101ST GENERAL ASSEMBLY
State of Illinois
2019 and 2020
SB1515

 

Introduced 2/15/2019, by Sen. Toi W. Hutchinson

 

SYNOPSIS AS INTRODUCED:
 
35 ILCS 5/203  from Ch. 120, par. 2-203

    Amends the Illinois Income Tax Act. Creates a deduction for amounts included in the taxpayer's adjusted gross income for certain fringe benefits. Effective immediately.


LRB101 08648 HLH 53732 b

FISCAL NOTE ACT MAY APPLY

 

 

A BILL FOR

 

SB1515LRB101 08648 HLH 53732 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 203 as follows:
 
6    (35 ILCS 5/203)  (from Ch. 120, par. 2-203)
7    Sec. 203. Base income defined.
8    (a) Individuals.
9        (1) In general. In the case of an individual, base
10    income means an amount equal to the taxpayer's adjusted
11    gross income for the taxable year as modified by paragraph
12    (2).
13        (2) Modifications. The adjusted gross income referred
14    to in paragraph (1) shall be modified by adding thereto the
15    sum of the following amounts:
16            (A) An amount equal to all amounts paid or accrued
17        to the taxpayer as interest or dividends during the
18        taxable year to the extent excluded from gross income
19        in the computation of adjusted gross income, except
20        stock dividends of qualified public utilities
21        described in Section 305(e) of the Internal Revenue
22        Code;
23            (B) An amount equal to the amount of tax imposed by

 

 

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1        this Act to the extent deducted from gross income in
2        the computation of adjusted gross income for the
3        taxable year;
4            (C) An amount equal to the amount received during
5        the taxable year as a recovery or refund of real
6        property taxes paid with respect to the taxpayer's
7        principal residence under the Revenue Act of 1939 and
8        for which a deduction was previously taken under
9        subparagraph (L) of this paragraph (2) prior to July 1,
10        1991, the retrospective application date of Article 4
11        of Public Act 87-17. In the case of multi-unit or
12        multi-use structures and farm dwellings, the taxes on
13        the taxpayer's principal residence shall be that
14        portion of the total taxes for the entire property
15        which is attributable to such principal residence;
16            (D) An amount equal to the amount of the capital
17        gain deduction allowable under the Internal Revenue
18        Code, to the extent deducted from gross income in the
19        computation of adjusted gross income;
20            (D-5) An amount, to the extent not included in
21        adjusted gross income, equal to the amount of money
22        withdrawn by the taxpayer in the taxable year from a
23        medical care savings account and the interest earned on
24        the account in the taxable year of a withdrawal
25        pursuant to subsection (b) of Section 20 of the Medical
26        Care Savings Account Act or subsection (b) of Section

 

 

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1        20 of the Medical Care Savings Account Act of 2000;
2            (D-10) For taxable years ending after December 31,
3        1997, an amount equal to any eligible remediation costs
4        that the individual deducted in computing adjusted
5        gross income and for which the individual claims a
6        credit under subsection (l) of Section 201;
7            (D-15) For taxable years 2001 and thereafter, an
8        amount equal to the bonus depreciation deduction taken
9        on the taxpayer's federal income tax return for the
10        taxable year under subsection (k) of Section 168 of the
11        Internal Revenue Code;
12            (D-16) If the taxpayer sells, transfers, abandons,
13        or otherwise disposes of property for which the
14        taxpayer was required in any taxable year to make an
15        addition modification under subparagraph (D-15), then
16        an amount equal to the aggregate amount of the
17        deductions taken in all taxable years under
18        subparagraph (Z) with respect to that property.
19            If the taxpayer continues to own property through
20        the last day of the last tax year for which the
21        taxpayer may claim a depreciation deduction for
22        federal income tax purposes and for which the taxpayer
23        was allowed in any taxable year to make a subtraction
24        modification under subparagraph (Z), then an amount
25        equal to that subtraction modification.
26            The taxpayer is required to make the addition

 

 

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1        modification under this subparagraph only once with
2        respect to any one piece of property;
3            (D-17) An amount equal to the amount otherwise
4        allowed as a deduction in computing base income for
5        interest paid, accrued, or incurred, directly or
6        indirectly, (i) for taxable years ending on or after
7        December 31, 2004, to a foreign person who would be a
8        member of the same unitary business group but for the
9        fact that foreign person's business activity outside
10        the United States is 80% or more of the foreign
11        person's total business activity and (ii) for taxable
12        years ending on or after December 31, 2008, to a person
13        who would be a member of the same unitary business
14        group but for the fact that the person is prohibited
15        under Section 1501(a)(27) from being included in the
16        unitary business group because he or she is ordinarily
17        required to apportion business income under different
18        subsections of Section 304. The addition modification
19        required by this subparagraph shall be reduced to the
20        extent that dividends were included in base income of
21        the unitary group for the same taxable year and
22        received by the taxpayer or by a member of the
23        taxpayer's unitary business group (including amounts
24        included in gross income under Sections 951 through 964
25        of the Internal Revenue Code and amounts included in
26        gross income under Section 78 of the Internal Revenue

 

 

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1        Code) with respect to the stock of the same person to
2        whom the interest was paid, accrued, or incurred.
3            This paragraph shall not apply to the following:
4                (i) an item of interest paid, accrued, or
5            incurred, directly or indirectly, to a person who
6            is subject in a foreign country or state, other
7            than a state which requires mandatory unitary
8            reporting, to a tax on or measured by net income
9            with respect to such interest; or
10                (ii) an item of interest paid, accrued, or
11            incurred, directly or indirectly, to a person if
12            the taxpayer can establish, based on a
13            preponderance of the evidence, both of the
14            following:
15                    (a) the person, during the same taxable
16                year, paid, accrued, or incurred, the interest
17                to a person that is not a related member, and
18                    (b) the transaction giving rise to the
19                interest expense between the taxpayer and the
20                person did not have as a principal purpose the
21                avoidance of Illinois income tax, and is paid
22                pursuant to a contract or agreement that
23                reflects an arm's-length interest rate and
24                terms; or
25                (iii) the taxpayer can establish, based on
26            clear and convincing evidence, that the interest

 

 

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1            paid, accrued, or incurred relates to a contract or
2            agreement entered into at arm's-length rates and
3            terms and the principal purpose for the payment is
4            not federal or Illinois tax avoidance; or
5                (iv) an item of interest paid, accrued, or
6            incurred, directly or indirectly, to a person if
7            the taxpayer establishes by clear and convincing
8            evidence that the adjustments are unreasonable; or
9            if the taxpayer and the Director agree in writing
10            to the application or use of an alternative method
11            of apportionment under Section 304(f).
12                Nothing in this subsection shall preclude the
13            Director from making any other adjustment
14            otherwise allowed under Section 404 of this Act for
15            any tax year beginning after the effective date of
16            this amendment provided such adjustment is made
17            pursuant to regulation adopted by the Department
18            and such regulations provide methods and standards
19            by which the Department will utilize its authority
20            under Section 404 of this Act;
21            (D-18) An amount equal to the amount of intangible
22        expenses and costs otherwise allowed as a deduction in
23        computing base income, and that were paid, accrued, or
24        incurred, directly or indirectly, (i) for taxable
25        years ending on or after December 31, 2004, to a
26        foreign person who would be a member of the same

 

 

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1        unitary business group but for the fact that the
2        foreign person's business activity outside the United
3        States is 80% or more of that person's total business
4        activity and (ii) for taxable years ending on or after
5        December 31, 2008, to a person who would be a member of
6        the same unitary business group but for the fact that
7        the person is prohibited under Section 1501(a)(27)
8        from being included in the unitary business group
9        because he or she is ordinarily required to apportion
10        business income under different subsections of Section
11        304. The addition modification required by this
12        subparagraph shall be reduced to the extent that
13        dividends were included in base income of the unitary
14        group for the same taxable year and received by the
15        taxpayer or by a member of the taxpayer's unitary
16        business group (including amounts included in gross
17        income under Sections 951 through 964 of the Internal
18        Revenue Code and amounts included in gross income under
19        Section 78 of the Internal Revenue Code) with respect
20        to the stock of the same person to whom the intangible
21        expenses and costs were directly or indirectly paid,
22        incurred, or accrued. The preceding sentence does not
23        apply to the extent that the same dividends caused a
24        reduction to the addition modification required under
25        Section 203(a)(2)(D-17) of this Act. As used in this
26        subparagraph, the term "intangible expenses and costs"

 

 

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1        includes (1) expenses, losses, and costs for, or
2        related to, the direct or indirect acquisition, use,
3        maintenance or management, ownership, sale, exchange,
4        or any other disposition of intangible property; (2)
5        losses incurred, directly or indirectly, from
6        factoring transactions or discounting transactions;
7        (3) royalty, patent, technical, and copyright fees;
8        (4) licensing fees; and (5) other similar expenses and
9        costs. For purposes of this subparagraph, "intangible
10        property" includes patents, patent applications, trade
11        names, trademarks, service marks, copyrights, mask
12        works, trade secrets, and similar types of intangible
13        assets.
14            This paragraph shall not apply to the following:
15                (i) any item of intangible expenses or costs
16            paid, accrued, or incurred, directly or
17            indirectly, from a transaction with a person who is
18            subject in a foreign country or state, other than a
19            state which requires mandatory unitary reporting,
20            to a tax on or measured by net income with respect
21            to such item; or
22                (ii) any item of intangible expense or cost
23            paid, accrued, or incurred, directly or
24            indirectly, if the taxpayer can establish, based
25            on a preponderance of the evidence, both of the
26            following:

 

 

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1                    (a) the person during the same taxable
2                year paid, accrued, or incurred, the
3                intangible expense or cost to a person that is
4                not a related member, and
5                    (b) the transaction giving rise to the
6                intangible expense or cost between the
7                taxpayer and the person did not have as a
8                principal purpose the avoidance of Illinois
9                income tax, and is paid pursuant to a contract
10                or agreement that reflects arm's-length terms;
11                or
12                (iii) any item of intangible expense or cost
13            paid, accrued, or incurred, directly or
14            indirectly, from a transaction with a person if the
15            taxpayer establishes by clear and convincing
16            evidence, that the adjustments are unreasonable;
17            or if the taxpayer and the Director agree in
18            writing to the application or use of an alternative
19            method of apportionment under Section 304(f);
20                Nothing in this subsection shall preclude the
21            Director from making any other adjustment
22            otherwise allowed under Section 404 of this Act for
23            any tax year beginning after the effective date of
24            this amendment provided such adjustment is made
25            pursuant to regulation adopted by the Department
26            and such regulations provide methods and standards

 

 

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1            by which the Department will utilize its authority
2            under Section 404 of this Act;
3            (D-19) For taxable years ending on or after
4        December 31, 2008, an amount equal to the amount of
5        insurance premium expenses and costs otherwise allowed
6        as a deduction in computing base income, and that were
7        paid, accrued, or incurred, directly or indirectly, to
8        a person who would be a member of the same unitary
9        business group but for the fact that the person is
10        prohibited under Section 1501(a)(27) from being
11        included in the unitary business group because he or
12        she is ordinarily required to apportion business
13        income under different subsections of Section 304. The
14        addition modification required by this subparagraph
15        shall be reduced to the extent that dividends were
16        included in base income of the unitary group for the
17        same taxable year and received by the taxpayer or by a
18        member of the taxpayer's unitary business group
19        (including amounts included in gross income under
20        Sections 951 through 964 of the Internal Revenue Code
21        and amounts included in gross income under Section 78
22        of the Internal Revenue Code) with respect to the stock
23        of the same person to whom the premiums and costs were
24        directly or indirectly paid, incurred, or accrued. The
25        preceding sentence does not apply to the extent that
26        the same dividends caused a reduction to the addition

 

 

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1        modification required under Section 203(a)(2)(D-17) or
2        Section 203(a)(2)(D-18) of this Act.
3            (D-20) For taxable years beginning on or after
4        January 1, 2002 and ending on or before December 31,
5        2006, in the case of a distribution from a qualified
6        tuition program under Section 529 of the Internal
7        Revenue Code, other than (i) a distribution from a
8        College Savings Pool created under Section 16.5 of the
9        State Treasurer Act or (ii) a distribution from the
10        Illinois Prepaid Tuition Trust Fund, an amount equal to
11        the amount excluded from gross income under Section
12        529(c)(3)(B). For taxable years beginning on or after
13        January 1, 2007, in the case of a distribution from a
14        qualified tuition program under Section 529 of the
15        Internal Revenue Code, other than (i) a distribution
16        from a College Savings Pool created under Section 16.5
17        of the State Treasurer Act, (ii) a distribution from
18        the Illinois Prepaid Tuition Trust Fund, or (iii) a
19        distribution from a qualified tuition program under
20        Section 529 of the Internal Revenue Code that (I)
21        adopts and determines that its offering materials
22        comply with the College Savings Plans Network's
23        disclosure principles and (II) has made reasonable
24        efforts to inform in-state residents of the existence
25        of in-state qualified tuition programs by informing
26        Illinois residents directly and, where applicable, to

 

 

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1        inform financial intermediaries distributing the
2        program to inform in-state residents of the existence
3        of in-state qualified tuition programs at least
4        annually, an amount equal to the amount excluded from
5        gross income under Section 529(c)(3)(B).
6            For the purposes of this subparagraph (D-20), a
7        qualified tuition program has made reasonable efforts
8        if it makes disclosures (which may use the term
9        "in-state program" or "in-state plan" and need not
10        specifically refer to Illinois or its qualified
11        programs by name) (i) directly to prospective
12        participants in its offering materials or makes a
13        public disclosure, such as a website posting; and (ii)
14        where applicable, to intermediaries selling the
15        out-of-state program in the same manner that the
16        out-of-state program distributes its offering
17        materials;
18            (D-20.5) For taxable years beginning on or after
19        January 1, 2018, in the case of a distribution from a
20        qualified ABLE program under Section 529A of the
21        Internal Revenue Code, other than a distribution from a
22        qualified ABLE program created under Section 16.6 of
23        the State Treasurer Act, an amount equal to the amount
24        excluded from gross income under Section 529A(c)(1)(B)
25        of the Internal Revenue Code;
26            (D-21) For taxable years beginning on or after

 

 

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1        January 1, 2007, in the case of transfer of moneys from
2        a qualified tuition program under Section 529 of the
3        Internal Revenue Code that is administered by the State
4        to an out-of-state program, an amount equal to the
5        amount of moneys previously deducted from base income
6        under subsection (a)(2)(Y) of this Section;
7            (D-21.5) For taxable years beginning on or after
8        January 1, 2018, in the case of the transfer of moneys
9        from a qualified tuition program under Section 529 or a
10        qualified ABLE program under Section 529A of the
11        Internal Revenue Code that is administered by this
12        State to an ABLE account established under an
13        out-of-state ABLE account program, an amount equal to
14        the contribution component of the transferred amount
15        that was previously deducted from base income under
16        subsection (a)(2)(Y) or subsection (a)(2)(HH) of this
17        Section;
18            (D-22) For taxable years beginning on or after
19        January 1, 2009, and prior to January 1, 2018, in the
20        case of a nonqualified withdrawal or refund of moneys
21        from a qualified tuition program under Section 529 of
22        the Internal Revenue Code administered by the State
23        that is not used for qualified expenses at an eligible
24        education institution, an amount equal to the
25        contribution component of the nonqualified withdrawal
26        or refund that was previously deducted from base income

