SB0009sam002 100TH GENERAL ASSEMBLY

Sen. Toi W. Hutchinson

Filed: 1/24/2017

10000SB0009sam002 LRB100 06347 HLH 18628 a

AMENDMENT TO SENATE BILL 9

AMENDMENT NO. ______. Amend Senate Bill 9 by replacing everything after the enacting clause with the following:

"ARTICLE 1. BUSINESS OPPORTUNITY TAX ACT

Section 1-1. Short title. This Act may be cited as the Business Opportunity Tax Act.

Section 1-5. Definitions. As used in this Act:

"Compensation" means wages, salaries, commissions, and any other form of remuneration paid to employees or independent contractors for personal services.

"Department" means the Department of Revenue.

"Illinois payroll" means compensation paid by a qualified business to residents of the State during the taxpayer's taxable year.

"Qualified business" means an individual, trust, estate, partnership, association, firm, company, corporation, or limited liability company that issues a Form W-2 or a Form 1099 to a resident of the State.

"Resident" has the meaning given to that term in Section 1501 of the Illinois Income Tax Act.

"Taxable year" has the meaning given to that term in Section 1501 of the Illinois Income Tax Act.

Section 1-10. Tax imposed.

(a) Beginning on July 1, 2017, a tax is hereby imposed upon each qualified business for the privilege of doing business in the State.

(b) The tax under subsection (a) shall be imposed in the following amounts:

(1) if the taxpayer's total Illinois payroll for the taxable year is less than $100,000, then then annual tax is $225;

(2) if the taxpayer's total Illinois payroll for the taxable year is $100,000 or more but less than $250,000, then the annual tax is $750;

(3) if the taxpayer's total Illinois payroll for the taxable year is $250,000 or more but less than $500,000, then the annual tax is $3,750;

(4) if the taxpayer's total Illinois payroll for the taxable year is $500,000 or more but less than $1,500,000, then the annual tax is $7,500; and

(5) if the taxpayer's total Illinois payroll for the taxable year is $1,500,000 or more, then the annual tax is $15,000.

Section 1-15. Exemptions. The following are exempt from taxation under this Act:

(1) governmental employers described in Section 707 of the Illinois Income Tax Act; and

(2) not-for-profit corporations that are exempt from taxation under Sections 501(c) or 501(d) of the Internal Revenue Code or organized under the General Not For Profit Corporation Act of 1986.

Section 1-20. Annual return. Taxpayers who are liable for the payment of the tax imposed under this Act may comply with the requirements of this Act by filing an annual return, in the form and manner required by the Department, and paying the taxes required to be paid on or before the 15th day of the fourth month following the close of the taxable year with respect to which the tax under this Act is being paid.

Section 1-25. Collection authority. The Department shall collect the taxes imposed by this Act. Money collected pursuant to this Act shall be paid into the General Revenue Fund in the State treasury.

Section 1-30. Applicability of the Illinois Income Tax Act. The provisions of Articles 9, 10, 11, and 12 of the Illinois Income Tax Act (other than Section 901 of the Illinois Income Tax Act) which are not inconsistent with this Act shall apply to the subject matter of this Act to the same extent as if those provisions were included in this Act.

Section 1-35. Rulemaking. The Department may adopt, in accordance with the requirements of the Illinois Administrative Procedure Act, any rule that is necessary to implement this Act.

ARTICLE 5. STORAGE EXCISE TAX

Section 5-1. Short title. This Act may be cited as the Storage Excise Tax Act.

Section 5-5. Definitions.

"Business" means any person engaged in activities with the object of profit or gain, either directly or indirectly, to the person.

"Cost price" means the consideration paid by a provider to a supplier for a purchase of tangible personal property valued in money, whether paid in money or otherwise, including cash, credits and services, and shall be determined without any deduction on account of taxes paid by the provider for the purchase of tangible personal property or on account of any expenses that are part of the selling price of the tangible personal property taxable under the Retailers' Occupation Tax Act and the Use Tax Act that are charged to the provider by a supplier. When a provider contracts out part or all of the services required in his sale of service subject to tax under this Act, it shall be presumed that the cost price to the provider of the tangible personal property transferred to him or her by his or her subcontractor is equal to 50% of the subcontractor's charges to the provider in the absence of proof of the consideration paid for the tangible personal property by the provider to the subcontractor.

"Department" means the Department of Revenue.

"Director" means the Director of Revenue.

"Person" means any natural individual, firm, trust, estate, partnership, association, joint stock company, joint venture, corporation, limited liability company, or a receiver, trustee, guardian, or other representative appointed by order of any court.

"Provider" means any person engaged in the business of providing, furnishing or supplying space for storage to persons for use and not for resale.

"Provider maintaining a place of business in this State", or any like term, means and includes any of the following:

(1) A provider having or maintaining within this State, directly or by a subsidiary, an office, distribution house, sales house, warehouse or other place of business, or any agent or other representative operating within this State under the authority of the provider or its subsidiary, irrespective of whether such place of business or agent or other representative is located here permanently or temporarily, or whether such provider or subsidiary is licensed to do business in this State.

(2) A provider having a contract with a person located in this State under which the person, for a commission or other consideration based upon the sale of services subject to tax under this Act by the provider, directly or indirectly refers potential customers to the provider by providing to the potential customers a promotional code or other mechanism that allows the provider to track purchases referred by such persons. Examples of mechanisms that allow the provider to track purchases referred by such persons include but are not limited to the use of a link on the person's Internet website, promotional codes distributed through the person's hand-delivered or mailed material, and promotional codes distributed by the person through radio or other broadcast media. The provisions of this paragraph (2) shall apply only if the cumulative purchase prices from sales of services subject to tax under this Act by the provider to purchasers who are referred to the provider by all persons in this State under such contracts exceed $10,000 during the preceding 4 quarterly periods ending on the last day of March, June, September, and December. A provider meeting the requirements of this paragraph (2) shall be presumed to be maintaining a place of business in this State but may rebut this presumption by submitting proof that the referrals or other activities pursued within this State by such persons were not sufficient to meet the nexus standards of the United States Constitution during the preceding 4 quarterly periods.

(3) A provider having a contract with a person located in this State under which:

(A) the provider sells the same or substantially similar service subject to tax under this Act as the person located in this State and does so using an identical or substantially similar name, trade name, or trademark as the person located in this State; and

(B) the provider provides a commission or other consideration to the person located in this State based upon the sale of services subject to tax under this Act by the provider.

The provisions of this paragraph (3) shall apply only if the cumulative purchase prices from sales of services subject to tax under this Act by the provider to purchasers in this State under all such contracts exceed $10,000 during the preceding 4 quarterly periods ending on the last day of March, June, September, and December.

"Purchase of service" means the acquisition, for a valuable consideration, of space for storage.

"Purchase price" means the consideration paid for a purchase of service, all services directly related to the purchase of service, and all tangible personal property transferred incident to the purchase of service, valued in money, whether received in money or otherwise, including cash, gift cards, reward points, credits, and property and shall be determined without any deduction on account of the cost of materials used, labor or service costs, or any other expense whatsoever. However, "purchase price" shall not include consideration paid for:

(1) any charge for a dishonored check;

(2) any finance or credit charge, penalty or charge for delayed payment, or discount for prompt payment;

(3) any purchase by a purchaser if the provider is prohibited by federal or State constitution, treaty, convention, statute or court decision from collecting the tax from such purchaser;

(4) the isolated or occasional sale of services subject to tax under this Act by a person who does not hold himself out as being engaged (or who does not habitually engage) in selling such service; and

(5) any amounts added to a purchaser's bills because of charges made pursuant to the tax imposed by this Act.

In case credit is extended, the amount thereof shall be included only as and when payments are made.

"Purchaser" means any person who, for a valuable consideration, acquires storage space for use and not for resale.

"Storage" means the retaining or keeping of tangible personal property in this State for any purpose.

"Space for storage" means (i) secure areas, such as rooms, units, compartments or containers, whether accessible from outside or from within a building, that are designated for the use of a purchaser, where the purchaser can store and retrieve property, including self-storage units, mini-storage units, and areas by any other name; (ii) any parking lot, ramp, or parking garage for a vehicle, whether the vehicle is parked by the operator of the vehicle or by an attendant; (iii) any aircraft parking area, ramp, or hanger; (iv) any boat slip, dock, or dry dock; (v) any recreational vehicle parking area or garage; and (vi) any other areas for storage or parking of tangible personal property.

"Self-storage or "mini-storage" includes storage lockers or storage units in apartment complexes (if the locker or unit is utilized at the tenant's option and includes payment of a fee in addition to apartment rental), and in amusement parks, water parks, recreational facilities, and other locations where lockers are rented for self-storage.

"Supplier" means any person who makes sales of tangible personal property to providers for subsequent transfer incident to a sale of service subject to tax under this Act.

"Use" means the exercise by any person of any right or power over, or the enjoyment of, the services subject to tax under this Act.

Section 5-10. Imposition of tax; calculation of tax.

(a) Effective January 1, 2018, except as otherwise provided in this Section, a tax is imposed on the privilege of using in this State space for storage purchased for use and not for resale at the rate of 5% of the purchase price for the space for storage.

(b) Except as otherwise provided in subsection (e), if tangible personal property is transferred incident to a purchase of service, and if the provider separately states on the invoice the cost price of the tangible personal property transferred incident to the purchase of service, the tax is imposed on the difference between the total purchase price and the provider's cost price of the tangible personal property transferred.

(c) Except as otherwise provided in subsection (e), if tangible personal property is transferred incident to a purchase of service, and if the provider does not separately state on the invoice the cost price of the tangible personal property transferred incident to the purchase of service, tax is imposed on 80% of the purchase price.

(d) Except as otherwise provided in subsection (e), a provider that transfers tangible personal property incident to a sale of service subject to tax under this Act shall make an annual election prior to December 31 of each year to pay the tax imposed by this Act under either subsection (b) or subsection (c) for the following calendar year. A provider may not make an election regarding the method of calculating tax on a transaction-by-transaction basis. For a provider that fails to make an election pursuant to this subsection, the tax is imposed on 80% of the purchase price.

(e) A provider making sales of services subject to tax under this Act in which the aggregate annual cost price of tangible personal property transferred incident to all sales of services subject to tax under this Act is less than 3% of the aggregate annual total purchase prices from all sales of services subject to tax under this Act, may annually elect to calculate tax on 100% of the total purchase price for each purchase of service. A provider that does not elect to calculate tax as provided in this subsection must separately state on the invoice the cost price of the tangible personal property transferred incident to a purchase of service and calculate tax pursuant to subsection (b).

A provider making an election to calculate tax under this subsection may provide resale certificates under Section 2c of the Retailers' Occupation Tax Act to his or her suppliers of tangible personal property that will be transferred incident to a sale of service subject to tax under this Act only if the provider also makes sales of that tangible personal property at retail. A provider that provides resale certificates to his or her supplier must pay retailers' occupation tax on the portion of the tangible personal property that is sold at retail.

Providers who do not also make sales of that tangible personal property at retail may not provide suppliers with certificates of resale, and their purchases of tangible personal property are subject to tax under the Use Tax Act.

(f) If any provider erroneously collects tax or collects more from the purchaser than the purchaser's liability for the transaction, the purchaser shall have a legal right to claim a refund of such amount from such provider. However, if such amount is not refunded to the purchaser for any reason, the provider is liable to pay such amount to the Department.

(g) The tax imposed by this Section is not imposed with respect to any transaction in interstate commerce, to the extent such transaction may not, under the Constitution and statutes of the United States, be made the subject of taxation by this State.

Section 5-15. Transactions involving subcontractors. Providers making purchases of service from a subcontractor are exempt from tax under this Act in accordance with paragraph (1) of subsection (a) of Section 5-25. However, this exemption does not apply to use tax due on the tangible personal property transferred incident to the service. If a provider subcontracts a service subject to tax under this Act in which tangible personal property is transferred, the provider does not incur a use tax liability on the cost price of any tangible personal property transferred to the provider by the subcontractor if the subcontractor (i) has paid or will pay a use tax on his or her cost price of any tangible personal property transferred to the provider and (ii) certifies that fact in writing to the provider.

Section 5-20. Multi-state exemption. To prevent actual multi-state taxation of services that are subject to taxation under this Act, any purchaser or provider, upon proof that the purchaser or provider has paid a tax in another state on such service, shall be allowed a credit against the tax imposed by this Act, to the extent of the amount of the tax properly due and paid in the other state.

Section 5-25. Exemptions.

(a) The following purchasers are exempt from the tax imposed by this Act:

(1) Businesses making purchases of service for the benefit of or in furtherance of the business. This paragraph is exempt from the provisions of Section 5-60.

(2) Corporations, societies, associations, foundations, or institutions organized and operated exclusively for charitable, religious or educational purposes that have been issued an active tax exemption number by the Department under Section 1g of the Retailers' Occupation Tax Act. This paragraph is exempt from the provisions of Section 5-60.

(3) The federal government and its instrumentalities that have been issued an active tax exemption number by the Department under Section 1g of the Retailers' Occupation Tax Act. This paragraph is exempt from the provisions of Section 5-60.

(4) Government bodies that have been issued an active tax exemption number by the Department under Section 1g of the Retailers' Occupation Tax Act. This paragraph is exempt from the provisions of Section 5-60.

(b) The purchase of the following services is exempt from the tax imposed by this Act:

(1) Services performed on tangible personal property exempt under the Retailers' Occupation Tax Act, Use Tax Act, Service Occupation Tax Act, or Service Use Tax Act. This paragraph is exempt from the provisions of Section 5-60.

(2) Repair and maintenance services, to the extent that those services are subject to a separate tax imposed by the State. This paragraph is exempt from the provisions of Section 5-60.

Section 5-30. Collection of tax.

(a) Beginning with bills issued or charges collected for a purchase of service on and after January 1, 2018, the tax imposed by this Act shall be collected from the purchaser by any provider maintaining a place of business in this State at the rate stated in Section 5-10 with respect to the service subject to tax under this Act sold by such provider to or for the purchaser, and shall be remitted to the Department as provided in Section 5-50 of this Act. All sales of services subject to tax under this Act to a purchaser for use and not for resale are presumed subject to tax collection. Providers shall collect the tax from purchasers by adding the tax to the amount of the purchase price received from the purchaser for selling a service subject to tax under this Act to or for the purchaser. The tax imposed by the Act shall, when collected, be stated as a distinct item separate and apart from the purchase price of the service subject to tax under this Act. However, if it is not possible to state the tax separately, the Department may, by rule, exempt the purchase from this requirement if purchasers are notified by language on the invoice or other written notification or notified by a sign that the tax is included in the purchase price.

(b) Any person purchasing a service subject to tax under this Act for use and not for resale as to which there has been no charge made to him of the tax imposed by Section 5-10 shall make payment of the tax imposed by Section 5-10 of this Act in the form and manner provided by the Department not later than the 20th day of the month following the month of purchase of the service.

Section 5-35. Registration of providers.

(a) A person who engages in business as a provider in this State shall register with the Department. Application for a certificate of registration shall be made to the Department, by electronic means, in the form and manner prescribed by the Department and shall contain any reasonable information the Department may require. Upon receipt of the application for a certificate of registration in proper form and manner, the Department shall issue to the applicant a certificate of registration.

The annual fee payable to the Department for each certificate of registration shall be $75. The fee shall be deposited into the Tax Compliance and Administration Fund. Each applicant for a certificate of registration shall pay the fee to the Department at the time of submitting its application for certificate registration to the Department. The Department shall require an applicant for a certificate of registration under this Section to electronically pay the fee. A separate annual fee shall be paid for each place of business at which a person who is required to procure a certificate of registration under this Section proposes to sell a service in Illinois subject to tax under this Act.

(b) The Department may refuse to issue or reissue a certificate of registration to any applicant for the reasons set forth in Section 2505-380 of the Department of Revenue Law of the Civil Administrative Code of Illinois.

(c) Any person aggrieved by any decision of the Department under this Section may, within 20 days after notice of such decision, protest and request a hearing, whereupon the Department shall give notice to such person of the time and place fixed for such hearing and shall hold a hearing in conformity with the provisions of this Act and then issue its final administrative decision in the matter to such person. In the absence of such a protest within 20 days, the Department's decision shall become final without any further determination being made or notice given.

Section 5-40. Revocation of certificate of registration.

(a) The Department may, after notice and a hearing as provided herein, revoke the certificate of registration of any person who violates any of the provisions of this Act or rule adopted pursuant to this Act. Before revocation of a certificate of registration, the Department shall, within 90 days after non-compliance and at least 7 days prior to the date of the hearing, give the person so accused notice in writing of the charge against him or her, and on the date designated shall conduct a hearing upon this matter. The lapse of such 90-day period shall not preclude the Department from conducting revocation proceedings at a later date if necessary. Any hearing held under this Section shall be conducted by the Director or by any officer or employee of the Department designated in writing by the Director.

(b) The Department may revoke a certificate of registration for the reasons set forth in Section 2505-380 of the Department of Revenue Law of the Civil Administrative Code of Illinois.

(c) Upon the hearing of any such proceeding, the Director, or any officer or employee of the Department designated in writing by the Director, may administer oaths, and the Department may procure by its subpoena the attendance of witnesses and, by its subpoena duces tecum, the production of relevant books and papers. Any circuit court, upon application either of the accused or of the Department, may, by order duly entered, require the attendance of witnesses and the production of relevant books and papers before the Department in any hearing relating to the revocation of certificates of registration. Upon refusal or neglect to obey the order of the court, the court may compel obedience thereof by proceedings for contempt.

(d) The Department may, by application to any circuit court, obtain an injunction requiring any person who engages in business as a provider under this Act to obtain a certificate of registration. Upon refusal or neglect to obey the order of the court, the court may compel obedience by proceedings for contempt.

Section 5-45. Tax collected as debt owed to State. The tax herein required to be collected by any provider maintaining a place of business in this State, and any such tax collected by that person, shall constitute a debt owed by that person to this State.

Section 5-50. Return and payment of tax by provider.

(a) Each provider who is required or authorized to collect the tax imposed by this Act shall make a return to the Department on or before the 20th day of each month for the preceding calendar month stating the following:

(1) the provider's name;

(2) the address of the provider's principal place of business and the address of the principal place of business (if that is a different address) from which the provider engaged in the business of selling a service subject to tax under this Act;

(3) total purchase price received by the provider for all services subject to tax under this Act;

(4) amount of tax;

(5) the signature of the provider; and

(6) such other information as the Department reasonably may require.

Any amount that is required to be shown or reported on any return or other document under this Act shall, if that amount is not a whole-dollar amount, be increased to the nearest whole-dollar amount if the fractional part of a dollar is $0.50 or more and decreased to the nearest whole-dollar amount if the fractional part of a dollar is less than $0.50. If a total amount of less than $1 is payable, refundable, or creditable, such amount shall be disregarded if it is less than $0.50 and shall be increased to $1 if it is $0.50 or more.

The provider making the return provided for in this Section shall, at the time of making such return, pay to the Department the amount of tax imposed by this Act, less a discount of 1.75% which is allowed to reimburse the provider for the expenses incurred in keeping records, billing the purchaser, preparing and filing returns, remitting the tax, and supplying data to the Department upon request. No discount may be claimed by a provider on returns not timely filed and for taxes not timely remitted.

(b) If the average monthly tax liability to the Department of the provider does not exceed $200, the Department may authorize the provider's returns to be filed on a quarter-annual basis, with the return for January, February, and March of a given year being due by April 20 of such year; with the return for April, May, and June of a given year being due by July 20 of such year; with the return for July, August, and September of a given year being due by October 20 of such year; and with the return for October, November, and December of a given year being due by January 20 of the following year.

If the average monthly tax liability to the Department of the provider does not exceed $50, the Department may authorize the provider's returns to be filed on an annual basis, with the return for a given year being due by January 20 of the following year.

Such quarter-annual and annual returns, as to form and substance, shall be subject to the same requirements as monthly returns.

Notwithstanding any other provision in this Act concerning the time within which a provider may file a return, any such provider who ceases to engage in a kind of business which makes the person responsible for filing returns under this Act shall file a final return under this Act with the Department not more than one month after discontinuing such business.

Each provider whose average monthly liability to the Department under this Act was $10,000 or more during the preceding calendar year, excluding the month of highest liability and the month of lowest liability in such calendar year, shall make estimated payments to the Department on or before the 7th, 15th, 22nd, and last day of the month during which tax liability to the Department is incurred in an amount not less than the lower of either 22.5% of such provider's actual tax liability for the month or 25% of such provider's actual tax liability for the same calendar month of the preceding year. The amount of such quarter-monthly payments shall be credited against the final tax liability of such provider's return for that month. Once applicable, the requirement of the making of quarter-monthly payments to the Department by taxpayers having an average monthly tax liability of $10,000 or more as determined in the manner provided in this paragraph shall continue until such taxpayer's average monthly liability to the Department during the preceding 4 complete calendar quarters (excluding the month of highest liability and the month of lowest liability) is less than $9,000 or until the taxpayer's average monthly liability to the Department as computed for each of the 4 preceding complete calendar quarters is less than $10,000. However, if a taxpayer can show the Department that a substantial change in the taxpayer's business has occurred which causes the taxpayer to anticipate that his average monthly tax liability for the reasonably foreseeable future will fall below the $10,000 threshold stated above, then the taxpayer may petition the Department for a change in the taxpayer's reporting status. The Department shall change the taxpayer's reporting status unless it finds that such change is seasonal in nature and not likely to be long term. If any such quarter-monthly payment is not paid at the time or in the amount required by this Section, then the taxpayer shall be liable for penalties and interest on the difference between the minimum amount due as a payment and the amount of such quarter-monthly payment actually and timely paid, except insofar as the taxpayer has previously made payments for that month to the Department in excess of the minimum payments previously due as provided in this Section. The Department shall adopt rules to govern the quarter-monthly payment amount and quarter-monthly payment dates for taxpayers who file on other than a calendar monthly basis.

If any payment provided for in this Section exceeds the taxpayer's liabilities under this Act, as shown on an original monthly return, the Department shall, if requested by the taxpayer, issue to the taxpayer a credit memorandum no later than 30 days after the date of payment. The credit evidenced by such credit memorandum may be assigned by the taxpayer to a similar taxpayer under this Act, in accordance with reasonable rules and regulations to be prescribed by the Department. If no such request is made, the taxpayer may credit such excess payment against tax liability subsequently to be remitted to the Department under this Act, in accordance with reasonable rules adopted by the Department. If the Department subsequently determines that all or any part of the credit taken was not actually due to the taxpayer, the taxpayer's 1.75% discount shall be reduced by 1.75% of the difference between the credit taken and that actually due, and that taxpayer shall be liable for penalties and interest on such difference.

(c) A provider who has a tax liability in the amount set forth in subsection (b) of Section 2505-210 of the Department of Revenue Law of the Civil Administrative Code of Illinois shall make all payments required by rules of the Department by electronic funds transfer. Any provider not required to make payments by electronic funds transfer may make payments by electronic funds transfer with the permission of the Department. All providers required to make payments by electronic funds transfer and any providers authorized to voluntarily make payments by electronic funds transfer shall make those payments in the manner authorized by the Department.

(d) If a provider fails to sign a return within 30 days after the proper notice and demand for signature by the Department is received by the provider, the return shall be considered valid and any amount shown to be due on the return shall be deemed assessed.

Section 5-55. Claims; credit memorandum or refunds. If it appears, after claim therefore filed with the Department, that an amount of tax or penalty has been paid to the Department by the taxpayer which was not due under this Act, whether as the result of a mistake of fact or an error of law, except as hereinafter provided, then the Department shall issue a credit memorandum or refund to the person who made the erroneous payment or, if that person has died or become a person under legal disability, to his or her legal representative, as such.

If it is determined that the Department should issue a credit or refund under this Act, the Department may first apply the amount thereof against any amount of tax or penalty due under this Act, or any other Act administered by the Department, from the person entitled to such credit or refund. For this purpose, if proceedings are pending to determine whether or not any tax or penalty is due under this Act, or any other Act administered by the Department, from such person, the Department may withhold issuance of the credit or refund pending the final disposition of such proceedings and may apply such credit or refund against any amount found to be due to the Department under this Act, or any other Act administered by the Department, as a result of such proceedings. The balance, if any, of the credit or refund shall be issued to the person entitled thereto.

If no tax or penalty is due and no proceeding is pending to determine whether such taxpayer is indebted to the Department for tax or penalty, the credit memorandum or refund shall be issued to the claimant; or (in the case of a credit memorandum) the credit memorandum may be assigned and set over by the lawful holder thereof, subject to reasonable rules of the Department, to any other person who is subject to this Act, and the amount thereof shall be applied by the Department against any tax or penalty due or to become due under this Act from such assignee.

As to any claim filed hereunder with the Department on and after each January 1 and July 1, no amount of tax or penalty erroneously paid (either in total or partial liquidation of a tax or penalty under this Act) more than 3 years prior to such January 1 and July 1, respectively, shall be credited or refunded, except that if both the Department and the taxpayer have agreed to an extension of time to issue a notice of tax liability under this Act, the claim may be filed at any time prior to the expiration of the period agreed upon.

No claim may be allowed for any amount paid to the Department, whether paid voluntarily or involuntarily, if paid in total or partial liquidation of an assessment which had become final before the claim for credit or refund to recover the amount so paid is filed with the Department, or if paid in total or partial liquidation of a judgment or order of court. No claim may be allowed or refund made for any amount paid by or collected from any purchaser unless it appears that the claimant has unconditionally repaid to the purchaser any amount collected from the purchaser and retained by the claimant with respect to the same transaction under the Act.

Any credit or refund that is allowed under this Act shall bear interest at the rate and in the manner set forth in the Uniform Penalty and Interest Act.

In case the Department determines that the claimant is entitled to a refund, such refund shall be made only from such appropriation as may be available for that purpose. If it appears unlikely that the amount appropriated would permit everyone having a claim allowed during the period covered by such appropriation to elect to receive a cash refund, the Department, by rule or regulation, shall provide for the payment of refunds in hardship cases and shall define what types of cases qualify as hardship cases.

Section 5-60. Sunset of exemptions, credits, and deductions. The application of every exemption, credit, and deduction against tax imposed by this Act that becomes law after the effective date of this Act shall be limited by a reasonable and appropriate sunset date. A taxpayer is not entitled to take the exemption, credit, or deduction beginning on the sunset date and thereafter. If a reasonable and appropriate sunset date is not specified in the Public Act that creates the exemption, credit, or deduction, a taxpayer shall not be entitled to take the exemption, credit, or deduction beginning 5 years after the effective date of the Public Act creating the exemption, credit, or deduction and thereafter.

Section 5-65. Distribution of proceeds. All moneys received by the Department under this Act shall be paid into the General Revenue Fund in the State Treasury.

Section 5-70. Rulemaking. The Department may adopt rules in accordance with the Illinois Administrative Procedure Act and prescribe forms relating to the administration and enforcement of this Act as it deems appropriate.

Section 5-75. Incorporation by reference. All of the provisions of Sections 2a, 2b, 4, 5, 5a, 5b, 5c, 5d, 5e, 5f, 5g, 5i, 5j, 6a, 6b, 6c, 6d, 7, 8, 9, 10, 11, 11a, 12, and 13 of the Retailers' Occupation Tax Act and all of the provisions of the Uniform Penalty and Interest Act, that are not inconsistent with this Act, apply to providers to the same extent as if those provisions were included in this Act. References in the incorporated Sections of the Retailers' Occupation Tax Act to retailers, to sellers, or to persons engaged in the business of selling tangible personal property mean providers when used in this Act. References in the incorporated Sections to sales of tangible personal property mean sales of services subject to tax under this Act when used in this Act.

ARTICLE 10. AMUSEMENT EXCISE TAX

Section 10-1. Short title. This Act may be cited as the Amusement Excise Tax Act.

