104TH GENERAL ASSEMBLY
State of Illinois
2025 and 2026
HB1752

 

Introduced 1/28/2025, by Rep. Brad Stephens

 

SYNOPSIS AS INTRODUCED:
 
35 ILCS 5/203  from Ch. 120, par. 2-203

    Amends the Illinois Income Tax Act. Creates an income tax deduction for any amounts paid by the taxpayer's employer on behalf of the taxpayer as part of an educational assistance program. Creates an income tax deduction for any amounts paid by the taxpayer on behalf of an employee of the taxpayer as part of an educational assistance program. Provides that the deductions are limited to the first $5,250 of such assistance so furnished to any individual. Effective immediately.


LRB104 08500 HLH 18552 b

 

 

A BILL FOR

 

HB1752LRB104 08500 HLH 18552 b

1    AN ACT concerning revenue.
 
2    Be it enacted by the People of the State of Illinois,
3represented in the General Assembly:
 
4    Section 5. The Illinois Income Tax Act is amended by
5changing Section 203 as follows:
 
6    (35 ILCS 5/203)  (from Ch. 120, par. 2-203)
7    Sec. 203. Base income defined.
8    (a) Individuals.
9        (1) In general. In the case of an individual, base
10    income means an amount equal to the taxpayer's adjusted
11    gross income for the taxable year as modified by paragraph
12    (2).
13        (2) Modifications. The adjusted gross income referred
14    to in paragraph (1) shall be modified by adding thereto
15    the sum of the following amounts:
16            (A) An amount equal to all amounts paid or accrued
17        to the taxpayer as interest or dividends during the
18        taxable year to the extent excluded from gross income
19        in the computation of adjusted gross income, except
20        stock dividends of qualified public utilities
21        described in Section 305(e) of the Internal Revenue
22        Code;
23            (B) An amount equal to the amount of tax imposed by

 

 

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1        this Act to the extent deducted from gross income in
2        the computation of adjusted gross income for the
3        taxable year;
4            (C) An amount equal to the amount received during
5        the taxable year as a recovery or refund of real
6        property taxes paid with respect to the taxpayer's
7        principal residence under the Revenue Act of 1939 and
8        for which a deduction was previously taken under
9        subparagraph (L) of this paragraph (2) prior to July
10        1, 1991, the retrospective application date of Article
11        4 of Public Act 87-17. In the case of multi-unit or
12        multi-use structures and farm dwellings, the taxes on
13        the taxpayer's principal residence shall be that
14        portion of the total taxes for the entire property
15        which is attributable to such principal residence;
16            (D) An amount equal to the amount of the capital
17        gain deduction allowable under the Internal Revenue
18        Code, to the extent deducted from gross income in the
19        computation of adjusted gross income;
20            (D-5) An amount, to the extent not included in
21        adjusted gross income, equal to the amount of money
22        withdrawn by the taxpayer in the taxable year from a
23        medical care savings account and the interest earned
24        on the account in the taxable year of a withdrawal
25        pursuant to subsection (b) of Section 20 of the
26        Medical Care Savings Account Act or subsection (b) of

 

 

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1        Section 20 of the Medical Care Savings Account Act of
2        2000;
3            (D-10) For taxable years ending after December 31,
4        1997, an amount equal to any eligible remediation
5        costs that the individual deducted in computing
6        adjusted gross income and for which the individual
7        claims a credit under subsection (l) of Section 201;
8            (D-15) For taxable years 2001 and thereafter, an
9        amount equal to the bonus depreciation deduction taken
10        on the taxpayer's federal income tax return for the
11        taxable year under subsection (k) of Section 168 of
12        the Internal Revenue Code;
13            (D-16) If the taxpayer sells, transfers, abandons,
14        or otherwise disposes of property for which the
15        taxpayer was required in any taxable year to make an
16        addition modification under subparagraph (D-15), then
17        an amount equal to the aggregate amount of the
18        deductions taken in all taxable years under
19        subparagraph (Z) with respect to that property.
20            If the taxpayer continues to own property through
21        the last day of the last tax year for which a
22        subtraction is allowed with respect to that property
23        under subparagraph (Z) and for which the taxpayer was
24        allowed in any taxable year to make a subtraction
25        modification under subparagraph (Z), then an amount
26        equal to that subtraction modification.

 

 

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1            The taxpayer is required to make the addition
2        modification under this subparagraph only once with
3        respect to any one piece of property;
4            (D-17) An amount equal to the amount otherwise
5        allowed as a deduction in computing base income for
6        interest paid, accrued, or incurred, directly or
7        indirectly, (i) for taxable years ending on or after
8        December 31, 2004, to a foreign person who would be a
9        member of the same unitary business group but for the
10        fact that foreign person's business activity outside
11        the United States is 80% or more of the foreign
12        person's total business activity and (ii) for taxable
13        years ending on or after December 31, 2008, to a person
14        who would be a member of the same unitary business
15        group but for the fact that the person is prohibited
16        under Section 1501(a)(27) from being included in the
17        unitary business group because he or she is ordinarily
18        required to apportion business income under different
19        subsections of Section 304. The addition modification
20        required by this subparagraph shall be reduced to the
21        extent that dividends were included in base income of
22        the unitary group for the same taxable year and
23        received by the taxpayer or by a member of the
24        taxpayer's unitary business group (including amounts
25        included in gross income under Sections 951 through
26        964 of the Internal Revenue Code and amounts included

 

 

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1        in gross income under Section 78 of the Internal
2        Revenue Code) with respect to the stock of the same
3        person to whom the interest was paid, accrued, or
4        incurred.
5            This paragraph shall not apply to the following:
6                (i) an item of interest paid, accrued, or
7            incurred, directly or indirectly, to a person who
8            is subject in a foreign country or state, other
9            than a state which requires mandatory unitary
10            reporting, to a tax on or measured by net income
11            with respect to such interest; or
12                (ii) an item of interest paid, accrued, or
13            incurred, directly or indirectly, to a person if
14            the taxpayer can establish, based on a
15            preponderance of the evidence, both of the
16            following:
17                    (a) the person, during the same taxable
18                year, paid, accrued, or incurred, the interest
19                to a person that is not a related member, and
20                    (b) the transaction giving rise to the
21                interest expense between the taxpayer and the
22                person did not have as a principal purpose the
23                avoidance of Illinois income tax, and is paid
24                pursuant to a contract or agreement that
25                reflects an arm's-length interest rate and
26                terms; or

 

 

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1                (iii) the taxpayer can establish, based on
2            clear and convincing evidence, that the interest
3            paid, accrued, or incurred relates to a contract
4            or agreement entered into at arm's-length rates
5            and terms and the principal purpose for the
6            payment is not federal or Illinois tax avoidance;
7            or
8                (iv) an item of interest paid, accrued, or
9            incurred, directly or indirectly, to a person if
10            the taxpayer establishes by clear and convincing
11            evidence that the adjustments are unreasonable; or
12            if the taxpayer and the Director agree in writing
13            to the application or use of an alternative method
14            of apportionment under Section 304(f).
15                Nothing in this subsection shall preclude the
16            Director from making any other adjustment
17            otherwise allowed under Section 404 of this Act
18            for any tax year beginning after the effective
19            date of this amendment provided such adjustment is
20            made pursuant to regulation adopted by the
21            Department and such regulations provide methods
22            and standards by which the Department will utilize
23            its authority under Section 404 of this Act;
24            (D-18) An amount equal to the amount of intangible
25        expenses and costs otherwise allowed as a deduction in
26        computing base income, and that were paid, accrued, or

 

 

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1        incurred, directly or indirectly, (i) for taxable
2        years ending on or after December 31, 2004, to a
3        foreign person who would be a member of the same
4        unitary business group but for the fact that the
5        foreign person's business activity outside the United
6        States is 80% or more of that person's total business
7        activity and (ii) for taxable years ending on or after
8        December 31, 2008, to a person who would be a member of
9        the same unitary business group but for the fact that
10        the person is prohibited under Section 1501(a)(27)
11        from being included in the unitary business group
12        because he or she is ordinarily required to apportion
13        business income under different subsections of Section
14        304. The addition modification required by this
15        subparagraph shall be reduced to the extent that
16        dividends were included in base income of the unitary
17        group for the same taxable year and received by the
18        taxpayer or by a member of the taxpayer's unitary
19        business group (including amounts included in gross
20        income under Sections 951 through 964 of the Internal
21        Revenue Code and amounts included in gross income
22        under Section 78 of the Internal Revenue Code) with
23        respect to the stock of the same person to whom the
24        intangible expenses and costs were directly or
25        indirectly paid, incurred, or accrued. The preceding
26        sentence does not apply to the extent that the same

 

 

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1        dividends caused a reduction to the addition
2        modification required under Section 203(a)(2)(D-17) of
3        this Act. As used in this subparagraph, the term
4        "intangible expenses and costs" includes (1) expenses,
5        losses, and costs for, or related to, the direct or
6        indirect acquisition, use, maintenance or management,
7        ownership, sale, exchange, or any other disposition of
8        intangible property; (2) losses incurred, directly or
9        indirectly, from factoring transactions or discounting
10        transactions; (3) royalty, patent, technical, and
11        copyright fees; (4) licensing fees; and (5) other
12        similar expenses and costs. For purposes of this
13        subparagraph, "intangible property" includes patents,
14        patent applications, trade names, trademarks, service
15        marks, copyrights, mask works, trade secrets, and
16        similar types of intangible assets.
17            This paragraph shall not apply to the following:
18                (i) any item of intangible expenses or costs
19            paid, accrued, or incurred, directly or
20            indirectly, from a transaction with a person who
21            is subject in a foreign country or state, other
22            than a state which requires mandatory unitary
23            reporting, to a tax on or measured by net income
24            with respect to such item; or
25                (ii) any item of intangible expense or cost
26            paid, accrued, or incurred, directly or

 

 

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1            indirectly, if the taxpayer can establish, based
2            on a preponderance of the evidence, both of the
3            following:
4                    (a) the person during the same taxable
5                year paid, accrued, or incurred, the
6                intangible expense or cost to a person that is
7                not a related member, and
8                    (b) the transaction giving rise to the
9                intangible expense or cost between the
10                taxpayer and the person did not have as a
11                principal purpose the avoidance of Illinois
12                income tax, and is paid pursuant to a contract
13                or agreement that reflects arm's-length terms;
14                or
15                (iii) any item of intangible expense or cost
16            paid, accrued, or incurred, directly or
17            indirectly, from a transaction with a person if
18            the taxpayer establishes by clear and convincing
19            evidence, that the adjustments are unreasonable;
20            or if the taxpayer and the Director agree in
21            writing to the application or use of an
22            alternative method of apportionment under Section
23            304(f);
24                Nothing in this subsection shall preclude the
25            Director from making any other adjustment
26            otherwise allowed under Section 404 of this Act

 

 

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1            for any tax year beginning after the effective
2            date of this amendment provided such adjustment is
3            made pursuant to regulation adopted by the
4            Department and such regulations provide methods
5            and standards by which the Department will utilize
6            its authority under Section 404 of this Act;
7            (D-19) For taxable years ending on or after
8        December 31, 2008, an amount equal to the amount of
9        insurance premium expenses and costs otherwise allowed
10        as a deduction in computing base income, and that were
11        paid, accrued, or incurred, directly or indirectly, to
12        a person who would be a member of the same unitary
13        business group but for the fact that the person is
14        prohibited under Section 1501(a)(27) from being
15        included in the unitary business group because he or
16        she is ordinarily required to apportion business
17        income under different subsections of Section 304. The
18        addition modification required by this subparagraph
19        shall be reduced to the extent that dividends were
20        included in base income of the unitary group for the
21        same taxable year and received by the taxpayer or by a
22        member of the taxpayer's unitary business group
23        (including amounts included in gross income under
24        Sections 951 through 964 of the Internal Revenue Code
25        and amounts included in gross income under Section 78
26        of the Internal Revenue Code) with respect to the

 

 

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1        stock of the same person to whom the premiums and costs
2        were directly or indirectly paid, incurred, or
3        accrued. The preceding sentence does not apply to the
4        extent that the same dividends caused a reduction to
5        the addition modification required under Section
6        203(a)(2)(D-17) or Section 203(a)(2)(D-18) of this
7        Act;
8            (D-20) For taxable years beginning on or after
9        January 1, 2002 and ending on or before December 31,
10        2006, in the case of a distribution from a qualified
11        tuition program under Section 529 of the Internal
12        Revenue Code, other than (i) a distribution from a
13        College Savings Pool created under Section 16.5 of the
14        State Treasurer Act or (ii) a distribution from the
15        Illinois Prepaid Tuition Trust Fund, an amount equal
16        to the amount excluded from gross income under Section
17        529(c)(3)(B). For taxable years beginning on or after
18        January 1, 2007, in the case of a distribution from a
19        qualified tuition program under Section 529 of the
20        Internal Revenue Code, other than (i) a distribution
21        from a College Savings Pool created under Section 16.5
22        of the State Treasurer Act, (ii) a distribution from
23        the Illinois Prepaid Tuition Trust Fund, or (iii) a
24        distribution from a qualified tuition program under
25        Section 529 of the Internal Revenue Code that (I)
26        adopts and determines that its offering materials

 

 

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1        comply with the College Savings Plans Network's
2        disclosure principles and (II) has made reasonable
3        efforts to inform in-state residents of the existence
4        of in-state qualified tuition programs by informing
5        Illinois residents directly and, where applicable, to
6        inform financial intermediaries distributing the
7        program to inform in-state residents of the existence
8        of in-state qualified tuition programs at least
9        annually, an amount equal to the amount excluded from
10        gross income under Section 529(c)(3)(B).
11            For the purposes of this subparagraph (D-20), a
12        qualified tuition program has made reasonable efforts
13        if it makes disclosures (which may use the term
14        "in-state program" or "in-state plan" and need not
15        specifically refer to Illinois or its qualified
16        programs by name) (i) directly to prospective
17        participants in its offering materials or makes a
18        public disclosure, such as a website posting; and (ii)
19        where applicable, to intermediaries selling the
20        out-of-state program in the same manner that the
21        out-of-state program distributes its offering
22        materials;
23            (D-20.5) For taxable years beginning on or after
24        January 1, 2018, in the case of a distribution from a
25        qualified ABLE program under Section 529A of the
26        Internal Revenue Code, other than a distribution from

 

 

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1        a qualified ABLE program created under Section 16.6 of
2        the State Treasurer Act, an amount equal to the amount
3        excluded from gross income under Section 529A(c)(1)(B)
4        of the Internal Revenue Code;
5            (D-21) For taxable years beginning on or after
6        January 1, 2007, in the case of transfer of moneys from
7        a qualified tuition program under Section 529 of the
8        Internal Revenue Code that is administered by the
9        State to an out-of-state program, an amount equal to
10        the amount of moneys previously deducted from base
11        income under subsection (a)(2)(Y) of this Section;
12            (D-21.5) For taxable years beginning on or after
13        January 1, 2018, in the case of the transfer of moneys
14        from a qualified tuition program under Section 529 or
15        a qualified ABLE program under Section 529A of the
16        Internal Revenue Code that is administered by this
17        State to an ABLE account established under an
18        out-of-state ABLE account program, an amount equal to
19        the contribution component of the transferred amount
20        that was previously deducted from base income under
21        subsection (a)(2)(Y) or subsection (a)(2)(HH) of this
22        Section;
23            (D-22) For taxable years beginning on or after
24        January 1, 2009, and prior to January 1, 2018, in the
25        case of a nonqualified withdrawal or refund of moneys
26        from a qualified tuition program under Section 529 of

 

 

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1        the Internal Revenue Code administered by the State
2        that is not used for qualified expenses at an eligible
3        education institution, an amount equal to the
4        contribution component of the nonqualified withdrawal
5        or refund that was previously deducted from base
6        income under subsection (a)(2)(y) of this Section,
7        provided that the withdrawal or refund did not result
8        from the beneficiary's death or disability. For
9        taxable years beginning on or after January 1, 2018:
10        (1) in the case of a nonqualified withdrawal or
11        refund, as defined under Section 16.5 of the State
12        Treasurer Act, of moneys from a qualified tuition
13        program under Section 529 of the Internal Revenue Code
14        administered by the State, an amount equal to the
15        contribution component of the nonqualified withdrawal
16        or refund that was previously deducted from base
17        income under subsection (a)(2)(Y) of this Section, and
18        (2) in the case of a nonqualified withdrawal or refund
19        from a qualified ABLE program under Section 529A of
20        the Internal Revenue Code administered by the State
21        that is not used for qualified disability expenses, an
22        amount equal to the contribution component of the
23        nonqualified withdrawal or refund that was previously
24        deducted from base income under subsection (a)(2)(HH)
25        of this Section;
26            (D-23) An amount equal to the credit allowable to

