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Full Text of HB4211  100th General Assembly

HB4211 100TH GENERAL ASSEMBLY

  
  

 


 
100TH GENERAL ASSEMBLY
State of Illinois
2017 and 2018
HB4211

 

Introduced , by Rep. Charles Meier

 

SYNOPSIS AS INTRODUCED:
 
35 ILCS 5/201  from Ch. 120, par. 2-201
35 ILCS 5/901  from Ch. 120, par. 9-901

    Amends the Illinois Income Tax Act. Provides that, for taxable years beginning on or after January 1, 2018 and beginning prior to January 1, 2025, the rates of tax shall be (i) 3.75% for individuals, trusts, and estates and (ii) 5.25% for corporations. Provides that, for taxable years beginning on or after January 1, 2025, the rates of tax shall be (i) 3.25% for individuals, trusts, and estates and (ii) 4.8% for corporations. Effective immediately.


LRB100 16414 HLH 31542 b

FISCAL NOTE ACT MAY APPLY

 

 

A BILL FOR

 

HB4211LRB100 16414 HLH 31542 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 Income Tax Act is amended by
5changing Sections 201 and 901 as follows:
 
6    (35 ILCS 5/201)  (from Ch. 120, par. 2-201)
7    Sec. 201. Tax imposed.
8    (a) In general. A tax measured by net income is hereby
9imposed on every individual, corporation, trust and estate for
10each taxable year ending after July 31, 1969 on the privilege
11of earning or receiving income in or as a resident of this
12State. Such tax shall be in addition to all other occupation or
13privilege taxes imposed by this State or by any municipal
14corporation or political subdivision thereof.
15    (b) Rates. The tax imposed by subsection (a) of this
16Section shall be determined as follows, except as adjusted by
17subsection (d-1):
18        (1) In the case of an individual, trust or estate, for
19    taxable years ending prior to July 1, 1989, an amount equal
20    to 2 1/2% of the taxpayer's net income for the taxable
21    year.
22        (2) In the case of an individual, trust or estate, for
23    taxable years beginning prior to July 1, 1989 and ending

 

 

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1    after June 30, 1989, an amount equal to the sum of (i) 2
2    1/2% of the taxpayer's net income for the period prior to
3    July 1, 1989, as calculated under Section 202.3, and (ii)
4    3% of the taxpayer's net income for the period after June
5    30, 1989, as calculated under Section 202.3.
6        (3) In the case of an individual, trust or estate, for
7    taxable years beginning after June 30, 1989, and ending
8    prior to January 1, 2011, an amount equal to 3% of the
9    taxpayer's net income for the taxable year.
10        (4) In the case of an individual, trust, or estate, for
11    taxable years beginning prior to January 1, 2011, and
12    ending after December 31, 2010, an amount equal to the sum
13    of (i) 3% of the taxpayer's net income for the period prior
14    to January 1, 2011, as calculated under Section 202.5, and
15    (ii) 5% of the taxpayer's net income for the period after
16    December 31, 2010, as calculated under Section 202.5.
17        (5) In the case of an individual, trust, or estate, for
18    taxable years beginning on or after January 1, 2011, and
19    ending prior to January 1, 2015, an amount equal to 5% of
20    the taxpayer's net income for the taxable year.
21        (5.1) In the case of an individual, trust, or estate,
22    for taxable years beginning prior to January 1, 2015, and
23    ending after December 31, 2014, an amount equal to the sum
24    of (i) 5% of the taxpayer's net income for the period prior
25    to January 1, 2015, as calculated under Section 202.5, and
26    (ii) 3.75% of the taxpayer's net income for the period

 

 

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1    after December 31, 2014, as calculated under Section 202.5.
2        (5.2) In the case of an individual, trust, or estate,
3    for taxable years beginning on or after January 1, 2015,
4    and ending prior to July 1, 2017, an amount equal to 3.75%
5    of the taxpayer's net income for the taxable year.
6        (5.3) In the case of an individual, trust, or estate,
7    for taxable years beginning prior to July 1, 2017, and
8    ending after June 30, 2017, an amount equal to the sum of
9    (i) 3.75% of the taxpayer's net income for the period prior
10    to July 1, 2017, as calculated under Section 202.5, and
11    (ii) 4.95% of the taxpayer's net income for the period
12    after June 30, 2017, as calculated under Section 202.5.
13        (5.4) In the case of an individual, trust, or estate,
14    for taxable years beginning on or after July 1, 2017 and
15    ending prior to January 1, 2018, an amount equal to 4.95%
16    of the taxpayer's net income for the taxable year.
17        (5.5) In the case of an individual, trust, or estate,
18    for taxable years beginning prior to January 1, 2018 and
19    ending after December 31, 2017, an amount equal to the sum
20    of (i) 4.95% of the taxpayer's net income for the period
21    prior to January 1, 2018, as calculated under Section
22    202.5, and (ii) 3.75% of the taxpayer's net income for the
23    period after December 31, 2017, as calculated under Section
24    202.5.
25        (5.6) In the case of an individual, trust, or estate,
26    for taxable years beginning on or after January 1, 2018 and

 

 

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1    ending prior to January 1, 2025, an amount equal to 3.75%
2    of the taxpayer's net income for the taxable year.
3        (5.7) In the case of an individual, trust, or estate,
4    for taxable years beginning prior to January 1, 2025 and
5    ending after December 31, 2024, an amount equal to the sum
6    of (i) 3.75% of the taxpayer's net income for the period
7    prior to January 1, 2025, as calculated under Section
8    202.5, and (ii) 3.25% of the taxpayer's net income for the
9    period after December 31, 2024, as calculated under Section
10    202.5.
11        (5.8) In the case of an individual, trust, or estate,
12    for taxable years beginning on or after January 1, 2025, an
13    amount equal to 3.25% of the taxpayer's net income for the
14    taxable year.
15        (6) In the case of a corporation, for taxable years
16    ending prior to July 1, 1989, an amount equal to 4% of the
17    taxpayer's net income for the taxable year.
18        (7) In the case of a corporation, for taxable years
19    beginning prior to July 1, 1989 and ending after June 30,
20    1989, an amount equal to the sum of (i) 4% of the
21    taxpayer's net income for the period prior to July 1, 1989,
22    as calculated under Section 202.3, and (ii) 4.8% of the
23    taxpayer's net income for the period after June 30, 1989,
24    as calculated under Section 202.3.
25        (8) In the case of a corporation, for taxable years
26    beginning after June 30, 1989, and ending prior to January

 

 

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1    1, 2011, an amount equal to 4.8% of the taxpayer's net
2    income for the taxable year.
3        (9) In the case of a corporation, for taxable years
4    beginning prior to January 1, 2011, and ending after
5    December 31, 2010, an amount equal to the sum of (i) 4.8%
6    of the taxpayer's net income for the period prior to
7    January 1, 2011, as calculated under Section 202.5, and
8    (ii) 7% of the taxpayer's net income for the period after
9    December 31, 2010, as calculated under Section 202.5.
10        (10) In the case of a corporation, for taxable years
11    beginning on or after January 1, 2011, and ending prior to
12    January 1, 2015, an amount equal to 7% of the taxpayer's
13    net income for the taxable year.
14        (11) In the case of a corporation, for taxable years
15    beginning prior to January 1, 2015, and ending after
16    December 31, 2014, an amount equal to the sum of (i) 7% of
17    the taxpayer's net income for the period prior to January
18    1, 2015, as calculated under Section 202.5, and (ii) 5.25%
19    of the taxpayer's net income for the period after December
20    31, 2014, as calculated under Section 202.5.
21        (12) In the case of a corporation, for taxable years
22    beginning on or after January 1, 2015, and ending prior to
23    July 1, 2017, an amount equal to 5.25% of the taxpayer's
24    net income for the taxable year.
25        (13) In the case of a corporation, for taxable years
26    beginning prior to July 1, 2017, and ending after June 30,

 

 