Section 10-5. Definitions.

"Amusement device" means any machine, which, upon the insertion of a coin, slug, token, card, or similar object, or upon any other payment method, may be operated by the public generally for use as a game, entertainment, or amusement, whether or not registering a score, and includes but is not limited to such devices as jukeboxes, marble machines, pinball machines, movie and video booths or stands, and all games, operations or transactions similar thereto under whatever name by which they may be indicated. If a machine consists of more than one game monitor which permits individuals to play separate games simultaneously, each separate game monitor shall be deemed an automatic amusement device.

"Amusement" means the following categories, for which any charge is made, including, but not limited to, gate charges, seat charges, ticket charges, dues, and entrance fees: (i) any exhibition, performance, presentation or show for amusement, athletic, entertainment, or recreational purposes, including, but not limited to, animal acts and shows, antique shows, automobile shows, ballets, baseball games, basketball games, carnivals, circuses, flower shows, football games, live adult entertainment, live performances (including but not limited to, theatrical, dramatic, or musical performances), movies, professional sporting events, races (including, but not limited to, automobile, dog, horse races); (ii) access to or use of a membership in clubs, whether open to the public or for members only, including, but not limited to, athletic clubs, country clubs, golf clubs, gun clubs, fishing clubs, flying clubs, hunting clubs, swimming clubs, tennis clubs, and yachting clubs; (iii) access to or use of amusement, athletic, entertainment, or recreational equipment or facilities, including, but not limited to, amusement park rides and games, billiards and pool halls, bowling alleys, campgrounds, dance halls, fishing ponds or lakes, golf courses, horseback riding facilities, shooting galleries, swimming pools, and tennis courts; and (iv) use of an amusement device.

"Cost price" means the consideration paid by a provider to a supplier for a purchase of tangible personal property valued in money, whether paid in money or otherwise, including cash, credits, and services, and shall be determined without any deduction on account of taxes paid by the provider for the purchase of tangible personal property or on account of any expenses that are part of the selling price of the tangible personal property taxable under the Retailers' Occupation Tax Act and the Use Tax Act that are charged to the provider by a supplier. When a provider contracts out part or all of the services required in his sale of service subject to tax under this Act, it shall be presumed that the cost price to the provider of the tangible personal property transferred to him or her by his or her subcontractor is equal to 50% of the subcontractor's charges to the provider in the absence of proof of the consideration paid for the tangible personal property by the provider to the subcontractor.

"Department" means the Department of Revenue.

"Director" means the Director of Revenue.

"Person" means any natural individual, firm, trust, estate, partnership, association, joint stock company, joint venture, corporation, limited liability company, or a receiver, trustee, guardian, or other representative appointed by order of any court.

"Provider" means any person engaged in the business of providing, furnishing, selling or supplying an amusement or amusement device. Entrepreneurs, promoters, sponsors, or managers of an amusement shall be regarded as providers for the purposes of this Act, if the entrepreneurs, promoters, sponsors, or managers have control and direction of the amusement, including activities such as controlling the sale of admissions or admission tickets; controlling or regulating the admittance of all persons to the event or place; determining the nature of the amusement to be offered; deciding the scale of the prices to be charged for admission; receiving the proceeds from ticket sales, including amounts from ticket agents or brokers; and deciding, or having the right to decide, the disposition of the net profits, if any, realized from the event. "Provider" also means persons that purchase amusement or amusement devices for resale.

"Provider maintaining a place of business in this State", or any like term, means and includes any of the following:

(1) A provider having or maintaining within this State, directly or by a subsidiary, an office, distribution house, sales house, warehouse or other place of business, or any agent or other representative operating within this State under the authority of the provider or its subsidiary, irrespective of whether such place of business or agent or other representative is located here permanently or temporarily, or whether such provider or subsidiary is licensed to do business in this State.

(2) A provider having a contract with a person located in this State under which the person, for a commission or other consideration based upon the sale of services subject to tax under this Act by the provider, directly or indirectly refers potential customers to the provider by providing to the potential customers a promotional code or other mechanism that allows the provider to track purchases referred by such persons. Examples of mechanisms that allow the provider to track purchases referred by such persons include but are not limited to the use of a link on the person's Internet website, promotional codes distributed through the person's hand-delivered or mailed material, and promotional codes distributed by the person through radio or other broadcast media. The provisions of this paragraph (2) shall apply only if the cumulative purchase prices from sales of services subject to tax under this Act by the provider to purchasers who are referred to the provider by all persons in this State under such contracts exceed $10,000 during the preceding 4 quarterly periods ending on the last day of March, June, September, and December. A provider meeting the requirements of this paragraph (2) shall be presumed to be maintaining a place of business in this State but may rebut this presumption by submitting proof that the referrals or other activities pursued within this State by such persons were not sufficient to meet the nexus standards of the United States Constitution during the preceding 4 quarterly periods.

(3) A provider having a contract with a person located in this State under which:

(A) the provider sells the same or substantially similar service subject to tax under this Act as the person located in this State and does so using an identical or substantially similar name, trade name, or trademark as the person located in this State; and

(B) the provider provides a commission or other consideration to the person located in this State based upon the sale of services subject to tax under this Act by the provider.

The provisions of this paragraph (3) shall apply only if the cumulative purchase prices from sales of services subject to tax under this Act by the provider to purchasers in this State under all such contracts exceed $10,000 during the preceding 4 quarterly periods ending on the last day of March, June, September, and December.

"Purchase of service" means the acquisition of an amusement or use of an amusement device for a valuable consideration.

"Purchase price" means the consideration paid for a purchase of service, all services directly related to the purchase of service, and all tangible personal property transferred incident to the purchase of service, valued in money, whether received in money or otherwise, including cash, gift cards, reward points, credits, and property and shall be determined without any deduction on account of the cost of materials used, labor or service costs, or any other expense whatsoever. However, "purchase price" shall not include consideration paid for:

(1) any charge for a dishonored check;

(2) any finance or credit charge, penalty or charge for delayed payment, or discount for prompt payment;

(3) any purchase by a purchaser if the provider is prohibited by federal or State constitution, treaty, convention, statute or court decision from collecting the tax from such purchaser;

(4) the isolated or occasional sale of services subject to tax under this Act by a person who does not hold himself out as being engaged (or who does not habitually engage) in selling such service; and

(5) any amounts added to a purchaser's bills because of charges made pursuant to the tax imposed by this Act.

In case credit is extended, the amount thereof shall be included only as and when payments are made.

"Purchaser" means any person who, for a valuable consideration, acquires an amusement or uses an amusement device.

"Supplier" means any person who makes sales of tangible personal property to providers for subsequent transfer incident to a sale of service subject to tax under this Act.

"Use" means the exercise by any person of any right or power over, or the enjoyment of, the services subject to the tax under this Act.

Section 10-10. Imposition of tax; calculation of tax.

(a) Effective January 1, 2018, except as otherwise provided in this Section, a tax is imposed at the rate of 5% of the purchase price upon purchasers of: (i) amusements; (ii) the privilege of access to clubs; (iii) the privilege of having access to or use of amusement, athletic, entertainment and recreational equipment and facilities; and (iv) the privilege of using amusement devices.

(b) Except as otherwise provided in subsection (e), if tangible personal property is transferred incident to a purchase of service, and if the provider separately states on the invoice the cost price of the tangible personal property transferred incident to the purchase of service, the tax is imposed on the difference between the total purchase price and the provider's cost price of the tangible personal property transferred.

(c) Except as otherwise provided in subsection (e), if tangible personal property is transferred incident to a purchase of service, and if the provider does not separately state on the invoice the cost price of the tangible personal property transferred incident to the purchase of service, tax is imposed on 80% of the purchase price.

(d) Except as otherwise provided in subsection (e), a provider that transfers tangible personal property incident to a sale of service subject to tax under this Act shall make an annual election prior to December 31 of each year to pay the tax imposed by this Act under either subsection (b) or subsection (c) for the following calendar year. A provider may not make an election regarding the method of calculating tax on a transaction-by-transaction basis. For a provider that fails to make an election pursuant to this subsection, the tax is imposed on 80% of the purchase price.

(e) A provider making sales of services subject to tax under this Act in which the aggregate annual cost price of tangible personal property transferred incident to all sales of services subject to tax under this Act is less than 3% of the aggregate annual total purchase prices from all sales of services subject to tax under this Act, may annually elect to calculate tax on 100% of the total purchase price for each purchase of service. A provider that does not elect to calculate tax as provided in this subsection must separately state on the invoice the cost price of the tangible personal property transferred incident to a purchase of service and calculate tax pursuant to subsection (b).

A provider making an election to calculate tax under this subsection may provide resale certificates under Section 2c of the Retailers' Occupation Tax Act to his or her suppliers of tangible personal property that will be transferred incident to sales of services subject to tax under this Act only if the provider also makes sales of that tangible personal property at retail. A provider that provides resale certificates to his or her supplier must pay Retailers' Occupation Tax on the portion of the tangible personal property that is sold at retail.

Providers who do not also make sales of that tangible personal property at retail may not provide suppliers with certificates of resale, and their purchases of tangible personal property are subject to tax under the Use Tax Act.

(f) If any provider erroneously collects tax or collects more from the purchaser than the purchaser's liability for the transaction, the purchaser shall have a legal right to claim a refund of such amount from such provider. However, if such amount is not refunded to the purchaser for any reason, the provider is liable to pay such amount to the Department.

(g) The tax imposed by this Section is not imposed with respect to any transaction in interstate commerce, to the extent such transaction may not, under the Constitution and statutes of the United States, be made the subject of taxation by this State.

Section 10-15. Transactions involving subcontractors. If a provider subcontracts a service subject to tax under this Act in which tangible personal property is transferred, the provider does not incur a use tax liability on the cost price of any tangible personal property transferred to the provider by the subcontractor if the subcontractor (i) has paid or will pay use tax on his or her cost price of any tangible personal property transferred to the provider and (ii) certifies that fact in writing to the provider.

Section 10-20. Multi-state exemption. To prevent actual multi-state taxation of the services that are subject to taxation under this Act, any purchaser or provider, upon proof that the purchaser or provider has paid a tax in another state on such service, shall be allowed a credit against the tax imposed by this Act, to the extent of the amount of the tax properly due and paid in the other state.

Section 10-25. Exemptions.

(a) The following purchasers are exempt from the tax imposed by this Act:

(1) corporations, societies, associations, foundations, or institutions organized and operated exclusively for charitable, religious or educational purposes that have been issued an active tax exemption number by the Department under Section 1g of the Retailers' Occupation Tax Act; this paragraph is exempt from the provisions of Section 10-60;

(2) the federal government and its instrumentalities that have been issued an active tax exemption number by the Department under Section 1g of the Retailers' Occupation Tax Act; this paragraph is exempt from the provisions of Section 10-60; and

(3) government bodies that have been issued an active tax exemption number by the Department under Section 1g of the Retailers' Occupation Tax Act; this paragraph is exempt from the provisions of Section 10-60.

(b) The purchase of services performed on tangible personal property that is exempt under the Retailers' Occupation Tax Act, the Use Tax Act, the Service Occupation Tax Act, or the Service Use Tax Act is exempt under this Act. This subsection (b) is exempt from the provisions of Section 10-60.

Section 10-30. Collection of tax.

(a) Beginning with bills issued or charges collected for a purchase of service on and after January 1, 2018, the tax imposed by this Act shall be collected from the purchaser by any provider maintaining a place of business in this State at the rate stated in Section 10-10 with respect to the service subject to tax under this Act sold by such provider to or for the purchaser, and shall be remitted to the Department as provided in Section 10-50 of this Act. All sales of services subject to tax under this Act to a purchaser for use and not for resale are presumed subject to tax collection. Providers shall collect the tax from purchasers by adding the tax to the amount of the purchase price received from the purchaser for selling a service subject to tax under this Act to or for the purchaser. The tax imposed by the Act shall when collected be stated as a distinct item separate and apart from the purchase price of the service subject to tax under this Act. However, if it is not possible to state the tax separately, the Department may, by rule, exempt the purchase from this requirement if purchasers are notified by language on the invoice or other written notification or notified by a sign that the tax is included in the purchase price.

(b) Any person purchasing a service subject to tax under this Act for use and not for resale as to which there has been no charge made to him of the tax imposed by Section 10-10 shall make payment of the tax imposed by Section 10-10 of this Act in the form and manner provided by the Department not later than the 20th day of the month following the month of purchase of the service.

Section 10-35. Registration of providers.

(a) A person who engages in business as a provider in this State shall register with the Department. Application for a certificate of registration shall be made to the Department, by electronic means, in the form and manner prescribed by the Department and shall contain any reasonable information the Department may require. Upon receipt of the application for a certificate of registration in proper form and manner, the Department shall issue to the applicant a certificate of registration.

The annual fee payable to the Department for each certificate of registration shall be $75. The fee shall be deposited into the Tax Compliance and Administration Fund. Each applicant for a certificate of registration shall pay the fee to the Department at the time of submitting its application for certificate registration to the Department. The Department shall require an applicant for a certificate of registration under this Section to electronically pay the fee. A separate annual fee shall be paid for each place of business at which a person who is required to procure a certificate of registration under this Section proposes to sell a service in Illinois subject to tax under this Act.

(b) The Department may refuse to issue or reissue a certificate of registration to any applicant for the reasons set forth in Section 2505-380 of the Department of Revenue Law of the Civil Administrative Code of Illinois.

(c) Any person aggrieved by any decision of the Department under this Section may, within 20 days after notice of such decision, protest and request a hearing, whereupon the Department shall give notice to such person of the time and place fixed for such hearing and shall hold a hearing in conformity with the provisions of this Act and then issue its final administrative decision in the matter to such person. In the absence of such a protest within 20 days, the Department's decision shall become final without any further determination being made or notice given. The term "administrative decision" is as defined in Section 3-101 of the Code of Civil Procedure.

Section 10-40. Revocation of certificate of registration.

(a) The Department may, after notice and a hearing as provided herein, revoke the certificate of registration of any person who violates any of the provisions of this Act or regulation promulgated pursuant to this Act. Before revocation of a certificate of registration, the Department shall, within 90 days after non-compliance and at least 7 days prior to the date of the hearing, give the person so accused notice in writing of the charge against him or her, and on the date designated shall conduct a hearing upon this matter. The lapse of such 90 day period shall not preclude the Department from conducting revocation proceedings at a later date if necessary. Any hearing held under this Section shall be conducted by the Director or by any officer or employee of the Department designated in writing by the Director.

(b) The Department may revoke a certificate of registration for the reasons set forth in Section 2505-380 of the Department of Revenue Law of the Civil Administrative Code of Illinois.

(c) Upon the hearing of any such proceeding, the Director or any officer or employee of the Department designated in writing by the Director may administer oaths, and the Department may procure by its subpoena the attendance of witnesses and, by its subpoena duces tecum, the production of relevant books and papers. Any circuit court, upon application either of the accused or of the Department, may, by order duly entered, require the attendance of witnesses and the production of relevant books and papers before the Department in any hearing relating to the revocation of certificates of registration. Upon refusal or neglect to obey the order of the court, the court may compel obedience thereof by proceedings for contempt.

(d) The Department may, by application to any circuit court, obtain an injunction requiring any person who engages in business as a provider under this Act to obtain a certificate of registration. Upon refusal or neglect to obey the order of the court, the court may compel obedience by proceedings for contempt.

Section 10-45. Tax collected as debt owed to State. The tax herein required to be collected by any provider maintaining a place of business in this State, and any such tax collected by that person, shall constitute a debt owed by that person to this State.

Section 10-50. Return and payment of tax by provider.

(a) Each provider who is required or authorized to collect the tax imposed by this Act shall make a return to the Department on or before the 20th day of each month for the preceding calendar month stating the following:

(1) the provider's name;

(2) the address of the provider's principal place of business and the address of the principal place of business (if that is a different address) from which the provider engaged in the business of selling a service subject to tax under this Act;

(3) the total purchase price received by the provider for all services subject to tax under this Act;

(4) the amount of tax, computed upon item (3) at the rate stated in Section 10-10;

(5) the signature of the provider; and

(6) such other information as the Department may reasonably require.

Any amount that is required to be shown or reported on any return or other document under this Act shall, if such amount is not a whole-dollar amount, be increased to the nearest whole-dollar amount if the fractional part of a dollar is $0.50 or more and decreased to the nearest whole-dollar amount if the fractional part of a dollar is less than $0.50. If a total amount of less than $1 is payable, refundable, or creditable, such amount shall be disregarded if it is less than $0.50 and shall be increased to $1 if it is $0.50 or more.

The provider making the return provided for in this Section shall, at the time of making such return, pay to the Department the amount of tax imposed by this Act, less a discount of 1.75% which is allowed to reimburse the provider for the expenses incurred in keeping records, billing the purchaser, preparing and filing returns, remitting the tax, and supplying data to the Department upon request. No discount may be claimed by a provider on returns not timely filed and for taxes not timely remitted.

(b) If the average monthly tax liability to the Department of the provider does not exceed $200, the Department may authorize the provider's returns to be filed on a quarter-annual basis, with the return for January, February, and March of a given year being due by April 20 of such year; with the return for April, May, and June of a given year being due by July 20 of such year; with the return for July, August, and September of a given year being due by October 20 of such year; and with the return for October, November, and December of a given year being due by January 20 of the following year.

If the average monthly tax liability to the Department of the provider does not exceed $50, the Department may authorize the provider's returns to be filed on an annual basis, with the return for a given year being due by January 20 of the following year.

Such quarter-annual and annual returns, as to form and substance, shall be subject to the same requirements as monthly returns.

Notwithstanding any other provision in this Act concerning the time within which a provider may file a return, any such provider who ceases to engage in a kind of business which makes the person responsible for filing returns under this Act shall file a final return under this Act with the Department not more than one month after discontinuing such business.

Each provider whose average monthly liability to the Department under this Act was $10,000 or more during the preceding calendar year, excluding the month of highest liability and the month of lowest liability in such calendar year, shall make estimated payments to the Department on or before the 7th, 15th, 22nd, and last day of the month during which tax liability to the Department is incurred in an amount not less than the lower of either 22.5% of such provider's actual tax liability for the month or 25% of such provider's actual tax liability for the same calendar month of the preceding year. The amount of such quarter-monthly payments shall be credited against the final tax liability of such provider's return for that month. Once applicable, the requirement of the making of quarter-monthly payments to the Department by taxpayers having an average monthly tax liability of $10,000 or more as determined in the manner provided in this paragraph shall continue until that taxpayer's average monthly liability to the Department during the preceding 4 complete calendar quarters (excluding the month of highest liability and the month of lowest liability) is less than $9,000 or until such taxpayer's average monthly liability to the Department as computed for each of the 4 preceding complete calendar quarters is less than $10,000. However, if a taxpayer can show the Department that a substantial change in the taxpayer's business has occurred which causes the taxpayer to anticipate that his average monthly tax liability for the reasonably foreseeable future will fall below the $10,000 threshold stated above, then the taxpayer may petition the Department for a change in the taxpayer's reporting status. The Department shall change that taxpayer's reporting status unless it finds that such change is seasonal in nature and not likely to be long term. If any such quarter-monthly payment is not paid at the time or in the amount required by this Section, then the taxpayer shall be liable for penalties and interest on the difference between the minimum amount due as a payment and the amount of such quarter-monthly payments actually and timely paid, except insofar as the taxpayer has previously made payments for that month to the Department in excess of the minimum payments previously due as provided in this Section. The Department shall adopt rules to govern the quarter-monthly payment amount and quarter-monthly payment dates for taxpayers who file on other than a calendar monthly basis.

If any payment provided for in this Section exceeds the taxpayer's liabilities under this Act, as shown on an original monthly return, the Department shall, if requested by the taxpayer, issue to the taxpayer a credit memorandum no later than 30 days after the date of payment. The credit evidenced by such credit memorandum may be assigned by the taxpayer to a similar taxpayer under this Act, in accordance with reasonable rules and regulations to be prescribed by the Department. If no such request is made, the taxpayer may credit such excess payment against tax liability subsequently to be remitted to the Department under this Act, in accordance with reasonable rules and regulations prescribed by the Department. If the Department subsequently determines that all or any part of the credit taken was not actually due to the taxpayer, the taxpayer's 1.75% discount shall be reduced by 1.75% of the difference between the credit taken and that actually due, and that taxpayer shall be liable for penalties and interest on such difference.

(c) A provider who has a tax liability in the amount set forth in subsection (b) of Section 2505-210 of the Department of Revenue Law of the Civil Administrative Code of Illinois shall make all payments required by rules of the Department by electronic funds transfer. Any provider not required to make payments by electronic funds transfer may make payments by electronic funds transfer with the permission of the Department. All providers required to make payments by electronic funds transfer and any providers authorized to voluntarily make payments by electronic funds transfer shall make those payments in the manner authorized by the Department.

(d) If a provider fails to sign a return within 30 days after the proper notice and demand for signature by the Department is received by the provider, the return shall be considered valid and any amount shown to be due on the return shall be deemed assessed.

(e) Any person engaged in business as a provider at the Illinois State Fair, the DuQuoin State Fair, a county fair, an art show, a flea market, or a similar exhibition or event may be required to make a daily report to the Department setting forth the amount of purchases of service and make a daily payment of the full amount of tax due. The Department shall impose this requirement when it finds that there is a significant risk of loss of revenue to the State at such an exhibition or event. Such a finding shall be based on evidence that a substantial number of providers who are not residents of Illinois will be engaging in business at the exhibition or event, or other evidence of a significant risk of loss of revenue to the State. The Department shall notify providers affected by the imposition of this requirement. In the absence of notification by the Department, the providers shall file their returns as otherwise required in this Section.

Section 10-55. Claims; credit memorandum or refunds. If it appears, after claim therefore filed with the Department, that an amount of tax or penalty has been paid to the Department by the taxpayer which was not due under this Act, whether as the result of a mistake of fact or an error of law, except as hereinafter provided, then the Department shall issue a credit memorandum or refund to the person who made the erroneous payment or, if that person has died or become a person under legal disability, to his or her legal representative, as such.

If it is determined that the Department should issue a credit or refund under this Act, the Department may first apply the amount thereof against any amount of tax or penalty due under this Act, or any other Act administered by the Department, from the person entitled to such credit or refund. For this purpose, if proceedings are pending to determine whether or not any tax or penalty is due under this Act, or any other Act administered by the Department, from such person, the Department may withhold issuance of the credit or refund pending the final disposition of such proceedings and may apply such credit or refund against any amount found to be due to the Department under this Act, or any other Act administered by the Department, as a result of such proceedings. The balance, if any, of the credit or refund shall be issued to the person entitled thereto.

If no tax or penalty is due and no proceeding is pending to determine whether such taxpayer is indebted to the Department for tax or penalty, the credit memorandum or refund shall be issued to the claimant; or (in the case of a credit memorandum) the credit memorandum may be assigned and set over by the lawful holder thereof, subject to reasonable rules of the Department, to any other person who is subject to this Act, and the amount thereof shall be applied by the Department against any tax or penalty due or to become due under this Act from such assignee.

As to any claim filed hereunder with the Department on and after each January 1 and July 1, no amount of tax or penalty erroneously paid (either in total or partial liquidation of a tax or penalty under this Act) more than 3 years prior to such January 1 and July 1, respectively, shall be credited or refunded, except that if both the Department and the taxpayer have agreed to an extension of time to issue a notice of tax liability under this Act, the claim may be filed at any time prior to the expiration of the period agreed upon.

No claim may be allowed for any amount paid to the Department, whether paid voluntarily or involuntarily, if paid in total or partial liquidation of an assessment which had become final before the claim for credit or refund to recover the amount so paid is filed with the Department, or if paid in total or partial liquidation of a judgment or order of court. No claim may be allowed or refund made for any amount paid by or collected from any purchaser unless it appears that the claimant has unconditionally repaid to the purchaser any amount collected from the purchaser and retained by the claimant with respect to the same transaction under the Act.

Any credit or refund that is allowed under this Act shall bear interest at the rate and in the manner set forth in the Uniform Penalty and Interest Act.

In case the Department determines that the claimant is entitled to a refund, such refund shall be made only from such appropriation as may be available for that purpose. If it appears unlikely that the amount appropriated would permit everyone having a claim allowed during the period covered by such appropriation to elect to receive a cash refund, the Department, by rule or regulation, shall provide for the payment of refunds in hardship cases and shall define what types of cases qualify as hardship cases.

Section 10-60. Sunset of exemptions, credits, and deductions. The application of every exemption, credit, and deduction against tax imposed by this Act that becomes law after the effective date of this Act shall be limited by a reasonable and appropriate sunset date. A taxpayer is not entitled to take the exemption, credit, or deduction beginning on the sunset date and thereafter. If a reasonable and appropriate sunset date is not specified in the Public Act that creates the exemption, credit, or deduction, a taxpayer shall not be entitled to take the exemption, credit, or deduction beginning 5 years after the effective date of the Public Act creating the exemption, credit, or deduction and thereafter.

Section 10-65. Deposit of proceeds. Except as otherwise provided in this Section, all moneys received by the Department under this Act shall be paid into the General Revenue Fund. Each month, from the moneys received by the Department under this Act for the preceding month, the Department shall pay $50,000 monthly into the Sexual Assault Services Prevention Fund, a special fund in the State treasury, increased annually on July 1 by the percentage increase in the Consumer Price Index during the 12-month calendar year preceding that July 1. For purposes of this Section "Consumer Price Index" means the Consumer Price Index for All Urban Consumers for all items published by the United States Department of Labor.

Section 10-70. Rulemaking. The Department may adopt rules under the Illinois Administrative Procedure Act and prescribe forms relating to the administration and enforcement of this Act as it deems appropriate.

Section 10-75. Incorporation by reference. All of the provisions of Sections 2a, 2b, 4, 5, 5a, 5b, 5c, 5d, 5e, 5f, 5g, 5i, 5j, 6a, 6b, 6c, 6d, 7, 8, 9, 10, 11, 11a, 12, and 13 of the Retailers' Occupation Tax Act and all of the provisions of the Uniform Penalty and Interest Act, that are not inconsistent with this Act, apply to providers to the same extent as if those provisions were included in this Act. References in the incorporated Sections of the Retailers' Occupation Tax Act to retailers, to sellers, or to persons engaged in the business of selling tangible personal property mean providers when used in this Act. References in the incorporated Sections to sales of tangible personal property mean sales of services subject to tax under this Act when used in this Act.

ARTICLE 15. REPAIR AND MAINTENANCE EXCISE TAX ACT

Section 15-1. Short title. This Act may be cited as the Repair and Maintenance Excise Tax Act.

Section 15-5. Definitions.

"Business" means any person engaged in activities with the object of profit or gain, either directly or indirectly, to the person.

"Cost price" means the consideration paid by a provider to a supplier for a purchase of tangible personal property valued in money, whether paid in money or otherwise, including cash, credits and services, and shall be determined without any deduction on account of taxes paid by the provider for the purchase of tangible personal property or on account of any expenses that are part of the selling price of the tangible personal property taxable under the Retailers' Occupation Tax Act and the Use Tax Act that are charged to the provider by a supplier. When a provider contracts out part or all of the services required in his sale of service subject to tax under this Act, it shall be presumed that the cost price to the provider of the tangible personal property transferred to him or her by his or her subcontractor is equal to 50% of the subcontractor's charges to the provider in the absence of proof of the consideration paid for the tangible personal property by the provider to the subcontractor.

"Department" means the Department of Revenue.

"Director" means the Director of Revenue.

"Person" means any natural individual, firm, trust, estate, partnership, association, joint stock company, joint venture, corporation, limited liability company, or a receiver, trustee, guardian, or other representative appointed by order of any court.

"Provider" means any person engaged in the business of repairing, servicing, altering, fitting, cleaning, painting, coating, towing, inspecting, or maintaining tangible personal property or tangible personal property that has been affixed to real estate.

