101ST GENERAL ASSEMBLY
State of Illinois
2019 and 2020
HB5870

 

Introduced , by Rep. Jaime M. Andrade, Jr.

 

SYNOPSIS AS INTRODUCED:
 
35 ILCS 5/201

    Amends the Illinois Income Tax Act. Provides that, for taxable years that end on or after December 31, 2020 and end prior to December 31, 2022, there is no maximum amount for the education expense credit if the qualified pupil attends a school that is subject to in-person attendance restrictions as a result of COVID-19. Provides that, if the qualified pupil attends a school that is subject to in-person attendance restrictions as a result of COVID-19, the term "qualified education expense" also includes school supplies, computers and tablets, and increased internet access to facilitate remote learning. Effective immediately.


LRB101 22001 HLH 73017 b

FISCAL NOTE ACT MAY APPLY

 

 

A BILL FOR

 

HB5870LRB101 22001 HLH 73017 b

1    AN ACT concerning revenue.
 
2    Be it enacted by the People of the State of Illinois,
3represented in the General Assembly:
 
4    Section 5. The Illinois Income Tax Act is amended by
5changing Section 201 as follows:
 
6    (35 ILCS 5/201)
7    (Text of Section before amendment by P.A. 101-8)
8    Sec. 201. Tax imposed.
9    (a) In general. A tax measured by net income is hereby
10imposed on every individual, corporation, trust and estate for
11each taxable year ending after July 31, 1969 on the privilege
12of earning or receiving income in or as a resident of this
13State. Such tax shall be in addition to all other occupation or
14privilege taxes imposed by this State or by any municipal
15corporation or political subdivision thereof.
16    (b) Rates. The tax imposed by subsection (a) of this
17Section shall be determined as follows, except as adjusted by
18subsection (d-1):
19        (1) In the case of an individual, trust or estate, for
20    taxable years ending prior to July 1, 1989, an amount equal
21    to 2 1/2% of the taxpayer's net income for the taxable
22    year.
23        (2) In the case of an individual, trust or estate, for

 

 

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

 

 

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1    (ii) 3.75% of the taxpayer's net income for the period
2    after December 31, 2014, as calculated under Section 202.5.
3        (5.2) In the case of an individual, trust, or estate,
4    for taxable years beginning on or after January 1, 2015,
5    and ending prior to July 1, 2017, an amount equal to 3.75%
6    of the taxpayer's net income for the taxable year.
7        (5.3) In the case of an individual, trust, or estate,
8    for taxable years beginning prior to July 1, 2017, and
9    ending after June 30, 2017, an amount equal to the sum of
10    (i) 3.75% of the taxpayer's net income for the period prior
11    to July 1, 2017, as calculated under Section 202.5, and
12    (ii) 4.95% of the taxpayer's net income for the period
13    after June 30, 2017, as calculated under Section 202.5.
14        (5.4) In the case of an individual, trust, or estate,
15    for taxable years beginning on or after July 1, 2017, an
16    amount equal to 4.95% of the taxpayer's net income for the
17    taxable year.
18        (6) In the case of a corporation, for taxable years
19    ending prior to July 1, 1989, an amount equal to 4% of the
20    taxpayer's net income for the taxable year.
21        (7) In the case of a corporation, for taxable years
22    beginning prior to July 1, 1989 and ending after June 30,
23    1989, an amount equal to the sum of (i) 4% of the
24    taxpayer's net income for the period prior to July 1, 1989,
25    as calculated under Section 202.3, and (ii) 4.8% of the
26    taxpayer's net income for the period after June 30, 1989,

 

 

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1    as calculated under Section 202.3.
2        (8) In the case of a corporation, for taxable years
3    beginning after June 30, 1989, and ending prior to January
4    1, 2011, an amount equal to 4.8% of the taxpayer's net
5    income for the taxable year.
6        (9) In the case of a corporation, for taxable years
7    beginning prior to January 1, 2011, and ending after
8    December 31, 2010, an amount equal to the sum of (i) 4.8%
9    of the taxpayer's net income for the period prior to
10    January 1, 2011, as calculated under Section 202.5, and
11    (ii) 7% of the taxpayer's net income for the period after
12    December 31, 2010, as calculated under Section 202.5.
13        (10) In the case of a corporation, for taxable years
14    beginning on or after January 1, 2011, and ending prior to
15    January 1, 2015, an amount equal to 7% of the taxpayer's
16    net income for the taxable year.
17        (11) In the case of a corporation, for taxable years
18    beginning prior to January 1, 2015, and ending after
19    December 31, 2014, an amount equal to the sum of (i) 7% of
20    the taxpayer's net income for the period prior to January
21    1, 2015, as calculated under Section 202.5, and (ii) 5.25%
22    of the taxpayer's net income for the period after December
23    31, 2014, as calculated under Section 202.5.
24        (12) In the case of a corporation, for taxable years
25    beginning on or after January 1, 2015, and ending prior to
26    July 1, 2017, an amount equal to 5.25% of the taxpayer's

 

 

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1    net income for the taxable year.
2        (13) In the case of a corporation, for taxable years
3    beginning prior to July 1, 2017, and ending after June 30,
4    2017, an amount equal to the sum of (i) 5.25% of the
5    taxpayer's net income for the period prior to July 1, 2017,
6    as calculated under Section 202.5, and (ii) 7% of the
7    taxpayer's net income for the period after June 30, 2017,
8    as calculated under Section 202.5.
9        (14) In the case of a corporation, for taxable years
10    beginning on or after July 1, 2017, an amount equal to 7%
11    of the taxpayer's net income for the taxable year.
12    The rates under this subsection (b) are subject to the
13provisions of Section 201.5.
14    (b-5) Surcharge; sale or exchange of assets, properties,
15and intangibles of organization gaming licensees. For each of
16taxable years 2019 through 2027, a surcharge is imposed on all
17taxpayers on income arising from the sale or exchange of
18capital assets, depreciable business property, real property
19used in the trade or business, and Section 197 intangibles (i)
20of an organization licensee under the Illinois Horse Racing Act
21of 1975 and (ii) of an organization gaming licensee under the
22Illinois Gambling Act. The amount of the surcharge is equal to
23the amount of federal income tax liability for the taxable year
24attributable to those sales and exchanges. The surcharge
25imposed shall not apply if:
26        (1) the organization gaming license, organization

 

 

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1    license, or racetrack property is transferred as a result
2    of any of the following:
3            (A) bankruptcy, a receivership, or a debt
4        adjustment initiated by or against the initial
5        licensee or the substantial owners of the initial
6        licensee;
7            (B) cancellation, revocation, or termination of
8        any such license by the Illinois Gaming Board or the
9        Illinois Racing Board;
10            (C) a determination by the Illinois Gaming Board
11        that transfer of the license is in the best interests
12        of Illinois gaming;
13            (D) the death of an owner of the equity interest in
14        a licensee;
15            (E) the acquisition of a controlling interest in
16        the stock or substantially all of the assets of a
17        publicly traded company;
18            (F) a transfer by a parent company to a wholly
19        owned subsidiary; or
20            (G) the transfer or sale to or by one person to
21        another person where both persons were initial owners
22        of the license when the license was issued; or
23        (2) the controlling interest in the organization
24    gaming license, organization license, or racetrack
25    property is transferred in a transaction to lineal
26    descendants in which no gain or loss is recognized or as a

 

 

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1    result of a transaction in accordance with Section 351 of
2    the Internal Revenue Code in which no gain or loss is
3    recognized; or
4        (3) live horse racing was not conducted in 2010 at a
5    racetrack located within 3 miles of the Mississippi River
6    under a license issued pursuant to the Illinois Horse
7    Racing Act of 1975.
8    The transfer of an organization gaming license,
9organization license, or racetrack property by a person other
10than the initial licensee to receive the organization gaming
11license is not subject to a surcharge. The Department shall
12adopt rules necessary to implement and administer this
13subsection.
14    (c) Personal Property Tax Replacement Income Tax.
15Beginning on July 1, 1979 and thereafter, in addition to such
16income tax, there is also hereby imposed the Personal Property
17Tax Replacement Income Tax measured by net income on every
18corporation (including Subchapter S corporations), partnership
19and trust, for each taxable year ending after June 30, 1979.
20Such taxes are imposed on the privilege of earning or receiving
21income in or as a resident of this State. The Personal Property
22Tax Replacement Income Tax shall be in addition to the income
23tax imposed by subsections (a) and (b) of this Section and in
24addition to all other occupation or privilege taxes imposed by
25this State or by any municipal corporation or political
26subdivision thereof.

 

 

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1    (d) Additional Personal Property Tax Replacement Income
2Tax Rates. The personal property tax replacement income tax
3imposed by this subsection and subsection (c) of this Section
4in the case of a corporation, other than a Subchapter S
5corporation and except as adjusted by subsection (d-1), shall
6be an additional amount equal to 2.85% of such taxpayer's net
7income for the taxable year, except that beginning on January
81, 1981, and thereafter, the rate of 2.85% specified in this
9subsection shall be reduced to 2.5%, and in the case of a
10partnership, trust or a Subchapter S corporation shall be an
11additional amount equal to 1.5% of such taxpayer's net income
12for the taxable year.
13    (d-1) Rate reduction for certain foreign insurers. In the
14case of a foreign insurer, as defined by Section 35A-5 of the
15Illinois Insurance Code, whose state or country of domicile
16imposes on insurers domiciled in Illinois a retaliatory tax
17(excluding any insurer whose premiums from reinsurance assumed
18are 50% or more of its total insurance premiums as determined
19under paragraph (2) of subsection (b) of Section 304, except
20that for purposes of this determination premiums from
21reinsurance do not include premiums from inter-affiliate
22reinsurance arrangements), beginning with taxable years ending
23on or after December 31, 1999, the sum of the rates of tax
24imposed by subsections (b) and (d) shall be reduced (but not
25increased) to the rate at which the total amount of tax imposed
26under this Act, net of all credits allowed under this Act,

 

 

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

 

 

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1    no event increase the rates imposed under subsections (b)
2    and (d).
3        (2) Any reduction in the rates of tax imposed by this
4    subsection shall be applied first against the rates imposed
5    by subsection (b) and only after the tax imposed by
6    subsection (a) net of all credits allowed under this
7    Section other than the credit allowed under subsection (i)
8    has been reduced to zero, against the rates imposed by
9    subsection (d).
10    This subsection (d-1) is exempt from the provisions of
11Section 250.
12    (e) Investment credit. A taxpayer shall be allowed a credit
13against the Personal Property Tax Replacement Income Tax for
14investment in qualified property.
15        (1) A taxpayer shall be allowed a credit equal to .5%
16    of the basis of qualified property placed in service during
17    the taxable year, provided such property is placed in
18    service on or after July 1, 1984. There shall be allowed an
19    additional credit equal to .5% of the basis of qualified
20    property placed in service during the taxable year,
21    provided such property is placed in service on or after
22    July 1, 1986, and the taxpayer's base employment within
23    Illinois has increased by 1% or more over the preceding
24    year as determined by the taxpayer's employment records
25    filed with the Illinois Department of Employment Security.
26    Taxpayers who are new to Illinois shall be deemed to have

