Sen. James F. Clayborne Jr.

Filed: 5/27/2005

 

 


 

 


 
09400SB0507sam003 LRB094 08414 BDD 47246 a

1
AMENDMENT TO SENATE BILL 507

2     AMENDMENT NO. ______. Amend Senate Bill 507, AS AMENDED, by
3 replacing everything after the enacting clause with the
4 following:
 
5     "Section 5. The State Treasurer Act is amended by changing
6 Section 16.5 as follows:
 
7     (15 ILCS 505/16.5)
8     Sec. 16.5. College Savings Pool. The State Treasurer may
9 establish and administer a College Savings Pool to supplement
10 and enhance the investment opportunities otherwise available
11 to persons seeking to finance the costs of higher education.
12 The State Treasurer, in administering the College Savings Pool,
13 may receive moneys paid into the pool by a participant and may
14 serve as the fiscal agent of that participant for the purpose
15 of holding and investing those moneys.
16     "Participant", as used in this Section, means any person
17 who makes investments in the pool. "Designated beneficiary", as
18 used in this Section, means any person on whose behalf an
19 account is established in the College Savings Pool by a
20 participant. Both in-state and out-of-state persons may be
21 participants and designated beneficiaries in the College
22 Savings Pool.
23     New accounts in the College Savings Pool may shall be
24 processed through participating financial institutions.

 

 

09400SB0507sam003 - 2 - LRB094 08414 BDD 47246 a

1 "Participating financial institution", as used in this
2 Section, means any financial institution insured by the Federal
3 Deposit Insurance Corporation and lawfully doing business in
4 the State of Illinois and any credit union approved by the
5 State Treasurer and lawfully doing business in the State of
6 Illinois that agrees to process new accounts in the College
7 Savings Pool. Participating financial institutions may charge
8 a processing fee to participants to open an account in the pool
9 that shall not exceed $30 until the year 2001. Beginning in
10 2001 and every year thereafter, the maximum fee limit shall be
11 adjusted by the Treasurer based on the Consumer Price Index for
12 the North Central Region as published by the United States
13 Department of Labor, Bureau of Labor Statistics for the
14 immediately preceding calendar year. Every contribution
15 received by a financial institution for investment in the
16 College Savings Pool shall be transferred from the financial
17 institution to a location selected by the State Treasurer
18 within one business day following the day that the funds must
19 be made available in accordance with federal law. All
20 communications from the State Treasurer to participants shall
21 reference the participating financial institution at which the
22 account was processed.
23     The Treasurer may invest the moneys in the College Savings
24 Pool in the same manner, in the same types of investments, and
25 subject to the same limitations provided for the investment of
26 moneys by the Illinois State Board of Investment. To enhance
27 the safety and liquidity of the College Savings Pool, to ensure
28 the diversification of the investment portfolio of the pool,
29 and in an effort to keep investment dollars in the State of
30 Illinois, the State Treasurer may shall make a percentage of
31 each account available for investment in participating
32 financial institutions doing business in the State. The State
33 Treasurer may shall deposit with the participating financial
34 institution at which the account was processed the following

 

 

09400SB0507sam003 - 3 - LRB094 08414 BDD 47246 a

1 percentage of each account at a prevailing rate offered by the
2 institution, provided that the deposit is federally insured or
3 fully collateralized and the institution accepts the deposit:
4 10% of the total amount of each account for which the current
5 age of the beneficiary is less than 7 years of age, 20% of the
6 total amount of each account for which the beneficiary is at
7 least 7 years of age and less than 12 years of age, and 50% of
8 the total amount of each account for which the current age of
9 the beneficiary is at least 12 years of age. The State
10 Treasurer shall adjust each account at least annually to ensure
11 compliance with this Section. The Treasurer shall develop,
12 publish, and implement an investment policy covering the
13 investment of the moneys in the College Savings Pool. The
14 policy shall be published (i) at least once each year in at
15 least one newspaper of general circulation in both Springfield
16 and Chicago and (ii) each year as part of the audit of the
17 College Savings Pool by the Auditor General, which shall be
18 distributed to all participants. The Treasurer shall notify all
19 participants in writing, and the Treasurer shall publish in a
20 newspaper of general circulation in both Chicago and
21 Springfield, any changes to the previously published
22 investment policy at least 30 calendar days before implementing
23 the policy. Any investment policy adopted by the Treasurer
24 shall be reviewed and updated if necessary within 90 days
25 following the date that the State Treasurer takes office.
26     Participants shall be required to use moneys distributed
27 from the College Savings Pool for qualified expenses at
28 eligible educational institutions. "Qualified expenses", as
29 used in this Section, means the following: (i) tuition, fees,
30 and the costs of books, supplies, and equipment required for
31 enrollment or attendance at an eligible educational
32 institution and (ii) certain room and board expenses incurred
33 while attending an eligible educational institution at least
34 half-time. "Eligible educational institutions", as used in

 

 

09400SB0507sam003 - 4 - LRB094 08414 BDD 47246 a

1 this Section, means public and private colleges, junior
2 colleges, graduate schools, and certain vocational
3 institutions that are described in Section 481 of the Higher
4 Education Act of 1965 (20 U.S.C. 1088) and that are eligible to
5 participate in Department of Education student aid programs. A
6 student shall be considered to be enrolled at least half-time
7 if the student is enrolled for at least half the full-time
8 academic work load for the course of study the student is
9 pursuing as determined under the standards of the institution
10 at which the student is enrolled. Distributions made from the
11 pool for qualified expenses shall be made directly to the
12 eligible educational institution, directly to a vendor, or in
13 the form of a check payable to both the beneficiary and the
14 institution or vendor. Any moneys that are distributed in any
15 other manner or that are used for expenses other than qualified
16 expenses at an eligible educational institution shall be
17 subject to a penalty of 10% of the earnings unless the
18 beneficiary dies, becomes disabled, or receives a scholarship
19 that equals or exceeds the distribution. Penalties shall be
20 withheld at the time the distribution is made.
21     The Treasurer shall limit the contributions that may be
22 made on behalf of a designated beneficiary based on the
23 limitations established by the Internal Revenue Service. an
24 actuarial estimate of what is required to pay tuition, fees,
25 and room and board for 5 undergraduate years at the highest
26 cost eligible educational institution. The contributions made
27 on behalf of a beneficiary who is also a beneficiary under the
28 Illinois Prepaid Tuition Program shall be further restricted to
29 ensure that the contributions in both programs combined do not
30 exceed the limit established for the College Savings Pool. The
31 Treasurer shall provide the Illinois Student Assistance
32 Commission each year at a time designated by the Commission, an
33 electronic report of all participant accounts in the
34 Treasurer's College Savings Pool, listing total contributions

 

 

09400SB0507sam003 - 5 - LRB094 08414 BDD 47246 a

1 and disbursements from each individual account during the
2 previous calendar year. As soon thereafter as is possible
3 following receipt of the Treasurer's report, the Illinois
4 Student Assistance Commission shall, in turn, provide the
5 Treasurer with an electronic report listing those College
6 Savings Pool participants who also participate in the State's
7 prepaid tuition program, administered by the Commission. The
8 Commission shall be responsible for filing any combined tax
9 reports regarding State qualified savings programs required by
10 the United States Internal Revenue Service. The Treasurer shall
11 work with the Illinois Student Assistance Commission to
12 coordinate the marketing of the College Savings Pool and the
13 Illinois Prepaid Tuition Program when considered beneficial by
14 the Treasurer and the Director of the Illinois Student
15 Assistance Commission. The Treasurer's office shall not
16 publicize or otherwise market the College Savings Pool or
17 accept any moneys into the College Savings Pool prior to March
18 1, 2000. The Treasurer shall provide a separate accounting for
19 each designated beneficiary to each participant, the Illinois
20 Student Assistance Commission, and the participating financial
21 institution at which the account was processed. No interest in
22 the program may be pledged as security for a loan.
23     The assets of the College Savings Pool and its income and
24 operation shall be exempt from all taxation by the State of
25 Illinois and any of its subdivisions. The accrued earnings on
26 investments in the Pool once disbursed on behalf of a
27 designated beneficiary shall be similarly exempt from all
28 taxation by the State of Illinois and its subdivisions, so long
29 as they are used for qualified expenses. Contributions to a
30 College Savings Pool account during the taxable year may be
31 deducted from adjusted gross income as provided in Section 203
32 of the Illinois Income Tax Act. The provisions of this
33 paragraph are exempt from Section 250 of the Illinois Income
34 Tax Act.

 

 

09400SB0507sam003 - 6 - LRB094 08414 BDD 47246 a

1     The Treasurer shall adopt rules he or she considers
2 necessary for the efficient administration of the College
3 Savings Pool. The rules shall provide whatever additional
4 parameters and restrictions are necessary to ensure that the
5 College Savings Pool meets all of the requirements for a
6 qualified state tuition program under Section 529 of the
7 Internal Revenue Code (26 U.S.C. 529). The rules shall provide
8 for the administration expenses of the pool to be paid from its
9 earnings and for the investment earnings in excess of the
10 expenses and all moneys collected as penalties to be credited
11 or paid monthly to the several participants in the pool in a
12 manner which equitably reflects the differing amounts of their
13 respective investments in the pool and the differing periods of
14 time for which those amounts were in the custody of the pool.
15 Also, the rules shall require the maintenance of records that
16 enable the Treasurer's office to produce a report for each
17 account in the pool at least annually that documents the
18 account balance and investment earnings. Notice of any proposed
19 amendments to the rules and regulations shall be provided to
20 all participants prior to adoption. Amendments to rules and
21 regulations shall apply only to contributions made after the
22 adoption of the amendment.
23     Upon creating the College Savings Pool, the State Treasurer
24 shall give bond with 2 or more sufficient sureties, payable to
25 and for the benefit of the participants in the College Savings
26 Pool, in the penal sum of $1,000,000, conditioned upon the
27 faithful discharge of his or her duties in relation to the
28 College Savings Pool.
29 (Source: P.A. 92-16, eff. 6-28-01; 92-439, eff. 8-17-01;
30 92-626, eff. 7-11-02; 93-812, eff. 1-1-05.)
 
31     Section 10. The Illinois Income Tax Act is amended by
32 changing Section 203 as follows:
 

 

 

09400SB0507sam003 - 7 - LRB094 08414 BDD 47246 a

1     (35 ILCS 5/203)  (from Ch. 120, par. 2-203)
2     Sec. 203. Base income defined.
3     (a) Individuals.
4         (1) In general. In the case of an individual, base
5     income means an amount equal to the taxpayer's adjusted
6     gross income for the taxable year as modified by paragraph
7     (2).
8         (2) Modifications. The adjusted gross income referred
9     to in paragraph (1) shall be modified by adding thereto the
10     sum of the following amounts:
11             (A) An amount equal to all amounts paid or accrued
12         to the taxpayer as interest or dividends during the
13         taxable year to the extent excluded from gross income
14         in the computation of adjusted gross income, except
15         stock dividends of qualified public utilities
16         described in Section 305(e) of the Internal Revenue
17         Code;
18             (B) An amount equal to the amount of tax imposed by
19         this Act to the extent deducted from gross income in
20         the computation of adjusted gross income for the
21         taxable year;
22             (C) An amount equal to the amount received during
23         the taxable year as a recovery or refund of real
24         property taxes paid with respect to the taxpayer's
25         principal residence under the Revenue Act of 1939 and
26         for which a deduction was previously taken under
27         subparagraph (L) of this paragraph (2) prior to July 1,
28         1991, the retrospective application date of Article 4
29         of Public Act 87-17. In the case of multi-unit or
30         multi-use structures and farm dwellings, the taxes on
31         the taxpayer's principal residence shall be that
32         portion of the total taxes for the entire property
33         which is attributable to such principal residence;
34             (D) An amount equal to the amount of the capital

 

 

