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1 | AN ACT concerning revenue. | |||||||||||||||||||
2 | Be it enacted by the People of the State of Illinois, | |||||||||||||||||||
3 | represented in the General Assembly: | |||||||||||||||||||
4 | Section 5. The Illinois Income Tax Act is amended by | |||||||||||||||||||
5 | changing Section 203 as follows: | |||||||||||||||||||
6 | (35 ILCS 5/203) | |||||||||||||||||||
7 | Sec. 203. Base income defined. | |||||||||||||||||||
8 | (a) Individuals. | |||||||||||||||||||
9 | (1) In general. In the case of an individual, base | |||||||||||||||||||
10 | income means an amount equal to the taxpayer's adjusted | |||||||||||||||||||
11 | gross income for the taxable year as modified by paragraph | |||||||||||||||||||
12 | (2). | |||||||||||||||||||
13 | (2) Modifications. The adjusted gross income referred | |||||||||||||||||||
14 | to in paragraph (1) shall be modified by adding thereto | |||||||||||||||||||
15 | the sum of the following amounts: | |||||||||||||||||||
16 | (A) An amount equal to all amounts paid or accrued | |||||||||||||||||||
17 | to the taxpayer as interest or dividends during the | |||||||||||||||||||
18 | taxable year to the extent excluded from gross income | |||||||||||||||||||
19 | in the computation of adjusted gross income, except | |||||||||||||||||||
20 | stock dividends of qualified public utilities | |||||||||||||||||||
21 | described in Section 305(e) of the Internal Revenue | |||||||||||||||||||
22 | Code; | |||||||||||||||||||
23 | (B) An amount equal to the amount of tax imposed by |
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1 | this Act to the extent deducted from gross income in | ||||||
2 | the computation of adjusted gross income for the | ||||||
3 | taxable year; | ||||||
4 | (C) An amount equal to the amount received during | ||||||
5 | the taxable year as a recovery or refund of real | ||||||
6 | property taxes paid with respect to the taxpayer's | ||||||
7 | principal residence under the Revenue Act of 1939 and | ||||||
8 | for which a deduction was previously taken under | ||||||
9 | subparagraph (L) of this paragraph (2) prior to July | ||||||
10 | 1, 1991, the retrospective application date of Article | ||||||
11 | 4 of Public Act 87-17. In the case of multi-unit or | ||||||
12 | multi-use structures and farm dwellings, the taxes on | ||||||
13 | the taxpayer's principal residence shall be that | ||||||
14 | portion of the total taxes for the entire property | ||||||
15 | which is attributable to such principal residence; | ||||||
16 | (D) An amount equal to the amount of the capital | ||||||
17 | gain deduction allowable under the Internal Revenue | ||||||
18 | Code, to the extent deducted from gross income in the | ||||||
19 | computation of adjusted gross income; | ||||||
20 | (D-5) An amount, to the extent not included in | ||||||
21 | adjusted gross income, equal to the amount of money | ||||||
22 | withdrawn by the taxpayer in the taxable year from a | ||||||
23 | medical care savings account and the interest earned | ||||||
24 | on the account in the taxable year of a withdrawal | ||||||
25 | pursuant to subsection (b) of Section 20 of the | ||||||
26 | Medical Care Savings Account Act or subsection (b) of |
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1 | Section 20 of the Medical Care Savings Account Act of | ||||||
2 | 2000; | ||||||
3 | (D-10) For taxable years ending after December 31, | ||||||
4 | 1997, an amount equal to any eligible remediation | ||||||
5 | costs that the individual deducted in computing | ||||||
6 | adjusted gross income and for which the individual | ||||||
7 | claims a credit under subsection (l) of Section 201; | ||||||
8 | (D-15) For taxable years 2001 and thereafter, an | ||||||
9 | amount equal to the bonus depreciation deduction taken | ||||||
10 | on the taxpayer's federal income tax return for the | ||||||
11 | taxable year under subsection (k) of Section 168 of | ||||||
12 | the Internal Revenue Code; | ||||||
13 | (D-16) If the taxpayer sells, transfers, abandons, | ||||||
14 | or otherwise disposes of property for which the | ||||||
15 | taxpayer was required in any taxable year to make an | ||||||
16 | addition modification under subparagraph (D-15), then | ||||||
17 | an amount equal to the aggregate amount of the | ||||||
18 | deductions taken in all taxable years under | ||||||
19 | subparagraph (Z) with respect to that property. | ||||||
20 | If the taxpayer continues to own property through | ||||||
21 | the last day of the last tax year for which a | ||||||
22 | subtraction is allowed with respect to that property | ||||||
23 | under subparagraph (Z) and for which the taxpayer was | ||||||
24 | allowed in any taxable year to make a subtraction | ||||||
25 | modification under subparagraph (Z), then an amount | ||||||
26 | equal to that subtraction modification. |
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1 | The taxpayer is required to make the addition | ||||||
2 | modification under this subparagraph only once with | ||||||
3 | respect to any one piece of property; | ||||||
4 | (D-17) An amount equal to the amount otherwise | ||||||
5 | allowed as a deduction in computing base income for | ||||||
6 | interest paid, accrued, or incurred, directly or | ||||||
7 | indirectly, (i) for taxable years ending on or after | ||||||
8 | December 31, 2004, to a foreign person who would be a | ||||||
9 | member of the same unitary business group but for the | ||||||
10 | fact that foreign person's business activity outside | ||||||
11 | the United States is 80% or more of the foreign | ||||||
12 | person's total business activity and (ii) for taxable | ||||||
13 | years ending on or after December 31, 2008, to a person | ||||||
14 | who would be a member of the same unitary business | ||||||
15 | group but for the fact that the person is prohibited | ||||||
16 | under Section 1501(a)(27) from being included in the | ||||||
17 | unitary business group because he or she is ordinarily | ||||||
18 | required to apportion business income under different | ||||||
19 | subsections of Section 304. The addition modification | ||||||
20 | required by this subparagraph shall be reduced to the | ||||||
21 | extent that dividends were included in base income of | ||||||
22 | the unitary group for the same taxable year and | ||||||
23 | received by the taxpayer or by a member of the | ||||||
24 | taxpayer's unitary business group (including amounts | ||||||
25 | included in gross income under Sections 951 through | ||||||
26 | 964 of the Internal Revenue Code and amounts included |
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1 | in gross income under Section 78 of the Internal | ||||||
2 | Revenue Code) with respect to the stock of the same | ||||||
3 | person to whom the interest was paid, accrued, or | ||||||
4 | incurred. | ||||||
5 | This paragraph shall not apply to the following: | ||||||
6 | (i) an item of interest paid, accrued, or | ||||||
7 | incurred, directly or indirectly, to a person who | ||||||
8 | is subject in a foreign country or state, other | ||||||
9 | than a state which requires mandatory unitary | ||||||
10 | reporting, to a tax on or measured by net income | ||||||
11 | with respect to such interest; or | ||||||
12 | (ii) an item of interest paid, accrued, or | ||||||
13 | incurred, directly or indirectly, to a person if | ||||||
14 | the taxpayer can establish, based on a | ||||||
15 | preponderance of the evidence, both of the | ||||||
16 | following: | ||||||
17 | (a) the person, during the same taxable | ||||||
18 | year, paid, accrued, or incurred, the interest | ||||||
19 | to a person that is not a related member, and | ||||||
20 | (b) the transaction giving rise to the | ||||||
21 | interest expense between the taxpayer and the | ||||||
22 | person did not have as a principal purpose the | ||||||
23 | avoidance of Illinois income tax, and is paid | ||||||
24 | pursuant to a contract or agreement that | ||||||
25 | reflects an arm's-length interest rate and | ||||||
26 | terms; or |
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1 | (iii) the taxpayer can establish, based on | ||||||
2 | clear and convincing evidence, that the interest | ||||||
3 | paid, accrued, or incurred relates to a contract | ||||||
4 | or agreement entered into at arm's-length rates | ||||||
5 | and terms and the principal purpose for the | ||||||
6 | payment is not federal or Illinois tax avoidance; | ||||||
7 | or | ||||||
8 | (iv) an item of interest paid, accrued, or | ||||||
9 | incurred, directly or indirectly, to a person if | ||||||
10 | the taxpayer establishes by clear and convincing | ||||||
11 | evidence that the adjustments are unreasonable; or | ||||||
12 | if the taxpayer and the Director agree in writing | ||||||
13 | to the application or use of an alternative method | ||||||
14 | of apportionment under Section 304(f). | ||||||
15 | Nothing in this subsection shall preclude the | ||||||
16 | Director from making any other adjustment | ||||||
17 | otherwise allowed under Section 404 of this Act | ||||||
18 | for any tax year beginning after the effective | ||||||
19 | date of this amendment provided such adjustment is | ||||||
20 | made pursuant to regulation adopted by the | ||||||
21 | Department and such regulations provide methods | ||||||
22 | and standards by which the Department will utilize | ||||||
23 | its authority under Section 404 of this Act; | ||||||
24 | (D-18) An amount equal to the amount of intangible | ||||||
25 | expenses and costs otherwise allowed as a deduction in | ||||||
26 | computing base income, and that were paid, accrued, or |
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1 | incurred, directly or indirectly, (i) for taxable | ||||||
2 | years ending on or after December 31, 2004, to a | ||||||
3 | foreign person who would be a member of the same | ||||||
4 | unitary business group but for the fact that the | ||||||
5 | foreign person's business activity outside the United | ||||||
6 | States is 80% or more of that person's total business | ||||||
7 | activity and (ii) for taxable years ending on or after | ||||||
8 | December 31, 2008, to a person who would be a member of | ||||||
9 | the same unitary business group but for the fact that | ||||||
10 | the person is prohibited under Section 1501(a)(27) | ||||||
11 | from being included in the unitary business group | ||||||
12 | because he or she is ordinarily required to apportion | ||||||
13 | business income under different subsections of Section | ||||||
14 | 304. The addition modification required by this | ||||||
15 | subparagraph shall be reduced to the extent that | ||||||
16 | dividends were included in base income of the unitary | ||||||
17 | group for the same taxable year and received by the | ||||||
18 | taxpayer or by a member of the taxpayer's unitary | ||||||
19 | business group (including amounts included in gross | ||||||
20 | income under Sections 951 through 964 of the Internal | ||||||
21 | Revenue Code and amounts included in gross income | ||||||
22 | under Section 78 of the Internal Revenue Code) with | ||||||
23 | respect to the stock of the same person to whom the | ||||||
24 | intangible expenses and costs were directly or | ||||||
25 | indirectly paid, incurred, or accrued. The preceding | ||||||
26 | sentence does not apply to the extent that the same |
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1 | dividends caused a reduction to the addition | ||||||
2 | modification required under Section 203(a)(2)(D-17) of | ||||||
3 | this Act. As used in this subparagraph, the term | ||||||
4 | "intangible expenses and costs" includes (1) expenses, | ||||||
5 | losses, and costs for, or related to, the direct or | ||||||
6 | indirect acquisition, use, maintenance or management, | ||||||
7 | ownership, sale, exchange, or any other disposition of | ||||||
8 | intangible property; (2) losses incurred, directly or | ||||||
9 | indirectly, from factoring transactions or discounting | ||||||
10 | transactions; (3) royalty, patent, technical, and | ||||||
11 | copyright fees; (4) licensing fees; and (5) other | ||||||
12 | similar expenses and costs. For purposes of this | ||||||
13 | subparagraph, "intangible property" includes patents, | ||||||
14 | patent applications, trade names, trademarks, service | ||||||
15 | marks, copyrights, mask works, trade secrets, and | ||||||
16 | similar types of intangible assets. | ||||||
17 | This paragraph shall not apply to the following: | ||||||
18 | (i) any item of intangible expenses or costs | ||||||
19 | paid, accrued, or incurred, directly or | ||||||
20 | indirectly, from a transaction with a person who | ||||||
21 | is subject in a foreign country or state, other | ||||||
22 | than a state which requires mandatory unitary | ||||||
23 | reporting, to a tax on or measured by net income | ||||||
24 | with respect to such item; or | ||||||
25 | (ii) any item of intangible expense or cost | ||||||
26 | paid, accrued, or incurred, directly or |
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1 | indirectly, if the taxpayer can establish, based | ||||||
2 | on a preponderance of the evidence, both of the | ||||||
3 | following: | ||||||
4 | (a) the person during the same taxable | ||||||
5 | year paid, accrued, or incurred, the | ||||||
6 | intangible expense or cost to a person that is | ||||||
7 | not a related member, and | ||||||
8 | (b) the transaction giving rise to the | ||||||
9 | intangible expense or cost between the | ||||||
10 | taxpayer and the person did not have as a | ||||||
11 | principal purpose the avoidance of Illinois | ||||||
12 | income tax, and is paid pursuant to a contract | ||||||
13 | or agreement that reflects arm's-length terms; | ||||||
14 | or | ||||||
15 | (iii) any item of intangible expense or cost | ||||||
16 | paid, accrued, or incurred, directly or | ||||||
17 | indirectly, from a transaction with a person if | ||||||
18 | the taxpayer establishes by clear and convincing | ||||||
19 | evidence, that the adjustments are unreasonable; | ||||||
20 | or if the taxpayer and the Director agree in | ||||||
21 | writing to the application or use of an | ||||||
22 | alternative method of apportionment under Section | ||||||
23 | 304(f); | ||||||
24 | Nothing in this subsection shall preclude the | ||||||
25 | Director from making any other adjustment | ||||||
26 | otherwise allowed under Section 404 of this Act |
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1 | for any tax year beginning after the effective | ||||||
2 | date of this amendment provided such adjustment is | ||||||
3 | made pursuant to regulation adopted by the | ||||||
4 | Department and such regulations provide methods | ||||||
5 | and standards by which the Department will utilize | ||||||
6 | its authority under Section 404 of this Act; | ||||||
7 | (D-19) For taxable years ending on or after | ||||||
8 | December 31, 2008, an amount equal to the amount of | ||||||
9 | insurance premium expenses and costs otherwise allowed | ||||||
10 | as a deduction in computing base income, and that were | ||||||
11 | paid, accrued, or incurred, directly or indirectly, to | ||||||
12 | a person who would be a member of the same unitary | ||||||
13 | business group but for the fact that the person is | ||||||
14 | prohibited under Section 1501(a)(27) from being | ||||||
15 | included in the unitary business group because he or | ||||||
16 | she is ordinarily required to apportion business | ||||||
17 | income under different subsections of Section 304. The | ||||||
18 | addition modification required by this subparagraph | ||||||
19 | shall be reduced to the extent that dividends were | ||||||
20 | included in base income of the unitary group for the | ||||||
21 | same taxable year and received by the taxpayer or by a | ||||||
22 | member of the taxpayer's unitary business group | ||||||
23 | (including amounts included in gross income under | ||||||
24 | Sections 951 through 964 of the Internal Revenue Code | ||||||
25 | and amounts included in gross income under Section 78 | ||||||
26 | of the Internal Revenue Code) with respect to the |
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1 | stock of the same person to whom the premiums and costs | ||||||
2 | were directly or indirectly paid, incurred, or | ||||||
3 | accrued. The preceding sentence does not apply to the | ||||||
4 | extent that the same dividends caused a reduction to | ||||||
5 | the addition modification required under Section | ||||||
6 | 203(a)(2)(D-17) or Section 203(a)(2)(D-18) of this | ||||||
7 | Act; | ||||||
8 | (D-20) For taxable years beginning on or after | ||||||
9 | January 1, 2002 and ending on or before December 31, | ||||||
10 | 2006, in the case of a distribution from a qualified | ||||||
11 | tuition program under Section 529 of the Internal | ||||||
12 | Revenue Code, other than (i) a distribution from a | ||||||
13 | College Savings Pool created under Section 16.5 of the | ||||||
14 | State Treasurer Act or (ii) a distribution from the | ||||||
15 | Illinois Prepaid Tuition Trust Fund, an amount equal | ||||||
16 | to the amount excluded from gross income under Section | ||||||
17 | 529(c)(3)(B). For taxable years beginning on or after | ||||||
18 | January 1, 2007, in the case of a distribution from a | ||||||
19 | qualified tuition program under Section 529 of the | ||||||
20 | Internal Revenue Code, other than (i) a distribution | ||||||
21 | from a College Savings Pool created under Section 16.5 | ||||||
22 | of the State Treasurer Act, (ii) a distribution from | ||||||
23 | the Illinois Prepaid Tuition Trust Fund, or (iii) a | ||||||
24 | distribution from a qualified tuition program under | ||||||
25 | Section 529 of the Internal Revenue Code that (I) | ||||||
26 | adopts and determines that its offering materials |
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1 | comply with the College Savings Plans Network's | ||||||
2 | disclosure principles and (II) has made reasonable | ||||||
3 | efforts to inform in-state residents of the existence | ||||||
4 | of in-state qualified tuition programs by informing | ||||||
5 | Illinois residents directly and, where applicable, to | ||||||
6 | inform financial intermediaries distributing the | ||||||
7 | program to inform in-state residents of the existence | ||||||
8 | of in-state qualified tuition programs at least | ||||||
9 | annually, an amount equal to the amount excluded from | ||||||
10 | gross income under Section 529(c)(3)(B). | ||||||
11 | For the purposes of this subparagraph (D-20), a | ||||||
12 | qualified tuition program has made reasonable efforts | ||||||
13 | if it makes disclosures (which may use the term | ||||||
14 | "in-state program" or "in-state plan" and need not | ||||||
15 | specifically refer to Illinois or its qualified | ||||||
16 | programs by name) (i) directly to prospective | ||||||
17 | participants in its offering materials or makes a | ||||||
18 | public disclosure, such as a website posting; and (ii) | ||||||
19 | where applicable, to intermediaries selling the | ||||||
20 | out-of-state program in the same manner that the | ||||||
21 | out-of-state program distributes its offering | ||||||
22 | materials; | ||||||
23 | (D-20.5) For taxable years beginning on or after | ||||||
24 | January 1, 2018, in the case of a distribution from a | ||||||
25 | qualified ABLE program under Section 529A of the | ||||||
26 | Internal Revenue Code, other than a distribution from |
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1 | a qualified ABLE program created under Section 16.6 of | ||||||
2 | the State Treasurer Act, an amount equal to the amount | ||||||
3 | excluded from gross income under Section 529A(c)(1)(B) | ||||||
4 | of the Internal Revenue Code; | ||||||
5 | (D-21) For taxable years beginning on or after | ||||||
6 | January 1, 2007, in the case of transfer of moneys from | ||||||
7 | a qualified tuition program under Section 529 of the | ||||||
8 | Internal Revenue Code that is administered by the | ||||||
9 | State to an out-of-state program, an amount equal to | ||||||
10 | the amount of moneys previously deducted from base | ||||||
11 | income under subsection (a)(2)(Y) of this Section; | ||||||
12 | (D-21.5) For taxable years beginning on or after | ||||||
13 | January 1, 2018, in the case of the transfer of moneys | ||||||
14 | from a qualified tuition program under Section 529 or | ||||||
15 | a qualified ABLE program under Section 529A of the | ||||||
16 | Internal Revenue Code that is administered by this | ||||||
17 | State to an ABLE account established under an | ||||||
18 | out-of-state ABLE account program, an amount equal to | ||||||
19 | the contribution component of the transferred amount | ||||||
20 | that was previously deducted from base income under | ||||||
21 | subsection (a)(2)(Y) or subsection (a)(2)(HH) of this | ||||||
22 | Section; | ||||||
23 | (D-22) For taxable years beginning on or after | ||||||
24 | January 1, 2009, and prior to January 1, 2018, in the | ||||||
25 | case of a nonqualified withdrawal or refund of moneys | ||||||
26 | from a qualified tuition program under Section 529 of |
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1 | the Internal Revenue Code administered by the State | ||||||
2 | that is not used for qualified expenses at an eligible | ||||||
3 | education institution, an amount equal to the | ||||||
4 | contribution component of the nonqualified withdrawal | ||||||
5 | or refund that was previously deducted from base | ||||||
6 | income under subsection (a)(2)(y) of this Section, | ||||||
