| |||||||
| |||||||
| |||||||
1 | AN ACT concerning revenue.
| ||||||
2 | Be it enacted by the People of the State of Illinois,
| ||||||
3 | represented in the General Assembly:
| ||||||
4 | Section 5. The Illinois Income Tax Act is amended by | ||||||
5 | changing Sections 201, 203, and 901 as follows:
| ||||||
6 | (35 ILCS 5/201)
| ||||||
7 | (Text of Section without the changes made by P.A. 101-8, | ||||||
8 | which 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 | ||||||
11 | imposed on every
individual, corporation, trust and estate for | ||||||
12 | each taxable year ending
after July 31, 1969 on the privilege | ||||||
13 | of earning or receiving income in or
as a resident of this | ||||||
14 | State. Such tax shall be in addition to all other
occupation or | ||||||
15 | privilege taxes imposed by this State or by any municipal
| ||||||
16 | corporation or political subdivision thereof. | ||||||
17 | (b) Rates. The tax imposed by subsection (a) of this | ||||||
18 | Section shall be
determined as follows, except as adjusted by | ||||||
19 | subsection (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. |
| |||||||
| |||||||
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 |
| |||||||
| |||||||
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, |
| |||||||
| |||||||
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 |
| |||||||
| |||||||
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, an amount equal to 7% | ||||||
13 | of the taxpayer's net income for the taxable year. | ||||||
14 | The rates under this subsection (b) are subject to the | ||||||
15 | provisions of Section 201.5. | ||||||
16 | (b-5) Surcharge; sale or exchange of assets, properties, | ||||||
17 | and intangibles of organization gaming licensees. For each of | ||||||
18 | taxable years 2019 through 2027, a surcharge is imposed on all | ||||||
19 | taxpayers on income arising from the sale or exchange of | ||||||
20 | capital assets, depreciable business property, real property | ||||||
21 | used in the trade or business, and Section 197 intangibles (i) | ||||||
22 | of an organization licensee under the Illinois Horse Racing | ||||||
23 | Act of 1975 and (ii) of an organization gaming licensee under | ||||||
24 | the Illinois Gambling Act. The amount of the surcharge is | ||||||
25 | equal to the amount of federal income tax liability for the | ||||||
26 | taxable year attributable to those sales and exchanges. The |
| |||||||
| |||||||
1 | surcharge imposed shall not apply if: | ||||||
2 | (1) the organization gaming license, organization | ||||||
3 | license, or racetrack property is transferred as a result | ||||||
4 | of any of the following: | ||||||
5 | (A) bankruptcy, a receivership, or a debt | ||||||
6 | adjustment initiated by or against the initial | ||||||
7 | licensee or the substantial owners of the initial | ||||||
8 | licensee; | ||||||
9 | (B) cancellation, revocation, or termination of | ||||||
10 | any such license by the Illinois Gaming Board or the | ||||||
11 | Illinois Racing Board; | ||||||
12 | (C) a determination by the Illinois Gaming Board | ||||||
13 | that transfer of the license is in the best interests | ||||||
14 | of Illinois gaming; | ||||||
15 | (D) the death of an owner of the equity interest in | ||||||
16 | a licensee; | ||||||
17 | (E) the acquisition of a controlling interest in | ||||||
18 | the stock or substantially all of the assets of a | ||||||
19 | publicly traded company; | ||||||
20 | (F) a transfer by a parent company to a wholly | ||||||
21 | owned subsidiary; or | ||||||
22 | (G) the transfer or sale to or by one person to | ||||||
23 | another person where both persons were initial owners | ||||||
24 | of the license when the license was issued; or | ||||||
25 | (2) the controlling interest in the organization | ||||||
26 | gaming license, organization license, or racetrack |
| |||||||
| |||||||
1 | property is transferred in a transaction to lineal | ||||||
2 | descendants in which no gain or loss is recognized or as a | ||||||
3 | result of a transaction in accordance with Section 351 of | ||||||
4 | the Internal Revenue Code in which no gain or loss is | ||||||
5 | recognized; or | ||||||
6 | (3) live horse racing was not conducted in 2010 at a | ||||||
7 | racetrack located within 3 miles of the Mississippi River | ||||||
8 | under a license issued pursuant to the Illinois Horse | ||||||
9 | Racing Act of 1975. | ||||||
10 | The transfer of an organization gaming license, | ||||||
11 | organization license, or racetrack property by a person other | ||||||
12 | than the initial licensee to receive the organization gaming | ||||||
13 | license is not subject to a surcharge. The Department shall | ||||||
14 | adopt rules necessary to implement and administer this | ||||||
15 | subsection. | ||||||
16 | (c) Personal Property Tax Replacement Income Tax.
| ||||||
17 | Beginning on July 1, 1979 and thereafter, in addition to such | ||||||
18 | income
tax, there is also hereby imposed the Personal Property | ||||||
19 | Tax Replacement
Income Tax measured by net income on every | ||||||
20 | corporation (including Subchapter
S corporations), partnership | ||||||
21 | and trust, for each taxable year ending after
June 30, 1979. | ||||||
22 | Such taxes are imposed on the privilege of earning or
| ||||||
23 | receiving income in or as a resident of this State. The | ||||||
24 | Personal Property
Tax Replacement Income Tax shall be in | ||||||
25 | addition to the income tax imposed
by subsections (a) and (b) | ||||||
26 | of this Section and in addition to all other
occupation or |
| |||||||
| |||||||
1 | privilege taxes imposed by this State or by any municipal
| ||||||
2 | corporation or political subdivision thereof. | ||||||
3 | (d) Additional Personal Property Tax Replacement Income | ||||||
4 | Tax Rates.
The personal property tax replacement income tax | ||||||
5 | imposed by this subsection
and subsection (c) of this Section | ||||||
6 | in the case of a corporation, other
than a Subchapter S | ||||||
7 | corporation and except as adjusted by subsection (d-1),
shall | ||||||
8 | be an additional amount equal to
2.85% of such taxpayer's net | ||||||
9 | income for the taxable year, except that
beginning on January | ||||||
10 | 1, 1981, and thereafter, the rate of 2.85% specified
in this | ||||||
11 | subsection shall be reduced to 2.5%, and in the case of a
| ||||||
12 | partnership, trust or a Subchapter S corporation shall be an | ||||||
13 | additional
amount equal to 1.5% of such taxpayer's net income | ||||||
14 | for the taxable year. | ||||||
15 | (d-1) Rate reduction for certain foreign insurers. In the | ||||||
16 | case of a
foreign insurer, as defined by Section 35A-5 of the | ||||||
17 | Illinois Insurance Code,
whose state or country of domicile | ||||||
18 | imposes on insurers domiciled in Illinois
a retaliatory tax | ||||||
19 | (excluding any insurer
whose premiums from reinsurance assumed | ||||||
20 | are 50% or more of its total insurance
premiums as determined | ||||||
21 | under paragraph (2) of subsection (b) of Section 304,
except | ||||||
22 | that for purposes of this determination premiums from | ||||||
23 | reinsurance do
not include premiums from inter-affiliate | ||||||
24 | reinsurance arrangements),
beginning with taxable years ending | ||||||
25 | on or after December 31, 1999,
the sum of
the rates of tax | ||||||
26 | imposed by subsections (b) and (d) shall be reduced (but not
|
| |||||||
| |||||||
1 | increased) to the rate at which the total amount of tax imposed | ||||||
2 | under this Act,
net of all credits allowed under this Act, | ||||||
3 | shall equal (i) the total amount of
tax that would be imposed | ||||||
4 | on the foreign insurer's net income allocable to
Illinois for | ||||||
5 | the taxable year by such foreign insurer's state or country of
| ||||||
6 | domicile if that net income were subject to all income taxes | ||||||
7 | and taxes
measured by net income imposed by such foreign | ||||||
8 | insurer's state or country of
domicile, net of all credits | ||||||
9 | allowed or (ii) a rate of zero if no such tax is
imposed on | ||||||
10 | such income by the foreign insurer's state of domicile.
For | ||||||
11 | the purposes of this subsection (d-1), an inter-affiliate | ||||||
12 | includes a
mutual insurer under common management. | ||||||
13 | (1) For the purposes of subsection (d-1), in no event | ||||||
14 | shall the sum of the
rates of tax imposed by subsections | ||||||
15 | (b) and (d) be reduced below the rate at
which the sum of: | ||||||
16 | (A) the total amount of tax imposed on such | ||||||
17 | foreign insurer under
this Act for a taxable year, net | ||||||
18 | of all credits allowed under this Act, plus | ||||||
19 | (B) the privilege tax imposed by Section 409 of | ||||||
20 | the Illinois Insurance
Code, the fire insurance | ||||||
21 | company tax imposed by Section 12 of the Fire
| ||||||
22 | Investigation Act, and the fire department taxes | ||||||
23 | imposed under Section 11-10-1
of the Illinois | ||||||
24 | Municipal Code, | ||||||
25 | equals 1.25% for taxable years ending prior to December | ||||||
26 | 31, 2003, or
1.75% for taxable years ending on or after |
| |||||||
| |||||||
1 | December 31, 2003, of the net
taxable premiums written for | ||||||
2 | the taxable year,
as described by subsection (1) of | ||||||
3 | Section 409 of the Illinois Insurance Code.
This paragraph | ||||||
4 | will in no event increase the rates imposed under | ||||||
5 | subsections
(b) and (d). | ||||||
6 | (2) Any reduction in the rates of tax imposed by this | ||||||
7 | subsection shall be
applied first against the rates | ||||||
8 | imposed by subsection (b) and only after the
tax imposed | ||||||
9 | by subsection (a) net of all credits allowed under this | ||||||
10 | Section
other than the credit allowed under subsection (i) | ||||||
11 | has been reduced to zero,
against the rates imposed by | ||||||
12 | subsection (d). | ||||||
13 | This subsection (d-1) is exempt from the provisions of | ||||||
14 | Section 250. | ||||||
15 | (e) Investment credit. A taxpayer shall be allowed a | ||||||
16 | credit
against the Personal Property Tax Replacement Income | ||||||
17 | Tax for
investment in qualified property. | ||||||
18 | (1) A taxpayer shall be allowed a credit equal to .5% | ||||||
19 | of
the basis of qualified property placed in service | ||||||
20 | during the taxable year,
provided such property is placed | ||||||
21 | in service on or after
July 1, 1984. There shall be allowed | ||||||
22 | an additional credit equal
to .5% of the basis of | ||||||
23 | qualified property placed in service during the
taxable | ||||||
24 | year, provided such property is placed in service on or
| ||||||
25 | after July 1, 1986, and the taxpayer's base employment
| ||||||
26 | within Illinois has increased by 1% or more over the |
| |||||||
| |||||||
1 | preceding year as
determined by the taxpayer's employment | ||||||
2 | records filed with the
Illinois Department of Employment | ||||||
3 | Security. Taxpayers who are new to
Illinois shall be | ||||||
4 | deemed to have met the 1% growth in base employment for
the | ||||||
5 | first year in which they file employment records with the | ||||||
6 | Illinois
Department of Employment Security. The provisions | ||||||
7 | added to this Section by
Public Act 85-1200 (and restored | ||||||
8 | by Public Act 87-895) shall be
construed as declaratory of | ||||||
9 | existing law and not as a new enactment. If,
in any year, | ||||||
10 | the increase in base employment within Illinois over the
| ||||||
11 | preceding year is less than 1%, the additional credit | ||||||
12 | shall be limited to that
percentage times a fraction, the | ||||||
13 | numerator of which is .5% and the denominator
of which is | ||||||
14 | 1%, but shall not exceed .5%. The investment credit shall | ||||||
15 | not be
allowed to the extent that it would reduce a | ||||||
16 | taxpayer's liability in any tax
year below zero, nor may | ||||||
17 | any credit for qualified property be allowed for any
year | ||||||
18 | other than the year in which the property was placed in | ||||||
19 | service in
Illinois. For tax years ending on or after | ||||||
20 | December 31, 1987, and on or
before December 31, 1988, the | ||||||
21 | credit shall be allowed for the tax year in
which the | ||||||
22 | property is placed in service, or, if the amount of the | ||||||
23 | credit
exceeds the tax liability for that year, whether it | ||||||
24 | exceeds the original
liability or the liability as later | ||||||
25 | amended, such excess may be carried
forward and applied to | ||||||
26 | the tax liability of the 5 taxable years following
the |
| |||||||
| |||||||
1 | excess credit years if the taxpayer (i) makes investments | ||||||
2 | which cause
the creation of a minimum of 2,000 full-time | ||||||
3 | equivalent jobs in Illinois,
(ii) is located in an | ||||||
4 | enterprise zone established pursuant to the Illinois
| ||||||
5 | Enterprise Zone Act and (iii) is certified by the | ||||||
6 | Department of Commerce
and Community Affairs (now | ||||||
7 | Department of Commerce and Economic Opportunity) as | ||||||
8 | complying with the requirements specified in
clause (i) | ||||||
9 | and (ii) by July 1, 1986. The Department of Commerce and
| ||||||
10 | Community Affairs (now Department of Commerce and Economic | ||||||
11 | Opportunity) shall notify the Department of Revenue of all | ||||||
12 | such
certifications immediately. For tax years ending | ||||||
13 | after December 31, 1988,
the credit shall be allowed for | ||||||
14 | the tax year in which the property is
placed in service, | ||||||
15 | or, if the amount of the credit exceeds the tax
liability | ||||||
16 | for that year, whether it exceeds the original liability | ||||||
17 | or the
liability as later amended, such excess may be | ||||||
18 | carried forward and applied
to the tax liability of the 5 | ||||||
19 | taxable years following the excess credit
years. The | ||||||
20 | credit shall be applied to the earliest year for which | ||||||
21 | there is
a liability. If there is credit from more than one | ||||||
22 | tax year that is
available to offset a liability, earlier | ||||||
23 | credit shall be applied first. | ||||||
24 | (2) The term "qualified property" means property | ||||||
25 | which: | ||||||
26 | (A) is tangible, whether new or used, including |
| |||||||
| |||||||
1 | buildings and structural
components of buildings and | ||||||
2 | signs that are real property, but not including
land | ||||||
3 | or improvements to real property that are not a | ||||||
4 | structural component of a
building such as | ||||||
5 | landscaping, sewer lines, local access roads, fencing, | ||||||
6 | parking
lots, and other appurtenances; | ||||||
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 | (e); | ||||||
12 | (C) is acquired by purchase as defined in Section | ||||||
13 | 179(d) of
the Internal Revenue Code; | ||||||
14 | (D) is used in Illinois by a taxpayer who is | ||||||
15 | primarily engaged in
manufacturing, or in mining coal | ||||||
16 | or fluorite, or in retailing, or was placed in service | ||||||
17 | on or after July 1, 2006 in a River Edge Redevelopment | ||||||
18 | Zone established pursuant to the River Edge | ||||||
19 | Redevelopment Zone Act; and | ||||||
20 | (E) has not previously been used in Illinois in | ||||||
21 | such a manner and by
such a person as would qualify for | ||||||
22 | the credit provided by this subsection
(e) or | ||||||
23 | subsection (f). | ||||||
24 | (3) For purposes of this subsection (e), | ||||||
25 | "manufacturing" means
the material staging and production | ||||||
26 | of tangible personal property by
procedures commonly |
| |||||||
| |||||||
1 | regarded as manufacturing, processing, fabrication, or
| ||||||
2 | assembling which changes some existing material into new | ||||||
3 | shapes, new
qualities, or new combinations. For purposes | ||||||
4 | of this subsection
(e) the term "mining" shall have the | ||||||
5 | same meaning as the term "mining" in
Section 613(c) of the | ||||||
6 | Internal Revenue Code. For purposes of this subsection
| ||||||
7 | (e), the term "retailing" means the sale of tangible | ||||||
8 | personal property for use or consumption and not for | ||||||
9 | resale, or
services rendered in conjunction with the sale | ||||||
10 | of tangible personal property for use or consumption and | ||||||
11 | not for resale. For purposes of this subsection (e), | ||||||
12 | "tangible personal property" has the same meaning as when | ||||||
13 | that term is used in the Retailers' Occupation Tax Act, | ||||||
14 | and, for taxable years ending after December 31, 2008, | ||||||
15 | does not include the generation, transmission, or | ||||||
16 | distribution of electricity. | ||||||
17 | (4) The basis of qualified property shall be the basis
| ||||||
18 | used to compute the depreciation deduction for federal | ||||||
19 | income tax purposes. | ||||||
20 | (5) If the basis of the property for federal income | ||||||
21 | tax depreciation
purposes is increased after it has been | ||||||
22 | placed in service in Illinois by
the taxpayer, the amount | ||||||
23 | of such increase shall be deemed property placed
in | ||||||
24 | service on the date of such increase in basis. | ||||||
25 | (6) The term "placed in service" shall have the same
| ||||||
26 | meaning as under Section 46 of the Internal Revenue Code. |
| |||||||
| |||||||
1 | (7) If during any taxable year, any property ceases to
| ||||||
2 | be qualified property in the hands of the taxpayer within | ||||||
3 | 48 months after
being placed in service, or the situs of | ||||||
4 | any qualified property is
moved outside Illinois within 48 | ||||||
5 | months after being placed in service, the
Personal | ||||||
6 | Property Tax Replacement Income Tax for such taxable year | ||||||
7 | shall be
increased. Such increase shall be determined by | ||||||
8 | (i) recomputing the
investment credit which would have | ||||||
9 | been allowed for the year in which
credit for such | ||||||
10 | 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 (7), 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 | (8) Unless the investment credit is extended by law, | ||||||
19 | the
basis of qualified property shall not include costs | ||||||
20 | incurred after
December 31, 2018, except for costs | ||||||
21 | incurred pursuant to a binding
contract entered into on or | ||||||
22 | before December 31, 2018. | ||||||
23 | (9) Each taxable year ending before December 31, 2000, | ||||||
24 | a partnership may
elect to pass through to its
partners | ||||||
25 | the credits to which the partnership is entitled under | ||||||
26 | this subsection
(e) for the taxable year. A partner may |
| |||||||
| |||||||
1 | use the credit allocated to him or her
under this | ||||||
2 | paragraph only against the tax imposed in subsections (c) | ||||||
3 | and (d) of
this Section. If the partnership makes that | ||||||
4 | election, those credits shall be
allocated among the | ||||||
5 | partners in the partnership in accordance with the rules
| ||||||
6 | set forth in Section 704(b) of the Internal Revenue Code, | ||||||
7 | and the rules
promulgated under that Section, and the | ||||||
8 | allocated amount of the credits shall
be allowed to the | ||||||
9 | partners for that taxable year. The partnership shall make
| ||||||
10 | this election on its Personal Property Tax Replacement | ||||||
11 | Income Tax return for
that taxable year. The election to | ||||||
12 | pass through the credits shall be
irrevocable. | ||||||
13 | For taxable years ending on or after December 31, | ||||||
14 | 2000, a
partner that qualifies its
partnership for a | ||||||
15 | subtraction under subparagraph (I) of paragraph (2) of
| ||||||
16 | subsection (d) of Section 203 or a shareholder that | ||||||
17 | qualifies a Subchapter S
corporation for a subtraction | ||||||
18 | under subparagraph (S) of paragraph (2) of
subsection (b) | ||||||
19 | of Section 203 shall be allowed a credit under this | ||||||
20 | subsection
(e) equal to its share of the credit earned | ||||||
21 | under this subsection (e) during
the taxable year by the | ||||||
22 | partnership or Subchapter S corporation, determined in
| ||||||
23 | 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. This | ||||||
26 | paragraph is exempt from the provisions of Section 250. |
| |||||||
| |||||||
1 | (f) Investment credit; Enterprise Zone; River Edge | ||||||
2 | Redevelopment Zone. | ||||||
3 | (1) A taxpayer shall be allowed a credit against the | ||||||
4 | tax imposed
by subsections (a) and (b) of this Section for | ||||||
5 | investment in qualified
property which is placed in | ||||||
6 | service in an Enterprise Zone created
pursuant to the | ||||||
7 | Illinois Enterprise Zone Act or, for property placed in | ||||||
8 | service on or after July 1, 2006, a River Edge | ||||||
9 | Redevelopment Zone established pursuant to the River Edge | ||||||
10 | Redevelopment Zone Act. For partners, shareholders
of | ||||||
11 | Subchapter S corporations, and owners of limited liability | ||||||
12 | companies,
if the liability company is treated as a | ||||||
13 | partnership for purposes of
federal and State income | ||||||
14 | taxation, there shall be allowed a credit under
this | ||||||
15 | subsection (f) to be determined in accordance with the | ||||||
16 | determination
of income and distributive share of income | ||||||
17 | under Sections 702 and 704 and
Subchapter S of the | ||||||
18 | Internal Revenue Code. The credit shall be .5% of the
| ||||||
19 | basis for such property. The credit shall be available | ||||||
20 | only in the taxable
year in which the property is placed in | ||||||
21 | service in the Enterprise Zone or River Edge Redevelopment | ||||||
22 | Zone and
shall not be allowed to the extent that it would | ||||||
23 | reduce a taxpayer's
liability for the tax imposed by | ||||||
24 | subsections (a) and (b) of this Section to
below zero. For | ||||||
25 | tax years ending on or after December 31, 1985, the credit
| ||||||
26 | shall be allowed for the tax year in which the property is |
| |||||||
| |||||||
1 | placed in
service, or, if the amount of the credit exceeds | ||||||
2 | the tax liability for that
year, whether it exceeds the | ||||||
3 | original liability or the liability as later
amended, such | ||||||
4 | excess may be carried forward and applied to the tax
| ||||||
5 | liability of the 5 taxable years following the excess | ||||||
6 | credit year.
The credit shall be applied to the earliest | ||||||
7 | year for which there is a
liability. If there is credit | ||||||
8 | from more than one tax year that is available
to offset a | ||||||
9 | liability, the credit accruing first in time shall be | ||||||
10 | applied
first. | ||||||
11 | (2) The term qualified property means property which: | ||||||
12 | (A) is tangible, whether new or used, including | ||||||
13 | buildings and
structural components of buildings; | ||||||
14 | (B) is depreciable pursuant to Section 167 of the | ||||||
15 | Internal Revenue
Code, except that "3-year property" | ||||||
16 | as defined in Section 168(c)(2)(A) of
that Code is not | ||||||
17 | eligible for the credit provided by this subsection | ||||||
18 | (f); | ||||||
19 | (C) is acquired by purchase as defined in Section | ||||||
20 | 179(d) of
the Internal Revenue Code; | ||||||
21 | (D) is used in the Enterprise Zone or River Edge | ||||||
22 | Redevelopment Zone by the taxpayer; and | ||||||
23 | (E) has not been previously used in Illinois in | ||||||
24 | such a manner and by
such a person as would qualify for | ||||||
25 | the credit provided by this subsection
(f) or | ||||||
26 | subsection (e). |
| |||||||
| |||||||
1 | (3) The basis of qualified property shall be the basis | ||||||
2 | used to compute
the depreciation deduction for federal | ||||||
3 | income tax purposes. | ||||||
4 | (4) If the basis of the property for federal income | ||||||
5 | tax depreciation
purposes is increased after it has been | ||||||
6 | placed in service in the Enterprise
Zone or River Edge | ||||||
7 | Redevelopment Zone by the taxpayer, the amount of such | ||||||
8 | increase shall be deemed property
placed in service on the | ||||||
9 | date of such increase in basis. | ||||||
10 | (5) The term "placed in service" shall have the same | ||||||
11 | meaning as under
Section 46 of the Internal Revenue Code. | ||||||
12 | (6) 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 the
Enterprise | ||||||
16 | Zone or River Edge Redevelopment Zone within 48 months | ||||||
17 | after being placed in service, the tax
imposed under | ||||||
18 | subsections (a) and (b) of this Section for such taxable | ||||||
19 | year
shall be increased. Such increase shall be determined | ||||||
20 | by (i) recomputing
the investment credit which would have | ||||||
21 | been allowed for the year in which
credit for such | ||||||
22 | property was originally allowed by eliminating such
| ||||||
23 | property from such computation, and (ii) subtracting such | ||||||
24 | recomputed credit
from the amount of credit previously | ||||||
25 | allowed. For the purposes of this
paragraph (6), a | ||||||
26 | reduction of the basis of qualified property resulting
|
| |||||||
| |||||||
1 | from a redetermination of the purchase price shall be | ||||||
2 | deemed a disposition
of qualified property to the extent | ||||||
3 | of such reduction. | ||||||
4 | (7) There shall be allowed an additional credit equal | ||||||
5 | to 0.5% of the basis of qualified property placed in | ||||||
6 | service during the taxable year in a River Edge | ||||||
7 | Redevelopment Zone, provided such property is placed in | ||||||
8 | service on or after July 1, 2006, and the taxpayer's base | ||||||
9 | employment within Illinois has increased by 1% or more | ||||||
10 | over the preceding year as determined by the taxpayer's | ||||||
11 | employment records filed with the Illinois Department of | ||||||
12 | Employment Security. Taxpayers who are new to Illinois | ||||||
13 | shall be deemed to have met the 1% growth in base | ||||||
14 | employment for the first year in which they file | ||||||
15 | employment records with the Illinois Department of | ||||||
16 | Employment Security. If, in any year, the increase in base | ||||||
17 | employment within Illinois over the preceding year is less | ||||||
18 | than 1%, the additional credit shall be limited to that | ||||||
19 | percentage times a fraction, the numerator of which is | ||||||
20 | 0.5% and the denominator of which is 1%, but shall not | ||||||
21 | exceed 0.5%.
| ||||||
22 | (8) For taxable years beginning on or after January 1, | ||||||
23 | 2021, there shall be allowed an Enterprise Zone | ||||||
24 | construction jobs credit against the taxes imposed under | ||||||
25 | subsections (a) and (b) of this Section as provided in | ||||||
26 | Section 13 of the Illinois Enterprise Zone Act. |
| |||||||
| |||||||
1 | The credit or credits may not reduce the taxpayer's | ||||||
2 | liability to less than zero. If the amount of the credit or | ||||||
3 | credits exceeds the taxpayer's liability, the excess may | ||||||
4 | be carried forward and applied against the taxpayer's | ||||||
5 | liability in succeeding calendar years in the same manner | ||||||
6 | provided under paragraph (4) of Section 211 of this Act. | ||||||
7 | The credit or credits shall be applied to the earliest | ||||||
8 | year for which there is a tax liability. If there are | ||||||
9 | credits from more than one taxable year that are available | ||||||
10 | to offset a liability, the earlier credit shall be applied | ||||||
11 | first. | ||||||
12 | For partners, shareholders of Subchapter S | ||||||
13 | corporations, and owners of limited liability companies, | ||||||
14 | if the liability company is treated as a partnership for | ||||||
15 | the purposes of federal and State income taxation, there | ||||||
16 | shall be allowed a credit under this Section to be | ||||||
17 | determined in accordance with the determination of income | ||||||
18 | and distributive share of income under Sections 702 and | ||||||
19 | 704 and Subchapter S of the Internal Revenue Code. | ||||||
20 | The total aggregate amount of credits awarded under | ||||||
21 | the Blue Collar Jobs Act (Article 20 of Public Act 101-9 | ||||||
22 | this amendatory Act of the 101st General Assembly ) shall | ||||||
23 | not exceed $20,000,000 in any State fiscal year . | ||||||
24 | This paragraph (8) is exempt from the provisions of | ||||||
25 | Section 250. | ||||||
26 | (g) (Blank). |
| |||||||
| |||||||
1 | (h) Investment credit; High Impact Business. | ||||||
2 | (1) Subject to subsections (b) and (b-5) of Section
| ||||||
3 | 5.5 of the Illinois Enterprise Zone Act, a taxpayer shall | ||||||
4 | be allowed a credit
against the tax imposed by subsections | ||||||
5 | (a) and (b) of this Section for
investment in qualified
| ||||||
6 | property which is placed in service by a Department of | ||||||
7 | Commerce and Economic Opportunity
designated High Impact | ||||||
8 | Business. The credit shall be .5% of the basis
for such | ||||||
9 | property. The credit shall not be available (i) until the | ||||||
10 | minimum
investments in qualified property set forth in | ||||||
11 | subdivision (a)(3)(A) of
Section 5.5 of the Illinois
| ||||||
12 | Enterprise Zone Act have been satisfied
or (ii) until the | ||||||
13 | time authorized in subsection (b-5) of the Illinois
| ||||||
14 | Enterprise Zone Act for entities designated as High Impact | ||||||
15 | Businesses under
subdivisions (a)(3)(B), (a)(3)(C), and | ||||||
16 | (a)(3)(D) of Section 5.5 of the Illinois
Enterprise Zone | ||||||
17 | Act, and shall not be allowed to the extent that it would
| ||||||
18 | reduce a taxpayer's liability for the tax imposed by | ||||||
19 | subsections (a) and (b) of
this Section to below zero. The | ||||||
20 | credit applicable to such investments shall be
taken in | ||||||
21 | the taxable year in which such investments have been | ||||||
22 | completed. The
credit for additional investments beyond | ||||||
23 | the minimum investment by a designated
high impact | ||||||
24 | business authorized under subdivision (a)(3)(A) of Section | ||||||
25 | 5.5 of
the Illinois Enterprise Zone Act shall be available | ||||||
26 | only in the taxable year in
which the property is placed in |
| |||||||
| |||||||
1 | service and shall not be allowed to the extent
that it | ||||||
2 | would reduce a taxpayer's liability for the tax imposed by | ||||||
3 | subsections
(a) and (b) of this Section to below zero.
For | ||||||
4 | tax years ending on or after December 31, 1987, the credit | ||||||
5 | shall be
allowed for the tax year in which the property is | ||||||
6 | placed in service, or, if
the amount of the credit exceeds | ||||||
7 | the tax liability for that year, whether
it exceeds the | ||||||
8 | original liability or the liability as later amended, such
| ||||||
9 | excess may be carried forward and applied to the tax | ||||||
10 | liability of the 5
taxable years following the excess | ||||||
11 | credit year. The credit shall be
applied to the earliest | ||||||
12 | year for which there is a liability. If there is
credit | ||||||
13 | from more than one tax year that is available to offset a | ||||||
14 | liability,
the credit accruing first in time shall be | ||||||
15 | applied first. | ||||||
16 | Changes made in this subdivision (h)(1) by Public Act | ||||||
17 | 88-670
restore changes made by Public Act 85-1182 and | ||||||
18 | reflect existing law. | ||||||
19 | (2) The term qualified property means property which: | ||||||
20 | (A) is tangible, whether new or used, including | ||||||
21 | buildings and
structural components of buildings; | ||||||
22 | (B) is depreciable pursuant to Section 167 of the | ||||||
23 | Internal Revenue
Code, except that "3-year property" | ||||||
24 | as defined in Section 168(c)(2)(A) of
that Code is not | ||||||
25 | eligible for the credit provided by this subsection | ||||||
26 | (h); |
| |||||||
| |||||||
1 | (C) is acquired by purchase as defined in Section | ||||||
2 | 179(d) of the
Internal Revenue Code; and | ||||||
3 | (D) is not eligible for the Enterprise Zone | ||||||
4 | Investment Credit provided
by subsection (f) of this | ||||||
5 | Section. | ||||||
6 | (3) The basis of qualified property shall be the basis | ||||||
7 | used to compute
the depreciation deduction for federal | ||||||
8 | income tax purposes. | ||||||
9 | (4) If the basis of the property for federal income | ||||||
10 | tax depreciation
purposes is increased after it has been | ||||||
11 | placed in service in a federally
designated Foreign Trade | ||||||
12 | Zone or Sub-Zone located in Illinois by the taxpayer,
the | ||||||
13 | amount of such increase shall be deemed property placed in | ||||||
14 | service on
the date of such increase in basis. | ||||||
15 | (5) The term "placed in service" shall have the same | ||||||
16 | meaning as under
Section 46 of the Internal Revenue Code. | ||||||
17 | (6) If during any taxable year ending on or before | ||||||
18 | December 31, 1996,
any property ceases to be qualified
| ||||||
19 | property in the hands of the taxpayer within 48 months | ||||||
20 | after being placed
in service, or the situs of any | ||||||
21 | qualified property is moved outside
Illinois within 48 | ||||||
22 | months after being placed in service, the tax imposed
| ||||||
23 | under subsections (a) and (b) of this Section for such | ||||||
24 | taxable year shall
be increased. Such increase shall be | ||||||
25 | determined by (i) recomputing the
investment credit which | ||||||
26 | would have been allowed for the year in which
credit for |
| |||||||
| |||||||
1 | such property was originally allowed by eliminating such
| ||||||
2 | property from such computation, and (ii) subtracting such | ||||||
3 | recomputed credit
from the amount of credit previously | ||||||
4 | allowed. For the purposes of this
paragraph (6), a | ||||||
5 | reduction of the basis of qualified property resulting
| ||||||
6 | from a redetermination of the purchase price shall be | ||||||
7 | deemed a disposition
of qualified property to the extent | ||||||
8 | of such reduction. | ||||||
9 | (7) Beginning with tax years ending after December 31, | ||||||
10 | 1996, if a
taxpayer qualifies for the credit under this | ||||||
11 | subsection (h) and thereby is
granted a tax abatement and | ||||||
12 | the taxpayer relocates its entire facility in
violation of | ||||||
13 | the explicit terms and length of the contract under | ||||||
14 | Section
18-183 of the Property Tax Code, the tax imposed | ||||||
15 | under subsections
(a) and (b) of this Section shall be | ||||||
16 | increased for the taxable year
in which the taxpayer | ||||||
17 | relocated its facility by an amount equal to the
amount of | ||||||
18 | credit received by the taxpayer under this subsection (h). | ||||||
19 | (h-5) High Impact Business construction constructions jobs | ||||||
20 | credit. For taxable years beginning on or after January 1, | ||||||
21 | 2021, there shall also be allowed a High Impact Business | ||||||
22 | construction jobs credit against the tax imposed under | ||||||
23 | subsections (a) and (b) of this Section as provided in | ||||||
24 | subsections (i) and (j) of Section 5.5 of the Illinois | ||||||
25 | Enterprise Zone Act. | ||||||
26 | The credit or credits may not reduce the taxpayer's |
| |||||||
| |||||||
1 | liability to less than zero. If the amount of the credit or | ||||||
2 | credits exceeds the taxpayer's liability, the excess may be | ||||||
3 | carried forward and applied against the taxpayer's liability | ||||||
4 | in succeeding calendar years in the manner provided under | ||||||
5 | paragraph (4) of Section 211 of this Act. The credit or credits | ||||||
6 | shall be applied to the earliest year for which there is a tax | ||||||
7 | liability. If there are credits from more than one taxable | ||||||
8 | year that are available to offset a liability, the earlier | ||||||
9 | credit shall be applied first. | ||||||
10 | For partners, shareholders of Subchapter S corporations, | ||||||
11 | and owners of limited liability companies, if the liability | ||||||
12 | company is treated as a partnership for the purposes of | ||||||
13 | federal and State income taxation, there shall be allowed a | ||||||
14 | credit under this Section to be determined in accordance with | ||||||
15 | the determination of income and distributive share of income | ||||||
16 | under Sections 702 and 704 and Subchapter S of the Internal | ||||||
17 | Revenue Code. | ||||||
18 | The total aggregate amount of credits awarded under the | ||||||
19 | Blue Collar Jobs Act (Article 20 of Public Act 101-9 this | ||||||
20 | amendatory Act of the 101st General Assembly ) shall not exceed | ||||||
21 | $20,000,000 in any State fiscal year . | ||||||
22 | This subsection (h-5) is exempt from the provisions of | ||||||
23 | Section 250. | ||||||
24 | (i) Credit for Personal Property Tax Replacement Income | ||||||
25 | Tax.
For tax years ending prior to December 31, 2003, a credit | ||||||
26 | shall be allowed
against the tax imposed by
subsections (a) |
| |||||||
| |||||||
1 | and (b) of this Section for the tax imposed by subsections (c)
| ||||||
2 | and (d) of this Section. This credit shall be computed by | ||||||
3 | multiplying the tax
imposed by subsections (c) and (d) of this | ||||||
4 | Section by a fraction, the numerator
of which is base income | ||||||
5 | allocable to Illinois and the denominator of which is
Illinois | ||||||
6 | base income, and further multiplying the product by the tax | ||||||
7 | rate
imposed by subsections (a) and (b) of this Section. | ||||||
8 | Any credit earned on or after December 31, 1986 under
this | ||||||
9 | subsection which is unused in the year
the credit is computed | ||||||
10 | because it exceeds the tax liability imposed by
subsections | ||||||
11 | (a) and (b) for that year (whether it exceeds the original
| ||||||
12 | liability or the liability as later amended) may be carried | ||||||
13 | forward and
applied to the tax liability imposed by | ||||||
14 | subsections (a) and (b) of the 5
taxable years following the | ||||||
15 | excess credit year, provided that no credit may
be carried | ||||||
16 | forward to any year ending on or
after December 31, 2003. This | ||||||
17 | credit shall be
applied first to the earliest year for which | ||||||
18 | there is a liability. If
there is a credit under this | ||||||
19 | subsection from more than one tax year that is
available to | ||||||
20 | offset a liability the earliest credit arising under this
| ||||||
21 | subsection shall be applied first. | ||||||
22 | If, during any taxable year ending on or after December | ||||||
23 | 31, 1986, the
tax imposed by subsections (c) and (d) of this | ||||||
24 | Section for which a taxpayer
has claimed a credit under this | ||||||
25 | subsection (i) is reduced, the amount of
credit for such tax | ||||||
26 | shall also be reduced. Such reduction shall be
determined by |
| |||||||
| |||||||
1 | recomputing the credit to take into account the reduced tax
| ||||||
2 | imposed by subsections (c) and (d). If any portion of the
| ||||||
3 | reduced amount of credit has been carried to a different | ||||||
4 | taxable year, an
amended return shall be filed for such | ||||||
5 | taxable year to reduce the amount of
credit claimed. | ||||||
6 | (j) Training expense credit. Beginning with tax years | ||||||
7 | ending on or
after December 31, 1986 and prior to December 31, | ||||||
8 | 2003, a taxpayer shall be
allowed a credit against the
tax | ||||||
9 | imposed by subsections (a) and (b) under this Section
for all | ||||||
10 | amounts paid or accrued, on behalf of all persons
employed by | ||||||
11 | the taxpayer in Illinois or Illinois residents employed
| ||||||
12 | outside of Illinois by a taxpayer, for educational or | ||||||
13 | vocational training in
semi-technical or technical fields or | ||||||
14 | semi-skilled or skilled fields, which
were deducted from gross | ||||||
15 | income in the computation of taxable income. The
credit | ||||||
16 | against the tax imposed by subsections (a) and (b) shall be | ||||||
17 | 1.6% of
such training expenses. For partners, shareholders of | ||||||
18 | subchapter S
corporations, and owners of limited liability | ||||||
19 | companies, if the liability
company is treated as a | ||||||
20 | partnership for purposes of federal and State income
taxation, | ||||||
21 | there shall be allowed a credit under this subsection (j) to be
| ||||||
22 | determined in accordance with the determination of income and | ||||||
23 | distributive
share of income under Sections 702 and 704 and | ||||||
24 | subchapter S of the Internal
Revenue Code. | ||||||
25 | Any credit allowed under this subsection which is unused | ||||||
26 | in the year
the credit is earned may be carried forward to each |
| |||||||
| |||||||
1 | of the 5 taxable
years following the year for which the credit | ||||||
2 | is first computed until it is
used. This credit shall be | ||||||
3 | applied first to the earliest year for which
there is a | ||||||
4 | liability. If there is a credit under this subsection from | ||||||
5 | more
than one tax year that is available to offset a liability , | ||||||
6 | the earliest
credit arising under this subsection shall be | ||||||
7 | applied first. No carryforward
credit may be claimed in any | ||||||
8 | tax year ending on or after
December 31, 2003. | ||||||
9 | (k) Research and development credit. For tax years ending | ||||||
10 | after July 1, 1990 and prior to
December 31, 2003, and | ||||||
11 | beginning again for tax years ending on or after December 31, | ||||||
12 | 2004, and ending prior to January 1, 2027, a taxpayer shall be
| ||||||
13 | allowed a credit against the tax imposed by subsections (a) | ||||||
14 | and (b) of this
Section for increasing research activities in | ||||||
15 | this State. The credit
allowed against the tax imposed by | ||||||
16 | subsections (a) and (b) shall be equal
to 6 1/2% of the | ||||||
17 | qualifying expenditures for increasing research activities
in | ||||||
18 | this State. For partners, shareholders of subchapter S | ||||||
19 | corporations, and
owners of limited liability companies, if | ||||||
20 | the liability company is treated as a
partnership for purposes | ||||||
21 | of federal and State income taxation, there shall be
allowed a | ||||||
22 | credit under this subsection to be determined in accordance | ||||||
23 | with the
determination of income and distributive share of | ||||||
24 | income under Sections 702 and
704 and subchapter S of the | ||||||
25 | Internal Revenue Code. | ||||||
26 | For purposes of this subsection, "qualifying expenditures" |
| |||||||
| |||||||
1 | means the
qualifying expenditures as defined for the federal | ||||||
2 | credit for increasing
research activities which would be | ||||||
3 | allowable under Section 41 of the
Internal Revenue Code and | ||||||
4 | which are conducted in this State, "qualifying
expenditures | ||||||
5 | for increasing research activities in this State" means the
| ||||||
6 | excess of qualifying expenditures for the taxable year in | ||||||
7 | which incurred
over qualifying expenditures for the base | ||||||
8 | period, "qualifying expenditures
for the base period" means | ||||||
9 | the average of the qualifying expenditures for
each year in | ||||||
10 | the base period, and "base period" means the 3 taxable years
| ||||||
11 | immediately preceding the taxable year for which the | ||||||
12 | determination is
being made. | ||||||
13 | Any credit in excess of the tax liability for the taxable | ||||||
14 | year
may be carried forward. A taxpayer may elect to have the
| ||||||
15 | unused credit shown on its final completed return carried over | ||||||
16 | as a credit
against the tax liability for the following 5 | ||||||
17 | taxable years or until it has
been fully used, whichever | ||||||
18 | occurs first; provided that no credit earned in a tax year | ||||||
19 | ending prior to December 31, 2003 may be carried forward to any | ||||||
20 | year ending on or after December 31, 2003. | ||||||
21 | If an unused credit is carried forward to a given year from | ||||||
22 | 2 or more
earlier years, that credit arising in the earliest | ||||||
23 | year will be applied
first against the tax liability for the | ||||||
24 | given year. If a tax liability for
the given year still | ||||||
25 | remains, the credit from the next earliest year will
then be | ||||||
26 | applied, and so on, until all credits have been used or no tax
|
| |||||||
| |||||||
1 | liability for the given year remains. Any remaining unused | ||||||
2 | credit or
credits then will be carried forward to the next | ||||||
3 | following year in which a
tax liability is incurred, except | ||||||
4 | that no credit can be carried forward to
a year which is more | ||||||
5 | than 5 years after the year in which the expense for
which the | ||||||
6 | credit is given was incurred. | ||||||
7 | No inference shall be drawn from Public Act 91-644 this | ||||||
8 | amendatory Act of the 91st General
Assembly in construing this | ||||||
9 | Section for taxable years beginning before January
1, 1999. | ||||||
10 | It is the intent of the General Assembly that the research | ||||||
11 | and development credit under this subsection (k) shall apply | ||||||
12 | continuously for all tax years ending on or after December 31, | ||||||
13 | 2004 and ending prior to January 1, 2027, including, but not | ||||||
14 | limited to, the period beginning on January 1, 2016 and ending | ||||||
15 | on July 6, 2017 ( the effective date of Public Act 100-22) this | ||||||
16 | amendatory Act of the 100th General Assembly . All actions | ||||||
17 | taken in reliance on the continuation of the credit under this | ||||||
18 | subsection (k) by any taxpayer are hereby validated. | ||||||
19 | (l) Environmental Remediation Tax Credit. | ||||||
20 | (i) For tax years ending after December 31, 1997 and | ||||||
21 | on or before
December 31, 2001, a taxpayer shall be | ||||||
22 | allowed a credit against the tax
imposed by subsections | ||||||
23 | (a) and (b) of this Section for certain amounts paid
for | ||||||
24 | unreimbursed eligible remediation costs, as specified in | ||||||
25 | this subsection.
