97TH GENERAL ASSEMBLY
State of Illinois
2011 and 2012
SB1767

 

Introduced 2/9/2011, by Sen. Bill Brady

 

SYNOPSIS AS INTRODUCED:
 
35 ILCS 405/2  from Ch. 120, par. 405A-2
35 ILCS 405/3  from Ch. 120, par. 405A-3
35 ILCS 405/4  from Ch. 120, par. 405A-4

    Amends the Illinois Estate and Generation-Skipping Transfer Tax Act. Provides that no tax shall be imposed under the Act for persons dying on or after the effective date of the amendatory Act or for transfers made on or after the effective date of the amendatory Act. Effective immediately.


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FISCAL NOTE ACT MAY APPLY

 

 

A BILL FOR

 

SB1767LRB097 07709 HLH 47820 b

1    AN ACT concerning revenue.
 
2    Be it enacted by the People of the State of Illinois,
3represented in the General Assembly:
 
4    Section 5. The Illinois Estate and Generation-Skipping
5Transfer Tax Act is amended by changing Sections 2, 3, and 4 as
6follows:
 
7    (35 ILCS 405/2)  (from Ch. 120, par. 405A-2)
8    Sec. 2. Definitions.
9    "Federal estate tax" means the tax due to the United States
10with respect to a taxable transfer under Chapter 11 of the
11Internal Revenue Code.
12    "Federal generation-skipping transfer tax" means the tax
13due to the United States with respect to a taxable transfer
14under Chapter 13 of the Internal Revenue Code.
15    "Federal return" means the federal estate tax return with
16respect to the federal estate tax and means the federal
17generation-skipping transfer tax return with respect to the
18federal generation-skipping transfer tax.
19    "Federal transfer tax" means the federal estate tax or the
20federal generation-skipping transfer tax.
21    "Illinois estate tax" means the tax due to this State with
22respect to a taxable transfer.
23    "Illinois generation-skipping transfer tax" means the tax

 

 

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1due to this State with respect to a taxable transfer that gives
2rise to a federal generation-skipping transfer tax.
3    "Illinois transfer tax" means the Illinois estate tax or
4the Illinois generation-skipping transfer tax.
5    "Internal Revenue Code" means, unless otherwise provided,
6the Internal Revenue Code of 1986, as amended from time to
7time.
8    "Non-resident trust" means a trust that is not a resident
9of this State for purposes of the Illinois Income Tax Act, as
10amended from time to time.
11    "Person" means and includes any individual, trust, estate,
12partnership, association, company or corporation.
13    "Qualified heir" means a qualified heir as defined in
14Section 2032A(e)(1) of the Internal Revenue Code.
15    "Resident trust" means a trust that is a resident of this
16State for purposes of the Illinois Income Tax Act, as amended
17from time to time.
18    "State" means any state, territory or possession of the
19United States and the District of Columbia.
20    "State tax credit" means:
21    (a) For persons dying on or after January 1, 2003 and
22through December 31, 2005, an amount equal to the full credit
23calculable under Section 2011 or Section 2604 of the Internal
24Revenue Code as the credit would have been computed and allowed
25under the Internal Revenue Code as in effect on December 31,
262001, without the reduction in the State Death Tax Credit as

 

 

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1provided in Section 2011(b)(2) or the termination of the State
2Death Tax Credit as provided in Section 2011(f) as enacted by
3the Economic Growth and Tax Relief Reconciliation Act of 2001,
4but recognizing the increased applicable exclusion amount
5through December 31, 2005.
6    (b) For persons dying after December 31, 2005 and on or
7before December 31, 2009, and for persons dying after December
831, 2010 and prior to the effective date of this amendatory Act
9of the 97th General Assembly, an amount equal to the full
10credit calculable under Section 2011 or 2604 of the Internal
11Revenue Code as the credit would have been computed and allowed
12under the Internal Revenue Code as in effect on December 31,
132001, without the reduction in the State Death Tax Credit as
14provided in Section 2011(b)(2) or the termination of the State
15Death Tax Credit as provided in Section 2011(f) as enacted by
16the Economic Growth and Tax Relief Reconciliation Act of 2001,
17but recognizing the exclusion amount of only $2,000,000, and
18with reduction to the adjusted taxable estate for any qualified
19terminable interest property election as defined in subsection
20(b-1) of this Section.
21    (b-1) The person required to file the Illinois return may
22elect on a timely filed Illinois return a marital deduction for
23qualified terminable interest property under Section
242056(b)(7) of the Internal Revenue Code for purposes of the
25Illinois estate tax that is separate and independent of any
26qualified terminable interest property election for federal