7 | provided that the withdrawal or refund did not result | ||||||
8 | from the beneficiary's death or disability. For | ||||||
9 | taxable years beginning on or after January 1, 2018: | ||||||
10 | (1) in the case of a nonqualified withdrawal or | ||||||
11 | refund, as defined under Section 16.5 of the State | ||||||
12 | Treasurer Act, of moneys from a qualified tuition | ||||||
13 | program under Section 529 of the Internal Revenue Code | ||||||
14 | administered by the State, an amount equal to the | ||||||
15 | contribution component of the nonqualified withdrawal | ||||||
16 | or refund that was previously deducted from base | ||||||
17 | income under subsection (a)(2)(Y) of this Section, and | ||||||
18 | (2) in the case of a nonqualified withdrawal or refund | ||||||
19 | from a qualified ABLE program under Section 529A of | ||||||
20 | the Internal Revenue Code administered by the State | ||||||
21 | that is not used for qualified disability expenses, an | ||||||
22 | amount equal to the contribution component of the | ||||||
23 | nonqualified withdrawal or refund that was previously | ||||||
24 | deducted from base income under subsection (a)(2)(HH) | ||||||
25 | of this Section; | ||||||
26 | (D-23) An amount equal to the credit allowable to |
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1 | the taxpayer under Section 218(a) of this Act, | ||||||
2 | determined without regard to Section 218(c) of this | ||||||
3 | Act; | ||||||
4 | (D-24) For taxable years ending on or after | ||||||
5 | December 31, 2017, an amount equal to the deduction | ||||||
6 | allowed under Section 199 of the Internal Revenue Code | ||||||
7 | for the taxable year; | ||||||
8 | (D-25) In the case of a resident, an amount equal | ||||||
9 | to the amount of tax for which a credit is allowed | ||||||
10 | pursuant to Section 201(p)(7) of this Act; | ||||||
11 | and by deducting from the total so obtained the sum of the | ||||||
12 | following amounts: | ||||||
13 | (E) For taxable years ending before December 31, | ||||||
14 | 2001, any amount included in such total in respect of | ||||||
15 | any compensation (including but not limited to any | ||||||
16 | compensation paid or accrued to a serviceman while a | ||||||
17 | prisoner of war or missing in action) paid to a | ||||||
18 | resident by reason of being on active duty in the Armed | ||||||
19 | Forces of the United States and in respect of any | ||||||
20 | compensation paid or accrued to a resident who as a | ||||||
21 | governmental employee was a prisoner of war or missing | ||||||
22 | in action, and in respect of any compensation paid to a | ||||||
23 | resident in 1971 or thereafter for annual training | ||||||
24 | performed pursuant to Sections 502 and 503, Title 32, | ||||||
25 | United States Code as a member of the Illinois | ||||||
26 | National Guard or, beginning with taxable years ending |
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1 | on or after December 31, 2007, the National Guard of | ||||||
2 | any other state. For taxable years ending on or after | ||||||
3 | December 31, 2001, any amount included in such total | ||||||
4 | in respect of any compensation (including but not | ||||||
5 | limited to any compensation paid or accrued to a | ||||||
6 | serviceman while a prisoner of war or missing in | ||||||
7 | action) paid to a resident by reason of being a member | ||||||
8 | of any component of the Armed Forces of the United | ||||||
9 | States and in respect of any compensation paid or | ||||||
10 | accrued to a resident who as a governmental employee | ||||||
11 | was a prisoner of war or missing in action, and in | ||||||
12 | respect of any compensation paid to a resident in 2001 | ||||||
13 | or thereafter by reason of being a member of the | ||||||
14 | Illinois National Guard or, beginning with taxable | ||||||
15 | years ending on or after December 31, 2007, the | ||||||
16 | National Guard of any other state. The provisions of | ||||||
17 | this subparagraph (E) are exempt from the provisions | ||||||
18 | of Section 250; | ||||||
19 | (F) An amount equal to all amounts included in | ||||||
20 | such total pursuant to the provisions of Sections | ||||||
21 | 402(a), 402(c), 403(a), 403(b), 406(a), 407(a), and | ||||||
22 | 408 of the Internal Revenue Code, or included in such | ||||||
23 | total as distributions under the provisions of any | ||||||
24 | retirement or disability plan for employees of any | ||||||
25 | governmental agency or unit, or retirement payments to | ||||||
26 | retired partners, which payments are excluded in |
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1 | computing net earnings from self employment by Section | ||||||
2 | 1402 of the Internal Revenue Code and regulations | ||||||
3 | adopted pursuant thereto; | ||||||
4 | (G) The valuation limitation amount; | ||||||
5 | (H) An amount equal to the amount of any tax | ||||||
6 | imposed by this Act which was refunded to the taxpayer | ||||||
7 | and included in such total for the taxable year; | ||||||
8 | (I) An amount equal to all amounts included in | ||||||
9 | such total pursuant to the provisions of Section 111 | ||||||
10 | of the Internal Revenue Code as a recovery of items | ||||||
11 | previously deducted from adjusted gross income in the | ||||||
12 | computation of taxable income; | ||||||
13 | (J) An amount equal to those dividends included in | ||||||
14 | such total which were paid by a corporation which | ||||||
15 | conducts business operations in a River Edge | ||||||
16 | Redevelopment Zone or zones created under the River | ||||||
17 | Edge Redevelopment Zone Act, and conducts | ||||||
18 | substantially all of its operations in a River Edge | ||||||
19 | Redevelopment Zone or zones. This subparagraph (J) is | ||||||
20 | exempt from the provisions of Section 250; | ||||||
21 | (K) An amount equal to those dividends included in | ||||||
22 | such total that were paid by a corporation that | ||||||
23 | conducts business operations in a federally designated | ||||||
24 | Foreign Trade Zone or Sub-Zone and that is designated | ||||||
25 | a High Impact Business located in Illinois; provided | ||||||
26 | that dividends eligible for the deduction provided in |
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1 | subparagraph (J) of paragraph (2) of this subsection | ||||||
2 | shall not be eligible for the deduction provided under | ||||||
3 | this subparagraph (K); | ||||||
4 | (L) For taxable years ending after December 31, | ||||||
5 | 1983, an amount equal to all social security benefits | ||||||
6 | and railroad retirement benefits included in such | ||||||
7 | total pursuant to Sections 72(r) and 86 of the | ||||||
8 | Internal Revenue Code; | ||||||
9 | (M) With the exception of any amounts subtracted | ||||||
10 | under subparagraph (N), an amount equal to the sum of | ||||||
11 | all amounts disallowed as deductions by (i) Sections | ||||||
12 | 171(a)(2) and 265(a)(2) of the Internal Revenue Code, | ||||||
13 | and all amounts of expenses allocable to interest and | ||||||
14 | disallowed as deductions by Section 265(a)(1) of the | ||||||
15 | Internal Revenue Code; and (ii) for taxable years | ||||||
16 | ending on or after August 13, 1999, Sections | ||||||
17 | 171(a)(2), 265, 280C, and 832(b)(5)(B)(i) of the | ||||||
18 | Internal Revenue Code, plus, for taxable years ending | ||||||
19 | on or after December 31, 2011, Section 45G(e)(3) of | ||||||
20 | the Internal Revenue Code and, for taxable years | ||||||
21 | ending on or after December 31, 2008, any amount | ||||||
22 | included in gross income under Section 87 of the | ||||||
23 | Internal Revenue Code; the provisions of this | ||||||
24 | subparagraph are exempt from the provisions of Section | ||||||
25 | 250; | ||||||
26 | (N) An amount equal to all amounts included in |
| |||||||
| |||||||
1 | such total which are exempt from taxation by this | ||||||
2 | State either by reason of its statutes or Constitution | ||||||
3 | or by reason of the Constitution, treaties or statutes | ||||||
4 | of the United States; provided that, in the case of any | ||||||
5 | statute of this State that exempts income derived from | ||||||
6 | bonds or other obligations from the tax imposed under | ||||||
7 | this Act, the amount exempted shall be the interest | ||||||
8 | net of bond premium amortization; | ||||||
9 | (O) An amount equal to any contribution made to a | ||||||
10 | job training project established pursuant to the Tax | ||||||
11 | Increment Allocation Redevelopment Act; | ||||||
12 | (P) An amount equal to the amount of the deduction | ||||||
13 | used to compute the federal income tax credit for | ||||||
14 | restoration of substantial amounts held under claim of | ||||||
15 | right for the taxable year pursuant to Section 1341 of | ||||||
16 | the Internal Revenue Code or of any itemized deduction | ||||||
17 | taken from adjusted gross income in the computation of | ||||||
18 | taxable income for restoration of substantial amounts | ||||||
19 | held under claim of right for the taxable year; | ||||||
20 | (Q) An amount equal to any amounts included in | ||||||
21 | such total, received by the taxpayer as an | ||||||
22 | acceleration in the payment of life, endowment or | ||||||
23 | annuity benefits in advance of the time they would | ||||||
24 | otherwise be payable as an indemnity for a terminal | ||||||
25 | illness; | ||||||
26 | (R) An amount equal to the amount of any federal or |
| |||||||
| |||||||
1 | State bonus paid to veterans of the Persian Gulf War; | ||||||
2 | (S) An amount, to the extent included in adjusted | ||||||
3 | gross income, equal to the amount of a contribution | ||||||
4 | made in the taxable year on behalf of the taxpayer to a | ||||||
5 | medical care savings account established under the | ||||||
6 | Medical Care Savings Account Act or the Medical Care | ||||||
7 | Savings Account Act of 2000 to the extent the | ||||||
8 | contribution is accepted by the account administrator | ||||||
9 | as provided in that Act; | ||||||
10 | (T) An amount, to the extent included in adjusted | ||||||
11 | gross income, equal to the amount of interest earned | ||||||
12 | in the taxable year on a medical care savings account | ||||||
13 | established under the Medical Care Savings Account Act | ||||||
14 | or the Medical Care Savings Account Act of 2000 on | ||||||
15 | behalf of the taxpayer, other than interest added | ||||||
16 | pursuant to item (D-5) of this paragraph (2); | ||||||
17 | (U) For one taxable year beginning on or after | ||||||
18 | January 1, 1994, an amount equal to the total amount of | ||||||
19 | tax imposed and paid under subsections (a) and (b) of | ||||||
20 | Section 201 of this Act on grant amounts received by | ||||||
21 | the taxpayer under the Nursing Home Grant Assistance | ||||||
22 | Act during the taxpayer's taxable years 1992 and 1993; | ||||||
23 | (V) Beginning with tax years ending on or after | ||||||
24 | December 31, 1995 and ending with tax years ending on | ||||||
25 | or before December 31, 2004, an amount equal to the | ||||||
26 | amount paid by a taxpayer who is a self-employed |
| |||||||
| |||||||
1 | taxpayer, a partner of a partnership, or a shareholder | ||||||
2 | in a Subchapter S corporation for health insurance or | ||||||
3 | long-term care insurance for that taxpayer or that | ||||||
4 | taxpayer's spouse or dependents, to the extent that | ||||||
5 | the amount paid for that health insurance or long-term | ||||||
6 | care insurance may be deducted under Section 213 of | ||||||
7 | the Internal Revenue Code, has not been deducted on | ||||||
8 | the federal income tax return of the taxpayer, and | ||||||
9 | does not exceed the taxable income attributable to | ||||||
10 | that taxpayer's income, self-employment income, or | ||||||
11 | Subchapter S corporation income; except that no | ||||||
12 | deduction shall be allowed under this item (V) if the | ||||||
13 | taxpayer is eligible to participate in any health | ||||||
14 | insurance or long-term care insurance plan of an | ||||||
15 | employer of the taxpayer or the taxpayer's spouse. The | ||||||
16 | amount of the health insurance and long-term care | ||||||
17 | insurance subtracted under this item (V) shall be | ||||||
18 | determined by multiplying total health insurance and | ||||||
19 | long-term care insurance premiums paid by the taxpayer | ||||||
20 | times a number that represents the fractional | ||||||
21 | percentage of eligible medical expenses under Section | ||||||
22 | 213 of the Internal Revenue Code of 1986 not actually | ||||||
23 | deducted on the taxpayer's federal income tax return; | ||||||
24 | (W) For taxable years beginning on or after | ||||||
25 | January 1, 1998, all amounts included in the | ||||||
26 | taxpayer's federal gross income in the taxable year |
| |||||||
| |||||||
1 | from amounts converted from a regular IRA to a Roth | ||||||
2 | IRA. This paragraph is exempt from the provisions of | ||||||
3 | Section 250; | ||||||
4 | (X) For taxable year 1999 and thereafter, an | ||||||
5 | amount equal to the amount of any (i) distributions, | ||||||
6 | to the extent includible in gross income for federal | ||||||
7 | income tax purposes, made to the taxpayer because of | ||||||
8 | his or her status as a victim of persecution for racial | ||||||
9 | or religious reasons by Nazi Germany or any other Axis | ||||||
10 | regime or as an heir of the victim and (ii) items of | ||||||
11 | income, to the extent includible in gross income for | ||||||
12 | federal income tax purposes, attributable to, derived | ||||||
13 | from or in any way related to assets stolen from, | ||||||
14 | hidden from, or otherwise lost to a victim of | ||||||
15 | persecution for racial or religious reasons by Nazi | ||||||
16 | Germany or any other Axis regime immediately prior to, | ||||||
17 | during, and immediately after World War II, including, | ||||||
18 | but not limited to, interest on the proceeds | ||||||
19 | receivable as insurance under policies issued to a | ||||||
20 | victim of persecution for racial or religious reasons | ||||||
21 | by Nazi Germany or any other Axis regime by European | ||||||
22 | insurance companies immediately prior to and during | ||||||
23 | World War II; provided, however, this subtraction from | ||||||
24 | federal adjusted gross income does not apply to assets | ||||||
25 | acquired with such assets or with the proceeds from | ||||||
26 | the sale of such assets; provided, further, this |
| |||||||
| |||||||
1 | paragraph shall only apply to a taxpayer who was the | ||||||
2 | first recipient of such assets after their recovery | ||||||
3 | and who is a victim of persecution for racial or | ||||||
4 | religious reasons by Nazi Germany or any other Axis | ||||||
5 | regime or as an heir of the victim. The amount of and | ||||||
6 | the eligibility for any public assistance, benefit, or | ||||||
7 | similar entitlement is not affected by the inclusion | ||||||
8 | of items (i) and (ii) of this paragraph in gross income | ||||||
9 | for federal income tax purposes. This paragraph is | ||||||
10 | exempt from the provisions of Section 250; | ||||||
11 | (Y) For taxable years beginning on or after | ||||||
12 | January 1, 2002 and ending on or before December 31, | ||||||
13 | 2004, moneys contributed in the taxable year to a | ||||||
14 | College Savings Pool account under Section 16.5 of the | ||||||
15 | State Treasurer Act, except that amounts excluded from | ||||||
16 | gross income under Section 529(c)(3)(C)(i) of the | ||||||
17 | Internal Revenue Code shall not be considered moneys | ||||||
18 | contributed under this subparagraph (Y). For taxable | ||||||
19 | years beginning on or after January 1, 2005, a maximum | ||||||
20 | of $10,000 contributed in the taxable year to (i) a | ||||||
21 | College Savings Pool account under Section 16.5 of the | ||||||
22 | State Treasurer Act or (ii) the Illinois Prepaid | ||||||
23 | Tuition Trust Fund, except that amounts excluded from | ||||||
24 | gross income under Section 529(c)(3)(C)(i) of the | ||||||
25 | Internal Revenue Code shall not be considered moneys | ||||||
26 | contributed under this subparagraph (Y). For purposes |
| |||||||
| |||||||
1 | of this subparagraph, contributions made by an | ||||||
2 | employer on behalf of an employee, or matching | ||||||
3 | contributions made by an employee, shall be treated as | ||||||
4 | made by the employee. This subparagraph (Y) is exempt | ||||||
5 | from the provisions of Section 250; | ||||||
6 | (Z) For taxable years 2001 and thereafter, for the | ||||||
7 | taxable year in which the bonus depreciation deduction | ||||||
8 | is taken on the taxpayer's federal income tax return | ||||||
9 | under subsection (k) of Section 168 of the Internal | ||||||
10 | Revenue Code and for each applicable taxable year | ||||||
11 | thereafter, an amount equal to "x", where: | ||||||
12 | (1) "y" equals the amount of the depreciation | ||||||
13 | deduction taken for the taxable year on the | ||||||
14 | taxpayer's federal income tax return on property | ||||||
15 | for which the bonus depreciation deduction was | ||||||
16 | taken in any year under subsection (k) of Section | ||||||
17 | 168 of the Internal Revenue Code, but not | ||||||
18 | including the bonus depreciation deduction; | ||||||
19 | (2) for taxable years ending on or before | ||||||
20 | December 31, 2005, "x" equals "y" multiplied by 30 | ||||||
21 | and then divided by 70 (or "y" multiplied by | ||||||
22 | 0.429); and | ||||||
23 | (3) for taxable years ending after December | ||||||
24 | 31, 2005: | ||||||
25 | (i) for property on which a bonus | ||||||
26 | depreciation deduction of 30% of the adjusted |
| |||||||
| |||||||
1 | basis was taken, "x" equals "y" multiplied by | ||||||
2 | 30 and then divided by 70 (or "y" multiplied | ||||||
3 | by 0.429); | ||||||
4 | (ii) for property on which a bonus | ||||||
5 | depreciation deduction of 50% of the adjusted | ||||||
6 | basis was taken, "x" equals "y" multiplied by | ||||||
7 | 1.0; | ||||||
8 | (iii) for property on which a bonus | ||||||
9 | depreciation deduction of 100% of the adjusted | ||||||
10 | basis was taken in a taxable year ending on or | ||||||
11 | after December 31, 2021, "x" equals the | ||||||
12 | depreciation deduction that would be allowed | ||||||
13 | on that property if the taxpayer had made the | ||||||
14 | election under Section 168(k)(7) of the | ||||||
15 | Internal Revenue Code to not claim bonus | ||||||
16 | depreciation on that property; and | ||||||
17 | (iv) for property on which a bonus | ||||||
18 | depreciation deduction of a percentage other | ||||||
19 | than 30%, 50% or 100% of the adjusted basis | ||||||
20 | was taken in a taxable year ending on or after | ||||||
21 | December 31, 2021, "x" equals "y" multiplied | ||||||
22 | by 100 times the percentage bonus depreciation | ||||||
23 | on the property (that is, 100(bonus%)) and | ||||||
24 | then divided by 100 times 1 minus the | ||||||
25 | percentage bonus depreciation on the property | ||||||
26 | (that is, 100(1-bonus%)). |
| |||||||
| |||||||
1 | The aggregate amount deducted under this | ||||||
2 | subparagraph in all taxable years for any one piece of | ||||||
3 | property may not exceed the amount of the bonus | ||||||
4 | depreciation deduction taken on that property on the | ||||||
5 | taxpayer's federal income tax return under subsection | ||||||
6 | (k) of Section 168 of the Internal Revenue Code. This | ||||||
7 | subparagraph (Z) is exempt from the provisions of | ||||||
8 | Section 250; | ||||||
9 | (AA) If the taxpayer sells, transfers, abandons, | ||||||
10 | or otherwise disposes of property for which the | ||||||
11 | taxpayer was required in any taxable year to make an | ||||||
12 | addition modification under subparagraph (D-15), then | ||||||
13 | an amount equal to that addition modification. | ||||||
14 | If the taxpayer continues to own property through | ||||||
15 | the last day of the last tax year for which a | ||||||
16 | subtraction is allowed with respect to that property | ||||||
17 | under subparagraph (Z) and for which the taxpayer was | ||||||
18 | required in any taxable year to make an addition | ||||||
19 | modification under subparagraph (D-15), then an amount | ||||||
20 | equal to that addition modification. | ||||||
21 | The taxpayer is allowed to take the deduction | ||||||
22 | under this subparagraph only once with respect to any | ||||||
23 | one piece of property. | ||||||
24 | This subparagraph (AA) is exempt from the | ||||||
25 | provisions of Section 250; | ||||||
26 | (BB) Any amount included in adjusted gross income, |
| |||||||
| |||||||
1 | other than salary, received by a driver in a | ||||||
2 | ridesharing arrangement using a motor vehicle; | ||||||
3 | (CC) The amount of (i) any interest income (net of | ||||||
4 | the deductions allocable thereto) taken into account | ||||||
5 | for the taxable year with respect to a transaction | ||||||
6 | with a taxpayer that is required to make an addition | ||||||
7 | modification with respect to such transaction under | ||||||
8 | Section 203(a)(2)(D-17), 203(b)(2)(E-12), | ||||||
9 | 203(c)(2)(G-12), or 203(d)(2)(D-7), but not to exceed | ||||||
10 | the amount of that addition modification, and (ii) any | ||||||
11 | income from intangible property (net of the deductions | ||||||
12 | allocable thereto) taken into account for the taxable | ||||||
13 | year with respect to a transaction with a taxpayer | ||||||
14 | that is required to make an addition modification with | ||||||
15 | respect to such transaction under Section | ||||||
