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| | 103RD GENERAL ASSEMBLY
State of Illinois
2023 and 2024 HB1578 Introduced 1/31/2023, by Rep. Mark L. Walker SYNOPSIS AS INTRODUCED: |
| 35 ILCS 5/201 | |
35 ILCS 5/704A | |
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Amends the Illinois Income Tax Act. Provides that the research and development credit applies for taxable years ending prior to January 1, 2037 (currently, January 1, 2027). Provides that, in the case of qualifying quantum information science expenditures, the research and development credit shall be equal to 13% of the qualifying expenditures for increasing research activities in this State (currently, 6.5%). Provides that certain qualified startup taxpayers may elect to claim the credit against their obligation to pay withholding taxes. Effective immediately.
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| | A BILL FOR |
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1 | | AN ACT concerning revenue.
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2 | | Be it enacted by the People of the State of Illinois,
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3 | | represented in the General Assembly:
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4 | | Section 5. The Illinois Income Tax Act is amended by |
5 | | changing Sections 201 and 704A as follows:
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6 | | (35 ILCS 5/201)
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7 | | Sec. 201. Tax imposed. |
8 | | (a) In general. A tax measured by net income is hereby |
9 | | imposed on every
individual, corporation, trust and estate for |
10 | | each taxable year ending
after July 31, 1969 on the privilege |
11 | | of earning or receiving income in or
as a resident of this |
12 | | State. Such tax shall be in addition to all other
occupation or |
13 | | privilege taxes imposed by this State or by any municipal
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14 | | corporation or political subdivision thereof. |
15 | | (b) Rates. The tax imposed by subsection (a) of this |
16 | | Section shall be
determined as follows, except as adjusted by |
17 | | subsection (d-1): |
18 | | (1) In the case of an individual, trust or estate, for |
19 | | taxable years
ending prior to July 1, 1989, an amount |
20 | | equal to 2 1/2% of the taxpayer's
net income for the |
21 | | taxable year. |
22 | | (2) In the case of an individual, trust or estate, for |
23 | | taxable years
beginning prior to July 1, 1989 and ending |
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1 | | after June 30, 1989, an amount
equal to the sum of (i) 2 |
2 | | 1/2% of the taxpayer's net income for the period
prior to |
3 | | July 1, 1989, as calculated under Section 202.3, and (ii) |
4 | | 3% of the
taxpayer's net income for the period after June |
5 | | 30, 1989, as calculated
under Section 202.3. |
6 | | (3) In the case of an individual, trust or estate, for |
7 | | taxable years
beginning after June 30, 1989, and ending |
8 | | prior to January 1, 2011, an amount equal to 3% of the |
9 | | taxpayer's net
income for the taxable year. |
10 | | (4) In the case of an individual, trust, or estate, |
11 | | for taxable years beginning prior to January 1, 2011, and |
12 | | ending after December 31, 2010, an amount equal to the sum |
13 | | of (i) 3% of the taxpayer's net income for the period prior |
14 | | to January 1, 2011, as calculated under Section 202.5, and |
15 | | (ii) 5% of the taxpayer's net income for the period after |
16 | | December 31, 2010, as calculated under Section 202.5. |
17 | | (5) In the case of an individual, trust, or estate, |
18 | | for taxable years beginning on or after January 1, 2011, |
19 | | and ending prior to January 1, 2015, an amount equal to 5% |
20 | | of the taxpayer's net income for the taxable year. |
21 | | (5.1) In the case of an individual, trust, or estate, |
22 | | for taxable years beginning prior to January 1, 2015, and |
23 | | ending after December 31, 2014, an amount equal to the sum |
24 | | of (i) 5% of the taxpayer's net income for the period prior |
25 | | to January 1, 2015, as calculated under Section 202.5, and |
26 | | (ii) 3.75% of the taxpayer's net income for the period |
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1 | | after December 31, 2014, as calculated under Section |
2 | | 202.5. |
3 | | (5.2) In the case of an individual, trust, or estate, |
4 | | for taxable years beginning on or after January 1, 2015, |
5 | | and ending prior to July 1, 2017, an amount equal to 3.75% |
6 | | of the taxpayer's net income for the taxable year. |
7 | | (5.3) In the case of an individual, trust, or estate, |
8 | | for taxable years beginning prior to July 1, 2017, and |
9 | | ending after June 30, 2017, an amount equal to the sum of |
10 | | (i) 3.75% of the taxpayer's net income for the period |
11 | | prior to July 1, 2017, as calculated under Section 202.5, |
12 | | and (ii) 4.95% of the taxpayer's net income for the period |
13 | | after June 30, 2017, as calculated under Section 202.5. |
14 | | (5.4) In the case of an individual, trust, or estate, |
15 | | for taxable years beginning on or after July 1, 2017, an |
16 | | amount equal to 4.95% of the taxpayer's net income for the |
17 | | taxable year. |
18 | | (6) In the case of a corporation, for taxable years
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19 | | ending prior to July 1, 1989, an amount equal to 4% of the
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20 | | taxpayer's net income for the taxable year. |
21 | | (7) In the case of a corporation, for taxable years |
22 | | beginning prior to
July 1, 1989 and ending after June 30, |
23 | | 1989, an amount equal to the sum of
(i) 4% of the |
24 | | taxpayer's net income for the period prior to July 1, |
25 | | 1989,
as calculated under Section 202.3, and (ii) 4.8% of |
26 | | the taxpayer's net
income for the period after June 30, |
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1 | | 1989, as calculated under Section
202.3. |
2 | | (8) In the case of a corporation, for taxable years |
3 | | beginning after
June 30, 1989, and ending prior to January |
4 | | 1, 2011, an amount equal to 4.8% of the taxpayer's net |
5 | | income for the
taxable year. |
6 | | (9) In the case of a corporation, for taxable years |
7 | | beginning prior to January 1, 2011, and ending after |
8 | | December 31, 2010, an amount equal to the sum of (i) 4.8% |
9 | | of the taxpayer's net income for the period prior to |
10 | | January 1, 2011, as calculated under Section 202.5, and |
11 | | (ii) 7% of the taxpayer's net income for the period after |
12 | | December 31, 2010, as calculated under Section 202.5. |
13 | | (10) In the case of a corporation, for taxable years |
14 | | beginning on or after January 1, 2011, and ending prior to |
15 | | January 1, 2015, an amount equal to 7% of the taxpayer's |
16 | | net income for the taxable year. |
17 | | (11) In the case of a corporation, for taxable years |
18 | | beginning prior to January 1, 2015, and ending after |
19 | | December 31, 2014, an amount equal to the sum of (i) 7% of |
20 | | the taxpayer's net income for the period prior to January |
21 | | 1, 2015, as calculated under Section 202.5, and (ii) 5.25% |
22 | | of the taxpayer's net income for the period after December |
23 | | 31, 2014, as calculated under Section 202.5. |
24 | | (12) In the case of a corporation, for taxable years |
25 | | beginning on or after January 1, 2015, and ending prior to |
26 | | July 1, 2017, an amount equal to 5.25% of the taxpayer's |
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1 | | net income for the taxable year. |
2 | | (13) In the case of a corporation, for taxable years |
3 | | beginning prior to July 1, 2017, and ending after June 30, |
4 | | 2017, an amount equal to the sum of (i) 5.25% of the |
5 | | taxpayer's net income for the period prior to July 1, |
6 | | 2017, as calculated under Section 202.5, and (ii) 7% of |
7 | | the taxpayer's net income for the period after June 30, |
8 | | 2017, as calculated under Section 202.5. |
9 | | (14) In the case of a corporation, for taxable years |
10 | | beginning on or after July 1, 2017, an amount equal to 7% |
11 | | of the taxpayer's net income for the taxable year. |
12 | | The rates under this subsection (b) are subject to the |
13 | | provisions of Section 201.5. |
14 | | (b-5) Surcharge; sale or exchange of assets, properties, |
15 | | and intangibles of organization gaming licensees. For each of |
16 | | taxable years 2019 through 2027, a surcharge is imposed on all |
17 | | taxpayers on income arising from the sale or exchange of |
18 | | capital assets, depreciable business property, real property |
19 | | used in the trade or business, and Section 197 intangibles (i) |
20 | | of an organization licensee under the Illinois Horse Racing |
21 | | Act of 1975 and (ii) of an organization gaming licensee under |
22 | | the Illinois Gambling Act. The amount of the surcharge is |
23 | | equal to the amount of federal income tax liability for the |
24 | | taxable year attributable to those sales and exchanges. The |
25 | | surcharge imposed shall not apply if: |
26 | | (1) the organization gaming license, organization |
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1 | | license, or racetrack property is transferred as a result |
2 | | of any of the following: |
3 | | (A) bankruptcy, a receivership, or a debt |
4 | | adjustment initiated by or against the initial |
5 | | licensee or the substantial owners of the initial |
6 | | licensee; |
7 | | (B) cancellation, revocation, or termination of |
8 | | any such license by the Illinois Gaming Board or the |
9 | | Illinois Racing Board; |
10 | | (C) a determination by the Illinois Gaming Board |
11 | | that transfer of the license is in the best interests |
12 | | of Illinois gaming; |
13 | | (D) the death of an owner of the equity interest in |
14 | | a licensee; |
15 | | (E) the acquisition of a controlling interest in |
16 | | the stock or substantially all of the assets of a |
17 | | publicly traded company; |
18 | | (F) a transfer by a parent company to a wholly |
19 | | owned subsidiary; or |
20 | | (G) the transfer or sale to or by one person to |
21 | | another person where both persons were initial owners |
22 | | of the license when the license was issued; or |
23 | | (2) the controlling interest in the organization |
24 | | gaming license, organization license, or racetrack |
25 | | property is transferred in a transaction to lineal |
26 | | descendants in which no gain or loss is recognized or as a |
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1 | | result of a transaction in accordance with Section 351 of |
2 | | the Internal Revenue Code in which no gain or loss is |
3 | | recognized; or |
4 | | (3) live horse racing was not conducted in 2010 at a |
5 | | racetrack located within 3 miles of the Mississippi River |
6 | | under a license issued pursuant to the Illinois Horse |
7 | | Racing Act of 1975. |
8 | | The transfer of an organization gaming license, |
9 | | organization license, or racetrack property by a person other |
10 | | than the initial licensee to receive the organization gaming |
11 | | license is not subject to a surcharge. The Department shall |
12 | | adopt rules necessary to implement and administer this |
13 | | subsection. |
14 | | (c) Personal Property Tax Replacement Income Tax.
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15 | | Beginning on July 1, 1979 and thereafter, in addition to such |
16 | | income
tax, there is also hereby imposed the Personal Property |
17 | | Tax Replacement
Income Tax measured by net income on every |
18 | | corporation (including Subchapter
S corporations), partnership |
19 | | and trust, for each taxable year ending after
June 30, 1979. |
20 | | Such taxes are imposed on the privilege of earning or
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21 | | receiving income in or as a resident of this State. The |
22 | | Personal Property
Tax Replacement Income Tax shall be in |
23 | | addition to the income tax imposed
by subsections (a) and (b) |
24 | | of this Section and in addition to all other
occupation or |
25 | | privilege taxes imposed by this State or by any municipal
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26 | | corporation or political subdivision thereof. |
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1 | | (d) Additional Personal Property Tax Replacement Income |
2 | | Tax Rates.