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1    2017, an amount equal to the sum of (i) 5.25% of the
2    taxpayer's net income for the period prior to July 1, 2017,
3    as calculated under Section 202.5, and (ii) 7% of the
4    taxpayer's net income for the period after June 30, 2017,
5    as calculated under Section 202.5.
6        (14) In the case of a corporation, for taxable years
7    beginning on or after July 1, 2017 and ending prior to
8    January 1, 2018, an amount equal to 7% of the taxpayer's
9    net income for the taxable year.
10        (15) In the case of a corporation, for taxable years
11    beginning prior to January 1, 2018, and ending after
12    December 31, 2017, an amount equal to the sum of (i) 7% of
13    the taxpayer's net income for the period prior to January
14    1, 2018, as calculated under Section 202.5, and (ii) 5.25%
15    of the taxpayer's net income for the period after December
16    31, 2017, as calculated under Section 202.5.
17        (16) In the case of a corporation, for taxable years
18    beginning on or after January 1, 2018 and ending prior to
19    January 1, 2025, an amount equal to 5.25% of the taxpayer's
20    net income for the taxable year.
21        (17) In the case of a corporation, for taxable years
22    beginning prior to January 1, 2025, and ending after
23    December 31, 2024, an amount equal to the sum of (i) 5.25%
24    of the taxpayer's net income for the period prior to
25    January 1, 2025, as calculated under Section 202.5, and
26    (ii) 4.8% of the taxpayer's net income for the period after

 

 

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1    December 31, 2024, as calculated under Section 202.5.
2        (18) In the case of a corporation, for taxable years
3    beginning on or after January 1, 2025, an amount equal to
4    4.8% of the taxpayer's net income for the taxable year.
5    The rates under this subsection (b) are subject to the
6provisions of Section 201.5.
7    (c) Personal Property Tax Replacement Income Tax.
8Beginning on July 1, 1979 and thereafter, in addition to such
9income tax, there is also hereby imposed the Personal Property
10Tax Replacement Income Tax measured by net income on every
11corporation (including Subchapter S corporations), partnership
12and trust, for each taxable year ending after June 30, 1979.
13Such taxes are imposed on the privilege of earning or receiving
14income in or as a resident of this State. The Personal Property
15Tax Replacement Income Tax shall be in addition to the income
16tax imposed by subsections (a) and (b) of this Section and in
17addition to all other occupation or privilege taxes imposed by
18this State or by any municipal corporation or political
19subdivision thereof.
20    (d) Additional Personal Property Tax Replacement Income
21Tax Rates. The personal property tax replacement income tax
22imposed by this subsection and subsection (c) of this Section
23in the case of a corporation, other than a Subchapter S
24corporation and except as adjusted by subsection (d-1), shall
25be an additional amount equal to 2.85% of such taxpayer's net
26income for the taxable year, except that beginning on January

 

 

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11, 1981, and thereafter, the rate of 2.85% specified in this
2subsection shall be reduced to 2.5%, and in the case of a
3partnership, trust or a Subchapter S corporation shall be an
4additional amount equal to 1.5% of such taxpayer's net income
5for the taxable year.
6    (d-1) Rate reduction for certain foreign insurers. In the
7case of a foreign insurer, as defined by Section 35A-5 of the
8Illinois Insurance Code, whose state or country of domicile
9imposes on insurers domiciled in Illinois a retaliatory tax
10(excluding any insurer whose premiums from reinsurance assumed
11are 50% or more of its total insurance premiums as determined
12under paragraph (2) of subsection (b) of Section 304, except
13that for purposes of this determination premiums from
14reinsurance do not include premiums from inter-affiliate
15reinsurance arrangements), beginning with taxable years ending
16on or after December 31, 1999, the sum of the rates of tax
17imposed by subsections (b) and (d) shall be reduced (but not
18increased) to the rate at which the total amount of tax imposed
19under this Act, net of all credits allowed under this Act,
20shall equal (i) the total amount of tax that would be imposed
21on the foreign insurer's net income allocable to Illinois for
22the taxable year by such foreign insurer's state or country of
23domicile if that net income were subject to all income taxes
24and taxes measured by net income imposed by such foreign
25insurer's state or country of domicile, net of all credits
26allowed or (ii) a rate of zero if no such tax is imposed on such

 

 

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1income by the foreign insurer's state of domicile. For the
2purposes of this subsection (d-1), an inter-affiliate includes
3a mutual insurer under common management.
4        (1) For the purposes of subsection (d-1), in no event
5    shall the sum of the rates of tax imposed by subsections
6    (b) and (d) be reduced below the rate at which the sum of:
7            (A) the total amount of tax imposed on such foreign
8        insurer under this Act for a taxable year, net of all
9        credits allowed under this Act, plus
10            (B) the privilege tax imposed by Section 409 of the
11        Illinois Insurance Code, the fire insurance company
12        tax imposed by Section 12 of the Fire Investigation
13        Act, and the fire department taxes imposed under
14        Section 11-10-1 of the Illinois Municipal Code,
15    equals 1.25% for taxable years ending prior to December 31,
16    2003, or 1.75% for taxable years ending on or after
17    December 31, 2003, of the net taxable premiums written for
18    the taxable year, as described by subsection (1) of Section
19    409 of the Illinois Insurance Code. This paragraph will in
20    no event increase the rates imposed under subsections (b)
21    and (d).
22        (2) Any reduction in the rates of tax imposed by this
23    subsection shall be applied first against the rates imposed
24    by subsection (b) and only after the tax imposed by
25    subsection (a) net of all credits allowed under this
26    Section other than the credit allowed under subsection (i)

 

 

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1    has been reduced to zero, against the rates imposed by
2    subsection (d).
3    This subsection (d-1) is exempt from the provisions of
4Section 250.
5    (e) Investment credit. A taxpayer shall be allowed a credit
6against the Personal Property Tax Replacement Income Tax for
7investment in qualified property.
8        (1) A taxpayer shall be allowed a credit equal to .5%
9    of the basis of qualified property placed in service during
10    the taxable year, provided such property is placed in
11    service on or after July 1, 1984. There shall be allowed an
12    additional credit equal to .5% of the basis of qualified
13    property placed in service during the taxable year,
14    provided such property is placed in service on or after
15    July 1, 1986, and the taxpayer's base employment within
16    Illinois has increased by 1% or more over the preceding
17    year as determined by the taxpayer's employment records
18    filed with the Illinois Department of Employment Security.
19    Taxpayers who are new to Illinois shall be deemed to have
20    met the 1% growth in base employment for the first year in
21    which they file employment records with the Illinois
22    Department of Employment Security. The provisions added to
23    this Section by Public Act 85-1200 (and restored by Public
24    Act 87-895) shall be construed as declaratory of existing
25    law and not as a new enactment. If, in any year, the
26    increase in base employment within Illinois over the

 

 

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1    preceding year is less than 1%, the additional credit shall
2    be limited to that percentage times a fraction, the
3    numerator of which is .5% and the denominator of which is
4    1%, but shall not exceed .5%. The investment credit shall
5    not be allowed to the extent that it would reduce a
6    taxpayer's liability in any tax year below zero, nor may
7    any credit for qualified property be allowed for any year
8    other than the year in which the property was placed in
9    service in Illinois. For tax years ending on or after
10    December 31, 1987, and on or before December 31, 1988, the
11    credit shall be allowed for the tax year in which the
12    property is placed in service, or, if the amount of the
13    credit exceeds the tax liability for that year, whether it
14    exceeds the original liability or the liability as later
15    amended, such excess may be carried forward and applied to
16    the tax liability of the 5 taxable years following the
17    excess credit years if the taxpayer (i) makes investments
18    which cause the creation of a minimum of 2,000 full-time
19    equivalent jobs in Illinois, (ii) is located in an
20    enterprise zone established pursuant to the Illinois
21    Enterprise Zone Act and (iii) is certified by the
22    Department of Commerce and Community Affairs (now
23    Department of Commerce and Economic Opportunity) as
24    complying with the requirements specified in clause (i) and
25    (ii) by July 1, 1986. The Department of Commerce and
26    Community Affairs (now Department of Commerce and Economic

 

 

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1    Opportunity) shall notify the Department of Revenue of all
2    such certifications immediately. For tax years ending
3    after December 31, 1988, the credit shall be allowed for
4    the tax year in which the property is placed in service,
5    or, if the amount of the credit exceeds the tax liability
6    for that year, whether it exceeds the original liability or
7    the liability as later amended, such excess may be carried
8    forward and applied to the tax liability of the 5 taxable
9    years following the excess credit years. The credit shall
10    be applied to the earliest year for which there is a
11    liability. If there is credit from more than one tax year
12    that is available to offset a liability, earlier credit
13    shall be applied first.
14        (2) The term "qualified property" means property
15    which:
16            (A) is tangible, whether new or used, including
17        buildings and structural components of buildings and
18        signs that are real property, but not including land or
19        improvements to real property that are not a structural
20        component of a building such as landscaping, sewer
21        lines, local access roads, fencing, parking lots, and
22        other appurtenances;
23            (B) is depreciable pursuant to Section 167 of the
24        Internal Revenue Code, except that "3-year property"
25        as defined in Section 168(c)(2)(A) of that Code is not
26        eligible for the credit provided by this subsection