 

 

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1    met the 1% growth in base employment for the first year in
2    which they file employment records with the Illinois
3    Department of Employment Security. The provisions added to
4    this Section by Public Act 85-1200 (and restored by Public
5    Act 87-895) shall be construed as declaratory of existing
6    law and not as a new enactment. If, in any year, the
7    increase in base employment within Illinois over the
8    preceding year is less than 1%, the additional credit shall
9    be limited to that percentage times a fraction, the
10    numerator of which is .5% and the denominator of which is
11    1%, but shall not exceed .5%. The investment credit shall
12    not be allowed to the extent that it would reduce a
13    taxpayer's liability in any tax year below zero, nor may
14    any credit for qualified property be allowed for any year
15    other than the year in which the property was placed in
16    service in Illinois. For tax years ending on or after
17    December 31, 1987, and on or before December 31, 1988, the
18    credit shall be allowed for the tax year in which the
19    property is placed in service, or, if the amount of the
20    credit exceeds the tax liability for that year, whether it
21    exceeds the original liability or the liability as later
22    amended, such excess may be carried forward and applied to
23    the tax liability of the 5 taxable years following the
24    excess credit years if the taxpayer (i) makes investments
25    which cause the creation of a minimum of 2,000 full-time
26    equivalent jobs in Illinois, (ii) is located in an

 

 

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1    enterprise zone established pursuant to the Illinois
2    Enterprise Zone Act and (iii) is certified by the
3    Department of Commerce and Community Affairs (now
4    Department of Commerce and Economic Opportunity) as
5    complying with the requirements specified in clause (i) and
6    (ii) by July 1, 1986. The Department of Commerce and
7    Community Affairs (now Department of Commerce and Economic
8    Opportunity) shall notify the Department of Revenue of all
9    such certifications immediately. For tax years ending
10    after December 31, 1988, the credit shall be allowed for
11    the tax year in which the property is placed in service,
12    or, if the amount of the credit exceeds the tax liability
13    for that year, whether it exceeds the original liability or
14    the liability as later amended, such excess may be carried
15    forward and applied to the tax liability of the 5 taxable
16    years following the excess credit years. The credit shall
17    be applied to the earliest year for which there is a
18    liability. If there is credit from more than one tax year
19    that is available to offset a liability, earlier credit
20    shall be applied first.
21        (2) The term "qualified property" means property
22    which:
23            (A) is tangible, whether new or used, including
24        buildings and structural components of buildings and
25        signs that are real property, but not including land or
26        improvements to real property that are not a structural

 

 

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1        component of a building such as landscaping, sewer
2        lines, local access roads, fencing, parking lots, and
3        other appurtenances;
4            (B) is depreciable pursuant to Section 167 of the
5        Internal Revenue Code, except that "3-year property"
6        as defined in Section 168(c)(2)(A) of that Code is not
7        eligible for the credit provided by this subsection
8        (e);
9            (C) is acquired by purchase as defined in Section
10        179(d) of the Internal Revenue Code;
11            (D) is used in Illinois by a taxpayer who is
12        primarily engaged in manufacturing, or in mining coal
13        or fluorite, or in retailing, or was placed in service
14        on or after July 1, 2006 in a River Edge Redevelopment
15        Zone established pursuant to the River Edge
16        Redevelopment Zone Act; and
17            (E) has not previously been used in Illinois in
18        such a manner and by such a person as would qualify for
19        the credit provided by this subsection (e) or
20        subsection (f).
21        (3) For purposes of this subsection (e),
22    "manufacturing" means the material staging and production
23    of tangible personal property by procedures commonly
24    regarded as manufacturing, processing, fabrication, or
25    assembling which changes some existing material into new
26    shapes, new qualities, or new combinations. For purposes of

 

 

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1    this subsection (e) the term "mining" shall have the same
2    meaning as the term "mining" in Section 613(c) of the
3    Internal Revenue Code. For purposes of this subsection (e),
4    the term "retailing" means the sale of tangible personal
5    property for use or consumption and not for resale, or
6    services rendered in conjunction with the sale of tangible
7    personal property for use or consumption and not for
8    resale. For purposes of this subsection (e), "tangible
9    personal property" has the same meaning as when that term
10    is used in the Retailers' Occupation Tax Act, and, for
11    taxable years ending after December 31, 2008, does not
12    include the generation, transmission, or distribution of
13    electricity.
14        (4) The basis of qualified property shall be the basis
15    used to compute the depreciation deduction for federal
16    income tax purposes.
17        (5) If the basis of the property for federal income tax
18    depreciation purposes is increased after it has been placed
19    in service in Illinois by the taxpayer, the amount of such
20    increase shall be deemed property placed in service on the
21    date of such increase in basis.
22        (6) The term "placed in service" shall have the same
23    meaning as under Section 46 of the Internal Revenue Code.
24        (7) If during any taxable year, any property ceases to
25    be qualified property in the hands of the taxpayer within
26    48 months after being placed in service, or the situs of

 

 

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1    any qualified property is moved outside Illinois within 48
2    months after being placed in service, the Personal Property
3    Tax Replacement Income Tax for such taxable year shall be
4    increased. Such increase shall be determined by (i)
5    recomputing the investment credit which would have been
6    allowed for the year in which credit for such property was
7    originally allowed by eliminating such property from such
8    computation and, (ii) subtracting such recomputed credit
9    from the amount of credit previously allowed. For the
10    purposes of this paragraph (7), a reduction of the basis of
11    qualified property resulting from a redetermination of the
12    purchase price shall be deemed a disposition of qualified
13    property to the extent of such reduction.
14        (8) Unless the investment credit is extended by law,
15    the basis of qualified property shall not include costs
16    incurred after December 31, 2018, except for costs incurred
17    pursuant to a binding contract entered into on or before
18    December 31, 2018.
19        (9) Each taxable year ending before December 31, 2000,
20    a partnership may elect to pass through to its partners the
21    credits to which the partnership is entitled under this
22    subsection (e) for the taxable year. A partner may use the
23    credit allocated to him or her under this paragraph only
24    against the tax imposed in subsections (c) and (d) of this
25    Section. If the partnership makes that election, those
26    credits shall be allocated among the partners in the

 

 

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1    partnership in accordance with the rules set forth in
2    Section 704(b) of the Internal Revenue Code, and the rules
3    promulgated under that Section, and the allocated amount of
4    the credits shall be allowed to the partners for that
5    taxable year. The partnership shall make this election on
6    its Personal Property Tax Replacement Income Tax return for
7    that taxable year. The election to pass through the credits
8    shall be irrevocable.
9        For taxable years ending on or after December 31, 2000,
10    a partner that qualifies its partnership for a subtraction
11    under subparagraph (I) of paragraph (2) of subsection (d)
12    of Section 203 or a shareholder that qualifies a Subchapter
13    S corporation for a subtraction under subparagraph (S) of
14    paragraph (2) of subsection (b) of Section 203 shall be
15    allowed a credit under this subsection (e) equal to its
16    share of the credit earned under this subsection (e) during
17    the taxable year by the partnership or Subchapter S
18    corporation, determined in accordance with the
19    determination of income and distributive share of income
20    under Sections 702 and 704 and Subchapter S of the Internal
21    Revenue Code. This paragraph is exempt from the provisions
22    of Section 250.
23    (f) Investment credit; Enterprise Zone; River Edge
24Redevelopment Zone.
25        (1) A taxpayer shall be allowed a credit against the
26    tax imposed by subsections (a) and (b) of this Section for

 

 

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1    investment in qualified property which is placed in service
2    in an Enterprise Zone created pursuant to the Illinois
3    Enterprise Zone Act or, for property placed in service on
4    or after July 1, 2006, a River Edge Redevelopment Zone
5    established pursuant to the River Edge Redevelopment Zone
6    Act. For partners, shareholders of Subchapter S
7    corporations, and owners of limited liability companies,
8    if the liability company is treated as a partnership for
9    purposes of federal and State income taxation, there shall
10    be allowed a credit under this subsection (f) to be
11    determined in accordance with the determination of income
12    and distributive share of income under Sections 702 and 704
13    and Subchapter S of the Internal Revenue Code. The credit
14    shall be .5% of the basis for such property. The credit
15    shall be available only in the taxable year in which the
16    property is placed in service in the Enterprise Zone or
17    River Edge Redevelopment Zone and shall not be allowed to
18    the extent that it would reduce a taxpayer's liability for
19    the tax imposed by subsections (a) and (b) of this Section
20    to below zero. For tax years ending on or after December
21    31, 1985, the credit shall be allowed for the tax year in
22    which the property is placed in service, or, if the amount
23    of the credit exceeds the tax liability for that year,
24    whether it exceeds the original liability or the liability
25    as later amended, such excess may be carried forward and
26    applied to the tax liability of the 5 taxable years

 

 

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1    following the excess credit year. The credit shall be
2    applied to the earliest year for which there is a
3    liability. If there is credit from more than one tax year
4    that is available to offset a liability, the credit
5    accruing first in time shall be applied first.
6        (2) The term qualified property means property which:
7            (A) is tangible, whether new or used, including
8        buildings and structural components of buildings;
9            (B) is depreciable pursuant to Section 167 of the
10        Internal Revenue Code, except that "3-year property"
11        as defined in Section 168(c)(2)(A) of that Code is not
12        eligible for the credit provided by this subsection
13        (f);
14            (C) is acquired by purchase as defined in Section
15        179(d) of the Internal Revenue Code;
16            (D) is used in the Enterprise Zone or River Edge
17        Redevelopment Zone by the taxpayer; and
18            (E) has not been previously used in Illinois in
19        such a manner and by such a person as would qualify for
20        the credit provided by this subsection (f) or
21        subsection (e).
22        (3) The basis of qualified property shall be the basis
23    used to compute the depreciation deduction for federal
24    income tax purposes.
25        (4) If the basis of the property for federal income tax
26    depreciation purposes is increased after it has been placed

 

 

