102ND GENERAL ASSEMBLY
State of Illinois
2021 and 2022
HB2888

 

Introduced 2/19/2021, by Rep. Adam Niemerg

 

SYNOPSIS AS INTRODUCED:
 
35 ILCS 5/201

    Amends the Illinois Income Tax Act. Reduces the rate of tax on corporations from 7% to 5.5%. Effective immediately.


LRB102 11372 HLH 16705 b

FISCAL NOTE ACT MAY APPLY

 

 

A BILL FOR

 

HB2888LRB102 11372 HLH 16705 b

1    AN ACT concerning revenue.
 
2    Be it enacted by the People of the State of Illinois,
3represented in the General Assembly:
 
4    Section 5. The Illinois Income Tax Act is amended by
5changing Section 201 as follows:
 
6    (35 ILCS 5/201)
7    (Text of Section without the changes made by P.A. 101-8,
8which did not take effect (see Section 99 of P.A. 101-8))
9    Sec. 201. Tax imposed.
10    (a) In general. A tax measured by net income is hereby
11imposed on every individual, corporation, trust and estate for
12each taxable year ending after July 31, 1969 on the privilege
13of earning or receiving income in or as a resident of this
14State. Such tax shall be in addition to all other occupation or
15privilege taxes imposed by this State or by any municipal
16corporation or political subdivision thereof.
17    (b) Rates. The tax imposed by subsection (a) of this
18Section shall be determined as follows, except as adjusted by
19subsection (d-1):
20        (1) In the case of an individual, trust or estate, for
21    taxable years ending prior to July 1, 1989, an amount
22    equal to 2 1/2% of the taxpayer's net income for the
23    taxable year.

 

 

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

 

 

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

 

 

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

 

 

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1    beginning on or after January 1, 2015, and ending prior to
2    July 1, 2017, an amount equal to 5.25% of the taxpayer's
3    net income for the taxable year.
4        (13) In the case of a corporation, for taxable years
5    beginning prior to July 1, 2017, and ending after June 30,
6    2017, an amount equal to the sum of (i) 5.25% of the
7    taxpayer's net income for the period prior to July 1,
8    2017, as calculated under Section 202.5, and (ii) 7% of
9    the taxpayer's net income for the period after June 30,
10    2017, as calculated under Section 202.5.
11        (14) In the case of a corporation, for taxable years
12    beginning on or after July 1, 2017 and ending prior to
13    January 1, 2021, an amount equal to 7% of the taxpayer's
14    net income for the taxable year.
15        (15) In the case of a corporation, for taxable years
16    beginning prior to January 1, 2021, and ending after
17    December 31, 2020, an amount equal to the sum of (i) 7% of
18    the taxpayer's net income for the period prior to January
19    1, 2021, as calculated under Section 202.5, and (ii) 5.5%
20    of the taxpayer's net income for the period after December
21    31, 2020, as calculated under Section 202.5.
22        (16) In the case of a corporation, for taxable years
23    beginning on or after January 1, 2021, an amount equal to
24    5.5% of the taxpayer's net income for the taxable year.
25    The rates under this subsection (b) are subject to the
26provisions of Section 201.5.

 

 

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

 

 

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

 

 

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1    (c) Personal Property Tax Replacement Income Tax.
2Beginning on July 1, 1979 and thereafter, in addition to such
3income tax, there is also hereby imposed the Personal Property
4Tax Replacement Income Tax measured by net income on every
5corporation (including Subchapter S corporations), partnership
6and trust, for each taxable year ending after June 30, 1979.
7Such taxes are imposed on the privilege of earning or
8receiving income in or as a resident of this State. The
9Personal Property Tax Replacement Income Tax shall be in
10addition to the income tax imposed by subsections (a) and (b)
11of this Section and in addition to all other occupation or
12privilege taxes imposed by this State or by any municipal
13corporation or political subdivision thereof.
14    (d) Additional Personal Property Tax Replacement Income
15Tax Rates. The personal property tax replacement income tax
16imposed by this subsection and subsection (c) of this Section
17in the case of a corporation, other than a Subchapter S
18corporation and except as adjusted by subsection (d-1), shall
19be an additional amount equal to 2.85% of such taxpayer's net
20income for the taxable year, except that beginning on January
211, 1981, and thereafter, the rate of 2.85% specified in this
22subsection shall be reduced to 2.5%, and in the case of a
23partnership, trust or a Subchapter S corporation shall be an
24additional amount equal to 1.5% of such taxpayer's net income
25for the taxable year.
26    (d-1) Rate reduction for certain foreign insurers. In the

 

 

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

 

 

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1            (A) the total amount of tax imposed on such
2        foreign insurer under this Act for a taxable year, net
3        of all credits allowed under this Act, plus
4            (B) the privilege tax imposed by Section 409 of
5        the Illinois Insurance Code, the fire insurance
6        company tax imposed by Section 12 of the Fire
7        Investigation Act, and the fire department taxes
8        imposed under Section 11-10-1 of the Illinois
9        Municipal Code,
10    equals 1.25% for taxable years ending prior to December
11    31, 2003, or 1.75% for taxable years ending on or after
12    December 31, 2003, of the net taxable premiums written for
13    the taxable year, as described by subsection (1) of
14    Section 409 of the Illinois Insurance Code. This paragraph
15    will in no event increase the rates imposed under
16    subsections (b) and (d).
17        (2) Any reduction in the rates of tax imposed by this
18    subsection shall be applied first against the rates
19    imposed by subsection (b) and only after the tax imposed
20    by subsection (a) net of all credits allowed under this
21    Section other than the credit allowed under subsection (i)
22    has been reduced to zero, against the rates imposed by
23    subsection (d).
24    This subsection (d-1) is exempt from the provisions of
25Section 250.
26    (e) Investment credit. A taxpayer shall be allowed a

 

 

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

 

 

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1    taxpayer's liability in any tax year below zero, nor may
2    any credit for qualified property be allowed for any year
3    other than the year in which the property was placed in
4    service in Illinois. For tax years ending on or after
5    December 31, 1987, and on or before December 31, 1988, the
6    credit shall be allowed for the tax year in which the
7    property is placed in service, or, if the amount of the
8    credit exceeds the tax liability for that year, whether it
9    exceeds the original liability or the liability as later
10    amended, such excess may be carried forward and applied to
11    the tax liability of the 5 taxable years following the
12    excess credit years if the taxpayer (i) makes investments
13    which cause the creation of a minimum of 2,000 full-time
14    equivalent jobs in Illinois, (ii) is located in an
15    enterprise zone established pursuant to the Illinois
16    Enterprise Zone Act and (iii) is certified by the
17    Department of Commerce and Community Affairs (now
18    Department of Commerce and Economic Opportunity) as
19    complying with the requirements specified in clause (i)
20    and (ii) by July 1, 1986. The Department of Commerce and
21    Community Affairs (now Department of Commerce and Economic
22    Opportunity) shall notify the Department of Revenue of all
23    such certifications immediately. For tax years ending
24    after December 31, 1988, the credit shall be allowed for
25    the tax year in which the property is placed in service,
26    or, if the amount of the credit exceeds the tax liability

 

 

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

 

 

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1        or fluorite, or in retailing, or was placed in service
2        on or after July 1, 2006 in a River Edge Redevelopment
3        Zone established pursuant to the River Edge
4        Redevelopment Zone Act; and
5            (E) has not previously been used in Illinois in
6        such a manner and by such a person as would qualify for
7        the credit provided by this subsection (e) or
8        subsection (f).
9        (3) For purposes of this subsection (e),
10    "manufacturing" means the material staging and production
11    of tangible personal property by procedures commonly
12    regarded as manufacturing, processing, fabrication, or
13    assembling which changes some existing material into new
14    shapes, new qualities, or new combinations. For purposes
15    of this subsection (e) the term "mining" shall have the
16    same meaning as the term "mining" in Section 613(c) of the
17    Internal Revenue Code. For purposes of this subsection
18    (e), the term "retailing" means the sale of tangible
19    personal property for use or consumption and not for
20    resale, or services rendered in conjunction with the sale
21    of tangible personal property for use or consumption and
22    not for resale. For purposes of this subsection (e),
23    "tangible personal property" has the same meaning as when
24    that term is used in the Retailers' Occupation Tax Act,
25    and, for taxable years ending after December 31, 2008,
26    does not include the generation, transmission, or