 

 

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1        (e);
2            (C) is acquired by purchase as defined in Section
3        179(d) of the Internal Revenue Code;
4            (D) is used in Illinois by a taxpayer who is
5        primarily engaged in manufacturing, or in mining coal
6        or fluorite, or in retailing, or was placed in service
7        on or after July 1, 2006 in a River Edge Redevelopment
8        Zone established pursuant to the River Edge
9        Redevelopment Zone Act; and
10            (E) has not previously been used in Illinois in
11        such a manner and by such a person as would qualify for
12        the credit provided by this subsection (e) or
13        subsection (f).
14        (3) For purposes of this subsection (e),
15    "manufacturing" means the material staging and production
16    of tangible personal property by procedures commonly
17    regarded as manufacturing, processing, fabrication, or
18    assembling which changes some existing material into new
19    shapes, new qualities, or new combinations. For purposes of
20    this subsection (e) the term "mining" shall have the same
21    meaning as the term "mining" in Section 613(c) of the
22    Internal Revenue Code. For purposes of this subsection (e),
23    the term "retailing" means the sale of tangible personal
24    property for use or consumption and not for resale, or
25    services rendered in conjunction with the sale of tangible
26    personal property for use or consumption and not for

 

 

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1    resale. For purposes of this subsection (e), "tangible
2    personal property" has the same meaning as when that term
3    is used in the Retailers' Occupation Tax Act, and, for
4    taxable years ending after December 31, 2008, does not
5    include the generation, transmission, or distribution of
6    electricity.
7        (4) The basis of qualified property shall be the basis
8    used to compute the depreciation deduction for federal
9    income tax purposes.
10        (5) If the basis of the property for federal income tax
11    depreciation purposes is increased after it has been placed
12    in service in Illinois by the taxpayer, the amount of such
13    increase shall be deemed property placed in service on the
14    date of such increase in basis.
15        (6) The term "placed in service" shall have the same
16    meaning as under Section 46 of the Internal Revenue Code.
17        (7) If during any taxable year, any property ceases to
18    be qualified property in the hands of the taxpayer within
19    48 months after being placed in service, or the situs of
20    any qualified property is moved outside Illinois within 48
21    months after being placed in service, the Personal Property
22    Tax Replacement Income Tax for such taxable year shall be
23    increased. Such increase shall be determined by (i)
24    recomputing the investment credit which would have been
25    allowed for the year in which credit for such property was
26    originally allowed by eliminating such property from such

 

 

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1    computation and, (ii) subtracting such recomputed credit
2    from the amount of credit previously allowed. For the
3    purposes of this paragraph (7), a reduction of the basis of
4    qualified property resulting from a redetermination of the
5    purchase price shall be deemed a disposition of qualified
6    property to the extent of such reduction.
7        (8) Unless the investment credit is extended by law,
8    the basis of qualified property shall not include costs
9    incurred after December 31, 2018, except for costs incurred
10    pursuant to a binding contract entered into on or before
11    December 31, 2018.
12        (9) Each taxable year ending before December 31, 2000,
13    a partnership may elect to pass through to its partners the
14    credits to which the partnership is entitled under this
15    subsection (e) for the taxable year. A partner may use the
16    credit allocated to him or her under this paragraph only
17    against the tax imposed in subsections (c) and (d) of this
18    Section. If the partnership makes that election, those
19    credits shall be allocated among the partners in the
20    partnership in accordance with the rules set forth in
21    Section 704(b) of the Internal Revenue Code, and the rules
22    promulgated under that Section, and the allocated amount of
23    the credits shall be allowed to the partners for that
24    taxable year. The partnership shall make this election on
25    its Personal Property Tax Replacement Income Tax return for
26    that taxable year. The election to pass through the credits

 

 

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1    shall be irrevocable.
2        For taxable years ending on or after December 31, 2000,
3    a partner that qualifies its partnership for a subtraction
4    under subparagraph (I) of paragraph (2) of subsection (d)
5    of Section 203 or a shareholder that qualifies a Subchapter
6    S corporation for a subtraction under subparagraph (S) of
7    paragraph (2) of subsection (b) of Section 203 shall be
8    allowed a credit under this subsection (e) equal to its
9    share of the credit earned under this subsection (e) during
10    the taxable year by the partnership or Subchapter S
11    corporation, determined in accordance with the
12    determination of income and distributive share of income
13    under Sections 702 and 704 and Subchapter S of the Internal
14    Revenue Code. This paragraph is exempt from the provisions
15    of Section 250.
16    (f) Investment credit; Enterprise Zone; River Edge
17Redevelopment Zone.
18        (1) A taxpayer shall be allowed a credit against the
19    tax imposed by subsections (a) and (b) of this Section for
20    investment in qualified property which is placed in service
21    in an Enterprise Zone created pursuant to the Illinois
22    Enterprise Zone Act or, for property placed in service on
23    or after July 1, 2006, a River Edge Redevelopment Zone
24    established pursuant to the River Edge Redevelopment Zone
25    Act. For partners, shareholders of Subchapter S
26    corporations, and owners of limited liability companies,

 

 

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1    if the liability company is treated as a partnership for
2    purposes of federal and State income taxation, there shall
3    be allowed a credit under this subsection (f) to be
4    determined in accordance with the determination of income
5    and distributive share of income under Sections 702 and 704
6    and Subchapter S of the Internal Revenue Code. The credit
7    shall be .5% of the basis for such property. The credit
8    shall be available only in the taxable year in which the
9    property is placed in service in the Enterprise Zone or
10    River Edge Redevelopment Zone and shall not be allowed to
11    the extent that it would reduce a taxpayer's liability for
12    the tax imposed by subsections (a) and (b) of this Section
13    to below zero. For tax years ending on or after December
14    31, 1985, the credit shall be allowed for the tax year in
15    which the property is placed in service, or, if the amount
16    of the credit exceeds the tax liability for that year,
17    whether it exceeds the original liability or the liability
18    as later amended, such excess may be carried forward and
19    applied to the tax liability of the 5 taxable years
20    following the excess credit year. The credit shall be
21    applied to the earliest year for which there is a
22    liability. If there is credit from more than one tax year
23    that is available to offset a liability, the credit
24    accruing first in time shall be applied first.
25        (2) The term qualified property means property which:
26            (A) is tangible, whether new or used, including

 

 

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1        buildings and structural components of buildings;
2            (B) is depreciable pursuant to Section 167 of the
3        Internal Revenue Code, except that "3-year property"
4        as defined in Section 168(c)(2)(A) of that Code is not
5        eligible for the credit provided by this subsection
6        (f);
7            (C) is acquired by purchase as defined in Section
8        179(d) of the Internal Revenue Code;
9            (D) is used in the Enterprise Zone or River Edge
10        Redevelopment Zone by the taxpayer; and
11            (E) has not been previously used in Illinois in
12        such a manner and by such a person as would qualify for
13        the credit provided by this subsection (f) or
14        subsection (e).
15        (3) The basis of qualified property shall be the basis
16    used to compute the depreciation deduction for federal
17    income tax purposes.
18        (4) If the basis of the property for federal income tax
19    depreciation purposes is increased after it has been placed
20    in service in the Enterprise Zone or River Edge
21    Redevelopment Zone by the taxpayer, the amount of such
22    increase shall be deemed property placed in service on the
23    date of such increase in basis.
24        (5) The term "placed in service" shall have the same
25    meaning as under Section 46 of the Internal Revenue Code.
26        (6) If during any taxable year, any property ceases to

 

 

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1    be qualified property in the hands of the taxpayer within
2    48 months after being placed in service, or the situs of
3    any qualified property is moved outside the Enterprise Zone
4    or River Edge Redevelopment Zone within 48 months after
5    being placed in service, the tax imposed under subsections
6    (a) and (b) of this Section for such taxable year shall be
7    increased. Such increase shall be determined by (i)
8    recomputing the investment credit which would have been
9    allowed for the year in which credit for such property was
10    originally allowed by eliminating such property from such
11    computation, and (ii) subtracting such recomputed credit
12    from the amount of credit previously allowed. For the
13    purposes of this paragraph (6), a reduction of the basis of
14    qualified property resulting from a redetermination of the
15    purchase price shall be deemed a disposition of qualified
16    property to the extent of such reduction.
17        (7) There shall be allowed an additional credit equal
18    to 0.5% of the basis of qualified property placed in
19    service during the taxable year in a River Edge
20    Redevelopment Zone, provided such property is placed in
21    service on or after July 1, 2006, and the taxpayer's base
22    employment within Illinois has increased by 1% or more over
23    the preceding year as determined by the taxpayer's
24    employment records filed with the Illinois Department of
25    Employment Security. Taxpayers who are new to Illinois
26    shall be deemed to have met the 1% growth in base

