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1 | AN ACT concerning education.
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2 | Be it enacted by the People of the State of Illinois,
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3 | represented in the General Assembly:
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4 | Section 1. Short title. This Act may be cited as the | ||||||||||||||||||||||||||||||
5 | Opportunity Scholarship Act. | ||||||||||||||||||||||||||||||
6 | Section 5. Definitions. As used in this Act: | ||||||||||||||||||||||||||||||
7 | "Low-performing school" means a public school in Cook | ||||||||||||||||||||||||||||||
8 | County that enrolls students in any of grades kindergarten | ||||||||||||||||||||||||||||||
9 | through 12 and that is ranked within the lowest 10% of schools | ||||||||||||||||||||||||||||||
10 | in that county in terms of the percentage of students meeting | ||||||||||||||||||||||||||||||
11 | or exceeding standards on the Illinois Standards Achievement | ||||||||||||||||||||||||||||||
12 | Test. | ||||||||||||||||||||||||||||||
13 | "Nonpublic school" means any State-recognized, nonpublic | ||||||||||||||||||||||||||||||
14 | elementary school in Cook County that elects to participate in | ||||||||||||||||||||||||||||||
15 | the Opportunity Scholarship Program under this Act and does not | ||||||||||||||||||||||||||||||
16 | discriminate on the basis of race, color, or national origin | ||||||||||||||||||||||||||||||
17 | under Title VI of the Civil Rights Act of 1964 and attendance | ||||||||||||||||||||||||||||||
18 | at which satisfies the requirements of Section 26-1 of the | ||||||||||||||||||||||||||||||
19 | School Code, except that nothing in Section 26-1 shall be | ||||||||||||||||||||||||||||||
20 | construed to require a child to attend any particular nonpublic | ||||||||||||||||||||||||||||||
21 | school. | ||||||||||||||||||||||||||||||
22 | "Overcrowded school" means a public school in Cook County | ||||||||||||||||||||||||||||||
23 | that (i) enrolls students in any of grades kindergarten through |
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1 | 12; (ii) has a percentage of low-income students of 70% or | ||||||
2 | more, as identified in the most recently available school | ||||||
3 | report card published by the State Board of Education; and | ||||||
4 | (iii) is determined by the State Board of Education to be in | ||||||
5 | the most severely overcrowded 5% of schools in the county. On | ||||||
6 | or before November 1 of each year, the State Board of Education | ||||||
7 | shall file a report with the General Assembly on which schools | ||||||
8 | in the county meet the definition of "overcrowded school". | ||||||
9 | "Qualifying pupil" means an individual who meets the | ||||||
10 | following qualifications: | ||||||
11 | (1) is a resident of Cook County; | ||||||
12 | (2) is enrolled in any of grades kindergarten through | ||||||
13 | 11 in a low-performing school or an overcrowded school or | ||||||
14 | would enter kindergarten in a low-performing school or | ||||||
15 | overcrowded school during the school year for which a | ||||||
16 | scholarship is sought; and | ||||||
17 | (3) during the school year for which a scholarship is | ||||||
18 | sought, is a full-time pupil enrolled in a kindergarten | ||||||
19 | through 12th grade education program. | ||||||
20 | "Scholarship" means an Opportunity Scholarship issued | ||||||
21 | under this Act. | ||||||
22 | Section 10. Establishment of program. There is established | ||||||
23 | the Opportunity Scholarship Program. Under the program, a | ||||||
24 | custodian of a qualifying pupil is entitled to a scholarship at | ||||||
25 | any participating nonpublic school in which the qualifying |
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1 | pupil is enrolled. However, the issuance of scholarships is | ||||||
2 | contingent upon funds being available in the Opportunity | ||||||
3 | Scholarship Fund for such purpose. | ||||||
4 | A qualifying pupil is entitled to enroll at and attend any | ||||||
5 | participating nonpublic school of his or her choice. | ||||||
6 | Section 15. Notification of scholarships. The principal of | ||||||
7 | each low-performing school and of each overcrowded school in | ||||||
8 | Cook County shall notify custodians of qualifying pupils that | ||||||
9 | scholarships under this Act are available for the next school | ||||||
10 | year. Notification shall occur in January of each school year. | ||||||
11 | Section 20. Request for scholarship. A custodian who | ||||||
12 | applies in accordance with procedures established by the State | ||||||
13 | Board of Education shall, subject to the availability of funds, | ||||||
14 | receive a scholarship for each qualifying pupil enrolled in a | ||||||
15 | participating nonpublic school under this Act within the dollar | ||||||
16 | limits set out in Section 30 of this Act. The procedure shall | ||||||
17 | require application for the scholarship, with documentation as | ||||||
18 | to eligibility, between March 1 and May 1 prior to the school | ||||||
19 | year in which the scholarship is to be used. | ||||||
20 | Section 25. Issuance and payment of scholarship. A | ||||||
21 | scholarship may only be issued to a custodian who has made | ||||||
22 | proper application pursuant to Section 20 of this Act. The | ||||||
23 | custodian shall present the scholarship for each qualifying |
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1 | pupil to a participating nonpublic school of his or her choice | ||||||
2 | as payment for qualified education expenses. Upon presentment, | ||||||
3 | the State Board of Education shall honor the scholarship and, | ||||||
4 | as issuer of the instrument, pay the participating school in | ||||||
5 | accordance with procedures established by the State Board of | ||||||
6 | Education. The procedures shall require all of the following: | ||||||
7 | (1) that the applying custodian be notified of the | ||||||
8 | scholarship award by August 1 of the school year in which | ||||||
9 | the scholarship is to be used; | ||||||
10 | (2) that the scholarship instrument be issued to the | ||||||
11 | custodian no later than September 15 of the school year in | ||||||
12 | which the scholarship is to be used; | ||||||
13 | (3) that the custodian present the scholarship | ||||||
14 | instrument to the participating school no later than | ||||||
15 | October 1 of the school year in which the scholarship is to | ||||||
16 | be used; | ||||||
17 | (4) that the participating school present the | ||||||
18 | scholarship instrument, with proof of service to the | ||||||
19 | custodian of the qualifying pupil, to the State Board of | ||||||
20 | Education no later than October 31 of the school year in | ||||||
21 | which the scholarship is to be used; | ||||||
22 | (5) that the State Board of Education shall honor the | ||||||
23 | scholarship instrument and as issuer pay the participating | ||||||
24 | school no later than December 31 of the school year in | ||||||
25 | which the scholarship is to be used; | ||||||
26 | (6) that participating schools must not be required to |
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1 | accept scholarships as full payment for services, but | ||||||
2 | neither shall they charge scholarship pupils tuition or any | ||||||
3 | other educational expenses at a higher rate than other | ||||||
4 | pupils; and | ||||||
5 | (7) that if a student attending a nonpublic school | ||||||
6 | under the Opportunity Scholarship Program is expelled or | ||||||
7 | withdraws from the nonpublic school or moves out of the | ||||||
8 | boundaries of Cook County before the State Board of | ||||||
9 | Education has honored the scholarship of the school, then | ||||||
10 | the State Board of Education shall pay the corresponding | ||||||
11 | prorated portion of the scholarship amount to the nonpublic | ||||||
12 | school; and that if the State Board of Education has paid | ||||||
13 | the scholarship amount to the nonpublic school and the | ||||||
14 | pupil is expelled, withdraws, or moves out of the | ||||||
15 | boundaries of Cook County, then the nonpublic school shall | ||||||
16 | refund the corresponding prorated portion of the | ||||||
17 | scholarship to the State Board of Education. Any funds | ||||||
18 | returned to the State Board of Education must be deposited | ||||||
19 | into the Opportunity Scholarship Fund. | ||||||
20 | Section 30. Amount of scholarship. An Opportunity | ||||||
21 | Scholarship for qualified education expenses incurred through | ||||||
22 | participating nonpublic schools during a school year shall be | ||||||
23 | for the lesser of (i) the amount of the portion of the | ||||||
24 | foundation level of support, on a per pupil basis, funded by | ||||||
25 | this State pursuant to subsection (B) of Section 18-8.05 of the |
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1 | School Code for the previous fiscal year, plus the amount equal | ||||||
2 | to the total supplemental general State aid grant awarded to a | ||||||
3 | public school in Cook County pursuant to subsection (H) of | ||||||
4 | Section 18-8.05 of the School Code for the previous fiscal | ||||||
5 | year, divided by the total average daily attendance used in the | ||||||
6 | calculation of general State aid for the public school in Cook | ||||||
7 | County for the previous fiscal year, or (ii) the actual | ||||||
8 | qualified education expenses related to the qualifying pupil's | ||||||
9 | enrollment.
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10 | Section 35. Renewal of scholarship. Opportunity | ||||||
11 | Scholarships are renewable every year through grade 8 so long | ||||||
12 | as the pupil continues to reside in Cook County and the | ||||||
13 | nonpublic school elects to continue participating in the | ||||||
14 | Opportunity Scholarship Program. | ||||||
15 | Section 40. Assessment. All pupils receiving services | ||||||
16 | obtained through Opportunity Scholarships must be assessed | ||||||
17 | annually in the same manner as this State's public school | ||||||
18 | students. The State Board of Education may adopt rules with | ||||||
19 | respect to the assessment of such pupils, which may include, | ||||||
20 | but are not limited to, rules pertaining to test security, test | ||||||
21 | administration and location, and reporting procedures. | ||||||
22 | Section 45. Longitudinal data system. Nonpublic schools | ||||||
23 | participating in this Act must participate in the longitudinal |
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1 | data system established under the P-20 Longitudinal Education | ||||||
2 | Data System Act by disclosing data to the State Board of | ||||||
3 | Education for those students attending a nonpublic school on an | ||||||
4 | Opportunity Scholarship issued under this Act. | ||||||
5 | Section 50. Reporting attendance. Nonpublic schools | ||||||
6 | participating in the Opportunity Scholarship Program must | ||||||
7 | report the attendance of students with scholarships to the | ||||||
8 | State Board of Education in the manner requested by the public | ||||||
9 | school district the student would attend without the | ||||||
10 | scholarship. Students enrolled in nonpublic schools under a | ||||||
11 | scholarship must not be considered enrolled in a Cook County | ||||||
12 | public school for any purpose.
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13 | Section 55. Nonpublic school student. For the purposes of | ||||||
14 | this Act, students receiving an Opportunity Scholarship are | ||||||
15 | considered nonpublic school students who have been voluntarily | ||||||
16 | placed in a private setting by the parent or guardian. | ||||||
17 | Section 60. Not base income. The amount of any scholarship | ||||||
18 | redeemed under this Act shall not be considered base income | ||||||
19 | under subsection (a) of Section 203 of the Illinois Income Tax | ||||||
20 | Act and shall not be taxable for Illinois income tax purposes. | ||||||
21 | Section 65. Opportunity Scholarship Fund. The Opportunity | ||||||
22 | Scholarship Fund is created as a special fund in the State |
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1 | treasury. Contributions from individuals and businesses may be | ||||||
2 | made to and deposited into the Fund. All money in the Fund | ||||||
3 | shall be used, subject to appropriation, by the State Board of | ||||||
4 | Education for the purposes of this Act. | ||||||
5 | Section 90. Report and expansion. On or before December 31, | ||||||
6 | 2017, the State Board of Education shall submit a report to the | ||||||
7 | General Assembly reviewing the current status of the | ||||||
8 | Opportunity Scholarship Program and shall publish this report | ||||||
9 | on its Internet website. This report shall include without | ||||||
10 | limitation the number of qualifying pupils receiving a | ||||||
11 | scholarship, the names of the schools from which and to which | ||||||
12 | pupils transferred, the financial ramifications of the | ||||||
13 | program, and the results of pupil assessments. In its report, | ||||||
14 | the State Board of Education shall assess whether the program | ||||||
15 | has been financially and academically beneficial and shall make | ||||||
16 | a recommendation on whether the program should be expanded to | ||||||
17 | other schools in Cook County or to other areas of this State. | ||||||
18 | This Section is repealed on December 31, 2018. | ||||||
19 | Section 95. Penalties. It shall be a Class 3 felony to use | ||||||
20 | or attempt to use a scholarship under this Act for any purpose | ||||||
21 | other than those permitted by this Act. It shall also be a | ||||||
22 | Class 3 felony for any person, with intent to defraud, to | ||||||
23 | knowingly forge, alter, or misrepresent information on a | ||||||
24 | scholarship application or on any documents submitted in |
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1 | application for a scholarship, to deliver any such document | ||||||
2 | knowing it to have been thus forged, altered, or based on | ||||||
3 | misrepresentation, or to possess, with intent to issue or | ||||||
4 | deliver, any such document knowing it to have been thus forged, | ||||||
5 | altered, or based on misrepresentation. | ||||||
6 | Section 100. Rules. The State Board of Education shall | ||||||
7 | adopt rules to implement this Act. The creation of the | ||||||
8 | Opportunity Scholarship Program does not expand the regulatory | ||||||
9 | authority of this State, its officers, or any school district | ||||||
10 | to impose any additional regulation of nonpublic schools beyond | ||||||
11 | those reasonably necessary to enforce the requirements of the | ||||||
12 | program.
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13 | Section 900. The State Finance Act is amended by adding | ||||||
14 | Section 5.866 as follows: | ||||||
15 | (30 ILCS 105/5.866 new) | ||||||
16 | Sec. 5.866. The Opportunity Scholarship Fund. | ||||||
17 | Section 905. The Illinois Income Tax Act is amended by | ||||||
18 | changing Section 203 and by adding Section 224 as follows: | ||||||
19 | (35 ILCS 5/203) (from Ch. 120, par. 2-203) | ||||||
20 | Sec. 203. Base income defined. | ||||||
21 | (a) Individuals. |
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1 | (1) In general. In the case of an individual, base | ||||||
2 | income means an
amount equal to the taxpayer's adjusted | ||||||
3 | gross income for the taxable
year as modified by paragraph | ||||||
4 | (2). | ||||||
5 | (2) Modifications. The adjusted gross income referred | ||||||
6 | to in
paragraph (1) shall be modified by adding thereto the | ||||||
7 | sum of the
following amounts: | ||||||
8 | (A) An amount equal to all amounts paid or accrued | ||||||
9 | to the taxpayer
as interest or dividends during the | ||||||
10 | taxable year to the extent excluded
from gross income | ||||||
11 | in the computation of adjusted gross income, except | ||||||
12 | stock
dividends of qualified public utilities | ||||||
13 | described in Section 305(e) of the
Internal Revenue | ||||||
14 | Code; | ||||||
15 | (B) An amount equal to the amount of tax imposed by | ||||||
16 | this Act to the
extent deducted from gross income in | ||||||
17 | the computation of adjusted gross
income for the | ||||||
18 | taxable year; | ||||||
19 | (C) An amount equal to the amount received during | ||||||
20 | the taxable year
as a recovery or refund of real | ||||||
21 | property taxes paid with respect to the
taxpayer's | ||||||
22 | principal residence under the Revenue Act of
1939 and | ||||||
23 | for which a deduction was previously taken under | ||||||
24 | subparagraph (L) of
this paragraph (2) prior to July 1, | ||||||
25 | 1991, the retrospective application date of
Article 4 | ||||||
26 | of Public Act 87-17. In the case of multi-unit or |
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1 | multi-use
structures and farm dwellings, the taxes on | ||||||
2 | the taxpayer's principal residence
shall be that | ||||||
3 | portion of the total taxes for the entire property | ||||||
4 | which is
attributable to such principal residence; | ||||||
5 | (D) An amount equal to the amount of the capital | ||||||
6 | gain deduction
allowable under the Internal Revenue | ||||||
7 | Code, to the extent deducted from gross
income in the | ||||||
8 | computation of adjusted gross income; | ||||||
9 | (D-5) An amount, to the extent not included in | ||||||
10 | adjusted gross income,
equal to the amount of money | ||||||
11 | withdrawn by the taxpayer in the taxable year from
a | ||||||
12 | medical care savings account and the interest earned on | ||||||
13 | the account in the
taxable year of a withdrawal | ||||||
14 | pursuant to subsection (b) of Section 20 of the
Medical | ||||||
15 | Care Savings Account Act or subsection (b) of Section | ||||||
16 | 20 of the
Medical Care Savings Account Act of 2000; | ||||||
17 | (D-10) For taxable years ending after December 31, | ||||||
18 | 1997, an
amount equal to any eligible remediation costs | ||||||
19 | that the individual
deducted in computing adjusted | ||||||
20 | gross income and for which the
individual claims a | ||||||
21 | credit under subsection (l) of Section 201; | ||||||
22 | (D-15) For taxable years 2001 and thereafter, an | ||||||
23 | amount equal to the
bonus depreciation deduction taken | ||||||
24 | on the taxpayer's federal income tax return for the | ||||||
25 | taxable
year under subsection (k) of Section 168 of the | ||||||
26 | Internal Revenue Code; |
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1 | (D-16) If the taxpayer sells, transfers, abandons, | ||||||
2 | or otherwise disposes of property for which the | ||||||
3 | taxpayer was required in any taxable year to
make an | ||||||
4 | addition modification under subparagraph (D-15), then | ||||||
5 | an amount equal
to the aggregate amount of the | ||||||
6 | deductions taken in all taxable
years under | ||||||
7 | subparagraph (Z) with respect to that property. | ||||||
8 | If the taxpayer continues to own property through | ||||||
9 | the last day of the last tax year for which the | ||||||
10 | taxpayer may claim a depreciation deduction for | ||||||
11 | federal income tax purposes and for which the taxpayer | ||||||
12 | was allowed in any taxable year to make a subtraction | ||||||
13 | modification under subparagraph (Z), then an amount | ||||||
14 | equal to that subtraction modification.
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15 | The taxpayer is required to make the addition | ||||||
16 | modification under this
subparagraph
only once with | ||||||
17 | respect to any one piece of property; | ||||||
18 | (D-17) An amount equal to the amount otherwise | ||||||
19 | allowed as a deduction in computing base income for | ||||||
20 | interest paid, accrued, or incurred, directly or | ||||||
21 | indirectly, (i) for taxable years ending on or after | ||||||
22 | December 31, 2004, to a foreign person who would be a | ||||||
23 | member of the same unitary business group but for the | ||||||
24 | fact that foreign person's business activity outside | ||||||
25 | the United States is 80% or more of the foreign | ||||||
26 | person's total business activity and (ii) for taxable |
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1 | years ending on or after December 31, 2008, to a person | ||||||
2 | who would be a member of the same unitary business | ||||||
3 | group but for the fact that the person is prohibited | ||||||
4 | under Section 1501(a)(27) from being included in the | ||||||
5 | unitary business group because he or she is ordinarily | ||||||
6 | required to apportion business income under different | ||||||
7 | subsections of Section 304. The addition modification | ||||||
8 | required by this subparagraph shall be reduced to the | ||||||
9 | extent that dividends were included in base income of | ||||||
10 | the unitary group for the same taxable year and | ||||||
11 | received by the taxpayer or by a member of the | ||||||
12 | taxpayer's unitary business group (including amounts | ||||||
13 | included in gross income under Sections 951 through 964 | ||||||
14 | of the Internal Revenue Code and amounts included in | ||||||
15 | gross income under Section 78 of the Internal Revenue | ||||||
16 | Code) with respect to the stock of the same person to | ||||||
17 | whom the interest was paid, accrued, or incurred. | ||||||
18 | This paragraph shall not apply to the following:
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19 | (i) an item of interest paid, accrued, or | ||||||
20 | incurred, directly or indirectly, to a person who | ||||||
21 | is subject in a foreign country or state, other | ||||||
22 | than a state which requires mandatory unitary | ||||||
23 | reporting, to a tax on or measured by net income | ||||||
24 | with respect to such interest; or | ||||||
25 | (ii) an item of interest paid, accrued, or | ||||||
26 | incurred, directly or indirectly, to a person if |
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1 | the taxpayer can establish, based on a | ||||||
2 | preponderance of the evidence, both of the | ||||||
3 | following: | ||||||
4 | (a) the person, during the same taxable | ||||||
5 | year, paid, accrued, or incurred, the interest | ||||||
6 | to a person that is not a related member, and | ||||||
7 | (b) the transaction giving rise to the | ||||||
8 | interest expense between the taxpayer and the | ||||||
9 | person did not have as a principal purpose the | ||||||
10 | avoidance of Illinois income tax, and is paid | ||||||
11 | pursuant to a contract or agreement that | ||||||
12 | reflects an arm's-length interest rate and | ||||||
13 | terms; or
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14 | (iii) the taxpayer can establish, based on | ||||||
15 | clear and convincing evidence, that the interest | ||||||
16 | paid, accrued, or incurred relates to a contract or | ||||||
17 | agreement entered into at arm's-length rates and | ||||||
18 | terms and the principal purpose for the payment is | ||||||
19 | not federal or Illinois tax avoidance; or
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20 | (iv) an item of interest paid, accrued, or | ||||||
21 | incurred, directly or indirectly, to a person if | ||||||
22 | the taxpayer establishes by clear and convincing | ||||||
23 | evidence that the adjustments are unreasonable; or | ||||||
24 | if the taxpayer and the Director agree in writing | ||||||
25 | to the application or use of an alternative method | ||||||
26 | of apportionment under Section 304(f).