 

 

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

 

 

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

 

 

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

 

 

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

 

 

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

 

 

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

 

 

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

 

 

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

 

 

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

 

 

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1        Changes made in this subdivision (h)(1) by Public Act
2    88-670 restore changes made by Public Act 85-1182 and
3    reflect existing law.
4        (2) The term qualified property means property which:
5            (A) is tangible, whether new or used, including
6        buildings and structural components of buildings;
7            (B) is depreciable pursuant to Section 167 of the
8        Internal Revenue Code, except that "3-year property"
9        as defined in Section 168(c)(2)(A) of that Code is not
10        eligible for the credit provided by this subsection
11        (h);
12            (C) is acquired by purchase as defined in Section
13        179(d) of the Internal Revenue Code; and
14            (D) is not eligible for the Enterprise Zone
15        Investment Credit provided by subsection (f) of this
16        Section.
17        (3) The basis of qualified property shall be the basis
18    used to compute the depreciation deduction for federal
19    income tax purposes.
20        (4) If the basis of the property for federal income
21    tax depreciation purposes is increased after it has been
22    placed in service in a federally designated Foreign Trade
23    Zone or Sub-Zone located in Illinois by the taxpayer, the
24    amount of such increase shall be deemed property placed in
25    service on the date of such increase in basis.
26        (5) The term "placed in service" shall have the same

 

 

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1    meaning as under Section 46 of the Internal Revenue Code.
2        (6) If during any taxable year ending on or before
3    December 31, 1996, any property ceases to be qualified
4    property in the hands of the taxpayer within 48 months
5    after being placed in service, or the situs of any
6    qualified property is moved outside Illinois within 48
7    months after being placed in service, the tax imposed
8    under subsections (a) and (b) of this Section for such
9    taxable year shall be increased. Such increase shall be
10    determined by (i) recomputing the investment credit which
11    would have been allowed for the year in which credit for
12    such property was originally allowed by eliminating such
13    property from such computation, and (ii) subtracting such
14    recomputed credit from the amount of credit previously
15    allowed. For the purposes of this paragraph (6), a
16    reduction of the basis of qualified property resulting
17    from a redetermination of the purchase price shall be
18    deemed a disposition of qualified property to the extent
19    of such reduction.
20        (7) Beginning with tax years ending after December 31,
21    1996, if a taxpayer qualifies for the credit under this
22    subsection (h) and thereby is granted a tax abatement and
23    the taxpayer relocates its entire facility in violation of
24    the explicit terms and length of the contract under
25    Section 18-183 of the Property Tax Code, the tax imposed
26    under subsections (a) and (b) of this Section shall be

 

 

HB2888- 26 -LRB102 11372 HLH 16705 b

1    increased for the taxable year in which the taxpayer
2    relocated its facility by an amount equal to the amount of
3    credit received by the taxpayer under this subsection (h).
4    (h-5) High Impact Business construction constructions jobs
5credit. For taxable years beginning on or after January 1,
62021, there shall also be allowed a High Impact Business
7construction jobs credit against the tax imposed under
8subsections (a) and (b) of this Section as provided in
9subsections (i) and (j) of Section 5.5 of the Illinois
10Enterprise Zone Act.
11    The credit or credits may not reduce the taxpayer's
12liability to less than zero. If the amount of the credit or
13credits exceeds the taxpayer's liability, the excess may be
14carried forward and applied against the taxpayer's liability
15in succeeding calendar years in the manner provided under
16paragraph (4) of Section 211 of this Act. The credit or credits
17shall be applied to the earliest year for which there is a tax
18liability. If there are credits from more than one taxable
19year that are available to offset a liability, the earlier
20credit shall be applied first.
21    For partners, shareholders of Subchapter S corporations,
22and owners of limited liability companies, if the liability
23company is treated as a partnership for the purposes of
24federal and State income taxation, there shall be allowed a
25credit under this Section to be determined in accordance with
26the determination of income and distributive share of income

 

 

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1under Sections 702 and 704 and Subchapter S of the Internal
2Revenue Code.
3    The total aggregate amount of credits awarded under the
4Blue Collar Jobs Act (Article 20 of Public Act 101-9 this
5amendatory Act of the 101st General Assembly) shall not exceed
6$20,000,000 in any State fiscal year.
7    This subsection (h-5) is exempt from the provisions of
8Section 250.
9    (i) Credit for Personal Property Tax Replacement Income
10Tax. For tax years ending prior to December 31, 2003, a credit
11shall be allowed against the tax imposed by subsections (a)
12and (b) of this Section for the tax imposed by subsections (c)
13and (d) of this Section. This credit shall be computed by
14multiplying the tax imposed by subsections (c) and (d) of this
15Section by a fraction, the numerator of which is base income
16allocable to Illinois and the denominator of which is Illinois
17base income, and further multiplying the product by the tax
18rate imposed by subsections (a) and (b) of this Section.
19    Any credit earned on or after December 31, 1986 under this
20subsection which is unused in the year the credit is computed
21because it exceeds the tax liability imposed by subsections
22(a) and (b) for that year (whether it exceeds the original
23liability or the liability as later amended) may be carried
24forward and applied to the tax liability imposed by
25subsections (a) and (b) of the 5 taxable years following the
26excess credit year, provided that no credit may be carried

 

 

HB2888- 28 -LRB102 11372 HLH 16705 b

1forward to any year ending on or after December 31, 2003. This
2credit shall be applied first to the earliest year for which
3there is a liability. If there is a credit under this
4subsection from more than one tax year that is available to
5offset a liability the earliest credit arising under this
6subsection shall be applied first.
7    If, during any taxable year ending on or after December
831, 1986, the tax imposed by subsections (c) and (d) of this
9Section for which a taxpayer has claimed a credit under this
10subsection (i) is reduced, the amount of credit for such tax
11shall also be reduced. Such reduction shall be determined by
12recomputing the credit to take into account the reduced tax
13imposed by subsections (c) and (d). If any portion of the
14reduced amount of credit has been carried to a different
15taxable year, an amended return shall be filed for such
16taxable year to reduce the amount of credit claimed.
17    (j) Training expense credit. Beginning with tax years
18ending on or after December 31, 1986 and prior to December 31,
192003, a taxpayer shall be allowed a credit against the tax
20imposed by subsections (a) and (b) under this Section for all
21amounts paid or accrued, on behalf of all persons employed by
22the taxpayer in Illinois or Illinois residents employed
23outside of Illinois by a taxpayer, for educational or
24vocational training in semi-technical or technical fields or
25semi-skilled or skilled fields, which were deducted from gross
26income in the computation of taxable income. The credit

 

 

HB2888- 29 -LRB102 11372 HLH 16705 b

1against the tax imposed by subsections (a) and (b) shall be
21.6% of such training expenses. For partners, shareholders of
3subchapter S corporations, and owners of limited liability
4companies, if the liability company is treated as a
5partnership for purposes of federal and State income taxation,
6there shall be allowed a credit under this subsection (j) to be
7determined in accordance with the determination of income and
8distributive share of income under Sections 702 and 704 and
9subchapter S of the Internal Revenue Code.
10    Any credit allowed under this subsection which is unused
11in the year the credit is earned may be carried forward to each
12of the 5 taxable years following the year for which the credit
13is first computed until it is used. This credit shall be
14applied first to the earliest year for which there is a
15liability. If there is a credit under this subsection from
16more than one tax year that is available to offset a liability,
17the earliest credit arising under this subsection shall be
18applied first. No carryforward credit may be claimed in any
19tax year ending on or after December 31, 2003.
20    (k) Research and development credit. For tax years ending
21after July 1, 1990 and prior to December 31, 2003, and
22beginning again for tax years ending on or after December 31,
232004, and ending prior to January 1, 2027, a taxpayer shall be
24allowed a credit against the tax imposed by subsections (a)
25and (b) of this Section for increasing research activities in
26this State. The credit allowed against the tax imposed by

