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1 | | AN ACT concerning revenue.
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2 | | Be it enacted by the People of the State of Illinois,
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3 | | represented in the General Assembly:
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4 | | Section 5. The Illinois Income Tax Act is amended by |
5 | | changing Sections 201, 214, 216, 218, 222, 224, 228, 229, 231, |
6 | | and 237 and by adding Section 251 as follows:
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7 | | (35 ILCS 5/201)
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8 | | Sec. 201. Tax imposed. |
9 | | (a) In general. A tax measured by net income is hereby |
10 | | imposed on every
individual, corporation, trust and estate for |
11 | | each taxable year ending
after July 31, 1969 on the privilege |
12 | | of earning or receiving income in or
as a resident of this |
13 | | State. Such tax shall be in addition to all other
occupation or |
14 | | privilege taxes imposed by this State or by any municipal
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15 | | corporation or political subdivision thereof. |
16 | | (b) Rates. The tax imposed by subsection (a) of this |
17 | | Section shall be
determined as follows, except as adjusted by |
18 | | subsection (d-1): |
19 | | (1) In the case of an individual, trust or estate, for |
20 | | taxable years
ending prior to July 1, 1989, an amount |
21 | | equal to 2 1/2% of the taxpayer's
net income for the |
22 | | taxable year. |
23 | | (2) In the case of an individual, trust or estate, for |
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1 | | taxable years
beginning prior to July 1, 1989 and ending |
2 | | after June 30, 1989, an amount
equal to the sum of (i) 2 |
3 | | 1/2% of the taxpayer's net income for the period
prior to |
4 | | July 1, 1989, as calculated under Section 202.3, and (ii) |
5 | | 3% of the
taxpayer's net income for the period after June |
6 | | 30, 1989, as calculated
under Section 202.3. |
7 | | (3) In the case of an individual, trust or estate, for |
8 | | taxable years
beginning after June 30, 1989, and ending |
9 | | prior to January 1, 2011, an amount equal to 3% of the |
10 | | taxpayer's net
income for the taxable year. |
11 | | (4) In the case of an individual, trust, or estate, |
12 | | for taxable years beginning prior to January 1, 2011, and |
13 | | ending after December 31, 2010, an amount equal to the sum |
14 | | of (i) 3% of the taxpayer's net income for the period prior |
15 | | to January 1, 2011, as calculated under Section 202.5, and |
16 | | (ii) 5% of the taxpayer's net income for the period after |
17 | | December 31, 2010, as calculated under Section 202.5. |
18 | | (5) In the case of an individual, trust, or estate, |
19 | | for taxable years beginning on or after January 1, 2011, |
20 | | and ending prior to January 1, 2015, an amount equal to 5% |
21 | | of the taxpayer's net income for the taxable year. |
22 | | (5.1) In the case of an individual, trust, or estate, |
23 | | for taxable years beginning prior to January 1, 2015, and |
24 | | ending after December 31, 2014, an amount equal to the sum |
25 | | of (i) 5% of the taxpayer's net income for the period prior |
26 | | to January 1, 2015, as calculated under Section 202.5, and |
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1 | | (ii) 3.75% of the taxpayer's net income for the period |
2 | | after December 31, 2014, as calculated under Section |
3 | | 202.5. |
4 | | (5.2) In the case of an individual, trust, or estate, |
5 | | for taxable years beginning on or after January 1, 2015, |
6 | | and ending prior to July 1, 2017, an amount equal to 3.75% |
7 | | of the taxpayer's net income for the taxable year. |
8 | | (5.3) In the case of an individual, trust, or estate, |
9 | | for taxable years beginning prior to July 1, 2017, and |
10 | | ending after June 30, 2017, an amount equal to the sum of |
11 | | (i) 3.75% of the taxpayer's net income for the period |
12 | | prior to July 1, 2017, as calculated under Section 202.5, |
13 | | and (ii) 4.95% of the taxpayer's net income for the period |
14 | | after June 30, 2017, as calculated under Section 202.5. |
15 | | (5.4) In the case of an individual, trust, or estate, |
16 | | for taxable years beginning on or after July 1, 2017, an |
17 | | amount equal to 4.95% of the taxpayer's net income for the |
18 | | taxable year. |
19 | | (6) In the case of a corporation, for taxable years
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20 | | ending prior to July 1, 1989, an amount equal to 4% of the
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21 | | taxpayer's net income for the taxable year. |
22 | | (7) In the case of a corporation, for taxable years |
23 | | beginning prior to
July 1, 1989 and ending after June 30, |
24 | | 1989, an amount equal to the sum of
(i) 4% of the |
25 | | taxpayer's net income for the period prior to July 1, |
26 | | 1989,
as calculated under Section 202.3, and (ii) 4.8% of |
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1 | | the taxpayer's net
income for the period after June 30, |
2 | | 1989, as calculated under Section
202.3. |
3 | | (8) In the case of a corporation, for taxable years |
4 | | beginning after
June 30, 1989, and ending prior to January |
5 | | 1, 2011, an amount equal to 4.8% of the taxpayer's net |
6 | | income for the
taxable year. |
7 | | (9) In the case of a corporation, for taxable years |
8 | | beginning prior to January 1, 2011, and ending after |
9 | | December 31, 2010, an amount equal to the sum of (i) 4.8% |
10 | | of the taxpayer's net income for the period prior to |
11 | | January 1, 2011, as calculated under Section 202.5, and |
12 | | (ii) 7% of the taxpayer's net income for the period after |
13 | | December 31, 2010, as calculated under Section 202.5. |
14 | | (10) In the case of a corporation, for taxable years |
15 | | beginning on or after January 1, 2011, and ending prior to |
16 | | January 1, 2015, an amount equal to 7% of the taxpayer's |
17 | | net income for the taxable year. |
18 | | (11) In the case of a corporation, for taxable years |
19 | | beginning prior to January 1, 2015, and ending after |
20 | | December 31, 2014, an amount equal to the sum of (i) 7% of |
21 | | the taxpayer's net income for the period prior to January |
22 | | 1, 2015, as calculated under Section 202.5, and (ii) 5.25% |
23 | | of the taxpayer's net income for the period after December |
24 | | 31, 2014, as calculated under Section 202.5. |
25 | | (12) In the case of a corporation, for taxable years |
26 | | beginning on or after January 1, 2015, and ending prior to |
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1 | | July 1, 2017, an amount equal to 5.25% of the taxpayer's |
2 | | net income for the taxable year. |
3 | | (13) In the case of a corporation, for taxable years |
4 | | beginning prior to July 1, 2017, and ending after June 30, |
5 | | 2017, an amount equal to the sum of (i) 5.25% of the |
6 | | taxpayer's net income for the period prior to July 1, |
7 | | 2017, as calculated under Section 202.5, and (ii) 7% of |
8 | | the taxpayer's net income for the period after June 30, |
9 | | 2017, as calculated under Section 202.5. |
10 | | (14) In the case of a corporation, for taxable years |
11 | | beginning on or after July 1, 2017, an amount equal to 7% |
12 | | of the taxpayer's net income for the taxable year. |
13 | | The rates under this subsection (b) are subject to the |
14 | | provisions of Section 201.5. |
15 | | (b-5) Surcharge; sale or exchange of assets, properties, |
16 | | and intangibles of organization gaming licensees. For each of |
17 | | taxable years 2019 through 2027, a surcharge is imposed on all |
18 | | taxpayers on income arising from the sale or exchange of |
19 | | capital assets, depreciable business property, real property |
20 | | used in the trade or business, and Section 197 intangibles (i) |
21 | | of an organization licensee under the Illinois Horse Racing |
22 | | Act of 1975 and (ii) of an organization gaming licensee under |
23 | | the Illinois Gambling Act. The amount of the surcharge is |
24 | | equal to the amount of federal income tax liability for the |
25 | | taxable year attributable to those sales and exchanges. The |
26 | | surcharge imposed shall not apply if: |
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1 | | (1) the organization gaming license, organization |
2 | | license, or racetrack property is transferred as a result |
3 | | of any of the following: |
4 | | (A) bankruptcy, a receivership, or a debt |
5 | | adjustment initiated by or against the initial |
6 | | licensee or the substantial owners of the initial |
7 | | licensee; |
8 | | (B) cancellation, revocation, or termination of |
9 | | any such license by the Illinois Gaming Board or the |
10 | | Illinois Racing Board; |
11 | | (C) a determination by the Illinois Gaming Board |
12 | | that transfer of the license is in the best interests |
13 | | of Illinois gaming; |
14 | | (D) the death of an owner of the equity interest in |
15 | | a licensee; |
16 | | (E) the acquisition of a controlling interest in |
17 | | the stock or substantially all of the assets of a |
18 | | publicly traded company; |
19 | | (F) a transfer by a parent company to a wholly |
20 | | owned subsidiary; or |
21 | | (G) the transfer or sale to or by one person to |
22 | | another person where both persons were initial owners |
23 | | of the license when the license was issued; or |
24 | | (2) the controlling interest in the organization |
25 | | gaming license, organization license, or racetrack |
26 | | property is transferred in a transaction to lineal |
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1 | | descendants in which no gain or loss is recognized or as a |
2 | | result of a transaction in accordance with Section 351 of |
3 | | the Internal Revenue Code in which no gain or loss is |
4 | | recognized; or |
5 | | (3) live horse racing was not conducted in 2010 at a |
6 | | racetrack located within 3 miles of the Mississippi River |
7 | | under a license issued pursuant to the Illinois Horse |
8 | | Racing Act of 1975. |
9 | | The transfer of an organization gaming license, |
10 | | organization license, or racetrack property by a person other |
11 | | than the initial licensee to receive the organization gaming |
12 | | license is not subject to a surcharge. The Department shall |
13 | | adopt rules necessary to implement and administer this |
14 | | subsection. |
15 | | (c) Personal Property Tax Replacement Income Tax.
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16 | | Beginning on July 1, 1979 and thereafter, in addition to such |
17 | | income
tax, there is also hereby imposed the Personal Property |
18 | | Tax Replacement
Income Tax measured by net income on every |
19 | | corporation (including Subchapter
S corporations), partnership |
20 | | and trust, for each taxable year ending after
June 30, 1979. |
21 | | Such taxes are imposed on the privilege of earning or
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22 | | receiving income in or as a resident of this State. The |
23 | | Personal Property
Tax Replacement Income Tax shall be in |
24 | | addition to the income tax imposed
by subsections (a) and (b) |
25 | | of this Section and in addition to all other
occupation or |
26 | | privilege taxes imposed by this State or by any municipal
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1 | | corporation or political subdivision thereof. |
2 | | (d) Additional Personal Property Tax Replacement Income |
3 | | Tax Rates.
The personal property tax replacement income tax |
4 | | imposed by this subsection
and subsection (c) of this Section |
5 | | in the case of a corporation, other
than a Subchapter S |
6 | | corporation and except as adjusted by subsection (d-1),
shall |
7 | | be an additional amount equal to
2.85% of such taxpayer's net |
8 | | income for the taxable year, except that
beginning on January |
9 | | 1, 1981, and thereafter, the rate of 2.85% specified
in this |
10 | | subsection shall be reduced to 2.5%, and in the case of a
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11 | | partnership, trust or a Subchapter S corporation shall be an |
12 | | additional
amount equal to 1.5% of such taxpayer's net income |
13 | | for the taxable year. |
14 | | (d-1) Rate reduction for certain foreign insurers. In the |
15 | | case of a
foreign insurer, as defined by Section 35A-5 of the |
16 | | Illinois Insurance Code,
whose state or country of domicile |
17 | | imposes on insurers domiciled in Illinois
a retaliatory tax |
18 | | (excluding any insurer
whose premiums from reinsurance assumed |
19 | | are 50% or more of its total insurance
premiums as determined |
20 | | under paragraph (2) of subsection (b) of Section 304,
except |
21 | | that for purposes of this determination premiums from |
22 | | reinsurance do
not include premiums from inter-affiliate |
23 | | reinsurance arrangements),
beginning with taxable years ending |
24 | | on or after December 31, 1999,
the sum of
the rates of tax |
25 | | imposed by subsections (b) and (d) shall be reduced (but not
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26 | | increased) to the rate at which the total amount of tax imposed |
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1 | | under this Act,
net of all credits allowed under this Act, |
2 | | shall equal (i) the total amount of
tax that would be imposed |
3 | | on the foreign insurer's net income allocable to
Illinois for |
4 | | the taxable year by such foreign insurer's state or country of
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5 | | domicile if that net income were subject to all income taxes |
6 | | and taxes
measured by net income imposed by such foreign |
7 | | insurer's state or country of
domicile, net of all credits |
8 | | allowed or (ii) a rate of zero if no such tax is
imposed on |
9 | | such income by the foreign insurer's state of domicile.