The personal property tax replacement income tax |
3 | | imposed by this subsection
and subsection (c) of this Section |
4 | | in the case of a corporation, other
than a Subchapter S |
5 | | corporation and except as adjusted by subsection (d-1),
shall |
6 | | be an additional amount equal to
2.85% of such taxpayer's net |
7 | | income for the taxable year, except that
beginning on January |
8 | | 1, 1981, and thereafter, the rate of 2.85% specified
in this |
9 | | subsection shall be reduced to 2.5%, and in the case of a
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10 | | partnership, trust or a Subchapter S corporation shall be an |
11 | | additional
amount equal to 1.5% of such taxpayer's net income |
12 | | for the taxable year. |
13 | | (d-1) Rate reduction for certain foreign insurers. In the |
14 | | case of a
foreign insurer, as defined by Section 35A-5 of the |
15 | | Illinois Insurance Code,
whose state or country of domicile |
16 | | imposes on insurers domiciled in Illinois
a retaliatory tax |
17 | | (excluding any insurer
whose premiums from reinsurance assumed |
18 | | are 50% or more of its total insurance
premiums as determined |
19 | | under paragraph (2) of subsection (b) of Section 304,
except |
20 | | that for purposes of this determination premiums from |
21 | | reinsurance do
not include premiums from inter-affiliate |
22 | | reinsurance arrangements),
beginning with taxable years ending |
23 | | on or after December 31, 1999,
the sum of
the rates of tax |
24 | | imposed by subsections (b) and (d) shall be reduced (but not
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25 | | increased) to the rate at which the total amount of tax imposed |
26 | | under this Act,
net of all credits allowed under this Act, |
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1 | | shall equal (i) the total amount of
tax that would be imposed |
2 | | on the foreign insurer's net income allocable to
Illinois for |
3 | | the taxable year by such foreign insurer's state or country of
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4 | | domicile if that net income were subject to all income taxes |
5 | | and taxes
measured by net income imposed by such foreign |
6 | | insurer's state or country of
domicile, net of all credits |
7 | | allowed or (ii) a rate of zero if no such tax is
imposed on |
8 | | such income by the foreign insurer's state of domicile.
For |
9 | | the purposes of this subsection (d-1), an inter-affiliate |
10 | | includes a
mutual insurer under common management. |
11 | | (1) For the purposes of subsection (d-1), in no event |
12 | | shall the sum of the
rates of tax imposed by subsections |
13 | | (b) and (d) be reduced below the rate at
which the sum of: |
14 | | (A) the total amount of tax imposed on such |
15 | | foreign insurer under
this Act for a taxable year, net |
16 | | of all credits allowed under this Act, plus |
17 | | (B) the privilege tax imposed by Section 409 of |
18 | | the Illinois Insurance
Code, the fire insurance |
19 | | company tax imposed by Section 12 of the Fire
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20 | | Investigation Act, and the fire department taxes |
21 | | imposed under Section 11-10-1
of the Illinois |
22 | | Municipal Code, |
23 | | equals 1.25% for taxable years ending prior to December |
24 | | 31, 2003, or
1.75% for taxable years ending on or after |
25 | | December 31, 2003, of the net
taxable premiums written for |
26 | | the taxable year,
as described by subsection (1) of |
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1 | | Section 409 of the Illinois Insurance Code.
This paragraph |
2 | | will in no event increase the rates imposed under |
3 | | subsections
(b) and (d). |
4 | | (2) Any reduction in the rates of tax imposed by this |
5 | | subsection shall be
applied first against the rates |
6 | | imposed by subsection (b) and only after the
tax imposed |
7 | | by subsection (a) net of all credits allowed under this |
8 | | Section
other than the credit allowed under subsection (i) |
9 | | has been reduced to zero,
against the rates imposed by |
10 | | subsection (d). |
11 | | This subsection (d-1) is exempt from the provisions of |
12 | | Section 250. |
13 | | (e) Investment credit. A taxpayer shall be allowed a |
14 | | credit
against the Personal Property Tax Replacement Income |
15 | | Tax for
investment in qualified property. |
16 | | (1) A taxpayer shall be allowed a credit equal to .5% |
17 | | of
the basis of qualified property placed in service |
18 | | during the taxable year,
provided such property is placed |
19 | | in service on or after
July 1, 1984. There shall be allowed |
20 | | an additional credit equal
to .5% of the basis of |
21 | | qualified property placed in service during the
taxable |
22 | | year, provided such property is placed in service on or
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23 | | after July 1, 1986, and the taxpayer's base employment
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24 | | within Illinois has increased by 1% or more over the |
25 | | preceding year as
determined by the taxpayer's employment |
26 | | records filed with the
Illinois Department of Employment |
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1 | | Security. Taxpayers who are new to
Illinois shall be |
2 | | deemed to have met the 1% growth in base employment for
the |
3 | | first year in which they file employment records with the |
4 | | Illinois
Department of Employment Security. The provisions |
5 | | added to this Section by
Public Act 85-1200 (and restored |
6 | | by Public Act 87-895) shall be
construed as declaratory of |
7 | | existing law and not as a new enactment. If,
in any year, |
8 | | the increase in base employment within Illinois over the
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9 | | preceding year is less than 1%, the additional credit |
10 | | shall be limited to that
percentage times a fraction, the |
11 | | numerator of which is .5% and the denominator
of which is |
12 | | 1%, but shall not exceed .5%. The investment credit shall |
13 | | not be
allowed to the extent that it would reduce a |
14 | | taxpayer's liability in any tax
year below zero, nor may |
15 | | any credit for qualified property be allowed for any
year |
16 | | other than the year in which the property was placed in |
17 | | service in
Illinois. For tax years ending on or after |
18 | | December 31, 1987, and on or
before December 31, 1988, the |
19 | | credit shall be allowed for the tax year in
which the |
20 | | property is placed in service, or, if the amount of the |
21 | | credit
exceeds the tax liability for that year, whether it |
22 | | exceeds the original
liability or the liability as later |
23 | | amended, such excess may be carried
forward and applied to |
24 | | the tax liability of the 5 taxable years following
the |
25 | | excess credit years if the taxpayer (i) makes investments |
26 | | which cause
the creation of a minimum of 2,000 full-time |
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1 | | equivalent jobs in Illinois,
(ii) is located in an |
2 | | enterprise zone established pursuant to the Illinois
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3 | | Enterprise Zone Act and (iii) is certified by the |
4 | | Department of Commerce
and Community Affairs (now |
5 | | Department of Commerce and Economic Opportunity) as |
6 | | complying with the requirements specified in
clause (i) |
7 | | and (ii) by July 1, 1986. The Department of Commerce and
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8 | | Community Affairs (now Department of Commerce and Economic |
9 | | Opportunity) shall notify the Department of Revenue of all |
10 | | such
certifications immediately. For tax years ending |
11 | | after December 31, 1988,
the credit shall be allowed for |
12 | | the tax year in which the property is
placed in service, |
13 | | or, if the amount of the credit exceeds the tax
liability |
14 | | for that year, whether it exceeds the original liability |
15 | | or the
liability as later amended, such excess may be |
16 | | carried forward and applied
to the tax liability of the 5 |
17 | | taxable years following the excess credit
years. The |
18 | | credit shall be applied to the earliest year for which |
19 | | there is
a liability. If there is credit from more than one |
20 | | tax year that is
available to offset a liability, earlier |
21 | | credit shall be applied first. |
22 | | (2) The term "qualified property" means property |
23 | | which: |
24 | | (A) is tangible, whether new or used, including |
25 | | buildings and structural
components of buildings and |
26 | | signs that are real property, but not including
land |
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1 | | or improvements to real property that are not a |
2 | | structural component of a
building such as |
3 | | landscaping, sewer lines, local access roads, fencing, |
4 | | parking
lots, and other appurtenances; |
5 | | (B) is depreciable pursuant to Section 167 of the |
6 | | Internal Revenue Code,
except that "3-year property" |
7 | | as defined in Section 168(c)(2)(A) of that
Code is not |
8 | | eligible for the credit provided by this subsection |
9 | | (e); |
10 | | (C) is acquired by purchase as defined in Section |
11 | | 179(d) of
the Internal Revenue Code; |
12 | | (D) is used in Illinois by a taxpayer who is |
13 | | primarily engaged in
manufacturing, or in mining coal |
14 | | or fluorite, or in retailing, or was placed in service |
15 | | on or after July 1, 2006 in a River Edge Redevelopment |
16 | | Zone established pursuant to the River Edge |
17 | | Redevelopment Zone Act; and |
18 | | (E) has not previously been used in Illinois in |
19 | | such a manner and by
such a person as would qualify for |
20 | | the credit provided by this subsection
(e) or |
21 | | subsection (f). |
22 | | (3) For purposes of this subsection (e), |
23 | | "manufacturing" means
the material staging and production |
24 | | of tangible personal property by
procedures commonly |
25 | | regarded as manufacturing, processing, fabrication, or
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26 | | assembling which changes some existing material into new |
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1 | | shapes, new
qualities, or new combinations. For purposes |
2 | | of this subsection
(e) the term "mining" shall have the |
3 | | same meaning as the term "mining" in
Section 613(c) of the |
4 | | Internal Revenue Code. For purposes of this subsection
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5 | | (e), the term "retailing" means the sale of tangible |
6 | | personal property for use or consumption and not for |
7 | | resale, or
services rendered in conjunction with the sale |
8 | | of tangible personal property for use or consumption and |
9 | | not for resale. For purposes of this subsection (e), |
10 | | "tangible personal property" has the same meaning as when |
11 | | that term is used in the Retailers' Occupation Tax Act, |
12 | | and, for taxable years ending after December 31, 2008, |
13 | | does not include the generation, transmission, or |
14 | | distribution of electricity. |
15 | | (4) The basis of qualified property shall be the basis
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16 | | used to compute the depreciation deduction for federal |
17 | | income tax purposes. |
18 | | (5) If the basis of the property for federal income |
19 | | tax depreciation
purposes is increased after it has been |
20 | | placed in service in Illinois by
the taxpayer, the amount |
21 | | of such increase shall be deemed property placed
in |
22 | | service on the date of such increase in basis. |
23 | | (6) The term "placed in service" shall have the same
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24 | | meaning as under Section 46 of the Internal Revenue Code. |
25 | | (7) If during any taxable year, any property ceases to
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26 | | be qualified property in the hands of the taxpayer within |
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1 | | 48 months after
being placed in service, or the situs of |
2 | | any qualified property is
moved outside Illinois within 48 |
3 | | months after being placed in service, the
Personal |
4 | | Property Tax Replacement Income Tax for such taxable year |
5 | | shall be
increased. Such increase shall be determined by |
6 | | (i) recomputing the
investment credit which would have |
7 | | been allowed for the year in which
credit for such |
8 | | property was originally allowed by eliminating such