16 | 203(a)(2)(D-18), 203(b)(2)(E-13), 203(c)(2)(G-13), or | ||||||
17 | 203(d)(2)(D-8), but not to exceed the amount of that | ||||||
18 | addition modification. This subparagraph (CC) is | ||||||
19 | exempt from the provisions of Section 250; | ||||||
20 | (DD) An amount equal to the interest income taken | ||||||
21 | into account for the taxable year (net of the | ||||||
22 | deductions allocable thereto) with respect to | ||||||
23 | transactions with (i) a foreign person who would be a | ||||||
24 | member of the taxpayer's unitary business group but | ||||||
25 | for the fact that the foreign person's business | ||||||
26 | activity outside the United States is 80% or more of |
| |||||||
| |||||||
1 | that person's total business activity and (ii) for | ||||||
2 | taxable years ending on or after December 31, 2008, to | ||||||
3 | a person who would be a member of the same unitary | ||||||
4 | business group but for the fact that the person is | ||||||
5 | prohibited under Section 1501(a)(27) from being | ||||||
6 | included in the unitary business group because he or | ||||||
7 | she is ordinarily required to apportion business | ||||||
8 | income under different subsections of Section 304, but | ||||||
9 | not to exceed the addition modification required to be | ||||||
10 | made for the same taxable year under Section | ||||||
11 | 203(a)(2)(D-17) for interest paid, accrued, or | ||||||
12 | incurred, directly or indirectly, to the same person. | ||||||
13 | This subparagraph (DD) is exempt from the provisions | ||||||
14 | of Section 250; | ||||||
15 | (EE) An amount equal to the income from intangible | ||||||
16 | property taken into account for the taxable year (net | ||||||
17 | of the deductions allocable thereto) with respect to | ||||||
18 | transactions with (i) a foreign person who would be a | ||||||
19 | member of the taxpayer's unitary business group but | ||||||
20 | for the fact that the foreign person's business | ||||||
21 | activity outside the United States is 80% or more of | ||||||
22 | that person's total business activity and (ii) for | ||||||
23 | taxable years ending on or after December 31, 2008, to | ||||||
24 | a person who would be a member of the same unitary | ||||||
25 | business group but for the fact that the person is | ||||||
26 | prohibited under Section 1501(a)(27) from being |
| |||||||
| |||||||
1 | included in the unitary business group because he or | ||||||
2 | she is ordinarily required to apportion business | ||||||
3 | income under different subsections of Section 304, but | ||||||
4 | not to exceed the addition modification required to be | ||||||
5 | made for the same taxable year under Section | ||||||
6 | 203(a)(2)(D-18) for intangible expenses and costs | ||||||
7 | paid, accrued, or incurred, directly or indirectly, to | ||||||
8 | the same foreign person. This subparagraph (EE) is | ||||||
9 | exempt from the provisions of Section 250; | ||||||
10 | (FF) An amount equal to any amount awarded to the | ||||||
11 | taxpayer during the taxable year by the Court of | ||||||
12 | Claims under subsection (c) of Section 8 of the Court | ||||||
13 | of Claims Act for time unjustly served in a State | ||||||
14 | prison. This subparagraph (FF) is exempt from the | ||||||
15 | provisions of Section 250; | ||||||
16 | (GG) For taxable years ending on or after December | ||||||
17 | 31, 2011, in the case of a taxpayer who was required to | ||||||
18 | add back any insurance premiums under Section | ||||||
19 | 203(a)(2)(D-19), such taxpayer may elect to subtract | ||||||
20 | that part of a reimbursement received from the | ||||||
21 | insurance company equal to the amount of the expense | ||||||
22 | or loss (including expenses incurred by the insurance | ||||||
23 | company) that would have been taken into account as a | ||||||
24 | deduction for federal income tax purposes if the | ||||||
25 | expense or loss had been uninsured. If a taxpayer | ||||||
26 | makes the election provided for by this subparagraph |
| |||||||
| |||||||
1 | (GG), the insurer to which the premiums were paid must | ||||||
2 | add back to income the amount subtracted by the | ||||||
3 | taxpayer pursuant to this subparagraph (GG). This | ||||||
4 | subparagraph (GG) is exempt from the provisions of | ||||||
5 | Section 250; | ||||||
6 | (HH) For taxable years beginning on or after | ||||||
7 | January 1, 2018 and prior to January 1, 2028, a maximum | ||||||
8 | of $10,000 contributed in the taxable year to a | ||||||
9 | qualified ABLE account under Section 16.6 of the State | ||||||
10 | Treasurer Act, except that amounts excluded from gross | ||||||
11 | income under Section 529(c)(3)(C)(i) or Section | ||||||
12 | 529A(c)(1)(C) of the Internal Revenue Code shall not | ||||||
13 | be considered moneys contributed under this | ||||||
14 | subparagraph (HH). For purposes of this subparagraph | ||||||
15 | (HH), contributions made by an employer on behalf of | ||||||
16 | an employee, or matching contributions made by an | ||||||
17 | employee, shall be treated as made by the employee; | ||||||
18 | (II) For taxable years that begin on or after | ||||||
19 | January 1, 2021 and begin before January 1, 2026, the | ||||||
20 | amount that is included in the taxpayer's federal | ||||||
21 | adjusted gross income pursuant to Section 61 of the | ||||||
22 | Internal Revenue Code as discharge of indebtedness | ||||||
23 | attributable to student loan forgiveness and that is | ||||||
24 | not excluded from the taxpayer's federal adjusted | ||||||
25 | gross income pursuant to paragraph (5) of subsection | ||||||
26 | (f) of Section 108 of the Internal Revenue Code; and |
| |||||||
| |||||||
1 | (JJ) For taxable years beginning on or after | ||||||
2 | January 1, 2023, for any cannabis establishment | ||||||
3 | operating in this State and licensed under the | ||||||
4 | Cannabis Regulation and Tax Act or any cannabis | ||||||
5 | cultivation center or medical cannabis dispensing | ||||||
6 | organization operating in this State and licensed | ||||||
7 | under the Compassionate Use of Medical Cannabis | ||||||
8 | Program Act, an amount equal to the deductions that | ||||||
9 | were disallowed under Section 280E of the Internal | ||||||
10 | Revenue Code for the taxable year and that would not be | ||||||
11 | added back under this subsection. The provisions of | ||||||
12 | this subparagraph (JJ) are exempt from the provisions | ||||||
13 | of Section 250 ; . | ||||||
14 | (KK) (JJ) To the extent includible in gross income | ||||||
15 | for federal income tax purposes, any amount awarded or | ||||||
16 | paid to the taxpayer as a result of a judgment or | ||||||
17 | settlement for fertility fraud as provided in Section | ||||||
18 | 15 of the Illinois Fertility Fraud Act, donor | ||||||
19 | fertility fraud as provided in Section 20 of the | ||||||
20 | Illinois Fertility Fraud Act, or similar action in | ||||||
21 | another state ; and . | ||||||
22 | (LL) For taxable years beginning on or after | ||||||
23 | January 1, 2025, if the taxpayer is a qualified | ||||||
24 | worker, an amount equal to the amount included in the | ||||||
25 | taxpayer's federal adjusted gross income that is | ||||||
26 | attributable to student loan repayment assistance |
| |||||||
| |||||||
1 | received by the taxpayer during the taxable year from | ||||||
2 | a qualified community foundation. | ||||||
3 | As used in this paragraph (LL): | ||||||
4 | "Full-time employee" means an individual who is | ||||||
5 | employed for consideration for at least 35 hours each | ||||||
6 | week or who renders any other standard of service | ||||||
7 | generally accepted by industry custom or practice as | ||||||
8 | full-time employment. | ||||||
9 | "Qualified community foundation" means a community | ||||||
10 | foundation or similar publicly supported organization | ||||||
11 | described in Section 170(b)(1)(A)(vi) of the Internal | ||||||
12 | Revenue Code of 1986 that is organized or operating in | ||||||
13 | this State and that substantially complies, as | ||||||
14 | determined by the Department of Revenue, with the | ||||||
15 | national standards for United States community | ||||||
16 | foundations established by the National Council on | ||||||
17 | Foundations. | ||||||
18 | "Qualified worker" means an individual who meets | ||||||
19 | all of the following: | ||||||
20 | (1) the individual is a full-time employee of | ||||||
21 | a business that meets one or more of the | ||||||
22 | following: | ||||||
23 | (A) the business is a qualified new | ||||||
24 | business venture that is registered with the | ||||||
25 | Department of Commerce and Economic | ||||||
26 | Opportunity under Section 220 of the Illinois |
| |||||||
| |||||||
1 | Income Tax Act; | ||||||
2 | (B) the business is primarily engaged in a | ||||||
3 | targeted growth industry; | ||||||
4 | (C) the business is a minority-owned | ||||||
5 | business, a women-owned business, or a | ||||||
6 | business owned by a person with a disability, | ||||||
7 | as those terms are defined in the Business | ||||||
8 | Enterprise for Minorities, Women, and Persons | ||||||
9 | with Disabilities Act; or | ||||||
10 | (D) the business is a not-for-profit | ||||||
11 | corporation, as defined in the General Not For | ||||||
12 | Profit Corporation Act of 1986; | ||||||
13 | (2) the individual is employed by the business | ||||||
14 | described in paragraph (1) at a job site that is | ||||||
15 | located in an Enterprise Zone, an Opportunity | ||||||
16 | Zone, an underserved area, or an area that has a | ||||||
17 | bachelor's degree attainment rate for the | ||||||
18 | population that is below the State or national | ||||||
19 | average for the population, as determined by the | ||||||
20 | United States Census Bureau; | ||||||
21 | (3) the individual is a United States citizen | ||||||
22 | or an eligible non-citizen; | ||||||
23 | (4) the individual (i) received a bachelor's | ||||||
24 | degree or higher and has an outstanding balance | ||||||
25 | due on a qualified education loan, as defined in | ||||||
26 | Section 221 of the Internal Revenue Code, or (ii) |
| |||||||
| |||||||
1 | the individual accrued educational debt while | ||||||
2 | pursuing skilled trades and related schooling; and | ||||||
3 | (5) the individual does not receive any other | ||||||
4 | student loan forgiveness. | ||||||
5 | "Student loan repayment assistance" means grants | ||||||
6 | or post-graduation scholarships made by a community | ||||||
7 | foundation directly to a student loan servicer on | ||||||
8 | behalf of a qualified worker. | ||||||
9 | "Targeted growth industry means one or more of the | ||||||
10 | following: | ||||||
11 | (1) advanced manufacturing; | ||||||
12 | (2) agribusiness and food processing; | ||||||
13 | (3) transportation distribution and logistics; | ||||||
14 | (4) life sciences and biotechnology; | ||||||
15 | (5) business and professional services; or | ||||||
16 | (6) energy. | ||||||
17 | "Underserved area" has the meaning given to that | ||||||
18 | term in Section 5-5 of the Economic Development for a | ||||||
19 | Growing Economy Tax Credit Act. | ||||||
20 | This subparagraph (LL) is exempt from the | ||||||
21 | provisions of Section 250. | ||||||
22 | (b) Corporations. | ||||||
23 | (1) In general. In the case of a corporation, base | ||||||
24 | income means an amount equal to the taxpayer's taxable | ||||||
25 | income for the taxable year as modified by paragraph (2). |
| |||||||
| |||||||
1 | (2) Modifications. The taxable income referred to in | ||||||
2 | paragraph (1) shall be modified by adding thereto the sum | ||||||
3 | of the following amounts: | ||||||
4 | (A) An amount equal to all amounts paid or accrued | ||||||
5 | to the taxpayer as interest and all distributions | ||||||
6 | received from regulated investment companies during | ||||||
7 | the taxable year to the extent excluded from gross | ||||||
8 | income in the computation of taxable income; | ||||||
9 | (B) An amount equal to the amount of tax imposed by | ||||||
10 | this Act to the extent deducted from gross income in | ||||||
11 | the computation of taxable income for the taxable | ||||||
12 | year; | ||||||
13 | (C) In the case of a regulated investment company, | ||||||
14 | an amount equal to the excess of (i) the net long-term | ||||||
15 | capital gain for the taxable year, over (ii) the | ||||||
16 | amount of the capital gain dividends designated as | ||||||
17 | such in accordance with Section 852(b)(3)(C) of the | ||||||
18 | Internal Revenue Code and any amount designated under | ||||||
19 | Section 852(b)(3)(D) of the Internal Revenue Code, | ||||||
20 | attributable to the taxable year (this amendatory Act | ||||||
21 | of 1995 (Public Act 89-89) is declarative of existing | ||||||
22 | law and is not a new enactment); | ||||||
23 | (D) The amount of any net operating loss deduction | ||||||
24 | taken in arriving at taxable income, other than a net | ||||||
25 | operating loss carried forward from a taxable year | ||||||
26 | ending prior to December 31, 1986; |
| |||||||
| |||||||
1 | (E) For taxable years in which a net operating | ||||||
2 | loss carryback or carryforward from a taxable year | ||||||
3 | ending prior to December 31, 1986 is an element of | ||||||
4 | taxable income under paragraph (1) of subsection (e) | ||||||
5 | or subparagraph (E) of paragraph (2) of subsection | ||||||
6 | (e), the amount by which addition modifications other | ||||||
7 | than those provided by this subparagraph (E) exceeded | ||||||
8 | subtraction modifications in such earlier taxable | ||||||
9 | year, with the following limitations applied in the | ||||||
10 | order that they are listed: | ||||||
11 | (i) the addition modification relating to the | ||||||
12 | net operating loss carried back or forward to the | ||||||
13 | taxable year from any taxable year ending prior to | ||||||
14 | December 31, 1986 shall be reduced by the amount | ||||||
15 | of addition modification under this subparagraph | ||||||
16 | (E) which related to that net operating loss and | ||||||
17 | which was taken into account in calculating the | ||||||
18 | base income of an earlier taxable year, and | ||||||
19 | (ii) the addition modification relating to the | ||||||
20 | net operating loss carried back or forward to the | ||||||
21 | taxable year from any taxable year ending prior to | ||||||
22 | December 31, 1986 shall not exceed the amount of | ||||||
23 | such carryback or carryforward; | ||||||
24 | For taxable years in which there is a net | ||||||
25 | operating loss carryback or carryforward from more | ||||||
26 | than one other taxable year ending prior to December |
| |||||||
| |||||||
1 | 31, 1986, the addition modification provided in this | ||||||
2 | subparagraph (E) shall be the sum of the amounts | ||||||
3 | computed independently under the preceding provisions | ||||||
4 | of this subparagraph (E) for each such taxable year; | ||||||
5 | (E-5) For taxable years ending after December 31, | ||||||
6 | 1997, an amount equal to any eligible remediation | ||||||
7 | costs that the corporation deducted in computing | ||||||
8 | adjusted gross income and for which the corporation | ||||||
9 | claims a credit under subsection (l) of Section 201; | ||||||
10 | (E-10) For taxable years 2001 and thereafter, an | ||||||
11 | amount equal to the bonus depreciation deduction taken | ||||||
12 | on the taxpayer's federal income tax return for the | ||||||
13 | taxable year under subsection (k) of Section 168 of | ||||||
14 | the Internal Revenue Code; | ||||||
15 | (E-11) If the taxpayer sells, transfers, abandons, | ||||||
16 | or otherwise disposes of property for which the | ||||||
17 | taxpayer was required in any taxable year to make an | ||||||
18 | addition modification under subparagraph (E-10), then | ||||||
19 | an amount equal to the aggregate amount of the | ||||||
20 | deductions taken in all taxable years under | ||||||
21 | subparagraph (T) with respect to that property. | ||||||
22 | If the taxpayer continues to own property through | ||||||
23 | the last day of the last tax year for which a | ||||||
24 | subtraction is allowed with respect to that property | ||||||
25 | under subparagraph (T) and for which the taxpayer was | ||||||
26 | allowed in any taxable year to make a subtraction |
| |||||||
| |||||||
1 | modification under subparagraph (T), then an amount | ||||||
2 | equal to that subtraction modification. | ||||||
3 | The taxpayer is required to make the addition | ||||||
4 | modification under this subparagraph only once with | ||||||
5 | respect to any one piece of property; | ||||||
6 | (E-12) An amount equal to the amount otherwise | ||||||
7 | allowed as a deduction in computing base income for | ||||||
8 | interest paid, accrued, or incurred, directly or | ||||||
9 | indirectly, (i) for taxable years ending on or after | ||||||
10 | December 31, 2004, to a foreign person who would be a | ||||||
11 | member of the same unitary business group but for the | ||||||
12 | fact the foreign person's business activity outside | ||||||
13 | the United States is 80% or more of the foreign | ||||||
14 | person's total business activity and (ii) for taxable | ||||||
15 | years ending on or after December 31, 2008, to a person | ||||||
16 | who would be a member of the same unitary business | ||||||
17 | group but for the fact that the person is prohibited | ||||||
18 | under Section 1501(a)(27) from being included in the | ||||||
19 | unitary business group because he or she is ordinarily | ||||||
20 | required to apportion business income under different | ||||||
21 | subsections of Section 304. The addition modification | ||||||
22 | required by this subparagraph shall be reduced to the | ||||||
23 | extent that dividends were included in base income of | ||||||
24 | the unitary group for the same taxable year and | ||||||
25 | received by the taxpayer or by a member of the | ||||||
26 | taxpayer's unitary business group (including amounts |
| |||||||
| |||||||
1 | included in gross income pursuant to Sections 951 | ||||||
2 | through 964 of the Internal Revenue Code and amounts | ||||||
3 | included in gross income under Section 78 of the | ||||||
4 | Internal Revenue Code) with respect to the stock of | ||||||
5 | the same person to whom the interest was paid, | ||||||
6 | accrued, or incurred. | ||||||
7 | This paragraph shall not apply to the following: | ||||||
8 | (i) an item of interest paid, accrued, or | ||||||
9 | incurred, directly or indirectly, to a person who | ||||||
10 | is subject in a foreign country or state, other | ||||||
11 | than a state which requires mandatory unitary | ||||||
12 | reporting, to a tax on or measured by net income | ||||||
13 | with respect to such interest; or | ||||||
14 | (ii) an item of interest paid, accrued, or | ||||||
15 | incurred, directly or indirectly, to a person if | ||||||
16 | the taxpayer can establish, based on a | ||||||
17 | preponderance of the evidence, both of the | ||||||
18 | following: | ||||||
19 | (a) the person, during the same taxable | ||||||
20 | year, paid, accrued, or incurred, the interest | ||||||
21 | to a person that is not a related member, and | ||||||
22 | (b) the transaction giving rise to the | ||||||
23 | interest expense between the taxpayer and the | ||||||
24 | person did not have as a principal purpose the | ||||||
25 | avoidance of Illinois income tax, and is paid | ||||||
26 | pursuant to a contract or agreement that |
| |||||||
| |||||||
1 | reflects an arm's-length interest rate and | ||||||
2 | terms; or | ||||||
3 | (iii) the taxpayer can establish, based on | ||||||
4 | clear and convincing evidence, that the interest | ||||||
5 | paid, accrued, or incurred relates to a contract | ||||||
6 | or agreement entered into at arm's-length rates | ||||||
7 | and terms and the principal purpose for the | ||||||
8 | payment is not federal or Illinois tax avoidance; | ||||||
9 | or | ||||||
10 | (iv) an item of interest paid, accrued, or | ||||||
11 | incurred, directly or indirectly, to a person if | ||||||
12 | the taxpayer establishes by clear and convincing | ||||||
13 | evidence that the adjustments are unreasonable; or | ||||||
14 | if the taxpayer and the Director agree in writing | ||||||
15 | to the application or use of an alternative method | ||||||
16 | of apportionment under Section 304(f). | ||||||
17 | Nothing in this subsection shall preclude the | ||||||
18 | Director from making any other adjustment | ||||||
19 | otherwise allowed under Section 404 of this Act | ||||||
20 | for any tax year beginning after the effective | ||||||
21 | date of this amendment provided such adjustment is | ||||||
22 | made pursuant to regulation adopted by the | ||||||
23 | Department and such regulations provide methods | ||||||
24 | and standards by which the Department will utilize | ||||||
25 | its authority under Section 404 of this Act; | ||||||
26 | (E-13) An amount equal to the amount of intangible |
| |||||||
| |||||||
1 | expenses and costs otherwise allowed as a deduction in | ||||||
2 | computing base income, and that were paid, accrued, or | ||||||
3 | incurred, directly or indirectly, (i) for taxable | ||||||
4 | years ending on or after December 31, 2004, to a | ||||||
5 | foreign person who would be a member of the same | ||||||
6 | unitary business group but for the fact that the | ||||||
7 | foreign person's business activity outside the United | ||||||
8 | States is 80% or more of that person's total business | ||||||
9 | activity and (ii) for taxable years ending on or after | ||||||
10 | December 31, 2008, to a person who would be a member of | ||||||