09400SB0507sam003 - 8 - LRB094 08414 BDD 47246 a

1         gain deduction allowable under the Internal Revenue
2         Code, to the extent deducted from gross income in the
3         computation of adjusted gross income;
4             (D-5) An amount, to the extent not included in
5         adjusted gross income, equal to the amount of money
6         withdrawn by the taxpayer in the taxable year from a
7         medical care savings account and the interest earned on
8         the account in the taxable year of a withdrawal
9         pursuant to subsection (b) of Section 20 of the Medical
10         Care Savings Account Act or subsection (b) of Section
11         20 of the Medical Care Savings Account Act of 2000;
12             (D-10) For taxable years ending after December 31,
13         1997, an amount equal to any eligible remediation costs
14         that the individual deducted in computing adjusted
15         gross income and for which the individual claims a
16         credit under subsection (l) of Section 201;
17             (D-15) For taxable years 2001 and thereafter, an
18         amount equal to the bonus depreciation deduction (30%
19         of the adjusted basis of the qualified property) taken
20         on the taxpayer's federal income tax return for the
21         taxable year under subsection (k) of Section 168 of the
22         Internal Revenue Code;
23             (D-16) If the taxpayer reports a capital gain or
24         loss on the taxpayer's federal income tax return for
25         the taxable year based on a sale or transfer of
26         property for which the taxpayer was required in any
27         taxable year to make an addition modification under
28         subparagraph (D-15), then an amount equal to the
29         aggregate amount of the deductions taken in all taxable
30         years under subparagraph (Z) with respect to that
31         property.
32             The taxpayer is required to make the addition
33         modification under this subparagraph only once with
34         respect to any one piece of property;

 

 

09400SB0507sam003 - 9 - LRB094 08414 BDD 47246 a

1             (D-17) For taxable years ending on or after
2         December 31, 2004, an amount equal to the amount
3         otherwise allowed as a deduction in computing base
4         income for interest paid, accrued, or incurred,
5         directly or indirectly, to a foreign person who would
6         be a member of the same unitary business group but for
7         the fact that foreign person's business activity
8         outside the United States is 80% or more of the foreign
9         person's total business activity. The addition
10         modification required by this subparagraph shall be
11         reduced to the extent that dividends were included in
12         base income of the unitary group for the same taxable
13         year and received by the taxpayer or by a member of the
14         taxpayer's unitary business group (including amounts
15         included in gross income under Sections 951 through 964
16         of the Internal Revenue Code and amounts included in
17         gross income under Section 78 of the Internal Revenue
18         Code) with respect to the stock of the same person to
19         whom the interest was paid, accrued, or incurred.
20             This paragraph shall not apply to the following:
21                 (i) an item of interest paid, accrued, or
22             incurred, directly or indirectly, to a foreign
23             person who is subject in a foreign country or
24             state, other than a state which requires mandatory
25             unitary reporting, to a tax on or measured by net
26             income with respect to such interest; or
27                 (ii) an item of interest paid, accrued, or
28             incurred, directly or indirectly, to a foreign
29             person if the taxpayer can establish, based on a
30             preponderance of the evidence, both of the
31             following:
32                     (a) the foreign person, during the same
33                 taxable year, paid, accrued, or incurred, the
34                 interest to a person that is not a related

 

 

09400SB0507sam003 - 10 - LRB094 08414 BDD 47246 a

1                 member, and
2                     (b) the transaction giving rise to the
3                 interest expense between the taxpayer and the
4                 foreign person did not have as a principal
5                 purpose the avoidance of Illinois income tax,
6                 and is paid pursuant to a contract or agreement
7                 that reflects an arm's-length interest rate
8                 and terms; or
9                 (iii) the taxpayer can establish, based on
10             clear and convincing evidence, that the interest
11             paid, accrued, or incurred relates to a contract or
12             agreement entered into at arm's-length rates and
13             terms and the principal purpose for the payment is
14             not federal or Illinois tax avoidance; or
15                 (iv) an item of interest paid, accrued, or
16             incurred, directly or indirectly, to a foreign
17             person if the taxpayer establishes by clear and
18             convincing evidence that the adjustments are
19             unreasonable; or if the taxpayer and the Director
20             agree in writing to the application or use of an
21             alternative method of apportionment under Section
22             304(f).
23                 Nothing in this subsection shall preclude the
24             Director from making any other adjustment
25             otherwise allowed under Section 404 of this Act for
26             any tax year beginning after the effective date of
27             this amendment provided such adjustment is made
28             pursuant to regulation adopted by the Department
29             and such regulations provide methods and standards
30             by which the Department will utilize its authority
31             under Section 404 of this Act;
32             (D-18) For taxable years ending on or after
33         December 31, 2004, an amount equal to the amount of
34         intangible expenses and costs otherwise allowed as a

 

 

09400SB0507sam003 - 11 - LRB094 08414 BDD 47246 a

1         deduction in computing base income, and that were paid,
2         accrued, or incurred, directly or indirectly, 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. 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 under Sections 951 through 964 of the Internal
14         Revenue Code and amounts included in gross income under
15         Section 78 of the Internal Revenue Code) with respect
16         to the stock of the same person to whom the intangible
17         expenses and costs were directly or indirectly paid,
18         incurred, or accrued. The preceding sentence does not
19         apply to the extent that the same dividends caused a
20         reduction to the addition modification required under
21         Section 203(a)(2)(D-17) of this Act. As used in this
22         subparagraph, the term "intangible expenses and costs"
23         includes (1) expenses, losses, and costs for, or
24         related to, the direct or indirect acquisition, use,
25         maintenance or management, ownership, sale, exchange,
26         or any other disposition of intangible property; (2)
27         losses incurred, directly or indirectly, from
28         factoring transactions or discounting transactions;
29         (3) royalty, patent, technical, and copyright fees;
30         (4) licensing fees; and (5) other similar expenses and
31         costs. For purposes of this subparagraph, "intangible
32         property" includes patents, patent applications, trade
33         names, trademarks, service marks, copyrights, mask
34         works, trade secrets, and similar types of intangible

 

 

09400SB0507sam003 - 12 - LRB094 08414 BDD 47246 a

1         assets.
2             This paragraph shall not apply to the following:
3                 (i) any item of intangible expenses or costs
4             paid, accrued, or incurred, directly or
5             indirectly, from a transaction with a foreign
6             person who is subject in a foreign country or
7             state, other than a state which requires mandatory
8             unitary reporting, to a tax on or measured by net
9             income with respect to such item; or
10                 (ii) any item of intangible expense or cost
11             paid, accrued, or incurred, directly or
12             indirectly, if the taxpayer can establish, based
13             on a preponderance of the evidence, both of the
14             following:
15                     (a) the foreign person during the same
16                 taxable year paid, accrued, or incurred, the
17                 intangible expense or cost to a person that is
18                 not a related member, and
19                     (b) the transaction giving rise to the
20                 intangible expense or cost between the
21                 taxpayer and the foreign person did not have as
22                 a principal purpose the avoidance of Illinois
23                 income tax, and is paid pursuant to a contract
24                 or agreement that reflects arm's-length terms;
25                 or
26                 (iii) any item of intangible expense or cost
27             paid, accrued, or incurred, directly or
28             indirectly, from a transaction with a foreign
29             person if the taxpayer establishes by clear and
30             convincing evidence, that the adjustments are
31             unreasonable; or if the taxpayer and the Director
32             agree in writing to the application or use of an
33             alternative method of apportionment under Section
34             304(f);

 

 

09400SB0507sam003 - 13 - LRB094 08414 BDD 47246 a

1                 Nothing in this subsection shall preclude the
2             Director from making any other adjustment
3             otherwise allowed under Section 404 of this Act for
4             any tax year beginning after the effective date of
5             this amendment provided such adjustment is made
6             pursuant to regulation adopted by the Department
7             and such regulations provide methods and standards
8             by which the Department will utilize its authority
9             under Section 404 of this Act;
10             (D-20) For taxable years beginning on or after
11         January 1, 2002 and ending on or before December 31,
12         2005, in the case of a distribution from a qualified
13         tuition program under Section 529 of the Internal
14         Revenue Code, other than (i) a distribution from a
15         College Savings Pool created under Section 16.5 of the
16         State Treasurer Act or (ii) a distribution from the
17         Illinois Prepaid Tuition Trust Fund, an amount equal to
18         the amount excluded from gross income under Section
19         529(c)(3)(B). For taxable years beginning on or after
20         January 1, 2006, in the case of a distribution from a
21         qualified tuition program under Section 529 of the
22         Internal Revenue Code, other than (i) a distribution
23         from a College Savings Pool created under Section 16.5
24         of the State Treasurer Act, (ii) a distribution from
25         the Illinois Prepaid Tuition Trust Fund, or (iii) a
26         distribution from a qualified tuition program under
27         Section 529 of the Internal Revenue Code that (I)
28         adopts and determines that its offering materials
29         comply with the College Savings Plans Network's
30         disclosure principles and (II) has made reasonable
31         efforts to inform in-state residents of the existence
32         of in-state qualified tuition programs by informing
33         Illinois residents directly and, where applicable, to
34         inform financial intermediaries distributing the

 

 

09400SB0507sam003 - 14 - LRB094 08414 BDD 47246 a

1         program to inform in-state residents of the existence
2         of in-state qualified tuition programs at least
3         annually, an amount equal to the amount excluded from
4         gross income under Section 529(c)(3)(B).
5             For the purposes of this subparagraph (D-20), a
6         qualified tuition program has made reasonable efforts
7         if it makes disclosures (which may use the term
8         "in-state program" or "in-state plan" and need not
9         specifically refer to Illinois or its qualified
10         programs by name) (i) directly to prospective
11         participants in its offering materials or makes a
12         public disclosure, such as a website posting; and (ii)
13         where applicable, to intermediaries selling the
14         out-of-state program in the same manner that the
15         out-of-state program distributes its offering
16         materials;
17             (D-21) For taxable years beginning on or after
18         January 1, 2006, in the case of transfer of moneys from
19         a qualified tuition program under Section 529 of the
20         Internal Revenue Code that is administered by the State
21         to an out-of-state program, an amount equal to the
22         amount of moneys previously deducted from base income
23         under subsection (a)(2)(Y) of this Section.
24     and by deducting from the total so obtained the sum of the
25     following amounts:
26             (E) For taxable years ending before December 31,
27         2001, any amount included in such total in respect of
28         any compensation (including but not limited to any
29         compensation paid or accrued to a serviceman while a
30         prisoner of war or missing in action) paid to a
31         resident by reason of being on active duty in the Armed
32         Forces of the United States and in respect of any
33         compensation paid or accrued to a resident who as a
34         governmental employee was a prisoner of war or missing

 

 

09400SB0507sam003 - 15 - LRB094 08414 BDD 47246 a

1         in action, and in respect of any compensation paid to a
2         resident in 1971 or thereafter for annual training
3         performed pursuant to Sections 502 and 503, Title 32,
4         United States Code as a member of the Illinois National
5         Guard. For taxable years ending on or after December
6         31, 2001, any amount included in such total in respect
7         of any compensation (including but not limited to any
8         compensation paid or accrued to a serviceman while a
9         prisoner of war or missing in action) paid to a
10         resident by reason of being a member of any component
11         of the Armed Forces of the United States and in respect
12         of any compensation paid or accrued to a resident who
13         as a governmental employee was a prisoner of war or
14         missing in action, and in respect of any compensation
15         paid to a resident in 2001 or thereafter by reason of
16         being a member of the Illinois National Guard. The
17         provisions of this amendatory Act of the 92nd General
18         Assembly are exempt from the provisions of Section 250;
19             (F) An amount equal to all amounts included in such
20         total pursuant to the provisions of Sections 402(a),
21         402(c), 403(a), 403(b), 406(a), 407(a), and 408 of the
22         Internal Revenue Code, or included in such total as
23         distributions under the provisions of any retirement
24         or disability plan for employees of any governmental
25         agency or unit, or retirement payments to retired
26         partners, which payments are excluded in computing net
27         earnings from self employment by Section 1402 of the
28         Internal Revenue Code and regulations adopted pursuant
29         thereto;
30             (G) The valuation limitation amount;
31             (H) An amount equal to the amount of any tax
32         imposed by this Act which was refunded to the taxpayer
33         and included in such total for the taxable year;
34             (I) An amount equal to all amounts included in such