 

 

HB2888- 30 -LRB102 11372 HLH 16705 b

1subsections (a) and (b) shall be equal to 6 1/2% of the
2qualifying expenditures for increasing research activities in
3this State. For partners, shareholders of subchapter S
4corporations, and owners of limited liability companies, if
5the liability company is treated as a partnership for purposes
6of federal and State income taxation, there shall be allowed a
7credit under this subsection to be determined in accordance
8with the determination of income and distributive share of
9income under Sections 702 and 704 and subchapter S of the
10Internal Revenue Code.
11    For purposes of this subsection, "qualifying expenditures"
12means the qualifying expenditures as defined for the federal
13credit for increasing research activities which would be
14allowable under Section 41 of the Internal Revenue Code and
15which are conducted in this State, "qualifying expenditures
16for increasing research activities in this State" means the
17excess of qualifying expenditures for the taxable year in
18which incurred over qualifying expenditures for the base
19period, "qualifying expenditures for the base period" means
20the average of the qualifying expenditures for each year in
21the base period, and "base period" means the 3 taxable years
22immediately preceding the taxable year for which the
23determination is being made.
24    Any credit in excess of the tax liability for the taxable
25year may be carried forward. A taxpayer may elect to have the
26unused credit shown on its final completed return carried over

 

 

HB2888- 31 -LRB102 11372 HLH 16705 b

1as a credit against the tax liability for the following 5
2taxable years or until it has been fully used, whichever
3occurs first; provided that no credit earned in a tax year
4ending prior to December 31, 2003 may be carried forward to any
5year ending on or after December 31, 2003.
6    If an unused credit is carried forward to a given year from
72 or more earlier years, that credit arising in the earliest
8year will be applied first against the tax liability for the
9given year. If a tax liability for the given year still
10remains, the credit from the next earliest year will then be
11applied, and so on, until all credits have been used or no tax
12liability for the given year remains. Any remaining unused
13credit or credits then will be carried forward to the next
14following year in which a tax liability is incurred, except
15that no credit can be carried forward to a year which is more
16than 5 years after the year in which the expense for which the
17credit is given was incurred.
18    No inference shall be drawn from Public Act 91-644 this
19amendatory Act of the 91st General Assembly in construing this
20Section for taxable years beginning before January 1, 1999.
21    It is the intent of the General Assembly that the research
22and development credit under this subsection (k) shall apply
23continuously for all tax years ending on or after December 31,
242004 and ending prior to January 1, 2027, including, but not
25limited to, the period beginning on January 1, 2016 and ending
26on July 6, 2017 (the effective date of Public Act 100-22) this

 

 

HB2888- 32 -LRB102 11372 HLH 16705 b

1amendatory Act of the 100th General Assembly. All actions
2taken in reliance on the continuation of the credit under this
3subsection (k) by any taxpayer are hereby validated.
4    (l) Environmental Remediation Tax Credit.
5        (i) For tax years ending after December 31, 1997 and
6    on or before December 31, 2001, a taxpayer shall be
7    allowed a credit against the tax imposed by subsections
8    (a) and (b) of this Section for certain amounts paid for
9    unreimbursed eligible remediation costs, as specified in
10    this subsection. For purposes of this Section,
11    "unreimbursed eligible remediation costs" means costs
12    approved by the Illinois Environmental Protection Agency
13    ("Agency") under Section 58.14 of the Environmental
14    Protection Act that were paid in performing environmental
15    remediation at a site for which a No Further Remediation
16    Letter was issued by the Agency and recorded under Section
17    58.10 of the Environmental Protection Act. The credit must
18    be claimed for the taxable year in which Agency approval
19    of the eligible remediation costs is granted. The credit
20    is not available to any taxpayer if the taxpayer or any
21    related party caused or contributed to, in any material
22    respect, a release of regulated substances on, in, or
23    under the site that was identified and addressed by the
24    remedial action pursuant to the Site Remediation Program
25    of the Environmental Protection Act. After the Pollution
26    Control Board rules are adopted pursuant to the Illinois

 

 

HB2888- 33 -LRB102 11372 HLH 16705 b

1    Administrative Procedure Act for the administration and
2    enforcement of Section 58.9 of the Environmental
3    Protection Act, determinations as to credit availability
4    for purposes of this Section shall be made consistent with
5    those rules. For purposes of this Section, "taxpayer"
6    includes a person whose tax attributes the taxpayer has
7    succeeded to under Section 381 of the Internal Revenue
8    Code and "related party" includes the persons disallowed a
9    deduction for losses by paragraphs (b), (c), and (f)(1) of
10    Section 267 of the Internal Revenue Code by virtue of
11    being a related taxpayer, as well as any of its partners.
12    The credit allowed against the tax imposed by subsections
13    (a) and (b) shall be equal to 25% of the unreimbursed
14    eligible remediation costs in excess of $100,000 per site,
15    except that the $100,000 threshold shall not apply to any
16    site contained in an enterprise zone as determined by the
17    Department of Commerce and Community Affairs (now
18    Department of Commerce and Economic Opportunity). The
19    total credit allowed shall not exceed $40,000 per year
20    with a maximum total of $150,000 per site. For partners
21    and shareholders of subchapter S corporations, there shall
22    be allowed a credit under this subsection to be determined
23    in accordance with the determination of income and
24    distributive share of income under Sections 702 and 704
25    and subchapter S of the Internal Revenue Code.
26        (ii) A credit allowed under this subsection that is

 

 

HB2888- 34 -LRB102 11372 HLH 16705 b

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

 

 

HB2888- 35 -LRB102 11372 HLH 16705 b

1    shall have the same meaning as under Section 58.2 of the
2    Environmental Protection Act.
3    (m) Education expense credit. Beginning with tax years
4ending after December 31, 1999, a taxpayer who is the
5custodian of one or more qualifying pupils shall be allowed a
6credit against the tax imposed by subsections (a) and (b) of
7this Section for qualified education expenses incurred on
8behalf of the qualifying pupils. The credit shall be equal to
925% of qualified education expenses, but in no event may the
10total credit under this subsection claimed by a family that is
11the custodian of qualifying pupils exceed (i) $500 for tax
12years ending prior to December 31, 2017, and (ii) $750 for tax
13years ending on or after December 31, 2017. In no event shall a
14credit under this subsection reduce the taxpayer's liability
15under this Act to less than zero. Notwithstanding any other
16provision of law, for taxable years beginning on or after
17January 1, 2017, no taxpayer may claim a credit under this
18subsection (m) if the taxpayer's adjusted gross income for the
19taxable year exceeds (i) $500,000, in the case of spouses
20filing a joint federal tax return or (ii) $250,000, in the case
21of all other taxpayers. This subsection is exempt from the
22provisions of Section 250 of this Act.
23    For purposes of this subsection:
24    "Qualifying pupils" means individuals who (i) are
25residents of the State of Illinois, (ii) are under the age of
2621 at the close of the school year for which a credit is

 

 

