ||||||
12 | income from a loan or loans made by such taxpayer to a | ||||||
13 | borrower,
to the extent that such a loan is secured by | ||||||
14 | property which is eligible for
the High Impact Business | ||||||
15 | Investment Credit. To determine the portion of a
loan | ||||||
16 | or loans that is secured by property eligible for a | ||||||
17 | Section 201(h) investment credit to the borrower, the | ||||||
18 | entire principal amount of
the loan or loans between | ||||||
19 | the taxpayer and the borrower should be divided into
| ||||||
20 | the basis of the Section 201(h) investment credit | ||||||
21 | property which
secures the loan or loans, using for | ||||||
22 | this purpose the original basis of such
property on the | ||||||
23 | date that it was placed in service in a federally | ||||||
24 | designated
Foreign Trade Zone or Sub-Zone located in | ||||||
25 | Illinois. No taxpayer that is
eligible for the | ||||||
26 | deduction provided in subparagraph (M) of paragraph |
| |||||||
| |||||||
1 | (2) of
this subsection shall be eligible for the | ||||||
2 | deduction provided under this
subparagraph (M-1). The | ||||||
3 | subtraction modification available to taxpayers in
any | ||||||
4 | year under this subsection shall be that portion of the | ||||||
5 | total interest
paid by the borrower with respect to | ||||||
6 | such loan attributable to the eligible
property as | ||||||
7 | calculated under the previous sentence;
| ||||||
8 | (N) Two times any contribution made during the | ||||||
9 | taxable year to a
designated zone organization to the | ||||||
10 | extent that the contribution (i)
qualifies as a | ||||||
11 | charitable contribution under subsection (c) of | ||||||
12 | Section 170
of the Internal Revenue Code and (ii) must, | ||||||
13 | by its terms, be used for a
project approved by the | ||||||
14 | Department of Commerce and Economic Opportunity under | ||||||
15 | Section 11 of the Illinois Enterprise Zone Act or under | ||||||
16 | Section 10-10 of the Illinois River Edge Redevelopment | ||||||
17 | Zone Act. This subparagraph (N) is exempt from the | ||||||
18 | provisions of Section 250;
| ||||||
19 | (O) An amount equal to: (i) 85% for taxable years | ||||||
20 | ending on or before
December 31, 1992, or, a percentage | ||||||
21 | equal to the percentage allowable under
Section | ||||||
22 | 243(a)(1) of the Internal Revenue Code of 1986 for | ||||||
23 | taxable years ending
after December 31, 1992, of the | ||||||
24 | amount by which dividends included in taxable
income | ||||||
25 | and received from a corporation that is not created or | ||||||
26 | organized under
the laws of the United States or any |
| |||||||
| |||||||
1 | state or political subdivision thereof,
including, for | ||||||
2 | taxable years ending on or after December 31, 1988, | ||||||
3 | dividends
received or deemed received or paid or deemed | ||||||
4 | paid under Sections 951 through
964 of the Internal | ||||||
5 | Revenue Code, exceed the amount of the modification
| ||||||
6 | provided under subparagraph (G) of paragraph (2) of | ||||||
7 | this subsection (b) which
is related to such dividends; | ||||||
8 | plus (ii) 100% of the amount by which dividends,
| ||||||
9 | included in taxable income and received, including, | ||||||
10 | for taxable years ending on
or after December 31, 1988, | ||||||
11 | dividends received or deemed received or paid or
deemed | ||||||
12 | paid under Sections 951 through 964 of the Internal | ||||||
13 | Revenue Code, from
any such corporation specified in | ||||||
14 | clause (i) that would but for the provisions
of Section | ||||||
15 | 1504 (b) (3) of the Internal Revenue Code be treated as | ||||||
16 | a member of
the affiliated group which includes the | ||||||
17 | dividend recipient, exceed the amount
of the | ||||||
18 | modification provided under subparagraph (G) of | ||||||
19 | paragraph (2) of this
subsection (b) which is related | ||||||
20 | to such dividends;
| ||||||
21 | (P) An amount equal to any contribution made to a | ||||||
22 | job training project
established pursuant to the Tax | ||||||
23 | Increment Allocation Redevelopment Act;
| ||||||
24 | (Q) An amount equal to the amount of the deduction | ||||||
25 | used to compute the
federal income tax credit for | ||||||
26 | restoration of substantial amounts held under
claim of |
| |||||||
| |||||||
1 | right for the taxable year pursuant to Section 1341 of | ||||||
2 | the
Internal Revenue Code of 1986;
| ||||||
3 | (R) On and after July 20, 1999, in the case of an | ||||||
4 | attorney-in-fact with respect to whom an
interinsurer | ||||||
5 | or a reciprocal insurer has made the election under | ||||||
6 | Section 835 of
the Internal Revenue Code, 26 U.S.C. | ||||||
7 | 835, an amount equal to the excess, if
any, of the | ||||||
8 | amounts paid or incurred by that interinsurer or | ||||||
9 | reciprocal insurer
in the taxable year to the | ||||||
10 | attorney-in-fact over the deduction allowed to that
| ||||||
11 | interinsurer or reciprocal insurer with respect to the | ||||||
12 | attorney-in-fact under
Section 835(b) of the Internal | ||||||
13 | Revenue Code for the taxable year; the provisions of | ||||||
14 | this subparagraph are exempt from the provisions of | ||||||
15 | Section 250;
| ||||||
16 | (S) For taxable years ending on or after December | ||||||
17 | 31, 1997, in the
case of a Subchapter
S corporation, an | ||||||
18 | amount equal to all amounts of income allocable to a
| ||||||
19 | shareholder subject to the Personal Property Tax | ||||||
20 | Replacement Income Tax imposed
by subsections (c) and | ||||||
21 | (d) of Section 201 of this Act, including amounts
| ||||||
22 | allocable to organizations exempt from federal income | ||||||
23 | tax by reason of Section
501(a) of the Internal Revenue | ||||||
24 | Code. This subparagraph (S) is exempt from
the | ||||||
25 | provisions of Section 250;
| ||||||
26 | (T) For taxable years 2001 and thereafter, for the |
| |||||||
| |||||||
1 | taxable year in
which the bonus depreciation deduction
| ||||||
2 | is taken on the taxpayer's federal income tax return | ||||||
3 | under
subsection (k) of Section 168 of the Internal | ||||||
4 | Revenue Code and for each
applicable taxable year | ||||||
5 | thereafter, an amount equal to "x", where:
| ||||||
6 | (1) "y" equals the amount of the depreciation | ||||||
7 | deduction taken for the
taxable year
on the | ||||||
8 | taxpayer's federal income tax return on property | ||||||
9 | for which the bonus
depreciation deduction
was | ||||||
10 | taken in any year under subsection (k) of Section | ||||||
11 | 168 of the Internal
Revenue Code, but not including | ||||||
12 | the bonus depreciation deduction;
| ||||||
13 | (2) for taxable years ending on or before | ||||||
14 | December 31, 2005, "x" equals "y" multiplied by 30 | ||||||
15 | and then divided by 70 (or "y"
multiplied by | ||||||
16 | 0.429); and | ||||||
17 | (3) for taxable years ending after December | ||||||
18 | 31, 2005: | ||||||
19 | (i) for property on which a bonus | ||||||
20 | depreciation deduction of 30% of the adjusted | ||||||
21 | basis was taken, "x" equals "y" multiplied by | ||||||
22 | 30 and then divided by 70 (or "y"
multiplied by | ||||||
23 | 0.429); and | ||||||
24 | (ii) for property on which a bonus | ||||||
25 | depreciation deduction of 50% of the adjusted | ||||||
26 | basis was taken, "x" equals "y" multiplied by |
| |||||||
| |||||||
1 | 1.0.
| ||||||
2 | The aggregate amount deducted under this | ||||||
3 | subparagraph in all taxable
years for any one piece of | ||||||
4 | property may not exceed the amount of the bonus
| ||||||
5 | depreciation deduction
taken on that property on the | ||||||
6 | taxpayer's federal income tax return under
subsection | ||||||
7 | (k) of Section 168 of the Internal Revenue Code. This | ||||||
8 | subparagraph (T) is exempt from the provisions of | ||||||
9 | Section 250;
| ||||||
10 | (U) If the taxpayer sells, transfers, abandons, or | ||||||
11 | otherwise disposes of
property for which the taxpayer | ||||||
12 | was required in any taxable year to make an
addition | ||||||
13 | modification under subparagraph (E-10), then an amount | ||||||
14 | equal to that
addition modification.
| ||||||
15 | If the taxpayer continues to own property through | ||||||
16 | the last day of the last tax year for which the | ||||||
17 | taxpayer may claim a depreciation deduction for | ||||||
18 | federal income tax purposes and for which the taxpayer | ||||||
19 | was required in any taxable year to make an addition | ||||||
20 | modification under subparagraph (E-10), then an amount | ||||||
21 | equal to that addition modification.
| ||||||
22 | The taxpayer is allowed to take the deduction under | ||||||
23 | this subparagraph
only once with respect to any one | ||||||
24 | piece of property. | ||||||
25 | This subparagraph (U) is exempt from the | ||||||
26 | provisions of Section 250;
|
| |||||||
| |||||||
1 | (V) The amount of: (i) any interest income (net of | ||||||
2 | the deductions allocable thereto) taken into account | ||||||
3 | for the taxable year with respect to a transaction with | ||||||
4 | a taxpayer that is required to make an addition | ||||||
5 | modification with respect to such transaction under | ||||||
6 | Section 203(a)(2)(D-17), 203(b)(2)(E-12), | ||||||
7 | 203(c)(2)(G-12), or 203(d)(2)(D-7), but not to exceed | ||||||
8 | the amount of such addition modification and
(ii) any | ||||||
9 | income from intangible property (net of the deductions | ||||||
10 | allocable thereto) taken into account for the taxable | ||||||
11 | year with respect to a transaction with a taxpayer that | ||||||
12 | is required to make an addition modification with | ||||||
13 | respect to such transaction under Section | ||||||
14 | 203(a)(2)(D-18), 203(b)(2)(E-13), 203(c)(2)(G-13), or | ||||||
15 | 203(d)(2)(D-8), but not to exceed the amount of such | ||||||
16 | addition modification;
| ||||||
17 | (W) An amount equal to the interest income taken | ||||||
18 | into account for the taxable year (net of the | ||||||
19 | deductions allocable thereto) with respect to | ||||||
20 | transactions with a foreign person who would be a | ||||||
21 | member of the taxpayer's unitary business group but for | ||||||
22 | the fact that the foreign person's business activity | ||||||
23 | outside the United States is 80% or more of that | ||||||
24 | person's total business activity, but not to exceed the | ||||||
25 | addition modification required to be made for the same | ||||||
26 | taxable year under Section 203(b)(2)(E-12) for |
| |||||||
| |||||||
1 | interest paid, accrued, or incurred, directly or | ||||||
2 | indirectly, to the same foreign person; and
| ||||||
3 | (X) An amount equal to the income from intangible | ||||||
4 | property taken into account for the taxable year (net | ||||||
5 | of the deductions allocable thereto) with respect to | ||||||
6 | transactions with a foreign person who would be a | ||||||
7 | member of the taxpayer's unitary business group but for | ||||||
8 | the fact that the foreign person's business activity | ||||||
9 | outside the United States is 80% or more of that | ||||||
10 | person's total business activity, but not to exceed the | ||||||
11 | addition modification required to be made for the same | ||||||
12 | taxable year under Section 203(b)(2)(E-13) for | ||||||
13 | intangible expenses and costs paid, accrued, or | ||||||
14 | incurred, directly or indirectly, to the same foreign | ||||||
15 | person.
| ||||||
16 | (3) Special rule. For purposes of paragraph (2) (A), | ||||||
17 | "gross income"
in the case of a life insurance company, for | ||||||
18 | tax years ending on and after
December 31, 1994,
shall mean | ||||||
19 | the gross investment income for the taxable year.
| ||||||
20 | (c) Trusts and estates.
| ||||||
21 | (1) In general. In the case of a trust or estate, base | ||||||
22 | income means
an amount equal to the taxpayer's taxable | ||||||
23 | income for the taxable year as
modified by paragraph (2).
| ||||||
24 | (2) Modifications. Subject to the provisions of | ||||||
25 | paragraph (3), the
taxable income referred to in paragraph |
| |||||||
| |||||||
1 | (1) shall be modified by adding
thereto the sum of the | ||||||
2 | following amounts:
| ||||||
3 | (A) An amount equal to all amounts paid or accrued | ||||||
4 | to the taxpayer
as interest or dividends during the | ||||||
5 | taxable year to the extent excluded
from gross income | ||||||
6 | in the computation of taxable income;
| ||||||
7 | (B) In the case of (i) an estate, $600; (ii) a | ||||||
8 | trust which, under
its governing instrument, is | ||||||
9 | required to distribute all of its income
currently, | ||||||
10 | $300; and (iii) any other trust, $100, but in each such | ||||||
11 | case,
only to the extent such amount was deducted in | ||||||
12 | the computation of
taxable income;
| ||||||
13 | (C) An amount equal to the amount of tax imposed by | ||||||
14 | this Act to the
extent deducted from gross income in | ||||||
15 | the computation of taxable income
for the taxable year;
| ||||||
16 | (D) The amount of any net operating loss deduction | ||||||
17 | taken in arriving at
taxable income, other than a net | ||||||
18 | operating loss carried forward from a
taxable year | ||||||
19 | ending prior to December 31, 1986;
| ||||||
20 | (E) For taxable years in which a net operating loss | ||||||
21 | carryback or
carryforward from a taxable year ending | ||||||
22 | prior to December 31, 1986 is an
element of taxable | ||||||
23 | income under paragraph (1) of subsection (e) or | ||||||
24 | subparagraph
(E) of paragraph (2) of subsection (e), | ||||||
25 | the amount by which addition
modifications other than | ||||||
26 | those provided by this subparagraph (E) exceeded
|
| |||||||
| |||||||
1 | subtraction modifications in such taxable year, with | ||||||
2 | the following limitations
applied in the order that | ||||||
3 | they are listed:
| ||||||
4 | (i) the addition modification relating to the | ||||||
5 | net operating loss
carried back or forward to the | ||||||
6 | taxable year from any taxable year ending
prior to | ||||||
7 | December 31, 1986 shall be reduced by the amount of | ||||||
8 | addition
modification under this subparagraph (E) | ||||||
9 | which related to that net
operating loss and which | ||||||
10 | was taken into account in calculating the base
| ||||||
11 | income of an earlier taxable year, and
| ||||||
12 | (ii) the addition modification relating to the | ||||||
13 | net operating loss
carried back or forward to the | ||||||
14 | taxable year from any taxable year ending
prior to | ||||||
15 | December 31, 1986 shall not exceed the amount of | ||||||
16 | such carryback or
carryforward;
| ||||||
17 | For taxable years in which there is a net operating | ||||||
18 | loss carryback or
carryforward from more than one other | ||||||
19 | taxable year ending prior to December
31, 1986, the | ||||||
20 | addition modification provided in this subparagraph | ||||||
21 | (E) shall
be the sum of the amounts computed | ||||||
22 | independently under the preceding
provisions of this | ||||||
23 | subparagraph (E) for each such taxable year;
| ||||||
24 | (F) For taxable years ending on or after January 1, | ||||||
25 | 1989, an amount
equal to the tax deducted pursuant to | ||||||
26 | Section 164 of the Internal Revenue
Code if the trust |
| |||||||
| |||||||
1 | or estate is claiming the same tax for purposes of the
| ||||||
2 | Illinois foreign tax credit under Section 601 of this | ||||||
3 | Act;
| ||||||
4 | (G) An amount equal to the amount of the capital | ||||||
5 | gain deduction
allowable under the Internal Revenue | ||||||
6 | Code, to the extent deducted from
gross income in the | ||||||
7 | computation of taxable income;
| ||||||
8 | (G-5) For taxable years ending after December 31, | ||||||
9 | 1997, an
amount equal to any eligible remediation costs | ||||||
10 | that the trust or estate
deducted in computing adjusted | ||||||
11 | gross income and for which the trust
or estate claims a | ||||||
12 | credit under subsection (l) of Section 201;
| ||||||
13 | (G-10) For taxable years 2001 and thereafter, an | ||||||
14 | amount equal to the
bonus depreciation deduction taken | ||||||
15 | on the taxpayer's federal income tax return for the | ||||||
16 | taxable
year under subsection (k) of Section 168 of the | ||||||
17 | Internal Revenue Code; and
| ||||||
18 | (G-11) If the taxpayer sells, transfers, abandons, | ||||||
19 | or otherwise disposes of property for which the | ||||||
20 | taxpayer was required in any taxable year to
make an | ||||||
21 | addition modification under subparagraph (G-10), then | ||||||
22 | an amount equal
to the aggregate amount of the | ||||||
23 | deductions taken in all taxable
years under | ||||||
24 | subparagraph (R) with respect to that property.
| ||||||
25 | If the taxpayer continues to own property through | ||||||
26 | the last day of the last tax year for which the |
| |||||||
| |||||||
1 | taxpayer may claim a depreciation deduction for | ||||||
2 | federal income tax purposes and for which the taxpayer | ||||||
3 | was allowed in any taxable year to make a subtraction | ||||||
4 | modification under subparagraph (R), then an amount | ||||||
5 | equal to that subtraction modification.
| ||||||
6 | The taxpayer is required to make the addition | ||||||
7 | modification under this
subparagraph
only once with | ||||||
8 | respect to any one piece of property;
| ||||||
9 | (G-12) For taxable years ending on or after | ||||||
10 | December 31, 2004, an amount equal to the amount | ||||||
11 | otherwise allowed as a deduction in computing base | ||||||
12 | income for interest paid, accrued, or incurred, | ||||||
13 | directly or indirectly, to a foreign person who would | ||||||
14 | be a member of the same unitary business group but for | ||||||
15 | the fact that the foreign person's business activity | ||||||
16 | outside the United States is 80% or more of the foreign | ||||||
17 | person's total business activity. The addition | ||||||
18 | modification required by this subparagraph shall be | ||||||
19 | reduced to the extent that dividends were included in | ||||||
20 | base income of the unitary group for the same taxable | ||||||
21 | year and received by the taxpayer or by a member of the | ||||||
22 | taxpayer's unitary business group (including amounts | ||||||
23 | included in gross income pursuant to Sections 951 | ||||||
24 | through 964 of the Internal Revenue Code and amounts | ||||||
25 | included in gross income under Section 78 of the | ||||||
26 | Internal Revenue Code) with respect to the stock of the |
| |||||||
| |||||||
1 | same person to whom the interest was paid, accrued, or | ||||||
2 | incurred.
| ||||||
3 | This paragraph shall not apply to the following:
| ||||||
4 | (i) an item of interest paid, accrued, or | ||||||
5 | incurred, directly or indirectly, to a foreign | ||||||
6 | person who is subject in a foreign country or | ||||||
7 | state, other than a state which requires mandatory | ||||||
8 | unitary reporting, to a tax on or measured by net | ||||||
9 | income with respect to such interest; or | ||||||
10 | (ii) an item of interest paid, accrued, or | ||||||
11 | incurred, directly or indirectly, to a foreign | ||||||
12 | person if the taxpayer can establish, based on a | ||||||
13 | preponderance of the evidence, both of the | ||||||
14 | following: | ||||||
15 | (a) the foreign person, during the same | ||||||
16 | taxable year, paid, accrued, or incurred, the | ||||||
17 | interest to a person that is not a related | ||||||
18 | member, and | ||||||
19 | (b) the transaction giving rise to the | ||||||
20 | interest expense between the taxpayer and the | ||||||
21 | foreign person did not have as a principal | ||||||
22 | purpose the avoidance of Illinois income tax, | ||||||
23 | and is paid pursuant to a contract or agreement | ||||||
24 | that reflects an arm's-length interest rate | ||||||
25 | and terms; or
| ||||||
26 | (iii) the taxpayer can establish, based on |
| |||||||
| |||||||
1 | clear and convincing evidence, that the interest | ||||||
2 | paid, accrued, or incurred relates to a contract or | ||||||
3 | agreement entered into at arm's-length rates and | ||||||
4 | terms and the principal purpose for the payment is | ||||||
5 | not federal or Illinois tax avoidance; or
| ||||||
6 | (iv) an item of interest paid, accrued, or | ||||||
7 | incurred, directly or indirectly, to a foreign | ||||||
8 | person if the taxpayer establishes by clear and | ||||||
9 | convincing evidence that the adjustments are | ||||||
10 | unreasonable; or if the taxpayer and the Director | ||||||
11 | agree in writing to the application or use of an | ||||||
12 | alternative method of apportionment under Section | ||||||
13 | 304(f).