 

 

09400SB0507sam003 - 16 - LRB094 08414 BDD 47246 a

1         total pursuant to the provisions of Section 111 of the
2         Internal Revenue Code as a recovery of items previously
3         deducted from adjusted gross income in the computation
4         of taxable income;
5             (J) An amount equal to those dividends included in
6         such total which were paid by a corporation which
7         conducts business operations in an Enterprise Zone or
8         zones created under the Illinois Enterprise Zone Act,
9         and conducts substantially all of its operations in an
10         Enterprise Zone or zones;
11             (K) An amount equal to those dividends included in
12         such total that were paid by a corporation that
13         conducts business operations in a federally designated
14         Foreign Trade Zone or Sub-Zone and that is designated a
15         High Impact Business located in Illinois; provided
16         that dividends eligible for the deduction provided in
17         subparagraph (J) of paragraph (2) of this subsection
18         shall not be eligible for the deduction provided under
19         this subparagraph (K);
20             (L) For taxable years ending after December 31,
21         1983, an amount equal to all social security benefits
22         and railroad retirement benefits included in such
23         total pursuant to Sections 72(r) and 86 of the Internal
24         Revenue Code;
25             (M) With the exception of any amounts subtracted
26         under subparagraph (N), an amount equal to the sum of
27         all amounts disallowed as deductions by (i) Sections
28         171(a) (2), and 265(2) of the Internal Revenue Code of
29         1954, as now or hereafter amended, and all amounts of
30         expenses allocable to interest and disallowed as
31         deductions by Section 265(1) of the Internal Revenue
32         Code of 1954, as now or hereafter amended; and (ii) for
33         taxable years ending on or after August 13, 1999,
34         Sections 171(a)(2), 265, 280C, and 832(b)(5)(B)(i) of

 

 

09400SB0507sam003 - 17 - LRB094 08414 BDD 47246 a

1         the Internal Revenue Code; the provisions of this
2         subparagraph are exempt from the provisions of Section
3         250;
4             (N) An amount equal to all amounts included in such
5         total which are exempt from taxation by this State
6         either by reason of its statutes or Constitution or by
7         reason of the Constitution, treaties or statutes of the
8         United States; provided that, in the case of any
9         statute of this State that exempts income derived from
10         bonds or other obligations from the tax imposed under
11         this Act, the amount exempted shall be the interest net
12         of bond premium amortization;
13             (O) An amount equal to any contribution made to a
14         job training project established pursuant to the Tax
15         Increment Allocation Redevelopment Act;
16             (P) An amount equal to the amount of the deduction
17         used to compute the federal income tax credit for
18         restoration of substantial amounts held under claim of
19         right for the taxable year pursuant to Section 1341 of
20         the Internal Revenue Code of 1986;
21             (Q) An amount equal to any amounts included in such
22         total, received by the taxpayer as an acceleration in
23         the payment of life, endowment or annuity benefits in
24         advance of the time they would otherwise be payable as
25         an indemnity for a terminal illness;
26             (R) An amount equal to the amount of any federal or
27         State bonus paid to veterans of the Persian Gulf War;
28             (S) An amount, to the extent included in adjusted
29         gross income, equal to the amount of a contribution
30         made in the taxable year on behalf of the taxpayer to a
31         medical care savings account established under the
32         Medical Care Savings Account Act or the Medical Care
33         Savings Account Act of 2000 to the extent the
34         contribution is accepted by the account administrator

 

 

09400SB0507sam003 - 18 - LRB094 08414 BDD 47246 a

1         as provided in that Act;
2             (T) An amount, to the extent included in adjusted
3         gross income, equal to the amount of interest earned in
4         the taxable year on a medical care savings account
5         established under the Medical Care Savings Account Act
6         or the Medical Care Savings Account Act of 2000 on
7         behalf of the taxpayer, other than interest added
8         pursuant to item (D-5) of this paragraph (2);
9             (U) For one taxable year beginning on or after
10         January 1, 1994, an amount equal to the total amount of
11         tax imposed and paid under subsections (a) and (b) of
12         Section 201 of this Act on grant amounts received by
13         the taxpayer under the Nursing Home Grant Assistance
14         Act during the taxpayer's taxable years 1992 and 1993;
15             (V) Beginning with tax years ending on or after
16         December 31, 1995 and ending with tax years ending on
17         or before December 31, 2004, an amount equal to the
18         amount paid by a taxpayer who is a self-employed
19         taxpayer, a partner of a partnership, or a shareholder
20         in a Subchapter S corporation for health insurance or
21         long-term care insurance for that taxpayer or that
22         taxpayer's spouse or dependents, to the extent that the
23         amount paid for that health insurance or long-term care
24         insurance may be deducted under Section 213 of the
25         Internal Revenue Code of 1986, has not been deducted on
26         the federal income tax return of the taxpayer, and does
27         not exceed the taxable income attributable to that
28         taxpayer's income, self-employment income, or
29         Subchapter S corporation income; except that no
30         deduction shall be allowed under this item (V) if the
31         taxpayer is eligible to participate in any health
32         insurance or long-term care insurance plan of an
33         employer of the taxpayer or the taxpayer's spouse. The
34         amount of the health insurance and long-term care

 

 

09400SB0507sam003 - 19 - LRB094 08414 BDD 47246 a

1         insurance subtracted under this item (V) shall be
2         determined by multiplying total health insurance and
3         long-term care insurance premiums paid by the taxpayer
4         times a number that represents the fractional
5         percentage of eligible medical expenses under Section
6         213 of the Internal Revenue Code of 1986 not actually
7         deducted on the taxpayer's federal income tax return;
8             (W) For taxable years beginning on or after January
9         1, 1998, all amounts included in the taxpayer's federal
10         gross income in the taxable year from amounts converted
11         from a regular IRA to a Roth IRA. This paragraph is
12         exempt from the provisions of Section 250;
13             (X) For taxable year 1999 and thereafter, an amount
14         equal to the amount of any (i) distributions, to the
15         extent includible in gross income for federal income
16         tax purposes, made to the taxpayer because of his or
17         her status as a victim of persecution for racial or
18         religious reasons by Nazi Germany or any other Axis
19         regime or as an heir of the victim and (ii) items of
20         income, to the extent includible in gross income for
21         federal income tax purposes, attributable to, derived
22         from or in any way related to assets stolen from,
23         hidden from, or otherwise lost to a victim of
24         persecution for racial or religious reasons by Nazi
25         Germany or any other Axis regime immediately prior to,
26         during, and immediately after World War II, including,
27         but not limited to, interest on the proceeds receivable
28         as insurance under policies issued to a victim of
29         persecution for racial or religious reasons by Nazi
30         Germany or any other Axis regime by European insurance
31         companies immediately prior to and during World War II;
32         provided, however, this subtraction from federal
33         adjusted gross income does not apply to assets acquired
34         with such assets or with the proceeds from the sale of

 

 

09400SB0507sam003 - 20 - LRB094 08414 BDD 47246 a

1         such assets; provided, further, this paragraph shall
2         only apply to a taxpayer who was the first recipient of
3         such assets after their recovery and who is a victim of
4         persecution for racial or religious reasons by Nazi
5         Germany or any other Axis regime or as an heir of the
6         victim. The amount of and the eligibility for any
7         public assistance, benefit, or similar entitlement is
8         not affected by the inclusion of items (i) and (ii) of
9         this paragraph in gross income for federal income tax
10         purposes. This paragraph is exempt from the provisions
11         of Section 250;
12             (Y) For taxable years beginning on or after January
13         1, 2002 and ending on or before December 31, 2004,
14         moneys contributed in the taxable year to a College
15         Savings Pool account under Section 16.5 of the State
16         Treasurer Act, except that amounts excluded from gross
17         income under Section 529(c)(3)(C)(i) of the Internal
18         Revenue Code shall not be considered moneys
19         contributed under this subparagraph (Y). For taxable
20         years beginning on or after January 1, 2005, a maximum
21         of $10,000 contributed in the taxable year to (i) a
22         College Savings Pool account under Section 16.5 of the
23         State Treasurer Act or (ii) the Illinois Prepaid
24         Tuition Trust Fund, except that amounts excluded from
25         gross income under Section 529(c)(3)(C)(i) of the
26         Internal Revenue Code shall not be considered moneys
27         contributed under this subparagraph (Y). This
28         subparagraph (Y) is exempt from the provisions of
29         Section 250;
30             (Z) For taxable years 2001 and thereafter, for the
31         taxable year in which the bonus depreciation deduction
32         (30% of the adjusted basis of the qualified property)
33         is taken on the taxpayer's federal income tax return
34         under subsection (k) of Section 168 of the Internal

 

 

09400SB0507sam003 - 21 - LRB094 08414 BDD 47246 a

1         Revenue Code and for each applicable taxable year
2         thereafter, an amount equal to "x", where:
3                 (1) "y" equals the amount of the depreciation
4             deduction taken for the taxable year on the
5             taxpayer's federal income tax return on property
6             for which the bonus depreciation deduction (30% of
7             the adjusted basis of the qualified property) was
8             taken in any year under subsection (k) of Section
9             168 of the Internal Revenue Code, but not including
10             the bonus depreciation deduction; and
11                 (2) "x" equals "y" multiplied by 30 and then
12             divided by 70 (or "y" multiplied by 0.429).
13             The aggregate amount deducted under this
14         subparagraph in all taxable years for any one piece of
15         property may not exceed the amount of the bonus
16         depreciation deduction (30% of the adjusted basis of
17         the qualified property) taken on that property on the
18         taxpayer's federal income tax return under subsection
19         (k) of Section 168 of the Internal Revenue Code;
20             (AA) If the taxpayer reports a capital gain or loss
21         on the taxpayer's federal income tax return for the
22         taxable year based on a sale or transfer of property
23         for which the taxpayer was required in any taxable year
24         to make an addition modification under subparagraph
25         (D-15), then an amount equal to that addition
26         modification.
27             The taxpayer is allowed to take the deduction under
28         this subparagraph only once with respect to any one
29         piece of property;
30             (BB) Any amount included in adjusted gross income,
31         other than salary, received by a driver in a
32         ridesharing arrangement using a motor vehicle;
33             (CC) The amount of (i) any interest income (net of
34         the deductions allocable thereto) taken into account

 

 

09400SB0507sam003 - 22 - LRB094 08414 BDD 47246 a

1         for the taxable year with respect to a transaction with
2         a taxpayer that is required to make an addition
3         modification with respect to such transaction under
4         Section 203(a)(2)(D-17), 203(b)(2)(E-13),
5         203(c)(2)(G-12), or 203(d)(2)(D-7), but not to exceed
6         the amount of that addition modification, and (ii) any
7         income from intangible property (net of the deductions
8         allocable thereto) taken into account for the taxable
9         year with respect to a transaction with a taxpayer that
10         is required to make an addition modification with
11         respect to such transaction under Section
12         203(a)(2)(D-18), 203(b)(2)(E-14), 203(c)(2)(G-13), or
13         203(d)(2)(D-8), but not to exceed the amount of that
14         addition modification;
15             (DD) 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 a foreign person who would be a
19         member of the taxpayer's unitary business group but for
20         the fact that the foreign person's business activity
21         outside the United States is 80% or more of that
22         person's total business activity, but not to exceed the
23         addition modification required to be made for the same
24         taxable year under Section 203(a)(2)(D-17) for
25         interest paid, accrued, or incurred, directly or
26         indirectly, to the same foreign person; and
27             (EE) An amount equal to the income from intangible
28         property taken into account for the taxable year (net
29         of the deductions allocable thereto) with respect to
30         transactions with a foreign person who would be a
31         member of the taxpayer's unitary business group but for
32         the fact that the foreign person's business activity
33         outside the United States is 80% or more of that
34         person's total business activity, but not to exceed the

 

 

09400SB0507sam003 - 23 - LRB094 08414 BDD 47246 a

1         addition modification required to be made for the same
2         taxable year under Section 203(a)(2)(D-18) for
3         intangible expenses and costs paid, accrued, or
4         incurred, directly or indirectly, to the same foreign
5         person.
 