"Provider maintaining a place of business in this State", or any like term, means and includes any of the following:

(1) A provider having or maintaining within this State, directly or by a subsidiary, an office, distribution house, sales house, warehouse or other place of business, or any agent or other representative operating within this State under the authority of the provider or its subsidiary, irrespective of whether such place of business or agent or other representative is located here permanently or temporarily, or whether such provider or subsidiary is licensed to do business in this State.

(2) A provider having a contract with a person located in this State under which the person, for a commission or other consideration based upon the sale of services subject to tax under this Act by the provider, directly or indirectly refers potential customers to the provider by providing to the potential customers a promotional code or other mechanism that allows the provider to track purchases referred by such persons. Examples of mechanisms that allow the provider to track purchases referred by such persons include but are not limited to the use of a link on the person's Internet website, promotional codes distributed through the person's hand-delivered or mailed material, and promotional codes distributed by the person through radio or other broadcast media. The provisions of this paragraph (2) shall apply only if the cumulative purchase prices from sales of services subject to tax under this Act by the provider to purchasers who are referred to the provider by all persons in this State under such contracts exceed $10,000 during the preceding 4 quarterly periods ending on the last day of March, June, September, and December. A provider meeting the requirements of this paragraph (2) shall be presumed to be maintaining a place of business in this State but may rebut this presumption by submitting proof that the referrals or other activities pursued within this State by such persons were not sufficient to meet the nexus standards of the United States Constitution during the preceding 4 quarterly periods.

(3) A provider having a contract with a person located in this State under which:

(A) the provider sells the same or substantially similar service subject to tax under this Act as the person located in this State and does so using an identical or substantially similar name, trade name, or trademark as the person located in this State; and

(B) the provider provides a commission or other consideration to the person located in this State based upon the sale of services subject to tax under this Act by the provider.

The provisions of this paragraph (3) shall apply only if the cumulative purchase prices from sales of services subject to tax under this Act by the provider to purchasers in this State under all such contracts exceed $10,000 during the preceding 4 quarterly periods ending on the last day of March, June, September, and December.

"Purchase of service" means the acquisition of the repair, service, alteration, fitting, cleaning, painting, coating, towing, inspection, or maintenance of tangible personal property or tangible personal property that has been affixed to real estate, for a valuable consideration.

"Purchase price" means the consideration paid for a purchase of service, all services directly related to the purchase of service, and all tangible personal property transferred incident to the purchase of service, valued in money, whether received in money or otherwise, including cash, gift cards, reward points, credits, and property and shall be determined without any deduction on account of the cost of materials used, labor or service costs, or any other expense whatsoever. However, "purchase price" shall not include consideration paid for:

(1) any charge for a dishonored check;

(2) any finance or credit charge, penalty or charge for delayed payment, or discount for prompt payment;

(3) any purchase by a purchaser if the provider is prohibited by federal or State constitution, treaty, convention, statute or court decision from collecting the tax from such purchaser;

(4) the isolated or occasional sale of services subject to tax under this Act by a person who does not hold himself out as being engaged (or who does not habitually engage) in selling such service;

(5) any amounts added to a purchaser's bills because of charges made pursuant to the tax imposed by this Act; and

(6) new construction, reconstruction, or expansion of a building or structure.

In case credit is extended, the amount thereof shall be included only as and when payments are made.

"Purchaser" means any person who acquires the repair, service, alteration, fitting, cleaning, painting, coating, towing, inspection, or maintenance of tangible personal property or tangible personal property that has been affixed to real estate, for a valuable consideration.

"Supplier" means any person who makes sales of tangible personal property to providers for subsequent transfer incident to a sale of service subject to tax under this Act.

"Use" means the exercise by any person of any right or power over, or the enjoyment of, the services subject to tax under this Act.

Section 15-10. Imposition of tax; calculation of tax.

(a) Effective January 1, 2018, except as otherwise provided in this Section, a tax is imposed upon the purchase, for use and not for resale, of the repair, servicing, alteration, fitting, cleaning, painting, coating, towing, inspection, or maintenance of tangible personal property or tangible personal property that has been affixed to real estate at the rate of 5% of the purchase price.

(b) Except as otherwise provided in subsection (e), if tangible personal property is transferred incident to a purchase of service, and if the provider separately states on the invoice the cost price of the tangible personal property transferred incident to the purchase of service, the tax is imposed on the difference between the total purchase price and the provider's cost price of the tangible personal property transferred.

(c) Except as otherwise provided in subsection (e), if tangible personal property is transferred incident to a purchase of service, and if the provider does not separately state on the invoice the cost price of the tangible personal property transferred incident to the purchase of service, tax is imposed on 80% of the purchase price.

(d) Except as otherwise provided in subsection (e), a provider that transfers tangible personal property incident to sales of service subject to tax under this Act shall make an annual election prior to December 31 of each year to pay the tax imposed by this Act under either subsection (b) or subsection (c) for the following calendar year. A provider may not make an election regarding the method of calculating tax on a transaction-by-transaction basis. For a provider that fails to make an election pursuant to this subsection, the tax is imposed on 80% of the purchase price.

(e) A provider making sales of services subject to tax under this Act in which the aggregate annual cost price of tangible personal property transferred incident to all sales of services subject to tax under this Act is less than 3% of the aggregate annual total purchase prices from all sales of services subject to tax under this Act, may annually elect to calculate tax on 100% of the total purchase price for each purchase of service. A provider that does not elect to calculate tax as provided in this subsection must separately state on the invoice the cost price of the tangible personal property transferred incident to a purchase of service and calculate tax pursuant to subsection (b).

A provider making an election to calculate tax under this subsection may provide resale certificates under Section 2c of the Retailers' Occupation Tax Act to his or her suppliers of tangible personal property that will be transferred incident to sales of services subject to tax under this Act only if the provider also makes sales of that tangible personal property at retail. A provider that provides resale certificates to his or her supplier must pay Retailers' Occupation Tax on the portion of the tangible personal property that is sold at retail.

Providers who do not also make sales of that tangible personal property at retail may not provide suppliers with certificates of resale, and their purchases of tangible personal property are subject to tax under the Use Tax Act.

(f) If any provider erroneously collects tax or collects more from the purchaser than the purchaser's liability for the transaction, the purchaser shall have a legal right to claim a refund of such amount from such provider. However, if such amount is not refunded to the purchaser for any reason, the provider is liable to pay such amount to the Department.

(g) The tax imposed by this Section 15-10 is not imposed with respect to any transaction in interstate commerce, to the extent such transaction may not, under the Constitution and statutes of the United States, be made the subject of taxation by this State.

Section 15-15. Transactions involving subcontractors. Providers making purchases of service from a subcontractor are exempt from tax under this Act in accordance with paragraph (1) of subsection (a) of Section 15-25. However, this exemption does not apply to use tax due on the tangible personal property transferred incident to the service. If a provider subcontracts a service subject to tax under this Act in which tangible personal property is transferred, the provider does not incur a use tax liability on the cost price of any tangible personal property transferred to the provider by the subcontractor if the subcontractor (i) has paid or will pay use tax on his or her cost price of any tangible personal property transferred to the provider and (ii) certifies that fact in writing to the provider.

Section 15-20. Multi-state exemption. To prevent actual multi-state taxation of services that are subject to taxation under this Act, any purchaser or provider, upon proof that the purchaser or provider has paid a tax in another state on such service, shall be allowed a credit against the tax imposed by this Act, to the extent of the amount of the tax properly due and paid in the other state.

Section 15-25. Exemptions.

(a) The following purchasers are exempt from the tax imposed by this Act:

(1) Businesses making purchases of service for the benefit of or in furtherance of the business. This paragraph is exempt from the provisions of Section 15-60.

(2) Corporations, societies, associations, foundations, or institutions organized and operated exclusively for charitable, religious, or educational purposes that have been issued an active tax exemption number by the Department under Section 1g of the Retailers' Occupation Tax Act. This paragraph is exempt from the provisions of Section 15-60.

(3) The federal government and its instrumentalities that have been issued an active tax exemption number by the Department under Section 1g of the Retailers' Occupation Tax Act. This paragraph is exempt from the provisions of Section 15-60.

(4) Government bodies that have been issued an active tax exemption number by the Department under Section 1g of the Retailers' Occupation Tax Act. This paragraph is exempt from the provisions of Section 15-60.

(b) The purchase of the following services is exempt from the tax imposed by this Act:

(1) Laundry, dry cleaning, cloth pressing, dyeing, and linen services, to the extent that those services are subject to a separate tax imposed by the State. This paragraph is exempt from the provisions of Section 15-60.

(2) Landscaping services, to the extent that those services are subject to a separate tax imposed by the State. This paragraph is exempt from the provisions of Section 15-60.

(3) Services performed on tangible personal property exempt under the Retailers' Occupation Tax Act, Use Tax Act, Service Occupation Tax Act, or Service Use Tax Act. This paragraph is exempt from the provisions of Section 15-60.

Section 15-30. Collection of tax.

(a) Beginning with bills issued or charges collected for a purchase of service on and after January 1, 2018, the tax imposed by this Act shall be collected from the purchaser by any provider maintaining a place of business in this State at the rate stated in Section 15-10 with respect to the service subject to tax under this Act sold by such provider to or for the purchaser, and shall be remitted to the Department as provided in Section 15-50 of this Act. All sales of services subject to tax under this Act to a purchaser for use and not for resale are presumed subject to tax collection. Providers shall collect the tax from purchasers by adding the tax to the amount of the purchase price received from the purchaser for selling a service subject to tax under this Act to or for the purchaser. The tax imposed by the Act shall, when collected, be stated as a distinct item separate and apart from the purchase price of the service subject to tax under this Act. However, if it is not possible to state the tax separately, the Department may by rule exempt the purchase from this requirement if purchasers are notified by language on the invoice or other written notification or notified by a sign that the tax is included in the purchase price.

(b) Any person purchasing a service subject to tax under this Act for use and not for resale as to which there has been no charge made to him of the tax imposed by Section 15-10 shall make payment of the tax imposed by Section 15-10 of this Act in the form and manner provided by the Department not later than the 20th day of the month following the month of purchase of the service.

Section 15-35. Registration of providers.

(a) A person who engages in business as a provider in this State shall register with the Department. Application for a certificate of registration shall be made to the Department, by electronic means, in the form and manner prescribed by the Department and shall contain any reasonable information the Department may require. Upon receipt of the application for a certificate of registration in proper form and manner, the Department shall issue to the applicant a certificate of registration.

The annual fee payable to the Department for each certificate of registration shall be $75. The fee shall be deposited into the Tax Compliance and Administration Fund. Each applicant for a certificate of registration shall pay the fee to the Department at the time of submitting its application for certificate registration to the Department. The Department shall require an applicant for a certificate of registration under this Section to electronically pay the fee. A separate annual fee shall be paid for each place of business at which a person who is required to procure a certificate of registration under this Section proposes to sell a service in Illinois subject to tax under this Act.

(b) The Department may refuse to issue or reissue a certificate of registration to any applicant for the reasons set forth in Section 2505-380 of the Department of Revenue Law of the Civil Administrative Code of Illinois.

(c) Any person aggrieved by any decision of the Department under this Section may, within 20 days after notice of such decision, protest and request a hearing, whereupon the Department shall give notice to such person of the time and place fixed for such hearing and shall hold a hearing in conformity with the provisions of this Act and then issue its final administrative decision in the matter to such person. In the absence of such a protest within 20 days, the Department's decision shall become final without any further determination being made or notice given.

Section 15-40. Revocation of certificate of registration.

(a) The Department may, after notice and a hearing as provided herein, revoke the certificate of registration of any person who violates any of the provisions of this Act or regulation promulgated pursuant to this Act. Before revocation of a certificate of registration, the Department shall, within 90 days after non-compliance and at least 7 days prior to the date of the hearing, give the person so accused notice in writing of the charge against him or her, and on the date designated shall conduct a hearing upon this matter. The lapse of such 90-day period shall not preclude the Department from conducting revocation proceedings at a later date if necessary. Any hearing held under this Section shall be conducted by the Director or by any officer or employee of the Department designated in writing by the Director.

(b) The Department may revoke a certificate of registration for the reasons set forth in Section 2505-380 of the Department of Revenue Law of the Civil Administrative Code of Illinois.

(c) Upon the hearing of any such proceeding, the Director or any officer or employee of the Department designated in writing by the Director may administer oaths, and the Department may procure by its subpoena the attendance of witnesses and, by its subpoena duces tecum, the production of relevant books and papers. Any circuit court, upon application either of the accused or of the Department, may, by order duly entered, require the attendance of witnesses and the production of relevant books and papers before the Department in any hearing relating to the revocation of certificates of registration. Upon refusal or neglect to obey the order of the court, the court may compel obedience thereof by proceedings for contempt.

(d) The Department may, by application to any circuit court, obtain an injunction requiring any person who engages in business as a provider under this Act to obtain a certificate of registration. Upon refusal or neglect to obey the order of the court, the court may compel obedience by proceedings for contempt.

Section 15-45. Tax collected as debt owed to State. The tax herein required to be collected by any provider maintaining a place of business in this State, and any such tax collected by that person, shall constitute a debt owed by that person to this State.

Section 15-50. Return and payment of tax by provider.

(a) Each provider who is required or authorized to collect the tax imposed by this Act shall make a return to the Department on or before the 20th day of each month for the preceding calendar month stating the following:

(1) the provider's name;

(2) the address of the provider's principal place of business and the address of the principal place of business (if that is a different address) from which the provider engaged in the business of selling a service subject to tax under this Act;

(3) total purchase price received by the provider for all services subject to tax under this Act;

(4) amount of tax;

(5) the signature of the provider; and

(6) such other information as the Department reasonably may require.

Any amount which is required to be shown or reported on any return or other document under this Act shall, if such amount is not a whole-dollar amount, be increased to the nearest whole-dollar amount if the fractional part of a dollar is $0.50 or more and decreased to the nearest whole-dollar amount if the fractional part of a dollar is less than $0.50. If a total amount of less than $1 is payable, refundable, or creditable, such amount shall be disregarded if it is less than $0.50 and shall be increased to $1 if it is $0.50 or more.

The provider making the return provided for in this Section shall, at the time of making such return, pay to the Department the amount of tax imposed by this Act, less a discount of 1.75% which is allowed to reimburse the provider for the expenses incurred in keeping records, billing the purchaser, preparing and filing returns, remitting the tax, and supplying data to the Department upon request. No discount may be claimed by a provider on returns not timely filed and for taxes not timely remitted.

(b) If the average monthly tax liability to the Department of the provider does not exceed $200, the Department may authorize the provider's returns to be filed on a quarter-annual basis, with the return for January, February, and March of a given year being due by April 20 of such year; with the return for April, May, and June of a given year being due by July 20 of such year; with the return for July, August, and September of a given year being due by October 20 of such year; and with the return for October, November, and December of a given year being due by January 20 of the following year.

If the average monthly tax liability to the Department of the provider does not exceed $50, the Department may authorize the provider's returns to be filed on an annual basis, with the return for a given year being due by January 20 of the following year.

Such quarter-annual and annual returns, as to form and substance, shall be subject to the same requirements as monthly returns.

Notwithstanding any other provision in this Act concerning the time within which a provider may file a return, any such provider who ceases to engage in a kind of business which makes the person responsible for filing returns under this Act shall file a final return under this Act with the Department not more than one month after discontinuing such business.

Each provider whose average monthly liability to the Department under this Act was $10,000 or more during the preceding calendar year, excluding the month of highest liability and the month of lowest liability in such calendar year, shall make estimated payments to the Department on or before the 7th, 15th, 22nd, and last day of the month during which tax liability to the Department is incurred in an amount not less than the lower of either 22.5% of such provider's actual tax liability for the month or 25% of such provider's actual tax liability for the same calendar month of the preceding year. The amount of such quarter-monthly payments shall be credited against the final tax liability of such provider's return for that month. Once applicable, the requirement of the making of quarter-monthly payments to the Department by taxpayers having an average monthly tax liability of $10,000 or more as determined in the manner provided in this paragraph shall continue until the taxpayer's average monthly liability to the Department during the preceding 4 complete calendar quarters (excluding the month of highest liability and the month of lowest liability) is less than $9,000 or until the taxpayer's average monthly liability to the Department as computed for each of the 4 preceding complete calendar quarters is less than $10,000. However, if a taxpayer can show the Department that a substantial change in the taxpayer's business has occurred which causes the taxpayer to anticipate that his average monthly tax liability for the reasonably foreseeable future will fall below the $10,000 threshold stated above, then such taxpayer may petition the Department for a change in the taxpayer's reporting status. The Department shall change the taxpayer's reporting status unless it finds that the change is seasonal in nature and not likely to be long term. If any such quarter-monthly payment is not paid at the time or in the amount required by this Section, then the taxpayer shall be liable for penalties and interest on the difference between the minimum amount due as a payment and the amount of such quarter-monthly payment actually and timely paid, except insofar as the taxpayer has previously made payments for that month to the Department in excess of the minimum payments previously due as provided in this Section. The Department shall adopt rules to govern the quarter-monthly payment amount and quarter-monthly payment dates for taxpayers who file on other than a calendar monthly basis.

If any payment provided for in this Section exceeds the taxpayer's liabilities under this Act, as shown on an original monthly return, the Department shall, if requested by the taxpayer, issue to the taxpayer a credit memorandum no later than 30 days after the date of payment. The credit evidenced by such credit memorandum may be assigned by the taxpayer to a similar taxpayer under this Act, in accordance with reasonable rules and regulations to be prescribed by the Department. If no such request is made, the taxpayer may credit such excess payment against tax liability subsequently to be remitted to the Department under this Act, in accordance with reasonable rules and regulations prescribed by the Department. If the Department subsequently determines that all or any part of the credit taken was not actually due to the taxpayer, the taxpayer's 1.75% discount shall be reduced by 1.75% of the difference between the credit taken and that actually due, and that taxpayer shall be liable for penalties and interest on such difference.

(c) A provider who has a tax liability in the amount set forth in subsection (b) of Section 2505-210 of the Department of Revenue Law of the Civil Administrative Code of Illinois shall make all payments required by rules of the Department by electronic funds transfer. Any provider not required to make payments by electronic funds transfer may make payments by electronic funds transfer with the permission of the Department. All providers required to make payments by electronic funds transfer and any providers authorized to voluntarily make payments by electronic funds transfer shall make those payments in the manner authorized by the Department.

(d) If a provider fails to sign a return within 30 days after the proper notice and demand for signature by the Department is received by the provider, the return shall be considered valid and any amount shown to be due on the return shall be deemed assessed.

Section 15-55. Claims; credit memorandum or refunds. If it appears, after claim therefore filed with the Department, that an amount of tax or penalty has been paid to the Department by the taxpayer which was not due under this Act, whether as the result of a mistake of fact or an error of law, except as hereinafter provided, then the Department shall issue a credit memorandum or refund to the person who made the erroneous payment or, if that person has died or become a person under legal disability, to his or her legal representative, as such.

If it is determined that the Department should issue a credit or refund under this Act, the Department may first apply the amount thereof against any amount of tax or penalty due under this Act, or any other Act administered by the Department, from the person entitled to such credit or refund. For this purpose, if proceedings are pending to determine whether or not any tax or penalty is due under this Act, or any other Act administered by the Department, from such person, the Department may withhold issuance of the credit or refund pending the final disposition of such proceedings and may apply such credit or refund against any amount found to be due to the Department under this Act, or any other Act administered by the Department, as a result of such proceedings. The balance, if any, of the credit or refund shall be issued to the person entitled thereto.

If no tax or penalty is due and no proceeding is pending to determine whether such taxpayer is indebted to the Department for tax or penalty, the credit memorandum or refund shall be issued to the claimant; or (in the case of a credit memorandum) the credit memorandum may be assigned and set over by the lawful holder thereof, subject to reasonable rules of the Department, to any other person who is subject to this Act, and the amount thereof shall be applied by the Department against any tax or penalty due or to become due under this Act from such assignee.

As to any claim filed hereunder with the Department on and after each January 1 and July 1, no amount of tax or penalty erroneously paid (either in total or partial liquidation of a tax or penalty under this Act) more than 3 years prior to such January 1 and July 1, respectively, shall be credited or refunded, except that if both the Department and the taxpayer have agreed to an extension of time to issue a notice of tax liability under this Act, the claim may be filed at any time prior to the expiration of the period agreed upon. No claim may be allowed for any amount paid to the Department, whether paid voluntarily or involuntarily, if paid in total or partial liquidation of an assessment which had become final before the claim for credit or refund to recover the amount so paid is filed with the Department, or if paid in total or partial liquidation of a judgment or order of court.

No claim may be allowed or refund made for any amount paid by or collected from any purchaser unless it appears that the claimant has unconditionally repaid to the purchaser any amount collected from the purchaser and retained by the claimant with respect to the same transaction under the Act.

Any credit or refund that is allowed under this Act shall bear interest at the rate and in the manner set forth in the Uniform Penalty and Interest Act.

In case the Department determines that the claimant is entitled to a refund, such refund shall be made only from such appropriation as may be available for that purpose. If it appears unlikely that the amount appropriated would permit everyone having a claim allowed during the period covered by such appropriation to elect to receive a cash refund, the Department, by rule or regulation, shall provide for the payment of refunds in hardship cases and shall define what types of cases qualify as hardship cases.

Section 15-60. Sunset of exemptions, credits, and deductions. The application of every exemption, credit, and deduction against tax imposed by this Act that becomes law after the effective date of this Act shall be limited by a reasonable and appropriate sunset date. A taxpayer is not entitled to take the exemption, credit, or deduction beginning on the sunset date and thereafter. If a reasonable and appropriate sunset date is not specified in the Public Act that creates the exemption, credit, or deduction, a taxpayer shall not be entitled to take the exemption, credit, or deduction beginning 5 years after the effective date of the Public Act creating the exemption, credit, or deduction and thereafter.

Section 15-65. Distribution of proceeds. All moneys received by the Department under this Act shall be paid into the General Revenue Fund in the State Treasury.

Section 15-70. Rulemaking. The Department may adopt rules in accordance with the Illinois Administrative Procedure Act and prescribe forms relating to the administration and enforcement of this Act as it deems appropriate.

Section 15-75. Incorporation by reference. All of the provisions of Sections 2a, 2b, 4, 5, 5a, 5b, 5c, 5d, 5e, 5f, 5g, 5i, 5j, 6a, 6b, 6c, 6d, 7, 8, 9, 10, 11, 11a, 12, and 13 of the Retailers' Occupation Tax Act and all of the provisions of the Uniform Penalty and Interest Act, that are not inconsistent with this Act, apply to providers to the same extent as if those provisions were included in this Act. References in the incorporated Sections of the Retailers' Occupation Tax Act to retailers, to sellers, or to persons engaged in the business of selling tangible personal property mean providers when used in this Act. References in the incorporated Sections to sales of tangible personal property mean sales of services subject to tax under this Act when used in this Act.

ARTICLE 20. LANDSCAPING EXCISE TAX ACT

Section 20-1. Short title. This Act may be cited as the Landscaping Excise Tax Act.

Section 20-5. Definitions.

"Cost price" means the consideration paid by a provider to a supplier for a purchase of tangible personal property valued in money, whether paid in money or otherwise, including cash, credits and services, and shall be determined without any deduction on account of taxes paid by the provider for the purchase of tangible personal property or on account of any expenses that are part of the selling price of the tangible personal property taxable under the Retailers' Occupation Tax Act and the Use Tax Act that are charged to the provider by a supplier. When a provider contracts out part or all of the services required in his sale of service subject to tax under this Act, it shall be presumed that the cost price to the provider of the tangible personal property transferred to him or her by his or her subcontractor is equal to 50% of the subcontractor's charges to the provider in the absence of proof of the consideration paid for the tangible personal property by the provider to the subcontractor.

"Department" means the Department of Revenue.

"Director" means the Director of Revenue.

"Landscaping services" means services performed by a person who arranges and modifies the natural condition of a given parcel or tract of land so as to render the land suitable for public or private use or enjoyment. Landscaping services include, but are not limited to, mowing, watering, and aerating lawns; weeding; mulching; raking leaves; tree and shrub trimming and removal; planting of trees, shrubs, flowering and non-flowering plants, and sod; spraying; fertilizing; applying chemicals; lawn and garden installation; constructing, remodeling, or repairing irrigation or lawn sprinkler systems, patios (other than asphalt, tar, macadam, or poured concrete), walkways (other than asphalt, tar, macadam, or poured concrete), fences, trellises, and retaining walls; grading (such as the filling or leveling of topsoil for lawns and gardens), and snow plowing and removal.

"Person" means any natural individual, firm, trust, estate, partnership, association, joint stock company, joint venture, corporation, limited liability company, or a receiver, trustee, guardian, or other representative appointed by order of any court.

"Provider" means any person engaged in the business of providing landscaping services.

"Provider maintaining a place of business in this State", or any like term, means any of the following:

(1) A provider having or maintaining within this State, directly or by a subsidiary, an office, distribution house, sales house, warehouse, or other place of business, or any agent or other representative operating within this State under the authority of the provider or its subsidiary, irrespective of whether such place of business or agent or other representative is located here permanently or temporarily, or whether such provider or subsidiary is licensed to do business in this State.

(2) A provider having a contract with a person located in this State under which the person, for a commission or other consideration based upon the sale of services subject to tax under this Act by the provider, directly or indirectly refers potential customers to the provider by providing to the potential customers a promotional code or other mechanism that allows the provider to track purchases referred by such persons. Examples of mechanisms that allow the provider to track purchases referred by such persons include, but are not limited to, the use of a link on the person's Internet website, promotional codes distributed through the person's hand-delivered or mailed material, and promotional codes distributed by the person through radio or other broadcast media. The provisions of this paragraph (2) shall apply only if the cumulative purchase prices from sales of services subject to tax under this Act by the provider to purchasers who are referred to the provider by all persons in this State under such contracts exceed $10,000 during the preceding 4 quarterly periods ending on the last day of March, June, September, and December. A provider meeting the requirements of this paragraph (2) shall be presumed to be maintaining a place of business in this State but may rebut this presumption by submitting proof that the referrals or other activities pursued within this State by such persons were not sufficient to meet the nexus standards of the United States Constitution during the preceding 4 quarterly periods.

(3) A provider having a contract with a person located in this State under which:

(A) the provider sells the same or substantially similar service subject to tax under this Act as the person located in this State and does so using an identical or substantially similar name, trade name, or trademark as the person located in this State; and

(B) the provider provides a commission or other consideration to the person located in this State based upon the sale of services subject to tax under this Act by the provider.

The provisions of this paragraph (3) shall apply only if the cumulative purchase prices from sales of services subject to tax under this Act by the provider to purchasers in this State under all such contracts exceed $10,000 during the preceding 4 quarterly periods ending on the last day of March, June, September, and December.

"Purchase of service" means the acquisition of landscaping services for a valuable consideration.

"Purchase price" means the consideration paid for a purchase of service, all services directly related to the purchase of service, and all tangible personal property transferred incident to the purchase of service, valued in money, whether received in money or otherwise, including cash, gift cards, reward points, credits, and property and shall be determined without any deduction on account of the cost of materials used, labor or service costs, or any other expense whatsoever. "Purchase price" shall not include consideration paid for:

(1) any charge for a dishonored check;

(2) any finance or credit charge, penalty or charge for delayed payment, or discount for prompt payment;

(3) any purchase by a purchaser if the provider is prohibited by federal or State constitution, treaty, convention, statute, or court decision from collecting the tax from such purchaser;

(4) the isolated or occasional sale of services subject to tax under this Act by a person who does not hold himself out as being engaged (or who does not habitually engage) in selling such service; and

(5) any amounts added to a purchaser's bills because of charges made pursuant to the tax imposed by this Act.