| ||||||
14 | Nothing in this subsection shall preclude the | ||||||
15 | Director from making any other adjustment | ||||||
16 | otherwise allowed under Section 404 of this Act for | ||||||
17 | any tax year beginning after the effective date of | ||||||
18 | this amendment provided such adjustment is made | ||||||
19 | pursuant to regulation adopted by the Department | ||||||
20 | and such regulations provide methods and standards | ||||||
21 | by which the Department will utilize its authority | ||||||
22 | under Section 404 of this Act;
| ||||||
23 | (G-13) For taxable years ending on or after | ||||||
24 | December 31, 2004, an amount equal to the amount of | ||||||
25 | intangible expenses and costs otherwise allowed as a | ||||||
26 | deduction in computing base income, and that were paid, |
| |||||||
| |||||||
1 | accrued, or incurred, directly or indirectly, to a | ||||||
2 | foreign person who would be a member of the same | ||||||
3 | unitary business group but for the fact that the | ||||||
4 | foreign person's business activity outside the United | ||||||
5 | States is 80% or more of that person's total business | ||||||
6 | activity. The addition modification required by this | ||||||
7 | subparagraph shall be reduced to the extent that | ||||||
8 | dividends were included in base income of the unitary | ||||||
9 | group for the same taxable year and received by the | ||||||
10 | taxpayer or by a member of the taxpayer's unitary | ||||||
11 | business group (including amounts included in gross | ||||||
12 | income pursuant to Sections 951 through 964 of the | ||||||
13 | Internal Revenue Code and amounts included in gross | ||||||
14 | income under Section 78 of the Internal Revenue Code) | ||||||
15 | with respect to the stock of the same person to whom | ||||||
16 | the intangible expenses and costs were directly or | ||||||
17 | indirectly paid, incurred, or accrued. The preceding | ||||||
18 | sentence shall not apply to the extent that the same | ||||||
19 | dividends caused a reduction to the addition | ||||||
20 | modification required under Section 203(c)(2)(G-12) of | ||||||
21 | this Act. As used in this subparagraph, the term | ||||||
22 | "intangible expenses and costs" includes: (1) | ||||||
23 | expenses, losses, and costs for or related to the | ||||||
24 | direct or indirect acquisition, use, maintenance or | ||||||
25 | management, ownership, sale, exchange, or any other | ||||||
26 | disposition of intangible property; (2) losses |
| |||||||
| |||||||
1 | incurred, directly or indirectly, from factoring | ||||||
2 | transactions or discounting transactions; (3) royalty, | ||||||
3 | patent, technical, and copyright fees; (4) licensing | ||||||
4 | fees; and (5) other similar expenses and costs. For | ||||||
5 | purposes of this subparagraph, "intangible property" | ||||||
6 | includes patents, patent applications, trade names, | ||||||
7 | trademarks, service marks, copyrights, mask works, | ||||||
8 | trade secrets, and similar types of intangible assets. | ||||||
9 | This paragraph shall not apply to the following: | ||||||
10 | (i) any item of intangible expenses or costs | ||||||
11 | paid, accrued, or incurred, directly or | ||||||
12 | indirectly, from a transaction with a foreign | ||||||
13 | person who is subject in a foreign country or | ||||||
14 | state, other than a state which requires mandatory | ||||||
15 | unitary reporting, to a tax on or measured by net | ||||||
16 | income with respect to such item; or | ||||||
17 | (ii) any item of intangible expense or cost | ||||||
18 | paid, accrued, or incurred, directly or | ||||||
19 | indirectly, if the taxpayer can establish, based | ||||||
20 | on a preponderance of the evidence, both of the | ||||||
21 | following: | ||||||
22 | (a) the foreign person during the same | ||||||
23 | taxable year paid, accrued, or incurred, the | ||||||
24 | intangible expense or cost to a person that is | ||||||
25 | not a related member, and | ||||||
26 | (b) the transaction giving rise to the |
| |||||||
| |||||||
1 | intangible expense or cost between the | ||||||
2 | taxpayer and the foreign person did not have as | ||||||
3 | a principal purpose the avoidance of Illinois | ||||||
4 | income tax, and is paid pursuant to a contract | ||||||
5 | or agreement that reflects arm's-length terms; | ||||||
6 | or | ||||||
7 | (iii) any item of intangible expense or cost | ||||||
8 | paid, accrued, or incurred, directly or | ||||||
9 | indirectly, from a transaction with a foreign | ||||||
10 | person if the taxpayer establishes by clear and | ||||||
11 | convincing evidence, that the adjustments are | ||||||
12 | unreasonable; or if the taxpayer and the Director | ||||||
13 | agree in writing to the application or use of an | ||||||
14 | alternative method of apportionment under Section | ||||||
15 | 304(f);
| ||||||
16 | Nothing in this subsection shall preclude the | ||||||
17 | Director from making any other adjustment | ||||||
18 | otherwise allowed under Section 404 of this Act for | ||||||
19 | any tax year beginning after the effective date of | ||||||
20 | this amendment provided such adjustment is made | ||||||
21 | pursuant to regulation adopted by the Department | ||||||
22 | and such regulations provide methods and standards | ||||||
23 | by which the Department will utilize its authority | ||||||
24 | under Section 404 of this Act;
| ||||||
25 | and by deducting from the total so obtained the sum of the | ||||||
26 | following
amounts:
|
| |||||||
| |||||||
1 | (H) An amount equal to all amounts included in such | ||||||
2 | total pursuant
to the provisions of Sections 402(a), | ||||||
3 | 402(c), 403(a), 403(b), 406(a), 407(a)
and 408 of the | ||||||
4 | Internal Revenue Code or included in such total as
| ||||||
5 | distributions under the provisions of any retirement | ||||||
6 | or disability plan for
employees of any governmental | ||||||
7 | agency or unit, or retirement payments to
retired | ||||||
8 | partners, which payments are excluded in computing net | ||||||
9 | earnings
from self employment by Section 1402 of the | ||||||
10 | Internal Revenue Code and
regulations adopted pursuant | ||||||
11 | thereto;
| ||||||
12 | (I) The valuation limitation amount;
| ||||||
13 | (J) An amount equal to the amount of any tax | ||||||
14 | imposed by this Act
which was refunded to the taxpayer | ||||||
15 | and included in such total for the
taxable year;
| ||||||
16 | (K) An amount equal to all amounts included in | ||||||
17 | taxable income as
modified by subparagraphs (A), (B), | ||||||
18 | (C), (D), (E), (F) and (G) which
are exempt from | ||||||
19 | taxation by this State either by reason of its statutes | ||||||
20 | or
Constitution
or by reason of the Constitution, | ||||||
21 | treaties or statutes of the United States;
provided | ||||||
22 | that, in the case of any statute of this State that | ||||||
23 | exempts income
derived from bonds or other obligations | ||||||
24 | from the tax imposed under this Act,
the amount | ||||||
25 | exempted shall be the interest net of bond premium | ||||||
26 | amortization;
|
| |||||||
| |||||||
1 | (L) With the exception of any amounts subtracted | ||||||
2 | under subparagraph
(K),
an amount equal to the sum of | ||||||
3 | all amounts disallowed as
deductions by (i) Sections | ||||||
4 | 171(a) (2) and 265(a)(2) of the Internal Revenue
Code, | ||||||
5 | as now or hereafter amended, and all amounts of | ||||||
6 | expenses allocable
to interest and disallowed as | ||||||
7 | deductions by Section 265(1) of the Internal
Revenue | ||||||
8 | Code of 1954, as now or hereafter amended;
and (ii) for | ||||||
9 | taxable years
ending on or after August 13, 1999, | ||||||
10 | Sections
171(a)(2), 265,
280C, and 832(b)(5)(B)(i) of | ||||||
11 | the Internal Revenue Code; the provisions of this
| ||||||
12 | subparagraph are exempt from the provisions of Section | ||||||
13 | 250;
| ||||||
14 | (M) An amount equal to those dividends included in | ||||||
15 | such total
which were paid by a corporation which | ||||||
16 | conducts business operations in an
Enterprise Zone or | ||||||
17 | zones created under the Illinois Enterprise Zone Act or | ||||||
18 | a River Edge Redevelopment Zone or zones created under | ||||||
19 | the River Edge Redevelopment Zone Act and
conducts | ||||||
20 | substantially all of its operations in an Enterprise | ||||||
21 | Zone or Zones or a River Edge Redevelopment Zone or | ||||||
22 | zones. This subparagraph (M) is exempt from the | ||||||
23 | provisions of Section 250;
| ||||||
24 | (N) An amount equal to any contribution made to a | ||||||
25 | job training
project established pursuant to the Tax | ||||||
26 | Increment Allocation
Redevelopment Act;
|
| |||||||
| |||||||
1 | (O) An amount equal to those dividends included in | ||||||
2 | such total
that were paid by a corporation that | ||||||
3 | conducts business operations in a
federally designated | ||||||
4 | Foreign Trade Zone or Sub-Zone and that is designated
a | ||||||
5 | High Impact Business located in Illinois; provided | ||||||
6 | that dividends eligible
for the deduction provided in | ||||||
7 | subparagraph (M) of paragraph (2) of this
subsection | ||||||
8 | shall not be eligible for the deduction provided under | ||||||
9 | this
subparagraph (O);
| ||||||
10 | (P) An amount equal to the amount of the deduction | ||||||
11 | used to compute the
federal income tax credit for | ||||||
12 | restoration of substantial amounts held under
claim of | ||||||
13 | right for the taxable year pursuant to Section 1341 of | ||||||
14 | the
Internal Revenue Code of 1986;
| ||||||
15 | (Q) For taxable year 1999 and thereafter, an amount | ||||||
16 | equal to the
amount of any
(i) distributions, to the | ||||||
17 | extent includible in gross income for
federal income | ||||||
18 | tax purposes, made to the taxpayer because of
his or | ||||||
19 | her status as a victim of
persecution for racial or | ||||||
20 | religious reasons by Nazi Germany or any other Axis
| ||||||
21 | regime or as an heir of the victim and (ii) items
of | ||||||
22 | income, to the extent
includible in gross income for | ||||||
23 | federal income tax purposes, attributable to,
derived | ||||||
24 | from or in any way related to assets stolen from, | ||||||
25 | hidden from, or
otherwise lost to a victim of
| ||||||
26 | persecution for racial or religious reasons by Nazi
|
| |||||||
| |||||||
1 | Germany or any other Axis regime
immediately prior to, | ||||||
2 | during, and immediately after World War II, including,
| ||||||
3 | but
not limited to, interest on the proceeds receivable | ||||||
4 | as insurance
under policies issued to a victim of | ||||||
5 | persecution for racial or religious
reasons by Nazi | ||||||
6 | Germany or any other Axis regime by European insurance
| ||||||
7 | companies
immediately prior to and during World War II;
| ||||||
8 | provided, however, this subtraction from federal | ||||||
9 | adjusted gross income does not
apply to assets acquired | ||||||
10 | with such assets or with the proceeds from the sale of
| ||||||
11 | such assets; provided, further, this paragraph shall | ||||||
12 | only apply to a taxpayer
who was the first recipient of | ||||||
13 | such assets after their recovery and who is a
victim of
| ||||||
14 | persecution for racial or religious reasons
by Nazi | ||||||
15 | Germany or any other Axis regime or as an heir of the | ||||||
16 | victim. The
amount of and the eligibility for any | ||||||
17 | public assistance, benefit, or
similar entitlement is | ||||||
18 | not affected by the inclusion of items (i) and (ii) of
| ||||||
19 | this paragraph in gross income for federal income tax | ||||||
20 | purposes.
This paragraph is exempt from the provisions | ||||||
21 | of Section 250;
| ||||||
22 | (R) For taxable years 2001 and thereafter, for the | ||||||
23 | taxable year in
which the bonus depreciation deduction
| ||||||
24 | is taken on the taxpayer's federal income tax return | ||||||
25 | under
subsection (k) of Section 168 of the Internal | ||||||
26 | Revenue Code and for each
applicable taxable year |
| |||||||
| |||||||
1 | thereafter, an amount equal to "x", where:
| ||||||
2 | (1) "y" equals the amount of the depreciation | ||||||
3 | deduction taken for the
taxable year
on the | ||||||
4 | taxpayer's federal income tax return on property | ||||||
5 | for which the bonus
depreciation deduction
was | ||||||
6 | taken in any year under subsection (k) of Section | ||||||
7 | 168 of the Internal
Revenue Code, but not including | ||||||
8 | the bonus depreciation deduction;
| ||||||
9 | (2) for taxable years ending on or before | ||||||
10 | December 31, 2005, "x" equals "y" multiplied by 30 | ||||||
11 | and then divided by 70 (or "y"
multiplied by | ||||||
12 | 0.429); and | ||||||
13 | (3) for taxable years ending after December | ||||||
14 | 31, 2005: | ||||||
15 | (i) for property on which a bonus | ||||||
16 | depreciation deduction of 30% of the adjusted | ||||||
17 | basis was taken, "x" equals "y" multiplied by | ||||||
18 | 30 and then divided by 70 (or "y"
multiplied by | ||||||
19 | 0.429); and | ||||||
20 | (ii) for property on which a bonus | ||||||
21 | depreciation deduction of 50% of the adjusted | ||||||
22 | basis was taken, "x" equals "y" multiplied by | ||||||
23 | 1.0.
| ||||||
24 | The aggregate amount deducted under this | ||||||
25 | subparagraph in all taxable
years for any one piece of | ||||||
26 | property may not exceed the amount of the bonus
|
| |||||||
| |||||||
1 | depreciation deduction
taken on that property on the | ||||||
2 | taxpayer's federal income tax return under
subsection | ||||||
3 | (k) of Section 168 of the Internal Revenue Code. This | ||||||
4 | subparagraph (R) is exempt from the provisions of | ||||||
5 | Section 250;
| ||||||
6 | (S) If the taxpayer sells, transfers, abandons, or | ||||||
7 | otherwise disposes of
property for which the taxpayer | ||||||
8 | was required in any taxable year to make an
addition | ||||||
9 | modification under subparagraph (G-10), then an amount | ||||||
10 | equal to that
addition modification.
| ||||||
11 | If the taxpayer continues to own property through | ||||||
12 | the last day of the last tax year for which the | ||||||
13 | taxpayer may claim a depreciation deduction for | ||||||
14 | federal income tax purposes and for which the taxpayer | ||||||
15 | was required in any taxable year to make an addition | ||||||
16 | modification under subparagraph (G-10), then an amount | ||||||
17 | equal to that addition modification.
| ||||||
18 | The taxpayer is allowed to take the deduction under | ||||||
19 | this subparagraph
only once with respect to any one | ||||||
20 | piece of property. | ||||||
21 | This subparagraph (S) is exempt from the | ||||||
22 | provisions of Section 250;
| ||||||
23 | (T) The amount of (i) any interest income (net of | ||||||
24 | the deductions allocable thereto) taken into account | ||||||
25 | for the taxable year with respect to a transaction with | ||||||
26 | a taxpayer that is required to make an addition |
| |||||||
| |||||||
1 | modification with respect to such transaction under | ||||||
2 | Section 203(a)(2)(D-17), 203(b)(2)(E-12), | ||||||
3 | 203(c)(2)(G-12), or 203(d)(2)(D-7), but not to exceed | ||||||
4 | the amount of such addition modification and
(ii) any | ||||||
5 | income from intangible property (net of the deductions | ||||||
6 | allocable thereto) taken into account for the taxable | ||||||
7 | year with respect to a transaction with a taxpayer that | ||||||
8 | is required to make an addition modification with | ||||||
9 | respect to such transaction under Section | ||||||
10 | 203(a)(2)(D-18), 203(b)(2)(E-13), 203(c)(2)(G-13), or | ||||||
11 | 203(d)(2)(D-8), but not to exceed the amount of such | ||||||
12 | addition modification;
| ||||||
13 | (U) An amount equal to the interest income taken | ||||||
14 | into account for the taxable year (net of the | ||||||
15 | deductions allocable thereto) with respect to | ||||||
16 | transactions with a foreign person who would be a | ||||||
17 | member of the taxpayer's unitary business group but for | ||||||
18 | the fact the foreign person's business activity | ||||||
19 | outside the United States is 80% or more of that | ||||||
20 | person's total business activity, but not to exceed the | ||||||
21 | addition modification required to be made for the same | ||||||
22 | taxable year under Section 203(c)(2)(G-12) for | ||||||
23 | interest paid, accrued, or incurred, directly or | ||||||
24 | indirectly, to the same foreign person; and
| ||||||
25 | (V) An amount equal to the income from intangible | ||||||
26 | property taken into account for the taxable year (net |
| |||||||
| |||||||
1 | of the deductions allocable thereto) with respect to | ||||||
2 | transactions with a foreign person who would be a | ||||||
3 | member of the taxpayer's unitary business group but for | ||||||
4 | the fact that the foreign person's business activity | ||||||
5 | outside the United States is 80% or more of that | ||||||
6 | person's total business activity, but not to exceed the | ||||||
7 | addition modification required to be made for the same | ||||||
8 | taxable year under Section 203(c)(2)(G-13) for | ||||||
9 | intangible expenses and costs paid, accrued, or | ||||||
10 | incurred, directly or indirectly, to the same foreign | ||||||
11 | person.
| ||||||
12 | (3) Limitation. The amount of any modification | ||||||
13 | otherwise required
under this subsection shall, under | ||||||
14 | regulations prescribed by the
Department, be adjusted by | ||||||
15 | any amounts included therein which were
properly paid, | ||||||
16 | credited, or required to be distributed, or permanently set
| ||||||
17 | aside for charitable purposes pursuant to Internal Revenue | ||||||
18 | Code Section
642(c) during the taxable year.
| ||||||
19 | (d) Partnerships.
| ||||||
20 | (1) In general. In the case of a partnership, base | ||||||
21 | income means an
amount equal to the taxpayer's taxable | ||||||
22 | income for the taxable year as
modified by paragraph (2).
| ||||||
23 | (2) Modifications. The taxable income referred to in | ||||||
24 | paragraph (1)
shall be modified by adding thereto the sum | ||||||
25 | of the following amounts:
|
| |||||||
| |||||||
1 | (A) An amount equal to all amounts paid or accrued | ||||||
2 | to the taxpayer as
interest or dividends during the | ||||||
3 | taxable year to the extent excluded from
gross income | ||||||
4 | in the computation of taxable income;
| ||||||
5 | (B) An amount equal to the amount of tax imposed by | ||||||
6 | this Act to the
extent deducted from gross income for | ||||||
7 | the taxable year;
| ||||||
8 | (C) The amount of deductions allowed to the | ||||||
9 | partnership pursuant to
Section 707 (c) of the Internal | ||||||
10 | Revenue Code in calculating its taxable income;
| ||||||
11 | (D) An amount equal to the amount of the capital | ||||||
12 | gain deduction
allowable under the Internal Revenue | ||||||
13 | Code, to the extent deducted from
gross income in the | ||||||
14 | computation of taxable income;
| ||||||
15 | (D-5) For taxable years 2001 and thereafter, an | ||||||
16 | amount equal to the
bonus depreciation deduction taken | ||||||
17 | on the taxpayer's federal income tax return for the | ||||||
18 | taxable
year under subsection (k) of Section 168 of the | ||||||
19 | Internal Revenue Code;
| ||||||
20 | (D-6) If the taxpayer sells, transfers, abandons, | ||||||
21 | or otherwise disposes of
property for which the | ||||||
22 | taxpayer was required in any taxable year to make an
| ||||||
23 | addition modification under subparagraph (D-5), then | ||||||
24 | an amount equal to the
aggregate amount of the | ||||||
25 | deductions taken in all taxable years
under | ||||||
26 | subparagraph (O) with respect to that property.