HB2888- 36 -LRB102 11372 HLH 16705 b

1sought, and (iii) during the school year for which a credit is
2sought were full-time pupils enrolled in a kindergarten
3through twelfth grade education program at any school, as
4defined in this subsection.
5    "Qualified education expense" means the amount incurred on
6behalf of a qualifying pupil in excess of $250 for tuition,
7book fees, and lab fees at the school in which the pupil is
8enrolled during the regular school year.
9    "School" means any public or nonpublic elementary or
10secondary school in Illinois that is in compliance with Title
11VI of the Civil Rights Act of 1964 and attendance at which
12satisfies the requirements of Section 26-1 of the School Code,
13except that nothing shall be construed to require a child to
14attend any particular public or nonpublic school to qualify
15for the credit under this Section.
16    "Custodian" means, with respect to qualifying pupils, an
17Illinois resident who is a parent, the parents, a legal
18guardian, or the legal guardians of the qualifying pupils.
19    (n) River Edge Redevelopment Zone site remediation tax
20credit.
21        (i) For tax years ending on or after December 31,
22    2006, a taxpayer shall be allowed a credit against the tax
23    imposed by subsections (a) and (b) of this Section for
24    certain amounts paid for unreimbursed eligible remediation
25    costs, as specified in this subsection. For purposes of
26    this Section, "unreimbursed eligible remediation costs"

 

 

HB2888- 37 -LRB102 11372 HLH 16705 b

1    means costs approved by the Illinois Environmental
2    Protection Agency ("Agency") under Section 58.14a of the
3    Environmental Protection Act that were paid in performing
4    environmental remediation at a site within a River Edge
5    Redevelopment Zone for which a No Further Remediation
6    Letter was issued by the Agency and recorded under Section
7    58.10 of the Environmental Protection Act. The credit must
8    be claimed for the taxable year in which Agency approval
9    of the eligible remediation costs is granted. The credit
10    is not available to any taxpayer if the taxpayer or any
11    related party caused or contributed to, in any material
12    respect, a release of regulated substances on, in, or
13    under the site that was identified and addressed by the
14    remedial action pursuant to the Site Remediation Program
15    of the Environmental Protection Act. Determinations as to
16    credit availability for purposes of this Section shall be
17    made consistent with rules adopted by the Pollution
18    Control Board pursuant to the Illinois Administrative
19    Procedure Act for the administration and enforcement of
20    Section 58.9 of the Environmental Protection Act. For
21    purposes of this Section, "taxpayer" includes a person
22    whose tax attributes the taxpayer has succeeded to under
23    Section 381 of the Internal Revenue Code and "related
24    party" includes the persons disallowed a deduction for
25    losses by paragraphs (b), (c), and (f)(1) of Section 267
26    of the Internal Revenue Code by virtue of being a related

 

 

HB2888- 38 -LRB102 11372 HLH 16705 b

1    taxpayer, as well as any of its partners. The credit
2    allowed against the tax imposed by subsections (a) and (b)
3    shall be equal to 25% of the unreimbursed eligible
4    remediation costs in excess of $100,000 per site.
5        (ii) A credit allowed under this subsection that is
6    unused in the year the credit is earned may be carried
7    forward to each of the 5 taxable years following the year
8    for which the credit is first earned until it is used. This
9    credit shall be applied first to the earliest year for
10    which there is a liability. If there is a credit under this
11    subsection from more than one tax year that is available
12    to offset a liability, the earliest credit arising under
13    this subsection shall be applied first. A credit allowed
14    under this subsection may be sold to a buyer as part of a
15    sale of all or part of the remediation site for which the
16    credit was granted. The purchaser of a remediation site
17    and the tax credit shall succeed to the unused credit and
18    remaining carry-forward period of the seller. To perfect
19    the transfer, the assignor shall record the transfer in
20    the chain of title for the site and provide written notice
21    to the Director of the Illinois Department of Revenue of
22    the assignor's intent to sell the remediation site and the
23    amount of the tax credit to be transferred as a portion of
24    the sale. In no event may a credit be transferred to any
25    taxpayer if the taxpayer or a related party would not be
26    eligible under the provisions of subsection (i).

 

 

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1        (iii) For purposes of this Section, the term "site"
2    shall have the same meaning as under Section 58.2 of the
3    Environmental Protection Act.
4    (o) For each of taxable years during the Compassionate Use
5of Medical Cannabis Program, a surcharge is imposed on all
6taxpayers on income arising from the sale or exchange of
7capital assets, depreciable business property, real property
8used in the trade or business, and Section 197 intangibles of
9an organization registrant under the Compassionate Use of
10Medical Cannabis Program Act. The amount of the surcharge is
11equal to the amount of federal income tax liability for the
12taxable year attributable to those sales and exchanges. The
13surcharge imposed does not apply if:
14        (1) the medical cannabis cultivation center
15    registration, medical cannabis dispensary registration, or
16    the property of a registration is transferred as a result
17    of any of the following:
18            (A) bankruptcy, a receivership, or a debt
19        adjustment initiated by or against the initial
20        registration or the substantial owners of the initial
21        registration;
22            (B) cancellation, revocation, or termination of
23        any registration by the Illinois Department of Public
24        Health;
25            (C) a determination by the Illinois Department of
26        Public Health that transfer of the registration is in

 

 

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1        the best interests of Illinois qualifying patients as
2        defined by the Compassionate Use of Medical Cannabis
3        Program Act;
4            (D) the death of an owner of the equity interest in
5        a registrant;
6            (E) the acquisition of a controlling interest in
7        the stock or substantially all of the assets of a
8        publicly traded company;
9            (F) a transfer by a parent company to a wholly
10        owned subsidiary; or
11            (G) the transfer or sale to or by one person to
12        another person where both persons were initial owners
13        of the registration when the registration was issued;
14        or
15        (2) the cannabis cultivation center registration,
16    medical cannabis dispensary registration, or the
17    controlling interest in a registrant's property is
18    transferred in a transaction to lineal descendants in
19    which no gain or loss is recognized or as a result of a
20    transaction in accordance with Section 351 of the Internal
21    Revenue Code in which no gain or loss is recognized.
22(Source: P.A. 100-22, eff. 7-6-17; 101-9, eff. 6-5-19; 101-31,
23eff. 6-28-19; 101-207, eff. 8-2-19; 101-363, eff. 8-9-19;
24revised 11-18-20.)
 
25    (Text of Section with the changes made by P.A. 101-8,

 

 

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1which did not take effect (see Section 99 of P.A. 101-8))
2    Sec. 201. Tax imposed.
3    (a) In general. A tax measured by net income is hereby
4imposed on every individual, corporation, trust and estate for
5each taxable year ending after July 31, 1969 on the privilege
6of earning or receiving income in or as a resident of this
7State. Such tax shall be in addition to all other occupation or
8privilege taxes imposed by this State or by any municipal
9corporation or political subdivision thereof.
10    (b) Rates. The tax imposed by subsection (a) of this
11Section shall be determined as follows, except as adjusted by
12subsection (d-1):
13        (1) In the case of an individual, trust or estate, for
14    taxable years ending prior to July 1, 1989, an amount
15    equal to 2 1/2% of the taxpayer's net income for the
16    taxable year.
17        (2) In the case of an individual, trust or estate, for
18    taxable years beginning prior to July 1, 1989 and ending
19    after June 30, 1989, an amount equal to the sum of (i) 2
20    1/2% of the taxpayer's net income for the period prior to
21    July 1, 1989, as calculated under Section 202.3, and (ii)
22    3% of the taxpayer's net income for the period after June
23    30, 1989, as calculated under Section 202.3.
24        (3) In the case of an individual, trust or estate, for
25    taxable years beginning after June 30, 1989, and ending
26    prior to January 1, 2011, an amount equal to 3% of the

 

 