6     (b) Corporations.
7         (1) In general. In the case of a corporation, base
8     income means an amount equal to the taxpayer's taxable
9     income for the taxable year as modified by paragraph (2).
10         (2) Modifications. The taxable income referred to in
11     paragraph (1) shall be modified by adding thereto the sum
12     of the following amounts:
13             (A) An amount equal to all amounts paid or accrued
14         to the taxpayer as interest and all distributions
15         received from regulated investment companies during
16         the taxable year to the extent excluded from gross
17         income in the computation of taxable income;
18             (B) An amount equal to the amount of tax imposed by
19         this Act to the extent deducted from gross income in
20         the computation of taxable income for the taxable year;
21             (C) In the case of a regulated investment company,
22         an amount equal to the excess of (i) the net long-term
23         capital gain for the taxable year, over (ii) the amount
24         of the capital gain dividends designated as such in
25         accordance with Section 852(b)(3)(C) of the Internal
26         Revenue Code and any amount designated under Section
27         852(b)(3)(D) of the Internal Revenue Code,
28         attributable to the taxable year (this amendatory Act
29         of 1995 (Public Act 89-89) is declarative of existing
30         law and is not a new enactment);
31             (D) The amount of any net operating loss deduction
32         taken in arriving at taxable income, other than a net
33         operating loss carried forward from a taxable year

 

 

09400SB0507sam003 - 24 - LRB094 08414 BDD 47246 a

1         ending prior to December 31, 1986;
2             (E) For taxable years in which a net operating loss
3         carryback or carryforward from a taxable year ending
4         prior to December 31, 1986 is an element of taxable
5         income under paragraph (1) of subsection (e) or
6         subparagraph (E) of paragraph (2) of subsection (e),
7         the amount by which addition modifications other than
8         those provided by this subparagraph (E) exceeded
9         subtraction modifications in such earlier taxable
10         year, with the following limitations applied in the
11         order that they are listed:
12                 (i) the addition modification relating to the
13             net operating loss carried back or forward to the
14             taxable year from any taxable year ending prior to
15             December 31, 1986 shall be reduced by the amount of
16             addition modification under this subparagraph (E)
17             which related to that net operating loss and which
18             was taken into account in calculating the base
19             income of an earlier taxable year, and
20                 (ii) the addition modification relating to the
21             net operating loss carried back or forward to the
22             taxable year from any taxable year ending prior to
23             December 31, 1986 shall not exceed the amount of
24             such carryback or carryforward;
25             For taxable years in which there is a net operating
26         loss carryback or carryforward from more than one other
27         taxable year ending prior to December 31, 1986, the
28         addition modification provided in this subparagraph
29         (E) shall be the sum of the amounts computed
30         independently under the preceding provisions of this
31         subparagraph (E) for each such taxable year;
32             (E-5) For taxable years ending after December 31,
33         1997, an amount equal to any eligible remediation costs
34         that the corporation deducted in computing adjusted

 

 

09400SB0507sam003 - 25 - LRB094 08414 BDD 47246 a

1         gross income and for which the corporation claims a
2         credit under subsection (l) of Section 201;
3             (E-10) For taxable years 2001 and thereafter, an
4         amount equal to the bonus depreciation deduction (30%
5         of the adjusted basis of the qualified property) taken
6         on the taxpayer's federal income tax return for the
7         taxable year under subsection (k) of Section 168 of the
8         Internal Revenue Code; and
9             (E-11) If the taxpayer reports a capital gain or
10         loss on the taxpayer's federal income tax return for
11         the taxable year based on a sale or transfer of
12         property for which the taxpayer was required in any
13         taxable year to make an addition modification under
14         subparagraph (E-10), then an amount equal to the
15         aggregate amount of the deductions taken in all taxable
16         years under subparagraph (T) with respect to that
17         property.
18             The taxpayer is required to make the addition
19         modification under this subparagraph only once with
20         respect to any one piece of property;
21             (E-12) For taxable years ending on or after
22         December 31, 2004, an amount equal to the amount
23         otherwise allowed as a deduction in computing base
24         income for interest paid, accrued, or incurred,
25         directly or indirectly, to a foreign person who would
26         be a member of the same unitary business group but for
27         the fact the foreign person's business activity
28         outside the United States is 80% or more of the foreign
29         person's total business activity. The addition
30         modification required by this subparagraph shall be
31         reduced to the extent that dividends were included in
32         base income of the unitary group for the same taxable
33         year and received by the taxpayer or by a member of the
34         taxpayer's unitary business group (including amounts

 

 

09400SB0507sam003 - 26 - LRB094 08414 BDD 47246 a

1         included in gross income pursuant to Sections 951
2         through 964 of the Internal Revenue Code and amounts
3         included in gross income under Section 78 of the
4         Internal Revenue Code) with respect to the stock of the
5         same person to whom the interest was paid, accrued, or
6         incurred.
7             This paragraph shall not apply to the following:
8                 (i) an item of interest paid, accrued, or
9             incurred, directly or indirectly, to a foreign
10             person who is subject in a foreign country or
11             state, other than a state which requires mandatory
12             unitary reporting, to a tax on or measured by net
13             income with respect to such interest; or
14                 (ii) an item of interest paid, accrued, or
15             incurred, directly or indirectly, to a foreign
16             person if the taxpayer can establish, based on a
17             preponderance of the evidence, both of the
18             following:
19                     (a) the foreign person, during the same
20                 taxable year, paid, accrued, or incurred, the
21                 interest to a person that is not a related
22                 member, and
23                     (b) the transaction giving rise to the
24                 interest expense between the taxpayer and the
25                 foreign person did not have as a principal
26                 purpose the avoidance of Illinois income tax,
27                 and is paid pursuant to a contract or agreement
28                 that reflects an arm's-length interest rate
29                 and terms; or
30                 (iii) the taxpayer can establish, based on
31             clear and convincing evidence, that the interest
32             paid, accrued, or incurred relates to a contract or
33             agreement entered into at arm's-length rates and
34             terms and the principal purpose for the payment is

 

 

09400SB0507sam003 - 27 - LRB094 08414 BDD 47246 a

1             not federal or Illinois tax avoidance; or
2                 (iv) an item of interest paid, accrued, or
3             incurred, directly or indirectly, to a foreign
4             person if the taxpayer establishes by clear and
5             convincing evidence that the adjustments are
6             unreasonable; or if the taxpayer and the Director
7             agree in writing to the application or use of an
8             alternative method of apportionment under Section
9             304(f).
10                 Nothing in this subsection shall preclude the
11             Director from making any other adjustment
12             otherwise allowed under Section 404 of this Act for
13             any tax year beginning after the effective date of
14             this amendment provided such adjustment is made
15             pursuant to regulation adopted by the Department
16             and such regulations provide methods and standards
17             by which the Department will utilize its authority
18             under Section 404 of this Act;
19             (E-13) For taxable years ending on or after
20         December 31, 2004, an amount equal to the amount of
21         intangible expenses and costs otherwise allowed as a
22         deduction in computing base income, and that were paid,
23         accrued, or incurred, directly or indirectly, to a
24         foreign person who would be a member of the same
25         unitary business group but for the fact that the
26         foreign person's business activity outside the United
27         States is 80% or more of that person's total business
28         activity. The addition modification required by this
29         subparagraph shall be reduced to the extent that
30         dividends were included in base income of the unitary
31         group for the same taxable year and received by the
32         taxpayer or by a member of the taxpayer's unitary
33         business group (including amounts included in gross
34         income pursuant to Sections 951 through 964 of the

 

 

09400SB0507sam003 - 28 - LRB094 08414 BDD 47246 a

1         Internal Revenue Code and amounts included in gross
2         income under Section 78 of the Internal Revenue Code)
3         with respect to the stock of the same person to whom
4         the intangible expenses and costs were directly or
5         indirectly paid, incurred, or accrued. The preceding
6         sentence shall not apply to the extent that the same
7         dividends caused a reduction to the addition
8         modification required under Section 203(b)(2)(E-12) of
9         this Act. As used in this subparagraph, the term
10         "intangible expenses and costs" includes (1) expenses,
11         losses, and costs for, or related to, the direct or
12         indirect acquisition, use, maintenance or management,
13         ownership, sale, exchange, or any other disposition of
14         intangible property; (2) losses incurred, directly or
15         indirectly, from factoring transactions or discounting
16         transactions; (3) royalty, patent, technical, and
17         copyright fees; (4) licensing fees; and (5) other
18         similar expenses and costs. For purposes of this
19         subparagraph, "intangible property" includes patents,
20         patent applications, trade names, trademarks, service
21         marks, copyrights, mask works, trade secrets, and
22         similar types of intangible assets.
23             This paragraph shall not apply to the following:
24                 (i) any item of intangible expenses or costs
25             paid, accrued, or incurred, directly or
26             indirectly, from a transaction with a foreign
27             person who is subject in a foreign country or
28             state, other than a state which requires mandatory
29             unitary reporting, to a tax on or measured by net
30             income with respect to such item; or
31                 (ii) any item of intangible expense or cost
32             paid, accrued, or incurred, directly or
33             indirectly, if the taxpayer can establish, based
34             on a preponderance of the evidence, both of the

 

 

09400SB0507sam003 - 29 - LRB094 08414 BDD 47246 a

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

 

 

09400SB0507sam003 - 30 - LRB094 08414 BDD 47246 a

1         and included in such total for the taxable year;
2             (G) An amount equal to any amount included in such
3         total under Section 78 of the Internal Revenue Code;
4             (H) In the case of a regulated investment company,
5         an amount equal to the amount of exempt interest
6         dividends as defined in subsection (b) (5) of Section
7         852 of the Internal Revenue Code, paid to shareholders
8         for the taxable year;
9             (I) With the exception of any amounts subtracted
10         under subparagraph (J), an amount equal to the sum of
11         all amounts disallowed as deductions by (i) Sections
12         171(a) (2), and 265(a)(2) and amounts disallowed as
13         interest expense by Section 291(a)(3) of the Internal
14         Revenue Code, as now or hereafter amended, and all
15         amounts of expenses allocable to interest and
16         disallowed as deductions by Section 265(a)(1) of the
17         Internal Revenue Code, as now or hereafter amended; and
18         (ii) for taxable years ending on or after August 13,
19         1999, Sections 171(a)(2), 265, 280C, 291(a)(3), and
20         832(b)(5)(B)(i) of the Internal Revenue Code; the
21         provisions of this subparagraph are exempt from the
22         provisions of Section 250;
23             (J) An amount equal to all amounts included in such
24         total which are exempt from taxation by this State
25         either by reason of its statutes or Constitution or by
26         reason of the Constitution, treaties or statutes of the
27         United States; provided that, in the case of any
28         statute of this State that exempts income derived from
29         bonds or other obligations from the tax imposed under
30         this Act, the amount exempted shall be the interest net
31         of bond premium amortization;
32             (K) An amount equal to those dividends included in
33         such total which were paid by a corporation which
34         conducts business operations in an Enterprise Zone or

 

 

09400SB0507sam003 - 31 - LRB094 08414 BDD 47246 a

1         zones created under the Illinois Enterprise Zone Act
2         and conducts substantially all of its operations in an
3         Enterprise Zone or zones;
4             (L) An amount equal to those dividends included in
5         such total that were paid by a corporation that
6         conducts business operations in a federally designated
7         Foreign Trade Zone or Sub-Zone and that is designated a
8         High Impact Business located in Illinois; provided
9         that dividends eligible for the deduction provided in
10         subparagraph (K) of paragraph 2 of this subsection
11         shall not be eligible for the deduction provided under
12         this subparagraph (L);
13             (M) For any taxpayer that is a financial
14         organization within the meaning of Section 304(c) of
15         this Act, an amount included in such total as interest
16         income from a loan or loans made by such taxpayer to a
17         borrower, to the extent that such a loan is secured by
18         property which is eligible for the Enterprise Zone
19         Investment Credit. To determine the portion of a loan
20         or loans that is secured by property eligible for a
21         Section 201(f) investment credit to the borrower, the
22         entire principal amount of the loan or loans between
23         the taxpayer and the borrower should be divided into
24         the basis of the Section 201(f) investment credit
25         property which secures the loan or loans, using for
26         this purpose the original basis of such property on the
27         date that it was placed in service in the Enterprise
28         Zone. The subtraction modification available to
29         taxpayer in any year under this subsection shall be
30         that portion of the total interest paid by the borrower
31         with respect to such loan attributable to the eligible
32         property as calculated under the previous sentence;
33             (M-1) For any taxpayer that is a financial
34         organization within the meaning of Section 304(c) of