 

 

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1        the taxpayer under Section 218(a) of this Act,
2        determined without regard to Section 218(c) of this
3        Act;
4            (D-24) For taxable years ending on or after
5        December 31, 2017, an amount equal to the deduction
6        allowed under Section 199 of the Internal Revenue Code
7        for the taxable year;
8            (D-25) In the case of a resident, an amount equal
9        to the amount of tax for which a credit is allowed
10        pursuant to Section 201(p)(7) of this Act;
11    and by deducting from the total so obtained the sum of the
12    following amounts:
13            (E) For taxable years ending before December 31,
14        2001, any amount included in such total in respect of
15        any compensation (including but not limited to any
16        compensation paid or accrued to a serviceman while a
17        prisoner of war or missing in action) paid to a
18        resident by reason of being on active duty in the Armed
19        Forces of the United States and in respect of any
20        compensation paid or accrued to a resident who as a
21        governmental employee was a prisoner of war or missing
22        in action, and in respect of any compensation paid to a
23        resident in 1971 or thereafter for annual training
24        performed pursuant to Sections 502 and 503, Title 32,
25        United States Code as a member of the Illinois
26        National Guard or, beginning with taxable years ending

 

 

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1        on or after December 31, 2007, the National Guard of
2        any other state. For taxable years ending on or after
3        December 31, 2001, any amount included in such total
4        in respect of any compensation (including but not
5        limited to any compensation paid or accrued to a
6        serviceman while a prisoner of war or missing in
7        action) paid to a resident by reason of being a member
8        of any component of the Armed Forces of the United
9        States and in respect of any compensation paid or
10        accrued to a resident who as a governmental employee
11        was a prisoner of war or missing in action, and in
12        respect of any compensation paid to a resident in 2001
13        or thereafter by reason of being a member of the
14        Illinois National Guard or, beginning with taxable
15        years ending on or after December 31, 2007, the
16        National Guard of any other state. The provisions of
17        this subparagraph (E) are exempt from the provisions
18        of Section 250;
19            (F) An amount equal to all amounts included in
20        such total pursuant to the provisions of Sections
21        402(a), 402(c), 403(a), 403(b), 406(a), 407(a), and
22        408 of the Internal Revenue Code, or included in such
23        total as distributions under the provisions of any
24        retirement or disability plan for employees of any
25        governmental agency or unit, or retirement payments to
26        retired partners, which payments are excluded in

 

 

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1        computing net earnings from self employment by Section
2        1402 of the Internal Revenue Code and regulations
3        adopted pursuant thereto;
4            (G) The valuation limitation amount;
5            (H) An amount equal to the amount of any tax
6        imposed by this Act which was refunded to the taxpayer
7        and included in such total for the taxable year;
8            (I) An amount equal to all amounts included in
9        such total pursuant to the provisions of Section 111
10        of the Internal Revenue Code as a recovery of items
11        previously deducted from adjusted gross income in the
12        computation of taxable income;
13            (J) An amount equal to those dividends included in
14        such total which were paid by a corporation which
15        conducts business operations in a River Edge
16        Redevelopment Zone or zones created under the River
17        Edge Redevelopment Zone Act, and conducts
18        substantially all of its operations in a River Edge
19        Redevelopment Zone or zones. This subparagraph (J) is
20        exempt from the provisions of Section 250;
21            (K) An amount equal to those dividends included in
22        such total that were paid by a corporation that
23        conducts business operations in a federally designated
24        Foreign Trade Zone or Sub-Zone and that is designated
25        a High Impact Business located in Illinois; provided
26        that dividends eligible for the deduction provided in

 

 

HB1752- 18 -LRB104 08500 HLH 18552 b

1        subparagraph (J) of paragraph (2) of this subsection
2        shall not be eligible for the deduction provided under
3        this subparagraph (K);
4            (L) For taxable years ending after December 31,
5        1983, an amount equal to all social security benefits
6        and railroad retirement benefits included in such
7        total pursuant to Sections 72(r) and 86 of the
8        Internal Revenue Code;
9            (M) With the exception of any amounts subtracted
10        under subparagraph (N), an amount equal to the sum of
11        all amounts disallowed as deductions by (i) Sections
12        171(a)(2) and 265(a)(2) of the Internal Revenue Code,
13        and all amounts of expenses allocable to interest and
14        disallowed as deductions by Section 265(a)(1) of the
15        Internal Revenue Code; and (ii) for taxable years
16        ending on or after August 13, 1999, Sections
17        171(a)(2), 265, 280C, and 832(b)(5)(B)(i) of the
18        Internal Revenue Code, plus, for taxable years ending
19        on or after December 31, 2011, Section 45G(e)(3) of
20        the Internal Revenue Code and, for taxable years
21        ending on or after December 31, 2008, any amount
22        included in gross income under Section 87 of the
23        Internal Revenue Code; the provisions of this
24        subparagraph are exempt from the provisions of Section
25        250;
26            (N) An amount equal to all amounts included in

 

 

HB1752- 19 -LRB104 08500 HLH 18552 b

1        such total which are exempt from taxation by this
2        State either by reason of its statutes or Constitution
3        or by reason of the Constitution, treaties or statutes
4        of the United States; provided that, in the case of any
5        statute of this State that exempts income derived from
6        bonds or other obligations from the tax imposed under
7        this Act, the amount exempted shall be the interest
8        net of bond premium amortization;
9            (O) An amount equal to any contribution made to a
10        job training project established pursuant to the Tax
11        Increment Allocation Redevelopment Act;
12            (P) An amount equal to the amount of the deduction
13        used to compute the federal income tax credit for
14        restoration of substantial amounts held under claim of
15        right for the taxable year pursuant to Section 1341 of
16        the Internal Revenue Code or of any itemized deduction
17        taken from adjusted gross income in the computation of
18        taxable income for restoration of substantial amounts
19        held under claim of right for the taxable year;
20            (Q) An amount equal to any amounts included in
21        such total, received by the taxpayer as an
22        acceleration in the payment of life, endowment or
23        annuity benefits in advance of the time they would
24        otherwise be payable as an indemnity for a terminal
25        illness;
26            (R) An amount equal to the amount of any federal or

 

 

HB1752- 20 -LRB104 08500 HLH 18552 b

1        State bonus paid to veterans of the Persian Gulf War;
2            (S) An amount, to the extent included in adjusted
3        gross income, equal to the amount of a contribution
4        made in the taxable year on behalf of the taxpayer to a
5        medical care savings account established under the
6        Medical Care Savings Account Act or the Medical Care
7        Savings Account Act of 2000 to the extent the
8        contribution is accepted by the account administrator
9        as provided in that Act;
10            (T) An amount, to the extent included in adjusted
11        gross income, equal to the amount of interest earned
12        in the taxable year on a medical care savings account
13        established under the Medical Care Savings Account Act
14        or the Medical Care Savings Account Act of 2000 on
15        behalf of the taxpayer, other than interest added
16        pursuant to item (D-5) of this paragraph (2);
17            (U) For one taxable year beginning on or after
18        January 1, 1994, an amount equal to the total amount of
19        tax imposed and paid under subsections (a) and (b) of
20        Section 201 of this Act on grant amounts received by
21        the taxpayer under the Nursing Home Grant Assistance
22        Act during the taxpayer's taxable years 1992 and 1993;
23            (V) Beginning with tax years ending on or after
24        December 31, 1995 and ending with tax years ending on
25        or before December 31, 2004, an amount equal to the
26        amount paid by a taxpayer who is a self-employed

 

 

HB1752- 21 -LRB104 08500 HLH 18552 b

1        taxpayer, a partner of a partnership, or a shareholder
2        in a Subchapter S corporation for health insurance or
3        long-term care insurance for that taxpayer or that
4        taxpayer's spouse or dependents, to the extent that
5        the amount paid for that health insurance or long-term
6        care insurance may be deducted under Section 213 of
7        the Internal Revenue Code, has not been deducted on
8        the federal income tax return of the taxpayer, and
9        does not exceed the taxable income attributable to
10        that taxpayer's income, self-employment income, or
11        Subchapter S corporation income; except that no
12        deduction shall be allowed under this item (V) if the
13        taxpayer is eligible to participate in any health
14        insurance or long-term care insurance plan of an
15        employer of the taxpayer or the taxpayer's spouse. The
16        amount of the health insurance and long-term care
17        insurance subtracted under this item (V) shall be
18        determined by multiplying total health insurance and
19        long-term care insurance premiums paid by the taxpayer
20        times a number that represents the fractional
21        percentage of eligible medical expenses under Section
22        213 of the Internal Revenue Code of 1986 not actually
23        deducted on the taxpayer's federal income tax return;
24            (W) For taxable years beginning on or after
25        January 1, 1998, all amounts included in the
26        taxpayer's federal gross income in the taxable year

 

 

HB1752- 22 -LRB104 08500 HLH 18552 b

1        from amounts converted from a regular IRA to a Roth
2        IRA. This paragraph is exempt from the provisions of
3        Section 250;
4            (X) For taxable year 1999 and thereafter, an
5        amount equal to the amount of any (i) distributions,
6        to the extent includible in gross income for federal
7        income tax purposes, made to the taxpayer because of
8        his or her status as a victim of persecution for racial
9        or religious reasons by Nazi Germany or any other Axis
10        regime or as an heir of the victim and (ii) items of
11        income, to the extent includible in gross income for
12        federal income tax purposes, attributable to, derived
13        from or in any way related to assets stolen from,
14        hidden from, or otherwise lost to a victim of
15        persecution for racial or religious reasons by Nazi
16        Germany or any other Axis regime immediately prior to,
17        during, and immediately after World War II, including,
18        but not limited to, interest on the proceeds
19        receivable as insurance under policies issued to a
20        victim of persecution for racial or religious reasons
21        by Nazi Germany or any other Axis regime by European
22        insurance companies immediately prior to and during
23        World War II; provided, however, this subtraction from
24        federal adjusted gross income does not apply to assets
25        acquired with such assets or with the proceeds from
26        the sale of such assets; provided, further, this

 

 

HB1752- 23 -LRB104 08500 HLH 18552 b

1        paragraph shall only apply to a taxpayer who was the
2        first recipient of such assets after their recovery
3        and who is a victim of persecution for racial or
4        religious reasons by Nazi Germany or any other Axis
5        regime or as an heir of the victim. The amount of and
6        the eligibility for any public assistance, benefit, or
7        similar entitlement is not affected by the inclusion
8        of items (i) and (ii) of this paragraph in gross income
9        for federal income tax purposes. This paragraph is
10        exempt from the provisions of Section 250;
11            (Y) For taxable years beginning on or after
12        January 1, 2002 and ending on or before December 31,
13        2004, moneys contributed in the taxable year to a
14        College Savings Pool account under Section 16.5 of the
15        State Treasurer Act, except that amounts excluded from
16        gross income under Section 529(c)(3)(C)(i) of the
17        Internal Revenue Code shall not be considered moneys
18        contributed under this subparagraph (Y). For taxable
19        years beginning on or after January 1, 2005, a maximum
20        of $10,000 contributed in the taxable year to (i) a
21        College Savings Pool account under Section 16.5 of the
22        State Treasurer Act or (ii) the Illinois Prepaid
23        Tuition Trust Fund, except that amounts excluded from
24        gross income under Section 529(c)(3)(C)(i) of the
25        Internal Revenue Code shall not be considered moneys
26        contributed under this subparagraph (Y). For purposes

 

 

HB1752- 24 -LRB104 08500 HLH 18552 b

1        of this subparagraph, contributions made by an
2        employer on behalf of an employee, or matching
3        contributions made by an employee, shall be treated as
4        made by the employee. This subparagraph (Y) is exempt
5        from the provisions of Section 250;
6            (Z) For taxable years 2001 and thereafter, for the
7        taxable year in which the bonus depreciation deduction
8        is taken on the taxpayer's federal income tax return
9        under subsection (k) of Section 168 of the Internal
10        Revenue Code and for each applicable taxable year
11        thereafter, an amount equal to "x", where:
12                (1) "y" equals the amount of the depreciation
13            deduction taken for the taxable year on the
14            taxpayer's federal income tax return on property
15            for which the bonus depreciation deduction was
16            taken in any year under subsection (k) of Section
17            168 of the Internal Revenue Code, but not
18            including the bonus depreciation deduction;
19                (2) for taxable years ending on or before
20            December 31, 2005, "x" equals "y" multiplied by 30
21            and then divided by 70 (or "y" multiplied by
22            0.429); and
23                (3) for taxable years ending after December
24            31, 2005:
25                    (i) for property on which a bonus
26                depreciation deduction of 30% of the adjusted

 

 

HB1752- 25 -LRB104 08500 HLH 18552 b

1                basis was taken, "x" equals "y" multiplied by
2                30 and then divided by 70 (or "y" multiplied
3                by 0.429);
4                    (ii) for property on which a bonus
5                depreciation deduction of 50% of the adjusted
6                basis was taken, "x" equals "y" multiplied by
7                1.0;
8                    (iii) for property on which a bonus
9                depreciation deduction of 100% of the adjusted
10                basis was taken in a taxable year ending on or
11                after December 31, 2021, "x" equals the
12                depreciation deduction that would be allowed
13                on that property if the taxpayer had made the
14                election under Section 168(k)(7) of the
15                Internal Revenue Code to not claim bonus
16                depreciation on that property; and
17                    (iv) for property on which a bonus
18                depreciation deduction of a percentage other
19                than 30%, 50% or 100% of the adjusted basis
20                was taken in a taxable year ending on or after
21                December 31, 2021, "x" equals "y" multiplied
22                by 100 times the percentage bonus depreciation
23                on the property (that is, 100(bonus%)) and
24                then divided by 100 times 1 minus the
25                percentage bonus depreciation on the property
26                (that is, 100(1-bonus%)).