In case credit is extended, the amount thereof shall be included only as and when payments are made.

"Purchaser" means any person who acquires landscaping services for a valuable consideration.

"Supplier" means any person who makes sales of tangible personal property to providers for subsequent transfer incident to a sale of service subject to tax under this Act.

"Use" means the exercise by any person of any right or power over, or the enjoyment of, the services subject to tax under this Act.

Section 20-10. Imposition of tax; calculation of tax.

(a) Effective January 1, 2018, except as otherwise provided in this Section, a tax is imposed upon the purchase, for use and not for resale, of landscaping services at the rate of 5% of the purchase price.

(b) Except as otherwise provided in subsection (e), if tangible personal property is transferred incident to a purchase of service, and if the provider separately states on the invoice the cost price of the tangible personal property transferred incident to the purchase of service, the tax is imposed on the difference between the total purchase price and the provider's cost price of the tangible personal property transferred.

(c) Except as otherwise provided in subsection (e), if tangible personal property is transferred incident to a purchase of service, and if the provider does not separately state on the invoice the cost price of the tangible personal property transferred incident to the purchase of service, tax is imposed on 80% of the purchase price.

(d) Except as otherwise provided in subsection (e), a provider that transfers tangible personal property incident to sales of service subject to tax under this Act shall make an annual election prior to December 31 of each year to pay the tax imposed by this Act under either subsection (b) or subsection (c) for the following calendar year. A provider may not make an election regarding the method of calculating tax on a transaction-by-transaction basis. For a provider that fails to make an election under this subsection (d), the tax is imposed on 80% of the purchase price.

(e) A provider making sales of services subject to tax under this Act in which the aggregate annual cost price of tangible personal property transferred incident to all sales of services subject to tax under this Act is less than 3% of the aggregate annual total purchase prices from all sales of services subject to tax under this Act, may annually elect to calculate tax on 100% of the total purchase price for each purchase of service. A provider that does not elect to calculate tax under this subsection (e) must separately state on the invoice the cost price of the tangible personal property transferred incident to a purchase of service and calculate tax under subsection (b).

A provider making an election to calculate tax under this subsection (e) may provide resale certificates under Section 2c of the Retailers' Occupation Tax Act to his or her suppliers of tangible personal property that will be transferred incident to sales of services subject to tax under this Act only if the provider also makes sales of that tangible personal property at retail. A provider that provides resale certificates to his or her supplier must pay Retailers' Occupation Tax on the portion of the tangible personal property that is sold at retail.

Providers who do not also make sales of that tangible personal property at retail may not provide suppliers with certificates of resale, and their purchases of tangible personal property are subject to tax under the Use Tax Act.

(f) If any provider erroneously collects tax or collects more from the purchaser than the purchaser's liability for the transaction, the purchaser shall have a legal right to claim a refund of such amount from such provider. However, if such amount is not refunded to the purchaser for any reason, the provider is liable to pay such amount to the Department.

(g) The tax imposed by this Section is not imposed with respect to any transaction in interstate commerce, to the extent such transaction may not, under the Constitution and statutes of the United States, be made the subject of taxation by this State.

Section 20-15. Transactions involving subcontractors. If a provider subcontracts a service subject to tax under this Act in which tangible personal property is transferred, the provider does not incur a use tax liability on the cost price of any tangible personal property transferred to the provider by the subcontractor if the subcontractor (i) has paid or will pay use tax on his or her cost price of any tangible personal property transferred to the provider and (ii) certifies that fact in writing to the provider.

Section 20-20. Multi-state exemption. To prevent actual multi-state taxation of services that are subject to taxation under this Act, any purchaser or provider, upon proof that the purchaser or provider has paid a tax in another state on such service, shall be allowed a credit against the tax imposed by this Act, to the extent of the amount of the tax properly due and paid in the other state.

Section 20-25. Exemptions.

(a) The following purchasers are exempt from the tax imposed by this Act:

(1) Corporations, societies, associations, foundations, or institutions organized and operated exclusively for charitable, religious, or educational purposes that have been issued an active tax exemption number by the Department under Section 1g of the Retailers' Occupation Tax Act. This paragraph is exempt from the provisions of Section 20-60 of this Act.

(2) The federal government and its instrumentalities that have been issued an active tax exemption number by the Department under Section 1g of the Retailers' Occupation Tax Act. This paragraph is exempt from the provisions of Section 20-60 of this Act.

(3) Government bodies that have been issued an active tax exemption number by the Department under Section 1g of the Retailers' Occupation Tax Act. This paragraph is exempt from the provisions of Section 20-60 of this Act.

(b) The purchase of the following services is exempt from the tax imposed by this Act:

(1) Repair and maintenance services, to the extent that those services are subject to a separate tax imposed by the State. This paragraph is exempt from the provisions of Section 20-60 of this Act.

(2) Services performed on tangible personal property exempt under the Retailers' Occupation Tax Act, Use Tax Act, Service Occupation Tax Act, or Service Use Tax Act. This paragraph is exempt from the provisions of Section 20-60 of this Act.

(3) Landscaping services that qualify as production agriculture as defined in Section 2-35 of the Retailers' Occupation Tax Act. This paragraph is exempt from the provisions of Section 20-60 of this Act.

Section 20-30. Collection of tax.

(a) Beginning with bills issued or charges collected for a purchase of service on and after January 1, 2018, the tax imposed by this Act shall be collected from the purchaser by any provider maintaining a place of business in this State at the rate under Section 20-10 of this Act with respect to the service subject to tax under this Act sold by such provider to or for the purchaser, and shall be remitted to the Department as provided in Section 20-50 of this Act. All sales of services subject to tax under this Act to a purchaser for use and not for resale are presumed subject to tax collection. Providers shall collect the tax from purchasers by adding the tax to the amount of the purchase price received from the purchaser for selling a service subject to tax under this Act to or for the purchaser. The tax imposed by the Act shall, when collected, be stated as a distinct item separate and apart from the purchase price of the service subject to tax under this Act. Where it is not possible to state the tax separately, the Department may by rule exempt such purchases from this requirement if purchasers are notified by language on the invoice or other written notification or notified by a sign that the tax is included in the purchase price.

(b) Any person purchasing a service subject to tax under this Act for use and not for resale as to which there has been no charge made to him of the tax imposed by Section 20-10 shall make payment of the tax imposed by Section 20-10 of this Act in the form and manner provided by the Department not later than the 20th day of the month following the month of purchase of the service.

Section 20-35. Registration of providers.

(a) A person who engages in business as a provider in this State shall register with the Department. Application for a certificate of registration shall be made to the Department, by electronic means, in the form and manner prescribed by the Department and shall contain any reasonable information the Department may require. Upon receipt of the application for a certificate of registration in proper form and manner, the Department shall issue to the applicant a certificate of registration.

The annual fee payable to the Department for each certificate of registration shall be $75. The fee shall be deposited into the Tax Compliance and Administration Fund. Each applicant for a certificate of registration shall pay the fee to the Department at the time of submitting the application. The Department shall require an applicant for a certificate of registration under this Section to electronically pay the fee. A separate annual fee shall be paid for each place of business at which a person who is required to procure a certificate of registration under this Section proposes to sell a service in this State subject to tax under this Act.

(b) The Department may refuse to issue or reissue a certificate of registration to any applicant for the reasons set forth in Section 2505-380 of the Department of Revenue Law of the Civil Administrative Code of Illinois.

(c) Any person aggrieved by any decision of the Department under this Section may, within 20 days after notice of such decision, protest and request a hearing, whereupon the Department shall give notice to such person of the time and place fixed for such hearing and shall hold a hearing in conformity with the provisions of this Act and then issue its final administrative decision in the matter to such person. In the absence of such a protest within 20 days, the Department's decision shall become final without any further determination being made or notice given.

Section 20-40. Revocation of certificate of registration.

(a) The Department may, after notice and a hearing as provided in Section 20-30, revoke the certificate of registration of any person who violates any of the provisions of this Act or regulation promulgated pursuant to this Act. Before revocation of a certificate of registration, the Department shall, within 90 days after non-compliance and at least 7 days prior to the date of the hearing, give the person so accused notice in writing of the charge against him or her, and on the date designated shall conduct a hearing upon this matter. The lapse of the 90 day period shall not preclude the Department from conducting revocation proceedings at a later date if necessary. Any hearing held under this Section shall be conducted by the Director or by any officer or employee of the Department designated in writing by the Director.

(b) The Department may revoke a certificate of registration for the reasons set forth in Section 2505-380 of the Department of Revenue Law of the Civil Administrative Code of Illinois.

(c) Upon the hearing of any such proceeding, the Director or any officer or employee of the Department designated in writing by the Director may administer oaths, and the Department may procure by its subpoena the attendance of witnesses and, by its subpoena duces tecum, the production of relevant books and papers. Any circuit court, upon application either of the accused or of the Department, may, by order duly entered, require the attendance of witnesses and the production of relevant books and papers before the Department in any hearing relating to the revocation of certificates of registration. Upon refusal or neglect to obey the order of the court, the court may compel obedience thereof by proceedings for contempt.

(d) The Department may, by application to any circuit court, obtain an injunction requiring any person who engages in business as a provider under this Act to obtain a certificate of registration. Upon refusal or neglect to obey the order of the court, the court may compel obedience by proceedings for contempt.

Section 20-45. Tax collected as debt owed to State. The tax required to be collected under this Act by any provider maintaining a place of business in this State, and any such tax collected by that person, shall constitute a debt owed by that person to this State.

Section 20-50. Return and payment of tax by provider.

(a) Each provider who is required or authorized to collect the tax imposed by this Act shall make a return to the Department on or before the 20th day of each month for the preceding calendar month stating the following:

(1) the provider's name;

(2) the address of the provider's principal place of business and the address of the principal place of business (if that is a different address) from which the provider engaged in the business of selling a service subject to tax under this Act;

(3) total purchase price received by the provider for all services subject to tax under this Act;

(4) amount of tax, computed upon item (3) at the rate stated in Section 20-10;

(5) the signature of the provider; and

(6) such other information as the Department reasonably may require.

Any amount which is required to be shown or reported on any return or other document under this Act shall, if such amount is not a whole-dollar amount, be increased to the nearest whole-dollar amount if the fractional part of a dollar is $0.50 or more and decreased to the nearest whole-dollar amount if the fractional part of the dollar is less than $0.50. If a total amount of less than $1 is payable, refundable, or creditable, such amount shall be disregarded if it is less than $0.50 and shall be increased to $1 if it is $0.50 or more.

The provider making the return provided for in this Section shall, at the time of making such return, pay to the Department the amount of tax imposed by this Act, less a discount of 1.75% which is allowed to reimburse the provider for the expenses incurred in keeping records, billing the purchaser, preparing and filing returns, remitting the tax, and supplying data to the Department upon request. No discount may be claimed by a provider on returns not timely filed and for taxes not timely remitted.

(b) If the average monthly tax liability to the Department of the provider does not exceed $200, the Department may authorize the provider's returns to be filed on a quarter-annual basis, with the return for January, February, and March of a given year being due by April 20 of such year; with the return for April, May, and June of a given year being due by July 20 of such year; with the return for July, August, and September of a given year being due by October 20 of such year; and with the return for October, November, and December of a given year being due by January 20 of the following year.

If the average monthly tax liability to the Department of the provider does not exceed $50, the Department may authorize the provider's returns to be filed on an annual basis, with the return for a given year being due by January 20 of the following year.

The quarter-annual and annual returns, as to form and substance, shall be subject to the same requirements as monthly returns.

Notwithstanding any other provision in this Act concerning the time within which a provider may file a return, any such provider who ceases to engage in a kind of business which makes the person responsible for filing returns under this Act shall file a final return under this Act with the Department not more than one month after discontinuing such business.

Each provider whose average monthly liability to the Department under this Act was $10,000 or more during the preceding calendar year, excluding the month of highest liability and the month of lowest liability in such calendar year, shall make estimated payments to the Department on or before the 7th, 15th, 22nd, and last day of the month during which tax liability to the Department is incurred in an amount not less than the lower of either 22.5% of such provider's actual tax liability for the month or 25% of such provider's actual tax liability for the same calendar month of the preceding year. The amount of the quarter-monthly payments shall be credited against the final tax liability of the provider's return for that month. Once applicable, the requirement of the making of quarter-monthly payments to the Department by taxpayers having an average monthly tax liability of $10,000 or more as determined in a manner provided in this paragraph shall continue until such taxpayer's average monthly liability to the Department during the preceding 4 complete calendar quarters (excluding the month of highest liability and the month of lowest liability) is less than $9,000 or until such taxpayer's average monthly liability to the Department as computed for each of the 4 preceding complete calendar quarters is less than $10,000. However, if a taxpayer can show the Department that a substantial change in the taxpayer's business has occurred which causes the taxpayer to anticipate that his average monthly tax liability for the reasonably foreseeable future will fall below the $10,000 threshold stated above, then such taxpayer may petition the Department for a change in such taxpayer's reporting status unless it finds that such change is seasonal in nature and not likely to be long term. If any such quarter-monthly payment is not paid at the time or in the amount required by this Section, then the taxpayer shall be liable for penalties and interest on the difference between the minimum amount due as a payment and the amount of such quarter-monthly payment actually and timely paid, except insofar as the taxpayer has previously made payments for that month to the Department in excess of the minimum payments previously due as provided in this Section. The Department shall adopt rules to govern the quarter-monthly payment amount and quarter-monthly payment dates for taxpayers who file on other than a calendar monthly basis.

If any payment provided for in this Section exceeds the taxpayer's liabilities under this Act, as shown on an original monthly return, the Department shall, if requested by the taxpayer, issue to the taxpayer a credit memorandum no later than 30 days after the date of payment. The credit evidenced by such credit memorandum may be assigned by the taxpayer to a similar taxpayer under this Act, in accordance with reasonable rules and regulations to be prescribed by the Department. If no such request is made, the taxpayer may credit such excess payment against tax liability subsequently to be remitted to the Department under this Act, in accordance with reasonable rules and regulations prescribed by the Department. If the Department subsequently determines that all or any part of the credit taken was not actually due to the taxpayer, the taxpayer's 1.75% discount shall be reduced by 1.75% of the difference between the credit taken and that actually due, and that taxpayer shall be liable for penalties and interest on such difference.

(c) A provider who has a tax liability in the amount set forth in subsection (b) of Section 2505-210 of the Department of Revenue Law of the Civil Administrative Code of Illinois shall make all payments required by rules of the Department by electronic funds transfer. Any provider not required to make payments by electronic funds transfer may make payments by electronic funds transfer with the permission of the Department. All providers required to make payments by electronic funds transfer and any providers authorized to voluntarily make payments by electronic funds transfer shall make those payments in the manner authorized by the Department.

(d) If a provider fails to sign a return within 30 days after the proper notice and demand for signature by the Department is received by the provider, the return shall be considered valid and any amount shown to be due on the return shall be deemed assessed.

Section 20-55. Claims; credit memorandum or refunds.

If it appears, after claim therefore filed with the Department, that an amount of tax or penalty has been paid to the Department by the taxpayer which was not due under this Act, whether as the result of a mistake of fact or an error of law, except as hereinafter provided, then the Department shall issue a credit memorandum or refund to the person who made the erroneous payment or, if that person has died or become a person under legal disability, to his or her legal representative, as such.

If it is determined that the Department should issue a credit or refund under this Act, the Department may first apply the amount thereof against any amount of tax or penalty due under this Act, or any other Act administered by the Department, from the person entitled to such credit or refund. For this purpose, if proceedings are pending to determine whether or not any tax or penalty is due under this Act, or any other Act administered by the Department, from such person, the Department may withhold issuance of the credit or refund pending the final disposition of such proceedings and may apply such credit or refund against any amount found to be due to the Department under this Act, or any other Act administered by the Department, as a result of such proceedings. The balance, if any, of the credit or refund shall be issued to the person entitled thereto.

If no tax or penalty is due and no proceeding is pending to determine whether such taxpayer is indebted to the Department for tax or penalty, the credit memorandum or refund shall be issued to the claimant; or (in the case of a credit memorandum) the credit memorandum may be assigned and set over by the lawful holder thereof, subject to reasonable rules of the Department, to any other person who is subject to this Act, and the amount thereof shall be applied by the Department against any tax or penalty due or to become due under this Act from such assignee.

As to any claim filed hereunder with the Department on and after each January 1 and July 1, no amount of tax or penalty erroneously paid (either in total or partial liquidation of a tax or penalty under this Act) more than 3 years prior to such January 1 and July 1, respectively, shall be credited or refunded, except that if both the Department and the taxpayer have agreed to an extension of time to issue a notice of tax liability under this Act, the claim may be filed at any time prior to the expiration of the period agreed upon.

No claim may be allowed for any amount paid to the Department, whether paid voluntarily or involuntarily, if paid in total or partial liquidation of an assessment which had become final before the claim for credit or refund to recover the amount so paid is filed with the Department, or if paid in total or partial liquidation of a judgment or order of court. No claim may be allowed or refund made for any amount paid by or collected from any purchaser unless it appears that the claimant has unconditionally repaid to the purchaser any amount collected from the purchaser and retained by the claimant with respect to the same transaction under the Act.

Any credit or refund that is allowed under this Act shall bear interest at the rate and in the manner set forth in the Uniform Penalty and Interest Act.

In case the Department determines that the claimant is entitled to a refund, such refund shall be made only from such appropriation as may be available for that purpose. If it appears unlikely that the amount appropriated would permit everyone having a claim allowed during the period covered by such appropriation to elect to receive a cash refund, the Department, by rule or regulation, shall provide for the payment of refunds in hardship cases and shall define what types of cases qualify as hardship cases.

Section 20-60. Sunset of exemptions, credits, and deductions.

The application of every exemption, credit, and deduction against tax imposed by this Act that becomes law after the effective date of this Act shall be limited by a reasonable and appropriate sunset date. A taxpayer is not entitled to take the exemption, credit, or deduction beginning on the sunset date and thereafter. If a reasonable and appropriate sunset date is not specified in the Public Act that creates the exemption, credit, or deduction, a taxpayer shall not be entitled to take the exemption, credit, or deduction beginning 5 years after the effective date of the Public Act creating the exemption, credit, or deduction and thereafter.

Section 20-65. Distribution of proceeds. All moneys received by the Department under this Act shall be paid into the General Revenue Fund in the State Treasury.

Section 20-70. Department's authority to adopt rules. The Department is authorized to adopt and enforce reasonable rules under the Illinois Administrative Procedure Act, and to prescribe forms relating to the administration and enforcement of this Act, as it may deem appropriate.

Section 20-75. Incorporation by reference. All of the provisions of Sections 2a, 2b, 4, 5, 5a, 5b, 5c, 5d, 5e, 5f, 5g, 5i, 5j, 6a, 6b, 6c, 6d, 7, 8, 9, 10, 11, 11a, 12, and 13 of the Retailers' Occupation Tax Act and all of the provisions of the Uniform Penalty and Interest Act, that are not inconsistent with this Act, apply to providers to the same extent as if those provisions were included in this Act. References in the incorporated Sections of the Retailers' Occupation Tax Act to retailers, to sellers, or to persons engaged in the business of selling tangible personal property mean providers when used in this Act. References in the incorporated Sections to sales of tangible personal property mean sales of services subject to tax under this Act when used in this Act.

Section 20-80. Sourcing. The purchase of landscaping services shall be sourced to the location of the parcel or tract of land where the benefit of the landscaping services is realized.

ARTICLE 25. LAUNDRY AND DRYCLEANING EXCISE TAX ACT

Section 25-1. Short title. This Act may be cited as the Laundry and Drycleaning Excise Tax Act.

Section 25-5. Definitions.

"Cost price" means the consideration paid by a provider to a supplier for a purchase of tangible personal property valued in money, whether paid in money or otherwise, including cash, credits and services, and shall be determined without any deduction on account of taxes paid by the provider for the purchase of tangible personal property or on account of any expenses that are part of the selling price of the tangible personal property taxable under the Retailers' Occupation Tax Act and the Use Tax Act that are charged to the provider by a supplier. When a provider contracts out part or all of the services required in his sale of service subject to tax under this Act, it shall be presumed that the cost price to the provider of the tangible personal property transferred to him or her by his or her subcontractor is equal to 50% of the subcontractor's charges to the provider in the absence of proof of the consideration paid for the tangible personal property by the provider to the subcontractor.

"Department" means the Department of Revenue.

"Director" means the Director of Revenue.

"Person" means any natural individual, firm, trust, estate, partnership, association, joint stock company, joint venture, corporation, limited liability company, or a receiver, trustee, guardian, or other representative appointed by order of any court.

"Provider" means any person engaged in the business of providing, furnishing, selling, or supplying laundry, drycleaning, cloth pressing, dyeing, or linen service.

"Provider maintaining a place of business in this State", or any like term, means and includes any of the following:

(1) A provider having or maintaining within this State, directly or by a subsidiary, an office, distribution house, sales house, warehouse or other place of business, or any agent or other representative operating within this State under the authority of the provider or its subsidiary, irrespective of whether such place of business or agent or other representative is located here permanently or temporarily, or whether such provider or subsidiary is licensed to do business in this State.

(2) A provider having a contract with a person located in this State under which the person, for a commission or other consideration based upon the sale of services subject to tax under this Act by the provider, directly or indirectly refers potential customers to the provider by providing to the potential customers a promotional code or other mechanism that allows the provider to track purchases referred by such persons. Examples of mechanisms that allow the provider to track purchases referred by such persons include but are not limited to the use of a link on the person's Internet website, promotional codes distributed through the person's hand-delivered or mailed material, and promotional codes distributed by the person through radio or other broadcast media. The provisions of this paragraph (2) shall apply only if the cumulative purchase prices from sales of services subject to tax under this Act by the provider to purchasers who are referred to the provider by all persons in this State under such contracts exceed $10,000 during the preceding 4 quarterly periods ending on the last day of March, June, September, and December. A provider meeting the requirements of this paragraph (2) shall be presumed to be maintaining a place of business in this State but may rebut this presumption by submitting proof that the referrals or other activities pursued within this State by such persons were not sufficient to meet the nexus standards of the United States Constitution during the preceding 4 quarterly periods.

(3) A provider having a contract with a person located in this State under which:

(A) the provider sells the same or substantially similar service subject to tax under this Act as the person located in this State and does so using an identical or substantially similar name, trade name, or trademark as the person located in this State; and

(B) the provider provides a commission or other consideration to the person located in this State based upon the sale of services subject to tax under this Act by the provider.

The provisions of this paragraph (3) shall apply only if the cumulative purchase prices from sales of services subject to tax under this Act by the provider to purchasers in this State under all such contracts exceed $10,000 during the preceding 4 quarterly periods ending on the last day of March, June, September, and December.

"Purchase of service" means the acquisition of laundry, drycleaning, cloth pressing, dyeing, or linen service for a valuable consideration.

"Purchase price" means the consideration paid for a purchase of service, all services directly related to the purchase of service, and all tangible personal property transferred incident to the purchase of service, valued in money, whether received in money or otherwise, including cash, gift cards, reward points, credits, and property and shall be determined without any deduction on account of the cost of materials used, labor or service costs, or any other expense whatsoever. However, "purchase price" shall not include consideration paid for:

(1) any charge for a dishonored check;

(2) any finance or credit charge, penalty or charge for delayed payment, or discount for prompt payment;

(3) any purchase by a purchaser if the provider is prohibited by federal or State constitution, treaty, convention, statute or court decision from collecting the tax from such purchaser;

(4) the isolated or occasional sale of services subject to tax under this Act by a person who does not hold himself out as being engaged (or who does not habitually engage) in selling such service; and

(5) any amounts added to a purchaser's bills because of charges made pursuant to the tax imposed by this Act.

In case credit is extended, the amount thereof shall be included only as and when payments are made.

"Purchaser" means any person who, for a valuable consideration, acquires laundry, drycleaning, cloth pressing, dyeing, or linen service.

"Supplier" means any person who makes sales of tangible personal property to providers for subsequent transfer incident to a sale of service subject to tax under this Act.

"Use" means the exercise by any person of any right or power over, or the enjoyment of, the services subject to tax under this Act.

Section 25-10. Imposition of tax; calculation of tax.

(a) Effective January 1, 2018, except as otherwise provided in this Section, a tax is imposed upon the purchase, for use and not for resale, of laundry, drycleaning, cloth pressing, dyeing, or linen service at the rate of 5% of the purchase price.

(b) Except as otherwise provided in subsection (e), if tangible personal property is transferred incident to a purchase of service, and if the provider separately states on the invoice the cost price of the tangible personal property transferred incident to the purchase of service, the tax is imposed on the difference between the total purchase price and the provider's cost price of the tangible personal property transferred.

(c) Except as otherwise provided in subsection (e), if tangible personal property is transferred incident to a purchase of service, and if the provider does not separately state on the invoice the cost price of the tangible personal property transferred incident to the purchase of service, tax is imposed on 80% of the purchase price.

(d) Except as otherwise provided in subsection (e), a provider that transfers tangible personal property incident to sales of service subject to tax under this Act shall make an annual election prior to December 31 of each year to pay the tax imposed by this Act under either subsection (b) or subsection (c) for the following calendar year. A provider may not make an election regarding the method of calculating tax on a transaction-by-transaction basis. For a provider that fails to make an election pursuant to this subsection, the tax is imposed on 80% of the purchase price.

(e) A provider making sales of services subject to tax under this Act in which the aggregate annual cost price of tangible personal property transferred incident to all sales of services subject to tax under this Act is less than 3% of the aggregate annual total purchase prices from all sales of services subject to tax under this Act, may annually elect to calculate tax on 100% of the total purchase price for each purchase of service. A provider that does not elect to calculate tax as provided in this subsection must separately state on the invoice the cost price of the tangible personal property transferred incident to a purchase of service and calculate tax pursuant to subsection (b).

A provider making an election to calculate tax under this subsection may provide resale certificates under Section 2c of the Retailers' Occupation Tax Act to his or her suppliers of tangible personal property that will be transferred incident to sales of services subject to tax under this Act only if the provider also makes sales of that tangible personal property at retail. A provider that provides resale certificates to his or her supplier must pay Retailers' Occupation Tax on the portion of the tangible personal property that is sold at retail.

Providers who do not also make sales of that tangible personal property at retail may not provide suppliers with certificates of resale, and their purchases of tangible personal property are subject to tax under the Use Tax Act.

(f) If any provider erroneously collects tax or collects more from the purchaser than the purchaser's liability for the transaction, the purchaser shall have a legal right to claim a refund of such amount from such provider. However, if such amount is not refunded to the purchaser for any reason, the provider is liable to pay such amount to the Department.

(g) The tax imposed by this Section 25-10 is not imposed with respect to any transaction in interstate commerce, to the extent such transaction may not, under the Constitution and statutes of the United States, be made the subject of taxation by this State.

Section 25-15. Transactions involving subcontractors. If a provider subcontracts a service subject to tax under this Act in which tangible personal property is transferred, the provider does not incur a use tax liability on the cost price of any tangible personal property transferred to the provider by the subcontractor if the subcontractor (i) has paid or will pay a use tax on his or her cost price of any tangible personal property transferred to the provider and (ii) certifies that fact in writing to the provider.

Section 25-20. Multi-state exemption. To prevent actual multi-state taxation of services that are subject to taxation under this Act, any purchaser or provider, upon proof that the purchaser or provider has paid a tax in another state on such service, shall be allowed a credit against the tax imposed by this Act, to the extent of the amount of the tax properly due and paid in the other state.

Section 25-25. Exemptions.

(a) The following purchasers are exempt from the tax imposed by this Act:

(1) Corporations, societies, associations, foundations, or institutions organized and operated exclusively for charitable, religious or educational purposes that have been issued an active tax exemption number by the Department under Section 1g of the Retailers' Occupation Tax Act. This paragraph is exempt from the provisions of Section 25-60.