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1    in service in the Enterprise Zone or River Edge
2    Redevelopment Zone by the taxpayer, the amount of such
3    increase shall be deemed property placed in service on the
4    date of such increase in basis.
5        (5) The term "placed in service" shall have the same
6    meaning as under Section 46 of the Internal Revenue Code.
7        (6) If during any taxable year, any property ceases to
8    be qualified property in the hands of the taxpayer within
9    48 months after being placed in service, or the situs of
10    any qualified property is moved outside the Enterprise Zone
11    or River Edge Redevelopment Zone within 48 months after
12    being placed in service, the tax imposed under subsections
13    (a) and (b) of this Section for such taxable year shall be
14    increased. Such increase shall be determined by (i)
15    recomputing the investment credit which would have been
16    allowed for the year in which credit for such property was
17    originally allowed by eliminating such property from such
18    computation, and (ii) subtracting such recomputed credit
19    from the amount of credit previously allowed. For the
20    purposes of this paragraph (6), a reduction of the basis of
21    qualified property resulting from a redetermination of the
22    purchase price shall be deemed a disposition of qualified
23    property to the extent of such reduction.
24        (7) There shall be allowed an additional credit equal
25    to 0.5% of the basis of qualified property placed in
26    service during the taxable year in a River Edge

 

 

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1    Redevelopment Zone, provided such property is placed in
2    service on or after July 1, 2006, and the taxpayer's base
3    employment within Illinois has increased by 1% or more over
4    the preceding year as determined by the taxpayer's
5    employment records filed with the Illinois Department of
6    Employment Security. Taxpayers who are new to Illinois
7    shall be deemed to have met the 1% growth in base
8    employment for the first year in which they file employment
9    records with the Illinois Department of Employment
10    Security. If, in any year, the increase in base employment
11    within Illinois over the preceding year is less than 1%,
12    the additional credit shall be limited to that percentage
13    times a fraction, the numerator of which is 0.5% and the
14    denominator of which is 1%, but shall not exceed 0.5%.
15        (8) For taxable years beginning on or after January 1,
16    2021, there shall be allowed an Enterprise Zone
17    construction jobs credit against the taxes imposed under
18    subsections (a) and (b) of this Section as provided in
19    Section 13 of the Illinois Enterprise Zone Act.
20        The credit or credits may not reduce the taxpayer's
21    liability to less than zero. If the amount of the credit or
22    credits exceeds the taxpayer's liability, the excess may be
23    carried forward and applied against the taxpayer's
24    liability in succeeding calendar years in the same manner
25    provided under paragraph (4) of Section 211 of this Act.
26    The credit or credits shall be applied to the earliest year

 

 

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1    for which there is a tax liability. If there are credits
2    from more than one taxable year that are available to
3    offset a liability, the earlier credit shall be applied
4    first.
5        For partners, shareholders of Subchapter S
6    corporations, and owners of limited liability companies,
7    if the liability company is treated as a partnership for
8    the purposes of federal and State income taxation, there
9    shall be allowed a credit under this Section to be
10    determined in accordance with the determination of income
11    and distributive share of income under Sections 702 and 704
12    and Subchapter S of the Internal Revenue Code.
13        The total aggregate amount of credits awarded under the
14    Blue Collar Jobs Act (Article 20 of Public Act 101-9 this
15    amendatory Act of the 101st General Assembly) shall not
16    exceed $20,000,000 in any State fiscal year.
17        This paragraph (8) is exempt from the provisions of
18    Section 250.
19    (g) (Blank).
20    (h) Investment credit; High Impact Business.
21        (1) Subject to subsections (b) and (b-5) of Section 5.5
22    of the Illinois Enterprise Zone Act, a taxpayer shall be
23    allowed a credit against the tax imposed by subsections (a)
24    and (b) of this Section for investment in qualified
25    property which is placed in service by a Department of
26    Commerce and Economic Opportunity designated High Impact

 

 

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1    Business. The credit shall be .5% of the basis for such
2    property. The credit shall not be available (i) until the
3    minimum investments in qualified property set forth in
4    subdivision (a)(3)(A) of Section 5.5 of the Illinois
5    Enterprise Zone Act have been satisfied or (ii) until the
6    time authorized in subsection (b-5) of the Illinois
7    Enterprise Zone Act for entities designated as High Impact
8    Businesses under subdivisions (a)(3)(B), (a)(3)(C), and
9    (a)(3)(D) of Section 5.5 of the Illinois Enterprise Zone
10    Act, and shall not be allowed to the extent that it would
11    reduce a taxpayer's liability for the tax imposed by
12    subsections (a) and (b) of this Section to below zero. The
13    credit applicable to such investments shall be taken in the
14    taxable year in which such investments have been completed.
15    The credit for additional investments beyond the minimum
16    investment by a designated high impact business authorized
17    under subdivision (a)(3)(A) of Section 5.5 of the Illinois
18    Enterprise Zone Act shall be available only in the taxable
19    year in which the property is placed in service and shall
20    not be allowed to the extent that it would reduce a
21    taxpayer's liability for the tax imposed by subsections (a)
22    and (b) of this Section to below zero. For tax years ending
23    on or after December 31, 1987, the credit shall be allowed
24    for the tax year in which the property is placed in
25    service, or, if the amount of the credit exceeds the tax
26    liability for that year, whether it exceeds the original

 

 

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1    liability or the liability as later amended, such excess
2    may be carried forward and applied to the tax liability of
3    the 5 taxable years following the excess credit year. The
4    credit shall be applied to the earliest year for which
5    there is a liability. If there is credit from more than one
6    tax year that is available to offset a liability, the
7    credit accruing first in time shall be applied first.
8        Changes made in this subdivision (h)(1) by Public Act
9    88-670 restore changes made by Public Act 85-1182 and
10    reflect existing law.
11        (2) The term qualified property means property which:
12            (A) is tangible, whether new or used, including
13        buildings and structural components of buildings;
14            (B) is depreciable pursuant to Section 167 of the
15        Internal Revenue Code, except that "3-year property"
16        as defined in Section 168(c)(2)(A) of that Code is not
17        eligible for the credit provided by this subsection
18        (h);
19            (C) is acquired by purchase as defined in Section
20        179(d) of the Internal Revenue Code; and
21            (D) is not eligible for the Enterprise Zone
22        Investment Credit provided by subsection (f) of this
23        Section.
24        (3) The basis of qualified property shall be the basis
25    used to compute the depreciation deduction for federal
26    income tax purposes.

 

 

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1        (4) If the basis of the property for federal income tax
2    depreciation purposes is increased after it has been placed
3    in service in a federally designated Foreign Trade Zone or
4    Sub-Zone located in Illinois by the taxpayer, the amount of
5    such increase shall be deemed property placed in service on
6    the date of such increase in basis.
7        (5) The term "placed in service" shall have the same
8    meaning as under Section 46 of the Internal Revenue Code.
9        (6) If during any taxable year ending on or before
10    December 31, 1996, any property ceases to be qualified
11    property in the hands of the taxpayer within 48 months
12    after being placed in service, or the situs of any
13    qualified property is moved outside Illinois within 48
14    months after being placed in service, the tax imposed under
15    subsections (a) and (b) of this Section for such taxable
16    year shall be increased. Such increase shall be determined
17    by (i) recomputing the investment credit which would have
18    been allowed for the year in which credit for such property
19    was originally allowed by eliminating such property from
20    such computation, and (ii) subtracting such recomputed
21    credit from the amount of credit previously allowed. For
22    the purposes of this paragraph (6), a reduction of the
23    basis of qualified property resulting from a
24    redetermination of the purchase price shall be deemed a
25    disposition of qualified property to the extent of such
26    reduction.

 

 

HB5870- 25 -LRB101 22001 HLH 73017 b

1        (7) Beginning with tax years ending after December 31,
2    1996, if a taxpayer qualifies for the credit under this
3    subsection (h) and thereby is granted a tax abatement and
4    the taxpayer relocates its entire facility in violation of
5    the explicit terms and length of the contract under Section
6    18-183 of the Property Tax Code, the tax imposed under
7    subsections (a) and (b) of this Section shall be increased
8    for the taxable year in which the taxpayer relocated its
9    facility by an amount equal to the amount of credit
10    received by the taxpayer under this subsection (h).
11    (h-5) High Impact Business construction constructions jobs
12credit. For taxable years beginning on or after January 1,
132021, there shall also be allowed a High Impact Business
14construction jobs credit against the tax imposed under
15subsections (a) and (b) of this Section as provided in
16subsections (i) and (j) of Section 5.5 of the Illinois
17Enterprise Zone Act.
18    The credit or credits may not reduce the taxpayer's
19liability to less than zero. If the amount of the credit or
20credits exceeds the taxpayer's liability, the excess may be
21carried forward and applied against the taxpayer's liability in
22succeeding calendar years in the manner provided under
23paragraph (4) of Section 211 of this Act. The credit or credits
24shall be applied to the earliest year for which there is a tax
25liability. If there are credits from more than one taxable year
26that are available to offset a liability, the earlier credit

 

 

HB5870- 26 -LRB101 22001 HLH 73017 b

1shall be applied first.
2    For partners, shareholders of Subchapter S corporations,
3and owners of limited liability companies, if the liability
4company is treated as a partnership for the purposes of federal
5and State income taxation, there shall be allowed a credit
6under this Section to be determined in accordance with the
7determination of income and distributive share of income under
8Sections 702 and 704 and Subchapter S of the Internal Revenue
9Code.
10    The total aggregate amount of credits awarded under the
11Blue Collar Jobs Act (Article 20 of Public Act 101-9 this
12amendatory Act of the 101st General Assembly) shall not exceed
13$20,000,000 in any State fiscal year.
14    This subsection (h-5) is exempt from the provisions of
15Section 250.
16    (i) Credit for Personal Property Tax Replacement Income
17Tax. For tax years ending prior to December 31, 2003, a credit
18shall be allowed against the tax imposed by subsections (a) and
19(b) of this Section for the tax imposed by subsections (c) and
20(d) of this Section. This credit shall be computed by
21multiplying the tax imposed by subsections (c) and (d) of this
22Section by a fraction, the numerator of which is base income
23allocable to Illinois and the denominator of which is Illinois
24base income, and further multiplying the product by the tax
25rate imposed by subsections (a) and (b) of this Section.
26    Any credit earned on or after December 31, 1986 under this

 

 