|
| |||||||
| |||||||
1 | If the taxpayer continues to own property through | ||||||
2 | the last day of the last tax year for which the | ||||||
3 | taxpayer may claim a depreciation deduction for | ||||||
4 | federal income tax purposes and for which the taxpayer | ||||||
5 | was allowed in any taxable year to make a subtraction | ||||||
6 | modification under subparagraph (O), then an amount | ||||||
7 | equal to that subtraction modification.
| ||||||
8 | The taxpayer is required to make the addition | ||||||
9 | modification under this
subparagraph
only once with | ||||||
10 | respect to any one piece of property;
| ||||||
11 | (D-7) For taxable years ending on or after December | ||||||
12 | 31, 2004, an amount equal to the amount otherwise | ||||||
13 | allowed as a deduction in computing base income for | ||||||
14 | interest paid, accrued, or incurred, directly or | ||||||
15 | indirectly, to a foreign person who would be a member | ||||||
16 | of the same unitary business group but for the fact the | ||||||
17 | foreign person's business activity outside the United | ||||||
18 | States is 80% or more of the foreign person's total | ||||||
19 | business activity. The addition modification required | ||||||
20 | by this subparagraph shall be reduced to the extent | ||||||
21 | that dividends were included in base income of the | ||||||
22 | unitary group for the same taxable year and received by | ||||||
23 | the taxpayer or by a member of the taxpayer's unitary | ||||||
24 | business group (including amounts included in gross | ||||||
25 | income pursuant to Sections 951 through 964 of the | ||||||
26 | Internal Revenue Code and amounts included in gross |
| |||||||
| |||||||
1 | income under Section 78 of the Internal Revenue Code) | ||||||
2 | with respect to the stock of the same person to whom | ||||||
3 | the interest was paid, accrued, or incurred.
| ||||||
4 | This paragraph shall not apply to the following:
| ||||||
5 | (i) an item of interest paid, accrued, or | ||||||
6 | incurred, directly or indirectly, to a foreign | ||||||
7 | person who is subject in a foreign country or | ||||||
8 | state, other than a state which requires mandatory | ||||||
9 | unitary reporting, to a tax on or measured by net | ||||||
10 | income with respect to such interest; or | ||||||
11 | (ii) an item of interest paid, accrued, or | ||||||
12 | incurred, directly or indirectly, to a foreign | ||||||
13 | person if the taxpayer can establish, based on a | ||||||
14 | preponderance of the evidence, both of the | ||||||
15 | following: | ||||||
16 | (a) the foreign person, during the same | ||||||
17 | taxable year, paid, accrued, or incurred, the | ||||||
18 | interest to a person that is not a related | ||||||
19 | member, and | ||||||
20 | (b) the transaction giving rise to the | ||||||
21 | interest expense between the taxpayer and the | ||||||
22 | foreign person did not have as a principal | ||||||
23 | purpose the avoidance of Illinois income tax, | ||||||
24 | and is paid pursuant to a contract or agreement | ||||||
25 | that reflects an arm's-length interest rate | ||||||
26 | and terms; or
|
| |||||||
| |||||||
1 | (iii) the taxpayer can establish, based on | ||||||
2 | clear and convincing evidence, that the interest | ||||||
3 | paid, accrued, or incurred relates to a contract or | ||||||
4 | agreement entered into at arm's-length rates and | ||||||
5 | terms and the principal purpose for the payment is | ||||||
6 | not federal or Illinois tax avoidance; or
| ||||||
7 | (iv) an item of interest paid, accrued, or | ||||||
8 | incurred, directly or indirectly, to a foreign | ||||||
9 | person if the taxpayer establishes by clear and | ||||||
10 | convincing evidence that the adjustments are | ||||||
11 | unreasonable; or if the taxpayer and the Director | ||||||
12 | agree in writing to the application or use of an | ||||||
13 | alternative method of apportionment under Section | ||||||
14 | 304(f).
| ||||||
15 | Nothing in this subsection shall preclude the | ||||||
16 | Director from making any other adjustment | ||||||
17 | otherwise allowed under Section 404 of this Act for | ||||||
18 | any tax year beginning after the effective date of | ||||||
19 | this amendment provided such adjustment is made | ||||||
20 | pursuant to regulation adopted by the Department | ||||||
21 | and such regulations provide methods and standards | ||||||
22 | by which the Department will utilize its authority | ||||||
23 | under Section 404 of this Act; and
| ||||||
24 | (D-8) For taxable years ending on or after December | ||||||
25 | 31, 2004, an amount equal to the amount of intangible | ||||||
26 | expenses and costs otherwise allowed as a deduction in |
| |||||||
| |||||||
1 | computing base income, and that were paid, accrued, or | ||||||
2 | incurred, directly or indirectly, to a foreign person | ||||||
3 | who would be a member of the same unitary business | ||||||
4 | group but for the fact that the foreign person's | ||||||
5 | business activity outside the United States is 80% or | ||||||
6 | more of that person's total business activity. The | ||||||
7 | addition modification required by this subparagraph | ||||||
8 | shall be reduced to the extent that dividends were | ||||||
9 | included in base income of the unitary group for the | ||||||
10 | same taxable year and received by the taxpayer or by a | ||||||
11 | member of the taxpayer's unitary business group | ||||||
12 | (including amounts included in gross income pursuant | ||||||
13 | to Sections 951 through 964 of the Internal Revenue | ||||||
14 | Code and amounts included in gross income under Section | ||||||
15 | 78 of the Internal Revenue Code) with respect to the | ||||||
16 | stock of the same person to whom the intangible | ||||||
17 | expenses and costs were directly or indirectly paid, | ||||||
18 | incurred or accrued. The preceding sentence shall not | ||||||
19 | apply to the extent that the same dividends caused a | ||||||
20 | reduction to the addition modification required under | ||||||
21 | Section 203(d)(2)(D-7) of this Act. As used in this | ||||||
22 | subparagraph, the term "intangible expenses and costs" | ||||||
23 | includes (1) expenses, losses, and costs for, or | ||||||
24 | related to, the direct or indirect acquisition, use, | ||||||
25 | maintenance or management, ownership, sale, exchange, | ||||||
26 | or any other disposition of intangible property; (2) |
| |||||||
| |||||||
1 | losses incurred, directly or indirectly, from | ||||||
2 | factoring transactions or discounting transactions; | ||||||
3 | (3) royalty, patent, technical, and copyright fees; | ||||||
4 | (4) licensing fees; and (5) other similar expenses and | ||||||
5 | costs. For purposes of this subparagraph, "intangible | ||||||
6 | property" includes patents, patent applications, trade | ||||||
7 | names, trademarks, service marks, copyrights, mask | ||||||
8 | works, trade secrets, and similar types of intangible | ||||||
9 | assets; | ||||||
10 | This paragraph shall not apply to the following: | ||||||
11 | (i) any item of intangible expenses or costs | ||||||
12 | paid, accrued, or incurred, directly or | ||||||
13 | indirectly, from a transaction with a foreign | ||||||
14 | person who is subject in a foreign country or | ||||||
15 | state, other than a state which requires mandatory | ||||||
16 | unitary reporting, to a tax on or measured by net | ||||||
17 | income with respect to such item; or | ||||||
18 | (ii) any item of intangible expense or cost | ||||||
19 | paid, accrued, or incurred, directly or | ||||||
20 | indirectly, if the taxpayer can establish, based | ||||||
21 | on a preponderance of the evidence, both of the | ||||||
22 | following: | ||||||
23 | (a) the foreign person during the same | ||||||
24 | taxable year paid, accrued, or incurred, the | ||||||
25 | intangible expense or cost to a person that is | ||||||
26 | not a related member, and |
| |||||||
| |||||||
1 | (b) the transaction giving rise to the | ||||||
2 | intangible expense or cost between the | ||||||
3 | taxpayer and the foreign person did not have as | ||||||
4 | a principal purpose the avoidance of Illinois | ||||||
5 | income tax, and is paid pursuant to a contract | ||||||
6 | or agreement that reflects arm's-length terms; | ||||||
7 | or | ||||||
8 | (iii) any item of intangible expense or cost | ||||||
9 | paid, accrued, or incurred, directly or | ||||||
10 | indirectly, from a transaction with a foreign | ||||||
11 | person if the taxpayer establishes by clear and | ||||||
12 | convincing evidence, that the adjustments are | ||||||
13 | unreasonable; or if the taxpayer and the Director | ||||||
14 | agree in writing to the application or use of an | ||||||
15 | alternative method of apportionment under Section | ||||||
16 | 304(f);
| ||||||
17 | Nothing in this subsection shall preclude the | ||||||
18 | Director from making any other adjustment | ||||||
19 | otherwise allowed under Section 404 of this Act for | ||||||
20 | any tax year beginning after the effective date of | ||||||
21 | this amendment provided such adjustment is made | ||||||
22 | pursuant to regulation adopted by the Department | ||||||
23 | and such regulations provide methods and standards | ||||||
24 | by which the Department will utilize its authority | ||||||
25 | under Section 404 of this Act;
| ||||||
26 | and by deducting from the total so obtained the following |
| |||||||
| |||||||
1 | amounts:
| ||||||
2 | (E) The valuation limitation amount;
| ||||||
3 | (F) An amount equal to the amount of any tax | ||||||
4 | imposed by this Act which
was refunded to the taxpayer | ||||||
5 | and included in such total for the taxable year;
| ||||||
6 | (G) An amount equal to all amounts included in | ||||||
7 | taxable income as
modified by subparagraphs (A), (B), | ||||||
8 | (C) and (D) which are exempt from
taxation by this | ||||||
9 | State either by reason of its statutes or Constitution | ||||||
10 | or
by reason of
the Constitution, treaties or statutes | ||||||
11 | of the United States;
provided that, in the case of any | ||||||
12 | statute of this State that exempts income
derived from | ||||||
13 | bonds or other obligations from the tax imposed under | ||||||
14 | this Act,
the amount exempted shall be the interest net | ||||||
15 | of bond premium amortization;
| ||||||
16 | (H) Any income of the partnership which | ||||||
17 | constitutes personal service
income as defined in | ||||||
18 | Section 1348 (b) (1) of the Internal Revenue Code (as
| ||||||
19 | in effect December 31, 1981) or a reasonable allowance | ||||||
20 | for compensation
paid or accrued for services rendered | ||||||
21 | by partners to the partnership,
whichever is greater;
| ||||||
22 | (I) An amount equal to all amounts of income | ||||||
23 | distributable to an entity
subject to the Personal | ||||||
24 | Property Tax Replacement Income Tax imposed by
| ||||||
25 | subsections (c) and (d) of Section 201 of this Act | ||||||
26 | including amounts
distributable to organizations |
| |||||||
| |||||||
1 | exempt from federal income tax by reason of
Section | ||||||
2 | 501(a) of the Internal Revenue Code;
| ||||||
3 | (J) With the exception of any amounts subtracted | ||||||
4 | under subparagraph
(G),
an amount equal to the sum of | ||||||
5 | all amounts disallowed as deductions
by (i) Sections | ||||||
6 | 171(a) (2), and 265(2) of the Internal Revenue Code of | ||||||
7 | 1954,
as now or hereafter amended, and all amounts of | ||||||
8 | expenses allocable to
interest and disallowed as | ||||||
9 | deductions by Section 265(1) of the Internal
Revenue | ||||||
10 | Code, as now or hereafter amended;
and (ii) for taxable | ||||||
11 | years
ending on or after August 13, 1999, Sections
| ||||||
12 | 171(a)(2), 265,
280C, and 832(b)(5)(B)(i) of the | ||||||
13 | Internal Revenue Code; the provisions of this
| ||||||
14 | subparagraph are exempt from the provisions of Section | ||||||
15 | 250;
| ||||||
16 | (K) An amount equal to those dividends included in | ||||||
17 | such total which were
paid by a corporation which | ||||||
18 | conducts business operations in an Enterprise
Zone or | ||||||
19 | zones created under the Illinois Enterprise Zone Act, | ||||||
20 | enacted by
the 82nd General Assembly, or a River Edge | ||||||
21 | Redevelopment Zone or zones created under the River | ||||||
22 | Edge Redevelopment Zone Act and
conducts substantially | ||||||
23 | all of its operations
in an Enterprise Zone or Zones or | ||||||
24 | from a River Edge Redevelopment Zone or zones. This | ||||||
25 | subparagraph (K) is exempt from the provisions of | ||||||
26 | Section 250;
|
| |||||||
| |||||||
1 | (L) An amount equal to any contribution made to a | ||||||
2 | job training project
established pursuant to the Real | ||||||
3 | Property Tax Increment Allocation
Redevelopment Act;
| ||||||
4 | (M) An amount equal to those dividends included in | ||||||
5 | such total
that were paid by a corporation that | ||||||
6 | conducts business operations in a
federally designated | ||||||
7 | Foreign Trade Zone or Sub-Zone and that is designated a
| ||||||
8 | High Impact Business located in Illinois; provided | ||||||
9 | that dividends eligible
for the deduction provided in | ||||||
10 | subparagraph (K) of paragraph (2) of this
subsection | ||||||
11 | shall not be eligible for the deduction provided under | ||||||
12 | this
subparagraph (M);
| ||||||
13 | (N) An amount equal to the amount of the deduction | ||||||
14 | used to compute the
federal income tax credit for | ||||||
15 | restoration of substantial amounts held under
claim of | ||||||
16 | right for the taxable year pursuant to Section 1341 of | ||||||
17 | the
Internal Revenue Code of 1986;
| ||||||
18 | (O) For taxable years 2001 and thereafter, for the | ||||||
19 | taxable year in
which the bonus depreciation deduction
| ||||||
20 | is taken on the taxpayer's federal income tax return | ||||||
21 | under
subsection (k) of Section 168 of the Internal | ||||||
22 | Revenue Code and for each
applicable taxable year | ||||||
23 | thereafter, an amount equal to "x", where:
| ||||||
24 | (1) "y" equals the amount of the depreciation | ||||||
25 | deduction taken for the
taxable year
on the | ||||||
26 | taxpayer's federal income tax return on property |
| |||||||
| |||||||
1 | for which the bonus
depreciation deduction
was | ||||||
2 | taken in any year under subsection (k) of Section | ||||||
3 | 168 of the Internal
Revenue Code, but not including | ||||||
4 | the bonus depreciation deduction;
| ||||||
5 | (2) for taxable years ending on or before | ||||||
6 | December 31, 2005, "x" equals "y" multiplied by 30 | ||||||
7 | and then divided by 70 (or "y"
multiplied by | ||||||
8 | 0.429); and | ||||||
9 | (3) for taxable years ending after December | ||||||
10 | 31, 2005: | ||||||
11 | (i) for property on which a bonus | ||||||
12 | depreciation deduction of 30% of the adjusted | ||||||
13 | basis was taken, "x" equals "y" multiplied by | ||||||
14 | 30 and then divided by 70 (or "y"
multiplied by | ||||||
15 | 0.429); and | ||||||
16 | (ii) for property on which a bonus | ||||||
17 | depreciation deduction of 50% of the adjusted | ||||||
18 | basis was taken, "x" equals "y" multiplied by | ||||||
19 | 1.0.
| ||||||
20 | The aggregate amount deducted under this | ||||||
21 | subparagraph in all taxable
years for any one piece of | ||||||
22 | property may not exceed the amount of the bonus
| ||||||
23 | depreciation deduction
taken on that property on the | ||||||
24 | taxpayer's federal income tax return under
subsection | ||||||
25 | (k) of Section 168 of the Internal Revenue Code. This | ||||||
26 | subparagraph (O) is exempt from the provisions of |
| |||||||
| |||||||
1 | Section 250;
| ||||||
2 | (P) If the taxpayer sells, transfers, abandons, or | ||||||
3 | otherwise disposes of
property for which the taxpayer | ||||||
4 | was required in any taxable year to make an
addition | ||||||
5 | modification under subparagraph (D-5), then an amount | ||||||
6 | equal to that
addition modification.
| ||||||
7 | If the taxpayer continues to own property through | ||||||
8 | the last day of the last tax year for which the | ||||||
9 | taxpayer may claim a depreciation deduction for | ||||||
10 | federal income tax purposes and for which the taxpayer | ||||||
11 | was required in any taxable year to make an addition | ||||||
12 | modification under subparagraph (D-5), then an amount | ||||||
13 | equal to that addition modification.
| ||||||
14 | The taxpayer is allowed to take the deduction under | ||||||
15 | this subparagraph
only once with respect to any one | ||||||
16 | piece of property. | ||||||
17 | This subparagraph (P) is exempt from the | ||||||
18 | provisions of Section 250;
| ||||||
19 | (Q) The amount of (i) any interest income (net of | ||||||
20 | the deductions allocable thereto) taken into account | ||||||
21 | for the taxable year with respect to a transaction with | ||||||
22 | a taxpayer that is required to make an addition | ||||||
23 | modification with respect to such transaction under | ||||||
24 | Section 203(a)(2)(D-17), 203(b)(2)(E-12), | ||||||
25 | 203(c)(2)(G-12), or 203(d)(2)(D-7), but not to exceed | ||||||
26 | the amount of such addition modification and
(ii) any |
| |||||||
| |||||||
1 | income from intangible property (net of the deductions | ||||||
2 | allocable thereto) taken into account for the taxable | ||||||
3 | year with respect to a transaction with a taxpayer that | ||||||
4 | is required to make an addition modification with | ||||||
5 | respect to such transaction under Section | ||||||
6 | 203(a)(2)(D-18), 203(b)(2)(E-13), 203(c)(2)(G-13), or | ||||||
7 | 203(d)(2)(D-8), but not to exceed the amount of such | ||||||
8 | addition modification;
| ||||||
9 | (R) An amount equal to the interest income taken | ||||||
10 | into account for the taxable year (net of the | ||||||
11 | deductions allocable thereto) with respect to | ||||||
12 | transactions with a foreign person who would be a | ||||||
13 | member of the taxpayer's unitary business group but for | ||||||
14 | the fact that the foreign person's business activity | ||||||
15 | outside the United States is 80% or more of that | ||||||
16 | person's total business activity, but not to exceed the | ||||||
17 | addition modification required to be made for the same | ||||||
18 | taxable year under Section 203(d)(2)(D-7) for interest | ||||||
19 | paid, accrued, or incurred, directly or indirectly, to | ||||||
20 | the same foreign person; and
| ||||||
21 | (S) An amount equal to the income from intangible | ||||||
22 | property taken into account for the taxable year (net | ||||||
23 | of the deductions allocable thereto) with respect to | ||||||
24 | transactions with a foreign person who would be a | ||||||
25 | member of the taxpayer's unitary business group but for | ||||||
26 | the fact that the foreign person's business activity |
| |||||||
| |||||||
1 | outside the United States is 80% or more of that | ||||||
2 | person's total business activity, but not to exceed the | ||||||
3 | addition modification required to be made for the same | ||||||
4 | taxable year under Section 203(d)(2)(D-8) for | ||||||
5 | intangible expenses and costs paid, accrued, or | ||||||
6 | incurred, directly or indirectly, to the same foreign | ||||||
7 | person.
| ||||||
8 | (e) Gross income; adjusted gross income; taxable income.
| ||||||
9 | (1) In general. Subject to the provisions of paragraph | ||||||
10 | (2) and
subsection (b) (3), for purposes of this Section | ||||||
11 | and Section 803(e), a
taxpayer's gross income, adjusted | ||||||
12 | gross income, or taxable income for
the taxable year shall | ||||||
13 | mean the amount of gross income, adjusted gross
income or | ||||||
14 | taxable income properly reportable for federal income tax
| ||||||
15 | purposes for the taxable year under the provisions of the | ||||||
16 | Internal
Revenue Code. Taxable income may be less than | ||||||
17 | zero. However, for taxable
years ending on or after | ||||||
18 | December 31, 1986, net operating loss
carryforwards from | ||||||
19 | taxable years ending prior to December 31, 1986, may not
| ||||||
20 | exceed the sum of federal taxable income for the taxable | ||||||
21 | year before net
operating loss deduction, plus the excess | ||||||
22 | of addition modifications over
subtraction modifications | ||||||
23 | for the taxable year. For taxable years ending
prior to | ||||||
24 | December 31, 1986, taxable income may never be an amount in | ||||||
25 | excess
of the net operating loss for the taxable year as |
| |||||||
| |||||||
1 | defined in subsections
(c) and (d) of Section 172 of the | ||||||
2 | Internal Revenue Code, provided that when
taxable income of | ||||||
3 | a corporation (other than a Subchapter S corporation),
| ||||||
4 | trust, or estate is less than zero and addition | ||||||
5 | modifications, other than
those provided by subparagraph | ||||||
6 | (E) of paragraph (2) of subsection (b) for
corporations or | ||||||
7 | subparagraph (E) of paragraph (2) of subsection (c) for
| ||||||
8 | trusts and estates, exceed subtraction modifications, an | ||||||
9 | addition
modification must be made under those | ||||||
10 | subparagraphs for any other taxable
year to which the | ||||||
11 | taxable income less than zero (net operating loss) is
| ||||||
12 | applied under Section 172 of the Internal Revenue Code or | ||||||
13 | under
subparagraph (E) of paragraph (2) of this subsection | ||||||
14 | (e) applied in
conjunction with Section 172 of the Internal | ||||||
15 | Revenue Code.
| ||||||
16 | (2) Special rule. For purposes of paragraph (1) of this | ||||||
17 | subsection,
the taxable income properly reportable for | ||||||
18 | federal income tax purposes
shall mean:
| ||||||
19 | (A) Certain life insurance companies. In the case | ||||||
20 | of a life
insurance company subject to the tax imposed | ||||||
21 | by Section 801 of the
Internal Revenue Code, life | ||||||
22 | insurance company taxable income, plus the
amount of | ||||||
23 | distribution from pre-1984 policyholder surplus | ||||||
24 | accounts as
calculated under Section 815a of the | ||||||
25 | Internal Revenue Code;
| ||||||
26 | (B) Certain other insurance companies. In the case |
| |||||||
| |||||||
1 | of mutual
insurance companies subject to the tax | ||||||
2 | imposed by Section 831 of the
Internal Revenue Code, | ||||||
3 | insurance company taxable income;
| ||||||
4 | (C) Regulated investment companies. In the case of | ||||||
5 | a regulated
investment company subject to the tax | ||||||
6 | imposed by Section 852 of the
Internal Revenue Code, | ||||||
7 | investment company taxable income;
| ||||||
8 | (D) Real estate investment trusts. In the case of a | ||||||
9 | real estate
investment trust subject to the tax imposed | ||||||
10 | by Section 857 of the
Internal Revenue Code, real | ||||||
11 | estate investment trust taxable income;
| ||||||
12 | (E) Consolidated corporations. In the case of a | ||||||
13 | corporation which
is a member of an affiliated group of | ||||||
14 | corporations filing a consolidated
income tax return | ||||||
15 | for the taxable year for federal income tax purposes,
| ||||||
16 | taxable income determined as if such corporation had | ||||||
17 | filed a separate
return for federal income tax purposes | ||||||
18 | for the taxable year and each
preceding taxable year | ||||||
19 | for which it was a member of an affiliated group.