 

 

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1    employment for the first year in which they file employment
2    records with the Illinois Department of Employment
3    Security. If, in any year, the increase in base employment
4    within Illinois over the preceding year is less than 1%,
5    the additional credit shall be limited to that percentage
6    times a fraction, the numerator of which is 0.5% and the
7    denominator of which is 1%, but shall not exceed 0.5%.
8    (g) (Blank).
9    (h) Investment credit; High Impact Business.
10        (1) Subject to subsections (b) and (b-5) of Section 5.5
11    of the Illinois Enterprise Zone Act, a taxpayer shall be
12    allowed a credit against the tax imposed by subsections (a)
13    and (b) of this Section for investment in qualified
14    property which is placed in service by a Department of
15    Commerce and Economic Opportunity designated High Impact
16    Business. The credit shall be .5% of the basis for such
17    property. The credit shall not be available (i) until the
18    minimum investments in qualified property set forth in
19    subdivision (a)(3)(A) of Section 5.5 of the Illinois
20    Enterprise Zone Act have been satisfied or (ii) until the
21    time authorized in subsection (b-5) of the Illinois
22    Enterprise Zone Act for entities designated as High Impact
23    Businesses under subdivisions (a)(3)(B), (a)(3)(C), and
24    (a)(3)(D) of Section 5.5 of the Illinois Enterprise Zone
25    Act, and shall not be allowed to the extent that it would
26    reduce a taxpayer's liability for the tax imposed by

 

 

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1    subsections (a) and (b) of this Section to below zero. The
2    credit applicable to such investments shall be taken in the
3    taxable year in which such investments have been completed.
4    The credit for additional investments beyond the minimum
5    investment by a designated high impact business authorized
6    under subdivision (a)(3)(A) of Section 5.5 of the Illinois
7    Enterprise Zone Act shall be available only in the taxable
8    year in which the property is placed in service and shall
9    not be allowed to the extent that it would reduce a
10    taxpayer's liability for the tax imposed by subsections (a)
11    and (b) of this Section to below zero. For tax years ending
12    on or after December 31, 1987, the credit shall be allowed
13    for the tax year in which the property is placed in
14    service, or, if the amount of the credit exceeds the tax
15    liability for that year, whether it exceeds the original
16    liability or the liability as later amended, such excess
17    may be carried forward and applied to the tax liability of
18    the 5 taxable years following the excess credit year. The
19    credit shall be applied to the earliest year for which
20    there is a liability. If there is credit from more than one
21    tax year that is available to offset a liability, the
22    credit accruing first in time shall be applied first.
23        Changes made in this subdivision (h)(1) by Public Act
24    88-670 restore changes made by Public Act 85-1182 and
25    reflect existing law.
26        (2) The term qualified property means property which:

 

 

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1            (A) is tangible, whether new or used, including
2        buildings and structural components of buildings;
3            (B) is depreciable pursuant to Section 167 of the
4        Internal Revenue Code, except that "3-year property"
5        as defined in Section 168(c)(2)(A) of that Code is not
6        eligible for the credit provided by this subsection
7        (h);
8            (C) is acquired by purchase as defined in Section
9        179(d) of the Internal Revenue Code; and
10            (D) is not eligible for the Enterprise Zone
11        Investment Credit provided by subsection (f) of this
12        Section.
13        (3) The basis of qualified property shall be the basis
14    used to compute the depreciation deduction for federal
15    income tax purposes.
16        (4) If the basis of the property for federal income tax
17    depreciation purposes is increased after it has been placed
18    in service in a federally designated Foreign Trade Zone or
19    Sub-Zone located in Illinois by the taxpayer, the amount of
20    such increase shall be deemed property placed in service on
21    the date of such increase in basis.
22        (5) The term "placed in service" shall have the same
23    meaning as under Section 46 of the Internal Revenue Code.
24        (6) If during any taxable year ending on or before
25    December 31, 1996, any property ceases to be qualified
26    property in the hands of the taxpayer within 48 months

 

 

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1    after being placed in service, or the situs of any
2    qualified property is moved outside Illinois within 48
3    months after being placed in service, the tax imposed under
4    subsections (a) and (b) of this Section for such taxable
5    year shall be increased. Such increase shall be determined
6    by (i) recomputing the investment credit which would have
7    been allowed for the year in which credit for such property
8    was originally allowed by eliminating such property from
9    such computation, and (ii) subtracting such recomputed
10    credit from the amount of credit previously allowed. For
11    the purposes of this paragraph (6), a reduction of the
12    basis of qualified property resulting from a
13    redetermination of the purchase price shall be deemed a
14    disposition of qualified property to the extent of such
15    reduction.
16        (7) Beginning with tax years ending after December 31,
17    1996, if a taxpayer qualifies for the credit under this
18    subsection (h) and thereby is granted a tax abatement and
19    the taxpayer relocates its entire facility in violation of
20    the explicit terms and length of the contract under Section
21    18-183 of the Property Tax Code, the tax imposed under
22    subsections (a) and (b) of this Section shall be increased
23    for the taxable year in which the taxpayer relocated its
24    facility by an amount equal to the amount of credit
25    received by the taxpayer under this subsection (h).
26    (i) Credit for Personal Property Tax Replacement Income

 

 

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1Tax. For tax years ending prior to December 31, 2003, a credit
2shall be allowed against the tax imposed by subsections (a) and
3(b) of this Section for the tax imposed by subsections (c) and
4(d) of this Section. This credit shall be computed by
5multiplying the tax imposed by subsections (c) and (d) of this
6Section by a fraction, the numerator of which is base income
7allocable to Illinois and the denominator of which is Illinois
8base income, and further multiplying the product by the tax
9rate imposed by subsections (a) and (b) of this Section.
10    Any credit earned on or after December 31, 1986 under this
11subsection which is unused in the year the credit is computed
12because it exceeds the tax liability imposed by subsections (a)
13and (b) for that year (whether it exceeds the original
14liability or the liability as later amended) may be carried
15forward and applied to the tax liability imposed by subsections
16(a) and (b) of the 5 taxable years following the excess credit
17year, provided that no credit may be carried forward to any
18year ending on or after December 31, 2003. This credit shall be
19applied first to the earliest year for which there is a
20liability. If there is a credit under this subsection from more
21than one tax year that is available to offset a liability the
22earliest credit arising under this subsection shall be applied
23first.
24    If, during any taxable year ending on or after December 31,
251986, the tax imposed by subsections (c) and (d) of this
26Section for which a taxpayer has claimed a credit under this

 

 

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1subsection (i) is reduced, the amount of credit for such tax
2shall also be reduced. Such reduction shall be determined by
3recomputing the credit to take into account the reduced tax
4imposed by subsections (c) and (d). If any portion of the
5reduced amount of credit has been carried to a different
6taxable year, an amended return shall be filed for such taxable
7year to reduce the amount of credit claimed.
8    (j) Training expense credit. Beginning with tax years
9ending on or after December 31, 1986 and prior to December 31,
102003, a taxpayer shall be allowed a credit against the tax
11imposed by subsections (a) and (b) under this Section for all
12amounts paid or accrued, on behalf of all persons employed by
13the taxpayer in Illinois or Illinois residents employed outside
14of Illinois by a taxpayer, for educational or vocational
15training in semi-technical or technical fields or semi-skilled
16or skilled fields, which were deducted from gross income in the
17computation of taxable income. The credit against the tax
18imposed by subsections (a) and (b) shall be 1.6% of such
19training expenses. For partners, shareholders of subchapter S
20corporations, and owners of limited liability companies, if the
21liability company is treated as a partnership for purposes of
22federal and State income taxation, there shall be allowed a
23credit under this subsection (j) to be determined in accordance
24with the determination of income and distributive share of
25income under Sections 702 and 704 and subchapter S of the
26Internal Revenue Code.