For purposes of this Section, | ||||||
26 | "unreimbursed eligible remediation costs" means
costs |
| |||||||
| |||||||
1 | approved by the Illinois Environmental Protection Agency | ||||||
2 | ("Agency") under
Section 58.14 of the Environmental | ||||||
3 | Protection Act that were paid in performing
environmental | ||||||
4 | remediation at a site for which a No Further Remediation | ||||||
5 | Letter
was issued by the Agency and recorded under Section | ||||||
6 | 58.10 of the Environmental
Protection Act. The credit must | ||||||
7 | be claimed for the taxable year in which
Agency approval | ||||||
8 | of the eligible remediation costs is granted. The credit | ||||||
9 | is
not available to any taxpayer if the taxpayer or any | ||||||
10 | related party caused or
contributed to, in any material | ||||||
11 | respect, a release of regulated substances on,
in, or | ||||||
12 | under the site that was identified and addressed by the | ||||||
13 | remedial
action pursuant to the Site Remediation Program | ||||||
14 | of the Environmental Protection
Act. After the Pollution | ||||||
15 | Control Board rules are adopted pursuant to the
Illinois | ||||||
16 | Administrative Procedure Act for the administration and | ||||||
17 | enforcement of
Section 58.9 of the Environmental | ||||||
18 | Protection Act, determinations as to credit
availability | ||||||
19 | for purposes of this Section shall be made consistent with | ||||||
20 | those
rules. For purposes of this Section, "taxpayer" | ||||||
21 | includes a person whose tax
attributes the taxpayer has | ||||||
22 | succeeded to under Section 381 of the Internal
Revenue | ||||||
23 | Code and "related party" includes the persons disallowed a | ||||||
24 | deduction
for losses by paragraphs (b), (c), and (f)(1) of | ||||||
25 | Section 267 of the Internal
Revenue Code by virtue of | ||||||
26 | being a related taxpayer, as well as any of its
partners. |
| |||||||
| |||||||
1 | The credit allowed against the tax imposed by subsections | ||||||
2 | (a) and
(b) shall be equal to 25% of the unreimbursed | ||||||
3 | eligible remediation costs in
excess of $100,000 per site, | ||||||
4 | except that the $100,000 threshold shall not apply
to any | ||||||
5 | site contained in an enterprise zone as determined by the | ||||||
6 | Department of
Commerce and Community Affairs (now | ||||||
7 | Department of Commerce and Economic Opportunity). The | ||||||
8 | total credit allowed shall not exceed
$40,000 per year | ||||||
9 | with a maximum total of $150,000 per site. For partners | ||||||
10 | and
shareholders of subchapter S corporations, there shall | ||||||
11 | be allowed a credit
under this subsection to be determined | ||||||
12 | in accordance with the determination of
income and | ||||||
13 | distributive share of income under Sections 702 and 704 | ||||||
14 | and
subchapter S of the Internal Revenue Code. | ||||||
15 | (ii) A credit allowed under this subsection that is | ||||||
16 | unused in the year
the credit is earned may be carried | ||||||
17 | forward to each of the 5 taxable years
following the year | ||||||
18 | for which the credit is first earned until it is used.
The | ||||||
19 | term "unused credit" does not include any amounts of | ||||||
20 | unreimbursed eligible
remediation costs in excess of the | ||||||
21 | maximum credit per site authorized under
paragraph (i). | ||||||
22 | This credit shall be applied first to the earliest year
| ||||||
23 | for which there is a liability. If there is a credit under | ||||||
24 | this subsection
from more than one tax year that is | ||||||
25 | available to offset a liability, the
earliest credit | ||||||
26 | arising under this subsection shall be applied first. A
|
| |||||||
| |||||||
1 | credit allowed under this subsection may be sold to a | ||||||
2 | buyer as part of a sale
of all or part of the remediation | ||||||
3 | site for which the credit was granted. The
purchaser of a | ||||||
4 | remediation site and the tax credit shall succeed to the | ||||||
5 | unused
credit and remaining carry-forward period of the | ||||||
6 | seller. To perfect the
transfer, the assignor shall record | ||||||
7 | the transfer in the chain of title for the
site and provide | ||||||
8 | written notice to the Director of the Illinois Department | ||||||
9 | of
Revenue of the assignor's intent to sell the | ||||||
10 | remediation site and the amount of
the tax credit to be | ||||||
11 | transferred as a portion of the sale. In no event may a
| ||||||
12 | credit be transferred to any taxpayer if the taxpayer or a | ||||||
13 | related party would
not be eligible under the provisions | ||||||
14 | of subsection (i). | ||||||
15 | (iii) For purposes of this Section, the term "site" | ||||||
16 | shall have the same
meaning as under Section 58.2 of the | ||||||
17 | Environmental Protection Act. | ||||||
18 | (m) Education expense credit. Beginning with tax years | ||||||
19 | ending after
December 31, 1999, a taxpayer who
is the | ||||||
20 | custodian of one or more qualifying pupils shall be allowed a | ||||||
21 | credit
against the tax imposed by subsections (a) and (b) of | ||||||
22 | this Section for
qualified education expenses incurred on | ||||||
23 | behalf of the qualifying pupils.
The credit shall be equal to | ||||||
24 | 25% of qualified education expenses, but in no
event may the | ||||||
25 | total credit under this subsection claimed by a
family that is | ||||||
26 | the
custodian of qualifying pupils exceed (i) $500 for tax |
| |||||||
| |||||||
1 | years ending prior to December 31, 2017, and (ii) $750 for tax | ||||||
2 | years ending on or after December 31, 2017. In no event shall a | ||||||
3 | credit under
this subsection reduce the taxpayer's liability | ||||||
4 | under this Act to less than
zero. Notwithstanding any other | ||||||
5 | provision of law, for taxable years beginning on or after | ||||||
6 | January 1, 2017, no taxpayer may claim a credit under this | ||||||
7 | subsection (m) if the taxpayer's adjusted gross income for the | ||||||
8 | taxable year exceeds (i) $500,000, in the case of spouses | ||||||
9 | filing a joint federal tax return or (ii) $250,000, in the case | ||||||
10 | of all other taxpayers. This subsection is exempt from the | ||||||
11 | provisions of Section 250 of this
Act. | ||||||
12 | For purposes of this subsection: | ||||||
13 | "Qualifying pupils" means individuals who (i) are | ||||||
14 | residents of the State of
Illinois, (ii) are under the age of | ||||||
15 | 21 at the close of the school year for
which a credit is | ||||||
16 | sought, and (iii) during the school year for which a credit
is | ||||||
17 | sought were full-time pupils enrolled in a kindergarten | ||||||
18 | through twelfth
grade education program at any school, as | ||||||
19 | defined in this subsection. | ||||||
20 | "Qualified education expense" means the amount incurred
on | ||||||
21 | behalf of a qualifying pupil in excess of $250 for tuition, | ||||||
22 | book fees, and
lab fees at the school in which the pupil is | ||||||
23 | enrolled during the regular school
year. | ||||||
24 | "School" means any public or nonpublic elementary or | ||||||
25 | secondary school in
Illinois that is in compliance with Title | ||||||
26 | VI of the Civil Rights Act of 1964
and attendance at which |
| |||||||
| |||||||
1 | satisfies the requirements of Section 26-1 of the
School Code, | ||||||
2 | except that nothing shall be construed to require a child to
| ||||||
3 | attend any particular public or nonpublic school to qualify | ||||||
4 | for the credit
under this Section. | ||||||
5 | "Custodian" means, with respect to qualifying pupils, an | ||||||
6 | Illinois resident
who is a parent, the parents, a legal | ||||||
7 | guardian, or the legal guardians of the
qualifying pupils. | ||||||
8 | (n) River Edge Redevelopment Zone site remediation tax | ||||||
9 | credit.
| ||||||
10 | (i) For tax years ending on or after December 31, | ||||||
11 | 2006, a taxpayer shall be allowed a credit against the tax | ||||||
12 | imposed by subsections (a) and (b) of this Section for | ||||||
13 | certain amounts paid for unreimbursed eligible remediation | ||||||
14 | costs, as specified in this subsection. For purposes of | ||||||
15 | this Section, "unreimbursed eligible remediation costs" | ||||||
16 | means costs approved by the Illinois Environmental | ||||||
17 | Protection Agency ("Agency") under Section 58.14a of the | ||||||
18 | Environmental Protection Act that were paid in performing | ||||||
19 | environmental remediation at a site within a River Edge | ||||||
20 | Redevelopment Zone for which a No Further Remediation | ||||||
21 | Letter was issued by the Agency and recorded under Section | ||||||
22 | 58.10 of the Environmental Protection Act. The credit must | ||||||
23 | be claimed for the taxable year in which Agency approval | ||||||
24 | of the eligible remediation costs is granted. The credit | ||||||
25 | is not available to any taxpayer if the taxpayer or any | ||||||
26 | related party caused or contributed to, in any material |
| |||||||
| |||||||
1 | respect, a release of regulated substances on, in, or | ||||||
2 | under the site that was identified and addressed by the | ||||||
3 | remedial action pursuant to the Site Remediation Program | ||||||
4 | of the Environmental Protection Act. Determinations as to | ||||||
5 | credit availability for purposes of this Section shall be | ||||||
6 | made consistent with rules adopted by the Pollution | ||||||
7 | Control Board pursuant to the Illinois Administrative | ||||||
8 | Procedure Act for the administration and enforcement of | ||||||
9 | Section 58.9 of the Environmental Protection Act. For | ||||||
10 | purposes of this Section, "taxpayer" includes a person | ||||||
11 | whose tax attributes the taxpayer has succeeded to under | ||||||
12 | Section 381 of the Internal Revenue Code and "related | ||||||
13 | party" includes the persons disallowed a deduction for | ||||||
14 | losses by paragraphs (b), (c), and (f)(1) of Section 267 | ||||||
15 | of the Internal Revenue Code by virtue of being a related | ||||||
16 | taxpayer, as well as any of its partners. The credit | ||||||
17 | allowed against the tax imposed by subsections (a) and (b) | ||||||
18 | shall be equal to 25% of the unreimbursed eligible | ||||||
19 | remediation costs in excess of $100,000 per site. | ||||||
20 | (ii) A credit allowed under this subsection that is | ||||||
21 | unused in the year the credit is earned may be carried | ||||||
22 | forward to each of the 5 taxable years following the year | ||||||
23 | for which the credit is first earned until it is used. This | ||||||
24 | credit shall be applied first to the earliest year for | ||||||
25 | which there is a liability. If there is a credit under this | ||||||
26 | subsection from more than one tax year that is available |
| |||||||
| |||||||
1 | to offset a liability, the earliest credit arising under | ||||||
2 | this subsection shall be applied first. A credit allowed | ||||||
3 | under this subsection may be sold to a buyer as part of a | ||||||
4 | sale of all or part of the remediation site for which the | ||||||
5 | credit was granted. The purchaser of a remediation site | ||||||
6 | and the tax credit shall succeed to the unused credit and | ||||||
7 | remaining carry-forward period of the seller. To perfect | ||||||
8 | the transfer, the assignor shall record the transfer in | ||||||
9 | the chain of title for the site and provide written notice | ||||||
10 | to the Director of the Illinois Department of Revenue of | ||||||
11 | the assignor's intent to sell the remediation site and the | ||||||
12 | amount of the tax credit to be transferred as a portion of | ||||||
13 | the sale. In no event may a credit be transferred to any | ||||||
14 | taxpayer if the taxpayer or a related party would not be | ||||||
15 | eligible under the provisions of subsection (i). | ||||||
16 | (iii) For purposes of this Section, the term "site" | ||||||
17 | shall have the same meaning as under Section 58.2 of the | ||||||
18 | Environmental Protection Act. | ||||||
19 | (o) For each of taxable years during the Compassionate Use | ||||||
20 | of Medical Cannabis Program, a surcharge is imposed on all | ||||||
21 | taxpayers on income arising from the sale or exchange of | ||||||
22 | capital assets, depreciable business property, real property | ||||||
23 | used in the trade or business, and Section 197 intangibles of | ||||||
24 | an organization registrant under the Compassionate Use of | ||||||
25 | Medical Cannabis Program Act. The amount of the surcharge is | ||||||
26 | equal to the amount of federal income tax liability for the |
| |||||||
| |||||||
1 | taxable year attributable to those sales and exchanges. The | ||||||
2 | surcharge imposed does not apply if: | ||||||
3 | (1) the medical cannabis cultivation center | ||||||
4 | registration, medical cannabis dispensary registration, or | ||||||
5 | the property of a registration is transferred as a result | ||||||
6 | of any of the following: | ||||||
7 | (A) bankruptcy, a receivership, or a debt | ||||||
8 | adjustment initiated by or against the initial | ||||||
9 | registration or the substantial owners of the initial | ||||||
10 | registration; | ||||||
11 | (B) cancellation, revocation, or termination of | ||||||
12 | any registration by the Illinois Department of Public | ||||||
13 | Health; | ||||||
14 | (C) a determination by the Illinois Department of | ||||||
15 | Public Health that transfer of the registration is in | ||||||
16 | the best interests of Illinois qualifying patients as | ||||||
17 | defined by the Compassionate Use of Medical Cannabis | ||||||
18 | Program Act; | ||||||
19 | (D) the death of an owner of the equity interest in | ||||||
20 | a registrant; | ||||||
21 | (E) the acquisition of a controlling interest in | ||||||
22 | the stock or substantially all of the assets of a | ||||||
23 | publicly traded company; | ||||||
24 | (F) a transfer by a parent company to a wholly | ||||||
25 | owned subsidiary; or | ||||||
26 | (G) the transfer or sale to or by one person to |
| |||||||
| |||||||
1 | another person where both persons were initial owners | ||||||
2 | of the registration when the registration was issued; | ||||||
3 | or | ||||||
4 | (2) the cannabis cultivation center registration, | ||||||
5 | medical cannabis dispensary registration, or the | ||||||
6 | controlling interest in a registrant's property is | ||||||
7 | transferred in a transaction to lineal descendants in | ||||||
8 | which no gain or loss is recognized or as a result of a | ||||||
9 | transaction in accordance with Section 351 of the Internal | ||||||
10 | Revenue Code in which no gain or loss is recognized. | ||||||
11 | (p) Pass-through entity tax. | ||||||
12 | (1) For taxable years ending on or after December 31, | ||||||
13 | 2021 and beginning prior to January 1, 2026, a partnership | ||||||
14 | (other than a publicly traded partnership under Section | ||||||
15 | 7704 of the Internal Revenue Code) or Subchapter S | ||||||
16 | corporation may elect to apply the provisions of this | ||||||
17 | subsection. A separate election shall be made for each | ||||||
18 | taxable year. Such election shall be made at such time, | ||||||
19 | and in such form and manner as prescribed by the | ||||||
20 | Department, and, once made, is irrevocable. | ||||||
21 | (2) Entity-level tax. A partnership or Subchapter S | ||||||
22 | corporation electing to apply the provisions of this | ||||||
23 | subsection shall be subject to a tax for the privilege of | ||||||
24 | earning or receiving income in this State in an amount | ||||||
25 | equal to 4.95% of the taxpayer's net income for the | ||||||
26 | taxable year. |
| |||||||
| |||||||
1 | (3) Net income defined. | ||||||
2 | (A) In general. For purposes of paragraph (2), the | ||||||
3 | term net income has the same meaning as defined in | ||||||
4 | Section 202 of this Act, except that the following | ||||||
5 | provisions shall not apply: | ||||||
6 | (i) the standard exemption allowed under | ||||||
7 | Section 204; | ||||||
8 | (ii) the deduction for net losses allowed | ||||||
9 | under Section 207; | ||||||
10 | (iii) in the case of an S corporation, the | ||||||
11 | modification under Section 203(b)(2)(S); and | ||||||
12 | (iv) in the case of a partnership, the | ||||||
13 | modifications under Section 203(d)(2)(H) and | ||||||
14 | Section 203(d)(2)(I). | ||||||
15 | (B) Special rule for tiered partnerships. If a | ||||||
16 | taxpayer making the election under paragraph (1) is a | ||||||
17 | partner of another taxpayer making the election under | ||||||
18 | paragraph (1), net income shall be computed as | ||||||
19 | provided in subparagraph (A), except that the taxpayer | ||||||
20 | shall subtract its distributive share of the net | ||||||
21 | income of the electing partnership (including its | ||||||
22 | distributive share of the net income of the electing | ||||||
23 | partnership derived as a distributive share from | ||||||
24 | electing partnerships in which it is a partner). | ||||||
25 | (4) Credit for entity level tax. Each partner or | ||||||
26 | shareholder of a taxpayer making the election under this |
| |||||||
| |||||||
1 | Section shall be allowed a credit against the tax imposed | ||||||
2 | under subsections (a) and (b) of Section 201 of this Act | ||||||
3 | for the taxable year of the partnership or Subchapter S | ||||||
4 | corporation for which an election is in effect ending | ||||||
5 | within or with the taxable year of the partner or | ||||||
6 | shareholder in an amount equal to 4.95% times the partner | ||||||
7 | or shareholder's distributive share of the net income of | ||||||
8 | the electing partnership or Subchapter S corporation, but | ||||||
9 | not to exceed the partner's or shareholder's share of the | ||||||
10 | tax imposed under paragraph (1) which is actually paid by | ||||||
11 | the partnership or Subchapter S corporation. If the | ||||||
12 | taxpayer is a partnership or Subchapter S corporation that | ||||||
13 | is itself a partner of a partnership making the election | ||||||
14 | under paragraph (1), the credit under this paragraph shall | ||||||
15 | be allowed to the taxpayer's partners or shareholders (or | ||||||
16 | if the partner is a partnership or Subchapter S | ||||||
17 | corporation then its partners or shareholders) in | ||||||
18 | accordance with the determination of income and | ||||||
19 | distributive share of income under Sections 702 and 704 | ||||||
20 | and Subchapter S of the Internal Revenue Code. If the | ||||||
21 | amount of the credit allowed under this paragraph exceeds | ||||||
22 | the partner's or shareholder's liability for tax imposed | ||||||
23 | under subsections (a) and (b) of Section 201 of this Act | ||||||
24 | for the taxable year, such excess shall be treated as an | ||||||
25 | overpayment for purposes of Section 909 of this Act. | ||||||
26 | (5) Nonresidents. A nonresident individual who is a |
| |||||||
| |||||||
1 | partner or shareholder of a partnership or Subchapter S | ||||||
2 | corporation for a taxable year for which an election is in | ||||||
3 | effect under paragraph (1) shall not be required to file | ||||||
4 | an income tax return under this Act for such taxable year | ||||||
5 | if the only source of net income of the individual (or the | ||||||
6 | individual and the individual's spouse in the case of a | ||||||
7 | joint return) is from an entity making the election under | ||||||
8 | paragraph (1) and the credit allowed to the partner or | ||||||
9 | shareholder under paragraph (4) equals or exceeds the | ||||||
10 | individual's liability for the tax imposed under | ||||||
11 | subsections (a) and (b) of Section 201 of this Act for the | ||||||
12 | taxable year. | ||||||
13 | (6) Liability for tax. Except as provided in this | ||||||
14 | paragraph, a partnership or Subchapter S making the | ||||||
15 | election under paragraph (1) is liable for the | ||||||
16 | entity-level tax imposed under paragraph (2). If the | ||||||
17 | electing partnership or corporation fails to pay the full | ||||||
18 | amount of tax deemed assessed under paragraph (2), the | ||||||
19 | partners or shareholders shall be liable to pay the tax | ||||||
20 | assessed (including penalties and interest). Each partner | ||||||
21 | or shareholder shall be liable for the unpaid assessment | ||||||
22 | based on the ratio of the partner's or shareholder's share | ||||||
23 | of the net income of the partnership over the total net | ||||||
24 | income of the partnership. If the partnership or | ||||||
25 | Subchapter S corporation fails to pay the tax assessed | ||||||
26 | (including penalties and interest) and thereafter an |
| |||||||
| |||||||
1 | amount of such tax is paid by the partners or | ||||||
2 | shareholders, such amount shall not be collected from the | ||||||
3 | partnership or corporation. | ||||||
4 | (7) Foreign tax. For purposes of the credit allowed | ||||||
5 | under Section 601(b)(3) of this Act, tax paid by a | ||||||
6 | partnership or Subchapter S corporation to another state | ||||||
7 | which, as determined by the Department, is substantially | ||||||
8 | similar to the tax imposed under this subsection, shall be | ||||||
9 | considered tax paid by the partner or shareholder to the | ||||||
10 | extent that the partner's or shareholder's share of the | ||||||
11 | income of the partnership or Subchapter S corporation | ||||||
12 | allocated and apportioned to such other state bears to the | ||||||
13 | total income of the partnership or Subchapter S | ||||||
14 | corporation allocated or apportioned to such other state. | ||||||
15 | (8) Suspension of withholding. The provisions of | ||||||
16 | Section 709.5 of this Act shall not apply to a partnership | ||||||
17 | or Subchapter S corporation for the taxable year for which | ||||||
18 | an election under paragraph (1) is in effect. | ||||||
19 | (9) Requirement to pay estimated tax. For each taxable | ||||||
20 | year for which an election under paragraph (1) is in | ||||||
21 | effect, a partnership or Subchapter S corporation is | ||||||
22 | required to pay estimated tax for such taxable year under | ||||||
23 | Sections 803 and 804 of this Act if the amount payable as | ||||||
24 | estimated tax can reasonably be expected to exceed $500. | ||||||
25 | (10) The provisions of this subsection shall apply | ||||||
26 | only with respect to taxable years for which the |
| |||||||
| |||||||
1 | limitation on individual deductions applies under Section | ||||||
2 | 164(b)(6) of the Internal Revenue Code. | ||||||
3 | (Source: P.A. 100-22, eff. 7-6-17; 101-9, eff. 6-5-19; 101-31, | ||||||
4 | eff. 6-28-19; 101-207, eff. 8-2-19; 101-363, eff. 8-9-19; | ||||||
5 | revised 11-18-20.) | ||||||
6 | (Text of Section with the changes made by P.A. 101-8, | ||||||
7 | which did not take effect (see Section 99 of P.A. 101-8))
| ||||||
8 | Sec. 201. Tax imposed. | ||||||
9 | (a) In general. A tax measured by net income is hereby | ||||||
10 | imposed on every
individual, corporation, trust and estate for | ||||||
11 | each taxable year ending
after July 31, 1969 on the privilege | ||||||
12 | of earning or receiving income in or
as a resident of this | ||||||
13 | State. Such tax shall be in addition to all other
occupation or | ||||||
14 | privilege taxes imposed by this State or by any municipal
| ||||||
15 | corporation or political subdivision thereof. | ||||||
16 | (b) Rates. The tax imposed by subsection (a) of this | ||||||
17 | Section shall be
determined as follows, except as adjusted by | ||||||
18 | subsection (d-1): | ||||||
19 | (1) In the case of an individual, trust or estate, for | ||||||
20 | taxable years
ending prior to July 1, 1989, an amount | ||||||
21 | equal to 2 1/2% of the taxpayer's
net income for the | ||||||
22 | taxable year. | ||||||
23 | (2) In the case of an individual, trust or estate, for | ||||||
24 | taxable years
beginning prior to July 1, 1989 and ending | ||||||
25 | after June 30, 1989, an amount
equal to the sum of (i) 2 |
| |||||||
| |||||||
1 | 1/2% of the taxpayer's net income for the period
prior to | ||||||
2 | July 1, 1989, as calculated under Section 202.3, and (ii) | ||||||
3 | 3% of the
taxpayer's net income for the period after June | ||||||
4 | 30, 1989, as calculated
under Section 202.3. | ||||||
5 | (3) In the case of an individual, trust or estate, for | ||||||
6 | taxable years
beginning after June 30, 1989, and ending | ||||||
7 | prior to January 1, 2011, an amount equal to 3% of the | ||||||
8 | taxpayer's net
income for the taxable year. | ||||||
9 | (4) In the case of an individual, trust, or estate, | ||||||
10 | for taxable years beginning prior to January 1, 2011, and | ||||||
11 | ending after December 31, 2010, an amount equal to the sum | ||||||
12 | of (i) 3% of the taxpayer's net income for the period prior | ||||||
13 | to January 1, 2011, as calculated under Section 202.5, and | ||||||
14 | (ii) 5% of the taxpayer's net income for the period after | ||||||
15 | December 31, 2010, as calculated under Section 202.5. | ||||||
16 | (5) In the case of an individual, trust, or estate, | ||||||
17 | for taxable years beginning on or after January 1, 2011, | ||||||
18 | and ending prior to January 1, 2015, an amount equal to 5% | ||||||
19 | of the taxpayer's net income for the taxable year. | ||||||
20 | (5.1) In the case of an individual, trust, or estate, | ||||||
21 | for taxable years beginning prior to January 1, 2015, and | ||||||
22 | ending after December 31, 2014, an amount equal to the sum | ||||||
23 | of (i) 5% of the taxpayer's net income for the period prior | ||||||
24 | to January 1, 2015, as calculated under Section 202.5, and | ||||||
25 | (ii) 3.75% of the taxpayer's net income for the period | ||||||
26 | after December 31, 2014, as calculated under Section |
| |||||||
| |||||||
1 | 202.5. | ||||||
2 | (5.2) In the case of an individual, trust, or estate, | ||||||
3 | for taxable years beginning on or after January 1, 2015, | ||||||
4 | and ending prior to July 1, 2017, an amount equal to 3.75% | ||||||
5 | of the taxpayer's net income for the taxable year. | ||||||
6 | (5.3) In the case of an individual, trust, or estate, | ||||||
7 | for taxable years beginning prior to July 1, 2017, and | ||||||
8 | ending after June 30, 2017, an amount equal to the sum of | ||||||
9 | (i) 3.75% of the taxpayer's net income for the period | ||||||
10 | prior to July 1, 2017, as calculated under Section 202.5, | ||||||
11 | and (ii) 4.95% of the taxpayer's net income for the period | ||||||
12 | after June 30, 2017, as calculated under Section 202.5. | ||||||
13 | (5.4) In the case of an individual, trust, or estate, | ||||||
14 | for taxable years beginning on or after July 1, 2017 and | ||||||
15 | beginning prior to January 1, 2021 , an amount equal to | ||||||
16 | 4.95% of the taxpayer's net income for the taxable year. | ||||||
17 | (5.5) In the case of an individual, trust, or estate, | ||||||
18 | for taxable years beginning on or after January 1, 2021, | ||||||
19 | an amount calculated under the rate structure set forth in | ||||||
20 | Section 201.1. | ||||||
21 | (6) In the case of a corporation, for taxable years
| ||||||
22 | ending prior to July 1, 1989, an amount equal to 4% of the
| ||||||
23 | taxpayer's net income for the taxable year. | ||||||
24 | (7) In the case of a corporation, for taxable years | ||||||
25 | beginning prior to
July 1, 1989 and ending after June 30, | ||||||
26 | 1989, an amount equal to the sum of
(i) 4% of the |
| |||||||
| |||||||
1 | taxpayer's net income for the period prior to July 1, | ||||||
2 | 1989,
as calculated under Section 202.3, and (ii) 4.8% of | ||||||
3 | the taxpayer's net
income for the period after June 30, | ||||||
4 | 1989, as calculated under Section
202.3. | ||||||
5 | (8) In the case of a corporation, for taxable years | ||||||
6 | beginning after
June 30, 1989, and ending prior to January | ||||||
7 | 1, 2011, an amount equal to 4.8% of the taxpayer's net | ||||||
8 | income for the
taxable year. | ||||||
9 | (9) In the case of a corporation, for taxable years | ||||||
10 | beginning prior to January 1, 2011, and ending after | ||||||
11 | December 31, 2010, an amount equal to the sum of (i) 4.8% | ||||||
12 | of the taxpayer's net income for the period prior to | ||||||
13 | January 1, 2011, as calculated under Section 202.5, and | ||||||
14 | (ii) 7% of the taxpayer's net income for the period after | ||||||
15 | December 31, 2010, as calculated under Section 202.5. | ||||||
16 | (10) In the case of a corporation, for taxable years | ||||||
17 | beginning on or after January 1, 2011, and ending prior to | ||||||
18 | January 1, 2015, an amount equal to 7% of the taxpayer's | ||||||
19 | net income for the taxable year. | ||||||
20 | (11) In the case of a corporation, for taxable years | ||||||
21 | beginning prior to January 1, 2015, and ending after | ||||||
22 | December 31, 2014, an amount equal to the sum of (i) 7% of | ||||||
23 | the taxpayer's net income for the period prior to January | ||||||
24 | 1, 2015, as calculated under Section 202.5, and (ii) 5.25% | ||||||
25 | of the taxpayer's net income for the period after December | ||||||
26 | 31, 2014, as calculated under Section 202.5. |
| |||||||
| |||||||
1 | (12) In the case of a corporation, for taxable years | ||||||
2 | beginning on or after January 1, 2015, and ending prior to | ||||||
3 | July 1, 2017, an amount equal to 5.25% of the taxpayer's | ||||||
4 | net income for the taxable year. | ||||||
5 | (13) In the case of a corporation, for taxable years | ||||||
6 | beginning prior to July 1, 2017, and ending after June 30, | ||||||
7 | 2017, an amount equal to the sum of (i) 5.25% of the | ||||||
8 | taxpayer's net income for the period prior to July 1, | ||||||
9 | 2017, as calculated under Section 202.5, and (ii) 7% of | ||||||
10 | the taxpayer's net income for the period after June 30, | ||||||
11 | 2017, as calculated under Section 202.5. | ||||||
12 | (14) In the case of a corporation, for taxable years | ||||||
13 | beginning on or after July 1, 2017 and beginning prior to | ||||||
14 | January 1, 2021 , an amount equal to 7% of the taxpayer's | ||||||
15 | net income for the taxable year. | ||||||
16 | (15) In the case of a corporation, for taxable years | ||||||
17 | beginning on or after January 1, 2021, an amount equal to | ||||||
18 | 7.99% of the taxpayer's net income for the taxable year. | ||||||
19 | The rates under this subsection (b) are subject to the | ||||||
20 | provisions of Section 201.5. | ||||||
21 | (b-5) Surcharge; sale or exchange of assets, properties, | ||||||
22 | and intangibles of organization gaming licensees. For each of | ||||||
23 | taxable years 2019 through 2027, a surcharge is imposed on all | ||||||
24 | taxpayers on income arising from the sale or exchange of | ||||||
25 | capital assets, depreciable business property, real property | ||||||
26 | used in the trade or business, and Section 197 intangibles (i) |
| |||||||
| |||||||
1 | of an organization licensee under the Illinois Horse Racing | ||||||
2 | Act of 1975 and (ii) of an organization gaming licensee under | ||||||
3 | the Illinois Gambling Act. The amount of the surcharge is | ||||||
4 | equal to the amount of federal income tax liability for the | ||||||
5 | taxable year attributable to those sales and exchanges. The | ||||||
6 | surcharge imposed shall not apply if: | ||||||
7 | (1) the organization gaming license, organization | ||||||
8 | license, or racetrack property is transferred as a result | ||||||
9 | of any of the following: | ||||||
10 | (A) bankruptcy, a receivership, or a debt | ||||||
11 | adjustment initiated by or against the initial | ||||||
12 | licensee or the substantial owners of the initial | ||||||
13 | licensee; | ||||||
14 | (B) cancellation, revocation, or termination of | ||||||
15 | any such license by the Illinois Gaming Board or the | ||||||
16 | Illinois Racing Board; | ||||||
17 | (C) a determination by the Illinois Gaming Board | ||||||
18 | that transfer of the license is in the best interests | ||||||
19 | of Illinois gaming; | ||||||
20 | (D) the death of an owner of the equity interest in | ||||||
21 | a licensee; | ||||||
22 | (E) the acquisition of a controlling interest in | ||||||
23 | the stock or substantially all of the assets of a | ||||||
24 | publicly traded company; | ||||||
25 | (F) a transfer by a parent company to a wholly | ||||||
26 | owned subsidiary; or |
| |||||||
| |||||||
1 | (G) the transfer or sale to or by one person to | ||||||
2 | another person where both persons were initial owners | ||||||
3 | of the license when the license was issued; or | ||||||
4 | (2) the controlling interest in the organization | ||||||
5 | gaming license, organization license, or racetrack | ||||||
6 | property is transferred in a transaction to lineal | ||||||
7 | descendants in which no gain or loss is recognized or as a | ||||||
8 | result of a transaction in accordance with Section 351 of | ||||||
9 | the Internal Revenue Code in which no gain or loss is | ||||||
10 | recognized; or | ||||||
11 | (3) live horse racing was not conducted in 2010 at a | ||||||
12 | racetrack located within 3 miles of the Mississippi River | ||||||
13 | under a license issued pursuant to the Illinois Horse | ||||||
14 | Racing Act of 1975. | ||||||
15 | The transfer of an organization gaming license, | ||||||
16 | organization license, or racetrack property by a person other | ||||||
17 | than the initial licensee to receive the organization gaming | ||||||
18 | license is not subject to a surcharge. The Department shall | ||||||
19 | adopt rules necessary to implement and administer this | ||||||
20 | subsection. | ||||||
21 | (c) Personal Property Tax Replacement Income Tax.
| ||||||
22 | Beginning on July 1, 1979 and thereafter, in addition to such | ||||||
23 | income
tax, there is also hereby imposed the Personal Property | ||||||
24 | Tax Replacement
Income Tax measured by net income on every | ||||||
25 | corporation (including Subchapter
S corporations), partnership | ||||||
26 | and trust, for each taxable year ending after
June 30, 1979. |
| |||||||
| |||||||
1 | Such taxes are imposed on the privilege of earning or
| ||||||
2 | receiving income in or as a resident of this State. The | ||||||
3 | Personal Property
Tax Replacement Income Tax shall be in | ||||||
4 | addition to the income tax imposed
by subsections (a) and (b) | ||||||
5 | of this Section and in addition to all other
occupation or | ||||||
6 | privilege taxes imposed by this State or by any municipal
| ||||||
7 | corporation or political subdivision thereof. | ||||||
8 | (d) Additional Personal Property Tax Replacement Income | ||||||
9 | Tax Rates.
The personal property tax replacement income tax | ||||||
10 | imposed by this subsection
and subsection (c) of this Section | ||||||
11 | in the case of a corporation, other
than a Subchapter S | ||||||
12 | corporation and except as adjusted by subsection (d-1),
shall | ||||||
13 | be an additional amount equal to
2.85% of such taxpayer's net | ||||||
14 | income for the taxable year, except that
beginning on January | ||||||
15 | 1, 1981, and thereafter, the rate of 2.85% specified
in this | ||||||
16 | subsection shall be reduced to 2.5%, and in the case of a
| ||||||
17 | partnership, trust or a Subchapter S corporation shall be an | ||||||
18 | additional
amount equal to 1.5% of such taxpayer's net income | ||||||
19 | for the taxable year. | ||||||
20 | (d-1) Rate reduction for certain foreign insurers. In the | ||||||
21 | case of a
foreign insurer, as defined by Section 35A-5 of the | ||||||
22 | Illinois Insurance Code,
whose state or country of domicile | ||||||
23 | imposes on insurers domiciled in Illinois
a retaliatory tax | ||||||
24 | (excluding any insurer
whose premiums from reinsurance assumed | ||||||
25 | are 50% or more of its total insurance
premiums as determined | ||||||
26 | under paragraph (2) of subsection (b) of Section 304,
except |
| |||||||
| |||||||
1 | that for purposes of this determination premiums from | ||||||
2 | reinsurance do
not include premiums from inter-affiliate | ||||||
3 | reinsurance arrangements),
beginning with taxable years ending | ||||||
4 | on or after December 31, 1999,
the sum of
the rates of tax | ||||||
5 | imposed by subsections (b) and (d) shall be reduced (but not
| ||||||
6 | increased) to the rate at which the total amount of tax imposed | ||||||
7 | under this Act,
net of all credits allowed under this Act, | ||||||
8 | shall equal (i) the total amount of
tax that would be imposed | ||||||
9 | on the foreign insurer's net income allocable to
Illinois for | ||||||
10 | the taxable year by such foreign insurer's state or country of
| ||||||
11 | domicile if that net income were subject to all income taxes | ||||||
12 | and taxes
measured by net income imposed by such foreign | ||||||
13 | insurer's state or country of
domicile, net of all credits | ||||||
14 | allowed or (ii) a rate of zero if no such tax is
imposed on | ||||||
15 | such income by the foreign insurer's state of domicile.
For | ||||||
16 | the purposes of this subsection (d-1), an inter-affiliate | ||||||
17 | includes a
mutual insurer under common management. | ||||||
18 | (1) For the purposes of subsection (d-1), in no event | ||||||
19 | shall the sum of the
rates of tax imposed by subsections | ||||||
20 | (b) and (d) be reduced below the rate at
which the sum of: | ||||||
21 | (A) the total amount of tax imposed on such | ||||||
22 | foreign insurer under
this Act for a taxable year, net | ||||||
23 | of all credits allowed under this Act, plus | ||||||
24 | (B) the privilege tax imposed by Section 409 of | ||||||
25 | the Illinois Insurance
Code, the fire insurance | ||||||
26 | company tax imposed by Section 12 of the Fire
|
| |||||||
| |||||||
1 | Investigation Act, and the fire department taxes | ||||||
2 | imposed under Section 11-10-1
of the Illinois | ||||||
3 | Municipal Code, | ||||||
4 | equals 1.25% for taxable years ending prior to December | ||||||
5 | 31, 2003, or
1.75% for taxable years ending on or after | ||||||
6 | December 31, 2003, of the net
taxable premiums written for | ||||||
7 | the taxable year,
as described by subsection (1) of | ||||||
8 | Section 409 of the Illinois Insurance Code.