For | ||||||
20 | purposes of this subparagraph, the taxpayer's separate | ||||||
21 | taxable
income shall be determined as if the election | ||||||
22 | provided by Section
243(b) (2) of the Internal Revenue | ||||||
23 | Code had been in effect for all such years;
| ||||||
24 | (F) Cooperatives. In the case of a cooperative | ||||||
25 | corporation or
association, the taxable income of such | ||||||
26 | organization determined in
accordance with the |
| |||||||
| |||||||
1 | provisions of Section 1381 through 1388 of the
Internal | ||||||
2 | Revenue Code;
| ||||||
3 | (G) Subchapter S corporations. In the case of: (i) | ||||||
4 | a Subchapter S
corporation for which there is in effect | ||||||
5 | an election for the taxable year
under Section 1362 of | ||||||
6 | the Internal Revenue Code, the taxable income of such
| ||||||
7 | corporation determined in accordance with Section | ||||||
8 | 1363(b) of the Internal
Revenue Code, except that | ||||||
9 | taxable income shall take into
account those items | ||||||
10 | which are required by Section 1363(b)(1) of the
| ||||||
11 | Internal Revenue Code to be separately stated; and (ii) | ||||||
12 | a Subchapter
S corporation for which there is in effect | ||||||
13 | a federal election to opt out of
the provisions of the | ||||||
14 | Subchapter S Revision Act of 1982 and have applied
| ||||||
15 | instead the prior federal Subchapter S rules as in | ||||||
16 | effect on July 1, 1982,
the taxable income of such | ||||||
17 | corporation determined in accordance with the
federal | ||||||
18 | Subchapter S rules as in effect on July 1, 1982; and
| ||||||
19 | (H) Partnerships. In the case of a partnership, | ||||||
20 | taxable income
determined in accordance with Section | ||||||
21 | 703 of the Internal Revenue Code,
except that taxable | ||||||
22 | income shall take into account those items which are
| ||||||
23 | required by Section 703(a)(1) to be separately stated | ||||||
24 | but which would be
taken into account by an individual | ||||||
25 | in calculating his taxable income.
| ||||||
26 | (3) Recapture of business expenses on disposition of |
| |||||||
| |||||||
1 | asset or business. Notwithstanding any other law to the | ||||||
2 | contrary, if in prior years income from an asset or | ||||||
3 | business has been classified as business income and in a | ||||||
4 | later year is demonstrated to be non-business income, then | ||||||
5 | all expenses, without limitation, deducted in such later | ||||||
6 | year and in the 2 immediately preceding taxable years | ||||||
7 | related to that asset or business that generated the | ||||||
8 | non-business income shall be added back and recaptured as | ||||||
9 | business income in the year of the disposition of the asset | ||||||
10 | or business. Such amount shall be apportioned to Illinois | ||||||
11 | using the greater of the apportionment fraction computed | ||||||
12 | for the business under Section 304 of this Act for the | ||||||
13 | taxable year or the average of the apportionment fractions | ||||||
14 | computed for the business under Section 304 of this Act for | ||||||
15 | the taxable year and for the 2 immediately preceding | ||||||
16 | taxable years.
| ||||||
17 | (f) Valuation limitation amount.
| ||||||
18 | (1) In general. The valuation limitation amount | ||||||
19 | referred to in
subsections (a) (2) (G), (c) (2) (I) and | ||||||
20 | (d)(2) (E) is an amount equal to:
| ||||||
21 | (A) The sum of the pre-August 1, 1969 appreciation | ||||||
22 | amounts (to the
extent consisting of gain reportable | ||||||
23 | under the provisions of Section
1245 or 1250 of the | ||||||
24 | Internal Revenue Code) for all property in respect
of | ||||||
25 | which such gain was reported for the taxable year; plus
| ||||||
26 | (B) The lesser of (i) the sum of the pre-August 1, |
| |||||||
| |||||||
1 | 1969 appreciation
amounts (to the extent consisting of | ||||||
2 | capital gain) for all property in
respect of which such | ||||||
3 | gain was reported for federal income tax purposes
for | ||||||
4 | the taxable year, or (ii) the net capital gain for the | ||||||
5 | taxable year,
reduced in either case by any amount of | ||||||
6 | such gain included in the amount
determined under | ||||||
7 | subsection (a) (2) (F) or (c) (2) (H).
| ||||||
8 | (2) Pre-August 1, 1969 appreciation amount.
| ||||||
9 | (A) If the fair market value of property referred | ||||||
10 | to in paragraph
(1) was readily ascertainable on August | ||||||
11 | 1, 1969, the pre-August 1, 1969
appreciation amount for | ||||||
12 | such property is the lesser of (i) the excess of
such | ||||||
13 | fair market value over the taxpayer's basis (for | ||||||
14 | determining gain)
for such property on that date | ||||||
15 | (determined under the Internal Revenue
Code as in | ||||||
16 | effect on that date), or (ii) the total gain realized | ||||||
17 | and
reportable for federal income tax purposes in | ||||||
18 | respect of the sale,
exchange or other disposition of | ||||||
19 | such property.
| ||||||
20 | (B) If the fair market value of property referred | ||||||
21 | to in paragraph
(1) was not readily ascertainable on | ||||||
22 | August 1, 1969, the pre-August 1,
1969 appreciation | ||||||
23 | amount for such property is that amount which bears
the | ||||||
24 | same ratio to the total gain reported in respect of the | ||||||
25 | property for
federal income tax purposes for the | ||||||
26 | taxable year, as the number of full
calendar months in |
| |||||||
| |||||||
1 | that part of the taxpayer's holding period for the
| ||||||
2 | property ending July 31, 1969 bears to the number of | ||||||
3 | full calendar
months in the taxpayer's entire holding | ||||||
4 | period for the
property.
| ||||||
5 | (C) The Department shall prescribe such | ||||||
6 | regulations as may be
necessary to carry out the | ||||||
7 | purposes of this paragraph.
| ||||||
8 | (g) Double deductions. Unless specifically provided | ||||||
9 | otherwise, nothing
in this Section shall permit the same item | ||||||
10 | to be deducted more than once.
| ||||||
11 | (h) Legislative intention. Except as expressly provided by | ||||||
12 | this
Section there shall be no modifications or limitations on | ||||||
13 | the amounts
of income, gain, loss or deduction taken into | ||||||
14 | account in determining
gross income, adjusted gross income or | ||||||
15 | taxable income for federal income
tax purposes for the taxable | ||||||
16 | year, or in the amount of such items
entering into the | ||||||
17 | computation of base income and net income under this
Act for | ||||||
18 | such taxable year, whether in respect of property values as of
| ||||||
19 | August 1, 1969 or otherwise.
| ||||||
20 | (Source: P.A. 93-812, eff. 7-26-04; 93-840, eff. 7-30-04; | ||||||
21 | 94-776, eff. 5-19-06; 94-789, eff. 5-19-06; 94-1021, eff. | ||||||
22 | 7-12-06; 94-1074, eff. 12-26-06; revised 1-2-07.)
| ||||||
23 | Section 905. The Use Tax Act is amended by changing Section |
| |||||||
| |||||||
1 | 3-5 as follows:
| ||||||
2 | (35 ILCS 105/3-5) (from Ch. 120, par. 439.3-5)
| ||||||
3 | Sec. 3-5. Exemptions. Use of the following tangible | ||||||
4 | personal property
is exempt from the tax imposed by this Act:
| ||||||
5 | (1) Personal property purchased from a corporation, | ||||||
6 | society, association,
foundation, institution, or | ||||||
7 | organization, other than a limited liability
company, that is | ||||||
8 | organized and operated as a not-for-profit service enterprise
| ||||||
9 | for the benefit of persons 65 years of age or older if the | ||||||
10 | personal property
was not purchased by the enterprise for the | ||||||
11 | purpose of resale by the
enterprise.
| ||||||
12 | (2) Personal property purchased by a not-for-profit | ||||||
13 | Illinois county
fair association for use in conducting, | ||||||
14 | operating, or promoting the
county fair.
| ||||||
15 | (3) Personal property purchased by a not-for-profit
arts or | ||||||
16 | cultural organization that establishes, by proof required by | ||||||
17 | the
Department by
rule, that it has received an exemption under | ||||||
18 | Section 501(c)(3) of the Internal
Revenue Code and that is | ||||||
19 | organized and operated primarily for the
presentation
or | ||||||
20 | support of arts or cultural programming, activities, or | ||||||
21 | services. These
organizations include, but are not limited to, | ||||||
22 | music and dramatic arts
organizations such as symphony | ||||||
23 | orchestras and theatrical groups, arts and
cultural service | ||||||
24 | organizations, local arts councils, visual arts organizations,
| ||||||
25 | and media arts organizations.
On and after the effective date |
| |||||||
| |||||||
1 | of this amendatory Act of the 92nd General
Assembly, however, | ||||||
2 | an entity otherwise eligible for this exemption shall not
make | ||||||
3 | tax-free purchases unless it has an active identification | ||||||
4 | number issued by
the Department.
| ||||||
5 | (4) Personal property purchased by a governmental body, by | ||||||
6 | a
corporation, society, association, foundation, or | ||||||
7 | institution organized and
operated exclusively for charitable, | ||||||
8 | religious, or educational purposes, or
by a not-for-profit | ||||||
9 | corporation, society, association, foundation,
institution, or | ||||||
10 | organization that has no compensated officers or employees
and | ||||||
11 | that is organized and operated primarily for the recreation of | ||||||
12 | persons
55 years of age or older. A limited liability company | ||||||
13 | may qualify for the
exemption under this paragraph only if the | ||||||
14 | limited liability company is
organized and operated | ||||||
15 | exclusively for educational purposes. On and after July
1, | ||||||
16 | 1987, however, no entity otherwise eligible for this exemption | ||||||
17 | shall make
tax-free purchases unless it has an active exemption | ||||||
18 | identification number
issued by the Department.
| ||||||
19 | (5) Until July 1, 2003, a passenger car that is a | ||||||
20 | replacement vehicle to
the extent that the
purchase price of | ||||||
21 | the car is subject to the Replacement Vehicle Tax.
| ||||||
22 | (6) Until July 1, 2003 and beginning again on September 1, | ||||||
23 | 2004, graphic arts machinery and equipment, including
repair | ||||||
24 | and replacement
parts, both new and used, and including that | ||||||
25 | manufactured on special order,
certified by the purchaser to be | ||||||
26 | used primarily for graphic arts production,
and including |
| |||||||
| |||||||
1 | machinery and equipment purchased for lease.
Equipment | ||||||
2 | includes chemicals or chemicals acting as catalysts but only if
| ||||||
3 | the
chemicals or chemicals acting as catalysts effect a direct | ||||||
4 | and immediate change
upon a graphic arts product.
| ||||||
5 | (7) Farm chemicals.
| ||||||
6 | (8) Legal tender, currency, medallions, or gold or silver | ||||||
7 | coinage issued by
the State of Illinois, the government of the | ||||||
8 | United States of America, or the
government of any foreign | ||||||
9 | country, and bullion.
| ||||||
10 | (9) Personal property purchased from a teacher-sponsored | ||||||
11 | student
organization affiliated with an elementary or | ||||||
12 | secondary school located in
Illinois.
| ||||||
13 | (10) A motor vehicle of the first division, a motor vehicle | ||||||
14 | of the
second division that is a self-contained motor vehicle | ||||||
15 | designed or
permanently converted to provide living quarters | ||||||
16 | for recreational, camping,
or travel use, with direct walk | ||||||
17 | through to the living quarters from the
driver's seat, or a | ||||||
18 | motor vehicle of the second division that is of the
van | ||||||
19 | configuration designed for the transportation of not less than | ||||||
20 | 7 nor
more than 16 passengers, as defined in Section 1-146 of | ||||||
21 | the Illinois
Vehicle Code, that is used for automobile renting, | ||||||
22 | as defined in the
Automobile Renting Occupation and Use Tax | ||||||
23 | Act.
| ||||||
24 | (11) Farm machinery and equipment, both new and used,
| ||||||
25 | including that manufactured on special order, certified by the | ||||||
26 | purchaser
to be used primarily for production agriculture or |
| |||||||
| |||||||
1 | State or federal
agricultural programs, including individual | ||||||
2 | replacement parts for
the machinery and equipment, including | ||||||
3 | machinery and equipment
purchased
for lease,
and including | ||||||
4 | implements of husbandry defined in Section 1-130 of
the | ||||||
5 | Illinois Vehicle Code, farm machinery and agricultural | ||||||
6 | chemical and
fertilizer spreaders, and nurse wagons required to | ||||||
7 | be registered
under Section 3-809 of the Illinois Vehicle Code,
| ||||||
8 | but excluding other motor
vehicles required to be
registered | ||||||
9 | under the Illinois Vehicle Code.
Horticultural polyhouses or | ||||||
10 | hoop houses used for propagating, growing, or
overwintering | ||||||
11 | plants shall be considered farm machinery and equipment under
| ||||||
12 | this item (11).
Agricultural chemical tender tanks and dry | ||||||
13 | boxes shall include units sold
separately from a motor vehicle | ||||||
14 | required to be licensed and units sold mounted
on a motor | ||||||
15 | vehicle required to be licensed if the selling price of the | ||||||
16 | tender
is separately stated.
| ||||||
17 | Farm machinery and equipment shall include precision | ||||||
18 | farming equipment
that is
installed or purchased to be | ||||||
19 | installed on farm machinery and equipment
including, but not | ||||||
20 | limited to, tractors, harvesters, sprayers, planters,
seeders, | ||||||
21 | or spreaders.
Precision farming equipment includes, but is not | ||||||
22 | limited to, soil testing
sensors, computers, monitors, | ||||||
23 | software, global positioning
and mapping systems, and other | ||||||
24 | such equipment.
| ||||||
25 | Farm machinery and equipment also includes computers, | ||||||
26 | sensors, software, and
related equipment used primarily in the
|
| |||||||
| |||||||
1 | computer-assisted operation of production agriculture | ||||||
2 | facilities, equipment,
and
activities such as, but not limited | ||||||
3 | to,
the collection, monitoring, and correlation of
animal and | ||||||
4 | crop data for the purpose of
formulating animal diets and | ||||||
5 | agricultural chemicals. This item (11) is exempt
from the | ||||||
6 | provisions of
Section 3-90.
| ||||||
7 | (12) Fuel and petroleum products sold to or used by an air | ||||||
8 | common
carrier, certified by the carrier to be used for | ||||||
9 | consumption, shipment, or
storage in the conduct of its | ||||||
10 | business as an air common carrier, for a
flight destined for or | ||||||
11 | returning from a location or locations
outside the United | ||||||
12 | States without regard to previous or subsequent domestic
| ||||||
13 | stopovers.
| ||||||
14 | (13) Proceeds of mandatory service charges separately
| ||||||
15 | stated on customers' bills for the purchase and consumption of | ||||||
16 | food and
beverages purchased at retail from a retailer, to the | ||||||
17 | extent that the proceeds
of the service charge are in fact | ||||||
18 | turned over as tips or as a substitute
for tips to the | ||||||
19 | employees who participate directly in preparing, serving,
| ||||||
20 | hosting or cleaning up the food or beverage function with | ||||||
21 | respect to which
the service charge is imposed.
| ||||||
22 | (14) Until July 1, 2003, oil field exploration, drilling, | ||||||
23 | and production
equipment,
including (i) rigs and parts of rigs, | ||||||
24 | rotary
rigs, cable tool rigs, and workover rigs, (ii) pipe and | ||||||
25 | tubular goods,
including casing and drill strings, (iii) pumps | ||||||
26 | and pump-jack units, (iv)
storage tanks and flow lines, (v) any |
| |||||||
| |||||||
1 | individual replacement part for oil
field exploration, | ||||||
2 | drilling, and production equipment, and (vi) machinery and
| ||||||
3 | equipment purchased
for lease; but excluding motor vehicles | ||||||
4 | required to be registered under the
Illinois Vehicle Code.
| ||||||
5 | (15) Photoprocessing machinery and equipment, including | ||||||
6 | repair and
replacement parts, both new and used, including that
| ||||||
7 | manufactured on special order, certified by the purchaser to be | ||||||
8 | used
primarily for photoprocessing, and including
| ||||||
9 | photoprocessing machinery and equipment purchased for lease.
| ||||||
10 | (16) Until July 1, 2003, coal exploration, mining, | ||||||
11 | offhighway hauling,
processing, maintenance, and reclamation | ||||||
12 | equipment,
including replacement parts and equipment, and
| ||||||
13 | including equipment purchased for lease, but excluding motor
| ||||||
14 | vehicles required to be registered under the Illinois Vehicle | ||||||
15 | Code.
| ||||||
16 | (17) Until July 1, 2003, distillation machinery and | ||||||
17 | equipment, sold as a
unit or kit,
assembled or installed by the | ||||||
18 | retailer, certified by the user to be used
only for the | ||||||
19 | production of ethyl alcohol that will be used for consumption
| ||||||
20 | as motor fuel or as a component of motor fuel for the personal | ||||||
21 | use of the
user, and not subject to sale or resale.