For |
10 | | the purposes of this subsection (d-1), an inter-affiliate |
11 | | includes a
mutual insurer under common management. |
12 | | (1) For the purposes of subsection (d-1), in no event |
13 | | shall the sum of the
rates of tax imposed by subsections |
14 | | (b) and (d) be reduced below the rate at
which the sum of: |
15 | | (A) the total amount of tax imposed on such |
16 | | foreign insurer under
this Act for a taxable year, net |
17 | | of all credits allowed under this Act, plus |
18 | | (B) the privilege tax imposed by Section 409 of |
19 | | the Illinois Insurance
Code, the fire insurance |
20 | | company tax imposed by Section 12 of the Fire
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21 | | Investigation Act, and the fire department taxes |
22 | | imposed under Section 11-10-1
of the Illinois |
23 | | Municipal Code, |
24 | | equals 1.25% for taxable years ending prior to December |
25 | | 31, 2003, or
1.75% for taxable years ending on or after |
26 | | December 31, 2003, of the net
taxable premiums written for |
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1 | | the taxable year,
as described by subsection (1) of |
2 | | Section 409 of the Illinois Insurance Code.
This paragraph |
3 | | will in no event increase the rates imposed under |
4 | | subsections
(b) and (d). |
5 | | (2) Any reduction in the rates of tax imposed by this |
6 | | subsection shall be
applied first against the rates |
7 | | imposed by subsection (b) and only after the
tax imposed |
8 | | by subsection (a) net of all credits allowed under this |
9 | | Section
other than the credit allowed under subsection (i) |
10 | | has been reduced to zero,
against the rates imposed by |
11 | | subsection (d). |
12 | | This subsection (d-1) is exempt from the provisions of |
13 | | Section 250. |
14 | | (e) Investment credit. A taxpayer shall be allowed a |
15 | | credit
against the Personal Property Tax Replacement Income |
16 | | Tax for
investment in qualified property. |
17 | | (1) A taxpayer shall be allowed a credit equal to .5% |
18 | | of
the basis of qualified property placed in service |
19 | | during the taxable year,
provided such property is placed |
20 | | in service on or after
July 1, 1984. There shall be allowed |
21 | | an additional credit equal
to .5% of the basis of |
22 | | qualified property placed in service during the
taxable |
23 | | year, provided such property is placed in service on or
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24 | | after July 1, 1986, and the taxpayer's base employment
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25 | | within Illinois has increased by 1% or more over the |
26 | | preceding year as
determined by the taxpayer's employment |
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1 | | records filed with the
Illinois Department of Employment |
2 | | Security. Taxpayers who are new to
Illinois shall be |
3 | | deemed to have met the 1% growth in base employment for
the |
4 | | first year in which they file employment records with the |
5 | | Illinois
Department of Employment Security. The provisions |
6 | | added to this Section by
Public Act 85-1200 (and restored |
7 | | by Public Act 87-895) shall be
construed as declaratory of |
8 | | existing law and not as a new enactment. If,
in any year, |
9 | | the increase in base employment within Illinois over the
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10 | | preceding year is less than 1%, the additional credit |
11 | | shall be limited to that
percentage times a fraction, the |
12 | | numerator of which is .5% and the denominator
of which is |
13 | | 1%, but shall not exceed .5%. The investment credit shall |
14 | | not be
allowed to the extent that it would reduce a |
15 | | taxpayer's liability in any tax
year below zero, nor may |
16 | | any credit for qualified property be allowed for any
year |
17 | | other than the year in which the property was placed in |
18 | | service in
Illinois. For tax years ending on or after |
19 | | December 31, 1987, and on or
before December 31, 1988, the |
20 | | credit shall be allowed for the tax year in
which the |
21 | | property is placed in service, or, if the amount of the |
22 | | credit
exceeds the tax liability for that year, whether it |
23 | | exceeds the original
liability or the liability as later |
24 | | amended, such excess may be carried
forward and applied to |
25 | | the tax liability of the 5 taxable years following
the |
26 | | excess credit years if the taxpayer (i) makes investments |
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1 | | which cause
the creation of a minimum of 2,000 full-time |
2 | | equivalent jobs in Illinois,
(ii) is located in an |
3 | | enterprise zone established pursuant to the Illinois
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4 | | Enterprise Zone Act and (iii) is certified by the |
5 | | Department of Commerce
and Community Affairs (now |
6 | | Department of Commerce and Economic Opportunity) as |
7 | | complying with the requirements specified in
clause (i) |
8 | | and (ii) by July 1, 1986. The Department of Commerce and
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9 | | Community Affairs (now Department of Commerce and Economic |
10 | | Opportunity) shall notify the Department of Revenue of all |
11 | | such
certifications immediately. For tax years ending |
12 | | after December 31, 1988,
the credit shall be allowed for |
13 | | the tax year in which the property is
placed in service, |
14 | | or, if the amount of the credit exceeds the tax
liability |
15 | | for that year, whether it exceeds the original liability |
16 | | or the
liability as later amended, such excess may be |
17 | | carried forward and applied
to the tax liability of the 5 |
18 | | taxable years following the excess credit
years. The |
19 | | credit shall be applied to the earliest year for which |
20 | | there is
a liability. If there is credit from more than one |
21 | | tax year that is
available to offset a liability, earlier |
22 | | credit shall be applied first. |
23 | | (2) The term "qualified property" means property |
24 | | which: |
25 | | (A) is tangible, whether new or used, including |
26 | | buildings and structural
components of buildings and |
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1 | | signs that are real property, but not including
land |
2 | | or improvements to real property that are not a |
3 | | structural component of a
building such as |
4 | | landscaping, sewer lines, local access roads, fencing, |
5 | | parking
lots, and other appurtenances; |
6 | | (B) is depreciable pursuant to Section 167 of the |
7 | | Internal Revenue Code,
except that "3-year property" |
8 | | as defined in Section 168(c)(2)(A) of that
Code is not |
9 | | eligible for the credit provided by this subsection |
10 | | (e); |
11 | | (C) is acquired by purchase as defined in Section |
12 | | 179(d) of
the Internal Revenue Code; |
13 | | (D) is used in Illinois by a taxpayer who is |
14 | | primarily engaged in
manufacturing, or in mining coal |
15 | | or fluorite, or in retailing, or was placed in service |
16 | | on or after July 1, 2006 in a River Edge Redevelopment |
17 | | Zone established pursuant to the River Edge |
18 | | Redevelopment Zone Act; and |
19 | | (E) has not previously been used in Illinois in |
20 | | such a manner and by
such a person as would qualify for |
21 | | the credit provided by this subsection
(e) or |
22 | | subsection (f). |
23 | | (3) For purposes of this subsection (e), |
24 | | "manufacturing" means
the material staging and production |
25 | | of tangible personal property by
procedures commonly |
26 | | regarded as manufacturing, processing, fabrication, or
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1 | | assembling which changes some existing material into new |
2 | | shapes, new
qualities, or new combinations. For purposes |
3 | | of this subsection
(e) the term "mining" shall have the |
4 | | same meaning as the term "mining" in
Section 613(c) of the |
5 | | Internal Revenue Code. For purposes of this subsection
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6 | | (e), the term "retailing" means the sale of tangible |
7 | | personal property for use or consumption and not for |
8 | | resale, or
services rendered in conjunction with the sale |
9 | | of tangible personal property for use or consumption and |
10 | | not for resale. For purposes of this subsection (e), |
11 | | "tangible personal property" has the same meaning as when |
12 | | that term is used in the Retailers' Occupation Tax Act, |
13 | | and, for taxable years ending after December 31, 2008, |
14 | | does not include the generation, transmission, or |
15 | | distribution of electricity. |
16 | | (4) The basis of qualified property shall be the basis
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17 | | used to compute the depreciation deduction for federal |
18 | | income tax purposes. |
19 | | (5) If the basis of the property for federal income |
20 | | tax depreciation
purposes is increased after it has been |
21 | | placed in service in Illinois by
the taxpayer, the amount |
22 | | of such increase shall be deemed property placed
in |
23 | | service on the date of such increase in basis. |
24 | | (6) The term "placed in service" shall have the same
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25 | | meaning as under Section 46 of the Internal Revenue Code. |
26 | | (7) If during any taxable year, any property ceases to
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1 | | be qualified property in the hands of the taxpayer within |
2 | | 48 months after
being placed in service, or the situs of |
3 | | any qualified property is
moved outside Illinois within 48 |
4 | | months after being placed in service, the
Personal |
5 | | Property Tax Replacement Income Tax for such taxable year |
6 | | shall be
increased. Such increase shall be determined by |
7 | | (i) recomputing the
investment credit which would have |
8 | | been allowed for the year in which
credit for such |
9 | | property was originally allowed by eliminating such
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10 | | property from such computation and, (ii) subtracting such |
11 | | recomputed credit
from the amount of credit previously |
12 | | allowed. For the purposes of this
paragraph (7), a |
13 | | reduction of the basis of qualified property resulting
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14 | | from a redetermination of the purchase price shall be |
15 | | deemed a disposition
of qualified property to the extent |
16 | | of such reduction. |
17 | | (8) Unless the investment credit is extended by law, |
18 | | the
basis of qualified property shall not include costs |
19 | | incurred after
December 31, 2018, except for costs |
20 | | incurred pursuant to a binding
contract entered into on or |
21 | | before December 31, 2018. |
22 | | (9) Each taxable year ending before December 31, 2000, |
23 | | a partnership may
elect to pass through to its
partners |
24 | | the credits to which the partnership is entitled under |
25 | | this subsection
(e) for the taxable year. A partner may |
26 | | use the credit allocated to him or her
under this |
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1 | | paragraph only against the tax imposed in subsections (c) |
2 | | and (d) of
this Section. If the partnership makes that |
3 | | election, those credits shall be
allocated among the |
4 | | partners in the partnership in accordance with the rules
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5 | | set forth in Section 704(b) of the Internal Revenue Code, |
6 | | and the rules
promulgated under that Section, and the |
7 | | allocated amount of the credits shall
be allowed to the |
8 | | partners for that taxable year. The partnership shall make
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9 | | this election on its Personal Property Tax Replacement |
10 | | Income Tax return for
that taxable year. The election to |
11 | | pass through the credits shall be
irrevocable. |
12 | | For taxable years ending on or after December 31, |
13 | | 2000, a
partner that qualifies its
partnership for a |
14 | | subtraction under subparagraph (I) of paragraph (2) of
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15 | | subsection (d) of Section 203 or a shareholder that |
16 | | qualifies a Subchapter S
corporation for a subtraction |
17 | | under subparagraph (S) of paragraph (2) of
subsection (b) |
18 | | of Section 203 shall be allowed a credit under this |
19 | | subsection
(e) equal to its share of the credit earned |
20 | | under this subsection (e) during
the taxable year by the |
21 | | partnership or Subchapter S corporation, determined in
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22 | | accordance with the determination of income and |
23 | | distributive share of
income under Sections 702 and 704 |
24 | | and Subchapter S of the Internal Revenue
Code. This |
25 | | paragraph is exempt from the provisions of Section 250. |
26 | | (f) Investment credit; Enterprise Zone; River Edge |
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1 | | Redevelopment Zone. |
2 | | (1) A taxpayer shall be allowed a credit against the |
3 | | tax imposed
by subsections (a) and (b) of this Section for |
4 | | investment in qualified
property which is placed in |
5 | | service in an Enterprise Zone created
pursuant to the |
6 | | Illinois Enterprise Zone Act or, for property placed in |
7 | | service on or after July 1, 2006, a River Edge |
8 | | Redevelopment Zone established pursuant to the River Edge |
9 | | Redevelopment Zone Act. For partners, shareholders
of |
10 | | Subchapter S corporations, and owners of limited liability |
11 | | companies,
if the liability company is treated as a |
12 | | partnership for purposes of
federal and State income |
13 | | taxation, for taxable years ending before December 31, |
14 | | 2023, there shall be allowed a credit under
this |
15 | | subsection (f) to be determined in accordance with the |
16 | | determination
of income and distributive share of income |
17 | | under Sections 702 and 704 and
Subchapter S of the |
18 | | Internal Revenue Code. For taxable years ending on or |
19 | | after December 31, 2023, for partners and shareholders
of |
20 | | Subchapter S corporations, the provisions of Section 251 |
21 | | shall apply with respect to the credit under this |
22 | | subsection. The credit shall be .5% of the
basis for such |
23 | | property. The credit shall be available only in the |
24 | | taxable
year in which the property is placed in service in |
25 | | the Enterprise Zone or River Edge Redevelopment Zone and
|
26 | | shall not be allowed to the extent that it would reduce a |
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1 | | taxpayer's
liability for the tax imposed by subsections |
2 | | (a) and (b) of this Section to
below zero. For tax years |
3 | | ending on or after December 31, 1985, the credit
shall be |
4 | | allowed for the tax year in which the property is placed in
|
5 | | service, or, if the amount of the credit exceeds the tax |
6 | | liability for that
year, whether it exceeds the original |
7 | | liability or the liability as later
amended, such excess |
8 | | may be carried forward and applied to the tax
liability of |
9 | | the 5 taxable years following the excess credit year.