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1 | Nothing in this subsection shall preclude the | ||||||
2 | Director from making any other adjustment | ||||||
3 | otherwise allowed under Section 404 of this Act for | ||||||
4 | any tax year beginning after the effective date of | ||||||
5 | this amendment provided such adjustment is made | ||||||
6 | pursuant to regulation adopted by the Department | ||||||
7 | and such regulations provide methods and standards | ||||||
8 | by which the Department will utilize its authority | ||||||
9 | under Section 404 of this Act;
| ||||||
10 | (D-18) An amount equal to the amount of intangible | ||||||
11 | expenses and costs otherwise allowed as a deduction in | ||||||
12 | computing base income, and that were paid, accrued, or | ||||||
13 | incurred, directly or indirectly, (i) for taxable | ||||||
14 | years ending on or after December 31, 2004, to a | ||||||
15 | foreign person who would be a member of the same | ||||||
16 | unitary business group but for the fact that the | ||||||
17 | foreign person's business activity outside the United | ||||||
18 | States is 80% or more of that person's total business | ||||||
19 | activity and (ii) for taxable years ending on or after | ||||||
20 | December 31, 2008, to a person who would be a member of | ||||||
21 | the same unitary business group but for the fact that | ||||||
22 | the person is prohibited under Section 1501(a)(27) | ||||||
23 | from being included in the unitary business group | ||||||
24 | because he or she is ordinarily required to apportion | ||||||
25 | business income under different subsections of Section | ||||||
26 | 304. The addition modification required by this |
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1 | subparagraph shall be reduced to the extent that | ||||||
2 | dividends were included in base income of the unitary | ||||||
3 | group for the same taxable year and received by the | ||||||
4 | taxpayer or by a member of the taxpayer's unitary | ||||||
5 | business group (including amounts included in gross | ||||||
6 | income under Sections 951 through 964 of the Internal | ||||||
7 | Revenue Code and amounts included in gross income under | ||||||
8 | Section 78 of the Internal Revenue Code) with respect | ||||||
9 | to the stock of the same person to whom the intangible | ||||||
10 | expenses and costs were directly or indirectly paid, | ||||||
11 | incurred, or accrued. The preceding sentence does not | ||||||
12 | apply to the extent that the same dividends caused a | ||||||
13 | reduction to the addition modification required under | ||||||
14 | Section 203(a)(2)(D-17) of this Act. As used in this | ||||||
15 | subparagraph, the term "intangible expenses and costs" | ||||||
16 | includes (1) expenses, losses, and costs for, or | ||||||
17 | related to, the direct or indirect acquisition, use, | ||||||
18 | maintenance or management, ownership, sale, exchange, | ||||||
19 | or any other disposition of intangible property; (2) | ||||||
20 | losses incurred, directly or indirectly, from | ||||||
21 | factoring transactions or discounting transactions; | ||||||
22 | (3) royalty, patent, technical, and copyright fees; | ||||||
23 | (4) licensing fees; and (5) other similar expenses and | ||||||
24 | costs.
For purposes of this subparagraph, "intangible | ||||||
25 | property" includes patents, patent applications, trade | ||||||
26 | names, trademarks, service marks, copyrights, mask |
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1 | works, trade secrets, and similar types of intangible | ||||||
2 | assets. | ||||||
3 | This paragraph shall not apply to the following: | ||||||
4 | (i) any item of intangible expenses or costs | ||||||
5 | paid, accrued, or incurred, directly or | ||||||
6 | indirectly, from a transaction with a person who is | ||||||
7 | subject in a foreign country or state, other than a | ||||||
8 | state which requires mandatory unitary reporting, | ||||||
9 | to a tax on or measured by net income with respect | ||||||
10 | to such item; or | ||||||
11 | (ii) any item of intangible expense or cost | ||||||
12 | paid, accrued, or incurred, directly or | ||||||
13 | indirectly, if the taxpayer can establish, based | ||||||
14 | on a preponderance of the evidence, both of the | ||||||
15 | following: | ||||||
16 | (a) the person during the same taxable | ||||||
17 | year paid, accrued, or incurred, the | ||||||
18 | intangible expense or cost to a person that is | ||||||
19 | not a related member, and | ||||||
20 | (b) the transaction giving rise to the | ||||||
21 | intangible expense or cost between the | ||||||
22 | taxpayer and the person did not have as a | ||||||
23 | principal purpose the avoidance of Illinois | ||||||
24 | income tax, and is paid pursuant to a contract | ||||||
25 | or agreement that reflects arm's-length terms; | ||||||
26 | or |
| |||||||
| |||||||
1 | (iii) any item of intangible expense or cost | ||||||
2 | paid, accrued, or incurred, directly or | ||||||
3 | indirectly, from a transaction with a person if the | ||||||
4 | taxpayer establishes by clear and convincing | ||||||
5 | evidence, that the adjustments are unreasonable; | ||||||
6 | or if the taxpayer and the Director agree in | ||||||
7 | writing to the application or use of an alternative | ||||||
8 | method of apportionment under Section 304(f);
| ||||||
9 | Nothing in this subsection shall preclude the | ||||||
10 | Director from making any other adjustment | ||||||
11 | otherwise allowed under Section 404 of this Act for | ||||||
12 | any tax year beginning after the effective date of | ||||||
13 | this amendment provided such adjustment is made | ||||||
14 | pursuant to regulation adopted by the Department | ||||||
15 | and such regulations provide methods and standards | ||||||
16 | by which the Department will utilize its authority | ||||||
17 | under Section 404 of this Act;
| ||||||
18 | (D-19) For taxable years ending on or after | ||||||
19 | December 31, 2008, an amount equal to the amount of | ||||||
20 | insurance premium expenses and costs otherwise allowed | ||||||
21 | as a deduction in computing base income, and that were | ||||||
22 | paid, accrued, or incurred, directly or indirectly, to | ||||||
23 | a person who would be a member of the same unitary | ||||||
24 | business group but for the fact that the person is | ||||||
25 | prohibited under Section 1501(a)(27) from being | ||||||
26 | included in the unitary business group because he or |
| |||||||
| |||||||
1 | she is ordinarily required to apportion business | ||||||
2 | income under different subsections of Section 304. The | ||||||
3 | addition modification required by this subparagraph | ||||||
4 | shall be reduced to the extent that dividends were | ||||||
5 | included in base income of the unitary group for the | ||||||
6 | same taxable year and received by the taxpayer or by a | ||||||
7 | member of the taxpayer's unitary business group | ||||||
8 | (including amounts included in gross income under | ||||||
9 | Sections 951 through 964 of the Internal Revenue Code | ||||||
10 | and amounts included in gross income under Section 78 | ||||||
11 | of the Internal Revenue Code) with respect to the stock | ||||||
12 | of the same person to whom the premiums and costs were | ||||||
13 | directly or indirectly paid, incurred, or accrued. The | ||||||
14 | preceding sentence does not apply to the extent that | ||||||
15 | the same dividends caused a reduction to the addition | ||||||
16 | modification required under Section 203(a)(2)(D-17) or | ||||||
17 | Section 203(a)(2)(D-18) of this Act.
| ||||||
18 | (D-20) For taxable years beginning on or after | ||||||
19 | January 1,
2002 and ending on or before December 31, | ||||||
20 | 2006, in
the
case of a distribution from a qualified | ||||||
21 | tuition program under Section 529 of
the Internal | ||||||
22 | Revenue Code, other than (i) a distribution from a | ||||||
23 | College Savings
Pool created under Section 16.5 of the | ||||||
24 | State Treasurer Act or (ii) a
distribution from the | ||||||
25 | Illinois Prepaid Tuition Trust Fund, an amount equal to
| ||||||
26 | the amount excluded from gross income under Section |
| |||||||
| |||||||
1 | 529(c)(3)(B). For taxable years beginning on or after | ||||||
2 | January 1, 2007, in the case of a distribution from a | ||||||
3 | qualified tuition program under Section 529 of the | ||||||
4 | Internal Revenue Code, other than (i) a distribution | ||||||
5 | from a College Savings Pool created under Section 16.5 | ||||||
6 | of the State Treasurer Act, (ii) a distribution from | ||||||
7 | the Illinois Prepaid Tuition Trust Fund, or (iii) a | ||||||
8 | distribution from a qualified tuition program under | ||||||
9 | Section 529 of the Internal Revenue Code that (I) | ||||||
10 | adopts and determines that its offering materials | ||||||
11 | comply with the College Savings Plans Network's | ||||||
12 | disclosure principles and (II) has made reasonable | ||||||
13 | efforts to inform in-state residents of the existence | ||||||
14 | of in-state qualified tuition programs by informing | ||||||
15 | Illinois residents directly and, where applicable, to | ||||||
16 | inform financial intermediaries distributing the | ||||||
17 | program to inform in-state residents of the existence | ||||||
18 | of in-state qualified tuition programs at least | ||||||
19 | annually, an amount equal to the amount excluded from | ||||||
20 | gross income under Section 529(c)(3)(B). | ||||||
21 | For the purposes of this subparagraph (D-20), a | ||||||
22 | qualified tuition program has made reasonable efforts | ||||||
23 | if it makes disclosures (which may use the term | ||||||
24 | "in-state program" or "in-state plan" and need not | ||||||
25 | specifically refer to Illinois or its qualified | ||||||
26 | programs by name) (i) directly to prospective |
| |||||||
| |||||||
1 | participants in its offering materials or makes a | ||||||
2 | public disclosure, such as a website posting; and (ii) | ||||||
3 | where applicable, to intermediaries selling the | ||||||
4 | out-of-state program in the same manner that the | ||||||
5 | out-of-state program distributes its offering | ||||||
6 | materials; | ||||||
7 | (D-21) For taxable years beginning on or after | ||||||
8 | January 1, 2007, in the case of transfer of moneys from | ||||||
9 | a qualified tuition program under Section 529 of the | ||||||
10 | Internal Revenue Code that is administered by the State | ||||||
11 | to an out-of-state program, an amount equal to the | ||||||
12 | amount of moneys previously deducted from base income | ||||||
13 | under subsection (a)(2)(Y) of this Section; | ||||||
14 | (D-22) For taxable years beginning on or after | ||||||
15 | January 1, 2009, in the case of a nonqualified | ||||||
16 | withdrawal or refund of moneys from a qualified tuition | ||||||
17 | program under Section 529 of the Internal Revenue Code | ||||||
18 | administered by the State that is not used for | ||||||
19 | qualified expenses at an eligible education | ||||||
20 | institution, an amount equal to the contribution | ||||||
21 | component of the nonqualified withdrawal or refund | ||||||
22 | that was previously deducted from base income under | ||||||
23 | subsection (a)(2)(y) of this Section, provided that | ||||||
24 | the withdrawal or refund did not result from the | ||||||
25 | beneficiary's death or disability; | ||||||
26 | (D-23) An amount equal to the credit allowable to |
| |||||||
| |||||||
1 | the taxpayer under Section 218(a) of this Act, | ||||||
2 | determined without regard to Section 218(c) of this | ||||||
3 | Act; | ||||||
4 | and by deducting from the total so obtained the
sum of the | ||||||
5 | following amounts: | ||||||
6 | (E) For taxable years ending before December 31, | ||||||
7 | 2001,
any amount included in such total in respect of | ||||||
8 | any compensation
(including but not limited to any | ||||||
9 | compensation paid or accrued to a
serviceman while a | ||||||
10 | prisoner of war or missing in action) paid to a | ||||||
11 | resident
by reason of being on active duty in the Armed | ||||||
12 | Forces of the United States
and in respect of any | ||||||
13 | compensation paid or accrued to a resident who as a
| ||||||
14 | governmental employee was a prisoner of war or missing | ||||||
15 | in action, and in
respect of any compensation paid to a | ||||||
16 | resident in 1971 or thereafter for
annual training | ||||||
17 | performed pursuant to Sections 502 and 503, Title 32,
| ||||||
18 | United States Code as a member of the Illinois National | ||||||
19 | Guard or, beginning with taxable years ending on or | ||||||
20 | after December 31, 2007, the National Guard of any | ||||||
21 | other state.
For taxable years ending on or after | ||||||
22 | December 31, 2001, any amount included in
such total in | ||||||
23 | respect of any compensation (including but not limited | ||||||
24 | to any
compensation paid or accrued to a serviceman | ||||||
25 | while a prisoner of war or missing
in action) paid to a | ||||||
26 | resident by reason of being a member of any component |
| |||||||
| |||||||
1 | of
the Armed Forces of the United States and in respect | ||||||
2 | of any compensation paid
or accrued to a resident who | ||||||
3 | as a governmental employee was a prisoner of war
or | ||||||
4 | missing in action, and in respect of any compensation | ||||||
5 | paid to a resident in
2001 or thereafter by reason of | ||||||
6 | being a member of the Illinois National Guard or, | ||||||
7 | beginning with taxable years ending on or after | ||||||
8 | December 31, 2007, the National Guard of any other | ||||||
9 | state.
The provisions of this subparagraph (E) are | ||||||
10 | exempt
from the provisions of Section 250; | ||||||
11 | (F) An amount equal to all amounts included in such | ||||||
12 | total pursuant
to the provisions of Sections 402(a), | ||||||
13 | 402(c), 403(a), 403(b), 406(a), 407(a),
and 408 of the | ||||||
14 | Internal Revenue Code, or included in such total as
| ||||||
15 | distributions under the provisions of any retirement | ||||||
16 | or disability plan for
employees of any governmental | ||||||
17 | agency or unit, or retirement payments to
retired | ||||||
18 | partners, which payments are excluded in computing net | ||||||
19 | earnings
from self employment by Section 1402 of the | ||||||
20 | Internal Revenue Code and
regulations adopted pursuant | ||||||
21 | thereto; | ||||||
22 | (G) The valuation limitation amount; | ||||||
23 | (H) An amount equal to the amount of any tax | ||||||
24 | imposed by this Act
which was refunded to the taxpayer | ||||||
25 | and included in such total for the
taxable year; | ||||||
26 | (I) An amount equal to all amounts included in such |
| |||||||
| |||||||
1 | total pursuant
to the provisions of Section 111 of the | ||||||
2 | Internal Revenue Code as a
recovery of items previously | ||||||
3 | deducted from adjusted gross income in the
computation | ||||||
4 | of taxable income; | ||||||
5 | (J) An amount equal to those dividends included in | ||||||
6 | such total which were
paid by a corporation which | ||||||
7 | conducts business operations in a River Edge | ||||||
8 | Redevelopment Zone or zones created under the River | ||||||
9 | Edge Redevelopment Zone Act, and conducts
| ||||||
10 | substantially all of its operations in a River Edge | ||||||
11 | Redevelopment Zone or zones. This subparagraph (J) is | ||||||
12 | exempt from the provisions of Section 250; | ||||||
13 | (K) An amount equal to those dividends included in | ||||||
14 | such total that
were paid by a corporation that | ||||||
15 | conducts business operations in a federally
designated | ||||||
16 | Foreign Trade Zone or Sub-Zone and that is designated a | ||||||
17 | High Impact
Business located in Illinois; provided | ||||||
18 | that dividends eligible for the
deduction provided in | ||||||
19 | subparagraph (J) of paragraph (2) of this subsection
| ||||||
20 | shall not be eligible for the deduction provided under | ||||||
21 | this subparagraph
(K); | ||||||
22 | (L) For taxable years ending after December 31, | ||||||
23 | 1983, an amount equal to
all social security benefits | ||||||
24 | and railroad retirement benefits included in
such | ||||||
25 | total pursuant to Sections 72(r) and 86 of the Internal | ||||||
26 | Revenue Code; |
| |||||||
| |||||||
1 | (M) With the exception of any amounts subtracted | ||||||
2 | under subparagraph
(N), an amount equal to the sum of | ||||||
3 | all amounts disallowed as
deductions by (i) Sections | ||||||
4 | 171(a) (2), and 265(2) of the Internal Revenue Code, | ||||||
5 | and all amounts of expenses allocable
to interest and | ||||||
6 | disallowed as deductions by Section 265(1) of the | ||||||
7 | Internal
Revenue Code;
and (ii) for taxable years
| ||||||
8 | ending on or after August 13, 1999, Sections 171(a)(2), | ||||||
9 | 265,
280C, and 832(b)(5)(B)(i) of the Internal Revenue | ||||||
10 | Code, plus, for taxable years ending on or after | ||||||
11 | December 31, 2011, Section 45G(e)(3) of the Internal | ||||||
12 | Revenue Code and, for taxable years ending on or after | ||||||
13 | December 31, 2008, any amount included in gross income | ||||||
14 | under Section 87 of the Internal Revenue Code; the | ||||||
15 | provisions of this
subparagraph are exempt from the | ||||||
16 | provisions of Section 250; | ||||||
17 | (N) An amount equal to all amounts included in such | ||||||
18 | total which are
exempt from taxation by this State | ||||||
19 | either by reason of its statutes or
Constitution
or by | ||||||
20 | reason of the Constitution, treaties or statutes of the | ||||||
21 | United States;
provided that, in the case of any | ||||||
22 | statute of this State that exempts income
derived from | ||||||
23 | bonds or other obligations from the tax imposed under | ||||||
24 | this Act,
the amount exempted shall be the interest net | ||||||
25 | of bond premium amortization; | ||||||
26 | (O) An amount equal to any contribution made to a |
| |||||||
| |||||||
1 | job training
project established pursuant to the Tax | ||||||
2 | Increment Allocation Redevelopment Act; | ||||||
3 | (P) An amount equal to the amount of the deduction | ||||||
4 | used to compute the
federal income tax credit for | ||||||
5 | restoration of substantial amounts held under
claim of | ||||||
6 | right for the taxable year pursuant to Section 1341 of | ||||||
7 | the
Internal Revenue Code or of any itemized deduction | ||||||
8 | taken from adjusted gross income in the computation of | ||||||
9 | taxable income for restoration of substantial amounts | ||||||
10 | held under claim of right for the taxable year; | ||||||
11 | (Q) An amount equal to any amounts included in such | ||||||
12 | total, received by
the taxpayer as an acceleration in | ||||||
13 | the payment of life, endowment or annuity
benefits in | ||||||
14 | advance of the time they would otherwise be payable as | ||||||
15 | an indemnity
for a terminal illness; | ||||||
16 | (R) An amount equal to the amount of any federal or | ||||||
17 | State bonus paid
to veterans of the Persian Gulf War; | ||||||
18 | (S) An amount, to the extent included in adjusted | ||||||
19 | gross income, equal
to the amount of a contribution | ||||||
20 | made in the taxable year on behalf of the
taxpayer to a | ||||||
21 | medical care savings account established under the | ||||||
22 | Medical Care
Savings Account Act or the Medical Care | ||||||
23 | Savings Account Act of 2000 to the
extent the | ||||||
24 | contribution is accepted by the account
administrator | ||||||
25 | as provided in that Act; | ||||||
26 | (T) An amount, to the extent included in adjusted |
| |||||||
| |||||||
1 | gross income, equal to
the amount of interest earned in | ||||||
2 | the taxable year on a medical care savings
account | ||||||
3 | established under the Medical Care Savings Account Act | ||||||
4 | or the Medical
Care Savings Account Act of 2000 on | ||||||
5 | behalf of the
taxpayer, other than interest added | ||||||
6 | pursuant to item (D-5) of this paragraph
(2); | ||||||
7 | (U) For one taxable year beginning on or after | ||||||
8 | January 1,
1994, an
amount equal to the total amount of | ||||||
9 | tax imposed and paid under subsections (a)
and (b) of | ||||||
10 | Section 201 of this Act on grant amounts received by | ||||||
11 | the taxpayer
under the Nursing Home Grant Assistance | ||||||
12 | Act during the taxpayer's taxable years
1992 and 1993; | ||||||
13 | (V) Beginning with tax years ending on or after | ||||||
14 | December 31, 1995 and
ending with tax years ending on | ||||||
15 | or before December 31, 2004, an amount equal to
the | ||||||
16 | amount paid by a taxpayer who is a
self-employed | ||||||
17 | taxpayer, a partner of a partnership, or a
shareholder | ||||||
18 | in a Subchapter S corporation for health insurance or | ||||||
19 | long-term
care insurance for that taxpayer or that | ||||||
20 | taxpayer's spouse or dependents, to
the extent that the | ||||||
21 | amount paid for that health insurance or long-term care
| ||||||
22 | insurance may be deducted under Section 213 of the | ||||||
23 | Internal Revenue Code, has not been deducted on the | ||||||
24 | federal income tax return of the taxpayer,
and does not | ||||||
25 | exceed the taxable income attributable to that | ||||||
26 | taxpayer's income,
self-employment income, or |
| |||||||
| |||||||
1 | Subchapter S corporation income; except that no
| ||||||
2 | deduction shall be allowed under this item (V) if the | ||||||
3 | taxpayer is eligible to
participate in any health | ||||||
4 | insurance or long-term care insurance plan of an
| ||||||
5 | employer of the taxpayer or the taxpayer's
spouse. The | ||||||
6 | amount of the health insurance and long-term care | ||||||
7 | insurance
subtracted under this item (V) shall be | ||||||
8 | determined by multiplying total
health insurance and | ||||||
9 | long-term care insurance premiums paid by the taxpayer
| ||||||
10 | times a number that represents the fractional | ||||||
11 | percentage of eligible medical
expenses under Section | ||||||
12 | 213 of the Internal Revenue Code of 1986 not actually
| ||||||
13 | deducted on the taxpayer's federal income tax return; | ||||||
14 | (W) For taxable years beginning on or after January | ||||||
15 | 1, 1998,
all amounts included in the taxpayer's federal | ||||||
16 | gross income
in the taxable year from amounts converted | ||||||
17 | from a regular IRA to a Roth IRA.