11 | the same unitary business group but for the fact that | ||||||
12 | the person is prohibited under Section 1501(a)(27) | ||||||
13 | from being included in the unitary business group | ||||||
14 | because he or she is ordinarily required to apportion | ||||||
15 | business income under different subsections of Section | ||||||
16 | 304. The addition modification required by this | ||||||
17 | subparagraph shall be reduced to the extent that | ||||||
18 | dividends were included in base income of the unitary | ||||||
19 | group for the same taxable year and received by the | ||||||
20 | taxpayer or by a member of the taxpayer's unitary | ||||||
21 | business group (including amounts included in gross | ||||||
22 | income pursuant to Sections 951 through 964 of the | ||||||
23 | Internal Revenue Code and amounts included in gross | ||||||
24 | income under Section 78 of the Internal Revenue Code) | ||||||
25 | with respect to the stock of the same person to whom | ||||||
26 | the intangible expenses and costs were directly or |
| |||||||
| |||||||
1 | indirectly paid, incurred, or accrued. The preceding | ||||||
2 | sentence shall not apply to the extent that the same | ||||||
3 | dividends caused a reduction to the addition | ||||||
4 | modification required under Section 203(b)(2)(E-12) of | ||||||
5 | this Act. As used in this subparagraph, the term | ||||||
6 | "intangible expenses and costs" includes (1) expenses, | ||||||
7 | losses, and costs for, or related to, the direct or | ||||||
8 | indirect acquisition, use, maintenance or management, | ||||||
9 | ownership, sale, exchange, or any other disposition of | ||||||
10 | intangible property; (2) losses incurred, directly or | ||||||
11 | indirectly, from factoring transactions or discounting | ||||||
12 | transactions; (3) royalty, patent, technical, and | ||||||
13 | copyright fees; (4) licensing fees; and (5) other | ||||||
14 | similar expenses and costs. For purposes of this | ||||||
15 | subparagraph, "intangible property" includes patents, | ||||||
16 | patent applications, trade names, trademarks, service | ||||||
17 | marks, copyrights, mask works, trade secrets, and | ||||||
18 | similar types of intangible assets. | ||||||
19 | This paragraph shall not apply to the following: | ||||||
20 | (i) any item of intangible expenses or costs | ||||||
21 | paid, accrued, or incurred, directly or | ||||||
22 | indirectly, from a transaction with a person who | ||||||
23 | is subject in a foreign country or state, other | ||||||
24 | than a state which requires mandatory unitary | ||||||
25 | reporting, to a tax on or measured by net income | ||||||
26 | with respect to such item; or |
| |||||||
| |||||||
1 | (ii) any item of intangible expense or cost | ||||||
2 | paid, accrued, or incurred, directly or | ||||||
3 | indirectly, if the taxpayer can establish, based | ||||||
4 | on a preponderance of the evidence, both of the | ||||||
5 | following: | ||||||
6 | (a) the person during the same taxable | ||||||
7 | year paid, accrued, or incurred, the | ||||||
8 | intangible expense or cost to a person that is | ||||||
9 | not a related member, and | ||||||
10 | (b) the transaction giving rise to the | ||||||
11 | intangible expense or cost between the | ||||||
12 | taxpayer and the person did not have as a | ||||||
13 | principal purpose the avoidance of Illinois | ||||||
14 | income tax, and is paid pursuant to a contract | ||||||
15 | or agreement that reflects arm's-length terms; | ||||||
16 | or | ||||||
17 | (iii) any item of intangible expense or cost | ||||||
18 | paid, accrued, or incurred, directly or | ||||||
19 | indirectly, from a transaction with a person if | ||||||
20 | the taxpayer establishes by clear and convincing | ||||||
21 | evidence, that the adjustments are unreasonable; | ||||||
22 | or if the taxpayer and the Director agree in | ||||||
23 | writing to the application or use of an | ||||||
24 | alternative method of apportionment under Section | ||||||
25 | 304(f); | ||||||
26 | Nothing in this subsection shall preclude the |
| |||||||
| |||||||
1 | Director from making any other adjustment | ||||||
2 | otherwise allowed under Section 404 of this Act | ||||||
3 | for any tax year beginning after the effective | ||||||
4 | date of this amendment provided such adjustment is | ||||||
5 | made pursuant to regulation adopted by the | ||||||
6 | Department and such regulations provide methods | ||||||
7 | and standards by which the Department will utilize | ||||||
8 | its authority under Section 404 of this Act; | ||||||
9 | (E-14) For taxable years ending on or after | ||||||
10 | December 31, 2008, an amount equal to the amount of | ||||||
11 | insurance premium expenses and costs otherwise allowed | ||||||
12 | as a deduction in computing base income, and that were | ||||||
13 | paid, accrued, or incurred, directly or indirectly, to | ||||||
14 | a person who would be a member of the same unitary | ||||||
15 | business group but for the fact that the person is | ||||||
16 | prohibited under Section 1501(a)(27) from being | ||||||
17 | included in the unitary business group because he or | ||||||
18 | she is ordinarily required to apportion business | ||||||
19 | income under different subsections of Section 304. The | ||||||
20 | addition modification required by this subparagraph | ||||||
21 | shall be reduced to the extent that dividends were | ||||||
22 | included in base income of the unitary group for the | ||||||
23 | same taxable year and received by the taxpayer or by a | ||||||
24 | member of the taxpayer's unitary business group | ||||||
25 | (including amounts included in gross income under | ||||||
26 | Sections 951 through 964 of the Internal Revenue Code |
| |||||||
| |||||||
1 | and amounts included in gross income under Section 78 | ||||||
2 | of the Internal Revenue Code) with respect to the | ||||||
3 | stock of the same person to whom the premiums and costs | ||||||
4 | were directly or indirectly paid, incurred, or | ||||||
5 | accrued. The preceding sentence does not apply to the | ||||||
6 | extent that the same dividends caused a reduction to | ||||||
7 | the addition modification required under Section | ||||||
8 | 203(b)(2)(E-12) or Section 203(b)(2)(E-13) of this | ||||||
9 | Act; | ||||||
10 | (E-15) For taxable years beginning after December | ||||||
11 | 31, 2008, any deduction for dividends paid by a | ||||||
12 | captive real estate investment trust that is allowed | ||||||
13 | to a real estate investment trust under Section | ||||||
14 | 857(b)(2)(B) of the Internal Revenue Code for | ||||||
15 | dividends paid; | ||||||
16 | (E-16) An amount equal to the credit allowable to | ||||||
17 | the taxpayer under Section 218(a) of this Act, | ||||||
18 | determined without regard to Section 218(c) of this | ||||||
19 | Act; | ||||||
20 | (E-17) For taxable years ending on or after | ||||||
21 | December 31, 2017, an amount equal to the deduction | ||||||
22 | allowed under Section 199 of the Internal Revenue Code | ||||||
23 | for the taxable year; | ||||||
24 | (E-18) for taxable years beginning after December | ||||||
25 | 31, 2018, an amount equal to the deduction allowed | ||||||
26 | under Section 250(a)(1)(A) of the Internal Revenue |
| |||||||
| |||||||
1 | Code for the taxable year; | ||||||
2 | (E-19) for taxable years ending on or after June | ||||||
3 | 30, 2021, an amount equal to the deduction allowed | ||||||
4 | under Section 250(a)(1)(B)(i) of the Internal Revenue | ||||||
5 | Code for the taxable year; | ||||||
6 | (E-20) for taxable years ending on or after June | ||||||
7 | 30, 2021, an amount equal to the deduction allowed | ||||||
8 | under Sections 243(e) and 245A(a) of the Internal | ||||||
9 | Revenue Code for the taxable year. | ||||||
10 | and by deducting from the total so obtained the sum of the | ||||||
11 | following amounts: | ||||||
12 | (F) An amount equal to the amount of any tax | ||||||
13 | imposed by this Act which was refunded to the taxpayer | ||||||
14 | and included in such total for the taxable year; | ||||||
15 | (G) An amount equal to any amount included in such | ||||||
16 | total under Section 78 of the Internal Revenue Code; | ||||||
17 | (H) In the case of a regulated investment company, | ||||||
18 | an amount equal to the amount of exempt interest | ||||||
19 | dividends as defined in subsection (b)(5) of Section | ||||||
20 | 852 of the Internal Revenue Code, paid to shareholders | ||||||
21 | for the taxable year; | ||||||
22 | (I) With the exception of any amounts subtracted | ||||||
23 | under subparagraph (J), an amount equal to the sum of | ||||||
24 | all amounts disallowed as deductions by (i) Sections | ||||||
25 | 171(a)(2) and 265(a)(2) and amounts disallowed as | ||||||
26 | interest expense by Section 291(a)(3) of the Internal |
| |||||||
| |||||||
1 | Revenue Code, and all amounts of expenses allocable to | ||||||
2 | interest and disallowed as deductions by Section | ||||||
3 | 265(a)(1) of the Internal Revenue Code; and (ii) for | ||||||
4 | taxable years ending on or after August 13, 1999, | ||||||
5 | Sections 171(a)(2), 265, 280C, 291(a)(3), and | ||||||
6 | 832(b)(5)(B)(i) of the Internal Revenue Code, plus, | ||||||
7 | for tax years ending on or after December 31, 2011, | ||||||
8 | amounts disallowed as deductions by Section 45G(e)(3) | ||||||
9 | of the Internal Revenue Code and, for taxable years | ||||||
10 | ending on or after December 31, 2008, any amount | ||||||
11 | included in gross income under Section 87 of the | ||||||
12 | Internal Revenue Code and the policyholders' share of | ||||||
13 | tax-exempt interest of a life insurance company under | ||||||
14 | Section 807(a)(2)(B) of the Internal Revenue Code (in | ||||||
15 | the case of a life insurance company with gross income | ||||||
16 | from a decrease in reserves for the tax year) or | ||||||
17 | Section 807(b)(1)(B) of the Internal Revenue Code (in | ||||||
18 | the case of a life insurance company allowed a | ||||||
19 | deduction for an increase in reserves for the tax | ||||||
20 | year); the provisions of this subparagraph are exempt | ||||||
21 | from the provisions of Section 250; | ||||||
22 | (J) An amount equal to all amounts included in | ||||||
23 | such total which are exempt from taxation by this | ||||||
24 | State either by reason of its statutes or Constitution | ||||||
25 | or by reason of the Constitution, treaties or statutes | ||||||
26 | of the United States; provided that, in the case of any |
| |||||||
| |||||||
1 | statute of this State that exempts income derived from | ||||||
2 | bonds or other obligations from the tax imposed under | ||||||
3 | this Act, the amount exempted shall be the interest | ||||||
4 | net of bond premium amortization; | ||||||
5 | (K) An amount equal to those dividends included in | ||||||
6 | such total which were paid by a corporation which | ||||||
7 | conducts business operations in a River Edge | ||||||
8 | Redevelopment Zone or zones created under the River | ||||||
9 | Edge Redevelopment Zone Act and conducts substantially | ||||||
10 | all of its operations in a River Edge Redevelopment | ||||||
11 | Zone or zones. This subparagraph (K) is exempt from | ||||||
12 | the provisions of Section 250; | ||||||
13 | (L) An amount equal to those dividends included in | ||||||
14 | such total that were paid by a corporation that | ||||||
15 | conducts business operations in a federally designated | ||||||
16 | Foreign Trade Zone or Sub-Zone and that is designated | ||||||
17 | a High Impact Business located in Illinois; provided | ||||||
18 | that dividends eligible for the deduction provided in | ||||||
19 | subparagraph (K) of paragraph 2 of this subsection | ||||||
20 | shall not be eligible for the deduction provided under | ||||||
21 | this subparagraph (L); | ||||||
22 | (M) For any taxpayer that is a financial | ||||||
23 | organization within the meaning of Section 304(c) of | ||||||
24 | this Act, an amount included in such total as interest | ||||||
25 | income from a loan or loans made by such taxpayer to a | ||||||
26 | borrower, to the extent that such a loan is secured by |
| |||||||
| |||||||
1 | property which is eligible for the River Edge | ||||||
2 | Redevelopment Zone Investment Credit. To determine the | ||||||
3 | portion of a loan or loans that is secured by property | ||||||
4 | eligible for a Section 201(f) investment credit to the | ||||||
5 | borrower, the entire principal amount of the loan or | ||||||
6 | loans between the taxpayer and the borrower should be | ||||||
7 | divided into the basis of the Section 201(f) | ||||||
8 | investment credit property which secures the loan or | ||||||
9 | loans, using for this purpose the original basis of | ||||||
10 | such property on the date that it was placed in service | ||||||
11 | in the River Edge Redevelopment Zone. The subtraction | ||||||
12 | modification available to the taxpayer in any year | ||||||
13 | under this subsection shall be that portion of the | ||||||
14 | total interest paid by the borrower with respect to | ||||||
15 | such loan attributable to the eligible property as | ||||||
16 | calculated under the previous sentence. This | ||||||
17 | subparagraph (M) is exempt from the provisions of | ||||||
18 | Section 250; | ||||||
19 | (M-1) For any taxpayer that is a financial | ||||||
20 | organization within the meaning of Section 304(c) of | ||||||
21 | this Act, an amount included in such total as interest | ||||||
22 | income from a loan or loans made by such taxpayer to a | ||||||
23 | borrower, to the extent that such a loan is secured by | ||||||
24 | property which is eligible for the High Impact | ||||||
25 | Business Investment Credit. To determine the portion | ||||||
26 | of a loan or loans that is secured by property eligible |
| |||||||
| |||||||
1 | for a Section 201(h) investment credit to the | ||||||
2 | borrower, the entire principal amount of the loan or | ||||||
3 | loans between the taxpayer and the borrower should be | ||||||
4 | divided into the basis of the Section 201(h) | ||||||
5 | investment credit property which secures the loan or | ||||||
6 | loans, using for this purpose the original basis of | ||||||
7 | such property on the date that it was placed in service | ||||||
8 | in a federally designated Foreign Trade Zone or | ||||||
9 | Sub-Zone located in Illinois. No taxpayer that is | ||||||
10 | eligible for the deduction provided in subparagraph | ||||||
11 | (M) of paragraph (2) of this subsection shall be | ||||||
12 | eligible for the deduction provided under this | ||||||
13 | subparagraph (M-1). The subtraction modification | ||||||
14 | available to taxpayers in any year under this | ||||||
15 | subsection shall be that portion of the total interest | ||||||
16 | paid by the borrower with respect to such loan | ||||||
17 | attributable to the eligible property as calculated | ||||||
18 | under the previous sentence; | ||||||
19 | (N) Two times any contribution made during the | ||||||
20 | taxable year to a designated zone organization to the | ||||||
21 | extent that the contribution (i) qualifies as a | ||||||
22 | charitable contribution under subsection (c) of | ||||||
23 | Section 170 of the Internal Revenue Code and (ii) | ||||||
24 | must, by its terms, be used for a project approved by | ||||||
25 | the Department of Commerce and Economic Opportunity | ||||||
26 | under Section 11 of the Illinois Enterprise Zone Act |
| |||||||
| |||||||
1 | or under Section 10-10 of the River Edge Redevelopment | ||||||
2 | Zone Act. This subparagraph (N) is exempt from the | ||||||
3 | provisions of Section 250; | ||||||
4 | (O) An amount equal to: (i) 85% for taxable years | ||||||
5 | ending on or before December 31, 1992, or, a | ||||||
6 | percentage equal to the percentage allowable under | ||||||
7 | Section 243(a)(1) of the Internal Revenue Code of 1986 | ||||||
8 | for taxable years ending after December 31, 1992, of | ||||||
9 | the amount by which dividends included in taxable | ||||||
10 | income and received from a corporation that is not | ||||||
11 | created or organized under the laws of the United | ||||||
12 | States or any state or political subdivision thereof, | ||||||
13 | including, for taxable years ending on or after | ||||||
14 | December 31, 1988, dividends received or deemed | ||||||
15 | received or paid or deemed paid under Sections 951 | ||||||
16 | through 965 of the Internal Revenue Code, exceed the | ||||||
17 | amount of the modification provided under subparagraph | ||||||
18 | (G) of paragraph (2) of this subsection (b) which is | ||||||
19 | related to such dividends, and including, for taxable | ||||||
20 | years ending on or after December 31, 2008, dividends | ||||||
21 | received from a captive real estate investment trust; | ||||||
22 | plus (ii) 100% of the amount by which dividends, | ||||||
23 | included in taxable income and received, including, | ||||||
24 | for taxable years ending on or after December 31, | ||||||
25 | 1988, dividends received or deemed received or paid or | ||||||
26 | deemed paid under Sections 951 through 964 of the |
| |||||||
| |||||||
1 | Internal Revenue Code and including, for taxable years | ||||||
2 | ending on or after December 31, 2008, dividends | ||||||
3 | received from a captive real estate investment trust, | ||||||
4 | from any such corporation specified in clause (i) that | ||||||
5 | would but for the provisions of Section 1504(b)(3) of | ||||||
6 | the Internal Revenue Code be treated as a member of the | ||||||
7 | affiliated group which includes the dividend | ||||||
8 | recipient, exceed the amount of the modification | ||||||
9 | provided under subparagraph (G) of paragraph (2) of | ||||||
10 | this subsection (b) which is related to such | ||||||
11 | dividends. For taxable years ending on or after June | ||||||
12 | 30, 2021, (i) for purposes of this subparagraph, the | ||||||
13 | term "dividend" does not include any amount treated as | ||||||
14 | a dividend under Section 1248 of the Internal Revenue | ||||||
15 | Code, and (ii) this subparagraph shall not apply to | ||||||
16 | dividends for which a deduction is allowed under | ||||||
17 | Section 245(a) of the Internal Revenue Code. This | ||||||
18 | subparagraph (O) is exempt from the provisions of | ||||||
19 | Section 250 of this Act; | ||||||
20 | (P) An amount equal to any contribution made to a | ||||||
21 | job training project established pursuant to the Tax | ||||||
22 | Increment Allocation Redevelopment Act; | ||||||
23 | (Q) An amount equal to the amount of the deduction | ||||||
24 | used to compute the federal income tax credit for | ||||||
25 | restoration of substantial amounts held under claim of | ||||||
26 | right for the taxable year pursuant to Section 1341 of |
| |||||||
| |||||||
1 | the Internal Revenue Code; | ||||||
2 | (R) On and after July 20, 1999, in the case of an | ||||||
3 | attorney-in-fact with respect to whom an interinsurer | ||||||
4 | or a reciprocal insurer has made the election under | ||||||
5 | Section 835 of the Internal Revenue Code, 26 U.S.C. | ||||||
6 | 835, an amount equal to the excess, if any, of the | ||||||
7 | amounts paid or incurred by that interinsurer or | ||||||
8 | reciprocal insurer in the taxable year to the | ||||||
9 | attorney-in-fact over the deduction allowed to that | ||||||
10 | interinsurer or reciprocal insurer with respect to the | ||||||
11 | attorney-in-fact under Section 835(b) of the Internal | ||||||
12 | Revenue Code for the taxable year; the provisions of | ||||||
13 | this subparagraph are exempt from the provisions of | ||||||
14 | Section 250; | ||||||
15 | (S) For taxable years ending on or after December | ||||||
16 | 31, 1997, in the case of a Subchapter S corporation, an | ||||||
17 | amount equal to all amounts of income allocable to a | ||||||
18 | shareholder subject to the Personal Property Tax | ||||||
19 | Replacement Income Tax imposed by subsections (c) and | ||||||
20 | (d) of Section 201 of this Act, including amounts | ||||||
21 | allocable to organizations exempt from federal income | ||||||
22 | tax by reason of Section 501(a) of the Internal | ||||||
23 | Revenue Code. This subparagraph (S) is exempt from the | ||||||
24 | provisions of Section 250; | ||||||
25 | (T) For taxable years 2001 and thereafter, for the | ||||||
26 | taxable year in which the bonus depreciation deduction |
| |||||||
| |||||||
1 | is taken on the taxpayer's federal income tax return | ||||||
2 | under subsection (k) of Section 168 of the Internal | ||||||
3 | Revenue Code and for each applicable taxable year | ||||||
4 | thereafter, an amount equal to "x", where: | ||||||
5 | (1) "y" equals the amount of the depreciation | ||||||
6 | deduction taken for the taxable year on the | ||||||
7 | taxpayer's federal income tax return on property | ||||||
8 | for which the bonus depreciation deduction was | ||||||
9 | taken in any year under subsection (k) of Section | ||||||
10 | 168 of the Internal Revenue Code, but not | ||||||
11 | including the bonus depreciation deduction; | ||||||
12 | (2) for taxable years ending on or before | ||||||
13 | December 31, 2005, "x" equals "y" multiplied by 30 | ||||||
14 | and then divided by 70 (or "y" multiplied by | ||||||
15 | 0.429); and | ||||||
16 | (3) for taxable years ending after December | ||||||
17 | 31, 2005: | ||||||
18 | (i) for property on which a bonus | ||||||
19 | depreciation deduction of 30% of the adjusted | ||||||
20 | basis was taken, "x" equals "y" multiplied by | ||||||
21 | 30 and then divided by 70 (or "y" multiplied | ||||||
22 | by 0.429); | ||||||
23 | (ii) for property on which a bonus | ||||||