HB5870- 27 -LRB101 22001 HLH 73017 b

1subsection which is unused in the year the credit is computed
2because it exceeds the tax liability imposed by subsections (a)
3and (b) for that year (whether it exceeds the original
4liability or the liability as later amended) may be carried
5forward and applied to the tax liability imposed by subsections
6(a) and (b) of the 5 taxable years following the excess credit
7year, provided that no credit may be carried forward to any
8year ending on or after December 31, 2003. This credit shall be
9applied first to the earliest year for which there is a
10liability. If there is a credit under this subsection from more
11than one tax year that is available to offset a liability the
12earliest credit arising under this subsection shall be applied
13first.
14    If, during any taxable year ending on or after December 31,
151986, the tax imposed by subsections (c) and (d) of this
16Section for which a taxpayer has claimed a credit under this
17subsection (i) is reduced, the amount of credit for such tax
18shall also be reduced. Such reduction shall be determined by
19recomputing the credit to take into account the reduced tax
20imposed by subsections (c) and (d). If any portion of the
21reduced amount of credit has been carried to a different
22taxable year, an amended return shall be filed for such taxable
23year to reduce the amount of credit claimed.
24    (j) Training expense credit. Beginning with tax years
25ending on or after December 31, 1986 and prior to December 31,
262003, a taxpayer shall be allowed a credit against the tax

 

 

HB5870- 28 -LRB101 22001 HLH 73017 b

1imposed by subsections (a) and (b) under this Section for all
2amounts paid or accrued, on behalf of all persons employed by
3the taxpayer in Illinois or Illinois residents employed outside
4of Illinois by a taxpayer, for educational or vocational
5training in semi-technical or technical fields or semi-skilled
6or skilled fields, which were deducted from gross income in the
7computation of taxable income. The credit against the tax
8imposed by subsections (a) and (b) shall be 1.6% of such
9training expenses. For partners, shareholders of subchapter S
10corporations, and owners of limited liability companies, if the
11liability company is treated as a partnership for purposes of
12federal and State income taxation, there shall be allowed a
13credit under this subsection (j) to be determined in accordance
14with the determination of income and distributive share of
15income under Sections 702 and 704 and subchapter S of the
16Internal Revenue Code.
17    Any credit allowed under this subsection which is unused in
18the year the credit is earned may be carried forward to each of
19the 5 taxable years following the year for which the credit is
20first computed until it is used. This credit shall be applied
21first to the earliest year for which there is a liability. If
22there is a credit under this subsection from more than one tax
23year that is available to offset a liability, the earliest
24credit arising under this subsection shall be applied first. No
25carryforward credit may be claimed in any tax year ending on or
26after December 31, 2003.

 

 

HB5870- 29 -LRB101 22001 HLH 73017 b

1    (k) Research and development credit. For tax years ending
2after July 1, 1990 and prior to December 31, 2003, and
3beginning again for tax years ending on or after December 31,
42004, and ending prior to January 1, 2027, a taxpayer shall be
5allowed a credit against the tax imposed by subsections (a) and
6(b) of this Section for increasing research activities in this
7State. The credit allowed against the tax imposed by
8subsections (a) and (b) shall be equal to 6 1/2% of the
9qualifying expenditures for increasing research activities in
10this State. For partners, shareholders of subchapter S
11corporations, and owners of limited liability companies, if the
12liability company is treated as a partnership for purposes of
13federal and State income taxation, there shall be allowed a
14credit under this subsection to be determined in accordance
15with the determination of income and distributive share of
16income under Sections 702 and 704 and subchapter S of the
17Internal Revenue Code.
18    For purposes of this subsection, "qualifying expenditures"
19means the qualifying expenditures as defined for the federal
20credit for increasing research activities which would be
21allowable under Section 41 of the Internal Revenue Code and
22which are conducted in this State, "qualifying expenditures for
23increasing research activities in this State" means the excess
24of qualifying expenditures for the taxable year in which
25incurred over qualifying expenditures for the base period,
26"qualifying expenditures for the base period" means the average

 

 

HB5870- 30 -LRB101 22001 HLH 73017 b

1of the qualifying expenditures for each year in the base
2period, and "base period" means the 3 taxable years immediately
3preceding the taxable year for which the determination is being
4made.
5    Any credit in excess of the tax liability for the taxable
6year may be carried forward. A taxpayer may elect to have the
7unused credit shown on its final completed return carried over
8as a credit against the tax liability for the following 5
9taxable years or until it has been fully used, whichever occurs
10first; provided that no credit earned in a tax year ending
11prior to December 31, 2003 may be carried forward to any year
12ending on or after December 31, 2003.
13    If an unused credit is carried forward to a given year from
142 or more earlier years, that credit arising in the earliest
15year will be applied first against the tax liability for the
16given year. If a tax liability for the given year still
17remains, the credit from the next earliest year will then be
18applied, and so on, until all credits have been used or no tax
19liability for the given year remains. Any remaining unused
20credit or credits then will be carried forward to the next
21following year in which a tax liability is incurred, except
22that no credit can be carried forward to a year which is more
23than 5 years after the year in which the expense for which the
24credit is given was incurred.
25    No inference shall be drawn from Public Act 91-644 this
26amendatory Act of the 91st General Assembly in construing this

 

 

HB5870- 31 -LRB101 22001 HLH 73017 b

1Section for taxable years beginning before January 1, 1999.
2    It is the intent of the General Assembly that the research
3and development credit under this subsection (k) shall apply
4continuously for all tax years ending on or after December 31,
52004 and ending prior to January 1, 2027, including, but not
6limited to, the period beginning on January 1, 2016 and ending
7on July 6, 2017 (the effective date of Public Act 100-22) this
8amendatory Act of the 100th General Assembly. All actions taken
9in reliance on the continuation of the credit under this
10subsection (k) by any taxpayer are hereby validated.
11    (l) Environmental Remediation Tax Credit.
12        (i) For tax years ending after December 31, 1997 and on
13    or before December 31, 2001, a taxpayer shall be allowed a
14    credit against the tax imposed by subsections (a) and (b)
15    of this Section for certain amounts paid for unreimbursed
16    eligible remediation costs, as specified in this
17    subsection. For purposes of this Section, "unreimbursed
18    eligible remediation costs" means costs approved by the
19    Illinois Environmental Protection Agency ("Agency") under
20    Section 58.14 of the Environmental Protection Act that were
21    paid in performing environmental remediation at a site for
22    which a No Further Remediation Letter was issued by the
23    Agency and recorded under Section 58.10 of the
24    Environmental Protection Act. The credit must be claimed
25    for the taxable year in which Agency approval of the
26    eligible remediation costs is granted. The credit is not

 

 

HB5870- 32 -LRB101 22001 HLH 73017 b

1    available to any taxpayer if the taxpayer or any related
2    party caused or contributed to, in any material respect, a
3    release of regulated substances on, in, or under the site
4    that was identified and addressed by the remedial action
5    pursuant to the Site Remediation Program of the
6    Environmental Protection Act. After the Pollution Control
7    Board rules are adopted pursuant to the Illinois
8    Administrative Procedure Act for the administration and
9    enforcement of Section 58.9 of the Environmental
10    Protection Act, determinations as to credit availability
11    for purposes of this Section shall be made consistent with
12    those rules. For purposes of this Section, "taxpayer"
13    includes a person whose tax attributes the taxpayer has
14    succeeded to under Section 381 of the Internal Revenue Code
15    and "related party" includes the persons disallowed a
16    deduction for losses by paragraphs (b), (c), and (f)(1) of
17    Section 267 of the Internal Revenue Code by virtue of being
18    a related taxpayer, as well as any of its partners. The
19    credit allowed against the tax imposed by subsections (a)
20    and (b) shall be equal to 25% of the unreimbursed eligible
21    remediation costs in excess of $100,000 per site, except
22    that the $100,000 threshold shall not apply to any site
23    contained in an enterprise zone as determined by the
24    Department of Commerce and Community Affairs (now
25    Department of Commerce and Economic Opportunity). The
26    total credit allowed shall not exceed $40,000 per year with

 

 

HB5870- 33 -LRB101 22001 HLH 73017 b

1    a maximum total of $150,000 per site. For partners and
2    shareholders of subchapter S corporations, there shall be
3    allowed a credit under this subsection to be determined in
4    accordance with the determination of income and
5    distributive share of income under Sections 702 and 704 and
6    subchapter S of the Internal Revenue Code.
7        (ii) A credit allowed under this subsection that is
8    unused in the year the credit is earned may be carried
9    forward to each of the 5 taxable years following the year
10    for which the credit is first earned until it is used. The
11    term "unused credit" does not include any amounts of
12    unreimbursed eligible remediation costs in excess of the
13    maximum credit per site authorized under paragraph (i).
14    This credit shall be applied first to the earliest year for
15    which there is a liability. If there is a credit under this
16    subsection from more than one tax year that is available to
17    offset a liability, the earliest credit arising under this
18    subsection shall be applied first. A credit allowed under
19    this subsection may be sold to a buyer as part of a sale of
20    all or part of the remediation site for which the credit
21    was granted. The purchaser of a remediation site and the
22    tax credit shall succeed to the unused credit and remaining
23    carry-forward period of the seller. To perfect the
24    transfer, the assignor shall record the transfer in the
25    chain of title for the site and provide written notice to
26    the Director of the Illinois Department of Revenue of the

 

 

HB5870- 34 -LRB101 22001 HLH 73017 b

1    assignor's intent to sell the remediation site and the
2    amount of the tax credit to be transferred as a portion of
3    the sale. In no event may a credit be transferred to any
4    taxpayer if the taxpayer or a related party would not be
5    eligible under the provisions of subsection (i).
6        (iii) For purposes of this Section, the term "site"
7    shall have the same meaning as under Section 58.2 of the
8    Environmental Protection Act.
9    (m) Education expense credit. Beginning with tax years
10ending after December 31, 1999, a taxpayer who is the custodian
11of one or more qualifying pupils shall be allowed a credit
12against the tax imposed by subsections (a) and (b) of this
13Section for qualified education expenses incurred on behalf of
14the qualifying pupils. The credit shall be equal to 25% of
15qualified education expenses, but in no event may the total
16credit under this subsection claimed by a family that is the
17custodian of qualifying pupils exceed (i) $500 for tax years
18ending prior to December 31, 2017, and (ii) $750 for tax years
19ending on or after December 31, 2017. The $750 credit
20limitation under this subsection does not apply in a taxable
21year that ends on or after December 31, 2020 and ends prior to
22December 31, 2022 if the qualifying pupil attends a school that
23is subject to in-person attendance restrictions as a result of
24the COVID-19 pandemic. In no event shall a credit under this
25subsection reduce the taxpayer's liability under this Act to
26less than zero. Notwithstanding any other provision of law, for

 

 

HB5870- 35 -LRB101 22001 HLH 73017 b

1taxable years beginning on or after January 1, 2017, no
2taxpayer may claim a credit under this subsection (m) if the
3taxpayer's adjusted gross income for the taxable year exceeds
4(i) $500,000, in the case of spouses filing a joint federal tax
5return or (ii) $250,000, in the case of all other taxpayers.
6This subsection is exempt from the provisions of Section 250 of
7this Act.
8    For purposes of this subsection:
9    "Qualifying pupils" means individuals who (i) are
10residents of the State of Illinois, (ii) are under the age of
1121 at the close of the school year for which a credit is
12sought, and (iii) during the school year for which a credit is
13sought were full-time pupils enrolled in a kindergarten through
14twelfth grade education program at any school, as defined in
15this subsection.
16    "Qualified education expense" means the amount incurred on
17behalf of a qualifying pupil in excess of $250 for tuition,
18book fees, and lab fees at the school in which the pupil is
19enrolled during the regular school year. With respect taxable
20years that end on or after December 31, 2020 and end prior to
21December 31, 2022, if the qualifying pupil attends a school
22that is subject to in-person attendance restrictions as a
23result of the COVID-19 pandemic, "qualified education expense"
24also includes school supplies, computers and tablets, and costs
25associated with increased internet access to facilitate remote
26learning that are purchased prior to July 1, 2022.