This paragraph is | ||||||
18 | exempt from the provisions of Section
250; | ||||||
19 | (X) For taxable year 1999 and thereafter, an amount | ||||||
20 | equal to the
amount of any (i) distributions, to the | ||||||
21 | extent includible in gross income for
federal income | ||||||
22 | tax purposes, made to the taxpayer because of his or | ||||||
23 | her status
as a victim of persecution for racial or | ||||||
24 | religious reasons by Nazi Germany or
any other Axis | ||||||
25 | regime or as an heir of the victim and (ii) items
of | ||||||
26 | income, to the extent
includible in gross income for |
| |||||||
| |||||||
1 | federal income tax purposes, attributable to,
derived | ||||||
2 | from or in any way related to assets stolen from, | ||||||
3 | hidden from, or
otherwise lost to a victim of
| ||||||
4 | persecution for racial or religious reasons by Nazi | ||||||
5 | Germany or any other Axis
regime immediately prior to, | ||||||
6 | during, and immediately after World War II,
including, | ||||||
7 | but
not limited to, interest on the proceeds receivable | ||||||
8 | as insurance
under policies issued to a victim of | ||||||
9 | persecution for racial or religious
reasons
by Nazi | ||||||
10 | Germany or any other Axis regime by European insurance | ||||||
11 | companies
immediately prior to and during World War II;
| ||||||
12 | provided, however, this subtraction from federal | ||||||
13 | adjusted gross income does not
apply to assets acquired | ||||||
14 | with such assets or with the proceeds from the sale of
| ||||||
15 | such assets; provided, further, this paragraph shall | ||||||
16 | only apply to a taxpayer
who was the first recipient of | ||||||
17 | such assets after their recovery and who is a
victim of | ||||||
18 | persecution for racial or religious reasons
by Nazi | ||||||
19 | Germany or any other Axis regime or as an heir of the | ||||||
20 | victim. The
amount of and the eligibility for any | ||||||
21 | public assistance, benefit, or
similar entitlement is | ||||||
22 | not affected by the inclusion of items (i) and (ii) of
| ||||||
23 | this paragraph in gross income for federal income tax | ||||||
24 | purposes.
This paragraph is exempt from the provisions | ||||||
25 | of Section 250; | ||||||
26 | (Y) For taxable years beginning on or after January |
| |||||||
| |||||||
1 | 1, 2002
and ending
on or before December 31, 2004, | ||||||
2 | moneys contributed in the taxable year to a College | ||||||
3 | Savings Pool account under
Section 16.5 of the State | ||||||
4 | Treasurer Act, except that amounts excluded from
gross | ||||||
5 | income under Section 529(c)(3)(C)(i) of the Internal | ||||||
6 | Revenue Code
shall not be considered moneys | ||||||
7 | contributed under this subparagraph (Y). For taxable | ||||||
8 | years beginning on or after January 1, 2005, a maximum | ||||||
9 | of $10,000
contributed
in the
taxable year to (i) a | ||||||
10 | College Savings Pool account under Section 16.5 of the
| ||||||
11 | State
Treasurer Act or (ii) the Illinois Prepaid | ||||||
12 | Tuition Trust Fund,
except that
amounts excluded from | ||||||
13 | gross income under Section 529(c)(3)(C)(i) of the
| ||||||
14 | Internal
Revenue Code shall not be considered moneys | ||||||
15 | contributed under this subparagraph
(Y). For purposes | ||||||
16 | of this subparagraph, contributions made by an | ||||||
17 | employer on behalf of an employee, or matching | ||||||
18 | contributions made by an employee, shall be treated as | ||||||
19 | made by the employee. This
subparagraph (Y) is exempt | ||||||
20 | from the provisions of Section 250; | ||||||
21 | (Z) For taxable years 2001 and thereafter, for the | ||||||
22 | taxable year in
which the bonus depreciation deduction
| ||||||
23 | is taken on the taxpayer's federal income tax return | ||||||
24 | under
subsection (k) of Section 168 of the Internal | ||||||
25 | Revenue Code and for each
applicable taxable year | ||||||
26 | thereafter, an amount equal to "x", where: |
| |||||||
| |||||||
1 | (1) "y" equals the amount of the depreciation | ||||||
2 | deduction taken for the
taxable year
on the | ||||||
3 | taxpayer's federal income tax return on property | ||||||
4 | for which the bonus
depreciation deduction
was | ||||||
5 | taken in any year under subsection (k) of Section | ||||||
6 | 168 of the Internal
Revenue Code, but not including | ||||||
7 | the bonus depreciation deduction; | ||||||
8 | (2) for taxable years ending on or before | ||||||
9 | December 31, 2005, "x" equals "y" multiplied by 30 | ||||||
10 | and then divided by 70 (or "y"
multiplied by | ||||||
11 | 0.429); and | ||||||
12 | (3) for taxable years ending after December | ||||||
13 | 31, 2005: | ||||||
14 | (i) for property on which a bonus | ||||||
15 | depreciation deduction of 30% of the adjusted | ||||||
16 | basis was taken, "x" equals "y" multiplied by | ||||||
17 | 30 and then divided by 70 (or "y"
multiplied by | ||||||
18 | 0.429); and | ||||||
19 | (ii) for property on which a bonus | ||||||
20 | depreciation deduction of 50% of the adjusted | ||||||
21 | basis was taken, "x" equals "y" multiplied by | ||||||
22 | 1.0. | ||||||
23 | The aggregate amount deducted under this | ||||||
24 | subparagraph in all taxable
years for any one piece of | ||||||
25 | property may not exceed the amount of the bonus
| ||||||
26 | depreciation deduction
taken on that property on the |
| |||||||
| |||||||
1 | taxpayer's federal income tax return under
subsection | ||||||
2 | (k) of Section 168 of the Internal Revenue Code. This | ||||||
3 | subparagraph (Z) is exempt from the provisions of | ||||||
4 | Section 250; | ||||||
5 | (AA) If the taxpayer sells, transfers, abandons, | ||||||
6 | or otherwise disposes of
property for which the | ||||||
7 | taxpayer was required in any taxable year to make an
| ||||||
8 | addition modification under subparagraph (D-15), then | ||||||
9 | an amount equal to that
addition modification.
| ||||||
10 | If the taxpayer continues to own property through | ||||||
11 | the last day of the last tax year for which the | ||||||
12 | taxpayer may claim a depreciation deduction for | ||||||
13 | federal income tax purposes and for which the taxpayer | ||||||
14 | was required in any taxable year to make an addition | ||||||
15 | modification under subparagraph (D-15), then an amount | ||||||
16 | equal to that addition modification.
| ||||||
17 | The taxpayer is allowed to take the deduction under | ||||||
18 | this subparagraph
only once with respect to any one | ||||||
19 | piece of property. | ||||||
20 | This subparagraph (AA) is exempt from the | ||||||
21 | provisions of Section 250; | ||||||
22 | (BB) Any amount included in adjusted gross income, | ||||||
23 | other
than
salary,
received by a driver in a | ||||||
24 | ridesharing arrangement using a motor vehicle; | ||||||
25 | (CC) The amount of (i) any interest income (net of | ||||||
26 | the deductions allocable thereto) taken into account |
| |||||||
| |||||||
1 | for the taxable year with respect to a transaction with | ||||||
2 | a taxpayer that is required to make an addition | ||||||
3 | modification with respect to such transaction under | ||||||
4 | Section 203(a)(2)(D-17), 203(b)(2)(E-12), | ||||||
5 | 203(c)(2)(G-12), or 203(d)(2)(D-7), but not to exceed | ||||||
6 | the amount of that addition modification, and
(ii) any | ||||||
7 | income from intangible property (net of the deductions | ||||||
8 | allocable thereto) taken into account for the taxable | ||||||
9 | year with respect to a transaction with a taxpayer that | ||||||
10 | is required to make an addition modification with | ||||||
11 | respect to such transaction under Section | ||||||
12 | 203(a)(2)(D-18), 203(b)(2)(E-13), 203(c)(2)(G-13), or | ||||||
13 | 203(d)(2)(D-8), but not to exceed the amount of that | ||||||
14 | addition modification. This subparagraph (CC) is | ||||||
15 | exempt from the provisions of Section 250; | ||||||
16 | (DD) An amount equal to the interest income taken | ||||||
17 | into account for the taxable year (net of the | ||||||
18 | deductions allocable thereto) with respect to | ||||||
19 | transactions with (i) a foreign person who would be a | ||||||
20 | member of the taxpayer's unitary business group but for | ||||||
21 | the fact that the foreign person's business activity | ||||||
22 | outside the United States is 80% or more of that | ||||||
23 | person's total business activity and (ii) for taxable | ||||||
24 | years ending on or after December 31, 2008, to a person | ||||||
25 | who would be a member of the same unitary business | ||||||
26 | group but for the fact that the person is prohibited |
| |||||||
| |||||||
1 | under Section 1501(a)(27) from being included in the | ||||||
2 | unitary business group because he or she is ordinarily | ||||||
3 | required to apportion business income under different | ||||||
4 | subsections of Section 304, but not to exceed the | ||||||
5 | addition modification required to be made for the same | ||||||
6 | taxable year under Section 203(a)(2)(D-17) for | ||||||
7 | interest paid, accrued, or incurred, directly or | ||||||
8 | indirectly, to the same person. This subparagraph (DD) | ||||||
9 | is exempt from the provisions of Section 250; | ||||||
10 | (EE) An amount equal to the income from intangible | ||||||
11 | property taken into account for the taxable year (net | ||||||
12 | of the deductions allocable thereto) with respect to | ||||||
13 | transactions with (i) a foreign person who would be a | ||||||
14 | member of the taxpayer's unitary business group but for | ||||||
15 | the fact that the foreign person's business activity | ||||||
16 | outside the United States is 80% or more of that | ||||||
17 | person's total business activity and (ii) for taxable | ||||||
18 | years ending on or after December 31, 2008, to a person | ||||||
19 | who would be a member of the same unitary business | ||||||
20 | group but for the fact that the person is prohibited | ||||||
21 | under Section 1501(a)(27) from being included in the | ||||||
22 | unitary business group because he or she is ordinarily | ||||||
23 | required to apportion business income under different | ||||||
24 | subsections of Section 304, but not to exceed the | ||||||
25 | addition modification required to be made for the same | ||||||
26 | taxable year under Section 203(a)(2)(D-18) for |
| |||||||
| |||||||
1 | intangible expenses and costs paid, accrued, or | ||||||
2 | incurred, directly or indirectly, to the same foreign | ||||||
3 | person. This subparagraph (EE) is exempt from the | ||||||
4 | provisions of Section 250; | ||||||
5 | (FF) An amount equal to any amount awarded to the | ||||||
6 | taxpayer during the taxable year by the Court of Claims | ||||||
7 | under subsection (c) of Section 8 of the Court of | ||||||
8 | Claims Act for time unjustly served in a State prison. | ||||||
9 | This subparagraph (FF) is exempt from the provisions of | ||||||
10 | Section 250; and | ||||||
11 | (GG) For taxable years ending on or after December | ||||||
12 | 31, 2011, in the case of a taxpayer who was required to | ||||||
13 | add back any insurance premiums under Section | ||||||
14 | 203(a)(2)(D-19), such taxpayer may elect to subtract | ||||||
15 | that part of a reimbursement received from the | ||||||
16 | insurance company equal to the amount of the expense or | ||||||
17 | loss (including expenses incurred by the insurance | ||||||
18 | company) that would have been taken into account as a | ||||||
19 | deduction for federal income tax purposes if the | ||||||
20 | expense or loss had been uninsured. If a taxpayer makes | ||||||
21 | the election provided for by this subparagraph (GG), | ||||||
22 | the insurer to which the premiums were paid must add | ||||||
23 | back to income the amount subtracted by the taxpayer | ||||||
24 | pursuant to this subparagraph (GG). This subparagraph | ||||||
25 | (GG) is exempt from the provisions of Section 250 ; and . | ||||||
26 | (HH) For taxable years ending on or after December |
| |||||||
| |||||||
1 | 31, 2015, an amount, to the extent that it is included | ||||||
2 | in adjusted gross income, equal to any scholarship | ||||||
3 | redeemed under the Opportunity Scholarship Act. This | ||||||
4 | subparagraph (HH) is exempt from the provisions of | ||||||
5 | Section 250.
| ||||||
6 | (b) Corporations. | ||||||
7 | (1) In general. In the case of a corporation, base | ||||||
8 | income means an
amount equal to the taxpayer's taxable | ||||||
9 | income for the taxable year as
modified by paragraph (2). | ||||||
10 | (2) Modifications. The taxable income referred to in | ||||||
11 | paragraph (1)
shall be modified by adding thereto the sum | ||||||
12 | of the following amounts: | ||||||
13 | (A) An amount equal to all amounts paid or accrued | ||||||
14 | to the taxpayer
as interest and all distributions | ||||||
15 | received from regulated investment
companies during | ||||||
16 | the taxable year to the extent excluded from gross
| ||||||
17 | income in the computation of taxable income; | ||||||
18 | (B) An amount equal to the amount of tax imposed by | ||||||
19 | this Act to the
extent deducted from gross income in | ||||||
20 | the computation of taxable income
for the taxable year; | ||||||
21 | (C) In the case of a regulated investment company, | ||||||
22 | an amount equal to
the excess of (i) the net long-term | ||||||
23 | capital gain for the taxable year, over
(ii) the amount | ||||||
24 | of the capital gain dividends designated as such in | ||||||
25 | accordance
with Section 852(b)(3)(C) of the Internal |
| |||||||
| |||||||
1 | Revenue Code and any amount
designated under Section | ||||||
2 | 852(b)(3)(D) of the Internal Revenue Code,
| ||||||
3 | attributable to the taxable year (this amendatory Act | ||||||
4 | of 1995
(Public Act 89-89) is declarative of existing | ||||||
5 | law and is not a new
enactment); | ||||||
6 | (D) The amount of any net operating loss deduction | ||||||
7 | taken in arriving
at taxable income, other than a net | ||||||
8 | operating loss carried forward from a
taxable year | ||||||
9 | ending prior to December 31, 1986; | ||||||
10 | (E) For taxable years in which a net operating loss | ||||||
11 | carryback or
carryforward from a taxable year ending | ||||||
12 | prior to December 31, 1986 is an
element of taxable | ||||||
13 | income under paragraph (1) of subsection (e) or
| ||||||
14 | subparagraph (E) of paragraph (2) of subsection (e), | ||||||
15 | the amount by which
addition modifications other than | ||||||
16 | those provided by this subparagraph (E)
exceeded | ||||||
17 | subtraction modifications in such earlier taxable | ||||||
18 | year, with the
following limitations applied in the | ||||||
19 | order that they are listed: | ||||||
20 | (i) the addition modification relating to the | ||||||
21 | net operating loss
carried back or forward to the | ||||||
22 | taxable year from any taxable year ending
prior to | ||||||
23 | December 31, 1986 shall be reduced by the amount of | ||||||
24 | addition
modification under this subparagraph (E) | ||||||
25 | which related to that net operating
loss and which | ||||||
26 | was taken into account in calculating the base |
| |||||||
| |||||||
1 | income of an
earlier taxable year, and | ||||||
2 | (ii) the addition modification relating to the | ||||||
3 | net operating loss
carried back or forward to the | ||||||
4 | taxable year from any taxable year ending
prior to | ||||||
5 | December 31, 1986 shall not exceed the amount of | ||||||
6 | such carryback or
carryforward; | ||||||
7 | For taxable years in which there is a net operating | ||||||
8 | loss carryback or
carryforward from more than one other | ||||||
9 | taxable year ending prior to December
31, 1986, the | ||||||
10 | addition modification provided in this subparagraph | ||||||
11 | (E) shall
be the sum of the amounts computed | ||||||
12 | independently under the preceding
provisions of this | ||||||
13 | subparagraph (E) for each such taxable year; | ||||||
14 | (E-5) For taxable years ending after December 31, | ||||||
15 | 1997, an
amount equal to any eligible remediation costs | ||||||
16 | that the corporation
deducted in computing adjusted | ||||||
17 | gross income and for which the
corporation claims a | ||||||
18 | credit under subsection (l) of Section 201; | ||||||
19 | (E-10) For taxable years 2001 and thereafter, an | ||||||
20 | amount equal to the
bonus depreciation deduction taken | ||||||
21 | on the taxpayer's federal income tax return for the | ||||||
22 | taxable
year under subsection (k) of Section 168 of the | ||||||
23 | Internal Revenue Code; | ||||||
24 | (E-11) If the taxpayer sells, transfers, abandons, | ||||||
25 | or otherwise disposes of property for which the | ||||||
26 | taxpayer was required in any taxable year to
make an |
| |||||||
| |||||||
1 | addition modification under subparagraph (E-10), then | ||||||
2 | an amount equal
to the aggregate amount of the | ||||||
3 | deductions taken in all taxable
years under | ||||||
4 | subparagraph (T) with respect to that property. | ||||||
5 | If the taxpayer continues to own property through | ||||||
6 | the last day of the last tax year for which the | ||||||
7 | taxpayer may claim a depreciation deduction for | ||||||
8 | federal income tax purposes and for which the taxpayer | ||||||
9 | was allowed in any taxable year to make a subtraction | ||||||
10 | modification under subparagraph (T), then an amount | ||||||
11 | equal to that subtraction modification.
| ||||||
12 | The taxpayer is required to make the addition | ||||||
13 | modification under this
subparagraph
only once with | ||||||
14 | respect to any one piece of property; | ||||||
15 | (E-12) An amount equal to the amount otherwise | ||||||
16 | allowed as a deduction in computing base income for | ||||||
17 | interest paid, accrued, or incurred, directly or | ||||||
18 | indirectly, (i) for taxable years ending on or after | ||||||
19 | December 31, 2004, to a foreign person who would be a | ||||||
20 | member of the same unitary business group but for the | ||||||
21 | fact the foreign person's business activity outside | ||||||
22 | the United States is 80% or more of the foreign | ||||||
23 | person's total business activity and (ii) for taxable | ||||||
24 | years ending on or after December 31, 2008, to a person | ||||||
25 | who would be a member of the same unitary business | ||||||
26 | group but for the fact that the person is prohibited |
| |||||||
| |||||||
1 | under Section 1501(a)(27) from being included in the | ||||||
2 | unitary business group because he or she is ordinarily | ||||||
3 | required to apportion business income under different | ||||||
4 | subsections of Section 304. The addition modification | ||||||
5 | required by this subparagraph shall be reduced to the | ||||||
6 | extent that dividends were included in base income of | ||||||
7 | the unitary group for the same taxable year and | ||||||
8 | received by the taxpayer or by a member of the | ||||||
9 | taxpayer's unitary business group (including amounts | ||||||
10 | included in gross income pursuant to Sections 951 | ||||||
11 | through 964 of the Internal Revenue Code and amounts | ||||||
12 | included in gross income under Section 78 of the | ||||||
13 | Internal Revenue Code) with respect to the stock of the | ||||||
14 | same person to whom the interest was paid, accrued, or | ||||||
15 | incurred.