24 | depreciation deduction of 50% of the adjusted | ||||||
25 | basis was taken, "x" equals "y" multiplied by | ||||||
26 | 1.0; |
| |||||||
| |||||||
1 | (iii) for property on which a bonus | ||||||
2 | depreciation deduction of 100% of the adjusted | ||||||
3 | basis was taken in a taxable year ending on or | ||||||
4 | after December 31, 2021, "x" equals the | ||||||
5 | depreciation deduction that would be allowed | ||||||
6 | on that property if the taxpayer had made the | ||||||
7 | election under Section 168(k)(7) of the | ||||||
8 | Internal Revenue Code to not claim bonus | ||||||
9 | depreciation on that property; and | ||||||
10 | (iv) for property on which a bonus | ||||||
11 | depreciation deduction of a percentage other | ||||||
12 | than 30%, 50% or 100% of the adjusted basis | ||||||
13 | was taken in a taxable year ending on or after | ||||||
14 | December 31, 2021, "x" equals "y" multiplied | ||||||
15 | by 100 times the percentage bonus depreciation | ||||||
16 | on the property (that is, 100(bonus%)) and | ||||||
17 | then divided by 100 times 1 minus the | ||||||
18 | percentage bonus depreciation on the property | ||||||
19 | (that is, 100(1-bonus%)). | ||||||
20 | The aggregate amount deducted under this | ||||||
21 | subparagraph in all taxable years for any one piece of | ||||||
22 | property may not exceed the amount of the bonus | ||||||
23 | depreciation deduction taken on that property on the | ||||||
24 | taxpayer's federal income tax return under subsection | ||||||
25 | (k) of Section 168 of the Internal Revenue Code. This | ||||||
26 | subparagraph (T) is exempt from the provisions of |
| |||||||
| |||||||
1 | Section 250; | ||||||
2 | (U) If the taxpayer sells, transfers, abandons, or | ||||||
3 | otherwise disposes of property for which the taxpayer | ||||||
4 | was required in any taxable year to make an addition | ||||||
5 | modification under subparagraph (E-10), then an amount | ||||||
6 | equal to that addition modification. | ||||||
7 | If the taxpayer continues to own property through | ||||||
8 | the last day of the last tax year for which a | ||||||
9 | subtraction is allowed with respect to that property | ||||||
10 | under subparagraph (T) and for which the taxpayer was | ||||||
11 | required in any taxable year to make an addition | ||||||
12 | modification under subparagraph (E-10), then an amount | ||||||
13 | equal to that addition modification. | ||||||
14 | The taxpayer is allowed to take the deduction | ||||||
15 | under this subparagraph only once with respect to any | ||||||
16 | one piece of property. | ||||||
17 | This subparagraph (U) is exempt from the | ||||||
18 | provisions of Section 250; | ||||||
19 | (V) The amount of: (i) any interest income (net of | ||||||
20 | the deductions allocable thereto) taken into account | ||||||
21 | for the taxable year with respect to a transaction | ||||||
22 | with a taxpayer that is required to make an addition | ||||||
23 | modification with respect to such transaction under | ||||||
24 | Section 203(a)(2)(D-17), 203(b)(2)(E-12), | ||||||
25 | 203(c)(2)(G-12), or 203(d)(2)(D-7), but not to exceed | ||||||
26 | the amount of such addition modification, (ii) any |
| |||||||
| |||||||
1 | income from intangible property (net of the deductions | ||||||
2 | allocable thereto) taken into account for the taxable | ||||||
3 | year with respect to a transaction with a taxpayer | ||||||
4 | that is required to make an addition modification with | ||||||
5 | respect to such transaction under Section | ||||||
6 | 203(a)(2)(D-18), 203(b)(2)(E-13), 203(c)(2)(G-13), or | ||||||
7 | 203(d)(2)(D-8), but not to exceed the amount of such | ||||||
8 | addition modification, and (iii) any insurance premium | ||||||
9 | income (net of deductions allocable thereto) taken | ||||||
10 | into account for the taxable year with respect to a | ||||||
11 | transaction with a taxpayer that is required to make | ||||||
12 | an addition modification with respect to such | ||||||
13 | transaction under Section 203(a)(2)(D-19), Section | ||||||
14 | 203(b)(2)(E-14), Section 203(c)(2)(G-14), or Section | ||||||
15 | 203(d)(2)(D-9), but not to exceed the amount of that | ||||||
16 | addition modification. This subparagraph (V) is exempt | ||||||
17 | from the provisions of Section 250; | ||||||
18 | (W) An amount equal to the interest income taken | ||||||
19 | into account for the taxable year (net of the | ||||||
20 | deductions allocable thereto) with respect to | ||||||
21 | transactions with (i) a foreign person who would be a | ||||||
22 | member of the taxpayer's unitary business group but | ||||||
23 | for the fact that the foreign person's business | ||||||
24 | activity outside the United States is 80% or more of | ||||||
25 | that person's total business activity and (ii) for | ||||||
26 | taxable years ending on or after December 31, 2008, to |
| |||||||
| |||||||
1 | a person who would be a member of the same unitary | ||||||
2 | business group but for the fact that the person is | ||||||
3 | prohibited under Section 1501(a)(27) from being | ||||||
4 | included in the unitary business group because he or | ||||||
5 | she is ordinarily required to apportion business | ||||||
6 | income under different subsections of Section 304, but | ||||||
7 | not to exceed the addition modification required to be | ||||||
8 | made for the same taxable year under Section | ||||||
9 | 203(b)(2)(E-12) for interest paid, accrued, or | ||||||
10 | incurred, directly or indirectly, to the same person. | ||||||
11 | This subparagraph (W) is exempt from the provisions of | ||||||
12 | Section 250; | ||||||
13 | (X) An amount equal to the income from intangible | ||||||
14 | property taken into account for the taxable year (net | ||||||
15 | of the deductions allocable thereto) with respect to | ||||||
16 | transactions with (i) a foreign person who would be a | ||||||
17 | member of the taxpayer's unitary business group but | ||||||
18 | for the fact that the foreign person's business | ||||||
19 | activity outside the United States is 80% or more of | ||||||
20 | that person's total business activity and (ii) for | ||||||
21 | taxable years ending on or after December 31, 2008, to | ||||||
22 | a person who would be a member of the same unitary | ||||||
23 | business group but for the fact that the person is | ||||||
24 | prohibited under Section 1501(a)(27) from being | ||||||
25 | included in the unitary business group because he or | ||||||
26 | she is ordinarily required to apportion business |
| |||||||
| |||||||
1 | income under different subsections of Section 304, but | ||||||
2 | not to exceed the addition modification required to be | ||||||
3 | made for the same taxable year under Section | ||||||
4 | 203(b)(2)(E-13) for intangible expenses and costs | ||||||
5 | paid, accrued, or incurred, directly or indirectly, to | ||||||
6 | the same foreign person. This subparagraph (X) is | ||||||
7 | exempt from the provisions of Section 250; | ||||||
8 | (Y) For taxable years ending on or after December | ||||||
9 | 31, 2011, in the case of a taxpayer who was required to | ||||||
10 | add back any insurance premiums under Section | ||||||
11 | 203(b)(2)(E-14), such taxpayer may elect to subtract | ||||||
12 | that part of a reimbursement received from the | ||||||
13 | insurance company equal to the amount of the expense | ||||||
14 | or loss (including expenses incurred by the insurance | ||||||
15 | company) that would have been taken into account as a | ||||||
16 | deduction for federal income tax purposes if the | ||||||
17 | expense or loss had been uninsured. If a taxpayer | ||||||
18 | makes the election provided for by this subparagraph | ||||||
19 | (Y), the insurer to which the premiums were paid must | ||||||
20 | add back to income the amount subtracted by the | ||||||
21 | taxpayer pursuant to this subparagraph (Y). This | ||||||
22 | subparagraph (Y) is exempt from the provisions of | ||||||
23 | Section 250; | ||||||
24 | (Z) The difference between the nondeductible | ||||||
25 | controlled foreign corporation dividends under Section | ||||||
26 | 965(e)(3) of the Internal Revenue Code over the |
| |||||||
| |||||||
1 | taxable income of the taxpayer, computed without | ||||||
2 | regard to Section 965(e)(2)(A) of the Internal Revenue | ||||||
3 | Code, and without regard to any net operating loss | ||||||
4 | deduction. This subparagraph (Z) is exempt from the | ||||||
5 | provisions of Section 250; and | ||||||
6 | (AA) For taxable years beginning on or after | ||||||
7 | January 1, 2023, for any cannabis establishment | ||||||
8 | operating in this State and licensed under the | ||||||
9 | Cannabis Regulation and Tax Act or any cannabis | ||||||
10 | cultivation center or medical cannabis dispensing | ||||||
11 | organization operating in this State and licensed | ||||||
12 | under the Compassionate Use of Medical Cannabis | ||||||
13 | Program Act, an amount equal to the deductions that | ||||||
14 | were disallowed under Section 280E of the Internal | ||||||
15 | Revenue Code for the taxable year and that would not be | ||||||
16 | added back under this subsection. The provisions of | ||||||
17 | this subparagraph (AA) are exempt from the provisions | ||||||
18 | of Section 250. | ||||||
19 | (3) Special rule. For purposes of paragraph (2)(A), | ||||||
20 | "gross income" in the case of a life insurance company, | ||||||
21 | for tax years ending on and after December 31, 1994, and | ||||||
22 | prior to December 31, 2011, shall mean the gross | ||||||
23 | investment income for the taxable year and, for tax years | ||||||
24 | ending on or after December 31, 2011, shall mean all | ||||||
25 | amounts included in life insurance gross income under | ||||||
26 | Section 803(a)(3) of the Internal Revenue Code. |
| |||||||
| |||||||
1 | (c) Trusts and estates. | ||||||
2 | (1) In general. In the case of a trust or estate, base | ||||||
3 | income means an amount equal to the taxpayer's taxable | ||||||
4 | income for the taxable year as modified by paragraph (2). | ||||||
5 | (2) Modifications. Subject to the provisions of | ||||||
6 | paragraph (3), the taxable income referred to in paragraph | ||||||
7 | (1) shall be modified by adding thereto the sum of the | ||||||
8 | following amounts: | ||||||
9 | (A) An amount equal to all amounts paid or accrued | ||||||
10 | to the taxpayer as interest or dividends during the | ||||||
11 | taxable year to the extent excluded from gross income | ||||||
12 | in the computation of taxable income; | ||||||
13 | (B) In the case of (i) an estate, $600; (ii) a | ||||||
14 | trust which, under its governing instrument, is | ||||||
15 | required to distribute all of its income currently, | ||||||
16 | $300; and (iii) any other trust, $100, but in each such | ||||||
17 | case, only to the extent such amount was deducted in | ||||||
18 | the computation of taxable income; | ||||||
19 | (C) An amount equal to the amount of tax imposed by | ||||||
20 | this Act to the extent deducted from gross income in | ||||||
21 | the computation of taxable income for the taxable | ||||||
22 | year; | ||||||
23 | (D) The amount of any net operating loss deduction | ||||||
24 | taken in arriving at taxable income, other than a net | ||||||
25 | operating loss carried forward from a taxable year |
| |||||||
| |||||||
1 | ending prior to December 31, 1986; | ||||||
2 | (E) For taxable years in which a net operating | ||||||
3 | loss carryback or carryforward from a taxable year | ||||||
4 | ending prior to December 31, 1986 is an element of | ||||||
5 | taxable income under paragraph (1) of subsection (e) | ||||||
6 | or subparagraph (E) of paragraph (2) of subsection | ||||||
7 | (e), the amount by which addition modifications other | ||||||
8 | than those provided by this subparagraph (E) exceeded | ||||||
9 | subtraction modifications in such taxable year, with | ||||||
10 | the following limitations applied in the order that | ||||||
11 | they are listed: | ||||||
12 | (i) the addition modification relating to the | ||||||
13 | net operating loss carried back or forward to the | ||||||
14 | taxable year from any taxable year ending prior to | ||||||
15 | December 31, 1986 shall be reduced by the amount | ||||||
16 | of addition modification under this subparagraph | ||||||
17 | (E) which related to that net operating loss and | ||||||
18 | which was taken into account in calculating the | ||||||
19 | base income of an earlier taxable year, and | ||||||
20 | (ii) the addition modification relating to the | ||||||
21 | net operating loss carried back or forward to the | ||||||
22 | taxable year from any taxable year ending prior to | ||||||
23 | December 31, 1986 shall not exceed the amount of | ||||||
24 | such carryback or carryforward; | ||||||
25 | For taxable years in which there is a net | ||||||
26 | operating loss carryback or carryforward from more |
| |||||||
| |||||||
1 | than one other taxable year ending prior to December | ||||||
2 | 31, 1986, the addition modification provided in this | ||||||
3 | subparagraph (E) shall be the sum of the amounts | ||||||
4 | computed independently under the preceding provisions | ||||||
5 | of this subparagraph (E) for each such taxable year; | ||||||
6 | (F) For taxable years ending on or after January | ||||||
7 | 1, 1989, an amount equal to the tax deducted pursuant | ||||||
8 | to Section 164 of the Internal Revenue Code if the | ||||||
9 | trust or estate is claiming the same tax for purposes | ||||||
10 | of the Illinois foreign tax credit under Section 601 | ||||||
11 | of this Act; | ||||||
12 | (G) An amount equal to the amount of the capital | ||||||
13 | gain deduction allowable under the Internal Revenue | ||||||
14 | Code, to the extent deducted from gross income in the | ||||||
15 | computation of taxable income; | ||||||
16 | (G-5) For taxable years ending after December 31, | ||||||
17 | 1997, an amount equal to any eligible remediation | ||||||
18 | costs that the trust or estate deducted in computing | ||||||
19 | adjusted gross income and for which the trust or | ||||||
20 | estate claims a credit under subsection (l) of Section | ||||||
21 | 201; | ||||||
22 | (G-10) For taxable years 2001 and thereafter, an | ||||||
23 | amount equal to the bonus depreciation deduction taken | ||||||
24 | on the taxpayer's federal income tax return for the | ||||||
25 | taxable year under subsection (k) of Section 168 of | ||||||
26 | the Internal Revenue Code; and |
| |||||||
| |||||||
1 | (G-11) If the taxpayer sells, transfers, abandons, | ||||||
2 | or otherwise disposes of property for which the | ||||||
3 | taxpayer was required in any taxable year to make an | ||||||
4 | addition modification under subparagraph (G-10), then | ||||||
5 | an amount equal to the aggregate amount of the | ||||||
6 | deductions taken in all taxable years under | ||||||
7 | subparagraph (R) with respect to that property. | ||||||
8 | If the taxpayer continues to own property through | ||||||
9 | the last day of the last tax year for which a | ||||||
10 | subtraction is allowed with respect to that property | ||||||
11 | under subparagraph (R) and for which the taxpayer was | ||||||
12 | allowed in any taxable year to make a subtraction | ||||||
13 | modification under subparagraph (R), then an amount | ||||||
14 | equal to that subtraction modification. | ||||||
15 | The taxpayer is required to make the addition | ||||||
16 | modification under this subparagraph only once with | ||||||
17 | respect to any one piece of property; | ||||||
18 | (G-12) An amount equal to the amount otherwise | ||||||
19 | allowed as a deduction in computing base income for | ||||||
20 | interest paid, accrued, or incurred, directly or | ||||||
21 | indirectly, (i) for taxable years ending on or after | ||||||
22 | December 31, 2004, to a foreign person who would be a | ||||||
23 | member of the same unitary business group but for the | ||||||
24 | fact that the foreign person's business activity | ||||||
25 | outside the United States is 80% or more of the foreign | ||||||
26 | person's total business activity and (ii) for taxable |
| |||||||
| |||||||
1 | years ending on or after December 31, 2008, to a person | ||||||
2 | who would be a member of the same unitary business | ||||||
3 | group but for the fact that the person is prohibited | ||||||
4 | under Section 1501(a)(27) from being included in the | ||||||
5 | unitary business group because he or she is ordinarily | ||||||
6 | required to apportion business income under different | ||||||
7 | subsections of Section 304. The addition modification | ||||||
8 | required by this subparagraph shall be reduced to the | ||||||
9 | extent that dividends were included in base income of | ||||||
10 | the unitary group for the same taxable year and | ||||||
11 | received by the taxpayer or by a member of the | ||||||
12 | taxpayer's unitary business group (including amounts | ||||||
13 | included in gross income pursuant to Sections 951 | ||||||
14 | through 964 of the Internal Revenue Code and amounts | ||||||
15 | included in gross income under Section 78 of the | ||||||
16 | Internal Revenue Code) with respect to the stock of | ||||||
17 | the same person to whom the interest was paid, | ||||||
18 | accrued, or incurred. | ||||||
19 | This paragraph shall not apply to the following: | ||||||
20 | (i) an item of interest paid, accrued, or | ||||||
21 | incurred, directly or indirectly, to a person who | ||||||
22 | is subject in a foreign country or state, other | ||||||
23 | than a state which requires mandatory unitary | ||||||
24 | reporting, to a tax on or measured by net income | ||||||
25 | with respect to such interest; or | ||||||
26 | (ii) an item of interest paid, accrued, or |
| |||||||
| |||||||
1 | incurred, directly or indirectly, to a person if | ||||||
2 | the taxpayer can establish, based on a | ||||||
3 | preponderance of the evidence, both of the | ||||||
4 | following: | ||||||
5 | (a) the person, during the same taxable | ||||||
6 | year, paid, accrued, or incurred, the interest | ||||||
7 | to a person that is not a related member, and | ||||||
8 | (b) the transaction giving rise to the | ||||||
9 | interest expense between the taxpayer and the | ||||||
10 | person did not have as a principal purpose the | ||||||
11 | avoidance of Illinois income tax, and is paid | ||||||
12 | pursuant to a contract or agreement that | ||||||
13 | reflects an arm's-length interest rate and | ||||||
14 | terms; or | ||||||
15 | (iii) the taxpayer can establish, based on | ||||||
16 | clear and convincing evidence, that the interest | ||||||
17 | paid, accrued, or incurred relates to a contract | ||||||
18 | or agreement entered into at arm's-length rates | ||||||
19 | and terms and the principal purpose for the | ||||||
20 | payment is not federal or Illinois tax avoidance; | ||||||
21 | or | ||||||
22 | (iv) an item of interest paid, accrued, or | ||||||
23 | incurred, directly or indirectly, to a person if | ||||||
24 | the taxpayer establishes by clear and convincing | ||||||
25 | evidence that the adjustments are unreasonable; or | ||||||
26 | if the taxpayer and the Director agree in writing |
| |||||||
| |||||||
1 | to the application or use of an alternative method | ||||||
2 | of apportionment under Section 304(f). | ||||||
3 | Nothing in this subsection shall preclude the | ||||||
4 | Director from making any other adjustment | ||||||
5 | otherwise allowed under Section 404 of this Act | ||||||
6 | for any tax year beginning after the effective | ||||||
7 | date of this amendment provided such adjustment is | ||||||
8 | made pursuant to regulation adopted by the | ||||||
9 | Department and such regulations provide methods | ||||||
10 | and standards by which the Department will utilize | ||||||
11 | its authority under Section 404 of this Act; | ||||||
12 | (G-13) An amount equal to the amount of intangible | ||||||
13 | expenses and costs otherwise allowed as a deduction in | ||||||
14 | computing base income, and that were paid, accrued, or | ||||||
15 | incurred, directly or indirectly, (i) for taxable | ||||||
16 | years ending on or after December 31, 2004, to a | ||||||
17 | foreign person who would be a member of the same | ||||||
18 | unitary business group but for the fact that the | ||||||
19 | foreign person's business activity outside the United | ||||||
20 | States is 80% or more of that person's total business | ||||||
21 | activity and (ii) for taxable years ending on or after | ||||||
22 | December 31, 2008, to a person who would be a member of | ||||||
23 | the same unitary business group but for the fact that | ||||||
24 | the person is prohibited under Section 1501(a)(27) | ||||||
25 | from being included in the unitary business group | ||||||
26 | because he or she is ordinarily required to apportion |
| |||||||
| |||||||
1 | business income under different subsections of Section | ||||||
2 | 304. The addition modification required by this | ||||||
3 | subparagraph shall be reduced to the extent that | ||||||
4 | dividends were included in base income of the unitary | ||||||
5 | group for the same taxable year and received by the | ||||||
6 | taxpayer or by a member of the taxpayer's unitary | ||||||
7 | business group (including amounts included in gross | ||||||
8 | income pursuant to Sections 951 through 964 of the | ||||||
9 | Internal Revenue Code and amounts included in gross | ||||||
10 | income under Section 78 of the Internal Revenue Code) | ||||||
11 | with respect to the stock of the same person to whom | ||||||
12 | the intangible expenses and costs were directly or | ||||||