The |
10 | | credit shall be applied to the earliest year for which |
11 | | there is a
liability. If there is credit from more than one |
12 | | tax year that is available
to offset a liability, the |
13 | | credit accruing first in time shall be applied
first. |
14 | | (2) The term qualified property means property which: |
15 | | (A) is tangible, whether new or used, including |
16 | | buildings and
structural components of buildings; |
17 | | (B) is depreciable pursuant to Section 167 of the |
18 | | Internal Revenue
Code, except that "3-year property" |
19 | | as defined in Section 168(c)(2)(A) of
that Code is not |
20 | | eligible for the credit provided by this subsection |
21 | | (f); |
22 | | (C) is acquired by purchase as defined in Section |
23 | | 179(d) of
the Internal Revenue Code; |
24 | | (D) is used in the Enterprise Zone or River Edge |
25 | | Redevelopment Zone by the taxpayer; and |
26 | | (E) has not been previously used in Illinois in |
|
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1 | | such a manner and by
such a person as would qualify for |
2 | | the credit provided by this subsection
(f) or |
3 | | subsection (e). |
4 | | (3) The basis of qualified property shall be the basis |
5 | | used to compute
the depreciation deduction for federal |
6 | | income tax purposes. |
7 | | (4) If the basis of the property for federal income |
8 | | tax depreciation
purposes is increased after it has been |
9 | | placed in service in the Enterprise
Zone or River Edge |
10 | | Redevelopment Zone by the taxpayer, the amount of such |
11 | | increase shall be deemed property
placed in service on the |
12 | | date of such increase in basis. |
13 | | (5) The term "placed in service" shall have the same |
14 | | meaning as under
Section 46 of the Internal Revenue Code. |
15 | | (6) If during any taxable year, any property ceases to |
16 | | be qualified
property in the hands of the taxpayer within |
17 | | 48 months after being placed
in service, or the situs of |
18 | | any qualified property is moved outside the
Enterprise |
19 | | Zone or River Edge Redevelopment Zone within 48 months |
20 | | after being placed in service, the tax
imposed under |
21 | | subsections (a) and (b) of this Section for such taxable |
22 | | year
shall be increased. Such increase shall be determined |
23 | | by (i) recomputing
the investment credit which would have |
24 | | been allowed for the year in which
credit for such |
25 | | property was originally allowed by eliminating such
|
26 | | property from such computation, and (ii) subtracting such |
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1 | | recomputed credit
from the amount of credit previously |
2 | | allowed. For the purposes of this
paragraph (6), a |
3 | | reduction of the basis of qualified property resulting
|
4 | | from a redetermination of the purchase price shall be |
5 | | deemed a disposition
of qualified property to the extent |
6 | | of such reduction. |
7 | | (7) There shall be allowed an additional credit equal |
8 | | to 0.5% of the basis of qualified property placed in |
9 | | service during the taxable year in a River Edge |
10 | | Redevelopment Zone, provided such property is placed in |
11 | | service on or after July 1, 2006, and the taxpayer's base |
12 | | employment within Illinois has increased by 1% or more |
13 | | over the preceding year as determined by the taxpayer's |
14 | | employment records filed with the Illinois Department of |
15 | | Employment Security. Taxpayers who are new to Illinois |
16 | | shall be deemed to have met the 1% growth in base |
17 | | employment for the first year in which they file |
18 | | employment records with the Illinois Department of |
19 | | Employment Security. If, in any year, the increase in base |
20 | | employment within Illinois over the preceding year is less |
21 | | than 1%, the additional credit shall be limited to that |
22 | | percentage times a fraction, the numerator of which is |
23 | | 0.5% and the denominator of which is 1%, but shall not |
24 | | exceed 0.5%.
|
25 | | (8) For taxable years beginning on or after January 1, |
26 | | 2021, there shall be allowed an Enterprise Zone |
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1 | | construction jobs credit against the taxes imposed under |
2 | | subsections (a) and (b) of this Section as provided in |
3 | | Section 13 of the Illinois Enterprise Zone Act. |
4 | | The credit or credits may not reduce the taxpayer's |
5 | | liability to less than zero. If the amount of the credit or |
6 | | credits exceeds the taxpayer's liability, the excess may |
7 | | be carried forward and applied against the taxpayer's |
8 | | liability in succeeding calendar years in the same manner |
9 | | provided under paragraph (4) of Section 211 of this Act. |
10 | | The credit or credits shall be applied to the earliest |
11 | | year for which there is a tax liability. If there are |
12 | | credits from more than one taxable year that are available |
13 | | to offset a liability, the earlier credit shall be applied |
14 | | first. |
15 | | For partners, shareholders of Subchapter S |
16 | | corporations, and owners of limited liability companies, |
17 | | if the liability company is treated as a partnership for |
18 | | the purposes of federal and State income taxation, for |
19 | | taxable years ending before December 31, 2023, there shall |
20 | | be allowed a credit under this Section to be determined in |
21 | | accordance with the determination of income and |
22 | | distributive share of income under Sections 702 and 704 |
23 | | and Subchapter S of the Internal Revenue Code. For taxable |
24 | | years ending on or after December 31, 2023, for partners |
25 | | and shareholders
of Subchapter S corporations, the |
26 | | provisions of Section 251 shall apply with respect to the |
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1 | | credit under this subsection. |
2 | | The total aggregate amount of credits awarded under |
3 | | the Blue Collar Jobs Act (Article 20 of Public Act 101-9) |
4 | | shall not exceed $20,000,000 in any State fiscal year. |
5 | | This paragraph (8) is exempt from the provisions of |
6 | | Section 250. |
7 | | (g) (Blank). |
8 | | (h) Investment credit; High Impact Business. |
9 | | (1) Subject to subsections (b) and (b-5) of Section
|
10 | | 5.5 of the Illinois Enterprise Zone Act, a taxpayer shall |
11 | | be allowed a credit
against the tax imposed by subsections |
12 | | (a) and (b) of this Section for
investment in qualified
|
13 | | property which is placed in service by a Department of |
14 | | Commerce and Economic Opportunity
designated High Impact |
15 | | Business. The credit shall be .5% of the basis
for such |
16 | | property. The credit shall not be available (i) until the |
17 | | minimum
investments in qualified property set forth in |
18 | | subdivision (a)(3)(A) of
Section 5.5 of the Illinois
|
19 | | Enterprise Zone Act have been satisfied
or (ii) until the |
20 | | time authorized in subsection (b-5) of the Illinois
|
21 | | Enterprise Zone Act for entities designated as High Impact |
22 | | Businesses under
subdivisions (a)(3)(B), (a)(3)(C), and |
23 | | (a)(3)(D) of Section 5.5 of the Illinois
Enterprise Zone |
24 | | Act, and shall not be allowed to the extent that it would
|
25 | | reduce a taxpayer's liability for the tax imposed by |
26 | | subsections (a) and (b) of
this Section to below zero. The |
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1 | | credit applicable to such investments shall be
taken in |
2 | | the taxable year in which such investments have been |
3 | | completed. The
credit for additional investments beyond |
4 | | the minimum investment by a designated
high impact |
5 | | business authorized under subdivision (a)(3)(A) of Section |
6 | | 5.5 of
the Illinois Enterprise Zone Act shall be available |
7 | | only in the taxable year in
which the property is placed in |
8 | | service and shall not be allowed to the extent
that it |
9 | | would reduce a taxpayer's liability for the tax imposed by |
10 | | subsections
(a) and (b) of this Section to below zero.
For |
11 | | tax years ending on or after December 31, 1987, the credit |
12 | | shall be
allowed for the tax year in which the property is |
13 | | placed in service, or, if
the amount of the credit exceeds |
14 | | the tax liability for that year, whether
it exceeds the |
15 | | original liability or the liability as later amended, such
|
16 | | excess may be carried forward and applied to the tax |
17 | | liability of the 5
taxable years following the excess |
18 | | credit year. The credit shall be
applied to the earliest |
19 | | year for which there is a liability. If there is
credit |
20 | | from more than one tax year that is available to offset a |
21 | | liability,
the credit accruing first in time shall be |
22 | | applied first. |
23 | | Changes made in this subdivision (h)(1) by Public Act |
24 | | 88-670
restore changes made by Public Act 85-1182 and |
25 | | reflect existing law. |
26 | | (2) The term qualified property means property which: |
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|
1 | | (A) is tangible, whether new or used, including |
2 | | buildings and
structural components of buildings; |
3 | | (B) is depreciable pursuant to Section 167 of the |
4 | | Internal Revenue
Code, except that "3-year property" |
5 | | as defined in Section 168(c)(2)(A) of
that Code is not |
6 | | eligible for the credit provided by this subsection |
7 | | (h); |
8 | | (C) is acquired by purchase as defined in Section |
9 | | 179(d) of the
Internal Revenue Code; and |
10 | | (D) is not eligible for the Enterprise Zone |
11 | | Investment Credit provided
by subsection (f) of this |
12 | | Section. |
13 | | (3) The basis of qualified property shall be the basis |
14 | | used to compute
the depreciation deduction for federal |
15 | | income tax purposes. |
16 | | (4) If the basis of the property for federal income |
17 | | tax depreciation
purposes is increased after it has been |
18 | | placed in service in a federally
designated Foreign Trade |
19 | | Zone or Sub-Zone located in Illinois by the taxpayer,
the |
20 | | amount of such increase shall be deemed property placed in |
21 | | service on
the date of such increase in basis. |
22 | | (5) The term "placed in service" shall have the same |
23 | | meaning as under
Section 46 of the Internal Revenue Code. |
24 | | (6) If during any taxable year ending on or before |
25 | | December 31, 1996,
any property ceases to be qualified
|
26 | | property in the hands of the taxpayer within 48 months |
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|
1 | | after being placed
in service, or the situs of any |
2 | | qualified property is moved outside
Illinois within 48 |
3 | | months after being placed in service, the tax imposed
|
4 | | under subsections (a) and (b) of this Section for such |
5 | | taxable year shall
be increased. Such increase shall be |
6 | | determined by (i) recomputing the
investment credit which |
7 | | would have been allowed for the year in which
credit for |
8 | | such property was originally allowed by eliminating such
|
9 | | property from such computation, and (ii) subtracting such |
10 | | recomputed credit
from the amount of credit previously |
11 | | allowed. For the purposes of this
paragraph (6), a |
12 | | reduction of the basis of qualified property resulting
|
13 | | from a redetermination of the purchase price shall be |
14 | | deemed a disposition
of qualified property to the extent |
15 | | of such reduction. |
16 | | (7) Beginning with tax years ending after December 31, |
17 | | 1996, if a
taxpayer qualifies for the credit under this |
18 | | subsection (h) and thereby is
granted a tax abatement and |
19 | | the taxpayer relocates its entire facility in
violation of |
20 | | the explicit terms and length of the contract under |
21 | | Section
18-183 of the Property Tax Code, the tax imposed |
22 | | under subsections
(a) and (b) of this Section shall be |
23 | | increased for the taxable year
in which the taxpayer |
24 | | relocated its facility by an amount equal to the
amount of |
25 | | credit received by the taxpayer under this subsection (h). |
26 | | (h-5) High Impact Business construction jobs credit. For |
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|
1 | | taxable years beginning on or after January 1, 2021, there |
2 | | shall also be allowed a High Impact Business construction jobs |
3 | | credit against the tax imposed under subsections (a) and (b) |
4 | | of this Section as provided in subsections (i) and (j) of |
5 | | Section 5.5 of the Illinois Enterprise Zone Act. |
6 | | The credit or credits may not reduce the taxpayer's |
7 | | liability to less than zero. If the amount of the credit or |
8 | | credits exceeds the taxpayer's liability, the excess may be |
9 | | carried forward and applied against the taxpayer's liability |
10 | | in succeeding calendar years in the manner provided under |
11 | | paragraph (4) of Section 211 of this Act. The credit or credits |
12 | | shall be applied to the earliest year for which there is a tax |
13 | | liability. If there are credits from more than one taxable |
14 | | year that are available to offset a liability, the earlier |
15 | | credit shall be applied first. |
16 | | For partners, shareholders of Subchapter S corporations, |
17 | | and owners of limited liability companies, for taxable years |
18 | | ending before December 31, 2023, if the liability company is |
19 | | treated as a partnership for the purposes of federal and State |
20 | | income taxation, there shall be allowed a credit under this |
21 | | Section to be determined in accordance with the determination |
22 | | of income and distributive share of income under Sections 702 |
23 | | and 704 and Subchapter S of the Internal Revenue Code. For |
24 | | taxable years ending on or after December 31, 2023, for |
25 | | partners and shareholders
of Subchapter S corporations, the |
26 | | provisions of Section 251 shall apply with respect to the |
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1 | | credit under this subsection. |
2 | | The total aggregate amount of credits awarded under the |
3 | | Blue Collar Jobs Act (Article 20 of Public Act 101-9) shall not |
4 | | exceed $20,000,000 in any State fiscal year. |
5 | | This subsection (h-5) is exempt from the provisions of |
6 | | Section 250. |
7 | | (i) Credit for Personal Property Tax Replacement Income |
8 | | Tax.