 

 

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1    Any credit allowed under this subsection which is unused in
2the year the credit is earned may be carried forward to each of
3the 5 taxable years following the year for which the credit is
4first computed until it is used. This credit shall be applied
5first to the earliest year for which there is a liability. If
6there is a credit under this subsection from more than one tax
7year that is available to offset a liability the earliest
8credit arising under this subsection shall be applied first. No
9carryforward credit may be claimed in any tax year ending on or
10after December 31, 2003.
11    (k) Research and development credit. For tax years ending
12after July 1, 1990 and prior to December 31, 2003, and
13beginning again for tax years ending on or after December 31,
142004, and ending prior to January 1, 2022, a taxpayer shall be
15allowed a credit against the tax imposed by subsections (a) and
16(b) of this Section for increasing research activities in this
17State. The credit allowed against the tax imposed by
18subsections (a) and (b) shall be equal to 6 1/2% of the
19qualifying expenditures for increasing research activities in
20this State. For partners, shareholders of subchapter S
21corporations, and owners of limited liability companies, if the
22liability company is treated as a partnership for purposes of
23federal and State income taxation, there shall be allowed a
24credit under this subsection to be determined in accordance
25with the determination of income and distributive share of
26income under Sections 702 and 704 and subchapter S of the

 

 

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1Internal Revenue Code.
2    For purposes of this subsection, "qualifying expenditures"
3means the qualifying expenditures as defined for the federal
4credit for increasing research activities which would be
5allowable under Section 41 of the Internal Revenue Code and
6which are conducted in this State, "qualifying expenditures for
7increasing research activities in this State" means the excess
8of qualifying expenditures for the taxable year in which
9incurred over qualifying expenditures for the base period,
10"qualifying expenditures for the base period" means the average
11of the qualifying expenditures for each year in the base
12period, and "base period" means the 3 taxable years immediately
13preceding the taxable year for which the determination is being
14made.
15    Any credit in excess of the tax liability for the taxable
16year may be carried forward. A taxpayer may elect to have the
17unused credit shown on its final completed return carried over
18as a credit against the tax liability for the following 5
19taxable years or until it has been fully used, whichever occurs
20first; provided that no credit earned in a tax year ending
21prior to December 31, 2003 may be carried forward to any year
22ending on or after December 31, 2003.
23    If an unused credit is carried forward to a given year from
242 or more earlier years, that credit arising in the earliest
25year will be applied first against the tax liability for the
26given year. If a tax liability for the given year still

 

 

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1remains, the credit from the next earliest year will then be
2applied, and so on, until all credits have been used or no tax
3liability for the given year remains. Any remaining unused
4credit or credits then will be carried forward to the next
5following year in which a tax liability is incurred, except
6that no credit can be carried forward to a year which is more
7than 5 years after the year in which the expense for which the
8credit is given was incurred.
9    No inference shall be drawn from this amendatory Act of the
1091st General Assembly in construing this Section for taxable
11years beginning before January 1, 1999.
12    It is the intent of the General Assembly that the research
13and development credit under this subsection (k) shall apply
14continuously for all tax years ending on or after December 31,
152004 and ending prior to January 1, 2022, including, but not
16limited to, the period beginning on January 1, 2016 and ending
17on the effective date of this amendatory Act of the 100th
18General Assembly. All actions taken in reliance on the
19continuation of the credit under this subsection (k) by any
20taxpayer are hereby validated.
21    (l) Environmental Remediation Tax Credit.
22        (i) For tax years ending after December 31, 1997 and on
23    or before December 31, 2001, a taxpayer shall be allowed a
24    credit against the tax imposed by subsections (a) and (b)
25    of this Section for certain amounts paid for unreimbursed
26    eligible remediation costs, as specified in this

 

 

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1    subsection. For purposes of this Section, "unreimbursed
2    eligible remediation costs" means costs approved by the
3    Illinois Environmental Protection Agency ("Agency") under
4    Section 58.14 of the Environmental Protection Act that were
5    paid in performing environmental remediation at a site for
6    which a No Further Remediation Letter was issued by the
7    Agency and recorded under Section 58.10 of the
8    Environmental Protection Act. The credit must be claimed
9    for the taxable year in which Agency approval of the
10    eligible remediation costs is granted. The credit is not
11    available to any taxpayer if the taxpayer or any related
12    party caused or contributed to, in any material respect, a
13    release of regulated substances on, in, or under the site
14    that was identified and addressed by the remedial action
15    pursuant to the Site Remediation Program of the
16    Environmental Protection Act. After the Pollution Control
17    Board rules are adopted pursuant to the Illinois
18    Administrative Procedure Act for the administration and
19    enforcement of Section 58.9 of the Environmental
20    Protection Act, determinations as to credit availability
21    for purposes of this Section shall be made consistent with
22    those rules. For purposes of this Section, "taxpayer"
23    includes a person whose tax attributes the taxpayer has
24    succeeded to under Section 381 of the Internal Revenue Code
25    and "related party" includes the persons disallowed a
26    deduction for losses by paragraphs (b), (c), and (f)(1) of

 

 

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1    Section 267 of the Internal Revenue Code by virtue of being
2    a related taxpayer, as well as any of its partners. The
3    credit allowed against the tax imposed by subsections (a)
4    and (b) shall be equal to 25% of the unreimbursed eligible
5    remediation costs in excess of $100,000 per site, except
6    that the $100,000 threshold shall not apply to any site
7    contained in an enterprise zone as determined by the
8    Department of Commerce and Community Affairs (now
9    Department of Commerce and Economic Opportunity). The
10    total credit allowed shall not exceed $40,000 per year with
11    a maximum total of $150,000 per site. For partners and
12    shareholders of subchapter S corporations, there shall be
13    allowed a credit under this subsection to be determined in
14    accordance with the determination of income and
15    distributive share of income under Sections 702 and 704 and
16    subchapter S of the Internal Revenue Code.
17        (ii) A credit allowed under this subsection that is
18    unused in the year the credit is earned may be carried
19    forward to each of the 5 taxable years following the year
20    for which the credit is first earned until it is used. The
21    term "unused credit" does not include any amounts of
22    unreimbursed eligible remediation costs in excess of the
23    maximum credit per site authorized under paragraph (i).
24    This credit shall be applied first to the earliest year for
25    which there is a liability. If there is a credit under this
26    subsection from more than one tax year that is available to

 

 

HB4211- 31 -LRB100 16414 HLH 31542 b

1    offset a liability, the earliest credit arising under this
2    subsection shall be applied first. A credit allowed under
3    this subsection may be sold to a buyer as part of a sale of
4    all or part of the remediation site for which the credit
5    was granted. The purchaser of a remediation site and the
6    tax credit shall succeed to the unused credit and remaining
7    carry-forward period of the seller. To perfect the
8    transfer, the assignor shall record the transfer in the
9    chain of title for the site and provide written notice to
10    the Director of the Illinois Department of Revenue of the
11    assignor's intent to sell the remediation site and the
12    amount of the tax credit to be transferred as a portion of
13    the sale. In no event may a credit be transferred to any
14    taxpayer if the taxpayer or a related party would not be
15    eligible under the provisions of subsection (i).
16        (iii) For purposes of this Section, the term "site"
17    shall have the same meaning as under Section 58.2 of the
18    Environmental Protection Act.
19    (m) Education expense credit. Beginning with tax years
20ending after December 31, 1999, a taxpayer who is the custodian
21of one or more qualifying pupils shall be allowed a credit
22against the tax imposed by subsections (a) and (b) of this
23Section for qualified education expenses incurred on behalf of
24the qualifying pupils. The credit shall be equal to 25% of
25qualified education expenses, but in no event may the total
26credit under this subsection claimed by a family that is the

 

 

HB4211- 32 -LRB100 16414 HLH 31542 b

1custodian of qualifying pupils exceed (i) $500 for tax years
2ending prior to December 31, 2017, and (ii) $750 for tax years
3ending on or after December 31, 2017. In no event shall a
4credit under this subsection reduce the taxpayer's liability
5under this Act to less than zero. Notwithstanding any other
6provision of law, for taxable years beginning on or after
7January 1, 2017, no taxpayer may claim a credit under this
8subsection (m) if the taxpayer's adjusted gross income for the
9taxable year exceeds (i) $500,000, in the case of spouses
10filing a joint federal tax return or (ii) $250,000, in the case
11of all other taxpayers. This subsection is exempt from the
12provisions of Section 250 of this Act.
13    For purposes of this subsection:
14    "Qualifying pupils" means individuals who (i) are
15residents of the State of Illinois, (ii) are under the age of
1621 at the close of the school year for which a credit is
17sought, and (iii) during the school year for which a credit is
18sought were full-time pupils enrolled in a kindergarten through
19twelfth grade education program at any school, as defined in
20this subsection.
21    "Qualified education expense" means the amount incurred on
22behalf of a qualifying pupil in excess of $250 for tuition,
23book fees, and lab fees at the school in which the pupil is
24enrolled during the regular school year.
25    "School" means any public or nonpublic elementary or
26secondary school in Illinois that is in compliance with Title