| ||||||
22 | (18) Manufacturing and assembling machinery and equipment | ||||||
23 | used
primarily in the process of manufacturing or assembling | ||||||
24 | tangible
personal property for wholesale or retail sale or | ||||||
25 | lease, whether that sale
or lease is made directly by the | ||||||
26 | manufacturer or by some other person,
whether the materials |
| |||||||
| |||||||
1 | used in the process are
owned by the manufacturer or some other | ||||||
2 | person, or whether that sale or
lease is made apart from or as | ||||||
3 | an incident to the seller's engaging in
the service occupation | ||||||
4 | of producing machines, tools, dies, jigs,
patterns, gauges, or | ||||||
5 | other similar items of no commercial value on
special order for | ||||||
6 | a particular purchaser.
| ||||||
7 | (19) Personal property delivered to a purchaser or | ||||||
8 | purchaser's donee
inside Illinois when the purchase order for | ||||||
9 | that personal property was
received by a florist located | ||||||
10 | outside Illinois who has a florist located
inside Illinois | ||||||
11 | deliver the personal property.
| ||||||
12 | (20) Semen used for artificial insemination of livestock | ||||||
13 | for direct
agricultural production.
| ||||||
14 | (21) Horses, or interests in horses, registered with and | ||||||
15 | meeting the
requirements of any of the
Arabian Horse Club | ||||||
16 | Registry of America, Appaloosa Horse Club, American Quarter
| ||||||
17 | Horse Association, United States
Trotting Association, or | ||||||
18 | Jockey Club, as appropriate, used for
purposes of breeding or | ||||||
19 | racing for prizes.
| ||||||
20 | (22) Computers and communications equipment utilized for | ||||||
21 | any
hospital
purpose
and equipment used in the diagnosis,
| ||||||
22 | analysis, or treatment of hospital patients purchased by a | ||||||
23 | lessor who leases
the
equipment, under a lease of one year or | ||||||
24 | longer executed or in effect at the
time the lessor would | ||||||
25 | otherwise be subject to the tax imposed by this Act, to a
| ||||||
26 | hospital
that has been issued an active tax exemption |
| |||||||
| |||||||
1 | identification number by
the
Department under Section 1g of the | ||||||
2 | Retailers' Occupation Tax Act. If the
equipment is leased in a | ||||||
3 | manner that does not qualify for
this exemption or is used in | ||||||
4 | any other non-exempt manner, the lessor
shall be liable for the
| ||||||
5 | tax imposed under this Act or the Service Use Tax Act, as the | ||||||
6 | case may
be, based on the fair market value of the property at | ||||||
7 | the time the
non-qualifying use occurs. No lessor shall collect | ||||||
8 | or attempt to collect an
amount (however
designated) that | ||||||
9 | purports to reimburse that lessor for the tax imposed by this
| ||||||
10 | Act or the Service Use Tax Act, as the case may be, if the tax | ||||||
11 | has not been
paid by the lessor. If a lessor improperly | ||||||
12 | collects any such amount from the
lessee, the lessee shall have | ||||||
13 | a legal right to claim a refund of that amount
from the lessor. | ||||||
14 | If, however, that amount is not refunded to the lessee for
any | ||||||
15 | reason, the lessor is liable to pay that amount to the | ||||||
16 | Department.
| ||||||
17 | (23) Personal property purchased by a lessor who leases the
| ||||||
18 | property, under
a
lease of
one year or longer executed or in | ||||||
19 | effect at the time
the lessor would otherwise be subject to the | ||||||
20 | tax imposed by this Act,
to a governmental body
that has been | ||||||
21 | issued an active sales tax exemption identification number by | ||||||
22 | the
Department under Section 1g of the Retailers' Occupation | ||||||
23 | Tax Act.
If the
property is leased in a manner that does not | ||||||
24 | qualify for
this exemption
or used in any other non-exempt | ||||||
25 | manner, the lessor shall be liable for the
tax imposed under | ||||||
26 | this Act or the Service Use Tax Act, as the case may
be, based |
| |||||||
| |||||||
1 | on the fair market value of the property at the time the
| ||||||
2 | non-qualifying use occurs. No lessor shall collect or attempt | ||||||
3 | to collect an
amount (however
designated) that purports to | ||||||
4 | reimburse that lessor for the tax imposed by this
Act or the | ||||||
5 | Service Use Tax Act, as the case may be, if the tax has not been
| ||||||
6 | paid by the lessor. If a lessor improperly collects any such | ||||||
7 | amount from the
lessee, the lessee shall have a legal right to | ||||||
8 | claim a refund of that amount
from the lessor. If, however, | ||||||
9 | that amount is not refunded to the lessee for
any reason, the | ||||||
10 | lessor is liable to pay that amount to the Department.
| ||||||
11 | (24) Beginning with taxable years ending on or after | ||||||
12 | December
31, 1995
and
ending with taxable years ending on or | ||||||
13 | before December 31, 2004,
personal property that is
donated for | ||||||
14 | disaster relief to be used in a State or federally declared
| ||||||
15 | disaster area in Illinois or bordering Illinois by a | ||||||
16 | manufacturer or retailer
that is registered in this State to a | ||||||
17 | corporation, society, association,
foundation, or institution | ||||||
18 | that has been issued a sales tax exemption
identification | ||||||
19 | number by the Department that assists victims of the disaster
| ||||||
20 | who reside within the declared disaster area.
| ||||||
21 | (25) Beginning with taxable years ending on or after | ||||||
22 | December
31, 1995 and
ending with taxable years ending on or | ||||||
23 | before December 31, 2004, personal
property that is used in the | ||||||
24 | performance of infrastructure repairs in this
State, including | ||||||
25 | but not limited to municipal roads and streets, access roads,
| ||||||
26 | bridges, sidewalks, waste disposal systems, water and sewer |
| |||||||
| |||||||
1 | line extensions,
water distribution and purification | ||||||
2 | facilities, storm water drainage and
retention facilities, and | ||||||
3 | sewage treatment facilities, resulting from a State
or | ||||||
4 | federally declared disaster in Illinois or bordering Illinois | ||||||
5 | when such
repairs are initiated on facilities located in the | ||||||
6 | declared disaster area
within 6 months after the disaster.
| ||||||
7 | (26) Beginning July 1, 1999, game or game birds purchased | ||||||
8 | at a "game
breeding
and hunting preserve area" or an "exotic | ||||||
9 | game hunting area" as those terms are
used in
the Wildlife Code | ||||||
10 | or at a hunting enclosure approved through rules adopted by
the
| ||||||
11 | Department of Natural Resources. This paragraph is exempt from | ||||||
12 | the provisions
of
Section 3-90.
| ||||||
13 | (27) A motor vehicle, as that term is defined in Section | ||||||
14 | 1-146
of the
Illinois
Vehicle Code, that is donated to a | ||||||
15 | corporation, limited liability company,
society, association, | ||||||
16 | foundation, or institution that is determined by the
Department | ||||||
17 | to be organized and operated exclusively for educational | ||||||
18 | purposes.
For purposes of this exemption, "a corporation, | ||||||
19 | limited liability company,
society, association, foundation, | ||||||
20 | or institution organized and operated
exclusively for | ||||||
21 | educational purposes" means all tax-supported public schools,
| ||||||
22 | private schools that offer systematic instruction in useful | ||||||
23 | branches of
learning by methods common to public schools and | ||||||
24 | that compare favorably in
their scope and intensity with the | ||||||
25 | course of study presented in tax-supported
schools, and | ||||||
26 | vocational or technical schools or institutes organized and
|
| |||||||
| |||||||
1 | operated exclusively to provide a course of study of not less | ||||||
2 | than 6 weeks
duration and designed to prepare individuals to | ||||||
3 | follow a trade or to pursue a
manual, technical, mechanical, | ||||||
4 | industrial, business, or commercial
occupation.
| ||||||
5 | (28) Beginning January 1, 2000, personal property, | ||||||
6 | including
food,
purchased through fundraising
events for the | ||||||
7 | benefit of
a public or private elementary or
secondary school, | ||||||
8 | a group of those schools, or one or more school
districts if | ||||||
9 | the events are
sponsored by an entity recognized by the school | ||||||
10 | district that consists
primarily of volunteers and includes
| ||||||
11 | parents and teachers of the school children. This paragraph | ||||||
12 | does not apply
to fundraising
events (i) for the benefit of | ||||||
13 | private home instruction or (ii)
for which the fundraising | ||||||
14 | entity purchases the personal property sold at
the events from | ||||||
15 | another individual or entity that sold the property for the
| ||||||
16 | purpose of resale by the fundraising entity and that
profits | ||||||
17 | from the sale to the
fundraising entity. This paragraph is | ||||||
18 | exempt
from the provisions
of Section 3-90.
| ||||||
19 | (29) Beginning January 1, 2000 and through December 31, | ||||||
20 | 2001, new or
used automatic vending
machines that prepare and | ||||||
21 | serve hot food and beverages, including coffee, soup,
and
other | ||||||
22 | items, and replacement parts for these machines.
Beginning | ||||||
23 | January 1,
2002 and through June 30, 2003, machines and parts | ||||||
24 | for machines used in
commercial, coin-operated amusement and | ||||||
25 | vending business if a use or occupation
tax is paid on the | ||||||
26 | gross receipts derived from the use of the commercial,
|
| |||||||
| |||||||
1 | coin-operated amusement and vending machines.
This
paragraph
| ||||||
2 | is exempt from the provisions of Section 3-90.
| ||||||
3 | (30) Beginning January 1, 2001 and through June 30, 2011, | ||||||
4 | food for human consumption that is to be consumed off the | ||||||
5 | premises
where it is sold (other than alcoholic beverages, soft | ||||||
6 | drinks, and food that
has been prepared for immediate | ||||||
7 | consumption) and prescription and
nonprescription medicines, | ||||||
8 | drugs, medical appliances, and insulin, urine
testing | ||||||
9 | materials, syringes, and needles used by diabetics, for human | ||||||
10 | use, when
purchased for use by a person receiving medical | ||||||
11 | assistance under Article 5 of
the Illinois Public Aid Code who | ||||||
12 | resides in a licensed long-term care facility,
as defined in | ||||||
13 | the Nursing Home Care Act.
| ||||||
14 | (31) Beginning on
the effective date of this amendatory Act | ||||||
15 | of the 92nd General Assembly,
computers and communications | ||||||
16 | equipment
utilized for any hospital purpose and equipment used | ||||||
17 | in the diagnosis,
analysis, or treatment of hospital patients | ||||||
18 | purchased by a lessor who leases
the equipment, under a lease | ||||||
19 | of one year or longer executed or in effect at the
time the | ||||||
20 | lessor would otherwise be subject to the tax imposed by this | ||||||
21 | Act, to a
hospital that has been issued an active tax exemption | ||||||
22 | identification number by
the Department under Section 1g of the | ||||||
23 | Retailers' Occupation Tax Act. If the
equipment is leased in a | ||||||
24 | manner that does not qualify for this exemption or is
used in | ||||||
25 | any other nonexempt manner, the lessor shall be liable for the | ||||||
26 | tax
imposed under this Act or the Service Use Tax Act, as the |
| |||||||
| |||||||
1 | case may be, based on
the fair market value of the property at | ||||||
2 | the time the nonqualifying use
occurs. No lessor shall collect | ||||||
3 | or attempt to collect an amount (however
designated) that | ||||||
4 | purports to reimburse that lessor for the tax imposed by this
| ||||||
5 | Act or the Service Use Tax Act, as the case may be, if the tax | ||||||
6 | has not been
paid by the lessor. If a lessor improperly | ||||||
7 | collects any such amount from the
lessee, the lessee shall have | ||||||
8 | a legal right to claim a refund of that amount
from the lessor. | ||||||
9 | If, however, that amount is not refunded to the lessee for
any | ||||||
10 | reason, the lessor is liable to pay that amount to the | ||||||
11 | Department.
This paragraph is exempt from the provisions of | ||||||
12 | Section 3-90.
| ||||||
13 | (32) Beginning on
the effective date of this amendatory Act | ||||||
14 | of the 92nd General Assembly,
personal property purchased by a | ||||||
15 | lessor who leases the property,
under a lease of one year or | ||||||
16 | longer executed or in effect at the time the
lessor would | ||||||
17 | otherwise be subject to the tax imposed by this Act, to a
| ||||||
18 | governmental body that has been issued an active sales tax | ||||||
19 | exemption
identification number by the Department under | ||||||
20 | Section 1g of the Retailers'
Occupation Tax Act. If the | ||||||
21 | property is leased in a manner that does not
qualify for this | ||||||
22 | exemption or used in any other nonexempt manner, the lessor
| ||||||
23 | shall be liable for the tax imposed under this Act or the | ||||||
24 | Service Use Tax Act,
as the case may be, based on the fair | ||||||
25 | market value of the property at the time
the nonqualifying use | ||||||
26 | occurs. No lessor shall collect or attempt to collect
an amount |
| |||||||
| |||||||
1 | (however designated) that purports to reimburse that lessor for | ||||||
2 | the
tax imposed by this Act or the Service Use Tax Act, as the | ||||||
3 | case may be, if the
tax has not been paid by the lessor. If a | ||||||
4 | lessor improperly collects any such
amount from the lessee, the | ||||||
5 | lessee shall have a legal right to claim a refund
of that | ||||||
6 | amount from the lessor. If, however, that amount is not | ||||||
7 | refunded to
the lessee for any reason, the lessor is liable to | ||||||
8 | pay that amount to the
Department. This paragraph is exempt | ||||||
9 | from the provisions of Section 3-90.
| ||||||
10 | (33) On and after July 1, 2003 and through June 30, 2004, | ||||||
11 | the use in this State of motor vehicles of
the second division | ||||||
12 | with a gross vehicle weight in excess of 8,000 pounds and
that | ||||||
13 | are subject to the commercial distribution fee imposed under | ||||||
14 | Section
3-815.1 of the Illinois Vehicle Code. Beginning on July | ||||||
15 | 1, 2004 and through June 30, 2005, the use in this State of | ||||||
16 | motor vehicles of the second division: (i) with a gross vehicle | ||||||
17 | weight rating in excess of 8,000 pounds; (ii) that are subject | ||||||
18 | to the commercial distribution fee imposed under Section | ||||||
19 | 3-815.1 of the Illinois Vehicle Code; and (iii) that are | ||||||
20 | primarily used for commercial purposes. Through June 30, 2005, | ||||||
21 | this exemption applies to repair and
replacement parts added | ||||||
22 | after the initial purchase of such a motor vehicle if
that | ||||||
23 | motor
vehicle is used in a manner that would qualify for the | ||||||
24 | rolling stock exemption
otherwise provided for in this Act. For | ||||||
25 | purposes of this paragraph, the term "used for commercial | ||||||
26 | purposes" means the transportation of persons or property in |
| |||||||
| |||||||
1 | furtherance of any commercial or industrial enterprise, | ||||||
2 | whether for-hire or not.
| ||||||
3 | (34) Any work of art that is sold from a place of business | ||||||
4 | within an Illinois Arts District by a person who has been | ||||||
5 | granted an exemption under Section 15 of the Arts District Act.
| ||||||
6 | (Source: P.A. 93-23, eff. 6-20-03; 93-24, eff. 6-20-03; 93-840, | ||||||
7 | eff. 7-30-04; 93-1033, eff. 9-3-04; 94-1002, eff. 7-3-06.)
| ||||||
8 | Section 910. The Service Use Tax Act is amended by changing | ||||||
9 | Section 3-5 as follows:
| ||||||
10 | (35 ILCS 110/3-5) (from Ch. 120, par. 439.33-5)
| ||||||
11 | Sec. 3-5. Exemptions. Use of the following tangible | ||||||
12 | personal property
is exempt from the tax imposed by this Act:
| ||||||
13 | (1) Personal property purchased from a corporation, | ||||||
14 | society,
association, foundation, institution, or | ||||||
15 | organization, other than a limited
liability company, that is | ||||||
16 | organized and operated as a not-for-profit service
enterprise | ||||||
17 | for the benefit of persons 65 years of age or older if the | ||||||
18 | personal
property was not purchased by the enterprise for the | ||||||
19 | purpose of resale by the
enterprise.
| ||||||
20 | (2) Personal property purchased by a non-profit Illinois | ||||||
21 | county fair
association for use in conducting, operating, or | ||||||
22 | promoting the county fair.
| ||||||
23 | (3) Personal property purchased by a not-for-profit arts
or | ||||||
24 | cultural
organization that establishes, by proof required by |
| |||||||
| |||||||
1 | the Department by rule,
that it has received an exemption under | ||||||
2 | Section 501(c)(3) of the Internal
Revenue Code and that is | ||||||
3 | organized and operated primarily for the
presentation
or | ||||||
4 | support of arts or cultural programming, activities, or | ||||||
5 | services. These
organizations include, but are not limited to, | ||||||
6 | music and dramatic arts
organizations such as symphony | ||||||
7 | orchestras and theatrical groups, arts and
cultural service | ||||||
8 | organizations, local arts councils, visual arts organizations,
| ||||||
9 | and media arts organizations.
On and after the effective date | ||||||
10 | of this amendatory Act of the 92nd General
Assembly, however, | ||||||
11 | an entity otherwise eligible for this exemption shall not
make | ||||||
12 | tax-free purchases unless it has an active identification | ||||||
13 | number issued by
the Department.
| ||||||
14 | (4) Legal tender, currency, medallions, or gold or silver | ||||||
15 | coinage issued
by the State of Illinois, the government of the | ||||||
16 | United States of America,
or the government of any foreign | ||||||
17 | country, and bullion.
| ||||||
18 | (5) Until July 1, 2003 and beginning again on September 1, | ||||||
19 | 2004, graphic arts machinery and equipment, including
repair | ||||||
20 | and
replacement parts, both new and used, and including that | ||||||
21 | manufactured on
special order or purchased for lease, certified | ||||||
22 | by the purchaser to be used
primarily for graphic arts | ||||||
23 | production.
Equipment includes chemicals or
chemicals acting | ||||||
24 | as catalysts but only if
the chemicals or chemicals acting as | ||||||
25 | catalysts effect a direct and immediate
change upon a graphic | ||||||
26 | arts product.
|
| |||||||
| |||||||
1 | (6) Personal property purchased from a teacher-sponsored | ||||||
2 | student
organization affiliated with an elementary or | ||||||
3 | secondary school located
in Illinois.
| ||||||
4 | (7) Farm machinery and equipment, both new and used, | ||||||
5 | including that
manufactured on special order, certified by the | ||||||
6 | purchaser to be used
primarily for production agriculture or | ||||||
7 | State or federal agricultural
programs, including individual | ||||||
8 | replacement parts for the machinery and
equipment, including | ||||||
9 | machinery and equipment purchased for lease,
and including | ||||||
10 | implements of husbandry defined in Section 1-130 of
the | ||||||
11 | Illinois Vehicle Code, farm machinery and agricultural | ||||||
12 | chemical and
fertilizer spreaders, and nurse wagons required to | ||||||
13 | be registered
under Section 3-809 of the Illinois Vehicle Code,
| ||||||
14 | but
excluding other motor vehicles required to be registered | ||||||
15 | under the Illinois
Vehicle Code.
Horticultural polyhouses or | ||||||
16 | hoop houses used for propagating, growing, or
overwintering | ||||||
17 | plants shall be considered farm machinery and equipment under
| ||||||
18 | this item (7).
Agricultural chemical tender tanks and dry boxes | ||||||
19 | shall include units sold
separately from a motor vehicle | ||||||
20 | required to be licensed and units sold mounted
on a motor | ||||||
21 | vehicle required to be licensed if the selling price of the | ||||||
22 | tender
is separately stated.
| ||||||
23 | Farm machinery and equipment shall include precision | ||||||
24 | farming equipment
that is
installed or purchased to be | ||||||
25 | installed on farm machinery and equipment
including, but not | ||||||
26 | limited to, tractors, harvesters, sprayers, planters,
seeders, |
| |||||||
| |||||||
1 | or spreaders.