| ||||||
16 | This paragraph shall not apply to the following:
| ||||||
17 | (i) an item of interest paid, accrued, or | ||||||
18 | incurred, directly or indirectly, to a person who | ||||||
19 | is subject in a foreign country or state, other | ||||||
20 | than a state which requires mandatory unitary | ||||||
21 | reporting, to a tax on or measured by net income | ||||||
22 | with respect to such interest; or | ||||||
23 | (ii) an item of interest paid, accrued, or | ||||||
24 | incurred, directly or indirectly, to a person if | ||||||
25 | the taxpayer can establish, based on a | ||||||
26 | preponderance of the evidence, both of the |
| |||||||
| |||||||
1 | following: | ||||||
2 | (a) the person, during the same taxable | ||||||
3 | year, paid, accrued, or incurred, the interest | ||||||
4 | to a person that is not a related member, and | ||||||
5 | (b) the transaction giving rise to the | ||||||
6 | interest expense between the taxpayer and the | ||||||
7 | person did not have as a principal purpose the | ||||||
8 | avoidance of Illinois income tax, and is paid | ||||||
9 | pursuant to a contract or agreement that | ||||||
10 | reflects an arm's-length interest rate and | ||||||
11 | terms; or
| ||||||
12 | (iii) the taxpayer can establish, based on | ||||||
13 | clear and convincing evidence, that the interest | ||||||
14 | paid, accrued, or incurred relates to a contract or | ||||||
15 | agreement entered into at arm's-length rates and | ||||||
16 | terms and the principal purpose for the payment is | ||||||
17 | not federal or Illinois tax avoidance; or
| ||||||
18 | (iv) an item of interest paid, accrued, or | ||||||
19 | incurred, directly or indirectly, to a person if | ||||||
20 | the taxpayer establishes by clear and convincing | ||||||
21 | evidence that the adjustments are unreasonable; or | ||||||
22 | if the taxpayer and the Director agree in writing | ||||||
23 | to the application or use of an alternative method | ||||||
24 | of apportionment under Section 304(f).
| ||||||
25 | Nothing in this subsection shall preclude the | ||||||
26 | Director from making any other adjustment |
| |||||||
| |||||||
1 | otherwise allowed under Section 404 of this Act for | ||||||
2 | any tax year beginning after the effective date of | ||||||
3 | this amendment provided such adjustment is made | ||||||
4 | pursuant to regulation adopted by the Department | ||||||
5 | and such regulations provide methods and standards | ||||||
6 | by which the Department will utilize its authority | ||||||
7 | under Section 404 of this Act;
| ||||||
8 | (E-13) An amount equal to the amount of intangible | ||||||
9 | expenses and costs otherwise allowed as a deduction in | ||||||
10 | computing base income, and that were paid, accrued, or | ||||||
11 | incurred, directly or indirectly, (i) for taxable | ||||||
12 | years ending on or after December 31, 2004, to a | ||||||
13 | foreign person who would be a member of the same | ||||||
14 | unitary business group but for the fact that the | ||||||
15 | foreign person's business activity outside the United | ||||||
16 | States is 80% or more of that person's total business | ||||||
17 | activity and (ii) for taxable years ending on or after | ||||||
18 | December 31, 2008, to a person who would be a member of | ||||||
19 | the same unitary business group but for the fact that | ||||||
20 | the person is prohibited under Section 1501(a)(27) | ||||||
21 | from being included in the unitary business group | ||||||
22 | because he or she is ordinarily required to apportion | ||||||
23 | business income under different subsections of Section | ||||||
24 | 304. The addition modification required by this | ||||||
25 | subparagraph shall be reduced to the extent that | ||||||
26 | dividends were included in base income of the unitary |
| |||||||
| |||||||
1 | group for the same taxable year and received by the | ||||||
2 | taxpayer or by a member of the taxpayer's unitary | ||||||
3 | business group (including amounts included in gross | ||||||
4 | income pursuant to Sections 951 through 964 of the | ||||||
5 | Internal Revenue Code and amounts included in gross | ||||||
6 | income under Section 78 of the Internal Revenue Code) | ||||||
7 | with respect to the stock of the same person to whom | ||||||
8 | the intangible expenses and costs were directly or | ||||||
9 | indirectly paid, incurred, or accrued. The preceding | ||||||
10 | sentence shall not apply to the extent that the same | ||||||
11 | dividends caused a reduction to the addition | ||||||
12 | modification required under Section 203(b)(2)(E-12) of | ||||||
13 | this Act.
As used in this subparagraph, the term | ||||||
14 | "intangible expenses and costs" includes (1) expenses, | ||||||
15 | losses, and costs for, or related to, the direct or | ||||||
16 | indirect acquisition, use, maintenance or management, | ||||||
17 | ownership, sale, exchange, or any other disposition of | ||||||
18 | intangible property; (2) losses incurred, directly or | ||||||
19 | indirectly, from factoring transactions or discounting | ||||||
20 | transactions; (3) royalty, patent, technical, and | ||||||
21 | copyright fees; (4) licensing fees; and (5) other | ||||||
22 | similar expenses and costs.
For purposes of this | ||||||
23 | subparagraph, "intangible property" includes patents, | ||||||
24 | patent applications, trade names, trademarks, service | ||||||
25 | marks, copyrights, mask works, trade secrets, and | ||||||
26 | similar types of intangible assets. |
| |||||||
| |||||||
1 | This paragraph shall not apply to the following: | ||||||
2 | (i) any item of intangible expenses or costs | ||||||
3 | paid, accrued, or incurred, directly or | ||||||
4 | indirectly, from a transaction with a person who is | ||||||
5 | subject in a foreign country or state, other than a | ||||||
6 | state which requires mandatory unitary reporting, | ||||||
7 | to a tax on or measured by net income with respect | ||||||
8 | to such item; or | ||||||
9 | (ii) any item of intangible expense or cost | ||||||
10 | paid, accrued, or incurred, directly or | ||||||
11 | indirectly, if the taxpayer can establish, based | ||||||
12 | on a preponderance of the evidence, both of the | ||||||
13 | following: | ||||||
14 | (a) the person during the same taxable | ||||||
15 | year paid, accrued, or incurred, the | ||||||
16 | intangible expense or cost to a person that is | ||||||
17 | not a related member, and | ||||||
18 | (b) the transaction giving rise to the | ||||||
19 | intangible expense or cost between the | ||||||
20 | taxpayer and the person did not have as a | ||||||
21 | principal purpose the avoidance of Illinois | ||||||
22 | income tax, and is paid pursuant to a contract | ||||||
23 | or agreement that reflects arm's-length terms; | ||||||
24 | or | ||||||
25 | (iii) any item of intangible expense or cost | ||||||
26 | paid, accrued, or incurred, directly or |
| |||||||
| |||||||
1 | indirectly, from a transaction with a person if the | ||||||
2 | taxpayer establishes by clear and convincing | ||||||
3 | evidence, that the adjustments are unreasonable; | ||||||
4 | or if the taxpayer and the Director agree in | ||||||
5 | writing to the application or use of an alternative | ||||||
6 | method of apportionment under Section 304(f);
| ||||||
7 | Nothing in this subsection shall preclude the | ||||||
8 | Director from making any other adjustment | ||||||
9 | otherwise allowed under Section 404 of this Act for | ||||||
10 | any tax year beginning after the effective date of | ||||||
11 | this amendment provided such adjustment is made | ||||||
12 | pursuant to regulation adopted by the Department | ||||||
13 | and such regulations provide methods and standards | ||||||
14 | by which the Department will utilize its authority | ||||||
15 | under Section 404 of this Act;
| ||||||
16 | (E-14) For taxable years ending on or after | ||||||
17 | December 31, 2008, an amount equal to the amount of | ||||||
18 | insurance premium expenses and costs otherwise allowed | ||||||
19 | as a deduction in computing base income, and that were | ||||||
20 | paid, accrued, or incurred, directly or indirectly, to | ||||||
21 | a person who would be a member of the same unitary | ||||||
22 | business group but for the fact that the person is | ||||||
23 | prohibited under Section 1501(a)(27) from being | ||||||
24 | included in the unitary business group because he or | ||||||
25 | she is ordinarily required to apportion business | ||||||
26 | income under different subsections of Section 304. The |
| |||||||
| |||||||
1 | addition modification required by this subparagraph | ||||||
2 | shall be reduced to the extent that dividends were | ||||||
3 | included in base income of the unitary group for the | ||||||
4 | same taxable year and received by the taxpayer or by a | ||||||
5 | member of the taxpayer's unitary business group | ||||||
6 | (including amounts included in gross income under | ||||||
7 | Sections 951 through 964 of the Internal Revenue Code | ||||||
8 | and amounts included in gross income under Section 78 | ||||||
9 | of the Internal Revenue Code) with respect to the stock | ||||||
10 | of the same person to whom the premiums and costs were | ||||||
11 | directly or indirectly paid, incurred, or accrued. The | ||||||
12 | preceding sentence does not apply to the extent that | ||||||
13 | the same dividends caused a reduction to the addition | ||||||
14 | modification required under Section 203(b)(2)(E-12) or | ||||||
15 | Section 203(b)(2)(E-13) of this Act;
| ||||||
16 | (E-15) For taxable years beginning after December | ||||||
17 | 31, 2008, any deduction for dividends paid by a captive | ||||||
18 | real estate investment trust that is allowed to a real | ||||||
19 | estate investment trust under Section 857(b)(2)(B) of | ||||||
20 | the Internal Revenue Code for dividends paid; | ||||||
21 | (E-16) An amount equal to the credit allowable to | ||||||
22 | the taxpayer under Section 218(a) of this Act, | ||||||
23 | determined without regard to Section 218(c) of this | ||||||
24 | Act; | ||||||
25 | and by deducting from the total so obtained the sum of the | ||||||
26 | following
amounts: |
| |||||||
| |||||||
1 | (F) An amount equal to the amount of any tax | ||||||
2 | imposed by this Act
which was refunded to the taxpayer | ||||||
3 | and included in such total for the
taxable year; | ||||||
4 | (G) An amount equal to any amount included in such | ||||||
5 | total under
Section 78 of the Internal Revenue Code; | ||||||
6 | (H) In the case of a regulated investment company, | ||||||
7 | an amount equal
to the amount of exempt interest | ||||||
8 | dividends as defined in subsection (b)
(5) of Section | ||||||
9 | 852 of the Internal Revenue Code, paid to shareholders
| ||||||
10 | for the taxable year; | ||||||
11 | (I) With the exception of any amounts subtracted | ||||||
12 | under subparagraph
(J),
an amount equal to the sum of | ||||||
13 | all amounts disallowed as
deductions by (i) Sections | ||||||
14 | 171(a) (2), and 265(a)(2) and amounts disallowed as
| ||||||
15 | interest expense by Section 291(a)(3) of the Internal | ||||||
16 | Revenue Code, and all amounts of expenses allocable to | ||||||
17 | interest and
disallowed as deductions by Section | ||||||
18 | 265(a)(1) of the Internal Revenue Code;
and (ii) for | ||||||
19 | taxable years
ending on or after August 13, 1999, | ||||||
20 | Sections
171(a)(2), 265,
280C, 291(a)(3), and | ||||||
21 | 832(b)(5)(B)(i) of the Internal Revenue Code, plus, | ||||||
22 | for tax years ending on or after December 31, 2011, | ||||||
23 | amounts disallowed as deductions by Section 45G(e)(3) | ||||||
24 | of the Internal Revenue Code and, for taxable years | ||||||
25 | ending on or after December 31, 2008, any amount | ||||||
26 | included in gross income under Section 87 of the |
| |||||||
| |||||||
1 | Internal Revenue Code and the policyholders' share of | ||||||
2 | tax-exempt interest of a life insurance company under | ||||||
3 | Section 807(a)(2)(B) of the Internal Revenue Code (in | ||||||
4 | the case of a life insurance company with gross income | ||||||
5 | from a decrease in reserves for the tax year) or | ||||||
6 | Section 807(b)(1)(B) of the Internal Revenue Code (in | ||||||
7 | the case of a life insurance company allowed a | ||||||
8 | deduction for an increase in reserves for the tax | ||||||
9 | year); the
provisions of this
subparagraph are exempt | ||||||
10 | from the provisions of Section 250; | ||||||
11 | (J) An amount equal to all amounts included in such | ||||||
12 | total which are
exempt from taxation by this State | ||||||
13 | either by reason of its statutes or
Constitution
or by | ||||||
14 | reason of the Constitution, treaties or statutes of the | ||||||
15 | United States;
provided that, in the case of any | ||||||
16 | statute of this State that exempts income
derived from | ||||||
17 | bonds or other obligations from the tax imposed under | ||||||
18 | this Act,
the amount exempted shall be the interest net | ||||||
19 | of bond premium amortization; | ||||||
20 | (K) An amount equal to those dividends included in | ||||||
21 | such total
which were paid by a corporation which | ||||||
22 | conducts
business operations in a River Edge | ||||||
23 | Redevelopment Zone or zones created under the River | ||||||
24 | Edge Redevelopment Zone Act and conducts substantially | ||||||
25 | all of its
operations in a River Edge Redevelopment | ||||||
26 | Zone or zones. This subparagraph (K) is exempt from the |
| |||||||
| |||||||
1 | provisions of Section 250; | ||||||
2 | (L) An amount equal to those dividends included in | ||||||
3 | such total that
were paid by a corporation that | ||||||
4 | conducts business operations in a federally
designated | ||||||
5 | Foreign Trade Zone or Sub-Zone and that is designated a | ||||||
6 | High Impact
Business located in Illinois; provided | ||||||
7 | that dividends eligible for the
deduction provided in | ||||||
8 | subparagraph (K) of paragraph 2 of this subsection
| ||||||
9 | shall not be eligible for the deduction provided under | ||||||
10 | this subparagraph
(L); | ||||||
11 | (M) For any taxpayer that is a financial | ||||||
12 | organization within the meaning
of Section 304(c) of | ||||||
13 | this Act, an amount included in such total as interest
| ||||||
14 | income from a loan or loans made by such taxpayer to a | ||||||
15 | borrower, to the extent
that such a loan is secured by | ||||||
16 | property which is eligible for the River Edge | ||||||
17 | Redevelopment Zone Investment Credit. To determine the | ||||||
18 | portion of a loan or loans that is
secured by property | ||||||
19 | eligible for a Section 201(f) investment
credit to the | ||||||
20 | borrower, the entire principal amount of the loan or | ||||||
21 | loans
between the taxpayer and the borrower should be | ||||||
22 | divided into the basis of the
Section 201(f) investment | ||||||
23 | credit property which secures the
loan or loans, using | ||||||
24 | for this purpose the original basis of such property on
| ||||||
25 | the date that it was placed in service in the River | ||||||
26 | Edge Redevelopment Zone. The subtraction modification |
| |||||||
| |||||||
1 | available to taxpayer in any
year under this subsection | ||||||
2 | shall be that portion of the total interest paid
by the | ||||||
3 | borrower with respect to such loan attributable to the | ||||||
4 | eligible
property as calculated under the previous | ||||||
5 | sentence. This subparagraph (M) is exempt from the | ||||||
6 | provisions of Section 250; | ||||||
7 | (M-1) For any taxpayer that is a financial | ||||||
8 | organization within the
meaning of Section 304(c) of | ||||||
9 | this Act, an amount included in such total as
interest | ||||||
10 | income from a loan or loans made by such taxpayer to a | ||||||
11 | borrower,
to the extent that such a loan is secured by | ||||||
12 | property which is eligible for
the High Impact Business | ||||||
13 | Investment Credit. To determine the portion of a
loan | ||||||
14 | or loans that is secured by property eligible for a | ||||||
15 | Section 201(h) investment credit to the borrower, the | ||||||
16 | entire principal amount of
the loan or loans between | ||||||
17 | the taxpayer and the borrower should be divided into
| ||||||
18 | the basis of the Section 201(h) investment credit | ||||||
19 | property which
secures the loan or loans, using for | ||||||
20 | this purpose the original basis of such
property on the | ||||||
21 | date that it was placed in service in a federally | ||||||
22 | designated
Foreign Trade Zone or Sub-Zone located in | ||||||
23 | Illinois. No taxpayer that is
eligible for the | ||||||
24 | deduction provided in subparagraph (M) of paragraph | ||||||
25 | (2) of
this subsection shall be eligible for the | ||||||
26 | deduction provided under this
subparagraph (M-1). The |
| |||||||
| |||||||
1 | subtraction modification available to taxpayers in
any | ||||||
2 | year under this subsection shall be that portion of the | ||||||
3 | total interest
paid by the borrower with respect to | ||||||
4 | such loan attributable to the eligible
property as | ||||||
5 | calculated under the previous sentence; | ||||||
6 | (N) Two times any contribution made during the | ||||||
7 | taxable year to a
designated zone organization to the | ||||||
8 | extent that the contribution (i)
qualifies as a | ||||||
9 | charitable contribution under subsection (c) of | ||||||
10 | Section 170
of the Internal Revenue Code and (ii) must, | ||||||
11 | by its terms, be used for a
project approved by the | ||||||
12 | Department of Commerce and Economic Opportunity under | ||||||
13 | Section 11 of the Illinois Enterprise Zone Act or under | ||||||
14 | Section 10-10 of the River Edge Redevelopment Zone Act. | ||||||
15 | This subparagraph (N) is exempt from the provisions of | ||||||
16 | Section 250; | ||||||
17 | (O) An amount equal to: (i) 85% for taxable years | ||||||
18 | ending on or before
December 31, 1992, or, a percentage | ||||||
19 | equal to the percentage allowable under
Section | ||||||
20 | 243(a)(1) of the Internal Revenue Code of 1986 for | ||||||
21 | taxable years ending
after December 31, 1992, of the | ||||||
22 | amount by which dividends included in taxable
income | ||||||
23 | and received from a corporation that is not created or | ||||||
24 | organized under
the laws of the United States or any | ||||||
25 | state or political subdivision thereof,
including, for | ||||||
26 | taxable years ending on or after December 31, 1988, |
| |||||||
| |||||||
1 | dividends
received or deemed received or paid or deemed | ||||||
2 | paid under Sections 951 through
965 of the Internal | ||||||
3 | Revenue Code, exceed the amount of the modification
| ||||||
4 | provided under subparagraph (G) of paragraph (2) of | ||||||
5 | this subsection (b) which
is related to such dividends, | ||||||
6 | and including, for taxable years ending on or after | ||||||
7 | December 31, 2008, dividends received from a captive | ||||||
8 | real estate investment trust; plus (ii) 100% of the | ||||||
9 | amount by which dividends,
included in taxable income | ||||||
10 | and received, including, for taxable years ending on
or | ||||||
11 | after December 31, 1988, dividends received or deemed | ||||||
12 | received or paid or
deemed paid under Sections 951 | ||||||
13 | through 964 of the Internal Revenue Code and including, | ||||||
14 | for taxable years ending on or after December 31, 2008, | ||||||
15 | dividends received from a captive real estate | ||||||
16 | investment trust, from
any such corporation specified | ||||||
17 | in clause (i) that would but for the provisions
of | ||||||
18 | Section 1504 (b) (3) of the Internal Revenue Code be | ||||||
19 | treated as a member of
the affiliated group which | ||||||
20 | includes the dividend recipient, exceed the amount
of | ||||||
21 | the modification provided under subparagraph (G) of | ||||||
22 | paragraph (2) of this
subsection (b) which is related | ||||||
23 | to such dividends. This subparagraph (O) is exempt from | ||||||
24 | the provisions of Section 250 of this Act; | ||||||
25 | (P) An amount equal to any contribution made to a | ||||||
26 | job training project
established pursuant to the Tax |
| |||||||
| |||||||
1 | Increment Allocation Redevelopment Act; | ||||||
2 | (Q) An amount equal to the amount of the deduction | ||||||
3 | used to compute the
federal income tax credit for | ||||||
4 | restoration of substantial amounts held under
claim of | ||||||
5 | right for the taxable year pursuant to Section 1341 of | ||||||
6 | the
Internal Revenue Code; | ||||||
7 | (R) On and after July 20, 1999, in the case of an | ||||||
8 | attorney-in-fact with respect to whom an
interinsurer | ||||||
9 | or a reciprocal insurer has made the election under | ||||||
10 | Section 835 of
the Internal Revenue Code, 26 U.S.C. | ||||||
11 | 835, an amount equal to the excess, if
any, of the | ||||||
12 | amounts paid or incurred by that interinsurer or | ||||||
13 | reciprocal insurer
in the taxable year to the | ||||||
14 | attorney-in-fact over the deduction allowed to that
| ||||||
15 | interinsurer or reciprocal insurer with respect to the | ||||||
16 | attorney-in-fact under
Section 835(b) of the Internal | ||||||
17 | Revenue Code for the taxable year; the provisions of | ||||||
18 | this subparagraph are exempt from the provisions of | ||||||
19 | Section 250; | ||||||
20 | (S) For taxable years ending on or after December | ||||||
21 | 31, 1997, in the
case of a Subchapter
S corporation, an | ||||||
22 | amount equal to all amounts of income allocable to a
| ||||||
23 | shareholder subject to the Personal Property Tax | ||||||
24 | Replacement Income Tax imposed
by subsections (c) and | ||||||
25 | (d) of Section 201 of this Act, including amounts
| ||||||
26 | allocable to organizations exempt from federal income |
| |||||||
| |||||||
1 | tax by reason of Section
501(a) of the Internal Revenue | ||||||
2 | Code. This subparagraph (S) is exempt from
the | ||||||
3 | provisions of Section 250; | ||||||
4 | (T) For taxable years 2001 and thereafter, for the | ||||||
5 | taxable year in
which the bonus depreciation deduction
| ||||||
6 | is taken on the taxpayer's federal income tax return | ||||||
7 | under
subsection (k) of Section 168 of the Internal | ||||||
8 | Revenue Code and for each
applicable taxable year | ||||||
9 | thereafter, an amount equal to "x", where: | ||||||
10 | (1) "y" equals the amount of the depreciation | ||||||
11 | deduction taken for the
taxable year
on the | ||||||
12 | taxpayer's federal income tax return on property | ||||||
13 | for which the bonus
depreciation deduction
was | ||||||
14 | taken in any year under subsection (k) of Section | ||||||
15 | 168 of the Internal
Revenue Code, but not including | ||||||
16 | the bonus depreciation deduction; | ||||||
17 | (2) for taxable years ending on or before | ||||||
18 | December 31, 2005, "x" equals "y" multiplied by 30 | ||||||
19 | and then divided by 70 (or "y"
multiplied by | ||||||
20 | 0.429); and | ||||||
21 | (3) for taxable years ending after December | ||||||
22 | 31, 2005: | ||||||
23 | (i) for property on which a bonus | ||||||
24 | depreciation deduction of 30% of the adjusted | ||||||
25 | basis was taken, "x" equals "y" multiplied by | ||||||
26 | 30 and then divided by 70 (or "y"
multiplied by |
| |||||||
| |||||||
1 | 0.429); and | ||||||
2 | (ii) for property on which a bonus | ||||||
3 | depreciation deduction of 50% of the adjusted | ||||||
4 | basis was taken, "x" equals "y" multiplied by | ||||||
5 | 1.0. | ||||||
6 | The aggregate amount deducted under this | ||||||
7 | subparagraph in all taxable
years for any one piece of | ||||||
8 | property may not exceed the amount of the bonus
| ||||||
9 | depreciation deduction
taken on that property on the | ||||||
10 | taxpayer's federal income tax return under
subsection | ||||||
11 | (k) of Section 168 of the Internal Revenue Code. This | ||||||
12 | subparagraph (T) is exempt from the provisions of | ||||||
13 | Section 250; | ||||||
14 | (U) If the taxpayer sells, transfers, abandons, or | ||||||
15 | otherwise disposes of
property for which the taxpayer | ||||||
16 | was required in any taxable year to make an
addition | ||||||
17 | modification under subparagraph (E-10), then an amount | ||||||
18 | equal to that
addition modification. | ||||||
19 | If the taxpayer continues to own property through | ||||||
20 | the last day of the last tax year for which the | ||||||
21 | taxpayer may claim a depreciation deduction for | ||||||
22 | federal income tax purposes and for which the taxpayer | ||||||
23 | was required in any taxable year to make an addition | ||||||
24 | modification under subparagraph (E-10), then an amount | ||||||
25 | equal to that addition modification.