 

 

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1VI of the Civil Rights Act of 1964 and attendance at which
2satisfies the requirements of Section 26-1 of the School Code,
3except that nothing shall be construed to require a child to
4attend any particular public or nonpublic school to qualify for
5the credit under this Section.
6    "Custodian" means, with respect to qualifying pupils, an
7Illinois resident who is a parent, the parents, a legal
8guardian, or the legal guardians of the qualifying pupils.
9    (n) River Edge Redevelopment Zone site remediation tax
10credit.
11        (i) For tax years ending on or after December 31, 2006,
12    a taxpayer shall be allowed a credit against the tax
13    imposed by subsections (a) and (b) of this Section for
14    certain amounts paid for unreimbursed eligible remediation
15    costs, as specified in this subsection. For purposes of
16    this Section, "unreimbursed eligible remediation costs"
17    means costs approved by the Illinois Environmental
18    Protection Agency ("Agency") under Section 58.14a of the
19    Environmental Protection Act that were paid in performing
20    environmental remediation at a site within a River Edge
21    Redevelopment Zone for which a No Further Remediation
22    Letter was issued by the Agency and recorded under Section
23    58.10 of the Environmental Protection Act. The credit must
24    be claimed for the taxable year in which Agency approval of
25    the eligible remediation costs is granted. The credit is
26    not available to any taxpayer if the taxpayer or any

 

 

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1    related party caused or contributed to, in any material
2    respect, a release of regulated substances on, in, or under
3    the site that was identified and addressed by the remedial
4    action pursuant to the Site Remediation Program of the
5    Environmental Protection Act. Determinations as to credit
6    availability for purposes of this Section shall be made
7    consistent with rules adopted by the Pollution Control
8    Board pursuant to the Illinois Administrative Procedure
9    Act for the administration and enforcement of Section 58.9
10    of the Environmental Protection Act. For purposes of this
11    Section, "taxpayer" includes a person whose tax attributes
12    the taxpayer has succeeded to under Section 381 of the
13    Internal Revenue Code and "related party" includes the
14    persons disallowed a deduction for losses by paragraphs
15    (b), (c), and (f)(1) of Section 267 of the Internal Revenue
16    Code by virtue of being a related taxpayer, as well as any
17    of its partners. The credit allowed against the tax imposed
18    by subsections (a) and (b) shall be equal to 25% of the
19    unreimbursed eligible remediation costs in excess of
20    $100,000 per site.
21        (ii) A credit allowed under this subsection that is
22    unused in the year the credit is earned may be carried
23    forward to each of the 5 taxable years following the year
24    for which the credit is first earned until it is used. This
25    credit shall be applied first to the earliest year for
26    which there is a liability. If there is a credit under this

 

 

HB4211- 35 -LRB100 16414 HLH 31542 b

1    subsection from more than one tax year that is available to
2    offset a liability, the earliest credit arising under this
3    subsection shall be applied first. A credit allowed under
4    this subsection may be sold to a buyer as part of a sale of
5    all or part of the remediation site for which the credit
6    was granted. The purchaser of a remediation site and the
7    tax credit shall succeed to the unused credit and remaining
8    carry-forward period of the seller. To perfect the
9    transfer, the assignor shall record the transfer in the
10    chain of title for the site and provide written notice to
11    the Director of the Illinois Department of Revenue of the
12    assignor's intent to sell the remediation site and the
13    amount of the tax credit to be transferred as a portion of
14    the sale. In no event may a credit be transferred to any
15    taxpayer if the taxpayer or a related party would not be
16    eligible under the provisions of subsection (i).
17        (iii) For purposes of this Section, the term "site"
18    shall have the same meaning as under Section 58.2 of the
19    Environmental Protection Act.
20    (o) For each of taxable years during the Compassionate Use
21of Medical Cannabis Pilot Program, a surcharge is imposed on
22all taxpayers on income arising from the sale or exchange of
23capital assets, depreciable business property, real property
24used in the trade or business, and Section 197 intangibles of
25an organization registrant under the Compassionate Use of
26Medical Cannabis Pilot Program Act. The amount of the surcharge

 

 

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1is equal to the amount of federal income tax liability for the
2taxable year attributable to those sales and exchanges. The
3surcharge imposed does not apply if:
4        (1) the medical cannabis cultivation center
5    registration, medical cannabis dispensary registration, or
6    the property of a registration is transferred as a result
7    of any of the following:
8            (A) bankruptcy, a receivership, or a debt
9        adjustment initiated by or against the initial
10        registration or the substantial owners of the initial
11        registration;
12            (B) cancellation, revocation, or termination of
13        any registration by the Illinois Department of Public
14        Health;
15            (C) a determination by the Illinois Department of
16        Public Health that transfer of the registration is in
17        the best interests of Illinois qualifying patients as
18        defined by the Compassionate Use of Medical Cannabis
19        Pilot Program Act;
20            (D) the death of an owner of the equity interest in
21        a registrant;
22            (E) the acquisition of a controlling interest in
23        the stock or substantially all of the assets of a
24        publicly traded company;
25            (F) a transfer by a parent company to a wholly
26        owned subsidiary; or

 

 

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1            (G) the transfer or sale to or by one person to
2        another person where both persons were initial owners
3        of the registration when the registration was issued;
4        or
5        (2) the cannabis cultivation center registration,
6    medical cannabis dispensary registration, or the
7    controlling interest in a registrant's property is
8    transferred in a transaction to lineal descendants in which
9    no gain or loss is recognized or as a result of a
10    transaction in accordance with Section 351 of the Internal
11    Revenue Code in which no gain or loss is recognized.
12(Source: P.A. 100-22, eff. 7-6-17.)
 
13    (35 ILCS 5/901)  (from Ch. 120, par. 9-901)
14    Sec. 901. Collection authority.
15    (a) In general. The Department shall collect the taxes
16imposed by this Act. The Department shall collect certified
17past due child support amounts under Section 2505-650 of the
18Department of Revenue Law of the Civil Administrative Code of
19Illinois. Except as provided in subsections (b), (c), (e), (f),
20(g), and (h) of this Section, money collected pursuant to
21subsections (a) and (b) of Section 201 of this Act shall be
22paid into the General Revenue Fund in the State treasury; money
23collected pursuant to subsections (c) and (d) of Section 201 of
24this Act shall be paid into the Personal Property Tax
25Replacement Fund, a special fund in the State Treasury; and

 

 

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1money collected under Section 2505-650 of the Department of
2Revenue Law of the Civil Administrative Code of Illinois (20
3ILCS 2505/2505-650) shall be paid into the Child Support
4Enforcement Trust Fund, a special fund outside the State
5Treasury, or to the State Disbursement Unit established under
6Section 10-26 of the Illinois Public Aid Code, as directed by
7the Department of Healthcare and Family Services.
8    (b) Local Government Distributive Fund. Beginning August
91, 1969, and continuing through June 30, 1994, the Treasurer
10shall transfer each month from the General Revenue Fund to a
11special fund in the State treasury, to be known as the "Local
12Government Distributive Fund", an amount equal to 1/12 of the
13net revenue realized from the tax imposed by subsections (a)
14and (b) of Section 201 of this Act during the preceding month.
15Beginning July 1, 1994, and continuing through June 30, 1995,
16the Treasurer shall transfer each month from the General
17Revenue Fund to the Local Government Distributive Fund an
18amount equal to 1/11 of the net revenue realized from the tax
19imposed by subsections (a) and (b) of Section 201 of this Act
20during the preceding month. Beginning July 1, 1995 and
21continuing through January 31, 2011, the Treasurer shall
22transfer each month from the General Revenue Fund to the Local
23Government Distributive Fund an amount equal to the net of (i)
241/10 of the net revenue realized from the tax imposed by
25subsections (a) and (b) of Section 201 of the Illinois Income
26Tax Act during the preceding month (ii) minus, beginning July

 

 