 

 

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1        under subsection (a)(2)(y) of this Section, provided
2        that the withdrawal or refund did not result from the
3        beneficiary's death or disability. For taxable years
4        beginning on or after January 1, 2018: (1) in the case
5        of a nonqualified withdrawal or refund, as defined
6        under Section 16.5 of the State Treasurer Act, of
7        moneys from a qualified tuition program under Section
8        529 of the Internal Revenue Code administered by the
9        State, an amount equal to the contribution component of
10        the nonqualified withdrawal or refund that was
11        previously deducted from base income under subsection
12        (a)(2)(Y) of this Section, and (2) in the case of a
13        nonqualified withdrawal or refund from a qualified
14        ABLE program under Section 529A of the Internal Revenue
15        Code administered by the State that is not used for
16        qualified disability expenses, an amount equal to the
17        contribution component of the nonqualified withdrawal
18        or refund that was previously deducted from base income
19        under subsection (a)(2)(HH) of this Section;
20            (D-23) An amount equal to the credit allowable to
21        the taxpayer under Section 218(a) of this Act,
22        determined without regard to Section 218(c) of this
23        Act;
24            (D-24) For taxable years ending on or after
25        December 31, 2017, an amount equal to the deduction
26        allowed under Section 199 of the Internal Revenue Code

 

 

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1        for the taxable year;
2    and by deducting from the total so obtained the sum of the
3    following amounts:
4            (E) For taxable years ending before December 31,
5        2001, any amount included in such total in respect of
6        any compensation (including but not limited to any
7        compensation paid or accrued to a serviceman while a
8        prisoner of war or missing in action) paid to a
9        resident by reason of being on active duty in the Armed
10        Forces of the United States and in respect of any
11        compensation paid or accrued to a resident who as a
12        governmental employee was a prisoner of war or missing
13        in action, and in respect of any compensation paid to a
14        resident in 1971 or thereafter for annual training
15        performed pursuant to Sections 502 and 503, Title 32,
16        United States Code as a member of the Illinois National
17        Guard or, beginning with taxable years ending on or
18        after December 31, 2007, the National Guard of any
19        other state. For taxable years ending on or after
20        December 31, 2001, any amount included in such total in
21        respect of any compensation (including but not limited
22        to any compensation paid or accrued to a serviceman
23        while a prisoner of war or missing in action) paid to a
24        resident by reason of being a member of any component
25        of the Armed Forces of the United States and in respect
26        of any compensation paid or accrued to a resident who

 

 

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1        as a governmental employee was a prisoner of war or
2        missing in action, and in respect of any compensation
3        paid to a resident in 2001 or thereafter by reason of
4        being a member of the Illinois National Guard or,
5        beginning with taxable years ending on or after
6        December 31, 2007, the National Guard of any other
7        state. The provisions of this subparagraph (E) are
8        exempt from the provisions of Section 250;
9            (F) An amount equal to all amounts included in such
10        total pursuant to the provisions of Sections 402(a),
11        402(c), 403(a), 403(b), 406(a), 407(a), and 408 of the
12        Internal Revenue Code, or included in such total as
13        distributions under the provisions of any retirement
14        or disability plan for employees of any governmental
15        agency or unit, or retirement payments to retired
16        partners, which payments are excluded in computing net
17        earnings from self employment by Section 1402 of the
18        Internal Revenue Code and regulations adopted pursuant
19        thereto;
20            (G) The valuation limitation amount;
21            (H) An amount equal to the amount of any tax
22        imposed by this Act which was refunded to the taxpayer
23        and included in such total for the taxable year;
24            (I) An amount equal to all amounts included in such
25        total pursuant to the provisions of Section 111 of the
26        Internal Revenue Code as a recovery of items previously

 

 

SB1515- 17 -LRB101 08648 HLH 53732 b

1        deducted from adjusted gross income in the computation
2        of taxable income;
3            (J) An amount equal to those dividends included in
4        such total which were paid by a corporation which
5        conducts business operations in a River Edge
6        Redevelopment Zone or zones created under the River
7        Edge Redevelopment Zone Act, and conducts
8        substantially all of its operations in a River Edge
9        Redevelopment Zone or zones. This subparagraph (J) is
10        exempt from the provisions of Section 250;
11            (K) An amount equal to those dividends included in
12        such total that were paid by a corporation that
13        conducts business operations in a federally designated
14        Foreign Trade Zone or Sub-Zone and that is designated a
15        High Impact Business located in Illinois; provided
16        that dividends eligible for the deduction provided in
17        subparagraph (J) of paragraph (2) of this subsection
18        shall not be eligible for the deduction provided under
19        this subparagraph (K);
20            (L) For taxable years ending after December 31,
21        1983, an amount equal to all social security benefits
22        and railroad retirement benefits included in such
23        total pursuant to Sections 72(r) and 86 of the Internal
24        Revenue Code;
25            (M) With the exception of any amounts subtracted
26        under subparagraph (N), an amount equal to the sum of

 

 

SB1515- 18 -LRB101 08648 HLH 53732 b

1        all amounts disallowed as deductions by (i) Sections
2        171(a)(2), and 265(a)(2) 265(2) of the Internal
3        Revenue Code, and all amounts of expenses allocable to
4        interest and disallowed as deductions by Section
5        265(a)(1) 265(1) of the Internal Revenue Code; and (ii)
6        for taxable years ending on or after August 13, 1999,
7        Sections 171(a)(2), 265, 280C, and 832(b)(5)(B)(i) of
8        the Internal Revenue Code, plus, for taxable years
9        ending on or after December 31, 2011, Section 45G(e)(3)
10        of the Internal Revenue Code and, for taxable years
11        ending on or after December 31, 2008, any amount
12        included in gross income under Section 87 of the
13        Internal Revenue Code; the provisions of this
14        subparagraph are exempt from the provisions of Section
15        250;
16            (N) An amount equal to all amounts included in such
17        total which are exempt from taxation by this State
18        either by reason of its statutes or Constitution or by
19        reason of the Constitution, treaties or statutes of the
20        United States; provided that, in the case of any
21        statute of this State that exempts income derived from
22        bonds or other obligations from the tax imposed under
23        this Act, the amount exempted shall be the interest net
24        of bond premium amortization;
25            (O) An amount equal to any contribution made to a
26        job training project established pursuant to the Tax

 

 

SB1515- 19 -LRB101 08648 HLH 53732 b

1        Increment Allocation Redevelopment Act;
2            (P) An amount equal to the amount of the deduction
3        used to compute the federal income tax credit for
4        restoration of substantial amounts held under claim of
5        right for the taxable year pursuant to Section 1341 of
6        the Internal Revenue Code or of any itemized deduction
7        taken from adjusted gross income in the computation of
8        taxable income for restoration of substantial amounts
9        held under claim of right for the taxable year;
10            (Q) An amount equal to any amounts included in such
11        total, received by the taxpayer as an acceleration in
12        the payment of life, endowment or annuity benefits in
13        advance of the time they would otherwise be payable as
14        an indemnity for a terminal illness;
15            (R) An amount equal to the amount of any federal or
16        State bonus paid to veterans of the Persian Gulf War;
17            (S) An amount, to the extent included in adjusted
18        gross income, equal to the amount of a contribution
19        made in the taxable year on behalf of the taxpayer to a
20        medical care savings account established under the
21        Medical Care Savings Account Act or the Medical Care
22        Savings Account Act of 2000 to the extent the
23        contribution is accepted by the account administrator
24        as provided in that Act;
25            (T) An amount, to the extent included in adjusted
26        gross income, equal to the amount of interest earned in

 

 

SB1515- 20 -LRB101 08648 HLH 53732 b

1        the taxable year on a medical care savings account
2        established under the Medical Care Savings Account Act
3        or the Medical Care Savings Account Act of 2000 on
4        behalf of the taxpayer, other than interest added
5        pursuant to item (D-5) of this paragraph (2);
6            (U) For one taxable year beginning on or after
7        January 1, 1994, an amount equal to the total amount of
8        tax imposed and paid under subsections (a) and (b) of
9        Section 201 of this Act on grant amounts received by
10        the taxpayer under the Nursing Home Grant Assistance
11        Act during the taxpayer's taxable years 1992 and 1993;
12            (V) Beginning with tax years ending on or after
13        December 31, 1995 and ending with tax years ending on
14        or before December 31, 2004, an amount equal to the
15        amount paid by a taxpayer who is a self-employed
16        taxpayer, a partner of a partnership, or a shareholder
17        in a Subchapter S corporation for health insurance or
18        long-term care insurance for that taxpayer or that
19        taxpayer's spouse or dependents, to the extent that the
20        amount paid for that health insurance or long-term care
21        insurance may be deducted under Section 213 of the
22        Internal Revenue Code, has not been deducted on the
23        federal income tax return of the taxpayer, and does not
24        exceed the taxable income attributable to that
25        taxpayer's income, self-employment income, or
26        Subchapter S corporation income; except that no

 

 

SB1515- 21 -LRB101 08648 HLH 53732 b

1        deduction shall be allowed under this item (V) if the
2        taxpayer is eligible to participate in any health
3        insurance or long-term care insurance plan of an
4        employer of the taxpayer or the taxpayer's spouse. The
5        amount of the health insurance and long-term care
6        insurance subtracted under this item (V) shall be
7        determined by multiplying total health insurance and
8        long-term care insurance premiums paid by the taxpayer
9        times a number that represents the fractional
10        percentage of eligible medical expenses under Section
11        213 of the Internal Revenue Code of 1986 not actually
12        deducted on the taxpayer's federal income tax return;
13            (W) For taxable years beginning on or after January
14        1, 1998, all amounts included in the taxpayer's federal
15        gross income in the taxable year from amounts converted
16        from a regular IRA to a Roth IRA. This paragraph is
17        exempt from the provisions of Section 250;
18            (X) For taxable year 1999 and thereafter, an amount
19        equal to the amount of any (i) distributions, to the
20        extent includible in gross income for federal income
21        tax purposes, made to the taxpayer because of his or
22        her status as a victim of persecution for racial or
23        religious reasons by Nazi Germany or any other Axis
24        regime or as an heir of the victim and (ii) items of
25        income, to the extent includible in gross income for
26        federal income tax purposes, attributable to, derived

 

 

SB1515- 22 -LRB101 08648 HLH 53732 b

1        from or in any way related to assets stolen from,
2        hidden from, or otherwise lost to a victim of
3        persecution for racial or religious reasons by Nazi
4        Germany or any other Axis regime immediately prior to,
5        during, and immediately after World War II, including,
6        but not limited to, interest on the proceeds receivable
7        as insurance under policies issued to a victim of
8        persecution for racial or religious reasons by Nazi
9        Germany or any other Axis regime by European insurance
10        companies immediately prior to and during World War II;
11        provided, however, this subtraction from federal
12        adjusted gross income does not apply to assets acquired
13        with such assets or with the proceeds from the sale of
14        such assets; provided, further, this paragraph shall
15        only apply to a taxpayer who was the first recipient of
16        such assets after their recovery and who is a victim of
17        persecution for racial or religious reasons by Nazi
18        Germany or any other Axis regime or as an heir of the
19        victim. The amount of and the eligibility for any
20        public assistance, benefit, or similar entitlement is
21        not affected by the inclusion of items (i) and (ii) of
22        this paragraph in gross income for federal income tax
23        purposes. This paragraph is exempt from the provisions
24        of Section 250;
25            (Y) For taxable years beginning on or after January
26        1, 2002 and ending on or before December 31, 2004,

 

 

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1        moneys contributed in the taxable year to a College
2        Savings Pool account under Section 16.5 of the State
3        Treasurer Act, except that amounts excluded from gross
4        income under Section 529(c)(3)(C)(i) of the Internal
5        Revenue Code shall not be considered moneys
6        contributed under this subparagraph (Y). For taxable
7        years beginning on or after January 1, 2005, a maximum
8        of $10,000 contributed in the taxable year to (i) a
9        College Savings Pool account under Section 16.5 of the
10        State Treasurer Act or (ii) the Illinois Prepaid
11        Tuition Trust Fund, except that amounts excluded from
12        gross income under Section 529(c)(3)(C)(i) of the
13        Internal Revenue Code shall not be considered moneys
14        contributed under this subparagraph (Y). For purposes
15        of this subparagraph, contributions made by an
16        employer on behalf of an employee, or matching
17        contributions made by an employee, shall be treated as
18        made by the employee. This subparagraph (Y) is exempt
19        from the provisions of Section 250;
20            (Z) For taxable years 2001 and thereafter, for the
21        taxable year in which the bonus depreciation deduction
22        is taken on the taxpayer's federal income tax return
23        under subsection (k) of Section 168 of the Internal
24        Revenue Code and for each applicable taxable year
25        thereafter, an amount equal to "x", where:
26                (1) "y" equals the amount of the depreciation

 

 

SB1515- 24 -LRB101 08648 HLH 53732 b

1            deduction taken for the taxable year on the
2            taxpayer's federal income tax return on property
3            for which the bonus depreciation deduction was
4            taken in any year under subsection (k) of Section
5            168 of the Internal Revenue Code, but not including
6            the bonus depreciation deduction;
7                (2) for taxable years ending on or before
8            December 31, 2005, "x" equals "y" multiplied by 30
9            and then divided by 70 (or "y" multiplied by
10            0.429); and
11                (3) for taxable years ending after December
12            31, 2005:
13                    (i) for property on which a bonus
14                depreciation deduction of 30% of the adjusted
15                basis was taken, "x" equals "y" multiplied by
16                30 and then divided by 70 (or "y" multiplied by
17                0.429); and
18                    (ii) for property on which a bonus
19                depreciation deduction of 50% of the adjusted
20                basis was taken, "x" equals "y" multiplied by
21                1.0.
22            The aggregate amount deducted under this
23        subparagraph in all taxable years for any one piece of
24        property may not exceed the amount of the bonus
25        depreciation deduction taken on that property on the
26        taxpayer's federal income tax return under subsection

 

 