| ||||||
26 | The taxpayer is allowed to take the deduction under |
| |||||||
| |||||||
1 | this subparagraph
only once with respect to any one | ||||||
2 | piece of property. | ||||||
3 | This subparagraph (U) is exempt from the | ||||||
4 | provisions of Section 250; | ||||||
5 | (V) The amount of: (i) any interest income (net of | ||||||
6 | the deductions allocable thereto) taken into account | ||||||
7 | for the taxable year with respect to a transaction with | ||||||
8 | a taxpayer that is required to make an addition | ||||||
9 | modification with respect to such transaction under | ||||||
10 | Section 203(a)(2)(D-17), 203(b)(2)(E-12), | ||||||
11 | 203(c)(2)(G-12), or 203(d)(2)(D-7), but not to exceed | ||||||
12 | the amount of such addition modification,
(ii) any | ||||||
13 | income from intangible property (net of the deductions | ||||||
14 | allocable thereto) taken into account for the taxable | ||||||
15 | year with respect to a transaction with a taxpayer that | ||||||
16 | is required to make an addition modification with | ||||||
17 | respect to such transaction under Section | ||||||
18 | 203(a)(2)(D-18), 203(b)(2)(E-13), 203(c)(2)(G-13), or | ||||||
19 | 203(d)(2)(D-8), but not to exceed the amount of such | ||||||
20 | addition modification, and (iii) any insurance premium | ||||||
21 | income (net of deductions allocable thereto) taken | ||||||
22 | into account for the taxable year with respect to a | ||||||
23 | transaction with a taxpayer that is required to make an | ||||||
24 | addition modification with respect to such transaction | ||||||
25 | under Section 203(a)(2)(D-19), Section | ||||||
26 | 203(b)(2)(E-14), Section 203(c)(2)(G-14), or Section |
| |||||||
| |||||||
1 | 203(d)(2)(D-9), but not to exceed the amount of that | ||||||
2 | addition modification. This subparagraph (V) is exempt | ||||||
3 | from the provisions of Section 250;
| ||||||
4 | (W) An amount equal to the interest income taken | ||||||
5 | into account for the taxable year (net of the | ||||||
6 | deductions allocable thereto) with respect to | ||||||
7 | transactions with (i) a foreign person who would be a | ||||||
8 | member of the taxpayer's unitary business group but for | ||||||
9 | the fact that the foreign person's business activity | ||||||
10 | outside the United States is 80% or more of that | ||||||
11 | person's total business activity and (ii) for taxable | ||||||
12 | years ending on or after December 31, 2008, to a person | ||||||
13 | who would be a member of the same unitary business | ||||||
14 | group but for the fact that the person is prohibited | ||||||
15 | under Section 1501(a)(27) from being included in the | ||||||
16 | unitary business group because he or she is ordinarily | ||||||
17 | required to apportion business income under different | ||||||
18 | subsections of Section 304, but not to exceed the | ||||||
19 | addition modification required to be made for the same | ||||||
20 | taxable year under Section 203(b)(2)(E-12) for | ||||||
21 | interest paid, accrued, or incurred, directly or | ||||||
22 | indirectly, to the same person. This subparagraph (W) | ||||||
23 | is exempt from the provisions of Section 250;
| ||||||
24 | (X) An amount equal to the income from intangible | ||||||
25 | property taken into account for the taxable year (net | ||||||
26 | of the deductions allocable thereto) with respect to |
| |||||||
| |||||||
1 | transactions with (i) a foreign person who would be a | ||||||
2 | member of the taxpayer's unitary business group but for | ||||||
3 | the fact that the foreign person's business activity | ||||||
4 | outside the United States is 80% or more of that | ||||||
5 | person's total business activity and (ii) for taxable | ||||||
6 | years ending on or after December 31, 2008, to a person | ||||||
7 | who would be a member of the same unitary business | ||||||
8 | group but for the fact that the person is prohibited | ||||||
9 | under Section 1501(a)(27) from being included in the | ||||||
10 | unitary business group because he or she is ordinarily | ||||||
11 | required to apportion business income under different | ||||||
12 | subsections of Section 304, but not to exceed the | ||||||
13 | addition modification required to be made for the same | ||||||
14 | taxable year under Section 203(b)(2)(E-13) for | ||||||
15 | intangible expenses and costs paid, accrued, or | ||||||
16 | incurred, directly or indirectly, to the same foreign | ||||||
17 | person. This subparagraph (X) is exempt from the | ||||||
18 | provisions of Section 250;
| ||||||
19 | (Y) For taxable years ending on or after December | ||||||
20 | 31, 2011, in the case of a taxpayer who was required to | ||||||
21 | add back any insurance premiums under Section | ||||||
22 | 203(b)(2)(E-14), such taxpayer may elect to subtract | ||||||
23 | that part of a reimbursement received from the | ||||||
24 | insurance company equal to the amount of the expense or | ||||||
25 | loss (including expenses incurred by the insurance | ||||||
26 | company) that would have been taken into account as a |
| |||||||
| |||||||
1 | deduction for federal income tax purposes if the | ||||||
2 | expense or loss had been uninsured. If a taxpayer makes | ||||||
3 | the election provided for by this subparagraph (Y), the | ||||||
4 | insurer to which the premiums were paid must add back | ||||||
5 | to income the amount subtracted by the taxpayer | ||||||
6 | pursuant to this subparagraph (Y). This subparagraph | ||||||
7 | (Y) is exempt from the provisions of Section 250; and | ||||||
8 | (Z) The difference between the nondeductible | ||||||
9 | controlled foreign corporation dividends under Section | ||||||
10 | 965(e)(3) of the Internal Revenue Code over the taxable | ||||||
11 | income of the taxpayer, computed without regard to | ||||||
12 | Section 965(e)(2)(A) of the Internal Revenue Code, and | ||||||
13 | without regard to any net operating loss deduction. | ||||||
14 | This subparagraph (Z) is exempt from the provisions of | ||||||
15 | Section 250. | ||||||
16 | (3) Special rule. For purposes of paragraph (2) (A), | ||||||
17 | "gross income"
in the case of a life insurance company, for | ||||||
18 | tax years ending on and after
December 31, 1994,
and prior | ||||||
19 | to December 31, 2011, shall mean the gross investment | ||||||
20 | income for the taxable year and, for tax years ending on or | ||||||
21 | after December 31, 2011, shall mean all amounts included in | ||||||
22 | life insurance gross income under Section 803(a)(3) of the | ||||||
23 | Internal Revenue Code. | ||||||
24 | (c) Trusts and estates. | ||||||
25 | (1) In general. In the case of a trust or estate, base |
| |||||||
| |||||||
1 | income means
an amount equal to the taxpayer's taxable | ||||||
2 | income for the taxable year as
modified by paragraph (2). | ||||||
3 | (2) Modifications. Subject to the provisions of | ||||||
4 | paragraph (3), the
taxable income referred to in paragraph | ||||||
5 | (1) shall be modified by adding
thereto the sum of the | ||||||
6 | following amounts: | ||||||
7 | (A) An amount equal to all amounts paid or accrued | ||||||
8 | to the taxpayer
as interest or dividends during the | ||||||
9 | taxable year to the extent excluded
from gross income | ||||||
10 | in the computation of taxable income; | ||||||
11 | (B) In the case of (i) an estate, $600; (ii) a | ||||||
12 | trust which, under
its governing instrument, is | ||||||
13 | required to distribute all of its income
currently, | ||||||
14 | $300; and (iii) any other trust, $100, but in each such | ||||||
15 | case,
only to the extent such amount was deducted in | ||||||
16 | the computation of
taxable income; | ||||||
17 | (C) An amount equal to the amount of tax imposed by | ||||||
18 | this Act to the
extent deducted from gross income in | ||||||
19 | the computation of taxable income
for the taxable year; | ||||||
20 | (D) The amount of any net operating loss deduction | ||||||
21 | taken in arriving at
taxable income, other than a net | ||||||
22 | operating loss carried forward from a
taxable year | ||||||
23 | ending prior to December 31, 1986; | ||||||
24 | (E) For taxable years in which a net operating loss | ||||||
25 | carryback or
carryforward from a taxable year ending | ||||||
26 | prior to December 31, 1986 is an
element of taxable |
| |||||||
| |||||||
1 | income under paragraph (1) of subsection (e) or | ||||||
2 | subparagraph
(E) of paragraph (2) of subsection (e), | ||||||
3 | the amount by which addition
modifications other than | ||||||
4 | those provided by this subparagraph (E) exceeded
| ||||||
5 | subtraction modifications in such taxable year, with | ||||||
6 | the following limitations
applied in the order that | ||||||
7 | they are listed: | ||||||
8 | (i) the addition modification relating to the | ||||||
9 | net operating loss
carried back or forward to the | ||||||
10 | taxable year from any taxable year ending
prior to | ||||||
11 | December 31, 1986 shall be reduced by the amount of | ||||||
12 | addition
modification under this subparagraph (E) | ||||||
13 | which related to that net
operating loss and which | ||||||
14 | was taken into account in calculating the base
| ||||||
15 | income of an earlier taxable year, and | ||||||
16 | (ii) the addition modification relating to the | ||||||
17 | net operating loss
carried back or forward to the | ||||||
18 | taxable year from any taxable year ending
prior to | ||||||
19 | December 31, 1986 shall not exceed the amount of | ||||||
20 | such carryback or
carryforward; | ||||||
21 | For taxable years in which there is a net operating | ||||||
22 | loss carryback or
carryforward from more than one other | ||||||
23 | taxable year ending prior to December
31, 1986, the | ||||||
24 | addition modification provided in this subparagraph | ||||||
25 | (E) shall
be the sum of the amounts computed | ||||||
26 | independently under the preceding
provisions of this |
| |||||||
| |||||||
1 | subparagraph (E) for each such taxable year; | ||||||
2 | (F) For taxable years ending on or after January 1, | ||||||
3 | 1989, an amount
equal to the tax deducted pursuant to | ||||||
4 | Section 164 of the Internal Revenue
Code if the trust | ||||||
5 | or estate is claiming the same tax for purposes of the
| ||||||
6 | Illinois foreign tax credit under Section 601 of this | ||||||
7 | Act; | ||||||
8 | (G) An amount equal to the amount of the capital | ||||||
9 | gain deduction
allowable under the Internal Revenue | ||||||
10 | Code, to the extent deducted from
gross income in the | ||||||
11 | computation of taxable income; | ||||||
12 | (G-5) For taxable years ending after December 31, | ||||||
13 | 1997, an
amount equal to any eligible remediation costs | ||||||
14 | that the trust or estate
deducted in computing adjusted | ||||||
15 | gross income and for which the trust
or estate claims a | ||||||
16 | credit under subsection (l) of Section 201; | ||||||
17 | (G-10) For taxable years 2001 and thereafter, an | ||||||
18 | amount equal to the
bonus depreciation deduction taken | ||||||
19 | on the taxpayer's federal income tax return for the | ||||||
20 | taxable
year under subsection (k) of Section 168 of the | ||||||
21 | Internal Revenue Code; and | ||||||
22 | (G-11) If the taxpayer sells, transfers, abandons, | ||||||
23 | or otherwise disposes of property for which the | ||||||
24 | taxpayer was required in any taxable year to
make an | ||||||
25 | addition modification under subparagraph (G-10), then | ||||||
26 | an amount equal
to the aggregate amount of the |
| |||||||
| |||||||
1 | deductions taken in all taxable
years under | ||||||
2 | subparagraph (R) with respect to that property. | ||||||
3 | If the taxpayer continues to own property through | ||||||
4 | the last day of the last tax year for which the | ||||||
5 | taxpayer may claim a depreciation deduction for | ||||||
6 | federal income tax purposes and for which the taxpayer | ||||||
7 | was allowed in any taxable year to make a subtraction | ||||||
8 | modification under subparagraph (R), then an amount | ||||||
9 | equal to that subtraction modification.
| ||||||
10 | The taxpayer is required to make the addition | ||||||
11 | modification under this
subparagraph
only once with | ||||||
12 | respect to any one piece of property; | ||||||
13 | (G-12) An amount equal to the amount otherwise | ||||||
14 | allowed as a deduction in computing base income for | ||||||
15 | interest paid, accrued, or incurred, directly or | ||||||
16 | indirectly, (i) for taxable years ending on or after | ||||||
17 | December 31, 2004, to a foreign person who would be a | ||||||
18 | member of the same unitary business group but for the | ||||||
19 | fact that the foreign person's business activity | ||||||
20 | outside the United States is 80% or more of the foreign | ||||||
21 | person's total business activity and (ii) for taxable | ||||||
22 | years ending on or after December 31, 2008, to a person | ||||||
23 | who would be a member of the same unitary business | ||||||
24 | group but for the fact that the person is prohibited | ||||||
25 | under Section 1501(a)(27) from being included in the | ||||||
26 | unitary business group because he or she is ordinarily |
| |||||||
| |||||||
1 | required to apportion business income under different | ||||||
2 | subsections of Section 304. The addition modification | ||||||
3 | required by this subparagraph shall be reduced to the | ||||||
4 | extent that dividends were included in base income of | ||||||
5 | the unitary group for the same taxable year and | ||||||
6 | received by the taxpayer or by a member of the | ||||||
7 | taxpayer's unitary business group (including amounts | ||||||
8 | included in gross income pursuant to Sections 951 | ||||||
9 | through 964 of the Internal Revenue Code and amounts | ||||||
10 | included in gross income under Section 78 of the | ||||||
11 | Internal Revenue Code) with respect to the stock of the | ||||||
12 | same person to whom the interest was paid, accrued, or | ||||||
13 | incurred.
| ||||||
14 | This paragraph shall not apply to the following:
| ||||||
15 | (i) an item of interest paid, accrued, or | ||||||
16 | incurred, directly or indirectly, to a person who | ||||||
17 | is subject in a foreign country or state, other | ||||||
18 | than a state which requires mandatory unitary | ||||||
19 | reporting, to a tax on or measured by net income | ||||||
20 | with respect to such interest; or | ||||||
21 | (ii) an item of interest paid, accrued, or | ||||||
22 | incurred, directly or indirectly, to a person if | ||||||
23 | the taxpayer can establish, based on a | ||||||
24 | preponderance of the evidence, both of the | ||||||
25 | following: | ||||||
26 | (a) the person, during the same taxable |
| |||||||
| |||||||
1 | year, paid, accrued, or incurred, the interest | ||||||
2 | to a person that is not a related member, and | ||||||
3 | (b) the transaction giving rise to the | ||||||
4 | interest expense between the taxpayer and the | ||||||
5 | person did not have as a principal purpose the | ||||||
6 | avoidance of Illinois income tax, and is paid | ||||||
7 | pursuant to a contract or agreement that | ||||||
8 | reflects an arm's-length interest rate and | ||||||
9 | terms; or
| ||||||
10 | (iii) the taxpayer can establish, based on | ||||||
11 | clear and convincing evidence, that the interest | ||||||
12 | paid, accrued, or incurred relates to a contract or | ||||||
13 | agreement entered into at arm's-length rates and | ||||||
14 | terms and the principal purpose for the payment is | ||||||
15 | not federal or Illinois tax avoidance; or
| ||||||
16 | (iv) an item of interest paid, accrued, or | ||||||
17 | incurred, directly or indirectly, to a person if | ||||||
18 | the taxpayer establishes by clear and convincing | ||||||
19 | evidence that the adjustments are unreasonable; or | ||||||
20 | if the taxpayer and the Director agree in writing | ||||||
21 | to the application or use of an alternative method | ||||||
22 | of apportionment under Section 304(f).