For tax years ending prior to December 31, 2003, a credit |
9 | | shall be allowed
against the tax imposed by
subsections (a) |
10 | | and (b) of this Section for the tax imposed by subsections (c)
|
11 | | and (d) of this Section. This credit shall be computed by |
12 | | multiplying the tax
imposed by subsections (c) and (d) of this |
13 | | Section by a fraction, the numerator
of which is base income |
14 | | allocable to Illinois and the denominator of which is
Illinois |
15 | | base income, and further multiplying the product by the tax |
16 | | rate
imposed by subsections (a) and (b) of this Section. |
17 | | Any credit earned on or after December 31, 1986 under
this |
18 | | subsection which is unused in the year
the credit is computed |
19 | | because it exceeds the tax liability imposed by
subsections |
20 | | (a) and (b) for that year (whether it exceeds the original
|
21 | | liability or the liability as later amended) may be carried |
22 | | forward and
applied to the tax liability imposed by |
23 | | subsections (a) and (b) of the 5
taxable years following the |
24 | | excess credit year, provided that no credit may
be carried |
25 | | forward to any year ending on or
after December 31, 2003. This |
26 | | credit shall be
applied first to the earliest year for which |
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|
1 | | there is a liability. If
there is a credit under this |
2 | | subsection from more than one tax year that is
available to |
3 | | offset a liability the earliest credit arising under this
|
4 | | subsection shall be applied first. |
5 | | If, during any taxable year ending on or after December |
6 | | 31, 1986, the
tax imposed by subsections (c) and (d) of this |
7 | | Section for which a taxpayer
has claimed a credit under this |
8 | | subsection (i) is reduced, the amount of
credit for such tax |
9 | | shall also be reduced. Such reduction shall be
determined by |
10 | | recomputing the credit to take into account the reduced tax
|
11 | | imposed by subsections (c) and (d). If any portion of the
|
12 | | reduced amount of credit has been carried to a different |
13 | | taxable year, an
amended return shall be filed for such |
14 | | taxable year to reduce the amount of
credit claimed. |
15 | | (j) Training expense credit. Beginning with tax years |
16 | | ending on or
after December 31, 1986 and prior to December 31, |
17 | | 2003, a taxpayer shall be
allowed a credit against the
tax |
18 | | imposed by subsections (a) and (b) under this Section
for all |
19 | | amounts paid or accrued, on behalf of all persons
employed by |
20 | | the taxpayer in Illinois or Illinois residents employed
|
21 | | outside of Illinois by a taxpayer, for educational or |
22 | | vocational training in
semi-technical or technical fields or |
23 | | semi-skilled or skilled fields, which
were deducted from gross |
24 | | income in the computation of taxable income. The
credit |
25 | | against the tax imposed by subsections (a) and (b) shall be |
26 | | 1.6% of
such training expenses. For partners, shareholders of |
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1 | | subchapter S
corporations, and owners of limited liability |
2 | | companies, if the liability
company is treated as a |
3 | | partnership for purposes of federal and State income
taxation, |
4 | | for taxable years ending before December 31, 2023, there shall |
5 | | be allowed a credit under this subsection (j) to be
determined |
6 | | in accordance with the determination of income and |
7 | | distributive
share of income under Sections 702 and 704 and |
8 | | subchapter S of the Internal
Revenue Code. For taxable years |
9 | | ending on or after December 31, 2023, for partners and |
10 | | shareholders
of Subchapter S corporations, the provisions of |
11 | | Section 251 shall apply with respect to the credit under this |
12 | | subsection. |
13 | | Any credit allowed under this subsection which is unused |
14 | | in the year
the credit is earned may be carried forward to each |
15 | | of the 5 taxable
years following the year for which the credit |
16 | | is first computed until it is
used. This credit shall be |
17 | | applied first to the earliest year for which
there is a |
18 | | liability. If there is a credit under this subsection from |
19 | | more
than one tax year that is available to offset a liability, |
20 | | the earliest
credit arising under this subsection shall be |
21 | | applied first. No carryforward
credit may be claimed in any |
22 | | tax year ending on or after
December 31, 2003. |
23 | | (k) Research and development credit. For tax years ending |
24 | | after July 1, 1990 and prior to
December 31, 2003, and |
25 | | beginning again for tax years ending on or after December 31, |
26 | | 2004, and ending prior to January 1, 2027, a taxpayer shall be
|
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1 | | allowed a credit against the tax imposed by subsections (a) |
2 | | and (b) of this
Section for increasing research activities in |
3 | | this State. The credit
allowed against the tax imposed by |
4 | | subsections (a) and (b) shall be equal
to 6 1/2% of the |
5 | | qualifying expenditures for increasing research activities
in |
6 | | this State. For partners, shareholders of subchapter S |
7 | | corporations, and
owners of limited liability companies, if |
8 | | the liability company is treated as a
partnership for purposes |
9 | | of federal and State income taxation, for taxable years ending |
10 | | before December 31, 2023, there shall be
allowed a credit |
11 | | under this subsection to be determined in accordance with the
|
12 | | determination of income and distributive share of income under |
13 | | Sections 702 and
704 and subchapter S of the Internal Revenue |
14 | | Code. For taxable years ending on or after December 31, 2023, |
15 | | for partners and shareholders
of Subchapter S corporations, |
16 | | the provisions of Section 251 shall apply with respect to the |
17 | | credit under this subsection. |
18 | | For purposes of this subsection, "qualifying expenditures" |
19 | | means the
qualifying expenditures as defined for the federal |
20 | | credit for increasing
research activities which would be |
21 | | allowable under Section 41 of the
Internal Revenue Code and |
22 | | which are conducted in this State, "qualifying
expenditures |
23 | | for increasing research activities in this State" means the
|
24 | | excess of qualifying expenditures for the taxable year in |
25 | | which incurred
over qualifying expenditures for the base |
26 | | period, "qualifying expenditures
for the base period" means |
|
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1 | | the average of the qualifying expenditures for
each year in |
2 | | the base period, and "base period" means the 3 taxable years
|
3 | | immediately preceding the taxable year for which the |
4 | | determination is
being made. |
5 | | Any credit in excess of the tax liability for the taxable |
6 | | year
may be carried forward. A taxpayer may elect to have the
|
7 | | unused credit shown on its final completed return carried over |
8 | | as a credit
against the tax liability for the following 5 |
9 | | taxable years or until it has
been fully used, whichever |
10 | | occurs first; provided that no credit earned in a tax year |
11 | | ending prior to December 31, 2003 may be carried forward to any |
12 | | year ending on or after December 31, 2003. |
13 | | If an unused credit is carried forward to a given year from |
14 | | 2 or more
earlier years, that credit arising in the earliest |
15 | | year will be applied
first against the tax liability for the |
16 | | given year. If a tax liability for
the given year still |
17 | | remains, the credit from the next earliest year will
then be |
18 | | applied, and so on, until all credits have been used or no tax
|
19 | | liability for the given year remains. Any remaining unused |
20 | | credit or
credits then will be carried forward to the next |
21 | | following year in which a
tax liability is incurred, except |
22 | | that no credit can be carried forward to
a year which is more |
23 | | than 5 years after the year in which the expense for
which the |
24 | | credit is given was incurred. |
25 | | No inference shall be drawn from Public Act 91-644 in |
26 | | construing this Section for taxable years beginning before |
|
| | SB2047 Engrossed | - 32 - | LRB103 00133 HLH 45137 b |
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1 | | January
1, 1999. |
2 | | It is the intent of the General Assembly that the research |
3 | | and development credit under this subsection (k) shall apply |
4 | | continuously for all tax years ending on or after December 31, |
5 | | 2004 and ending prior to January 1, 2027, including, but not |
6 | | limited to, the period beginning on January 1, 2016 and ending |
7 | | on July 6, 2017 (the effective date of Public Act 100-22). All |
8 | | actions taken in reliance on the continuation of the credit |
9 | | under this subsection (k) by any taxpayer are hereby |
10 | | validated. |
11 | | (l) Environmental Remediation Tax Credit. |
12 | | (i) For tax years ending after December 31, 1997 and |
13 | | on or before
December 31, 2001, a taxpayer shall be |
14 | | allowed a credit against the tax
imposed by subsections |
15 | | (a) and (b) of this Section for certain amounts paid
for |
16 | | unreimbursed eligible remediation costs, as specified in |
17 | | this subsection.
For purposes of this Section, |
18 | | "unreimbursed eligible remediation costs" means
costs |
19 | | approved by the Illinois Environmental Protection Agency |
20 | | ("Agency") under
Section 58.14 of the Environmental |
21 | | Protection Act that were paid in performing
environmental |
22 | | remediation at a site for which a No Further Remediation |
23 | | Letter
was issued by the Agency and recorded under Section |
24 | | 58.10 of the Environmental
Protection Act. The credit must |
25 | | be claimed for the taxable year in which
Agency approval |
26 | | of the eligible remediation costs is granted. The credit |
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| | SB2047 Engrossed | - 33 - | LRB103 00133 HLH 45137 b |
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1 | | is
not available to any taxpayer if the taxpayer or any |
2 | | related party caused or
contributed to, in any material |
3 | | respect, a release of regulated substances on,
in, or |
4 | | under the site that was identified and addressed by the |
5 | | remedial
action pursuant to the Site Remediation Program |
6 | | of the Environmental Protection
Act. After the Pollution |
7 | | Control Board rules are adopted pursuant to the
Illinois |
8 | | Administrative Procedure Act for the administration and |
9 | | enforcement of
Section 58.9 of the Environmental |
10 | | Protection Act, determinations as to credit
availability |
11 | | for purposes of this Section shall be made consistent with |
12 | | those
rules. For purposes of this Section, "taxpayer" |
13 | | includes a person whose tax
attributes the taxpayer has |
14 | | succeeded to under Section 381 of the Internal
Revenue |
15 | | Code and "related party" includes the persons disallowed a |
16 | | deduction
for losses by paragraphs (b), (c), and (f)(1) of |
17 | | Section 267 of the Internal
Revenue Code by virtue of |
18 | | being a related taxpayer, as well as any of its
partners. |
19 | | The credit allowed against the tax imposed by subsections |
20 | | (a) and
(b) shall be equal to 25% of the unreimbursed |
21 | | eligible remediation costs in
excess of $100,000 per site, |
22 | | except that the $100,000 threshold shall not apply
to any |
23 | | site contained in an enterprise zone as determined by the |
24 | | Department of
Commerce and Community Affairs (now |
25 | | Department of Commerce and Economic Opportunity). The |
26 | | total credit allowed shall not exceed
$40,000 per year |
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1 | | with a maximum total of $150,000 per site. For partners |
2 | | and
shareholders of subchapter S corporations, there shall |
3 | | be allowed a credit
under this subsection to be determined |
4 | | in accordance with the determination of
income and |
5 | | distributive share of income under Sections 702 and 704 |
6 | | and
subchapter S of the Internal Revenue Code. |
7 | | (ii) A credit allowed under this subsection that is |
8 | | unused in the year
the credit is earned may be carried |
9 | | forward to each of the 5 taxable years
following the year |
10 | | for which the credit is first earned until it is used.