 

 

HB5870- 36 -LRB101 22001 HLH 73017 b

1    "School" means any public or nonpublic elementary or
2secondary school in Illinois that is in compliance with Title
3VI of the Civil Rights Act of 1964 and attendance at which
4satisfies the requirements of Section 26-1 of the School Code,
5except that nothing shall be construed to require a child to
6attend any particular public or nonpublic school to qualify for
7the credit under this Section.
8    "Custodian" means, with respect to qualifying pupils, an
9Illinois resident who is a parent, the parents, a legal
10guardian, or the legal guardians of the qualifying pupils.
11    (n) River Edge Redevelopment Zone site remediation tax
12credit.
13        (i) For tax years ending on or after December 31, 2006,
14    a taxpayer shall be allowed a credit against the tax
15    imposed by subsections (a) and (b) of this Section for
16    certain amounts paid for unreimbursed eligible remediation
17    costs, as specified in this subsection. For purposes of
18    this Section, "unreimbursed eligible remediation costs"
19    means costs approved by the Illinois Environmental
20    Protection Agency ("Agency") under Section 58.14a of the
21    Environmental Protection Act that were paid in performing
22    environmental remediation at a site within a River Edge
23    Redevelopment Zone for which a No Further Remediation
24    Letter was issued by the Agency and recorded under Section
25    58.10 of the Environmental Protection Act. The credit must
26    be claimed for the taxable year in which Agency approval of

 

 

HB5870- 37 -LRB101 22001 HLH 73017 b

1    the eligible remediation costs is granted. The credit is
2    not available to any taxpayer if the taxpayer or any
3    related party caused or contributed to, in any material
4    respect, a release of regulated substances on, in, or under
5    the site that was identified and addressed by the remedial
6    action pursuant to the Site Remediation Program of the
7    Environmental Protection Act. Determinations as to credit
8    availability for purposes of this Section shall be made
9    consistent with rules adopted by the Pollution Control
10    Board pursuant to the Illinois Administrative Procedure
11    Act for the administration and enforcement of Section 58.9
12    of the Environmental Protection Act. For purposes of this
13    Section, "taxpayer" includes a person whose tax attributes
14    the taxpayer has succeeded to under Section 381 of the
15    Internal Revenue Code and "related party" includes the
16    persons disallowed a deduction for losses by paragraphs
17    (b), (c), and (f)(1) of Section 267 of the Internal Revenue
18    Code by virtue of being a related taxpayer, as well as any
19    of its partners. The credit allowed against the tax imposed
20    by subsections (a) and (b) shall be equal to 25% of the
21    unreimbursed eligible remediation costs in excess of
22    $100,000 per site.
23        (ii) A credit allowed under this subsection that is
24    unused in the year the credit is earned may be carried
25    forward to each of the 5 taxable years following the year
26    for which the credit is first earned until it is used. This

 

 

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

 

 

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

 

 

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1            (F) a transfer by a parent company to a wholly
2        owned subsidiary; or
3            (G) the transfer or sale to or by one person to
4        another person where both persons were initial owners
5        of the registration when the registration was issued;
6        or
7        (2) the cannabis cultivation center registration,
8    medical cannabis dispensary registration, or the
9    controlling interest in a registrant's property is
10    transferred in a transaction to lineal descendants in which
11    no gain or loss is recognized or as a result of a
12    transaction in accordance with Section 351 of the Internal
13    Revenue Code in which no gain or loss is recognized.
14(Source: P.A. 100-22, eff. 7-6-17; 101-9, eff. 6-5-19; 101-31,
15eff. 6-28-19; 101-207, eff. 8-2-19; 101-363, eff. 8-9-19;
16revised 9-17-19.)
 
17    (Text of Section after amendment by P.A. 101-8)
18    Sec. 201. Tax imposed.
19    (a) In general. A tax measured by net income is hereby
20imposed on every individual, corporation, trust and estate for
21each taxable year ending after July 31, 1969 on the privilege
22of earning or receiving income in or as a resident of this
23State. Such tax shall be in addition to all other occupation or
24privilege taxes imposed by this State or by any municipal
25corporation or political subdivision thereof.

 

 

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1    (b) Rates. The tax imposed by subsection (a) of this
2Section shall be determined as follows, except as adjusted by
3subsection (d-1):
4        (1) In the case of an individual, trust or estate, for
5    taxable years ending prior to July 1, 1989, an amount equal
6    to 2 1/2% of the taxpayer's net income for the taxable
7    year.
8        (2) In the case of an individual, trust or estate, for
9    taxable years beginning prior to July 1, 1989 and ending
10    after June 30, 1989, an amount equal to the sum of (i) 2
11    1/2% of the taxpayer's net income for the period prior to
12    July 1, 1989, as calculated under Section 202.3, and (ii)
13    3% of the taxpayer's net income for the period after June
14    30, 1989, as calculated under Section 202.3.
15        (3) In the case of an individual, trust or estate, for
16    taxable years beginning after June 30, 1989, and ending
17    prior to January 1, 2011, an amount equal to 3% of the
18    taxpayer's net income for the taxable year.
19        (4) In the case of an individual, trust, or estate, for
20    taxable years beginning prior to January 1, 2011, and
21    ending after December 31, 2010, an amount equal to the sum
22    of (i) 3% of the taxpayer's net income for the period prior
23    to January 1, 2011, as calculated under Section 202.5, and
24    (ii) 5% of the taxpayer's net income for the period after
25    December 31, 2010, as calculated under Section 202.5.
26        (5) In the case of an individual, trust, or estate, for

 

 

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1    taxable years beginning on or after January 1, 2011, and
2    ending prior to January 1, 2015, an amount equal to 5% of
3    the taxpayer's net income for the taxable year.
4        (5.1) In the case of an individual, trust, or estate,
5    for taxable years beginning prior to January 1, 2015, and
6    ending after December 31, 2014, an amount equal to the sum
7    of (i) 5% of the taxpayer's net income for the period prior
8    to January 1, 2015, as calculated under Section 202.5, and
9    (ii) 3.75% of the taxpayer's net income for the period
10    after December 31, 2014, as calculated under Section 202.5.
11        (5.2) In the case of an individual, trust, or estate,
12    for taxable years beginning on or after January 1, 2015,
13    and ending prior to July 1, 2017, an amount equal to 3.75%
14    of the taxpayer's net income for the taxable year.
15        (5.3) In the case of an individual, trust, or estate,
16    for taxable years beginning prior to July 1, 2017, and
17    ending after June 30, 2017, an amount equal to the sum of
18    (i) 3.75% of the taxpayer's net income for the period prior
19    to July 1, 2017, as calculated under Section 202.5, and
20    (ii) 4.95% of the taxpayer's net income for the period
21    after June 30, 2017, as calculated under Section 202.5.
22        (5.4) In the case of an individual, trust, or estate,
23    for taxable years beginning on or after July 1, 2017 and
24    beginning prior to January 1, 2021, an amount equal to
25    4.95% of the taxpayer's net income for the taxable year.
26        (5.5) In the case of an individual, trust, or estate,

 

 

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1    for taxable years beginning on or after January 1, 2021, an
2    amount calculated under the rate structure set forth in
3    Section 201.1.
4        (6) In the case of a corporation, for taxable years
5    ending prior to July 1, 1989, an amount equal to 4% of the
6    taxpayer's net income for the taxable year.
7        (7) In the case of a corporation, for taxable years
8    beginning prior to July 1, 1989 and ending after June 30,
9    1989, an amount equal to the sum of (i) 4% of the
10    taxpayer's net income for the period prior to July 1, 1989,
11    as calculated under Section 202.3, and (ii) 4.8% of the
12    taxpayer's net income for the period after June 30, 1989,
13    as calculated under Section 202.3.
14        (8) In the case of a corporation, for taxable years
15    beginning after June 30, 1989, and ending prior to January
16    1, 2011, an amount equal to 4.8% of the taxpayer's net
17    income for the taxable year.
18        (9) In the case of a corporation, for taxable years
19    beginning prior to January 1, 2011, and ending after
20    December 31, 2010, an amount equal to the sum of (i) 4.8%
21    of the taxpayer's net income for the period prior to
22    January 1, 2011, as calculated under Section 202.5, and
23    (ii) 7% of the taxpayer's net income for the period after
24    December 31, 2010, as calculated under Section 202.5.
25        (10) In the case of a corporation, for taxable years
26    beginning on or after January 1, 2011, and ending prior to

 

 

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1    January 1, 2015, an amount equal to 7% of the taxpayer's
2    net income for the taxable year.
3        (11) In the case of a corporation, for taxable years
4    beginning prior to January 1, 2015, and ending after
5    December 31, 2014, an amount equal to the sum of (i) 7% of
6    the taxpayer's net income for the period prior to January
7    1, 2015, as calculated under Section 202.5, and (ii) 5.25%
8    of the taxpayer's net income for the period after December
9    31, 2014, as calculated under Section 202.5.
10        (12) In the case of a corporation, for taxable years
11    beginning on or after January 1, 2015, and ending prior to
12    July 1, 2017, an amount equal to 5.25% of the taxpayer's
13    net income for the taxable year.
14        (13) In the case of a corporation, for taxable years
15    beginning prior to July 1, 2017, and ending after June 30,
16    2017, an amount equal to the sum of (i) 5.25% of the
17    taxpayer's net income for the period prior to July 1, 2017,
18    as calculated under Section 202.5, and (ii) 7% of the
19    taxpayer's net income for the period after June 30, 2017,
20    as calculated under Section 202.5.
21        (14) In the case of a corporation, for taxable years
22    beginning on or after July 1, 2017 and beginning prior to
23    January 1, 2021, an amount equal to 7% of the taxpayer's
24    net income for the taxable year.
25        (15) In the case of a corporation, for taxable years
26    beginning on or after January 1, 2021, an amount equal to