(2) The federal government and its instrumentalities that have been issued an active tax exemption number by the Department under Section 1g of the Retailers' Occupation Tax Act. This paragraph is exempt from the provisions of Section 25-60.

(3) Government bodies that have been issued an active tax exemption number by the Department under Section 1g of the Retailers' Occupation Tax Act. This paragraph is exempt from the provisions of Section 25-60.

(b) The purchase of the following services is exempt from the tax imposed by this Act:

(1) Repair and maintenance services, to the extent that those services are subject to a separate tax imposed by the State. This paragraph is exempt from the provisions of Section 25-60.

(2) Services performed on tangible personal property exempt under the Retailers' Occupation Tax Act, Use Tax Act, Service Occupation Tax Act, or Service Use Tax Act. This paragraph is exempt from the provisions of Section 25-60.

Section 25-30. Collection of tax.

(a) Beginning with bills issued or charges collected for a purchase of service on and after January 1, 2018, the tax imposed by this Act shall be collected from the purchaser by any provider maintaining a place of business in this State at the rate stated in Section 25-10 with respect to the service subject to tax under this Act sold by such provider to or for the purchaser, and shall be remitted to the Department as provided in Section 25-50 of this Act. All sales of services subject to tax under this Act to a purchaser for use and not for resale are presumed subject to tax collection. Providers shall collect the tax from purchasers by adding the tax to the amount of the purchase price received from the purchaser for selling a service subject to tax under this Act to or for the purchaser. The tax imposed by the Act shall when collected be stated as a distinct item separate and apart from the purchase price of the service subject to tax under this Act. However, where it is not possible to state the tax separately, the Department may by rule exempt such purchases from this requirement if purchasers are notified by language on the invoice or other written notification or notified by a sign that the tax is included in the purchase price.

(b) Any person purchasing a service subject to tax under this Act for use and not for resale as to which there has been no charge made to him of the tax imposed by Section 25-10 shall make payment of the tax imposed by Section 25-10 of this Act in the form and manner provided by the Department not later than the 20th day of the month following the month of purchase of the service.

Section 25-35. Registration of providers.

(a) A person who engages in business as a provider in this State shall register with the Department. Application for a certificate of registration shall be made to the Department, by electronic means, in the form and manner prescribed by the Department, and shall contain any reasonable information the Department may require. Upon receipt of the application for a certificate of registration in proper form and manner, the Department shall issue to the applicant a certificate of registration.

The annual fee payable to the Department for each certificate of registration shall be $75. The fee shall be deposited into the Tax Compliance and Administration Fund. Each applicant for a certificate of registration shall pay the fee to the Department at the time of submitting its application for certificate registration to the Department. The Department shall require an applicant for a certificate of registration under this Section to electronically pay the fee. A separate annual fee shall be paid for each place of business at which a person who is required to procure a certificate of registration under this Section proposes to sell a service in Illinois subject to tax under this Act.

(b) The Department may refuse to issue or reissue a certificate of registration to any applicant for the reasons set forth in Section 2505-380 of the Department of Revenue Law of the Civil Administrative Code of Illinois.

(c) Any person aggrieved by any decision of the Department under this Section may, within 20 days after notice of such decision, protest and request a hearing, whereupon the Department shall give notice to such person of the time and place fixed for such hearing and shall hold a hearing in conformity with the provisions of this Act and then issue its final administrative decision in the matter to such person. In the absence of such a protest within 20 days, the Department's decision shall become final without any further determination being made or notice given.

Section 25-40. Revocation of certificate of registration.

(a) The Department may, after notice and a hearing as provided herein, revoke the certificate of registration of any person who violates any of the provisions of this Act or regulation promulgated pursuant to this Act. Before revocation of a certificate of registration, the Department shall, within 90 days after non-compliance and at least 7 days prior to the date of the hearing, give the person so accused notice in writing of the charge against him or her, and on the date designated shall conduct a hearing upon this matter. The lapse of such 90-day period shall not preclude the Department from conducting revocation proceedings at a later date if necessary. Any hearing held under this Section shall be conducted by the Director or by any officer or employee of the Department designated in writing by the Director.

(b) The Department may revoke a certificate of registration for the reasons set forth in Section 2505-380 of the Department of Revenue Law of the Civil Administrative Code of Illinois.

(c) Upon the hearing of any such proceeding, the Director or any officer or employee of the Department designated in writing by the Director may administer oaths, and the Department may procure by its subpoena the attendance of witnesses and, by its subpoena duces tecum, the production of relevant books and papers. Any circuit court, upon application either of the accused or of the Department, may, by order duly entered, require the attendance of witnesses and the production of relevant books and papers before the Department in any hearing relating to the revocation of certificates of registration. Upon refusal or neglect to obey the order of the court, the court may compel obedience thereof by proceedings for contempt.

(d) The Department may, by application to any circuit court, obtain an injunction requiring any person who engages in business as a provider under this Act to obtain a certificate of registration. Upon refusal or neglect to obey the order of the court, the court may compel obedience by proceedings for contempt.

Section 25-45. Tax collected as debt owed to State. The tax herein required to be collected by any provider maintaining a place of business in this State, and any such tax collected by that person, shall constitute a debt owed by that person to this State.

Section 25-50. Return and payment of tax by provider.

(a) Each provider who is required or authorized to collect the tax imposed by this Act shall make a return to the Department on or before the 20th day of each month for the preceding calendar month stating the following:

(1) the provider's name;

(2) the address of the provider's principal place of business and the address of the principal place of business (if that is a different address) from which the provider engaged in the business of selling a service subject to tax under this Act;

(3) total purchase price received by the provider for all services subject to tax under this Act;

(4) amount of tax, computed upon item (3) at the rate stated in Section 25-10;

(5) the signature of the provider; and

(6) such other information as the Department reasonably may require.

Any amount which is required to be shown or reported on any return or other document under this Act shall, if such amount is not a whole-dollar amount, be increased to the nearest whole-dollar amount if the fractional part of a dollar is $0.50 or more and decreased to the nearest whole-dollar amount if the fractional part of a dollar is less than $0.50. If a total amount of less than $1 is payable, refundable, or creditable, that amount shall be disregarded if it is less than $0.50 and shall be increased to $1 if it is $0.50 or more.

The provider making the return provided for in this Section shall, at the time of making such return, pay to the Department the amount of tax imposed by this Act, less a discount of 1.75% which is allowed to reimburse the provider for the expenses incurred in keeping records, billing the purchaser, preparing and filing returns, remitting the tax, and supplying data to the Department upon request. No discount may be claimed by a provider on returns not timely filed and for taxes not timely remitted.

(b) If the average monthly tax liability to the Department of the provider does not exceed $200, the Department may authorize the provider's returns to be filed on a quarter-annual basis, with the return for January, February, and March of a given year being due by April 20 of such year; with the return for April, May and June of a given year being due by July 20 of such year; with the return for July, August, and September of a given year being due by October 20 of such year; and with the return for October, November, and December of a given year being due by January 20 of the following year.

If the average monthly tax liability to the Department of the provider does not exceed $50, the Department may authorize the provider's returns to be filed on an annual basis, with the return for a given year being due by January 20 of the following year.

Such quarter-annual and annual returns, as to form and substance, shall be subject to the same requirements as monthly returns.

Notwithstanding any other provision in this Act concerning the time within which a provider may file a return, any such provider who ceases to engage in a kind of business which makes the person responsible for filing returns under this Act shall file a final return under this Act with the Department not more than one month after discontinuing such business.

Each provider whose average monthly liability to the Department under this Act was $10,000 or more during the preceding calendar year, excluding the month of highest liability and the month of lowest liability in such calendar year, shall make estimated payments to the Department on or before the 7th, 15th, 22nd, and last day of the month during which tax liability to the Department is incurred in an amount not less than the lower of either 22.5% of such provider's actual tax liability for the month or 25% of such provider's actual tax liability for the same calendar month of the preceding year. The amount of such quarter-monthly payments shall be credited against the final tax liability of such provider's return for that month. Once applicable, the requirement of the making of quarter-monthly payments to the Department by taxpayers having an average monthly tax liability of $10,000 or more as determined in the manner provided in this paragraph shall continue until the taxpayer's average monthly liability to the Department during the preceding 4 complete calendar quarters (excluding the month of highest liability and the month of lowest liability) is less than $9,000 or until the taxpayer's average monthly liability to the Department as computed for each of the 4 preceding complete calendar quarters is less than $10,000. However, if a taxpayer can show the Department that a substantial change in the taxpayer's business has occurred that causes the taxpayer to anticipate that his average monthly tax liability for the reasonably foreseeable future will fall below the $10,000 threshold stated above, then the taxpayer may petition the Department for a change in the taxpayer's reporting status. The Department shall change the taxpayer's reporting status unless it finds that the change is seasonal in nature and not likely to be long term. If any such quarter-monthly payment is not paid at the time or in the amount required by this Section, then the taxpayer shall be liable for penalties and interest on the difference between the minimum amount due as a payment and the amount of such quarter-monthly payments actually and timely paid, except insofar as the taxpayer has previously made payments for that month to the Department in excess of the minimum payments previously due as provided in this Section. The Department shall adopt rules to govern the quarter-monthly payment amount and quarter-monthly payment dates for taxpayers who file on other than a calendar monthly basis.

If any payment provided for in this Section exceeds the taxpayer's liabilities under this Act, as shown on an original monthly return, the Department shall, if requested by the taxpayer, issue to the taxpayer a credit memorandum no later than 30 days after the date of payment. The credit evidenced by such credit memorandum may be assigned by the taxpayer to a similar taxpayer under this Act, in accordance with reasonable rules and regulations to be prescribed by the Department. If no such request is made, the taxpayer may credit such excess payment against tax liability subsequently to be remitted to the Department under this Act, in accordance with reasonable rules and regulations prescribed by the Department. If the Department subsequently determines that all or any part of the credit taken was not actually due to the taxpayer, the taxpayer's 1.75% discount shall be reduced by 1.75% of the difference between the credit taken and that actually due, and that taxpayer shall be liable for penalties and interest on such difference.

(c) A provider who has a tax liability in the amount set forth in subsection (b) of Section 2505-210 of the Department of Revenue Law of the Civil Administrative Code of Illinois shall make all payments required by rules of the Department by electronic funds transfer. Any provider not required to make payments by electronic funds transfer may make payments by electronic funds transfer with the permission of the Department. All providers required to make payments by electronic funds transfer and any providers authorized to voluntarily make payments by electronic funds transfer shall make those payments in the manner authorized by the Department.

(d) If a provider fails to sign a return within 30 days after the proper notice and demand for signature by the Department is received by the provider, the return shall be considered valid and any amount shown to be due on the return shall be deemed assessed.

Section 25-55. Claims; credit memorandum or refunds. If it appears, after claim therefore filed with the Department, that an amount of tax or penalty has been paid to the Department by the taxpayer which was not due under this Act, whether as the result of a mistake of fact or an error of law, except as hereinafter provided, then the Department shall issue a credit memorandum or refund to the person who made the erroneous payment or, if that person has died or become a person under legal disability, to his or her legal representative, as such.

If it is determined that the Department should issue a credit or refund under this Act, the Department may first apply the amount thereof against any amount of tax or penalty due under this Act, or any other Act administered by the Department, from the person entitled to such credit or refund. For this purpose, if proceedings are pending to determine whether or not any tax or penalty is due under this Act, or any other Act administered by the Department, from such person, the Department may withhold issuance of the credit or refund pending the final disposition of such proceedings and may apply such credit or refund against any amount found to be due to the Department under this Act, or any other Act administered by the Department, as a result of such proceedings. The balance, if any, of the credit or refund shall be issued to the person entitled thereto.

If no tax or penalty is due and no proceeding is pending to determine whether such taxpayer is indebted to the Department for tax or penalty, the credit memorandum or refund shall be issued to the claimant; or (in the case of a credit memorandum) the credit memorandum may be assigned and set over by the lawful holder thereof, subject to reasonable rules of the Department, to any other person who is subject to this Act, and the amount thereof shall be applied by the Department against any tax or penalty due or to become due under this Act from such assignee.

As to any claim filed hereunder with the Department on and after each January 1 and July 1, no amount of tax or penalty erroneously paid (either in total or partial liquidation of a tax or penalty under this Act) more than 3 years prior to such January 1 and July 1, respectively, shall be credited or refunded, except that if both the Department and the taxpayer have agreed to an extension of time to issue a notice of tax liability under this Act, the claim may be filed at any time prior to the expiration of the period agreed upon.

No claim may be allowed for any amount paid to the Department, whether paid voluntarily or involuntarily, if paid in total or partial liquidation of an assessment which had become final before the claim for credit or refund to recover the amount so paid is filed with the Department, or if paid in total or partial liquidation of a judgment or order of court. No claim may be allowed or refund made for any amount paid by or collected from any purchaser unless it appears that the claimant has unconditionally repaid to the purchaser any amount collected from the purchaser and retained by the claimant with respect to the same transaction under the Act.

Any credit or refund that is allowed under this Act shall bear interest at the rate and in the manner set forth in the Uniform Penalty and Interest Act.

In case the Department determines that the claimant is entitled to a refund, such refund shall be made only from such appropriation as may be available for that purpose. If it appears unlikely that the amount appropriated would permit everyone having a claim allowed during the period covered by such appropriation to elect to receive a cash refund, the Department, by rule or regulation, shall provide for the payment of refunds in hardship cases and shall define what types of cases qualify as hardship cases.

Section 25-60. Sunset of exemptions, credits, and deductions. The application of every exemption, credit, and deduction against tax imposed by this Act that becomes law after the effective date of this Act shall be limited by a reasonable and appropriate sunset date. A taxpayer is not entitled to take the exemption, credit, or deduction beginning on the sunset date and thereafter. If a reasonable and appropriate sunset date is not specified in the Public Act that creates the exemption, credit, or deduction, a taxpayer shall not be entitled to take the exemption, credit, or deduction beginning 5 years after the effective date of the Public Act creating the exemption, credit, or deduction and thereafter.

Section 25-65. Distribution of proceeds. All moneys received by the Department under this Act shall be paid into the General Revenue Fund in the State Treasury.

Section 25-70. Rulemaking. The Department may adopt rules in accordance with the Illinois Administrative Procedure Act and prescribe such forms relating to the administration and enforcement of this Act as it deems appropriate.

Section 25-75. Incorporation by reference. All of the provisions of Sections 2a, 2b, 4, 5, 5a, 5b, 5c, 5d, 5e, 5f, 5g, 5i, 5j, 6a, 6b, 6c, 6d, 7, 8, 9, 10, 11, 11a, 12, and 13 of the Retailers' Occupation Tax Act and all of the provisions of the Uniform Penalty and Interest Act, that are not inconsistent with this Act, apply to providers to the same extent as if those provisions were included in this Act. References in the incorporated Sections of the Retailers' Occupation Tax Act to retailers, to sellers, or to persons engaged in the business of selling tangible personal property mean providers when used in this Act. References in the incorporated Sections to sales of tangible personal property mean sales of services subject to tax under this Act when used in this Act.

ARTICLE 30. AMENDATORY PROVISIONS

Section 30-5. The State Finance Act is amended by changing Sections 6z-43 and 6z-51 as follows:

(30 ILCS 105/6z-43)

Sec. 6z-43. Tobacco Settlement Recovery Fund.

(a) There is created in the State Treasury a special fund to be known as the Tobacco Settlement Recovery Fund, which shall contain 3 accounts: (i) the General Account, (ii) the Tobacco Settlement Bond Proceeds Account and (iii) the Tobacco Settlement Residual Account. There shall be deposited into the several accounts of the Tobacco Settlement Recovery Fund and the Attorney General Tobacco Fund all monies paid to the State pursuant to (1) the Master Settlement Agreement entered in the case of People of the State of Illinois v. Philip Morris, et al. (Circuit Court of Cook County, No. 96-L13146) and (2) any settlement with or judgment against any tobacco product manufacturer other than one participating in the Master Settlement Agreement in satisfaction of any released claim as defined in the Master Settlement Agreement, as well as any other monies as provided by law. Moneys shall be deposited into the Tobacco Settlement Bond Proceeds Account and the Tobacco Settlement Residual Account as provided by the terms of the Railsplitter Tobacco Settlement Authority Act, provided that an annual amount not less than $2,500,000, subject to appropriation, shall be deposited into the Attorney General Tobacco Fund for use only by the Attorney General's office. The scheduled $2,500,000 deposit into the Tobacco Settlement Residual Account for fiscal year 2011 should be transferred to the Attorney General Tobacco Fund in fiscal year 2012 as soon as this fund has been established. All other moneys available to be deposited into the Tobacco Settlement Recovery Fund shall be deposited into the General Account. An investment made from moneys credited to a specific account constitutes part of that account and such account shall be credited with all income from the investment of such moneys. The Treasurer may invest the moneys in the several accounts the Fund in the same manner, in the same types of investments, and subject to the same limitations provided in the Illinois Pension Code for the investment of pension funds other than those established under Article 3 or 4 of the Code. Notwithstanding the foregoing, to the extent necessary to preserve the tax-exempt status of any bonds issued pursuant to the Railsplitter Tobacco Settlement Authority Act, the interest on which is intended to be excludable from the gross income of the owners for federal income tax purposes, moneys on deposit in the Tobacco Settlement Bond Proceeds Account and the Tobacco Settlement Residual Account may be invested in obligations the interest upon which is tax-exempt under the provisions of Section 103 of the Internal Revenue Code of 1986, as now or hereafter amended, or any successor code or provision.

(b) Moneys on deposit in the Tobacco Settlement Bond Proceeds Account and the Tobacco Settlement Residual Account may be expended, subject to appropriation, for the purposes authorized in subsection (g) of Section 3-6 of the Railsplitter Tobacco Settlement Authority Act.

(c) As soon as may be practical after June 30, 2001 and until an initial transfer has been made to the Budget Stabilization Fund under subsection (b) of Section 15 of the Budget Stabilization Act as amended by this amendatory Act of the 100th General Assembly, upon notification from and at the direction of the Governor, the State Comptroller shall direct and the State Treasurer shall transfer the unencumbered balance in the Tobacco Settlement Recovery Fund as of June 30, 2001, as determined by the Governor, into the Budget Stabilization Fund. The Treasurer may invest the moneys in the Budget Stabilization Fund in the same manner, in the same types of investments, and subject to the same limitations provided in the Illinois Pension Code for the investment of pension funds other than those established under Article 3 or 4 of the Code.

(d) All federal financial participation moneys received pursuant to expenditures from the Fund shall be deposited into the General Account.

(Source: P.A. 99-78, eff. 7-20-15.)

(30 ILCS 105/6z-51)

Sec. 6z-51. Budget Stabilization Fund.

(a) The Budget Stabilization Fund, a special fund in the State Treasury, shall consist of moneys appropriated or transferred to that Fund, as provided in Section 6z-43 and as otherwise provided by law. All earnings on Budget Stabilization Fund investments shall be deposited into that Fund.

(b) Until an initial transfer has been made to the Budget Stabilization Fund under subsection (b) of Section 15 of the Budget Stabilization Act as amended by this amendatory Act of the 100th General Assembly, the The State Comptroller may direct the State Treasurer to transfer moneys from the Budget Stabilization Fund to the General Revenue Fund in order to meet cash flow deficits resulting from timing variations between disbursements and the receipt of funds within a fiscal year. Any moneys so borrowed in any fiscal year other than Fiscal Year 2011 shall be repaid by June 30 of the fiscal year in which they were borrowed. Any moneys so borrowed in Fiscal Year 2011 shall be repaid no later than July 15, 2011.

(c) During Fiscal Year 2017 only, amounts may be expended from the Budget Stabilization Fund only pursuant to specific authorization by appropriation. Any moneys expended pursuant to appropriation shall not be subject to repayment.

(Source: P.A. 99-523, eff. 6-30-16.)

Section 30-10. The Budget Stabilization Act is amended by changing Sections 15 and 20 as follows:

(30 ILCS 122/15)

Sec. 15. Transfers to Budget Stabilization Fund. In furtherance of the State's objective for the Budget Stabilization Fund to have resources representing 5% of the State's annual general funds revenues:

(a) On January 10, 2018 and each January 10 thereafter, the Department on Aging, the Department of Healthcare and Family Services, and the Department of Human Services shall certify to the Comptroller the amount of invoices that may be paid from appropriations in future fiscal years resulting from insufficient appropriations in the current fiscal year. In addition, the Department of Central Management Services shall certify the amount of invoices that may be paid from appropriations in future fiscal years due to insufficient resources in the Health Insurance Reserve Fund, and the Department of Revenue shall certify an estimate of the amount of individual and corporate income tax overpayments that will not be refunded before the close of the current fiscal year resulting from insufficient deposits into the Income Tax Refund Fund. On January 15, 2018 and each January 15 thereafter, the Comptroller shall issue a report to the Governor and the General Assembly detailing the total value of the amounts certified by the Department on Aging and the Departments of Central Management Services, Healthcare and Family Services, Human Services, and Revenue. The report shall also include the accounts payable with the Comptroller at the close of business on December 31, 2017 and each December 31 thereafter. For each fiscal year when the General Assembly's appropriations and transfers or diversions as required by law from general funds do not exceed 99% of the estimated general funds revenues pursuant to subsection (a) of Section 10, the Comptroller shall transfer from the General Revenue Fund as provided by this Section a total amount equal to 0.5% of the estimated general funds revenues to the Budget Stabilization Fund.

(b) If the amount of accounts payable reported by the Comptroller is an amount less than $3,400,000,000, on the last day of each month of the next fiscal year or as soon thereafter as possible, the Comptroller shall order transferred and the Treasurer shall transfer from the General Revenue Fund to the Budget Stabilization Fund the lesser of (i) $400,000,000 or (ii) the amount necessary to maintain resources in the Budget Stabilization Fund that is equal to 5% of the total general funds revenues of the prior fiscal year, in equal monthly installments. Nothing in this Act prohibits the General Assembly from appropriating additional moneys into the Budget Stabilization Fund; however, transfers or appropriations shall only be made from the Budget Stabilization Fund under subsection (d) of this Section. For each fiscal year when the General Assembly's appropriations and transfers or diversions as required by law from general funds do not exceed 98% of the estimated general funds revenues pursuant to subsection (b) of Section 10, the Comptroller shall transfer from the General Revenue Fund as provided by this Section a total amount equal to 1% of the estimated general funds revenues to the Budget Stabilization Fund.

(c) The Comptroller shall transfer 1/12 of the total amount to be transferred each fiscal year under this Section into the Budget Stabilization Fund on the first day of each month of that fiscal year or as soon thereafter as possible. The balance of the Budget Stabilization Fund shall not exceed 5% of the total of general funds revenues estimated for that fiscal year. If the balance of the Budget Stabilization Fund is equal to 5% of the total general funds revenues of the prior fiscal year, no further transfers shall be made to the Budget Stabilization Fund. However, if the amounts certified to the Comptroller that may be paid from future fiscal year resources by the Department on Aging and the Departments of Central Management Services, Healthcare and Family Services, Human Services, and Revenue exceed zero, the Comptroller shall order transferred and the Treasurer shall transfer from the General Revenue Fund to the Health Insurance Reserve Fund, the Health Care Provider Relief Fund, or the Income Tax Refund Fund an amount necessary to reduce those amounts to zero, but not to exceed a monthly aggregate of $33,333,333. except as provided by subsection (d) of this Section.

(d) Upon written notice from the Governor to the Clerk of the House of Representatives, the Secretary of the Senate, and the Secretary of State pursuant to Section 1.1 of the Short Term Borrowing Act, the Comptroller may cease the order of any further transfers to the Budget Stabilization Fund and may order the transfer and the Treasurer shall transfer from the Budget Stabilization Fund to the General Revenue Fund an amount deemed necessary to maintain the State's accounts payable to an amount below $3,400,000,000. In the event that such written notice has been provided, the General Assembly may make transfers or appropriations from the Budget Stabilization Fund for the upcoming fiscal year as necessary to provide for the health, safety, and welfare of the people of the State of Illinois. If the balance of the Budget Stabilization Fund exceeds 5% of the total general funds revenues estimated for that fiscal year, the additional transfers are not required unless there are outstanding liabilities under Section 25 of the State Finance Act from prior fiscal years. If there are such outstanding Section 25 liabilities, then the Comptroller shall continue to transfer 1/12 of the total amount identified for transfer to the Budget Stabilization Fund on the first day of each month of that fiscal year or as soon thereafter as possible to be reserved for those Section 25 liabilities. Nothing in this Act prohibits the General Assembly from appropriating additional moneys into the Budget Stabilization Fund.

(e) On or before August 31 of each fiscal year, the amount determined to be transferred to the Budget Stabilization Fund shall be reconciled to actual general funds revenues for that fiscal year. The final transfer for each fiscal year shall be adjusted so that the total amount transferred under this Section is equal to the amount percentage specified in subsection (a) or (b) of this Section, as applicable, based on actual general funds revenues calculated consistently with subsection (c) of Section 10 of this Act for each fiscal year.

(f) For the fiscal year beginning July 1, 2006 and for each fiscal year thereafter, the budget proposal to the General Assembly shall identify liabilities incurred in a prior fiscal year under Section 25 of the State Finance Act and the budget proposal shall provide funding as allowable pursuant to subsection (d) of this Section, if applicable.

(Source: P.A. 93-660, eff. 7-1-04; 94-839, eff. 6-6-06.)

(30 ILCS 122/20)

(Text of Section WITH the changes made by P.A. 98-599, which has been held unconstitutional)

Sec. 20. Pension Stabilization Fund.

(a) The Pension Stabilization Fund is hereby created as a special fund in the State treasury. Moneys in the fund shall be used for the sole purpose of making payments to the designated retirement systems as provided in Section 25.

(b) For each fiscal year through State fiscal year 2014, when the General Assembly's appropriations and transfers or diversions as required by law from general funds do not exceed 99% of the estimated general funds revenues pursuant to subsection (a) of Section 10, the Comptroller shall transfer from the General Revenue Fund as provided by this Section a total amount equal to 1% 0.5% of the estimated general funds revenues to the Pension Stabilization Fund.

(c) For each fiscal year through State fiscal year 2014, when the General Assembly's appropriations and transfers or diversions as required by law from general funds do not exceed 98% of the estimated general funds revenues pursuant to subsection (b) of Section 10, the Comptroller shall transfer from the General Revenue Fund as provided by this Section a total amount equal to 2% 1.0% of the estimated general funds revenues to the Pension Stabilization Fund.

(c-5) In addition to any other amounts required to be transferred under this Section, in State fiscal year 2016 and each fiscal year thereafter through State fiscal year 2045, or when each of the designated retirement systems, as defined in Section 25, has achieved 100% funding, whichever occurs first, the State Comptroller shall order transferred and the State Treasurer shall transfer from the General Revenue Fund to the Pension Stabilization Fund an amount equal to 10% of (1) the sum of the amounts certified by the designated retirement systems under subsection (a-5) of Section 2-134, subsection (a-10) of Section 14-135.08, subsection (a-10) of Section 15-165, and subsection (a-10) of Section 16-158 of this Code for that fiscal year minus (2) the sum of (i) the transfer required under subsection (c-10) of this Section for that fiscal year and (ii) the sum of the required State contributions certified by the retirement systems under subsection (a) of Section 2-134, subsection (a-5) of Section 14-135.08, subsection (a-5) of Section 15-165, and subsection (a-5) of Section 16-158 of this Code for that fiscal year. The transferred amount is intended to represent one-tenth of the annual savings to the State resulting from the enactment of this amendatory Act of the 98th General Assembly.