The |
11 | | term "unused credit" does not include any amounts of |
12 | | unreimbursed eligible
remediation costs in excess of the |
13 | | maximum credit per site authorized under
paragraph (i). |
14 | | This credit shall be applied first to the earliest year
|
15 | | for which there is a liability. If there is a credit under |
16 | | this subsection
from more than one tax year that is |
17 | | available to offset a liability, the
earliest credit |
18 | | arising under this subsection shall be applied first. A
|
19 | | credit allowed under this subsection may be sold to a |
20 | | buyer as part of a sale
of all or part of the remediation |
21 | | site for which the credit was granted. The
purchaser of a |
22 | | remediation site and the tax credit shall succeed to the |
23 | | unused
credit and remaining carry-forward period of the |
24 | | seller. To perfect the
transfer, the assignor shall record |
25 | | the transfer in the chain of title for the
site and provide |
26 | | written notice to the Director of the Illinois Department |
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1 | | of
Revenue of the assignor's intent to sell the |
2 | | remediation site and the amount of
the tax credit to be |
3 | | transferred as a portion of the sale. In no event may a
|
4 | | credit be transferred to any taxpayer if the taxpayer or a |
5 | | related party would
not be eligible under the provisions |
6 | | of subsection (i). |
7 | | (iii) For purposes of this Section, the term "site" |
8 | | shall have the same
meaning as under Section 58.2 of the |
9 | | Environmental Protection Act. |
10 | | (m) Education expense credit. Beginning with tax years |
11 | | ending after
December 31, 1999, a taxpayer who
is the |
12 | | custodian of one or more qualifying pupils shall be allowed a |
13 | | credit
against the tax imposed by subsections (a) and (b) of |
14 | | this Section for
qualified education expenses incurred on |
15 | | behalf of the qualifying pupils.
The credit shall be equal to |
16 | | 25% of qualified education expenses, but in no
event may the |
17 | | total credit under this subsection claimed by a
family that is |
18 | | the
custodian of qualifying pupils exceed (i) $500 for tax |
19 | | years ending prior to December 31, 2017, and (ii) $750 for tax |
20 | | years ending on or after December 31, 2017. In no event shall a |
21 | | credit under
this subsection reduce the taxpayer's liability |
22 | | under this Act to less than
zero. Notwithstanding any other |
23 | | provision of law, for taxable years beginning on or after |
24 | | January 1, 2017, no taxpayer may claim a credit under this |
25 | | subsection (m) if the taxpayer's adjusted gross income for the |
26 | | taxable year exceeds (i) $500,000, in the case of spouses |
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1 | | filing a joint federal tax return or (ii) $250,000, in the case |
2 | | of all other taxpayers. This subsection is exempt from the |
3 | | provisions of Section 250 of this
Act. |
4 | | For purposes of this subsection: |
5 | | "Qualifying pupils" means individuals who (i) are |
6 | | residents of the State of
Illinois, (ii) are under the age of |
7 | | 21 at the close of the school year for
which a credit is |
8 | | sought, and (iii) during the school year for which a credit
is |
9 | | sought were full-time pupils enrolled in a kindergarten |
10 | | through twelfth
grade education program at any school, as |
11 | | defined in this subsection. |
12 | | "Qualified education expense" means the amount incurred
on |
13 | | behalf of a qualifying pupil in excess of $250 for tuition, |
14 | | book fees, and
lab fees at the school in which the pupil is |
15 | | enrolled during the regular school
year. |
16 | | "School" means any public or nonpublic elementary or |
17 | | secondary school in
Illinois that is in compliance with Title |
18 | | VI of the Civil Rights Act of 1964
and attendance at which |
19 | | satisfies the requirements of Section 26-1 of the
School Code, |
20 | | except that nothing shall be construed to require a child to
|
21 | | attend any particular public or nonpublic school to qualify |
22 | | for the credit
under this Section. |
23 | | "Custodian" means, with respect to qualifying pupils, an |
24 | | Illinois resident
who is a parent, the parents, a legal |
25 | | guardian, or the legal guardians of the
qualifying pupils. |
26 | | (n) River Edge Redevelopment Zone site remediation tax |
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1 | | credit.
|
2 | | (i) For tax years ending on or after December 31, |
3 | | 2006, a taxpayer shall be allowed a credit against the tax |
4 | | imposed by subsections (a) and (b) of this Section for |
5 | | certain amounts paid for unreimbursed eligible remediation |
6 | | costs, as specified in this subsection. For purposes of |
7 | | this Section, "unreimbursed eligible remediation costs" |
8 | | means costs approved by the Illinois Environmental |
9 | | Protection Agency ("Agency") under Section 58.14a of the |
10 | | Environmental Protection Act that were paid in performing |
11 | | environmental remediation at a site within a River Edge |
12 | | Redevelopment Zone for which a No Further Remediation |
13 | | Letter was issued by the Agency and recorded under Section |
14 | | 58.10 of the Environmental Protection Act. The credit must |
15 | | be claimed for the taxable year in which Agency approval |
16 | | of the eligible remediation costs is granted. The credit |
17 | | is not available to any taxpayer if the taxpayer or any |
18 | | related party caused or contributed to, in any material |
19 | | respect, a release of regulated substances on, in, or |
20 | | under the site that was identified and addressed by the |
21 | | remedial action pursuant to the Site Remediation Program |
22 | | of the Environmental Protection Act. Determinations as to |
23 | | credit availability for purposes of this Section shall be |
24 | | made consistent with rules adopted by the Pollution |
25 | | Control Board pursuant to the Illinois Administrative |
26 | | Procedure Act for the administration and enforcement of |
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1 | | Section 58.9 of the Environmental Protection Act. For |
2 | | purposes of this Section, "taxpayer" includes a person |
3 | | whose tax attributes the taxpayer has succeeded to under |
4 | | Section 381 of the Internal Revenue Code and "related |
5 | | party" includes the persons disallowed a deduction for |
6 | | losses by paragraphs (b), (c), and (f)(1) of Section 267 |
7 | | of the Internal Revenue Code by virtue of being a related |
8 | | taxpayer, as well as any of its partners. The credit |
9 | | allowed against the tax imposed by subsections (a) and (b) |
10 | | shall be equal to 25% of the unreimbursed eligible |
11 | | remediation costs in excess of $100,000 per site. |
12 | | (ii) A credit allowed under this subsection that is |
13 | | unused in the year the credit is earned may be carried |
14 | | forward to each of the 5 taxable years following the year |
15 | | for which the credit is first earned until it is used. This |
16 | | credit shall be applied first to the earliest year for |
17 | | which there is a liability. If there is a credit under this |
18 | | subsection from more than one tax year that is available |
19 | | to offset a liability, the earliest credit arising under |
20 | | this subsection shall be applied first. A credit allowed |
21 | | under this subsection may be sold to a buyer as part of a |
22 | | sale of all or part of the remediation site for which the |
23 | | credit was granted. The purchaser of a remediation site |
24 | | and the tax credit shall succeed to the unused credit and |
25 | | remaining carry-forward period of the seller. To perfect |
26 | | the transfer, the assignor shall record the transfer in |
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1 | | the chain of title for the site and provide written notice |
2 | | to the Director of the Illinois Department of Revenue of |
3 | | the assignor's intent to sell the remediation site and the |
4 | | amount of the tax credit to be transferred as a portion of |
5 | | the sale. In no event may a credit be transferred to any |
6 | | taxpayer if the taxpayer or a related party would not be |
7 | | eligible under the provisions of subsection (i). |
8 | | (iii) For purposes of this Section, the term "site" |
9 | | shall have the same meaning as under Section 58.2 of the |
10 | | Environmental Protection Act. |
11 | | (o) For each of taxable years during the Compassionate Use |
12 | | of Medical Cannabis Program, a surcharge is imposed on all |
13 | | taxpayers on income arising from the sale or exchange of |
14 | | capital assets, depreciable business property, real property |
15 | | used in the trade or business, and Section 197 intangibles of |
16 | | an organization registrant under the Compassionate Use of |
17 | | Medical Cannabis Program Act. The amount of the surcharge is |
18 | | equal to the amount of federal income tax liability for the |
19 | | taxable year attributable to those sales and exchanges. The |
20 | | surcharge imposed does not apply if: |
21 | | (1) the medical cannabis cultivation center |
22 | | registration, medical cannabis dispensary registration, or |
23 | | the property of a registration is transferred as a result |
24 | | of any of the following: |
25 | | (A) bankruptcy, a receivership, or a debt |
26 | | adjustment initiated by or against the initial |
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1 | | registration or the substantial owners of the initial |
2 | | registration; |
3 | | (B) cancellation, revocation, or termination of |
4 | | any registration by the Illinois Department of Public |
5 | | Health; |
6 | | (C) a determination by the Illinois Department of |
7 | | Public Health that transfer of the registration is in |
8 | | the best interests of Illinois qualifying patients as |
9 | | defined by the Compassionate Use of Medical Cannabis |
10 | | Program Act; |
11 | | (D) the death of an owner of the equity interest in |
12 | | a registrant; |
13 | | (E) the acquisition of a controlling interest in |
14 | | the stock or substantially all of the assets of a |
15 | | publicly traded company; |
16 | | (F) a transfer by a parent company to a wholly |
17 | | owned subsidiary; or |
18 | | (G) the transfer or sale to or by one person to |
19 | | another person where both persons were initial owners |
20 | | of the registration when the registration was issued; |
21 | | or |
22 | | (2) the cannabis cultivation center registration, |
23 | | medical cannabis dispensary registration, or the |
24 | | controlling interest in a registrant's property is |
25 | | transferred in a transaction to lineal descendants in |
26 | | which no gain or loss is recognized or as a result of a |
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1 | | transaction in accordance with Section 351 of the Internal |
2 | | Revenue Code in which no gain or loss is recognized. |
3 | | (p) Pass-through entity tax. |
4 | | (1) For taxable years ending on or after December 31, |
5 | | 2021 and beginning prior to January 1, 2026, a partnership |
6 | | (other than a publicly traded partnership under Section |
7 | | 7704 of the Internal Revenue Code) or Subchapter S |
8 | | corporation may elect to apply the provisions of this |
9 | | subsection. A separate election shall be made for each |
10 | | taxable year. Such election shall be made at such time, |
11 | | and in such form and manner as prescribed by the |
12 | | Department, and, once made, is irrevocable. |
13 | | (2) Entity-level tax. A partnership or Subchapter S |
14 | | corporation electing to apply the provisions of this |
15 | | subsection shall be subject to a tax for the privilege of |
16 | | earning or receiving income in this State in an amount |
17 | | equal to 4.95% of the taxpayer's net income for the |
18 | | taxable year. |
19 | | (3) Net income defined. |
20 | | (A) In general. For purposes of paragraph (2), the |
21 | | term net income has the same meaning as defined in |
22 | | Section 202 of this Act, except that the following |
23 | | provisions shall not apply: |
24 | | (i) the standard exemption allowed under |
25 | | Section 204; |
26 | | (ii) the deduction for net losses allowed |
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1 | | under Section 207; |
2 | | (iii) in the case of an S corporation, the |
3 | | modification under Section 203(b)(2)(S); and |
4 | | (iv) in the case of a partnership, the |
5 | | modifications under Section 203(d)(2)(H) and |
6 | | Section 203(d)(2)(I). |
7 | | (B) Special rule for tiered partnerships. If a |
8 | | taxpayer making the election under paragraph (1) is a |
9 | | partner of another taxpayer making the election under |
10 | | paragraph (1), net income shall be computed as |
11 | | provided in subparagraph (A), except that the taxpayer |
12 | | shall subtract its distributive share of the net |
13 | | income of the electing partnership (including its |
14 | | distributive share of the net income of the electing |
15 | | partnership derived as a distributive share from |
16 | | electing partnerships in which it is a partner). |
17 | | (4) Credit for entity level tax. Each partner or |
18 | | shareholder of a taxpayer making the election under this |
19 | | Section shall be allowed a credit against the tax imposed |
20 | | under subsections (a) and (b) of Section 201 of this Act |
21 | | for the taxable year of the partnership or Subchapter S |
22 | | corporation for which an election is in effect ending |
23 | | within or with the taxable year of the partner or |
24 | | shareholder in an amount equal to 4.95% times the partner |
25 | | or shareholder's distributive share of the net income of |
26 | | the electing partnership or Subchapter S corporation, but |
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1 | | not to exceed the partner's or shareholder's share of the |
2 | | tax imposed under paragraph (1) which is actually paid by |
3 | | the partnership or Subchapter S corporation. If the |