 

 

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1    7.99% of the taxpayer's net income for the taxable year.
2    The rates under this subsection (b) are subject to the
3provisions of Section 201.5.
4    (b-5) Surcharge; sale or exchange of assets, properties,
5and intangibles of organization gaming licensees. For each of
6taxable years 2019 through 2027, a surcharge is imposed on all
7taxpayers on income arising from the sale or exchange of
8capital assets, depreciable business property, real property
9used in the trade or business, and Section 197 intangibles (i)
10of an organization licensee under the Illinois Horse Racing Act
11of 1975 and (ii) of an organization gaming licensee under the
12Illinois Gambling Act. The amount of the surcharge is equal to
13the amount of federal income tax liability for the taxable year
14attributable to those sales and exchanges. The surcharge
15imposed shall not apply if:
16        (1) the organization gaming license, organization
17    license, or racetrack property is transferred as a result
18    of any of the following:
19            (A) bankruptcy, a receivership, or a debt
20        adjustment initiated by or against the initial
21        licensee or the substantial owners of the initial
22        licensee;
23            (B) cancellation, revocation, or termination of
24        any such license by the Illinois Gaming Board or the
25        Illinois Racing Board;
26            (C) a determination by the Illinois Gaming Board

 

 

HB5870- 46 -LRB101 22001 HLH 73017 b

1        that transfer of the license is in the best interests
2        of Illinois gaming;
3            (D) the death of an owner of the equity interest in
4        a licensee;
5            (E) the acquisition of a controlling interest in
6        the stock or substantially all of the assets of a
7        publicly traded company;
8            (F) a transfer by a parent company to a wholly
9        owned subsidiary; or
10            (G) the transfer or sale to or by one person to
11        another person where both persons were initial owners
12        of the license when the license was issued; or
13        (2) the controlling interest in the organization
14    gaming license, organization license, or racetrack
15    property is transferred in a transaction to lineal
16    descendants in which no gain or loss is recognized or as a
17    result of a transaction in accordance with Section 351 of
18    the Internal Revenue Code in which no gain or loss is
19    recognized; or
20        (3) live horse racing was not conducted in 2010 at a
21    racetrack located within 3 miles of the Mississippi River
22    under a license issued pursuant to the Illinois Horse
23    Racing Act of 1975.
24    The transfer of an organization gaming license,
25organization license, or racetrack property by a person other
26than the initial licensee to receive the organization gaming

 

 

HB5870- 47 -LRB101 22001 HLH 73017 b

1license is not subject to a surcharge. The Department shall
2adopt rules necessary to implement and administer this
3subsection.
4    (c) Personal Property Tax Replacement Income Tax.
5Beginning on July 1, 1979 and thereafter, in addition to such
6income tax, there is also hereby imposed the Personal Property
7Tax Replacement Income Tax measured by net income on every
8corporation (including Subchapter S corporations), partnership
9and trust, for each taxable year ending after June 30, 1979.
10Such taxes are imposed on the privilege of earning or receiving
11income in or as a resident of this State. The Personal Property
12Tax Replacement Income Tax shall be in addition to the income
13tax imposed by subsections (a) and (b) of this Section and in
14addition to all other occupation or privilege taxes imposed by
15this State or by any municipal corporation or political
16subdivision thereof.
17    (d) Additional Personal Property Tax Replacement Income
18Tax Rates. The personal property tax replacement income tax
19imposed by this subsection and subsection (c) of this Section
20in the case of a corporation, other than a Subchapter S
21corporation and except as adjusted by subsection (d-1), shall
22be an additional amount equal to 2.85% of such taxpayer's net
23income for the taxable year, except that beginning on January
241, 1981, and thereafter, the rate of 2.85% specified in this
25subsection shall be reduced to 2.5%, and in the case of a
26partnership, trust or a Subchapter S corporation shall be an

 

 

HB5870- 48 -LRB101 22001 HLH 73017 b

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

 

 

HB5870- 49 -LRB101 22001 HLH 73017 b

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

 

 

HB5870- 50 -LRB101 22001 HLH 73017 b

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

 

 

HB5870- 51 -LRB101 22001 HLH 73017 b

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

 

 

HB5870- 52 -LRB101 22001 HLH 73017 b

1    the tax year in which the property is placed in service,
2    or, if the amount of the credit exceeds the tax liability
3    for that year, whether it exceeds the original liability or
4    the liability as later amended, such excess may be carried
5    forward and applied to the tax liability of the 5 taxable
6    years following the excess credit years. The credit shall
7    be applied to the earliest year for which there is a
8    liability. If there is credit from more than one tax year
9    that is available to offset a liability, earlier credit
10    shall be applied first.
11        (2) The term "qualified property" means property
12    which:
13            (A) is tangible, whether new or used, including
14        buildings and structural components of buildings and
15        signs that are real property, but not including land or
16        improvements to real property that are not a structural
17        component of a building such as landscaping, sewer
18        lines, local access roads, fencing, parking lots, and
19        other appurtenances;
20            (B) is depreciable pursuant to Section 167 of the
21        Internal Revenue Code, except that "3-year property"
22        as defined in Section 168(c)(2)(A) of that Code is not
23        eligible for the credit provided by this subsection
24        (e);
25            (C) is acquired by purchase as defined in Section
26        179(d) of the Internal Revenue Code;

 

 

HB5870- 53 -LRB101 22001 HLH 73017 b

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

 

 

HB5870- 54 -LRB101 22001 HLH 73017 b

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

 

 

HB5870- 55 -LRB101 22001 HLH 73017 b

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

 

 

HB5870- 56 -LRB101 22001 HLH 73017 b

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

 

 

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1    determined in accordance with the determination of income
2    and distributive share of income under Sections 702 and 704
3    and Subchapter S of the Internal Revenue Code. The credit
4    shall be .5% of the basis for such property. The credit
5    shall be available only in the taxable year in which the
6    property is placed in service in the Enterprise Zone or
7    River Edge Redevelopment Zone and shall not be allowed to
8    the extent that it would reduce a taxpayer's liability for
9    the tax imposed by subsections (a) and (b) of this Section
10    to below zero. For tax years ending on or after December
11    31, 1985, the credit shall be allowed for the tax year in
12    which the property is placed in service, or, if the amount
13    of the credit exceeds the tax liability for that year,
14    whether it exceeds the original liability or the liability
15    as later amended, such excess may be carried forward and
16    applied to the tax liability of the 5 taxable years
17    following the excess credit year. The credit shall be
18    applied to the earliest year for which there is a
19    liability. If there is credit from more than one tax year
20    that is available to offset a liability, the credit
21    accruing first in time shall be applied first.
22        (2) The term qualified property means property which:
23            (A) is tangible, whether new or used, including
24        buildings and structural components of buildings;
25            (B) is depreciable pursuant to Section 167 of the
26        Internal Revenue Code, except that "3-year property"

 

 

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1        as defined in Section 168(c)(2)(A) of that Code is not
2        eligible for the credit provided by this subsection
3        (f);
4            (C) is acquired by purchase as defined in Section
5        179(d) of the Internal Revenue Code;
6            (D) is used in the Enterprise Zone or River Edge
7        Redevelopment Zone by the taxpayer; and
8            (E) has not been previously used in Illinois in
9        such a manner and by such a person as would qualify for
10        the credit provided by this subsection (f) or
11        subsection (e).
12        (3) The basis of qualified property shall be the basis
13    used to compute the depreciation deduction for federal
14    income tax purposes.
15        (4) If the basis of the property for federal income tax
16    depreciation purposes is increased after it has been placed
17    in service in the Enterprise Zone or River Edge
18    Redevelopment Zone by the taxpayer, the amount of such
19    increase shall be deemed property placed in service on the
20    date of such increase in basis.
21        (5) The term "placed in service" shall have the same
22    meaning as under Section 46 of the Internal Revenue Code.
23        (6) If during any taxable year, any property ceases to
24    be qualified property in the hands of the taxpayer within
25    48 months after being placed in service, or the situs of
26    any qualified property is moved outside the Enterprise Zone

 

 

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

 

 

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1    within Illinois over the preceding year is less than 1%,
2    the additional credit shall be limited to that percentage
3    times a fraction, the numerator of which is 0.5% and the
4    denominator of which is 1%, but shall not exceed 0.5%.
5        (8) For taxable years beginning on or after January 1,
6    2021, there shall be allowed an Enterprise Zone
7    construction jobs credit against the taxes imposed under
8    subsections (a) and (b) of this Section as provided in
9    Section 13 of the Illinois Enterprise Zone Act.
10        The credit or credits may not reduce the taxpayer's
11    liability to less than zero. If the amount of the credit or
12    credits exceeds the taxpayer's liability, the excess may be
13    carried forward and applied against the taxpayer's
14    liability in succeeding calendar years in the same manner
15    provided under paragraph (4) of Section 211 of this Act.
16    The credit or credits shall be applied to the earliest year
17    for which there is a tax liability. If there are credits
18    from more than one taxable year that are available to
19    offset a liability, the earlier credit shall be applied
20    first.
21        For partners, shareholders of Subchapter S
22    corporations, and owners of limited liability companies,
23    if the liability company is treated as a partnership for
24    the purposes of federal and State income taxation, there
25    shall be allowed a credit under this Section to be
26    determined in accordance with the determination of income

 

 

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1    and distributive share of income under Sections 702 and 704
2    and Subchapter S of the Internal Revenue Code.
3        The total aggregate amount of credits awarded under the
4    Blue Collar Jobs Act (Article 20 of Public Act 101-9 this
5    amendatory Act of the 101st General Assembly) shall not
6    exceed $20,000,000 in any State fiscal year.
7        This paragraph (8) is exempt from the provisions of
8    Section 250.
9    (g) (Blank).
10    (h) Investment credit; High Impact Business.
11        (1) Subject to subsections (b) and (b-5) of Section 5.5
12    of the Illinois Enterprise Zone Act, a taxpayer shall be
13    allowed a credit against the tax imposed by subsections (a)
14    and (b) of this Section for investment in qualified
15    property which is placed in service by a Department of
16    Commerce and Economic Opportunity designated High Impact
17    Business. The credit shall be .5% of the basis for such
18    property. The credit shall not be available (i) until the
19    minimum investments in qualified property set forth in
20    subdivision (a)(3)(A) of Section 5.5 of the Illinois
21    Enterprise Zone Act have been satisfied or (ii) until the
22    time authorized in subsection (b-5) of the Illinois
23    Enterprise Zone Act for entities designated as High Impact
24    Businesses under subdivisions (a)(3)(B), (a)(3)(C), and
25    (a)(3)(D) of Section 5.5 of the Illinois Enterprise Zone
26    Act, and shall not be allowed to the extent that it would