 

 

HB1752- 26 -LRB104 08500 HLH 18552 b

1            The aggregate amount deducted under this
2        subparagraph in all taxable years for any one piece of
3        property may not exceed the amount of the bonus
4        depreciation deduction taken on that property on the
5        taxpayer's federal income tax return under subsection
6        (k) of Section 168 of the Internal Revenue Code. This
7        subparagraph (Z) is exempt from the provisions of
8        Section 250;
9            (AA) If the taxpayer sells, transfers, abandons,
10        or otherwise disposes of property for which the
11        taxpayer was required in any taxable year to make an
12        addition modification under subparagraph (D-15), then
13        an amount equal to that addition modification.
14            If the taxpayer continues to own property through
15        the last day of the last tax year for which a
16        subtraction is allowed with respect to that property
17        under subparagraph (Z) and for which the taxpayer was
18        required in any taxable year to make an addition
19        modification under subparagraph (D-15), then an amount
20        equal to that addition modification.
21            The taxpayer is allowed to take the deduction
22        under this subparagraph only once with respect to any
23        one piece of property.
24            This subparagraph (AA) is exempt from the
25        provisions of Section 250;
26            (BB) Any amount included in adjusted gross income,

 

 

HB1752- 27 -LRB104 08500 HLH 18552 b

1        other than salary, received by a driver in a
2        ridesharing arrangement using a motor vehicle;
3            (CC) The amount of (i) any interest income (net of
4        the deductions allocable thereto) taken into account
5        for the taxable year with respect to a transaction
6        with a taxpayer that is required to make an addition
7        modification with respect to such transaction under
8        Section 203(a)(2)(D-17), 203(b)(2)(E-12),
9        203(c)(2)(G-12), or 203(d)(2)(D-7), but not to exceed
10        the amount of that addition modification, and (ii) any
11        income from intangible property (net of the deductions
12        allocable thereto) taken into account for the taxable
13        year with respect to a transaction with a taxpayer
14        that is required to make an addition modification with
15        respect to such transaction under Section
16        203(a)(2)(D-18), 203(b)(2)(E-13), 203(c)(2)(G-13), or
17        203(d)(2)(D-8), but not to exceed the amount of that
18        addition modification. This subparagraph (CC) is
19        exempt from the provisions of Section 250;
20            (DD) An amount equal to the interest income taken
21        into account for the taxable year (net of the
22        deductions allocable thereto) with respect to
23        transactions with (i) a foreign person who would be a
24        member of the taxpayer's unitary business group but
25        for the fact that the foreign person's business
26        activity outside the United States is 80% or more of

 

 

HB1752- 28 -LRB104 08500 HLH 18552 b

1        that person's total business activity and (ii) for
2        taxable years ending on or after December 31, 2008, to
3        a person who would be a member of the same unitary
4        business group but for the fact that the person is
5        prohibited under Section 1501(a)(27) from being
6        included in the unitary business group because he or
7        she is ordinarily required to apportion business
8        income under different subsections of Section 304, but
9        not to exceed the addition modification required to be
10        made for the same taxable year under Section
11        203(a)(2)(D-17) for interest paid, accrued, or
12        incurred, directly or indirectly, to the same person.
13        This subparagraph (DD) is exempt from the provisions
14        of Section 250;
15            (EE) An amount equal to the income from intangible
16        property taken into account for the taxable year (net
17        of the deductions allocable thereto) with respect to
18        transactions with (i) a foreign person who would be a
19        member of the taxpayer's unitary business group but
20        for the fact that the foreign person's business
21        activity outside the United States is 80% or more of
22        that person's total business activity and (ii) for
23        taxable years ending on or after December 31, 2008, to
24        a person who would be a member of the same unitary
25        business group but for the fact that the person is
26        prohibited under Section 1501(a)(27) from being

 

 

HB1752- 29 -LRB104 08500 HLH 18552 b

1        included in the unitary business group because he or
2        she is ordinarily required to apportion business
3        income under different subsections of Section 304, but
4        not to exceed the addition modification required to be
5        made for the same taxable year under Section
6        203(a)(2)(D-18) for intangible expenses and costs
7        paid, accrued, or incurred, directly or indirectly, to
8        the same foreign person. This subparagraph (EE) is
9        exempt from the provisions of Section 250;
10            (FF) An amount equal to any amount awarded to the
11        taxpayer during the taxable year by the Court of
12        Claims under subsection (c) of Section 8 of the Court
13        of Claims Act for time unjustly served in a State
14        prison. This subparagraph (FF) is exempt from the
15        provisions of Section 250;
16            (GG) For taxable years ending on or after December
17        31, 2011, in the case of a taxpayer who was required to
18        add back any insurance premiums under Section
19        203(a)(2)(D-19), such taxpayer may elect to subtract
20        that part of a reimbursement received from the
21        insurance company equal to the amount of the expense
22        or loss (including expenses incurred by the insurance
23        company) that would have been taken into account as a
24        deduction for federal income tax purposes if the
25        expense or loss had been uninsured. If a taxpayer
26        makes the election provided for by this subparagraph

 

 

HB1752- 30 -LRB104 08500 HLH 18552 b

1        (GG), the insurer to which the premiums were paid must
2        add back to income the amount subtracted by the
3        taxpayer pursuant to this subparagraph (GG). This
4        subparagraph (GG) is exempt from the provisions of
5        Section 250;
6            (HH) For taxable years beginning on or after
7        January 1, 2018 and prior to January 1, 2028, a maximum
8        of $10,000 contributed in the taxable year to a
9        qualified ABLE account under Section 16.6 of the State
10        Treasurer Act, except that amounts excluded from gross
11        income under Section 529(c)(3)(C)(i) or Section
12        529A(c)(1)(C) of the Internal Revenue Code shall not
13        be considered moneys contributed under this
14        subparagraph (HH). For purposes of this subparagraph
15        (HH), contributions made by an employer on behalf of
16        an employee, or matching contributions made by an
17        employee, shall be treated as made by the employee;
18            (II) For taxable years that begin on or after
19        January 1, 2021 and begin before January 1, 2026, the
20        amount that is included in the taxpayer's federal
21        adjusted gross income pursuant to Section 61 of the
22        Internal Revenue Code as discharge of indebtedness
23        attributable to student loan forgiveness and that is
24        not excluded from the taxpayer's federal adjusted
25        gross income pursuant to paragraph (5) of subsection
26        (f) of Section 108 of the Internal Revenue Code;

 

 

HB1752- 31 -LRB104 08500 HLH 18552 b

1            (JJ) For taxable years beginning on or after
2        January 1, 2023, for any cannabis establishment
3        operating in this State and licensed under the
4        Cannabis Regulation and Tax Act or any cannabis
5        cultivation center or medical cannabis dispensing
6        organization operating in this State and licensed
7        under the Compassionate Use of Medical Cannabis
8        Program Act, an amount equal to the deductions that
9        were disallowed under Section 280E of the Internal
10        Revenue Code for the taxable year and that would not be
11        added back under this subsection. The provisions of
12        this subparagraph (JJ) are exempt from the provisions
13        of Section 250; and
14            (KK) To the extent includible in gross income for
15        federal income tax purposes, any amount awarded or
16        paid to the taxpayer as a result of a judgment or
17        settlement for fertility fraud as provided in Section
18        15 of the Illinois Fertility Fraud Act, donor
19        fertility fraud as provided in Section 20 of the
20        Illinois Fertility Fraud Act, or similar action in
21        another state; and
22            (LL) For taxable years beginning on or after
23        January 1, 2026, if the taxpayer is a qualified
24        worker, as defined in the Workforce Development
25        through Charitable Loan Repayment Act, an amount equal
26        to the amount included in the taxpayer's federal

 

 

HB1752- 32 -LRB104 08500 HLH 18552 b

1        adjusted gross income that is attributable to student
2        loan repayment assistance received by the taxpayer
3        during the taxable year from a qualified community
4        foundation under the provisions of the Workforce
5        Development through Through Charitable Loan Repayment
6        Act.
7            This subparagraph (LL) is exempt from the
8        provisions of Section 250; .
9            (MM) (LL) For taxable years beginning on or after
10        January 1, 2025, if the taxpayer is an eligible
11        resident as defined in the Medical Debt Relief Act, an
12        amount equal to the amount included in the taxpayer's
13        federal adjusted gross income that is attributable to
14        medical debt relief received by the taxpayer during
15        the taxable year from a nonprofit medical debt relief
16        coordinator under the provisions of the Medical Debt
17        Relief Act. This subparagraph (MM) (LL) is exempt from
18        the provisions of Section 250; .
19            (NN) For taxable years beginning on or after
20        January 1, 2026, any amount paid by the taxpayer's
21        employer on behalf of the taxpayer as part of an
22        educational assistance program, as defined in Section
23        127 of the Internal Revenue Code, regardless of
24        whether those amounts are included in the taxpayer's
25        federal adjusted gross income for the taxable year;
26        the deduction under this subparagraph shall apply only

 

 

HB1752- 33 -LRB104 08500 HLH 18552 b

1        to the first $5,250 of such assistance so furnished to
2        any individual; this subparagraph is exempt from the
3        provisions of Section 250; and
4            (OO) For taxable years beginning on or after
5        January 1, 2026, amounts paid by the taxpayer on
6        behalf of an employee of the taxpayer as part of an
7        educational assistance program, as defined in Section
8        127 of the Internal Revenue Code; the deduction under
9        this subparagraph shall apply only to the first $5,250
10        of such assistance so furnished to any particular
11        individual; this subparagraph is exempt from the
12        provisions of Section 250.
 
13    (b) Corporations.
14        (1) In general. In the case of a corporation, base
15    income means an amount equal to the taxpayer's taxable
16    income for the taxable year as modified by paragraph (2).
17        (2) Modifications. The taxable income referred to in
18    paragraph (1) shall be modified by adding thereto the sum
19    of the following amounts:
20            (A) An amount equal to all amounts paid or accrued
21        to the taxpayer as interest and all distributions
22        received from regulated investment companies during
23        the taxable year to the extent excluded from gross
24        income in the computation of taxable income;
25            (B) An amount equal to the amount of tax imposed by

 

 

HB1752- 34 -LRB104 08500 HLH 18552 b

1        this Act to the extent deducted from gross income in
2        the computation of taxable income for the taxable
3        year;
4            (C) In the case of a regulated investment company,
5        an amount equal to the excess of (i) the net long-term
6        capital gain for the taxable year, over (ii) the
7        amount of the capital gain dividends designated as
8        such in accordance with Section 852(b)(3)(C) of the
9        Internal Revenue Code and any amount designated under
10        Section 852(b)(3)(D) of the Internal Revenue Code,
11        attributable to the taxable year (this amendatory Act
12        of 1995 (Public Act 89-89) is declarative of existing
13        law and is not a new enactment);
14            (D) The amount of any net operating loss deduction
15        taken in arriving at taxable income, other than a net
16        operating loss carried forward from a taxable year
17        ending prior to December 31, 1986;
18            (E) For taxable years in which a net operating
19        loss carryback or carryforward from a taxable year
20        ending prior to December 31, 1986 is an element of
21        taxable income under paragraph (1) of subsection (e)
22        or subparagraph (E) of paragraph (2) of subsection
23        (e), the amount by which addition modifications other
24        than those provided by this subparagraph (E) exceeded
25        subtraction modifications in such earlier taxable
26        year, with the following limitations applied in the

 

 

HB1752- 35 -LRB104 08500 HLH 18552 b

1        order that they are listed:
2                (i) the addition modification relating to the
3            net operating loss carried back or forward to the
4            taxable year from any taxable year ending prior to
5            December 31, 1986 shall be reduced by the amount
6            of addition modification under this subparagraph
7            (E) which related to that net operating loss and
8            which was taken into account in calculating the
9            base income of an earlier taxable year, and
10                (ii) the addition modification relating to the
11            net operating loss carried back or forward to the
12            taxable year from any taxable year ending prior to
13            December 31, 1986 shall not exceed the amount of
14            such carryback or carryforward;
15            For taxable years in which there is a net
16        operating loss carryback or carryforward from more
17        than one other taxable year ending prior to December
18        31, 1986, the addition modification provided in this
19        subparagraph (E) shall be the sum of the amounts
20        computed independently under the preceding provisions
21        of this subparagraph (E) for each such taxable year;
22            (E-5) For taxable years ending after December 31,
23        1997, an amount equal to any eligible remediation
24        costs that the corporation deducted in computing
25        adjusted gross income and for which the corporation
26        claims a credit under subsection (l) of Section 201;

 

 

HB1752- 36 -LRB104 08500 HLH 18552 b

1            (E-10) For taxable years 2001 and thereafter, an
2        amount equal to the bonus depreciation deduction taken
3        on the taxpayer's federal income tax return for the
4        taxable year under subsection (k) of Section 168 of
5        the Internal Revenue Code;
6            (E-11) If the taxpayer sells, transfers, abandons,
7        or otherwise disposes of property for which the
8        taxpayer was required in any taxable year to make an
9        addition modification under subparagraph (E-10), then
10        an amount equal to the aggregate amount of the
11        deductions taken in all taxable years under
12        subparagraph (T) with respect to that property.
13            If the taxpayer continues to own property through
14        the last day of the last tax year for which a
15        subtraction is allowed with respect to that property
16        under subparagraph (T) and for which the taxpayer was
17        allowed in any taxable year to make a subtraction
18        modification under subparagraph (T), then an amount
19        equal to that subtraction modification.
20            The taxpayer is required to make the addition
21        modification under this subparagraph only once with
22        respect to any one piece of property;
23            (E-12) An amount equal to the amount otherwise
24        allowed as a deduction in computing base income for
25        interest paid, accrued, or incurred, directly or
26        indirectly, (i) for taxable years ending on or after

 

 

HB1752- 37 -LRB104 08500 HLH 18552 b

1        December 31, 2004, to a foreign person who would be a
2        member of the same unitary business group but for the
3        fact the foreign person's business activity outside
4        the United States is 80% or more of the foreign
5        person's total business activity and (ii) for taxable
6        years ending on or after December 31, 2008, to a person
7        who would be a member of the same unitary business
8        group but for the fact that the person is prohibited
9        under Section 1501(a)(27) from being included in the
10        unitary business group because he or she is ordinarily
11        required to apportion business income under different
12        subsections of Section 304. The addition modification
13        required by this subparagraph shall be reduced to the
14        extent that dividends were included in base income of
15        the unitary group for the same taxable year and
16        received by the taxpayer or by a member of the
17        taxpayer's unitary business group (including amounts
18        included in gross income pursuant to Sections 951
19        through 964 of the Internal Revenue Code and amounts
20        included in gross income under Section 78 of the
21        Internal Revenue Code) with respect to the stock of
22        the same person to whom the interest was paid,
23        accrued, or incurred.
24            This paragraph shall not apply to the following:
25                (i) an item of interest paid, accrued, or
26            incurred, directly or indirectly, to a person who

 

 

HB1752- 38 -LRB104 08500 HLH 18552 b

1            is subject in a foreign country or state, other
2            than a state which requires mandatory unitary
3            reporting, to a tax on or measured by net income
4            with respect to such interest; or
5                (ii) an item of interest paid, accrued, or
6            incurred, directly or indirectly, to a person if
7            the taxpayer can establish, based on a
8            preponderance of the evidence, both of the
9            following:
10                    (a) the person, during the same taxable
11                year, paid, accrued, or incurred, the interest
12                to a person that is not a related member, and
13                    (b) the transaction giving rise to the
14                interest expense between the taxpayer and the
15                person did not have as a principal purpose the
16                avoidance of Illinois income tax, and is paid
17                pursuant to a contract or agreement that
18                reflects an arm's-length interest rate and
19                terms; or
20                (iii) the taxpayer can establish, based on
21            clear and convincing evidence, that the interest
22            paid, accrued, or incurred relates to a contract
23            or agreement entered into at arm's-length rates
24            and terms and the principal purpose for the
25            payment is not federal or Illinois tax avoidance;
26            or

 

 

HB1752- 39 -LRB104 08500 HLH 18552 b

1                (iv) an item of interest paid, accrued, or
2            incurred, directly or indirectly, to a person if
3            the taxpayer establishes by clear and convincing
4            evidence that the adjustments are unreasonable; or
5            if the taxpayer and the Director agree in writing
6            to the application or use of an alternative method
7            of apportionment under Section 304(f).
8                Nothing in this subsection shall preclude the
9            Director from making any other adjustment
10            otherwise allowed under Section 404 of this Act
11            for any tax year beginning after the effective
12            date of this amendment provided such adjustment is
13            made pursuant to regulation adopted by the
14            Department and such regulations provide methods
15            and standards by which the Department will utilize
16            its authority under Section 404 of this Act;
17            (E-13) An amount equal to the amount of intangible
18        expenses and costs otherwise allowed as a deduction in
19        computing base income, and that were paid, accrued, or
20        incurred, directly or indirectly, (i) for taxable
21        years ending on or after December 31, 2004, to a
22        foreign person who would be a member of the same
23        unitary business group but for the fact that the
24        foreign person's business activity outside the United
25        States is 80% or more of that person's total business
26        activity and (ii) for taxable years ending on or after

 

 

HB1752- 40 -LRB104 08500 HLH 18552 b

1        December 31, 2008, to a person who would be a member of
2        the same unitary business group but for the fact that
3        the person is prohibited under Section 1501(a)(27)
4        from being included in the unitary business group
5        because he or she is ordinarily required to apportion
6        business income under different subsections of Section
7        304. The addition modification required by this
8        subparagraph shall be reduced to the extent that
9        dividends were included in base income of the unitary
10        group for the same taxable year and received by the
11        taxpayer or by a member of the taxpayer's unitary
12        business group (including amounts included in gross
13        income pursuant to Sections 951 through 964 of the
14        Internal Revenue Code and amounts included in gross
15        income under Section 78 of the Internal Revenue Code)
16        with respect to the stock of the same person to whom
17        the intangible expenses and costs were directly or
18        indirectly paid, incurred, or accrued. The preceding
19        sentence shall not apply to the extent that the same
20        dividends caused a reduction to the addition
21        modification required under Section 203(b)(2)(E-12) of
22        this Act. As used in this subparagraph, the term
23        "intangible expenses and costs" includes (1) expenses,
24        losses, and costs for, or related to, the direct or
25        indirect acquisition, use, maintenance or management,
26        ownership, sale, exchange, or any other disposition of

 

 