Precision farming equipment includes, but is not | ||||||
2 | limited to,
soil testing sensors, computers, monitors, | ||||||
3 | software, global positioning
and mapping systems, and other | ||||||
4 | such equipment.
| ||||||
5 | Farm machinery and equipment also includes computers, | ||||||
6 | sensors, software, and
related equipment used primarily in the
| ||||||
7 | computer-assisted operation of production agriculture | ||||||
8 | facilities, equipment,
and activities such as, but
not limited | ||||||
9 | to,
the collection, monitoring, and correlation of
animal and | ||||||
10 | crop data for the purpose of
formulating animal diets and | ||||||
11 | agricultural chemicals. This item (7) is exempt
from the | ||||||
12 | provisions of
Section 3-75.
| ||||||
13 | (8) Fuel and petroleum products sold to or used by an air | ||||||
14 | common
carrier, certified by the carrier to be used for | ||||||
15 | consumption, shipment, or
storage in the conduct of its | ||||||
16 | business as an air common carrier, for a
flight destined for or | ||||||
17 | returning from a location or locations
outside the United | ||||||
18 | States without regard to previous or subsequent domestic
| ||||||
19 | stopovers.
| ||||||
20 | (9) Proceeds of mandatory service charges separately | ||||||
21 | stated on
customers' bills for the purchase and consumption of | ||||||
22 | food and beverages
acquired as an incident to the purchase of a | ||||||
23 | service from a serviceman, to
the extent that the proceeds of | ||||||
24 | the service charge are in fact
turned over as tips or as a | ||||||
25 | substitute for tips to the employees who
participate directly | ||||||
26 | in preparing, serving, hosting or cleaning up the
food or |
| |||||||
| |||||||
1 | beverage function with respect to which the service charge is | ||||||
2 | imposed.
| ||||||
3 | (10) Until July 1, 2003, oil field exploration, drilling, | ||||||
4 | and production
equipment, including
(i) rigs and parts of rigs, | ||||||
5 | rotary rigs, cable tool
rigs, and workover rigs, (ii) pipe and | ||||||
6 | tubular goods, including casing and
drill strings, (iii) pumps | ||||||
7 | and pump-jack units, (iv) storage tanks and flow
lines, (v) any | ||||||
8 | individual replacement part for oil field exploration,
| ||||||
9 | drilling, and production equipment, and (vi) machinery and | ||||||
10 | equipment purchased
for lease; but
excluding motor vehicles | ||||||
11 | required to be registered under the Illinois
Vehicle Code.
| ||||||
12 | (11) Proceeds from the sale of photoprocessing machinery | ||||||
13 | and
equipment, including repair and replacement parts, both new | ||||||
14 | and
used, including that manufactured on special order, | ||||||
15 | certified by the
purchaser to be used primarily for | ||||||
16 | photoprocessing, and including
photoprocessing machinery and | ||||||
17 | equipment purchased for lease.
| ||||||
18 | (12) Until July 1, 2003, coal exploration, mining, | ||||||
19 | offhighway hauling,
processing,
maintenance, and reclamation | ||||||
20 | equipment, including
replacement parts and equipment, and | ||||||
21 | including
equipment purchased for lease, but excluding motor | ||||||
22 | vehicles required to be
registered under the Illinois Vehicle | ||||||
23 | Code.
| ||||||
24 | (13) Semen used for artificial insemination of livestock | ||||||
25 | for direct
agricultural production.
| ||||||
26 | (14) Horses, or interests in horses, registered with and |
| |||||||
| |||||||
1 | meeting the
requirements of any of the
Arabian Horse Club | ||||||
2 | Registry of America, Appaloosa Horse Club, American Quarter
| ||||||
3 | Horse Association, United States
Trotting Association, or | ||||||
4 | Jockey Club, as appropriate, used for
purposes of breeding or | ||||||
5 | racing for prizes.
| ||||||
6 | (15) Computers and communications equipment utilized for | ||||||
7 | any
hospital
purpose
and equipment used in the diagnosis,
| ||||||
8 | analysis, or treatment of hospital patients purchased by a | ||||||
9 | lessor who leases
the
equipment, under a lease of one year or | ||||||
10 | longer executed or in effect at the
time
the lessor would | ||||||
11 | otherwise be subject to the tax imposed by this Act,
to a
| ||||||
12 | hospital
that has been issued an active tax exemption | ||||||
13 | identification number by the
Department under Section 1g of the | ||||||
14 | Retailers' Occupation Tax Act.
If the
equipment is leased in a | ||||||
15 | manner that does not qualify for
this exemption
or is used in | ||||||
16 | any other non-exempt manner,
the lessor shall be liable for the
| ||||||
17 | tax imposed under this Act or the Use Tax Act, as the case may
| ||||||
18 | be, based on the fair market value of the property at the time | ||||||
19 | the
non-qualifying use occurs. No lessor shall collect or | ||||||
20 | attempt to collect an
amount (however
designated) that purports | ||||||
21 | to reimburse that lessor for the tax imposed by this
Act or the | ||||||
22 | Use Tax Act, as the case may be, if the tax has not been
paid by | ||||||
23 | the lessor. If a lessor improperly collects any such amount | ||||||
24 | from the
lessee, the lessee shall have a legal right to claim a | ||||||
25 | refund of that amount
from the lessor. If, however, that amount | ||||||
26 | is not refunded to the lessee for
any reason, the lessor is |
| |||||||
| |||||||
1 | liable to pay that amount to the Department.
| ||||||
2 | (16) Personal property purchased by a lessor who leases the
| ||||||
3 | property, under
a
lease of one year or longer executed or in | ||||||
4 | effect at the time
the lessor would otherwise be subject to the | ||||||
5 | tax imposed by this Act,
to a governmental body
that has been | ||||||
6 | issued an active tax exemption identification number by the
| ||||||
7 | Department under Section 1g of the Retailers' Occupation Tax | ||||||
8 | Act.
If the
property is leased in a manner that does not | ||||||
9 | qualify for
this exemption
or is used in any other non-exempt | ||||||
10 | manner,
the lessor shall be liable for the
tax imposed under | ||||||
11 | this Act or the Use Tax Act, as the case may
be, based on the | ||||||
12 | fair market value of the property at the time the
| ||||||
13 | non-qualifying use occurs. No lessor shall collect or attempt | ||||||
14 | to collect an
amount (however
designated) that purports to | ||||||
15 | reimburse that lessor for the tax imposed by this
Act or the | ||||||
16 | Use Tax Act, as the case may be, if the tax has not been
paid by | ||||||
17 | the lessor. If a lessor improperly collects any such amount | ||||||
18 | from the
lessee, the lessee shall have a legal right to claim a | ||||||
19 | refund of that amount
from the lessor. If, however, that amount | ||||||
20 | is not refunded to the lessee for
any reason, the lessor is | ||||||
21 | liable to pay that amount to the Department.
| ||||||
22 | (17) Beginning with taxable years ending on or after | ||||||
23 | December
31,
1995
and
ending with taxable years ending on or | ||||||
24 | before December 31, 2004,
personal property that is
donated for | ||||||
25 | disaster relief to be used in a State or federally declared
| ||||||
26 | disaster area in Illinois or bordering Illinois by a |
| |||||||
| |||||||
1 | manufacturer or retailer
that is registered in this State to a | ||||||
2 | corporation, society, association,
foundation, or institution | ||||||
3 | that has been issued a sales tax exemption
identification | ||||||
4 | number by the Department that assists victims of the disaster
| ||||||
5 | who reside within the declared disaster area.
| ||||||
6 | (18) Beginning with taxable years ending on or after | ||||||
7 | December
31, 1995 and
ending with taxable years ending on or | ||||||
8 | before December 31, 2004, personal
property that is used in the | ||||||
9 | performance of infrastructure repairs in this
State, including | ||||||
10 | but not limited to municipal roads and streets, access roads,
| ||||||
11 | bridges, sidewalks, waste disposal systems, water and sewer | ||||||
12 | line extensions,
water distribution and purification | ||||||
13 | facilities, storm water drainage and
retention facilities, and | ||||||
14 | sewage treatment facilities, resulting from a State
or | ||||||
15 | federally declared disaster in Illinois or bordering Illinois | ||||||
16 | when such
repairs are initiated on facilities located in the | ||||||
17 | declared disaster area
within 6 months after the disaster.
| ||||||
18 | (19) Beginning July 1, 1999, game or game birds purchased | ||||||
19 | at a "game
breeding
and hunting preserve area" or an "exotic | ||||||
20 | game hunting area" as those terms are
used in
the Wildlife Code | ||||||
21 | or at a hunting enclosure approved through rules adopted by
the
| ||||||
22 | Department of Natural Resources. This paragraph is exempt from | ||||||
23 | the provisions
of
Section 3-75.
| ||||||
24 | (20) A motor vehicle, as that term is defined in Section | ||||||
25 | 1-146
of the
Illinois Vehicle Code, that is donated to a | ||||||
26 | corporation, limited liability
company, society, association, |
| |||||||
| |||||||
1 | foundation, or institution that is determined by
the Department | ||||||
2 | to be organized and operated exclusively for educational
| ||||||
3 | purposes. For purposes of this exemption, "a corporation, | ||||||
4 | limited liability
company, society, association, foundation, | ||||||
5 | or institution organized and
operated
exclusively for | ||||||
6 | educational purposes" means all tax-supported public schools,
| ||||||
7 | private schools that offer systematic instruction in useful | ||||||
8 | branches of
learning by methods common to public schools and | ||||||
9 | that compare favorably in
their scope and intensity with the | ||||||
10 | course of study presented in tax-supported
schools, and | ||||||
11 | vocational or technical schools or institutes organized and
| ||||||
12 | operated exclusively to provide a course of study of not less | ||||||
13 | than 6 weeks
duration and designed to prepare individuals to | ||||||
14 | follow a trade or to pursue a
manual, technical, mechanical, | ||||||
15 | industrial, business, or commercial
occupation.
| ||||||
16 | (21) Beginning January 1, 2000, personal property, | ||||||
17 | including
food,
purchased through fundraising
events for the | ||||||
18 | benefit of
a public or private elementary or
secondary school, | ||||||
19 | a group of those schools, or one or more school
districts if | ||||||
20 | the events are
sponsored by an entity recognized by the school | ||||||
21 | district that consists
primarily of volunteers and includes
| ||||||
22 | parents and teachers of the school children. This paragraph | ||||||
23 | does not apply
to fundraising
events (i) for the benefit of | ||||||
24 | private home instruction or (ii)
for which the fundraising | ||||||
25 | entity purchases the personal property sold at
the events from | ||||||
26 | another individual or entity that sold the property for the
|
| |||||||
| |||||||
1 | purpose of resale by the fundraising entity and that
profits | ||||||
2 | from the sale to the
fundraising entity. This paragraph is | ||||||
3 | exempt
from the provisions
of Section 3-75.
| ||||||
4 | (22) Beginning January 1, 2000
and through December 31, | ||||||
5 | 2001, new or used automatic vending
machines that prepare and | ||||||
6 | serve hot food and beverages, including coffee, soup,
and
other | ||||||
7 | items, and replacement parts for these machines.
Beginning | ||||||
8 | January 1,
2002 and through June 30, 2003, machines and parts | ||||||
9 | for machines used in
commercial, coin-operated
amusement
and | ||||||
10 | vending business if a use or occupation tax is paid on the | ||||||
11 | gross receipts
derived from
the use of the commercial, | ||||||
12 | coin-operated amusement and vending machines.
This
paragraph
| ||||||
13 | is exempt from the provisions of Section 3-75.
| ||||||
14 | (23) Beginning August 23, 2001 and through June 30, 2011, | ||||||
15 | food for human consumption that is to be consumed off the
| ||||||
16 | premises
where it is sold (other than alcoholic beverages, soft | ||||||
17 | drinks, and food that
has been prepared for immediate | ||||||
18 | consumption) and prescription and
nonprescription medicines, | ||||||
19 | drugs, medical appliances, and insulin, urine
testing | ||||||
20 | materials, syringes, and needles used by diabetics, for human | ||||||
21 | use, when
purchased for use by a person receiving medical | ||||||
22 | assistance under Article 5 of
the Illinois Public Aid Code who | ||||||
23 | resides in a licensed long-term care facility,
as defined in | ||||||
24 | the Nursing Home Care Act.
| ||||||
25 | (24) Beginning on the effective date of this amendatory Act | ||||||
26 | of the 92nd
General Assembly, computers and communications |
| |||||||
| |||||||
1 | equipment
utilized for any hospital purpose and equipment used | ||||||
2 | in the diagnosis,
analysis, or treatment of hospital patients | ||||||
3 | purchased by a lessor who leases
the equipment, under a lease | ||||||
4 | of one year or longer executed or in effect at the
time the | ||||||
5 | lessor would otherwise be subject to the tax imposed by this | ||||||
6 | Act, to a
hospital that has been issued an active tax exemption | ||||||
7 | identification number by
the Department under Section 1g of the | ||||||
8 | Retailers' Occupation Tax Act. If the
equipment is leased in a | ||||||
9 | manner that does not qualify for this exemption or is
used in | ||||||
10 | any other nonexempt manner, the lessor shall be liable for the
| ||||||
11 | tax imposed under this Act or the Use Tax Act, as the case may | ||||||
12 | be, based on the
fair market value of the property at the time | ||||||
13 | the nonqualifying use occurs.
No lessor shall collect or | ||||||
14 | attempt to collect an amount (however
designated) that purports | ||||||
15 | to reimburse that lessor for the tax imposed by this
Act or the | ||||||
16 | Use Tax Act, as the case may be, if the tax has not been
paid by | ||||||
17 | the lessor. If a lessor improperly collects any such amount | ||||||
18 | from the
lessee, the lessee shall have a legal right to claim a | ||||||
19 | refund of that amount
from the lessor. If, however, that amount | ||||||
20 | is not refunded to the lessee for
any reason, the lessor is | ||||||
21 | liable to pay that amount to the Department.
This paragraph is | ||||||
22 | exempt from the provisions of Section 3-75.
| ||||||
23 | (25) Beginning
on the effective date of this amendatory Act | ||||||
24 | of the 92nd General Assembly,
personal property purchased by a | ||||||
25 | lessor
who leases the property, under a lease of one year or | ||||||
26 | longer executed or in
effect at the time the lessor would |
| |||||||
| |||||||
1 | otherwise be subject to the tax imposed by
this Act, to a | ||||||
2 | governmental body that has been issued an active tax exemption
| ||||||
3 | identification number by the Department under Section 1g of the | ||||||
4 | Retailers'
Occupation Tax Act. If the property is leased in a | ||||||
5 | manner that does not
qualify for this exemption or is used in | ||||||
6 | any other nonexempt manner, the
lessor shall be liable for the | ||||||
7 | tax imposed under this Act or the Use Tax Act,
as the case may | ||||||
8 | be, based on the fair market value of the property at the time
| ||||||
9 | the nonqualifying use occurs. No lessor shall collect or | ||||||
10 | attempt to collect
an amount (however designated) that purports | ||||||
11 | to reimburse that lessor for the
tax imposed by this Act or the | ||||||
12 | Use Tax Act, as the case may be, if the tax has
not been paid by | ||||||
13 | the lessor. If a lessor improperly collects any such amount
| ||||||
14 | from the lessee, the lessee shall have a legal right to claim a | ||||||
15 | refund of that
amount from the lessor. If, however, that amount | ||||||
16 | is not refunded to the lessee
for any reason, the lessor is | ||||||
17 | liable to pay that amount to the Department.
This paragraph is | ||||||
18 | exempt from the provisions of Section 3-75.
| ||||||
19 | (26) Any work of art that is sold from a place of business | ||||||
20 | within an Illinois Arts District by a person who has been | ||||||
21 | granted an exemption under Section 15 of the Arts District Act.
| ||||||
22 | (Source: P.A. 93-24, eff. 6-20-03; 93-840, eff. 7-30-04; | ||||||
23 | 94-1002, eff. 7-3-06.)
| ||||||
24 | Section 915. The Service Occupation Tax Act is amended by | ||||||
25 | changing Section 3-5 as follows:
|
| |||||||
| |||||||
1 | (35 ILCS 115/3-5) (from Ch. 120, par. 439.103-5)
| ||||||
2 | Sec. 3-5. Exemptions. The following tangible personal | ||||||
3 | property is
exempt from the tax imposed by this Act:
| ||||||
4 | (1) Personal property sold by a corporation, society, | ||||||
5 | association,
foundation, institution, or organization, other | ||||||
6 | than a limited liability
company, that is organized and | ||||||
7 | operated as a not-for-profit service enterprise
for the benefit | ||||||
8 | of persons 65 years of age or older if the personal property
| ||||||
9 | was not purchased by the enterprise for the purpose of resale | ||||||
10 | by the
enterprise.
| ||||||
11 | (2) Personal property purchased by a not-for-profit | ||||||
12 | Illinois county fair
association for use in conducting, | ||||||
13 | operating, or promoting the county fair.
| ||||||
14 | (3) Personal property purchased by any not-for-profit
arts | ||||||
15 | or cultural organization that establishes, by proof required by | ||||||
16 | the
Department by
rule, that it has received an exemption under | ||||||
17 | Section 501(c)(3) of the
Internal Revenue Code and that is | ||||||
18 | organized and operated primarily for the
presentation
or | ||||||
19 | support of arts or cultural programming, activities, or | ||||||
20 | services. These
organizations include, but are not limited to, | ||||||
21 | music and dramatic arts
organizations such as symphony | ||||||
22 | orchestras and theatrical groups, arts and
cultural service | ||||||
23 | organizations, local arts councils, visual arts organizations,
| ||||||
24 | and media arts organizations.
On and after the effective date | ||||||
25 | of this amendatory Act of the 92nd General
Assembly, however, |
| |||||||
| |||||||
1 | an entity otherwise eligible for this exemption shall not
make | ||||||
2 | tax-free purchases unless it has an active identification | ||||||
3 | number issued by
the Department.
| ||||||
4 | (4) Legal tender, currency, medallions, or gold or silver | ||||||
5 | coinage
issued by the State of Illinois, the government of the | ||||||
6 | United States of
America, or the government of any foreign | ||||||
7 | country, and bullion.
| ||||||
8 | (5) Until July 1, 2003 and beginning again on September 1, | ||||||
9 | 2004, graphic arts machinery and equipment, including
repair | ||||||
10 | and
replacement parts, both new and used, and including that | ||||||
11 | manufactured on
special order or purchased for lease, certified | ||||||
12 | by the purchaser to be used
primarily for graphic arts | ||||||
13 | production.
Equipment includes chemicals or chemicals acting | ||||||
14 | as catalysts but only if
the
chemicals or chemicals acting as | ||||||
15 | catalysts effect a direct and immediate change
upon a graphic | ||||||
16 | arts product.
| ||||||
17 | (6) Personal property sold by a teacher-sponsored student | ||||||
18 | organization
affiliated with an elementary or secondary school | ||||||
19 | located in Illinois.
| ||||||
20 | (7) Farm machinery and equipment, both new and used, | ||||||
21 | including that
manufactured on special order, certified by the | ||||||
22 | purchaser to be used
primarily for production agriculture or | ||||||
23 | State or federal agricultural
programs, including individual | ||||||
24 | replacement parts for the machinery and
equipment, including | ||||||
25 | machinery and equipment purchased for lease,
and including | ||||||
26 | implements of husbandry defined in Section 1-130 of
the |
| |||||||
| |||||||
1 | Illinois Vehicle Code, farm machinery and agricultural | ||||||
2 | chemical and
fertilizer spreaders, and nurse wagons required to | ||||||
3 | be registered
under Section 3-809 of the Illinois Vehicle Code,
| ||||||
4 | but
excluding other motor vehicles required to be registered | ||||||
5 | under the Illinois
Vehicle
Code.
Horticultural polyhouses or | ||||||
6 | hoop houses used for propagating, growing, or
overwintering | ||||||
7 | plants shall be considered farm machinery and equipment under
| ||||||
8 | this item (7).
Agricultural chemical tender tanks and dry boxes | ||||||
9 | shall include units sold
separately from a motor vehicle | ||||||
10 | required to be licensed and units sold mounted
on a motor | ||||||
11 | vehicle required to be licensed if the selling price of the | ||||||
12 | tender
is separately stated.
| ||||||
13 | Farm machinery and equipment shall include precision | ||||||
14 | farming equipment
that is
installed or purchased to be | ||||||
15 | installed on farm machinery and equipment
including, but not | ||||||
16 | limited to, tractors, harvesters, sprayers, planters,
seeders, | ||||||
17 | or spreaders.