 

 

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

 

 

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

 

 

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

 

 

HB5870- 65 -LRB101 22001 HLH 73017 b

1    (h-5) High Impact Business construction constructions jobs
2credit. For taxable years beginning on or after January 1,
32021, there shall also be allowed a High Impact Business
4construction jobs credit against the tax imposed under
5subsections (a) and (b) of this Section as provided in
6subsections (i) and (j) of Section 5.5 of the Illinois
7Enterprise Zone Act.
8    The credit or credits may not reduce the taxpayer's
9liability to less than zero. If the amount of the credit or
10credits exceeds the taxpayer's liability, the excess may be
11carried forward and applied against the taxpayer's liability in
12succeeding calendar years in the manner provided under
13paragraph (4) of Section 211 of this Act. The credit or credits
14shall be applied to the earliest year for which there is a tax
15liability. If there are credits from more than one taxable year
16that are available to offset a liability, the earlier credit
17shall be applied first.
18    For partners, shareholders of Subchapter S corporations,
19and owners of limited liability companies, if the liability
20company is treated as a partnership for the purposes of federal
21and State income taxation, there shall be allowed a credit
22under this Section to be determined in accordance with the
23determination of income and distributive share of income under
24Sections 702 and 704 and Subchapter S of the Internal Revenue
25Code.
26    The total aggregate amount of credits awarded under the

 

 

HB5870- 66 -LRB101 22001 HLH 73017 b

1Blue Collar Jobs Act (Article 20 of Public Act 101-9 this
2amendatory Act of the 101st General Assembly) shall not exceed
3$20,000,000 in any State fiscal year.
4    This subsection (h-5) is exempt from the provisions of
5Section 250.
6    (i) Credit for Personal Property Tax Replacement Income
7Tax. For tax years ending prior to December 31, 2003, a credit
8shall be allowed against the tax imposed by subsections (a) and
9(b) of this Section for the tax imposed by subsections (c) and
10(d) of this Section. This credit shall be computed by
11multiplying the tax imposed by subsections (c) and (d) of this
12Section by a fraction, the numerator of which is base income
13allocable to Illinois and the denominator of which is Illinois
14base income, and further multiplying the product by the tax
15rate imposed by subsections (a) and (b) of this Section.
16    Any credit earned on or after December 31, 1986 under this
17subsection which is unused in the year the credit is computed
18because it exceeds the tax liability imposed by subsections (a)
19and (b) for that year (whether it exceeds the original
20liability or the liability as later amended) may be carried
21forward and applied to the tax liability imposed by subsections
22(a) and (b) of the 5 taxable years following the excess credit
23year, provided that no credit may be carried forward to any
24year ending on or after December 31, 2003. This credit shall be
25applied first to the earliest year for which there is a
26liability. If there is a credit under this subsection from more

 

 

HB5870- 67 -LRB101 22001 HLH 73017 b

1than one tax year that is available to offset a liability the
2earliest credit arising under this subsection shall be applied
3first.
4    If, during any taxable year ending on or after December 31,
51986, the tax imposed by subsections (c) and (d) of this
6Section for which a taxpayer has claimed a credit under this
7subsection (i) is reduced, the amount of credit for such tax
8shall also be reduced. Such reduction shall be determined by
9recomputing the credit to take into account the reduced tax
10imposed by subsections (c) and (d). If any portion of the
11reduced amount of credit has been carried to a different
12taxable year, an amended return shall be filed for such taxable
13year to reduce the amount of credit claimed.
14    (j) Training expense credit. Beginning with tax years
15ending on or after December 31, 1986 and prior to December 31,
162003, a taxpayer shall be allowed a credit against the tax
17imposed by subsections (a) and (b) under this Section for all
18amounts paid or accrued, on behalf of all persons employed by
19the taxpayer in Illinois or Illinois residents employed outside
20of Illinois by a taxpayer, for educational or vocational
21training in semi-technical or technical fields or semi-skilled
22or skilled fields, which were deducted from gross income in the
23computation of taxable income. The credit against the tax
24imposed by subsections (a) and (b) shall be 1.6% of such
25training expenses. For partners, shareholders of subchapter S
26corporations, and owners of limited liability companies, if the

 

 

HB5870- 68 -LRB101 22001 HLH 73017 b

1liability company is treated as a partnership for purposes of
2federal and State income taxation, there shall be allowed a
3credit under this subsection (j) to be determined in accordance
4with the determination of income and distributive share of
5income under Sections 702 and 704 and subchapter S of the
6Internal Revenue Code.
7    Any credit allowed under this subsection which is unused in
8the year the credit is earned may be carried forward to each of
9the 5 taxable years following the year for which the credit is
10first computed until it is used. This credit shall be applied
11first to the earliest year for which there is a liability. If
12there is a credit under this subsection from more than one tax
13year that is available to offset a liability, the earliest
14credit arising under this subsection shall be applied first. No
15carryforward credit may be claimed in any tax year ending on or
16after December 31, 2003.
17    (k) Research and development credit. For tax years ending
18after July 1, 1990 and prior to December 31, 2003, and
19beginning again for tax years ending on or after December 31,
202004, and ending prior to January 1, 2027, a taxpayer shall be
21allowed a credit against the tax imposed by subsections (a) and
22(b) of this Section for increasing research activities in this
23State. The credit allowed against the tax imposed by
24subsections (a) and (b) shall be equal to 6 1/2% of the
25qualifying expenditures for increasing research activities in
26this State. For partners, shareholders of subchapter S

 

 

HB5870- 69 -LRB101 22001 HLH 73017 b

1corporations, and owners of limited liability companies, if the
2liability company is treated as a partnership for purposes of
3federal and State income taxation, there shall be allowed a
4credit under this subsection to be determined in accordance
5with the determination of income and distributive share of
6income under Sections 702 and 704 and subchapter S of the
7Internal Revenue Code.
8    For purposes of this subsection, "qualifying expenditures"
9means the qualifying expenditures as defined for the federal
10credit for increasing research activities which would be
11allowable under Section 41 of the Internal Revenue Code and
12which are conducted in this State, "qualifying expenditures for
13increasing research activities in this State" means the excess
14of qualifying expenditures for the taxable year in which
15incurred over qualifying expenditures for the base period,
16"qualifying expenditures for the base period" means the average
17of the qualifying expenditures for each year in the base
18period, and "base period" means the 3 taxable years immediately
19preceding the taxable year for which the determination is being
20made.
21    Any credit in excess of the tax liability for the taxable
22year may be carried forward. A taxpayer may elect to have the
23unused credit shown on its final completed return carried over
24as a credit against the tax liability for the following 5
25taxable years or until it has been fully used, whichever occurs
26first; provided that no credit earned in a tax year ending

 

 

HB5870- 70 -LRB101 22001 HLH 73017 b

1prior to December 31, 2003 may be carried forward to any year
2ending on or after December 31, 2003.
3    If an unused credit is carried forward to a given year from
42 or more earlier years, that credit arising in the earliest
5year will be applied first against the tax liability for the
6given year. If a tax liability for the given year still
7remains, the credit from the next earliest year will then be
8applied, and so on, until all credits have been used or no tax
9liability for the given year remains. Any remaining unused
10credit or credits then will be carried forward to the next
11following year in which a tax liability is incurred, except
12that no credit can be carried forward to a year which is more
13than 5 years after the year in which the expense for which the
14credit is given was incurred.
15    No inference shall be drawn from Public Act 91-644 this
16amendatory Act of the 91st General Assembly in construing this
17Section for taxable years beginning before January 1, 1999.
18    It is the intent of the General Assembly that the research
19and development credit under this subsection (k) shall apply
20continuously for all tax years ending on or after December 31,
212004 and ending prior to January 1, 2027, including, but not
22limited to, the period beginning on January 1, 2016 and ending
23on July 6, 2017 (the effective date of Public Act 100-22) this
24amendatory Act of the 100th General Assembly. All actions taken
25in reliance on the continuation of the credit under this
26subsection (k) by any taxpayer are hereby validated.

 

 

HB5870- 71 -LRB101 22001 HLH 73017 b

1    (l) Environmental Remediation Tax Credit.
2        (i) For tax years ending after December 31, 1997 and on
3    or before December 31, 2001, a taxpayer shall be allowed a
4    credit against the tax imposed by subsections (a) and (b)
5    of this Section for certain amounts paid for unreimbursed
6    eligible remediation costs, as specified in this
7    subsection. For purposes of this Section, "unreimbursed
8    eligible remediation costs" means costs approved by the
9    Illinois Environmental Protection Agency ("Agency") under
10    Section 58.14 of the Environmental Protection Act that were
11    paid in performing environmental remediation at a site for
12    which a No Further Remediation Letter was issued by the
13    Agency and recorded under Section 58.10 of the
14    Environmental Protection Act. The credit must be claimed
15    for the taxable year in which Agency approval of the
16    eligible remediation costs is granted. The credit is not
17    available to any taxpayer if the taxpayer or any related
18    party caused or contributed to, in any material respect, a
19    release of regulated substances on, in, or under the site
20    that was identified and addressed by the remedial action
21    pursuant to the Site Remediation Program of the
22    Environmental Protection Act. After the Pollution Control
23    Board rules are adopted pursuant to the Illinois
24    Administrative Procedure Act for the administration and
25    enforcement of Section 58.9 of the Environmental
26    Protection Act, determinations as to credit availability

 

 