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1        intangible property; (2) losses incurred, directly or
2        indirectly, from factoring transactions or discounting
3        transactions; (3) royalty, patent, technical, and
4        copyright fees; (4) licensing fees; and (5) other
5        similar expenses and costs. For purposes of this
6        subparagraph, "intangible property" includes patents,
7        patent applications, trade names, trademarks, service
8        marks, copyrights, mask works, trade secrets, and
9        similar types of intangible assets.
10            This paragraph shall not apply to the following:
11                (i) any item of intangible expenses or costs
12            paid, accrued, or incurred, directly or
13            indirectly, from a transaction with a person who
14            is subject in a foreign country or state, other
15            than a state which requires mandatory unitary
16            reporting, to a tax on or measured by net income
17            with respect to such item; or
18                (ii) any item of intangible expense or cost
19            paid, accrued, or incurred, directly or
20            indirectly, if the taxpayer can establish, based
21            on a preponderance of the evidence, both of the
22            following:
23                    (a) the person during the same taxable
24                year paid, accrued, or incurred, the
25                intangible expense or cost to a person that is
26                not a related member, and

 

 

HB1752- 42 -LRB104 08500 HLH 18552 b

1                    (b) the transaction giving rise to the
2                intangible expense or cost between the
3                taxpayer and the person did not have as a
4                principal purpose the avoidance of Illinois
5                income tax, and is paid pursuant to a contract
6                or agreement that reflects arm's-length terms;
7                or
8                (iii) any item of intangible expense or cost
9            paid, accrued, or incurred, directly or
10            indirectly, from a transaction with a person if
11            the taxpayer establishes by clear and convincing
12            evidence, that the adjustments are unreasonable;
13            or if the taxpayer and the Director agree in
14            writing to the application or use of an
15            alternative method of apportionment under Section
16            304(f);
17                Nothing in this subsection shall preclude the
18            Director from making any other adjustment
19            otherwise allowed under Section 404 of this Act
20            for any tax year beginning after the effective
21            date of this amendment provided such adjustment is
22            made pursuant to regulation adopted by the
23            Department and such regulations provide methods
24            and standards by which the Department will utilize
25            its authority under Section 404 of this Act;
26            (E-14) For taxable years ending on or after

 

 

HB1752- 43 -LRB104 08500 HLH 18552 b

1        December 31, 2008, an amount equal to the amount of
2        insurance premium expenses and costs otherwise allowed
3        as a deduction in computing base income, and that were
4        paid, accrued, or incurred, directly or indirectly, to
5        a person who would be a member of the same unitary
6        business group but for the fact that the person is
7        prohibited under Section 1501(a)(27) from being
8        included in the unitary business group because he or
9        she is ordinarily required to apportion business
10        income under different subsections of Section 304. The
11        addition modification required by this subparagraph
12        shall be reduced to the extent that dividends were
13        included in base income of the unitary group for the
14        same taxable year and received by the taxpayer or by a
15        member of the taxpayer's unitary business group
16        (including amounts included in gross income under
17        Sections 951 through 964 of the Internal Revenue Code
18        and amounts included in gross income under Section 78
19        of the Internal Revenue Code) with respect to the
20        stock of the same person to whom the premiums and costs
21        were directly or indirectly paid, incurred, or
22        accrued. The preceding sentence does not apply to the
23        extent that the same dividends caused a reduction to
24        the addition modification required under Section
25        203(b)(2)(E-12) or Section 203(b)(2)(E-13) of this
26        Act;

 

 

HB1752- 44 -LRB104 08500 HLH 18552 b

1            (E-15) For taxable years beginning after December
2        31, 2008, any deduction for dividends paid by a
3        captive real estate investment trust that is allowed
4        to a real estate investment trust under Section
5        857(b)(2)(B) of the Internal Revenue Code for
6        dividends paid;
7            (E-16) An amount equal to the credit allowable to
8        the taxpayer under Section 218(a) of this Act,
9        determined without regard to Section 218(c) of this
10        Act;
11            (E-17) For taxable years ending on or after
12        December 31, 2017, an amount equal to the deduction
13        allowed under Section 199 of the Internal Revenue Code
14        for the taxable year;
15            (E-18) for taxable years beginning after December
16        31, 2018, an amount equal to the deduction allowed
17        under Section 250(a)(1)(A) of the Internal Revenue
18        Code for the taxable year;
19            (E-19) for taxable years ending on or after June
20        30, 2021, an amount equal to the deduction allowed
21        under Section 250(a)(1)(B)(i) of the Internal Revenue
22        Code for the taxable year;
23            (E-20) for taxable years ending on or after June
24        30, 2021, an amount equal to the deduction allowed
25        under Sections 243(e) and 245A(a) of the Internal
26        Revenue Code for the taxable year;

 

 

HB1752- 45 -LRB104 08500 HLH 18552 b

1            (E-21) the amount that is claimed as a federal
2        deduction when computing the taxpayer's federal
3        taxable income for the taxable year and that is
4        attributable to an endowment gift for which the
5        taxpayer receives a credit under the Illinois Gives
6        Tax Credit Act;
7    and by deducting from the total so obtained the sum of the
8    following amounts:
9            (F) An amount equal to the amount of any tax
10        imposed by this Act which was refunded to the taxpayer
11        and included in such total for the taxable year;
12            (G) An amount equal to any amount included in such
13        total under Section 78 of the Internal Revenue Code;
14            (H) In the case of a regulated investment company,
15        an amount equal to the amount of exempt interest
16        dividends as defined in subsection (b)(5) of Section
17        852 of the Internal Revenue Code, paid to shareholders
18        for the taxable year;
19            (I) With the exception of any amounts subtracted
20        under subparagraph (J), an amount equal to the sum of
21        all amounts disallowed as deductions by (i) Sections
22        171(a)(2) and 265(a)(2) and amounts disallowed as
23        interest expense by Section 291(a)(3) of the Internal
24        Revenue Code, and all amounts of expenses allocable to
25        interest and disallowed as deductions by Section
26        265(a)(1) of the Internal Revenue Code; and (ii) for

 

 

HB1752- 46 -LRB104 08500 HLH 18552 b

1        taxable years ending on or after August 13, 1999,
2        Sections 171(a)(2), 265, 280C, 291(a)(3), and
3        832(b)(5)(B)(i) of the Internal Revenue Code, plus,
4        for tax years ending on or after December 31, 2011,
5        amounts disallowed as deductions by Section 45G(e)(3)
6        of the Internal Revenue Code and, for taxable years
7        ending on or after December 31, 2008, any amount
8        included in gross income under Section 87 of the
9        Internal Revenue Code and the policyholders' share of
10        tax-exempt interest of a life insurance company under
11        Section 807(a)(2)(B) of the Internal Revenue Code (in
12        the case of a life insurance company with gross income
13        from a decrease in reserves for the tax year) or
14        Section 807(b)(1)(B) of the Internal Revenue Code (in
15        the case of a life insurance company allowed a
16        deduction for an increase in reserves for the tax
17        year); the provisions of this subparagraph are exempt
18        from the provisions of Section 250;
19            (J) An amount equal to all amounts included in
20        such total which are exempt from taxation by this
21        State either by reason of its statutes or Constitution
22        or by reason of the Constitution, treaties or statutes
23        of the United States; provided that, in the case of any
24        statute of this State that exempts income derived from
25        bonds or other obligations from the tax imposed under
26        this Act, the amount exempted shall be the interest

 

 

HB1752- 47 -LRB104 08500 HLH 18552 b

1        net of bond premium amortization;
2            (K) An amount equal to those dividends included in
3        such total which were paid by a corporation which
4        conducts business operations in a River Edge
5        Redevelopment Zone or zones created under the River
6        Edge Redevelopment Zone Act and conducts substantially
7        all of its operations in a River Edge Redevelopment
8        Zone or zones. This subparagraph (K) is exempt from
9        the provisions of Section 250;
10            (L) An amount equal to those dividends included in
11        such total that were paid by a corporation that
12        conducts business operations in a federally designated
13        Foreign Trade Zone or Sub-Zone and that is designated
14        a High Impact Business located in Illinois; provided
15        that dividends eligible for the deduction provided in
16        subparagraph (K) of paragraph 2 of this subsection
17        shall not be eligible for the deduction provided under
18        this subparagraph (L);
19            (M) For any taxpayer that is a financial
20        organization within the meaning of Section 304(c) of
21        this Act, an amount included in such total as interest
22        income from a loan or loans made by such taxpayer to a
23        borrower, to the extent that such a loan is secured by
24        property which is eligible for the River Edge
25        Redevelopment Zone Investment Credit. To determine the
26        portion of a loan or loans that is secured by property

 

 

HB1752- 48 -LRB104 08500 HLH 18552 b

1        eligible for a Section 201(f) investment credit to the
2        borrower, the entire principal amount of the loan or
3        loans between the taxpayer and the borrower should be
4        divided into the basis of the Section 201(f)
5        investment credit property which secures the loan or
6        loans, using for this purpose the original basis of
7        such property on the date that it was placed in service
8        in the River Edge Redevelopment Zone. The subtraction
9        modification available to the taxpayer in any year
10        under this subsection shall be that portion of the
11        total interest paid by the borrower with respect to
12        such loan attributable to the eligible property as
13        calculated under the previous sentence. This
14        subparagraph (M) is exempt from the provisions of
15        Section 250;
16            (M-1) For any taxpayer that is a financial
17        organization within the meaning of Section 304(c) of
18        this Act, an amount included in such total as interest
19        income from a loan or loans made by such taxpayer to a
20        borrower, to the extent that such a loan is secured by
21        property which is eligible for the High Impact
22        Business Investment Credit. To determine the portion
23        of a loan or loans that is secured by property eligible
24        for a Section 201(h) investment credit to the
25        borrower, the entire principal amount of the loan or
26        loans between the taxpayer and the borrower should be

 

 

HB1752- 49 -LRB104 08500 HLH 18552 b

1        divided into the basis of the Section 201(h)
2        investment credit property which secures the loan or
3        loans, using for this purpose the original basis of
4        such property on the date that it was placed in service
5        in a federally designated Foreign Trade Zone or
6        Sub-Zone located in Illinois. No taxpayer that is
7        eligible for the deduction provided in subparagraph
8        (M) of paragraph (2) of this subsection shall be
9        eligible for the deduction provided under this
10        subparagraph (M-1). The subtraction modification
11        available to taxpayers in any year under this
12        subsection shall be that portion of the total interest
13        paid by the borrower with respect to such loan
14        attributable to the eligible property as calculated
15        under the previous sentence;
16            (N) Two times any contribution made during the
17        taxable year to a designated zone organization to the
18        extent that the contribution (i) qualifies as a
19        charitable contribution under subsection (c) of
20        Section 170 of the Internal Revenue Code and (ii)
21        must, by its terms, be used for a project approved by
22        the Department of Commerce and Economic Opportunity
23        under Section 11 of the Illinois Enterprise Zone Act
24        or under Section 10-10 of the River Edge Redevelopment
25        Zone Act. This subparagraph (N) is exempt from the
26        provisions of Section 250;

 

 

HB1752- 50 -LRB104 08500 HLH 18552 b

1            (O) An amount equal to: (i) 85% for taxable years
2        ending on or before December 31, 1992, or, a
3        percentage equal to the percentage allowable under
4        Section 243(a)(1) of the Internal Revenue Code of 1986
5        for taxable years ending after December 31, 1992, of
6        the amount by which dividends included in taxable
7        income and received from a corporation that is not
8        created or organized under the laws of the United
9        States or any state or political subdivision thereof,
10        including, for taxable years ending on or after
11        December 31, 1988, dividends received or deemed
12        received or paid or deemed paid under Sections 951
13        through 965 of the Internal Revenue Code, exceed the
14        amount of the modification provided under subparagraph
15        (G) of paragraph (2) of this subsection (b) which is
16        related to such dividends, and including, for taxable
17        years ending on or after December 31, 2008, dividends
18        received from a captive real estate investment trust;
19        plus (ii) 100% of the amount by which dividends,
20        included in taxable income and received, including,
21        for taxable years ending on or after December 31,
22        1988, dividends received or deemed received or paid or
23        deemed paid under Sections 951 through 964 of the
24        Internal Revenue Code and including, for taxable years
25        ending on or after December 31, 2008, dividends
26        received from a captive real estate investment trust,

 

 

HB1752- 51 -LRB104 08500 HLH 18552 b

1        from any such corporation specified in clause (i) that
2        would but for the provisions of Section 1504(b)(3) of
3        the Internal Revenue Code be treated as a member of the
4        affiliated group which includes the dividend
5        recipient, exceed the amount of the modification
6        provided under subparagraph (G) of paragraph (2) of
7        this subsection (b) which is related to such
8        dividends. For taxable years ending on or after June
9        30, 2021, (i) for purposes of this subparagraph, the
10        term "dividend" does not include any amount treated as
11        a dividend under Section 1248 of the Internal Revenue
12        Code, and (ii) this subparagraph shall not apply to
13        dividends for which a deduction is allowed under
14        Section 245(a) of the Internal Revenue Code. This
15        subparagraph (O) is exempt from the provisions of
16        Section 250 of this Act;
17            (P) An amount equal to any contribution made to a
18        job training project established pursuant to the Tax
19        Increment Allocation Redevelopment Act;
20            (Q) An amount equal to the amount of the deduction
21        used to compute the federal income tax credit for
22        restoration of substantial amounts held under claim of
23        right for the taxable year pursuant to Section 1341 of
24        the Internal Revenue Code;
25            (R) On and after July 20, 1999, in the case of an
26        attorney-in-fact with respect to whom an interinsurer

 

 

HB1752- 52 -LRB104 08500 HLH 18552 b

1        or a reciprocal insurer has made the election under
2        Section 835 of the Internal Revenue Code, 26 U.S.C.
3        835, an amount equal to the excess, if any, of the
4        amounts paid or incurred by that interinsurer or
5        reciprocal insurer in the taxable year to the
6        attorney-in-fact over the deduction allowed to that
7        interinsurer or reciprocal insurer with respect to the
8        attorney-in-fact under Section 835(b) of the Internal
9        Revenue Code for the taxable year; the provisions of
10        this subparagraph are exempt from the provisions of
11        Section 250;
12            (S) For taxable years ending on or after December
13        31, 1997, in the case of a Subchapter S corporation, an
14        amount equal to all amounts of income allocable to a
15        shareholder subject to the Personal Property Tax
16        Replacement Income Tax imposed by subsections (c) and
17        (d) of Section 201 of this Act, including amounts
18        allocable to organizations exempt from federal income
19        tax by reason of Section 501(a) of the Internal
20        Revenue Code. This subparagraph (S) is exempt from the
21        provisions of Section 250;
22            (T) For taxable years 2001 and thereafter, for the
23        taxable year in which the bonus depreciation deduction
24        is taken on the taxpayer's federal income tax return
25        under subsection (k) of Section 168 of the Internal
26        Revenue Code and for each applicable taxable year

 

 

HB1752- 53 -LRB104 08500 HLH 18552 b

1        thereafter, an amount equal to "x", where:
2                (1) "y" equals the amount of the depreciation
3            deduction taken for the taxable year on the
4            taxpayer's federal income tax return on property
5            for which the bonus depreciation deduction was
6            taken in any year under subsection (k) of Section
7            168 of the Internal Revenue Code, but not
8            including the bonus depreciation deduction;
9                (2) for taxable years ending on or before
10            December 31, 2005, "x" equals "y" multiplied by 30
11            and then divided by 70 (or "y" multiplied by
12            0.429); and
13                (3) for taxable years ending after December
14            31, 2005:
15                    (i) for property on which a bonus
16                depreciation deduction of 30% of the adjusted
17                basis was taken, "x" equals "y" multiplied by
18                30 and then divided by 70 (or "y" multiplied
19                by 0.429);
20                    (ii) for property on which a bonus
21                depreciation deduction of 50% of the adjusted
22                basis was taken, "x" equals "y" multiplied by
23                1.0;
24                    (iii) for property on which a bonus
25                depreciation deduction of 100% of the adjusted
26                basis was taken in a taxable year ending on or

 

 

HB1752- 54 -LRB104 08500 HLH 18552 b

1                after December 31, 2021, "x" equals the
2                depreciation deduction that would be allowed
3                on that property if the taxpayer had made the
4                election under Section 168(k)(7) of the
5                Internal Revenue Code to not claim bonus
6                depreciation on that property; and
7                    (iv) for property on which a bonus
8                depreciation deduction of a percentage other
9                than 30%, 50% or 100% of the adjusted basis
10                was taken in a taxable year ending on or after
11                December 31, 2021, "x" equals "y" multiplied
12                by 100 times the percentage bonus depreciation
13                on the property (that is, 100(bonus%)) and
14                then divided by 100 times 1 minus the
15                percentage bonus depreciation on the property
16                (that is, 100(1-bonus%)).
17            The aggregate amount deducted under this
18        subparagraph in all taxable years for any one piece of
19        property may not exceed the amount of the bonus
20        depreciation deduction taken on that property on the
21        taxpayer's federal income tax return under subsection
22        (k) of Section 168 of the Internal Revenue Code. This
23        subparagraph (T) is exempt from the provisions of
24        Section 250;
25            (U) If the taxpayer sells, transfers, abandons, or
26        otherwise disposes of property for which the taxpayer