 

 

09400SB0507sam003 - 32 - LRB094 08414 BDD 47246 a

1         this Act, an amount included in such total as interest
2         income from a loan or loans made by such taxpayer to a
3         borrower, to the extent that such a loan is secured by
4         property which is eligible for the High Impact Business
5         Investment Credit. To determine the portion of a loan
6         or loans that is secured by property eligible for a
7         Section 201(h) investment credit to the borrower, the
8         entire principal amount of the loan or loans between
9         the taxpayer and the borrower should be divided into
10         the basis of the Section 201(h) investment credit
11         property which secures the loan or loans, using for
12         this purpose the original basis of such property on the
13         date that it was placed in service in a federally
14         designated Foreign Trade Zone or Sub-Zone located in
15         Illinois. No taxpayer that is eligible for the
16         deduction provided in subparagraph (M) of paragraph
17         (2) of this subsection shall be eligible for the
18         deduction provided under this subparagraph (M-1). The
19         subtraction modification available to taxpayers in any
20         year under this subsection shall be that portion of the
21         total interest paid by the borrower with respect to
22         such loan attributable to the eligible property as
23         calculated under the previous sentence;
24             (N) Two times any contribution made during the
25         taxable year to a designated zone organization to the
26         extent that the contribution (i) qualifies as a
27         charitable contribution under subsection (c) of
28         Section 170 of the Internal Revenue Code and (ii) must,
29         by its terms, be used for a project approved by the
30         Department of Commerce and Economic Opportunity under
31         Section 11 of the Illinois Enterprise Zone Act;
32             (O) An amount equal to: (i) 85% for taxable years
33         ending on or before December 31, 1992, or, a percentage
34         equal to the percentage allowable under Section

 

 

09400SB0507sam003 - 33 - LRB094 08414 BDD 47246 a

1         243(a)(1) of the Internal Revenue Code of 1986 for
2         taxable years ending after December 31, 1992, of the
3         amount by which dividends included in taxable income
4         and received from a corporation that is not created or
5         organized under the laws of the United States or any
6         state or political subdivision thereof, including, for
7         taxable years ending on or after December 31, 1988,
8         dividends received or deemed received or paid or deemed
9         paid under Sections 951 through 964 of the Internal
10         Revenue Code, exceed the amount of the modification
11         provided under subparagraph (G) of paragraph (2) of
12         this subsection (b) which is related to such dividends;
13         plus (ii) 100% of the amount by which dividends,
14         included in taxable income and received, including,
15         for taxable years ending on or after December 31, 1988,
16         dividends received or deemed received or paid or deemed
17         paid under Sections 951 through 964 of the Internal
18         Revenue Code, from any such corporation specified in
19         clause (i) that would but for the provisions of Section
20         1504 (b) (3) of the Internal Revenue Code be treated as
21         a member of the affiliated group which includes the
22         dividend recipient, exceed the amount of the
23         modification provided under subparagraph (G) of
24         paragraph (2) of this subsection (b) which is related
25         to such dividends;
26             (P) An amount equal to any contribution made to a
27         job training project established pursuant to the Tax
28         Increment Allocation Redevelopment Act;
29             (Q) An amount equal to the amount of the deduction
30         used to compute the federal income tax credit for
31         restoration of substantial amounts held under claim of
32         right for the taxable year pursuant to Section 1341 of
33         the Internal Revenue Code of 1986;
34             (R) In the case of an attorney-in-fact with respect

 

 

09400SB0507sam003 - 34 - LRB094 08414 BDD 47246 a

1         to whom an interinsurer or a reciprocal insurer has
2         made the election under Section 835 of the Internal
3         Revenue Code, 26 U.S.C. 835, an amount equal to the
4         excess, if any, of the amounts paid or incurred by that
5         interinsurer or reciprocal insurer in the taxable year
6         to the attorney-in-fact over the deduction allowed to
7         that interinsurer or reciprocal insurer with respect
8         to the attorney-in-fact under Section 835(b) of the
9         Internal Revenue Code for the taxable year;
10             (S) For taxable years ending on or after December
11         31, 1997, in the case of a Subchapter S corporation, an
12         amount equal to all amounts of income allocable to a
13         shareholder subject to the Personal Property Tax
14         Replacement Income Tax imposed by subsections (c) and
15         (d) of Section 201 of this Act, including amounts
16         allocable to organizations exempt from federal income
17         tax by reason of Section 501(a) of the Internal Revenue
18         Code. This subparagraph (S) is exempt from the
19         provisions of Section 250;
20             (T) For taxable years 2001 and thereafter, for the
21         taxable year in which the bonus depreciation deduction
22         (30% of the adjusted basis of the qualified property)
23         is taken on the taxpayer's federal income tax return
24         under subsection (k) of Section 168 of the Internal
25         Revenue Code and for each applicable taxable year
26         thereafter, an amount equal to "x", where:
27                 (1) "y" equals the amount of the depreciation
28             deduction taken for the taxable year on the
29             taxpayer's federal income tax return on property
30             for which the bonus depreciation deduction (30% of
31             the adjusted basis of the qualified property) was
32             taken in any year under subsection (k) of Section
33             168 of the Internal Revenue Code, but not including
34             the bonus depreciation deduction; and

 

 

09400SB0507sam003 - 35 - LRB094 08414 BDD 47246 a

1                 (2) "x" equals "y" multiplied by 30 and then
2             divided by 70 (or "y" multiplied by 0.429).
3             The aggregate amount deducted under this
4         subparagraph in all taxable years for any one piece of
5         property may not exceed the amount of the bonus
6         depreciation deduction (30% of the adjusted basis of
7         the qualified property) taken on that property on the
8         taxpayer's federal income tax return under subsection
9         (k) of Section 168 of the Internal Revenue Code;
10             (U) If the taxpayer reports a capital gain or loss
11         on the taxpayer's federal income tax return for the
12         taxable year based on a sale or transfer of property
13         for which the taxpayer was required in any taxable year
14         to make an addition modification under subparagraph
15         (E-10), then an amount equal to that addition
16         modification.
17             The taxpayer is allowed to take the deduction under
18         this subparagraph only once with respect to any one
19         piece of property;
20             (V) The amount of: (i) any interest income (net of
21         the deductions allocable thereto) taken into account
22         for the taxable year with respect to a transaction with
23         a taxpayer that is required to make an addition
24         modification with respect to such transaction under
25         Section 203(a)(2)(D-17), 203(b)(2)(E-12),
26         203(c)(2)(G-12), or 203(d)(2)(D-7), but not to exceed
27         the amount of such addition modification and (ii) any
28         income from intangible property (net of the deductions
29         allocable thereto) taken into account for the taxable
30         year with respect to a transaction with a taxpayer that
31         is required to make an addition modification with
32         respect to such transaction under Section
33         203(a)(2)(D-18), 203(b)(2)(E-13), 203(c)(2)(G-13), or
34         203(d)(2)(D-8), but not to exceed the amount of such

 

 

09400SB0507sam003 - 36 - LRB094 08414 BDD 47246 a

1         addition modification;
2             (W) An amount equal to the interest income taken
3         into account for the taxable year (net of the
4         deductions allocable thereto) with respect to
5         transactions with a foreign person who would be a
6         member of the taxpayer's unitary business group but for
7         the fact that the foreign person's business activity
8         outside the United States is 80% or more of that
9         person's total business activity, but not to exceed the
10         addition modification required to be made for the same
11         taxable year under Section 203(b)(2)(E-12) for
12         interest paid, accrued, or incurred, directly or
13         indirectly, to the same foreign person; and
14             (X) An amount equal to the income from intangible
15         property taken into account for the taxable year (net
16         of the deductions allocable thereto) with respect to
17         transactions with a foreign person who would be a
18         member of the taxpayer's unitary business group but for
19         the fact that the foreign person's business activity
20         outside the United States is 80% or more of that
21         person's total business activity, but not to exceed the
22         addition modification required to be made for the same
23         taxable year under Section 203(b)(2)(E-13) for
24         intangible expenses and costs paid, accrued, or
25         incurred, directly or indirectly, to the same foreign
26         person.
27         (3) Special rule. For purposes of paragraph (2) (A),
28     "gross income" in the case of a life insurance company, for
29     tax years ending on and after December 31, 1994, shall mean
30     the gross investment income for the taxable year.
 
31     (c) Trusts and estates.
32         (1) In general. In the case of a trust or estate, base
33     income means an amount equal to the taxpayer's taxable

 

 

09400SB0507sam003 - 37 - LRB094 08414 BDD 47246 a

1     income for the taxable year as modified by paragraph (2).
2         (2) Modifications. Subject to the provisions of
3     paragraph (3), the taxable income referred to in paragraph
4     (1) shall be modified by adding thereto the sum of the
5     following amounts:
6             (A) An amount equal to all amounts paid or accrued
7         to the taxpayer as interest or dividends during the
8         taxable year to the extent excluded from gross income
9         in the computation of taxable income;
10             (B) In the case of (i) an estate, $600; (ii) a
11         trust which, under its governing instrument, is
12         required to distribute all of its income currently,
13         $300; and (iii) any other trust, $100, but in each such
14         case, only to the extent such amount was deducted in
15         the computation of taxable income;
16             (C) An amount equal to the amount of tax imposed by
17         this Act to the extent deducted from gross income in
18         the computation of taxable income for the taxable year;
19             (D) The amount of any net operating loss deduction
20         taken in arriving at taxable income, other than a net
21         operating loss carried forward from a taxable year
22         ending prior to December 31, 1986;
23             (E) For taxable years in which a net operating loss
24         carryback or carryforward from a taxable year ending
25         prior to December 31, 1986 is an element of taxable
26         income under paragraph (1) of subsection (e) or
27         subparagraph (E) of paragraph (2) of subsection (e),
28         the amount by which addition modifications other than
29         those provided by this subparagraph (E) exceeded
30         subtraction modifications in such taxable year, with
31         the following limitations applied in the order that
32         they are listed:
33                 (i) the addition modification relating to the
34             net operating loss carried back or forward to the

 

 

09400SB0507sam003 - 38 - LRB094 08414 BDD 47246 a

1             taxable year from any taxable year ending prior to
2             December 31, 1986 shall be reduced by the amount of
3             addition modification under this subparagraph (E)
4             which related to that net operating loss and which
5             was taken into account in calculating the base
6             income of an earlier taxable year, and
7                 (ii) the addition modification relating to the
8             net operating loss carried back or forward to the
9             taxable year from any taxable year ending prior to
10             December 31, 1986 shall not exceed the amount of
11             such carryback or carryforward;
12             For taxable years in which there is a net operating
13         loss carryback or carryforward from more than one other
14         taxable year ending prior to December 31, 1986, the
15         addition modification provided in this subparagraph
16         (E) shall be the sum of the amounts computed
17         independently under the preceding provisions of this
18         subparagraph (E) for each such taxable year;
19             (F) For taxable years ending on or after January 1,
20         1989, an amount equal to the tax deducted pursuant to
21         Section 164 of the Internal Revenue Code if the trust
22         or estate is claiming the same tax for purposes of the
23         Illinois foreign tax credit under Section 601 of this
24         Act;
25             (G) An amount equal to the amount of the capital
26         gain deduction allowable under the Internal Revenue
27         Code, to the extent deducted from gross income in the
28         computation of taxable income;
29             (G-5) For taxable years ending after December 31,
30         1997, an amount equal to any eligible remediation costs
31         that the trust or estate deducted in computing adjusted
32         gross income and for which the trust or estate claims a
33         credit under subsection (l) of Section 201;
34             (G-10) For taxable years 2001 and thereafter, an