Precision farming equipment includes, but is not | ||||||
18 | limited to,
soil testing sensors, computers, monitors, | ||||||
19 | software, global positioning
and mapping systems, and other | ||||||
20 | such equipment.
| ||||||
21 | Farm machinery and equipment also includes computers, | ||||||
22 | sensors, software, and
related equipment used primarily in the
| ||||||
23 | computer-assisted operation of production agriculture | ||||||
24 | facilities, equipment,
and activities such as, but
not limited | ||||||
25 | to,
the collection, monitoring, and correlation of
animal and | ||||||
26 | crop data for the purpose of
formulating animal diets and |
| |||||||
| |||||||
1 | agricultural chemicals. This item (7) is exempt
from the | ||||||
2 | provisions of
Section 3-55.
| ||||||
3 | (8) Fuel and petroleum products sold to or used by an air | ||||||
4 | common
carrier, certified by the carrier to be used for | ||||||
5 | consumption, shipment,
or storage in the conduct of its | ||||||
6 | business as an air common carrier, for
a flight destined for or | ||||||
7 | returning from a location or locations
outside the United | ||||||
8 | States without regard to previous or subsequent domestic
| ||||||
9 | stopovers.
| ||||||
10 | (9) Proceeds of mandatory service charges separately
| ||||||
11 | stated on customers' bills for the purchase and consumption of | ||||||
12 | food and
beverages, to the extent that the proceeds of the | ||||||
13 | service charge are in fact
turned over as tips or as a | ||||||
14 | substitute for tips to the employees who
participate directly | ||||||
15 | in preparing, serving, hosting or cleaning up the
food or | ||||||
16 | beverage function with respect to which the service charge is | ||||||
17 | imposed.
| ||||||
18 | (10) Until July 1, 2003, oil field exploration, drilling, | ||||||
19 | and production
equipment,
including (i) rigs and parts of rigs, | ||||||
20 | rotary rigs, cable tool
rigs, and workover rigs, (ii) pipe and | ||||||
21 | tubular goods, including casing and
drill strings, (iii) pumps | ||||||
22 | and pump-jack units, (iv) storage tanks and flow
lines, (v) any | ||||||
23 | individual replacement part for oil field exploration,
| ||||||
24 | drilling, and production equipment, and (vi) machinery and | ||||||
25 | equipment purchased
for lease; but
excluding motor vehicles | ||||||
26 | required to be registered under the Illinois
Vehicle Code.
|
| |||||||
| |||||||
1 | (11) Photoprocessing machinery and equipment, including | ||||||
2 | repair and
replacement parts, both new and used, including that | ||||||
3 | manufactured on
special order, certified by the purchaser to be | ||||||
4 | used primarily for
photoprocessing, and including | ||||||
5 | photoprocessing machinery and equipment
purchased for lease.
| ||||||
6 | (12) Until July 1, 2003, coal exploration, mining, | ||||||
7 | offhighway hauling,
processing,
maintenance, and reclamation | ||||||
8 | equipment, including
replacement parts and equipment, and | ||||||
9 | including
equipment
purchased for lease, but excluding motor | ||||||
10 | vehicles required to be registered
under the Illinois Vehicle | ||||||
11 | Code.
| ||||||
12 | (13) Beginning January 1, 1992 and through June 30, 2011, | ||||||
13 | food for human consumption that is to be consumed off the | ||||||
14 | premises
where it is sold (other than alcoholic beverages, soft | ||||||
15 | drinks and food that
has been prepared for immediate | ||||||
16 | consumption) and prescription and
non-prescription medicines, | ||||||
17 | drugs, medical appliances, and insulin, urine
testing | ||||||
18 | materials, syringes, and needles used by diabetics, for human | ||||||
19 | use,
when purchased for use by a person receiving medical | ||||||
20 | assistance under
Article 5 of the Illinois Public Aid Code who | ||||||
21 | resides in a licensed
long-term care facility, as defined in | ||||||
22 | the Nursing Home Care Act.
| ||||||
23 | (14) Semen used for artificial insemination of livestock | ||||||
24 | for direct
agricultural production.
| ||||||
25 | (15) Horses, or interests in horses, registered with and | ||||||
26 | meeting the
requirements of any of the
Arabian Horse Club |
| |||||||
| |||||||
1 | Registry of America, Appaloosa Horse Club, American Quarter
| ||||||
2 | Horse Association, United States
Trotting Association, or | ||||||
3 | Jockey Club, as appropriate, used for
purposes of breeding or | ||||||
4 | racing for prizes.
| ||||||
5 | (16) Computers and communications equipment utilized for | ||||||
6 | any
hospital
purpose
and equipment used in the diagnosis,
| ||||||
7 | analysis, or treatment of hospital patients sold to a lessor | ||||||
8 | who leases the
equipment, under a lease of one year or longer | ||||||
9 | executed or in effect at the
time of the purchase, to a
| ||||||
10 | hospital
that has been issued an active tax exemption | ||||||
11 | identification number by the
Department under Section 1g of the | ||||||
12 | Retailers' Occupation Tax Act.
| ||||||
13 | (17) Personal property sold to a lessor who leases the
| ||||||
14 | property, under a
lease of one year or longer executed or in | ||||||
15 | effect at the time of the purchase,
to a governmental body
that | ||||||
16 | has been issued an active tax exemption identification number | ||||||
17 | by the
Department under Section 1g of the Retailers' Occupation | ||||||
18 | Tax Act.
| ||||||
19 | (18) Beginning with taxable years ending on or after | ||||||
20 | December
31, 1995
and
ending with taxable years ending on or | ||||||
21 | before December 31, 2004,
personal property that is
donated for | ||||||
22 | disaster relief to be used in a State or federally declared
| ||||||
23 | disaster area in Illinois or bordering Illinois by a | ||||||
24 | manufacturer or retailer
that is registered in this State to a | ||||||
25 | corporation, society, association,
foundation, or institution | ||||||
26 | that has been issued a sales tax exemption
identification |
| |||||||
| |||||||
1 | number by the Department that assists victims of the disaster
| ||||||
2 | who reside within the declared disaster area.
| ||||||
3 | (19) Beginning with taxable years ending on or after | ||||||
4 | December
31, 1995 and
ending with taxable years ending on or | ||||||
5 | before December 31, 2004, personal
property that is used in the | ||||||
6 | performance of infrastructure repairs in this
State, including | ||||||
7 | but not limited to municipal roads and streets, access roads,
| ||||||
8 | bridges, sidewalks, waste disposal systems, water and sewer | ||||||
9 | line extensions,
water distribution and purification | ||||||
10 | facilities, storm water drainage and
retention facilities, and | ||||||
11 | sewage treatment facilities, resulting from a State
or | ||||||
12 | federally declared disaster in Illinois or bordering Illinois | ||||||
13 | when such
repairs are initiated on facilities located in the | ||||||
14 | declared disaster area
within 6 months after the disaster.
| ||||||
15 | (20) Beginning July 1, 1999, game or game birds sold at a | ||||||
16 | "game breeding
and
hunting preserve area" or an "exotic game | ||||||
17 | hunting area" as those terms are used
in the
Wildlife Code or | ||||||
18 | at a hunting enclosure approved through rules adopted by the
| ||||||
19 | Department of Natural Resources. This paragraph is exempt from | ||||||
20 | the provisions
of
Section 3-55.
| ||||||
21 | (21) A motor vehicle, as that term is defined in Section | ||||||
22 | 1-146
of the
Illinois Vehicle Code, that is donated to a | ||||||
23 | corporation, limited liability
company, society, association, | ||||||
24 | foundation, or institution that is determined by
the Department | ||||||
25 | to be organized and operated exclusively for educational
| ||||||
26 | purposes. For purposes of this exemption, "a corporation, |
| |||||||
| |||||||
1 | limited liability
company, society, association, foundation, | ||||||
2 | or institution organized and
operated
exclusively for | ||||||
3 | educational purposes" means all tax-supported public schools,
| ||||||
4 | private schools that offer systematic instruction in useful | ||||||
5 | branches of
learning by methods common to public schools and | ||||||
6 | that compare favorably in
their scope and intensity with the | ||||||
7 | course of study presented in tax-supported
schools, and | ||||||
8 | vocational or technical schools or institutes organized and
| ||||||
9 | operated exclusively to provide a course of study of not less | ||||||
10 | than 6 weeks
duration and designed to prepare individuals to | ||||||
11 | follow a trade or to pursue a
manual, technical, mechanical, | ||||||
12 | industrial, business, or commercial
occupation.
| ||||||
13 | (22) Beginning January 1, 2000, personal property, | ||||||
14 | including
food,
purchased through fundraising
events for the | ||||||
15 | benefit of
a public or private elementary or
secondary school, | ||||||
16 | a group of those schools, or one or more school
districts if | ||||||
17 | the events are
sponsored by an entity recognized by the school | ||||||
18 | district that consists
primarily of volunteers and includes
| ||||||
19 | parents and teachers of the school children. This paragraph | ||||||
20 | does not apply
to fundraising
events (i) for the benefit of | ||||||
21 | private home instruction or (ii)
for which the fundraising | ||||||
22 | entity purchases the personal property sold at
the events from | ||||||
23 | another individual or entity that sold the property for the
| ||||||
24 | purpose of resale by the fundraising entity and that
profits | ||||||
25 | from the sale to the
fundraising entity. This paragraph is | ||||||
26 | exempt
from the provisions
of Section 3-55.
|
| |||||||
| |||||||
1 | (23) Beginning January 1, 2000
and through December 31, | ||||||
2 | 2001, new or used automatic vending
machines that prepare and | ||||||
3 | serve hot food and beverages, including coffee, soup,
and
other | ||||||
4 | items, and replacement parts for these machines.
Beginning | ||||||
5 | January 1,
2002 and through June 30, 2003, machines and parts | ||||||
6 | for
machines used in commercial, coin-operated amusement
and | ||||||
7 | vending business if a use or occupation tax is paid on the | ||||||
8 | gross receipts
derived from
the use of the commercial, | ||||||
9 | coin-operated amusement and vending machines.
This paragraph | ||||||
10 | is exempt from the provisions of Section 3-55.
| ||||||
11 | (24) Beginning
on the effective date of this amendatory Act | ||||||
12 | of the 92nd General Assembly,
computers and communications | ||||||
13 | equipment
utilized for any hospital purpose and equipment used | ||||||
14 | in the diagnosis,
analysis, or treatment of hospital patients | ||||||
15 | sold to a lessor who leases the
equipment, under a lease of one | ||||||
16 | year or longer executed or in effect at the
time of the | ||||||
17 | purchase, to a hospital that has been issued an active tax
| ||||||
18 | exemption identification number by the Department under | ||||||
19 | Section 1g of the
Retailers' Occupation Tax Act. This paragraph | ||||||
20 | is exempt from the provisions of
Section 3-55.
| ||||||
21 | (25) Beginning
on the effective date of this amendatory Act | ||||||
22 | of the 92nd General Assembly,
personal property sold to a | ||||||
23 | lessor who
leases the property, under a lease of one year or | ||||||
24 | longer executed or in effect
at the time of the purchase, to a | ||||||
25 | governmental body that has been issued an
active tax exemption | ||||||
26 | identification number by the Department under Section 1g
of the |
| |||||||
| |||||||
1 | Retailers' Occupation Tax Act. This paragraph is exempt from | ||||||
2 | the
provisions of Section 3-55.
| ||||||
3 | (26) Beginning on January 1, 2002 and through June 30, | ||||||
4 | 2011, tangible personal property
purchased
from an Illinois | ||||||
5 | retailer by a taxpayer engaged in centralized purchasing
| ||||||
6 | activities in Illinois who will, upon receipt of the property | ||||||
7 | in Illinois,
temporarily store the property in Illinois (i) for | ||||||
8 | the purpose of subsequently
transporting it outside this State | ||||||
9 | for use or consumption thereafter solely
outside this State or | ||||||
10 | (ii) for the purpose of being processed, fabricated, or
| ||||||
11 | manufactured into, attached to, or incorporated into other | ||||||
12 | tangible personal
property to be transported outside this State | ||||||
13 | and thereafter used or consumed
solely outside this State. The | ||||||
14 | Director of Revenue shall, pursuant to rules
adopted in | ||||||
15 | accordance with the Illinois Administrative Procedure Act, | ||||||
16 | issue a
permit to any taxpayer in good standing with the | ||||||
17 | Department who is eligible for
the exemption under this | ||||||
18 | paragraph (26). The permit issued under
this paragraph (26) | ||||||
19 | shall authorize the holder, to the extent and
in the manner | ||||||
20 | specified in the rules adopted under this Act, to purchase
| ||||||
21 | tangible personal property from a retailer exempt from the | ||||||
22 | taxes imposed by
this Act. Taxpayers shall maintain all | ||||||
23 | necessary books and records to
substantiate the use and | ||||||
24 | consumption of all such tangible personal property
outside of | ||||||
25 | the State of Illinois.
| ||||||
26 | (27) Any work of art that is sold from a place of business |
| |||||||
| |||||||
1 | within an Illinois Arts District by a person who has been | ||||||
2 | granted an exemption under Section 15 of the Arts District Act.
| ||||||
3 | (Source: P.A. 93-24, eff. 6-20-03; 93-840, eff. 7-30-04; | ||||||
4 | 94-1002, eff. 7-3-06.)
| ||||||
5 | Section 920. The Retailers' Occupation Tax Act is amended | ||||||
6 | by changing Section 2-5 as follows:
| ||||||
7 | (35 ILCS 120/2-5) (from Ch. 120, par. 441-5)
| ||||||
8 | Sec. 2-5. Exemptions. Gross receipts from proceeds from the | ||||||
9 | sale of
the following tangible personal property are exempt | ||||||
10 | from the tax imposed
by this Act:
| ||||||
11 | (1) Farm chemicals.
| ||||||
12 | (2) Farm machinery and equipment, both new and used, | ||||||
13 | including that
manufactured on special order, certified by the | ||||||
14 | purchaser to be used
primarily for production agriculture or | ||||||
15 | State or federal agricultural
programs, including individual | ||||||
16 | replacement parts for the machinery and
equipment, including | ||||||
17 | machinery and equipment purchased for lease,
and including | ||||||
18 | implements of husbandry defined in Section 1-130 of
the | ||||||
19 | Illinois Vehicle Code, farm machinery and agricultural | ||||||
20 | chemical and
fertilizer spreaders, and nurse wagons required to | ||||||
21 | be registered
under Section 3-809 of the Illinois Vehicle Code,
| ||||||
22 | but
excluding other motor vehicles required to be registered | ||||||
23 | under the Illinois
Vehicle Code.
Horticultural polyhouses or | ||||||
24 | hoop houses used for propagating, growing, or
overwintering |
| |||||||
| |||||||
1 | plants shall be considered farm machinery and equipment under
| ||||||
2 | this item (2).
Agricultural chemical tender tanks and dry boxes | ||||||
3 | shall include units sold
separately from a motor vehicle | ||||||
4 | required to be licensed and units sold mounted
on a motor | ||||||
5 | vehicle required to be licensed, if the selling price of the | ||||||
6 | tender
is separately stated.
| ||||||
7 | Farm machinery and equipment shall include precision | ||||||
8 | farming equipment
that is
installed or purchased to be | ||||||
9 | installed on farm machinery and equipment
including, but not | ||||||
10 | limited to, tractors, harvesters, sprayers, planters,
seeders, | ||||||
11 | or spreaders.
Precision farming equipment includes, but is not | ||||||
12 | limited to,
soil testing sensors, computers, monitors, | ||||||
13 | software, global positioning
and mapping systems, and other | ||||||
14 | such equipment.
| ||||||
15 | Farm machinery and equipment also includes computers, | ||||||
16 | sensors, software, and
related equipment used primarily in the
| ||||||
17 | computer-assisted operation of production agriculture | ||||||
18 | facilities, equipment,
and activities such as, but
not limited | ||||||
19 | to,
the collection, monitoring, and correlation of
animal and | ||||||
20 | crop data for the purpose of
formulating animal diets and | ||||||
21 | agricultural chemicals. This item (7) is exempt
from the | ||||||
22 | provisions of
Section 2-70.
| ||||||
23 | (3) Until July 1, 2003, distillation machinery and | ||||||
24 | equipment, sold as a
unit or kit,
assembled or installed by the | ||||||
25 | retailer, certified by the user to be used
only for the | ||||||
26 | production of ethyl alcohol that will be used for consumption
|
| |||||||
| |||||||
1 | as motor fuel or as a component of motor fuel for the personal | ||||||
2 | use of the
user, and not subject to sale or resale.
| ||||||
3 | (4) Until July 1, 2003 and beginning again September 1, | ||||||
4 | 2004, graphic arts machinery and equipment, including
repair | ||||||
5 | and
replacement parts, both new and used, and including that | ||||||
6 | manufactured on
special order or purchased for lease, certified | ||||||
7 | by the purchaser to be used
primarily for graphic arts | ||||||
8 | production.
Equipment includes chemicals or
chemicals acting | ||||||
9 | as catalysts but only if
the chemicals or chemicals acting as | ||||||
10 | catalysts effect a direct and immediate
change upon a
graphic | ||||||
11 | arts product.
| ||||||
12 | (5) A motor vehicle of the first division, a motor vehicle | ||||||
13 | of the second
division that is a self-contained motor vehicle | ||||||
14 | designed or permanently
converted to provide living quarters | ||||||
15 | for recreational, camping, or travel
use, with direct walk | ||||||
16 | through access to the living quarters from the
driver's seat, | ||||||
17 | or a motor vehicle of the second division that is of the van
| ||||||
18 | configuration designed for the transportation of not less than | ||||||
19 | 7 nor more
than 16 passengers, as defined in Section 1-146 of | ||||||
20 | the Illinois Vehicle
Code, that is used for automobile renting, | ||||||
21 | as defined in the Automobile
Renting Occupation and Use Tax | ||||||
22 | Act.
| ||||||
23 | (6) Personal property sold by a teacher-sponsored student | ||||||
24 | organization
affiliated with an elementary or secondary school | ||||||
25 | located in Illinois.
| ||||||
26 | (7) Until July 1, 2003, proceeds of that portion of the |
| |||||||
| |||||||
1 | selling price of
a passenger car the
sale of which is subject | ||||||
2 | to the Replacement Vehicle Tax.
| ||||||
3 | (8) Personal property sold to an Illinois county fair | ||||||
4 | association for
use in conducting, operating, or promoting the | ||||||
5 | county fair.
| ||||||
6 | (9) Personal property sold to a not-for-profit arts
or | ||||||
7 | cultural organization that establishes, by proof required by | ||||||
8 | the Department
by
rule, that it has received an exemption under | ||||||
9 | Section 501(c)(3) of the
Internal Revenue Code and that is | ||||||
10 | organized and operated primarily for the
presentation
or | ||||||
11 | support of arts or cultural programming, activities, or | ||||||
12 | services. These
organizations include, but are not limited to, | ||||||
13 | music and dramatic arts
organizations such as symphony | ||||||
14 | orchestras and theatrical groups, arts and
cultural service | ||||||
15 | organizations, local arts councils, visual arts organizations,
| ||||||
16 | and media arts organizations.