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1    taxpayer's net income for the taxable year.
2        (4) In the case of an individual, trust, or estate,
3    for taxable years beginning prior to January 1, 2011, and
4    ending after December 31, 2010, an amount equal to the sum
5    of (i) 3% of the taxpayer's net income for the period prior
6    to January 1, 2011, as calculated under Section 202.5, and
7    (ii) 5% of the taxpayer's net income for the period after
8    December 31, 2010, as calculated under Section 202.5.
9        (5) In the case of an individual, trust, or estate,
10    for taxable years beginning on or after January 1, 2011,
11    and ending prior to January 1, 2015, an amount equal to 5%
12    of the taxpayer's net income for the taxable year.
13        (5.1) In the case of an individual, trust, or estate,
14    for taxable years beginning prior to January 1, 2015, and
15    ending after December 31, 2014, an amount equal to the sum
16    of (i) 5% of the taxpayer's net income for the period prior
17    to January 1, 2015, as calculated under Section 202.5, and
18    (ii) 3.75% of the taxpayer's net income for the period
19    after December 31, 2014, as calculated under Section
20    202.5.
21        (5.2) In the case of an individual, trust, or estate,
22    for taxable years beginning on or after January 1, 2015,
23    and ending prior to July 1, 2017, an amount equal to 3.75%
24    of the taxpayer's net income for the taxable year.
25        (5.3) In the case of an individual, trust, or estate,
26    for taxable years beginning prior to July 1, 2017, and

 

 

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1    ending after June 30, 2017, an amount equal to the sum of
2    (i) 3.75% of the taxpayer's net income for the period
3    prior to July 1, 2017, as calculated under Section 202.5,
4    and (ii) 4.95% of the taxpayer's net income for the period
5    after June 30, 2017, as calculated under Section 202.5.
6        (5.4) In the case of an individual, trust, or estate,
7    for taxable years beginning on or after July 1, 2017 and
8    beginning prior to January 1, 2021, an amount equal to
9    4.95% of the taxpayer's net income for the taxable year.
10        (5.5) In the case of an individual, trust, or estate,
11    for taxable years beginning on or after January 1, 2021,
12    an amount calculated under the rate structure set forth in
13    Section 201.1.
14        (6) In the case of a corporation, for taxable years
15    ending prior to July 1, 1989, an amount equal to 4% of the
16    taxpayer's net income for the taxable year.
17        (7) In the case of a corporation, for taxable years
18    beginning prior to July 1, 1989 and ending after June 30,
19    1989, an amount equal to the sum of (i) 4% of the
20    taxpayer's net income for the period prior to July 1,
21    1989, as calculated under Section 202.3, and (ii) 4.8% of
22    the taxpayer's net income for the period after June 30,
23    1989, as calculated under Section 202.3.
24        (8) In the case of a corporation, for taxable years
25    beginning after June 30, 1989, and ending prior to January
26    1, 2011, an amount equal to 4.8% of the taxpayer's net

 

 

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

 

 

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1    taxpayer's net income for the period prior to July 1,
2    2017, as calculated under Section 202.5, and (ii) 7% of
3    the taxpayer's net income for the period after June 30,
4    2017, as calculated under Section 202.5.
5        (14) In the case of a corporation, for taxable years
6    beginning on or after July 1, 2017 and ending prior to
7    January 1, 2021 and beginning prior to January 1, 2021, an
8    amount equal to 7% of the taxpayer's net income for the
9    taxable year.
10        (15) In the case of a corporation, for taxable years
11    beginning prior to January 1, 2021, and ending after
12    December 31, 2020, an amount equal to the sum of (i) 7% of
13    the taxpayer's net income for the period prior to January
14    1, 2021, as calculated under Section 202.5, and (ii) 5.5%
15    of the taxpayer's net income for the period after December
16    31, 2020, as calculated under Section 202.5.
17        (16) In the case of a corporation, for taxable years
18    beginning on or after January 1, 2021, an amount equal to
19    5.5% of the taxpayer's net income for the taxable year.
20        (15) In the case of a corporation, for taxable years
21    beginning on or after January 1, 2021, an amount equal to
22    7.99% of the taxpayer's net income for the taxable year.
23    The rates under this subsection (b) are subject to the
24provisions of Section 201.5.
25    (b-5) Surcharge; sale or exchange of assets, properties,
26and intangibles of organization gaming licensees. For each of

 

 

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1taxable years 2019 through 2027, a surcharge is imposed on all
2taxpayers on income arising from the sale or exchange of
3capital assets, depreciable business property, real property
4used in the trade or business, and Section 197 intangibles (i)
5of an organization licensee under the Illinois Horse Racing
6Act of 1975 and (ii) of an organization gaming licensee under
7the Illinois Gambling Act. The amount of the surcharge is
8equal to the amount of federal income tax liability for the
9taxable year attributable to those sales and exchanges. The
10surcharge imposed shall not apply if:
11        (1) the organization gaming license, organization
12    license, or racetrack property is transferred as a result
13    of any of the following:
14            (A) bankruptcy, a receivership, or a debt
15        adjustment initiated by or against the initial
16        licensee or the substantial owners of the initial
17        licensee;
18            (B) cancellation, revocation, or termination of
19        any such license by the Illinois Gaming Board or the
20        Illinois Racing Board;
21            (C) a determination by the Illinois Gaming Board
22        that transfer of the license is in the best interests
23        of Illinois gaming;
24            (D) the death of an owner of the equity interest in
25        a licensee;
26            (E) the acquisition of a controlling interest in

 

 

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1        the stock or substantially all of the assets of a
2        publicly traded company;
3            (F) a transfer by a parent company to a wholly
4        owned subsidiary; or
5            (G) the transfer or sale to or by one person to
6        another person where both persons were initial owners
7        of the license when the license was issued; or
8        (2) the controlling interest in the organization
9    gaming license, organization license, or racetrack
10    property is transferred in a transaction to lineal
11    descendants in which no gain or loss is recognized or as a
12    result of a transaction in accordance with Section 351 of
13    the Internal Revenue Code in which no gain or loss is
14    recognized; or
15        (3) live horse racing was not conducted in 2010 at a
16    racetrack located within 3 miles of the Mississippi River
17    under a license issued pursuant to the Illinois Horse
18    Racing Act of 1975.
19    The transfer of an organization gaming license,
20organization license, or racetrack property by a person other
21than the initial licensee to receive the organization gaming
22license is not subject to a surcharge. The Department shall
23adopt rules necessary to implement and administer this
24subsection.
25    (c) Personal Property Tax Replacement Income Tax.
26Beginning on July 1, 1979 and thereafter, in addition to such

 

 

HB2888- 48 -LRB102 11372 HLH 16705 b

1income tax, there is also hereby imposed the Personal Property
2Tax Replacement Income Tax measured by net income on every
3corporation (including Subchapter S corporations), partnership
4and trust, for each taxable year ending after June 30, 1979.
5Such taxes are imposed on the privilege of earning or
6receiving income in or as a resident of this State. The
7Personal Property Tax Replacement Income Tax shall be in
8addition to the income tax imposed by subsections (a) and (b)
9of this Section and in addition to all other occupation or
10privilege taxes imposed by this State or by any municipal
11corporation or political subdivision thereof.
12    (d) Additional Personal Property Tax Replacement Income
13Tax Rates. The personal property tax replacement income tax
14imposed by this subsection and subsection (c) of this Section
15in the case of a corporation, other than a Subchapter S
16corporation and except as adjusted by subsection (d-1), shall
17be an additional amount equal to 2.85% of such taxpayer's net
18income for the taxable year, except that beginning on January
191, 1981, and thereafter, the rate of 2.85% specified in this
20subsection shall be reduced to 2.5%, and in the case of a
21partnership, trust or a Subchapter S corporation shall be an
22additional amount equal to 1.5% of such taxpayer's net income
23for the taxable year.
24    (d-1) Rate reduction for certain foreign insurers. In the
25case of a foreign insurer, as defined by Section 35A-5 of the
26Illinois Insurance Code, whose state or country of domicile

 

 

HB2888- 49 -LRB102 11372 HLH 16705 b

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

 

 