SB1515- 25 -LRB101 08648 HLH 53732 b

1        (k) of Section 168 of the Internal Revenue Code. This
2        subparagraph (Z) is exempt from the provisions of
3        Section 250;
4            (AA) If the taxpayer sells, transfers, abandons,
5        or otherwise disposes of property for which the
6        taxpayer was required in any taxable year to make an
7        addition modification under subparagraph (D-15), then
8        an amount equal to that addition modification.
9            If the taxpayer continues to own property through
10        the last day of the last tax year for which the
11        taxpayer may claim a depreciation deduction for
12        federal income tax purposes and for which the taxpayer
13        was required in any taxable year to make an addition
14        modification under subparagraph (D-15), then an amount
15        equal to that addition modification.
16            The taxpayer is allowed to take the deduction under
17        this subparagraph only once with respect to any one
18        piece of property.
19            This subparagraph (AA) is exempt from the
20        provisions of Section 250;
21            (BB) Any amount included in adjusted gross income,
22        other than salary, received by a driver in a
23        ridesharing arrangement using a motor vehicle;
24            (CC) The amount of (i) any interest income (net of
25        the deductions allocable thereto) taken into account
26        for the taxable year with respect to a transaction with

 

 

SB1515- 26 -LRB101 08648 HLH 53732 b

1        a taxpayer that is required to make an addition
2        modification with respect to such transaction under
3        Section 203(a)(2)(D-17), 203(b)(2)(E-12),
4        203(c)(2)(G-12), or 203(d)(2)(D-7), but not to exceed
5        the amount of that addition modification, and (ii) any
6        income from intangible property (net of the deductions
7        allocable thereto) taken into account for the taxable
8        year with respect to a transaction with a taxpayer that
9        is required to make an addition modification with
10        respect to such transaction under Section
11        203(a)(2)(D-18), 203(b)(2)(E-13), 203(c)(2)(G-13), or
12        203(d)(2)(D-8), but not to exceed the amount of that
13        addition modification. This subparagraph (CC) is
14        exempt from the provisions of Section 250;
15            (DD) An amount equal to the interest income taken
16        into account for the taxable year (net of the
17        deductions allocable thereto) with respect to
18        transactions with (i) a foreign person who would be a
19        member of the taxpayer's unitary business group but for
20        the fact that the foreign person's business activity
21        outside the United States is 80% or more of that
22        person's total business activity and (ii) for taxable
23        years ending on or after December 31, 2008, to a person
24        who would be a member of the same unitary business
25        group but for the fact that the person is prohibited
26        under Section 1501(a)(27) from being included in the

 

 

SB1515- 27 -LRB101 08648 HLH 53732 b

1        unitary business group because he or she is ordinarily
2        required to apportion business income under different
3        subsections of Section 304, but not to exceed the
4        addition modification required to be made for the same
5        taxable year under Section 203(a)(2)(D-17) for
6        interest paid, accrued, or incurred, directly or
7        indirectly, to the same person. This subparagraph (DD)
8        is exempt from the provisions of Section 250;
9            (EE) An amount equal to the income from intangible
10        property taken into account for the taxable year (net
11        of the deductions allocable thereto) with respect to
12        transactions with (i) a foreign person who would be a
13        member of the taxpayer's unitary business group but for
14        the fact that the foreign person's business activity
15        outside the United States is 80% or more of that
16        person's total business activity and (ii) for taxable
17        years ending on or after December 31, 2008, to a person
18        who would be a member of the same unitary business
19        group but for the fact that the person is prohibited
20        under Section 1501(a)(27) from being included in the
21        unitary business group because he or she is ordinarily
22        required to apportion business income under different
23        subsections of Section 304, but not to exceed the
24        addition modification required to be made for the same
25        taxable year under Section 203(a)(2)(D-18) for
26        intangible expenses and costs paid, accrued, or

 

 

SB1515- 28 -LRB101 08648 HLH 53732 b

1        incurred, directly or indirectly, to the same foreign
2        person. This subparagraph (EE) is exempt from the
3        provisions of Section 250;
4            (FF) An amount equal to any amount awarded to the
5        taxpayer during the taxable year by the Court of Claims
6        under subsection (c) of Section 8 of the Court of
7        Claims Act for time unjustly served in a State prison.
8        This subparagraph (FF) is exempt from the provisions of
9        Section 250;
10            (GG) For taxable years ending on or after December
11        31, 2011, in the case of a taxpayer who was required to
12        add back any insurance premiums under Section
13        203(a)(2)(D-19), such taxpayer may elect to subtract
14        that part of a reimbursement received from the
15        insurance company equal to the amount of the expense or
16        loss (including expenses incurred by the insurance
17        company) that would have been taken into account as a
18        deduction for federal income tax purposes if the
19        expense or loss had been uninsured. If a taxpayer makes
20        the election provided for by this subparagraph (GG),
21        the insurer to which the premiums were paid must add
22        back to income the amount subtracted by the taxpayer
23        pursuant to this subparagraph (GG). This subparagraph
24        (GG) is exempt from the provisions of Section 250; and
25            (HH) For taxable years beginning on or after
26        January 1, 2018 and prior to January 1, 2023, a maximum

 

 

SB1515- 29 -LRB101 08648 HLH 53732 b

1        of $10,000 contributed in the taxable year to a
2        qualified ABLE account under Section 16.6 of the State
3        Treasurer Act, except that amounts excluded from gross
4        income under Section 529(c)(3)(C)(i) or Section
5        529A(c)(1)(C) of the Internal Revenue Code shall not be
6        considered moneys contributed under this subparagraph
7        (HH). For purposes of this subparagraph (HH),
8        contributions made by an employer on behalf of an
9        employee, or matching contributions made by an
10        employee, shall be treated as made by the employee; and
11        .
12            (II) For tax years beginning on or after January 1,
13        2019, an amount equal to the amount included in the
14        taxpayer's federal adjusted gross income as as result
15        of the application of Section 512(a)(7) of the Internal
16        Revenue Code; this subparagraph is exempt from the
17        provisions of Section 250.
 
18    (b) Corporations.
19        (1) In general. In the case of a corporation, base
20    income means an amount equal to the taxpayer's taxable
21    income for the taxable year as modified by paragraph (2).
22        (2) Modifications. The taxable income referred to in
23    paragraph (1) shall be modified by adding thereto the sum
24    of the following amounts:
25            (A) An amount equal to all amounts paid or accrued

 

 

SB1515- 30 -LRB101 08648 HLH 53732 b

1        to the taxpayer as interest and all distributions
2        received from regulated investment companies during
3        the taxable year to the extent excluded from gross
4        income in the computation of taxable income;
5            (B) An amount equal to the amount of tax imposed by
6        this Act to the extent deducted from gross income in
7        the computation of taxable income for the taxable year;
8            (C) In the case of a regulated investment company,
9        an amount equal to the excess of (i) the net long-term
10        capital gain for the taxable year, over (ii) the amount
11        of the capital gain dividends designated as such in
12        accordance with Section 852(b)(3)(C) of the Internal
13        Revenue Code and any amount designated under Section
14        852(b)(3)(D) of the Internal Revenue Code,
15        attributable to the taxable year (this amendatory Act
16        of 1995 (Public Act 89-89) is declarative of existing
17        law and is not a new enactment);
18            (D) The amount of any net operating loss deduction
19        taken in arriving at taxable income, other than a net
20        operating loss carried forward from a taxable year
21        ending prior to December 31, 1986;
22            (E) For taxable years in which a net operating loss
23        carryback or carryforward from a taxable year ending
24        prior to December 31, 1986 is an element of taxable
25        income under paragraph (1) of subsection (e) or
26        subparagraph (E) of paragraph (2) of subsection (e),

 

 

SB1515- 31 -LRB101 08648 HLH 53732 b

1        the amount by which addition modifications other than
2        those provided by this subparagraph (E) exceeded
3        subtraction modifications in such earlier taxable
4        year, with the following limitations applied in the
5        order that they are listed:
6                (i) the addition modification relating to the
7            net operating loss carried back or forward to the
8            taxable year from any taxable year ending prior to
9            December 31, 1986 shall be reduced by the amount of
10            addition modification under this subparagraph (E)
11            which related to that net operating loss and which
12            was taken into account in calculating the base
13            income of an earlier taxable year, and
14                (ii) the addition modification relating to the
15            net operating loss carried back or forward to the
16            taxable year from any taxable year ending prior to
17            December 31, 1986 shall not exceed the amount of
18            such carryback or carryforward;
19            For taxable years in which there is a net operating
20        loss carryback or carryforward from more than one other
21        taxable year ending prior to December 31, 1986, the
22        addition modification provided in this subparagraph
23        (E) shall be the sum of the amounts computed
24        independently under the preceding provisions of this
25        subparagraph (E) for each such taxable year;
26            (E-5) For taxable years ending after December 31,

 

 

SB1515- 32 -LRB101 08648 HLH 53732 b

1        1997, an amount equal to any eligible remediation costs
2        that the corporation deducted in computing adjusted
3        gross income and for which the corporation claims a
4        credit under subsection (l) of Section 201;
5            (E-10) For taxable years 2001 and thereafter, an
6        amount equal to the bonus depreciation deduction taken
7        on the taxpayer's federal income tax return for the
8        taxable year under subsection (k) of Section 168 of the
9        Internal Revenue Code;
10            (E-11) If the taxpayer sells, transfers, abandons,
11        or otherwise disposes of property for which the
12        taxpayer was required in any taxable year to make an
13        addition modification under subparagraph (E-10), then
14        an amount equal to the aggregate amount of the
15        deductions taken in all taxable years under
16        subparagraph (T) with respect to that property.
17            If the taxpayer continues to own property through
18        the last day of the last tax year for which the
19        taxpayer may claim a depreciation deduction for
20        federal income tax purposes and for which the taxpayer
21        was allowed in any taxable year to make a subtraction
22        modification under subparagraph (T), then an amount
23        equal to that subtraction modification.
24            The taxpayer is required to make the addition
25        modification under this subparagraph only once with
26        respect to any one piece of property;

 

 

SB1515- 33 -LRB101 08648 HLH 53732 b

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

 

 

SB1515- 34 -LRB101 08648 HLH 53732 b

1        incurred.
2            This paragraph shall not apply to the following:
3                (i) an item of interest paid, accrued, or
4            incurred, directly or indirectly, to a person who
5            is subject in a foreign country or state, other
6            than a state which requires mandatory unitary
7            reporting, to a tax on or measured by net income
8            with respect to such interest; or
9                (ii) an item of interest paid, accrued, or
10            incurred, directly or indirectly, to a person if
11            the taxpayer can establish, based on a
12            preponderance of the evidence, both of the
13            following:
14                    (a) the person, during the same taxable
15                year, paid, accrued, or incurred, the interest
16                to a person that is not a related member, and
17                    (b) the transaction giving rise to the
18                interest expense between the taxpayer and the
19                person did not have as a principal purpose the
20                avoidance of Illinois income tax, and is paid
21                pursuant to a contract or agreement that
22                reflects an arm's-length interest rate and
23                terms; or
24                (iii) the taxpayer can establish, based on
25            clear and convincing evidence, that the interest
26            paid, accrued, or incurred relates to a contract or

 

 

SB1515- 35 -LRB101 08648 HLH 53732 b

1            agreement entered into at arm's-length rates and
2            terms and the principal purpose for the payment is
3            not federal or Illinois tax avoidance; or
4                (iv) an item of interest paid, accrued, or
5            incurred, directly or indirectly, to a person if
6            the taxpayer establishes by clear and convincing
7            evidence that the adjustments are unreasonable; or
8            if the taxpayer and the Director agree in writing
9            to the application or use of an alternative method
10            of apportionment under Section 304(f).
11                Nothing in this subsection shall preclude the
12            Director from making any other adjustment
13            otherwise allowed under Section 404 of this Act for
14            any tax year beginning after the effective date of
15            this amendment provided such adjustment is made
16            pursuant to regulation adopted by the Department
17            and such regulations provide methods and standards
18            by which the Department will utilize its authority
19            under Section 404 of this Act;
20            (E-13) An amount equal to the amount of intangible
21        expenses and costs otherwise allowed as a deduction in
22        computing base income, and that were paid, accrued, or
23        incurred, directly or indirectly, (i) for taxable
24        years ending on or after December 31, 2004, to a
25        foreign person who would be a member of the same
26        unitary business group but for the fact that the

 

 

SB1515- 36 -LRB101 08648 HLH 53732 b

1        foreign person's business activity outside the United
2        States is 80% or more of that person's total business
3        activity and (ii) for taxable years ending on or after
4        December 31, 2008, to a person who would be a member of
5        the same unitary business group but for the fact that
6        the person is prohibited under Section 1501(a)(27)
7        from being included in the unitary business group
8        because he or she is ordinarily required to apportion
9        business income under different subsections of Section
10        304. The addition modification required by this
11        subparagraph shall be reduced to the extent that
12        dividends were included in base income of the unitary
13        group for the same taxable year and received by the
14        taxpayer or by a member of the taxpayer's unitary
15        business group (including amounts included in gross
16        income pursuant to Sections 951 through 964 of the
17        Internal Revenue Code and amounts included in gross
18        income under Section 78 of the Internal Revenue Code)
19        with respect to the stock of the same person to whom
20        the intangible expenses and costs were directly or
21        indirectly paid, incurred, or accrued. The preceding
22        sentence shall not apply to the extent that the same
23        dividends caused a reduction to the addition
24        modification required under Section 203(b)(2)(E-12) of
25        this Act. As used in this subparagraph, the term
26        "intangible expenses and costs" includes (1) expenses,

 

 

SB1515- 37 -LRB101 08648 HLH 53732 b

1        losses, and costs for, or related to, the direct or
2        indirect acquisition, use, maintenance or management,
3        ownership, sale, exchange, or any other disposition of
4        intangible property; (2) losses incurred, directly or
5        indirectly, from factoring transactions or discounting
6        transactions; (3) royalty, patent, technical, and
7        copyright fees; (4) licensing fees; and (5) other
8        similar expenses and costs. For purposes of this
9        subparagraph, "intangible property" includes patents,
10        patent applications, trade names, trademarks, service
11        marks, copyrights, mask works, trade secrets, and
12        similar types of intangible assets.
13            This paragraph shall not apply to the following:
14                (i) any item of intangible expenses or costs
15            paid, accrued, or incurred, directly or
16            indirectly, from a transaction with a person who is
17            subject in a foreign country or state, other than a
18            state which requires mandatory unitary reporting,
19            to a tax on or measured by net income with respect
20            to such item; or
21                (ii) any item of intangible expense or cost
22            paid, accrued, or incurred, directly or
23            indirectly, if the taxpayer can establish, based
24            on a preponderance of the evidence, both of the
25            following:
26                    (a) the person during the same taxable

 

 