13 | indirectly paid, incurred, or accrued. The preceding | ||||||
14 | sentence shall not apply to the extent that the same | ||||||
15 | dividends caused a reduction to the addition | ||||||
16 | modification required under Section 203(c)(2)(G-12) of | ||||||
17 | this Act. As used in this subparagraph, the term | ||||||
18 | "intangible expenses and costs" includes: (1) | ||||||
19 | expenses, losses, and costs for or related to the | ||||||
20 | direct or indirect acquisition, use, maintenance or | ||||||
21 | management, ownership, sale, exchange, or any other | ||||||
22 | disposition of intangible property; (2) losses | ||||||
23 | incurred, directly or indirectly, from factoring | ||||||
24 | transactions or discounting transactions; (3) royalty, | ||||||
25 | patent, technical, and copyright fees; (4) licensing | ||||||
26 | fees; and (5) other similar expenses and costs. For |
| |||||||
| |||||||
1 | purposes of this subparagraph, "intangible property" | ||||||
2 | includes patents, patent applications, trade names, | ||||||
3 | trademarks, service marks, copyrights, mask works, | ||||||
4 | trade secrets, and similar types of intangible assets. | ||||||
5 | This paragraph shall not apply to the following: | ||||||
6 | (i) any item of intangible expenses or costs | ||||||
7 | paid, accrued, or incurred, directly or | ||||||
8 | indirectly, from a transaction with a person who | ||||||
9 | is subject in a foreign country or state, other | ||||||
10 | than a state which requires mandatory unitary | ||||||
11 | reporting, to a tax on or measured by net income | ||||||
12 | with respect to such item; or | ||||||
13 | (ii) any item of intangible expense or cost | ||||||
14 | paid, accrued, or incurred, directly or | ||||||
15 | indirectly, if the taxpayer can establish, based | ||||||
16 | on a preponderance of the evidence, both of the | ||||||
17 | following: | ||||||
18 | (a) the person during the same taxable | ||||||
19 | year paid, accrued, or incurred, the | ||||||
20 | intangible expense or cost to a person that is | ||||||
21 | not a related member, and | ||||||
22 | (b) the transaction giving rise to the | ||||||
23 | intangible expense or cost between the | ||||||
24 | taxpayer and the person did not have as a | ||||||
25 | principal purpose the avoidance of Illinois | ||||||
26 | income tax, and is paid pursuant to a contract |
| |||||||
| |||||||
1 | or agreement that reflects arm's-length terms; | ||||||
2 | or | ||||||
3 | (iii) any item of intangible expense or cost | ||||||
4 | paid, accrued, or incurred, directly or | ||||||
5 | indirectly, from a transaction with a person if | ||||||
6 | the taxpayer establishes by clear and convincing | ||||||
7 | evidence, that the adjustments are unreasonable; | ||||||
8 | or if the taxpayer and the Director agree in | ||||||
9 | writing to the application or use of an | ||||||
10 | alternative method of apportionment under Section | ||||||
11 | 304(f); | ||||||
12 | Nothing in this subsection shall preclude the | ||||||
13 | Director from making any other adjustment | ||||||
14 | otherwise allowed under Section 404 of this Act | ||||||
15 | for any tax year beginning after the effective | ||||||
16 | date of this amendment provided such adjustment is | ||||||
17 | made pursuant to regulation adopted by the | ||||||
18 | Department and such regulations provide methods | ||||||
19 | and standards by which the Department will utilize | ||||||
20 | its authority under Section 404 of this Act; | ||||||
21 | (G-14) For taxable years ending on or after | ||||||
22 | December 31, 2008, an amount equal to the amount of | ||||||
23 | insurance premium expenses and costs otherwise allowed | ||||||
24 | as a deduction in computing base income, and that were | ||||||
25 | paid, accrued, or incurred, directly or indirectly, to | ||||||
26 | a person who would be a member of the same unitary |
| |||||||
| |||||||
1 | business group but for the fact that the person is | ||||||
2 | prohibited under Section 1501(a)(27) from being | ||||||
3 | included in the unitary business group because he or | ||||||
4 | she is ordinarily required to apportion business | ||||||
5 | income under different subsections of Section 304. The | ||||||
6 | addition modification required by this subparagraph | ||||||
7 | shall be reduced to the extent that dividends were | ||||||
8 | included in base income of the unitary group for the | ||||||
9 | same taxable year and received by the taxpayer or by a | ||||||
10 | member of the taxpayer's unitary business group | ||||||
11 | (including amounts included in gross income under | ||||||
12 | Sections 951 through 964 of the Internal Revenue Code | ||||||
13 | and amounts included in gross income under Section 78 | ||||||
14 | of the Internal Revenue Code) with respect to the | ||||||
15 | stock of the same person to whom the premiums and costs | ||||||
16 | were directly or indirectly paid, incurred, or | ||||||
17 | accrued. The preceding sentence does not apply to the | ||||||
18 | extent that the same dividends caused a reduction to | ||||||
19 | the addition modification required under Section | ||||||
20 | 203(c)(2)(G-12) or Section 203(c)(2)(G-13) of this | ||||||
21 | Act; | ||||||
22 | (G-15) An amount equal to the credit allowable to | ||||||
23 | the taxpayer under Section 218(a) of this Act, | ||||||
24 | determined without regard to Section 218(c) of this | ||||||
25 | Act; | ||||||
26 | (G-16) For taxable years ending on or after |
| |||||||
| |||||||
1 | December 31, 2017, an amount equal to the deduction | ||||||
2 | allowed under Section 199 of the Internal Revenue Code | ||||||
3 | for the taxable year; | ||||||
4 | and by deducting from the total so obtained the sum of the | ||||||
5 | following amounts: | ||||||
6 | (H) An amount equal to all amounts included in | ||||||
7 | such total pursuant to the provisions of Sections | ||||||
8 | 402(a), 402(c), 403(a), 403(b), 406(a), 407(a) and 408 | ||||||
9 | of the Internal Revenue Code or included in such total | ||||||
10 | as distributions under the provisions of any | ||||||
11 | retirement or disability plan for employees of any | ||||||
12 | governmental agency or unit, or retirement payments to | ||||||
13 | retired partners, which payments are excluded in | ||||||
14 | computing net earnings from self employment by Section | ||||||
15 | 1402 of the Internal Revenue Code and regulations | ||||||
16 | adopted pursuant thereto; | ||||||
17 | (I) The valuation limitation amount; | ||||||
18 | (J) An amount equal to the amount of any tax | ||||||
19 | imposed by this Act which was refunded to the taxpayer | ||||||
20 | and included in such total for the taxable year; | ||||||
21 | (K) An amount equal to all amounts included in | ||||||
22 | taxable income as modified by subparagraphs (A), (B), | ||||||
23 | (C), (D), (E), (F) and (G) which are exempt from | ||||||
24 | taxation by this State either by reason of its | ||||||
25 | statutes or Constitution or by reason of the | ||||||
26 | Constitution, treaties or statutes of the United |
| |||||||
| |||||||
1 | States; provided that, in the case of any statute of | ||||||
2 | this State that exempts income derived from bonds or | ||||||
3 | other obligations from the tax imposed under this Act, | ||||||
4 | the amount exempted shall be the interest net of bond | ||||||
5 | premium amortization; | ||||||
6 | (L) With the exception of any amounts subtracted | ||||||
7 | under subparagraph (K), an amount equal to the sum of | ||||||
8 | all amounts disallowed as deductions by (i) Sections | ||||||
9 | 171(a)(2) and 265(a)(2) of the Internal Revenue Code, | ||||||
10 | and all amounts of expenses allocable to interest and | ||||||
11 | disallowed as deductions by Section 265(a)(1) of the | ||||||
12 | Internal Revenue Code; and (ii) for taxable years | ||||||
13 | ending on or after August 13, 1999, Sections | ||||||
14 | 171(a)(2), 265, 280C, and 832(b)(5)(B)(i) of the | ||||||
15 | Internal Revenue Code, plus, (iii) for taxable years | ||||||
16 | ending on or after December 31, 2011, Section | ||||||
17 | 45G(e)(3) of the Internal Revenue Code and, for | ||||||
18 | taxable years ending on or after December 31, 2008, | ||||||
19 | any amount included in gross income under Section 87 | ||||||
20 | of the Internal Revenue Code; the provisions of this | ||||||
21 | subparagraph are exempt from the provisions of Section | ||||||
22 | 250; | ||||||
23 | (M) An amount equal to those dividends included in | ||||||
24 | such total which were paid by a corporation which | ||||||
25 | conducts business operations in a River Edge | ||||||
26 | Redevelopment Zone or zones created under the River |
| |||||||
| |||||||
1 | Edge Redevelopment Zone Act and conducts substantially | ||||||
2 | all of its operations in a River Edge Redevelopment | ||||||
3 | Zone or zones. This subparagraph (M) is exempt from | ||||||
4 | the provisions of Section 250; | ||||||
5 | (N) An amount equal to any contribution made to a | ||||||
6 | job training project established pursuant to the Tax | ||||||
7 | Increment Allocation Redevelopment Act; | ||||||
8 | (O) An amount equal to those dividends included in | ||||||
9 | such total that were paid by a corporation that | ||||||
10 | conducts business operations in a federally designated | ||||||
11 | Foreign Trade Zone or Sub-Zone and that is designated | ||||||
12 | a High Impact Business located in Illinois; provided | ||||||
13 | that dividends eligible for the deduction provided in | ||||||
14 | subparagraph (M) of paragraph (2) of this subsection | ||||||
15 | shall not be eligible for the deduction provided under | ||||||
16 | this subparagraph (O); | ||||||
17 | (P) An amount equal to the amount of the deduction | ||||||
18 | used to compute the federal income tax credit for | ||||||
19 | restoration of substantial amounts held under claim of | ||||||
20 | right for the taxable year pursuant to Section 1341 of | ||||||
21 | the Internal Revenue Code; | ||||||
22 | (Q) For taxable year 1999 and thereafter, an | ||||||
23 | amount equal to the amount of any (i) distributions, | ||||||
24 | to the extent includible in gross income for federal | ||||||
25 | income tax purposes, made to the taxpayer because of | ||||||
26 | his or her status as a victim of persecution for racial |
| |||||||
| |||||||
1 | or religious reasons by Nazi Germany or any other Axis | ||||||
2 | regime or as an heir of the victim and (ii) items of | ||||||
3 | income, to the extent includible in gross income for | ||||||
4 | federal income tax purposes, attributable to, derived | ||||||
5 | from or in any way related to assets stolen from, | ||||||
6 | hidden from, or otherwise lost to a victim of | ||||||
7 | persecution for racial or religious reasons by Nazi | ||||||
8 | Germany or any other Axis regime immediately prior to, | ||||||
9 | during, and immediately after World War II, including, | ||||||
10 | but not limited to, interest on the proceeds | ||||||
11 | receivable as insurance under policies issued to a | ||||||
12 | victim of persecution for racial or religious reasons | ||||||
13 | by Nazi Germany or any other Axis regime by European | ||||||
14 | insurance companies immediately prior to and during | ||||||
15 | World War II; provided, however, this subtraction from | ||||||
16 | federal adjusted gross income does not apply to assets | ||||||
17 | acquired with such assets or with the proceeds from | ||||||
18 | the sale of such assets; provided, further, this | ||||||
19 | paragraph shall only apply to a taxpayer who was the | ||||||
20 | first recipient of such assets after their recovery | ||||||
21 | and who is a victim of persecution for racial or | ||||||
22 | religious reasons by Nazi Germany or any other Axis | ||||||
23 | regime or as an heir of the victim. The amount of and | ||||||
24 | the eligibility for any public assistance, benefit, or | ||||||
25 | similar entitlement is not affected by the inclusion | ||||||
26 | of items (i) and (ii) of this paragraph in gross income |
| |||||||
| |||||||
1 | for federal income tax purposes. This paragraph is | ||||||
2 | exempt from the provisions of Section 250; | ||||||
3 | (R) For taxable years 2001 and thereafter, for the | ||||||
4 | taxable year in which the bonus depreciation deduction | ||||||
5 | is taken on the taxpayer's federal income tax return | ||||||
6 | under subsection (k) of Section 168 of the Internal | ||||||
7 | Revenue Code and for each applicable taxable year | ||||||
8 | thereafter, an amount equal to "x", where: | ||||||
9 | (1) "y" equals the amount of the depreciation | ||||||
10 | deduction taken for the taxable year on the | ||||||
11 | taxpayer's federal income tax return on property | ||||||
12 | for which the bonus depreciation deduction was | ||||||
13 | taken in any year under subsection (k) of Section | ||||||
14 | 168 of the Internal Revenue Code, but not | ||||||
15 | including the bonus depreciation deduction; | ||||||
16 | (2) for taxable years ending on or before | ||||||
17 | December 31, 2005, "x" equals "y" multiplied by 30 | ||||||
18 | and then divided by 70 (or "y" multiplied by | ||||||
19 | 0.429); and | ||||||
20 | (3) for taxable years ending after December | ||||||
21 | 31, 2005: | ||||||
22 | (i) for property on which a bonus | ||||||
23 | depreciation deduction of 30% of the adjusted | ||||||
24 | basis was taken, "x" equals "y" multiplied by | ||||||
25 | 30 and then divided by 70 (or "y" multiplied | ||||||
26 | by 0.429); |
| |||||||
| |||||||
1 | (ii) for property on which a bonus | ||||||
2 | depreciation deduction of 50% of the adjusted | ||||||
3 | basis was taken, "x" equals "y" multiplied by | ||||||
4 | 1.0; | ||||||
5 | (iii) for property on which a bonus | ||||||
6 | depreciation deduction of 100% of the adjusted | ||||||
7 | basis was taken in a taxable year ending on or | ||||||
8 | after December 31, 2021, "x" equals the | ||||||
9 | depreciation deduction that would be allowed | ||||||
10 | on that property if the taxpayer had made the | ||||||
11 | election under Section 168(k)(7) of the | ||||||
12 | Internal Revenue Code to not claim bonus | ||||||
13 | depreciation on that property; and | ||||||
14 | (iv) for property on which a bonus | ||||||
15 | depreciation deduction of a percentage other | ||||||
16 | than 30%, 50% or 100% of the adjusted basis | ||||||
17 | was taken in a taxable year ending on or after | ||||||
18 | December 31, 2021, "x" equals "y" multiplied | ||||||
19 | by 100 times the percentage bonus depreciation | ||||||
20 | on the property (that is, 100(bonus%)) and | ||||||
21 | then divided by 100 times 1 minus the | ||||||
22 | percentage bonus depreciation on the property | ||||||
23 | (that is, 100(1-bonus%)). | ||||||
24 | The aggregate amount deducted under this | ||||||
25 | subparagraph in all taxable years for any one piece of | ||||||
26 | property may not exceed the amount of the bonus |
| |||||||
| |||||||
1 | depreciation deduction taken on that property on the | ||||||
2 | taxpayer's federal income tax return under subsection | ||||||
3 | (k) of Section 168 of the Internal Revenue Code. This | ||||||
4 | subparagraph (R) is exempt from the provisions of | ||||||
5 | Section 250; | ||||||
6 | (S) If the taxpayer sells, transfers, abandons, or | ||||||
7 | otherwise disposes of property for which the taxpayer | ||||||
8 | was required in any taxable year to make an addition | ||||||
9 | modification under subparagraph (G-10), then an amount | ||||||
10 | equal to that addition modification. | ||||||
11 | If the taxpayer continues to own property through | ||||||
12 | the last day of the last tax year for which a | ||||||
13 | subtraction is allowed with respect to that property | ||||||
14 | under subparagraph (R) and for which the taxpayer was | ||||||
15 | required in any taxable year to make an addition | ||||||
16 | modification under subparagraph (G-10), then an amount | ||||||
17 | equal to that addition modification. | ||||||
18 | The taxpayer is allowed to take the deduction | ||||||
19 | under this subparagraph only once with respect to any | ||||||
20 | one piece of property. | ||||||
21 | This subparagraph (S) is exempt from the | ||||||
22 | provisions of Section 250; | ||||||
23 | (T) The amount of (i) any interest income (net of | ||||||
24 | the deductions allocable thereto) taken into account | ||||||
25 | for the taxable year with respect to a transaction | ||||||
26 | with a taxpayer that is required to make an addition |
| |||||||
| |||||||
1 | modification with respect to such transaction under | ||||||
2 | Section 203(a)(2)(D-17), 203(b)(2)(E-12), | ||||||
3 | 203(c)(2)(G-12), or 203(d)(2)(D-7), but not to exceed | ||||||
4 | the amount of such addition modification and (ii) any | ||||||
5 | income from intangible property (net of the deductions | ||||||
6 | allocable thereto) taken into account for the taxable | ||||||
7 | year with respect to a transaction with a taxpayer | ||||||
8 | that is required to make an addition modification with | ||||||
9 | respect to such transaction under Section | ||||||
10 | 203(a)(2)(D-18), 203(b)(2)(E-13), 203(c)(2)(G-13), or | ||||||
11 | 203(d)(2)(D-8), but not to exceed the amount of such | ||||||
12 | addition modification. This subparagraph (T) is exempt | ||||||
13 | from the provisions of Section 250; | ||||||
14 | (U) An amount equal to the interest income taken | ||||||
15 | into account for the taxable year (net of the | ||||||
16 | deductions allocable thereto) with respect to | ||||||
17 | transactions with (i) a foreign person who would be a | ||||||
18 | member of the taxpayer's unitary business group but | ||||||
19 | for the fact the foreign person's business activity | ||||||
20 | outside the United States is 80% or more of that | ||||||
21 | person's total business activity and (ii) for taxable | ||||||
22 | years ending on or after December 31, 2008, to a person | ||||||
23 | who would be a member of the same unitary business | ||||||
24 | group but for the fact that the person is prohibited | ||||||
25 | under Section 1501(a)(27) from being included in the | ||||||
26 | unitary business group because he or she is ordinarily |
| |||||||
| |||||||
1 | required to apportion business income under different | ||||||
2 | subsections of Section 304, but not to exceed the | ||||||
3 | addition modification required to be made for the same | ||||||
4 | taxable year under Section 203(c)(2)(G-12) for | ||||||
5 | interest paid, accrued, or incurred, directly or | ||||||
6 | indirectly, to the same person. This subparagraph (U) | ||||||
7 | is exempt from the provisions of Section 250; | ||||||
8 | (V) An amount equal to the income from intangible | ||||||
9 | property taken into account for the taxable year (net | ||||||
10 | of the deductions allocable thereto) with respect to | ||||||
11 | transactions with (i) a foreign person who would be a | ||||||
12 | member of the taxpayer's unitary business group but | ||||||
13 | for the fact that the foreign person's business | ||||||
14 | activity outside the United States is 80% or more of | ||||||
15 | that person's total business activity and (ii) for | ||||||
16 | taxable years ending on or after December 31, 2008, to | ||||||
17 | a person who would be a member of the same unitary | ||||||
18 | business group but for the fact that the person is | ||||||
19 | prohibited under Section 1501(a)(27) from being | ||||||
20 | included in the unitary business group because he or | ||||||
21 | she is ordinarily required to apportion business | ||||||
22 | income under different subsections of Section 304, but | ||||||
23 | not to exceed the addition modification required to be | ||||||
24 | made for the same taxable year under Section | ||||||
25 | 203(c)(2)(G-13) for intangible expenses and costs | ||||||
26 | paid, accrued, or incurred, directly or indirectly, to |
| |||||||
| |||||||
1 | the same foreign person. This subparagraph (V) is | ||||||
2 | exempt from the provisions of Section 250; | ||||||
3 | (W) in the case of an estate, an amount equal to | ||||||
4 | all amounts included in such total pursuant to the | ||||||
5 | provisions of Section 111 of the Internal Revenue Code | ||||||
6 | as a recovery of items previously deducted by the | ||||||
7 | decedent from adjusted gross income in the computation | ||||||
8 | of taxable income. This subparagraph (W) is exempt | ||||||
9 | from Section 250; | ||||||
10 | (X) an amount equal to the refund included in such | ||||||
11 | total of any tax deducted for federal income tax | ||||||
12 | purposes, to the extent that deduction was added back | ||||||
13 | under subparagraph (F). This subparagraph (X) is | ||||||
14 | exempt from the provisions of Section 250; | ||||||
15 | (Y) For taxable years ending on or after December | ||||||
16 | 31, 2011, in the case of a taxpayer who was required to | ||||||
17 | add back any insurance premiums under Section | ||||||
18 | 203(c)(2)(G-14), such taxpayer may elect to subtract | ||||||
19 | that part of a reimbursement received from the | ||||||
20 | insurance company equal to the amount of the expense | ||||||
21 | or loss (including expenses incurred by the insurance | ||||||
22 | company) that would have been taken into account as a | ||||||
23 | deduction for federal income tax purposes if the | ||||||
24 | expense or loss had been uninsured. If a taxpayer | ||||||
25 | makes the election provided for by this subparagraph | ||||||
26 | (Y), the insurer to which the premiums were paid must |
| |||||||
| |||||||
1 | add back to income the amount subtracted by the | ||||||
2 | taxpayer pursuant to this subparagraph (Y). This | ||||||