HB5870- 72 -LRB101 22001 HLH 73017 b

1    for purposes of this Section shall be made consistent with
2    those rules. For purposes of this Section, "taxpayer"
3    includes a person whose tax attributes the taxpayer has
4    succeeded to under Section 381 of the Internal Revenue Code
5    and "related party" includes the persons disallowed a
6    deduction for losses by paragraphs (b), (c), and (f)(1) of
7    Section 267 of the Internal Revenue Code by virtue of being
8    a related taxpayer, as well as any of its partners. The
9    credit allowed against the tax imposed by subsections (a)
10    and (b) shall be equal to 25% of the unreimbursed eligible
11    remediation costs in excess of $100,000 per site, except
12    that the $100,000 threshold shall not apply to any site
13    contained in an enterprise zone as determined by the
14    Department of Commerce and Community Affairs (now
15    Department of Commerce and Economic Opportunity). The
16    total credit allowed shall not exceed $40,000 per year with
17    a maximum total of $150,000 per site. For partners and
18    shareholders of subchapter S corporations, there shall be
19    allowed a credit under this subsection to be determined in
20    accordance with the determination of income and
21    distributive share of income under Sections 702 and 704 and
22    subchapter S of the Internal Revenue Code.
23        (ii) A credit allowed under this subsection that is
24    unused in the year the credit is earned may be carried
25    forward to each of the 5 taxable years following the year
26    for which the credit is first earned until it is used. The

 

 

HB5870- 73 -LRB101 22001 HLH 73017 b

1    term "unused credit" does not include any amounts of
2    unreimbursed eligible remediation costs in excess of the
3    maximum credit per site authorized under paragraph (i).
4    This credit shall be applied first to the earliest year for
5    which there is a liability. If there is a credit under this
6    subsection from more than one tax year that is available to
7    offset a liability, the earliest credit arising under this
8    subsection shall be applied first. A credit allowed under
9    this subsection may be sold to a buyer as part of a sale of
10    all or part of the remediation site for which the credit
11    was granted. The purchaser of a remediation site and the
12    tax credit shall succeed to the unused credit and remaining
13    carry-forward period of the seller. To perfect the
14    transfer, the assignor shall record the transfer in the
15    chain of title for the site and provide written notice to
16    the Director of the Illinois Department of Revenue of the
17    assignor's intent to sell the remediation site and the
18    amount of the tax credit to be transferred as a portion of
19    the sale. In no event may a credit be transferred to any
20    taxpayer if the taxpayer or a related party would not be
21    eligible under the provisions of subsection (i).
22        (iii) For purposes of this Section, the term "site"
23    shall have the same meaning as under Section 58.2 of the
24    Environmental Protection Act.
25    (m) Education expense credit. Beginning with tax years
26ending after December 31, 1999, a taxpayer who is the custodian

 

 

HB5870- 74 -LRB101 22001 HLH 73017 b

1of one or more qualifying pupils shall be allowed a credit
2against the tax imposed by subsections (a) and (b) of this
3Section for qualified education expenses incurred on behalf of
4the qualifying pupils. The credit shall be equal to 25% of
5qualified education expenses, but in no event may the total
6credit under this subsection claimed by a family that is the
7custodian of qualifying pupils exceed (i) $500 for tax years
8ending prior to December 31, 2017, and (ii) $750 for tax years
9ending on or after December 31, 2017. The $750 credit
10limitation under this subsection does not apply in a taxable
11year that ends on or after December 31, 2020 and ends prior to
12December 31, 2022 if the qualifying pupil attends a school that
13is subject to in-person attendance restrictions as a result of
14the COVID-19 pandemic. In no event shall a credit under this
15subsection reduce the taxpayer's liability under this Act to
16less than zero. Notwithstanding any other provision of law, for
17taxable years beginning on or after January 1, 2017, no
18taxpayer may claim a credit under this subsection (m) if the
19taxpayer's adjusted gross income for the taxable year exceeds
20(i) $500,000, in the case of spouses filing a joint federal tax
21return or (ii) $250,000, in the case of all other taxpayers.
22This subsection is exempt from the provisions of Section 250 of
23this Act.
24    For purposes of this subsection:
25    "Qualifying pupils" means individuals who (i) are
26residents of the State of Illinois, (ii) are under the age of

 

 

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121 at the close of the school year for which a credit is
2sought, and (iii) during the school year for which a credit is
3sought were full-time pupils enrolled in a kindergarten through
4twelfth grade education program at any school, as defined in
5this subsection.
6    "Qualified education expense" means the amount incurred on
7behalf of a qualifying pupil in excess of $250 for tuition,
8book fees, and lab fees at the school in which the pupil is
9enrolled during the regular school year. With respect taxable
10years that end on or after December 31, 2020 and end prior to
11December 31, 2022, if the qualifying pupil attends a school
12that is subject to in-person attendance restrictions as a
13result of the COVID-19 pandemic, "qualified education expense"
14also includes school supplies, computers and tablets, and costs
15associated with increased internet access to facilitate remote
16learning that are purchased prior to July 1, 2022.
17    "School" means any public or nonpublic elementary or
18secondary school in Illinois that is in compliance with Title
19VI of the Civil Rights Act of 1964 and attendance at which
20satisfies the requirements of Section 26-1 of the School Code,
21except that nothing shall be construed to require a child to
22attend any particular public or nonpublic school to qualify for
23the credit under this Section.
24    "Custodian" means, with respect to qualifying pupils, an
25Illinois resident who is a parent, the parents, a legal
26guardian, or the legal guardians of the qualifying pupils.

 

 

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1    (n) River Edge Redevelopment Zone site remediation tax
2credit.
3        (i) For tax years ending on or after December 31, 2006,
4    a taxpayer shall be allowed a credit against the tax
5    imposed by subsections (a) and (b) of this Section for
6    certain amounts paid for unreimbursed eligible remediation
7    costs, as specified in this subsection. For purposes of
8    this Section, "unreimbursed eligible remediation costs"
9    means costs approved by the Illinois Environmental
10    Protection Agency ("Agency") under Section 58.14a of the
11    Environmental Protection Act that were paid in performing
12    environmental remediation at a site within a River Edge
13    Redevelopment Zone for which a No Further Remediation
14    Letter was issued by the Agency and recorded under Section
15    58.10 of the Environmental Protection Act. The credit must
16    be claimed for the taxable year in which Agency approval of
17    the eligible remediation costs is granted. The credit is
18    not available to any taxpayer if the taxpayer or any
19    related party caused or contributed to, in any material
20    respect, a release of regulated substances on, in, or under
21    the site that was identified and addressed by the remedial
22    action pursuant to the Site Remediation Program of the
23    Environmental Protection Act. Determinations as to credit
24    availability for purposes of this Section shall be made
25    consistent with rules adopted by the Pollution Control
26    Board pursuant to the Illinois Administrative Procedure

 

 

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1    Act for the administration and enforcement of Section 58.9
2    of the Environmental Protection Act. For purposes of this
3    Section, "taxpayer" includes a person whose tax attributes
4    the taxpayer has succeeded to under Section 381 of the
5    Internal Revenue Code and "related party" includes the
6    persons disallowed a deduction for losses by paragraphs
7    (b), (c), and (f)(1) of Section 267 of the Internal Revenue
8    Code by virtue of being a related taxpayer, as well as any
9    of its partners. The credit allowed against the tax imposed
10    by subsections (a) and (b) shall be equal to 25% of the
11    unreimbursed eligible remediation costs in excess of
12    $100,000 per site.
13        (ii) A credit allowed under this subsection that is
14    unused in the year the credit is earned may be carried
15    forward to each of the 5 taxable years following the year
16    for which the credit is first earned until it is used. This
17    credit shall be applied first to the earliest year for
18    which there is a liability. If there is a credit under this
19    subsection from more than one tax year that is available to
20    offset a liability, the earliest credit arising under this
21    subsection shall be applied first. A credit allowed under
22    this subsection may be sold to a buyer as part of a sale of
23    all or part of the remediation site for which the credit
24    was granted. The purchaser of a remediation site and the
25    tax credit shall succeed to the unused credit and remaining
26    carry-forward period of the seller. To perfect the

 

 

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1    transfer, the assignor shall record the transfer in the
2    chain of title for the site and provide written notice to
3    the Director of the Illinois Department of Revenue of the
4    assignor's intent to sell the remediation site and the
5    amount of the tax credit to be transferred as a portion of
6    the sale. In no event may a credit be transferred to any
7    taxpayer if the taxpayer or a related party would not be
8    eligible under the provisions of subsection (i).
9        (iii) For purposes of this Section, the term "site"
10    shall have the same meaning as under Section 58.2 of the
11    Environmental Protection Act.
12    (o) For each of taxable years during the Compassionate Use
13of Medical Cannabis Program, a surcharge is imposed on all
14taxpayers on income arising from the sale or exchange of
15capital assets, depreciable business property, real property
16used in the trade or business, and Section 197 intangibles of
17an organization registrant under the Compassionate Use of
18Medical Cannabis Program Act. The amount of the surcharge is
19equal to the amount of federal income tax liability for the
20taxable year attributable to those sales and exchanges. The
21surcharge imposed does not apply if:
22        (1) the medical cannabis cultivation center
23    registration, medical cannabis dispensary registration, or
24    the property of a registration is transferred as a result
25    of any of the following:
26            (A) bankruptcy, a receivership, or a debt

 

 

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1        adjustment initiated by or against the initial
2        registration or the substantial owners of the initial
3        registration;
4            (B) cancellation, revocation, or termination of
5        any registration by the Illinois Department of Public
6        Health;
7            (C) a determination by the Illinois Department of
8        Public Health that transfer of the registration is in
9        the best interests of Illinois qualifying patients as
10        defined by the Compassionate Use of Medical Cannabis
11        Program Act;
12            (D) the death of an owner of the equity interest in
13        a registrant;
14            (E) the acquisition of a controlling interest in
15        the stock or substantially all of the assets of a
16        publicly traded company;
17            (F) a transfer by a parent company to a wholly
18        owned subsidiary; or
19            (G) the transfer or sale to or by one person to
20        another person where both persons were initial owners
21        of the registration when the registration was issued;
22        or
23        (2) the cannabis cultivation center registration,
24    medical cannabis dispensary registration, or the
25    controlling interest in a registrant's property is
26    transferred in a transaction to lineal descendants in which

 

 

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1    no gain or loss is recognized or as a result of a
2    transaction in accordance with Section 351 of the Internal
3    Revenue Code in which no gain or loss is recognized.
4(Source: P.A. 100-22, eff. 7-6-17; 101-8, see Section 99 for
5effective date; 101-9, eff. 6-5-19; 101-31, eff. 6-28-19;
6101-207, eff. 8-2-19; 101-363, eff. 8-9-19; revised 9-17-19.)
 
7    Section 95. No acceleration or delay. Where this Act makes
8changes in a statute that is represented in this Act by text
9that is not yet or no longer in effect (for example, a Section
10represented by multiple versions), the use of that text does
11not accelerate or delay the taking effect of (i) the changes
12made by this Act or (ii) provisions derived from any other
13Public Act.
 
14    Section 99. Effective date. This Act takes effect upon
15becoming law.