SB1515- 38 -LRB101 08648 HLH 53732 b

1                year paid, accrued, or incurred, the
2                intangible expense or cost to a person that is
3                not a related member, and
4                    (b) the transaction giving rise to the
5                intangible expense or cost between the
6                taxpayer and the person did not have as a
7                principal purpose the avoidance of Illinois
8                income tax, and is paid pursuant to a contract
9                or agreement that reflects arm's-length terms;
10                or
11                (iii) any item of intangible expense or cost
12            paid, accrued, or incurred, directly or
13            indirectly, from a transaction with a person if the
14            taxpayer establishes by clear and convincing
15            evidence, that the adjustments are unreasonable;
16            or if the taxpayer and the Director agree in
17            writing to the application or use of an alternative
18            method of apportionment under Section 304(f);
19                Nothing in this subsection shall preclude the
20            Director from making any other adjustment
21            otherwise allowed under Section 404 of this Act for
22            any tax year beginning after the effective date of
23            this amendment provided such adjustment is made
24            pursuant to regulation adopted by the Department
25            and such regulations provide methods and standards
26            by which the Department will utilize its authority

 

 

SB1515- 39 -LRB101 08648 HLH 53732 b

1            under Section 404 of this Act;
2            (E-14) For taxable years ending on or after
3        December 31, 2008, an amount equal to the amount of
4        insurance premium expenses and costs otherwise allowed
5        as a deduction in computing base income, and that were
6        paid, accrued, or incurred, directly or indirectly, to
7        a person who would be a member of the same unitary
8        business group but for the fact that the person is
9        prohibited under Section 1501(a)(27) from being
10        included in the unitary business group because he or
11        she is ordinarily required to apportion business
12        income under different subsections of Section 304. The
13        addition modification required by this subparagraph
14        shall be reduced to the extent that dividends were
15        included in base income of the unitary group for the
16        same taxable year and received by the taxpayer or by a
17        member of the taxpayer's unitary business group
18        (including amounts included in gross income under
19        Sections 951 through 964 of the Internal Revenue Code
20        and amounts included in gross income under Section 78
21        of the Internal Revenue Code) with respect to the stock
22        of the same person to whom the premiums and costs were
23        directly or indirectly paid, incurred, or accrued. The
24        preceding sentence does not apply to the extent that
25        the same dividends caused a reduction to the addition
26        modification required under Section 203(b)(2)(E-12) or

 

 

SB1515- 40 -LRB101 08648 HLH 53732 b

1        Section 203(b)(2)(E-13) of this Act;
2            (E-15) For taxable years beginning after December
3        31, 2008, any deduction for dividends paid by a captive
4        real estate investment trust that is allowed to a real
5        estate investment trust under Section 857(b)(2)(B) of
6        the Internal Revenue Code for dividends paid;
7            (E-16) An amount equal to the credit allowable to
8        the taxpayer under Section 218(a) of this Act,
9        determined without regard to Section 218(c) of this
10        Act;
11            (E-17) For taxable years ending on or after
12        December 31, 2017, an amount equal to the deduction
13        allowed under Section 199 of the Internal Revenue Code
14        for the taxable year;
15    and by deducting from the total so obtained the sum of the
16    following amounts:
17            (F) An amount equal to the amount of any tax
18        imposed by this Act which was refunded to the taxpayer
19        and included in such total for the taxable year;
20            (G) An amount equal to any amount included in such
21        total under Section 78 of the Internal Revenue Code;
22            (H) In the case of a regulated investment company,
23        an amount equal to the amount of exempt interest
24        dividends as defined in subsection (b)(5) of Section
25        852 of the Internal Revenue Code, paid to shareholders
26        for the taxable year;

 

 

SB1515- 41 -LRB101 08648 HLH 53732 b

1            (I) With the exception of any amounts subtracted
2        under subparagraph (J), an amount equal to the sum of
3        all amounts disallowed as deductions by (i) Sections
4        171(a)(2), and 265(a)(2) and amounts disallowed as
5        interest expense by Section 291(a)(3) of the Internal
6        Revenue Code, and all amounts of expenses allocable to
7        interest and disallowed as deductions by Section
8        265(a)(1) of the Internal Revenue Code; and (ii) for
9        taxable years ending on or after August 13, 1999,
10        Sections 171(a)(2), 265, 280C, 291(a)(3), and
11        832(b)(5)(B)(i) of the Internal Revenue Code, plus,
12        for tax years ending on or after December 31, 2011,
13        amounts disallowed as deductions by Section 45G(e)(3)
14        of the Internal Revenue Code and, for taxable years
15        ending on or after December 31, 2008, any amount
16        included in gross income under Section 87 of the
17        Internal Revenue Code and the policyholders' share of
18        tax-exempt interest of a life insurance company under
19        Section 807(a)(2)(B) of the Internal Revenue Code (in
20        the case of a life insurance company with gross income
21        from a decrease in reserves for the tax year) or
22        Section 807(b)(1)(B) of the Internal Revenue Code (in
23        the case of a life insurance company allowed a
24        deduction for an increase in reserves for the tax
25        year); the provisions of this subparagraph are exempt
26        from the provisions of Section 250;

 

 

SB1515- 42 -LRB101 08648 HLH 53732 b

1            (J) An amount equal to all amounts included in such
2        total which are exempt from taxation by this State
3        either by reason of its statutes or Constitution or by
4        reason of the Constitution, treaties or statutes of the
5        United States; provided that, in the case of any
6        statute of this State that exempts income derived from
7        bonds or other obligations from the tax imposed under
8        this Act, the amount exempted shall be the interest net
9        of bond premium amortization;
10            (K) An amount equal to those dividends included in
11        such total which were paid by a corporation which
12        conducts business operations in a River Edge
13        Redevelopment Zone or zones created under the River
14        Edge Redevelopment Zone Act and conducts substantially
15        all of its operations in a River Edge Redevelopment
16        Zone or zones. This subparagraph (K) is exempt from the
17        provisions of Section 250;
18            (L) An amount equal to those dividends included in
19        such total that were paid by a corporation that
20        conducts business operations in a federally designated
21        Foreign Trade Zone or Sub-Zone and that is designated a
22        High Impact Business located in Illinois; provided
23        that dividends eligible for the deduction provided in
24        subparagraph (K) of paragraph 2 of this subsection
25        shall not be eligible for the deduction provided under
26        this subparagraph (L);

 

 

SB1515- 43 -LRB101 08648 HLH 53732 b

1            (M) For any taxpayer that is a financial
2        organization within the meaning of Section 304(c) of
3        this Act, an amount included in such total as interest
4        income from a loan or loans made by such taxpayer to a
5        borrower, to the extent that such a loan is secured by
6        property which is eligible for the River Edge
7        Redevelopment Zone Investment Credit. To determine the
8        portion of a loan or loans that is secured by property
9        eligible for a Section 201(f) investment credit to the
10        borrower, the entire principal amount of the loan or
11        loans between the taxpayer and the borrower should be
12        divided into the basis of the Section 201(f) investment
13        credit property which secures the loan or loans, using
14        for this purpose the original basis of such property on
15        the date that it was placed in service in the River
16        Edge Redevelopment Zone. The subtraction modification
17        available to the taxpayer in any year under this
18        subsection shall be that portion of the total interest
19        paid by the borrower with respect to such loan
20        attributable to the eligible property as calculated
21        under the previous sentence. This subparagraph (M) is
22        exempt from the provisions of Section 250;
23            (M-1) For any taxpayer that is a financial
24        organization within the meaning of Section 304(c) of
25        this Act, an amount included in such total as interest
26        income from a loan or loans made by such taxpayer to a

 

 

SB1515- 44 -LRB101 08648 HLH 53732 b

1        borrower, to the extent that such a loan is secured by
2        property which is eligible for the High Impact Business
3        Investment Credit. To determine the portion of a loan
4        or loans that is secured by property eligible for a
5        Section 201(h) investment credit to the borrower, the
6        entire principal amount of the loan or loans between
7        the taxpayer and the borrower should be divided into
8        the basis of the Section 201(h) investment credit
9        property which secures the loan or loans, using for
10        this purpose the original basis of such property on the
11        date that it was placed in service in a federally
12        designated Foreign Trade Zone or Sub-Zone located in
13        Illinois. No taxpayer that is eligible for the
14        deduction provided in subparagraph (M) of paragraph
15        (2) of this subsection shall be eligible for the
16        deduction provided under this subparagraph (M-1). The
17        subtraction modification available to taxpayers in any
18        year under this subsection shall be that portion of the
19        total interest paid by the borrower with respect to
20        such loan attributable to the eligible property as
21        calculated under the previous sentence;
22            (N) Two times any contribution made during the
23        taxable year to a designated zone organization to the
24        extent that the contribution (i) qualifies as a
25        charitable contribution under subsection (c) of
26        Section 170 of the Internal Revenue Code and (ii) must,

 

 

SB1515- 45 -LRB101 08648 HLH 53732 b

1        by its terms, be used for a project approved by the
2        Department of Commerce and Economic Opportunity under
3        Section 11 of the Illinois Enterprise Zone Act or under
4        Section 10-10 of the River Edge Redevelopment Zone Act.
5        This subparagraph (N) is exempt from the provisions of
6        Section 250;
7            (O) An amount equal to: (i) 85% for taxable years
8        ending on or before December 31, 1992, or, a percentage
9        equal to the percentage allowable under Section
10        243(a)(1) of the Internal Revenue Code of 1986 for
11        taxable years ending after December 31, 1992, of the
12        amount by which dividends included in taxable income
13        and received from a corporation that is not created or
14        organized under the laws of the United States or any
15        state or political subdivision thereof, including, for
16        taxable years ending on or after December 31, 1988,
17        dividends received or deemed received or paid or deemed
18        paid under Sections 951 through 965 of the Internal
19        Revenue Code, exceed the amount of the modification
20        provided under subparagraph (G) of paragraph (2) of
21        this subsection (b) which is related to such dividends,
22        and including, for taxable years ending on or after
23        December 31, 2008, dividends received from a captive
24        real estate investment trust; plus (ii) 100% of the
25        amount by which dividends, included in taxable income
26        and received, including, for taxable years ending on or

 

 

SB1515- 46 -LRB101 08648 HLH 53732 b

1        after December 31, 1988, dividends received or deemed
2        received or paid or deemed paid under Sections 951
3        through 964 of the Internal Revenue Code and including,
4        for taxable years ending on or after December 31, 2008,
5        dividends received from a captive real estate
6        investment trust, from any such corporation specified
7        in clause (i) that would but for the provisions of
8        Section 1504(b)(3) of the Internal Revenue Code be
9        treated as a member of the affiliated group which
10        includes the dividend recipient, exceed the amount of
11        the modification provided under subparagraph (G) of
12        paragraph (2) of this subsection (b) which is related
13        to such dividends. This subparagraph (O) is exempt from
14        the provisions of Section 250 of this Act;
15            (P) An amount equal to any contribution made to a
16        job training project established pursuant to the Tax
17        Increment Allocation Redevelopment Act;
18            (Q) An amount equal to the amount of the deduction
19        used to compute the federal income tax credit for
20        restoration of substantial amounts held under claim of
21        right for the taxable year pursuant to Section 1341 of
22        the Internal Revenue Code;
23            (R) On and after July 20, 1999, in the case of an
24        attorney-in-fact with respect to whom an interinsurer
25        or a reciprocal insurer has made the election under
26        Section 835 of the Internal Revenue Code, 26 U.S.C.

 

 

SB1515- 47 -LRB101 08648 HLH 53732 b

1        835, an amount equal to the excess, if any, of the
2        amounts paid or incurred by that interinsurer or
3        reciprocal insurer in the taxable year to the
4        attorney-in-fact over the deduction allowed to that
5        interinsurer or reciprocal insurer with respect to the
6        attorney-in-fact under Section 835(b) of the Internal
7        Revenue Code for the taxable year; the provisions of
8        this subparagraph are exempt from the provisions of
9        Section 250;
10            (S) For taxable years ending on or after December
11        31, 1997, in the case of a Subchapter S corporation, an
12        amount equal to all amounts of income allocable to a
13        shareholder subject to the Personal Property Tax
14        Replacement Income Tax imposed by subsections (c) and
15        (d) of Section 201 of this Act, including amounts
16        allocable to organizations exempt from federal income
17        tax by reason of Section 501(a) of the Internal Revenue
18        Code. This subparagraph (S) is exempt from the
19        provisions of Section 250;
20            (T) For taxable years 2001 and thereafter, for the
21        taxable year in which the bonus depreciation deduction
22        is taken on the taxpayer's federal income tax return
23        under subsection (k) of Section 168 of the Internal
24        Revenue Code and for each applicable taxable year
25        thereafter, an amount equal to "x", where:
26                (1) "y" equals the amount of the depreciation

 

 

SB1515- 48 -LRB101 08648 HLH 53732 b

1            deduction taken for the taxable year on the
2            taxpayer's federal income tax return on property
3            for which the bonus depreciation deduction was
4            taken in any year under subsection (k) of Section
5            168 of the Internal Revenue Code, but not including
6            the bonus depreciation deduction;
7                (2) for taxable years ending on or before
8            December 31, 2005, "x" equals "y" multiplied by 30
9            and then divided by 70 (or "y" multiplied by
10            0.429); and
11                (3) for taxable years ending after December
12            31, 2005:
13                    (i) for property on which a bonus
14                depreciation deduction of 30% of the adjusted
15                basis was taken, "x" equals "y" multiplied by
16                30 and then divided by 70 (or "y" multiplied by
17                0.429); and
18                    (ii) for property on which a bonus
19                depreciation deduction of 50% of the adjusted
20                basis was taken, "x" equals "y" multiplied by
21                1.0.
22            The aggregate amount deducted under this
23        subparagraph in all taxable years for any one piece of
24        property may not exceed the amount of the bonus
25        depreciation deduction taken on that property on the
26        taxpayer's federal income tax return under subsection

 

 

SB1515- 49 -LRB101 08648 HLH 53732 b

1        (k) of Section 168 of the Internal Revenue Code. This
2        subparagraph (T) is exempt from the provisions of
3        Section 250;
4            (U) If the taxpayer sells, transfers, abandons, or
5        otherwise disposes of property for which the taxpayer
6        was required in any taxable year to make an addition
7        modification under subparagraph (E-10), then an amount
8        equal to that addition modification.
9            If the taxpayer continues to own property through
10        the last day of the last tax year for which the
11        taxpayer may claim a depreciation deduction for
12        federal income tax purposes and for which the taxpayer
13        was required in any taxable year to make an addition
14        modification under subparagraph (E-10), then an amount
15        equal to that addition modification.
16            The taxpayer is allowed to take the deduction under
17        this subparagraph only once with respect to any one
18        piece of property.
19            This subparagraph (U) is exempt from the
20        provisions of Section 250;
21            (V) The amount of: (i) any interest income (net of
22        the deductions allocable thereto) taken into account
23        for the taxable year with respect to a transaction with
24        a taxpayer that is required to make an addition
25        modification with respect to such transaction under
26        Section 203(a)(2)(D-17), 203(b)(2)(E-12),

 

 