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9 | | property from such computation and, (ii) subtracting such |
10 | | recomputed credit
from the amount of credit previously |
11 | | allowed. For the purposes of this
paragraph (7), a |
12 | | reduction of the basis of qualified property resulting
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13 | | from a redetermination of the purchase price shall be |
14 | | deemed a disposition
of qualified property to the extent |
15 | | of such reduction. |
16 | | (8) Unless the investment credit is extended by law, |
17 | | the
basis of qualified property shall not include costs |
18 | | incurred after
December 31, 2018, except for costs |
19 | | incurred pursuant to a binding
contract entered into on or |
20 | | before December 31, 2018. |
21 | | (9) Each taxable year ending before December 31, 2000, |
22 | | a partnership may
elect to pass through to its
partners |
23 | | the credits to which the partnership is entitled under |
24 | | this subsection
(e) for the taxable year. A partner may |
25 | | use the credit allocated to him or her
under this |
26 | | paragraph only against the tax imposed in subsections (c) |
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1 | | and (d) of
this Section. If the partnership makes that |
2 | | election, those credits shall be
allocated among the |
3 | | partners in the partnership in accordance with the rules
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4 | | set forth in Section 704(b) of the Internal Revenue Code, |
5 | | and the rules
promulgated under that Section, and the |
6 | | allocated amount of the credits shall
be allowed to the |
7 | | partners for that taxable year. The partnership shall make
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8 | | this election on its Personal Property Tax Replacement |
9 | | Income Tax return for
that taxable year. The election to |
10 | | pass through the credits shall be
irrevocable. |
11 | | For taxable years ending on or after December 31, |
12 | | 2000, a
partner that qualifies its
partnership for a |
13 | | subtraction under subparagraph (I) of paragraph (2) of
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14 | | subsection (d) of Section 203 or a shareholder that |
15 | | qualifies a Subchapter S
corporation for a subtraction |
16 | | under subparagraph (S) of paragraph (2) of
subsection (b) |
17 | | of Section 203 shall be allowed a credit under this |
18 | | subsection
(e) equal to its share of the credit earned |
19 | | under this subsection (e) during
the taxable year by the |
20 | | partnership or Subchapter S corporation, determined in
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21 | | accordance with the determination of income and |
22 | | distributive share of
income under Sections 702 and 704 |
23 | | and Subchapter S of the Internal Revenue
Code. This |
24 | | paragraph is exempt from the provisions of Section 250. |
25 | | (f) Investment credit; Enterprise Zone; River Edge |
26 | | Redevelopment Zone. |
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1 | | (1) A taxpayer shall be allowed a credit against the |
2 | | tax imposed
by subsections (a) and (b) of this Section for |
3 | | investment in qualified
property which is placed in |
4 | | service in an Enterprise Zone created
pursuant to the |
5 | | Illinois Enterprise Zone Act or, for property placed in |
6 | | service on or after July 1, 2006, a River Edge |
7 | | Redevelopment Zone established pursuant to the River Edge |
8 | | Redevelopment Zone Act. For partners, shareholders
of |
9 | | Subchapter S corporations, and owners of limited liability |
10 | | companies,
if the liability company is treated as a |
11 | | partnership for purposes of
federal and State income |
12 | | taxation, there shall be allowed a credit under
this |
13 | | subsection (f) to be determined in accordance with the |
14 | | determination
of income and distributive share of income |
15 | | under Sections 702 and 704 and
Subchapter S of the |
16 | | Internal Revenue Code. The credit shall be .5% of the
|
17 | | basis for such property. The credit shall be available |
18 | | only in the taxable
year in which the property is placed in |
19 | | service in the Enterprise Zone or River Edge Redevelopment |
20 | | Zone and
shall not be allowed to the extent that it would |
21 | | reduce a taxpayer's
liability for the tax imposed by |
22 | | subsections (a) and (b) of this Section to
below zero. For |
23 | | tax years ending on or after December 31, 1985, the credit
|
24 | | shall be allowed for the tax year in which the property is |
25 | | placed in
service, or, if the amount of the credit exceeds |
26 | | the tax liability for that
year, whether it exceeds the |
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1 | | original liability or the liability as later
amended, such |
2 | | excess may be carried forward and applied to the tax
|
3 | | liability of the 5 taxable years following the excess |
4 | | credit year.
The credit shall be applied to the earliest |
5 | | year for which there is a
liability. If there is credit |
6 | | from more than one tax year that is available
to offset a |
7 | | liability, the credit accruing first in time shall be |
8 | | applied
first. |
9 | | (2) The term qualified property means property which: |
10 | | (A) is tangible, whether new or used, including |
11 | | buildings and
structural components of buildings; |
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 | | (f); |
17 | | (C) is acquired by purchase as defined in Section |
18 | | 179(d) of
the Internal Revenue Code; |
19 | | (D) is used in the Enterprise Zone or River Edge |
20 | | Redevelopment Zone by the taxpayer; and |
21 | | (E) has not been previously used in Illinois in |
22 | | such a manner and by
such a person as would qualify for |
23 | | the credit provided by this subsection
(f) or |
24 | | subsection (e). |
25 | | (3) The basis of qualified property shall be the basis |
26 | | used to compute
the depreciation deduction for federal |
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1 | | income tax purposes. |
2 | | (4) If the basis of the property for federal income |
3 | | tax depreciation
purposes is increased after it has been |
4 | | placed in service in the Enterprise
Zone or River Edge |
5 | | Redevelopment Zone by the taxpayer, the amount of such |
6 | | increase shall be deemed property
placed in service on the |
7 | | date of such increase in basis. |
8 | | (5) The term "placed in service" shall have the same |
9 | | meaning as under
Section 46 of the Internal Revenue Code. |
10 | | (6) If during any taxable year, any property ceases to |
11 | | be qualified
property in the hands of the taxpayer within |
12 | | 48 months after being placed
in service, or the situs of |
13 | | any qualified property is moved outside the
Enterprise |
14 | | Zone or River Edge Redevelopment Zone within 48 months |
15 | | after being placed in service, the tax
imposed under |
16 | | subsections (a) and (b) of this Section for such taxable |
17 | | year
shall be increased. Such increase shall be determined |
18 | | by (i) recomputing
the investment credit which would have |
19 | | been allowed for the year in which
credit for such |
20 | | property was originally allowed by eliminating such
|
21 | | property from such computation, and (ii) subtracting such |
22 | | recomputed credit
from the amount of credit previously |
23 | | allowed. For the purposes of this
paragraph (6), a |
24 | | reduction of the basis of qualified property resulting
|
25 | | from a redetermination of the purchase price shall be |
26 | | deemed a disposition
of qualified property to the extent |
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1 | | of such reduction. |
2 | | (7) There shall be allowed an additional credit equal |
3 | | to 0.5% of the basis of qualified property placed in |
4 | | service during the taxable year in a River Edge |
5 | | Redevelopment Zone, provided such property is placed in |
6 | | service on or after July 1, 2006, and the taxpayer's base |
7 | | employment within Illinois has increased by 1% or more |
8 | | over the preceding year as determined by the taxpayer's |
9 | | employment records filed with the Illinois Department of |
10 | | Employment Security. Taxpayers who are new to Illinois |
11 | | shall be deemed to have met the 1% growth in base |
12 | | employment for the first year in which they file |
13 | | employment records with the Illinois Department of |
14 | | Employment Security. If, in any year, the increase in base |
15 | | employment within Illinois over the preceding year is less |
16 | | than 1%, the additional credit shall be limited to that |
17 | | percentage times a fraction, the numerator of which is |
18 | | 0.5% and the denominator of which is 1%, but shall not |
19 | | exceed 0.5%.
|
20 | | (8) For taxable years beginning on or after January 1, |
21 | | 2021, there shall be allowed an Enterprise Zone |
22 | | construction jobs credit against the taxes imposed under |
23 | | subsections (a) and (b) of this Section as provided in |
24 | | Section 13 of the Illinois Enterprise Zone Act. |
25 | | The credit or credits may not reduce the taxpayer's |
26 | | liability to less than zero. If the amount of the credit or |
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1 | | credits exceeds the taxpayer's liability, the excess may |
2 | | be carried forward and applied against the taxpayer's |
3 | | liability in succeeding calendar years in the same manner |
4 | | provided under paragraph (4) of Section 211 of this Act. |
5 | | The credit or credits shall be applied to the earliest |
6 | | year for which there is a tax liability. If there are |
7 | | credits from more than one taxable year that are available |
8 | | to offset a liability, the earlier credit shall be applied |
9 | | first. |
10 | | For partners, shareholders of Subchapter S |
11 | | corporations, and owners of limited liability companies, |
12 | | if the liability company is treated as a partnership for |
13 | | the purposes of federal and State income taxation, there |
14 | | shall be allowed a credit under this Section to be |
15 | | determined in accordance with the determination of income |
16 | | and distributive share of income under Sections 702 and |
17 | | 704 and Subchapter S of the Internal Revenue Code. |
18 | | The total aggregate amount of credits awarded under |
19 | | the Blue Collar Jobs Act (Article 20 of Public Act 101-9) |
20 | | shall not exceed $20,000,000 in any State fiscal year. |
21 | | This paragraph (8) is exempt from the provisions of |
22 | | Section 250. |
23 | | (g) (Blank). |
24 | | (h) Investment credit; High Impact Business. |
25 | | (1) Subject to subsections (b) and (b-5) of Section
|
26 | | 5.5 of the Illinois Enterprise Zone Act, a taxpayer shall |
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1 | | be allowed a credit
against the tax imposed by subsections |
2 | | (a) and (b) of this Section for
investment in qualified
|
3 | | property which is placed in service by a Department of |
4 | | Commerce and Economic Opportunity
designated High Impact |
5 | | Business. The credit shall be .5% of the basis
for such |
6 | | property. The credit shall not be available (i) until the |
7 | | minimum
investments in qualified property set forth in |
8 | | subdivision (a)(3)(A) of
Section 5.5 of the Illinois
|
9 | | Enterprise Zone Act have been satisfied
or (ii) until the |
10 | | time authorized in subsection (b-5) of the Illinois
|
11 | | Enterprise Zone Act for entities designated as High Impact |
12 | | Businesses under
subdivisions (a)(3)(B), (a)(3)(C), and |
13 | | (a)(3)(D) of Section 5.5 of the Illinois
Enterprise Zone |
14 | | Act, and shall not be allowed to the extent that it would
|
15 | | reduce a taxpayer's liability for the tax imposed by |
16 | | subsections (a) and (b) of
this Section to below zero. The |
17 | | credit applicable to such investments shall be
taken in |
18 | | the taxable year in which such investments have been |
19 | | completed. The
credit for additional investments beyond |
20 | | the minimum investment by a designated
high impact |
21 | | business authorized under subdivision (a)(3)(A) of Section |
22 | | 5.5 of
the Illinois Enterprise Zone Act shall be available |
23 | | only in the taxable year in
which the property is placed in |
24 | | service and shall not be allowed to the extent
that it |
25 | | would reduce a taxpayer's liability for the tax imposed by |
26 | | subsections
(a) and (b) of this Section to below zero.