HB2888- 50 -LRB102 11372 HLH 16705 b

1        of all credits allowed under this Act, plus
2            (B) the privilege tax imposed by Section 409 of
3        the Illinois Insurance Code, the fire insurance
4        company tax imposed by Section 12 of the Fire
5        Investigation Act, and the fire department taxes
6        imposed under Section 11-10-1 of the Illinois
7        Municipal Code,
8    equals 1.25% for taxable years ending prior to December
9    31, 2003, or 1.75% for taxable years ending on or after
10    December 31, 2003, of the net taxable premiums written for
11    the taxable year, as described by subsection (1) of
12    Section 409 of the Illinois Insurance Code. This paragraph
13    will in no event increase the rates imposed under
14    subsections (b) and (d).
15        (2) Any reduction in the rates of tax imposed by this
16    subsection shall be applied first against the rates
17    imposed by subsection (b) and only after the tax imposed
18    by subsection (a) net of all credits allowed under this
19    Section other than the credit allowed under subsection (i)
20    has been reduced to zero, against the rates imposed by
21    subsection (d).
22    This subsection (d-1) is exempt from the provisions of
23Section 250.
24    (e) Investment credit. A taxpayer shall be allowed a
25credit against the Personal Property Tax Replacement Income
26Tax for investment in qualified property.

 

 

HB2888- 51 -LRB102 11372 HLH 16705 b

1        (1) A taxpayer shall be allowed a credit equal to .5%
2    of the basis of qualified property placed in service
3    during the taxable year, provided such property is placed
4    in service on or after July 1, 1984. There shall be allowed
5    an additional credit equal to .5% of the basis of
6    qualified property placed in service during the taxable
7    year, provided such property is placed in service on or
8    after July 1, 1986, and the taxpayer's base employment
9    within Illinois has increased by 1% or more over the
10    preceding year as determined by the taxpayer's employment
11    records filed with the Illinois Department of Employment
12    Security. Taxpayers who are new to Illinois shall be
13    deemed to have met the 1% growth in base employment for the
14    first year in which they file employment records with the
15    Illinois Department of Employment Security. The provisions
16    added to this Section by Public Act 85-1200 (and restored
17    by Public Act 87-895) shall be construed as declaratory of
18    existing law and not as a new enactment. If, in any year,
19    the increase in base employment within Illinois over the
20    preceding year is less than 1%, the additional credit
21    shall be limited to that percentage times a fraction, the
22    numerator of which is .5% and the denominator of which is
23    1%, but shall not exceed .5%. The investment credit shall
24    not be allowed to the extent that it would reduce a
25    taxpayer's liability in any tax year below zero, nor may
26    any credit for qualified property be allowed for any year

 

 

HB2888- 52 -LRB102 11372 HLH 16705 b

1    other than the year in which the property was placed in
2    service in Illinois. For tax years ending on or after
3    December 31, 1987, and on or before December 31, 1988, the
4    credit shall be allowed for the tax year in which the
5    property is placed in service, or, if the amount of the
6    credit exceeds the tax liability for that year, whether it
7    exceeds the original liability or the liability as later
8    amended, such excess may be carried forward and applied to
9    the tax liability of the 5 taxable years following the
10    excess credit years if the taxpayer (i) makes investments
11    which cause the creation of a minimum of 2,000 full-time
12    equivalent jobs in Illinois, (ii) is located in an
13    enterprise zone established pursuant to the Illinois
14    Enterprise Zone Act and (iii) is certified by the
15    Department of Commerce and Community Affairs (now
16    Department of Commerce and Economic Opportunity) as
17    complying with the requirements specified in clause (i)
18    and (ii) by July 1, 1986. The Department of Commerce and
19    Community Affairs (now Department of Commerce and Economic
20    Opportunity) shall notify the Department of Revenue of all
21    such certifications immediately. For tax years ending
22    after December 31, 1988, the credit shall be allowed for
23    the tax year in which the property is placed in service,
24    or, if the amount of the credit exceeds the tax liability
25    for that year, whether it exceeds the original liability
26    or the liability as later amended, such excess may be

 

 

HB2888- 53 -LRB102 11372 HLH 16705 b

1    carried forward and applied to the tax liability of the 5
2    taxable years following the excess credit years. The
3    credit shall be applied to the earliest year for which
4    there is a liability. If there is credit from more than one
5    tax year that is available to offset a liability, earlier
6    credit shall be applied first.
7        (2) The term "qualified property" means property
8    which:
9            (A) is tangible, whether new or used, including
10        buildings and structural components of buildings and
11        signs that are real property, but not including land
12        or improvements to real property that are not a
13        structural component of a building such as
14        landscaping, sewer lines, local access roads, fencing,
15        parking lots, and other appurtenances;
16            (B) is depreciable pursuant to Section 167 of the
17        Internal Revenue Code, except that "3-year property"
18        as defined in Section 168(c)(2)(A) of that Code is not
19        eligible for the credit provided by this subsection
20        (e);
21            (C) is acquired by purchase as defined in Section
22        179(d) of the Internal Revenue Code;
23            (D) is used in Illinois by a taxpayer who is
24        primarily engaged in manufacturing, or in mining coal
25        or fluorite, or in retailing, or was placed in service
26        on or after July 1, 2006 in a River Edge Redevelopment

 

 

HB2888- 54 -LRB102 11372 HLH 16705 b

1        Zone established pursuant to the River Edge
2        Redevelopment Zone Act; and
3            (E) has not previously been used in Illinois in
4        such a manner and by such a person as would qualify for
5        the credit provided by this subsection (e) or
6        subsection (f).
7        (3) For purposes of this subsection (e),
8    "manufacturing" means the material staging and production
9    of tangible personal property by procedures commonly
10    regarded as manufacturing, processing, fabrication, or
11    assembling which changes some existing material into new
12    shapes, new qualities, or new combinations. For purposes
13    of this subsection (e) the term "mining" shall have the
14    same meaning as the term "mining" in Section 613(c) of the
15    Internal Revenue Code. For purposes of this subsection
16    (e), the term "retailing" means the sale of tangible
17    personal property for use or consumption and not for
18    resale, or services rendered in conjunction with the sale
19    of tangible personal property for use or consumption and
20    not for resale. For purposes of this subsection (e),
21    "tangible personal property" has the same meaning as when
22    that term is used in the Retailers' Occupation Tax Act,
23    and, for taxable years ending after December 31, 2008,
24    does not include the generation, transmission, or
25    distribution of electricity.
26        (4) The basis of qualified property shall be the basis

 

 

HB2888- 55 -LRB102 11372 HLH 16705 b

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

 

 

HB2888- 56 -LRB102 11372 HLH 16705 b

1        (8) Unless the investment credit is extended by law,
2    the basis of qualified property shall not include costs
3    incurred after December 31, 2018, except for costs
4    incurred pursuant to a binding contract entered into on or
5    before December 31, 2018.
6        (9) Each taxable year ending before December 31, 2000,
7    a partnership may elect to pass through to its partners
8    the credits to which the partnership is entitled under
9    this subsection (e) for the taxable year. A partner may
10    use the credit allocated to him or her under this
11    paragraph only against the tax imposed in subsections (c)
12    and (d) of this Section. If the partnership makes that
13    election, those credits shall be allocated among the
14    partners in the partnership in accordance with the rules
15    set forth in Section 704(b) of the Internal Revenue Code,
16    and the rules promulgated under that Section, and the
17    allocated amount of the credits shall be allowed to the
18    partners for that taxable year. The partnership shall make
19    this election on its Personal Property Tax Replacement
20    Income Tax return for that taxable year. The election to
21    pass through the credits shall be irrevocable.
22        For taxable years ending on or after December 31,
23    2000, a partner that qualifies its partnership for a
24    subtraction under subparagraph (I) of paragraph (2) of
25    subsection (d) of Section 203 or a shareholder that
26    qualifies a Subchapter S corporation for a subtraction