| ||||||
23 | Nothing in this subsection shall preclude the | ||||||
24 | Director from making any other adjustment | ||||||
25 | otherwise allowed under Section 404 of this Act for | ||||||
26 | any tax year beginning after the effective date of |
| |||||||
| |||||||
1 | this amendment provided such adjustment is made | ||||||
2 | pursuant to regulation adopted by the Department | ||||||
3 | and such regulations provide methods and standards | ||||||
4 | by which the Department will utilize its authority | ||||||
5 | under Section 404 of this Act;
| ||||||
6 | (G-13) An amount equal to the amount of intangible | ||||||
7 | expenses and costs otherwise allowed as a deduction in | ||||||
8 | computing base income, and that were paid, accrued, or | ||||||
9 | incurred, directly or indirectly, (i) for taxable | ||||||
10 | years ending on or after December 31, 2004, to a | ||||||
11 | foreign person who would be a member of the same | ||||||
12 | unitary business group but for the fact that the | ||||||
13 | foreign person's business activity outside the United | ||||||
14 | States is 80% or more of that person's total business | ||||||
15 | activity and (ii) for taxable years ending on or after | ||||||
16 | December 31, 2008, to a person who would be a member of | ||||||
17 | the same unitary business group but for the fact that | ||||||
18 | the person is prohibited under Section 1501(a)(27) | ||||||
19 | from being included in the unitary business group | ||||||
20 | because he or she is ordinarily required to apportion | ||||||
21 | business income under different subsections of Section | ||||||
22 | 304. The addition modification required by this | ||||||
23 | subparagraph shall be reduced to the extent that | ||||||
24 | dividends were included in base income of the unitary | ||||||
25 | group for the same taxable year and received by the | ||||||
26 | taxpayer or by a member of the taxpayer's unitary |
| |||||||
| |||||||
1 | business group (including amounts included in gross | ||||||
2 | income pursuant to Sections 951 through 964 of the | ||||||
3 | Internal Revenue Code and amounts included in gross | ||||||
4 | income under Section 78 of the Internal Revenue Code) | ||||||
5 | with respect to the stock of the same person to whom | ||||||
6 | the intangible expenses and costs were directly or | ||||||
7 | indirectly paid, incurred, or accrued. The preceding | ||||||
8 | sentence shall not apply to the extent that the same | ||||||
9 | dividends caused a reduction to the addition | ||||||
10 | modification required under Section 203(c)(2)(G-12) of | ||||||
11 | this Act. As used in this subparagraph, the term | ||||||
12 | "intangible expenses and costs" includes: (1) | ||||||
13 | expenses, losses, and costs for or related to the | ||||||
14 | direct or indirect acquisition, use, maintenance or | ||||||
15 | management, ownership, sale, exchange, or any other | ||||||
16 | disposition of intangible property; (2) losses | ||||||
17 | incurred, directly or indirectly, from factoring | ||||||
18 | transactions or discounting transactions; (3) royalty, | ||||||
19 | patent, technical, and copyright fees; (4) licensing | ||||||
20 | fees; and (5) other similar expenses and costs. For | ||||||
21 | purposes of this subparagraph, "intangible property" | ||||||
22 | includes patents, patent applications, trade names, | ||||||
23 | trademarks, service marks, copyrights, mask works, | ||||||
24 | trade secrets, and similar types of intangible assets. | ||||||
25 | This paragraph shall not apply to the following: | ||||||
26 | (i) any item of intangible expenses or costs |
| |||||||
| |||||||
1 | paid, accrued, or incurred, directly or | ||||||
2 | indirectly, from a transaction with a person who is | ||||||
3 | subject in a foreign country or state, other than a | ||||||
4 | state which requires mandatory unitary reporting, | ||||||
5 | to a tax on or measured by net income with respect | ||||||
6 | to such item; or | ||||||
7 | (ii) any item of intangible expense or cost | ||||||
8 | paid, accrued, or incurred, directly or | ||||||
9 | indirectly, if the taxpayer can establish, based | ||||||
10 | on a preponderance of the evidence, both of the | ||||||
11 | following: | ||||||
12 | (a) the person during the same taxable | ||||||
13 | year paid, accrued, or incurred, the | ||||||
14 | intangible expense or cost to a person that is | ||||||
15 | not a related member, and | ||||||
16 | (b) the transaction giving rise to the | ||||||
17 | intangible expense or cost between the | ||||||
18 | taxpayer and the person did not have as a | ||||||
19 | principal purpose the avoidance of Illinois | ||||||
20 | income tax, and is paid pursuant to a contract | ||||||
21 | or agreement that reflects arm's-length terms; | ||||||
22 | or | ||||||
23 | (iii) any item of intangible expense or cost | ||||||
24 | paid, accrued, or incurred, directly or | ||||||
25 | indirectly, from a transaction with a person if the | ||||||
26 | taxpayer establishes by clear and convincing |
| |||||||
| |||||||
1 | evidence, that the adjustments are unreasonable; | ||||||
2 | or if the taxpayer and the Director agree in | ||||||
3 | writing to the application or use of an alternative | ||||||
4 | method of apportionment under Section 304(f);
| ||||||
5 | Nothing in this subsection shall preclude the | ||||||
6 | Director from making any other adjustment | ||||||
7 | otherwise allowed under Section 404 of this Act for | ||||||
8 | any tax year beginning after the effective date of | ||||||
9 | this amendment provided such adjustment is made | ||||||
10 | pursuant to regulation adopted by the Department | ||||||
11 | and such regulations provide methods and standards | ||||||
12 | by which the Department will utilize its authority | ||||||
13 | under Section 404 of this Act;
| ||||||
14 | (G-14) For taxable years ending on or after | ||||||
15 | December 31, 2008, an amount equal to the amount of | ||||||
16 | insurance premium expenses and costs otherwise allowed | ||||||
17 | as a deduction in computing base income, and that were | ||||||
18 | paid, accrued, or incurred, directly or indirectly, to | ||||||
19 | a person who would be a member of the same unitary | ||||||
20 | business group but for the fact that the person is | ||||||
21 | prohibited under Section 1501(a)(27) from being | ||||||
22 | included in the unitary business group because he or | ||||||
23 | she is ordinarily required to apportion business | ||||||
24 | income under different subsections of Section 304. The | ||||||
25 | addition modification required by this subparagraph | ||||||
26 | shall be reduced to the extent that dividends were |
| |||||||
| |||||||
1 | included in base income of the unitary group for the | ||||||
2 | same taxable year and received by the taxpayer or by a | ||||||
3 | member of the taxpayer's unitary business group | ||||||
4 | (including amounts included in gross income under | ||||||
5 | Sections 951 through 964 of the Internal Revenue Code | ||||||
6 | and amounts included in gross income under Section 78 | ||||||
7 | of the Internal Revenue Code) with respect to the stock | ||||||
8 | of the same person to whom the premiums and costs were | ||||||
9 | directly or indirectly paid, incurred, or accrued. The | ||||||
10 | preceding sentence does not apply to the extent that | ||||||
11 | the same dividends caused a reduction to the addition | ||||||
12 | modification required under Section 203(c)(2)(G-12) or | ||||||
13 | Section 203(c)(2)(G-13) of this Act; | ||||||
14 | (G-15) An amount equal to the credit allowable to | ||||||
15 | the taxpayer under Section 218(a) of this Act, | ||||||
16 | determined without regard to Section 218(c) of this | ||||||
17 | Act; | ||||||
18 | and by deducting from the total so obtained the sum of the | ||||||
19 | following
amounts: | ||||||
20 | (H) An amount equal to all amounts included in such | ||||||
21 | total pursuant
to the provisions of Sections 402(a), | ||||||
22 | 402(c), 403(a), 403(b), 406(a), 407(a)
and 408 of the | ||||||
23 | Internal Revenue Code or included in such total as
| ||||||
24 | distributions under the provisions of any retirement | ||||||
25 | or disability plan for
employees of any governmental | ||||||
26 | agency or unit, or retirement payments to
retired |
| |||||||
| |||||||
1 | partners, which payments are excluded in computing net | ||||||
2 | earnings
from self employment by Section 1402 of the | ||||||
3 | Internal Revenue Code and
regulations adopted pursuant | ||||||
4 | thereto; | ||||||
5 | (I) The valuation limitation amount; | ||||||
6 | (J) An amount equal to the amount of any tax | ||||||
7 | imposed by this Act
which was refunded to the taxpayer | ||||||
8 | and included in such total for the
taxable year; | ||||||
9 | (K) An amount equal to all amounts included in | ||||||
10 | taxable income as
modified by subparagraphs (A), (B), | ||||||
11 | (C), (D), (E), (F) and (G) which
are exempt from | ||||||
12 | taxation by this State either by reason of its statutes | ||||||
13 | or
Constitution
or by reason of the Constitution, | ||||||
14 | treaties or statutes of the United States;
provided | ||||||
15 | that, in the case of any statute of this State that | ||||||
16 | exempts income
derived from bonds or other obligations | ||||||
17 | from the tax imposed under this Act,
the amount | ||||||
18 | exempted shall be the interest net of bond premium | ||||||
19 | amortization; | ||||||
20 | (L) With the exception of any amounts subtracted | ||||||
21 | under subparagraph
(K),
an amount equal to the sum of | ||||||
22 | all amounts disallowed as
deductions by (i) Sections | ||||||
23 | 171(a) (2) and 265(a)(2) of the Internal Revenue
Code, | ||||||
24 | and all amounts of expenses allocable
to interest and | ||||||
25 | disallowed as deductions by Section 265(1) of the | ||||||
26 | Internal
Revenue Code;
and (ii) for taxable years
|
| |||||||
| |||||||
1 | ending on or after August 13, 1999, Sections
171(a)(2), | ||||||
2 | 265,
280C, and 832(b)(5)(B)(i) of the Internal Revenue | ||||||
3 | Code, plus, (iii) for taxable years ending on or after | ||||||
4 | December 31, 2011, Section 45G(e)(3) of the Internal | ||||||
5 | Revenue Code and, for taxable years ending on or after | ||||||
6 | December 31, 2008, any amount included in gross income | ||||||
7 | under Section 87 of the Internal Revenue Code; the | ||||||
8 | provisions of this
subparagraph are exempt from the | ||||||
9 | provisions of Section 250; | ||||||
10 | (M) An amount equal to those dividends included in | ||||||
11 | such total
which were paid by a corporation which | ||||||
12 | conducts business operations in a River Edge | ||||||
13 | Redevelopment Zone or zones created under the River | ||||||
14 | Edge Redevelopment Zone Act and
conducts substantially | ||||||
15 | all of its operations in a River Edge Redevelopment | ||||||
16 | Zone or zones. This subparagraph (M) is exempt from the | ||||||
17 | provisions of Section 250; | ||||||
18 | (N) An amount equal to any contribution made to a | ||||||
19 | job training
project established pursuant to the Tax | ||||||
20 | Increment Allocation
Redevelopment Act; | ||||||
21 | (O) An amount equal to those dividends included in | ||||||
22 | such total
that were paid by a corporation that | ||||||
23 | conducts business operations in a
federally designated | ||||||
24 | Foreign Trade Zone or Sub-Zone and that is designated
a | ||||||
25 | High Impact Business located in Illinois; provided | ||||||
26 | that dividends eligible
for the deduction provided in |
| |||||||
| |||||||
1 | subparagraph (M) of paragraph (2) of this
subsection | ||||||
2 | shall not be eligible for the deduction provided under | ||||||
3 | this
subparagraph (O); | ||||||
4 | (P) An amount equal to the amount of the deduction | ||||||
5 | used to compute the
federal income tax credit for | ||||||
6 | restoration of substantial amounts held under
claim of | ||||||
7 | right for the taxable year pursuant to Section 1341 of | ||||||
8 | the
Internal Revenue Code; | ||||||
9 | (Q) For taxable year 1999 and thereafter, an amount | ||||||
10 | equal to the
amount of any
(i) distributions, to the | ||||||
11 | extent includible in gross income for
federal income | ||||||
12 | tax purposes, made to the taxpayer because of
his or | ||||||
13 | her status as a victim of
persecution for racial or | ||||||
14 | religious reasons by Nazi Germany or any other Axis
| ||||||
15 | regime or as an heir of the victim and (ii) items
of | ||||||
16 | income, to the extent
includible in gross income for | ||||||
17 | federal income tax purposes, attributable to,
derived | ||||||
18 | from or in any way related to assets stolen from, | ||||||
19 | hidden from, or
otherwise lost to a victim of
| ||||||
20 | persecution for racial or religious reasons by Nazi
| ||||||
21 | Germany or any other Axis regime
immediately prior to, | ||||||
22 | during, and immediately after World War II, including,
| ||||||
23 | but
not limited to, interest on the proceeds receivable | ||||||
24 | as insurance
under policies issued to a victim of | ||||||
25 | persecution for racial or religious
reasons by Nazi | ||||||
26 | Germany or any other Axis regime by European insurance
|
| |||||||
| |||||||
1 | companies
immediately prior to and during World War II;
| ||||||
2 | provided, however, this subtraction from federal | ||||||
3 | adjusted gross income does not
apply to assets acquired | ||||||
4 | with such assets or with the proceeds from the sale of
| ||||||
5 | such assets; provided, further, this paragraph shall | ||||||
6 | only apply to a taxpayer
who was the first recipient of | ||||||
7 | such assets after their recovery and who is a
victim of
| ||||||
8 | persecution for racial or religious reasons
by Nazi | ||||||
9 | Germany or any other Axis regime or as an heir of the | ||||||
10 | victim. The
amount of and the eligibility for any | ||||||
11 | public assistance, benefit, or
similar entitlement is | ||||||
12 | not affected by the inclusion of items (i) and (ii) of
| ||||||
13 | this paragraph in gross income for federal income tax | ||||||
14 | purposes.
This paragraph is exempt from the provisions | ||||||
15 | of Section 250; | ||||||
16 | (R) For taxable years 2001 and thereafter, for the | ||||||
17 | taxable year in
which the bonus depreciation deduction
| ||||||
18 | is taken on the taxpayer's federal income tax return | ||||||
19 | under
subsection (k) of Section 168 of the Internal | ||||||
20 | Revenue Code and for each
applicable taxable year | ||||||
21 | thereafter, an amount equal to "x", where: | ||||||
22 | (1) "y" equals the amount of the depreciation | ||||||
23 | deduction taken for the
taxable year
on the | ||||||
24 | taxpayer's federal income tax return on property | ||||||
25 | for which the bonus
depreciation deduction
was | ||||||
26 | taken in any year under subsection (k) of Section |
| |||||||
| |||||||
1 | 168 of the Internal
Revenue Code, but not including | ||||||
2 | the bonus depreciation deduction; | ||||||
3 | (2) for taxable years ending on or before | ||||||
4 | December 31, 2005, "x" equals "y" multiplied by 30 | ||||||
5 | and then divided by 70 (or "y"
multiplied by | ||||||
6 | 0.429); and | ||||||
7 | (3) for taxable years ending after December | ||||||
8 | 31, 2005: | ||||||
9 | (i) for property on which a bonus | ||||||
10 | depreciation deduction of 30% of the adjusted | ||||||
11 | basis was taken, "x" equals "y" multiplied by | ||||||
12 | 30 and then divided by 70 (or "y"
multiplied by | ||||||
13 | 0.429); and | ||||||
14 | (ii) for property on which a bonus | ||||||
15 | depreciation deduction of 50% of the adjusted | ||||||
16 | basis was taken, "x" equals "y" multiplied by | ||||||
17 | 1.0. | ||||||
18 | The aggregate amount deducted under this | ||||||
19 | subparagraph in all taxable
years for any one piece of | ||||||
20 | property may not exceed the amount of the bonus
| ||||||
21 | depreciation deduction
taken on that property on the | ||||||
22 | taxpayer's federal income tax return under
subsection | ||||||
23 | (k) of Section 168 of the Internal Revenue Code. This | ||||||
24 | subparagraph (R) is exempt from the provisions of | ||||||
25 | Section 250; | ||||||
26 | (S) If the taxpayer sells, transfers, abandons, or |
| |||||||
| |||||||
1 | otherwise disposes of
property for which the taxpayer | ||||||
2 | was required in any taxable year to make an
addition | ||||||
3 | modification under subparagraph (G-10), then an amount | ||||||
4 | equal to that
addition modification. | ||||||
5 | If the taxpayer continues to own property through | ||||||
6 | the last day of the last tax year for which the | ||||||
7 | taxpayer may claim a depreciation deduction for | ||||||
8 | federal income tax purposes and for which the taxpayer | ||||||
9 | was required in any taxable year to make an addition | ||||||
10 | modification under subparagraph (G-10), then an amount | ||||||
11 | equal to that addition modification.
| ||||||
12 | The taxpayer is allowed to take the deduction under | ||||||
13 | this subparagraph
only once with respect to any one | ||||||
14 | piece of property. | ||||||
15 | This subparagraph (S) is exempt from the | ||||||
16 | provisions of Section 250; | ||||||
17 | (T) The amount of (i) any interest income (net of | ||||||
18 | the deductions allocable thereto) taken into account | ||||||
19 | for the taxable year with respect to a transaction with | ||||||
20 | a taxpayer that is required to make an addition | ||||||
21 | modification with respect to such transaction under | ||||||
22 | Section 203(a)(2)(D-17), 203(b)(2)(E-12), | ||||||
23 | 203(c)(2)(G-12), or 203(d)(2)(D-7), but not to exceed | ||||||
24 | the amount of such addition modification and
(ii) any | ||||||
25 | income from intangible property (net of the deductions | ||||||
26 | allocable thereto) taken into account for the taxable |
| |||||||
| |||||||
1 | year with respect to a transaction with a taxpayer that | ||||||
2 | is required to make an addition modification with | ||||||
3 | respect to such transaction under Section | ||||||
4 | 203(a)(2)(D-18), 203(b)(2)(E-13), 203(c)(2)(G-13), or | ||||||
5 | 203(d)(2)(D-8), but not to exceed the amount of such | ||||||
6 | addition modification. This subparagraph (T) is exempt | ||||||
7 | from the provisions of Section 250;
| ||||||
8 | (U) An amount equal to the interest income taken | ||||||
9 | into account for the taxable year (net of the | ||||||
10 | deductions allocable thereto) with respect to | ||||||
11 | transactions with (i) a foreign person who would be a | ||||||
12 | member of the taxpayer's unitary business group but for | ||||||
13 | the fact the foreign person's business activity | ||||||
14 | outside the United States is 80% or more of that | ||||||
15 | person's total business activity and (ii) for taxable | ||||||
16 | years ending on or after December 31, 2008, to a person | ||||||
17 | who would be a member of the same unitary business | ||||||
18 | group but for the fact that the person is prohibited | ||||||
19 | under Section 1501(a)(27) from being included in the | ||||||
20 | unitary business group because he or she is ordinarily | ||||||
21 | required to apportion business income under different | ||||||
22 | subsections of Section 304, but not to exceed the | ||||||
23 | addition modification required to be made for the same | ||||||
24 | taxable year under Section 203(c)(2)(G-12) for | ||||||
25 | interest paid, accrued, or incurred, directly or | ||||||
26 | indirectly, to the same person. This subparagraph (U) |
| |||||||
| |||||||
1 | is exempt from the provisions of Section 250; | ||||||
2 | (V) An amount equal to the income from intangible | ||||||
3 | property taken into account for the taxable year (net | ||||||
4 | of the deductions allocable thereto) with respect to | ||||||
5 | transactions with (i) a foreign person who would be a | ||||||
6 | member of the taxpayer's unitary business group but for | ||||||
7 | the fact that the foreign person's business activity | ||||||
8 | outside the United States is 80% or more of that | ||||||
9 | person's total business activity and (ii) for taxable | ||||||
10 | years ending on or after December 31, 2008, to a person | ||||||
11 | who would be a member of the same unitary business | ||||||
12 | group but for the fact that the person is prohibited | ||||||
13 | under Section 1501(a)(27) from being included in the | ||||||
14 | unitary business group because he or she is ordinarily | ||||||
15 | required to apportion business income under different | ||||||
16 | subsections of Section 304, but not to exceed the | ||||||
17 | addition modification required to be made for the same | ||||||
18 | taxable year under Section 203(c)(2)(G-13) for | ||||||
19 | intangible expenses and costs paid, accrued, or | ||||||
20 | incurred, directly or indirectly, to the same foreign | ||||||
21 | person. This subparagraph (V) is exempt from the | ||||||
22 | provisions of Section 250;
| ||||||
23 | (W) in the case of an estate, an amount equal to | ||||||
24 | all amounts included in such total pursuant to the | ||||||
25 | provisions of Section 111 of the Internal Revenue Code | ||||||
26 | as a recovery of items previously deducted by the |
| |||||||
| |||||||
1 | decedent from adjusted gross income in the computation | ||||||
2 | of taxable income. This subparagraph (W) is exempt from | ||||||
3 | Section 250; | ||||||
4 | (X) an amount equal to the refund included in such | ||||||
5 | total of any tax deducted for federal income tax | ||||||
6 | purposes, to the extent that deduction was added back | ||||||
7 | under subparagraph (F). This subparagraph (X) is | ||||||
8 | exempt from the provisions of Section 250; and | ||||||
9 | (Y) For taxable years ending on or after December | ||||||
10 | 31, 2011, in the case of a taxpayer who was required to | ||||||
11 | add back any insurance premiums under Section | ||||||
12 | 203(c)(2)(G-14), such taxpayer may elect to subtract | ||||||
13 | that part of a reimbursement received from the | ||||||
14 | insurance company equal to the amount of the expense or | ||||||
15 | loss (including expenses incurred by the insurance | ||||||
16 | company) that would have been taken into account as a | ||||||
17 | deduction for federal income tax purposes if the | ||||||
18 | expense or loss had been uninsured. If a taxpayer makes | ||||||
19 | the election provided for by this subparagraph (Y), the | ||||||
20 | insurer to which the premiums were paid must add back | ||||||
21 | to income the amount subtracted by the taxpayer | ||||||
22 | pursuant to this subparagraph (Y). This subparagraph | ||||||
23 | (Y) is exempt from the provisions of Section 250. | ||||||
24 | (3) Limitation. The amount of any modification | ||||||
25 | otherwise required
under this subsection shall, under | ||||||
26 | regulations prescribed by the
Department, be adjusted by |
| |||||||
| |||||||
1 | any amounts included therein which were
properly paid, | ||||||
2 | credited, or required to be distributed, or permanently set
| ||||||
3 | aside for charitable purposes pursuant to Internal Revenue | ||||||
4 | Code Section
642(c) during the taxable year. | ||||||
5 | (d) Partnerships. | ||||||
6 | (1) In general. In the case of a partnership, base | ||||||
7 | income means an
amount equal to the taxpayer's taxable | ||||||
8 | income for the taxable year as
modified by paragraph (2). | ||||||
9 | (2) Modifications. The taxable income referred to in | ||||||
10 | paragraph (1)
shall be modified by adding thereto the sum | ||||||
11 | of the following amounts: | ||||||
12 | (A) An amount equal to all amounts paid or accrued | ||||||
13 | to the taxpayer as
interest or dividends during the | ||||||
14 | taxable year to the extent excluded from
gross income | ||||||
15 | in the computation of taxable income; | ||||||
16 | (B) An amount equal to the amount of tax imposed by | ||||||
17 | this Act to the
extent deducted from gross income for | ||||||
18 | the taxable year; | ||||||
19 | (C) The amount of deductions allowed to the | ||||||
20 | partnership pursuant to
Section 707 (c) of the Internal | ||||||
21 | Revenue Code in calculating its taxable income; | ||||||
22 | (D) An amount equal to the amount of the capital | ||||||
23 | gain deduction
allowable under the Internal Revenue | ||||||
24 | Code, to the extent deducted from
gross income in the | ||||||
25 | computation of taxable income; |
| |||||||
| |||||||
1 | (D-5) For taxable years 2001 and thereafter, an | ||||||
2 | amount equal to the
bonus depreciation deduction taken | ||||||
3 | on the taxpayer's federal income tax return for the | ||||||
4 | taxable
year under subsection (k) of Section 168 of the | ||||||
5 | Internal Revenue Code; | ||||||
6 | (D-6) If the taxpayer sells, transfers, abandons, | ||||||
7 | or otherwise disposes of
property for which the | ||||||
8 | taxpayer was required in any taxable year to make an
| ||||||
9 | addition modification under subparagraph (D-5), then | ||||||
10 | an amount equal to the
aggregate amount of the | ||||||
11 | deductions taken in all taxable years
under | ||||||
12 | subparagraph (O) with respect to that property. | ||||||
13 | If the taxpayer continues to own property through | ||||||
14 | the last day of the last tax year for which the | ||||||
15 | taxpayer may claim a depreciation deduction for | ||||||
16 | federal income tax purposes and for which the taxpayer | ||||||
17 | was allowed in any taxable year to make a subtraction | ||||||
18 | modification under subparagraph (O), then an amount | ||||||
19 | equal to that subtraction modification.