For |
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1 | | tax years ending on or after December 31, 1987, the credit |
2 | | shall be
allowed for the tax year in which the property is |
3 | | placed in service, or, if
the amount of the credit exceeds |
4 | | the tax liability for that year, whether
it exceeds the |
5 | | original liability or the liability as later amended, such
|
6 | | excess may be carried forward and applied to the tax |
7 | | liability of the 5
taxable years following the excess |
8 | | credit year. The credit shall be
applied to the earliest |
9 | | year for which there is a liability. If there is
credit |
10 | | from more than one tax year that is available to offset a |
11 | | liability,
the credit accruing first in time shall be |
12 | | applied first. |
13 | | Changes made in this subdivision (h)(1) by Public Act |
14 | | 88-670
restore changes made by Public Act 85-1182 and |
15 | | reflect existing law. |
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 | | (h); |
24 | | (C) is acquired by purchase as defined in Section |
25 | | 179(d) of the
Internal Revenue Code; and |
26 | | (D) is not eligible for the Enterprise Zone |
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1 | | Investment Credit provided
by subsection (f) of this |
2 | | Section. |
3 | | (3) The basis of qualified property shall be the basis |
4 | | used to compute
the depreciation deduction for federal |
5 | | income tax purposes. |
6 | | (4) If the basis of the property for federal income |
7 | | tax depreciation
purposes is increased after it has been |
8 | | placed in service in a federally
designated Foreign Trade |
9 | | Zone or Sub-Zone located in Illinois by the taxpayer,
the |
10 | | amount of such increase shall be deemed property placed in |
11 | | service on
the date of such increase in basis. |
12 | | (5) The term "placed in service" shall have the same |
13 | | meaning as under
Section 46 of the Internal Revenue Code. |
14 | | (6) If during any taxable year ending on or before |
15 | | December 31, 1996,
any property ceases to be qualified
|
16 | | property in the hands of the taxpayer within 48 months |
17 | | after being placed
in service, or the situs of any |
18 | | qualified property is moved outside
Illinois within 48 |
19 | | months after being placed in service, the tax imposed
|
20 | | under subsections (a) and (b) of this Section for such |
21 | | taxable year shall
be increased. Such increase shall be |
22 | | determined by (i) recomputing the
investment credit which |
23 | | would have been allowed for the year in which
credit for |
24 | | such property was originally allowed by eliminating such
|
25 | | property from such computation, and (ii) subtracting such |
26 | | recomputed credit
from the amount of credit previously |
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1 | | allowed. For the purposes of this
paragraph (6), a |
2 | | reduction of the basis of qualified property resulting
|
3 | | from a redetermination of the purchase price shall be |
4 | | deemed a disposition
of qualified property to the extent |
5 | | of such reduction. |
6 | | (7) Beginning with tax years ending after December 31, |
7 | | 1996, if a
taxpayer qualifies for the credit under this |
8 | | subsection (h) and thereby is
granted a tax abatement and |
9 | | the taxpayer relocates its entire facility in
violation of |
10 | | the explicit terms and length of the contract under |
11 | | Section
18-183 of the Property Tax Code, the tax imposed |
12 | | under subsections
(a) and (b) of this Section shall be |
13 | | increased for the taxable year
in which the taxpayer |
14 | | relocated its facility by an amount equal to the
amount of |
15 | | credit received by the taxpayer under this subsection (h). |
16 | | (h-5) High Impact Business construction jobs credit. For |
17 | | taxable years beginning on or after January 1, 2021, there |
18 | | shall also be allowed a High Impact Business construction jobs |
19 | | credit against the tax imposed under subsections (a) and (b) |
20 | | of this Section as provided in subsections (i) and (j) of |
21 | | Section 5.5 of the Illinois Enterprise Zone Act. |
22 | | The credit or credits may not reduce the taxpayer's |
23 | | liability to less than zero. If the amount of the credit or |
24 | | credits exceeds the taxpayer's liability, the excess may be |
25 | | carried forward and applied against the taxpayer's liability |
26 | | in succeeding calendar years in the manner provided under |
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1 | | paragraph (4) of Section 211 of this Act. The credit or credits |
2 | | shall be applied to the earliest year for which there is a tax |
3 | | liability. If there are credits from more than one taxable |
4 | | year that are available to offset a liability, the earlier |
5 | | credit shall be applied first. |
6 | | For partners, shareholders of Subchapter S corporations, |
7 | | and owners of limited liability companies, if the liability |
8 | | company is treated as a partnership for the purposes of |
9 | | federal and State income taxation, there shall be allowed a |
10 | | credit under this Section to be determined in accordance with |
11 | | the determination of income and distributive share of income |
12 | | under Sections 702 and 704 and Subchapter S of the Internal |
13 | | Revenue Code. |
14 | | The total aggregate amount of credits awarded under the |
15 | | Blue Collar Jobs Act (Article 20 of Public Act 101-9) shall not |
16 | | exceed $20,000,000 in any State fiscal year. |
17 | | This subsection (h-5) is exempt from the provisions of |
18 | | Section 250. |
19 | | (i) Credit for Personal Property Tax Replacement Income |
20 | | Tax.
For tax years ending prior to December 31, 2003, a credit |
21 | | shall be allowed
against the tax imposed by
subsections (a) |
22 | | and (b) of this Section for the tax imposed by subsections (c)
|
23 | | and (d) of this Section. This credit shall be computed by |
24 | | multiplying the tax
imposed by subsections (c) and (d) of this |
25 | | Section by a fraction, the numerator
of which is base income |
26 | | allocable to Illinois and the denominator of which is
Illinois |
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1 | | base income, and further multiplying the product by the tax |
2 | | rate
imposed by subsections (a) and (b) of this Section. |
3 | | Any credit earned on or after December 31, 1986 under
this |
4 | | subsection which is unused in the year
the credit is computed |
5 | | because it exceeds the tax liability imposed by
subsections |
6 | | (a) and (b) for that year (whether it exceeds the original
|
7 | | liability or the liability as later amended) may be carried |
8 | | forward and
applied to the tax liability imposed by |
9 | | subsections (a) and (b) of the 5
taxable years following the |
10 | | excess credit year, provided that no credit may
be carried |
11 | | forward to any year ending on or
after December 31, 2003. This |
12 | | credit shall be
applied first to the earliest year for which |
13 | | there is a liability. If
there is a credit under this |
14 | | subsection from more than one tax year that is
available to |
15 | | offset a liability the earliest credit arising under this
|
16 | | subsection shall be applied first. |
17 | | If, during any taxable year ending on or after December |
18 | | 31, 1986, the
tax imposed by subsections (c) and (d) of this |
19 | | Section for which a taxpayer
has claimed a credit under this |
20 | | subsection (i) is reduced, the amount of
credit for such tax |
21 | | shall also be reduced. Such reduction shall be
determined by |
22 | | recomputing the credit to take into account the reduced tax
|
23 | | imposed by subsections (c) and (d). If any portion of the
|
24 | | reduced amount of credit has been carried to a different |
25 | | taxable year, an
amended return shall be filed for such |
26 | | taxable year to reduce the amount of
credit claimed. |
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1 | | (j) Training expense credit. Beginning with tax years |
2 | | ending on or
after December 31, 1986 and prior to December 31, |
3 | | 2003, a taxpayer shall be
allowed a credit against the
tax |
4 | | imposed by subsections (a) and (b) under this Section
for all |
5 | | amounts paid or accrued, on behalf of all persons
employed by |
6 | | the taxpayer in Illinois or Illinois residents employed
|
7 | | outside of Illinois by a taxpayer, for educational or |
8 | | vocational training in
semi-technical or technical fields or |
9 | | semi-skilled or skilled fields, which
were deducted from gross |
10 | | income in the computation of taxable income. The
credit |
11 | | against the tax imposed by subsections (a) and (b) shall be |
12 | | 1.6% of
such training expenses. For partners, shareholders of |
13 | | subchapter S
corporations, and owners of limited liability |
14 | | companies, if the liability
company is treated as a |
15 | | partnership for purposes of federal and State income
taxation, |
16 | | there shall be allowed a credit under this subsection (j) to be
|
17 | | determined in accordance with the determination of income and |
18 | | distributive
share of income under Sections 702 and 704 and |
19 | | subchapter S of the Internal
Revenue Code. |
20 | | Any credit allowed under this subsection which is unused |
21 | | in the year
the credit is earned may be carried forward to each |
22 | | of the 5 taxable
years following the year for which the credit |
23 | | is first computed until it is
used. This credit shall be |
24 | | applied first to the earliest year for which
there is a |
25 | | liability. If there is a credit under this subsection from |
26 | | more
than one tax year that is available to offset a liability, |
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1 | | the earliest
credit arising under this subsection shall be |
2 | | applied first. No carryforward
credit may be claimed in any |
3 | | tax year ending on or after
December 31, 2003. |
4 | | (k) Research and development credit. For tax years ending |
5 | | after July 1, 1990 and prior to
December 31, 2003, and |
6 | | beginning again for tax years ending on or after December 31, |
7 | | 2004, and ending prior to January 1, 2037 January 1, 2027 , a |
8 | | taxpayer shall be
allowed a credit against the tax imposed by |
9 | | subsections (a) and (b) of this
Section for increasing |
10 | | research activities in this State. The credit
allowed against |
11 | | the tax imposed by subsections (a) and (b) shall be equal
to 6 |
12 | | 1/2% of the qualifying expenditures for increasing research |
13 | | activities
in this State , except that, in the case of |
14 | | qualifying quantum information science expenditures, the |
15 | | credit allowed against the tax imposed by subsections (a) and |
16 | | (b) of this Section shall be equal to 13% of the qualifying |
17 | | expenditures for increasing research activities in this State . |
18 | | For partners, shareholders of subchapter S corporations, and
|
19 | | owners of limited liability companies, if the liability |
20 | | company is treated as a
partnership for purposes of federal |
21 | | and State income taxation, there shall be
allowed a credit |
22 | | under this subsection to be determined in accordance with the
|
23 | | determination of income and distributive share of income under |
24 | | Sections 702 and
704 and subchapter S of the Internal Revenue |
25 | | Code. |
26 | | In lieu of the credit allowed under this subsection (k) |
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1 | | against taxes imposed pursuant to subsections (a) and (b) of |
2 | | this Section, for any taxable year ending after December 31, |
3 | | 2023, a qualified startup taxpayer may elect to claim the |
4 | | credit against its obligation to pay over withholding taxes |
5 | | under Section 704A. However, the taxpayer may not make such an |
6 | | election for a taxable year if the taxpayer has an Illinois |
7 | | income tax liability for that taxable year with respect to the |
8 | | taxes imposed pursuant to subsections (a) and (b) of Section |
9 | | 201 of this Act against which the taxpayer may claim the credit |
10 | | under this subsection (k). |
11 | | As used in For purposes of this subsection : , |
12 | | "Business entity" means a corporation, association, |
13 | | partnership, limited liability company, or other legal |
14 | | entity. |
15 | | "Qualified startup taxpayer" means a business entity |
16 | | that (i) was incorporated or organized no more than 5 |
17 | | years before the first day of the taxable year for which |
18 | | the credit is sought, (ii) has never had any Illinois |
19 | | income tax liability, excluding any Illinois income tax |
20 | | liability of a related member, which shall not be |
21 | | attributed to the startup taxpayer, and (iii) otherwise |
22 | | meets the requirements of this subsection (k). |
23 | | "Qualifying "qualifying expenditures" means the
|
24 | | qualifying expenditures as defined for the federal credit |
25 | | for increasing
research activities which would be |
26 | | allowable under Section 41 of the
Internal Revenue Code |
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1 | | and which are conducted in this State . , |
2 | | "Qualifying "qualifying
expenditures for increasing |
3 | | research activities in this State" means the
excess of |
4 | | qualifying expenditures for the taxable year in which |
5 | | incurred
over qualifying expenditures for the base period . |
6 | | , |
7 | | "Qualifying "qualifying expenditures
for the base |
8 | | period" means the average of the qualifying expenditures |
9 | | for
each year in the base period, and "base period" means |
10 | | the 3 taxable years
immediately preceding the taxable year |
11 | | for which the determination is
being made. |
12 | | "Qualifying quantum information science expenditures" |
13 | | means qualifying expenditures in quantum information |
14 | | science, as that term is defined in Section 2 of the |
15 | | federal National Quantum Initiative Act. |
16 | | "Related member" has the meaning given to the term in |
17 | | Section 5-5 of the Economic Development for a Growing |
18 | | Economy Tax Credit Act. |
19 | | Any credit in excess of the tax liability for the taxable |
20 | | year
may be carried forward. A taxpayer may elect to have the
|
21 | | unused credit shown on its final completed return carried over |
22 | | as a credit
against the tax liability for the following 5 |
23 | | taxable years or until it has
been fully used, whichever |
24 | | occurs first; provided that no credit earned in a tax year |
25 | | ending prior to December 31, 2003 may be carried forward to any |
26 | | year ending on or after December 31, 2003. |
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1 | | If an unused credit is carried forward to a given year from |
2 | | 2 or more
earlier years, that credit arising in the earliest |
3 | | year will be applied
first against the tax liability for the |
4 | | given year. If a tax liability for
the given year still |
5 | | remains, the credit from the next earliest year will
then be |
6 | | applied, and so on, until all credits have been used or no tax
|
7 | | liability for the given year remains. Any remaining unused |
8 | | credit or
credits then will be carried forward to the next |
9 | | following year in which a
tax liability is incurred, except |
10 | | that no credit can be carried forward to
a year which is more |
11 | | than 5 years after the year in which the expense for
which the |
12 | | credit is given was incurred. |
13 | | If the taxpayer makes qualifying quantum information |
14 | | science expenditures, and the credit claimed under this |
15 | | subsection exceeds the taxpayer's Illinois income tax |
16 | | liability, then 90% of the excess credit amount may be |
17 | | refunded to the taxpayer in accordance with rules adopted by |
18 | | the Department. If the excess credit amount is refunded to the |
19 | | taxpayer, then the portion of the excess credit amount that is |
20 | | refunded to the taxpayer may not be carried forward and may not |
21 | | be taken against the taxpayer's obligations to pay withholding |
22 | | taxes under Section 704A. |
23 | | No inference shall be drawn from Public Act 91-644 in |
24 | | construing this Section for taxable years beginning before |
25 | | January
1, 1999. |
26 | | It is the intent of the General Assembly that the research |
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1 | | and development credit under this subsection (k) shall apply |
2 | | continuously for all tax years ending on or after December 31, |
3 | | 2004 and ending prior to January 1, 2027, including, but not |
4 | | limited to, the period beginning on January 1, 2016 and ending |
5 | | on July 6, 2017 (the effective date of Public Act 100-22). All |
6 | | actions taken in reliance on the continuation of the credit |
7 | | under this subsection (k) by any taxpayer are hereby |
8 | | validated. |
9 | | (l) Environmental Remediation Tax Credit. |
10 | | (i) For tax years ending after December 31, 1997 and |
11 | | on or before
December 31, 2001, a taxpayer shall be |
12 | | allowed a credit against the tax
imposed by subsections |
13 | | (a) and (b) of this Section for certain amounts paid
for |
14 | | unreimbursed eligible remediation costs, as specified in |
15 | | this subsection.