On and after the effective date | ||||||
17 | of this amendatory Act of the 92nd General
Assembly, however, | ||||||
18 | an entity otherwise eligible for this exemption shall not
make | ||||||
19 | tax-free purchases unless it has an active identification | ||||||
20 | number issued by
the Department.
| ||||||
21 | (10) Personal property sold by a corporation, society, | ||||||
22 | association,
foundation, institution, or organization, other | ||||||
23 | than a limited liability
company, that is organized and | ||||||
24 | operated as a not-for-profit service enterprise
for the benefit | ||||||
25 | of persons 65 years of age or older if the personal property
| ||||||
26 | was not purchased by the enterprise for the purpose of resale |
| |||||||
| |||||||
1 | by the
enterprise.
| ||||||
2 | (11) Personal property sold to a governmental body, to a | ||||||
3 | corporation,
society, association, foundation, or institution | ||||||
4 | organized and operated
exclusively for charitable, religious, | ||||||
5 | or educational purposes, or to a
not-for-profit corporation, | ||||||
6 | society, association, foundation, institution,
or organization | ||||||
7 | that has no compensated officers or employees and that is
| ||||||
8 | organized and operated primarily for the recreation of persons | ||||||
9 | 55 years of
age or older. A limited liability company may | ||||||
10 | qualify for the exemption under
this paragraph only if the | ||||||
11 | limited liability company is organized and operated
| ||||||
12 | exclusively for educational purposes. On and after July 1, | ||||||
13 | 1987, however, no
entity otherwise eligible for this exemption | ||||||
14 | shall make tax-free purchases
unless it has an active | ||||||
15 | identification number issued by the Department.
| ||||||
16 | (12) Tangible personal property sold to
interstate | ||||||
17 | carriers
for hire for use as
rolling stock moving in interstate | ||||||
18 | commerce or to lessors under leases of
one year or longer | ||||||
19 | executed or in effect at the time of purchase by
interstate | ||||||
20 | carriers for hire for use as rolling stock moving in interstate
| ||||||
21 | commerce and equipment operated by a telecommunications | ||||||
22 | provider, licensed as a
common carrier by the Federal | ||||||
23 | Communications Commission, which is permanently
installed in | ||||||
24 | or affixed to aircraft moving in interstate commerce.
| ||||||
25 | (12-5) On and after July 1, 2003 and through June 30, 2004, | ||||||
26 | motor vehicles of the second division
with a gross vehicle |
| |||||||
| |||||||
1 | weight in excess of 8,000 pounds
that
are
subject to the | ||||||
2 | commercial distribution fee imposed under Section 3-815.1 of
| ||||||
3 | the Illinois
Vehicle Code. Beginning on July 1, 2004 and | ||||||
4 | through June 30, 2005, the use in this State of motor vehicles | ||||||
5 | of the second division: (i) with a gross vehicle weight rating | ||||||
6 | in excess of 8,000 pounds; (ii) that are subject to the | ||||||
7 | commercial distribution fee imposed under Section 3-815.1 of | ||||||
8 | the Illinois Vehicle Code; and (iii) that are primarily used | ||||||
9 | for commercial purposes. Through June 30, 2005, this
exemption | ||||||
10 | applies to repair and replacement parts added
after the
initial | ||||||
11 | purchase of such a motor vehicle if that motor vehicle is used | ||||||
12 | in a
manner that
would qualify for the rolling stock exemption | ||||||
13 | otherwise provided for in this
Act. For purposes of this | ||||||
14 | paragraph, "used for commercial purposes" means the | ||||||
15 | transportation of persons or property in furtherance of any | ||||||
16 | commercial or industrial enterprise whether for-hire or not.
| ||||||
17 | (13) Proceeds from sales to owners, lessors, or
shippers of
| ||||||
18 | tangible personal property that is utilized by interstate | ||||||
19 | carriers for
hire for use as rolling stock moving in interstate | ||||||
20 | commerce
and equipment operated by a telecommunications | ||||||
21 | provider, licensed as a
common carrier by the Federal | ||||||
22 | Communications Commission, which is
permanently installed in | ||||||
23 | or affixed to aircraft moving in interstate commerce.
| ||||||
24 | (14) Machinery and equipment that will be used by the | ||||||
25 | purchaser, or a
lessee of the purchaser, primarily in the | ||||||
26 | process of manufacturing or
assembling tangible personal |
| |||||||
| |||||||
1 | property for wholesale or retail sale or
lease, whether the | ||||||
2 | sale or lease is made directly by the manufacturer or by
some | ||||||
3 | other person, whether the materials used in the process are | ||||||
4 | owned by
the manufacturer or some other person, or whether the | ||||||
5 | sale or lease is made
apart from or as an incident to the | ||||||
6 | seller's engaging in the service
occupation of producing | ||||||
7 | machines, tools, dies, jigs, patterns, gauges, or
other similar | ||||||
8 | items of no commercial value on special order for a particular
| ||||||
9 | purchaser.
| ||||||
10 | (15) Proceeds of mandatory service charges separately | ||||||
11 | stated on
customers' bills for purchase and consumption of food | ||||||
12 | and beverages, to the
extent that the proceeds of the service | ||||||
13 | charge are in fact turned over as
tips or as a substitute for | ||||||
14 | tips to the employees who participate directly
in preparing, | ||||||
15 | serving, hosting or cleaning up the food or beverage function
| ||||||
16 | with respect to which the service charge is imposed.
| ||||||
17 | (16) Petroleum products sold to a purchaser if the seller
| ||||||
18 | is prohibited by federal law from charging tax to the | ||||||
19 | purchaser.
| ||||||
20 | (17) Tangible personal property sold to a common carrier by | ||||||
21 | rail or
motor that
receives the physical possession of the | ||||||
22 | property in Illinois and that
transports the property, or | ||||||
23 | shares with another common carrier in the
transportation of the | ||||||
24 | property, out of Illinois on a standard uniform bill
of lading | ||||||
25 | showing the seller of the property as the shipper or consignor | ||||||
26 | of
the property to a destination outside Illinois, for use |
| |||||||
| |||||||
1 | outside Illinois.
| ||||||
2 | (18) Legal tender, currency, medallions, or gold or silver | ||||||
3 | coinage
issued by the State of Illinois, the government of the | ||||||
4 | United States of
America, or the government of any foreign | ||||||
5 | country, and bullion.
| ||||||
6 | (19) Until July 1 2003, oil field exploration, drilling, | ||||||
7 | and production
equipment, including
(i) rigs and parts of rigs, | ||||||
8 | rotary rigs, cable tool
rigs, and workover rigs, (ii) pipe and | ||||||
9 | tubular goods, including casing and
drill strings, (iii) pumps | ||||||
10 | and pump-jack units, (iv) storage tanks and flow
lines, (v) any | ||||||
11 | individual replacement part for oil field exploration,
| ||||||
12 | drilling, and production equipment, and (vi) machinery and | ||||||
13 | equipment purchased
for lease; but
excluding motor vehicles | ||||||
14 | required to be registered under the Illinois
Vehicle Code.
| ||||||
15 | (20) Photoprocessing machinery and equipment, including | ||||||
16 | repair and
replacement parts, both new and used, including that | ||||||
17 | manufactured on
special order, certified by the purchaser to be | ||||||
18 | used primarily for
photoprocessing, and including | ||||||
19 | photoprocessing machinery and equipment
purchased for lease.
| ||||||
20 | (21) Until July 1, 2003, coal exploration, mining, | ||||||
21 | offhighway hauling,
processing,
maintenance, and reclamation | ||||||
22 | equipment, including
replacement parts and equipment, and | ||||||
23 | including
equipment purchased for lease, but excluding motor | ||||||
24 | vehicles required to be
registered under the Illinois Vehicle | ||||||
25 | Code.
| ||||||
26 | (22) Fuel and petroleum products sold to or used by an air |
| |||||||
| |||||||
1 | carrier,
certified by the carrier to be used for consumption, | ||||||
2 | shipment, or storage
in the conduct of its business as an air | ||||||
3 | common carrier, for a flight
destined for or returning from a | ||||||
4 | location or locations
outside the United States without regard | ||||||
5 | to previous or subsequent domestic
stopovers.
| ||||||
6 | (23) A transaction in which the purchase order is received | ||||||
7 | by a florist
who is located outside Illinois, but who has a | ||||||
8 | florist located in Illinois
deliver the property to the | ||||||
9 | purchaser or the purchaser's donee in Illinois.
| ||||||
10 | (24) Fuel consumed or used in the operation of ships, | ||||||
11 | barges, or vessels
that are used primarily in or for the | ||||||
12 | transportation of property or the
conveyance of persons for | ||||||
13 | hire on rivers bordering on this State if the
fuel is delivered | ||||||
14 | by the seller to the purchaser's barge, ship, or vessel
while | ||||||
15 | it is afloat upon that bordering river.
| ||||||
16 | (25) Except as provided in item (25-5) of this Section, a
| ||||||
17 | motor vehicle sold in this State to a nonresident even though | ||||||
18 | the
motor vehicle is delivered to the nonresident in this | ||||||
19 | State, if the motor
vehicle is not to be titled in this State, | ||||||
20 | and if a drive-away permit
is issued to the motor vehicle as | ||||||
21 | provided in Section 3-603 of the Illinois
Vehicle Code or if | ||||||
22 | the nonresident purchaser has vehicle registration
plates to | ||||||
23 | transfer to the motor vehicle upon returning to his or her home
| ||||||
24 | state. The issuance of the drive-away permit or having
the
| ||||||
25 | out-of-state registration plates to be transferred is prima | ||||||
26 | facie evidence
that the motor vehicle will not be titled in |
| |||||||
| |||||||
1 | this State.
| ||||||
2 | (25-5) The exemption under item (25) does not apply if the | ||||||
3 | state in which the motor vehicle will be titled does not allow | ||||||
4 | a reciprocal exemption for a motor vehicle sold and delivered | ||||||
5 | in that state to an Illinois resident but titled in Illinois. | ||||||
6 | The tax collected under this Act on the sale of a motor vehicle | ||||||
7 | in this State to a resident of another state that does not | ||||||
8 | allow a reciprocal exemption shall be imposed at a rate equal | ||||||
9 | to the state's rate of tax on taxable property in the state in | ||||||
10 | which the purchaser is a resident, except that the tax shall | ||||||
11 | not exceed the tax that would otherwise be imposed under this | ||||||
12 | Act. At the time of the sale, the purchaser shall execute a | ||||||
13 | statement, signed under penalty of perjury, of his or her | ||||||
14 | intent to title the vehicle in the state in which the purchaser | ||||||
15 | is a resident within 30 days after the sale and of the fact of | ||||||
16 | the payment to the State of Illinois of tax in an amount | ||||||
17 | equivalent to the state's rate of tax on taxable property in | ||||||
18 | his or her state of residence and shall submit the statement to | ||||||
19 | the appropriate tax collection agency in his or her state of | ||||||
20 | residence. In addition, the retailer must retain a signed copy | ||||||
21 | of the statement in his or her records. Nothing in this item | ||||||
22 | shall be construed to require the removal of the vehicle from | ||||||
23 | this state following the filing of an intent to title the | ||||||
24 | vehicle in the purchaser's state of residence if the purchaser | ||||||
25 | titles the vehicle in his or her state of residence within 30 | ||||||
26 | days after the date of sale. The tax collected under this Act |
| |||||||
| |||||||
1 | in accordance with this item (25-5) shall be proportionately | ||||||
2 | distributed as if the tax were collected at the 6.25% general | ||||||
3 | rate imposed under this Act.
| ||||||
4 | (26) Semen used for artificial insemination of livestock | ||||||
5 | for direct
agricultural production.
| ||||||
6 | (27) Horses, or interests in horses, registered with and | ||||||
7 | meeting the
requirements of any of the
Arabian Horse Club | ||||||
8 | Registry of America, Appaloosa Horse Club, American Quarter
| ||||||
9 | Horse Association, United States
Trotting Association, or | ||||||
10 | Jockey Club, as appropriate, used for
purposes of breeding or | ||||||
11 | racing for prizes.
| ||||||
12 | (28) Computers and communications equipment utilized for | ||||||
13 | any
hospital
purpose
and equipment used in the diagnosis,
| ||||||
14 | analysis, or treatment of hospital patients sold to a lessor | ||||||
15 | who leases the
equipment, under a lease of one year or longer | ||||||
16 | executed or in effect at the
time of the purchase, to a
| ||||||
17 | hospital
that has been issued an active tax exemption | ||||||
18 | identification number by the
Department under Section 1g of | ||||||
19 | this Act.
| ||||||
20 | (29) Personal property sold to a lessor who leases the
| ||||||
21 | property, under a
lease of one year or longer executed or in | ||||||
22 | effect at the time of the purchase,
to a governmental body
that | ||||||
23 | has been issued an active tax exemption identification number | ||||||
24 | by the
Department under Section 1g of this Act.
| ||||||
25 | (30) Beginning with taxable years ending on or after | ||||||
26 | December
31, 1995
and
ending with taxable years ending on or |
| |||||||
| |||||||
1 | before December 31, 2004,
personal property that is
donated for | ||||||
2 | disaster relief to be used in a State or federally declared
| ||||||
3 | disaster area in Illinois or bordering Illinois by a | ||||||
4 | manufacturer or retailer
that is registered in this State to a | ||||||
5 | corporation, society, association,
foundation, or institution | ||||||
6 | that has been issued a sales tax exemption
identification | ||||||
7 | number by the Department that assists victims of the disaster
| ||||||
8 | who reside within the declared disaster area.
| ||||||
9 | (31) Beginning with taxable years ending on or after | ||||||
10 | December
31, 1995 and
ending with taxable years ending on or | ||||||
11 | before December 31, 2004, personal
property that is used in the | ||||||
12 | performance of infrastructure repairs in this
State, including | ||||||
13 | but not limited to municipal roads and streets, access roads,
| ||||||
14 | bridges, sidewalks, waste disposal systems, water and sewer | ||||||
15 | line extensions,
water distribution and purification | ||||||
16 | facilities, storm water drainage and
retention facilities, and | ||||||
17 | sewage treatment facilities, resulting from a State
or | ||||||
18 | federally declared disaster in Illinois or bordering Illinois | ||||||
19 | when such
repairs are initiated on facilities located in the | ||||||
20 | declared disaster area
within 6 months after the disaster.
| ||||||
21 | (32) Beginning July 1, 1999, game or game birds sold at a | ||||||
22 | "game breeding
and
hunting preserve area" or an "exotic game | ||||||
23 | hunting area" as those terms are used
in the
Wildlife Code or | ||||||
24 | at a hunting enclosure approved through rules adopted by the
| ||||||
25 | Department of Natural Resources. This paragraph is exempt from | ||||||
26 | the provisions
of
Section 2-70.
|
| |||||||
| |||||||
1 | (33) A motor vehicle, as that term is defined in Section | ||||||
2 | 1-146
of the
Illinois Vehicle Code, that is donated to a | ||||||
3 | corporation, limited liability
company, society, association, | ||||||
4 | foundation, or institution that is determined by
the Department | ||||||
5 | to be organized and operated exclusively for educational
| ||||||
6 | purposes. For purposes of this exemption, "a corporation, | ||||||
7 | limited liability
company, society, association, foundation, | ||||||
8 | or institution organized and
operated
exclusively for | ||||||
9 | educational purposes" means all tax-supported public schools,
| ||||||
10 | private schools that offer systematic instruction in useful | ||||||
11 | branches of
learning by methods common to public schools and | ||||||
12 | that compare favorably in
their scope and intensity with the | ||||||
13 | course of study presented in tax-supported
schools, and | ||||||
14 | vocational or technical schools or institutes organized and
| ||||||
15 | operated exclusively to provide a course of study of not less | ||||||
16 | than 6 weeks
duration and designed to prepare individuals to | ||||||
17 | follow a trade or to pursue a
manual, technical, mechanical, | ||||||
18 | industrial, business, or commercial
occupation.
| ||||||
19 | (34) Beginning January 1, 2000, personal property, | ||||||
20 | including food, purchased
through fundraising events for the | ||||||
21 | benefit of a public or private elementary or
secondary school, | ||||||
22 | a group of those schools, or one or more school districts if
| ||||||
23 | the events are sponsored by an entity recognized by the school | ||||||
24 | district that
consists primarily of volunteers and includes | ||||||
25 | parents and teachers of the
school children. This paragraph | ||||||
26 | does not apply to fundraising events (i) for
the benefit of |
| |||||||
| |||||||
1 | private home instruction or (ii) for which the fundraising
| ||||||
2 | entity purchases the personal property sold at the events from | ||||||
3 | another
individual or entity that sold the property for the | ||||||
4 | purpose of resale by the
fundraising entity and that profits | ||||||
5 | from the sale to the fundraising entity.
This paragraph is | ||||||
6 | exempt from the provisions of Section 2-70.
| ||||||
7 | (35) Beginning January 1, 2000 and through December 31, | ||||||
8 | 2001, new or used
automatic vending machines that prepare and | ||||||
9 | serve hot food and beverages,
including coffee, soup, and other | ||||||
10 | items, and replacement parts for these
machines. Beginning | ||||||
11 | January 1, 2002 and through June 30, 2003, machines
and parts | ||||||
12 | for machines used in
commercial, coin-operated amusement and | ||||||
13 | vending business if a use or occupation
tax is paid on the | ||||||
14 | gross receipts derived from the use of the commercial,
| ||||||
15 | coin-operated amusement and vending machines. This paragraph | ||||||
16 | is exempt from
the provisions of Section 2-70.
| ||||||
17 | (35-5) Beginning August 23, 2001 and through June 30, 2011, | ||||||
18 | food for human consumption that is to be consumed off
the | ||||||
19 | premises where it is sold (other than alcoholic beverages, soft | ||||||
20 | drinks,
and food that has been prepared for immediate | ||||||
21 | consumption) and prescription
and nonprescription medicines, | ||||||
22 | drugs, medical appliances, and insulin, urine
testing | ||||||
23 | materials, syringes, and needles used by diabetics, for human | ||||||
24 | use, when
purchased for use by a person receiving medical | ||||||
25 | assistance under Article 5 of
the Illinois Public Aid Code who | ||||||
26 | resides in a licensed long-term care facility,
as defined in |
| |||||||
| |||||||
1 | the Nursing Home Care Act.
| ||||||
2 | (36) Beginning August 2, 2001, computers and | ||||||
3 | communications equipment
utilized for any hospital purpose and | ||||||
4 | equipment used in the diagnosis,
analysis, or treatment of | ||||||
5 | hospital patients sold to a lessor who leases the
equipment, | ||||||
6 | under a lease of one year or longer executed or in effect at | ||||||
7 | the
time of the purchase, to a hospital that has been issued an | ||||||
8 | active tax
exemption identification number by the Department | ||||||
9 | under Section 1g of this Act.
This paragraph is exempt from the | ||||||
10 | provisions of Section 2-70.
| ||||||
11 | (37) Beginning August 2, 2001, personal property sold to a | ||||||
12 | lessor who
leases the property, under a lease of one year or | ||||||
13 | longer executed or in effect
at the time of the purchase, to a | ||||||
14 | governmental body that has been issued an
active tax exemption | ||||||
15 | identification number by the Department under Section 1g
of | ||||||
16 | this Act. This paragraph is exempt from the provisions of | ||||||
17 | Section 2-70.
| ||||||
18 | (38) Beginning on January 1, 2002 and through June 30, | ||||||
19 | 2011, tangible personal property purchased
from an Illinois | ||||||
20 | retailer by a taxpayer engaged in centralized purchasing
| ||||||
21 | activities in Illinois who will, upon receipt of the property | ||||||
22 | in Illinois,
temporarily store the property in Illinois (i) for | ||||||
23 | the purpose of subsequently
transporting it outside this State | ||||||
24 | for use or consumption thereafter solely
outside this State or | ||||||
25 | (ii) for the purpose of being processed, fabricated, or
| ||||||
26 | manufactured into, attached to, or incorporated into other |
| |||||||
| |||||||
1 | tangible personal
property to be transported outside this State | ||||||
2 | and thereafter used or consumed
solely outside this State. The | ||||||
3 | Director of Revenue shall, pursuant to rules
adopted in | ||||||
4 | accordance with the Illinois Administrative Procedure Act, | ||||||
5 | issue a
permit to any taxpayer in good standing with the | ||||||
6 | Department who is eligible for
the exemption under this | ||||||
7 | paragraph (38). The permit issued under
this paragraph (38) | ||||||
8 | shall authorize the holder, to the extent and
in the manner | ||||||
9 | specified in the rules adopted under this Act, to purchase
| ||||||
10 | tangible personal property from a retailer exempt from the | ||||||
11 | taxes imposed by
this Act. Taxpayers shall maintain all | ||||||
12 | necessary books and records to
substantiate the use and | ||||||
13 | consumption of all such tangible personal property
outside of | ||||||
14 | the State of Illinois.
| ||||||
15 | (39) Any work of art that is sold from a place of business | ||||||
16 | within an Illinois Arts District by a person who has been | ||||||
17 | granted an exemption under Section 15 of the Arts District Act.
| ||||||
18 | (Source: P.A. 93-23, eff. 6-20-03; 93-24, eff. 6-20-03; 93-840, | ||||||
19 | eff. 7-30-04; 93-1033, eff. 9-3-04; 93-1068, eff. 1-15-05; | ||||||
20 | 94-1002, eff. 7-3-06.)
| ||||||
21 | Section 999. Effective date. This Act takes effect upon | ||||||
22 | becoming law. |