This paragraph | ||||||
9 | will in no event increase the rates imposed under | ||||||
10 | subsections
(b) and (d). | ||||||
11 | (2) Any reduction in the rates of tax imposed by this | ||||||
12 | subsection shall be
applied first against the rates | ||||||
13 | imposed by subsection (b) and only after the
tax imposed | ||||||
14 | by subsection (a) net of all credits allowed under this | ||||||
15 | Section
other than the credit allowed under subsection (i) | ||||||
16 | has been reduced to zero,
against the rates imposed by | ||||||
17 | subsection (d). | ||||||
18 | This subsection (d-1) is exempt from the provisions of | ||||||
19 | Section 250. | ||||||
20 | (e) Investment credit. A taxpayer shall be allowed a | ||||||
21 | credit
against the Personal Property Tax Replacement Income | ||||||
22 | Tax for
investment in qualified property. | ||||||
23 | (1) A taxpayer shall be allowed a credit equal to .5% | ||||||
24 | of
the basis of qualified property placed in service | ||||||
25 | during the taxable year,
provided such property is placed | ||||||
26 | in service on or after
July 1, 1984. There shall be allowed |
| |||||||
| |||||||
1 | an additional credit equal
to .5% of the basis of | ||||||
2 | qualified property placed in service during the
taxable | ||||||
3 | year, provided such property is placed in service on or
| ||||||
4 | after July 1, 1986, and the taxpayer's base employment
| ||||||
5 | within Illinois has increased by 1% or more over the | ||||||
6 | preceding year as
determined by the taxpayer's employment | ||||||
7 | records filed with the
Illinois Department of Employment | ||||||
8 | Security. Taxpayers who are new to
Illinois shall be | ||||||
9 | deemed to have met the 1% growth in base employment for
the | ||||||
10 | first year in which they file employment records with the | ||||||
11 | Illinois
Department of Employment Security. The provisions | ||||||
12 | added to this Section by
Public Act 85-1200 (and restored | ||||||
13 | by Public Act 87-895) shall be
construed as declaratory of | ||||||
14 | existing law and not as a new enactment. If,
in any year, | ||||||
15 | the increase in base employment within Illinois over the
| ||||||
16 | preceding year is less than 1%, the additional credit | ||||||
17 | shall be limited to that
percentage times a fraction, the | ||||||
18 | numerator of which is .5% and the denominator
of which is | ||||||
19 | 1%, but shall not exceed .5%. The investment credit shall | ||||||
20 | not be
allowed to the extent that it would reduce a | ||||||
21 | taxpayer's liability in any tax
year below zero, nor may | ||||||
22 | any credit for qualified property be allowed for any
year | ||||||
23 | other than the year in which the property was placed in | ||||||
24 | service in
Illinois. For tax years ending on or after | ||||||
25 | December 31, 1987, and on or
before December 31, 1988, the | ||||||
26 | credit shall be allowed for the tax year in
which the |
| |||||||
| |||||||
1 | property is placed in service, or, if the amount of the | ||||||
2 | credit
exceeds the tax liability for that year, whether it | ||||||
3 | exceeds the original
liability or the liability as later | ||||||
4 | amended, such excess may be carried
forward and applied to | ||||||
5 | the tax liability of the 5 taxable years following
the | ||||||
6 | excess credit years if the taxpayer (i) makes investments | ||||||
7 | which cause
the creation of a minimum of 2,000 full-time | ||||||
8 | equivalent jobs in Illinois,
(ii) is located in an | ||||||
9 | enterprise zone established pursuant to the Illinois
| ||||||
10 | Enterprise Zone Act and (iii) is certified by the | ||||||
11 | Department of Commerce
and Community Affairs (now | ||||||
12 | Department of Commerce and Economic Opportunity) as | ||||||
13 | complying with the requirements specified in
clause (i) | ||||||
14 | and (ii) by July 1, 1986. The Department of Commerce and
| ||||||
15 | Community Affairs (now Department of Commerce and Economic | ||||||
16 | Opportunity) shall notify the Department of Revenue of all | ||||||
17 | such
certifications immediately. For tax years ending | ||||||
18 | after December 31, 1988,
the credit shall be allowed for | ||||||
19 | the tax year in which the property is
placed in service, | ||||||
20 | or, if the amount of the credit exceeds the tax
liability | ||||||
21 | for that year, whether it exceeds the original liability | ||||||
22 | or the
liability as later amended, such excess may be | ||||||
23 | carried forward and applied
to the tax liability of the 5 | ||||||
24 | taxable years following the excess credit
years. The | ||||||
25 | credit shall be applied to the earliest year for which | ||||||
26 | there is
a liability. If there is credit from more than one |
| |||||||
| |||||||
1 | tax year that is
available to offset a liability, earlier | ||||||
2 | credit shall be applied first. | ||||||
3 | (2) The term "qualified property" means property | ||||||
4 | which: | ||||||
5 | (A) is tangible, whether new or used, including | ||||||
6 | buildings and structural
components of buildings and | ||||||
7 | signs that are real property, but not including
land | ||||||
8 | or improvements to real property that are not a | ||||||
9 | structural component of a
building such as | ||||||
10 | landscaping, sewer lines, local access roads, fencing, | ||||||
11 | parking
lots, and other appurtenances; | ||||||
12 | (B) is depreciable pursuant to Section 167 of the | ||||||
13 | Internal Revenue Code,
except that "3-year property" | ||||||
14 | as defined in Section 168(c)(2)(A) of that
Code is not | ||||||
15 | eligible for the credit provided by this subsection | ||||||
16 | (e); | ||||||
17 | (C) is acquired by purchase as defined in Section | ||||||
18 | 179(d) of
the Internal Revenue Code; | ||||||
19 | (D) is used in Illinois by a taxpayer who is | ||||||
20 | primarily engaged in
manufacturing, or in mining coal | ||||||
21 | or fluorite, or in retailing, or was placed in service | ||||||
22 | on or after July 1, 2006 in a River Edge Redevelopment | ||||||
23 | Zone established pursuant to the River Edge | ||||||
24 | Redevelopment Zone Act; and | ||||||
25 | (E) has not previously been used in Illinois in | ||||||
26 | such a manner and by
such a person as would qualify for |
| |||||||
| |||||||
1 | the credit provided by this subsection
(e) or | ||||||
2 | subsection (f). | ||||||
3 | (3) For purposes of this subsection (e), | ||||||
4 | "manufacturing" means
the material staging and production | ||||||
5 | of tangible personal property by
procedures commonly | ||||||
6 | regarded as manufacturing, processing, fabrication, or
| ||||||
7 | assembling which changes some existing material into new | ||||||
8 | shapes, new
qualities, or new combinations. For purposes | ||||||
9 | of this subsection
(e) the term "mining" shall have the | ||||||
10 | same meaning as the term "mining" in
Section 613(c) of the | ||||||
11 | Internal Revenue Code. For purposes of this subsection
| ||||||
12 | (e), the term "retailing" means the sale of tangible | ||||||
13 | personal property for use or consumption and not for | ||||||
14 | resale, or
services rendered in conjunction with the sale | ||||||
15 | of tangible personal property for use or consumption and | ||||||
16 | not for resale. For purposes of this subsection (e), | ||||||
17 | "tangible personal property" has the same meaning as when | ||||||
18 | that term is used in the Retailers' Occupation Tax Act, | ||||||
19 | and, for taxable years ending after December 31, 2008, | ||||||
20 | does not include the generation, transmission, or | ||||||
21 | distribution of electricity. | ||||||
22 | (4) The basis of qualified property shall be the basis
| ||||||
23 | used to compute the depreciation deduction for federal | ||||||
24 | income tax purposes. | ||||||
25 | (5) If the basis of the property for federal income | ||||||
26 | tax depreciation
purposes is increased after it has been |
| |||||||
| |||||||
1 | placed in service in Illinois by
the taxpayer, the amount | ||||||
2 | of such increase shall be deemed property placed
in | ||||||
3 | service on the date of such increase in basis. | ||||||
4 | (6) The term "placed in service" shall have the same
| ||||||
5 | meaning as under Section 46 of the Internal Revenue Code. | ||||||
6 | (7) If during any taxable year, any property ceases to
| ||||||
7 | be qualified property in the hands of the taxpayer within | ||||||
8 | 48 months after
being placed in service, or the situs of | ||||||
9 | any qualified property is
moved outside Illinois within 48 | ||||||
10 | months after being placed in service, the
Personal | ||||||
11 | Property Tax Replacement Income Tax for such taxable year | ||||||
12 | shall be
increased. Such increase shall be determined by | ||||||
13 | (i) recomputing the
investment credit which would have | ||||||
14 | been allowed for the year in which
credit for such | ||||||
15 | property was originally allowed by eliminating such
| ||||||
16 | property from such computation and, (ii) subtracting such | ||||||
17 | recomputed credit
from the amount of credit previously | ||||||
18 | allowed. For the purposes of this
paragraph (7), a | ||||||
19 | reduction of the basis of qualified property resulting
| ||||||
20 | from a redetermination of the purchase price shall be | ||||||
21 | deemed a disposition
of qualified property to the extent | ||||||
22 | of such reduction. | ||||||
23 | (8) Unless the investment credit is extended by law, | ||||||
24 | the
basis of qualified property shall not include costs | ||||||
25 | incurred after
December 31, 2018, except for costs | ||||||
26 | incurred pursuant to a binding
contract entered into on or |
| |||||||
| |||||||
1 | before December 31, 2018. | ||||||
2 | (9) Each taxable year ending before December 31, 2000, | ||||||
3 | a partnership may
elect to pass through to its
partners | ||||||
4 | the credits to which the partnership is entitled under | ||||||
5 | this subsection
(e) for the taxable year. A partner may | ||||||
6 | use the credit allocated to him or her
under this | ||||||
7 | paragraph only against the tax imposed in subsections (c) | ||||||
8 | and (d) of
this Section. If the partnership makes that | ||||||
9 | election, those credits shall be
allocated among the | ||||||
10 | partners in the partnership in accordance with the rules
| ||||||
11 | set forth in Section 704(b) of the Internal Revenue Code, | ||||||
12 | and the rules
promulgated under that Section, and the | ||||||
13 | allocated amount of the credits shall
be allowed to the | ||||||
14 | partners for that taxable year. The partnership shall make
| ||||||
15 | this election on its Personal Property Tax Replacement | ||||||
16 | Income Tax return for
that taxable year. The election to | ||||||
17 | pass through the credits shall be
irrevocable. | ||||||
18 | For taxable years ending on or after December 31, | ||||||
19 | 2000, a
partner that qualifies its
partnership for a | ||||||
20 | subtraction under subparagraph (I) of paragraph (2) of
| ||||||
21 | subsection (d) of Section 203 or a shareholder that | ||||||
22 | qualifies a Subchapter S
corporation for a subtraction | ||||||
23 | under subparagraph (S) of paragraph (2) of
subsection (b) | ||||||
24 | of Section 203 shall be allowed a credit under this | ||||||
25 | subsection
(e) equal to its share of the credit earned | ||||||
26 | under this subsection (e) during
the taxable year by the |
| |||||||
| |||||||
1 | partnership or Subchapter S corporation, determined in
| ||||||
2 | accordance with the determination of income and | ||||||
3 | distributive share of
income under Sections 702 and 704 | ||||||
4 | and Subchapter S of the Internal Revenue
Code. This | ||||||
5 | paragraph is exempt from the provisions of Section 250. | ||||||
6 | (f) Investment credit; Enterprise Zone; River Edge | ||||||
7 | Redevelopment Zone. | ||||||
8 | (1) A taxpayer shall be allowed a credit against the | ||||||
9 | tax imposed
by subsections (a) and (b) of this Section for | ||||||
10 | investment in qualified
property which is placed in | ||||||
11 | service in an Enterprise Zone created
pursuant to the | ||||||
12 | Illinois Enterprise Zone Act or, for property placed in | ||||||
13 | service on or after July 1, 2006, a River Edge | ||||||
14 | Redevelopment Zone established pursuant to the River Edge | ||||||
15 | Redevelopment Zone Act. For partners, shareholders
of | ||||||
16 | Subchapter S corporations, and owners of limited liability | ||||||
17 | companies,
if the liability company is treated as a | ||||||
18 | partnership for purposes of
federal and State income | ||||||
19 | taxation, there shall be allowed a credit under
this | ||||||
20 | subsection (f) to be determined in accordance with the | ||||||
21 | determination
of income and distributive share of income | ||||||
22 | under Sections 702 and 704 and
Subchapter S of the | ||||||
23 | Internal Revenue Code. The credit shall be .5% of the
| ||||||
24 | basis for such property. The credit shall be available | ||||||
25 | only in the taxable
year in which the property is placed in | ||||||
26 | service in the Enterprise Zone or River Edge Redevelopment |
| |||||||
| |||||||
1 | Zone and
shall not be allowed to the extent that it would | ||||||
2 | reduce a taxpayer's
liability for the tax imposed by | ||||||
3 | subsections (a) and (b) of this Section to
below zero. For | ||||||
4 | tax years ending on or after December 31, 1985, the credit
| ||||||
5 | shall be allowed for the tax year in which the property is | ||||||
6 | placed in
service, or, if the amount of the credit exceeds | ||||||
7 | the tax liability for that
year, whether it exceeds the | ||||||
8 | original liability or the liability as later
amended, such | ||||||
9 | excess may be carried forward and applied to the tax
| ||||||
10 | liability of the 5 taxable years following the excess | ||||||
11 | credit year.
The credit shall be applied to the earliest | ||||||
12 | year for which there is a
liability. If there is credit | ||||||
13 | from more than one tax year that is available
to offset a | ||||||
14 | liability, the credit accruing first in time shall be | ||||||
15 | applied
first. | ||||||
16 | (2) The term qualified property means property which: | ||||||
17 | (A) is tangible, whether new or used, including | ||||||
18 | buildings and
structural components of buildings; | ||||||
19 | (B) is depreciable pursuant to Section 167 of the | ||||||
20 | Internal Revenue
Code, except that "3-year property" | ||||||
21 | as defined in Section 168(c)(2)(A) of
that Code is not | ||||||
22 | eligible for the credit provided by this subsection | ||||||
23 | (f); | ||||||
24 | (C) is acquired by purchase as defined in Section | ||||||
25 | 179(d) of
the Internal Revenue Code; | ||||||
26 | (D) is used in the Enterprise Zone or River Edge |
| |||||||
| |||||||
1 | Redevelopment Zone by the taxpayer; and | ||||||
2 | (E) has not been previously used in Illinois in | ||||||
3 | such a manner and by
such a person as would qualify for | ||||||
4 | the credit provided by this subsection
(f) or | ||||||
5 | subsection (e). | ||||||
6 | (3) The basis of qualified property shall be the basis | ||||||
7 | used to compute
the depreciation deduction for federal | ||||||
8 | income tax purposes. | ||||||
9 | (4) If the basis of the property for federal income | ||||||
10 | tax depreciation
purposes is increased after it has been | ||||||
11 | placed in service in the Enterprise
Zone or River Edge | ||||||
12 | Redevelopment Zone by the taxpayer, the amount of such | ||||||
13 | increase shall be deemed property
placed in service on the | ||||||
14 | date of such increase in basis. | ||||||
15 | (5) The term "placed in service" shall have the same | ||||||
16 | meaning as under
Section 46 of the Internal Revenue Code. | ||||||
17 | (6) If during any taxable year, any property ceases to | ||||||
18 | be qualified
property in the hands of the taxpayer within | ||||||
19 | 48 months after being placed
in service, or the situs of | ||||||
20 | any qualified property is moved outside the
Enterprise | ||||||
21 | Zone or River Edge Redevelopment Zone within 48 months | ||||||
22 | after being placed in service, the tax
imposed under | ||||||
23 | subsections (a) and (b) of this Section for such taxable | ||||||
24 | year
shall be increased. Such increase shall be determined | ||||||
25 | by (i) recomputing
the investment credit which would have | ||||||
26 | been allowed for the year in which
credit for such |
| |||||||
| |||||||
1 | property was originally allowed by eliminating such
| ||||||
2 | property from such computation, and (ii) subtracting such | ||||||
3 | recomputed credit
from the amount of credit previously | ||||||
4 | allowed. For the purposes of this
paragraph (6), a | ||||||
5 | reduction of the basis of qualified property resulting
| ||||||
6 | from a redetermination of the purchase price shall be | ||||||
7 | deemed a disposition
of qualified property to the extent | ||||||
8 | of such reduction. | ||||||
9 | (7) There shall be allowed an additional credit equal | ||||||
10 | to 0.5% of the basis of qualified property placed in | ||||||
11 | service during the taxable year in a River Edge | ||||||
12 | Redevelopment Zone, provided such property is placed in | ||||||
13 | service on or after July 1, 2006, and the taxpayer's base | ||||||
14 | employment within Illinois has increased by 1% or more | ||||||
15 | over the preceding year as determined by the taxpayer's | ||||||
16 | employment records filed with the Illinois Department of | ||||||
17 | Employment Security. Taxpayers who are new to Illinois | ||||||
18 | shall be deemed to have met the 1% growth in base | ||||||
19 | employment for the first year in which they file | ||||||
20 | employment records with the Illinois Department of | ||||||
21 | Employment Security. If, in any year, the increase in base | ||||||
22 | employment within Illinois over the preceding year is less | ||||||
23 | than 1%, the additional credit shall be limited to that | ||||||
24 | percentage times a fraction, the numerator of which is | ||||||
25 | 0.5% and the denominator of which is 1%, but shall not | ||||||
26 | exceed 0.5%.
|
| |||||||
| |||||||
1 | (8) For taxable years beginning on or after January 1, | ||||||
2 | 2021, there shall be allowed an Enterprise Zone | ||||||
3 | construction jobs credit against the taxes imposed under | ||||||
4 | subsections (a) and (b) of this Section as provided in | ||||||
5 | Section 13 of the Illinois Enterprise Zone Act. | ||||||
6 | The credit or credits may not reduce the taxpayer's | ||||||
7 | liability to less than zero. If the amount of the credit or | ||||||
8 | credits exceeds the taxpayer's liability, the excess may | ||||||
9 | be carried forward and applied against the taxpayer's | ||||||
10 | liability in succeeding calendar years in the same manner | ||||||
11 | provided under paragraph (4) of Section 211 of this Act. | ||||||
12 | The credit or credits shall be applied to the earliest | ||||||
13 | year for which there is a tax liability. If there are | ||||||
14 | credits from more than one taxable year that are available | ||||||
15 | to offset a liability, the earlier credit shall be applied | ||||||
16 | first. | ||||||
17 | For partners, shareholders of Subchapter S | ||||||
18 | corporations, and owners of limited liability companies, | ||||||
19 | if the liability company is treated as a partnership for | ||||||
20 | the purposes of federal and State income taxation, there | ||||||
21 | shall be allowed a credit under this Section to be | ||||||
22 | determined in accordance with the determination of income | ||||||
23 | and distributive share of income under Sections 702 and | ||||||
24 | 704 and Subchapter S of the Internal Revenue Code. | ||||||
25 | The total aggregate amount of credits awarded under | ||||||
26 | the Blue Collar Jobs Act (Article 20 of Public Act 101-9 |
| |||||||
| |||||||
1 | this amendatory Act of the 101st General Assembly ) shall | ||||||
2 | not exceed $20,000,000 in any State fiscal year . | ||||||
3 | This paragraph (8) is exempt from the provisions of | ||||||
4 | Section 250. | ||||||
5 | (g) (Blank). | ||||||
6 | (h) Investment credit; High Impact Business. | ||||||
7 | (1) Subject to subsections (b) and (b-5) of Section
| ||||||
8 | 5.5 of the Illinois Enterprise Zone Act, a taxpayer shall | ||||||
9 | be allowed a credit
against the tax imposed by subsections | ||||||
10 | (a) and (b) of this Section for
investment in qualified
| ||||||
11 | property which is placed in service by a Department of | ||||||
12 | Commerce and Economic Opportunity
designated High Impact | ||||||
13 | Business. The credit shall be .5% of the basis
for such | ||||||
14 | property. The credit shall not be available (i) until the | ||||||
15 | minimum
investments in qualified property set forth in | ||||||
16 | subdivision (a)(3)(A) of
Section 5.5 of the Illinois
| ||||||
17 | Enterprise Zone Act have been satisfied
or (ii) until the | ||||||
18 | time authorized in subsection (b-5) of the Illinois
| ||||||
19 | Enterprise Zone Act for entities designated as High Impact | ||||||
20 | Businesses under
subdivisions (a)(3)(B), (a)(3)(C), and | ||||||
21 | (a)(3)(D) of Section 5.5 of the Illinois
Enterprise Zone | ||||||
22 | Act, and shall not be allowed to the extent that it would
| ||||||
23 | reduce a taxpayer's liability for the tax imposed by | ||||||
24 | subsections (a) and (b) of
this Section to below zero. The | ||||||
25 | credit applicable to such investments shall be
taken in | ||||||
26 | the taxable year in which such investments have been |
| |||||||
| |||||||
1 | completed. The
credit for additional investments beyond | ||||||
2 | the minimum investment by a designated
high impact | ||||||
3 | business authorized under subdivision (a)(3)(A) of Section | ||||||
4 | 5.5 of
the Illinois Enterprise Zone Act shall be available | ||||||
5 | only in the taxable year in
which the property is placed in | ||||||
6 | service and shall not be allowed to the extent
that it | ||||||
7 | would reduce a taxpayer's liability for the tax imposed by | ||||||
8 | subsections
(a) and (b) of this Section to below zero.
For | ||||||
9 | tax years ending on or after December 31, 1987, the credit | ||||||
10 | shall be
allowed for the tax year in which the property is | ||||||
11 | placed in service, or, if
the amount of the credit exceeds | ||||||
12 | the tax liability for that year, whether
it exceeds the | ||||||
13 | original liability or the liability as later amended, such
| ||||||
14 | excess may be carried forward and applied to the tax | ||||||
15 | liability of the 5
taxable years following the excess | ||||||
16 | credit year. The credit shall be
applied to the earliest | ||||||
17 | year for which there is a liability. If there is
credit | ||||||
18 | from more than one tax year that is available to offset a | ||||||
19 | liability,
the credit accruing first in time shall be | ||||||
20 | applied first. | ||||||
21 | Changes made in this subdivision (h)(1) by Public Act | ||||||
22 | 88-670
restore changes made by Public Act 85-1182 and | ||||||
23 | reflect existing law. | ||||||
24 | (2) The term qualified property means property which: | ||||||
25 | (A) is tangible, whether new or used, including | ||||||
26 | buildings and
structural components of buildings; |
| |||||||
| |||||||
1 | (B) is depreciable pursuant to Section 167 of the | ||||||
2 | Internal Revenue
Code, except that "3-year property" | ||||||
3 | as defined in Section 168(c)(2)(A) of
that Code is not | ||||||
4 | eligible for the credit provided by this subsection | ||||||
5 | (h); | ||||||
6 | (C) is acquired by purchase as defined in Section | ||||||
7 | 179(d) of the
Internal Revenue Code; and | ||||||
8 | (D) is not eligible for the Enterprise Zone | ||||||
9 | Investment Credit provided
by subsection (f) of this | ||||||
10 | Section. | ||||||
11 | (3) The basis of qualified property shall be the basis | ||||||
12 | used to compute
the depreciation deduction for federal | ||||||
13 | income tax purposes. | ||||||
14 | (4) If the basis of the property for federal income | ||||||
15 | tax depreciation
purposes is increased after it has been | ||||||
16 | placed in service in a federally
designated Foreign Trade | ||||||
17 | Zone or Sub-Zone located in Illinois by the taxpayer,
the | ||||||
18 | amount of such increase shall be deemed property placed in | ||||||
19 | service on
the date of such increase in basis. | ||||||
20 | (5) The term "placed in service" shall have the same | ||||||
21 | meaning as under
Section 46 of the Internal Revenue Code. | ||||||
22 | (6) If during any taxable year ending on or before | ||||||
23 | December 31, 1996,
any property ceases to be qualified
| ||||||
24 | property in the hands of the taxpayer within 48 months | ||||||
25 | after being placed
in service, or the situs of any | ||||||
26 | qualified property is moved outside
Illinois within 48 |
| |||||||
| |||||||
1 | months after being placed in service, the tax imposed
| ||||||
2 | under subsections (a) and (b) of this Section for such | ||||||
3 | taxable year shall
be increased. Such increase shall be | ||||||
4 | determined by (i) recomputing the
investment credit which | ||||||
5 | would have been allowed for the year in which
credit for | ||||||
6 | such property was originally allowed by eliminating such
| ||||||
7 | property from such computation, and (ii) subtracting such | ||||||
8 | recomputed credit
from the amount of credit previously | ||||||
9 | allowed. For the purposes of this
paragraph (6), a | ||||||
10 | reduction of the basis of qualified property resulting
| ||||||
11 | from a redetermination of the purchase price shall be | ||||||
12 | deemed a disposition
of qualified property to the extent | ||||||
13 | of such reduction. | ||||||
14 | (7) Beginning with tax years ending after December 31, | ||||||
15 | 1996, if a
taxpayer qualifies for the credit under this | ||||||
16 | subsection (h) and thereby is
granted a tax abatement and | ||||||
17 | the taxpayer relocates its entire facility in
violation of | ||||||
18 | the explicit terms and length of the contract under | ||||||
19 | Section
18-183 of the Property Tax Code, the tax imposed | ||||||
20 | under subsections
(a) and (b) of this Section shall be | ||||||
21 | increased for the taxable year
in which the taxpayer | ||||||
22 | relocated its facility by an amount equal to the
amount of | ||||||
23 | credit received by the taxpayer under this subsection (h). | ||||||
24 | (h-5) High Impact Business construction constructions jobs | ||||||
25 | credit. For taxable years beginning on or after January 1, | ||||||
26 | 2021, there shall also be allowed a High Impact Business |
| |||||||
| |||||||
1 | construction jobs credit against the tax imposed under | ||||||
2 | subsections (a) and (b) of this Section as provided in | ||||||
3 | subsections (i) and (j) of Section 5.5 of the Illinois | ||||||
4 | Enterprise Zone Act. | ||||||
5 | The credit or credits may not reduce the taxpayer's | ||||||
6 | liability to less than zero. If the amount of the credit or | ||||||
7 | credits exceeds the taxpayer's liability, the excess may be | ||||||
8 | carried forward and applied against the taxpayer's liability | ||||||
9 | in succeeding calendar years in the manner provided under | ||||||
10 | paragraph (4) of Section 211 of this Act. The credit or credits | ||||||
11 | shall be applied to the earliest year for which there is a tax | ||||||
12 | liability. If there are credits from more than one taxable | ||||||
13 | year that are available to offset a liability, the earlier | ||||||
14 | credit shall be applied first. | ||||||
15 | For partners, shareholders of Subchapter S corporations, | ||||||
16 | and owners of limited liability companies, if the liability | ||||||
17 | company is treated as a partnership for the purposes of | ||||||
18 | federal and State income taxation, there shall be allowed a | ||||||
19 | credit under this Section to be determined in accordance with | ||||||
20 | the determination of income and distributive share of income | ||||||
21 | under Sections 702 and 704 and Subchapter S of the Internal | ||||||
22 | Revenue Code. | ||||||
23 | The total aggregate amount of credits awarded under the | ||||||
24 | Blue Collar Jobs Act (Article 20 of Public Act 101-9 this | ||||||
25 | amendatory Act of the 101st General Assembly ) shall not exceed | ||||||
26 | $20,000,000 in any State fiscal year . |
| |||||||
| |||||||
1 | This subsection (h-5) is exempt from the provisions of | ||||||
2 | Section 250. | ||||||
3 | (i) Credit for Personal Property Tax Replacement Income | ||||||
4 | Tax.
For tax years ending prior to December 31, 2003, a credit | ||||||
5 | shall be allowed
against the tax imposed by
subsections (a) | ||||||
6 | and (b) of this Section for the tax imposed by subsections (c)
| ||||||
7 | and (d) of this Section. This credit shall be computed by | ||||||
8 | multiplying the tax
imposed by subsections (c) and (d) of this | ||||||
9 | Section by a fraction, the numerator
of which is base income | ||||||
10 | allocable to Illinois and the denominator of which is
Illinois | ||||||
11 | base income, and further multiplying the product by the tax | ||||||
12 | rate
imposed by subsections (a) and (b) of this Section. | ||||||
13 | Any credit earned on or after December 31, 1986 under
this | ||||||
14 | subsection which is unused in the year
the credit is computed | ||||||
15 | because it exceeds the tax liability imposed by
subsections | ||||||
16 | (a) and (b) for that year (whether it exceeds the original
| ||||||
17 | liability or the liability as later amended) may be carried | ||||||
18 | forward and
applied to the tax liability imposed by | ||||||
19 | subsections (a) and (b) of the 5
taxable years following the | ||||||
20 | excess credit year, provided that no credit may
be carried | ||||||
21 | forward to any year ending on or
after December 31, 2003. This | ||||||
22 | credit shall be
applied first to the earliest year for which | ||||||
23 | there is a liability. If
there is a credit under this | ||||||
24 | subsection from more than one tax year that is
available to | ||||||
25 | offset a liability the earliest credit arising under this
| ||||||
26 | subsection shall be applied first. |
| |||||||
| |||||||
1 | If, during any taxable year ending on or after December | ||||||
2 | 31, 1986, the
tax imposed by subsections (c) and (d) of this | ||||||
3 | Section for which a taxpayer
has claimed a credit under this | ||||||
4 | subsection (i) is reduced, the amount of
credit for such tax | ||||||
5 | shall also be reduced. Such reduction shall be
determined by | ||||||
6 | recomputing the credit to take into account the reduced tax
| ||||||
7 | imposed by subsections (c) and (d). If any portion of the
| ||||||
8 | reduced amount of credit has been carried to a different | ||||||
9 | taxable year, an
amended return shall be filed for such | ||||||
10 | taxable year to reduce the amount of
credit claimed. | ||||||
11 | (j) Training expense credit. Beginning with tax years | ||||||
12 | ending on or
after December 31, 1986 and prior to December 31, | ||||||
13 | 2003, a taxpayer shall be
allowed a credit against the
tax | ||||||
14 | imposed by subsections (a) and (b) under this Section
for all | ||||||
15 | amounts paid or accrued, on behalf of all persons
employed by | ||||||
16 | the taxpayer in Illinois or Illinois residents employed
| ||||||
17 | outside of Illinois by a taxpayer, for educational or | ||||||
18 | vocational training in
semi-technical or technical fields or | ||||||
19 | semi-skilled or skilled fields, which
were deducted from gross | ||||||
20 | income in the computation of taxable income. The
credit | ||||||
21 | against the tax imposed by subsections (a) and (b) shall be | ||||||
22 | 1.6% of
such training expenses. For partners, shareholders of | ||||||
23 | subchapter S
corporations, and owners of limited liability | ||||||
24 | companies, if the liability
company is treated as a | ||||||
25 | partnership for purposes of federal and State income
taxation, | ||||||
26 | there shall be allowed a credit under this subsection (j) to be
|
| |||||||
| |||||||
1 | determined in accordance with the determination of income and | ||||||
2 | distributive
share of income under Sections 702 and 704 and | ||||||
3 | subchapter S of the Internal
Revenue Code. | ||||||
4 | Any credit allowed under this subsection which is unused | ||||||
5 | in the year
the credit is earned may be carried forward to each | ||||||
6 | of the 5 taxable
years following the year for which the credit | ||||||
7 | is first computed until it is
used. This credit shall be | ||||||
8 | applied first to the earliest year for which
there is a | ||||||
9 | liability. If there is a credit under this subsection from | ||||||
10 | more
than one tax year that is available to offset a liability , | ||||||
11 | the earliest
credit arising under this subsection shall be | ||||||
12 | applied first. No carryforward
credit may be claimed in any | ||||||
13 | tax year ending on or after
December 31, 2003. | ||||||
14 | (k) Research and development credit. For tax years ending | ||||||
15 | after July 1, 1990 and prior to
December 31, 2003, and | ||||||
16 | beginning again for tax years ending on or after December 31, | ||||||
17 | 2004, and ending prior to January 1, 2027, a taxpayer shall be
| ||||||
18 | allowed a credit against the tax imposed by subsections (a) | ||||||
19 | and (b) of this
Section for increasing research activities in | ||||||
20 | this State. The credit
allowed against the tax imposed by | ||||||
21 | subsections (a) and (b) shall be equal
to 6 1/2% of the | ||||||
22 | qualifying expenditures for increasing research activities
in | ||||||
23 | this State. For partners, shareholders of subchapter S | ||||||
24 | corporations, and
owners of limited liability companies, if | ||||||
25 | the liability company is treated as a
partnership for purposes | ||||||
26 | of federal and State income taxation, there shall be
allowed a |
| |||||||
| |||||||
1 | credit under this subsection to be determined in accordance | ||||||
2 | with the
determination of income and distributive share of | ||||||
3 | income under Sections 702 and
704 and subchapter S of the | ||||||
4 | Internal Revenue Code. | ||||||
5 | For purposes of this subsection, "qualifying expenditures" | ||||||
6 | means the
qualifying expenditures as defined for the federal | ||||||
7 | credit for increasing
research activities which would be | ||||||
8 | allowable under Section 41 of the
Internal Revenue Code and | ||||||
9 | which are conducted in this State, "qualifying
expenditures | ||||||
10 | for increasing research activities in this State" means the
| ||||||
11 | excess of qualifying expenditures for the taxable year in | ||||||
12 | which incurred
over qualifying expenditures for the base | ||||||
13 | period, "qualifying expenditures
for the base period" means | ||||||
14 | the average of the qualifying expenditures for
each year in | ||||||
15 | the base period, and "base period" means the 3 taxable years
| ||||||
16 | immediately preceding the taxable year for which the | ||||||
17 | determination is
being made. | ||||||
18 | Any credit in excess of the tax liability for the taxable | ||||||
19 | year
may be carried forward. A taxpayer may elect to have the
| ||||||
20 | unused credit shown on its final completed return carried over | ||||||
21 | as a credit
against the tax liability for the following 5 | ||||||
22 | taxable years or until it has
been fully used, whichever | ||||||
23 | occurs first; provided that no credit earned in a tax year | ||||||
24 | ending prior to December 31, 2003 may be carried forward to any | ||||||
25 | year ending on or after December 31, 2003. | ||||||
26 | If an unused credit is carried forward to a given year from |
| |||||||
| |||||||
1 | 2 or more
earlier years, that credit arising in the earliest | ||||||
2 | year will be applied
first against the tax liability for the | ||||||
3 | given year. If a tax liability for
the given year still | ||||||
4 | remains, the credit from the next earliest year will
then be | ||||||
5 | applied, and so on, until all credits have been used or no tax
| ||||||
6 | liability for the given year remains. Any remaining unused | ||||||
7 | credit or
credits then will be carried forward to the next | ||||||
8 | following year in which a
tax liability is incurred, except | ||||||
9 | that no credit can be carried forward to
a year which is more | ||||||
10 | than 5 years after the year in which the expense for
which the | ||||||
11 | credit is given was incurred. | ||||||
12 | No inference shall be drawn from Public Act 91-644 this | ||||||
13 | amendatory Act of the 91st General
Assembly in construing this | ||||||
14 | Section for taxable years beginning before January
1, 1999. | ||||||
15 | It is the intent of the General Assembly that the research | ||||||
16 | and development credit under this subsection (k) shall apply | ||||||
17 | continuously for all tax years ending on or after December 31, | ||||||
18 | 2004 and ending prior to January 1, 2027, including, but not | ||||||
19 | limited to, the period beginning on January 1, 2016 and ending | ||||||
20 | on July 6, 2017 ( the effective date of Public Act 100-22) this | ||||||
21 | amendatory Act of the 100th General Assembly . All actions | ||||||
22 | taken in reliance on the continuation of the credit under this | ||||||
23 | subsection (k) by any taxpayer are hereby validated. | ||||||
24 | (l) Environmental Remediation Tax Credit. | ||||||
25 | (i) For tax years ending after December 31, 1997 and | ||||||
26 | on or before
December 31, 2001, a taxpayer shall be |
| |||||||
| |||||||
1 | allowed a credit against the tax
imposed by subsections | ||||||
2 | (a) and (b) of this Section for certain amounts paid
for | ||||||
3 | unreimbursed eligible remediation costs, as specified in | ||||||
4 | this subsection.
For purposes of this Section, | ||||||
5 | "unreimbursed eligible remediation costs" means
costs | ||||||
6 | approved by the Illinois Environmental Protection Agency | ||||||
7 | ("Agency") under
Section 58.14 of the Environmental | ||||||
8 | Protection Act that were paid in performing
environmental | ||||||
9 | remediation at a site for which a No Further Remediation | ||||||
10 | Letter
was issued by the Agency and recorded under Section | ||||||
11 | 58.10 of the Environmental
Protection Act. The credit must | ||||||
12 | be claimed for the taxable year in which
Agency approval | ||||||
13 | of the eligible remediation costs is granted. The credit | ||||||
14 | is
not available to any taxpayer if the taxpayer or any | ||||||
15 | related party caused or
contributed to, in any material | ||||||
16 | respect, a release of regulated substances on,
in, or | ||||||
17 | under the site that was identified and addressed by the | ||||||
18 | remedial
action pursuant to the Site Remediation Program | ||||||
19 | of the Environmental Protection
Act. After the Pollution | ||||||
20 | Control Board rules are adopted pursuant to the
Illinois | ||||||
21 | Administrative Procedure Act for the administration and | ||||||
22 | enforcement of
Section 58.9 of the Environmental | ||||||
23 | Protection Act, determinations as to credit
availability | ||||||
24 | for purposes of this Section shall be made consistent with | ||||||
25 | those
rules. For purposes of this Section, "taxpayer" | ||||||
26 | includes a person whose tax
attributes the taxpayer has |
| |||||||
| |||||||
1 | succeeded to under Section 381 of the Internal
Revenue | ||||||
2 | Code and "related party" includes the persons disallowed a | ||||||
3 | deduction
for losses by paragraphs (b), (c), and (f)(1) of | ||||||
4 | Section 267 of the Internal
Revenue Code by virtue of | ||||||
5 | being a related taxpayer, as well as any of its
partners. | ||||||
6 | The credit allowed against the tax imposed by subsections | ||||||
7 | (a) and
(b) shall be equal to 25% of the unreimbursed | ||||||
8 | eligible remediation costs in
excess of $100,000 per site, | ||||||
9 | except that the $100,000 threshold shall not apply
to any | ||||||
10 | site contained in an enterprise zone as determined by the | ||||||
11 | Department of
Commerce and Community Affairs (now | ||||||
12 | Department of Commerce and Economic Opportunity). The | ||||||
13 | total credit allowed shall not exceed
$40,000 per year | ||||||
14 | with a maximum total of $150,000 per site. For partners | ||||||
15 | and
shareholders of subchapter S corporations, there shall | ||||||
16 | be allowed a credit
under this subsection to be determined | ||||||
17 | in accordance with the determination of
income and | ||||||
18 | distributive share of income under Sections 702 and 704 | ||||||
19 | and
subchapter S of the Internal Revenue Code. | ||||||
20 | (ii) A credit allowed under this subsection that is | ||||||
21 | unused in the year
the credit is earned may be carried | ||||||
22 | forward to each of the 5 taxable years
following the year | ||||||
23 | for which the credit is first earned until it is used.
The | ||||||
24 | term "unused credit" does not include any amounts of | ||||||
25 | unreimbursed eligible
remediation costs in excess of the | ||||||
26 | maximum credit per site authorized under
paragraph (i). |
| |||||||
| |||||||
1 | This credit shall be applied first to the earliest year
| ||||||
2 | for which there is a liability. If there is a credit under | ||||||
3 | this subsection
from more than one tax year that is | ||||||
4 | available to offset a liability, the
earliest credit | ||||||
5 | arising under this subsection shall be applied first. A
| ||||||
6 | credit allowed under this subsection may be sold to a | ||||||
7 | buyer as part of a sale
of all or part of the remediation | ||||||
8 | site for which the credit was granted. The
purchaser of a | ||||||
9 | remediation site and the tax credit shall succeed to the | ||||||
10 | unused
credit and remaining carry-forward period of the | ||||||
11 | seller. To perfect the
transfer, the assignor shall record | ||||||
12 | the transfer in the chain of title for the
site and provide | ||||||
13 | written notice to the Director of the Illinois Department | ||||||
14 | of
Revenue of the assignor's intent to sell the | ||||||
15 | remediation site and the amount of
the tax credit to be | ||||||
16 | transferred as a portion of the sale. In no event may a
| ||||||
17 | credit be transferred to any taxpayer if the taxpayer or a | ||||||
18 | related party would
not be eligible under the provisions | ||||||
19 | of subsection (i). | ||||||
20 | (iii) For purposes of this Section, the term "site" | ||||||
21 | shall have the same
meaning as under Section 58.2 of the | ||||||
22 | Environmental Protection Act. | ||||||
23 | (m) Education expense credit. Beginning with tax years | ||||||
24 | ending after
December 31, 1999, a taxpayer who
is the | ||||||
25 | custodian of one or more qualifying pupils shall be allowed a | ||||||
26 | credit
against the tax imposed by subsections (a) and (b) of |
| |||||||
| |||||||
1 | this Section for
qualified education expenses incurred on | ||||||
2 | behalf of the qualifying pupils.