For purposes of this Section, |
16 | | "unreimbursed eligible remediation costs" means
costs |
17 | | approved by the Illinois Environmental Protection Agency |
18 | | ("Agency") under
Section 58.14 of the Environmental |
19 | | Protection Act that were paid in performing
environmental |
20 | | remediation at a site 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 |
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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. After the Pollution |
5 | | Control Board rules are adopted pursuant to the
Illinois |
6 | | Administrative Procedure Act for the administration and |
7 | | enforcement of
Section 58.9 of the Environmental |
8 | | Protection Act, determinations as to credit
availability |
9 | | for purposes of this Section shall be made consistent with |
10 | | those
rules. For purposes of this Section, "taxpayer" |
11 | | includes a person whose tax
attributes the taxpayer has |
12 | | succeeded to under Section 381 of the Internal
Revenue |
13 | | Code and "related party" includes the persons disallowed a |
14 | | deduction
for losses by paragraphs (b), (c), and (f)(1) of |
15 | | Section 267 of the Internal
Revenue Code by virtue of |
16 | | being a related taxpayer, as well as any of its
partners. |
17 | | The credit allowed against the tax imposed by subsections |
18 | | (a) and
(b) shall be equal to 25% of the unreimbursed |
19 | | eligible remediation costs in
excess of $100,000 per site, |
20 | | except that the $100,000 threshold shall not apply
to any |
21 | | site contained in an enterprise zone as determined by the |
22 | | Department of
Commerce and Community Affairs (now |
23 | | Department of Commerce and Economic Opportunity). The |
24 | | total credit allowed shall not exceed
$40,000 per year |
25 | | with a maximum total of $150,000 per site. For partners |
26 | | and
shareholders of subchapter S corporations, there shall |
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1 | | be allowed a credit
under this subsection to be determined |
2 | | in 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. |
5 | | (ii) A credit allowed under this subsection that is |
6 | | unused in the year
the credit is earned may be carried |
7 | | forward to each of the 5 taxable years
following the year |
8 | | for which the credit is first earned until it is used.
The |
9 | | term "unused credit" does not include any amounts of |
10 | | unreimbursed eligible
remediation costs in excess of the |
11 | | maximum credit per site authorized under
paragraph (i). |
12 | | This credit shall be applied first to the earliest year
|
13 | | for which there is a liability. If there is a credit under |
14 | | this subsection
from more than one tax year that is |
15 | | available to offset a liability, the
earliest credit |
16 | | arising under this subsection shall be applied first. A
|
17 | | credit allowed under this subsection may be sold to a |
18 | | buyer as part of a sale
of all or part of the remediation |
19 | | site for which the credit was granted. The
purchaser of a |
20 | | remediation site and the tax credit shall succeed to the |
21 | | unused
credit and remaining carry-forward period of the |
22 | | seller. To perfect the
transfer, the assignor shall record |
23 | | the transfer in the chain of title for the
site and provide |
24 | | written notice to the Director of the Illinois Department |
25 | | of
Revenue of the assignor's intent to sell the |
26 | | remediation site and the amount of
the tax credit to be |
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1 | | transferred as a portion of the sale. In no event may a
|
2 | | credit be transferred to any taxpayer if the taxpayer or a |
3 | | related party would
not be eligible under the provisions |
4 | | of subsection (i). |
5 | | (iii) For purposes of this Section, the term "site" |
6 | | shall have the same
meaning as under Section 58.2 of the |
7 | | Environmental Protection Act. |
8 | | (m) Education expense credit. Beginning with tax years |
9 | | ending after
December 31, 1999, a taxpayer who
is the |
10 | | custodian of one or more qualifying pupils shall be allowed a |
11 | | credit
against the tax imposed by subsections (a) and (b) of |
12 | | this Section for
qualified education expenses incurred on |
13 | | behalf of the qualifying pupils.
The credit shall be equal to |
14 | | 25% of qualified education expenses, but in no
event may the |
15 | | total credit under this subsection claimed by a
family that is |
16 | | the
custodian of qualifying pupils exceed (i) $500 for tax |
17 | | years ending prior to December 31, 2017, and (ii) $750 for tax |
18 | | years ending on or after December 31, 2017. In no event shall a |
19 | | credit under
this subsection reduce the taxpayer's liability |
20 | | under this Act to less than
zero. Notwithstanding any other |
21 | | provision of law, for taxable years beginning on or after |
22 | | January 1, 2017, no taxpayer may claim a credit under this |
23 | | subsection (m) if the taxpayer's adjusted gross income for the |
24 | | taxable year exceeds (i) $500,000, in the case of spouses |
25 | | filing a joint federal tax return or (ii) $250,000, in the case |
26 | | of all other taxpayers. This subsection is exempt from the |
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1 | | provisions of Section 250 of this
Act. |
2 | | For purposes of this subsection: |
3 | | "Qualifying pupils" means individuals who (i) are |
4 | | residents of the State of
Illinois, (ii) are under the age of |
5 | | 21 at the close of the school year for
which a credit is |
6 | | sought, and (iii) during the school year for which a credit
is |
7 | | sought were full-time pupils enrolled in a kindergarten |
8 | | through twelfth
grade education program at any school, as |
9 | | defined in this subsection. |
10 | | "Qualified education expense" means the amount incurred
on |
11 | | behalf of a qualifying pupil in excess of $250 for tuition, |
12 | | book fees, and
lab fees at the school in which the pupil is |
13 | | enrolled during the regular school
year. |
14 | | "School" means any public or nonpublic elementary or |
15 | | secondary school in
Illinois that is in compliance with Title |
16 | | VI of the Civil Rights Act of 1964
and attendance at which |
17 | | satisfies the requirements of Section 26-1 of the
School Code, |
18 | | except that nothing shall be construed to require a child to
|
19 | | attend any particular public or nonpublic school to qualify |
20 | | for the credit
under this Section. |
21 | | "Custodian" means, with respect to qualifying pupils, an |
22 | | Illinois resident
who is a parent, the parents, a legal |
23 | | guardian, or the legal guardians of the
qualifying pupils. |
24 | | (n) River Edge Redevelopment Zone site remediation tax |
25 | | credit.