 

 

09400SB0507sam003 - 39 - LRB094 08414 BDD 47246 a

1         amount equal to the bonus depreciation deduction (30%
2         of the adjusted basis of the qualified property) taken
3         on the taxpayer's federal income tax return for the
4         taxable year under subsection (k) of Section 168 of the
5         Internal Revenue Code; and
6             (G-11) If the taxpayer reports a capital gain or
7         loss on the taxpayer's federal income tax return for
8         the taxable year based on a sale or transfer of
9         property for which the taxpayer was required in any
10         taxable year to make an addition modification under
11         subparagraph (G-10), then an amount equal to the
12         aggregate amount of the deductions taken in all taxable
13         years under subparagraph (R) with respect to that
14         property.
15             The taxpayer is required to make the addition
16         modification under this subparagraph only once with
17         respect to any one piece of property;
18             (G-12) For taxable years ending on or after
19         December 31, 2004, an amount equal to the amount
20         otherwise allowed as a deduction in computing base
21         income for interest paid, accrued, or incurred,
22         directly or indirectly, to a foreign person who would
23         be a member of the same unitary business group but for
24         the fact that the foreign person's business activity
25         outside the United States is 80% or more of the foreign
26         person's total business activity. The addition
27         modification required by this subparagraph shall be
28         reduced to the extent that dividends were included in
29         base income of the unitary group for the same taxable
30         year and received by the taxpayer or by a member of the
31         taxpayer's unitary business group (including amounts
32         included in gross income pursuant to Sections 951
33         through 964 of the Internal Revenue Code and amounts
34         included in gross income under Section 78 of the

 

 

09400SB0507sam003 - 40 - LRB094 08414 BDD 47246 a

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

 

 

09400SB0507sam003 - 41 - LRB094 08414 BDD 47246 a

1             person if the taxpayer establishes by clear and
2             convincing evidence that the adjustments are
3             unreasonable; or if the taxpayer and the Director
4             agree in writing to the application or use of an
5             alternative method of apportionment under Section
6             304(f).
7                 Nothing in this subsection shall preclude the
8             Director from making any other adjustment
9             otherwise allowed under Section 404 of this Act for
10             any tax year beginning after the effective date of
11             this amendment provided such adjustment is made
12             pursuant to regulation adopted by the Department
13             and such regulations provide methods and standards
14             by which the Department will utilize its authority
15             under Section 404 of this Act;
16             (G-13) For taxable years ending on or after
17         December 31, 2004, an amount equal to the amount of
18         intangible expenses and costs otherwise allowed as a
19         deduction in computing base income, and that were paid,
20         accrued, or incurred, directly or indirectly, to a
21         foreign person who would be a member of the same
22         unitary business group but for the fact that the
23         foreign person's business activity outside the United
24         States is 80% or more of that person's total business
25         activity. The addition modification required by this
26         subparagraph shall be reduced to the extent that
27         dividends were included in base income of the unitary
28         group for the same taxable year and received by the
29         taxpayer or by a member of the taxpayer's unitary
30         business group (including amounts included in gross
31         income pursuant to Sections 951 through 964 of the
32         Internal Revenue Code and amounts included in gross
33         income under Section 78 of the Internal Revenue Code)
34         with respect to the stock of the same person to whom

 

 

09400SB0507sam003 - 42 - LRB094 08414 BDD 47246 a

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

 

 

09400SB0507sam003 - 43 - LRB094 08414 BDD 47246 a

1                 intangible expense or cost to a person that is
2                 not a related member, and
3                     (b) the transaction giving rise to the
4                 intangible expense or cost between the
5                 taxpayer and the foreign person did not have as
6                 a principal purpose the avoidance of Illinois
7                 income tax, and is paid pursuant to a contract
8                 or agreement that reflects arm's-length terms;
9                 or
10                 (iii) any item of intangible expense or cost
11             paid, accrued, or incurred, directly or
12             indirectly, from a transaction with a foreign
13             person if the taxpayer establishes by clear and
14             convincing evidence, that the adjustments are
15             unreasonable; or if the taxpayer and the Director
16             agree in writing to the application or use of an
17             alternative method of apportionment under Section
18             304(f);
19                 Nothing in this subsection shall preclude the
20             Director from making any other adjustment
21             otherwise allowed under Section 404 of this Act for
22             any tax year beginning after the effective date of
23             this amendment provided such adjustment is made
24             pursuant to regulation adopted by the Department
25             and such regulations provide methods and standards
26             by which the Department will utilize its authority
27             under Section 404 of this Act;
28     and by deducting from the total so obtained the sum of the
29     following amounts:
30             (H) An amount equal to all amounts included in such
31         total pursuant to the provisions of Sections 402(a),
32         402(c), 403(a), 403(b), 406(a), 407(a) and 408 of the
33         Internal Revenue Code or included in such total as
34         distributions under the provisions of any retirement

 

 

09400SB0507sam003 - 44 - LRB094 08414 BDD 47246 a

1         or disability plan for employees of any governmental
2         agency or unit, or retirement payments to retired
3         partners, which payments are excluded in computing net
4         earnings from self employment by Section 1402 of the
5         Internal Revenue Code and regulations adopted pursuant
6         thereto;
7             (I) The valuation limitation amount;
8             (J) An amount equal to the amount of any tax
9         imposed by this Act which was refunded to the taxpayer
10         and included in such total for the taxable year;
11             (K) An amount equal to all amounts included in
12         taxable income as modified by subparagraphs (A), (B),
13         (C), (D), (E), (F) and (G) which are exempt from
14         taxation by this State either by reason of its statutes
15         or Constitution or by reason of the Constitution,
16         treaties or statutes of the United States; provided
17         that, in the case of any statute of this State that
18         exempts income derived from bonds or other obligations
19         from the tax imposed under this Act, the amount
20         exempted shall be the interest net of bond premium
21         amortization;
22             (L) With the exception of any amounts subtracted
23         under subparagraph (K), an amount equal to the sum of
24         all amounts disallowed as deductions by (i) Sections
25         171(a) (2) and 265(a)(2) of the Internal Revenue Code,
26         as now or hereafter amended, and all amounts of
27         expenses allocable to interest and disallowed as
28         deductions by Section 265(1) of the Internal Revenue
29         Code of 1954, as now or hereafter amended; and (ii) for
30         taxable years ending on or after August 13, 1999,
31         Sections 171(a)(2), 265, 280C, and 832(b)(5)(B)(i) of
32         the Internal Revenue Code; the provisions of this
33         subparagraph are exempt from the provisions of Section
34         250;

 

 

09400SB0507sam003 - 45 - LRB094 08414 BDD 47246 a

1             (M) An amount equal to those dividends included in
2         such total which were paid by a corporation which
3         conducts business operations in an Enterprise Zone or
4         zones created under the Illinois Enterprise Zone Act
5         and conducts substantially all of its operations in an
6         Enterprise Zone or Zones;
7             (N) An amount equal to any contribution made to a
8         job training project established pursuant to the Tax
9         Increment Allocation Redevelopment Act;
10             (O) 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 a
14         High Impact Business located in Illinois; provided
15         that dividends eligible for the deduction provided in
16         subparagraph (M) of paragraph (2) of this subsection
17         shall not be eligible for the deduction provided under
18         this subparagraph (O);
19             (P) An amount equal to the amount of the deduction
20         used to compute the federal income tax credit for
21         restoration of substantial amounts held under claim of
22         right for the taxable year pursuant to Section 1341 of
23         the Internal Revenue Code of 1986;
24             (Q) For taxable year 1999 and thereafter, an amount
25         equal to the amount of any (i) distributions, to the
26         extent includible in gross income for federal income
27         tax purposes, made to the taxpayer because of his or
28         her status as a victim of persecution for racial or
29         religious reasons by Nazi Germany or any other Axis
30         regime or as an heir of the victim and (ii) items of
31         income, to the extent includible in gross income for
32         federal income tax purposes, attributable to, derived
33         from or in any way related to assets stolen from,
34         hidden from, or otherwise lost to a victim of

 

 

09400SB0507sam003 - 46 - LRB094 08414 BDD 47246 a

1         persecution for racial or religious reasons by Nazi
2         Germany or any other Axis regime immediately prior to,
3         during, and immediately after World War II, including,
4         but not limited to, interest on the proceeds receivable
5         as insurance under policies issued to a victim of
6         persecution for racial or religious reasons by Nazi
7         Germany or any other Axis regime by European insurance
8         companies immediately prior to and during World War II;
9         provided, however, this subtraction from federal
10         adjusted gross income does not apply to assets acquired
11         with such assets or with the proceeds from the sale of
12         such assets; provided, further, this paragraph shall
13         only apply to a taxpayer who was the first recipient of
14         such assets after their recovery and who is a victim of
15         persecution for racial or religious reasons by Nazi
16         Germany or any other Axis regime or as an heir of the
17         victim. The amount of and the eligibility for any
18         public assistance, benefit, or similar entitlement is
19         not affected by the inclusion of items (i) and (ii) of
20         this paragraph in gross income for federal income tax
21         purposes. This paragraph is exempt from the provisions
22         of Section 250;
23             (R) For taxable years 2001 and thereafter, for the
24         taxable year in which the bonus depreciation deduction
25         (30% of the adjusted basis of the qualified property)
26         is taken on the taxpayer's federal income tax return
27         under subsection (k) of Section 168 of the Internal
28         Revenue Code and for each applicable taxable year
29         thereafter, an amount equal to "x", where:
30                 (1) "y" equals the amount of the depreciation
31             deduction taken for the taxable year on the
32             taxpayer's federal income tax return on property
33             for which the bonus depreciation deduction (30% of
34             the adjusted basis of the qualified property) was

 

 

09400SB0507sam003 - 47 - LRB094 08414 BDD 47246 a

1             taken in any year under subsection (k) of Section
2             168 of the Internal Revenue Code, but not including
3             the bonus depreciation deduction; and
4                 (2) "x" equals "y" multiplied by 30 and then
5             divided by 70 (or "y" multiplied by 0.429).
6             The aggregate amount deducted under this
7         subparagraph in all taxable years for any one piece of
8         property may not exceed the amount of the bonus
9         depreciation deduction (30% of the adjusted basis of
10         the qualified property) taken on that property on the
11         taxpayer's federal income tax return under subsection
12         (k) of Section 168 of the Internal Revenue Code;
13             (S) If the taxpayer reports a capital gain or loss
14         on the taxpayer's federal income tax return for the
15         taxable year based on a sale or transfer of property
16         for which the taxpayer was required in any taxable year
17         to make an addition modification under subparagraph
18         (G-10), then an amount equal to that addition
19         modification.
20             The taxpayer is allowed to take the deduction under
21         this subparagraph only once with respect to any one
22         piece of property;
23             (T) The amount of (i) any interest income (net of
24         the deductions allocable thereto) taken into account
25         for the taxable year with respect to a transaction with
26         a taxpayer that is required to make an addition
27         modification with respect to such transaction under
28         Section 203(a)(2)(D-17), 203(b)(2)(E-12),
29         203(c)(2)(G-12), or 203(d)(2)(D-7), but not to exceed
30         the amount of such addition modification and (ii) any
31         income from intangible property (net of the deductions
32         allocable thereto) taken into account for the taxable
33         year with respect to a transaction with a taxpayer that
34         is required to make an addition modification with

 

 

09400SB0507sam003 - 48 - LRB094 08414 BDD 47246 a

1         respect to such transaction under Section
2         203(a)(2)(D-18), 203(b)(2)(E-13), 203(c)(2)(G-13), or
3         203(d)(2)(D-8), but not to exceed the amount of such
4         addition modification;
5             (U) An amount equal to the interest income taken
6         into account for the taxable year (net of the
7         deductions allocable thereto) with respect to
8         transactions with a foreign person who would be a
9         member of the taxpayer's unitary business group but for
10         the fact the foreign person's business activity
11         outside the United States is 80% or more of that
12         person's total business activity, but not to exceed the
13         addition modification required to be made for the same
14         taxable year under Section 203(c)(2)(G-12) for
15         interest paid, accrued, or incurred, directly or
16         indirectly, to the same foreign person; and
17             (V) An amount equal to the income from intangible
18         property taken into account for the taxable year (net
19         of the deductions allocable thereto) with respect to
20         transactions with a foreign person who would be a
21         member of the taxpayer's unitary business group but for
22         the fact that the foreign person's business activity
23         outside the United States is 80% or more of that
24         person's total business activity, but not to exceed the
25         addition modification required to be made for the same
26         taxable year under Section 203(c)(2)(G-13) for
27         intangible expenses and costs paid, accrued, or
28         incurred, directly or indirectly, to the same foreign
29         person.
30         (3) Limitation. The amount of any modification
31     otherwise required under this subsection shall, under
32     regulations prescribed by the Department, be adjusted by
33     any amounts included therein which were properly paid,
34     credited, or required to be distributed, or permanently set

 

 

09400SB0507sam003 - 49 - LRB094 08414 BDD 47246 a

1     aside for charitable purposes pursuant to Internal Revenue
2     Code Section 642(c) during the taxable year.
 