3 | subparagraph (Y) is exempt from the provisions of | ||||||
4 | Section 250; | ||||||
5 | (Z) For taxable years beginning after December 31, | ||||||
6 | 2018 and before January 1, 2026, the amount of excess | ||||||
7 | business loss of the taxpayer disallowed as a | ||||||
8 | deduction by Section 461(l)(1)(B) of the Internal | ||||||
9 | Revenue Code; and | ||||||
10 | (AA) For taxable years beginning on or after | ||||||
11 | January 1, 2023, for any cannabis establishment | ||||||
12 | operating in this State and licensed under the | ||||||
13 | Cannabis Regulation and Tax Act or any cannabis | ||||||
14 | cultivation center or medical cannabis dispensing | ||||||
15 | organization operating in this State and licensed | ||||||
16 | under the Compassionate Use of Medical Cannabis | ||||||
17 | Program Act, an amount equal to the deductions that | ||||||
18 | were disallowed under Section 280E of the Internal | ||||||
19 | Revenue Code for the taxable year and that would not be | ||||||
20 | added back under this subsection. The provisions of | ||||||
21 | this subparagraph (AA) are exempt from the provisions | ||||||
22 | of Section 250. | ||||||
23 | (3) Limitation. The amount of any modification | ||||||
24 | otherwise required under this subsection shall, under | ||||||
25 | regulations prescribed by the Department, be adjusted by | ||||||
26 | any amounts included therein which were properly paid, |
| |||||||
| |||||||
1 | credited, or required to be distributed, or permanently | ||||||
2 | set aside for charitable purposes pursuant to Internal | ||||||
3 | Revenue Code Section 642(c) during the taxable year. | ||||||
4 | (d) Partnerships. | ||||||
5 | (1) In general. In the case of a partnership, base | ||||||
6 | income means an amount equal to the taxpayer's taxable | ||||||
7 | income for the taxable year as modified by paragraph (2). | ||||||
8 | (2) Modifications. The taxable income referred to in | ||||||
9 | paragraph (1) shall be modified by adding thereto the sum | ||||||
10 | of the following amounts: | ||||||
11 | (A) An amount equal to all amounts paid or accrued | ||||||
12 | to the taxpayer as interest or dividends during the | ||||||
13 | taxable year to the extent excluded from gross income | ||||||
14 | in the computation of taxable income; | ||||||
15 | (B) An amount equal to the amount of tax imposed by | ||||||
16 | this Act to the extent deducted from gross income for | ||||||
17 | the taxable year; | ||||||
18 | (C) The amount of deductions allowed to the | ||||||
19 | partnership pursuant to Section 707 (c) of the | ||||||
20 | Internal Revenue Code in calculating its taxable | ||||||
21 | income; | ||||||
22 | (D) An amount equal to the amount of the capital | ||||||
23 | gain deduction allowable under the Internal Revenue | ||||||
24 | Code, to the extent deducted from gross income in the | ||||||
25 | computation of taxable income; |
| |||||||
| |||||||
1 | (D-5) For taxable years 2001 and thereafter, an | ||||||
2 | amount equal to the bonus depreciation deduction taken | ||||||
3 | on the taxpayer's federal income tax return for the | ||||||
4 | taxable year under subsection (k) of Section 168 of | ||||||
5 | the Internal Revenue Code; | ||||||
6 | (D-6) If the taxpayer sells, transfers, abandons, | ||||||
7 | or otherwise disposes of property for which the | ||||||
8 | taxpayer was required in any taxable year to make an | ||||||
9 | addition modification under subparagraph (D-5), then | ||||||
10 | an amount equal to the aggregate amount of the | ||||||
11 | deductions taken in all taxable years under | ||||||
12 | subparagraph (O) with respect to that property. | ||||||
13 | If the taxpayer continues to own property through | ||||||
14 | the last day of the last tax year for which a | ||||||
15 | subtraction is allowed with respect to that property | ||||||
16 | under subparagraph (O) and for which the taxpayer was | ||||||
17 | allowed in any taxable year to make a subtraction | ||||||
18 | modification under subparagraph (O), then an amount | ||||||
19 | equal to that subtraction modification. | ||||||
20 | The taxpayer is required to make the addition | ||||||
21 | modification under this subparagraph only once with | ||||||
22 | respect to any one piece of property; | ||||||
23 | (D-7) An amount equal to the amount otherwise | ||||||
24 | allowed as a deduction in computing base income for | ||||||
25 | interest paid, accrued, or incurred, directly or | ||||||
26 | indirectly, (i) for taxable years ending on or after |
| |||||||
| |||||||
1 | December 31, 2004, to a foreign person who would be a | ||||||
2 | member of the same unitary business group but for the | ||||||
3 | fact the foreign person's business activity outside | ||||||
4 | the United States is 80% or more of the foreign | ||||||
5 | person's total business activity and (ii) for taxable | ||||||
6 | years ending on or after December 31, 2008, to a person | ||||||
7 | who would be a member of the same unitary business | ||||||
8 | group but for the fact that the person is prohibited | ||||||
9 | under Section 1501(a)(27) from being included in the | ||||||
10 | unitary business group because he or she is ordinarily | ||||||
11 | required to apportion business income under different | ||||||
12 | subsections of Section 304. The addition modification | ||||||
13 | required by this subparagraph shall be reduced to the | ||||||
14 | extent that dividends were included in base income of | ||||||
15 | the unitary group for the same taxable year and | ||||||
16 | received by the taxpayer or by a member of the | ||||||
17 | taxpayer's unitary business group (including amounts | ||||||
18 | included in gross income pursuant to Sections 951 | ||||||
19 | through 964 of the Internal Revenue Code and amounts | ||||||
20 | included in gross income under Section 78 of the | ||||||
21 | Internal Revenue Code) with respect to the stock of | ||||||
22 | the same person to whom the interest was paid, | ||||||
23 | accrued, or incurred. | ||||||
24 | This paragraph shall not apply to the following: | ||||||
25 | (i) an item of interest paid, accrued, or | ||||||
26 | incurred, directly or indirectly, to a person who |
| |||||||
| |||||||
1 | is subject in a foreign country or state, other | ||||||
2 | than a state which requires mandatory unitary | ||||||
3 | reporting, to a tax on or measured by net income | ||||||
4 | with respect to such interest; or | ||||||
5 | (ii) an item of interest paid, accrued, or | ||||||
6 | incurred, directly or indirectly, to a person if | ||||||
7 | the taxpayer can establish, based on a | ||||||
8 | preponderance of the evidence, both of the | ||||||
9 | following: | ||||||
10 | (a) the person, during the same taxable | ||||||
11 | year, paid, accrued, or incurred, the interest | ||||||
12 | to a person that is not a related member, and | ||||||
13 | (b) the transaction giving rise to the | ||||||
14 | interest expense between the taxpayer and the | ||||||
15 | person did not have as a principal purpose the | ||||||
16 | avoidance of Illinois income tax, and is paid | ||||||
17 | pursuant to a contract or agreement that | ||||||
18 | reflects an arm's-length interest rate and | ||||||
19 | terms; or | ||||||
20 | (iii) the taxpayer can establish, based on | ||||||
21 | clear and convincing evidence, that the interest | ||||||
22 | paid, accrued, or incurred relates to a contract | ||||||
23 | or agreement entered into at arm's-length rates | ||||||
24 | and terms and the principal purpose for the | ||||||
25 | payment is not federal or Illinois tax avoidance; | ||||||
26 | or |
| |||||||
| |||||||
1 | (iv) an item of interest paid, accrued, or | ||||||
2 | incurred, directly or indirectly, to a person if | ||||||
3 | the taxpayer establishes by clear and convincing | ||||||
4 | evidence that the adjustments are unreasonable; or | ||||||
5 | if the taxpayer and the Director agree in writing | ||||||
6 | to the application or use of an alternative method | ||||||
7 | of apportionment under Section 304(f). | ||||||
8 | Nothing in this subsection shall preclude the | ||||||
9 | Director from making any other adjustment | ||||||
10 | otherwise allowed under Section 404 of this Act | ||||||
11 | for any tax year beginning after the effective | ||||||
12 | date of this amendment provided such adjustment is | ||||||
13 | made pursuant to regulation adopted by the | ||||||
14 | Department and such regulations provide methods | ||||||
15 | and standards by which the Department will utilize | ||||||
16 | its authority under Section 404 of this Act; and | ||||||
17 | (D-8) An amount equal to the amount of intangible | ||||||
18 | expenses and costs otherwise allowed as a deduction in | ||||||
19 | computing base income, and that were paid, accrued, or | ||||||
20 | incurred, directly or indirectly, (i) for taxable | ||||||
21 | years ending on or after December 31, 2004, to a | ||||||
22 | foreign person who would be a member of the same | ||||||
23 | unitary business group but for the fact that the | ||||||
24 | foreign person's business activity outside the United | ||||||
25 | States is 80% or more of that person's total business | ||||||
26 | activity and (ii) for taxable years ending on or after |
| |||||||
| |||||||
1 | December 31, 2008, to a person who would be a member of | ||||||
2 | the same unitary business group but for the fact that | ||||||
3 | the person is prohibited under Section 1501(a)(27) | ||||||
4 | from being included in the unitary business group | ||||||
5 | because he or she is ordinarily required to apportion | ||||||
6 | business income under different subsections of Section | ||||||
7 | 304. The addition modification required by this | ||||||
8 | subparagraph shall be reduced to the extent that | ||||||
9 | dividends were included in base income of the unitary | ||||||
10 | group for the same taxable year and received by the | ||||||
11 | taxpayer or by a member of the taxpayer's unitary | ||||||
12 | business group (including amounts included in gross | ||||||
13 | income pursuant to Sections 951 through 964 of the | ||||||
14 | Internal Revenue Code and amounts included in gross | ||||||
15 | income under Section 78 of the Internal Revenue Code) | ||||||
16 | with respect to the stock of the same person to whom | ||||||
17 | the intangible expenses and costs were directly or | ||||||
18 | indirectly paid, incurred or accrued. The preceding | ||||||
19 | sentence shall not apply to the extent that the same | ||||||
20 | dividends caused a reduction to the addition | ||||||
21 | modification required under Section 203(d)(2)(D-7) of | ||||||
22 | this Act. As used in this subparagraph, the term | ||||||
23 | "intangible expenses and costs" includes (1) expenses, | ||||||
24 | losses, and costs for, or related to, the direct or | ||||||
25 | indirect acquisition, use, maintenance or management, | ||||||
26 | ownership, sale, exchange, or any other disposition of |
| |||||||
| |||||||
1 | intangible property; (2) losses incurred, directly or | ||||||
2 | indirectly, from factoring transactions or discounting | ||||||
3 | transactions; (3) royalty, patent, technical, and | ||||||
4 | copyright fees; (4) licensing fees; and (5) other | ||||||
5 | similar expenses and costs. For purposes of this | ||||||
6 | subparagraph, "intangible property" includes patents, | ||||||
7 | patent applications, trade names, trademarks, service | ||||||
8 | marks, copyrights, mask works, trade secrets, and | ||||||
9 | similar types of intangible assets; | ||||||
10 | This paragraph shall not apply to the following: | ||||||
11 | (i) any item of intangible expenses or costs | ||||||
12 | paid, accrued, or incurred, directly or | ||||||
13 | indirectly, from a transaction with a person who | ||||||
14 | is subject in a foreign country or state, other | ||||||
15 | than a state which requires mandatory unitary | ||||||
16 | reporting, to a tax on or measured by net income | ||||||
17 | with respect to such item; or | ||||||
18 | (ii) any item of intangible expense or cost | ||||||
19 | paid, accrued, or incurred, directly or | ||||||
20 | indirectly, if the taxpayer can establish, based | ||||||
21 | on a preponderance of the evidence, both of the | ||||||
22 | following: | ||||||
23 | (a) the person during the same taxable | ||||||
24 | year paid, accrued, or incurred, the | ||||||
25 | intangible expense or cost to a person that is | ||||||
26 | not a related member, and |
| |||||||
| |||||||
1 | (b) the transaction giving rise to the | ||||||
2 | intangible expense or cost between the | ||||||
3 | taxpayer and the person did not have as a | ||||||
4 | principal purpose the avoidance of Illinois | ||||||
5 | income tax, and is paid pursuant to a contract | ||||||
6 | or agreement that reflects arm's-length terms; | ||||||
7 | or | ||||||
8 | (iii) any item of intangible expense or cost | ||||||
9 | paid, accrued, or incurred, directly or | ||||||
10 | indirectly, from a transaction with a person if | ||||||
11 | the taxpayer establishes by clear and convincing | ||||||
12 | evidence, that the adjustments are unreasonable; | ||||||
13 | or if the taxpayer and the Director agree in | ||||||
14 | writing to the application or use of an | ||||||
15 | alternative method of apportionment under Section | ||||||
16 | 304(f); | ||||||
17 | Nothing in this subsection shall preclude the | ||||||
18 | Director from making any other adjustment | ||||||
19 | otherwise allowed under Section 404 of this Act | ||||||
20 | for any tax year beginning after the effective | ||||||
21 | date of this amendment provided such adjustment is | ||||||
22 | made pursuant to regulation adopted by the | ||||||
23 | Department and such regulations provide methods | ||||||
24 | and standards by which the Department will utilize | ||||||
25 | its authority under Section 404 of this Act; | ||||||
26 | (D-9) For taxable years ending on or after |
| |||||||
| |||||||
1 | December 31, 2008, an amount equal to the amount of | ||||||
2 | insurance premium expenses and costs otherwise allowed | ||||||
3 | as a deduction in computing base income, and that were | ||||||
4 | paid, accrued, or incurred, directly or indirectly, to | ||||||
5 | a person who would be a member of the same unitary | ||||||
6 | business group but for the fact that the person is | ||||||
7 | prohibited under Section 1501(a)(27) from being | ||||||
8 | included in the unitary business group because he or | ||||||
9 | she is ordinarily required to apportion business | ||||||
10 | income under different subsections of Section 304. The | ||||||
11 | addition modification required by this subparagraph | ||||||
12 | shall be reduced to the extent that dividends were | ||||||
13 | included in base income of the unitary group for the | ||||||
14 | same taxable year and received by the taxpayer or by a | ||||||
15 | member of the taxpayer's unitary business group | ||||||
16 | (including amounts included in gross income under | ||||||
17 | Sections 951 through 964 of the Internal Revenue Code | ||||||
18 | and amounts included in gross income under Section 78 | ||||||
19 | of the Internal Revenue Code) with respect to the | ||||||
20 | stock of the same person to whom the premiums and costs | ||||||
21 | were directly or indirectly paid, incurred, or | ||||||
22 | accrued. The preceding sentence does not apply to the | ||||||
23 | extent that the same dividends caused a reduction to | ||||||
24 | the addition modification required under Section | ||||||
25 | 203(d)(2)(D-7) or Section 203(d)(2)(D-8) of this Act; | ||||||
26 | (D-10) An amount equal to the credit allowable to |
| |||||||
| |||||||
1 | the taxpayer under Section 218(a) of this Act, | ||||||
2 | determined without regard to Section 218(c) of this | ||||||
3 | Act; | ||||||
4 | (D-11) For taxable years ending on or after | ||||||
5 | December 31, 2017, an amount equal to the deduction | ||||||
6 | allowed under Section 199 of the Internal Revenue Code | ||||||
7 | for the taxable year; | ||||||
8 | and by deducting from the total so obtained the following | ||||||
9 | amounts: | ||||||
10 | (E) The valuation limitation amount; | ||||||
11 | (F) An amount equal to the amount of any tax | ||||||
12 | imposed by this Act which was refunded to the taxpayer | ||||||
13 | and included in such total for the taxable year; | ||||||
14 | (G) An amount equal to all amounts included in | ||||||
15 | taxable income as modified by subparagraphs (A), (B), | ||||||
16 | (C) and (D) which are exempt from taxation by this | ||||||
17 | State either by reason of its statutes or Constitution | ||||||
18 | or by reason of the Constitution, treaties or statutes | ||||||
19 | of the United States; provided that, in the case of any | ||||||
20 | statute of this State that exempts income derived from | ||||||
21 | bonds or other obligations from the tax imposed under | ||||||
22 | this Act, the amount exempted shall be the interest | ||||||
23 | net of bond premium amortization; | ||||||
24 | (H) Any income of the partnership which | ||||||
25 | constitutes personal service income as defined in | ||||||
26 | Section 1348(b)(1) of the Internal Revenue Code (as in |
| |||||||
| |||||||
1 | effect December 31, 1981) or a reasonable allowance | ||||||
2 | for compensation paid or accrued for services rendered | ||||||
3 | by partners to the partnership, whichever is greater; | ||||||
4 | this subparagraph (H) is exempt from the provisions of | ||||||
5 | Section 250; | ||||||
6 | (I) An amount equal to all amounts of income | ||||||
7 | distributable to an entity subject to the Personal | ||||||
8 | Property Tax Replacement Income Tax imposed by | ||||||
9 | subsections (c) and (d) of Section 201 of this Act | ||||||
10 | including amounts distributable to organizations | ||||||
11 | exempt from federal income tax by reason of Section | ||||||
12 | 501(a) of the Internal Revenue Code; this subparagraph | ||||||
13 | (I) is exempt from the provisions of Section 250; | ||||||
14 | (J) With the exception of any amounts subtracted | ||||||
15 | under subparagraph (G), an amount equal to the sum of | ||||||
16 | all amounts disallowed as deductions by (i) Sections | ||||||
17 | 171(a)(2) and 265(a)(2) of the Internal Revenue Code, | ||||||
18 | and all amounts of expenses allocable to interest and | ||||||
19 | disallowed as deductions by Section 265(a)(1) of the | ||||||
20 | Internal Revenue Code; and (ii) for taxable years | ||||||
21 | ending on or after August 13, 1999, Sections | ||||||
22 | 171(a)(2), 265, 280C, and 832(b)(5)(B)(i) of the | ||||||
23 | Internal Revenue Code, plus, (iii) for taxable years | ||||||
24 | ending on or after December 31, 2011, Section | ||||||
25 | 45G(e)(3) of the Internal Revenue Code and, for | ||||||
26 | taxable years ending on or after December 31, 2008, |
| |||||||
| |||||||
1 | any amount included in gross income under Section 87 | ||||||
2 | of the Internal Revenue Code; the provisions of this | ||||||
3 | subparagraph are exempt from the provisions of Section | ||||||
4 | 250; | ||||||
5 | (K) An amount equal to those dividends included in | ||||||
6 | such total which were paid by a corporation which | ||||||
7 | conducts business operations in a River Edge | ||||||
8 | Redevelopment Zone or zones created under the River | ||||||
9 | Edge Redevelopment Zone Act and conducts substantially | ||||||
10 | all of its operations from a River Edge Redevelopment | ||||||
11 | Zone or zones. This subparagraph (K) is exempt from | ||||||
12 | the provisions of Section 250; | ||||||
13 | (L) An amount equal to any contribution made to a | ||||||
14 | job training project established pursuant to the Real | ||||||
15 | Property Tax Increment Allocation Redevelopment Act; | ||||||
16 | (M) An amount equal to those dividends included in | ||||||
17 | such total that were paid by a corporation that | ||||||
18 | conducts business operations in a federally designated | ||||||
19 | Foreign Trade Zone or Sub-Zone and that is designated | ||||||
20 | a High Impact Business located in Illinois; provided | ||||||
21 | that dividends eligible for the deduction provided in | ||||||
22 | subparagraph (K) of paragraph (2) of this subsection | ||||||
23 | shall not be eligible for the deduction provided under | ||||||
24 | this subparagraph (M); | ||||||
25 | (N) An amount equal to the amount of the deduction | ||||||
26 | used to compute the federal income tax credit for |
| |||||||
| |||||||
1 | restoration of substantial amounts held under claim of | ||||||
2 | right for the taxable year pursuant to Section 1341 of | ||||||
3 | the Internal Revenue Code; | ||||||
4 | (O) For taxable years 2001 and thereafter, for the | ||||||
5 | taxable year in which the bonus depreciation deduction | ||||||
6 | is taken on the taxpayer's federal income tax return | ||||||
7 | under subsection (k) of Section 168 of the Internal | ||||||
8 | Revenue Code and for each applicable taxable year | ||||||
9 | thereafter, an amount equal to "x", where: | ||||||
10 | (1) "y" equals the amount of the depreciation | ||||||
11 | deduction taken for the taxable year on the | ||||||
12 | taxpayer's federal income tax return on property | ||||||
13 | for which the bonus depreciation deduction was | ||||||
14 | taken in any year under subsection (k) of Section | ||||||
15 | 168 of the Internal Revenue Code, but not | ||||||
16 | including the bonus depreciation deduction; | ||||||
17 | (2) for taxable years ending on or before | ||||||
18 | December 31, 2005, "x" equals "y" multiplied by 30 | ||||||
19 | and then divided by 70 (or "y" multiplied by | ||||||
20 | 0.429); and | ||||||
21 | (3) for taxable years ending after December | ||||||