| ||||||
20 | The taxpayer is required to make the addition | ||||||
21 | modification under this
subparagraph
only once with | ||||||
22 | respect to any one piece of property; | ||||||
23 | (D-7) An amount equal to the amount otherwise | ||||||
24 | allowed as a deduction in computing base income for | ||||||
25 | interest paid, accrued, or incurred, directly or | ||||||
26 | indirectly, (i) for taxable years ending on or after |
| |||||||
| |||||||
1 | December 31, 2004, to a foreign person who would be a | ||||||
2 | member of the same unitary business group but for the | ||||||
3 | fact the foreign person's business activity outside | ||||||
4 | the United States is 80% or more of the foreign | ||||||
5 | person's total business activity and (ii) for taxable | ||||||
6 | years ending on or after December 31, 2008, to a person | ||||||
7 | who would be a member of the same unitary business | ||||||
8 | group but for the fact that the person is prohibited | ||||||
9 | under Section 1501(a)(27) from being included in the | ||||||
10 | unitary business group because he or she is ordinarily | ||||||
11 | required to apportion business income under different | ||||||
12 | subsections of Section 304. The addition modification | ||||||
13 | required by this subparagraph shall be reduced to the | ||||||
14 | extent that dividends were included in base income of | ||||||
15 | the unitary group for the same taxable year and | ||||||
16 | received by the taxpayer or by a member of the | ||||||
17 | taxpayer's unitary business group (including amounts | ||||||
18 | included in gross income pursuant to Sections 951 | ||||||
19 | through 964 of the Internal Revenue Code and amounts | ||||||
20 | included in gross income under Section 78 of the | ||||||
21 | Internal Revenue Code) with respect to the stock of the | ||||||
22 | same person to whom the interest was paid, accrued, or | ||||||
23 | incurred.
| ||||||
24 | This paragraph shall not apply to the following:
| ||||||
25 | (i) an item of interest paid, accrued, or | ||||||
26 | incurred, directly or indirectly, to a person who |
| |||||||
| |||||||
1 | is subject in a foreign country or state, other | ||||||
2 | than a state which requires mandatory unitary | ||||||
3 | reporting, to a tax on or measured by net income | ||||||
4 | with respect to such interest; or | ||||||
5 | (ii) an item of interest paid, accrued, or | ||||||
6 | incurred, directly or indirectly, to a person if | ||||||
7 | the taxpayer can establish, based on a | ||||||
8 | preponderance of the evidence, both of the | ||||||
9 | following: | ||||||
10 | (a) the person, during the same taxable | ||||||
11 | year, paid, accrued, or incurred, the interest | ||||||
12 | to a person that is not a related member, and | ||||||
13 | (b) the transaction giving rise to the | ||||||
14 | interest expense between the taxpayer and the | ||||||
15 | person did not have as a principal purpose the | ||||||
16 | avoidance of Illinois income tax, and is paid | ||||||
17 | pursuant to a contract or agreement that | ||||||
18 | reflects an arm's-length interest rate and | ||||||
19 | terms; or
| ||||||
20 | (iii) the taxpayer can establish, based on | ||||||
21 | clear and convincing evidence, that the interest | ||||||
22 | paid, accrued, or incurred relates to a contract or | ||||||
23 | agreement entered into at arm's-length rates and | ||||||
24 | terms and the principal purpose for the payment is | ||||||
25 | not federal or Illinois tax avoidance; or
| ||||||
26 | (iv) an item of interest paid, accrued, or |
| |||||||
| |||||||
1 | incurred, directly or indirectly, to a person if | ||||||
2 | the taxpayer establishes by clear and convincing | ||||||
3 | evidence that the adjustments are unreasonable; or | ||||||
4 | if the taxpayer and the Director agree in writing | ||||||
5 | to the application or use of an alternative method | ||||||
6 | of apportionment under Section 304(f).
| ||||||
7 | Nothing in this subsection shall preclude the | ||||||
8 | Director from making any other adjustment | ||||||
9 | otherwise allowed under Section 404 of this Act for | ||||||
10 | any tax year beginning after the effective date of | ||||||
11 | this amendment provided such adjustment is made | ||||||
12 | pursuant to regulation adopted by the Department | ||||||
13 | and such regulations provide methods and standards | ||||||
14 | by which the Department will utilize its authority | ||||||
15 | under Section 404 of this Act; and
| ||||||
16 | (D-8) An amount equal to the amount of intangible | ||||||
17 | expenses and costs otherwise allowed as a deduction in | ||||||
18 | computing base income, and that were paid, accrued, or | ||||||
19 | incurred, directly or indirectly, (i) for taxable | ||||||
20 | years ending on or after December 31, 2004, to a | ||||||
21 | foreign person who would be a member of the same | ||||||
22 | unitary business group but for the fact that the | ||||||
23 | foreign person's business activity outside the United | ||||||
24 | States is 80% or more of that person's total business | ||||||
25 | activity and (ii) for taxable years ending on or after | ||||||
26 | December 31, 2008, to a person who would be a member of |
| |||||||
| |||||||
1 | the same unitary business group but for the fact that | ||||||
2 | the person is prohibited under Section 1501(a)(27) | ||||||
3 | from being included in the unitary business group | ||||||
4 | because he or she is ordinarily required to apportion | ||||||
5 | business income under different subsections of Section | ||||||
6 | 304. The addition modification required by this | ||||||
7 | subparagraph shall be reduced to the extent that | ||||||
8 | dividends were included in base income of the unitary | ||||||
9 | group for the same taxable year and received by the | ||||||
10 | taxpayer or by a member of the taxpayer's unitary | ||||||
11 | business group (including amounts included in gross | ||||||
12 | income pursuant to Sections 951 through 964 of the | ||||||
13 | Internal Revenue Code and amounts included in gross | ||||||
14 | income under Section 78 of the Internal Revenue Code) | ||||||
15 | with respect to the stock of the same person to whom | ||||||
16 | the intangible expenses and costs were directly or | ||||||
17 | indirectly paid, incurred or accrued. The preceding | ||||||
18 | sentence shall not apply to the extent that the same | ||||||
19 | dividends caused a reduction to the addition | ||||||
20 | modification required under Section 203(d)(2)(D-7) of | ||||||
21 | this Act. As used in this subparagraph, the term | ||||||
22 | "intangible expenses and costs" includes (1) expenses, | ||||||
23 | losses, and costs for, or related to, the direct or | ||||||
24 | indirect acquisition, use, maintenance or management, | ||||||
25 | ownership, sale, exchange, or any other disposition of | ||||||
26 | intangible property; (2) losses incurred, directly or |
| |||||||
| |||||||
1 | indirectly, from factoring transactions or discounting | ||||||
2 | transactions; (3) royalty, patent, technical, and | ||||||
3 | copyright fees; (4) licensing fees; and (5) other | ||||||
4 | similar expenses and costs. For purposes of this | ||||||
5 | subparagraph, "intangible property" includes patents, | ||||||
6 | patent applications, trade names, trademarks, service | ||||||
7 | marks, copyrights, mask works, trade secrets, and | ||||||
8 | similar types of intangible assets; | ||||||
9 | This paragraph shall not apply to the following: | ||||||
10 | (i) any item of intangible expenses or costs | ||||||
11 | paid, accrued, or incurred, directly or | ||||||
12 | indirectly, from a transaction with a person who is | ||||||
13 | subject in a foreign country or state, other than a | ||||||
14 | state which requires mandatory unitary reporting, | ||||||
15 | to a tax on or measured by net income with respect | ||||||
16 | to such item; or | ||||||
17 | (ii) any item of intangible expense or cost | ||||||
18 | paid, accrued, or incurred, directly or | ||||||
19 | indirectly, if the taxpayer can establish, based | ||||||
20 | on a preponderance of the evidence, both of the | ||||||
21 | following: | ||||||
22 | (a) the person during the same taxable | ||||||
23 | year paid, accrued, or incurred, the | ||||||
24 | intangible expense or cost to a person that is | ||||||
25 | not a related member, and | ||||||
26 | (b) the transaction giving rise to the |
| |||||||
| |||||||
1 | intangible expense or cost between the | ||||||
2 | taxpayer and the person did not have as a | ||||||
3 | principal purpose the avoidance of Illinois | ||||||
4 | income tax, and is paid pursuant to a contract | ||||||
5 | or agreement that reflects arm's-length terms; | ||||||
6 | or | ||||||
7 | (iii) any item of intangible expense or cost | ||||||
8 | paid, accrued, or incurred, directly or | ||||||
9 | indirectly, from a transaction with a person if the | ||||||
10 | taxpayer establishes by clear and convincing | ||||||
11 | evidence, that the adjustments are unreasonable; | ||||||
12 | or if the taxpayer and the Director agree in | ||||||
13 | writing to the application or use of an alternative | ||||||
14 | method of apportionment under Section 304(f);
| ||||||
15 | Nothing in this subsection shall preclude the | ||||||
16 | Director from making any other adjustment | ||||||
17 | otherwise allowed under Section 404 of this Act for | ||||||
18 | any tax year beginning after the effective date of | ||||||
19 | this amendment provided such adjustment is made | ||||||
20 | pursuant to regulation adopted by the Department | ||||||
21 | and such regulations provide methods and standards | ||||||
22 | by which the Department will utilize its authority | ||||||
23 | under Section 404 of this Act;
| ||||||
24 | (D-9) For taxable years ending on or after December | ||||||
25 | 31, 2008, an amount equal to the amount of insurance | ||||||
26 | premium expenses and costs otherwise allowed as a |
| |||||||
| |||||||
1 | deduction in computing base income, and that were paid, | ||||||
2 | accrued, or incurred, directly or indirectly, to a | ||||||
3 | person who would be a member of the same unitary | ||||||
4 | business group but for the fact that the person is | ||||||
5 | prohibited under Section 1501(a)(27) from being | ||||||
6 | included in the unitary business group because he or | ||||||
7 | she is ordinarily required to apportion business | ||||||
8 | income under different subsections of Section 304. The | ||||||
9 | addition modification required by this subparagraph | ||||||
10 | shall be reduced to the extent that dividends were | ||||||
11 | included in base income of the unitary group for the | ||||||
12 | same taxable year and received by the taxpayer or by a | ||||||
13 | member of the taxpayer's unitary business group | ||||||
14 | (including amounts included in gross income under | ||||||
15 | Sections 951 through 964 of the Internal Revenue Code | ||||||
16 | and amounts included in gross income under Section 78 | ||||||
17 | of the Internal Revenue Code) with respect to the stock | ||||||
18 | of the same person to whom the premiums and costs were | ||||||
19 | directly or indirectly paid, incurred, or accrued. The | ||||||
20 | preceding sentence does not apply to the extent that | ||||||
21 | the same dividends caused a reduction to the addition | ||||||
22 | modification required under Section 203(d)(2)(D-7) or | ||||||
23 | Section 203(d)(2)(D-8) of this Act; | ||||||
24 | (D-10) An amount equal to the credit allowable to | ||||||
25 | the taxpayer under Section 218(a) of this Act, | ||||||
26 | determined without regard to Section 218(c) of this |
| |||||||
| |||||||
1 | Act; | ||||||
2 | and by deducting from the total so obtained the following | ||||||
3 | amounts: | ||||||
4 | (E) The valuation limitation amount; | ||||||
5 | (F) An amount equal to the amount of any tax | ||||||
6 | imposed by this Act which
was refunded to the taxpayer | ||||||
7 | and included in such total for the taxable year; | ||||||
8 | (G) An amount equal to all amounts included in | ||||||
9 | taxable income as
modified by subparagraphs (A), (B), | ||||||
10 | (C) and (D) which are exempt from
taxation by this | ||||||
11 | State either by reason of its statutes or Constitution | ||||||
12 | or
by reason of
the Constitution, treaties or statutes | ||||||
13 | of the United States;
provided that, in the case of any | ||||||
14 | statute of this State that exempts income
derived from | ||||||
15 | bonds or other obligations from the tax imposed under | ||||||
16 | this Act,
the amount exempted shall be the interest net | ||||||
17 | of bond premium amortization; | ||||||
18 | (H) Any income of the partnership which | ||||||
19 | constitutes personal service
income as defined in | ||||||
20 | Section 1348 (b) (1) of the Internal Revenue Code (as
| ||||||
21 | in effect December 31, 1981) or a reasonable allowance | ||||||
22 | for compensation
paid or accrued for services rendered | ||||||
23 | by partners to the partnership,
whichever is greater; | ||||||
24 | this subparagraph (H) is exempt from the provisions of | ||||||
25 | Section 250; | ||||||
26 | (I) An amount equal to all amounts of income |
| |||||||
| |||||||
1 | distributable to an entity
subject to the Personal | ||||||
2 | Property Tax Replacement Income Tax imposed by
| ||||||
3 | subsections (c) and (d) of Section 201 of this Act | ||||||
4 | including amounts
distributable to organizations | ||||||
5 | exempt from federal income tax by reason of
Section | ||||||
6 | 501(a) of the Internal Revenue Code; this subparagraph | ||||||
7 | (I) is exempt from the provisions of Section 250; | ||||||
8 | (J) With the exception of any amounts subtracted | ||||||
9 | under subparagraph
(G),
an amount equal to the sum of | ||||||
10 | all amounts disallowed as deductions
by (i) Sections | ||||||
11 | 171(a) (2), and 265(2) of the Internal Revenue Code, | ||||||
12 | and all amounts of expenses allocable to
interest and | ||||||
13 | disallowed as deductions by Section 265(1) of the | ||||||
14 | Internal
Revenue Code;
and (ii) for taxable years
| ||||||
15 | ending on or after August 13, 1999, Sections
171(a)(2), | ||||||
16 | 265,
280C, and 832(b)(5)(B)(i) of the Internal Revenue | ||||||
17 | Code, plus, (iii) for taxable years ending on or after | ||||||
18 | December 31, 2011, Section 45G(e)(3) of the Internal | ||||||
19 | Revenue Code and, for taxable years ending on or after | ||||||
20 | December 31, 2008, any amount included in gross income | ||||||
21 | under Section 87 of the Internal Revenue Code; the | ||||||
22 | provisions of this
subparagraph are exempt from the | ||||||
23 | provisions of Section 250; | ||||||
24 | (K) An amount equal to those dividends included in | ||||||
25 | such total which were
paid by a corporation which | ||||||
26 | conducts business operations in a River Edge |
| |||||||
| |||||||
1 | Redevelopment Zone or zones created under the River | ||||||
2 | Edge Redevelopment Zone Act and
conducts substantially | ||||||
3 | all of its operations
from a River Edge Redevelopment | ||||||
4 | Zone or zones. This subparagraph (K) is exempt from the | ||||||
5 | provisions of Section 250; | ||||||
6 | (L) An amount equal to any contribution made to a | ||||||
7 | job training project
established pursuant to the Real | ||||||
8 | Property Tax Increment Allocation
Redevelopment Act; | ||||||
9 | (M) An amount equal to those dividends included in | ||||||
10 | such total
that were paid by a corporation that | ||||||
11 | conducts business operations in a
federally designated | ||||||
12 | Foreign Trade Zone or Sub-Zone and that is designated a
| ||||||
13 | High Impact Business located in Illinois; provided | ||||||
14 | that dividends eligible
for the deduction provided in | ||||||
15 | subparagraph (K) of paragraph (2) of this
subsection | ||||||
16 | shall not be eligible for the deduction provided under | ||||||
17 | this
subparagraph (M); | ||||||
18 | (N) An amount equal to the amount of the deduction | ||||||
19 | used to compute the
federal income tax credit for | ||||||
20 | restoration of substantial amounts held under
claim of | ||||||
21 | right for the taxable year pursuant to Section 1341 of | ||||||
22 | the
Internal Revenue Code; | ||||||
23 | (O) For taxable years 2001 and thereafter, for the | ||||||
24 | taxable year in
which the bonus depreciation deduction
| ||||||
25 | is taken on the taxpayer's federal income tax return | ||||||
26 | under
subsection (k) of Section 168 of the Internal |
| |||||||
| |||||||
1 | Revenue Code and for each
applicable taxable year | ||||||
2 | thereafter, an amount equal to "x", where: | ||||||
3 | (1) "y" equals the amount of the depreciation | ||||||
4 | deduction taken for the
taxable year
on the | ||||||
5 | taxpayer's federal income tax return on property | ||||||
6 | for which the bonus
depreciation deduction
was | ||||||
7 | taken in any year under subsection (k) of Section | ||||||
8 | 168 of the Internal
Revenue Code, but not including | ||||||
9 | the bonus depreciation deduction; | ||||||
10 | (2) for taxable years ending on or before | ||||||
11 | December 31, 2005, "x" equals "y" multiplied by 30 | ||||||
12 | and then divided by 70 (or "y"
multiplied by | ||||||
13 | 0.429); and | ||||||
14 | (3) for taxable years ending after December | ||||||
15 | 31, 2005: | ||||||
16 | (i) for property on which a bonus | ||||||
17 | depreciation deduction of 30% of the adjusted | ||||||
18 | basis was taken, "x" equals "y" multiplied by | ||||||
19 | 30 and then divided by 70 (or "y"
multiplied by | ||||||
20 | 0.429); and | ||||||
21 | (ii) for property on which a bonus | ||||||
22 | depreciation deduction of 50% of the adjusted | ||||||
23 | basis was taken, "x" equals "y" multiplied by | ||||||
24 | 1.0. | ||||||
25 | The aggregate amount deducted under this | ||||||
26 | subparagraph in all taxable
years for any one piece of |
| |||||||
| |||||||
1 | property may not exceed the amount of the bonus
| ||||||
2 | depreciation deduction
taken on that property on the | ||||||
3 | taxpayer's federal income tax return under
subsection | ||||||
4 | (k) of Section 168 of the Internal Revenue Code. This | ||||||
5 | subparagraph (O) is exempt from the provisions of | ||||||
6 | Section 250; | ||||||
7 | (P) If the taxpayer sells, transfers, abandons, or | ||||||
8 | otherwise disposes of
property for which the taxpayer | ||||||
9 | was required in any taxable year to make an
addition | ||||||
10 | modification under subparagraph (D-5), then an amount | ||||||
11 | equal to that
addition modification. | ||||||
12 | If the taxpayer continues to own property through | ||||||
13 | the last day of the last tax year for which the | ||||||
14 | taxpayer may claim a depreciation deduction for | ||||||
15 | federal income tax purposes and for which the taxpayer | ||||||
16 | was required in any taxable year to make an addition | ||||||
17 | modification under subparagraph (D-5), then an amount | ||||||
18 | equal to that addition modification.