 

 

HB1752- 55 -LRB104 08500 HLH 18552 b

1        was required in any taxable year to make an addition
2        modification under subparagraph (E-10), then an amount
3        equal to that addition modification.
4            If the taxpayer continues to own property through
5        the last day of the last tax year for which a
6        subtraction is allowed with respect to that property
7        under subparagraph (T) and for which the taxpayer was
8        required in any taxable year to make an addition
9        modification under subparagraph (E-10), then an amount
10        equal to that addition modification.
11            The taxpayer is allowed to take the deduction
12        under this subparagraph only once with respect to any
13        one piece of property.
14            This subparagraph (U) is exempt from the
15        provisions of Section 250;
16            (V) The amount of: (i) any interest income (net of
17        the deductions allocable thereto) taken into account
18        for the taxable year with respect to a transaction
19        with a taxpayer that is required to make an addition
20        modification with respect to such transaction under
21        Section 203(a)(2)(D-17), 203(b)(2)(E-12),
22        203(c)(2)(G-12), or 203(d)(2)(D-7), but not to exceed
23        the amount of such addition modification, (ii) any
24        income from intangible property (net of the deductions
25        allocable thereto) taken into account for the taxable
26        year with respect to a transaction with a taxpayer

 

 

HB1752- 56 -LRB104 08500 HLH 18552 b

1        that is required to make an addition modification with
2        respect to such transaction under Section
3        203(a)(2)(D-18), 203(b)(2)(E-13), 203(c)(2)(G-13), or
4        203(d)(2)(D-8), but not to exceed the amount of such
5        addition modification, and (iii) any insurance premium
6        income (net of deductions allocable thereto) taken
7        into account for the taxable year with respect to a
8        transaction with a taxpayer that is required to make
9        an addition modification with respect to such
10        transaction under Section 203(a)(2)(D-19), Section
11        203(b)(2)(E-14), Section 203(c)(2)(G-14), or Section
12        203(d)(2)(D-9), but not to exceed the amount of that
13        addition modification. This subparagraph (V) is exempt
14        from the provisions of Section 250;
15            (W) An amount equal to the interest income taken
16        into account for the taxable year (net of the
17        deductions allocable thereto) with respect to
18        transactions with (i) a foreign person who would be a
19        member of the taxpayer's unitary business group but
20        for the fact that the foreign person's business
21        activity outside the United States is 80% or more of
22        that person's total business activity and (ii) for
23        taxable years ending on or after December 31, 2008, to
24        a person who would be a member of the same unitary
25        business group but for the fact that the person is
26        prohibited under Section 1501(a)(27) from being

 

 

HB1752- 57 -LRB104 08500 HLH 18552 b

1        included in the unitary business group because he or
2        she is ordinarily required to apportion business
3        income under different subsections of Section 304, but
4        not to exceed the addition modification required to be
5        made for the same taxable year under Section
6        203(b)(2)(E-12) for interest paid, accrued, or
7        incurred, directly or indirectly, to the same person.
8        This subparagraph (W) is exempt from the provisions of
9        Section 250;
10            (X) An amount equal to the income from intangible
11        property taken into account for the taxable year (net
12        of the deductions allocable thereto) with respect to
13        transactions with (i) a foreign person who would be a
14        member of the taxpayer's unitary business group but
15        for the fact that the foreign person's business
16        activity outside the United States is 80% or more of
17        that person's total business activity and (ii) for
18        taxable years ending on or after December 31, 2008, to
19        a person who would be a member of the same unitary
20        business group but for the fact that the person is
21        prohibited under Section 1501(a)(27) from being
22        included in the unitary business group because he or
23        she is ordinarily required to apportion business
24        income under different subsections of Section 304, but
25        not to exceed the addition modification required to be
26        made for the same taxable year under Section

 

 

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1        203(b)(2)(E-13) for intangible expenses and costs
2        paid, accrued, or incurred, directly or indirectly, to
3        the same foreign person. This subparagraph (X) is
4        exempt from the provisions of Section 250;
5            (Y) For taxable years ending on or after December
6        31, 2011, in the case of a taxpayer who was required to
7        add back any insurance premiums under Section
8        203(b)(2)(E-14), such taxpayer may elect to subtract
9        that part of a reimbursement received from the
10        insurance company equal to the amount of the expense
11        or loss (including expenses incurred by the insurance
12        company) that would have been taken into account as a
13        deduction for federal income tax purposes if the
14        expense or loss had been uninsured. If a taxpayer
15        makes the election provided for by this subparagraph
16        (Y), the insurer to which the premiums were paid must
17        add back to income the amount subtracted by the
18        taxpayer pursuant to this subparagraph (Y). This
19        subparagraph (Y) is exempt from the provisions of
20        Section 250;
21            (Z) The difference between the nondeductible
22        controlled foreign corporation dividends under Section
23        965(e)(3) of the Internal Revenue Code over the
24        taxable income of the taxpayer, computed without
25        regard to Section 965(e)(2)(A) of the Internal Revenue
26        Code, and without regard to any net operating loss

 

 

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1        deduction. This subparagraph (Z) is exempt from the
2        provisions of Section 250; and
3            (AA) For taxable years beginning on or after
4        January 1, 2023, for any cannabis establishment
5        operating in this State and licensed under the
6        Cannabis Regulation and Tax Act or any cannabis
7        cultivation center or medical cannabis dispensing
8        organization operating in this State and licensed
9        under the Compassionate Use of Medical Cannabis
10        Program Act, an amount equal to the deductions that
11        were disallowed under Section 280E of the Internal
12        Revenue Code for the taxable year and that would not be
13        added back under this subsection. The provisions of
14        this subparagraph (AA) are exempt from the provisions
15        of Section 250; and .
16            (BB) For taxable years beginning on or after
17        January 1, 2026, amounts paid by the taxpayer on
18        behalf of an employee of the taxpayer as part of an
19        educational assistance program, as defined in Section
20        127 of the Internal Revenue Code. The deduction under
21        this subparagraph shall apply only to the first $5,250
22        of such assistance so furnished to any particular
23        individual. This subparagraph is exempt from the
24        provisions of Section 250.
25        (3) Special rule. For purposes of paragraph (2)(A),
26    "gross income" in the case of a life insurance company,

 

 

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1    for tax years ending on and after December 31, 1994, and
2    prior to December 31, 2011, shall mean the gross
3    investment income for the taxable year and, for tax years
4    ending on or after December 31, 2011, shall mean all
5    amounts included in life insurance gross income under
6    Section 803(a)(3) of the Internal Revenue Code.
 
7    (c) Trusts and estates.
8        (1) In general. In the case of a trust or estate, base
9    income means an amount equal to the taxpayer's taxable
10    income for the taxable year as modified by paragraph (2).
11        (2) Modifications. Subject to the provisions of
12    paragraph (3), the taxable income referred to in paragraph
13    (1) shall be modified by adding thereto the sum of the
14    following amounts:
15            (A) An amount equal to all amounts paid or accrued
16        to the taxpayer as interest or dividends during the
17        taxable year to the extent excluded from gross income
18        in the computation of taxable income;
19            (B) In the case of (i) an estate, $600; (ii) a
20        trust which, under its governing instrument, is
21        required to distribute all of its income currently,
22        $300; and (iii) any other trust, $100, but in each such
23        case, only to the extent such amount was deducted in
24        the computation of taxable income;
25            (C) An amount equal to the amount of tax imposed by

 

 

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1        this Act to the extent deducted from gross income in
2        the computation of taxable income for the taxable
3        year;
4            (D) The amount of any net operating loss deduction
5        taken in arriving at taxable income, other than a net
6        operating loss carried forward from a taxable year
7        ending prior to December 31, 1986;
8            (E) For taxable years in which a net operating
9        loss carryback or carryforward from a taxable year
10        ending prior to December 31, 1986 is an element of
11        taxable income under paragraph (1) of subsection (e)
12        or subparagraph (E) of paragraph (2) of subsection
13        (e), the amount by which addition modifications other
14        than those provided by this subparagraph (E) exceeded
15        subtraction modifications in such taxable year, with
16        the following limitations applied in the order that
17        they are listed:
18                (i) the addition modification relating to the
19            net operating loss carried back or forward to the
20            taxable year from any taxable year ending prior to
21            December 31, 1986 shall be reduced by the amount
22            of addition modification under this subparagraph
23            (E) which related to that net operating loss and
24            which was taken into account in calculating the
25            base income of an earlier taxable year, and
26                (ii) the addition modification relating to the

 

 

HB1752- 62 -LRB104 08500 HLH 18552 b

1            net operating loss carried back or forward to the
2            taxable year from any taxable year ending prior to
3            December 31, 1986 shall not exceed the amount of
4            such carryback or carryforward;
5            For taxable years in which there is a net
6        operating loss carryback or carryforward from more
7        than one other taxable year ending prior to December
8        31, 1986, the addition modification provided in this
9        subparagraph (E) shall be the sum of the amounts
10        computed independently under the preceding provisions
11        of this subparagraph (E) for each such taxable year;
12            (F) For taxable years ending on or after January
13        1, 1989, an amount equal to the tax deducted pursuant
14        to Section 164 of the Internal Revenue Code if the
15        trust or estate is claiming the same tax for purposes
16        of the Illinois foreign tax credit under Section 601
17        of this Act;
18            (G) An amount equal to the amount of the capital
19        gain deduction allowable under the Internal Revenue
20        Code, to the extent deducted from gross income in the
21        computation of taxable income;
22            (G-5) For taxable years ending after December 31,
23        1997, an amount equal to any eligible remediation
24        costs that the trust or estate deducted in computing
25        adjusted gross income and for which the trust or
26        estate claims a credit under subsection (l) of Section

 

 

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1        201;
2            (G-10) For taxable years 2001 and thereafter, an
3        amount equal to the bonus depreciation deduction taken
4        on the taxpayer's federal income tax return for the
5        taxable year under subsection (k) of Section 168 of
6        the Internal Revenue Code; and
7            (G-11) If the taxpayer sells, transfers, abandons,
8        or otherwise disposes of property for which the
9        taxpayer was required in any taxable year to make an
10        addition modification under subparagraph (G-10), then
11        an amount equal to the aggregate amount of the
12        deductions taken in all taxable years under
13        subparagraph (R) with respect to that property.
14            If the taxpayer continues to own property through
15        the last day of the last tax year for which a
16        subtraction is allowed with respect to that property
17        under subparagraph (R) and for which the taxpayer was
18        allowed in any taxable year to make a subtraction
19        modification under subparagraph (R), then an amount
20        equal to that subtraction modification.
21            The taxpayer is required to make the addition
22        modification under this subparagraph only once with
23        respect to any one piece of property;
24            (G-12) An amount equal to the amount otherwise
25        allowed as a deduction in computing base income for
26        interest paid, accrued, or incurred, directly or

 

 

HB1752- 64 -LRB104 08500 HLH 18552 b

1        indirectly, (i) for taxable years ending on or after
2        December 31, 2004, to a foreign person who would be a
3        member of the same unitary business group but for the
4        fact that the foreign person's business activity
5        outside the United States is 80% or more of the foreign
6        person's total business activity and (ii) for taxable
7        years ending on or after December 31, 2008, to a person
8        who would be a member of the same unitary business
9        group but for the fact that the person is prohibited
10        under Section 1501(a)(27) from being included in the
11        unitary business group because he or she is ordinarily
12        required to apportion business income under different
13        subsections of Section 304. The addition modification
14        required by this subparagraph shall be reduced to the
15        extent that dividends were included in base income of
16        the unitary group for the same taxable year and
17        received by the taxpayer or by a member of the
18        taxpayer's unitary business group (including amounts
19        included in gross income pursuant to Sections 951
20        through 964 of the Internal Revenue Code and amounts
21        included in gross income under Section 78 of the
22        Internal Revenue Code) with respect to the stock of
23        the same person to whom the interest was paid,
24        accrued, or incurred.
25            This paragraph shall not apply to the following:
26                (i) an item of interest paid, accrued, or

 

 

HB1752- 65 -LRB104 08500 HLH 18552 b

1            incurred, directly or indirectly, to a person who
2            is subject in a foreign country or state, other
3            than a state which requires mandatory unitary
4            reporting, to a tax on or measured by net income
5            with respect to such interest; or
6                (ii) an item of interest paid, accrued, or
7            incurred, directly or indirectly, to a person if
8            the taxpayer can establish, based on a
9            preponderance of the evidence, both of the
10            following:
11                    (a) the person, during the same taxable
12                year, paid, accrued, or incurred, the interest
13                to a person that is not a related member, and
14                    (b) the transaction giving rise to the
15                interest expense between the taxpayer and the
16                person did not have as a principal purpose the
17                avoidance of Illinois income tax, and is paid
18                pursuant to a contract or agreement that
19                reflects an arm's-length interest rate and
20                terms; or
21                (iii) the taxpayer can establish, based on
22            clear and convincing evidence, that the interest
23            paid, accrued, or incurred relates to a contract
24            or agreement entered into at arm's-length rates
25            and terms and the principal purpose for the
26            payment is not federal or Illinois tax avoidance;

 

 

HB1752- 66 -LRB104 08500 HLH 18552 b

1            or
2                (iv) an item of interest paid, accrued, or
3            incurred, directly or indirectly, to a person if
4            the taxpayer establishes by clear and convincing
5            evidence that the adjustments are unreasonable; or
6            if the taxpayer and the Director agree in writing
7            to the application or use of an alternative method
8            of apportionment under Section 304(f).
9                Nothing in this subsection shall preclude the
10            Director from making any other adjustment
11            otherwise allowed under Section 404 of this Act
12            for any tax year beginning after the effective
13            date of this amendment provided such adjustment is
14            made pursuant to regulation adopted by the
15            Department and such regulations provide methods
16            and standards by which the Department will utilize
17            its authority under Section 404 of this Act;
18            (G-13) An amount equal to the amount of intangible
19        expenses and costs otherwise allowed as a deduction in
20        computing base income, and that were paid, accrued, or
21        incurred, directly or indirectly, (i) for taxable
22        years ending on or after December 31, 2004, to a
23        foreign person who would be a member of the same
24        unitary business group but for the fact that the
25        foreign person's business activity outside the United
26        States is 80% or more of that person's total business

 

 

HB1752- 67 -LRB104 08500 HLH 18552 b

1        activity and (ii) for taxable years ending on or after
2        December 31, 2008, to a person who would be a member of
3        the same unitary business group but for the fact that
4        the person is prohibited under Section 1501(a)(27)
5        from being included in the unitary business group
6        because he or she is ordinarily required to apportion
7        business income under different subsections of Section
8        304. The addition modification required by this
9        subparagraph shall be reduced to the extent that
10        dividends were included in base income of the unitary
11        group for the same taxable year and received by the
12        taxpayer or by a member of the taxpayer's unitary
13        business group (including amounts included in gross
14        income pursuant to Sections 951 through 964 of the
15        Internal Revenue Code and amounts included in gross
16        income under Section 78 of the Internal Revenue Code)
17        with respect to the stock of the same person to whom
18        the intangible expenses and costs were directly or
19        indirectly paid, incurred, or accrued. The preceding
20        sentence shall not apply to the extent that the same
21        dividends caused a reduction to the addition
22        modification required under Section 203(c)(2)(G-12) of
23        this Act. As used in this subparagraph, the term
24        "intangible expenses and costs" includes: (1)
25        expenses, losses, and costs for or related to the
26        direct or indirect acquisition, use, maintenance or

 

 

HB1752- 68 -LRB104 08500 HLH 18552 b

1        management, ownership, sale, exchange, or any other
2        disposition of intangible property; (2) losses
3        incurred, directly or indirectly, from factoring
4        transactions or discounting transactions; (3) royalty,
5        patent, technical, and copyright fees; (4) licensing
6        fees; and (5) other similar expenses and costs. For
7        purposes of this subparagraph, "intangible property"
8        includes patents, patent applications, trade names,
9        trademarks, service marks, copyrights, mask works,
10        trade secrets, and similar types of intangible assets.
11            This paragraph shall not apply to the following:
12                (i) any item of intangible expenses or costs
13            paid, accrued, or incurred, directly or
14            indirectly, from a transaction with a person who
15            is subject in a foreign country or state, other
16            than a state which requires mandatory unitary
17            reporting, to a tax on or measured by net income
18            with respect to such item; or
19                (ii) any item of intangible expense or cost
20            paid, accrued, or incurred, directly or
21            indirectly, if the taxpayer can establish, based
22            on a preponderance of the evidence, both of the
23            following:
24                    (a) the person during the same taxable
25                year paid, accrued, or incurred, the
26                intangible expense or cost to a person that is