SB1515- 50 -LRB101 08648 HLH 53732 b

1        203(c)(2)(G-12), or 203(d)(2)(D-7), but not to exceed
2        the amount of such addition modification, (ii) any
3        income from intangible property (net of the deductions
4        allocable thereto) taken into account for the taxable
5        year with respect to a transaction with a taxpayer that
6        is required to make an addition modification with
7        respect to such transaction under Section
8        203(a)(2)(D-18), 203(b)(2)(E-13), 203(c)(2)(G-13), or
9        203(d)(2)(D-8), but not to exceed the amount of such
10        addition modification, and (iii) any insurance premium
11        income (net of deductions allocable thereto) taken
12        into account for the taxable year with respect to a
13        transaction with a taxpayer that is required to make an
14        addition modification with respect to such transaction
15        under Section 203(a)(2)(D-19), Section
16        203(b)(2)(E-14), Section 203(c)(2)(G-14), or Section
17        203(d)(2)(D-9), but not to exceed the amount of that
18        addition modification. This subparagraph (V) is exempt
19        from the provisions of Section 250;
20            (W) An amount equal to the interest income taken
21        into account for the taxable year (net of the
22        deductions allocable thereto) with respect to
23        transactions with (i) a foreign person who would be a
24        member of the taxpayer's unitary business group but for
25        the fact that the foreign person's business activity
26        outside the United States is 80% or more of that

 

 

SB1515- 51 -LRB101 08648 HLH 53732 b

1        person's total business activity and (ii) for taxable
2        years ending on or after December 31, 2008, to a person
3        who would be a member of the same unitary business
4        group but for the fact that the person is prohibited
5        under Section 1501(a)(27) from being included in the
6        unitary business group because he or she is ordinarily
7        required to apportion business income under different
8        subsections of Section 304, but not to exceed the
9        addition modification required to be made for the same
10        taxable year under Section 203(b)(2)(E-12) for
11        interest paid, accrued, or incurred, directly or
12        indirectly, to the same person. This subparagraph (W)
13        is exempt from the provisions of Section 250;
14            (X) An amount equal to the income from intangible
15        property taken into account for the taxable year (net
16        of the deductions allocable thereto) with respect to
17        transactions with (i) a foreign person who would be a
18        member of the taxpayer's unitary business group but for
19        the fact that the foreign person's business activity
20        outside the United States is 80% or more of that
21        person's total business activity and (ii) for taxable
22        years ending on or after December 31, 2008, to a person
23        who would be a member of the same unitary business
24        group but for the fact that the person is prohibited
25        under Section 1501(a)(27) from being included in the
26        unitary business group because he or she is ordinarily

 

 

SB1515- 52 -LRB101 08648 HLH 53732 b

1        required to apportion business income under different
2        subsections of Section 304, but not to exceed the
3        addition modification required to be made for the same
4        taxable year under Section 203(b)(2)(E-13) for
5        intangible expenses and costs paid, accrued, or
6        incurred, directly or indirectly, to the same foreign
7        person. This subparagraph (X) is exempt from the
8        provisions of Section 250;
9            (Y) For taxable years ending on or after December
10        31, 2011, in the case of a taxpayer who was required to
11        add back any insurance premiums under Section
12        203(b)(2)(E-14), such taxpayer may elect to subtract
13        that part of a reimbursement received from the
14        insurance company equal to the amount of the expense or
15        loss (including expenses incurred by the insurance
16        company) that would have been taken into account as a
17        deduction for federal income tax purposes if the
18        expense or loss had been uninsured. If a taxpayer makes
19        the election provided for by this subparagraph (Y), the
20        insurer to which the premiums were paid must add back
21        to income the amount subtracted by the taxpayer
22        pursuant to this subparagraph (Y). This subparagraph
23        (Y) is exempt from the provisions of Section 250; and
24            (Z) The difference between the nondeductible
25        controlled foreign corporation dividends under Section
26        965(e)(3) of the Internal Revenue Code over the taxable

 

 

SB1515- 53 -LRB101 08648 HLH 53732 b

1        income of the taxpayer, computed without regard to
2        Section 965(e)(2)(A) of the Internal Revenue Code, and
3        without regard to any net operating loss deduction.
4        This subparagraph (Z) is exempt from the provisions of
5        Section 250; and .
6            (AA) For tax years beginning on or after January 1,
7        2019, an amount equal to the amount included in the
8        taxpayer's federal adjusted gross income as as result
9        of the application of Section 512(a)(7) of the Internal
10        Revenue Code; this subparagraph is exempt from the
11        provisions of Section 250.
12        (3) Special rule. For purposes of paragraph (2)(A),
13    "gross income" in the case of a life insurance company, for
14    tax years ending on and after December 31, 1994, and prior
15    to December 31, 2011, shall mean the gross investment
16    income for the taxable year and, for tax years ending on or
17    after December 31, 2011, shall mean all amounts included in
18    life insurance gross income under Section 803(a)(3) of the
19    Internal Revenue Code.
 
20    (c) Trusts and estates.
21        (1) In general. In the case of a trust or estate, base
22    income means an amount equal to the taxpayer's taxable
23    income for the taxable year as modified by paragraph (2).
24        (2) Modifications. Subject to the provisions of
25    paragraph (3), the taxable income referred to in paragraph

 

 

SB1515- 54 -LRB101 08648 HLH 53732 b

1    (1) shall be modified by adding thereto the sum of the
2    following amounts:
3            (A) An amount equal to all amounts paid or accrued
4        to the taxpayer as interest or dividends during the
5        taxable year to the extent excluded from gross income
6        in the computation of taxable income;
7            (B) In the case of (i) an estate, $600; (ii) a
8        trust which, under its governing instrument, is
9        required to distribute all of its income currently,
10        $300; and (iii) any other trust, $100, but in each such
11        case, only to the extent such amount was deducted in
12        the computation of taxable income;
13            (C) An amount equal to the amount of tax imposed by
14        this Act to the extent deducted from gross income in
15        the computation of taxable income for the taxable year;
16            (D) The amount of any net operating loss deduction
17        taken in arriving at taxable income, other than a net
18        operating loss carried forward from a taxable year
19        ending prior to December 31, 1986;
20            (E) For taxable years in which a net operating loss
21        carryback or carryforward from a taxable year ending
22        prior to December 31, 1986 is an element of taxable
23        income under paragraph (1) of subsection (e) or
24        subparagraph (E) of paragraph (2) of subsection (e),
25        the amount by which addition modifications other than
26        those provided by this subparagraph (E) exceeded

 

 

SB1515- 55 -LRB101 08648 HLH 53732 b

1        subtraction modifications in such taxable year, with
2        the following limitations applied in the order that
3        they are listed:
4                (i) the addition modification relating to the
5            net operating loss carried back or forward to the
6            taxable year from any taxable year ending prior to
7            December 31, 1986 shall be reduced by the amount of
8            addition modification under this subparagraph (E)
9            which related to that net operating loss and which
10            was taken into account in calculating the base
11            income of an earlier taxable year, and
12                (ii) the addition modification relating to the
13            net operating loss carried back or forward to the
14            taxable year from any taxable year ending prior to
15            December 31, 1986 shall not exceed the amount of
16            such carryback or carryforward;
17            For taxable years in which there is a net operating
18        loss carryback or carryforward from more than one other
19        taxable year ending prior to December 31, 1986, the
20        addition modification provided in this subparagraph
21        (E) shall be the sum of the amounts computed
22        independently under the preceding provisions of this
23        subparagraph (E) for each such taxable year;
24            (F) For taxable years ending on or after January 1,
25        1989, an amount equal to the tax deducted pursuant to
26        Section 164 of the Internal Revenue Code if the trust

 

 

SB1515- 56 -LRB101 08648 HLH 53732 b

1        or estate is claiming the same tax for purposes of the
2        Illinois foreign tax credit under Section 601 of this
3        Act;
4            (G) An amount equal to the amount of the capital
5        gain deduction allowable under the Internal Revenue
6        Code, to the extent deducted from gross income in the
7        computation of taxable income;
8            (G-5) For taxable years ending after December 31,
9        1997, an amount equal to any eligible remediation costs
10        that the trust or estate deducted in computing adjusted
11        gross income and for which the trust or estate claims a
12        credit under subsection (l) of Section 201;
13            (G-10) For taxable years 2001 and thereafter, an
14        amount equal to the bonus depreciation deduction taken
15        on the taxpayer's federal income tax return for the
16        taxable year under subsection (k) of Section 168 of the
17        Internal Revenue Code; and
18            (G-11) If the taxpayer sells, transfers, abandons,
19        or otherwise disposes of property for which the
20        taxpayer was required in any taxable year to make an
21        addition modification under subparagraph (G-10), then
22        an amount equal to the aggregate amount of the
23        deductions taken in all taxable years under
24        subparagraph (R) with respect to that property.
25            If the taxpayer continues to own property through
26        the last day of the last tax year for which the

 

 

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1        taxpayer may claim a depreciation deduction for
2        federal income tax purposes and for which the taxpayer
3        was allowed in any taxable year to make a subtraction
4        modification under subparagraph (R), then an amount
5        equal to that subtraction modification.
6            The taxpayer is required to make the addition
7        modification under this subparagraph only once with
8        respect to any one piece of property;
9            (G-12) An amount equal to the amount otherwise
10        allowed as a deduction in computing base income for
11        interest paid, accrued, or incurred, directly or
12        indirectly, (i) for taxable years ending on or after
13        December 31, 2004, to a foreign person who would be a
14        member of the same unitary business group but for the
15        fact that the foreign person's business activity
16        outside the United States is 80% or more of the foreign
17        person's total business activity and (ii) for taxable
18        years ending on or after December 31, 2008, to a person
19        who would be a member of the same unitary business
20        group but for the fact that the person is prohibited
21        under Section 1501(a)(27) from being included in the
22        unitary business group because he or she is ordinarily
23        required to apportion business income under different
24        subsections of Section 304. The addition modification
25        required by this subparagraph shall be reduced to the
26        extent that dividends were included in base income of

 

 

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1        the unitary group for the same taxable year and
2        received by the taxpayer or by a member of the
3        taxpayer's unitary business group (including amounts
4        included in gross income pursuant to Sections 951
5        through 964 of the Internal Revenue Code and amounts
6        included in gross income under Section 78 of the
7        Internal Revenue Code) with respect to the stock of the
8        same person to whom the interest was paid, accrued, or
9        incurred.
10            This paragraph shall not apply to the following:
11                (i) an item of interest paid, accrued, or
12            incurred, directly or indirectly, to a person who
13            is subject in a foreign country or state, other
14            than a state which requires mandatory unitary
15            reporting, to a tax on or measured by net income
16            with respect to such interest; or
17                (ii) an item of interest paid, accrued, or
18            incurred, directly or indirectly, to a person if
19            the taxpayer can establish, based on a
20            preponderance of the evidence, both of the
21            following:
22                    (a) the person, during the same taxable
23                year, paid, accrued, or incurred, the interest
24                to a person that is not a related member, and
25                    (b) the transaction giving rise to the
26                interest expense between the taxpayer and the

 

 

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1                person did not have as a principal purpose the
2                avoidance of Illinois income tax, and is paid
3                pursuant to a contract or agreement that
4                reflects an arm's-length interest rate and
5                terms; or
6                (iii) the taxpayer can establish, based on
7            clear and convincing evidence, that the interest
8            paid, accrued, or incurred relates to a contract or
9            agreement entered into at arm's-length rates and
10            terms and the principal purpose for the payment is
11            not federal or Illinois tax avoidance; or
12                (iv) an item of interest paid, accrued, or
13            incurred, directly or indirectly, to a person if
14            the taxpayer establishes by clear and convincing
15            evidence that the adjustments are unreasonable; or
16            if the taxpayer and the Director agree in writing
17            to the application or use of an alternative method
18            of apportionment under Section 304(f).
19                Nothing in this subsection shall preclude the
20            Director from making any other adjustment
21            otherwise allowed under Section 404 of this Act for
22            any tax year beginning after the effective date of
23            this amendment provided such adjustment is made
24            pursuant to regulation adopted by the Department
25            and such regulations provide methods and standards
26            by which the Department will utilize its authority

 

 

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1            under Section 404 of this Act;
2            (G-13) An amount equal to the amount of intangible
3        expenses and costs otherwise allowed as a deduction in
4        computing base income, and that were paid, accrued, or
5        incurred, directly or indirectly, (i) for taxable
6        years ending on or after December 31, 2004, to a
7        foreign person who would be a member of the same
8        unitary business group but for the fact that the
9        foreign person's business activity outside the United
10        States is 80% or more of that person's total business
11        activity and (ii) for taxable years ending on or after
12        December 31, 2008, to a person who would be a member of
13        the same unitary business group but for the fact that
14        the person is prohibited under Section 1501(a)(27)
15        from being included in the unitary business group
16        because he or she is ordinarily required to apportion
17        business income under different subsections of Section
18        304. The addition modification required by this
19        subparagraph shall be reduced to the extent that
20        dividends were included in base income of the unitary
21        group for the same taxable year and received by the
22        taxpayer or by a member of the taxpayer's unitary
23        business group (including amounts included in gross
24        income pursuant to Sections 951 through 964 of the
25        Internal Revenue Code and amounts included in gross
26        income under Section 78 of the Internal Revenue Code)

 

 

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1        with respect to the stock of the same person to whom
2        the intangible expenses and costs were directly or
3        indirectly paid, incurred, or accrued. The preceding
4        sentence shall not apply to the extent that the same
5        dividends caused a reduction to the addition
6        modification required under Section 203(c)(2)(G-12) of
7        this Act. As used in this subparagraph, the term
8        "intangible expenses and costs" includes: (1)
9        expenses, losses, and costs for or related to the
10        direct or indirect acquisition, use, maintenance or
11        management, ownership, sale, exchange, or any other
12        disposition of intangible property; (2) losses
13        incurred, directly or indirectly, from factoring
14        transactions or discounting transactions; (3) royalty,
15        patent, technical, and copyright fees; (4) licensing
16        fees; and (5) other similar expenses and costs. For
17        purposes of this subparagraph, "intangible property"
18        includes patents, patent applications, trade names,
19        trademarks, service marks, copyrights, mask works,
20        trade secrets, and similar types of intangible assets.
21            This paragraph shall not apply to the following:
22                (i) any item of intangible expenses or costs
23            paid, accrued, or incurred, directly or
24            indirectly, from a transaction with a person who is
25            subject in a foreign country or state, other than a
26            state which requires mandatory unitary reporting,

 

 