 

 

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1estate tax purposes. For purposes of the Illinois estate tax,
2the inclusion of property in the gross estate of a surviving
3spouse is the same as under Section 2044 of the Internal
4Revenue Code.
5    In the case of any trust for which a State or federal
6qualified terminable interest property election is made, the
7trustee may not retain non-income producing assets for more
8than a reasonable amount of time without the consent of the
9surviving spouse.
10    "Taxable transfer" means an event that gives rise to a
11state tax credit, including any credit as a result of the
12imposition of an additional tax under Section 2032A(c) of the
13Internal Revenue Code.
14    "Transferee" means a transferee within the meaning of
15Section 2603(a)(1) and Section 6901(h) of the Internal Revenue
16Code.
17    "Transferred property" means:
18        (1) With respect to a taxable transfer occurring at the
19    death of an individual, the deceased individual's gross
20    estate as defined in Section 2031 of the Internal Revenue
21    Code.
22        (2) With respect to a taxable transfer occurring as a
23    result of a taxable termination as defined in Section
24    2612(a) of the Internal Revenue Code, the taxable amount
25    determined under Section 2622(a) of the Internal Revenue
26    Code.

 

 

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1        (3) With respect to a taxable transfer occurring as a
2    result of a taxable distribution as defined in Section
3    2612(b) of the Internal Revenue Code, the taxable amount
4    determined under Section 2621(a) of the Internal Revenue
5    Code.
6        (4) With respect to an event which causes the
7    imposition of an additional estate tax under Section
8    2032A(c) of the Internal Revenue Code, the qualified real
9    property that was disposed of or which ceased to be used
10    for the qualified use, within the meaning of Section
11    2032A(c)(1) of the Internal Revenue Code.
12    "Trust" includes a trust as defined in Section 2652(b)(1)
13of the Internal Revenue Code.
14(Source: P.A. 96-789, eff. 9-8-09; 96-1496, eff. 1-13-11.)
 
15    (35 ILCS 405/3)  (from Ch. 120, par. 405A-3)
16    Sec. 3. Illinois estate tax.
17    (a) Imposition of Tax. An Illinois estate tax is imposed on
18every taxable transfer involving transferred property having a
19tax situs within the State of Illinois.
20    (b) Amount of tax. On estates of persons dying before
21January 1, 2003, the amount of the Illinois estate tax shall be
22the state tax credit, as defined in Section 2 of this Act, with
23respect to the taxable transfer reduced by the lesser of:
24        (1) the amount of the state tax credit paid to any
25    other state or states; and

 

 

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1        (2) the amount determined by multiplying the maximum
2    state tax credit allowable with respect to the taxable
3    transfer by the percentage which the gross value of the
4    transferred property not having a tax situs in Illinois
5    bears to the gross value of the total transferred property.
6    (c) On estates of persons dying on or after January 1, 2003
7and prior to the effective date of this amendatory Act of the
897th General Assembly, the amount of the Illinois estate tax
9shall be the state tax credit, as defined in Section 2 of this
10Act, reduced by the amount determined by multiplying the state
11tax credit with respect to the taxable transfer by the
12percentage which the gross value of the transferred property
13not having a tax situs in Illinois bears to the gross value of
14the total transferred property.
15    (d) No tax shall be imposed under this Act for persons
16dying on or after the effective date of this amendatory Act of
17the 97th General Assembly.
18(Source: P.A. 93-30, eff. 6-20-03; 94-419, eff. 8-2-05.)
 
19    (35 ILCS 405/4)  (from Ch. 120, par. 405A-4)
20    Sec. 4. Illinois generation-skipping transfer tax.
21    (a) Imposition of tax. An Illinois generation-skipping
22transfer tax is imposed on every taxable transfer resulting in
23federal generation-skipping transfer tax involving transferred
24property having a tax situs within the State of Illinois.
25    (b) Amount of tax. The amount of the Illinois

 

 

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1generation-skipping transfer tax shall be the maximum state tax
2credit allowable with respect to the taxable transfer, reduced
3by the lesser of:
4        (1) the amount of the state tax credit paid to any
5    other state or states; and
6        (2) the amount determined by multiplying the maximum
7    state tax credit allowable with respect to the taxable
8    transfer by the percentage which the gross value of the
9    transferred property not having a tax situs in Illinois
10    bears to the gross value of the total transferred property.
11    (c) No tax shall be imposed under this Act for transfers
12occurring on or after the effective date of this amendatory Act
13of the 97th General Assembly.
14(Source: P.A. 86-737.)
 
15    Section 99. Effective date. This Act takes effect upon
16becoming law.