4 | | taxpayer is a partnership or Subchapter S corporation that |
5 | | is itself a partner of a partnership making the election |
6 | | under paragraph (1), the credit under this paragraph shall |
7 | | be allowed to the taxpayer's partners or shareholders (or |
8 | | if the partner is a partnership or Subchapter S |
9 | | corporation then its partners or shareholders) in |
10 | | accordance with the determination of income and |
11 | | distributive share of income under Sections 702 and 704 |
12 | | and Subchapter S of the Internal Revenue Code. If the |
13 | | amount of the credit allowed under this paragraph exceeds |
14 | | the partner's or shareholder's liability for tax imposed |
15 | | under subsections (a) and (b) of Section 201 of this Act |
16 | | for the taxable year, such excess shall be treated as an |
17 | | overpayment for purposes of Section 909 of this Act. |
18 | | (5) Nonresidents. A nonresident individual who is a |
19 | | partner or shareholder of a partnership or Subchapter S |
20 | | corporation for a taxable year for which an election is in |
21 | | effect under paragraph (1) shall not be required to file |
22 | | an income tax return under this Act for such taxable year |
23 | | if the only source of net income of the individual (or the |
24 | | individual and the individual's spouse in the case of a |
25 | | joint return) is from an entity making the election under |
26 | | paragraph (1) and the credit allowed to the partner or |
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1 | | shareholder under paragraph (4) equals or exceeds the |
2 | | individual's liability for the tax imposed under |
3 | | subsections (a) and (b) of Section 201 of this Act for the |
4 | | taxable year. |
5 | | (6) Liability for tax. Except as provided in this |
6 | | paragraph, a partnership or Subchapter S making the |
7 | | election under paragraph (1) is liable for the |
8 | | entity-level tax imposed under paragraph (2). If the |
9 | | electing partnership or corporation fails to pay the full |
10 | | amount of tax deemed assessed under paragraph (2), the |
11 | | partners or shareholders shall be liable to pay the tax |
12 | | assessed (including penalties and interest). Each partner |
13 | | or shareholder shall be liable for the unpaid assessment |
14 | | based on the ratio of the partner's or shareholder's share |
15 | | of the net income of the partnership over the total net |
16 | | income of the partnership. If the partnership or |
17 | | Subchapter S corporation fails to pay the tax assessed |
18 | | (including penalties and interest) and thereafter an |
19 | | amount of such tax is paid by the partners or |
20 | | shareholders, such amount shall not be collected from the |
21 | | partnership or corporation. |
22 | | (7) Foreign tax. For purposes of the credit allowed |
23 | | under Section 601(b)(3) of this Act, tax paid by a |
24 | | partnership or Subchapter S corporation to another state |
25 | | which, as determined by the Department, is substantially |
26 | | similar to the tax imposed under this subsection, shall be |
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1 | | considered tax paid by the partner or shareholder to the |
2 | | extent that the partner's or shareholder's share of the |
3 | | income of the partnership or Subchapter S corporation |
4 | | allocated and apportioned to such other state bears to the |
5 | | total income of the partnership or Subchapter S |
6 | | corporation allocated or apportioned to such other state. |
7 | | (8) Suspension of withholding. The provisions of |
8 | | Section 709.5 of this Act shall not apply to a partnership |
9 | | or Subchapter S corporation for the taxable year for which |
10 | | an election under paragraph (1) is in effect. |
11 | | (9) Requirement to pay estimated tax. For each taxable |
12 | | year for which an election under paragraph (1) is in |
13 | | effect, a partnership or Subchapter S corporation is |
14 | | required to pay estimated tax for such taxable year under |
15 | | Sections 803 and 804 of this Act if the amount payable as |
16 | | estimated tax can reasonably be expected to exceed $500. |
17 | | (10) The provisions of this subsection shall apply |
18 | | only with respect to taxable years for which the |
19 | | limitation on individual deductions applies under Section |
20 | | 164(b)(6) of the Internal Revenue Code. |
21 | | (Source: P.A. 101-9, eff. 6-5-19; 101-31, eff. 6-28-19; |
22 | | 101-207, eff. 8-2-19; 101-363, eff. 8-9-19; 102-558, eff. |
23 | | 8-20-21; 102-658, eff. 8-27-21.)
|
24 | | (35 ILCS 5/214)
|
25 | | Sec. 214. Tax credit for affordable housing donations.
|
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1 | | (a) Beginning with taxable years ending on or after |
2 | | December 31, 2001 and
until the taxable year ending on |
3 | | December 31, 2026, a taxpayer who makes a
donation under |
4 | | Section 7.28 of the Illinois Housing Development Act is |
5 | | entitled to a credit
against the tax imposed by subsections |
6 | | (a) and (b) of Section 201 in an amount
equal
to 50% of the |
7 | | value of the donation. For taxable years ending before |
8 | | December 31, 2023, partners Partners , shareholders of |
9 | | subchapter S
corporations, and owners of limited liability |
10 | | companies (if the limited
liability company is treated as a |
11 | | partnership for purposes of federal and State
income
taxation) |
12 | | are entitled to a credit under this Section to be determined in
|
13 | | accordance with the determination of income and distributive |
14 | | share of income
under Sections 702 and 703 and subchapter S of |
15 | | the Internal Revenue Code.
For taxable years ending on or |
16 | | after December 31, 2023, partners and shareholders of |
17 | | subchapter S
corporations are entitled to a credit under this |
18 | | Section as provided in Section 251. Persons or entities not |
19 | | subject to the tax imposed by subsections (a) and (b)
of |
20 | | Section 201 and who make a donation under Section 7.28 of the |
21 | | Illinois
Housing Development Act are entitled to a credit as |
22 | | described in this
subsection and may transfer that credit as |
23 | | described in subsection (c).
|
24 | | (b) If the amount of the credit exceeds the tax liability |
25 | | for the year, the
excess may be carried forward and applied to |
26 | | the tax liability of the 5 taxable
years following the excess |
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1 | | credit year. The tax credit shall be applied to the
earliest |
2 | | year for which there is a tax liability. If there are credits |
3 | | for
more than one year that are available to offset a |
4 | | liability, the earlier credit
shall be applied first.
|
5 | | (c) The transfer of the tax credit allowed under this |
6 | | Section may be made
(i) to the purchaser of land that has been |
7 | | designated solely for affordable
housing projects in |
8 | | accordance with the Illinois Housing Development Act or
(ii) |
9 | | to another donor who has also made a donation in accordance |
10 | | with Section 7.28 of the
Illinois Housing
Development Act.
|
11 | | (d) A taxpayer claiming the credit provided by this |
12 | | Section must maintain
and record any information that the |
13 | | Department may require by regulation
regarding the project for |
14 | | which the credit is claimed.
When
claiming the credit provided |
15 | | by this Section, the taxpayer must provide
information |
16 | | regarding the taxpayer's donation to the project under the |
17 | | Illinois Housing Development Act.
|
18 | | (Source: P.A. 102-16, eff. 6-17-21; 102-175, eff. 7-29-21.)
|
19 | | (35 ILCS 5/216) |
20 | | Sec. 216. Credit for wages paid to ex-felons. |
21 | | (a) For each taxable year beginning on or after January 1, |
22 | | 2007, each taxpayer is entitled to a credit against the tax |
23 | | imposed by subsections (a) and (b) of Section 201 of this Act |
24 | | in an amount equal to 5% of qualified wages paid by the |
25 | | taxpayer during the taxable year to one or more Illinois |
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1 | | residents who are qualified ex-offenders. The total credit |
2 | | allowed to a taxpayer with respect to each qualified |
3 | | ex-offender may not exceed $1,500 for all taxable years. For |
4 | | taxable years ending before December 31, 2023, for For |
5 | | partners, shareholders of Subchapter S corporations, and |
6 | | owners of limited liability companies, if the liability |
7 | | company is treated as a partnership for purposes of federal |
8 | | and State income taxation, there shall be allowed a credit |
9 | | under this Section to be determined in accordance with the |
10 | | determination of income and distributive share of income under |
11 | | Sections 702 and 704 and Subchapter S of the Internal Revenue |
12 | | Code. For taxable years ending on or after December 31, 2023, |
13 | | partners and shareholders of subchapter S
corporations are |
14 | | entitled to a credit under this Section as provided in Section |
15 | | 251. |
16 | | (b) For purposes of this Section, "qualified wages": |
17 | | (1) includes only wages that are subject to federal |
18 | | unemployment tax under Section 3306 of the Internal |
19 | | Revenue Code, without regard to any dollar limitation |
20 | | contained in that Section;
|
21 | | (2) does not include any amounts paid or incurred by |
22 | | an employer for any period to any qualified ex-offender |
23 | | for whom the employer receives federally funded payments |
24 | | for on-the-job training of that qualified ex-offender for |
25 | | that period;
and
|
26 | | (3) includes only wages attributable to service |
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1 | | rendered during the one-year period beginning with the day |
2 | | the qualified ex-offender begins work for the employer.
|
3 | | If the taxpayer has received any payment from a program |
4 | | established under Section 482(e)(1) of the federal Social |
5 | | Security Act with respect to a qualified ex-offender, then, |
6 | | for purposes of calculating the credit under this Section, the |
7 | | amount of the qualified wages paid to that qualified |
8 | | ex-offender must be reduced by the amount of the payment.
|
9 | | (c) For purposes of this Section, "qualified ex-offender" |
10 | | means any person who:
|
11 | | (1) has been convicted of a crime in this State or of |
12 | | an offense in any other jurisdiction, not including any |
13 | | offense or attempted offense that would subject a person |
14 | | to registration under the Sex Offender Registration Act; |
15 | | (2) was sentenced to a period of incarceration in an |
16 | | Illinois adult correctional center; and |
17 | | (3) was hired by the taxpayer within 3 years after |
18 | | being released from an Illinois adult correctional center. |
19 | | (d) In no event shall a credit under this Section reduce |
20 | | the taxpayer's liability to less than zero. If the amount of |
21 | | the credit exceeds the tax liability for the year, the excess |
22 | | may be carried forward and applied to the tax liability of the |
23 | | 5 taxable years following the excess credit year. The tax |
24 | | credit shall be applied to the earliest year for which there is |
25 | | a tax liability. If there are credits for more than one year |
26 | | that are available to offset a liability, the earlier credit |
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1 | | shall be applied first.
|
2 | | (e) This Section is exempt from the provisions of Section |
3 | | 250. |
4 | | (Source: P.A. 98-165, eff. 8-5-13.) |
5 | | (35 ILCS 5/218) |
6 | | Sec. 218. Credit for student-assistance contributions. |
7 | | (a) For taxable years ending on or after December 31, 2009 |
8 | | and on or before December 31, 2024, each taxpayer who, during |
9 | | the taxable year, makes a contribution (i) to a specified |
10 | | individual College Savings Pool Account under Section 16.5 of |
11 | | the State Treasurer Act or (ii) to the Illinois Prepaid |
12 | | Tuition Trust Fund in an amount matching a contribution made |
13 | | in the same taxable year by an employee of the taxpayer to that |
14 | | Account or Fund is entitled to a credit against the tax imposed |
15 | | under subsections (a) and (b) of Section 201 in an amount equal |
16 | | to 25% of that matching contribution, but not to exceed $500 |
17 | | per contributing employee per taxable year. |
18 | | (b) For taxable years ending before December 31, 2023, for |
19 | | For partners, shareholders of Subchapter S corporations, and |
20 | | owners of limited liability companies, if the liability |
21 | | company is treated as a partnership for purposes of federal |
22 | | and State income taxation, there is allowed a credit under |
23 | | this Section to be determined in accordance with the |
24 | | determination of income and distributive share of income under |
25 | | Sections 702 and 704 and Subchapter S of the Internal Revenue |
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1 | | Code. For taxable years ending on or after December 31, 2023, |
2 | | partners and shareholders of subchapter S
corporations are |
3 | | entitled to a credit under this Section as provided in Section |
4 | | 251. |
5 | | (c) The credit may not be carried back. If the amount of |
6 | | the credit exceeds the tax liability for the year, the excess |
7 | | may be carried forward and applied to the tax liability of the |
8 | | 5 taxable years following the excess credit year. The tax |
9 | | credit shall be applied to the earliest year for which there is |
10 | | a tax liability. If there are credits for more than one year |
11 | | that are available to offset a liability, the earlier credit |
12 | | shall be applied first.
|
13 | | (d) A taxpayer claiming the credit under this Section must |
14 | | maintain and record any information that the Illinois Student |
15 | | Assistance Commission, the Office of the State Treasurer, or |
16 | | the Department may require regarding the matching contribution |
17 | | for which the credit is claimed.