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1            to a tax on or measured by net income with respect
2            to such item; or
3                (ii) any item of intangible expense or cost
4            paid, accrued, or incurred, directly or
5            indirectly, if the taxpayer can establish, based
6            on a preponderance of the evidence, both of the
7            following:
8                    (a) the person during the same taxable
9                year paid, accrued, or incurred, the
10                intangible expense or cost to a person that is
11                not a related member, and
12                    (b) the transaction giving rise to the
13                intangible expense or cost between the
14                taxpayer and the person did not have as a
15                principal purpose the avoidance of Illinois
16                income tax, and is paid pursuant to a contract
17                or agreement that reflects arm's-length terms;
18                or
19                (iii) any item of intangible expense or cost
20            paid, accrued, or incurred, directly or
21            indirectly, from a transaction with a person if the
22            taxpayer establishes by clear and convincing
23            evidence, that the adjustments are unreasonable;
24            or if the taxpayer and the Director agree in
25            writing to the application or use of an alternative
26            method of apportionment under Section 304(f);

 

 

SB1515- 63 -LRB101 08648 HLH 53732 b

1                Nothing in this subsection shall preclude the
2            Director from making any other adjustment
3            otherwise allowed under Section 404 of this Act for
4            any tax year beginning after the effective date of
5            this amendment provided such adjustment is made
6            pursuant to regulation adopted by the Department
7            and such regulations provide methods and standards
8            by which the Department will utilize its authority
9            under Section 404 of this Act;
10            (G-14) For taxable years ending on or after
11        December 31, 2008, an amount equal to the amount of
12        insurance premium expenses and costs otherwise allowed
13        as a deduction in computing base income, and that were
14        paid, accrued, or incurred, directly or indirectly, to
15        a person who would be a member of the same unitary
16        business group but for the fact that the person is
17        prohibited under Section 1501(a)(27) from being
18        included in the unitary business group because he or
19        she is ordinarily required to apportion business
20        income under different subsections of Section 304. The
21        addition modification required by this subparagraph
22        shall be reduced to the extent that dividends were
23        included in base income of the unitary group for the
24        same taxable year and received by the taxpayer or by a
25        member of the taxpayer's unitary business group
26        (including amounts included in gross income under

 

 

SB1515- 64 -LRB101 08648 HLH 53732 b

1        Sections 951 through 964 of the Internal Revenue Code
2        and amounts included in gross income under Section 78
3        of the Internal Revenue Code) with respect to the stock
4        of the same person to whom the premiums and costs were
5        directly or indirectly paid, incurred, or accrued. The
6        preceding sentence does not apply to the extent that
7        the same dividends caused a reduction to the addition
8        modification required under Section 203(c)(2)(G-12) or
9        Section 203(c)(2)(G-13) of this Act;
10            (G-15) An amount equal to the credit allowable to
11        the taxpayer under Section 218(a) of this Act,
12        determined without regard to Section 218(c) of this
13        Act;
14            (G-16) For taxable years ending on or after
15        December 31, 2017, an amount equal to the deduction
16        allowed under Section 199 of the Internal Revenue Code
17        for the taxable year;
18    and by deducting from the total so obtained the sum of the
19    following amounts:
20            (H) An amount equal to all amounts included in such
21        total pursuant to the provisions of Sections 402(a),
22        402(c), 403(a), 403(b), 406(a), 407(a) and 408 of the
23        Internal Revenue Code or included in such total as
24        distributions under the provisions of any retirement
25        or disability plan for employees of any governmental
26        agency or unit, or retirement payments to retired

 

 

SB1515- 65 -LRB101 08648 HLH 53732 b

1        partners, which payments are excluded in computing net
2        earnings from self employment by Section 1402 of the
3        Internal Revenue Code and regulations adopted pursuant
4        thereto;
5            (I) The valuation limitation amount;
6            (J) An amount equal to the amount of any tax
7        imposed by this Act which was refunded to the taxpayer
8        and included in such total for the taxable year;
9            (K) An amount equal to all amounts included in
10        taxable income as modified by subparagraphs (A), (B),
11        (C), (D), (E), (F) and (G) which are exempt from
12        taxation by this State either by reason of its statutes
13        or Constitution or by reason of the Constitution,
14        treaties or statutes of the United States; provided
15        that, in the case of any statute of this State that
16        exempts income derived from bonds or other obligations
17        from the tax imposed under this Act, the amount
18        exempted shall be the interest net of bond premium
19        amortization;
20            (L) With the exception of any amounts subtracted
21        under subparagraph (K), an amount equal to the sum of
22        all amounts disallowed as deductions by (i) Sections
23        171(a)(2) and 265(a)(2) of the Internal Revenue Code,
24        and all amounts of expenses allocable to interest and
25        disallowed as deductions by Section 265(a)(1) 265(1)
26        of the Internal Revenue Code; and (ii) for taxable

 

 

SB1515- 66 -LRB101 08648 HLH 53732 b

1        years ending on or after August 13, 1999, Sections
2        171(a)(2), 265, 280C, and 832(b)(5)(B)(i) of the
3        Internal Revenue Code, plus, (iii) for taxable years
4        ending on or after December 31, 2011, Section 45G(e)(3)
5        of the Internal Revenue Code and, for taxable years
6        ending on or after December 31, 2008, any amount
7        included in gross income under Section 87 of the
8        Internal Revenue Code; the provisions of this
9        subparagraph are exempt from the provisions of Section
10        250;
11            (M) An amount equal to those dividends included in
12        such total which were paid by a corporation which
13        conducts business operations in a River Edge
14        Redevelopment Zone or zones created under the River
15        Edge Redevelopment Zone Act and conducts substantially
16        all of its operations in a River Edge Redevelopment
17        Zone or zones. This subparagraph (M) is exempt from the
18        provisions of Section 250;
19            (N) An amount equal to any contribution made to a
20        job training project established pursuant to the Tax
21        Increment Allocation Redevelopment Act;
22            (O) An amount equal to those dividends included in
23        such total that were paid by a corporation that
24        conducts business operations in a federally designated
25        Foreign Trade Zone or Sub-Zone and that is designated a
26        High Impact Business located in Illinois; provided

 

 

SB1515- 67 -LRB101 08648 HLH 53732 b

1        that dividends eligible for the deduction provided in
2        subparagraph (M) of paragraph (2) of this subsection
3        shall not be eligible for the deduction provided under
4        this subparagraph (O);
5            (P) An amount equal to the amount of the deduction
6        used to compute the federal income tax credit for
7        restoration of substantial amounts held under claim of
8        right for the taxable year pursuant to Section 1341 of
9        the Internal Revenue Code;
10            (Q) For taxable year 1999 and thereafter, an amount
11        equal to the amount of any (i) distributions, to the
12        extent includible in gross income for federal income
13        tax purposes, made to the taxpayer because of his or
14        her status as a victim of persecution for racial or
15        religious reasons by Nazi Germany or any other Axis
16        regime or as an heir of the victim and (ii) items of
17        income, to the extent includible in gross income for
18        federal income tax purposes, attributable to, derived
19        from or in any way related to assets stolen from,
20        hidden from, or otherwise lost to a victim of
21        persecution for racial or religious reasons by Nazi
22        Germany or any other Axis regime immediately prior to,
23        during, and immediately after World War II, including,
24        but not limited to, interest on the proceeds receivable
25        as insurance under policies issued to a victim of
26        persecution for racial or religious reasons by Nazi

 

 

SB1515- 68 -LRB101 08648 HLH 53732 b

1        Germany or any other Axis regime by European insurance
2        companies immediately prior to and during World War II;
3        provided, however, this subtraction from federal
4        adjusted gross income does not apply to assets acquired
5        with such assets or with the proceeds from the sale of
6        such assets; provided, further, this paragraph shall
7        only apply to a taxpayer who was the first recipient of
8        such assets after their recovery and who is a victim of
9        persecution for racial or religious reasons by Nazi
10        Germany or any other Axis regime or as an heir of the
11        victim. The amount of and the eligibility for any
12        public assistance, benefit, or similar entitlement is
13        not affected by the inclusion of items (i) and (ii) of
14        this paragraph in gross income for federal income tax
15        purposes. This paragraph is exempt from the provisions
16        of Section 250;
17            (R) For taxable years 2001 and thereafter, for the
18        taxable year in which the bonus depreciation deduction
19        is taken on the taxpayer's federal income tax return
20        under subsection (k) of Section 168 of the Internal
21        Revenue Code and for each applicable taxable year
22        thereafter, an amount equal to "x", where:
23                (1) "y" equals the amount of the depreciation
24            deduction taken for the taxable year on the
25            taxpayer's federal income tax return on property
26            for which the bonus depreciation deduction was

 

 

SB1515- 69 -LRB101 08648 HLH 53732 b

1            taken in any year under subsection (k) of Section
2            168 of the Internal Revenue Code, but not including
3            the bonus depreciation deduction;
4                (2) for taxable years ending on or before
5            December 31, 2005, "x" equals "y" multiplied by 30
6            and then divided by 70 (or "y" multiplied by
7            0.429); and
8                (3) for taxable years ending after December
9            31, 2005:
10                    (i) for property on which a bonus
11                depreciation deduction of 30% of the adjusted
12                basis was taken, "x" equals "y" multiplied by
13                30 and then divided by 70 (or "y" multiplied by
14                0.429); and
15                    (ii) for property on which a bonus
16                depreciation deduction of 50% of the adjusted
17                basis was taken, "x" equals "y" multiplied by
18                1.0.
19            The aggregate amount deducted under this
20        subparagraph in all taxable years for any one piece of
21        property may not exceed the amount of the bonus
22        depreciation deduction taken on that property on the
23        taxpayer's federal income tax return under subsection
24        (k) of Section 168 of the Internal Revenue Code. This
25        subparagraph (R) is exempt from the provisions of
26        Section 250;

 

 

SB1515- 70 -LRB101 08648 HLH 53732 b

1            (S) If the taxpayer sells, transfers, abandons, or
2        otherwise disposes of property for which the taxpayer
3        was required in any taxable year to make an addition
4        modification under subparagraph (G-10), then an amount
5        equal to that addition modification.
6            If the taxpayer continues to own property through
7        the last day of the last tax year for which the
8        taxpayer may claim a depreciation deduction for
9        federal income tax purposes and for which the taxpayer
10        was required in any taxable year to make an addition
11        modification under subparagraph (G-10), then an amount
12        equal to that addition modification.
13            The taxpayer is allowed to take the deduction under
14        this subparagraph only once with respect to any one
15        piece of property.
16            This subparagraph (S) is exempt from the
17        provisions of Section 250;
18            (T) The amount of (i) any interest income (net of
19        the deductions allocable thereto) taken into account
20        for the taxable year with respect to a transaction with
21        a taxpayer that is required to make an addition
22        modification with respect to such transaction under
23        Section 203(a)(2)(D-17), 203(b)(2)(E-12),
24        203(c)(2)(G-12), or 203(d)(2)(D-7), but not to exceed
25        the amount of such addition modification and (ii) any
26        income from intangible property (net of the deductions

 

 

SB1515- 71 -LRB101 08648 HLH 53732 b

1        allocable thereto) taken into account for the taxable
2        year with respect to a transaction with a taxpayer that
3        is required to make an addition modification with
4        respect to such transaction under Section
5        203(a)(2)(D-18), 203(b)(2)(E-13), 203(c)(2)(G-13), or
6        203(d)(2)(D-8), but not to exceed the amount of such
7        addition modification. This subparagraph (T) is exempt
8        from the provisions of Section 250;
9            (U) An amount equal to the interest income taken
10        into account for the taxable year (net of the
11        deductions allocable thereto) with respect to
12        transactions with (i) a foreign person who would be a
13        member of the taxpayer's unitary business group but for
14        the fact the foreign person's business activity
15        outside the United States is 80% or more of that
16        person's total business activity and (ii) for taxable
17        years ending on or after December 31, 2008, to a person
18        who would be a member of the same unitary business
19        group but for the fact that the person is prohibited
20        under Section 1501(a)(27) from being included in the
21        unitary business group because he or she is ordinarily
22        required to apportion business income under different
23        subsections of Section 304, but not to exceed the
24        addition modification required to be made for the same
25        taxable year under Section 203(c)(2)(G-12) for
26        interest paid, accrued, or incurred, directly or

 

 

SB1515- 72 -LRB101 08648 HLH 53732 b

1        indirectly, to the same person. This subparagraph (U)
2        is exempt from the provisions of Section 250;
3            (V) An amount equal to the income from intangible
4        property taken into account for the taxable year (net
5        of the deductions allocable thereto) with respect to
6        transactions with (i) a foreign person who would be a
7        member of the taxpayer's unitary business group but for
8        the fact that the foreign person's business activity
9        outside the United States is 80% or more of that
10        person's total business activity and (ii) for taxable
11        years ending on or after December 31, 2008, to a person
12        who would be a member of the same unitary business
13        group but for the fact that the person is prohibited
14        under Section 1501(a)(27) from being included in the
15        unitary business group because he or she is ordinarily
16        required to apportion business income under different
17        subsections of Section 304, but not to exceed the
18        addition modification required to be made for the same
19        taxable year under Section 203(c)(2)(G-13) for
20        intangible expenses and costs paid, accrued, or
21        incurred, directly or indirectly, to the same foreign
22        person. This subparagraph (V) is exempt from the
23        provisions of Section 250;
24            (W) in the case of an estate, an amount equal to
25        all amounts included in such total pursuant to the
26        provisions of Section 111 of the Internal Revenue Code

 

 

SB1515- 73 -LRB101 08648 HLH 53732 b

1        as a recovery of items previously deducted by the
2        decedent from adjusted gross income in the computation
3        of taxable income. This subparagraph (W) is exempt from
4        Section 250;
5            (X) an amount equal to the refund included in such
6        total of any tax deducted for federal income tax
7        purposes, to the extent that deduction was added back
8        under subparagraph (F). This subparagraph (X) is
9        exempt from the provisions of Section 250; and
10            (Y) For taxable years ending on or after December
11        31, 2011, in the case of a taxpayer who was required to
12        add back any insurance premiums under Section
13        203(c)(2)(G-14), such taxpayer may elect to subtract
14        that part of a reimbursement received from the
15        insurance company equal to the amount of the expense or
16        loss (including expenses incurred by the insurance
17        company) that would have been taken into account as a
18        deduction for federal income tax purposes if the
19        expense or loss had been uninsured. If a taxpayer makes
20        the election provided for by this subparagraph (Y), the
21        insurer to which the premiums were paid must add back
22        to income the amount subtracted by the taxpayer
23        pursuant to this subparagraph (Y). This subparagraph
24        (Y) is exempt from the provisions of Section 250; and .
25            (Z) For tax years beginning on or after January 1,
26        2019, an amount equal to the amount included in the

 

 

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1        taxpayer's federal adjusted gross income as as result
2        of the application of Section 512(a)(7) of the Internal
3        Revenue Code; this subparagraph is exempt from the
4        provisions of Section 250.
5        (3) Limitation. The amount of any modification
6    otherwise required under this subsection shall, under
7    regulations prescribed by the Department, be adjusted by
8    any amounts included therein which were properly paid,
9    credited, or required to be distributed, or permanently set
10    aside for charitable purposes pursuant to Internal Revenue
11    Code Section 642(c) during the taxable year.
 