3     (d) Partnerships.
4         (1) In general. In the case of a partnership, base
5     income means an amount equal to the taxpayer's taxable
6     income for the taxable year as modified by paragraph (2).
7         (2) Modifications. The taxable income referred to in
8     paragraph (1) shall be modified by adding thereto the sum
9     of the following amounts:
10             (A) An amount equal to all amounts paid or accrued
11         to the taxpayer as interest or dividends during the
12         taxable year to the extent excluded from gross income
13         in the computation of taxable income;
14             (B) An amount equal to the amount of tax imposed by
15         this Act to the extent deducted from gross income for
16         the taxable year;
17             (C) The amount of deductions allowed to the
18         partnership pursuant to Section 707 (c) of the Internal
19         Revenue Code in calculating its taxable income;
20             (D) An amount equal to the amount of the capital
21         gain deduction allowable under the Internal Revenue
22         Code, to the extent deducted from gross income in the
23         computation of taxable income;
24             (D-5) For taxable years 2001 and thereafter, an
25         amount equal to the bonus depreciation deduction (30%
26         of the adjusted basis of the qualified property) taken
27         on the taxpayer's federal income tax return for the
28         taxable year under subsection (k) of Section 168 of the
29         Internal Revenue Code;
30             (D-6) If the taxpayer reports a capital gain or
31         loss on the taxpayer's federal income tax return for
32         the taxable year based on a sale or transfer of
33         property for which the taxpayer was required in any

 

 

09400SB0507sam003 - 50 - LRB094 08414 BDD 47246 a

1         taxable year to make an addition modification under
2         subparagraph (D-5), then an amount equal to the
3         aggregate amount of the deductions taken in all taxable
4         years under subparagraph (O) with respect to that
5         property.
6             The taxpayer is required to make the addition
7         modification under this subparagraph only once with
8         respect to any one piece of property;
9             (D-7) For taxable years ending on or after December
10         31, 2004, an amount equal to the amount otherwise
11         allowed as a deduction in computing base income for
12         interest paid, accrued, or incurred, directly or
13         indirectly, to a foreign person who would be a member
14         of the same unitary business group but for the fact the
15         foreign person's business activity outside the United
16         States is 80% or more of the foreign person's total
17         business activity. The addition modification required
18         by this subparagraph shall be reduced to the extent
19         that dividends were included in base income of the
20         unitary group for the same taxable year and received by
21         the taxpayer or by a member of the taxpayer's unitary
22         business group (including amounts included in gross
23         income pursuant to Sections 951 through 964 of the
24         Internal Revenue Code and amounts included in gross
25         income under Section 78 of the Internal Revenue Code)
26         with respect to the stock of the same person to whom
27         the interest was paid, accrued, or incurred.
28             This paragraph shall not apply to the following:
29                 (i) an item of interest paid, accrued, or
30             incurred, directly or indirectly, to a foreign
31             person who is subject in a foreign country or
32             state, other than a state which requires mandatory
33             unitary reporting, to a tax on or measured by net
34             income with respect to such interest; or

 

 

09400SB0507sam003 - 51 - LRB094 08414 BDD 47246 a

1                 (ii) an item of interest paid, accrued, or
2             incurred, directly or indirectly, to a foreign
3             person if the taxpayer can establish, based on a
4             preponderance of the evidence, both of the
5             following:
6                     (a) the foreign person, during the same
7                 taxable year, paid, accrued, or incurred, the
8                 interest to a person that is not a related
9                 member, and
10                     (b) the transaction giving rise to the
11                 interest expense between the taxpayer and the
12                 foreign person did not have as a principal
13                 purpose the avoidance of Illinois income tax,
14                 and is paid pursuant to a contract or agreement
15                 that reflects an arm's-length interest rate
16                 and 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 or
20             agreement entered into at arm's-length rates and
21             terms and the principal purpose for the payment is
22             not federal or Illinois tax avoidance; or
23                 (iv) an item of interest paid, accrued, or
24             incurred, directly or indirectly, to a foreign
25             person if the taxpayer establishes by clear and
26             convincing evidence that the adjustments are
27             unreasonable; or if the taxpayer and the Director
28             agree in writing to the application or use of an
29             alternative method of apportionment under Section
30             304(f).
31                 Nothing in this subsection shall preclude the
32             Director from making any other adjustment
33             otherwise allowed under Section 404 of this Act for
34             any tax year beginning after the effective date of

 

 

09400SB0507sam003 - 52 - LRB094 08414 BDD 47246 a

1             this amendment provided such adjustment is made
2             pursuant to regulation adopted by the Department
3             and such regulations provide methods and standards
4             by which the Department will utilize its authority
5             under Section 404 of this Act; and
6             (D-8) For taxable years ending on or after December
7         31, 2004, an amount equal to the amount of intangible
8         expenses and costs otherwise allowed as a deduction in
9         computing base income, and that were paid, accrued, or
10         incurred, directly or indirectly, to a foreign person
11         who would be a member of the same unitary business
12         group but for the fact that the foreign person's
13         business activity outside the United States is 80% or
14         more of that person's total business activity. The
15         addition modification required by this subparagraph
16         shall be reduced to the extent that dividends were
17         included in base income of the unitary group for the
18         same taxable year and received by the taxpayer or by a
19         member of the taxpayer's unitary business group
20         (including amounts included in gross income pursuant
21         to Sections 951 through 964 of the Internal Revenue
22         Code and amounts included in gross income under Section
23         78 of the Internal Revenue Code) with respect to the
24         stock of the same person to whom the intangible
25         expenses and costs were directly or indirectly paid,
26         incurred or accrued. The preceding sentence shall not
27         apply to the extent that the same dividends caused a
28         reduction to the addition modification required under
29         Section 203(d)(2)(D-7) of this Act. As used in this
30         subparagraph, the term "intangible expenses and costs"
31         includes (1) expenses, losses, and costs for, or
32         related to, the direct or indirect acquisition, use,
33         maintenance or management, ownership, sale, exchange,
34         or any other disposition of intangible property; (2)

 

 

09400SB0507sam003 - 53 - LRB094 08414 BDD 47246 a

1         losses incurred, directly or indirectly, from
2         factoring transactions or discounting transactions;
3         (3) royalty, patent, technical, and copyright fees;
4         (4) licensing fees; and (5) other similar expenses and
5         costs. For purposes of this subparagraph, "intangible
6         property" includes patents, patent applications, trade
7         names, trademarks, service marks, copyrights, mask
8         works, trade secrets, and similar types of intangible
9         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 foreign
14             person who is subject in a foreign country or
15             state, other than a state which requires mandatory
16             unitary reporting, to a tax on or measured by net
17             income 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 foreign person during the same
24                 taxable year paid, accrued, or incurred, the
25                 intangible expense or cost to a person that is
26                 not a related member, and
27                     (b) the transaction giving rise to the
28                 intangible expense or cost between the
29                 taxpayer and the foreign person did not have as
30                 a principal purpose the avoidance of Illinois
31                 income tax, and is paid pursuant to a contract
32                 or agreement that reflects arm's-length terms;
33                 or
34                 (iii) any item of intangible expense or cost

 

 

09400SB0507sam003 - 54 - LRB094 08414 BDD 47246 a

1             paid, accrued, or incurred, directly or
2             indirectly, from a transaction with a foreign
3             person if the taxpayer establishes by clear and
4             convincing evidence, that the adjustments are
5             unreasonable; or if the taxpayer and the Director
6             agree in writing to the application or use of an
7             alternative method of apportionment under Section
8             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 for
12             any tax year beginning after the effective date of
13             this amendment provided such adjustment is made
14             pursuant to regulation adopted by the Department
15             and such regulations provide methods and standards
16             by which the Department will utilize its authority
17             under Section 404 of this Act;
18     and by deducting from the total so obtained the following
19     amounts:
20             (E) The valuation limitation amount;
21             (F) An amount equal to the amount of any tax
22         imposed by this Act which was refunded to the taxpayer
23         and included in such total for the taxable year;
24             (G) An amount equal to all amounts included in
25         taxable income as modified by subparagraphs (A), (B),
26         (C) and (D) which are exempt from taxation by this
27         State either by reason of its statutes or Constitution
28         or by reason of the Constitution, treaties or statutes
29         of the United States; provided that, in the case of any
30         statute of this State that exempts income derived from
31         bonds or other obligations from the tax imposed under
32         this Act, the amount exempted shall be the interest net
33         of bond premium amortization;
34             (H) Any income of the partnership which

 

 

09400SB0507sam003 - 55 - LRB094 08414 BDD 47246 a

1         constitutes personal service income as defined in
2         Section 1348 (b) (1) of the Internal Revenue Code (as
3         in effect December 31, 1981) or a reasonable allowance
4         for compensation paid or accrued for services rendered
5         by partners to the partnership, whichever is greater;
6             (I) An amount equal to all amounts of income
7         distributable to an entity subject to the Personal
8         Property Tax Replacement Income Tax imposed by
9         subsections (c) and (d) of Section 201 of this Act
10         including amounts distributable to organizations
11         exempt from federal income tax by reason of Section
12         501(a) of the Internal Revenue Code;
13             (J) With the exception of any amounts subtracted
14         under subparagraph (G), an amount equal to the sum of
15         all amounts disallowed as deductions by (i) Sections
16         171(a) (2), and 265(2) of the Internal Revenue Code of
17         1954, as now or hereafter amended, and all amounts of
18         expenses allocable to interest and disallowed as
19         deductions by Section 265(1) of the Internal Revenue
20         Code, as now or hereafter amended; and (ii) for taxable
21         years ending on or after August 13, 1999, Sections
22         171(a)(2), 265, 280C, and 832(b)(5)(B)(i) of the
23         Internal Revenue Code; the provisions of this
24         subparagraph are exempt from the provisions of Section
25         250;
26             (K) An amount equal to those dividends included in
27         such total which were paid by a corporation which
28         conducts business operations in an Enterprise Zone or
29         zones created under the Illinois Enterprise Zone Act,
30         enacted by the 82nd General Assembly, and conducts
31         substantially all of its operations in an Enterprise
32         Zone or Zones;
33             (L) An amount equal to any contribution made to a
34         job training project established pursuant to the Real

 

 