 

 

HB1752- 69 -LRB104 08500 HLH 18552 b

1                not a related member, and
2                    (b) the transaction giving rise to the
3                intangible expense or cost between the
4                taxpayer and the person did not have as a
5                principal purpose the avoidance of Illinois
6                income tax, and is paid pursuant to a contract
7                or agreement that reflects arm's-length terms;
8                or
9                (iii) any item of intangible expense or cost
10            paid, accrued, or incurred, directly or
11            indirectly, from a transaction with a person if
12            the taxpayer establishes by clear and convincing
13            evidence, that the adjustments are unreasonable;
14            or if the taxpayer and the Director agree in
15            writing to the application or use of an
16            alternative method of apportionment under Section
17            304(f);
18                Nothing in this subsection shall preclude the
19            Director from making any other adjustment
20            otherwise allowed under Section 404 of this Act
21            for any tax year beginning after the effective
22            date of this amendment provided such adjustment is
23            made pursuant to regulation adopted by the
24            Department and such regulations provide methods
25            and standards by which the Department will utilize
26            its authority under Section 404 of this Act;

 

 

HB1752- 70 -LRB104 08500 HLH 18552 b

1            (G-14) For taxable years ending on or after
2        December 31, 2008, an amount equal to the amount of
3        insurance premium expenses and costs otherwise allowed
4        as a deduction in computing base income, and that were
5        paid, accrued, or incurred, directly or indirectly, to
6        a person who would be a member of the same unitary
7        business group but for the fact that the person is
8        prohibited under Section 1501(a)(27) from being
9        included in the unitary business group because he or
10        she is ordinarily required to apportion business
11        income under different subsections of Section 304. The
12        addition modification required by this subparagraph
13        shall be reduced to the extent that dividends were
14        included in base income of the unitary group for the
15        same taxable year and received by the taxpayer or by a
16        member of the taxpayer's unitary business group
17        (including amounts included in gross income under
18        Sections 951 through 964 of the Internal Revenue Code
19        and amounts included in gross income under Section 78
20        of the Internal Revenue Code) with respect to the
21        stock of the same person to whom the premiums and costs
22        were directly or indirectly paid, incurred, or
23        accrued. The preceding sentence does not apply to the
24        extent that the same dividends caused a reduction to
25        the addition modification required under Section
26        203(c)(2)(G-12) or Section 203(c)(2)(G-13) of this

 

 

HB1752- 71 -LRB104 08500 HLH 18552 b

1        Act;
2            (G-15) An amount equal to the credit allowable to
3        the taxpayer under Section 218(a) of this Act,
4        determined without regard to Section 218(c) of this
5        Act;
6            (G-16) For taxable years ending on or after
7        December 31, 2017, an amount equal to the deduction
8        allowed under Section 199 of the Internal Revenue Code
9        for the taxable year;
10            (G-17) the amount that is claimed as a federal
11        deduction when computing the taxpayer's federal
12        taxable income for the taxable year and that is
13        attributable to an endowment gift for which the
14        taxpayer receives a credit under the Illinois Gives
15        Tax Credit Act;
16    and by deducting from the total so obtained the sum of the
17    following amounts:
18            (H) An amount equal to all amounts included in
19        such total pursuant to the provisions of Sections
20        402(a), 402(c), 403(a), 403(b), 406(a), 407(a) and 408
21        of the Internal Revenue Code or included in such total
22        as distributions under the provisions of any
23        retirement or disability plan for employees of any
24        governmental agency or unit, or retirement payments to
25        retired partners, which payments are excluded in
26        computing net earnings from self employment by Section

 

 

HB1752- 72 -LRB104 08500 HLH 18552 b

1        1402 of the Internal Revenue Code and regulations
2        adopted pursuant thereto;
3            (I) The valuation limitation amount;
4            (J) An amount equal to the amount of any tax
5        imposed by this Act which was refunded to the taxpayer
6        and included in such total for the taxable year;
7            (K) An amount equal to all amounts included in
8        taxable income as modified by subparagraphs (A), (B),
9        (C), (D), (E), (F) and (G) which are exempt from
10        taxation by this State either by reason of its
11        statutes or Constitution or by reason of the
12        Constitution, treaties or statutes of the United
13        States; provided that, in the case of any statute of
14        this State that exempts income derived from bonds or
15        other obligations from the tax imposed under this Act,
16        the amount exempted shall be the interest net of bond
17        premium amortization;
18            (L) With the exception of any amounts subtracted
19        under subparagraph (K), an amount equal to the sum of
20        all amounts disallowed as deductions by (i) Sections
21        171(a)(2) and 265(a)(2) of the Internal Revenue Code,
22        and all amounts of expenses allocable to interest and
23        disallowed as deductions by Section 265(a)(1) of the
24        Internal Revenue Code; and (ii) for taxable years
25        ending on or after August 13, 1999, Sections
26        171(a)(2), 265, 280C, and 832(b)(5)(B)(i) of the

 

 

HB1752- 73 -LRB104 08500 HLH 18552 b

1        Internal Revenue Code, plus, (iii) for taxable years
2        ending on or after December 31, 2011, Section
3        45G(e)(3) of the Internal Revenue Code and, for
4        taxable years ending on or after December 31, 2008,
5        any amount included in gross income under Section 87
6        of the Internal Revenue Code; the provisions of this
7        subparagraph are exempt from the provisions of Section
8        250;
9            (M) An amount equal to those dividends included in
10        such total which were paid by a corporation which
11        conducts business operations in a River Edge
12        Redevelopment Zone or zones created under the River
13        Edge Redevelopment Zone Act and conducts substantially
14        all of its operations in a River Edge Redevelopment
15        Zone or zones. This subparagraph (M) is exempt from
16        the provisions of Section 250;
17            (N) An amount equal to any contribution made to a
18        job training project established pursuant to the Tax
19        Increment Allocation Redevelopment Act;
20            (O) An amount equal to those dividends included in
21        such total that were paid by a corporation that
22        conducts business operations in a federally designated
23        Foreign Trade Zone or Sub-Zone and that is designated
24        a High Impact Business located in Illinois; provided
25        that dividends eligible for the deduction provided in
26        subparagraph (M) of paragraph (2) of this subsection

 

 

HB1752- 74 -LRB104 08500 HLH 18552 b

1        shall not be eligible for the deduction provided under
2        this subparagraph (O);
3            (P) An amount equal to the amount of the deduction
4        used to compute the federal income tax credit for
5        restoration of substantial amounts held under claim of
6        right for the taxable year pursuant to Section 1341 of
7        the Internal Revenue Code;
8            (Q) For taxable year 1999 and thereafter, an
9        amount equal to the amount of any (i) distributions,
10        to the extent includible in gross income for federal
11        income tax purposes, made to the taxpayer because of
12        his or her status as a victim of persecution for racial
13        or religious reasons by Nazi Germany or any other Axis
14        regime or as an heir of the victim and (ii) items of
15        income, to the extent includible in gross income for
16        federal income tax purposes, attributable to, derived
17        from or in any way related to assets stolen from,
18        hidden from, or otherwise lost to a victim of
19        persecution for racial or religious reasons by Nazi
20        Germany or any other Axis regime immediately prior to,
21        during, and immediately after World War II, including,
22        but not limited to, interest on the proceeds
23        receivable as insurance under policies issued to a
24        victim of persecution for racial or religious reasons
25        by Nazi Germany or any other Axis regime by European
26        insurance companies immediately prior to and during

 

 

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1        World War II; provided, however, this subtraction from
2        federal adjusted gross income does not apply to assets
3        acquired with such assets or with the proceeds from
4        the sale of such assets; provided, further, this
5        paragraph shall only apply to a taxpayer who was the
6        first recipient of such assets after their recovery
7        and who is a victim of persecution for racial or
8        religious reasons by Nazi Germany or any other Axis
9        regime or as an heir of the victim. The amount of and
10        the eligibility for any public assistance, benefit, or
11        similar entitlement is not affected by the inclusion
12        of items (i) and (ii) of this paragraph in gross income
13        for federal income tax purposes. This paragraph is
14        exempt from the provisions of Section 250;
15            (R) For taxable years 2001 and thereafter, for the
16        taxable year in which the bonus depreciation deduction
17        is taken on the taxpayer's federal income tax return
18        under subsection (k) of Section 168 of the Internal
19        Revenue Code and for each applicable taxable year
20        thereafter, an amount equal to "x", where:
21                (1) "y" equals the amount of the depreciation
22            deduction taken for the taxable year on the
23            taxpayer's federal income tax return on property
24            for which the bonus depreciation deduction was
25            taken in any year under subsection (k) of Section
26            168 of the Internal Revenue Code, but not

 

 

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1            including the bonus depreciation deduction;
2                (2) for taxable years ending on or before
3            December 31, 2005, "x" equals "y" multiplied by 30
4            and then divided by 70 (or "y" multiplied by
5            0.429); and
6                (3) for taxable years ending after December
7            31, 2005:
8                    (i) for property on which a bonus
9                depreciation deduction of 30% of the adjusted
10                basis was taken, "x" equals "y" multiplied by
11                30 and then divided by 70 (or "y" multiplied
12                by 0.429);
13                    (ii) for property on which a bonus
14                depreciation deduction of 50% of the adjusted
15                basis was taken, "x" equals "y" multiplied by
16                1.0;
17                    (iii) for property on which a bonus
18                depreciation deduction of 100% of the adjusted
19                basis was taken in a taxable year ending on or
20                after December 31, 2021, "x" equals the
21                depreciation deduction that would be allowed
22                on that property if the taxpayer had made the
23                election under Section 168(k)(7) of the
24                Internal Revenue Code to not claim bonus
25                depreciation on that property; and
26                    (iv) for property on which a bonus

 

 

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1                depreciation deduction of a percentage other
2                than 30%, 50% or 100% of the adjusted basis
3                was taken in a taxable year ending on or after
4                December 31, 2021, "x" equals "y" multiplied
5                by 100 times the percentage bonus depreciation
6                on the property (that is, 100(bonus%)) and
7                then divided by 100 times 1 minus the
8                percentage bonus depreciation on the property
9                (that is, 100(1-bonus%)).
10            The aggregate amount deducted under this
11        subparagraph in all taxable years for any one piece of
12        property may not exceed the amount of the bonus
13        depreciation deduction taken on that property on the
14        taxpayer's federal income tax return under subsection
15        (k) of Section 168 of the Internal Revenue Code. This
16        subparagraph (R) is exempt from the provisions of
17        Section 250;
18            (S) If the taxpayer sells, transfers, abandons, or
19        otherwise disposes of property for which the taxpayer
20        was required in any taxable year to make an addition
21        modification under subparagraph (G-10), then an amount
22        equal to that addition modification.
23            If the taxpayer continues to own property through
24        the last day of the last tax year for which a
25        subtraction is allowed with respect to that property
26        under subparagraph (R) and for which the taxpayer was

 

 

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1        required in any taxable year to make an addition
2        modification under subparagraph (G-10), then an amount
3        equal to that addition modification.
4            The taxpayer is allowed to take the deduction
5        under this subparagraph only once with respect to any
6        one piece of property.
7            This subparagraph (S) is exempt from the
8        provisions of Section 250;
9            (T) The amount of (i) any interest income (net of
10        the deductions allocable thereto) taken into account
11        for the taxable year with respect to a transaction
12        with a taxpayer that is required to make an addition
13        modification with respect to such transaction under
14        Section 203(a)(2)(D-17), 203(b)(2)(E-12),
15        203(c)(2)(G-12), or 203(d)(2)(D-7), but not to exceed
16        the amount of such addition modification and (ii) any
17        income from intangible property (net of the deductions
18        allocable thereto) taken into account for the taxable
19        year with respect to a transaction with a taxpayer
20        that is required to make an addition modification with
21        respect to such transaction under Section
22        203(a)(2)(D-18), 203(b)(2)(E-13), 203(c)(2)(G-13), or
23        203(d)(2)(D-8), but not to exceed the amount of such
24        addition modification. This subparagraph (T) is exempt
25        from the provisions of Section 250;
26            (U) An amount equal to the interest income taken

 

 

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1        into account for the taxable year (net of the
2        deductions allocable thereto) with respect to
3        transactions with (i) a foreign person who would be a
4        member of the taxpayer's unitary business group but
5        for the fact the foreign person's business activity
6        outside the United States is 80% or more of that
7        person's total business activity and (ii) for taxable
8        years ending on or after December 31, 2008, to a person
9        who would be a member of the same unitary business
10        group but for the fact that the person is prohibited
11        under Section 1501(a)(27) from being included in the
12        unitary business group because he or she is ordinarily
13        required to apportion business income under different
14        subsections of Section 304, but not to exceed the
15        addition modification required to be made for the same
16        taxable year under Section 203(c)(2)(G-12) for
17        interest paid, accrued, or incurred, directly or
18        indirectly, to the same person. This subparagraph (U)
19        is exempt from the provisions of Section 250;
20            (V) An amount equal to the income from intangible
21        property taken into account for the taxable year (net
22        of the deductions allocable thereto) with respect to
23        transactions with (i) a foreign person who would be a
24        member of the taxpayer's unitary business group but
25        for the fact that the foreign person's business
26        activity outside the United States is 80% or more of

 

 

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1        that person's total business activity and (ii) for
2        taxable years ending on or after December 31, 2008, to
3        a person who would be a member of the same unitary
4        business group but for the fact that the person is
5        prohibited under Section 1501(a)(27) from being
6        included in the unitary business group because he or
7        she is ordinarily required to apportion business
8        income under different subsections of Section 304, but
9        not to exceed the addition modification required to be
10        made for the same taxable year under Section
11        203(c)(2)(G-13) for intangible expenses and costs
12        paid, accrued, or incurred, directly or indirectly, to
13        the same foreign person. This subparagraph (V) is
14        exempt from the provisions of Section 250;
15            (W) in the case of an estate, an amount equal to
16        all amounts included in such total pursuant to the
17        provisions of Section 111 of the Internal Revenue Code
18        as a recovery of items previously deducted by the
19        decedent from adjusted gross income in the computation
20        of taxable income. This subparagraph (W) is exempt
21        from Section 250;
22            (X) an amount equal to the refund included in such
23        total of any tax deducted for federal income tax
24        purposes, to the extent that deduction was added back
25        under subparagraph (F). This subparagraph (X) is
26        exempt from the provisions of Section 250;

 

 

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1            (Y) For taxable years ending on or after December
2        31, 2011, in the case of a taxpayer who was required to
3        add back any insurance premiums under Section
4        203(c)(2)(G-14), such taxpayer may elect to subtract
5        that part of a reimbursement received from the
6        insurance company equal to the amount of the expense
7        or loss (including expenses incurred by the insurance
8        company) that would have been taken into account as a
9        deduction for federal income tax purposes if the
10        expense or loss had been uninsured. If a taxpayer
11        makes the election provided for by this subparagraph
12        (Y), the insurer to which the premiums were paid must
13        add back to income the amount subtracted by the
14        taxpayer pursuant to this subparagraph (Y). This
15        subparagraph (Y) is exempt from the provisions of
16        Section 250;
17            (Z) For taxable years beginning after December 31,
18        2018 and before January 1, 2026, the amount of excess
19        business loss of the taxpayer disallowed as a
20        deduction by Section 461(l)(1)(B) of the Internal
21        Revenue Code; and
22            (AA) For taxable years beginning on or after
23        January 1, 2023, for any cannabis establishment
24        operating in this State and licensed under the
25        Cannabis Regulation and Tax Act or any cannabis
26        cultivation center or medical cannabis dispensing

 

 

HB1752- 82 -LRB104 08500 HLH 18552 b

1        organization operating in this State and licensed
2        under the Compassionate Use of Medical Cannabis
3        Program Act, an amount equal to the deductions that
4        were disallowed under Section 280E of the Internal
5        Revenue Code for the taxable year and that would not be
6        added back under this subsection. The provisions of
7        this subparagraph (AA) are exempt from the provisions
8        of Section 250; and .
9            (BB) For taxable years beginning on or after
10        January 1, 2026, any amount paid by the taxpayer's
11        employer on behalf of the taxpayer as part of an
12        educational assistance program, as defined in Section
13        127 of the Internal Revenue Code, regardless of
14        whether those amounts are included in the taxpayer's
15        federal adjusted gross income for the taxable year.
16        The deduction under this subparagraph shall apply only
17        to the first $5,250 of such assistance so furnished to
18        any individual. This subparagraph is exempt from the
19        provisions of Section 250.
20        (3) Limitation. The amount of any modification
21    otherwise required under this subsection shall, under
22    regulations prescribed by the Department, be adjusted by
23    any amounts included therein which were properly paid,
24    credited, or required to be distributed, or permanently
25    set aside for charitable purposes pursuant to Internal
26    Revenue Code Section 642(c) during the taxable year.
 