|
26 | | (i) For tax years ending on or after December 31, |
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1 | | 2006, a taxpayer shall be allowed a credit against the tax |
2 | | imposed by subsections (a) and (b) of this Section for |
3 | | certain amounts paid for unreimbursed eligible remediation |
4 | | costs, as specified in this subsection. For purposes of |
5 | | this Section, "unreimbursed eligible remediation costs" |
6 | | means costs approved by the Illinois Environmental |
7 | | Protection Agency ("Agency") under Section 58.14a of the |
8 | | Environmental Protection Act that were paid in performing |
9 | | environmental remediation at a site within a River Edge |
10 | | Redevelopment Zone for which a No Further Remediation |
11 | | Letter was issued by the Agency and recorded under Section |
12 | | 58.10 of the Environmental Protection Act. The credit must |
13 | | be claimed for the taxable year in which Agency approval |
14 | | of the eligible remediation costs is granted. The credit |
15 | | is not available to any taxpayer if the taxpayer or any |
16 | | related party caused or contributed to, in any material |
17 | | respect, a release of regulated substances on, in, or |
18 | | under the site that was identified and addressed by the |
19 | | remedial action pursuant to the Site Remediation Program |
20 | | of the Environmental Protection Act. Determinations as to |
21 | | credit availability for purposes of this Section shall be |
22 | | made consistent with rules adopted by the Pollution |
23 | | Control Board pursuant to the Illinois Administrative |
24 | | Procedure Act for the administration and enforcement of |
25 | | Section 58.9 of the Environmental Protection Act. For |
26 | | purposes of this Section, "taxpayer" includes a person |
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1 | | whose tax attributes the taxpayer has succeeded to under |
2 | | Section 381 of the Internal Revenue Code and "related |
3 | | party" includes the persons disallowed a deduction for |
4 | | losses by paragraphs (b), (c), and (f)(1) of Section 267 |
5 | | of the Internal Revenue Code by virtue of being a related |
6 | | taxpayer, as well as any of its partners. The credit |
7 | | allowed against the tax imposed by subsections (a) and (b) |
8 | | shall be equal to 25% of the unreimbursed eligible |
9 | | remediation costs in excess of $100,000 per site. |
10 | | (ii) A credit allowed under this subsection that is |
11 | | unused in the year the credit is earned may be carried |
12 | | forward to each of the 5 taxable years following the year |
13 | | for which the credit is first earned until it is used. This |
14 | | credit shall be applied first to the earliest year for |
15 | | which there is a liability. If there is a credit under this |
16 | | subsection from more than one tax year that is available |
17 | | to offset a liability, the earliest credit arising under |
18 | | this subsection shall be applied first. A credit allowed |
19 | | under this subsection may be sold to a buyer as part of a |
20 | | sale of all or part of the remediation site for which the |
21 | | credit was granted. The purchaser of a remediation site |
22 | | and the tax credit shall succeed to the unused credit and |
23 | | remaining carry-forward period of the seller. To perfect |
24 | | the transfer, the assignor shall record the transfer in |
25 | | the chain of title for the site and provide written notice |
26 | | to the Director of the Illinois Department of Revenue of |
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1 | | the assignor's intent to sell the remediation site and the |
2 | | amount of the tax credit to be transferred as a portion of |
3 | | the sale. In no event may a credit be transferred to any |
4 | | taxpayer if the taxpayer or a related party would not be |
5 | | eligible under the provisions of subsection (i). |
6 | | (iii) For purposes of this Section, the term "site" |
7 | | shall have the same meaning as under Section 58.2 of the |
8 | | Environmental Protection Act. |
9 | | (o) For each of taxable years during the Compassionate Use |
10 | | of Medical Cannabis Program, a surcharge is imposed on all |
11 | | taxpayers on income arising from the sale or exchange of |
12 | | capital assets, depreciable business property, real property |
13 | | used in the trade or business, and Section 197 intangibles of |
14 | | an organization registrant under the Compassionate Use of |
15 | | Medical Cannabis Program Act. The amount of the surcharge is |
16 | | equal to the amount of federal income tax liability for the |
17 | | taxable year attributable to those sales and exchanges. The |
18 | | surcharge imposed does not apply if: |
19 | | (1) the medical cannabis cultivation center |
20 | | registration, medical cannabis dispensary registration, or |
21 | | the property of a registration is transferred as a result |
22 | | of any of the following: |
23 | | (A) bankruptcy, a receivership, or a debt |
24 | | adjustment initiated by or against the initial |
25 | | registration or the substantial owners of the initial |
26 | | registration; |
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1 | | (B) cancellation, revocation, or termination of |
2 | | any registration by the Illinois Department of Public |
3 | | Health; |
4 | | (C) a determination by the Illinois Department of |
5 | | Public Health that transfer of the registration is in |
6 | | the best interests of Illinois qualifying patients as |
7 | | defined by the Compassionate Use of Medical Cannabis |
8 | | Program Act; |
9 | | (D) the death of an owner of the equity interest in |
10 | | a registrant; |
11 | | (E) the acquisition of a controlling interest in |
12 | | the stock or substantially all of the assets of a |
13 | | publicly traded company; |
14 | | (F) a transfer by a parent company to a wholly |
15 | | owned subsidiary; or |
16 | | (G) the transfer or sale to or by one person to |
17 | | another person where both persons were initial owners |
18 | | of the registration when the registration was issued; |
19 | | or |
20 | | (2) the cannabis cultivation center registration, |
21 | | medical cannabis dispensary registration, or the |
22 | | controlling interest in a registrant's property is |
23 | | transferred in a transaction to lineal descendants in |
24 | | which no gain or loss is recognized or as a result of a |
25 | | transaction in accordance with Section 351 of the Internal |
26 | | Revenue Code in which no gain or loss is recognized. |
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1 | | (p) Pass-through entity tax. |
2 | | (1) For taxable years ending on or after December 31, |
3 | | 2021 and beginning prior to January 1, 2026, a partnership |
4 | | (other than a publicly traded partnership under Section |
5 | | 7704 of the Internal Revenue Code) or Subchapter S |
6 | | corporation may elect to apply the provisions of this |
7 | | subsection. A separate election shall be made for each |
8 | | taxable year. Such election shall be made at such time, |
9 | | and in such form and manner as prescribed by the |
10 | | Department, and, once made, is irrevocable. |
11 | | (2) Entity-level tax. A partnership or Subchapter S |
12 | | corporation electing to apply the provisions of this |
13 | | subsection shall be subject to a tax for the privilege of |
14 | | earning or receiving income in this State in an amount |
15 | | equal to 4.95% of the taxpayer's net income for the |
16 | | taxable year. |
17 | | (3) Net income defined. |
18 | | (A) In general. For purposes of paragraph (2), the |
19 | | term net income has the same meaning as defined in |
20 | | Section 202 of this Act, except that the following |
21 | | provisions shall not apply: |
22 | | (i) the standard exemption allowed under |
23 | | Section 204; |
24 | | (ii) the deduction for net losses allowed |
25 | | under Section 207; |
26 | | (iii) in the case of an S corporation, the |
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1 | | modification under Section 203(b)(2)(S); and |
2 | | (iv) in the case of a partnership, the |
3 | | modifications under Section 203(d)(2)(H) and |
4 | | Section 203(d)(2)(I). |
5 | | (B) Special rule for tiered partnerships. If a |
6 | | taxpayer making the election under paragraph (1) is a |
7 | | partner of another taxpayer making the election under |
8 | | paragraph (1), net income shall be computed as |
9 | | provided in subparagraph (A), except that the taxpayer |
10 | | shall subtract its distributive share of the net |
11 | | income of the electing partnership (including its |
12 | | distributive share of the net income of the electing |
13 | | partnership derived as a distributive share from |
14 | | electing partnerships in which it is a partner). |
15 | | (4) Credit for entity level tax. Each partner or |
16 | | shareholder of a taxpayer making the election under this |
17 | | Section shall be allowed a credit against the tax imposed |
18 | | under subsections (a) and (b) of Section 201 of this Act |
19 | | for the taxable year of the partnership or Subchapter S |
20 | | corporation for which an election is in effect ending |
21 | | within or with the taxable year of the partner or |
22 | | shareholder in an amount equal to 4.95% times the partner |
23 | | or shareholder's distributive share of the net income of |
24 | | the electing partnership or Subchapter S corporation, but |
25 | | not to exceed the partner's or shareholder's share of the |
26 | | tax imposed under paragraph (1) which is actually paid by |
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1 | | the partnership or Subchapter S corporation. If the |
2 | | taxpayer is a partnership or Subchapter S corporation that |
3 | | is itself a partner of a partnership making the election |
4 | | under paragraph (1), the credit under this paragraph shall |
5 | | be allowed to the taxpayer's partners or shareholders (or |
6 | | if the partner is a partnership or Subchapter S |
7 | | corporation then its partners or shareholders) in |
8 | | accordance with the determination of income and |
9 | | distributive share of income under Sections 702 and 704 |
10 | | and Subchapter S of the Internal Revenue Code. If the |
11 | | amount of the credit allowed under this paragraph exceeds |
12 | | the partner's or shareholder's liability for tax imposed |
13 | | under subsections (a) and (b) of Section 201 of this Act |
14 | | for the taxable year, such excess shall be treated as an |
15 | | overpayment for purposes of Section 909 of this Act. |
16 | | (5) Nonresidents. A nonresident individual who is a |
17 | | partner or shareholder of a partnership or Subchapter S |
18 | | corporation for a taxable year for which an election is in |
19 | | effect under paragraph (1) shall not be required to file |
20 | | an income tax return under this Act for such taxable year |
21 | | if the only source of net income of the individual (or the |
22 | | individual and the individual's spouse in the case of a |
23 | | joint return) is from an entity making the election under |
24 | | paragraph (1) and the credit allowed to the partner or |
25 | | shareholder under paragraph (4) equals or exceeds the |
26 | | individual's liability for the tax imposed under |
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1 | | subsections (a) and (b) of Section 201 of this Act for the |
2 | | taxable year. |
3 | | (6) Liability for tax. Except as provided in this |
4 | | paragraph, a partnership or Subchapter S making the |
5 | | election under paragraph (1) is liable for the |
6 | | entity-level tax imposed under paragraph (2). If the |
7 | | electing partnership or corporation fails to pay the full |
8 | | amount of tax deemed assessed under paragraph (2), the |
9 | | partners or shareholders shall be liable to pay the tax |
10 | | assessed (including penalties and interest). Each partner |
11 | | or shareholder shall be liable for the unpaid assessment |
12 | | based on the ratio of the partner's or shareholder's share |
13 | | of the net income of the partnership over the total net |
14 | | income of the partnership. If the partnership or |
15 | | Subchapter S corporation fails to pay the tax assessed |
16 | | (including penalties and interest) and thereafter an |
17 | | amount of such tax is paid by the partners or |
18 | | shareholders, such amount shall not be collected from the |
19 | | partnership or corporation. |
20 | | (7) Foreign tax. For purposes of the credit allowed |
21 | | under Section 601(b)(3) of this Act, tax paid by a |
22 | | partnership or Subchapter S corporation to another state |
23 | | which, as determined by the Department, is substantially |
24 | | similar to the tax imposed under this subsection, shall be |
25 | | considered tax paid by the partner or shareholder to the |
26 | | extent that the partner's or shareholder's share of the |
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1 | | income of the partnership or Subchapter S corporation |
2 | | allocated and apportioned to such other state bears to the |
3 | | total income of the partnership or Subchapter S |
4 | | corporation allocated or apportioned to such other state. |
5 | | (8) Suspension of withholding. The provisions of |
6 | | Section 709.5 of this Act shall not apply to a partnership |
7 | | or Subchapter S corporation for the taxable year for which |
8 | | an election under paragraph (1) is in effect. |
9 | | (9) Requirement to pay estimated tax. For each taxable |
10 | | year for which an election under paragraph (1) is in |
11 | | effect, a partnership or Subchapter S corporation is |
12 | | required to pay estimated tax for such taxable year under |
13 | | Sections 803 and 804 of this Act if the amount payable as |
14 | | estimated tax can reasonably be expected to exceed $500. |
15 | | (10) The provisions of this subsection shall apply |
16 | | only with respect to taxable years for which the |
17 | | limitation on individual deductions applies under Section |
18 | | 164(b)(6) of the Internal Revenue Code. |
19 | | (Source: P.A. 101-9, eff. 6-5-19; 101-31, eff. 6-28-19; |
20 | | 101-207, eff. 8-2-19; 101-363, eff. 8-9-19; 102-558, eff. |
21 | | 8-20-21; 102-658, eff. 8-27-21.) |
22 | | (35 ILCS 5/704A) |
23 | | Sec. 704A. Employer's return and payment of tax withheld. |
24 | | (a) In general, every employer who deducts and withholds |
25 | | or is required to deduct and withhold tax under this Act on or |
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1 | | after January 1, 2008 shall make those payments and returns as |
2 | | provided in this Section. |
3 | | (b) Returns. Every employer shall, in the form and manner |
4 | | required by the Department, make returns with respect to taxes |
5 | | withheld or required to be withheld under this Article 7 for |
6 | | each quarter beginning on or after January 1, 2008, on or |
7 | | before the last day of the first month following the close of |
8 | | that quarter. |
9 | | (c) Payments. With respect to amounts withheld or required |
10 | | to be withheld on or after January 1, 2008: |
11 | | (1) Semi-weekly payments. For each calendar year, each |
12 | | employer who withheld or was required to withhold more |
13 | | than $12,000 during the one-year period ending on June 30 |
14 | | of the immediately preceding calendar year, payment must |
15 | | be made: |
16 | | (A) on or before each Friday of the calendar year, |
17 | | for taxes withheld or required to be withheld on the |
18 | | immediately preceding Saturday, Sunday, Monday, or |
19 | | Tuesday; |
20 | | (B) on or before each Wednesday of the calendar |
21 | | year, for taxes withheld or required to be withheld on |
22 | | the immediately preceding Wednesday, Thursday, or |
23 | | Friday. |
24 | | Beginning with calendar year 2011, payments made under |
25 | | this paragraph (1) of subsection (c) must be made by |
26 | | electronic funds transfer. |
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1 | | (2) Semi-weekly payments. Any employer who withholds |
2 | | or is required to withhold more than $12,000 in any |
3 | | quarter of a calendar year is required to make payments on |
4 | | the dates set forth under item (1) of this subsection (c) |
5 | | for each remaining quarter of that calendar year and for |
6 | | the subsequent calendar year.