The credit shall be equal to | ||||||
3 | 25% of qualified education expenses, but in no
event may the | ||||||
4 | total credit under this subsection claimed by a
family that is | ||||||
5 | the
custodian of qualifying pupils exceed (i) $500 for tax | ||||||
6 | years ending prior to December 31, 2017, and (ii) $750 for tax | ||||||
7 | years ending on or after December 31, 2017. In no event shall a | ||||||
8 | credit under
this subsection reduce the taxpayer's liability | ||||||
9 | under this Act to less than
zero. Notwithstanding any other | ||||||
10 | provision of law, for taxable years beginning on or after | ||||||
11 | January 1, 2017, no taxpayer may claim a credit under this | ||||||
12 | subsection (m) if the taxpayer's adjusted gross income for the | ||||||
13 | taxable year exceeds (i) $500,000, in the case of spouses | ||||||
14 | filing a joint federal tax return or (ii) $250,000, in the case | ||||||
15 | of all other taxpayers. This subsection is exempt from the | ||||||
16 | provisions of Section 250 of this
Act. | ||||||
17 | For purposes of this subsection: | ||||||
18 | "Qualifying pupils" means individuals who (i) are | ||||||
19 | residents of the State of
Illinois, (ii) are under the age of | ||||||
20 | 21 at the close of the school year for
which a credit is | ||||||
21 | sought, and (iii) during the school year for which a credit
is | ||||||
22 | sought were full-time pupils enrolled in a kindergarten | ||||||
23 | through twelfth
grade education program at any school, as | ||||||
24 | defined in this subsection. | ||||||
25 | "Qualified education expense" means the amount incurred
on | ||||||
26 | behalf of a qualifying pupil in excess of $250 for tuition, |
| |||||||
| |||||||
1 | book fees, and
lab fees at the school in which the pupil is | ||||||
2 | enrolled during the regular school
year. | ||||||
3 | "School" means any public or nonpublic elementary or | ||||||
4 | secondary school in
Illinois that is in compliance with Title | ||||||
5 | VI of the Civil Rights Act of 1964
and attendance at which | ||||||
6 | satisfies the requirements of Section 26-1 of the
School Code, | ||||||
7 | except that nothing shall be construed to require a child to
| ||||||
8 | attend any particular public or nonpublic school to qualify | ||||||
9 | for the credit
under this Section. | ||||||
10 | "Custodian" means, with respect to qualifying pupils, an | ||||||
11 | Illinois resident
who is a parent, the parents, a legal | ||||||
12 | guardian, or the legal guardians of the
qualifying pupils. | ||||||
13 | (n) River Edge Redevelopment Zone site remediation tax | ||||||
14 | credit.
| ||||||
15 | (i) For tax years ending on or after December 31, | ||||||
16 | 2006, a taxpayer shall be allowed a credit against the tax | ||||||
17 | imposed by subsections (a) and (b) of this Section for | ||||||
18 | certain amounts paid for unreimbursed eligible remediation | ||||||
19 | costs, as specified in this subsection. For purposes of | ||||||
20 | this Section, "unreimbursed eligible remediation costs" | ||||||
21 | means costs approved by the Illinois Environmental | ||||||
22 | Protection Agency ("Agency") under Section 58.14a of the | ||||||
23 | Environmental Protection Act that were paid in performing | ||||||
24 | environmental remediation at a site within a River Edge | ||||||
25 | Redevelopment Zone for which a No Further Remediation | ||||||
26 | Letter was issued by the Agency and recorded under Section |
| |||||||
| |||||||
1 | 58.10 of the Environmental Protection Act. The credit must | ||||||
2 | be claimed for the taxable year in which Agency approval | ||||||
3 | of the eligible remediation costs is granted. The credit | ||||||
4 | is not available to any taxpayer if the taxpayer or any | ||||||
5 | related party caused or contributed to, in any material | ||||||
6 | respect, a release of regulated substances on, in, or | ||||||
7 | under the site that was identified and addressed by the | ||||||
8 | remedial action pursuant to the Site Remediation Program | ||||||
9 | of the Environmental Protection Act. Determinations as to | ||||||
10 | credit availability for purposes of this Section shall be | ||||||
11 | made consistent with rules adopted by the Pollution | ||||||
12 | Control Board pursuant to the Illinois Administrative | ||||||
13 | Procedure Act for the administration and enforcement of | ||||||
14 | Section 58.9 of the Environmental Protection Act. For | ||||||
15 | purposes of this Section, "taxpayer" includes a person | ||||||
16 | whose tax attributes the taxpayer has succeeded to under | ||||||
17 | Section 381 of the Internal Revenue Code and "related | ||||||
18 | party" includes the persons disallowed a deduction for | ||||||
19 | losses by paragraphs (b), (c), and (f)(1) of Section 267 | ||||||
20 | of the Internal Revenue Code by virtue of being a related | ||||||
21 | taxpayer, as well as any of its partners. The credit | ||||||
22 | allowed against the tax imposed by subsections (a) and (b) | ||||||
23 | shall be equal to 25% of the unreimbursed eligible | ||||||
24 | remediation costs in excess of $100,000 per site. | ||||||
25 | (ii) A credit allowed under this subsection that is | ||||||
26 | unused in the year the credit is earned may be carried |
| |||||||
| |||||||
1 | forward to each of the 5 taxable years following the year | ||||||
2 | for which the credit is first earned until it is used. This | ||||||
3 | credit shall be applied first to the earliest year for | ||||||
4 | which there is a liability. If there is a credit under this | ||||||
5 | subsection from more than one tax year that is available | ||||||
6 | to offset a liability, the earliest credit arising under | ||||||
7 | this subsection shall be applied first. A credit allowed | ||||||
8 | under this subsection may be sold to a buyer as part of a | ||||||
9 | sale of all or part of the remediation site for which the | ||||||
10 | credit was granted. The purchaser of a remediation site | ||||||
11 | and the tax credit shall succeed to the unused credit and | ||||||
12 | remaining carry-forward period of the seller. To perfect | ||||||
13 | the transfer, the assignor shall record the transfer in | ||||||
14 | the chain of title for the site and provide written notice | ||||||
15 | to the Director of the Illinois Department of Revenue of | ||||||
16 | the assignor's intent to sell the remediation site and the | ||||||
17 | amount of the tax credit to be transferred as a portion of | ||||||
18 | the sale. In no event may a credit be transferred to any | ||||||
19 | taxpayer if the taxpayer or a related party would not be | ||||||
20 | eligible under the provisions of subsection (i). | ||||||
21 | (iii) For purposes of this Section, the term "site" | ||||||
22 | shall have the same meaning as under Section 58.2 of the | ||||||
23 | Environmental Protection Act. | ||||||
24 | (o) For each of taxable years during the Compassionate Use | ||||||
25 | of Medical Cannabis Program, a surcharge is imposed on all | ||||||
26 | taxpayers on income arising from the sale or exchange of |
| |||||||
| |||||||
1 | capital assets, depreciable business property, real property | ||||||
2 | used in the trade or business, and Section 197 intangibles of | ||||||
3 | an organization registrant under the Compassionate Use of | ||||||
4 | Medical Cannabis Program Act. The amount of the surcharge is | ||||||
5 | equal to the amount of federal income tax liability for the | ||||||
6 | taxable year attributable to those sales and exchanges. The | ||||||
7 | surcharge imposed does not apply if: | ||||||
8 | (1) the medical cannabis cultivation center | ||||||
9 | registration, medical cannabis dispensary registration, or | ||||||
10 | the property of a registration is transferred as a result | ||||||
11 | of any of the following: | ||||||
12 | (A) bankruptcy, a receivership, or a debt | ||||||
13 | adjustment initiated by or against the initial | ||||||
14 | registration or the substantial owners of the initial | ||||||
15 | registration; | ||||||
16 | (B) cancellation, revocation, or termination of | ||||||
17 | any registration by the Illinois Department of Public | ||||||
18 | Health; | ||||||
19 | (C) a determination by the Illinois Department of | ||||||
20 | Public Health that transfer of the registration is in | ||||||
21 | the best interests of Illinois qualifying patients as | ||||||
22 | defined by the Compassionate Use of Medical Cannabis | ||||||
23 | Program Act; | ||||||
24 | (D) the death of an owner of the equity interest in | ||||||
25 | a registrant; | ||||||
26 | (E) the acquisition of a controlling interest in |
| |||||||
| |||||||
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 registration when the registration was issued; | ||||||
8 | or | ||||||
9 | (2) the cannabis cultivation center registration, | ||||||
10 | medical cannabis dispensary registration, or the | ||||||
11 | controlling interest in a registrant's property is | ||||||
12 | transferred in a transaction to lineal descendants in | ||||||
13 | which no gain or loss is recognized or as a result of a | ||||||
14 | transaction in accordance with Section 351 of the Internal | ||||||
15 | Revenue Code in which no gain or loss is recognized. | ||||||
16 | (p) Pass-through entity tax. | ||||||
17 | (1) For taxable years ending on or after December 31, | ||||||
18 | 2021 and beginning prior to January 1, 2026, a partnership | ||||||
19 | (other than a publicly traded partnership under Section | ||||||
20 | 7704 of the Internal Revenue Code) or Subchapter S | ||||||
21 | corporation may elect to apply the provisions of this | ||||||
22 | subsection. A separate election shall be made for each | ||||||
23 | taxable year. Such election shall be made at such time, | ||||||
24 | and in such form and manner as prescribed by the | ||||||
25 | Department, and, once made, is irrevocable. | ||||||
26 | (2) Entity-level tax. A partnership or Subchapter S |
| |||||||
| |||||||
1 | corporation electing to apply the provisions of this | ||||||
2 | subsection shall be subject to a tax for the privilege of | ||||||
3 | earning or receiving income in this State in an amount | ||||||
4 | equal to 4.95% of the taxpayer's net income for the | ||||||
5 | taxable year. | ||||||
6 | (3) Net income defined. | ||||||
7 | (A) In general. For purposes of paragraph (2), the | ||||||
8 | term net income has the same meaning as defined in | ||||||
9 | Section 202 of this Act, except that the following | ||||||
10 | provisions shall not apply: | ||||||
11 | (i) the standard exemption allowed under | ||||||
12 | Section 204; | ||||||
13 | (ii) the deduction for net losses allowed | ||||||
14 | under Section 207; | ||||||
15 | (iii) in the case of an S corporation, the | ||||||
16 | modification under Section 203(b)(2)(S); and | ||||||
17 | (iv) in the case of a partnership, the | ||||||
18 | modifications under Section 203(d)(2)(H) and | ||||||
19 | Section 203(d)(2)(I). | ||||||
20 | (B) Special rule for tiered partnerships. If a | ||||||
21 | taxpayer making the election under paragraph (1) is a | ||||||
22 | partner of another taxpayer making the election under | ||||||
23 | paragraph (1), net income shall be computed as | ||||||
24 | provided in subparagraph (A), except that the taxpayer | ||||||
25 | shall subtract its distributive share of the net | ||||||
26 | income of the electing partnership (including its |
| |||||||
| |||||||
1 | distributive share of the net income of the electing | ||||||
2 | partnership derived as a distributive share from | ||||||
3 | electing partnerships in which it is a partner). | ||||||
4 | (4) Credit for entity level tax. Each partner or | ||||||
5 | shareholder of a taxpayer making the election under this | ||||||
6 | Section shall be allowed a credit against the tax imposed | ||||||
7 | under subsections (a) and (b) of Section 201 of this Act | ||||||
8 | for the taxable year of the partnership or Subchapter S | ||||||
9 | corporation for which an election is in effect ending | ||||||
10 | within or with the taxable year of the partner or | ||||||
11 | shareholder in an amount equal to 4.95% times the partner | ||||||
12 | or shareholder's distributive share of the net income of | ||||||
13 | the electing partnership or Subchapter S corporation, but | ||||||
14 | not to exceed the partner's or shareholder's share of the | ||||||
15 | tax imposed under paragraph (1) which is actually paid by | ||||||
16 | the partnership or Subchapter S corporation. If the | ||||||
17 | taxpayer is a partnership or Subchapter S corporation that | ||||||
18 | is itself a partner of a partnership making the election | ||||||
19 | under paragraph (1), the credit under this paragraph shall | ||||||
20 | be allowed to the taxpayer's partners or shareholders (or | ||||||
21 | if the partner is a partnership or Subchapter S | ||||||
22 | corporation then its partners or shareholders) in | ||||||
23 | 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. If the | ||||||
26 | amount of the credit allowed under this paragraph exceeds |
| |||||||
| |||||||
1 | the partner's or shareholder's liability for tax imposed | ||||||
2 | under subsections (a) and (b) of Section 201 of this Act | ||||||
3 | for the taxable year, such excess shall be treated as an | ||||||
4 | overpayment for purposes of Section 909 of this Act. | ||||||
5 | (5) Nonresidents. A nonresident individual who is a | ||||||
6 | partner or shareholder of a partnership or Subchapter S | ||||||
7 | corporation for a taxable year for which an election is in | ||||||
8 | effect under paragraph (1) shall not be required to file | ||||||
9 | an income tax return under this Act for such taxable year | ||||||
10 | if the only source of net income of the individual (or the | ||||||
11 | individual and the individual's spouse in the case of a | ||||||
12 | joint return) is from an entity making the election under | ||||||
13 | paragraph (1) and the credit allowed to the partner or | ||||||
14 | shareholder under paragraph (4) equals or exceeds the | ||||||
15 | individual's liability for the tax imposed under | ||||||
16 | subsections (a) and (b) of Section 201 of this Act for the | ||||||
17 | taxable year. | ||||||
18 | (6) Liability for tax. Except as provided in this | ||||||
19 | paragraph, a partnership or Subchapter S making the | ||||||
20 | election under paragraph (1) is liable for the | ||||||
21 | entity-level tax imposed under paragraph (2). If the | ||||||
22 | electing partnership or corporation fails to pay the full | ||||||
23 | amount of tax deemed assessed under paragraph (2), the | ||||||
24 | partners or shareholders shall be liable to pay the tax | ||||||
25 | assessed (including penalties and interest). Each partner | ||||||
26 | or shareholder shall be liable for the unpaid assessment |
| |||||||
| |||||||
1 | based on the ratio of the partner's or shareholder's share | ||||||
2 | of the net income of the partnership over the total net | ||||||
3 | income of the partnership. If the partnership or | ||||||
4 | Subchapter S corporation fails to pay the tax assessed | ||||||
5 | (including penalties and interest) and thereafter an | ||||||
6 | amount of such tax is paid by the partners or | ||||||
7 | shareholders, such amount shall not be collected from the | ||||||
8 | partnership or corporation. | ||||||
9 | (7) Foreign tax. For purposes of the credit allowed | ||||||
10 | under Section 601(b)(3) of this Act, tax paid by a | ||||||
11 | partnership or Subchapter S corporation to another state | ||||||
12 | which, as determined by the Department, is substantially | ||||||
13 | similar to the tax imposed under this subsection, shall be | ||||||
14 | considered tax paid by the partner or shareholder to the | ||||||
15 | extent that the partner's or shareholder's share of the | ||||||
16 | income of the partnership or Subchapter S corporation | ||||||
17 | allocated and apportioned to such other state bears to the | ||||||
18 | total income of the partnership or Subchapter S | ||||||
19 | corporation allocated or apportioned to such other state. | ||||||
20 | (8) Suspension of withholding. The provisions of | ||||||
21 | Section 709.5 of this Act shall not apply to a partnership | ||||||
22 | or Subchapter S corporation for the taxable year for which | ||||||
23 | an election under paragraph (1) is in effect. | ||||||
24 | (9) Requirement to pay estimated tax. For each taxable | ||||||
25 | year for which an election under paragraph (1) is in | ||||||
26 | effect, a partnership or Subchapter S corporation is |
| |||||||
| |||||||
1 | required to pay estimated tax for such taxable year under | ||||||
2 | Sections 803 and 804 of this Act if the amount payable as | ||||||
3 | estimated tax can reasonably be expected to exceed $500. | ||||||
4 | (10) The provisions of this subsection shall apply | ||||||
5 | only with respect to taxable years for which the | ||||||
6 | limitation on individual deductions applies under Section | ||||||
7 | 164(b)(6) of the Internal Revenue Code. | ||||||
8 | (Source: P.A. 100-22, eff. 7-6-17; 101-8, see Section 99 for | ||||||
9 | effective date; 101-9, eff. 6-5-19; 101-31, eff. 6-28-19; | ||||||
10 | 101-207, eff. 8-2-19; 101-363, eff. 8-9-19; revised 11-18-20.) | ||||||
11 | (35 ILCS 5/203) (from Ch. 120, par. 2-203) | ||||||
12 | Sec. 203. Base income defined. | ||||||
13 | (a) Individuals. | ||||||
14 | (1) In general. In the case of an individual, base | ||||||
15 | income means an
amount equal to the taxpayer's adjusted | ||||||
16 | gross income for the taxable
year as modified by paragraph | ||||||
17 | (2). | ||||||
18 | (2) Modifications. The adjusted gross income referred | ||||||
19 | to in
paragraph (1) shall be modified by adding thereto | ||||||
20 | the sum of the
following amounts: | ||||||
21 | (A) An amount equal to all amounts paid or accrued | ||||||
22 | to the taxpayer
as interest or dividends during the | ||||||
23 | taxable year to the extent excluded
from gross income | ||||||
24 | in the computation of adjusted gross income, except | ||||||
25 | stock
dividends of qualified public utilities |
| |||||||
| |||||||
1 | described in Section 305(e) of the
Internal Revenue | ||||||
2 | Code; | ||||||
3 | (B) An amount equal to the amount of tax imposed by | ||||||
4 | this Act to the
extent deducted from gross income in | ||||||
5 | the computation of adjusted gross
income for the | ||||||
6 | taxable year; | ||||||
7 | (C) An amount equal to the amount received during | ||||||
8 | the taxable year
as a recovery or refund of real | ||||||
9 | property taxes paid with respect to the
taxpayer's | ||||||
10 | principal residence under the Revenue Act of
1939 and | ||||||
11 | for which a deduction was previously taken under | ||||||
12 | subparagraph (L) of
this paragraph (2) prior to July | ||||||
13 | 1, 1991, the retrospective application date of
Article | ||||||
14 | 4 of Public Act 87-17. In the case of multi-unit or | ||||||
15 | multi-use
structures and farm dwellings, the taxes on | ||||||
16 | the taxpayer's principal residence
shall be that | ||||||
17 | portion of the total taxes for the entire property | ||||||
18 | which is
attributable to such principal residence; | ||||||
19 | (D) An amount equal to the amount of the capital | ||||||
20 | gain deduction
allowable under the Internal Revenue | ||||||
21 | Code, to the extent deducted from gross
income in the | ||||||
22 | computation of adjusted gross income; | ||||||
23 | (D-5) An amount, to the extent not included in | ||||||
24 | adjusted gross income,
equal to the amount of money | ||||||
25 | withdrawn by the taxpayer in the taxable year from
a | ||||||
26 | medical care savings account and the interest earned |
| |||||||
| |||||||
1 | on the account in the
taxable year of a withdrawal | ||||||
2 | pursuant to subsection (b) of Section 20 of the
| ||||||
3 | Medical Care Savings Account Act or subsection (b) of | ||||||
4 | Section 20 of the
Medical Care Savings Account Act of | ||||||
5 | 2000; | ||||||
6 | (D-10) For taxable years ending after December 31, | ||||||
7 | 1997, an
amount equal to any eligible remediation | ||||||
8 | costs that the individual
deducted in computing | ||||||
9 | adjusted gross income and for which the
individual | ||||||
10 | claims a credit under subsection (l) of Section 201; | ||||||
11 | (D-15) For taxable years 2001 and thereafter, an | ||||||
12 | amount equal to the
bonus depreciation deduction taken | ||||||
13 | on the taxpayer's federal income tax return for the | ||||||
14 | taxable
year under subsection (k) of Section 168 of | ||||||
15 | the Internal Revenue Code; | ||||||
16 | (D-16) If the taxpayer sells, transfers, abandons, | ||||||
17 | or otherwise disposes of property for which the | ||||||
18 | taxpayer was required in any taxable year to
make an | ||||||
19 | addition modification under subparagraph (D-15), then | ||||||
20 | an amount equal
to the aggregate amount of the | ||||||
21 | deductions taken in all taxable
years under | ||||||
22 | subparagraph (Z) with respect to that property. | ||||||
23 | If the taxpayer continues to own property through | ||||||
24 | the last day of the last tax year for which the | ||||||
25 | taxpayer may claim a depreciation deduction for | ||||||
26 | federal income tax purposes and for which the taxpayer |
| |||||||
| |||||||
1 | was allowed in any taxable year to make a subtraction | ||||||
2 | modification under subparagraph (Z), then an amount | ||||||
3 | equal to that subtraction modification.
| ||||||
4 | The taxpayer is required to make the addition | ||||||
5 | modification under this
subparagraph
only once with | ||||||
6 | respect to any one piece of property; | ||||||
7 | (D-17) An amount equal to the amount otherwise | ||||||
8 | allowed as a deduction in computing base income for | ||||||
9 | interest paid, accrued, or incurred, directly or | ||||||
10 | indirectly, (i) for taxable years ending on or after | ||||||
11 | December 31, 2004, to a foreign person who would be a | ||||||
12 | member of the same unitary business group but for the | ||||||
13 | fact that foreign person's business activity outside | ||||||
14 | the United States is 80% or more of the foreign | ||||||
15 | person's total business activity and (ii) for taxable | ||||||
16 | years ending on or after December 31, 2008, to a person | ||||||
17 | who would be a member of the same unitary business | ||||||
18 | group but for the fact that the person is prohibited | ||||||
19 | under Section 1501(a)(27) from being included in the | ||||||
20 | unitary business group because he or she is ordinarily | ||||||
21 | required to apportion business income under different | ||||||
22 | subsections of Section 304. The addition modification | ||||||
23 | required by this subparagraph shall be reduced to the | ||||||
24 | extent that dividends were included in base income of | ||||||
25 | the unitary group for the same taxable year and | ||||||
26 | received by the taxpayer or by a member of the |
| |||||||
| |||||||
1 | taxpayer's unitary business group (including amounts | ||||||
2 | included in gross income under Sections 951 through | ||||||
3 | 964 of the Internal Revenue Code and amounts included | ||||||
4 | in gross income under Section 78 of the Internal | ||||||
5 | Revenue Code) with respect to the stock of the same | ||||||
6 | person to whom the interest was paid, accrued, or | ||||||
7 | incurred. | ||||||
8 | This paragraph shall not apply to the following:
| ||||||
9 | (i) an item of interest paid, accrued, or | ||||||
10 | incurred, directly or indirectly, to a person who | ||||||
11 | is subject in a foreign country or state, other | ||||||
12 | than a state which requires mandatory unitary | ||||||
13 | reporting, to a tax on or measured by net income | ||||||
14 | with respect to such interest; or | ||||||
15 | (ii) an item of interest paid, accrued, or | ||||||
16 | incurred, directly or indirectly, to a person if | ||||||
17 | the taxpayer can establish, based on a | ||||||
18 | preponderance of the evidence, both of the | ||||||
19 | following: | ||||||
20 | (a) the person, during the same taxable | ||||||
21 | year, paid, accrued, or incurred, the interest | ||||||
22 | to a person that is not a related member, and | ||||||
23 | (b) the transaction giving rise to the | ||||||
24 | interest expense between the taxpayer and the | ||||||
25 | person did not have as a principal purpose the | ||||||
26 | avoidance of Illinois income tax, and is paid |
| |||||||
| |||||||
1 | pursuant to a contract or agreement that | ||||||
2 | reflects an arm's-length interest rate and | ||||||
3 | terms; or
| ||||||
4 | (iii) the taxpayer can establish, based on | ||||||
5 | clear and convincing evidence, that the interest | ||||||
6 | paid, accrued, or incurred relates to a contract | ||||||
7 | or agreement entered into at arm's-length rates | ||||||
8 | and terms and the principal purpose for the | ||||||
9 | payment is not federal or Illinois tax avoidance; | ||||||
10 | or
| ||||||
11 | (iv) an item of interest paid, accrued, or | ||||||
12 | incurred, directly or indirectly, to a person if | ||||||
13 | the taxpayer establishes by clear and convincing | ||||||
14 | evidence that the adjustments are unreasonable; or | ||||||
15 | if the taxpayer and the Director agree in writing | ||||||
16 | to the application or use of an alternative method | ||||||
17 | of apportionment under Section 304(f).
| ||||||
18 | Nothing in this subsection shall preclude the | ||||||
19 | Director from making any other adjustment | ||||||
20 | otherwise allowed under Section 404 of this Act | ||||||
21 | for any tax year beginning after the effective | ||||||
22 | date of this amendment provided such adjustment is | ||||||
23 | made pursuant to regulation adopted by the | ||||||
24 | Department and such regulations provide methods | ||||||
25 | and standards by which the Department will utilize | ||||||
26 | its authority under Section 404 of this Act;
|
| |||||||
| |||||||
1 | (D-18) An amount equal to the amount of intangible | ||||||
2 | expenses and costs otherwise allowed as a deduction in | ||||||
3 | computing base income, and that were paid, accrued, or | ||||||
4 | incurred, directly or indirectly, (i) for taxable | ||||||
5 | years ending on or after December 31, 2004, to a | ||||||
6 | foreign person who would be a member of the same | ||||||
7 | unitary business group but for the fact that the | ||||||
8 | foreign person's business activity outside the United | ||||||
9 | States is 80% or more of that person's total business | ||||||
10 | activity and (ii) for taxable years ending on or after | ||||||
11 | December 31, 2008, to a person who would be a member of | ||||||
12 | the same unitary business group but for the fact that | ||||||
13 | the person is prohibited under Section 1501(a)(27) | ||||||
14 | from being included in the unitary business group | ||||||
15 | because he or she is ordinarily required to apportion | ||||||
16 | business income under different subsections of Section | ||||||
17 | 304. The addition modification required by this | ||||||
18 | subparagraph shall be reduced to the extent that | ||||||
19 | dividends were included in base income of the unitary | ||||||
20 | group for the same taxable year and received by the | ||||||
21 | taxpayer or by a member of the taxpayer's unitary | ||||||
22 | business group (including amounts included in gross | ||||||
23 | income under Sections 951 through 964 of the Internal | ||||||
24 | Revenue Code and amounts included in gross income | ||||||
25 | under Section 78 of the Internal Revenue Code) with | ||||||
26 | respect to the stock of the same person to whom the |
| |||||||
| |||||||
1 | intangible expenses and costs were directly or | ||||||
2 | indirectly paid, incurred, or accrued. The preceding | ||||||
3 | sentence does not apply to the extent that the same | ||||||
4 | dividends caused a reduction to the addition | ||||||
5 | modification required under Section 203(a)(2)(D-17) of | ||||||
6 | this Act. As used in this subparagraph, the term | ||||||
7 | "intangible expenses and costs" includes (1) expenses, | ||||||
8 | losses, and costs for, or related to, the direct or | ||||||
9 | indirect acquisition, use, maintenance or management, | ||||||
10 | ownership, sale, exchange, or any other disposition of | ||||||
11 | intangible property; (2) losses incurred, directly or | ||||||
12 | indirectly, from factoring transactions or discounting | ||||||
13 | transactions; (3) royalty, patent, technical, and | ||||||
14 | copyright fees; (4) licensing fees; and (5) other | ||||||
15 | similar expenses and costs.
For purposes of this | ||||||
16 | subparagraph, "intangible property" includes patents, | ||||||
17 | patent applications, trade names, trademarks, service | ||||||
18 | marks, copyrights, mask works, trade secrets, and | ||||||
19 | similar types of intangible assets. | ||||||
20 | This paragraph shall not apply to the following: | ||||||
21 | (i) any item of intangible expenses or costs | ||||||
22 | paid, accrued, or incurred, directly or | ||||||
23 | indirectly, from a transaction with a person who | ||||||
24 | is subject in a foreign country or state, other | ||||||
25 | than a state which requires mandatory unitary | ||||||
26 | reporting, to a tax on or measured by net income |
| |||||||
| |||||||
1 | with respect to such item; or | ||||||
2 | (ii) any item of intangible expense or cost | ||||||
3 | paid, accrued, or incurred, directly or | ||||||
4 | indirectly, if the taxpayer can establish, based | ||||||
5 | on a preponderance of the evidence, both of the | ||||||
6 | following: | ||||||
7 | (a) the person during the same taxable | ||||||
8 | year paid, accrued, or incurred, the | ||||||
9 | intangible expense or cost to a person that is | ||||||
10 | not a related member, and | ||||||
11 | (b) the transaction giving rise to the | ||||||
12 | intangible expense or cost between the | ||||||
13 | taxpayer and the person did not have as a | ||||||
14 | principal purpose the avoidance of Illinois | ||||||
15 | income tax, and is paid pursuant to a contract | ||||||
16 | or agreement that reflects arm's-length terms; | ||||||
17 | or | ||||||
18 | (iii) any item of intangible expense or cost | ||||||
19 | paid, accrued, or incurred, directly or | ||||||
20 | indirectly, from a transaction with a person if | ||||||
21 | the taxpayer establishes by clear and convincing | ||||||
22 | evidence, that the adjustments are unreasonable; | ||||||
23 | or if the taxpayer and the Director agree in | ||||||
24 | writing to the application or use of an | ||||||
25 | alternative method of apportionment under Section | ||||||
26 | 304(f);
|
| |||||||
| |||||||
1 | Nothing in this subsection shall preclude the | ||||||
2 | Director from making any other adjustment | ||||||
3 | otherwise allowed under Section 404 of this Act | ||||||
4 | for any tax year beginning after the effective | ||||||
5 | date of this amendment provided such adjustment is | ||||||
6 | made pursuant to regulation adopted by the | ||||||
7 | Department and such regulations provide methods | ||||||
8 | and standards by which the Department will utilize | ||||||
9 | its authority under Section 404 of this Act;
| ||||||
10 | (D-19) For taxable years ending on or after | ||||||
11 | December 31, 2008, an amount equal to the amount of | ||||||
12 | insurance premium expenses and costs otherwise allowed | ||||||
13 | as a deduction in computing base income, and that were | ||||||
14 | paid, accrued, or incurred, directly or indirectly, to | ||||||
15 | a person who would be a member of the same unitary | ||||||
16 | business group but for the fact that the person is | ||||||
17 | prohibited under Section 1501(a)(27) from being | ||||||
18 | included in the unitary business group because he or | ||||||
19 | she is ordinarily required to apportion business | ||||||
20 | income under different subsections of Section 304. The | ||||||
21 | addition modification required by this subparagraph | ||||||
22 | shall be reduced to the extent that dividends were | ||||||
23 | included in base income of the unitary group for the | ||||||
24 | same taxable year and received by the taxpayer or by a | ||||||
25 | member of the taxpayer's unitary business group | ||||||
26 | (including amounts included in gross income under |
| |||||||
| |||||||
1 | Sections 951 through 964 of the Internal Revenue Code | ||||||
2 | and amounts included in gross income under Section 78 | ||||||
3 | of the Internal Revenue Code) with respect to the | ||||||
4 | stock of the same person to whom the premiums and costs | ||||||
5 | were directly or indirectly paid, incurred, or | ||||||
6 | accrued. The preceding sentence does not apply to the | ||||||
7 | extent that the same dividends caused a reduction to | ||||||
8 | the addition modification required under Section | ||||||
9 | 203(a)(2)(D-17) or Section 203(a)(2)(D-18) of this | ||||||
10 | Act ; .
| ||||||
11 | (D-20) For taxable years beginning on or after | ||||||
12 | January 1,
2002 and ending on or before December 31, | ||||||
13 | 2006, in
the
case of a distribution from a qualified | ||||||
14 | tuition program under Section 529 of
the Internal | ||||||
15 | Revenue Code, other than (i) a distribution from a | ||||||
16 | College Savings
Pool created under Section 16.5 of the | ||||||
17 | State Treasurer Act or (ii) a
distribution from the | ||||||
18 | Illinois Prepaid Tuition Trust Fund, an amount equal | ||||||
19 | to
the amount excluded from gross income under Section | ||||||
20 | 529(c)(3)(B). For taxable years beginning on or after | ||||||
21 | January 1, 2007, in the case of a distribution from a | ||||||
22 | qualified tuition program under Section 529 of the | ||||||
23 | Internal Revenue Code, other than (i) a distribution | ||||||
24 | from a College Savings Pool created under Section 16.5 | ||||||
25 | of the State Treasurer Act, (ii) a distribution from | ||||||
26 | the Illinois Prepaid Tuition Trust Fund, or (iii) a |
| |||||||
| |||||||
1 | distribution from a qualified tuition program under | ||||||
2 | Section 529 of the Internal Revenue Code that (I) | ||||||
3 | adopts and determines that its offering materials | ||||||
4 | comply with the College Savings Plans Network's | ||||||
5 | disclosure principles and (II) has made reasonable | ||||||
6 | efforts to inform in-state residents of the existence | ||||||
7 | of in-state qualified tuition programs by informing | ||||||
8 | Illinois residents directly and, where applicable, to | ||||||
9 | inform financial intermediaries distributing the | ||||||
10 | program to inform in-state residents of the existence | ||||||
11 | of in-state qualified tuition programs at least | ||||||
12 | annually, an amount equal to the amount excluded from | ||||||
13 | gross income under Section 529(c)(3)(B). | ||||||
14 | For the purposes of this subparagraph (D-20), a | ||||||
15 | qualified tuition program has made reasonable efforts | ||||||
16 | if it makes disclosures (which may use the term | ||||||
17 | "in-state program" or "in-state plan" and need not | ||||||
18 | specifically refer to Illinois or its qualified | ||||||
19 | programs by name) (i) directly to prospective | ||||||
20 | participants in its offering materials or makes a | ||||||
21 | public disclosure, such as a website posting; and (ii) | ||||||
22 | where applicable, to intermediaries selling the | ||||||
23 | out-of-state program in the same manner that the | ||||||
24 | out-of-state program distributes its offering | ||||||
25 | materials; | ||||||
26 | (D-20.5) For taxable years beginning on or after |
| |||||||
| |||||||
1 | January 1, 2018, in the case of a distribution from a | ||||||
2 | qualified ABLE program under Section 529A of the | ||||||
3 | Internal Revenue Code, other than a distribution from | ||||||
4 | a qualified ABLE program created under Section 16.6 of | ||||||
5 | the State Treasurer Act, an amount equal to the amount | ||||||
6 | excluded from gross income under Section 529A(c)(1)(B) | ||||||
7 | of the Internal Revenue Code; | ||||||
8 | (D-21) For taxable years beginning on or after | ||||||
9 | January 1, 2007, in the case of transfer of moneys from | ||||||
10 | a qualified tuition program under Section 529 of the | ||||||
11 | Internal Revenue Code that is administered by the | ||||||
12 | State to an out-of-state program, an amount equal to | ||||||
13 | the amount of moneys previously deducted from base | ||||||
14 | income under subsection (a)(2)(Y) of this Section; | ||||||
15 | (D-21.5) For taxable years beginning on or after | ||||||
16 | January 1, 2018, in the case of the transfer of moneys | ||||||
17 | from a qualified tuition program under Section 529 or | ||||||
18 | a qualified ABLE program under Section 529A of the | ||||||
19 | Internal Revenue Code that is administered by this | ||||||
20 | State to an ABLE account established under an | ||||||
21 | out-of-state ABLE account program, an amount equal to | ||||||
22 | the contribution component of the transferred amount | ||||||
23 | that was previously deducted from base income under | ||||||
24 | subsection (a)(2)(Y) or subsection (a)(2)(HH) of this | ||||||
25 | Section; | ||||||
26 | (D-22) For taxable years beginning on or after |
| |||||||
| |||||||
1 | January 1, 2009, and prior to January 1, 2018, in the | ||||||
2 | case of a nonqualified withdrawal or refund of moneys | ||||||
3 | from a qualified tuition program under Section 529 of | ||||||
4 | the Internal Revenue Code administered by the State | ||||||
5 | that is not used for qualified expenses at an eligible | ||||||
6 | education institution, an amount equal to the | ||||||
7 | contribution component of the nonqualified withdrawal | ||||||
8 | or refund that was previously deducted from base | ||||||
9 | income under subsection (a)(2)(y) of this Section, | ||||||
10 | provided that the withdrawal or refund did not result | ||||||
11 | from the beneficiary's death or disability. For | ||||||
12 | taxable years beginning on or after January 1, 2018: | ||||||
13 | (1) in the case of a nonqualified withdrawal or | ||||||
14 | refund, as defined under Section
16.5 of the State | ||||||
15 | Treasurer Act, of moneys from a qualified tuition | ||||||
16 | program under Section 529 of the Internal Revenue Code | ||||||
17 | administered by the State, an amount equal to the | ||||||
18 | contribution component of the nonqualified withdrawal | ||||||
19 | or refund that was previously deducted from base
| ||||||
20 | income under subsection (a)(2)(Y) of this Section, and | ||||||
21 | (2) in the case of a nonqualified withdrawal or refund | ||||||
22 | from a qualified ABLE program under Section 529A of | ||||||
23 | the Internal Revenue Code administered by the State | ||||||
24 | that is not used for qualified disability expenses, an | ||||||
25 | amount equal to the contribution component of the | ||||||
26 | nonqualified withdrawal or refund that was previously |
| |||||||
| |||||||
1 | deducted from base income under subsection (a)(2)(HH) | ||||||
2 | of this Section; | ||||||
3 | (D-23) An amount equal to the credit allowable to | ||||||
4 | the taxpayer under Section 218(a) of this Act, | ||||||
5 | determined without regard to Section 218(c) of this | ||||||
6 | Act; | ||||||
7 | (D-24) For taxable years ending on or after | ||||||
8 | December 31, 2017, an amount equal to the deduction | ||||||
9 | allowed under Section 199 of the Internal Revenue Code | ||||||
10 | for the taxable year; | ||||||
11 | (D-25) In the case of a resident, an amount equal | ||||||
12 | to the amount of tax for which a credit is allowed | ||||||
13 | pursuant to Section 201(p)(7) of this Act; | ||||||
14 | and by deducting from the total so obtained the
sum of the | ||||||
15 | following amounts: | ||||||
16 | (E) For taxable years ending before December 31, | ||||||
17 | 2001,
any amount included in such total in respect of | ||||||
18 | any compensation
(including but not limited to any | ||||||
19 | compensation paid or accrued to a
serviceman while a | ||||||
20 | prisoner of war or missing in action) paid to a | ||||||
21 | resident
by reason of being on active duty in the Armed | ||||||
22 | Forces of the United States
and in respect of any | ||||||
23 | compensation paid or accrued to a resident who as a
| ||||||
24 | governmental employee was a prisoner of war or missing | ||||||
25 | in action, and in
respect of any compensation paid to a | ||||||
26 | resident in 1971 or thereafter for
annual training |
| |||||||
| |||||||
1 | performed pursuant to Sections 502 and 503, Title 32,
| ||||||
2 | United States Code as a member of the Illinois | ||||||
3 | National Guard or, beginning with taxable years ending | ||||||
4 | on or after December 31, 2007, the National Guard of | ||||||
5 | any other state.
For taxable years ending on or after | ||||||
6 | December 31, 2001, any amount included in
such total | ||||||
7 | in respect of any compensation (including but not | ||||||
8 | limited to any
compensation paid or accrued to a | ||||||
9 | serviceman while a prisoner of war or missing
in | ||||||
10 | action) paid to a resident by reason of being a member | ||||||
11 | of any component of
the Armed Forces of the United | ||||||
12 | States and in respect of any compensation paid
or | ||||||
13 | accrued to a resident who as a governmental employee | ||||||
14 | was a prisoner of war
or missing in action, and in | ||||||
15 | respect of any compensation paid to a resident in
2001 | ||||||
16 | or thereafter by reason of being a member of the | ||||||
17 | Illinois National Guard or, beginning with taxable | ||||||
18 | years ending on or after December 31, 2007, the | ||||||
19 | National Guard of any other state.