(c-10) In State fiscal year 2019, the State Comptroller shall order transferred and the State Treasurer shall transfer $364,000,000 from the General Revenue Fund to the Pension Stabilization Fund. In State fiscal year 2020 and each fiscal year thereafter until terminated under subsection (c-15), the State Comptroller shall order transferred and the State Treasurer shall transfer $1,000,000,000 from the General Revenue Fund to the Pension Stabilization Fund.

(c-15) The transfers made beginning in State fiscal year 2020 pursuant to subsection (c-10) of this Section shall terminate at the end of State fiscal year 2045 or when each of the designated retirement systems, as defined in Section 25, has achieved 100% funding, whichever occurs first.

(d) The Comptroller shall transfer 1/12 of the total amount to be transferred each fiscal year under this Section into the Pension Stabilization Fund on the first day of each month of that fiscal year or as soon thereafter as possible; except that the final transfer of the fiscal year shall be made as soon as practical after the August 31 following the end of the fiscal year.

Before Until State fiscal year 2015, before the final transfer for a fiscal year is made, the Comptroller shall reconcile the estimated general funds revenues used in calculating the other transfers under this Section for that fiscal year with the actual general funds revenues for that fiscal year. The final transfer for the fiscal year shall be adjusted so that the total amount transferred under this Section for that fiscal year is equal to the percentage specified in subsection (b) or (c) of this Section, whichever is applicable, of the actual general funds revenues for that fiscal year. The actual general funds revenues for the fiscal year shall be calculated in a manner consistent with subsection (c) of Section 10 of this Act.

(Source: P.A. 98-599, eff. 6-1-14.)

(Text of Section WITHOUT the changes made by P.A. 98-599, which has been held unconstitutional)

Sec. 20. Pension Stabilization Fund.

(a) The Pension Stabilization Fund is hereby created as a special fund in the State treasury. Moneys in the fund shall be used for the sole purpose of making payments to the designated retirement systems as provided in Section 25.

(b) For each fiscal year when the General Assembly's appropriations and transfers or diversions as required by law from general funds do not exceed 99% of the estimated general funds revenues pursuant to subsection (a) of Section 10, the Comptroller shall transfer from the General Revenue Fund as provided by this Section a total amount equal to 1% 0.5% of the estimated general funds revenues to the Pension Stabilization Fund.

(c) For each fiscal year when the General Assembly's appropriations and transfers or diversions as required by law from general funds do not exceed 98% of the estimated general funds revenues pursuant to subsection (b) of Section 10, the Comptroller shall transfer from the General Revenue Fund as provided by this Section a total amount equal to 2% 1.0% of the estimated general funds revenues to the Pension Stabilization Fund.

(d) The Comptroller shall transfer 1/12 of the total amount to be transferred each fiscal year under this Section into the Pension Stabilization Fund on the first day of each month of that fiscal year or as soon thereafter as possible; except that the final transfer of the fiscal year shall be made as soon as practical after the August 31 following the end of the fiscal year.

Before the final transfer for a fiscal year is made, the Comptroller shall reconcile the estimated general funds revenues used in calculating the other transfers under this Section for that fiscal year with the actual general funds revenues for that fiscal year. The final transfer for the fiscal year shall be adjusted so that the total amount transferred under this Section for that fiscal year is equal to the percentage specified in subsection (b) or (c) of this Section, whichever is applicable, of the actual general funds revenues for that fiscal year. The actual general funds revenues for the fiscal year shall be calculated in a manner consistent with subsection (c) of Section 10 of this Act.

(Source: P.A. 94-839, eff. 6-6-06.)

Section 30-15. The Illinois Income Tax Act is amended by changing Sections 201, 203, 212, 804, 901, and 1501 and by adding Sections 201.7 and 225 as follows:

(35 ILCS 5/201) (from Ch. 120, par. 2-201)

Sec. 201. Tax Imposed.

(a) In general. A tax measured by net income is hereby imposed on every individual, corporation, trust and estate for each taxable year ending after July 31, 1969 on the privilege of earning or receiving income in or as a resident of this State. Such tax shall be in addition to all other occupation or privilege taxes imposed by this State or by any municipal corporation or political subdivision thereof.

(b) Rates. The tax imposed by subsection (a) of this Section shall be determined as follows, except as adjusted by subsection (d-1):

(1) In the case of an individual, trust or estate, for taxable years ending prior to July 1, 1989, an amount equal to 2 1/2% of the taxpayer's net income for the taxable year.

(2) In the case of an individual, trust or estate, for taxable years beginning prior to July 1, 1989 and ending after June 30, 1989, an amount equal to the sum of (i) 2 1/2% of the taxpayer's net income for the period prior to July 1, 1989, as calculated under Section 202.3, and (ii) 3% of the taxpayer's net income for the period after June 30, 1989, as calculated under Section 202.3.

(3) In the case of an individual, trust or estate, for taxable years beginning after June 30, 1989, and ending prior to January 1, 2011, an amount equal to 3% of the taxpayer's net income for the taxable year.

(4) In the case of an individual, trust, or estate, for taxable years beginning prior to January 1, 2011, and ending after December 31, 2010, an amount equal to the sum of (i) 3% of the taxpayer's net income for the period prior to January 1, 2011, as calculated under Section 202.5, and (ii) 5% of the taxpayer's net income for the period after December 31, 2010, as calculated under Section 202.5.

(5) In the case of an individual, trust, or estate, for taxable years beginning on or after January 1, 2011, and ending prior to January 1, 2015, an amount equal to 5% of the taxpayer's net income for the taxable year.

(5.1) In the case of an individual, trust, or estate, for taxable years beginning prior to January 1, 2015, and ending after December 31, 2014, an amount equal to the sum of (i) 5% of the taxpayer's net income for the period prior to January 1, 2015, as calculated under Section 202.5, and (ii) 3.75% of the taxpayer's net income for the period after December 31, 2014, as calculated under Section 202.5.

(5.2) In the case of an individual, trust, or estate, for taxable years beginning on or after January 1, 2015, and ending prior to January 1, 2017 January 1, 2025, an amount equal to 3.75% of the taxpayer's net income for the taxable year.

(5.3) In the case of an individual, trust, or estate, for taxable years beginning prior to January 1, 2017 January 1, 2025, and ending after December 31, 2016 December 31, 2024, an amount equal to the sum of (i) 3.75% of the taxpayer's net income for the period prior to January 1, 2017 January 1, 2025, as calculated under Section 202.5, and (ii) 4.99% 3.25% of the taxpayer's net income for the period after December 31, 2016 December 31, 2024, as calculated under Section 202.5.

(5.4) In the case of an individual, trust, or estate, for taxable years beginning on or after January 1, 2017 January 1, 2025, an amount equal to 4.99% 3.25% of the taxpayer's net income for the taxable year.

(6) In the case of a corporation, for taxable years ending prior to July 1, 1989, an amount equal to 4% of the taxpayer's net income for the taxable year.

(7) In the case of a corporation, for taxable years beginning prior to July 1, 1989 and ending after June 30, 1989, an amount equal to the sum of (i) 4% of the taxpayer's net income for the period prior to July 1, 1989, as calculated under Section 202.3, and (ii) 4.8% of the taxpayer's net income for the period after June 30, 1989, as calculated under Section 202.3.

(8) In the case of a corporation, for taxable years beginning after June 30, 1989, and ending prior to January 1, 2011, an amount equal to 4.8% of the taxpayer's net income for the taxable year.

(9) In the case of a corporation, for taxable years beginning prior to January 1, 2011, and ending after December 31, 2010, an amount equal to the sum of (i) 4.8% of the taxpayer's net income for the period prior to January 1, 2011, as calculated under Section 202.5, and (ii) 7% of the taxpayer's net income for the period after December 31, 2010, as calculated under Section 202.5.

(10) In the case of a corporation, for taxable years beginning on or after January 1, 2011, and ending prior to January 1, 2015, an amount equal to 7% of the taxpayer's net income for the taxable year.

(11) In the case of a corporation, for taxable years beginning prior to January 1, 2015, and ending after December 31, 2014, an amount equal to the sum of (i) 7% of the taxpayer's net income for the period prior to January 1, 2015, as calculated under Section 202.5, and (ii) 5.25% of the taxpayer's net income for the period after December 31, 2014, as calculated under Section 202.5.

(12) In the case of a corporation, for taxable years beginning on or after January 1, 2015, and ending prior to January 1, 2017 January 1, 2025, an amount equal to 5.25% of the taxpayer's net income for the taxable year.

(13) In the case of a corporation, for taxable years beginning prior to January 1, 2017 January 1, 2025, and ending after December 31, 2016 December 31, 2024, an amount equal to the sum of (i) 5.25% of the taxpayer's net income for the period prior to January 1, 2017 January 1, 2025, as calculated under Section 202.5, and (ii) 7% 4.8% of the taxpayer's net income for the period after December 31, 2016 December 31, 2024, as calculated under Section 202.5.

(14) In the case of a corporation, for taxable years beginning on or after January 1, 2017 January 1, 2025, an amount equal to 7% 4.8% of the taxpayer's net income for the taxable year.

The rates under this subsection (b) are subject to the provisions of Section 201.5.

(c) Personal Property Tax Replacement Income Tax. Beginning on July 1, 1979 and thereafter, in addition to such income tax, there is also hereby imposed the Personal Property Tax Replacement Income Tax measured by net income on every corporation (including Subchapter S corporations), partnership and trust, for each taxable year ending after June 30, 1979. Such taxes are imposed on the privilege of earning or receiving income in or as a resident of this State. The Personal Property Tax Replacement Income Tax shall be in addition to the income tax imposed by subsections (a) and (b) of this Section and in addition to all other occupation or privilege taxes imposed by this State or by any municipal corporation or political subdivision thereof.

(d) Additional Personal Property Tax Replacement Income Tax Rates. The personal property tax replacement income tax imposed by this subsection and subsection (c) of this Section in the case of a corporation, other than a Subchapter S corporation and except as adjusted by subsection (d-1), shall be an additional amount equal to 2.85% of such taxpayer's net income for the taxable year, except that beginning on January 1, 1981, and thereafter, the rate of 2.85% specified in this subsection shall be reduced to 2.5%, and in the case of a partnership, trust or a Subchapter S corporation shall be an additional amount equal to 1.5% of such taxpayer's net income for the taxable year.

(d-1) Rate reduction for certain foreign insurers. In the case of a foreign insurer, as defined by Section 35A-5 of the Illinois Insurance Code, whose state or country of domicile imposes on insurers domiciled in Illinois a retaliatory tax (excluding any insurer whose premiums from reinsurance assumed are 50% or more of its total insurance premiums as determined under paragraph (2) of subsection (b) of Section 304, except that for purposes of this determination premiums from reinsurance do not include premiums from inter-affiliate reinsurance arrangements), beginning with taxable years ending on or after December 31, 1999, the sum of the rates of tax imposed by subsections (b) and (d) shall be reduced (but not increased) to the rate at which the total amount of tax imposed under this Act, net of all credits allowed under this Act, shall equal (i) the total amount of tax that would be imposed on the foreign insurer's net income allocable to Illinois for the taxable year by such foreign insurer's state or country of domicile if that net income were subject to all income taxes and taxes measured by net income imposed by such foreign insurer's state or country of domicile, net of all credits allowed or (ii) a rate of zero if no such tax is imposed on such income by the foreign insurer's state of domicile. For the purposes of this subsection (d-1), an inter-affiliate includes a mutual insurer under common management.

(1) For the purposes of subsection (d-1), in no event shall the sum of the rates of tax imposed by subsections (b) and (d) be reduced below the rate at which the sum of:

(A) the total amount of tax imposed on such foreign insurer under this Act for a taxable year, net of all credits allowed under this Act, plus

(B) the privilege tax imposed by Section 409 of the Illinois Insurance Code, the fire insurance company tax imposed by Section 12 of the Fire Investigation Act, and the fire department taxes imposed under Section 11-10-1 of the Illinois Municipal Code,

equals 1.25% for taxable years ending prior to December 31, 2003, or 1.75% for taxable years ending on or after December 31, 2003, of the net taxable premiums written for the taxable year, as described by subsection (1) of Section 409 of the Illinois Insurance Code. This paragraph will in no event increase the rates imposed under subsections (b) and (d).

(2) Any reduction in the rates of tax imposed by this subsection shall be applied first against the rates imposed by subsection (b) and only after the tax imposed by subsection (a) net of all credits allowed under this Section other than the credit allowed under subsection (i) has been reduced to zero, against the rates imposed by subsection (d).

This subsection (d-1) is exempt from the provisions of Section 250.

(e) Investment credit. A taxpayer shall be allowed a credit against the Personal Property Tax Replacement Income Tax for investment in qualified property.

(1) A taxpayer shall be allowed a credit equal to .5% of the basis of qualified property placed in service during the taxable year, provided such property is placed in service on or after July 1, 1984. There shall be allowed an additional credit equal to .5% of the basis of qualified property placed in service during the taxable year, provided such property is placed in service on or after July 1, 1986, and the taxpayer's base employment within Illinois has increased by 1% or more over the preceding year as determined by the taxpayer's employment records filed with the Illinois Department of Employment Security. Taxpayers who are new to Illinois shall be deemed to have met the 1% growth in base employment for the first year in which they file employment records with the Illinois Department of Employment Security. The provisions added to this Section by Public Act 85-1200 (and restored by Public Act 87-895) shall be construed as declaratory of existing law and not as a new enactment. If, in any year, the increase in base employment within Illinois over the preceding year is less than 1%, the additional credit shall be limited to that percentage times a fraction, the numerator of which is .5% and the denominator of which is 1%, but shall not exceed .5%. The investment credit shall not be allowed to the extent that it would reduce a taxpayer's liability in any tax year below zero, nor may any credit for qualified property be allowed for any year other than the year in which the property was placed in service in Illinois. For tax years ending on or after December 31, 1987, and on or before December 31, 1988, the credit shall be allowed for the tax year in which the property is placed in service, or, if the amount of the credit exceeds the tax liability for that year, whether it exceeds the original liability or the liability as later amended, such excess may be carried forward and applied to the tax liability of the 5 taxable years following the excess credit years if the taxpayer (i) makes investments which cause the creation of a minimum of 2,000 full-time equivalent jobs in Illinois, (ii) is located in an enterprise zone established pursuant to the Illinois Enterprise Zone Act and (iii) is certified by the Department of Commerce and Community Affairs (now Department of Commerce and Economic Opportunity) as complying with the requirements specified in clause (i) and (ii) by July 1, 1986. The Department of Commerce and Community Affairs (now Department of Commerce and Economic Opportunity) shall notify the Department of Revenue of all such certifications immediately. For tax years ending after December 31, 1988, the credit shall be allowed for the tax year in which the property is placed in service, or, if the amount of the credit exceeds the tax liability for that year, whether it exceeds the original liability or the liability as later amended, such excess may be carried forward and applied to the tax liability of the 5 taxable years following the excess credit years. The credit shall be applied to the earliest year for which there is a liability. If there is credit from more than one tax year that is available to offset a liability, earlier credit shall be applied first.

(2) The term "qualified property" means property which:

(A) is tangible, whether new or used, including buildings and structural components of buildings and signs that are real property, but not including land or improvements to real property that are not a structural component of a building such as landscaping, sewer lines, local access roads, fencing, parking lots, and other appurtenances;

(B) is depreciable pursuant to Section 167 of the Internal Revenue Code, except that "3-year property" as defined in Section 168(c)(2)(A) of that Code is not eligible for the credit provided by this subsection (e);

(C) is acquired by purchase as defined in Section 179(d) of the Internal Revenue Code;

(D) is used in Illinois by a taxpayer who is primarily engaged in manufacturing, or in mining coal or fluorite, or in retailing, or was placed in service on or after July 1, 2006 in a River Edge Redevelopment Zone established pursuant to the River Edge Redevelopment Zone Act; and

(E) has not previously been used in Illinois in such a manner and by such a person as would qualify for the credit provided by this subsection (e) or subsection (f).

(3) For purposes of this subsection (e), "manufacturing" means the material staging and production of tangible personal property by procedures commonly regarded as manufacturing, processing, fabrication, or assembling which changes some existing material into new shapes, new qualities, or new combinations. For purposes of this subsection (e) the term "mining" shall have the same meaning as the term "mining" in Section 613(c) of the Internal Revenue Code. For purposes of this subsection (e), the term "retailing" means the sale of tangible personal property for use or consumption and not for resale, or services rendered in conjunction with the sale of tangible personal property for use or consumption and not for resale. For purposes of this subsection (e), "tangible personal property" has the same meaning as when that term is used in the Retailers' Occupation Tax Act, and, for taxable years ending after December 31, 2008, does not include the generation, transmission, or distribution of electricity.

(4) The basis of qualified property shall be the basis used to compute the depreciation deduction for federal income tax purposes.

(5) If the basis of the property for federal income tax depreciation purposes is increased after it has been placed in service in Illinois by the taxpayer, the amount of such increase shall be deemed property placed in service on the date of such increase in basis.

(6) The term "placed in service" shall have the same meaning as under Section 46 of the Internal Revenue Code.

(7) If during any taxable year, any property ceases to be qualified property in the hands of the taxpayer within 48 months after being placed in service, or the situs of any qualified property is moved outside Illinois within 48 months after being placed in service, the Personal Property Tax Replacement Income Tax for such taxable year shall be increased. Such increase shall be determined by (i) recomputing the investment credit which would have been allowed for the year in which credit for such property was originally allowed by eliminating such property from such computation and, (ii) subtracting such recomputed credit from the amount of credit previously allowed. For the purposes of this paragraph (7), a reduction of the basis of qualified property resulting from a redetermination of the purchase price shall be deemed a disposition of qualified property to the extent of such reduction.

(8) Unless the investment credit is extended by law, the basis of qualified property shall not include costs incurred after December 31, 2018, except for costs incurred pursuant to a binding contract entered into on or before December 31, 2018.

(9) Each taxable year ending before December 31, 2000, a partnership may elect to pass through to its partners the credits to which the partnership is entitled under this subsection (e) for the taxable year. A partner may use the credit allocated to him or her under this paragraph only against the tax imposed in subsections (c) and (d) of this Section. If the partnership makes that election, those credits shall be allocated among the partners in the partnership in accordance with the rules set forth in Section 704(b) of the Internal Revenue Code, and the rules promulgated under that Section, and the allocated amount of the credits shall be allowed to the partners for that taxable year. The partnership shall make this election on its Personal Property Tax Replacement Income Tax return for that taxable year. The election to pass through the credits shall be irrevocable.

For taxable years ending on or after December 31, 2000, a partner that qualifies its partnership for a subtraction under subparagraph (I) of paragraph (2) of subsection (d) of Section 203 or a shareholder that qualifies a Subchapter S corporation for a subtraction under subparagraph (S) of paragraph (2) of subsection (b) of Section 203 shall be allowed a credit under this subsection (e) equal to its share of the credit earned under this subsection (e) during the taxable year by the partnership or Subchapter S corporation, determined in accordance with the determination of income and distributive share of income under Sections 702 and 704 and Subchapter S of the Internal Revenue Code. This paragraph is exempt from the provisions of Section 250.

(f) Investment credit; Enterprise Zone; River Edge Redevelopment Zone.

(1) A taxpayer shall be allowed a credit against the tax imposed by subsections (a) and (b) of this Section for investment in qualified property which is placed in service in an Enterprise Zone created pursuant to the Illinois Enterprise Zone Act or, for property placed in service on or after July 1, 2006, a River Edge Redevelopment Zone established pursuant to the River Edge Redevelopment Zone Act. For partners, shareholders of Subchapter S corporations, and owners of limited liability companies, if the liability company is treated as a partnership for purposes of federal and State income taxation, there shall be allowed a credit under this subsection (f) to be determined in accordance with the determination of income and distributive share of income under Sections 702 and 704 and Subchapter S of the Internal Revenue Code. The credit shall be .5% of the basis for such property. The credit shall be available only in the taxable year in which the property is placed in service in the Enterprise Zone or River Edge Redevelopment Zone and shall not be allowed to the extent that it would reduce a taxpayer's liability for the tax imposed by subsections (a) and (b) of this Section to below zero. For tax years ending on or after December 31, 1985, the credit shall be allowed for the tax year in which the property is placed in service, or, if the amount of the credit exceeds the tax liability for that year, whether it exceeds the original liability or the liability as later amended, such excess may be carried forward and applied to the tax liability of the 5 taxable years following the excess credit year. The credit shall be applied to the earliest year for which there is a liability. If there is credit from more than one tax year that is available to offset a liability, the credit accruing first in time shall be applied first.

(2) The term qualified property means property which:

(A) is tangible, whether new or used, including buildings and structural components of buildings;

(B) is depreciable pursuant to Section 167 of the Internal Revenue Code, except that "3-year property" as defined in Section 168(c)(2)(A) of that Code is not eligible for the credit provided by this subsection (f);

(C) is acquired by purchase as defined in Section 179(d) of the Internal Revenue Code;

(D) is used in the Enterprise Zone or River Edge Redevelopment Zone by the taxpayer; and

(E) has not been previously used in Illinois in such a manner and by such a person as would qualify for the credit provided by this subsection (f) or subsection (e).

(3) The basis of qualified property shall be the basis used to compute the depreciation deduction for federal income tax purposes.

(4) If the basis of the property for federal income tax depreciation purposes is increased after it has been placed in service in the Enterprise Zone or River Edge Redevelopment Zone by the taxpayer, the amount of such increase shall be deemed property placed in service on the date of such increase in basis.

(5) The term "placed in service" shall have the same meaning as under Section 46 of the Internal Revenue Code.

(6) If during any taxable year, any property ceases to be qualified property in the hands of the taxpayer within 48 months after being placed in service, or the situs of any qualified property is moved outside the Enterprise Zone or River Edge Redevelopment Zone within 48 months after being placed in service, the tax imposed under subsections (a) and (b) of this Section for such taxable year shall be increased. Such increase shall be determined by (i) recomputing the investment credit which would have been allowed for the year in which credit for such property was originally allowed by eliminating such property from such computation, and (ii) subtracting such recomputed credit from the amount of credit previously allowed. For the purposes of this paragraph (6), a reduction of the basis of qualified property resulting from a redetermination of the purchase price shall be deemed a disposition of qualified property to the extent of such reduction.

(7) There shall be allowed an additional credit equal to 0.5% of the basis of qualified property placed in service during the taxable year in a River Edge Redevelopment Zone, provided such property is placed in service on or after July 1, 2006, and the taxpayer's base employment within Illinois has increased by 1% or more over the preceding year as determined by the taxpayer's employment records filed with the Illinois Department of Employment Security. Taxpayers who are new to Illinois shall be deemed to have met the 1% growth in base employment for the first year in which they file employment records with the Illinois Department of Employment Security. If, in any year, the increase in base employment within Illinois over the preceding year is less than 1%, the additional credit shall be limited to that percentage times a fraction, the numerator of which is 0.5% and the denominator of which is 1%, but shall not exceed 0.5%.

(g) (Blank).

(h) Investment credit; High Impact Business.

(1) Subject to subsections (b) and (b-5) of Section 5.5 of the Illinois Enterprise Zone Act, a taxpayer shall be allowed a credit against the tax imposed by subsections (a) and (b) of this Section for investment in qualified property which is placed in service by a Department of Commerce and Economic Opportunity designated High Impact Business. The credit shall be .5% of the basis for such property. The credit shall not be available (i) until the minimum investments in qualified property set forth in subdivision (a)(3)(A) of Section 5.5 of the Illinois Enterprise Zone Act have been satisfied or (ii) until the time authorized in subsection (b-5) of the Illinois Enterprise Zone Act for entities designated as High Impact Businesses under subdivisions (a)(3)(B), (a)(3)(C), and (a)(3)(D) of Section 5.5 of the Illinois Enterprise Zone Act, and shall not be allowed to the extent that it would reduce a taxpayer's liability for the tax imposed by subsections (a) and (b) of this Section to below zero. The credit applicable to such investments shall be taken in the taxable year in which such investments have been completed. The credit for additional investments beyond the minimum investment by a designated high impact business authorized under subdivision (a)(3)(A) of Section 5.5 of the Illinois Enterprise Zone Act shall be available only in the taxable year in which the property is placed in service and shall not be allowed to the extent that it would reduce a taxpayer's liability for the tax imposed by subsections (a) and (b) of this Section to below zero. For tax years ending on or after December 31, 1987, the credit shall be allowed for the tax year in which the property is placed in service, or, if the amount of the credit exceeds the tax liability for that year, whether it exceeds the original liability or the liability as later amended, such excess may be carried forward and applied to the tax liability of the 5 taxable years following the excess credit year. The credit shall be applied to the earliest year for which there is a liability. If there is credit from more than one tax year that is available to offset a liability, the credit accruing first in time shall be applied first.

Changes made in this subdivision (h)(1) by Public Act 88-670 restore changes made by Public Act 85-1182 and reflect existing law.

(2) The term qualified property means property which:

(A) is tangible, whether new or used, including buildings and structural components of buildings;

(B) is depreciable pursuant to Section 167 of the Internal Revenue Code, except that "3-year property" as defined in Section 168(c)(2)(A) of that Code is not eligible for the credit provided by this subsection (h);

(C) is acquired by purchase as defined in Section 179(d) of the Internal Revenue Code; and

(D) is not eligible for the Enterprise Zone Investment Credit provided by subsection (f) of this Section.

(3) The basis of qualified property shall be the basis used to compute the depreciation deduction for federal income tax purposes.

(4) If the basis of the property for federal income tax depreciation purposes is increased after it has been placed in service in a federally designated Foreign Trade Zone or Sub-Zone located in Illinois by the taxpayer, the amount of such increase shall be deemed property placed in service on the date of such increase in basis.

(5) The term "placed in service" shall have the same meaning as under Section 46 of the Internal Revenue Code.

(6) If during any taxable year ending on or before December 31, 1996, any property ceases to be qualified property in the hands of the taxpayer within 48 months after being placed in service, or the situs of any qualified property is moved outside Illinois within 48 months after being placed in service, the tax imposed under subsections (a) and (b) of this Section for such taxable year shall be increased. Such increase shall be determined by (i) recomputing the investment credit which would have been allowed for the year in which credit for such property was originally allowed by eliminating such property from such computation, and (ii) subtracting such recomputed credit from the amount of credit previously allowed. For the purposes of this paragraph (6), a reduction of the basis of qualified property resulting from a redetermination of the purchase price shall be deemed a disposition of qualified property to the extent of such reduction.

(7) Beginning with tax years ending after December 31, 1996, if a taxpayer qualifies for the credit under this subsection (h) and thereby is granted a tax abatement and the taxpayer relocates its entire facility in violation of the explicit terms and length of the contract under Section 18-183 of the Property Tax Code, the tax imposed under subsections (a) and (b) of this Section shall be increased for the taxable year in which the taxpayer relocated its facility by an amount equal to the amount of credit received by the taxpayer under this subsection (h).

(i) Credit for Personal Property Tax Replacement Income Tax. For tax years ending prior to December 31, 2003, a credit shall be allowed against the tax imposed by subsections (a) and (b) of this Section for the tax imposed by subsections (c) and (d) of this Section. This credit shall be computed by multiplying the tax imposed by subsections (c) and (d) of this Section by a fraction, the numerator of which is base income allocable to Illinois and the denominator of which is Illinois base income, and further multiplying the product by the tax rate imposed by subsections (a) and (b) of this Section.

Any credit earned on or after December 31, 1986 under this subsection which is unused in the year the credit is computed because it exceeds the tax liability imposed by subsections (a) and (b) for that year (whether it exceeds the original liability or the liability as later amended) may be carried forward and applied to the tax liability imposed by subsections (a) and (b) of the 5 taxable years following the excess credit year, provided that no credit may be carried forward to any year ending on or after December 31, 2003. This credit shall be applied first to the earliest year for which there is a liability. If there is a credit under this subsection from more than one tax year that is available to offset a liability the earliest credit arising under this subsection shall be applied first.