09400SB0507sam003 - 56 - LRB094 08414 BDD 47246 a

1         Property Tax Increment Allocation Redevelopment Act;
2             (M) An amount equal to those dividends included in
3         such total that were paid by a corporation that
4         conducts business operations in a federally designated
5         Foreign Trade Zone or Sub-Zone and that is designated a
6         High Impact Business located in Illinois; provided
7         that dividends eligible for the deduction provided in
8         subparagraph (K) of paragraph (2) of this subsection
9         shall not be eligible for the deduction provided under
10         this subparagraph (M);
11             (N) An amount equal to the amount of the deduction
12         used to compute the federal income tax credit for
13         restoration of substantial amounts held under claim of
14         right for the taxable year pursuant to Section 1341 of
15         the Internal Revenue Code of 1986;
16             (O) For taxable years 2001 and thereafter, for the
17         taxable year in which the bonus depreciation deduction
18         (30% of the adjusted basis of the qualified property)
19         is taken on the taxpayer's federal income tax return
20         under subsection (k) of Section 168 of the Internal
21         Revenue Code and for each applicable taxable year
22         thereafter, an amount equal to "x", where:
23                 (1) "y" equals the amount of the depreciation
24             deduction taken for the taxable year on the
25             taxpayer's federal income tax return on property
26             for which the bonus depreciation deduction (30% of
27             the adjusted basis of the qualified property) was
28             taken in any year under subsection (k) of Section
29             168 of the Internal Revenue Code, but not including
30             the bonus depreciation deduction; and
31                 (2) "x" equals "y" multiplied by 30 and then
32             divided by 70 (or "y" multiplied by 0.429).
33             The aggregate amount deducted under this
34         subparagraph in all taxable years for any one piece of

 

 

09400SB0507sam003 - 57 - LRB094 08414 BDD 47246 a

1         property may not exceed the amount of the bonus
2         depreciation deduction (30% of the adjusted basis of
3         the qualified property) taken on that property on the
4         taxpayer's federal income tax return under subsection
5         (k) of Section 168 of the Internal Revenue Code;
6             (P) If the taxpayer reports a capital gain or loss
7         on the taxpayer's federal income tax return for the
8         taxable year based on a sale or transfer of property
9         for which the taxpayer was required in any taxable year
10         to make an addition modification under subparagraph
11         (D-5), then an amount equal to that addition
12         modification.
13             The taxpayer is allowed to take the deduction under
14         this subparagraph only once with respect to any one
15         piece of property;
16             (Q) 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 with
19         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 and (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 that
27         is required to make an addition modification with
28         respect to such transaction under Section
29         203(a)(2)(D-18), 203(b)(2)(E-13), 203(c)(2)(G-13), or
30         203(d)(2)(D-8), but not to exceed the amount of such
31         addition modification;
32             (R) An amount equal to the interest income taken
33         into account for the taxable year (net of the
34         deductions allocable thereto) with respect to

 

 

09400SB0507sam003 - 58 - LRB094 08414 BDD 47246 a

1         transactions with a foreign person who would be a
2         member of the taxpayer's unitary business group but for
3         the fact that the foreign person's business activity
4         outside the United States is 80% or more of that
5         person's total business activity, but not to exceed the
6         addition modification required to be made for the same
7         taxable year under Section 203(d)(2)(D-7) for interest
8         paid, accrued, or incurred, directly or indirectly, to
9         the same foreign person; and
10             (S) 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 a foreign person who would be a
14         member of the taxpayer's unitary business group but for
15         the fact that the foreign person's business activity
16         outside the United States is 80% or more of that
17         person's total business activity, but not to exceed the
18         addition modification required to be made for the same
19         taxable year under Section 203(d)(2)(D-8) for
20         intangible expenses and costs paid, accrued, or
21         incurred, directly or indirectly, to the same foreign
22         person.
 
23     (e) Gross income; adjusted gross income; taxable income.
24         (1) In general. Subject to the provisions of paragraph
25     (2) and subsection (b) (3), for purposes of this Section
26     and Section 803(e), a taxpayer's gross income, adjusted
27     gross income, or taxable income for the taxable year shall
28     mean the amount of gross income, adjusted gross income or
29     taxable income properly reportable for federal income tax
30     purposes for the taxable year under the provisions of the
31     Internal Revenue Code. Taxable income may be less than
32     zero. However, for taxable years ending on or after
33     December 31, 1986, net operating loss carryforwards from

 

 

09400SB0507sam003 - 59 - LRB094 08414 BDD 47246 a

1     taxable years ending prior to December 31, 1986, may not
2     exceed the sum of federal taxable income for the taxable
3     year before net operating loss deduction, plus the excess
4     of addition modifications over subtraction modifications
5     for the taxable year. For taxable years ending prior to
6     December 31, 1986, taxable income may never be an amount in
7     excess of the net operating loss for the taxable year as
8     defined in subsections (c) and (d) of Section 172 of the
9     Internal Revenue Code, provided that when taxable income of
10     a corporation (other than a Subchapter S corporation),
11     trust, or estate is less than zero and addition
12     modifications, other than those provided by subparagraph
13     (E) of paragraph (2) of subsection (b) for corporations or
14     subparagraph (E) of paragraph (2) of subsection (c) for
15     trusts and estates, exceed subtraction modifications, an
16     addition modification must be made under those
17     subparagraphs for any other taxable year to which the
18     taxable income less than zero (net operating loss) is
19     applied under Section 172 of the Internal Revenue Code or
20     under subparagraph (E) of paragraph (2) of this subsection
21     (e) applied in conjunction with Section 172 of the Internal
22     Revenue Code.
23         (2) Special rule. For purposes of paragraph (1) of this
24     subsection, the taxable income properly reportable for
25     federal income tax purposes shall mean:
26             (A) Certain life insurance companies. In the case
27         of a life insurance company subject to the tax imposed
28         by Section 801 of the Internal Revenue Code, life
29         insurance company taxable income, plus the amount of
30         distribution from pre-1984 policyholder surplus
31         accounts as calculated under Section 815a of the
32         Internal Revenue Code;
33             (B) Certain other insurance companies. In the case
34         of mutual insurance companies subject to the tax

 

 

09400SB0507sam003 - 60 - LRB094 08414 BDD 47246 a

1         imposed by Section 831 of the Internal Revenue Code,
2         insurance company taxable income;
3             (C) Regulated investment companies. In the case of
4         a regulated investment company subject to the tax
5         imposed by Section 852 of the Internal Revenue Code,
6         investment company taxable income;
7             (D) Real estate investment trusts. In the case of a
8         real estate investment trust subject to the tax imposed
9         by Section 857 of the Internal Revenue Code, real
10         estate investment trust taxable income;
11             (E) Consolidated corporations. In the case of a
12         corporation which is a member of an affiliated group of
13         corporations filing a consolidated income tax return
14         for the taxable year for federal income tax purposes,
15         taxable income determined as if such corporation had
16         filed a separate return for federal income tax purposes
17         for the taxable year and each preceding taxable year
18         for which it was a member of an affiliated group. For
19         purposes of this subparagraph, the taxpayer's separate
20         taxable income shall be determined as if the election
21         provided by Section 243(b) (2) of the Internal Revenue
22         Code had been in effect for all such years;
23             (F) Cooperatives. In the case of a cooperative
24         corporation or association, the taxable income of such
25         organization determined in accordance with the
26         provisions of Section 1381 through 1388 of the Internal
27         Revenue Code;
28             (G) Subchapter S corporations. In the case of: (i)
29         a Subchapter S corporation for which there is in effect
30         an election for the taxable year under Section 1362 of
31         the Internal Revenue Code, the taxable income of such
32         corporation determined in accordance with Section
33         1363(b) of the Internal Revenue Code, except that
34         taxable income shall take into account those items

 

 

09400SB0507sam003 - 61 - LRB094 08414 BDD 47246 a

1         which are required by Section 1363(b)(1) of the
2         Internal Revenue Code to be separately stated; and (ii)
3         a Subchapter S corporation for which there is in effect
4         a federal election to opt out of the provisions of the
5         Subchapter S Revision Act of 1982 and have applied
6         instead the prior federal Subchapter S rules as in
7         effect on July 1, 1982, the taxable income of such
8         corporation determined in accordance with the federal
9         Subchapter S rules as in effect on July 1, 1982; and
10             (H) Partnerships. In the case of a partnership,
11         taxable income determined in accordance with Section
12         703 of the Internal Revenue Code, except that taxable
13         income shall take into account those items which are
14         required by Section 703(a)(1) to be separately stated
15         but which would be taken into account by an individual
16         in calculating his taxable income.
17         (3) Recapture of business expenses on disposition of
18     asset or business. Notwithstanding any other law to the
19     contrary, if in prior years income from an asset or
20     business has been classified as business income and in a
21     later year is demonstrated to be non-business income, then
22     all expenses, without limitation, deducted in such later
23     year and in the 2 immediately preceding taxable years
24     related to that asset or business that generated the
25     non-business income shall be added back and recaptured as
26     business income in the year of the disposition of the asset
27     or business. Such amount shall be apportioned to Illinois
28     using the greater of the apportionment fraction computed
29     for the business under Section 304 of this Act for the
30     taxable year or the average of the apportionment fractions
31     computed for the business under Section 304 of this Act for
32     the taxable year and for the 2 immediately preceding
33     taxable years.
34     (f) Valuation limitation amount.

 

 

09400SB0507sam003 - 62 - LRB094 08414 BDD 47246 a

1         (1) In general. The valuation limitation amount
2     referred to in subsections (a) (2) (G), (c) (2) (I) and
3     (d)(2) (E) is an amount equal to:
4             (A) The sum of the pre-August 1, 1969 appreciation
5         amounts (to the extent consisting of gain reportable
6         under the provisions of Section 1245 or 1250 of the
7         Internal Revenue Code) for all property in respect of
8         which such gain was reported for the taxable year; plus
9             (B) The lesser of (i) the sum of the pre-August 1,
10         1969 appreciation amounts (to the extent consisting of
11         capital gain) for all property in respect of which such
12         gain was reported for federal income tax purposes for
13         the taxable year, or (ii) the net capital gain for the
14         taxable year, reduced in either case by any amount of
15         such gain included in the amount determined under
16         subsection (a) (2) (F) or (c) (2) (H).
17         (2) Pre-August 1, 1969 appreciation amount.
18             (A) If the fair market value of property referred
19         to in paragraph (1) was readily ascertainable on August
20         1, 1969, the pre-August 1, 1969 appreciation amount for
21         such property is the lesser of (i) the excess of such
22         fair market value over the taxpayer's basis (for
23         determining gain) for such property on that date
24         (determined under the Internal Revenue Code as in
25         effect on that date), or (ii) the total gain realized
26         and reportable for federal income tax purposes in
27         respect of the sale, exchange or other disposition of
28         such property.
29             (B) If the fair market value of property referred
30         to in paragraph (1) was not readily ascertainable on
31         August 1, 1969, the pre-August 1, 1969 appreciation
32         amount for such property is that amount which bears the
33         same ratio to the total gain reported in respect of the
34         property for federal income tax purposes for the

 

 

09400SB0507sam003 - 63 - LRB094 08414 BDD 47246 a

1         taxable year, as the number of full calendar months in
2         that part of the taxpayer's holding period for the
3         property ending July 31, 1969 bears to the number of
4         full calendar months in the taxpayer's entire holding
5         period for the property.
6             (C) The Department shall prescribe such
7         regulations as may be necessary to carry out the
8         purposes of this paragraph.
 
9     (g) Double deductions. Unless specifically provided
10 otherwise, nothing in this Section shall permit the same item
11 to be deducted more than once.
 
12     (h) Legislative intention. Except as expressly provided by
13 this Section there shall be no modifications or limitations on
14 the amounts of income, gain, loss or deduction taken into
15 account in determining gross income, adjusted gross income or
16 taxable income for federal income tax purposes for the taxable
17 year, or in the amount of such items entering into the
18 computation of base income and net income under this Act for
19 such taxable year, whether in respect of property values as of
20 August 1, 1969 or otherwise.
21 (Source: P.A. 92-16, eff. 6-28-01; 92-244, eff. 8-3-01; 92-439,
22 eff. 8-17-01; 92-603, eff. 6-28-02; 92-626, eff. 7-11-02;
23 92-651, eff. 7-11-02; 92-846, eff. 8-23-02; 93-812, eff.
24 7-26-04; 93-840, eff. 7-30-04; revised 10-12-04.)
 
25     Section 99. Effective date. This Act takes effect upon
26 becoming law.".