The provisions of | ||||||
20 | this subparagraph (E) are exempt
from the provisions | ||||||
21 | of Section 250; | ||||||
22 | (F) An amount equal to all amounts included in | ||||||
23 | such total pursuant
to the provisions of Sections | ||||||
24 | 402(a), 402(c), 403(a), 403(b), 406(a), 407(a),
and | ||||||
25 | 408 of the Internal Revenue Code, or included in such | ||||||
26 | total as
distributions under the provisions of any |
| |||||||
| |||||||
1 | retirement or disability plan for
employees of any | ||||||
2 | governmental agency or unit, or retirement payments to
| ||||||
3 | retired partners, which payments are excluded in | ||||||
4 | computing net earnings
from self employment by Section | ||||||
5 | 1402 of the Internal Revenue Code and
regulations | ||||||
6 | adopted pursuant thereto; | ||||||
7 | (G) The valuation limitation amount; | ||||||
8 | (H) An amount equal to the amount of any tax | ||||||
9 | imposed by this Act
which was refunded to the taxpayer | ||||||
10 | and included in such total for the
taxable year; | ||||||
11 | (I) An amount equal to all amounts included in | ||||||
12 | such total pursuant
to the provisions of Section 111 | ||||||
13 | of the Internal Revenue Code as a
recovery of items | ||||||
14 | previously deducted from adjusted gross income in the
| ||||||
15 | computation of taxable income; | ||||||
16 | (J) An amount equal to those dividends included in | ||||||
17 | such total which were
paid by a corporation which | ||||||
18 | conducts business operations in a River Edge | ||||||
19 | Redevelopment Zone or zones created under the River | ||||||
20 | Edge Redevelopment Zone Act, and conducts
| ||||||
21 | substantially all of its operations in a River Edge | ||||||
22 | Redevelopment Zone or zones. This subparagraph (J) is | ||||||
23 | exempt from the provisions of Section 250; | ||||||
24 | (K) An amount equal to those dividends included in | ||||||
25 | such total that
were paid by a corporation that | ||||||
26 | conducts business operations in a federally
designated |
| |||||||
| |||||||
1 | Foreign Trade Zone or Sub-Zone and that is designated | ||||||
2 | a High Impact
Business located in Illinois; provided | ||||||
3 | that dividends eligible for the
deduction provided in | ||||||
4 | subparagraph (J) of paragraph (2) of this subsection
| ||||||
5 | shall not be eligible for the deduction provided under | ||||||
6 | this subparagraph
(K); | ||||||
7 | (L) For taxable years ending after December 31, | ||||||
8 | 1983, an amount equal to
all social security benefits | ||||||
9 | and railroad retirement benefits included in
such | ||||||
10 | total pursuant to Sections 72(r) and 86 of the | ||||||
11 | Internal Revenue Code; | ||||||
12 | (M) With the exception of any amounts subtracted | ||||||
13 | under subparagraph
(N), an amount equal to the sum of | ||||||
14 | all amounts disallowed as
deductions by (i) Sections | ||||||
15 | 171(a)(2) , and 265(a)(2) of the Internal Revenue Code, | ||||||
16 | and all amounts of expenses allocable
to interest and | ||||||
17 | disallowed as deductions by Section 265(a)(1) of the | ||||||
18 | Internal
Revenue Code;
and (ii) for taxable years
| ||||||
19 | ending on or after August 13, 1999, Sections | ||||||
20 | 171(a)(2), 265,
280C, and 832(b)(5)(B)(i) of the | ||||||
21 | Internal Revenue Code, plus, for taxable years ending | ||||||
22 | on or after December 31, 2011, Section 45G(e)(3) of | ||||||
23 | the Internal Revenue Code and, for taxable years | ||||||
24 | ending on or after December 31, 2008, any amount | ||||||
25 | included in gross income under Section 87 of the | ||||||
26 | Internal Revenue Code; the provisions of this
|
| |||||||
| |||||||
1 | subparagraph are exempt from the provisions of Section | ||||||
2 | 250; | ||||||
3 | (N) An amount equal to all amounts included in | ||||||
4 | such total which are
exempt from taxation by this | ||||||
5 | State either by reason of its statutes or
Constitution
| ||||||
6 | or by reason of the Constitution, treaties or statutes | ||||||
7 | of the United States;
provided that, in the case of any | ||||||
8 | statute of this State that exempts income
derived from | ||||||
9 | bonds or other obligations from the tax imposed under | ||||||
10 | this Act,
the amount exempted shall be the interest | ||||||
11 | net of bond premium amortization; | ||||||
12 | (O) An amount equal to any contribution made to a | ||||||
13 | job training
project established pursuant to the Tax | ||||||
14 | Increment Allocation Redevelopment Act; | ||||||
15 | (P) An amount equal to the amount of the deduction | ||||||
16 | used to compute the
federal income tax credit for | ||||||
17 | restoration of substantial amounts held under
claim of | ||||||
18 | right for the taxable year pursuant to Section 1341 of | ||||||
19 | the
Internal Revenue Code or of any itemized deduction | ||||||
20 | taken from adjusted gross income in the computation of | ||||||
21 | taxable income for restoration of substantial amounts | ||||||
22 | held under claim of right for the taxable year; | ||||||
23 | (Q) An amount equal to any amounts included in | ||||||
24 | such total, received by
the taxpayer as an | ||||||
25 | acceleration in the payment of life, endowment or | ||||||
26 | annuity
benefits in advance of the time they would |
| |||||||
| |||||||
1 | otherwise be payable as an indemnity
for a terminal | ||||||
2 | illness; | ||||||
3 | (R) An amount equal to the amount of any federal or | ||||||
4 | State bonus paid
to veterans of the Persian Gulf War; | ||||||
5 | (S) An amount, to the extent included in adjusted | ||||||
6 | gross income, equal
to the amount of a contribution | ||||||
7 | made in the taxable year on behalf of the
taxpayer to a | ||||||
8 | medical care savings account established under the | ||||||
9 | Medical Care
Savings Account Act or the Medical Care | ||||||
10 | Savings Account Act of 2000 to the
extent the | ||||||
11 | contribution is accepted by the account
administrator | ||||||
12 | as provided in that Act; | ||||||
13 | (T) An amount, to the extent included in adjusted | ||||||
14 | gross income, equal to
the amount of interest earned | ||||||
15 | in the taxable year on a medical care savings
account | ||||||
16 | established under the Medical Care Savings Account Act | ||||||
17 | or the Medical
Care Savings Account Act of 2000 on | ||||||
18 | behalf of the
taxpayer, other than interest added | ||||||
19 | pursuant to item (D-5) of this paragraph
(2); | ||||||
20 | (U) For one taxable year beginning on or after | ||||||
21 | January 1,
1994, an
amount equal to the total amount of | ||||||
22 | tax imposed and paid under subsections (a)
and (b) of | ||||||
23 | Section 201 of this Act on grant amounts received by | ||||||
24 | the taxpayer
under the Nursing Home Grant Assistance | ||||||
25 | Act during the taxpayer's taxable years
1992 and 1993; | ||||||
26 | (V) Beginning with tax years ending on or after |
| |||||||
| |||||||
1 | December 31, 1995 and
ending with tax years ending on | ||||||
2 | or before December 31, 2004, an amount equal to
the | ||||||
3 | amount paid by a taxpayer who is a
self-employed | ||||||
4 | taxpayer, a partner of a partnership, or a
shareholder | ||||||
5 | in a Subchapter S corporation for health insurance or | ||||||
6 | long-term
care insurance for that taxpayer or that | ||||||
7 | taxpayer's spouse or dependents, to
the extent that | ||||||
8 | the amount paid for that health insurance or long-term | ||||||
9 | care
insurance may be deducted under Section 213 of | ||||||
10 | the Internal Revenue Code, has not been deducted on | ||||||
11 | the federal income tax return of the taxpayer,
and | ||||||
12 | does not exceed the taxable income attributable to | ||||||
13 | that taxpayer's income,
self-employment income, or | ||||||
14 | Subchapter S corporation income; except that no
| ||||||
15 | deduction shall be allowed under this item (V) if the | ||||||
16 | taxpayer is eligible to
participate in any health | ||||||
17 | insurance or long-term care insurance plan of an
| ||||||
18 | employer of the taxpayer or the taxpayer's
spouse. The | ||||||
19 | amount of the health insurance and long-term care | ||||||
20 | insurance
subtracted under this item (V) shall be | ||||||
21 | determined by multiplying total
health insurance and | ||||||
22 | long-term care insurance premiums paid by the taxpayer
| ||||||
23 | times a number that represents the fractional | ||||||
24 | percentage of eligible medical
expenses under Section | ||||||
25 | 213 of the Internal Revenue Code of 1986 not actually
| ||||||
26 | deducted on the taxpayer's federal income tax return; |
| |||||||
| |||||||
1 | (W) For taxable years beginning on or after | ||||||
2 | January 1, 1998,
all amounts included in the | ||||||
3 | taxpayer's federal gross income
in the taxable year | ||||||
4 | from amounts converted from a regular IRA to a Roth | ||||||
5 | IRA.
This paragraph is exempt from the provisions of | ||||||
6 | Section
250; | ||||||
7 | (X) For taxable year 1999 and thereafter, an | ||||||
8 | amount equal to the
amount of any (i) distributions, | ||||||
9 | to the extent includible in gross income for
federal | ||||||
10 | income tax purposes, made to the taxpayer because of | ||||||
11 | his or her status
as a victim of persecution for racial | ||||||
12 | or religious reasons by Nazi Germany or
any other Axis | ||||||
13 | regime or as an heir of the victim and (ii) items
of | ||||||
14 | income, to the extent
includible in gross income for | ||||||
15 | federal income tax purposes, attributable to,
derived | ||||||
16 | from or in any way related to assets stolen from, | ||||||
17 | hidden from, or
otherwise lost to a victim of
| ||||||
18 | persecution for racial or religious reasons by Nazi | ||||||
19 | Germany or any other Axis
regime immediately prior to, | ||||||
20 | during, and immediately after World War II,
including, | ||||||
21 | but
not limited to, interest on the proceeds | ||||||
22 | receivable as insurance
under policies issued to a | ||||||
23 | victim of persecution for racial or religious
reasons
| ||||||
24 | by Nazi Germany or any other Axis regime by European | ||||||
25 | insurance companies
immediately prior to and during | ||||||
26 | World War II;
provided, however, this subtraction from |
| |||||||
| |||||||
1 | federal adjusted gross income does not
apply to assets | ||||||
2 | acquired with such assets or with the proceeds from | ||||||
3 | the sale of
such assets; provided, further, this | ||||||
4 | paragraph shall only apply to a taxpayer
who was the | ||||||
5 | first recipient of such assets after their recovery | ||||||
6 | and who is a
victim of persecution for racial or | ||||||
7 | religious reasons
by Nazi Germany or any other Axis | ||||||
8 | regime or as an heir of the victim. The
amount of and | ||||||
9 | the eligibility for any public assistance, benefit, or
| ||||||
10 | similar entitlement is not affected by the inclusion | ||||||
11 | of items (i) and (ii) of
this paragraph in gross income | ||||||
12 | for federal income tax purposes.
This paragraph is | ||||||
13 | exempt from the provisions of Section 250; | ||||||
14 | (Y) For taxable years beginning on or after | ||||||
15 | January 1, 2002
and ending
on or before December 31, | ||||||
16 | 2004, moneys contributed in the taxable year to a | ||||||
17 | College Savings Pool account under
Section 16.5 of the | ||||||
18 | State Treasurer Act, except that amounts excluded from
| ||||||
19 | gross income under Section 529(c)(3)(C)(i) of the | ||||||
20 | Internal Revenue Code
shall not be considered moneys | ||||||
21 | contributed under this subparagraph (Y). For taxable | ||||||
22 | years beginning on or after January 1, 2005, a maximum | ||||||
23 | of $10,000
contributed
in the
taxable year to (i) a | ||||||
24 | College Savings Pool account under Section 16.5 of the
| ||||||
25 | State
Treasurer Act or (ii) the Illinois Prepaid | ||||||
26 | Tuition Trust Fund,
except that
amounts excluded from |
| |||||||
| |||||||
1 | gross income under Section 529(c)(3)(C)(i) of the
| ||||||
2 | Internal
Revenue Code shall not be considered moneys | ||||||
3 | contributed under this subparagraph
(Y). For purposes | ||||||
4 | of this subparagraph, contributions made by an | ||||||
5 | employer on behalf of an employee, or matching | ||||||
6 | contributions made by an employee, shall be treated as | ||||||
7 | made by the employee. This
subparagraph (Y) is exempt | ||||||
8 | from the provisions of Section 250; | ||||||
9 | (Z) For taxable years 2001 and thereafter, for the | ||||||
10 | taxable year in
which the bonus depreciation deduction
| ||||||
11 | is taken on the taxpayer's federal income tax return | ||||||
12 | under
subsection (k) of Section 168 of the Internal | ||||||
13 | Revenue Code and for each
applicable taxable year | ||||||
14 | thereafter, an amount equal to "x", where: | ||||||
15 | (1) "y" equals the amount of the depreciation | ||||||
16 | deduction taken for the
taxable year
on the | ||||||
17 | taxpayer's federal income tax return on property | ||||||
18 | for which the bonus
depreciation deduction
was | ||||||
19 | taken in any year under subsection (k) of Section | ||||||
20 | 168 of the Internal
Revenue Code, but not | ||||||
21 | including the bonus depreciation deduction; | ||||||
22 | (2) for taxable years ending on or before | ||||||
23 | December 31, 2005, "x" equals "y" multiplied by 30 | ||||||
24 | and then divided by 70 (or "y"
multiplied by | ||||||
25 | 0.429); and | ||||||
26 | (3) for taxable years ending after December |
| |||||||
| |||||||
1 | 31, 2005: | ||||||
2 | (i) for property on which a bonus | ||||||
3 | depreciation deduction of 30% of the adjusted | ||||||
4 | basis was taken, "x" equals "y" multiplied by | ||||||
5 | 30 and then divided by 70 (or "y"
multiplied | ||||||
6 | by 0.429); and | ||||||
7 | (ii) for property on which a bonus | ||||||
8 | depreciation deduction of 50% of the adjusted | ||||||
9 | basis was taken, "x" equals "y" multiplied by | ||||||
10 | 1.0. | ||||||
11 | The aggregate amount deducted under this | ||||||
12 | subparagraph in all taxable
years for any one piece of | ||||||
13 | property may not exceed the amount of the bonus
| ||||||
14 | depreciation deduction
taken on that property on the | ||||||
15 | taxpayer's federal income tax return under
subsection | ||||||
16 | (k) of Section 168 of the Internal Revenue Code. This | ||||||
17 | subparagraph (Z) is exempt from the provisions of | ||||||
18 | Section 250; | ||||||
19 | (AA) If the taxpayer sells, transfers, abandons, | ||||||
20 | or otherwise disposes of
property for which the | ||||||
21 | taxpayer was required in any taxable year to make an
| ||||||
22 | addition modification under subparagraph (D-15), then | ||||||
23 | an amount equal to that
addition modification.
| ||||||
24 | If the taxpayer continues to own property through | ||||||
25 | the last day of the last tax year for which the | ||||||
26 | taxpayer may claim a depreciation deduction for |
| |||||||
| |||||||
1 | federal income tax purposes and for which the taxpayer | ||||||
2 | was required in any taxable year to make an addition | ||||||
3 | modification under subparagraph (D-15), then an amount | ||||||
4 | equal to that addition modification.
| ||||||
5 | The taxpayer is allowed to take the deduction | ||||||
6 | under this subparagraph
only once with respect to any | ||||||
7 | one piece of property. | ||||||
8 | This subparagraph (AA) is exempt from the | ||||||
9 | provisions of Section 250; | ||||||
10 | (BB) Any amount included in adjusted gross income, | ||||||
11 | other
than
salary,
received by a driver in a | ||||||
12 | ridesharing arrangement using a motor vehicle; | ||||||
13 | (CC) The amount of (i) any interest income (net of | ||||||
14 | the deductions allocable thereto) taken into account | ||||||
15 | for the taxable year with respect to a transaction | ||||||
16 | with a taxpayer that is required to make an addition | ||||||
17 | modification with respect to such transaction under | ||||||
18 | Section 203(a)(2)(D-17), 203(b)(2)(E-12), | ||||||
19 | 203(c)(2)(G-12), or 203(d)(2)(D-7), but not to exceed | ||||||
20 | the amount of that addition modification, and
(ii) any | ||||||
21 | income from intangible property (net of the deductions | ||||||
22 | allocable thereto) taken into account for the taxable | ||||||
23 | year with respect to a transaction with a taxpayer | ||||||
24 | that is required to make an addition modification with | ||||||
25 | respect to such transaction under Section | ||||||
26 | 203(a)(2)(D-18), 203(b)(2)(E-13), 203(c)(2)(G-13), or |
| |||||||
| |||||||
1 | 203(d)(2)(D-8), but not to exceed the amount of that | ||||||
2 | addition modification. This subparagraph (CC) is | ||||||
3 | exempt from the provisions of Section 250; | ||||||
4 | (DD) An amount equal to the interest income taken | ||||||
5 | into account for the taxable year (net of the | ||||||
6 | deductions allocable thereto) with respect to | ||||||
7 | transactions with (i) a foreign person who would be a | ||||||
8 | member of the taxpayer's unitary business group but | ||||||
9 | for the fact that the foreign person's business | ||||||
10 | activity outside the United States is 80% or more of | ||||||
11 | that person's total business activity and (ii) for | ||||||
12 | taxable years ending on or after December 31, 2008, to | ||||||
13 | a person who would be a member of the same unitary | ||||||
14 | business group but for the fact that the person is | ||||||
15 | prohibited under Section 1501(a)(27) from being | ||||||
16 | included in the unitary business group because he or | ||||||
17 | she is ordinarily required to apportion business | ||||||
18 | income under different subsections of Section 304, but | ||||||
19 | not to exceed the addition modification required to be | ||||||
20 | made for the same taxable year under Section | ||||||
21 | 203(a)(2)(D-17) for interest paid, accrued, or | ||||||
22 | incurred, directly or indirectly, to the same person. | ||||||
23 | This subparagraph (DD) is exempt from the provisions | ||||||
24 | of Section 250; | ||||||
25 | (EE) An amount equal to the income from intangible | ||||||
26 | property taken into account for the taxable year (net |
| |||||||
| |||||||
1 | of the deductions allocable thereto) with respect to | ||||||
2 | transactions with (i) a foreign person who would be a | ||||||
3 | member of the taxpayer's unitary business group but | ||||||
4 | for the fact that the foreign person's business | ||||||
5 | activity outside the United States is 80% or more of | ||||||
6 | that person's total business activity and (ii) for | ||||||
7 | taxable years ending on or after December 31, 2008, to | ||||||
8 | a person who would be a member of the same unitary | ||||||
9 | business group but for the fact that the person is | ||||||
10 | prohibited under Section 1501(a)(27) from being | ||||||
11 | included in the unitary business group because he or | ||||||
12 | she is ordinarily required to apportion business | ||||||
13 | income under different subsections of Section 304, but | ||||||
14 | not to exceed the addition modification required to be | ||||||
15 | made for the same taxable year under Section | ||||||
16 | 203(a)(2)(D-18) for intangible expenses and costs | ||||||
17 | paid, accrued, or incurred, directly or indirectly, to | ||||||
18 | the same foreign person. This subparagraph (EE) is | ||||||
19 | exempt from the provisions of Section 250; | ||||||
20 | (FF) An amount equal to any amount awarded to the | ||||||
21 | taxpayer during the taxable year by the Court of | ||||||
22 | Claims under subsection (c) of Section 8 of the Court | ||||||
23 | of Claims Act for time unjustly served in a State | ||||||
24 | prison. This subparagraph (FF) is exempt from the | ||||||
25 | provisions of Section 250; | ||||||
26 | (GG) For taxable years ending on or after December |
| |||||||
| |||||||
1 | 31, 2011, in the case of a taxpayer who was required to | ||||||
2 | add back any insurance premiums under Section | ||||||
3 | 203(a)(2)(D-19), such taxpayer may elect to subtract | ||||||
4 | that part of a reimbursement received from the | ||||||
5 | insurance company equal to the amount of the expense | ||||||
6 | or loss (including expenses incurred by the insurance | ||||||
7 | company) that would have been taken into account as a | ||||||
8 | deduction for federal income tax purposes if the | ||||||
9 | expense or loss had been uninsured. If a taxpayer | ||||||
10 | makes the election provided for by this subparagraph | ||||||
11 | (GG), the insurer to which the premiums were paid must | ||||||
12 | add back to income the amount subtracted by the | ||||||
13 | taxpayer pursuant to this subparagraph (GG). This | ||||||
14 | subparagraph (GG) is exempt from the provisions of | ||||||
15 | Section 250; and | ||||||
16 | (HH) For taxable years beginning on or after | ||||||
17 | January 1, 2018 and prior to January 1, 2023, a maximum | ||||||
18 | of $10,000 contributed in the taxable year to a | ||||||
19 | qualified ABLE account under Section 16.6 of the State | ||||||
20 | Treasurer Act, except that amounts excluded from gross | ||||||
21 | income under Section 529(c)(3)(C)(i) or Section | ||||||
22 | 529A(c)(1)(C) of the Internal Revenue Code shall not | ||||||
23 | be considered moneys contributed under this | ||||||
24 | subparagraph (HH). For purposes of this subparagraph | ||||||
25 | (HH), contributions made by an employer on behalf of | ||||||
26 | an employee, or matching contributions made by an |
| |||||||
| |||||||
1 | employee, shall be treated as made by the employee. | ||||||
2 | (b) Corporations. | ||||||
3 | (1) In general. In the case of a corporation, base | ||||||
4 | income means an
amount equal to the taxpayer's taxable | ||||||
5 | income for the taxable year as
modified by paragraph (2). | ||||||
6 | (2) Modifications. The taxable income referred to in | ||||||
7 | paragraph (1)
shall be modified by adding thereto the sum | ||||||
8 | of the following amounts: | ||||||
9 | (A) An amount equal to all amounts paid or accrued | ||||||
10 | to the taxpayer
as interest and all distributions | ||||||
11 | received from regulated investment
companies during | ||||||
12 | the taxable year to the extent excluded from gross
| ||||||
13 | income in the computation of taxable income; | ||||||
14 | (B) An amount equal to the amount of tax imposed by | ||||||
15 | this Act to the
extent deducted from gross income in | ||||||
16 | the computation of taxable income
for the taxable | ||||||
17 | year; | ||||||
18 | (C) In the case of a regulated investment company, | ||||||
19 | an amount equal to
the excess of (i) the net long-term | ||||||
20 | capital gain for the taxable year, over
(ii) the | ||||||
21 | amount of the capital gain dividends designated as | ||||||
22 | such in accordance
with Section 852(b)(3)(C) of the | ||||||
23 | Internal Revenue Code and any amount
designated under | ||||||
24 | Section 852(b)(3)(D) of the Internal Revenue Code,
| ||||||
25 | attributable to the taxable year (this amendatory Act |
| |||||||
| |||||||
1 | of 1995
(Public Act 89-89) is declarative of existing | ||||||
2 | law and is not a new
enactment); | ||||||
3 | (D) The amount of any net operating loss deduction | ||||||
4 | taken in arriving
at taxable income, other than a net | ||||||
5 | operating loss carried forward from a
taxable year | ||||||
6 | ending prior to December 31, 1986; | ||||||
7 | (E) For taxable years in which a net operating | ||||||
8 | loss carryback or
carryforward from a taxable year | ||||||
9 | ending prior to December 31, 1986 is an
element of | ||||||
10 | taxable income under paragraph (1) of subsection (e) | ||||||
11 | or
subparagraph (E) of paragraph (2) of subsection | ||||||
12 | (e), the amount by which
addition modifications other | ||||||
13 | than those provided by this subparagraph (E)
exceeded | ||||||
14 | subtraction modifications in such earlier taxable | ||||||
15 | year, with the
following limitations applied in the | ||||||
16 | order that they are listed: | ||||||
17 | (i) the addition modification relating to the | ||||||
18 | net operating loss
carried back or forward to the | ||||||
19 | taxable year from any taxable year ending
prior to | ||||||
20 | December 31, 1986 shall be reduced by the amount | ||||||
21 | of addition
modification under this subparagraph | ||||||
22 | (E) which related to that net operating
loss and | ||||||
23 | which was taken into account in calculating the | ||||||
24 | base income of an
earlier taxable year, and | ||||||
25 | (ii) the addition modification relating to the | ||||||
26 | net operating loss
carried back or forward to the |
| |||||||
| |||||||
1 | taxable year from any taxable year ending
prior to | ||||||
2 | December 31, 1986 shall not exceed the amount of | ||||||
3 | such carryback or
carryforward; | ||||||
4 | For taxable years in which there is a net | ||||||
5 | operating loss carryback or
carryforward from more | ||||||
6 | than one other taxable year ending prior to December
| ||||||
7 | 31, 1986, the addition modification provided in this | ||||||
8 | subparagraph (E) shall
be the sum of the amounts | ||||||
9 | computed independently under the preceding
provisions | ||||||
10 | of this subparagraph (E) for each such taxable year; | ||||||
11 | (E-5) For taxable years ending after December 31, | ||||||
12 | 1997, an
amount equal to any eligible remediation | ||||||
13 | costs that the corporation
deducted in computing | ||||||
14 | adjusted gross income and for which the
corporation | ||||||
15 | claims a credit under subsection (l) of Section 201; | ||||||
16 | (E-10) For taxable years 2001 and thereafter, an | ||||||
17 | amount equal to the
bonus depreciation deduction taken | ||||||
18 | on the taxpayer's federal income tax return for the | ||||||
19 | taxable
year under subsection (k) of Section 168 of | ||||||
20 | the Internal Revenue Code; | ||||||
21 | (E-11) If the taxpayer sells, transfers, abandons, | ||||||
22 | or otherwise disposes of property for which the | ||||||
23 | taxpayer was required in any taxable year to
make an | ||||||
24 | addition modification under subparagraph (E-10), then | ||||||
25 | an amount equal
to the aggregate amount of the | ||||||
26 | deductions taken in all taxable
years under |
| |||||||
| |||||||
1 | subparagraph (T) with respect to that property. | ||||||
2 | If the taxpayer continues to own property through | ||||||
3 | the last day of the last tax year for which the | ||||||
4 | taxpayer may claim a depreciation deduction for | ||||||
5 | federal income tax purposes and for which the taxpayer | ||||||
6 | was allowed in any taxable year to make a subtraction | ||||||
7 | modification under subparagraph (T), then an amount | ||||||
8 | equal to that subtraction modification.
| ||||||
9 | The taxpayer is required to make the addition | ||||||
10 | modification under this
subparagraph
only once with | ||||||
11 | respect to any one piece of property; | ||||||
12 | (E-12) An amount equal to the amount otherwise | ||||||
13 | allowed as a deduction in computing base income for | ||||||
14 | interest paid, accrued, or incurred, directly or | ||||||
15 | indirectly, (i) for taxable years ending on or after | ||||||
16 | December 31, 2004, to a foreign person who would be a | ||||||
17 | member of the same unitary business group but for the | ||||||
18 | fact the foreign person's business activity outside | ||||||
19 | the United States is 80% or more of the foreign | ||||||
20 | person's total business activity and (ii) for taxable | ||||||
21 | years ending on or after December 31, 2008, to a person | ||||||
22 | who would be a member of the same unitary business | ||||||
23 | group but for the fact that the person is prohibited | ||||||
24 | under Section 1501(a)(27) from being included in the | ||||||
25 | unitary business group because he or she is ordinarily | ||||||
26 | required to apportion business income under different |
| |||||||
| |||||||
1 | subsections of Section 304. The addition modification | ||||||
2 | required by this subparagraph shall be reduced to the | ||||||
3 | extent that dividends were included in base income of | ||||||
4 | the unitary group for the same taxable year and | ||||||
5 | received by the taxpayer or by a member of the | ||||||
6 | taxpayer's unitary business group (including amounts | ||||||
7 | included in gross income pursuant to Sections 951 | ||||||
8 | through 964 of the Internal Revenue Code and amounts | ||||||
9 | included in gross income under Section 78 of the | ||||||
10 | Internal Revenue Code) with respect to the stock of | ||||||
11 | the same person to whom the interest was paid, | ||||||
12 | accrued, or incurred.
| ||||||
13 | This paragraph shall not apply to the following:
| ||||||
14 | (i) an item of interest paid, accrued, or | ||||||
15 | incurred, directly or indirectly, to a person who | ||||||
16 | is subject in a foreign country or state, other | ||||||
17 | than a state which requires mandatory unitary | ||||||
18 | reporting, to a tax on or measured by net income | ||||||
19 | with respect to such interest; or | ||||||
20 | (ii) an item of interest paid, accrued, or | ||||||
21 | incurred, directly or indirectly, to a person if | ||||||
22 | the taxpayer can establish, based on a | ||||||
23 | preponderance of the evidence, both of the | ||||||
24 | following: | ||||||
25 | (a) the person, during the same taxable | ||||||
26 | year, paid, accrued, or incurred, the interest |
| |||||||
| |||||||
1 | to a person that is not a related member, and | ||||||
2 | (b) the transaction giving rise to the | ||||||
3 | interest expense between the taxpayer and the | ||||||
4 | person did not have as a principal purpose the | ||||||
5 | avoidance of Illinois income tax, and is paid | ||||||
6 | pursuant to a contract or agreement that | ||||||
7 | reflects an arm's-length interest rate and | ||||||
8 | terms; or
| ||||||
9 | (iii) the taxpayer can establish, based on | ||||||
10 | clear and convincing evidence, that the interest | ||||||
11 | paid, accrued, or incurred relates to a contract | ||||||
12 | or agreement entered into at arm's-length rates | ||||||
13 | and terms and the principal purpose for the | ||||||
14 | payment is not federal or Illinois tax avoidance; | ||||||
15 | or
| ||||||
16 | (iv) an item of interest paid, accrued, or | ||||||
17 | incurred, directly or indirectly, to a person if | ||||||
18 | the taxpayer establishes by clear and convincing | ||||||
19 | evidence that the adjustments are unreasonable; or | ||||||
20 | if the taxpayer and the Director agree in writing | ||||||
21 | to the application or use of an alternative method | ||||||
22 | of apportionment under Section 304(f).
| ||||||
23 | Nothing in this subsection shall preclude the | ||||||
24 | Director from making any other adjustment | ||||||
25 | otherwise allowed under Section 404 of this Act | ||||||
26 | for any tax year beginning after the effective |
| |||||||
| |||||||
1 | date of this amendment provided such adjustment is | ||||||
2 | made pursuant to regulation adopted by the | ||||||
3 | Department and such regulations provide methods | ||||||
4 | and standards by which the Department will utilize | ||||||
5 | its authority under Section 404 of this Act;
| ||||||
6 | (E-13) An amount equal to the amount of intangible | ||||||
7 | expenses and costs otherwise allowed as a deduction in | ||||||
8 | computing base income, and that were paid, accrued, or | ||||||
9 | incurred, directly or indirectly, (i) for taxable | ||||||
10 | years ending on or after December 31, 2004, to a | ||||||
11 | foreign person who would be a member of the same | ||||||
12 | unitary business group but for the fact that the | ||||||
13 | foreign person's business activity outside the United | ||||||
14 | States is 80% or more of that person's total business | ||||||
15 | activity and (ii) for taxable years ending on or after | ||||||
16 | December 31, 2008, to a person who would be a member of | ||||||
17 | the same unitary business group but for the fact that | ||||||
18 | the person is prohibited under Section 1501(a)(27) | ||||||
19 | from being included in the unitary business group | ||||||
20 | because he or she is ordinarily required to apportion | ||||||
21 | business income under different subsections of Section | ||||||
22 | 304. The addition modification required by this | ||||||
23 | subparagraph shall be reduced to the extent that | ||||||
24 | dividends were included in base income of the unitary | ||||||
25 | group for the same taxable year and received by the | ||||||
26 | taxpayer or by a member of the taxpayer's unitary |
| |||||||
| |||||||
1 | business group (including amounts included in gross | ||||||
2 | income pursuant to Sections 951 through 964 of the | ||||||
3 | Internal Revenue Code and amounts included in gross | ||||||
4 | income under Section 78 of the Internal Revenue Code) | ||||||
5 | with respect to the stock of the same person to whom | ||||||
6 | the intangible expenses and costs were directly or | ||||||
7 | indirectly paid, incurred, or accrued. The preceding | ||||||
8 | sentence shall not apply to the extent that the same | ||||||
9 | dividends caused a reduction to the addition | ||||||
10 | modification required under Section 203(b)(2)(E-12) of | ||||||
11 | this Act.
As used in this subparagraph, the term | ||||||
12 | "intangible expenses and costs" includes (1) expenses, | ||||||
13 | losses, and costs for, or related to, the direct or | ||||||
14 | indirect acquisition, use, maintenance or management, | ||||||
15 | ownership, sale, exchange, or any other disposition of | ||||||
16 | intangible property; (2) losses incurred, directly or | ||||||
17 | indirectly, from factoring transactions or discounting | ||||||
18 | transactions; (3) royalty, patent, technical, and | ||||||
19 | copyright fees; (4) licensing fees; and (5) other | ||||||
20 | similar expenses and costs.
For purposes of this | ||||||
21 | subparagraph, "intangible property" includes patents, | ||||||
22 | patent applications, trade names, trademarks, service | ||||||
23 | marks, copyrights, mask works, trade secrets, and | ||||||
24 | similar types of intangible assets. | ||||||
25 | This paragraph shall not apply to the following: | ||||||
26 | (i) any item of intangible expenses or costs |
| |||||||
| |||||||
1 | paid, accrued, or incurred, directly or | ||||||
2 | indirectly, from a transaction with a person who | ||||||
3 | is subject in a foreign country or state, other | ||||||
4 | than a state which requires mandatory unitary | ||||||
5 | reporting, to a tax on or measured by net income | ||||||
6 | with respect to such item; or | ||||||
7 | (ii) any item of intangible expense or cost | ||||||
8 | paid, accrued, or incurred, directly or | ||||||
9 | indirectly, if the taxpayer can establish, based | ||||||
10 | on a preponderance of the evidence, both of the | ||||||
11 | following: | ||||||
12 | (a) the person during the same taxable | ||||||
13 | year paid, accrued, or incurred, the | ||||||
14 | intangible expense or cost to a person that is | ||||||
15 | not a related member, and | ||||||
16 | (b) the transaction giving rise to the | ||||||
17 | intangible expense or cost between the | ||||||
18 | taxpayer and the person did not have as a | ||||||
19 | principal purpose the avoidance of Illinois | ||||||
20 | income tax, and is paid pursuant to a contract | ||||||
21 | or agreement that reflects arm's-length terms; | ||||||
22 | or | ||||||
23 | (iii) any item of intangible expense or cost | ||||||
24 | paid, accrued, or incurred, directly or | ||||||
25 | indirectly, from a transaction with a person if | ||||||
26 | the taxpayer establishes by clear and convincing |
| |||||||
| |||||||
1 | evidence, that the adjustments are unreasonable; | ||||||
2 | or if the taxpayer and the Director agree in | ||||||
3 | writing to the application or use of an | ||||||
4 | alternative method of apportionment under Section | ||||||
5 | 304(f);
| ||||||
6 | Nothing in this subsection shall preclude the | ||||||
7 | Director from making any other adjustment | ||||||
8 | otherwise allowed under Section 404 of this Act | ||||||
9 | for any tax year beginning after the effective | ||||||
10 | date of this amendment provided such adjustment is | ||||||
11 | made pursuant to regulation adopted by the | ||||||
12 | Department and such regulations provide methods | ||||||
13 | and standards by which the Department will utilize | ||||||
14 | its authority under Section 404 of this Act;
| ||||||
15 | (E-14) For taxable years ending on or after | ||||||
16 | December 31, 2008, an amount equal to the amount of | ||||||
17 | insurance premium expenses and costs otherwise allowed | ||||||
18 | as a deduction in computing base income, and that were | ||||||
19 | paid, accrued, or incurred, directly or indirectly, to | ||||||
20 | a person who would be a member of the same unitary | ||||||
21 | business group but for the fact that the person is | ||||||
22 | prohibited under Section 1501(a)(27) from being | ||||||
23 | included in the unitary business group because he or | ||||||
24 | she is ordinarily required to apportion business | ||||||
25 | income under different subsections of Section 304. The | ||||||
26 | addition modification required by this subparagraph |
| |||||||
| |||||||
1 | shall be reduced to the extent that dividends were | ||||||
2 | included in base income of the unitary group for the | ||||||
3 | same taxable year and received by the taxpayer or by a | ||||||
4 | member of the taxpayer's unitary business group | ||||||
5 | (including amounts included in gross income under | ||||||
6 | Sections 951 through 964 of the Internal Revenue Code | ||||||
7 | and amounts included in gross income under Section 78 | ||||||
8 | of the Internal Revenue Code) with respect to the | ||||||
9 | stock of the same person to whom the premiums and costs | ||||||
10 | were directly or indirectly paid, incurred, or | ||||||
11 | accrued. The preceding sentence does not apply to the | ||||||
12 | extent that the same dividends caused a reduction to | ||||||
13 | the addition modification required under Section | ||||||
14 | 203(b)(2)(E-12) or Section 203(b)(2)(E-13) of this | ||||||
15 | Act;
| ||||||
16 | (E-15) For taxable years beginning after December | ||||||
17 | 31, 2008, any deduction for dividends paid by a | ||||||
18 | captive real estate investment trust that is allowed | ||||||
19 | to a real estate investment trust under Section | ||||||
20 | 857(b)(2)(B) of the Internal Revenue Code for | ||||||
21 | dividends paid; | ||||||
22 | (E-16) An amount equal to the credit allowable to | ||||||
23 | the taxpayer under Section 218(a) of this Act, | ||||||
24 | determined without regard to Section 218(c) of this | ||||||
25 | Act; | ||||||
26 | (E-17) For taxable years ending on or after |
| |||||||
| |||||||
1 | December 31, 2017, an amount equal to the deduction | ||||||
2 | allowed under Section 199 of the Internal Revenue Code | ||||||
3 | for the taxable year; | ||||||
4 | (E-18) for taxable years beginning after December | ||||||
5 | 31, 2018, an amount equal to the deduction allowed | ||||||
6 | under Section 250(a)(1)(A) of the Internal Revenue | ||||||
7 | Code for the taxable year. | ||||||
8 | and by deducting from the total so obtained the sum of the | ||||||
9 | following
amounts: | ||||||
10 | (F) An amount equal to the amount of any tax | ||||||
11 | imposed by this Act
which was refunded to the taxpayer | ||||||
12 | and included in such total for the
taxable year; | ||||||
13 | (G) An amount equal to any amount included in such | ||||||
14 | total under
Section 78 of the Internal Revenue Code; | ||||||
15 | (H) In the case of a regulated investment company, | ||||||
16 | an amount equal
to the amount of exempt interest | ||||||
17 | dividends as defined in subsection (b)(5) of Section | ||||||
18 | 852 of the Internal Revenue Code, paid to shareholders
| ||||||
19 | for the taxable year; | ||||||
20 | (I) With the exception of any amounts subtracted | ||||||
21 | under subparagraph
(J),
an amount equal to the sum of | ||||||
22 | all amounts disallowed as
deductions by (i) Sections | ||||||
23 | 171(a)(2) , and 265(a)(2) and amounts disallowed as
| ||||||
24 | interest expense by Section 291(a)(3) of the Internal | ||||||
25 | Revenue Code, and all amounts of expenses allocable to | ||||||
26 | interest and
disallowed as deductions by Section |
| |||||||
| |||||||
1 | 265(a)(1) of the Internal Revenue Code;
and (ii) for | ||||||
2 | taxable years
ending on or after August 13, 1999, | ||||||
3 | Sections
171(a)(2), 265,
280C, 291(a)(3), and | ||||||
4 | 832(b)(5)(B)(i) of the Internal Revenue Code, plus, | ||||||
5 | for tax years ending on or after December 31, 2011, | ||||||
6 | amounts disallowed as deductions by Section 45G(e)(3) | ||||||
7 | of the Internal Revenue Code and, for taxable years | ||||||
8 | ending on or after December 31, 2008, any amount | ||||||
9 | included in gross income under Section 87 of the | ||||||
10 | Internal Revenue Code and the policyholders' share of | ||||||
11 | tax-exempt interest of a life insurance company under | ||||||
12 | Section 807(a)(2)(B) of the Internal Revenue Code (in | ||||||
13 | the case of a life insurance company with gross income | ||||||
14 | from a decrease in reserves for the tax year) or | ||||||
15 | Section 807(b)(1)(B) of the Internal Revenue Code (in | ||||||
16 | the case of a life insurance company allowed a | ||||||
17 | deduction for an increase in reserves for the tax | ||||||
18 | year); the
provisions of this
subparagraph are exempt | ||||||
19 | from the provisions of Section 250; | ||||||
20 | (J) An amount equal to all amounts included in | ||||||
21 | such total which are
exempt from taxation by this | ||||||
22 | State either by reason of its statutes or
Constitution
| ||||||
23 | or by reason of the Constitution, treaties or statutes | ||||||
24 | of the United States;
provided that, in the case of any | ||||||
25 | statute of this State that exempts income
derived from | ||||||
26 | bonds or other obligations from the tax imposed under |
| |||||||
| |||||||
1 | this Act,
the amount exempted shall be the interest | ||||||
2 | net of bond premium amortization; | ||||||
3 | (K) An amount equal to those dividends included in | ||||||
4 | such total
which were paid by a corporation which | ||||||
5 | conducts
business operations in a River Edge | ||||||
6 | Redevelopment Zone or zones created under the River | ||||||
7 | Edge Redevelopment Zone Act and conducts substantially | ||||||
8 | all of its
operations in a River Edge Redevelopment | ||||||
9 | Zone or zones. This subparagraph (K) is exempt from | ||||||
10 | the provisions of Section 250; | ||||||
11 | (L) An amount equal to those dividends included in | ||||||
12 | such total that
were paid by a corporation that | ||||||
13 | conducts business operations in a federally
designated | ||||||
14 | Foreign Trade Zone or Sub-Zone and that is designated | ||||||
15 | a High Impact
Business located in Illinois; provided | ||||||
16 | that dividends eligible for the
deduction provided in | ||||||
17 | subparagraph (K) of paragraph 2 of this subsection
| ||||||
18 | shall not be eligible for the deduction provided under | ||||||
19 | this subparagraph
(L); | ||||||
20 | (M) For any taxpayer that is a financial | ||||||
21 | organization within the meaning
of Section 304(c) of | ||||||
22 | this Act, an amount included in such total as interest
| ||||||
23 | income from a loan or loans made by such taxpayer to a | ||||||
24 | borrower, to the extent
that such a loan is secured by | ||||||
25 | property which is eligible for the River Edge | ||||||
26 | Redevelopment Zone Investment Credit. To determine the |
| |||||||
| |||||||
1 | portion of a loan or loans that is
secured by property | ||||||
2 | eligible for a Section 201(f) investment
credit to the | ||||||
3 | borrower, the entire principal amount of the loan or | ||||||
4 | loans
between the taxpayer and the borrower should be | ||||||
5 | divided into the basis of the
Section 201(f) | ||||||
6 | investment credit property which secures the
loan or | ||||||
7 | loans, using for this purpose the original basis of | ||||||
8 | such property on
the date that it was placed in service | ||||||
9 | in the River Edge Redevelopment Zone. The subtraction | ||||||
10 | modification available to the taxpayer in any
year | ||||||
11 | under this subsection shall be that portion of the | ||||||
12 | total interest paid
by the borrower with respect to | ||||||
13 | such loan attributable to the eligible
property as | ||||||
14 | calculated under the previous sentence. This | ||||||
15 | subparagraph (M) is exempt from the provisions of | ||||||
16 | Section 250; | ||||||
17 | (M-1) For any taxpayer that is a financial | ||||||
18 | organization within the
meaning of Section 304(c) of | ||||||
19 | this Act, an amount included in such total as
interest | ||||||
20 | income from a loan or loans made by such taxpayer to a | ||||||
21 | borrower,
to the extent that such a loan is secured by | ||||||
22 | property which is eligible for
the High Impact | ||||||
23 | Business Investment Credit. To determine the portion | ||||||
24 | of a
loan or loans that is secured by property eligible | ||||||
25 | for a Section 201(h) investment credit to the | ||||||
26 | borrower, the entire principal amount of
the loan or |
| |||||||
| |||||||
1 | loans between the taxpayer and the borrower should be | ||||||
2 | divided into
the basis of the Section 201(h) | ||||||
3 | investment credit property which
secures the loan or | ||||||
4 | loans, using for this purpose the original basis of | ||||||
5 | such
property on the date that it was placed in service | ||||||
6 | in a federally designated
Foreign Trade Zone or | ||||||
7 | Sub-Zone located in Illinois. No taxpayer that is
| ||||||
8 | eligible for the deduction provided in subparagraph | ||||||
9 | (M) of paragraph (2) of
this subsection shall be | ||||||
10 | eligible for the deduction provided under this
| ||||||
11 | subparagraph (M-1). The subtraction modification | ||||||
12 | available to taxpayers in
any year under this | ||||||
13 | subsection shall be that portion of the total interest
| ||||||
14 | paid by the borrower with respect to such loan | ||||||
15 | attributable to the eligible
property as calculated | ||||||
16 | under the previous sentence; | ||||||
17 | (N) Two times any contribution made during the | ||||||
18 | taxable year to a
designated zone organization to the | ||||||
19 | extent that the contribution (i)
qualifies as a | ||||||
20 | charitable contribution under subsection (c) of | ||||||
21 | Section 170
of the Internal Revenue Code and (ii) | ||||||
22 | must, by its terms, be used for a
project approved by | ||||||
23 | the Department of Commerce and Economic Opportunity | ||||||
24 | under Section 11 of the Illinois Enterprise Zone Act | ||||||
25 | or under Section 10-10 of the River Edge Redevelopment | ||||||
26 | Zone Act. This subparagraph (N) is exempt from the |
| |||||||
| |||||||
1 | provisions of Section 250; | ||||||
2 | (O) An amount equal to: (i) 85% for taxable years | ||||||
3 | ending on or before
December 31, 1992, or, a | ||||||
4 | percentage equal to the percentage allowable under
| ||||||
5 | Section 243(a)(1) of the Internal Revenue Code of 1986 | ||||||
6 | for taxable years ending
after December 31, 1992, of | ||||||
7 | the amount by which dividends included in taxable
| ||||||
8 | income and received from a corporation that is not | ||||||
9 | created or organized under
the laws of the United | ||||||
10 | States or any state or political subdivision thereof,
| ||||||
11 | including, for taxable years ending on or after | ||||||
12 | December 31, 1988, dividends
received or deemed | ||||||
13 | received or paid or deemed paid under Sections 951 | ||||||
14 | through
965 of the Internal Revenue Code, exceed the | ||||||
15 | amount of the modification
provided under subparagraph | ||||||
16 | (G) of paragraph (2) of this subsection (b) which
is | ||||||
17 | related to such dividends, and including, for taxable | ||||||
18 | years ending on or after December 31, 2008, dividends | ||||||
19 | received from a captive real estate investment trust; | ||||||
20 | plus (ii) 100% of the amount by which dividends,
| ||||||
21 | included in taxable income and received, including, | ||||||
22 | for taxable years ending on
or after December 31, | ||||||
23 | 1988, dividends received or deemed received or paid or
| ||||||
24 | deemed paid under Sections 951 through 964 of the | ||||||
25 | Internal Revenue Code and including, for taxable years | ||||||
26 | ending on or after December 31, 2008, dividends |
| |||||||
| |||||||
1 | received from a captive real estate investment trust, | ||||||
2 | from
any such corporation specified in clause (i) that | ||||||
3 | would but for the provisions
of Section 1504(b)(3) of | ||||||
4 | the Internal Revenue Code be treated as a member of
the | ||||||
5 | affiliated group which includes the dividend | ||||||
6 | recipient, exceed the amount
of the modification | ||||||
7 | provided under subparagraph (G) of paragraph (2) of | ||||||
8 | this
subsection (b) which is related to such | ||||||
9 | dividends. This subparagraph (O) is exempt from the | ||||||
10 | provisions of Section 250 of this Act; | ||||||
11 | (P) An amount equal to any contribution made to a | ||||||
12 | job training project
established pursuant to the Tax | ||||||
13 | Increment Allocation Redevelopment Act; | ||||||
14 | (Q) An amount equal to the amount of the deduction | ||||||
15 | used to compute the
federal income tax credit for | ||||||
16 | restoration of substantial amounts held under
claim of | ||||||
17 | right for the taxable year pursuant to Section 1341 of | ||||||
18 | the
Internal Revenue Code; | ||||||
19 | (R) On and after July 20, 1999, in the case of an | ||||||
20 | attorney-in-fact with respect to whom an
interinsurer | ||||||
21 | or a reciprocal insurer has made the election under | ||||||
22 | Section 835 of
the Internal Revenue Code, 26 U.S.C. | ||||||
23 | 835, an amount equal to the excess, if
any, of the | ||||||
24 | amounts paid or incurred by that interinsurer or | ||||||
25 | reciprocal insurer
in the taxable year to the | ||||||
26 | attorney-in-fact over the deduction allowed to that
|
| |||||||
| |||||||
1 | interinsurer or reciprocal insurer with respect to the | ||||||
2 | attorney-in-fact under
Section 835(b) of the Internal | ||||||
3 | Revenue Code for the taxable year; the provisions of | ||||||
4 | this subparagraph are exempt from the provisions of | ||||||
5 | Section 250; | ||||||
6 | (S) For taxable years ending on or after December | ||||||
7 | 31, 1997, in the
case of a Subchapter
S corporation, an | ||||||
8 | amount equal to all amounts of income allocable to a
| ||||||
9 | shareholder subject to the Personal Property Tax | ||||||
10 | Replacement Income Tax imposed
by subsections (c) and | ||||||
11 | (d) of Section 201 of this Act, including amounts
| ||||||
12 | allocable to organizations exempt from federal income | ||||||
13 | tax by reason of Section
501(a) of the Internal | ||||||
14 | Revenue Code. This subparagraph (S) is exempt from
the | ||||||
15 | provisions of Section 250; | ||||||
16 | (T) For taxable years 2001 and thereafter, for the | ||||||
17 | taxable year in
which the bonus depreciation deduction
| ||||||
18 | is taken on the taxpayer's federal income tax return | ||||||
19 | under
subsection (k) of Section 168 of the Internal | ||||||
20 | Revenue Code and for each
applicable taxable year | ||||||
21 | thereafter, an amount equal to "x", where: | ||||||
22 | (1) "y" equals the amount of the depreciation | ||||||
23 | deduction taken for the
taxable year
on the | ||||||
24 | taxpayer's federal income tax return on property | ||||||
25 | for which the bonus
depreciation deduction
was | ||||||
26 | taken in any year under subsection (k) of Section |
| |||||||
| |||||||
1 | 168 of the Internal
Revenue Code, but not | ||||||
2 | including the bonus depreciation deduction; | ||||||
3 | (2) for taxable years ending on or before | ||||||
4 | December 31, 2005, "x" equals "y" multiplied by 30 | ||||||
5 | and then divided by 70 (or "y"
multiplied by | ||||||
6 | 0.429); and | ||||||
7 | (3) for taxable years ending after December | ||||||
8 | 31, 2005: | ||||||
9 | (i) for property on which a bonus | ||||||
10 | depreciation deduction of 30% of the adjusted | ||||||
11 | basis was taken, "x" equals "y" multiplied by | ||||||
12 | 30 and then divided by 70 (or "y"
multiplied | ||||||
13 | by 0.429); and | ||||||
14 | (ii) for property on which a bonus | ||||||
15 | depreciation deduction of 50% of the adjusted | ||||||
16 | basis was taken, "x" equals "y" multiplied by | ||||||
17 | 1.0. | ||||||
18 | The aggregate amount deducted under this | ||||||
19 | subparagraph in all taxable
years for any one piece of | ||||||
20 | property may not exceed the amount of the bonus
| ||||||
21 | depreciation deduction
taken on that property on the | ||||||
22 | taxpayer's federal income tax return under
subsection | ||||||
23 | (k) of Section 168 of the Internal Revenue Code. This | ||||||
24 | subparagraph (T) is exempt from the provisions of | ||||||
25 | Section 250; | ||||||
26 | (U) If the taxpayer sells, transfers, abandons, or |
| |||||||
| |||||||
1 | otherwise disposes of
property for which the taxpayer | ||||||
2 | was required in any taxable year to make an
addition | ||||||
3 | modification under subparagraph (E-10), then an amount | ||||||
4 | equal to that
addition modification. | ||||||
5 | If the taxpayer continues to own property through | ||||||
6 | the last day of the last tax year for which the | ||||||
7 | taxpayer may claim a depreciation deduction for | ||||||
8 | federal income tax purposes and for which the taxpayer | ||||||
9 | was required in any taxable year to make an addition | ||||||
10 | modification under subparagraph (E-10), then an amount | ||||||
11 | equal to that addition modification.