 

 

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1    (d) Partnerships.
2        (1) In general. In the case of a partnership, base
3    income means an amount equal to the taxpayer's taxable
4    income for the taxable year as modified by paragraph (2).
5        (2) Modifications. The taxable income referred to in
6    paragraph (1) shall be modified by adding thereto the sum
7    of the following amounts:
8            (A) An amount equal to all amounts paid or accrued
9        to the taxpayer as interest or dividends during the
10        taxable year to the extent excluded from gross income
11        in the computation of taxable income;
12            (B) An amount equal to the amount of tax imposed by
13        this Act to the extent deducted from gross income for
14        the taxable year;
15            (C) The amount of deductions allowed to the
16        partnership pursuant to Section 707 (c) of the
17        Internal Revenue Code in calculating its taxable
18        income;
19            (D) An amount equal to the amount of the capital
20        gain deduction allowable under the Internal Revenue
21        Code, to the extent deducted from gross income in the
22        computation of taxable income;
23            (D-5) For taxable years 2001 and thereafter, an
24        amount equal to the bonus depreciation deduction taken
25        on the taxpayer's federal income tax return for the

 

 

HB1752- 84 -LRB104 08500 HLH 18552 b

1        taxable year under subsection (k) of Section 168 of
2        the Internal Revenue Code;
3            (D-6) If the taxpayer sells, transfers, abandons,
4        or otherwise disposes of property for which the
5        taxpayer was required in any taxable year to make an
6        addition modification under subparagraph (D-5), then
7        an amount equal to the aggregate amount of the
8        deductions taken in all taxable years under
9        subparagraph (O) with respect to that property.
10            If the taxpayer continues to own property through
11        the last day of the last tax year for which a
12        subtraction is allowed with respect to that property
13        under subparagraph (O) and for which the taxpayer was
14        allowed in any taxable year to make a subtraction
15        modification under subparagraph (O), then an amount
16        equal to that subtraction modification.
17            The taxpayer is required to make the addition
18        modification under this subparagraph only once with
19        respect to any one piece of property;
20            (D-7) An amount equal to the amount otherwise
21        allowed as a deduction in computing base income for
22        interest paid, accrued, or incurred, directly or
23        indirectly, (i) for taxable years ending on or after
24        December 31, 2004, to a foreign person who would be a
25        member of the same unitary business group but for the
26        fact the foreign person's business activity outside

 

 

HB1752- 85 -LRB104 08500 HLH 18552 b

1        the United States is 80% or more of the foreign
2        person's total business activity and (ii) for taxable
3        years ending on or after December 31, 2008, to a person
4        who would be a member of the same unitary business
5        group but for the fact that the person is prohibited
6        under Section 1501(a)(27) from being included in the
7        unitary business group because he or she is ordinarily
8        required to apportion business income under different
9        subsections of Section 304. The addition modification
10        required by this subparagraph shall be reduced to the
11        extent that dividends were included in base income of
12        the unitary group for the same taxable year and
13        received by the taxpayer or by a member of the
14        taxpayer's unitary business group (including amounts
15        included in gross income pursuant to Sections 951
16        through 964 of the Internal Revenue Code and amounts
17        included in gross income under Section 78 of the
18        Internal Revenue Code) with respect to the stock of
19        the same person to whom the interest was paid,
20        accrued, or incurred.
21            This paragraph shall not apply to the following:
22                (i) an item of interest paid, accrued, or
23            incurred, directly or indirectly, to a person who
24            is subject in a foreign country or state, other
25            than a state which requires mandatory unitary
26            reporting, to a tax on or measured by net income

 

 

HB1752- 86 -LRB104 08500 HLH 18552 b

1            with respect to such interest; or
2                (ii) an item of interest paid, accrued, or
3            incurred, directly or indirectly, to a person if
4            the taxpayer can establish, based on a
5            preponderance of the evidence, both of the
6            following:
7                    (a) the person, during the same taxable
8                year, paid, accrued, or incurred, the interest
9                to a person that is not a related member, and
10                    (b) the transaction giving rise to the
11                interest expense between the taxpayer and the
12                person did not have as a principal purpose the
13                avoidance of Illinois income tax, and is paid
14                pursuant to a contract or agreement that
15                reflects an arm's-length interest rate and
16                terms; or
17                (iii) the taxpayer can establish, based on
18            clear and convincing evidence, that the interest
19            paid, accrued, or incurred relates to a contract
20            or agreement entered into at arm's-length rates
21            and terms and the principal purpose for the
22            payment is not federal or Illinois tax avoidance;
23            or
24                (iv) an item of interest paid, accrued, or
25            incurred, directly or indirectly, to a person if
26            the taxpayer establishes by clear and convincing

 

 

HB1752- 87 -LRB104 08500 HLH 18552 b

1            evidence that the adjustments are unreasonable; or
2            if the taxpayer and the Director agree in writing
3            to the application or use of an alternative method
4            of apportionment under Section 304(f).
5                Nothing in this subsection shall preclude the
6            Director from making any other adjustment
7            otherwise allowed under Section 404 of this Act
8            for any tax year beginning after the effective
9            date of this amendment provided such adjustment is
10            made pursuant to regulation adopted by the
11            Department and such regulations provide methods
12            and standards by which the Department will utilize
13            its authority under Section 404 of this Act; and
14            (D-8) An amount equal to the amount of intangible
15        expenses and costs otherwise allowed as a deduction in
16        computing base income, and that were paid, accrued, or
17        incurred, directly or indirectly, (i) for taxable
18        years ending on or after December 31, 2004, to a
19        foreign person who would be a member of the same
20        unitary business group but for the fact that the
21        foreign person's business activity outside the United
22        States is 80% or more of that person's total business
23        activity and (ii) for taxable years ending on or after
24        December 31, 2008, to a person who would be a member of
25        the same unitary business group but for the fact that
26        the person is prohibited under Section 1501(a)(27)

 

 

HB1752- 88 -LRB104 08500 HLH 18552 b

1        from being included in the unitary business group
2        because he or she is ordinarily required to apportion
3        business income under different subsections of Section
4        304. The addition modification required by this
5        subparagraph shall be reduced to the extent that
6        dividends were included in base income of the unitary
7        group for the same taxable year and received by the
8        taxpayer or by a member of the taxpayer's unitary
9        business group (including amounts included in gross
10        income pursuant to Sections 951 through 964 of the
11        Internal Revenue Code and amounts included in gross
12        income under Section 78 of the Internal Revenue Code)
13        with respect to the stock of the same person to whom
14        the intangible expenses and costs were directly or
15        indirectly paid, incurred or accrued. The preceding
16        sentence shall not apply to the extent that the same
17        dividends caused a reduction to the addition
18        modification required under Section 203(d)(2)(D-7) of
19        this Act. As used in this subparagraph, the term
20        "intangible expenses and costs" includes (1) expenses,
21        losses, and costs for, or related to, the direct or
22        indirect acquisition, use, maintenance or management,
23        ownership, sale, exchange, or any other disposition of
24        intangible property; (2) losses incurred, directly or
25        indirectly, from factoring transactions or discounting
26        transactions; (3) royalty, patent, technical, and

 

 

HB1752- 89 -LRB104 08500 HLH 18552 b

1        copyright fees; (4) licensing fees; and (5) other
2        similar expenses and costs. For purposes of this
3        subparagraph, "intangible property" includes patents,
4        patent applications, trade names, trademarks, service
5        marks, copyrights, mask works, trade secrets, and
6        similar types of intangible assets;
7            This paragraph shall not apply to the following:
8                (i) any item of intangible expenses or costs
9            paid, accrued, or incurred, directly or
10            indirectly, from a transaction with a person who
11            is subject in a foreign country or state, other
12            than a state which requires mandatory unitary
13            reporting, to a tax on or measured by net income
14            with respect to such item; or
15                (ii) any item of intangible expense or cost
16            paid, accrued, or incurred, directly or
17            indirectly, if the taxpayer can establish, based
18            on a preponderance of the evidence, both of the
19            following:
20                    (a) the person during the same taxable
21                year paid, accrued, or incurred, the
22                intangible expense or cost to a person that is
23                not a related member, and
24                    (b) the transaction giving rise to the
25                intangible expense or cost between the
26                taxpayer and the person did not have as a

 

 

HB1752- 90 -LRB104 08500 HLH 18552 b

1                principal purpose the avoidance of Illinois
2                income tax, and is paid pursuant to a contract
3                or agreement that reflects arm's-length terms;
4                or
5                (iii) any item of intangible expense or cost
6            paid, accrued, or incurred, directly or
7            indirectly, from a transaction with a person if
8            the taxpayer establishes by clear and convincing
9            evidence, that the adjustments are unreasonable;
10            or if the taxpayer and the Director agree in
11            writing to the application or use of an
12            alternative method of apportionment under Section
13            304(f);
14                Nothing in this subsection shall preclude the
15            Director from making any other adjustment
16            otherwise allowed under Section 404 of this Act
17            for any tax year beginning after the effective
18            date of this amendment provided such adjustment is
19            made pursuant to regulation adopted by the
20            Department and such regulations provide methods
21            and standards by which the Department will utilize
22            its authority under Section 404 of this Act;
23            (D-9) For taxable years ending on or after
24        December 31, 2008, an amount equal to the amount of
25        insurance premium expenses and costs otherwise allowed
26        as a deduction in computing base income, and that were

 

 

HB1752- 91 -LRB104 08500 HLH 18552 b

1        paid, accrued, or incurred, directly or indirectly, to
2        a person who would be a member of the same unitary
3        business group but for the fact that the person is
4        prohibited under Section 1501(a)(27) from being
5        included in the unitary business group because he or
6        she is ordinarily required to apportion business
7        income under different subsections of Section 304. The
8        addition modification required by this subparagraph
9        shall be reduced to the extent that dividends were
10        included in base income of the unitary group for the
11        same taxable year and received by the taxpayer or by a
12        member of the taxpayer's unitary business group
13        (including amounts included in gross income under
14        Sections 951 through 964 of the Internal Revenue Code
15        and amounts included in gross income under Section 78
16        of the Internal Revenue Code) with respect to the
17        stock of the same person to whom the premiums and costs
18        were directly or indirectly paid, incurred, or
19        accrued. The preceding sentence does not apply to the
20        extent that the same dividends caused a reduction to
21        the addition modification required under Section
22        203(d)(2)(D-7) or Section 203(d)(2)(D-8) of this Act;
23            (D-10) An amount equal to the credit allowable to
24        the taxpayer under Section 218(a) of this Act,
25        determined without regard to Section 218(c) of this
26        Act;

 

 

HB1752- 92 -LRB104 08500 HLH 18552 b

1            (D-11) For taxable years ending on or after
2        December 31, 2017, an amount equal to the deduction
3        allowed under Section 199 of the Internal Revenue Code
4        for the taxable year;
5            (D-12) the amount that is claimed as a federal
6        deduction when computing the taxpayer's federal
7        taxable income for the taxable year and that is
8        attributable to an endowment gift for which the
9        taxpayer receives a credit under the Illinois Gives
10        Tax Credit Act;
11    and by deducting from the total so obtained the following
12    amounts:
13            (E) The valuation limitation amount;
14            (F) An amount equal to the amount of any tax
15        imposed by this Act which was refunded to the taxpayer
16        and included in such total for the taxable year;
17            (G) An amount equal to all amounts included in
18        taxable income as modified by subparagraphs (A), (B),
19        (C) and (D) which are exempt from taxation by this
20        State either by reason of its statutes or Constitution
21        or by reason of the Constitution, treaties or statutes
22        of the United States; provided that, in the case of any
23        statute of this State that exempts income derived from
24        bonds or other obligations from the tax imposed under
25        this Act, the amount exempted shall be the interest
26        net of bond premium amortization;

 

 

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1            (H) Any income of the partnership which
2        constitutes personal service income as defined in
3        Section 1348(b)(1) of the Internal Revenue Code (as in
4        effect December 31, 1981) or a reasonable allowance
5        for compensation paid or accrued for services rendered
6        by partners to the partnership, whichever is greater;
7        this subparagraph (H) is exempt from the provisions of
8        Section 250;
9            (I) An amount equal to all amounts of income
10        distributable to an entity subject to the Personal
11        Property Tax Replacement Income Tax imposed by
12        subsections (c) and (d) of Section 201 of this Act
13        including amounts distributable to organizations
14        exempt from federal income tax by reason of Section
15        501(a) of the Internal Revenue Code; this subparagraph
16        (I) is exempt from the provisions of Section 250;
17            (J) With the exception of any amounts subtracted
18        under subparagraph (G), an amount equal to the sum of
19        all amounts disallowed as deductions by (i) Sections
20        171(a)(2) and 265(a)(2) of the Internal Revenue Code,
21        and all amounts of expenses allocable to interest and
22        disallowed as deductions by Section 265(a)(1) of the
23        Internal Revenue Code; and (ii) for taxable years
24        ending on or after August 13, 1999, Sections
25        171(a)(2), 265, 280C, and 832(b)(5)(B)(i) of the
26        Internal Revenue Code, plus, (iii) for taxable years

 

 

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1        ending on or after December 31, 2011, Section
2        45G(e)(3) of the Internal Revenue Code and, for
3        taxable years ending on or after December 31, 2008,
4        any amount included in gross income under Section 87
5        of the Internal Revenue Code; the provisions of this
6        subparagraph are exempt from the provisions of Section
7        250;
8            (K) An amount equal to those dividends included in
9        such total which were paid by a corporation which
10        conducts business operations in a River Edge
11        Redevelopment Zone or zones created under the River
12        Edge Redevelopment Zone Act and conducts substantially
13        all of its operations from a River Edge Redevelopment
14        Zone or zones. This subparagraph (K) is exempt from
15        the provisions of Section 250;
16            (L) An amount equal to any contribution made to a
17        job training project established pursuant to the Real
18        Property Tax Increment Allocation Redevelopment Act;
19            (M) An amount equal to those dividends included in
20        such total that were paid by a corporation that
21        conducts business operations in a federally designated
22        Foreign Trade Zone or Sub-Zone and that is designated
23        a High Impact Business located in Illinois; provided
24        that dividends eligible for the deduction provided in
25        subparagraph (K) of paragraph (2) of this subsection
26        shall not be eligible for the deduction provided under

 

 

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1        this subparagraph (M);
2            (N) An amount equal to the amount of the deduction
3        used to compute the federal income tax credit for
4        restoration of substantial amounts held under claim of
5        right for the taxable year pursuant to Section 1341 of
6        the Internal Revenue Code;
7            (O) For taxable years 2001 and thereafter, for the
8        taxable year in which the bonus depreciation deduction
9        is taken on the taxpayer's federal income tax return
10        under subsection (k) of Section 168 of the Internal
11        Revenue Code and for each applicable taxable year
12        thereafter, an amount equal to "x", where:
13                (1) "y" equals the amount of the depreciation
14            deduction taken for the taxable year on the
15            taxpayer's federal income tax return on property
16            for which the bonus depreciation deduction was
17            taken in any year under subsection (k) of Section
18            168 of the Internal Revenue Code, but not
19            including the bonus depreciation deduction;
20                (2) for taxable years ending on or before
21            December 31, 2005, "x" equals "y" multiplied by 30
22            and then divided by 70 (or "y" multiplied by
23            0.429); and
24                (3) for taxable years ending after December
25            31, 2005:
26                    (i) for property on which a bonus

 

 