12    (d) Partnerships.
13        (1) In general. In the case of a partnership, base
14    income means an amount equal to the taxpayer's taxable
15    income for the taxable year as modified by paragraph (2).
16        (2) Modifications. The taxable income referred to in
17    paragraph (1) shall be modified by adding thereto the sum
18    of the following amounts:
19            (A) An amount equal to all amounts paid or accrued
20        to the taxpayer as interest or dividends during the
21        taxable year to the extent excluded from gross income
22        in the computation of taxable income;
23            (B) An amount equal to the amount of tax imposed by
24        this Act to the extent deducted from gross income for
25        the taxable year;

 

 

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1            (C) The amount of deductions allowed to the
2        partnership pursuant to Section 707 (c) of the Internal
3        Revenue Code in calculating its taxable income;
4            (D) An amount equal to the amount of the capital
5        gain deduction allowable under the Internal Revenue
6        Code, to the extent deducted from gross income in the
7        computation of taxable income;
8            (D-5) For taxable years 2001 and thereafter, an
9        amount equal to the bonus depreciation deduction taken
10        on the taxpayer's federal income tax return for the
11        taxable year under subsection (k) of Section 168 of the
12        Internal Revenue Code;
13            (D-6) If the taxpayer sells, transfers, abandons,
14        or otherwise disposes of property for which the
15        taxpayer was required in any taxable year to make an
16        addition modification under subparagraph (D-5), then
17        an amount equal to the aggregate amount of the
18        deductions taken in all taxable years under
19        subparagraph (O) with respect to that property.
20            If the taxpayer continues to own property through
21        the last day of the last tax year for which the
22        taxpayer may claim a depreciation deduction for
23        federal income tax purposes and for which the taxpayer
24        was allowed in any taxable year to make a subtraction
25        modification under subparagraph (O), then an amount
26        equal to that subtraction modification.

 

 

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1            The taxpayer is required to make the addition
2        modification under this subparagraph only once with
3        respect to any one piece of property;
4            (D-7) An amount equal to the amount otherwise
5        allowed as a deduction in computing base income for
6        interest paid, accrued, or incurred, directly or
7        indirectly, (i) for taxable years ending on or after
8        December 31, 2004, to a foreign person who would be a
9        member of the same unitary business group but for the
10        fact the foreign person's business activity outside
11        the United States is 80% or more of the foreign
12        person's total business activity and (ii) for taxable
13        years ending on or after December 31, 2008, to a person
14        who would be a member of the same unitary business
15        group but for the fact that the person is prohibited
16        under Section 1501(a)(27) from being included in the
17        unitary business group because he or she is ordinarily
18        required to apportion business income under different
19        subsections of Section 304. The addition modification
20        required by this subparagraph shall be reduced to the
21        extent that dividends were included in base income of
22        the unitary group for the same taxable year and
23        received by the taxpayer or by a member of the
24        taxpayer's unitary business group (including amounts
25        included in gross income pursuant to Sections 951
26        through 964 of the Internal Revenue Code and amounts

 

 

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1        included in gross income under Section 78 of the
2        Internal Revenue Code) with respect to the stock of the
3        same person to whom the interest was paid, accrued, or
4        incurred.
5            This paragraph shall not apply to the following:
6                (i) an item of interest paid, accrued, or
7            incurred, directly or indirectly, to a person who
8            is subject in a foreign country or state, other
9            than a state which requires mandatory unitary
10            reporting, to a tax on or measured by net income
11            with respect to such interest; or
12                (ii) an item of interest paid, accrued, or
13            incurred, directly or indirectly, to a person if
14            the taxpayer can establish, based on a
15            preponderance of the evidence, both of the
16            following:
17                    (a) the person, during the same taxable
18                year, paid, accrued, or incurred, the interest
19                to a person that is not a related member, and
20                    (b) the transaction giving rise to the
21                interest expense between the taxpayer and the
22                person did not have as a principal purpose the
23                avoidance of Illinois income tax, and is paid
24                pursuant to a contract or agreement that
25                reflects an arm's-length interest rate and
26                terms; or

 

 

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1                (iii) the taxpayer can establish, based on
2            clear and convincing evidence, that the interest
3            paid, accrued, or incurred relates to a contract or
4            agreement entered into at arm's-length rates and
5            terms and the principal purpose for the payment is
6            not federal or Illinois tax avoidance; or
7                (iv) an item of interest paid, accrued, or
8            incurred, directly or indirectly, to a person if
9            the taxpayer establishes by clear and convincing
10            evidence that the adjustments are unreasonable; or
11            if the taxpayer and the Director agree in writing
12            to the application or use of an alternative method
13            of apportionment under Section 304(f).
14                Nothing in this subsection shall preclude the
15            Director from making any other adjustment
16            otherwise allowed under Section 404 of this Act for
17            any tax year beginning after the effective date of
18            this amendment provided such adjustment is made
19            pursuant to regulation adopted by the Department
20            and such regulations provide methods and standards
21            by which the Department will utilize its authority
22            under Section 404 of this Act; and
23            (D-8) An amount equal to the amount of intangible
24        expenses and costs otherwise allowed as a deduction in
25        computing base income, and that were paid, accrued, or
26        incurred, directly or indirectly, (i) for taxable

 

 

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1        years ending on or after December 31, 2004, to a
2        foreign person who would be a member of the same
3        unitary business group but for the fact that the
4        foreign person's business activity outside the United
5        States is 80% or more of that person's total business
6        activity and (ii) for taxable years ending on or after
7        December 31, 2008, to a person who would be a member of
8        the same unitary business group but for the fact that
9        the person is prohibited under Section 1501(a)(27)
10        from being included in the unitary business group
11        because he or she is ordinarily required to apportion
12        business income under different subsections of Section
13        304. The addition modification required by this
14        subparagraph shall be reduced to the extent that
15        dividends were included in base income of the unitary
16        group for the same taxable year and received by the
17        taxpayer or by a member of the taxpayer's unitary
18        business group (including amounts included in gross
19        income pursuant to Sections 951 through 964 of the
20        Internal Revenue Code and amounts included in gross
21        income under Section 78 of the Internal Revenue Code)
22        with respect to the stock of the same person to whom
23        the intangible expenses and costs were directly or
24        indirectly paid, incurred or accrued. The preceding
25        sentence shall not apply to the extent that the same
26        dividends caused a reduction to the addition

 

 

SB1515- 80 -LRB101 08648 HLH 53732 b

1        modification required under Section 203(d)(2)(D-7) of
2        this Act. As used in this subparagraph, the term
3        "intangible expenses and costs" includes (1) expenses,
4        losses, and costs for, or related to, the direct or
5        indirect acquisition, use, maintenance or management,
6        ownership, sale, exchange, or any other disposition of
7        intangible property; (2) losses incurred, directly or
8        indirectly, from factoring transactions or discounting
9        transactions; (3) royalty, patent, technical, and
10        copyright fees; (4) licensing fees; and (5) other
11        similar expenses and costs. For purposes of this
12        subparagraph, "intangible property" includes patents,
13        patent applications, trade names, trademarks, service
14        marks, copyrights, mask works, trade secrets, and
15        similar types of intangible assets;
16            This paragraph shall not apply to the following:
17                (i) any item of intangible expenses or costs
18            paid, accrued, or incurred, directly or
19            indirectly, from a transaction with a person who is
20            subject in a foreign country or state, other than a
21            state which requires mandatory unitary reporting,
22            to a tax on or measured by net income with respect
23            to such item; or
24                (ii) any item of intangible expense or cost
25            paid, accrued, or incurred, directly or
26            indirectly, if the taxpayer can establish, based

 

 

SB1515- 81 -LRB101 08648 HLH 53732 b

1            on a preponderance of the evidence, both of the
2            following:
3                    (a) the person during the same taxable
4                year paid, accrued, or incurred, the
5                intangible expense or cost to a person that is
6                not a related member, and
7                    (b) the transaction giving rise to the
8                intangible expense or cost between the
9                taxpayer and the person did not have as a
10                principal purpose the avoidance of Illinois
11                income tax, and is paid pursuant to a contract
12                or agreement that reflects arm's-length terms;
13                or
14                (iii) any item of intangible expense or cost
15            paid, accrued, or incurred, directly or
16            indirectly, from a transaction with a person if the
17            taxpayer establishes by clear and convincing
18            evidence, that the adjustments are unreasonable;
19            or if the taxpayer and the Director agree in
20            writing to the application or use of an alternative
21            method of apportionment under Section 304(f);
22                Nothing in this subsection shall preclude the
23            Director from making any other adjustment
24            otherwise allowed under Section 404 of this Act for
25            any tax year beginning after the effective date of
26            this amendment provided such adjustment is made

 

 

SB1515- 82 -LRB101 08648 HLH 53732 b

1            pursuant to regulation adopted by the Department
2            and such regulations provide methods and standards
3            by which the Department will utilize its authority
4            under Section 404 of this Act;
5            (D-9) For taxable years ending on or after December
6        31, 2008, an amount equal to the amount of insurance
7        premium expenses and costs otherwise allowed as a
8        deduction in computing base income, and that were paid,
9        accrued, or incurred, directly or indirectly, to a
10        person who would be a member of the same unitary
11        business group but for the fact that the person is
12        prohibited under Section 1501(a)(27) from being
13        included in the unitary business group because he or
14        she is ordinarily required to apportion business
15        income under different subsections of Section 304. The
16        addition modification required by this subparagraph
17        shall be reduced to the extent that dividends were
18        included in base income of the unitary group for the
19        same taxable year and received by the taxpayer or by a
20        member of the taxpayer's unitary business group
21        (including amounts included in gross income under
22        Sections 951 through 964 of the Internal Revenue Code
23        and amounts included in gross income under Section 78
24        of the Internal Revenue Code) with respect to the stock
25        of the same person to whom the premiums and costs were
26        directly or indirectly paid, incurred, or accrued. The

 

 

SB1515- 83 -LRB101 08648 HLH 53732 b

1        preceding sentence does not apply to the extent that
2        the same dividends caused a reduction to the addition
3        modification required under Section 203(d)(2)(D-7) or
4        Section 203(d)(2)(D-8) of this Act;
5            (D-10) An amount equal to the credit allowable to
6        the taxpayer under Section 218(a) of this Act,
7        determined without regard to Section 218(c) of this
8        Act;
9            (D-11) For taxable years ending on or after
10        December 31, 2017, an amount equal to the deduction
11        allowed under Section 199 of the Internal Revenue Code
12        for the taxable year;
13    and by deducting from the total so obtained the following
14    amounts:
15            (E) The valuation limitation amount;
16            (F) An amount equal to the amount of any tax
17        imposed by this Act which was refunded to the taxpayer
18        and included in such total for the taxable year;
19            (G) An amount equal to all amounts included in
20        taxable income as modified by subparagraphs (A), (B),
21        (C) and (D) which are exempt from taxation by this
22        State either by reason of its statutes or Constitution
23        or by reason of the Constitution, treaties or statutes
24        of the United States; provided that, in the case of any
25        statute of this State that exempts income derived from
26        bonds or other obligations from the tax imposed under

 

 

SB1515- 84 -LRB101 08648 HLH 53732 b

1        this Act, the amount exempted shall be the interest net
2        of bond premium amortization;
3            (H) Any income of the partnership which
4        constitutes personal service income as defined in
5        Section 1348(b)(1) of the Internal Revenue Code (as in
6        effect December 31, 1981) or a reasonable allowance for
7        compensation paid or accrued for services rendered by
8        partners to the partnership, whichever is greater;
9        this subparagraph (H) is exempt from the provisions of
10        Section 250;
11            (I) An amount equal to all amounts of income
12        distributable to an entity subject to the Personal
13        Property Tax Replacement Income Tax imposed by
14        subsections (c) and (d) of Section 201 of this Act
15        including amounts distributable to organizations
16        exempt from federal income tax by reason of Section
17        501(a) of the Internal Revenue Code; this subparagraph
18        (I) is exempt from the provisions of Section 250;
19            (J) With the exception of any amounts subtracted
20        under subparagraph (G), an amount equal to the sum of
21        all amounts disallowed as deductions by (i) Sections
22        171(a)(2), and 265(a)(2) 265(2) of the Internal
23        Revenue Code, and all amounts of expenses allocable to
24        interest and disallowed as deductions by Section
25        265(a)(1) 265(1) of the Internal Revenue Code; and (ii)
26        for taxable years ending on or after August 13, 1999,

 

 

SB1515- 85 -LRB101 08648 HLH 53732 b

1        Sections 171(a)(2), 265, 280C, and 832(b)(5)(B)(i) of
2        the Internal Revenue Code, plus, (iii) for taxable
3        years ending on or after December 31, 2011, Section
4        45G(e)(3) of the Internal Revenue Code and, for taxable
5        years ending on or after December 31, 2008, any amount
6        included in gross income under Section 87 of the
7        Internal Revenue Code; the provisions of this
8        subparagraph are exempt from the provisions of Section
9        250;
10            (K) An amount equal to those dividends included in
11        such total which were paid by a corporation which
12        conducts business operations in a River Edge
13        Redevelopment Zone or zones created under the River
14        Edge Redevelopment Zone Act and conducts substantially
15        all of its operations from a River Edge Redevelopment
16        Zone or zones. This subparagraph (K) is exempt from the
17        provisions of Section 250;
18            (L) An amount equal to any contribution made to a
19        job training project established pursuant to the Real
20        Property Tax Increment Allocation Redevelopment Act;
21            (M) An amount equal to those dividends included in
22        such total that were paid by a corporation that
23        conducts business operations in a federally designated
24        Foreign Trade Zone or Sub-Zone and that is designated a
25        High Impact Business located in Illinois; provided
26        that dividends eligible for the deduction provided in

 

 

SB1515- 86 -LRB101 08648 HLH 53732 b

1        subparagraph (K) of paragraph (2) of this subsection
2        shall not be eligible for the deduction provided under
3        this subparagraph (M);
4            (N) An amount equal to the amount of the deduction
5        used to compute the federal income tax credit for
6        restoration of substantial amounts held under claim of
7        right for the taxable year pursuant to Section 1341 of
8        the Internal Revenue Code;
9            (O) For taxable years 2001 and thereafter, for the
10        taxable year in which the bonus depreciation deduction
11        is taken on the taxpayer's federal income tax return
12        under subsection (k) of Section 168 of the Internal
13        Revenue Code and for each applicable taxable year
14        thereafter, an amount equal to "x", where:
15                (1) "y" equals the amount of the depreciation
16            deduction taken for the taxable year on the
17            taxpayer's federal income tax return on property
18            for which the bonus depreciation deduction was
19            taken in any year under subsection (k) of Section
20            168 of the Internal Revenue Code, but not including
21            the bonus depreciation deduction;
22                (2) for taxable years ending on or before
23            December 31, 2005, "x" equals "y" multiplied by 30
24            and then divided by 70 (or "y" multiplied by
25            0.429); and
26                (3) for taxable years ending after December