|
18 | | (Source: P.A. 101-645, eff. 6-26-20; 102-289, eff. 8-6-21.) |
19 | | (35 ILCS 5/222) |
20 | | Sec. 222. Live theater production credit. |
21 | | (a) For tax years beginning on or after January 1, 2012 and |
22 | | beginning prior to January 1, 2027, a taxpayer who has |
23 | | received a tax credit award under the Live Theater Production |
24 | | Tax Credit Act is entitled to a credit against the taxes |
25 | | imposed under subsections (a) and (b) of Section 201 of this |
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1 | | Act in an amount determined under that Act by the Department of |
2 | | Commerce and Economic Opportunity. |
3 | | (b) For taxable years ending before December 31, 2023, if |
4 | | If the taxpayer is a partnership, limited liability |
5 | | partnership, limited liability company, or Subchapter S |
6 | | corporation, the tax credit award is allowed to the partners, |
7 | | unit holders, or shareholders in accordance with the |
8 | | determination of income and distributive share of income under |
9 | | Sections 702 and 704 and Subchapter S of the Internal Revenue |
10 | | Code. For taxable years ending on or after December 31, 2023, |
11 | | if the taxpayer is a partnership or Subchapter S corporation, |
12 | | then the provisions of Section 251 apply. |
13 | | (c) A sale, assignment, or transfer of the tax credit |
14 | | award may be made by the taxpayer earning the credit within one |
15 | | year after the credit is awarded in accordance with rules |
16 | | adopted by the Department of Commerce and Economic |
17 | | Opportunity. |
18 | | (d) The Department of Revenue, in cooperation with the |
19 | | Department of Commerce and Economic Opportunity, shall adopt |
20 | | rules to enforce and administer the provisions of this |
21 | | Section. |
22 | | (e) The tax credit award may not be carried back. If the |
23 | | amount of the credit exceeds the tax liability for the year, |
24 | | the excess may be carried forward and applied to the tax |
25 | | liability of the 5 tax years following the excess credit year. |
26 | | The tax credit award shall be applied to the earliest year for |
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1 | | which there is a tax liability. If there are credits from more |
2 | | than one tax year that are available to offset liability, the |
3 | | earlier credit shall be applied first. In no event may a credit |
4 | | under this Section reduce the taxpayer's liability to less |
5 | | than zero.
|
6 | | (Source: P.A. 102-16, eff. 6-17-21.) |
7 | | (35 ILCS 5/224) |
8 | | Sec. 224. Invest in Kids credit. |
9 | | (a) For taxable years beginning on or after January 1, |
10 | | 2018 and ending before January 1, 2024, each taxpayer for whom |
11 | | a tax credit has been awarded by the Department under the |
12 | | Invest in Kids Act is entitled to a credit against the tax |
13 | | imposed under subsections (a) and (b) of Section 201 of this |
14 | | Act in an amount equal to the amount awarded under the Invest |
15 | | in Kids Act. |
16 | | (b) For taxable years ending before December 31, 2023, for |
17 | | For partners, shareholders of subchapter S corporations, and |
18 | | owners of limited liability companies, if the liability |
19 | | company is treated as a partnership for purposes of federal |
20 | | and State income taxation, the credit under this Section shall |
21 | | be determined in accordance with the determination of income |
22 | | and distributive share of income under Sections 702 and 704 |
23 | | and subchapter S of the Internal Revenue Code. For taxable |
24 | | years ending on or after December 31, 2023, partners and |
25 | | shareholders of subchapter S
corporations are entitled to a |
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1 | | credit under this Section as provided in Section 251. |
2 | | (c) The credit may not be carried back and may not reduce |
3 | | the taxpayer's liability to less than zero. If the amount of |
4 | | the credit exceeds the tax liability for the year, the excess |
5 | | may be carried forward and applied to the tax liability of the |
6 | | 5 taxable years following the excess credit year. The tax |
7 | | credit shall be applied to the earliest year for which there is |
8 | | a tax liability. If there are credits for more than one year |
9 | | that are available to offset the liability, the earlier credit |
10 | | shall be applied first. |
11 | | (d) A tax credit awarded by the Department under the |
12 | | Invest in Kids Act may not be claimed for any qualified |
13 | | contribution for which the taxpayer claims a federal income |
14 | | tax deduction.
|
15 | | (Source: P.A. 102-699, eff. 4-19-22.) |
16 | | (35 ILCS 5/228) |
17 | | Sec. 228. Historic preservation credit. For
tax years |
18 | | beginning on or after January 1, 2019 and ending on
or before |
19 | | December 31, 2023, a taxpayer who qualifies for a
credit under |
20 | | the Historic Preservation Tax Credit Act is entitled to a |
21 | | credit against the taxes
imposed under subsections (a) and (b) |
22 | | of Section 201 of this
Act as provided in that Act. For taxable |
23 | | years ending before December 31, 2023, if If the taxpayer is a |
24 | | partnership,
Subchapter S corporation, or a limited liability |
25 | | company the credit shall be allowed to the
partners, |
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1 | | shareholders, or members in accordance with the determination
|
2 | | of income and distributive share of income under Sections 702
|
3 | | and 704 and Subchapter S of the Internal Revenue Code provided |
4 | | that credits granted to a partnership, a limited liability |
5 | | company taxed as a partnership, or other multiple owners of |
6 | | property shall be passed through to the partners, members, or |
7 | | owners respectively on a pro rata basis or pursuant to an |
8 | | executed agreement among the partners, members, or owners |
9 | | documenting any alternate distribution method.
For taxable |
10 | | years ending on or after December 31, 2023, if the taxpayer is |
11 | | a partnership or a Subchapter S corporation, then the |
12 | | provisions of Section 251 apply. If the amount of any tax |
13 | | credit awarded under this Section
exceeds the qualified |
14 | | taxpayer's income tax liability for the
year in which the |
15 | | qualified rehabilitation plan was placed in
service, the |
16 | | excess amount may be carried forward as
provided in the |
17 | | Historic Preservation Tax Credit Act.
|
18 | | (Source: P.A. 101-81, eff. 7-12-19; 102-741, eff. 5-6-22.)
|
19 | | (35 ILCS 5/229)
|
20 | | Sec. 229. Data center construction employment tax credit. |
21 | | (a) A taxpayer who has been awarded a credit by the |
22 | | Department of Commerce and Economic Opportunity under Section |
23 | | 605-1025 of the Department of Commerce and Economic |
24 | | Opportunity Law of the
Civil Administrative Code of Illinois |
25 | | is entitled to a credit against the taxes imposed under |
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1 | | subsections (a) and (b) of Section 201 of this Act. The amount |
2 | | of the credit shall be 20% of the wages paid during the taxable |
3 | | year to a full-time or part-time employee of a construction |
4 | | contractor employed by a certified data center if those wages |
5 | | are paid for the construction of a new data center in a |
6 | | geographic area that meets any one of the following criteria: |
7 | | (1) the area has a poverty rate of at least 20%, |
8 | | according to the U.S. Census Bureau American Community |
9 | | Survey 5-Year Estimates; |
10 | | (2) 75% or more of the children in the area |
11 | | participate in the federal free lunch program, according |
12 | | to reported statistics from the State Board of Education; |
13 | | (3) 20% or more of the households in the area receive |
14 | | assistance under the Supplemental Nutrition Assistance |
15 | | Program (SNAP), according to data from the U.S. Census |
16 | | Bureau American Community Survey 5-year Estimates; or |
17 | | (4) the area has an average unemployment rate, as |
18 | | determined by the Department of Employment Security, that |
19 | | is more than 120% of the national unemployment average, as |
20 | | determined by the U.S. Department of Labor, for a period |
21 | | of at least 2 consecutive calendar years preceding the |
22 | | date of the application. |
23 | | For taxable years ending before December 31, 2023, if If |
24 | | the taxpayer is a partnership, a Subchapter S corporation, or |
25 | | a limited liability company that has elected partnership tax |
26 | | treatment, the credit shall be allowed to the partners, |
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1 | | shareholders, or members in accordance with the determination |
2 | | of income and distributive share of income under Sections 702 |
3 | | and 704 and subchapter S of the Internal Revenue Code, as |
4 | | applicable. For taxable years ending on or after December 31, |
5 | | 2023, if the taxpayer is a partnership or a Subchapter S |
6 | | corporation, then the provisions of Section 251 apply. The |
7 | | Department, in cooperation with the Department of Commerce and |
8 | | Economic Opportunity, shall adopt rules to enforce and |
9 | | administer this Section. This Section is exempt from the |
10 | | provisions of Section 250 of this Act. |
11 | | (b) In no event shall a credit under this Section reduce |
12 | | the taxpayer's liability to less than zero. If the amount of |
13 | | the credit exceeds the tax liability for the year, the excess |
14 | | may be carried forward and applied to the tax liability of the |
15 | | 5 taxable years following the excess credit year. The tax |
16 | | credit shall be applied to the earliest year for which there is |
17 | | a tax liability. If there are credits for more than one year |
18 | | that are available to offset a liability, the earlier credit |
19 | | shall be applied first. |
20 | | (c) No credit shall be allowed with respect to any |
21 | | certification for any taxable year ending after the revocation |
22 | | of the certification by the Department of Commerce and |
23 | | Economic Opportunity. Upon receiving notification by the |
24 | | Department of Commerce and Economic Opportunity of the |
25 | | revocation of certification, the Department shall notify the |
26 | | taxpayer that no credit is allowed for any taxable year ending |
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1 | | after the revocation date, as stated in such notification. If |
2 | | any credit has been allowed with respect to a certification |
3 | | for a taxable year ending after the revocation date, any |
4 | | refund paid to the taxpayer for that taxable year shall, to the |
5 | | extent of that credit allowed, be an erroneous refund within |
6 | | the meaning of Section 912 of this Act.
|
7 | | (Source: P.A. 101-31, eff. 6-28-19; 101-604, eff. 12-13-19; |
8 | | 102-558, eff. 8-20-21.)
|
9 | | (35 ILCS 5/231) |
10 | | Sec. 231. Apprenticeship education expense credit. |
11 | | (a) As used in this Section: |
12 | | "Department" means the Department of Commerce and Economic |
13 | | Opportunity. |
14 | | "Employer" means an Illinois taxpayer who is the employer |
15 | | of the qualifying apprentice. |
16 | | "Qualifying apprentice" means an individual who: (i) is a |
17 | | resident of the State of Illinois; (ii) is at least 16 years |
18 | | old at the close of the school year for which a credit is |
19 | | sought; (iii) during the school year for which a credit is |
20 | | sought, was a full-time apprentice enrolled in an |
21 | | apprenticeship program which is registered with the United |
22 | | States Department of Labor, Office of Apprenticeship; and (iv) |
23 | | is employed in Illinois by the taxpayer who is the employer. |
24 | | "Qualified education expense" means the amount incurred on |
25 | | behalf of a qualifying apprentice not to exceed $3,500 for |
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1 | | tuition, book fees, and lab fees at the school or community |
2 | | college in which the apprentice is enrolled during the regular |
3 | | school year. |
4 | | "School" means any public or nonpublic secondary school in |
5 | | Illinois that is: (i) an institution of higher education that |
6 | | provides a program that leads to an industry-recognized |
7 | | postsecondary credential or degree; (ii) an entity that |
8 | | carries out programs registered under the federal National |
9 | | Apprenticeship Act; or (iii) another public or private |
10 | | provider of a program of training services, which may include |
11 | | a joint labor-management organization. |
12 | | (b) For taxable years beginning on or after January 1, |
13 | | 2020, and beginning on or before January 1, 2025, the employer |
14 | | of one or more qualifying apprentices shall be allowed a |
15 | | credit against the tax imposed by subsections (a) and (b) of |
16 | | Section 201 of the Illinois Income Tax Act for qualified |
17 | | education expenses incurred on behalf of a qualifying |
18 | | apprentice. The credit shall be equal to 100% of the qualified |
19 | | education expenses, but in no event may the total credit |
20 | | amount awarded to a single taxpayer in a single taxable year |
21 | | exceed $3,500 per qualifying apprentice. A taxpayer shall be |
22 | | entitled to an additional $1,500 credit against the tax |
23 | | imposed by subsections (a) and (b) of Section 201 of the |
24 | | Illinois Income Tax Act if (i) the qualifying apprentice |
25 | | resides in an underserved area as defined in Section 5-5 of the |
26 | | Economic Development for a Growing Economy Tax Credit Act |
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1 | | during the school year for which a credit is sought by an |
2 | | employer or (ii) the employer's principal place of business is |
3 | | located in an underserved area, as defined in Section 5-5 of |
4 | | the Economic Development for a Growing Economy Tax Credit Act. |
5 | | In no event shall a credit under this Section reduce the |
6 | | taxpayer's liability under this Act to less than zero.