| ||||||
12 | The taxpayer is allowed to take the deduction | ||||||
13 | under this subparagraph
only once with respect to any | ||||||
14 | one piece of property. | ||||||
15 | This subparagraph (U) is exempt from the | ||||||
16 | provisions of Section 250; | ||||||
17 | (V) The amount of: (i) any interest income (net of | ||||||
18 | the deductions allocable thereto) taken into account | ||||||
19 | for the taxable year with respect to a transaction | ||||||
20 | with a taxpayer that is required to make an addition | ||||||
21 | modification with respect to such transaction under | ||||||
22 | Section 203(a)(2)(D-17), 203(b)(2)(E-12), | ||||||
23 | 203(c)(2)(G-12), or 203(d)(2)(D-7), but not to exceed | ||||||
24 | the amount of such addition modification,
(ii) any | ||||||
25 | income from intangible property (net of the deductions | ||||||
26 | allocable thereto) taken into account for the taxable |
| |||||||
| |||||||
1 | year with respect to a transaction with a taxpayer | ||||||
2 | that is required to make an addition modification with | ||||||
3 | respect to such transaction under Section | ||||||
4 | 203(a)(2)(D-18), 203(b)(2)(E-13), 203(c)(2)(G-13), or | ||||||
5 | 203(d)(2)(D-8), but not to exceed the amount of such | ||||||
6 | addition modification, and (iii) any insurance premium | ||||||
7 | income (net of deductions allocable thereto) taken | ||||||
8 | into account for the taxable year with respect to a | ||||||
9 | transaction with a taxpayer that is required to make | ||||||
10 | an addition modification with respect to such | ||||||
11 | transaction under Section 203(a)(2)(D-19), Section | ||||||
12 | 203(b)(2)(E-14), Section 203(c)(2)(G-14), or Section | ||||||
13 | 203(d)(2)(D-9), but not to exceed the amount of that | ||||||
14 | addition modification. This subparagraph (V) is exempt | ||||||
15 | from the provisions of Section 250;
| ||||||
16 | (W) An amount equal to the interest income taken | ||||||
17 | into account for the taxable year (net of the | ||||||
18 | deductions allocable thereto) with respect to | ||||||
19 | transactions with (i) a foreign person who would be a | ||||||
20 | member of the taxpayer's unitary business group but | ||||||
21 | for the fact that the foreign person's business | ||||||
22 | activity outside the United States is 80% or more of | ||||||
23 | that person's total business activity and (ii) for | ||||||
24 | taxable years ending on or after December 31, 2008, to | ||||||
25 | a person who would be a member of the same unitary | ||||||
26 | business group but for the fact that the person is |
| |||||||
| |||||||
1 | prohibited under Section 1501(a)(27) from being | ||||||
2 | included in the unitary business group because he or | ||||||
3 | she is ordinarily required to apportion business | ||||||
4 | income under different subsections of Section 304, but | ||||||
5 | not to exceed the addition modification required to be | ||||||
6 | made for the same taxable year under Section | ||||||
7 | 203(b)(2)(E-12) for interest paid, accrued, or | ||||||
8 | incurred, directly or indirectly, to the same person. | ||||||
9 | This subparagraph (W) is exempt from the provisions of | ||||||
10 | Section 250;
| ||||||
11 | (X) An amount equal to the income from intangible | ||||||
12 | property taken into account for the taxable year (net | ||||||
13 | of the deductions allocable thereto) with respect to | ||||||
14 | transactions with (i) a foreign person who would be a | ||||||
15 | member of the taxpayer's unitary business group but | ||||||
16 | for the fact that the foreign person's business | ||||||
17 | activity outside the United States is 80% or more of | ||||||
18 | that person's total business activity and (ii) for | ||||||
19 | taxable years ending on or after December 31, 2008, to | ||||||
20 | a person who would be a member of the same unitary | ||||||
21 | business group but for the fact that the person is | ||||||
22 | prohibited under Section 1501(a)(27) from being | ||||||
23 | included in the unitary business group because he or | ||||||
24 | she is ordinarily required to apportion business | ||||||
25 | income under different subsections of Section 304, but | ||||||
26 | not to exceed the addition modification required to be |
| |||||||
| |||||||
1 | made for the same taxable year under Section | ||||||
2 | 203(b)(2)(E-13) for intangible expenses and costs | ||||||
3 | paid, accrued, or incurred, directly or indirectly, to | ||||||
4 | the same foreign person. This subparagraph (X) is | ||||||
5 | exempt from the provisions of Section 250;
| ||||||
6 | (Y) For taxable years ending on or after December | ||||||
7 | 31, 2011, in the case of a taxpayer who was required to | ||||||
8 | add back any insurance premiums under Section | ||||||
9 | 203(b)(2)(E-14), such taxpayer may elect to subtract | ||||||
10 | that part of a reimbursement received from the | ||||||
11 | insurance company equal to the amount of the expense | ||||||
12 | or loss (including expenses incurred by the insurance | ||||||
13 | company) that would have been taken into account as a | ||||||
14 | deduction for federal income tax purposes if the | ||||||
15 | expense or loss had been uninsured. If a taxpayer | ||||||
16 | makes the election provided for by this subparagraph | ||||||
17 | (Y), the insurer to which the premiums were paid must | ||||||
18 | add back to income the amount subtracted by the | ||||||
19 | taxpayer pursuant to this subparagraph (Y). This | ||||||
20 | subparagraph (Y) is exempt from the provisions of | ||||||
21 | Section 250; and | ||||||
22 | (Z) The difference between the nondeductible | ||||||
23 | controlled foreign corporation dividends under Section | ||||||
24 | 965(e)(3) of the Internal Revenue Code over the | ||||||
25 | taxable income of the taxpayer, computed without | ||||||
26 | regard to Section 965(e)(2)(A) of the Internal Revenue |
| |||||||
| |||||||
1 | Code, and without regard to any net operating loss | ||||||
2 | deduction. This subparagraph (Z) is exempt from the | ||||||
3 | provisions of Section 250. | ||||||
4 | (3) Special rule. For purposes of paragraph (2)(A), | ||||||
5 | "gross income"
in the case of a life insurance company, | ||||||
6 | for tax years ending on and after
December 31, 1994,
and | ||||||
7 | prior to December 31, 2011, shall mean the gross | ||||||
8 | investment income for the taxable year and, for tax years | ||||||
9 | ending on or after December 31, 2011, shall mean all | ||||||
10 | amounts included in life insurance gross income under | ||||||
11 | Section 803(a)(3) of the Internal Revenue Code. | ||||||
12 | (c) Trusts and estates. | ||||||
13 | (1) In general. In the case of a trust or estate, base | ||||||
14 | income means
an amount equal to the taxpayer's taxable | ||||||
15 | income for the taxable year as
modified by paragraph (2). | ||||||
16 | (2) Modifications. Subject to the provisions of | ||||||
17 | paragraph (3), the
taxable income referred to in paragraph | ||||||
18 | (1) shall be modified by adding
thereto the sum of the | ||||||
19 | following amounts: | ||||||
20 | (A) An amount equal to all amounts paid or accrued | ||||||
21 | to the taxpayer
as interest or dividends during the | ||||||
22 | taxable year to the extent excluded
from gross income | ||||||
23 | in the computation of taxable income; | ||||||
24 | (B) In the case of (i) an estate, $600; (ii) a | ||||||
25 | trust which, under
its governing instrument, is |
| |||||||
| |||||||
1 | required to distribute all of its income
currently, | ||||||
2 | $300; and (iii) any other trust, $100, but in each such | ||||||
3 | case,
only to the extent such amount was deducted in | ||||||
4 | the computation of
taxable income; | ||||||
5 | (C) An amount equal to the amount of tax imposed by | ||||||
6 | this Act to the
extent deducted from gross income in | ||||||
7 | the computation of taxable income
for the taxable | ||||||
8 | year; | ||||||
9 | (D) The amount of any net operating loss deduction | ||||||
10 | taken in arriving at
taxable income, other than a net | ||||||
11 | operating loss carried forward from a
taxable year | ||||||
12 | ending prior to December 31, 1986; | ||||||
13 | (E) For taxable years in which a net operating | ||||||
14 | loss carryback or
carryforward from a taxable year | ||||||
15 | ending prior to December 31, 1986 is an
element of | ||||||
16 | taxable income under paragraph (1) of subsection (e) | ||||||
17 | or subparagraph
(E) of paragraph (2) of subsection | ||||||
18 | (e), the amount by which addition
modifications other | ||||||
19 | than those provided by this subparagraph (E) exceeded
| ||||||
20 | subtraction modifications in such taxable year, with | ||||||
21 | the following limitations
applied in the order that | ||||||
22 | they are listed: | ||||||
23 | (i) the addition modification relating to the | ||||||
24 | net operating loss
carried back or forward to the | ||||||
25 | taxable year from any taxable year ending
prior to | ||||||
26 | December 31, 1986 shall be reduced by the amount |
| |||||||
| |||||||
1 | of addition
modification under this subparagraph | ||||||
2 | (E) which related to that net
operating loss and | ||||||
3 | which was taken into account in calculating the | ||||||
4 | base
income of an earlier taxable year, and | ||||||
5 | (ii) the addition modification relating to the | ||||||
6 | net operating loss
carried back or forward to the | ||||||
7 | taxable year from any taxable year ending
prior to | ||||||
8 | December 31, 1986 shall not exceed the amount of | ||||||
9 | such carryback or
carryforward; | ||||||
10 | For taxable years in which there is a net | ||||||
11 | operating loss carryback or
carryforward from more | ||||||
12 | than one other taxable year ending prior to December
| ||||||
13 | 31, 1986, the addition modification provided in this | ||||||
14 | subparagraph (E) shall
be the sum of the amounts | ||||||
15 | computed independently under the preceding
provisions | ||||||
16 | of this subparagraph (E) for each such taxable year; | ||||||
17 | (F) For taxable years ending on or after January | ||||||
18 | 1, 1989, an amount
equal to the tax deducted pursuant | ||||||
19 | to Section 164 of the Internal Revenue
Code if the | ||||||
20 | trust or estate is claiming the same tax for purposes | ||||||
21 | of the
Illinois foreign tax credit under Section 601 | ||||||
22 | of this Act; | ||||||
23 | (G) An amount equal to the amount of the capital | ||||||
24 | gain deduction
allowable under the Internal Revenue | ||||||
25 | Code, to the extent deducted from
gross income in the | ||||||
26 | computation of taxable income; |
| |||||||
| |||||||
1 | (G-5) For taxable years ending after December 31, | ||||||
2 | 1997, an
amount equal to any eligible remediation | ||||||
3 | costs that the trust or estate
deducted in computing | ||||||
4 | adjusted gross income and for which the trust
or | ||||||
5 | estate claims a credit under subsection (l) of Section | ||||||
6 | 201; | ||||||
7 | (G-10) For taxable years 2001 and thereafter, an | ||||||
8 | amount equal to the
bonus depreciation deduction taken | ||||||
9 | on the taxpayer's federal income tax return for the | ||||||
10 | taxable
year under subsection (k) of Section 168 of | ||||||
11 | the Internal Revenue Code; and | ||||||
12 | (G-11) If the taxpayer sells, transfers, abandons, | ||||||
13 | or otherwise disposes of property for which the | ||||||
14 | taxpayer was required in any taxable year to
make an | ||||||
15 | addition modification under subparagraph (G-10), then | ||||||
16 | an amount equal
to the aggregate amount of the | ||||||
17 | deductions taken in all taxable
years under | ||||||
18 | subparagraph (R) with respect to that property. | ||||||
19 | If the taxpayer continues to own property through | ||||||
20 | the last day of the last tax year for which the | ||||||
21 | taxpayer may claim a depreciation deduction for | ||||||
22 | federal income tax purposes and for which the taxpayer | ||||||
23 | was allowed in any taxable year to make a subtraction | ||||||
24 | modification under subparagraph (R), then an amount | ||||||
25 | equal to that subtraction modification.
| ||||||
26 | The taxpayer is required to make the addition |
| |||||||
| |||||||
1 | modification under this
subparagraph
only once with | ||||||
2 | respect to any one piece of property; | ||||||
3 | (G-12) An amount equal to the amount otherwise | ||||||
4 | allowed as a deduction in computing base income for | ||||||
5 | interest paid, accrued, or incurred, directly or | ||||||
6 | indirectly, (i) for taxable years ending on or after | ||||||
7 | December 31, 2004, to a foreign person who would be a | ||||||
8 | member of the same unitary business group but for the | ||||||
9 | fact that the foreign person's business activity | ||||||
10 | outside the United States is 80% or more of the foreign | ||||||
11 | person's total business activity and (ii) for taxable | ||||||
12 | years ending on or after December 31, 2008, to a person | ||||||
13 | who would be a member of the same unitary business | ||||||
14 | group but for the fact that the person is prohibited | ||||||
15 | under Section 1501(a)(27) from being included in the | ||||||
16 | unitary business group because he or she is ordinarily | ||||||
17 | required to apportion business income under different | ||||||
18 | subsections of Section 304. The addition modification | ||||||
19 | required by this subparagraph shall be reduced to the | ||||||
20 | extent that dividends were included in base income of | ||||||
21 | the unitary group for the same taxable year and | ||||||
22 | received by the taxpayer or by a member of the | ||||||
23 | taxpayer's unitary business group (including amounts | ||||||
24 | included in gross income pursuant to Sections 951 | ||||||
25 | through 964 of the Internal Revenue Code and amounts | ||||||
26 | included in gross income under Section 78 of the |
| |||||||
| |||||||
1 | Internal Revenue Code) with respect to the stock of | ||||||
2 | the same person to whom the interest was paid, | ||||||
3 | accrued, or incurred.
| ||||||
4 | This paragraph shall not apply to the following:
| ||||||
5 | (i) an item of interest paid, accrued, or | ||||||
6 | incurred, directly or indirectly, to a person who | ||||||
7 | is subject in a foreign country or state, other | ||||||
8 | than a state which requires mandatory unitary | ||||||
9 | reporting, to a tax on or measured by net income | ||||||
10 | with respect to such interest; or | ||||||
11 | (ii) an item of interest paid, accrued, or | ||||||
12 | incurred, directly or indirectly, to a person if | ||||||
13 | the taxpayer can establish, based on a | ||||||
14 | preponderance of the evidence, both of the | ||||||
15 | following: | ||||||
16 | (a) the person, during the same taxable | ||||||
17 | year, paid, accrued, or incurred, the interest | ||||||
18 | to a person that is not a related member, and | ||||||
19 | (b) the transaction giving rise to the | ||||||
20 | interest expense between the taxpayer and the | ||||||
21 | person did not have as a principal purpose the | ||||||
22 | avoidance of Illinois income tax, and is paid | ||||||
23 | pursuant to a contract or agreement that | ||||||
24 | reflects an arm's-length interest rate and | ||||||
25 | terms; or
| ||||||
26 | (iii) the taxpayer can establish, based on |
| |||||||
| |||||||
1 | clear and convincing evidence, that the interest | ||||||
2 | paid, accrued, or incurred relates to a contract | ||||||
3 | or agreement entered into at arm's-length rates | ||||||
4 | and terms and the principal purpose for the | ||||||
5 | payment is not federal or Illinois tax avoidance; | ||||||
6 | or
| ||||||
7 | (iv) an item of interest paid, accrued, or | ||||||
8 | incurred, directly or indirectly, to a person if | ||||||
9 | the taxpayer establishes by clear and convincing | ||||||
10 | evidence that the adjustments are unreasonable; or | ||||||
11 | if the taxpayer and the Director agree in writing | ||||||
12 | to the application or use of an alternative method | ||||||
13 | of apportionment under Section 304(f).
| ||||||
14 | Nothing in this subsection shall preclude the | ||||||
15 | Director from making any other adjustment | ||||||
16 | otherwise allowed under Section 404 of this Act | ||||||
17 | for any tax year beginning after the effective | ||||||
18 | date of this amendment provided such adjustment is | ||||||
19 | made pursuant to regulation adopted by the | ||||||
20 | Department and such regulations provide methods | ||||||
21 | and standards by which the Department will utilize | ||||||
22 | its authority under Section 404 of this Act;
| ||||||
23 | (G-13) An amount equal to the amount of intangible | ||||||
24 | expenses and costs otherwise allowed as a deduction in | ||||||
25 | computing base income, and that were paid, accrued, or | ||||||
26 | incurred, directly or indirectly, (i) for taxable |
| |||||||
| |||||||
1 | years ending on or after December 31, 2004, to a | ||||||
2 | foreign person who would be a member of the same | ||||||
3 | unitary business group but for the fact that the | ||||||
4 | foreign person's business activity outside the United | ||||||
5 | States is 80% or more of that person's total business | ||||||
6 | activity and (ii) for taxable years ending on or after | ||||||
7 | December 31, 2008, to a person who would be a member of | ||||||
8 | the same unitary business group but for the fact that | ||||||
9 | the person is prohibited under Section 1501(a)(27) | ||||||
10 | from being included in the unitary business group | ||||||
11 | because he or she is ordinarily required to apportion | ||||||
12 | business income under different subsections of Section | ||||||
13 | 304. The addition modification required by this | ||||||
14 | subparagraph shall be reduced to the extent that | ||||||
15 | dividends were included in base income of the unitary | ||||||
16 | group for the same taxable year and received by the | ||||||
17 | taxpayer or by a member of the taxpayer's unitary | ||||||
18 | business group (including amounts included in gross | ||||||
19 | income pursuant to Sections 951 through 964 of the | ||||||
20 | Internal Revenue Code and amounts included in gross | ||||||
21 | income under Section 78 of the Internal Revenue Code) | ||||||
22 | with respect to the stock of the same person to whom | ||||||
23 | the intangible expenses and costs were directly or | ||||||
24 | indirectly paid, incurred, or accrued. The preceding | ||||||
25 | sentence shall not apply to the extent that the same | ||||||
26 | dividends caused a reduction to the addition |
| |||||||
| |||||||
1 | modification required under Section 203(c)(2)(G-12) of | ||||||
2 | this Act. As used in this subparagraph, the term | ||||||
3 | "intangible expenses and costs" includes: (1) | ||||||
4 | expenses, losses, and costs for or related to the | ||||||
5 | direct or indirect acquisition, use, maintenance or | ||||||
6 | management, ownership, sale, exchange, or any other | ||||||
7 | disposition of intangible property; (2) losses | ||||||
8 | incurred, directly or indirectly, from factoring | ||||||
9 | transactions or discounting transactions; (3) royalty, | ||||||
10 | patent, technical, and copyright fees; (4) licensing | ||||||
11 | fees; and (5) other similar expenses and costs. For | ||||||
12 | purposes of this subparagraph, "intangible property" | ||||||
13 | includes patents, patent applications, trade names, | ||||||
14 | trademarks, service marks, copyrights, mask works, | ||||||
15 | trade secrets, and similar types of intangible assets. | ||||||
16 | This paragraph shall not apply to the following: | ||||||
17 | (i) any item of intangible expenses or costs | ||||||
18 | paid, accrued, or incurred, directly or | ||||||
19 | indirectly, from a transaction with a person who | ||||||
20 | is subject in a foreign country or state, other | ||||||
21 | than a state which requires mandatory unitary | ||||||
22 | reporting, to a tax on or measured by net income | ||||||
23 | with respect to such item; or | ||||||
24 | (ii) any item of intangible expense or cost | ||||||
25 | paid, accrued, or incurred, directly or | ||||||
26 | indirectly, if the taxpayer can establish, based |
| |||||||
| |||||||
1 | on a preponderance of the evidence, both of the | ||||||
2 | following: | ||||||
3 | (a) the person during the same taxable | ||||||
4 | year paid, accrued, or incurred, the | ||||||
5 | intangible expense or cost to a person that is | ||||||
6 | not a related member, and | ||||||
7 | (b) the transaction giving rise to the | ||||||
8 | intangible expense or cost between the | ||||||
9 | taxpayer and the person did not have as a | ||||||
10 | principal purpose the avoidance of Illinois | ||||||
11 | income tax, and is paid pursuant to a contract | ||||||
12 | or agreement that reflects arm's-length terms; | ||||||
13 | or | ||||||
14 | (iii) any item of intangible expense or cost | ||||||
15 | paid, accrued, or incurred, directly or | ||||||
16 | indirectly, from a transaction with a person if | ||||||
17 | the taxpayer establishes by clear and convincing | ||||||
18 | evidence, that the adjustments are unreasonable; | ||||||
19 | or if the taxpayer and the Director agree in | ||||||
20 | writing to the application or use of an | ||||||
21 | alternative method of apportionment under Section | ||||||
22 | 304(f);
| ||||||
23 | Nothing in this subsection shall preclude the | ||||||
24 | Director from making any other adjustment | ||||||
25 | otherwise allowed under Section 404 of this Act | ||||||
26 | for any tax year beginning after the effective |
| |||||||
| |||||||
1 | date of this amendment provided such adjustment is | ||||||
2 | made pursuant to regulation adopted by the | ||||||
3 | Department and such regulations provide methods | ||||||
4 | and standards by which the Department will utilize | ||||||
5 | its authority under Section 404 of this Act;
| ||||||
6 | (G-14) For taxable years ending on or after | ||||||
7 | December 31, 2008, an amount equal to the amount of | ||||||
8 | insurance premium expenses and costs otherwise allowed | ||||||
9 | as a deduction in computing base income, and that were | ||||||
10 | paid, accrued, or incurred, directly or indirectly, to | ||||||
11 | a person who would be a member of the same unitary | ||||||
12 | business group but for the fact that the person is | ||||||
13 | prohibited under Section 1501(a)(27) from being | ||||||
14 | included in the unitary business group because he or | ||||||
15 | she is ordinarily required to apportion business | ||||||
16 | income under different subsections of Section 304. The | ||||||
17 | addition modification required by this subparagraph | ||||||
18 | shall be reduced to the extent that dividends were | ||||||
19 | included in base income of the unitary group for the | ||||||
20 | same taxable year and received by the taxpayer or by a | ||||||
21 | member of the taxpayer's unitary business group | ||||||
22 | (including amounts included in gross income under | ||||||
23 | Sections 951 through 964 of the Internal Revenue Code | ||||||
24 | and amounts included in gross income under Section 78 | ||||||
25 | of the Internal Revenue Code) with respect to the | ||||||
26 | stock of the same person to whom the premiums and costs |
| |||||||
| |||||||
1 | were directly or indirectly paid, incurred, or | ||||||
2 | accrued. The preceding sentence does not apply to the | ||||||
3 | extent that the same dividends caused a reduction to | ||||||
4 | the addition modification required under Section | ||||||
5 | 203(c)(2)(G-12) or Section 203(c)(2)(G-13) of this | ||||||
6 | Act; | ||||||
7 | (G-15) An amount equal to the credit allowable to | ||||||
8 | the taxpayer under Section 218(a) of this Act, | ||||||
9 | determined without regard to Section 218(c) of this | ||||||
10 | Act; | ||||||
11 | (G-16) For taxable years ending on or after | ||||||
12 | December 31, 2017, an amount equal to the deduction | ||||||
13 | allowed under Section 199 of the Internal Revenue Code | ||||||
14 | for the taxable year; | ||||||
15 | and by deducting from the total so obtained the sum of the | ||||||
16 | following
amounts: | ||||||
17 | (H) An amount equal to all amounts included in | ||||||
18 | such total pursuant
to the provisions of Sections | ||||||
19 | 402(a), 402(c), 403(a), 403(b), 406(a), 407(a)
and 408 | ||||||
20 | of the Internal Revenue Code or included in such total | ||||||
21 | as
distributions under the provisions of any | ||||||
22 | retirement or disability plan for
employees of any | ||||||
23 | governmental agency or unit, or retirement payments to
| ||||||
24 | retired partners, which payments are excluded in | ||||||
25 | computing net earnings
from self employment by Section | ||||||
26 | 1402 of the Internal Revenue Code and
regulations |
| |||||||
| |||||||
1 | adopted pursuant thereto; | ||||||
2 | (I) The valuation limitation amount; | ||||||
3 | (J) An amount equal to the amount of any tax | ||||||
4 | imposed by this Act
which was refunded to the taxpayer | ||||||
5 | and included in such total for the
taxable year; | ||||||
6 | (K) An amount equal to all amounts included in | ||||||
7 | taxable income as
modified by subparagraphs (A), (B), | ||||||
8 | (C), (D), (E), (F) and (G) which
are exempt from | ||||||
9 | taxation by this State either by reason of its | ||||||
10 | statutes or
Constitution
or by reason of the | ||||||
11 | Constitution, treaties or statutes of the United | ||||||
12 | States;
provided that, in the case of any statute of | ||||||
13 | this State that exempts income
derived from bonds or | ||||||
14 | other obligations from the tax imposed under this Act,
| ||||||
15 | the amount exempted shall be the interest net of bond | ||||||
16 | premium amortization; | ||||||
17 | (L) With the exception of any amounts subtracted | ||||||
18 | under subparagraph
(K),
an amount equal to the sum of | ||||||
19 | all amounts disallowed as
deductions by (i) Sections | ||||||
20 | 171(a)(2) and 265(a)(2) of the Internal Revenue
Code, | ||||||
21 | and all amounts of expenses allocable
to interest and | ||||||
22 | disallowed as deductions by Section 265(a)(1) of the | ||||||
23 | Internal
Revenue Code;
and (ii) for taxable years
| ||||||
24 | ending on or after August 13, 1999, Sections
| ||||||
25 | 171(a)(2), 265,
280C, and 832(b)(5)(B)(i) of the | ||||||
26 | Internal Revenue Code, plus, (iii) for taxable years |
| |||||||
| |||||||
1 | ending on or after December 31, 2011, Section | ||||||
2 | 45G(e)(3) of the Internal Revenue Code and, for | ||||||
3 | taxable years ending on or after December 31, 2008, | ||||||
4 | any amount included in gross income under Section 87 | ||||||
5 | of the Internal Revenue Code; the provisions of this
| ||||||
6 | subparagraph are exempt from the provisions of Section | ||||||
7 | 250; | ||||||
8 | (M) An amount equal to those dividends included in | ||||||
9 | such total
which were paid by a corporation which | ||||||
10 | conducts business operations in a River Edge | ||||||
11 | Redevelopment Zone or zones created under the River | ||||||
12 | Edge Redevelopment Zone Act and
conducts substantially | ||||||
13 | all of its operations in a River Edge Redevelopment | ||||||
14 | Zone or zones. This subparagraph (M) is exempt from | ||||||
15 | the provisions of Section 250; | ||||||
16 | (N) An amount equal to any contribution made to a | ||||||
17 | job training
project established pursuant to the Tax | ||||||
18 | Increment Allocation
Redevelopment Act; | ||||||
19 | (O) An amount equal to those dividends included in | ||||||
20 | such total
that were paid by a corporation that | ||||||
21 | conducts business operations in a
federally designated | ||||||
22 | Foreign Trade Zone or Sub-Zone and that is designated
| ||||||
23 | a High Impact Business located in Illinois; provided | ||||||
24 | that dividends eligible
for the deduction provided in | ||||||
25 | subparagraph (M) of paragraph (2) of this
subsection | ||||||
26 | shall not be eligible for the deduction provided under |
| |||||||
| |||||||
1 | this
subparagraph (O); | ||||||
2 | (P) An amount equal to the amount of the deduction | ||||||
3 | used to compute the
federal income tax credit for | ||||||
4 | restoration of substantial amounts held under
claim of | ||||||
5 | right for the taxable year pursuant to Section 1341 of | ||||||
6 | the
Internal Revenue Code; | ||||||
7 | (Q) For taxable year 1999 and thereafter, an | ||||||
8 | amount equal to the
amount of any
(i) distributions, | ||||||
9 | to the extent includible in gross income for
federal | ||||||
10 | income tax purposes, made to the taxpayer because of
| ||||||
11 | his or her status as a victim of
persecution for racial | ||||||
12 | or religious reasons by Nazi Germany or any other Axis
| ||||||
13 | regime or as an heir of the victim and (ii) items
of | ||||||
14 | income, to the extent
includible in gross income for | ||||||
15 | federal income tax purposes, attributable to,
derived | ||||||
16 | from or in any way related to assets stolen from, | ||||||
17 | hidden from, or
otherwise lost to a victim of
| ||||||
18 | persecution for racial or religious reasons by Nazi
| ||||||
19 | Germany or any other Axis regime
immediately prior to, | ||||||
20 | during, and immediately after World War II, including,
| ||||||
21 | but
not limited to, interest on the proceeds | ||||||
22 | receivable as insurance
under policies issued to a | ||||||
23 | victim of persecution for racial or religious
reasons | ||||||
24 | by Nazi Germany or any other Axis regime by European | ||||||
25 | insurance
companies
immediately prior to and during | ||||||
26 | World War II;
provided, however, this subtraction from |
| |||||||
| |||||||
1 | federal adjusted gross income does not
apply to assets | ||||||
2 | acquired with such assets or with the proceeds from | ||||||
3 | the sale of
such assets; provided, further, this | ||||||
4 | paragraph shall only apply to a taxpayer
who was the | ||||||
5 | first recipient of such assets after their recovery | ||||||
6 | and who is a
victim of
persecution for racial or | ||||||
7 | religious reasons
by Nazi Germany or any other Axis | ||||||
8 | regime or as an heir of the victim. The
amount of and | ||||||
9 | the eligibility for any public assistance, benefit, or
| ||||||
10 | similar entitlement is not affected by the inclusion | ||||||
11 | of items (i) and (ii) of
this paragraph in gross income | ||||||
12 | for federal income tax purposes.