| ||||||
19 | The taxpayer is allowed to take the deduction under | ||||||
20 | this subparagraph
only once with respect to any one | ||||||
21 | piece of property. | ||||||
22 | This subparagraph (P) is exempt from the | ||||||
23 | provisions of Section 250; | ||||||
24 | (Q) The amount of (i) any interest income (net of | ||||||
25 | the deductions allocable thereto) taken into account | ||||||
26 | for the taxable year with respect to a transaction with |
| |||||||
| |||||||
1 | a taxpayer that is required to make an addition | ||||||
2 | modification with respect to such transaction under | ||||||
3 | Section 203(a)(2)(D-17), 203(b)(2)(E-12), | ||||||
4 | 203(c)(2)(G-12), or 203(d)(2)(D-7), but not to exceed | ||||||
5 | the amount of such addition modification and
(ii) any | ||||||
6 | income from intangible property (net of the deductions | ||||||
7 | allocable thereto) taken into account for the taxable | ||||||
8 | year with respect to a transaction with a taxpayer that | ||||||
9 | is required to make an addition modification with | ||||||
10 | respect to such transaction under Section | ||||||
11 | 203(a)(2)(D-18), 203(b)(2)(E-13), 203(c)(2)(G-13), or | ||||||
12 | 203(d)(2)(D-8), but not to exceed the amount of such | ||||||
13 | addition modification. This subparagraph (Q) is exempt | ||||||
14 | from Section 250;
| ||||||
15 | (R) An amount equal to the interest income taken | ||||||
16 | into account for the taxable year (net of the | ||||||
17 | deductions allocable thereto) with respect to | ||||||
18 | transactions with (i) a foreign person who would be a | ||||||
19 | member of the taxpayer's unitary business group but for | ||||||
20 | the fact that the foreign person's business activity | ||||||
21 | outside the United States is 80% or more of that | ||||||
22 | person's total business activity and (ii) for taxable | ||||||
23 | years ending on or after December 31, 2008, to a person | ||||||
24 | who would be a member of the same unitary business | ||||||
25 | group but for the fact that the person is prohibited | ||||||
26 | under Section 1501(a)(27) from being included in the |
| |||||||
| |||||||
1 | unitary business group because he or she is ordinarily | ||||||
2 | required to apportion business income under different | ||||||
3 | subsections of Section 304, but not to exceed the | ||||||
4 | addition modification required to be made for the same | ||||||
5 | taxable year under Section 203(d)(2)(D-7) for interest | ||||||
6 | paid, accrued, or incurred, directly or indirectly, to | ||||||
7 | the same person. This subparagraph (R) is exempt from | ||||||
8 | Section 250; | ||||||
9 | (S) An amount equal to the income from intangible | ||||||
10 | property taken into account for the taxable year (net | ||||||
11 | of the deductions allocable thereto) with respect to | ||||||
12 | transactions with (i) a foreign person who would be a | ||||||
13 | member of the taxpayer's unitary business group but for | ||||||
14 | the fact that the foreign person's business activity | ||||||
15 | outside the United States is 80% or more of that | ||||||
16 | person's total business activity and (ii) for taxable | ||||||
17 | years ending on or after December 31, 2008, to a person | ||||||
18 | who would be a member of the same unitary business | ||||||
19 | group but for the fact that the person is prohibited | ||||||
20 | under Section 1501(a)(27) from being included in the | ||||||
21 | unitary business group because he or she is ordinarily | ||||||
22 | required to apportion business income under different | ||||||
23 | subsections of Section 304, but not to exceed the | ||||||
24 | addition modification required to be made for the same | ||||||
25 | taxable year under Section 203(d)(2)(D-8) for | ||||||
26 | intangible expenses and costs paid, accrued, or |
| |||||||
| |||||||
1 | incurred, directly or indirectly, to the same person. | ||||||
2 | This subparagraph (S) is exempt from Section 250; and
| ||||||
3 | (T) For taxable years ending on or after December | ||||||
4 | 31, 2011, in the case of a taxpayer who was required to | ||||||
5 | add back any insurance premiums under Section | ||||||
6 | 203(d)(2)(D-9), such taxpayer may elect to subtract | ||||||
7 | that part of a reimbursement received from the | ||||||
8 | insurance company equal to the amount of the expense or | ||||||
9 | loss (including expenses incurred by the insurance | ||||||
10 | company) that would have been taken into account as a | ||||||
11 | deduction for federal income tax purposes if the | ||||||
12 | expense or loss had been uninsured. If a taxpayer makes | ||||||
13 | the election provided for by this subparagraph (T), the | ||||||
14 | insurer to which the premiums were paid must add back | ||||||
15 | to income the amount subtracted by the taxpayer | ||||||
16 | pursuant to this subparagraph (T). This subparagraph | ||||||
17 | (T) is exempt from the provisions of Section 250. | ||||||
18 | (e) Gross income; adjusted gross income; taxable income. | ||||||
19 | (1) In general. Subject to the provisions of paragraph | ||||||
20 | (2) and
subsection (b) (3), for purposes of this Section | ||||||
21 | and Section 803(e), a
taxpayer's gross income, adjusted | ||||||
22 | gross income, or taxable income for
the taxable year shall | ||||||
23 | mean the amount of gross income, adjusted gross
income or | ||||||
24 | taxable income properly reportable for federal income tax
| ||||||
25 | purposes for the taxable year under the provisions of the |
| |||||||
| |||||||
1 | Internal
Revenue Code. Taxable income may be less than | ||||||
2 | zero. However, for taxable
years ending on or after | ||||||
3 | December 31, 1986, net operating loss
carryforwards from | ||||||
4 | taxable years ending prior to December 31, 1986, may not
| ||||||
5 | exceed the sum of federal taxable income for the taxable | ||||||
6 | year before net
operating loss deduction, plus the excess | ||||||
7 | of addition modifications over
subtraction modifications | ||||||
8 | for the taxable year. For taxable years ending
prior to | ||||||
9 | December 31, 1986, taxable income may never be an amount in | ||||||
10 | excess
of the net operating loss for the taxable year as | ||||||
11 | defined in subsections
(c) and (d) of Section 172 of the | ||||||
12 | Internal Revenue Code, provided that when
taxable income of | ||||||
13 | a corporation (other than a Subchapter S corporation),
| ||||||
14 | trust, or estate is less than zero and addition | ||||||
15 | modifications, other than
those provided by subparagraph | ||||||
16 | (E) of paragraph (2) of subsection (b) for
corporations or | ||||||
17 | subparagraph (E) of paragraph (2) of subsection (c) for
| ||||||
18 | trusts and estates, exceed subtraction modifications, an | ||||||
19 | addition
modification must be made under those | ||||||
20 | subparagraphs for any other taxable
year to which the | ||||||
21 | taxable income less than zero (net operating loss) is
| ||||||
22 | applied under Section 172 of the Internal Revenue Code or | ||||||
23 | under
subparagraph (E) of paragraph (2) of this subsection | ||||||
24 | (e) applied in
conjunction with Section 172 of the Internal | ||||||
25 | Revenue Code. | ||||||
26 | (2) Special rule. For purposes of paragraph (1) of this |
| |||||||
| |||||||
1 | subsection,
the taxable income properly reportable for | ||||||
2 | federal income tax purposes
shall mean: | ||||||
3 | (A) Certain life insurance companies. In the case | ||||||
4 | of a life
insurance company subject to the tax imposed | ||||||
5 | by Section 801 of the
Internal Revenue Code, life | ||||||
6 | insurance company taxable income, plus the
amount of | ||||||
7 | distribution from pre-1984 policyholder surplus | ||||||
8 | accounts as
calculated under Section 815a of the | ||||||
9 | Internal Revenue Code; | ||||||
10 | (B) Certain other insurance companies. In the case | ||||||
11 | of mutual
insurance companies subject to the tax | ||||||
12 | imposed by Section 831 of the
Internal Revenue Code, | ||||||
13 | insurance company taxable income; | ||||||
14 | (C) Regulated investment companies. In the case of | ||||||
15 | a regulated
investment company subject to the tax | ||||||
16 | imposed by Section 852 of the
Internal Revenue Code, | ||||||
17 | investment company taxable income; | ||||||
18 | (D) Real estate investment trusts. In the case of a | ||||||
19 | real estate
investment trust subject to the tax imposed | ||||||
20 | by Section 857 of the
Internal Revenue Code, real | ||||||
21 | estate investment trust taxable income; | ||||||
22 | (E) Consolidated corporations. In the case of a | ||||||
23 | corporation which
is a member of an affiliated group of | ||||||
24 | corporations filing a consolidated
income tax return | ||||||
25 | for the taxable year for federal income tax purposes,
| ||||||
26 | taxable income determined as if such corporation had |
| |||||||
| |||||||
1 | filed a separate
return for federal income tax purposes | ||||||
2 | for the taxable year and each
preceding taxable year | ||||||
3 | for which it was a member of an affiliated group.
For | ||||||
4 | purposes of this subparagraph, the taxpayer's separate | ||||||
5 | taxable
income shall be determined as if the election | ||||||
6 | provided by Section
243(b) (2) of the Internal Revenue | ||||||
7 | Code had been in effect for all such years; | ||||||
8 | (F) Cooperatives. In the case of a cooperative | ||||||
9 | corporation or
association, the taxable income of such | ||||||
10 | organization determined in
accordance with the | ||||||
11 | provisions of Section 1381 through 1388 of the
Internal | ||||||
12 | Revenue Code, but without regard to the prohibition | ||||||
13 | against offsetting losses from patronage activities | ||||||
14 | against income from nonpatronage activities; except | ||||||
15 | that a cooperative corporation or association may make | ||||||
16 | an election to follow its federal income tax treatment | ||||||
17 | of patronage losses and nonpatronage losses. In the | ||||||
18 | event such election is made, such losses shall be | ||||||
19 | computed and carried over in a manner consistent with | ||||||
20 | subsection (a) of Section 207 of this Act and | ||||||
21 | apportioned by the apportionment factor reported by | ||||||
22 | the cooperative on its Illinois income tax return filed | ||||||
23 | for the taxable year in which the losses are incurred. | ||||||
24 | The election shall be effective for all taxable years | ||||||
25 | with original returns due on or after the date of the | ||||||
26 | election. In addition, the cooperative may file an |
| |||||||
| |||||||
1 | amended return or returns, as allowed under this Act, | ||||||
2 | to provide that the election shall be effective for | ||||||
3 | losses incurred or carried forward for taxable years | ||||||
4 | occurring prior to the date of the election. Once made, | ||||||
5 | the election may only be revoked upon approval of the | ||||||
6 | Director. The Department shall adopt rules setting | ||||||
7 | forth requirements for documenting the elections and | ||||||
8 | any resulting Illinois net loss and the standards to be | ||||||
9 | used by the Director in evaluating requests to revoke | ||||||
10 | elections. Public Act 96-932 is declaratory of | ||||||
11 | existing law; | ||||||
12 | (G) Subchapter S corporations. In the case of: (i) | ||||||
13 | a Subchapter S
corporation for which there is in effect | ||||||
14 | an election for the taxable year
under Section 1362 of | ||||||
15 | the Internal Revenue Code, the taxable income of such
| ||||||
16 | corporation determined in accordance with Section | ||||||
17 | 1363(b) of the Internal
Revenue Code, except that | ||||||
18 | taxable income shall take into
account those items | ||||||
19 | which are required by Section 1363(b)(1) of the
| ||||||
20 | Internal Revenue Code to be separately stated; and (ii) | ||||||
21 | a Subchapter
S corporation for which there is in effect | ||||||
22 | a federal election to opt out of
the provisions of the | ||||||
23 | Subchapter S Revision Act of 1982 and have applied
| ||||||
24 | instead the prior federal Subchapter S rules as in | ||||||
25 | effect on July 1, 1982,
the taxable income of such | ||||||
26 | corporation determined in accordance with the
federal |
| |||||||
| |||||||
1 | Subchapter S rules as in effect on July 1, 1982; and | ||||||
2 | (H) Partnerships. In the case of a partnership, | ||||||
3 | taxable income
determined in accordance with Section | ||||||
4 | 703 of the Internal Revenue Code,
except that taxable | ||||||
5 | income shall take into account those items which are
| ||||||
6 | required by Section 703(a)(1) to be separately stated | ||||||
7 | but which would be
taken into account by an individual | ||||||
8 | in calculating his taxable income. | ||||||
9 | (3) Recapture of business expenses on disposition of | ||||||
10 | asset or business. Notwithstanding any other law to the | ||||||
11 | contrary, if in prior years income from an asset or | ||||||
12 | business has been classified as business income and in a | ||||||
13 | later year is demonstrated to be non-business income, then | ||||||
14 | all expenses, without limitation, deducted in such later | ||||||
15 | year and in the 2 immediately preceding taxable years | ||||||
16 | related to that asset or business that generated the | ||||||
17 | non-business income shall be added back and recaptured as | ||||||
18 | business income in the year of the disposition of the asset | ||||||
19 | or business. Such amount shall be apportioned to Illinois | ||||||
20 | using the greater of the apportionment fraction computed | ||||||
21 | for the business under Section 304 of this Act for the | ||||||
22 | taxable year or the average of the apportionment fractions | ||||||
23 | computed for the business under Section 304 of this Act for | ||||||
24 | the taxable year and for the 2 immediately preceding | ||||||
25 | taxable years.
|
| |||||||
| |||||||
1 | (f) Valuation limitation amount. | ||||||
2 | (1) In general. The valuation limitation amount | ||||||
3 | referred to in
subsections (a) (2) (G), (c) (2) (I) and | ||||||
4 | (d)(2) (E) is an amount equal to: | ||||||
5 | (A) The sum of the pre-August 1, 1969 appreciation | ||||||
6 | amounts (to the
extent consisting of gain reportable | ||||||
7 | under the provisions of Section
1245 or 1250 of the | ||||||
8 | Internal Revenue Code) for all property in respect
of | ||||||
9 | which such gain was reported for the taxable year; plus | ||||||
10 | (B) The lesser of (i) the sum of the pre-August 1, | ||||||
11 | 1969 appreciation
amounts (to the extent consisting of | ||||||
12 | capital gain) for all property in
respect of which such | ||||||
13 | gain was reported for federal income tax purposes
for | ||||||
14 | the taxable year, or (ii) the net capital gain for the | ||||||
15 | taxable year,
reduced in either case by any amount of | ||||||
16 | such gain included in the amount
determined under | ||||||
17 | subsection (a) (2) (F) or (c) (2) (H). | ||||||
18 | (2) Pre-August 1, 1969 appreciation amount. | ||||||
19 | (A) If the fair market value of property referred | ||||||
20 | to in paragraph
(1) was readily ascertainable on August | ||||||
21 | 1, 1969, the pre-August 1, 1969
appreciation amount for | ||||||
22 | such property is the lesser of (i) the excess of
such | ||||||
23 | fair market value over the taxpayer's basis (for | ||||||
24 | determining gain)
for such property on that date | ||||||
25 | (determined under the Internal Revenue
Code as in | ||||||
26 | effect on that date), or (ii) the total gain realized |
| |||||||
| |||||||
1 | and
reportable for federal income tax purposes in | ||||||
2 | respect of the sale,
exchange or other disposition of | ||||||
3 | such property. | ||||||
4 | (B) If the fair market value of property referred | ||||||
5 | to in paragraph
(1) was not readily ascertainable on | ||||||
6 | August 1, 1969, the pre-August 1,
1969 appreciation | ||||||
7 | amount for such property is that amount which bears
the | ||||||
8 | same ratio to the total gain reported in respect of the | ||||||
9 | property for
federal income tax purposes for the | ||||||
10 | taxable year, as the number of full
calendar months in | ||||||
11 | that part of the taxpayer's holding period for the
| ||||||
12 | property ending July 31, 1969 bears to the number of | ||||||
13 | full calendar
months in the taxpayer's entire holding | ||||||
14 | period for the
property. | ||||||
15 | (C) The Department shall prescribe such | ||||||
16 | regulations as may be
necessary to carry out the | ||||||
17 | purposes of this paragraph. | ||||||
18 | (g) Double deductions. Unless specifically provided | ||||||
19 | otherwise, nothing
in this Section shall permit the same item | ||||||
20 | to be deducted more than once. | ||||||
21 | (h) Legislative intention. Except as expressly provided by | ||||||
22 | this
Section there shall be no modifications or limitations on | ||||||
23 | the amounts
of income, gain, loss or deduction taken into | ||||||
24 | account in determining
gross income, adjusted gross income or |
| |||||||
| |||||||
1 | taxable income for federal income
tax purposes for the taxable | ||||||
2 | year, or in the amount of such items
entering into the | ||||||
3 | computation of base income and net income under this
Act for | ||||||
4 | such taxable year, whether in respect of property values as of
| ||||||
5 | August 1, 1969 or otherwise. | ||||||
6 | (Source: P.A. 96-45, eff. 7-15-09; 96-120, eff. 8-4-09; 96-198, | ||||||
7 | eff. 8-10-09; 96-328, eff. 8-11-09; 96-520, eff. 8-14-09; | ||||||
8 | 96-835, eff. 12-16-09; 96-932, eff. 1-1-11; 96-935, eff. | ||||||
9 | 6-21-10; 96-1214, eff. 7-22-10; 97-333, eff. 8-12-11; 97-507, | ||||||
10 | eff. 8-23-11; 97-905, eff. 8-7-12.) | ||||||
11 | (35 ILCS 5/224 new) | ||||||
12 | Sec. 224. Opportunity Scholarship Tax Credit. | ||||||
13 | (a) For taxable years ending on or after December 31, 2015, | ||||||
14 | a taxpayer shall be allowed a credit against the tax imposed | ||||||
15 | under subsections (a) and (b) of Section 201 of this Act for | ||||||
16 | contributions made to the Opportunity Scholarship Fund. The | ||||||
17 | credit allowed against the tax imposed by subsections (a) and | ||||||
18 | (b) of Section 201 of this Act shall be equal to 100% of the | ||||||
19 | contribution made to the Opportunity Scholarship Fund. | ||||||
20 | However, the maximum amount that may be credited is $250,000 or | ||||||
21 | 50% of a taxpayer's liability for the previous year, whichever | ||||||
22 | is more. | ||||||
23 | (b) For partners, shareholders of Subchapter S | ||||||
24 | corporations, and owners of limited liability companies, if the | ||||||
25 | liability company is treated as a partnership for purposes of |
| |||||||
| |||||||
1 | federal and State income taxation, there is allowed a credit | ||||||
2 | under this Section to be determined in accordance with the | ||||||
3 | determination of income and distributive share of income under | ||||||
4 | Sections 702 and 704 and Subchapter S of the Internal Revenue | ||||||
5 | Code. | ||||||
6 | (c) Any credit under this Section in excess of the tax | ||||||
7 | liability for the taxable year may be carried forward. A | ||||||
8 | taxpayer may elect to have the unused credit shown on the final | ||||||
9 | completed return carried over as a credit against the tax | ||||||
10 | liability for the following 5 taxable years or until it has | ||||||
11 | been fully used, whichever occurs first; provided that no | ||||||
12 | credit earned in a tax year ending prior to December 31, 2020 | ||||||
13 | may be carried forward to any year ending on or after December | ||||||
14 | 31, 2020. | ||||||
15 | If an unused credit under this Section is carried forward | ||||||
16 | to a given year from 2 or more earlier years, that credit | ||||||
17 | arising in the earliest year will be applied first against the | ||||||
18 | tax liability for the given year. If a tax liability for the | ||||||
19 | given year still remains, the credit from the next earliest | ||||||
20 | year will then be applied, and so on, until all credits have | ||||||
21 | been used or no tax liability for the given year remains. Any | ||||||
22 | remaining unused credit or credits then will be carried forward | ||||||
23 | to the next following year in which a tax liability is | ||||||
24 | incurred, except that no credit may be carried forward to a | ||||||
25 | year that is more than 5 years after the year in which the | ||||||
26 | expense for which the credit is given was incurred.
|
| |||||||
| |||||||
1 | Section 999. Effective date. This Act takes effect upon | ||||||
2 | becoming law. |