 

 

SB1515- 87 -LRB101 08648 HLH 53732 b

1            31, 2005:
2                    (i) for property on which a bonus
3                depreciation deduction of 30% of the adjusted
4                basis was taken, "x" equals "y" multiplied by
5                30 and then divided by 70 (or "y" multiplied by
6                0.429); and
7                    (ii) for property on which a bonus
8                depreciation deduction of 50% of the adjusted
9                basis was taken, "x" equals "y" multiplied by
10                1.0.
11            The aggregate amount deducted under this
12        subparagraph in all taxable years for any one piece of
13        property may not exceed the amount of the bonus
14        depreciation deduction taken on that property on the
15        taxpayer's federal income tax return under subsection
16        (k) of Section 168 of the Internal Revenue Code. This
17        subparagraph (O) is exempt from the provisions of
18        Section 250;
19            (P) If the taxpayer sells, transfers, abandons, or
20        otherwise disposes of property for which the taxpayer
21        was required in any taxable year to make an addition
22        modification under subparagraph (D-5), then an amount
23        equal to that addition modification.
24            If the taxpayer continues to own property through
25        the last day of the last tax year for which the
26        taxpayer may claim a depreciation deduction for

 

 

SB1515- 88 -LRB101 08648 HLH 53732 b

1        federal income tax purposes and for which the taxpayer
2        was required in any taxable year to make an addition
3        modification under subparagraph (D-5), then an amount
4        equal to that addition modification.
5            The taxpayer is allowed to take the deduction under
6        this subparagraph only once with respect to any one
7        piece of property.
8            This subparagraph (P) is exempt from the
9        provisions of Section 250;
10            (Q) The amount of (i) any interest income (net of
11        the deductions allocable thereto) taken into account
12        for the taxable year with respect to a transaction with
13        a taxpayer that is required to make an addition
14        modification with respect to such transaction under
15        Section 203(a)(2)(D-17), 203(b)(2)(E-12),
16        203(c)(2)(G-12), or 203(d)(2)(D-7), but not to exceed
17        the amount of such addition modification and (ii) any
18        income from intangible property (net of the deductions
19        allocable thereto) taken into account for the taxable
20        year with respect to a transaction with a taxpayer that
21        is required to make an addition modification with
22        respect to such transaction under Section
23        203(a)(2)(D-18), 203(b)(2)(E-13), 203(c)(2)(G-13), or
24        203(d)(2)(D-8), but not to exceed the amount of such
25        addition modification. This subparagraph (Q) is exempt
26        from Section 250;

 

 

SB1515- 89 -LRB101 08648 HLH 53732 b

1            (R) An amount equal to the interest income taken
2        into account for the taxable year (net of the
3        deductions allocable thereto) with respect to
4        transactions with (i) a foreign person who would be a
5        member of the taxpayer's unitary business group but for
6        the fact that the foreign person's business activity
7        outside the United States is 80% or more of that
8        person's total business activity and (ii) for taxable
9        years ending on or after December 31, 2008, to a person
10        who would be a member of the same unitary business
11        group but for the fact that the person is prohibited
12        under Section 1501(a)(27) from being included in the
13        unitary business group because he or she is ordinarily
14        required to apportion business income under different
15        subsections of Section 304, but not to exceed the
16        addition modification required to be made for the same
17        taxable year under Section 203(d)(2)(D-7) for interest
18        paid, accrued, or incurred, directly or indirectly, to
19        the same person. This subparagraph (R) is exempt from
20        Section 250;
21            (S) An amount equal to the income from intangible
22        property taken into account for the taxable year (net
23        of the deductions allocable thereto) with respect to
24        transactions with (i) a foreign person who would be a
25        member of the taxpayer's unitary business group but for
26        the fact that the foreign person's business activity

 

 

SB1515- 90 -LRB101 08648 HLH 53732 b

1        outside the United States is 80% or more of that
2        person's total business activity and (ii) for taxable
3        years ending on or after December 31, 2008, to a person
4        who would be a member of the same unitary business
5        group but for the fact that the person is prohibited
6        under Section 1501(a)(27) from being included in the
7        unitary business group because he or she is ordinarily
8        required to apportion business income under different
9        subsections of Section 304, but not to exceed the
10        addition modification required to be made for the same
11        taxable year under Section 203(d)(2)(D-8) for
12        intangible expenses and costs paid, accrued, or
13        incurred, directly or indirectly, to the same person.
14        This subparagraph (S) is exempt from Section 250; and
15            (T) For taxable years ending on or after December
16        31, 2011, in the case of a taxpayer who was required to
17        add back any insurance premiums under Section
18        203(d)(2)(D-9), such taxpayer may elect to subtract
19        that part of a reimbursement received from the
20        insurance company equal to the amount of the expense or
21        loss (including expenses incurred by the insurance
22        company) that would have been taken into account as a
23        deduction for federal income tax purposes if the
24        expense or loss had been uninsured. If a taxpayer makes
25        the election provided for by this subparagraph (T), the
26        insurer to which the premiums were paid must add back

 

 

SB1515- 91 -LRB101 08648 HLH 53732 b

1        to income the amount subtracted by the taxpayer
2        pursuant to this subparagraph (T). This subparagraph
3        (T) is exempt from the provisions of Section 250; and .
4            (U) For tax years beginning on or after January 1,
5        2019, an amount equal to the amount included in the
6        taxpayer's federal adjusted gross income as as result
7        of the application of Section 512(a)(7) of the Internal
8        Revenue Code; this subparagraph is exempt from the
9        provisions of Section 250.
 
10    (e) Gross income; adjusted gross income; taxable income.
11        (1) In general. Subject to the provisions of paragraph
12    (2) and subsection (b)(3), for purposes of this Section and
13    Section 803(e), a taxpayer's gross income, adjusted gross
14    income, or taxable income for the taxable year shall mean
15    the amount of gross income, adjusted gross income or
16    taxable income properly reportable for federal income tax
17    purposes for the taxable year under the provisions of the
18    Internal Revenue Code. Taxable income may be less than
19    zero. However, for taxable years ending on or after
20    December 31, 1986, net operating loss carryforwards from
21    taxable years ending prior to December 31, 1986, may not
22    exceed the sum of federal taxable income for the taxable
23    year before net operating loss deduction, plus the excess
24    of addition modifications over subtraction modifications
25    for the taxable year. For taxable years ending prior to

 

 

SB1515- 92 -LRB101 08648 HLH 53732 b

1    December 31, 1986, taxable income may never be an amount in
2    excess of the net operating loss for the taxable year as
3    defined in subsections (c) and (d) of Section 172 of the
4    Internal Revenue Code, provided that when taxable income of
5    a corporation (other than a Subchapter S corporation),
6    trust, or estate is less than zero and addition
7    modifications, other than those provided by subparagraph
8    (E) of paragraph (2) of subsection (b) for corporations or
9    subparagraph (E) of paragraph (2) of subsection (c) for
10    trusts and estates, exceed subtraction modifications, an
11    addition modification must be made under those
12    subparagraphs for any other taxable year to which the
13    taxable income less than zero (net operating loss) is
14    applied under Section 172 of the Internal Revenue Code or
15    under subparagraph (E) of paragraph (2) of this subsection
16    (e) applied in conjunction with Section 172 of the Internal
17    Revenue Code.
18        (2) Special rule. For purposes of paragraph (1) of this
19    subsection, the taxable income properly reportable for
20    federal income tax purposes shall mean:
21            (A) Certain life insurance companies. In the case
22        of a life insurance company subject to the tax imposed
23        by Section 801 of the Internal Revenue Code, life
24        insurance company taxable income, plus the amount of
25        distribution from pre-1984 policyholder surplus
26        accounts as calculated under Section 815a of the

 

 

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1        Internal Revenue Code;
2            (B) Certain other insurance companies. In the case
3        of mutual insurance companies subject to the tax
4        imposed by Section 831 of the Internal Revenue Code,
5        insurance company taxable income;
6            (C) Regulated investment companies. In the case of
7        a regulated investment company subject to the tax
8        imposed by Section 852 of the Internal Revenue Code,
9        investment company taxable income;
10            (D) Real estate investment trusts. In the case of a
11        real estate investment trust subject to the tax imposed
12        by Section 857 of the Internal Revenue Code, real
13        estate investment trust taxable income;
14            (E) Consolidated corporations. In the case of a
15        corporation which is a member of an affiliated group of
16        corporations filing a consolidated income tax return
17        for the taxable year for federal income tax purposes,
18        taxable income determined as if such corporation had
19        filed a separate return for federal income tax purposes
20        for the taxable year and each preceding taxable year
21        for which it was a member of an affiliated group. For
22        purposes of this subparagraph, the taxpayer's separate
23        taxable income shall be determined as if the election
24        provided by Section 243(b)(2) of the Internal Revenue
25        Code had been in effect for all such years;
26            (F) Cooperatives. In the case of a cooperative

 

 

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1        corporation or association, the taxable income of such
2        organization determined in accordance with the
3        provisions of Section 1381 through 1388 of the Internal
4        Revenue Code, but without regard to the prohibition
5        against offsetting losses from patronage activities
6        against income from nonpatronage activities; except
7        that a cooperative corporation or association may make
8        an election to follow its federal income tax treatment
9        of patronage losses and nonpatronage losses. In the
10        event such election is made, such losses shall be
11        computed and carried over in a manner consistent with
12        subsection (a) of Section 207 of this Act and
13        apportioned by the apportionment factor reported by
14        the cooperative on its Illinois income tax return filed
15        for the taxable year in which the losses are incurred.
16        The election shall be effective for all taxable years
17        with original returns due on or after the date of the
18        election. In addition, the cooperative may file an
19        amended return or returns, as allowed under this Act,
20        to provide that the election shall be effective for
21        losses incurred or carried forward for taxable years
22        occurring prior to the date of the election. Once made,
23        the election may only be revoked upon approval of the
24        Director. The Department shall adopt rules setting
25        forth requirements for documenting the elections and
26        any resulting Illinois net loss and the standards to be

 

 

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1        used by the Director in evaluating requests to revoke
2        elections. Public Act 96-932 is declaratory of
3        existing law;
4            (G) Subchapter S corporations. In the case of: (i)
5        a Subchapter S corporation for which there is in effect
6        an election for the taxable year under Section 1362 of
7        the Internal Revenue Code, the taxable income of such
8        corporation determined in accordance with Section
9        1363(b) of the Internal Revenue Code, except that
10        taxable income shall take into account those items
11        which are required by Section 1363(b)(1) of the
12        Internal Revenue Code to be separately stated; and (ii)
13        a Subchapter S corporation for which there is in effect
14        a federal election to opt out of the provisions of the
15        Subchapter S Revision Act of 1982 and have applied
16        instead the prior federal Subchapter S rules as in
17        effect on July 1, 1982, the taxable income of such
18        corporation determined in accordance with the federal
19        Subchapter S rules as in effect on July 1, 1982; and
20            (H) Partnerships. In the case of a partnership,
21        taxable income determined in accordance with Section
22        703 of the Internal Revenue Code, except that taxable
23        income shall take into account those items which are
24        required by Section 703(a)(1) to be separately stated
25        but which would be taken into account by an individual
26        in calculating his taxable income.

 

 

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1        (3) Recapture of business expenses on disposition of
2    asset or business. Notwithstanding any other law to the
3    contrary, if in prior years income from an asset or
4    business has been classified as business income and in a
5    later year is demonstrated to be non-business income, then
6    all expenses, without limitation, deducted in such later
7    year and in the 2 immediately preceding taxable years
8    related to that asset or business that generated the
9    non-business income shall be added back and recaptured as
10    business income in the year of the disposition of the asset
11    or business. Such amount shall be apportioned to Illinois
12    using the greater of the apportionment fraction computed
13    for the business under Section 304 of this Act for the
14    taxable year or the average of the apportionment fractions
15    computed for the business under Section 304 of this Act for
16    the taxable year and for the 2 immediately preceding
17    taxable years.
 
18    (f) Valuation limitation amount.
19        (1) In general. The valuation limitation amount
20    referred to in subsections (a)(2)(G), (c)(2)(I) and
21    (d)(2)(E) is an amount equal to:
22            (A) The sum of the pre-August 1, 1969 appreciation
23        amounts (to the extent consisting of gain reportable
24        under the provisions of Section 1245 or 1250 of the
25        Internal Revenue Code) for all property in respect of

 

 

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1        which such gain was reported for the taxable year; plus
2            (B) The lesser of (i) the sum of the pre-August 1,
3        1969 appreciation amounts (to the extent consisting of
4        capital gain) for all property in respect of which such
5        gain was reported for federal income tax purposes for
6        the taxable year, or (ii) the net capital gain for the
7        taxable year, reduced in either case by any amount of
8        such gain included in the amount determined under
9        subsection (a)(2)(F) or (c)(2)(H).
10        (2) Pre-August 1, 1969 appreciation amount.
11            (A) If the fair market value of property referred
12        to in paragraph (1) was readily ascertainable on August
13        1, 1969, the pre-August 1, 1969 appreciation amount for
14        such property is the lesser of (i) the excess of such
15        fair market value over the taxpayer's basis (for
16        determining gain) for such property on that date
17        (determined under the Internal Revenue Code as in
18        effect on that date), or (ii) the total gain realized
19        and reportable for federal income tax purposes in
20        respect of the sale, exchange or other disposition of
21        such property.
22            (B) If the fair market value of property referred
23        to in paragraph (1) was not readily ascertainable on
24        August 1, 1969, the pre-August 1, 1969 appreciation
25        amount for such property is that amount which bears the
26        same ratio to the total gain reported in respect of the

 

 

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1        property for federal income tax purposes for the
2        taxable year, as the number of full calendar months in
3        that part of the taxpayer's holding period for the
4        property ending July 31, 1969 bears to the number of
5        full calendar months in the taxpayer's entire holding
6        period for the property.
7            (C) The Department shall prescribe such
8        regulations as may be necessary to carry out the
9        purposes of this paragraph.
 
10    (g) Double deductions. Unless specifically provided
11otherwise, nothing in this Section shall permit the same item
12to be deducted more than once.
 
13    (h) Legislative intention. Except as expressly provided by
14this Section there shall be no modifications or limitations on
15the amounts of income, gain, loss or deduction taken into
16account in determining gross income, adjusted gross income or
17taxable income for federal income tax purposes for the taxable
18year, or in the amount of such items entering into the
19computation of base income and net income under this Act for
20such taxable year, whether in respect of property values as of
21August 1, 1969 or otherwise.
22(Source: P.A. 100-22, eff. 7-6-17; 100-905, eff. 8-17-18;
23revised 10-29-18.)
 
24    Section 99. Effective date. This Act takes effect upon

 

 

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1becoming law.