For |
7 | | taxable years ending before December 31, 2023, for For |
8 | | partners, shareholders of Subchapter S corporations, and |
9 | | owners of limited liability companies, if the liability |
10 | | company is treated as a partnership for purposes of federal |
11 | | and State income taxation, there shall be allowed a credit |
12 | | under this Section to be determined in accordance with the |
13 | | determination of income and distributive share of income under |
14 | | Sections 702 and 704 and Subchapter S of the Internal Revenue |
15 | | Code. For taxable years ending on or after December 31, 2023, |
16 | | partners and shareholders of subchapter S
corporations are |
17 | | entitled to a credit under this Section as provided in Section |
18 | | 251. |
19 | | (c) The Department shall implement a program to certify |
20 | | applicants for an apprenticeship credit under this Section. |
21 | | Upon satisfactory review, the Department shall issue a tax |
22 | | credit certificate to an employer incurring costs on behalf of |
23 | | a qualifying apprentice stating the amount of the tax credit |
24 | | to which the employer is entitled. If the employer is seeking a |
25 | | tax credit for multiple qualifying apprentices, the Department |
26 | | may issue a single tax credit certificate that encompasses the |
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1 | | aggregate total of tax credits for qualifying apprentices for |
2 | | a single employer. |
3 | | (d) The Department, in addition to those powers granted |
4 | | under the Civil Administrative Code of Illinois, is granted |
5 | | and shall have all the powers necessary or convenient to carry |
6 | | out and effectuate the purposes and provisions of this |
7 | | Section, including, but not limited to, power and authority |
8 | | to: |
9 | | (1) Adopt rules deemed necessary and appropriate for |
10 | | the administration of this Section; establish forms for |
11 | | applications, notifications, contracts, or any other |
12 | | agreements; and accept applications at any time during the |
13 | | year and require that all applications be submitted via |
14 | | the Internet. The Department shall require that |
15 | | applications be submitted in electronic form. |
16 | | (2) Provide guidance and assistance to applicants |
17 | | pursuant to the provisions of this Section and cooperate |
18 | | with applicants to promote, foster, and support job |
19 | | creation within the State. |
20 | | (3) Enter into agreements and memoranda of |
21 | | understanding for participation of and engage in |
22 | | cooperation with agencies of the federal government, units |
23 | | of local government, universities, research foundations or |
24 | | institutions, regional economic development corporations, |
25 | | or other organizations for the purposes of this Section. |
26 | | (4) Gather information and conduct inquiries, in the |
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1 | | manner and by the methods it deems desirable, including, |
2 | | without limitation, gathering information with respect to |
3 | | applicants for the purpose of making any designations or |
4 | | certifications necessary or desirable or to gather |
5 | | information in furtherance of the purposes of this Act. |
6 | | (5) Establish, negotiate, and effectuate any term, |
7 | | agreement, or other document with any person necessary or |
8 | | appropriate to accomplish the purposes of this Section, |
9 | | and consent, subject to the provisions of any agreement |
10 | | with another party, to the modification or restructuring |
11 | | of any agreement to which the Department is a party. |
12 | | (6) Provide for sufficient personnel to permit |
13 | | administration, staffing, operation, and related support |
14 | | required to adequately discharge its duties and |
15 | | responsibilities described in this Section from funds made |
16 | | available through charges to applicants or from funds as |
17 | | may be appropriated by the General Assembly for the |
18 | | administration of this Section. |
19 | | (7) Require applicants, upon written request, to issue |
20 | | any necessary authorization to the appropriate federal, |
21 | | State, or local authority or any other person for the |
22 | | release to the Department of information requested by the |
23 | | Department, including, but not be limited to, financial |
24 | | reports, returns, or records relating to the applicant or |
25 | | to the amount of credit allowable under this Section. |
26 | | (8) Require that an applicant shall, at all times, |
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1 | | keep proper books of record and account in accordance with |
2 | | generally accepted accounting principles consistently |
3 | | applied, with the books, records, or papers related to the |
4 | | agreement in the custody or control of the applicant open |
5 | | for reasonable Department inspection and audits, |
6 | | including, without limitation, the making of copies of the |
7 | | books, records, or papers. |
8 | | (9) Take whatever actions are necessary or appropriate |
9 | | to protect the State's interest in the event of |
10 | | bankruptcy, default, foreclosure, or noncompliance with |
11 | | the terms and conditions of financial assistance or |
12 | | participation required under this Section or any agreement |
13 | | entered into under this Section, including the power to |
14 | | sell, dispose of, lease, or rent, upon terms and |
15 | | conditions determined by the Department to be appropriate, |
16 | | real or personal property that the Department may recover |
17 | | as a result of these actions. |
18 | | (e) The Department, in consultation with the Department of |
19 | | Revenue, shall adopt rules to administer this Section. The |
20 | | aggregate amount of the tax credits that may be claimed under |
21 | | this Section for qualified education expenses incurred by an |
22 | | employer on behalf of a qualifying apprentice shall be limited |
23 | | to $5,000,000 per calendar year. If applications for a greater |
24 | | amount are received, credits shall be allowed on a first-come |
25 | | first-served basis, based on the date on which each properly |
26 | | completed application for a certificate of eligibility is |
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1 | | received by the Department. If more than one certificate is |
2 | | received on the same day, the credits will be awarded based on |
3 | | the time of submission for that particular day. |
4 | | (f) An employer may not sell or otherwise transfer a |
5 | | credit awarded under this Section to another person or |
6 | | taxpayer. |
7 | | (g) The employer shall provide the Department such |
8 | | information as the Department may require, including but not |
9 | | limited to: (i) the name, age, and taxpayer identification |
10 | | number of each qualifying apprentice employed by the taxpayer |
11 | | during the taxable year; (ii) the amount of qualified |
12 | | education expenses incurred with respect to each qualifying |
13 | | apprentice; and (iii) the name of the school at which the |
14 | | qualifying apprentice is enrolled and the qualified education |
15 | | expenses are incurred. |
16 | | (h) On or before July 1 of each year, the Department shall |
17 | | report to the Governor and the General Assembly on the tax |
18 | | credit certificates awarded under this Section for the prior |
19 | | calendar year. The report must include: |
20 | | (1) the name of each employer awarded or allocated a |
21 | | credit; |
22 | | (2) the number of qualifying apprentices for whom the |
23 | | employer has incurred qualified education expenses; |
24 | | (3) the North American Industry Classification System |
25 | | (NAICS) code applicable to each employer awarded or |
26 | | allocated a credit; |
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1 | | (4) the amount of the credit awarded or allocated to |
2 | | each employer; |
3 | | (5) the total number of employers awarded or allocated |
4 | | a credit; |
5 | | (6) the total number of qualifying apprentices for |
6 | | whom employers receiving credits under this Section |
7 | | incurred qualified education expenses; and |
8 | | (7) the average cost to the employer of all |
9 | | apprenticeships receiving credits under this Section.
|
10 | | (Source: P.A. 101-207, eff. 8-2-19; 102-558, eff. 8-20-21.) |
11 | | (35 ILCS 5/237) |
12 | | Sec. 237. REV Illinois Investment Tax credits. |
13 | | (a) For tax years beginning on or after the effective date |
14 | | of this amendatory Act of the 102nd General Assembly, a |
15 | | taxpayer shall be allowed a credit against the tax imposed by |
16 | | subsections (a) and (b) of Section 201 for investment in |
17 | | qualified property which is placed in service at the site of a |
18 | | REV Illinois Project subject to an agreement between the |
19 | | taxpayer and the Department of Commerce and Economic |
20 | | Opportunity pursuant to the Reimagining Electric Vehicles in |
21 | | Illinois Act. For taxable years ending before December 31, |
22 | | 2023, for For partners, shareholders of Subchapter S |
23 | | corporations, and owners of limited liability companies, if |
24 | | the liability company is treated as a partnership for purposes |
25 | | of federal and State income taxation, there shall be allowed a |
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1 | | credit under this Section to be determined in accordance with |
2 | | the determination of income and distributive share of income |
3 | | under Sections 702 and 704 and Subchapter S of the Internal |
4 | | Revenue Code. For taxable years ending on or after December |
5 | | 31, 2023, partners and shareholders of subchapter S
|
6 | | corporations are entitled to a credit under this Section as |
7 | | provided in Section 251. The credit shall be 0.5% of the basis |
8 | | for such property. The credit shall be available only in the |
9 | | taxable year in which the property is placed in service and |
10 | | shall not be allowed to the extent that it would reduce a |
11 | | taxpayer's liability for the tax imposed by subsections (a) |
12 | | and (b) of Section 201 to below zero. The credit shall be |
13 | | allowed for the tax year in which the property is placed in |
14 | | service, or, if the amount of the credit exceeds the tax |
15 | | liability for that year, whether it exceeds the original |
16 | | liability or the liability as later amended, such excess may |
17 | | be carried forward and applied to the tax liability of the 5 |
18 | | taxable years following the excess credit year. The credit |
19 | | shall be applied to the earliest year for which there is a |
20 | | liability. If there is credit from more than one tax year that |
21 | | is available to offset a liability, the credit accruing first |
22 | | in time shall be applied first. |
23 | | (b) The term qualified property means property which: |
24 | | (1) is tangible, whether new or used, including |
25 | | buildings and structural components of buildings; |
26 | | (2) is depreciable pursuant to Section 167 of the |
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1 | | Internal Revenue Code, except that "3-year property" as |
2 | | defined in Section 168(c)(2)(A) of that Code is not |
3 | | eligible for the credit provided by this Section; |
4 | | (3) is acquired by purchase as defined in Section |
5 | | 179(d) of the Internal Revenue Code; |
6 | | (4) is used at the site of the REV Illinois Project by |
7 | | the taxpayer; and |
8 | | (5) has not been previously used in Illinois in such a |
9 | | manner and by such a person as would qualify for the credit |
10 | | provided by this Section. |
11 | | (c) The basis of qualified property shall be the basis |
12 | | used to compute the depreciation deduction for federal income |
13 | | tax purposes. |
14 | | (d) If the basis of the property for federal income tax |
15 | | depreciation purposes is increased after it has been placed in |
16 | | service at the site of the REV Illinois Project by the |
17 | | taxpayer, the amount of such increase shall be deemed property |
18 | | placed in service on the date of such increase in basis. |
19 | | (e) The term "placed in service" shall have the same |
20 | | meaning as under Section 46 of the Internal Revenue Code. |
21 | | (f) If during any taxable year, any property ceases to be |
22 | | qualified property in the hands of the taxpayer within 48 |
23 | | months after being placed in service, or the situs of any |
24 | | qualified property is moved from the REV Illinois Project site |
25 | | within 48 months after being placed in service, the tax |
26 | | imposed under subsections (a) and (b) of Section 201 for such |
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1 | | taxable year shall be increased. Such increase shall be |
2 | | determined by (i) recomputing the investment credit which |
3 | | would have been allowed for the year in which credit for such |
4 | | property was originally allowed by eliminating such property |
5 | | from such computation, and (ii) subtracting such recomputed |
6 | | credit from the amount of credit previously allowed. For the |
7 | | purposes of this subsection (f), a reduction of the basis of |
8 | | qualified property resulting from a redetermination of the |
9 | | purchase price shall be deemed a disposition of qualified |
10 | | property to the extent of such reduction.
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11 | | (Source: P.A. 102-669, eff. 11-16-21.) |
12 | | (35 ILCS 5/251 new) |
13 | | Sec. 251. Pass-through of credits to partners and S |
14 | | corporation shareholders. For taxable years ending on or after |
15 | | December 31, 2023, if any person earning a credit against the |
16 | | tax imposed under subsections (a) and (b) of Section 201 is a |
17 | | partnership or Subchapter S corporation, the credit is allowed |
18 | | to pass through to the partners and shareholders in accordance |
19 | | with the determination of income and distributive share of |
20 | | income under Sections 702 and 704 and Subchapter S of the |
21 | | Internal Revenue Code, or as otherwise agreed by the partners |
22 | | or shareholders, provided that such agreement shall be |
23 | | executed in writing prior to the due date of the return for the |
24 | | taxable year and meet such other requirements as the |
25 | | Department may establish by rule. Partnership has the meaning |