99TH GENERAL ASSEMBLY
State of Illinois
2015 and 2016
HB1555

 

Introduced , by Rep. Dwight Kay

 

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, for estates of persons dying on or after the effective date of the amendatory Act, the amount of the Illinois estate tax shall be the product of (i) the sum of (A) 5.5% of the first $4,700,000 of the Illinois base estate and (B) 9% of the Illinois base estate in excess of $4,700,000, multiplied by the Illinois taxable percentage. Defines Illinois base estate as the federal gross estate, subject to certain modifications. Defines "Illinois taxable percentage" as the total value of transfers with situs in Illinois divided by the total value of all transferred property. Provides that the amount of the Illinois generation-skipping transfer tax shall be 7.5% of the value of the transferred property as determined for purposes of the federal generation-skipping transfer tax. Removes provisions providing for a separate marital deduction for qualified terminable interest property for Illinois estate tax purposes. Effective immediately.


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FISCAL NOTE ACT MAY APPLY

 

 

A BILL FOR

 

HB1555LRB099 03482 HLH 23490 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 gift tax" means the tax due with respect to a
13taxable transfer under Chapter 12 of the Internal Revenue Code.
14    "Federal generation-skipping transfer tax" means the tax
15due to the United States with respect to a taxable transfer
16under Chapter 13 of the Internal Revenue Code.
17    "Federal return" means the federal estate tax return with
18respect to the federal estate tax and means the federal
19generation-skipping transfer tax return with respect to the
20federal generation-skipping transfer tax.
21    "Illinois base estate" means the federal gross estate as
22determined by Section 2031, et. seq., of the Internal Revenue
23Code, less all deductions allowed in determining the federal

 

 

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1taxable amount pursuant to Sections 2051 through 2057 of the
2Internal Revenue Code (and without any deduction for State
3death taxes under Section 2058 of the Internal Revenue Code),
4less the excess of (1) the applicable exclusion amount, as
5determined pursuant to Internal Revenue Code Section
62010(c)(2), over (2) the amount of the applicable exclusion
7amount applied to or that could have been applied to taxable
8gifts, as defined in Section 2503 of the Internal Revenue Code,
9for purposes of the federal gift tax.
10    "Federal transfer tax" means the federal estate tax or the
11federal generation-skipping transfer tax.
12    "Illinois estate tax" means the tax due to this State with
13respect to a taxable transfer.
14    "Illinois generation-skipping transfer tax" means the tax
15due to this State with respect to a taxable transfer that gives
16rise to a federal generation-skipping transfer tax.
17    "Illinois transfer tax" means the Illinois estate tax or
18the Illinois generation-skipping transfer tax.
19    "Illinois taxable percentage" means the total value of
20transfers with situs in Illinois divided by the total value of
21all transferred property.
22    "Internal Revenue Code" means, unless otherwise provided,
23the Internal Revenue Code of 1986, as amended from time to
24time.
25    "Non-resident trust" means a trust that is not a resident
26of this State for purposes of the Illinois Income Tax Act, as

 

 

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1amended from time to time.
2    "Other transfer tax" means the estate tax,
3generation-skipping tax, inheritance tax, and any other tax
4imposed by any state or taxing jurisdiction other than the
5United States and the State of Illinois on or with respect to
6the transfer, inheritance, or gift of property.
7    "Person" means and includes any individual, trust, estate,
8partnership, association, company or corporation.
9    "Qualified heir" means a qualified heir as defined in
10Section 2032A(e)(1) of the Internal Revenue Code.
11    "Resident trust" means a trust that is a resident of this
12State for purposes of the Illinois Income Tax Act, as amended
13from time to time.
14    "State" means any state, territory or possession of the
15United States and the District of Columbia.
16    "State tax credit" means:
17    (a) For persons dying on or after January 1, 2003 and
18through December 31, 2005, an amount equal to the full credit
19calculable under Section 2011 or Section 2604 of the Internal
20Revenue Code as the credit would have been computed and allowed
21under the Internal Revenue Code as in effect on December 31,
222001, without the reduction in the State Death Tax Credit as
23provided in Section 2011(b)(2) or the termination of the State
24Death Tax Credit as provided in Section 2011(f) as enacted by
25the Economic Growth and Tax Relief Reconciliation Act of 2001,
26but recognizing the increased applicable exclusion amount