|
7 | | (3) Monthly payments. Each employer, other than an |
8 | | employer described in items (1) or (2) of this subsection, |
9 | | shall pay to the Department, on or before the 15th day of |
10 | | each month the taxes withheld or required to be withheld |
11 | | during the immediately preceding month. |
12 | | (4) Payments with returns. Each employer shall pay to |
13 | | the Department, on or before the due date for each return |
14 | | required to be filed under this Section, any tax withheld |
15 | | or required to be withheld during the period for which the |
16 | | return is due and not previously paid to the Department. |
17 | | (d) Regulatory authority. The Department may, by rule: |
18 | | (1) Permit employers, in lieu of the requirements of |
19 | | subsections (b) and (c), to file annual returns due on or |
20 | | before January 31 of the year for taxes withheld or |
21 | | required to be withheld during the previous calendar year |
22 | | and, if the aggregate amounts required to be withheld by |
23 | | the employer under this Article 7 (other than amounts |
24 | | required to be withheld under Section 709.5) do not exceed |
25 | | $1,000 for the previous calendar year, to pay the taxes |
26 | | required to be shown on each such return no later than the |
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1 | | due date for such return. |
2 | | (2) Provide that any payment required to be made under |
3 | | subsection (c)(1) or (c)(2) is deemed to be timely to the |
4 | | extent paid by electronic funds transfer on or before the |
5 | | due date for deposit of federal income taxes withheld |
6 | | from, or federal employment taxes due with respect to, the |
7 | | wages from which the Illinois taxes were withheld. |
8 | | (3) Designate one or more depositories to which |
9 | | payment of taxes required to be withheld under this |
10 | | Article 7 must be paid by some or all employers. |
11 | | (4) Increase the threshold dollar amounts at which |
12 | | employers are required to make semi-weekly payments under |
13 | | subsection (c)(1) or (c)(2). |
14 | | (e) Annual return and payment. Every employer who deducts |
15 | | and withholds or is required to deduct and withhold tax from a |
16 | | person engaged in domestic service employment, as that term is |
17 | | defined in Section 3510 of the Internal Revenue Code, may |
18 | | comply with the requirements of this Section with respect to |
19 | | such employees by filing an annual return and paying the taxes |
20 | | required to be deducted and withheld on or before the 15th day |
21 | | of the fourth month following the close of the employer's |
22 | | taxable year. The Department may allow the employer's return |
23 | | to be submitted with the employer's individual income tax |
24 | | return or to be submitted with a return due from the employer |
25 | | under Section 1400.2 of the Unemployment Insurance Act. |
26 | | (f) Magnetic media and electronic filing. With respect to |
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1 | | taxes withheld in calendar years prior to 2017, any W-2 Form |
2 | | that, under the Internal Revenue Code and regulations |
3 | | promulgated thereunder, is required to be submitted to the |
4 | | Internal Revenue Service on magnetic media or electronically |
5 | | must also be submitted to the Department on magnetic media or |
6 | | electronically for Illinois purposes, if required by the |
7 | | Department. |
8 | | With respect to taxes withheld in 2017 and subsequent |
9 | | calendar years, the Department may, by rule, require that any |
10 | | return (including any amended return) under this Section and |
11 | | any W-2 Form that is required to be submitted to the Department |
12 | | must be submitted on magnetic media or electronically. |
13 | | The due date for submitting W-2 Forms shall be as |
14 | | prescribed by the Department by rule. |
15 | | (g) For amounts deducted or withheld after December 31, |
16 | | 2009, a taxpayer who makes an election under subsection (f) of |
17 | | Section 5-15 of the Economic Development for a Growing Economy |
18 | | Tax Credit Act for a taxable year shall be allowed a credit |
19 | | against payments due under this Section for amounts withheld |
20 | | during the first calendar year beginning after the end of that |
21 | | taxable year equal to the amount of the credit for the |
22 | | incremental income tax attributable to full-time employees of |
23 | | the taxpayer awarded to the taxpayer by the Department of |
24 | | Commerce and Economic Opportunity under the Economic |
25 | | Development for a Growing Economy Tax Credit Act for the |
26 | | taxable year and credits not previously claimed and allowed to |
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1 | | be carried forward under Section 211(4) of this Act as |
2 | | provided in subsection (f) of Section 5-15 of the Economic |
3 | | Development for a Growing Economy Tax Credit Act. The credit |
4 | | or credits may not reduce the taxpayer's obligation for any |
5 | | payment due under this Section to less than zero. If the amount |
6 | | of the credit or credits exceeds the total payments due under |
7 | | this Section with respect to amounts withheld during the |
8 | | calendar year, the excess may be carried forward and applied |
9 | | against the taxpayer's liability under this Section in the |
10 | | succeeding calendar years as allowed to be carried forward |
11 | | under paragraph (4) of Section 211 of this Act. The credit or |
12 | | credits shall be applied to the earliest year for which there |
13 | | is a tax liability. If there are credits from more than one |
14 | | taxable year that are available to offset a liability, the |
15 | | earlier credit shall be applied first. Each employer who |
16 | | deducts and withholds or is required to deduct and withhold |
17 | | tax under this Act and who retains income tax withholdings |
18 | | under subsection (f) of Section 5-15 of the Economic |
19 | | Development for a Growing Economy Tax Credit Act must make a |
20 | | return with respect to such taxes and retained amounts in the |
21 | | form and manner that the Department, by rule, requires and pay |
22 | | to the Department or to a depositary designated by the |
23 | | Department those withheld taxes not retained by the taxpayer. |
24 | | For purposes of this subsection (g), the term taxpayer shall |
25 | | include taxpayer and members of the taxpayer's unitary |
26 | | business group as defined under paragraph (27) of subsection |
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1 | | (a) of Section 1501 of this Act. This Section is exempt from |
2 | | the provisions of Section 250 of this Act. No credit awarded |
3 | | under the Economic Development for a Growing Economy Tax |
4 | | Credit Act for agreements entered into on or after January 1, |
5 | | 2015 may be credited against payments due under this Section. |
6 | | (g-1) For amounts deducted or withheld after December 31, |
7 | | 2024, a taxpayer who makes an election under the Reimagining |
8 | | Electric Vehicles in Illinois Act shall be allowed a credit |
9 | | against payments due under this Section for amounts withheld |
10 | | during the first quarterly reporting period beginning after |
11 | | the certificate is issued equal to the portion of the REV |
12 | | Illinois Credit attributable to the incremental income tax |
13 | | attributable to new employees and retained employees as |
14 | | certified by the Department of Commerce and Economic |
15 | | Opportunity pursuant to an agreement with the taxpayer under |
16 | | the Reimagining Electric Vehicles in Illinois Act for the |
17 | | taxable year. The credit or credits may not reduce the |
18 | | taxpayer's obligation for any payment due under this Section |
19 | | to less than zero. If the amount of the credit or credits |
20 | | exceeds the total payments due under this Section with respect |
21 | | to amounts withheld during the quarterly reporting period, the |
22 | | excess may be carried forward and applied against the |
23 | | taxpayer's liability under this Section in the succeeding |
24 | | quarterly reporting period as allowed to be carried forward |
25 | | under paragraph (4) of Section 211 of this Act. The credit or |
26 | | credits shall be applied to the earliest quarterly reporting |
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1 | | period for which there is a tax liability. If there are credits |
2 | | from more than one quarterly reporting period that are |
3 | | available to offset a liability, the earlier credit shall be |
4 | | applied first. Each employer who deducts and withholds or is |
5 | | required to deduct and withhold tax under this Act and who |
6 | | retains income tax withholdings this subsection must make a |
7 | | return with respect to such taxes and retained amounts in the |
8 | | form and manner that the Department, by rule, requires and pay |
9 | | to the Department or to a depositary designated by the |
10 | | Department those withheld taxes not retained by the taxpayer. |
11 | | For purposes of this subsection (g-1), the term taxpayer shall |
12 | | include taxpayer and members of the taxpayer's unitary |
13 | | business group as defined under paragraph (27) of subsection |
14 | | (a) of Section 1501 of this Act. This Section is exempt from |
15 | | the provisions of Section 250 of this Act. |
16 | | (g-2) For amounts deducted or withheld after December 31, |
17 | | 2024, a taxpayer who makes an election under the Manufacturing |
18 | | Illinois Chips for Real Opportunity (MICRO) Act shall be |
19 | | allowed a credit against payments due under this Section for |
20 | | amounts withheld during the first quarterly reporting period |
21 | | beginning after the certificate is issued equal to the portion |
22 | | of the MICRO Illinois Credit attributable to the incremental |
23 | | income tax attributable to new employees and retained |
24 | | employees as certified by the Department of Commerce and |
25 | | Economic Opportunity pursuant to an agreement with the |
26 | | taxpayer under the Manufacturing Illinois Chips for Real |
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1 | | Opportunity (MICRO) Act for the taxable year. The credit or |
2 | | credits may not reduce the taxpayer's obligation for any |
3 | | payment due under this Section to less than zero. If the amount |
4 | | of the credit or credits exceeds the total payments due under |
5 | | this Section with respect to amounts withheld during the |
6 | | quarterly reporting period, the excess may be carried forward |
7 | | and applied against the taxpayer's liability under this |
8 | | Section in the succeeding quarterly reporting period as |
9 | | allowed to be carried forward under paragraph (4) of Section |
10 | | 211 of this Act. The credit or credits shall be applied to the |
11 | | earliest quarterly reporting period for which there is a tax |
12 | | liability. If there are credits from more than one quarterly |
13 | | reporting period that are available to offset a liability, the |
14 | | earlier credit shall be applied first. Each employer who |
15 | | deducts and withholds or is required to deduct and withhold |
16 | | tax under this Act and who retains income tax withholdings |
17 | | this subsection must make a return with respect to such taxes |
18 | | and retained amounts in the form and manner that the |
19 | | Department, by rule, requires and pay to the Department or to a |
20 | | depositary designated by the Department those withheld taxes |
21 | | not retained by the taxpayer. For purposes of this subsection, |
22 | | the term taxpayer shall include taxpayer and members of the |
23 | | taxpayer's unitary business group as defined under paragraph |
24 | | (27) of subsection (a) of Section 1501 of this Act. This |
25 | | Section is exempt from the provisions of Section 250 of this |
26 | | Act. |
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1 | | (g-3) A taxpayer who makes an election under subsection |
2 | | (k) of Section 201 of this Act for a taxable year shall be |
3 | | allowed a credit against payments due under this Section for |
4 | | amounts withheld during the first calendar year beginning |
5 | | after the last day of the taxable year for which the election |
6 | | is made. The credit against withholding shall be equal to the |
7 | | amount of the credit allowed under subsection (k) of Section |
8 | | 201 of this Act. The credit or credits may not reduce the |
9 | | taxpayer's obligation for any payment due under this Section |
10 | | to less than zero. If the amount of the credit or credits |
11 | | exceeds the total payments due under this Section with respect |
12 | | to amounts withheld during the calendar year, the excess may |
13 | | be carried forward and applied against the taxpayer's |