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1                depreciation deduction of 30% of the adjusted
2                basis was taken, "x" equals "y" multiplied by
3                30 and then divided by 70 (or "y" multiplied
4                by 0.429);
5                    (ii) for property on which a bonus
6                depreciation deduction of 50% of the adjusted
7                basis was taken, "x" equals "y" multiplied by
8                1.0;
9                    (iii) for property on which a bonus
10                depreciation deduction of 100% of the adjusted
11                basis was taken in a taxable year ending on or
12                after December 31, 2021, "x" equals the
13                depreciation deduction that would be allowed
14                on that property if the taxpayer had made the
15                election under Section 168(k)(7) of the
16                Internal Revenue Code to not claim bonus
17                depreciation on that property; and
18                    (iv) for property on which a bonus
19                depreciation deduction of a percentage other
20                than 30%, 50% or 100% of the adjusted basis
21                was taken in a taxable year ending on or after
22                December 31, 2021, "x" equals "y" multiplied
23                by 100 times the percentage bonus depreciation
24                on the property (that is, 100(bonus%)) and
25                then divided by 100 times 1 minus the
26                percentage bonus depreciation on the property

 

 

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1                (that is, 100(1-bonus%)).
2            The aggregate amount deducted under this
3        subparagraph in all taxable years for any one piece of
4        property may not exceed the amount of the bonus
5        depreciation deduction taken on that property on the
6        taxpayer's federal income tax return under subsection
7        (k) of Section 168 of the Internal Revenue Code. This
8        subparagraph (O) is exempt from the provisions of
9        Section 250;
10            (P) If the taxpayer sells, transfers, abandons, or
11        otherwise disposes of property for which the taxpayer
12        was required in any taxable year to make an addition
13        modification under subparagraph (D-5), then an amount
14        equal to that addition modification.
15            If the taxpayer continues to own property through
16        the last day of the last tax year for which a
17        subtraction is allowed with respect to that property
18        under subparagraph (O) and for which the taxpayer was
19        required in any taxable year to make an addition
20        modification under subparagraph (D-5), then an amount
21        equal to that addition modification.
22            The taxpayer is allowed to take the deduction
23        under this subparagraph only once with respect to any
24        one piece of property.
25            This subparagraph (P) is exempt from the
26        provisions of Section 250;

 

 

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1            (Q) The amount of (i) any interest income (net of
2        the deductions allocable thereto) taken into account
3        for the taxable year with respect to a transaction
4        with a taxpayer that is required to make an addition
5        modification with respect to such transaction under
6        Section 203(a)(2)(D-17), 203(b)(2)(E-12),
7        203(c)(2)(G-12), or 203(d)(2)(D-7), but not to exceed
8        the amount of such addition modification and (ii) any
9        income from intangible property (net of the deductions
10        allocable thereto) taken into account for the taxable
11        year with respect to a transaction with a taxpayer
12        that is required to make an addition modification with
13        respect to such transaction under Section
14        203(a)(2)(D-18), 203(b)(2)(E-13), 203(c)(2)(G-13), or
15        203(d)(2)(D-8), but not to exceed the amount of such
16        addition modification. This subparagraph (Q) is exempt
17        from Section 250;
18            (R) An amount equal to the interest income taken
19        into account for the taxable year (net of the
20        deductions allocable thereto) with respect to
21        transactions with (i) a foreign person who would be a
22        member of the taxpayer's unitary business group but
23        for the fact that the foreign person's business
24        activity outside the United States is 80% or more of
25        that person's total business activity and (ii) for
26        taxable years ending on or after December 31, 2008, to

 

 

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1        a person who would be a member of the same unitary
2        business group but for the fact that the person is
3        prohibited under Section 1501(a)(27) from being
4        included in the unitary business group because he or
5        she is ordinarily required to apportion business
6        income under different subsections of Section 304, but
7        not to exceed the addition modification required to be
8        made for the same taxable year under Section
9        203(d)(2)(D-7) for interest paid, accrued, or
10        incurred, directly or indirectly, to the same person.
11        This subparagraph (R) is exempt from Section 250;
12            (S) An amount equal to the income from intangible
13        property taken into account for the taxable year (net
14        of the deductions allocable thereto) with respect to
15        transactions with (i) a foreign person who would be a
16        member of the taxpayer's unitary business group but
17        for the fact that the foreign person's business
18        activity outside the United States is 80% or more of
19        that person's total business activity and (ii) for
20        taxable years ending on or after December 31, 2008, to
21        a person who would be a member of the same unitary
22        business group but for the fact that the person is
23        prohibited under Section 1501(a)(27) from being
24        included in the unitary business group because he or
25        she is ordinarily required to apportion business
26        income under different subsections of Section 304, but

 

 

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1        not to exceed the addition modification required to be
2        made for the same taxable year under Section
3        203(d)(2)(D-8) for intangible expenses and costs paid,
4        accrued, or incurred, directly or indirectly, to the
5        same person. This subparagraph (S) is exempt from
6        Section 250;
7            (T) For taxable years ending on or after December
8        31, 2011, in the case of a taxpayer who was required to
9        add back any insurance premiums under Section
10        203(d)(2)(D-9), such taxpayer may elect to subtract
11        that part of a reimbursement received from the
12        insurance company equal to the amount of the expense
13        or loss (including expenses incurred by the insurance
14        company) that would have been taken into account as a
15        deduction for federal income tax purposes if the
16        expense or loss had been uninsured. If a taxpayer
17        makes the election provided for by this subparagraph
18        (T), the insurer to which the premiums were paid must
19        add back to income the amount subtracted by the
20        taxpayer pursuant to this subparagraph (T). This
21        subparagraph (T) is exempt from the provisions of
22        Section 250; and
23            (U) For taxable years beginning on or after
24        January 1, 2023, for any cannabis establishment
25        operating in this State and licensed under the
26        Cannabis Regulation and Tax Act or any cannabis

 

 

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1        cultivation center or medical cannabis dispensing
2        organization operating in this State and licensed
3        under the Compassionate Use of Medical Cannabis
4        Program Act, an amount equal to the deductions that
5        were disallowed under Section 280E of the Internal
6        Revenue Code for the taxable year and that would not be
7        added back under this subsection. The provisions of
8        this subparagraph (U) are exempt from the provisions
9        of Section 250; and .
10            (V) For taxable years beginning on or after
11        January 1, 2026, amounts paid by the taxpayer on
12        behalf of an employee of the taxpayer as part of an
13        educational assistance program, as defined in Section
14        127 of the Internal Revenue Code. The deduction under
15        this subparagraph shall apply only to the first $5,250
16        of such assistance so furnished to any particular
17        individual. This subparagraph is exempt from the
18        provisions of Section 250.
 
19    (e) Gross income; adjusted gross income; taxable income.
20        (1) In general. Subject to the provisions of paragraph
21    (2) and subsection (b)(3), for purposes of this Section
22    and Section 803(e), a taxpayer's gross income, adjusted
23    gross income, or taxable income for the taxable year shall
24    mean the amount of gross income, adjusted gross income or
25    taxable income properly reportable for federal income tax

 

 

HB1752- 102 -LRB104 08500 HLH 18552 b

1    purposes for the taxable year under the provisions of the
2    Internal Revenue Code. Taxable income may be less than
3    zero. However, for taxable years ending on or after
4    December 31, 1986, net operating loss carryforwards from
5    taxable years ending prior to December 31, 1986, may not
6    exceed the sum of federal taxable income for the taxable
7    year before net operating loss deduction, plus the excess
8    of addition modifications over subtraction modifications
9    for the taxable year. For taxable years ending prior to
10    December 31, 1986, taxable income may never be an amount
11    in excess of the net operating loss for the taxable year as
12    defined in subsections (c) and (d) of Section 172 of the
13    Internal Revenue Code, provided that when taxable income
14    of a corporation (other than a Subchapter S corporation),
15    trust, or estate is less than zero and addition
16    modifications, other than those provided by subparagraph
17    (E) of paragraph (2) of subsection (b) for corporations or
18    subparagraph (E) of paragraph (2) of subsection (c) for
19    trusts and estates, exceed subtraction modifications, an
20    addition modification must be made under those
21    subparagraphs for any other taxable year to which the
22    taxable income less than zero (net operating loss) is
23    applied under Section 172 of the Internal Revenue Code or
24    under subparagraph (E) of paragraph (2) of this subsection
25    (e) applied in conjunction with Section 172 of the
26    Internal Revenue Code.

 

 

HB1752- 103 -LRB104 08500 HLH 18552 b

1        (2) Special rule. For purposes of paragraph (1) of
2    this subsection, the taxable income properly reportable
3    for federal income tax purposes shall mean:
4            (A) Certain life insurance companies. In the case
5        of a life insurance company subject to the tax imposed
6        by Section 801 of the Internal Revenue Code, life
7        insurance company taxable income, plus the amount of
8        distribution from pre-1984 policyholder surplus
9        accounts as calculated under Section 815a of the
10        Internal Revenue Code;
11            (B) Certain other insurance companies. In the case
12        of mutual insurance companies subject to the tax
13        imposed by Section 831 of the Internal Revenue Code,
14        insurance company taxable income;
15            (C) Regulated investment companies. In the case of
16        a regulated investment company subject to the tax
17        imposed by Section 852 of the Internal Revenue Code,
18        investment company taxable income;
19            (D) Real estate investment trusts. In the case of
20        a real estate investment trust subject to the tax
21        imposed by Section 857 of the Internal Revenue Code,
22        real estate investment trust taxable income;
23            (E) Consolidated corporations. In the case of a
24        corporation which is a member of an affiliated group
25        of corporations filing a consolidated income tax
26        return for the taxable year for federal income tax

 

 

HB1752- 104 -LRB104 08500 HLH 18552 b

1        purposes, taxable income determined as if such
2        corporation had filed a separate return for federal
3        income tax purposes for the taxable year and each
4        preceding taxable year for which it was a member of an
5        affiliated group. For purposes of this subparagraph,
6        the taxpayer's separate taxable income shall be
7        determined as if the election provided by Section
8        243(b)(2) of the Internal Revenue Code had been in
9        effect for all such years;
10            (F) Cooperatives. In the case of a cooperative
11        corporation or association, the taxable income of such
12        organization determined in accordance with the
13        provisions of Section 1381 through 1388 of the
14        Internal Revenue Code, but without regard to the
15        prohibition against offsetting losses from patronage
16        activities against income from nonpatronage
17        activities; except that a cooperative corporation or
18        association may make an election to follow its federal
19        income tax treatment of patronage losses and
20        nonpatronage losses. In the event such election is
21        made, such losses shall be computed and carried over
22        in a manner consistent with subsection (a) of Section
23        207 of this Act and apportioned by the apportionment
24        factor reported by the cooperative on its Illinois
25        income tax return filed for the taxable year in which
26        the losses are incurred. The election shall be

 

 

HB1752- 105 -LRB104 08500 HLH 18552 b

1        effective for all taxable years with original returns
2        due on or after the date of the election. In addition,
3        the cooperative may file an amended return or returns,
4        as allowed under this Act, to provide that the
5        election shall be effective for losses incurred or
6        carried forward for taxable years occurring prior to
7        the date of the election. Once made, the election may
8        only be revoked upon approval of the Director. The
9        Department shall adopt rules setting forth
10        requirements for documenting the elections and any
11        resulting Illinois net loss and the standards to be
12        used by the Director in evaluating requests to revoke
13        elections. Public Act 96-932 is declaratory of
14        existing law;
15            (G) Subchapter S corporations. In the case of: (i)
16        a Subchapter S corporation for which there is in
17        effect an election for the taxable year under Section
18        1362 of the Internal Revenue Code, the taxable income
19        of such corporation determined in accordance with
20        Section 1363(b) of the Internal Revenue Code, except
21        that taxable income shall take into account those
22        items which are required by Section 1363(b)(1) of the
23        Internal Revenue Code to be separately stated; and
24        (ii) a Subchapter S corporation for which there is in
25        effect a federal election to opt out of the provisions
26        of the Subchapter S Revision Act of 1982 and have

 

 

HB1752- 106 -LRB104 08500 HLH 18552 b

1        applied instead the prior federal Subchapter S rules
2        as in effect on July 1, 1982, the taxable income of
3        such corporation determined in accordance with the
4        federal Subchapter S rules as in effect on July 1,
5        1982; and
6            (H) Partnerships. In the case of a partnership,
7        taxable income determined in accordance with Section
8        703 of the Internal Revenue Code, except that taxable
9        income shall take into account those items which are
10        required by Section 703(a)(1) to be separately stated
11        but which would be taken into account by an individual
12        in calculating his taxable income.
13        (3) Recapture of business expenses on disposition of
14    asset or business. Notwithstanding any other law to the
15    contrary, if in prior years income from an asset or
16    business has been classified as business income and in a
17    later year is demonstrated to be non-business income, then
18    all expenses, without limitation, deducted in such later
19    year and in the 2 immediately preceding taxable years
20    related to that asset or business that generated the
21    non-business income shall be added back and recaptured as
22    business income in the year of the disposition of the
23    asset or business. Such amount shall be apportioned to
24    Illinois using the greater of the apportionment fraction
25    computed for the business under Section 304 of this Act
26    for the taxable year or the average of the apportionment

 

 

HB1752- 107 -LRB104 08500 HLH 18552 b

1    fractions computed for the business under Section 304 of
2    this Act for the taxable year and for the 2 immediately
3    preceding taxable years.
 
4    (f) Valuation limitation amount.
5        (1) In general. The valuation limitation amount
6    referred to in subsections (a)(2)(G), (c)(2)(I) and
7    (d)(2)(E) is an amount equal to:
8            (A) The sum of the pre-August 1, 1969 appreciation
9        amounts (to the extent consisting of gain reportable
10        under the provisions of Section 1245 or 1250 of the
11        Internal Revenue Code) for all property in respect of
12        which such gain was reported for the taxable year;
13        plus
14            (B) The lesser of (i) the sum of the pre-August 1,
15        1969 appreciation amounts (to the extent consisting of
16        capital gain) for all property in respect of which
17        such gain was reported for federal income tax purposes
18        for the taxable year, or (ii) the net capital gain for
19        the taxable year, reduced in either case by any amount
20        of such gain included in the amount determined under
21        subsection (a)(2)(F) or (c)(2)(H).
22        (2) Pre-August 1, 1969 appreciation amount.
23            (A) If the fair market value of property referred
24        to in paragraph (1) was readily ascertainable on
25        August 1, 1969, the pre-August 1, 1969 appreciation

 

 

HB1752- 108 -LRB104 08500 HLH 18552 b

1        amount for such property is the lesser of (i) the
2        excess of such fair market value over the taxpayer's
3        basis (for determining gain) for such property on that
4        date (determined under the Internal Revenue Code as in
5        effect on that date), or (ii) the total gain realized
6        and reportable for federal income tax purposes in
7        respect of the sale, exchange or other disposition of
8        such property.
9            (B) If the fair market value of property referred
10        to in paragraph (1) was not readily ascertainable on
11        August 1, 1969, the pre-August 1, 1969 appreciation
12        amount for such property is that amount which bears
13        the same ratio to the total gain reported in respect of
14        the property for federal income tax purposes for the
15        taxable year, as the number of full calendar months in
16        that part of the taxpayer's holding period for the
17        property ending July 31, 1969 bears to the number of
18        full calendar months in the taxpayer's entire holding
19        period for the property.
20            (C) The Department shall prescribe such
21        regulations as may be necessary to carry out the
22        purposes of this paragraph.
 
23    (g) Double deductions. Unless specifically provided
24otherwise, nothing in this Section shall permit the same item
25to be deducted more than once.
 

 

 

HB1752- 109 -LRB104 08500 HLH 18552 b

1    (h) Legislative intention. Except as expressly provided by
2this Section there shall be no modifications or limitations on
3the amounts of income, gain, loss or deduction taken into
4account in determining gross income, adjusted gross income or
5taxable income for federal income tax purposes for the taxable
6year, or in the amount of such items entering into the
7computation of base income and net income under this Act for
8such taxable year, whether in respect of property values as of
9August 1, 1969 or otherwise.
10(Source: P.A. 102-16, eff. 6-17-21; 102-558, eff. 8-20-21;
11102-658, eff. 8-27-21; 102-813, eff. 5-13-22; 102-1112, eff.
1212-21-22; 103-8, eff. 6-7-23; 103-478, eff. 1-1-24; 103-592,
13Article 10, Section 10-900, eff. 6-7-24; 103-592, Article 170,
14Section 170-90, eff. 6-7-24; 103-605, eff. 7-1-24; 103-647,
15eff. 7-1-24; revised 8-20-24.)
 
16    Section 99. Effective date. This Act takes effect upon
17becoming law.