 

 

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

 

 

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1    Internal Revenue Code. The credit shall be .5% of the
2    basis for such property. The credit shall be available
3    only in the taxable year in which the property is placed in
4    service in the Enterprise Zone or River Edge Redevelopment
5    Zone and shall not be allowed to the extent that it would
6    reduce a taxpayer's liability for the tax imposed by
7    subsections (a) and (b) of this Section to below zero. For
8    tax years ending on or after December 31, 1985, the credit
9    shall be allowed for the tax year in which the property is
10    placed in service, or, if the amount of the credit exceeds
11    the tax liability for that year, whether it exceeds the
12    original liability or the liability as later amended, such
13    excess may be carried forward and applied to the tax
14    liability of the 5 taxable years following the excess
15    credit year. The credit shall be applied to the earliest
16    year for which there is a liability. If there is credit
17    from more than one tax year that is available to offset a
18    liability, the credit accruing first in time shall be
19    applied first.
20        (2) The term qualified property means property which:
21            (A) is tangible, whether new or used, including
22        buildings and structural components of buildings;
23            (B) is depreciable pursuant to Section 167 of the
24        Internal Revenue Code, except that "3-year property"
25        as defined in Section 168(c)(2)(A) of that Code is not
26        eligible for the credit provided by this subsection

 

 

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

 

 

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

 

 

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

 

 

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

 

 

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

 

 

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

 

 

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

 

 

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1    credit received by the taxpayer under this subsection (h).
2    (h-5) High Impact Business construction constructions jobs
3credit. For taxable years beginning on or after January 1,
42021, there shall also be allowed a High Impact Business
5construction jobs credit against the tax imposed under
6subsections (a) and (b) of this Section as provided in
7subsections (i) and (j) of Section 5.5 of the Illinois
8Enterprise Zone Act.
9    The credit or credits may not reduce the taxpayer's
10liability to less than zero. If the amount of the credit or
11credits exceeds the taxpayer's liability, the excess may be
12carried forward and applied against the taxpayer's liability
13in succeeding calendar years in the manner provided under
14paragraph (4) of Section 211 of this Act. The credit or credits
15shall be applied to the earliest year for which there is a tax
16liability. If there are credits from more than one taxable
17year that are available to offset a liability, the earlier
18credit shall be applied first.
19    For partners, shareholders of Subchapter S corporations,
20and owners of limited liability companies, if the liability
21company is treated as a partnership for the purposes of
22federal and State income taxation, there shall be allowed a
23credit under this Section to be determined in accordance with
24the determination of income and distributive share of income
25under Sections 702 and 704 and Subchapter S of the Internal
26Revenue Code.

 

 

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

 

 

HB2888- 68 -LRB102 11372 HLH 16705 b

1there is a liability. If there is a credit under this
2subsection from more than one tax year that is available to
3offset a liability the earliest credit arising under this
4subsection shall be applied first.
5    If, during any taxable year ending on or after December
631, 1986, the tax imposed by subsections (c) and (d) of this
7Section for which a taxpayer has claimed a credit under this
8subsection (i) is reduced, the amount of credit for such tax
9shall also be reduced. Such reduction shall be determined by
10recomputing the credit to take into account the reduced tax
11imposed by subsections (c) and (d). If any portion of the
12reduced amount of credit has been carried to a different
13taxable year, an amended return shall be filed for such
14taxable year to reduce the amount of credit claimed.
15    (j) Training expense credit. Beginning with tax years
16ending on or after December 31, 1986 and prior to December 31,
172003, a taxpayer shall be allowed a credit against the tax
18imposed by subsections (a) and (b) under this Section for all
19amounts paid or accrued, on behalf of all persons employed by
20the taxpayer in Illinois or Illinois residents employed
21outside of Illinois by a taxpayer, for educational or
22vocational training in semi-technical or technical fields or
23semi-skilled or skilled fields, which were deducted from gross
24income in the computation of taxable income. The credit
25against the tax imposed by subsections (a) and (b) shall be
261.6% of such training expenses. For partners, shareholders of

 

 

HB2888- 69 -LRB102 11372 HLH 16705 b

1subchapter S corporations, and owners of limited liability
2companies, if the liability company is treated as a
3partnership for purposes of federal and State income taxation,
4there shall be allowed a credit under this subsection (j) to be
5determined in accordance with the determination of income and
6distributive share of income under Sections 702 and 704 and
7subchapter S of the Internal Revenue Code.
8    Any credit allowed under this subsection which is unused
9in the year the credit is earned may be carried forward to each
10of the 5 taxable years following the year for which the credit
11is first computed until it is used. This credit shall be
12applied first to the earliest year for which there is a
13liability. If there is a credit under this subsection from
14more than one tax year that is available to offset a liability,
15the earliest credit arising under this subsection shall be
16applied first. No carryforward credit may be claimed in any
17tax year ending on or after December 31, 2003.
18    (k) Research and development credit. For tax years ending
19after July 1, 1990 and prior to December 31, 2003, and
20beginning again for tax years ending on or after December 31,
212004, and ending prior to January 1, 2027, a taxpayer shall be
22allowed a credit against the tax imposed by subsections (a)
23and (b) of this Section for increasing research activities in
24this State. The credit allowed against the tax imposed by
25subsections (a) and (b) shall be equal to 6 1/2% of the
26qualifying expenditures for increasing research activities in

 

 

HB2888- 70 -LRB102 11372 HLH 16705 b

1this State. For partners, shareholders of subchapter S
2corporations, and owners of limited liability companies, if
3the liability company is treated as a partnership for purposes
4of federal and State income taxation, there shall be allowed a
5credit under this subsection to be determined in accordance
6with the determination of income and distributive share of
7income under Sections 702 and 704 and subchapter S of the
8Internal Revenue Code.
9    For purposes of this subsection, "qualifying expenditures"
10means the qualifying expenditures as defined for the federal
11credit for increasing research activities which would be
12allowable under Section 41 of the Internal Revenue Code and
13which are conducted in this State, "qualifying expenditures
14for increasing research activities in this State" means the
15excess of qualifying expenditures for the taxable year in
16which incurred over qualifying expenditures for the base
17period, "qualifying expenditures for the base period" means
18the average of the qualifying expenditures for each year in
19the base period, and "base period" means the 3 taxable years
20immediately preceding the taxable year for which the
21determination is being made.
22    Any credit in excess of the tax liability for the taxable
23year may be carried forward. A taxpayer may elect to have the
24unused credit shown on its final completed return carried over
25as a credit against the tax liability for the following 5
26taxable years or until it has been fully used, whichever

 

 

HB2888- 71 -LRB102 11372 HLH 16705 b

1occurs first; provided that no credit earned in a tax year
2ending prior to December 31, 2003 may be carried forward to any
3year ending on or after December 31, 2003.
4    If an unused credit is carried forward to a given year from
52 or more earlier years, that credit arising in the earliest
6year will be applied first against the tax liability for the
7given year. If a tax liability for the given year still
8remains, the credit from the next earliest year will then be
9applied, and so on, until all credits have been used or no tax
10liability for the given year remains. Any remaining unused
11credit or credits then will be carried forward to the next
12following year in which a tax liability is incurred, except
13that no credit can be carried forward to a year which is more
14than 5 years after the year in which the expense for which the
15credit is given was incurred.
16    No inference shall be drawn from Public Act 91-644 this
17amendatory Act of the 91st General Assembly in construing this
18Section for taxable years beginning before January 1, 1999.
19    It is the intent of the General Assembly that the research
20and development credit under this subsection (k) shall apply
21continuously for all tax years ending on or after December 31,
222004 and ending prior to January 1, 2027, including, but not
23limited to, the period beginning on January 1, 2016 and ending
24on July 6, 2017 (the effective date of Public Act 100-22) this
25amendatory Act of the 100th General Assembly. All actions
26taken in reliance on the continuation of the credit under this