14 | | liability under this Section in the succeeding calendar years |
15 | | as allowed to be carried forward under paragraph (4) of |
16 | | Section 211 of this Act. The credit or credits shall be applied |
17 | | to the earliest year for which there is a tax liability. If |
18 | | there are credits from more than one taxable year that are |
19 | | available to offset a liability, the earlier credit shall be |
20 | | applied first. Each employer who deducts and withholds or is |
21 | | required to deduct and withhold tax under this Act and who |
22 | | elects to take a credit against taxes imposed under this |
23 | | Section pursuant to subsection (k) of Section 201 of this Act |
24 | | must make a return with respect to such taxes and retained |
25 | | amounts in the form and manner that the Department, by rule, |
26 | | requires and pay to the Department or to a depositary |
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1 | | designated by the Department those withheld taxes not retained |
2 | | by the taxpayer. |
3 | | (h) An employer may claim a credit against payments due |
4 | | under this Section for amounts withheld during the first |
5 | | calendar year ending after the date on which a tax credit |
6 | | certificate was issued under Section 35 of the Small Business |
7 | | Job Creation Tax Credit Act. The credit shall be equal to the |
8 | | amount shown on the certificate, but may not reduce the |
9 | | taxpayer's obligation for any payment due under this Section |
10 | | to less than zero. If the amount of the credit exceeds the |
11 | | total payments due under this Section with respect to amounts |
12 | | withheld during the calendar year, the excess may be carried |
13 | | forward and applied against the taxpayer's liability under |
14 | | this Section in the 5 succeeding calendar years. The credit |
15 | | shall be applied to the earliest year for which there is a tax |
16 | | liability. If there are credits from more than one calendar |
17 | | year that are available to offset a liability, the earlier |
18 | | credit shall be applied first. This Section is exempt from the |
19 | | provisions of Section 250 of this Act. |
20 | | (i) Each employer with 50 or fewer full-time equivalent |
21 | | employees during the reporting period may claim a credit |
22 | | against the payments due under this Section for each qualified |
23 | | employee in an amount equal to the maximum credit allowable. |
24 | | The credit may be taken against payments due for reporting |
25 | | periods that begin on or after January 1, 2020, and end on or |
26 | | before December 31, 2027. An employer may not claim a credit |
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1 | | for an employee who has worked fewer than 90 consecutive days |
2 | | immediately preceding the reporting period; however, such |
3 | | credits may accrue during that 90-day period and be claimed |
4 | | against payments under this Section for future reporting |
5 | | periods after the employee has worked for the employer at |
6 | | least 90 consecutive days. In no event may the credit exceed |
7 | | the employer's liability for the reporting period. Each |
8 | | employer who deducts and withholds or is required to deduct |
9 | | and withhold tax under this Act and who retains income tax |
10 | | withholdings under this subsection must make a return with |
11 | | respect to such taxes and retained amounts in the form and |
12 | | manner that the Department, by rule, requires and pay to the |
13 | | Department or to a depositary designated by the Department |
14 | | those withheld taxes not retained by the employer. |
15 | | For each reporting period, the employer may not claim a |
16 | | credit or credits for more employees than the number of |
17 | | employees making less than the minimum or reduced wage for the |
18 | | current calendar year during the last reporting period of the |
19 | | preceding calendar year. Notwithstanding any other provision |
20 | | of this subsection, an employer shall not be eligible for |
21 | | credits for a reporting period unless the average wage paid by |
22 | | the employer per employee for all employees making less than |
23 | | $55,000 during the reporting period is greater than the |
24 | | average wage paid by the employer per employee for all |
25 | | employees making less than $55,000 during the same reporting |
26 | | period of the prior calendar year. |
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1 | | For purposes of this subsection (i): |
2 | | "Compensation paid in Illinois" has the meaning ascribed |
3 | | to that term under Section 304(a)(2)(B) of this Act. |
4 | | "Employer" and "employee" have the meaning ascribed to |
5 | | those terms in the Minimum Wage Law, except that "employee" |
6 | | also includes employees who work for an employer with fewer |
7 | | than 4 employees. Employers that operate more than one |
8 | | establishment pursuant to a franchise agreement or that |
9 | | constitute members of a unitary business group shall aggregate |
10 | | their employees for purposes of determining eligibility for |
11 | | the credit. |
12 | | "Full-time equivalent employees" means the ratio of the |
13 | | number of paid hours during the reporting period and the |
14 | | number of working hours in that period. |
15 | | "Maximum credit" means the percentage listed below of the |
16 | | difference between the amount of compensation paid in Illinois |
17 | | to employees who are paid not more than the required minimum |
18 | | wage reduced by the amount of compensation paid in Illinois to |
19 | | employees who were paid less than the current required minimum |
20 | | wage during the reporting period prior to each increase in the |
21 | | required minimum wage on January 1. If an employer pays an |
22 | | employee more than the required minimum wage and that employee |
23 | | previously earned less than the required minimum wage, the |
24 | | employer may include the portion that does not exceed the |
25 | | required minimum wage as compensation paid in Illinois to |
26 | | employees who are paid not more than the required minimum |
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1 | | wage. |
2 | | (1) 25% for reporting periods beginning on or after |
3 | | January 1, 2020 and ending on or before December 31, 2020; |
4 | | (2) 21% for reporting periods beginning on or after |
5 | | January 1, 2021 and ending on or before December 31, 2021; |
6 | | (3) 17% for reporting periods beginning on or after |
7 | | January 1, 2022 and ending on or before December 31, 2022; |
8 | | (4) 13% for reporting periods beginning on or after |
9 | | January 1, 2023 and ending on or before December 31, 2023; |
10 | | (5) 9% for reporting periods beginning on or after |
11 | | January 1, 2024 and ending on or before December 31, 2024; |
12 | | (6) 5% for reporting periods beginning on or after |
13 | | January 1, 2025 and ending on or before December 31, 2025. |
14 | | The amount computed under this subsection may continue to |
15 | | be claimed for reporting periods beginning on or after January |
16 | | 1, 2026 and: |
17 | | (A) ending on or before December 31, 2026 for |
18 | | employers with more than 5 employees; or |
19 | | (B) ending on or before December 31, 2027 for |
20 | | employers with no more than 5 employees. |
21 | | "Qualified employee" means an employee who is paid not |
22 | | more than the required minimum wage and has an average wage |
23 | | paid per hour by the employer during the reporting period |
24 | | equal to or greater than his or her average wage paid per hour |
25 | | by the employer during each reporting period for the |
26 | | immediately preceding 12 months. A new qualified employee is |
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1 | | deemed to have earned the required minimum wage in the |
2 | | preceding reporting period. |
3 | | "Reporting period" means the quarter for which a return is |
4 | | required to be filed under subsection (b) of this Section. |
5 | | (j) For reporting periods beginning on or after January 1, |
6 | | 2023, if a private employer grants all of its employees the |
7 | | option of taking a paid leave of absence of at least 30 days |
8 | | for the purpose of serving as an organ donor or bone marrow |
9 | | donor, then the private employer may take a credit against the |
10 | | payments due under this Section in an amount equal to the |
11 | | amount withheld under this Section with respect to wages paid |
12 | | while the employee is on organ donation leave, not to exceed |
13 | | $1,000 in withholdings for each employee who takes organ |
14 | | donation leave. To be eligible for the credit, such a leave of |
15 | | absence must be taken without loss of pay, vacation time,
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16 | | compensatory time, personal days, or sick time for at least |
17 | | the first 30 days of the leave of absence. The private employer |
18 | | shall adopt rules governing organ donation leave, including |
19 | | rules that (i) establish conditions and procedures for |
20 | | requesting and approving leave and (ii) require medical |
21 | | documentation of the proposed organ or bone marrow donation |
22 | | before leave is approved by the private employer. A private |
23 | | employer must provide, in the manner required by the |
24 | | Department, documentation from the employee's medical |
25 | | provider, which the private employer receives from the |
26 | | employee, that verifies the employee's organ donation. The |
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1 | | private employer must also provide, in the manner required by |
2 | | the Department, documentation that shows that a qualifying |
3 | | organ donor leave policy was in place and offered to all |
4 | | qualifying employees at the time the leave was taken. For the |
5 | | private employer to receive the tax credit, the employee |
6 | | taking organ donor leave must allow for the applicable medical |
7 | | records to be disclosed to the Department. If the private |
8 | | employer cannot provide the required documentation to the |
9 | | Department, then the private employer is ineligible for the |
10 | | credit under this Section. A private employer must also |
11 | | provide, in the form required by the Department, any |
12 | | additional documentation or information required by the |
13 | | Department to administer the credit under this Section. The |
14 | | credit under this subsection (j) shall be taken within one |
15 | | year after the date upon which the organ donation leave |
16 | | begins. If the leave taken spans into a second tax year, the |
17 | | employer qualifies for the allowable credit in the later of |
18 | | the 2 years. If the amount of credit exceeds the tax liability |
19 | | for the year, the excess may be carried and applied to the tax |
20 | | liability for the 3 taxable years following the excess credit |
21 | | year. The tax credit shall be applied to the earliest year for |
22 | | which there is a tax liability. If there are credits for more |
23 | | than one year that are available to offset liability, the |
24 | | earlier credit shall be applied first. |
25 | | Nothing in this subsection (j) prohibits a private |
26 | | employer from providing an unpaid leave of absence to its |
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1 | | employees for the purpose of serving as an organ donor or bone |
2 | | marrow donor; however, if the employer's policy provides for |
3 | | fewer than 30 days of paid leave for organ or bone marrow |
4 | | donation, then the employer shall not be eligible for the |
5 | | credit under this Section. |
6 | | As used in this subsection (j): |
7 | | "Organ" means any biological tissue of the human body that |
8 | | may be donated by a living donor, including, but not limited |
9 | | to, the kidney, liver, lung, pancreas, intestine, bone, skin, |
10 | | or any subpart of those organs. |
11 | | "Organ donor" means a person from whose body an organ is |
12 | | taken to be transferred to the body of another person. |
13 | | "Private employer" means a sole proprietorship, |
14 | | corporation, partnership, limited liability company, or other |
15 | | entity with one or more employees. "Private employer" does not |
16 | | include a municipality, county, State agency, or other public |
17 | | employer. |
18 | | This subsection (j) is exempt from the provisions of |
19 | | Section 250 of this Act. |
20 | | (Source: P.A. 101-1, eff. 2-19-19; 102-669, eff. 11-16-21; |
21 | | 102-700, Article 30, Section 30-5, eff. 4-19-22; 102-700, |
22 | | Article 110, Section 110-905, eff. 4-19-22; revised 6-1-22.)
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23 | | Section 99. Effective date. This Act takes effect upon |
24 | | becoming law.
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