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11, 2003 and ending June 30, 2004, $6,666,666, and beginning
2July 1, 2004, zero. Beginning February 1, 2011, and continuing
3through January 31, 2015, the Treasurer shall transfer each
4month from the General Revenue Fund to the Local Government
5Distributive Fund an amount equal to the sum of (i) 6% (10% of
6the ratio of the 3% individual income tax rate prior to 2011 to
7the 5% individual income tax rate after 2010) of the net
8revenue realized from the tax imposed by subsections (a) and
9(b) of Section 201 of this Act upon individuals, trusts, and
10estates during the preceding month and (ii) 6.86% (10% of the
11ratio of the 4.8% corporate income tax rate prior to 2011 to
12the 7% corporate income tax rate after 2010) of the net revenue
13realized from the tax imposed by subsections (a) and (b) of
14Section 201 of this Act upon corporations during the preceding
15month. Beginning February 1, 2015 and continuing through July
1631, 2017, the Treasurer shall transfer each month from the
17General Revenue Fund to the Local Government Distributive Fund
18an amount equal to the sum of (i) 8% (10% of the ratio of the 3%
19individual income tax rate prior to 2011 to the 3.75%
20individual income tax rate after 2014) of the net revenue
21realized from the tax imposed by subsections (a) and (b) of
22Section 201 of this Act upon individuals, trusts, and estates
23during the preceding month and (ii) 9.14% (10% of the ratio of
24the 4.8% corporate income tax rate prior to 2011 to the 5.25%
25corporate income tax rate after 2014) of the net revenue
26realized from the tax imposed by subsections (a) and (b) of

 

 

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1Section 201 of this Act upon corporations during the preceding
2month. Beginning August 1, 2017 and continuing through January
331, 2017 or the last day of the month in which this amendatory
4Act of the 100th General Assembly takes effect, whichever
5occurs later, the Treasurer shall transfer each month from the
6General Revenue Fund to the Local Government Distributive Fund
7an amount equal to the sum of (i) 6.06% (10% of the ratio of the
83% individual income tax rate prior to 2011 to the 4.95%
9individual income tax rate after July 1, 2017) of the net
10revenue realized from the tax imposed by subsections (a) and
11(b) of Section 201 of this Act upon individuals, trusts, and
12estates during the preceding month and (ii) 6.85% (10% of the
13ratio of the 4.8% corporate income tax rate prior to 2011 to
14the 7% corporate income tax rate after July 1, 2017) of the net
15revenue realized from the tax imposed by subsections (a) and
16(b) of Section 201 of this Act upon corporations during the
17preceding month. Beginning on February 1, 2018 or on the first
18day of the first month after this amendatory Act of the 100th
19General Assembly takes effect, whichever occurs later, and
20continuing through January 31, 2025, the Treasurer shall
21deposit into the Local Government Distributive Fund an amount
22equal to the sum of (i) 8% (10% of the ratio of the 3%
23individual income tax rate prior to 2011 to the 3.75%
24individual income tax rate after 2018) of the net revenue
25realized during the month from the tax imposed by subsections
26(a) and (b) of Section 201 of this Act upon individuals,

 

 

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1trusts, and estates and (ii) 9.14% (10% of the ratio of the
24.8% corporate income tax rate prior to 2011 to the 5.25%
3corporate income tax rate after 2018) of the net revenue
4realized during the month from the tax imposed by subsections
5(a) and (b) of Section 201 of this Act upon corporations.
6Beginning on February 1, 2025, the Treasurer shall deposit into
7the Local Government Distributive Fund an amount equal to the
8sum of (i) 9.23% (10% of the ratio of the 3% individual income
9tax rate prior to 2011 to the 3.25% individual income tax rate
10after 2024) of the net revenue realized during the month from
11the tax imposed by subsections (a) and (b) of Section 201 of
12this Act upon individuals, trusts, and estates and (ii) 10% of
13the net revenue realized during the month from the tax imposed
14by subsections (a) and (b) of Section 201 of this Act upon
15corporations. Net revenue realized for a month shall be defined
16as the revenue from the tax imposed by subsections (a) and (b)
17of Section 201 of this Act which is deposited in the General
18Revenue Fund, the Education Assistance Fund, the Income Tax
19Surcharge Local Government Distributive Fund, the Fund for the
20Advancement of Education, and the Commitment to Human Services
21Fund during the month minus the amount paid out of the General
22Revenue Fund in State warrants during that same month as
23refunds to taxpayers for overpayment of liability under the tax
24imposed by subsections (a) and (b) of Section 201 of this Act.
25    Notwithstanding any provision of law to the contrary,
26beginning on July 6, 2017 (the effective date of Public Act

 

 

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1100-23) this amendatory Act of the 100th General Assembly,
2those amounts required under this subsection (b) to be
3transferred by the Treasurer into the Local Government
4Distributive Fund from the General Revenue Fund shall be
5directly deposited into the Local Government Distributive Fund
6as the revenue is realized from the tax imposed by subsections
7(a) and (b) of Section 201 of this Act.
8    For State fiscal year 2018 only, notwithstanding any
9provision of law to the contrary, the total amount of revenue
10and deposits under this Section attributable to revenues
11realized during State fiscal year 2018 shall be reduced by 10%.
12    (c) Deposits Into Income Tax Refund Fund.
13        (1) Beginning on January 1, 1989 and thereafter, the
14    Department shall deposit a percentage of the amounts
15    collected pursuant to subsections (a) and (b)(1), (2), and
16    (3), of Section 201 of this Act into a fund in the State
17    treasury known as the Income Tax Refund Fund. The
18    Department shall deposit 6% of such amounts during the
19    period beginning January 1, 1989 and ending on June 30,
20    1989. Beginning with State fiscal year 1990 and for each
21    fiscal year thereafter, the percentage deposited into the
22    Income Tax Refund Fund during a fiscal year shall be the
23    Annual Percentage. For fiscal years 1999 through 2001, the
24    Annual Percentage shall be 7.1%. For fiscal year 2003, the
25    Annual Percentage shall be 8%. For fiscal year 2004, the
26    Annual Percentage shall be 11.7%. Upon the effective date

 

 

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1    of Public Act 93-839 (July 30, 2004) this amendatory Act of
2    the 93rd General Assembly, the Annual Percentage shall be
3    10% for fiscal year 2005. For fiscal year 2006, the Annual
4    Percentage shall be 9.75%. For fiscal year 2007, the Annual
5    Percentage shall be 9.75%. For fiscal year 2008, the Annual
6    Percentage shall be 7.75%. For fiscal year 2009, the Annual
7    Percentage shall be 9.75%. For fiscal year 2010, the Annual
8    Percentage shall be 9.75%. For fiscal year 2011, the Annual
9    Percentage shall be 8.75%. For fiscal year 2012, the Annual
10    Percentage shall be 8.75%. For fiscal year 2013, the Annual
11    Percentage shall be 9.75%. For fiscal year 2014, the Annual
12    Percentage shall be 9.5%. For fiscal year 2015, the Annual
13    Percentage shall be 10%. For fiscal year 2018, the Annual
14    Percentage shall be 9.8%. For all other fiscal years, the
15    Annual Percentage shall be calculated as a fraction, the
16    numerator of which shall be the amount of refunds approved
17    for payment by the Department during the preceding fiscal
18    year as a result of overpayment of tax liability under
19    subsections (a) and (b)(1), (2), and (3) of Section 201 of
20    this Act plus the amount of such refunds remaining approved
21    but unpaid at the end of the preceding fiscal year, minus
22    the amounts transferred into the Income Tax Refund Fund
23    from the Tobacco Settlement Recovery Fund, and the
24    denominator of which shall be the amounts which will be
25    collected pursuant to subsections (a) and (b)(1), (2), and
26    (3) of Section 201 of this Act during the preceding fiscal

 

 

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1    year; except that in State fiscal year 2002, the Annual
2    Percentage shall in no event exceed 7.6%. The Director of
3    Revenue shall certify the Annual Percentage to the
4    Comptroller on the last business day of the fiscal year
5    immediately preceding the fiscal year for which it is to be
6    effective.
7        (2) Beginning on January 1, 1989 and thereafter, the
8    Department shall deposit a percentage of the amounts
9    collected pursuant to subsections (a) and (b)(6), (7), and
10    (8), (c) and (d) of Section 201 of this Act into a fund in
11    the State treasury known as the Income Tax Refund Fund. The
12    Department shall deposit 18% of such amounts during the
13    period beginning January 1, 1989 and ending on June 30,
14    1989. Beginning with State fiscal year 1990 and for each
15    fiscal year thereafter, the percentage deposited into the
16    Income Tax Refund Fund during a fiscal year shall be the
17    Annual Percentage. For fiscal years 1999, 2000, and 2001,
18    the Annual Percentage shall be 19%. For fiscal year 2003,
19    the Annual Percentage shall be 27%. For fiscal year 2004,
20    the Annual Percentage shall be 32%. Upon the effective date
21    of Public Act 93-839 (July 30, 2004) this amendatory Act of
22    the 93rd General Assembly, the Annual Percentage shall be
23    24% for fiscal year 2005. For fiscal year 2006, the Annual
24    Percentage shall be 20%. For fiscal year 2007, the Annual
25    Percentage shall be 17.5%. For fiscal year 2008, the Annual
26    Percentage shall be 15.5%. For fiscal year 2009, the Annual