This paragraph is | ||||||
13 | exempt from the provisions of Section 250; | ||||||
14 | (R) For taxable years 2001 and thereafter, for the | ||||||
15 | taxable year in
which the bonus depreciation deduction
| ||||||
16 | is taken on the taxpayer's federal income tax return | ||||||
17 | under
subsection (k) of Section 168 of the Internal | ||||||
18 | Revenue Code and for each
applicable taxable year | ||||||
19 | thereafter, an amount equal to "x", where: | ||||||
20 | (1) "y" equals the amount of the depreciation | ||||||
21 | deduction taken for the
taxable year
on the | ||||||
22 | taxpayer's federal income tax return on property | ||||||
23 | for which the bonus
depreciation deduction
was | ||||||
24 | taken in any year under subsection (k) of Section | ||||||
25 | 168 of the Internal
Revenue Code, but not | ||||||
26 | including the bonus depreciation deduction; |
| |||||||
| |||||||
1 | (2) for taxable years ending on or before | ||||||
2 | December 31, 2005, "x" equals "y" multiplied by 30 | ||||||
3 | and then divided by 70 (or "y"
multiplied by | ||||||
4 | 0.429); and | ||||||
5 | (3) for taxable years ending after December | ||||||
6 | 31, 2005: | ||||||
7 | (i) for property on which a bonus | ||||||
8 | depreciation deduction of 30% of the adjusted | ||||||
9 | basis was taken, "x" equals "y" multiplied by | ||||||
10 | 30 and then divided by 70 (or "y"
multiplied | ||||||
11 | by 0.429); and | ||||||
12 | (ii) for property on which a bonus | ||||||
13 | depreciation deduction of 50% of the adjusted | ||||||
14 | basis was taken, "x" equals "y" multiplied by | ||||||
15 | 1.0. | ||||||
16 | The aggregate amount deducted under this | ||||||
17 | subparagraph in all taxable
years for any one piece of | ||||||
18 | property may not exceed the amount of the bonus
| ||||||
19 | depreciation deduction
taken on that property on the | ||||||
20 | taxpayer's federal income tax return under
subsection | ||||||
21 | (k) of Section 168 of the Internal Revenue Code. This | ||||||
22 | subparagraph (R) is exempt from the provisions of | ||||||
23 | Section 250; | ||||||
24 | (S) If the taxpayer sells, transfers, abandons, or | ||||||
25 | otherwise disposes of
property for which the taxpayer | ||||||
26 | was required in any taxable year to make an
addition |
| |||||||
| |||||||
1 | modification under subparagraph (G-10), then an amount | ||||||
2 | equal to that
addition modification. | ||||||
3 | If the taxpayer continues to own property through | ||||||
4 | the last day of the last tax year for which the | ||||||
5 | taxpayer may claim a depreciation deduction for | ||||||
6 | federal income tax purposes and for which the taxpayer | ||||||
7 | was required in any taxable year to make an addition | ||||||
8 | modification under subparagraph (G-10), then an amount | ||||||
9 | equal to that addition modification.
| ||||||
10 | The taxpayer is allowed to take the deduction | ||||||
11 | under this subparagraph
only once with respect to any | ||||||
12 | one piece of property. | ||||||
13 | This subparagraph (S) is exempt from the | ||||||
14 | provisions of Section 250; | ||||||
15 | (T) The amount of (i) any interest income (net of | ||||||
16 | the deductions allocable thereto) taken into account | ||||||
17 | for the taxable year with respect to a transaction | ||||||
18 | with a taxpayer that is required to make an addition | ||||||
19 | modification with respect to such transaction under | ||||||
20 | Section 203(a)(2)(D-17), 203(b)(2)(E-12), | ||||||
21 | 203(c)(2)(G-12), or 203(d)(2)(D-7), but not to exceed | ||||||
22 | the amount of such addition modification and
(ii) any | ||||||
23 | income from intangible property (net of the deductions | ||||||
24 | allocable thereto) taken into account for the taxable | ||||||
25 | year with respect to a transaction with a taxpayer | ||||||
26 | that is required to make an addition modification with |
| |||||||
| |||||||
1 | respect to such transaction under Section | ||||||
2 | 203(a)(2)(D-18), 203(b)(2)(E-13), 203(c)(2)(G-13), or | ||||||
3 | 203(d)(2)(D-8), but not to exceed the amount of such | ||||||
4 | addition modification. This subparagraph (T) is exempt | ||||||
5 | from the provisions of Section 250;
| ||||||
6 | (U) An amount equal to the interest income taken | ||||||
7 | into account for the taxable year (net of the | ||||||
8 | deductions allocable thereto) with respect to | ||||||
9 | transactions with (i) a foreign person who would be a | ||||||
10 | member of the taxpayer's unitary business group but | ||||||
11 | for the fact the foreign person's business activity | ||||||
12 | outside the United States is 80% or more of that | ||||||
13 | person's total business activity and (ii) for taxable | ||||||
14 | years ending on or after December 31, 2008, to a person | ||||||
15 | who would be a member of the same unitary business | ||||||
16 | group but for the fact that the person is prohibited | ||||||
17 | under Section 1501(a)(27) from being included in the | ||||||
18 | unitary business group because he or she is ordinarily | ||||||
19 | required to apportion business income under different | ||||||
20 | subsections of Section 304, but not to exceed the | ||||||
21 | addition modification required to be made for the same | ||||||
22 | taxable year under Section 203(c)(2)(G-12) for | ||||||
23 | interest paid, accrued, or incurred, directly or | ||||||
24 | indirectly, to the same person. This subparagraph (U) | ||||||
25 | is exempt from the provisions of Section 250; | ||||||
26 | (V) An amount equal to the income from intangible |
| |||||||
| |||||||
1 | property taken into account for the taxable year (net | ||||||
2 | of the deductions allocable thereto) with respect to | ||||||
3 | transactions with (i) a foreign person who would be a | ||||||
4 | member of the taxpayer's unitary business group but | ||||||
5 | for the fact that the foreign person's business | ||||||
6 | activity outside the United States is 80% or more of | ||||||
7 | that person's total business activity and (ii) for | ||||||
8 | taxable years ending on or after December 31, 2008, to | ||||||
9 | a person who would be a member of the same unitary | ||||||
10 | business group but for the fact that the person is | ||||||
11 | prohibited under Section 1501(a)(27) from being | ||||||
12 | included in the unitary business group because he or | ||||||
13 | she is ordinarily required to apportion business | ||||||
14 | income under different subsections of Section 304, but | ||||||
15 | not to exceed the addition modification required to be | ||||||
16 | made for the same taxable year under Section | ||||||
17 | 203(c)(2)(G-13) for intangible expenses and costs | ||||||
18 | paid, accrued, or incurred, directly or indirectly, to | ||||||
19 | the same foreign person. This subparagraph (V) is | ||||||
20 | exempt from the provisions of Section 250;
| ||||||
21 | (W) in the case of an estate, an amount equal to | ||||||
22 | all amounts included in such total pursuant to the | ||||||
23 | provisions of Section 111 of the Internal Revenue Code | ||||||
24 | as a recovery of items previously deducted by the | ||||||
25 | decedent from adjusted gross income in the computation | ||||||
26 | of taxable income. This subparagraph (W) is exempt |
| |||||||
| |||||||
1 | from Section 250; | ||||||
2 | (X) an amount equal to the refund included in such | ||||||
3 | total of any tax deducted for federal income tax | ||||||
4 | purposes, to the extent that deduction was added back | ||||||
5 | under subparagraph (F). This subparagraph (X) is | ||||||
6 | exempt from the provisions of Section 250; | ||||||
7 | (Y) For taxable years ending on or after December | ||||||
8 | 31, 2011, in the case of a taxpayer who was required to | ||||||
9 | add back any insurance premiums under Section | ||||||
10 | 203(c)(2)(G-14), such taxpayer may elect to subtract | ||||||
11 | that part of a reimbursement received from the | ||||||
12 | insurance company equal to the amount of the expense | ||||||
13 | or loss (including expenses incurred by the insurance | ||||||
14 | company) that would have been taken into account as a | ||||||
15 | deduction for federal income tax purposes if the | ||||||
16 | expense or loss had been uninsured. If a taxpayer | ||||||
17 | makes the election provided for by this subparagraph | ||||||
18 | (Y), the insurer to which the premiums were paid must | ||||||
19 | add back to income the amount subtracted by the | ||||||
20 | taxpayer pursuant to this subparagraph (Y). This | ||||||
21 | subparagraph (Y) is exempt from the provisions of | ||||||
22 | Section 250; and | ||||||
23 | (Z) For taxable years beginning after December 31, | ||||||
24 | 2018 and before January 1, 2026, the amount of excess | ||||||
25 | business loss of the taxpayer disallowed as a | ||||||
26 | deduction by Section 461(l)(1)(B) of the Internal |
| |||||||
| |||||||
1 | Revenue Code. | ||||||
2 | (3) Limitation. The amount of any modification | ||||||
3 | otherwise required
under this subsection shall, under | ||||||
4 | regulations prescribed by the
Department, be adjusted by | ||||||
5 | any amounts included therein which were
properly paid, | ||||||
6 | credited, or required to be distributed, or permanently | ||||||
7 | set
aside for charitable purposes pursuant to Internal | ||||||
8 | Revenue Code Section
642(c) during the taxable year. | ||||||
9 | (d) Partnerships. | ||||||
10 | (1) In general. In the case of a partnership, base | ||||||
11 | income means an
amount equal to the taxpayer's taxable | ||||||
12 | income for the taxable year as
modified by paragraph (2). | ||||||
13 | (2) Modifications. The taxable income referred to in | ||||||
14 | paragraph (1)
shall be modified by adding thereto the sum | ||||||
15 | of the following amounts: | ||||||
16 | (A) An amount equal to all amounts paid or accrued | ||||||
17 | to the taxpayer as
interest or dividends during the | ||||||
18 | taxable year to the extent excluded from
gross income | ||||||
19 | in the computation of taxable income; | ||||||
20 | (B) An amount equal to the amount of tax imposed by | ||||||
21 | this Act to the
extent deducted from gross income for | ||||||
22 | the taxable year; | ||||||
23 | (C) The amount of deductions allowed to the | ||||||
24 | partnership pursuant to
Section 707 (c) of the | ||||||
25 | Internal Revenue Code in calculating its taxable |
| |||||||
| |||||||
1 | income; | ||||||
2 | (D) An amount equal to the amount of the capital | ||||||
3 | gain deduction
allowable under the Internal Revenue | ||||||
4 | Code, to the extent deducted from
gross income in the | ||||||
5 | computation of taxable income; | ||||||
6 | (D-5) For taxable years 2001 and thereafter, an | ||||||
7 | amount equal to the
bonus depreciation deduction taken | ||||||
8 | on the taxpayer's federal income tax return for the | ||||||
9 | taxable
year under subsection (k) of Section 168 of | ||||||
10 | the Internal Revenue Code; | ||||||
11 | (D-6) If the taxpayer sells, transfers, abandons, | ||||||
12 | or otherwise disposes of
property for which the | ||||||
13 | taxpayer was required in any taxable year to make an
| ||||||
14 | addition modification under subparagraph (D-5), then | ||||||
15 | an amount equal to the
aggregate amount of the | ||||||
16 | deductions taken in all taxable years
under | ||||||
17 | subparagraph (O) with respect to that property. | ||||||
18 | If the taxpayer continues to own property through | ||||||
19 | the last day of the last tax year for which the | ||||||
20 | taxpayer may claim a depreciation deduction for | ||||||
21 | federal income tax purposes and for which the taxpayer | ||||||
22 | was allowed in any taxable year to make a subtraction | ||||||
23 | modification under subparagraph (O), then an amount | ||||||
24 | equal to that subtraction modification.
| ||||||
25 | The taxpayer is required to make the addition | ||||||
26 | modification under this
subparagraph
only once with |
| |||||||
| |||||||
1 | respect to any one piece of property; | ||||||
2 | (D-7) An amount equal to the amount otherwise | ||||||
3 | allowed as a deduction in computing base income for | ||||||
4 | interest paid, accrued, or incurred, directly or | ||||||
5 | indirectly, (i) for taxable years ending on or after | ||||||
6 | December 31, 2004, to a foreign person who would be a | ||||||
7 | member of the same unitary business group but for the | ||||||
8 | fact the foreign person's business activity outside | ||||||
9 | the United States is 80% or more of the foreign | ||||||
10 | person's total business activity and (ii) for taxable | ||||||
11 | years ending on or after December 31, 2008, to a person | ||||||
12 | who would be a member of the same unitary business | ||||||
13 | group but for the fact that the person is prohibited | ||||||
14 | under Section 1501(a)(27) from being included in the | ||||||
15 | unitary business group because he or she is ordinarily | ||||||
16 | required to apportion business income under different | ||||||
17 | subsections of Section 304. The addition modification | ||||||
18 | required by this subparagraph shall be reduced to the | ||||||
19 | extent that dividends were included in base income of | ||||||
20 | the unitary group for the same taxable year and | ||||||
21 | received by the taxpayer or by a member of the | ||||||
22 | taxpayer's unitary business group (including amounts | ||||||
23 | included in gross income pursuant to Sections 951 | ||||||
24 | through 964 of the Internal Revenue Code and amounts | ||||||
25 | included in gross income under Section 78 of the | ||||||
26 | Internal Revenue Code) with respect to the stock of |
| |||||||
| |||||||
1 | the same person to whom the interest was paid, | ||||||
2 | accrued, or incurred.
| ||||||
3 | This paragraph shall not apply to the following:
| ||||||
4 | (i) an item of interest paid, accrued, or | ||||||
5 | incurred, directly or indirectly, to a person who | ||||||
6 | is subject in a foreign country or state, other | ||||||
7 | than a state which requires mandatory unitary | ||||||
8 | reporting, to a tax on or measured by net income | ||||||
9 | with respect to such interest; or | ||||||
10 | (ii) an item of interest paid, accrued, or | ||||||
11 | incurred, directly or indirectly, to a person if | ||||||
12 | the taxpayer can establish, based on a | ||||||
13 | preponderance of the evidence, both of the | ||||||
14 | following: | ||||||
15 | (a) the person, during the same taxable | ||||||
16 | year, paid, accrued, or incurred, the interest | ||||||
17 | to a person that is not a related member, and | ||||||
18 | (b) the transaction giving rise to the | ||||||
19 | interest expense between the taxpayer and the | ||||||
20 | person did not have as a principal purpose the | ||||||
21 | avoidance of Illinois income tax, and is paid | ||||||
22 | pursuant to a contract or agreement that | ||||||
23 | reflects an arm's-length interest rate and | ||||||
24 | terms; or
| ||||||
25 | (iii) the taxpayer can establish, based on | ||||||
26 | clear and convincing evidence, that the interest |
| |||||||
| |||||||
1 | paid, accrued, or incurred relates to a contract | ||||||
2 | or agreement entered into at arm's-length rates | ||||||
3 | and terms and the principal purpose for the | ||||||
4 | payment is not federal or Illinois tax avoidance; | ||||||
5 | or
| ||||||
6 | (iv) an item of interest paid, accrued, or | ||||||
7 | incurred, directly or indirectly, to a person if | ||||||
8 | the taxpayer establishes by clear and convincing | ||||||
9 | evidence that the adjustments are unreasonable; or | ||||||
10 | if the taxpayer and the Director agree in writing | ||||||
11 | to the application or use of an alternative method | ||||||
12 | of apportionment under Section 304(f).
| ||||||
13 | Nothing in this subsection shall preclude the | ||||||
14 | Director from making any other adjustment | ||||||
15 | otherwise allowed under Section 404 of this Act | ||||||
16 | for any tax year beginning after the effective | ||||||
17 | date of this amendment provided such adjustment is | ||||||
18 | made pursuant to regulation adopted by the | ||||||
19 | Department and such regulations provide methods | ||||||
20 | and standards by which the Department will utilize | ||||||
21 | its authority under Section 404 of this Act; and
| ||||||
22 | (D-8) An amount equal to the amount of intangible | ||||||
23 | expenses and costs otherwise allowed as a deduction in | ||||||
24 | computing base income, and that were paid, accrued, or | ||||||
25 | incurred, directly or indirectly, (i) for taxable | ||||||
26 | years ending on or after December 31, 2004, to a |
| |||||||
| |||||||
1 | foreign person who would be a member of the same | ||||||
2 | unitary business group but for the fact that the | ||||||
3 | foreign person's business activity outside the United | ||||||
4 | States is 80% or more of that person's total business | ||||||
5 | activity and (ii) for taxable years ending on or after | ||||||
6 | December 31, 2008, to a person who would be a member of | ||||||
7 | the same unitary business group but for the fact that | ||||||
8 | the person is prohibited under Section 1501(a)(27) | ||||||
9 | from being included in the unitary business group | ||||||
10 | because he or she is ordinarily required to apportion | ||||||
11 | business income under different subsections of Section | ||||||
12 | 304. The addition modification required by this | ||||||
13 | subparagraph shall be reduced to the extent that | ||||||
14 | dividends were included in base income of the unitary | ||||||
15 | group for the same taxable year and received by the | ||||||
16 | taxpayer or by a member of the taxpayer's unitary | ||||||
17 | business group (including amounts included in gross | ||||||
18 | income pursuant to Sections 951 through 964 of the | ||||||
19 | Internal Revenue Code and amounts included in gross | ||||||
20 | income under Section 78 of the Internal Revenue Code) | ||||||
21 | with respect to the stock of the same person to whom | ||||||
22 | the intangible expenses and costs were directly or | ||||||
23 | indirectly paid, incurred or accrued. The preceding | ||||||
24 | sentence shall not apply to the extent that the same | ||||||
25 | dividends caused a reduction to the addition | ||||||
26 | modification required under Section 203(d)(2)(D-7) of |
| |||||||
| |||||||
1 | this Act. As used in this subparagraph, the term | ||||||
2 | "intangible expenses and costs" includes (1) expenses, | ||||||
3 | losses, and costs for, or related to, the direct or | ||||||
4 | indirect acquisition, use, maintenance or management, | ||||||
5 | ownership, sale, exchange, or any other disposition of | ||||||
6 | intangible property; (2) losses incurred, directly or | ||||||
7 | indirectly, from factoring transactions or discounting | ||||||
8 | transactions; (3) royalty, patent, technical, and | ||||||
9 | copyright fees; (4) licensing fees; and (5) other | ||||||
10 | similar expenses and costs. For purposes of this | ||||||
11 | subparagraph, "intangible property" includes patents, | ||||||
12 | patent applications, trade names, trademarks, service | ||||||
13 | marks, copyrights, mask works, trade secrets, and | ||||||
14 | similar types of intangible assets; | ||||||
15 | This paragraph shall not apply to the following: | ||||||
16 | (i) any item of intangible expenses or costs | ||||||
17 | paid, accrued, or incurred, directly or | ||||||
18 | indirectly, from a transaction with a person who | ||||||
19 | is subject in a foreign country or state, other | ||||||
20 | than a state which requires mandatory unitary | ||||||
21 | reporting, to a tax on or measured by net income | ||||||
22 | with respect to such item; or | ||||||
23 | (ii) any item of intangible expense or cost | ||||||
24 | paid, accrued, or incurred, directly or | ||||||
25 | indirectly, if the taxpayer can establish, based | ||||||
26 | on a preponderance of the evidence, both of the |
| |||||||
| |||||||
1 | following: | ||||||
2 | (a) the person during the same taxable | ||||||
3 | year paid, accrued, or incurred, the | ||||||
4 | intangible expense or cost to a person that is | ||||||
5 | not a related member, and | ||||||
6 | (b) the transaction giving rise to the | ||||||
7 | intangible expense or cost between the | ||||||
8 | taxpayer and the person did not have as a | ||||||
9 | principal purpose the avoidance of Illinois | ||||||
10 | income tax, and is paid pursuant to a contract | ||||||
11 | or agreement that reflects arm's-length terms; | ||||||
12 | or | ||||||
13 | (iii) any item of intangible expense or cost | ||||||
14 | paid, accrued, or incurred, directly or | ||||||
15 | indirectly, from a transaction with a person if | ||||||
16 | the taxpayer establishes by clear and convincing | ||||||
17 | evidence, that the adjustments are unreasonable; | ||||||
18 | or if the taxpayer and the Director agree in | ||||||
19 | writing to the application or use of an | ||||||
20 | alternative method of apportionment under Section | ||||||
21 | 304(f);
| ||||||
22 | Nothing in this subsection shall preclude the | ||||||
23 | Director from making any other adjustment | ||||||
24 | otherwise allowed under Section 404 of this Act | ||||||
25 | for any tax year beginning after the effective | ||||||
26 | date of this amendment provided such adjustment is |
| |||||||
| |||||||
1 | made pursuant to regulation adopted by the | ||||||
2 | Department and such regulations provide methods | ||||||
3 | and standards by which the Department will utilize | ||||||
4 | its authority under Section 404 of this Act;
| ||||||
5 | (D-9) For taxable years ending on or after | ||||||
6 | December 31, 2008, an amount equal to the amount of | ||||||
7 | insurance premium expenses and costs otherwise allowed | ||||||
8 | as a deduction in computing base income, and that were | ||||||
9 | paid, accrued, or incurred, directly or indirectly, to | ||||||
10 | a person who would be a member of the same unitary | ||||||
11 | business group but for the fact that the person is | ||||||
12 | prohibited under Section 1501(a)(27) from being | ||||||
13 | included in the unitary business group because he or | ||||||
14 | she is ordinarily required to apportion business | ||||||
15 | income under different subsections of Section 304. The | ||||||
16 | addition modification required by this subparagraph | ||||||
17 | shall be reduced to the extent that dividends were | ||||||
18 | included in base income of the unitary group for the | ||||||
19 | same taxable year and received by the taxpayer or by a | ||||||
20 | member of the taxpayer's unitary business group | ||||||
21 | (including amounts included in gross income under | ||||||
22 | Sections 951 through 964 of the Internal Revenue Code | ||||||
23 | and amounts included in gross income under Section 78 | ||||||
24 | of the Internal Revenue Code) with respect to the | ||||||
25 | stock of the same person to whom the premiums and costs | ||||||
26 | were directly or indirectly paid, incurred, or |
| |||||||
| |||||||
1 | accrued. The preceding sentence does not apply to the | ||||||
2 | extent that the same dividends caused a reduction to | ||||||
3 | the addition modification required under Section | ||||||
4 | 203(d)(2)(D-7) or Section 203(d)(2)(D-8) of this Act; | ||||||
5 | (D-10) An amount equal to the credit allowable to | ||||||
6 | the taxpayer under Section 218(a) of this Act, | ||||||
7 | determined without regard to Section 218(c) of this | ||||||
8 | Act; | ||||||
9 | (D-11) For taxable years ending on or after | ||||||
10 | December 31, 2017, an amount equal to the deduction | ||||||
11 | allowed under Section 199 of the Internal Revenue Code | ||||||
12 | for the taxable year; | ||||||
13 | and by deducting from the total so obtained the following | ||||||
14 | amounts: | ||||||
15 | (E) The valuation limitation amount; | ||||||
16 | (F) An amount equal to the amount of any tax | ||||||
17 | imposed by this Act which
was refunded to the taxpayer | ||||||
18 | and included in such total for the taxable year; | ||||||
19 | (G) An amount equal to all amounts included in | ||||||
20 | taxable income as
modified by subparagraphs (A), (B), | ||||||
21 | (C) and (D) which are exempt from
taxation by this | ||||||
22 | State either by reason of its statutes or Constitution | ||||||
23 | or
by reason of
the Constitution, treaties or statutes | ||||||
24 | of the United States;
provided that, in the case of any | ||||||
25 | statute of this State that exempts income
derived from | ||||||
26 | bonds or other obligations from the tax imposed under |
| |||||||
| |||||||
1 | this Act,
the amount exempted shall be the interest | ||||||
2 | net of bond premium amortization; | ||||||
3 | (H) Any income of the partnership which | ||||||
4 | constitutes personal service
income as defined in | ||||||
5 | Section 1348(b)(1) of the Internal Revenue Code (as
in | ||||||
6 | effect December 31, 1981) or a reasonable allowance | ||||||
7 | for compensation
paid or accrued for services rendered | ||||||
8 | by partners to the partnership,
whichever is greater; | ||||||
9 | this subparagraph (H) is exempt from the provisions of | ||||||
10 | Section 250; | ||||||
11 | (I) An amount equal to all amounts of income | ||||||
12 | distributable to an entity
subject to the Personal | ||||||
13 | Property Tax Replacement Income Tax imposed by
| ||||||
14 | subsections (c) and (d) of Section 201 of this Act | ||||||
15 | including amounts
distributable to organizations | ||||||
16 | exempt from federal income tax by reason of
Section | ||||||
17 | 501(a) of the Internal Revenue Code; this subparagraph | ||||||
18 | (I) is exempt from the provisions of Section 250; | ||||||
19 | (J) With the exception of any amounts subtracted | ||||||
20 | under subparagraph
(G),
an amount equal to the sum of | ||||||
21 | all amounts disallowed as deductions
by (i) Sections | ||||||
22 | 171(a)(2) , and 265(a)(2) of the Internal Revenue Code, | ||||||
23 | and all amounts of expenses allocable to
interest and | ||||||
24 | disallowed as deductions by Section 265(a)(1) of the | ||||||
25 | Internal
Revenue Code;
and (ii) for taxable years
| ||||||
26 | ending on or after August 13, 1999, Sections
|
| |||||||
| |||||||
1 | 171(a)(2), 265,
280C, and 832(b)(5)(B)(i) of the | ||||||
2 | Internal Revenue Code, plus, (iii) for taxable years | ||||||
3 | ending on or after December 31, 2011, Section | ||||||
4 | 45G(e)(3) of the Internal Revenue Code and, for | ||||||
5 | taxable years ending on or after December 31, 2008, | ||||||
6 | any amount included in gross income under Section 87 | ||||||
7 | of the Internal Revenue Code; the provisions of this
| ||||||
8 | subparagraph are exempt from the provisions of Section | ||||||
9 | 250; | ||||||
10 | (K) An amount equal to those dividends included in | ||||||
11 | such total which were
paid by a corporation which | ||||||
12 | conducts business operations in a River Edge | ||||||
13 | Redevelopment Zone or zones created under the River | ||||||
14 | Edge Redevelopment Zone Act and
conducts substantially | ||||||
15 | all of its operations
from a River Edge Redevelopment | ||||||
16 | Zone or zones. This subparagraph (K) is exempt from | ||||||
17 | the provisions of Section 250; | ||||||
18 | (L) An amount equal to any contribution made to a | ||||||
19 | job training project
established pursuant to the Real | ||||||
20 | Property Tax Increment Allocation
Redevelopment Act; | ||||||
21 | (M) An amount equal to those dividends included in | ||||||
22 | such total
that were paid by a corporation that | ||||||
23 | conducts business operations in a
federally designated | ||||||
24 | Foreign Trade Zone or Sub-Zone and that is designated | ||||||
25 | a
High Impact Business located in Illinois; provided | ||||||
26 | that dividends eligible
for the deduction provided in |
| |||||||
| |||||||
1 | subparagraph (K) of paragraph (2) of this
subsection | ||||||
2 | shall not be eligible for the deduction provided under | ||||||
3 | this
subparagraph (M); | ||||||
4 | (N) An amount equal to the amount of the deduction | ||||||
5 | used to compute the
federal income tax credit for | ||||||
6 | restoration of substantial amounts held under
claim of | ||||||
7 | right for the taxable year pursuant to Section 1341 of | ||||||
8 | the
Internal Revenue Code; | ||||||
9 | (O) For taxable years 2001 and thereafter, for the | ||||||
10 | taxable year in
which the bonus depreciation deduction
| ||||||
11 | is taken on the taxpayer's federal income tax return | ||||||
12 | under
subsection (k) of Section 168 of the Internal | ||||||
13 | Revenue Code and for each
applicable taxable year | ||||||
14 | thereafter, an amount equal to "x", where: | ||||||
15 | (1) "y" equals the amount of the depreciation | ||||||
16 | deduction taken for the
taxable year
on the | ||||||
17 | taxpayer's federal income tax return on property | ||||||
18 | for which the bonus
depreciation deduction
was | ||||||
19 | taken in any year under subsection (k) of Section | ||||||
20 | 168 of the Internal
Revenue Code, but not | ||||||
21 | including the bonus depreciation deduction; | ||||||
22 | (2) for taxable years ending on or before | ||||||
23 | December 31, 2005, "x" equals "y" multiplied by 30 | ||||||
24 | and then divided by 70 (or "y"
multiplied by | ||||||
25 | 0.429); and | ||||||
26 | (3) for taxable years ending after December |
| |||||||
| |||||||
1 | 31, 2005: | ||||||
2 | (i) for property on which a bonus | ||||||
3 | depreciation deduction of 30% of the adjusted | ||||||
4 | basis was taken, "x" equals "y" multiplied by | ||||||
5 | 30 and then divided by 70 (or "y"
multiplied | ||||||
6 | by 0.429); and | ||||||
7 | (ii) for property on which a bonus | ||||||
8 | depreciation deduction of 50% of the adjusted | ||||||
9 | basis was taken, "x" equals "y" multiplied by | ||||||
10 | 1.0. | ||||||
11 | The aggregate amount deducted under this | ||||||
12 | subparagraph in all taxable
years for any one piece of | ||||||
13 | property may not exceed the amount of the bonus
| ||||||
14 | depreciation deduction
taken on that property on the | ||||||
15 | taxpayer's federal income tax return under
subsection | ||||||
16 | (k) of Section 168 of the Internal Revenue Code. This | ||||||
17 | subparagraph (O) is exempt from the provisions of | ||||||
18 | Section 250; | ||||||
19 | (P) If the taxpayer sells, transfers, abandons, or | ||||||
20 | otherwise disposes of
property for which the taxpayer | ||||||
21 | was required in any taxable year to make an
addition | ||||||
22 | modification under subparagraph (D-5), then an amount | ||||||
23 | equal to that
addition modification. | ||||||
24 | If the taxpayer continues to own property through | ||||||
25 | the last day of the last tax year for which the | ||||||
26 | taxpayer may claim a depreciation deduction for |
| |||||||
| |||||||
1 | federal income tax purposes and for which the taxpayer | ||||||
2 | was required in any taxable year to make an addition | ||||||
3 | modification under subparagraph (D-5), then an amount | ||||||
4 | equal to that addition modification.
| ||||||
5 | The taxpayer is allowed to take the deduction | ||||||
6 | under this subparagraph
only once with respect to any | ||||||
7 | one piece of property. | ||||||
8 | This subparagraph (P) is exempt from the | ||||||
9 | provisions of Section 250; | ||||||
10 | (Q) The amount of (i) any interest income (net of | ||||||
11 | the deductions allocable thereto) taken into account | ||||||
12 | for the taxable year with respect to a transaction | ||||||
13 | with a taxpayer that is required to make an addition | ||||||
14 | modification with respect to such transaction under | ||||||
15 | Section 203(a)(2)(D-17), 203(b)(2)(E-12), | ||||||
16 | 203(c)(2)(G-12), or 203(d)(2)(D-7), but not to exceed | ||||||
17 | the amount of such addition modification and
(ii) any | ||||||
18 | income from intangible property (net of the deductions | ||||||
19 | allocable thereto) taken into account for the taxable | ||||||
20 | year with respect to a transaction with a taxpayer | ||||||
21 | that is required to make an addition modification with | ||||||
22 | respect to such transaction under Section | ||||||
23 | 203(a)(2)(D-18), 203(b)(2)(E-13), 203(c)(2)(G-13), or | ||||||
24 | 203(d)(2)(D-8), but not to exceed the amount of such | ||||||
25 | addition modification. This subparagraph (Q) is exempt | ||||||
26 | from Section 250;
|
| |||||||
| |||||||
1 | (R) An amount equal to the interest income taken | ||||||
2 | into account for the taxable year (net of the | ||||||
3 | deductions allocable thereto) with respect to | ||||||
4 | transactions with (i) a foreign person who would be a | ||||||
5 | member of the taxpayer's unitary business group but | ||||||
6 | for the fact that the foreign person's business | ||||||
7 | activity outside the United States is 80% or more of | ||||||
8 | that person's total business activity and (ii) for | ||||||
9 | taxable years ending on or after December 31, 2008, to | ||||||
10 | a person who would be a member of the same unitary | ||||||
11 | business group but for the fact that the person is | ||||||
12 | prohibited under Section 1501(a)(27) from being | ||||||
13 | included in the unitary business group because he or | ||||||
14 | she is ordinarily required to apportion business | ||||||
15 | income under different subsections of Section 304, but | ||||||
16 | not to exceed the addition modification required to be | ||||||
17 | made for the same taxable year under Section | ||||||
18 | 203(d)(2)(D-7) for interest paid, accrued, or | ||||||
19 | incurred, directly or indirectly, to the same person. | ||||||
20 | This subparagraph (R) is exempt from Section 250; | ||||||
21 | (S) An amount equal to the income from intangible | ||||||
22 | property taken into account for the taxable year (net | ||||||
23 | of the deductions allocable thereto) with respect to | ||||||
24 | transactions with (i) a foreign person who would be a | ||||||
25 | member of the taxpayer's unitary business group but | ||||||
26 | for the fact that the foreign person's business |
| |||||||
| |||||||
1 | activity outside the United States is 80% or more of | ||||||
2 | that person's total business activity and (ii) for | ||||||
3 | taxable years ending on or after December 31, 2008, to | ||||||
4 | a person who would be a member of the same unitary | ||||||
5 | business group but for the fact that the person is | ||||||
6 | prohibited under Section 1501(a)(27) from being | ||||||
7 | included in the unitary business group because he or | ||||||
8 | she is ordinarily required to apportion business | ||||||
9 | income under different subsections of Section 304, but | ||||||
10 | not to exceed the addition modification required to be | ||||||
11 | made for the same taxable year under Section | ||||||
12 | 203(d)(2)(D-8) for intangible expenses and costs paid, | ||||||
13 | accrued, or incurred, directly or indirectly, to the | ||||||
14 | same person. This subparagraph (S) is exempt from | ||||||
15 | Section 250; and
| ||||||
16 | (T) For taxable years ending on or after December | ||||||
17 | 31, 2011, in the case of a taxpayer who was required to | ||||||
18 | add back any insurance premiums under Section | ||||||
19 | 203(d)(2)(D-9), such taxpayer may elect to subtract | ||||||
20 | that part of a reimbursement received from the | ||||||
21 | insurance company equal to the amount of the expense | ||||||
22 | or loss (including expenses incurred by the insurance | ||||||
23 | company) that would have been taken into account as a | ||||||
24 | deduction for federal income tax purposes if the | ||||||
25 | expense or loss had been uninsured. If a taxpayer | ||||||
26 | makes the election provided for by this subparagraph |
| |||||||
| |||||||
1 | (T), the insurer to which the premiums were paid must | ||||||
2 | add back to income the amount subtracted by the | ||||||
3 | taxpayer pursuant to this subparagraph (T). This | ||||||
4 | subparagraph (T) is exempt from the provisions of | ||||||
5 | Section 250. | ||||||
6 | (e) Gross income; adjusted gross income; taxable income. | ||||||
7 | (1) In general. Subject to the provisions of paragraph | ||||||
8 | (2) and
subsection (b)(3), for purposes of this Section | ||||||
9 | and Section 803(e), a
taxpayer's gross income, adjusted | ||||||
10 | gross income, or taxable income for
the taxable year shall | ||||||
11 | mean the amount of gross income, adjusted gross
income or | ||||||
12 | taxable income properly reportable for federal income tax
| ||||||
13 | purposes for the taxable year under the provisions of the | ||||||
14 | Internal
Revenue Code. Taxable income may be less than | ||||||
15 | zero. However, for taxable
years ending on or after | ||||||
16 | December 31, 1986, net operating loss
carryforwards from | ||||||
17 | taxable years ending prior to December 31, 1986, may not
| ||||||
18 | exceed the sum of federal taxable income for the taxable | ||||||
19 | year before net
operating loss deduction, plus the excess | ||||||
20 | of addition modifications over
subtraction modifications | ||||||
21 | for the taxable year. For taxable years ending
prior to | ||||||
22 | December 31, 1986, taxable income may never be an amount | ||||||
23 | in excess
of the net operating loss for the taxable year as | ||||||
24 | defined in subsections
(c) and (d) of Section 172 of the | ||||||
25 | Internal Revenue Code, provided that when
taxable income |
| |||||||
| |||||||
1 | of a corporation (other than a Subchapter S corporation),
| ||||||
2 | trust, or estate is less than zero and addition | ||||||
3 | modifications, other than
those provided by subparagraph | ||||||
4 | (E) of paragraph (2) of subsection (b) for
corporations or | ||||||
5 | subparagraph (E) of paragraph (2) of subsection (c) for
| ||||||
6 | trusts and estates, exceed subtraction modifications, an | ||||||
7 | addition
modification must be made under those | ||||||
8 | subparagraphs for any other taxable
year to which the | ||||||
9 | taxable income less than zero (net operating loss) is
| ||||||
10 | applied under Section 172 of the Internal Revenue Code or | ||||||
11 | under
subparagraph (E) of paragraph (2) of this subsection | ||||||
12 | (e) applied in
conjunction with Section 172 of the | ||||||
13 | Internal Revenue Code. | ||||||
14 | (2) Special rule. For purposes of paragraph (1) of | ||||||
15 | this subsection,
the taxable income properly reportable | ||||||
16 | for federal income tax purposes
shall mean: | ||||||
17 | (A) Certain life insurance companies. In the case | ||||||
18 | of a life
insurance company subject to the tax imposed | ||||||
19 | by Section 801 of the
Internal Revenue Code, life | ||||||
20 | insurance company taxable income, plus the
amount of | ||||||
21 | distribution from pre-1984 policyholder surplus | ||||||
22 | accounts as
calculated under Section 815a of the | ||||||
23 | Internal Revenue Code; | ||||||
24 | (B) Certain other insurance companies. In the case | ||||||
25 | of mutual
insurance companies subject to the tax | ||||||
26 | imposed by Section 831 of the
Internal Revenue Code, |
| |||||||
| |||||||
1 | insurance company taxable income; | ||||||
2 | (C) Regulated investment companies. In the case of | ||||||
3 | a regulated
investment company subject to the tax | ||||||
4 | imposed by Section 852 of the
Internal Revenue Code, | ||||||
5 | investment company taxable income; | ||||||
6 | (D) Real estate investment trusts. In the case of | ||||||
7 | a real estate
investment trust subject to the tax | ||||||
8 | imposed by Section 857 of the
Internal Revenue Code, | ||||||
9 | real estate investment trust taxable income; | ||||||
10 | (E) Consolidated corporations. In the case of a | ||||||
11 | corporation which
is a member of an affiliated group | ||||||
12 | of corporations filing a consolidated
income tax | ||||||
13 | return for the taxable year for federal income tax | ||||||
14 | purposes,
taxable income determined as if such | ||||||
15 | corporation had filed a separate
return for federal | ||||||
16 | income tax purposes for the taxable year and each
| ||||||
17 | preceding taxable year for which it was a member of an | ||||||
18 | affiliated group.