If, during any taxable year ending on or after December 31, 1986, the tax imposed by subsections (c) and (d) of this Section for which a taxpayer has claimed a credit under this subsection (i) is reduced, the amount of credit for such tax shall also be reduced. Such reduction shall be determined by recomputing the credit to take into account the reduced tax imposed by subsections (c) and (d). If any portion of the reduced amount of credit has been carried to a different taxable year, an amended return shall be filed for such taxable year to reduce the amount of credit claimed.

(j) Training expense credit. Beginning with tax years ending on or after December 31, 1986 and prior to December 31, 2003, a taxpayer shall be allowed a credit against the tax imposed by subsections (a) and (b) under this Section for all amounts paid or accrued, on behalf of all persons employed by the taxpayer in Illinois or Illinois residents employed outside of Illinois by a taxpayer, for educational or vocational training in semi-technical or technical fields or semi-skilled or skilled fields, which were deducted from gross income in the computation of taxable income. The credit against the tax imposed by subsections (a) and (b) shall be 1.6% of such training expenses. For partners, shareholders of subchapter S corporations, and owners of limited liability companies, if the liability company is treated as a partnership for purposes of federal and State income taxation, there shall be allowed a credit under this subsection (j) to be determined in accordance with the determination of income and distributive share of income under Sections 702 and 704 and subchapter S of the Internal Revenue Code.

Any credit allowed under this subsection which is unused in the year the credit is earned may be carried forward to each of the 5 taxable years following the year for which the credit is first computed until it is used. This credit shall be applied first to the earliest year for which there is a liability. If there is a credit under this subsection from more than one tax year that is available to offset a liability the earliest credit arising under this subsection shall be applied first. No carryforward credit may be claimed in any tax year ending on or after December 31, 2003.

(k) Research and development credit. For tax years ending after July 1, 1990 and prior to December 31, 2003, and beginning again for tax years ending on or after December 31, 2004, and ending prior to January 1, 2016, a taxpayer shall be allowed a credit against the tax imposed by subsections (a) and (b) of this Section for increasing research activities in this State. The credit allowed against the tax imposed by subsections (a) and (b) shall be equal to 6 1/2% of the qualifying expenditures for increasing research activities in this State. For partners, shareholders of subchapter S corporations, and owners of limited liability companies, if the liability company is treated as a partnership for purposes of federal and State income taxation, there shall be allowed a credit under this subsection to be determined in accordance with the determination of income and distributive share of income under Sections 702 and 704 and subchapter S of the Internal Revenue Code.

For purposes of this subsection, "qualifying expenditures" means the qualifying expenditures as defined for the federal credit for increasing research activities which would be allowable under Section 41 of the Internal Revenue Code and which are conducted in this State, "qualifying expenditures for increasing research activities in this State" means the excess of qualifying expenditures for the taxable year in which incurred over qualifying expenditures for the base period, "qualifying expenditures for the base period" means (i) for tax years ending prior to December 31, 2017, the average of the qualifying expenditures for each year in the base period; and (2) for tax years ending on or after December 31, 2017, 50% of the average of the qualifying expenditures for each year in the base period, and "base period" means the 3 taxable years immediately preceding the taxable year for which the determination is being made.

Any credit in excess of the tax liability for the taxable year may be carried forward. A taxpayer may elect to have the unused credit shown on its final completed return carried over as a credit against the tax liability for the following 5 taxable years or until it has been fully used, whichever occurs first; provided that no credit earned in a tax year ending prior to December 31, 2003 may be carried forward to any year ending on or after December 31, 2003.

If an unused credit is carried forward to a given year from 2 or more earlier years, that credit arising in the earliest year will be applied first against the tax liability for the given year. If a tax liability for the given year still remains, the credit from the next earliest year will then be applied, and so on, until all credits have been used or no tax liability for the given year remains. Any remaining unused credit or credits then will be carried forward to the next following year in which a tax liability is incurred, except that no credit can be carried forward to a year which is more than 5 years after the year in which the expense for which the credit is given was incurred.

No inference shall be drawn from this amendatory Act of the 91st General Assembly in construing this Section for taxable years beginning before January 1, 1999.

This subsection (k) is exempt from the provisions of Section 250.

It is the intent of the General Assembly that the research and development credit under this subsection (k) shall apply continuously for all tax years ending on or after December 31, 2004, including, but not limited to, the period beginning on January 1, 2016 and ending on the effective date of this amendatory Act of the 100th General Assembly. All actions taken in reliance on the continuation of the credit under this subsection (k) by any taxpayer are hereby validated.

(l) Environmental Remediation Tax Credit.

(i) For tax years ending after December 31, 1997 and on or before December 31, 2001, a taxpayer shall be allowed a credit against the tax imposed by subsections (a) and (b) of this Section for certain amounts paid for unreimbursed eligible remediation costs, as specified in this subsection. For purposes of this Section, "unreimbursed eligible remediation costs" means costs approved by the Illinois Environmental Protection Agency ("Agency") under Section 58.14 of the Environmental Protection Act that were paid in performing environmental remediation at a site for which a No Further Remediation Letter was issued by the Agency and recorded under Section 58.10 of the Environmental Protection Act. The credit must be claimed for the taxable year in which Agency approval of the eligible remediation costs is granted. The credit is not available to any taxpayer if the taxpayer or any related party caused or contributed to, in any material respect, a release of regulated substances on, in, or under the site that was identified and addressed by the remedial action pursuant to the Site Remediation Program of the Environmental Protection Act. After the Pollution Control Board rules are adopted pursuant to the Illinois Administrative Procedure Act for the administration and enforcement of Section 58.9 of the Environmental Protection Act, determinations as to credit availability for purposes of this Section shall be made consistent with those rules. For purposes of this Section, "taxpayer" includes a person whose tax attributes the taxpayer has succeeded to under Section 381 of the Internal Revenue Code and "related party" includes the persons disallowed a deduction for losses by paragraphs (b), (c), and (f)(1) of Section 267 of the Internal Revenue Code by virtue of being a related taxpayer, as well as any of its partners. The credit allowed against the tax imposed by subsections (a) and (b) shall be equal to 25% of the unreimbursed eligible remediation costs in excess of $100,000 per site, except that the $100,000 threshold shall not apply to any site contained in an enterprise zone as determined by the Department of Commerce and Community Affairs (now Department of Commerce and Economic Opportunity). The total credit allowed shall not exceed $40,000 per year with a maximum total of $150,000 per site. For partners and shareholders of subchapter S corporations, there shall be allowed a credit under this subsection to be determined in accordance with the determination of income and distributive share of income under Sections 702 and 704 and subchapter S of the Internal Revenue Code.

(ii) A credit allowed under this subsection that is unused in the year the credit is earned may be carried forward to each of the 5 taxable years following the year for which the credit is first earned until it is used. The term "unused credit" does not include any amounts of unreimbursed eligible remediation costs in excess of the maximum credit per site authorized under paragraph (i). This credit shall be applied first to the earliest year for which there is a liability. If there is a credit under this subsection from more than one tax year that is available to offset a liability, the earliest credit arising under this subsection shall be applied first. A credit allowed under this subsection may be sold to a buyer as part of a sale of all or part of the remediation site for which the credit was granted. The purchaser of a remediation site and the tax credit shall succeed to the unused credit and remaining carry-forward period of the seller. To perfect the transfer, the assignor shall record the transfer in the chain of title for the site and provide written notice to the Director of the Illinois Department of Revenue of the assignor's intent to sell the remediation site and the amount of the tax credit to be transferred as a portion of the sale. In no event may a credit be transferred to any taxpayer if the taxpayer or a related party would not be eligible under the provisions of subsection (i).

(iii) For purposes of this Section, the term "site" shall have the same meaning as under Section 58.2 of the Environmental Protection Act.

(m) Education expense credit. Beginning with tax years ending after December 31, 1999, a taxpayer who is the custodian of one or more qualifying pupils shall be allowed a credit against the tax imposed by subsections (a) and (b) of this Section for qualified education expenses incurred on behalf of the qualifying pupils. The credit shall be equal to 25% of qualified education expenses, but in no event may the total credit under this subsection claimed by a family that is the custodian of qualifying pupils exceed (i) $500 for tax years ending prior to December 31, 2017, and (ii) $750 for tax years ending on or after December 31, 2017. In no event shall a credit under this subsection reduce the taxpayer's liability under this Act to less than zero. This subsection is exempt from the provisions of Section 250 of this Act.

For purposes of this subsection:

"Qualifying pupils" means individuals who (i) are residents of the State of Illinois, (ii) are under the age of 21 at the close of the school year for which a credit is sought, and (iii) during the school year for which a credit is sought were full-time pupils enrolled in a kindergarten through twelfth grade education program at any school, as defined in this subsection.

"Qualified education expense" means the amount incurred on behalf of a qualifying pupil in excess of $250 for tuition, book fees, and lab fees at the school in which the pupil is enrolled during the regular school year.

"School" means any public or nonpublic elementary or secondary school in Illinois that is in compliance with Title VI of the Civil Rights Act of 1964 and attendance at which satisfies the requirements of Section 26-1 of the School Code, except that nothing shall be construed to require a child to attend any particular public or nonpublic school to qualify for the credit under this Section.

"Custodian" means, with respect to qualifying pupils, an Illinois resident who is a parent, the parents, a legal guardian, or the legal guardians of the qualifying pupils.

(n) River Edge Redevelopment Zone site remediation tax credit.

(i) For tax years ending on or after December 31, 2006, a taxpayer shall be allowed a credit against the tax imposed by subsections (a) and (b) of this Section for certain amounts paid for unreimbursed eligible remediation costs, as specified in this subsection. For purposes of this Section, "unreimbursed eligible remediation costs" means costs approved by the Illinois Environmental Protection Agency ("Agency") under Section 58.14a of the Environmental Protection Act that were paid in performing environmental remediation at a site within a River Edge Redevelopment Zone for which a No Further Remediation Letter was issued by the Agency and recorded under Section 58.10 of the Environmental Protection Act. The credit must be claimed for the taxable year in which Agency approval of the eligible remediation costs is granted. The credit is not available to any taxpayer if the taxpayer or any related party caused or contributed to, in any material respect, a release of regulated substances on, in, or under the site that was identified and addressed by the remedial action pursuant to the Site Remediation Program of the Environmental Protection Act. Determinations as to credit availability for purposes of this Section shall be made consistent with rules adopted by the Pollution Control Board pursuant to the Illinois Administrative Procedure Act for the administration and enforcement of Section 58.9 of the Environmental Protection Act. For purposes of this Section, "taxpayer" includes a person whose tax attributes the taxpayer has succeeded to under Section 381 of the Internal Revenue Code and "related party" includes the persons disallowed a deduction for losses by paragraphs (b), (c), and (f)(1) of Section 267 of the Internal Revenue Code by virtue of being a related taxpayer, as well as any of its partners. The credit allowed against the tax imposed by subsections (a) and (b) shall be equal to 25% of the unreimbursed eligible remediation costs in excess of $100,000 per site.

(ii) A credit allowed under this subsection that is unused in the year the credit is earned may be carried forward to each of the 5 taxable years following the year for which the credit is first earned until it is used. This credit shall be applied first to the earliest year for which there is a liability. If there is a credit under this subsection from more than one tax year that is available to offset a liability, the earliest credit arising under this subsection shall be applied first. A credit allowed under this subsection may be sold to a buyer as part of a sale of all or part of the remediation site for which the credit was granted. The purchaser of a remediation site and the tax credit shall succeed to the unused credit and remaining carry-forward period of the seller. To perfect the transfer, the assignor shall record the transfer in the chain of title for the site and provide written notice to the Director of the Illinois Department of Revenue of the assignor's intent to sell the remediation site and the amount of the tax credit to be transferred as a portion of the sale. In no event may a credit be transferred to any taxpayer if the taxpayer or a related party would not be eligible under the provisions of subsection (i).

(iii) For purposes of this Section, the term "site" shall have the same meaning as under Section 58.2 of the Environmental Protection Act.

(o) For each of taxable years during the Compassionate Use of Medical Cannabis Pilot Program, a surcharge is imposed on all taxpayers on income arising from the sale or exchange of capital assets, depreciable business property, real property used in the trade or business, and Section 197 intangibles of an organization registrant under the Compassionate Use of Medical Cannabis Pilot Program Act. The amount of the surcharge is equal to the amount of federal income tax liability for the taxable year attributable to those sales and exchanges. The surcharge imposed does not apply if:

(1) the medical cannabis cultivation center registration, medical cannabis dispensary registration, or the property of a registration is transferred as a result of any of the following:

(A) bankruptcy, a receivership, or a debt adjustment initiated by or against the initial registration or the substantial owners of the initial registration;

(B) cancellation, revocation, or termination of any registration by the Illinois Department of Public Health;

(C) a determination by the Illinois Department of Public Health that transfer of the registration is in the best interests of Illinois qualifying patients as defined by the Compassionate Use of Medical Cannabis Pilot Program Act;

(D) the death of an owner of the equity interest in a registrant;

(E) the acquisition of a controlling interest in the stock or substantially all of the assets of a publicly traded company;

(F) a transfer by a parent company to a wholly owned subsidiary; or

(G) the transfer or sale to or by one person to another person where both persons were initial owners of the registration when the registration was issued; or

(2) the cannabis cultivation center registration, medical cannabis dispensary registration, or the controlling interest in a registrant's property is transferred in a transaction to lineal descendants in which no gain or loss is recognized or as a result of a transaction in accordance with Section 351 of the Internal Revenue Code in which no gain or loss is recognized.

(Source: P.A. 97-2, eff. 5-6-11; 97-636, eff. 6-1-12; 97-905, eff. 8-7-12; 98-109, eff. 7-25-13; 98-122, eff. 1-1-14; 98-756, eff. 7-16-14.)

(35 ILCS 5/201.7 new)

Sec. 201.7. Fiscal Year 2018 spending limitation and tax reduction.

(a) If, in State fiscal year 2018, State spending exceeds the State spending limitation set forth in subsection (b) of this Section, then the tax rates set forth in subsection (b) of Section 201 of this Act shall be reduced, according to the procedures set forth in this Section, to 3.75% of the taxpayer's net income for individuals, trusts, and estates and to 5.25% of the taxpayer's net income for corporations. For all taxable years following the taxable year in which the rate has been reduced pursuant to this Section, the tax rate set forth in subsection (b) of Section 201 of this Act shall be 3.75% of the taxpayer's net income for individuals, trusts, and estates and 5.25% of the taxpayer's net income for corporations.

(b) The State spending limitation for fiscal years 2018 shall be $38,450,000,000.

(c) Notwithstanding any other provision of law to the contrary, the Auditor General shall examine each Public Act authorizing State spending from State general funds and prepare a report no later than 30 days after receiving notification of the Public Act from the Secretary of State or 60 days after the effective date of the Public Act, whichever is earlier. The Auditor General shall file the report with the Secretary of State and copies with the Governor, the State Treasurer, the State Comptroller, the Senate, and the House of Representatives. The report shall indicate: (i) the amount of State spending set forth in the applicable Public Act; (ii) the total amount of State spending authorized by law for the applicable fiscal year as of the date of the report; and (iii) whether State spending exceeds the State spending limitation set forth in subsection (b). The Auditor General may examine multiple Public Acts in one consolidated report, provided that each Public Act is examined within the time period mandated by this subsection (c). The Auditor General shall issue reports in accordance with this Section through June 30, 2018, or the effective date of a reduction in the rate of tax imposed by subsections (a) and (b) of Section 201 of this Act pursuant to this Section, whichever is earlier.

At the request of the Auditor General, each State agency shall, without delay, make available to the Auditor General or his or her designated representative any record or information requested and shall provide for examination or copying all records, accounts, papers, reports, vouchers, correspondence, books and other documentation in the custody of that agency, including information stored in electronic data processing systems, which is related to or within the scope of a report prepared under this Section. The Auditor General shall report to the Governor each instance in which a State agency fails to cooperate promptly and fully with his or her office as required by this Section.

The Auditor General's report shall not be in the nature of a post-audit or examination and shall not lead to the issuance of an opinion as that term is defined in generally accepted government auditing standards.

(d) If the Auditor General reports that State spending has exceeded the State spending limitation set forth in subsection (b) and if the Governor has not been presented with a bill or bills passed by the General Assembly to reduce State spending to a level that does not exceed the State spending limitation within 45 calendar days of receipt of the Auditor General's report, then the Governor may, for the purpose of reducing State spending to a level that does not exceed the State spending limitation set forth in subsection (b), designate amounts to be set aside as a reserve from the amounts appropriated from the State general funds for all boards, commissions, agencies, institutions, authorities, colleges, universities, and bodies politic and corporate of the State, but not other constitutional officers, the legislative or judicial branch, the office of the Executive Inspector General, or the Executive Ethics Commission. Such a designation must be made within 15 calendar days after the end of that 45-day period. If the Governor designates amounts to be set aside as a reserve, the Governor shall give notice of the designation to the Auditor General, the State Treasurer, the State Comptroller, the Senate, and the House of Representatives. The amounts placed in reserves shall not be transferred, obligated, encumbered, expended, or otherwise committed unless so authorized by law. Any amount placed in reserves is not State spending and shall not be considered when calculating the total amount of State spending. Any Public Act authorizing the use of amounts placed in reserve by the Governor is considered State spending, unless such Public Act authorizes the use of amounts placed in reserves in response to a fiscal emergency under subsection (g).

(e) If the Auditor General reports under subsection (c) that State spending has exceeded the State spending limitation set forth in subsection (b), then the Auditor General shall issue a supplemental report no sooner than the 61st day and no later than the 65th day after issuing the report pursuant to subsection (c). The supplemental report shall: (i) summarize details of actions taken by the General Assembly and the Governor after the issuance of the initial report to reduce State spending, if any, (ii) indicate whether the level of State spending has changed since the initial report, and (iii) indicate whether State spending exceeds the State spending limitation. The Auditor General shall file the report with the Secretary of State and copies with the Governor, the State Treasurer, the State Comptroller, the Senate, and the House of Representatives. If the supplemental report of the Auditor General provides that State spending exceeds the State spending limitation, then the rate of tax imposed by subsections (a) and (b) of Section 201 is reduced as provided in this Section beginning on the first day of the first month to occur not less than 30 days after issuance of the supplemental report.

(f) Should the rates of tax be reduced under this Section, the tax imposed by subsections (a) and (b) of Section 201 shall be determined as follows:

(1) In the case of an individual, trust, or estate, the tax shall be imposed in an amount equal to the sum of (i) the rate applicable to the taxpayer under subsection (b) of Section 201 (without regard to the provisions of this Section) times the taxpayer's net income for any portion of the taxable year prior to the effective date of the reduction and (ii) 3.75% of the taxpayer's net income for any portion of the taxable year on or after the effective date of the reduction.

(2) In the case of a corporation, the tax shall be imposed in an amount equal to the sum of (i) the rate applicable to the taxpayer under subsection (b) of Section 201 (without regard to the provisions of this Section) times the taxpayer's net income for any portion of the taxable year prior to the effective date of the reduction and (ii) 5.25% of the taxpayer's net income for any portion of the taxable year on or after the effective date of the reduction.

(3) For any taxpayer for whom the rate has been reduced under this Section for a portion of a taxable year, the taxpayer shall determine the net income for each portion of the taxable year following the rules set forth in Section 202.5 of this Act, using the effective date of the rate reduction rather than the January 1 dates found in that Section, and the day before the effective date of the rate reduction rather than the December 31 dates found in that Section.

(4) If the rate applicable to the taxpayer under subsection (b) of Section 201 (without regard to the provisions of this Section) changes during a portion of the taxable year to which that rate is applied under paragraphs (1) or (2) of this subsection (f), the tax for that portion of the taxable year for purposes of paragraph (1) or (2) of this subsection (f) shall be determined as if that portion of the taxable year were a separate taxable year, following the rules set forth in Section 202.5 of this Act. If the taxpayer elects to follow the rules set forth in subsection (b) of Section 202.5, the taxpayer shall follow the rules set forth in subsection (b) of Section 202.5 for all purposes of this Section for that taxable year.

(g) Notwithstanding the State spending limitation set forth in subsection (b) of this Section, the Governor may declare a fiscal emergency by filing a declaration with the Secretary of State and copies with the State Treasurer, the State Comptroller, the Senate, and the House of Representatives. The declaration must be limited to only one State fiscal year, set forth compelling reasons for declaring a fiscal emergency, and request a specific dollar amount. Unless, within 10 calendar days of receipt of the Governor's declaration, the State Comptroller or State Treasurer notifies the Senate and the House of Representatives that he or she does not concur in the Governor's declaration, State spending authorized by law to address the fiscal emergency in an amount no greater than the dollar amount specified in the declaration shall not be considered "State spending" for purposes of the State spending limitation.

(h) As used in this Section:

"State general funds" means the General Revenue Fund, the Common School Fund, the General Revenue Common School Special Account Fund, the Education Assistance Fund, and the Budget Stabilization Fund.

"State spending" means (i) the total amount authorized for spending by appropriation or statutory transfer from the State general funds in the applicable fiscal year, and (ii) any amounts the Governor places in reserves in accordance with subsection (d) that are subsequently released from reserves following authorization by a Public Act. For the purpose of this definition, "appropriation" means authority to spend money from a State general fund for a specific amount, purpose, and time period, including any supplemental appropriation or continuing appropriation, but does not include reappropriations from a previous fiscal year. For the purpose of this definition, "statutory transfer" means authority to transfer funds from one State general fund to any other fund in the State treasury, but does not include transfers made from one State general fund to another State general fund.

"State spending limitation" means the amount described in subsection (b) of this Section for the applicable fiscal year.

(35 ILCS 5/203) (from Ch. 120, par. 2-203)

Sec. 203. Base income defined.

(a) Individuals.

(1) In general. In the case of an individual, base income means an amount equal to the taxpayer's adjusted gross income for the taxable year as modified by paragraph (2).

(2) Modifications. The adjusted gross income referred to in paragraph (1) shall be modified by adding thereto the sum of the following amounts:

(A) An amount equal to all amounts paid or accrued to the taxpayer as interest or dividends during the taxable year to the extent excluded from gross income in the computation of adjusted gross income, except stock dividends of qualified public utilities described in Section 305(e) of the Internal Revenue Code;

(B) An amount equal to the amount of tax imposed by this Act to the extent deducted from gross income in the computation of adjusted gross income for the taxable year;

(C) An amount equal to the amount received during the taxable year as a recovery or refund of real property taxes paid with respect to the taxpayer's principal residence under the Revenue Act of 1939 and for which a deduction was previously taken under subparagraph (L) of this paragraph (2) prior to July 1, 1991, the retrospective application date of Article 4 of Public Act 87-17. In the case of multi-unit or multi-use structures and farm dwellings, the taxes on the taxpayer's principal residence shall be that portion of the total taxes for the entire property which is attributable to such principal residence;

(D) An amount equal to the amount of the capital gain deduction allowable under the Internal Revenue Code, to the extent deducted from gross income in the computation of adjusted gross income;

(D-5) An amount, to the extent not included in adjusted gross income, equal to the amount of money withdrawn by the taxpayer in the taxable year from a medical care savings account and the interest earned on the account in the taxable year of a withdrawal pursuant to subsection (b) of Section 20 of the Medical Care Savings Account Act or subsection (b) of Section 20 of the Medical Care Savings Account Act of 2000;

(D-10) For taxable years ending after December 31, 1997, an amount equal to any eligible remediation costs that the individual deducted in computing adjusted gross income and for which the individual claims a credit under subsection (l) of Section 201;

(D-15) For taxable years 2001 and thereafter, an amount equal to the bonus depreciation deduction taken on the taxpayer's federal income tax return for the taxable year under subsection (k) of Section 168 of the Internal Revenue Code;

(D-16) If the taxpayer sells, transfers, abandons, or otherwise disposes of property for which the taxpayer was required in any taxable year to make an addition modification under subparagraph (D-15), then an amount equal to the aggregate amount of the deductions taken in all taxable years under subparagraph (Z) with respect to that property.

If the taxpayer continues to own property through the last day of the last tax year for which the taxpayer may claim a depreciation deduction for federal income tax purposes and for which the taxpayer was allowed in any taxable year to make a subtraction modification under subparagraph (Z), then an amount equal to that subtraction modification.

The taxpayer is required to make the addition modification under this subparagraph only once with respect to any one piece of property;

(D-17) An amount equal to the amount otherwise allowed as a deduction in computing base income for interest paid, accrued, or incurred, directly or indirectly, (i) for taxable years ending on or after December 31, 2004, to a foreign person who would be a member of the same unitary business group but for the fact that foreign person's business activity outside the United States is 80% or more of the foreign person's total business activity and (ii) for taxable years ending on or after December 31, 2008, to a person who would be a member of the same unitary business group but for the fact that the person is prohibited under Section 1501(a)(27) from being included in the unitary business group because he or she is ordinarily required to apportion business income under different subsections of Section 304. The addition modification required by this subparagraph shall be reduced to the extent that dividends were included in base income of the unitary group for the same taxable year and received by the taxpayer or by a member of the taxpayer's unitary business group (including amounts included in gross income under Sections 951 through 964 of the Internal Revenue Code and amounts included in gross income under Section 78 of the Internal Revenue Code) with respect to the stock of the same person to whom the interest was paid, accrued, or incurred.

This paragraph shall not apply to the following:

(i) an item of interest paid, accrued, or incurred, directly or indirectly, to a person who is subject in a foreign country or state, other than a state which requires mandatory unitary reporting, to a tax on or measured by net income with respect to such interest; or

(ii) an item of interest paid, accrued, or incurred, directly or indirectly, to a person if the taxpayer can establish, based on a preponderance of the evidence, both of the following:

(a) the person, during the same taxable year, paid, accrued, or incurred, the interest to a person that is not a related member, and

(b) the transaction giving rise to the interest expense between the taxpayer and the person did not have as a principal purpose the avoidance of Illinois income tax, and is paid pursuant to a contract or agreement that reflects an arm's-length interest rate and terms; or

(iii) the taxpayer can establish, based on clear and convincing evidence, that the interest paid, accrued, or incurred relates to a contract or agreement entered into at arm's-length rates and terms and the principal purpose for the payment is not federal or Illinois tax avoidance; or

(iv) an item of interest paid, accrued, or incurred, directly or indirectly, to a person if the taxpayer establishes by clear and convincing evidence that the adjustments are unreasonable; or if the taxpayer and the Director agree in writing to the application or use of an alternative method of apportionment under Section 304(f).

Nothing in this subsection shall preclude the Director from making any other adjustment otherwise allowed under Section 404 of this Act for any tax year beginning after the effective date of this amendment provided such adjustment is made pursuant to regulation adopted by the Department and such regulations provide methods and standards by which the Department will utilize its authority under Section 404 of this Act;

(D-18) An amount equal to the amount of intangible expenses and costs otherwise allowed as a deduction in computing base income, and that were paid, accrued, or incurred, directly or indirectly, (i) for taxable years ending on or after December 31, 2004, to a foreign person who would be a member of the same unitary business group but for the fact that the foreign person's business activity outside the United States is 80% or more of that person's total business activity and (ii) for taxable years ending on or after December 31, 2008, to a person who would be a member of the same unitary business group but for the fact that the person is prohibited under Section 1501(a)(27) from being included in the unitary business group because he or she is ordinarily required to apportion business income under different subsections of Section 304. The addition modification required by this subparagraph shall be reduced to the extent that dividends were included in base income of the unitary group for the same taxable year and received by the taxpayer or by a member of the taxpayer's unitary business group (including amounts included in gross income under Sections 951 through 964 of the Internal Revenue Code and amounts included in gross income under Section 78 of the Internal Revenue Code) with respect to the stock of the same person to whom the intangible expenses and costs were directly or indirectly paid, incurred, or accrued. The preceding sentence does not apply to the extent that the same dividends caused a reduction to the addition modification required under Section 203(a)(2)(D-17) of this Act. As used in this subparagraph, the term "intangible expenses and costs" includes (1) expenses, losses, and costs for, or related to, the direct or indirect acquisition, use, maintenance or management, ownership, sale, exchange, or any other disposition of intangible property; (2) losses incurred, directly or indirectly, from factoring transactions or discounting transactions; (3) royalty, patent, technical, and copyright fees; (4) licensing fees; and (5) other similar expenses and costs. For purposes of this subparagraph, "intangible property" includes patents, patent applications, trade names, trademarks, service marks, copyrights, mask works, trade secrets, and similar types of intangible assets.