 

 

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1    Percentage shall be 17.5%. For fiscal year 2010, the Annual
2    Percentage shall be 17.5%. For fiscal year 2011, the Annual
3    Percentage shall be 17.5%. For fiscal year 2012, the Annual
4    Percentage shall be 17.5%. For fiscal year 2013, the Annual
5    Percentage shall be 14%. For fiscal year 2014, the Annual
6    Percentage shall be 13.4%. For fiscal year 2015, the Annual
7    Percentage shall be 14%. For fiscal year 2018, the Annual
8    Percentage shall be 17.5%. For all other fiscal years, the
9    Annual Percentage shall be calculated as a fraction, the
10    numerator of which shall be the amount of refunds approved
11    for payment by the Department during the preceding fiscal
12    year as a result of overpayment of tax liability under
13    subsections (a) and (b)(6), (7), and (8), (c) and (d) of
14    Section 201 of this Act plus the amount of such refunds
15    remaining approved but unpaid at the end of the preceding
16    fiscal year, and the denominator of which shall be the
17    amounts which will be collected pursuant to subsections (a)
18    and (b)(6), (7), and (8), (c) and (d) of Section 201 of
19    this Act during the preceding fiscal year; except that in
20    State fiscal year 2002, the Annual Percentage shall in no
21    event exceed 23%. The Director of Revenue shall certify the
22    Annual Percentage to the Comptroller on the last business
23    day of the fiscal year immediately preceding the fiscal
24    year for which it is to be effective.
25        (3) The Comptroller shall order transferred and the
26    Treasurer shall transfer from the Tobacco Settlement

 

 

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1    Recovery Fund to the Income Tax Refund Fund (i) $35,000,000
2    in January, 2001, (ii) $35,000,000 in January, 2002, and
3    (iii) $35,000,000 in January, 2003.
4    (d) Expenditures from Income Tax Refund Fund.
5        (1) Beginning January 1, 1989, money in the Income Tax
6    Refund Fund shall be expended exclusively for the purpose
7    of paying refunds resulting from overpayment of tax
8    liability under Section 201 of this Act, for paying rebates
9    under Section 208.1 in the event that the amounts in the
10    Homeowners' Tax Relief Fund are insufficient for that
11    purpose, and for making transfers pursuant to this
12    subsection (d).
13        (2) The Director shall order payment of refunds
14    resulting from overpayment of tax liability under Section
15    201 of this Act from the Income Tax Refund Fund only to the
16    extent that amounts collected pursuant to Section 201 of
17    this Act and transfers pursuant to this subsection (d) and
18    item (3) of subsection (c) have been deposited and retained
19    in the Fund.
20        (3) As soon as possible after the end of each fiscal
21    year, the Director shall order transferred and the State
22    Treasurer and State Comptroller shall transfer from the
23    Income Tax Refund Fund to the Personal Property Tax
24    Replacement Fund an amount, certified by the Director to
25    the Comptroller, equal to the excess of the amount
26    collected pursuant to subsections (c) and (d) of Section

 

 

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1    201 of this Act deposited into the Income Tax Refund Fund
2    during the fiscal year over the amount of refunds resulting
3    from overpayment of tax liability under subsections (c) and
4    (d) of Section 201 of this Act paid from the Income Tax
5    Refund Fund during the fiscal year.
6        (4) As soon as possible after the end of each fiscal
7    year, the Director shall order transferred and the State
8    Treasurer and State Comptroller shall transfer from the
9    Personal Property Tax Replacement Fund to the Income Tax
10    Refund Fund an amount, certified by the Director to the
11    Comptroller, equal to the excess of the amount of refunds
12    resulting from overpayment of tax liability under
13    subsections (c) and (d) of Section 201 of this Act paid
14    from the Income Tax Refund Fund during the fiscal year over
15    the amount collected pursuant to subsections (c) and (d) of
16    Section 201 of this Act deposited into the Income Tax
17    Refund Fund during the fiscal year.
18        (4.5) As soon as possible after the end of fiscal year
19    1999 and of each fiscal year thereafter, the Director shall
20    order transferred and the State Treasurer and State
21    Comptroller shall transfer from the Income Tax Refund Fund
22    to the General Revenue Fund any surplus remaining in the
23    Income Tax Refund Fund as of the end of such fiscal year;
24    excluding for fiscal years 2000, 2001, and 2002 amounts
25    attributable to transfers under item (3) of subsection (c)
26    less refunds resulting from the earned income tax credit.

 

 

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1        (5) This Act shall constitute an irrevocable and
2    continuing appropriation from the Income Tax Refund Fund
3    for the purpose of paying refunds upon the order of the
4    Director in accordance with the provisions of this Section.
5    (e) Deposits into the Education Assistance Fund and the
6Income Tax Surcharge Local Government Distributive Fund. On
7July 1, 1991, and thereafter, of the amounts collected pursuant
8to subsections (a) and (b) of Section 201 of this Act, minus
9deposits into the Income Tax Refund Fund, the Department shall
10deposit 7.3% into the Education Assistance Fund in the State
11Treasury. Beginning July 1, 1991, and continuing through
12January 31, 1993, of the amounts collected pursuant to
13subsections (a) and (b) of Section 201 of the Illinois Income
14Tax Act, minus deposits into the Income Tax Refund Fund, the
15Department shall deposit 3.0% into the Income Tax Surcharge
16Local Government Distributive Fund in the State Treasury.
17Beginning February 1, 1993 and continuing through June 30,
181993, of the amounts collected pursuant to subsections (a) and
19(b) of Section 201 of the Illinois Income Tax Act, minus
20deposits into the Income Tax Refund Fund, the Department shall
21deposit 4.4% into the Income Tax Surcharge Local Government
22Distributive Fund in the State Treasury. Beginning July 1,
231993, and continuing through June 30, 1994, of the amounts
24collected under subsections (a) and (b) of Section 201 of this
25Act, minus deposits into the Income Tax Refund Fund, the
26Department shall deposit 1.475% into the Income Tax Surcharge

 

 

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1Local Government Distributive Fund in the State Treasury.
2    (f) Deposits into the Fund for the Advancement of
3Education. Beginning February 1, 2015, the Department shall
4deposit the following portions of the revenue realized from the
5tax imposed upon individuals, trusts, and estates by
6subsections (a) and (b) of Section 201 of this Act during the
7preceding month, minus deposits into the Income Tax Refund
8Fund, into the Fund for the Advancement of Education:
9        (1) beginning February 1, 2015, and prior to February
10    1, 2025, 1/30; and
11        (2) beginning February 1, 2025, 1/26.
12    If the rate of tax imposed by subsection (a) and (b) of
13Section 201 is reduced pursuant to Section 201.5 of this Act,
14the Department shall not make the deposits required by this
15subsection (f) on or after the effective date of the reduction.
16    (g) Deposits into the Commitment to Human Services Fund.
17Beginning February 1, 2015, the Department shall deposit the
18following portions of the revenue realized from the tax imposed
19upon individuals, trusts, and estates by subsections (a) and
20(b) of Section 201 of this Act during the preceding month,
21minus deposits into the Income Tax Refund Fund, into the
22Commitment to Human Services Fund:
23        (1) beginning February 1, 2015, and prior to February
24    1, 2025, 1/30; and
25        (2) beginning February 1, 2025, 1/26.
26    If the rate of tax imposed by subsection (a) and (b) of

 

 

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1Section 201 is reduced pursuant to Section 201.5 of this Act,
2the Department shall not make the deposits required by this
3subsection (g) on or after the effective date of the reduction.
4    (h) Deposits into the Tax Compliance and Administration
5Fund. Beginning on the first day of the first calendar month to
6occur on or after August 26, 2014 (the effective date of Public
7Act 98-1098), each month the Department shall pay into the Tax
8Compliance and Administration Fund, to be used, subject to
9appropriation, to fund additional auditors and compliance
10personnel at the Department, an amount equal to 1/12 of 5% of
11the cash receipts collected during the preceding fiscal year by
12the Audit Bureau of the Department from the tax imposed by
13subsections (a), (b), (c), and (d) of Section 201 of this Act,
14net of deposits into the Income Tax Refund Fund made from those
15cash receipts.
16(Source: P.A. 99-78, eff. 7-20-15; 100-22, eff. 7-6-17; 100-23,
17eff. 7-6-17; revised 8-3-17.)
 
18    Section 99. Effective date. This Act takes effect upon
19becoming law.