 

 

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1through December 31, 2005.
2    (b) For persons dying after December 31, 2005 and on or
3before December 31, 2009, and for persons dying after December
431, 2010 and prior to the effective date of this amendatory Act
5of the 99th General Assembly, an amount equal to the full
6credit calculable under Section 2011 or 2604 of the Internal
7Revenue Code as the credit would have been computed and allowed
8under the Internal Revenue Code as in effect on December 31,
92001, without the reduction in the State Death Tax Credit as
10provided in Section 2011(b)(2) or the termination of the State
11Death Tax Credit as provided in Section 2011(f) as enacted by
12the Economic Growth and Tax Relief Reconciliation Act of 2001,
13but recognizing the exclusion amount of only (i) $2,000,000 for
14persons dying prior to January 1, 2012, (ii) $3,500,000 for
15persons dying on or after January 1, 2012 and prior to January
161, 2013, and (iii) $4,000,000 for persons dying on or after
17January 1, 2013, and with reduction to the adjusted taxable
18estate for any qualified terminable interest property election
19as defined in subsection (b-1) of this Section.
20    (b-1) (Blank). The person required to file the Illinois
21return may elect on a timely filed Illinois return a marital
22deduction for qualified terminable interest property under
23Section 2056(b)(7) of the Internal Revenue Code for purposes of
24the Illinois estate tax that is separate and independent of any
25qualified terminable interest property election for federal
26estate tax purposes. For purposes of the Illinois estate tax,

 

 

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

 

 

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1    result of a taxable distribution as defined in Section
2    2612(b) of the Internal Revenue Code, the taxable amount
3    determined under Section 2621(a) of the Internal Revenue
4    Code.
5        (4) With respect to an event which causes the
6    imposition of an additional estate tax under Section
7    2032A(c) of the Internal Revenue Code, the qualified real
8    property that was disposed of or which ceased to be used
9    for the qualified use, within the meaning of Section
10    2032A(c)(1) of the Internal Revenue Code.
11    "Trust" includes a trust as defined in Section 2652(b)(1)
12of the Internal Revenue Code.
13(Source: P.A. 96-789, eff. 9-8-09; 96-1496, eff. 1-13-11;
1497-636, eff. 6-1-12.)
 
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
899th 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) On estates of persons dying on or after the effective
16date of this amendatory Act of the 99th General Assembly, the
17amount of the Illinois estate tax shall be the product of (i)
18the sum of (A) 5.5% of the first $4,700,000 of the Illinois
19base estate and (B) 9% of the Illinois base estate in excess of
20$4,700,000, multiplied by the Illinois taxable percentage.
21(Source: P.A. 93-30, eff. 6-20-03; 94-419, eff. 8-2-05.)
 
22    (35 ILCS 405/4)  (from Ch. 120, par. 405A-4)
23    Sec. 4. Illinois generation-skipping transfer tax.
24    (a) Imposition of tax. An Illinois generation-skipping
25transfer tax is imposed on every taxable transfer resulting in

 

 

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1federal generation-skipping transfer tax involving transferred
2property having a tax situs within the State of Illinois.
3    (b) Amount of tax. For taxable transfers occurring prior to
4the effective date of this amendatory Act of the 99th General
5Assembly, the The amount of the Illinois generation-skipping
6transfer tax shall be the maximum state tax credit allowable
7with respect to the taxable transfer, reduced by the lesser of:
8        (1) the amount of the state tax credit paid to any
9    other state or states; and
10        (2) the amount determined by multiplying the maximum
11    state tax credit allowable with respect to the taxable
12    transfer by the percentage which the gross value of the
13    transferred property not having a tax situs in Illinois
14    bears to the gross value of the total transferred property.
15    (c) For taxable transfers occurring on or after the
16effective date of this amendatory Act of the 99th General
17Assembly, the amount of the Illinois generation-skipping
18transfer tax shall be 7.5% of the value of the transferred
19property as determined for purposes of the federal
20generation-skipping transfer tax.
21(Source: P.A. 86-737.)
 
22    Section 99. Effective date. This Act takes effect upon
23becoming law.