22 | 31, 2005: | ||||||
23 | (i) for property on which a bonus | ||||||
24 | depreciation deduction of 30% of the adjusted | ||||||
25 | basis was taken, "x" equals "y" multiplied by | ||||||
26 | 30 and then divided by 70 (or "y" multiplied |
| |||||||
| |||||||
1 | by 0.429); | ||||||
2 | (ii) for property on which a bonus | ||||||
3 | depreciation deduction of 50% of the adjusted | ||||||
4 | basis was taken, "x" equals "y" multiplied by | ||||||
5 | 1.0; | ||||||
6 | (iii) for property on which a bonus | ||||||
7 | depreciation deduction of 100% of the adjusted | ||||||
8 | basis was taken in a taxable year ending on or | ||||||
9 | after December 31, 2021, "x" equals the | ||||||
10 | depreciation deduction that would be allowed | ||||||
11 | on that property if the taxpayer had made the | ||||||
12 | election under Section 168(k)(7) of the | ||||||
13 | Internal Revenue Code to not claim bonus | ||||||
14 | depreciation on that property; and | ||||||
15 | (iv) for property on which a bonus | ||||||
16 | depreciation deduction of a percentage other | ||||||
17 | than 30%, 50% or 100% of the adjusted basis | ||||||
18 | was taken in a taxable year ending on or after | ||||||
19 | December 31, 2021, "x" equals "y" multiplied | ||||||
20 | by 100 times the percentage bonus depreciation | ||||||
21 | on the property (that is, 100(bonus%)) and | ||||||
22 | then divided by 100 times 1 minus the | ||||||
23 | percentage bonus depreciation on the property | ||||||
24 | (that is, 100(1-bonus%)). | ||||||
25 | The aggregate amount deducted under this | ||||||
26 | subparagraph in all taxable years for any one piece of |
| |||||||
| |||||||
1 | property may not exceed the amount of the bonus | ||||||
2 | depreciation deduction taken on that property on the | ||||||
3 | taxpayer's federal income tax return under subsection | ||||||
4 | (k) of Section 168 of the Internal Revenue Code. This | ||||||
5 | subparagraph (O) is exempt from the provisions of | ||||||
6 | Section 250; | ||||||
7 | (P) If the taxpayer sells, transfers, abandons, or | ||||||
8 | otherwise disposes of property for which the taxpayer | ||||||
9 | was required in any taxable year to make an addition | ||||||
10 | modification under subparagraph (D-5), then an amount | ||||||
11 | equal to that addition modification. | ||||||
12 | If the taxpayer continues to own property through | ||||||
13 | the last day of the last tax year for which a | ||||||
14 | subtraction is allowed with respect to that property | ||||||
15 | under subparagraph (O) and for which the taxpayer was | ||||||
16 | required in any taxable year to make an addition | ||||||
17 | modification under subparagraph (D-5), then an amount | ||||||
18 | equal to that addition modification. | ||||||
19 | The taxpayer is allowed to take the deduction | ||||||
20 | under this subparagraph only once with respect to any | ||||||
21 | one piece of property. | ||||||
22 | This subparagraph (P) is exempt from the | ||||||
23 | provisions of Section 250; | ||||||
24 | (Q) The amount of (i) any interest income (net of | ||||||
25 | the deductions allocable thereto) taken into account | ||||||
26 | for the taxable year with respect to a transaction |
| |||||||
| |||||||
1 | with a taxpayer that is required to make an addition | ||||||
2 | modification with respect to such transaction under | ||||||
3 | Section 203(a)(2)(D-17), 203(b)(2)(E-12), | ||||||
4 | 203(c)(2)(G-12), or 203(d)(2)(D-7), but not to exceed | ||||||
5 | the amount of such addition modification and (ii) any | ||||||
6 | income from intangible property (net of the deductions | ||||||
7 | allocable thereto) taken into account for the taxable | ||||||
8 | year with respect to a transaction with a taxpayer | ||||||
9 | that is required to make an addition modification with | ||||||
10 | respect to such transaction under Section | ||||||
11 | 203(a)(2)(D-18), 203(b)(2)(E-13), 203(c)(2)(G-13), or | ||||||
12 | 203(d)(2)(D-8), but not to exceed the amount of such | ||||||
13 | addition modification. This subparagraph (Q) is exempt | ||||||
14 | from Section 250; | ||||||
15 | (R) An amount equal to the interest income taken | ||||||
16 | into account for the taxable year (net of the | ||||||
17 | deductions allocable thereto) with respect to | ||||||
18 | transactions with (i) a foreign person who would be a | ||||||
19 | member of the taxpayer's unitary business group but | ||||||
20 | for the fact that the foreign person's business | ||||||
21 | activity outside the United States is 80% or more of | ||||||
22 | that person's total business activity and (ii) for | ||||||
23 | taxable years ending on or after December 31, 2008, to | ||||||
24 | a person who would be a member of the same unitary | ||||||
25 | business group but for the fact that the person is | ||||||
26 | prohibited under Section 1501(a)(27) from being |
| |||||||
| |||||||
1 | included in the unitary business group because he or | ||||||
2 | she is ordinarily required to apportion business | ||||||
3 | income under different subsections of Section 304, but | ||||||
4 | not to exceed the addition modification required to be | ||||||
5 | made for the same taxable year under Section | ||||||
6 | 203(d)(2)(D-7) for interest paid, accrued, or | ||||||
7 | incurred, directly or indirectly, to the same person. | ||||||
8 | This subparagraph (R) is exempt from Section 250; | ||||||
9 | (S) An amount equal to the income from intangible | ||||||
10 | property taken into account for the taxable year (net | ||||||
11 | of the deductions allocable thereto) with respect to | ||||||
12 | transactions with (i) a foreign person who would be a | ||||||
13 | member of the taxpayer's unitary business group but | ||||||
14 | for the fact that the foreign person's business | ||||||
15 | activity outside the United States is 80% or more of | ||||||
16 | that person's total business activity and (ii) for | ||||||
17 | taxable years ending on or after December 31, 2008, to | ||||||
18 | a person who would be a member of the same unitary | ||||||
19 | business group but for the fact that the person is | ||||||
20 | prohibited under Section 1501(a)(27) from being | ||||||
21 | included in the unitary business group because he or | ||||||
22 | she is ordinarily required to apportion business | ||||||
23 | income under different subsections of Section 304, but | ||||||
24 | not to exceed the addition modification required to be | ||||||
25 | made for the same taxable year under Section | ||||||
26 | 203(d)(2)(D-8) for intangible expenses and costs paid, |
| |||||||
| |||||||
1 | accrued, or incurred, directly or indirectly, to the | ||||||
2 | same person. This subparagraph (S) is exempt from | ||||||
3 | Section 250; | ||||||
4 | (T) For taxable years ending on or after December | ||||||
5 | 31, 2011, in the case of a taxpayer who was required to | ||||||
6 | add back any insurance premiums under Section | ||||||
7 | 203(d)(2)(D-9), such taxpayer may elect to subtract | ||||||
8 | that part of a reimbursement received from the | ||||||
9 | insurance company equal to the amount of the expense | ||||||
10 | or loss (including expenses incurred by the insurance | ||||||
11 | company) that would have been taken into account as a | ||||||
12 | deduction for federal income tax purposes if the | ||||||
13 | expense or loss had been uninsured. If a taxpayer | ||||||
14 | makes the election provided for by this subparagraph | ||||||
15 | (T), the insurer to which the premiums were paid must | ||||||
16 | add back to income the amount subtracted by the | ||||||
17 | taxpayer pursuant to this subparagraph (T). This | ||||||
18 | subparagraph (T) is exempt from the provisions of | ||||||
19 | Section 250; and | ||||||
20 | (U) For taxable years beginning on or after | ||||||
21 | January 1, 2023, for any cannabis establishment | ||||||
22 | operating in this State and licensed under the | ||||||
23 | Cannabis Regulation and Tax Act or any cannabis | ||||||
24 | cultivation center or medical cannabis dispensing | ||||||
25 | organization operating in this State and licensed | ||||||
26 | under the Compassionate Use of Medical Cannabis |
| |||||||
| |||||||
1 | Program Act, an amount equal to the deductions that | ||||||
2 | were disallowed under Section 280E of the Internal | ||||||
3 | Revenue Code for the taxable year and that would not be | ||||||
4 | added back under this subsection. The provisions of | ||||||
5 | this subparagraph (U) are exempt from the provisions | ||||||
6 | of Section 250. | ||||||
7 | (e) Gross income; adjusted gross income; taxable income. | ||||||
8 | (1) In general. Subject to the provisions of paragraph | ||||||
9 | (2) and subsection (b)(3), for purposes of this Section | ||||||
10 | and Section 803(e), a taxpayer's gross income, adjusted | ||||||
11 | gross income, or taxable income for the taxable year shall | ||||||
12 | mean the amount of gross income, adjusted gross income or | ||||||
13 | taxable income properly reportable for federal income tax | ||||||
14 | purposes for the taxable year under the provisions of the | ||||||
15 | Internal Revenue Code. Taxable income may be less than | ||||||
16 | zero. However, for taxable years ending on or after | ||||||
17 | December 31, 1986, net operating loss carryforwards from | ||||||
18 | taxable years ending prior to December 31, 1986, may not | ||||||
19 | exceed the sum of federal taxable income for the taxable | ||||||
20 | year before net operating loss deduction, plus the excess | ||||||
21 | of addition modifications over subtraction modifications | ||||||
22 | for the taxable year. For taxable years ending prior to | ||||||
23 | December 31, 1986, taxable income may never be an amount | ||||||
24 | in excess of the net operating loss for the taxable year as | ||||||
25 | defined in subsections (c) and (d) of Section 172 of the |
| |||||||
| |||||||
1 | Internal Revenue Code, provided that when taxable income | ||||||
2 | of a corporation (other than a Subchapter S corporation), | ||||||
3 | trust, or estate is less than zero and addition | ||||||
4 | modifications, other than those provided by subparagraph | ||||||
5 | (E) of paragraph (2) of subsection (b) for corporations or | ||||||
6 | subparagraph (E) of paragraph (2) of subsection (c) for | ||||||
7 | trusts and estates, exceed subtraction modifications, an | ||||||
8 | addition modification must be made under those | ||||||
9 | subparagraphs for any other taxable year to which the | ||||||
10 | taxable income less than zero (net operating loss) is | ||||||
11 | applied under Section 172 of the Internal Revenue Code or | ||||||
12 | under subparagraph (E) of paragraph (2) of this subsection | ||||||
13 | (e) applied in conjunction with Section 172 of the | ||||||
14 | Internal Revenue Code. | ||||||
15 | (2) Special rule. For purposes of paragraph (1) of | ||||||
16 | this subsection, the taxable income properly reportable | ||||||
17 | for federal income tax purposes shall mean: | ||||||
18 | (A) Certain life insurance companies. In the case | ||||||
19 | of a life insurance company subject to the tax imposed | ||||||
20 | by Section 801 of the Internal Revenue Code, life | ||||||
21 | insurance company taxable income, plus the amount of | ||||||
22 | distribution from pre-1984 policyholder surplus | ||||||
23 | accounts as calculated under Section 815a of the | ||||||
24 | Internal Revenue Code; | ||||||
25 | (B) Certain other insurance companies. In the case | ||||||
26 | of mutual insurance companies subject to the tax |
| |||||||
| |||||||
1 | imposed by Section 831 of the Internal Revenue Code, | ||||||
2 | insurance company taxable income; | ||||||
3 | (C) Regulated investment companies. In the case of | ||||||
4 | a regulated investment company subject to the tax | ||||||
5 | imposed by Section 852 of the Internal Revenue Code, | ||||||
6 | investment company taxable income; | ||||||
7 | (D) Real estate investment trusts. In the case of | ||||||
8 | a real estate investment trust subject to the tax | ||||||
9 | imposed by Section 857 of the Internal Revenue Code, | ||||||
10 | real estate investment trust taxable income; | ||||||
11 | (E) Consolidated corporations. In the case of a | ||||||
12 | corporation which is a member of an affiliated group | ||||||
13 | of corporations filing a consolidated income tax | ||||||
14 | return for the taxable year for federal income tax | ||||||
15 | purposes, taxable income determined as if such | ||||||
16 | corporation had filed a separate return for federal | ||||||
17 | income tax purposes for the taxable year and each | ||||||
18 | preceding taxable year for which it was a member of an | ||||||
19 | affiliated group. For purposes of this subparagraph, | ||||||
20 | the taxpayer's separate taxable income shall be | ||||||
21 | determined as if the election provided by Section | ||||||
22 | 243(b)(2) of the Internal Revenue Code had been in | ||||||
23 | effect for all such years; | ||||||
24 | (F) Cooperatives. In the case of a cooperative | ||||||
25 | corporation or association, the taxable income of such | ||||||
26 | organization determined in accordance with the |
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1 | provisions of Section 1381 through 1388 of the | ||||||
2 | Internal Revenue Code, but without regard to the | ||||||
3 | prohibition against offsetting losses from patronage | ||||||
4 | activities against income from nonpatronage | ||||||
5 | activities; except that a cooperative corporation or | ||||||
6 | association may make an election to follow its federal | ||||||
7 | income tax treatment of patronage losses and | ||||||
8 | nonpatronage losses. In the event such election is | ||||||
9 | made, such losses shall be computed and carried over | ||||||
10 | in a manner consistent with subsection (a) of Section | ||||||
11 | 207 of this Act and apportioned by the apportionment | ||||||
12 | factor reported by the cooperative on its Illinois | ||||||
13 | income tax return filed for the taxable year in which | ||||||
14 | the losses are incurred. The election shall be | ||||||
15 | effective for all taxable years with original returns | ||||||
16 | due on or after the date of the election. In addition, | ||||||
17 | the cooperative may file an amended return or returns, | ||||||
18 | as allowed under this Act, to provide that the | ||||||
19 | election shall be effective for losses incurred or | ||||||
20 | carried forward for taxable years occurring prior to | ||||||
21 | the date of the election. Once made, the election may | ||||||
22 | only be revoked upon approval of the Director. The | ||||||
23 | Department shall adopt rules setting forth | ||||||
24 | requirements for documenting the elections and any | ||||||
25 | resulting Illinois net loss and the standards to be | ||||||
26 | used by the Director in evaluating requests to revoke |
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1 | elections. Public Act 96-932 is declaratory of | ||||||
2 | existing law; | ||||||
3 | (G) Subchapter S corporations. In the case of: (i) | ||||||
4 | a Subchapter S corporation for which there is in | ||||||
5 | effect an election for the taxable year under Section | ||||||
6 | 1362 of the Internal Revenue Code, the taxable income | ||||||
7 | of such corporation determined in accordance with | ||||||
8 | Section 1363(b) of the Internal Revenue Code, except | ||||||
9 | that taxable income shall take into account those | ||||||
10 | items which are required by Section 1363(b)(1) of the | ||||||
11 | Internal Revenue Code to be separately stated; and | ||||||
12 | (ii) a Subchapter S corporation for which there is in | ||||||
13 | effect a federal election to opt out of the provisions | ||||||
14 | of the Subchapter S Revision Act of 1982 and have | ||||||
15 | applied instead the prior federal Subchapter S rules | ||||||
16 | as in effect on July 1, 1982, the taxable income of | ||||||
17 | such corporation determined in accordance with the | ||||||
18 | federal Subchapter S rules as in effect on July 1, | ||||||
19 | 1982; and | ||||||
20 | (H) Partnerships. In the case of a partnership, | ||||||
21 | taxable income determined in accordance with Section | ||||||
22 | 703 of the Internal Revenue Code, except that taxable | ||||||
23 | income shall take into account those items which are | ||||||
24 | required by Section 703(a)(1) to be separately stated | ||||||
25 | but which would be taken into account by an individual | ||||||
26 | in calculating his taxable income. |
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1 | (3) Recapture of business expenses on disposition of | ||||||
2 | asset or business. Notwithstanding any other law to the | ||||||
3 | contrary, if in prior years income from an asset or | ||||||
4 | business has been classified as business income and in a | ||||||
5 | later year is demonstrated to be non-business income, then | ||||||
6 | all expenses, without limitation, deducted in such later | ||||||
7 | year and in the 2 immediately preceding taxable years | ||||||
8 | related to that asset or business that generated the | ||||||
9 | non-business income shall be added back and recaptured as | ||||||
10 | business income in the year of the disposition of the | ||||||
11 | asset or business. Such amount shall be apportioned to | ||||||
12 | Illinois using the greater of the apportionment fraction | ||||||
13 | computed for the business under Section 304 of this Act | ||||||
14 | for the taxable year or the average of the apportionment | ||||||
15 | fractions computed for the business under Section 304 of | ||||||
16 | this Act for the taxable year and for the 2 immediately | ||||||
17 | preceding taxable years. | ||||||
18 | (f) Valuation limitation amount. | ||||||
19 | (1) In general. The valuation limitation amount | ||||||
20 | referred to in subsections (a)(2)(G), (c)(2)(I) and | ||||||
21 | (d)(2)(E) is an amount equal to: | ||||||
22 | (A) The sum of the pre-August 1, 1969 appreciation | ||||||
23 | amounts (to the extent consisting of gain reportable | ||||||
24 | under the provisions of Section 1245 or 1250 of the | ||||||
25 | Internal Revenue Code) for all property in respect of |
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1 | which such gain was reported for the taxable year; | ||||||
2 | plus | ||||||
3 | (B) The lesser of (i) the sum of the pre-August 1, | ||||||
4 | 1969 appreciation amounts (to the extent consisting of | ||||||
5 | capital gain) for all property in respect of which | ||||||
6 | such gain was reported for federal income tax purposes | ||||||
7 | for the taxable year, or (ii) the net capital gain for | ||||||
8 | the taxable year, reduced in either case by any amount | ||||||
9 | of such gain included in the amount determined under | ||||||
10 | subsection (a)(2)(F) or (c)(2)(H). | ||||||
11 | (2) Pre-August 1, 1969 appreciation amount. | ||||||
12 | (A) If the fair market value of property referred | ||||||
13 | to in paragraph (1) was readily ascertainable on | ||||||
14 | August 1, 1969, the pre-August 1, 1969 appreciation | ||||||
15 | amount for such property is the lesser of (i) the | ||||||
16 | excess of such fair market value over the taxpayer's | ||||||
17 | basis (for determining gain) for such property on that | ||||||
18 | date (determined under the Internal Revenue Code as in | ||||||
19 | effect on that date), or (ii) the total gain realized | ||||||
20 | and reportable for federal income tax purposes in | ||||||
21 | respect of the sale, exchange or other disposition of | ||||||
22 | such property. | ||||||
23 | (B) If the fair market value of property referred | ||||||
24 | to in paragraph (1) was not readily ascertainable on | ||||||
25 | August 1, 1969, the pre-August 1, 1969 appreciation | ||||||
26 | amount for such property is that amount which bears |
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1 | the same ratio to the total gain reported in respect of | ||||||
2 | the property for federal income tax purposes for the | ||||||
3 | taxable year, as the number of full calendar months in | ||||||
4 | that part of the taxpayer's holding period for the | ||||||
5 | property ending July 31, 1969 bears to the number of | ||||||
6 | full calendar months in the taxpayer's entire holding | ||||||
7 | period for the property. | ||||||
8 | (C) The Department shall prescribe such | ||||||
9 | regulations as may be necessary to carry out the | ||||||
10 | purposes of this paragraph. | ||||||
11 | (g) Double deductions. Unless specifically provided | ||||||
12 | otherwise, nothing in this Section shall permit the same item | ||||||
13 | to be deducted more than once. | ||||||
14 | (h) Legislative intention. Except as expressly provided by | ||||||
15 | this Section there shall be no modifications or limitations on | ||||||
16 | the amounts of income, gain, loss or deduction taken into | ||||||
17 | account in determining gross income, adjusted gross income or | ||||||
18 | taxable income for federal income tax purposes for the taxable | ||||||
19 | year, or in the amount of such items entering into the | ||||||
20 | computation of base income and net income under this Act for | ||||||
21 | such taxable year, whether in respect of property values as of | ||||||
22 | August 1, 1969 or otherwise. | ||||||
23 | (Source: P.A. 102-16, eff. 6-17-21; 102-558, eff. 8-20-21; | ||||||
24 | 102-658, eff. 8-27-21; 102-813, eff. 5-13-22; 102-1112, eff. |
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1 | 12-21-22; 103-8, eff. 6-7-23; 103-478, eff. 1-1-24; revised | ||||||
2 | 9-26-23.) | ||||||
3 | Section 99. Effective date. This Act takes effect upon | ||||||
4 | becoming law. |