This paragraph shall not apply to the following:

(i) any item of intangible expenses or costs paid, accrued, or incurred, directly or indirectly, from a transaction with a person who is subject in a foreign country or state, other than a state which requires mandatory unitary reporting, to a tax on or measured by net income with respect to such item; or

(ii) any item of intangible expense or cost paid, accrued, or incurred, directly or indirectly, if the taxpayer can establish, based on a preponderance of the evidence, both of the following:

(a) the person during the same taxable year paid, accrued, or incurred, the intangible expense or cost to a person that is not a related member, and

(b) the transaction giving rise to the intangible expense or cost between the taxpayer and the person did not have as a principal purpose the avoidance of Illinois income tax, and is paid pursuant to a contract or agreement that reflects arm's-length terms; or

(iii) any item of intangible expense or cost paid, accrued, or incurred, directly or indirectly, from a transaction with a person if the taxpayer establishes by clear and convincing evidence, that the adjustments are unreasonable; or if the taxpayer and the Director agree in writing to the application or use of an alternative method of apportionment under Section 304(f);

Nothing in this subsection shall preclude the Director from making any other adjustment otherwise allowed under Section 404 of this Act for any tax year beginning after the effective date of this amendment provided such adjustment is made pursuant to regulation adopted by the Department and such regulations provide methods and standards by which the Department will utilize its authority under Section 404 of this Act;

(D-19) For taxable years ending on or after December 31, 2008, an amount equal to the amount of insurance premium expenses and costs otherwise allowed as a deduction in computing base income, and that were paid, accrued, or incurred, directly or indirectly, to a person who would be a member of the same unitary business group but for the fact that the person is prohibited under Section 1501(a)(27) from being included in the unitary business group because he or she is ordinarily required to apportion business income under different subsections of Section 304. The addition modification required by this subparagraph shall be reduced to the extent that dividends were included in base income of the unitary group for the same taxable year and received by the taxpayer or by a member of the taxpayer's unitary business group (including amounts included in gross income under Sections 951 through 964 of the Internal Revenue Code and amounts included in gross income under Section 78 of the Internal Revenue Code) with respect to the stock of the same person to whom the premiums and costs were directly or indirectly paid, incurred, or accrued. The preceding sentence does not apply to the extent that the same dividends caused a reduction to the addition modification required under Section 203(a)(2)(D-17) or Section 203(a)(2)(D-18) of this Act.

(D-20) For taxable years beginning on or after January 1, 2002 and ending on or before December 31, 2006, in the case of a distribution from a qualified tuition program under Section 529 of the Internal Revenue Code, other than (i) a distribution from a College Savings Pool created under Section 16.5 of the State Treasurer Act or (ii) a distribution from the Illinois Prepaid Tuition Trust Fund, an amount equal to the amount excluded from gross income under Section 529(c)(3)(B). For taxable years beginning on or after January 1, 2007, in the case of a distribution from a qualified tuition program under Section 529 of the Internal Revenue Code, other than (i) a distribution from a College Savings Pool created under Section 16.5 of the State Treasurer Act, (ii) a distribution from the Illinois Prepaid Tuition Trust Fund, or (iii) a distribution from a qualified tuition program under Section 529 of the Internal Revenue Code that (I) adopts and determines that its offering materials comply with the College Savings Plans Network's disclosure principles and (II) has made reasonable efforts to inform in-state residents of the existence of in-state qualified tuition programs by informing Illinois residents directly and, where applicable, to inform financial intermediaries distributing the program to inform in-state residents of the existence of in-state qualified tuition programs at least annually, an amount equal to the amount excluded from gross income under Section 529(c)(3)(B).

For the purposes of this subparagraph (D-20), a qualified tuition program has made reasonable efforts if it makes disclosures (which may use the term "in-state program" or "in-state plan" and need not specifically refer to Illinois or its qualified programs by name) (i) directly to prospective participants in its offering materials or makes a public disclosure, such as a website posting; and (ii) where applicable, to intermediaries selling the out-of-state program in the same manner that the out-of-state program distributes its offering materials;

(D-21) For taxable years beginning on or after January 1, 2007, in the case of transfer of moneys from a qualified tuition program under Section 529 of the Internal Revenue Code that is administered by the State to an out-of-state program, an amount equal to the amount of moneys previously deducted from base income under subsection (a)(2)(Y) of this Section;

(D-22) For taxable years beginning on or after January 1, 2009, in the case of a nonqualified withdrawal or refund of moneys from a qualified tuition program under Section 529 of the Internal Revenue Code administered by the State that is not used for qualified expenses at an eligible education institution, an amount equal to the contribution component of the nonqualified withdrawal or refund that was previously deducted from base income under subsection (a)(2)(y) of this Section, provided that the withdrawal or refund did not result from the beneficiary's death or disability;

(D-23) An amount equal to the credit allowable to the taxpayer under Section 218(a) of this Act, determined without regard to Section 218(c) of this Act;

(D-24) For taxable years beginning on or after January 1, 2017, an amount equal to the deduction allowed under Section 199 of the Internal Revenue Code for the taxable year;

and by deducting from the total so obtained the sum of the following amounts:

(E) For taxable years ending before December 31, 2001, any amount included in such total in respect of any compensation (including but not limited to any compensation paid or accrued to a serviceman while a prisoner of war or missing in action) paid to a resident by reason of being on active duty in the Armed Forces of the United States and in respect of any compensation paid or accrued to a resident who as a governmental employee was a prisoner of war or missing in action, and in respect of any compensation paid to a resident in 1971 or thereafter for annual training performed pursuant to Sections 502 and 503, Title 32, United States Code as a member of the Illinois National Guard or, beginning with taxable years ending on or after December 31, 2007, the National Guard of any other state. For taxable years ending on or after December 31, 2001, any amount included in such total in respect of any compensation (including but not limited to any compensation paid or accrued to a serviceman while a prisoner of war or missing in action) paid to a resident by reason of being a member of any component of the Armed Forces of the United States and in respect of any compensation paid or accrued to a resident who as a governmental employee was a prisoner of war or missing in action, and in respect of any compensation paid to a resident in 2001 or thereafter by reason of being a member of the Illinois National Guard or, beginning with taxable years ending on or after December 31, 2007, the National Guard of any other state. The provisions of this subparagraph (E) are exempt from the provisions of Section 250;

(F) An amount equal to all amounts included in such total pursuant to the provisions of Sections 402(a), 402(c), 403(a), 403(b), 406(a), 407(a), and 408 of the Internal Revenue Code, or included in such total as distributions under the provisions of any retirement or disability plan for employees of any governmental agency or unit, or retirement payments to retired partners, which payments are excluded in computing net earnings from self employment by Section 1402 of the Internal Revenue Code and regulations adopted pursuant thereto;

(G) The valuation limitation amount;

(H) An amount equal to the amount of any tax imposed by this Act which was refunded to the taxpayer and included in such total for the taxable year;

(I) An amount equal to all amounts included in such total pursuant to the provisions of Section 111 of the Internal Revenue Code as a recovery of items previously deducted from adjusted gross income in the computation of taxable income;

(J) An amount equal to those dividends included in such total which were paid by a corporation which conducts business operations in a River Edge Redevelopment Zone or zones created under the River Edge Redevelopment Zone Act, and conducts substantially all of its operations in a River Edge Redevelopment Zone or zones. This subparagraph (J) is exempt from the provisions of Section 250;

(K) An amount equal to those dividends included in such total that were paid by a corporation that conducts business operations in a federally designated Foreign Trade Zone or Sub-Zone and that is designated a High Impact Business located in Illinois; provided that dividends eligible for the deduction provided in subparagraph (J) of paragraph (2) of this subsection shall not be eligible for the deduction provided under this subparagraph (K);

(L) For taxable years ending after December 31, 1983, an amount equal to all social security benefits and railroad retirement benefits included in such total pursuant to Sections 72(r) and 86 of the Internal Revenue Code;

(M) With the exception of any amounts subtracted under subparagraph (N), an amount equal to the sum of all amounts disallowed as deductions by (i) Sections 171(a) (2), and 265(2) of the Internal Revenue Code, and all amounts of expenses allocable to interest and disallowed as deductions by Section 265(1) of the Internal Revenue Code; and (ii) for taxable years ending on or after August 13, 1999, Sections 171(a)(2), 265, 280C, and 832(b)(5)(B)(i) of the Internal Revenue Code, plus, for taxable years ending on or after December 31, 2011, Section 45G(e)(3) of the Internal Revenue Code and, for taxable years ending on or after December 31, 2008, any amount included in gross income under Section 87 of the Internal Revenue Code; the provisions of this subparagraph are exempt from the provisions of Section 250;

(N) An amount equal to all amounts included in such total which are exempt from taxation by this State either by reason of its statutes or Constitution or by reason of the Constitution, treaties or statutes of the United States; provided that, in the case of any statute of this State that exempts income derived from bonds or other obligations from the tax imposed under this Act, the amount exempted shall be the interest net of bond premium amortization;

(O) An amount equal to any contribution made to a job training project established pursuant to the Tax Increment Allocation Redevelopment Act;

(P) An amount equal to the amount of the deduction used to compute the federal income tax credit for restoration of substantial amounts held under claim of right for the taxable year pursuant to Section 1341 of the Internal Revenue Code or of any itemized deduction taken from adjusted gross income in the computation of taxable income for restoration of substantial amounts held under claim of right for the taxable year;

(Q) An amount equal to any amounts included in such total, received by the taxpayer as an acceleration in the payment of life, endowment or annuity benefits in advance of the time they would otherwise be payable as an indemnity for a terminal illness;

(R) An amount equal to the amount of any federal or State bonus paid to veterans of the Persian Gulf War;

(S) An amount, to the extent included in adjusted gross income, equal to the amount of a contribution made in the taxable year on behalf of the taxpayer to a medical care savings account established under the Medical Care Savings Account Act or the Medical Care Savings Account Act of 2000 to the extent the contribution is accepted by the account administrator as provided in that Act;

(T) An amount, to the extent included in adjusted gross income, equal to the amount of interest earned in the taxable year on a medical care savings account established under the Medical Care Savings Account Act or the Medical Care Savings Account Act of 2000 on behalf of the taxpayer, other than interest added pursuant to item (D-5) of this paragraph (2);

(U) For one taxable year beginning on or after January 1, 1994, an amount equal to the total amount of tax imposed and paid under subsections (a) and (b) of Section 201 of this Act on grant amounts received by the taxpayer under the Nursing Home Grant Assistance Act during the taxpayer's taxable years 1992 and 1993;

(V) Beginning with tax years ending on or after December 31, 1995 and ending with tax years ending on or before December 31, 2004, an amount equal to the amount paid by a taxpayer who is a self-employed taxpayer, a partner of a partnership, or a shareholder in a Subchapter S corporation for health insurance or long-term care insurance for that taxpayer or that taxpayer's spouse or dependents, to the extent that the amount paid for that health insurance or long-term care insurance may be deducted under Section 213 of the Internal Revenue Code, has not been deducted on the federal income tax return of the taxpayer, and does not exceed the taxable income attributable to that taxpayer's income, self-employment income, or Subchapter S corporation income; except that no deduction shall be allowed under this item (V) if the taxpayer is eligible to participate in any health insurance or long-term care insurance plan of an employer of the taxpayer or the taxpayer's spouse. The amount of the health insurance and long-term care insurance subtracted under this item (V) shall be determined by multiplying total health insurance and long-term care insurance premiums paid by the taxpayer times a number that represents the fractional percentage of eligible medical expenses under Section 213 of the Internal Revenue Code of 1986 not actually deducted on the taxpayer's federal income tax return;

(W) For taxable years beginning on or after January 1, 1998, all amounts included in the taxpayer's federal gross income in the taxable year from amounts converted from a regular IRA to a Roth IRA. This paragraph is exempt from the provisions of Section 250;

(X) For taxable year 1999 and thereafter, an amount equal to the amount of any (i) distributions, to the extent includible in gross income for federal income tax purposes, made to the taxpayer because of his or her status as a victim of persecution for racial or religious reasons by Nazi Germany or any other Axis regime or as an heir of the victim and (ii) items of income, to the extent includible in gross income for federal income tax purposes, attributable to, derived from or in any way related to assets stolen from, hidden from, or otherwise lost to a victim of persecution for racial or religious reasons by Nazi Germany or any other Axis regime immediately prior to, during, and immediately after World War II, including, but not limited to, interest on the proceeds receivable as insurance under policies issued to a victim of persecution for racial or religious reasons by Nazi Germany or any other Axis regime by European insurance companies immediately prior to and during World War II; provided, however, this subtraction from federal adjusted gross income does not apply to assets acquired with such assets or with the proceeds from the sale of such assets; provided, further, this paragraph shall only apply to a taxpayer who was the first recipient of such assets after their recovery and who is a victim of persecution for racial or religious reasons by Nazi Germany or any other Axis regime or as an heir of the victim. The amount of and the eligibility for any public assistance, benefit, or similar entitlement is not affected by the inclusion of items (i) and (ii) of this paragraph in gross income for federal income tax purposes. This paragraph is exempt from the provisions of Section 250;

(Y) For taxable years beginning on or after January 1, 2002 and ending on or before December 31, 2004, moneys contributed in the taxable year to a College Savings Pool account under Section 16.5 of the State Treasurer Act, except that amounts excluded from gross income under Section 529(c)(3)(C)(i) of the Internal Revenue Code shall not be considered moneys contributed under this subparagraph (Y). For taxable years beginning on or after January 1, 2005, a maximum of $10,000 contributed in the taxable year to (i) a College Savings Pool account under Section 16.5 of the State Treasurer Act or (ii) the Illinois Prepaid Tuition Trust Fund, except that amounts excluded from gross income under Section 529(c)(3)(C)(i) of the Internal Revenue Code shall not be considered moneys contributed under this subparagraph (Y). For purposes of this subparagraph, contributions made by an employer on behalf of an employee, or matching contributions made by an employee, shall be treated as made by the employee. This subparagraph (Y) is exempt from the provisions of Section 250;

(Z) For taxable years 2001 and thereafter, for the taxable year in which the bonus depreciation deduction is taken on the taxpayer's federal income tax return under subsection (k) of Section 168 of the Internal Revenue Code and for each applicable taxable year thereafter, an amount equal to "x", where:

(1) "y" equals the amount of the depreciation deduction taken for the taxable year on the taxpayer's federal income tax return on property for which the bonus depreciation deduction was taken in any year under subsection (k) of Section 168 of the Internal Revenue Code, but not including the bonus depreciation deduction;

(2) for taxable years ending on or before December 31, 2005, "x" equals "y" multiplied by 30 and then divided by 70 (or "y" multiplied by 0.429); and

(3) for taxable years ending after December 31, 2005:

(i) for property on which a bonus depreciation deduction of 30% of the adjusted basis was taken, "x" equals "y" multiplied by 30 and then divided by 70 (or "y" multiplied by 0.429); and

(ii) for property on which a bonus depreciation deduction of 50% of the adjusted basis was taken, "x" equals "y" multiplied by 1.0.

The aggregate amount deducted under this subparagraph in all taxable years for any one piece of property may not exceed the amount of the bonus depreciation deduction taken on that property on the taxpayer's federal income tax return under subsection (k) of Section 168 of the Internal Revenue Code. This subparagraph (Z) is exempt from the provisions of Section 250;

(AA) If the taxpayer sells, transfers, abandons, or otherwise disposes of property for which the taxpayer was required in any taxable year to make an addition modification under subparagraph (D-15), then an amount equal to that addition modification.

If the taxpayer continues to own property through the last day of the last tax year for which the taxpayer may claim a depreciation deduction for federal income tax purposes and for which the taxpayer was required in any taxable year to make an addition modification under subparagraph (D-15), then an amount equal to that addition modification.

The taxpayer is allowed to take the deduction under this subparagraph only once with respect to any one piece of property.

This subparagraph (AA) is exempt from the provisions of Section 250;

(BB) Any amount included in adjusted gross income, other than salary, received by a driver in a ridesharing arrangement using a motor vehicle;

(CC) The amount of (i) any interest income (net of the deductions allocable thereto) taken into account for the taxable year with respect to a transaction with a taxpayer that is required to make an addition modification with respect to such transaction under Section 203(a)(2)(D-17), 203(b)(2)(E-12), 203(c)(2)(G-12), or 203(d)(2)(D-7), but not to exceed the amount of that addition modification, and (ii) any income from intangible property (net of the deductions allocable thereto) taken into account for the taxable year with respect to a transaction with a taxpayer that is required to make an addition modification with respect to such transaction under Section 203(a)(2)(D-18), 203(b)(2)(E-13), 203(c)(2)(G-13), or 203(d)(2)(D-8), but not to exceed the amount of that addition modification. This subparagraph (CC) is exempt from the provisions of Section 250;

(DD) An amount equal to the interest income taken into account for the taxable year (net of the deductions allocable thereto) with respect to transactions with (i) a foreign person who would be a member of the taxpayer's unitary business group but for the fact that the foreign person's business activity outside the United States is 80% or more of that person's total business activity and (ii) for taxable years ending on or after December 31, 2008, to a person who would be a member of the same unitary business group but for the fact that the person is prohibited under Section 1501(a)(27) from being included in the unitary business group because he or she is ordinarily required to apportion business income under different subsections of Section 304, but not to exceed the addition modification required to be made for the same taxable year under Section 203(a)(2)(D-17) for interest paid, accrued, or incurred, directly or indirectly, to the same person. This subparagraph (DD) is exempt from the provisions of Section 250;

(EE) An amount equal to the income from intangible property taken into account for the taxable year (net of the deductions allocable thereto) with respect to transactions with (i) a foreign person who would be a member of the taxpayer's unitary business group but for the fact that the foreign person's business activity outside the United States is 80% or more of that person's total business activity and (ii) for taxable years ending on or after December 31, 2008, to a person who would be a member of the same unitary business group but for the fact that the person is prohibited under Section 1501(a)(27) from being included in the unitary business group because he or she is ordinarily required to apportion business income under different subsections of Section 304, but not to exceed the addition modification required to be made for the same taxable year under Section 203(a)(2)(D-18) for intangible expenses and costs paid, accrued, or incurred, directly or indirectly, to the same foreign person. This subparagraph (EE) is exempt from the provisions of Section 250;

(FF) An amount equal to any amount awarded to the taxpayer during the taxable year by the Court of Claims under subsection (c) of Section 8 of the Court of Claims Act for time unjustly served in a State prison. This subparagraph (FF) is exempt from the provisions of Section 250; and

(GG) For taxable years ending on or after December 31, 2011, in the case of a taxpayer who was required to add back any insurance premiums under Section 203(a)(2)(D-19), such taxpayer may elect to subtract that part of a reimbursement received from the insurance company equal to the amount of the expense or loss (including expenses incurred by the insurance company) that would have been taken into account as a deduction for federal income tax purposes if the expense or loss had been uninsured. If a taxpayer makes the election provided for by this subparagraph (GG), the insurer to which the premiums were paid must add back to income the amount subtracted by the taxpayer pursuant to this subparagraph (GG). This subparagraph (GG) is exempt from the provisions of Section 250.

(b) Corporations.

(1) In general. In the case of a corporation, base income means an amount equal to the taxpayer's taxable income for the taxable year as modified by paragraph (2).

(2) Modifications. The taxable income referred to in paragraph (1) shall be modified by adding thereto the sum of the following amounts:

(A) An amount equal to all amounts paid or accrued to the taxpayer as interest and all distributions received from regulated investment companies during the taxable year to the extent excluded from gross income in the computation of taxable income;

(B) An amount equal to the amount of tax imposed by this Act to the extent deducted from gross income in the computation of taxable income for the taxable year;

(C) In the case of a regulated investment company, an amount equal to the excess of (i) the net long-term capital gain for the taxable year, over (ii) the amount of the capital gain dividends designated as such in accordance with Section 852(b)(3)(C) of the Internal Revenue Code and any amount designated under Section 852(b)(3)(D) of the Internal Revenue Code, attributable to the taxable year (this amendatory Act of 1995 (Public Act 89-89) is declarative of existing law and is not a new enactment);

(D) The amount of any net operating loss deduction taken in arriving at taxable income, other than a net operating loss carried forward from a taxable year ending prior to December 31, 1986;

(E) For taxable years in which a net operating loss carryback or carryforward from a taxable year ending prior to December 31, 1986 is an element of taxable income under paragraph (1) of subsection (e) or subparagraph (E) of paragraph (2) of subsection (e), the amount by which addition modifications other than those provided by this subparagraph (E) exceeded subtraction modifications in such earlier taxable year, with the following limitations applied in the order that they are listed:

(i) the addition modification relating to the net operating loss carried back or forward to the taxable year from any taxable year ending prior to December 31, 1986 shall be reduced by the amount of addition modification under this subparagraph (E) which related to that net operating loss and which was taken into account in calculating the base income of an earlier taxable year, and

(ii) the addition modification relating to the net operating loss carried back or forward to the taxable year from any taxable year ending prior to December 31, 1986 shall not exceed the amount of such carryback or carryforward;

For taxable years in which there is a net operating loss carryback or carryforward from more than one other taxable year ending prior to December 31, 1986, the addition modification provided in this subparagraph (E) shall be the sum of the amounts computed independently under the preceding provisions of this subparagraph (E) for each such taxable year;

(E-5) For taxable years ending after December 31, 1997, an amount equal to any eligible remediation costs that the corporation deducted in computing adjusted gross income and for which the corporation claims a credit under subsection (l) of Section 201;

(E-10) For taxable years 2001 and thereafter, an amount equal to the bonus depreciation deduction taken on the taxpayer's federal income tax return for the taxable year under subsection (k) of Section 168 of the Internal Revenue Code;

(E-11) If the taxpayer sells, transfers, abandons, or otherwise disposes of property for which the taxpayer was required in any taxable year to make an addition modification under subparagraph (E-10), then an amount equal to the aggregate amount of the deductions taken in all taxable years under subparagraph (T) with respect to that property.

If the taxpayer continues to own property through the last day of the last tax year for which the taxpayer may claim a depreciation deduction for federal income tax purposes and for which the taxpayer was allowed in any taxable year to make a subtraction modification under subparagraph (T), then an amount equal to that subtraction modification.

The taxpayer is required to make the addition modification under this subparagraph only once with respect to any one piece of property;

(E-12) An amount equal to the amount otherwise allowed as a deduction in computing base income for interest paid, accrued, or incurred, directly or indirectly, (i) for taxable years ending on or after December 31, 2004, to a foreign person who would be a member of the same unitary business group but for the fact the foreign person's business activity outside the United States is 80% or more of the foreign person's total business activity and (ii) for taxable years ending on or after December 31, 2008, to a person who would be a member of the same unitary business group but for the fact that the person is prohibited under Section 1501(a)(27) from being included in the unitary business group because he or she is ordinarily required to apportion business income under different subsections of Section 304. The addition modification required by this subparagraph shall be reduced to the extent that dividends were included in base income of the unitary group for the same taxable year and received by the taxpayer or by a member of the taxpayer's unitary business group (including amounts included in gross income pursuant to Sections 951 through 964 of the Internal Revenue Code and amounts included in gross income under Section 78 of the Internal Revenue Code) with respect to the stock of the same person to whom the interest was paid, accrued, or incurred.

This paragraph shall not apply to the following:

(i) an item of interest paid, accrued, or incurred, directly or indirectly, to a person who is subject in a foreign country or state, other than a state which requires mandatory unitary reporting, to a tax on or measured by net income with respect to such interest; or

(ii) an item of interest paid, accrued, or incurred, directly or indirectly, to a person if the taxpayer can establish, based on a preponderance of the evidence, both of the following:

(a) the person, during the same taxable year, paid, accrued, or incurred, the interest to a person that is not a related member, and

(b) the transaction giving rise to the interest expense between the taxpayer and the person did not have as a principal purpose the avoidance of Illinois income tax, and is paid pursuant to a contract or agreement that reflects an arm's-length interest rate and terms; or

(iii) the taxpayer can establish, based on clear and convincing evidence, that the interest paid, accrued, or incurred relates to a contract or agreement entered into at arm's-length rates and terms and the principal purpose for the payment is not federal or Illinois tax avoidance; or

(iv) an item of interest paid, accrued, or incurred, directly or indirectly, to a person if the taxpayer establishes by clear and convincing evidence that the adjustments are unreasonable; or if the taxpayer and the Director agree in writing to the application or use of an alternative method of apportionment under Section 304(f).

Nothing in this subsection shall preclude the Director from making any other adjustment otherwise allowed under Section 404 of this Act for any tax year beginning after the effective date of this amendment provided such adjustment is made pursuant to regulation adopted by the Department and such regulations provide methods and standards by which the Department will utilize its authority under Section 404 of this Act;

(E-13) An amount equal to the amount of intangible expenses and costs otherwise allowed as a deduction in computing base income, and that were paid, accrued, or incurred, directly or indirectly, (i) for taxable years ending on or after December 31, 2004, to a foreign person who would be a member of the same unitary business group but for the fact that the foreign person's business activity outside the United States is 80% or more of that person's total business activity and (ii) for taxable years ending on or after December 31, 2008, to a person who would be a member of the same unitary business group but for the fact that the person is prohibited under Section 1501(a)(27) from being included in the unitary business group because he or she is ordinarily required to apportion business income under different subsections of Section 304. The addition modification required by this subparagraph shall be reduced to the extent that dividends were included in base income of the unitary group for the same taxable year and received by the taxpayer or by a member of the taxpayer's unitary business group (including amounts included in gross income pursuant to Sections 951 through 964 of the Internal Revenue Code and amounts included in gross income under Section 78 of the Internal Revenue Code) with respect to the stock of the same person to whom the intangible expenses and costs were directly or indirectly paid, incurred, or accrued. The preceding sentence shall not apply to the extent that the same dividends caused a reduction to the addition modification required under Section 203(b)(2)(E-12) of this Act. As used in this subparagraph, the term "intangible expenses and costs" includes (1) expenses, losses, and costs for, or related to, the direct or indirect acquisition, use, maintenance or management, ownership, sale, exchange, or any other disposition of intangible property; (2) losses incurred, directly or indirectly, from factoring transactions or discounting transactions; (3) royalty, patent, technical, and copyright fees; (4) licensing fees; and (5) other similar expenses and costs. For purposes of this subparagraph, "intangible property" includes patents, patent applications, trade names, trademarks, service marks, copyrights, mask works, trade secrets, and similar types of intangible assets.

This paragraph shall not apply to the following:

(i) any item of intangible expenses or costs paid, accrued, or incurred, directly or indirectly, from a transaction with a person who is subject in a foreign country or state, other than a state which requires mandatory unitary reporting, to a tax on or measured by net income with respect to such item; or

(ii) any item of intangible expense or cost paid, accrued, or incurred, directly or indirectly, if the taxpayer can establish, based on a preponderance of the evidence, both of the following:

(a) the person during the same taxable year paid, accrued, or incurred, the intangible expense or cost to a person that is not a related member, and

(b) the transaction giving rise to the intangible expense or cost between the taxpayer and the person did not have as a principal purpose the avoidance of Illinois income tax, and is paid pursuant to a contract or agreement that reflects arm's-length terms; or

(iii) any item of intangible expense or cost