 

 

HB2888- 72 -LRB102 11372 HLH 16705 b

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

 

 

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

 

 

HB2888- 74 -LRB102 11372 HLH 16705 b

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

 

 

HB2888- 75 -LRB102 11372 HLH 16705 b

1    (m) Education expense credit. Beginning with tax years
2ending after December 31, 1999, a taxpayer who is the
3custodian of one or more qualifying pupils shall be allowed a
4credit against the tax imposed by subsections (a) and (b) of
5this Section for qualified education expenses incurred on
6behalf of the qualifying pupils. The credit shall be equal to
725% of qualified education expenses, but in no event may the
8total credit under this subsection claimed by a family that is
9the custodian of qualifying pupils exceed (i) $500 for tax
10years ending prior to December 31, 2017, and (ii) $750 for tax
11years ending on or after December 31, 2017. In no event shall a
12credit under this subsection reduce the taxpayer's liability
13under this Act to less than zero. Notwithstanding any other
14provision of law, for taxable years beginning on or after
15January 1, 2017, no taxpayer may claim a credit under this
16subsection (m) if the taxpayer's adjusted gross income for the
17taxable year exceeds (i) $500,000, in the case of spouses
18filing a joint federal tax return or (ii) $250,000, in the case
19of all other taxpayers. This subsection is exempt from the
20provisions of Section 250 of this Act.
21    For purposes of this subsection:
22    "Qualifying pupils" means individuals who (i) are
23residents of the State of Illinois, (ii) are under the age of
2421 at the close of the school year for which a credit is
25sought, and (iii) during the school year for which a credit is
26sought were full-time pupils enrolled in a kindergarten

 

 

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1through twelfth grade education program at any school, as
2defined in this subsection.
3    "Qualified education expense" means the amount incurred on
4behalf of a qualifying pupil in excess of $250 for tuition,
5book fees, and lab fees at the school in which the pupil is
6enrolled during the regular school year.
7    "School" means any public or nonpublic elementary or
8secondary school in Illinois that is in compliance with Title
9VI of the Civil Rights Act of 1964 and attendance at which
10satisfies the requirements of Section 26-1 of the School Code,
11except that nothing shall be construed to require a child to
12attend any particular public or nonpublic school to qualify
13for the credit under this Section.
14    "Custodian" means, with respect to qualifying pupils, an
15Illinois resident who is a parent, the parents, a legal
16guardian, or the legal guardians of the qualifying pupils.
17    (n) River Edge Redevelopment Zone site remediation tax
18credit.
19        (i) For tax years ending on or after December 31,
20    2006, a taxpayer shall be allowed a credit against the tax
21    imposed by subsections (a) and (b) of this Section for
22    certain amounts paid for unreimbursed eligible remediation
23    costs, as specified in this subsection. For purposes of
24    this Section, "unreimbursed eligible remediation costs"
25    means costs approved by the Illinois Environmental
26    Protection Agency ("Agency") under Section 58.14a of the

 

 

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1    Environmental Protection Act that were paid in performing
2    environmental remediation at a site within a River Edge
3    Redevelopment Zone for which a No Further Remediation
4    Letter was issued by the Agency and recorded under Section
5    58.10 of the Environmental Protection Act. The credit must
6    be claimed for the taxable year in which Agency approval
7    of the eligible remediation costs is granted. The credit
8    is not available to any taxpayer if the taxpayer or any
9    related party caused or contributed to, in any material
10    respect, a release of regulated substances on, in, or
11    under the site that was identified and addressed by the
12    remedial action pursuant to the Site Remediation Program
13    of the Environmental Protection Act. Determinations as to
14    credit availability for purposes of this Section shall be
15    made consistent with rules adopted by the Pollution
16    Control Board pursuant to the Illinois Administrative
17    Procedure Act for the administration and enforcement of
18    Section 58.9 of the Environmental Protection Act. For
19    purposes of this Section, "taxpayer" includes a person
20    whose tax attributes the taxpayer has succeeded to under
21    Section 381 of the Internal Revenue Code and "related
22    party" includes the persons disallowed a deduction for
23    losses by paragraphs (b), (c), and (f)(1) of Section 267
24    of the Internal Revenue Code by virtue of being a related
25    taxpayer, as well as any of its partners. The credit
26    allowed against the tax imposed by subsections (a) and (b)

 

 

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1    shall be equal to 25% of the unreimbursed eligible
2    remediation costs in excess of $100,000 per site.
3        (ii) A credit allowed under this subsection that is
4    unused in the year the credit is earned may be carried
5    forward to each of the 5 taxable years following the year
6    for which the credit is first earned until it is used. This
7    credit shall be applied first to the earliest year for
8    which there is a liability. If there is a credit under this
9    subsection from more than one tax year that is available
10    to offset a liability, the earliest credit arising under
11    this subsection shall be applied first. A credit allowed
12    under this subsection may be sold to a buyer as part of a
13    sale of all or part of the remediation site for which the
14    credit was granted. The purchaser of a remediation site
15    and the tax credit shall succeed to the unused credit and
16    remaining carry-forward period of the seller. To perfect
17    the transfer, the assignor shall record the transfer in
18    the chain of title for the site and provide written notice
19    to the Director of the Illinois Department of Revenue of
20    the assignor's intent to sell the remediation site and the
21    amount of the tax credit to be transferred as a portion of
22    the sale. In no event may a credit be transferred to any
23    taxpayer if the taxpayer or a related party would not be
24    eligible under the provisions of subsection (i).
25        (iii) For purposes of this Section, the term "site"
26    shall have the same meaning as under Section 58.2 of the

 

 

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1    Environmental Protection Act.
2    (o) For each of taxable years during the Compassionate Use
3of Medical Cannabis Program, a surcharge is imposed on all
4taxpayers on income arising from the sale or exchange of
5capital assets, depreciable business property, real property
6used in the trade or business, and Section 197 intangibles of
7an organization registrant under the Compassionate Use of
8Medical Cannabis Program Act. The amount of the surcharge is
9equal to the amount of federal income tax liability for the
10taxable year attributable to those sales and exchanges. The
11surcharge imposed does not apply if:
12        (1) the medical cannabis cultivation center
13    registration, medical cannabis dispensary registration, or
14    the property of a registration is transferred as a result
15    of any of the following:
16            (A) bankruptcy, a receivership, or a debt
17        adjustment initiated by or against the initial
18        registration or the substantial owners of the initial
19        registration;
20            (B) cancellation, revocation, or termination of
21        any registration by the Illinois Department of Public
22        Health;
23            (C) a determination by the Illinois Department of
24        Public Health that transfer of the registration is in
25        the best interests of Illinois qualifying patients as
26        defined by the Compassionate Use of Medical Cannabis

 

 

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1        Program Act;
2            (D) the death of an owner of the equity interest in
3        a registrant;
4            (E) the acquisition of a controlling interest in
5        the stock or substantially all of the assets of a
6        publicly traded company;
7            (F) a transfer by a parent company to a wholly
8        owned subsidiary; or
9            (G) the transfer or sale to or by one person to
10        another person where both persons were initial owners
11        of the registration when the registration was issued;
12        or
13        (2) the cannabis cultivation center registration,
14    medical cannabis dispensary registration, or the
15    controlling interest in a registrant's property is
16    transferred in a transaction to lineal descendants in
17    which no gain or loss is recognized or as a result of a
18    transaction in accordance with Section 351 of the Internal
19    Revenue Code in which no gain or loss is recognized.
20(Source: P.A. 100-22, eff. 7-6-17; 101-8, see Section 99 for
21effective date; 101-9, eff. 6-5-19; 101-31, eff. 6-28-19;
22101-207, eff. 8-2-19; 101-363, eff. 8-9-19; revised 11-18-20.)
 
23    Section 99. Effective date. This Act takes effect upon
24becoming law.