For purposes of this subparagraph, | ||||||
19 | the taxpayer's separate taxable
income shall be | ||||||
20 | determined as if the election provided by Section
| ||||||
21 | 243(b)(2) of the Internal Revenue Code had been in | ||||||
22 | effect for all such years; | ||||||
23 | (F) Cooperatives. In the case of a cooperative | ||||||
24 | corporation or
association, the taxable income of such | ||||||
25 | organization determined in
accordance with the | ||||||
26 | provisions of Section 1381 through 1388 of the
|
| |||||||
| |||||||
1 | Internal Revenue Code, but without regard to the | ||||||
2 | prohibition against offsetting losses from patronage | ||||||
3 | activities against income from nonpatronage | ||||||
4 | activities; except that a cooperative corporation or | ||||||
5 | association may make an election to follow its federal | ||||||
6 | income tax treatment of patronage losses and | ||||||
7 | nonpatronage losses. In the event such election is | ||||||
8 | made, such losses shall be computed and carried over | ||||||
9 | in a manner consistent with subsection (a) of Section | ||||||
10 | 207 of this Act and apportioned by the apportionment | ||||||
11 | factor reported by the cooperative on its Illinois | ||||||
12 | income tax return filed for the taxable year in which | ||||||
13 | the losses are incurred. The election shall be | ||||||
14 | effective for all taxable years with original returns | ||||||
15 | due on or after the date of the election. In addition, | ||||||
16 | the cooperative may file an amended return or returns, | ||||||
17 | as allowed under this Act, to provide that the | ||||||
18 | election shall be effective for losses incurred or | ||||||
19 | carried forward for taxable years occurring prior to | ||||||
20 | the date of the election. Once made, the election may | ||||||
21 | only be revoked upon approval of the Director. The | ||||||
22 | Department shall adopt rules setting forth | ||||||
23 | requirements for documenting the elections and any | ||||||
24 | resulting Illinois net loss and the standards to be | ||||||
25 | used by the Director in evaluating requests to revoke | ||||||
26 | elections. Public Act 96-932 is declaratory of |
| |||||||
| |||||||
1 | existing law; | ||||||
2 | (G) Subchapter S corporations. In the case of: (i) | ||||||
3 | a Subchapter S
corporation for which there is in | ||||||
4 | effect an election for the taxable year
under Section | ||||||
5 | 1362 of the Internal Revenue Code, the taxable income | ||||||
6 | of such
corporation determined in accordance with | ||||||
7 | Section 1363(b) of the Internal
Revenue Code, except | ||||||
8 | that taxable income shall take into
account those | ||||||
9 | items which are required by Section 1363(b)(1) of the
| ||||||
10 | Internal Revenue Code to be separately stated; and | ||||||
11 | (ii) a Subchapter
S corporation for which there is in | ||||||
12 | effect a federal election to opt out of
the provisions | ||||||
13 | of the Subchapter S Revision Act of 1982 and have | ||||||
14 | applied
instead the prior federal Subchapter S rules | ||||||
15 | as in effect on July 1, 1982,
the taxable income of | ||||||
16 | such corporation determined in accordance with the
| ||||||
17 | federal Subchapter S rules as in effect on July 1, | ||||||
18 | 1982; and | ||||||
19 | (H) Partnerships. In the case of a partnership, | ||||||
20 | taxable income
determined in accordance with Section | ||||||
21 | 703 of the Internal Revenue Code,
except that taxable | ||||||
22 | income shall take into account those items which are
| ||||||
23 | required by Section 703(a)(1) to be separately stated | ||||||
24 | but which would be
taken into account by an individual | ||||||
25 | in calculating his taxable income. | ||||||
26 | (3) Recapture of business expenses on disposition of |
| |||||||
| |||||||
1 | asset or business. Notwithstanding any other law to the | ||||||
2 | contrary, if in prior years income from an asset or | ||||||
3 | business has been classified as business income and in a | ||||||
4 | later year is demonstrated to be non-business income, then | ||||||
5 | all expenses, without limitation, deducted in such later | ||||||
6 | year and in the 2 immediately preceding taxable years | ||||||
7 | related to that asset or business that generated the | ||||||
8 | non-business income shall be added back and recaptured as | ||||||
9 | business income in the year of the disposition of the | ||||||
10 | asset or business. Such amount shall be apportioned to | ||||||
11 | Illinois using the greater of the apportionment fraction | ||||||
12 | computed for the business under Section 304 of this Act | ||||||
13 | for the taxable year or the average of the apportionment | ||||||
14 | fractions computed for the business under Section 304 of | ||||||
15 | this Act for the taxable year and for the 2 immediately | ||||||
16 | preceding taxable years.
| ||||||
17 | (f) Valuation limitation amount. | ||||||
18 | (1) In general. The valuation limitation amount | ||||||
19 | referred to in
subsections (a)(2)(G), (c)(2)(I) and | ||||||
20 | (d)(2)(E) is an amount equal to: | ||||||
21 | (A) The sum of the pre-August 1, 1969 appreciation | ||||||
22 | amounts (to the
extent consisting of gain reportable | ||||||
23 | under the provisions of Section
1245 or 1250 of the | ||||||
24 | Internal Revenue Code) for all property in respect
of | ||||||
25 | which such gain was reported for the taxable year; |
| |||||||
| |||||||
1 | plus | ||||||
2 | (B) The lesser of (i) the sum of the pre-August 1, | ||||||
3 | 1969 appreciation
amounts (to the extent consisting of | ||||||
4 | capital gain) for all property in
respect of which | ||||||
5 | such gain was reported for federal income tax purposes
| ||||||
6 | for the taxable year, or (ii) the net capital gain for | ||||||
7 | the taxable year,
reduced in either case by any amount | ||||||
8 | of such gain included in the amount
determined under | ||||||
9 | subsection (a)(2)(F) or (c)(2)(H). | ||||||
10 | (2) Pre-August 1, 1969 appreciation amount. | ||||||
11 | (A) If the fair market value of property referred | ||||||
12 | to in paragraph
(1) was readily ascertainable on | ||||||
13 | August 1, 1969, the pre-August 1, 1969
appreciation | ||||||
14 | amount for such property is the lesser of (i) the | ||||||
15 | excess of
such fair market value over the taxpayer's | ||||||
16 | basis (for determining gain)
for such property on that | ||||||
17 | date (determined under the Internal Revenue
Code as in | ||||||
18 | effect on that date), or (ii) the total gain realized | ||||||
19 | and
reportable for federal income tax purposes in | ||||||
20 | respect of the sale,
exchange or other disposition of | ||||||
21 | such property. | ||||||
22 | (B) If the fair market value of property referred | ||||||
23 | to in paragraph
(1) was not readily ascertainable on | ||||||
24 | August 1, 1969, the pre-August 1,
1969 appreciation | ||||||
25 | amount for such property is that amount which bears
| ||||||
26 | the same ratio to the total gain reported in respect of |
| |||||||
| |||||||
1 | the property for
federal income tax purposes for the | ||||||
2 | taxable year, as the number of full
calendar months in | ||||||
3 | that part of the taxpayer's holding period for the
| ||||||
4 | property ending July 31, 1969 bears to the number of | ||||||
5 | full calendar
months in the taxpayer's entire holding | ||||||
6 | period for the
property. | ||||||
7 | (C) The Department shall prescribe such | ||||||
8 | regulations as may be
necessary to carry out the | ||||||
9 | purposes of this paragraph. | ||||||
10 | (g) Double deductions. Unless specifically provided | ||||||
11 | otherwise, nothing
in this Section shall permit the same item | ||||||
12 | to be deducted more than once. | ||||||
13 | (h) Legislative intention. Except as expressly provided by | ||||||
14 | this
Section there shall be no modifications or limitations on | ||||||
15 | the amounts
of income, gain, loss or deduction taken into | ||||||
16 | account in determining
gross income, adjusted gross income or | ||||||
17 | taxable income for federal income
tax purposes for the taxable | ||||||
18 | year, or in the amount of such items
entering into the | ||||||
19 | computation of base income and net income under this
Act for | ||||||
20 | such taxable year, whether in respect of property values as of
| ||||||
21 | August 1, 1969 or otherwise. | ||||||
22 | (Source: P.A. 100-22, eff. 7-6-17; 100-905, eff. 8-17-18; | ||||||
23 | 101-9, eff. 6-5-19; 101-81, eff. 7-12-19; revised 9-20-19.)
|
| |||||||
| |||||||
1 | (35 ILCS 5/901)
| ||||||
2 | (Text of Section without the changes made by P.A. 101-8, | ||||||
3 | which did not take effect (see Section 99 of P.A. 101-8)) | ||||||
4 | Sec. 901. Collection authority. | ||||||
5 | (a) In general. The Department shall collect the taxes | ||||||
6 | imposed by this Act. The Department
shall collect certified | ||||||
7 | past due child support amounts under Section 2505-650
of the | ||||||
8 | Department of Revenue Law of the
Civil Administrative Code of | ||||||
9 | Illinois. Except as
provided in subsections (b), (c), (e), | ||||||
10 | (f), (g), and (h) of this Section, money collected
pursuant to | ||||||
11 | subsections (a) and (b) of Section 201 of this Act shall be
| ||||||
12 | paid into the General Revenue Fund in the State treasury; | ||||||
13 | money
collected pursuant to subsections (c) and (d) of Section | ||||||
14 | 201 of this Act
shall be paid into the Personal Property Tax | ||||||
15 | Replacement Fund, a special
fund in the State Treasury; and | ||||||
16 | money collected under Section 2505-650 of the
Department of | ||||||
17 | Revenue Law of the
Civil Administrative Code of Illinois shall | ||||||
18 | be paid
into the
Child Support Enforcement Trust Fund, a | ||||||
19 | special fund outside the State
Treasury, or
to the State
| ||||||
20 | Disbursement Unit established under Section 10-26 of the | ||||||
21 | Illinois Public Aid
Code, as directed by the Department of | ||||||
22 | Healthcare and Family Services. | ||||||
23 | (b) Local Government Distributive Fund. Beginning August | ||||||
24 | 1, 2017, the Treasurer shall transfer each month from the | ||||||
25 | General Revenue Fund to the Local Government Distributive Fund | ||||||
26 | an amount equal to the sum of : (i) 6.06% (10% of the ratio of |
| |||||||
| |||||||
1 | the 3% individual income tax rate prior to 2011 to the 4.95% | ||||||
2 | individual income tax rate after July 1, 2017) of the net | ||||||
3 | revenue realized from the tax imposed by subsections (a) and | ||||||
4 | (b) of Section 201 of this Act upon individuals, trusts, and | ||||||
5 | estates during the preceding month ; and (ii) 6.85% (10% of the | ||||||
6 | ratio of the 4.8% corporate income tax rate prior to 2011 to | ||||||
7 | the 7% corporate income tax rate after July 1, 2017) of the net | ||||||
8 | revenue realized from the tax imposed by subsections (a) and | ||||||
9 | (b) of Section 201 of this Act upon corporations during the | ||||||
10 | preceding month ; and (iii) beginning February 1, 2022, 6.06% | ||||||
11 | of the net revenue realized from the tax imposed by subsection | ||||||
12 | (p) of Section 201 of this Act upon electing pass-through | ||||||
13 | entities . Net revenue realized for a month shall be defined as | ||||||
14 | the
revenue from the tax imposed by subsections (a) and (b) of | ||||||
15 | Section 201 of this
Act which is deposited in the General | ||||||
16 | Revenue Fund, the Education Assistance
Fund, the Income Tax | ||||||
17 | Surcharge Local Government Distributive Fund, the Fund for the | ||||||
18 | Advancement of Education, and the Commitment to Human Services | ||||||
19 | Fund during the
month minus the amount paid out of the General | ||||||
20 | Revenue Fund in State warrants
during that same month as | ||||||
21 | refunds to taxpayers for overpayment of liability
under the | ||||||
22 | tax imposed by subsections (a) and (b) of Section 201 of this | ||||||
23 | Act. | ||||||
24 | Notwithstanding any provision of law to the contrary, | ||||||
25 | beginning on July 6, 2017 (the effective date of Public Act | ||||||
26 | 100-23), those amounts required under this subsection (b) to |
| |||||||
| |||||||
1 | be transferred by the Treasurer into the Local Government | ||||||
2 | Distributive Fund from the General Revenue Fund shall be | ||||||
3 | directly deposited into the Local Government Distributive Fund | ||||||
4 | as the revenue is realized from the tax imposed by subsections | ||||||
5 | (a) and (b) of Section 201 of this Act. | ||||||
6 | For State fiscal year 2020 only, notwithstanding any | ||||||
7 | provision of law to the contrary, the total amount of revenue | ||||||
8 | and deposits under this Section attributable to revenues | ||||||
9 | realized during State fiscal year 2020 shall be reduced by 5%. | ||||||
10 | (c) Deposits Into Income Tax Refund Fund. | ||||||
11 | (1) Beginning on January 1, 1989 and thereafter, the | ||||||
12 | Department shall
deposit a percentage of the amounts | ||||||
13 | collected pursuant to subsections (a)
and (b)(1), (2), and | ||||||
14 | (3) of Section 201 of this Act into a fund in the State
| ||||||
15 | treasury known as the Income Tax Refund Fund. Beginning | ||||||
16 | with State fiscal year 1990 and for each fiscal year
| ||||||
17 | thereafter, the percentage deposited into the Income Tax | ||||||
18 | Refund Fund during a
fiscal year shall be the Annual | ||||||
19 | Percentage. For fiscal year 2011, the Annual Percentage | ||||||
20 | shall be 8.75%. For fiscal year 2012, the Annual | ||||||
21 | Percentage shall be 8.75%. For fiscal year 2013, the | ||||||
22 | Annual Percentage shall be 9.75%. For fiscal year 2014, | ||||||
23 | the Annual Percentage shall be 9.5%. For fiscal year 2015, | ||||||
24 | the Annual Percentage shall be 10%. For fiscal year 2018, | ||||||
25 | the Annual Percentage shall be 9.8%. For fiscal year 2019, | ||||||
26 | the Annual Percentage shall be 9.7%. For fiscal year 2020, |
| |||||||
| |||||||
1 | the Annual Percentage shall be 9.5%. For fiscal year 2021, | ||||||
2 | the Annual Percentage shall be 9%. For all other
fiscal | ||||||
3 | years, the
Annual Percentage shall be calculated as a | ||||||
4 | fraction, the numerator of which
shall be the amount of | ||||||
5 | refunds approved for payment by the Department during
the | ||||||
6 | preceding fiscal year as a result of overpayment of tax | ||||||
7 | liability under
subsections (a) and (b)(1), (2), and (3) | ||||||
8 | of Section 201 of this Act plus the
amount of such refunds | ||||||
9 | remaining approved but unpaid at the end of the
preceding | ||||||
10 | fiscal year, minus the amounts transferred into the Income | ||||||
11 | Tax
Refund Fund from the Tobacco Settlement Recovery Fund, | ||||||
12 | and
the denominator of which shall be the amounts which | ||||||
13 | will be collected pursuant
to subsections (a) and (b)(1), | ||||||
14 | (2), and (3) of Section 201 of this Act during
the | ||||||
15 | preceding fiscal year; except that in State fiscal year | ||||||
16 | 2002, the Annual
Percentage shall in no event exceed 7.6%. | ||||||
17 | The Director of Revenue shall
certify the Annual | ||||||
18 | Percentage to the Comptroller on the last business day of
| ||||||
19 | the fiscal year immediately preceding the fiscal year for | ||||||
20 | which it is to be
effective. | ||||||
21 | (2) Beginning on January 1, 1989 and thereafter, the | ||||||
22 | Department shall
deposit a percentage of the amounts | ||||||
23 | collected pursuant to subsections (a)
and (b)(6), (7), and | ||||||
24 | (8), (c) and (d) of Section 201
of this Act into a fund in | ||||||
25 | the State treasury known as the Income Tax
Refund Fund. | ||||||
26 | Beginning
with State fiscal year 1990 and for each fiscal |
| |||||||
| |||||||
1 | year thereafter, the
percentage deposited into the Income | ||||||
2 | Tax Refund Fund during a fiscal year
shall be the Annual | ||||||
3 | Percentage. For fiscal year 2011, the Annual Percentage | ||||||
4 | shall be 17.5%. For fiscal year 2012, the Annual | ||||||
5 | Percentage shall be 17.5%. For fiscal year 2013, the | ||||||
6 | Annual Percentage shall be 14%. For fiscal year 2014, the | ||||||
7 | Annual Percentage shall be 13.4%. For fiscal year 2015, | ||||||
8 | the Annual Percentage shall be 14%. For fiscal year 2018, | ||||||
9 | the Annual Percentage shall be 17.5%. For fiscal year | ||||||
10 | 2019, the Annual Percentage shall be 15.5%. For fiscal | ||||||
11 | year 2020, the Annual Percentage shall be 14.25%. For | ||||||
12 | fiscal year 2021, the Annual Percentage shall be 14%. For | ||||||
13 | all other fiscal years, the Annual
Percentage shall be | ||||||
14 | calculated
as a fraction, the numerator of which shall be | ||||||
15 | the amount of refunds
approved for payment by the | ||||||
16 | Department during the preceding fiscal year as
a result of | ||||||
17 | overpayment of tax liability under subsections (a) and | ||||||
18 | (b)(6),
(7), and (8), (c) and (d) of Section 201 of this | ||||||
19 | Act plus the
amount of such refunds remaining approved but | ||||||
20 | unpaid at the end of the
preceding fiscal year, and the | ||||||
21 | denominator of
which shall be the amounts which will be | ||||||
22 | collected pursuant to subsections (a)
and (b)(6), (7), and | ||||||
23 | (8), (c) and (d) of Section 201 of this Act during the
| ||||||
24 | preceding fiscal year; except that in State fiscal year | ||||||
25 | 2002, the Annual
Percentage shall in no event exceed 23%. | ||||||
26 | The Director of Revenue shall
certify the Annual |
| |||||||
| |||||||
1 | Percentage to the Comptroller on the last business day of
| ||||||
2 | the fiscal year immediately preceding the fiscal year for | ||||||
3 | which it is to be
effective. | ||||||
4 | (3) The Comptroller shall order transferred and the | ||||||
5 | Treasurer shall
transfer from the Tobacco Settlement | ||||||
6 | Recovery Fund to the Income Tax Refund
Fund (i) | ||||||
7 | $35,000,000 in January, 2001, (ii) $35,000,000 in January, | ||||||
8 | 2002, and
(iii) $35,000,000 in January, 2003. | ||||||
9 | (d) Expenditures from Income Tax Refund Fund. | ||||||
10 | (1) Beginning January 1, 1989, money in the Income Tax | ||||||
11 | Refund Fund
shall be expended exclusively for the purpose | ||||||
12 | of paying refunds resulting
from overpayment of tax | ||||||
13 | liability under Section 201 of this Act
and for
making | ||||||
14 | transfers pursuant to this subsection (d). | ||||||
15 | (2) The Director shall order payment of refunds | ||||||
16 | resulting from
overpayment of tax liability under Section | ||||||
17 | 201 of this Act from the
Income Tax Refund Fund only to the | ||||||
18 | extent that amounts collected pursuant
to Section 201 of | ||||||
19 | this Act and transfers pursuant to this subsection (d)
and | ||||||
20 | item (3) of subsection (c) have been deposited and | ||||||
21 | retained in the
Fund. | ||||||
22 | (3) As soon as possible after the end of each fiscal | ||||||
23 | year, the Director
shall
order transferred and the State | ||||||
24 | Treasurer and State Comptroller shall
transfer from the | ||||||
25 | Income Tax Refund Fund to the Personal Property Tax
| ||||||
26 | Replacement Fund an amount, certified by the Director to |
| |||||||
| |||||||
1 | the Comptroller,
equal to the excess of the amount | ||||||
2 | collected pursuant to subsections (c) and
(d) of Section | ||||||
3 | 201 of this Act deposited into the Income Tax Refund Fund
| ||||||
4 | during the fiscal year over the amount of refunds | ||||||
5 | resulting from
overpayment of tax liability under | ||||||
6 | subsections (c) and (d) of Section 201
of this Act paid | ||||||
7 | from the Income Tax Refund Fund during the fiscal year. | ||||||
8 | (4) As soon as possible after the end of each fiscal | ||||||
9 | year, the Director shall
order transferred and the State | ||||||
10 | Treasurer and State Comptroller shall
transfer from the | ||||||
11 | Personal Property Tax Replacement Fund to the Income Tax
| ||||||
12 | Refund Fund an amount, certified by the Director to the | ||||||
13 | Comptroller, equal
to the excess of the amount of refunds | ||||||
14 | resulting from overpayment of tax
liability under | ||||||
15 | subsections (c) and (d) of Section 201 of this Act paid
| ||||||
16 | from the Income Tax Refund Fund during the fiscal year | ||||||
17 | over the amount
collected pursuant to subsections (c) and | ||||||
18 | (d) of Section 201 of this Act
deposited into the Income | ||||||
19 | Tax Refund Fund during the fiscal year. | ||||||
20 | (4.5) As soon as possible after the end of fiscal year | ||||||
21 | 1999 and of each
fiscal year
thereafter, the Director | ||||||
22 | shall order transferred and the State Treasurer and
State | ||||||
23 | Comptroller shall transfer from the Income Tax Refund Fund | ||||||
24 | to the General
Revenue Fund any surplus remaining in the | ||||||
25 | Income Tax Refund Fund as of the end
of such fiscal year; | ||||||
26 | excluding for fiscal years 2000, 2001, and 2002
amounts |
| |||||||
| |||||||
1 | attributable to transfers under item (3) of subsection (c) | ||||||
2 | less refunds
resulting from the earned income tax credit. | ||||||
3 | (5) This Act shall constitute an irrevocable and | ||||||
4 | continuing
appropriation from the Income Tax Refund Fund | ||||||
5 | for the purpose of paying
refunds upon the order of the | ||||||
6 | Director in accordance with the provisions of
this | ||||||
7 | Section. | ||||||
8 | (e) Deposits into the Education Assistance Fund and the | ||||||
9 | Income Tax
Surcharge Local Government Distributive Fund. On | ||||||
10 | July 1, 1991, and thereafter, of the amounts collected | ||||||
11 | pursuant to
subsections (a) and (b) of Section 201 of this Act, | ||||||
12 | minus deposits into the
Income Tax Refund Fund, the Department | ||||||
13 | shall deposit 7.3% into the
Education Assistance Fund in the | ||||||
14 | State Treasury. Beginning July 1, 1991,
and continuing through | ||||||
15 | January 31, 1993, of the amounts collected pursuant to
| ||||||
16 | subsections (a) and (b) of Section 201 of the Illinois Income | ||||||
17 | Tax Act, minus
deposits into the Income Tax Refund Fund, the | ||||||
18 | Department shall deposit 3.0%
into the Income Tax Surcharge | ||||||
19 | Local Government Distributive Fund in the State
Treasury. | ||||||
20 | Beginning February 1, 1993 and continuing through June 30, | ||||||
21 | 1993, of
the amounts collected pursuant to subsections (a) and | ||||||
22 | (b) of Section 201 of the
Illinois Income Tax Act, minus | ||||||
23 | deposits into the Income Tax Refund Fund, the
Department shall | ||||||
24 | deposit 4.4% into the Income Tax Surcharge Local Government
| ||||||
25 | Distributive Fund in the State Treasury. Beginning July 1, | ||||||
26 | 1993, and
continuing through June 30, 1994, of the amounts |
| |||||||
| |||||||
1 | collected under subsections
(a) and (b) of Section 201 of this | ||||||
2 | Act, minus deposits into the Income Tax
Refund Fund, the | ||||||
3 | Department shall deposit 1.475% into the Income Tax Surcharge
| ||||||
4 | Local Government Distributive Fund in the State Treasury. | ||||||
5 | (f) Deposits into the Fund for the Advancement of | ||||||
6 | Education. Beginning February 1, 2015, the Department shall | ||||||
7 | deposit the following portions of the revenue realized from | ||||||
8 | the tax imposed upon individuals, trusts, and estates by | ||||||
9 | subsections (a) and (b) of Section 201 of this Act, minus | ||||||
10 | deposits into the Income Tax Refund Fund, into the Fund for the | ||||||
11 | Advancement of Education: | ||||||
12 | (1) beginning February 1, 2015, and prior to February | ||||||
13 | 1, 2025, 1/30; and | ||||||
14 | (2) beginning February 1, 2025, 1/26. | ||||||
15 | If the rate of tax imposed by subsection (a) and (b) of | ||||||
16 | Section 201 is reduced pursuant to Section 201.5 of this Act, | ||||||
17 | the Department shall not make the deposits required by this | ||||||
18 | subsection (f) on or after the effective date of the | ||||||
19 | reduction. | ||||||
20 | (g) Deposits into the Commitment to Human Services Fund. | ||||||
21 | Beginning February 1, 2015, the Department shall deposit the | ||||||
22 | following portions of the revenue realized from the tax | ||||||
23 | imposed upon individuals, trusts, and estates by subsections | ||||||
24 | (a) and (b) of Section 201 of this Act, minus deposits into the | ||||||
25 | Income Tax Refund Fund, into the Commitment to Human Services | ||||||
26 | Fund: |
| |||||||
| |||||||
1 | (1) beginning February 1, 2015, and prior to February | ||||||
2 | 1, 2025, 1/30; and | ||||||
3 | (2) beginning February 1, 2025, 1/26. | ||||||
4 | If the rate of tax imposed by subsection (a) and (b) of | ||||||
5 | Section 201 is reduced pursuant to Section 201.5 of this Act, | ||||||
6 | the Department shall not make the deposits required by this | ||||||
7 | subsection (g) on or after the effective date of the | ||||||
8 | reduction. | ||||||
9 | (h) Deposits into the Tax Compliance and Administration | ||||||
10 | Fund. Beginning on the first day of the first calendar month to | ||||||
11 | occur on or after August 26, 2014 (the effective date of Public | ||||||
12 | Act 98-1098), each month the Department shall pay into the Tax | ||||||
13 | Compliance and Administration Fund, to be used, subject to | ||||||
14 | appropriation, to fund additional auditors and compliance | ||||||
15 | personnel at the Department, an amount equal to 1/12 of 5% of | ||||||
16 | the cash receipts collected during the preceding fiscal year | ||||||
17 | by the Audit Bureau of the Department from the tax imposed by | ||||||
18 | subsections (a), (b), (c), and (d) of Section 201 of this Act, | ||||||
19 | net of deposits into the Income Tax Refund Fund made from those | ||||||
20 | cash receipts. | ||||||
21 | (Source: P.A. 100-22, eff. 7-6-17; 100-23, eff. 7-6-17; | ||||||
22 | 100-587, eff. 6-4-18; 100-621, eff. 7-20-18; 100-863, eff. | ||||||
23 | 8-14-18; 100-1171, eff. 1-4-19; 101-10, eff. 6-5-19; 101-81, | ||||||
24 | eff. 7-12-19; 101-636, eff. 6-10-20.) | ||||||
25 | (Text of Section with the changes made by P.A. 101-8, |
| |||||||
| |||||||
1 | which did not take effect (see Section 99 of P.A. 101-8))
| ||||||
2 | Sec. 901. Collection authority. | ||||||
3 | (a) In general. The Department shall collect the taxes | ||||||
4 | imposed by this Act. The Department
shall collect certified | ||||||
5 | past due child support amounts under Section 2505-650
of the | ||||||
6 | Department of Revenue Law of the
Civil Administrative Code of | ||||||
7 | Illinois. Except as
provided in subsections (b), (c), (e), | ||||||
8 | (f), (g), and (h) of this Section, money collected
pursuant to | ||||||
9 | subsections (a) and (b) of Section 201 of this Act shall be
| ||||||
10 | paid into the General Revenue Fund in the State treasury; | ||||||
11 | money
collected pursuant to subsections (c) and (d) of Section | ||||||
12 | 201 of this Act
shall be paid into the Personal Property Tax | ||||||
13 | Replacement Fund, a special
fund in the State Treasury; and | ||||||
14 | money collected under Section 2505-650 of the
Department of | ||||||
15 | Revenue Law of the
Civil Administrative Code of Illinois shall | ||||||
16 | be paid
into the
Child Support Enforcement Trust Fund, a | ||||||
17 | special fund outside the State
Treasury, or
to the State
| ||||||
18 | Disbursement Unit established under Section 10-26 of the | ||||||
19 | Illinois Public Aid
Code, as directed by the Department of | ||||||
20 | Healthcare and Family Services. | ||||||
21 | (b) Local Government Distributive Fund. Beginning August | ||||||
22 | 1, 2017 and continuing through January 31, 2021 , the Treasurer | ||||||
23 | shall transfer each month from the General Revenue Fund to the | ||||||
24 | Local Government Distributive Fund an amount equal to the sum | ||||||
25 | of : (i) 6.06% (10% of the ratio of the 3% individual income tax | ||||||
26 | rate prior to 2011 to the 4.95% individual income tax rate |
| |||||||
| |||||||
1 | after July 1, 2017) of the net revenue realized from the tax | ||||||
2 | imposed by subsections (a) and (b) of Section 201 of this Act | ||||||
3 | upon individuals, trusts, and estates during the preceding | ||||||
4 | month ; and (ii) 6.85% (10% of the ratio of the 4.8% corporate | ||||||
5 | income tax rate prior to 2011 to the 7% corporate income tax | ||||||
6 | rate after July 1, 2017) of the net revenue realized from the | ||||||
7 | tax imposed by subsections (a) and (b) of Section 201 of this | ||||||
8 | Act upon corporations during the preceding month ; and (iii) | ||||||
9 | beginning February 1, 2022, 6.06% of the net revenue realized | ||||||
10 | from the tax imposed by subsection (p) of Section 201 of this | ||||||
11 | Act upon electing pass-through entities . Beginning February 1, | ||||||
12 | 2021, the Treasurer shall transfer each month from the General | ||||||
13 | Revenue Fund to the Local Government Distributive Fund an | ||||||
14 | amount equal to the sum of (i) 5.32% of the net revenue | ||||||
15 | realized from the tax imposed by subsections (a) and (b) of | ||||||
16 | Section 201 of this Act upon individuals, trusts, and estates | ||||||
17 | during the preceding month and (ii) 6.16% of the net revenue | ||||||
18 | realized from the tax imposed by subsections (a) and (b) of | ||||||
19 | Section 201 of this Act upon corporations during the preceding | ||||||
20 | month. Net revenue realized for a month shall be defined as the
| ||||||
21 | revenue from the tax imposed by subsections (a) and (b) of | ||||||
22 | Section 201 of this
Act which is deposited in the General | ||||||
23 | Revenue Fund, the Education Assistance
Fund, the Income Tax | ||||||
24 | Surcharge Local Government Distributive Fund, the Fund for the | ||||||
25 | Advancement of Education, and the Commitment to Human Services | ||||||
26 | Fund during the
month minus the amount paid out of the General |
| |||||||
| |||||||
1 | Revenue Fund in State warrants
during that same month as | ||||||
2 | refunds to taxpayers for overpayment of liability
under the | ||||||
3 | tax imposed by subsections (a) and (b) of Section 201 of this | ||||||
4 | Act. | ||||||
5 | Notwithstanding any provision of law to the contrary, | ||||||
6 | beginning on July 6, 2017 (the effective date of Public Act | ||||||
7 | 100-23), those amounts required under this subsection (b) to | ||||||
8 | be transferred by the Treasurer into the Local Government | ||||||
9 | Distributive Fund from the General Revenue Fund shall be | ||||||
10 | directly deposited into the Local Government Distributive Fund | ||||||
11 | as the revenue is realized from the tax imposed by subsections | ||||||
12 | (a) and (b) of Section 201 of this Act. | ||||||
13 | For State fiscal year 2020 only, notwithstanding any | ||||||
14 | provision of law to the contrary, the total amount of revenue | ||||||
15 | and deposits under this Section attributable to revenues | ||||||
16 | realized during State fiscal year 2020 shall be reduced by 5%. | ||||||
17 | (c) Deposits Into Income Tax Refund Fund. | ||||||
18 | (1) Beginning on January 1, 1989 and thereafter, the | ||||||
19 | Department shall
deposit a percentage of the amounts | ||||||
20 | collected pursuant to subsections (a)
and (b)(1), (2), and | ||||||
21 | (3) of Section 201 of this Act into a fund in the State
| ||||||
22 | treasury known as the Income Tax Refund Fund. Beginning | ||||||
23 | with State fiscal year 1990 and for each fiscal year
| ||||||
24 | thereafter, the percentage deposited into the Income Tax | ||||||
25 | Refund Fund during a
fiscal year shall be the Annual | ||||||
26 | Percentage. For fiscal year 2011, the Annual Percentage |
| |||||||
| |||||||
1 | shall be 8.75%. For fiscal year 2012, the Annual | ||||||
2 | Percentage shall be 8.75%. For fiscal year 2013, the | ||||||
3 | Annual Percentage shall be 9.75%. For fiscal year 2014, | ||||||
4 | the Annual Percentage shall be 9.5%. For fiscal year 2015, | ||||||
5 | the Annual Percentage shall be 10%. For fiscal year 2018, | ||||||
6 | the Annual Percentage shall be 9.8%. For fiscal year 2019, | ||||||
7 | the Annual Percentage shall be 9.7%. For fiscal year 2020, | ||||||
8 | the Annual Percentage shall be 9.5%. For fiscal year 2021, | ||||||
9 | the Annual Percentage shall be 9%. For all other
fiscal | ||||||
10 | years, the
Annual Percentage shall be calculated as a | ||||||
11 | fraction, the numerator of which
shall be the amount of | ||||||
12 | refunds approved for payment by the Department during
the | ||||||
13 | preceding fiscal year as a result of overpayment of tax | ||||||
14 | liability under
subsections (a) and (b)(1), (2), and (3) | ||||||
15 | of Section 201 of this Act plus the
amount of such refunds | ||||||
16 | remaining approved but unpaid at the end of the
preceding | ||||||
17 | fiscal year, minus the amounts transferred into the Income | ||||||
18 | Tax
Refund Fund from the Tobacco Settlement Recovery Fund, | ||||||
19 | and
the denominator of which shall be the amounts which | ||||||
20 | will be collected pursuant
to subsections (a) and (b)(1), | ||||||
21 | (2), and (3) of Section 201 of this Act during
the | ||||||
22 | preceding fiscal year; except that in State fiscal year | ||||||
23 | 2002, the Annual
Percentage shall in no event exceed 7.6%. | ||||||
24 | The Director of Revenue shall
certify the Annual | ||||||
25 | Percentage to the Comptroller on the last business day of
| ||||||
26 | the fiscal year immediately preceding the fiscal year for |
| |||||||
| |||||||
1 | which it is to be
effective. | ||||||
2 | (2) Beginning on January 1, 1989 and thereafter, the | ||||||
3 | Department shall
deposit a percentage of the amounts | ||||||
4 | collected pursuant to subsections (a)
and (b)(6), (7), and | ||||||
5 | (8), (c) and (d) of Section 201
of this Act into a fund in | ||||||
6 | the State treasury known as the Income Tax
Refund Fund. | ||||||
7 | Beginning
with State fiscal year 1990 and for each fiscal | ||||||
8 | year thereafter, the
percentage deposited into the Income | ||||||
9 | Tax Refund Fund during a fiscal year
shall be the Annual | ||||||
10 | Percentage. For fiscal year 2011, the Annual Percentage | ||||||
11 | shall be 17.5%. For fiscal year 2012, the Annual | ||||||
12 | Percentage shall be 17.5%. For fiscal year 2013, the | ||||||
13 | Annual Percentage shall be 14%. For fiscal year 2014, the | ||||||
14 | Annual Percentage shall be 13.4%. For fiscal year 2015, | ||||||
15 | the Annual Percentage shall be 14%. For fiscal year 2018, | ||||||
16 | the Annual Percentage shall be 17.5%. For fiscal year | ||||||
17 | 2019, the Annual Percentage shall be 15.5%. For fiscal | ||||||
18 | year 2020, the Annual Percentage shall be 14.25%. For | ||||||
19 | fiscal year 2021, the Annual Percentage shall be 14%. For | ||||||
20 | all other fiscal years, the Annual
Percentage shall be | ||||||
21 | calculated
as a fraction, the numerator of which shall be | ||||||
22 | the amount of refunds
approved for payment by the | ||||||
23 | Department during the preceding fiscal year as
a result of | ||||||
24 | overpayment of tax liability under subsections (a) and | ||||||
25 | (b)(6),
(7), and (8), (c) and (d) of Section 201 of this | ||||||
26 | Act plus the
amount of such refunds remaining approved but |
| |||||||
| |||||||
1 | unpaid at the end of the
preceding fiscal year, and the | ||||||
2 | denominator of
which shall be the amounts which will be | ||||||
3 | collected pursuant to subsections (a)
and (b)(6), (7), and | ||||||
4 | (8), (c) and (d) of Section 201 of this Act during the
| ||||||
5 | preceding fiscal year; except that in State fiscal year | ||||||
6 | 2002, the Annual
Percentage shall in no event exceed 23%. | ||||||
7 | The Director of Revenue shall
certify the Annual | ||||||
8 | Percentage to the Comptroller on the last business day of
| ||||||
9 | the fiscal year immediately preceding the fiscal year for | ||||||
10 | which it is to be
effective. | ||||||
11 | (3) The Comptroller shall order transferred and the | ||||||
12 | Treasurer shall
transfer from the Tobacco Settlement | ||||||
13 | Recovery Fund to the Income Tax Refund
Fund (i) | ||||||
14 | $35,000,000 in January, 2001, (ii) $35,000,000 in January, | ||||||
15 | 2002, and
(iii) $35,000,000 in January, 2003. | ||||||
16 | (d) Expenditures from Income Tax Refund Fund. | ||||||
17 | (1) Beginning January 1, 1989, money in the Income Tax | ||||||
18 | Refund Fund
shall be expended exclusively for the purpose | ||||||
19 | of paying refunds resulting
from overpayment of tax | ||||||
20 | liability under Section 201 of this Act
and for
making | ||||||
21 | transfers pursuant to this subsection (d). | ||||||
22 | (2) The Director shall order payment of refunds | ||||||
23 | resulting from
overpayment of tax liability under Section | ||||||
24 | 201 of this Act from the
Income Tax Refund Fund only to the | ||||||
25 | extent that amounts collected pursuant
to Section 201 of | ||||||
26 | this Act and transfers pursuant to this subsection (d)
and |
| |||||||
| |||||||
1 | item (3) of subsection (c) have been deposited and | ||||||
2 | retained in the
Fund. | ||||||
3 | (3) As soon as possible after the end of each fiscal | ||||||
4 | year, the Director
shall
order transferred and the State | ||||||
5 | Treasurer and State Comptroller shall
transfer from the | ||||||
6 | Income Tax Refund Fund to the Personal Property Tax
| ||||||
7 | Replacement Fund an amount, certified by the Director to | ||||||
8 | the Comptroller,
equal to the excess of the amount | ||||||
9 | collected pursuant to subsections (c) and
(d) of Section | ||||||
10 | 201 of this Act deposited into the Income Tax Refund Fund
| ||||||
11 | during the fiscal year over the amount of refunds | ||||||
12 | resulting from
overpayment of tax liability under | ||||||
13 | subsections (c) and (d) of Section 201
of this Act paid | ||||||
14 | from the Income Tax Refund Fund during the fiscal year. | ||||||
15 | (4) As soon as possible after the end of each fiscal | ||||||
16 | year, the Director shall
order transferred and the State | ||||||
17 | Treasurer and State Comptroller shall
transfer from the | ||||||
18 | Personal Property Tax Replacement Fund to the Income Tax
| ||||||
19 | Refund Fund an amount, certified by the Director to the | ||||||
20 | Comptroller, equal
to the excess of the amount of refunds | ||||||
21 | resulting from overpayment of tax
liability under | ||||||
22 | subsections (c) and (d) of Section 201 of this Act paid
| ||||||
23 | from the Income Tax Refund Fund during the fiscal year | ||||||
24 | over the amount
collected pursuant to subsections (c) and | ||||||
25 | (d) of Section 201 of this Act
deposited into the Income | ||||||
26 | Tax Refund Fund during the fiscal year. |
| |||||||
| |||||||
1 | (4.5) As soon as possible after the end of fiscal year | ||||||
2 | 1999 and of each
fiscal year
thereafter, the Director | ||||||
3 | shall order transferred and the State Treasurer and
State | ||||||
4 | Comptroller shall transfer from the Income Tax Refund Fund | ||||||
5 | to the General
Revenue Fund any surplus remaining in the | ||||||
6 | Income Tax Refund Fund as of the end
of such fiscal year; | ||||||
7 | excluding for fiscal years 2000, 2001, and 2002
amounts | ||||||
8 | attributable to transfers under item (3) of subsection (c) | ||||||
9 | less refunds
resulting from the earned income tax credit. | ||||||
10 | (5) This Act shall constitute an irrevocable and | ||||||
11 | continuing
appropriation from the Income Tax Refund Fund | ||||||
12 | for the purpose of paying
refunds upon the order of the | ||||||
13 | Director in accordance with the provisions of
this | ||||||
14 | Section. | ||||||
15 | (e) Deposits into the Education Assistance Fund and the | ||||||
16 | Income Tax
Surcharge Local Government Distributive Fund. On | ||||||
17 | July 1, 1991, and thereafter, of the amounts collected | ||||||
18 | pursuant to
subsections (a) and (b) of Section 201 of this Act, | ||||||
19 | minus deposits into the
Income Tax Refund Fund, the Department | ||||||
20 | shall deposit 7.3% into the
Education Assistance Fund in the | ||||||
21 | State Treasury. Beginning July 1, 1991,
and continuing through | ||||||
22 | January 31, 1993, of the amounts collected pursuant to
| ||||||
23 | subsections (a) and (b) of Section 201 of the Illinois Income | ||||||
24 | Tax Act, minus
deposits into the Income Tax Refund Fund, the | ||||||
25 | Department shall deposit 3.0%
into the Income Tax Surcharge | ||||||
26 | Local Government Distributive Fund in the State
Treasury. |
| |||||||
| |||||||
1 | Beginning February 1, 1993 and continuing through June 30, | ||||||
2 | 1993, of
the amounts collected pursuant to subsections (a) and | ||||||
3 | (b) of Section 201 of the
Illinois Income Tax Act, minus | ||||||
4 | deposits into the Income Tax Refund Fund, the
Department shall | ||||||
5 | deposit 4.4% into the Income Tax Surcharge Local Government
| ||||||
6 | Distributive Fund in the State Treasury. Beginning July 1, | ||||||
7 | 1993, and
continuing through June 30, 1994, of the amounts | ||||||
8 | collected under subsections
(a) and (b) of Section 201 of this | ||||||
9 | Act, minus deposits into the Income Tax
Refund Fund, the | ||||||
10 | Department shall deposit 1.475% into the Income Tax Surcharge
| ||||||
11 | Local Government Distributive Fund in the State Treasury. | ||||||
12 | (f) Deposits into the Fund for the Advancement of | ||||||
13 | Education. Beginning February 1, 2015, the Department shall | ||||||
14 | deposit the following portions of the revenue realized from | ||||||
15 | the tax imposed upon individuals, trusts, and estates by | ||||||
16 | subsections (a) and (b) of Section 201 of this Act, minus | ||||||
17 | deposits into the Income Tax Refund Fund, into the Fund for the | ||||||
18 | Advancement of Education: | ||||||
19 | (1) beginning February 1, 2015, and prior to February | ||||||
20 | 1, 2025, 1/30; and | ||||||
21 | (2) beginning February 1, 2025, 1/26. | ||||||
22 | If the rate of tax imposed by subsection (a) and (b) of | ||||||
23 | Section 201 is reduced pursuant to Section 201.5 of this Act, | ||||||
24 | the Department shall not make the deposits required by this | ||||||
25 | subsection (f) on or after the effective date of the | ||||||
26 | reduction. |
| |||||||
| |||||||
1 | (g) Deposits into the Commitment to Human Services Fund. | ||||||
2 | Beginning February 1, 2015, the Department shall deposit the | ||||||
3 | following portions of the revenue realized from the tax | ||||||
4 | imposed upon individuals, trusts, and estates by subsections | ||||||
5 | (a) and (b) of Section 201 of this Act, minus deposits into the | ||||||
6 | Income Tax Refund Fund, into the Commitment to Human Services | ||||||
7 | Fund: | ||||||
8 | (1) beginning February 1, 2015, and prior to February | ||||||
9 | 1, 2025, 1/30; and | ||||||
10 | (2) beginning February 1, 2025, 1/26. | ||||||
11 | If the rate of tax imposed by subsection (a) and (b) of | ||||||
12 | Section 201 is reduced pursuant to Section 201.5 of this Act, | ||||||
13 | the Department shall not make the deposits required by this | ||||||
14 | subsection (g) on or after the effective date of the | ||||||
15 | reduction. | ||||||
16 | (h) Deposits into the Tax Compliance and Administration | ||||||
17 | Fund. Beginning on the first day of the first calendar month to | ||||||
18 | occur on or after August 26, 2014 (the effective date of Public | ||||||
19 | Act 98-1098), each month the Department shall pay into the Tax | ||||||
20 | Compliance and Administration Fund, to be used, subject to | ||||||
21 | appropriation, to fund additional auditors and compliance | ||||||
22 | personnel at the Department, an amount equal to 1/12 of 5% of | ||||||
23 | the cash receipts collected during the preceding fiscal year | ||||||
24 | by the Audit Bureau of the Department from the tax imposed by | ||||||
25 | subsections (a), (b), (c), and (d) of Section 201 of this Act, | ||||||
26 | net of deposits into the Income Tax Refund Fund made from those |
| |||||||
| |||||||
1 | cash receipts. | ||||||
2 | (Source: P.A. 100-22, eff. 7-6-17; 100-23, eff. 7-6-17; | ||||||
3 | 100-587, eff. 6-4-18; 100-621, eff. 7-20-18; 100-863, eff. | ||||||
4 | 8-14-18; 100-1171, eff. 1-4-19; 101-8, see Section 99 for | ||||||
5 | effective date; 101-10, eff. 6-5-19; 101-81, eff. 7-12-19; | ||||||
6 | 101-636, eff. 6-10-20 .)
| ||||||
7 | Section 99. Effective date. This Act takes effect upon | ||||||
8 | becoming law.
|